By: Climaco R.

Ramirez III LLB 2

*Termination of Employment

Commission of crime or offese by the employee against the person of his

employer of immediately member of his family of duly authorized
representative.

Mercury Drug Coproration vs. NLRC (G.R. No. 75662)

Facts: Cesar Ladisla was employed by petitioner, Mercury Drug Corporation as Stock Analyst.
He was apprehended by representatives of Mercury Drug Corporation while in the act of theft of
companys property. He admitted the guilt to the investigating representatives. Mercury drug
filed an application for the termination of Ladislas employment.

Private respondent opposed the aforesaid application for clearanceto terminate his services
alleging among others, that his suspension and proposed dismissal were unfounded and baseless
being premised on the machinations and incriminatory acts of the Manager and Retail
Supervisor, and that he was not given the opportunity to be heard nor allowed to explain his side
before he was summarily suspended.

However, NLRC ruled that Ladisla should be reinstated in his former position with full back
wages.

Issue: Whether or not Cesar Ladisla should be dismissed on the grounds

of dishonesty and breach of contract

Held: Dismissal of a dishonest employee is to the best interest not only of 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 in
employment an employee guilty of acts inimical to its interest, justifying loss of confidence in
him. The law does not impose unjust situations on either labor or management.

While the constitution is committed to the policy of social justice and the protection of laborers,
it should not be supposed that labor dispute will be automatically decided in favor of labor.
Management has also its own rights which are the enforcement of interest of simple fair play.

Reno Foods Inc. vs. NLM-Katipuan et. al.

G.R. No. 164016, March 15, 2010

Facts: Petitioner Corporation terminated Nenita Capor after she was caught sneaking out cans of
RENO products during a standard operating procedure of searching the belongings of employees
upon leaving company premises conducted by the guards. Capor alleged that the goods in her
bag were not pilfered and that it may have just been planted by the company to avoid paying
separation pay as she was already about to retire. RENO filed a case of qualified theft against
Capor. While NLM-Katipunan filed in behalf of Capor, a case of illegal dismissal and money
claims against RENO before the Head Arbitration Office of the NLRC, praying that Capor be
awarded backwages and moral and exemplary damages. The Labor Arbiter found Capor guilty of
grave misconduct which was just cause for termination. On appeal, the NLRC modified the
ruling by awarding separation pay to Capor as financial assistance. Petitioner appealed before the
CA, which affirmed the ruling of NLRC. Meanwhile, Capor was acquitted of qualified theft
charges.

Issue: WON the employee was validly dismissed

Ruling: Yes. The employee was dismissed for just cause, such as serious misconduct.

Furthermore 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.

Finally an employees acquittal in a criminal case, especially one that is grounded on the
existence of reasonable doubt, will not preclude a determination in a labor case that he is guilty
of acts inimical to the employers interests. Criminal cases require proof beyond reasonable
doubt while labor disputes require only substantial evidence. Since the Labor tribunals found
substantial evidence to conclude that Capor had been validly dismissed for dishonesty or serious
misconduct there is no compelling reason to doubt the common findings of these reviewing
bodies.

Heavylift Manila, Inc. v. CA

FACTS:

Petitioner, a maritime agency, thru a letter signed bypetitioner Josephine Evangelio,

Administrative and Finance Manager of Heavylift, informed respondent Ma. Dottie
Galay, Heavylift Insurance and Provisions Assistant, of her low performance rating and that
there are negative feedback from her team members regarding her work attitude. The letter also
notified her that she was being relieved of her other functions. Thereafter, she filed with the
Labor Arbiter a complaint for illegal dismissal. Petitioner alleged that Galay had an attitude
problem and did not get along with her co-employees for which she was constantly warned to
improve. They aver that Galays attitude resulted to the decline in the companys efficiency and
productivity. Petitioners presented a letter and a notice of termination.

The Labor Arbiter found that Galay was illegally terminated for petitioners failure to prove
that she violated any company regulation, and for failure to give the proper notice as required by
law.
NLRC denied the appeal for lack of merit and affirmed the decision of the Labor Arbiter.
Court of Appeals denied the motion for lack of justifying circumstances.

ISSUE:
Whether or not there was just cause in the termination of Galay?
HELD/ Ratio:

An employee who cannot get along with his co-employees is detrimental to the company for he
can upset and strain the working environment. Without the necessary teamwork and synergy,
the organization cannot function well. Thus, management has the prerogative to take the
necessary action to correct the situation and protect its organization. Thus, an employees
attitude problem is a valid ground for his termination. It is a situation analogous to loss of trust
and confidence that must be duly proved by the employer. Similarly, compliance with the twin
requirement of notice and hearing must also be proven by the employer. However in this case the
procedural due process was not satisfied by the employer. Thus, Galay was illegally dismissed.

Moreover the mere mention of negative feedback from her team members, and the letter are not
proof of her attitude problem.

The law requires the employer to give the worker to bedismissed two written notices before
terminating his employment, namely, (1) anotice which apprises the employee of the particular
acts or omissions for which hisdismissal is sought; and (2) the subsequent notice which informs
the employee of the employers decision to dismiss him.

Additionally, the letter never gave respondent Galay an opportunity to explain herself, hence
denying her due process. In sum, we find that Galay was illegally dismissed, because petitioners failed to
show adequately that a valid cause for terminating respondent exists, and because petitioners
failed to comply with the twin requirement of notice and hearing.

Herminigildo Inguillo and Zenaida Bergante vs. First Philippine Scales,

Inc. (FPSI) and/or Amparo Policarpio, manager
G.R. No. 165407 (June 5, 2009)
FACTS: FPSI and First Philippine Scales Industries Labor Union (FPSILU) entered into a
Collective Bargaining Agreement (CBA) for a period of five (5) years in a document
entitled RATIPIKASYON NG KASUNDUAN. Bergante and Inguillo, who were members of
FPSILU, signed the said document.

Bergante, Inguillo and several FPSI employees joined another union, the Nagkakaisang Lakas ng
Manggagawa (NLM). [The latter] filed with the Department of Labor and Employment (DOLE)
an intra-union dispute against FPSILU and FPSI. Meanwhile, the executive board and members
of the FPSILU addressed Petisyon to FPSI's general manager, Amparo Policarpio (Policarpio),
seeking the termination of the services of [several employees, including herein petitioners. This
was granted upon by FPSI, which terminated, among others, herein petitioners.]

In their Petition, Bergante and Inguillo assail the legality of their termination based on the Union
Security Clause in the CBA between FPSI and FPSILU.

ISSUES:
(1) Was there a valid ground for termination?
(2) Was there compliance with the procedural due process to the termination?

RULLING: SC
(1) Yes. The Labor Code of the Philippines has several provisions under which an employee may
be validly terminated, namely: (1) just causes under Article 282; (2) authorized causes under
Article 283; (3) termination due to disease under Article 284; and (4) termination by the
employee or resignation under Article 285. While the said provisions did not mention as ground
the enforcement of the Union Security Clause in the CBA, the dismissal from employment based
on the same is recognized and accepted in our jurisdiction.

In terminating the employment of an employee by enforcing the Union Security Clause, the
employer needs only to determine and prove that: (1) the union security clause is applicable; (2)
the union is requesting for the enforcement of the union security provision in the CBA; and (3)
there is sufficient evidence to support the union's decision to expel the employee from the union
or company. All the requisites have been sufficiently met and FPSI was justified in enforcing the
Union Security Clause.

(2) No. Nonetheless, while we uphold dismissal pursuant to a union security clause, the same is
not without a condition or restriction. The enforcement of union security clauses is authorized by
law, provided such enforcement is not characterized by arbitrariness, and always with due
process. There are two (2) aspects which characterize the concept of due process under the Labor
Code: one is substantivewhether the termination of employment was based on the provisions
of the Labor Code or in accordance with the prevailing jurisprudence; the other is procedural -
the manner in which the dismissal was effected.

In the present case, the required two notices that must be given to herein petitioners Bergante and
Inguillo were lacking. Respondents, however, aver that they had furnished the employees
concerned, including petitioners, with a copy of FPSILU's Petisyon. While the Petisyon
enumerated the several grounds that would justify the termination of the employees mentioned
therein, yet such document is only a recommendation by the Union upon which the employer
may base its decision. It cannot be considered a notice of termination. A perusal of each of [the
grounds stated therein] leads Us to conclude that what was stated were general descriptions,
which in no way would enable the employees to intelligently prepare their explanation and
defenses.

Validly dismissed on the grounds of the validity of the union security clause but there was no
due process.

PICOP Resources Inc vs Taneca

GR 160828

Facts:

Respondents were regular rank-and-file employees of PRI and bona fide members
of Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of Labor
(NAMAPRI-SPFL), which is the collective bargaining agent for the rank-and-file
employees of petitioner PRI. PRI has a CBA with NAMAPRI-SPFL. The CBA
contained the following union security provisions:

Article II- Union Security and Check-Off

Section 6. Maintenance of membership.

6.1 All employees within the appropriate bargaining unit who are members of the
UNION at the time of the signing of this AGREEMENT shall, as a condition of
continued employment by the COMPANY, maintain their membership in the
UNION in good standing during the effectivity of this AGREEMENT.

6.3 The COMPANY, upon the written request of the UNION and after compliance
with the requirements of the New Labor Code, shall give notice of termination of
services of any employee who shall fail to fulfill the condition provided in Section
6.1 and 6.2 of this Article

Atty. Fuentes sent a letter to the management of PRI demanding the termination of
employees who allegedly campaigned for, supported and signed the Petition for
Certification Election of the Federation of Free Workers Union (FFW) during the
effectivity of the CBA. NAMAPRI-SPFL considered said act of campaigning for and
signing the petition for certification election of FFW as an act of disloyalty and a valid
basis for termination for a cause in accordance with its Constitution and By-Laws, and
the terms and conditions of the CBA, specifically Article II, Sections 6.1 and 6.2 on
Union Security Clause.

On October 16, 2000, PRI served notices of termination for causes to employees
whom NAMAPRIL-SPFL sought to be terminated on the ground of acts of
disloyalty committed against it when respondents allegedly supported and signed the
Petition for Certification Election of FFW before the freedom period during the
effectivity of the CBA. A Notice dated October 21, 2000 was also served on the
DOLE, Caraga Region.

Respondents then accused PRI of ULP.

Issue:

WON respondents were validly terminated.

Held:

Union security is a generic term, which is applied to and comprehends closed

shop, union shop, maintenance of membership, or any other form of agreement
which imposes upon employees the obligation to acquire or retain union membership
as a condition affecting employment. There is union shop when all new regular
employees are required to join the union within a certain period as a condition for
their continued employment. There is maintenance of membership shop when
employees, who are union members as of the effective date of the agreement, or who
thereafter become members, must maintain union membership as a condition for
continued employment until they are promoted or transferred out of the bargaining
unit, or the agreement is terminated. A closed shop may be defined as an enterprise in
which, by agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed departments of
the enterprise unless he or she is, becomes, and, for the duration of the agreement,
remains a member in good standing of a union entirely comprised of or of which the
employees in interest are a part.

However, in terminating the employment of an employee by enforcing the union

security clause, the employer needs to determine and prove that: (1) the union security
clause is applicable; (2) the union is requesting for the enforcement of the union
security provision in the CBA; and (3) there is sufficient evidence to support the
decision of the union to expel the employee from the union. These requisites
constitute just cause for terminating an employee based on the union security
provision of the CBA.

As to the first requisite, there is no question that the CBA between PRI and
respondents included a union security clause. Secondly, it is likewise undisputed that
NAMAPRI-SPFL, in two (2) occasions demanded from PRI, in their letters dated
May 16 and 23, 2000, to terminate the employment of respondents due to their acts of
disloyalty to the Union. However, as to the third requisite, we find that there is no
sufficient evidence to support the decision of PRI to terminate the employment of the
respondents.

The mere signing of the authorization in support of the Petition for Certification
Election of FFW on March 19, 20 and 21, or before the freedom period, is not
sufficient ground to terminate the employment of respondents inasmuch as the
petition itself was actually filed during the freedom period. Nothing in the records
would show that respondents failed to maintain their membership in good standing in
the Union. Respondents did not resign or withdraw their membership from the Union
to which they belong. Respondents continued to pay their union dues and never joined
the FFW.

Petition denied.
Authorized causes for Termination (Arts. 283 & 284, Labor Code as
Amended).
1. Installation of Labor-Saving Devices
2. Redundancy

*Redundancy or Installation of labor saving devices is one of the

authorized causes for termination of employment under Article 283 of
the Labor Code of the Philippines. Redundancy exists where the
services of an employee are in excess of what is reasonably demanded by
the actual requirements of the enterprise.

*For the implementation of a redundancy program to be valid, the employer must comply
with the following requisites: (1) written notice
served on both the employees and the Department of Labor and Employment at least one month
prior to the intended date of retrenchment; (2) payment of separation pay equivalent to at least
one month pay for every year of service, whichever is higher; (3) good faith in abolishing the
redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are to be
declared redundant and accordingly abolished.

G.R. No. 168719

PHILIPPINE CARPET EMPLOYEES ASSOCIATION (PHILCEA) vs. STO. TOMAS,

Facts: The Philippine Carpet Manufacturing Corporation (Corporation for brevity), a

corporation duly registered in the Philippines, is engaged in the business of manufacturing wool
and yarn carpets and rugs. The Corporation employed 473 employees, 355 of whom were
members of the sole bargaining unit of the employees therein, the Philippine Carpet Employees
Association. Upon the expiration of the CBA. The Union Proposed for the amendment of the
existing retirement plan. However the corporation did not respond consequently, the proposed
conference failed to materialize. The corporation issued a Memorandum informing all employees
that a comprehensive cost reduction program would be implemented by the Corporation on April
15, 2004, on account of depressed business conditions brought about by the currency crisis in
Southeast Asia, the Middle East war and the 9/11 incident in the United States of America.
According to the Memorandum, the employees concerned would receive the following benefits:

a) Separation pay
b) Cash equivalent of earned but unused vacation and sick leave credits
c) Pro-rata 13th month pay
The 14 Union members who were retrenched received their separation pay and other benefits
from the Corporation. Frustrated at the Corporations response, the Union filed a notice of strike
with the DOLE. In response, the Corporation stood pat on its stance for a moratorium on
increases in wages and benefits. The Union rejected this and accused the Corporation of union
busting, as 77 of its members were dismissed.

ISSUE: WON the employees were validly terminated due to redundancy.

RULLING:

SOLE: - The Union claimed that there was no valid economic reason to retrench employees, and
that a slump in demand of the Corporations products was not a valid ground to dismiss
employees. The Union insisted that the Corporation was guilty of unfair labor practice.
The SOLE ruled in favor of the Employees and ruled that there is indeed illegal dismissal.

CA: - The appellate court affirmed the finding of the SOLE that there was a slump in the
demand of the Corporations products, holding that while low volume of work was not listed as a
valid ground for dismissal under Articles 282 and 283 of the Labor Code of the Philippines, it
nevertheless justified the dismissal on the ground of redundancy. The appellate court declared
that while the corporation hired employees after the retrenchment, the new workers were hired
for fixed periods only. The Corporation had been hiring workers for fixed periods and on a need
basis even before the retrenchment program was implemented. The CA observed that it even
engaged the services of independent contractors to perform carpet installation work to augment
its personnel complement. Thus, contrary to the position of the Union, the hiring of workers for a
fixed period was not intended to fill up the positions left by the retrenched 77 Union members.
Hence the Corporation validly terminated the employees.

SC: - Respondents failed to adduce clear and convincing evidence to prove the confluence of the
essential requisites for a valid retrenchment of its employees. We believe that respondents acted
in bad faith in terminating the employment of the members of petitioner Union.

That respondents acted in bad faith in retrenching the 77 members of petitioner is buttressed by
the fact that Diaz issued his Memorandum announcing the cost-reduction program on March 9,
2004, after receipt of the February 10, 2004 letter of the Union president which included the
proposal for additional benefits and wage increases to be incorporated in the CBA for the
ensuing year. The corporation is guilty of illegal dismissal. The Decision and Resolution of the
Court of Appeals in CA are REVERSED AND SET ASIDE
Hotel Enterprises of the Philippines, Inc. v. Samahan ng mga
Manggagawa sa Hyatt-NationalUnion of Workers in the Hotel and
Restaurant and Allied Industries
G.R. No. 165756, June 5, 2009

Facts :
The respondent union is a certified collective bargaining agent of the rank-and-file employees of
the Hyatt Regency Manila (HRM), a hotel owned by petitioner (Company). In 2001,
the company suffered a slump due to the local and international economic slowdown aggravated
by the 9/11 incident in the USA. The company decided to cost-cut by implementing among
others reducing work weeks in some hotel departments. In August 2001, the union filed a notice
of strike due to a bargaining deadlock before the Natl Conciliation Mediation Board
(NCMB). In the course of the proceedings, the union accepted the e c o n o m i c
proposal. Hence, a new CBA was signed. Subsequently, the company
d e c i d e d t o implement a downsizing scheme which the union opposed. Despite the
opposition, a list of the
position declared redundant and to be contracted out was given to the union. A notice of
termination was also committed by the company to the DOLE. Thereafter, the company engaged
the services of independent job contractors. The union filed a notice of strike. A
conciliation proceeding was again conducted but to no a v a i l . T h e u n i o n w e n t
on strike. The Secretary certified the labor dispute to the
N L R C f o r compulsory arbitration. The NLRC orders the suspension of the conciliation procee
dings. However,the LA already issued decision declaring the strike legal. On appeal
by the company, the NLRC reversed the LA decision and declared the strike to be
illegal. On petition, the CA reversed the decision of the NLRC and declared the strike
legal. Hence, this petition.

Issue:
Whether the CAs decision declaring the strike legal is accordance with law and established
facts.

Ruling:
A valid and legal strike must be based on strikeable grounds, because if it is
based on anon-strikeable ground, it is generally deemed an illegal
strike. Corollary, a strike grounded on ULP is illegal if no acts constituting ULP
actually exist. As an exception, even if no such acts are committed by the employer, if
the employees believe in good faith that ULP actually exists, then the strike held pursuant to
such belief may be legal. As a general rule, therefore, where a union believes that an employer
committed ULP and the surrounding circumstances warranted such belief in
goodfaith, the resulting strike may be considered legal although, subsequently, such
allegations of unfair labor practices were found to be groundless. Here, the union went on
strike in the honest belief that petitioner was committing ULP after the latter decided to
downsize its workforce contrary to the staffing/manning standards adopted by both parties under
a CBA. Indeed, those circumstances showed
prima facie
that the hotel committed ULP. Thus, even if technically there was no legal ground to stage a
strike based on ULP, since the attendant circumstances support the belief in good faith that
petitioners retrenchment scheme was structured to weaken the bargaining power of the union,
the strike, by exception, may be considered legal.
SAN MIGUEL CORPORATION, Petitioner vs. CAROLINE C. DEL ROSARIO,
Respondent.

G.R. Nos. 168194 & 168603 December 13, 2005

Facts:

On April 17, 2000, respondent was employed by petitioner as key account specialist. Petitioner
informed respondent that her probationary employment will be severed at the close of the
business hours of March 12, 2001. After respondent was refused entry to petitioners premises.

Respondent filed a complaint against petitioner for illegal dismissal and underpayment/non-
payment of monetary benefits. Respondent alleged that petitioner feigned an excess in
manpower because after her dismissal, it hired new recruits and re-employed two of her batch
mates.

On the other hand, petitioner claimed that respondent was a probationary employee whose
services were terminated as a result of the excess manpower that could no longer be
accommodated by the company. Respondent was allegedly employed as a temporary reliever
of Patrick Senen, an account specialist, who met an accident. Anticipating an increase in sales
volume, petitioner hired respondent as an account specialist on a probationary status and was
assigned at petitioners Greater Manila Area-Key Accounts Group (GMA-KAG) Beer Sales Group.
However, petitioners expected business growth did not materialize, hence, it reorganized the
GMA-KAG, and created the Centralized Key Accounts Group. This restructuring led to an initial
excess of 49 regular employees, who were redeployed to other positions, including the one
occupied by respondent.

Decisions:

LA: declared respondent a regular employee because her employment exceeded six months
and holding that she was illegally dismissed, as there was no authorized cause to terminate her
employment. It further ruled that petitioners failure to rebut respondents claim that it hired
additional employees after she was dismissed belie the companys alleged redundancy. It
rendered the dismissal of complainant as illegal and ordering her reinstatement with full
backwages; Holiday Pay, Service Incentive Leave, 13th Month Pay, moral and exemplary
damages.

On appeal by petitioner to the NLRC

NLRC: modified and set aside the decision of LA holding that respondent is a regular employee
whose termination from employment was valid but ineffectual for petitioners failure to comply
with the 30-day notice to the employee and the DOLE.

CA: granted the respondents petition and reinstated with modification the Labor Arbiters
decision finding her to be an illegally dismissed regular employee, but deleted the award for
holiday pay for lack of basis. The CA noted that petitioner gave no satisfactory explanation for
the hiring of employees after respondents termination and the absence of company criteria in
determining who among the employees will be dismissed, the dismissal is illegal and ordering
her reinstatement with full backwages, moral and exemplary damages.

Issues:

whether or not respondent was illegally dismissed;

Ruling:

1. In termination cases, like the present controversy, the burden of proving the circumstances
that would justify the employees dismissal rests with the employer. The best proof that
petitioner should have presented to prove the probationary status of respondent is her
employment contract. None, having been presented, the continuous employment of
respondent as an account specialist for almost 11 months, means that she was a regular
employee and not a temporary reliever or a probationary employee. The 2 Payroll Authorities
offered by petitioner showing that respondent was hired as a replacement, and later, as a
probationary employee do not constitute substantial evidence. As correctly found by the NLRC,
none of these documents bear the conformity of respondent, and are therefore, self-serving.

2. Redundancy, for purposes of the 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. In the case at bar, petitioner presented an affidavit of its Sales
Manager and a memorandum of the company both to the effect that there is a need to
redeploy its regular employees and terminate the employment of temporary employees, in
view of an excess in manpower. These documents, however, do not satisfy the requirement of
substantial evidence that a reasonable mind might accept as adequate to support a conclusion.

In balancing the interest between labor and capital, the prudent recourse in termination cases
is to safeguard the prized security of tenure of employees and to require employers to present
the best evidence obtainable, especially so because in most cases, the documents or proof
needed to resolve the validity of the termination, are in the possession of employers. A
contrary ruling would encourage employers to prevent the regularization of an employee by
simply invoking a feigned or unsubstantiated redundancy program.

Granting that petitioner was able to substantiate the validity of its reorganization or
restructuring, it nevertheless, failed to effect a fair and reasonable criterion in dismissing
respondent. The criteria in implementing a redundancy are: (a) less preferred status, e.g.
temporary employee; (b) efficiency; and (c) seniority.
In dismissing respondent, petitioner averred that in choosing the employee to be retained and
to be placed in the limited available positions, it had to give priority to the regular employees,
over petitioner who is only a probationary employee. What further militated against the alleged
redundancy advanced by petitioner is their failure to refute respondents assertion that after
her dismissal, it hired new recruits and re-employed two of her batch mates. Other than the
lame excuse that it is respondent who has the burden of proving the same, it presented no
proof to fortify its denial.

G.R. No. 163091: October 6, 2010

COCA-COLA BOTTLERS PHILIPPINES, INC., Petitioner, v.

ANGEL U. DEL VILLAR, Respondent.
LEONARDO-DE CASTRO, J.:

FACTS:
In 1992, as part of the reorganization of the Company, Del Villar became the
Transportation Services Manager, under the Business Logistic Directorate, headed
by Director Edgardo I. San Juan (San Juan). As Transportation Services Manager,
Del Villar prepares the budget for the vehicles of the Company nationwide.

While serving as Transportation Services Manager, Del Villar submitted a Report to

the Company President, Natale J. Di Cosmo (Di Cosmo), detailing an alleged
fraudulent scheme undertaken by certain Company officials in conspiracy with local
truck manufacturers, overpricing the trucks purchased by the Company by as much
asP70,000.00 each. In the same Report, Del Villar implicated San Juan and Jose L.
Pineda, Jr. (Pineda), among other Company officials, as part of the conspiracy.

After the Company embarked on a reorganization of the Business Logistic

Directorate, was was then appointed as the Corporate Purchasing and Materials
Control Manager, while Del Villar as Pinedas Staff Assistant.

Seven months after he submitted his report on the fraudulent scheme, Del Villar
received a memorandum from San Juan, informing him of his designation as Staff
Assistant to the Corporate Purchasing and Materials Control Manager. With this new
assignment, Del Villar ceased to be entitled to the benefits accruing to an S-7
position under existing company rules and policies and he was ordered to turn over
the vehicle assigned to him as Transportation Services Manager to Pineda.

Del Villar believed that he was demoted by the Company to force him to resign.
Unable to endure any further the harassment, Del Villar filed with the Arbitration
Branch of the NLRC on November 11, 1996 a complaint against the Company for
illegal demotion and forfeiture of company privileges.

The Company filed a Motion to Dismiss, instead of a position paper, praying for the
dismissal of Del Villars complaint on the ground that Del Villar had no cause of
action.

The Labor Arbiter rendered a Decision in Del Villars favor. The Labor Arbiter held
that the allegations in Del Villars complaint sufficiently presented a cause of action
against the Company. The company appealed to the NLRC. Pending the appeal,
Del Villar received a letter from the company, stating that his services are no longer
needed by the company. Thereafter, the NLRC reversed the ruling of the LA.
Unsatisfied, Del Villar brought his case before the Court of Appealsviaa Petition for
Certiorari.

The appellate court ruled in favor of Del Villar. Petitioner filed a motion for
reconsideration but the same was denied. Hence, this petition.

ISSUE:
Whether or not Del Villar was demoted and the company acted in bad faith
HELD:

LABOR LAW

In the pursuit of its legitimate business interest, management has the prerogative to
transfer or assign employees from one office or area of operation to another
provided there is no demotion in rank or diminution of salary, benefits, and other
privileges; and the action is not motivated by discrimination, made in bad faith, or
effected as a form of punishment or demotion without sufficient cause.

In the case at bar, there is no dispute that Del Villar was transferred by the Company
from the position of Transportation Services Manager to the position of Staff
Assistant to the Corporate Purchasing and Materials Control Manager. The burden
thus falls upon the Company to prove that Del Villars transfer was not tantamount to
constructive dismissal. After a careful scrutiny of the records, we agree with the
Labor Arbiter and the Court of Appeals that the Company failed to discharge this
burden of proof.

The Company and its officials attempt to justify the transfer of Del Villar by alleging
his unsatisfactory performance as Transportation Services Manager. The dismal
performance evaluations of Del Villar were prepared by San Juan and Pineda after
Del Villar already implicated his two superiors in his Report dated January 4, 1996 in
an alleged fraudulent scheme against the Company. More importantly, we give
weight to the following instances establishing that Del Villar was not merely
transferred from the position of Transportation Services Manager to the position of
Staff Assistant to the Corporate Purchasing and Materials Control Manager; he was
evidently demoted.

A transfer is a movement from one position to another which is of equivalent rank,

level or salary, without break in service. Promotion, on the other hand, is the
advancement from one position to another with an increase in duties and
responsibilities as authorized by law, and usually accompanied by an increase in
salary. Conversely, demotion involves a situation where 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.

Del Villars demotion is readily apparent in his new designation. Formerly, he was the
Transportation Services Manager; then he was made a Staff Assistant a subordinate
to another manager, particularly, the Corporate Purchasing and Materials Control
Manager.

The two posts are not of the same weight in terms of duties and responsibilities. Del
Villars position as Transportation Services Manager involved a high degree of
responsibility, he being in charge of preparing the budget for all of the vehicles of the
Company nationwide. As Staff Assistant of the Corporate Purchasing and Materials
Control Manager, Del Villar contended that he was not assigned any meaningful
work at all. The Company utterly failed to rebut Del Villars contention. It did not even
present, at the very least, the job description of such a Staff Assistant.

While Del Villar's transfer did not result in the reduction of his salary, there was a
diminution in his benefits. The Company admits that as Staff Assistant of the
Corporate Purchasing and Materials Control Manager, Del Villar could no longer
enjoy the use of a company car, gasoline allowance, and annual foreign travel,
which Del Villar previously enjoyed as Transportation Services Manager.

It was not bad enough that Del Villar was demoted, but he was even placed by the
Company under the control and supervision of Pineda as the latters Staff Assistant.
To recall, Pineda was one of the Company officials who Del Villar accused of
defrauding the Company in his Report.

LABOR LAW

Redundancy, for purposes of the Labor Code, exists where the services of an
employee are in excess of what is reasonably demanded by the actual requirements
of the enterprise.

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 overmanned. It must
produce adequate proof of such redundancy to justify the dismissal of the affected
employees.

In this case, other than its own bare and self-serving allegation that Del Villars
position as Staff Assistant of Corporate Purchasing and Materials Control Manager
had already become redundant, no other evidence was presented by the Company.
Neither did the Company present proof that it had complied with the procedural
requirement in Article 283 of prior notice to the Department of Labor and
Employment (DOLE) of the termination of Del Villar's employment due to
redundancy one month prior to May 31, 1998.

There being no authorized cause for the termination of Del Villar's employment, then
he was illegally dismissed.

G.R. No. 95940. July 24, 1996

PANTRANCO NORTH EXPRESS vs. NLC

FACTS:

URBANO SUIGA was hired by petitioner as a bus conductor. He continued in

petitioner's employ until August 12, 1989, when he was retired at the age of fifty-two
(52) after having rendered twenty five years' service. The basis of his retirement was the
compulsory retirement provision of the collective bargaining agreement. Then On
February 15, 1990, private respondent filed a complaint[4] for illegal dismissal against
petitioner with the Sub-Regional Arbitration Branch of the respondent Commission in
Dagupan City.

ISSUE: WON the employee was validly terminated base on the CBA

RULLING:

LA: - find the complainant was illegally and unjustly dismissed and it hereby order the
respondent to reinstate him to his former or substantially equivalent positions without
loss of seniority rights with full backwages and other benefits. This was affirmed by
NLRC.

SC: - : Private Respondent's Compulsory Retirement Is Not Illegal Dismissal. Petitioner

contends that the aforequoted provision is valid and in consonance with Article 287 of
the Labor Code. The respondent Commission holds otherwise.
The said Code provides:

"Art. 287. Retirement. -- Any employee may be retired upon reaching the retirement
age established in the Collective Bargaining Agreement or other applicable
employment contract.

In case of retirement, the employee shall be entitled to receive such retirement

benefits as he may have earned under existing laws and any collective bargaining or
other agreement."
The aforequoted provision makes clear the intention and spirit of the law to give
employers and employees a free hand to determine and agree upon the terms and
conditions of retirement. Providing in a CBA for compulsory retirement of employees
after twenty-five (25) years of service is legal and enforceable so long as the parties
agree to be governed by such CBA. The law presumes that employees know what they
want and what is good for them absent any showing that fraud or intimidation was
employed to secure their consent thereto.

*Retrenchment to Prevent losses

G.R. No. 170464

Lambert Pawnbrokers and jewelry corporation vs. Binamira

Facts:
Lambert Pawnbrokers and Jewelry Corporation Tagbilaran Branch hired Helen as an
appraiser and designated her as Vault Custodian. Helen received a letter[5] from Lim
terminating her employment effective that same day. Lim cited business losses
necessitating retrenchment as the reason for the termination. Helen thus filed a case for
illegal dismissal against petitioners docketed as NLRC.

ISSUE: WON HELEN was Illegally dismissed due to retrenchment done by the
employer.

RULLING:

LA: - rendered a Decision which held that Helen was not illegally dismissed but was
validly retrenched.

NLRC: - On appeal, the NLRC reversed and set aside the Decision of the Labor
Arbiter. It observed that for retrenchment to be valid, a written notice shall be given to the
employee and to the Department of Labor and Employment (DOLE) at least one month
prior to the intended date thereof. Since none was given in this case, then the
retrenchment of Helen was not valid.

CA: - On petition for certiorari. The CA found that both the Labor Arbiter and the
NLRC failed to consider substantial evidence showing that the exercise of management
prerogative, in this instance, was done in bad faith and in violation of the employees right
to due process. The CA ruled that there was no redundancy because the position of vault
custodian is a requisite, necessary and desirable position in the pawnshop business. There
was likewise no retrenchment because none of the conditions for retrenchment is present
in this case.

SC: The petition is without merit. The CA correctly reviewed the factual findings of the labor
tribunals.SC affirmed the CA. The lack of the authorized or just cause to terminate ones
employment and the failure to observed due process constitute illegal dismissal. Moreover Helen
was illegally dismissed since the retrenchment alleged by the employer was not proven with
substantial evidence.

FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF

THE PHILIPPINES (FASAP) v. PHILIPPINE AIRLINES,
INC., PATRIA CHIONG and COURT OF APPEALS

October 2, 2009/ G.R. No. 178083

YNARES-SANTIAGO, J.:
ISSUE: Cabin crew personnel were covered by the retrenchment and demotion scheme of PAL
due to financial distress which is evidenced by proof of its claimed losses in a petition for
suspension of payments, as well as the Order of the Securities and Exchange Commission (SEC)
approving the said petition for suspension of payments, together with proof of summary of its
debts and other liabilities.
Exercising its management prerogative and sound business judgment, it decided to cut its fleet of
aircraft in order to minimize its operating losses and rescue itself from total downfall; which
meant that a corresponding company-wide reduction in manpower necessarily had to be
made. As a result, 5,000 PAL employees (including the herein 1,400 cabin attendants) were
retrenched.
PAL, however, gave a whole different reason for retrenchment when the pilots went on strike.
Accordingly, what really brought about the really perilous situation of closure was that on June
5, 1998, the pilots went on strike, ninety (90%) per cent of the pilots went on strike,
approximately six hundred (600). These pilots strike was so devastating x x x. Without any
pilots no plane can fly, your Honor, that is the stark reality of the situation, and without airplanes
flying, there would be no place for employment of cabin attendants.

ISSUE: Whether or not the strike, which PAL used as basis to undertake the massive
retrenchment under scrutiny, is an authorized cause.

RULING: The strike was a temporary occurrence that did not necessitate the immediate and
sweeping retrenchment of 1,400 cabin or flight attendants.
There was no reason to drastically implement a permanent retrenchment scheme in response to a
temporary strike, which could have ended at any time, or remedied promptly, if management
acted with alacrity. Juxtaposed with its failure to implement the required cost-cutting measures,
the retrenchment scheme was a knee-jerk solution to a temporary problem that beset PAL at the
time.
PAL must still prove that it implemented cost-cutting measures to obviate retrenchment, which
under the law should be the last resort. By PALs own admission, however, the cabin
personnel retrenchment scheme was one of the first remedies it resorted to, even before it could
complete the proposed downsizing of its aircraft fleet.
The following elements under Article 283 of the Labor Code must concur or be present, to wit:
(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 one-half () 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 uses 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.
In the absence of one element, the retrenchment scheme becomes an irregular exercise of
management prerogative.
The retrenchment scheme under scrutiny was not triggered directly by any
financial difficulty PAL was experiencing at the time, nor borne of an actual
implementation of its proposed downsizing of aircraft.

PHILIPPINE TUBERCULOSIS SOCIETY vs. NLRC

G.R. No. 115414. August 25, 1998

FACTS:

The Philippine Tuberculosis Society, Inc. is a non-stock and non-profit domestic

corporation with the primary objective of fighting tuberculosis in the Philippines. It has
employees who are represented by private respondent National Labor Union.

In 1989, the Society began to experience serious financial difficulties and

implemented the retrenchment of one hundred sixteen (116) employees. Then after this
the respondent NLU filed a notice of strike against the Society with the National
Conciliation and Mediation Board (NCMB), charging the Society with unfair labor
practice in terminating the services of the aforementioned employees.
Conferences were scheduled by the NCMB, which however failed to resolve the
case.

ISSUE: WON the employees were validly terminated

RULLING:

NLRC: - the NLRC rendered a decision declaring as invalid the retrenchment of the
employees concerned on the ground that the Society did not take seniority into account
in their selection. The NLRC held:

The seniority factor, an indispensable criterium for a retrenchment program to be valid,

was admittedly not employed in the selection process. It was omitted in favor of the very
subjective criteria of dependability, adaptability, trainability, job performance, discipline,
and attitude towards work. Because of this failure, a number of those retrenched were
senior in years of service to some of those retained. This failure certainly invalidates the
retrenchment program.

SC: - the Supreme Court considered the seniority factor an important ingredient for the
validity of a retrenchment program. According to the Court, the following legal procedure
should be observed for a retrenchment to be valid; (a) one-month prior notice to the
employee as prescribed by Article 282 of the Labor Code; and b) use of a fair and
reasonable criteria in carrying out the retrenchment program, such as 1) less preferred
status (as in the case of temporary employees) 2) efficiency rating, 3) seniority, and 4)
proof of claimed financial losses.

We noted with concern that the criteria used by the Society failed to consider the
seniority factor in choosing those to be retrenched, a failure which, to our mind, should
invalidate the retrenchment, as the omission immediately makes the selection process
unfair and unreasonable. Things being equal, retaining a newly hired employee and
dismissing one who had occupied the position for years, even if the scheme should
result in savings for the employer, since he would be paying the newcomer a relatively
smaller wage, is simply unconscionable and violative of the senior employees tenurial
rights.
FRANCIS RAY TALAM, v. NLRC

FACTS:

The respondent, The Software Factory, Inc. (TSFI), is a domestic corporation engaged
in providing information technology and computer consultancy to the public. It holds
office in Makati City. In April 2001, it employed Talam as a full-time programmer.

In the latter part of 2001 and in 2002, TSFI suffered financial reverses. Its external
financial auditor advised that it cut on its payroll expenses which accounted for 41% of
its total operating costs.TSFI heeded the advice and decided to retrench some of its
employees, using as basis its employees' service income and contribution margins to
the company. TSFI found that Talam was one of two employees with the least or with
no income contribution for the year 2002. Consequently, respondents Teresa Grapilon
(Grapilon), TSFI's Office Manager, and Wolfgang Hermle (Hermle), Chief Executive
Officer, verbally informed Talam that his services with the company would be terminated
thirty (30) days after September 27, 2002. Thereafter, TSFI notified Talam in writing of
the termination of his employment. The notice was dated October 1, 2002, but received
by Talam on October 4, 2002. On November 6, 2002, or after a month, Talam signed a
Release and Quitclaim in consideration and receipt ofP89,954.00 in compensation and
other benefits.

On November 29, 2002, Talam questioned the legality of his separation from the service
through a complaint for illegal dismissal and illegal deduction, with claims for service
incentive leave pay, damages and attorney's fees against TSFI, Grapilon and Hermle,
before the National Labor Relations Commission (NLRC) in Cebu City.

On October 28, 2003, Executive Labor Arbiter Reynoso A. Belarmino rendered a

decision declaring Talam's dismissal illegal and directing TSFI to pay Talam separation
benefits, backwages and 13th month pay in the aggregate amount ofP260,560.00.

TSFI appealed to the NLRC. In a Decision dated February 21, 2005,the NLRC Fourth
Division set aside the labor arbiter's ruling and dismissed Talam's complaint without
prejudice, for improper venue. It ruled that Talam should have filed the complaint with
the NLRC-Regional Arbitration Branch in the National Capital Region which has
jurisdiction over the workplace in Makati City. Talam sought a reconsideration which the
NLRC granted in a resolution promulgated on May 25, 2005.

TSFI moved for reconsideration of the NLRC resolution which was partially granted in
another resolution dated September 27, 2005.

Talam moved for reconsideration, but the NLRC denied the motion on January 31,
2006. Talam thereafter sought relief from the CA through a petition forcertiorari under
Rule 65 of the Rules of Court, In particular, Talam questioned the deletion of the award
to him of backwages and 13th month pay.

The CA denied the petition for lack of merit. It found Talam's separation from the service
by reason of retrenchment to be valid.

Talam moved for reconsideration of the decision, but the CA denied the motion in a
resolution promulgated on September 29, 2006.Hence, the present recourse to the
Court.

ISSUE:
Whether Talam the retrenchment is valid and entitled to benefits.

HELD: The decision of the Court of Appeals is sustained.

LABOR LAW

The CA committed no reversible error in affirming the NLRC ruling that Talam was
validly dismissed on the ground of retrenchment.

First. The decision to retrench had a basis; it was not simulated nor resorted to for the
purpose of getting rid of employees. The decision was upon the recommendation of the
companys external auditor Leah A. Villanueva, as contained in her letter to the TSFI
Board of Directors in October 2002.The letter reads:

Second. The cost-cutting measure recommended involved reduction of TSFIs payroll

expense account which, as the auditor found, makes up 41% of the company's total
operating expenses. Talam insinuates that the share in the company's operating costs
of personnel expenses is misleading, contending that the bulk of the expense goes into
management fees. While this may be so, it cannot be denied that the management
group is still part of the personnel component of the company, and absent any showing
of bad faith, the choice of who should be retrenched must be conceded to the company
for as long as there exists a basis for it.

Talam disputes the unfavorable assessment of his performance as a consultant,

arguing that among nineteen (19) consultants of the company (not seventeen [17], as
listed by TSFI), there were four (4) employees who had lower contribution margins; he
had no contribution income for 2002 because he was assigned to do office work and
was not being given projects.

Third. Talam was dismissed due to a cause authorized by law retrenchment to prevent
losses. At the time of Talams dismissal, TSFIs financial condition, as found by the
external auditor, showed that it was not just expecting losses, it already suffered a net
income loss of P2,474,418.00 and retained earnings deficit ofP7,424,250.00 for the
period ending December 31, 2002.

Fourth. TSFI resorted to other measures to abate its losses. It claimed that during the
crises period, it used as an office a small-room (a mere cubicle) with only a two-person
support staff in the persons of Grapilon and Hermle; it reduced the salaries of its
employees by as much as 30%. This submission by the company is substantiated by
the schedule of Operating Expenses for the year ended December 31, 2002 and
September 30, 2002.A quick glance at the schedule readily shows a reduction of TSFIs
operating expenses across the board. The schedule indicates a substantial decrease in
the operating expenses, from P5,733,735.00 in September 2002 toP1,698,552.36 as of
the end of December 2002.

Given the release and quitclaim, there is no reason how TSFI can be made to answer
for failure to afford Talam procedural due process. The release and quitclaim, erased
whatever infirmities there might have been in the notice of termination as Talam had
already voluntarily accepted his dismissal through the release and quitclaim. With this
acceptance, the written notice became academic; the notice, after all, is merely a
protective measure put in place by law and serves no useful purpose after protection
has been assured. Thus finding no basis for the conclusion that TSFI violated
procedural due process and should pay nominal damages.

DISMISSED.
*Closure of the business

NORTH DAVAO vs. NLRC

G.R. No. 112546

March 13, 1996

TOPIC: CLOSURE OF BUSINESS (ART 283) Due to serious business losses

no separation pay.

FACTS: North Davao Mining Corporation was incorporated in 1974 as a 100%

privately-owned company. As of December 31, 1990 the national government held
81.8% of the common stock and 100% of the preferred stock of said company.
In May 1992, North Davao completely ceased operations due to serious business
reverses. When it ceased operations, its remaining employees were separated and
given the equivalent of 12.5 days pay for every year of service, computed on their
basic monthly pay.
However, it appears that, during the life of the petitioner corporation, from the
beginning of its operations in 1981 until its closure in 1992, it had been giving
separation pay equivalent to 30 days pay for every year of service.
Subsequently, a complaint was filed with respondent LA by respondent Guillema and
271 other seperated employees for additional separation pay of 17.5 days for every
year of service, among others.
ISSUE: Is a company which is forced by huge business losses to close its business,
legally required to pay separation benefits to its employees at the time of its closure in
an amount equivalent to the separation pay paid to those who were separated when the
company was still a going concern?

HELD: NO

LABOR CODE:
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 under-taking 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 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 1 month pay or to at least 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 1 month
pay or at least month pay for every year of service, whichever is higher. A fraction
of at least 6 months shall be considered whole year.
The underscored portion of Art. 283 governs the grant of sepAration benefits in case
of closures or cessation of operation of business establishments NOT due to serious
business losses or financial reverses x x x. Where, however, the closure was due to
business losses as in the instant case, in which the aggregate losses amounted to
over P20 billion the Labor Code does not impose any obligation upon the employer
to pay separation benefits, for obvious reasons.
In the instant case, the companys practice of giving one months pay for every year
of service could no longer be continued precisely because the company could not
afford it anymore. It was forced to close down on account of accumulated losses of
over P20 billion. North Davao gave 30-days separation pay to its employees when it
was still a going concern even if it was already losing heavily. As a going concern, its
cash flow could still have sustained the payment of such separation benefits. But
when a business enterprise completely ceases operations, i.e., upon its death as a
going business concern, its vital lifeblood -its cashflow literally dries up. Therefore,
the fact that less separation benefits were granted when the company finally met its
business death cannot be characterized as discrimination. Such action was dictated
not by a discriminatory management option but by its complete inability to continue
its business life due to accumulated losses. Indeed, one cannot squeeze blood out of a
dry stone. Nor water out of parched land.
NOTES:

Even if the national government owned or controlled 81.8% of the common stock and
100% of the preferred stock of North Davao, it remains only a stockholder thereof,
and under existing laws and prevailing jurisprudence, a stockholder as a rule is not
directly, individually and/or personally liable for the indebtedness of the
corporation. The obligation of North Davao cannot be considered the obligation of
the national government, hence, whether the latter be solvent or not is not material to
the instant case. The respondents have not shown that this case constitutes one of the
instances where the corporate veil may be pierced. From another angle, the national
government is not the employer of private respondent and his co-complainants, so
there is no reason to expect any kind of bailout by the national government under
existing law and jurisprudence.

Not due to Serious Business losses with separation pay

PHILIPPINE TOBACCO FLUE-CURING & REDRYING CORPORATION

vs. NLRC [G.R. No. 127395. December 10, 1998]

FACTS:

There are two groups of employees, namely, the Lubat group and the Luris group. The Lubat
group is composed of petitioners seasonal employees who were not rehired for the 1994 tobacco
season. At the start of that season, they were merely informed that their employment had been
terminated at the end of the 1993 season. They claimed that petitioners refusal to allow them to
report for work without mention of any just or authorized cause constituted illegal dismissal. In
their Complaint, they prayed for separation pay, back wages, attorneys fees and moral damages.
On the other hand, the Luris group is made up of seasonal employees who worked during the
1994 season. On August 3, 1994, they received a notice informing them that, due to serious
business losses, petitioner planned to close its Balintawak , Quezon City plant and transfer its
tobacco processing and redrying operations to Ilocos Sur. Although the closure was to be
effective September 15, 1994, they were no longer allowed to work starting August 4, 1994.

ISSUES:

1. Did petitioner prove serious business losses, its justification for the nonpayment of
separation pay
2. Was the dismissal of the employees valid
RULING:

The petition is not meritorious.

1. Serious Business Losses Not Proven

Article 283 of the Labor Code prescribes the requisites and the procedure for an employees
dismissal arising from the closure or cessation of operation of the establishment.
The present case involves the closure of merely a unit or division, not the whole business of an
otherwise viable enterprise. Although Article 283 uses the phrase closure or cessation of
operation of an establishment or undertaking, , the said statutory provision applies in cases of
both complete and partial cessation of the business operation.
The loss referred to in Article 283 cannot be just any kind or amount of loss; otherwise, a
company could easily feign excuses to suit its whims and prejudices or to rid itself of unwanted
employees. To guard against this possibility of abuse, the Court laid down the following
standard which a company must meet to justify retrenchment:
1. 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 bonafide nature of the retrenchment would appear to be
seriously in question.
2. 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.
3. it must be reasonably necessary and likely to effectively prevent the expected losses.
4. alleged losses if already realized, and the expected imminent losses sought to be forestalled,
must be proved by sufficient and convincing evidence.
Petitioner did not actually close its entire business. It merely transferred or relocated its tobacco
processing and redrying operations. Moreover, it was also engaged in, among others, corn and
rental operations, which were unaffected by the closure of its Balintawak plant. Petitioner was
not able to prove serious financial losses arising from its tobacco operations.
Petitioner was not able to establish that the closure of its business operations in its Balintawak
plant was in fact due to serious financial losses. Therefore, under the last two sentences of
Article 283 of the Labor Code, the dismissed employees belonging to the Luris group are entitled
to 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. A fraction of at least six (6) months shall be considered one
(1) whole year.

1. Lubat Group Illegally Dismissed

Petitioner illegally dismissed the members of the Lubat group when it refused to allow them to
work during the 1994 season. The nature of the relationship of seasonal workers is such that
during off season they are temporarily laid off but during summer season they are re-employed,
or when their services may be needed. They are not strictly speaking separated from the service
but are merely considered as on leave of absence without pay until they are re-employed. The
Court considered a seasonal worker in regular employment in cases involving the
determination of an employer-employee relationship and security of tenure.
The employer-employee relationship between herein petitioner and members of the Lubat group
was not terminated at the end of the 1993 season. From the end of the 1993 season until the
beginning of the 1994 season, they were considered only on leave but nevertheless still in the
employ of petitioner.
Petitioner is liable for illegal dismissal and should be responsible for the reinstatement of the
Lubat group and the payment of their back wages. However, since reinstatement is no longer
possible as petitioner has already closed its Balintawak plant, respondent members of the said
group should instead be awarded normal separation pay (in lieu of reinstatement) equivalent to at
least one month pay, or one month pay for every year of service, whichever is higher. It must
be stressed that the separation pay being awarded to the Lubat group is due to illegal dismissal;
hence, it is different from the amount of separation pay provided for in Article 283 in case of
retrenchment to prevent losses or in case of closure or cessation of the employers business, in
either of which the separation pay is equivalent to at least 1 month or 1/2 month pay for every
year of service, whichever is higher.

WHEREFORE, the assailed Decision of Respondent NLRC is hereby AFFIRMED WITH THE
MODIFICATION.

RAZON, INC. vs. SOLE and MARINA DIGEST

DECEMBER 19, 2016 ~ LEAVE A COMMENT

G.R. No. 85867 May 13, 1993

RAZON, INC. [formerly known as Metro Services, Inc.], petitioner,

vs.
THE HONORABLE SECRETARY OF LABOR AND EMPLOYMENT (DOLE)
and MARINA PORT SERVICES, INC. (MARINA), respondents.

FACTS: Petitioner E. Razon, Inc. (ERI) is a corporation organized in 1962

principally to bid for the right tooperate arrastre services in Manila. They acquired
rights to operate Manilas south harbor starting 1974. (The company was later
renamed MPSI)
On July 19, 1986 or two years before the expiration of the eight-year term, the PPA
cancelled the management contract for alleged violations thereof. PPA took over the
cargo-handling operations as well as all the equipment of MPSI
Two days later or on July 21, 1986, the PPA issued Permit No. 104286 for cargo-
handling services to Marina Port Services, Inc. (MARINA). The latter began the
arrastre services and required all workers of ERI/MPSI to accomplish individual
information sheets. Weeks later, the bulk of the 2,700 employees concerned
discovered that they had been hired by MARINA as new employees effective July 21,
1986. Hence, they clamored for the payment of their separation pay but both the
MARINA and ERI/MPSI refused to be liable therefor.
Secretary took jurisdiction. He held that it was MPSIs liability to pay the separation
pay, even if MARINA assumed the liabilities of MPSI. This was because such
liability was personal (in personam), hence not enforceable against a successor-
emloyer.
ISSUE: WON MARINA assumed liability for paying the employees separation pay

HELD: NO.
By absorbing ERI/MPSI employees and honoring the terms and conditions in the
collective bargaining agreement between ERI/MPSI and the employees, MARINA did
not assume the responsibility of ERI/MPSI to pay separation pay to its
employees. The fact that a couple of days later, the PPA, without public bidding,
issued to MARINA, permit to operate, does not imply that MARINA stepped into the
shoes of ERI/MPSI as if there were absolute identity between them.
There is no privity of contract between ERI/MPSI and MARINA so as to make the
latter a common or even substitute employer that it should be burdened with the
obligations of the former.
Admittedly, the consequent separation from the employment of its employees was not
of the ERI/MPSIs own making. However, it may not validly lay such consequence on
the lap of MARINA which, like itself, had no hand in the termination of the
management contract by the PPA.

NOTES:
Paragraph 7, insofar as it refers to employees benefits, should be applied
prospectively with respect to MARINA. This conclusion is supported by Paragraph 14
of Permit No. 104286 granted to MARINA which states:
14. Grantee shall be responsible for all obligations, liabilities or claims arising out of
any transactions or undertakings in connections with their cargo handling
operations as of the actual date of transfer thereof to grantee.

ASSOCIATION OF INTEGRATED SECURITY FORCE OF BISLIG

(AISFB) - ALU vs. CA.
G.R. No. 140150. August 22, 2005

FACTS:
Petitioner Association of Integrated Security Force of BisligALU (AISFB-ALU) is a
legitimate labor organization duly registered with the Department of Labor and
Employment (DOLE). Its members are the regular company hired security guards
composing the Company Guard Force maintained and operated by private respondent
Paper Industries Corporation of the Philippines (PICOP).
 Private respondent PICOP is a corporation engaged in the manufacture of paper
and timber products, with principal place of operations at Tabon, Bislig, Surigao del Sur.
A petition for certification election was conducted where ALU-TUCP was proclaimed
the exclusive bargaining agent of the company security guards.

Respondent PICOPs license expired on March 31, 1991. It applied for renewal of its
license as early as January. However, difficulties were allegedly encountered in
complying with the requirements. Following this, complainants were sent notices of
termination to take effect May 7, 1991. Respondent PICOP explained that the phase-
out and closure of its security force was due to the non-approval of its application for
the renewal of its license by the PC Civil Security Force Command. Then the
complainants filed a notice of strike with the National Conciliation and Mediation
Board (NCMB) Region XI. However, complainants failed to stage a strike allegedly
because of fear that the NPAs might take advantage of such volatile situation and its
adverse effects charged against them.

Respondent, on the other hand, believed that complainants did not push through with
their plan to stage a strike because more than one half of their members (103 to be
exact out of the original 204) already accepted the closure of the security force and in
fact were already paid their separation benefits in full. Respondent then claimed that
even complainant Guimary and his group have collected more than 50% of their
separation benefits.

However, the complainants still strongly assert that their termination of employment
was the result of their having formed a union, a clear case of union busting.
Respondent PICOP allegedly deliberately refused to comply with the requirements for
the renewal of its security license. And, because complainants were illegally
terminated from employment, they are entitled to reinstatement, backwages, damages,
attorneys fees and other monetary benefits.

ISSUE: WON the employees were validly terminated

RULLING:

NLRC: - rendered its questioned decision dismissing the complaint for illegal
dismissal, backwages, etc. The Commission finds respondent PICOPs closure of its
Company Security Force and the consequent termination of employment of the
security guards VALID and LEGAL.

CA: - Court of Appeals rendered a Decision affirming the findings of the NLRC

SC: - the records of the instant case verify that private respondent PICOP had
sufficiently complied with the requirements for valid termination based on the aforesaid
ground as defined by Art. 283 of the Labor Code, as amended, i.e., (a) serving a written
notice to the affected workers and the DOLE at least one month before the effective
date of the closure; and (b) payment of separation pay equivalent to one month or at
least one-half month pay for every year of service, whichever is higher, with a fraction of
at least six (6) months to be considered one whole year. It informed the DOLE and the
security guards of the cessation of the operation of its Company Guard Force. SC
affirmed the decision of NLRC.

*Disease of Illness

[G.R. No. 99047. April 16, 2001.]

OMAR O. SEVILLANA, petitioner, vs. I.T. (INTERNATIONAL) CORP./SAMIR MADDAH &

TRAVELLERS INSURANCE AND SURETY CORPORATION, DEPARTMENT OF LABOR AND
EMPLOYMENT and NATIONAL LABOR RELATIONS COMMISSION (Second Division),
respondents.

FACTS

Petitioner Omar Sevillana was contracted to work as a driver by private respondent I.T.
Corporation for its foreign accredited principal, Samir Maddah, in Jeddah, Saudi Arabia. The
agreed monthly salary was US $370.00 for a period of two (2) years. Petitioner alleged,
however, that when he received his salaries from his employer, he was only paid US $100.00 a
month for twelve (12) months, instead of the agreed US $370.00 per month.

On November 2, 1988, after working twelve (12) months with his employer, petitioner said that
he was repatriated without any valid and justifiable reason. Petitioner shouldered the cost of
his return airfare in the amount of US $630.00.

Petitioner filed a complaint with the POEA, for underpayment of salaries, illegal dismissal,
reimbursement of return airfare, moral damages and attorney's fees against I .T . Corporation,
Samir Maddah and Travellers Insurance and Surety Corporation.

Private respondent I .T . denied the material allegations of the petitioner but admitted that the
petitioner was one of several workers it deployed and employed abroad. I .T . argued that the
petitioner continuously worked with Samir for more than one (1) year until his blood pressure
was considered critical. Thus, Samir was forced to closely monitor the health condition of the
petitioner. When petitioner's blood pressure did not stabilize and begun affecting his work as
driver due to frequent headaches and dizziness, I .T . alleged that Samir decided to repatriate
the petitioner to avoid further injury and complication to his health. I .T . claimed that after the
petitioner had received all the benefits accorded to an employee consisting of full salaries and
separation pay, the petitioner refused to be repatriated and instead decided to run away. Since
then, the whereabouts of the petitioner were unknown and I .T . only heard about the
petitioner when the latter reported to their office in the Philippines and later on filed the
subject complaint before the POEA Adjudication Office.

POEA Adjudication Office rendered a decision holding the private respondents herein jointly
and severally liable to the petitioner.

Only private respondent I .T . appealed the aforesaid decision of the POEA Adjudication Office
to the NLRC Second Division which in turn reversed and set aside the findings and ruling of the
former
ISSUE

W/N THE PUBLIC RESPONDENT ERRED IN HOLDING THAT THE COMPLAINANT-PETITIONER WAS
NOT ILLEGALLY DISMISSED.

HELD

We rule for the petitioner.

When the NLRC declared that the burden of proof in dismissal cases shifts to the employer only
when the latter admits such dismissal, the NLRC ruled erroneously in disregard of the law and
prevailing jurisprudence on the matter.

"Article 277(b) of the Labor Code puts the burden of proving that the dismissal of an
employee was for a valid or authorized cause on the employer. It should be noted that
the said provision of law does not distinguish whether the employer admits or does not
admit the dismissal.

It is clear that petitioner was illegally dismissed by private respondent Samir Maddah."

Time and again we have ruled that where there is no showing of a clear, valid and legal cause
for termination of employment, the law considers the case a matter of illegal dismissal. The
burden is on the employer to prove that the termination of employment was for a valid and
legal cause. For an employee's dismissal to be valid, (a) the dismissal must be for a valid cause
and (b) the employee must be afforded due process.

A review of the record shows that neither of the two (2) conditions precedent were shown to
have been complied with by the private respondents. All that private respondent I .T . did was
to rely on its claim that petitioner was repatriated by its foreign principal, respondent Samir
Maddah, due to hypertension with nary an evidence to support it. In all termination cases, strict
compliance by the employer with the demands of both procedural and substantive due process
is a condition sine qua non for the same to be declared valid. Under Section 8, Rule I, Book VI of
the Rules and Regulations Implementing the Labor Code, for a disease to be a valid ground for
the dismissal of the employee, the continued employment of such employee is prohibited by
law or prejudicial to his health or the health of his co-employees, there must be a certification
by a competent public health authority that the disease is of such nature or at such a stage that
it cannot be cured within a period of six (6) months, even with proper medical treatment.

The defense of complainant's medical problems (alleged hypertension of complainant)

interposed by respondents to justify the dismissal of the former is totally bereft of merit. The
said defense of respondents is not only uncorroborated by documentary evidence but is also
not a just or valid cause for termination of one's employment. While an employer (respondents
in this case) may validly terminate the services of an employee who has been found to be
suffering from any disease, it is authorized only if his continued employment is prohibited by
law or is prejudicial to his health as well as to the health of his co-employees (Art. 284, Labor
Code). This is not present in the instant case, for there is no finding from a medical practitioner
certifying that complainant is really hypertensive."

Since the burden of proving the validity of the dismissal of the employee rests on the employer,
the latter should likewise bear the burden of showing that the requisites for a valid dismissal
due to a disease have been complied with. In the absence of the required certification by a
competent public health authority, this Court has ruled against the validity of the employee's
dismissal. It is therefore incumbent upon the private respondents to prove by the quantum of
evidence required by law that petitioner was not dismissed, or if dismissed, that the dismissal
was not illegal; otherwise, the dismissal would be unjustified. This Court will not sanction a
dismissal premised on mere conjectures and suspicions, the evidence must be substantial and
not arbitrary and must be founded on clearly established facts sufficient to warrant his
separation from work. We find no cogent reason to depart from the conclusion reached by the
POEA Adjudication Office in the case at bar.

SY vs CA Case Digest

[G.R. No. 142293. February 27, 2003]

VICENTE SY, TRINIDAD PAULINO, 6BS TRUCKING CORPORATION, and SBT TRUCKING
CORPORATION, petitioners, vs. HON. COURT OF APPEALS and JAIME SAHOT,
respondents.

FACTS

Private respondent Jaime Sahot started working as a truck helper for petitioners family-owned
trucking business named Vicente Sy Trucking. Throughout all the changes in names and for 36
years, private respondent continuously served the trucking business of petitioners. When Sahot was
already 59 years old, he had been incurring absences as he was suffering from various
ailments. Particularly causing him pain was his left thigh, which greatly affected the performance of
his task as a driver. Sahot had filed a week-long leave sometime in May 1994. On May 27th, he
was medically examined and treated for EOR, presleyopia, hypertensive retinopathy G II), HPM, UTI,
Osteoarthritis and heart enlargement. On said grounds, Belen Paulino of the SBT Trucking Service
management told him to file a formal request for extension of his leave. At the end of his week-
long absence, Sahot applied for extension of his leave for the whole month of June, 1994. It was at
this time when petitioners allegedly threatened to terminate his employment should he refuse to go
back to work. They carried out their threat and dismissed him from work, effective June 30, 1994.
He ended up sick, jobless and penniless.

On September 13, 1994, Sahot filed with the NLRC NCR Arbitration Branch, a complaint for illegal
dismissal for recovery of separation pay against Vicente Sy and Trinidad Paulino-Sy, Belen Paulino,
Vicente Sy Trucking, T. Paulino Trucking Service, 6Bs Trucking and SBT Trucking, herein petitioners.

Petitioners, on their part, claimed that sometime prior to June 1, 1994, Sahot went on leave and
was not able to report for work for almost seven days. On June 1, 1994, Sahot asked permission to
extend his leave of absence until June 30, 1994. It appeared that from the expiration of his leave,
private respondent never reported back to work nor did he file an extension of his leave. Instead,
he filed the complaint for illegal dismissal against the trucking company and its owners. Petitioners
add that due to Sahots refusal to work after the expiration of his authorized leave of absence, he
should be deemed to have voluntarily resigned from his work. They contended that Sahot had all
the time to extend his leave or at least inform petitioners of his health condition.

The Labor Arbiter ruled in favor of the company. It held that Sahot failed to return to work.
However, upon appeal, the NLRC modified the LAs decision, ruling that Sahot did not abandon his
job but his employment was terminated on account of his illness, pursuant to Article 284 of the
Labor Code.

ISSUE

Whether or not there was valid termination of employment due to his illness.

HELD

The SC held that although illness can be a valid ground for terminating an employee, the dismissal
was invalid. Article 284 of the Labor Code authorizes an employer to terminate an employee on the
ground of disease. However, in order to validly terminate employment on this ground, Book VI, Rule
I, Section 8 of the Omnibus Implementing Rules of the Labor Code requires:

Sec. 8. Disease as a ground for dismissal- Where the employee suffers from a disease and his
continued employment is prohibited by law or prejudicial to his health or to the health of his co-
employees, the employer shall not terminate his employment unless there is a certification by
competent public health authority that the disease is of such nature or at such a stage that it cannot
be cured within a period of six (6) months even with proper medical treatment. If the disease or
ailment can be cured within the period, the employer shall not terminate the employee but shall ask
the employee to take a leave. The employer shall reinstate such employee to his former position
immediately upon the restoration of his normal health.

The requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed
with; otherwise, it would sanction the unilateral and arbitrary determination by the employer of the
gravity or extent of the employees illness and thus defeat the public policy in the protection of
labor.

In the case at bar, the employer clearly did not comply with the medical certificate requirement
before Sahots dismissal was effected. Since the burden of proving the validity of the dismissal of the
employee rests on the employer, the latter should likewise bear the burden of showing that the
requisites for a valid dismissal due to a disease have been complied with. In the absence of the
required certification by a competent public health authority, this Court has ruled against the validity
of the employees dismissal. It is therefore incumbent upon the private respondents to prove by the
quantum of evidence required by law that petitioner was not dismissed, or if dismissed, that the
dismissal was not illegal; otherwise, the dismissal would be unjustified. This Court will not sanction a
dismissal premised on mere conjectures and suspicions, the evidence must be substantial and not
arbitrary and must be founded on clearly established facts sufficient to warrant his separation from
work.

In addition, we must likewise determine if the procedural aspect of due process had been complied
with by the employer. From the records, it clearly appears that procedural due process was not
observed in the separation of private respondent by the management of the trucking company. The
employer is required to furnish an employee with two written notices before the latter is dismissed:
(1) the notice to apprise the employee of the particular acts or omissions for which his dismissal is
sought, which is the equivalent of a charge; and (2) the notice informing the employee of his
dismissal, to be issued after the employee has been given reasonable opportunity to answer and to
be heard on his defense. These, the petitioners failed to do, even only for record purposes. What
management did was to threaten the employee with dismissal, then actually implement the threat
when the occasion presented itself because of private respondents painful left thigh.

All told, both the substantive and procedural aspects of due process were violated. Clearly,
therefore, Sahots dismissal is tainted with invalidity.

Petition is denied.

*Totality of Infractions Doctrine

JUAN P. VILLENO, petitioner, vs NLRC

Facts:

Petitioner Juan P. Villeno was employed as electrician in one of the vessels of private
respondent Sulpicio Lines, Inc. Twenty-seven (27) years.

M/V Sulpicio Container XI after leaving the port was forced to return due to the death of the
purser on board. Upon reaching port, the crew members were instructed not to leave the
vessel as it would pursue its voyage immediately after turning over the body to the proper
authorities.
The petitioner, without seeking permission, left the vessel purportedly to settle a marital
problem. Before leaving he disconnected the ship's steering line cable so that the vessel
could not leave port without him.
According to petitioner, when he returned to the port thirty (30) minutes later, the ship was
only a few inches away from the wharf but was prevented by a representative of
respondent corporation from boarding the vessel. It turned out that the vessel had hired
another electrician to reconnect the steering line cable.
After evaluation of the evidence he was found guilty of intentionally sabotaging the
operation of the vessel, a serious misconduct, compounded by willful disobedience
justifying the penalty of dismissal.
Petitioner filed a complaint against private respondents for illegal dismissal.
LA - ruled that petitioner was indeed guilty of misconduct but found the penalty of dismissal
harsh considering that there was no evidence showing that petitioner intended to sabotage
the voyage of the vessel.
NLRC - the circumstances that petitioner had been employed by respondent corporation for
a long period of time and that it was his first offense were not by themselves sufficient to
 warrant mitigation of the consequences of his serious misconduct. What were material
were the facts that he disembarked from the vessel despite explicit instruction to the
contrary, and he disconnected the steering line cable so that the vessel could not leave,
which in the context of respondent corporation's business could not be tolerated.
Petitioner argues that although his reason for disconnecting the steering line cable was
personal yet it was highly commendable since he was concerned with family unity. In
addition, the disconnection was done to protect the vessel from pranksters who in the past
would play with the steering wheel. By terminating his services respondent corporation
thus set to naught his twenty-seven (27) years of service, completely ignoring the fact that it
was his first offense.

Issue:

(1) Whether petitioner's act of disconnecting the steering line cable and disembarking from
the vessel without permission constitute serious misconduct and willful disobedience
justifying his dismissal. YES
(2) Will the fact that petitioner had served his employer for twenty-seven (27) years
without committing any infraction of company rules play a crucial role in determining
his liability? NO

Held:

SC sustain the NLRC in holding that petitioner was guilty of serious misconduct and willful
disobedience

. . . Granted that his act was without malice or willful intent to cause damage, this does not
excuse him for putting his personal interests over that of his employers in the sense that he . . .
unnecessarily disrupt(ed) and prejudice(d) the normal operations of respondent to attend to
personal matters. No amount of good faith or lack of intention to cause damage can diminish
the degree of responsibility of complainant for his actuations . . .

By disconnecting the steering line cable before disembarking, petitioner must have deluded
himself into believing that he was the master in command of the vessel and that during his
absence the vessel should be immobile. His lack of concern for his employer's interests or
for his responsibility towards his employer was plainly exhibited by these additional
circumstances noted by the NLRC

. . . We are aware of the inconvenience and discomfort caused to passengers by delays. In the
case at bar, it is bad enough that the vessel had to return to port; but to further delay the
voyage because complainant wants to talk to his wife is pathetic. Complainant was important to
the vessel's complement.

Considerations of first offense and length of service are overshadowed by the seriousness
of the offense. As to whether an offense is minor or serious will have to be determined
according to the peculiar facts of each case. And to a shipping company engaged in the
transportation of passengers and cargoes any delay of its vessels may greatly affect its
business and reputation and expose the company to unmitigated lawsuits for breach of
contract and damages.

The offenses cannot be excused upon a plea of their being "first offenses," or have not
resulted in prejudice to the company in any way. [That] no employer may rationally be
expected to continue in employment a person whose lack of morals, respect and loyalty
to his employer, regard for his employer's rules, and appreciation of the dignity and
responsibility of his office, has so plainly and completely been bared.
 Along the same vein the Court ruled in Colgate-Palmolive Philippines, Inc. v. Ople, which
also involved serious violation of company rules and regulations by the employee

. . . Where the totality of the evidence was sufficient to warrant the dismissal of the
employees the law warrants their dismissal without making any distinction between a first
offender and a habitual delinquent. Under the law, respondent Minister is duly mandated
to equally protect and respect not only the labor or workers' side but also the management
and/or employers' side.

TOWER INDUSTRIAL SALES vs CA

G.R. No. 165727

April 19, 2006

FACTS:

Tower Industrial Sales, a company engaged in selling various brands of home

appliances and respondent was employed as a company driver . Then private
respondent filed a Complaint with the Labor Arbiter for unfair labor practice and
claimed overtime pay, premium for holiday pay and service incentive leave pay
against his employer and the company. After this the company issued a
memorandum requiring Pamalo (employee) to explain his absences then in
response Pamalo submitted his handwritten explanation regarding his absences.
However his employer issued a notice of termination to the private respondent
effective 9 March 2002 for gross misconduct and for committing acts prejudicial to
the interest of the company.

ISSUE: WON Employee Rufo Pamalo was illegally dismissed on the

grounds of infractions and misconduct
RULLING:
LA: - rendered a decision in favor of petitioners, finding that private respondent
was validly dismissed

NLRC: - the NLRC Ruled in favor of the employee and reversed the Decision of
the Labor Arbiter.

CA: - Court of Appeals denied for having been filed 71 days late and for lack of
merit

SC: - Here, the Court finds no cogent reason to deflect from the findings of
the NLRC. We are, thus, bound by the findings of the NLRC that the alleged
infractions of private respondent do not constitute gross misconduct to warrant his
dismissal from service. Indeed, petitioners cannot rely merely on the weakness of
the defense of private respondent or on his failure to present evidence to disprove
the charge of gross misconduct. In the absence of substantial evidence, the
contentions of petitioners are self-serving and incapable of showing that the
dismissal of private respondent was justified. Moreover the infractions alleged by
the company were actually past infractions which the company penalized him
already. Past infractions cannot be collectively taken as a justification for his
dismissal from the service.

STELLAR INDUSTRIAL SERVICES, INC vs. NLRC & Roberto H. Pepito

G.R. No. 117418. January 24, 1996

FACTS:

Stellar Industrial Services, Inc., an independent contractor engaged in the business of

providing manpower services, employed private respondent Roberto H. Pepito as a
janitor. Pepito worked for a decade and a half. According to petitioner (employer),
private respondents years of service at MBC-PAL were marred by various infractions of
company rules ranging from tardiness to gambling, but he was nevertheless retained as
a janitor out of humanitarian consideration and to afford him an opportunity to reform.

Stellar finally terminated private respondents services because of what it termed as

Pepitos being Absent Without Official Leave (AWOL).

In response to this Pepito presented a letter to which was attached what purported to be
a medical certificate, that during the period in question he was unable to report for work
due to severe stomach pain and that, as he could hardly walk by reason thereof, he
failed to file the corresponding official leave of absence. However the company did not
believe his excuse. Thus, Pepito file a complaint in NLRC for illegal dismissal, illegal
deduction and underpayment of wages under Wage Order NCR-001, with prayer for
moral and exemplary damages and attorneys fees.

ISSUE: WON Pepito was Validly dismissed due to his infractions

RULLING:

LA: - opined that private respondent had duly proved that his 39-day absence was
justified on account of illness and that he was illegally dismissed without just cause.

NLRC: - AFFRIMED THE DECISION OF LA

SC: - Petitioners reliance on Pepitos past infractions as sufficient grounds for his
eventual dismissal, in addition to his prolonged absences, is likewise unavailing. The
correct rule is that previous infractions may be used as justification for an employees
dismissal from work in connection with a subsequent similar offense. As correctly
observed by the labor arbiter, those past infractions had either been
satisfactorily explained, not proven, sufficiently penalized or condoned by the
respondent. There was no allusion therein that his dismissal was due to his supposed
unexplained absences on top of his past infractions of company rules. To refer to those
earlier violations as added grounds for dismissing him is doubly unfair to private
respondent. Significantly enough, no document or any other piece of evidence was
adduced by petitioner showing previous absences of Pepito, whether with or without
official leave.

*Procedural Due Process

PEREZ and DORIA vs PHILIPPINE TELEGRAPH AND TELEPHONE

COMPANY and SANTIAGO

DECEMBER 19, 2016 ~ VBDIAZ

FELIX B. PEREZ and AMANTE G. DORIA, Petitioners, vs PHILIPPINE

TELEGRAPH AND TELEPHONE COMPANY and JOSE LUIS
SANTIAGO, Respondents.

G.R. No. 152048; April 7, 2009

FACTS:

Petitioners Felix B. Perez and Amante G. Doria were employed by respondent

Philippine Telegraph and Telephone Company (PT&T) as shipping clerk and
supervisor, respectively, in PT&Ts Shipping Section, Materials Management Group.
Acting on an alleged unsigned letter regarding anomalous transactions at the Shipping
Section, respondents formed a special audit team to investigate the matter. It was
discovered that the Shipping Section jacked up the value of the freight costs for goods
shipped and that the duplicates of the shipping documents allegedly showed traces of
tampering, alteration and superimposition.
Petitioners were placed on preventive suspension for 30 days for their alleged
involvement in the anomaly. Their suspension was extended for 15 days twice. Then
in a Memorandum, petitioners were dismissed from the service for having falsified
company documents. Petitioners filed a complaint for illegal suspension and illegal
dismissal alleging that they were dismissed on November 8, 1993, the date they
received the above-mentioned memorandum.
LA favored petitioners. NLRC reversed the decision of LA. Petitioners appealed to
CA. CA affirmed the NLRC decision insofar as petitioners illegal suspension for 15
days and dismissal for just cause were concerned. However, it found that petitioners
were dismissed without due process. Petitioners now seek a reversal of the CA
decision before the SC. They contend that there was no just cause for their dismissal,
that they were not accorded due process and that they were illegally suspended for 30
days.

ISSUE:

Whether respondents were dismissed for just cause and with the observance of due
process.

RULING:

1. Respondents evidence is insufficient to clearly and convincingly establish the

facts from which the loss of confidence resulted. Other than their bare allegations
and the fact that such documents came into petitioners hands at some point,
respondents should have provided evidence of petitioners functions, the extent of
their duties, the procedure in the handling and approval of shipping requests and
the fact that no personnel other than petitioners were involved. The alterations on
the shipping documents could not reasonably be attributed to petitioners because it
was never proven that petitioners alone had control of or access to these
documents.
Willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative is a just cause for termination. However, loss of confidence
should not be simulated. It should not be used as a subterfuge for causes which are
improper, illegal or unjustified. Loss of confidence may not be arbitrarily asserted in
the face of overwhelming evidence to the contrary. It must be genuine, not a mere
afterthought to justify an earlier action taken in bad faith.
The burden of proof rests on the employer to establish that the dismissal is for cause
in view of the security of tenure that employees enjoy under the Constitution and the
Labor Code. The employers evidence must clearly and convincingly show the facts
on which the loss of confidence in the employee may be fairly made to rest. It must be
adequately proven by substantial evidence. Respondents failed to discharge this
burden.
Respondents illegal act of dismissing petitioners was aggravated by their failure to
observe due process. To meet the requirements of due process in the dismissal of an
employee, an employer must furnish the worker with 2 written notices: (1) a written
notice specifying the grounds for termination and giving to said employee a
reasonable opportunity to explain his side and (2) another written notice indicating
that, upon due consideration of all circumstances, grounds have been established to
justify the employers decision to dismiss the employee.
Petitioners were neither apprised of the charges against them nor given a chance to
defend themselves. They were simply and arbitrarily separated from work and served
notices of termination in total disregard of their rights to due process and security of
tenure. Respondents failed to comply with the two-notice requirement for terminating
employees.
We note a marked difference in the standards of due process to be followed as
prescribed in the Labor Code and its implementing rules. The Labor Code provides
that an employer must provide the employee ample opportunity to be heard and to
defend himself with the assistance of his representative if he so desires.
The omnibus rules implementing the Labor Code, on the other hand, require a
hearing and conference during which the employee concerned is given the
opportunity to respond to the charge, present his evidence or rebut the evidence
presented against him.
In case of conflict, the law prevails over the administrative regulations implementing
it. The authority to promulgate implementing rules proceeds from the law itself. To
be valid, a rule or regulation must conform to and be consistent with the provisions of
the enabling statute. As such, it cannot amend the law either by abridging or
expanding its scope.
Article 277(b) of the Labor Code provides that, in cases of termination for a just
cause, an employee must be given ample opportunity to be heard and to defend
himself. Thus, the opportunity to be heard afforded by law to the employee is
qualified by the word ample which ordinarily means considerably more than
adequate or sufficient. In this regard, the phrase ample opportunity to be heard can
be reasonably interpreted as extensive enough to cover actual hearing or conference.
To this extent, Section 2(d), Rule I of the Implementing Rules of Book VI of the
Labor Code is in conformity with Article 277(b).
Nonetheless, Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor
Code should not be taken to mean that holding an actual hearing or conference is a
condition sine qua non for compliance with the due process requirement in
termination of employment. The test for the fair procedure guaranteed under Article
277(b) cannot be whether there has been a formal pretermination confrontation
between the employer and the employee. The ample opportunity to be heard
standard is neither synonymous nor similar to a formal hearing.
The standard for the hearing requirement, ample opportunity, is couched in general
language revealing the legislative intent to give some degree of flexibility or
adaptability to meet the peculiarities of a given situation. To confine it to a single rigid
proceeding such as a formal hearing will defeat its spirit.
Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code itself
provides that the so-called standards of due process outlined therein shall be
observed substantially, not strictly. This is a recognition that while a formal
hearing or conference is ideal, it is not an absolute, mandatory or exclusive avenue of
due process.
A hearing means that a party should be given a chance to adduce his evidence to
support his side of the case and that the evidence should be taken into account in the
adjudication of the controversy. To be heard does not mean verbal argumentation
alone inasmuch as one may be heard just as effectively through written explanations,
submissions or pleadings. Therefore, while the phrase ample opportunity to be
heard may in fact include an actual hearing, it is not limited to a formal hearing only.
The existence of an actual, formal trial-type hearing, although preferred, is not
absolutely necessary to satisfy the employees right to be heard.
Due process of law simply means giving opportunity to be heard before judgment is
rendered. In fact, there is no violation of due process even if no hearing was
conducted, where the party was given a chance to explain his side of the controversy.
What is frowned upon is the denial of the opportunity to be heard. Twin requirements
of notice and hearing constitute the essential elements of due process in the dismissal
of employees. It is deemed sufficient for the employer to follow the natural sequence
of notice, hearing and judgment.
In sum, the following are the guiding principles in connection with the hearing
requirement in dismissal cases:
(a) ample opportunity to be heard means any meaningful opportunity (verbal or
written) given to the employee to answer the charges against him and submit evidence
in support of his defense, whether in a hearing, conference or some other fair, just and
reasonable way.
(b) a formal hearing or conference becomes mandatory only when requested by the
employee in writing or substantial evidentiary disputes exist or a company rule or
practice requires it, or when similar circumstances justify it.
(c) the ample opportunity to be heard standard in the Labor Code prevails over the
hearing or conference requirement in the implementing rules and regulations.
On the other hand, an employee may be validly suspended by the employer for just
cause provided by law. Such suspension shall only be for a period of 30 days, after
which the employee shall either be reinstated or paid his wages during the extended
period.
Where the dismissal was without just or authorized cause and there was no due
process, Article 279 of the Labor Code mandates that the employee is entitled to
reinstatement without loss of seniority rights and other privileges and full backwages,
inclusive of allowances, and other benefits or their monetary equivalent computed
from the time the compensation was not paid up to the time of actual reinstatement. In
this case, however, reinstatement is no longer possible because of the length of time
that has passed from the date of the incident to final resolution. 14 years have
transpired from the time petitioners were wrongfully dismissed. To order
reinstatement at this juncture will no longer serve any prudent or practical purpose. So
petitioners will just be paid their separation pay.
Petition is hereby GRANTED.

KING OF KINGS ET AL vs. MAMAC

DECEMBER 19, 2016 ~ VBDIAZ

G.R. No. 166208 June 29, 2007

KING OF KINGS TRANSPORT INC., CLAIRE DELA FUENTE and

MELISSA LIM, petitioners,
vs.
SANTIAGO O. MAMAC, respondent.
FACTS: Petitioner KKTI is a corporation engaged in public transportation and
managed by Claire Dela Fuente and Melissa Lim. Respondent was a conductor for
Don Mariano Transit Corporation (DMTC). He was one of the few people who
established Damayan ng mga Manggagawa, Tsuper at Conductor-Transport Workers
Union. Pending the unions certification election, respondent was transferred to
KKTI. The KKTI employees later organized the Kaisahan ng mga Kawani sa King of
Kings (KKKK) which was registered with DOLE. Respondent was elected KKKK
president.
Upon audit of the October 28, 2001 Conductors Report of respondent, KKTI noted
an irregularity. It discovered that respondent declared several sold tickets as returned
tickets causing KKTI to lose an income of eight hundred and ninety pesos. While no
irregularity report was prepared on the October 28, 2001 incident, KKTI nevertheless
asked respondent to explain the discrepancy. In his letter, respondent said that the
erroneous declaration in his October 28, 2001 Trip Report was unintentional. He
explained that during that days trip, the windshield of the bus assigned to them was
smashed; and they had to cut short the trip in order to immediately report the matter to
the police. As a result of the incident, he got confused in making the trip report.
On November 26, 2001, respondent received a letter terminating his employment
effective November 29, 2001. The dismissal letter alleged that the October 28, 2001
irregularity was an act of fraud against the company. KKTI also cited as basis for
respondents dismissal the other offenses he allegedly committed since 1999.
After that, he filed an action for illegal dismissal, among other claims. He denied
committing any infraction and alleged that his dismissal was intended to bust union
activities. Moreover, he claimed that his dismissal was effected without due process.
KKTI averred that it had observed due process in dismissing respondent and
maintained that respondent was not entitled to his money claims such as service
incentive leave and 13th-month pay because he was paid on commission or
percentage basis.
LABOR ARBITER: he was validly dismissed
NLRC: Affirmed. CA held that there was just cause for respondents dismissal. It
ruled that respondents act in declaring sold tickets as returned tickets x x x
constituted fraud or acts of dishonesty justifying his dismissal.

ISSUE: WON respondent was given due process (procedural)

HELD: NO.
There was failure to observe the requirements of due process
Due process under the Labor Code involves two aspects: first, substantivethe valid
and authorized causes of termination of employment under the Labor Code; and
second, proceduralthe manner of dismissal.
Section 2(d) of Rule I of Book VI of the Omnibus Rules Implementing the Labor
Code provides:
SEC. 2. Standards of due process; requirements of notice.In all cases of
termination of employment, the following standards of due process shall be
substantially observed:
1. 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 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 he so desires is given opportunity to respond to the charge, present his
evidence, or rebut the evidence presented against him.
(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.

1. The first written notice to be served on the employees should contain the specific
causes or grounds for termination against them, and a directive that the employees
are given the opportunity to submit their written explanation within a reasonable
period. Reasonable opportunity under the Omnibus Rules means every kind of
assistance that management must accord to the employees to enable them to
prepare adequately for their defense.15 This should be construed as a period of at
least five (5) calendar days from receipt of the notice to give the employees an
opportunity to study the accusation against them, consult a union official or
lawyer, gather data and evidence, and decide on the defenses they will raise
against the complaint. Moreover, in order to enable the employees to intelligently
prepare their explanation and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve as basis for the charge
against the employees. A general description of the charge will not suffice. Lastly,
the notice should specifically mention which company rules, if any, are violated
and/or which among the grounds under Art. 282 is being charged against the
employees.
2. After serving the first notice, the employers should schedule and conduct a
hearing or conference wherein the employees will be given the opportunity to: (1)
explain and clarify their defenses to the charge against them; (2) present evidence
in support of their defenses; and (3) rebut the evidence presented against them by
the management. During the hearing or conference, the employees are given the
chance to defend themselves personally, with the assistance of a representative or
counsel of their choice. Moreover, this conference or hearing could be used by the
parties as an opportunity to come to an amicable settlement.
3. After determining that termination of employment is justified, the employers shall
serve the employees a written notice of termination indicating that: (1) all
circumstances involving the charge against the employees have been considered;
 and (2) grounds have been established to justify the severance of their
employment.
Respondent was not issued a written notice charging him of committing an infraction.
A verbal appraisal of the charges against an employee does not comply with the first
notice requirement.
The court observed from the irregularity reports against respondent for his other
offenses that such contained merely a general description of the charges against him.
The reports did not even state a company rule or policy that the employee had
allegedly violated.
No hearing was conducted. Regardless of respondents written explanation, a
hearing was still necessary in order for him to clarify and present evidence in support
of his defense. Moreover, respondent made the letter merely to explain the
circumstances relating to the irregularity in his October 28, 2001 Conductors Trip
Report. He was unaware that a dismissal proceeding was already being effected. Thus,
he was surprised to receive the November 26, 2001 termination letter indicating as
grounds, not only his October 28, 2001 infraction, but also his previous infractions.

MERCURY DRUG CORPORATION, vs.

ZENAIDA G. SERRANO
G.R. No. 160509 March 10, 2006

FACTS:
Mercury Drug Corporation ("Mercury") employed respondent Zenaida G. Serrano ("Serrano") as
one of Mercury Recto-Soler Branchs pharmacy assistants. Serranos primary duty was to attend
to customers at the retail counter. Mercury alleged that on 5 November 1991, Serrano, while in
the retail area, pocketed the P120 payment of one of the customers. Mercury Recto-Soler
Branchs General Manager Rolando Mateo ("Mateo") and Supervisor Antonio Concepcion
("Concepcion") confronted Serrano about the incident. As a result, Serrano wrote a resignation
letter stating that she is sorry for what he did. However Mercury did not accept Serranos
resignation. Instead, Mercury issued a notice on 11 January 2002 requesting Serrano to appear
before the Investigation Committee composed of three management and three rank-and-file
employees. Thereafter The Investigation Committee unanimously found Serrano guilty of
dishonesty. Mercury sent Serrano a letter terminating her employment.

Serrano filed with the NLRC Arbitration Branch, National Capital Region a complaint for illegal
dismissal, unfair labor practice and non-payment of benefits against Mercury.

ISSUE: WON SERRANO WAS VALIDLY DISMISSED WITH DUE PROCESS

RULLING:
LA: - The Labor Arbiter found Mercurys allegations against Serrano fabricated. The Labor Arbiter
held that Serrano was framed-up and that Mercury suffered no loss because Serrano did not take
any property belonging to Mercury. The Labor Arbiter stressed that there was no basis to presume
that Serrano had no more intention of remitting the P120 paid by the customer, for in fact Serrano
did remit the amount to the cashier. The Labor Arbiter also held that Mercury did not observe due
process in dismissing Serrano. Mercury did not give Serrano ample opportunity to be heard and
defend herself before she was dismissed.

NLRC: - reversed the Labor Arbiter and dismissed the complaint of Serrano for lack of merit.

The NLRC found Serrano dishonest in the performance of her duties as pharmacy assistant, which
involved the custody, handling or care and protection of Mercurys goods. The NLRC gave credence
to the testimonies of Mercurys witnesses and noted the fact that Serrano had already been charged
in court for qualified theft.

The NLRC further held that Serrano was not denied of due process before her dismissal. The NLRC
noted that that there was an in-house investigation prior to Serranos termination where all the
witnesses against her were presented. The NLRC ruled that it is "not the denial of the right to be
heard but the denial of the opportunity to be heard" that constitutes violation of due process.

CA: - The Court of Appeals reversed the decision of the NLRC and upheld the findings of the Labor
Arbiter. The Court of Appeals found that the evidence against Serrano were insubstantial and
unreliable to find her guilty of pocketing the P120 payment.

SC: - In dismissing an employee, the employer must serve the employee two notices: (1) the first to
inform the employee of the particular acts or omissions for which the employer seeks his dismissal,
and (2) the second to inform the employee of his employers decision to terminate him.23 The first
notice must state that the employer seeks dismissal for the act or omission charged against the
employee, otherwise, the notice does not comply with the rules.

In this case, Mercury failed to satisfy the two-notice requirement. Mercury admits it did not issue the
first notice. However, Mercury argues that if the purpose of the first notice was achieved despite the
absence of the first notice, and the employee was given a chance to air his side before his
termination, there is due process.

Finally Serrano was validly dismissed on the ground of loss of trust and confidence employment by
petitioner Mercury Drug Corporation on the ground of loss of trust and confidence. However, the
Court ORDERS petitioner Mercury Drug Corporation to pay respondent Zenaida G. Serrano the
amount of P30,000 as nominal damages for failure to comply fully with the notice requirement as
part of due process. No pronouncement as to costs.

ROMEO BASAY, et al
v.
HACIENDA

FACTS:

Respondents hired petitioners Romeo Basay in 1967 and Julian Literal in 1984, as
tractor operators, and petitioner Julian Abueva in 1989, as laborer, in the hacienda
devoted for sugar cane plantation.

On August 29, 2001, petitioners filed a complaint for illegal dismissal with monetary
claims against respondents. They alleged that sometime in July 2001, respondents
verbally informed them to stop working. Thereafter, they were not given work
assignments despite their status as regular employees. They alleged that their
termination was done in violation of their right to substantive and procedural due
process. Petitioners also claimed violation of Minimum Wage Law and non-payment
of overtime pay, premium pay for holiday and rest day, five days service incentive
leave pay, separation pay and 13th month pay. They also prayed for damages and
attorneys fees.

Respondents denied petitioners allegations. As regards Abueva, respondents

averred that he is not an employee but a mere contractor in the hacienda. According
to respondents, Abueva hired other men to perform weeding jobs and even entered
into contract with neighboring haciendas for similar jobs. Respondents alleged that
Abuevas name does not appear in the payroll, thus indicating that he is not an
employee. As such, there can be no dismissal to speak of, much less an illegal
dismissal.

With regard to petitioners Literal and Basay, respondents admitted that both are
regular employees, each receiving P130.00 per days work as evidenced by a Master
Voucher. However, respondents denied having illegally dismissed them and
asserted that they abandoned their jobs.

Respondents alleged that Literal was facing charges of misconduct, insubordination,

damaging and taking advantage of hacienda property, and unauthorized cultivation
of a portion of the hacienda. Literal was ordered to explain; instead of complying,
Literal did not anymore report for work. Instead, he filed a complaint for illegal
dismissal.

Respondents asserted that they sent a representative to convince petitioners to

return but to no avail. Respondents maintained that they have been religiously giving
13th month pay to their employees as evidenced by a voucher corresponding to
year 2000.

The Labor Arbiter exonerated respondents from the charge of illegal dismissal as
petitioners were the ones who did not report for work despite respondents call. The
Labor Arbiter, however, awarded petitioners claim of 13th month pay and salary
differentials.

Both parties sought recourse to the NLRC. Petitioners filed a Partial Appeal to the
Decision declaring respondents not guilty of illegal dismissal. They argued that there
was no proof of clear and deliberate intent to abandon their work. On the contrary,
their filing of an illegal dismissal case negates the intention to abandon. Petitioners
likewise alleged that respondents failed to observe procedural due process.

Respondents, for their part, filed a Memorandum on Appeal with respect to the
award of salary differentials and 13th month pay to petitioners. Respondents averred
that the Labor Arbiter erred in finding that petitioners are entitled to receive a
minimum wage ofP145.00/day instead of P130.00/day which is the minimum wage
rate for sugarcane workers in Negros Oriental per Wage Order No. ROVII-07.
Respondents likewise presented vouchers to prove payment of 13th month pay for
the years 1998 and 1999.

The NLRC affirmed the decision of the LA with modification that complainants Julian
Literal and Romeo Basay are not entitled to their claims for salary differentials and
13th month pay for lack of legal basis. However, respondents are ordered to pay
complainants Julian Literal and Romeo Basay proportionate 13th month pay
computed from January 1, 2001 to August 29, 2001.

The CA dismissed the petition and affirmed the findings of the NLRC. Hence, this
appeal.
ISSUE:

Whether petitioners were illegally dismissed and are entitled to their money claims.

HELD: Court of Appeals decision is partially sustained.

LABORLAW

We are not persuaded by petitioners contention that nothing was presented to

establish their intention of abandoning their work, or that the fact that they filed a
complaint for illegal dismissal negates the theory of abandonment.

It bears emphasizing that this case does not involve termination of employment on
the ground of abandonment. As earlier discussed, there is no evidence showing that
petitioners were actually dismissed. Petitioners filing of a complaint for illegal
dismissal, irrespective of whether reinstatement or separation pay was prayed for,
could not by itself be the sole consideration in determining whether they have been
illegally dismissed. All circumstances surrounding the alleged termination should
also be taken into account.

In Abad v. Roselle Cinema, G.R. No. 141371, March 24, 2006 we ruled that the
substantial evidence proffered by the employer that it had not terminated the
employee should not be ignored on the pretext that the employee would not have
filed the complaint for illegal dismissal if he had not really been dismissed. We held
that such non sequitur reasoning cannot take the place of the evidence of both the
employer and the employee.

Given that there was no dismissal to speak of, there can be no question as to the
legality or illegality thereof.

LABORLAW

Basay and Literal are entitled to salary differentials for two years and proportionate
13th month pay from January 1-29, 2001. Abueva is not an employee, thus not
entitled to his claims.

GRANTED

SOLID DEVELOPMENT CORPORATION WORKERS ASSOCIATION

(SDCWA-UWP) & EDGAR VILLENA vs SOLID DEVELOPMENT
CORPORATION

G.R. No. 165995

FACTS:
On March 29, 1999, private respondent Domingo P. Gaw, Jr., owner and president
of the company, caught Villena loafing during office hours. When he called
Villenas attention, the latter retorted, Bakit mo ako sinisita porke
mahirap lang kaming mga trabahador ninyo eh. Kayo talagang mga
intsek. Antonio Senador, Villenas supervisor, overheard this remark and reminded
Villena to respect Gaw. However, Villena replied, Ikaw, masyado kang sipsip sa
baboy na intsik.

Due to this incident, Gaw called a meeting of all roving doffers.

Thereafter, Villena was served an infraction report where he was charged with
disrespect to a superior officer and/or impolite/discourteous manner. He was also
required to submit a written explanation within 12 hours from receipt of the
report. In addition, the report also mentioned that Villena frequently violated
company rules, incurred absences without official leave and slept while on
duty. On May 3, 1999, he was dismissed for serious misconduct, loss of confidence
and gross habitual neglect of duty.

ISSUE: WON VILLENA WAS VALIDLY DISMISSED WITH DUE

PROCESS

RULLING:

LA: - Villena, the Labor Arbiter noted that the 12-hour period given to him was too
short. Villena should have also been subjected to a confrontational investigation
with the assistance of counsel since there were witnesses against him. Finally, the
Labor Arbiter found it unlikely for Villena to challenge Gaw the owner inside the
company premises.

NLRC: - Reversed the decision of the Labor Arbiter. The NLRC found that Villena
did not refute that he insulted Gaw, but he simply contended that the Sama-Samang
Salaysay had no evidentiary value for want of confrontation. The NLRC also ruled
that a formal trial-type hearing was unnecessary since Villena was given the
opportunity to explain his side.

CA: - AFFRIRMED THE NLRC

SC: - It is settled that to constitute a valid dismissal from employment, two requisites
must concur: (1) the dismissal must be for any of the causes provided for in Article
282 of the Labor Code; and (2) the employee must be afforded an opportunity to be
heard and to defend himself.

Villenas act of insulting Gaw, the companys owner and president, may be
considered, from a laymans perspective, as a serious misconduct. Moreover, it was
done in relation to the performance of his duties as would show him to be unfit to
continue working for the company.
The requirement of a hearing, on the other hand, is complied with as long as there
was an opportunity to be heard, and not necessarily that an actual hearing was
conducted

Finally the employer satisfied the procedural due process and validly dismissed
the employee. SC affirmed the CA.

*Illegality in the Manner of Dismissal

WENPHIL Corporation vs. NLRC - GR No. 80587 Case Digest

Wenphil - DOCTRINE
FACTS:

Private respondent Mallare had an altercation with a co-employee. The following day, the
Operations Manager served them memorandum of suspension and in the afternoon of that
same day, Mallare was dismissed from work. Labor Arbiter dismissed Mallares petition for
unfair labor practice for lack of merit. NLRC reversed the decision and ordered the
reinstatement of Mallare with full backwages of one year without qualification and deduction.

ISSUE:

Whether or not an employee dismissed for just cause but without due process be reinstated to
work.

RULING:

The basic requirement of due proves is that which hears before it condemns, proceeds upon
inquiry and renders judgment only after trial. The dismissal of an employee must be for a just
cause and after due process. 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 Mallare from employment. Petitioner must
indemnify the dismissed employee which depends on the facts of each case and the gravity of
the omission committed by the employer.

Where the private respondent appears to be of violent temper, caused trouble during office
hours and even defied his supervisors as they tried to pacify him, he should not be rewarded
with re-employment and backwages. The dismissal of the respondent should be maintained.

_________________________

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