Labor Law 1 A2010
SECTION 14: TERMINATION OF EMPLOYMENT
A. GENERAL CONCEPT
14.01 SECURITY OF TENURE
A. NATURE OF SECURITY OF TENURE
SONZA V ABS-CBN BROADCASTING CORP
[PAGE 42]
ALHAMBRA INDUSTRIES V. NLRC (RUPISAN)
238 SCRA 232
BELLOSILLO; November 18, 1994
NATURE
Special civil action in the Supreme Court. Certiorari
FACTS
- Alhambra employed Rupisan as salesman on 6-mo probationary basis. Alhambra
made surprise audit, alleged violations were purportedly committed by him. He was
placed under 1-mo preventive suspension. He protested. He alleges that charges
against him had become academic when he was given clearance of all accountabilities.
- A day before end of suspension, he was terminated. He sued Alhambra.
- Labor Arbiter found that the termination was for just cause, but there was a violation of
due process (failure to furnish copy of audit report).
- Both parties appealed to NLRC which affirmed Arbiter’s findings.
ISSUE
WON NLRC committed grave abuse of discretion in sustaining finding of Labor Arbiter
that Rupisan was illegally dismissed but directing his reinstatement so he could have
explained
HELD
YES
- Employment is no longer just an ordinary human acctivity. For most families the main
source of their livelihood, employment has now leveled off with property rights which no
one may be deprived of without due process of law.
- Termination of employment is not anymore a mere cessation or severance of
contractual relationship but an economic phenomenon affecting members of the family.
This explains why under the broad principles of social justice the dismissal of employees
is adequately protected by the laws of the state.
- A termination without just cause entitles a worker to reinstatement regardless of
whether he was accorded due process. On the other hand, termination of a worker for
cause, even without procedural due process, does not warrant reinstatement, but the
employer incurs liability for damages.
- Since the Labor Arbiter found a valid ground for dismissal, it erred when it directed
reinstatement.
- To order reinstatement and compel the parties to start the procedure from step one
would be circuitous because almost invariably that same issue of validity of the ground of
dismissal would be brought back to the Labor Arbiter for adjudication. We laid down in
Wenphil Corporation v. NLRC3 that an otherwise justly grounded termination without
procedural due process would only sanction payment of damages
- Standards of due process in judicial as well as administrative proceedings have long
been established. In its bare minimum due process of law simply means giving notice
and opportunity to be heard before judgment is rendered.
- When the private respondent filed a complaint against petitioner, he was afforded the
right to an investigation by the labor arbiter.
- Although belatedly, private respondent was afforded due process before the labor
arbiter wherein the just cause of his dismissal had been established. With such finding, it
would be arbitrary and unfair to order his reinstatement with backwages.
- It will be highly prejudicial to the interests of the employer to impose on him the services
of an employee who has been shown to be guilty of the charges that warranted his
dismissal from employment. Indeed, it will demoralize the rank and file.
- However, the petitioner must nevertheless be held to account for failure to extend to
private respondent his right to an investigation before causing his dismissal.
- 186 - Disini
MANILA ELECTRIC COMPANY V NLRC (LOMABAO,
MASAYA)
186 SCRA 763
NARVASA; July 2, 1991
NATURE
CERTIORARI
FACTS
- Jose Masaya made an unauthorized electric service connection which supplied
electricity to the house of Antonio Sanchez (who paid the former Php 200 for making the
said connection.)
- Sanchez neither applied with Meralco for electric service nor made the requisite
deposit for it.
- This clandestine and illicit connection was eventually discovered by Meralco who then
charged him (through a letter) with a violation of the Company Code on Employee
Discipline, and thereafter conducted a formal investigation of the matter.
- Those who gave testimony at that investigation were Jose Masaya himself, and Renato
Repuyan, Meralco field investigator.
- Prior to being interrogated about the illegal connection and in response to preliminary
questions by the investigator, Masaya stated for the record that he had received the letter
accusing him of misconduct, that he had a copy of the code of discipline and understood
the nature of the precise charge against him, and that he did not need to be assisted by a
lawyer or a representative of his Union because he said that what he was about to say
was “pawing katotohanan lamang.”
- Repuyan testified on the fact of the undenied and indisputable installation of the illegal
electrical connection at the residence of Antonio Sanchez (his description of the manner
of its accomplishment being substantially the same as Masaya's own), and also, the
disclosures made to him by Sanchez's house helpers and the owner of the house
- After the investigation, and on the basis of the results thereof, Meralco filed with the
Ministry of Labor and Employment an application for clearance to terminate Masaya's
services, serving copy on the latter.
- Meralco also placed Masaya under preventive suspension.
- A week later, Masaya filed a complaint for illegal dismissal against Meralco.
- After the trial, LA Andres M. Lomabao rendered a decision in Masaya's favor; saying
that the record of the investigation conducted by Meralco should not be accorded
credence; that Meralco's contention that Masaya had "surreptitiously effected the direct
connection of . . . electric service" was not credible, because Masaya "was employed as
a bill collector, not as a lineman collector, hence, he does not know how to install
electrical connection;" and that the money received by Masaya from Sanchez (P200 or
P250) was not in consideration of any clandestine connection but was accepted as
"representation expenses in following up Mr. Sanchez' application for installation of
electric facilities . . . with the Engineer's Office at the City Hall of Manila.
- NLRC affirmed the Arbiter's decision; said that since Meralco was charging Masaya of a
criminal offense, it should prove beyond reasonable doubt (pbrd) said crime which it was
not able to do as it was not shown that Masaya was given the opportunity to be heard by
counsel or at least, a representative to confront his accuser; that based on the doctrine of
PBRD, there is no causal connection between Masaya' s duties to the crime imputed to
him, mere substantial evidence is insufficient to hold Masaya guilty of installing electrical
connection let alone deprive him of his right to labor."
ISSUE
WON the LA & the NLRC committed GABD in failing to take into consideration or
excluding Masaya’s admissions in their prononcement that Masaya was illegally
dismissed
HELD
YES
Reasoning
NLRC’S ERROR:
- Masaya was in truth asked if he wished to be assisted by a lawyer or a representative
of his Union, and his response was in the negative because, in his own words, " ang
sasabihin ko naman dito ay pawang katotohanan lamang "
- In administrative or quasi-judicial proceedings, PBRD is not required as basis for a
judgment of the legality of an employer's dismissal of an employee, nor even
preponderance of evidence, substantial evidence being sufficient.
- LC: ”the rules of evidence prevailing in courts of law or equity shall not be controlling
and it is the spirit and intention of this Code that the Commission and its members and
the Labor Arbiters shall use every and all reasonable means to ascertain the facts in
each case speedily and objectively and without regard to the technicalities of law or
procedure, all in the interest of due process. . . .
- SC: the ground for an employer's dismissal of an employee need be established only by
substantial evidence.
Labor Law 1 A2010
- It is absolutely of no consequence that the misconduct with which an employee may be
charged also constitutes a criminal offense
-The proceedings being administrative, the quantum of proof is governed by the
substantial evidence rule and not, as the respondent Commission seems to imagine, by
the rule governing judgments in criminal actions.
-The Court cannot close its eyes to the following facts of record, to wit:
1) the reality of the illegal electrical connection;
2) the letter to Masaya accusing him of misconduct
3) Masaya's acknowledgment that, having a copy of the company's code of discipline,
he understood the nature of the accusation against him, and his declining to be
assisted by a lawyer or a representative of his Union because, according to him, " ang
sasabihin ko naman dito ay pawang katotohanan lamang ;"
4) his voluntary admission that it was he who had made the illegal electrical
connection, describing the manner by which he had made it, and that he had received
P250.00 from the occupant of the house, Antonio Sanchez; and
5) his plea to the company for forgiveness for having made the illegal connection.
- on record: testimony regarding identification of Masaya by Antonio Sanchez' servants
and by Castañeda, the owner of the house occupied by Sanchez.
- nothing in the record to demonstrate that Masaya's admissions were made otherwise
than voluntarily.
- Such an offense is obviously of so serious a character as to merit the penalty of
dismissal from employment, as stated in the Meralco Code on Employee Discipline:
SECTION 7. Dishonesty. —
xxx xxx xxx
3) Directly or indirectly tampering with electric meters or metering installation of the
Company or the installation of any device, with the purpose of defrauding the
Company.
-The Labor Code pronounces "fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized representative," or "serious
misconduct" on the part of the employee to be lawful ground to terminate employment.
Ratio And this Court has held that the "dismissal of a dishonest employee is as much in
the interests of labor as it is of management. The labor force in any company is
protected and the workers' security of tenure strengthened when pilferage of equipment,
goods and products which endangers the viability of an employer and, therefore, the
workers' continued employment is minimized or eliminated and consequently labor-
management relations based on mutual trust and confidence are promoted."
(*IN short: Tenurial Security is not an absolute right for the law provides that an
employee may be dismissed for just cause. )
Disposition Petition for certiorari is GRANTED, the decisions of the NLRC and LA are
ANNULLED AND SET ASIDE, and the petitioner's termination of the employment of
private respondent is AUTHORIZED and APPROVED
CITYTRUST BANKING CORPORATION V NLRC (RUIZ)
258 SCRA 621
MENDOZA; July 11, 1996
NATURE
Special civil action in the Supreme Court. Certiorari
FACTS
- Private respondent Ruiz was the internal auditor of petitioner Citytrust Banking
Corporation. She was designated manager of the Quiapo branch of the bank, but she
refused the appointment on the ground that it was a demotion. As a consequence, she
was suspended and, upon clearance given by the Department of Labor, she was
terminated on November 8, 1974.
- Private respondent filed a complaint for illegal dismissal. She was ordered reinstated
as branch manager, the NLRC urging her to accept the position, otherwise her refusal
would be considered a ground for her loss of employment. Private respondent appealed
to the Minister of Labor (now Secretary of Labor and Employment) but again she lost.
Both parties then appealed to the Office of the President, which ordered petitioner to
reinstate private respondent to her former position as internal auditor and to pay her
backwages from the time her compensation was withheld up to the time of her
reinstatement.
- Petitioner moved for a reconsideration on the ground that the position of internal auditor
had been abolished (although the position of resident inspector was created in its stead),
and therefore in lieu of reinstatement, it should only be made to pay private respondent's
separation pay. The Office of the President modified its decision and ordered petitioner
to reinstate private respondent to a substantially equivalent position without loss of
seniority rights and to grant her the benefits and privileges to which she would be entitled
had she not been dismissed.
- Subsequently, petitioner reinstated private respondent as manager of the Auditing
Department. Private respondent accepted the appointment but questioned her
reinstatement to that position on the ground that it was not substantially equivalent to the
position of resident inspector (the position created in place of internal auditor). She also
- 187 - Disini
questioned the award of backwages as the report of the socio-economic analyst
allegedly did not include backwages from April 1974 to June 1974 when she was on
leave with pay and vacation and sick leave in 1974 and other fringe benefits to which she
was entitled before her termination.
- Labor Arbiter Apolinario N. Lumabao issued an order holding that the position of
manager of the Auditing Department was not substantially equivalent to that of resident
inspector. possible as it appears (that) the position is already filled up (,) to relocate
complainant to a substantially equivalent position with all the emoluments and privileges
of a Resident Inspector. Respondent is hereby further ordered to pay.
- The NLRC affirmed the Labor Arbiter's order with modification by ordering the following
to be added to the award: (a) Her vacation and sick leave privilege during the period of
her separation in accordance with the disposition hereinbefore stated in the body of this
Resolution, and (b)the normal increases which complainant would have received during
the period of her separation.
- In connection with the computation of the award in her favor, private respondent sought
the production of the bank's payrolls for 1974-1981. Her motion was opposed by
petitioner which offered instead P74,344.00, the total amount of backwages as computed
by the socio-economic analyst of the Department of Labor, plus P9,040.00 in
transportation allowance and P1,050.00 mid-year bonus for 1974.
- Private respondent refused the offer, hence the NLRC directed the analyst to compute
the award on the basis of the payrolls from 1974 to 1981. Petitioner appealed to the
NLRC en banc, but its petition was dismissed, on the ground that the order appealed
from was interlocutory.
- Petitioner filed a petition for Certiorari and Prohibition with this Court, assailing the
dismissal of its appeal. The petition was at first dismissed for lack of merit. Petitioner's
motion for reconsideration was also dismissed. On July 21, 1986 this Court modified its
decision and petitioner was ordered to pay private respondent "backwages limited to
three years without qualification or deduction at the salary rate of private respondent at
the time of dismissal."
- The Labor Arbiter issued an alias writ of execution after finding that the amount
corresponded to the amount found due private respondent in the decision of the NLRC
and the resolution of this Court, consisting of salary differentials and other fringe benefits
which were not paid to her from the time that she was reinstated on August 14, 1978 as
manager of the Auditing Department.
- Petitioner moved to quash the alias writ of execution. As its motion was denied, it filed
a petition for Injunction in the NLRC en banc to stop the implementation of the alias writ
of execution and prayed for a recomputation of the monetary award pursuant to this
Court's resolution of July 21, 1986. Its petition was, however, denied, as was its motion
for reconsideration, in the resolutions of the NLRC. Hence, this petition.
ISSUE
WON private respondent is entitled to only three years of backwages and no more
HELD
NO
- Private respondent is, in addition, entitled to reinstatement without loss of seniority
rights. Art. 280 of the Labor Code provides:
ART. 280. Security of Tenure. — In cases of regular employment, an employer shall
not terminate the services of an employee except for a just cause or when authorized
by this title. An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and to his backwages computed from the
time his compensation was withheld from him up to the time of his reinstatement.
(emphasis supplied)
- Backwages are for earnings which a worker has lost due to his illegal dismissal. Private
respondent was illegally dismissed from November 8, 1974 to August 13, 1978. In its
May 28, 1985 Report, the socio-economic analyst computed private respondent's
backwages for this period but he erroneously considered as backwages private
respondent's salary differential from August 14, 1978 to October 31, 1984. On August
14, 1978, private respondent had already been reinstated, albeit to a lower paying
position as manager of the Auditing Department. Hence the award of backwages should
be up to August 13, 1978 only. What she was entitled to receive after that date was the
difference between the salary of internal auditor (resident inspector) and that of manager
of the Auditing Department to which she was actually appointed. This position, as
already noted, was found to be not a substantially equivalent position to that of internal
auditor or resident inspector.
- The resolution of July 21, 1986 of this Court, which limited the award of backwages,
referred to the backwages for the period November 8, 1974 to August 13, 1978 as
component of the relief granted by law to those who are illegally dismissed. The Court at
that time limited the award of backwages to three years without qualification and
deduction to avoid delays incident to the determination of the earnings of the laid-off
employees during the pendency of the case and of deducting them from the backwages
later awarded.
- The second component of the relief granted under then Art. 280 of the Labor Code was
reinstatement either to their former position or if, this was not possible, to a substantially
equivalent position. Reinstatement contemplates a restoration to a position from which
Labor Law 1 A2010
one has been removed or separated so that the employee concerned may resume the
functions of the position he already held. Private respondent was the internal auditor of
petitioner at the time of her dismissal. Since this position had been replaced by the
position of resident inspector, private respondent should have been appointed resident
inspector. The position of manager of the Auditing Department to which she was
appointed was not a substantially equivalent position, as found by the Labor Arbiter in his
order of February 26, 1979 and later by the NLRC.
- The order to reinstate an employee to a former position or to a substantially equivalent
position is a positive mandate of the law with which strict compliance is required. This is
an affirmation that those deprived of a recognized and protected interest should be made
whole so that the employer will not profit from his misdeeds.
- Since private respondent retired from the bank on March 1, 1991, reinstatement is now
academic. She should therefore be paid the difference in pay of a resident inspector and
a manager of the Auditing Department from August 14, 1978 up to March 1, 1991.
Disposition Petition dismissed.
PHILIPS SEMICONDUCTORS V FADRIQUELA
[PAGE 77]
QUIJANO V BARTOLABAC
480 SCRA 204
TINGA; January 27, 1999
FACTS
- Quijano was employed by Mercury Drug Corporation as a warehouseman --- a
clerical/rank and file position. He was dismissed, so he filed a complaint with the NLRC
for illegal dismissal. The case reached the SC. In 1998, the SC ruled for his
reinstatement to his old position or to a substantially similar position. The SC denied the
company’s mfr, and came out with a resolution in 1999 for Quijano’s reinstatement.
- What’s this case all about, then? The respondents in this case are the LA and the
NLRC commissioner, respectively. Quijano filed a case against then for violation of
Canon 1 and Rule 1.01 of the Code of Professional Responsibility. WHY? They gave out
orders contrary to the resolution of the SC. The LA said to make him self-service
attendant because accdg to mercury there were only 4 positions open. All 4 positions
required college graduates, but LA said he thinks Quijano could handle the self-service
attendant job. The NLRC commissioner said since there are no available positions, he
should just be given separation pay.
ISSUE
WON Bartolabac & Quimpo erred
HELD
YES
- The decision of the SC was already final and executory. They had no place to use
discretion in executing a final and executory order of the Supreme Court. SUPREME. If
the final & executory orders of the SC would be second-guessed by other bodies, then
cases would never reach finality. The implementation of the final and executory decision
is mandatory. (The court was disappointed in the IBP recommendation to dismiss the
complaint against Bartolabac & Quimpo.)
- The SC won’t compel to instantly restore the position of warehouseman if it had already
been abolished. It ruled that Quijano should be reinstated to original or substantially
similar position. They took notice of Mercury Drug’s nationwide operation. SC couldn’t
believe that they wouldn’t have a position for Quijano.
- Our Constitution mandates that no person shall be deprived of life, liberty, and property
without due process of law. It should be borne in mind that employment is considered a
property right and cannot be taken away from the employee without going through legal
proceedings. In the instant case, respondents wittingly or unwittingly dispossessed
complainant of his source of living by not implementing his reinstatement. In the process,
respondents also run afoul of the public policy enshrined in the Constitution ensuring the
protection of the rights of workers and the promotion of their welfare.
Disposition Bartolabac & Quimpo suspended from the practice of law for 3 months for
violation of Canon 1 and Rule 1.01 of CPR.
B. IMPORTANCE OF EMPLOYMENT
- 188 - Disini
EMPLOYMENT
GONZALES V NLRC (ATENEO DE DAVAO
UNIVERSITY)
313 SCRA 169
BELLOSILLO; August 26, 1999
FACTS
- Lorlene Gonzales was a Grade 6 teacher in Ateneo de Davao University from 1974 to
1993, when she was terminated. In 1991, the Grade School Headmaster sent her a letter
informing her of 2 complaints from parents of her students for alleged use of corporal
punishment. She demanded to know who the parents were because Ateneo wouldn’t tell
her. When she found out that Ateneo was soliciting complaints from parents of her
students, she demanded an investigation.
- Ateneo sent her a notice of investigation, schedule, Committee composition, affidavits
of the parents, and the rules of procedure. She refused to take part in the investigation
unless the rules of procedure were revised. The committee, under advise of counsel, did
not revise the rules, since it had been used for a different teacher in the past. The
investigation went on, without her participation. In 1993, she was asked to tender her
resignation, otherwise she would be considered resigned.
- Lorlene filed for illegal dismissal with the LA. The LA found that she was indeed
illegally dismissed because although she was afforded due process, Ateneo failed to
establish substantial evidence as to Lorlene’s guilt. It was established that she is a very
good teacher, equipped with the appropriate educational qualifications, trainings,
seminars and work experiences. Such fact was affirmed by her present and former
students, their parents, colleagues and the former headmaster of the grade school. As a
matter of fact, 6 out of the nine 9 students and their parents/guardians retracted and
withdrew their statements.
- NLRC reversed LA’s decision, saying the dismissal was valid and legal.
ISSUE
WON dismissal was valid and legal
HELD
NO
- In view of the foregoing, the conclusion of the NLRC is unwarranted.
No due process – The committee refused to revise the rules of procedure. As a result,
Lorlene wasn’t afforded a chance defend herself and to examine / cross-examine the
accusers.
Failure to prove by substantial evidence – The evidence of Ateneo didn’t measure up to
the standard laid down in Ang Tibay v CIR: "substantial evidence is more than mere
scintilla. It means such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion."
Lorlene’s evidence – She was able to prove that she’s a competent and dedicated
teacher of Ateneo for 17 years.
- Employment is not merely a contractual relationship; it has assumed the nature of
property right. It may spell the difference whether or not a family will have food on their
table, roof over their heads and education for their children. It is for this reason that the
State has taken up measures to protect employees from unjustified dismissals. It is also
because of this that the right to security of tenure is not only a statutory right but, more
so, a constitutional right.
Disposition NLRC decision reversed and set aside. LA decision reinstated, affirmed and
adopted.
C. STATE REGULATION - RATIONALE
Labor Law 1 A2010
RATIONALE
LLOSA-TAN V SILAHIS INTERNATIONAL HOTEL
181 SCRA 738
PARAS; February 5, 1990
NATURE
Petition for certiorari seeking to set aside the decision and resolutions of the NLRC
FACTS
- The complainant was a front office cashier of Silahis International Hotel since
November 2, 1976 until her questioned dismissal on October 30, 1982.
- Since 1977, the Silahis International Hotel, had a standing corporate policy (Corporate
Policy No. 014), which orders all cashiers of SMC and its affiliates 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, because based on experience, a number of these checks
unfortunately bounce to the detriment of SMC and its affiliates.
- On August 22, 1982, while petitioner was on duty, she was approached by Mr.
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.
- 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.
- 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.
- Despite petitioner's explanation, her services were terminated effective October 30,
1982.
- Petitioner filed a complaint against respondents for illegal dismissal.
- Labor Arbiter Virginia G. Son rendered a decision in favor of petitioner.
- Hotel appealed the decision of the LA to the NLRC, and the NLRC rendered a decision
setting aside the decision of the Labor Arbiter and dismissing the complaint for illegal
dismissal for lack of merit
- Petitioner’s 2 MFRs having been denied, recourse was made to the SC
ISSUE
WON the acts of petitioner constitute gross negligence resulting in a valid ground for the
termination of her employment
HELD
NO
- Gross negligence has been defined as the want of any or slight care or the utter
disregard of consequences.
- 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.
- 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".
- 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.
- 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. Although the power to dismiss is a normal prerogative of the employer, the
- 189 - Disini
same is not without limitations. 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.
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. In addition,
security of tenure is a right of paramount value guaranteed by the Constitution and
should not be denied on mere speculation. Protection for 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.
Disposition The assailed decision of the NLRC is 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.
D. COVERAGE
CONTRACT EMPLOYEE
LABAJO V ALEJANDRO
165 SCRA 747
FELICIANO; September 26, 1988
NATURE
Petition for certiorari with preliminary injunction to review NLRC resolution
FACTS
- The 6 private respondents had all been contracted by the petitioners to work as
classroom teachers at the San Andres HS, a private learning institution situated in
Maramag, Bukidnon. They then filed a complaint before the Ministry of Labor and
Employment, alleging that they had each received a letter from petitioner Fr. Labajo,
Director of the San Andres High School which contained: “Please be informed that your
service at the San Andres High School will be terminated effective March 31,
1985.Thank you for all services you have rendered to the school.” Thus, their dismissal
was without justifiable cause and violated their rights to due process and security of
tenure.
Petitioners’ Claims
> It was admitted that they had not paid in full the employment benefits claimed by the
teachers. It was alleged, however, that private respondents, prior to their acceptance of
teaching jobs at the San Andres High School, "were already made aware that the school
could not give them everything due them under existing laws" and, hence, were estopped
from claiming such benefits.
> At time of their dismissal, they were merely probationary employees of the San Andres
HS whose services were terminated for just cause (upon expiration on 31 March 1985 of
their respective contracts and before any of them had achieved regular or permanent
status in their jobs.)
* Labor Arbiter ruled in favor of the teachers. It held that they were not probationary
employees, and that they could only be dismissed for cause and only after having been
accorded due process.
* NLRC affirmed Labor Arbiter’s decision.
ISSUE
WON the respondents were illegally dismissed
HELD
NO
Ratio As probationary and contractual employees, private respondents enjoyed security
of tenure, but only to a limited extent — i.e., they remained secure in their employment
during the period of time their respective contracts of employment remained in effect. As
petitioners were not under obligation to renew those contracts of employment, the
separation of private respondents in this case cannot be said to have been without
justifiable cause, much less illegal.
Reasoning
- Par 75 of the Manual of Regulations for Private Schools is applicable in this case: “ Full-
time teachers who have rendered three years of satisfactory service shall be considered
permanent.” This 3-year period is the maximum period or upper limit of probationary
employment allowed. Whether or not one has indeed attained permanent status in one's
employment, before the passage of 3 years, is a matter of proof.
- NONE of them had been able to accumulate at least 3 years of service with the San
Andres HS at the time of their separation.
Labor Law 1 A2010
- Private respondent AMAR argued that the 12 years of teaching experience he had
accumulated prior to his acceptance of employment at San Andres qualified him as a
regular employee thereof. This is not persuasive since it is the length of time Mr. Amar
has been teaching at San Andres that is material in determining whether or not he in fact
qualified as a regular employee.
- Respondent ALEJANDRO asserted that her appointment as "Night Principal" — after
having served a year thereat as a non-regular full-time teacher — amounted to a
promotion which raised her status to that of a regular employee. This is also not
persuasive because mere appointment as "Night Principal" is not, by itself and absent
any additional evidence, sufficient proof that her employment status had in fact been
upgraded from probationary to regular.
- The contracts of employment entered into by the San Andres HS separately with each
of the respondents stipulated, among others: (a) that employment of the individual
concerned took effect at the beginning of the school year, or sometime in the month of
June; and (b) that payment of that individual's salary would be made "every month for 10
months." We read these stipulations together to mean that such contracts each had an
effective term of ten (10) months, i.e., from June until either March or April of the
following year. New contracts for another period of ten months were negotiated between
them at the beginning of each school year. It does not appear from the record or from the
stipulations in those contracts, however, that renewal was obligatory upon either party.
- Private respondents claimed that Fr. Labajo’s allegedly "unusual antedated letter of
termination" did not sufficiently inform them of the reasons for their dismissal, nor did it
satisfy the due process requirements in termination cases. These contentions ignore the
fact that their employment was on a contractual basis and for a stipulated period of time.
- The use of the word "terminated" was inept and unfortunate but need not preclude
recognition of the real nature of that letter. Such letter was either a formal reminder that
their contracts were due to expire OR advance notice that such contracts would no
longer be renewed for the next school year OR both. Assuming that prior notice of
expiration of the contractual term was necessary in this case, we consider that Fr.
Labajo's letter substantially complied with that requirement.
* Since the six (6) private respondents were not illegally dismissed, the twin remedies of
reinstatement and backwages are not available to them. Dispositive NLRC Resolution is
SET ASIDE, except for the portion directing petitioners to pay P52,173.67 in favor of
private respondents.
PROBATIONARY EMPLOYEE
SKILLWORD MANAGEMENT AND MARKETING
CORPORATION V NLRC (MANUEL)
186 SCRA 465
MEDIALDEA; June 13, 1990
NATURE
Petition for certiorari
FACTS
- On June 24, 1983, Francisco Manuel was deployed to Saudi Arabia to work as driver
by petitioner Skillworld Management and Marketing, a duly licensed recruitment agency
operated by petitioners-spouses Serafin and Alicia Ramos. Upon his arrival in Jeddah,
Manuel signed a 2-year employment contract with his foreign employer, petitioner Shary
Limousine for a monthly basic salary of $300. 2 months later, Manuel was repatriated to
the Philippines. Upon his arrival in the Philippines, Manuel confronted the Ramoses who
promised to deploy him to other projects.
- After the lapse of more than one year without being deployed to other projects of
petitioners, Manuel filed a complaint with the POEA against petitioners for illegal
dismissal. He alleged that while he was employed as driver of Shary Limousine in its
branch at Jeddah he was stopped, and his driver's license sought for inspection, by
Saudi Arabian police. He showed the police two documents given to him by his
employer, Shary Limousine who made him believe that these pertained to a driver's
temporary license. However, Manuel was informed that the documents were not valid for
a drivers license. Together with eleven other drivers, they brought the matter before their
superiors. Three days after bringing the matter to his superior, respondent was ordered
to pack his things. He was taken to Riyadh and from there, repatriated to the Philippines.
Upon respondent's arrival in the Philippines, he requested the Ministry of Foreign Affairs
for a translation of what purported to be his driver's license. When translated it was only a
certification of employment with Shary Limousine in its branch at Jeddah.
- Petitioners alleged that Manuel’s dismissal was for a valid and just cause. Petitioners
alleged that Manuel was dismissed because of disobedience, absenteeism, refusal to
work and banding together to engage in concerted activities against the employer.
- POEA rendered judgment in favor of Manuel, directing petitioners to pay him $6,900.00
or its peso equivalent. Upon appeal, the NLRC affirmed said decision.
- 190 - Disini
- According to petitioners, because of the probationary status of the employment of
Manuel, he may be dismissed at any time. Furthermore, this agreement was contained in
paragraph four (4) of the employment contract signed by Manuel.
ISSUE
WON Manuel was illegally dismissed
HELD
YES
- There is no dispute that as a probationary employee, Manuel had but a limited tenure.
Although on probationary basis, however, he still enjoys the constitutional protection on
security of tenure. During his tenure of employment therefore, or before his contract
expires, he cannot be removed except for cause as provided for by law.
- The alleged causes for which private respondent was dismissed (disobedience,
absenteeism, refusal to work, etc.) were not established. Respondent NLRC found that
the purported temporary licenses to drive issued to Manuel and his co-drivers by their
employer-the Shary Rent a Car/Limousine, turned out to be mere certifications to the
effect that they are Filipino citizens who are holders of given passport numbers and that
they were sent to work with the Shary Limousine Branch in Jeddah. It is for this reason
that after being accosted twice at checkpoints by Saudi police, who informed complainant
and his co-drivers that the alleged temporary licenses were not valid, they brought the
matter first to their Lebanese superior and then to the Philippine Embassy. - - Further,
records show that Manuel reported for work regularly and even rendered regular
overtime services; that he did not even attempt to join a strike or any other form of mass
action while working in Jeddah, because he knew that the laws in Jeddah are very strict
and being a foreigner he did not have the courage to join much less lead a strike which is
prohibited there; that he and his co-workers merely inquired from the Philippine Embassy
why they were allowed to drive without licenses; and that their action prompted the
Philippine Embassy to write their employer, which is perfectly in order as it was designed
to protect them in foreign soil.
MANAGERIAL EMPLOYEE
INTERORIENT MARITIME ENTERPRISES INC V NLRC
(TAYONG)
235 SCRA 268
FELICIANO; August 11, 1994
NATURE
PETITION for reviewof a decision of the National Labor Relations Commission
FACTS
- Captain Rizalino Tayong, a licensed Master Mariner with experience in commanding
ocean-going vessels, was employed on 1989 by petitioners for 1 yr as stated in his
employment contract. He assumed command of petitioners’ vessel at the port of
Hongkong. His instructions were to replenish bunker and diesel fuel, to sail to South
Africa and there to load 120,000 metric tons of coal. However, while in HK and
unwarding cargo, he received a weather report that a storm would hit HK, so
precautionary measures were taken to secure the safety of the vessel and its crew,
considering that the vessel’s turbo-charger was leaking and the vessel was 14 yrs old.
He also followed-up the requisition by the former captain for supplies of oxygen and
acetylene necessary for the welding-repair of the turbo-charger and the economizer.
-The vessel then sailed from HK for Singapore. Captain Tayong reported a water leak
from M.E. Turbo Chapter No. 2 Exhaust gas casing so he was instructed to black off the
cooling water and maintain reduced RPM unless authorized by the owners. However, the
vessel stopped in mid-ocean for 6 hrs and 45 minutes due to a leaking economizer. He
was instructed to shut down the economizer and use the auxiliary boiler instead.
- The Chief Engineer reminded Captain Tayong that the oxygen and acetylene supplies
had not been delivered. He then informed the shipowner that the departure of the vessel
for South Africa may be affected because of the delay in the delivery of the supplies. The
shipowner advised Captain Tayong to contact its technical director who would provide a
solution for the supply of said oxygen and acetylene. The technical director
recommended to Captain Tayong that by shutting off the water to the turbo charger and
using the auxiliary boiler, there should be no further problem. Captain Tayong agreed to
the recommendation of the technical director, but communicated his reservations
regarding proceeding to South Africa without the requested supplies. So the shipowner
advised him to wait for the supplies.
- Finally, the vessel arrived at South Africa. However, Captain Tayong was instructed to
turn-over his post to the new captain, and was repatriated to the Philippines after serving
petitioners for around 2 wks. He was not informed of the charges against him, and was
just sent a letter after arriving in the Philippines. He therefore instituted a complaint for
illegal dismissal before the POEA, claiming his unpaid salary for the unexpired portion of
the written employment contract, plus attorney’s fees.
Labor Law 1 A2010 - 191 - Disini
- POEA: dismissed complaint, there was valid cause for his untimely repatriation (the adopts a course which, to the judgment of a wise and prudent man, is apparently the
company alleged that due to Captain Tayong’s refusal to sail immediately to South best for the interest of the persons for whom he acts in a given emergency, it may
Africa, the vessel was placed “off-hire” by the charterers, and the charterers refused to properly be said of the course so taken that it was in a mercantile sense necessary to
pay the charter hire or compensation corresponding to 12 hours, amounting to US take it."
$15,500.00.They fired Captain Tayong for lost of confidence; POEA believed that the - ON management prerogative: that prerogative is nevertheless not to be exercised, in
Captain’s concern for the oxygen and acetylene was not legitimate as these supplies the case at bar, at the cost of loss of Captain Tayong's rights under his contract with
were not necessary or indispensable for running the vessel.) petitioner's and under Philippine law.
- NLRC: reversed and set aside POEA decision because Captain Tayong had not been Disposition petitioners having failed to show grave abuse of discretion amounting to loss
afforded an opportunity to be heard and that no substantial evidenced was adduced to or excess of jurisdiction on the part of the NLRC in rendering its assailed decision, the
establish the basis for petitioners’ loss of trust or confidence. Captain had acted in Petition for Certiorari is hereby DISMISSED, for lack of merit. Costs against petitioners
accordance with his duties to maintain the seaworthiness of the vessel and to insure the
safety of the ship and crew. E. MANAGEMENT RIGHTS AND SECURITY OF
ISSUE TENURE
WON Captain Tayong was arbitrarily dismissed and without cause as reasonably
established in an appropriate investigation (whether or not Captain Tayong had
reasonable grounds to believe that the safety of the vessel and the crew under his MANAGEMENT RIGHTS AND SECURITY OF TENURE
command or the possibility of substantial delay at sea required him to wait for the
delivery of the supplies needed for the repair of the turbo-charger and the economizer COLEGIO DE SAN JUAN DE LETRAN V ASSN OF
before embarking on the long voyage from Singapore to South Africa)
EMPLOYEES AND FACULTY OF LETRAN
HELD 340 SCRA 587
YES KAPUNAN; September 18, 2000
Ratio It is well settled in this jurisdiction that confidential and managerial employees
cannot be arbitrarily dismissed at any time, and without cause as reasonably established
NATURE
in an appropriate investigation. Such employees, too, are entitled to security of tenure,
Petition for review on certiorari
fair standards of employment and the protection of labor laws.
Reasoning
FACTS
- Captain Tayong was denied any opportunity to defend himself. Petitioners curtly
- Private respondent Ambas, the newly elected president of the Association of
dismissed him from his command and summarily ordered his repatriation to the
Employees and Faculty of Letran (Union) wanted to continue the renegotiation of its CBA
Philippines without informing him of the charge or charges against him, and much less
with petitioner Colegio de San Juan de Letran (Letran) for the last 2 years of the CBA’s 5
giving him a chance to refute any such charge. In fact, it was only 2 months after his
year lifetime. However, petitioner claimed the CBA was already prepared for signing by
repatriation that Captain Tayong received a telegram dated 24 October 1989 from Inter-
the parties. The CBA was submitted to a referendum by the union members, who
Orient requiring him to explain why he delayed sailing to South Africa.
rejected it.
- NLRC’s conclusion was supported by substantial evidence: The official report of the
- Petitioner accused the union officers of bargaining in bad faith before the NLRC which
technical director, which stated that a disruption in the normal functioning of the vessel’s
decided in favor of petitioner but was later reversed on appeal with the NLRC.
turbo charger and economizer had prevented the full or regular operation of the vessel
- The Union notified the National Conciliation and Mediation Board (NCMB) of its
and that he was the one who recommended the reduction of RPM during the voyage to
intention to strike on the grounds of petitioner’s refusal to bargain. Later, the parties
South Africa instead of waiting in Singapore for the supplies that would permit shipboard
agreed to disregard the unsigned CBA and start negotiating a new 5 year CBA for which
repair of the malfunctioning machinery and equipment, supported NLRC’s conclusion
the Union submitted its proposals. Ambas protested a recent changing of her schedule
that Captain Tayong did not arbitrarily and maliciously delay the voyage to South Africa.
and petitioner sent the Union a letter dismissing Ambas for alleged insubordination after
- Captain Tayong's decision (arrived at after consultation with the vessel's Chief
which the Union amended its notice of strike to include the said dismissal.
Engineer) to wait seven (7) hours in Singapore for the delivery on board the Oceanic
- Both parties again discussed the ground rules for the CBA renegotiation but petitioner
Mindoro of the requisitioned supplies needed for the welding-repair, on board the ship, of
stopped the negotiations after purportedly receiving information that a new group of
the turbo-charger and the economizer equipment of the vessel, did not constitute merely
employees (ACEC) filed a petition for certification election, giving rise to the issue of
arbitrary, capricious or grossly insubordinate behavior on his part. In the view of the
majority representation of the employees.
NLRC, that decision of Captain Tayong did not constitute a legal basis for the summary
- The Union finally went on strike and the Sec. of Labor and Employment assumed
dismissal of Captain Tayong and for termination of his contract with petitioners prior to
jurisdiction, ordering those on strike to return to work and for petitioner to accept them
the expiration of the term thereof.
under the same terms before the strike. All were readmitted except Ambas. The Sec.
Obiter
issued an order declaring petitioner guilty of unfair labor practice and directing the
- The captain of a vessel is a confidential and managerial employee within the meaning
reinstatement of Ambas with backwages. Letran’s MFR was denied and the CA affirmed
of the above doctrine. A master or captain, for purposes of maritime commerce, is one
the Sec.’s decision, hence this petition.
who has command of a vessel. A captain commonly performs three (3) distinct roles: (1)
he is a general agent of the shipowner; (2) he is also commander and technical director
ISSUES
of the vessel; and (3) he is a representative of the country under whose flag he
1. WON petitioner is guilty of unfair labor practice by refusing to bargain with the union
navigates. Of these roles, by far the most important is the role performed by the captain
2. WON the termination of the Ambas amounts to an interference of the employee’s right
as commander of the vessel; for such role (which, to our mind, is analogous to that of
to self-organization
"Chief Executive Officer" [CEO] of a present-day corporate enterprise) has to do with the
operation and preservation of the vessel during its voyage and the protection of the
HELD
passengers (if any) and crew and cargo. In his role as general agent of the shipowner,
1. YES
the captain has authority to sign bills of lading, carry goods aboard and deal with the
- Petitioner is guilty of unfair labor practice by its stern refusal to bargain in good faith
freight earned, agree upon rates and decide whether to take cargo. The ship captain, as
with respondent union.
agent of the shipowner, has legal authority to enter into contracts with respect to the
- Article 252 defines collective bargaining as the performance of a mutual obligation to
vessel and the trading of the vessel, subject to applicable limitations established by
meet and convene promptly and expeditiously in good faith for the purpose of negotiating
statute, contract or instructions and regulations of the shipowner. To the captain is
an agreement. The Union, in sending its proposals during the 2 nd CBA negotiations, kept
committed the governance, care and management of the vessel. Clearly, the captain is
up its end of the bargain while Letran devised ways and means to prevent the
vested with both management and fiduciary functions.
negotiation.
- Indeed, if the ship captain is convinced, as a reasonably prudent and competent
- Letran also failed to make a timely reply to the Union’s proposals (no counter-proposal
mariner acting in good faith that the shipowner's or ship agent's instructions (insisted
a month later), violating Article 250 which requires such a reply within 10 days upon
upon by radio or telefax from their officers thousand of miles away) will result, in the very
receipt of a written notice of said proposals. Letran’s refusal to reply is an indication of
specific circumstances facing him, in imposing unacceptable risks of loss or serious
bad faith, showing a lack of sincere desire to negotiate.
danger to ship or crew, he cannot casually seek absolution from his responsibility, if a
- In a last ditch effort, Letran suspended the bargaining process on the ground that it
marine casualty occurs, in such instructions. 23
allegedly received information that ACEC had filed a petition for certification election. The
- Compagnie de Commerce v. Hamburg: xxx where by the force of circumstances, a man
mere filing of a petition for certification election does not ipso facto justify the suspension
has the duty cast upon him of taking some action for another, and under that obligation
Labor Law 1 A2010
of negotiations when there is no legitimate representation issue raised; also, such an
action for intervention had already prescribed.
2. YES
- While we recognize the right of the employer to terminate the services of an employee
for just cause, the dismissal of employees must be made within the parameters of law
and pursuant to the tenets of equity and fair play and must be exercised in good faith. It
must not amount to interfering with, restraining or coercing employees in the exercise of
their right to self-organization as it would amount to unlawful labor practice under Article
248.
-It would appear that Letran terminated Ambas in order to strip the union of a leader who
would fight for her co-workers’ rights at the bargaining table and frustrate their desire to
form a new CBA. The charge of insubordination was a mere ploy to give a color of
legality to the action to dismiss her. Management may have the prerogative to discipline
its employees for insubordination but when it interferes with employees’ right to self-
organization, it amounts to union-busting which is a prohibited act.
Disposition petition is DENIED for lack of merit
SAN MIGUEL BREWERY SALES FORCE UNION V
OPLE
170 SCRA 25
GRIÑO-AQUINO; February 8, 1989
FACTS
- A collective bargaining agreement was entered into by petitioner San Miguel
Corporation Sales Force Union and the private respondent, San Miguel Corporation.
One provision of the CBA was “employees within the appropriate bargaining unit shall be
entitled to a basic monthly compensation plus commission based on their respective
sales."
- Few months after the said CBA, the company introduced a marketing scheme known
as the "Complementary Distribution System" (CDS) whereby its beer products were
offered for sale directly to wholesalers through San Miguel's sales offices.
- The labor union filed a complaint for unfair labor practice in the Ministry of Labor, with a
notice of strike on the ground that the CDS was contrary to the existing marketing
scheme whereby the Route Salesmen were assigned specific territories within which to
sell their stocks of beer, and wholesalers had to buy beer products from them, not from
the company. It was alleged that the new marketing scheme violates Section 1, Article IV
of the collective bargaining agreement because the introduction of the CDS would reduce
the take-home pay of the salesmen and their truck helpers for the company would be
unfairly competing with them.
ISSUES
1. WON the CDS violates the collective bargaining agreement
2. WON it is an indirect way of busting the union
HELD
1. NO
- CDS is a valid exercise of management prerogatives:
Ratio Except as limited by special laws, an employer is free to regulate, according to his
own discretion and judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place and manner of work, tools to be used,
processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay-off of workers and the discipline, dismissal and recall of
work.
- So long as a company's management prerogatives are exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid agreements,
this Court will uphold them
2. NO
Ratio Nothing in the record as to suggest that the unilateral action of the employer in
inaugurating the new sales scheme was designed to discourage union organization or
diminish its influence, but rather it is undisputable that the establishment of such scheme
was part of its overall plan to improve efficiency and economy and at the same time gain
profit to the highest. While it may be admitted that the introduction of new sales plan
somewhat disturbed the present set-up, the change however was too insignificant as to
convince this Office to interpret that the innovation interferred with the worker's right to
self-organization.
Reasoning
- Petitioner failed to consider is the fact that corollary to the adoption of the assailed
marketing technique is the effort of the company to compensate whatever loss the
workers may suffer because of the new plan over and above than what has been
- 192 - Disini
provided in the collective bargaining agreement. To us, this is one indication that the
action of the management is devoid of any anti-union hues."
Disposition Dismissed
F. GUIDELINE ON IMPOSITION OF PENALTIES
VALIAO V CA
[PAGE 11]
FARROL V CA (RCPI)
325 SCRA 331
YNARES-SANTIAGA; February 10, 2000
FACTS
- Wenifrado Farrol was the station cashier of RCPI Cotabato City Station.
- There was a P50K cash shortage in the branch’s Peragram Petty Cash Funds. Farrol
was required to explain the cash shortage. He paid to P25K to RCPI
- He was then required to explain why he should not be dismissed. Petitioner wrote to the
Field Auditor stating that the missing funds were used for the payment of the retirement
benefits earlier referred by the Branch Manager and that he already paid P25k. After he
made 2 more payments of the cash shortage, he was placed under preventive
suspensions. He still made 2 payments of the balance.
- RCPI then sent Farrol a letter informing him of the termination of his services for
alleging that part of the cash shortage was used for payment of salaries and retirement
benefits, disregard of policies involving statistical reports, malversation/misappropriation
(which is a ground for dismissal), and loss of trust and confidence.
- Unaware of the termination letter, he requested his reinstatement since his preventive
suspension had expired. Ferrol even manifested his willingness to settle the case. RCPI
informed him that his employment had already been terminated. The conflict was sent to
the grievance committee. Two years later, it was submitted for voluntary arbitration.
- VA ruled in favor of Farrol. RCPI filed a petition for certiorari before the CA which
reversed VA decision. CA also dismissed MFR.
- Farrol now filed a petition for review on certiorari on the ground that his dismissal was
illegal because he was not afforded due process and that he cannot be held liable for the
loss of trust and confidence reposed in him.
ISSUE
WON he was illegally terminated
HELD
YES
- BOP resides on the employer to prove that there was valid cause for dismissal, and that
he was afforded the opportunity to be heard and defend himself.
- For the 1st notice, RCPI required petitioner to explain why he failed to account for the
shortage. The 2nd notice was that informing Farrol of his termination. it does not clearly
cite the reasons for dismissal, nor were there facts and circumstances in support thereof.
- Even assuming there was a breach of trust and confidence, there was no evidence that
Farrol was a managerial employee. The term “trust and confidence” is restricted to
managerial employees.
- RCPI alleges that under its rules, petitioner’s infarction is punishable by dismissal.
However, employer’s rules cannot preclude the state from inquiring whether strict and
rigid application or interpretation would be too harsh to the employee. This is Farrol’s 1st
offense, to which the Court holds that dismissal is too harsh and grossly disproportionate.
Disposition CA is REVERSED and SET ASIDE and new one entered REINSTATING the
decision of the Voluntary Arbitrator subject to the MODIFICATION that petitioner’s
separation pay be recomputed to include the period within which backwages are due. For
this purpose, this case is REMANDED to the Voluntary Arbitrator for proper computation
of backwages, separation pay, 13th month pay, sick leave conversion and vacation leave
conversion.
VH MANUFACTURING INC V NLRC (GAMIDO)
322 SCRA 417
DE LEON; January 19, 2000
Labor Law 1 A2010
NATURE
Before us is a petition for certiorari
FACTS
- Since November 5, 1985 Gamido was employed in VH Manufacturing’s business of
manufacturing liquefied petroleum gas (LPG) cylinders. He served as a quality control
inspector with the principal duty of inspecting LPG cylinders for any possible defects. His
service with the company was abruptly interrupted on February 14, 1995, when he was
served a notice of termination of his employment.
- His dismissal stemmed from an incident on February 10, 1995 wherein VH’s company
President, Alejandro Dy Juanco, allegedly caught private Gamido sleeping on the job. On
that same day, private respondent was asked through a written notice from the
petitioner’s Personnel Department to explain within twenty-four (24) hours why no
disciplinary action should be taken against him for his violation of Company Rule 15-b
which provides for a penalty of separation for sleeping during working hours. Without
delay, private respondent replied in a letter which reads: "Sir, ipagpaumanhin po ninyo
kung nakapikit ako sa aking puwesto dahil hinihintay ko po ang niliha hi Abreu para i
quality pasensiya na po kung hindi ko po namalayan ang pagdaan ninyo dahil maingay
po ang painting booth." Notwithstanding his foregoing reply, he was terminated.
- Feeling aggrieved, he filed a complaint for illegal dismissal, praying for reinstatement to
his position as quality control inspector. Labor Arbiter declared that Gamido’s dismissal is
anchored on a valid and just cause. NLRC reversed the decision.
ISSUE
WON Gamido’s dismissal was too harsh a penaltly for his violation of company rule 15-b
HELD
YES
- Basically, the reason cited for the dismissal of private respondent is sleeping on the job
in violation of Company Rule 15-b. But according to Gamido, he was not sleeping on
the job but was merely idle, waiting for the next cylinder to be checked.
- In view of the gravity of the penalty of separation, as provided by the Company Rules
and Regulation., in termination disputes, the burden of proof is always on the employer to
prove that the dismissal was for a just and valid cause. What is at stake here is not only
the job itself of the employee but also his regular income therefrom which is the means of
livelihood of his family.
- A thorough review of the record discloses that, contrary to the findings of the Labor
Arbiter, petitioner’s claim that private respondent slept on the job was not substantiated
by any convincing evidence other than the bare allegation of the officer.
- Next, VH’s reliance on the authorities it cited that sleeping on the job is always a valid
ground for dismissal, is misplaced. The authorities cited involved security guards whose
duty necessitates that they be awake and watchful at all times inasmuch as their
function, to use the words in Luzon Stevedoring Corp. v. Court of Industrial Relations , is
"to protect the company from pilferage or loss." Accordingly, the doctrine laid down in
those cases is not applicable to the case at bar.
- Finally, while an employer enjoys a wide latitude of discretion in the promulgation of
policies, rules and regulations on work-related activities of the employees, those
directives, however, must always be fair and reasonable, and the corresponding
penalties, when prescribed, must be commensurate to the offense involved and to the
degree of the infraction. In the case at bar, the dismissal meted out on private
respondent for allegedly sleeping on the job, under the attendant circumstances,
appears to be too harsh a penalty, considering that he was being held liable for first time,
after nine 9 of unblemished service, for an alleged offense which caused no prejudice to
the employer, aside from absence of substantiation of the alleged offense. Neither was it
shown that private respondent’s alleged negligence or neglect of duty, if any, was gross
and habitual. Thus, reinstatement is just and proper.
Disposition petition is hereby DISMISSED, and the challenged Decision and Order of
public respondent NLRC are AFFIRMED.
REYNO V MANILA ELECTRIC COMPANY
434 SCRA 660
SANDOVAL-GUTIERREZ; July 22, 2004
NATURE
- 193 - Disini
Petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure
FACTS
- Reyno was employed by MERALCO where he eventually occupied the position of
Assistant Squad Leader of Squad 12 at the Inspection Department. Petitioner and his
team of inspectors were in charge of monitoring and inspecting electric meters installed
at the premises of respondent’s customers; ensuring the accuracy of the electric
consumption recorded in these meters; and reporting and apprehending violators who
use insidious schemes or devices to reduce their electric consumption deliberately.
- Later, MERALCO implemented an incentive scheme aimed at encouraging its
inspectors to perform their duties zealously. Under this incentive scheme, the inspector
concerned shall be paid an additional 30-minute overtime pay for every submitted report
of major violation/s committed by customers against respondent.
- Roger Sacdalan, Senior Investigator of respondent’s Special Presidential Committee
(SPC), received several complaints against Gilbert Villapa, Leader of Squad 12, about an
illegal connection.
- SPC conducted an investigation wherein members of Squad 12 were summoned to
explain. However, they failed to establish Villapa’s involvement in such illegal
connection. Instead, their declarations pointed to Reyno’s irregular performance of his
duties.
- This prompted SPC to conduct clarificatory hearing. But the hearing was cancelled for
failure of Reyno’s counsel to appear despite notice. When the case was called for
hearing as scheduled, his counsel again failed to appear. He then opted to proceed with
the clarificatory hearing without the assistance of his counsel.
- After evaluating the records on hand, the SPC found petitioner guilty of dishonesty,
serious misconduct and willful breach of trust. Respondent then sent petitioner a notice
terminating his services.
- Reyno filed with the Labor Arbiter a complaint for illegal dismissal and payment of
overtime pay, premium pay for holidays and rest days, damages and attorney’s fees.
ISSUES
1. WON Reyno was deprived of his right to cross examine witnesses before the Labor
Arbiter
2. WON Reyno was illegally dismissed
HELD
1. NO
- His right to cross-examine the three witnesses, did not err as it was not required to
apply strictly the Rules of Evidence. At any rate, MERALCO had valid reasons why it did
not present those three witnesses during the proceedings before the Labor Arbiter
2. NO
- The standard of substantial evidence is satisfied where the employer, as in this case,
has reasonable ground to believe that the employee is responsible for the misconduct
and his participation therein renders him unworthy of trust and confidence demanded by
his position. Reyno violated MERALCO’s Code of Employee Discipline and committed
serious misconduct in the performance of his duties have been proved by the affidavits of
petitioner’s own subordinates in Squad 12 of which he was the Assistant Squad Leader.
Moreover, MERALCO had lost his trust and confidence in petitioner. Under Article 282 of
the Labor Code, as amended, these are just causes for his dismissal from the service.
- The longer an employee stays in the service of the company, the greater is his
responsibility for knowledge and compliance with the norms of conduct and the code of
discipline in the company.
- An employee’s length of service with the company even aggravates his offense. He
should have been more loyal to company from which he has derived his family bread and
butter for seventeen (17) years.
Disposition Petition is DENIED. The assailed Decision dated January 17, 2001 and
Resolution dated May 3, 2001 of the Court of Appeals in CA-G.R. SP No. 53987 are
hereby AFFIRMED.
FACTORS
ASSOCIATED LABOR UNION V NLRC
[PAGE 181]
PHILIPPINE LONG DISTANCE TELEPHONE V NLRC
(GABRIEL)
303 SCRA 9
QUISUMBING; February 11, 1999
NATURE
Labor Law 1 A2010
Appeal from the order of the NLRC
FACTS
- Private respondent, Enrique Gabriel, was foreman of petitioner PLDT and was a
supervisor with territorial responsibility for Camp Crame’s First to 20 th Avenue and
portions of Project 4, all located in Quezon City. On two occasions (September 5, 1989
and October 16, 1989) he ordered Medel Mercado and Juancho Jocson to install two
telephone lines each at Unit R, Facilities Center Building, located at Shaw Boulevard,
Mandaluyong.
- The ordered installations were investigated because (a) the Facilities Center Building
had no entrance cable facilities or conduit wires for telephone connection, (b)
Mandaluyong was not within Gabriel’s area of jurisdiction, and (c) installers Mercado and
Jocson were not under his direct supervision.
- During the investigation, Gabriel. while acknowledging responsibility for his action,
claimed that his actuation was motivated by the desire to provide customer satisfaction.
He also claimed that the telephones were installed after the documents of approval were
issued by PLDT. He dismissed from service on September 3, 1990 on the ground that he
committed grave misconduct, breach of trust, and violations of company rules and
regulations.
- Gabriel filed an illegal dismissal complaint with the Labor Arbiter on September 6, 1990.
Said Arbiter affirmed the dismissal but the same was reversed by the NLRC and ordered
PLDT to reinstate Gabriel to the position he held as at the time of the complained
dismissal, with full backwages, benefits, and proportionate privileges. Hence the appeal.
ISSUE
WON Gabriel is guilty of serious misconduct and/or breach of trust anent the irregular
installation of the telephones
HELD
NO
- The facts of the case do not point to any misconduct or breach of trust on the part of
Gabriel. There was also no provision in the written rule of PLDT which penalizes
unwarranted installation of telephone lines with dismissal. In any case, the installations
were approved by the company. There was also no evidence that Gabriel profited
personally with the transaction. The dismissal of Gabriel is illegal.
Reasoning
- Dismissal is the ultimate penalty and should not be imposed if the employee has been
in service for a considerable length of time and has not been the recipient of any
disciplinary actions. Where a penalty less punitive would suffice, whatever missteps may
have been committed by the worker ought not to be visited with a consequence so
severe such as dismissal. This interpretation gives meaning and substance to the liberal
and compassionate spirit of the law as provided for in Article 4 of the Labor Code which
states that “all doubts in the implementation and interpretation of the provisions of the
Labor Code including its implementing rules and regulations shall be resolved in favor of
labor.
- Gabriel is not entirely faultless. As a supervisor, he is required to act judiciously and to
exercise his authority in harmony with PLDT’s policies. When he jeopardized the status
of the rank and file employees whom he ordered to by-pass the standard operating
procedures of the company, to the detriment of his employer, he was not entirely
blameless. The irregularity attributable to him could not be disregarded. He must not be
rewarded, in fairness to the employer’s own legitimate concerns such as company
morale and discipline.
Disposition the resolution f the NLRC is affirmed subject to the deletion of the other
awards of unspecified “benefits and proportionate privileges”.
DISMISSAL AS PENALTY
CEBU FILVENEER CORPORATION V NLRC
(VILLAFLOR)
286 SCRA 556
PUNO; February 24, 1998
- 194 - Disini
FACTS
- Villaflor was the chief accountant of CFC. The top execs were Italians: Cordaro
(president), Kun (GM), Marinoni (Production manager). Guillermo was the accounting
clerk of Villaflor.
- Kun resigned from the company and asked for the liquidation of his investment:
P125k. Two weeks later, he asked Guillermo for a blank check and a blank check
voucher. Guillermo gave him. Three days later, Villlaflor noticed that a check voucher
was missing. She asked Guillermo, who said that Mr. Kun has it.
- Villaflor immediately informed Mr. Cordaro of what happened. She also wrote to the
bank demanding the return of the encashed check.
- Marinoni charged Villaflor of complicity in Kun’s irregular disbursement of company
funds. Two days later, she was prevented entry to the office by the security guards. Her
office drawer and safe were also forcibly opened upon order of Marinoni. Villaflor
reported the incident to the PNP.
- Marinoni suspended her for 30 days without pay for failure to come to work for half a
day (the day she was prevented entry). The next day she was preventively suspended
for 30 days pending investigation of her involvement in Kun’s booboo. The company also
printed a newspaper ad for an accountant.
- Villaflor filed for illegal dismissal with the LA. LA decided in her favor. NLRC affirmed.
ISSUE
WON Villaflor was illegally dismissed
HELD
YES
- Due to its far reaching implications, our Labor Code decrees that an employee cannot
be dismissed, except for the most serious causes. Article 282 enumerates the causes for
which the employer may terminate an employee.
- Company says it’s loss of trust. The SC said that Villaflor’s omission cannot be
described as “willful” to justify dismissal. A breach is willful if it is done intentionally,
knowingly and purposely. Petitioners merely proved the omission of the private
respondent but there is no evidence whatsoever that it was done intentionally.
- Company says she’s grossly or habitually negligent in the performance of her duties.
The SC said that since she has not been remiss in the performance of her duties in the
past, she can’t be charged with habitual negligence. Neither is her negligence gross in
character. Gross negligence implies a want or absence of or failure to exercise slight
care or diligence or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them. She had not the slightest reason
to distrust Kun because he was the GM and appears to have conducted himself well in
the performance of his duties in the past. At most, it’s error of judgment, not gross
negligence.
Disposition NLRC decision affirmed.
GOLDEN THREAD KNITTING INDUSTIRES V NLRC
(MACASPAC)
304 SCRA 720
BELLOSILLO; March 11, 1999
NATURE
Petition to review decision of NLRC
FACTS
- several employees of Golden Thread Knitting Industries (GTK) were dismissed for
different reasons. 2 employees were allegedly for slashing the company’s products
(towels), 2 for redundancy, 1 for threatening the personnel manager and violating the
company rules, and 1 for abandonment of work.
- The laborers filed complaints for illegal dismissal. They allege that the company
dismissed them in retaliation for establishing and being members of the Labor Union.
GTK, on the other hand, contend that there were valid causes for the terminations. The
dismissals were allegedly a result of the slashing of their products, rotation of work,
which in turn was caused by the low demand for their products, and abandonment of
work. WRT to the cases involving the slashing of their products and threats to the
personnel manager, the dismissals were in effect a form of punishment.
- The labor arbiter ruled partially in favor of GTK. He said that there was no showing that
the dismissals were in retaliation for establishing a union. He, however, awarded
separation pay to some employees.
- NLRC, however, appreciated the evidence differently. It held that there was illegal
dismissal and ordered reinstatement.
ISSUE
WON there was illegal dismissal
Labor Law 1 A2010
HELD
YES
Ratio Dismissal is the ultimate penalty that can be meted to an employee. It must
therefore be based on a clear and not on an ambiguous or ambivalent ground.
Reasoning
- WRT to the case involving slashing of towels, the employees were not given procedural
due process. There was no notice and hearing, only outright denial of their entry to the
work premises by the security guards. The charges of serious misconduct were not
sufficiently proved.
- WRT to the employees dismissed for redundancy, there was also denial of procedural
due process. Hearing and notice were not observed. Thus, although the characterization
of an employee’s services is a management function, it must first be proved with
evidence, which was not done in this case. the company cannot merely declare that it
was overmanned.
- WRT to the employee dismissed for disrespect, the SC believed the story version of the
company (which essentially said that the personnel manager was threatened upon mere
service of a suspension order to the employee), but ruled that the dismissal could not be
upheld.
“the dismissal will not be upheld where it appears that the employee’s act of
disrespect was provoked by the employer. xxx the employee hurled incentives at the
personnel manager because she was provoked by the baseless suspension imposed
on her. The penalty of dismissal must be commensurate with the act, conduct, or
omission to the employee.”
- The dismissal was too harsh a penalty; a suspension of 1 week would have sufficed.
“GTK exercised their authority to dismiss without due regard to the provisions of the
Labor Code. The right to terminate should be utilized with extreme caution because its
immediate effect is to put an end to an employee's present means of livelihood while
its distant effect, upon a subsequent finding of illegal dismissal, is just as pernicious to
the employer who will most likely be required to reinstate the subject employee and
grant him full back wages and other benefits.
Disposition Decision AFFIRMED
CENTRAL PANGASINAN ELECTRIC COOP INC V
MACARAEG
395 SCRA 720
PUNO; January 22, 2003
NATURE
Petition for review on certiorari
FACTS
- De Vera was employed as teller and Geronima Macaraeg as cashier by Central
Pangasinan Electric cooperative inc. They accommodated and encashed two hundred
eleven crossed checks of Evelyn Joy Estrada (de Vera’s sister) amounting to
P6,945,128.95 payable to the cooperative despite the absence of any transaction or any
outstanding obligation with it. They credited the checks as part of their collection and
deposited the same together with their cash collection to the coop’s account at the Rural
Bank of Central Pangasinan.
- The finance department noticed these checks which bounced (insufficient funds).De
Vera and Macaraeg were confronted with the discovery. De Vera admitted that the
checks were issued by her sister and that she encashed them from the money collected
from petitioner’s customers.
- De Vera testified and admitted that she encashed the checks of Evelyn Joy Estrada
because the latter is her older sister. Macaraeg admitted that she knew of the
accommodations given by respondent de Vera to her sister; that she allowed her
subordinate to do it because respondent de Vera is her kumare, and that she knew that
Mrs. Estrada’s checks were sufficiently funded.
- On March 19, 1999, on the basis of the findings and recommendation of Atty.
Fernandez (presided over the hearing), the General Manager issued to respondents
separate notices of termination for “serious misconduct, and breach of trust and
confidence reposed on them by management.”
- Respondents questioned their dismissal before the National Conciliation and Mediation
Board (NCMB),claiming that their dismissal was without just cause and in violation of the
Collective Bargaining Agreement (CBA), which requires that the case should first be
brought before a grievance committee. Eventually, the parties agreed to submit the case
to a voluntary arbitrator for arbitration.
- LA-ruled in favor of defendants and ordered their reinstatement
CA-affirmed
ISSUES
1. WON the procedure leading to the termination of respondents Maribeth de Vera and
Geronima Macaraeg was in violation of the provisions of the CBA
2. WON the respondents were validly dismissed
- 195 - Disini
HELD
1. Issue is moot and academic
- The parties’ active participation in the voluntary arbitration proceedings, and their failure
to insist that the case be remanded to the grievance machinery, shows a clear intention
on their part to have the issue of respondents’ illegal dismissal directly resolved by the
voluntary arbitrator.
2. YES
- The respondents were validly dismissed. Article 282(c) of the Labor Code allows an
employer to dismiss employees for willful breach of trust or loss of confidence. Proof
beyond reasonable doubt of their misconduct is not required, it being sufficient that there
is some basis for the same or that the employer has reasonable ground to believe that
they are responsible for the misconduct and their participation therein rendered them
unworthy of the trust and confidence demanded of their position.
Reasoning
- the acts of the respondents were clearly inimical to the financial interest of the
petitioner. During the investigation, they admitted accommodating Evelyn Joy Estrada by
encashing her checks from its funds for more than a year. They did so without
petitioner’s knowledge, much less its permission.
- there was willful breach of trust on the respondents’ part, as they took advantage of
their highly sensitive positions to violate their duties.
- the acts of the respondents caused damage to the petitioner. During those times the
checks were illegally encashed, petitioner was not able to fully utilize the collections,
primarily in servicing its debts.
- it is not material that they did not “misappropriate any amount of money, nor incur any
shortage relative to the funds in their possession.” The basic premise for dismissal on the
ground of loss of confidence is that the employees concerned hold positions of trust. The
betrayal of this trust is the essence of the offence for which an employee is penalized.
- the respondents held positions of utmost trust and confidence. As teller and cashier,
respectively, they are expected to possess a high degree of fidelity. They are entrusted
with a considerable amount of cash. Respondent de Vera accepted payments from
petitioner’s consumers while respondent Macaraeg received remittances for deposit at
petitioner’s bank. They did not live up to their duties and obligations.
PHILIPS SEMICONDUCTORS V FADRIQUELA
[PAGE 77]
G. RULES – MANAGERIALS AND RANK AND RANK
FILE EMPLOYEES
SALVADOR V PHILIPPINE MINING SERVICE CORP
395 SCRA 729
PUNO; January 22, 2003
FACTS
- JOSE V. SALVADOR was first employed by respondent in 1981. He rose from the
ranks and assumed the position of Plant Inspection Foreman in 1991. He was tasked to:
(1) supervise plant equipment and facility inspection; (2) confirm actual defects; (3)
establish inspection standards and frequency; (4) analyze troubles and recommend
counter measures; and (5) prepare weekly/monthly inspection schedule.[3]
- As early as March 1, 1985, respondent instituted the “shift boss” scheme whereby the
foreman from the Plant Section and the foreman from the Mining Section rotate as shift
boss throughout their night shift to oversee and supervise both the mining and plant
operations. The shift boss was entrusted with the care, supervision and protection of the
entire plant.
- Aside from his employment with respondent, petitioner co-owned and managed LHO-
TAB Enterprises, with his partner Ondo Alcantara. They were engaged in the
manufacture and sale of hollow blocks. On September 29, 1997, petitioner’s employment
relation with respondent was tainted with charges of pilferage and violation of company
rules and policy, resulting to loss of confidence. Respondent’s evidence disclose that on
September 29, 1997, at about 9:30 a.m., Koji Sawa, respondent’s Assistant Resident
Manager for Administration, was on his way back to his office in the plant. He and his
driver, Roberto Gresones, saw petitioner operating respondent’s payloader, scooping
fine ore from the stockpile and loading it on his private cargo truck. As the truck was
blocking the access road leading to the stockyard’s gate, Sawa’s car stopped near the
stockpile and the driver blew the horn thrice. Petitioner did not hear him because of the
noise emanating from his operation of the payloader. Sawa’s driver found a chance to
pass through when the payloader maneuvered to get another scoop from the fine ore
stockpile.
- As it was contrary to respondent’s standard operating procedure for the plant foreman
to operate the payloader, Sawa went to the administration office to check the delivery
Labor Law 1 A2010
receipt covering the loading operation of petitioner that morning. However, sales-in-
charge Eduardo Guangco was in the wharf, overseeing the loading of respondent’s
product. Hence, it was only in the afternoon that Sawa was able to verify the delivery
receipt covering petitioner’s loading transaction. The delivery receipt showed that it was
dolomite spillage that was purchased by buyer Ondo Alcantara, not the fine ore that he
saw petitioner loading on his truck. The receipt also showed it was not the respondent
but Alcantara, the buyer, who was responsible for loading the spillage he purchased from
the plant.
- On the basis of the foregoing facts PMSC terminated Salvador for pilferage of company
property. Labor Arbiter and NLRC ruled in favor of Salvador but CA reversed. Hence, this
recourse.
ISSUES
1. WON the charge of pilferage against petitioner was supported by substantial evidence
to warrant his dismissal from the service
2. WON the employer was well within its rights in imposing a harsh penalty considering
the length of the employee’s service
HELD
1. YES
Ratio The settled rule in administrative and quasi-judicial proceedings is that proof
beyond reasonable doubt is not required in determining the legality of an employer’s
dismissal of an employee, and not even a preponderance of evidence is necessary as
substantial evidence is considered sufficient. Substantial evidence is more than a mere
scintilla of evidence or relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other minds, equally reasonable, might
conceivably opine otherwise. Thus, substantial evidence is the least demanding in the
hierarchy of evidence.
Reasoning
- The Labor Code provides that an employer may terminate the services of an employee
for just cause and this must be supported by substantial evidence. In the case at bar, our
evaluation of the evidence of both parties indubitably shows that petitioner’s dismissal for
loss of trust and confidence was duly supported by substantial evidence.
2. NO
Ratio As a general rule, employers are allowed wider latitude of discretion in terminating
the employment of managerial employees as they perform functions which require the
employer’s full trust and confidence.
Reasoning
- To be sure, length of service is taken into consideration in imposing the penalty to be
meted an erring employee. However, the case at bar involves dishonesty and pilferage
by petitioner which resulted in respondent’s loss of confidence in him. Unlike other just
causes for dismissal, trust in an employee, once lost is difficult, if not impossible, to
regain. Moreover, petitioner was not an ordinary rank-and-file employee. He occupied a
high position of responsibility. As foreman and shift boss, he had over-all control of the
care, supervision and operations of respondent’s entire plant. It cannot be over-
emphasized that there is no substitute for honesty for sensitive positions which call for
utmost trust. Fairness dictates that respondent should not be allowed to continue with the
employment of petitioner who has breached the confidence reposed on him.
- In the case at bar, respondent has every right to dismiss petitioner, a managerial
employee, for breach of trust and loss of confidence as a measure of self-preservation
against acts patently inimical to its interests. Indeed, in cases of this nature, the fact that
petitioner has been employed with the respondent for a long time, if to be considered at
all, should be taken against him, as his act of pilferage reflects a regrettable lack of
loyalty which he should have strengthened, instead of betrayed.
Disposition The petition is DENIED.
CAOILE V NLRC (COCA-COLA BOTTLERS,
PHILIPPINES INC)
299 SCRA 76
QUISUMBING; November 24, 1998
NATURE
Special action for certiorari
- 196 - Disini
FACTS
- Private respondent CCBPI, through the local plant management, contracted the
services of Mr. Redempto de Guzman for the installation of a Private Automatic Branch
Exchange (PABX) housewiring in the plant premises for the sum of P65,000.00.  Since
the project fell under the direct supervision of petitioner, all cash advances by the
contractor were coursed through him.
- Mr. De Guzman, the contractor, requested for an initial cash advance of P10,000.00. 
Petitioner caused the preparation of the Payment Request Memo in the amount of
P15,000.00 and the issuance of a check in the same amount.  After securing the
endorsement of the contractor, petitioner encashed the check with the plant teller Mr.
Dominador S. Pila and handed over P10,000.00 to Mr. De Guzman while retaining the
amount of P5,000.00 for himself. 
- The contractor requested for second and third cash advances in the amounts of
P5,000.00 and P10,000.00 respectively. As in the first cash advance, petitioner caused
the preparation of 2 checks in the amounts of P10,000.00 and P15,000.00 respectively.  
After securing the endorsements of the contractor the requested cash advances while
retaining for himself the difference of P10,000.00.
- After the project was completed, the contractor requested payment of the balance of the
contract price in the amount of P25,000.00.  Petitioner caused the issuance of a check in
the amount of P24,350.00 (after deducting 1%  of the total contact price by way of
witholding tax).  Petitioner secured the endorsement of the contractor, encashed the
check with the teller, then handed over to the contractor only P19,350.00 while retaining
fore himself the amount of P5,000.00.
- Upon completion of an additional project requested of the contractor, petitioner caused
the issuance a check, and after securing the endorsement of the contractor, petitioner
encashed the check and delivered P8,000.00 to the contractor and retained P500.00 for
himself.
- Mr. de Guzman executed an affidavit exposing the fraudulent acts perpetrated by
petitioner, which prompted the company to conduct an investigation. 
- Petitioner was served a Notice of investigation. During the investigation, petitioner
admitted that the initials in the check vouchers were his but denied having encashed the
checks and delivering the cash payments to the contractor. 
- It was established through the testimony of Mrs. Macasinag and Mr. Pila that petitioner
personally withdrew the checks from the GM Secretary and had them encashed with the
teller after Mr.de Guzman has endorsed the same.
- Mr. Mariano A. Limjap, Senior VP and Administration Director issued a memo
sustaining the findings and recommendation of the local plant management for the
termination of complainant from his employ on the grounds of grave misconduct and
dishonesty considering that his position as EDP Supervisor is bestowed with the highest
trust and confidence by the respondent as may be seen from the description of his duties
and responsibilities.
- As a consequence of his dismissal, petitioner filed a compliant for illegal dismissal with
damages
- Labor Arbiter rendered a decision finding that petitioner was illegally dismissed
- Private respondents appealed to NLRC which reversed the Labor Arbiter's
decision. NLRC held that petitioner committed acts constituting a breach of trust and
confidence reposed on him by his employer, thereby justifying his dismissal. 
ISSUE
WON the NLRC committed grave abuse of discretion amounting to lack or excess of
jurisdiction in reversing and setting aside the Labor Arbiter's decision finding private
respondents guilty of illegal dismissal
HELD
NO
Ratio Law and jurisprudence have long recognized the right of employers to dismiss
employees by reason of loss of trust and confidence.  As provided for in the Labor Code,
"Art. 282.  An employer may terminate an employment for any of the following causes: x
x x (c) Fraud or willful breach of the trust reposed in him by his employer or his duly
authorized representative. x x x."  In the case of supervisors or personnel occupying
positions of responsibility, this Court has repeatedly held that loss of trust and confidence
justifies termination. Obviously, as a just cause provided by law, this ground for
terminating employment, springs from the voluntary or willful act of the employee, or "by
reason of some blameworthy act or omission on the part of the employee".
Reasoning
- Loss of confidence as a just cause for termination of employment is premised from the
fact that an employee concerned holds a position of trust and confidence. But, in order to
constitute a just cause for dismissal, the act complained of must be "work-related" such
as would show the employee concerned to be unfit to continue working for the employer.
- it must be noted the recent decisions of this Court has distinguished the treatment of
managerial employees from that of rank-and-file personnel, insofar as the application of
the doctrine of loss of trust and confidence is concerned. Thus with respect to rank-and-
Labor Law 1 A2010
file personnel, loss of trust and confidence as ground for valid dismissal requires proof of
involvement in the alleged events in question, and that mere uncorroborated assertion
and accusations by the employer will not be sufficient. But, as regards as a managerial
employee, mere existence of a basis for believing that such employee has breached the
trust of his employer would suffice for his dismissal. Hence, in the case of managerial
employees, proof beyond reasonable doubt is not required, it being sufficient that there is
some basis for such loss of confidence, such as when the employer has reasonable
ground to believe that the employee concerned is responsible for the purported
misconduct, and the nature of his participation therein renders him unworthy of the trust
and confidence demanded by his position.
- In the present case, petitioner is not an ordinary rank-and-file employee.  He is the EDP
Supervisor tasked to directly supervise the installation of the PABX housewiring project in
respondent company's premises.  He should have realized that such sensitive position
requires the full trust and confidence of his employer.  Corollary, he ought to know that
his job requires that he keep the trust and confidence bestowed on him by his employer
unsullied.  fired.
Disposition Petition is DISMISSED for lack of merit.  - Petitioner laments that he was completely stripped of his powers and functions as
G. TERMINATION OF EMPLOYMENT BY
EMPLOYEE
14.02 CAUSES
A. JUST CAUSES
B. WITHOUT JUST CAUSE
C. RESIGNATION
DEFINITION
HABANA V NLRC (HOTEL NIKKO)
298 SCRA 537
KAPUNAN; November 16, 1998
NATURE
Petition for certiorari seeking reversal of NLRC decision which affirmed LA
FACTS
- On March 16, 1989, petitioner Antonio Habana was employed by Hotel Nikko Manila
Garden (Nikko) as Rooms Division Director (RDD). One of his tasks as RDD was to
conduct regular and surprise inspection of all work areas to ensure quality of
performance. In the course of his employment, petitioner encountered several problems:
his frequent clashes with Dolores Samson (his Senior Rooms Mgr); frequent absence
and tardiness; rampant violations of hotel rules due to his failure to effectively manage
his own division; and complaints regarding the overall quality (or lack thereof) of service
of Nikko. As a result, private respondent Mr. Okawa, who replaced private respondent
Mr. Yokoo as the executive asst. for Sales, issued a memorandum instructing petitioner,
along with 2 others, to conduct and report daily inspection of the guestrooms and public
areas. Petitioner sent a memorandum of protest claiming that Mr. Okawa’s orders was a
form of harassment to “ease him out of his position” and illustrated in detail the other
forms of alleged harassment supposedly perpetrated by Mr. Okawa.
He, however, manifested that he had no intention to resign.
- But on May 2, 1990, petitioner went to the Hotel’s Comptroller asking for his severance
pay of P120,000 plus accrued benefits of P11, 865.28. The check was not given to him
until he submitted his resignation letter (part of standard procedure). He also executed an
Affidavit of Quitclaim, along with his resignation. The very next day, however,
respondents received a letter from petitioner (addressed to Mr. Okawa) who insisted that
he was forced to resign because he could no longer endure Mr. Okawa’s acts of
harassment against him. 2 weeks later, petitioner filed a complaint for illegal dismissal
and damages against Hotel Nikko and its officers, including his direct superiors, Yokoo
and Okawa. The LA dismissed the complaint finding that petitioner voluntarily resigned
and that the alleged acts of harassment were non-existent. On appeal, the NLRC
affirmed the LA’s decision likewise finding that petitioner voluntarily resigned as
manifested by his act of negotiating for a huge amount of separation pay. When his MFR
was dismissed, he came to the SC.
- 197 - Disini
ISSUE
WON the resignation was forced upon Habana or he did so voluntarily
HELD
The resignation was voluntary.
Ratio Voluntary resignation is the voluntary act of an employee who “finds himself in a
situation where he believes that personal reasons cannot be sacrificed in favor of the
exigency of the service and he has no other choice but to disassociate himself from his
employment.”
Reasoning
- In this case, petitioner was clearly having trouble performing his job, which undeniably
carries immense responsibilities. Notable too was petitioner’s failure to see eye to eye
with his immediate bosses, Mr. Yokoo and Mr. Okawa. Because of these difficulties, it
was quite reasonable for petitioner to think of, and eventually, relinquishing his position
voluntarily (and get a fat sum as severance pay in the bargain) instead of waiting to be
Director when Mr. Okawa tasked him with inspecting the hotel’s guest and public areas.
Conducting these daily inspections, in effect, demoted him to a mere room inspector “one
notch higher than a bellboy.” He claims that the humiliation he endured in going room to
room, inspecting toilets and garbage areas, was all part of a malicious scheme to harass
him out of his position. These orders were not borne out of mere whim and caprice. They
were made in response to the complaints they were getting. Moreover, these measures
executed by the hotel’s top management were legitimate exercise of management
prerogatives.
- Petitioner asserts that private respondents coerced and intimidated him to resigning
through their collective acts of harassment. Contrariwise, private respondents contend
that it was petitioner who approached them indicating his desire to resign due to his
difficulty in coping with his responsibilities and his differences with his immediate boss,
Mr. Okawa.
- Petitioner could not have been intimidated by private respondents to quit. In his
memorandum, petitioner emphatically vowed not to resign despite private respondents’
alleged acts of harassment. Surprisingly, however, after only a few days he did quit
alleging that he was forced and harassed to do so. If petitioner was adamant in his
intention not to be coerced into leaving, how could he suddenly be forced to resign?
Petitioner glaringly contradicted himself. His excuse is thus, unbelievable and
unjustifiable.
- Moreover, the issue in this case is factual in nature and firm is the principle that “factual
findings of the NLRC, particularly when they coincide with those of the LA, are accorded
respect, even finality, and will not be disturbed for as long as such findings are supported
by substantial evidence.” We have painstaking reviewed the records of this case and we
find no justifiable reason to overturn the findings of both the LA and the NLRC.
Disposition Petition is DISMISSED
REQUISITES
AZCOR MANUFACTURING V NLRC (CAPULSO)
303 SCRA 26
BELLOSILLO; February 11, 1999
NATURE
Petition for certiorari
FACTS
- Candido Capulso filed with the Labor Arbiter a complaint for constructive illegal
dismissal and illegal deduction of P50.00 per day for the period April to September 1989.
The evidence presented by Capulso showed that he worked for AZCOR as ceramics
worker for more than two (2) years starting from 3 April 1989 to 1 June 1991. From April
to September 1989 the amount of P50.00 was deducted from his salary without informing
him of the reason therefor.
- In the second week of February 1991, upon his doctor's recommendation, Capulso
verbally requested to go on sick leave due to bronchial asthma. It appeared that his
illness was directly caused by his job as ceramics worker where, for lack of the
prescribed occupational safety gadgets, he inhaled and absorbed harmful ceramic dusts.
His supervisor, Ms. Emily Apolinaria, approved his request. Later, on 1 June 1991,
Capulso went back to petitioner AZCOR to resume his work after recuperating from his
illness. He was not allowed to do so by his supervisors who informed him that only the
owner, Arturo Zuluaga, could allow him to continue in his job. He returned five (5) times
to AZCOR but when it became apparent that he would not be reinstated, he immediately
filed the instant complaint for illegal dismissal.
- Capulso presented the following documentary evidence in support of his claim: (a) His
affidavit and testimony to prove that he was terminated without just cause and without
due process; (b) Identification card issued by AZCOR which he continued to use even
Labor Law 1 A2010
after his supposed employment by Filipinas Paso; (c) Certification of SSS premium
payments; (d) SSS Member Assistance Form wherein he stated that he worked with
AZCOR from March 1989 to April 1991; (e) Certification of Employee Contribution with
SSS; and, (f) Payslips issued by AZCOR.
- AZCOR alleged that Capulso was a former employee of AZCOR who resigned on 28
February 1990 as evidenced by a letter of resignation and joined Filipinas Paso on 1
March 1990 as shown by a contract of employment; in February 1991 Capulso allegedly
informed his supervisor, Ms. Emilia Apolinaria, that he intended to go on terminal leave
because he was not feeling well; on 1 March 1991 he submitted a letter of resignation
addressed to the President of Filipinas Paso, Manuel Montilla; and, in the early part of
June 1991 Capulso tried to apply for work again with Filipinas Paso but there was no
vacancy.
- Petitioners submitted the following documentary evidence: (a) Sworn Statement of Ms.
Emilia Apolinaria and her actual testimony to prove that respondent indeed resigned
voluntarily from AZCOR to transfer to Filipinas Paso, and thereafter, from Filipinas Paso
due to failing health; (b) Contract of Employment between Filipinas Paso and respondent
which took effect 1 March 1991; (c) Letter of resignation of respondent from AZCOR
dated 28 February 1990, to take effect on the same date; (d) Undated letter of
resignation of respondent addressed to Filipinas Paso to take effect 1 March 1991; (e)
BIR Form No. W-4 filed 6 June 1990; (f) Individual Income Tax Return of respondent for
1990; and, (g) BIR Form 1701-B which was an alphabetical list of employees of Filipinas
Paso for the year ending 31 December 1990.
- Labor Arbiter rendered a decision dismissing the complaint for illegal dismissal for lack
of merit, but ordered AZCOR and/or Arturo Zuluaga to refund to Capulso P200.00
representing the amount illegally deducted from his salary.
- NLRC modified the Labor Arbiter's decision by: (a) declaring the dismissal of Capulso
as illegal for lack of just and valid cause; (b) ordering petitioners to reinstate Capulso to
his former or equivalent position without loss of seniority rights and without diminution of
benefits; and, (c) ordering petitioners to jointly and solidarily pay Capulso his back wages
computed from the time of his dismissal up to the date of his actual reinstatement.
- Petitioners' motion for reconsideration was denied by the NLRC. Meanwhile, during the
pendency of the case before this Court, Capulso succumbed to asthma and heart
disease, and died.
- Petitioners insist that Capulso voluntarily resigned. They also contend that they could
not be held jointly and severally liable for back wages since AZCOR and Filipinas Paso
are separate and distinct corporations with different corporate personalities; and, the
mere fact that the businesses of these corporations are interrelated and both owned and
controlled by a single stockholder are not sufficient grounds to disregard their separate
corporate entities.
ISSUE
WON NLRC erred in finding that Capulso was illegally dismissed and in holding
petitioners jointly and solidarily liable to Capulso for back wages
HELD
NO
- On resignation, requisites
Ratio To constitute a resignation, it must be unconditional and with the intent to operate
as such. There must be an intention to relinquish a portion of the term of office
accompanied by an act of relinquishment.
- The fact that Capulso signified his desire to resume his work when he went back to
petitioner AZCOR after recuperating from his illness, and actively pursued his case for
illegal dismissal before the labor courts when he was refused admission by his employer,
negated any intention on his part to relinquish his job at AZCOR.
- a closer look at the subject resignation letters readily reveals the following: (a) the
resignation letter allegedly tendered by Capulso to Filipinas Paso was identically worded
with that supposedly addressed by him to AZCOR; (b) both were pre-drafted with blank
spaces filled up with the purported dates of effectivity of his resignation; and, (c) it was
written in English, a language which Capulso was not conversant with considering his
low level of education. No other plausible explanation can be drawn from these
circumstances than that the subject letters of resignation were prepared by a person or
persons other than Capulso. And the fact that he categorically disowned the signatures
therein and denied having executed them clearly indicates that the resignation letters
were drafted without his consent and participation.
- Even assuming for the sake of argument that the signatures were genuine, the
resignation letters still cannot be given credence in the absence of any showing that
Capulso was aware that what he was signing then were in fact resignation letters or that
he fully understood the contents thereof.
- On illegal dismissal
> In illegal dismissal cases, the onus of proving that the dismissal of the employee was
for a valid and authorized cause rests on the employer, and failure to discharge the same
would mean that the dismissal is not justified and therefore illegal.
- On joint and several liability
> The doctrine that a corporation is a legal entity or a person in law distinct from the
persons composing it is merely a legal fiction for purposes of convenience and to
- 198 - Disini
subserve the ends of justice. This fiction cannot be extended to a point beyond its reason
and policy. Where, as in this case, the corporate fiction was used as a means to
perpetrate a social injustice or as a vehicle to evade obligations or confuse the legitimate
issues, it would be discarded and the two (2) corporations would be merged as one, the
first being merely considered as the instrumentality, agency, conduit or adjunct of the
other.
Disposition petition is DISMISSED. NLRC Decision is MODIFIED. Petitioners AZCOR
MANUFACTURING, INC., FILIPINAS PASO and ARTURO ZULUAGA are ORDERED to
pay, jointly and solidarily, the heirs of private respondent Candido Capulso the amounts
representing his back wages, inclusive of allowances and other benefits, and separation
pay to be computed in accordance with law.
METRO TRANSIT ORG V NLRC (GARCIA)
284 SCRA 308
BELLOSILLO; January 16 1998
FACTS
- Garcia had been working for Metro Transit (METRO) for almost 8 years as station
teller. On April 22 1992, he called up his immediate supervisor if he could go on LOA to
go to Cebu to look for his wife and children who suddenly left home without his
knowledge. After a few weeks of fruitless search he returned to Manila.
- When he reported to the office on May 15 1992 Garcia was not allowed to resume work
but was directed to proceed to the legal department of METRO where he would undergo
investigation. He was asked by Pili about his absence from work. After he explained to
Pili his predicament, Pili cut short the inquiry and informed him right away that it would be
better for him to resign rather than be terminated for his absences. Still in a state of
extreme agitation and weighed down by a serious family problem, Garcia at once
prepared a resignation letter. Then he left again for the province to look for his family. But
like his first attempt his effort came to naught. Soon after the Personnel Committee of
METRO approved his resignation.
- Garcia sought advice from his labor union and asked that the union intervene in his
case by bringing the matter of his forced resignation before their grievance machinery for
arbitration. METRO rejected Garcia's plea that he be not considered resigned from his
employment. Garcia filed a complaint for illegal dismissal. Labor Arbiter and NLRC ruled
in favor of Garcia.
- Petitioner: private respondent absented himself on 22 April 1992 without official leave
and then later on freely and willingly relinquished his employment because he was
establishing his own business.
ISSUE
WON Garcia resigned from his employment
HELD
NO
- An examination of the circumstances surrounding the submission of the letter indicates
that the resignation was made without proper discernment so that it could not have been
intelligently and voluntarily done.
- What Pili did as petitioner's representative was to advise Garcia, who at that time was
thoroughly confused and bothered no end by a serious family problem, that he had better
resign or face the prospect of an unceremonious termination from service for
abandonment of work. At that precise moment, the employee could not be said to have
fully understood what he was doing, i.e., writing his resignation letter, nor could have
foreseen the consequences thereof, for it is established that as soon as he came out of
the investigation office he prepared his resignation letter right then and there at a table
nearby with no time for reflection. It is noteworthy that shortly thereafter he consulted his
union president for help regarding his forced resignation. This does not indicate by any
means a resignation that was knowingly and voluntarily done. On the contrary, it shows
that his writing and handing in the resignation letter to petitioner were a knee-jerk
reaction triggered by that singular moment when he was left with no alternative but to
accede, having been literally forced into it by being presented with the more unpleasant
fate of being terminated.
- the voluntariness of complaint's resignation can hardly be believed if he was not forced
by circumstances due to the following:
- First he was already in the employ of respondent for almost eight years with a high
paying job and benefits; Second, no offense or violation has been attributed to the
complainant during his period of employment; Third, the filing of this instant complaint by
the complainant for illegal dismissal negates or is inconsistent with abandonment and
voluntary resignation. Lastly, there is no iota of evidence that complainant is indeed
engaged in business, and belies the contents of his resignation.
- Evidently the complainant was asked to make a choice whether to tender his
resignation or be terminated for his absences which to our mind is anchored on justifiable
grounds. Such compulsion to make an unnecessary choice placed undue and
unjustifiable pressure on the employee who otherwise would not have thought of leaving
Labor Law 1 A2010
his position as Station Teller if he had not been induced to do so. This being the case,
the resignation filed by the complainant did not become effective.
VOLUNTARY RESIGNATION
PHIL WIRELESS INC V NLRC (LUCILA)
310 SCRA 653
PARDO; July 20, 1999
NATURE
Petition for certiorari to set aside a decision of the NLRC
FACTS
- January 8, 1976 – Phil. Wireless Inc. (Pocketbell) hired respondent Doldwin Lucila as
an operator/encoder. Three years later, Lucila was promoted as Head Technical and
Maintenance Department of the Engineering Department. On September 11, 1987, he
was promoted as Technical Services Supervisor and later on October 1, 1990, he
became Project Management Superintendent.
- December 8, 1990 – Lucila tendered his resignation.
- December 3, 1991 – Lucila filed with the NLRC a complaint for illegal/constructive
dismissal.
- Lucila alleges that his “promotion” from Technical Services Supervisor to Project
Management Superintendent was actually a demotion because it was demeaning,
illusory and humiliating. He based it on the fact that he was not given a
secretary/assistant and subordinates.
- June 29, 1992 – Labor Arbiter Villarente declared that Lucila actually resigned and
dismissed the complaint for lack merit.
- June 15, 1993 – NLRC reversed the findings of the Labor Arbiter and ordered for
Lucila’s reinstatement with payment of backwages or separation pay.
ISSUE
WON Lucila was constructively dismissed
HELD
NO
Ratio Constructive dismissal is an involuntary resignation resorted to when continued
employment is rendered impossible, unreasonable or unlikely; when there is a demotion
in rank and/or diminution in pay; or when a clear discrimination, insensibility or disdain by
an employer becomes unbearable to the employee.
Reasoning
- In this case, the Court ruled that Lucila voluntarily resigned and was not pressured into
doing so.
- Voluntary resignation is defined as the act of en employee who finds himself in a
situation where he believes that personal reasons cannot be sacrificed in favor of the
exigency of the service and he has no other choice but to disassociate himself from his
employment.
- Lucila’s basis for his “demotion” is inadequate as the Court ruled that there is no
demotion where there is no reduction in position rank or salary as a result of such
transfer.
Disposition The petition is hereby granted. The questioned decision of the NLRC is set
aside and the decision of the Labor Arbiter is reinstated and affirmed. No costs.
PASCUA V NLRC
287 SCRA 554
PANGANIBAN; March 13, 1998
NATURE
Review on certiorari
FACTS
- The complainants are among the employees of Henry Lao at the Tiongsan Super
Bazaar. On August 7, 1991, Henry Lao received a telephone call who informed him that
one of his sales ladies had just stolen a Karaoke, the previous night. There, said
saleslady made a confession, that, there were others who were involved in the stealing of
goods. She was required by Henry Lao to write down their names. Violeta Soriano and
Susan Castillo were included in her list. The eighteen (18) sales ladies who admitted
their guilt resigned. The remaining workers were placed under the watchful eyes of
respondent.
- On August 21, 1991, Lilia Pascua was caught repairing three (3) pairs of pants that
belonged to Mrs. Manaois and allegedly were not bought at the Tiongsan Super Bazaar.
Respondent scolded Lilia Pascua for this offense, because it is against the respondent’s
policy that repair jobs of items not bought at the bazaar should not be accepted. She
- 199 - Disini
was given a warning, that this prohibition should be strictly followed. Lilia Pascua did not
report for work the next day. She went to see the respondent’s bookkeeper for the
computation of her separation pay. Respondent paid her separation pay.
- On August 24, 1991, Victoria Santos was caught charging a meter of a cloth for the
price of a yard. For this offense, she was suspended for a period of thirty (30) days. She
never returned to work since then.
- Mimi Macanlalay was employed on June 10, 1989. Previously, she worked for Mrs.
Tan. On September 19, 1991, Mrs. Tan went to the Tiongsan Super Bazaar, and she
saw Mimi Macanlalay working as a cashier. Mrs. Tan informed Mr. Lao, that Mimi
Macanlalay was previously dismissed by her for dishonesty. Mimi Macanlalay later on
“resigned”.
- Violeta Soriano was employed on May 16, 1984. After the August 7, 1991 incident, she
was assigned as a cashier. She was reverted back as a sales lady after a few weeks
when Mr. Lao learned, that, she had some knowledge of the schemes of the resigned
employees. On November 9, 1991, Mr. Lao required her to explain in writing, why she
should not be the subject matter of a disciplinary action, for her failure to fill up her daily
time record. Respondent reviewed her past records and found out that, she was the
subject matter of a disciplinary action in the past. She was terminated [sic] on December
8, 1991.
- Susan De Castro refused to receive her salary on November 18, 1991, because she
insisted on receiving more than what is indicated in the payrolls. Respondent told her
that if she is not satisfied with her salary, she can find employment elsewhere. She failed
to report for work on the following day. In any case, respondent states, that, she can be
dismissed for lack of trust and confidence, for her involvement in the pilferage of goods.”
Petitioners filed at the Regional Arbitration Branch of the NLRC separate complaints
against Henry Lao for “illegal dismissal and claims for violation of labor standards
pertaining to payment of wages.” Subsequently, the labor arbiter ruled that the
dismissals were illegal and awarded back wages and separation pay to petitioners.
- The NLRC, which modified the appealed decision and found the termination of
petitioners’ employment to be due either to voluntary resignation or dismissals with just
cause.
ISSUES
1. WON petitioners’ employment terminated because of resignation, abandonment or
dismissal
2. WON petitioners’ employment terminated in accordance with law
HELD
1. ILLEGAL DISMISSAL (except for Santos).
- Petitioner Pascua was aware of the close relationship between Henry Lao and Mrs.
Manaois. Thus, Pascua feared that, if she turned down Mrs. Manaois’ request, she would
be subjected to public scolding by Lao. Thus, accommodation of the said request may
have been an act of disobedience of her employer’s order, but hardly an instance of the
“wrongful and perverse attitude” that would warrant a penalty as grave as dismissal. That
after the incident, Henry Lao kept pushing me by my shoulders as he repeatedly told me
in a loud manner, ‘pakuwenta mo na ang separation pay mo at hindi ka na rin
makakabalik. Puntahan mo ang accountant.’ which made me nervous and afraid
especially that he kept on pushing me even when I was already on top of the stairs; It is
evident from the above that Petitioner Pascua was forced to resign -- an act which was
tantamount to a dismissal, an illegal one at that.
- The NLRC could not explain the contradictions in Petitioner De Castro’s case. If she
had not been dismissed but was still an employee of private respondent, then why did
she file this case for illegal dismissal? And even more perplexing: Why would the NLRC
conclude that reinstatement was no longer possible because of the parties’ “respective
imputations of charges against each other”? Furthermore, the labor arbiter’s finding that
there was no evidence on record to establish her dismissal is refuted by the uncontested
allegations of Petitioner De Castro.
- Prior to her employment at Tiongsan Super Bazaar Petitioner Macanlalay had been a
saleslady at Rommel’s which was owned by a certain Mrs. Tan. On September 20,
1991, while she was working as a cashier at Tiongsan, Mrs. Tan saw her; thereupon,
Mrs. Tan reported to Henry Lao that Petitioner Macanlalay had previously been
dismissed for alleged dishonesty. Petitioner was then called by Lao and
unceremoniously told: “Kunin mo na ang separation pay mo. Pa total mo na sa
accountant. At huwag ka ng magtrabajo dito.” Clearly, she did not resign; she was orally
dismissed by Lao. It is this lack of clear, valid and legal cause, not to mention due
process, that made her dismissal illegal, warranting reinstatement and the award of back
wages.
- The NLRC justified Petitioner Soriano’s dismissal by alleging that it was due to her
failure to make regular entries in her daily time records. We believe, however, that this
alleged “just cause” was convincingly disputed by Petitioner Soriano in her letter dated
November 9, 1991.
- We agree that Petitioner Santos voluntarily resigned. The labor arbiter did not find
Petitioner Santos to have been illegally dismissed. Rather, after her suspension for
“charging for a meter of cloth bought [at] the price of a yard,” she offered to resign. The
solicitor general supports this by stating that “even the Labor Arbiter discovered this
Labor Law 1 A2010
when he ruled that ‘there [was] no evidence on record to support Santos’ dismissal.’”
2. NO
Reasoning
- Basic is the doctrine that resignation must be voluntary and made with the intention of
relinquishing the office, accompanied with an act of relinquishment. Based on the
evidence on record, we are more than convinced that Petitioners Lilia Pascua, Mimi
Macanlalay, Susan C. De Castro and Violeta Soriano did not voluntarily quit their jobs.
Rather, they were forced to resign or were summarily dismissed without just cause.
Petitioners -- except Victoria L. Santos -- forthwith took steps to protest their layoff and
thus cannot, by any logic, be said to have abandoned their work.
- In labor cases, the employer has the burden of proving that the dismissal was for a just
cause; failure to show this, as in the instant case, would necessarily mean that the
dismissal was unjustified and, therefore, illegal. To allow an employer to dismiss an
employee based on mere allegations and generalities would place the employee at the
mercy of his employer; and the right to security of tenure, which this Court is bound to
protect, would be unduly emasculated. Considering the antecedents in the summary
dismissals effected against Petitioners Pascua, Macanlalay, De Castro and Soriano, the
causes asserted by private respondent are, at best, tenuous or conjectural; at worst, they
are mere afterthoughts.
- Under the Labor Code, as amended, the dismissal of an employee which the employer
must validate has a twofold requirement: one is substantive, the other procedural. Not
only must the dismissal be for a just or an authorized cause as provided by law (Articles
282, 283 and 284 of the Labor Code, as amended); the rudimentary requirements of due
process -- the opportunity to be heard and to defend oneself -- must be observed as well.
- Petitioners Pascua and Macanlalay’s acceptance of separation pay did not necessarily
amount to estoppel; nor did it connote a waiver of their right to press for reinstatement,
considering that such acceptance -- particularly by Petitioner Pascua who had to feed her
four children -- was due to dire financial necessity.
Disposition REVERSED.
AZCOR MANUFACTURING INC V NLRC
[PAGE 197]
VALDEZ V NLRC (NELBUSCO INC)
286 SCRA 87
REGALADO; February 9, 1998
NATURE
Special civil action for certiorari
FACTS
- Sometime in December, 1986, petitioner was hired by private respondent as a bus
driver on commission basis, with an average earning of P6,000.00 a month. On February
28, 1993, the airconditioning unit of the bus which petitioner was driving suffered a
mechanical breakdown. Respondent company told him to wait until the airconditioning
unit was repaired. Meanwhile, no other bus was assigned to petitioner to keep him
gainfully employed.
- Thereafter, petitioner continued reporting to his employer's office for work, only to find
out each time that the airconditioning unit had not been repaired. Several months
elapsed but he was never called by respondent company to report for work. Later,
petitioner found out that the bus formerly driven by him was plying an assigned route as
an ordinary bus, with a newly-hired driver.
- On June 15, 1993, petitioner filed a complaint against private respondent for illegal
dismissal, with money claims for labor standard benefits, and for reimbursement of his
bond and tire deposit. He claimed that the reason why respondent company did not allow
him to drive again was due to his refusal to sign an undated company-prepared
resignation letter and a blank affidavit of quitclaim and release.
- Private respondent, on the other hand, admitted that it told petitioner to wait until the
airconditioning unit of the bus was repaired. However, private respondent alleged that
after the bus driven by the petitioner broke down due to his fault and negligence, the
latter did not report for work. He supposedly informed the management later that he was
voluntarily resigning from his employment in order to supervise the construction of his
house. Consequent to his resignation, petitioner demanded the return of his cash bond
and tire deposit. Respondent company required him to secure the necessary
management clearance and other pertinent papers relative to his resignation. Instead of
complying with those requirements, petitioner filed the instant complaint.
ISSUE
WON petitioner was illegally dismissed because he did not voluntarily resigned as
claimed by respondents
HELD
- 200 - Disini
- The reason for the stoppage of operation of the bus assigned to petitioner was the
breakdown of the airconditioning unit, which is a valid reason for the suspension of its
operation. However, such suspension regarding that particular bus should likewise last
only for a reasonable period of time. The period of six months was more than enough for
it to cause the repair thereof. Beyond that period, the stoppage of its operation was
already legally unreasonable and economically prejudicial to herein petitioner who was
not given a substitute vehicle to drive.
- The so-called "floating status" of an employee should last only for a legally prescribed
period of time. When that "floating status" of an employee lasts for more than six months,
he may be considered to have been illegally dismissed from the service. Thus, he is
entitled to the corresponding benefits for his separation, and this would apply to the two
types of work suspension heretofore noted, that is, either of the entire business or of a
specific component thereof.
- It was not denied by private respondent that it tried to force private respondent to sign
an undated company-prepared resignation letter and a blank undated affidavit of
quitclaim and release which the latter validly refused to sign. Furthermore, the bus which
petitioner used to drive was already plying a transportation route as an ordinary bus and
was being driven by another person, without petitioner having been priorly offered the
same alternative arrangement.
- The other allegation of private respondent that petitioner voluntarily resigned from work
obviously does not deserve any consideration. It would have been illogical for herein
petitioner to resign and then file a complaint for illegal dismissal. Resignation is
inconsistent with the filing of the said complaint.
- Resignation is defined as the voluntary act of an employee who finds himself in a
situation where he believes that personal reasons cannot be sacrificed in favor of the
exigency of the service, and, that he has no other choice but to disassociate himself from
his employment. Resignation is a formal pronouncement of relinquishment of an office. It
must be made with the intention of relinquishing the office accompanied by an act of
relinquishment.
- The cardinal rule in termination cases is that the employer bears the burden of proof to
show that the dismissal is for just cause, failing in which it would mean that the dismissal
is not justified. This rule applies adversely against herein respondent company since it
has utterly failed to discharge that onus by the requisite quantum of evidence.
- Under Article 279 of the Labor Code, as amended, an employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights and
other privileges and to his full back wages, inclusive of allowances, and to other benefits
or their monetary equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement.
Disposition Decision of respondent National Labor Relations Commission is SET ASIDE
and the decision of the Labor Arbiter REINSTATED
VALIDITY OF POLICY
MANILA BROADCASTING COMPANY V NLRC
(OLAIREZ, BANGLOY)
294 SCRA 486
MENDOZA; 1998
NATURE
Petition for certiorari to set aside the decision of the National Labor Relations
Commission, affirming the decision of the Labor Arbiter which found private respondent
to have been illegally dismissed and which ordered him reinstated with damages.
FACTS
- Private respondent Samuel L. Bangloy was production supervisor and radio
commentator of the DZJC-AM radio station in Laoag City. The radio station is owned by
petitioner Manila Broadcasting Company.
- On February 28, 1992, private respondent applied for leave of absence for 50 days,
from March 24 to May 13, 1992, in order to “run for Board Member” in Ilocos Norte under
the Kilusang Bagong Lipunan (KBL). He made his application pursuant to §11(b) of R.A.
No. 6646 which provides:
Sec. 11(b) . . . Any mass media columnist, commentator, announcer, or personality
who is a candidate for any elective public office shall take a leave of absence from his
work as such during the campaign period.
- After a week, private respondent’s application was returned to him, together with a copy
of an office memorandum of Eugene Jusi, Assistant Vice-President for Personnel and
Administration, to Atty. Edgardo Montilla, Executive Vice-President and General Manager
of the FJE Group of Companies, in which it was stated that as a matter of “company
policy,” any employee who files a certificate of candidacy for any elective national or local
office would be considered resigned from the company.
- It would appear that private respondent nonetheless ran in the election but lost. On May
25, 1992, he tried to return to work, but was not allowed to do so by petitioner on the
Labor Law 1 A2010
ground that his employment had been terminated.
- Private respondent filed a complaint for illegal dismissal against petitioner before the
Department of Labor and Employment.
ISSUES
1. WON the company policy that any employee who files a certificate of candidacy for
any elective national or local office would be considered resigned from the company valid
2. WON the company policy was made known to employees before it was sought to be
applied to private respondent
HELD
1. YES
- the policy is valid and justified.
2. NO
- There are a number of circumstances which raise some doubts whether the company
policy was strictly enforced.
Ratio Although §11(b) of R.A. No. 6646 does not require mass media commentators and
announcers such as private respondent to resign from their radio or TV stations but only
to go on leave for the duration of the campaign period, we think that the company may
nevertheless validly require them to resign as a matter of policy.
- The policy is justified on the following grounds:
1) Working for the government and the company at the same time is clearly
disadvantageous and prejudicial to the rights and interest not only of the company but
the public as well. In the event an employee wins in an election, he cannot fully serve, as
he is expected to do, the interest of his employer. The employee has to serve two (2)
employers, obviously detrimental to the interest of both the government and the private
employer.
2) In the event the employee loses in the election, the impartiality and cold neutrality of
an employee as broadcast personality is suspect, thus readily eroding and adversely
affecting the confidence and trust of the listening public to employer’s station.
These are valid reasons for petitioner. No law has been cited by private respondent
prohibiting a rule such as that in question.
Disposition Decision AFFIRMED
14.03 NO TERMINATION – PERFORMANCE OF
MILITARY OR CIVIC DUTY
C. TERMINATION OF EMPLOYMENT BY
EMPLOYER
1. PRELIMINARY MATTERS
14.04 BASIS OF RIGHT AND REQUIREMENTS
BASIS
GUTIERREZ V SINGER SEWING MACHINE
411 SCRA 512
QUISUMBING; September 3, 2003
NATURE
review is the decision of the Court of Appeals
FACTS
- Petitioner Mario Gutierrez was initially hired by Singer Sewing Machine Company as
Audit Assistant on contractual basis in 1993. He became an Accounts Checker on
probationary status on February 8, 1994. Thereafter, he acquired regular status as Asset
Auditor on March 1, 1995, receiving a monthly salary of P4,455, until September 9, 1996,
when he was dismissed from employment. Singer premised the petitioner’s termination
on the following incidents:
- On August 1, 1996, at around 3:15 p.m., Ms. Emelita Garcia, Personnel Supervisor of
Singer, caught Gutierrez and three other Asset Auditors, watching a video tape inside the
Asset/Legal Department Office. Despite Ms. Garcia’s reminder that it was no longer
break time and that the other occupants of the room might be disturbed, Gutierrez and
company ignored Ms. Garcia and continued to watch the video. The following day,
August 2, 1996, Ms. Evangeline Que-Ilagan, Administration Manager of Singer, noticed a
- 201 - Disini
sign posted at the door of the Asset/Legal Department Office, which read “ MAIPARIT TI
UMISBO DITOY.” When she asked who placed the sign at the door, Gutierrez admitted
responsibility. When Ms. Que-Ilagan asked what it meant, Gutierrez answered, “ BAWAL
ANG UMIHI DITO” (No Urinating Here). Ms. Que-Ilagan then asked if Gutierrez had seen
anyone urinate at the door where the sign was posted and the latter replied in the
negative. Ms. Que-Ilagan then asked why he placed such a sign, to which Gutierrez
replied, “Gusto ko, eh” (It is my pleasure). She admonished him not to do the same thing
again and requested him to remove the sign, but Gutierrez refused to do so.
- Later that same day, August 2, 1996, Gutierrez personally explained his side to the
Asset Manager, Mr. Leonardo Consunji, at the latter’s office. Gutierrez claimed that he
only admitted to the posting of the sign in order to take the cudgels for a co-employee.
He also explained that their use of the video equipment was upon the orders of their
supervisor, Mr. Romeo C. Ninada. The latter wanted to test the quality of their video
players. Mr. Consunji brought the matter to the attention of Mr. Ninada. The latter
promptly issued a Memo dated August 6, 1996, requiring Gutierrez to explain his side.
Gutierrez then informed Mr. Ninada that he had already discussed the matter with Mr.
Consunji. In his letter to Mr. Consunji dated August 21, 1996, Mr. Ninada opined, “[T]he
case does not deserve to be devoted with too much time and effort” as he considered it a
“minor offense.”
- Nevertheless, Mr. Consunji issued a Memo dated August 28, 1996, informing Gutierrez
of the latter’s violation of company rules and regulations, specifically citing the following:
> Part V-B.9 Use of Company’s time, materials, equipment and other assets for personal
use or business; and
> Part V-B.18 Acts of vandalism such as defacing or destroying Company documents
and records; posting, altering or removing any printed matter, announcements or signs in
the Bulletin Boards unless specifically authorized.
- Under the Company Code of Discipline, these infractions were classified as 4 th Degree
Offenses with the corresponding sanction of dismissal. In the same Memo, Gutierrez was
directed to explain in writing why the aforesaid penalty should not be imposed on him. He
was given until August 30, 1996, to comply with the directive. As Gutierrez insisted that
he had previously verbally explained his side to Mr. Consunji, no written explanation was
submitted by him.
- On September 9, 1996, another Memo was issued by Mr. Consunji, worded as follows:
> After a thorough investigation of the incident and after having found your explanations
to be unsatisfactory and due to your refusal to comply with my memo to you dated
August 28, 1996 which constitutes willful defiance or disregard of Company authority, the
management deems it fitting and proper to impose upon you the penalty of dismissal
effective immediately upon receipt hereof.
- On September 19, 1996, petitioner filed a motion/request for reconsideration with
Singer, but the latter stood pat on its decision to dismiss him.
- Thus, petitioner filed the complaint for illegal dismissal with claims for damages before
the Labor Arbiter, docketed as NLRC NCR Case No. 00-10-06201-96. In a decision
dated August 13, 1997, Labor Arbiter Renato A. Bugarin dismissed the complaint for lack
of merit.
- Aggrieved, Singer filed a petition for certiorari with this Court, which in turn was
referred, by resolution dated December 2, 1998, to the Court of Appeals.The Court of
Appeals reversed the NLRC, thereby upholding and reinstating the decision of the Labor
Arbiter. Gutierrez now comes to the Court via a petition for review on certiorari seeking to
reverse and set aside the decision of the Court of Appeals, with a prayer for moral
damages and attorney’s fees.
ISSUE
WON the appellate court erred in reversing the NLRC which declared respondents guilty
of illegal dismissal of the petitioner from his employment
HELD
YES
Ratio We agree with the NLRC that petitioner’s dismissal from employment was
unjustified and illegal. Petitioner’s dismissal was based on his alleged violation of two
company rules and regulations, namely: (1) acts of vandalism; and (2) use of company’s
time, materials, equipment and other assets for personal use/business. These acts were
found by the Labor Arbiter to constitute serious misconduct or willful disobedience under
paragraph (a) of Article 282 of the Labor Code. The Labor Arbiter characterized
Gutierrez’ “undesirable or unreasonable behavior and unpleasant deportment with his
fellow employees, all the more his supervisors,” as within the scope of the analogous just
causes for termination under paragraph (e) of the same article.
- Singer averred that petitioner’s defiance of the reasonable rules and regulations being
implemented by Singer was enough reason for his dismissal. Singer emphasized that the
two violations of company rules and regulations on the two consecutive days, were
manifestations that petitioner was “challenging the authorities of Singer.”
In its impugned decision, however, the NLRC stated:
- We agree with the complainant that the questioned poster contained an innocuous and
harmless statement, which when translated in tagalog means “Bawal Umihi Dito” and
that such posting cannot be interpreted as an act of vandalism. The affidavit of Ms.
Ilagan, in relation with such poster, is not sufficient to establish complainant’s guilt of
Labor Law 1 A2010
vandalism.…The complainant likewise justified his action in relation to his act of watching
video films during office hours by arguing that he, together with four (4) other co-
employees, were asked by their immediate supervisor, Mr. Romy Ninada to test the
video tape player. Such claim was not denied by Mr. Ninada, who could have been
easily required by the respondents to do so. Mr. Ninada was the logical officer to negate
the claim of the complainant that he was authorized to test the quality of the VHS and
CTV 143 to guarantee the excellency (sic) of respondent firm’s products.
- Though no admission was made that the use of the video player was upon the orders of
the immediate supervisor of Gutierrez, Mr. Ninada himself considered the same to be a
minor infraction, not worth the time and effort of the company spent on the matter.
- We might add that, as contended by petitioner, the act of posting the sign does not fall
squarely within the scope of the cited company rules and regulations, Part V-B.18, on
vandalism. The rule prohibits unauthorized posting “in the Bulletin Board,” while the
present case involved posting of a sign at one of the office doors, a different matter. We
must also stress that, even on the assumption that Gutierrez in fact committed the cited
infractions, in our view they are not major violations but only minor ones which do not
merit the supreme penalty of dismissal from employment. Time and again, this Court has
underscored the need for restraint in the dismissal of workers:
- Extreme caution should be exercised in terminating the services of a worker for his job
may be the only lifeline on which he and his family depend for survival in these difficult
times. That lifeline should not be cut off except for a serious, just and lawful cause, for, to
a worker, the loss of his job may well mean the loss of hope for a decent life for him and
his loved ones.
- In the present case, the penalty of dismissal appears in our view unjustified, much too
harsh and quite disproportionate to the alleged infractions. Not only were the alleged
violations minor in nature, in this case the evidence adduced to prove them did not fairly
show they fall exactly within the rules and regulations allegedly violated. Otherwise
stated, the evidence did not square fully with the charges. That is why the Labor Arbiter
found only “analogous” causes which, in our view do not sufficiently justify the extreme
penalty of termination.
- The penalty imposed on the erring employee ought to be proportionate to the offense,
taking into account its nature and surrounding circumstances. In the application of labor
laws, the courts and other agencies of the government are guided by the social justice
mandate in our fundamental law.
- To be lawful, the cause for termination must be a serious and grave malfeasance to
justify the deprivation of a means of livelihood. This is merely in keeping with the spirit of
our Constitution and laws which lean over backwards in favor of the working class, and
mandate that every doubt must be resolved in their favor.
- To conclude, the Court of Appeals erred in reversing the decision of the NLRC which
declared respondents guilty of illegal dismissal.
MANILA TRADING AND SUPPLY CO INC V ZULUETA
69 PHIL 485
LAUREL; January 30, 1940
NATURE
Petition for Certiorari
FACTS
- On July 7, 1938, the Secretary of Labor apprised the Court of Industrial Relations of a
labor dispute existing between the petitioner company and its employees who were
members of the Philippine Labor Union
- A preliminary hearing was held after which, on August 6, 1938 the respondent court
entered an order requiring the company, inter alia not to dismiss any of its employees
and laborers except for good cause and with its permission.
- Subsequently, on June 30, 1939, one of the gatekeepers of the petitioners, Filomeno
Ramollo, was suspended for a breach of duty. The breach consisted in that as
gatekeeper of the petitioner he permitted, contrary to instructions, one of the customers
to pass thru the exit gate without paying for the work done on the car. Before this, it is
also alleged that he refused to work in the setting up department of the company when
ordered by his superior.
- The Philippine Labor Union submitted a petition requesting the reinstatement of the
suspended laborer, to which an answer was filed by the company.
- In its order of July 28, 1939, the respondent court found that the laborer was guilty of
the breach imputated to him, but, deciding that his suspension from June 30 to July 28,
1939 was a sufficient punishment, ordered his immediate reinstatement.
- The petitioner moved for reconsiderations, but the respondent Court of Industrial
Relations, sitting in banc, denied the motion.
ISSUE
WON the Court of Industrial Relations can order the readmission of a laborer who has
been found derelict in the performance of his duties
- 202 - Disini
HELD
NO
- The right of an employer to freely select or discharge his employees, is subject to
regulation by the State. An employer cannot legally be compelled to continue with the
employment of a person who admittedly was guilty of misfeasance or malfeasance
towards his employer, and whose continuance in the service of the latter is patently
inimical to his interest. The law, in protecting the rights of the laborer, authorizes neither
oppression nor self-destruction of the employer. There may, of course, be cases where
the suspension or dismissal of an employee is whimsical or unjustified or otherwise
illegal scrutinized carefully and the proper authorities will go to the core of the
controversy and not close their eyes to the real situation.
Disposition Writ of Certiorari granted
AGABON V NLRC
[PAGE 35]
PLDT V TOLENTINO
438 SCRA 555
CORONA; September 21, 2004
FACTS
- Arturo R. Tolentino Tolentino was employed in petitioner PLDT for 23 years.
- He started in 1972 as an installer/helper and, at the time of his termination in 1995, was
the division manager of the Project Support Division, Provincial Expansion Center, Meet
Demand Group.
- His division was in charge of the evaluation, recommendation and review of documents
relating to provincial lot acquisitions.  Sometime in 1995, Jonathan de Rivera, a
supervisor directly under respondent Tolentino, was found to have entered into an
“internal arrangement” with the sellers of a parcel of land which he recommended for
acquisition under PLDT’s expansion program. Quirino Donato, the attorney-in-fact of the
landowner, executed an affidavit disclosing his “internal arrangement” with de Rivera.
- Donato’s affidavit revealed that all follow-up calls regarding the transaction were to be
directed to the office of respondent and de Rivera. Upon being apprised of this “internal
arrangement,” PLDT dismissed de Rivera. After he was dismissed, de Rivera submitted a
sworn statement to PLDT implicating respondent as the person behind the anomalous
“internal arrangement.” Respondent, in an affidavit, denied this and pointed out that his
authority to approve real estate acquisitions was limited to land valued below P200,000.
- Petitioner PLDT sent a notice of dismissal, effective October 27, 1995, to respondent
Tolentino. Attached to this notice was a handwritten note from Nicanor E. Sacdalan, Vice-
President of the Provincial Expansion Center, Meet Demand Group, giving respondent
Tolentino the option to resign. Petitioner did not grant respondent’s request for a formal
hearing but delayed the implementation of his dismissal. On December 4, 1995, petitioner
informed respondent that his dismissal was already final and effective on December 5,
1995.
- Respondent then filed a complaint for illegal dismissal, moral and exemplary damages
and other monetary claims against petitioner PLDT in January, 1996. The labor arbiter
found that petitioner PLDT failed to prove and substantiate the charges against
respondent
- On appeal, the NLRC reversed the labor arbiter’s decision on the ground that
respondent was a managerial employee and that loss of trust and confidence was enough
reason to dismiss him.
- Respondent’s petition for certiorari was referred by this Court to the Court of Appeals
which rendered the assailed decision reinstating the decision of the labor arbiter, that is,
ordering respondent’s reinstatement.
ISSUE
WON the Court of Appeals erred in ruling that the dismissal was not founded on clearly
established facts sufficient to warrant separation from employment
HELD
NO
- The petition is without merit. PLDT’s basis for respondent’s dismissal was not enough to
defeat respondent’s security of tenure.
- There is no dispute over the fact that respondent was a managerial employee and
therefore loss of trust and confidence was a ground for his valid dismissal. The mere
existence of a basis for the loss of trust and confidence justifies the dismissal of the
employee because:
[w]hen an employee accepts a promotion to a managerial position or to an office
requiring full trust and confidence, she gives up some of the rigid guaranties available
to ordinary workers. Infractions which if committed by others would be overlooked or
condoned or penalties mitigated may be visited with more severe disciplinary action. A
company’s resort to acts of self-defense would be more easily justified.
Labor Law 1 A2010
- Proof beyond reasonable doubt is not required provided there is a valid reason for the
loss of trust and confidence, such as when the employer has a reasonable ground to
believe that the managerial employee concerned is responsible for the purported
misconduct and the nature of his participation renders him unworthy of the trust and
confidence demanded by his position.
- However, the right of the management to dismiss must be balanced against the
managerial employee’s right to security of tenure which is not one of the guaranties he
gives up. This Court has consistently ruled that managerial employees enjoy security of
tenure and, although the standards for their dismissal are less stringent, the loss of trust
and confidence must be substantial and founded on clearly established facts sufficient to
warrant the managerial employee’s separation from the company. Substantial evidence is
of critical importance and the burden rests on the employer to prove it. Due to its
subjective nature, it can easily be concocted by an abusive employer and used as a
subterfuge for causes which are improper, illegal or unjustified.
- In the case at bar, this Court agrees with the Court of Appeals that the petitioner’s
dismissal was not founded on clearly established facts sufficient to warrant separation
from employment. The factual findings of the court a quo on the issue of whether there
was sufficient basis for petitioner PLDT to dismiss respondent Tolentino are binding on
this Court. In the exercise of the power of review, the factual determinations of the Court
of Appeals are generally conclusive and binding on the Supreme Court.
- The evidence relied upon by petitioner PLDT — de Rivera’s sworn statement and
Donato’s affidavit — does not, in our view, establish respondent Tolentino’s complicity in
the “internal arrangement” engineered by his subordinate de Rivera.
- To be sure, respondent Tolentino was remiss in his duties as division manager for failing
to discover the “internal arrangement” contrived by his subordinate. However, dismissal
was not the proper sanction for such negligence.  It was not commensurate to the lapse
committed, especially in the light of respondent’s unblemished record of long and
dedicated service to the company. In Hongkong Shanghai Bank Corporation vs. NLRC ,
we had occasion to rule that:
The penalty imposed must be commensurate to the depravity of the malfeasance,
violation or crime being punished.  A grave injustice is committed in the name of
justice when the penalty imposed is grossly disproportionate to the wrong committed.
 [D]ismissal is the most severe penalty an employer can impose on an employee.  It
goes without saying that care must be taken, and due regard given to an employee’s
circumstances, in the application of such punishment.
- Certainly, a great injustice will result if this Court upholds Tolentino’s dismissal.
An employee illegally dismissed is entitled to full backwages and reinstatement
pursuant to Article 279 of the Labor Code, as amended by RA 6715.
- Although a managerial employee, respondent should be reinstated to his former position
or its equivalent without loss of seniority rights inasmuch as the alleged strained relations
between the parties were not adequately proven by petitioner PLDT which had the burden
of doing so.  In Quijano vs. Mercury Drug Corporation, the Court ruled that strained
relations are a factual issue which must be raised before the labor arbiter for the proper
reception of evidence. In this case, petitioner PLDT only raised the issue of strained
relations in its appeal from the labor arbiter’s decision. Thus, no competent evidence
exists in the records to support PLDT’s assertion that a peaceful working relationship with
respondent Tolentino was no longer possible. In fact, the records of the case show that
PLDT, through VP Sacdalan, gave respondent Tolentino the option to resign. [18] Such a
deferential act by management makes us doubt PLDT’s claim that its relations with
respondent were “strained.” The option to resign would not have been given had
animosity existed between them.
- Furthermore, respondent was dismissed in December, 1995 when petitioner PLDT was
still under the Cojuangco group. PLDT has since then passed to the ownership and
control of its new owners, the First Pacific group which has absolutely nothing to do so
with this controversy.  Since there are no strained relations between the new
management and respondent, reinstatement is feasible.
Disposition The petition was denied.
PEREZ V MEDICAL CITY GENERAL HOSPITAL
484 SCRA 138
AZCUNA; March 6, 2006
NATURE
Petition for certiorari
FACTS
- 203 - Disini
- September 9, 1999:Prompted by reports of missing medicines and supplies in the
Emergency Room/Trauma Room (ER/TR) and upon the suggestion of one of the
Hospital’s staff nurses, Medical City General Hospital, opened 22 lockers of employees
assigned to the ER/TR. The Hospital found four lockers with items belonging to it. The
employees corresponding to the lockers (Dominador Perez, Celine Campos, Lailanie
Espiritu and Mateo Butardo) were directed to submit written explanations as to why these
items were inside their lockers.
- Perez, Campos and Butardo submitted their written explanations, while Espiritu opted
to resign. An administrative hearing was held where the three employees who responded
were represented by a union counsel. At the end of the proceedings, the charge against
Butardo was dismissed while Perez and Campos, herein petitioners, were found to have
violated category seven of the company rules, a serious infraction meriting dismissal.
The Hospital offered them the opportunity to voluntarily resign with separation pay, under
a clause provided in the Collective Bargaining Agreement. They refused and the Hospital
dismissed them from the service.
- January 19, 2000: petitioners filed a complaint for illegal dismissal with the NLRC.
- Labor Arbiter found respondents guilty of illegal dismissal and ordered the
reinstatement of petitioners with backwages and without loss of seniority rights. NLRC
reversed the Labor Arbiter’s decision and dismissed the complaint. CA affirmed. Hence,
this petitiom.
- Petitioners maintain that they have sufficiently accounted for the presence of these
items inside their lockers and that the evidence presented against them is insufficient to
show that they are guilty of misappropriating company property. Moreover, assuming ex
gratia argumenti that there was violation of company rules, the penalty of dismissal would
be too harsh considering their long years of dedicated service to the Hospital.
ISSUES
1. WON there was sufficient basis to hold that petitioners misappropriated hospital
property
2. WON dismissal was the appropriate penalty
HELD
1. YES
- The Supreme Court is not a trier of facts, and this rule applies with greater force in labor
cases. Hence, the factual findings of the NLRC are generally accorded not only respect
but even finality if supported by substantial evidence and especially when affirmed by the
CA. However, a disharmony between the factual findings of the Labor Arbiter and the
NLRC opens the door to a review by this Court.
- Contrary to the position taken by the Labor Arbiter, the Hospital’s dismissal of
petitioners did not rest on speculative inferences. Petitioners themselves have admitted
that properties belonging to the Hospital were found inside their lockers. As to how these
items got inside the lockers, petitioners acknowledged having placed them there against
company rules. In view of these admissions, there is ample evidence to support a charge
for pilferage unless petitioners can satisfactorily explain their possession.
- It was made clear to all hospital staff that hospital equipment should only be kept in the
supplies locker.
2. NO
- The power to dismiss an employee is a recognized prerogative that is inherent in the
employer’s right to freely manage and regulate his business. An employer cannot be
expected to retain an employee whose lack of morals, respect and loyalty to his
employer or regard for his employer’s rules and appreciation of the dignity and
responsibility of his office has so plainly and completely been bared. An employer may
not be compelled to continue to employ a person whose continuance in service will
patently be inimical to his interest. The dismissal of an employee, in a way, is a measure
of self-protection.
- Nevertheless, whatever acknowledged right the employer has to discipline his
employee, it is still subject to reasonable regulation by the State in the exercise of its
police power. Thus, it is within the power of this Court not only to scrutinize the basis for
dismissal but also to determine if the penalty is commensurate to the offense,
notwithstanding the company rules.
- In this case, the Court agrees with the Labor Arbiter that dismissal would not be
proportionate to the gravity of the offense considering the circumstances present in this
case. During Perez and Campos' long tenure (19 and 7 years, respectively) with the
Hospital, it does not appear that they have been the subject of disciplinary sanctions and
they have kept their records unblemished. Moreover, the Court also takes into account
the fact that petitioners are not managerial or confidential employees in whom greater
trust is placed by management and from whom greater fidelity to duty is correspondingly
expected.
- The reinstatement of petitioners is in line with the social justice mandate of the
Constitution. Nevertheless, the Court does not countenance the wrongful act of pilferage
but simply maintains that the extreme penalty of dismissal is not justified and a lesser
penalty would suffice. Under the facts of this case, suspension would be adequate.
Without making any doctrinal pronouncement on the length of the suspension in cases
similar to this, the Court holds that considering petitioners’ non-employment since
January 2000, they may be deemed to have already served their period of suspension.
Labor Law 1 A2010
Consequently, the Labor Arbiter’s order of reinstatement is upheld, with the deletion of
the award of backwages, so as not to put a premium on acts of dishonesty.
Disposition Petition partially granted.
REQUIREMENTS
SUBSTANTIVE AND PROCEDURAL DUE PROCESS
FUJITSU COMPUTER PRODUCTS OF THE PHILS V CA
(DE GUZMAN, ALVAREZ)
454 SCRA 737
CALLEJO SR; April 8, 2000
NATURE
A petition for review assailing the Decision of the Court of Appeals in reversing the
decision of the National Labor Relations Commission (NLRC).
FACTS
- Petitioner Fujitsu Computer Products Corporation of the Philippines (FCPP) is a
corporation organized and existing under Philippine laws engaged in the manufacture of
hard disc drives, MR heads and other computer storage devices for export.
- Respondent Victor de Guzman began working for FCPP on September 21, 1997 as
Facilities Section Manager. As of 1999, he was also holding in a concurrent capacity the
position of Coordinator ISO 14000 Secretariat. Allan Alvarez, on the other hand, was
employed as a Senior Engineer on April 21, 1998. He was assigned at the Facilities
Department under the supervision of respondent De Guzman.
- The garbage and scrap materials of FCPP were collected and bought by the Saro’s
Trucking Services and Enterprises (Saro’s). On January 15, 1999, respondent De
Guzman as Facilities Section Manager, for and in behalf of FCPP, signed a Garbage
Collection Agreement with Saro’s, and the latter’s signatory therein was its owner and
general manager, Larry Manaig.
- De Guzman served as middleman between Sta. Rosa Bible Baptist Church and Saro.
The Church was looking for scrap metal, and was willing to buy the purlins at P3. The
scrap metal was then delivered from FCPP to Sta. Rosa Bible Baptist Church.
- Ernesto Espinosa, HRD and General Affairs Director of FCPP, received a disturbing
report from Manaig. Manaig reported that respondent De Guzman had caused the
“anomalous disposal of steel [purlins] owned by FCPP.” Two of Manaig’s employees,
Roberto Pumarez and Ma. Theresa S. Felipe, executed written statements detailing how
respondent De Guzman had ordered the steel purlins to be brought out. Thereafter,
petitioner Espinosa sent a two-page Inter-Office Memorandum dated July 24, 1999 to
respondent De Guzman, effectively placing him under preventive suspension.
- On July 28, 1999, respondent Alvarez sent an e-mail message to his co-employees,
expressing sympathy for the plight of respondent De Guzman. Respondent Alvarez used
a different computer, but the event viewer system installed in the premises of petitioner
FCPP was able to trace the e-mail message to him. Respondent Alvarez submitted a
written Explanation dated September 29, 1999 where he apologized, readily admitted
that he was the sender of the e-mail message in question, and claimed that he “acted
alone with his own conviction.” He alleged, however, that he was only expressing his
sentiments, and that he was led by his desire to help a friend in distress.
- Respondent Alvarez was informed that his services were terminated on the ground of
serious misconduct effective August 13, 1999. Respondent De Guzman’s employment
was, thereafter, terminated effective August 23, 1999 through an Inter-Office
Memorandum.
- The respondents then filed a complaint for illegal dismissal against the petitioners with
prayer for reinstatement, full backwages, damages and attorney’s fees before the NLRC.
Labor Arbiter Antonio R. Macam ruled in favor of FCPP, stating that it was justified in
terminating the employment of the respondents. According to the Labor Arbiter,
respondent De Guzman, a managerial employee, was validly dismissed for loss of trust
and confidence. Citing a number of cases,[24] the Labor Arbiter stressed that where an
employee holds position of trust and confidence, the employer is given wider latitude of
discretion in terminating his services for just cause.
- The NLRC sustained the ruling of the Labor Arbiter and dismissed the respondents’
appeal for lack of merit. The NLRC also affirmed the Labor Arbiter’s finding that
respondent De Guzman, a managerial employee who was routinely charged with the
custody and care of the petitioner’s property, was validly dismissed on the ground of
willful breach of trust and confidence. In so far as the dismissal of respondent Alvarez
was concerned, the Commission held that the circumstances surrounding the sending of
the clearly “malicious and premeditated e-mail message” constituted no less than serious
misconduct. Hence, respondent Alvarez’s dismissal was also justified under the
circumstances.
- 204 - Disini
- The CA reversed the ruling of the NLRC and held that the respondents were illegally
dismissed. According to the appellate court, the non-payment of the scrap steel purlins
by the Sta. Rosa Bible Baptist Church (Sta. Rosa) to Saro’s was not a valid cause for the
dismissal of respondent De Guzman. Contrary to the findings of the Labor Arbiter,
respondent De Guzman did not betray the trust reposed on him by his employer, as the
transaction involving the sale of scrap steel purlins was between Sta. Rosa and Saro’s.
Anent the dismissal of respondent Alvarez, the CA ruled that his act of “sympathizing and
believing in the innocence of respondent De Guzman and expressing his views” was not
of such grave character as to be considered serious misconduct which warranted the
penalty of dismissal.
ISSUES
1. WON De Guzman is guilty of breach of confidence, thus warranting dismissal
2. WON Alvarez committed serious misconduct in sending the e-mail
HELD
1. NO
- De Guzman is not guilty of breach of confidence.
Ratio To be a valid ground for dismissal, loss of trust and confidence 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.
In order to constitute a just cause for dismissal, the act complained of must be work-
related and shows that the employee concerned is unfit to continue working for the
employer.
Reasoning
- The term “trust and confidence” is restricted to managerial employees. In this case, it is
undisputed that respondent De Guzman, as the Facilities Section Manager, occupied a
position of responsibility, a position imbued with trust and confidence.
- The Court had the occasion to reiterate in Nokom v. National Labor Relations
Commission the guidelines for the application of the doctrine of loss of confidence:
Loss of confidence should not be simulated;
> It should not be used as a subterfuge for causes which are improper, illegal or
unjustified;
> It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary;
and
> It must be genuine, not a mere afterthought to justify earlier action taken in bad faith.
- The scrap metals, including the steel purlins, were already classified as scrap materials
and ready for disposal. No less than the written statements of the witnesses for the
petitioners confirm this.
- No fraud or bad faith could be attributed to respondent De Guzman, as evinced by his
readiness to disclose his participation in the transaction between Saro’s and Sta. Rosa.
- Loss of trust and confidence as a just cause for termination of employment is premised
on the fact that the employee concerned is invested with delicate matters, such as the
handling or care and protection of the property and assets of the employer. After such
scrap materials are weighed, loaded onto a truck and carried out of the company
premises, the petitioner FCPP can no longer be considered the owner thereof, and
ceases to exercise control over such property. In this case however, Saro’s, as the new
owner of the scrap materials in question, including the steel purlins, was free to contract
with anyone as it wished.
- A condemnation of dishonesty and disloyalty cannot arise from suspicions spawned by
speculative inferences. Because of its subjective nature, this Court has been very
scrutinizing in cases of dismissal based on loss of trust and confidence because the
same can easily be concocted by an abusive employer. Thus, when the breach of trust
or loss of confidence theorized upon is not borne by clearly established facts, as in this
case, such dismissal on the ground of loss of confidence cannot be allowed.
2. NO
- Alvarez did not commit serious misconduct in sending the e-mail.
Ratio Misconduct has been defined as improper or wrong conduct. It is the transgression
of some established and definite rule of action, a forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and not mere error of judgment. The
misconduct to be serious must be of such grave and aggravated character and not
merely trivial and unimportant.
Reasoning
- For misconduct or improper behavior to be a just cause for dismissal, (a) it must be
serious; (b) must relate to the performance of the employee’s duties; and (c) must show
that the employee has become unfit to continue working for the employer.
- The Court finds that respondent Alvarez’s act of sending an e-mail message as an
expression of sympathy for the plight of a superior can hardly be characterized as
serious misconduct as to merit the penalty of dismissal.
- There is no showing that the sending of such e-mail message had any bearing or
relation on respondent Alvarez’s competence and proficiency in his job. To reiterate, in
Labor Law 1 A2010
order to consider it a serious misconduct that would justify dismissal under the law, the
act must have been done in relation to the performance of his duties as would show him
to be unfit to continue working for his employer.
Disposition Petition is denied. Decision of the CA is affirmed, with costs against the
petitioners.
ARIOLA V PHILEX MINING CORP
446 SCRA 514
CARPIO; August 9, 2005
NATURE
Petition for review of the decision of the CA finding the retrenchment of the petitioners to
be valid
FACTS
- Petitioners are former supervisors of respondent Philex Mining Corp. Philex sustained
financial losses in its operations and adopted several measures including reducing
personnel through early voluntary retirement and retrenchment programs to save costs.
The labor union representing the rank-and-file employees and the union representing the
supervisory employees signed a MOA with Philex prescribing the criteria for
retrenchment.
- Petitioners, with 6 other supervisors and 49 rank-and-file employees, received from
Philex termination notices informing them of their retrenchment. Philex paid them
separation pay, and all of them signed Deeds of Release and Quitclaim in Philex’s favor.
Claiming that Philex dismissed them illegally, these supervisors and rank-and-file
employees separately submitted for voluntary arbitration the legality of their separation
from service.
The rank-and-file employees’ case
- The rank-and-file employees’ case was referred to Arbitrator Valdez. Valdez ruled in the
employees’ favor, declared their dismissal illegal, and ordered their reinstatement. He
held that Philex failed to prove its claim of financial losses and that the criteria for
retrenchment in the rank-and-file’s MOA were arbitrary and inconsistent with the CBA
then in force. The CA reversed Valdez’s finding on Philex’s financial condition and held
that Philex had a valid reason to undertake retrenchment. Nevertheless, the appellate
court affirmed Valdez’s ruling that Philex is liable for illegal dismissal because the criteria
for retrenchment in the rank-and-file’s MOA were inequitable. Philex further appealed to
this Court, which denied Philex’s petition.
The supervisory employees’ case
- The supervisors’ case was referred to Arbitrator Advincula, who issued an order to
reinstate petitioners and their co-complainants, after Philex failed to timely file its Position
Paper. On Philex’s motion, Advincula admitted Philex’s Position Paper and
“Supplementary” Position Paper. He rendered judgment finding “sufficient basis or just
cause” for Philex to undertake a retrenchment.
Advincula also held that petitioners were barred from questioning their separation from
service because they availed of the early retirement program and executed the Deeds of
Release and Quitclaim releasing Philex from further liability. Petitioners appealed to the
CA, which denied the petition for lack of merit. The appellate court no longer ruled on the
validity of Philex’s retrenchment program because it treated its decision in the rank-and-
file employees’ case as the law of the case on that issue.
ISSUES
1. WON petitioners retired or whether Philex dismissed them from service
2. WON petitioners’ dismissal was illegal
HELD
1. NO
Ratio If the intent to retire is not clearly established or if the retirement is involuntary, it is
to be treated as a discharge.
Reasoning
- Although there is no dispute that petitioners received varied amounts denominated as
“retirement gratuity,” the records show that Philex paid these amounts because of
petitioners’ retrenchment. Under Philex’s Retirement Gratuity Plan, “retirement gratuity”
is paid not only to retiring employees but also to those who, like petitioners, are
dismissed for cause “beyond their control” such as retrenchment. Philex treated the
“retirement gratuity” as petitioners’ basic separation pay as indicated in Deeds of
Release and Quitclaims petitioners signed. Significantly, Philex paid petitioners such
separation pay after notifying them of their retrenchment.
Obiter
- In the letter addressed to petitioner Biete, Roxas of Philex Retirement Trust informed
Biete that he was entitled to receive “retirement gratuity” because his separation, as a
result of the retrenchment program, is for cause beyond his control. Biete submitted
Roxas’ letter to the CA after that court had rendered its decision. However, at that time,
petitioners did not yet file their MFR. Considering the import of the letter, it was error for
the CA not to have considered the letter in resolving petitioners’ MFR. There can be no
- 205 - Disini
denial of due process where the party claiming to be aggrieved is the one who is guilty of
not disclosing to the court the vital document that contains the most conclusive evidence
regarding the matter in dispute. Philex cannot feign ignorance of this letter.
2. YES
Ratio A substantive defect invalidates a dismissal because the ground for dismissal is
negated by such defect, rendering the dismissal without basis.
Reasoning
- Philex’s financial condition justified petitioners’ retrenchment. What Philex failed to do
was implement its retrenchment program in a just and proper manner. Its failure to use a
reasonable and fair standard in the computation of the supervisors’ demerits points is not
merely a procedural but a substantive defect which invalidates petitioners’ dismissal.
When the defect is procedural, the dismissal remains valid because the basis of the
dismissal is not in any way affected by such defect.
Disposition The petition is GRANTED. The decision of the CA is SET ASIDE. We
ENTER another judgment finding petitioners to have been illegally dismissed and
ordering Philex to reinstate petitioners with full backwages, provided that the amounts
petitioners received shall be deducted therefrom. If reinstatement is no longer possible,
Philex shall pay backwages as computed above plus separation pay.
PHILIPPINE NATIONAL BANK V CABANSAG
460 SCRA 514
PANGANIBAN; June 21, 2005
NATURE
Petition for review on certiorari
FACTS
- Florence Cabansag arrived in Singapore as a tourist. She applied for the Singaore
branch of PNB. At that time, PNB had 2 types of employees: 1) employees hired in
Manila and assigned in Singapore 2) locally hired.
- Ruben Tobias, the general manager of the bank, found her qualified and recommended
her to the President of the bank in Manila. The latter approved
- Cabansag then applied for an Employment pass with the Ministry of Manpower of the
Government of Singapore. She was issued said pass.
- On December 7, 1998, she was offered a temporary appointment, as Credit Officer,
wherein she was to be on probation for 3 months. Cabansag accepted the position and
assumed office. In the meantime, the Philippine Embassy in Singapore processed the
employment contract of Florence O. Cabansag and, on March 8, 1999, she was issued
by the Philippine Overseas Employment Administration, an ‘Overseas Employment
Certificate,’ certifying that she was a bona fide contract worker for Singapore
- On April 15, 1999, she was asked to resign. Tobias said that it was a cost cutting
measure. He likewise said that the PNB branch would be transformed into a remittance
office. Cabansag then asked Tobias that she be furnished with a ‘Formal Advice’ from
the PNB Head Office in Manila. However, Tobias flatly refused. Cabansag did not submit
any letter of resignation.
- On April 16,1999, Tobias again demanded that she submit a resignation letter. She was
warned that he will be dismissed if she does not. Cabansag asked for more time in order
for her to look for another job. Cabansag said that she should be out by May15, 1999.
- However, on April 19, 1999, Tobias again asked that Cabansag submit her letter of
resignation. Cabansag refused. The next day she was terminated.
- NLRC ruled in favor of Cabansag. CA affirmed.
ISSUES
1. WON the NLRC has jurisdiction over the case at bar
2. WON the arbitration of the NLRC in the National Capital Region is the most convenient
venue or forum to hear and decide the instant controversy
3. WON Cabansag was illegally dismissed
HELD
1. YES
- As enunciated in A217 of the Labor Code, labor arbiters clearly have original and
exclusive jurisdiction over claims arising from employer-employee relations, including
termination disputes involving all workers, among whom are overseas Filipino workers
- When Cabansag obtained an employment pass from the Singapore Ministry of
Manpower, it did not imply a waiver of one’s national labor laws. The permit only grants
one a status as a worker in the issuing country. She also applied for an Overseas
Employment Certificate from the POEA through the Philippine Embassy in Singapore.
This entitles her to all benefits and processes under our statutes
- Moreover, petitioner admits that it is a Philippine corporation doing business through a
branch office in Singapore. Significantly, respondent’s employment by the Singapore
branch office had to be approved by Benjamin P. Palma Gil,[19] the president of the bank
whose principal offices were in Manila. This circumstance militates against petitioner’s
contention that respondent was “locally hired”; and totally “governed by and subject to
the laws, common practices and customs” of Singapore, not of the Philippines. Instead,
Labor Law 1 A2010
with more reason does this fact reinforce the presumption that respondent falls under the
legal definition of migrant worker.
2. YES
- The law gives her two choices:
(1) at the Regional Arbitration Branch (RAB) where she resides or
(2) at the RAB where the principal office of her employer is situated
3. YES
- Cabansag was already a regular employee at the time she was terminated, since her 3
months probationary period has already ended.
- The twin requirements of notice and hearing constitute the essential elements of
procedural due process, and neither of these elements can be eliminated without running
afoul of the constitutional guarantee
- In dismissing employees, the employer must furnish them two written notices:
1) one to apprise them of the particular acts or omissions for which their dismissal is
sought; and
2) the other to inform them of the decision to dismiss them. As to the requirement of a
hearing, its essence lies simply in the opportunity to be heard.
- Respondent was not notified of the specific act or omission for which her dismissal was
being sought. Neither was she given any chance to be heard, as required by law. At any
rate, even if she were given the opportunity to be heard, she could not have defended
herself effectively, for she knew no cause to answer to
- All that petitioner tendered to respondent was a notice of her employment termination
effective the very same day, together with the equivalent of a one-month pay. This Court
has already held that nothing in the law gives an employer the option to substitute the
required prior notice and opportunity to be heard with the mere payment of 30 days’
salary.
- Moreover, Articles 282,[26] 283[27] and 284[28] of the Labor Code provide the valid
grounds or causes for an employee’s dismissal. The petitioner has not asserted any
grounds as a valid reason for terminating the employment of respondent
Disposition Petition denied
GENUINO ICE CO INC V MAGPANTAY
493 SCRA 195
AUSTRIA-MARTINEZ; June 27, 2006
NATURE
Review on certiorari
FACTS
- Alfonso Magpantay (respondent) was employed as a machine operator with Genuino
Ice Company, Inc. (petitioner). On November 18, 1996, respondent filed against
petitioner a complaint for illegal dismissal with prayer for moral and exemplary damages.
In his Position Paper, respondent alleged that he was dismissed from service effective
immediately by virtue of a memorandum, after which he was not allowed anymore to
enter the company premises. Respondent bewailed that his termination from
employment was done without due process.Petitioner countered that he was not illegally
dismissed, since the dismissal was based on a valid ground, i.e., he led an illegal strike
at petitioner’s sister company, Genuino Agro Industrial Development Corporation, which
lasted from November 18 to 22, 1995, resulting in big operation losses on the latter’s
part. Petitioner also maintained that respondent’s dismissal was made after he was
accorded due process.
- Petitioner initially claimed that respondent’s acts were tantamount to serious
misconduct or willful disobedience, gross and habitual neglect of duties, and breach of
trust. Subsequently, petitioner amended its position paper to include insubordination
among the grounds for his dismissal, since it came out during respondent’s cross-
examination, and the matter was reported only after the new personnel manager
assumed his position in August 1996.
- Labor Arbiter of the National Labor Relations Commission (NLRC) dismissed the case
for lack of merit finding that petitioner had valid cause to dismiss respondent. Labor
Arbiter’s Decision affirmed. Motion for reconsideration of the NLRC Decision was denied.
Special civil action for certiorari with the CA was filed. Petitioner filed its Comment,
contending that the petition was filed out of time, considering that contrary to
respondent’s claim that the NLRC Resolution dated August 31, 1999 was received on
December 20, 1999, it was actually received on September 15, 1999, as shown in the
registry return card. Petitioner also reiterated its arguments that respondent was
dismissed for cause and with due process.
- CA rendered the assailed Decision granting the petition and declaring respondent’s
dismissal as illegal. Petitioner filed a motion for reconsideration which the CA denied.
ISSUES
1. WON the petition was filed by petitioner out of time
2. WON he was illegally dismissed (and on what ground)
3. WON there was due process under Section 2 (d), Rule 1, Book VI of the Omnibus
Rules Implementing the Labor Code provides for the standards of due process
- 206 - Disini
HELD
1. NO
- The New Rules of Procedure of the NLRC provides the rule for the service of notices
and resolutions in NLRC cases, to wit:
Sec. 4. Service of notices and resolutions. – a) Notices or summons and copies of
orders, resolutions or decisions shall be served on the parties to the case personally
by the bailiff or the duly authorized public officer within three (3) days from receipt
thereof by registered mail; Provided, that where a party is represented by counsel or
authorized representative, service shall be made on such counsel or authorized
representative;
- The presumption is that the decision was delivered to a person in his office, who was
duly authorized to receive papers for him, in the absence of proof to the contrary. It is
likewise a fundamental rule that unless the contrary is proven, official duty is presumed to
have been performed regularly and judicial proceedings regularly conducted, which
includes the presumption of regularity of service of summons and other notices. The
registry return of the registered mail as having been received is prima facie proof of the
facts indicated therein. Thus, it was necessary for respondent to rebut that legal
presumption with competent and proper evidence. Records show that Ducut is not an
employee of the FEU Legal Aid Bureau, but is connected with the Computer Services
Department. The FEU Legal Aid Bureau has its own personnel which include Ms. dela
Paz who is the one authorized to receive communications in behalf of the office. It has
been ruled that a service of a copy of a decision on a person who is neither a clerk nor
one in charge of the attorney’s office is invalid. The CA was correct in ruling that the
reckoning period should be the date when respondent’s counsel actually received the
NLRC Resolution dated August 31, 1999, which was on December 20, 1999. Petitioner,
however, pointed out that a certain Ruby D.G. Sayat received a copy of their Motion for
Reconsideration filed by registered mail on August 16, 2000. Respondent contended that
at the time Sayat received the motion, she was then detailed at the office and was
authorized to receive said pleading, and that it was an isolated and exceptional instance.
On this matter, the FEU Acting Postmaster certified that Sayat is a permanent employee
of the FEU Legal Aid Bureau. As such, she is authorized to receive communications in
behalf of the office and need not possess an express authority to do so. More
importantly, the Court has consistently frowned upon the dismissal of an appeal on
purely technical grounds. While the right to appeal is a statutory, not a natural right, it is,
nonetheless, an essential part of our judicial system. Courts should proceed with caution
so as not to deprive a party of the right to appeal, but rather, ensure amplest opportunity
for the proper and just disposition of a cause, free from the constraints of technicalities.
2. NO, on the ground of habitual neglect of duties but YES on the ground of
insubordination. The Court sustained the CA’s finding that respondent’s four-day
absence does not amount to a habitual neglect of duty; however, the Court found that
respondent was validly dismissed on ground of willful disobedience or insubordination.
- FOR HABITUAL NEGLECT OF DUTY: Neglect of duty, to be a ground for dismissal,
must be both gross and habitual. 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. Thus, the
single or isolated act of negligence does not constitute a just cause for the dismissal of
the employee. Thus, the Court agrees with the CA that respondent’s four-day absence is
not tantamount to a gross and habitual neglect of duty. As aptly stated by the CA,
“(W)hile he may be found by the labor courts to be grossly negligent of his duties, he has
never been proven to be habitually absent in a span of seven (7) years as GICI’s
employee. The factual circumstances and evidence do not clearly demonstrate that
petitioner’s [respondent] absences contributed to the detriment of GICI’s operations and
caused irreparable damage to the company.”
- FOR INSUBORDINATION OR WILLFUL DISOBEDIENCE: On this point, the CA
opined that petitioner included insubordination as a “mere after-thought.” It noted that
petitioner seemed to be “irresolute” in stating the cause of respondent’s dismissal, as in
its Position Paper, it originally relied on respondent’s four-day absence or participation in
the illegal strike as a cause for dismissal but later on amended its Position Paper to
include insubordination. Thus, the CA did not make any factual finding or conclusion in its
Decision vis-à-vis petitioner’s allegation of respondent’s insubordination.
While its perception may be true, it should not have deterred the CA from making any
resolution on the matter. For one, respondent was able to argue against petitioner’s
allegation of insubordination before the Labor Arbiter and the NLRC. For another, it was
respondent himself who raised the subject before the CA, wherein he stated in his
Petition. Further, the proceedings before the Labor Arbiter and the NLRC are non-
litigious in nature. As such, the proceedings before it are not bound by the technical
niceties of the law and procedure and the rules obtaining in courts of law, as dictated by
Article 221 of the Labor Code:
ART. 221. Technical rules not binding and prior resort to amicable settlement. – In
any proceeding before the Commission or any of the Labor Arbiters, the rules of
evidence prevailing in courts of law or equity shall not be controlling and it is the spirit
and intention of this Code that the Commission and its members and the Labor
Labor Law 1 A2010 - 207 - Disini
Arbiters shall use every and all reasonable means to ascertain the facts in each case
speedily and objectively and without regard to technicalities of law or procedure, all in
the interest of due process. This rule applies equally to both the employee and the A. SERIOUS MISCONDUCT
employer. In the interest of due process, the Labor Code directs labor officials to use
all reasonable means to ascertain the facts speedily and objectively, with little regard
to technicalities or formalities. What is essential is that every litigant is given
reasonable opportunity to appear and defend his right, introduce witnesses and
DEFINITION AND ACTS
relevant evidence in his favor, which undoubtedly, was done in this case. Willful
disobedience, or insubordination as otherwise branded in this case, as a just cause VALIAO V CA
for dismissal of an employee, necessitates the concurrence of at least two requisites: [PAGE 11]
(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 VILLAMOR GOLF CLUB V PEHID
been engaged to discharge. Company policies and regulations are generally valid and 472 SCRA 36
binding on the parties and must be complied with until finally revised or amended, CALLEJO; October 4, 2005
unilaterally or preferably through negotiation, by competent authority. For misconduct
or improper behavior to be a just cause for dismissal, the same must be related to the
NATURE
performance of the employee’s duties and must show that he has become unfit to
Petition for review on certiorari of CA decision
continue working for the employer. In the case at bench, petitioner informed
respondent, through a Memorandum dated November 14, 1995, that he was being
FACTS
transferred to its GMA, Cavite operations effective November 20, 1995.
- Rodolfo Pehid was employed by the Villamor Golf Club (VGC) as an attendant in the
- Due to his refusal to report to the Cavite plant, petitioner reiterated its order transferring
men’s locker room, and, thereafter, he became the Supervisor-in-Charge. His
respondent in its Memorandum dated November 24, 1995, where respondent was also
subordinates included Superal, Parilla, Mendoza, Velasquez, Casabon, Buenaventura
warned that his failure to report to the Cavite plant will be considered as an absence
and Modelo. Pehid and these employees agreed to establish a common fund from the
without leave (AWOL) and insubordination. Respondent was required to comply with the
tips they received from the customers, guests and members of the club for their mutual
order within 24 hours from receipt, otherwise, disciplinary action will be imposed on
needs and benefits. Each member was to contribute the amount of P100 daily. The
respondent. Respondent replied with a request that he remain in the Otis plant since a
contributions of the employees had reached the aggregate amount of P17,990 based on
transfer to the Cavite plant will entail additional expenditure and travel time on his part.
the logbook maintained in the locker room. This agreement was not known to the VGC
Petitioner again wrote respondent inviting him to appear before the Plant Level
management.
Investigation on December 11, 1995 for the latter to be able to clarify his reasons for
- An audit of the Locker Room Section of the golf club was conducted stating, among
refusing the transfer. Finally, petitioner issued its Memorandum dated December 12,
others, that based on the information relayed, there was an undeclared and unrecorded
1995 informing respondent of its decision to terminate his services. The rule is that the
aggregate amount of P17,990 for the fund from May ‘98 to October ‘98. Further, not one
transfer of an employee ordinarily lies within the ambit of the employer’s prerogatives.
in the said section admitted custody of such amount and there was no record that the
The employer exercises the prerogative to transfer an employee for valid reasons and
money had been distributed among those employed in the locker room. In said report,
according to the requirement of its business, provided the transfer does not result in
Capuyan recommended that an investigation be conducted to determine the
demotion in rank or diminution of the employee’s salary, benefits and other privileges. In
whereabouts of said amount and who was accountable therefor.
this case, petitioner’s order for respondent to transfer to the GMA, Cavite Plant is a
- After the requisite formal investigation by the Administrative Board of Inquiry, Pehid
reasonable and lawful order was made known to him and pertains to his duties as a
received order that his employment was terminated. Based on its findings, Pehid
machine operator. There was no demotion involved or diminution of salary, benefits and
committed gross misconduct in the performance of his duties in violation of Paragraph
other privileges, and in fact, petitioner was even willing to provide respondent with
IV-E(d) of the VGC Rules and Regulations. He was also informed that he committed
monetary allowance to defray whatever additional expenses he may incur with the
acts of dishonesty which caused and tend to cause prejudice to the club for
transfer. Such being the case, respondent cannot adamantly refuse to abide by the order
misappropriating the common fund of P17,990.00 for his personal benefit.
of transfer without exposing himself to the risk of being dismissed. Hence, his dismissal
- Pehid filed a complaint for illegal dismissal, unfair labor practice, separation
was for just cause in accordance with Article 282 (a) of the Labor Code. Consequently,
pay/retirement benefits, damages and attorney’s fees against petitioners VGC. LA ruled
respondent is not entitled to reinstatement or separation pay and backwages.
in favor of Pehid saying that his dismissal was illegal. NLRC set aside and reversed the
3. YES
decision of LA.
- Simply stated, the employer must furnish the employee a written notice containing a
- CA set aside and reversed NLRC decision. The CA declared that Paragraph IV-E(a)
statement of the cause for termination and to afford said employee ample opportunity to
and (d) of the VGC Rules 1 expressly provide that the funds referred to therein are funds
be heard and defend himself with the assistance of his representative, if he so desires,
of the club and that the P17,990 did not form part of such fund but belonged to the locker
and the employee must be notified in writing of the decision dismissing him, stating
room personnel. The CA also declared that the management of the VGC had no
clearly the reasons therefor.
personal knowledge about the funds and, in fact, had not sanctioned its existence.
- The CA found that petitioner failed to observe the twin requirements of notice and
Moreover, VGC was not prejudiced by the loss of the fund. Hence, this petition by VGC.
hearing, stating that its Memorandum dated December 13, 1995 does not squarely meet
Petitioners’ contentions:
the standards of due process. The circumstances surrounding respondent’s dismissal,
> That when confronted with the letter-complaint against him, Pehid admitted that his
however, prove the contrary. The CA failed to take into account that prior to the
accountability arose from the proceeds of the sale of the golf club and golf shares
Memorandum dated December 13, 1995, petitioner sent respondent several memoranda
entrusted to him, which he used for his personal needs without the knowledge of the
apprising him of the possible implications of his refusal to comply with the order of
persons concerned;
transfer. Thus, in its Memorandum dated November 24, 1995, petitioner notified
> That there is substantial evidence that Pehid was the custodian of fund belonging to
respondent that his continued non-compliance with the order of transfer might bring
the members of the locker room and that his misappropriation of the same constituted
about disciplinary action. Respondent replied to this memorandum, stating the reasons
gross misconduct;
for his refusal, i.e., additional expenses, longer travel time, and union concerns.
> That it is an act of manifest dishonesty within the context of Paragraph IV-E(d) of the
Petitioner sent another Memorandum on December 9, 1995, asking respondent to
Rules of Conduct of the club, in relation to A282(e) of the Labor Code, tending to
appear on December 11, 1995, for further clarification of his reasons for refusing the
prejudice the VGC
transfer. Despite the meeting, and since respondent, apparently, stubbornly refused to
> That, based on the substantial evidence Pehid misappropriated the fund as his co-
heed petitioner’s order, it was then that the Memorandum dated December 13, 1995 was
employees in the locker room even positively identified him as the custodian thereof; and
issued to respondent informing him of the management’s decision to terminate his
> that Pehid’s failure to account for and distribute the common fund which the locker
services. Clearly, respondent’s right to due process was not violated.
personnel had established for their mutual aid and benefit is a manifest dishonesty falling
Disposition petition is GRANTED. The CA Decision dated August 3, 2000 and
within the scope of the proviso
Resolution dated March 16, 2001 are SET ASIDE, and the NLRC Decision dated June
Respondent’s arguments:
30, 1999 is REINSTATED.
> That he was dismissed without just cause and due process of law;

1
14.05 JUST CAUSES – SUBSTANTIVE DUE 1.
E. Dishonesty
The following shall constitute violation of this section.
PROCESS – GROUNDS FOR TERMINATION a)
d)
Misappropriation or malversation of Club funds.
All other acts of dishonesty which cause or tend to cause prejudice to VGC
Labor Law 1 A2010
> that there was no basis or evidence to show that he had custody of the common fund
which was used for his own benefit;
> that he incurred the ire of his superiors for testifying in support of Tansiongco, a former
Director of Personnel who was dismissed by VGC; and
> that one of Tansiongco’s accusers was the brother of Velasquez, one of the locker
boys who complained against him.
ISSUES
1. WON CA decision is contrary to law and jurisprudence and therefore reversible
2. WON the incident of the case shall fall within the provision of Article 282 paragraph (e)
of the Labor Code
HELD
1. NO
- Company policies and regulations are, unless shown to be grossly oppressive or
contrary to law, generally valid and binding and must be complied with by the parties
unless finally revised or amended, unilaterally or preferably through negotiation.
However, while an employee may be validly dismissed for violation of a reasonable rule
or regulation adopted for the conduct of the company’s business, an act allegedly in
breach thereof must clearly and convincingly fall within the express intendment of such
order.
- The CA was correct in ruling that the NLRC had overlooked and misapplied certain
facts and circumstances of substance, which, if properly appreciated, would affect the
disposition of the case.
- There’s no doubt that funds alleged to have been embezzled by the petitioner,
belonged to the personnel of respondent VGC and not to respondent VGC. Under the
afore-quoted VGC rule (see footnote), the dishonesty of an employee to be a valid cause
for dismissal must relate to or involve the misappropriation or malversation of the club
funds, or cause or tend to cause prejudice to VGC. The substantial evidence on record
indicates that the P17,990, which was accumulated from a portion of the tips given by the
golfers from May 1998 to October 1998 and was allegedly misappropriated by the
respondent as the purported custodian thereof, did not belong to VGC but to the forced
savings of its locker room personnel. Hence, VGC was not prejudiced. So it is within law
and jurisprudence that CA reversed NLRC ruling.
2. NO
Ratio The principle in statutory construction of ejusdem generis: Where general words
follow an enumeration of persons or things, by words of a particular and specific
meaning, such general words are not to be construed in their widest extent, but are to be
held as applying only to persons or things of the same kind or class as those specifically
mentioned.
Reasoning
- Based on the grounds of termination provided under A282 of the Labor Code and the
VGC Rules and Regulations, the common denominator thereof to constitute gross
misconduct as a ground for a valid termination of the employee, is that – it is committed
in connection with the latter’s work or employment. In the instant case, as previously
pointed out, the alleged petitioner’s misappropriation or malversation was committed,
assuming it to be true, against the common funds of the Locker Room personnel, which
did not belong nor sanctioned by respondent VGC. A fortiori, respondent VGC was not
prejudiced or damaged by the loss or misappropriation thereof.
Obiter
- Important for our purposes in the outline: “Serious misconduct” as a valid cause for the
dismissal of an employee is defined as improper or wrong conduct; 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. To be serious
within the meaning and intendment of the law, the misconduct must be of such grave and
aggravated character and not merely trivial or unimportant. However serious such
misconduct, it must be in connection with the employee’s work to constitute just cause for
his separation. The act complained of must be related to the performance of the
employee’s duties such as would show him to be unfit to continue working for the
employer.
Disposition Petition is DENIED for lack of merit. CA decision AFFIRMED.
LAKPUE V BELGA
473 SCRA 617
YNARES-SANTIAGO; October 20, 2005
FACTS
- Petitioner Tropical Biological Phils., Inc. (Tropical), a subsidiary of Lakpue Group of
Companies, hired on March 1, 1995 respondent Ma. Lourdes Belga (Belga) as
bookkeeper and subsequently promoted as assistant cashier. On March 19, 2001, Belga
brought her daughter to the Philippine General Hospital (PGH) for treatment of broncho-
- 208 - Disini
pneumonia.  On her way to the hospital, Belga dropped by the house of Marylinda O.
Vegafria, Technical Manager of Tropical, to hand over the documents she worked on
over the weekend and to give notice of her emergency leave.
 - While at the PGH, Belga who was pregnant experienced labor pains and gave birth on
the same day.  On March 22, 2001, or two days after giving birth, Tropical summoned
Belga to report for work but the latter replied that she could not comply because of her
situation.  On March 30, 2001, Tropical sent Belga another memorandum ordering her to
report for work and also informing her of the clarificatory conference scheduled on April
2, 2001.  Belga requested that the conference be moved to April 4, 2001 as her newborn
was scheduled for check-up on April 2, 2001.  When Belga attended the clarificatory
conference on April 4, 2001, she was informed of her dismissal effective that day.
ISSUE
WON Belga was illegally dismissed
HELD
YES
- Tropical terminated Belga on the following grounds:  (1) Absence without official leave
for 16 days; (2) Dishonesty, for deliberately concealing her pregnancy; (3)
Insubordination, for her deliberate refusal to heed and comply with the memoranda sent
by the Personnel Department on March 21 and 30, 2001 respectively
- Tropical cites the following paragraphs of Article 282 of the Labor Code as legal basis
for terminating Belga:
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;…
(c)        Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative
- We have defined misconduct as a 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. Such misconduct, however serious, must,
nevertheless, be in connection with the employee’s work to constitute just cause for his
separation
- Her absence for 16 days was justified considering that she had just delivered a child,
which can hardly be considered a dereliction of duty or wrongful intent on the part of
Belga.
-Tropical harps on the alleged concealment by Belga of her pregnancy.  This argument,
however, begs the question as to how one can conceal a full-term pregnancy.  We agree
with respondent’s position that it can hardly escape notice how she grows bigger each
day.  While there may be instances where the pregnancy may be inconspicuous, it has
not been sufficiently proven by Tropical that Belga’s case is such
- The charge of disobedience for Belga’s failure to comply with the memoranda must
likewise fail.  Disobedience, as a just cause for termination, must be willful or intentional. 
In the instant case, the memoranda were given to Belga two days after she had given
birth.  It was thus physically impossible for Belga to report for work and explain her
absence, as ordered
- Tropical avers that Belga’s job as Treasury Assistant is a position of responsibility since
she handles vital transactions for the company.  It adds that the nature of Belga’s work
and the character of her duties involved utmost trust and confidence.
- In order to constitute a just cause for dismissal, the act complained of must be “work-
related” such as would show the employee concerned to be unfit to continue working for
the employer. More importantly, the loss of trust and confidence must be based on the
willful breach of the trust reposed in the employee by his employer.  A breach of trust is
willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently
- Belga was an assistant cashier whose primary function was to assist the cashier in
such duties as preparation of deposit slips, provisional receipts, post-dated checks, etc. 
As correctly observed by the Court of Appeals, these functions are essentially clerical. 
COCA-COLA BOTTLERS PHIL INC V KAPISANAN NG
MALAYANG MANGGAGAWA SA COCA-COLA
452 SCRA 480
CALLEJO; February 28, 2005
NATURE
Labor Law 1 A2010
This is a petition for review of the Resolution 1 the Court of Appeals reversing the
Resolution of the National Labor Relations Commission
FACTS
- Petitioner Coca-Cola Bottlers Phil., Inc. is a domestic corporation engaged in the
manufacture, sale and distribution of softdrinks.
- On July 1, 1982, the petitioner hired Florentino Ramirez as "driver-helper" with the
following duties: (a) as driver, he checks the truck’s oil, water, wheels, etc.; (b) as helper,
he is charged of loading and unloading truck’s load; putting bottles in the coolers and
displays company products to each outlet or customer’s store.2
- Ramirez became a member of the respondent Kapisanan ng Malayang Manggagawa
Sales Force Union, the bargaining representative of the rank- and-file employees of the
petitioner company. In 1996, he was the "shop steward" of the union at the company’s
Batangas Sales Office.
- Sometime in October 1996, it happened that the route salesman for Route M11 was
unavailable to make his usual routes. Since Ramirez had been driving for the route
salesman for so long, the petitioner company decided to assign him as temporary
replacement of the regular route salesman for routes M11, AMC and LPR.
- Thereafter, in a Letter dated December 5, 1996, the Officer-in-Charge of the Batangas
Sales Office, Victor C. dela Cruz, informed the Officer-in-Charge of DSS-District 44,
Rolando Manzanares, that a review of the copies of the invoices relating to the
transactions of Ramirez in Rt. M11 revealed the following discrepancies: (a) the number
of cases delivered to customers; (b) empty bottles retrieved from them, and (c) the
amounts in Sales Invoices Nos. 3212215, 3288587, 3288763, 3288765 and 3288764
- Ramirez received a Memorandum from District Office Nos. 44 and 45 requiring him to
report to the said office starting December 5, 1996 until such time that he would be
notified of the formal investigation of the charges against him.
- During the formal investigation conducted by a panel of investigators on December 20,
1996, Ramirez was not represented by counsel. He also manifested that he was waiving
his right to be represented by counsel when the members of the panel asked him about
it.
- Ramirez was then asked to explain the discrepancies subject of the charges
- On February 11, 1997, Ramirez received a notice from the company informing him that
his services were being terminated; his employment was terminated effective February
12, 1997.
- On March 17, 1997, Ramirez and the union filed a Complaint for unfair labor practice
and illegal dismissal against the company with the Arbitration Branch of the NLRC.
- Ramirez likewise claimed that he was denied of his right to due process, based on the
following grounds: Firstly, individual complainant was dismissed without having been
first issued a "notice of dismissal" which supposedly should contain the charges against
him, which would be made as basis for his termination. Secondly, individual complainant
was dismissed without affording him an ample opportunity to defend himself, as he was
not notified in advance of the subject of the administrative investigation. Thirdly,
individual complainant was terminated without just and valid cause, and in gross violation
of his right to due process. Lastly, individual complainant was terminated by respondents
in utter bad faith, as the decision on the said termination was arrived at, without any just
and valid cause. Simply put, respondents simply acted oppressively, malevolently, and
with grave abuse of prerogatives.7
- Petitioner company alleged that the dismissal of Ramirez was based on the facts
unearthed during the formal investigation, and that he was guilty of serious misconduct, a
valid ground for termination of employment. Even if he was occupying the position of
route driver/helper, he was nevertheless performing the functions and duties of a route
salesman, and, as such, he not only committed fraud, but also willfully breached the trust
and confidence reposed on him by the petitioner company.
- According to the petitioner company, considering the sanctions imposed on Ramirez
for prior breaches of company rules, his dismissal from employment was with basis. The
petitioner company also insisted that Ramirez was accorded his right to due process: he
was notified of the charges against him, was subjected to a formal investigation during
which he was allowed to explain the discrepancies, and was notified of the outcome
thereof, as well as the bases of the termination of his employment.
- On July 31, 1998, the Labor Arbiter rendered judgment dismissing the complaint for
lack of merit. The LA found that based on the evidence, there was a justifiable basis for
the dismissal of Ramirez. According to the LA, it was of no moment that the official
designation of Ramirez was "driver-helper," since he committed the infractions while he
was performing the functions of an "acting salesman." The LA further found that due
process had been complied with.9
- Ramirez appealed the decision to the NLRC
- On September 20, 1999, the NLRC rendered a Resolution affirming the decision of the
LA.
- Upon the denial of his motion for reconsideration, Ramirez filed a petition for certiorari
under Rule 65 of the Rules of Court with the Court of Appeals
- In a Decision dated October 25, 2000, the CA dismissed the petition. It ruled that the
petitioner’s designation at the time of the infraction was of no moment; when he agreed
to be an "acting salesman" for Route M11, AMC and LPR, he actually performed the
duties of a salesman, and in so doing, assumed the responsibilities of the position. The
- 209 - Disini
CA further ratiocinated that notwithstanding Ramirez’s lack of training, he had assumed
and performed the duties of a salesman; hence, he was obligated to do so with due care,
dedication, and with due regard to the exercise of the degree of diligence to prevent the
commission of any serious error, mistake or blunder on his part.
- The petitioner filed a motion for the reconsideration of the decision
- This time, the CA found merit in petitioner’s cause
ISSUE
WON respondent Florentino Ramirez was dismissed by the petitioner without just or valid
cause
HELD
- with just cause, but too severe penalty
- The respondent, by his acts and omissions, committed irregularities in the performance
of his duties. However the penalty imposed on respondent by the petitioner company
was too severe. In order to effect a valid dismissal of an employee, the law requires that
there be just and valid cause as provided in Article 282 and that the employee was
afforded an opportunity to be heard and to defend himself. Pursuant to Article 282 of the
Labor Code, an employee’s services can be terminated for the following just causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly-authorized representative.
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duty-authorized
representative; and
(e) Other causes analogous to the foregoing.
- In termination disputes, the burden of proof is always on the employer to prove that the
dismissal was for a just and valid cause. Considering the nature of the charges and the
penalties therefore, the petitioner is bound to adduce clear and convincing evidence to
prove the same.
- It is recognized that company policies and regulations, unless shown to be grossly
oppressive or contrary to law, are generally valid and binding on the parties and must be
complied with until finally revised or amended, unilaterally or preferably through
negotiation, by competent authority. The Court has upheld a company’s management
prerogatives so long as they are exercised in good faith for the advancement of the
employer’s interest and not for the purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements. For misconduct or improper
behavior to be a just cause for dismissal, the same must be related to the performance of
the employee’s duties and must show that he has become unfit to continue working for
the employer.
- In cases when an employer may dismiss an employee on the ground of willful
disobedience, there must be 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.
- That the individual petitioner has not been specifically trained as salesman is
undisputed. In acting as a salesman, he was tasked with a duty involving trust and
specialized skills for which he was never trained. His alleged failure to comply strictly with
all the procedures, of which he was unfamiliar, was to be expected. Yet Ramirez was
penalized as a full-fledge salesman, not as a driver-helper who was forced to perform the
functions of acting salesman or perhaps risk being charged with insubordination. Then it
was not just any penalty meted out to him, as if there is only one punishment possible for
him: the supreme sanction of dismissal.
- Perhaps, individual petitioner should first have been given a mere warning, then a
reprimand or even a suspension, but certainly not outright dismissal from employment.
One must keep in mind that a worker’s employment is property in the constitutional
sense, and he cannot be deprived thereof without due process and unless it was
commensurate to his acts and degree of moral depravity.
- In order to validly dismiss an employee on the ground of loss of trust and confidence
under Article 282 of the Labor Code of the Philippines, the following guidelines must be
followed:
1. The loss of confidence must not be simulated;
2. It should not be used as a subterfuge for causes which are illegal, improper or
unjustified;
3. It may not be arbitrarily asserted in the face of overwhelming evidence to the
contrary;
4. It must be genuine, not a mere afterthought, to justify earlier action taken in bad
faith; and
5. The employee involved holds a position of trust and confidence.
- Considering the factual backdrop in this case, we find and so rule that for his
infractions, the respondent should be meted a suspension of two (2) months.
Disposition PARTIALLY GRANTED
Labor Law 1 A2010
GENUINO ICE CO INC V MAGPANTAY
[PAGE 206]
PREMIERE DEV’T BANK V MANTAL
485 SCRA 234
YNARES-SANTIAGO; March 23, 2006
NATURE
Petition for review on certiorari seeking to annul and set aside the Decision of the Court
of Appeals in CA-G.R. SP No. 80975 dated January 17, 2005 and its Resolution dated
April 7, 2005 holding the petitioner Premiere Development Bank liable for illegal
suspension and illegal dismissal, ordering it to reinstate respondent Elsie Escudero
Mantal to her former position and to pay her full backwages from date of suspension and
dismissal until actual reinstatement, half month salary and half month 13th month pay, as
well as attorney’s fees.
FACTS
- Respondent is a regular employee of petitioner’s Cubao branch, serving as accounting
clerk since July 17, 1996. On November 24, 2000, the branch manager, Rosario Detalla,
instructed respondent: "Elsie, baka may mag-confirm sa Bank Guarantee ng GIA Fuel,
sabihin mo OKAY NA, may kulang pa lang dokumento ."
- Later that day, Emmie Crisostomo of Filpride Energy Corporation inquired whether GIA
Fuel and Lubricant Dealer has a credit line or maintains an account with petitioner Bank
which respondent confirmed after checking the files on the computer. Crisostomo also
inquired if the bank guarantee signed by Detalla is in order, and likewise respondent
replied in the affirmative. However, upon verification from petitioner’s head office,
Crisostomo was informed that the bank guarantee was spurious.
- On the same day, respondent was summoned to the head office and was required to
write down what she knew about the subject bank guarantee. Respondent also received
a memorandum placing her under preventive suspension effective immediately for a
period of 30 days. During the investigation, Detalla admitted issuing the falsified bank
guarantee.
- On December 21, 2000, Detalla tendered her irrevocable letter of resignation.
Respondent was asked to execute a resignation letter on December 22, 2000, but she
declined. The following day, respondent received a Notice of Termination dated
December 22, 2000.
- Respondent filed a complaint for illegal suspension, illegal dismissal, unpaid salary and
13th month pay, moral and exemplary damages. The Labor Arbiter rendered a decision
holding petitioner liable for illegal suspension and illegal dismissal and ordering the
reinstatement of respondent to her former position, with full backwages, half month
salary and half month 13th month pay, and attorney’s fees. NLRC reversed the labor
arbiter’s decision, and dismissed the complaint for lack of merit. The motion for
reconsideration having been denied, respondent appealed to the Court of Appeals which
affirmed the Labor Arbiter.
ISSUE
WON respondent was validly suspended and dismissed from her position as accounting
clerk
HELD
NO
Ratio Misconduct is improper or wrongful conduct. It is the transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment. Under Article 282
of the Labor Code, the misconduct, to be a just cause for termination, must be of such
grave and aggravated character, not merely of a trivial or unimportant nature. For serious
misconduct to warrant the dismissal of an employee, it (1) must be serious; (2) must
relate to the performance of the employee’s duty; and (3) must show that the employee
has become unfit to continue working for the employer.
Reasoning
- Respondent did what was expected of her as an employee of the bank. Before
answering the telephone inquiry, respondent verified the existence of the GIA Fuel and
Lubricant Dealer account through the bank computer. If ever she was negligent, it would
only constitute a single or isolated act which is not a just cause for the dismissal of the
respondent from her employment.
In addition, although respondent’s position as accounting clerk involves a high degree of
responsibility requiring trust and confidence, carrying with it the duty to observe proper
company procedures in the fulfillment of her job as it relates closely to the financial
interests of the company, the charge against her is not reasonably connected to her job
of opening of savings, current and/or time deposits and the payment of withdrawals. The
duty and ultimately, the responsibility of approving transactions relating to bank
guarantees lie with the branch manager and the management personnel of the
- 210 - Disini
petitioner’s head office. Thus, in Metropolitan Bank and Trust Company v. Barrientos, the
Court held that respondent therein was not liable of misconduct for allowing the opening
of fictitious accounts, because he was merely a cashier and had no authority to approve
new accounts and had no way of knowing the anomalous transactions.
Disposition petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No.
80975 dated January 17, 2005 finding petitioner guilty of illegal dismissal and ordering
the reinstatement of respondent to her former position, with full backwages, inclusive of
allowances and to the other benefits or their monetary equivalent from the time her
compensation was withheld up to her actual reinstatement, plus attorney’s fees, and the
Resolution dated April 7, 2005 denying the motion for reconsideration, are AFFIRMED.
MOLINA V PACIFIC PLANS INC
484 SCRA 498
CALLEJO; March 10, 2006
NATURE
Petitions for Review on Certiorari assailing the decision and resolution of the CA
reversing the decision of the NLRC.
FACTS
- The accident occurred on July 9, 1912.
- Because of injuries, plaintiff spent 10 days in the hospital. The first 4-5 days he couldn’t
leave his bed. After being discharged, he received medical attention from a private
practitioner for several days.
- Plaintiff testified that he had down no work since the accident, that his earning capacity
was P50/month
- He described himself as being well at the end of July; the trial took place September 19
- Plaintiff sold distillery products and had about 20 regular customers who purchased in
small quantities, necessitating regular, frequent deliveries
- It took him about 4 years to build up the business he had at the time of the accident,
and since the accident, he only kept 4 of his regular customers.
- The lower court refused to allow him any compensation for injury to his business due to
his enforced absence therefrom.
ISSUE
How to determine the amount of damages to award plaintiff
HELD
- The judgment of the lower court is set aside, and the plaintiff is awarded the following
damages; ten pesos for medical expenses; one hundred pesos for the two months of his
enforced absence from his business; and two hundred and fifty pesos for the damage
done to his business in the way of loss of profits, or a total of three hundred and sixty
pesos. No costs will be allowed in this instance.
Reasoning
- Actions for damages such as the case at bar are based upon article 1902 of the Civil
Code: "A person who, by act or omission, causes damage to another where there is fault
or negligence shall be obliged to repair the damage so done." Of this article, the supreme
court of Spain, in considering the indemnity imposed by it, said: "It is undisputed that said
reparation, to be efficacious and substantial, must rationally include the generic idea of
complete indemnity, such as is defined and explained in article 1106 of the said (Civil)
Code."
- Art 1106. Indemnity for losses and damages includes not only the amount of the loss
which may have been suffered, but also that of the profit which the creditor may have
failed to realize, reserving the provisions contained in the following articles.
- Art 1107. The losses and damages for which a debtor in good faith is liable, are those
foreseen or which may have been case is will gradually increase. The injury to plaintiff's
business begins where these profits leave off, and, as a corollary, there is where
defendant's liability begins. Upon this basis, we fix the damages to plaintiff's business at
P250.
- Before us is a Petition for Review on Certiorari assailing the Decision and Resolution of
the Court of Appeals (CA) in CA-G.R. SP No. 81298 reversing the Decision of the
National Labor Relations Commission (NLRC) in NLRC-NCR (South) Case No. 30-07-
03393-01.
Pacific Plans, Inc. (PPI) is a domestic corporation engaged in the business of selling pre-
need plans, such as educational, pension, and memorial plans. It maintains regional
offices throughout the Philippines. At the time material to this case, Metro Manila regional
offices were divided into two sales divisions - the South Sales Division and the North
Sales Division. Metro Manila VI was part of the North Sales Division. Among the
corporate officers of PPI were Geoffrey Martinez, Executive Vice-President for Finance;
Luciano Abia, Senior Assistant Vice-President, Metro Manila Marketing Division; and
Atty. Manuel Reyes, the Head of the Legal Department. Roy Padiernos then occupied
the position of Regional Manager of Metro Manila VI.
- PPI solicited subscribers and buyers of its pre-need plans through clusters of sales
associates. One of them was Ruth Padiernos, wife of Roy Padiernos.
Labor Law 1 A2010
Sometime in October 1994, PPI hired Agripino Molina as Regional Manager of Metro
Manila VI, replacing Roy Padiernos who was promoted as First Vice-President for
Marketing Operations. As Regional Manager, Molina performed both administrative and
marketing functions, whose duties and responsibilities included the following:
a. formulating and recommending short and long range marketing plans for the
Region and executing approved plans;
b. generating new and conserving existing pre-need plan businesses;
c. motivating, training, and developing a dedicated and effective counselor force;
d. conducting researches to determine sales potentials and share of the market,
pricing, and profitability of Company's products, competition and the directing of
product development for the Region;
e. hiring and terminating counselors, unit managers or group managers in accordance
with policies previously laid out;
f. recommending the creation of additional positions or termination of services of any
employee within the Region;
g. recommending promotions or changes in salaries of personnel within the Region
and lateral shifts of supervisor, their assistants, understudies of positions of equal
rank;
h. training and developing understudies for each position within the Region to provide
immediate replacement whenever vacated;
i. changing methods and procedures not affecting the other Regions, provided,
however, that radical changes should first be cleared with [the] superior;
j. controlling the operations of the Region and establishing a system of periodic work
reporting;
k. coordinating the Region’s activities with those of the other Regions;
l. keeping [the] superior informed of [the] Region's activities and specially of [the]
decision on matters for which he may be held responsible;
m. realizing the Company’s objective for service, growth, and profit;
n. establishing and maintaining harmonious and dignified relationship with plan
holders, counselors, employees, the public, government instrumentalities, other pre-
need plan companies; [and]
o. further enhancing the prestige of the Company and maintaining its position of
leadership in its field.
- Since Metro Manila VI was consistently on top in terms of nationwide sales and
productivity, Molina was promoted Assistant Vice-President with the same functions as
those of a regional manager of the same sales region.
- Caritas Health Shield, Inc. (Caritas for brevity), a health maintenance organization
(HMO) engaged in selling health and hospitalization plans, was established on
December 16, 1998. Geoffrey Martinez resigned as Executive Vice-President of PPI and
became the President and Chief Executive Officer of Caritas. Among the incorporators
and members of the Board of Directors were Luciano Abia and Atty. Manuel Reyes.
Molina was hired as Assistant Vice-President and Marketing Head of Area 10. His wife,
Fe Molina, was the head of a sales agency of Caritas.
- In the meantime, from February 2000, there was a considerable decrease in the sales
output production of PPI’s Metro Manila Region VI.
- On March 21, 2000, Molina received a Memorandum from PPI, through its Senior
Assistant Vice-President for Human Relations, Patricio A. Picazo, informing him that,
based on written reports, he committed the following: 1) recruiting and pirating activities
in favor of Caritas, in particular, initiating talks and enticing associates to join Caritas, and
a number of associates have already signed up; 2) he called for a meeting with his
associates sometime in November 1999, and solicited contributions from them for the bill
but later asked for reimbursement from the company; and 3) acts of misdemeanor on
several occasions, such as coming to the office under the influence of liquor, initiating a
smear campaign against PPI, and other acts inimical to the company’s interest. Molina
was also required to submit, on March 23, 2000, a written explanation why he should not
be held administratively liable for said acts which, it opined, might constitute conduct
unbecoming of an officer, conflict of interest, and breach of trust and confidence. Molina
was also informed that he was preventively suspended pending formal investigation
effective immediately until April 24, 2000.
- In a letter addressed to Picazo dated March 22, 2000, Molina categorically denied the
acts attributed to him. He, however, requested that he be furnished with copies of the
alleged written reports to enable him to prepare the required written explanation.
However, instead of acceding to the request of copies of the written reports, Picazo wrote
a letter dated April 3, 2000, citing the particulars of the charges against Molina, thus:
I. Conflict of Interest
1. Recruiting and pirating activities in favor of Caritas Health Shield, Inc.
* You have acted as conduit for Caritas in recruiting/pirating Mr. Restie Acosta on
March 04, 2000 and Ms. Eppie Acosta on March 06, 2000.
*Your failure to stop and/or tolerating your wife's activities in recruiting for Caritas
Ms. Lennie Gatmaitan who belongs to Ms. Celeste Villena, a PPI GA.
II. Misappropriation of Funds
1. Solicitation of associates' personal funds in the amount of P200.00 per person,
to which 12 persons contributed for a total P2,400.00, for payment of official
function during the meeting held at Barrio Fiesta last November 27, 1999. Amount
- 211 - Disini
solicited was subsequently reimbursed from the company but not returned to the
associates concerned.
III. Dereliction of Duties
1. You failed to prevent associates from leaving the company in favor of
competitors, thus causing demoralization among your sales associates.
2. You even encouraged associates to transfer to Caritas.
IV. Conduct unbecoming of a Company Officer
1. Often reporting to office under the influence of liquor.
2. Sowing intrigue in the case of Vilma del Rosario which almost caused her early
retirement from the company and transfer to Caritas.
3. Sowing intrigues between Mr. Roy Padiernos and Mr. Abia.
4. Showing disrespect to immediate superior, Mr. Roy Padiernos, by shouting at
him and walking out in one of the meetings called by him after the retirement of
Atty. Haceta.
- During the investigation the following day, April 4, 2000, Molina reiterated his request to
be provided with a copy of the written reports. Picazo denied the request in a
Memorandum dated April 6, 2000, and reiterated his order for Molina to submit his
written explanation on April 11, 2000, and to address his concerns during the
investigation scheduled on April 14, 2000. Molina failed to submit any written
explanation. On April 24, 2000, PPI issued a Memorandum advising Molina that he would
be reinstated in the payroll effective April 25, 2000 without requiring him to report for
work during the pendency of his investigation.
- Molina filed a "Motion to Dismiss Complaints and Motion for Full Reinstatement" on
May 2, 2000. He asserted that the charges should be dismissed since he was compelled
to prepare a written explanation on the basis of "summarized specific acts," denying him
the right to be informed of the exact charges and to confront those who made written
reports against him. As to the issue of reinstatement, he alleged that he should be
allowed to report for work, conformably with Rule XIV, Section 4 of the Implementing
Rules of the Labor Code.
- On May 11, 2000, Picazo wrote Molina that his motion to dismiss the charges would be
resolved after the investigation. He was warned that his non-appearance at the
investigation would be considered a waiver of his right to be heard.
- On the same day, May 11, 2000, Abia issued an inter-office Memorandum announcing
the appointment of Sercy F. Picache as the Officer-In-Charge (OIC) for Metro VI and XVI
effective May 6, 2000.
- Molina and his counsel attended the May 19, 2000 investigation and filed a Motion to
Suspend Proceedings, praying that the administrative investigation be deferred until the
resolution of the "prejudicial" issues raised in his previous motion.
- When Picazo failed to respond, Molina filed, on June 1, 2000, a complaint for damages
with a prayer for a temporary restraining order and preliminary injunction based on Article
19 of the New Civil Code. PPI filed a Motion to Dismiss, maintaining that the courts have
no jurisdiction over matters arising from employee-employer relationship. The trial court
denied the motion as well as PPI’s motion for reconsideration.
- Meanwhile, in letter dated June 13, 2000, Molina was notified of the termination of
administrative investigation. PPI considered his failure to submit a written explanation as
a waiver of his right to be heard, and as such, the investigating committee had evaluated
the evidence at hand and submitted its recommendations to the "higher management" for
decision. Also, it confirmed the denial of his Motion to Suspend Proceedings
- On June 23, 2000, the trial court issued an Order granting Molina's prayer for temporary
restraining order, which was later made permanent per its Order dated July 12, 2000.
The motion for reconsideration filed by PPI on July 26, 2000 was likewise denied.
Thereafter, it filed a petition for certiorari before the CA, assailing the writ of preliminary
injunction issued by the RTC and its order denying the motion to dismiss the complaint.
On July 16, 2001, the CA rendered judgment in favor of PPI and nullified the writ of
preliminary injunction issued by the RTC as well as the order denying the motion of PPI
for the dismissal of the complaint.
- On July 30, 2001, PPI resolved to dismiss Molina from employment on its finding that
the latter violated its standard operating procedure.
- Molina forthwith filed a complaint with the NLRC against PPI and Alfredo C. Antonio,
Patricio A. Picazo, and Certerio B. Uy, in their capacity as President, Senior Assistant
Vice-President of Human Resources Development, and Division Head, respectively, for
illegal dismissal and illegal suspension with claim for monetary benefits.
- In his Position Paper, Molina principally argued that he was denied the right to due
process due to the failure of PPI to furnish him a copy of the written reports of the sales
associates and co-employees, the basis of the accusations against him. Since an OIC for
his position was already appointed even before all his pending motions were resolved, he
surmised that there were really no such reports, and that the alleged accusations were
merely concocted in order to replace him with someone close to Picazo. Molina
maintained that since he was denied the opportunity to dispute the authenticity and
substantive contents of the reports, his alleged violations of company rules and policies
were hearsay and, therefore, lacked probative value. Besides, the termination of his
employment was made without the 30-day prior notice; his dismissal from employment
took effect immediately, only six days after PPI received the CA decision decreeing that
the NLRC has the rightful jurisdiction over the case. Thus, he prayed for the following
relief:
Labor Law 1 A2010
1. Total Money Claims
a) Salary with (overriding) commission from March 21 to April 24, 2000 -
suspended w/o pay - P45,000.00 (P25,000[.00] mo. salary & P20,000[.00]
[overriding])
b) Unpaid (overriding) commission from April 25, 2000 to present - P400,000[.00]
c) Unpaid salary from August 1, 2001 to present - P125,000[.00]
d) One mo. salary for every yr. of service in lieu of reinstatement - 7 years =
P175,000.00
2. Leave Credits - P100,000.00 for 7 years
3. Profit Bonus for Year 2000 & 2001 - P400,000.00
4. Moral Damages - P300,000.00
5. Exemplary Damages - P500,000.00
6. Actual Damages - for lifetime medical attendance and medicines at 16 more years
life expectancy - P1,249,384.00
7. Attorney's Fees - P300,000.00
8. Amount debited from complainant's ATM [as partial payment for hospitalization
expenses incurred by him which PPI had advanced] - P12,000.00
9. Retention of complainant's car, as additional penalty for illegal dismissal.
- For its part, PPI stressed that Caritas was its competitor in the pre-need plans business,
and that Molina and his wife recruited and enticed some of the sales associates of PPI to
work for Caritas, in violation of its policy against conflict of interest. Some of these sales
associates were the spouses Eppie and Restie Acosta, Lenita Gatmaitan, Lolita Casaje,
Lydia Magalso, Lydia San Miguel, and Alice Halili, and including Vilma del Rosario, the
secretary of Roy Padiernos. PPI, likewise, averred that Molina had the habit of coming to
the office under the influence of liquor; he constantly shouted to lady employees and
solicited money from his sales associates in connection with an official company function
without returning the same after PPI reimbursed him for the expenses incurred;
disseminated intrigues and created divisiveness among the employees and PPI’s senior
officers; and disrespected Padiernos, his superior, by shouting at him during one of the
meetings with other senior officers, and walked out of the meeting afterwards. Supporting
its claims that Molina committed breach of trust, serious misconduct, fraud, and gross
neglect of duty by reason thereof, PPI appended to its position paper the
statements/affidavits of Marivic Uy, Ruth and Roy Padiernos, Eppie and Restie Acosta,
Celeste Villena, and Vilma del Rosario.
- On the claim of Molina that he was denied due process, PPI averred that he was given
sufficient opportunity to present his personal submissions before finally issuing the notice
of dismissal but Molina persistently refused to submit his explanation. PPI further argued
that he was not entitled to the payment of 13th and 14th month salaries, overriding
commission, profit bonus, actual, moral or exemplary damages, and attorney’s fees. PPI
maintained that, under Article 217(a) of the Labor Code, as amended, and the ruling of
this Court in Bañez v. Valdevilla, Molina should be held liable for P1,000,000 as moral
damages and an amount not less than P428,400.00 for the salary he received during the
time when the restraining order/ writ of injunction was erroneously enforced.
- In his Reply, Molina averred that the affidavits submitted by PPI were antedated since
he was never furnished copies of said reports/affidavits despite demands. PPI even
failed to present the reports/affidavits before the RTC where his complaint for damages
against PPI and its officers was pending. He and Roy Padiernos had been at odds
because the latter appointed his brother and wife as agency manager and group
manager of PPI to which he objected. Molina averred that the P200.00 collected from
each of the employees of PPI during their luncheon meeting was a voluntary contribution,
and that they spent P4,000.00, more than the amount collected from the employees. He
contended that he had no motive to recruit sales associates or employees of PPI to be
employed by Caritas because the depletion of sales associates would diminish his
effectiveness as an area manager, including his overriding commission, profit bonus and
fringe benefits. He admitted that he may have raised his voice in the heat of arguing a
point during meetings, but averred that it should not be considered as disrespect or
misdemeanor.
- Molina further emphasized that Caritas was not a competitor of PPI, as the former was
engaged in selling health care and is supervised by the Department of Health (DOH),
while the latter is into the business of selling pre-need plans and supervised by the
Securities and Exchange Commission (SEC). Finally, he averred that the so-called
"associates" of PPI were not actually employees but "independent journeymen" who
derived income on commission basis, free to engage in any kind of selling activities not in
direct competition with PPI.
- Molina admitted having had drinking sessions with Certerio Uy, Ilustre Acosta and
Reynaldo Villena, who provided the hard liquor and pulutan, but only after office hours.
He claimed that his officemates mistook him for being drunk when he went to his office
even after office hours because of his "mestizo complexion."
- In its response, PPI averred that, based on the sales data, the acts of Molina caused
demoralization of the sales associates, resulting in a sudden decrease of the region's
output from P343,009,643.00 in 1998 to P263,099,773.00 in 1999, and P228,752,090.00
in 2000. PPI insisted that he should be held liable for not less than P507,348.00,
P2,000,000, and P1,000,000 as actual, moral and exemplary damages, and attorney's
fees, respectively, and P273,600.00 which was the balance on his car plan agreement
with PPI.
- 212 - Disini
- In his Rejoinder and Sur-Rejoinder Molina submitted the affidavit of Geoffrey Martinez,
who belied the reports of Uy, Villena, Del Rosario, and the spouses Padiernos and
Acosta. He also appended the affidavits of Natividad Gatchalian, San Miguel, Gatmaitan,
and Magalso, who all disputed, in one way or another, Molina's alleged violations. To
counter the imputations of conflict of interest, Molina also alleged that Abia and Atty.
Reyes were incorporators of Caritas, and that Villena had in her possession a license to
sell Caritas products. With regard to the declining sales output of his region, Molina
attributed the same to the Asian regional crisis that hit the Philippines sometime in 1997.
He noted, however, that the same records revealed that despite the financial bane, Metro
VI still managed to be on top from 1998 up to 2000 in terms of its sales relative to the
other regions.
- Molina denied any liability for the car plan, claiming that he already settled the
obligation when PPI demanded full payment as, in fact, all the papers related thereto,
including the Release of Mortgage, were already in his possession.
- In its Sur-Rejoinder, PPI stressed its claim that Caritas was a business competitor, as
may be inferred from the benefits available under its health care agreement and the pre-
need contract of PPI. Particularly with regard to the pension plan contract, it noted the
following similarities: (a) Caritas also provides Term Life Insurance, Accidental Death
Insurance, Credit Life Insurance, and Waiver of Installment Due to Disability; (b) there
are similarities in the provisions on contract price, grace period, cancellation,
reinstatement, and transfer and termination; and (c) unlike other health care programs
that provide a one-year coverage, renewable every year thereafter, Caritas offers a
continuous five year coverage and sells the same in units payable in five-year installment
basis, with maturity period and guaranteed return of investment in the form of Full-Term
Medical Expense Fund computed at P10,000.00 for every unit purchased with increment
of 10% yearly after the maturity period, which may be withdrawn in cash by its member. It
stressed that this was similar to the pension program offered by PPI which was also sold
in per unit basis, payable by installment in certain number of years or lump sum payment,
and upon maturity also gives P10,000.00 pension benefit per unit purchased by the plan
holder. With respect to the alleged interest of Atty. Reyes with Caritas, PPI adduced in
evidence a Deed of Sale to prove that as early as February 1999 he had already
divested his stockholdings in Caritas.
- On November 18, 2002, Labor Arbiter Roma C. Asinas rendered a Decision dismissing
the complaint and the counterclaims for lack of merit. The labor arbiter ruled that Molina
was lawfully dismissed from his employment for serious misconduct in office and fraud or
willful breach of trust and confidence. It declared that Molina’s mere denial of the charges
against him did not overthrow the overwhelming evidence against him tending to show
that he committed the allegations against him. Moreover, his wife was then an agency
manager of Caritas, and some PPI sales associates were with Caritas because they
were recruited by Molina. The labor arbiter also ruled that other employees of respondent
attested to the fact that they were being recruited and enticed by the complainant to join
Caritas. This act of pirating constituted serious misconduct in office, fraud or willful
breach of trust and confidence, which are just causes for termination of employment
under Article 282 of the Labor Code, as amended. As such, PPI could not legally be
compelled to continue Molina’s employment due to breach of trust.
- The labor arbiter likewise held that Molina was afforded his right to due process, but
that he refused to give an answer to the charges leveled against him, and instead
insisted that he be furnished a copy of the alleged reports against him. Since he was
given ample opportunity to answer the charges and explain his side during the
investigation, and a formal or trial-type hearing is not at all times essential, Molina’s right
to due process was not violated. The labor arbiter stressed that the requirements of due
process are satisfied where the parties are afforded fair and reasonable opportunity to
explain their side of the controversy at hand.
- Molina appealed the decision to the NLRC, which rendered judgment in his favor. The
NLRC reversed the decision of the Labor Arbiter and ordered Molina’s immediate
reinstatement to his former position as Assistant Vice President without demotion in rank
and salary; and the payment of his backwages from August 1, 2001 up to his actual
reinstatement, and other accrued monetary benefits. However, the NLRC denied all other
claims for damages.
- According to the NLRC, the charges of coming to the office under the influence of liquor
and making PPI reimburse the expenses already paid by Molina's co-employees were
not supported by the records. The "loss of trust and confidence" had no factual basis
since the alleged acts of Molina did not result to any loss in favor of PPI.
- Anent Molina’s recruitment activities, the NLRC ratiocinated that PPI failed to show that
Caritas was a competitor of PPI. Caritas caters to the health care needs of its clients
while PPI to the pre-need (pension, educational, and memorial) requirements of its plan
holders. Any similarity between PPI and Caritas’ extra features like term life insurance,
accidental death insurance, credit life insurance, and waiver of installment due to
disability, did not ipso facto make Caritas a competitor of PPI. Thus, there was no conflict
of interest in Molina’s act of trying to recruit counselors for Caritas to help his wife.
Moreover, PPI failed to establish that recruiting for Caritas affected Molina’s decisions in
the performance of his duties with PPI. According to the NLRC, the drop in the sales and
productivity of complainant’s area of responsibility may be due to market forces and
depressed economic condition at that time; absent any clear and convincing proof, it
Labor Law 1 A2010
cannot be attributed to the alleged acts of Molina which constituted willful breach of trust
or confidence.
- PPI filed a motion for reconsideration, and appended a Letter dated June 13, 2002 from
the SEC to Caritas, indicating that its HMO Plan was similar to the previous plans offered
by pre-need companies, hence, under the regulatory suspension of the SEC; another
letter of SEC ordering Caritas to immediately desist from selling its HMO plan with the full
term medial expense fund; and the letter of Caritas, through counsel, endorsing the
objectionable features of the HMO plan.
- The NLRC, however, was not persuaded, and resolved to deny PPI’s motion in its
Order dated September 30, 2003. On November 19, 2003, the NLRC declared its
Decision final and executory as of November 14, 2003.
- PPI filed a Petition for Certiorari with the CA for the nullification of the decision and
resolution of the NLRC and the reinstatement of the decision of the Labor Arbiter.
- On August 13, 2004, the CA rendered a decision reversing the Decision and Resolution
of the NLRC, and reinstating the November 18, 2002 Decision of the Labor Arbiter. Later,
the CA denied Molina’s Motion for Reconsideration in its Resolution dated September 27,
2004.
- The issues for resolution are the following: whether the decision of the NLRC was
already final and executory when PPI filed its petition for certiorari in the CA; and whether
the NLRC committed grave abuse of discretion amounting to excess or lack of
jurisdiction in issuing the assailed decision and resolution.
- On the first issue, we find and so hold that the decision of the NLRC had become final
and executory when PPI filed its Petition for Certiorari in the CA. PPI received a copy of
the NLRC Decision on July 11, 2003 and filed the Motion for Reconsideration thereof on
July 18, 2003, which motion was denied on September 30, 2003. Under Rule VII, Section
2 of the NLRC Omnibus Rules of Procedure, the decision of the NLRC becomes final
and executory after ten (10) calendar days from receipt of the same. PPI received a copy
of the NLRC decision on November 30, 2003; hence, such decision became final and
executory on December 3, 2003. Nonetheless, the Court ruled in St. Martin Funeral
Home v. NLRC that, although the 10-day period for finality of the NLRC decision may
have elapsed as contemplated in the last paragraph of Section 223 of the Labor Code,
the CA may still take cognizance of and resolve a petition for certiorari for the nullification
of the decision of the NLRC on jurisdictional and due process considerations. Indeed, the
remedy of the aggrieved party from an adverse decision of the NLRC is to timely file a
motion for reconsideration as a precondition for any further or subsequent remedy, and if
the motion is denied, such party may file a special civil action in accordance with law and
jurisprudence considering that these matters are inseparable in resolving the main issue
of whether the NLRC committed grave abuse of discretion.
- The Labor Arbiter and the NLRC act in quasi-judicial capacity in resolving cases after
hearing and on appeal, respectively. On the presumption that they have already acquired
expertise in their jurisdiction, which is confined on specific matters, their findings of facts
are oftentimes accorded not only with respect but even finality if supported by substantial
evidence. However, in spite of the statutory provision making "final" the decision of the
NLRC, the Court has taken cognizance of petitions challenging such decision where
there is a clear showing that there is want of jurisdiction, grave abuse of discretion,
violation of due process, denial of substantial justice, or erroneous interpretation of law.
- In this case, the Labor Arbiter declared that there is substantial evidence on record
warranting the dismissal of petitioner as Assistant Vice President for serious misconduct
in office, fraud or willful breach of trust and confidence. The NLRC disagreed with the
Labor Arbiter and reversed the latter’s findings. The CA, for its part, concurred with the
findings of the Labor Arbiter. In view of the discordance between the findings of the Labor
Arbiter and the CA on one hand, and the NLRC on the other, there is a need for the
Court to review the factual findings and the conclusions based on the said findings. As
this Court held in Diamond Motors Corporation v. Court of Appeals:
- A disharmony between the factual findings of the Labor Arbiter and the National Labor
Relations Commission opens the door to a review thereof by this Court. Factual findings
of administrative agencies are not infallible and will be set aside when they fail the test of
arbitrariness. Moreover, when the findings of the National Labor Relations Commission
contradict those of the labor arbiter, this Court, in the exercise of its equity jurisdiction,
may look into the records of the case and reexamine the questioned findings
- Article 282 of the Labor Code of the Philippines provides:
Art. 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;
b. Gross and habitual neglect by the employee of his duties;
c. Fraud or willful breach by the employee of his duties of the trust reposed in him by
his employer or duly authorized representative;
d. Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representative; and
e. Other causes analogous to the foregoing.
- Misconduct has been defined as improper or wrong conduct; the transgression of some
established and definite rule of action; a forbidden act, a dereliction of duty, unlawful in
character and implies wrongful intent and not mere error of judgment. The misconduct to
- 213 - Disini
be serious must be of such grave and aggravated character and not merely trivial and
unimportant. Such misconduct, however, serious, must nevertheless, be in connection
with the employee’s work to constitute just cause for his separation.
- The loss of trust and confidence, in turn, must be based on the willful breach of the trust
reposed in the employee by his employer. Ordinary breach will not suffice. A breach of
trust is willful if it is done intentionally, knowingly and purposely without justifiable excuse,
as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.
The Court has laid down the guidelines for the application of the doctrine for loss of
confidence, thus:
1. the loss of confidence must not be simulated;
2. it should not be used as a subterfuge for causes which are illegal, improper or
unjustified;
3. it may not be arbitrarily asserted in the face of overwhelming evidence to the
contrary;
4. it must be genuine, not a mere afterthought, to justify earlier action taken in bad
faith; and
5. the employee involved holds a position of trust and confidence.
In Samson v. Court of Appeals, the Court enumerated the conditions for one to be
considered a managerial employee:
(1) Their primary duty consists of the management of the establishment in which they
are employed or of a department or subdivision thereof;
(2) They customarily and regularly direct the work of two or more employees therein;
(3) They have the authority to hire or fire other employees of lower rank; or their
suggestions and recommendations as to the hiring and firing and as to the promotion
or any other change of status of other employees are given particular weight.
- As a general rule, employers are allowed wide latitude of discretion in terminating the
employment of managerial personnel. The mere existence of a basis for believing that
such employee has breached the trust and confidence of his employer would suffice for
his dismissal.
- In this case, petitioner was not a mere employee of respondent. He was the Assistant
Vice-President with the same functions of a regional manager of the same sales region,
Metro Manila VI. Taking into account his job description, he was one of the top managers
of the respondent, tasked to perform key and sensitive functions in the interest of his
employer and, thus, bound by the more exacting work ethic.
- We find, however, that the charge of misappropriation of funds was not proven with
substantial evidence. As gleaned from the handwritten statement of Ilustre Acosta, the
General Manager of the Springs and Blessings General Agency under Metro Manila VI, it
appears that, aside from him and petitioner, there were 10 other attendees during the
luncheon conference on November 27, 1999 at the Barrio Fiesta, Cubao, Quezon City.
Petitioner received the amount of only P2,386.00 from respondent to pay for the cost of
the luncheon for the conference, based on Petty Cash Voucher signed by petitioner, 74 but
the conferees spent more than P4,000.00. Upon petitioner’s suggestion, the conferees
agreed to contribute P200.00 each, or the total amount of P2000.00 to answer for the
difference. Petitioner had no obligation to return the contributions of the conferees, nor
was he liable for said amount. Significantly, except for Ilustre Acosta, the other attendees
in the conference never complained against petitioner or requested him to return their
respective contributions of P200.00.
- Regarding the charge that the petitioner peddled false and malicious informations
against Abia and Padiernos, Abia has not executed any affidavit to confirm paragraph 9
of the affidavit of Roy Padiernos. As admitted by del Rosario, the informations allegedly
relayed to her by the petitioner pertaining to Roy Padiernos were confirmed by Zita
Domingo.
- The petitioner does not deny having had a heated exchange of words with Roy
Padiernos in the course of a meeting. However, such incident does not constitute proof
that the petitioner thereby showed disrespect to Roy Padiernos, nor a valid cause for
petitioner’s dismissal. It does happen that in the course of exchange of views during a
meeting, participants may become so assertive to the point of being overbearing or
unyielding and in the process lose their temper, on their sincere belief of being right.
There is no evidence on record that petitioner committed the same or similar acts
thereafter.
- To prove its charge of conduct unbecoming of a company officer, more specifically of
drinking alcoholic beverages within the premises of the company during office hours or
going to work drunk, respondent relied on the statement/affidavit of Celeste Villena, the
Agency Manager of the Wondrous and Miraculous General Agency under Metro Manila
VI; and Marivic Uy, the General Manager of the D’MBP General Agency under Metro
Manila VI. Both claimed that they always saw petitioner drunk during office hours, most
especially during cut-offs when many sales counselors were present. Petitioner admitted
having had drinking sessions with Certerio Uy, the husband of Marivic Uy, Ilustre Acosta
and Reynaldo Villena, the husband of Celeste Villena, and who, according to petitioner,
provided the hard liquor and the pulutan. He, however, denied reporting to office drunk
and insisted that he reported for work sober.
- We are inclined to give credence to petitioner’s claim, noting that in her handwritten
letter-report to Norman Gonzales dated March 10, 2000, Villena made no mention of the
petitioner going to office drunk. It was only in her affidavit dated January 16, 2002 that
Villena made such declaration. Villena did not explain her failure to report the matter to
Labor Law 1 A2010
Gonzales on March 10, 2000, and why she made the charge for the first time in her
Affidavit dated January 16, 2002. Uy is the wife of no less than Certerio Uy, the Senior
Vice-President of the Manila North Sales Division of respondent. If petitioner’s "drinking
problem" had any ring of truth, she should have immediately reported the matter to her
husband or to other officials concerned. Uy’s unexplained silence until March 10, 2000
thus renders her report implausible.
- Respondent avers that petitioner served directly as agent of Caritas, a business
competitor of the respondent, when he connived with his wife in recruiting Sales
Associates of the Metro Sales Division VI to transfer to Caritas as sales associates.
Respondent claims that, by his acts, petitioner failed to dedicate his full time on the job
with respondent and prevented said sales associates from doing the same. Aside from
violating its policy against conflict of interest, petitioner’s acts adversely affected his
decisions in the performance of his duties and obligations to respondent.
- Loyalty of an employee to his employer consists of certain very basic and common
sense obligations. An employee must not, while employed, act contrary to the employer’s
interest. The scope of the duty of loyalty that an employee owes to his employer may
vary with the nature of their relationship. Employees occupying a position of trust and
confidence owe a higher duty than those performing low-level tasks. Assisting an
employee’s competitor can even constitute a breach of the employee’s duty of loyalty. An
employee’s self-dealing may breach that duty. However, it has been ruled that
- A reality of contemporary life is that many families will consist of two wage earners, one
wage earner with two jobs, or both. For some employees, particularly those earning low
or modest incomes, second sources of income are an economic necessity. For them, a
second job or "moonlighting" is the only way to make ends meet. Conversely, employers
need the assurance that employees will not disserve them by furthering their own
interests or those of competitors at the employers’ expense.
- A slight assistance to a direct competitor could constitute a breach of the employee’s
duty of loyalty. However, when competition is indirect or minimal, the employer may be
required to show that the employee received substantial assistance from the competitor.
If an employee usurped a corporate opportunity or secretly profited from a competitive
activity, the employer may receive the value of the lost opportunity or the secret profit.
- An employee’s skill, aptitude, and other subjective knowledge obtained in the course of
employment are not the property of his employer. However, an employee occupying a
managerial position or office is obliged to protect the trade secret of his employer
consisting of formula, process, device or compilation which it uses in its business and
gives it an opportunity to obtain an advantage over competitors who do not know of such
trade secret. However, the rule does not apply to a matter of public knowledge or of
general knowledge within the industry. Moreover, an employer has a protectible interest
in the customer relationships of its former employee established and/or nurtured while
employed by the employer, and is entitled to protect itself from the risk that a former
employee might appropriate customers by taking unfair advantage of the contract
developed while working for the employer. While acting as an agent of his employer, an
employee owes the duty of fidelity and loyalty. Being a fiduciary, he cannot act
inconsistently with his agency or trust. He cannot solicit his employer’s customers or co-
employees for himself or for a business competitor of his employer. If such employee or
officer connives with and induces another to betray his employer in favor of a business
competitor of his employer, he is held accountable for his mischief.
- In this case, we are not persuaded that Caritas is the business competitor of
respondent. The evidence on record shows that while Abia, the Senior Vice-President of
respondent’s Metro Manila Marketing, is one of the incorporators of Caritas and is even a
member of the Board of Directors, respondent did not dismiss him from employment. The
Head of the Legal Division of the respondent, Atty. Reyes, was also an incorporator of
Caritas and a member of its Board of Directors, and although he appears to have sold his
shares to Herminigildo C. Belen for P127,312.34, he only did so on March 7, 1999. There
is no evidence on record whether the transfer of such shares of stocks has already been
reflected in the books of Caritas. Celeste Villena, one of the Sales Associates of
respondent, is herself licensed by Caritas to sell plans for the latter. Villena has likewise
not been prohibited from selling pre-need plans for Caritas. Fe Molina, who is the head of
a sales agency of Caritas, is also a sales agency head of respondent. Petitioner, his wife,
and Villena were not charged nor meted any sanction by the respondent for conflict of
interest. Petitioner was the Assistant Vice-President, Marketing Head, Area 10, of
Caritas, and for a while, without any protest from respondent. If Caritas is a business
competitor of the respondent, it should have meted sanctions not only on petitioner but
also on Abia, Reyes, Fe Molina and Villena as well.
- The truth of the matter is that, as averred by Caritas President Geoffrey Martinez,
Caritas is engaged in health care and hospitalization package, whereas respondent sells
educational, pension, and pre-need plans. Caritas is an HMO and is directly supervised
by the DOH, while respondent is under the supervision of the SEC. The so-called sales
associates of the respondent are non-salaried employees and are paid on commission
basis only. Their commissions are based on their individual initiative and industry. That
the contracts executed by the beneficiaries of both corporations have similar provisions
regarding contract price, grace period, cancellation, reinstatement, transfer and
termination, do not constitute proof that Caritas and respondent are business
competitors. There is also no proof that the two corporations compete with each other in
- 214 - Disini
the same or similar business; in fact, the business of Caritas and that of the respondent
complement each other.
- Respondent relied on the declarations of Ruth Padiernos, Spouses Eppie and Ilustre
Acosta, Celeste Villena, and Marivic Uy to prove its charge that Fe Molina pirated sales
associates working for respondent and that petitioner tolerated the actuations of his wife
and even connived with her.
- The Court finds, however, that the evidence adduced by respondent insufficient to
warrant the petitioner’s dismissal from employment.
- Ruth Padiernos, wife of Roy Padiernos, averred in her written statement dated March 8,
2000, that as far back as July 1999, she had a conference with her husband and Abia
where she reported that petitioner connived with his wife in pirating sales associates. She
was assured that something would be done to arrest the problem. 90 However, Ruth
Padiernos failed to name any such sales associate who was recruited by Fe Molina.
There is likewise no evidence that Abia ever confronted petitioner relative to the charge.
Roy Padiernos confronted petitioner, but the latter denied the charge. Since then, no
further action was taken against the petitioner by respondent, until the letter of Picazo
dated March 21, 2000 was sent to him. Roy Padiernos did not explain why he executed
his affidavit regarding the matter almost three years later, only on January 18, 2002. In
an Affidavit dated January 18, 2002, it was made to appear that Ruth Padiernos claimed
that petitioner’s wife, the Unit Manager of the Ark Group under Metro Manila Sales Group
VI and also an Agency Manager of Caritas, recruited sales associates under respondent
to work for Caritas, and that petitioner did the same; and that she (Padiernos) learned
that almost all the productive Sales Associates in Metro Manila VI were already
connected with Caritas, using "different names." Although notarized, the affidavit has no
probative weight because it was unsigned.
- Celeste Villena, for her part, declared in her handwritten statement dated March 10,
2000 that Fe Molina recruited Lenie Gatmaitan to join Caritas and that she confronted
petitioner.92 In her Affidavit dated January 16, 2002, she alleged that petitioner and his
wife, Fe Molina, recruited Gatmaitan to join Caritas. However, the signature of the notary
public does not appear in said affidavit. For his part, Ilustre Acosta, averred in his
handwritten statement dated March 11, 2000, that on March 4, 2000, petitioner informed
him that Geoffrey Martinez called petitioner to inquire if petitioner would have no
objection for him (Ilustre) to be with Caritas and that petitioner replied that he had no
objection if that was Ilustre’s decision. Ilustre maintained this claim in his Affidavit dated
January 16, 2002. Eppie Acosta, the wife of Ilustre Acosta, averred in her handwritten
statement of March 12, 2000, that on March 6, 2000, petitioner commented about their
low sales production, and she retorted that he was the cause, hence, may have grudges
against him. Petitioner replied that he and his wife did not interfere with each other’s
business dealings, and that petitioner even declared "Mare, for all you know, ikaw na
lang ang hindi nag-ca-Caritas." She reiterated her claim in her affidavit dated January 16,
2000. Marivic Uy averred that the wife of petitioner had been pirating sales associates of
respondent since 1999 to join Caritas and that she tried to recruit Morena Siasoco, one
of the Group Managers. Petitioner failed to stop his wife, but rather tolerated her
actuations. She reiterated her claim in her Affidavit dated January 16, 2002
- However, there is no evidence on record to prove that respondent expressly prohibited
its Sales Associates from selling for Caritas. Neither is there evidence on record to prove
that Caritas prohibited its sales associates from selling pre-need plans of respondent.
- Respondent likewise failed to present the affidavits of Siasoco, Casaje, Magalso, San
Miguel and Halili. In contrast to the evidence of respondent, Gatchalian, San Miguel,
Siasoco, and Gatmaitan executed their respective affidavits declaring that neither
petitioner nor his wife ever recruited them.99 They admitted that they sold plans for
Caritas, but without any prodding from petitioner and his wife. Geoffrey Martinez
declared, in his affidavit, that Siasoco, San Miguel, Casaje, Magalso, and Halili joined
Caritas voluntarily and individually, through him, and he was not aware that petitioner
and his wife recommended them to Caritas. Lenita Gatmaitan called him and inquired if
she could join Caritas, and he replied in the affirmative. He never called petitioner
concerning Ilustre Acosta; on the contrary, it was the latter who called to inquire if he was
entitled to a discount if he purchased a Caritas health plan. He talked to Vilma Del
Rosario and convinced her to apply as Branch Manager of Caritas, which she did, but
backed out later on.
Disposition IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby
GRANTED. The August 13, 2004 Decision and September 27, 2004 Resolution of the
Court of Appeals are REVERSED AND SET ASIDE. The decision and resolution of the
NLRC are reinstated.
WILLFUL DISOBEDIENCE
MICRO SALES OPERATION NETWORK V NLRC
472 SCRA 328
QUISUMBING; October 11, 2005
NATURE
Labor Law 1 A2010
For review on certiorari of the Resolutions the CA dismissing petitioners’ special civil
action for certiorari against the NLRC Resolution, which affirmed the Labor Arbiter’s
Decision finding petitioners herein liable for illegal dismissal.
FACTS
- Micro Sales Operation Network is a domestic corporation engaged in local
transportation of goods by land. Petitioner Willy Bendol was the company’s operations
manager at the time of the controversy.
- Private respondents Larry Hermosa, Leonardo de Castro, and Ramil Basinillo were
employed by the company as driver, warehouseman, and helper, respectively. Hermosa
was hired on November 17, 1997, de Castro on February 1, 1996, and Basinillo on
February 4, 1998.
- Hermosa failed to promptly surrender the ignition key of the company’s vehicle after
discharging his duties. Such failure was allegedly contrary to the company’s standard
operating procedure. Thus, he was asked to explain within 24 hours why disciplinary
action should not be meted on him. He explained that he kept the ignition key because
the vehicle was stalled when its battery broke down. Unsatisfied with Hermosa’s
explanation, the company dismissed him on January 9, 1999.
- LA found that private respondents were illegally dismissed. NLRC affirmed the Labor
Arbiter’s decision. It also denied petitioners’ motion for reconsideration.
CA dismissed the petition for being defective in form.
ISSUES
1. WON the private respondents were unjustly dismissed
2. WON there was willful disobedience on the part of the private respondents, justifying
their dismissal
HELD
1. YES
- Hermosa was unjustly dismissed
2. NO
- For willful disobedience to be a valid cause for dismissal, the following twin 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.
- Both elements are lacking. We find no hint of perverse attitude in Hermosa’s written
explanation. On the contrary, it appears that the alleged company procedure for leaving
the ignition key of the company’s vehicles within office premises was not even made
known to him. Petitioners failed to prove Hermosa willfully disobeyed the said company
procedure. At any rate, dismissal was too harsh a penalty for the omission imputed to
him.
Disposition NLRC Resolution affirming the Labor Arbiter’s Decision, finding petitioners
liable for illegal dismissal, is AFFIRMED.
BASCON V CA (METRO CEBU COMMUNITY
HOSPITAL)
422 SCRA 122
QUISUMBING; February 5, 2004
FACTS
- ELIZABETH BASCON and NOEMI COLE, petitioners, were employees of Metro Cebu
Community Hospital, Inc. (MCCH) and members of the Nagkahiusang Mamumuo sa
Metro Cebu Community Hospital (NAMA-MCCH), a labor union of MCCH employees.
Bascon had been employed as a nurse by MCCH since May 1984. At the time of her
termination from employment in April 1996, she already held the position of Head Nurse.
Cole had been working as a nursing aide with MCCH since August 1974. Both were
dismissed for allegedly participating in an illegal strike.
- The controversy arose from an intra-union conflict between the NAMA-MCCH and the
National Labor Federation (NFL), the mother federation of NAMA-MCCH. In November
1995, NAMA-MCCH asked MCCH to renew their CBA, which was set to expire on
December 31, 1995. NFL, however, opposed this move. Mindful of the apparent intra-
union dispute, MCCH decided to defer the CBA negotiations until there was a
determination as to which union had the right to negotiate a new CBA. Believing that their
union was the certified CBA agent, NAMA-MCCH staged a series of mass actions inside
MCCH’s premises starting February 27, 1996. The DOLE in Region 7 issued two
certifications stating that NAMA-MCCH was not a registered labor organization. This
finding, however, did not deter NAMA-MCCH from filing a notice of strike with the Region
7 Office of the National Conciliation and Mediation Board (NCMB). Said notice was,
however, disregarded by the NCMB for want of legal personality of the union.
- MCCH notified the petitioners that they were to be investigated for their activities in the
mass actions. Petitioners, however, denied receiving said notices. In a notice dated April
8, 1996, MCCH ordered petitioners to desist from participating in the mass actions
- 215 - Disini
conducted in the hospital premises with a warning that non-compliance would result in
the imposition of disciplinary measures. Petitioners again claimed they did not receive
said order. Bascon and Cole were then served notices terminating their employment
effective April 12, 1996 and April 19, 1996, respectively.
- The Labor Arbiter found the termination to be valid and legal. The Labor Arbiter held
that petitioners were justly dismissed because they actually participated in the illegal
mass action. It also concluded that petitioners received the notices of hearing, but
deliberately refused to attend the scheduled investigation.
- The NLRC reversed the ruling and ordered the reinstatement of petitioners with full
back wages. First, it found that petitioners merely wore armbands for union identity, per
instruction of their union officials. Said wearing of armbands while nursing patients, is a
constitutional right, which cannot be curtailed if peacefully carried out. Second, it ruled
that the placards complained of by MCCH did not contain scurrilous, indecent or libelous
remarks. Finally, it concluded that, in a belated but crude attempt to camouflage the
illegal dismissal of petitioners, MCCH merely fabricated the notices allegedly sent to
petitioners. On the charge of gross insubordination, it ruled that petitioners were not
guilty, because the elements had not been sufficiently proven, to wit: (1) reasonableness
and lawfulness of the order or directive, (2) sufficiency of knowledge on the part of the
employee of such order, and (3) the connection of the order with the duties which the
employee had been engaged to discharge.
- MCCH filed a special civil action for certiorari before the CA. The CA granted the
petition but ordered payment of separation pay.
ISSUES
1. WON petitioners were validly terminated for allegedly participating in an illegal strike
2. WON petitioners were validly terminated for gross insubordination to the order to stop
wearing armbands and putting up [of] placards
HELD
1. NO
Ratio While a union officer can be terminated for mere participation in an illegal strike, an
ordinary striking employee must have participated in the commission of illegal acts during
the strike. There must be proof that they committed illegal acts during the strike. But
proof beyond reasonable doubt is not required. Substantial evidence, which may justify
the imposition of the penalty of dismissal, may suffice.
Reasoning
- Article 264 (a) of the Labor Code provides in part that:
Any union officer who knowingly participates in illegal strike and any worker or union
officer who knowingly participates in the commission of illegal acts during a strike may
be declared to have lost his employment status…
- The CA found that petitioners’ actual participation in the illegal strike was limited to
wearing armbands and putting up placards. There was no finding that the armbands or
the placards contained offensive words or symbols. Thus, neither such wearing of
armbands nor said putting up of placards can be construed as an illegal act. In fact, per
se, they are within the mantle of constitutional protection under freedom of speech.
Evidence shows that various illegal acts were committed by unidentified union members
in the course of the protracted mass action. And we commiserate with MCCH, patients,
and third parties for the damage they suffered. But we cannot hold petitioners
responsible for acts they did not commit. The law, obviously solicitous of the welfare of
the common worker, requires, before termination may be considered, that an ordinary
union member must have knowingly participated in the commission of illegal acts during
a strike.
2. NO
Ratio Willful disobedience of the employer’s lawful orders, as a just cause for dismissal of
an employee, envisages 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.
Reasoning
- Article 282 of the Labor Code provides in part:
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.
- We find lacking the element of willfulness characterized by a perverse mental attitude
on the part of petitioners in disobeying their employer’s order as to warrant the ultimate
penalty of dismissal. Wearing armbands and putting up placards to express one’s views
without violating the rights of third parties, are legal per se and even constitutionally
protected. Thus, MCCH could have done well to respect petitioners’ right to freedom of
speech instead of threatening them with disciplinary action and eventually terminating
them.
Labor Law 1 A2010
- Neither are we convinced that petitioners’ exercise of the right to freedom of speech
should be taken in conjunction with the illegal acts committed by other union members in
the course of the series of mass actions. It bears stressing that said illegal acts were
committed by other union members after petitioners were already terminated, not during
the time that the latter wore armbands and put up placards.
- Finally, even if willful disobedience may be properly appreciated, still, the penalty of
dismissal is too harsh. Not every case of willful disobedience by an employee of a lawful
work-connected order of the employer may be penalized with dismissal. There must be
reasonable proportionality between, on the one hand, the willful disobedience by the
employee and, on the other hand, the penalty imposed. In this case, evidence is wanting
on the depravity of conduct and willfulness of the disobedience on the part of petitioners,
as contemplated by law. Wearing armbands to signify union membership and putting up
placards to express their views cannot be of such great dimension as to warrant the
extreme penalty of dismissal, especially considering their long years of service and the
fact that they have not been subject of any disciplinary action in the course of their
employment with MCCH.
Disposition Petition is GRANTED. The Decision of the CA is REVERSED. MCCH is
hereby ordered to reinstate petitioners without loss of seniority rights and other privileges
and to pay them full back wages, inclusive of allowances, and other benefits computed
from the time they were dismissed up to the time of their actual reinstatement.
R TRANSPORT CORP V EJANELRA
[PAGE 55]
B. GROSS AND HABITUAL NEGLECT OF
DUTIES
REQUISITES
JUDY PHILIPIINES V NLRC
289 SCRA 755
MARTINEZ; April 29, 1998
NATURE
Special civil action for certiorari to annul NLRC decision
FACTS
- Virginia Antiola was employed as an assorter of baby infant dresses by Judy
Philippines, Inc. in its export business. She was directed by her supervisor, to sort out
baby infant dresses pursuant to an instruction sheet.
- Petitioner required Antiola to explain in writing why she should not be meted disciplinary
sanctions for her erroneous assortment and packaging of 2,680 dozens of infant wear.
She admitted her error and asked for forgiveness. Antiola’s supervisor and the packer
also received a memo requiring them to explain why they should not be penalized. Both
submitted their explanations.
- Petitioner found Antiola guilty of negligence and she was dismissed from employment.
The supervisor was suspended for one month on the ground of negligence through
command responsibility. The packer was found innocent on the ground that when she
undertook the packing of the infant wear, the same were already sealed in black plastic
bags and could no longer be checked.
- The National Federation of Labor Union (NAFLU), in behalf of Antiola, filed a complaint
for unfair labor practice and illegal dismissal against Judy Philippines, Inc. They alleged
that the dismissal was unjustified because the infant wear erroneously assorted by
Antiola should not have been shipped to the buyer had the company’s supervisor and the
buyer’s quality comptroller exercised due diligence in the performance of their duties in
ensuring that the goods were properly assorted.
- Labor arbiter held that the dismissal was lawful on the ground of fault and negligence
causing an irreparable damage to the goodwill of the petitioners’ business, especially
considering that the latter is an export oriented entity
- NLRC held that to qualify as a valid cause for dismissal under Art. 282(b) of the Labor
Code, neglect must not only be gross, it should be ‘Gross and habitual neglect’ in
character. NLRC ordered petitioner to reinstate Antiola, with one year backwages
ISSUES
1. WON the appeal before the NLRC had been seasonably made
2. WON the offense committed by Antiola constitute a just cause for dismissal under
article 282 of the labor code.
HELD
1. YES
- 216 - Disini
- Under Article 223 of the Labor Code, as amended, the period to appeal to the
Commission is ten calendar days, to wit:
Article 223. Appeal. - Decisions, awards, or orders of the Labor Arbiter are
final and executory unless appealed to the Commission by any or both parties
within ten (10) calendar days from receipt of such decisions, awards or orders.
- It is admitted that Antiola received the labor arbiter’s decision on May 2, 1990. She filed
her appeal on May 14, 1990, a Monday.
- In subsequent cases, We ruled that if the tenth day to perfect an appeal from the
decision of the Labor Arbiter to the NLRC falls on a Saturday, the appeal shall be made
on the next working day as embodied in Section 1, Rule VI of the NLRC Rules of
Procedure promulgated on January 14, 1992. This conclusion recognizes the fact that on
Saturdays the offices of NLRC and certain post offices are closed.
- Even assuming arguendo that the appeal was filed beyond the period allowed by law,
technical rules of procedure in labor cases are not to be strictly applied if the result
would be detrimental to the working man.
2. NO
- Gross negligence implies a want or absence of or failure to exercise slight care or
diligence, or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them.
- “Article 282 (b) of the Labor Code requires that xxx such neglect must not only be
gross, it should be ‘Gross and habitual neglect’ in character.”
- The employer’s obligation to give his workers just compensation and treatment carries
with it the corollary right to expect from the workers adequate work, diligence and good
conduct.
- Considering however that private respondent worked with the company for 4 years with
no known previous bad record, the ends of social and compassionate justice would be
better served if she was merely suspended from work rather than terminated.
- Petitioner should be reinstated but not awarded backwages. RA 6715, which provides
that an illegally dismissed employee is entitled to full backwages, inclusive of allowances,
and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement, has no
retroactive effect.
Disposition NLRC decision AFFIRMED but MODIFIED in that petitioner. is ordered to pay
private respondent Virginia Antiola backwages for a period of three years, without
qualification or deduction.
CHAVEZ V NLRC
[PAGE 59]
CHALLENGE SOCKS CORP V CA (NLRC, ANTONIO
ET AL)
474 SCRA 356
YNARES-SANTIAGO; November 8, 2005
NATURE
CERTIORARI under RULE 45
FACTS
- CHALLENGE SOCKS CORP (CSC) hired Elvie Buguat as knitting operator.
- In the course of her employment, she incurred absences and tardiness without prior
approval and had been neglectful of her duties. 
- May 25, 1998: she failed to check the socks she was working on causing excess use of
yarn and damage to the socks’ design. 
- She was suspended for 5 days and warned that a repetition of the same act would
mean dismissal from the service.
- February 2, 1999: she committed the same infraction and was given a warning.
- Despite the previous warnings, Buguat continued to be habitually absent and inattentive
to her task. 
- March 1, 1999: she again failed to properly count the bundle of socks assigned to her. 
- March 2, 1999: CSC terminated her services on grounds of habitual absenteeism
without prior leave, tardiness and neglect of work.
[8]
- Thereafter, Buguat filed a complaint for illegal dismissal.
- LA: Buguat was illegally dismissed; ordered CSC to reinstate her without loss of
seniority rights and benefits, but w/o backwages; ruled that mistake in counting bundles
of socks is tolerable and should be punished by suspension only.
 - NLRC: adopted the findings of LA.  Denied CSC's Appeal and MR.
- CA: reversed and set aside LA’s and NLRC’s decisions; CSC was ordered to pay
BUGUAT full backwages; remanded to the Regional LA for the computation of the
backwages.
- CA also noted that petitioner failed to comply with the twin-notice requirement in
terminating an employee hence, the dismissal was considered ineffectual.
Labor Law 1 A2010
ISSUE
WON Buguat’s termination is valid
HELD
YES
Reasoning
- One of the just causes for terminating an employment under Article 282 of the Labor
Code is gross and habitual neglect by the employee of her duties.  This cause includes
gross inefficiency, negligence and carelessness.  Such just causes is derived from the
right of the employer to select and engage his employees.
- As a knitting operator, Elvie was required to check the socks she was working on and to
count the bundles of socks she had to pack to be forwarded to the Looping Section.
- Her repeated commission of the same offense could be considered willful
disobedience.  Elvie, despite the suspension and warning, continued to disregard the
company rules and regulations….
- Habitual neglect implies repeated failure to perform one’s duties for a period of time.   ballroom dancing establishment in Libis, Quezon City. Petitioner complied and took his
Buguat’s repeated acts of absences without leave and her frequent tardiness reflect her
indifferent attitude to and lack of motivation in her work.  Her repeated and habitual
infractions, committed despite several warnings, constitute gross misconduct.  Habitual
absenteeism without leave constitute gross negligence and is sufficient to justify
termination of an employee.
- Her repeated negligence is not tolerable; neither should it merit the penalty of
suspension only.  - The management of Maxim's required petitioner to submit, within forty-eight hours, a
- The record of an employee is a relevant consideration in determining the penalty that
should be meted out.
- An employee’s past misconduct and present behavior must be taken together in
determining the proper imposable penalty. The totality of infractions or the number of
violations committed during the period of employment shall be considered in determining
the penalty to be imposed upon an erring employee.   The offenses committed by him
should not be taken singly and separately but in their totality.   Fitness for continued
employment cannot be compartmentalized into tight little cubicles of aspects of
character, conduct, and ability separate and independent of each other.
- It is the totality, not the compartmentalization, of such company infractions that Buguat
had consistently committed which justified her dismissal.
 - Terminating an employment is one of petitioner’s prerogatives.  petitioner's part. Respondents moved for reconsideration of the foregoing decision, but
- Management has the prerogative to discipline its employees and to impose appropriate
penalties on erring workers pursuant to company rules and regulations.
- The Court has upheld a company’s management prerogatives so long as they are
exercised in good faith for the advancement of the employer’s interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or
under valid agreements.  ISSUE
- In the case at bar, petitioner exercised in good faith its management prerogative as
there is no dispute that Buguat had been habitually absent, tardy and neglectful of her
work, to the damage and prejudice of the company. Her dismissal was therefore proper.
- The law imposes many obligations on the employer such as providing just
compensation to workers, observance of the procedural requirements of notice and
hearing in the termination of employment.  On the other hand, the law also recognizes
the right of the employer to expect from its workers not only good performance, adequate
work and diligence, but also good conduct and loyalty.   The employer may not be
compelled to continue to employ such persons whose continuance in the service will
patently be inimical to his interests.
- The employer has the burden of proving that the dismissed 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.
- A review of the records shows that private respondent was served a written termination
notice on the very day she was actually dismissed from the service.  It was not shown
that CSC notified Elvie in advance of the charge or charges against her nor was she
given an opportunity to refute the charges made against her.
- Agabon v. National Labor Relations Commission : Upheld as valid the dismissal for just
cause even if there was no compliance with the requirements of procedural due process.  vehicular accident involving petitioner "he was the victim of the reckless and negligent act
While the procedural infirmity cannot be cured, it should not invalidate the dismissal.   of a fellow driver." An imputation of habitual negligence cannot be drawn against
However, the employer should be held liable for non-compliance with the procedural
requirements of due process.
Disposition CA’S DECISION IS AFFIRMED; backwages is DELETED; Nominal damages
(for violation of Buguat’s statutory due process) in the amount of P30,000.00.
GROSS AND HABITUAL NEGLIGENCE DEFINED
VALIAO V CA
[PAGE 11]
REYES V MAXIM’S TEA HOUSE
- 217 - Disini
398 SCRA 288
QUISUMBING; February 27, 2003
NATURE
Peition for review on certiorari of a decision of the Court of Appeals
FACTS
- Respondent Maxim's Tea House (hereinafter Maxim's for brevity) had employed Reyes
as a driver since October 1995. He was assigned to its M.H. del Pilar Street, Ermita,
Manila branch. His working hours were from 5:00 P.M. to 3:00 A.M., and among his
duties was to fetch and bring to their respective homes the employees of Maxim's after
the restaurant closed for the day.
- In the wee hours of the morning of September 27, 1997, petitioner was driving a
Mitsubishi L300 van and was sent to fetch some employees of Savannah Moon, a
usual route along Julia Vargas Street in Pasig City. He was headed towards Meralco
Avenue at a cruising speed of 50 to 60 kilometers per hour, when he noticed a ten-
wheeler truck coming his way at full speed despite the fact that the latter's lane had a red
signal light on. Petitioner maneuvered to avoid a collision, but nonetheless the van he
was driving struck the truck. As a result, petitioner and seven of his passengers
sustained physical injuries and both vehicles were damaged
written explanation as to what happened that early morning of September 27, 1997. He
complied but his employer found his explanation unsatisfactory and as a result he was
preventively suspended for thirty (30) days. Subsequently, Maxim's terminated petitioner
for cause.
- Feeling that the vehicular accident was neither a just nor a valid cause for the
severance of his employment, petitioner filed a complaint for illegal dismissal docketed
as NLRC NCR Case No. 00-12-08773-97. In his decision, the Labor Arbiter found that
petitioner was grossly negligent in failing to avoid the collision. Instead of filing the
requisite pleading for appeal, petitioner filed a "Motion for Partial Reconsideration" with
the NLRC. The NLRC opted to treat petitioner's motion as an appeal. The NLRC
reversed the decision of the Labor Arbiter on the ground that there was no negligence on
said motion was denied by the Commission in its resolution
- Respondents then filed a special civil action for certiorari with the Court of Appeals, The
appellate court decided in favor of the employer and its manager. Hence, the instant
case.
WON petitioner’s dismissal from employment is valid and legal
HELD
NO
- The issue of whether a party is negligent is a question of fact. As a rule, the Supreme
Court is not a trier of facts and this applies with greater force in labor cases. But where
the findings of the NLRC and the Labor Arbiter are contradictory, as in this case, the
reviewing court may delve into the records and examine for itself the questioned findings.
- Under the Labor Code, gross negligence is a valid ground for an employer to terminate
an employee. Gross negligence is negligence characterized by want of even slight care,
acting or omitting to act in a situation where there is a duty to act, not inadvertently but
willfully and intentionally with a conscious indifference to consequences insofar as other
persons may be affected. In this case, however, there is no substantial basis to support a
finding that petitioner committed gross negligence.
- In sustaining the Labor Arbiter's finding that petitioner was grossly negligent, the
appellate court stressed that the cited episode was the second vehicular accident
involving petitioner, and as such it "may clearly reflect against [his] attitudinal character
as a driver." The Court notes, however, that the Commission found that in the first
petitioner, since the earlier accident was not of his own making.
The test to determine the existence of negligence is as follows: Did petitioner in doing the
alleged negligent act use that reasonable care and caution which an ordinarily prudent
person would use in the same situation? It is not disputed that petitioner tried to turn left
to avoid a collision. To put it otherwise, petitioner did not insist on his right of way,
notwithstanding the green light in his lane. Still, the collision took place as the ten-
wheeler careened on the wrong lane. Clearly, petitioner exerted reasonable effort under
the circumstances to avoid injury not only to himself but also to his passengers and the
van he was driving. To hold that petitioner was grossly negligent under the
circumstances goes against the factual circumstances shown. It appears to us he was
more a victim of a vehicular accident rather than its cause.  
- There being no clear showing that petitioner was culpable for gross negligence,
petitioner's dismissal is illegal.
Labor Law 1 A2010
Disposition Petition granted.
CEBU FILVENEER CORPORATION V NLRC
[PAGE 194]
CITIBANK NA V GATCHALIAN
240 SCRA 212
PUNO; January 18, 1995
FACTS
- Petitioner bank received thirty-one (31) applications from alleged APBCI employees for
the issuance of Citibank credit cards, popularly known as Mastercard.
- A Citibank employee verified by phone the data which appeared on the application
forms. It was Florence Verendia, as secretary of the APBCI General Manager, who
answered the check calls. The applications were then approved and the corresponding
new and unsigned credit cards were issued. Petitioner bank's policy is for new and
unsigned credit cards to be released only to the cardholders concerned or their duly
authorized representatives. However, a Citibank employee may himself take delivery of
new and unsigned credit cards after accomplishing a Card Pull-Out Request Form
wherein the employee assumes the responsibility of delivering the same to the
cardholder concerned.
- Supnad (an employee of bank) and Verendia, conspired together to get the fictitious
cards. They got seven cards from bank employee Llonillo. As a result, the two (Supnad
and Verendia) used the cards in commercial establishments causing injury to the bank in
the amount of 200k.
- the Bank found out about this and conducted an investigation
- Investigation resulted in the decision to terminate Llonilla and to file charges against
Verendia and Supnad
-the labor arbiter ruled that Llonilla be reinstated based on evidence that what Llonilla did
was not gross negligence
ISSUE
WON Llonilla’s negligence was gross
HELD
YES
- Gross negligence implies a want or absence of or failure to exercise slight care or
diligence, or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them. The evidence on record
succinctly established the gross negligence of respondent Llonillo. She admitted that the
first time she was asked by Verendia to pick up one of the newly approved and unused
credit cards, she immediately acceded. Yet at that time, she had not personally met nor
previously seen Verendia. When asked how she came to know to whom she would give
the card, respondent Llonillo responded that Verendia described herself over the phone
and that was how she was able to identify Verendia when she first met her. Thus, on the
basis of a mere description over the telephone, respondent Llonillo delivered the credit
cards to Verendia.
- Furthermore, not only is her negligence gross, it was also habitual it being found out
that she picked up the newly approved credit cards on five (5) separate occasions and
delivered the same to Verendia and the latter's messenger. Certainly, these repetitive
acts and omissions bespeak of habituality.
- Company says she’s grossly or habitually negligent in the performance of her duties.
The SC said that since she has not been remiss in the performance of her duties in the
past, she can’t be charged with habitual negligence. Neither is her negligence gross in
character. Gross negligence implies a want or absence of or failure to exercise slight
care or diligence or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them. She had not the slightest reason
to distrust Kun because he was the GM and appears to have conducted himself well in
the performance of his duties in the past. At most, it’s error of judgment, not gross
negligence.
Disposition NLRC decision affirmed.
CHUA V NLRC (SCHERING-PLOUGH CORP ET AL)
453 SCRA 244
MELO; March 11, 2005
NATURE
Petition for review on certiorari of a decision and resolution of the CA
FACTS
- 218 - Disini
- On June 1, 1995, Dennis Chua was hired as a Professional Medical Representative by
Schering-Plough Corporation (SPC), and thereafter became a regular employee on
December 1, 1995.
- As a Professional Medical Representative, he was tasked to promote SPC and its
products to physicians, hospitals, paramedics, including trade and government outlets in
his assigned territory.
- One of the petitioner’s duties was to submit a Daily Coverage Report (DCR) every
Monday, or at least to mail the same to the Field Operations Manager. Furthermore, he
was required to have “call cards” signed by any of the eighty (80) doctors under his
coverage to show that he indeed visited them and handed out promotional items.  This
system enabled the SPC to know how many doctors the petitioner had visited in a week
and the number of call cards he was required to submit.
- Respondent Roberto Z. Tada, Field Operations Manager of the corporation for the Bicol
Region, noticed that the petitioner filed his DCRs late, and in batches at that. Specifically,
a batch of DCRs up to January 10, 1997 was filed only on March 13, 1997, while another
batch was filed only on March 18, 1997.  The petitioner also failed to submit the DCRs for
the period covering February 10, 1997 to April 7, 1997.  Respondent Tada also found
some discrepancies in the DCRs submitted by the petitioner.
- On April 6, 1997, respondent Tada confronted the petitioner regarding the said
discrepancies, to which Tada merely replied, “Pagbigyan mo na lang ako, boss. 
Tulungan mo na lang ako, boss.
- On April 8, 1997, Tada went to the petitioner’s residence and confiscated all the
paraphernalia used by the latter for his fieldwork, including the call cards and medicine
samples.  The car assigned to the respondent was likewise confiscated.
- On April 9, 1997, the petitioner filed an application for a “three-day sick leave,” but
indicated therein that he was going on leave only for two (2) days, from April 10 to 11,
1997. However, after the lapse of his applied leave of absence, the petitioner failed to
report for work.
- On April 15, 1997, the petitioner had already filed a complaint for illegal dismissal with
the National Labor Relations Commission (NLRC) against the SPC, Epitacio Titong, Jr.
(as President and General Manager), Danny T. Yu (as Division Manager) and Roberto Z.
Tada (as Field Operations Manager
- On April 16, 1997, the petitioner received a telegram from the SPC instructing him to
report to the office on April 18, 1997 and to see respondent Danny T. Yu who was the
Division Manager.  The petitioner, however, failed to comply.
- On April 18, 1997, respondent Tada sent a Memorandum to the petitioner requiring the
latter to explain the late submission of DCRs, insufficiency of the information on the call
cards, etc.
- The same letter informed the petitioner that he was under preventive suspension
effective April 11, 1997 while the case was under investigation.
- On May 8, 1997, while the case for illegal dismissal was pending resolution before the
arbitration branch of the NLRC, the SPC sent another letter to the petitioner, informing
him that his employment was terminated.
- On September 30, 1998, Labor Arbiter Ramon Valentin C. Reyes rendered a Decision
declaring the petitioner’s dismissal from employment as illegal.  The Labor Arbiter held
that the SPC failed to establish any ground for the petitioner’s dismissal and ordered the
SPC to reinstate him.
- SPC appealed the decision of the Labor Arbiter to the NLRC.
- On October 19, 1999, the NLRC issued a Resolution, finding respondent to have validly
dismissed complainant.
- The petitioner filed a motion for reconsideration of the said resolution, but the same was
dismissed.
- The petitioner sought relief from the CA, which affirmed, in toto, the resolution of the
NLRC, and consequently denied the petitioner’s MFR
ISSUE
WON petitioner’s dismissal form employment was illegal
HELD
NO
- The petitioner’s termination from employment was anchored on the following: (a) gross
and habitual neglect; (b) serious misconduct; and (c) willful disobedience to the lawful
orders of the employer.  Thus, it all boils down to the filing of the requisite DCRs due
every Monday. As found by both the NLRC and the CA, the petitioner failed to file the
DCRs on time on several occasions, and instead filed them in batches. Furthermore, the
petitioner failed to submit the DCRs for February 10, 1997 to April 7, 1997. Considering
that about ninety percent (90%) of the petitioner’s work as a medical representative
entails fieldwork, such DCRs were vital to his job; the DCRs were the primary basis upon
which the petitioner’s employer could track his accomplishments and work progress. 
Without the said DCRs, the employer would have no basis to determine if the petitioner
was actually performing his assigned tasks or not.
- In the same light, the petitioner also failed to submit several doctors’ call cards, and
submitted others which were incomplete; that is, undated although signed by the
doctors.  It must be stressed that the said call cards were also vital to the petitioner’s
fieldwork. The requirement of asking the doctors to affix their signatures in the call cards,
Labor Law 1 A2010
the date of the visit, as well as the samples and promotional items, if any, given to the
doctors, enabled the SPC to verify whether such doctors were indeed visited by the
petitioner.
- Gross negligence under Article 282 of the Labor Code, as amended, connotes want of
care in the performance of one’s duties, while habitual neglect implies repeated failure to
perform one’s duties for a period of time, depending upon the circumstances. Clearly, the
petitioner’s repeated failure to submit the DCRs on time, as well as the failure to submit
the doctors’ call cards constitute habitual neglect of duties.   Needless to state, the
foregoing clearly indicates that the employer had a just cause in terminating the
petitioner’s employment.
***But because there was a violation of the petitioner’s statutory right to two notices prior
to the termination of his employment for a just cause, he is entitled to nominal damages
of P30,000.00, absent sufficient evidence to support an award for actual or moral
damages. (In line with the ruling in Agabon)
Disposition The decision of the Court of Appeals is affirmed with modification that
petitioner is entitled to above stated award for nominal damages..
GENUINO ICE CO INC V MAGPANTAY
[PAGE 206]
PREMIER DEVT BANK V MANTAL
[PAGE 210]
SIMPLE NEGLIGENCE
PAGUIO TRANSPORT CORP V NLRC (MELCHOR)
294 SCRA 657
PANGANIBAN; August 28, 1998
NATURE
Petition for review of NLRC decision
FACTS
- Complainant Wilfredo Melchor was hired by respondent company as a taxi driver under
the "boundary system.” He was to drive the taxi unit assigned to him on a 24-hour
schedule per trip every two 2 days, for which he used to earn an average income from
P500 to P700 per trip, exclusive of the P650 boundary and other deductions.
- He was involved in a vehicular accident along Quirino Ave when he accidentally
bumped a car. He was allegedly advised to stop working and have a rest. When reported
for work, he was told that his service was no longer needed.
- He then filed complaint for illegal dismissal.
- Paguio maintained that Melchor was not illegally dismissed since there was no
employer-employee relationship. (no control, no payment of compensation) Even if EER
existed, complainant's termination arose out of a valid cause since he was already
involved in 3 accidents.
- NLRC ruling: there was illegal dismissal
ISSUES
1. WON an employer-employee relationship exists
2. WON dismissal was for a just cause
3. WON Melchor was afforded due process
4. WON ‘doctrine of strained relations’ applies
HELD
1. YES
Ratio The relationship of taxi owners and taxi drivers is the same as that between
jeepney owners and jeepney drivers under the "boundary system." This relationship is
that of employer-employee and not of lessor-lessee. The fact that the drivers do not
receive fixed wages but get only the excess of that so-called boundary they pay to the
owner/operator is not sufficient to withdraw the relationship between them from that of
employer and employee.
Reasoning
- He was considered an employee because he was engaged to perform activities which
were usually necessary or desirable in the usual trade of the employer.
- This is different from lease of chattels, wherein the lessor loses complete control over
the chattel leased. In the case of jeepney owners/operators and jeepney drivers, the
former exercise supervision and control over the latter.
2. NO
Ratio Employer has the burden of proving that the dismissal of an employee is for a just
cause. The failure of the employer to discharge this burden means that the dismissal is
not justified and that the employee is entitled to reinstatement and backwages.
- 219 - Disini
- Mere involvement in an accident, absent any showing of fault or recklessness on the
part of an employee, is not a valid ground for dismissal.
3. NO
Ratio The twin requirements of notice and hearing are essential elements of due
process. The employer must furnish the worker two written 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 essence of due process lies
simply in an opportunity to be heard, and not always and indispensably in an actual
hearing.
4. NO
Ratio Strained relations must be demonstrated as a fact.
- The doctrine on "strained relations" cannot be applied indiscriminately since every labor
dispute almost invariably results in "strained relations"; otherwise, reinstatement can
never be possible simply because some hostility is engendered between the parties as a
result of their disagreement.
Reasoning
- Paguio’s allegation that private respondent was incompetent and reckless in his manner
of driving, which led to his involvement in three vehicular accidents, is not supported by
the records. No evidence was properly submitted by petitioner to prove or give credence
to his assertions.
C. FRAUD – WILLFUL BREACH OF TRUST
SANTOS V SAN MIGUEL CORPORATION
399 SCRA 172
SANDOVAL-GUTIERREZ; March 14, 2003
NATURE
Petition for review on certiorari
FACTS
- Petitioner Carmelita Santos was appointed Finance Director of respondent SMC’s Beer
Division for Luzon Operations.
On September 15, 1987, SMC issued a Memorandum prohibiting the encashment of
personal checks at respondent's Plants and Sales Offices. Thereafter, SMC noticed that
petitioner encashed her 3 personal checks in various Metro Manila Sales Offices.
SMC commenced an audit investigation. Petitioner received from respondent an inter-
office memorandum requiring her to explain in writing why no disciplinary action should
be taken against her in view of her unauthorized encashment of her 3 personal checks at
respondent's sales offices.
- 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.
- Meanwhile, the audit results revealed that, aside from petitioner's reported encashment
of 3 personal checks, she had previously encashed 50 personal checks in varying
amounts, which were not endorsed by the Sales Operations Manager or the Region
Finance Officer. Additionally, petitioner encashed 2 other personal checks. After
receiving such report, SMC formed an Investigating Panel to conduct a full-blown
investigation.
- The Investigating Panel found the encashment by petitioner of her personal checks
with the region/sales offices as highly irregular transactions to the detriment of the
Company. It recommended that Santos be terminated from employment.
- In a memorandum, SMC 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.
- The complaint filed by petitioner against SMC for illegal dismissal was dismissed by the
Labor Arbiter for lack of merit. The NLRC reversed the Labor Arbiter’s decision. Upon an
MR filed by SMC, the NLRC dismissed the complaint filed by Santos. Hence, this
recourse.
ISSUE
WON SMC dismissed the petitioner from employment without just cause
HELD
NO
- 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
Labor Law 1 A2010
(2) the employee must be given an opportunity to be heard and to defend himself.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. This ground should be duly established. 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. It must be
shown, though, that the employee concerned holds a position of trust. The betrayal of
this trust is the essence of the offense for which an employee is penalized.
- 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 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.
- Indeed, there is 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.
- Petitioner contends that there is a 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 Memorandum. 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.
LAKPUE DRUG INC V BELGA
[PAGE 208]
LOSS OF CONFIDENCE – REQUISITES
JARDINE DAVIES INC V NLRC (REYES)
311 SCRA 289
QUISUMBING; July 28, 1999
FACTS
- Petitioner, the exclusive distributor of “Union 76” lubricating oil, engaged the services of
a private investigation agency due to reports that petitioner’s products, particularly Union
76, were being illegally manufactured, blended, packed and distributed. Upon
confirmation of the investigator through a surveillance report and having secured a
search warrant, petitioner seized some of the fake items found in the apartment of private
respondent, a former sales representative of petitioner.
- a criminal complaint for unfair competition violating Article 189 of the RPC (repealed by
Section 239 of the Intellectual Property Code) was filed against Reyes along with
administrative charges for serious misconduct inimical to the interest of petitioner. He
was advised to go on an indefinite leave which later led to his termination.
- the materials seized were released in view of a petition filed by Reyes’ younger brother
Donato, who convinced the court that the materials belonged to him and that he was
legally engaged in the business of general merchandising (Lubrix Conglomerate)
reselling oil and lubricant products to the public.
- with that, Reyes sued petitioner for illegal dismissal but the complaint was dismissed by
the Labor Arbiter as he thought otherwise. Upon appeal with the NLRC, the decision was
reversed on the ground that there was no cogent reason for petitioner to lose trust and
- 220 - Disini
confidence in private respondent, there being “no shadow of an act amounting to serious
misconduct, fraud or breach of trust.”
- petitioner’s MFR was denied, hence this petition.
ISSUE
WON there was reason for petitioner to lose trust and confidence in private respondent
and justify his dismissal
HELD
NO
Ratio The right of an employer to dismiss employees on account of loss of trust of
confidence must not be exercised arbitrarily and without showing just cause, so as not to
render the employee’s constitutional right to security of tenure nugatory.
Reasoning
- Article 282 provides that an employer may terminate an employment for fraud or willful
breach by the employee of the trust reposed in him by his employer. It is settled that loss
of confidence as a just cause for termination must be premised on the fact that an
employee concerned holds a position of trust and confidence, as in this case. And in
order to constitute just cause, the act complained of must be work-related. Proof beyond
reasonable doubt is not required, so long as there is some basis for the loss of
confidence, but basis thereof must still be clearly and convincingly established, arising
from particular proven facts which the employer bears to prove.
- in the instant case, the surveillance report of the private investigator was unreliable as
the conclusions therein were mere deductions not supported by substantial corroborating
evidence. Petitioner also failed to controvert proof presented by private respondent that
the reselling of the oil was in support of petitioner’s marketing policy. It was also odd that
petitioner’s agents did not submit the alleged fake merchandise to be tested in their labs,
virtually affirming the articles were genuine, having been purchased from petitioner’s
dealers.
- another confirmation that petitioner lacked basis for its distrust of private respondent
was the release of the seized articles, with Donato even presenting receipts to prove they
were purchased from authorized dealers.
- Considering this, private respondent was illegally dismissed. As such, he is entitled to
backwages. Since he was terminated before the effectivity of RA 6715, he is entitled to
only 3 years of backwages, and not full backwages as would be granted now. Because
the antagonism and imputations of the criminal act strained the parties’ relationship,
reinstatement would not be feasible. Instead, a more equitable disposition would be an
award of separation pay.
Disposition instant petition is DENIED for lack of merit
PLDT V TOLENTINO
[PAGE 202]
DELA CRUZ V NLRC
[PAGE 100]
PHILIPPINE NATIONAL CONSTRUCTION
CORPORATION V MATIAS
458 SCRA 148
PANGANIBAN; May 6, 2005
FACTS
- Rolando Matias was employed by Construction and Development Corporation of the
Philippines (CDCP) as Chief Accountant and Administrative Officer. During his
employment with the company, various parcels of land situated at Don Carlos Bukidnon
were placed in the names of certain employees as trustees for the purpose of owning
vast tracts of land more than the limit a corporation can own which were primarily
intended for CDCP agricultural businesses. By internal arrangement documents
transferring back the properties to the corporation were executed. A piece of land was
registered in the name of Matias.
- CDCP was later converted a government owned or controlled corporation, and the
name of CDCP was changed to Philippine National Construction Corporation (PNCC).
Under a new set up, PNCC offered a retrenchment program and on December 31, 1984
Matias availed of the said program.
- Sometime in 1985, the Conjuangco Farms owned by Mr. Danding Conjuangco
acquired CDCP Farms Corporation wh[ich] took over the operations of said farms. Not
long after, or in 1989, CDCP Farms Corporation ceased to operate.
- In July 1992, two former CDCP employees, namely Reynaldo Tac-an and Luciano
Tadena went to the house of Matias and brought with them duly accomplished
documents and Special Power of Attorney for his signature and informed him that the
lands in Bukidnon under his name with all the others were invaded by squatters, and that
Labor Law 1 A2010
the said land were covered by the Comprehensive Agrarian Reform Program (CARP)
where Matias’ name was included in the list of landowners. Matias reluctantly signed the
document and after six months, he signed an acknowledgment receipt of P100,000.00.
- The original title registered in the name of Matias was cancelled and a new title was
issued. The transfer of said parcel of land was made possible because Rolando Matias
and Elena Esmeralda Matias received manager’s checks from the Land Bank of the
Philippines in the amount of P102,355.96 and P219.22 and bond worth P203,478.48 as
payment of Land Transfer Acquisition.
- On August 12, 1996, Matias was rehired by PNCC as Project Controller in Zambales
PMMA Project.
- Not long after, Mr.Alday, Head of the Realty Management Group of PNCC invited
Matias to his office and showed him a listing of parcels of land in the name of different
persons with the corresponding status including the latter’s name. On the basis of the
listing, Mr. Alday told Matias that the transfer of the property registered in the latter’s
name was not yet consummated by the LBP and then requested Matias to execute a
Deed of Assignment in favor of PNCC pertaining to the said property, which Matias did
and guaranteed in writing that the ‘parcel of land is free from any lien or encumbrance.’
- On April 20, 1998, a memorandum was issued to Matias by PNCC directing the former
to explain in writing why none of the following actions, falsification, estafa, dishonesty,
and breach of trust and confidence, should be taken against him in connection with the
Deed of Assignment. PNCC alleges that respondent fraudulently breached its trust and
confidence when, without its knowledge and consent, he disposed of the Bukidnon
property; though actually belonging to petitioner, that property had purportedly been
merely placed in trust under his name. Thereafter, he assigned the same property to
petitioner, allegedly despite his full knowledge that the title had already been transferred
-- with his active planning and participation -- to the Republic of the Philippines .
- In due time, Matias submitted his written explanation. However, he was later advised
that he was terminated from the service on the ground of loss of trust and confidence.
Hence, Matias filed a complaint for illegal dismissal and money claims against PNCC
alleging that the dismissal on the ground of loss of trust and confidence was without
basis.”
ISSUE
WON the dismissal of Matias on the ground of loss of trust and confidence was without
basis
HELD
YES
Ratio: To constitute a valid cause to terminate employment, loss of trust and confidence
must be proven clearly and convincingly by substantial evidence. To be a just cause for
terminating employment, loss of confidence must be directly to the duties of the
employee to show that he or she is woefully unfit to continue working for the employer.
Reasoning
- Undeniably, the position of project controller -- the position of respondent at the time of
his dismissal -- required trust and confidence, for it related to the handling of business
expenditures or finances. However, his act allegedly constituting breach of trust and
confidence was not in any way related to his official functions and responsibilities as
controller. In fact, the questioned act pertained to an unlawful scheme deliberately
engaged in by petitioner in order to evade a constitutional and legal mandate.
- It has oft been held that loss of confidence should not be used “as a subterfuge for
causes which are illegal, improper and unjustified. It must be genuine, not a mere
afterthought to justify an earlier action taken in bad faith.” Be it remembered that at stake
here are the sole means of livelihood, the name and the reputation of the employee.
Thus, petitioner must prove an actual breach of duty founded on clearly established facts
sufficient to warrant his loss of employment.
- We stress once more that the right of an employer to dismiss an employee on account
of loss of trust and confidence must not be exercised whimsically. To countenance an
arbitrary exercise of that prerogative is to negate the employee’s constitutional right to
security of tenure. In other words, the employer must clearly and convincingly prove by
substantial evidence the facts and incidents upon which loss of confidence in the
employee may be fairly made to rest; otherwise, the latter’s dismissal will be rendered
illegal.
CRUZ V CA (NLRC, CITYTRUST BANK)
494 SCRA 226
AUSTRIA-MARTINEZ; July 12, 2006
NATURE
Special civil action for certiorari under Rule 65 PROC seeking to annul CA decision
affirming NLRC decision and resolution .
FACTS
- 221 - Disini
- Felix Cruz was an employee of Ciytrust Banking Corporation. He held a confidential
position of Micro Technical Support Officer, whose duties include: evaluating and
recommending requests for Micro Computers received by the bidding committee, further
evaluating and accepting of bids done by the Technical Commitee. He was recognized
with awards and citations due to his good performance.
- There were feedbacks and informations that there were irregularities in the bidding
process and purchase of the computers. A special investigation was conducted which
found that there were unauthorized and unreported commissions and rebated given out
by one of its computer suppliers (MECO) for purchases made by Citytrust.
- Citytrust sent a show cause memorandm to Cruz placing him under preventive
suspension and directing him to appear in an administrative hearing by the Ad Hoc
Committee. The committee found him guilty of fraud, serious misconduct, gross
dishonesty and serious violation of the bank policies. For the resultant loss of confidence,
Citytrust terminated Cruz from employment.
- Cruz filed before the Labor Arbiter an action for illegal dismissal and damages for being
denied due process and hastily dismissed. LA decision favored Cruz.
- Citytrust appealed to the NLRC, setting aside LA decision and dismissing the case fro
lack of merit. Cruz filed MFR, but was denied for lack of merit.
- Cruz filed petition for Certiorari with SC, which was referred to the CA for appropriate
action and disposition.
- CA dismissed the petition. It held that although the signature of the petitioner does not
appear in the check vouchers, other pieces of evidence prove that he benefited from the
proceeds of the checks issued and that there is substantial evidence to hold the
petitioner liable for soliciting; that his acts constituted a willful breach of the supplier’s
trust and confidence; that the dismissal was the result of a thorough investigation and
hearing.
ISSUES
1. WON CA committed grave abuse of discretion
2. WON he denied due process
HELD
1. NO
- Petitioner failed to prove such.
- Petitioner was dismissed on the ground, among others, of loss of trust and confidence.
Loss of trust and confidence, as a valid ground for dismissal, must be substantiated by
evidence.
- WRT to rank-and-file personnel, loss of trust and confidence requires proof of
involvement in the alleged events in question. But as regards a managerial employee,
the mere existence of a basis fro believing that such employee has breached the trust of
his employer would suffice for his dismissal. Proof beyond reasonable doubt is not
required, it being sufficient that there is some basis for such loss of confidence such
when the employer has reasonable ground to believe that the employee concerned id
responsible for the purported misconduct, and the nature of his participation renders him
unworthy of the trust and confidence demanded by his position.
- Art 282 ( c) LC states that the loss of trust and confidence must be based on willful
breach. It should be done intentionally, knowingly and purposely without justifiable
excuse. It must not 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 shows that the employee
concerned is unfit to continue working for the employer. In addition, loss of confidence is
premised on the fact that the employee concerned holds a position of responsibility, trust
and confidence or that the employee concerned is entrusted with confidence with respect
to delicate matters. The betrayal of this trust is the essence of the offense for which an
employee is penalized
- Cruz’s job entails the observance of proper company procedures. His functions are also
extended to all branches nationwide, involving high degree of responsibility requiring a
substantial amount of trust and confidence.
- Petitioner’s acceptance of commissions and rebates from MECO, without knowledge
and consent from Citytrust, and without said rebates being reported and turned over to
the latter, are acts which can be considered willful breach of the trust and confidence
reposed by Citytrust on him.
- An employer cannot be compelled to retain an employee who s guilty of acts inimical to
the interests of the employer.
2. NO, he was not denied due process.
- The basic requirement of notice and hearing in termination cases is for the employer to
inform the employee of the specific charges against him and to hear his side and
defenses. This does not mean a full adversarial proceeding. The parties may be heard
through pleadings, written explanations, position papers, memorandum or oral argument.
In all of these instances, the employer plays an active role by providing the employee
with the opportunity to present his side and answer the charges in substantial compliance
with due process.
- The fact alone that he was not able to confront the witnesses against him during the
investigation conducted by Citytrust does not mean that he was denied his right to due
process. What is frowned upon is the absolute lack of notice and hearing.
Labor Law 1 A2010
- Citytrust complied with the first requirement of notice when it informed petitioner
through a letter of the charges against him, directing him to explain in writing why his
employment should not be terminated and to appear in a hearing to be conducted by the
company to give him further opportunity to explain his side. Citytrust also complied with
the second requirement of notice when it sent a memorandum informing him of his
dismissal from employment and the reasons therefore.
Dispositon instant petition is DISMISSED for lack of merit.
BREACH OF TRUST – LOSS OF CONFIDENCE
CENTRAL PANGASINAN ELEC CORP V MACARAEG
[PAGE 195]
POSITION, TRUST AND CONFIDENCE
SANTOS V SAN MIGUEL CORP
[PAGE 219]
PANDAY V NLRC (LUZON MAHOGANY TIMBER
INDUSTRIES INC)
209 SCRA 122
GUTIERREZ; May 20, 1992
NATURE
Petition seeking the review of the order rendered by the NLRC authorizing the separation
from the service of Panday to the payment by the private respondent of separation pay
equivalent to one-half month salary for every year of service. It likewise ordered the
payment of the complainant's 13th month pay for 1977 but dismissed his claim for living
allowance for lack of merit.
FACTS
- Panday was hired by Luzon Mahogany Timber Industries since Aug. 23, 1973.
Sometime in Dec. 1977, Panday was called by Martin Gaw, the owner-manager who
instructed him to cut off the living allowance of the employees. Panday requested that a
memorandum to this effect be made so that he would not be blamed by the workers.
Gaw got angry and shouted "what for is the memorandum? I am telling you to do so." He
then butted, "Ano ba talaga Naning ang ibig mong sabihin? Sa tuwing magsasalita ka,
panay ka "policy" ng companya at panay ka records".
- From the time of that incident, Panday was deprived of free light. He was no longer
given any accounting work. His per diem was abruptly cut off. All that was left for him to
do was the simple clerical job of registering or paying SSS premiums. Still complainant
continued to bear it out. In 1979, however he was totally divested of all his duties and he
was compelled to approach Manager Martin Gaw to clear up matters. Gaw referred him
to Mr. Gerry Lumban who was supposed to give him some work to do. It turned out,
however, that no such instructions were given to said Mr. Lumban.
- In 1979, Panday filed a request for vacation leave with pay for 15 days from April 14-30,
1979. On that same day he brought his son to Manila for medical treatment and stayed
there up to the end of the month. Upon his return to Isabela, he asked for his salaries
only to learn that his application for leave was disapproved.
- Hence, he filed this case for illegal dismissal, non-payment of 13th month pay for 1977,
emergency allowance under P.D. 525 since 1975 up to 1977 and unpaid wages for April
16-30, 1979.
- The Office of the Minister found and ruled that Panday was constructively dismissed
from the service. Luzon Timber was ordered to comment on the petition but failed to so.
Thus, the actual findings are affirmed. The only complaint of Panday which remains is
his claim that Deputy Minister Vicente Leogardo, Jr. should have ordered his
reinstatement with backwages.
ISSUE
WON Panday’s prayer for reinstatement should have been granted
HELD
NO
- Panday, as branch accountant occupied a position involving trust and confidence and in
the light of the estranged relation between the complainant and the respondent that may
not permit the full restoration of an employment relationship based on trust and
confidence, we have to allow termination of the employer-employee relationship but upon
the payment of separation pay equivalent to one-half (1/2) month for every year of
service rendered.
- The case of Lepanto Consolidated Mining Co. v. Court of Appeals provides a definition
of a "position of trust and confidence". It is one where a person is "entrusted with
- 222 - Disini
confidence on delicate matters, or with the custody, handling, or care and protection of
the employer's property"
- A few examples were given by the Court in the case of Globe-Mackay Cable and Radio
Corporation v. National Labor Relations Commission and Imelda Salazar, G.R. No.
82511, March 3, 1992, to illustrate the principle:
- where the employee is a Vice-President for Marketing and as such, enjoys the full
trust and confidence of top management
- or is the Officer-In-Charge of the extension office of the bank where he works
- or is an organizer of a union who was in a position to sabotage the union's efforts to
organize the workers in commercial and industrial establishments
- or is warehouseman of a non-profit organization whose primary purpose is to
facilitate and maximize voluntary gifts by foreign individuals and organizations to the
Philippines
- or is a manager of its Energy Equipment Sales
- Credit and Collection Supervisor ( Tabacalera Insurance Co. v. National Labor
Relations Commission)
- If the respondent had been a laborer, clerk or other rank-and-file employee, there
would be no problem in ordering her reinstatement with facility. An officer in such a key
position as Vice President for Marketing(or as Chief Accountant as in the present case)
can work effectively only if she enjoys the full trust and confidence of top management.
- The case of Metro Drug Corp. v. National, Labor Relations Commission, aptly describes
the difference in treatment between the positions of trust on one hand and mere clerical
positions on the other. It states:
Managerial personnel and other employees occupying positions of trust and
confidence are entitled to security of tenure, fair standards of employment, and the
protection of labor laws. However, the rules on termination of employment, penalties
for infractions, and resort to concerted action are not necessarily the same as those
for ordinary employees.
A special and unique employment relationship exists between a corporation and its
cashiers. More than most key positions, that of cashier calls f or the utmost trust and
confidence. . . .
When an employee accepts a promotion to a managerial position or to an office
requiring full trust and confidence she gives up some of the rigid guaranties available
to ordinary workers. Infractions which if committed by others would be overlooked or
condoned or penalties mitigated may be visited with more severe disciplinary action.
A company's resort to acts of self-defense would be more easily justified. It would be
most unfair to require an employer to continue employing as its cashier a person
whom it reasonably believes is no longer capable of giving full and wholehearted
trustworthiness in the stewardship of company funds.
- Reinstatement in the present case is no longer possible not only because of the
strained relationship between the employee and the employer but also because of the
length of time that has passed from the date the incident occurred to its resolution.
Instead of reinstating the employee, this Court has in several cases awarded separation
pay although the employee was found to be illegally dismissed.
The following reasons have been advanced by the Court for denying reinstatement
- reinstatement can no longer be effected in view of the long passage of time
- because of the realities of the situation
- that it would be inimical to the employer's interest
- that reinstatement may no longer be feasible
- that it will not serve the best interests of the parties involved
- that the company would be prejudiced and by the workers' continued employment
- that it will not serve any prudent purpose as when supervening facts have transpired
which make execution on that score unjust or inequitable
Disposition the prayer for reinstatement is DENIED but the order rendered by Deputy
Minister Vicente Leogardo, Jr. dated May 29, 1984 is modified to cover five (5) years
backwages. The order is AFFIRMED in other respects.
CRUZ V COCA-COLA BOTTLERS PHILS INC
460 SCRA 340
YNARES-SANTIAGO; June 15, 2005
FACTS
- Cruz has been working for respondent company’s plant in Calamba, Laguna, as a
driver/helper since June 1983.  At times, however, Cruz gets designated as Acting
Salesman for company’s soft drinks and other beverages.  On July 25, 1998, petitioner
was assigned as acting salesman of Route DA1, covering the small barangays. 
Together with his helper, Mr. Pablito Aguila, Cruz loaded their truck with CCBPI
products.  After the required verification and confirmation of the products loaded on the
truck by the Checker and the guard at the gate, Cruz proceeded to leave the plant
vicinity.
Labor Law 1 A2010
- After gate inspection, however, Cruz drove back inside the plant on the pretext of
refueling.  While waiting in line to refuel, Cruz allegedly asked Aguila to load an additional
thirty cases of assorted canned soft drinks as “plus load”.  Aguila reminded him about the
required documents but he merely stated “ Ayos na” and continued with the refueling of
the truck.
- On his second exit from the plant premises, Cruz did not slow down for the mandatory
inspection even as the security guards at the gate flagged him down.  Western Visayas in 1988. He was dismissed in October 15, 1992 for alleged violation of
- One of the guards pursued the truck and when he caught up with petitioner at the
Walter Mart Shopping Mall in Barangay Real, Calamba, the latter could not produce the
proper documents for the extra thirty cases loaded on his truck.  He was then directed to
return to the plant and unload the products.  At this point, it was confirmed that Cruz did
not actually secure any paper for the added products nor did he follow the established
procedure before taking out the extra cases.
- Cruz admitted the incident but alleged that he forgot to secure the requisite documents
for the products.  On August 5, 1998, an investigation was conducted on the alleged
violations committed by petitioner.  On August 19, 1998, respondent company terminated
the services of petitioner effective upon receipt of the memorandum.
ISSUE
WON Cruz was validly dismissed
HELD
YES
- The Labor Arbiter, the NLRC and the Court of Appeals were unanimous in their findings
that petitioner was guilty of dishonest acts but differed only on the propriety of the penalty
imposed upon petitioner.
- After a careful evaluation of the evidence on record of this case, we found no
compelling reason to disturb the unanimous findings of the Court of Appeals, the NLRC
and the Labor Arbiter.  - Private respondent filed a complaint for illegal termination, non-payment of managerial
- Several factors militate against petitioner’s claim of good faith.  Petitioner’s length of
service, which spans almost fifteen years, works against his favor in this case.   We have
held that the longer an employee stays in the service of the company, the greater is his
responsibility for knowledge and compliance with the norms of conduct and the code of
discipline in the company. Considering that petitioner has worked at respondent
company for a long period of time, one expects that securing the LOGP or TGP would be
automatic for him.
- Faced with the overwhelming evidence presented by respondents on one hand and the
mere general denial of petitioner on the other, the invocation of the protective mantle of
the law in favor of labor cannot be upheld in this case.  This principle cannot be adopted
where there is clear and convincing evidence of the truth.  While this court endeavors to
live up to its mandate that the workingman’s welfare should be the primordial and
paramount consideration, it cannot do so if it will be at the expense of justice and will
result in the oppression or self-destruction of the employer. The interests of both the
employers and employees are intended to be protected and not one of them is given
undue preference.
- Termination of employment by reason of loss of confidence is governed by Article
282(c) of the Labor Code, which provides that an employer can terminate the
employment of the employee concerned for “fraud or willful breach by an employee of the
trust reposed in him by his employer or duly authorized representative.” Loss of
confidence, as a just cause for termination of employment, is premised on the fact that
the employee concerned holds a position of responsibility, trust and confidence.  He must
be invested with confidence on delicate matters such as the custody, handling, care and
protection of the employer’s property and/or funds.
- Admittedly, the company rules violated by Cruz are punishable, for the first offense, with
the penalty of suspension.  However, company has presented evidence showing that
Cruz has a record of other violations from as far back as 1986.  To be sure, the nature of
petitioner’s offenses is downright inimical to the interests of respondent company.  By
virtue of his job, Cruz is entrusted with the property and funds, which belong to
respondent company.  His actions on that fateful day highlight, not only his consistent
and deliberate defiance of company rules and regulation, but also his duplicity in
handling respondent company’s properties.  It would appear that company had tolerated
his work ethic far too long.  We therefore find that it was justified in terminating petitioner
after the flagrant dishonesty he committed.
Disposition Instant petition is DENIED.  Dismissal of petitioner is declared valid but
respondent company is ORDERED to pay petitioner the amount of P20,000.00 as
nominal damages for non-compliance with statutory due process.
GUIDELINES
VITARICH CORP V NLRC (RECODO)
307 SCRA 509
BELLOSILLO; May 20, 1999
- 223 - Disini
NATURE
Special Civil action in the SC. Certiorari
FACTS
- Private respondent, Isagani Recodo, started working at Vitarich as an Accounting clerk.
He gradually moved up the organization ladder until he was made Sales Manager for
a memorandum dated August 4, 1992 and also for violation of company policies relating
to credit extensions and cash advances. He was also terminated for loss of trust and
confidence.
- Apparently, his new boss, Onofre Sebastian, was under pressure from senior
management to address and correct all the problems he had inherited from his
predecessor. The problems included high account receivable level in the sales territory of
Recodo. The two had a meeting sometime middle of July to address the problems,
including the A/R level of one Rex Cordova.
- The August 4 Memorandum referred to contains instructions to Recodo to ground
salesmen with thirty say overdue A/R so that the levels of said A/R can be regularized.
Apparently, Recodo received the said memo garbled and had to verify its contents on
September 5, 1992. In the meantime, he postponed the grounding of Cordova until
August 20 to bring about the desired reduction. The reduction hoped for in fact
happened when Cordova’s A/R went down from Pesos 800,000 to just Pesos 250,000.
Huffing and puffing, Sebastian was asked to explain why he should not be terminated for
failure to ground Cordova in compliance with the August 4 memo of Sebastian.
- Recodo complied with the order to explain and an investigation was conducted by the
Head of Personnel, a certain Enriquez. In his report, Enriquez found that there was no
defensible ground for terminating Recodo’s services in the absence of documented
warnings given to Recodo to justify any loss of trust and confidence in him. Nonetheless,
Recodo was terminated on October 15, 1992.
bonus, and for moral and exemplary damages. The Labor Arbiter ruled illegal dismissal.
The NLRC initially overturned the ruling but on appeal by Recodo, the finding of the
Labor Arbiter was upheld. Hence this action.
ISSUE
WON the NLRC committed a grave abuse of discretion in finding in favor of Recode
HELD
NO
. In rectifying its previous appreciation and assessment of Recodo’s dismissal, the NLRC
did not commit any abuse of discretion. A careful scrutiny of the records reveal that the
decision of the Labor Arbiter is suffused with established facts and a correct
understanding of them.
Reasoning
- While it may be true that there was a delay on the part of Recodo in implementing his
superior’s order with regard Cordova’s grounding, the question is whether the delay
constitutes disobedience and whether this disobedience was willful to merit loss of
confidence. The SC, in AHS Philippines, Inc. vs. CA, explained that “willful disobedience
of the employer’s lawful orders, as a just cause for dismissal of an employee, envisages
the concurrence of at least two requisites:
a. the employee’s assailed conduct must be willful or intentional, the willfulness
being characterized by a wrongful and perverse attitude;
b. 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.
- In the case at bar, the non-compliance by Recodo was not an open defiance but “as
one of the discretions which he had to take under the circumstances in his capacity as
sales manager. As it turned out, the result both Recodo and Sebastian hoped for was
achieved by not immediately grounding Cordova.
- While an employer is allowed wide latitude to dismiss employees on loss of trust and
confidence, still the loss thereof must have some basis and must be proved by the
employer otherwise the social justice policy of the labor lawsand the constitution will be
for naught. The guidelines for the application of the doctrine of loss of confidence are:
a. loss of confidence should not be simulated
b. it dhould not be used as subterfuge for causes which are improper, illegal, or
unjustified
c. it should not be arbitrarily asserted in the face of overwhelming evidence to
the contrary
d. it must be genuine, not a mere afterthought to justify
faith
earlier action taken in bad
Disposition the resolution f the NLRC is affirmed with the modification that corresponding
back wages of respondent be forthwith updated and released to him.
COCA-COLA BOTTLERS PHIL INC V KAPISANAN NG
MALAYANG MANGGAGAWA SA COCA-COLA
Labor Law 1 A2010
[PAGE 209]
WILLFUL BREACH
ATLAS CONSOLIDATED MINING & DEVELOPMENT
CORP V NLRC (VILLACENCIO)
290 SCRA 479
PUNO; May 21, 1998
NATURE
petition for certiorari under Rule 65 of the Revised Rules of Court of Decision dated
December 27, 1994 of NLRC which ordered the payment of separation pay and
backwages to private respondent Isabelo O. Villacencio, and its Resolution dated August
18, 1995 denying petitioner's Motion for Reconsideration.
FACTS
- private respondent Isabelo O. Villacencio worked with petitioner ACMDC from January
23, 1970 to February 2, 1990. He started as an ordinary laborer/helper in the Mill
Department. In 1973, he became supervisor of the Tailings Disposal Department. In
1982, he was elevated as a junior staff of the department. Finally, he was promoted
general foreman of the Tailings Disposal and Water Supply Department with a monthly
salary of P7,440.00. He held this position until his services were terminated on February
2, 1990.
- As general foreman, Villacencio was the second-to-the-highest man in the department
which has a field office located in Magdugo, Toledo City. Under Villacencio were some
fifty nine (59) workers whom he supervised through regular field inspections. Villacencio
was assigned a service jeep and a service motorcycle which he used alternately. He was
given the privilege to withdraw the necessary fuel/gasoline for the vehicles at the
Transport Department located inside the main compound of ACMDC.
- September 8, 1989 - Engineer Sanchez of the Services Division wrote a memorandum
requesting that Villacencio be investigated for alleged anomalies at the Magdugo Tailings
Field Office. Villacencio was charged before the Special Investigation Board with acts of
malfeasance consisting of:
1. withdrawal of company-owned gasoline for the refueling of his personal jeep;
2. use of company personnel on company time as well as company-owned materials
for the assembly of a jeep not belonging to the company; and
3. granting of authority to non-company personnel to withdraw company-owned
stocks.
- January 1990 - He was summoned and investigations were conducted. the Special
Investigation Board found Villacencio guilty of the charge of withdrawing on various dates
a total of 192 liters of company-owned gasoline which he used to refuel his private jeep
and of the charge of using company personnel on company time in the assembly of his
jeep. The third charge was dismissed for insufficiency of evidence. Villacencio was
dismissed from work on February 2, 1990.
- February 19, 1990 - Villavicencio lodged a complaint against ACMDC before the
Regional Arbitration Cebu City, for illegal dismissal with prayer for reinstatement and
backwages plus damages. The case was assigned to Labor Arbiter Reynoso A.
Belarmino.
- Meanwhile, ACMDC initiated a criminal complaint against Villacencio for the
misappropriation of 192 liters of gasoline amounting to P1,086.72. An Information for
Estafa was filed against Villacencio before the Municipal Trial Court of Toledo City. After
trial, he was found guilty and sentenced to prision correccional as maximum, and to pay
ACMDC the amount of P1,086.72 for the misappropriated gasoline.
- Villacencio appealed his conviction to RTC Toledo City. For failure of the prosecution to
establish the guilt of Villacencio beyond reasonable doubt, the appellate court acquitted
him
- August 9, 1993 - Labor Arbiter Belarmino rendered a Decision dismissing Villacencio's
complaint of illegal dismissal for lack of merit.
- December 27, 1994 - NLRC reversed the Labor Arbiter's decision.
- Both parties filed their respective Motion for Reconsideration. ACMDC's motion assailed
the public respondent's decision for allegedly misapprehending the Labor Arbiter's
decision. On the other hand, Villacencio's motion prayed for reinstatement and award of
backwages in addition to separation pay.
- August 18, 1995 – NLRC rendered a Resolution granting Villacencio's prayer for
backwages and denying ACMDC's motion.
ISSUES
1. WON NLRC acted with grave abuse of discretion amounting to lack of jurisdiction in
reversing the Decision of the Labor Arbiter and holding Villavicencio’s dismissal illegal
2. WON there is willful breach of trust
HELD
1. NO
- 224 - Disini
- In illegal dismissal cases, the employer bears the burden of proof to show that the
dismissal is for a just or authorized cause. The charges against private respondent are:
(1) withdrawal of 192 liters of gasoline from company stocks for his private use; and (2)
knowingly allowing company personnel to work on company time in the assembly of a
privately-owned jeep. To prove the first charge, petitioner presented the Tenders
Logbook showing the unsigned entries of gasoline withdrawals allegedly made by
Villavicencio . Wilfredo Caba and Bienvenido Villacencio also testified that Villavicencio
refused to sign the entries when requested to do so.
(1) The evidence for the Villavicencio shows that during his more than twenty (20)-year
stint with petitioner, he received several awards and commendations for his contribution
in the areas of production, services and smooth operation of his department. The
management recognized his ability in handling his subordinates and in protecting
company assets in relation to his assigned duties. As a stickler for company rules, he
never held back on issuing warnings, admonitions and even suspensions against erring
subordinates. Consequently, he earned the ire of some of his subordinates. Among them
were Wilfredo Caba., June Climaco, Felix Gonzales and Bienvenido Villacencio. In sum,
Villavicencio’s position is that the logbook entries do not prove that he received the 192
liters of gasoline since his signature does not appear therein and that the witnesses
presented by the petitioner to explain the absence of his signature in the logbook entries
were motivated by vengeance since he offended their feelings when he disciplined them
and denied their requests for promotion.
- The Standard Guidelines of ACMDC require that all withdrawals of consumable items
and the borrowing of company materials and equipments should be recorded in the
Tender's Logbook by the tender on duty and should be signed by the withdrawing party.
The tender on duty is also required to immediately report to his supervisor any
discrepancy, error or irregularity. Needless to stress, the best evidence of any withdrawal
is the Tender's Logbook. In the case at bar, the gasoline withdrawal entries were made
by tenders Caba and Villacencio. Villavicencio’s signature does not appear in the
logbook, thus, there is no proof that he actually withdrew and received the gasoline.
(2) The Authorization to Work Overtime dated May 14, 1989 indicates that A. Saavedra,
A. Sepada and V. Rago were among those authorized to work overtime 'to assist in
emergency repair of busted 280 CIC Tailings Line' on that date. The same does not
show or affirm petitioner's contention that said workers were not actually authorized or
did not actually perform the required work but were at the Magdugo Field Office working
on private respondent's personal jeep. On the contrary, the Authorization to Work
Overtime appears regular on its face, as in fact, the same bears the imprimatur indicated
by the signature not only of private respondent alone but of three (3) other officers: the
Supervisor, J.V. Climaco, Jr., the Department Head, J. N. Tecson, and the Division
Manager, C. N. Sanchez. If ever there was an irregularity, these officers would likewise
have to be answerable to the company, instead of letting private respondent bear the
burden alone.
2. NO
- We reject the ruling of the Labor Arbiter that since Villavicencio neglected to inspect the
logbook and thus failed to discover the irregularity, he committed breach of trust.
Ratio Settled is the rule that under Article 283(c) of the Labor Code, the breach of trust
must be willful. 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. It should be genuine and not simulated; nor should
it appear as a mere afterthought to justify earlier action taken in bad faith or a subterfuge
for causes which are improper, illegal or unjustified. It has never been intended to afford
an occasion for abuse because of its subjective nature. Private respondent explained
that he failed to inspect the logbook for about two (2) months before its disappearance
because he was preoccupied with some emergency works brought about by a storm.
With the foregoing explanation, it cannot be said that Villavicencio’s failure was willful.
Disposition the assailed Decision and Resolution of public respondent NLRC are
AFFIRMED.
COVERAGE
FUJITSU COMPUTER PRODUCTS CORP V CA
[PAGE 204]
PROOF
RAMATEK PHILS V DE LOS REYES
474 SCRA 129
CARPIO; October 25, 2005
NATURE
Labor Law 1 A2010 - 225 - Disini
petition for review resolutions of CA (denying appeals for being filed out of time) LACK OF DAMAGE
FACTS
- Anelia de los Reyes was employed by Ramatek as a comptroller. Subsequently,
CADIZ V CA (PHILIPPINE COMMERCIAL BANK
Ramatek entered into a sub-contracting agreement with Sicar Micro-Electronics Corp, of
which Anelia’s husband Nestor was a major stockholder, treasurer, and COO. [EQUITABLE PCIBANK])
- Some time after, Sicar filed a civil action for damages against the Ramatek officials for 474 SCRA 232
the unilateral termination of their contract. Later, the chairman of the board of directors of TINGA; October 25, 2005
Ramatek informed Anelia that she should file a leave of absence while the case was
ongoing. Afterwards, the chairman emailed Anelia, requesting her to tender her voluntary
NATURE
resignation from the company. The email said in part: “IT IS WITH GREAT REGRET
Certiorari
THAT I MUST INFORM YOU OF MY REACTION TO THE SICAR AFFAIR. YOUR
CONNECTION IN THIS MATTER HAS CAUSED ME TO LOSE MY FAITH AND TRUST
FACTS
IN YOU. IT IS A MAJOR CONFLICT OF INTEREST SITUATION.”
- Cadiz, Bongkingki and Gloria were employed as signature verifier, bookkeeper, and
- In a letter dated a month later, the company required Anelia to explain within 72 hours
foreign currency denomination clerk/bookkeeper-reliever, respectively, in the main office
some of her allegedly questionable transactions. Such included awards of work bids to
branch (MOB) of Philippine Commercial International Bank (respondent bank).
bidders who did not give the lowest bids, purchase of equipment not at the lowest prices,
- Cadiz reserved S/A No. 1083-4 in July 1987 as reflected on respondent bank’s “new
and failure to submit company documents despite demand.
account register.”
- Anelia did not answer (she failed to claim the letter sent by Ramatek through registered
- Foreign denominated checks payable to other payees were diverted into the said
mail) nor did she appear in the administrative investigation. Ramatek, soon after,
account.
terminated Anelia’s employment for committing anomalies amounting to breach of trust
- The various deposit slips, covering the said checks, did not bear the machine validation
and confidence. Anelia filed for illegal suspension and illegal dismissal.
of any of the tellers-in-charge.
LA ruled in favor of Anelia. NLRC affirmed. Appeal to CA (by Ramatek) was denied for
- Petitioner Cadiz agreed to pay Alqueza the equivalent amount of $600.00 but it was
being filed out of time.
made to appear that Alfiscar paid the said amount.
- In view of these findings, petitioners were served with show-cause memoranda asking
ISSUES
them to explain the lapses.
1. WON the appeal was filed out of time
- Finding their explanations unsatisfactory, petitioners were terminated from employment.
2. WON dismissal based on loss of trust and confidence was valid
LA-adjudged that petitioners were illegally dismissed and ordered their reinstatement and
payment of backwages.
HELD
- NLRC-reversed
1. NO
- CA-affirmed reversal by NLRC
Ratio The latest amendment to Rule 65, ROC allows filing of an appeal within 60 days
after the notice of denial of a motion for reconsideration.
ISSUES
Reasoning
1. WON petitioners were validly dismissed (with just cause and were afforded due
- The amended rule now reads:
process)
- Sec. 4. When and where petition filed. – The petition shall be filed not later than sixty
2. WON petitioners should be relieved of any liability considering that respondent bank
(60) days from notice of the judgment, order or resolution. In case a motion for
did not suffer a pecuniary loss
reconsideration or new trial is timely filed, whether such motion is required or not, the
sixty (60) day period shall be counted from notice of the denial of the said motion.
HELD
- In the present case, the petition filed in the Court of Appeals was indeed filed beyond
1. YES
the 60-day period if computed from the time the notice of judgment was received and
- Petitioners had surreptitiously diverted funds deposited by depositors to S/A No. 1083-4
interrupted only by the filing of the motion for reconsideration. However, if the 60-day
which was under their control and disposition. 
period is reckoned from the receipt of the notice denying the motion for reconsideration,
- Their behavior in the course of the discharge of their duties is clearly malfeasant, and
as provided under Circular No. 56-2000, then the petition for certiorari was filed on time.
constitutes ground for their termination on account of just cause. 
2. NO
- respondent bank complied with the two-notice rule prescribed in Article 277(b) of the
Ratio That the dismissal was based on loss of trust and confidence was not sufficiently
Labor Code.  Petitioners were given all avenues to present their side and disprove the
proven by evidence. Ramatek’s evidence are insubstantial and inadequate to support a
allegations of respondent bank.  An informal meeting was held between the branch
conclusion that Anelia engaged in anomalous transactions. Since the company had the
manager of MOB, the three petitioners and Mr. Gener, the Vice-President of the PCIB
burden of proving the same, said dismissal cannot be held valid.
Employees Union. 
Reasoning
2. NO
- The SC upholds the findings of the Labor Arbiter that Anelia was able to prove that the
- In University of the East v. NLRC the court held that lack of material or pecuniary
charges against her were false and baseless.
damages would not in any way mitigate a person’s liability nor obliterate the loss of trust
“Despite the gravity of the charges, there is nothing competent in the records to
and confidence.
substantiate the same. Xxx Ramatek has the burden to prove just cause, but it failed
- In the case of Etcuban v. Sulpicio Lines, this Court definitively ruled that:
to undertake the burden. On the other hand, complainant explained to the satisfaction
. . . Whether or not the respondent bank was financially prejudiced is immaterial. Also,
of this Office that the charges against her are utterly false and baseless.”
what matters is not the amount involved, be it paltry or gargantuan; rather the
- Ramatek having failed to substantiate their charges against Anelia with competent and
fraudulent scheme in which the petitioner was involved, which constitutes a clear
credible evidence, this Office perceives that the primordial inspiration for her dismissal
betrayal of trust and confidence. . . .
was the filing by her husband of a civil suit against the company officials, a matter which
respondents cannot legally use against complainant to deprive her of her tenurial rights. 
This is because the suit was not filed by Anelia against Ramatek or its officials but by her D. COMMISSION OF A CRIME
husband.  There is no showing that the filing of the suit was a joint decision by the couple
or was instigated by complainant as to charge complainant with disloyalty or a conflict of
interests.  Moreover, it appears that Anelia’s husband was merely asserting and E. ANALOGOUS CAUSES
exercising his right to seek redress in the courts, a matter which Ramatek should not
begrudge Anelia about.  Finally, the case was amicably settled by the parties such that
there can be no rational justification for respondents to dismiss Anelia just because a QUARELSOME – BOSSY
plaintiff in the civil suit happened to be her husband.
- Loss of confidence as a ground for dismissal does not require proof beyond reasonable CATHEDRAL SCHOOL OF TECHNOLOGY V NLRC
doubt.  The law requires only that there be at least some basis to justify it. Thus, there
must be some evidence to substantiate the claim and form a legal basis for loss of (VALLEJERA)
confidence. The employer cannot exercise arbitrarily and without just cause the right to 214 SCRA 551
dismiss an employee for loss of trust and confidence. October 13, 1992
Disposition Resolutions of CA set aside. Decision of NLRC AFFIRMED.
Labor Law 1 A2010
NATURE
Petition for certiorari of a decision of NLRC.
FACTS
- Starting as an aspirant to the Congregation of the Religious of Virgin Mary (RVM),
VALLEJERA worked on a volunteer basis as a library aide of CST, an educational
institution run by the RVM sisters. Eventually she became a regular employee of CST,
again as library aide.
- It was around such regular employment, however, that trouble developed. The sisters
began receiving complaints from students and employees about VALLEJERA's difficult
personality and sour disposition at work. On one occasion, VALLEJERA was summoned
to the Office of the Directress by SISTER APOLINARIA, shortly after the resignation of
the school's Chief Librarian on account of irreconcilable differences with VALLEJERA, for
the purpose of clarifying the matter. SR APOLINARIA also informed VALLEJERA of the
negative reports received by her office regarding the latter's frictional working relationship
with co-workers and students and reminded VALLEJERA about the proper behavior in
the interest of peace and harmony in the school library. VALLEJERA resented the
observations about her actuations and was completely unreceptive to the advice given by
her superior. She reacted violently to SR APOLINARIA and angrily offered to resign,
repeatedly saying, "OK, I will resign. I will resign." Thereafter, without waiting to be
dismissed from the meeting, she stormed out of the office.
- On separate occasions thereafter, CST and SR APOLINARIA (PETITIONERS, for
brevity) sent people to convince VALLEJERA to settle her differences with the former.
VALLEJERA remained adamant in her refusal to submit to authority. Eventually, SR
APOLINARIA, by letter, informed VALLEJERA to look for another job as the school had
decided to accept her resignation. VALLEJERA filed a complaint for illegal dismissal. An
issue arose as to whether there was lawful cause for her dismissal.
ISSUE
WON there was there lawful cause for VALLEJERA’s dismissal
HELD
YES
Ratio The reason for which VALLEJERA’s services were terminated, namely, her
unreasonable behavior and unpleasant deportment in dealing with the people she closely
works with, is analogous to the other "just causes" enumerated under ART.282, Labor
Code.
- PETITIONERS' averments on VALLEJERA’s disagreeable character as "quarrelsome,
bossy, unreasonable and very difficult to deal with," are supported by testimonies of
several co-employees and students of CST. In fact, her overbearing personality caused
the chief librarian to resign, Furthermore, the complaints about her objectionable
behavior were confirmed by her reproachable actuations during her meeting with SR
APOLINARIA, when VALLEJERA, upon being advised of the need to improve her
working relations with others, obstreperously reacted and unceremoniously walked out
on her superior, and arrogantly refused to subsequently clear up matters or to apologize
therefor. To make matters worse, she ignored the persons sent by PETITIONERS to
intervene in an effort to bring the matter to a peaceful resolution. The conduct she
exhibited on that occasion smacks of sheer disrespect and defiance of authority and
assumes the proportion of serious misconduct or insubordination, any of which
constitutes just cause for dismissal from employment.
- As CST is run by a religious order, it is but expected that good behavior and proper
department, especially among the ranks of its own employees, are major considerations
in the fulfillment of its mission. Under the circumstances, the sisters cannot be faulted for
deciding to terminate VALLEJERA whose presence "has become more a burden rather
than a joy" and had proved to be disruptive of the harmonious atmosphere of the school.
Disposition NLRC decision that VALLEJERA was illegally dismissed, SET ASIDE.
HEAVYLIFT MANILA INC V CA (GALAY, NLRC)
473 SCRA 541
QUISUMBING; October 20, 2005
NATURE
A petition for certiorari
FACTS
- Petitioner Heavylift, a maritime agency, thru a letter signed by Josephine Evangelio,
Admin. and Finance Manager of Heavylift, informed respondent Ma. Dottie Galay,
Heavylift Insurance and Provisions Assistant, of her low performance rating and the
negative feedback from her team members regarding her work attitude. The letter also
notified her that she was being relieved of her other functions except the development of
the new Access program.
- Subsequently, Galay was terminated for alleged loss of confidence.  NATURE
- 226 - Disini
- Thereafter, she filed with the Labor Arbiter a complaint for illegal dismissal and
nonpayment of service incentive leave and 13th month pay against petitioners.
- Petitioners alleged that Galay had an attitude problem and did not get along with her
co-employees for which she was constantly warned to improve.  Petitioners aver that
Galay’s attitude resulted to the decline in the company’s efficiency and productivity. 
- The Labor Arbiter found that Galay was illegally terminated for petitioners’ failure to
prove that she violated any company regulation, and for failure to give the proper notice
as required by law.
- Petitioner appealed to the NLRC.  The latter, however, denied the appeal for lack of
merit and affirmed the decision of the Labor Arbiter.
- CA denied the motion for lack of justifying circumstances, and because the attached
board resolution was issued after the petition was filed (petitioners failed to: state the full
names and actual addresses of all the petitioners; attach the copies of all pleadings and
supporting documents; properly verify the petition; and certify against forum-shopping)
         
ISSUES
1. WON petitioners were denied due process with the CA’s dismissal of the petition on
technical grounds
2. WON “attitude problem” is a valid ground for the termination of an employee.
3. If issue 2 is in the affirmative, WON this was sufficiently proved
4. WON the procedural requirements for an effectual dismissal were present
5. WON the awards of service incentive pay and 13th month pay were proper
HELD
1. YES
Ratio The Rules of Court are designed for the proper and prompt disposition of cases.  In
not a few instances, we relaxed the rigid application of the rules to afford the parties
opportunity to fully ventilate their cases on the merits.  In that way, the ends of justice
would be better served. Additionally, verification of a pleading is a formal, not a
jurisdictional requisite.  It is intended to secure an assurance that what are alleged in the
pleading are true and correct and not the product of the imagination or a matter of
speculation, and that the pleading is filed in good faith.
2. YES
Ratio An employee who cannot get along with his co-employees is detrimental to the
company for he can upset and strain the working environment.  Without the necessary
teamwork and synergy, the organization cannot function well.  Thus, management has
the prerogative to take the necessary action to correct the situation and protect its
organization.  When personal differences between employees and management affect
the work environment, the peace of the company is affected.  Thus, an employee’s
attitude problem is a valid ground for his termination. It is a situation analogous to loss of
trust and confidence that must be duly proved by the employer.  Similarly, compliance
with the twin requirement of notice and hearing must also be proven by the employer.
3. NO
Ratio We are not convinced that in the present case, petitioners have shown sufficiently
clear and convincing evidence to justify Galay’s termination. Though they are correct in
saying that in this case, proof beyond reasonable doubt is not required, still there must
be substantial evidence to support the termination on the ground of attitude. The mere
mention of negative feedback from her team members, and the letter, are not proof of her
attitude problem.  Likewise, her failure to refute petitioners’ allegations of her negative
attitude does not amount to admission.  Technical rules of procedure are not binding in
labor cases. Besides, the burden of proof is not on the employee but on the employer
who must affirmatively show adequate evidence that the dismissal was for justifiable
cause.
4. NO
Ratio The letter did not constitute the required notice. It did not inform her of the specific
acts complained of and their corresponding penalty. Additionally, the letter never gave
respondent Galay an opportunity to explain herself, hence denying her due process.
5. YES
Ratio Apropos the award of service incentive pay and 13th month pay, we find that they
were properly prayed for by Galay.  These were subsumed in the complaint and under
the position paper’s general prayer of “such other relief as are just and equitable under
the law”. 
Disposition Decision of the Labor Arbiter and the Resolution of the NLRC are hereby
affirmed.
 
PROBABLE CAUSE
STANDARD ELECTRIC MANUFACTURING CORP V
STANDARD ELECTRIC EMPLOYEES UNION
CALLEJO; August 25, 2005
Labor Law 1 A2010
Petition for review on certiorari to review the CA decision annulling the NLRC Resolution
which affirmed the LA decision
FACTS
- Rogelio Javier, a radio machine operator, employee of Standard Electric Manufacturing
Corp. (SEMC) and member of the Standard Electric Employees Union (Union), failed to
report for work and failed to report the reason for his absence. This failure to report for
work and failure to report the reason therefor happened several times until he was later
found to have been arrested and detained for the charge of rape.
- Javier informed SEMC (through a letter and through his counsel) that he was detained
for the charge of rape which is why he failed to report for work. He requested that SEMC
defer the implementation of its intention to dismiss him. The SEMC denied his request
and issued a Memorandum terminating his employment for having been absent without
leave (AWOL) for more than 15 days and for committing rape.
- Javier, after the RTC granted his demurrer to evidence and ordered his release from
jail, reported for work but the SEMC refused to accept him back. A grievance meeting
between the Union, Javier and the SEMC was later held, but the SEMC refused to re-
admit Javier. The Union and Javier then filed a complaint for illegal dismissal against
SEMC before the NLRC, alleging that since his detention for rape was non-existent, the
termination of his employment was illegal. SEMC averred that Javier’s prolonged
absences caused irreparable damage to its orderly operation and that it could not afford
to wait for Javier’s indefinite return from detention, if at all.
- The LA dismissed the complaint but ordered SEMC to pay Javier P71, 760 as
separation pay. On appeal, the NLRC affirmed the LA’s ruling (held that Javier was given
a chance to explain his side), and later denied a subsequent MFR. Javier and the Union
then filed a petition for certiorari with the CA, which reversed the findings of both the LA
and the NLRC and ordered the reinstatement of Javier to his former position. The
appellate court cited Magtoto v NLRC and City Govt of Makati v Civil Service as
precedents and declared that it was not Javier’s intention to abandon his job; his
incarceration reasonably justified his failure to report for work and negated the theory that
he was on AWOL. The CA also held that Javier could not be terminated on the ground of
commission of a crime, as he was acquitted of the rape charges. Hence, despite the fact
that Javier was allegedly afforded the opportunity to explain his side (the basis of the LA
and NLRC decisions), the same was unnecessary since there was no just or authorized
cause for the dismissal. The MFR by SEMC was denied by the CA, hence, this recourse.
ISSUE
WON the CA erred in holding that the termination was illegal
HELD
NO
- The CA was correct in holding that the termination was illegal and correctly applied the
Magtoto case.
Ratio Separation from employment founded on a false or non-existent cause is illegal
Reasoning
- In the Magtoto case, Alejandro JONAS Magtoto was arrested. He was charged with
violation of Arts 136 and 138 of the RPC. Although Magtoto informed his employer and
pleaded that he be considered “on leave” until released, his employer denied the request.
About seven months after his arrest, Magtoto was released after the City Fiscal
dismissed the criminal charges for lack of evidence. On the same date, he informed his
employer of his intent to start working again but the employer rejected the offer. In ruling
that his termination was illegal, the SC ruled:
The employer tries to distance itself from the detention by stressing that the petitioner
was dismissed due to prolonged absence. However, Mr. Magtoto could not report for
work because he was in a prison cell. The detention cannot be divorced from
prolonged absence. One caused the other. Since the causes for the detention, which
in turn gave the employer a ground to dismiss the petitioner, proved to be non-
existent, we rule that the termination was illegal and reinstatement is warranted.
- Respondent Javier was dismissed by the petitioner for: (a) being AWOL from July 31,
1995 up to January 30, 1996; and (b) committing rape. However, on demurrer to
evidence, Javier was acquitted of the charge. With Javier’s acquittal, the cause of his
dismissal from his employment turned out to be non-existent.
- A non-existent cause for dismissal was explained in Pepito v. Secretary of Labor (96
SCRA 454):
“... A distinction, however, should be made between a dismissal without cause and a
dismissal for a false or non-existent cause. In the former, it is the intention of the
employer to dismiss his employee for no cause whatsoever, in which case the
Termination Pay Law would apply. In the latter case, the employer does not intend to
dismiss the employee but for a specific cause which turns out to be false or non-
existent. Hence, absent the reason which gave rise to his separation from
employment, there is no intention on the part of the employer to dismiss the employee
concerned. Consequently, reinstatement is in order. And this is the situation here.
Petitioner was separated because of his alleged involvement in the pilferage in
question. However, he was absolved from any responsibility therefor by the court.
The cause for his dismissal having been proved non-existent or false, his
- 227 - Disini
reinstatement is warranted. It would be unjust and unreasonable for the Company to
dismiss petitioner after the latter had proven himself innocent of the cause for which
he was dismissed.”
- The petitioner acted with precipitate haste in terminating respondent Javier’s
employment on the ground that he had raped the complainant therein. Respondent
Javier had yet to be tried for the said charge. In fine, the petitioner prejudged him, and
preempted the ruling of the RTC. Petitioner had, in effect, adjudged Javier guilty without
due process of law. While it may be true that after the preliminary investigation of the
complaint, probable cause for rape was found and respondent Javier had to be detained,
these cannot be made as legal bases for the immediate termination of his employment.
Disposition petition DISMISSED for lack of merit. CA decision is AFFIRMED with
MODIFICATION. Petitioner is ordered to reinstate Rogelio Javier to his former position
or, if no longer possible, a substantially equivalent position without loss of seniority rights
and other privileges appurtenant thereto, with full backwages from the time it refused to
allow his reinstatement on May 24, 1996 until actually reinstated; or, if reinstatement is
no longer feasible, to pay him separation pay equivalent to one (1) month salary for every
year of service.
CONVICTION – MORAL TURPITUDE
IRRI V NLRC (MICOSA)
221 SCRA 760
NOCON; May 12, 1993
NATURE
Petition for certiorari
FACTS
- International Rice Research Institute (IRRI) is an international organization recognized
by the Philippine government and accorded privileges, rights and immunities normally
granted to organizations of universal character. In 1977, it hired Nestor Micosa, who
thereby became bound by IRRI Employment Policy and Regulations, the Miscellaneous
Provisions of which states:
"C. Conviction and Previous Separation.
XXX
'2. An employer who has been convicted of a (sic) criminal offense involving moral
turpitude may be dismissed from the service.'" 
- On February 6, 1987, Micosa stabbed to death Reynaldo Ortega inside a beer house in
Laguna. He was accused of homicide. During the pendency of the criminal case, Micosa
voluntarily applied for inclusion in IRRI's Special Separation Program. However, IRRI's
Director General expressed deep regret that he had to disapprove Micosa's application
for separation because of IRRI's desire to retain the skills and talents that persons like
him possess.
- Trial court found Micosa guilty of homicide, but appreciated in his favor the mitigating
circumstances of incomplete self-defense and voluntary surrender, and no aggravating
circumstance. Subsequently, Micosa applied for suspension of his sentence under the
Probation Law.
- On February 8, 1990, IRRI's Director General personally wrote Micosa that his
appointment as laborer was confirmed, making him a regular core employee whose
appointment was for an indefinite period and who "may not be terminated except for
justifiable causes as defined by the pertinent provisions of the Philippine Labor Code." 
- On March 30, 1990, IRRI’s HR head wrote Micosa urging him to resign from
employment in view of his conviction in the case for homicide.
- Laguna Parole and Probation Office No. II wrote IRRI informing the latter that said office
found Micosa's application for probation meritorious as he was evaluated "to possess
desirable social antecedents in his life." 
- Micosa informed IRRI that he had no intention of resigning from his job.
- IRRI’s HR head replied to Micosa's letter insisting that the crime for which he was
convicted involves moral turpitude and informing him that he is thereby charged of
violating Section I-AA, Par VII, C-2 of the Institute's Personnel Manual (quoted above).
- Micosa explained to IRRI that the slaying of Ortega arose out of his act of defending
himself from unlawful aggression; that his conviction did not involve moral turpitude and
that he opted not to appeal his conviction so that he could avail of the benefits of
probation, which the trial court granted to him.
- Micosa sought the assistance of IRRI's Grievance Committee who recommended to the
Director General, his continued employment. However, IRRI issued a notice to Micosa
that the latter's employment was to terminate effective May 25, 1990.
- Micosa then filed a case for illegal dismissal. Labor Arbiter found the termination was
illegal and ordered his reinstatement with full backwages from the date of his dismissal
up to actual reinstatement. NLRC affirmed decision.
Petitioner’s claims:
> Micosa's conviction of homicide, which is a crime involving moral turpitude, is a valid
ground for his dismissal under the Miscellaneous Provisions of IRRI's Employment Policy
Labor Law 1 A2010
Regulations. IRRI has the prerogative to issue rules and regulations including those
concerning employee discipline and that its employees are bound by the aforesaid
personnel manual
- While IRRI admits that Micosa's interests — in his employment and means of livelihood
— are adversely affected; that a convict should not be discriminated against in society
and that he should be given the same opportunities as those granted to other fellow
citizens, it claims that one's right is deemed superior than that of another. It believes that
it has a superior right to maintain a very high degree or standard not only to forestall any
internal problem hampering operations but also to prevent even the smallest possibility
that said problems could occur considering that it is an international organization with
concomitant obligation to the host country to avoid creating disturbance or give occasion
for such disturbance.
ISSUE
WON a conviction of a crime involving moral turpitude is a ground for dismissal from
employment
HELD
NO, it is not one of the causes enumerated in the Labor Code.
- Article 282 of the Labor Code enumerates the just causes wherein an employer may
terminate an employment. Conviction of a crime involving moral turpitude is not one of
these justifiable causes. Article 282 (c) or (d) may not be applied by analogy. Analogous
causes must have an element similar to those found in the specific just cause
enumerated under Article 282.
- Under Article 282 (c) fraud or willful breach by the employees of the trust reposed in
him by his employer or duly authorized representative refers to any fault or culpability on
the part of the employee in the discharge of his duty rendering him absolutely unworthy
of the trust and confidence demanded by his position. The breach of trust must be
related to the performance of the employee's function.
- Commission of a crime by the employee under Article 282 (d) refers to an offense
against the person of his employer or any immediate member of his family or his duly
authorized representative.
- The commission of the crime of homicide was outside the perimeter of the IRRI
complex, thus, the conviction of Micosa for homicide was not work-related, his misdeed
having no relation to his position as laborer and was not directed or committed against
IRRI or its authorized agent.
- IRRI failed to show how the dismissal of Micosa would be in consideration of the safety
and welfare of its employees, its reputation and standing in the community and its special
obligations to its host country. Micosa's service record is unblemished. IRRI's Director
General even expressed his confidence in him when he disapproved his application for
special separation and decided to promote him to the status of a regular core employee,
with the commensurate increases in benefits. In addition, the employees at IRRI's
Grievance Committee interceded favorably in behalf of Micosa when they recommended
his retention despite his conviction showing that the very employees which IRRI sought
to protect did not believe that they were placing their very own lives in danger with
Micosa's retention.
- Likewise, Micosa, although found guilty as charged, was also found worthy of probation.
This means that there existed no undue risk that Micosa will commit another crime during
his period of probation and that his being placed on probation would be to the benefit of
society as a whole.
- Even under IRRI's Employment Policy and Regulations, the dismissal of Micosa on the
ground of his conviction for homicide cannot be sustained. The miscellaneous provisions
of said personnel manual mentions of conviction of a crime involving moral turpitude as a
ground for dismissal. IRRI simply assumed that conviction of the crime of homicide is
conviction of a crime involving moral turpitude.
- Moral turpitude has been defined in Can v. Galing citing In Re Basa and Tak Ng v.
Republic as everything which is done contrary to justice, modesty, or good morals; an act
of baseness, vileness or depravity in the private and social duties which a man owes his
fellowmen, or to society in general, contrary to justice, honesty, modesty or good morals.
As to what crime involves moral turpitude, is for the Supreme Court to determine. The
conclusion of IRRI that conviction of the crime of homicide involves moral turpitude is
unwarranted considering that the said crime which resulted from an act of incomplete
self-defense from an unlawful aggression by the victim has not been so classified as
involving moral turpitude.
- The facts of the incident show that Micosa's intention was not to slay the victim but only
to defend his person. The appreciation in his favor of the mitigating circumstances of self-
defense and voluntary surrender, plus the total absence of any aggravating circumstance
demonstrate that Micosa's character and intentions were not inherently vile, immoral or
unjust.
- Corollary issue: WON conviction of homicide involves moral turpitude
Homicide may or may not involve moral turpitude depending on the degree of the crime. 
Moral turpitude is not involved in every criminal act and is not shown by every known and
intentional violation of statute, but whether any particular conviction involves moral
turpitude may be a question of fact and frequently depends on all the surrounding
circumstances.  Moral turpitude is somewhat a vague and indefinite term, the meaning of
- 228 - Disini
which must be left to the process of judicial inclusion or exclusion as the cases are
reached.
Disposition petition is DISMISSED for lack of merit.
OANIA V NLRC (PHILEX MINING)
244 SCRA 668
ROMERO; June 1, 1995
FACTS
- Alfredo Oania, a welder, and Aurelio Caluza and Santiago Biay, miners, were employed
by Philex Mining Corporation (Philex) in Benguet. They were accused of mauling their
co-worker, Felipe Malong, at the gasoline area within the company compound.
- Philex conducted investigation regarding the incident. After a formal hearing wherein
petitioners were duly notified and accorded the opportunity to be heard, the company
arrived at the decision to terminate their employment on the ground that petitioners
violated Art I, par 1 of the company rules and regulations 2
- Malong instituted a criminal complaint (frustrated murder) vs. petitioners. But later,
Malong desisted from pursuing the criminal case because he said his conscience
bothered him.
- With Malong's affidavit of desistance, petitioners sought reconsideration of their
dismissal from employment. Philex refused. Petitioners filed complaints for illegal
dismissal before the labor arbiter.
- Labor Arbiter: The termination of employment of petitioners was not justified was based
on findings that there was no proof that the mauling of Malong was "caused by a dispute
involving their employment" with private respondent (which, the Labor Arbiter believed,
was the only dispute clearly prohibited by the company rule).
- Petitioners had been illegally dismissed from employment. Philex to reinstate them to
their former positions or substantially equivalent positions and to pay each of them one
year's backwages.
- NLRC: Reversed. “there is prima facie evidence that the complainants injured physically
a co- employee under circumstance(s) which constitute an infraction of specific company
rules; and that the respondent had valid cause to terminate their employment."
ISSUES
1. WON the mauling comes under Art 1 of the company rules and regulations
2. WON there was illegal dismissal
HELD
1. YES
- The provision in question obviously covers situations where any company employee
inflicts or attempts to inflict physical harm or injury upon any person. There are two
separate instances contemplated here. The first part of the sentence conceives of a
situation wherein such injury was done "on the job site on company time or property,"
regardless of the reason. What is material is the venue. The second half of the sentence
deals with a situation where an employee attempts to inflict or actually inflicts bodily
injury upon another "anywhere at anytime," regardless of the venue, as long as it arose
in connection with a dispute "involving one's employment." The site matters not; what is
crucial in the subject matter, i.e. it should have something to do with the employee's job.
Clearly, the commas in the sentence may be dispensed with without sacrificing the intent
behind the provision.
2. YES
- Violation of a company rule prohibiting the infliction of harm or physical injury against
any person under the particular circumstances provided for in the same rule may be
deemed analogous to "serious misconduct" stated in Art. 282 (a). (H)owever, there is no
substantial evidence definitely pointing to petitioners as the perpetrators of the mauling of
Malong. What is an established fact is that, after investigation, private respondent
dismissed them and, thereafter, a criminal complaint was filed against petitioners. It is of
record that Malong desisted from suing the perpetrators before the regular courts. In
criminal cases, an affidavit of desistance may create serious doubts as to be the liability
of the accused
- On the issue of the legality of the dismissal, two requisites must concur to constitute a
valid dismissal: (a) the dismissal must be for any of the causes expressed in Art. 282 of
the Labor Code, and (2) the employee must be accorded due process, basic of which are
the opportunity to be heard and to defend himself.
LIM V NLRC (PEPSI-COLA FAR EAST TRADE DEV’T)
259 SCRA 485
DAVIDE JR; July 26, 1996
2
"Inflicting or attempting to inflict bodily injury on the job-site on company time or property for any reason, or
attempting to inflict or inflicting bodily injury anywhere at anytime, in any dispute involving one's employment”
Labor Law 1 A2010
NATURE
Petition for certiorari
FACTS
- Pepsi is a manufacturer of concentrates sold to Pepsi-Cola Bottlers Co. Inc. Petitioner
Sixta Lim had been employed with the Pepsi Group since January 1, 1981, working as a
secretary for Pepsi Bottling Co. Pepsi employed Lim as a secretary on June 15, 1983.
- At the time of her dismissal she was a staff accountant.
> She assisted and worked closely with the Plant Accountant to carry out the
accounting department's tasks necessary to ensure an accurate, timely, and
coordinated compilation of data for each accounting transaction.
> Her work involved cost accounting production, cost accounting financial reporting,
payroll reporting, statutory reporting and preparation of daily trade accounts
receivable reports, petty cash fund custodianship, and check preparation.
- Pepsi regularly evaluated its employees' performance using following ratings: Marginal
(obviously well below the acceptable level for the position), Fair Below (shows noticeable
need for improvement), Commendable (fully meeting the performance requirements of
the position), Superior (noticeably better than required performance) and Distinguished
Outstanding (obviously far above an acceptable job).
- Lim’s overall performance appraisals rated as follows: (a) "S" (Superior) as of May 1,
1984; (b) "C" (Commendable) for the period for December 1, 1987 to August 31,1988;
and (c) "U' (C minus), quantified as 81.10% for the period from September 1, 1988 to
May 31, 1989.
- In 1989, Pepsi changed its rating scale to: Significantly Above Target (SA, exceeds
position requirements by a wide margin; exceptional), Above Target (AT, usually exceeds
position requirements), On Target (OT, meets and sometimes exceeds position
requirements), Below Target (BT, meets some or many but not all position requirements)
and Significantly Below Target (SB, below position requirements by a wide margin;
unacceptable).
- July 1, 1989 to December 31, 1989 – Lim received an overall rating of BT.
> This was heavily influenced by her ratings in production reporting which made up
40% of her final rating. Her supervisor noted several discrepancies which could have
been avoided had Sixta been more diligent in her work.
> In cost accounting and financial reporting (20% of the rating), Lim also was given a
BT. Her supervisor noted that she did not seem to be aware of the importance of the
reports she issued and her work always needed to be reviewed. She also needed a
systematic workplan.
> For the remaining 60%, she was given an OT. Overall, she was given a BT.
- Lim questioned the change in the rating style as well as the ratings and appraisals
given to her by her supervisors. She asserted her previous positive ratings and
expressed disbelief over the sudden decline of her ratings. Pepsi conducted another
evaluation and Lim’s overall rating was a BT. Following that evaluation, she was given a
report which outlined the areas where she could improve.
- Lim then wrote Mr. Mihara of Pepsi Co. in Japan and Mihara replied, saying that he
would discuss the matters with her upon arrival in the Philippines. Pepsi, however, did
not wait for Mihara and offered to pay Lim’s termination benefits if she resigned.
- Lim refused to do so and on May 6, 1991, she was informed that she was terminated as
an employee of Pepsi. On May 14, 1991, she filed a complaint for illegal dismissal with
the Labor Arbiter. The Labor Arbiter decided matters in her favor, ordering Pepsi to
reinstate Lim to her former position or to pay her separation pay, 13 th month and
backwages.
- The NLRC reversed the Labor Arbiter’s ruling.
Petitioners’ Claim
> Lim’s BT performance appraisal was sufficient ground to dismiss her under Article 282
(b) of the Labor Code.
Respondents’ Comments
> Lim argues her alleged inefficiency was not among the just causes prescribed by law
for the dismissal of an employee and even assuming that such dismissal was justified,
she was still entitled to separation benefits of P268,000.00 in accordance with company
policy plus damages and attorney's fees.
ISSUE
WON Lim’s alleged “gross inefficiency” was an adequate ground for her dismissal
HELD
NO
Ratio "Gross inefficiency" is closely related to "gross neglect," for both involve specific
acts of omission on the part of the employee resulting in damage to the employer or to
his business. The Court has ruled that failure to observe prescribed standards of work,
or to fulfill reasonable work assignments due to inefficiency may constitute just cause for
dismissal.
Reasoning
- Pepsi had not characterized as "gross inefficiency" whatever failures, shortcomings, or
deficiencies may have been attributable to the petitioner.
- 229 - Disini
- Lim obtained an unfavorable rating, but not to the extent, under the company's
standards, to warrant even a probationary measure which is given to the lowest rating of
Significantly Below Target (SB).
- In Pepsi's brochure entitled Managing Performance for the 90's, a BT rating does not
merit dismissal from the service; as a matter of fact, the lower rating - Significantly Below
Target (SB) - is not even a ground for termination of employment, but may only justify
putting the employee "on probation, telling the said employee that improvement is
necessary.
- If the company truly found the petitioner's "inefficiency" to be of such a gross character,
then it should have rated her even lower than SB, since the latter only requires that the
employee be put on probation.
- Pepsi also violated the petitioner's right to due process. Prior to the issuance of her
termination letter, Pepsi never called Lim’s attention to any alleged "gross inefficiency" on
her part. Likewise, she was never warned of possible disciplinary action due to any
alleged "gross inefficiency." The evaluation report merely indicated her areas for
improvement.
Disposition the instant petition is GRANTED. Private Respondent Pepsi-Cola Far East
Trade Development Co., Inc. is ordered to reinstate petitioner Sixta C. Lim to her position
as Staff Accountant without loss of seniority rights, and to pay her (a) backwages from
the time she was illegally dismissed until she was effectively reinstated, less whatever
she may have received through payroll reinstatement and whatever amount she may
have earned from employment elsewhere during the period of her illegal dismissal, and
(b) other monetary benefits that may be due her from the date of her illegal dismissal
until such effective reinstatement.
F. OTHER – JUST CAUSES CLAIMED BY EMPLOYER
1. ABANDONMENT
DEFINED
NUEVA ECIJA ELECTRIC COOP (NEECO) II V NLRC
461 SCRA 169
CHICO-NAZARIO; June 23, 2005
NATURE
Petition for review
FACTS
- Petitioner NEECO II staunchly asserts that since its new GM assumed office on 01
March 1995, the GM never saw private respondent Eduardo Cairlan report for work
prompting the former to issue a memorandum dated 22 November 1995, which required
private respondent to explain in writing why he was not reporting for duty.  Private
respondent was likewise directed in the said memo to report to its main office at
Calipahan, Talavera, Nueva Ecija.  For failure of the private respondent to comply with
the said memorandum, Mr. dela Cruz directed a certain “Mr. Marcelo” to conduct an
investigation on the whereabouts of the petitioner.  It was then that NEECO II uncovered
that private respondent was at that time already working with the Provincial Government
of Nueva Ecija as driver allegedly under an assumed name of “Eduardo Caimay.”  For
these reasons, petitioner contended that it was left with no other alternative but to
terminate private respondent’s services.
- Petitioner’s GM terminated private respondent’s services on ground of abandonment.
Immediately thereafter, private respondent talked with the GM regarding this matter and
the latter promised him that the issue would be brought to the attention of NEECO’s
Board of Directors for appropriate action. But nothing came out of the GM’s promise
prompting private respondent to institute a Complaint for illegal dismissal with prayer for
reinstatement and payment of backwages since the NEECO’s Board of Directors did not
act upon his termination.
- The Labor Arbiter rendered a Decision declaring that private respondent was illegally
dismissed on the following grounds: First, petitioner’s assertion that it required private
respondent to explain in writing why he was not reporting for duty as driver assigned at
Quezon Service Center merited scant consideration since a copy of the alleged
memorandum dated 22 November 1995, purportedly as its Annex “A,” was nowhere to
be found in the record of the case.  Second, petitioner’s contention that private
respondent Cairlan was later discovered to be working with the Provincial Government of
Nueva Ecija under an assumed name of Eduardo Caimay remained unsubstantiated as
petitioner failed to adduce independent evidence that said “Eduardo Caimay” and private
respondent Eduardo Cairlan are one and the same person.  Third, the Labor Arbiter held
that the private respondent was denied his right to due process since the letter of
termination dated 15 January 1996 stated that said termination is retroactively effected
on 1 January 1996 .  Finally, according to the Labor Arbiter, petitioner failed to
Labor Law 1 A2010
corroborate its claim that private respondent was guilty of dereliction of duty.
Public respondent NLRC dismissed for lack of merit. The NLRC affirmed in toto the
decision of Labor Arbiter. Hence this petition.
ISSUES
1. WON petitioner was accorded due process
2. WON petitioner is guilty of illegally dismissing private respondent
HELD
1. YES
Ratio The rules of evidence prevailing in courts of law or equity shall not be controlling
and it is the spirit and intention of this Code that the Commission and its members and
the Labor Arbiters shall use every and all reasonable means to ascertain the facts in
each case speedily and objectively and without regard to technicalities of law or
procedure, all in the interest of due process.
Reasoning
- The Labor Arbiter shall motu proprio determine whether there is need for a formal trial
or hearing.
- Under Section 4, Rule V of the New Rules of Procedure of the NLRC, the Labor Arbiter
is given the latitude to determine the necessity for a formal hearing or investigation, once
the position papers and other documentary evidence of the parties have been submitted
before him.  The parties may ask for a hearing but such hearing is not a matter of right of
the parties.  The Labor Arbiter, in the exercise of his discretion, may deny such request
and proceed to decide the case on the basis of the position papers and other documents
brought before him without resorting to technical rules of evidence as observed in regular
courts of justice.
- In the present case, a scrupulous study of the records reveals that the Labor Arbiter did
not abuse his discretion conferred upon him by the Rules in not conducting a formal
hearing.  On this, the findings of the Court of Appeals, consistent with that of the NLRC
and the Labor Arbiter, ought to be sustained.
2. YES
Ratio Abandonment3 is the deliberate and unjustified refusal of an employee to resume
his employment; it is a form of neglect of duty; hence, a just cause for termination of
employment by the employer under Article 282 of the Labor Code, which enumerates the
just causes for termination by the employer: i.e., (a) serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or the latter’s
representative in connection with the employee’s work; (b) gross and habitual neglect by
the employee of his duties; (c) fraud or willful breach by the employee of the trust
reposed in him by his employer or his duly authorized representative; (d) commission of
a crime or offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representative; and (e) other analogous
causes.
Reasoning
- Private respondent’s alleged abandonment of work through his employment with the
Provincial Government of Nueva Ecija was not clearly established and proven. The
evidence submitted by petitioner to buttress its allegation that private respondent
abandoned his work consists merely of indexes of payments to employees under the
name Eduardo Caimay without any further evidence showing that Eduardo Caimay and
private respondent Eduardo Cairlan is one and the same person.   The best evidence
that could have established the allegation that Eduardo Caimay and private respondent
Eduardo Cairlan is one and the same person is Eduardo Caimay’s Personal Data Sheet
which definitely would have the pertinent personal information about him and a picture
that would identify him and not a testimony of a representative from the Provincial
Government of Nueva Ecija, as adverted to by petitioner to justify its motion for a trial
type hearing.
- Worse, private respondent received his notice of termination only on 15 January 1996
which termination is effective as early as 01 January 1996, all in gross violation of the
requirements provided for by law.
- Further negating petitioner’s contention of abandonment, as noted by the Labor Arbiter,
is private respondent’s letter dated 04 March 1996 addressed to Mr. Danilo dela Cruz
reiterating the former’s plea for reconsideration of his dismissal. This letter depicts private
respondent’s fervor and yearning to continue working with petitioner – the very antithesis
of abandonment
Disposition AFFIRMED.
GABUAY V OVERSEA PAPER SUPPLY INC
436 SCRA 514
CALLEJO; August 13, 2004
NATURE
3 - Petitioner AURELIO FUERTE was originally employed by private respondent
The elements of abandonment are: (a) failure to report for work or absence without valid or justifiable reason; and (b)
a clear intention to sever the employer-employee relationship, with the second element as the more determinative
factor manifested by some overt acts (Tomas Lao Construction v. NLRC, 278 SCRA 716 [1997]).
- 230 - Disini
Petition for review of the decision of the Court of Appeals
FACTS
- The respondent Oversea Paper Supply, Inc. is a domestic corporation engaged in the
business of selling paper products. On different dates, the respondent corporation hired
the petitioners for the positions machine operators, driver and helpers.
- On April 7, 1999, the respondent corporation’s sales and operations manager, James
C. Tan, required all employees to fill up and submit their bio-data not later than April 17,
1999 so that their 201 files could be updated. All the employees complied except for the
petitioners. Petitioners William Lacambra and Rodolfo Gabuay even failed to report for
work starting April 19 and 21, 1999, respectively.
- Thereafter, the respondent corporation required petitioners to explain why they refused
to submit their updated bio-data and requiring each of them to (a) return to work, and (b)
explain why they were absent. Despite the receipt of such notices, the petitioners, except
for Reynante Lacambra, did not reoport back to work.
- On April 21, 1999, petitioner Rodolfo Gabuay filed a complaint for illegal dismissal,
payment of separation pay, accumulated vacation and sick leave, and reinstatement with
full backwages before the arbitration branch of the National Labor Relations Commission
(NLRC). On April 26, 1999, petitioners William Lacambra, Reynante Lacambra, Rolando
Vicente and Tomacito Tabuli filed a similar complaint.
- The petitioners alleged that they were barred from reporting for work after they refused
to fill up their bio-data for the respondent corporation. They also claimed that they were
not paid vacation and sick leave benefits; that their 13th month pay for 1996 to 1998 was
underpaid; and, that the respondents violated their right to security of tenure and
payment of separation pay.
ISSUE
WON the petitioners were legally dismissed by reason of abandonment of work
HELD
- As correctly ruled by the Labor Arbiter, the NLRC and the CA, the petitioners were not
illegally dismissed. Even after the petitioners received notices from the respondent
corporation requiring them to report for work and to explain their unauthorized absences
and failure to submit their updated bio-data, they still failed to report for work. It can then
be inferred that the petitioners had abandoned their work. Indeed, the factors considered
for finding a valid abandonment are present in the case at bar: the petitioners’ failure to
report for work or absence was without valid or justifiable cause, and their refusal to
report for work notwithstanding their receipt of letters requiring them to return to work,
show their clear intention to sever the employer-employee relationship.
- Consistent with the finding that the petitioners abandoned their work, the award of
financial assistance in the form of separation pay should be deleted. Separation pay is
defined as the amount that an employee receives at the time of his severance and is
designed to provide the employee with the wherewithal during the period that he is
looking for another employment. Under the Labor Code, the award of separation pay is
sanctioned when termination was due to an authorized cause, i.e., (a) installation of labor
saving device, redundancy, retrenchment to prevent losses, closure or cessation of
business operations not due to serious business losses or financial reverses; and, (b)
disease prejudicial to the health of the employee and his fellow employees.
- Separation pay is, likewise, awarded in lieu of reinstatement if it can be shown that the
reinstatement of the employee is no longer feasible, as when the relationship between
employer and employee has become strained. In some cases, it is awarded as a
measure of social justice. In the present case, the petitioners were not dismissed, either
legally or illegally; the petitioners abandoned their jobs. They failed to return to work
despite the respondents’ directive requiring them to do so. There is, thus, no room for
the award of financial assistance in the form of separation pay. To sustain the claim for
separation pay under the circumstances herein established would be to reward the
petitioners for abandoning their work.
Disposition Petition denied
REQUISITES
LEONARDO V NLRC (REYNALDO'S MKTG CORP)
333 SCRA 589
DE LEON JR; June 16, 2000
NATURE
Petitions for certiorari seeking the annulment of a Decision of the public respondent,
NLRC.
FACTS
REYNALDO'S MARKETING CORPORATION on August 11, 1981 as a muffler specialist,
receiving P45.00 per day. He was appointed as supervisor in 1988and his compensation
Labor Law 1 A2010
was increased.
- DANILO LEONARDO was hired by private respondent on March 4, 1988 as an auto-
aircon mechanic.
- FUERTE alleges that on January 3, 1992, he was instructed to report at private
respondent's main office where he was informed by the company's personnel manager
that he would be transferred to its Sucat plant due to his failure to meet his sales quota,
and for that reason, his supervisor's allowance would be withdrawn.
- For a short time, FUERTE reported for work at the Sucat plant; however, he protested
his transfer, subsequently filing a complaint for illegal termination.
- LEONARDO abandoned his post following an investigation wherein he was asked to
explain an incident of alleged "sideline" work which occurred on April 22, 1991. It would
appear that late in the evening of the day in question, the driver of a red Corolla arrived
at the shop looking for LEONARDO. The driver said that, as prearranged, he was to pick
up LEONARDO who would perform a private service on the vehicle. When reports of the
"sideline" work reached management, it confronted LEONARDO and asked for an
explanation. According to private respondent, LEONARDO gave contradictory excuses,
eventually claiming that the unauthorized service was for an aunt.
- When pressed to present his aunt, it was then that LEONARDO stopped reporting for
work. He filed a complaint for illegal dismissal some ten months after his termination.
ISSUES
1. WON the demotion of Fuerte by the private respondent is proper
2. WON Fuerte's action constitutes abandonment
3. WON the dismissal of Leornado is justified
HELD
1. YES
- Private respondent's justification is well-illustrated in the record. Complainant Fuerte's
failure to meet his sales quota which caused his demotion and the subsequent
withdrawal of his allowance is fully supported by Exhibit "4" of respondents' position
paper showing that his performance for the months of July 1991 to November 1991 is
below par.
Reasoning
- FUERTE nonetheless decries his transfer as being violative of his security of tenure,
the clear implication being that he was constructively dismissed. We have held that an
employer acts well within its rights in transferring an employee as it sees fit provided that
there is no demotion in rank or diminution in pay. 11 The two circumstances are deemed
badges of bad faith, and thus constitutive of constructive dismissal. In this regard,
constructive dismissal is defined in the following manner:
an involuntary resignation resorted to when continued employment becomes
impossible, unreasonable, or unlikely; when there is a demotion in rank or diminution
in pay; or when a clear discrimination, insensibility or disdain by an employer
becomes unbearable to the employee. 12
- However, this arrangement appears to us to be an allowable exercise of company
rights. An employer is entitled to impose productivity standards for its workers, and in
fact, non-compliance may be visited with a penalty even more severe than demotion.
Thus, the practice of a company in laying off workers because they failed to make the
work quota has been recognized in this jurisdiction.
- In the case at bar, the petitioners' failure to meet the sales quota assigned to each of
them constitute a just cause of their dismissal, regardless of the permanent or
probationary status of their employment. Failure to observe prescribed standards of
work, or to fulfill reasonable work assignments due to inefficiency may constitute just
cause for dismissal. Such inefficiency is understood to mean failure to attain work goals
or work quotas, either by failing to complete the same within the allotted reasonable
period, or by producing unsatisfactory results. This management prerogative of requiring
standards may be availed of so long as they are exercised in good faith for the
advancement of the employer's interest.
2. NO
- his actions do not constitute abandonment. The filing of a complaint for illegal dismissal,
as in this case, is inconsistent with a charge of abandonment.
Ratio To constitute abandonment there must be (1) failure to report for work or absence
without valid or justifiable reason; and (2) a clear intention, as manifested by some overt
acts, to sever the employer-employee relationship.
3. YES
- He was not terminated by the company but Leonardo abandoned his position in light of
the pending investigation against him. Abandonment is a valid ground for dismissal.
- He protests that he was never accorded due process. This begs the question, for he
was never terminated; he only became the subject of an investigation in which he was
apparently loath to participate. As testified to by Merlin P. Orallo, the personnel manager,
he was given a memorandum asking him to explain the incident in question, but he
refused to receive it. In an analogous instance, we held that an employee's refusal to
sign the minutes of an investigation cannot negate the fact that he was accorded due
process.
Disposition Petition dismissed.
- 231 - Disini
R.P. DINGLASAN CONSTRUCTION INC V ATIENZA
433 SCRA 263
PUNO; June 29 2004
NATURE
Special Civil Action in the Supreme Court. Certiorari
FACTS
- This is an appeal from the decision and resolution of the Court of Appeals, dated
January 17, 2001 and October 30, 2002, respectively, upholding the finding of
constructive dismissal against petitioner.
- Petitioner R.P. Dinglasan Construction, Inc. provided janitorial services to Pilipinas
Shell Refinery Corporation (Shell Corporation) in Batangas City. Private respondents
Mariano Atienza and Santiago Asi served as petitioner’s janitors assigned with Shell
Corporation since 1962 and 1973, respectively. Private respondents claim that on July 7,
1994, petitioner called for a meeting and informed private respondents and three (3)
other employees that their employment with Shell Corporation would be terminated
effective July 15, 1994. They were told that petitioner lost the bidding for janitorial
services with Shell. Petitioner notified respondents that they may reapply as helpers and
redeployed in other companies where petitioner had subsisting contracts but they would
receive only a minimum wage. Private respondents refused as the offer would be a form
of demotion --- they would lose their seniority status and would not be guaranteed to
work at regular hours.
- In December 1994, private respondents filed a complaint against petitioner for non-
payment of salary with the district office of the Department of Labor and Employment
(DOLE) in Batangas City. In February 1995, during the conciliation proceedings with the
DOLE, petitioner sent notices to respondents informing them that they would be
reinstated with Shell Corporation as soon as they submit their barangay clearance,
medical certificate, picture and information sheet as per the new identification badge
requirements of Shell Corporation. Thereafter, petitioner again met with private
respondents, who were then accompanied by the barangay captain and a councilor, and
the latter confirmed to the former their willingness to be reinstated. Private respondents
duly submitted the documents required for their reinstatement.
- In May 1995, respondents demanded the payment of their backwages starting from July
15, 1994. On June 1, 1995, petitioner notified private respondents that they have been
declared absent without leave (AWOL) as they allegedly failed to signify their intention to
return to work and submit the badge requirements for their reinstatement. On June 13,
1995, private respondents wrote petitioner and insisted that they had complied with the
badge requirements. Accompanied by the barangay officials, private respondents
attempted to meet with the officers of petitioner but the latter refused to dialogue with
them. As proof of their compliance with the Shell requirements, private respondents
submitted to the DOLE their x-ray results, dated May 17 and 19, 1995 and their barangay
certification, dated May 13, 1995. The case was eventually referred to the National Labor
Relations Commission (NLRC) for compulsory arbitration. Private respondents amended
their complaint charging petitioner with illegal dismissal and non-payment of 13 th month
pay, with a claim for payment of attorney’s fees and litigation expenses, and a prayer for
reinstatement with payment of full backwages from July 15, 1994.
- Petitioner gave a different version of the incident. It allegedly informed respondents
and the other affected employees that they would be deployed to petitioner’s other
principal companies but that their work would be different. Except for private
respondents, all the affected employees accepted its offer of redeployment and reported
back to work. Respondents failed to submit a resignation letter to signify their intention
not to return to work. Thereafter, during the pendency of the labor case, petitioner in two
(2) separate notices, informed private respondents that they could be reinstated at Shell
Corporation with no diminution in their salary provided that they submit the documents for
the new identification badge requirement of Shell Corporation. Private respondents,
however, refused to return to work until they were paid their backwages. Consequently,
petitioner was constrained to consider them as having abandoned their work and to
terminate their employment on September 19, 1995. Petitioner, thus, justified the
dismissal of private respondents on the grounds of gross and habitual neglect of duties
and abandonment of work. On September 3, 1998, labor arbiter Andres Zavalla rendered
a decision finding that private respondents were illegally dismissed from service and
ordering their reinstatement.
- On appeal, the decision of the labor arbiter was affirmed by the NLRC. Without moving
for reconsideration, petitioner immediately filed a petition for certiorari before the Court of
Appeals but petitioner suffered the same fate. On the procedural aspect, the Court of
Appeals ruled that the petition could not prosper as petitioner failed to move for a
reconsideration of the NLRC decision. On the substantive issues, the appellate court
upheld the findings of the labor arbiter and the NLRC that: (1) private respondents were
constructively dismissed as petitioner’s offer of reassignment involved a diminution in pay
and demotion in rank that made their continued employment unacceptable; and, (2)
private respondents could not be considered to have abandoned their work.
- As petitioner’s motion for reconsideration was denied, petitioner filed this appeal
Labor Law 1 A2010
ISSUES
1. WON the respondents’ dismissal is justified
2. WON the Court of Appeals, contrary to existing law, erred in dismissing the petition for
certiorari and affirming the decision of the NLRC insofar as the monetary award is
concerned
HELD
1. Ratio In an illegal dismissal case, the onus probandi rests on the employer to prove
that its dismissal of an employee is for a valid cause. In the case at bar, petitioner failed
to discharge its burden. It failed to establish that private respondents deliberately and
unjustifiably refused to resume their employment without any intention of returning to
work.
- To constitute abandonment of work, two (2) requisites must concur: first, the employee
must have failed to report for work or must have been absent without justifiable reason;
and second, there must have been a clear intention on the part of the employee to sever
the employer-employee relationship as manifested by overt acts. Abandonment as a just
ground for dismissal requires deliberate, unjustified refusal of the employee to resume
his employment. Mere absence or failure to report for work, after notice to return, is not
enough to amount to abandonment.
Reasoning
- In the case at bar, the evidence of private respondents negates petitioner’s theory that
they abandoned their work. Firstly, private respondents reported back to petitioner’s
office a number of times expressing their desire to continue working for petitioner without
demotion in rank or diminution of salary. This fact was established by the corroborating
testimony of barangay councilman Valentin Clerigo who, together with the barangay
captain, accompanied private respondents to petitioner’s office at least ten (10) times to
negotiate their redeployment on more acceptable terms. Secondly, in seeking
reinstatement, private respondents also sought the intervention of the DOLE to arbitrate
the labor issue between the parties. Thirdly, private respondents submitted the barangay
clearances and x-ray results required from them by petitioner for their reinstatement as
witnessed by the barangay officials. Lastly, the records would bear that private
respondents lost no time and sought their reinstatement by filing an illegal dismissal case
against petitioner, which act is clearly inconsistent with a desire to sever employer-
employee relations and abandon their work. All these overt acts on the part of private
respondents negate petitioner’s claim of abandonment of work and prove beyond doubt
their steadfast desire to continue their employment with petitioner and be reinstated to
their former position. Moreover, petitioner failed to explain why it waited for 14 months
from the time private respondents allegedly did not return to work before it dismissed
them for being AWOL.
- We hold that private respondents were constructively dismissed by petitioner.
Constructive dismissal is defined as quitting when continued employment is rendered
impossible, unreasonable or unlikely as the offer of employment involves a demotion in
rank and diminution of pay. In the case at bar, petitioner committed constructive
dismissal when it offered to reassign private respondents to another company but with no
guaranteed working hours and payment of only the minimum wage. The terms of the
redeployment thus became unacceptable for private respondents and foreclosed any
choice but to reject petitioner’s offer, involving as it does a demotion in status and
diminution in pay. Thereafter, for six (6) months, private respondents were in a floating
status. Interestingly, it was only after private respondents filed a complaint with the
DOLE that petitioner backtracked in its position and offered to reinstate private
respondents to their former job in Shell Corporation with no diminution in salary.
Eventually, however, petitioner unilaterally withdrew its offer of reinstatement, refused to
meet with the private respondents and instead decided to dismiss them from service.
2. On the second issue, petitioner cannot impugn for the first time the computation of the
monetary award granted by the labor arbiter to private respondents.
Doctrine The settled rule is that issues not raised or ventilated in the court a quo cannot
be raised for the first time on appeal as to do so would be offensive to the basic rules of
fair play and justice. The computation of monetary award granted to private respondents
is a factual issue that should have been posed at the arbitration level when the award
was first granted by the labor arbiter who received and evaluated the evidence of both
parties, or, at the latest, raised by petitioner in its appeal with the NLRC.
- Petitioner omitted to do any of these. All throughout the proceedings below, from the
labor arbiter to the NLRC, and even in its petition before the Court of Appeals, petitioner
repeatedly pounded only on the sole issue of the validity of its dismissal of private
respondents. Thus, at this late stage of the proceedings, it cannot ask the Court to
review the bases and verify the correctness of the labor arbiter’s computation of the
monetary award which it never assailed below. A first-hand evaluation of the evidence of
the parties upon which the monetary award is based belongs to the labor arbiter. This
Court is not a trier of facts and factual issues are improper in a petition for review on
certiorari. Likewise, the Court notes that in seeking reinstatement and payment of their
monetary claims, private respondents have traversed a long and difficult path. This case
has passed the DOLE, the labor arbiter, the NLRC, the Court of Appeals and now this
Court, with the finding of illegal dismissal having been consistently affirmed in each
stage. Private respondents had been rendering janitorial services as early as 1962 and,
- 232 - Disini
at the time of their dismissal, were receiving a measly P4,000.00 monthly salary. It is
time to put a period to private respondents’ travail. If there is anything that frustrates the
search for justice by the poor, it is the endless search for it.
CHAVEZ V NLRC
[PAGE 59]
FLOREN HOTEL V NLRC (CALIMLIM, RICO, ET AL)
458 SCRA 128
QUISUMBING; May 6, 2005
FACTS
- At the time of their termination, private respondents Roderick A. Calimlim, Ronald T.
Rico and Jun A. Abalos were working in the hotel as room boys, private respondent Lito
F. Bautista as front desk man, and private respondent Gloria B. Lopez as waitress.  They
all started working for the hotel in 1993, except for Jun A. Abalos who started only in
1995.
- In the afternoon of June 6, 1998, petitioner Dely Lim randomly inspected the hotel
rooms to check if they had been properly cleaned.  When she entered Room 301, she
found private respondent Lito F. Bautista sleeping half-naked with the air-conditioning
on.  Lim immediately called the attention of the hotel’s acting supervisor, Diosdado
Aquino, who had supervision over Bautista.  Lim admonished Aquino for not supervising
Bautista more closely, considering that it was Bautista’s third offense of the same nature.
When she entered Room 303, she saw private respondents Calimlim and Rico drinking
beer, with four bottles in front of them.  They had taken these bottles of beer from the
hotel’s coffee shop.  Like Bautista, they had switched on the air conditioning in Room
303.
- That same afternoon, Dely Lim prepared a memorandum for Bautista, citing the latter
for the following incidents: (1) sleeping in the hotel rooms; (2) entertaining a brother-in-
law for extended hours during duty hours; (3) use of hotel funds for payment of SSS loan
without management consent; (4) unauthorized use of hotel’s air-con; and (5) failure to
pay cash advance in the amount of P4,000.
- Dely Lim tried to give Bautista a copy of the memorandum but Bautista refused to
receive it.  Bautista then went on absence without leave.  Calimlim and Rico,
embarrassed by the incident, went home.  When they returned to work the next day, they
were served with a notice of suspension for one week.
- Like Bautista, they refused to receive the notice of suspension, but opted to serve the
penalty.  Upon their return on June 15, 1998, they saw a memorandum dated June 13,
1998 on the bulletin board announcing (a) the suspension as room boys of Calimlim and
Rico, or alternately, (b) returning to work on probation as janitors for the following
reasons:  unsatisfactory work, having a drinking spree inside the hotel’s rooms, cheating
on the Daily Time Record, being absent without valid reason, leaving work during duty
time, tardiness, and sleeping on the job.  The memorandum also included Calimlim and
Rico’s new work schedule.
- Calimlim and Rico submitted handwritten apologies and pleaded for another chance,
before they went AWOL
- On June 25, 1998, Calimlim, Rico and Bautista filed separate complaints, for illegal
dismissal and money claims, before the Labor Arbiter.  Abalos and Lopez later also filed
separate complaints for underpayment of wages, non-payment of their 13 th month pay,
and service incentive leave pay.  On July 7, 1998, after they stopped working, Abalos
and Lopez amended their complaints.  They claimed that petitioners orally dismissed
them when they refused to withdraw their complaints.
- Petitioners alleged that they did not dismiss private respondents but that private
respondents had abandoned their jobs.
- Private respondents filed a manifestation and motion dated November 24, 1998,
praying that petitioners be ordered to reinstate them to their former positions since after
all, according to petitioners, they were not dismissed.
- Petitioners opposed the motion and argued that private respondents cannot be
reinstated since they were not illegally dismissed but they had abandoned their jobs and
management simply considered them dismissed for abandonment.
- On March 19, 1999, the Labor Arbiter dismissed the complaints but ordered petitioners
to pay private respondents their proportionate 13 th month pay, and service incentive leave
pay.  He likewise ordered petitioners to pay Calimlim and Rico indemnity. 
- The Labor Arbiter found that Calimlim, Rico, and Bautista did not report for work and
they did not show any order of dismissal, thus constructively, they abandoned their work
and were not illegally dismissed.  The Labor Arbiter also ruled that Calimlim and Rico’s
demotion and reassignment were valid exercises of management prerogatives.  The
reassignment was intended to enable management to supervise them more closely and,
in any event, did not involve a diminution of wages. The Labor Arbiter, however, held
petitioners liable for indemnity to Calimlim and Rico for not observing the twin notices
rule.
- Private respondents appealed to the National Labor Relations Commission
Labor Law 1 A2010
- On March 22, 2000, the NLRC rendered its decision. It reversed the decision of the
Labor Arbiter and ordered the hotel management to immediately reinstate complainants-
appellants to their former positions without loss of seniority rights, with full backwages
and other benefits until they are actually reinstated.  In the event that reinstatement was
no longer possible, the respondent-appellees should pay herein private respondents their
separation pay in addition to the payment of their full backwages; their incentive leave
pay and their 13th month pay, together with P1,000 to each of them as indemnity.
- Later, the NLRC also denied petitioners’ motion for reconsideration. The petitioners
appealed to the Court of Appeals.
- On September 10, 2002, the Court of Appeals decided the petition as follows: (1)  The
Court declares that the private respondents Roderick A. Calimlim and Jose Abalos
[should be Ronald T. Rico] were illegally dismissed by petitioner Floren Hotel/Ligaya Chu
who is ORDERED to reinstate them to their former positions without loss of [seniority]
rights, with full backwages and other benefits until they are actually reinstated; but if
reinstatement is no longer possible, Floren Hotel/Ligaya Chu shall pay their separation
pay in addition to their backwages.  (2) Declaring private respondents Lito Bautista, Jun
Abalos and Gloria Lopez to have abandoned their employment, and, therefore, not
entitled to either backwages nor separation pay; and (3) ORDERING Floren Hotel/Ligaya
Chu to pay all the private respondents their 13 th month pay and incentive leave pay as
computed in the Decision of the Labor Arbiter
ISSUES
1. WON the Court of Appeals erred in giving due course to the petition for certiorari filed
before the appellate court
2. WON the private respondents were illegally dismissed
3 WON the Court of Appeals erred in ordering petitioners to pay Calimlim and Rico
indemnity of P1,500
4 WON the appellate court erred in ordering petitioners to pay all of private respondents
their proportionate 13th month pay and incentive leave pay
HELD
1. NO
- Acceptance of a petition for certiorari as well as the grant of due course thereto is
addressed to the sound discretion of the court. Section 1, Rule 65 of the Rules of Court
in relation to Section 3, Rule 46 of the same rules does not specify the precise
documents, pleadings or parts of the records that should be appended to the petition
other than the judgment, final order, or resolution being assailed.  The Rules only state
that such documents, pleadings or records should be relevant or pertinent to the assailed
resolution, judgment or orders.
2. YES
- Petitioners claimed that all five private respondents were guilty of abandoning their
jobs.  Thus, it was incumbent upon petitioners to show that the two requirements for a
valid dismissal on the ground of abandonment existed in this case.  Specifically,
petitioners needed to present, for each private respondent, evidence not only of the
failure to report for work or that absence was without valid or justifiable reasons, but also
of some overt act showing the private respondent’s loss of interest to continue working in
his or her job.
- It was true that private respondents abandoned their jobs, then petitioners should have
served them with a notice of termination on the ground of abandonment as required
under Sec. 2, Rule XIV, Book V, Rules and Regulation Implementing the Labor Code, in
effect at that time.  Said Section 2 provided that:
Notice of Dismissal. Any employer who seeks to dismiss a worker shall furnish him a
written notice stating the particular acts or omission constituting the grounds for his
dismissal. In cases of abandonment of work, the notice shall be served at the worker’s
last known address.
- But petitioners failed to comply with the foregoing requirement, thereby bolstering
further private respondents’ claim that they did not abandon their work but were illegally
dismissed.
- None of the private respondents in this case had any intention to sever their working
relationship.  Just days after they were dismissed, private respondents Calimlim, Rico,
Bautista, Abalos and Lopez filed complaints to protest their dismissals.  The well-
established rule is that an employee who takes steps to protest his layoff cannot be said
to have abandoned his work. That private respondents all desired to work in the hotel is
further shown by the fact that during the proceedings before the Labor Arbiter, shortly
after private respondents received petitioners’ position paper where the latter averred
that private respondents were never terminated, private respondents filed a manifestation
and motion asking that petitioners be ordered to allow them back to work.  This is nothing
if not an unequivocal expression of eagerness to resume working.
3. YES (should have reinstated)
- Article 279 of the Labor Code gives to Calimlim and Rico the right to reinstatement
without loss of seniority rights and other privileges or separation pay in case
reinstatement is no longer possible, and to his full backwages, inclusive of allowances
and other benefits.  It was thus error for the Court of Appeals to affirm the NLRC decision
to award Calimlim and Rico indemnity in addition to the measure of damages provided in
- 233 - Disini
Article 279.  The award of indemnity is a penalty awarded only when the dismissal was
for just or authorized cause but where the twin-notice requirement was not observed.
4. NO
- Petitioners did not question the propriety of the award of proportionate 13 th month pay
and service incentive leave in the Court of Appeals.  They assailed the NLRC decision on
only one ground:  “Respondent NLRC committed grave abuse of discretion in reversing
the Labor Arbiter’s decision insofar as it relates to the issues of illegal dismissal.”  Hence,
the correctness of the cited award in the NLRC ruling was never brought before the
appellate court and is deemed to have been admitted by petitioners.  It cannot therefore
be raised anymore in this petition. The decision of the NLRC as regards the award of 13 th
month pay and service incentive leave pay became binding on petitioners because the
failure to question it before the Court of Appeals amounts to an acceptance of the ruling. 
In any event, the award appears to us amply supported by evidence and in accord with
law.
Disposition Assailed decision MODIFIED
INFERENCE
HDA. DAPDAP V NLRC (BARRIENTOS JR)
285 SCRA 9
BELLOSILLO; January 26, 1998
FACTS
- Nine workers of Hda. Dapdap I, a sugar farm in Victorias, Negros Occidental, filed a
complaint for illegal dismissal against its owner Magdalena Fermin alleging that they had
been working in the farm since 1977 but were unjustly terminated, without notice and
without any valid ground, on 27 January 1992.
- The only reason for their dismissal was their refusal to return the 6-hectare lot given to
them for cultivation under an "Amicable Settlement” in connection with an illegal
dismissal case previously filed against the management of Hda. Dapdap I by its workers.
- In addition, complainants charged Magdalena Fermin with unfair labor practice for trying
to bust the National Federation of Sugar Workers Food and General Trades (NFSW-
FGT) Union which forged the 1986 "Amicable Settlement."
- Eight of the original complainants withdrew from the complaint and returned to work on
the ground that their misunderstanding with management was already settled.
- Pedro Barrientos Jr. was left as the sole complainant who amended the complaint by
impleading Lumbia Agricultural and Development Corporation (LADCOR), the real
owner of Hda. Dapdap I, as co-respondent with its President Magdalena Fermin.
- LADCOR denied that complainant was terminated and alleged that complainant
voluntarily abandoned his work to transfer to the adjacent farm of a certain Mr. Ramos.
- In addition, LADCOR alleged that it had a personality separate and distinct from its
president, Magdalena Fermin, hence the latter could not be held personally liable for the
alleged illegal dismissal.
- The Labor Arbiter ruled in favor of complainant.] While LADCOR was absolved from the
charge of unfair labor practice it was held liable for illegal dismissal on the ground that its
claim of voluntary abandonment by complainant of his work was not credible in view of
the immediate institution of the case for illegal dismissal.
- LADCOR appealed to the NLRC.
- The NLRC affirmed the Labor Arbiter's decision in toto. The defense that complainant
voluntarily abandoned his work was similarly rejected on the additional grounds that no
notice of dismissal was sent by LADCOR to complainant as required by Sec. 2, Rule 14,
Book V, of the Rules Implementing the Labor Code and no concurrence of the intention
to abandon on the part of complainant and overt acts from which it could be inferred that
he was no longer interested in working for LADCOR.
ISSUE
WON petitioner was illegally dismissed
HELD
YES
- The Court is not a trier of facts. Whether respondent voluntarily abandoned his work
issue of credibility best left to the determination of the Labor Arbiter. Great respect and
even finality is accorded the conclusions of the Labor Arbiter and the NLRC in
accordance with the well-settled rule that findings of fact of labor arbiters affirmed by the
NLRC are binding on the Supreme Court.
- Judicial review in such cases is limited only to issues of jurisdiction or grave abuse of
discretion amounting to lack of jurisdiction.
- No such grave abuse of discretion was committed by the NLRC as it correctly applied
the consistent ruling in labor cases that a charge of abandonment is totally inconsistent
with the immediate filing of a complaint for illegal dismissal.
- It is indeed inconceivable that an employee like herein respondent who has been
working at Hda. Dapdap I since 1977 and cultivating a substantial portion of a 6-hectare
lot therein for himself would just abandon his work in 1992 for no apparent reason.
Labor Law 1 A2010
- Nor could intent to abandon be presumed from private respondent's subsequent
employment with another employer as petitioner alleges. The fact that the start of such
employment, i.e., after 1 March 1992 as petitioner alleges, coincides with the date of the
original complaint strongly indicates that such employment was only meant to help
respondent and his family survive during the pendency of his case.
- It has been said that abandonment of position cannot be lightly inferred, much less
legally presumed from certain equivocal acts such as an interim employment.
Disposition Petition was dismissed.
SPECIFIC ACTS
PREMIERE DEVT BANK V NLRC (LABANDA)
293 SCRA 49
MARTINEZ; July 23, 1988
NATURE
Petition for certiorari
FACTS
- August 8, 1985: Ramon T. Ocampo, a depositor of Premiere Devt Bank (PDB), issued a
check in the amount of P6,792.66 in favor of and for deposit to the account of Country
Banker's Insurance Corporation (CBISCO), also a depositor of PDB. On the same day,
after the check and the deposit slip were presented to respondent Teodora Labanda,
who was employed as teller at PDB Taytay Branch, they were turned over to the Branch
cashier for verification of the fund balance and signature of the drawer. There was a
confirmation of the check and the same was accepted by Labanda for deposit to the
current account of CBISCO.
- The check was posted by Manuel S. Torio, the Taytay Branch bookkeeper. But instead
of posting it to CBISCO's account, the same was posted to the account of Ocampo
treating it as "On-Us Check," that is, drawn against the Taytay Branch where the check
was deposited.
- January 13, 1986: the wife of Ocampo, together with the auditor from CBISCO, went to
PDB and complained to PDB Chairman Dr. Procopio C. Reyes that her husband was
being held accountable for the amount. It was only then that PDB discovered the
misposting of the check issued by Ocampo, resulting in the overstatement of his
outstanding daily balance by P6,792.66. The overstatement remained undetected until
Ocampo withdrew the money from PDB.
- Due to this incident, PDB Asst VPres Pacita M. Araos sent a demand letter to Labanda
requesting her to explain in writing the misposting and erroneous crediting of the subject
check in issue as well as the circumstances surrounding the incident within three (3)
days from receipt thereof, and in case she fails to do so, necessary action shall be taken
against her.
- PDB Exec VPres Renato G. Dionisio, upon instructions of Reyes, sent the internal
auditors of the bank to investigate and make a detailed report about the incident.
- January 22, 1986: the auditors came out with a report finding Labanda and bookkeeper
Torio primarily liable for the incident. These findings prompted Dionisio to send a letter to
Labanda requiring her to shoulder 20% of the amount lost via salary deduction. Labanda
replied, objecting to such move, reasoning out that she is the breadwinner in the family.
She further asked the bank to furnish her a copy of the audit report and requested for a
full-dress investigation. For this reason, petitioners held in abeyance the salary
deductions.
- March 13, 1986: Labanda was placed under preventive suspension pending
investigation of the incident. She was requested to report on April 4, 1986 so that she
can present her side of the story. Labanda then wrote a letter to Reyes requesting
information on the duration of her suspension and at the same time asking for an
expeditious investigation. In response thereto, she was informed that the period of her
suspension shall last until the investigation is completed and a decision is made thereon.
- On the date of said inquiry, Labanda executed a statement. However, she manifested
before Atty. Revelo during the inquiry that she will not sign any of the preliminary
statements she made unless the same is with the consent and advice of her husband.
She also told the inquiring officer that she could not inform petitioners of the dates when
she would be available for investigation.
- April 8, 1986: another letter was sent to Labanda by Reyes informing the former that
her refusal to sign or authenticate preliminary statements given on April 4, 1986 was a
clear indication of her unwillingness to cooperate or an effort to hide something or
suppress the truth.
- The dates of the hearing were rescheduled by petitioners several times. The first
rescheduled hearing was on April 14, 1986 where Labanda sent her lawyer bringing with
him a letter asking that she be given time to confer with her counsel for which she was
given until April 23. Notices were sent to inform her of the rescheduled dates with
warning that failure to attend the same shall be taken as a tacit admission of her liability
and the case shall be resolved based on the evidence available. In the meantime,
Bookkeeper Torio admitted liability and was allowed to resign.
- 234 - Disini
- April 7, 1986: the bank officials received a letter from Labanda through her counsel
demanding payment of actual damages in the amount of P50,000.00 for their alleged
arbitrary, illegal and oppressive acts. Petitioners did not heed the demand.
- May 23, 1986: Labanda filed a complaint for damages before the court. Petitioners’
motion to dismiss, and subsequent motion for reconsideration were both denied. The
petition for certiorari was also dismissed by CA, without prejudice to the refiling of the
complaint with the labor arbiter. The decision became final and executory on July 30,
1987.
- Eight months from the finality of the CA decision and two years from the alleged
termination of her employment, Labanda filed an illegal dismissal case before the Labor
Arbiter on the ground that her dismissal was without lawful cause and without due
process. After trial, the Labor Arbiter dismissed the labor case, ruling that Labanda was
not illegally dismissed, and that she abandoned her job when she filed a complaint for
compensatory damages with the regular court.
- NLRC reversed the decision of the Labor Arbiter ruling that Labanda’s indefinite
preventive suspension amounted to constructive dismissal. It ordered PDB to
immediately reinstate Labanda to her former position with backwages and other benefits
for a period not exceeding three (3) years without qualifications and deductions
computed on the amount of P87,750.00. It denied the subsequent MFR.
ISSUES
1. WON there was legal cause in placing Labanda under preventive suspension
2. WON the filing of an action for damages against one's employer is tantamount to
abandonment of job
3. WON PDB violated due process requirements in dismissing Labanda
4. WON Labanda’s action is barred by laches
HELD
1. NO
- Labanda's preventive suspension is without valid cause since she was outrightly
suspended by petitioner. As of the date of her preventive suspension on March 13, 1986
until the date when the last investigation was rescheduled on April 23, 1986, more than
30 days had expired. The preventive suspension beyond the maximum period amounted
to constructive dismissal.
- The question of whether or not an employee has abandoned his/her work is a factual
issue, not reviewable by this Court.
2. NO
- Labanda did not abandon her job. To constitute abandonment, two elements must
concur: (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, with the second
element as the more determinative factor and being manifested by some overt acts.
Abandoning one's job means the deliberate, unjustified refusal of the employee to
resume his employment and the burden of proof is on the employer to show a clear and
deliberate intent on the part of the employee to discontinue employment.
- The law, however, does not enumerate what specific overt acts can be considered as
strong evidence of the intention to sever the employee-employer relationship. An
employee who merely took steps to protest her indefinite suspension and to
subsequently file an action for damages, cannot be said to have abandoned her work nor
is it indicative of an intention to sever the employer-employee relationship. Her failure to
report for work was due to her indefinite suspension. Petitioner's allegation of
abandonment is further belied by the fact that Labanda filed a complaint for illegal
dismissal. Abandonment of work is inconsistent with the filing of said complaint.
3. YES
- The twin requirements of notice and hearing constitute the essential elements of due
process which are set out in Rule XIV, Book V of the Omnibus Rules Implementing the
Labor Code.
- Granting arguendo that there was abandonment in this case, it nonetheless cannot be
denied that notice still has to be served upon the employee sought to be dismissed, as
the second sentence of Section 2 of the pertinent implementing rules explicitly requires
service thereof at the employee's last known address. While it is conceded that it is the
employer's prerogative to terminate the services of an employee, especially when there
is a just cause therefor, the requirements of due process cannot be taken lightly. The
law does not countenance the arbitrary exercise of such a power or prerogative when it
has the effect of undermining the fundamental guarantee of security of tenure in favor of
the employee.
4. NO
- Laches is the failure for an unreasonable and unexplained length of time to do that
which in exercising due diligence, could or should have been done earlier. It is
negligence or omission to assert a right within a reasonable time, warranting the
presumption that the party entitled to assert it either has abandoned or has declined to
assert it. A party cannot be held guilty of laches when he has not incurred undue delay in
the assertion of his rights.
- Under the law, an illegal dismissal case is an action predicated on the injury to the
rights of the dismissed employee which prescribes in four (4) years. On April 4, 1988 or
eight months from the finality of the Court of Appeals' decision and two years from the
Labor Law 1 A2010
alleged termination of employment by respondent Labanda, she filed her complaint with
the Labor Arbiter which is within the four-year reglementary period. She did not sleep on
her rights for an unreasonable length of time.
- SolGen: Labanda never intended to abandon her job. First, after her indefinite
suspension, she requested that the "full-dressed" investigation be done at the quickest
time possible, and appealed to petitioner Reyes to consider that she was the
breadwinner in the family. Second, she actively fought for her right to security of tenure
by filing first with the RTC an action for damages, and later with the Labor Arbiter a
complaint for illegal dismissal. Moreover, Labanda's inability to report for work was not
voluntary but was rather the result of her indefinite suspension, which in reality was a
constructive dismissal. Petitioners never took the initiative to notify Labanda to report
back to work or charge the latter with abandonment of work. These show that Labanda
did not abandon her job but was illegally dismissed from employment without due
process of law.
Disposition Petition is DISMISSED. The challenged NLRC Resolution is AFFIRMED.
1. LOANS
BORROWING MONEY
MEDICAL DOCTORS INC V NLRC (MAGLAYA, ELOÑA)
136 SCRA 1
MAKASIAR; April 24, 1985
NATURE
An appeal of the decision of the NLRC.
FACTS
- Evelyn Eloña (complainant) was given a probationary appointment as Clerk by the
Makati Medical Center from July 16, 1975 to January 15, 1976, and assigned at the Out-
Patient Charity Department of said Medical Center.
- Two of the conditions embodied in the appointment:
'Comply with all existing policies, rules and regulations and those that may be adopted
or promulgated in the future deemed necessary in the internal affairs of the employer;
'If at anytime during the probationary employment of the employee her services are
judged to be unsatisfactory, the employer may terminate such employment.'
- The termination or dismissal was and is predicated mainly on the fact that Evelyn Elona
borrowed P50 from one of the patients, Mrs. Leticia Lavapiez, allegedly in violation of
respondent's policies, rules and regulations against solicitation of any consideration from
indigent patients. The borrowing took place at Mrs. Lavapiez’s house and after she was
discharged from the OPCD. The amount of P50 that was borrowed was also returned,
remitted or paid by complainant to Mrs. Lavapiez
- Eloña worked in this capacity of clerk continuously until February 14, 1976 when she
was dismissed or terminated.
- NLRC: “Borrowing money and paying the same is not an act of dishonesty, of
immorality, of illegality, or of omissions punishable by law as to be a ground for dismissal
as in this case. We so hold that the Rules and Regulations & Policies of respondent
Medical Center are whimsical, capricious, arbitrary and oppressive… The facts and the
law point unerringly to her side. She has completed her probationary period. Her
employment contract is not covered by an apprenticeship agreement stipulating a longer
period.”
ISSUE
WON Eloña was justly dismissed on sole reason of borrowing money from the patients
HELD
NO, Eloña was not dismissed justly.
Ratio Borrowing money is neither dishonest, nor immoral nor illegal, much less criminal.
Reasoning
- Private respondent paid the money she borrowed from the hospital patient. She was
even recommended for permanent appointment from her probationary status, from clerk
to secretary, by her immediate superior, Sis. Consolacion Briones.
- It may be added that she must have been compelled to borrow P50.00 from her patient
because of economic necessity, which circumstance should evoke sympathy from this
Court, the very constitutional organ mandated by the fundamental law to implement the
social justice guarantee for the protection of the lowly, efficient and honest employee,
who is economically disadvantaged, like herein petitioner.”
Disposition Petition is dismissed, and decision of the labor arbiter is affirmed, with the
modification that backwages should cover three (3) years.
SEPARATE OPINION
- 235 - Disini
AQUINO [dissent]
- Nicolas A. Zarate, the chief of the public information assistance division, apprised the
Makati Medical Center of Evelyn's conduct. Zarate alleged that Evelyn "has the habit of
borrowing money from OPD patients of that hospital." Evelyn allegedly borrowed P100
from Leticia Lavapiez after she delivered a baby. She attempted to borrow money from
Teofila Luzon and tried to ask for lunch from another patient, Mrs. Fabian. A copy of the
denunciation was furnished Mayor Nemesio Yabut.
- To have more time for investigating the charge, Evelyn's probationary appointment was
extended by one month or up to February 15, 1976. After due investigation, Consolacion
Briones, the supervisor of the Outpatient Charity Department, submitted a report
exonerating Evelyn. The Barangay Secretariat of Makati also recommended Evelyn's
exoneration.
- Eloña should not be reinstated or placed under permanent status because, as correctly
observed by Commissioner Villatuya of NLRC, she was dismissed when she was still a
probationary employee. It is true that the probationary status does not exceed six months
but under the peculiar circumstances of this case Evelyn's probationary or temporary
status was extended for one month due to the investigation. This may well be considered
an exceptional case. Evelyn is not the kind of employee who can invoke security of
tenure.
PEARL S. BUCK FOUNDATION V NLRC
182 SCRA 446
GUTIERREZ; February 21, 1990
NATURE
Appeal from the decision of the NLRC as well as the resolution denying the motion for
reconsideration
FACTS
- Petitioner Pearl S. Buck Foundation, Inc. extends financial, education and medical
assistance to indigent "Amerasian" youth through funds provided by individuals and
church groups in the US. Private respondent Rubini Gosiaco Querimit was employed by
the petitioner as a case worker in the Olongapo City branch. One of the wards assigned
to Mrs. Querimit as such case worker was Richard Aliarte, Amerasian son of Andrea
Aliarte.
- It appears that Mrs. Querimit borrowed P300 from Andrea Aliarte. It is not clear from the
records when she paid said debt but Mrs. Querimit once again borrowed P3,000.00 from
Aliarte, who requested assistance from petitioner for the collection of the indebtedness.
Mrs. Querimit paid the amount allegedly only after the petitioner had exerted incessant
pressure on her. Thereafter, she received a letter dated from the petitioner's resident
director informing her that her services would be terminated. Mrs. Querimit filed in the
NLRC a complaint for illegal dismissal, underpayment, overtime pay and maternity
benefits.
- The labor arbiter dismissed the complaint for lack of merit. On appeal, the NLRC opined
that borrowing money is not a ground for termination of employment under the Labor
Code and that the loan is a "personal transaction" between Andrea Aliarte and Mrs.
Querimit "the respondent not being a privy to (the) transaction and hence, had no cause
to dismiss the complainant from her job more so that the loan had earlier been paid and
settled." The petitioner filed an MFR. After it was denied, the petitioner filed the instant
petition.
ISSUE
WON private respondent was illegally dismissed
HELD
1. NO
Ratio Borrowing money is neither dishonest, nor immoral, nor illegal, much less criminal.
However, said act becomes a serious misconduct that may justly be asserted as a
ground for dismissal when reprehensible behavior such as the use of a trust relationship
as a leverage for borrowing money is involved.
Reasoning
- The fact that Aliarte has retracted her complaint is of no moment. She loaned money to
the respondent, not once but twice and there can be no other assumption where the
money came from except from the trust funds intended for the ward. The NLRC should
have considered that a higher degree of prudence is required of the foundation's
employees especially when it comes to financial matters affecting the petitioner's wards.
The petitioner solicits or "begs" for money from abroad to support its wards. It cannot be
a third person where that money is involved.
Disposition The petition is GRANTED. The decision of the NLRC is REVERSED and
SET ASIDE. The decision of the Labor Arbiter is REINSTATED.
2. COURTESY RESIGNATION
Labor Law 1 A2010 - 236 - Disini
495 SCRA 123
BATONGBACAL V ASSOCIATED BANK CORONA; July 14, 2006
168 SCRA 600
FERNAN; December 21, 1988 NATURE
Petition for review on certiorari from a decision and a resolution of the Court of Appeals.
NATURE
FACTS
Review of the decision of the NLRC
- Cabanban worked with GSP Manufacturing Corporation (GSP) as a sewer from
February 7, 1985 until her alleged termination on March 1, 1992.
FACTS
- On June 16, 1992, respondent filed with the National Labor Relations Commission
- Bienvenido Batongbacal, a lawyer, worked for Citizens Bank and Trust Company from
(NLRC), National Capital Region Arbitration Branch, a complaint against petitioners for
1961. On 1975, Citizens Bank and Trust Company merged with the Associated Banking
illegal dismissal, non-payment of holiday pay, service incentive leave pay and 13th
Corporation. The merged corporate entity later became known as Associated Bank. In
month pay. She claimed she was terminated by petitioners because she failed to
the new bank, petitioner resumed his position as assistant vice-president.
dissuade her daughter from continuing her employment at the Sylvia Santos Company, a
- On March 1982, he learned that his salary was very much below compared to the other
business competitor of petitioners.In their defense, petitioners argued that respondent
Asst. VPs of the bank. He wrote to the Board of Directors asking that he be paid the
abandoned her work on March 14, 1992 and that they reported this to the Department of
proper amount. Apparently, said letter fell on deaf ears.
Labor and Employment on May 15, 1992.
- On March 15, 1982, the board approved the following resolution:
- Labor arbiter found petitioners guilty of illegal dismissal. Petitioners appealed to the
“BE IT RESOLVED that the new management be given the necessary flexibility in
NLRC, it was dismissed. Petition to CA was also dismissed. They claim that these
streamlining the operations of the Bank and for the purpose it is hereby resolved that
findings, based solely on statements made by respondent in the affidavit attached to her
the Bank officers at the Head Office and the Branches with corporate rank of Manager
position paper, were arrived at arbitrarily.
and higher be required, as they hereby are required to submit IMMEDIATELY to the
President their courtesy resignations.”
ISSUE
- Petitioner did not submit his courtesy resignation. On May 3, 1983, he received a letter
WON respondent is guilty of abandonment
from the Board saying that his resignation has been accepted. Petitioner wrote to the
executive VP asking for reconsideration. He stated therein that he thought the call for the
HELD
submission of courtesy resignations was only for erring "loathsome" officers and not
NO
those like him who had served the bank honestly and sincerely for sixteen years.
- Abandonment as a just ground for dismissal requires the deliberate, unjustified refusal
- Starting May 4, 1983, he was not paid. He filed for illegal dismissal and damages with
of the employee to perform his employment responsibilities. Mere absence or failure to
the NLRC. The NLRC ruled in favor of the petitioner. On MFR, the NLRC reversed.
work, even after notice to return, is not tantamount to abandonment. The records are
bereft of proof that petitioners even furnished respondent such notice.
ISSUE
- Furthermore, it is a settled doctrine that the filing of a complaint for illegal dismissal is
WON the bank may legally dismiss for refusal to tender the courtesy resignation which
inconsistent with abandonment of employment. An employee who takes steps to protest
the bank required in line with its reorganization plan
his dismissal cannot logically be said to have abandoned his work. The filing of such
complaint is proof enough of his desire to return to work, thus negating any suggestion of
HELD
abandonment.
NO
- Clearly, petitioners’ claim that respondent’s complaint was “an afterthought,” having
- While it may be said that the private respondent's call for courtesy resignations was
been filed a long time after the date of the supposed abandonment, was utterly without
prompted by its determination to survive, we cannot lend legality to the manner by which
merit. As the Court of Appeals correctly pointed out, citing the case of Pare v. NLRC,
it pursued its goalBy directing its employees to submit letters of courtesy resignation, the
respondent had four years within which to institute her action for illegal dismissal.
bank in effect forced upon its employees an act which they themselves should voluntarily
Compared to the six months it took the aggrieved employee in that case to file his
do. It should be emphasized that resignation per se means voluntary relinquishment of a
complaint for illegal dismissal, respondent’s 84 days was not unreasonably long at all.
position or office. 11 Adding the word "courtesy" did not change the essence of
Disposition petition is hereby DENIED. The assailed decision and resolution of the Court
resignation. That courtesy resignations were utilized in government reorganization did
of Appeals in CA-G.R. SP No. 51161 are hereby AFFIRMED.
not give private respondent the right to use it as well in its own reorganization and
rehabilitation plan. There is no guarantee that all employers will not use it to rid
themselves arbitrarily of employees they do not like, in the guise of "streamlining" its 4. TERM EMPLOYMENT
organization. On the other hand, employees would be unduly exposed to outright
termination of employment which is anathema to the constitutional mandate of security of
tenure BRENT SCHOOL V ZAMORA
- The record fails to show any valid reasons for terminating the employment of petitioner. [PAGE 94]
There are no proofs of malfeasance or misfeasance committed by petitioner which
jeopardized private respondent's interest.
- However, we agree with the Solicitor General and the NLRC that petitioner is not
entitled to an award of the difference between his actual salary and that received by the ROMARES V NLRC
assistant vice-president who had been given the salary next higher to his. There is a
294 SCRA 411
semblance of discrimination in this aspect of the bank's organizational set-up but we are
not prepared to preempt the employer's prerogative to grant salary increases to its MARTINEZ; August 19, 1998
employees. In this connection, we may point out that private respondent's claim that it
needed to trim down its employees as a self-preservation measure is belied by the NATURE
amount of salaries it was giving its other assistant vice-presidents Appeal from a decision of NLRC
Disposition Remanded to the NLRC to determine WON the petitioner is a managerial
employee FACTS
- Complainant-petitioner Romares has been hired and employed by respondent PILMICO
3. WORK ATTITUDE since Sept 1, ‘89 to Jan 15, ‘93, in a broken tenure but all in all totalled to over a year's
service. Complainant's period of employment started on Sept 1, ‘89 up to Jan 31, ‘90 or
for a period of 5 months. Then on Jan 16 ‘91, he was hired again up to June 15, ‘91, or
ABSENCES for a period covering another 5 months. Then on Aug 16, ‘92, he was hired again up to
Jan 15, ‘93 or for a period of another 5 months. Thus, from Sept 1, 1989 up to January
15, 1993, complainant has worked for 15 months more or less and has been hired and
MANILA ELECTRIC CO V NLRC terminated 3 times. In all his engagements by respondent, he was assigned at
[PAGE 186] respondent's Maintenance/Projects/Engineering Dept performing maintenance work,
particularly the painting of company buildings, maintenance chores, like cleaning and
GSP MANUFACTURING CORP V CABANBAN sometimes operating company equipment and sometimes assisting the regulars in the
Maintenance/ Engineering Dept.
Labor Law 1 A2010
- Petitioner’s arguments: That having rendered a total service of more than 1 year and by
operation of law, complainant has become a regular employee of respondent; That
complainant has performed tasks and functions which were necessary and desirable in
the operation of respondent's business which include painting, maintenance, repair and
other related jobs; That complainant was never reprimanded nor subjected to any
disciplinary action during his engagement with the respondent; That without any legal
cause or justification and in the absence of any time to know of the charge or notice nor
any opportunity to be heard, respondent terminated him; That his termination is violative
of the security of tenure clause provided by law; That complainant be awarded damages
and be reinstated to his former position, be awarded backwages, moral and exemplary
damages and atty's fees.
- Respondents’ arguments: That complainant was a former contractual employee of
respondent and as such his employment was covered by contracts; That complainant
was hired as mason in the Maintenance/Project Department and that he was engaged
only for a specific project under such department; That when his last contract expired on
Jan 15, 1993, it was no longer renewed and thereafter, complainant filed this instant
complaint; and; That since petitioner's employment contracts were for fixed or temporary
periods, as an exception to the general rule, he was validly terminated due to expiration
of the contract of employment.
- LA ruled in favor of petitioner finding him to be a regular employee and hence should be
reinstated. NLRC reversed LA decision ruling that petitioner was engaged in a fixed term
employment and as such, his termination was valid due to expiration of employment
contract. Hence, this appeal.
ISSUE
WON dismissal of complainant (under the just cause that such employment was of term
employment) was justified
HELD
NO
[a] Petitioner was deemed a regular employee. Petitioner’s work with PILMICO as a
mason was definitely necessary and desirable to its business. PILMICO cannot claim
that petitioner's work as a mason was entirely irrelevant to its line of business in the
production of flour yeast feeds and other flour products. During each rehiring, the
summation of which exceeded 1 year, petitioner was assigned to PILMICO's
Maintenance/Projects/Engineering Dept performing the same kind of maintenance work
such as painting of company buildings cleaning and operating company equipment, and
assisting the other regular employees in their maintenance works. Such a continuing
need for the services of petitioner is sufficient evidence of the necessity and
indispensability of his services to PILMICO's business or trade.
[b] Even assuming arguendo that petitioner was temporary EE, he was converted to
regular employee ff this rule: If the employee has been performing the job for at least one
year, even if the performance is not continuous or merely intermittent, the law deems the
repeated and continuing need for its performance as sufficient evidence of the necessity
is not indispensability of that activity to the business. Hence, the employment is also
considered regular but only with respect to such activity and while such activity exists.
[c] In rehiring petitioner, employment contracts ranging from 2 to 3 months with an
express statement that his temporary job/service as mason shall be terminated at the
end of the said period or upon completion of the project was obtrusively a convenient
subterfuge utilized to prevent his regularization. It was a clear circumvention of the
employee's right to security of tenure and to other benefits. It likewise evidenced bad
faith on the part of PILMICO.
[d] NLRC erred in finding that the contract of employment of petitioner was for a fixed or
specified period. From Brent v Zamora: The decisive determinant in "term employment"
should not be the activities that the employee is called upon to perform but the day
certain agreed upon by the parties for the commencement and termination of their
employment relationship. But, if from the circumstances it is apparent that the periods
have been imposed to preclude acquisition of tenurial security by the employee, they
should be struck down or disregarded as contrary to public policy and morals.
Note however that, "term employment" cannot be said to be in circumvention of the law
on security of tenure if: (1) The fixed period or employment was knowingly and voluntarily
agreed upon by the parties without any force, duress, or improper pressure being
brought to bear upon the employee and absent any other circumstances vitiating his
consent; or (2) It satisfactorily appears that the employer and the employee dealt with
each other on more or less equal terms with no moral dominance exercised by the
former or the latter None of these requisites were complied with.
Disposition Petition GRANTED. NLRC decision SET ASIDE. LA decision REINSTATED
MEDENILLA V PHIL VETERANS BANK
PURISIMA; March 13, 2000
FACTS
- 237 - Disini
- Petitioners were employees of the Philippine Veterans Bank (PVB). On June 15, 1985,
their services were terminated as a result of the liquidation of PVB. On the same day of
their termination, petitioners were rehired through PVB's Bank Liquidator.
- All of them were required to sign employment contracts which provided that:
(1) The employment shall be strictly on a temporary basis and only for the duration of the
particular undertaking for which a particular employee is hired; (3) The Liquidator
reserves the right to terminate the services of the employee at any time during the period
of such employment if the employee is found not qualified, competent or, efficient in the
performance of his job, or have violated any rules and regulations, or such circumstances
and conditions recognized by law.
- January 18, 1991 their employment was terminated. The reasons for which were "(a)
To reduce costs and expenses in the liquidation of closed banks in order to protect the
interests of the depositors, creditors and stockholders of Bank. (b) The employment were
on strictly temporary basis."
- Petitioners filed for illegal dismissal. Labor Arbiter found for employees. NLRC however
reversed decision
ISSUES
1. WON NLRC gravely abused its discretion in holding that the employment contract
entered into by the complainants and the Liquidator of PVB was for a fixed-period
2. WON NLRC act with grave abuse of discretion in finding that there was no illegal
dismissal
HELD
1. NO
- Employment contract between parties states that:
(1) The employment shall be on a strictly temporary basis and only for the duration of the
particular undertaking for which you are hired and only for the particular days during
which actual work is available as determined by the Liquidator or his representatives
since the work requirements of the liquidation process merely demand intermittent and
temporary rendition of services."
- The Court has repeatedly upheld the validity of fixed-term employment. Philippine
National Oil Company-Energy Development Corporation vs. NLRC gave two guidelines
by which fixed contracts of employment can be said NOT to circumvent security of
tenure:
1. The fixed period of employment was knowingly and voluntarily agreed upon by the
parties, without any force, duress or improper pressure being brought to bear upon
the employee and absent any other circumstances vitiating his consent;
or:
2. It satisfactorily appears that the employer and employee dealt with each other on
more or less equal terms with no moral dominance whatever being exercised by the
former on the latter."
- The employment contract entered into by the parties herein appears to have observed
the said guidelines. Furthermore, it is evident from the records that the subsequent re-
hiring of petitioners which was to continue during the period of liquidation and the
process of liquidation ended prior to the enactment of RA 7169 entitled, "An Act to
Rehabilitate Philippine Veterans Bank”
2. YES
- The reason given by the Liquidator for the termination of petitioners' employment was
"in line with the need of the objective of the Supervision and Examination Sector,
Department V, Central Bank of the Philippines, to reduce costs and expenses in the
liquidation of closed banks in order to protect the interest of the depositors, creditors and
stockholders
- In cases of illegal dismissal, the burden is on the employer to prove that there was a
valid ground for dismissal. Mere allegation of reduction of costs without any proof to
substantiate the same cannot be given credence by the Court. As the respondents failed
to rebut petitioners' evidence, the irresistible conclusion is that the dismissal in question
was illegal.
- the failure of respondent bank to dispute complainants' evidence pertinent to the
various unnecessary and highly questionable expenses incurred renders the termination
process as a mere subterfuge, as the same was not on the basis as it purports to see, for
reason that immediately after the termination from their respective positions, the same
were given to other employees who appear not qualified. What respondent's counsel did
was merely to dispute by pleadings the jurisdiction of this Office and the claims for
damages, which evidentiary matters respondent is required to prove to sustain the
validity of such dismissals."
- As held by this Court, if the contract is for a fixed term and the employee is dismissed
without just cause, he is entitled to the payment of his salaries corresponding to the
unexpired portion of the employment contract
MAGSALIN V NATIONAL ORGANIZATION OF
WORKING MEN
[PAGE 77]
Labor Law 1 A2010
LABAYOG V MY SAN BISCUITS INC
[PAGE 89]
5. PAST INFRACTIONS
PAST OFFENSES
STELLAR INDUSTRIAL SERVICE INC V NLRC
(PEPITO)
252 SCRA 323
REGALADO; January 24, 1996
NATURE
Special Civil Action for Certiorari
FACTS
- Stellar Industrial Services, Inc., an independent contractor engaged in the business of
providing manpower services, employed private respondent Roberto H. Pepito as a
janitor on January 27, 1975 and assigned the latter to work as such at the Maintenance
Base Complex of the Philippine Airlines in Pasay City.
- Pepito worked for 15 years.
- According to petitioner, private respondent committed infractions of company rules
ranging from tardiness to gambling, but he was nevertheless retained as a janitor out of
humanitarian consideration and to afford him an opportunity to reform.
- Stellar finally terminated private respondent's services on January 22, 1991 because of
Absent Without Official Leave/Virtual Abandonment of Work Absent from November 2 -
December 10, 1990.
- Private respondent had insisted that during the period in question he was unable to
report for work due to severe stomach pain and that, as he could hardly walk by reason
thereof, he failed to file the corresponding official leave of absence. Attached was a
medical certificate.
- Petitioner filed a complaint for illegal dismissal, illegal deduction and underpayment of
wages with prayer for moral and exemplary damages and attorney's fees.
- LA was of the view that Pepito was not entitled to differential pay, or to moral and
exemplary damages for lack of bad faith on the part of the company, he opined that
private respondent had duly proved that his 39-day absence was justified on account of
illness and that he was illegally dismissed without just cause. He ordered the respondent
to immediately reinstate complainant to his former position as Utilityman, without loss of
seniority rights and with full backwages and other rights and privileges appurtenant to his
position until he is actually reinstated.
- The respondent is further ordered to pay the complainant reasonable attorney's fees
equivalent to 10% of the amount recoverable by the complainant.
- LA’s decision was affirmed by NLRC
ISSUES
1. WON serious misconduct for nonobservance of company rules and regulations may
be attributed to Pepito
2. WON the extreme penalty of dismissal meted to him by Stellar may be justified under
the circumstances
HELD
1. NO
- Stellar's company rules and regulations on the matter could not be any clearer, to wit:
"Absence Without Leave"
Any employee who fails to report for work without any prior approval from his
superior(s) shall be considered absent without leave.
In the case of an illness or emergency for an absence of not more than one
(1) day, a telephone call or written note to the head office, during working
hours, on the day of his absence, shall be sufficient to avoid being
penalized.
In the case of an Illness or an emergency for an absence of two (2) days or
more, a telephone call to the head office, during regular working hours, on
the first day of his absence, or a written note to the head office, (ex.
telegram) within the first three (3) days of his absence, and the submission
of the proper documents (ex. medical certificate) On the first day he reports
after his absence shall be sufficient to avoid being penalized.
1st offense- three (3) days suspension
2nd offense- seven (7) days suspension
3rdoffense- fifteen (15) days suspension
4th offense- dismissal with a period of one (1) year
- 238 - Disini
- There was substantial compliance with said company rule by private respondent. He
immediately informed his supervisor of the fact that he could not report for work by
reason of illness. At the hearing, it was also established without contradiction that Pepito
was able to talk by telephone to one Tirso Pamplona, foreman, and he informed the latter
that he would be out for two weeks as he was not feeling well. Added to this is his letter
to the chief of personnel which states that, on November 2, 1990, he relayed to his
supervisor his reason for not reporting for work and that, thereafter, he made follow-up
calls to their office when he still could not render services. As earlier noted, these facts
were never questioned nor rebutted by petitioner.
- While there is no record to show that approval was obtained by Pepito with regard to his
absences, the fact remains that he complied with the company rule that in case of illness
necessitating absence of two days or more, the office should be informed beforehand
about the same that is, on the first day of absence. Since the cause of his absence could
not have been anticipated, to require prior approval would be unreasonable. On this
score, then, no serious misconduct may be imputed to Pepito. Necessarily, his dismissal
from work, tainted as it is by lack of just cause, was clearly illegal.
2. NO
- Petitioner's reliance on Pepito's past infractions as sufficient grounds for his eventual
dismissal, in addition to his prolonged absences, is unavailing. The correct rule is that
previous infractions may be used as justification for an employee's dismissal from work in
connection with a subsequent similar offense.
- In the present case, private respondent's absences, as already discussed, were
incurred with due notice and compliance with company rules and fie had not thereby
committed a "similar offense" as those lie had committed in the past. Furthermore, as
correctly observed by the labor arbiter, those past infractions had either been
"satisfactorily explained, not proven, sufficiently penalized or condoned by the
respondent." In fact, the termination notice furnished Pepito only indicated that he was
being dismissed due to his absences from November 2. 1990 to December 10, 1990
supposedly without any acceptable excuse therefor. There was no allusion therein that
his dismissal was due to his supposed unexplained absences on top of his past
infractions of company rules. To refer to those earlier violations as added grounds for
dismissing him is doubly unfair to private respondent. Significantly enough, no document
or any other piece of evidence was adduced by petitioner showing previous absences of
Pepito, whether with or without official leave.
Disposition Petition dismissed
LA CARLOTA PLANTERS ASSN V NLRC
(COMPACION)
298 SCRA 252
VITUG; October 27, 1998
NATURE
Petition for certiorari which seeks to set aside and nullify the decision of the NLRC
promulgated on 25 September 1995 setting aside the LA’s decision and directing the
respondent to pay complainant backwages and separation pay in lieu of reinstatement,
computed at one (1) month per year of service.
FACTS
- Compacion alleges that he was a regular employee of petitioner since 1988 hired as
truck driver; that on December 14, 1992, at the instance of the petitioner, he drove the
truck overloaded of sugarcane bound for La Carlota Sugar Central; that while driving
through Sitio Bacus, Ma-ao, Bago City, the road was very slippery causing the truck to be
outbalance (sic) resulting to the truck turning right side down; that he was not drunk when
he drove the truck on December 14, 1992; that the Security Guards of Central La Carlota
issued a clearance to the effect that he is cleared from whatever issues against him; that
Rene Baylon reported the incident only on March 1993 when the incident happened on
December 14, 1992 as shown by the Police Blotter; that because of his illegal dismissal,
he sought the help of a legal counsel who helped him in filing this case for which he
claims for payment of attorney's fees.
- On the other hand, petitioner alleges that Compacion is a truck driver of Nature's
Beauty Trucking Services; as such, he was assigned to Ma-ao Transloading Station, a
loading station of sugarcanes bound for Central La Carlota located at Brgy. Ma-ao, Bago
City, Negros Occidental; that on December 14, 1992, Compacion who was very drunk
and with a knife entered the Ma-ao Transloading Station and harassed the office
personnel to the extent of stabbing the person of Gerry Flores who fortunately was able
to escape the said assault; that despite the repeated warning made by the Shifting In-
charge Rene Baylon not to drive the truck, he drove the ten wheeler truck loaded with 18
tons of sugarcane bound for La Carlota Central in a reckless manner causing the truck to
turn right side down resulting in a damage to property paid by the owner to Mr. Eulalio
Pagunsan, owner of the bananas and pig pen hit and destroyed by the truck; that the
said Mr. Eulalio Pagunsan observed that the driver Felix Compacion, at the time of the
accident, was very drunk; that because of this accident which happened because of
reckless driving, the truck underwent major repair; that after the accident, driver Felix
Labor Law 1 A2010
Compacion was nowhere to be found, never reporting the accident to the police
authorities or to the owner; that despite repeated calls, he refused to meet the owner nor
did he report to the office thus prompting the latter to write him a letter dated January 4,
1993 suspending him for 30 days; further requiring him to report to the office and explain
why he should not be terminated.
- Petitioner further averred that during his employment, Compacion was paid wages and
other benefits in accordance with law; that at the time of the accident, there was no rain
and the road was not slippery; that at the time he stopped reporting, he has an
outstanding account with respondent in the amount of P3,650.00; that prior to this
accident on December 14, 1992, specifically on November 27, 1992, Felix Compacion
was caught stealing diesel fuel from the drums owned by La Carlota Planters Association
for which he was admonished and warned not to repeat the same.
ISSUE
WON there was valid, legal and just cause for the dismissal of private respondent by
petitioners
HELD
NO
Ratio The correct rule has always been that such previous offenses may be so used as
valid justification for dismissal from work only if the infractions are related to the
subsequent offense upon which basis the termination of employment is decreed. The
previous infraction, in other words, may be used if it has a bearing to the proximate
offense warranting dismissal.
Reasoning
- Petitioners contend that sufficient factual and legal bases exist to justify the dismissal of
private respondent for misconduct. It cites various infractions allegedly committed in the
past by private respondent; to wit:
a. Private respondent was caught twice stealing diesel fuel from the drum of the
petitioner's association;
b. He entered the transloading office on December 14, 1992 drunk, armed with bayonet
knife, and harassed the personnel therein, even unsuccessfully stabbing one Gerry
Flores for two (2) times; and
c. Private respondent failed to report for work since December 14, 1992 which is an
obvious sign of guilt.
- The reliance by petitioners on the past offenses of private respondent supposedly
dictating his eventual dismissal is unavailing. The complainant may have been at fault
when he figured in a vehicular accident causing damage to the company truck; that fault,
nevertheless, cannot be considered a just cause for dismissal. Indeed, it has once been
held that the penalty of dismissal would be grossly disproportionate to the offense of
driving through reckless imprudence resulting in damage to property. The claim of
drunkenness on the part of private respondent has not been substantiated; the allegation
is based solely on the uncorroborated statement made by one Rene Baylon in his
affidavit executed on 24 April 1993, months after the accident had occurred in December
of 1992.
Disposition the Court is constrained to dismiss, as it hereby so DISMISSES, the instant
petition for certiorari.
6. PROFESSIONAL TRAINING
RESIDENCY TRAINING
FELIX V BUENASEDA
[PAGE 55]
7. LOVE AND MORALS
IMMORALITY
SANTOS V NLRC (HAGONOY INSTITUTE ET AL)
287 SCRA 117
ROMERO; March 6, 1998
NATURE
- 239 - Disini
Petition for certiorari
FACTS
- Mrs. Martin and Petitioner Santos were both teachers at the Hagonoy Institute. Both
were married to different people. During the course of their employment, they fell in love,
and rumors about their relationship spread.
- Private respondent advised Mrs. Martin to take a leave of absence, which she ignored.
A week later, she was barred from reporting for work and was not allowed to enter
Hagonoy’s premises, effectively dismissing her from employment
- Mrs. Martin’s case for illegal dismissal was successful because the private respondent
failed to accord her the necessary due process in her dismissal.
- Meanwhile, HI set up a committee to investigate the veracity of the rumors. After 2
weeks, the committee confirmed the illicit relationship
- in view of this finding, petitioner was charged administratively for immorality and was
required to present his side of the controversy. 5 months later, he was informed of his
dismissal. He thus filed a complaint for illegal dismissal.
- After a full blown trial was conducted, the Labor Arbiter dismissed his complaint, but
awarded him money as financial assistance.
- petitioner filed an appeal with the NLRC which was dismissed for lack of merit
ISSUE
WON the illicit relationship between the petitioner and Mrs. Martin could be considered
immoral as to constitute just cause to terminate an employee under Article 282 of the
Labor Code
HELD
YES
Reasoning
- Section 94 10 of the Manual of Regulations for Private Schools: Causes of Terminating
Employment. In addition to the just cases enumerated in the Labor Code, the
employment of school personnels, including faculty, may be terminated for any of the
following causes:xxx xxx xxx E. Disgraceful or immoral conduct.
- To constitute immorality, the circumstances of each particular case must be holistically
considered and evaluated in light of the prevailing norms of conduct and applicable laws.
America jurisprudence has defined immorality as a course of conduct which offends the
morals of the community and is a bad example to the youth whose ideals a teacher is
supposed to foster and to elevate, the same including sexual misconduct. Thus, in
petitioner's case, the gravity and seriousness of the charges against him stem from his
being a married man and at the same time a teacher.
- Having an extra-marital affair is an affront to the sanctity of marriage, which is a basic
institution of society. Even our Family Code provides that husband and wife must live
together, observe mutual love, respect and fidelity. This is rooted in the fact that both our
Constitution and our laws cherish the validity of marriage and unity of the family. Our
laws, in implementing this constitutional edict on marriage and the family underscore
their permanence, inviolability and solidarity.
- As a teacher, petitioner serves as an example to his pupils, especially during their
formative years and stands in loco parentis to them. To stress their importance in our
society, teachers are given substitute and special parental authority under our laws.
- Teachers must adhere to the exacting standards of morality and decency. He must
freely and willingly accept restrictions on his conduct that might be viewed irksome by
ordinary citizens. The personal behavior of teachers, in and outside the classroom, must
be beyond reproach.
- Accordingly, teachers must abide by a standard of personal conduct which not only
proscribes the commission of immoral acts, but also prohibits behavior creating a
suspicion of immorality because of the harmful impression it might have on the students.
- Likewise, they must observe a high standard of integrity and honesty.
- From the foregoing, it seems obvious that when a teacher engages in extra-marital
relationship, especially when the parties are both married, such behavior amounts to
immorality, justifying his termination from employment.
Disposition Petition DISMISSED
LOVE
CHUA-QUA V CLAVE
189 SCRA 117
REGALADO; August 30, 1990
NATURE
Petition for certiorari.
FACTS
- This would have been just another illegal dismissal case were it not for the controversial
and unique situation that the marriage of herein petitioner, then a classroom teacher, to
Labor Law 1 A2010
her student who was fourteen (14) years her junior, was considered by the school
authorities as sufficient basis for terminating her services.
- Private respondent Tay Tung High School, Inc. is an educational institution in Bacolod
City. Petitioner had been employed therein as a teacher since 1963 and, in 1976 when
this dispute arose, was the class adviser in the sixth grade where one Bobby Qua was
enrolled. Since it was the policy of the school to extend remedial instructions to its
students, Bobby Qua was imparted such instructions in school by petitioner. In the
course thereof, the couple fell in love and on December 24, 1975, they got married in a
civil ceremony solemnized in lloilo City by Hon. Cornelio G. Lazaro, City Judge of Iloilo.
- Petitioner was then thirty (30) years of age but Bobby Qua, being sixteen (16) years old,
consent and advice to the marriage was given by his mother, Mrs. Concepcion Ong.
Their marriage was ratified in accordance with the rites of their religion in a church
wedding solemnized by Fr. Nick Melicor at Bacolod City on January 10, 1976.
- On February 4, 1976, private respondent filed with the subregional office of the
Department of Labor at Bacolod City an application for clearance to terminate the
employment of petitioner on the following ground: "For abusive and unethical conduct
unbecoming of a dignified school teacher and that her continued employment is inimical
to the best interest, and would downgrade the high moral values, of the school."
- Petitioner was placed under suspension without pay on March 12, 1976.
- Executive Labor Arbiter rendered an "Award" in favor of private respondent granting the
clearance to terminate the employment of petitioner.
- NLRC unanimously reversed the Labor Arbiter's decision and ordered petitioner's
reinstatement with backwages.
- Minister of Labor reversed the decision of theNLRC.
- Petitioner appealed the said decision to the Office of the President of the Philippines.
Presidential Executive Assistant Jacobo C. Clave, rendered its decision reversing the
appealed decision.
- However, in a resolution dated December 6, 1978, public respondent, acting on a
motion for reconsideration of herein private respondent and despite opposition thereto,
reconsidered and modified the aforesaid decision, this time giving due course to the
application of Tay Tung High School, Inc. to terminate the services of petitioner.
ISSUE
WON there is substantial evidence to prove that the antecedent facts which culminated in
the marriage between petitioner and her student constitute immorality and or grave
misconduct
HELD
NO
Ratio To constitute immorality, the circumstances of each particular case must be
holistically considered and evaluated in the light of prevailing norms of conduct and the
applicable law.
Reasoning
- Contrary to what petitioner had insisted on from the very start, what is before us is a
factual question, the resolution of which is better left to the trier of facts.
- Considering that there was no formal hearing conducted, we are constrained to review
the factual conclusions arrived at by public respondent, and to nullify his decision through
the extraordinary writ of certiorari if the same is tainted by absence or excess of
jurisdiction or grave abuse of discretion. The findings of fact must be supported by
substantial evidence; otherwise, this Court is not bound thereby.
- We rule that public respondent acted with grave abuse of discretion.
- As earlier stated, from the outset even the labor arbiter conceded that there was no
direct evidence to show that immoral acts were committed.
- Nonetheless, indulging in a patently unfair conjecture, he concluded that "it is however
enough for a sane and credible mind to imagine and conclude what transpired during
those times." In reversing his decision, the National Labor Relations Commission
observed that the assertions of immoral acts or conducts are gratuitous and that there is
no direct evidence to support such claim, a finding which herein public respondent
himself shared.
- What is revealing, however, is that the reversal of his original decision is inexplicably
based on unsubstantiated surmises and non sequiturs which he incorporated in his
assailed resolution in this wise:
". . . While admittedly, no one directly saw Evelyn Chua and Bobby Qua doing
immoral acts inside the classroom, it seems obvious and this Office is convinced that
such a happening indeed transpired within the solitude of the classroom after regular
class hours. The marriage between Evelyn Chua and Bobby Qua is the best proof
which confirms the suspicion that the two indulged in amorous relations in that place
during those times of the day..."
- With the finding that there is no substantial evidence of the imputed immoral acts, it
follows that the alleged violation of the Code of Ethics governing school teachers would
have no basis. Private respondent utterly failed to show that petitioner took advantage of
her position to court her student. If the two eventually fell in love, despite the disparity in
their ages and academic levels, this only lends substance to the truism that the heart has
reasons of its own which reason does not know. But, definitely, yielding to this gentle and
universal emotion is not to be so casually equated with immorality. The deviation of the
- 240 - Disini
circumstances of their marriage from the usual societal pattern cannot be considered as
a defiance of contemporary social mores.
- It would seem quite obvious that the avowed policy of the school in rearing and
educating children is being unnecessarily bannered to justify the dismissal of petitioner.
This policy, however, is not at odds with and should not be capitalized on to defeat the
security of tenure granted by the Constitution to labor. In termination cases, the burden of
proving just and valid cause for dismissing an employee rests on the employer and his
failure to do so would result in a finding that the dismissal is unjustified.
Disposition Petition for certiorari granted. Decision of respondent annulled and set aside.
DUNCAN ASSOCIATION V GLAXO-WELLCOME
[PAGE 43]
8. VIOLATION COMPANY RULES
APARENTE SR V NLRC (COCA-COLA BOTTLERS
PHIL)
331 SCRA 82
DE LEON JR; April 27, 2000
FACTS
- Rolando Aparante, Sr. was first employed by private respondent Coca-Cola Bottlers
Phils., Inc. (CCBPI), General Santos City Plant as assistant mechanic in April 1970. He
rose through the ranks to eventually hold the position of advertising foreman until his
termination on May 12, 1988 for alleged violation of company rules and regulations. His
monthly salary at the time of his termination was P5,600.
- On November 9, 1987, Aparante drove CCBPI's advertising truck to install a panel sign.
He sideswiped Marilyn Tejero, a ten-year old girl. He brought Tejero to Heramil Clinic for
first aid treatment. As the girl suffered a 2 cm fracture on her skull which was attributed to
the protruding bolt on the truck's door, she was subsequently transferred to the General
Santos City Doctor's Hospital where she underwent surgical operation. She stayed in the
hospital for about a month.
- Five days after the accident, he reported the incident to CCBPI. At about the same time,
he submitted himself to the police authorities at Polomolok, South Cotabato for
investigation where it was discovered that he had no driver's license at the time of the
accident. In view thereof, FGU Insurance Corporation, an insurer of CCBPI's vehicles,
did not reimburse the latter for the expenses it incurred in connection with Tejero's
hospitalization – a total amount of P19,534.45.
- CCBPI conducted an investigation of the incident where Aparente was given the
opportunity to explain his side and to defend himself.
On May 12, 1988, Aparente was dismissed for having violated the company rules and
regulations particularly Sec. 12 of Rule 005-858 for blatant disregard of established
control procedures resulting in company damages.
- The Labor Arbiter ordered his reinstatement without back wages. The NLRC affirmed
but reversed its ruling upon motion of CCBPI. It declared the dismissal as one for just
cause and effected after observance of due process.
ISSUES
1. WON the NLRC erred in holding that CCBPI afforded petitioner due process
2. WON the NLRC erred in upholding the dismissal despite its initial finding that the
CCBPI had implicitly tolerated petitioner’s driving without a license
3. WON the infraction committed by petitioner warrants the penalty of dismissal despite
the fact that it was his first offense during his 18 long years of satisfactory and
unblemished service
HELD
1. NO
Ratio The essence of due process does not necessarily mean or require a hearing but
simply a reasonable opportunity or a right to be heard or as applied to administrative
proceedings, an opportunity to explain one's side. In labor cases, the filing of position
papers and supporting documents fulfill the requirements of due process.
Reasoning
- Aparente was fully aware that he was being investigated for his involvement in the
vehicular accident that took place on November 9, 1987. It was also known to him that as
a result of the accident, the victim suffered a 2 cm fracture on her skull which led to the
latter's surgical operation and confinement in the hospital for which CCBPI incurred
expenses amounting to P19,534.45 which FGU Insurance Corporation refused to
reimburse upon finding that he was driving without a valid driver's license. Thus, being
aware of all these circumstances and the imposable sanctions under CCBPI's Code of
Disciplinary Rules and Regulations, he should have taken it upon himself to present
evidence to lessen his culpability.
2. NO
Labor Law 1 A2010
Reasoning
- According to Aparente, he informed the company that he had lost his license five
months before the accident. Notwithstanding such fact, the company allowed him to
continue driving the vehicle assigned to him. Thus, he shifts the blame to the company,
claiming that it should have simply ordered him to desist from driving the vehicle once it
was informed of the loss of his license. His contention is belied by his very own
admission in his position papers filed before the Labor Arbiter and the NLRC that the
company had in fact prohibited him from driving immediately after he lost his license, and
had requested him to secure a new license. However, through misrepresentations, he led
CCBPI to believe that he had procured another driver's license. Thus, he was permitted
to drive again.
3. YES
Ratio The law warrants the dismissal of an employee without making any distinction
between a first offender and a habitual delinquent where the totality of the evidence was
sufficient to warrant his dismissal. In protecting the rights of the laborer, the law
authorizes neither oppression nor self-destruction of the employer.
Reasoning
- Company policies and regulations, unless shown to be grossly oppressive or contrary to
law, are generally valid and binding on the parties and must be complied with until finally
revised or amended, unilaterally or preferably through negotiation, by competent
authority. The Court has upheld a company's management prerogatives so long as they
are exercised in good faith for the advancement of the employer's interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or
under valid agreements.
- First, Aparente's dismissal is justified by Company rules and regulations. It is true that
his violation of company rules is his first offense. Nonetheless, the damage caused to
private respondent amounted to more than P5,000, thus, the penalty of discharge is
properly imposable as provided by CCBPI's Code of Disciplinary Rules and Regulations.
- Second, Article 282, in order that an employer may dismiss an employee on the ground
of willful disobedience, there must be concurrence of at least two requisites: The
employee's 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, made known to the employee and must pertain to the duties
which he had been engaged to discharge. We have found these requisites to be present
in the case at bar. The evidence clearly reveals the willful act of Aparente in driving
without a valid driver's license, a fact that he even tried to conceal during the
investigation conducted by CCBPI. Such misconduct should not be rewarded with re-
employment and back wages, for to do so would wreak havoc on the disciplinary rules
that employees are required to observe.
- In the instant case, we find the award to petitioner of separation pay by way of financial
assistance equivalent to 1/2 month's pay for every year of service equitable. Although
meriting termination of employment, petitioner's infraction is not as reprehensible or
unscrupulous as to warrant complete disregard for the fact that this is his first offense in
an employment that has spanned 18 long years.
Disposition Decision of the NLRC is AFFIRMED.
9. CRIMINAL CASE
EFFECT OF ACQUITTAL
RAMOS V NLRC
298 SCRA 225
PUNO; October 21, 1998
NATURE
Petition for certiorari to annul NLRC decision
FACTS
- In 1978, Elizabeth Ramos was employed by United States Embassy Filipino Employees
Credit Cooperative (USECO)
- In 1993, the USECO Board created an Audit and Inventory Committee to determine
whether USECO has a sound financial management and control mechanism.
- The committee found anomalies in USECO’s lending transactions. Petitioner and her
co-employees, Luz Coronel and Nanette Legaspi, were called to shed light on some
items in the Audit Committee Report, such as unrecorded loans, fabricated ledger,
falsification of documents, accommodations of payroll checks, encashment of
check/CPAs, resigned members, unrecorded loan of resigned members and withdrawal
- 241 - Disini
of more than the deposits.
- During the meeting, Beth admitted her serious offense in regard to falsification of
documents. When asked by the Board to explain how recently resigned members and
other resigned employees in the past were able to secure loans, Beth replied that she
‘just wanted to help members without regard to existing policies.
- In her written explanation, Beth said that the loans are approved based on prerogatives
of individuals in authority. She said that, “it is unfortunate that the USECU Staff had to
resort to creating dummy records. But since the loans are duly acknowledged by the
borrowers in other legitimate documents, it is readily apparent that the records were
made simply to accommodate those borrowers beyond the authorized limits, but never,
never to defraud USECU.”
- Ramos was preventively suspended for 30 days. Later, petitioner was placed on forced
leave with pay, pending the completion of the investigation.
- USECO commissioned an external auditing firm to examine the irregularities discovered
in its lending practices. The auditor confirmed the irregularities and also discovered
shortages in bank deposits.
- USECO dismissed the petitioner for loss of trust and confidence. Petitioner countered
with a complaint for illegal dismissal, illegal suspension, underpayment of salary, moral
damages and attorney’s fees.
- Labor Arbiter sustained the suspension and dismissal of petitioner but ordered the
payment of her unpaid salary.
ISSUES
1. WON there is just cause for petitioner’s suspension and dismissal
2. WON the NLRC committed grave abuse of discretion in granting private respondent’s
second motion for reconsideration
HELD
1. YES
- Position of petitioner as Management Assistant requires a high degree of trust and
confidence.
- Loss of confidence is a valid ground for dismissal of an employee. In the case at bar,
USECO proved that its loss of confidence on petitioner has a rational basis. The findings
of the labor arbiter on this factual issue are supported by the evidence.
- Petitioner's explanation that the "loan practices" were made for the benefit of the
borrowing members and not to defraud USECO cannot exonerate her. Her unsound
practices endangered the financial condition of USECO because of the possibility that
the loans could not be collected at all.
- Petitioner was not denied due process before she was suspended and later dismissed.
The records show that petitioner was called by the USECO Board of Directors and
confronted with the findings of the Audit, and Inventory Committee showing the
irregularities she committed. She was asked to explain in writing these irregularities.
Petitioner submitted her written explanation. Thus, petitioner cannot complain that she
did not understand the charges against her. She is educated and she immediately
explained her side. Due process simply demands an opportunity to be heard and this
opportunity was not denied her.
2. NO
- Section 14 of the Rules of the NLRC provides:
Section. 14. Motions for Reconsideration.--Motions for reconsideration of any order,
resolution or decision of the Commission shall not be entertained except when based
on palpable or patent errors, provided that the motion is under oath and filed within
ten (10) calendar days from receipt of the order, resolution or decision, with proof of
service that a copy of the same has been furnished, within the reglementary period,
the adverse party, and provided further that only one such motion from the same party
shall be entertained.
- The NLRC initially reversed the ruling of the labor arbiter on the grounds that: (1)
petitioner was denied procedural due process and (2) the criminal case for estafa filed
against her has been dismissed by the Manila Prosecutor's Office for insufficiency of
evidence, particularly, for lack of proof that the USECO was damaged by the acts
attributed to petitioner.
- As discussed above, petitioner was not denied due process.
- Similarly, it is a well established rule that the dismissal of the criminal case against an
employee shall not necessarily be a bar to his dismissal from employment on the ground
of loss of trust and confidence. The NLRC corrected these patent errors when it granted
private respondent's second motion for reconsideration.
Disposition Petition dismissed for lack of merit.
CONVICTION
SAMPAGUITA GARMENTS CORP V NLRC (SANTOS)
233 SCRA 260
CRUZ; June 17, 1994
Labor Law 1 A2010
NATURE
Petition for review of a resolution of the NLRC
FACTS
- Theft was claimed to have been done by Santos, employee of Sampaguita. It was
alleged she attempted to bring out a piece of cloth w/o permission.
- She was dismissed on this ground. She filed complaint for illegal dismissal. Labor
Arbiter ruled in favor of Sampaguita. NLRC reversed and ordered reinstatement.
- Sampaguita also filed criminal action against Santos. She was found guilty.
- Santos moved for execution of NLRC decision. Sampaguita opposed and invoked her
conviction in the criminal case.
ISSUE
WON subsequent conviction in criminal prosecution for an offense will affect a previous
administrative decision which absolved the employee of the same offense
HELD
YES
- Once judgment has become final and executory, it can no longer be disturbed except
only for correction of clerical errors or where supervening events render its execution
impossible or unjust.
- Here, the decision of NLRC ordering reinstatement had become final and executory.
Even so, we find that NLRC wasn’t correct in sustaining implementation
- The affirmance by RTC and CA of private respondent's conviction is justification enough
for NLRC to exercise this authority and suspend execution of its decision. Such
conviction, also upheld by this Court is a supervening cause that rendered unjust and
inequitable the decision mandating the private respondent's reinstatement.
- Separation pay shall be allowed as a measure of social justice only in those instances
where the employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character. A contrary rule would, as the petitioner correctly
argues, have the effect of rewarding rather than punishing the erring employee for his
offense.
- The only award to which private respondent may be entitled is for the amount as a
penalty for effecting her dismissal without complying with the procedural requirements.
DISMISSAL-CRIMINAL CASE
LACORTE V INCIONG (ESTRELLA, ASEAN
FABRICATORS INC)
166 SCRA 1
FERNAN; September 27, 1988
NATURE
Certiorari and Mandamus
FACTS
- Salvador Lacorte was hired as a warehouseman whose duties were among others, to
receive and store the raw and junk materials used by respondent in its business.
- January 19, 1977: Lacorte offered to purchase some obsolete, defective and non-
usable junk materials from AFI, who agreed and issued a cash invoice for the purchase
of the scrap items.
- When Lacorte tried to bring out these items he was accosted by AFI' s security guard
and in the course of the investigation, it was discovered that the items sought to be
brought out by complainant weighed more than what he actually purchased.
- Furthermore, it was found out that the items were not junk since some parts were brand
new and usable.
- As a consequence the respondent filed a case for qualified theft against complainant
before the Provincial Fiscal of Bulacan.
- The criminal complaint was however, dismissed for insufficiency of evidence.
- The application of AFI to terminate LACORTE was granted as the latter was found by
Labor Regional Director Estrella, to have committed certain acts in breach of the trust
and confidence of his employer.
- On appeal, Deputy Minister of Labor Amado Gat Inciong affirmed the aforementioned
order. Hence, this present recourse.
ISSUE
WON public respondents acted arbitrarily and/or with grave abuse of discretion
(considering that the criminal complaint was dismissed) connection with the grant of the
application for clearance to terminate the employment of petitioner filed by AFI
HELD
YES
- 242 - Disini
- The purpose of the proceedings before the fiscal is to determine if there is sufficient
evidence to warrant the prosecution and conviction of the accused. In assessing the
evidence before him, the fiscal considers the basic rule that to successfully convict the
accused the evidence must be beyond reasonable doubt and not merely substantial.
- On the other hand, to support findings and conclusion of administrative bodies only
substantial evidence is required.
- The evidence presented before the two bodies may not be necessarily Identical.
- The appreciation of the facts and evidence presented is an exercise of discretion on the
part of administrative officials over which one cannot impose his conclusion on the other.
- Sea-Land Service, Inc. v. NLRC: “The conviction of an employee in a criminal case is
not indispensable to warrant his dismissal, and the fact that a criminal complaint against
the employee has been dropped by the fiscal is not binding and conclusive upon a labor
tribunal.
- Also, the Court did not believe Lacorte’s claim that the real reason behind his
termination was his union activities.
- As regards Lacorte’s claim that there was no actual weighing and examination of the
boxes containing the scrap materials he allegedly stole, the Court ruled that it was too
late in the day for Lacorte to raise these matters of facts in this petition and that his
evidence does not substantiate his claim.
- The Court considered the records of this case as a whole, and was convinced that there
is substantial basis for the Orders issued by respondent labor officials.
Disposition Petition is dismissed for lack of merit.
GUILT OR INNOCENCE
CHUA V NLRC
218 SCRA 545
FELICIANO; February 8, 1993
NATURE
Petition for certiorari
FACTS
- The Union of Filipro Employees, of which petitioner Chua was a member, declared a
strike against the private respondent company, Nestle Philippines, Inc. During the strike,
several of the striking employees threw stones at the trucks entering and leaving the
company premises. One truck. whose driver was rendered unconscious by a stone
hitting him on the head, rammed a private vehicle and crashed into a beauty parlor
resulting in the death of three persons and extensive damage to private property.
Consequently, a criminal complaint for multiple murder and frustrated murder was filed
against petitioner and several other employees who were believed to be responsible for
the stoning incident which resulted in the deaths and property damage. The criminal
complaint was dismissed for insufficiency of evidence. The strike itself was, however,
declared illegal in two decisions of the National Labor Relations Commission (NLRC)
which were affirmed by the Supreme Court.
- Subsequently, the union and its striking members offered to return to work and were
readmitted by the company except 69 union officers and 33 union members, including
petitioner. The union's counsel wrote to the private respondent requesting the
reinstatement of five employees, including petitioner. The request, however, was denied.
Petitioner received a notice of dismissal from private respondent for having participated
in the illegal strike.
- Two days later, petitioner initiated a complaint for illegal dismissal against private
respondent company. The Labor Arbiter rendered a decision finding that petitioner had
been validly dismissed. It was held that the evidence introduced by private respondent, in
the form of the testimony of Maniego, Personnel Supervisor of its Cabuyao Plant, that he
positively saw and identified petitioner as one of the union members who actively
participated and manned the barricades during the strike is "a concrete manifestation of
an illegal act that is frowned upon by law." Wishing to be reinstated also, petitioner
appealed the Labor Arbiter's decision to the NLRC which, however, affirmed in toto the
decision of the Labor Arbiter. Hence, this petition.
ISSUE
WON the NLRC committed grave abuse of discretion in affirming the decision of the
Labor Arbiter
HELD
NO
- We find this contention to be without merit, Petitioner's participation in the illegal strike
and his commission of illegal acts while the strike was in progress, i.e., he participated in
the barricade which barred people from entering and/or leaving the employer's premises,
had been sufficiently established by substantial evidence, including the testimony of Mr.
Maniego, Personnel Supervisor at the Cabuyao Plant. Mr. Maniego testified, among
other things, that he was not able to report to work because of the presence of the
Labor Law 1 A2010
barricade. The law prohibits any person engaged in picketing from obstructing free
ingress to or egress from the employer's premises for lawful purposes.
- While the criminal complaint where petitioner was included as one of the accused was
dismissed for insufficiency of evidence, the Court considers that the dismissal of the
criminal complaint did not preclude a finding by the competent administrative authorities,
that petitioner had indeed committed acts inimical to the interest of his employer.
- Private respondent's guilt or innocence in the criminal case is not determinative of the
existence of a just or authorized cause for his dismissal. This doctrine follows from the
principle that the quantum and weight of evidence necessary to sustain conviction in
criminal cases are quite different from the quantum of evidence necessary for affirmance
of a decision of the Labor Arbiter and of the NLRC.
- Since petitioner's participation in the unlawful and violent strike was amply shown by
substantial evidence, the NLRC was correct in holding that the dismissal of petitioner
was valid being based on lawful or authorized cause.
Disposition Petition dismissed.
10. MOONLIGHTING
AGABON V NLRC
[PAGE 35]
11. SUSPICION
EASTERN TELECOMMUNICATIONS PHILS INC V
DIAMSE
491 SCRA 239
YNAREZ-SANTIAGO; June 16, 2006
FACTS
- Maria Charina Damse is the Head of Building Services of ETPI. She requested a cash
advance of P150k for the renewal of ETPI’s business permits. The company’s policy is
cash advances should be liquidated 15 days from the completion of the project or
activity, or else it will be deducted from the employee’s salary, benefits or receivables.
- She was able to use a total of P97,151. The last payment was made on Feb 26, 2001.
She wasn’t able to liquidate the cash advance within 15 days.
- On July 13, 2001, ETPI’s Finance Dept advised her to liquidate the amount. She
submitted a liquidation report on August 13, 2001. This report was refused by the Fin
Dept for being late. She was told that the entire amount would just be deducted from her
monthly salary starting Sept 2001. By Dec 2001, a total of P23k had been deducted from
her salary. She then requested for reimbursement for P97,151. This was reviewed by her
supervisor and approved by HR and Fin Dept, and the amt was credited to her ATM
payroll acct.
- The Internal Audit Dept (IAD) apparently didn’t know what was going on. In Jan 2002,
IAD found that her payroll acct had P86k. They required her to withdraw P52,533 for the
unliquidated amt minus the deductions. She complied. The next day, they asked her
again for P74,462.82, which is the difference bet the P97k++ credited to her acct minus
the P23k deductions. She complied again. (I don’t understand how the computations
were made.)
- The next day, ETPI required Diamse to explain why she should not be disciplined for
unauthorized diversion or application of company funds, and for acts of dishonesty,
fraud, deceit and willful breach of trust. She explained what that the liquidation report
wasn’t accepted by the Fin Dept and she was instead advised to do as she did. A month
later, she was dismissed.
- LA ruled in her favor. NLRC reversed. CA reversed NLRC and ordered separation pay
etc instead of reinstatement because of the strained relations bet the parties.
ISSUE
WON Diamse was illegally terminated
HELD
NO
- Employer wasn’t able to prove that the employee was terminated for valid and just
cause.
LOSS OF TRUST AND CONFIDENCE v. SUSPICION
- To be a valid cause for dismissal, the loss of trust and confidence must be based on a
willful breach 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. Loss of trust and
confidence 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.
- 243 - Disini
- The SC held that the mere delay in the liquidation of the cash advance cannot sustain
a finding of loss of trust and confidence. It was based on mere suspicion, without
evidence to show that Diamse misappropriated funds. In fact, all documents submitted
were found to be authentic. The evidence on record shows that Diamse was able to
liquidate the cash advance and that the ensuing delay in its liquidation was attributable to
ETPI.
- It cannot be presumed that Diamse misappropriated the funds because to do so would
do violence to her right to security of tenure and the well-settled rule that the burden of
proof is on the employer to establish the ground for dismissal. Suspicion has never been
a valid ground for dismissal and the employee's fate cannot, in justice, be hinged upon
conjectures and surmises.
- More suspicion with regard to the P86k in her ATM acct: The company suspected that it
came from the P97k erroneously credited to her acct. They didn’t bother to prove it. They
weren’t able to show any bank statements to that effect.
Disposition Petition denied. CA decision affirmed and modified in that this case be
REMANDED to the Labor Arbiter for the sole purpose of computing Diamse's full
backwages, etc.
14.06 TRANSFERS – DISCHARGE AND
SUSPENSION
LANZADERAS V AMETHYST SECURITY AND
GENERAL SERVICES INC
404 SCRA 505
QUISUMBING; June 20, 2003
FACTS
- Amethyst has been supplying guard for Resin Industrial Chemical Corp (RICC) and its
sister company Phil. Iron Construction and Marine Works (PICMW) since 1968. One
condition was that Amethyst must supply guards between 25 – 45 years old.
- In 1998, RICC/PICMW reminded Amethyst of this condition. Amethyst in turn required
of the guards assigned to RICC/PICMW to submit copies of their birth certificates. Those
beyond the limit were told to report to the office for reassignment.
- Amethyst was able to renegotiate with RICC/PICMW to the effect that those beyond the
age limit could be assigned as firewatch guards in the same company. (SO they had a
choice of being assigned as firewatch guards in the same company or be transferred to
Cagayan de Oro.)
- The petitioners chose neither option and didn’t report for work. They filed illegal
dismissal with the LA.
- LA held Amethyst and RICC/PICMW solidarily liable for P1.25M to the petitioners. On
appeal, NLRC reversed and set aside the LA’s decision on the ground that the relief of
petitioners from their posts was a legitimate exercise of prerogative on RICC/PICMW’s
part.
- CA denied petitioners’ appeal on procedural grounds.
ISSUE
WON petitioners were illegally dismissed
HELD
NO
- In the first place, the petitioners knew of the age limit and acted in bad faith when they
weren’t honest about their ages.
- The condition imposed by respondent RICC/PICMW, as a principal or client of the
contractor Amethyst, regarding the age requirement of the security guards to be
designated in its compound, is a valid contractual stipulation. It is an inherent right of
RICC/PICMW, as the principal or client, to specify the qualifications of the guards who
shall render service pursuant to a service contract. It stands to reason that in a service
contract, the client may require from the service contractor that the personnel assigned to
the client should meet certain standards and possess certain qualifications, conformably
to the client's needs.
- Security of tenure, although provided in the Constitution, does not give an employee an
absolute vested right in a position as would deprive the company of its prerogative to
change their assignment or transfer them where they will be most useful. When a
transfer is not unreasonable, nor inconvenient, nor prejudicial to an employee; and it
does not involve a demotion in rank or diminution of his pay, benefits, and other
privileges, the employee may not complain that it amounts to a constructive dismissal.
- Case law recognizes the employer's right to transfer or assign employees from one
area of operation to another, or one office to another or in pursuit of its legitimate
business interest, provided there is no demotion in rank or diminution of salary, benefits
Labor Law 1 A2010
and other privileges and not motivated by discrimination or made in bad faith, or effected
as a form of punishment or demotion without sufficient cause. This matter is a
prerogative inherent in the employer's right to effectively control and manage the
enterprise.
- The petitioners were given an option to stay at RICC/PICMW as firewatch guards or to
be transferred to CDO as security guards. The petitioners didn’t report to the office to
receive new deployment instructions. They have no excuse not to heed management’s
exercise of management prerogative.
Disposition Petition denied. CA affirmed.
Note The SC also denied on procedural grounds but went into the issues to settle the
matter completely.
WESTIN PHIL PLAZA HOTEL V NLRC (RODRIGUEZ)
306 SCRA 631
QUISUMBING; May 3, 1999
NATURE
Petition to review a decision of the NLRC
FACTS
- Private respondent Len Rodriguez was continuously employed by petitioner in various
capacities (pest controller, room attendant, bellman, and doorman) from July 1, 1977
until his dismissal on February 16, 1993.
- On December 28, 1992, private respondent received a memorandum from the
management transferring him from doorman to linen room attendant. The position of
doorman is categorized as guest-contact position while linen room attendant is a non-
guest contact position.
- The transfer was allegedly taken because of the negative feedback on the manner of
providing service to hotel guests by private respondent.
- Instead of accepting his new assignment, private respondent went on vacation leave
- The President of the National Union of Workers in Hotels, Restaurants and Allied
Industries (NUWHRAIN) appealed to management concerning private respondent's
transfer, but the director for human resources development, clarified that private
respondent's transfer is merely a lateral movement. She explained that management
believed that private respondent was no longer suited to be in a guest-contact position,
but there was no demotion in rank or pay.
- When private respondent reported back to work, he still did not assume his post at the
linen room.
- On February 11, 1993, private respondent was served with a memorandum asking him
to explain in writing why no disciplinary action should be taken against him for
insubordination. The memorandum noted that while private respondent regularly came to
the hotel everyday, he just stayed at the union office.
- In his reply private respondent merely questioned the validity of his transfer without
giving the required explanation.
- On February 16, 1993, petitioner terminated private respondent's employment on the
ground of insubordination.
- Private respondent filed with the Department of Labor and Employment a complaint for
illegal dismissal against petitioner.
- The labor arbiter declared that the dismissal was legal. Accordingly, the complaint was
dismissed for lack of merit.
- On appeal, public respondent reversed the judgment of the labor arbiter. It held that
there was no just cause in dismissing private respondent.
- Its motion for reconsideration having been denied, petitioner filed this instant petition.
ISSUES
1. WON private respondent was guilty of insubordination, thus giving petitioner just and
valid cause for dismissal
2. WON the order of transfer was legal
HELD
1. YES
- Under Article 282 (a) of the Labor Code, as amended, an employer may terminate an
employment for serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work. But disobedience to
be a just cause for dismissal envisages the concurrence of at least two (2) requisites: (a)
the employee's assailed conduct must have been willful or intentional, the willfulness
being characterized by a wrongful and perverse attitude; and, (b) the order violated must
have been reasonable, lawful, made known to the employee and must pertain to the
duties which he has been engaged to discharge.
- In the present case, the willfulness of private respondent's insubordination was shown
by his continued refusal to report to his new work assignment: 1. Upon receipt of the
order of transfer, private respondent simply took an extended vacation leave; 2. When
he reported back to work, he did not discharge his duties as linen room attendant—while
he came to the hotel everyday, he just went to the union office; 3. when he was asked to
- 244 - Disini
explain why no disciplinary action should be taken against him, private respondent
merely questioned the transfer order without submitting the required explanation.
2. YES
- It must be emphasized that this Court has recognized and upheld the prerogative of
management to transfer an employee from one office to another within the business
establishment, provided that there is no demotion in rank or a diminution of his salary,
benefits and other privileges.
- This is a privilege inherent in the employer's right to control and manage its enterprise
effectively.
- Besides, it is the employer's prerogative, based on its assessment and perception of its
employee's qualifications, aptitudes and competence, to move him around in the various
areas of its business operations in order to ascertain where the employee will function
with utmost efficiency and maximum productivity or benefit to the company.
- An employee's right to security of tenure does not give him such a vested right in his
position as would deprive the company of its prerogative to change his assignment or
transfer him where he will be most useful.
- Petitioner is justified in reassigning private respondent to the linen room. Petitioner's
right to transfer is expressly recognized in the collective bargaining agreement between
the hotel management and the employees union as well as in the hotel employees
handbook. The transfer order was issued in the exercise of petitioner's management
prerogative in view of the several negative reports vis-a-vis the performance of private
respondent as doorman. It was a lateral movement as the positions of doorman and linen
room attendant are equivalent in rank and compensation. It was a reasonable relocation
from a guest contact area to a non-guest contact area.
Disposition Petition granted. NLRC decision reversed.
CASTILLO V NLRC (PCIB)
308 SCRA 326
GONZAGA-REYES; June 1999
NATURE
Petition for certiorari seeking to annul the NLRC Decision
FACTS
- Castillo was an employee of Philippine Commercial & International Bank (PCIB) as
Foreign Remittance Clerk. A Jordanian national, went to PCIB’s Ermita branch to claim a
foreign remittance in the amount of US$2T. He paid P450 as commission charges as
computed by petitioner. Upon re-computation, the correct amount of the charges
amounted to only P248.75.
- Because of this incident, Castillo received a Memorandum regarding her
REASSIGNMENT. “In line with the Bank’s policy on flexibility employee development and
internal control, effective immediately, you are hereby reassigned temporarily as
Remittance Clerk-Inquiry.”
- She then filed with the NCR Arbitration Branch a complaint-affidavit for illegal dismissal
asking for her reinstatement as Foreign Remittance Clerk plus moral and exemplary
damages.
- She received another memorandum: “Relative to your reassignment as Remittance
Clerk-Inquiry, for internal control purposes, you are hereby instructed that your specific
duties and responsibilities will be confined to handling of inquiring by phone, by walk-in
clients over the counter and to assist the FX Supervisor-Inquiry & Investigation in
verifying inquiries of correspondent banks, agencies, other banks and branches.”
- Castillo claimed that there was no legal basis for her transfer and demotion order. Also,
PCIB immediately appointed another employee in her place and refused to allow
petitioner to perform her usual functions as she became a mere fixture in the office
premises to her gross humiliation. She was allegedly barred from the office premises
and was thereby constructively dismissed without any legal ground and without due
process.
- Labor Arbiter ruled that Castillo was constructively dismissed , thus she was entitled to
reinstatement with full backwages without loss of seniority rights, privileges and other
rights granted by law.
- NLRC reversed LA: there was no demotion because the position to which she was
being reassigned belongs to the same job level as her former position and both positions
have the same rate of compensation.
ISSUE
WON Castillo was constructively and illegally dismissed
HELD
NO
Ratio The Court, as a rule, will not interfere with an employer’s prerogative to regulate all
aspects of employment which includes among others, work assignment, working
methods, and place and manner of work. It is the prerogative of the employer to transfer
and reassign employees for valid reasons and according to the requirement of its
business, provided that the transfer is not unreasonable, inconvenient, or prejudicial to
Labor Law 1 A2010
the employee, and that there is no demotion in rank or a diminution of his salary, benefits
and other privileges . An employee’s right to security of tenure does not give him such a
vested right in his position as would deprive the company of its prerogative to change his
assignment or transfer him where he will be most useful.
- Constructive dismissal: The employer has the burden of proving that the transfer and
demotion of an employee are for valid and legitimate grounds. Where the employer fails
to overcome this burden of proof, the employee’s demotion shall no doubt be tantamount
to unlawful constructive dismissal.
Reasoning
- PCIB was acting within its management prerogative to protect its interest and that of its
clients. NLRC upheld PCIB’s contention that the remittance clerk payment
order/collection item is given the same weight in terms of duties and responsibilities as
that of a remittance clerk inquiry. These positions are of “co-equal footing, co-important
and of the same level of authority” and that the transfer did not entail any reduction of
wages and other benefits. This is because both positions are in fact Remittance Clerks,
which, in PCIB’s classification system, are both slotted at level S-III.
- It is not true that Castillo has become a mere fixture in the office premises without any
function and was given no responsibilities. As a matter of act, had she accepted her new
position, she would have assumed a bigger responsibility, a big departure from her
former position where she merely did routine processing work.
Disposition Petition dismissed.
OSS SECURITY & ALLIED SERVICES INC V NLRC
(LEGASPI)
325 SCRA 157
DE LEON JR; February 9, 2000
NATURE
Petition for certiorarii
FACTS
- Private respondent Eden Legaspi worked as a security guard of OSS Security Agency
from June 16, 1986. On January 17, 1986 petitioner Miguel and Victoria Vasquez
acquired the assets and properties of OSS and absorbed some of its personnel,
including Legaspi, who was assigned to render security services to the different clients of
petitioner. She was last assigned at the Vicente Madrigal Condominium II located in
Ayala Avenue, Makati. In a memorandum, to petitioner, the Building Administrator of VM
Condominium II, complained of the laxity of the guards in enforcing security measures
and requested that petitioner reorganize the men and women assigned to the building to
instill more discipline and proper decorum by changing, if need be, some of the
personnel, replacing, if possible, on a temporary basis, the women complement, to find
out if it would improve the service.
- In compliance therewith, petitioner issued Duty Detail Order, relieving Legaspi and
another lady security guard of their assignment at VM, for reassignment to other units or
detachments where vacancy exists. Thereafter, petitioner detailed Legaspi to the Minami
International Corporation in Taytay, Rizal for 1 month to replace lady security guard who
was on leave. However, Legaspi did not report for duty at her new assignment.
- Legaspi filed her complaint for under payment and constructive dismissal. The Labor
Arbiter upheld Legaspi’s position and ordered OSS to reinstate complainant to her former
position and pay the latter backwages for 18 months. Upon appeal, the NLRC affirmed
said decision. Hence, this petition.
ISSUE
WON the transfer of Legaspi was illegal and tantamount to unjust dismissal
HELD
NO
- Service-oriented enterprises, such as petitioner's business of providing security
services, generally adhere to the business adage that "the customer or client is always
right". To satisfy the interests, conform to the needs, and cater to the whims and wishes
of its clients, along with its zeal to gain substantial returns on its investments, employers
adopt means designed towards these ends. These are called management prerogatives
in which the free will of management to conduct its own affairs to achieve its purpose,
takes from. Accordingly, an employer can regulate, generally without restraint, according
to its own discretion and judgment, every aspect of business.
- In the employment of personnel, the employer can prescribe the hiring, work
assignments, working methods, time, place and manner of work, tools to be used,
processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay-off of workers and the discipline, dismissal and recall of
work, subject only to limitations imposed by laws.
- Thus, the transfer of an employee ordinarily lies within the ambit of management
prerogatives. However, a transfer amounts to constructive dismissal when the transfer is
- 245 - Disini
unreasonable, inconvenient, or prejudicial to the employee, and it involves a demotion in
rank or diminution of salaries, benefits and other privileges . In the case at bench,
nowhere in the record does it show that that the transfer of Legaspi was anything but
done in good faith, without grave abuse of discretion, and in the best interest of the
business enterprise.
- No malice should be imputed from the fact that Legaspi was relieved of her assignment
and, a day later, assigned a new post. We must bear in mind that, unlike other contracts
of service, the availability of assignment for security guards is primarily at heart
subservient to the contracts entered into by the security agency with its client-third
parties. As such, being sidelined temporarily is a standard stipulation in employment
contracts. When a security guard is placed "off detail" or on "floating" status, in security
agency parlance, it means "waiting to be posted." Legaspi has not even been "off detail"
for a week when she filed her complaint.
- Evidence is wanting to support the Labor Arbiter's conclusion that petitioner
discriminated against private respondent when it ordered her relief and transfer of
assignment. Petitioner proved that such transfer was effected in good faith to comply with
the reasonable request of its client, Madrigal Condominium Corporation Incorporated
(MCCI), for a more disciplined service of the security guards on detail. The renewal of the
contract of petitioner with MCCI hinged on the action taken by the former on the latter's
request. Most contracts for security services stipulate that the client may request the
replacement of the guards assigned to it. Besides, a relief and transfer order in itself
does not sever employment relationship between a security guard and her agency. 29
Neither was the transfer for any ulterior design, such as to rid itself of an undesirable
worker or to penalize an employee for his union activities and thereby defeat his right to
self-organization.
- It appears that Legaspi declined the post assigned to her inasmuch as she considered it
"a booby trap of crippling and dislocating her from her employment". She lived in V.
Mapa, Sta. Mesa, Manila, and her new assigned post is in Taytay, Rizal, as against her
previous post at VM Condominium II in Makati. Her new assigned post would entail
changes in her routine, something that she was not agreeable with. But the mere fact
that it would be inconvenient for her, as she has been assigned to VM Condominium II
for a number of years, does not by itself make her transfer illegal. Even Legaspi admitted
that she was assigned to render security service to the different clients of petitioner. An
employee has a right to security of tenure, but this does not give her such a vested right
in her position as would deprive petitioner of its prerogative to change her assignment or
transfer her where her service, as security guard, will be most beneficial to the client.
Thus, there was no basis to order reinstatement and back wages inasmuch as she was
not constructively dismissed. Neither is private respondent entitled to the award of money
claims for underpayment, absent evidence to substantiate the same.
MENDOZA V RURAL BANK OF LUCBAN
433 SCRA 756
PANGANIBAN; July 7, 2004
NATURE
Petition for Review under Rule 45, ROC
FACTS
- April 1999, the Board of Directors of respondent bank (BANK) issued a Board
Resolution announcing the reshuffling of assignments, without changes in compensation
and other benefits, of several officers and employees of the bank (in line with the bank’s
policy to familiarize bank employees with the various phases of bank operations and to
further strengthen the existing internal control system). One of the employees assigned
to a new position is petitioner Elmer Mendoza, who was transferred from his post as an
appraiser to a Clerk for Meralco collection.
- In May, Mendoza expressed his resentment on the reshuffling, saying that it was a
demotion and that he heard intrigues that his “demotion” to a Clerk-Meralco collection
was due to the malicious machination of a certain public official who is the friend of the
Board chairman and with whom the relatives of Mendoza had filed a falsification case
against. He also said that he had been working for 6 years in good standing in the bank
and that the reshuffling is a blatant harassment on the part of the Board, an act which
implicitly forces him to resign, and which constitutes an unfair labor practice. He
requested to have his position as an appraiser retained. However, Mr. Daya (Board
Chairman) explained in a reply that the reshuffling is not a demotion since his
compensation as an appraiser is retained and no reductions were made. Also, Mr. Daya
explained the objectives of the reshuffling, particularly the maintenance of an effective
internal control system recommended by Bangko Sentral ng Pilipinas, and that it was the
bank’s management prerogative to do so. Also, Mendoza could retain position upon a
formal request to the board.
- In June, petitioner submitted 2 applications for LOA, and during his 2 nd LOA he filed a
complaint before the Arbitration Branch of NLRC for illegal dismissal, underpayment,
separation pay and damages.
- LA: in favor of Mendoza (entitled to reinstatement + full backwages/ separation pay if
reinstatement not possible…moral + exemplary + atty’s fees)
Labor Law 1 A2010
- NLRC: in favor of Bank: no bad faith or malice on bank’s part; petitioner only feel
inconvenienced; petitioner not only employee reshuffled; no clear, competent, convincing
evidence that he holds a vested right to the position of Appraiser.
- CA: affirm (Mendoza’s claims self-serving, no diminution, could retain title upon formal
request, no bad faith/malice; no constructive dismissal – he was the one who separated
himself from the bank’s employ)
ISSUES
1. WON Mendoza was constructively dismissed
2. WON the transfer of employees/ reshuffling was a valid exercise of the bank’s
management prerogatives
(Secondary Issues)
3. WON Serrano v. NLRC is applicable
4. WON NLRC and CA proceedings null
HELD
1. NO
- Findings of NLRC and CA were supported by substantial evidence
Ratio Constructive dismissal is defined as an involuntary resignation resorted to when
continued employment is rendered impossible, unreasonable or unlikely; when there is a
demotion in rank or a diminution of pay; or when a clear discrimination, insensibility or
disdain by an employer becomes unbearable to the employee.
Reasoning
- Petitioner presented no evidence to support his claims. (More on the second issue)
2. YES
Ratio In the pursuit of its legitimate business interest, management has the prerogative
to transfer or assign employees from one office or area of operation to another --
provided there is no demotion in rank or diminution of salary, benefits, and other
privileges; and the action is not motivated by discrimination, made in bad faith, or
effected as a form of punishment or demotion without sufficient cause. This privilege is
inherent in the right of employers to control and manage their enterprise effectively. The
right of employees to security of tenure does not give them vested rights to their positions
to the extent of depriving management of its prerogative to change their assignments or
to transfer them.
-Managerial prerogatives, however, are subject to limitations provided by law, collective
bargaining agreements, and general principles of fair play and justice.
-TEST of validity of transfer of employees (Blue Dairy Corporation v. NLRC): "The
managerial prerogative to transfer personnel must be exercised without grave abuse of
discretion, bearing in mind the basic elements of justice and fair play. Having the right
should not be confused with the manner in which that right is exercised. Thus, it cannot
be used as a subterfuge by the employer to rid himself of an undesirable worker. In
particular, the employer must be able to show that the transfer is not unreasonable,
inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits. Should the employer fail to
overcome this burden of proof, the employee’s transfer shall be tantamount to
constructive dismissal, which has been defined as a quitting because continued
employment is rendered impossible, unreasonable or unlikely; as an offer involving a
demotion in rank and diminution in pay. Likewise, constructive dismissal exists when an
act of clear discrimination, insensibility or disdain by an employer has become so
unbearable to the employee leaving him with no option but to forego with his continued
employment."
- Employees may be transferred – based on their qualifications, aptitudes and
competencies – to positions in which they can function with maximum benefit to the
company.
Reasoning
- Mendoza’s transfer complied with the test. Transfer made in pursuit of valid objectives
(see above, 1st paragraph – inside parenthesis); Mendoza was not singled out; no
diminution of salary, privileges, and other benefits.
3. NO
- No constructive dismissal, not entitled to monetary benefits as awarded in the Serrano
case.
4. NO
- Petitioner’s arguments regarding the Bank’s appeal before the NLRC filed beyond the
reglementary period was not raised in CA, thus cannot be entertained if raised for the 1 st
time.
Disposition Petition is DENIED, and the June 14, 2002 Decision and the September 25,
2002 Resolution of the Court of Appeals are AFFIRMED.
12. RESIGNATION AND EFFECTIVITY
EMCO PLYWOOD CORP V ABELGAS
[PAGE 14]
- 246 - Disini
SHIE JIE CORP/SEASTER EX-IM CORP V NATIONAL
FEDERATION OF LABOR
463 SCRA 569
SANDOVAL-GUTIERREZ; July 15, 2005
FACTS
- Respondents were employed by petitioner as fish processors. Respondents staged a
walk-out and abandoned their work, bringing operations to a standstill. They were
suspended for a week. Petitioner claims that instead of coming to work, some of the
respondents submitted resignation letters and quitclaims. Petitioner then sent the rest a
notice terminating their services for abandonment of work.
- the Labor Arbiter found petitioners guilty of unfair labor practice for illegally dismissing
respondents and awarding the latter claims. On appeal, the NLRC reversed the decision.
The CA later reversed the decision again based on Article 277 which requires that the
employer prove that the termination was for a valid or just cause. Hence this petition.
ISSUE
WON respondents made valid resignations and were thus not illegally dismissed
HELD
NO
- Voluntary resignation is defined as the act of an employee, who finds himself in a
situation in which he believes that personal reasons cannot be sacrificed in favor of the
exigency of the service; thus, he has no other choice but to disassociate himself from his
employment. Acceptance of a resignation tendered by an employee is necessary to
make the resignation effective, which was not shown in the instant case.
- To constitute a resignation, it must be unconditional and with the intent to operate as
such. There must be an intention to relinquish a portion of the term of office accompanied
by an act of relinquishment.
- It is illogical that respondents would file complaints of illegal dismissal 17 days after
filing their resignation letters. Such acts negate any intention on their part to relinquish
their jobs. It was held in Molave Tours Corp. vs NLRC, “By vigorously pursuing the
litigation of his action against petitioner, private respondent clearly manifested that he
has no intention of relinquishing his employment, which act is wholly incompatible to
petitioner’s assertion that he voluntarily resigned.”
Disposition WHEREFORE the petition is DENIED
13. ABOLITION OF POSITION
BENGUET ELECTRIC COOPERATIVE V FIANZA
425 SCRA 41
YNARES-SANTIAGO; March 9, 2004
NATURE
Review on certiorari
FACTS
- Josephine Fianza had been employed with petitioner Benguet Electric Cooperative
(BENECO) as Property Custodian under the Office of the General Manager.
- BENECO’s General Manager, Versoza, issued Office Order No. 42 addressed to
Fianza communicating that she is temporarily detailed to the Finance Department to
assume the duties of a Bill Distributor without any change in salary rate. This is line with
their efforts to reduce the cost of operation.
- Fianza acknowledged receipt of the letter under protest. She avers that it amounts to a
demotion because there are significant differences in the educational qualifications, work
experience, skills and job description and the working conditions of a Bill Distributor are
totally different and more strenuous and expose her to unfavourable and dangerous
circumstances, and therefore not similarly situated as that of Property Custodian.
- In response, Versoza issued a Memorandum informing her that the position of Property
Custodian may eventually phased out upon approval of the already proposed Table of
Organization as part of business decision.
- Still, Fianza refused to heed the order of the General Manager and continued to work
as Property Custodian despite successive issuance of Memorandum until the
management no longer authorized her to perform the duties and functions of a Property
Custodian.
ISSUES
1. WON Fianza’s transfer from Property Custodian to Bill Distributor is valid
2. WON the position of Property Custodian is abolished and WON the abolition is valid
HELD
1. YES
Labor Law 1 A2010
Ratio The management has a wide latitude to regulate, according to his own discretion
and judgment, all aspects of employment, including the freedom to transfer and reassign
employees according to the requirements of its business. However, the transfer of an
employee may constitute constructive dismissal when it amounts to “an involuntary
resignation resorted to when continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in rank and/or a diminution in pay, or
when a clear discrimination, insensibility or disdain by an employer becomes unbearable
to the employee.
2. YES
Ratio The abolition of a position deemed no longer necessary is a management
prerogative, and this Court, absent any findings of malice and arbitrariness on the part of
management, will not efface such privilege if only to protect the person holding that
office.
Reasoning
- There was no showing that the position of Property Custodian was abolished in order to
single out Fianza, or that malice and ill-will attended the phasing out of the position.
14. DISHONESTY
NAGUIT V NLRC (MANILA ELECTRIC)
408 SCRA 617
CARPIO-MORALES; August 12, 2003
NATURE
Petition for certiorari seeking to annul and set aside the decision and resolution of the
NLRC.
FACTS
- Petitioner Aniceto W. Naguit, Jr., an employee of respondent Manila Electric Company
(MERALCO) was dismissed after 32 years of service. At the time of his dismissal, he was
Administrative Officer of MERALCO.
- On June 5, 1987, petitioner informed his Supervisor-Branch head Sofronio Ortega, Jr.
that he would render overtime work on June 6, 1987, a Saturday, and that after
concluding his field work on that day, he would proceed to Pagbilao, Quezon to
accompany his wife who was a principal sponsor to a kin’s wedding.
- On June 6 Naguit proceeded to his field assignment to conduct “supervisory survey on
re-sequence of customer’s account numbers”, and to supervise MERALCO’s “Operation
FC” (apprehension of customers with illegally connected service). At 12:00 noon, he,
along with his co-employee Accounts Representative Fidel Cabuhat who drove his
(petitioner’s) jeep, proceeded to Pagbilao, Quezon.
- On June 8, the timekeeper prepared an Overtime Notice and the corresponding
Timesheet[9] wherein it was reflected that petitioner worked from 8:00 a.m. to 5:00 p.m.
on June 6 and 7. Petitioner corrected the documents by erasing the entries made for
June 7. The documents were approved by petitioner’s supervisor Ortega. Petitioner was
thereafter paid for overtime work on June 6.
- Documents including petty cash voucher covering Cabuhat’s alleged overtime work on
June 6 were also prepared on account of which petitioner, as custodian of petty cash,
released to Cabuhat the amount of P192.00 representing meal allowance and rental for a
jeep.
- More than two years later, petitioner received from the Legal and Investigation Staffs
Head of MERALCO a letter stating that the Special Presidential Committee (SPC) is in
receipt of information that he caused reimbursement of transportation expenses for the
work of Cabuhat not actually rendered. It requested that he report to the Ortigas office
Feb 27, 1990 for the administrative proceedings.
- During the administrative proceedings, Naguit wiaved his right to counsel and gave
sworn statements denying the charges.
- Evidence against petitioner consisted primarily of the sworn statements of Cabuhat who
was charged along with petitioner with falsification of time card; Olivia Borda, billings
clerk; and five customers of MERALCO. The statements tried to establish that, petitioner
induced Cabuhat to prepare a petty cash voucher covering expenses for meal and rental
of a jeep for the June 6 alleged conduct by the latter of field verification of “Bill
Omissions;” that on petitioner’s invitation, Cabuhat also repaired to Pagbilao, Quezon on
June 6; and that petitioner gave the petty cash payable to Cabuhat making it appear that
some collections for “bill omissions” were received from customers on June 6 when in
fact no such collections were ever received from the customers in whose name official
receipts were issued.
- SPC found Naguit and Cabuhat guilty of falsification of time cards under Sec. 7, par. 7
of the Company Code on Employee Discipline. Additionally, petitioner was found guilty
under Sec. 6, par. 24 of the Code for encouraging Cabuhat to commit an act constituting
a violation of the Code.
- MERALCO thus informed petitioner that he was, for falsification of time card and
encouraging and inducing another employee to perform an act constituting a violation of
- 247 - Disini
the Company Code on Employee Discipline, dismissed from the service with forfeiture of
all rights and privileges.
- Naguit filed a complaint with the NLRC against MERALCO for illegal dismissal, he
praying for reinstatement, backwages, damages, attorney’s fees and other awards he is
entitled to. Labor Arbiter found for Naguit.
- Meralco appealed which reversed the Labor Arbiter’s decision.
Petitioner’s claims
> the factual findings of the Labor Arbiter clearly show that he, as an Administrative
Officer, is covered by respondent MERALCO’s policy pertaining to field personnel,
particularly when he is designated to perform field assignments. As such, he did not
bother to correct the Overtime Notice which indicated that he worked from 8 a.m. to 5
p.m., albeit he actually worked until 12 noon, the company policy being that even if an
employee who had a field assignment did not actually render 8 hours of work, he is
deemed to have worked for such duration provided he had completed the assigned task
as he claims he did.
ISSUES
1. WON Naguit is guilty of falsification
2. WON NLRC committed grave abuse of discretion when they gave full credence to
Cabuhat’s affidavits that he was induced to claim overtime pat despite Cabuhat’s failure
to affirm such in the arbitral proceedings
3. WON there was valid ground for dismissal
HELD
1. NO
- The petitioner was in good faith when he did not correct the entry in the Notice of
Overtime and Timesheet reflecting that he worked up to 5pm on June 6.
- Petitioner advised his superior Ortega about his rendering overtime work the following
day, June 6, 1987, after which he would head for Pagbilao after concluding his work. If
petitioner had intended to do overtime work up to 5:00 p.m., there would have been no
need for him to advise Ortega that he would thereafter go to Pagbilao. Since Ortega
never refuted petitioner’s claim about his advising him of his proceeding to Pagbilao and
in fact the grant and release of petitioner’s overtime pay was approved by Ortega, who
had the discretion to “judge the number of hours that can be foregone” in light of his
(Ortega’s) explanation that office personnel on field assignment “forego the convenience
of the office, they [being] exposed to the heat of the sun” and the like, this Court would
not, as the Labor Arbiter did not, attribute malice to petitioner. Thus, the Labor Arbiter
held that Ortega opined that half day would not be allowed. But, the fact remains that
such discretion is exercised, the limit of which was not shown to have been disseminated
to the employees, the qualifying factor being whether the job was satisfactory or not. If on
the contrary, there was indeed no such practice or, that complainant, being an office
personnel, is removed from coverage thereof and governed strictly by the time-rule such
that he would have been off at the actual completion of the assigned task, he would not
have bothered to inform his branch head - in effect a request for permission of his
planned trip to Pagbilao, Quezon thereafter. That would have been meaningless gesture
on the part of the complainant.
- With the incentive scheme or tolerance of Naguit, there is no resulting prejudice to
Meralco so to speak of nor intention on the part of complainant to cause it. What was
done was consistent with management policy on covering the overtime work in the
branch.
2. YES
- In labor cases, where the adverse party is deprived of the opportunity to cross-examine
affiants, affidavits are considered hearsay unless the affiants are placed on the witness
stand to testify thereon. Cabuhat’s affidavits are inadmissible as evidence.
3. YES
- Naguit, despite his knowledge that Cabuhat did not hire any jeep nor conduct field
verification on June 6, released the petty cash representing Cabuhat’s meal allowance
and rental fee for a jeep. As custodian of the petty cash fund, he had the duty to
ascertain that the circumstances which brought about any claim therefrom were in order.
He cannot now shirk from this responsibility by indirectly pinning the blame on the
approving officer and asserting that the transgression was the result of mere
inadvertence, given his admission that he very well knew that Cabuhat did not conduct
any field work on June 6, 1987, he (Cabuhat) having merely driven for him to Pagbilao.
- Petitioner thus committed dishonesty and breached MERALCO’s trust, which
dishonesty calls for reprimand to dismissal under MERALCO’s rules.
- Dismissal is, however, too severe as a penalty in petitioner’s case, given his 32 years of
service during which he had no derogatory record.
At the time petitioner was dismissed, he was still below the retirement age of employees
of MERALCO at 60. However, he is now about 65. Imposing a penalty less harsh than
dismissal and ordering his reinstatement are thus functus oficio, the Labor Arbiter’s order
for his reinstatement not having been executed.
Disposition Decision and Resolution of the NLRC are hereby SET ASIDE. Respondent
MERALCO is, in light of the foregoing discussions, hereby ORDERED to pay petitioner
Labor Law 1 A2010
Aniceto W. Naguit, Jr. his retirement benefits to be computed from the inception of his
service up to the time he reached 60 years of age, in accordance with its retirement plan.
CONSTRUCTIVE DISCHARGE
DEFINED
PHIL JAPAN ACTIVE CARBON CORP V NLRC
(QUINANOLA)
171 SCRA 164
GRINO-AQUINO; March 8, 1989
NATURE
A petition for review
FACTS
- Quinanola had been employed in Phil. Japan since January 19, 1982, as Assistant
Secretary/Export Coordinator. He was promoted to the position of Executive Sec. to the
Executive Vice President and General Manager. On May 31, 1986, for no apparent
reason at all and without prior notice to her, she was transferred to the Production
Department as Production Secretary, swapping positions with Ester Tamayo. Although
the transfer did not amount to a demotion because her salary and workload remained the
same, she believed otherwise so she rejected the assignment and filed a complaint for
illegal dismissal. LA found that the transfer would amount to constructive dismissal and
her refusal to obey the order was justified. Upon appeal to the NLRC, the Commission
approved the Labor Arbiter's decision but reduced to P10,000 the award of moral
damages and the attorney's fees to 10% of the judgment.
ISSUE
WON Quinanola was constructively and illegally dismissed as a result of her transfer or
assignment to the Office of the Production Manager even if she would have received the
same salary rank, rights and privileges
HELD
NO
- A constructive discharge is defined as: "A quitting because continued employment is
rendered impossible, unreasonable or unlikely; as, an offer involving a demotion in rank
and a diminution in pay." In this case, Quinanola’s assignment as Production Secretary
of the Production Department was not unreasonable as it did not involve a demotion in
rank (her rank was still that of a department secretary) nor a change in her place of work
(the office is in the same building), nor a diminution in pay, benefits, and privileges. It did
not constitute a constructive dismissal.
- It is the employer's prerogative, based on its assessment and perception of its
employees' qualifications, aptitudes, and competence, to move them around in the
various areas of its business operations in order to "ascertain where they will function
with maximum benefit to the company. An employee's right to security of tenure does not
give him such a vested right in his position as would deprive the company of its
prerogative to change his assignment or transfer him where he will be most useful. When
his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not
involve a demotion in rank or a diminution of his salaries, benefits, and other privileges,
the employee may not complain that it amounts to a constructive dismissal.
- On the other hand, we reject the petitioner's contention that the private respondent's
absence from work on June 2 to June 3, 1986 constituted an abandonment of her job in
the company resulting in the forfeiture of the benefits due her. While she was guilty of
insubordination for having refused to move out of her position as Executive Secretary to
the Executive Vice-President and General Manager of the company, dismissal from the
service would be a draconian punishment for it, as her complaint for illegal dismissal was
filed in good faith.
Disposition the decision of the NLRC insofar as it orders the petitioner to reinstate the
private respondent is affirmed, but she shall be reinstated to her position as Production
Secretary of the Production Department of petitioner's corporation without loss of
seniority rights and other privileges. The awards of backwages, moral damages and
attorney's fees to the private respondent are hereby set aside. No pronouncement as to
costs.
DUSIT HOTEL NIKKO V NUWHRAIN
466 SCRA 374
CALLEJO; August 9, 2005
NATURE
Petition for review on certiorari of the Decision of the Court of Appeals
- 248 - Disini
FACTS
The Case for Rowena Agoncillo
- Agoncillo was employed by the Hotel. After some time, she was promoted as
Supervisor of Outlet Cashiers and later promoted as Senior Front Office Cashier.
- The Hotel decided to trim down the number of its employees from the original count of
820 to 750.
- The Hotel offered a Special Early Retirement Program (SERP) to all its employees. It
was stated therein that the program was intended to “provide employees financial
benefits prior to prolonged renovation period and, at the same time, to enable
management to streamline the organization by eliminating redundant positions and
having a more efficient and productive manpower complement.”
- Union president Rasing, sought “a commitment from the management that the
employees terminated due to redundancy will not be replaced by new employees; nor will
their positions be given to subcontractors, agencies or casual employees.”
- A total of 243 employees, including Agoncillo, 161 of whom were Union officers and
members, were separated from the Hotel’s employment.  As a result, the membership of
the Union was substantially reduced.
- The Hotel wrote DOLE saying that the Hotel terminated the employment of 243
employees due to redundancy.  On the same day, Agoncillo was summoned by Hotel
Comptroller Reynaldo Casacop, who gave her a letter of even date informing the latter of
her “separation from service due to redundancy effective close of office hours of April 30,
1996.”
- Casacop advised Agoncillo to just avail of the Hotel's SERP, as embodied in the inter-
office memorandum of Masuda. He informed her that she had the option to avail of the
program and that, in the meantime, he will defer the processing of her termination papers
to give her time to decide.  On April 3, 1996, Agoncillo finally told Casacop that she
would not avail of the SERP benefits.  By then, she had decided to file a complaint for
illegal dismissal against the Hotel.
- Meanwhile, the Hotel temporarily closed operations because of the renovation thereof.
- When news spread among the hotel employees that Agoncillo would contest her
termination before the NLRC, she was summoned by Personnel Manager Leticia
Delarmente to a conference.  Delarmente and Dizon repeatedly asked Agoncillo to give
back the original copy of the April 1, 1996 termination letter.  Agoncillo told them that the
letter was already in the possession of her counsel.  Agoncillo was relieved when she
was given another letter of even date stating that, by reason of her non-availment of the
SERP, she was still considered an employee but on temporary lay-off due to the ongoing
renovation of the Hotel and that she will just be advised accordingly of her work schedule
when the Hotel reopens.
- Delarmente and Dizon offered to reinstate Agoncillo but not to her former position as
Senior Front Office Cashier.  Agoncillo objected but informed them that she could accept
the position of Reservation Clerk. However, no response was received.
- She was told by Dizon that the Hotel was willing to reinstate her but as an Outlet
Cashier.  Dizon explained that the Hotel had already hired new employees for the
positions of Reservation Clerks.  Agoncillo, however, pointed out that she was already an
Outlet Cashier Supervisor before her promotion as Senior Front Office Cashier and that if
she accepted the position, it would be an unjustified demotion on her part.  After
Agoncillo’s meeting with Dizon, the latter kept on promising to find a suitable position for
her.  In those meetings, Dizon always offered reinstatement to positions that do not
require guest exposure like Linen Dispatcher at the hotel basement or Secretary of
Roomskeeping.  When Agoncillo refused, Dizon just instructed her to return. Agoncillo
had no specific position or assigned task to perform.
- When the Hotel resumed operations, the Union filed a Notice of Strike for unfair labor
practice with the DOLE.
The Case for the Hotel
- Pursuant to the reorganization program, a reclassification of positions ensued upon
resumption of the Hotel’s operation.  Consequently, the position of Agoncillo as Senior
Front Office Cashier was abolished and a new position of Guest Services Agent
absorbing its functions was created.  Considering that the new position requires skills in
both reception and cashiering operations, respondent Hotel deemed it necessary to
transfer Agoncillo to another position as Outlet Cashier, which does not require other
skills aside from cashiering.
- The transfer of Agoncillo from Senior Front Office Cashier to Outlet Cashier does not
entail any diminution of salary or rank.  Despite which, she vehemently refused the
transfer and insisted that she be reinstated to her former position.  Since Agoncillo was
not amenable to the said transfer, she did not assume her new position and since then
had stopped reporting for work despite the Hotel’s patient reminder to act on the
contrary.  Instead, she filed a complaint to question the prerogative of the management
to validly transfer her to another position as she considers the transfer an act of
constructive dismissal amounting to illegal termination and unfair labor practice in the
form of union busting.
ISSUE
Labor Law 1 A2010
WON Agoncillo was illegally dismissed
HELD
YES
- We agree with the contention of the petitioners that it is the prerogative of management
to transfer an employee from one office to another within the business establishment
based on its assessment and perception of the employee’s qualification, aptitude and
competence, and in order to ascertain where he can function with the maximum benefit to
the company.  But, like other rights, there are limits thereto. The managerial prerogative
to transfer personnel must be exercised without grave abuse of discretion, bearing in
mind the basic elements of justice and fair play. Having the right should not be confused
with the manner in which that right is exercised.  obviously not his and “lopsidedly worded” to free the Agency from liabilities. The
- There is constructive dismissal when there is a demotion in rank and/or diminution in
pay; or when a clear discrimination, insensibility or disdain by an employer becomes
unbearable to the employee.
- In the present case, the Hotel recalled the termination of respondent Agoncillo when
they learned that she was going to file a complaint against them with the NLRC for illegal
dismissal. However, instead of reinstating her to her former position, she was offered the
position of Linen Dispatcher in the hotel basement or Secretary of the Roomskeeping
Section, positions much lower than that of a Supervisor of Outlet Cashiers which the
respondent held before she was promoted as Senior Front Office Cashier.  With the said
positions, the respondent would not certainly be receiving the same salary and other
benefits as Senior Front Office Cashier.
- The offers by the petitioners to transfer Agoncillo to other positions were made in bad
faith, a ploy to stave off a suit for illegal dismissal.  In fact, Agoncillo had not been
transferred to another position at all.
- Even assuming, for the sake of argument, that the hotel had a valid ground for
dismissing [the] complainant and that it had merely spared her such fate, the hotel is still
guilty of illegal dismissal.  Had the hotel made the transfer of complainant in good faith
and in the normal course of its operation, it would have been justified. In this case,
however, the supposed transfer was made only after complainant had been earlier
terminated. Complainant’s statement in her affidavit that she was summoned by the hotel
after news of her plan to contest her dismissal circulated remains unrefuted. Furthermore,
the hotel has not explained why there was no official memorandum issued to complainant
formally informing her of her “transfer”.  All these lead to only one conclusion – that the
alleged transfer was not made in good faith as a valid exercise of management
prerogative but was intended as a settlement offer to complainant to prevent her from
filing a case.
Disposition Petition is DENIED for lack of merit.  Costs against the petitioners.
MOBILE PROTECTIVE AND DETECTIVE AGENCY V
OMPAD
458 SCRA 308
PUNO; May 9, 2005
NATURE
Petition for review on certiorari of the decision of the CA
FACTS
- Private respondent, Alberto Ompad, was employed by the petitioner as a security guard
in 1990. He was assigned to the various clients of Mobile. In June 1997, respondent was
assigned as a security guard at Manila Southwoods when he inquired from the project
manager of Southwoods if they have already paid their backwages to the security
agency. Ompad claims that when the Agency found out about his query, he was relieved
from his post and never given another assignment.
- The petitioner on the other hand claims that Ompad was assigned to another client,
Valle Verde Country Club from August 29 to October 31, 1997 after he was relieved from
his post at the Manila Southwoods. Petitioner further claims that one of the guards at
Valle Verde attested that Ompad had told her that he would earn better if he just drives
his tricycle full time. On October 15, 1997, Ompad reported for work but he was limping
due to an accident he suffered while driving his tricycle. Petitioner claims that he stopped
reporting for work after that date. On September 23, 1998, Domingo Alonzo, operations
manager of Mobile saw respondent and inquired as to whether he was still interested in
reporting for work. The petitioner allegedly answered in the negative and it was at that
time that Alonzo advised him to resign. Ompad, he claims, submitted his hand written
resignation which also was a quit claim.
- Petitioner contended that the letter of resignation was forced on him in return for monies
owed him. As he needed the money, he had no choice but to comply. He however was
only being given Pesos 5,000 which he rejected. He filed this case the following day.
- Ompad alleged that he was illegal terminated and claimed underpayment or non-
payment of wages, overtime pay, premium pay for holiday and rest day, separation pay,
etc.
- 249 - Disini
- Labor Arbiter dismissed the complaint for lack of merit. The NLRC reversed the
decision. The CA also dismissed the action for reconsideration, noting that there was no
voluntariness in the acts of Ompad in submitting the resignation letters. Hence this
action.
ISSUE
WON Ompad was illegally dismissed
HELD
YES
- The resignation letters of Ompad are dubious as they were written in a language
affidavits issued by the witnesses of Mobile are suspect considering that these witnesses
were/are in fact employed by the petitioner.
Reasoning
- All the documentary evidence proves that respondent was assigned to Valle Verde from
September 29 to October 31, 1997 and that he stopped reporting for work on October 16,
1997. After this period, respondent did not seem to have be given any further
assignment.
- The SC ruled that while it is true that security guards may be put on floating status the
same should last for only six months. In the case at bar, there was no showing that
Mobile lacked engagements to which they can post their guards. Absent any dire
exigency justifying their failure to give respondent further assignment, the only logical
conclusion is that respondent was constructively dismissed.
- Even assuming that Mobile was justified in not immediately giving Ompad any
assignment after October, the length of time that he was put on floating status is
tantamount to constructive dismissal.
- In an illegal dismissal case, the onus probandi is on the employer to prove that the
dismissal was in fact for valid cause. It was in this case also the burden of Mobile to
submit evidence that the resignation was voluntary on the part of Ompad.
Disposition Petition dismissed.
DUNCAN ASSOCIATION V GLAXO WELLCOME
[PAGE 43]
R.P. DINGLASAN CONSTRUCTION INC V ATIENZA
433 SCRA 263
PUNO; June 29, 2004
NATURE
This is an appeal from the decision and resolution of the Court of Appeals, dated January
17, 2001 and October 30, 2002, respectively, upholding the finding of constructive
dismissal against petitioner.
FACTS
- Petitioner R.P. Dinglasan Construction, Inc. provided janitorial services to Pilipinas
Shell Refinery Corporation (Shell Corporation) in Batangas City. Private respondents
Mariano Atienza and Santiago Asi served as petitioner’s janitors assigned with Shell
Corporation since 1962 and 1973, respectively.
- July 7, 1994 - Dinglasan called for a meeting and informed them and 3 other employees
that their employment with Shell Corporation would be terminated effective July 15, 1994.
They were told that Dinglasan lost the bidding for janitorial services with Shell. Dinglasan
notified them that they may reapply as helpers and redeployed in other companies where
DInglasan had subsisting contracts but they would receive only a minimum wage.
Atienza refused as the offer would be a form of demotion --- they would lose their
seniority status and would not be guaranteed to work at regular hours.
- December 1994 – Atienza et al filed a complaint against Dinglasan for non-payment of
salary with the DOLE district office in Batangas City.
- February 1995 - during the conciliation proceedings with the DOLE, Dinglasan sent
notices to Atienza et al informing them that they would be reinstated with Shell
Corporation as soon as they submit their barangay clearance, medical certificate, picture
and information sheet as per the new identification badge requirements of Shell
Corporation. Barangay officials met with Dinglasan to signify Atienza et al’s willingness to
to be reinstated bringing with them said requirements
- May 1995 – Atienza et al demanded the payment of their backwages starting from July
15, 1994.
- June 1, 1995 – Dinglasan notified Atienza et al they have been declared absent without
leave (AWOL) as they allegedly failed to signify their intention to return to work and
submit the badge requirements for their reinstatement.
- June 13, 1995 – Atienza et al wrote Dinglasan and insisted that they had complied with
the badge requirements. Accompanied by the barangay officials, Atienza et al attempted
to meet with the officers of Dinglasan but the latter refused to dialogue with them. As
proof of their compliance with the Shell requirements, Atienza et al submitted to the
Labor Law 1 A2010
DOLE their x-ray results, dated May 17 and 19, 1995 and their barangay certification,
dated May 13, 1995.
- NLRC > Atienza et al charged DInglasan with illegal dismissal and non-payment of 13th
month pay, with a claim for payment of attorney’s fees and litigation expenses, and a
prayer for reinstatement with payment of full backwages from July 15, 1994.
> Dinglasan gave a different version of the incident. It allegedly informed Atienza et al
and the other affected employees that they would be deployed to petitioner’s other
principal companies but that their work would be different. Except for Atienza et al, all
the affected employees accepted its offer of redeployment and reported back to work.
Atienza et al failed to submit a resignation letter to signify their intention not to return to
work.
- during the pendency of the labor case – Dinglasan in 2 separate notices informed
Atienza et al that they could be reinstated at Shell Corporation with no diminution in their
salary provided that they submit the documents for the new identification badge
requirement of Shell Corporation. Atienza et al, however, refused to return to work until
they were paid their backwages. Consequently, Dinglasan was constrained to consider
them as having abandoned their work and to terminate their employment on September
19, 1995. Dinglasan, thus, justified the dismissal of Atienza et al on the grounds of gross
and habitual neglect of duties and abandonment of work.
- LABOR ARBITER > September 3, 1998, LA Andres Zavalla rendered a decision finding
that private respondents were illegally dismissed from service and ordering their
reinstatement.
- NLRC > the decision of the labor arbiter was affirmed
- CA > PROCEDURAL: petition could not prosper as petitioner failed to move for a
reconsideration of the NLRC decision; SUBSTANTIVE: upheld the findings of the labor
arbiter and the NLRC that: (1) private respondents were constructively dismissed as
petitioner’s offer of reassignment involved a diminution in pay and demotion in rank that
made their continued employment unacceptable; and, (2) private respondents could not
be considered to have abandoned their work; DInglasan’s motion for reconsideration was
denied
ISSUES
1. WON there is valid dismissal on the ground that they failed to report back to the office
and this abandoned their work
2. WON there was constructive dismissal
HELD
1. Ratio In an illegal dismissal case, the onus probandi rests on the employer to prove
that its dismissal of an employee is for a valid cause. In the case at bar, Dinglasan failed
to discharge its burden. It failed to establish that Atienza et al deliberately and
unjustifiably refused to resume their employment without any intention of returning to
work.
- To constitute abandonment of work, two (2) requisites must concur: first, the employee
must have failed to report for work or must have been absent without justifiable reason;
and second, there must have been a clear intention on the part of the employee to sever
the employer-employee relationship as manifested by overt acts. Abandonment as a just
ground for dismissal requires deliberate, unjustified refusal of the employee to resume
his employment. Mere absence or failure to report for work, after notice to return, is not
enough to amount to abandonment.
Reasoning
- the evidence negates the theory that they abandoned their work.
(1) Atienza et al reported back to Dinglasan’s office a number of times expressing their
desire to continue working without demotion in rank or diminution of salary. This fact was
established by the corroborating testimony of barangay officials, accompanied Atienza et
al to Dinglasan’s office at least ten (10) times to negotiate their redeployment on more
acceptable terms.
(2) in seeking reinstatement, Atienza et al also sought the intervention of the DOLE to
arbitrate the labor issue between the parties.
(3) Atienza et al submitted the barangay clearances and x-ray results required from them
by petitioner for their reinstatement as witnessed by the barangay officials.
(4) the records would bear that Atienza et al lost no time and sought their reinstatement
by filing an illegal dismissal case against Dinglasan, which act is clearly inconsistent with
a desire to sever employer-employee relations and abandon their work.
- All these overt acts on the part of Atienza et al negate Dinglasan’s claim of
abandonment of work and prove beyond doubt their steadfast desire to continue their
employment with petitioner and be reinstated to their former position.
2. YES
Ratio Constructive dismissal is defined as quitting when continued employment is
rendered impossible, unreasonable or unlikely as the offer of employment involves a
demotion in rank and diminution of pay.
Reasoning
- Dinglasan committed constructive dismissal when it offered to reassign Atienza et al to
another company but with no guaranteed working hours and payment of only the
minimum wage. The terms of the redeployment thus became unacceptable for private
respondents and foreclosed any choice but to reject petitioner’s offer, involving as it does
- 250 - Disini
a demotion in status and diminution in pay. Thereafter, for six (6) months, Atienza et al
were in a floating status. Interestingly, it was only after Atienza et al filed a complaint
with the DOLE that Dinglasan backtracked in its position and offered to reinstate Atienza
et al to their former job in Shell Corporation with no diminution in salary. Eventually,
however, Dinglasan unilaterally withdrew its offer of reinstatement, refused to meet with
the Atienza et al and instead decided to dismiss them from service.
Disposition petition is DISMISSED and the impugned decision and resolution of the
Court of Appeals, dated January 17, 2001 and October 30, 2002, respectively, are
AFFIRMED in toto.
GO V CA (MOLDEX PRODUCTS INC)
430 SCRA 358
YNARES-SANTIAGO; May 28, 2004
NATURE
Petition for review decision of CA (which set aside resolutions of NLRC)
FACTS
- Fernando Go was hired by Moldex Products Inc. in 1986 as a salesman, then, over the
years, was promoted to a Senior Sales Manager. As such officer, he was responsible for
overseeing and managing the sales force of the company such as dealing with clients,
getting orders, entering into an agreement with clients (subject to approval of higher
management).
- Sometime in 1998, the EVP o Moldex called the attention of Go regarding the discovery
of alleged anomalies purportedly committed by the sales people under Go’s control.
Such anomalies stemmed from the disbursement of funds by Moldex to gov’t officials to
secure big supplpy contracts from the gov’t.
- Because of the issue, a number of employees were dismissed, including those under
Go’s supervision. Go himself was terminated, allegedly “on account of command
responsibility”. Moldex claimed that Go, “obviously feeling guilty for not exercising
effective supervision over his subordinates, submitted a letter of resignation dated
October 12, 1998 but effective on November 16, 1998.” Moldex added that Go went on
leave from Oct 12, 1998 to Nov 16, 1998. While on leave, he worked for the release of
his clearance and the payment of 13 th month pay and leave pay benefits. On the other
hand, Go contends that he was not investigated. The investigation only involved other
sales people. He filed a complaint for constructive dismissal. LA ruled for Go (there was
illegal dismissal), NLRC affirmed, but CA set aside the decisions, relying on evidence
that Go was actively performing his normal duties and functions during the months
immediately prior to his resignation, contrary to the finding of constructive dismissal.
ISSUE
WON there was constructive dismissal
HELD
NO
Ratio Constructive dismissal exists where there is a cessation of work because
continued employment is rendered impossible, unreasonable or unlikely. It is present
when an employee’s functions, which were originally supervisory in nature, were
reduced, and such reduction is not grounded on valid grounds such as genuine business
necessity.
Reasoning
- Apparently, Go still fully exercised the prerogatives and the responsibilities of his office
as the Senior Sales Manager during the time that the said functions were supposedly
removed from him. Therefore, there can be no constructive dismissal to speak of.
- Go claims that his separation from employment with Moldex was a case of constructive
dismissal, an allegation which the company refutes with its own set of evidence pointing
to the Go’s voluntary resignation.
- It should be remembered that Go has submitted a letter of resignation. It is thus
incumbent upon him to substantiate his claim that his resignation was not voluntary but in
truth was actually a constructive dismissal. This the petitioner failed to do. His bare
allegations, when uncorroborated by evidence, cannot be given credence.
- on the other hand, Moldex presented confidential sales evaluation forms that prove that
Go was still performing his duties and responsibilities one month prior to his resignation.
- While on leave, he worked for the release of his clearance and the payment of his 13 th
month pay and leave pay benefits. In doing so, he in fact performed all that an employee
normally does after he resigns. Resignation is the formal pronouncement or
relinquishment of an office. The voluntary nature of Go’s acts has manifested itself
clearly belie his claim of constructive dismissal.
The totality of the evidence indubitably shows that Go resigned from employment without
any coercion or compulsion from respondent. His resignation was voluntary.
Disposition: Petition denied, and decision of CA AFFIRMED.
ACUNA V CA
Labor Law 1 A2010 - 251 - Disini
[PAGE 12] - GLOBE et al., on the other hand, claimed that FLORENDO abandoned her work; that
her complaint rested on a purely private disagreement with her immediate superior, and
that she filed the complaint without consulting the company’s grievance process.
POSEIDON FISHING V NLRC
[PAGE 98] ISSUE
WON FLORENDO can be constructively dismissed from service
CONSTRUCTIVE DISCHARGE AND ILLEGAL HELD
DISMISSAL YES
Ratio Constructive dismissal exists where there is cessation of work because "continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a
MARK ROCHE V NLRC demotion in rank and a diminution in pay." All these are discernible in FLORENDO’s
313 SCRA 356 situation. She was singularly edged out of employment by the undesirable treatment she
BELLOSILLO; August 31, 1999 received from her superior, who discriminated against her without reason . (See above for
SANTOS’ acts against FLORENDO.) And although FLORENDO continued to have the
rank of a supervisor, her functions were reduced to a mere direct sales agent. This was
FACTS
tantamount to a demotion. She might not have suffered any diminution in her basic salary
- On different dates, private respondents filed separate complaints for underpayment of
but GLOBE et al. did not dispute her allegation that she was deprived of all benefits due
wages and non-payment of overtime pay against petitioners Mark Roche International
to another of her rank and position, benefits which she apparently used to receive.
(MRI), Eduardo Dayot and Susan Dayot. Private respondents sought the assistance of a
- Far from blaming SANTOS alone, FLORENDO also attributes her degraded state to
labor organization which helped them organize the Mark Roche Workers Union (MRWU).
GLOBE et al. She cited GLOBE et al.'s indifference to her plight as she was twice left out
Apparently irked by the idea of a union within the company, petitioners ordered private
in a salary increase, without GLOBE et al. giving her any reason. It eludes belief that
respondents to withdraw the petition and further threatened them that should they insist
GLOBE et al. were entirely in the dark as the salary increases were granted across-the-
in the organization of a union they would be dismissed. Unfazed, private respondents
board to all employees except FLORENDO. It is highly improbable that the exclusion of
refused. As expected, private respondents were discharged from work. Petitioners
FLORENDO had escaped GLOBE et al.'s notice. The absence of an evaluation report
disclaimed knowledge of any deficiency owing to private respondents since all the
from SANTOS should have been looked into by GLOBE et al. for proper action. If a
benefits due them as required by law were fully paid, except overtime pay which they
salary increase was unwarranted, then it should have been sufficiently explained by
were not entitled to on account of their being piece-rate workers. The Labor Arbiter
GLOBE et al. to FLORENDO. And despite GLOBE et al.’s claim that FLORENDO did not
rendered his decision declaring as illegal the constructive dismissal of private
brought her problem against SANTOS to the company's grievance machinery, it remains
respondents and ordered their reinstatement, payment of backwages, salary differentials
uncontroverted that FLORENDO had inquired from GLOBE et al. why her other benefits
and proportionate 13th month pay and service incentive leave pay. On appeal, the
had been withheld and sought clarification for her undeserved treatment but GLOBE and
National Labor Relations Commission (NLRC) affirmed the decision of the Labor Arbiter,
SANTOS remained mum.
but set aside the award of service incentive leave on the ground that private respondents
- Thus, the dispute was not a mere private spat between FLORENDO and her superior;
were not entitled thereto as they were piece-rate workers. Petitioners moved for
the case overflowed into the realm of FLORENDO's employment. And at the very least,
reconsideration, but it was denied. Hence, the present petition.
GLOBE et al. were negligent in supervising all of their employees.
- In constructive dismissal, the employer has the burden of proving that the transfer and
ISSUE
demotion of an employee are for just and valid grounds such as genuine business
WON the dismissal of private respondents was a constructive dismissal or an illegal
necessity. The transfer must not involve a demotion in rank or a diminution of salary and
dismissal
other benefits. If the employer cannot overcome this burden of proof, the employee's
demotion shall be tantamount to unlawful constructive dismissal. The award of back
HELD
wages in the instant case is justified upon the finding of illegal dismissal.
- Constructive dismissal or a constructive discharge has been defined as a quitting
Disposition CA decision that FLORENDO abandoned her work, SET ASIDE. GLOBE et
because continued employment is rendered impossible, unreasonable or unlikely, as an
al. to pay FLORENDO full back wages from the time she was constructively dismissed
offer involving a demotion in rank and a diminution in pay. In the instant case, private
until her reinstatement, and to cause immediate reinstatement of FLORENDO to her
respondents were not demoted in rank nor their pay diminished considerably. They were
former position, without loss of seniority rights and other benefits.
simply told without prior warning or notice that there was no more work for them. After
receiving the notice of hearing of the petition for certification election on 27 October
1992, petitioners immediately told private respondents that they were no longer
employed. Evidently it was the filing of the petition for certification election and
organization of a union within the company which led petitioners to dismiss private
respondents and not petitioners' allegations of absence or abandonment by private
respondents. The formation of a labor union has never been a ground for valid
termination, and where there is an absence of clear, valid and legal cause, the law
considers the termination illegal.

GLOBE TELECOM INC V FLORENDO

390 SCRA 201
September 27, 2002 PREVENTIVE SUSPENSION
NATURE GLOBE-MACKAY CABLE AND RADIO CORP V NLRC
Petition for review on certiorari of a decision of CA.
(SALAZAR)
FACTS 206 SCRA 702
- FLORENDO, a Senior Account Manager of Globe, filed a complaint for constructive ROMERO; March 3, 1992
dismissal against Globe with some key officials [GLOBE et al., for brevity] and
FLORENDO’s immediate superior Cacholo Santos [SANTOS, for brevity]. FLORENDO NATURE
complained that SANTOS never submitted her performance evaluation report thereby Appeal from a decision of NLRC
depriving her of salary increases and incentives which other employees of the same rank
had been receiving; reduced her to a house-to-house selling agent (i.e. a direct sales FACTS
agent) of company products ("handyphone") despite her rank as supervisor of company - Imelda L. Salazar was employed by Globe-Mackay Cable and Radio Corporation
dealers and agents; never supported her in the sales programs she presented; and, (GMCR) as general systems analyst. Also employed by petitioner as manager for
withheld all her other benefits. technical operations' support was Delfin Saldivar with whom private respondent was
allegedly very close.
Labor Law 1 A2010
- GMCR, prompted by reports that company equipment and spare parts worth thousands
of dollars under the custody of Saldivar were missing, caused the investigation of the
latter's activities.
- The report prepared by the company's internal auditor indicated that Saldivar had
entered into a partnership styled Concave Commercial and Industrial Company with
Richard A. Yambao, owner and manager of Elecon Engineering Services (Elecon), a
supplier of petitioner often recommended by Saldivar; that Saldivar had taken petitioner's
missing Fedders airconditioning unit for his own personal use without authorization and
also connived with Yambao to defraud petitioner of its property; that Imelda Salazar
violated company regulations by involving herself in transactions conflicting with the
company's interests. Evidence showed that she signed as a witness to the articles of
partnership between Yambao and Saldivar. It also appeared that she had full knowledge
of the loss and whereabouts of the Fedders airconditioner but failed to inform her
employer.
- GMCR placed Salazar under preventive suspension for 1 month, thus giving her 30
days within which to, explain her side. But instead of submitting an explanation, private
respondent filed a complaint against petitioner for illegal suspension, which she
subsequently amended to include illegal dismissal, vacation and sick leave benefits, 13th
month pay and damages, after petitioner notified her in writing that she was considered
dismissed in view of her inability to refute and disprove the findings.
- Labor Arbiter ordered petitioner company to reinstate private respondent to her former
or equivalent position and to pay her full backwages and other benefits
- NLRC affirmed the aforesaid decision
ISSUES
1. WON the suspension was illegal
2. WON Art.2794 of the Labor Code should apply
HELD
1. NO
Ratio By itself, preventive suspension does, not signify that the company has adjudged
the employee guilty of the charges she was asked to answer and explain. Such
disciplinary measure is resorted to for the protection of the company's property pending
investigation any alleged malfeasance or misfeasance committed by the employee.
Reasoning
- The investigative findings of GMCR which pointed to Saldivar's acts in conflict with his
position as technical operations manager, necessitated immediate and decisive action on
any employee closely, associated with Saldivar. The suspension of Salazar was further
impelled by the discovery of the missing Fedders airconditioning unit inside the
apartment private respondent shared with Saldivar. Under such circumstances,
preventive suspension was the proper remedial recourse available to the company
pending Salazar's investigation.
- If at all, the fault, lay with Salazar when she ignored petitioner's memo giving her ample
opportunity to present her side. Instead, she filed her complaint for illegal suspension
without giving her employer a chance to evaluate her side of the controversy.
2. YES
Ratio Where a case of unlawful or unauthorized dismissal has been proved by the
aggrieved employee, or on the other hand, the employer whose duty it is to prove the
lawfulness or justness of his act of dismissal has failed to do so, then the remedies
provided in Article 279 should find, application.
Reasoning
- It must be recalled that the present Constitution has gone further than the 1973 Charter
in guaranteeing vital social and economic rights to marginalized groups of society,
including labor. To be sure, both Charters recognize "security of tenure" as one of the
rights of labor which the State is mandated to protect. But there is no gainsaying the fact
that the intent of the framers of the present Constitution was to give primacy to the rights
of labor and afford the sector "full protection," at least greater protection than heretofore
accorded them, regardless of the geographical location of the workers and whether they
are organized or not.
- that the right of an employee not to be dismissed from his job except for a just or
authorized cause provided by law has assumed greater importance under the 1987
Constitution with the singular prominence labor enjoys under the article on Social Justice.
And this transcendent policy has been translated into law in the Labor Code
- The intendment of the law in prescribing the twin remedies of reinstatement and
payment of backwages is, in the former, to restore the dismissed employee to her status
before she lost her job, for the dictionary meaning of the word "reinstate" is "to restore to
4 aforesaid. Moral damages and exemplary damages were likewise awarded. On appeal,
The following provision on security of tenure is embodied in Article 279 reproduced herein but with the amendments
inserted by RA 6715:
In cases of regular employment, the employer shall not terminate the services of-an employee except for a just cause
or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights AND OTHER PRIVILEGES and to his FULL backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to
the time of his ACTUAL reinstatement.
- 252 - Disini
a state from which one had been removed" and in the latter, to give her back the income
lost during the period of unemployment.
- Over time, the following reasons have been advanced by the Court for denying
reinstatement under the facts of the case and the law applicable thereto; that
reinstatement can no longer be effected in view of the long passage of time or because
of the realities of the situation; or that it would be "inimical to the employer's interest; " or
that reinstatement may no longer be feasible; or that it will not serve the best interests of
the parties involved; or that the company would be prejudiced by the workers' continued
employment; or that it will not serve any prudent purpose as when supervening facts
have transpired which make execution on that score unjust or inequitable or, to an
increasing extent, due to the resultant atmosphere of "antipathy and antagonism" or
"strained relations" or "irretrievable estrangement" between the employer and the
employee. In lieu of reinstatement, the Court has variously ordered the payment of
backwages and separation pay or solely separation pay.
- If in the wisdom of the Court, there may be a ground or grounds for non-application of
the Art.279, this should be by way of exception, such as when the reinstatement may be
inadmissible due to ensuing strained relations between the employer and the employee.
- Here, it has not been proved that the position of private respondent as systems analyst
is one that may be characterized as a position of trust and confidence such that if
reinstated, it may well lead to strained relations between employer and employee.
Hence, this does not constitute an exception to the general rule mandating reinstatement
for an employee who has been unlawfully dismissed.
- To rely on the Maramara report as a basis for Salazar's dismissal would be most
inequitous because the bulk of the findings centered principally oh her friend's alleged
thievery and anomalous transactions as technical operations' support manager. Said
report merely insinuated that in view of Salazar's special relationship with Saldivar,
Salazar might have had direct knowledge of Saldivar's questionable activities. Direct
evidence implicating private respondent is wanting from the records.
Disposition The assailed resolution of NLRC is AFFIRMED. Petitioner GMCR is ordered
to REINSTATE Salazar and to pay her backwages equivalent to her salary for a period of
2 years only. The decision is immediately executory.
SEPARATE OPINIION
MELENCIO-HERRERA [dissent]
- I believe there is just cause for dismissal per investigative findings.
PHIL AIRLINES INC V NLRC (CASTRO)
292 SCRA 40
ROMERO; July 8, 1998
NATURE
Appeal from a decision of the NLRC affirming the decision of the LA
FACTS
- Private Respondent Edilberto Castro, an employee (manifesting clerk) of PAL was
apprehended by govt. authorities while about to board a flight to H.K. Castro and co-
employee Arnaldo Olfindo were found to be in possession of P39,850 and P6,000
respectively, in violation of Central Bank (CB) Circular 265, as amended by CB Circular
383, 1 in relation to Section 34 of R.A. 265, as amended.
- Upon knowledge of this incident, PAL required respondent to explain within 24 hrs why
he should not be charged administratively. He failed to comply and was placed on
preventive suspension effective March 27, 1984 for grave misconduct. An investigation
was later conducted wherein respondent admitted ownership of the confiscated money
but denied any knowledge of CB Circular 265. Respondent, through the PAL Employees
Association (PALEA) then sought not only the dismissal of his case but also prayed for
his reinstatement.
- 3 years and 6 months after his suspension, PAL issued a resolution finding respondent
guilty of the offense charged but nonetheless reinstated the latter explaining that the
period within which he was out of work shall serve as penalty for suspension. Upon
reinstatement, respondent filed a claim against PAL for backwages and salary increases
granted under the CBA covering the period of his suspension which the latter, however,
denied on account that under the existing CBA, “an employee under suspension is not
entitled to CBA salary increases granted during the period covered by his penalty.”
- Labor Arbiter De Vera rendered a decision in favor of Castro; limiting his suspension to
1 month; ordering PAL to pay his salaries, benefits, and other privileges from April 26,
1984 up to Sept. 18, 1987 and to pay his salary increases accruing during the period
the NLRC affirmed the LA decision but deleted the award of moral and exemplary
damages, hence, this petition.
ISSUE
Labor Law 1 A2010
WON an employee who has been preventively suspended beyond the maximum 30-day
period is entitled to backwages and salary increases granted under the CBA during his
period of suspension
HELD
YES
- The rules are rather clear under Secs. 3 and 4, Rule XIV of the Omnibus Rules
Implementing the Labor Code:
Sec.3. Preventive suspension. The employer can place the worker concerned under
preventive suspension if his continued employment poses a serious and imminent
threat to the life or property of the employer or of his co-workers
Sec.4. Period of suspension. No preventive suspension shall last longer than 30
days. The employer shall thereafter reinstate the worker in his former or in a
substantially equivalent position or the employer may extend the period of suspension
provided that during the period of extension, he pays the wages and other benefits
due to the workers. In such case, the worker, shall not be bound to reimburse the
amount paid to him during the extension if the employer decides, after completion of
the hearing, to dismiss the worker.
Reasoning
- It is undisputed that the period of suspension of respondent lasted for 3 years and 6
months. PAL, therefore, committed a serious transgression when it manifestly delayed
the determination of respondent’s culpability in the offense charged. The provisions of
the rules are explicit and direct; hence, there is no reason to further elaborate on the
same.
- PAL faults the LA and the NLRC for allegedly equating preventive suspension as
remedial measure with suspension as penalty for administrative offenses. This argument
is inaccurate. As held in Beja Sr. v CA: “Imposed during the pendency of an
administrative investigation, preventive suspension is not a penalty in itself. It is merely a
measure of precaution so that the employee who is charged may be separated, for
obvious reasons, from the scene of his alleged misfeasance while the same is being
investigated. While the former may be imposed on a respondent during the investigation
of the charges against him, the latter is the penalty which may only be meted upon him at
the termination of the investigation or the final disposition of the case.” A cursory reading
of the records reveals no reason to ascribe grave abuse of discretion against the NLRC;
its decision was grounded upon petitioner’s manifest indifference to the plight of its
suspended employee and its consequent violation of the Implementing Rules of the
Labor Code.
- As the NLRC correctly ruled: “The long period of preventive suspension could even be
considered constructive dismissal because were it not for his letters demanding his
reinstatement, PAL by its inaction appeared to have no plan to employ respondent back
to work.” The manifest inaction of PAL over the pendency of the administrative charge is
indeed violative of Castro’s security of tenure because without any justifiable cause and
due process, his employment would have gone into oblivion.
- PAL contends that when respondent consented to the resolution that the entire period
of suspension shall constitute his penalty for the offense charged, the latter is thereby
estopped to question the validity of said suspension. We concur with the labor arbiter
when he ruled that the ensuing conformity by respondent does not cure petitioner's
blatant violation of the law, and the same is therefore null and void- We do not question
the right of the petitioner to discipline its erring employees and to impose reasonable
penalties pursuant to law and company rules and regulations. “Having this right,
however, should not be confused with the manner in which that right must be exercised.”
Thus, the exercise by an employer of its rights to regulate all aspects of employment
must be in keeping with good faith and not be used as a pretext for defeating the rights of
employees under the laws and applicable contracts. Petitioner utterly failed in this
respect.
Disposition Petition is DISMISSED for lack of merit. Assailed decision is AFFIRMED.
VALIAO V CA
[PAGE 11]
CADIZ V CA
[PAGE 224]
MARICALUM MINING CORP V DECORION
487 SCRA 182
TINGA; April 12, 2006
NATURE
Appeal from decision of CA
- 253 - Disini
FACTS
- Decorion was a regular employee of Maricalum Mining who started out as a Mill
Mechanic and was later promoted to Foreman I.
- On April 11, 1996, the Concentrator Maintenance Supervisor called a meeting which
Decorion failed to attend as he was then supervising the workers under him. Because of
his alleged insubordination for failure to attend the meeting, he was placed under
preventive suspension on the same day. He was also not allowed to report for work the
following day.
- May 12, 1996, Decorion was served a Notice of Infraction and Proposed Dismissal to
enable him to present his side. On May 15, he submitted to the Personnel Department
his written reply. A grievance meeting was held upon Decorion's request on June 5,
during which he manifested that he failed to attend the meeting on April 11 because he
was then still assigning work to his men. He maintained that he has not committed any
offense and that his service record would show his efficiency.
- July 23, 1996, Decorion filed before the Labor Arbiter a complaint for illegal dismissal
and payment of moral and exemplary damages and attorney's fees.
- In the meantime, the matter of Decorion's suspension and proposed dismissal was
referred to Atty. Roman G. Pacia, Jr., Maricalum Mining's Chief and Head of Legal and
Industrial Relations, and recommended that Decorion's indefinite suspension be made
definite with a warning that a repetition of the same conduct would be punished with
dismissal. Maricalum Mining's Resident Manager issued a memorandum on August 2
placing Decorion under definite disciplinary suspension of 6 months which would include
the period of his preventive suspension which was made to take effect retroactively.
- On September 4, 1996, Decorion was served a memorandum informing him of his
temporary lay-off due to Maricalum Mining's temporary suspension of operations and
shut down of its mining operations for 6 months, with the assurance that in the event of
resumption of operations, he would be reinstated to his former position without loss of
seniority rights.
- Decorion, through counsel, wrote to Maricalum Mining on October 8, 1996, requesting
that he be reinstated to his former position. The request was denied with the explanation
that priority for retention and inclusion in the skeleton force was given to employees who
are efficient and whose services are necessary during the shutdown.
- Labor Arbiter found Decorion's dismissal illegal and ordered his reinstatement with
payment of backwages and attorney's fees. According to the labor arbiter, Decorion's
failure to attend the meeting called by his supervisor did not justify his preventive
suspension. Further, no preventive suspension should last longer than 30 days.
- The NLRC, however, reversed the labor arbiter's decision and dismissed Decorion's
complaint. The reversal was premised on the finding that the case was litigated solely on
Decorion's allegation that he was dismissed on April 11, 1996. However, during the
grievance meeting held on June 5, 1996, Decorion left it up to management to decide his
fate, indicating that as of that time, there was no decision to terminate his services yet.
According to the NLRC, to consider the events that transpired after April 11, 1996 and
make the same the basis for the finding of illegal dismissal would violate Maricalum
Mining's right to due process.
- CA reinstated decision of labor arbiter. It held that Decorion was placed under
preventive suspension immediately after he failed to attend the meeting called by his
supervisor on April 11, 1996. At the time he filed the complaint for illegal dismissal on
July 23, 1996, he had already been under preventive suspension for more than 100 days
in violation of Sec. 9, Rule XXIII, Book V of the Omnibus Rules Implementing the Labor
Code (Implementing Rules) which provides that no preventive suspension shall last
longer than 30 days.
- Maricalum Mining’s MFR was denied.
ISSUE
WON Decorion was dismissed or merely under preventive suspension
HELD
- Decorion’s preventive suspension has already ripened into a constructive dismissal.
- Sections 8 and 9 of Rule XXIII, Book V of the Implementing Rules provide:
Section 8. Preventive suspension. — The employer may place the worker
concerned under preventive suspension if his continued employment poses a
serious and imminent threat to the life or property of the employer or his co-
workers.
Section 9. Period of Suspension — No preventive suspension shall last longer
than thirty (30) days. The employer shall thereafter reinstate the worker in his
former or in a substantially equivalent position or the employer may extend the
period of suspension provided that during the period of extension, he pays the
wages and other benefits due to the worker. In such case, the worker shall not
be bound to reimburse the amount paid to him during the extension if the
employer decides, after completion of the hearing, to dismiss the worker.
- Preventive suspension is justified where the employee's continued employment
poses a serious and imminent threat to the life or property of the employer or of
the employee's co-workers. Without this kind of threat, preventive suspension is
not proper.
Labor Law 1 A2010
- Decorion was suspended only because he failed to attend a meeting called by
his supervisor. There is no evidence to indicate that his failure to attend the
meeting prejudiced his employer or that his presence in the company's premises
posed a serious threat to his employer and co-workers. The preventive
suspension was unjustified.
- Decorion's suspension persisted beyond the 30-day period allowed by the
Implementing Rules. In Premiere Development Bank v. NLRC the Court ruled that
preventive suspension which lasts beyond the maximum period allowed by the
Implementing Rules amounts to constructive dismissal.  - The twin requirements of notice and hearing constitute essential elements of due
- At the time Decorion filed a complaint for illegal dismissal, he had already been
suspended for 103 days. Decorion's preventive suspension had already ripened
into constructive dismissal at. While actual dismissal and constructive dismissal
do take place in different fashion, the legal consequences they generate are
identical. His employment may not have been actually terminated in the sense
that he was not served walking papers but there is no doubt that he was
constructively dismissed as he was forced to quit because continued employment
was rendered impossible, unreasonable or unlikely by Maricalum Mining's act of
preventing him from reporting for work.
- Article 286 of the Labor Code, which provides that the bona fide suspension of
the operation of a business or undertaking for a period not exceeding six (6)
months shall not terminate employment, may not be applied in this case. The
instant case involves the preventive suspension of an employee not by reason of
the suspension of the business operations of the employer but because of the
employee's failure to attend a meeting. The allowable period of suspension in
such a case is only 30 days as provided by the Implementing Rules.
Disposition Petition denied. CA’s decision affirmed.
RATIONALE
KWIKWAY ENG’G WORKS V NLRC (VARGAS)
195 SCRA 526
MEDIALDEA; March 22, 1991
FACTS
- Respondent Vargas was formerly employed by Kwikway as bookkeeper and secretary.
As bookkeeper, it was her duty to fill up the check vouchers and indicate therein the
name of the customer agent and the amount payable to each before they are presented
to the agents for signing.
- The new branch manager (BM) discovered that several blank vouchers already
contained the signatures of the mechanic agents. BM confronted the branch cashier in
charge of the vouchers, Marina Corpus, concerning the irregularity. Corpus explained
that Vargas was aware of this practice. When asked for an explanation, Vargas stated
that the procedure has been the practice in that office since the time of the former branch
manager who had knowledge thereof.
- BM informed the head office with his discovery. Kwikway’s VP conducted an
investigation. On the following day, Vargas and Corpus were placed under preventive
suspension for an indefinite period of time on the ground of loss of trust and confidence.
- Vargas was informed of the result of the investigation. Kwikway offered her a chance to
resign with separation pay, which she accepted.
- The Labor Arbiter rendered a decision directing the reinstatement of respondent Vargas
to her former position with backwages. NLRC affirmed the decision of the labor arbiter.
- Petitioner: the nature of the position of Vargas involves trust and confidence. That
private respondent's acts of dishonesty as well as her active participation in violating and
infringing company accounting procedure which allowed the cashier to personally
misappropriate sums of money provide sufficient basis for dismissing respondent. That
Vargas was aware that her cashier Corpus was committing acts of dishonesty and
misappropriation of company funds but she did not report the matter to her superiors in
the company. That the actuations of Vargas were in violation of the company's code of
conduct, which is punishable by dismissal.
ISSUES
1. WON the dismissal of respondent Vargas was for a just and valid cause
2. WON respondent Vargas was deprived of her constitutional right to due process
HELD
1. YES
- The rule is settled that if there is sufficient evidence to show that the employee has
been guilty of breach of trust or that his employer has ample reason to distrust him, the
labor tribunal cannot justly deny to the employer the authority to dismiss such employee.
- Jurisprudence abounds with cases recognizing the right of the employer to dismiss the
employee on loss of confidence. More so in the case of supervisors or personnel
occupying positions of responsibility, loss of trust justifies termination
- 254 - Disini
- The mere existence of basis for believing that the employee has breached the trust of
employer is sufficient and does not require proof beyond reasonable doubt.
- Clearly, respondent Vargas's position involves a high degree of responsibility requiring
trust and confidence. Her position carries with it the duty to observe proper company
procedures in the fulfillment of her job as it relates closely to the financial interests of the
company.
2. YES
Notice and Hearing
process in cases of employee dismissal: the requirement of notice is intended to inform
the employee concerned of the employer's intent to dismiss and the reason for the
proposed dismissal; upon the other hand, the requirement of hearing affords the
employee an opportunity to answer his employer's charges against him accordingly to
defend himself therefrom before dismissal is effected. Neither of these two requirements
can be dispensed with without running afoul of the due process requirement of the 1987
Constitution.
- In the instant case, the records are bereft of any indication that a formal notice of the
charge was given to the respondent prior to the suspension or that the said investigation
gave adequate opportunity to the respondent to defend herself. It is important to stress
that an employee whose services are sought to be terminated, has the right to be
informed beforehand of his proposed dismissal or suspension as well as of the reasons
therefor and to be afforded an adequate opportunity to defend himself from the charges
leveled against him. We give respect to the following conclusions of the labor arbiter and
respondent Commission:
“It is patent from the respondent's submission that written notice specifying the causes
for termination was never furnished to complainant. Neither does it appear that she
was given enough opportunity to explain her side and defend herself with the
assistance of a representative of her choice is she so desires. “
Preventive Suspension
- Further, the preventive suspension of respondent Vargas for an indefinite period
amounted to a dismissal and is violative of Section 4, Rule XIV of the Implementing
Rules of the Labor Code which limits the preventive suspension to thirty (30) days. The
said rule also provides that "the employer shall thereafter reinstate the worker in his
former or in a substantially equivalent position or the employer may extend the period of
suspension provided that during the period of extension, he pays the wages and other
benefits due to the worker." (Pacific Cement Company Inc. v. NLRC
Disposition the petition GRANTED. The questioned decision of the respondent NLRC
insofar as it ordered the reinstatement of respondent Rosalinda Vargas with payment of
three (3) years backwages is REVERSED and SET ASIDE.
- Petitioner company is ordered to pay an indemnity of P1,000.00 to respondent Vargas
(For failure of the employer to comply with the requirements of due process in
terminating the employees service, it shall be liable to indemnify the employee in the sum
of P1,000.00 as damages)
GATBONTON V NLRC (MIT, CALDERON)
479 SCRA 416
AUSTRIA-MARTINEZ; January 23, 2006
NATURE
Petition for review on certiorari
FACTS
- Gatbonton is a professor at the Mapua Institute of Technology, a member of the Faculty
of Civil Engineering. In November 1998, a student filed a complaint of sexual
harassment against Gatbonton. He was then placed under preventive suspension for 30
days pending investigation.
- Gatbonton filed a complaint against MIT for illegal suspension.
- Petitioner questioned the validity of the administrative proceedings with the Manila RTC
but the case was terminated on May 21, 1999 when the parties entered into a
compromise agreement wherein MIT agreed to publish in the school organ the rules and
regulations implementing the Anti-Sexual Harassment Act. The Labor Arbiter later
declared that the preventive suspension imposed was illegal.
- Both respondents and petitioner filed their appeal from the Labor Arbiter’s Decision,
with Gatbonton questioning the dismissal of his claim for damages. The NLRC favorable
granted the appeal of respondent MIT. Gatbonton.
ISSUE
WON the NLRC erred in dismissing Gatbonton’s claim for damages stemming from an
alleged illegal suspension
HELD
YES
Ratio Preventive suspension is a disciplinary measure for the protection of the
company’s property pending investigation of any alleged malfeasance or misfeasance
Labor Law 1 A2010 - 255 - Disini
committed by the employee. The employer may place the worker concerned under
preventive suspension if his continued employment poses a serious and imminent threat
to the life or property of the employer or of his co-workers. However, when it is
determined that there is no sufficient basis to justify an employee’s preventive
suspension, the latter is entitled to the payment of salaries during the time of preventive
suspension.
Reasoning
- R.A. No. 7877 imposed the duty on educational or training institutions to “promulgate
rules and regulations in consultation with and jointly approved by the employees or
students or trainees, through their duly designated representatives, prescribing the
procedures for the investigation of sexual harassment cases and the administrative
sanctions therefor.”
- Petitioner’s preventive suspension was based on respondent MIT’s Rules and
Regulations for the Implemention of the Anti-Sexual Harassment Act which provides that
“any member of the educational community may be placed immediately under preventive
suspension during the pendency of the hearing of the charges of grave sexual
harassment against him if the evidence of his guilt is strong and the school head is
morally convinced that the continued stay of the accused during the period of
investigation constitutes a distraction to the normal operations of the institution or poses
a risk or danger to the life or property of the other members of the educational
community.”
- But the said rules and regulations were published only on February 23, 1999.
- The Mapua Rules is one of those issuances that should be published for its effectivity,
since its purpose is to enforce and implement R.A. No. 7877, which is a law of general
application. Thus, at the time of the imposition of petitioner’s preventive suspension on
January 11, 1999, the Mapua Rules were not yet legally effective, and therefore the
suspension had no legal basis.
- The Court also finds that there is insufficient legal basis to justify the preventive
suspension because of the absence of the required requisites. Under the Mapua Rules,
an accused may be placed under preventive suspension during pendency of the hearing
under any of the following circumstances: 
(a) if the evidence of his guilt is strong and the school head is morally convinced that the
continued stay of the accused during the period of investigation constitutes a distraction
to the normal operations of the institution; or   
(b) the accused poses a risk or danger to the life or property of the other members of the
educational community.
Disposition petition is PARTIALLY GRANTED. The decision of Labor Arbiter is
reinstated while the decisions of the CA and the NLRC are set aside.

NUMBER OFFENSES

APARENTE V NLRC
[PAGE 240]