III. TERMINATION OF EMPLOYMENT
Respondent was later caught by surprise when
A. EMPLOYER’S RIGHT TO DISCIPLINE
59 Negros Slashers, Inc., et al. v. Alvin L. Teng
(BASKETBALL players are contractual employees)
Facts:
Respondent Alvin Teng is a professional basketball player who
started his career as such in the Philippine Basketball Association and
then later on played in the Metropolitan Basketball Association (MBA).
Some time in one of his games, particularly Game Number 4 of
the MBA Championship Round for the year 2000 season, Teng had a
below-par playing performance. Because of this, the coaching staff
decided to pull him out of the game. Teng then sat on the bench, untied
his shoelaces and donned his practice jersey. On the following game,
Game Number 5 of the Championship Round, Teng called-in sick and did
not play.
On March 16, 2001, because of what happened, the
management of Negros Slashers came up with a decision, and through
its General Manager, petitioner Rodolfo Alvarez, wrote Teng informing
him of his termination from the team.
Issue:
Whether or not Teng’s dismissal from the Negros Slashers
Team was unjustified and too harsh considering his misconduct.
Ruling:
YES. As ruled in Sagales v. Rustan’s Commercial Corporation,
while the employer has the inherent right to discipline, including that
of dismissing its employees, this prerogative is subject to the
regulation by the State in the exercise of its police power.
In this regard, it is a hornbook doctrine that infractions
committed by an employee should merit only the corresponding penalty
demanded by the circumstance. The penalty must be commensurate with
the act, conduct or omission imputed to the employee and must be
imposed in connection with the disciplinary authority of the employer.
In the case at bar, the penalty handed out by the petitioners
was the ultimate penalty of dismissal. There was no warning or
admonition for respondent’s violation of team rules, only outright
termination of his services for an act which could have been punished
appropriately with a severe reprimand or suspension.
B. DEFINITIONS; ACTUAL & CONSTRUCTIVE DISMISSAL
60 VILLARUEL VS. YEO HAN GUAN
FACTS:
Villaruel filed with the NLRC NCR-Quezon City a Complaint for
payment of separation pay against Yuhans Enterprises.
Petitioner alleged that in June 1963, he was employed as a
machine operator by Ribonette Manufacturing Company, an enterprise
engaged in the business of manufacturing and selling PVC pipes and is
owned and managed by herein respondent Yeo Han Guan.Petitioner
further alleged that in October 1998, he got sick and was confined in a
hospital; In December 1998, he reported for work but was no longer
permitted to go back because of his illness; he asked that respondent
allow him to continue working but be assigned a lighter kind of work but
his request was denied; instead, he was offered a sum of P15,000.00 as
his separation pay; however, the said amount corresponds only to the
period between 1993 and 1999; petitioner prayed that he be granted
separation pay computed from his first day of employment in June 1963,
but respondent refused.
On the other hand, respondent averred that petitioner was
hired as machine operator from March 1993 until he stopped working
sometime in February 1999 on the ground that he was suffering from
illness; after his recovery, petitioner was directed to report for work, but
he never showed up.
petitioner filed the instant case for recovery of separation pay.
Respondent claimed that he never terminated the services of petitioner
and that during their mandatory conference, he even told the latter that
he could go back to work anytime but petitioner clearly manifested that
he was no longer interested in returning to work and instead asked for
separation pay.
ISSUE:
is Villaruel entitled to separation pay?
HELD:
YES, but only financial assistance as a measure of social
justice Article 284 of the Labor Code reads:
An employer may terminate the services of an employee
who has been found to be suffering from any disease and whose
continued employment is prohibited by law or is prejudicial to his
health as well as to the health of his co-employees: Provided, That
he is paid separation pay equivalent to at least 1 month salary or to
½ month salary for every year of service whichever is greater, a
fraction of at least six months being considered as 1 whole year.
A plain reading of the abovequoted provision clearly presupposes that it
is the employer who terminates the services of the employee found to be
suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health of
his co-employees. It does not contemplate a situation where it is the
employee who severs his or her employment ties.
The Court agrees with the CA in its observation of the following
circumstances as proof that respondent did not terminate Villaruel’s
employment: first, the only cause of action in petitioner’s original
complaint is that he was “offered a very low separation pay”; second,
there was no allegation of illegal dismissal, both in petitioner’s original
and amended complaints and position paper; and, third, there was no
prayer for reinstatement. This is tantamount to resignation.
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 he has no
other choice but to disassociate himself from his employment
However, there is no provision in the Labor Code which grants
separation pay to voluntarily resigning employees. In fact, the rule is that
an employee who voluntarily resigns from employment is not entitled to
separation pay, except when it is stipulated in the employment contract
or CBA, or it is sanctioned by established employer practice or policy.
Since petitioner was not terminated from his employment and,
instead, is deemed to have resigned therefrom, he is not entitled to
separation pay under the provisions of the Labor Code.
**
It may not be amiss to point out at this juncture that aside from
Article 284 of the Labor Code, the award of separation pay is also
authorized in the situations dealt with in Article 283 of the same Code
and under Section 4 (b), Rule I, Book VI of the IRR of the said Code
where there is illegal dismissal and reinstatement is no longer feasible.
By way of exception, this Court has allowed grants of separation pay to
stand as “a measure of social justice” where the employee is validly
dismissed for causes other than serious misconduct or those reflecting
on his moral character.
This Court, in a number of cases, has granted financial
assistance to separated employees as a measure of social and
compassionate justice and as an equitable concession. Taking into
consideration the factual circumstances obtaining in the present case,
the Court finds that petitioner is entitled to this kind of assistance. The
Court notes that there is no evidence on record to show that petitioner
has any derogatory record during his long years of service with
respondent and that his employment was severed not by reason of any
infraction on his part but because of his failing physical condition. Based
on the foregoing, the Court finds that the award of financial assistance is
deemed equitable under the circumstances.
61 The University of Immaculate Conception vs National Labor and
Relations Commission
FACTS:
Teodora Axalan is a regular faculty member in the University of
the Immaculate Conception holding the position of Associate Professor II.
Aside from being a regular faculty member, Axalan is the elected
President of the Employees' Union from 18 November to 22 November
2002. Axalan attended a seminar in Quezon City on website
development. Axalan then received a memorandum from Dean Maria
Rosa Celestial asking her to explain in writing why she should not be
dismissed for having been absent without official leave. Axalan claimed
that she held online classes while attending the seminar. She explained
that she was under the impression that faculty members would not be
marked absent even if they were not physically present in the classroom
as long as they conducted online classes. From 28 January to 3
February 2003, Axalan attended a second seminar in Baguio City on
advanced paralegal training on which dates Axalan was absent. An Ad
Hoc Grievance Committee was created, and upon its recommendation
Axalan was suspended for a year for her AWOLcharges. On 1 December
2003, Axalan filed a complaint against the University for illegal
suspension and constructive dismissal in the Labor Arbiter. The
University moved to dismiss on the ground that the Labor Arbiter had no
jurisdiction over the subject matter of the complaint. The university
maintained that jurisdiction lay in the voluntary arbitrator.
UNIVERSITY: The university maintains that Axalans suspension does
not constitute constructive dismissal and that the Labor Arbiters decision
treating it as such is an attempt to make it appear that the voluntary
arbitrator has no jurisdiction. The university points out that for
constructive dismissal to exist, there must be severance of employment
by the employee because of unbearable act of discrimination,
insensibility, or disdain on the part of the employer leaving the employee
with no choice but to forego continued employment. The university claims
that on the contrary, Axalan eagerly reported for work as soon as the
one-year suspension was over.
AXALAN: Finding of LA as constructively dismissed
ISSUE:
Whether Axalan was constructively dismissed?
RULING:
No. Constructive dismissal occurs when there is cessation of
work because continued employment is rendered impossible,
unreasonable, or unlikely as 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 leaving the latter
with no other option but to quit.29
In this case however, there was no cessation of employment relations
between the parties. It is unrefuted that Axalan promptly resumed
teaching at the university right after the expiration of the suspension
period. In other words, Axalan never quit. Hence, Axalan cannot claim
that she was left with no choice but to quit, a crucial element in a finding
of constructive dismissal. Thus, Axalan cannot be deemed to have been
constructively dismissed.
62 NATIONWIDE SECURITY AND ALLIED SERVICES, INC.,
Petitioner, v. RONALD P. VALDERAMA, Respondent.
(Security Guard)
FACTS:
Respondent was hired by petitioner as security guard. Almost 4
years after, he was relieved from service and was not given any
assignment thereafter. He filed a complaint for constructive dismissal and
nonpayment of 13th month pay. Petitioner presented a different version.
It alleged that respondent was not constructively or illegally dismissed,
but had voluntarily resigned.
The LA declared respondent to have been constructively
dismissed. On appeal, the NLRC modified the LA decision. It declared
that respondent was neither constructively terminated nor did he
voluntarily resign. As such, respondent remained an employee of
petitioner. The NLRC thus ordered respondent to immediately report to
petitioner and assume his duty. The CA set aside the resolutions of the
NLRC and reinstated that of the LA. The CA sustained respondent’s
claim of constructive dismissal and pointed out that respondent remained
on floating status for more than six (6) months, and petitioner offered no
credible explanation why it failed to provide a new assignment to
respondent
ISSUE:
Whether or not the CA erred in sustaining respondent’s claim
of constructive dismissal.
HELD:
The petition lacks merit.
LABOR LAW: Floating status
In cases involving security guards, a relief and transfer order in
itself does not sever employment relationship between a security guard
and his agency. An employee has the right to security of tenure, but this
does not give him a vested right to his position as would deprive the
company of its prerogative to change his assignment or transfer him
where his service, as security guard, will be most beneficial to the client.
(ARTICLE 286.) Jurisprudence is trite with pronouncements
that the temporary inactivity or “floating status” of security guards should
continue only for six months. Otherwise, the security agency concerned
could be liable for constructive dismissal. In this case, respondent
remained on “floating status” for more than six months. He was relieved
on January 30, 2006, and was not given a new assignment at the time he
filed the complaint on August 2, 2006.
Petition is DENIED.
62.1 William Barroga vs Data Center College et al
(ADDITIONAL ALLOWANCE)
FACTS:
In November 1991, William Barroga was hired as an instructor
by Data Center College in its Laoag City, Ilocos Norte campus. In June
1992, Barroga was re-assigned to Vigan, Ilocos Sur. Part of the deal for
his re-assignment was that Barroga will receive a monthly allowance of
P1,200.00 for board and lodging while performing his job in Vigan.
However, Data Center made it clear in writing that Barroga is only
entitled to the additional allowance while assigned in Vigan and such
allowance may be changed or forfeited if he will be re-assigned
somewhere. In 1994, he was recalled to Laoag. Later, Barroga was also
assigned as the temporary Head of Education; he was also given a
scholarship grant to support his post-graduate studies. In 2003, Barroga
was advised that he will be transferred to Bangued, Abra. Barroga
refused because his father was sick and second, he found out that there
will be no additional allowance this time and that he will be working there
as an instructor and not as a Head of Education. In the same year, he
filed a labor case against Data College for constructive dismissal.
Barroga alleged that the real purpose of his transfer is to demote him to
the rank of an instructor from being the Head for Education performing
administrative functions and that his re-assignment will entail an indirect
reduction of his salary or diminution of pay considering that no additional
allowance will be given to cover for board and lodging expenses. He
claims that such additional allowance was given in the past and therefore
cannot be discontinued and withdrawn without violating the prohibition
against non-diminution of benefits.
ISSUE:
Whether or not the absence of additional allowance in
Barroga’s supposed re-assignment constitutes a diminution of benefits.
HELD:
No. It is true that as a general rule, benefits and perks enjoyed
by employees cannot be reduced and discontinued or diminished. But
this rule is only applicable to grants or benefits which are founded on an
express policy or has ripened into a practice over a long period which is
consistent and deliberate. In the case at bar, Barroga’s additional
allowance while in Vigan is not permanent. In fact, Data College made
clear that such allowance is only applicable while Barroga is in Vigan and
such allowance is no longer applicable if he is going to be assigned
somewhere. Further, Data College showed that it is experiencing
financial difficulties hence the need to withdraw the scholarship
previously granted to Barroga. On the issue of his removal as Head for
Education, the same is valid. Barroga was merely assigned in a
temporary capacity, such designation is terminable at the pleasure of
Data College which made such appointment.
63 NIPPON HOUSING PHIL. INC., and/or TADASHI OTA, HOROSHI
TAKADA, YUSUHIRO KAWATA, MR. NOBOYUSHI and JOEL
REYES,Petitioners, v. MAIAH ANGELA LEYNES, Respondent.
(OFF-SETTING)
FACTS:
Nippon Housing Philippines, Inc. (NPHI) hired respondent
Maiah Angela Leyneson 26 March 2001 for the position of Property
Manager.
On 6 February 2002, Leynes had a misunderstanding with
Engr. Honesto Cantuba, the Building Engineer assigned at Bay Gardens
Condominium Project (the Project), regarding the extension of the latter
working hours. Aside from instructing the security guards to bar Engr.
Cantuba from entry into the Project and to tell him to report to the NHPI
main office in Makati, Leynes also sent a letter dated 8 February 2002 by
telefax to Joel Reyes, NHPI HR Head, apprising the latter of Cantuba
supposed insubordination and disrespectful conduct. With Engr. Cantuba
submission of a reply in turn accusing Leynes of pride, conceit and poor
managerial skills, Hiroshi Takada, NHPI VP, went on to issue the 12
February 2002 memorandum, attributing the incident to "simple personal
differences" and directing Leynes to allow Engr. Cantuba to report back
for work.
Disappointed with the foregoing management decision, Leynes
submitted to a letter asking for an emergency leave of absence for the
supposed purpose of coordinating with her lawyer regarding her
resignation letter. While NHPI offered the Property Manager position to
Engr. Carlos Jose on 13 February 2002 as a consequence Leynes
signification of her intention to resign, it also appears that Leynes sent
another letter to Reyes by telefax on the same day, expressing her
intention to return to work on 15 February 2002 and to call off her
planned resignation upon the advice of her lawyer. On 22 February 2002,
Leynes was further served with a letter and memorandum relieving her
from her position and directing her to report to NHPI main office while
she was on floating status.
Aggrieved, Leynes lost no time in filing against NHPI and its
above-named officers a complaint for illegal dismissal, unpaid salaries,
benefits, damages and attorney fees before the NLRC. NHPI and its
officers asserted that the management exercise of the prerogative to put
an employee on floating status for a period not exceeding six months
was justified in view of her threatened resignation from her position and
BGCC request for her replacement. During the pendency of the case,
however, Reyes eventually served the DOLE and Leynes with a notice
terminating her services effective 22 August 2002, on the ground of
redundancy or lack of a posting commensurate to her position at the
Project. Leynes was offered by NHPI the sum of P28,188.16
representing her unpaid wages, proportionate 13th month pay, tax refund
and service incentive leave pay (SILP).
The LA found that NHPI act of putting Leynes on floating status
was equivalent to termination from employment without just cause and
compliance with the twin requirements of notice and hearing.
On appeal, the NLRC reversed the LA decision. Leynes
elevated the case to the CA on a Rule 65 petition for certiorari and the
CA reversed the NLRC decision.
ISSUE:
Whether or not the CA erred in finding that Leynes was
constructively dismissed when she was placed on floating status prior to
her termination from employment on the ground of redundancy?
HELD:
Although the CA correctly found that the record is bereft of any
showing that Leynes was unacceptable to BGCC, the evidence the
parties adduced a quo clearly indicates that petitioners were not in bad
faith when they placed the former under floating status. Disgruntled by
NHPI countermanding of her decision to bar Engr. Cantuba from the
Project, Leynes twice signified her intention to resign from her position. In
her application letter for an immediate emergency leave, Leynes also
distinctly expressed her dissatisfaction over NHPI resolution of her
dispute with Engr. Cantuba and announced her plan of coordinating with
her lawyer regarding her resignation letter.
In view of the sensitive nature of Leynes position and the
critical stage of the Project business development, NHPI was constrained
to relay the situation to BGCC which, in turn, requested the immediate
adoption of remedial measures from Takada, including the appointment
of a new Property Manager for the Project. Upon BGCC
recommendation, NHPI consequently hired Engr. Jose on 13 February
2002 as Leynes replacement. Far from being the indication of bad faith
the CA construed the same to be, these factual antecedents suggest that
NHPI immediate hiring of Engr. Jose as the new Property Manager for
the Project was brought about by Leynes own rash announcement of her
intention to resign from her position. Although she subsequently changed
her mind and sent Reyes a letter by telefax on 13 February 2002
announcing the reconsideration of her planned resignation and her
intention to return to work on 15 February 2002, Leynes evidently had
only herself to blame for precipitately setting in motion the events which
led to NHPI hiring of her own replacement.
The record, moreover, shows that NHPI simply placed her on
floating status "until such time that another project could be secured" for
her. Traditionally invoked by security agencies when guards are
temporarily sidelined from duty while waiting to be transferred or
assigned to a new post or client, Article 286 of the Labor Code has been
applied to other industries when, as a consequence of the bona fide
suspension of the operation of a business or undertaking, an employer is
constrained to put employees on floating status for a period not
exceeding six months.
Considering that even labor laws discourage intrusion in the
employer's judgment concerning the conduct of their business, courts
often decline to interfere in their legitimate business decisions, absent
showing of illegality, bad faith or arbitrariness. Indeed, 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. The record shows that
Leynes filed the complaint for actual illegal dismissal from which the case
originated on 22 February 2002 or immediately upon being placed on
floating status as a consequence of NHPI hiring of a new Property
Manager for the Project. The rule is settled, however, that "off-
detailing" is not equivalent to dismissal, so long as such status
does not continue beyond a reasonable time and that it is only
when such a "floating status" lasts for more than six months that
the employee may be considered to have been constructively
dismissed. A complaint for illegal dismissal filed prior to the lapse of said
six-month and/or the actual dismissal of the employee is generally
considered as prematurely filed.
Viewed in the light of the foregoing factual antecedents, the
Court finds that the CA reversibly erred in holding petitioners liable for
constructively dismissing Leynes from her employment. There is said to
be constructive dismissal when an act of clear discrimination, insensitivity
or disdain on the part of the employer has become so unbearable as to
leave an employee with no choice but to forego continued employment.
Constructive dismissal exists where there is cessation of work because
continued employment is rendered impossible, unreasonable or unlikely,
as an offer involving a demotion in rank and a diminution in pay. Stated
otherwise, it is a dismissal in disguise or an act amounting to dismissal
but made to appear as if it were not.
With no other client aside from BGCC for the building
management side of its business, the Court finds that NHPI was acting
well within its prerogatives when it eventually terminated Leynes services
on the ground of redundancy. One of the recognized authorized causes
for the termination of employment, redundancy exists when the service
capability of the workforce is in excess of what is reasonably needed to
meet the demands of the business enterprise. A redundant position is
one rendered superfluous by any number of factors, such as over hiring
of workers, decreased volume of business, dropping of a particular
product line previously manufactured by the company or phasing out of
service activity priorly undertaken by the business. It has been held that
the exercise of business judgment to characterize an employee service
as no longer necessary or sustainable is not subject to discretionary
review where, as here, it is exercised there is no showing of violation of
the law or arbitrariness or malice on the part of the employer.
Having been validly terminated on the ground of redundancy,
Leynes is entitled to separation pay equivalent to one-month salary for
every year of service but not to the backwages adjudicated in her favor
by the Labor Arbiter.
GRANTED
64 Francis Bello vs Bonifacio Security Services
(TRANSFERRING AND REASSIGNING NOT CONSTRUCTIVE
DISMISSAL)
The Factual Background
Respondent Bonifacio Security Services, Inc. (BSSI) is a
domestic private corporation engaged in the business of providing
security services. In July 2001, the BSSI hired Bello as a roving traffic
marshal to manage traffic and to conduct security and safety-related
operations in the Bonifacio Global City (BGC). In August 2001, Bello was
posted at the Negros Navigation Company in Pier 2, North Harbor, to
supervise sectoral operations. In November 2001, he was assigned at
BGC as assistant detachment commander. After a week, he was
transferred to Pacific Plaza Towers as assistant detachment commander
and later as detachment commander. In June 2002, he was assigned at
Pier 2, North Harbor as assistant detachment commander, but later
reassigned to BGC. In August 2002, the BSSI hired a new operations
manager, resulting in the reorganization of posts. In October 2002, Bello
was assigned as roving traffic marshal at the BGC. On October 25, 2002,
he filed an indefinite leave of absence when his new assignment took
effect.
On November 5, 2002, Bello filed a complaint against the BSSI
and its General Manager, respondent Samuel Tomas, with the National
Labor Relations Commission (NLRC),[5] claiming that he had been
constructively dismissed when he was demoted from a detachment
commander to a mere traffic marshal. He alleged that he received a
series of promotions from 2001 to 2002, from traffic marshal to
supervisor, to assistant detachment commander, and to detachment
commander.[6]
The BSSI denied Bello’s claim of constructive dismissal,
arguing that no promotion took place; Bello’s designation as assistant
detachment commander or detachment commander was not an
employment position but a duty-related assignment; Bello abandoned his
job when he went on an indefinite leave of absence and did not report for
work.[7]
The Labor Arbiter’s Ruling
In his December 29, 2005 decision,[8] Labor Arbiter Cresencio
G. Ramos, Jr. found that Bello was illegally dismissed, noting that the
BSSI failed to adduce evidence that Bello abandoned his employment.
Thus, he ordered Bello’s reinstatement and awarded him backwages
amounting to P391,474.25.
After the NLRC dismissed the BSSI’s belated appeal and subsequent
motion for reconsideration,[9] the latter filed a petition for certiorari with
the CA. The CA granted the petition,[10] thus reinstating BSSI’s appeal
with the NLRC.
In its March 26, 2008 resolution, the NLRC affirmed the labor
arbiter’s decision, finding that Bello had been constructively dismissed
when he was demoted to the rank-and-file position of traffic marshal after
occupying the supervisory position of assistant detachment commander
and detachment commander.[11] The denial of BSSI’s subsequent
motion for reconsideration led it back to the CA on a petition for certiorari
under Rule 65 of the Rules of Court.[12]
The CA Ruling
The CA nullified the NLRC resolutions, finding the records
bereft of evidence substantiating the labor arbiter’s and the NLRC’s
conclusions that Bello had been constructively dismissed.[13] It noted
that Bello offered no evidence to prove that there was a series of
promotions that would justify his claim of subsequent demotion. The CA
denied the BSSI’s motion for reconsideration,[14] paving the way for the
present petition.
The Petition
Bello insists that he was constructively dismissed when he was
demoted to a mere traffic marshal after having been promoted to the
positions of supervisor, assistant detachment commander, and
detachment commander.
The Case for the BSSI
The BSSI prays for the petition’s outright dismissal due to a
defective verification, arguing that the special power of attorney (SPA) of
Bello’s attorney-in-fact, Geraldine Bello-Ona, was limited to representing
him in the NLRC case only and not to the present petition; and that Bello-
Ona has no personal knowledge of the allegations in the petition. On the
merits of the case, the BSSI contends that the CA correctly ruled that
there was no evidence to substantiate the NLRC’s finding of constructive
dismissal.
The Issues
The core issues boil down to: whether the petition should be
dismissed outright for defective verification; and whether the CA erred in
annulling the NLRC’s resolutions.
The Court’s Ruling
The petition lacks merit.
Verification of a pleading is a formal, not jurisdictional,
requirement intended to secure the assurance that the matters alleged in
a pleading are true and correct.[15] Thus, the court may simply order the
correction of unverified pleadings or act on them and waive strict
compliance with the rules.[16] It is deemed substantially complied with
when one who has ample knowledge to swear to the truth of the
allegations in the complaint or petition signs the verification, and when
matters alleged in the petition have been made in good faith or are true
and correct.[17]
 In this case, we find that the petition’s verification
substantially complied with the requirements of the rules. The SPA
authorized Bello-Ona to represent Bello in the case entitled “Francis
Bello v. Bonifacio Security Services, Inc. and/or Samuel Tomas, (CA)
Case No. 047829-06; NLRC-N[CR] Case No. 00-11-09529-2002”[18] –
the case from which the present petition originated. As the daughter of
Bello, Bello-Ona is deemed to have sufficient knowledge to swear to the
truth of the allegations in the petition, which are matters of record in the
tribunals and the appellate court below.
On the merits of the case, we find no reason to disturb the CA
conclusion that there was no constructive dismissal. Case law defines
constructive dismissal as a cessation of work because continued
employment has been rendered impossible, unreasonable, or unlikely, as
when there is a demotion in rank or diminution in pay, or both, or when a
clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee.[19]
We note that, other than his bare and self-serving
allegations, Bello has not offered any evidence that he was promoted in a
span of four months since his employment as traffic marshal in July 2001
to a detachment commander in November 2001. During his six-month
probationary period of employment,[20] it is highly improbable that Bello
would be promoted after just a month of employment, from a traffic
marshal in July 2001 to supervisor in August 2001, and three months
later to assistant detachment commander and to detachment commander
in November 2001. At most, the BSSI merely changed his assignment or
transferred him to the post where his service would be most beneficial to
its clients. The management's prerogative of transferring and
reassigning employees from one area of operation to another in
order to meet the requirements of the business is generally not
constitutive of constructive dismissal.[21] We see this to be the case
in the present dispute so that the consequent reassignment of Bello to a
traffic marshal post was well within the scope of the BSSI’s management
prerogative.
WHEREFORE, we hereby DENY the petition and
AFFIRM the assailed CA decision and resolution in CA-G.R. SP. No.
105402. Costs against the petitioner.
SO ORDERED.
65 United Laboratories, Inc., Petitioner, v. Jaime Domingo
Substituted by his spouse Carmencita Punzalan Domingo, et al.
(Retirement vs. Redundancy; cessation of work = CD)
FACTS:
Sometime in 2001, under a Physical Distribution Master Plan
(PDMP), Unilab consolidated its finished goods inventories and logistics
activities (warehousing, order processing and shipping) into one
distribution center located in Metro Manila. As a result, Unilab closed
down its sixteen (16) provincial depots. The job functions of the
employees working thereat were declared redundant and their positions
were abolished. Unilab gave the redundant employees a separation
package of two and a half (2 1/2) months' pay for every year of service.
In the succeeding year, on 7 January 2002, respondents wrote
Unilab requesting for their separation or retirement from service under a
separation package similar or equivalent to that of the redundant
employees in the provincial depots. Respondents referred to this
separation package as the Bagong Sibol Program
On 9 April 2002, respondents' counsel, on their behalf, wrote
Unilab reiterating respondents' previous request to be separated from
service under Unilab's purported Bagong Sibol Program. Particularly,
respondents were keen on retiring and receiving 2 1/2 months' pay for
every year of service, and all the other benefits which Unilab had
extended to the redundant employees in the provincial depots. The
message and sentiment were that "they should likewise be retired under
the same redundancy plan or retirement scheme [because] their
positions are similarly situated [to] the 'retired employees' of [Unilab's]
distribution centers under the principle that 'things that are alike should
be treated alike' since they also hold the position of 'distribution
personnel.'"
ISSUE:
Is constructive dismissal applicable to the respondents?
HELD:
The concept of constructive dismissal is inapplicable to
respondents. Constructive dismissal is a derivative of dismissal without
cause; an involuntary resignation, nay, a dismissal in disguise. It occurs
when there is cessation of worker caused continued employment is
rendered impossible, unreasonable, or unlikely as 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 leaving the latter with other option but to quit. In turn, dismissal
without cause is prohibited because of the Constitutional security of
tenure of workers.
Simply put, security of tenure from which springs the concept of
constructive dismissal is not an absolute right. It cannot be pleaded to
avoid the transfer or assignment of employees according to the
requirements of the employer's business. Such transfer or assignment
becomes objectionable only when it is not for "reasonable returns on
investments," and for "expansion and growth" which are constitutionally
recognized employer's rights, but is sought merely as a convenient cover
for oppression.
Records will reveal that [respondents] Domingo, Remigio,
Norico, Marcelo and Ozaraga as accountants or employees
performing accounting functions were affected by the Shared
Services Policy of the Company. Thus, after the provincial depots
were closed down, they were reassigned to [Unilab’s] Finance
Division to service the accounting requirement of the Unilab group
of companies. Thereafter, [respondents] Norico, Marcelo and
Ozaraga voluntarily resigned while respondentns Domingo and
Remigio remained with [Unilab].
Most recently, The University of the Immaculate Concepcion v.
National Labor Relations Commission26 iterated that a crucial element
in a finding of constructive dismissal is a cessation of employment
relations between the parties.
Certainly, the Court cannot accept the proposition that when an
employee opposes his employer’s decision to transfer him to another
work place, there being no bad faith or underhanded motives on the part
of either party, it is the employee’s wishes that should be made to prevail.
On the basis of the qualifications, training and performance of the
employee, the prerogative to determine the place or station where he or
she is best qualified to serve the interests of the company belongs to the
employer
Respondents are laboring under a cloud of confusion.
Retirement and redundancy
ART. 283. Closure of establishment and reduction of personnel. – The
employer may also terminate the employment of any employee due to
the installation of labor saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of the operation of the
establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on
the workers and the Department of Labor and Employment at least one
(1) month before the intended date thereof. In case of termination due to
the installation of labor saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at
least his one month pay or to at least one month pay for every year of
service, whichever is higher. In case of retrenchment to prevent losses
and in cases of closures or cessation of operations of establishment or
undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or to at least
one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1) whole year.
ART. 287. Retirement. – Any employee retirement may be retired upon
reaching the retirement age established in the collective bargaining
agreement or other applicable employment contract.
In case of retirement, the employees shall be entitled to receive such
retirement benefits as he may have earned under existing laws and any
collective bargaining, and other agreement: Provided, however, the
employee’s retirement benefits under any collective bargaining and other
agreement shall not be less than those provided herein.
In the absence of retirement plan or agreement providing for retirement
benefits of employee upon reaching the age of sixty (60) years or more,
but not beyond sixty-five (65) years which is hereby declared the
compulsory retirement age, who has served at least five (5) years in the
said establishment, may retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary for every year of service
, a fraction of at least six (6) months being considered as one whole year.
Unless the parties provide for broader inclusions, the term one-half (1/2)
month salary shall mean fifteen (15) days plus one-twelfth of the 13th
month pay and the cash equivalent of not more than five (5) days of
service incentive leaves.1âwphi1
66 JONATHAN V. MORALES, Petitioner, v. HARBOUR CENTRE
PORT TERMINAL, INC. Respondent.
FACTS:
Regularized on 17 November 2000, Morales was promoted to
Division Manager of the Accounting Department, for which he was
compensated a monthly salary of P33,700.00, plus allowances starting 1
July 2002. Subsequent to HCPTIs transfer to its new offices at Vitas,
Tondo, Manila on 2 January 2003, Morales received an inter-office
memorandum dated 27 March 2003, reassigning him to Operations Cost
Accounting, tasked with the duty of "monitoring and evaluating all
consumables requests, gears and equipment" related to the corporations
operations and of interacting with its sub-contractor, Bulk Fleet Marine
Corporation.
Morales wrote Singson, protesting that his reassignment was a
clear demotion since the position to which he was transferred was not
even included in HCPTIs plantilla. Singson, the Administration Manager,
answered by stating that the transfer was a management prerogative.
For the whole of the ensuing month Morales was absent from
work and/or tardy. Singson issued to Morales a 29 April 2003 inter-office
memorandum denominated as a First Warning. In view of the absences
Morales continued to incur, HCPTI issued a Second Warning.
In the meantime, Morales filed a complaint dated 25 April 2003
against HCPTI, Filart and Singson, for constructive dismissal, moral and
exemplary damages as well as attorneys fees.
LA dismissed the complaint for lack of merit. It ruled that
Morales reassignment was a valid exercise of HCPTIs management
prerogative which cannot be construed as constructive dismissal absent
showing that the same was done in bad faith and resulted in the
diminution of his salary and benefits. The NLRC however, reversed the
decision. Its subsequent denial of HCPTIs motion for reconsideration
prompted the latter to file a petition for certiorari before the CA. The CA
reversed the findings of the NLRC. Hence, this petition.
ISSUE:
Whether or not petitioner was constructively dismissed
HELD:
Yes. CA Decision reversed and set aside
Constructive dismissal exists where there is cessation of work
because "continued employment is rendered impossible, unreasonable
or unlikely, as an offer involving a demotion in rank or a diminution in pay
and other benefits.
In cases of a transfer of an employee, the rule is settled
that the employer is charged with the burden of proving that its
conduct and action are for valid and legitimate grounds such as
genuine business necessity and that the transfer is not
unreasonable, inconvenient or prejudicial to the employee. If the
employer cannot overcome this burden of proof, the employees
transfer shall be tantamount to unlawful constructive dismissal.
Record shows that HCPTI miserably failed to discharge the
foregoing on us. While there was a lack of showing that the transfer or
reassignment entailed a diminution of salary and benefits, one fact that
must not be lost sight of was that Morales was already occupying the
position of Division Manager at HCPTIs Accounting Department as a
consequence of his promotion to said position on 22 October 2002.
Concurrently appointed as member of HCPTIs Management
Committee (MANCOM) on 2 December 2002, Morales was subsequently
reassigned by HCPTI "from managerial accounting to Operations Cost
Accounting" on 27 March 2003, without any mention of the position to
which he was actually being transferred. That the reassignment was a
demotion is, however, evident from Morales new duties which, far from
being managerial in nature, were very simply and vaguely described as
inclusive of "monitoring and evaluating all consumables requests, gears
and equipments related to HCPTIs operations" as well as "close
interaction with its sub-contractor Bulk Fleet Marine Corporation."
Admittedly, 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. By management prerogative is meant the right of an employer to
regulate all aspects of employment, such as the freedom to prescribe
work assignments, working methods, processes to be followed,
regulation regarding transfer of employees, supervision of their work, lay-
off and discipline, and dismissal and recall of workers.
Although jurisprudence recognizes said management
prerogative, it has been ruled that the exercise thereof, while ordinarily
not interfered with, is not absolute and is subject to limitations imposed
by law, collective bargaining agreement, and general principles of fair
play and justice. Thus, an employer may 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.
Indeed, having the right should not be confused with the manner in which
that right is exercised.
GRANTED
C. GROUNDS FOR TERMINATION; SUBSTANTIVE & PROCEDURAL
66.1 ROBINSONS GALLERIA/ROBINSONS SUPERMARKET
CORPORATION and/or JESS MANUEL, petitioners, vs. IRENE R.
RANCHEZ, respondents
(SUBSTANTIVE & PROCEDURAL PROCESS IS MANDATORY;
PROBATIONAL EMPLOYEE)
FACTS:
Respondent Ranchez was a probationary employee for 5
months. She was hired as a cashier by Robinsons sometime within that
period. Two weeks after she was hired, she reported the loss of cash
which she had placed in the company locker. She offered to pay for the
lost amount (P20,299.00) but the Operations Manager of Robinsons had
her strip-searched then reported her to the police even though they found
nothing on her person. An information for Qualified Theft was filed with
the Quezon City Regional Trial Court. She was detained for 2 weeks for
failure to immediately post bail. Weeks later, respondent Ranchez filed a
complaint for illegal dismissal and damages. A year later, Robinsons sent
to respondent by mail a notice of termination and/or notice of expiration
of probationary employment.
The Labor Arbiter dismissed the complaint for illegal dismissal,
alleging that at the time of filing respondent Ranchez had not yet been
terminated. She was merely investigated. However, the NLRC reversed
this ruling, stating that Ranchez was illegally dismissed and that
Robinson's should reinstate her. It held that Ranchez was deprived of
due process when she was strip-searched and sent to jail for two weeks
because such amounted to constructive dismissal, making it impossible
for the respondent to continue under the employment. Even though she
was merely a probationary employee, the lapse of the probationary
contract did not amount to a valid dismissal because there was already
an unwarranted constructive dismissal beforehand.
The NLRC denied Robinson's motion for reconsideration. The
CA affirmed the decision of the NLRC.
ISSUE:
Whether respondent was illegally terminated from employment
by petitioners.
HELD:
The petition is unmeritorious.
LABOR LAW: Probationary employees; termination of
employment
There is probationary employment when the employee upon
his engagement is made to undergo a trial period during which the
employer determines his fitness to qualify for regular employment based
on reasonable standards made known to him at the time of engagement.
A probationary employee, like a regular employee, enjoys
security of tenure. However, in cases of probationary employment, aside
from just or authorized causes of termination, an additional ground is
provided under Article 281 of the Labor Code,i.e., the probationary
employee may also be terminated for failure to qualify as a regular
employee in accordance with reasonable standards made known by the
employer to the employee at the time of the engagement. Thus, the
services of an employee who has been engaged on probationary basis
may be terminated for any of the following:
(1) a just or
(2) an authorized cause; and
(3) when he fails to qualify as a regular employee in
accordance with reasonable standards prescribed by the employer.
Article 277(b) of the Labor Code mandates that the employer
shall furnish the worker, whose employment is sought to be terminated, a
(1) written notice containing a statement of the causes of
termination, and (2) shall afford the latter ample opportunity to be
heard and to defend himself with the assistance of a representative
if he so desires, in accordance with company rules and regulations
pursuant to the guidelines set by the Department of Labor and
Employment.
In the instant case, based on the facts on record, petitioners
failed to accord respondent substantive and procedural due process. The
haphazard manner in the investigation of the missing cash, which was
left to the determination of the police authorities and the Prosecutor's
Office, left respondent with no choice but to cry foul. Administrative
investigation was not conducted by petitioner Supermarket. On the same
day that the missing money was reported by respondent to her
immediate superior, the company already pre-judged her guilt without
proper investigation, and instantly reported her to the police as the
suspected thief, which resulted in her languishing in jail for two weeks.
The due process requirements under the Labor Code are
mandatory and may not be replaced with police investigation or court
proceedings. An illegally or constructively dismissed employee,
respondent is entitled to: (1) either reinstatement, if viable, or separation
pay, if reinstatement is no longer viable; and (2) backwages. These two
reliefs are separate and distinct from each other and are awarded
conjunctively.
In this case, since respondent was a probationary employee at
the time she was constructively dismissed by petitioners, she is entitled
to separation pay and backwages. Reinstatement of respondent is no
longer viable considering the circumstances.
DENIED
D. TERMINATION BY EMPLOYER; JUST CAUSE FOR TERMINATION
1. SERIOUS MISCONDUCT
67 PASTOR DIONISIO V. AUSTRIA vs. HON. NATIONAL LABOR
RELATIONS COMMISSION
(Church – employer; Minister – employee)
(BREACH OF TRUST; MISCONDUCT)
FACTS:
Petitioner had worked with the private respondent Seventh Day
Adventists (SDA) for 28 years before he was terminated. Prior to said
termination, petitioner was asked to admit accountability for the church
offerings collected by his wife in the amount of P15,078.10.
Petitioner refused since it was private respondents Pastor Buhat and
Eufronio Ibesate who authorized his wife to collect. Thereafter petitioner
requested Pastor Buhat to convene the Executive Committee to settle
the dispute between him and Pastor Rodrigo, but the latter denied the
same, and heated arguments between the two ensued until petitioner
banged the attaché case of Pastor Buhat on the table, scattered the
books and threw the phone. Later, an Executive Committee meeting was
held where the non-remittance of church collections and the events that
transpired were discussed. Subsequently, petitioner received a letter of
dismissal citing therein grounds for the termination of his services:
misappropriation of denominational funds, willful breach of trust,
serious misconduct, gross and habitual neglect of duties, and
commission of an offense against the person of employers duly
authorized representative.
Petitioner then filed a complaint for illegal dismissal and a decision was
rendered in his favor.
ISSUE:
Whether or not Austria’s termination was valid? NO!
HELD:
BREACH OF TRUST - no basis for the alleged loss of confidence and
breach of trust. Settled is the rule that under Article 282 (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.[38] It must rest on substantial grounds and not on the
employers arbitrariness, whims, caprices or suspicion; otherwise, the
employee would eternally remain at the mercy of the employer. The
stenographic notes on the testimony of Naomi Geniebla, the Negros
Mission Church Auditor and a witness for private respondents, show that
Pastor Austria was able to remit all his collections to the treasurer of the
Negros Mission.
SERIOUS MISCONDUCT AND COMMISSION OF AN OFFENSE
AGAINST THE PERSON - 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 in judgment. For
misconduct to be considered serious it must be of such grave and
aggravated character and not merely trivial or unimportant. Based on this
standard, we believe that the act of petitioner in banging the attached
case on the table, throwing the telephone and scattering the books in the
office of Pastor Buhat, although improper, cannot be considered as grave
enough to be considered as serious misconduct. After all, though
petitioner committed damage to property, records show that he did not
physically assault Pastor Buhat or any other pastor present during the
incident. Hence, there is no basis for the allegation that petitioners act
constituted serious misconduct or that the same was an offense against
the person of the employers duly authorized representative. As such, the
cited actuation of petitioner does not justify the ultimate penalty of
dismissal from employment. While the Constitution does not condone
wrongdoing by the employee, it nevertheless urges a moderation of the
sanctions that may be applied to him in light of the many disadvantages
that weigh heavily on hi m like an albatross on his neck. Where a penalty
less punitive would suffice, whatever missteps may have been committed
by the worker ought not be visited with a consequence so severe such as
dismissal from employment. For the foregoing reasons, we believe that
the minor infraction committed by petitioner does not merit the ultimate
penalty of dismissal.
GROSS AND HABITUAL NEGLECT OF DUTIES - Suffice it to say that
all private respondents had were allegations but not proof. Aside from
merely citing the said ground, private respondents failed to prove
culpability on the part of petitioner
68 PHILIPPINE LONG DISTANCE TELEPHONE COMPANY vs. NLRC
and MARILYN ABUCAY
(NO SEPARATION PAY FOR SERIOUS MISCONDUCT)
FACTS:
Marilyn Abucay, a traffic operator of the Philippine Long
Distance Telephone Company, was accused by two complainants of
having demanded and received from them the total amount of P3,800.00
in consideration of her promise to facilitate approval of their applications
for telephone installation. Investigated and heard, she was found guilty
as charged and accordingly separated from the service. She went to the
Ministry of Labor and Employment claiming she had been illegally
removed. The case was dismissed but she was granted with a separation
pay.
ISSUE:
WON Abuca is entitled to separation pay.
HELD:
NO. The rule embodied in the Labor Code is that a person
dismissed for cause as defined therein is not entitled to separation pay.
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.
Where the reason for the valid dismissal is, for example, habitual
intoxication or an offense involving moral turpitude, like theft or illicit
sexual relations with a fellow worker, the employer may not be required
to give the dismissed employee separation pay, or financial assistance,
or whatever other name it is called, on the ground of social justice. In the
case at bar, the grant of separation pay in the case at bar is unjustified.
Abuca has been dismissed for dishonesty and as she herself has
impliedly admitted. The fact that she has worked with the PLDT for more
than a decade, if it is to be considered at all, should be taken against her
as it reflects a regrettable lack of loyalty that she should have
strengthened instead of betraying during all of her 10 years of service
with the company. If regarded as a justification for moderating the penalty
of dismissal, it will actually become a prize for disloyalty, perverting the
meaning of social justice and undermining the efforts of labor to cleanse
its ranks of all undesirables.
69 NLRC, ST. JUDE CATHOLIC SCHOOL, et.al., vs MA.
BERNADETTE S. SALGARINO
(ALTERATION OF GRADE WITHOUT WRONGFUL INTENT NOT A
SERIOUS MISCONDUCT)
FACTS:
Maria Bernadette A. Salgarino was employed by St. Jude
Catholic School as Mathematics teacher. She was directed to submit
herself to a panel of investigators and explain why she had allegedly
tampered school records, violated school policies and committed
misconduct. Respondent was investigated for her act of increasing the
grades of her students while she was on maternity leave. The
investigating panel reached the conclusion that respondent altered her
student grades while she was on leave, which is, according to them, a
case of education malpractice or grave misconduct and grossly
prejudicial to the good name of the petitioner school. On these bases, the
members of the investigating committee ruled to terminate respondent
services. Respondent filed a Complaint for illegal dismissal.
ISSUE:
WON respondents act of giving failing students higher grades
than what they actually earned is tantamount to serious misconduct
which justified her dismissal.
HELD:
NO. Respondent had committed a misconduct. However, such
misconduct is not serious enough to warrant her dismissal from
employment under paragraph (a) of Article 282 of the Labor Code.
Misconduct is 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 within
the meaning of the act must be of such a grave and aggravated
character and not merely trivial or unimportant. Such misconduct,
however serious, must nevertheless be in connection with the work of the
employee to constitute just cause from his separation. In order to
constitute serious misconduct which will warrant the dismissal of an
employee under paragraph (a) of Article 282 of the Labor Code, it is not
sufficient that the act or conduct complained of has violated some
established rules or policies. It is equally important and required that the
act or conduct must have been performed with wrongful intent. There
is no evidence to show that there was ulterior motive on the part of the
respondent when she decided to pass her students. Also, it was not
shown that respondent received immoral consideration when she did the
same. Respondent has maintained her stand that her decision to pass
the concerned students was done out of humanitarian consideration. It
is settled that a misconduct, which is not serious or grave, cannot be a
valid basis for dismissing an employee.
70 EDEN LLAMAS vs OCEAN GATEWAY MARITIME AND
MANAGEMENT, INC.
(GROSS MISCONDUCT; REQUISITES)
FACTS:
Ocean Gateway Maritime and Management, Inc. hired Eden
Llamas as an accounting manager. Mary Anne T. Macaraig, respondents
Chief Executive Officer, called Llamas’s attention to her failure, despite
repeated demands, to accomplish the long overdue monthly and annual
company financial reports and to remit the companys contributions to the
Social Security System (SSS) and PhilHealth for November and
December 2001. Subsequently or on February 20, 2002, Mary Anne
again instructed petitioner to remit on that day or until the following day
the companys contributions to the SSS and PhilHealth for January 2002.
By petitioners claim, she failed to comply with the instruction as money
for the purpose was not, as of February 20, 2002, credited to the
company’s account at the bank. The following day, petitioner did not
report for work as she was allegedly suffering from hypertension, hence,
she was again unable to remit the contributions. On February 26, 2002
Mary Anne sent a memorandum to petitioner charging her with gross and
habitual neglect of duty and/or misconduct or willful disobedience and
insubordination, detailing therein the bases of the charges, and requiring
her to submit a written explanation why she should not be penalized or
dismissed from employment. Complying with the show cause order,
petitioner claimed that the delay was due to the fact that she was
overloaded with work and undermanned. On account of the delay in the
remittance of those contributions, respondent was penalized in the
amount of P18,580.41 which it charged to petitioner via salary
deductions. Later, the company sent Llamas notice of termination from
employment anchored on gross and habitual neglect of duty and/or
serious misconduct or willful disobedience/insubordination
HELD:
On petitioner’s declaration that I believe that I did something
good for our office when our declaration of gross income submitted to
City Hall for the renewal of our municipal license was lower than our
actual gross income for which the office had paid a lower amount, the
Court finds the same as betraying a streak of dishonesty in her. It
partakes of serious misconduct.
xxx
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. Such misconduct,
however serious, must nevertheless be in connection with the
employees work to constitute just cause for his separation. Thus,
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 employees duties; and (c) must show that the employee has
become unfit to continue working for the employer. Indeed, an
employer may not be compelled to continue to employ such person
whose continuance in the service would be patently inimical to his
employers interest. For her act of understating the companys profits or
financial position was willful and not a mere error of judgment, committed
as it was in order to save costs, which to her warped mind, was
supposed to benefit respondent. It was not merely a violation of company
policy, but of the law itself, and put respondent at risk of being made
legally liable. Verily, it warrants her dismissal from employment as
respondents Accounting Manager, for as correctly ruled by the appellate
court, an employer cannot be compelled to retain in its employ someone
whose services is inimical to its interests.
71 Aliviado vs. Procter and Gamble
(ERROR IN JUDGEMENT NOT A SERIOUS MISCONDUCT)
Facts:
80 Petitioners worked as merchandisers of P&G. They all
individually signed employment contracts with either Promm-Gem or
SAPS. They were assigned at different outlets, supermarkets and stores
where they handled all the products of P&G. They received their wages
from Promm-Gem or SAPS.
SAPS and Promm-Gem imposed disciplinary measures on
erring merchandisers for reasons such as habitual absenteeism,
dishonesty or changing day-off without prior notice.
To enhance consumer awareness and acceptance of the
products, P&G entered into contracts with Promm-Gem and SAPS for the
promotion and merchandising of its products.
In December 1991, petitioners filed a complaint against P&G
for regularization, service incentive leave pay and other benefits with
damages.
Due to the express admission of the petitioners, that they
consider themselves as an employee of P&G and assailing the integrity
of the Company as legitimate and independent promotion firm, Promm-
Gem terminated their services for disloyalty assailing: serious misconduct
and breach of trust.
Issue:
(1) WON P&G is the employer of petitioners?
(2) WON petitioners are illegally dismissed?
Held:
(1) In order to resolve the issue of whether P&G is the
employer of petitioners, it is necessary to first determine whether Promm-
Gem and SAPS are labor-only contractors or legitimate job contractors.
Clearly, the law and its implementing rules allow contracting
arrangements for the performance of specific jobs, works or services.
However, in order for such outsourcing to be valid, it must be made to
an independent contractor because the current labor rules expressly
prohibit labor-only contracting.
To emphasize, there is labor-only contracting when the
contractor or sub-contractor merely recruits, supplies or places workers
to perform a job, work or service for a principal and any of the following
elements are present:
1. i) The contractor or subcontractor does not have substantial capital
or investment which relates to the job, work or service to be
performed and the employees recruited, supplied or placed by such
contractor or subcontractor are performing activities which are
directly related to the main business of the principal; or
1. ii) The contractor does not exercise the right to control over the
performance of the work of the contractual
Under the circumstances, Promm-Gem cannot be considered as a
labor-only contractor. We find that it is a legitimate independent
contractor.
Considering that SAPS has no substantial capital or investment
and the workers it recruited are performing activities which are directly
related to the principal business of P&G, we find that the former is
engaged in “labor-only contracting”.
Where labor-only contracting exists, the Labor Code itself
establishes an employer-employee relationship between the employer
and the employees of the labor-only contractor. The statute establishes
this relationship for a comprehensive purpose: to prevent a
circumvention of labor laws. The contractor is considered merely an
agent of the principal employer and the latter is responsible to the
employees of the labor-only contractor as if such employees had been
directly employed by the principal employer.
(2) Yes. 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 implying 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.[46] To be a
just cause for dismissal, such misconduct (a) must be serious; (b) must relate to
the performance of the employees duties; and (c) must show that the employee
has become unfit to continue working for the employer.[47] In the instant case,
petitioners-employees of Promm-Gem may have committed an error of judgment
in claiming to be employees of P&G, but it cannot be said that they were
motivated by any wrongful intent in doing so. As such, we find them guilty of only
simple misconduct for assailing the integrity of Promm-Gem as a legitimate and
independent promotion firm. A misconduct which is not serious or grave, as that
existing in the instant case, cannot be a valid basis for dismissing an employee.
NOTE:
1. Respondent filed MR, which was denied.
2. In its resolution, the Court upheld its decision declaring SAPS has
no substantial capital, therefore, labor-only contractor.
72 NORMAN YABUT, Petitioner, v. MANILA ELECTRIC COMPANY
AND MANUEL M. LOPEZ, Respondents.
FACTS:
 This case stems from a complaint for illegal dismissal and
monetary claims filed by herein petitioner Norman Yabut (Yabut) against
respondents Manila Electric Company (Meralco) and Meralco officer
Manuel M. Lopez (Lopez).
The petitioner had worked with Meralco from February 1989
until his dismissal from employment on February 5, 2004. Meralco's
Inspection Office issued a memorandum informing it of an illegal service
connection at the petitioner's residence. Given this report, Meralco's
Head of Investigation-Litigation Office issued to the petitioner a notice of
investigation.
Meralcos Litigation Investigation Office summarized the results
of Meralco's findings in a memorandum which indicated that Yabuts
electric service was disconnected for account delinquency.
Notwithstanding the disconnection and the fact that Meralcos service had
not been reconnected, Yabut's meter registered electric consumption. In
view of these findings, respondent Meralco, issued a notice of dismissal
addressed to the petitioner. The notice cites violation of Section 7,
paragraph 3 of Meralco's Company Code on Employee Discipline and
Article 282 (a), (c), (d) and (e) of the Labor Code of the Philippines as
bases for the dismissal.
Aggrieved by the decision of the management, Yabut filed with
the National Labor Relations Commission (NLRC) a complaint for illegal
dismissal and money claims against Meralco and Lopez.
Labor Arbiter Antonio R. Macam rendered his Decision,
declaring the petitioner illegally dismissed from the service and hence,
entitled to reinstatement plus backwages and attorney's fees.
NLRC rendered its Resolution dismissing the herein
respondents' appeal for lack of merit.
CA rendered the now assailed Decision reversing the rulings of
the NLRC. In finding the petitioner's dismissal lawful, the appellate court
attributed unto Yabut authorship of the meter tampering and illegal use of
electricity acts which it regarded as serious misconduct.
ISSUE:
Whether or not petitioners dismissal is illegal?
HELD:
Court of Appeals decision is sustained.
LABOR LAW
Article 279 of the Labor Code of the Philippines provides that
(i)n 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. x x x The just causes are enumerated in Article 282, which
provides:
Article 282.Termination by employer. - An employer may
terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or representative in
connection with his work;
(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 duly authorized representative; and
(e) Other causes analogous to the foregoing.
Significantly, tampering with electric meters or metering
installations of the Company or the installation of any device, with the
purpose of defrauding the Company is classified as an act of dishonesty
from Meralco employees, expressly prohibited under company rules. It is
reasonable that its commission is classified as a severe act of
dishonesty, punishable by dismissal even on its first commission, given
the nature and gravity of the offense and the fact that it is a grave wrong
directed against their employer.
Article 282 (a) provides that an employer may terminate an
employment because of an employee's serious misconduct, a cause that
was present in this case in view of the petitioner's violation of his
employer's code of conduct. Misconduct is defined as 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. For serious misconduct to justify dismissal, the
following requisites must be present:
(a) it must be serious;
(b) it must relate to the performance of the employee's
duties; and
(c) it must show that the employee has become unfit to
continue working for the employer.
The dismissal is also justified as the act imputed upon the
petitioner qualifies as fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized representative under
Article 282 (c) of the Labor Code. While the petitioner contests this
ground by denying that his position is one of trust and confidence, it is
undisputed that at the time of his dismissal, he was holding a supervisory
position after he rose from the ranks since commencement of his
employment with Meralco. As a supervisor with duty and power that
included testing of service meters and investigation of violations of
contract of customers, his position can be treated as one of trust and
confidence, requiring a high degree of honesty as compared with
ordinary rank-and-file employees.
We emphasize that dismissal of a dishonest employee is to the
best interest not only of the management but also of labor. As a measure
of self-protection against acts inimical to its interest, a company has the
right to dismiss its erring employees. An employer cannot be compelled
to continue employing an employee guilty of acts inimical to the
employer's interest, justifying loss of confidence in him.
DENIED
2. WILLFUL DISOBEDIENCE
73 GOLD CITY INTEGRATED PORT SERVICES, INC. (INPORT) vs.
NLRC (WILLFUL DISOBEDIENCE; REQUISITES;
PROPORTIONALITY & CIRCUMSTANCES DETERMINE PENALTY)
FACTS:
Jose Bacalso was employed as an admeasurer by the Gold
City Integrated Port Services, Inc. He was suspected by management of
under measuring cargo. One time, the cargo control officer ordered two
(2) other admeasurers to re-measure three (3) pallets of bananas which
had already been measured by private respondent. The re-measurement
revealed that respondent had under-measured the bananas. Bacalso felt
insulted by the re-measurement and so the next day he confronted Nigel
Mabalacad, one who had re-checked his work. Bacalso quarreled with
Mabalacad in the presence of their immediate superior Gunacao.
Guanaco directed Bacalso to stop provoking Mabalacad and told both
that being in his office, they should behave properly but a fistfight erupted
then and there between him and Mabalacad. Bacalso was then charged
with assaulting a co-employee and falsifying reports and records of the
company relative to the performance of his duties, and was preventively
suspended pending investigation of his case by the union-management
grievance committee. Bacalso later received a notice of termination of
services upon the grounds of assaulting a co-employee and of
insubordination for failure to heed Guangco's order to stop
provoking Mabalacad constituted insubordination or disrespect
towards a superior officer punishable by dismissal under the
Schedule of disciplinary sanctions and norms of conduct, incorporated in
the existing Collective Bargaining Agreement ("CBA") with the union.
ISSUE:
Whether private respondent was dismissed for a just cause.

HELD:
NO. Wilful disobedience of the employer's lawful orders, as a
just cause for the dismissal of an employee, envisages the concurrence
of at least two (2) requisites: (1) the employee's assailed conduct must
have been wilful or intentional, the wilfulness 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. Both requisites
are present in the instant case. By private respondent Bacalso's own
admission, he felt insulted by the re-measurement of the cargo he
had already measured. He was apparently much offended by the
implication he perceived that management was uncertain either about his
honesty or his competence or possibly both. He determined to lose his
temper, became very angry and picked a fight with one of the co-workers
who had been instructed by their common superior to carry out the re-
measurement of private respondent's pallets of bananas. In the process,
Bacalso completely disregarded the courtesy and respect due from a
subordinate to his superior. Indeed, he may have been, consciously or
otherwise, precisely sending a signal to his superior officer in whose
presence he provoked and then engaged in physical violence with his co-
worker. Prior to the fistfight, Guangco had warned Bacalso to desist from
further provoking his co-worker with insulting language. This warning
constituted an order from private respondent's immediate superior not
to breach the peace and order of the Surveyors'(Admeasurers') Division;
Guangco was obviously attempting to maintain basic employee discipline
in the workplace. It does not follow, however, that private respondent
Bacalso's services were lawfully terminated either under Article 282 (a) of
the Labor Code or under the CBA Schedule of penalties. We believe
that not every case of insubordination or wilful disobedience by an
employee of a lawful work connected order of the employer or its
representative is reasonably penalized with dismissal. For one thing,
Article 282 (a) refers to "serious misconduct or wilful disobedience".
There must be reasonable proportionality between, on the one hand, the
wilful disobedience by the employee and, on the other hand, the penalty
imposed therefor. Examination of the circumstances surrounding private
respondent's assault upon his co-employee shows that no serious or
substantial danger had been posed by that fistfight to the well -being of
his other co-employees or of the general public doing business with
petitioner employer; and neither did such behavior threaten substantial
prejudice for the business of his employer. The fistfight occurred inside
the offices of the Surveyors' Division, more particularly, Mr. Guangco's
office, away from the view of petitioner's customers or of the general
public. Considering that private respondent Bacalso's unruly temper did
not become an effective threat to his co-workers or the safety of the
customers dealing with his employer, or to the goodwill of his employer,
and considering further that he had been quite candid in admitting that he
had been at fault as soon as the investigation began in the company
level, we agree with the NLRC that termination of his services was a
disproportionately heavy penalty. We believe that suspension without p
ay for three (3) months would be an adequate penalty for the assault on
a co-worker and act of insubordination that private respondent Bacalso
actually committed.
74 PERMEX INC. vs NLRC (JUST & VALID CAUSE; PRIOR NOTICE)
FACTS:
Permex initially hired Emmanuel Filoteo on October 1, 1990, as
a mechanic. Eventually, Filoteo was promoted to water treatment
operator, a position he held until his termination on August 29, 1994. As
water treatment operator, Filoteo did not have a fixed working schedule.
His hours of work were dependent upon the company's shifting
production schedules. One evening he inquire if "butchering" of fish
would be done so they could start operating the boiler. They were
advised to wait from 9:30 p.m. to 10:00 p.m. for confirmation. At or about
10:00 p.m., Filoteo was informed that there would be no "butchering" of
tuna that night. Filoteo then sought permission to go home, which was
granted. Filoteo then hurriedly got his things and dashed off to the exit
gate to catch the service jeep provided by Permex. The next day, Filoteo
reported for work as usual. He then remembered that he had to make a
re-entry in his daily time record for the previous day. He proceeded to the
Office of the Personnel Manager to retime his DTR entry. Later, he
received a memorandum from the Assistant Personnel Officer asking him
to explain, in writing, the entry he made in his DTR. Filoteo complied and
submitted his written explanation that same evening. Filoteo was
suspended indefinitely. His explanation was found unsatisfactory.
Thereafter, he was dismissed from employment for allegedly violating
Article 2 of the company rules and regulations. The offense charged was
entering in his DTR that he had worked from 8:45 p.m. of July 31, 1994
to 7:00 a.m. of August 1,1994, when in fact he had worked only up to
10:00 p.m.
ISSUE:
Whether or not private respondent was illegally terminated from
his employment.
HELD:
YES. To constitute a valid dismissal from employment, two
requisites must concur: (a) the dismissal must be for any of the causes
provided for in Article 282 of the Labor Code; and (b) the employee must
be afforded an opportunity to be heard and defend himself. This means
that an employer can terminate the services of an employee for just and
valid causes, which must be supported by clear and convincing evidence.
It also means that, procedurally, the employee must be given notice, with
adequate opportunity to be heard, before he is notified of his actual
dismissal for cause. In the present case, the NLRC found that the two-
fold requirements for a valid dismissal were not satisfied by the
petitioners. First, petitioner's charge of serious misconduct of falsification
or deliberate misrepresentation was not supported by the evidence on
the record. Such dismissal was too harsh a penalty for an unintentional
infraction, not to mention that it was his first offense committed without
malice, and committed also by others who were not equally penalized. It
is clear that the alleged false entry in private respondent's DTR was
actually the result of having logged his scheduled time-out in advance on
July 31, 1994. But it appears that when he timed in, he had no idea that
his work schedule (night shift) would be cancelled. When it was
confirmed at 10:00 p.m. that there was no "butchering" of tuna to be
done, those who reported for work were allowed to go home, including
private respondent. In fact, Filoteo even obtained permission to leave
from the Assistant Production Manager. Considering the factory practice
which management tolerated, we are persuaded that Filoteo, in his rush
to catch the service vehicle, merely forgot to correct his initial time-out
entry. Nothing is shown to prove he deliberately falsified his daily time
record to deceive the company. The NLRC found that even
management's own evidence reflected that a certain Felix Pelayo, a co-
worker of private respondent, was also allowed to go home that night and
like private respondent logged in advance 7:00 a.m. as his time-out. This
supports Filoteo's claim that it was common practice among night-shift
workers to log in their usual time-out in advance in the daily time record.
75 ROLANDO APARENTE, SR. vs. NLRC and COCA-COLA
BOTTLERS PHILIPPINES, INC.
(WILLFUL DISOBEDIENCE OF COMPANY’S RULES AND
REGULATIONS – DRIVING WITHOUT LICENSE)
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.
One day, he met an accident wherein he sideswiped a kid diving private
respondent’s advertising truck. He reported the incident to private
respondent then submitted himself to the police authorities at Polomolok,
South Cotabato for investigation where it was discovered that petitioner
had no driver’s license at the time of the accident. In view thereof, an
insurer of private respondent’s vehicles, did not reimburse the latter for
the expenses it incurred in connection with the kid hospitalization. Private
respondent conducted an investigation of the incident where petitioner
was given the opportunity to explain his side and to defend himself but
eventually private respondent dismissed petitioner from employment for
having violated the company rules and regulations particularly Sec. 12 of
Rule 005-85 for blatant disregard of established control procedures
resulting in company damages.
ISSUE:
Whether or not the infraction committed by petitioner warrants
the penalty of dismissal despite the fact that it was his first offense during
his eighteen (18) long years of satisfactory and unblemished service.
HELD:
YES. Article 282 (a) of the Labor Code of the Philippines
sanctions termination by the employer of the employees services for
serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work. In
the instant case, petitioner Aparente was terminated from service after
having been found guilty of driving without a valid driver’s license, which
is a clear violation of the company’s rules and regulations. In order that
an employer may dismiss an employee on the ground of wilful
disobedience, there must be concurrence of at least two requisites: (1)
The employees 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. We have found these requisites to be present in
the case at bar. The extant evidence on record clearly reveals the willful
act of petitioner Aparente in driving without a valid driver’s license, a fact
that he even tried to conceal during the investigation conducted by
private respondent. Such misconduct should not be rewarded with re-
employment and backwages, for to do so would wreak havoc on the
disciplinary rules that employees are required to observe. 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.
76 FEDERICO NUEZ vs. NLRC, PHILIPPINE OVERSEAS
TELECOMMUNICATIONS CORPORATION
(PHILCOMSAT), ET.AL.
(WILLFUL OBEDIENCE FOR NOT DRIVING DUE TO PERSONAL
APPOINTMENT)
FACTS:
Nuez was a driver of PHILCOMSAT assigned to its station in
Baras, Antipolo, Rizal, from seven-thirty in the morning to three-thirty in
the afternoon. At one-thirty that afternoon, Engr. Jeremias Sevilla, the
officer in charge and the highest ranking official of the station, asked
Nuez to drive the employees to the Makati head office to collect their
profit shares. Nuez declined saying that he had an important personal
appointment right after office hours. At two-thirty that same afternoon, he
also declined a similar order given on the phone by his vehicle
supervisor, Pedro Sibal, reasoning that "Ayaw kong magmaneho dahil
may bibilhin ako sa Lagundi. Kung gusto mo yong 'loyalist' ang
magmaneho." Nuez was then required to explain why he should not be
administratively dealt with for disobeying an order of their most senior
officer. In his written reply Nuez mentioned a personal appointment in
justification for his refusal to render "overtime" service and that "ferrying
employees . . . was not a kind of emergency that . . . warrants (the)
charge of disobedience." Later, the company terminated Nuez for
insubordination.
ISSUE:
WON Nuez was illegally terminated.
HELD:
NO. It is the discretion of the employer to regulate all aspects
of employment as well as the corresponding obligation of the workers to
obey company rules and regulations. Deliberate disregard or
disobedience of the rules cannot be countenanced and any justification
for the violation is deemed inconsequential. In fact, this is one ground the
Labor Code provides for termination of employment since an employer
cannot be compelled to continue retaining a worker found guilty of
maliciously committing acts detrimental to its interests. A contrary rule
would render a mockery of the regulations the employees are required to
observe. The existence of an emergency situation is irrelevant to the
charge of willful disobedience; an opposite principle would allow a worker
to shield himself under his self-designed concept of "nonemergency
situation" to deliberately defy the directive of the employer. Neither is the
resulting damage vital. The heart of the charge is the crooked and
anarchic attitude of the employee towards his employer. Damage
aggravates the charge but its absence does not mitigate nor negate the
employee's liability. The fact that a replacement driver was able to
perform the task could neither alter the gravity of the charge, this
responsibility being personal to the perpetrator. The length of service
rendered by the employee is also inconsequential for it does not lessen a
bit the rebellious temper of the employee object of the charge. We thus
find no grave abuse of discretion in the finding of the NLRC that there is
a just ground for the termination of petitioner from the services.
77 LORES REALTY ENTERPRISES, INC., LORENZO Y. SUMULONG
III, Petitioners, v. VIRGINIA E. PACIA, Respondent.
(NON PREPARATION OF CHECKS DESPITE ORDERED FOR THE
PROTECTION OF THE COMPANY AGAINST BOUNCING CHECK
LAW IS NOT WILLFUL DISOBEDIENCE)
FACTS:
Respondent Virginia E. Pacia (Pacia) was hired by Lores
Realty Enterprises, Inc.(LREI). LREI's acting general manager, petitioner
Sumulong, on two occasions, directed Pacia to prepare checks as partial
payment for LREI's outstanding obligation to the Bank of the Philippine
Islands. Pacia was slow in obeying the order. When asked to explain for
her refusal to immediately follow the directive, Pacia reasoned out that
the funds in LREI's account were not sufficient to cover the amounts to
be indicated in the checks and that she only wanted to protect LREI from
liability under the Bouncing Checks Law. Pacia received a notice of
termination stating that she was being dismissed because of her willful
disobedience and their loss of trust and confidence in her .Pacia then
filed a Complaint for illegal dismissal. The Labor Arbiter (LA) rendered a
decision finding that the dismissal of Pacia was for a just and valid cause.
On appeal, the NLRC reversed the LA's Decision. The CA affirmed the
decision of the NLRC. It held that LREI and Sumulong failed to establish
with substantial evidence that the dismissal of Pacia was for a just cause.
It found that Pacias initial reluctance to obey the orders of her superiors
was for a good reason.
ISSUE:
Whether or not Pacia was illegally dismissed? Yes!
HELD:
Court of Appeals decision is affirmed.
 LABOR LAW
The offense of willful disobedience requires the concurrence of
two (2) 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.
There is nothing unlawful in the directive of Sumulong to
prepare checks in payment of LREI's obligations. The availability or
unavailability of sufficient funds to cover the check is immaterial in the
physical preparation of the checks. Pacias initial reluctance to prepare
the checks, however, which was seemingly an act of disrespect and
defiance, was for honest and well intentioned reasons. Protecting LREI
and Sumulong from liability under the Bouncing Checks Law was
foremost in her mind. It was not wrongful or willful. Neither can it be
considered an obstinate defiance of company authority. The Court takes
into consideration that Pacia, despite her initial reluctance, eventually did
prepare the checks on the same day she was tasked to do it.
78 Realda vs New Age Graphics Inc
(JUST CAUSE WITH FAILURE TO OBSERVE DUE PROCESS =
NOMINAL DAMAGES)
Facts:
Petitioner Billy Realda was the former machine operator of
respondent New Age Graphics Inc.
The company dismissed him on the ground of repeated
violations of company’s rules and regulations, namely: insubordination,
deliberate slowdown of work, habitual tardiness, absence without official
leave and inefficiency.
Furthermore, private respondent’s refusal to render overtime
work when required upon him, contributed to losses incurred by the
petitioner.
Nonetheless, while the CA recognized the existence of just
causes for petitioner’s dismissal, it found that the petitioner is entitled to
nominal damages due to Graphics, Inc.’s failure to observe the
procedural requirements of due process.
Issue:
Whether or not the petitioner exhibited willful disobedience to a
reasonable order from his employer thus making his dismissal valid
Held:
Yes, the dismissal is valid but there is a lack of due process.
Ratio:
In the present case, the company’s business is a printing press
whose production schedule is sometimes flexible and varying. It is only
reasonable that workers are sometimes asked to render overtime work in
order to meet production deadlines.
The petitioner’s arbitrary defiance to Graphics, Inc.’s order for
him to render overtime work constitutes willful disobedience.
Security of tenure is guaranteed by the Constitution but it is not
an absolute rule and cannot be used as a legal shield by an employee
who has exhibited habitual tardiness and absenteeism, and willful
disobedience.
In Merin v. National Labor Relations Commission, this Court
expounded on the principle of totality of infractions as follows:
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 petitioner should not be taken singly and separately. Fitness for
continued employment cannot be compartmentalized into tight little
cubicles of aspects of character, conduct and ability separate and
independent of each other. While it may be true that petitioner was
penalized for his previous infractions, this does not and should not
mean that his employment record would be wiped clean of his infractions.
After all, the record of an employee is a relevant consideration in
determining the penalty that should be meted out since an employee's
past misconduct and present behavior must be taken together in
determining the proper imposable penalty.
But, the employer, is not exempt from observing due process
for every infraction. The Supreme Court found the memorandum asking
for a written explanation within 24 hours
to be unreasonable.
Also, there is no indication that Graphics, Inc. issued a second
notice, informing the petitioner of his dismissal. The respondents admit
that Graphics, Inc. decided to terminate the petitioner’s employment after
he ceased reporting for work from the time he received the memorandum
requiring him to explain and subsequent to his failure to submit a written
explanation. However, there is nothing on record showing that Graphics,
Inc. placed its decision to dismiss in writing and that a copy thereof was
sent to the petitioner. Dispositive: The petition is DENIED. The Decision
of the Court of Appeals in CA-G.R. SP No. 106928 is AFFIRMED with
MODIFICATION in that respondent New Age Graphics, Inc. is hereby
ordered to pay petitioner Billy M. Realda nominal damages in the amount
of Thirty Thousand Pesos (P30,000.00) because such dismissal was for
a just cause but there is a lack of due process.
79 Kakampi and Its Members Panuelos vs. Kingspoint Express &
Logistics
(DRIVER’S DISOBEDIENCE TO MANDATORY DRUG TESTING
WITHOUT EXPLAINING THEMSELVES EVEN AFFORDED TO, IS
WILLFUL; FAILURE TO OBSERVE DUE PROCESS = NOMINAL
DAMAGES)
Facts:
Petitioners were former drivers of the respondent Kingspoint
Express, a sole proprietorship under the name of Co which is engaged in
the business of transporting goods. They were dismissed from service on
January 20, 2006 on the grounds of serious misconduct, dishonesty, loss
of trust and confidence and commission of acts inimical to the interest of
Kingspoint Express.
Kingspoint Express issued separate notices to explain to the
individual petitioners on January 16, 2006 the charges of dishonesty,
serious misconduct and loss of confidence by filing with the NLRC false,
malicious and fabricated cases against the company, and their allegedly
unwarranted refusal to undergo drug testing. They were required to
submit their answer to the charges within forty-eight (48) hours from
receipt of the notices with a warning that failure to do so would mean
waiver of their answer. They were also placed under preventive
suspension in the meantime.
Petitioners failed to submit their written explanation within the
stated period. Subsequently, Kingspoint Express issued to them separate
yet uniformly worded notices on January 20, 2006, informing them of
their dismissal for the abovementioned charges based on the following
acts: fabrication of baseless money claims against the company,
misleading fellow co-workers to sign the malicious complaint for money
claims against the company, refusal to undergo the company's general
drug test, and extorting money from co-workers to fund activities that
they were never fully informed of. Also, petitioner Dacara was dismissed
for consummating his sexual relations with Co’s helper inside her
residence and thus impregnating the help.
A complaint for illegal dismissal was subsequently filed,
alleging that the charges against them were fabricated and that their
dismissal was prompted by Kingspoint Express' aversion to their union
activities. The Labor Arbiter ruled in favor of the petitioners as the
charges are purportedly mere unsubstantiated allegations. This was
affirmed by the NLRC on appeal but the latter reversed itself on a
subsequent MR filed by Kingspoint. The CA initially reversed the NLRC’s
ruling but on an MR, they too reversed their earlier ruling and favored
Kingspoint. Thus, this petition for certiorari before the SC.
Issue:
WON the dismissal was valid.
Ruling:
Yes, the dismissal was valid. It is fundamental that in order to
validly dismiss an employee, the employer is required to observe both
substantive and procedural due process — the termination of
employment must be based on a just or authorized cause and the
dismissal must be effected after due notice and hearing.
As to the substantive requirements of due process, the
employees' refusal to submit themselves to drug test is a just cause
for their dismissal.
An employer may terminate an employment on the ground of
serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work.
Willful disobedience requires the concurrence of two elements:
(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 present in this case.
As to the first element, the dismissed employees did not deny
their refusal to undergo drug testing nor did they explain their refusal.
The utter lack of reason or justification for their insubordination indicates
that it was prompted by mere obstinacy, hence, willful and warranting of
dismissal. As to the second element, the subject order is relevant in the
performance of their functions as drivers of Kingspoint Express. As the
NLRC correctly pointed out, drivers are indispensable to Kingspoint
Express' primary business of rendering door-to-door delivery services. It
is common knowledge that the use of dangerous drugs has adverse
effects on driving abilities that may render the dismissed employees
incapable of performing their duties to Kingspoint Express and acting
against its interests, in addition to the threat they pose to the public.
The existence of a single just cause is enough to order their
dismissal and it is now inconsequential if the other charges against them
do not merit their dismissal from service. Nonetheless, while Kingspoint
Express had reason to sever their employment relations, this Court finds
its supposed observance of the requirements of procedural due process
pretentious. While Kingspoint Express required the dismissed employees
to explain their refusal to submit to a drug test, the two (2) days afforded
to them to do so cannot qualify as "reasonable opportunity", which the
Court construed in King of Kings Transport, Inc. v. Mamacas a period of
at least five (5) calendar days from receipt of the notice.
Thus, even if Kingspoint Express' defective attempt to comply
with procedural due process does not negate the existence of a just
cause for their dismissal, Kingspoint Express is still liable to indemnify
the dismissed employees, with the exception of Panuelos, Dizon and
Dimabayao, who did not appeal the dismissal of their complaints, with
nominal damages in the amount of P30,000.00.
3. GROSS AND HABITUAL NEGLECT OF DUTIES
80 EVELYN J. GARCIA vs. NLRC, HOLY TRINITY ACADEMY
(DISCREPANCY OF AMOUNT TENDERED)
FACTS:
Petitioner served as school cashier for private respondent Holy
Trinity Academy (the school) from June 1974 until her dismissal on
October 5, 1993 for alleged loss of confidence, gross negligence of duty,
gross inefficiency and dishonesty. As school cashier, she was the
custodian of all school funds, including tuition fees, the petty cash and
canteen cash receipts. In her position paper, she alleged that her
termination was brought about by an incident which occurred on June 15,
1993. There appeared to be a discrepancy in one of the deposits she
made where the amount indicated in the deposit slip and the money
actually received by the bank did not tally. A sum of P50, 000.00 was
missing and such loss was blamed exclusively on her by the private
respondents, after considering the separate reports of the National
Bureau of Investigation and the Diaz Murillo Dalupan Auditing Firm. Prior
to her dismissal, petitioner was suspended for a total of 90 days. Two
months after, she then filed a complaint for illegal dismissal.
ISSUE:
WON petitioner was validly dismissed for gross negligence and
for loss of trust and confidence
HELD:
YES. Bearing in mind that the position of cashier is a highly
sensitive position, requiring as it does the attributes of absolute trust and
honesty because of the temptations attendant to the daily handling of
money, petitioner's acts could not help but sow mistrust and loss of
confidence on the part of respondent employer. The Court agrees with
the Commission that the resulting breach of trust constitutes a valid
cause for the dismissal of petitioner.
81 CHALLENGE SOCKS CORPORATION vs. COURT OF APPEALS
(HABITUAL ABSENTISM W/O LEAVE CONSTITUTE GROSS
NEGLIGENCE)
FACTS:
Elvie Buguat was hired by petitioner Challenge Socks
Corporation as knitting operator. In the course of her employment, she
incurred absences and tardiness without prior approval and had been
neglectful of her duties. On 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 five days and warned that a
repetition of the same act would mean dismissal from the service.
On 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. On March 1, 1999, she
again failed to properly count the bundle of socks assigned to her. Thus,
on March 2, 1999, petitioner terminated her services on grounds of
habitual absenteeism without prior leave, tardiness and neglect of work.
ISSUE:
WON Buguat was validly terminated.
HELD:
YES. 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. In the instant case,
there is no doubt that Buguat was habitually absent, tardy and neglectful
of her duties. Habitual neglect implies repeated failure to perform ones
duties for a period of time. Buguats 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. We find the
penalty of dismissal from the service reasonable and appropriate to
Buguats infraction. Her repeated negligence is not tolerable; neither
should it merit the penalty of suspension only. The record of an employee
is a relevant consideration in determining the penalty that should be
meted out. Buguat committed several infractions in the past and despite
the warnings and suspension, she continued to display a neglectful
attitude towards her work. An employees’ past misconduct and p resent
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 errin g 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 in dependent of each other. It is the totality, not the
compartmentalization, of such company infractions that Buguat had
consistently committed which justified her dismissal.
82 HOSPITAL MANAGEMENT SERVICES, INC.MEDICAL CENTER
MANILA, petitioner, vs. HOSPITAL MANAGEMENT SERVICES,
INC.MEDICAL CENTER MANILA EMPLOYEES ASSOCIATION-AFW
and EDNA R. DE CASTRO, respondents.
(NEGLIGENCE; REQUISITES – GROSS & HABITUAL)
FACTS:
Respondent De Castro was a staff nurse at Medical Center
Manila. Calixijan, HRD Officer of Medical Center Manila issued a notice
of termination upon respondent De Castro for alleged (1) negligence to
follow company policy on what to do with patient Rufina Causaren who
fell from a hospital bed; (2) failure to record and refer the incident to the
physician-on-duty allowing a significant lapse of time before reporting the
incident; (3) deliberately instructing the staff to follow her version of the
incident in order to cover up the lapse; and (4) negligence and
carelessness in carrying out her duty as staff nurse-on-duty when the
incident happened.
Respondent De Castro, with the assistance of Medical Center
Manila Employees Association-AFW, filed a Complaint for illegal
dismissal against petitioners with prayer for reinstatement and payment
of full backwages without loss of seniority rights, P20,000.00 moral
damages, P10,000.00 exemplary damages, and 10% of the total
monetary award as attorney's fees.
The Labor Arbiter ruled in favor of respondent De Castro,
stating that although De Castro committed the act complained of, being
her first offense, the penalty to be meted should not be dismissal from
service, but merely 7 to 14 days suspension as the same was classified
as a less serious offense under the Employee's Handbook.
The NLRC reversed the decision of the Labor Arbiter, stating
that respondent De Castro lacked diligence and prudence in carrying out
her duty when, instead of personally checking on the condition of patient
Causaren after she fell from the bed, she merely sent ward-clerk orientee
Guillergan to do the same in her behalf and for influencing her staff to
conceal the incident.
The CA reversed the NLRC's ruling and reinstated the Labor
Arbiter's ruling.
ISSUE:
Whether the CA erred in affirming the illegal dismissal of
respondent De Castro? NO!
HELD:
Article 282 (b) of the Labor Code provides that an employer
may terminate an employment for gross and habitual neglect by the
employee of his duties. The CA ruled that per the Employees Handbook
of petitioner hospital, respondent De Castros infraction is classified as a
less serious offense for "commission of negligent acts during working
time" as set forth in subparagraph 11, paragraph 3 (B) of Chapter XI[10]
thereof. Petitioners anchor respondent De Castros termination of
employment on the ground of serious misconduct for failure to personally
attend to patient Causaren who fell from the bed as she was trying to
reach for the bedpan. Based on her evaluation of the situation,
respondent De Castro saw no necessity to record in the chart of patient
Causaren the fact that she fell from the bed as the patient did not suffer
any injury and her vital signs were normal. She surmised that the incident
was not of a magnitude that would require medical intervention as even
the patient and her niece did not press charges against her by reason of
the subject incident.
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. A single or isolated act of negligence does not constitute
a just cause for the dismissal of the employee.
Negligence is defined as the failure to exercise the standard of
care that a reasonably prudent person would have exercised in a similar
situation. The Court emphasizes that the nature of the business of a
hospital requires a higher degree of caution and exacting standard of
diligence in patient management and health care as what is involved are
lives of patients who seek urgent medical assistance. An act or omission
that falls short of the required degree of care and diligence amounts to
serious misconduct which constitutes a sufficient ground for dismissal.
However, in some cases, the Court had ruled that sanctioning
an erring employee with suspension would suffice as the extreme penalty
of dismissal would be too harsh. Considering that this was the first
offense of respondent De Castro in her nine (9) years of employment
with petitioner hospital as a staff nurse without any previous derogatory
record and, further, as her lapse was not characterized by any wrongful
motive or deceitful conduct, the Court deems it appropriate that, instead
of the harsh penalty of dismissal, she would be suspended for a period of
six (6) months without pay, inclusive of the suspension for a period of 14
days which she had earlier served. Thereafter, petitioner hospital should
reinstate respondent Edna R. De Castro to her former position without
loss of seniority rights, full backwages, inclusive of allowances and other
benefits, or their monetary equivalent, computed from the expiration of
her suspension of six (6) months up to the time of actual reinstatement.
83 NISSAN MOTORS PHILS., INC. vs. VICTORINO ANGELO
G.R. No. 164181, 14 September 2011
(FAILURE TO TURNOVER FUNCTIONS TO SOMEONE CAPABLE OF
PERFORMING THE VITAL TASKS EVEN BECAUSE OF A VALID
CAUSE CONSTITUTES GROSS NEGLECT)
FACTS:
Angelo was employed by Nissan as one of its payroll staff. His
sick leave and vacation leave resulted in the non-
preparation of the payroll for that particular period.
He then received a Memorandum informing him that the compa
ny is considering his dismissal from employment on the grounds of seriou
s misconduct, willful disobedience and gross neglect of duties. He was th
en placed on preventive suspension effective immediately. Unsatisfied wi
th his answer, they then issued a Notice of Termination.
ISSUE:
Whether or not petitioner was validly dismissed? YES!
RULING:
SERIOUS MISCONDUCT - This Court found evidence to support the
allegation of serious misconduct or insubordination. Petitioner claims that
the language used by respondent in his Letter-Explanation is akin to a
manifest refusal to cooperate with company officers, and resorted to
conduct which smacks of outright disrespect and willful defiance of
authority or insubordination.
WILLFUL DISOBEDIENCE - This allegation of willful disobedience can
still be adduced and proven from the same Letter-Explanation cited
earlier. One of the fundamental duties of an employee is to obey all
reasonable rules, orders and instructions of the employer. Disobedience,
to be a just cause for termination, must be willful or intentional, willfulness
being characterized by a wrongful and perverse mental attitude rendering
the employees act inconsistent with proper subordination. A willful or
intentional disobedience of such rule, order or instruction justifies
dismissal only where such rule, order or instruction is (1) reasonable and
lawful, (2) sufficiently known to the employee, and (3) connected with the
duties which the employee has been engaged to discharge.
HABITUAL NEGLIGENCE - the NLRC correctly ruled that the latter's
failure to turn over his functions to someone capable of performing the
vital tasks which he could not effectively perform or undertake because of
his heart ailment or condition constitutes gross neglect.
LETTER:
“Again, it's not negligence on my part and I'm not alone to be blamed. It's
negligence on your part [Perla Go] and A.A. Del Rosario kasi, noong
pang April 1999 ay alam ninyo na hindi ako ang dapat may
responsibilidad ng payroll kundi ang Section Head eh bakit hindi ninyo
pinahawak sa Section Head noon pa. Pati kaming dalawa sa payroll,
kasama ko si Thelma.Tinanggal nyo si Thelma. Hindi nyo ba naisip na
kailangan dalawa ang tao sa payroll para pag absent ang isa ay may
gagawa. Dapat noon nyo pa naisip iyan. Ang tagal kong gumawa ng
trabahong hindi ko naman dapat ginagawa.”
84 PHILIPPINE NATIONAL BANK, Petitioner, v. DAN PADAO,
Respondent.
(13 FRADULENT POSITIVE EVALUATION OF BUSINESSES BY A
CREDIT INVESTIGATOR CONSTITUTES GROSS AND HABITUAL
NEGLECT OF DUTIES)
FACTS:
On August 21, 1981, Padao was hired by PNB as a clerk at its
Dipolog City Branch. He was later designated as a credit investigator in
an acting capacity on November 9, 1993. He was ultimately promoted to
the position of Loan and Credit Officer IV.
In 1994, PNB became embroiled in a scandal involving "behest
loans" as anomalous loans were being granted by its officers. In line with
this, Padao was administratively charged with Dishonesty, Grave
Misconduct, Gross Neglect of Duty, Conduct Prejudicial to the Best
Interest of the Service, and violation of R.A. No. 3019 (Anti-Graft and
Corrupt Practices Act). The case against Padao was grounded on his
having allegedly presented a deceptively positive status of the business,
credit standing/rating and financial capability of 13 loan applicants. After
due investigation, PNB found Padao guilty of gross and habitual neglect
of duty and ordered him dismissed from the bank. Padao appealed to the
banks Board of Directors. Velasco, Padaos colleague, was also held
guilty of the offenses charged, and was similarly meted the penalty of
dismissal. Her motion for reconsideration, however, was later granted by
the bank, and she was reinstated.
ISSUES
I. Whether the position of a credit investigator is one imbued
with the trust and confidence of the employer
II. Whether the act of falsifying the credit and appraisal reports
and that of affixing ones signature in a false report by another is one and
the same degree of misconduct which warrants the same penalty
HELD:
While it is an employer’s basic right to freely select or
discharge its employees, if only as a measure of self-protection
against acts inimical to its interest, the law sets the valid grounds
for termination as well as the proper procedure to be followed when
terminating the services of an employee.
Thus, in cases of regular employment, the employer is
prohibited from terminating the services of an employee except for a just
or authorized cause. Such just causes for which an employer may
terminate an employee are enumerated in Article 282 of the Labor Code:
(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 family member of his family or his duly authorized
representative; and (e) Other causes analogous to the foregoing. Further,
due process requires that employers follow the procedure set by the
Labor Code. Under Art. 277, workers may be dismissed only for a just
cause and enjoy the right of due process which includes notice and the
ample opportunity to be heard and to defend his or her side.
In this case, Padao was dismissed by PNB for gross and
habitual neglect of duties under Article 282 (b) of the Labor Code. Gross
negligence connotes want of care in the performance of ones duties,
while habitual neglect implies repeated failure to perform ones duties for
a period of time, depending on the circumstances. Padao was accused of
having presented a fraudulently positive evaluation of the business, credit
standing/rating and financial capability 13 loan applicants.
The role that a credit investigator plays in the conduct of a
banks business cannot be overestimated. The amount of loans to be
extended by a bank depends upon the report of the credit investigator on
the collateral being offered. If a loan is not fairly secured, the bank is at
the mercy of the borrower who may just opt to have the collateral
foreclosed. If the scheme is repeated a hundredfold, it may lead to the
collapse of the bank.
Padao's repeated failure to discharge his duties as a credit
investigator of the bank amounted to gross and habitual neglect of duties
under Article 282 (b) of the Labor Code. He not only failed to perform
what he was employed to do, but also did so repetitively and habitually,
causing millions of pesos in damage to PNB. Thus, PNB acted within the
bounds of the law by meting out the penalty of dismissal, which it
deemed appropriate given the circumstances.
The CA was correct in stating that when the violation of
company policy or breach of company rules and regulations is tolerated
by management, it cannot serve as a basis for termination. Such ruling,
however, does not apply here. The principle only applies when the
breach or violation is one which neither amounts to nor involves fraud or
illegal activities. In such a case, one cannot evade liability or culpability
based on obedience to the corporate chain of command.
Padao, in affixing his signature on the fraudulent reports,
attested to the falsehoods contained therein. Moreover, by doing so, he
repeatedly failed to perform his duties as a credit investigator.
85 MANSION PRINTING CENTER and CLEMENT CHENG,
Petitioners, v. DIOSDADO BITARA, JR., Respondent.
(GROSS AND HABITUAL ABSENTISM = GROSS AND HABITUAL
NEGLECT OF DUTIES)
FACTS:
Petitioners engaged the services of respondent as a helper
(kargador). Respondent was later promoted as the company’s sole driver
tasked to pick-up raw materials for the printing business, collect account
receivables and deliver the products to the clients within the delivery
schedules.
Petitioners aver that the timely delivery of the products to the
clients is one of the foremost considerations material to the operation of
the business. It being so, they closely monitored the attendance of
respondent. They noted his habitual tardiness and absenteeism.
Thus, petitioners issued a Memorandum requiring respondent
to submit a written explanation why no administrative sanction should be
imposed on him for his habitual tardiness.
Despite respondents undertaking to report on time, however,
he continued to disregard attendance policies.
Consequently, Davis Cheng, General Manager of the company
and son of petitioner Cheng, issued another Memorandum (Notice to
Explain) requiring respondent to explain why his services should not be
terminated. He personally handed the Notice to Explain to respondent
but the latter, after reading the directive, refused to acknowledge receipt
thereof. He did not submit any explanation and, thereafter, never
reported for work.
Davis Cheng personally served another Memorandum (Notice
of Termination) upon him informing him that the company found him
grossly negligent of his duties, for which reason, his services were
terminated.
On even date, respondent met with the management
requesting for reconsideration of his termination from the service.
However, after hearing his position, the management decided to
implement the Memorandum. Nevertheless, the management, out of
generosity, offered respondent financial assistance in the amount of
P6,110.00 equivalent to his one month salary. Respondent demanded
that he be given the amount equivalent to two (2) months salary but the
management declined as it believed it would, in effect, reward
respondent for being negligent of his duties.
Respondent filed a complaint for illegal dismissal against the
petitioners before the Labor Arbiter.
Labor Arbiter dismissed the complaint for lack of merit.
On appeal to the National Labor Relations Commission, the
findings of the Labor Arbiter was AFFIRMED en toto.
Before the Court of Appeals, respondent sought the annulment
of the Commissions Resolution on the ground that they were rendered
with grave abuse of discretion and/or without or in excess of jurisdiction.
The Court of Appeals found for the respondent and reversed
the findings of the Commission.
ISSUE: Whether or not respondent is illegally dismissed? NO!
HELD:
In order to validly dismiss an employee, the employer is
required to observe both substantive and procedural aspects the
termination of employment must be based on a just or authorized cause
of dismissal and the dismissal must be effected after due notice and
hearing.
The imputed absence and tardiness of the complainant are
documented. He faltered on his attendance 38 times of the 66 working
days. His last absences on 11, 13, 14, 15 and 16 March 2000 were
undertaken without even notice/permission from management. These
attendance delinquencies may be characterized as habitual and are
sufficient justifications to terminate the complainant’s employment.
On this score Valiao v. Court of Appealsis instructive:
xxx It bears stressing that petitioners absences and tardiness
were not isolated incidents but manifested a pattern of habituality. xxx
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.
In Valiao,we defined gross negligence as want of care in the
performance of ones duties and habitual neglect as repeated failure to
perform ones duties for a period of time, depending upon the
circumstances.51 These are not overly technical terms, which, in the first
place, are expressly sanctioned by the Labor Code of the Philippines, to
wit:
ART. 282.Termination by employer.- An employer may
terminate an employment for any of the following causes:
(a) xxx
(b)Gross and habitual neglect by the employee of his duties;
Xxx
Clearly, even in the absence of a written company rule defining
gross and habitual neglect of duties, respondents omissions qualify as
such warranting his dismissal from the service.
We cannot simply tolerate injustice to employers if only to
protect the welfare of undeserving employees. As aptly put by then
Associate Justice Leonardo A. Quisumbing:
Needless to say, so irresponsible an employee like petitioner
does not deserve a place in the workplace, and it is within the
management’s prerogative xxx to terminate his employment. Even as the
law is solicitous of the welfare of employees, it must also protect the
rights of an employer to exercise what are clearly management
prerogatives. As long as the company’s exercise of those rights and
prerogative is in good faith to advance its interest and not for the purpose
of defeating or circumventing the rights of employees under the laws or
valid agreements, such exercise will be upheld.
Procedural due process entails compliance with the two-notice
rule in dismissing an employee, to wit: (1) the employer must inform the
employee of the specific acts or omissions for which his dismissal is
sought; and (2) after the employee has been given the opportunity to be
heard, the employer must inform him of the decision to terminate his
employment.
4. FRAUD
86 SAN MIGUEL CORPORATION vs. NLRC
FACTS:
The complainants were former security guards of the petitioner
which dismissed them for falsification of their time cards. They made
false entries in their time cards showing that they reported for work on
February 19 and 20, 1983 when the truth was that they went on a
hunting tap to San Juan, Batangas, with their chief Major Martin
Asaytuno, then head of the Administrative Services Department of the
Security Directorate of the petitioner. Besides the falsification of the
entries for February 19 and 20, 1983 in their time cards, complainant Mi
solas was caught red handed by Security Guard Romeo Martin at 7:45
A.M. on March 2, 1983 punching in not only his own time card but also
the time cards of Delen and Querubin. Seeing Misolas in a tight fix,
Querubin rushed to the bundy clock and punched in a time card (which
turned out to be the card of one Rodrigo de Castro) to save Misolas and
to make it appear to Martin that he (Querubin), punched in his own time
card. Hence, he was dismissed.
ISSUE: WON complainants were validly terminated.
HELD:
YES. The falsification and fraud which the private respondents
committed against their employer were inexcusable. Major Asaytuno's
initials on the false entries in their time cards did not purge the
documents of their falsity. Their acts constituted dishonesty and serious
misconduct, lawful grounds for their dismissal under Art. 282, sub-pars.
(a) and (c), of the Labor Code, which provides: ART. 282. Termination by
employer. An employer may terminate an employment for any of 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. xxx xxx xxx (c) Fraud or willful breach by the
employee of the trust reposed in him by his employer or duly authorized
representative.
5. WILLFUL BREACH OF TRUST & LOSS OF CONFIDENCE
87 NATIONAL SUGAR REFINERIES CORPORATION (NASUREFCO)
vs. NLRC and SUSAN PABIONA
(LOSS OF CONFIDENCE)
FACTS:
Pabiona was appointed as Sugar Accountant-Bookkeeper. She
was tasked to maintain records of all transactions pertaining to the Raw
and Refined Sugar Exchange Program, validate Raw Sugar Quedans
submitted by Exchange participants prior to issuance of the Refined
Sugar Delivery Orders and prepare and issue Refined Sugar Delivery
Orders only after validation procedures have been properly complied
with. When the books of NASUREFCO were audited in 1990 anomalous
and irregular transactions were uncovered in the Raw Sugar Movement
Report. NASUREFCO found Pabionas written explanation flawed,
unsatisfactory. Hence, NASUREFCO charged Pabiona with several
violations of accounting policies. A formal investigation was conducted
thereafter, NASUREFCO terminated the services of Pabiona for willful
violation of company policies, gross and habitual neglect of duties, and
willful breach of trust. Complainant herself admits that she may be
negligent yet it was not gross and habitual; that her acts in violating
company policies as basis for her dismissal may be viewed by
respondent as breach of trust, yet the same is not wilful.
ISSUE:
WON the dismissal of Pabiona was for a just and valid cause
HELD:
YES. The preparation and validation of documents for
purposes of withdrawing refined sugar from NASUREFCO's warehouse
involve trust and confidence. It is only through the issuance by Pabiona
of a Refined Sugar Delivery Order that the planters could avail of the
refined sugar of NASUREFCO. The rule is settled that if the employee
is guilty of breach of trust or that his employer has justifiable
reason to distrust him, the labor tribunal cannot justly deny the
freedom and authority to dismiss his employee. The basic premise
for dismissal on the ground of loss of confidence is that the employee
concerned holds a position of trust and confidence. It is the breach of this
trust that results in the employer’s loss of confidence in the employee.
Under Art. 282 of the Labor Code, as amended, loss of confidence would
be the result of fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized representative, a just
cause for termination. It cannot be gainsaid that the breach of trust must
be related to the performance of the employee's functions. The
infractions committed by Pabiona were directly within the purview of her
job description. It was only through her active participation and
involvement in the illicit infringement of the companys accounting
procedures that some clients of NASUREFCO were able to withdraw
refined sugar in larger quantities to the prejudice of the latter.
88 ALEX A. FALGUERA vs. NLRC, PHILIPPINE REFINING CO. (PRC)
or UNILEVER-PRC, and JESUS
JAVELONA
(WAREHOUSEMAN; SUBSTANTIAL EVIDENCE)
FACTS:
Falguera was an employee of Philippine Refining Co., Inc., now
known as Unilever Philippines (PRC), Inc. One day, the assistant
soapery engineer of the Company observed an unusual increase in the
reported requisitions by the soapery department of Parker packing
materials for the month of June. Upon his examination of the green
copies of the MRs of the soapery department, he discovered that
P27,025.00 worth of Parker packing materials chargeable to his
department could not be accounted for and were not reflected in the said
copies. He therefore sought the original white copies of the MRs from the
accounting department. A meticulous scrutiny disclosed that while the
original MRs contained entries of the packing items worth P27,050.00,
they, however, showed alterations, super impositions, and erasures.
Pending investigation, the petitioner was placed under preventive
suspension pending the investigation of the anomaly. Upon investigation,
it found that eight original MRs were tampered by two engineering
storemen, in particular, Falguera and Felipe Viado. The latter admitted
having tampered one MR and offered to testify against the petitioner.
Thereafter, Falguera received a letter signed by Javelona informing him
that the Company was terminating his employment for loss of confidence
and breach of trust, effective as of the time he was placed under
preventive suspension.
ISSUE:
WON Falguera’s termination was valid.
HELD:
YES. It is not disputed that the petitioner is a rank-and-file
employee. Ordinarily, a rank and-file employee is not reposed with a high
degree of trust and confidence expected of a supervisory or managerial
employee. It must, however, be noted that the petitioner served as a
warehouseman and was in charge of the custody, safekeeping, and
release of the Company's materials. The nature of his work and the
scope and special character of his duties, therefore, involved utmost trust
and confidence. Among the just causes or valid grounds for termination
of employment by the employer is "fraud or willful breach by the
employee of the trust reposed in him by his employer or duly authorized
representative." Ordinary breach will not suffice; it must be willful
and without justifiable excuse; there must be basis therefor, and it
must be supported by substantial evidence and not merely by the
whims or caprice of the employer. In the instant case, we find no difficulty
in agreeing with the public respondents that the petitioner committed
willful breach of the trust and confidence reposed in him by the
Company.
89 JAMES BEN L. JERUSALEM, Petitioner, v. KEPPEL MONTE
BANK, HOE ENG HOCK, SUNNY YAP and JOSEFINA PICART,
Respondents.
(BREACH OF TRUST; REQUISITES)
FACTS:
James Ben L. Jerusalem (James) was employed by Keppel
Monte Bank (Keppel) as Assistant Vice-President and was later was
assigned as Head of the newly created VISA Credit Card Department.
The bank subsequently re-organized the said Department and reduced it
to a mere unit. Afterwards, James, carrying the same rank, was
reassigned as Head of the Marketing and Operations of the Jewelry
Department.
James received from Jorge Javier (Jorge) a sealed envelope
said to be containing VISA Card application forms. Jorge is a Keppel
Visa Card Holder since December 1998. James immediately handed
over the envelope with accomplished application forms to the VISA
Credit Card Unit. All in all, the VISA credit card applications referred by
Jorge which James forwarded to the VISA Credit Card Unit numbered
67, all of which were subsequently approved. As it turned out, all the
accounts under these approved applications became past due.
James received a Notice to Explain why no disciplinary action
should be taken against him for referring/endorsing fictitious VISA card
applicants. He explained that he had no participation in the processing of
the VISA card applications since he was no longer connected with the
VISA Credit Card Unit at the time of such transactions. He explained that
he can only endorse the applications referred by Jorge to the VISA Credit
Card Unit because he was already transferred to Jewelry Department, as
Head. However, he was issued a Notice of Termination informing him
that he was found guilty of breach of trust and confidence for knowingly
and maliciously referring, endorsing and vouching for VISA card
applicants who later turned out to be impostors resulting in financial loss
to Keppel. Thus, the filing of a complaint foe illegal dismissal.
The LA found Keppel guilty of illegal dismissal and ordered the
payment of backwages from the time of his illegal termination and in lieu
of reinstatement, a separation pay should be given. The NLRC affirmed
the LA’s decision. However, the CA reversed and set aside the said
decision and dismissed the complaint.

ISSUE:
Whether Keppel legally terminated James’s employment on the
ground of willful breach of trust and confidence? NO!
HELD:
Article 282(c) of the Labor Code prescribes two separate and
distinct grounds for termination of employment, namely: (1) fraud; or (2)
willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative. 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.
There are 2 requisites for dismissal on the ground of loss of
trust and confidence, these are: 1) employee concerned must be holding
a position of trust and confidence; and 2) there must be an act that would
justify the loss of trust and confidence. In the case at hand, the first
requisite is present for James held a position of trust and confidence as
Assistant Vice-President of the Jewelry Department. As for the second
requisite, the court ruled that Keppel’s evidence against James fails to
clearly and convincingly establish a willful breach of trust.
From the findings of both the Labor Arbiter and the NLRC it is
clear that James did nothing wrong when he handed over to Marciana,
the unit head, the envelope containing the applications of persons under
the referred accounts of Jorge who were later found to be fictitious. As
the records now stand, James was no longer connected with the VISA
Credit Card Unit when the 67 applications for VISA card were approved.
At such time, he was already the Head of the Marketing and Operations
of the Jewelry Department. His act therefore of forwarding the already
accomplished applications to the VISA Credit Card Unit is proper as he is
not in any position to act on them. The processing and verification of the
identities of the applicants would have been done by the proper
department, which is the VISA Credit Card Unit. Therefore, it is
incumbent upon Marciana as Unit Head to have performed her duties. As
correctly observed by the Labor Arbiter, Keppel had gone too far in
blaming James for the shortcomings and imprudence of Marciana. The
invocation of Keppel of the loss of trust and confidence as ground for
James’s termination has therefore no basis at all. Thus, the Court
declared that such dismissal based on the ground of loss of trust and
confidence was illegal.
90 Elmer Lopez vs Keppel Bank Philippines, Inc.
(BRANCH MANAGER OF BANK ISSUING CREDIT DESPITE
EXPRESSLY DISALLOWED)
The Antecedents
The facts, as set out in the assailed CA decision, are
summarized below.
Petitioner Elmer Lopez was the Branch Manager of the
respondent Keppel Bank Philippines, Inc. (bank) in Iloilo City. Allegedly,
through his efforts, Hertz Exclusive Cars, Inc. (Hertz) became a client of
the bank.
By notice dated August 12, 2003,[4] the bank asked Lopez to
explain in writing why he should not be disciplined for issuing, without
authority, two purchase orders (POs) for the Hertz account amounting to
a total of P6,493,000.00, representing the purchase price of 13 Suzuki
Bravo and two Nissan Exalta vehicles.
Lopez submitted his written explanation on the same day,[5] but
the bank refused to give it credit. Through respondents Manuel Bosano
III (Vice-President and Head of Retail Banking Division/Consumer
Banking Division) and Stefan Tong Wai Mun (Vice-
President/Comptroller), the bank terminated Lopez's employment
effective immediately.[6]
Lopez asked the bank for reconsideration.[7] In response, the
bank, through the respondent officers, met with Lopez at its headquarters
in Cubao, Quezon City on September 25, 2003. Lopez came with his
lawyer (Atty. Edmundo V. Buensuceso) and a military man (one Col.
Flordeliza). After the meeting, the bank found no reason to reconsider
and reiterated its decision to dismiss Lopez.[8]
Lopez filed a complaint for illegal dismissal and money claims
against the bank, Bosano and Tong.
The Compulsory Arbitration Proceedings
Lopez alleged before the labor arbiter that he issued the POs
as part of his strategy to enhance the bank's business, in line with his
duty as branch manager to promote the growth of the bank. He claimed
that the bank honored the first PO for P1.8M from which the bank derived
an income of P142,000.00. He added that the second PO did not
materialize because Mr. James Puyat Concepcion, a Hertz incorporator
and director who opened the Hertz account, stopped depositing with the
bank because of the negative credit rating he received from the bank's
credit committee. Allegedly, the committee discovered that James Puyat
Concepcion had several pending court cases.
For its part, the bank denied approving the first PO, arguing
that Lopez did not have the authority to issue the POs for the Hertz
account as there was a standing advice that no Hertz loan application
was to be approved. It stressed that Lopez committed a serious violation
of company rules when he issued the POs.
In a decision dated April 28, 2004,[9] Labor Arbiter Cesar D.
Sideño ruled that Lopez was illegally dismissed. Accordingly, the labor
arbiter ordered Lopez's immediate reinstatement, and awarded him
backwages of P392,000.00, moral and exemplary damages of P8M, and
P550,000.00 -- the purchase price of a Toyota Revo which Lopez
allegedly brought over from his stint with Global Bank (now Metrobank).
The labor arbiter found that contrary to the bank's claim, the evidence
showed that Lopez had been issuing POs which the bank had paid,
including the first of the two POs that led to his dismissal.[10]
On appeal by the bank, the National Labor Relations
Commission (NLRC) rendered a decision on October 11,
2005[11] reversing the labor arbiter's ruling. It dismissed the complaint for
lack of merit. The NLRC found merit in the bank's submission that by
issuing the questioned POs without authority and against the bank's
express orders, Lopez thereby committed a willful disobedience against
his superiors -- a sufficient basis for the bank to lose its trust and
confidence in him as branch manager. It thus found that Lopez had been
dismissed for cause after the observance of due process. Lopez moved
for reconsideration, but the NLRC denied the motion in its resolution of
January 25, 2006.[12] Lopez sought relief from the CA through a petition
for certiorari, charging the NLRC with grave abuse of discretion for
setting aside the labor arbiter's decision.
The CA Decision
On December 19, 2006, the CA rendered its now assailed
decision,[13]denying the petition and affirming the October 11, 2005
decision of the NLRC. It fully agreed with the NLRC finding that Lopez
had not been illegally dismissed.
Lopez moved for, but failed to obtain, a reconsideration of the
CA decision. The CA denied the motion on February 7, 2007.[14]
The Case for Lopez
Through the present petition,[15] the reply to the bank's
comment dated February 11, 2008,[16] and the memorandum dated
September 22, 2008,[17] Lopez entreats the Court to nullify the CA
decision, contending that the CA erred in: (1) not ruling that the bank's
appeal with the NLRC should have been dismissed on the ground of non-
perfection; and (2) affirming the decision of the NLRC that he was
dismissed for a just cause (loss of trust and confidence) and that he was
afforded due process.
Lopez argues, with respect to the first assignment of error, that
the bank failed to comply with Sections 4 and 6, Rule VI, of the 2002
Rules of Procedure of the NLRC.[18] He points out that the bank did not
file a notice of appeal together with its memorandum of appeal, which in
turn was not supported by a certificate of non-forum shopping; and
neither did the bank furnish him, as appellee, a certified copy of the
appeal bond.
On the substantive aspect of the case, Lopez posits that the
bank failed to justify his dismissal on the ground of loss of trust and
confidence. He insists that, as branch manager, he had the authority to
issue POs as in fact he issued several of them in the past, which POs
were honored and paid by the bank. The labor arbiter properly relied on
the past transactions in his decision. These included, he reiterates, the
first PO for the Hertz account which was paid by the bank on July 18,
2003, a transaction where the bank even earned a substantial income
(P142,000.00). He maintains that the bank failed to substantiate its
position that he was not authorized to issue the POs. He adds that the
bank's claim that his issuance of the POs exposed the bank to financial
loss is a lame excuse to justify the termination of his employment.
Lopez argues that his dismissal was a mere afterthought on the
part of the bank management, particularly Bosano, to cover up its
embarrassment when he (Lopez) made inquiries and discovered that
Hertz's James Puyat Concepcion had no pending court cases and was
therefore credit worthy. He adds that assuming that he did not have the
authority to issue POs, still, he cannot be held guilty of willful
disobedience; even if he had been guilty, dismissal was a very harsh
penalty.
Finally, Lopez submits that the bank failed to accord him due
process because the bank did not give him the opportunity to prepare for
his defense. He points out that his written explanation (dated August 12,
2003)[19] preceded the bank's letter (of the same date)[20] that required
him to explain why he issued the POs in question. Lopez contends in this
regard that on August 12, 2003, he went to Bosano's office in Quezon
City all the way from Iloilo City and there, he was cornered by Bosano
who verbally instructed him to immediately write down his explanation
even before he was served with the bank's August 12, 2003 letter. He
maintains that Bosano's preemptive move deprived him of the
opportunity to secure the services of a counsel.
While Lopez believes his dismissal to be illegal, he does not
seek reinstatement due to the antagonism that has developed between
him, and the bank and its officers, due to the present case. He only asks
for separation pay of one month pay for every year of service, full
backwages, allowances and other benefits. Additionally, he prays for
moral and exemplary damages, as well as attorney's fees, to
compensate him for a dismissal that was attended by bad faith and
effected in a wanton, oppressive and malevolent manner.
The Case for the Bank and its Officers,
Through its comment to the petition[21] and
memorandum,[22] the bank submits that the CA committed no reversible
error in denying Lopez's petition for certiorari, and in affirming the ruling
of the NLRC that Lopez was dismissed for a just cause and after due
process.
The bank is puzzled why Lopez is standing firm on his position
that he did nothing wrong when he issued the questioned POs despite
the express directive not to proceed with the Hertz loan application
unless its adverse credit investigation report is explained to the bank's
credit committee. It posits that no bank would gamble to maintain as
branch manager a person who dares to supplant a major decision of the
bank's top leadership with his personal decision. It argues that in this
situation, the law (Labor Code) provides protection to the employer
through its management prerogative rights and the right to dismiss
employees on just and valid grounds.
The bank refutes Lopez's contention that there was no willful
disobedience that warranted his dismissal. It points out that there was an
order for him not to proceed with the Hertz loan application. The order
was very reasonable as it is the standard policy of every bank to conduct
an investigation on the credit worthiness of any loan applicant. Since it
appeared from the investigation of its credit committee that James Puyat
Concepcion of Hertz had various court cases, it was only proper for the
bank to put on hold the loan application of Hertz until the adverse finding
could be cleared. It insists that Lopez willfully and knowingly disobeyed
this order.
Further, the bank questions Lopez's submission, through a
supplemental addendum to his position paper, of evidence that it
honored and paid POs issued by Lopez in the past. It maintains that it
was not furnished a copy of this submission; hence, it was unable to
controvert this evidence.
On the procedural due process issue, the bank denies Lopez's
allegation that he was not given the opportunity to defend himself. It
points out that both the NLRC and the CA confirmed that Lopez was not
deprived the opportunity to be heard; the opportunity commenced with:
(1) the notice for him to explain his side regarding his unauthorized
issuance of POs; (2) the notice of his termination from employment; and
(3) the hearing called in response to his motion for reconsideration where
he was assisted by his lawyer and his soldier friend.
The Court's Ruling
The procedural issue
Lopez faults the CA for not ruling that the bank's appeal to the
NLRC should have been dismissed for non-perfection. He argues that no
notice of appeal accompanied the memorandum of appeal; neither was
there a certificate of non-forum shopping nor any copy furnished to him of
the certified true copy of the appeal bond.
The procedural question is a non-issue. Lopez did not raise it
before the CA; in fact, he challenged the NLRC decision of October 11,
2005[23] on its merits and not on its form. We, therefore, see no need to
further discuss this argument.
The merits of the case
On the substantive aspect of the case, we note that Lopez was
dismissed from the service by reason of loss of trust and confidence, a
just cause for an employee's dismissal under the law.[24] Lopez insists
though that the act which triggered the dismissal action does not justify
his separation from the service.
Is Lopez liable for loss of trust and confidence for issuing the two
disputed POs?
The right of an employer to freely select or discharge his
employee is a recognized prerogative of management; an employer
cannot be compelled to continue employing one who has been guilty of
acts inimical to its interests. When this happens, the employer can
dismiss the employee for loss of confidence.[25]
At the same time, loss of confidence as a just cause of
dismissal was never intended to provide employers with a blank check
for terminating employment. Loss of confidence should ideally apply only
(1) to cases involving employees occupying positions of trust and
confidence, or (2) to situations where the employee is routinely charged
with the care and custody of the employer's money or property. To the
first class belong managerial employees, i.e., those vested with the
powers and prerogatives to lay down management polices and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline
employees, or effectively recommend such managerial actions. To the
second class belong cashiers, auditors, property custodians, or those
who, in the normal and routine exercise of their functions, regularly
handle significant amounts of money or property.[26]
As branch manager, Lopez clearly occupies a "position of
trust." His hold on his position and his stay in the service depend on the
employer's trust and confidence in him and on his managerial
services.[27] According to the bank, Lopez betrayed this trust and
confidence when he issued the subject POs without authority and despite
the express directive to put the client's application on hold. In response,
Lopez insists that he had sufficient authority to act as he did, as this
authority is inherent in his position as bank manager. He points to his
record in the past when he issued POs which were honored and paid by
the bank and which constituted the arbiter's "overwhelming
evidence"[28] in support of the finding that "complainant's dismissal from
work was without just cause, hence, illegal."[29]
We disagree with Lopez's contention. Despite evidence of his
past exercise of authority (as found by the labor arbiter), we cannot
disregard evidence showing that in August 2003, the bank specifically
instructed Lopez not to proceed with the Hertz loan application because
of the negative credit rating issued by the bank's credit committee. We
find it undisputed that Lopez processed the loan despite the adverse
credit rating. In fact, he admitted that he overlooked the "control aspects"
of the transaction as far as the bank was concerned because of his
eagerness to get a bigger share of the market.[30]
Lopez's good intentions, assuming them to be true, are beside
the point for, ultimately, what comes out is his defiance of a direct order
of the bank on a matter of business judgment. He went over the heads of
the bank officers, including the credit committee, when, based on
inquiries he made on his own regarding the credit worthiness of James
Puyat Concepcion, he simply proceeded to act on the basis of his own
judgment. Evident in his written explanation[31] was his failure to inform
the credit committee of his own efforts to check on the committee's
adverse findings against Hertz and his independent action based solely
on his own authority.
As a bank official, the petitioner must have been aware that it is
basic in every sound management that people under one's supervision
and direction are bound to follow instructions or to inform their superior of
what is going on in their respective areas of concern, especially
regarding matters of vital interest to the enterprise. Under these facts, we
find it undisputed that Lopez disobeyed the bank's directive to put the
Hertz loan application on hold, and did not wait until its negative credit
rating was cleared before proceeding to act. That he might have been
proven right is immaterial. Neither does the submission that the bank
honored and paid the first PO and even realized a profit from the
transaction, mitigate the gravity of Lopez's defiance of the directive of
higher authority on a business judgment. What appears clear is that the
bank cannot in the future trust the petitioner as a manager who would
follow directives from higher authorities on business policy and
directions. The bank can be placed at risk if this kind of managerial
attitude will be repeated, especially if it becomes an accepted rule among
lower managers.
In Nokom v. NLRC,[32] we reiterated the guidelines for the
application of loss of confidence as follows: (1) loss of confidence, should
not be simulated; (2) it should not be used as a subterfuge for causes
which are improper, illegal or unjustified; (3) it may not be arbitrarily
asserted in the face of overwhelming evidence to the contrary; and (4) it
must be genuine, not a mere afterthought to justify an earlier action taken
in bad faith.
Under the circumstances of this case, we are convinced that
the bank was justified in terminating Lopez's employment by reason of
loss of trust and confidence. He admitted issuing the two POs, claiming
merely that he had the requisite authority. He could not present any proof
in this regard, however, except to say that it was part of his inherent duty
as bank manager. He also claimed that the bank acquiesced to the
issuance of the POs as it paid the first PO and the POs he issued in the
past. This submission flies in the face of the bank's directive for him not
to proceed unless matters are cleared with the bank's credit committee.
The bank had a genuine concern over the issue as it found through its
credit committee that Hertz was a credit risk. Whether the credit
committee was correct or not is immaterial as the bank's direct order left
Lopez without any authority to clear the loan application on his own. After
this defiance, we cannot blame the bank for losing its confidence in
Lopez and in separating him from the service.
The due process issue
As the NLRC and the CA did, we find Lopez to have been
afforded due process when he was dismissed. He was given the required
notices. More importantly, he was actually given the opportunity to be
heard; when he moved for reconsideration of the bank's decision to
terminate his employment, it scheduled a hearing where he appeared
together with his lawyer and a military man. This was an opportunity to
be heard that the law recognizes.
In fine, we find no merit in the petition.
WHEREFORE, premises considered, we hereby DENY the
petition for lack of merit. The assailed decision and resolution of the
Court of Appeals are AFFIRMED. Costs against petitioner Elmer Lopez.
SO ORDERED.
91 Jumuad vs. Hi-Flyer Food, G.R. No. 187887, September 7, 2011
(RESTAURANT; RESPONDEAT SUPERIOR)
Facts:
Petitioner Pamela Florentina P. Jumuad began her
employment with respondent Hi-Flyer Food, Inc. as management trainee.
Based on her performance through the years, Jumuad received several
promotions until she became the area manager for the entire Visayas-
Mindanao 1 region. Sometime on October 2004, Hi-Flyer conducted a
food safety, service and sanitation audit and revealed several sanitation
violations, such as the presence of rodents and the use of a defective
chiller for the storage of food. When asked to explain, Jumuad first
pointed out that she had already taken steps to prevent the further
infestation of the branch. As to why the branch became infested with
rodents, Jumuad faulted management's decision to terminate the
services of the branch's pest control program and to rely solely on the
pest control program of the mall.
Hi-Flyer audited the account of one of its branches and found
out irregularities of cash shortages. Another sanitation audit was made
and signs of rodent gnawing/infestation were found. This time, Jumuad
explained to management that she had been busy conducting
management team meetings and that, at the date the audit was
conducted, she had no scheduled visit. Hi-Flyer sent Jumuad an
Irregularities Report and Notice of Charges. Jumuad submitted her
written explanation. Hi-Flyer held an administrative hearing where
Jumuad appeared with counsel. Apparently not satisfied with her
explanations, Hi-Flyer served her a Notice of Dismissal. This prompted
Jumuad to file a complaint against Hi-Flyer for illegaldismissal.
Issue:
Whether Jumuad was illegally dismissed
HELD:
The Court is convinced that Jumuad cannot be dismissed on
the ground of gross and habitual neglect of duty. The Court notes the
apparent neglect of Jumuad of her duty in ensuring that her subordinates
were properly monitored and that she had dutifully done all that was
expected of her to ensure the safety of the consuming public. The nature
of the anomalies uncovered were each of a different nature, the Court
finds that her acts or lack of action in the performance of her duties is not
born of habit.
Despite saying this, it cannot be denied that Jumuad willfully
breached her duties as to be unworthy of the trust and confidence of Hi-
Flyer.
Based on established facts, the mere existence of the grounds
for the loss of trust and confidence justifies petitioner's dismissal. In the
present case, the reports of Hi-Flyer show that there were anomalies
committed in the branches managed by Jumuad. On the principle of
respondeat superior or command responsibility alone, Jumuad may be
held liable for negligence in the performance of her managerial duties.
She may not have been directly involved in causing the cash shortages
but her involvement in not performing her duty monitoring and supporting
the day to day operations of the branches and ensure that all the facilities
and equipment at the restaurant were properly maintained and serviced,
could have truly prevented the whole debacle from ever occurring.
Moreover, it is observed that rather than taking proactive steps to prevent
the anomalies at her branches, Jumuad merely effected remedial
measures. In the restaurant business where the health and well-being of
the consuming public is at stake, this does not suffice. Thus, there is
reasonable basis for Hi-Flyer to withdraw its trust in her and dismissing
her from its service.
92 JOEB M. ALIVIADO, et al., Petitioners, v. PROCTER & GAMBLE
PHILS., INC., and PROMM-GEM INC., Respondents.
(EMPLOYEES MUST HOLD A POSITION/DESIGNATION OF TRUST)
FACTS:
Petitioners worked as merchandisers of P&G from various
dates, allegedly starting as early as 1982 or as late as June 1991, to
either May 5, 1992orMarch 11, 1993.
They all individually signed employment contracts with either
Promm-Gem or SAPS for periods of more or less five months at a
time.They were assigned at different outlets, supermarkets and stores
where they handled all the products of P&G.They received their wages
from Promm-Gem or SAPS.
SAPS and Promm-Gem imposed disciplinary measures on
erring merchandisers for reasons such as habitual absenteeism,
dishonesty or changing day-off without prior notice.
P&G is principally engaged in the manufacture and production
of different consumer and health products, which it sells on a wholesale
basis to various supermarkets and distributors. To enhance consumer
awareness and acceptance of the products, P&G entered into contracts
with Promm-Gem and SAPS for the promotion and merchandising of its
products.
In December 1991, petitioners filed a complaint against P&G
for regularization, service incentive leave pay and other benefits with
damages.The complaint was later amendedto include the matter of their
subsequent dismissal.
On November 29, 1996, the Labor Arbiter dismissed the
complaint for lack of merit and ruled that there was no employer-
employee relationship between petitioners and P&G.He found that the
selection and engagement of the petitioners, the payment of their wages,
the power of dismissal and control with respect to the means and
methods by which their work was accomplished, were all done and
exercised by Promm-Gem/SAPS.He further found that Promm-Gem and
SAPS were legitimate independent job contractors. On appeal, the NLRC
dismissed the same. Petitioners filed a motion for reconsideration but the
motion was denied in theNovember 19, 1998Resolution.
Petitioners likewise failed to have a favrable decision in the CA
hence, this petition.
ISSUE:
Whether or not Petitioners are validly dismissed for wilful
breach of trust?
HELD:
NO! Loss of trust and confidence, as a ground for dismissal, 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.[49]
Loss of trust and confidence, as a cause for termination of employment,
is premised on the fact that the employee concerned holds a position of
responsibility or of trust and confidence. As such, he must be invested
with confidence on delicate matters, such as custody, handling or care
and protection of the property and assets of the employer. And, in order
to constitute a just cause for dismissal, the act complained of must be
work-related and must show that the employee is unfit to continue to
work for the employer.[50] In the instant case, the petitioners-employees
of Promm-Gem have not been shown to be occupying positions of
responsibility or of trust and confidence. Neither is there any evidence to
show that they are unfit to continue to work as merchandisers for Promm-
Gem.
All told, we find no valid cause for the dismissal of petitioners-employees
of Promm-Gem.
93 Grand Asian Shipping Lines v. Galvez
(BREACH OF TRUST; MANAGERIAL VS. RANK AND FILE)
Facts:
 Petitioner Grand Asian Shipping Lines, Inc (GASLI) is a
domestic corporation engaged in transporting liquified petroleum gas
(LPG) from Petron’s refinery in Bataan to Pasig and Cavite.
 Respondents are crewmembers of one of GASLI’s vessels,
M/T Dorothy Uno.
 On January 2000, Richard Abis (vessel’s oiler) reported to
GASLI an alleged illegal activity being committed by respondent who
would misdeclare the consume fuel in the Engineer’s Voyage Reports
and the save fuel oil were sold to other vessel out at sea (at nighttime).
Profits would be divided amongst themselves.
 After investigation, from the period of June 30, 1999 to Feb
15, 2000 the fuel it consumption was overrate by 6,954.3 liters amounting
to 74,737.86.
 Acting upon the anomaly, GASLI placed respondents under
preventive suspension and after conducting administrative hearings
decided to terminate them for breach of trust, commission of crime
against employer.
 Respondents filed with the NLRC separate complaint for
illegal suspension and dismissal, underpayment/nonpayment of
salaries/wages, overtime pay, premium pay for holiday and rest day,
service incentive pay, tax refunds and indemnities for damages and
attorney’s fees against petitioner.
 On August 30, 2001, the Labor Arbiter rendered decision
finding the dismissal of 21 complainants to be illegal.
 Petitioner then filed a Notice of Appeal with Motion to
Reduce Bond before the NLRC citing economic depression, legality of
termination, and compliance with labor standards. NLRC denied
petitioner’s motion to reduce bond and directed an additional bond.
 Despite petitioner’s failure the pay the bond, NLRC found the
appeal meritorious and ruled for petitioners. Stating that the dismissal
was valid with the exception of Sales.
 NLRC struck down the monetary awards given by the Labor
Arbiter as they were based on computations made by respondents.
 On appeal to the CA, the court ruled in favor of respondent
stating that the NLRC’s decision had jurisdictional error since petitioner
did not comply with the additional bond.
LABOR LAW
Issue:
I. WON the CA erred in holding that respondents were illegally
dismissed on the ground of breach of trust?
Held/Ratio:
Respondent’s termination due to loss of trust and confidence
should have a distinction between managerial and rank and file
employees. Rank-and-file employees require proof of involvement while
managerial employees mere existence of a basis for belief is sufficient.
Given that Galvez and Gruta have managerial positions there is some
basis for the loss of employer’s confidence—regarding the overstatement
of fuel consumption without any evidence to the contrary. While the
others, who are ordinary rank and file employees, were not proven to
have any involvement in the loss of the vessel’s fuel. Rendering their
dismissals illegal. The employer bears the burden of proof in illegal
dismissal cases thus the employer must first establish by
substantial evidence the fact of dismissal.
In the case before us, Galvez, as the ship captain, is
considered a managerial employee since his duties involve the
governance, care and management of the vessel.56 Gruta, as chief
engineer, is also a managerial employee for he is tasked to take
complete charge of the technical operations of the vessel.57 As captain
and as chief engineer, Galvez and Gruta perform functions vested with
authority to execute management policies and thereby hold positions of
responsibility over the activities in the vessel. Indeed, their position
requires the full trust and confidence of their employer for they are
entrusted with the custody, handling and care of company property and
exercise authority over it.
Thus, we find that there is some basis for the loss of
confidence reposed on Galvez and Gruta. The certification issued by De
la Rama stated that there is an overstatement of fuel
consumption. Notably, while respondents made self–serving allegations
that the computation made therein is erroneous, they never questioned
the competence of De la Rama to make such certification. Neither did
they question the authenticity and validity of the certification. Thus, the
fact that there was an overstatement of fuel consumption and that there
was loss of a considerable amount of diesel fuel oil remained
unrefuted. Their failure to account for this loss of company property
betrays the trust reposed and expected of them. They had violated
petitioners’ trust and for which their dismissal is justified on the ground of
breach of confidence.
As for Arguelles, Batayola, Fresnillo, Noble, Dominico,
Nilmao and Austral, proof of involvement in the loss of the vessel’s fuel
as well as their participation in the alleged theft is required for they are
ordinary rank and file employees. And as discussed above, no
substantial evidence exists in the records that would establish their
participation in the offense charged. This renders their dismissal illegal,
thus, entitling them to reinstatement plus full backwages, inclusive of
allowances and other benefits, computed from the time of their dismissal
up to the time of actual reinstatement.
94 Concepcion vs. Minex Import Corp., G.R. No. 153569, January 24,
2012
(CONVICTION OR ACQUITAL IS NOT A NECESSARY ELEMENT FOR
DISMISSAL BASED ON BREACH OF TRUST)
Facts:
Respondent is engaged in the retail of semi-precious stones,
selling them in kiosks or stalls installed in various shopping centers. It
employed the petitioner initially as a salesgirl then later on as supervisor.
Working under her supervision were salesgirls Cristina Calung and Lida
Baquilar.
One day the petitioner and her salesgirls had sales of crystal
items totaling P39,194.50. At the close of business that day, they
conducted a cashcount of their sales proceeds, including those from the
previous two days and determined their total for the three days to be
P50,912.00. The petitioner wrapped the amount in a plastic bag and
deposited it in the drawer of the locked wooden cabinet of the kiosk.
The following day petitioner phoned respondent Vina Mariano
to report that the P50,912.00 was missing, explaining how she and her
salesgirls had placed the wrapped amount at the bottom of the cabinet
the night before, and how she had found upon reporting to work that
morning that the contents of the cabinet were in disarray and the money.
Later, while the petitioner was giving a detailed statement on
the theft to the security investigator of Harrison Plaza, Vina and Sylvia
Mariano, her superiors, arrived with a policeman who immediately placed
the petitioner under arrest and brought her to a police station where she
was investigated her and detained for a day.
Subsequently petitioner filed a case for illegal dismissal against
respondent and two days later respondent filed a criminal case for
qualified theft against petitioner. The petitioner insisted on her innocence,
reiterating that on the time the alleged crime took place she, together
with her two salesgirls, had first counted the cash before placing it in a
plastic bag that she deposited inside the drawer of the cabinet with the
knowledge of the other salesgirls. One of the salesgirls however averred
that she had left the petitioner alone because the latter had still to change
her clothes; and that that was the first time that the petitioner had ever
asked to be left behind, for they had previously left the kiosk together.
Respondent Vina declared that the petitioner did not call the office of
Minex for the pick-up of the P39,194.50 cash sales on that faithful day in
violation of the standard operating procedure (SOP) requiring cash
proceeds exceeding P10,000.00 to be reported for pick-up if the amount
could not be deposited in the bank. After the preliminary investigation,
the fiscal rendered a resolution finding probable cause for qualified theft
and recommending the filing of an information against the petitioner.
Thus, she was charged with qualified theft before the Regional Trial
Court. The petitioner argued that there was no evidence at all upon which
Minex could validly dismiss her considering that she had not yet been
found guilty beyond reasonable doubt of the crime of qualified theft.
Issues:
Whether or not there was valid ground to terminate the
petitioner.
Ruling:
The petitioner’s argument is not novel. It has been raised and
rejected many times before on the basis that neither conviction beyond
reasonable doubt for a crime against the employer nor acquittal after
criminal prosecution was indispensable. Nor was a formal charge in court
for the acts prejudicial to the interest of the employer a pre-requisite for a
valid dismissal. The criminal charges initiated by the company against
private respondents and the finding after preliminary investigation of their
prima facie guilt of the offense charged constitute substantial evidence
sufficient to warrant a finding by the Labor Tribunal of the existence of a
just cause for their termination based on loss of trust and confidence.
The Labor Tribunal need not have gone further as to require
private respondent’s conviction of the crime charged, or inferred
innocence on their part from their release from detention, which was
mainly due to their posting of bail.
While there is a valid ground to terminate petitioner,
respondent however failed to comply with the requirements of due
process prior to the termination under the implementing rules and
regulations of the Labor Code.
In all cases of termination of employment, the following
standards of due process shall be substantially observed. For termination
of employment based on just causes as defined in Article 282 of the
Labor Code:
(i) A written notice served on the employee specifying the
ground or grounds for termination, and giving said employee reasonable
opportunity within which to explain his side.
(ii) A hearing or conference during which the employee
concerned, with the assistance of counsel if he so desires is given
opportunity to respond to the charge, present his evidence, or rebut the
evidence presented against him.
(iii) A written notice of termination served on the employee,
indicating that upon due consideration of all the circumstances, grounds
have been established to justify his termination.
In this case the respondents immediately had her arrested and
investigated by the police authorities for qualified theft which constitutes
a denial of her right to due process of law, consisting in the opportunity to
be heard and to defend herself. In fact, their decision to dismiss her was
already final even before the police authority commenced an
investigation of the theft, the finality being confirmed by no less than
Sylvia Mariano herself telling the petitioner during their phone
conversation following the latter’s release from police custody that she
(Sylvia) “no longer wanted to see” her.
The fact that the petitioner was the only person suspected of
being responsible for the theft aggravated the denial of due process.
95 Blue Sky Trading Co. vs. Blas, G.R. No. 190559, March 7, 2012
(BURDEN OF PROOF; SUBSTANTIAL EVIDENCE;)
Facts:
Petitioner Blue Sky Trading Company, Inc. (Blue Sky) is a duly
registered domestic corporation engaged in the importation and sale of
medical supplies and equipment. The respondents Arlene P. Blas
(Arlene) and Joseph D. Silvano (Joseph) were regular employees of Blue
Sky and they respectively held the positions of stock clerk and
warehouse helper before they were dismissed from service on February
5, 2005.
An incident occurred where six pairs of intensifying screens
were missing. On February 3, 2005, Jean B. De La Paz (Jean), Human
Resource Department Head issued notices to explain/preventive
suspension to Arlene, Joseph, delivery personnel Jayde Tano-an (Jayde)
and maintenance personnel/driver Wilfredo Fasonilao (Wilfredo). The
notices informed them that they were being accused of gross dishonesty
in connection with their alleged participation in and conspiracy with other
employees in committing theft against company property, specifically
relative to the loss of the six intensifying screens.
On February 5, 2005, Jean issued to Arlene, Joseph, Jayde
and Wilfredo notices of dismissal for cause stating therein that evidence
that they had conspired with each other to commit theft against company
property was too glaring to ignore. Blue Sky had lost its trust and
confidence on them and as an act of self-preservation, their termination
from service was in order.
On February 8, 2005, Arlene, Joseph, Helario, Jayde and
Wilfredo filed with the National Labor Relations Commission (NLRC) a
complaint for illegal dismissal and suspension, underpayment of overtime
pay, and non-payment of emergency cost of living allowance (ECOLA),
with prayers for reinstatement and payment of full backwages.
Meanwhile, an entrapment operation was conducted by the
police during which Jayde and Helario were caught allegedly attempting
to sell to an operative an ultrasound probe worth around P400,000.00
belonging to Blue Sky. Though eventually, Jayde and Helario executed
affidavits of desistance stating that their dismissal was for cause.
The Labor Arbiter denied the claims of the respondents of
illegal suspension and dismissal since they failed in their duties to
exercise utmost protection, care, or custody of respondent's property.
Hence, their dismissal from the service is warranted.
The first decision of the NLRC ruled that respondents were not
holding positions of trust and must therefore be reinstated and be paid
their backwages. Their second decision on the other hand reversed the
previous one which in turn reinstated the Labor Arbiter’s dismissal of the
complaint saying that respondents were holding positions of trust and
that the loss of the company’s property are substantially proven. The CA
on the other hand found merit on their claims, though found respondents
to have positions of trust and confidence, petitioner in this case failed to
sufficiently establish the charge against respondents which was the basis
for its loss of trust and confidence that warranted their dismissal.
Issue:
Whether or not respondents Blas and Silvano committed a
breach of trust
Ruling:
The rule is long and well settled that, in illegal dismissal cases
like the one at bench, the burden of proof is upon the employer to show
that the employee's termination from service is for a just and valid cause.
The employer's case succeeds or fails on the strength of its evidence
and not on the weakness of that adduced by the employee, in keeping
with the principle that the scales of justice should be tilted in favor of the
latter in case of doubt in the evidence presented by them. Often
described as more than a mere scintilla, the quantum of proof is
substantial evidence which is understood as such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion, even
if other equally reasonable minds might conceivably opine otherwise.
Failure of the employer to discharge the foregoing onus would mean that
the dismissal is not justified and therefore illegal.
We find no error in the CA's findings that the petitioners had
not adequately proven by substantial evidence that Arlene and Joseph
indeed participated or cooperated in the commission of theft relative to
the six missing intensifying screens so as to justify the latter's termination
from employment on the ground of loss of trust and confidence.
We note that the parties disagree as to what tasks were
actually and regularly performed by Arlene and Joseph. They are at odds
as to the issue of whether or not Arlene and Joseph had custody of the
missing screens. We observe though that neither of the parties presented
any documentary evidence, such as employment contracts, to establish
their claims relative to the actual nature of Arlene and Joseph's daily
tasks.
The petitioners also argue that if Arlene and Joseph had not
been grossly negligent in the performance of their duties, Blue Sky would
not have incurred the loss. We observe though that in the notices sent to
Arlene and Joseph, first charging them with theft, and later, informing
them of their dismissal from service, gross negligence was not stated
therein as a ground. Hence, Arlene and Joseph could not have defended
themselves against the charge of gross negligence. They cannot be
dismissed on that ground lest due process be violated.
Other Matters: (For Discussion Purposes)
Impropriety of the Preventive Suspension
The purpose of the suspension is to prevent an employee from
causing harm or injury to his colleagues and to the employer. The
maximum period of suspension is 30 days, beyond which the employee
should either be reinstated or be paid wages and benefits due to him.
While we do not agree with Blue Sky's subsequent decision to terminate
them from service, we find no impropriety in its act of imposing
preventive suspension upon the respondents since the period did not
exceed the maximum imposed by law and there was a valid purpose for
the same.
In lieu of reinstatement, separation pay If reinstatement proves
impracticable, and hardly in the best interest of the parties, perhaps due
to the lapse of time since the employee's
dismissal, or if the employee decides not to be reinstated, the latter
should be awarded separation pay in lieu of reinstatement.
In the case at bar, Arlene and Joseph were dismissed from
service on February 5, 2005. We find that the lapse of more than seven
years already renders their reinstatement impracticable. Further, from the
stubborn stances of the parties, to wit, the petitioners' insistence that
dismissal was valid on one hand, and the respondents' express prayer
for the payment of separation pay on the other, we find that
reinstatement would no longer be in the best interest of the contending
parties.
Liability of Corporate Officers
As a general rule, a corporate officer cannot be held liable for
acts done in his official capacity because a corporation, by legal fiction,
has a personality separate and distinct from its officers, stockholders,
and members. In illegal dismissal cases, corporate officers may only be
held solidarily liable with the corporation if the termination was done with
malice or bad faith. We find that the aforementioned circumstance did not
obtain in the case of Jose (vice-president) and Linda (secretary) relative
to Arlene and Joseph's dismissal from service.
96 Manila Electric Co. vs. Beltran, G.R. No. 173774, January 30, 2012
(FAILURE TO REMIT IN PROPER TIME; BURDEN OF PROOF)

Facts:
Beltran was employed by MERALCO and at the time material
to this case, she was holding the position of Senior Branch Clerk at
MERALCO’s Pasig branch. While rendering overtime work on September
28, 1996, a Saturday, Beltran accepted P15,164.48 from Collection
Route Supervisor Berlin Marcos (Marcos), which the latter received from
customer Andy Chang (Chang). The cash payment was being made in
lieu of a returned check earlier issued as payment for Chang’s electric
bill. Beltran received the payment and issued Auxiliary Receipt No.
87964 which she dated September 30, 1996, a Monday, instead of
September 28, 1996. This was done to show that it was an
accommodation, an accepted practice in the office. She thereafter placed
the money and the original auxiliary receipt and other documents
pertinent to the returned check underneath her other files inside the
drawer of her table.
Beltran, however, was only able to remit Chang’s payment on
January 13, 1997. Thus, in a Memorandum dated January 16, 1997, she
was placed under preventive suspension effective January 20, 1997
pending completion of an investigation. MERALCO considered as
misappropriation or withholding of company funds her failure to
immediately remit said payment in violation of its Code on Employee
Discipline.
Garcia, the Administrative Supervisor of MERALCO’s Pasig
branch, on the other hand, testified that while doing an accounting of all
outstanding returned checks sometime in December 1996, she noticed
that Chang’s returned check was missing. Upon further inquiry, she
discovered that Chang had already redeemed the returned check after
paying P15,164.48 to Beltran, who in turn issued an Auxiliary Receipt
dated September 30, 1996. It was also discovered that the payment has
not yet been remitted. This prompted her to inquire from Beltran on
January 7, 1997 about the supposed payment and immediately ordered
the remittance of the same. Beltran, however, failed to do so on that day
and even on the next day when she reported for work. Beltran
subsequently went on leave of absence on January 9 and 10, 1997. It
was only on January 13, 1997 that the money with the pertinent
documents was handed over. In a memorandum dated February 25,
1997, the investigator found Beltran guilty of misappropriating and
withholding Chang’s payment of P15,164.48 and recommended her
dismissal from service.
Beltran filed a complaint for illegal dismissal against
MERALCO. She argued that she had no intention to withhold company
funds. Besides, it was not her customary duty to collect and remit
payments from customers. She claimed good faith, believing that her
acceptance of Chang’s payment is considered goodwill in favor of both
MERALCO and its customer. If at all, her only violation was a simple
delay in remitting the payment, which caused no considerable harm to
the company.
In a Decision of the Labor Arbiter regarded the penalty of
dismissal as not commensurate to the degree of infraction committed as
there was no adequate proof of misappropriation on the part of Beltran. If
there was delay in Beltran’s remittance of Chang’s payment, it was
unintentional and same cannot serve as sufficient basis to conclude that
there was misappropriation of company funds. In fact, Beltran did not
even attempt to deny possession of, or refuse to hand in, the money.
The Labor Arbiter thus gave compassionate consideration for
the neglect to remit the money promptly, stating that it is excusable for
Beltran to commit lapses in her work due to serious family difficulties.
Upon appeal, the NLRC reversed the Labor Arbiter’s Decision
and dismissed Beltran’s complaint against MERALCO in its Decision. It
found that Beltran withheld company funds by failing to remit it for almost
four months. The NLRC thus ruled that MERALCO validly dismissed
Beltran from the service in the exercise of its inherent right to discipline
its employees.
When Beltran brought the case to the CA the NLRC’s ruling
was reversed. The CA instead agreed with the findings of the Labor
Arbiter that there were no serious grounds to warrant Beltran’s dismissal.
The CA held that the penalty of dismissal is harsh considering the
infraction committed and Beltran’s nine years of unblemished service
with MERALCO.
Issue:
Whether or not Beltran dismissal is valid finding that she is
guilty of withholding company funds.
Ruling:
Supreme Court support the CA’s finding that there are no
sufficient grounds to warrant Beltran’s dismissal. For loss of trust and
confidence to be a valid ground for dismissal, it 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. In addition, loss of trust and
confidence must rest on substantial grounds and not on the employer’s
arbitrariness, whims, caprices or suspicion.
In the case at bench, Beltran attributed her delay in turning
over Chang’s payment to her difficult family situation as she and her
husband were having marital problems and her child was suffering from
an illness. Admittedly, she was reminded of Chang’s payment by her
supervisor on January 7, 1997 but denied having been ordered to remit
the money on that day. She then reasoned that her continued delay was
caused by an inevitable need to take a leave of absence for her to attend
to the needs of her child who was suffering from asthma.
MERALCO cannot claim or conclude that Beltran misappropriated the
money based on mere suspicion. And even if Beltran delayed handing
over the funds to the company, MERALCO still has the burden of proof to
show clearly that such act of negligence is sufficient to justify termination
from employment. Beltran was remiss in her duties for her failure to
immediately turn over Chang’s payment to the company. Such
negligence, however, is not sufficient to warrant separation from
employment. To justify removal from service, the negligence should be
gross and habitual. “Gross negligence x x x is the want of even slight
care, acting or omitting to act in a situation where there is duty to act, not
inadvertently but willfully and intentionally, with a conscious indifference
to consequences insofar as other persons may be affected.” Habitual
neglect, on the other hand, connotes repeated failure to perform one’s
duties for a period of time, depending upon the circumstances. No
concrete evidence was presented by MERALCO to show that Beltran’s
delay in remitting the funds was done intentionally. Neither was it shown
that same is willful, unlawful and felonious contrary to MERALCO’s
finging as stated in the letter of termination it sent to Beltran. Surely,
Beltran’s single and isolated act of negligence cannot justify her
dismissal from service.
97
DOLORES T. ESGUERRA vs. VALLE VERDE COUNTRY CLUB, INC.
(COST CONTROL SUPERVISOR – 2ND CLASS OF POSITIONS OF
TRUST)
FACTS:
Valle Verde hired Esguerra as Head Food Checker and was pr
omoted to Cost Control Supervisor. The Management found out that proc
eeds had been remitted to the accounting department for an event were l
acking. There were also unauthorized charges of food on one of the parti
cipants. To resolve the issue, Valle Verde conducted an investigation; the
employees who were assigned in that event were summoned and made
to explain, in writing, what had transpired. A memorandum was sent to E
sguerra requiring her to show cause as to why no disciplinary action shou
ld be taken against her for the nonremittance of the Ballroom’s sales. Esg
uerra was placed under preventive suspension with pay, pending investig
ation. Unsatisfied with the explanation, Esguerra was terminated.
 Petitioner said that she couldn’t be dismissed on the ground of l
oss of trust and confidence for she was only a regular employee and did
not occupy a supervisory position vested with trust and confidence. Esgu
erra also questions the manner of dismissal since the notice was insuffici
ent since it failed to contain any intention to terminate her.
ISSUE:
 Whether or not intention to terminate should be included in the notice
of informing of charges against an employee.
 Whether or not Cost Control Supervisor can be dismissed on the gro
und of loss of trust and confidence.
HELD:
1.) No. The law does not require that an intention to terminate o
ne’s employment should be included in the first notice. It is enough that e
mployees are properly apprised of the charges brought against them so t
hey can properly prepare their defenses; it is only during the second notic
e that the intention to terminate one’s employment should be explicitly sta
ted.
The existence of an actual, formal “trialtype” hearing, although
preferred, is not absolutely necessary to satisfy the employee’s right to b
e heard. Esguerra was able to present her defenses; and only upon prop
er consideration of it did Valle Verde send the second memorandum term
inating her employment. Since Valle Verde complied with the twonotice r
equirement, no procedural defect exists in Esguerra’s termination.
2.) Esguerra held the position of Cost Control Supervisor and
had the duty to remit to the accounting department the cash sales procee
ds from every transaction she was assigned to. This is not a routine task
that a regular employee may perform; it is related to the handling of busin
ess expenditures or finances. For this reason, Esguerra occupies a positi
on of trust and confidence a position enumerated in the second class of p
ositions of trust(first is for the managerial employees). Any breach of the t
rust imposed upon her can be a valid cause for dismissal.
98
MANILA ELECTRIC COMPANY (MERALCO) vs. HERMINIGILDO H. D
EJAN
(BRANCH REPRESENTATIVE – HIGHEST DEGREE OF HONESTY)
FACTS:
Dejan was then Meralco’s branch representative in its San Ped
ro, Laguna branch. His work consisted of accepting payments of the requ
ired fees from applicants for electric service installation and issuing the c
orresponding meter sockets/bases after payment of a deposit, preceded
by an inspection of the premises to be energized by a Meralco field perso
nnel.
One afternoon, 20 pieces of meter sockets take out from the br
anch and was in possession of a Meralco field representative. Dejan was
asked to explain the incident.
Dejan received a letter charging him with the unauthorized taki
ng of 20 meter sockets, in violation of Section 7, paragraphs 4 and 11 of t
he Company Code of Employee Discipline, in relation to Article 282 of th
e Labor Code. In the Formal investigation, Dejan alleged that he released
the items even without authorization as it had been the accepted practic
e in the office, provided the deposit fee had been paid. Unconvinced, his
employment was terminated. NLRC and CA both ordered his reinstateme
nt.
ISSUE:
Whether or not an employee dismissed on the ground of loss of
trust and confidence should be reinstated as judicially ordered.
RULING:
No. Meralco cannot be blamed for losing its trust and confidenc
e in Dejan. He is no ordinary employee. As branch representative, “he wa
s principally charged with the function and responsibility to accept payme
nt of fees required for the installation of electric service and facilitate issu
ance of meter sockets.” The duties of his position require him to always a
ct with the highest degree of honesty, integrity and sincerity, as the comp
any puts it. In light of his fraudulent act, Meralco, an enterprise imbued wi
th public interest, cannot be compelled to continue Dejan’s employment,
as it would be inimical to its interest. Needless to say, “the law, in protecti
ng the rights of the laborer, authorizes neither oppression nor selfdestruct
ion of the employer.” For sure, Dejan was validly dismissed for serious mi
sconduct, and loss of trust and confidence.
99ROMEO E. PAULINO vs. NLRC and PHILIPPINE LONG DISTANCE
TELEPHONE COMPANY, INCORPORATED
(PROOF BEYOND REASONABLE DOUBT NOT REQUIRED;
ACQUITAL IMMATERIAL)
FACTS:
Members of the PNP, armed with a search warrant, searched t
he house of Paulino, Cable Splicer III of PLDT, found items belonging to
PLDT which was in there for 1 month and 11 days
Petitioner did not present any documents or requisition slips th
at would justify his possession of the materials. Consequently, PLDT cau
sed the filing of an Information for qualified theft against him. PLDT then
received a security report stating that petitioner had engaged in the illicit
disposal of its plant materials, which were recovered during the search co
nducted at his residence. He was then terminated.Three years later, after
the criminal case for qualified theft had been terminated for failure of the
prosecution to prove his guilt beyond reasonable doubt, petitioner filed a
Complaint for Illegal Dismissal which the Labor Arbiter .
ISSUE:
Whether or not an employee acquitted of the criminal charge ar
ising from the same incident which caused his dismissal, can be reinstate
d.
RULING:
No. The LA, the NLRC and the CA all acknowledged that, notwi
thstanding petitioner’s acquittal in the criminal case for qualified theft, res
pondent PLDT had adequately established the basis for the company’s lo
ss of confidence as a just cause to terminate petitioner. Since proof bey
ond reasonable doubt of an employee’s misconduct is not required in di
smissing an employee. Rather, as opposed to the “proof beyond reasona
ble doubt” standard of evidence required incriminal cases, labor suits req
uire only substantial evidence to prove the validity of the dismissal
However, assuming that he lawfully possessed the materials, P
LDT still had ample reason or basis to already distrust petitioner. For mor
e than a month, he did not even inform PLDT of the whereabouts of the p
lant materials. Instead, he stocked these materials at his residence even i
f they were needed in the daily operations of the company. In keeping wit
h the honesty and integrity demanded by his position, he should have tur
ned over these materials to the plant’s warehouse.
It would have been unfair for PLDT to keep petitioner in its emp
loy. Petitioner displayed actions that made him untrustworthy. Thus, as a
measure of selfprotection, PLDT validly terminated his services for seriou
s misconduct and loss of confidence.
100
VICENTE VILLANUEVA, JR. vs. NLRC THIRD DIVISION, MANILA EL
ECTRIC COMPANY
(ADDITIONAL GUIDELINES)
FACTS:
There was a report regarding “unusual contract modifications” i
n the transactions handled by Villanueva. There are discrepancies not co
vered by any receipt. Pursuant to the complaints, a field investigation wa
s conducted by the companydesignated investigator who was able to obt
ain sworn statements from nine (9) out of twenty four (24) complaining cu
stomers that it was Villanueva whom they have transacted with.
Meralco denied the request of Villanueva’s counsel to crossexa
mine the witnesses (complaining customers) who were not Meralco empl
oyees. He was then served a notice of termination.
ISSUE: Whether Petitioner was validly dismissed in the ground of wilful
breach of trust? YES!
RULING:
As a safeguard against employers who indiscriminately use loss of trust
and confidence to justify arbitrary dismissal of employees, the Court, in
addition to the above elements, came up with the following guidelines
for the application of the doctrine: (1) loss of confidence should not be
simulated; (2) it should not be used as a subterfuge for causes which are
improper, illegal or unjustified; (3) it may not be arbitrarily asserted in the
face of overwhelming evidence to the contrary; and (4) it must be
genuine, not a mere afterthought, to justify an earlier action taken in bad
faith.[21]
In this case, the above requisites have been met. Meralcos loss of trust
and confidence arising out of Villanuevas act of misappropriation of
company funds in the course of processing customer applications has
been proven by substantial evidence, thus, justified. Verily, the issuance
of additional receipts for excessive payments exacted from customers is
a willful breach of the trust reposed in him by the company.
One. Villanueva worked for Meralco as a Branch Representative whose
tasks included the issuance of Contracts for Electric Service after receipt
of the amount due for service connection from customers. Obviously, he
was entrusted not only with the responsibility of handling company funds
but also to cater to customers who intended to avail of Meralcos
services. This is nothing but an indication that trust and confidence were
reposed in him by the company.
Two. Villanuevas acts of issuing contracts indicating therein an amount
less than the actual payment made by the customers and, thereafter,
issuing a receipt in an attempt to document the discrepancy are certainly
work-related. This is, in fact, the core of his position as a Branch
Representative.
Three. Meralcos charge against Villanueva was adequately proven by
substantial evidence. The records provide an extensive showing of
evidence against Villanueva. The affidavits of co-employees and, more
especially those of the customers themselves, bear weight in establishing
the specific acts constituting the charge against him. In fact, no
inconsistencies among these statements were found. Villanueva likewise
failed to pose a plausible defense
Four. The breach of the companys trust in Villanueva was shown to
have been committed knowingly and willfully. The conscious design of
issuing another receipt to make it appear that there was a mistake in the
initial transaction with the customers exhibits a culpable act bordering on
dishonesty and deceit. If not for personal gain, why did Villanueva exact
from customers amounts in excess of what was required by the
company? What would have Villanueva done had the customers failed to
discover the discrepancy between the amount they paid and that
appearing in the receipts issued to them? Why were there no overages
reported to his branch supervisor with respect to excess payments which
were no longer questioned by the customers? These questions arise out
of the practice which unfortunately corrupted an employee like
Villanueva. These doubts sway the Court away from Villanuevas claim
that his errors were promptly corrected upon discovery.
7. ANALOGOUS CASES
A. SEXUAL HARRASMENT
101 CARLOS G. LIBRES vs. NLRC & NATIONAL STEEL
CORPORATION
(SEXUAL HARRASMENT = LACK OF TRUST AND CONFIDENCE)
FACTS:
Carlos G. Libres, an electrical engineer, was holding a
managerial position with National Steel Corporation (NSC) as Assistant
Manager. One day, he received a Notice of Investigation from his
immediate superior, requesting him to submit a written explanation
relative to the charge of sexual harassment made by Susan D. Capiral,
Hynsons secretary, allegedly committed by Libres, and subsequently to
answer clarificatory questions on the matter. The notice also warned him
that failure to file his written explanation would be construed as a waiver
of his right to be heard. Libres submitted his written explanation denying
the accusation against him and offering to submit himself for clarificatory
interrogation.
After deliberation, it was concluded that the charges against
petitioner constituted a violation of Item 2, Table V, of the Plants Rules
and Regulations. It opined that touching a female subordinates hand
and shoulder, caressing her nape and telling other people that
Capiral was the one who hugged and kissed or that she responded to
the sexual advances are unauthorized acts that damaged her honor.
Referring to the Manual of the Philippine Daily Inquirer in defining sexual
harassment, the MEC finally concluded that petitioners acts clearly
constituted sexual harassment as charged and recommended petitioners
suspension for thirty (30) days without pay. Libres filed a complaint for
illegal suspension and unjust discrimination against respondent NSC
ISSUE:
WON Libres was illegally suspended.
HELD:
NO. His suspension was both fitting and appropriate since it
singularly addressed the issue of a managerial employee committing
sexual harassment on a subordinate. It even invited the attention of the
Court to focus on sexual harassment as a just and valid cause for
termination.
Whereas petitioner Libres was only meted a 30-day
suspension by the NLRC, Villarama, in the other case was penalized with
termination. As Mr. Justice Puno elucidated, As a managerial employee,
petitioner is bound by more exacting work ethics. He failed to live up to
his higher standard of responsibility when he succumbed to his moral
perversity. And when such moral perversity is perpetrated against his
subordinate, he provides a justifiable ground for his dismissal for lack of
trust and confidence. It is the right, nay, the duty of every employer
to protect its employees from oversexed superiors. Public respondent
therefore is correct in its observation that the Labor Arbiter was in fact
lenient in his application of the law and jurisprudence for which petitioner
must be grateful and not gripe against.
102 DELFIN G. VILLARAMA vs. NLRC AND GOLDEN DONUTS, INC.
FACTS:
VILLARAMA was employed by GOLDEN DONUTS, INC., as its
Materials Manager. Villarama was charged with sexual harassment by
Divina Gonzaga, a clerk-typist assigned in his department. The
humiliating experience compelled her to resign from work. The letter
prompted the President of Golden Donuts, Inc., Prieto, to call Villarama
to a meeting. Villarama was then required to explain the letter against
him. It appears that petitioner agreed to tender his resignation. Private
respondent moved swiftly to separate petitioner. Thus, private
respondent approved petitioner's application for leave of absence with
pay from August 5-28, 1989. It also issued an inter-office memorandum
advising "all concerned" that petitioner was no longer connected with the
company. Mr. Prieto sent a letter to petitioner confirming their
agreement that petitioner would be officially separated from the private
respondent. However, Villarama had a change of mind. He sought
reconsideration of the management's decision to terminate him. For his
failure to tender his resignation, petitioner was dismissed by private
respondent. Feeling aggrieved, petitioner filed an illegal dismissal case
against private respondent.
ISSUE:
WON the cause of dismissal of complainant was valid.
HELD:
YES. The records show that petitioner was confronted with the
charge against him. Initially, he voluntarily agreed to be separated from
the company. He took a leave of absence preparatory to this separation.
This agreement was confirmed by the letter to him by Mr. Prieto
dated August 7, 1989. A few days after, petitioner reneged on the
agreement. He refused to be terminated on the ground that the
seriousness of his offense would not warrant his separation from service.
So he alleged in his letter to Mr. Prieto dated August 16, 1989. But even
in this letter, petitioner admitted his "error" vis-a-vis Miss Gonzaga. As a
manager, Petitioner should know the evidentiary value of his admissions.
Needless to stress, he cannot complain there was no valid cause for his
separation.
Moreover, loss of trust and confidence is a good ground for
dismissing a managerial employee. It can be proved by substantial
evidence which is present in the case at bench. As a managerial
employee, petitioner is bound by a more exacting work ethics. He failed
to live up to this higher standard of responsibility when he succumbed to
his moral perversity. And when such moral perversity is perpetrated
against his subordinate, he provides justifiable ground for his dismissal
for lack of trust and confidence. It is the right, nay, the duty of every
employer to protect its employees from over sexed superiors.
To be sure, employers are given wider latitude of discretion in
terminating the employment of managerial employees on the ground of
lack of trust and confidence.
103 ATTY. GRACE M. VELOSO & MA. JOEYLYNN B. QUIONES vs
JUDGE ANACLETO M. CAMINADE
(JUDGE; CODE OF JUDICIAL CONDUCT; PENALTY)
FACTS:
Atty. Veloso, a lawyer of the Public le discussing the case, she
was stunned when Judge Caminade suddenly placed his hand on her
right thigh and squeezed it. He then took her hand and kissed it. She
immediately stood up and headed towards the door leading to the staff
room. He, however, caught up with her and placed his hand on her
shoulder. Before she could open the door, Judge Caminade told her Kiss
ko bi (Let me kiss you). Atty. Veloso, who was so shocked, retorted Kalo-
od nimo Judge uy (You are so disgusting, Judge). She then opened the
door and went out of his chambers. Justice Morales found Judge
Caminade guilty of violating Canon 2 and Rule 2.01 of the Code of
Judicial Conduct and Canon 3 of the Canons of Judicial Ethics and
recommended that respondent be suspended for six months without pay.
ISSUE:
WON the suspension was proper.
HELD:
YES. Judge Caminades behavior must be sanctioned. We are
neither amused by his claims of innocent playfulness nor impressed by
his excessive display of congeniality. He acted beyond the bounds of
decency, morality and propriety. He failed to meet the standard of
conduct embodied in the Code of Judicial Conduct.
His abusive and distasteful acts unmistakably constituted
sexual harassment because they resulted in an intimidating, hostile, or
offensive environment for his female subordinates. Section 8 of Rule 140
of the Rules of Court, as amended, considers a violation of the Code of
Judicial Conduct as a serious offense. A respondent found guilty of a
serious charge may be meted the penalty of:
(1) dismissal from the service, forfeiture of all or part of the
benefits as the Court may determine, and disqualification from
reinstatement or appointment to any public office, including government-
owned or controlled corporations, provided, that the forfeiture of
benefits shall in no case include accrued leave credits;
(2) suspension from office without salary and other benefits
for more than three but notexceeding six months; or
(3) a fine of more than P20,000 but not exceeding P40,000.
104 ATTY. SUSAN M. AQUINO vs. HON. ERNESTO D. ACOSTA
(JUDGE; CASUAL BUSS ON CHEEKS; SH HOW COMMITTED?;
ELEMENTS OF SH)
FACTS:
Atty. Susan M. Aquino, Chief of the Legal and Technical Staff
of the Court of Tax Appeals (CTA), filed a complaint against Judge
Ernesto Acosta, Presiding Judge of the same court, with sexual
harassment under R.A. 7877 and violation of the Canons of Judicial
Ethics and Code of Professional Responsibility. Aquino alleged several
instances when respondent judge sexually harassed her. Respondent
judge denied complainants allegation that he sexually harassed her
six times. He claimed that he has always treated her with respect, being
the head of the CTA Legal Staff. In fact, there is no strain in their
professional relationship.
HELD:
The court found no convincing evidence to sustain
complainants charges. What we perceive to have been committed by
respondent judge are casual gestures of friendship and camaraderie,
nothing more, nothing less. In kissing complainant, we find no indication
that respondent was motivated by malice or lewd design. Evidently, she
misunderstood his actuations and construed them as work-related sexual
harassment under R.A. 7877. "A mere casual buss on the cheek is not
a sexual conduct or favor and does not fall within the purview of
sexual harassment under R.A. No. 7877. Section 3 (a) thereof provides,
towit:
Sec 3. Work, Education or Training - related Sexual
Harassment Defined. - Work, education or training-related sexual
harassment is committed by an employer, employee, manager,
supervisor, agent of the employer, teacher, instructor, professor, coach,
trainor, or any other person who, having authority, influence or moral
ascendancy over another in a work or training or education environment,
demands, requests or otherwise requires any sexual favor from the other,
regardless of whether the demand, request or requirement for
submission is accepted by the object of said Act.
a) In a work-related or employment environment, sexual
harassment is committed when:
1) The sexual favor is made as a condition in the
hiring or in the employment, re employment or continued
employment of said individual, or in granting said individual
favorable compensation, terms, conditions, promotions or
privileges; or the refusal to grant sexual favor results in limiting,
segregating or classifying the employee which in anyway would
discriminate, deprive or diminish employment opportunities or
otherwise adversely affect said employees;
2) The above acts would impair the employee's
right or privileges under existing labor laws; or
3) The above acts would result in an intimidating,
hostile, or offensive environment for the employee.

"Clearly, under the foregoing provisions, the elements of
sexual harassment are as follows:
1) The employer, employee, manager, supervisor,
agent of the employer, teacher, instructor, professor, coach,
trainor, or any other person has authority, influence or
moralascendancy over another;
2) The authority, influence or moral ascendancy
exists in a working environment;
3) The employer, employee, manager, supervisor,
agent of the employer,
Indeed, from the records on hand, there is no showing that
respondent judge demanded, requested or required any sexual favor
from complainant in exchange for favourable compensation, terms,
conditions, promotion or privileges specified under Section 3 of R.A.
7877. Nor did he, by his actuations, violate the Canons of Judicial Ethics
or the Code of Professional Responsibility.
105 Paiste v Mamenta, Jr.
(SH – POWER EXERCISED BY A SUPERIOR)
FACTS:
In an affidavit-complaint filed with the Office of the Chief
Justice, dated August 1 0, 2001, complainant Joanne S. Goltiao charged
him with gambling and drinking liquor during office hours, sexual
harassment, arrogance and acts unbecoming of a government official. In
another affidavit complaint filed with the Office of the Court Administrator,
dated August 28, 2001, the other complainant Jocelyn C. Paiste charged
him with conduct unbecoming of a public officer and with violation of the
AntiGraft and Corrupt Practices Act for his failure to issue official receipt.
The evidence shows that complainant Goltiao is a
Stenographer I of the MCTC of TayugSan Nicolas since 1 997. She
testified that on August 7, 2000, at about 3:00 p.m., a representative from
the Plaridel Insurance Co. came to their office seeking clearance. She
immediately prepared the necessary form and, together with the
representative, went to see respondent in the courtroom to obtain his
signature. When she asked him to sign the document, respondent, who
was at that time playing tong-its (a card game) at the lawyers table with
unnamed individuals, got angry and threw his cards. He shouted at her:
Why did you bring them with you? Did you like them to bring me to the
Supreme Court? She responded that such was not her intention and
reminded him of his requirement that he must first see the applicants
before he sign their clearance. He did not sign the clearance, sent then
out and shouted Bullshit ka! at her thrice. They all then went out of the
courtroom and proceeded back to the staff room. She went to her table
and buried her face in her hands, crying. Respondent followed her and
continued uttering unsavory remarks: Bullshit ka! Vulva of your mother!
Why did you take the client there and even raised your voice? (Bullshit
ka! Okinnam nga babai! Apay ta innalam dagita kliyente idiay sanak to
rinayawan!) She replied that her parents taught them not to answer back
at older people. He still shouted: Vulva of your mother! I wish you will
die now! Whom are you bragging of? We will try each other. (Okinnam
nga babai! Matay ka koma itattan! Apay sinno aya ti paglaslastog mo?
Sige, agpipinnadas tayo. ) Thereafter, he asked the utility aide to buy him
four bottles of beer.
Goltiao declared that her working relationship with the
respondent is sometimes good and sometimes bad because of his ill
temper. He easily gets mad at her even for small, trivial mistakes. This
situation started, according to her, when she told him to stop courting and
sending her love notes as she is already a married woman. She related
an incident which happened early one morning when he asked her to see
him inside the judges chamber. At that time, the designated judge was
not around. Once inside, she was told to sit in one of the chairs
in front of the judges table. The respondent, who was sitting at the judges
chair, then extended his hand to her, as if he wanted to shake her hands.
She reciprocated by extending her hands and jokingly put his hands on
her forehead (agmanmano). She afterwards tried to free her
hands off his but he would not let her. Instead, he told her, Wait for a
while, I would just like to tell you something. I love you, is that okay? Tell
me that you love me too. No strings attached. She retorted, As if you are
my father. Spurned, he got mad. This kind of incident happened at
least ten more times.
ISSUE:
Is he guilty of sexual harassment?
HELD:
Under the circumstances, we find respondent guilty of sexual
harassment. His severely outrageous acts, which are an affront to
women, constitute sexual harassment because they necessarily result in
an intimidating, hostile, and offensive working environment for his female
subordinates. He abused the power and authority he exercises over
them, which is the gravamen of the offense in sexual harassment.
Sexual harassment in the workplace is not about a man
taking advantage of a woman by reason of sexual desire it is about
power being exercised by a superior over his women subordinates.
That power emanates from the fact that he can remove them if they
refuse his amorous advances.
There is likewise sufficient evidence in A.M. No. P-03-1 697 to
hold respondent administratively liable for his failure to issue official
receipt after receiving court fees and for discourtesy. The testimony of
complainant Paiste is worthy of belief. We find her categorical and
consistent declarations credible, especially when viewed in the light of
the fact that no ill motive on her part was established. Against her
positive testimony, supported by documentary evidence based on official
court records, the mere uncorroborated denial of the respondent
deserves scant considerations.
The evidence shows that on April 21 , 2001 , complainant
Paiste gave to the respondent the amount of two thousand four hundred
pesos (P2,400.00) as bail bond of the accused in Criminal Case No.
7461 . When she asked for an official receipt, he told her to get it the
following Monday at the court. She sent an office representative that
Monday as told but respondent did not issue any receipt. Further
verification from the records of Criminal Case No. 7461 reveals that no
copy of the official receipt appears on file indicating that no receipt was
ever issued to complainant Paiste.
We also find the rude and boorish manner respondent treated
complainant Paiste and her client on April 3, 2001 uncalled for. His
demeanor bordered on arrogance. He made them wait for fifteen minutes
before he attended to their concern as they found him playing cards
and gambling. He was very irritable the whole time he was talking to
them. After he examined the record, he slammed it an told them to go to
the court at Rosales. He then got annoyed when they followed him. To
be sure, this is no way to treat court users. High strung and belligerent
behavior has no place in government, especially in the judiciary, where
the personnel are enjoined to act with self-restraint and civility at all
times, even when confronted with rudeness and insolence. They are
expected to extend prompt, courteous and adequate service to the
people. Such conduct is exacted from them so that they will earn and
keep societys high regard for and confidence in the judicial service.
Conduct violative of this standard quickly and surely corrodes respect for
the courts. It is the imperative and sacred duty of everyone charged with
the dispensation of justice, from the judge to the lowliest clerk, to
uphold the courts good name and standing as true temples of justice.
B. ABANDONMENT
106 JENNY M. AGABON and VIRGILIO C. AGABON VS NLRC &
RIVIERA HOME IMPROVEMENTS
(FACTORS; SUBCONTRACTING – CLEAR INTENTION TO SEVERE
EE-ER RELATIONSHIP)
FACTS:
Riviera Home Improvements, Inc. is engaged in the business of
selling and installing ornamental and construction materials. It employed
petitioners Virgilio Agabon and Jenny Agabon as gypsum board and
cornice installers until they were dismissed for abandonment of work.
Petitioners then filed a complaint for illegal dismissal and
payment of money claims. They assert that they were dismissed because
the private respondent refused to give them assignments unless they
agreed to work on a pakyaw basis when they reported for duty. They
did not agree on this arrangement because it would mean losing benefits
as Social Security System (SSS) members.
Private respondent, on the other hand, maintained that
petitioners were not dismissed but had abandoned their work. In fact,
private respondent sent two letters to the last known addresses of the
petitioners advising them to report for work. They even talked to Virgilio
Agabon to tell him about the new assignment at Pacific Plaza Towers
however, petitioners did not report for work because they had
subcontracted to perform installation work for another company.
Petitioners also demanded for an increase in their wage to P280.00 per
day. When this was not granted, petitioners stopped reporting for work
and filed the illegal dismissal case.
ISSUE:
WON Agabon’s termination was valid.
HELD:
YES. Abandonment 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. For a
valid finding of abandonment, these two factors should be present:
(1) the failure to report for work or absence without valid or
justifiable reason; and
(2) a clear intention to sever employer-employee relationship,
with the second as the more determinative factor which is manifested by
overt acts from which it may be deduced that the employees has no more
intention to work. The intent to discontinue the employment must be
shown by clear proof that it was deliberate and unjustified.
In this case, petitioners were frequently absent having
subcontracted for an installation work for another company.
Subcontracting for another company clearly showed the intention to
sever the employer-employee relationship with private respondent. This
was not the first time they did this. In January 1996, they did not report
for work because they were working for another company. Private
respondent at that time warned petitioners that they would be dismissed
if this happened again. Petitioners disregarded the warning and exhibited
a clear intention to sever their employer-employee relationship. The
record of an employee is a relevant consideration in determining the
penalty that should be meted out to him.
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.
107 E.G & I. CONSTRUCTION CORPORATION and EDSEL GALEOS,
Petitioners, v. ANANIAS P. SATO, NILO BERDIN, ROMEO M.
LACIDA, JR., and HEIRS OF ANECITO S. PARANTAR, SR., namely:
YVONNE, KIMBERLY MAE, MARYKRIS, ANECITO, JR., and JOHN
BRYAN, all surnamed PARANTAR, Respondents.
(BURDEN OF PROOF – EMPLOYER; BARRED FROM ENTERING
THE WORKPLACE; NOTICE TO RETURN TO WORK DOES NOT
CONSTITUTE ABANDONEMENT)
FACTS:
Respondent Ananias P. Sato was hired by petitioner E.G. & I.
Construction Corporation as a grader operator, which is considered as
technical labor. He held the position for more than thirteen (13) years. In
2004, Sato discovered that petitioner corporation had not been remitting
his premium contributions to the Social Security System (SSS). When
Sato kept on telling petitioners to update his premium contributions, he
was removed as a grader operator and made to perform manual labor,
such as tilling the land in a private cemetery and/or digging earthworks in
petitioner corporations construction projects. Thereafter, an inspection
team from the SSS went to petitioner corporations office to check its
compliance with the SSS law. Petitioners told Sato that they could no
longer afford to pay his wages, and he was advised to look for
employment in other construction companies. Sato, however, found
difficulty in finding a job because he had been blacklisted in other
construction companies and was prevented from entering the project
sites of petitioners.
Respondent Nilo Berdin was hired by petitioners as a
steelman/laborer; respondent Anecito S. Parantar, Sr. hired as a
steelman; and respondent Romeo M. Lacida, Jr. was as a laborer. At
the start of their employment, they were required by petitioners to sign
several documents purporting to be employment contracts. They
immediately signed the documents without verifying their contents for
fear of forfeiting their employment.
They were tasked to set up steel bars used in the building
foundation, to mix cement, and to perform other tasks required of them
by petitioners.
The project engineer of respondents Berdin, Parantar, and
Lacida instructed them to affix their signatures on various documents.
They refused to sign the documents because they were written in
English, a language that they did not understand. Irked by their
disobedience, the project engineer terminated their employment. On the
same date, they were given their weekly wages. However, the wages
that were paid to them were short of three (3) days worth of wages, as
penalty for their refusal to sign the documents. The following day, they
were not allowed to enter the work premises.
Respondents filed their respective complaints with the Regional
Arbitration Branch of Cebu City for illegal dismissal, underpayment of
wages (wage differentials), holiday pay, thirteenth (13th) month pay, and
service incentive leave pay.
The Labor Arbiter held that the respondents were illegally
dismissed from employment. In lieu of reinstatement, due to the strained
relations of the parties and as prayed for by respondents, each of them
was granted separation pay equivalent to one (1) month pay for every
year of service. The Labor Arbiter likewise awarded respondents claim
for wage differentials, 13th month pay, holiday pay, and service incentive
leave pay.
On appeal, the NLRC, reversed the Labor Arbiters decision.
In reversing the decision of the Labor Arbiter, the NLRC
ratiocinated that, other than respondents bare allegation that they were
dismissed, they failed to present a written notice of dismissal, and that
respondents individual complaints opted for the payment of separation
pay instead of reinstatement. The NLRC opined that illegal dismissal was
inconsistent with the prayer for separation pay instead of reinstatement.
Respondents filed an MR but the same was denied.
Aggrieved, respondents filed a petition for certiorari under Rule
65 of the Rules of Court before the CA.
The CA reinstated the decision of the Labor Arbiter ruling that
respondents were illegally dismissed. Hence, this petition.
ISSUE:
 Whether the CA erred in reinstating the decision of the Labor
Arbiter, declaring that respondents were illegally terminated from
employment by petitioner corporation, and that respondents are entitled
to their monetary claims.
HELD:
The decision of the Court of Appeals is sustained.
LABOR LAW
Petitioner corporation failed to prove that respondents were
dismissed for just or authorized cause. In an illegal dismissal case, the
onus probandi rests on the employer to prove that the dismissal of an
employee is for a valid cause.
For abandonment to exist, it is essential (a) that the employee
must have failed to report for work or must have been absent without
valid or justifiable reason; and (b) that there must have been a clear
intention to sever the employer-employee relationship manifested by
some overt acts. The employer has the burden of proof to show the
employee's deliberate and unjustified refusal to resume his
employment without any intention of returning. Mere absence is not
sufficient. There must be an unequivocal intent on the part of the
employee to discontinue his employment. Uniwide Sales Warehouse
Club v. National Labor Relations Commission, G.R. No. 154503,
February 29, 2008
The reason why respondents failed to report for work was
because petitioner corporation barred them from entering its construction
sites. It is a settled rule that failure to report for work after a notice to
return to work has been served does not necessarily constitute
abandonment. The intent to discontinue the employment must be shown
by clear proof that it was deliberate and unjustified. Petitioner corporation
failed to show overt acts committed by respondents from which it may be
deduced that they had no more intention to work. Respondents filing of
the case for illegal dismissal barely four (4) days from their alleged
abandonment is totally inconsistent with our known concept of what
constitutes abandonment.
LABOR LAW
Even as the employee must allege non-payment, the general
rule is that the burden rests on the employer to prove payment, rather
than on the employee to prove non-payment. The reason for the rule is
that the pertinent personnel files, payrolls, records, remittances, and
other similar documents which will show that overtime, differentials,
service incentive leave, and other claims of the worker have been paid
are not in the possession of the worker but in the custody and absolute
control of the employer. Agabon v.NLRC, G.R. No. 158693, November
17, 2004
In this case, the submission of petitioner corporation of the time
records and payrolls of respondents only on their appeal before the
NLRC is contrary to elementary precepts of justice and fair play.
Respondents were not given the opportunity to check the authenticity
and correctness of the same. Thus, we sustain the ruling of the CA in the
grant of the monetary claims of respondents.
DENIED.
108 HARPOON MARINE SERVICES, INC., ET AL.., Petitioner, v.
FERNAN H. FRANCISCO, Respondents.
(3 DAYS ABSENT – NOT HABITUAL ABSENCE)
FACTS:
Harpoon Marine Services hired Francisco as a Yard
Supervisor. On June 15, 2001, Francisco averred that Harpoon
dismissed him from work but promised to pay his separation pay and
accrued commissions. He continued reporting for work, but was barred
from entering the premises. He thereafter tried to claim his separation
pay and commissions, but Harpoon, through its president Rosit, denied
payment of his commissions. Refusing to sign a quitclaim, Francisco
demanded payment of his commissions, then filed a case before the
Labor Arbiter for illegal dismissal. He supported his claim for
commissions with two vouchers evidencing payments for vessel repairs,
arguing that he has paid P10,000 for each vessel he repaired.
Harpoon averred that on June 15, 2001, Rosit merely met with
Francisco to warn him regarding his habitual absences and tardiness.
When Francisco continued to be absent, Harpoon sent him memoranda
informing him of his absences, which were filed with the DOLE on August
15, 2001. Francisco was then terminated on July 30, 2001. With regard
to the commissions claimed, Harpoon averred that Francisco was only a
regular employee, with a regular salary, and that the supposed
"commissions" were merely additional money recognizing Franciscos
efforts.
The Labor Arbiter ruled that Francisco was legally dismissed
and that due process was served through the several memoranda sent to
him. It also ruled that commissions were due Francisco, and gave
credence to the vouchers. The NLRC, however, held that Francisco was
illegally dismissed, for his timecard for June 2001 only showed three
absences, which could hardly be called habitual and therefore cannot be
a ground for termination. It upheld the Labor Arbiter with regard to the
commissions. The CA affirmed the NLRC, and held that Harpoon
president Rosit should be solidarily liable with the company.
ISSUES:
1. Whether or not Francisco was illegally dismissed
2. Whether or not he was entitled to his commissions
3. Whether Rosit is solidarily liable with Harpoon
HELD:
The petition is partly meritorious.
LABOR LAW: Termination of employment; liability of
corporate officers.
First issue: The SC held that the termination was illegal. As
stated by the NLRC, Franciscos timecard only showed three consecutive
absences and no record of tardiness, which hardly constitutes gross or
habitual absence/tardiness. Moreso, the reasons for Franciscos three-
day absence were not contested by Harpoon before the Labor Arbiter,
and no other evidence was presented before the Labor Arbiter to prove
such "habitual" tardiness/absence. The argument that Francisco
abandoned his work and went AWOL also does not hold water, since
Harpoon failed to prove that the two elements of work abandonment
existed: namely, that there is absence of failure to report to work for no
justifiable reason, and that there is intent to sever the employee-
employer relationship. Here, Harpoon failed to prove that it was
respondent who voluntarily refused to report back for work by his
defiance and refusal to accept the memoranda and the notices of
absences sent to him. Harpoon failed to present evidence that they sent
these notices to respondents last known address for the purpose of
warning him that his continued failure to report would be construed as
abandonment of work. Verily, an absence of three days does not
constitute habitual absence justifying a termination from work.
Second issue: The SC held that Francisco was not entitled to
the commissions. The check vouchers contained very scant details and
did not state that they were paid for the construction or repair of a vessel.
They did not state the purpose for which the amounts were paid.
Moreover, the list of vessels presented with the vouchers does not
validate Franciscos monetary claim for it only contains a list of vessels,
and nothing more. The vouchers patent vagueness makes them
unreliable as a basis for Franciscos claim of commissions. Entitlement to
commissions cannot be proved by vouchers which are silent as to the
purpose for which they are issued.
Third issue: The SC disagrees with the Labor Arbiter and
NLRC in according solidary liability on Rosit and Harpoon for the illegal
dismissal. As held in the case of MAM Realty Development Corporation
v. National Labor Relations Commission, "obligations incurred by
[corporate officers], acting as such corporate agents, are not theirs but
the direct accountabilities of the corporation they represent." As such,
they should not be generally held jointly and solidarily liable with the
corporation. The Court, however, cited circumstances when solidary
liabilities may be imposed, as when the officer acted in bad faith or gross
negligence in handling corporate affairs. Here, the CA imposed personal
liability on Rosit based on bad faith, even though there was no proof that
Rosit acted with bad faith or outside of his authority as company
president. At most, his acts merely showed the absence of a just or valid
cause in terminating the employment of Francisco.
Petition is PARTLY GRANTED.
109 Alert Security and Investigation Agency vs. Pasawilan
(FAILURE TO NOTIFY EMPLOYEES OF NEW ASSIGNMENTS; NO
ABANDONMENT)
Facts:
Respondents Saidali Pasawilan, Wilfredo Verceles and
Melchor Bulusan were all employed by petitioner Alert Security and
Investigation Agency, Inc. (Alert Security) as security guards beginning
March 31, 1996, January 14, 1997, and January 24, 1997, respectively.
They were paid 165.00 pesos a day as regular employees, and assigned
at the Department of Science and Technology (DOST) pursuant to a
security service contract between the DOST and Alert Security.
Respondents aver that because they were underpaid, they filed
a complaint for money claims against Alert Security and its president and
general manager, petitioner Manuel D. Dasig, before Labor Arbiter Ariel
C. Santos. As a result of their complaint, they were relieved from their
posts in the DOST and were not given new assignments despite the
lapse of six months. On January 26, 1999, they filed a joint complaint for
illegal dismissal against petitioners.
Petitioners, on the other hand, deny that they dismissed the
respondents. Petitioners presented "Duty Detail Orders" that Alert
Security issued to show that respondents were in fact assigned to LRTA.
Respondents, however, failed to report at the LRTA and instead kept
loitering at the DOST and tried to convince other security guards to file
complaints against Alert Security. Thus, on August 3, 1998, Alert Security
filed a "termination report" with the Department of Labor and Employment
relative to the termination of the respondents.
Issue:
Whether respondents were illegally dismissed
Rulings:
We rule in the affirmative.
As a rule, employment cannot be terminated by an employer
without any just or authorized cause. No less than the 1987 Constitution
in Section 3, Article 13 guarantees security of tenure for workers and
because of this, an employee may only be terminated for just or
authorized causes that must comply with the due process requirements
mandated by law. Hence, employers are barred from arbitrarily removing
their workers whenever and however they want. The law sets the valid
grounds for termination as well as the proper procedure to take when
terminating the services of an employee.
Although we recognize the right of employers to shape their
own work force, this management prerogative must not curtail the basic
right of employees to security of tenure. There must be a valid and lawful
reason for terminating the employment of a worker. Otherwise, it is illegal
and would be dealt with by the courts accordingly.
The Labor Code, as amended, enumerates several just and
authorized causes for a valid termination of employment. An employee
asserting his right and asking for minimum wage is not among those
causes. Dismissing an employee on this ground amounts to retaliation by
management for an employee’s legitimate grievance without due
process. Such stroke of retribution has no place in Philippine Labor
Laws.
On the element of the failure of the employee to report for
work, we also cannot accept the allegations of petitioners that
respondents unjustifiably refused to report for duty in their new posts. A
careful review of the records reveals that there is no showing that
respondents were notified of their new assignments. Granting that the
"Duty Detail Orders" were indeed issued, they served no purpose unless
the intended recipients of the orders are informed of such.
The employer cannot simply conclude that an employee is ipso
facto notified of a transfer when there is no evidence to indicate that the
employee had knowledge of the transfer order. Hence, the failure of an
employee to report for work at the new location cannot be taken against
him as an element of abandonment.
We acknowledge and recognize the right of an employer to
transfer employees in the interest of the service. This exercise is a
management prerogative which is a lawful right of an employer.
However, like all rights, there are limitations to the right to transfer
employees. As ruled in the case of Blue Dairy Corporation v. NLRC:
x x x 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. x x x
In addition to these tests for a valid transfer, there should be
proper and effective notice to the employee concerned. It is the
employer’s burden to show that the employee was duly notified of the
transfer. Verily, an employer cannot reasonably expect an employee to
report for work in a new location without first informing said employee of
the transfer. Petitioners’ insistence on the sufficiency of mere issuance of
the transfer order is indicative of bad faith on their part.
110 POLYFOAM-RGC INTERNATIONAL, CORPORATION and
PRECILLA A. GRAMAJE, Petitioners, v.EDGARDO CONCEPCION,
Respondent.
(LABOR-ONLY; IMMEDIATE ACTION BY EMPLOYEE NEGATES
INTENTION TO SEVERE EE-ER RELATIONSHIP)
FACTS:
In his February 08, 2000 complaint for illegal dismissal against
Polyfoam and Natividad Cheng, Edgardo Concepcion alleged that he
was hired by Polyfoam as an "all-around" factory worker and served as
such for almost six years. On January 14, 2000, he allegedly discovered
that his time card was not in the rack and was later informed by the
security guard that he could no longer punch his time card. When he
protested to his supervisor, the latter allegedly told him that the
management decided to dismiss him due to an infraction of a company
rule. Cheng, the company manager, also refused to face him.
Respondent counsel later wrote a letter to Polyfoam manager requesting
that respondent be re-admitted to work, but the request remained
unheeded prompting the latter to file the complaint for illegal dismissal.
On April 28, 2000, Gramaje filed a Motion for Intervention
claiming to be the real employer of respondent. On the other hand,
Polyfoam and Cheng filed a Motion to Dismiss on the grounds that the
NLRC has no jurisdiction over the case, because of the absence of
employer-employee relationship between Polyfoam and respondent and
that the money claims had already prescribed.
On May 24, 2000, Labor Arbiter Adolfo Babiano issued an
Order granting Gramaje motion for intervention, it appearing that she is
an indispensable party and denying Polyfoam and Cheng motion to
dismiss as the lack of employer-employee relationship is only a matter of
defense.
In their Position Paper, Polyfoam and Cheng insisted that the
NLRC has no jurisdiction over the case, because respondent was not
their employee. They likewise contended that respondent money claims
had already prescribed. Finally, they fault respondent for including Cheng
as a party-defendant, considering that she is not even a director of the
company.
In her Position Paper,Gramaje claimed that P.A. Gramaje
Employment Services (PAGES) is a legitimate job contractor who
provided some manpower needs of Polyfoam. It was alleged that
respondent was hired as "packer" and assigned to Polyfoam, charged
with packing the latter finished foam products. She argued, however, that
respondent was not dismissed from employment, rather, he simply
stopped reporting for work.
On December 14, 2001, Labor Arbiter rendered a Decision
finding respondent to have been illegally dismissed from employment
and holding Polyfoam and Gramaje/PAGES solidarily liable for
respondent money claims.
On appeal by petitioners, the NLRC modified the LA decision
by exonerating Polyfoam from liability for respondent claim for separation
pay and deleting the awards of backwages, 13th month pay, damages,
and attorney fees.
Aggrieved, respondent elevated the case to the CA in a special
civil action for certiorari under Rule 65 of the Rules of Court. On
December 19, 2005, the appellate court granted the petition. The CA
agreed with the LA conclusion that Gramaje is not a legitimate job
contractor but only a "labor-only" contractor. The appellate court affirmed
the LA findings of illegal dismissal as respondent was dismissed from the
service without cause and due process.Consequently, separation pay in
lieu of reinstatement was awarded. The CA quoted with approval the LA
conclusions on the award of respondent other money claims.
ISSUES:
1. Whether or not Gramaje is an independent job contractor?
2. Whether or not respondent was illegally dismissed from
employment?
HELD:
The decision of the Court of Appeals is affirmed.
Gramaje is a Labor-Only Contractor - Article 106 of the
Labor Code explains the relations which may arise between an employer,
a contractor, and the contractor employees, thus:
ART. 106. Contractor or subcontracting. − Whenever an
employer enters into a contract with another person for the performance
of the former work, the employees of the contractor and of the latter
subcontractor, if any, shall be paid in accordance with the provisions of
this Code.
In the event that the contractor or subcontractor fails to pay the
wages of his employees in accordance with this Code, the employer shall
be jointly and severally liable with his contractor or subcontractor to such
employees to the extent of the work performed under the contract, in the
same manner and extent that he is liable to employees directly employed
by him.
The Secretary of Labor and Employment may, by appropriate
regulations, restrict or prohibit the contracting out of labor to protect the
rights of workers established under the Code. In so prohibiting or
restricting, he may make appropriate distinctions between labor-only
contracting and job contracting as well as differentiations within these
types of contracting and determine who among the parties involved shall
be considered the employer for purposes of this Code, to prevent any
violation or circumvention of any provision of this Code.
There is labor-only contracting where the person supplying
workers to an employer does not have substantial capital or investment
in the form of tools, equipment, machineries, work premises, among
others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal business of
such employer. In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall be responsible
to the workers in the same manner and extent as if the latter were
directly employed by him.
The test of independent contractorship is "whether one
claiming to be an independent contractor has contracted to do the work
according to his own methods and without being subject to the control of
the employer, except only as to the results of the work." In San Miguel
Corporation v. Semillano, the Court laid down the criteria in determining
the existence of an independent and permissible contractor relationship,
to wit:
x x x [W]hether or not the contractor is carrying on an
independent business; the nature and extent of the work; the skill
required; the term and duration of the relationship; the right to assign the
performance of a specified piece of work; the control and supervision of
the work to another; the employer power with respect to the hiring, firing
and payment of the contractor workers; the control of the premises; the
duty to supply the premises, tools, appliances, materials, and labor; and
the mode, manner and terms of payment.
Simply put, the totality of the facts and the surrounding
circumstances of the case are to be considered. Each case must be
determined by its own facts and all the features of the relationship are to
be considered.
Applying the foregoing tests, we agree with the CA conclusion
that Gramaje is not an independent job contractor, but a "labor-only"
contractor.
First, Gramaje has no substantial capital or investment. The
presumption is that a contractor is a labor-only contractor unless he
overcomes the burden of proving that it has substantial capital,
investment, tools, and the like. The employee should not be expected to
prove the negative fact that the contractor does not have substantial
capital, investment and tools to engage in job-contracting.
Gramaje claimed that it has substantial capital of its own as
well as investment in its office, equipment and tools. She pointed out that
she furnished the plastic containers and carton boxes used in carrying
out the function of packing the mattresses of Polyfoam. She added that
she had placed in Polyfoam workplace ten (10) sealing machines, twenty
(20) hand trucks, and two (2) forklifts to enable respondent and the other
employees of Gramaje assigned at Polyfoam to perform their job. Finally,
she explained that she had her own office with her own staff. However,
aside from her own bare statement, neither Gramaje nor Polyfoam
presented evidence showing Gramaje ownership of the equipment and
machineries used in the performance of the alleged contracted job.
Considering that these machineries are found in Polyfoam premises,
there can be no other logical conclusion but that the tools and equipment
utilized by Gramaje and her "employees" are owned by Polyfoam.
Neither did Polyfoam nor Gramaje show that the latter had clients other
than the former. Since petitioners failed to adduce evidence that Gramaje
had any substantial capital, investment or assets to perform the work
contracted for, the presumption that Gramaje is a labor-only contractor
stands.
Second, Gramaje did not carry on an independent business or
undertake the performance of its service contract according to its own
manner and method, free from the control and supervision of its principal,
Polyfoam, its apparent role having been merely to recruit persons to work
for Polyfoam.It is undisputed that respondent had performed his task of
packing Polyfoam foam products in Polyfoam premises. As to the
recruitment of respondent, petitioners were able to establish only that
respondent application was referred toGramaje, but that is all. Prior to his
termination, respondent had been performing the same job in Polyfoam
business for almost six (6) years. He was even furnished a copy of
Polyfoam "Mga Alituntunin at Karampatang Parusa,"which embodied
Polyfoam rules on attendance, the manner of performing the employee
duties, ethical standards, cleanliness, health, safety, peace and order.
These rules carried with them the corresponding penalties in case of
violation.
While it is true that petitioners submitted the Affidavit of
Polyfoam supervisor Victor Abadia, claiming that the latter did not
exercise supervision over respondent because the latter was not
Polyfoam but Gramaje employee, said Affidavit is insufficient to prove
such claim. Petitioners should have presented the person who they claim
to have exercised supervision over respondent and their alleged other
employees assigned toPolyfoam. It was never established that Gramaje
took entire charge, control and supervision of the work and service
agreed upon. And as aptly observed by the CA, "it is likewise highly
unusual and suspect as to the absence of a written contract specifying
the performance of a specified service, the nature and extent of the
service or work to be done and the term and duration of the relationship."
A finding that a contractor is a "labor-only" contractor, as
opposed to permissible job contracting, is equivalent to declaring that
there is an employer-employee relationship between the principal and the
employees of the supposed contractor, and the "labor-only" contractor is
considered as a mere agent of the principal, the real employer. In this
case, Polyfoam is the principal employer and Gramaje is the labor-only
contractor. Polyfoam and Gramaje are, therefore, solidarily liable for the
rightful claims of respondent.
Respondent was Illegally Dismissed From Employment -
Respondent stated that on January 14, 2000, his time card was suddenly
taken off the rack. His supervisor later informed him that Polyfoam
management decided to dismiss him due to infraction of company rule. In
short, respondent insisted that he was dismissed from employment
without just or lawful cause and without due process. Polyfoam did not
offer any explanation of such dismissal. It, instead, explained that
respondent real employer is Gramaje. Gramaje, on the other hand,
denied the claim of illegal dismissal. She shifted the blame on
respondent claiming that the latter in fact abandoned his work.
The LA gave credence to respondent narration of the
circumstances of the case. Said conclusion was affirmed by the CA. We
find no reason to depart from such findings.
Abandonment cannot be inferred from the actuations of
respondent. When he discovered that his time card was off the rack,
he immediately inquired from his supervisor. He later sought the
assistance of his counsel, who wrote a letter addressed to Polyfoam
requesting that he be re-admitted to work. When said request was
not acted upon, he filed the instant illegal dismissal case. These
circumstances clearly negate the intention to abandon his work.
Petitioners failed to show any valid or authorized cause under
the Labor Code which allowed it to terminate the services of respondent.
Neither was it shown that respondent was given ample opportunity to
contest the legality of his dismissal. No notice of termination was given to
him. Clearly, respondent was not afforded due process. Having failed to
establish compliance with the requirements of termination of employment
under the Labor Code, the dismissal of respondent was tainted with
illegality. Consequently, respondent is 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 up to
the time of his actual reinstatement. However, if reinstatement is no
longer feasible as in this case, separation pay equivalent to one-month
salary for every year of service shall be awarded as an alternative. Thus,
the CA is correct in affirming the LA award of separation pay with full
backwages and other monetary benefits.
DENIED
C. CONFLICT OF INTEREST
111 GT PRINTERS and/or TRINIDAD G. BARBA vs. NLRC and
EDWIN RICARDO
(COI – HABITUAL NEGLECT AND BREACH OF TRUST)
FACTS:
Edwin Ricardo, was employed in 1968 as an apprentice of GT
Printers. He was promote to the position of production manager of GT
Printers and became general manager. In February, 1985, Ricardo's wife
established Insta Printers, a rival printing press, with Edwin Ricardo
himself as consultant and owner. Since the establishment of Insta
Printers, Ricardo became a habitual absentee from his job at GT
Printers. He neglected his duties and responsibilities, and became lax in
directing and supervising the work force, resulting in numerous major
printing errors and failure to meet printing specifications leading to the
rejection of several job orders from regular customers. Mrs. Barba
noticed that Ricardo not only used GT Printers' bookcloth and other
printing materials for his Insta Printers, but he also gave specific
instructions to the production staff to give priority to book and magazine
job orders for Insta Printers. Eventually, the regular customers of GT
Printers were pirated by Insta Printers. Ricardo also manipulated price
quotations during the canvassing of bids to favor his own outfit instead of
GT Printers. Because of those irregularities, GT Printers suspended
Ricardo as general manager for 30 days. Richard Barba was designated
to take his place. Contracts concluded by respondent Ricardo thereafter
were no longer honored. However, he continued to be a sales agent for
GT Printers, hence, he continued to receive commissions. He stopped
reporting for work and soon after filed a complaint for illegal dismissal.
ISSUE:
WON Ricardo was lawfully dismissed from employment.
HELD:
YES. The security of tenure accorded to labor under the
Constitution does not embrace infractions of accepted company rules
amounting to breach of trust and loss of confidence. The right of an
employer to dismiss a managerial employee for breach of trust and loss
of confidence, as in this case, cannot be doubted. As a measure of self-
preservation against acts inimical to its interests, an employer has the
right to dismiss an employee found committing acts of dishonesty and
disloyalty. The employer may not be compelled to continue to employ
such a person whose continuance in the service would patently be
inimical to his employer's interest. The dismissal of a dishonest employee
is in the best interest not only of management but also of labor for the law
never intended to impose an unjust situation on either labor or
management. Reinstatement would be ill-advised and incompatible with
the labor arbiter's finding that "from those documentary evidences
presented by respondent, it can be safely conclude[d] that . . . there
exist visible conflict of interest amounting to willful breach of trust
and confidence repose (sic) upon him by his employer, . . as well as
(b) habitual neglect of his duties . . ."
112 DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO
A. TECSON vs. GLAXO WELLCOME PHILIPPINES, INC.
(MARRIAGE TO AN EMPLOYEE OF A COMPETITOR’S COMPANY)
FACTS:
Pedro A. Tecson (Tecson) was hired by respondent Glaxo
Wellcome Philippi nes, Inc. (Glaxo) as medical representative. Tecson
signed a contract of employment which stipulates, among others, that
he agrees to study and abide by existing company rules; to disclose to
management any existing or future relationship by consanguinity or
affinity with co-employees or employees of competing drug companies
and should management find that such relationship poses a possible
conflict of interest, to resign from the company. Tecson was initially
assigned to market Glaxos products in the Camarines Sur-Camarines
Norte sales area. Subsequently, Tecson entered into a romantic
relationship with Bettsy, an employee of Astra Pharmaceuticals (Astra), a
competitor of Glaxo. Bettsy was Astras Branch Coordinator in Albay.
She supervised the district managers and medical representatives of her
company and prepared marketing strategies for Astra in that area. Even
before they got married, Tecson received several reminders from his
District Manager regarding the conflict of interest which his relationship
with Bettsy might engender. Still, Tecson married Bettsy. Tecsons
superiors informed him that his marriage to Bettsy gave rise to a conflict
of interest.
HELD:
Glaxos policy prohibiting an employee from having a
relationship with an employee of a competitor company is a valid
exercise of management prerogative. Glaxo has a right to guard its trade
secrets, manufacturing formulas, marketing strategies and other
confidential programs and information from competitors, especially so
that it and Astra are rival companies in the highly competitive
pharmaceutical industry. The prohibition against personal or marital
relationships with employees of competitor companies upon Glaxos
employees is reasonable under the circumstances because relationships
of that nature might compromise the interests of the company. Glaxo only
aims to protect its interests against the possibility that a competitor
company will gain access to its secrets and procedures. Glaxo
possesses the right to protect its economic interests cannot be denied.
No less than the Constitution recognizes the right of enterprises to adopt
and enforce such a policy to protect its right to reasonable returns on
investments and to expansion and growth. Indeed, while our laws
endeavor to give life to the constitutional policy on social justice and the
protection of labor, it does not mean that every labor dispute will be
decided in favor of the workers. The law also recognizes that
management has rights which are also entitled to respect and
enforcement in the interest of fair play In the case at bar, the record
shows that Glaxo gave Tecson several chances to eliminate the conflict
of interest brought about by his relationship with Bettsy. When their
relationship was still in its initial stage, Tecsons supervisors at Glaxo
constantly reminded him about its effects on his employment with the
company and on the companys interests. After Tecson married Bettsy,
Glaxo gave him time to resolve the conflict by either resigning from the
company or asking his wife to resign from Astra. Glaxo even expressed
its desire to retain Tecson in its employ because of his satisfactory
performance and suggested that he ask Bettsy to resign from her
company instead. Glaxo likewise acceded to his repeated requests for
more time to resolve the conflict of interest. When the problem could not
be resolved after several years of waiting, Glaxo was constrained to
reassign Tecson to a sales area different from that handled by his wife
for Astra. Notably, the Court did not terminate Tecson from em ployment
but only reassigned him to another area where his home province,
Agusan del Sur, was included. In effecting Tecsons transfer, Glaxo even
considered the welfare of Tecsons family. Clearly, the foregoing
dispels any suspicion of unfairness and bad faith on the part of Glaxo
D. ATTITUDE PROBLEM
E. POOR PERFORMANCE OR GROSS INEFFICIENCY
113 EASTERN OVERSEAS EMPLOYMENT CENTER, INC. vs
CECILIA BEA
(SUBSTANTIAL EVIDENCE; POOR PERFORMANCE MUST BE
EQUIVALENT TO GROSS AND HABITUAL NEGLECT OF DUTY)
FACTS:
Bea was hired as Senior Head Staff Nurse by Elbualy
Group/Su ltan Qaboos University Hospital (SQUH), the principal
employer through its placement agency in the Philippines, Eastern
Overseas Employment Center, Inc. (Eastern). Her contractual
employment was for two (2) years. Beas placement with SQUH was
subject to a three-(3) month probationary period during said contractual
employment.
Beas probationary status ended on May 1992 but she still
continued being in the employ of SQUH.
She, like all other employees of the hospital, was also
periodically subjected to performance evaluation. After an alleged poor
evaluation of Beas performance as a nurse, she was transferred to the
Neo-Natal Unit and her performance was supposedly under observation.
Later, the Director of Nursing Services notified Bea that her contract
would be terminated. Because of this, she wrote a letter requesting for a
reconsideration of the decision to terminate her. Beas contractual
employment was terminated and she was repatriated to the Philippines
on the recommendation of the Department of Nursing Services after
three very poor evaluations.
After her second poor evaluation, she was given intensive
management assistance through a specialized training plan but she did
not improve. She was unable to function as a Senior Head Staff Nurse on
the Neonatal Unit and therefore a recommendation was made that she
should be terminated since she could not fulfill her contractual obligations
within Nursing Services.
Bea thereafter filed a case of illegal dismissal against instant
petitioner before the POEA Adjudication Office.
HELD:
Beas termination was illegal for failure of petitioner to
prove the existence of a just or authorized cause for terminating
her. We take cognizance of the fact that in any given workplace, not all of
the employees perform in accordance with what is expected of them. As
such, it is not uncommon that an employees work performance is found
to be unsatisfactory. As a general concept, poor performance is
equivalent to inefficiency and incompetence in the performance of official
duties. Under Article 282 of the Labor Code, an unsatisfactory rating
can be a just cause for dismissal only if it amounts to gross and
habitual neglect of duties. The fact that an employees’ performance is
found to be poor or unsatisfactory does not necessarily mean that the
employee is grossly and habitually negligent of his duties. 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. In
the present case, petitioner failed to present substantial evidence to
prove that Beas alleged poor performance in her duties as Senior Head
Staff Nurse amounted to gross and habitual neglect. In the first place, the
POEA Adjudication Office found that aside from the Memorandum dated
June 8, 1993 issued by the Acting Director of Nursing Services of Sultan
Qaboos University Hospital where Bea was deployed, petitioner failed to
present any other evidence to prove that Beas work performance was
indeed poor. Although petitioner contends that three separate
evaluations of Beas work performance were conducted; that after the first
evaluation, Bea was notified about the poor quality of her work; that
following the second evaluation, she was given an intensive
management assistance through a specialized training program; and,
that only after the third evaluation was made that Bea was advised that
her employment would be terminated, we find no error in the findings of
the POEA and the NLRC that these claims of petitioner remain to be
allegations since no substantial evidence was presented to prove them.
In termination cases, the burden of proving just and valid cause
for dismissing an employee from his employment rests upon the
employer, and the latter's failure to discharge that burden would result in
a finding that the dismissal is unjustified.
114 Realda vs. New Age Graphics Inc., G.R. No. 192190, April 25,
2012
(TOTALITY OF INFRACTIONS)
Facts:
Petitioner Realda was dismissed by Respondent New Age
Graphics Inc. for unjustified refusal to render overtime work, unexplained
failure to observe prescribed work standards, habitual tardiness and
chronic absenteeism despite warning and non-compliance with the
directive for him to explain his numerous unauthorized absences. The
Court of Appeals recognized the existence of just causes for petitioner’s
dismissal, however, the appellate court found that the respondent failed
to observe the procedural requirements of due process and, as a
consequence, awarded the petitioner P5,000.00 as Nominal Damages.
Issues:
WoN the dismissal based on the grounds cited constituted just
causes; and WoN the amount awarded as Nominal Damages of
P5,000.00 was valid
Ruling:
First, the petitioner’s arbitrary defiance to Graphics, Inc.’s
order for him to render overtime work constitutes willful disobedience.
Taking this in conjunction with his inclination to absent himself and to
report late for work despite being previously penalized, the CA correctly
ruled that the petitioner is indeed utterly defiant of the lawful orders and
the reasonable work standards prescribed by his employer.
Second, the petitioner’s failure to observe Graphics, Inc.’s
work standards constitutes inefficiency that is a valid cause for dismissal.
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
alloted reasonable period, or by producing unsatisfactory results. As the
operator of Graphics, Inc.’s printer, he is mandated to check whether the
colors that would be printed are in accordance with the client’s
specifications and for him to do so, he must consult the General Manager
and the color guide usedMby Graphics, Inc. before making a full run.
Unfortunately, he failed to observe this simple procedure and proceeded
to print without making sure that the colors were at par with the client’s
demands. This resulted to delays in the delivery of output, client
dissatisfaction, and additional costs on Graphics, Inc.’s part.
While a penalty in the form of suspension had already been
imposed on the petitioner for his habitual tardiness and repeated
absenteeism, the principle of “totality of infractions” sanctions the act
of Graphics, Inc. of considering such previous infractions in decreeing
dismissal as the proper penalty for his tardiness and unauthorized
absences incurred afterwards, in addition to his refusal to render
overtime work and conform to the prescribed work standards.
This Court cannot likewise agree to the petitioner’s attempt to
brush aside his refusal to render overtime work as inconsequential when
Graphics, Inc.’s order for him to do so is justified by Graphics, Inc.’s
contractual commitments to its clients. Such an order is legal under
Article 89 of the Labor Code and the petitioner’s unexplained refusal to
obey is insubordination that merits dismissal from service.
Nonetheless, while the CA finding that the petitioner is entitled
to nominal damages as his right to procedural due process was not
respected despite the presence of just causes for his dismissal is
affirmed, this Court finds the CA to have erred in fixing the amount that
the Company is liable to pay. The CA should have taken cognizance of
the numerous cases decided by this Court where the amount of nominal
damages was fixed at P30,000.00 if the dismissal was for a just cause.
F. DRUG USE
115 ALEJANDRO ROQUERO vs. PHILIPPINE AIRLINES, INC.
FACTS:
Roquero, along with Rene Pabayo, were ground equipment
mechanics of respondent Philippine Airlines, Inc.. They were caught red-
handed possessing and using Methampethamine Hydrochloride or shabu
in a raid conducted by PAL security officers and NARCOM personnel.
They alleged that they did not voluntarily indulge in the said act but were
instigated by a certain Jojie Alipato who was introduced to them by
Joseph Ocul, Manager of the Airport Maintenance Division of PAL. Inside
the company premises, they locked the door and Alipato lost no time in
preparing the drugs to be used. When they started the procedure of
taking the drugs, armed men entered the room, arrested Roquero and
Pabayo and seized the drugs and the paraphernalia used. Roquero and
Pabayo were subjected to a physical examination where the results
showed that they were positive of drugs. They were also brought to the
security office of PAL where they executed written confessions without
the benefit of counsel. Roquero and Pabayo then received a notice of
administrative charge] for violating the PAL Code of Discipline. They
were required to answer the charges and were placed under
preventive suspension.
Eventually, they were dismissed by PAL. Thus, they filed a
case for illegal dismissal.
HELD:
Roquero is guilty of serious misconduct for possessing and
using shabu. He violated Chapter 2, Article VII, section 4 of the PAL
Code of Discipline which states: Any employee who, while on company
premises or on duty, takes or is under the influence of prohibited or
controlled drugs, or hallucinogenic substances or narcotics shall be
dismissed. Serious misconduct is defined as 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. For serious misconduct to warrant the dismissal of an
employee, it (1) must be serious; (2) must relate to the performance of
the employees duty; and (3) must show that the employee has become
unfit to continue working for the employer.
It is of public knowledge that drugs can damage the mental faculties of
the user. Roquero was tasked with the repair and maintenance of PALs
airplanes. He cannot discharge that duty if he is a drug user. His failure
to do his job can mean great loss of lives and properties. Hence, even if
he was instigated to take drugs he has no right to be reinstated to his
position. He took the drugs fully knowing that he was on duty and more
so that it is prohibited by company rules.
Instigation is only a defense against criminal liability. It cannot
be used as a shield against dismissal from employment especially when
the position involves the safety of human lives.
NOTE: Although both Roquero and Pabayo filed the illegal dismissal
case, only Roquero brought this petition for review because Pabayo
agreed to monetarily settle with PAL during the pendency of the case.
F. CLOSURE OF ESTABLISHMENTS AND REDUCTION OF
PERSONNEL; AUTHORIZED CAUSES
A. INSTALLATION OF LABOR SAVING DEVICES
116 Philippine sheet metal workers' union vs the Court of Industrial
Relations, Can Company and Liberal Labor Union
FACTS:
The respondent company filed a motion, in the case pending in
the court of industrial relations, asking for authority to lay off at least 15
workers in its can department on the ground that the installation and
operation of nine new labor-saving machines in the said department had
rendered the services of the said workers unnecessary. Petitioner
alleged that there was more than sufficient work in the company to keep
all its workers busy.
ISSUE:
WON the laying off of the 15 employees valid
HELD:
Yes. There was justification for reducing the number of workers
in respondent's factory by the introduction of machinery in the
manufacture of its products. There is no question as to the right of the
manufacturer to use new labor-saving devices with the view to effecting
more economy and efficiency in its method of production. But the right to
reduce personnel should not be abused. It should not be made a pretext
for easing out laborers on account of their union activities. But neither
should it be denied when it is shown that they are not discharging their
duties in a manner consistent with good discipline and efficient operation
of an industrial enterprise.
NOTE: NO DISCRIMINATION; Their selection was made by a committee
composed of both officers and employees who took no account of the
laborers' affiliation to the unions and only considered their proven record.
117 EDGAR AGUSTILO vs. COURT OF APPEALS, SAN MIGUEL
CORPORATION
FACTS:
Edgar Agustilo was hired by San Miguel Corporation (SMC) as
a temporary employee on its Mandaue Brewery in Mandaue, Cebu. He
was made permanent and designated as a safety clerk and was later
transferred to the Engineering Department of the SMC Mandaue Brewery
as an administrative secretary. SMC Mandaue Brewery then adopted a
policy that managers would no longer be assigned secretaries and that
only director level positions may be given secretaries. As a result,
petitioner’s position as administrative secretary was abolished and he
was transferred to the companys Plant Directors Office-Quality
Improvement Team (PDO-QIT). Petitioner was informed that 584
employees, including him, would be retrenched due to the modernization
program of the company and that his services would be terminated and
that he would be paid his benefits 30 days after he was cleared of all
accountabilities. SMC notified the DOLE of its modernization program.
Petitioner was given separation pay representing 175% of his
entitlements under the Labor Code.
Petitioner then filed a complaint against respondents for unfair
labor practice, illegal dismissal.
ISSUE:
Whether or not petitioner was illegally dismissed.
HELD:
NO. Complainants termination was justified and that
respondents adhered to the procedural requirements governing the
same. We have noted very clearly that petitioners separation from
employment was brought about by the installation of labor saving
devices and machineries pursuant to the employers reorganizational
and expansion program. The law in this regard allows such a state of
change. Art. 283 of the Labor Code allows the reduction of personnel
with the installation of labor saving devices. While we sympathize with
the complainant recognizing the considerable period of his employment
of more than 11 years, yet equally too, we recognize the respondents
judgment in the conduct of its business for which the laws do not
authorize interference. As a matter of fact, the Labor Code and its
Implementing Rules do not vest in the Labor Arbiters nor in the different
divisions of the NLRC managerial authority. The employer is free to
determine, using his own discretion and business judgment, all elements
of employment from hiring to firing (National Federation of Labor Union
v. NLRC, 202 SCRA 346 (1991)). Moreover, the freedom of management
to conduct its business operations to achieve its purpose cannot be
denied (Yuco Chemical Industries v. Min. of Labor, 185 SCRA 727
(1990)). For as we see in the case at bench, complainant was not
discriminated against. In the respondents program of modernization,
more than 500 others, to be precise, 583 workers, were likewise affected.
And we cannot view this as a manifestation of bad faith and insincerity of
respondents taking into account the installation of machineries and
equipment pursuant to the program as a means of streamlining the
personnel structure. In a program like this, the eventuality of personnel
being removed cannot be avoided. To contend otherwise would be to
intrude into the conduct of an enterprise whose main reason for being is
the profitability of its operations.
118 MAGNOLIA DAIRY PRODUCTS CORPORATION vs. NLRC and
JENNY A. CALIBO
(ONE MONTH NOTICE; SEPARATION PAY)
FACTS:
Petitioner entered into a contract of service with Skillpower,
Inc., a duly organized corporation engaged in the business of offering
and providing manpower services to the public. Skillpower, Inc., assigned
Jenny A. Calibo to petitioners Tetra Paster Division. When petitioners
contract with Skillpower, Inc., expired, Calibo applied with Lippercon
Services, Inc., also a corporation engaged in providing manpower
services.
Lippercon Services, Inc., assigned her to petitioners Tetra
Paster Division as a cleaning aide. Later, Calibo was terminated from
service due to petitioners installation of automated machines prompting
Calibo to institute a complaint for illegal dismissal against petitioner.
In answer thereto, petitioner averred that it has no employer-employee
relationship with private respondent and that the dismissal was prompted
by the installation of labor saving devices - an authorized cause for
dismissal under the Labor Code, as amended.
ISSUE:
WON private respondent was legally dismissed since the
termination of her employment was due to a cause expressly authorized
by the Labor Code
HELD:
YES. Article 283 of the Labor Code provides in part that, the
employer may also terminate the employment of any employee due to
the installation of labor saving devices, x x x, by serving a written notice
on the workers and the Ministry of Labor and Employment at least one
(1) month before the intended date thereof. In case of termination due to
the installation of labor saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at
least his one (1) month pay or to at least one (1) month pay for every
year of service, whichever is higher. x x x A fraction of at least six (6)
months shall be considered one (1) whole year.
The law authorizes an employer, like the herein petitioner, to
terminate the employment of any employee due to the installation of
labor saving devices. The installation of these devices is a management
prerogative, and the courts will not interfere with its exercise in the
absence of abuse of discretion, arbitrariness, or maliciousness on the
part of management, as in this case. Nonetheless, this did not excuse
petitioner from complying with the required written notice to the employee
and to the Department of Labor and Employment (DOLE) at least one
month before the intended date of termination. This procedure enables
an employee to contest the reality or good faith character of the asserted
ground for the termination of his services before the DOLE.
The failure of petitioner to serve the written notice to private
respondent and to the DOLE, however, does not ipso facto make private
respondents termination from service illegal so as to entitle her to
reinstatement and payment of backwages. If at all, her termination from
service is merely defective because it was not tainted with bad faith or
arbitrariness and was due to a valid cause.
The well settled rule is that the employer shall be sanctioned
for non -compliance with the requirements of, or for failure to observe
due process in terminating from service its employee.
B. REDUNDANCY
119 WILTSHIRE FILE CO., INC. vs. THE NATIONAL LABOR
RELATIONS COMMISSION and VICENTE T. ONG, respondents.
(DEFINITION)
FACTS: Private respondent Vicente T. Ong was the Sales Manager of
petitioner Wiltshire File Co., Inc. On 13 June 1985, upon private
respondent’s return from a business and pleasure trip abroad, he was
informed by the President of petitioner Wiltshire that his services were
being terminated. Private respondent maintains that he tried to get an
explanation from management of his dismissal but to no avail. On 18
June 1985, when private respondent again tried to speak with the
President of Wiltshire, the company’s security guard handed him a letter
which formally informed him that his services were being terminated
upon the ground of redundancy.
Private respondent filed, on 21 October 1985, a complaint
before the Labor Arbiter for illegal dismissal alleging that his position
could not possibly be redundant because nobody (save himself) in the
company was then performing the same duties.
Petitioner company alleged that the termination of respondent’s
services was a cost cutting measure: that in December 1984, the
company had experienced an unusually low volume of orders: and that it
was in fact forced to rotate its employees in order to save the
company. Despite the rotation of employees, petitioner alleged; it
continued to experience financial losses and private respondent’s
position, Sales Manager of the company, became redundant.
During pendency, petitioner closed its business. LABOR
ARBITER ruled that the dismissal was illegal. NLRC held that the
termination was attended by malice and bad faith on the part of
petitioner, considering the manner of private respondent was ordered by
the President to pack up and remove his personal belongings from the
office.
ISSUE:
WON his dismissal was illegal.
HELD:
NO, his dismissal was VALID.
In the first place, we note that while the letter informing private
respondent of the termination of his services used the word “redundant“,
that letter also referred to the company having “incur[red] financial
losses which [in] fact has compelled [it] to resort to retrenchment to
prevent further losses”. Thus, what the letter was in effect saying was
that because of financial losses, retrenchment was necessary, which
retrenchment in turn resulted in the redundancy of private respondent’s
position.
In the second place, we do not believe that redundancy in an
employer’s personnel force necessarily or even ordinarily refers to
duplication of work. That no other person was holding the same position
that private respondent held prior to the termination of his services, does
not show that his position had not become redundant. Indeed, in any
well-organized business enterprise, it would be surprising to find
duplication of work and two (2) or more people doing the work of one
person. We believe that redundancy, for purposes of our Labor
Code, exists where the services of an employee are in excess of what is
reasonably demanded by the actual requirements of the enterprise.
Succinctly put, a position is redundant where it is superfluous, and
superfluity of a position or positions may be the outcome of a number of
factors, such as overhiring of workers, decreased volume of business, or
dropping of a particular product line or service activity previously
manufactured or undertaken by the enterprise.
Wiltshire, in view of the contraction of its volume of sales and in
order to cut down its operating expenses, effected some changes in its
organization by abolishing some positions and thereby effecting a
reduction of its personnel. Thus, the position of Sales Manager was
abolished and the duties previously discharged by the Sales Manager
simply added to the duties of the General Manager, to whom the Sales
Manager used to report.
In the instant case, the ground for dismissal or termination of
services does not relate to a blameworthy act or omission on the part of
the employee, there appears to us no need for an investigation and
hearing to be conducted by the employer who does not, to begin with,
allege any malfeasance or non-feasance on the part of the employee. In
such case, there are no allegations which the employee should refute
and defend himself from. Thus, to require petitioner Wiltshire to hold a
hearing, at which private respondent would have had the right to be
present, on the business and financial circumstances compelling
retrenchment and resulting in redundancy, would be to impose upon the
employer an unnecessary and inutile hearing as a condition for legality of
termination.
This is not to say that the employee may not contest the reality
or good faith character of the retrenchment or redundancy asserted as
grounds for termination of services. The appropriate forum for such
controversion would, however, be the Department of Labor and
Employment and not an investigation or hearing to be held by the
employer itself. It is precisely for this reason that an employer seeking to
terminate services of an employee or employees because of “closure of
establishment and reduction of personnel”, is legally required to give a
written notice not only to the employee but also to the Department of
Labor and Employment at least one month before effectivity date of the
termination. In the instant case, private respondent did controvert before
the appropriate labor authorities the grounds for termination of services
set out in petitioner’s letter to him dated 17 June 1985.
NOTES:
Art. 283. Closure of establishment and reduction of personnel. ––
The employer may also terminate the employment of any employee due
to the installation of labor saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on
the workers and the Ministry of Labor and Employment at least one (1)
month before the intended date thereof. In case of termination due to the
installation of labor saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one
(1) month pay or to at least one (1) month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses and in
cases of closures or cessation of operations of establishment or
undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or at least one-
half (1/2) month pay for every of service, whichever is higher. A fraction
of at least six (6) months shall be considered one (1) whole year.
120 COATS MANILA BAY, INC. vs PURITA M. ORTEGA
(GROUND; CRITERIA)
FACTS:
Purita M. Ortega and Marina A. Montero were both employed
by petitioner as Clerk Analysts in the Industrial Engineering Department.
On 27 April 2000, petitioner issued a memorandum announcing that a
redundancy plan would be implemented. It was stated that the
redundancy program was necessary to prevent further losses. Petitioner
assured its employees that implementing a redundancy program rather
than a retrenchment program would result in better benefits to those
dismissed.
As a result of this redundancy program, 135 employees were
terminated, including respondents.
Respondents received their respective separation payments
and thereafter executed release waivers and quitclaims in favor of
petitioner. In the meantime, 11 of the terminated employees were rehired
by petitioner to different positions but with lower salaries. On 8 June
2000, respondents filed a complaint for illegal dismissal Respondents
asserted in their position paper that despite their dismissal due to
redundancy, their functions were assigned to other workers.
Petitioner and Tanco claimed that they had the management
prerogative to implement a redundancy program as per Article 283 of the
Labor Code. They aver that both respondents were notified that they
would be subject to redundancy and that they never objected thereto
as shown by the execution of their respective waivers/quitclaims. It
asserts that the implementation of its redundancy program was not
discriminatory, and that it implemented reasonable criteria in selecting
employees to be retrenched. Moreover, the decision to dismiss
respondents was reached after consultations with the Union
Respondents contend that petitioner cannot invoke redundancy since
there was no showing that the functions of respondents are duplicitous or
superfluous. They also assert that petitioner failed to show that it was
suffering from a serious downturn in business that would warrant
redundancy given that such serious business downturn was the cause
given by petitioner in the termination letters sent to respondents. They
also assert that their educational attainment is irrelevant since the
compelling factor in their acceptance of separation pay was the dire
economic necessity to be caused by their impending loss of jobs.
ISSUE:
WON there’s propriety of the redundancy program
implemented by petitioner;
HELD:
YES. Redundancy exists where the services of an employee
are in excess of what is reasonably demanded by the actual
requirements of the enterprise. Succinctly put, a position is redundant
where it is superfluous, and superfluity of a position or positions may be
the outcome of a number of factors, such as over hiring of workers,
decreased volume of business, or dropping of a particular product line or
service activity previously manufactured or undertaken by the enterprise.
That no other person was holding the same position prior to the
termination of ones services, does not show that his position had not
become redundant. Indeed, in any well-organized business enterprise, it
would be surprising to find duplication of work and two (2) or more people
doing the work of one person. Just like installation of labor-saving
devices, the ground of redundancy does not require the exhibition of
proof of losses or imminent losses. In fact, of all the statutory grounds
provided in Article 283 of the Labor Code, it is only retrenchment which
requires proof of losses or possible losses as justification for termination
of employment.
It is well settled that the characterization of an employee’s
services as no longer necessary or sustainable, and, therefore, properly
terminable, is an exercise of business judgment on the part of the
employer. However, the wisdom or soundness of such characterization
or decision is not subject to discretionary review provided, of course, that
violation of law or arbitrary or malicious action is not shown. In several
instances, the Court has held that it is important for a company to have
fair and reasonable criteria in implementing its redundancy program,
such as but not limited to, (a) preferred status, (b) efficiency and (c)
seniority.
Records shows that respondents positions were abolished
because there was duplicity of functions of clerk analysts in the Industrial
Engineering Section and finishing production clerks in the Operations
Department. Even the union representatives agreed that respondents
positions were redundant. Petitioner found that it was more cost-efficient
to maintain only one employee to handle the computation of incentives of
the production employees with the use of computers.
121 BONIFACIO ASUFRIN, JR vs SAN MIGUEL CORPORATION
(ADEQUATE PROOF; FUNDAMENTALS OF GOOD FAITH)
FACTS:
Asufrin is a Stock Clerk of Coca Cola Plant, then a department
of respondent San Miguel Beer Corporation. Sometime in 1984, the sales
office and operations at the Sum-ag, Bacolod City Sales Office were
reorganized. Several positions were abolished including petitioner’s
position as Stock Clerk. After reviewing petitioner’s qualifications, he was
designated warehouse checker at the Sum-ag Sales Office. SMC
implemented a new marketing system known as the "pre-selling
scheme" at the Sum-ag Beer Sales Office. As a consequence, all
positions of route sales and warehouse personnel were declared
redundant. Respondent notified the DOLE Director. SMC thereafter wrote
a letter to petitioner informing him that, owing to the implementation of
the "pre-selling operations" scheme, all positions of route and warehouse
personnel will be declared redundant and the Sum-ag Sales Office will be
closed thus petitioner reported to respondent’s Personnel Department at
the Sta. Fe Brewery, pursuant to a previous directive.
Thereafter, the employees of Sum-ag sales force were
informed that they can avail of respondent’s early retirement package
pursuant to the retrenchment program, while those who will not avail of
early retirement would be redeployed or absorbed at the Brewery or
other sales offices. Petitioner opted to remain and manifested his
willingness to be assigned to any job, considering that he had three
children in college.
Petitioner was surprised when he was informed by the Acting
Personnel Manager that his name was included in the list of employees
who availed of the early retirement package. Petitioner’s request that he
be given an assignment in the company was ignored by the Acting
Personnel Manager. Petitioner thus filed a complaint for illegal dismissal
ISSUE:
Whether or not the dismissal of petitioner is based on a just
and authorized cause.
HELD:
NO. The determination that employee’s services are no longer
necessary or sustainable and, therefore, properly terminable is an
exercise of business judgment of the employer. The wisdom or
soundness of this judgment is not subject to discretionary review of the
Labor Arbiter and the NLRC, provided there is no violation of law and no
showing that it was prompted by an arbitrary or malicious act. In other
words, it is not enough for a company to merely declare that it has
become over manned. It must produce adequate proof that such is
the actual situation to justify the dismissal of the affected employees for
redundancy. It bears stressing that whether it be by redundancy or
retrenchment or any of the other authorized causes, no employee may
be dismissed without observance of the fundamentals of good faith.
In selecting employees to be dismissed, a fair and reasonable criteria
must be used, such as but not limited to (a) less preferred status, e.g.
temporary employee; (b) efficiency; and (c) seniority. In the case at bar,
no criterion whatsoever was adopted by respondent in dismissing
petitioner. Furthermore, as correctly observed by the NLRC, respondent
"has not shown how the cessation of operations of the Sum-ag Sales
Office contributed to the ways and means of improving effectiveness of
the organization with the end in view of efficiency and cutting distribution
overhead and other related costs. Respondent, thus, clearly resorted to
sweeping generalization[s] in dismissing complainant."
It is not difficult for employers to abolish positions in the guise
of a cost-cutting measure and we should not be easily swayed by such
schemes which all too often reduce to near nothing what is left of the
rubble of rights of our exploited workers. Given the nature of petitioner’s
job as a Warehouse Checker, it is inconceivable that respondent could
not accommodate his services considering that the warehousing
operations at Sum -ag Sales Office has not shut down.
RUBEN SERRANO vs. NLRC and ISETANN DEPARTMENT STORE
(EXCEPTION: PROOF OF MALICIOUS OR ARBITRARY MANNER)
FACTS: Petitioner was hired by Isetann Department Store as a security
checker to apprehend shoplifters and prevent pilferage of merchandise. 1
Initially hired on contractual basis but eventually became a regular
employee. He then became head of the Security Checkers Section.
As a cost-cutting measure, private respondent decided to phase out its
entire security section and engage the services of an independent
security agency. For this reason, it sent the petitioner a notice that in
view of company’s retrenchment program, he is notified for his
termination as Security Section Head. The loss of his employment
prompted petitioner to file a complaint for illegal dismissal. Petitioner
contends that abolition of private respondent's Security Checkers Section
and the employment of an independent security agency do not fall
under any of the authorized causes for dismissal under Art. 283 of the
Labor Code.
ISSUE: Whether or not there is a valid ground for the dismissal of the
complainant.
HELD: Yes. Closure of establishment and reduction of personnel. — The
employer may also terminate the employment of any employee due to
the installation of labor-saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operations of the
establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on
the, workers and the Department of Labor and Employment at least one
(1) month before the intended date thereof. In case of termination due to
the installation of labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at
least one (1) month pay or to at least one (1) month pay for every year of
service, whichever is higher. In case of retrenchment to prevent losses
and in cases of closure or cessation of operations of establishment or
undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to at least one (1) month pay or at
least onehalf (1/2) month pay for every year of service, whichever is
higher. A fraction of at least six (6) months shall be considered as one (1)
whole year.
The "[management of a company] cannot be denied the faculty of
promoting efficiency and attaining economy by a study of what units are
essential for its operation. To it belongs the ultimate determination of
whether services should be performed by its personnel or contracted to
outside agencies . . . [While there] should be mutual consultation,
eventually deference is to be paid to what management decides."
Consequently, absent proof that management acted in a malicious or
arbitrary manner, the Court will not interfere with the exercise of
judgment by an employer.
In the case at bar, we have only the bare assertion of petitioner that, in
abolishing the security section, private respondent's real purpose was to
avoid payment to the security checkers of the wage increases provided in
the collective bargaining agreement approved in 1990. Such an assertion
is not sufficient basis for concluding that the termination of petitioner's
employment was not a bona fide decision of management to obtain
reasonable return from its investment, which is a right guaranteed to
employers under the Constitution. Indeed, that the phase-out of the
security section constituted a "legitimate business decision" is a factual
finding of an administrative agency which must be accorded respect and
even finality by this Court since nothing can be found in the record which
fairly detracts from such finding. Accordingly, the termination of
petitioner's services was for an authorized cause, i.e., redundancy.
122 CALTEX (PHILS.), INC. vs NLRC & ROMEO T. STO. TOMAS
(SUBSTANTIAL EVIDENCE – reasonable mind might accept as
adequate to support a conclusion; (1) Proof of superfluity of
position, (2) Fair and reasonable criteria)
FACTS: Romeo T. Sto Tomas was a regular employee of Caltex. He was
a Senior Accounting Analyst. Caltex informed the Department of Labor
and Employment (DOLE) of its plan to implement a redundancy program
in its Marketing Division and some departments in its Batangas Refinery.
The letter alleged that the redundancy program is a response to the
market situation which constrained petitioner to rationalize and simplify
its business processes; that petitioner undertook a review, restructuring
and streamlining of its organization which resulted in consolidation,
abolition and outsourcing of certain functions and in the identification of
certain redundant positions. The letter also states that petitioner will
provide the DOLE a list of affected employees as it implements each
phase of the redundancy program. Petitioner, through a letter, notified
private respondent of his termination due to the redundancy of his
position and awarded him a separation package. Due to this, respondent
filed with the Labor Arbiter a complaint for illegal dismissal. Respondent
alleged there was no independent proof or evidence presented by
petitioner to substantiate its claim of redundancy. Petitioner on the other
hand, averred that private respondents dismissal from the service was
due to redundancy of his position which was determined after petitioners
business process re-engineering study and organization review,
conducted with private respondents knowledge; that redundancy is an
authorized cause to terminate an employee which is a management
prerogative and cannot be interfered with absent any abuse of discretion;
and that there is nothing in the law that requires petitioner to conduct
impartial investigation or hearing to terminate an employee due to
redundancy
ISSUE: Whether private respondents termination on the ground of
redundancy was valid?
HELD: NO. There was no substantial evidence presented by petitioner
to justify private respondent's dismissal due to redundancy. Petitioners
evidence to show redundancy merely consisted of a copy of petitioners
letter to the DOLE informing the latter of its intention to implement a
redundancy program and nothing more. The letter which merely stated
that petitioner undertook a review, restructuring and streamlining of its
organization which resulted in consolidation, abolition and outsourcing of
certain functions; and which resulted in identified and redundant positions
instead of simplifying its business process restructuring, does not satisfy
the requirement of substantial evidence, that is, the amount of evidence
which a reasonable mind might accept as adequate to justify a
conclusion.
Petitioner failed to demonstrate the superfluity of private respondents
position as there was nothing in the records that would establish any
concrete and real factors recognized by law and relevant jurisprudence,
such as overhiring of workers, decreased volume of business, or
dropping of a particular product line or service activity previously
manufactured or undertaken by the enterprise, which were adopted
by petitioner in implementing the redundancy program.
Petitioner also failed to show any fair and reasonable criteria in
ascertaining what positions are redundant and how the selection of
employees to be dismissed was made. Petitioners failure to show an
authorized cause for private respondents termination is sufficient
to declare the dismissal illegal.
Culili v. Eastern Telecommunications Phils., G.R. No. 165381,
February 9, 2011
(REQUISITES – (1) Good Faith, (2) Fair and Reasonable Criteria)
Facts: Nelson Culili was employed by Eastern Telecommunications a
Senior Technician. In 1998, due to business losses, ETPI was compelled
to implement a Right-Sizing Program which consisted of two phases: the
first phase involved the reduction of ETPI’s workforce to only those
employees that were necessary and which ETPI could sustain; the
second phase entailed a company-wide reorganization which would
result in the transfer, merger, absorption or abolition of certain
departments of ETPI. Among the departments abolished was the Service
Quality Department. As a result, Culili’s position was abolished due to
redundancy. Upon filing a complaint, the Labor Arbiter rendered a
decision finding ETPI guilty of illegal dismissal and unfair labor practice,
which was affirmed by the NLRC. However, the Court of Appeals found
that Culili’s position was validly abolished due to redundancy. It was
highly unlikely that ETPI would effect a company-wide reorganization
simply for the purpose of getting rid of Culili. Also, ETPI cannot be held
guilty of unfair labor practice as mere contracting out of services being
performed by union members does not per se amount to unfair labor
practice unless it interferes with the employees’ right to self-organization.
Issue: Whether or not there was an illegal dismissal.
Ruling: There was a valid dismissal on the ground of redundancy. There
is redundancy when the service capability of the workforce is greater
than what is reasonably required to meet the demands of the business
enterprise. A position becomes redundant when it is rendered
superfluous by any number of factors such as over-hiring of workers,
decrease in volume of business, or dropping a particular product line.
Among the requisites of a valid redundancy program are: (1) the good
faith of the employer in abolishing the redundant position; and (2) fair and
reasonable criteria in ascertaining what positions are to be declared
redundant such as but not limited to: preferred status, efficiency, and
seniority.
The records show that ETPI had sufficiently established not only its need
to reduce its workforce and streamline its organization, but also the
existence of redundancy in the position of a Senior Technician. It was
decided that, in the judgment of ETPI management, the specialized
functions of a Senior Technician whose sole function was essentially the
repair and servicing of ETPI’s telecommunications equipment was no
longer needed since the Business and Consumer [Accounts] Department
had to remain economical and focused yet versatile enough to meet all
the multifarious needs of its small and medium sized clients. It is
inconceivable that ETPI would effect a company-wide reorganization of
this scale for the mere purpose of singling out Culili and terminating him.
What ETPI did was to abolish the position itself for being too specialized
and limited.
SC finds Culili’s dismissal was for a lawful cause and not an act of unfair
labor practice, ETPI, however, was remiss in its duty to observe
procedural due process in effecting the termination of Culili. In Mayon
Hotel & Restaurant v.Adana, SC observed that the requirement of law
mandating the giving of notices was intended: not only to enable the
employees to look for another employment and therefore ease the impact
of the loss of their jobs and the corresponding income, but more
importantly, to give the Department of Labor and Employment (DOLE)
the opportunity to ascertain the verity of the alleged authorized
cause of termination.
With regard to the impleaded corporate officers, they cannot be held
liable for acts done in his official capacity because a corporation, by legal
fiction, has a personality separate and distinct from its officers,
stockholders, and members. To pierce this fictional veil, it must be shown
that the corporate personality was used to perpetuate fraud or an illegal
act, or to evade an existing obligation, or to confuse a legitimate issue. In
illegal dismissal cases, corporate officers may be held solidarily liable
with the corporation if the termination was done with malice or bad faith.
Culili has failed to prove that his dismissal was orchestrated by the
individual respondents herein for the mere purpose of getting rid of him.
Hence, the dismissal is declared valid but Eastern Telecommunications
Philippines, Inc. is ordered to pay petitioner Nelson A. Culili the amount
of P50,000.00 as nominal damages for non-compliance with statutory
due process, in addition to the mandatory separation pay required under
Article 283 of the Labor Code.
123 CECILE DE OCAMPO, et.al. vs NLRC and BALIWAG
MAHOGANY CORPORATION
FACTS: Petitioners are employees of Baliwag Mahogany Corporation.
They are either officers or members of the Baliwag Mahogany
Corporation Union -CFW, the existing collective bargaining agent of the
rank and file employees in the company. In 1988, Baliwag Mahogany
Corporation (company) and Baliwag Mahogany Corporation Union-CFW
(union) entered into a collective bargaining agreement containing,
among other things, provisions on conversion into cash of unused
vacation and sick leaves; grievance machinery procedure; and the right
of the company to schedule work on Sundays and holidays. The union
made several requests from the company, one of which was the cash
conversion of unused vacation and sick leave for 1987- 1988 and 1988-
1989. The company ruled to allow payment of unused vacation and sick
leaves for the period of 1987-1988 but disallowed cash conversion of the
1988-1989 unused leaves. The company issued suspension orders
affecting twenty (20) employees for failure to render overtime work on
December 30, 1989. The suspension was for a period of three (3) days.
On the same day, the union filed a notice of strike on the grounds of
unfair labor practice particularly the violation of the CBA provisions on
non-payment of unused leaves and illegal dismissal of seven (7)
employees. The company then issued a notice of termination to three (3)
employees or union members, namely, Cecile de Ocampo, Rene
Villanueva and Marcelo dela Cruz, of the machinery department,
allegedly to effect cost reduction and redundancy.
Petitioners contend that the company acted in bad faith when it
terminated the services of the three mechanics because the positions
held by them were not at all abolished but merely given to Gemac
Machineries. On the contrary, the company stresses that when it
contracted the services of Gemac Machineries for the maintenance and
repair of its industrial machinery, it only adopted a cost saving and cost-
consciousness program in order to improve production efficiency.
ISSUE: Whether or not the dismissals of petitioners Cecile de Ocampo,
Rene Villanueva, and Marcelo dela Cruz from their positions by the
company on the ground of redundancy was done in good faith.
HELD: YES. Petitioners' dismissal was justified by redundancy due to
superfluity and hence legal. We believe that redundancy, for purposes of
our Labor Code, exists where the services of an employee are in excess
of what is reasonably demanded by the actual requirement of the
enterprise. Succinctly put, a position is redundant where it is superfluous,
and superfluity of a position or positions may be the outcome of a
number of factors, such as over hiring of workers, decreased volume of
business, or dropping of a particular product line or service activity
previously manufactured or undertaken by the enterprise. The employer
had no legal obligation to keep in its payroll more employees, than are
necessary for the operation of its business. The reduction of the number
of workers in a company made necessary by the introduction of the
services of Gemac Machineries in the maintenance and repair of its
industrial machinery is justified. There can be no question as to the right
of the company to contract the services of Gemac Machineries to replace
the services rendered by the terminated mechanics with a view to
effecting more economic and efficient methods of production. In the
same case, We ruled that "(t)he characterization of (petitioners') services
as no longer necessary or sustainable, and therefore properly terminable,
was an exercise of business judgment on the part of (private respondent)
company. The wisdom or soundness of such characterization or decision
was not subject to discretionary review on the part of the Labor Arbiter
nor of the NLRC so long, of course, as violation of law or merely arbitrary
and malicious action is not shown" (ibid, p. 673).
In contracting the services of Gemac Machineries, as part of the
company's cost-saving program, the services rendered by the mechanics
became redundant and superfluous, and therefore properly terminable.
The company merely exercised its business judgment or management
prerogative. And in the absence of any proof that the management
abused its discretion or acted in a malicious or arbitrary manner, the
court will not interfere with the exercise of such prerogative.
C. RETRENCHMENT
124 ALABANG COUNTRY CLUB INC. vs. NLRC, ALABANG
COUNTRY CLUB INDEPENDENT EMPLOYEES UNION
(CONDITIONS – (1) SUBSTANTIAL, (2) REASONABLY IMMINENT, (3)
REASONABLY NECESSARY, (4) SUFFICIENT & CONVINCING
EVIDENCE; RETRENCHMENT VS. CLOSURE)
FACTS:
Francisco Ferrer, then President of ACCI, requested its Internal
Auditor, Irene CamposUgalde, to conduct a study on the profitability of
ACCIs Food and Beverage Departmen (F & B Department). In her report,
it showed that F & B Department had been incurring substantial losses.
Realizing that it was no longer profitable for ACCI to maintain its own F &
B Department, the management decided to cease from operating the
department and to open the same to a contractor, such as a
concessionaire, which would be willing to operate its own food and
beverage business within the club. ACCI subsequently entered into an
agreement with La Tasca Restaurant Inc. (La Tasca), for it to operate the
F & B Department. Subsequently, ACCI sent its F & B Department
employees individual letters informing them that their services were
being terminated one month from the date and that they would be paid
separation pay equivalent to one hundred twenty five (125%) percent of
their monthly salary for every year of service. ACCI also informed them
that La Tasca agreed to absorb all affected employees immediately with
the status of regular employees without need of undergoing a
probationary period, and that all affected employees would receive the
same salary they were receiving from ACCI at the time of their
termination. The Union, with the authority of individual respondents,
filed before the NLRC a complaint for illegal dismissal. The Union and
individual respondents alleged that the F & B Division had been reporting
gaining profits as shown by the Statement of Income and Deficit
prepared by SGV&Co. They thus argued that compliance with the
standards for losses to justify their retrenchment was not met by ACCI.
ACCI averred, however, that it may exercise management prerogatives
to adopt a cost-saving and cost-consciousness program to improve
efficiency in its operations, prevent losses, and concentrate on core
businesses, and to lay-off workers and contract out their jobs.
ISSUE:
WON the respondents were dismissed due to retrenchment.
HELD:
NO. Retrenchment on the ground of serious business losses is
allowed subject to the conditions that (1) the losses expected should be
substantial and not merely de minimis in extent; (2) the substantial
losses apprehended must be reasonably imminent as such imminence
can be perceived objectively in good faith by the employer; (3)
retrenchment must be reasonably necessary and likely to effectively
prevent the expected losses; and (4) the alleged losses, if already
realized and the expected imminent losses sought to be forestalled, must
be proven by sufficient and convincing evidence. However, the case
at bar is one involving closure of a business undertaking.
Retrenchment is the reduction of personnel for the purpose of
cutting down on costs of operations in terms of salaries and wages
resorted to by an employer because of losses in operation of a business
occasioned by lack of work and considerable reduction in the volume of
business.
Closure of a business or undertaking due to business
losses is the reversal of fortune of the employer whereby there is a
complete cessation of business operations to prevent further financial
drain upon an employer who cannot pay anymore his employees since
business has already stopped. One of the prerogatives of management is
the decision to close the entire establishment or to close or abolish a
department or section thereof for economic reasons, such as to minimize
expenses and reduce capitalization. In the present case, when petitioner
decided to cease operating its F & B Department and open the same to a
concessionaire, it did not reduce the number of personnel assigned
thereat. It terminated the employment of ALL personnel assigned at the
department. As in the case of retrenchment, however, for the closure
of a business or a department due to serious business losses to be
regarded as an authorized cause for terminating employees, it must be
proven that the losses incurred are substantial and actual or
reasonably imminent; that the same increased through a period of
time; and that the condition of the company is not likely to improve
in the near future. Petitioners failure to prove that the closure of its F &
B Department was due to substantial losses notwithstanding, this Court
finds that individual respondents were dismissed on the ground of
closure or cessation of an undertaking not due to serious business losses
or financial reverses, which is allowed under Article 283 of the Labor
Code.
125 LOPEZ SUGAR CORPORATION vs. FEDERATION OF FREE
WORKERS
(PREVENT LOSSES; PROOF OF ACTUAL DECLINE OF GROSS AND
NET REVENUES)
FACTS:
Petitioner, allegedly to prevent losses due to major economic
problems, and exercising its privilege under their Collective Bargaining
Agreement ("CBA") entered into between petitioner and Philippine Labor
Union Association ("PLUA-NACUSIP"), caused the retrenchment and
retirement of a number of its employees. Petitioner filed with DOLE a
combined report on retirement and application for clearance to retrench
affecting eighty six (86) of its employees in order to prevent losses.
Federation of Free Workers ("FFW"), as the certified bargaining agent
of the rank-and-file employees of petitioner, filed a complaint for unfair
labor practices and recovery of union.
FFW claimed that the terminations undertaken by petitioner
were violative of the security of tenure of its members and were intended
to "bust" the union and hence constituted an unfair labor practice. FFW
claimed that after the termination of the services of its members,
petitioner advised 110 casuals to report to its personnel office. FFW
further argued that to justify retrenchment, serious business reverses
must be "actual, real and amply supported by sufficient and convincing
evidence.
Petitioner denied having hired casuals to replace those it had
retired or retrenched. It explained that the announcement calling for 110
workers to report to its personnel office was only for the purpose of
organizing a pool of extra workers which could be tapped whenever
there were temporary vacancies by reason of leaves of absence of
regular workers.
ISSUE:
WON the retrenchment was valid.
HELD:
NO. Article 283 of the Labor Code provides:
Article 283. Closure of establishment and reduction of
personnel. — The employer may also terminate then employment of any
employee due to the installation of labor saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of operation of
the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on
the workers and the Ministry of Labor and Employer at least one (1)
month before the intended date thereof. In case of termination due
to the installation of labor saving devices or redundancy, the worker
affected thereby shall be entitled to a se pay equivalent to at least his
one (1) month pay or to at least one (1) month pay for every year of
service, whichever is higher. In case of retrenchment to prevent losses
and in cases, of closures or cessation of operations of establishment or
undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or at least one
half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1) whole year.
(Emphasis supplied) The phrase "to Prevent losses" means
that retrenchment or termination of the services of some employees is
authorized to be undertaken by the employer sometime before the losses
anticipated are actually sustained or realized. It is not, in other words, the
intention of the lawmaker to compel the employer to stay his hand and
keep all his employees until sometime after losses shall have in fact
materialized.
We consider it may be useful to sketch the general standards
in terms of which the acts of petitioner employer must be appraised.
Firstly, the losses expected should be substantial and not merely de
minimis in extent. If the loss purportedly sought to be forestalled by
retrenchment is clearly shown to be insubstantial and inconsequential in
character, the bona fide nature of the retrenchment would appear to be
seriously in question. Secondly, the substantial loss apprehended must
be reasonably imminent, as such imminence can be perceived
objectively and in good faith by the employer. There should, in other
words, be a certain degree of urgency for the retrenchment, which is after
all a drastic recourse with serious consequences for the livelihood of the
employees retired or otherwise laid-off. Because of the consequential
nature of retrenchment, it must, thirdly, be reasonably necessary and
likely to effectively prevent the expected losses. The employer should
have taken other measures prior or parallel to retrenchment to forestall
losses, i.e., cut other costs than labor costs. An employer who, for
instance, lays off substantial numbers of workers while continuing
to dispense fat executive bonuses and perquisites or so-called "golden
parachutes", can scarcely claim to be retrenching in good faith to avoid
losses. To impart operational meaning to the constitutional policy of
providing "full protection" to labor, the employer's prerogative to bring
down labor costs by retrenching must be exercised essentially as a
measure of last resort, after less drastic means — e.g., reduction of both
management and rank-and-file bonuses and salaries, going on reduced
time, improving manufacturing efficiencies, trimming of marketing
and advertising costs, etc. — have been tried and found wanting.
Lastly, but certainly not the least important, alleged if already realized,
and the expected imminent losses sought to be forestalled, must be
proved by sufficient and convincing evidence. The reason for requiring
this quantum of proof is readily apparent: any less exacting standard of
proof would render too easy the abuse of this ground for termination of
services of employees.
In this case, there was no proof of actual declining gross and
net revenues submitted. No audited financial statements showing the
financial condition of petitioner corporation during the above mentioned
crop years were submitted. Since financial statements audited by
independent external auditors constitute the normal method of proof of
the profit and loss performance of a company, it is not easy to
understand why petitioner should have failed to submit such financial
statements. Petitioner made passing reference to cost reduction
measures it had allegedly undertaken, it was, once more, a fairly
conspicuous failure to specify the cost-reduction measures actually
undertaken in good faith before resorting to retrenchment.
126 EDGE APPAREL, INC. vs NLRC
(JUSTIFIED – Serious, actual and real business loss; LAST
RESORT)
FACTS:
Pursuing its retrenchment program, petitioner Edge Apparel,
Inc., dismissed private respondents Josephine Antipuesto, Norina Ando,
Juliet Baguio, Apolinaria Velonta, Corazon Pino and Josephine Cañete
from employment effective 03 September 1992. Feeling aggrieved,
Antipuesto, et al., consulted with the Regional Director of the Department
of Labor and Employment ("DOLE") who opined that it would be best for
them to receive the separation pay being offered by the corporation. His
advice was heeded.
The subsequent receipt of their separation pay benefits,
nevertheless, did not deter Antipuesto, et al., from later going through
with their complaint for illegal dismissal against the corporation. The
charge averred that the retrenchment program was a mere subterfuge
used by Edge Apparel to give a semblance of regularity and validity to
the dismissal of the complainants.
Edge Apparel countered that its financial obligations,
amounting to about P8 Million, had begun to eat up most of its capital
outlay and resulted in unabated losses of P681,280.00 in 1989,
P262,741.00 in 1990, P162,170.00 in 1991 and P749,294.00 in 1992,
constraining the company to adopt and implement a retrenchment
program.
ISSUE:
WON there was a valid retrenchment.
HELD:
YES. Retrenchment is an economic ground to reduce the
number of employees. In order to be justified, the termination of
employment by reason of retrenchment must be due to business losses
or reverses which are serious, actual and real. Not every loss incurred
or expected to be incurred by the employer will justify retrenchment,
since, in the nature of things, the possibility of incurring losses is
constantly present, in greater or lesser degree, in carrying on the
business operations.
Retrenchment is normally resorted to by management during
periods of business reverses and economic difficulties occasioned by
such events as recession, industrial depression, or seasonal fluctuations.
It is an act of the employer of reducing the work force because of losses
in the operation of the enterprise, lack of work, or considerable reduction
on the volume of business. Retrenchment is, in many ways, a measure of
last resort when other less drastic means have been tried and found to
be inadequate. A lull caused by lack of orders or shortage of materials
must be of such nature as would severely affect the continued business
operations of the employer to the detriment of all and sundry if not
properly addressed. The institution of "new methods or more efficient
machinery, or of automation" is technically a ground for termination of
employment by reason of installation of labor-saving devices but
where the introduction of these methods is resorted to not merely to
effect greater efficiency in the operations of the business but principally
because of serious business reverses and to avert further losses, the
device could then verily be considered one of retrenchment. In this case,
the Labor Arbiter and the NLRC both concluded that there had been a
valid ground for the retrenchment of private respondents. The documents
presented in evidence were found to "conclusively show that (petitioner)
suffered serious financial losses." The general standards or elements
needed for the retrenchment to be valid — i.e., that the losses expected
are substantial and not merely de minimis in extent; that the expected
losses are reasonably imminent such as can be perceived objectively
and in good faith by the employer; that the retrenchment is reasonably
necessary and likely to effectively prevent the expected losses; and that
the imminent losses sought to be forestalled are substantiated — were
adequately shown in the present case.
127 FE S. SEBUGUERO vs NLRC and G.T.I. SPORTSWEAR
CORPORATION
(BASIC REQUISITES; MANDATORY NOTICE; MERELEY
DEFECTIVE)
FACTS:
Petitioners were among the thirty-eight (38) regular employees
of private respondent GTI Sportswear Corporation, who were given
"temporary lay-off" notices by the latter due to alleged lack of work and
heavy losses caused by the cancellation of orders from abroad and by
the garments embargo of 1990.
Believing that their "temporary lay-off" was a ploy to dismiss
them, resorted to because of their union activities and was in violation of
their right to security of tenure since there was no valid ground therefor,
the 38 laid-off employees filed with the Labor Arbiter's office in the
National Capital Region complaints for illegal dismissal, unfair labor
practice, underpayment of wages under Wage Orders Nos. 01 and 02,
and non -payment of overtime pay and 13th month pay.
GTI denied the claim of illegal dismissal and asserted that it
was its prerogative to lay-off its employees temporarily for a period not
exceeding six months to prevent losses due to lack of work or job orders
from abroad, and that the lay-off affected both union and non-union
members. It justified its failure to recall the 38 laid-off employees after the
lapse of six months because of the subsequent cancellations of job
orders made by its foreign principals, a fact which was communicated to
the petitioners and the other complainants who were all offered
severance pay
ISSUE:
WON there was a valid retrenchment.
HELD:
YES but it is defective due to lack of procedural notice.
Retrenchment, on the other hand, is used interchangeably with the term
"lay-off." It is the termination of employment initiated by the employer
through no fault of the employee's and without prejudice to the latter,
resorted to by management during periods of business recession,
industrial depression, or seasonal fluctuations, or during lulls occasioned
by lack of orders, shortage of materials, conversion of the plant for a new
production program or the introduction of new methods or more efficient
machinery, or of automation.
Simply put, it is an act of the employer of dismissing employees
because of losses in the operation of a business, lack of work, and
considerable reduction on the volume of his business, a right consistently
recognized and affirmed by this Court.
To determine, therefore, whether the petitioners were validly
retrenched or were illegally dismissed, we must determine whether there
was compliance with the law regarding a valid retrenchment at anytime
within the six month-period that they were temporarily laid-off. Under the
aforequoted Article 283 of the Labor Code, there are three basic
requisites for a valid retrenchment:
(1) the retrenchment is necessary to prevent losses and such
losses are proven;
(2) written notice to the employees and to the Department of
Labor and Employment at
least one month prior to the intended date of retrenchment; and
(3) payment of separation pay equivalent to one month pay or
at least 1/2 month pay for every year of service, whichever is higher.
The requirement of notice to both the employees concerned
and the Department of Labor and Employment (DOLE) is mandatory
and must be written and given at least one month before the
intended date of retrenchment. In this case, it is undisputed that the
petitioners were given notice of the temporary layoff. There is, however,
no evidence that any written notice to permanently retrench them was
given at least one month prior to the date of the intended retrenchment.
The NLRC found that GTI conveyed to the petitioners the impossibility of
recalling them due to the continued unavailability of work. But what the
law requires is a written notice to the employees concerned and
that requirement is mandatory. The notice must also be given at least
one month in advance of the intended date of retrenchment to enable the
employees to look for other means of employment and therefore to ease
the impact of the loss of their jobs and the corresponding income. That
they were already on temporary lay-off at the time notice should have
been given to them is not an excuse to forego the one-month written
notice because by this time, their lay-off is to become permanent and
they were definitely losing their employment.
The lack of written notice to the petitioners and to the DOLE
does not, however, make the petitioners' retrenchment illegal such that
they are entitled to the payment of back wages and separation pay in lieu
of reinstatement as they contend. Their retrenchment, for not having
been effected with the required notices, is merely defective. In those
cases where we found the retrenchment to be illegal and ordered the
employees' reinstatement and the payment of back wages, the validity of
the cause for retrenchment, that is the existence of imminent or actual
serious or substantial losses, was not proven. But here, such a cause is
present as found by both the Labor Arbiter and the NLRC. There is only a
violation by GTI of the procedure prescribed in Article 283 of the Labor
Code in effecting the retrenchment of the petitioners. It is now settled that
where the dismissal of an employee is in fact for a just and valid cause
and is so proven to be but he is not accorded his right to due process,
i.e., he was not furnished the twin requirements of notice and the
opportunity to be heard, the dismissal shall be upheld but the employer
must be sanctioned for non-compliance with the requirements of
or for failure to observe due process.
128 Plastimer Industrial Corp. v. Gopo, G.R. No. 183390, February
16, 2011
(DEFECTIVE NOTICE AND TEMPORARY NET INCOME DOES NOT
RENDER RETRENCHMENT ILLEGAL)
Facts:
The Personnel and Administration Manager of Plastimer issued
a Memorandum informing all its employees of the decision of the Board
of Directors to downsize and reorganize its business operations due to
withdrawal of investments and shares of stocks which resulted in the
change of its corporate structure. On 14 May 2004, the employees of
Plastimer, including respondent Gopo and other employees were served
written notices of their termination effective 13 June 2004. Plastimer and
Plastimer Industrial Corporation Christian Brotherhood (PICCB), the
incumbent sole and exclusive collective bargaining representative of all
rank and file employees, entered into a Memorandum of Agreement
(MOA) relative to the terms and conditions that would govern the
retrenchment of the affected employees. On 26 May 2004, Plastimer
submitted to the DOLE an Establishment Termination Report containing
the list of the employees affected by the reorganization and downsizing.
The affected employees, including respondents, signed individual
“Release Waiver and Quitclaim.”
Thereafter, respondents filed a complaint against Plastimer and
its President Teo Kee Bin (petitioners) before the Labor Arbiter for illegal
dismissal with prayer for reinstatement and full backwages,
underpayment of separation pay, moral and exemplary damages and
attorney’s fees.
Respondents alleged that they did not voluntarily relinquish
their jobs and that they were required to sign the waivers and quitclaims
without giving them an opportunity to read them and without explaining
their contents; and that Plastimer failed to establish the causes/valid
reasons for the retrenchment and to comply with the one-month notice to
the DOLE as well as the standard prescribed under the Collective
Bargaining Agreement between Plastimer and the employees. Petitioners
countered that the retrenchment was a management prerogative and that
respondents got their retrenchment or separation pay even before the
effective date of their separation from service.
The Labor Arbiter ruled in favor of petitioners. It held that
petitioners were able to prove that there was a substantial withdrawal of
stocks that led to the downsizing of the workforce; that notice to the
affected employees were given on 14 May 2004, 30 days before its
effective date on 14 June 2004, and it was only the notice to the DOLE
that was filed short of the 30-day period; that respondents claimed their
separation pay in accordance with the MOA; and that respondents could
not claim ignorance of the contents of the waivers and quitclaims
because they were assisted by the union President and their counsel in
signing them.
On appeal, the NLRC affirmed the Labor Arbiter’s decision.
The Court of Appeals reversed the NLRC decision and found
that petitioners have been illegally dismissed.
The Court of Appeals ruled that there was no valid cause for
retrenchment; that while Plastimer claimed financial losses from 2001 to
2004, records showed an improvement of its finances in 2003; that
Plastimer failed to use a reasonable and fair standard or criteria in
ascertaining who would be dismissed and who would be retained among
its employees; that the MOA between Plastimer and PICCB only
recognized the need for partial retrenchment and the computation of
retrenchment pay without disclosing the criteria in the selection of the
employees to be retrenched; and that the union President and the
PICCB’s counsel were not present when the retrenched employees were
made to sign the waivers and quitclaims.
Hence, the petition before this Court.
Issue:
WON respondents were illegally retrenched by petitioners.
Ruling:
The petition has merit.
This Court is not precluded from reviewing the factual issues
when there are conflicting findings by the Labor Arbiter, the NLRC and
the Court of Appeals. In this case, we find that the findings of the Labor
Arbiter and the NLRC are more in accord with the evidence on record.
One-Month Notice of Termination of Employment Article 283 of
the Labor Code provides:
ART. 283. Closure of establishment and reduction of
personnel. - The employer may also terminate the employment of any
employee due to the installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of operation of
the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on
the workers and the Department of Labor and Employment at least one
(1) month before the intended date thereof. xxx
In this case, Plastimer submitted the notice of termination of employment
to the DOLE on 26 May 2004. However, notice to the affected employees
were given to them on 14 May 2004 or 30 days before the effectivity of
their termination from employment on 13 June 2004. While notice to the
DOLE was short of the one-month notice requirement, the affected
employees were sufficiently informed of their retrenchment 30 days
before its effectivity. Petitioners’ failure to comply with the one-month
notice to the DOLE is only a procedural infirmity and does not render
the retrenchment illegal. In Agabon v. NLRC, we ruled that when the
dismissal is for a just cause, the absence of proper notice should not
nullify the dismissal or render it illegal or ineffectual. Instead, the
employer should indemnify the employee for the violation of his statutory
rights. Here, the failure to fully comply with the one-month notice of
termination of employment did not render the retrenchment illegal but it
entitles respondents to nominal damages.
Validity of Retrenchment
The fact that there was a net income in 2003 does not justify
the Court of Appeals’ ruling that there was no valid reason for the
retrenchment.
Records showed that the net income of P6,185,707.05 for 2003
was not even enough for petitioners to recover from the P52,904,297.88
loss in 2002. Article 283 of the Labor Code recognizes retrenchment to
prevent losses as a right of the management to meet clear and
continuing economic threats or during periods of economic recession to
prevent losses. There is no need for the employer to wait for substantial
losses to materialize before exercising ultimate and drastic option to
prevent such losses.
Validity of Waivers and Quitclaims
The Court has ruled that a waiver or quitclaim is a valid and
binding agreement between the parties, provided that it constitutes a
credible and reasonable settlement, and that the one accomplishing it
has done so voluntarily and with a full understanding of its import. We
agree with the Labor Arbiter and the NLRC that respondents were
sufficiently apprised of their rights under the waivers and quitclaims that
they signed. Each document contained the signatures of Marcaida,
PICCB President, and Atty. Diwa, the counsel for the union, which
proved that respondents were duly assisted when they signed the
waivers and quitclaims. Further, Marcaida’s letter to Teo Kee Bin, dated
28 May 2004, proved that proper assistance was extended upon
respondents. Hence, we rule that the waivers and quitclaims that
respondents signed were valid.
WHEREFORE, we SET ASIDE the Decision and Resolution of
the Court of Appeals, and hereby REINSTATE the Decision of the Labor
Arbiter and the Resolution of the NLRC upholding the validity of
respondents’ retrenchment with MODIFICATION that petitioners pay
each of the
respondents the amount of P30,000 as nominal damages for non-
compliance with statutory due process.
129-130 Internation management Services vs. Logarta, G.R. No.
163657, April 18, 2012
(5 STRICT REQUIREMENTS)
Facts:
Recruitment agency, International Management Services
(IMS), owned and operated by Marilyn C. Pascual, deployed respondent
Roel P. Logarta to work for Petrocon Arabia Limited (Petrocon) in
Alkhobar, Kingdom of Saudi Arabia, in connection with general
engineering services of Petrocon for the Saudi Arabian Oil Company
(Saudi Aramco). Respondent was employed for a period of two (2) years,
commencing on October 2, 1997, with a monthly salary of eight hundred
US Dollars (US$800.00).
On April 29, 1998, Saudi Aramco notified Petrocon that due to
changes in the general engineering services work forecast for 1998, the
man hours that were formerly allotted to Petrocon is going to be reduced
by 40% which constrained Petrocon to reduce its personnel.
Thus, on June 1, 1998, Petrocon gave respondent a written notice
informing the latter that due to the lack of project works related to his
expertise, he is given a 30-day notice of termination, and that his last
day of work with Petrocon will be on July 1, 1998. Petrocon also informed
respondent that all due benefits in accordance with the terms and
conditions of his employment contract will be paid to respondent,
including his ticket back to the Philippines.
Before his departure from Saudi Arabia, respondent received his final
paycheck from Petrocon amounting SR7,488.57.
Upon his return, respondent filed a complaint with the Regional
Arbitration Branch VII, National Labor Relations Commission (NLRC),
Cebu City, against petitioner as the recruitment agency which employed
him for employment abroad. In filing the complaint, respondent sought to
recover his unearned salaries covering the unexpired portion of his
employment contract with Petrocon on the ground that he was illegally
dismissed.
The Labor Arbiter rendered judgment in favor of the respondent
and ordered petitioner to pay the peso equivalent of US$5,600.00 based
on the rate at the time of actual payment, as payment of his wages for
the unexpired portion of his contract of employment. The NLRC on
appeal affirmed the Labor Arbiter’s decision but reduced the award to
only US$4,800.00 or its peso equivalent at the time of payment. The CA
likewise dismissed the petition and affirmed the NLRC decision.
Issue: Whether or not respondents dismissal through retrenchment
illegal.
Ruling: No. Retrenchment is the reduction of work personnel usually due
to poor financial returns, aimed to cut down costs for operation
particularly on salaries and wages. It is one of the economic grounds to
dismiss employees and is resorted by an employer primarily to avoid or
minimize business losses.
Retrenchment programs are purely business decisions within
the purview of a valid and reasonable exercise of management
prerogative. It is one way of downsizing an employer's workforce and is
often resorted to by the employer during periods of business recession,
industrial depression, or seasonal fluctuations, and during lulls in
production occasioned by lack of orders, shortage of materials,
conversion of the plant for a new production program, or introduction of
new methods or more efficient machinery or automation. It is a valid
management prerogative, provided it is done in good faith and the
employer faithfully complies with the substantive and procedural
requirements laid down by law and jurisprudence.
Philippine Law recognizes retrenchment as a valid cause
for the dismissal of a migrant or overseas Filipino worker under
Article 283 of the Labor Code.
Thus, retrenchment is a valid exercise of management
prerogative subject to the strict requirements set by jurisprudence, to wit:
(1)That the retrenchment is reasonably necessary and likely
to prevent business losses which, if already incurred, are not merely de
minimis, but substantial, serious, actual and real, or if only expected, are
reasonably imminent as perceived objectively and in good faith by the
employer;
(2)That the employer served written notice both to the
employees and to the Department of Labor and Employment at least
one month prior to the intended date of retrenchment;
(3)That the employer pays the retrenched employees
separation pay equivalent to one month pay or at least 1/2 month pay
for every year of service, whichever is higher;
(4)That the employer exercises its prerogative to retrench
employees in good faith for the advancement of its interest and not to
defeat or circumvent the employees' right to security of tenure; and
(5)That the employer used fair and reasonable criteria in
ascertaining who would be dismissed and who would be retained among
the employees, such as status,…efficiency, seniority, physical fitness,
age, and financial hardship for certain workers. 28 Applying the above-
stated requisites for a valid retrenchment in the case at bar, it is apparent
that the first, fourth and fifth requirements were complied with by
respondent's employer. However, the second and third requisites were
absent when Petrocon terminated the services of respondent.
As aptly found by the NLRC and justly sustained by the CA,
Petrocon exercised its prerogative to retrench its employees in good faith
and the considerable reduction of work allotments of Petrocon by Saudi
Aramco was sufficient basis for Petrocon to reduce the number of its
personnel.
As for the notice requirement, however, contrary to petitioner's
contention, proper notice to the DOLE within 30 days prior to the
intended date of retrenchment is necessary and must be complied with
despite the fact that respondent is an overseas Filipino worker. In the
present case, although respondent was duly notified of his termination by
Petrocon 30 days before its effectivity, no allegation or proof was
advanced by petitioner to establish that Petrocon ever sent a notice to
the DOLE 30 days before the respondent was terminated. Thus, this
requirement of the law was not complied with.
In the case at bar, despite the fact that respondent was
employed by Petrocon as an OFW in Saudi Arabia, still both he and his
employer are subject to the provisions of the Labor Code when
applicable. The basic policy in this jurisdiction is that all Filipino workers,
whether employed locally or overseas, enjoy the protective mantle of
Philippine labor and social legislations.
Also, respondent is entitled to the payment of his separation
pay. However, this Court disagrees with the conclusion of the Labor
Arbiter, the NLRC and the CA, that respondent should be paid his
separation pay in accordance with the provision of Section 10 of R.A. No.
8042. A plain reading of the said provision clearly reveals that it applies
only to an illegally dismissed overseas contract worker or a worker
dismissed from overseas employment without just, valid or authorized
cause.
In the case at bar, notwithstanding the fact that respondent's
termination from his employment was procedurally infirm, having not
complied with the notice requirement, nevertheless the same remains to
be for a just, valid and authorized cause, i.e., retrenchment as a valid
exercise of management prerogative. To stress, despite the employer's
failure to comply with the one-month notice to the DOLE prior to
respondent's termination, it is only a procedural infirmity which does not
render the retrenchment illegal. In Agabon v. NLRC, this Court ruled that
when the dismissal is for a just cause, the absence of proper notice
should not nullify the dismissal or render it illegal or ineffectual. Instead,
the employer should indemnify the employee for violation of his statutory
rights. Consequently, it is Article 283 of the Labor Code and not Section
10 of R.A. No. 8042 that is controlling. Thus, respondent is entitled to
payment of separation pay equivalent to one (1) month pay, or at least
one-half (1/2) month pay for every year of service, whichever is higher.
Considering that respondent was employed by Petrocon for a period of
eight (8) months, he is entitled to receive one (1) month pay as
separation pay. In addition, pursuant to current jurisprudence, for failure
to fully comply with the statutory due process of sufficient notice,
respondent is entitled to nominal damages in the amount P50,000.00.
131 WATERFRONT CEBU CITY HOTEL, Petitioner, v. MA. MELANIE
P. JIMENEZ, JACQUELINE C. BAGUIO, LOVELLA V. CARILLO, and
MAILA G. ROBLE, Respondents.
(UNIQUE DEFENSE – ONLY THE DEPARTMENT IS INCURRING THE
LOSS, NOT THE OVERALL HOTEL PERFORMANCE)
FACTS:
Herein respondents were hired for Club Waterfront, a division
under petitioner Waterfront Cebu City Hotel which catered to foreign high
stakes gamblers for different positions.
On 12 May 2003, respondents, along with 41 other employees,
received identical letters of termination from petitioner Director of Human
Resources informing them of the temporary suspension of business of
the Club.
The following day, petitioner served the notice of suspension of
business with the DOLE). The dismissed employees were offered
separation pay equivalent to half-month pay for every year of service.
The Club closure took effect on 15 June 2003.
On 26 June 2003, respondents filed a complaint before the
Labor Arbiter for illegal dismissal, illegal suspension, and non-payment of
salaries and other monetary benefits. They likewise prayed for damages
and attorney fees.
Respondents maintained that they are employees of petitioner
assigned to the Club, hence they should have been allowed to work in
other departments of the hotel.
Oppositely, petitioner averred that since April 2002, the Club
has been incurring losses that it had to temporarily cease its operations
effective 15 June 2003. To support the allegations of losses, petitioner
presented financial statements of Waterfront Promotion, Ltd. Petitioner
argued that pursuant to Article 286 of the Labor Code, the temporary
suspension of business operations does not terminate employment.
Thus, respondents have no cause of action against them.
On 12 December 2003, the labor arbiter ruled in favor of
petitioner and upheld the closure of the Club business operations as a
management prerogative. The petitioner was, however, directed to
comply with Article 283 of the Labor Code and to pay complainants their
separation pay equivalent to one-half month pay for every year of
service, a fraction of at least 6 months being considered as one year.
Respondents appealed to the NLRC which issued a Decision
affirming the ruling of the Labor Arbiter. After the denial of respondents
motion for reconsideration, they elevated the case to the Court of
Appeals.
Respondents argued that the NLRC should have considered
the financial statements of the petitioner Hotel and not merely of the
Club, which is only a division of the Hotel. According to respondents, the
permanent closure of the Club resulted in retrenchment but petitioner
failed to prove that it complied with the standards for retrenchment. On 5
July 2006, the Court of Appeals rendered a Decision reversing the
findings and conclusions of the NLRC.
The appellate court found that petitioner Hotel is the actual
employer of respondents, thus the evidence of losses and closure of the
Club is immaterial and irrelevant.
Petitioner filed a motion for reconsideration but it was denied in
a Resolution dated 15 August 2006. Hence, this petition for review on
certiorari.
ISSUE:
Whether or not the evidence of losses and closure of Club
Waterfront is immaterial and irrelevant to the termination of petitioners?
HELD:
The ruling of the Court of Appeals is reversed and set
aside.
At the outset, it should be stated that the respondents cannot
be accommodated in other departments of the Hotel. The duties and
functions they perform are peculiar to the positions they hold in the Club.
It is likewise undisputed that the Club remained closed and there is no
other department in the Hotel similar to the Club and which catered to
foreign high stakes gamblers. Verily, reinstatement cannot be and could
not have been an option for petitioner Hotel.
For the purpose of proving financial losses, petitioner
presented the financial statements of Waterfront Promotion, Ltd. which
petitioner describes as the company which promotes, markets and
finances the Club.
A review of the corporate structure of the Club as contained in
the financial statements submitted by petitioner reveals that it is actually
a wholly-owned subsidiary of Waterfront Promotion, Ltd. Strictly
speaking, the Club is not related to petitioner except to say that they are
two different subsidiaries of one parent corporation, i.e., Waterfront
Philippines. Petitioner, then, could have right at the beginning avoided
the conflict with respondents by setting itself apart from them. Petitioner
could have invoked the separateness from the Hotel of the Club which
employed respondents. Petitioner did not do so. Instead, and at the
outset, it formally presented itself as the respondents employer when,
through its Director of Human Resources, it informed respondents about
the temporary suspension of the business of the Club and forthwith
served the notices of suspension of business on DOLE.
The consolidated financial statements that were prepared in
the name of Waterfront Promotion refer to the casino operations of the
Club. A consolidated financial statement is usually prepared for a parent
company and its subsidiaries, the purpose of which is to provide an
overview of the financial condition of the group of companies as a single
entity. The Club, being a wholly-owned subsidiary of Waterfront
Promotion, Ltd. operates under the management, supervision and control
of Waterfront Promotion, Ltd. The relationship between these two
companies is so intertwined that the Club is practically considered a
department or division of Waterfront Promotion, Ltd.
A review of the consolidated financial statement proves
petitioner assertion that the losses there reflected refer to the losses of
the Club. The consolidated financial statement and the corporate
relationships it indicates, cannot, however, be relied upon by petitioner to
avoid this particular labor dispute because, as already stated, petitioner
itself has been claiming from the very beginning that the Club is only a
division/department of the hotel.
Verily, retrenchment and not closure was effected to warrant
the valid dismissal of respondents. Petitioner has not totally ceased its
operations. It merely closed down a department.
Retrenchment is the termination of employment initiated by the
employer through no fault of and without prejudice to the employees. It is
resorted to during periods of business recession, industrial depression, or
seasonal fluctuations or during lulls occasioned by lack of orders,
shortage of materials, conversion of the plant for a new production
program or the introduction of new methods or more efficient machinery
or of automation. It is an act of the employer of dismissing employees
because of losses in the operation of a business, lack of work, and
considerable reduction on the volume of his business.
In case of retrenchment, proof of financial losses becomes the
determining factor in proving its legitimacy. In establishing a unilateral
claim of actual or potential losses, financial statements audited by
independent external auditors constitute the normal method of proof of
profit and loss performance of a company. The condition of business
losses justifying retrenchment is normally shown by audited financial
documents like yearly balance sheets and profit and loss statements as
well as annual income tax returns.
Retrenchment is subject to faithful compliance with the
substantative and procedural requirements laid down by law and
jurisprudence. For a valid retrenchment, the following elements must be
present:
(1) That retrenchment is reasonably necessary and likely to
prevent business losses which, if already incurred, are not merely de
minimis, but substantial, serious, actual and real, or if only expected, are
reasonably imminent as perceived objectively and in good faith by the
employer;
(2) That the employer served written notice both to the
employees and to the Department of Labor and Employment at least one
month prior to the intended date of retrenchment;
(3) That the employer pays the retrenched employees
separation pay equivalent to one
(1) month pay or at least ½ month pay for every year of service,
whichever is higher;
(4) That the employer exercises its prerogative to retrench
employees in good faith for the advancement of its interest and not to
defeat or circumvent the employees right to security of tenure; and
(5) That the employer used fair and reasonable criteria in
ascertaining who would be dismissed and who would be retained among
the employees, such as status, efficiency, seniority, physical fitness, age,
and financial hardship for certain workers.
All these elements were successfully proven by petitioner.
First, the huge losses suffered by the Club for the past two years had
forced petitioner to close it down to avert further losses which would
eventually affect the operations of petitioner. Second, all 45 employees
working under the Club were served with notice of termination. The
corresponding notice was likewise served to the DOLE one month prior
to retrenchment. Third, the employees were offered separation pay,
most of whom have accepted and opted not to join in this complaint.
Fourth, cessation of or withdrawal from business operations was bona
fide in character and not impelled by a motive to defeat or circumvent the
tenurial rights of employees. Neither is there a showing that petitioner
carried out the closure of the business in bad faith. No labor dispute
existed between management and the employees when the latter were
terminated.
132 Legend Hotel (Manila) vs Realuyo AKA Roa
(SUFFICIENT AND CONVINCING EVIDENCE)
Facts:
Respondent averred that he had worked as a pianist at the
Legend Hotel’s Tanglaw Restaurant from September 1992 with an initial
rate of P400.00/night that was given to him after each night’s
performance; that his rate had increased to P750.00/night; and that
during his employment, he could not choose the time of performance,
which had been fixed from 7:00 pm to 10:00 pm for three to six
times/week. He added that the Legend Hotel’s restaurant manager had
required him to conform with the venue’s motif; that he had been
subjected to the rules on employees’ representation checks and chits, a
privilege granted to other employees; that on July 9, 1999, the
management had notified him that as a cost-cutting measure his services
as a pianist would no longer be required effective July 30, 1999; that he
disputed the excuse, insisting that Legend Hotel had been lucratively
operating as of the filing of his complaint; and that the loss of his
employment made him bring his complaint.
Issues:
1. Whether or not petition for certiorari to the CA is proper.
2. Whether or not there is ER-EE relationship.
3. Whether or not retrenchment as a ground for respondent’s
dismissal is valid.
Held:
YES. There is no longer any doubt that a petition for certiorari
brought to assail the decision of the NLRC may raise factual issues, and
the CA may then review the decision of the NLRC and pass upon such
factual issues in the process.8 The power of the CA to review factual
issues in the exercise of its original jurisdiction to issue writs of certiorari
is based on Section 9 of Batas Pambansa Blg. 129, which pertinently
provides that the CA “shall have the power to try cases and conduct
hearings, receive evidence and perform any and all acts necessary to
resolve factual issues raised in cases falling within its original and
appellate jurisdiction, including the power to grant and conduct new trials
or further proceedings.”
YES. Petitioner actually wielded the power of selection at the
time it entered into the service contract dated September 1, 1992 with
respondent. This is true, notwithstanding petitioner’s insistence that
respondent had only offered his services to provide live music at
petitioner’s Tanglaw Restaurant, and despite petitioner’s position that
what had really transpired was a negotiation of his rate and time of
availability. The power of selection was firmly evidenced by, among
others, the express written recommendation dated January 12, 1998 by
Christine Velazco, petitioner’s restaurant manager, for the increase of his
remuneration.
Respondent’s remuneration, albeit denominated as talent fees,
was still considered as included in the term wage in the sense and
context of the Labor Code, regardless of how petitioner chose to
designate the remuneration. Anent this, Article 97(f) of the Labor Code
clearly states:
xxx wage paid to any employee shall mean the remuneration or
earnings, however designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which is
payable by an employer to an employee under a written or unwritten
contract of employment for work done or to be done, or for services
rendered or to be rendered, and includes the fair and reasonable value,
as determined by the Secretary of Labor, of board, lodging, or other
facilities customarily furnished by the employer to the employee.
That respondent worked for less than eight hours/day was of
no consequence and did not detract from the CA’s finding on the
existence of the employer-employee relationship. In providing that the
“normal hours of work of any employee shall not exceed eight (8) hours a
day,” Article 83 of the Labor Code only set a maximum of number of
hours as “normal hours of work” but did not prohibit work of less than
eight hours.
The power of the employer to control the work of the employee
is considered the most significant determinant of the existence of an
employer-employee relationship. This is the so-called control test, and is
premised on whether the person for whom the services are performed
reserves the right to control both the end achieved and the manner and
means used to achieve that end.
A review of the records shows, however, that respondent
performed his work as a pianist under petitioner’s supervision and
control. Specifically, petitioner’s control of both the end achieved and the
manner and means used to achieve that end was demonstrated by the
following, to wit: a. He could not choose the time of his performance,
which petitioners had fixed from 7:00 pm to 10:00 pm, three to six times a
week; b. He could not choose the place of his performance; c. The
restaurant’s manager required him at certain times to perform only
Tagalog songs or music, or to wear barong Tagalog to conform to the
Filipiniana motif; and d. He was subjected to the rules on employees’
representation check and chits, a privilege granted to other employees.
Relevantly, it is worth remembering that the employer need not actually
supervise the performance of duties by the employee, for it sufficed that
the employer has the right to wield that power.
NO. Retrenchment is one of the authorized causes for the
dismissal of employees recognized by the Labor Code. It is a
management prerogative resorted to by employers to avoid or to
minimize business losses. On this matter, Article 283 of the Labor Code.
The Court has laid down the following standards that an
employer should meet to justify retrenchment and to foil abuse, namely:
(a) The expected losses should be substantial and not merely de minimis
in extent; (b) The substantial losses apprehended must be reasonably
imminent; (c) The retrenchment must be reasonably necessary and likely
to effectively prevent the expected losses; and (d) The alleged losses, if
already incurred, and the expected imminent losses sought to be
forestalled must be proved by sufficient and convincing evidence.
Anent the last standard of sufficient and convincing evidence, it
ought to be pointed out that a less exacting standard of proof would
render too easy the abuse of retrenchment as a ground for termination of
services of employees.
In termination cases, the burden of proving that the dismissal
was for a valid or authorized cause rests upon the employer. Here,
petitioner did not submit evidence of the losses to its business operations
and the economic havoc it would thereby imminently sustain. It only
claimed that respondent’s termination was due to its “present
business/financial condition.” This bare statement fell short of the norm to
show a valid retrenchment. Hence, we hold that there was no valid cause
for the retrenchment of respondent.
133 DIGITAL TELECOMMUNIC ATIONS PHIL. , INC. VS. DIGITEL E
MPLOYEES UNION
(NO GOOD FAITH)
FACTS:
By virtue of a certification election, Digitel Employees Union
(Union) became the exclusive bargaining agent of all rank and file
employees of Digitel in 1994. The Union and Digitel then commenced
collective bargaining negotiations which resulted in a bargaining
deadlock. The Union threatened to go on strike, but then the Labor
Secretary assumed jurisdiction over the dispute and eventually directed
the parties to execute a CBA. 2 However, no CBA was forged between
Digitel and the Union. Some Union members abandoned their
employment with Digitel. The Union later became dormant.
Ten (10) years thereafter or on 28 September 2004, Digitel
received from Esplana, who was President of the Union, a letter
containing the list of officers, CBA proposals and ground rules. 3 Digitel
was reluctant to negotiate with the Union and demanded that the latter
Union show compliance with the provisions of the Union’s Constitution
and By-laws on union membership and election of officers.
On 4 November 2004, Esplana and his group filed a case for
Preventive Mediation before the National Conciliation and Mediation
Board based on Digitel’s violation of the duty to bargain. On 25
November 2004, Esplana filed a notice of strike. On 10 March 2005, the
then Labor Secretary issued an Order4 assuming jurisdiction over the
labor dispute.
During the pendency of the controversy, Digitel Service, Inc. (Digiserv), a
non-profit enterprise engaged in call center servicing, filed with the DOLE
an Establishment Termination Report stating that it will cease its
business operation. The closure affected at least 100 employees, 42 of
whom are members of the herein respondent Union. Alleging that the
affected employees are its members and in reaction to Digiserv’s action,
Esplana and his group filed another Notice of Strike for union busting,
illegal lock-out, and violation of the assumption order. On 23 May 2005,
the Labor Secretary ordered the second notice of strike subsumed by the
previous Assumption Order.5 Meanwhile, on 14 March 2005, Digitel filed
a petition with the Bureau of Labor Relations (BLR) seeking cancellation
of the Union’s registration. In a Decision dated 11 May 2005, the
Regional Director of the DOLE dismissed the petition for
cancellation of union registration for lack of merit. The appeal filed by
Digitel with the BLR was eventually dismissed for lack of merit in a
Resolution dated 9 March 2007.
In an Order dated 13 July 2005, the Secretary of Labor directed
Digitel to commence the CBA negotiation with the Union and certified for
compulsory arbitration before the NLRC the issue of unfair labor practice.
In accordance with the 13 July 2005 Order of the Secretary of Labor, the
unfair labor practice issue was certified for compulsory arbitration before
the NLRC. On 31 January 2006, NLRC rendered a Decision dismissing
the unfair labor practice charge against Digitel but declaring the dismissal
of the 13 employees of Digiserv as illegal and ordering their
reinstatement. 10
The Union manifested that out of 42 employees, only 13
remained, as most had already accepted separation pay.
In view of this unfavorable decision, Digitel filed a petition on 9
June 2006 before the Court of Appeals, challenging the above NLRC
Decision and Resolution and arguing mainly that Digiserv employees are
not employees of Digitel.
On 18 June 2008, CA partially granted the case for ULP, thus
modifying the assailed NLRC dispositions. The CA likewise sustained the
finding that Digiserv is engaged in labor-only contracting and that its
employees are actually employees of Digitel.
Digitel filed a motion for reconsideration but was denied in a
Resolution dated 9 October 2008. Hence, this petition for review on
certiorari.
ISSUES:
1) Whether Digiserv is a legitimate contractor; and
2) Whether there was a valid dismissal.
RULING:
Digiserv is a labor-only contractor. Labor-only contracting is
expressly prohibited by our labor laws. After an exhaustive review of the
records, there is no showing that first, Digiserv has substantial
investment in the form of capital, equipment or tools. The NLRC, as
echoed by the CA, did not find substantial Digiserv’s authorized capital
stock of P 1,000,000.00. It pointed out that only P 250,000.00 of the
authorized capital stock had been subscribed and only P 62,500.00 had
been paid up. There was no increase in capitalization for the last 10
years. 19
Moreover, in the Amended Articles of Incorporation, as well as in the
General Information Sheets for the years 1994, 2001 and 2005, the
primary purpose of Digiserv is to provide manpower services. In PCI
Automation Center, Inc. v. National Labor Relations Commission,20 the
Court made the following distinction: "the legitimate job contractor
provides services while the labor-only contractor provides only
manpower. The legitimate job contractor undertakes to perform a specific
job for the principal employer while the labor-only contractor merely
provides the personnel to work for the principal employer." The services
provided by employees of Digiserv are directly related to the business of
Digitel. It is undisputed that as early as March 1994, the affected
employees, except for two, were already performing their job as Traffic
Operator which was later renamed as Customer Service Representative
(CSR). It is equally undisputed that all throughout their employment, their
function as CSR remains the same until they were terminated effective
May 30, 2005. Their long period of employment as such is an indication
that their job is directly related to the main business of DIGITEL which is
telecommunications.
Furthermore, Digiserv does not exercise control over the
affected employees. Digiserv shared the same Human Resources,
Accounting, Audit and Legal Departments with Digitel which manifested
that it was Digitel who exercised control over the performance of the
affected employees. The NLRC also relied on the letters of
commendation, plaques of appreciation and certification issued by Digitel
to the Customer Service Representatives as evidence of control.
Considering that Digiserv has been found to be engaged in
labor-only contracting, the dismissed employees are deemed employees
of Digitel.
The affected employees were illegally dismissed. In
addition to finding that Digiserv is a labor-only contractor, records teem
with proof that its dismissed employees are in fact employees of Digitel.
The NLRC enumerated these pieces of evidence, thus:
 The remaining affected employees, except for two (2), were
already hired by DIGITEL even before the existence of DIGISERV.
Likewise, the remaining affected employees continuously held the
position of Customer Service Representative, which was earlier known
as Traffic Operator, from the time they were appointed on March 1, 1994
until they were terminated on May 30, 2005.
 Further, the Certificates issued to Customer Service
Representative likewise show that they are employees of DIGITEL, Take
for example the "Service Award" issued to Ma. Loretta C. Esen, one of
the remaining affected employees. The "Service Award" was signed by
the officers of DIGITEL – the VP-Customer Services Division, the
VPHuman Resources Division and the Group Head-Human Resources
Division. It cannot be gainsaid that it is only the employer that issues
service award to its employees. 22 As an alternative argument, Digitel
maintains that the affected employees were validly dismissed on the
grounds of closure of Digiserv, a department within Digitel.
In the recent case of Waterfront Cebu City Hotel v. Jimenez, 23
we referred to the closure of a department or division of a company as
retrenchment. For a valid retrenchment, the following elements must be
present:
(1) That retrenchment is reasonably necessary and likely to
prevent business losses which, if already incurred, are not merely de
minimis, but substantial, serious, actual and real, or if only expected, are
reasonably imminent as perceived objectively and in good faith by the
employer;
(2) That the employer served written notice both to the
employees and to the Department of Labor and Employment at least one
month prior to the intended date of retrenchment;
(3) That the employer pays the retrenched employees
separation pay equivalent to one (1) month pay or at least ½ month pay
for every year of service, whichever is higher;
(4) That the employer exercises its prerogative to retrench
employees in good faith for the advancement of its interest and not to
defeat or circumvent the employees’ right to security of tenure; and
(5) That the employer used fair and reasonable criteria in
ascertaining who would be dismissed and who would be retained among
the employees, such as status, efficiency, seniority, physical fitness, age,
and financial hardship for certain workers.24 Only the first 3 elements of
a valid retrenchment had been here satisfied. Indeed, it is management
prerogative to close a department of the company. Digitel’s decision to
outsource the call center operation of the company is a valid reason to
close down the operations of a department under which the affected
employees were employed. The fifth element regarding the criteria to be
observed by Digitel clearly does not apply because all employees under
Digiserv were dismissed.
The instant case is all about the fourth element, that is,
whether or not the affected employees were dismissed in good
faith. We find that there was no good faith in the retrenchment. Prior to
the cessation of Digiserv’s operations, the Secretary of Labor had issued
the first and second assumption order. The effects of the assumption
order issued by the Secretary of Labor are two-fold. It enjoins an
impending strike on the part of the employees and orders the employer to
maintain the status quo.
There is no doubt that Digitel defied the assumption order by
abruptly closing down Digiserv. The closure of a department is not illegal
per se. What makes it unlawful is when the closure is undertaken in bad
faith. In St. John Colleges, Inc. v. St. John Academy Faculty and
Employees Union,26 bad faith was evidenced by the timing of and
reasons for the closure and the timing of and reasons for the
subsequent opening.
D. CLOSURE OF BUSINESS OPERATIONS
134 J.A.T. GENERAL SERVICES & JESUSA ADLAWAN TOROBU vs.
NLRC & JOSE F. MASCARINAS
(DEFINITION; REQUIREMENTS – (1) WRITTEN NOTICE, (2) BONA
FIDE IN CHARACTER, (3) TERMINATION PAY)
FACTS:
Jesusa Adlawan Trading & General Services (JAT) hired Jose
F. Mascarinas as helper tasked to coordinate with the cleaning and
delivery of the heavy equipment sold to customers. Initially, private
respondent was hired as a probationary employee and was paid P165
per day that was increased to P180 in July 1997 and P185 in January
1998. In October 1997, the sales of heavy equipment declined because
of the Asian currency crisis. Consequently, JAT temporarily suspended
its operations. It advised its employees, including private respondent, not
to report for work starting on the first week of March 1998 JAT indefinitely
closed shop effective May 1998. A few days after, private respondent
filed a case for illegal dismissal and underpayment of wages against
petitioners before the NLRC. On December 14, 1998, JAT filed an
Establishment Termination Report with the Department of Labor and
Employment (DOLE), notifying the latter of its decision to close its
business operations due to business losses and financial reverses.
ISSUE:
Whether or not private respondent was illegally dismissed from
employment due to closure of petitioners business
HELD:
NO. Closure of business, is the reversal of fortune of the
employer whereby there is a complete cessation of business operations
and/or an actual locking-up of the doors of establishment, usually due to
financial losses. Closure of business as an authorized cause for
termination of employment aims to prevent further financial drain upon an
employer who cannot pay anymore his employees since business has
already stopped.
ART. 283. Closure of establishment and reduction of
personnel. The employer may also terminate the employment of any
employee due to the installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of operation of
the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on
the workers and the Department of Labor and Employment at least one
(1) month before the intended date thereof. In case of retrenchment to
prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or
financial reverses, the separation pay shall be equivalent to one (1)
month pay or to at least one-half (1/2) month pay for every year of
service, whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year.
Article 283 of the Labor Code shows that closure or cessation
of business operation as a valid and authorized ground of terminating
employment is not limited to those resulting from business losses or
reverses. Said provision in fact provides for the payment of separation
pay to employees terminated because of closure of business not due to
losses, thus implying that termination of employees other than closure of
business due to losses may be valid. In the present case, while
petitioners did not sufficiently establish substantial losses to justify
closure of the business, its income statement shows declining sales
prompting the petitioners to suspend its business operations, eventually
leading to its permanent closure. On this score, we agree that undue
interference with an employers judgment in the conduct of his business is
uncalled for. Even as the law is solicitous of the welfare of employees, it
must also protect the right of an employer to exercise what is clearly a
management prerogatives. As long as the companys exercise of the
same is in good faith to advance its interest and not for the purpose of
defeating or circumventing the rights of employees under the law or a
valid agreement such exercise will be upheld.
In the event, under Article 283 of the Labor Code, three
requirements are necessary for a valid cessation of business
operations, namely: (a) service of a written notice to the employees and
to the DOLE at least one (1) month before the intended date thereof; (b)
the cessation of business must be bona fide in character; and (c)
payment to the employees of termination pay amounting to at least one-
half (1/2) month pay for every year of service, or one (1) month pay,
whichever is higher.
The closure of business operation by petitioners, in our view, is
not tainted with bad faith or other circumstance that arouses undue
suspicion of malicious intent. The decision to permanently close business
operations was arrived at after a suspension of operation for several
months precipitated by a slowdown in sales without any prospects of
improving. There were no indications that an impending strike or any
labor related union activities precipitated the sudden closure of business.
135 LA UNION CEMENT WORKERS UNION & ARNULFO ALMOITE
vs NLRC & BACNOTAN CEMENT CORPORATION (now HOLCIM
PHILIPPINES, INC.)
(CLOSURE LEADING TO REDUNDANCY; SUPPORT SERVICES)
FACTS:
Bacnotan Cement Corporation had been utilizing the wet
process technology in its operations. It then later introduced the dry
process technology as part of its modernization program. When the new
dry process technology became fully operational, the company
discovered that the dry process technology or the dry line proved to be
more efficient than the wet process technology. Thus, after studying the
situation, the company concluded that it would be uncompetitive and
impractical to operate the wet line and decided to close it down. To
implement the closure of the wet line, the company and La Union
Cement Workers Union entered into a Memorandum of Agreement
whereby the company committed to grant separation pay equivalent to
150% of the monthly basic pay for every year of service plus the
additional fixed amount of P27,000.00 to employees who would be
terminated as a result of the closure of the wet line. In a letter, Senior
Executive Vice President, notified the employees of the its decision to
mothball the wet line and the termination of those whose employment
would become unnecessary as a result of the closure. The company sent
a letter to the Department of Labor and Employment (DOLE), informing
him about the companys decision to shut down the wet line and
furnishing him the list of affected employees. The company then sent
notices of termination to more or less 200 employees including petitioner
Almoite. Upon the receipt of the separation pay, a number of the affected
employees signed individual Release Waiver and Quitclaim. However,
some 80 of its members including Almoite filed complaints for unfair labor
practice, illegal lay-off and illegal dismissal. They alleged that while the
closure affected only the wet line, among the employees terminated were
operating the dry line or performing support services for both wet and dry
lines. They further alleged that after the closure of the wet line, the
company contracted out the services performed by the employees who
were terminated.
ISSUE: Whether the termination was valid.
HELD:
YES. Petitioner Almoites work as an oiler for both the wet line
and dry line has become redundant or superfluous following the closure
of the wet line. By and large, the determination of whether to maintain or
phase out an entire department or section or to reduce personnel lies
with the management. Thus, his termination on the ground of
redundancy is an authorized cause for termination under Article 283 of
the Labor Code.
As concluded by the NLRC:
xxx
There is no dispute as to the fact that there was a partial
closure or cessation of operations with the mothballing of the old wet-
process production line of the company a situation which falls among the
authorized causes for termination allowed under Article 283 of the Labor
Code.
xxx
Neither is there any dispute that the logical and consequence
[sic] of such partial cessation of operations was to render certain
employees redundant. Obviously enough, since there was a curtailment
in operations, certain activities were rendered either excess or no longer
necessary, hence, redundant.
xxxx
The only ostensible argument presented by appellant is the
bare allegation that most of them were not exclusively assigned to the
wet process line but were performing support services for both the wet
line and the dry line. Therefore, they argue that they could not be
declared redundant by virtue of the closure of the wet line alone. This line
of argument is non sequitur, fallacious and totally untenable. It proceeds
from the erroneous premise that only those exclusively assigned to the
wet line can be declared redundant. The mere fact that an employee was
performing support services for both the wet and the dry line does not in
any way exclude him from being declared as redundant. On the contrary,
with the closure of the wet line and the consequent scaling down of
activities requiring support services, it stands to reason that there was
already an excess of employees performing support services.
Respondent had therefore all the reason to include such employees
among those whom it considered redundant.
136 MAYA FARMS EMPLOYEES ORGANIZATION,,et.al. vs. NLRC,
MAYA REALTY & LIVESTOCK, INC., MAYA FARMS, INC., and
LIBERTY FLOUR MILLS, INC.
FACTS:
Maya Farms, Inc. and Maya Realty and Livestock Corporation
belong to the Liberty Mills group of companies whose undertakings
include the operation of a meat processing plant which produces ham,
bacon, cold cuts, sausages and other meat and poultry products.
Petitioners, on the other hand, are its exclusive bargaining agents of the
employees. Private respondents announced the adoption of an early
retirement program as a cost-cutting measure considering that their
business operations suffered major setbacks over the years. The
program was voluntary and could be availed of originally only by
employees with at least eight (8) years of service but was reduced to five
(5) years. But the response to the program was nil. Thus, the early
retirement program was converted into a special redundancy program
intended to reduce the work force to an optimum number so as to make
operations more viable. A total of sixty-nine (69) employees from the two
companies availed of the special redundancy program. Later, the two
companies sent letters to sixty-six (66) employees informing them that
their respective positions had been declared redundant. The notices
likewise stated that their services would be terminated effective thirty (30)
days from receipt thereof.
Separation benefits, including the conversion of all earned
leave credits and other benefits due under existing CBAs were thereafter
paid to those affected.
Petitioners accused private respondents, among others, of
unfair labor practice, violation of CBA and discrimination. They averred
that in the dismissal of sixty-six (66) union officers and members on the
ground of redundancy, private respondents circumvented the provisions
in their CBA, which states that “In all cases of lay-off or retrenchment
resulting in termination of employment in the line of work, the Last-In-
First-Out (LIFO) Rule must always be strictly observed.” They also
alleged that the companies' claim that they were in economic crisis
was fabricated because in 1990, a net income of over 83 million pesos
was realized by Liberty Flour Mills Group of Companies.
Private respondents contend that their decision to implement a
special redundancy program was an exercise of management
prerogative which could not be interfered with unless it is shown to be
tainted with bad faith and ill motive. Private respondents explained that
they had no choice but to reduce their work force, otherwise, they would
suffer more losses.
ISSUE: WON their termination was valid.
HELD:
YES. The court sustained the companies' prerogative to adopt
the alleged redundancy/retrenchment program to minimize if not, to avert
losses in the conduct of its operations. However, the companies' decision
on this matter is not absolute. The basis for such an action must be far
from being whimsical and the same must be proved by substantial
evidence. In addition, the implementation of such a decision or policy
must be in accordance with existing laws, rules and procedure and
provisions of the CBA between the parties, if there be any. Short of any
of these conditions, management policy to pursue and terminate its
employees allegedly to avert losses, must fail.
In subject case, the 66 complaining employees were separated
from service as a result of the decision of management to limit its
operations and streamline positions and personnel requirements.
A close examination of the positions retained by management
show that said positions such as egg sorter, debonner were but the
minimal positions required to sustain the limited functions/operations of
the meat processing department. In the absence of any evidence to
prove bad faith on the part of management in arriving at such decision,
which records on hand failed to show in instant case, the rationality of the
act of management in this regard must be sustained. While it may be true
that the Liberty Flour Mills Group of Companies as a whole posted a net
income of P83.3 Million, it is admitted that with respect to operations of
the meat processing and livestock which were undertaken by herein
companies sustained losses in the sum of P2,257,649.88 (Exh. "3"). This
is the reason, as advanced by management, for its decision to streamline
positions resulting in the reduction of manpower compliment.
137 MAC ADAMS METAL ENGINEERING WORKERS UNION-
INDEPENDENT vs vs. MAC ADAMS
METAL ENGINEERING and/or LYDIA SISON, et.al.
FACTS:
MAMEWU charged private respondents MAME and GBS with
unfair labor practices (ULP) committed through union busting and illegal
closure, and illegal dismissal. They insisting that the closure of MAME
and GBS was illegal as it was calculated to bust their union, claiming
that MAME and GBS continued doing business under new business
names, i.e., MBS Machine and Industrial Supply (MBS) and MVS Heavy
Equipment Rental and Builders (MVS). Private respondent spouses
Geronimo and Lydia V. Sison, proprietors of GBS and MAME
respectively, denied the allegations explaining the closure of MAME and
GBS, because Lydia V. Sison decided to retire from business when she
became sickly, when her health did not improve despite proper medical
attention she announced her plan to close the shop. The announcement
in advance was intended to give the workers ample time to look for
alternative employment. Accordingly, she declined to accept new projects
and proceeded with the winding up of her business. Geronimo B. Sison
admitted being a part-owner of MBS which, he maintained, was an
entirely separate and distinct business enterprise from MAME and GBS.
MBS was engaged in manufacturing carton boxes and other allied
products. On the other hand, MAME and GBS were both engaged in the
businesses of machine shop operations, fabrication and construction.
ISSUE: WoN the cessation and closure of business was lawful
HELD:
YES. Closure or cessation of business operations is
allowed even if the business is not undergoing economic losses.
The owner, for any bona fide reason, can lawfully close shop at anytime.
Just as no law forces anyone to go into business, no law can compel
anybody to continue in it. It would indeed be stretching the intent and
spirit of the law if we were to unjustly interfere with the managements
prerogative to close or cease its business operations just because said
business operation or undertaking is not suffering from any loss or simply
to provide the workers continued employment.
The employer need only comply with the following
requirements for a valid cessation of business operations. (a) service of a
written notice to the employees and to the DOLE at least one month
before the intended date thereof; (b) the cessation of or withdrawal from
business operations must be bona fide in character and (c) payment of
termination pay equivalent to at least one-half month pay for each year of
service, or one month pay, whichever is higher. The records reveal that
private respondents complied with the aforecited requirements. MAMEs
employees were adequately informed of the intended business closure
and a written notice to the Regional Director of the Department of Labor
and Employment (DOLE) was filed by private respondents, informing the
DOLE that except for winding-up operations, MAME will be closed
effective March 8, 1993. Similar notices were served by Lydia V. Sison to
the Social Security System (SSS), Bureau of Internal Revenue (BIR),
Department of Trade and Industry (DTI) and the Municipal Licensing
Division of Antipolo, Rizal. Thus, the licenses and registration of
respondent MAME with the SSS, the Municipality of Antipolo, Rizal and
the DTI were subsequently cancelled and/or withdrawn.
Further, private respondents closure of business was bona fide
and that private respondents did not engage in the operation of run-away
shops. Finally, since private respondents cessation and closure of
business was lawful, there was no illegal dismissal to speak of.
H. EFFECTS OF DISMISSAL
A. WITH JUST OR AUTHORIZED CAUSE; COMPLIANCE OF DUE
PROCESS
138 Apacible vs. Multimed Industries Inc., G.R. No. 178903, May 30,
2011
(NON-ENTITLEMENT OF SEPARATION PAY)
Facts:
Petitioner Juliet Apacible was hired sometime in 1994 by
respondent. She rose from the ranks to become Assistant Area Sales
Manager for Cebu Operations, the position she held at the time she was
separated from the service in 2003.
On August 4, 2003, petitioner was informed by respondent
Marlene Orozco (Marlene), her immediate superior, that she would be
transferred to the company's main office in Pasig City on account of the
ongoing reorganization. Petitioner requested that her transfer be made
effective in October or November 2003 and that she be given time to
discuss it with her husband and daughter.
A week later, however, or on August 11, 2003, petitioner was
informed that her transfer would be effective August 18, 2003. On even
date, she was placed under investigation for the delayed released of
BCRs (cash budget for customer representation in sealed envelopes
which are given to loyal clients) which she received for distribution earlier
in July 2003.
Finding that the delay in releasing the BCRs amounted to loss
of trust and confidence, petitioner claims that in a meeting with the
respondents, she was given four options: resignation, termination,
availment of an early retirement package worth P40,000, or transfer to
Pasig City. Without availing of any option, petitioner took a leave of
absence on August 28, 29 and September 1, 2003.
On September 3, 2003, respondent company sent petitioner a
memorandum-directive for her to immediately report to the head office in
Pasig City and to return the company vehicle assigned to her to the Cebu
Office within 24 hours. Petitioner did not heed the directive, however.
She instead filed an application for sick leave until September 11, 2003,
and another until September 27, 2003.
On October 6, 2003, petitioner requested that she be given her
daily work assignment in Cebu, which request was later to be denied by
Olga by letter dated October 8, 2003. On October 7, 2003, petitioner was
given a show cause notice for her to explain in writing why she should
not be sanctioned for insubordination for failure to comply with the
transfer order.
On November 4, 2002, respondent company sent petitioner a notice of
termination effective November 7, 2003 for insubordination, prompting
petitioner to file a complaint for illegal dismissal, non-payment of overtime
pay, 13th month pay, service incentive leave pay, separation pay,
damages and attorney's fees before the Labor Arbiter.
The Court of Appeals ruled that petitioner was not entitled to
separation pay because, contrary to the NLRC's finding, she "lacked
good faith." It noted that petitioner, from the start, knew and accepted the
company policy on transfers whenever so required, and could not thus
refuse "another valid reassignment by treating it as an imposition and
burden."
ISSUE:
Whether petitioner is entitled separation pay by way of financial
assistance.
RULING:
NO. Reno Foods, Inc. v. Nagkakaisang Lakas ng Manggagawa
(NLM)-Katipunan 16 explains the propriety of granting separation pay in
termination cases in this wise:
The law is clear. Separation pay is only warranted when the
cause for termination is not attributable to the employee's fault, such as
those provided in Articles 283 and 284 of the Labor Code, as well as in
cases of illegal dismissal in which reinstatement is no longer feasible. It is
not allowed when an employee is dismissed for just cause, such as
serious misconduct.
xxx xxx xxx
It is true that there have been instances when the Court
awarded financial assistance to employees who were terminated for just
causes, on grounds of equity and social justice. The same, however, has
been curbed and rationalized in Philippine Long Distance Telephone
Company v. National Labor Relations Commission. In that case, we
recognized the harsh realities faced by employees that forced them,
despite their good intentions, to violate company policies, for which the
employer can rightly terminate their employment. For these instances,
the award of financial assistance was allowed. But, in clear and
unmistakable language, we also held that the award of financial
assistance shall not be given to validly terminated employees, whose
offenses are iniquitous or reflective of some depravity in their moral
character. When the employee commits an act of dishonesty, depravity,
or iniquity, the grant of financial assistance is misplaced compassion. It is
tantamount not only to condoning a patently illegal or dishonest act, but
an endorsement thereof. It will be an insult to all the laborers who despite
their economic difficulties, strive to maintain good values and moral
conduct.
In fact, in the recent case of Toyota Motors Philippines, Corp.
Workers Association (TMPCWA) v. National Labor Relations
Commission, we ruled that separation pay shall not be granted to all
employees who are dismissed on any of the four grounds provided in
Article 282 of the Labor Code. Such ruling was reiterated and further
explained in Central Philippines Bandag Retreaders, Inc. v. Diasnes:
To reiterate our ruling in Toyota, labor adjudicatory officials and
the CA must demur the award of separation pay based on social justice
when an employee's dismissal is based on serious misconduct or wilful
disobedience; gross and habitual neglect of duty; fraud or wilful breach of
trust; or commission of a crime against the person of the employer or his
immediate family — grounds under Art. 282 of the Labor Code that
sanction dismissals of employees. They must be most judicious and
circumspect in awarding separation pay or financial assistance as the
constitutional policy to provide full protection to labor is not meant to be
an instrument to oppress the employers. The commitment of the Court to
the cause of labor should not embarrass us from sustaining the
employers when they are right, as assistance to the undeserving and
those who are unworthy of the liberality of the law. (italics in the original,
emphasis and underscoring supplied) ASTIED Petitioner was, it bears
reiteration, dismissed for wilfully disobeying the lawful order of her
employer to transfer from Cebu to Pasig City. As
correctly noted by the appellate court, petitioner knew and accepted
respondent company's policy on transfers when she was hired and was
in fact even transferred many times from one area of operations to
another — Bacolod City, Iloilo City and Cebu.
Clearly, petitioner's adamant refusal to transfer, coupled with
her failure to heed the order for her return the company vehicle assigned
to her and, more importantly, allowing her counsel to write letters
couched in harsh language to her superiors unquestionably show that
she was guilty of insubordination, hence, not entitled to the award of
separation pay
139 NORMAN YABUT, Petitioner, v. MANILA ELECTRIC COMPANY
AND MANUEL M. LOPEZ, Respondents.
FACTS:
This case stems from a complaint for illegal dismissal and
monetary claims filed by herein petitioner Norman Yabut (Yabut) against
respondents Manila Electric Company (Meralco) and Meralco officer
Manuel M. Lopez (Lopez).
The petitioner had worked with Meralco from February 1989
until his dismissal from employment on February 5, 2004. Meralco's
Inspection Office issued a memorandum informing it of an illegal service
connection at the petitioner's residence. Given this report, Meralco's
Head of Investigation-Litigation Office issued to the petitioner a notice of
investigation.
Meralcos Litigation Investigation Office summarized the results
of Meralco's findings in a memorandum which indicated that Yabuts
electric service was disconnected for account delinquency.
Notwithstanding the disconnection and the fact that Meralcos service had
not been reconnected, Yabut's meter registered electric consumption. In
view of these findings, respondent Meralco, issued a notice of dismissal
addressed to the petitioner. The notice cites violation of Section 7,
paragraph 3 of Meralco's Company Code on Employee Discipline and
Article 282 (a), (c), (d) and (e) of the Labor Code of the Philippines as
bases for the dismissal.
Aggrieved by the decision of the management, Yabut filed with
the National Labor Relations Commission (NLRC) a complaint for illegal
dismissal and money claims against Meralco and Lopez.
Labor Arbiter Antonio R. Macam rendered his Decision,
declaring the petitioner illegally dismissed from the service and hence,
entitled to reinstatement plus backwages and attorney's fees. NLRC
rendered its Resolution dismissing the herein respondents' appeal for
lack of merit.
CA rendered the now assailed Decision reversing the rulings of
the NLRC. In finding the petitioner's dismissal lawful, the appellate court
attributed unto Yabut authorship of the meter tampering and illegal use of
electricity acts which it regarded as serious misconduct.
ISSUE:
Whether or not petitioners dismissal is illegal?
HELD:
Court of Appeals decision is sustained.
LABOR LAW
Article 279 of the Labor Code of the Philippines provides that
(i)n 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. x x x The just causes are enumerated in Article 282, which
provides:
Article 282.Termination by employer. - An employer may
terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee
of the lawful orders of his employer or representative in connection with
his work;
(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
duly authorized representative; and
(e) Other causes analogous to the foregoing.
Significantly, tampering with electric meters or metering
installations of the Company or the installation of any device, with the
purpose of defrauding the Company is classified as an act of dishonesty
from Meralco employees, expressly prohibited under company rules. It is
reasonable that its commission is classified as a severe act of
dishonesty, punishable by dismissal even on its first commission, given
the nature and gravity of the offense and the fact that it is a grave wrong
directed against their employer.
Article 282 (a) provides that an employer may terminate an
employment because of an employee's serious misconduct, a cause
that was present in this case in view of the petitioner's violation of his
employer's code of conduct. Misconduct is defined as 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. For serious misconduct to justify dismissal, the
following requisites must be present:
(a) it must be serious;
(b) it must relate to the performance of the employee's duties;
and
(c) it must show that the employee has become unfit to
continue working for the employer.
The dismissal is also justified as the act imputed upon the
petitioner qualifies as fraud or willful breach by the employee of the
trust reposed in him by his employer or duly authorized representative
under Article 282 (c) of the Labor Code. While the petitioner contests this
ground by denying that his position is one of trust and confidence, it is
undisputed that at the time of his dismissal, he was holding a supervisory
position after he rose from the ranks since commencement of his
employment with Meralco. As a supervisor with duty and power that
included testing of service meters and investigation of violations of
contract of customers, his position can be treated as one of trust and
confidence, requiring a high degree of honesty as compared with
ordinary rank-and-file employees.
 We emphasize that dismissal of a dishonest employee is to the
best interest not only of the management but also of labor. As a measure
of self-protection against acts inimical to its interest, a company has the
right to dismiss its erring employees. An employer cannot be compelled
to continue employing an employee guilty of acts inimical to the
employer's interest, justifying loss of confidence in him.
The requirements of procedural due process were satisfied.
On the matter of procedural due process, it is well-settled that notice
and hearing constitute the essential elements of due process in the
dismissal of employees. The employer must furnish the employee with
two written notices before termination of employment can be legally
effected. The first apprises the employee of the particular acts or
omissions for which dismissal is sought. The second informs the
employee of the employer's decision to dismiss him. With regard to the
requirement of a hearing, the essence of due process lies simply in an
opportunity to be heard, and not that an actual hearing should always
and indispensably be held.27
These requirements were satisfied in this case. The first required notice
was dated November 3, 2003, sufficiently notifying the petitioner of the
particular acts being imputed against him, as well as the applicable law
and the company rules considered to have been violated.
On November 17, 2003, Meralco conducted a hearing on the charges
against the petitioner. During said time, the petitioner was accorded the
right to air his side and present his defenses on the charges against him.
Finally, Meralco served a notice of dismissal dated February 4, 2004
upon the petitioner. Such notice notified the latter of the company's
decision to dismiss him from employment on the grounds clearly
discussed therein.
140 ROMEO A. GALANG, Petitioner, v. CITYLAND SHAW TOWER,
INC. and VIRGILIO BALDEMOR, Respondents.
FACTS:
Romeo Galang was employed by Gayren Maintenance
Services as a janitor. When his contract with the agency expired, he was
absorbed by Cityland Shaw Tower.
Galang alleged that he was absorbed as a janitor by Cityland
with a promise of regular employment after the completion of his six-
month probation. He claimed that even after the lapse of the period, he
continued working for Cityland although he had no idea about his
employment status. He did not know his status for certain until he was
shown a document on May 21, 2002 informing him that his employment
would be terminated effective May 20, 2002. Thus, he filed a complaint
for illegal dismissal against Cityland and its Building Manager, Virgilio
Baldemor.
Cityland countered that they absorbed Galang as a casual
employee after the expiration of his contract with Gayren Maintenance
Services. They alleged that during his employment with them, they found
him to be remiss in the performance of his job and he failed, too, to
conduct himself as a good employee.
The respondents further alleged that in the face of Galang
negative work attitude and job performance, Cityland charged him with
gross insubordination, harassment of his co-employees and conduct
unbecoming an employee.
The respondents stressed that Cityland Board of Directors
terminated Galang services, for gross insubordination, effective May 20,
2002, after a "comprehensive examination of the accusation against
complainant."
In a decision dated September 22, 2003, the Labor Arbiter
found that Galang had been illegally dismissed because Cityland failed to
present evidence to support Galang dismissal for cause after observance
of due process. The LA observed that the alleged board resolution
dismissing Galang was unsubstantiated and self-serving, and carries no
probative value. The LA also noted that there was no proof that Galang
was notified of the charges against him before he was dismissed.
On appeal, the National Labor Relations Commission (NLRC)
affirmed the labor arbiter findings.
After reaching the CA, the appellate court annulled the NLRC
decision and declared that Galang had been dismissed for a just cause.
The CA took exception to the conclusion of both the labor arbiter and the
NLRC that the respondents failed to discharge the burden of proving that
Galang had been dismissed for cause. It pointed out that the records are
replete with proof that Galang committed acts justifying the termination of
his employment.
The CA stressed that prior to the incidents leading to Galang
dismissal, he had already committed serious negligence in his work. It
referred to the flooding of the 32nd floor of the condominium where he
was assigned, due to his failure to secure tightly the valve filter room.
The flooding severely damaged the building elevator, resulting in repair
work amounting to P23,952.65. The CA stressed that despite this act of
gross negligence, he still remained in employment and it was only "on
account of subsequent events x x x that [the respondents] were
compelled to dismiss him."
While the CA had no doubt that Galang dismissal was for
cause, it nonetheless believed that he was not afforded procedural due
process for lack of notice. Consequently, it awarded Galang nominal
damages of P30,000.00, pursuant to the Agabon doctrine.
ISSUE:
Whether or not there was a just cause for Galang dismissal
based on evidence not presented before the labor arbiter and the NLRC.
HELD:
Galang petition is unmeritorious.
There was just cause for the dismissal - The CA committed no
reversible error and neither did it commit grave abuse of discretion in
declaring that Galang had been dismissed for cause. Contrary to Galang
submission, there is substantial evidence such relevant evidence that a
reasonable mind might accept as adequate to support a conclusion
supporting the CA decision.
The affidavits executed in 2005, simply amplified the evidence
Cityland submitted in 2002, including documents, which cited Galang
serious negligence in causing the flooding of his assigned condominium
floor, which resulted in a costly repair of the building selevator.
Additionally, there was Tupas memo to Cityland President which
"pertains to the case of Romeo Galang xxx for harassment to co-janitors,
insubordination to Supervisor and conduct unbecoming an employee."
Tupas made a report of an incident where Galang took pictures
of his co-janitors whom he considered as suspects in the alleged loss of
money (P4,000.00) kept in his locker. Tupas called a meeting to
investigate the matter. She asked Galang to surrender the pictures, but
he refused and harassed the janitors and insulted Tupas in front of
everybody. Tupas also reported that on several occasions, Galang
disobeyed her orders, often finding fault with his co-employees, and was
very hard to deal with. She believed that Galang had been grossly
insubordinate and had committed acts of harassment against his co-
employees. Thus, he was already a liability to the organization.
In light of the circumstances, the Supreme Court found that
Galang had become unfit to continue in employment. The evidence
supports the view that he continued to exhibit undesirable traits as an
employee and as a person, in relation to both his co-workers and his
superiors, particularly Tupas, her immediate supervisor.
On the due process - The finding of a just cause for Galang
dismissal notwithstanding, the Court concurs with the CA conclusion that
Cityland did not afford Galang the required notice before he was
dismissed. As the CA noted, the investigation conference Tupas called to
look into the janitors complaints against Galang, did not constitute the
written notice required by law as he had no clear idea what the charges
were. Thus, the CA committed no error in sustaining his dismissal and
awarding him nominal damages as indemnity.
As a final point, Galang posits that vis--vis the matter of
dismissal for just cause without due process, the CA "was incorrect when
it retroactively applied the later ruling of the High Court in Agabon v.
NLRC, considering that when this case was filed, the applicable doctrine
was Serrano."
The Supreme Court disagrees with this position. As the
respondents correctly pointed out, the decision of the NLRC did not attain
finality as it was brought to the CA on a petition for certiorari and was
overturned. Galang simply did not have the benefit of any final arbiter or
NLRC decision to which the Serrano ruling could be applied. When the
CA ruled on the case, this Court had abandoned the Serrano doctrine in
favor of Agabon. Thus, the CA committed no error in applying Agabon to
the case.
DENIED
141-142 Armando Ailing vs. Jose B. Feliciano
FACTS:
Respondent Wide Wide World Express Corporation (WWWEC) offered to
employ petitioner Armando Aliling (Aliling) on June 2, 2004 as “Account
Executive (Seafreight Sales),”. The offer came with a six (6)-month
probation period condition with this express caveat: “Performance during
probationary period shall be made as basis for confirmation to Regular or
Permanent Status.”
On June 11, 2004, Aliling and WWWEC inked an Employment Contract
under the terms of conversion to regular status shall be determined on
the basis of work performance; and employment services may, at any
time, be terminated for just cause or in accordance with the standards
defined at the time of engagement.
However, instead of a Sea freight Sale assignment, WWWEC asked
Aliling to handle Ground Express (GX), a new company product launched
on June 18, 2004 involving domestic cargo forwarding service for Luzon.
Marketing this product and finding daily contracts for it formed the core of
Aliling’s new assignment.
A month after, Manuel F. San Mateo III (San Mateo), WWWEC Sales
and Marketing Director, emailed Aliling to express dissatisfaction with the
latter’s performance.
On October 15, 2004, Aliling tendered his resignation to San Mateo.
While WWWEC took no action on his tender, Aliling nonetheless
demanded reinstatement and a written apology, claiming in a subsequent
letter dated October 1, 2004 to management that San Mateo had forced
him to resign.
On October 6, 2004, Lariosa again wrote, this time to advise Aliling of the
termination of his services effective as of that date owing to his “non-
satisfactory performance” during his probationary period. Records show
that Aliling, for the period indicated, was paid his outstanding salary.
However, or on October 4, 2004, Aliling filed a Complaint for illegal
dismissal due to forced resignation, nonpayment of salaries as well as
damages with the NLRC against WWWEC.
On April 25, 2006, the Labor Arbiter issued a decision declaring that the
grounds upon which complainant’s dismissal was based did not conform
not only the standard but also the compliance required under Article 281
of the Labor Code, Necessarily, complainant’s termination is not justified
for failure to comply with the mandate the law requires. Respondents
should be ordered to pay salaries corresponding to the unexpired portion
of the contract of employment and all other benefits amounting to a total
of P35,811.00 covering the period from October 6 to December 7, 2004.
Both parties appealed the decision to the NLRC, which affirmed the
decision of the Labor Arbiter and was later on sustained by the Court of
Appeals.
Case was elevated to the Supreme Court under Rule 45 Review on
Certiorari Comment was made that WWWEC hired petitioner on a
probationary basis and fired him before he became a regular employee.
ISSUE:
Whether or not Aliling was illegally dismissed.
RULING:
Petitioner was illegally dismissed.
To justify fully the dismissal of an employee, the employer must, as a
rule, prove that the dismissal was for a just cause and that the employee
was afforded due process prior to dismissal. As a complementary
principle, the employer has the onus of proving with clear, accurate,
consistent, and convincing evidence the validity of the dismissal.
Aliling was dismissed for an unjust cause
First off, the attendant circumstances in the instant case aptly show that
the issue of petitioner’s alleged failure to achieve his quota, as a ground
for terminating employment, strikes the Court as a mere afterthought on
the part of WWWEC.
What WWWEC considered as the evidence purportedly showing it gave
Aliling the chance to explain his inability to reach his quota was a
purported September 20, 2004 memo of San Mateo addressed to the
latter. However, Aliling denies having received such letter and WWWEC
has failed to refute his contention of non-receipt. In net effect, WWWEC
was at a loss to explain the exact just reason for dismissing Aliling.
At any event, assuming for argument that the petitioner indeed failed to
achieve his sales quota, his termination from employment on that ground
would still be unjustified. Article 282 of the Labor Code considers any of
the following acts or omission on the part of the employee as just cause
or ground for terminating employment:
(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 duly authorized representatives; and
(e) Other causes analogous to the foregoing. (Emphasis
supplied)
An employee’s failure to meet sales or work quotas falls under the
concept of gross inefficiency, which in turn is analogous to gross neglect
of duty that is a just cause for dismissal under Article 282 of the Code.
However, in order for the quota imposed to be considered a valid
productivity standard and thereby validate a dismissal, managements
prerogative of fixing the quota must be exercised in good faith for the
advancement of its interest. The duty to prove good faith, however, rests
with WWWEC as part of its burden to show that the dismissal was for a
just cause. WWWEC must show that such quota was imposed in good
faith. This WWWEC failed to do, perceptibly because it could not. The
fact of the matter is that the alleged imposition of the quota was a
desperate attempt to lend a semblance of validity to Alilings illegal
dismissal.
Being an experimental activity and having been launched for the first
time, the sales of GX services could not be reasonably quantified.
WWWEC failed to demonstrate the reasonableness and the bona
fides on the quota imposition. Respondent WWWEC miserably failed to
prove the termination of petitioner was for a just cause nor was there
substantial evidence to demonstrate the standards were made known to
the latter at the time of his engagement. Hence, petitioners right to
security of tenure was breached.
Alilings right to procedural due process was violated
As earlier stated, to effect a legal dismissal, the employer must show not
only a valid ground therefor, but also that procedural due process has
properly been observed. When the Labor Code speaks of procedural due
process, the reference is usually to the two (2)-written notice rule
envisaged in Section 2 (III), Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code, which provides:
Section 2. Standard of due process: requirements of notice. In
all cases of termination of employment, the following standards
of due process shall be substantially observed.
I. For termination of employment based on just causes as defined in
Article 282 of the Code:
(a) A written notice served on the employee specifying the ground
or grounds for termination, and giving to said employee reasonable
opportunity within which to explain his side;
(b) A hearing or conference during which the employee
concerned, with the assistance of counsel if the employee so
desires, is given opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him; and
(c) A written notice [of] termination served on the employee
indicating that upon due consideration of all the circumstance,
grounds have been established to justify his termination.
Here, the first and second notice requirements have not been properly
observed, thus tainting petitioners dismissal with illegality.
The adverted memo dated September 20, 2004 of WWWEC supposedly
informing Aliling of the likelihood of his termination and directing him to
account for his failure to meet the expected job performance would have
had constituted the charge sheet, sufficient to answer for the first notice
requirement, but for the fact that there is no proof such letter had been
sent to and received by him. In fact, in his December 13, 2004
Complainants Reply Affidavit, Aliling goes on to tag such
letter/memorandum as fabrication. WWWEC did not adduce proof to
show that a copy of the letter was duly served upon Aliling. Clearly
enough, WWWEC did not comply with the first notice requirement.
Neither was there compliance with the imperatives of a hearing or
conference. The Court need not dwell at length on this particular breach
of the due procedural requirement. Suffice it to point out that the record is
devoid of any showing of a hearing or conference having been
conducted. On the contrary, in its October 1, 2004 letter to Aliling, or
barely five (5) days after it served the notice of termination, WWWEC
acknowledged that it was still evaluating his case. And the written notice
of termination itself did not indicate all the circumstances involving the
charge to justify severance of employment.
143 Kakampi and Its Members Panuelos vs. Kingspoint Express &
Logistics
(REASONABLE OPPORTUNITY – AT LEAST 5 CALENDAR DAYS)
Facts:
Petitioners were former drivers of the respondent Kingspoint
Express, a sole proprietorship under the name of Co which is engaged in
the business of transporting goods.
They were dismissed from service on January 20, 2006 on the
grounds of serious misconduct, dishonesty, loss of trust and confidence
and commission of acts inimical to the interest of Kingspoint Express.
Kingspoint Express issued separate notices to explain to the
individual petitioners on January 16, 2006 the charges of dishonesty,
serious misconduct and loss of confidence by filing with the NLRC false,
malicious and fabricated cases against the company, and their allegedly
unwarranted refusal to undergo drug testing. They were required to
submit their answer to the charges within forty-eight (48) hours from
receipt of the notices with a warning that failure to do so would mean
waiver of their answer. They were also placed under preventive
suspension in the meantime.
Petitioners failed to submit their written explanation within the
stated period. Subsequently, Kingspoint Express issued to them separate
yet uniformly worded notices on January 20, 2006, informing them of
their dismissal for the abovementioned charges based on the following
acts: fabrication of baseless money claims against the company,
misleading fellow co-workers to sign the malicious complaint for money
claims against the company, refusal to undergo the company's general
drug test, and extorting money from co-workers to fund activities that
they were never fully informed of. Also, petitioner Dacara was dismissed
for consummating his sexual relations with Co’s helper inside her
residence and thus impregnating the help.
A complaint for illegal dismissal was subsequently filed,
alleging that the charges against them were fabricated and that their
dismissal was prompted by Kingspoint Express' aversion to their union
activities. The Labor Arbiter ruled in favor of the petitioners as the
charges are purportedly mere unsubstantiated allegations. This was
affirmed by the NLRC on appeal but the latter reversed itself on a
subsequent MR filed by Kingspoint. The CA initially reversed the NLRC’s
ruling but on an MR, they too reversed their earlier ruling and favored
Kingspoint. Thus, this petition for certiorari before the SC.
Issue:
WON the dismissal was valid.
Ruling:
Yes, the dismissal was valid. It is fundamental that in order to
validly dismiss an employee, the employer is required to observe both
substantive and procedural due process — the termination of
employment must be based on a just or authorized cause and the
dismissal must be effected after due notice and hearing.
As to the substantive requirements of due process, the
employees' refusal to submit themselves to drug test is a just cause for
their dismissal.
An employer may terminate an employment on the ground of
serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work.
Willful disobedience requires the concurrence of two elements: (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 present in this case.
As to the first element, the dismissed employees did not deny
their refusal to undergo drug testing nor did they explain their refusal.
The utter lack of reason or justification for their insubordination indicates
that it was prompted by mere obstinacy, hence, willful and warranting of
dismissal. As to the second element, the subject order is relevant in the
performance of their functions as drivers of Kingspoint Express. As the
NLRC correctly pointed out, drivers are indispensable to Kingspoint
Express' primary business of rendering door-to-door delivery services. It
is common knowledge that the use of dangerous drugs has adverse
effects on driving abilities that may render the dismissed employees
incapable of performing their duties to Kingspoint Express and acting
against its interests, in addition to the threat they pose to the public.
The existence of a single just cause is enough to order their
dismissal and it is now inconsequential if the other charges against them
do not merit their dismissal from service. Nonetheless, while Kingspoint
Express had reason to sever their employment relations, this Court finds
its supposed observance of the requirements of procedural due process
pretentious. While Kingspoint Express required the dismissed employees
to explain their refusal to submit to a drug test, the two (2) days afforded
to them to do so cannot qualify as "reasonable opportunity", which the
Court construed in King of Kings Transport, Inc. v. Mamacas a period of
at least five (5) calendar days from receipt of the notice.
Thus, even if Kingspoint Express' defective attempt to comply
with procedural due process does not negate the existence of a just
cause for their dismissal, Kingspoint Express is still liable to indemnify
the dismissed employees, with the exception of Panuelos, Dizon and
Dimabayao, who did not appeal the dismissal of their complaints, with
nominal damages in the amount of P30,000.00.
144 COSMOS BOTTLING CORP., Petitioner, v. WILSON FERMIN,
Respondent; WILSON B. FERMIN,Petitioner, v. COSMOS BOTTLING
CORPORATION and CECILIA BAUTISTA, Respondents.
FACTS:
Wilson B. Fermin (Fermin) was a forklift operator at Cosmos
Bottling Corporation (COSMOS), where he started his employment on 27
August 1976.On 16 December 2002, he was accused of stealing the
cellphone of his fellow employee, Luis Braga (Braga). Fermin was then
given a Show Cause Memorandum, requiring him to explain why the
cellphone was found inside his locker. In compliance therewith, he
submitted an affidavit the following day, explaining that he only hid the
phone as a practical joke and had every intention of returning it to
Braga.
After conducting an investigation, COSMOS found Fermin
guilty of stealing Bragas phone in violation of company rules and
regulations. Consequently, on 2 October 2003,the company terminated
Fermin from employment after 27 years of service, effective on 6 October
2003.
Following the dismissal of Fermin from employment, Braga
executed an affidavit, which stated the belief that the former had merely
pulled a prank without any intention of stealing the cellphone, and
withdrew from COSMOS his complaint against Fermin.
Meanwhile, Fermin filed a Complaint for Illegal Dismissal,
which the Labor Arbiter (LA) dismissed for lack of merit on the ground
that the act of taking a fellow employees cellphone amounted to gross
misconduct. Further, the LA likewise took into consideration Fermins
other infractions, namely: (a) committing acts of disrespect to a superior
officer, and (b) sleeping on duty and abandonment of duty.
Fermin filed an appeal with the National Labor Relations
Commission (NLRC), which affirmed the ruling of the LA[and denied
Fermins subsequent Motion for Reconsideration.
Thereafter, Fermin filed a Petition for Certiorari with the Court
of Appeals (CA),which reversed the rulings of the LA and the NLRC and
awarded him his full retirement benefits. Although the CA accorded with
finality the factual findings of the lower tribunals as regards Fermins
commission of theft, it nevertheless held that the penalty of dismissal
from service was improper on the ground that the said violation did not
amount to serious misconduct or wilful disobedience.
COSMOS and Fermin moved for reconsideration, but the CA
likewise denied their motions. Thus, both parties filed the present
Petitions for Review.
ISSUE:
Whether the imposition of the penalty of dismissal was
appropriate
HELD:
We rule in the affirmative.
LABOR LAW: theft against a co-employee is analogous to
serious misconduct
Theft committed against a co-employee is considered as a
case analogous to serious misconduct, for which the penalty of dismissal
from service may be meted out to the erring employee,viz:
Article 282 of the Labor Code provides:
Article 282. Termination by Employer. - An employer may
terminate an employment for any of the following causes:
(a)Serious misconductor willful disobendience by the employee
of the lawful orders of his employer or his representativesin connection
with his work;
xxxxxxxxx
(e) Other causes analogous to the foregoing.
LABOR LAW: misconduct
Misconduct involves the transgression of some established and
definite rule of action, forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment.
For misconduct to be serious and therefore a valid ground for dismissal,
it must be:
1. of grave and aggravated character and not merely trivial or
unimportant and
2. connected with the work of the employee.
In this case, petitioner dismissed respondent based on the
NBI's finding that the latter stole and used Yusecos credit cards. But
since the theft was not committed against petitioner itself but against one
of its employees, respondent's misconduct was not work-related and
therefore, she could not be dismissed for serious misconduct.
Nonetheless, Article 282(e) of the Labor Code talks of other
analogous causes or those which are susceptible of comparison to
another in general or in specific detail .For an employee to be validly
dismissed for a cause analogous to those enumerated in Article 282, the
cause must involve a voluntary and/or willful act or omission of the
employee.
A cause analogous to serious misconduct is a voluntary and/or
willful act or omission attesting to an employees moral depravity. Theft
committed by an employee against a person other than his employer, if
proven by substantial evidence, is a cause analogous to serious
misconduct.
In this case, the LA has already made a factual finding, which
was affirmed by both the NLRC and the CA, that Fermin had committed
theft when he took Bragas cellphone. Thus, this act is deemed analogous
to serious misconduct, rendering Fermins dismissal from service just and
valid.
Further, the CA was correct in ruling that previous infractions
may be cited as justification for dismissing an employee only if they are
related to the subsequent offense. However, it must be noted that such a
discussion was unnecessary since the theft, taken in isolation from
Fermins other violations, was in itself a valid cause for the termination of
his employment.
Finally, it must be emphasized that the award of financial
compensation or assistance to an employee validly dismissed from
service has no basis in law. Therefore, considering that Fermins act of
taking the cellphone of his co-employee is a case analogous to serious
misconduct, this Court is constrained to reverse the CAs ruling as
regards the payment of his full retirement benefits. In the same breath,
neither can this Court grant his prayer for backwages.
G.R. No. 194303 is DENIED.
G.R. No. 193676 is GRANTED.
145 ALEX Q. NARANJO, DONNALYN DE GUZMAN, RONALD V.
CRUZ, ROSEMARIE P. PIMENTEL, and ROWENA B.
BARDAJE,Petitioners, v. BIOMEDICA HEALTH CARE, INC. and
CARINA "KAREN" J. MOTOL, Respondents.
(ABSENT FOR VARIOUS PERSONAL REASON – NOT STRIKE)
FACTS:
Petitioners Alex Naranjo (Naranjo), Ronald Allan Cruz, Rowena
Bardaje, Donnalyn De Guzman and Rosemarie Pimentel were all
employees of Biomedica Health Care, Inc. (Biomedica).
On November 7, 2006, Naranjo, et al. were all absent for
various personal reasons. The next day, Naranjo, et al. came in for
work but were not allowed to enter the premises. Carina Motol (Motol),
Biomedicas president, informed them using foul language, to just find
other employment.
Subsequently, Biomedica issued notices to Naranjo, et al.
accusing them of having conducted an illegal strike and were accordingly
directed to explain within twenty-four (24) hours to explain why they
should not be held guilty of and dismissed for violating the company
policy against illegal strikes under Article XI, Category Four, Sections 6,
8, 12, 18 and 25 of the Company Policy.Biomedica, however, failed to
furnish them with the copy of the said company policy.
Naranjo, et al. failed to submit their written explanation. Thus,
Biomedica served Notices of Termination stating that Naranjo, et al.
engaged in illegal strike. Consequently, Naranjo et al. filed a complaint
for illegal dismissal. The LA dismissed the complaint. The NLRC
reversed the LA. On appeal to the CA, the CA reinstated the decision of
the LA.
ISSUE:
Whether or not Naranjo, et al. were illegally dismissed?
HELD:
The petition is meritorious.
LABOR LAW: illegal dismissal; mass leave; strike
Petitioners were not afforded procedural due process.
Thus, the Court elaborated in King of Kings Transport, Inc. v. Mamac that
a mere general description of the charges against an employee by the
employer is insufficient to comply with the above provisions of the law.
Clearly, petitioners were charged with conducting an illegal strike, not a
mass leave, without specifying the exact acts that the company considers
as constituting an illegal strike or violative of company policies.
Further, while Biomedica cites the provisions of the company
policy which petitioners purportedly violated, it failed to quote said
provisions in the notice so petitioners can be adequately informed of the
nature of the charges against them and intelligently file their explanation
and defenses to said accusations.
Moreover, the period of 24 hours allotted to petitioners to
answer the notice was severely insufficient and in violation of the
implementing rules of the Labor Code. Under the implementing rule of
Art. 277, an employee should be given "reasonable opportunity" to file a
response to the notice. King of Kings Transport, Inc. elucidates in this
wise: " Reasonable opportunity under the Omnibus Rules means every
kind of assistance that management must accord to the employees to
enable them to prepare adequately for their defense. This should be
construed as a period of at least five (5) calendar days from receipt of the
notice to give the employees an opportunity to study the accusation
against them, consult a union official or lawyer, gather data and
evidence, and decide on the defenses they will raise against the
complaint."
In addition, Biomedica did not set the charges against
petitioners for hearing or conference in accordance with Sec. 2, Book V,
Rule XIII of the Implementing Rules and Regulations of the Labor Code
and in line with ruling in King of Kings Transport, Inc., where the Court
explained: "After serving the first notice, the employers should schedule
and conduct a hearing or conference wherein the employees will be
given the opportunity to: (1) explain and clarify their defenses to the
charge against them; (2) present evidence in support of their defenses;
and (3) rebut the evidence presented against them by the management."
Petitioners were denied substantive due process. Clearly,
to justify the dismissal of an employee on the ground of serious
misconduct, the employer must first establish that the employee is guilty
of improper conduct, that the employee violated an existing and valid
company rule or regulation, or that the employee is guilty of a
wrongdoing. In the instant case, Biomedica failed to even establish that
petitioners indeed violated company rules, failing to even present a copy
of the rules and to prove that petitioners were made aware of such
regulations.
Petitioners did not stage a mass leave. The term "Mass Leave"
has been left undefined by the Labor Code. Plainly, the legislature
intended that the terms ordinary sense be used. "Mass" is defined as
"participated in, attended by, or affecting a large number of individuals;
having a large-scale character." While the term "Leave" is defined as "an
authorized absence or vacation from duty or employment usually with
pay." Thus, the phrase "mass leave" may refer to a simultaneous
availment of authorized leave benefits by a large number of employees in
a company. It is undeniable that going on leave or absenting ones self
from work for personal reasons when they have leave benefits available
is an employees right. Here, the five (5) petitioners were absent on
November 7, 2006. The records are bereft of any evidence to establish
how many workers are employed in Biomedica. There is no evidence on
record that 5 employees constitute a substantial number of employees of
Biomedica.
Petitioners did not go on strike. Art. 212(o) of the Labor Code
defines a strike as "any temporary stoppage of work by the concerted
action of employees as a result of any industrial or labor dispute."
"Concerted" is defined as "mutually contrived or planned" or "performed
in unison." In the case at bar, the 5 petitioners went on leave for various
reasons. Petitioners were in different places on November 7, 2006 to
attend to their personal needs or affairs. They did not go to the company
premises to petition Biomedica for their grievance. This shows that there
was NO intent to go on strike.
Dismissal is not the proper penalty. But setting aside from the
nonce the facts established above, the most pivotal argument against the
dismissal of petitioners is that the penalty of dismissal from employment
cannot be imposed even if we assume that petitioners went on an illegal
strike. It has not been shown that petitioners are officers of the Union. On
this issue, the NLRC correctly cited Gold City Integrated Port Service,
Inc. v. NLRC, wherein We ruled that: "An ordinary striking worker cannot
be terminated for mere participation in an illegal strike. There must be
proof that he committed illegal acts during a strike."
The CA is REVERSED and SET ASIDE. The NLRC is
REINSTATED with MODIFICATION.
B. NO JUST AND AUTHORIZED CAUSE; NO DUE PROCESS
I. REINSTATEMENT
146. 3RD ALERT SECURITY AND DETECTIVE SERVICES, INC.,
Petitioner, v. ROMUALDO NAVIA, Respondent.
(FAILURE TO EXECUTE FINALITY OF CASE; ORDER IS
IMMEDIATELY EXECUTORY; NO EFFORT TO REINSTATE)
FACTS:
Romualdo Navia filed an illegal dismissal case against 3rd
Alert. In its November 30, 2005 decision, the Labor Arbiter issued a
decision in favor or 3rd Alert. The NLRC, after appeal, affirmed the ruling
of the Labor Arbiter and on October 19, 2008, it also denied 3rd Alert
motion for reconsideration.
From this ruling, 3rd Alert filed an appeal with the CA (CA-G.R.
SP No. 106963) with a prayer for the issuance of a temporary restraining
order. The CA denied the appeal; 3rd Alert moved for a motion for
reconsideration but the motion was also denied.
In the meantime, on January 29, 2009, the NLRC issued an
Entry of Judgment certifying that the NLRC resolution dated October 19,
2008 has become final and executory. Thus, Navia filed with the labor
arbiter an ex-parte motion for recomputation of back wages and an ex-
parte motion for execution based on the recomputed back wages.
On November 10, 2009, the labor arbiter issued a writ of
execution to enforce the recomputed monetary awards. 3rd Alert
appealed the recomputed amount stated in the writ of execution to the
NLRC. 3rd Alert also alleged that the writ was issued with grave abuse of
discretion since there was already a notice of reinstatement sent to
Navia.
 The NLRC dismissed the appeal, ruling that 3rd Alert is guilty
of bad faith since there was no earnest effort to reinstate Navia. The
NLRC also ruled that there was no notice or reinstatement sent to Navia
counsel. A motion for reconsideration was filed, but it was likewise
denied.
3rd Alert filed a petition for certiorari with the CA which found
the petition without merit because Navia had not been reinstated either
physically or in the payroll. The CA also denied the motion for
reconsideration filed by 3rd Alert; hence, this petition.
ISSUE:
Did the Court of Appeals err in ruling that the NLRC did
not commit any grave abuse of discretion?
HELD:
After a close examination of the petition and the attached
records where 3rd Alert insists that a copy of the manifestation on
reinstatement had been sent to Navia counsel and was received by a
certain "Biznar", the Supreme Court did not see any grave abuse of
discretion.
Since it was ruled that there had been no notice of
reinstatement sent to Navia or his counsel, as also affirmed by the CA,
the Court cannot rule otherwise in the absence of any compelling
evidence. Time and again, it has been held that this Court is not a trier of
facts. In the absence of any attendant grave abuse of discretion, these
findings are entitled not only to respect, but to our final recognition in this
appellate review.
Article 223 of the Labor Code provides that in case there is an
order of reinstatement, the employer must admit the dismissed employee
under the same terms and conditions, or merely reinstate the employee
in the payroll. The order shall be immediately executory. Thus, 3rd Alert
cannot escape liability by simply invoking that Navia did not report for
work. The law states that the employer must still reinstate the employee
in the payroll. Where reinstatement is no longer viable as an option,
separation pay equivalent to one (1) month salary for every year of
service could be awarded as an alternative.
Since the proceedings below indicate that 3rd Alert failed to
adduce additional evidence to show that it tried to reinstate Navia, either
physically or in the payroll, it s safe to conclude that there was no earnest
effort to reinstate Navia.
It is also noteworthy that 3rd Alert resorted to legal tactics to
frustrate the execution of the labor arbiter order; for about four (4) years,
it evaded the obligation to reinstate Navia. By so doing, 3rd Alert has
made a mockery of justice. It is thus proper to impose treble costs
against 3rd Alert for its utter disregard to comply with the writ of
execution. To reiterate, no indication exists showing that 3rd Alert
exerted any efforts to reinstate Navia; worse, 3rd Alert lame excuse of
having sent a notice of reinstatement to a certain "Biznar" only
compounded the intent to mislead the courts.
DENIED
147 THE NEW PHILIPPINE SKYLANDERS, INC. and/or JENNIFER M.
ENANO-BOTE, Petitioners, v. FRANCISCO N. DAKILA, Respondent.
(REINSTATEMENT NO LONGER POSSIBLE – BACKWAGES)
FACTS:
Respondent Francisco Dakila (Dakila) was employed by The
New Philippine Skylanders, Inc. (Skylanders) as early as 1987 and
terminated for cause in April 1997 when the latter was sold. In May 1997,
he was rehired as consultant by Skylanders under a Contract for
Consultancy Services.
Thereafter, in a letter dated April 19, 2007, Dakila informed
Skylanders of his compulsory retirement effective May 2, 2007 and
sought for the payment of his retirement benefits. His request, however,
was not acted upon. Instead, he was terminated from service effective
May 1, 2007.
Thus, Dakila filed a complaint for constructive illegal dismissal.
He averred that the consultancy contract was a scheme to deprive him of
the benefits of regularization, claiming to have assumed tasks necessary
and desirable in the trade or business of Skylanders and under their
direct control and supervision. On the contrary, Skylanders argued that
Dakila was not their regular employee as he was not required to observe
regular working hours and was free to adopt means and methods to
accomplish his task except as to the results of the work required of him.
Hence, no employer- employee relationship existed between them.
Both the Labor Arbiter and the NLRC ruled that Dakila was
illegally dismissed. The Court of Appeals affirmed the findings of the
Labor Arbiter and the NLRC.
ISSUE:
Whether or not Dakila was illegally dismissed?
HELD:
The petition is partly granted.
The issue of illegal dismissal is premised on the existence of
an employer-employee relationship between the parties herein. Records
reveal that both the LA and the NLRC, as affirmed by the CA, have found
substantial evidence to show that respondent Dakila was a regular
employee who was dismissed without cause.
Following Article 279 of the Labor Code, an employee who is
unjustly dismissed from work is entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages computed
from the time he was illegally dismissed. However, considering that
respondent Dakila was terminated on May 1, 2007, or one (1) day prior to
his compulsory retirement on May 2, 2007, his reinstatement is no longer
feasible. His backwages should be computed only for days prior to his
compulsory retirement which in this case is only a day.
Petition is PARTLY GRANTED.
148 NORKIS TRADING CORPO RATION VS. JOAQUIN B
UENAVISTA, ET AL.
FACTS:
The respondents were hired by Norkis Trading, a domestic
corporation engaged in the business of manufacturing and marketing of
Yamaha motorcycles and multi-purpose vehicles, on separate dates and
for various positions as welders and operators.
Although they worked for Norkis Trading as skilled workers
assigned in the operation of industrial and welding machines owned and
used by Norkis Trading for its business, they were not treated as regular
employees by Norkis Trading.
Instead, they were regarded by Norkis Trading as members of
Panaghiusa sa Kauswagan Multi-Purpose Cooperative (PASAKA) and
deemed an independent contractor that merely deployed the
respondents to render services for Norkis Trading.4 The respondents
nonetheless believed that they were regular employees of Norkis Trading
citing various circumstances in their position paper. Hence, the
respondents filed with the DOLE a complaint against Norkis Trading and
PASAKA for labor-only contracting and non-payment of minimum wage
and overtime pay.
The filing of the complaint for labor-only contracting allegedly
led to the suspension of the respondents’ membership with PASAKA.
The suspension prompted the respondents to file with the NLRC the
complaint for illegal suspension against Norkis Trading and PASAKA. On
October 13, 1999, the respondents were to report back to work but
during the hearing in their NLRC case, they were informed by PASAKA
that they would be transferred to Norkis Tradings’ sister company, Porta
Coeli Industrial Corporation (Porta Coeli), as washers of Multicab
vehicles. The respondents opposed the transfer as it would allegedly
result in a change of employers and that the transfer would result in a
demotion since from being skilled workers in Norkis Trading; they would
be reduced to being utility workers.
Labor Arbiter (LA) Gutierrez dismissed the complaint for lack of
merit. LA directed complainants to report back to PASAKA for work
assignment. Likewise, respondent PASAKA is directed to accept the
complainants back for work. In the meantime (in a separate case) DOLE
Regional Director Balanag issued on August 22, 2000 his Order20 in
LSED Case No. RO700-9906-CI-CS-168. Regional Director Balanag
ruled that PASAKA was engaged in labor-only contracting.21 It was
found that: (1) PASAKA had failed to prove that it had substantial capital;
22 (2) the machineries, equipment and supplies used by the respondents
in the performance of their duties were all owned by Norkis Trading and
not by PASAKA; 23 (3) the respondents’ membership with PASAKA as a
cooperative was inconsequential to their employment with Norkis
Trading; 24 (4) Norkis Trading and PASAKA failed to prove that their
sub-contracting arrangements were covered by any of the conditions set
forth in Section 6 of Department Order No. 10, Series of 1997; 25 (5)
Norkis Trading and PASAKA failed to dispute the respondents’ claim that
their work was supervised by leadmen and production supervisors of
Norkis Trading; 26 and (6) Norkis Trading and PASAKA failed to dispute
the respondents’ allegation that their salaries were paid by employees of
Norkis Trading.27 Norkis Trading and PASAKA were then declared
solidarily liable for the monetary claims of therein complainants.
Regional Director Balanag’s Order was later affirmed by then DOLE
Secretary Sto. Tomas. When the rulings of the DOLE Secretary were
appealed before the CA via the petitions for certiorari, the CA affirmed
the Orders of the DOLE Secretary.31 A motion for reconsideration of the
CA decision was denied in a Resolution32.
The two petitions docketed as G.R. Nos. 180078-79, which
were brought before the SC to question the CA’s rulings, were later
denied with finality by the SC. The respondents informed the NLRC of
Regional Director Balanag’s Order by filing a Manifestation. However, the
NLRC rendered its Decision35 affirming with modification the decision of
LA Gutierrez. It held that the respondents were not illegally suspended
from work. The NLRC declared that the LA had no jurisdiction over the
dispute because the respondents
were not employees, but members of PASAKA.
The respondents’ motion for reconsideration was denied by the
NLRC. Undaunted, the respondents questioned the NLRC’s rulings
before the CA via a petition for certiorari. Finding merit in the petition for
certiorari, the CA rendered its decision reversing and setting aside the
decision and resolution of the NLRC. The CA considered Regional
Director Balanag’s finding in LSED Case No. RO700-9906-CI-CS-168
that PASAKA was engaged in labor-only contracting. In ruling that the
respondents were illegally dismissed, the CA held that Norkis Trading’s
refusal to accept the respondents back to their former positions, offering
them instead to accept a new
assignment as washers of vehicles in its sister company, was a demotion
that amounted to a constructive dismissal. Norkis Trading’s motion for
reconsideration was denied by the CA. Hence, this petition.
ISSUES:
(1) Whether the CA erred in reversing of LA Gutierrez’s and the
NLRC’s rulings.
(2) Whether PASAKA is a labor-only contractor.
(3) Whether the respondents were illegally dismissed by Norkis
Trading
RULING:
Factual findings of labor officials may be examined by the
courts when there is a showing that they were arrived at arbitrarily
or in disregard of evidence on record. Nonetheless, these findings are
not infallible. When there is a showing that they were arrived at arbitrarily
or in disregard of the evidence on record, they may be examined by the
courts. The CA can then grant a petition for certiorari if it finds that the
NLRC, in its assailed decision or resolution, has made a factual finding
that is not supported by substantial evidence. It is within the jurisdiction of
the CA, whose jurisdiction over labor cases has been expanded to review
the findings of the NLRC. 47 This case falls within the exception to the
general rule that findings of fact of labor officials are to be accorded
respect and finality on appeal.
Norkis Trading is the principal employer of the
respondents, considering that PASAKA is a mere labor-only
contractor. Labor-only contracting, a prohibited act, is an arrangement
where the contractor or subcontractor merely recruits, supplies, or places
workers to perform a job, work, or service for a principal. In labor-only
contracting, the following elements are present: (a) the contractor or
subcontractor does not have substantial capital or investment to actually
perform the job, work, or service under its own account and
responsibility; and (b) the employees recruited, supplied or placed by
such contractor or subcontractor perform activities which are directly
related to the main business of the principal. These differentiate it from
permissible or legitimate job contracting or subcontracting, which refers
to an arrangement whereby a principal agrees to put out or farm out with
the contractor or subcontractor the performance or completion of a
specific job, work, or service within a definite or predetermined period,
regardless of whether such job, work, or service is to be performed or
completed within or outside the premises of the principal. A person is
considered engaged in legitimate job contracting or subcontracting if the
following conditions concur: (a) the contractor carries on a distinct and
independent business and partakes the contract work
on his account under his own responsibility according to his own manner
and method, free from the control and direction of his employer or
principal in all matters connected with the performance of his work except
as to the results thereof; (b) the contractor has substantial capital or
investment; and (c) the agreement between the principal and the
contractor or subcontractor assures the contractual employees’
entitlement to all labor and occupational safety and health standards, free
exercise of the right to self-organization, security of tenure, and social
welfare benefits. 49 SC emphasized that the petitioner’s arguments
against the respondents’ claim that PASAKA is a labor-only contractor,
which is thus to be regarded as a mere agent of Norkis Trading for which
the respondents rendered service, are already
mooted by the finality of this SC’s Resolutions in G.R. Nos. 180078-79,
which stems from the CA’s and the DOLE Secretary’s review of the
DOLE Regional Director’s Order dated August 22, 2000 in LSED Case
No. RO700-9906-CI-CS-168. Applying the doctrine of res judicata, all
matters that have been fully resolved with finality by this Court’s
dismissal of the appeal that stemmed from Regional Director Balanag’s
Order in LSED Case No. RO700-9906-CI-CS-168 are already
conclusive between the parties. The rule on conclusiveness of judgment
then now precludes this Court from re-opening the issues that were
already settled with finality in G.R. Nos. 180078-79, which effectively
affirmed the CA’s findings that PASAKA was engaged in labor-only
contracting, and that Norkis Trading shall be treated as the employer of
the respondents.
Termination of an employment for no just or authorized
cause amounts to an illegal dismissal. Where an entity is declared to
be a labor-only contractor, the employees supplied by said contractor to
the principal employer become regular employees of the latter. Having
gained regular status, the employees are entitled to security of tenure
and can only be dismissed for just or authorized causes and after they
had been afforded due process. 66 Termination of employment without
just or authorized cause and without observing procedural due process is
illegal.
In claiming that they were illegally dismissed from their
employment, the respondents alleged having been informed by PASAKA
that they would be transferred, upon the behest of Norkis Trading, as
Multicab washers or utility workers to Porta Coeli, a sister company of
Norkis Trading. Norkis. Where labor-only contracting exists, the Labor
Code itself establishes an employer-employee relationship between the
employer and the employees of the labor-only contractor. The statute
establishes this relationship for a comprehensive purpose: to prevent a
circumvention of labor laws. The contractor is considered merely an
agent of the principal employer and the latter is responsible to the
employees of the labor-only contractor as if such employees had been
directly employed by the principal employer.
II. ENTITLEMENT TO FULL BACKWAGES
149 EQUITABLE BANKING CORPORATION (EQUITABLE PCI BANK)
vs RICARDO SADAC
(SALARY INCREASE NOT INCLUDED AS ALLOWANCES AND
OTHER BENEFITS; ALLOWANCE VS. SALARY INCREASE)
FACTS:
Sadac was appointed Vice President of the Legal Department
of PCI Bank and subsequently General Counsel thereof. Nine lawyers of
PCI Banks Legal Department, accused Sadac of abusive conduct, inter
alia, and ultimately, petitioned for a change in leadership of the
department. On the ground of lack of confidence in Sadac, under the
rules of client and lawyer relationship, PCI Bank instructed Sadac to
deliver all materials in his custody in all cases in which the latter was
appearing as its counsel of record. In reaction thereto, Sadac requested
for a full hearing and formal investigation but the same remained
unheeded. Sadac filed a complaint for illegal dismissal with damages
against PCI Bank and individual members of the Board of Directors
thereof. After learning of the filing of the complaint, PCI Bank terminated
the services of Sadac. Finally, Sadac was removed from his office and
ordered disentitled to any compensation and other benefits. In this case,
the SC already decided that Sadacs dismissal was not grounded on
any of the causes stated in Article 282 of the Labor Code and that
PCI Bank disregarded the procedural requirements in terminating
respondent Sadacs employment, thus Sadac was entitled to
backwages from termination of employment until turning sixty (60)
years of age (in 1995 ) xxx. However, in Sadacs computation, the total
amount of the monetary award is P6,030,456.59, representing his
backwages and other benefits, including the general increases which he
should have earned during the period of his illegal termination. According
to Sadac, the catena of cases uniformly holds that it is the obligation of
the employer to pay an illegally dismissed employee the whole amount of
the salaries or wages, plus all other benefits and bonuses and general
increases to which he would have been normally entitled had he not
been dismissed; and therefore, salary increases should be deemed a
component in the computation of backwages. Moreover, Sadac
contended that his checkup benefit, clothing allowance, and cash
conversion of vacation leaves must be included in the computation of his
backwages. PCI Bank disputed respondent Sadacs computation. Per its
computation, the amount of monetary award due respondent Sadac is
P2,981,442.98 only, to the exclusion of the latters general salary
increases and other claimed benefits which, it maintained, were
unsubstantiated, that an unqualified award of backwages means that the
employee is paid at the wage rate at the time of his dismissal.
Furthermore, petitioner Bank argued before the Labor Arbiter that the
award of salary differentials is not allowed, the established rule being that
upon reinstatement, illegally dismissed employees are to be paid their
backwages without deduction and qualification as to any wage increases
or other benefits that may have been received by their co-workers who
were not dismissed or did not go on strike.
ISSUE:
Whether general salary increases should be included in the
base figure to be used in the computation of backwages.
HELD:
NO. Backwages in general are granted on grounds of equity
for earnings which a worker or employee has lost due to his illegal
dismissal. [37] It is not private compensation or damages but is awarded
in furtherance and effectuation of the public objective of the Labor Code.
Nor is it a redress of a private right but rather in the nature of a command
to the employer to make public reparation for dismissing an employee
either due to the formers unlawful act or bad faith. Article 279 mandates
that an employees full backwages shall be inclusive of allowances
and other benefits or their monetary equivalent. Contrary to the ruling of
the Court of Appeals, we do not see that a salary increase can be
interpreted as either an allowance or a benefit. Salary increases are not
akin to allowances or benefits, and cannot be confused with either. The
term allowances is sometimes used synonymously with emoluments, as
indirect or contingent remuneration, which may or may not be earned, but
which is sometimes in the nature of compensation, and sometimes in the
nature of reimbursement. [47]Allowances and benefits are granted to the
employee apart or separate from, and in addition to the wage or salary.
In contrast, salary increases are amounts which are added to the
employees salary as an increment thereto for varied reasons deemed
appropriate by the employer. Salary increases are not separate grants by
themselves but once granted, they are deemed part of the employees
salary. To extend the coverage of an allowance or a benefit to include
salary increases would be to strain both the imagination of the Court and
the language of law. As aptly observed by the NLRC, to otherwise give
the meaning other than what the law speaks for by itself, will open the
floodgates to various interpretations.[48] Indeed, if the intent were to
include salary increases as basis in the computation of backwages, the
same should have been explicitly stated in the same manner that the law
used clear and unambiguous terms in expressly providing for the
inclusion of allowances and other benefits.
150 Timoteo H. Sarona v. NLRC
(COMPUTED FROM TIME OF DISMISSAL UPTO FINALITY OF THE
CASE IF SEPARATION PAY WAS NOT GIVEN; ACTUAL RECEIPT)
FACTS:
The petitioner, who was hired by Sceptre as a security guard,
was asked by Karen Therese Tan, Sceptre's Operations Manager, to
submit a resignation letter as the same was supposedly required for
applying for a position at Royale.
Martin informed him that he would no longer be given any
assignment per the instructions of Aida Sabalones-Tan, general manager
of Sceptre. This prompted him to file a complaint for illegal dismissal.
While complainant is entitled to backwages, we are aware that his stint
with respondent Royale lasted only for one (1) month and three (3) days
such that it is our considered view that his backwages should be limited
to only three (3) months. The petitioner does not deny that he has
received the full amount of his backwages and separation pay as
provided under the NLRC's November 2005 Decision. However,
he claims that this does not preclude this Court from modifying a decision
that is tainted with grave abuse of discretion or issued without
jurisdiction.
ISSUE:
Whether the petitioner's backwages should be limited to his
salary for three (3) months
RULING:
No. In case separation pay is awarded and reinstatement is no
longer feasible, backwages shall be computed from the time of illegal
dismissal up to the finality of the decision should separation pay not be
paid in the meantime. It is the employee's actual receipt of the full
amount of his separation pay that will effectively terminate the
employment of an illegaly dismissed employee. Otherwise, the employer-
employee relationship subsists and the illegally dismissed employee is
entitled to backwages, taking into account the increases and
other benefits, including the 13th month pay, that were received by his co-
employees who are not dismissed. It is the obligation of the employer to
pay an illegally dismissed employee or worker the whole amount of the
salaries or wages, plus all other benefits and bonuses and general
increases, to which he would have been normally entitled had he not
been dismissed and had not stopped working.
NOTE:
a) full backwages and other benefits computed from October 1, 2003 (the
date Royale illegally dismissed the petitioner) until the finality of this
decision;
b) separation pay computed from April 1976 until the finality of this
decision at the rate of one month pay per year of service;
c) ten percent (10%) attorney’s fees based on the total amount of the
awards under (a) and (b) above;
d) moral damages of Twenty-Five Thousand Pesos (₱25,000.00); and
e) exemplary damages of Twenty-Five Thousand Pesos (₱25,000.00).
III. WHEN REINSTATEMENT NOT POSSIBLE
151 ROBINSONS GALLERIA/ROBINSONS SUPERMARKET
CORPORATION and/or JESS MANUEL, petitioners, vs. IRENE R.
RANCHEZ, respondents.
FACTS:
Respondent Ranchez was a probationary employee for 5
months. She was hired as a cashier by Robinsons sometime within that
period. Two weeks after she was hired, she reported the loss of cash
which she had placed in the company locker. She offered to pay for the
lost amount but the Operations Manager of Robinsons had her strip-
searched then reported her to the police even though they found nothing
on her person. An information for Qualified Theft was filed with the
Quezon City Regional Trial Court. She was detained for 2 weeks for
failure to immediately post bail. Weeks later, respondent Ranchez filed a
complaint for illegal dismissal and damages. A year later, Robinsons sent
to respondent by mail a notice of termination and/or notice of expiration
of probationary employment.
The Labor Arbiter dismissed the complaint for illegal dismissal,
alleging that at the time of filing respondent Ranchez had not yet been
terminated. She was merely investigated. However, the NLRC reversed
this ruling, stating that Ranchez was illegally dismissed and that
Robinson's should reinstate her. It held that Ranchez was deprived of
due process when she was strip-searched and sent to jail for two weeks
because such amounted to constructive dismissal, making it impossible
for the respondent to continue under the employment. Even though she
was merely a probationary employee, the lapse of the probationary
contract did not amount to a valid dismissal because there was already
an unwarranted constructive dismissal beforehand.
The NLRC denied Robinson's motion for reconsideration. The
CA affirmed the decision of the NLRC.
ISSUE:
Whether respondent was illegally terminated from employment
by petitioners.
HELD:
The petition is unmeritorious.
LABOR LAW: Probationary employees; termination of
employment
There is probationary employment when the employee upon
his engagement is made to undergo a trial period during which the
employer determines his fitness to qualify for regular employment based
on reasonable standards made known to him at the time of engagement.
A probationary employee, like a regular employee, enjoys
security of tenure. However, in cases of probationary employment, aside
from just or authorized causes of termination, an additional ground is
provided under Article 281 of the Labor Code,i.e., the probationary
employee may also be terminated for failure to qualify as a regular
employee in accordance with reasonable standards made known by the
employer to the employee at the time of the engagement. Thus, the
services of an employee who has been engaged on probationary basis
may be terminated for any of the following:
(1) a just or
(2) an authorized cause; and
(3) when he fails to qualify as a regular employee in
accordance with reasonable standards prescribed by the employer.
Article 277(b) of the Labor Code mandates that the employer
shall furnish the worker, whose employment is sought to be terminated, a
written notice containing a statement of the causes of termination, and
shall afford the latter ample opportunity to be heard and to defend himself
with the assistance of a representative if he so desires, in accordance
with company rules and regulations pursuant to the guidelines set by the
Department of Labor and Employment.
In the instant case, based on the facts on record,
petitioners failed to accord respondent substantive and procedural
due process. haphazard manner in the investigation of the missing
cash, which was left to the determination of the police authorities and the
Prosecutor's Office, left respondent with no choice but to cry foul.
Administrative investigation was not conducted by petitioner
Supermarket. On the same day that the missing money was reported by
respondent to her immediate superior, the company already pre-judged
her guilt without proper investigation, and instantly reported her to the
police as the suspected thief, which resulted in her languishing in jail for
two weeks.
The due process requirements under the Labor Code are
mandatory and may not be replaced with police investigation or court
proceedings. An illegally or constructively dismissed employee,
respondent is entitled to: (1) either reinstatement, if viable, or separation
pay, if reinstatement is no longer viable; and (2) backwages. These two
reliefs are separate and distinct from each other and are awarded
conjunctively.
In this case, since respondent was a probationary employee at
the time she was constructively dismissed by petitioners, she is entitled
to separation pay and backwages. Reinstatement of respondent is no
longer viable considering the circumstances.
152 BERNADETH LONDONIO AND JOAN CORCORO v. BIO
RESEARCH, INC. AND WILSON Y. ANG
(QUITCLAIM DOES NOT PREVENT FILLING OF ILLEGAL
DISMISSAL)
FACTS:
Petitioners were employees of respondent Bio Research. They
were subsequently dismissed from employment. Bio Research claims
that due to financial difficulties, it was forced to retrench petitioners in a
move towards financial efficiency. Petitioners were made to execute a
quitclaim as they were given their separation pay. Petitioners still
pursued a complaint with the Labor Arbiter for illegal dismissal. They also
claim that the illegal dismissal was done as retaliation for a sexual
harassment complaint they filed against one of the company managers.
The Labor Arbiter found the dismissal to be illegal as the financial
difficulties of Bio Research were unproven, and that no criteria was
established in selecting the employees to be let go. The LA ordered
for payment of backwages and reinstatement, as well as the subsidiary
liability of respondent Ang, for having acted in bad faith. The NLRC, on
appeal, affirmed the findings of the LA. Upon appeal to the Court of
Appeals, the appellate court affirmed the finding of illegal dismissal, but
upheld the quitclaim executed by the petitioners. In addition, the CA
found that since there was no proof of bad faith on the part of
Respondent Ang, he should not be held subsidiarily liable. Petitioners
question these findings in the Supreme Court.
ISSUES:
Is the quitclaim is valid?
Is Respondent Ang subsidiarily liable to petitioners?
HELD:
A quitclaim does not prevent an illegally dismissed employee
from instituting an illegal dismissal case. And since the CA affirmed the
findings of illegal dismissal, Bio Research is indeed liable. Petitioners are
ordered reinstated, with payment of backwages. If not possible, then a
payment of separation pay of one-half month salary for every year
served.
The acts of corporate officers, done in behalf of the
corporation, are separate from their personal acts. Absent a showing of
bad faith, the ruling of the CA is proper. Respondent Ang should not have
been held liable for the corporate acts.
153 APO CHEMICAL MANUFACTURING CORPORATION and
MICHAEL CHENG, Petitioners, v. RONALDO A. BIDES, Respondent.
(DOCTRINE OF STRAINED RELATIONSHIP; REFUSAL TO BE
REINSTATED AND DEMANDS SEPARATION PAY = WAIVER OF
RELIEF OF REINSTATEMENT)
FACTS:
Ronaldo Bides (Bides) was an employee of Apo Chemical
Manufacturing Corporation (ACMC) for eleven (11) years. Matthew
Cheng (Matthew), the plant manager of ACMC, sent a written
memorandum requiring Bides to explain his refusal to sign the
disciplinary form in connection with his alleged infractions of loitering in
the comfort room for about five (5) to eight (8) minutes, two (2) to three
(3) times a day, on March 5, 6, 7, 8, 9 and 10, 2003 under pain of
revocation of his housing privileges. Bides explained that urinating, as he
was “nababalisawsaw” at the time, was not an infraction.
Allegedly, Matthew confronted Bides and prohibited him from
working the following day as he would be terminated from the ACMC.
Thus, Bides filed a complaint for illegal dismissal against ACMC.
The LA ruled that Bides was illegally dismissed. The NLRC
reversed the LA’s decision. The CA affirmed with modification the
NLRC’s decision. The CA ruled that there was no illegal dismissal but
ordered ACMC to pay Bides separation pay in lieu of reinstatement,
taking into account the strained relations between the parties.
ISSUE:
Whether strained relations exist between ACMC and Bides to
bar the latter’s reinstatement and justify the award of separation pay?
HELD:
The Court finds no merit in the petition.
LABOR LAW: doctrine of strained relations
The Court is well aware that reinstatement is the rule and,
for the exception of “strained relations” to apply, it should be proved
that it is likely that, if reinstated, an atmosphere of antipathy and
antagonism would be generated as to adversely affect the efficiency and
productivity of the employee concerned.
Under the doctrine of strained relations, the payment of
separation pay is considered an acceptable alternative to reinstatement
when the latter option is no longer desirable or viable. On one hand, such
payment liberates the employee from what could be a highly oppressive
work environment. On the other hand, it releases the employer from the
grossly unpalatable obligation of maintaining in its employ a worker it
could no longer trust. Moreover, the doctrine of strained relations has
been made applicable to cases where the employee decides not to
be reinstated and demands for separation pay.
In the present case, Bides has consistently maintained, from
the proceedings in the LA up to the CA, his refusal to be reinstated due
to his fear of reprisal which he could experience as a consequence of his
return. By doing so, Bides unequivocally foreclosed reinstatement as a
relief. DENIED.
C. NO JUST OR AUTHORIZED CAUSE; WITH DUE PROCESS
D. WITH JUST OR AUTHORIZED CAUSE; NO DUE PROCESS
154 WENPHIL CORPORATION, vs. NLRC AND ROBERTO MALLARE
FACTS:
Mallare was hired by petitioner as a crew member at its Cubao
Branch. He thereafter became the assistant head of the Backroom
department of the same branch. Private respondent had an altercation
(caused trouble during office hours and even defied his superiors
as they tried to pacify him) with a co-employee, Job Barrameda, as a
result of which he and Barrameda were suspended on the following
morning and in the afternoon of the same day a memorandum was
issued by the Operations Manager advising private respondent of his
dismissal from the service in accordance with their Personnel Manual,
prompting private respondent to file a complaint against petitioner for
unfair labor practice, illegal suspension and illegal dismissal.
ISSUE:
WON Mallare was afforded with due process.
HELD:
NO. Under Section 1, Rule XIV of the Implementing
Regulations of the Labor Code, it is provided that "No worker shall be
dismissed except for just or authorized cause provided by law and after
due process." Sections 2, 5, 6, and 7 of the same rules require that
before an employer may dismiss an employee the latter must be given a
written notice stating the particular act or omission constituting the
grounds thereof; that the employee may answer the allegations within a
reasonable period; that the employer shall afford him ample opportunity
to be heard and to defend himself with the assistance of his
representative, if he so desires; and that it is only then that the employer
may dismiss the employee by notifying him of the decision in writing
stating clearly the reasons therefor. Such dismissal is without prejudice to
the right of the employee to contest its validity in the Regional Branch of
the NLRC.
The failure of petitioner to give private respondent the benefit of
a hearing before he was dismissed constitutes an infringement of his
constitutional right to due process of law and equal protection of the laws.
The 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. Hence, since Petitioner committed an
infraction of the second requirement. Thus, it must be imposed a
sanction for its failure to give a formal notice and conduct an investigation
as required by law before dismissing petitioner from employment.
155 RUBEN SERRANO vs.NLRC and ISETANN DEPARTMENT
STORE
FACTS:
Serrano was hired by Isetann Department Store as a security
checker to apprehend shoplifters and prevent pilferage of merchandise.
Initially hired on contractual basis and eventually became a regular
employee He later became head of the Security Checkers Section
of private respondent. As a cost-cutting measure, private respondent
decided to phase out its entire security section and engage the services
of an independent security agency. For this reason, the company sent
Serrano of a verbal notice of its termination In view of the retrenchment
program of the company. The loss of his employment prompted petitioner
to file complaint for illegal dismissal, illegal layoff, unfair labor practice,
underpayment of wages, and non-payment of salary and overtime pay.
The Labor Arbiter rendered a decision finding petitioner to have
been illegally dismissed. He ruled that private respondent failed to
establish that it had retrenched its security section to prevent or minimize
losses to its business; that private respondent failed to accord due
process to petitioner; that private respondent failed to use reasonable
standards in selecting employees whose employment would be
terminated; that private respondent had not shown that petitioner and
other employees in the security section were so inefficient so as to justify
their replacement by a security agency, or that "cost-saving devices
[such as] secret video cameras (to monitor and prevent shoplifting) and
secret code tags on the merchandise" could not have been employed;
instead, the day after petitioner's dismissal, private respondent employed
a safety and security supervisor with duties and functions similar to those
of petitioner. Private respondent appealed to the NLRC which, in its
resolution of March 30, 1994; reversed the decision of the Labor Arbiter
and ordered petitioner to be given separation pay equivalent to one
month pay for every year of service, unpaid salary, and proportionate 13th
month pay. Petitioner contends that abolition of private respondent's
Security Checkers Section and the employment of an independent
security agency do not fall under any of the authorized causes for
dismissal under Art. 283 of the Labor Code.
ISSUE:
WON the dismissal was for an authorized cause.
HELD:
YES. The "[management of a company] cannot be denied the
faculty of promoting efficiency and attaining economy by a study of what
units are essential for its operation. To it belongs the ultimate
determination of whether services should be performed by its personnel
or contracted to outside agencies . . . [While there] should be mutual
consultation, eventually deference is to be paid to what management
decides." Consequently, absent proof that management acted in a
malicious or arbitrary manner, the Court will not interfere with the
exercise of judgment by an employer.
In the case at bar, we have only the bare assertion of petitioner
that, in abolishing the security section, private respondent's real purpose
was to avoid payment to the security checkers of the wage increases
provided in the collective bargaining agreement approved in 1990. Such
an assertion is not sufficient basis for concluding that the termination of
petitioner's employment was not a bona fide decision of management to
obtain reasonable return from its investment, which is a right guaranteed
to employers under the Constitution. Indeed, that the phase-out of the
security section constituted a "legitimate business decision" is a factual
finding of an administrative agency which must be accorded respect and
even finality by this Court since nothing can be found in the record which
fairly detracts from such finding. Accordingly, the termination of
petitioner's services was for an authorized cause, i.e., redundancy.
Hence, pursuant to Art. 283 of the Labor Code, petitioner
should be given separation pay at the rate of one month pay for every
year of service.
ISSUE:
WON the employer's failure to comply with the notice
requirement constitute a denial of due process.
HELD:
NO. Art. 283 also provides that to terminate the employment of
an employee for any of the authorized causes the employer must serve
"a written notice on the workers and the Department of Labor and
Employment at least one (1) month before the intended date thereof." In
the case at bar, petitioner was given a notice of termination on October
11, 1991. On the same day, his services were terminated. He was thus
denied his right to be given written notice before the termination of his
employment, and the question is the appropriate sanction for the violation
of petitioner's right.
The employer's failure to comply with the notice requirement
does not constitute a denial of due process but a mere failure to observe
a procedure for the termination of employment which makes the
termination of employment merely ineffectual. It is similar to the
failure to observe the provisions of Art. 1592, in relation to Art. 1191, of
the Civil Code in rescinding a contract for the sale of immovable property.
Under these provisions, while the power of a party to rescind a contract is
implied in reciprocal obligations, nonetheless, in cases involving the sale
of immovable property, the vendor cannot exercise this power even
though the vendee defaults in the payment of the price, except by
bringing an action in court or giving notice of rescission by means of a
notarial demand. Consequently, a notice of rescission given in the letter
of an attorney has no legal effect, and the vendee can make payment
even after the due date since no valid notice of rescission has been
given.
Indeed, under the Labor Code, only the absence of a just
cause for the termination of employment can make the dismissal of an
employee illegal, that if in proceedings for reinstatement under Art. 283, it
is shown that the termination of employment was due to an authorized
cause, then the employee concerned should not be ordered reinstated
even though there is failure to comply with the 30-day notice
requirement. Instead, he must be granted separation pay in accordance
with Art. 283.
If the employee's separation is without cause, instead of being
given separation pay, he should be reinstated. In either case, whether he
is reinstated or only granted separation pay, he should be paid full
backwages if he has been laid off without written notice at least 30 days
in advance.
On the other hand, with respect to dismissals for cause under
Art. 282, if it is shown that the employee was dismissed for any of the just
causes mentioned in said Art. 282, then, in accordance with that article,
he should not be reinstated. However, he must be paid backwages
from the time his employment was terminated until it is determined
that the termination of employment is for a just cause because the
failure to hear him before he is dismissed renders the termination of
his employment without legal effect.
156 JENNY M. AGABON and VIRGILIO C. AGABON,vs NLRC &
RIVIERA HOME IMPROVEMENTS, INC.
FACTS:
Riviera Home Improvements, Inc. employed petitioners Virgilio
Agabon and Jenny Agabon as gypsum board and cornice installers until
they were dismissed for abandonment of work. Petitioners assert that
they were dismissed because the private respondent refused to give
them assignments unless they agreed to work on a pakyaw basis. They
did not agree on this arrangement because it would mean losing benefits
as Social Security System (SSS) members. Petitioners also claim that
private respondent did not comply with the twin requirements of notice
and hearing. Private respondent, on the other hand, maintained that
petitioners were not dismissed but had abandoned their work. In fact,
private respondent sent two letters to the last known addresses of the
petitioners advising them to report for work. Private respondents
manager even talked to petitioner Virgilio Agabon by telephone sometime
in June 1999 to tell him about the new assignment at Pacific Plaza
Towers involving 40,000 square meters of cornice installation work.
However, petitioners did not report for work because they had
subcontracted to perform installation work for another company.
ISSUE:
WON the procedure for dismissal were observed
HELD:
 The procedure for terminating an employee is found in Book VI,
Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor Code:
Standards of due process: requirements of notice. In all
cases of termination of employment, the following standards of due
process shall be substantially observed:
I. For termination of employment based on just causes as defined in
Article 282 of the Code:
(a) A written notice served on the employee specifying the
ground or grounds for termination, and giving to said employee
reasonable opportunity within which to explain his side;
(b) A hearing or conference during which the employee
concerned, with the assistance of counsel if the employee so desires, is
given opportunity to respond to the charge, present his evidence or rebut
the evidence presented against him; and
(c) A written notice of termination served on the employee
indicating that upon due consideration of all the circumstances, grounds
have been established to justify his termination. In case of termination,
the foregoing notices shall be served on the employees last
known address.
In this case, the dismissal should be upheld because it was
established that the petitioners abandoned their jobs to work for another
company, a just cause under Art. 282. Private respondent, however, did
not follow the notice requirements and instead argued that sending
notices to the last known addresses would have been useless because
they did not reside there anymore. Unfortunately for the private
respondent, this is not a valid excuse because the law mandates the twin
notice requirements to the employees last known address. Thus, it
should be held liable for non-compliance with the procedural
requirements of due process.
The violation of petitioners right to statutory due process
by the private respondent warrants the payment of indemnity in the
form of nominal damages. The amount of such damages is
addressed to the sound discretion of the court, taking into account
the relevant circumstances.
157 JAKA FOOD PROCESSING CORPORATION vs. DARWIN
PACOT, et.al
FACTS:
Respondents were earlier hired by JAKA Foods Processing Corporation
until the latter terminated their employment because the corporation was
in dire financial straits. It is not disputed, however, that the termination
was effected without JAKA complying with the requirement under Article
283 of the Labor Code regarding the service of a written notice upon
the employees and the Department of Labor and Employment at least
one (1) month before the intended date of termination. Respondents
separately filed complaints for illegal dismissal wherein after due
proceedings, the Labor Arbiter rendered a decision declaring the
termination illegal and ordering JAKA and its HRD Manager to reinstate
respondents with full backwages, and separation pay if reinstatement is
not possible.
ISSUE:
What are the legal implications of a situation where an
employee is dismissed for cause but such dismissal was effected without
the employers compliance with the notice requirement under the Labor
Code.
HELD:
A dismissal for just cause under Article 282 implies that the
employee concerned has committed, or is guilty of, some violation
against the employer, i.e. the employee has committed some serious
misconduct, is guilty of some fraud against the employer, or, as in
Agabon, he has neglected his duties. Thus, it can be said that the
employee himself initiated the dismissal process.
On another breath, a dismissal for an authorized cause under
Article 283 does not necessarily imply delinquency or culpability on the
part of the employee. Instead, the dismissal process is initiated by the
employers exercise of his management prerogative, i.e. when the
employer opts to install labor saving devices, when he decides to cease
business operations or when, as in this case, he undertakes to
implement a retrenchment program. In dismissal for just cause under
Article 282, the payment of separation pay, as a rule, is not required and
a dismissal for authorized cause under Article 283, the law requires
payment of separation pay.
Accordingly, it is wise to hold that: (1) if the dismissal is based
on a just cause under Article 282 but the employer failed to comply with
the notice requirement, the sanction to be imposed upon him should be
tempered because the dismissal process was, in effect, initiated by an
act imputable to the employee; and (2) if the dismissal is based on an
authorized cause under Article 283 but the employer failed to comply
with the notice requirement, the sanction should be stiffer because the
dismissal process was initiated by the employers exercise of his
management prerogative.
In this case, JAKA was suffering from serious business losses
at the time it terminated respondents employment. It is, therefore,
established that there was ground for respondents dismissal, i.e.,
retrenchment, which is one of the authorized causes enumerated under
Article 283 of the Labor Code. Likewise, it is established that JAKA failed
to comply with the notice requirement under the same Article.
Considering the factual circumstances in the instant case and the above
ratiocination, we, therefore, deem it proper to fix the indemnity at
P50,000.00. In all cases of business closure or cessation of operation or
undertaking of the employer, the affected employee is entitled to
separation pay. This is consistent with the state policy of treating labor as
a primary social economic force, affording full protection to its rights as
well as its welfare. The exception is when the closure of business or
cessation of operations is due to serious business losses or
financial reverses; duly proved, in which case, the right of affected
employees to separation pay is lost for obvious reasons.
158 NELSON A. CULILI, Petitioner, v. EASTERN
TELECOMMUNICATIONS PHILIPPINES, INC., SALVADOR HIZON
(President and Chief Executive Officer), EMILIANO JURADO
(Chairman of the Board), VIRGILIO GARCIA (Vice President) and
STELLA GARCIA (Assistant Vice President), Respondents.
FACTS:
Respondent Eastern Telecommunications Philippines, Inc.
(ETPI) is a telecommunications company engaged mainly in the business
of establishing commercial telecommunications systems and leasing of
international datalines or circuits that pass through the international
gateway facility (IGF). The other respondents are ETPIs officers.
Petitioner Nelson A. Culili was employed by ETPI as a
Technician in its Field Operations Department in 1981. In 1996, Culili
was promoted to Senior Technician in the Customer Premises
Equipment Management Unit of the Service Quality Department.
As a telecommunications company and an authorized IGF
operator, ETPI was required, under RA No. 7925 and EO No. 109, to
establish landlines in Metro Manila and certain provinces. However, due
to interconnection problems with the PLDT, poor subscription and
cancellation of subscriptions, and other business difficulties, ETPI was
forced to halt its roll out of 129,000 landlines already allocated to a
number of its employees.
In 1998, due to business troubles and losses, ETPI was
compelled to implement a Right-Sizing Program which consisted of two
phases: the first phase involved the reduction of ETPIs workforce to only
those employees that were necessary and which ETPI could sustain; the
second phase entailed a company-wide reorganization which would
result in the transfer, merger, absorption or abolition of certain
departments of ETPI.
 As part of the first phase, ETPI offered to its employees who
had rendered at least fifteen years of service, the Special Retirement
Program, which consisted of the option to voluntarily retire at an earlier
age and a retirement package equivalent to two and a half (2) months
salary for every year of service. This offer was initially rejected by the
Eastern Telecommunications Employees Union (ETEU), ETPIs duly
recognized bargaining agent, which threatened to stage a strike. ETPI
explained to ETEU the exact details of the Right-Sizing Program and the
Special Retirement Program and after consultations with ETEUs
members, ETEU agreed to the implementation of both programs. Thus,
ETPI re-offered the Special Retirement Program and the corresponding
retirement package to the one hundred two (102) employees who
qualified for the program. Of all the employees who qualified to avail of
the program, only Culili rejected the offer.
Among the departments abolished was the Service Quality
Department. The functions of the Customer Premises Equipment
Management Unit, Culilis unit, were absorbed by the Business and
Consumer Accounts Department. As a result, Culilis position was
abolished due to redundancy and his functions were absorbed by the
Business and Consumer Accounts Department.
ETPI, through its Assistant Vice President Stella Garcia,
informed Culili of his termination from employment effective April 8, 1999.
Culili alleged that neither he nor the DOLE were formally
notified of his termination. Culili believed that ETPI had already decided
to dismiss him even prior to the March 8, 1999 letter. Moreover, Culili
asserted that ETPI had contracted out the services he used to perform to
a labor-only contractor which not only proved that his functions had not
become unnecessary, but which also violated their Collective Bargaining
Agreement (CBA) and the Labor Code. Aside from these, Culili also
alleged that he was discriminated against when ETPI offered some of his
co-employees an additional benefit in the form of motorcycles to induce
them to avail of the Special Retirement Program, while he was not.
ETPI denied singling Culili out for termination. ETPI claimed
that because there was no more work for Culili, it was constrained to
serve a final notice of termination to Culili, which Culili ignored. Thus, on
March 26, 1999, ETPI tendered to Culili his final pay check of
P859,033.99 consisting of his basic salary, leaves, 13th month pay and
separation pay. ETPI claimed that Culili refused to accept his termination
and continued to report for work.
Culili filed a complaint against ETPI and its officers for illegal
dismissal, unfair labor practice, and money claims before the Labor
Arbiter.
The Labor Arbiter found ETPI guilty of illegal dismissal and
unfair labor practice.
On appeal, the NLRC affirmed the Labor Arbiters decision but
modified the amount of moral and exemplary damages awarded.
The Court of Appeals found that Culilis position was validly
abolished due to redundancy. It further held that ETPI cannot be held
guilty of unfair labor practice as mere contracting out of services being
performed by union members does not per se amount to unfair labor
practice unless it interferes with the employees right to self-organization.
Hence, this petition.
ISSUE:
Whether or not Culili is illegally dismissed.
HELD:
The decision of the Court of Appeals is sustained.
LABOR LAW
There is redundancy when the service capability of the
workforce is greater than what is reasonably required to meet the
demands of the business enterprise. A position becomes redundant
when it is rendered superfluous by any number of factors such as over-
hiring of workers, decrease in volume of business, or dropping a
particular product line or service activity previously manufactured or
undertaken by the enterprise. Soriano, Jr. v. NLRC, G.R. No. 165594,
April 23, 2007
This Court also held that the following evidence may be
proffered to substantiate redundancy: the new staffing pattern, feasibility
studies/ proposal on the viability of the newly created positions, job
description and the approval by the management of the restructuring.
In the case at bar, ETPI was upfront with its employees about
its plan to implement a Right-Sizing Program. Even in the face of initial
opposition from and rejection of the said program by ETEU, ETPI
patiently negotiated with ETEUs officers to make them understand ETPIs
business dilemma and its need to reduce its workforce and streamline its
organization. This evidently rules out bad faith on the part of ETPI.
The records show that ETPI had sufficiently established not
only its need to reduce its workforce and streamline its organization, but
also the existence of redundancy in the position of a Senior Technician.
ETPI explained how it failed to meet its business targets and the factors
that caused this, and how this necessitated it to reduce its workforce and
streamline its organization. ETPI also submitted its old and new tables of
organization and sufficiently described how limited the functions of the
abolished position of a Senior Technician were and how it decided on
whom to absorb these functions.
LABOR LAW
Although the Court finds Culilis dismissal was for a lawful
cause and not an act of unfair labor practice, ETPI, however, was remiss
in its duty to observe procedural due process in effecting the termination
of Culili.
For termination of employment as defined in Article 283 of the
Labor Code, the requirement of due process shall be deemed complied
with upon service of a written notice to the employee and the appropriate
Regional Office of the Department of Labor and Employment at least
thirty days before effectivity of the termination, specifying the ground or
grounds for termination.
ETPI does not deny its failure to provide DOLE with a written
notice regarding Culilis termination. It, however, insists that it has
complied with the requirement to serve a written notice to Culili as
evidenced by his admission of having received it and forwarding it to his
union president.
The Court of Appeals, in finding that Culili was not afforded
procedural due process, held that Culilis dismissal was ineffectual, and
required ETPI to pay Culili full backwages in accordance with our
decision in Serrano v. NLRC, 387 Phil. 345 (2000).
Hence, since it has been established that Culilis termination
was due to an authorized cause and cannot be considered unfair labor
practice on the part of ETPI, his dismissal is valid. However, in view of
ETPIs failure to comply with the notice requirements under the Labor
Code, Culili is entitled to nominal damages in addition to his separation
pay.
159 PHILIPPINE CHARITY SWEEPSTAKES OFFICE BOARD OF
DIRECTORS and REYNALDO P. MARTIN v. MARIE JEAN C. LAPID
FACTS:
An administrative complaint was filed against the Respondent
for allegedly confronting, badmouthing and shouting invectives at Mr.
Guemo, in the presence of other employees and seeking assistance from
the PSCO. The PCSO Board of Directors found her guilty of discourtesy
in the course of official duties and grave misconduct and imposed on her
the penalty of dismissal from service.
On appeal with the CSC, the Commission dismissed the
respondent’s appeal for being moot and academic. Moreover, they ruled
that the respondent is a casual employee which means that she is not
entitled to security of tenure. However, the CA reversed the decision of
the Commission by reinstating the respondent in the service until the
expiration of her casual employment.
ISSUE:
 Did the CA gravely err in granting the respondent’s
petition, in effect, reversing the CSC’s resolutions.
HELD:
A new ruling recognizes that casual employees are covered by
the security of tenure and cannot be terminated within the period of his
employment except for cause. Despite this new ruling, it is not the
intention of the Court to make the status of a casual employee at par with
that of a regular employee, who enjoys permanence of employment. The
rule is still that casual employment will cease automatically at the end of
the period unless renewed as stated in the Plantilla of Casual
Employment. Casual employees may also be terminated anytime though
subject to certain conditions or qualifications. Thus, they may be laid-off
anytime before the expiration of the employment period provided any of
the following occurs:(1) when their services are no longer needed; (2)
funds are no longer available; (3) the project has already been
completed/finished; or (4) their performance are below par.
Equally important, they are entitled to due process especially if
they are to be removed for more serious causes or for causes other than
the reasons mentioned in CSC Form No. 001. The reason for this is that
their termination from the service could carry a penalty affecting their
rights and future employment in the government.
In the case at bench, the CSC itself found that Lapid was
denied due process as she was never formally charged with the
administrative offenses of Discourtesy in the Course of Official Duties
and Grave Misconduct, for which she was dismissed from the service. To
somehow remedy the situation, the petitioners mentioned in their
Memorandum before the CA that there was no reason anymore to
pursue the administrative charge against Lapid and to investigate further
as this was superseded by Memorandum dated September 14, 2005
recommending the termination of respondent Lapid’s casual
employment. They pointed out that this was precisely the reason why no
Formal Charge was issued. Clearly, the action of petitioners clearly
violated Lapid’s basic rights as a casual employee.
Therefore, the petition is denied and the respondent is allowed
to continue rendering services as teller of PCSO and is also entitled to
payment of backwages.
160 Concepcion vs. Minex Import Corp., G.R. No. 153569, January
24, 2012
Facts:
Respondent is engaged in the retail of semi-precious stones,
selling them in kiosks or stalls installed in various shopping centers. It
employed the petitioner initially as a salesgirl then later on as supervisor.
Working under her supervision were salesgirls Cristina Calung and Lida
Baquilar.
One day the petitioner and her salesgirls had sales of crystal
items totaling P39,194.50. At the close of business that day, they
conducted a cashcount of their sales proceeds, including those from the
previous two days and determined their total for the three days to be
P50,912.00. The petitioner wrapped the amount in a plastic bag and
deposited it in the drawer of the locked wooden cabinet of the kiosk.
The following day petitioner phoned respondent Vina Mariano
to report that the P50,912.00 was missing, explaining how she and her
salesgirls had placed the wrapped amount at the bottom of the cabinet
the night before, and how she had found upon reporting to work that
morning that the contents of the cabinet were in disarray and the money.
Later, while the petitioner was giving a detailed statement on
the theft to the security investigator of Harrison Plaza, Vina and Sylvia
Mariano, her superiors, arrived with a policeman who immediately placed
the petitioner under arrest and brought her to a police station where she
was investigated her and detained for a day.
Subsequently petitioner filed a case for illegal dismissal against
respondent and two days later respondent filed a criminal case for
qualified theft against petitioner. The petitioner insisted on her innocence,
reiterating that on the time the alleged crime took place she, together
with her two salesgirls, had first counted the cash before placing it in a
plastic bag that she deposited inside the drawer of the cabinet with the
knowledge of the other salesgirls. One of the salesgirls however averred
that she had left the petitioner alone because the latter had still to change
her clothes; and that that was the first time that the petitioner had ever
asked to be left behind, for they had previously left the kiosk together.
Respondent Vina declared that the petitioner did not call the office of
Minex for the pick-up of the P39,194.50 cash sales on that faithful day in
violation of the standard operating procedure (SOP) requiring cash
proceeds exceeding P10,000.00 to be reported for pick-up if the amount
could not be
deposited in the bank. After the preliminary investigation, the fiscal
rendered a resolution finding probable cause for qualified theft and
recommending the filing of an information against the petitioner. Thus,
she was charged with qualified theft before the Regional Trial Court.
The petitioner argued that there was no evidence at all upon
which Minex could validly dismiss her considering that she had not yet
been found guilty beyond reasonable doubt of the crime of qualified theft.
Issues:
Whether or not there was valid ground to terminate the
petitioner.
Ruling:
The petitioner’s argument is not novel. It has been raised and
rejected many times before on the basis that neither conviction beyond
reasonable doubt for a crime against the employer nor acquittal after
criminal prosecution was indispensable. Nor was a formal charge in court
for the acts prejudicial to the interest of the employer a pre-requisite for a
valid dismissal. The criminal charges initiated by the company against
private respondents and the finding after preliminary investigation of their
prima facie guilt of the offense charged constitute substantial evidence
termination based on loss of trust and confidence.
The Labor Tribunal need not have gone further as to require
private respondent’s conviction of the crime charged, or inferred
innocence on their part from their release from detention, which was
mainly due to their posting of bail. While there is a valid ground to
terminate petitioner, respondent however failed to comply with the
requirements of due process prior to the termination under the
implementing rules and regulations of the Labor Code.
In all cases of termination of employment, the following
standards of due process shall be substantially observed. For termination
of employment based on just causes as defined in Article 282 of the
Labor Code:
(i) A written notice served on the employee specifying the
ground or grounds for termination, and giving said employee reasonable
opportunity within which to explain his side.
(ii) A hearing or conference during which the employee
concerned, with the assistance of counsel if he so desires is given
opportunity to respond to the charge, present his evidence, or rebut the
evidence presented against him.
(iii) A written notice of termination served on the employee,
indicating that upon due consideration of all the circumstances, grounds
have been established to justify his termination
In this case the respondents immediately had her arrested and
investigated by the police authorities for qualified theft which constitutes
a denial of her right to due process of law, consisting in the opportunity to
be heard and to defend herself. In fact, their decision to dismiss her was
already final even before the police authority commenced an
investigation of the theft, the finality being confirmed by no less than
Sylvia Mariano herself telling the petitioner during their phone
conversation following the latter’s release from police custody that she
(Sylvia) “no longer wanted to see” her.
The fact that the petitioner was the only person suspected of
being responsible for the theft aggravated the denial of due process.

161 Skippers United Pacific vs. Doza, G.R. No. 175558, February 8,
2012
(DEMAND FOR REPATRIATION, NOT VOLUNTARY RESIGNATION)
Facts:
Petitioner deployed De Gracia, Lata and Aprosta to work on
board the vessel MV Wisdom Star. On December 3 1998, Skippers
alleges that De Garcia smelling strongly of alcohol, went to the cabin of
Gabriel Oleszek, MV Wisdom Stars’ Master. Skippers claims that he was
rude and shouted noisily to the master. De Gracia left the master’s cabin
after a few minutes and was heard shouting very loudly somewhere
down the corridors. The incident was evidenced by the Captain’s Report
sent on said date.
Furthermore, Skippers also claim that on January 22, 1999,
Aprosta, De Gracia, Lata and Daza arrived in the master’s cabin and
demanded immediate repatriation because they were not satisfied with
the ship. De Gracia, et al. threatened that they may become crazy any
moment and demanded for all outstanding payments due to them. The
incident is evidenced by a telex of Cosmoship MV Wisdom to skippers
but had conflicting dates.
De Gracia claims that Skippers failed to remit their respective
allotments, compelling them to vent their grievances with the Romanian
Seafarers Union. On January 28, 1999, the Filipino seafarers were
unceremoniously discharged and immediately repatriated. Upon arrival in
the Philippines, they filed a complaint for illegal dismissal with the LA.
The LA dismissed the seafarers’ complaint as the seafarers’
demand for immediate repatriation due to the dissatisfaction with the ship
is considered a voluntary pre-termination of employment. Such act was
deemed akin to resignation recognized under Article 285 of the LC. The
LA gave credence to the telex of the master’s report that the seafarers
indeed demanded immediate repatriation.
The NLRC agreed with the LA’s decision. The CA however
reversed the LA’s and the NLRC’s decision. The Court deemed the telex
message as a self-serving document that does not
satisfy the requirement of substantial evidence, or that amount of
relevant evidence which a reasonable mind might accept as adequate to
justify the conclusion that petitioners indeed voluntarily demanded their
immediate repatriation. Aggrieved, Skippers appeals the case with the
Supreme Court.
Issue:
Whether or not the seafarer’s demand for immediate
repatriation can be considered an act of voluntary resignation.
Ruling:
For a worker's dismissal to be considered valid, it must comply
with both procedural and substantive due process. The legality of the
manner of dismissal constitutes procedural due process, while the
legality of the act of dismissal constitutes substantive due process.
Procedural due process in dismissal cases consists of the twin
requirements of notice and hearing. The employer must furnish the
employee with two written notices before the termination of employment
can be effected: (1) the first notice apprises the employee of the
particular acts or omissions for which his dismissal is sought; and (2) the
second notice informs the employee of the employer's decision to
dismiss him. Before the issuance of the second notice, the requirement
of a hearing must be complied with by giving the worker an opportunity to
be heard. It is not necessary that an actual hearing be conducted.
Substantive due process, on the other hand, requires that dismissal by
the employer be made under a just or authorized cause under Articles
282 to 284 of the Labor Code.
In this case, there was no written notice furnished to De Gracia,
et al., regarding the cause of their dismissal. Cosmoship furnished a
written notice (telex) to Skippers, the local manning agency, claiming that
De Gracia, et al., were repatriated because the latter voluntarily pre-
terminated their contracts. This telex was given credibility and weight by
the Labor Arbiter and NLRC in deciding that there was pre-termination of
the employment contract "akin to resignation" and no illegal dismissal.
However, as correctly ruled by the CA, the telex message is "a biased
and self-serving document that does not satisfy the requirement of
substantial evidence." If, indeed, De Gracia, et al., voluntarily pre-
terminated their contracts, then De Gracia, et al., should have submitted
their written resignations. Article 285 of the Labor Code recognizes
termination by the employee of the employment contract by "serving
written notice on the employer at least one (1) month in advance." Given
that provision, the law contemplates the requirement of a written notice of
resignation. In the absence of a written resignation, it is safe to presume
that the employer terminated the seafarers. In addition, the telex
message relied upon by the Labor Arbiter and NLRC bore conflicting
dates of 22 January 1998 and 22 January 1999, giving doubt to the
veracity and authenticity of the document.
In 22 January 1998, De Gracia, et al., were not even employed yet by the
foreign principal.
162 SEBASTIAN F. OASAY, JR. Petitioner, v. PALACIO DEL
GOBERNADOR CONDOMINIUM CORPORATION and/or OMAR T.
CRUZ, Respondents.
(BUILDING ADMIN OF PDGCC, a GOCC; BREACH OF TRUST)
FACTS:
Respondent Palacio Del Gobernador Condominium
Corporation (PDGCC) is a government-owned and controlled corporation
organized for the purpose of owning and arranging the common areas of
Palacio Del Gobernador Condominium. The said condominium, all the
units therein having been acquired by the government, houses various
government agencies such as the Commission on Elections
(COMELEC), Bureau of Treasury and the Intramuros.
The Board of Directors of PDGCC, through its Board
Resolution No. 013 dated October 27, 1994, appointed the petitioner as
its permanent Building Administrator effective September 1, 1994.
PDGCC President Omar T. Cruz (Cruz) required the petitioner
to submit a written report on the allowances and other compensation, in
connection with his duties as Building Administrator, that he received
from the government offices housed in the condominium. Apparently, the
petitioner had been earning additional income for services that he
rendered for the COMELEC.
Petitioner submitted his written report wherein he admitted that
he had received additional compensation from the COMELEC for
services which he rendered after his regular working hours and on
Saturdays, Sundays and holidays. He explained that the COMELEC had
caused the rehabilitation of the 8th floor of the condominium and that he
was tasked by the former, for a stated compensation, to supervise and
monitor the rehabilitation.
After investigating the allegations against the petitioner, Atty.
Bernardo recommended to Cruz and the PDGCC Board of Directors the
filing of appropriate charges against the petitioner for violation of
Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) and
Republic Act No. 6713 (Code of Conduct and Ethical Standards for
Public Officials and Employees).
Cruz then directed the petitioner to turn over all of his
accountabilities to PDGCC. The foregoing was acknowledged by the
petitioner in his letter to the PDGCC Board of Directors dated November
17, 2006.
Nevertheless, on January 23, 2007, the petitioner filed a
Complaint for constructive dismissal with the arbitration branch of the
National Labor Relations Commission (NLRC) in Quezon City against
PDGCC and Cruz.
The Labor Arbiter (LA) rendered a Decision dismissing the
petitioners complaint, finding that there was substantial evidence to
conclude that the petitioner had breached the trust and confidence of
PDGCC. The NLRC affirmed the LA decision. Petitioner filed a petition
for certiorari before the CA but the same was denied. Undaunted, the
petitioner instituted the instant petition for review on certiorari before this
Court.
ISSUE: Whether or not the dismissal by reason of breach of trust was
valid
HELD:
Yes.
Labor Law
The first requisite for dismissal on the ground of loss of trust
and confidence is that the employee concerned must be holding a
position of trust and confidence.
Here, it is indubitable that the petitioner holds a position of trust
and confidence. The position of Building Administrator, being managerial
in nature, necessarily enjoys the trust and confidence of the employer.
The second requisite is that there must be an act that would
justify the loss of trust and confidence. Loss of trust and confidence, to
be a valid cause for dismissal, must be based on a willful breach of trust
and founded on clearly established facts. The basis for the dismissal
must be clearly and convincingly established but proof beyond
reasonable doubt is not necessary.
PDGCC had established, by clear and convincing evidence,
the petitioners acts which justified its loss of trust and confidence on the
former. On this score, the LA keenly observed that:
Complainants breach of the trust reposed in him as Building
Administrator is sufficiently supported by the evidence on record.
Complainants admission that he received remuneration from
Commission on Elections (COMELEC) whose office is housed at
respondent Palacio Del Gobernador Condominium justified his
termination of employment. Complainant cannot assert that he rendered
services to COMELEC only after office hours as his functions as Building
Coordinator would definitely have favored COMELEC in the performance
of his functions during regular office hours.
Likewise, as Building Administrator, his active vigilance in
reporting and informing the respondents as to the expired license to
operate of the EGB Security Agency and its revoked SEC Certificate of
Registration was his duty and look-out. In the instant case, complainant
instead of informing the respondents, kept this information from the
knowledge of the respondents and allowed the security agency to render
security services to the premises of respondents despite its expired
license and revoked SEC Certificate of Registration.
What escapes the foregoing argument of the petitioner is that
he is an employee of PDGCC and not of the COMELEC. It is undisputed
that PDGCC did not authorize nor was it informed of the services
rendered by the petitioner in favor of the COMELEC. To make matters
worse, the said services rendered by the petitioner are, essentially,
related to the performance of his duties as a Building Administrator of the
condominium.
On the procedural aspect, we find that PDGCC had observed due
process in effecting the dismissal of the petitioner.
DGCC complied with the first notice requirement, i.e. notice informing the
petitioner of his infractions, as shown by the following: (1) the
Memorandum dated September 27, 2005 sent by Cruz to the petitioner
requiring the latter to explain and to submit his report on the additional
compensation he received from COMELEC; and (2) the letter dated
December 9, 2005 sent by Cruz to the petitioner requiring him to explain
why he allowed the EGB Security Investigation and General Services,
Inc. to render services to the condominium.
The second notice requirement was likewise complied with by PDGCC
when it sent to the petitioner the Memorandum dated October 28, 2006
which, in essence, informed the latter that a new Building Administrator
had been appointed.
163 Lynvil Fishing Enterprises vs. Ariola, G.R. No. 181974, February
1, 2012
Facts:
Petitioner Lynvil Fishing Enterprises, Inc. (Lynvil) is engaged in
deep-sea fishing. Respondents’ services were engaged in various
capacities:
Andres G. Ariola, captain; Jessie D. Alcovendas, chief mate;
Jimmy B. Calinao, chief engineer; Ismael G. Nubla, cook; Elorde Bañez,
oiler; and Leopoldo G. Sebullen, bodegero.
On Aug. 1, 1998, Lynvil received a report from Ramonito
Clarido, one of its employees, that on July 31, 1998, he witnessed that
while on board the company vessel Analyn VIII, respondents conspired
with one another and stole eight tubs of “pampano” and “tangigue” fish
and delivered them to another vessel.
Petitioner filed a criminal complaint against respondents before
the office of the City Prosecutor of Malabon City which found probable
cause for indictment of respondents for the crime of qualified theft.
Relying on the finding and Nasipit Lumber Company v. NLRC, 257 Phil.
937 (1989), Lynvil asserted there was sufficient basis for valid
termination of employment of respondents based on serious misconduct
and/or loss of trust and confidence.
Issues:
Whether a finding of the city prosecutor of probable cause to
indict employees of qualified theft is sufficient basis for valid termination
for serious misconduct and/or loss of trust or confidence?
Whether the employees were validly terminated?
Ruling:
On the first issue, the Supreme Court ruled in the negative. We
ruled that proof beyond reasonable doubt of an employee’s misconduct is
not required when loss of confidence is the ground for dismissal. It is
sufficient if the employer has “some basis” to lose confidence or that the
employer has reasonable ground to believe or to entertain the moral
conviction that the employee concerned is responsible for the misconduct
and that the nature of his participation therein rendered him absolutely
unworthy of the trust and confidence demanded by his position.
Lynvil cannot argue that since the Office of the Prosecutor
found probable cause for theft the Labor Arbiter must follow the finding
as a valid reason for the termination of respondents’ employment. The
proof required for purposes that differ from one and the other are likewise
different.
On the second question, the Court stated that nonetheless,
even without reliance on the prosecutor’s finding, we find that there was
valid cause for respondents’ dismissal.
Just cause is required for a valid dismissal. The Labor Code
provides that an employer may terminate an employment based on fraud
or willful breach of the trust reposed on the employee. Such breach is
considered 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 also be based on
substantial evidence and not on the employer’s whims or caprices or
suspicions otherwise, the employee would eternally remain at the mercy
of the employer. Loss of confidence 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 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 or that the employee
concerned is entrusted with confidence with respect to delicate matters,
such as the handling or care and protection of the property and assets of
the employer. The betrayal of this trust is the essence of the offense for
which an employee is penalized. Breach of trust is present in this case.
However, Lynvil contends that it cannot be guilty of illegal
dismissal because the private respondents were employed under a fixed-
term contract which expired at the end of the voyage. Contrarily, the
private respondents (employees) contend that they became regular
employees by reason of their continuous hiring and performance of tasks
necessary and desirable in the usual trade and business of Lynvil.
Jurisprudence, laid two conditions for the validity of a fixed-
contract agreement between the employer and employee: first, 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 second, 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.
In the context of the facts that: (1) the respondents were doing tasks
necessarily to Lynvil’s fishing business with positions ranging from
captain of the vessel to bodegero; (2) after the end of a trip, they will
again be hired for another trip with new contracts; and (3) this
arrangement continued for more than ten years, the clear intention is to
go around the security of tenure of the respondents as regular
employees. And respondents are so by the express provisions of the
second paragraph of Article 280, thus: xxx Provided, That any employee
who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall
continue while such activity exists.
Having found that respondents are regular employees who
may be, however, dismissed for cause as we have so found in this case,
there is a need to look into the procedural requirement of due process in
Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code.
It is required that the employer furnish the employee with two written
notices: (1) a written notice served on the employee specifying the
ground or grounds for termination, and giving to said employee
reasonable opportunity within which to explain his side; and (2) a written
notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to
justify his termination. In this case, it is clear that the employees were not
given the final written notices of dismissal.
The Court ruled that since employees were dismissed for just
cause, they were not entitle to separation pay and backwages. However,
they were to be granted nominal damages for failure of the employer to
comply with statutory due process.
164 Norkis vs. Buat - GR No. 185255
FACTS:
Respondent Delfin S. Descallar was assigned at the Iligan City
Branch of petitioner Norkis Distributors, Inc., a distributor of Yamaha
motorcycles. He became a regular employee and was promoted as
Branch Manager. He acted as branch administrator and had supervision
and control of all the employees. Respondent was also responsible for
sales and collection
In a memorandum, petitioners required respondent to explain
in writing within 48 hrs why he should not be penalized or terminated for
being absent without official leave (AWOL) or rendering under-time
service on certain dates. Respondent explained that he reported to the
office on those dates, but he either went to the bank or followed-up on
prospects. As he was still within city limits, he did not file any official
leave or travel record.
Norkis conducted an investigation. Finding that respondent was
not able to prove that he was really in the branch or on official travel,
petitioners suspended him for 15 days without pay. According to
petitioners, respondent admitted during the investigation that he used
company time for his personal affairs, but only for a few hours and not
the whole day.
While respondent was still suspended, Norkis also found that
Respondent committed some inappropriate and irregular acts such as
unexplained low performance of his branch, missing funds, unauthorized
disbursement of funds, irregular transactions.
Petitioners terminated respondent’s services for loss of trust
and confidence and gross inefficiency. Respondent filed a complaint for
illegal suspension and illegal dismissal. LA favored respondent.
Petitioners appealed to NLRC. NLRC reversed the LA’s decision and
found respondent to have been validly dismissed. The NLRC, however,
upheld the LA’s finding that petitioners are liable to respondent for unpaid
wages. Respondent filed MR. It was denied so he filed with the CA a
petition for certiorari. CA reinstated with modification the decision of the
LA. Respondent filed a motion for clarification as to the awards of
separation pay and back wages while petitioners filed MR. CA issued a
Resolution stating that as regards respondent’s motion for clarification,
the separation pay and back wages shall be reckoned from the time
respondent was illegally suspended until finality of its earlier Decision.
The CA likewise denied petitioners’ MR. Hence, petitioners filed the
present petition.
ISSUE:
Was respondent lawfully dismissed for grounds of loss of trust
and confidence?
RULING:
NO. Loss of trust and confidence as a ground for termination of
an employee under Article 282 of the Labor Code requires that the
breach of trust be willful, meaning it must be done intentionally,
knowingly, and purposely, without justifiable excuse. The basic premise
for dismissal on the ground of loss of confidence is that the employee
concerned holds a position of trust and confidence. It is the breach of this
trust that results in the employer’s loss of confidence in the employee.
Here, there is no question that as petitioners’ Branch Manager
in Iligan City, respondent was holding a position of trust and confidence.
He was responsible for the administration of the branch, and exercised
supervision and control over all the employees. He was also incharge of
sales and collection.
In termination cases, the burden of proof rests upon the
employer to show that the dismissal is for a just and valid cause and
failure to do so would necessarily mean that the dismissal was illegal.
The quantum of proof required in determining the legality of an
employee’s dismissal is only substantial evidence. CA correctly held that
petitioners failed to discharge this burden.
Petitioners having failed to establish by substantial evidence
any valid ground for terminating respondent’s services, we uphold the
finding of the Labor Arbiter and the CA that respondent was illegally
dismissed.
An illegally dismissed employee is entitled to two reliefs:
back wages and reinstatement. The two reliefs provided are separate
and distinct. In instances where reinstatement is no longer feasible
because of strained relations between the employee and the employer,
separation pay is granted. The normal consequences of respondent’s
illegal dismissal, then, are reinstatement without loss of seniority rights,
and payment of back wages computed from the time compensation was
withheld from him up to the date of actual reinstatement. Where
reinstatement is no longer viable as an option, separation pay equivalent
to one month salary for every year of service should be awarded as an
alternative. The payment of separation pay is in addition to payment of
back wages.
The CA merely clarified the period of payment of back wages
and separation pay up to the finality of its decision modifying the LA’s
decision. In view of the modification of monetary awards in the Labor
Arbiter’s decision, the time frame for the payment of back wages and
separation pay is accordingly modified to the finality of the CA decision.
 WHEREFORE, the petition for review on certiorari is DENIED.
165 Armando Ailing, Petitioner vs. Jose B. Feliciano, Manuel F. San
Mateo III, et al., Respondents
FACTS:
Respondent Wide Wide World Express Corporation (WWWEC) offered to
employ petitioner Armando Aliling (Aliling) on June 2, 2004 as “Account
Executive (Seafreight Sales),”. The offer came with a six (6)-month
probation period condition with this express caveat: “Performance during
probationary period shall be made as basis for confirmation to Regular or
Permanent Status.”
On June 11, 2004, Aliling and WWWEC inked an Employment Contract
under the terms of conversion to regular status shall be determined on
the basis of work performance; and employment services may, at any
time, be terminated for just cause or in accordance with the standards
defined at the time of engagement.
However, instead of a Sea freight Sale assignment, WWWEC asked
Aliling to handle Ground Express (GX), a new company product launched
on June 18, 2004 involving domestic cargo forwarding service for Luzon.
Marketing this product and finding daily contracts for it formed the core of
Aliling’s new assignment.
A month after, Manuel F. San Mateo III (San Mateo), WWWEC Sales
and Marketing Director, emailed Aliling to express dissatisfaction with the
latter’s performance.
On October 15, 2004, Aliling tendered his resignation to San Mateo.
While WWWEC took no action on his tender, Aliling nonetheless
demanded reinstatement and a written apology, claiming in a subsequent
letter dated October 1, 2004 to management that San Mateo had forced
him to resign.
On October 6, 2004, Lariosa again wrote, this time to advise Aliling of the
termination of his services effective as of that date owing to his “non-
satisfactory performance” during his probationary period. Records show
that Aliling, for the period indicated, was paid his outstanding salary.
However, or on October 4, 2004, Aliling filed a Complaint for illegal
dismissal due to forced resignation, nonpayment of salaries as well as
damages with the NLRC against WWWEC.
On April 25, 2006, the Labor Arbiter issued a decision declaring that the
grounds upon which complainant’s dismissal was based did not conform
not only the standard but also the compliance required under Article 281
of the Labor Code, Necessarily, complainant’s termination is not justified
for failure to comply with the mandate the law requires. Respondents
should be ordered to pay salaries corresponding to the unexpired portion
of the contract of employment and all other benefits amounting to a total
of P35,811.00 covering the period from October 6 to December 7, 2004.
Both parties appealed the decision to the NLRC, which affirmed the
decision of the Labor Arbiter and was later on sustained by the Court of
Appeals.
Case was elevated to the Supreme Court under Rule 45 Review on
Certiorari Comment was made that WWWEC hired petitioner on a
probationary basis and fired him before he became a regular employee.
ISSUE:
Whether or not Aliling was illegally dismissed.
RULING:
Petitioner was illegally dismissed.
To justify fully the dismissal of an employee, the employer must, as a
rule, prove that the dismissal was for a just cause and that the employee
was afforded due process prior to dismissal. As a complementary
principle, the employer has the onus of proving with clear, accurate,
consistent, and convincing evidence the validity of the dismissal.
Aliling was dismissed for an unjust cause
First off, the attendant circumstances in the instant case aptly show that
the issue of petitioner’s alleged failure to achieve his quota, as a ground
for terminating employment, strikes the Court as a mere afterthought on
the part of WWWEC.
What WWWEC considered as the evidence purportedly showing it gave
Aliling the chance to explain his inability to reach his quota was a
purported September 20, 2004 memo of San Mateo addressed to the
latter. However, Aliling denies having received such letter and WWWEC
has failed to refute his contention of non-receipt. In net effect, WWWEC
was at a loss to explain the exact just reason for dismissing Aliling.
At any event, assuming for argument that the petitioner indeed failed to
achieve his sales quota, his termination from employment on that ground
would still be unjustified. Article 282 of the Labor Code considers any of
the following acts or omission on the part of the employee as just cause
or ground for terminating employment:
(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 duly authorized representatives; and
(e) Other causes analogous to the foregoing. (Emphasis
supplied)
An employee’s failure to meet sales or work quotas falls under the
concept of gross inefficiency, which in turn is analogous to gross neglect
of duty that is a just cause for dismissal under Article 282 of the Code.
However, in order for the quota imposed to be considered a valid
productivity standard and thereby validate a dismissal, managements
prerogative of fixing the quota must be exercised in good faith for the
advancement of its interest. The duty to prove good faith, however, rests
with WWWEC as part of its burden to show that the dismissal was for a
just cause. WWWEC must show that such quota was imposed in good
faith. This WWWEC failed to do, perceptibly because it could not. The
fact of the matter is that the alleged imposition of the quota was a
desperate attempt to lend a semblance of validity to Alilings illegal
dismissal.
Being an experimental activity and having been launched for the first
time, the sales of GX services could not be reasonably quantified.
WWWEC failed to demonstrate the reasonableness and the bona
fides on the quota imposition. Respondent WWWEC miserably failed to
prove the termination of petitioner was for a just cause nor was there
substantial evidence to demonstrate the standards were made known to
the latter at the time of his engagement. Hence, petitioners right to
security of tenure was breached.
Alilings right to procedural due process was violated
As earlier stated, to effect a legal dismissal, the employer must show not
only a valid ground therefor, but also that procedural due process has
properly been observed. When the Labor Code speaks of procedural due
process, the reference is usually to the two (2)-written notice rule
envisaged in Section 2 (III), Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code, which provides:
Section 2. Standard of due process: requirements of notice. In
all cases of termination of employment, the following standards
of due process shall be substantially observed.
 I. For termination of employment based on just causes as defined in
Article 282 of the Code:
(a) A written notice served on the employee specifying the ground
or grounds for termination, and giving to said employee reasonable
opportunity within which to explain his side;
(b) A hearing or conference during which the employee
concerned, with the assistance of counsel if the employee so
desires, is given opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him; and
(c) A written notice [of] termination served on the employee
indicating that upon due consideration of all the circumstance,
grounds have been established to justify his termination.
Here, the first and second notice requirements have not been properly
observed, thus tainting petitioners dismissal with illegality.
The adverted memo dated September 20, 2004 of WWWEC supposedly
informing Aliling of the likelihood of his termination and directing him to
account for his failure to meet the expected job performance would have
had constituted the charge sheet, sufficient to answer for the first notice
requirement, but for the fact that there is no proof such letter had been
sent to and received by him. In fact, in his December 13, 2004
Complainants Reply Affidavit, Aliling goes on to tag such
letter/memorandum as fabrication. WWWEC did not adduce proof to
show that a copy of the letter was duly served upon Aliling. Clearly
enough, WWWEC did not comply with the first notice requirement.
Neither was there compliance with the imperatives of a hearing or
conference. The Court need not dwell at length on this particular breach
of the due procedural requirement. Suffice it to point out that the record is
devoid of any showing of a hearing or conference having been
conducted. On the contrary, in its October 1, 2004 letter to Aliling, or
barely five (5) days after it served the notice of termination, WWWEC
acknowledged that it was still evaluating his case. And the written notice
of termination itself did not indicate all the circumstances involving the
charge to justify severance of employment.
166 PRUDENTIAL GUARANTEE AND ASSURANCE EMPLOYEE
LABOR UNION and SANDY T. VALLOTA, Petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION, PRUDENTIAL GUARANTEE
AND ASSURANCE INC., and/or JOCELYN RETIZOS, Respondents.
(HEARING IS MANDATORY; FAILURE TO OBSERVE = NOMINAL
DAMAGES)
FACTS:
Vallota was employed by Prudential Guarantee as a Junior
Programmer on May 16, 1995. He reported directly to Gerald Dy Victory,
then head of the EDP, until his replacement by respondent Jocelyn
Retizos sometime in 1997. In August of 2005, Vallota was elected to the
Board of Directors of the Union.
On November 11, 2005, HR Manager, Atty. Rillo informed
Union President, Mike Apostol that PGAI was going to conduct an on-
the-spot security check in the Information and Technology Department.
The inspection team proceeded to the IT Department, and the
EDP head, through PGAI network administrator Angelo Gutierrez
initiated the spot check of IT Department computers, beginning with the
one assigned to Vallota. After exploring the contents of all the folders and
subfolders in the "My Documents" folder, a folder named AAwas found,
which Vallota claimed to be about a mutual life fund. Retizos, on the
other hand, asked Vallota if was working for MAA Mutual Life and
sending them confidential documents of PGAI.
Sensing that Vallota was being singled out, Apostol insisted
that all the computers in the IT Department, including that of Retizos, be
also subjected to a spot security check. Later, at Retizos office, and in
the presence of Atty. Rillo, Vallota was informed that Retizos and Atty.
Rillo would print the files found in his computer under the folder "MAA."
Vallota did not object. After the files were printed, Vallota and the Union
Secretary were asked to sign each page of the printout. Vallota, however,
was not given a copy of the printed file.
On November 14, 2005, Vallota received a memorandum
directing him to explain within 72 hours why highly confidential files were
stored in his computer, which also informed him that he was being placed
under preventive suspension for 30 days effective upon receipt of the
said notice. A second memorandum, also dated November 14, 2005,
notified Vallota of the extension of his preventive suspension for another
30 days, in view of the fact that the management needed more time to
evaluate the administrative case against him.
On November 24, 2005, PGAI sent him another memorandum
requesting further details on some of the matters he raised in his
response. In a letter dated December 6, 2005, Vallota requested a
conference, to be attended by a Union representative and counsel. PGAI
sent Vallota another memorandum dated December 7, 2005, which,
among others, set a new deadline for Vallota to submit his reply and
evidence in his defense. In compliance with the deadline set, Vallota
submitted his reply-memorandumdated December 12, 2005, outlining his
response to the charges.
Meanwhile, the Union sent a letter to PGAI President Philip K.
Rico requesting that a grievance committee be convened and that the
contents of the computers of other IT personnel be similarly produced.
The request for the convening of a grievance committee was ignored. On
December 21, 2005, Vallota was given a notice of termination of his
employment effective January 10, 2006 on the ground of loss of trust and
confidence.
Thus, the petitioners filed a complaint for illegal dismissal with
claims for full backwages, moral and exemplary damages, and attorney
fees.
On March 31, 2006, Labor Arbiter Aliman D. Mangandog
rendered a decision in favor of the petitioners. The respondents filed their
Memorandum of Appeal dated May 19, 2006. On June 30, 2006, the
National Labor Relations Commission dismissed the appeal on the
ground that the respondents failed to submit a certificate of non-forum
shopping in accordance with the Rules of Procedure of the NLRC.
The respondents filed their Motion for Reconsideration dated
July 17, 2006, which the Union opposed. On October 31, 2007, the
NLRC granted the respondents motion for reconsideration and reversed
and set aside the decision of the LA.
ISSUE:
Whether or not Vallota was validly dismissed on the ground of
loss of trust and confidence?
HELD:
The Court discussion in Mabeza v. National Labor
Relations Commission is instructive:
Loss of confidence as a just cause for dismissal was never
intended to provide employers with a blank check for terminating their
employees. Such a vague, all-encompassing pretext as loss of
confidence, if unqualifiedly given the seal of approval by this Court, could
readily reduce to barren form the words of the constitutional guarantee of
security of tenure. Having this in mind, loss of confidence should ideally
apply only to cases involving employees occupying positions of trust and
confidence or to those situations where the employee is routinely
charged with the care and custody of the employer's money or property.
To the first class belong managerial employees, i.e., those vested with
the powers or prerogatives to lay down management policies and/or to
hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees or effectively recommend such managerial actions; and to the
second class belong cashiers, auditors, property custodians, etc., or
those who, in the normal and routine exercise of their functions, regularly
handle significant amounts of money or property.
In Bristol Myers Squibb (Phils.), Inc. v. Baban,the Court
discussed the requisites for a valid dismissal on the ground of loss of
trust and confidence:
 It is clear that Article 282(c) of the Labor Code allows an
employer to terminate the services of an employee for loss of trust and
confidence. The right of employers to dismiss employees by reason of
loss of trust and confidence is well established in jurisprudence.
The first requisite for dismissal on the ground of loss of trust
and confidence is that the employee concerned must be one holding a
position of trust and confidence. There are two (2) classes of positions of
trust. The first class consists of managerial employees. They are defined
as those vested with the powers or prerogatives to lay down
management policies and to hire, transfer suspend, lay-off, recall,
discharge, assign or discipline employees or effectively recommend such
managerial actions. The second class consists of cashiers, auditors,
property custodians, etc. They are defined as those who in the normal
and routine exercise of their functions, regularly handle significant
amounts of money or property. Xxx
The second requisite is that there must be an act that would
justify the loss of trust and confidence. Loss of trust and confidence to be
a valid cause for dismissal must be based on a willful breach of trust and
founded on clearly established facts. The basis for the dismissal must be
clearly and convincingly established but proof beyond reasonable doubt
is not necessary.
Thus, the first question to be addressed is whether Vallota held
a position of trust and confidence. Vallota was employed by PGAI as a
Junior Programmer assigned to the EDP Department. Based on the
standards set by previous jurisprudence, Vallota position as Junior
Programmer is analogous to the second class of positions of trust and
confidence. Though he did not physically handle money or property, he
became privy to confidential data or information by the nature of his
functions. At a time when the most sensitive of information is found not
printed on paper but stored on hard drives and servers, an employee
who handles or has access to data in electronic form naturally becomes
the unwilling recipient of confidential information.
Having addressed the nature of his position, the next question
is whether the act complained of justified the loss of trust and confidence
of Vallota employer so as to constitute a valid cause for dismissal. It
must, thus, be determined whether the alleged basis for dismissal was
based on clearly established facts.
The act alleged to have caused the loss of trust and confidence
of PGAI in Vallota was the presence in his computer hard drive of a
folder named "MAA" allegedly containing files with information on MAA
Mutual Life Philippines, a domestic corporation selling life insurance
policies to the buying public, and files relating to PGAI internal affairs.
While the law and this Court recognize the right of an employer
to dismiss an employee based on loss of trust and confidence, the
evidence of the employer must clearly and convincingly establish the
facts upon which the loss of trust and confidence in the employee is
based.
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 arbitrariness, whims,
caprices or suspicion; otherwise, the employee would remain eternally at
the mercy of the employer. Further, in order to constitute a just cause for
dismissal, the act complained of must be work-related and show that the
employee concerned is unfit to continue working for the employer. Such
ground for dismissal has never been intended to afford an occasion for
abuse because of its subjective nature.
In this case, there was no other evidence presented to prove
fraud in the manner of securing or obtaining the files found in Vallota
computer. In fact, aside from the presence of these files in Vallota hard
drive, there was no other evidence to prove any gross misconduct on his
part. There was no proof either that the presence of such files was part of
an attempt to defraud his employer or to use the files for a purpose other
than that for which they were intended. If anything, the presence of the
files reveals some degree of carelessness or neglect in his failure to
delete them, but it is an extremely farfetched conclusion bordering on
paranoia to state that it is part of a larger conspiracy involving corporate
espionage.
Moreover, contrary to the respondents allegations, the MAA
files found in Vallota computer, the prospectus and corporate profile, are
not sensitive corporate documents. These are documents routinely made
available to the public, and serve as means to inform the public about the
company and to disseminate information about the products it sells or the
services it provides, in order that potential clients may make a sound and
informed decision whether or not to purchase or avail of such goods and
services.
If anything, the presence of the files would merely merit the
development of some suspicion on the part of the employer, but should
not amount to a loss of trust and confidence such as to justify the
termination of his employment. Such act is not of the same class, degree
or gravity as the acts that have been held to be of such character. While
Vallota act or omission may have been done carelessly, it falls short of
the standard required for termination of employment. It does not manifest
either that the employee concerned is unfit to continue working for his
employer.
Procedural due process requirements for termination - In
this case, the two-notice requirement was complied with. By the
petitioners own admission, PGAI issued to Vallota a written Notice of
Charges & Preventive Suspension dated November 14, 2005. After an
exchange of memoranda, PGAI then informed Vallota of his dismissal in
its decision dated December 21, 2005.
Given, however, that the petitioners expressly requested a
conference or a convening of a grievance committee, following the
Court ruling in the Perez case, which was later cited in the recent
case of Lopez v. Alturas Group of Companies, such formal hearing
became mandatory. After PGAI failed to affirmatively respond to
such request, it follows that the hearing requirement was not
complied with and, therefore, Vallota was denied his right to
procedural due process.
Reinstatement and backwages - In light of the above
discussion, Vallota is entitled to reinstatement and backwages, reckoned
from the date he was illegally dismissed until the finality of this decision in
accordance with jurisprudence.
In view of the strained relations between Vallota and PGAI,
however, it is not in the best interest of the parties, nor is it advisable or
practical to order reinstatement. Where reinstatement is no longer viable
as an option, separation pay equivalent to one (1) month salary for every
year of service should be awarded as an alternative. It must be stressed,
however, that an illegally dismissed employee is entitled to two reliefs:
backwages and reinstatement, which are separate and distinct. In
Golden Ace Builders v. Tagle, it was written:
Thus, an illegally dismissed employee is entitled to two reliefs:
backwages and reinstatement. The two reliefs provided are separate and
distinct. In instances where reinstatement is no longer feasible because
of strained relations between the employee and the employer, separation
pay is granted. In effect, an illegally dismissed employee is entitled to
either reinstatement, if viable, or separation pay if reinstatement is no
longer viable, and backwages.
The normal consequences of respondentsillegal dismissal,
then, are reinstatement without loss of seniority rights, and payment of
backwages computed from the time compensation was withheld up to the
date of actual reinstatement. Where reinstatement is no longer viable as
an option, separation pay equivalent to one (1) month salary for every
year of service should be awarded as an alternative. The payment of
separation pay is in addition to payment of backwages.
Velasco v. National Labor Relations Commission,
emphasizes:
The accepted doctrine is that separation pay may avail in lieu
of reinstatement if reinstatement is no longer practical or in the best
interest of the parties. Separation pay in lieu of reinstatement may
likewise be awarded if the employee decides not to be reinstated.
Under the doctrine of strained relations, the payment of
separation pay is considered an acceptable alternative to reinstatement
when the latter option is no longer desirable or viable. On one hand, such
payment liberates the employee from what could be a highly oppressive
work environment. On the other hand, it releases the employer from the
grossly unpalatable obligation of maintaining in its employ a worker it
could no longer trust.
GRANTED
I. CONSTRUCTIVE DISMISSAL
167 DANILO LEONARDO vs. NATIONAL LABOR RELATIONS
COMMISSION
FACTS:
AURELIO FUERTE was employed by REYNALDOS
MARKETING CORPORATION his compensation was P122.00 a day,
augmented by a weekly supervisors allowance of P600.00. FUERTE
alleges that he was instructed to report at private respondents main office
where he was informed by the companys 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 supervisors 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. Private respondent contends that it never
terminated petitioners services. Private respondent claims that Fuerte
was demoted pursuant to a company policy intended to foster
competition among its employees.
Under this scheme, private respondents employees are
required to comply with a monthly sales quota. Should a supervisor such
as FUERTE fail to meet his quota for a certain number of consecutive
months, he will be demoted, whereupon his supervisors allowance will
be withdrawn and be given to the individual who takes his place. When
the employee concerned succeeds in meeting the quota again, he is re-
appointed supervisor and his allowance is restored.
ISSUE:
WON Fuerte was constructively dismissed.
HELD:
NO. 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. ] The two circumstances are deemed badges of bad
faith, and thus constitutive of constructive dismissal. 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. To constitute such a
ground for dismissal, 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.
168 Julie’s Bakeshop and/or Edgar Reyes, Petitioners, vs. HENRY
ARNAIZ, EDGAR NAPAL,⃰ and Jonathan Tolores, Respondents.
FACTS:
Julie’s Bakeshop and/or Edgar Reyes (Reyes) assail the
decision of the CA which reversed the Resolutions of the NLRC and
ordered petitioners to reinstate respondents Henry Arnaiz (Arnaiz), Edgar
Napal (Napal) and Jonathan Tolores (Tolores) and to pay them their
backwages for having been constructively dismissed, as well as their
other monetary benefits.
THE CASE:
Reyes hired respondents as chief bakers in his three franchise
branches of Julie’s Bakeshop in Sibalom and San Jose, Antique.
Respondents filed separate complaints against petitioners for
underpayment of wages, payment of premium pay for holiday and rest
day, service incentive leave pay, 13th month pay, cost of living allowance
(COLA) and attorney’s fees. These complaints were later on
consolidated.
Subsequently, in a memorandum dated February 16, 2000,
Reyes reassigned respondents as utility/security personnel tasked
to clean the outside vicinity of his bakeshops and to maintain peace
and order in the area. Upon service of the memo, respondents,
however, refused to sign the same and likewise refused to perform
their new assignments by not reporting for work.
LABOR ARBITER:
expressed dismay over respondents’ lack of good faith in
negotiating a settlement. The Labor Arbiter denounced the way
respondents dealt with Atty. Delicana during their discussions for a
possible settlement since respondents themselves later on informed the
said tribunal that at the time of the said discussions, they no longer
considered Atty. Delicana as their counsel. Despite this, the Labor Arbiter
still required the parties to submit their respective position papers. And as
respondents’ position paper was filed late and no evidence was attached
to prove the allegations therein, the Labor Arbiter resolved to dismiss the
complaints.
NLRC overruled the Decision of the Labor Arbiter and held that
the burden of proof lies on herein petitioners as Reyes admitted being
the employer of Tolores. Hence, petitioners not Tolores, had the duty to
advance proof. With respect to Arnaiz and Napal, the NLRC noted that
since their alleged employer was not impleaded, said respondents’ cases
should be remanded to the Labor Arbiter, and tried as new and separate
cases.
NLRC (MR) found merit in respondents’ Motion for
Reconsideration. The NLRC ruled that respondents’ demotion in rank
from chief bakers to utility/security personnel is tantamount to
constructive dismissal which entitles them to the reliefs available to
illegally dismissed employees. NLRC ratiocinated that the employer
bears the burden of proving that the employees received their wages and
benefits. In this case, however, no proof of such payment was presented
by the petitioners.
NLRC (MR NANAMAN), in its Resolution dated December 18,
2003, again reconsidered its own ruling and held that respondents were
not dismissed, either actually or constructively, but instead willfully
disobeyed the return to work order of their employer. The NLRC upheld
petitioners’ prerogative to transfer respondents if only to serve the
greater interest, safety and well-being of the buying public by forestalling
irregular acts of said employees. The NLRC then put the blame on
respondents for disobeying the lawful orders of their employer, noting
that it was the same attitude displayed by them in their dealings with their
counsel, Atty. Delicana, in the proceedings before the Labor Arbiter.
CA ruled that respondents were constructively dismissed
since their designation from chief bakers to utility/security
personnel is undoubtedly a demotion in rank which involved “a
drastic change in the nature of work resulting to a demeaning and
humiliating work condition.” Further, respondents could not be held
guilty of abandonment of work as this was negated by their immediate
filing of complaints to specifically ask for reinstatement.
ISSUE:
WAS THE TRANSFER/REASSIGNMENT OF RESPONDENTS
TO ANOTHER POSITION WITHOUT DIMINUTION IN PAY AND
OTHER PRIVILEGES TANTAMOUNT TO CONSTRUCTIVE
DISMISSAL?
HELD:
The Court of Appeals is correct in reviewing the findings of the
National Labor Relations Commission. ( reinstatement without loss of
seniority rights, full backwages, inclusive of allowances, and other
benefits or their monetary equivalent, computed from the time their
compensation was withheld up to the time of their actual reinstatement,
should be granted)
The transfer/reassignment of respondents constitutes constructive
dismissal.
We have held that management is free to regulate, according
to its own discretion and judgment, all aspects of employment, including
hiring, work assignments, working methods, time, place and manner of
work, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay off of workers
and discipline, dismissal and recall of workers. The exercise of
management prerogative, however, is not absolute as it must be
exercised in good faith and with due regard to the rights of labor.
In constructive dismissal cases, the employer has the
burden of proving that the transfer of an employee is for just or
valid ground, such as genuine business necessity. The employer
must demonstrate that the transfer is not unreasonable,
inconvenient, or prejudicial to the employee and that the transfer
does not involve a demotion in rank or a diminution in salary and
other benefits. “If the employer fails to overcome this burden of
proof, the employee’s transfer is tantamount to unlawful
constructive dismissal.”
In this case, petitioners insist that the transfer of respondents
was a measure of self-preservation and was prompted by a desire to
protect the health of the buying public, claiming that respondents should
be transferred to a position where they could not sabotage the business
pending resolution of their cases. According to petitioners, the possibility
that respondents might introduce harmful substances to the bread while
in the performance of their duties as chief bakers is not imaginary but
real as borne out by what Tolores did in one of the bakeshops in Culasi,
Antique where he was assigned as baker.
This postulation is not well-taken. On the contrary, petitioners
failed to satisfy the burden of proving that the transfer was based on just
or valid ground. Petitioners’ bare assertions of imminent threat from the
respondents are mere accusations which are not substantiated by any
proof. This Court is proscribed from making conclusions based on mere
presumptions or suppositions. An employee’s fate cannot be justly
hinged upon conjectures and surmises.
The act attributed against Tolores does not even convince us
as he was merely a suspected culprit in the alleged sabotage for which
no investigation took place to establish his guilt or culpability. Besides,
Reyes still retained Tolores as an employee and chief baker when he
could have dismissed him for cause if the allegations were indeed found
true. In view of these, this Court finds no compelling reason to justify
the transfer of respondents from chief bakers to utility/security
personnel. What appears to this Court is that respondents’ transfer
was an act of retaliation on the part of petitioners due to the
former’s filing of complaints against them, and thus, was clearly
made in bad faith. In fact, petitioner Reyes even admitted that he caused
the reassignments due to the pending complaints filed against him.
“[D]emotion involves a situation in which an employee is
relegated to a subordinate or less important position constituting a
reduction to a lower grade or rank, with a corresponding decrease in
duties and responsibilities, and usually accompanied by a decrease in
salary.“
Although there was no diminution in pay, there was
undoubtedly a demotion in titular rank. One cannot deny the disparity
between the duties and functions of a chief baker to that of a
utility/security personnel tasked to clean and manage the orderliness of
the outside premises of the bakeshop. Respondents were even
prohibited from entering the bakeshop. The change in the nature of their
work undeniably resulted to a demeaning and humiliating work condition.
Respondents cannot be faulted for refusing to report for work
as they were compelled to quit their job due to a demotion without any
just cause. Moreover, we have consistently held that a charge of
abandonment is inconsistent with the filing of a complaint for constructive
dismissal. Respondents’ demand to maintain their positions as chief
bakers by filing a case and asking for the relief of reinstatement belies
abandonment.
169 MA. MELISSA A. GALANG, Petitioner, v. JULIA MALASUGUI,
Respondent.
FACTS:
Malasugui filed a complaint for illegal dismissal before the
National Labor Relations Commission against Galang. Malasugui alleged
that she was hired by Galang to take care, oversee and man the
premises of the Davao Royal Garden Compound (Pangi Property) the
main compound of Galang where the orchids and other ornamental
plants used for the business were nursed and propagated. In November
1998, she became sick with severe cough and asked for financial
assistance from Galang for medical check-up. The coughing became
incessant which prompted Galang to bring her to a doctor and made to
undergo a series of examinations including chest radiographic
examination. Thereafter, she was terminated from work and barred from
entering the Pangi property.
Galang, on the other hand, denied that Malasugui was her
employee. When the family driver left the other bunkhouse, Malasugui
occupied it and brought along her family as well. The Galang family
tolerated this arrangement for around six years as an act of kindness.
During these times, Malasugui did not look for any job as initially
intended. They did not require Malasugui to pay for rentals, electricity,
water and other utilities. In return, Malasugui helped in weeding,
watering, spraying chemicals on the orchids in gratitude for the hospitality
of the Galang family. Admittedly, Galang occasionally gave money to
Malasugui out of charity. She even answered for the medical expenses of
Malasugui when the latter became sick of excessive coughing early in
1999. She even made an arrangement with a radiologist for her
diagnostic examination but Malasugui did not show up at the appointed
time. When confronted by Galang about this, Malasugui packed her
belongings and left the Pangi property. She was not asked nor forced to
leave the premises by any member of the Galang family.
The Labor Arbiter ruled that there was an employer-employee
relationship between Galang and Malasugui, however, it ruled that there
was no substantial evidence that Malasugui was illegally dismissed and
barred from entering the property after she, without any notice to her
employer, packed her belongings and left the Pangi property. The NLRC
affirmed the decision of the Labor Arbiter. The CA however ruled that
respondent was illegally dismissed by Galang.
ISSUES:
1. Whether or not Malasugui is an employee of Galang.
2. Whether or not Malasugui was constructively dismissed.
HELD:
Court of Appeals decision is affirmed.
LABOR LAW
All three, Labor Arbiter, the NLRC and the CA ruled that there
was an employer-employee relationship between Galang and Malasugui,
therefore, there is no need to routinely undertake the re-examination of
the evidence presented by the contending parties for the factual findings
of the labor officials who have acquired expertise in their own fields are
accorded respect and even finality if affirmed on appeal to the Court of
Appeals.
Such principle cannot, however, apply to the finding of illegal
dismissal against Galang. The Labor Arbiter and the NLRC both ruled
that there was no illegal dismissal, but the Court of Appeals reversed
such findings. When supported by substantial evidence, the findings of
fact of the CA are conclusive and binding on the parties and are not
reviewable by this Court, unless the case falls under any of the following
recognized exceptions:
(1) When the conclusion is a finding grounded entirely on
speculation, surmises and conjectures;
(2) When the inference made is manifestly mistaken, absurd or
impossible;
(3) Where there is a grave abuse of discretion;
(4) When the judgment is based on a misapprehension of facts;
(5) When the findings of fact are conflicting;
(6) When the Court of Appeals, in making its findings, went
beyond the issues of the case and the same is contrary to the
admissions of both appellant and appellee;
(7) When the findings are contrary to those of the trial court [in
this case the administrative bodies of Labor Arbiter and NLRC];
(8) When the findings of fact are conclusions without citation of
specific evidence on which they are based;
(9) When the facts set forth in the petition as well as in the
petitioners' main and reply briefs are not disputed by the respondents;
and
(10) When the findings of fact of the Court of Appeals are
premised on the supposed absence of evidence and contradicted by the
evidence on record.
Jurisprudence provides that the burden of proof to show that
the dismissal was for a just cause is on the employer.
Respondent has been in the employ of petitioner for six years
when the alleged abandonment happened. Being scolded, if it were true,
is hardly a reason for a gardener of six years to just pack up and leave
the work premises where she was even allowed to reside, at a time when
she was ill and needed medical attention. Indeed, the alleged scolding is
itself incredible. The given reason was that respondent failed to show up
at her arranged appointment with the radiologist. It is hard to believe that
a sick gardener, certainly of minimal means, would refuse the offer of
medical services. In fact, the basic allegation in respondents complaint
for illegal dismissal was that petitioners treatment to her became sour
especially when she requested that she be examined by a doctor for her
cough. And, completely belying the petitioners assertion that respondent
failed to show up at the appointed time with the radiologist are two
certificates issued by Radiologist Susan R. Gaspar stating that on 30
January 1999 and on 1 February 1999 respondent had her chest x-ray
taken at the Radiology Section of the Polyclinic Davao.
The overt act relied upon by petitioner is not only a doubtful
occurrence but is, if it did transpire, even consistent with the dismissal
from employment posited by the respondent. The factual appraisal of the
Court of Appeals is correct. Petitioner was displeased after incurring
expenses for respondents medical check-up and, it is credible that,
thereafter, respondent was prevented entry into the work premises. This
is tantamount to constructive dismissal.
Constructive dismissal exists where there is cessation of work
because continued employment is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank and a diminution in pay.
Constructive dismissal is a dismissal in disguise or an act amounting to
dismissal but made to appear as if it were not.
DENIED
170 MISAMIS ORIENTAL II ELECTRIC SERVICE COOPERATIVE
(MORESCO II) VS VIRGILIO CAGALAWAN
Facts
- MORESCO II, a rural electric cooperative, hired Cagalawan
as a Disconnection Lineman on a probationary basis. On March 1, 1994
Cagalawan was appointed to the same post this time on a permanent
basis.
- July 17, 2001, he was designated as Acting Head of the
disconnection crew in one of the sub-offi in Misamis Oriental. In a
Memorandum, MORESCO II General Manager Ke-e transferred
Cagalawan to another area as a member of the disconnection crew.
- In a letter dated May 15, 2002, cagalawan assailed his
transfer claiming he was effctively demoted to his position as head of the
disconnection crew to a mere member. He also averted that such
transfer was inconvenient and prejudicial to him.
- In a memorandum dated May 16, 2002 the Ke-e explained
that said transfer was not a demotion since he was holding the position
only by mere designation and not appointment. Meanwhile and in view of
Cagalawan’s transfer, Ke-e issued an order recalling the former’s
previous designation as Acting Head of the disconnection crew of the
Balingasag sub-office.
- Cagalawan eventually stopped reporting for work. On July 1,
2002, he filed a complaint for constructive dismissal before the Arbitration
branch of the NLRC against MORESCO II and its officers, Ke-e and
Danilo Subrado, in their capacities as General Manager and Board
Chairman, respectively.
- In reply, Cagalawan claimed that was transferred because he
executed an Affidavit in support of his co-employee Jessie Rances, who
fied an illegal dismissal case against MORESCO II.
Issues
MORESCO II thus fied this petition raising the following issues:
(1)Was the respondent constructively dismissed by the
petitioner?
(2) Did the Court of Appeals err in reversing the NLRC?
Ruling
The petition has no merit MORESCO II’s belated submission of
evidence cannot be permitted.
Labor tribunals, such as the NLRC, are not precluded from
receiving evidence submitted on appeal as technical rules are not binding
in cases submitted before them. However, any delay in the submission of
evidence should be adequately explained and should adequately prove
the allegations sought to be proven. In the present case, MORESCO II
did not cite any reason why it had failed to file its position paper or
present its cause before the Labor Arbiter despite sufficient notice and
time given to do so. Only after an adverse decision was rendered did it
present its defense and rebut the evidence of Cagalawan by alleging that
his transfer was made in response to the letter-request of the area
manager of the Gingoog sub-officer asking for additional personnel to
meet its collection quota. To our mind, however, the belated submission
of the said letter- request without any valid explanation casts doubt on
its credibility, especially so when the same is not a newly discovered
evidence. For one, the letter-request was dated May 8, 2002 or a day
before the memorandum for Cagalawan’s transfer was issued.
MORESCO II could have easily presented the letter in the
proceedings before the Labor Arbiter for serious examination. Why it was
not presented at the earliest opportunity is a serious question which
lends credence to Cagalawan’s theory that it may have just
been fabricated for the purpose of appeal.
It should also be recalled that after Cagalawan received the
memorandum for his transfer to the Gingoog sub-officer, he immediately
questioned the basis thereof through a letter addressed to Ke-e. If at that
time there was already a letter- request from the Gingoog area manager,
Ke-e could have easily referred to o specifid this in his subsequent
memorandum of May 16, 2002 which served as his response to
Cagalawan’s queries about the transfer. However, the said memorandum
was silent in this respect.
Nevertheless, Cagalawan, for his part, faithfully complied with
the transfer order but with the reservation to contest its validity precisely
because he was not adequately informed of its real basis.
The rule is that it is within the ambit of the employer’s
prerogative to transfer an employee for valid reasons and according to
the requirement of its business, provided that the transfer does not result
in demotion in rank or diminution of salary, benefits and other
privileges.45 This Court has always considered the management’s
prerogative to transfer its employees in pursuit of its legitimate interests.
But this prerogative should be exercised without grave abuse of
discretion and with due regard to the basic elements of justice and fair
play, such that if there is a showing that the transfer was unnecessary or
inconvenient and prejudicial to the employee, it cannot be upheld.46
Here, while we find that the transfer of Cagalawan neither entails any
demotion in rank since he did not have tenurial security over
the position of head of the disconnection crew, nor result to diminution in
pay as this was not sufficiently proven by him, MORESCO II’s evidence
is nevertheless not enough to show that said transfer was required by the
exigency of the electric cooperative’s business interest. Simply stated,
the evidence sought to be admitted by MORESCO II is not substantial to
prove that there was a genuine business urgency that necessitated the
transfer.
xxx xxx Clearly, not only was the delay in the submission of
MORESCO II’s evidence not explained, there was also failure on its part
to sufficiently support its allegation that the transfer of Cagalawan was for
a legitimate purpose. This being the case, MORESCO II’s plea that its
evidence be admitted in the interest of justice does not deserve any
merit. xxx xxx
WHEREFORE, the petition is DENIED. The Decision dated
July 26, 2005 or the Court of Appeals in CA-G.R. SP No. 84991 and its
Resolution dated September 6, 2006, are AFFIRMED.
SO ORDERED.
J. DISMISSAL BASED ON FALSE OR NON-EXISTENT CAUSE
171 STANDARD ELECTRIC MANUFACTURING CORPORATION vs
STANDARD ELECTRIC
EMPLOYEES UNION-NAFLU-KMU and ROGELIO JAVIER,
FACTS:
Rogelio Javier was employed by the Standard Electric
Manufacturing Corporation (SEMC) as radial spot machine operator in its
Production Department. Javier was a member of the Standard Electric
Employees Union-NAFLU (Union). Javier failed to report for work and
failed to notify the SEMC of the reason for his absences. He was
arrested and detained for the charge of rape. Later, the SEMC
received a letter from Javier, through counsel, informing the SEMC that
Javier was detained for the charge of rape and for that reason failed to
report for work. He requested the SEMC to defer the implementation of
its intention to dismiss him. The SEMC denied Javiers request and
issued a Memorandum terminating his employment for (a) having been
absent without leave (AWOL) for more than fifteen days; and (b) for
committing rape. Javier was release from jail and shortly thereafter
reported for work, but the SEMC refused to accept him back.
Javier filed a Complaint for illegal dismissal and averred that
since the reason for his detention for rape was non-existent, the
termination of his employment was illegal. The SEMC averred that
Javiers prolonged absences caused irreparable damages to its orderly
operation; he had to be replaced so that the continuity and flow of
production would not be jeopardized. It could not afford to wait for Javiers
indefinite return from detention, if at all. The SEMC insisted that
conformably with its Rules and Regulations, it was justified in dismissing
Javier for being absent without leave for fifteen days or so.
ISSUE:
WON Javier dismissal was valid.
HELD:
NO. Respondent Javier was dismissed by the petitioner
effective February 5, 1996 for (a) being AWOL from July 31, 1995 up to
January 30, 1996; and (b) committing rape. However, on demurrer to
evidence, respondent Javier was acquitted of the charge. With
respondent Javiers acquittal, the cause of his dismissal from his
employment turned out to be non-existent.
Respondent Javiers absence from August 9, 1995 cannot be deemed as
an abandonment of his work.
Abandonment is a matter of intention and cannot lightly be
inferred or legally presumed from certain equivocal acts. To constitute as
such, two requisites must concur: first, the employee must have failed to
report for work or must have been absent without valid or 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 some overt acts, with the second element being the more
determinative factor. Abandonment as a just ground for dismissal
requires clear, willful, deliberate, and unjustified refusa l of the employee
to resume his employment.
Mere absence or failure to report for work, even after notice to
return, is not tantamount to abandonment.
The petitioner acted with precipitate haste in terminating
respondent Javiers 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 pre-empted the
ruling of the RTC. The petitioner had, in effect, adjudged respondent
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.
Moreover, the petitioner did not accord respondent Javier an
opportunity to explain his absences. It bears stressing that for a dismissal
to be validly effected, the twin requirements of due process notice and
hearing must be observed. In dismissing an employee, an employer has
the burden of proving that the former worker has been served two
notices: (1) one to apprise him of the particular acts or omissions for
which his dismissal is sought; and (2) the other to inform him of his
employers decision to dismiss him. As to the requirement of a hearing,
the essence of due process lies in an opportunity to be heard, and not
always and indispensably in an actual hearing.
But Javier is not entitled to any salary during the period of his
detention. His entitlement to full backwages commenced from the
time the petitioner refused his reinstatement. In the instant case,
when respondent Javier was freed by virtue of the judgment of acquittal,
heimmediately proceeded to the petitioner but was not accepted back to
work; hence, the reckoning point for the grant of backwages started
therefrom.
K. PREVENTIVE SUSPENSION
172 RUFINA SORIANO vs NLRC & KINGLY COMMODITIES
TRADERS AND MULTI-RESOURCES, INC.
FACTS:
Rufina Soriano worked as Investment Counselor in 1977 and
eventually became the Vice-President, Marketing of Kingly Commodities
Traders and Multi-Resources, Inc. On 1984, she was charged with
allowing or failing to supervise and monitor certain activities of
investment counsellors in her department (which includes the signing of a
contract opening an account for client, transfer of funds and so on,
without the knowledge and authority of the client of the said Corporation)
which results in loss of confidence in her. Soriano was preventively
suspended and was required to explain her acts of failure to act. She
submitted her detailed answer in her explanation. Thereafter, unsatisfied
with the explanation of Soriano, the Executive VP and General Manager
of Kingly notified Soriano that the Corporation has lost confidence in her
ability to discharge the functions of her office, thus terminated her
services.
Soriano filed a complaint for illegal suspension and dismissal
against Kingly. That, Kingly acted in bad faith in suspending and
termination her services and that kingly violated her right to due process
by suspending her immediately without the benefit of hearing and argues
that the notice of preventive suspension was the living proof that the
corporation had already concluded she was guilty of the charges levelled
against her even before she could submit her written explanation.
ISSUE:
Whether or not Rufina Soriano was illegally suspended.
HELD:
No. Preventive suspension does not in itself prove that the
company had prejudged that Soriano was guilty of the charges she was
asked to answer and explain.
Preventive suspension may be necessary for the protection of
the company, its operation and assets, pending investigation of the
alleged malfeasance or misfeasance on the part of officers or employees
of the company and pending a decision on the part of the company.
Hence, considering the very senior and sensitive character of
petitioner’s position as head of a Department, a line position and
considering the unauthorized transactions then just discovered by the
Kingly, the Court belie that the preventive suspension was an arbitrary
and capricious act amounting to bad faith on the part of Kingly.
173 Manila Pavilion Hotel vs. Delada, G.R. No. 189947, January 25,
2012
Facts:
Delada was the Union President of the Manila Pavilion
Supervisors Association at MPH. He was originally assigned as Head
Waiter of Rotisserie, a fine-dining restaurant operated by petitioner.
Pursuant to a supervisory personnel reorganization program, MPH
reassigned him as Head Waiter of Seasons Coffee Shop, another
restaurant operated by petitioner at the same hotel. Respondent declined
the inter-outlet transfer and instead asked for a grievance meeting on the
matter, pursuant to their Collective Bargaining Agreement (CBA). He also
requested his retention as Head Waiter of Rotisserie while the grievance
procedure was ongoing. MPH replied and told respondent to report to his
new assignment for the time being, without prejudice to the resolution of
the grievance involving the transfer. He adamantly refused to assume his
new post at the Seasons Coffee Shop and instead continued to report to
his previous assignment at Rotisserie. Thus, MPH sent him several
memoranda on various dates, requiring him to explain in writing why he
should not be penalized for the following offenses: serious misconduct;
willful disobedience of the lawful orders of the employer; gross
insubordination; gross and habitual neglect of duties; and willful breach of
trust. Despite the notices from MPH, Delada persistently rebuffed orders
for him to report to his new assignment. According to him, since the
grievance machinery under their CBA had already been initiated, his
transfer must be held in abeyance. Thus, on 9 May 2007, MPH initiated
administrative proceedings against him.
Issue:
Whether MPH retained the authority to continue with the
administrative case against Delada for insubordination and willful
disobedience of the transfer order.
Rulings:
Accordingly, we rule in this case that MPH did not lose its
authority to discipline respondent for his continued refusal to report to his
new assignment. In relation to this point, we recall our Decision in Allied
Banking Corporation v. Court of Appeals. In Allied Banking Corporation,
employer Allied Bank reassigned respondent Galanida from its Cebu City
branch to its Bacolod and Tagbilaran branches. He refused to follow the
transfer order and instead filed a Complaint before the Labor Arbiter for
constructive dismissal. While the case was pending, Allied Bank insisted
that he report to his new assignment. When he continued to refuse, it
directed him to explain in writing why no disciplinary action should be
meted out to him. Due to his continued refusal to report to his new
assignment, Allied Bank eventually terminated his services. When the
issue of whether he could validly refuse to obey the transfer orders was
brought before this Court, we ruled thus: The refusal to obey a valid
transfer order constitutes willful disobedience of a lawful order of an
employer. Employees may object to, negotiate and seek redress against
employers for rules or orders that they regard as unjust or illegal.
However, until and unless these rules or orders are declared illegal or
improper by competent authority, the employees ignore or disobey them
at their peril. For Galanida’s continued refusal to obey Allied Bank's
transfer orders, we hold that the bank dismissed Galanida for just cause
in accordance with Article 282(a) of the Labor Code.
Galanida is thus not entitled to reinstatement or to separation
pay. (Emphasis supplied, citations omitted).
It is important to note what the PVA said on Delada’s defiance
of the transfer order:
In fact, Delada cannot hide under the legal cloak of the grievance
machinery of the CBA or the voluntary arbitration proceedings to disobey
a valid order of transfer from the management of the hotel. While it is true
that Delada’s transfer to Seasons is the subject of the grievance
machinery in accordance with the provisions of their CBA, Delada is
expected to comply first with the said lawful directive while awaiting th
results of the decision in the grievance proceedings. This issue falls
squarely in the case of Allied Banking Corporation vs. Court of Appeals x
x x.
Pursuant to Allied Banking, unless the order of MPH is
rendered invalid, there is a presumption of the validity of that order.
Since the PVA eventually ruled that the transfer order was a valid
exercise of management prerogative, we hereby reverse the Decision
and the Resolution of the CA affirming the Decision of the PVA in this
respect. MPH had the authority to continue with the administrative
proceedings for insubordination and willful disobedience against Delada
and to impose on him the penalty of suspension. As a consequence,
petitioner is not liable to pay back wages and other benefits for the period
corresponding to the penalty of 90-day suspension.
PREVENTIVE SUSPENSION:
Preventive suspension is a disciplinary measure resorted to by the
employer pending investigation of an alleged malfeasance or
misfeasance committed by an employee. The employer temporarily bars
the employee from working if his continued employment poses a serious
and imminent threat to the life or property of the employer or of his co-
workers.
On the other hand, the penalty of suspension refers to the disciplinary
action imposed on the employee after an official investigation or
administrative hearing is conducted.9 The employer exercises its right to
discipline erring employees pursuant to company rules and regulations.