BMPI vs.

Casas
G.R. No 200898 June 15, 2015
Brion, J.
Facts: Maria Rosario M. Casas was the VP for Finance and Administration of BMPI, a member of ALC
Group of Companies. The case sprung from the dismissal of Casas from BMPI.
Casas aver that on January 5, 2007, BMPIs company president and ALCs VP for Central Human
Development met with her and told her not to report to work anymore starting January 8 upon the
instruction of ALCs Chairman Emeritus. After the meeting, she took her belongings and left the office.
She further claims that the reason for Abrupt dismissal was not disclosed to her.
BMPI on the other hand alleged that Casas was not dismissed but she merely abandoned her work. The
company avers that when certain administrative complaints were filed against her, she requested a
graceful exit from the company on the Januray 5 meeting; and that Casas opted to leave the company to
avoid an administrative investigation.
Casas no loner reported for work on January 8. BMPI on the other hand issued her a Clearance and
Quitclaim. After several months, Casas sent a letter asking for reconsideration of her dismissal but to
no avail. To this, Casas filed a complaint for illegal dismissal.
LA: Ruled that Casas was not illegally dismissed but she instead abandoned her work. The LA then
ordered that she be reinstated.
NLRC: Reversed LAs finding. It ruled that Casas was illegally dismissed.
CA: Affirmed NLRCs ruling and held that it did not commit any grave abuse of discretion.
Issue: Whether or not respondent was illegally dismissed.
Held: Yes. In determining whether an employees dismissal had been legal, the inquiry focuses on
whether the dismissal violated his right to substantial and procedural process. An employees right not
to be dismissed without just or authorized case as provided by law, is covered by his right to substantial
due process. Compliance with procedure provided in the Labor Code, on the other hand, constitutes the
procedural right of an employee.
Absence of the first, renders the dismissal invalid, and thus entitling the employee reinstatement
without loss of seniority rights, privileges and full backwages. While absence of the second, does not
invalidate the dismissal but obligates the erring employer to pay nominal damages to the employee.
Respondents dismissal is without procedural due process.
Rule XIV of the Omnibus Rules Implementing the Labor Code provides that two written notices are
required before dismissal can be made. The first notice must state the particular acts and omission
constituting the grounds for the employees dismissal. The same rule requires that the employer
should afford the worker ample opportunity to be heard and defend himself. The second notice then
must notify the employee its decision to dismiss him stating clearly the reasons therefor. There can be
no doubt that procedural requirement has not been complied in the present case as shortly after the
meeting, Casas took her belongings from the office this showed that she was summarily dismissed.
BMPI also failed to show any written notice was provided to Casas in conformance with the above Rule.

And even assuming arguendo that respondent abandoned her work, BMPI still had the duty to give her a
written notice of the grounds leading to her dismissal.
Respondents dismissal is without substantive due process.
Just cause must be proven with substantial evident at the time of the dismissal. Due process in the Labor
Code is different with that of Constitutional due process as ruled in Agabon. However, despite the
difference in origin and application between constitutional due process rights and statutory
requirements of the Labor Code, concepts implementing constitutional due process to the statutory due
process requirements of the Labor Code may still be applied. In the same way that the crime charged
against the accused must first be prven before his or her right to liberty is taken away, so too must just
cause against an employee be proven before he or she may be deprived of a means of livelihood.
Otherwise, the employees right to substantive due process would be violated. As no sufficient
substantial evidence of just cause was given, it must be concluded that there was no merit with
respondents dismissal.

MILAN vs. NLRC

GR. NO. 202961, FEBRUARY 4, 2015
FACTS:
Petitioners are respondent Solid Mills, Inc. (Solid Mills) employees. They are
represented by the National Federation of Labor Unions (NAFLU), their collective
bargaining agent. As Solid Mills employees, petitioners and their families were
allowed to occupy SMI village, a property owned by Solid Mills. According to Solid
Mills this was out of liberality and for the convenience of its employees and on
the condition that the employees would vacate the premises anytime the
Company deems fit. In September 2003, petitioners were informed that effective
October 10, 2003, Solid Mills would cease its operations due to serious business
losses. NAFLU recognized Solid mills closure due to serious business losses in the
memorandum of agreement dated September 1, 2003.
The memorandum of agreement provided for Solid Mills grant of separation pay
less accountabilities, accrued sick leave benefits, vacation leave benefits, and 13th
month pay to the employees. Solid Mills filed its Department of Labor
Employment termination report on September 2, 2003. Later, Solid Mills, through
Alfredo Jingco, sent to petitioners individual notices to vacate SMI village.
Petitioners were no longer allowed to report for work by October 10, 2003. They
were required to sign a memorandum of agreement with release and quitclaim

before their vacation and sick leave benefits, 13th month pay and separation pay
would be released. Employees who have signed the memorandum agreement
were considered to have agreed to vacate SMI Village, and to the demolition of
the constructed houses inside as condition for the release of their termination
benefits and separation pay. Petitioners refused to sign the documents and
demanded to be paid their benefits and separation pay.
Hence, petitioners filed complaints before the Labor Arbiter for alleged nonpayment of separation pay, accrued sick and vacation leaves, and 13th month pay.
They argued that their accrued benefits and separation pay should not be
withheld because their payment is based on company policy and practice.
Moreover, the 13th month pay is based on law, specifically PD. No. 851. Their
possession of Solid mills property is not on accountability that is subject to
clearance procedures.
On the other hand, Solid Mills argued that petitioners complaint was premature
because they had not vacated its property.
LA: Ruled in favor of petitioners. According to the LA, Solid Mills illegally withheld
petitioners benefits and separation pay. Petitioners right to the payment of their
benefits and separation pay was vested by law and contract. The memorandum of
agreement stated no condition to the effect that petitioners must vacate Solid
Mills property before their benefits could be given to them. Petitioners
possession should not be construed as petitioners accountabilities that must be
cleared first before the release of benefits. Their possession is not by virtue of any
employer-employee relationship. It is a civil issue which is outside the jurisdiction
of LA.
NLRC: Ruled that because of petitioners failure to vacate Solid Mills property,
Solid Mills was justified in withholding their benefits and separation pay. Solid
Mills granted the petitioners the privilege to occupy its property on account of
petitioners employment. It had the prerogative to terminate such privilege. The
termination of Solid Mills and petitioners employer-employee relationship made
it incumbent upon petitioners to turn over the property to Solid Mills.

CA: Ruled that Solid Mills act of allowing its employees to make temporary
dwellings in its property was a liberality on its part. It may be revoked any time at
its discretion. As a consequence of Solid Mills closure and the resulting
termination of petitioners, the employer-employee relationship between them
ceased to exist. There was no reason for them to stay in Solid Mills property.
Moreover, the memorandum of agreement between Solid Mills and the union
representing petitioners provided that Solid Mills payment of employees benefits
should be less accountabilities.
ISSUE:
Whether or not Petitioners benefits were properly withheld by Solid Mills
HELD:
Yes. As a general rule, employers are prohibited from withholding wages from
employees. The Labor Code also prohibits the elimination or diminution of
benefits. However, our law supports that employers institution of clearance
procedures before the release of wages, as an exception to the general rule that
wages may not be withheld and benefits may not be diminished.
Accountability in its ordinary sense mean obligation or debt. The ordinary
meaning of the term does not limit the definition of accountability to those
incurred in the worksite. As long as debt or obligation was incurred by virtue of
the employer-employee relationship, generally, it shall be included in the
employees accountabilities that are subject to clearance procedures.
It may be true that not all employees enjoyed the privilege of staying in
respondent Solid mills property. However, this alone does not imply that this
privilege when enjoyed was not a result of the employer-employee relationship.
Those who did avail of the privilege were employees of respondent. Petitioners
possession should therefore be included in the term accountability.
The return of the propertys possession became an obligation or liability on the
part of the employees when the employer-employee relationship ceased. Thus
respondent Solid Mills has the right to withhold petitioners wages and benefits

because of this existing debt or liability. The law does not sanction a situation
where employees who do not even assert any claim over the employers property
are allowed to take all the benefits out of their employment while they
simultaneously withhold possession of their employers property for no rightful
reason. Withholding of payment by the employer does not mean that the
employer may renege on its obligation to pay employees their wages, termination
payments and due benefits. The employees benefits are also not being reduced.
It is only subjected to the condition that the employees return properties properly
belong to the employer. This is only consistent with the equitable principle that
no one shall be unjustly enriched or benefited at the expense of another.
For these reasons, we cannot hold that petitioners are entitled to interest of their
withheld separation benefits. These benefits were properly withheld by
respondent Solid Mills because of their refusal to return its property.

LEUS vs. ST. SCHOLASTICAS COLLEGE

G.R. No. 187226; January 28, 2015
PETITIONER: CHERYLL SANTOS LEUS
RESPONDENTS: ST. SCHOLASTICA'S COLLEGE WESTGROVE and/or SR. EDNA QUIAMBAO, OSB
PONENTE: REYES, J.
DOCTRINE:
Facts: RESPONDENT St. Scholasticas College Westgrove (SSCW) is a Catholic and sectarian educational
institution in Silang, Cavite. In May 2001, it hired petitioner Cheryll Santos Leus as an assistant to SSCWs
director of the Lay Apostolate and Community Outreach Directorate. She engaged in pre-marital sexual
relations with a boyfriend, resulting in her pregnancy sometime in 2003. Subsequently, the father of her
child married her.
In a letter dated June 11, 2003, respondent Sr. Edna Quiambao, SSCWs directress, informed petitioner
that her employment with SSCW was terminated, citing as a ground Section 94(e) of the 1992 Manual of
Regulations for Private Schools (MRPS) on disgraceful or immoral conduct. Thereupon, the petitioner
filed a complaint for illegal dismissal with the Regional Arbitration Branch of the National Labor
Relations Commission (NLRC) in Quezon City against SSCW and Sr. Quiambao. Does her case prosper?
Ruling: Yes.

Admittedly, the petitioner is employed in an educational institution where the teachings and doctrines
of the Catholic Church, including that on pre-marital sexual relations, is strictly upheld and taught to the
students. That her indiscretion, which resulted in her pregnancy out of wedlock, is anathema to the
doctrines of the Catholic Church. However, viewed against the prevailing norms of conduct, the
petitioners conduct cannot be considered as disgraceful or immoral; such conduct is not denounced by
public and secular morality. It may be an unusual arrangement, but it certainly is not disgraceful or
immoral within the contemplation of the law.
To stress, pre-marital sexual relations between two consenting adults who have no impediment to
marry each other, and, consequently, conceiving a child out of wedlock, gauged from a purely public and
secular view of morality, does not amount to a disgraceful or immoral conduct under Section 94(e) of
the 1992 MRPS.
Accordingly, the labor tribunals erred in upholding the validity of the petitioners dismissal. The labor
tribunals arbitrarily relied solely on the circumstances surrounding the petitioners pregnancy and its
supposed effect on SSCW and its students without evaluating whether the petitioners conduct is indeed
considered disgraceful or immoral in view of the prevailing norms of conduct. In this regard, the labor
tribunals respective haphazard evaluation of the evidence amounts to grave abuse of discretion, which
the Court will rectify.
xxx
Contrary to the labor tribunals declarations, the Court finds that SSCW failed to adduce substantial
evidence to prove that the petitioners indiscretion indeed caused grave scandal to SSCW and its
students. Other than the SSCWs bare allegation, the records are bereft of any evidence that would
convincingly prove that the petitioners conduct indeed adversely affected SSCWs integrity in teaching
the moral doctrines, which it stands for. The petitioner is only a non-teaching personnel; her interaction
with SSCWs students is very limited. It is thus quite impossible that her pregnancy out of wedlock
caused such a grave scandal, as claimed by SSCW, as to warrant her dismissal. (Reyes, J., SC Third
Division, Cheryll Santos Leus vs. St. Scholasticas College Westgrove and/or Sr. Edna Quiambao, OSB,
G.R. No. 187226, January 28, 2015).
Bearing a child out of wedlock is not a just cause to terminate an employee even if the employer is a
faith-based institution. This was the ruling of a Supreme Court (SC) division in the case of Cheryll Santos
Leus, who sued her former employer, St Scholastica's College Westgrove (SSCW), for unjust dismissal.
Leus elevated the case to the High Court after the Court of Appeals affirmed her dismissal. On Tuesday,
February 24, the SC announced that the 23-page decision, penned by Associate Justice Bienvenido
Reyes, draws the line between religious and public morality.The school fired Leus, citing the 1992
Manual of Regulation for Private Schools (MRPS), which lists "disgraceful or immoral conduct" as a
ground for a workers' dismissal.
Leus married the father of her child before SSCW fired her, but her earlier pregnancy was seen by SSCW
as scandalous to the school. The SC division said that "when the law refers to morality, it necessarily
pertains to public and secular morality and not religious morality."

"[F]or a conduct to be considered as disgraceful or immoral, it must be 'detrimental to those conditions

which depend [on] the existence and progress of human society' and not because the conduct is
proscribed by the beliefs of one religion or the other," the decision read. Security of tenure or a workers'
protection from termination without just cause and due process is a right enshrined in the Constitution.
(READ: House panel tackles job security bills)
This right cannot be impaired "unless for cause under the Labor Code and other laws, in this case, the
1992 MRPS," the SC said.
Catholic schools SSCW is a Catholic institution under the order of Saint Benedict. SSCW did not provide
evidence showing that Leus's conduct adversely affected its reputation in promoting its moral doctrines
among its students and beyond, the SC division ruled.
At the time of Leus' dismissal, there was no school policy either which regulated the conduct of its
employees regarding sexual relations and any resulting pregnancies out of marriage. The institution
itself acknowledged this in the case, the SC said.
Appeals court ruling reversed. The SC ruling on Leus' case, promulgated on February 17, reversed an
appellate court's decision that affirmed her dismissal. While the Court of Appeals sided with SSCW, the
Supreme Court Third Division ruled that pre-marital relations between two consenting adults who have
no impediment to marry each other, and consequently conceiving a child out of wedlock" is not
disgraceful or immoral under MRPS.
"[T]here is no law which between two unmarried persons," it explained. "Such conduct is not denounced
by public and secular morality. It may be an unusual arrangement, but it certainly is not disgraceful or
immoral within the contemplation of the law," it added.