Professional Documents
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Cases Termination
Cases Termination
HELD:
68 PHILIPPINE LONG DISTANCE TELEPHONE COMPANY vs. NLRC NO. Respondent had committed a misconduct. However, such
and MARILYN ABUCAY misconduct is not serious enough to warrant her dismissal from
(NO SEPARATION PAY FOR SERIOUS MISCONDUCT) employment under paragraph (a) of Article 282 of the Labor Code.
Misconduct is defined as improper or wrong conduct. It is the
FACTS: transgression of some established and definite rule of action, a forbidden
Marilyn Abucay, a traffic operator of the Philippine Long act, a dereliction of duty, willful in character and implies wrongful intent
Distance Telephone Company, was accused by two complainants of and not mere error of judgment. The misconduct to be serious within
having demanded and received from them the total amount of P3,800.00 the meaning of the act must be of such a grave and aggravated
in consideration of her promise to facilitate approval of their applications character and not merely trivial or unimportant. Such misconduct,
for telephone installation. Investigated and heard, she was found guilty however serious, must nevertheless be in connection with the work of the
as charged and accordingly separated from the service. She went to the employee to constitute just cause from his separation. In order to
Ministry of Labor and Employment claiming she had been illegally constitute serious misconduct which will warrant the dismissal of an
removed. The case was dismissed but she was granted with a separation employee under paragraph (a) of Article 282 of the Labor Code, it is not
pay. sufficient that the act or conduct complained of has violated some
established rules or policies. It is equally important and required that the
ISSUE: act or conduct must have been performed with wrongful intent. There
WON Abuca is entitled to separation pay. is no evidence to show that there was ulterior motive on the part of the
respondent when she decided to pass her students. Also, it was not
HELD: shown that respondent received immoral consideration when she did the
NO. The rule embodied in the Labor Code is that a person same. Respondent has maintained her stand that her decision to pass
dismissed for cause as defined therein is not entitled to separation pay. the concerned students was done out of humanitarian consideration. It
Separation pay shall be allowed as a measure of social justice only in is settled that a misconduct, which is not serious or grave, cannot be a
those instances where the employee is validly dismissed for causes other valid basis for dismissing an employee.
than serious misconduct or those reflecting on his moral character.
Where the reason for the valid dismissal is, for example, habitual
intoxication or an offense involving moral turpitude, like theft or illicit 70 EDEN LLAMAS vs OCEAN GATEWAY MARITIME AND
sexual relations with a fellow worker, the employer may not be required MANAGEMENT, INC.
to give the dismissed employee separation pay, or financial assistance, (GROSS MISCONDUCT; REQUISITES)
or whatever other name it is called, on the ground of social justice. In the
case at bar, the grant of separation pay in the case at bar is unjustified. FACTS:
Abuca has been dismissed for dishonesty and as she herself has Ocean Gateway Maritime and Management, Inc. hired Eden
impliedly admitted. The fact that she has worked with the PLDT for more Llamas as an accounting manager. Mary Anne T. Macaraig, respondents
than a decade, if it is to be considered at all, should be taken against her Chief Executive Officer, called Llamas’s attention to her failure, despite
as it reflects a regrettable lack of loyalty that she should have repeated demands, to accomplish the long overdue monthly and annual
strengthened instead of betraying during all of her 10 years of service company financial reports and to remit the companys contributions to the
with the company. If regarded as a justification for moderating the penalty Social Security System (SSS) and PhilHealth for November and
of dismissal, it will actually become a prize for disloyalty, perverting the December 2001. Subsequently or on February 20, 2002, Mary Anne
meaning of social justice and undermining the efforts of labor to cleanse again instructed petitioner to remit on that day or until the following day
its ranks of all undesirables. the companys contributions to the SSS and PhilHealth for January 2002.
By petitioners claim, she failed to comply with the instruction as money
for the purpose was not, as of February 20, 2002, credited to the
69 NLRC, ST. JUDE CATHOLIC SCHOOL, et.al., vs MA. company’s account at the bank. The following day, petitioner did not
BERNADETTE S. SALGARINO report for work as she was allegedly suffering from hypertension, hence,
(ALTERATION OF GRADE WITHOUT WRONGFUL INTENT NOT A she was again unable to remit the contributions. On February 26, 2002
SERIOUS MISCONDUCT) Mary Anne sent a memorandum to petitioner charging her with gross and
habitual neglect of duty and/or misconduct or willful disobedience and
FACTS: insubordination, detailing therein the bases of the charges, and requiring
Maria Bernadette A. Salgarino was employed by St. Jude her to submit a written explanation why she should not be penalized or
Catholic School as Mathematics teacher. She was directed to submit dismissed from employment. Complying with the show cause order,
herself to a panel of investigators and explain why she had allegedly petitioner claimed that the delay was due to the fact that she was
overloaded with work and undermanned. On account of the delay in the (2) WON petitioners are illegally dismissed?
remittance of those contributions, respondent was penalized in the
amount of P18,580.41 which it charged to petitioner via salary Held:
deductions. Later, the company sent Llamas notice of termination from (1) In order to resolve the issue of whether P&G is the
employment anchored on gross and habitual neglect of duty and/or employer of petitioners, it is necessary to first determine whether Promm-
serious misconduct or willful disobedience/insubordination Gem and SAPS are labor-only contractors or legitimate job contractors.
Clearly, the law and its implementing rules allow contracting
HELD: arrangements for the performance of specific jobs, works or services.
On petitioner’s declaration that I believe that I did something However, in order for such outsourcing to be valid, it must be made to
good for our office when our declaration of gross income submitted to an independent contractor because the current labor rules expressly
City Hall for the renewal of our municipal license was lower than our prohibit labor-only contracting.
actual gross income for which the office had paid a lower amount, the To emphasize, there is labor-only contracting when the
Court finds the same as betraying a streak of dishonesty in her. It contractor or sub-contractor merely recruits, supplies or places workers
partakes of serious misconduct. to perform a job, work or service for a principal and any of the following
xxx elements are present:
Misconduct has been defined as improper or wrong conduct. It 1. i) The contractor or subcontractor does not have substantial capital
is the transgression of some established and definite rule of action, or investment which relates to the job, work or service to be
a forbidden act, a dereliction of duty, willful in character, and performed and the employees recruited, supplied or placed by such
implies wrongful intent and not mere error of judgment. The contractor or subcontractor are performing activities which are
misconduct to be serious must be of such grave and aggravated directly related to the main business of the principal; or
character and not merely trivial and unimportant. Such misconduct, 1. ii) The contractor does not exercise the right to control over the
however serious, must nevertheless be in connection with the performance of the work of the contractual
employees work to constitute just cause for his separation. Thus,
for misconduct or improper behavior to be a just cause for Under the circumstances, Promm-Gem cannot be considered as a
dismissal, (a) it must be serious; (b) must relate to the performance labor-only contractor. We find that it is a legitimate independent
of the employees duties; and (c) must show that the employee has contractor.
become unfit to continue working for the employer. Indeed, an Considering that SAPS has no substantial capital or investment
employer may not be compelled to continue to employ such person and the workers it recruited are performing activities which are directly
whose continuance in the service would be patently inimical to his related to the principal business of P&G, we find that the former is
employers interest. For her act of understating the companys profits or engaged in “labor-only contracting”.
financial position was willful and not a mere error of judgment, committed
as it was in order to save costs, which to her warped mind, was Where labor-only contracting exists, the Labor Code itself
supposed to benefit respondent. It was not merely a violation of company establishes an employer-employee relationship between the employer
policy, but of the law itself, and put respondent at risk of being made and the employees of the labor-only contractor. The statute establishes
legally liable. Verily, it warrants her dismissal from employment as this relationship for a comprehensive purpose: to prevent a
respondents Accounting Manager, for as correctly ruled by the appellate circumvention of labor laws. The contractor is considered merely an
court, an employer cannot be compelled to retain in its employ someone agent of the principal employer and the latter is responsible to the
whose services is inimical to its interests. employees of the labor-only contractor as if such employees had been
directly employed by the principal employer.
71 Aliviado vs. Procter and Gamble (2) Yes. Misconduct has been defined as improper or wrong
(ERROR IN JUDGEMENT NOT A SERIOUS MISCONDUCT) conduct; the transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, unlawful in character implying wrongful intent
Facts: and not mere error of judgment. The misconduct to be serious must be of such
80 Petitioners worked as merchandisers of P&G. They all grave and aggravated character and not merely trivial and unimportant.[46] To be a
individually signed employment contracts with either Promm-Gem or just cause for dismissal, such misconduct (a) must be serious; (b) must relate to
SAPS. They were assigned at different outlets, supermarkets and stores the performance of the employees duties; and (c) must show that the employee
where they handled all the products of P&G. They received their wages has become unfit to continue working for the employer.[47] In the instant case,
from Promm-Gem or SAPS. petitioners-employees of Promm-Gem may have committed an error of judgment
SAPS and Promm-Gem imposed disciplinary measures on in claiming to be employees of P&G, but it cannot be said that they were
erring merchandisers for reasons such as habitual absenteeism, motivated by any wrongful intent in doing so. As such, we find them guilty of only
dishonesty or changing day-off without prior notice. simple misconduct for assailing the integrity of Promm-Gem as a legitimate and
To enhance consumer awareness and acceptance of the independent promotion firm. A misconduct which is not serious or grave, as that
products, P&G entered into contracts with Promm-Gem and SAPS for the existing in the instant case, cannot be a valid basis for dismissing an employee.
promotion and merchandising of its products.
In December 1991, petitioners filed a complaint against P&G NOTE:
for regularization, service incentive leave pay and other benefits with 1. Respondent filed MR, which was denied.
damages. 2. In its resolution, the Court upheld its decision declaring SAPS has
Due to the express admission of the petitioners, that they no substantial capital, therefore, labor-only contractor.
consider themselves as an employee of P&G and assailing the integrity
of the Company as legitimate and independent promotion firm, Promm-
Gem terminated their services for disloyalty assailing: serious misconduct 72 NORMAN YABUT, Petitioner, v. MANILA ELECTRIC COMPANY
and breach of trust. AND MANUEL M. LOPEZ, Respondents.
Issue: FACTS:
(1) WON P&G is the employer of petitioners?
This case stems from a complaint for illegal dismissal and Article 282 (a) provides that an employer may terminate an
monetary claims filed by herein petitioner Norman Yabut (Yabut) against employment because of an employee's serious misconduct, a cause that
respondents Manila Electric Company (Meralco) and Meralco officer was present in this case in view of the petitioner's violation of his
Manuel M. Lopez (Lopez). employer's code of conduct. Misconduct is defined as the transgression
The petitioner had worked with Meralco from February 1989 of some established and definite rule of action, a forbidden act, a
until his dismissal from employment on February 5, 2004. Meralco's dereliction of duty, willful in character, and implies wrongful intent and not
Inspection Office issued a memorandum informing it of an illegal service mere error in judgment. For serious misconduct to justify dismissal, the
connection at the petitioner's residence. Given this report, Meralco's following requisites must be present:
Head of Investigation-Litigation Office issued to the petitioner a notice of (a) it must be serious;
investigation. (b) it must relate to the performance of the employee's
Meralcos Litigation Investigation Office summarized the results duties; and
of Meralco's findings in a memorandum which indicated that Yabuts (c) it must show that the employee has become unfit to
electric service was disconnected for account delinquency. continue working for the employer.
Notwithstanding the disconnection and the fact that Meralcos service had The dismissal is also justified as the act imputed upon the
not been reconnected, Yabut's meter registered electric consumption. In petitioner qualifies as fraud or willful breach by the employee of the trust
view of these findings, respondent Meralco, issued a notice of dismissal reposed in him by his employer or duly authorized representative under
addressed to the petitioner. The notice cites violation of Section 7, Article 282 (c) of the Labor Code. While the petitioner contests this
paragraph 3 of Meralco's Company Code on Employee Discipline and ground by denying that his position is one of trust and confidence, it is
Article 282 (a), (c), (d) and (e) of the Labor Code of the Philippines as undisputed that at the time of his dismissal, he was holding a supervisory
bases for the dismissal. position after he rose from the ranks since commencement of his
Aggrieved by the decision of the management, Yabut filed with employment with Meralco. As a supervisor with duty and power that
the National Labor Relations Commission (NLRC) a complaint for illegal included testing of service meters and investigation of violations of
dismissal and money claims against Meralco and Lopez. contract of customers, his position can be treated as one of trust and
Labor Arbiter Antonio R. Macam rendered his Decision, confidence, requiring a high degree of honesty as compared with
declaring the petitioner illegally dismissed from the service and hence, ordinary rank-and-file employees.
entitled to reinstatement plus backwages and attorney's fees. We emphasize that dismissal of a dishonest employee is to the
NLRC rendered its Resolution dismissing the herein best interest not only of the management but also of labor. As a measure
respondents' appeal for lack of merit. of self-protection against acts inimical to its interest, a company has the
CA rendered the now assailed Decision reversing the rulings of right to dismiss its erring employees. An employer cannot be compelled
the NLRC. In finding the petitioner's dismissal lawful, the appellate court to continue employing an employee guilty of acts inimical to the
attributed unto Yabut authorship of the meter tampering and illegal use of employer's interest, justifying loss of confidence in him.
electricity acts which it regarded as serious misconduct. DENIED
Facts: 79 Kakampi and Its Members Panuelos vs. Kingspoint Express &
Petitioner Billy Realda was the former machine operator of Logistics
respondent New Age Graphics Inc. (DRIVER’S DISOBEDIENCE TO MANDATORY DRUG TESTING
The company dismissed him on the ground of repeated WITHOUT EXPLAINING THEMSELVES EVEN AFFORDED TO, IS
violations of company’s rules and regulations, namely: insubordination, WILLFUL; FAILURE TO OBSERVE DUE PROCESS = NOMINAL
deliberate slowdown of work, habitual tardiness, absence without official DAMAGES)
leave and inefficiency.
Furthermore, private respondent’s refusal to render overtime Facts:
work when required upon him, contributed to losses incurred by the Petitioners were former drivers of the respondent Kingspoint
petitioner. Express, a sole proprietorship under the name of Co which is engaged in
Nonetheless, while the CA recognized the existence of just the business of transporting goods. They were dismissed from service on
causes for petitioner’s dismissal, it found that the petitioner is entitled to January 20, 2006 on the grounds of serious misconduct, dishonesty, loss
nominal damages due to Graphics, Inc.’s failure to observe the of trust and confidence and commission of acts inimical to the interest of
procedural requirements of due process. Kingspoint Express.
Kingspoint Express issued separate notices to explain to the
Issue: individual petitioners on January 16, 2006 the charges of dishonesty,
Whether or not the petitioner exhibited willful disobedience to a serious misconduct and loss of confidence by filing with the NLRC false,
reasonable order from his employer thus making his dismissal valid malicious and fabricated cases against the company, and their allegedly
unwarranted refusal to undergo drug testing. They were required to
Held: submit their answer to the charges within forty-eight (48) hours from
Yes, the dismissal is valid but there is a lack of due process. receipt of the notices with a warning that failure to do so would mean
waiver of their answer. They were also placed under preventive
Ratio: suspension in the meantime.
In the present case, the company’s business is a printing press Petitioners failed to submit their written explanation within the
whose production schedule is sometimes flexible and varying. It is only stated period. Subsequently, Kingspoint Express issued to them separate
reasonable that workers are sometimes asked to render overtime work in yet uniformly worded notices on January 20, 2006, informing them of
order to meet production deadlines. their dismissal for the abovementioned charges based on the following
The petitioner’s arbitrary defiance to Graphics, Inc.’s order for acts: fabrication of baseless money claims against the company,
him to render overtime work constitutes willful disobedience. misleading fellow co-workers to sign the malicious complaint for money
Security of tenure is guaranteed by the Constitution but it is not claims against the company, refusal to undergo the company's general
an absolute rule and cannot be used as a legal shield by an employee drug test, and extorting money from co-workers to fund activities that
who has exhibited habitual tardiness and absenteeism, and willful they were never fully informed of. Also, petitioner Dacara was dismissed
disobedience. for consummating his sexual relations with Co’s helper inside her
In Merin v. National Labor Relations Commission, this Court residence and thus impregnating the help.
expounded on the principle of totality of infractions as follows: A complaint for illegal dismissal was subsequently filed,
The totality of infractions or the number of violations committed alleging that the charges against them were fabricated and that their
during the period of employment shall be considered in determining the dismissal was prompted by Kingspoint Express' aversion to their union
penalty to be imposed upon an erring employee. The offenses committed activities. The Labor Arbiter ruled in favor of the petitioners as the
by petitioner should not be taken singly and separately. Fitness for charges are purportedly mere unsubstantiated allegations. This was
continued employment cannot be compartmentalized into tight little affirmed by the NLRC on appeal but the latter reversed itself on a
cubicles of aspects of character, conduct and ability separate and subsequent MR filed by Kingspoint. The CA initially reversed the NLRC’s
independent of each other. While it may be true that petitioner was
ruling but on an MR, they too reversed their earlier ruling and favored 1993. There appeared to be a discrepancy in one of the deposits she
Kingspoint. Thus, this petition for certiorari before the SC. made where the amount indicated in the deposit slip and the money
actually received by the bank did not tally. A sum of P50, 000.00 was
Issue: missing and such loss was blamed exclusively on her by the private
WON the dismissal was valid. respondents, after considering the separate reports of the National
Bureau of Investigation and the Diaz Murillo Dalupan Auditing Firm. Prior
Ruling: to her dismissal, petitioner was suspended for a total of 90 days. Two
Yes, the dismissal was valid. It is fundamental that in order to months after, she then filed a complaint for illegal dismissal.
validly dismiss an employee, the employer is required to observe both
substantive and procedural due process — the termination of ISSUE:
employment must be based on a just or authorized cause and the WON petitioner was validly dismissed for gross negligence and
dismissal must be effected after due notice and hearing. for loss of trust and confidence
As to the substantive requirements of due process, the
employees' refusal to submit themselves to drug test is a just cause HELD:
for their dismissal. YES. Bearing in mind that the position of cashier is a highly
An employer may terminate an employment on the ground of sensitive position, requiring as it does the attributes of absolute trust and
serious misconduct or willful disobedience by the employee of the lawful honesty because of the temptations attendant to the daily handling of
orders of his employer or representative in connection with his work. money, petitioner's acts could not help but sow mistrust and loss of
Willful disobedience requires the concurrence of two elements: confidence on the part of respondent employer. The Court agrees with
(1) the employee's assailed conduct must have been willful, the Commission that the resulting breach of trust constitutes a valid
that is, characterized by a wrongful and perverse attitude; and, (2) the cause for the dismissal of petitioner.
order violated must have been reasonable, lawful, made known to the
employee, and must pertain to the duties which he had been engaged to 81 CHALLENGE SOCKS CORPORATION vs. COURT OF APPEALS
discharge. Both elements are present in this case. (HABITUAL ABSENTISM W/O LEAVE CONSTITUTE GROSS
As to the first element, the dismissed employees did not deny NEGLIGENCE)
their refusal to undergo drug testing nor did they explain their refusal.
The utter lack of reason or justification for their insubordination indicates FACTS:
that it was prompted by mere obstinacy, hence, willful and warranting of Elvie Buguat was hired by petitioner Challenge Socks
dismissal. As to the second element, the subject order is relevant in the Corporation as knitting operator. In the course of her employment, she
performance of their functions as drivers of Kingspoint Express. As the incurred absences and tardiness without prior approval and had been
NLRC correctly pointed out, drivers are indispensable to Kingspoint neglectful of her duties. On May 25, 1998, she failed to check the socks
Express' primary business of rendering door-to-door delivery services. It she was working on causing excess use of yarn and damage to the
is common knowledge that the use of dangerous drugs has adverse socks design. She was suspended for five days and warned that a
effects on driving abilities that may render the dismissed employees repetition of the same act would mean dismissal from the service.
incapable of performing their duties to Kingspoint Express and acting On February 2, 1999, she committed the same infraction and was given
against its interests, in addition to the threat they pose to the public. a warning. Despite the previous warnings, Buguat continued to be
The existence of a single just cause is enough to order their habitually absent and inattentive to her task. On March 1, 1999, she
dismissal and it is now inconsequential if the other charges against them again failed to properly count the bundle of socks assigned to her. Thus,
do not merit their dismissal from service. Nonetheless, while Kingspoint on March 2, 1999, petitioner terminated her services on grounds of
Express had reason to sever their employment relations, this Court finds habitual absenteeism without prior leave, tardiness and neglect of work.
its supposed observance of the requirements of procedural due process ISSUE:
pretentious. While Kingspoint Express required the dismissed employees WON Buguat was validly terminated.
to explain their refusal to submit to a drug test, the two (2) days afforded
to them to do so cannot qualify as "reasonable opportunity", which the HELD:
Court construed in King of Kings Transport, Inc. v. Mamacas a period of YES. One of the just causes for terminating an employment
at least five (5) calendar days from receipt of the notice. under Article 282 of the Labor Code is gross and habitual neglect by the
Thus, even if Kingspoint Express' defective attempt to comply employee of her duties. This cause includes gross inefficiency,
with procedural due process does not negate the existence of a just negligence and carelessness. Such just causes is derived from the right
cause for their dismissal, Kingspoint Express is still liable to indemnify of the employer to select and engage his employees. In the instant case,
the dismissed employees, with the exception of Panuelos, Dizon and there is no doubt that Buguat was habitually absent, tardy and neglectful
Dimabayao, who did not appeal the dismissal of their complaints, with of her duties. Habitual neglect implies repeated failure to perform ones
nominal damages in the amount of P30,000.00. duties for a period of time. Buguats repeated acts of absences without
leave and her frequent tardiness reflect her indifferent attitude to and lack
3. GROSS AND HABITUAL NEGLECT OF DUTIES of motivation in her work. Her repeated and habitual infractions,
committed despite several warnings, constitute gross misconduct.
80 EVELYN J. GARCIA vs. NLRC, HOLY TRINITY ACADEMY Habitual absenteeism without leave constitute gross negligence
(DISCREPANCY OF AMOUNT TENDERED) and is sufficient to justify termination of an employee. We find the
penalty of dismissal from the service reasonable and appropriate to
FACTS: Buguats infraction. Her repeated negligence is not tolerable; neither
Petitioner served as school cashier for private respondent Holy should it merit the penalty of suspension only. The record of an employee
Trinity Academy (the school) from June 1974 until her dismissal on is a relevant consideration in determining the penalty that should be
October 5, 1993 for alleged loss of confidence, gross negligence of duty, meted out. Buguat committed several infractions in the past and despite
gross inefficiency and dishonesty. As school cashier, she was the the warnings and suspension, she continued to display a neglectful
custodian of all school funds, including tuition fees, the petty cash and attitude towards her work. An employees’ past misconduct and p resent
canteen cash receipts. In her position paper, she alleged that her behavior must be taken together in determining the proper imposable
termination was brought about by an incident which occurred on June 15, penalty. The totality of infractions or the number of violations committed
during the period of employment shall be considered in determining the the patient and her niece did not press charges against her by reason of
penalty to be imposed upon an errin g employee. The offenses the subject incident.
committed by him should not be taken singly and separately but in their Neglect of duty, to be a ground for dismissal, must be both
totality. Fitness for continued employment cannot be compartmentalized gross and habitual. Gross negligence connotes want of care in the
into tight little cubicles of aspects of character, conduct, and ability performance of one's duties. Habitual neglect implies repeated failure to
separate and in dependent of each other. It is the totality, not the perform one's duties for a period of time, depending upon the
compartmentalization, of such company infractions that Buguat had circumstances. A single or isolated act of negligence does not constitute
consistently committed which justified her dismissal. a just cause for the dismissal of the employee.
Negligence is defined as the failure to exercise the standard of
82 HOSPITAL MANAGEMENT SERVICES, INC.MEDICAL CENTER care that a reasonably prudent person would have exercised in a similar
MANILA, petitioner, vs. HOSPITAL MANAGEMENT SERVICES, situation. The Court emphasizes that the nature of the business of a
INC.MEDICAL CENTER MANILA EMPLOYEES ASSOCIATION-AFW hospital requires a higher degree of caution and exacting standard of
and EDNA R. DE CASTRO, respondents. diligence in patient management and health care as what is involved are
(NEGLIGENCE; REQUISITES – GROSS & HABITUAL) lives of patients who seek urgent medical assistance. An act or omission
that falls short of the required degree of care and diligence amounts to
FACTS: serious misconduct which constitutes a sufficient ground for dismissal.
Respondent De Castro was a staff nurse at Medical Center However, in some cases, the Court had ruled that sanctioning
Manila. Calixijan, HRD Officer of Medical Center Manila issued a notice an erring employee with suspension would suffice as the extreme penalty
of termination upon respondent De Castro for alleged (1) negligence to of dismissal would be too harsh. Considering that this was the first
follow company policy on what to do with patient Rufina Causaren who offense of respondent De Castro in her nine (9) years of employment
fell from a hospital bed; (2) failure to record and refer the incident to the with petitioner hospital as a staff nurse without any previous derogatory
physician-on-duty allowing a significant lapse of time before reporting the record and, further, as her lapse was not characterized by any wrongful
incident; (3) deliberately instructing the staff to follow her version of the motive or deceitful conduct, the Court deems it appropriate that, instead
incident in order to cover up the lapse; and (4) negligence and of the harsh penalty of dismissal, she would be suspended for a period of
carelessness in carrying out her duty as staff nurse-on-duty when the six (6) months without pay, inclusive of the suspension for a period of 14
incident happened. days which she had earlier served. Thereafter, petitioner hospital should
Respondent De Castro, with the assistance of Medical Center reinstate respondent Edna R. De Castro to her former position without
Manila Employees Association-AFW, filed a Complaint for illegal loss of seniority rights, full backwages, inclusive of allowances and other
dismissal against petitioners with prayer for reinstatement and payment benefits, or their monetary equivalent, computed from the expiration of
of full backwages without loss of seniority rights, P20,000.00 moral her suspension of six (6) months up to the time of actual reinstatement.
damages, P10,000.00 exemplary damages, and 10% of the total
monetary award as attorney's fees. 83 NISSAN MOTORS PHILS., INC. vs. VICTORINO ANGELO
The Labor Arbiter ruled in favor of respondent De Castro, G.R. No. 164181, 14 September 2011
stating that although De Castro committed the act complained of, being (FAILURE TO TURNOVER FUNCTIONS TO SOMEONE CAPABLE OF
her first offense, the penalty to be meted should not be dismissal from PERFORMING THE VITAL TASKS EVEN BECAUSE OF A VALID
service, but merely 7 to 14 days suspension as the same was classified CAUSE CONSTITUTES GROSS NEGLECT)
as a less serious offense under the Employee's Handbook.
The NLRC reversed the decision of the Labor Arbiter, stating FACTS:
that respondent De Castro lacked diligence and prudence in carrying out Angelo was employed by Nissan as one of its payroll staff. His
her duty when, instead of personally checking on the condition of patient sick leave and vacation leave resulted in the non-
Causaren after she fell from the bed, she merely sent ward-clerk orientee preparation of the payroll for that particular period.
Guillergan to do the same in her behalf and for influencing her staff to He then received a Memorandum informing him that the compa
conceal the incident. ny is considering his dismissal from employment on the grounds of seriou
The CA reversed the NLRC's ruling and reinstated the Labor s misconduct, willful disobedience and gross neglect of duties. He was th
Arbiter's ruling. en placed on preventive suspension effective immediately. Unsatisfied wi
th his answer, they then issued a Notice of Termination.
ISSUE:
Whether the CA erred in affirming the illegal dismissal of ISSUE:
respondent De Castro? NO! Whether or not petitioner was validly dismissed? YES!
HELD: RULING:
Article 282 (b) of the Labor Code provides that an employer SERIOUS MISCONDUCT - This Court found evidence to support the
may terminate an employment for gross and habitual neglect by the allegation of serious misconduct or insubordination. Petitioner claims that
employee of his duties. The CA ruled that per the Employees Handbook the language used by respondent in his Letter-Explanation is akin to a
of petitioner hospital, respondent De Castros infraction is classified as a manifest refusal to cooperate with company officers, and resorted to
less serious offense for "commission of negligent acts during working conduct which smacks of outright disrespect and willful defiance of
time" as set forth in subparagraph 11, paragraph 3 (B) of Chapter XI[10] authority or insubordination.
thereof. Petitioners anchor respondent De Castros termination of
employment on the ground of serious misconduct for failure to personally WILLFUL DISOBEDIENCE - This allegation of willful disobedience can
attend to patient Causaren who fell from the bed as she was trying to still be adduced and proven from the same Letter-Explanation cited
reach for the bedpan. Based on her evaluation of the situation, earlier. One of the fundamental duties of an employee is to obey all
respondent De Castro saw no necessity to record in the chart of patient reasonable rules, orders and instructions of the employer. Disobedience,
Causaren the fact that she fell from the bed as the patient did not suffer to be a just cause for termination, must be willful or intentional, willfulness
any injury and her vital signs were normal. She surmised that the incident being characterized by a wrongful and perverse mental attitude rendering
was not of a magnitude that would require medical intervention as even the employees act inconsistent with proper subordination. A willful or
intentional disobedience of such rule, order or instruction justifies
dismissal only where such rule, order or instruction is (1) reasonable and Fraud or willful breach by the employee of the trust reposed in him by his
lawful, (2) sufficiently known to the employee, and (3) connected with the employer or duly authorized representative; (d) Commission of a crime or
duties which the employee has been engaged to discharge. offense by the employee against the person of his employer or any
immediate family member of his family or his duly authorized
HABITUAL NEGLIGENCE - the NLRC correctly ruled that the latter's representative; and (e) Other causes analogous to the foregoing. Further,
failure to turn over his functions to someone capable of performing the due process requires that employers follow the procedure set by the
vital tasks which he could not effectively perform or undertake because of Labor Code. Under Art. 277, workers may be dismissed only for a just
his heart ailment or condition constitutes gross neglect. cause and enjoy the right of due process which includes notice and the
ample opportunity to be heard and to defend his or her side.
LETTER: In this case, Padao was dismissed by PNB for gross and
“Again, it's not negligence on my part and I'm not alone to be blamed. It's habitual neglect of duties under Article 282 (b) of the Labor Code. Gross
negligence on your part [Perla Go] and A.A. Del Rosario kasi, noong negligence connotes want of care in the performance of ones duties,
pang April 1999 ay alam ninyo na hindi ako ang dapat may while habitual neglect implies repeated failure to perform ones duties for
responsibilidad ng payroll kundi ang Section Head eh bakit hindi ninyo a period of time, depending on the circumstances. Padao was accused of
pinahawak sa Section Head noon pa. Pati kaming dalawa sa payroll, having presented a fraudulently positive evaluation of the business, credit
kasama ko si Thelma.Tinanggal nyo si Thelma. Hindi nyo ba naisip na standing/rating and financial capability 13 loan applicants.
kailangan dalawa ang tao sa payroll para pag absent ang isa ay may The role that a credit investigator plays in the conduct of a
gagawa. Dapat noon nyo pa naisip iyan. Ang tagal kong gumawa ng banks business cannot be overestimated. The amount of loans to be
trabahong hindi ko naman dapat ginagawa.” extended by a bank depends upon the report of the credit investigator on
the collateral being offered. If a loan is not fairly secured, the bank is at
84 PHILIPPINE NATIONAL BANK, Petitioner, v. DAN PADAO, the mercy of the borrower who may just opt to have the collateral
Respondent. foreclosed. If the scheme is repeated a hundredfold, it may lead to the
(13 FRADULENT POSITIVE EVALUATION OF BUSINESSES BY A collapse of the bank.
CREDIT INVESTIGATOR CONSTITUTES GROSS AND HABITUAL Padao's repeated failure to discharge his duties as a credit
NEGLECT OF DUTIES) investigator of the bank amounted to gross and habitual neglect of duties
under Article 282 (b) of the Labor Code. He not only failed to perform
FACTS: what he was employed to do, but also did so repetitively and habitually,
On August 21, 1981, Padao was hired by PNB as a clerk at its causing millions of pesos in damage to PNB. Thus, PNB acted within the
Dipolog City Branch. He was later designated as a credit investigator in bounds of the law by meting out the penalty of dismissal, which it
an acting capacity on November 9, 1993. He was ultimately promoted to deemed appropriate given the circumstances.
the position of Loan and Credit Officer IV. The CA was correct in stating that when the violation of
In 1994, PNB became embroiled in a scandal involving "behest company policy or breach of company rules and regulations is tolerated
loans" as anomalous loans were being granted by its officers. In line with by management, it cannot serve as a basis for termination. Such ruling,
this, Padao was administratively charged with Dishonesty, Grave however, does not apply here. The principle only applies when the
Misconduct, Gross Neglect of Duty, Conduct Prejudicial to the Best breach or violation is one which neither amounts to nor involves fraud or
Interest of the Service, and violation of R.A. No. 3019 (Anti-Graft and illegal activities. In such a case, one cannot evade liability or culpability
Corrupt Practices Act). The case against Padao was grounded on his based on obedience to the corporate chain of command.
having allegedly presented a deceptively positive status of the business, Padao, in affixing his signature on the fraudulent reports,
credit standing/rating and financial capability of 13 loan applicants. After attested to the falsehoods contained therein. Moreover, by doing so, he
due investigation, PNB found Padao guilty of gross and habitual neglect repeatedly failed to perform his duties as a credit investigator.
of duty and ordered him dismissed from the bank. Padao appealed to the
banks Board of Directors. Velasco, Padaos colleague, was also held 85 MANSION PRINTING CENTER and CLEMENT CHENG,
guilty of the offenses charged, and was similarly meted the penalty of Petitioners, v. DIOSDADO BITARA, JR., Respondent.
dismissal. Her motion for reconsideration, however, was later granted by (GROSS AND HABITUAL ABSENTISM = GROSS AND HABITUAL
the bank, and she was reinstated. NEGLECT OF DUTIES)
ISSUES FACTS:
I. Whether the position of a credit investigator is one imbued Petitioners engaged the services of respondent as a helper
with the trust and confidence of the employer (kargador). Respondent was later promoted as the company’s sole driver
II. Whether the act of falsifying the credit and appraisal reports tasked to pick-up raw materials for the printing business, collect account
and that of affixing ones signature in a false report by another is one and receivables and deliver the products to the clients within the delivery
the same degree of misconduct which warrants the same penalty schedules.
Petitioners aver that the timely delivery of the products to the
HELD: clients is one of the foremost considerations material to the operation of
While it is an employer’s basic right to freely select or the business. It being so, they closely monitored the attendance of
discharge its employees, if only as a measure of self-protection respondent. They noted his habitual tardiness and absenteeism.
against acts inimical to its interest, the law sets the valid grounds Thus, petitioners issued a Memorandum requiring respondent
for termination as well as the proper procedure to be followed when to submit a written explanation why no administrative sanction should be
terminating the services of an employee. imposed on him for his habitual tardiness.
Thus, in cases of regular employment, the employer is Despite respondents undertaking to report on time, however,
prohibited from terminating the services of an employee except for a just he continued to disregard attendance policies.
or authorized cause. Such just causes for which an employer may Consequently, Davis Cheng, General Manager of the company
terminate an employee are enumerated in Article 282 of the Labor Code: and son of petitioner Cheng, issued another Memorandum (Notice to
(a) serious misconduct or willful disobedience by the employee of the Explain) requiring respondent to explain why his services should not be
lawful orders of his employer or representative in connection with his terminated. He personally handed the Notice to Explain to respondent
work; (b) Gross and habitual neglect by the employee of his duties; (c) but the latter, after reading the directive, refused to acknowledge receipt
thereof. He did not submit any explanation and, thereafter, never We cannot simply tolerate injustice to employers if only to
reported for work. protect the welfare of undeserving employees. As aptly put by then
Davis Cheng personally served another Memorandum (Notice Associate Justice Leonardo A. Quisumbing:
of Termination) upon him informing him that the company found him Needless to say, so irresponsible an employee like petitioner
grossly negligent of his duties, for which reason, his services were does not deserve a place in the workplace, and it is within the
terminated. management’s prerogative xxx to terminate his employment. Even as the
On even date, respondent met with the management law is solicitous of the welfare of employees, it must also protect the
requesting for reconsideration of his termination from the service. rights of an employer to exercise what are clearly management
However, after hearing his position, the management decided to prerogatives. As long as the company’s exercise of those rights and
implement the Memorandum. Nevertheless, the management, out of prerogative is in good faith to advance its interest and not for the purpose
generosity, offered respondent financial assistance in the amount of of defeating or circumventing the rights of employees under the laws or
P6,110.00 equivalent to his one month salary. Respondent demanded valid agreements, such exercise will be upheld.
that he be given the amount equivalent to two (2) months salary but the Procedural due process entails compliance with the two-notice
management declined as it believed it would, in effect, reward rule in dismissing an employee, to wit: (1) the employer must inform the
respondent for being negligent of his duties. employee of the specific acts or omissions for which his dismissal is
Respondent filed a complaint for illegal dismissal against the sought; and (2) after the employee has been given the opportunity to be
petitioners before the Labor Arbiter. heard, the employer must inform him of the decision to terminate his
Labor Arbiter dismissed the complaint for lack of merit. employment.
On appeal to the National Labor Relations Commission, the
findings of the Labor Arbiter was AFFIRMED en toto. 4. FRAUD
Before the Court of Appeals, respondent sought the annulment
of the Commissions Resolution on the ground that they were rendered 86 SAN MIGUEL CORPORATION vs. NLRC
with grave abuse of discretion and/or without or in excess of jurisdiction.
The Court of Appeals found for the respondent and reversed FACTS:
the findings of the Commission. The complainants were former security guards of the petitioner
which dismissed them for falsification of their time cards. They made
ISSUE: Whether or not respondent is illegally dismissed? NO! false entries in their time cards showing that they reported for work on
February 19 and 20, 1983 when the truth was that they went on a
HELD: hunting tap to San Juan, Batangas, with their chief Major Martin
In order to validly dismiss an employee, the employer is Asaytuno, then head of the Administrative Services Department of the
required to observe both substantive and procedural aspects the Security Directorate of the petitioner. Besides the falsification of the
termination of employment must be based on a just or authorized cause entries for February 19 and 20, 1983 in their time cards, complainant Mi
of dismissal and the dismissal must be effected after due notice and solas was caught red handed by Security Guard Romeo Martin at 7:45
hearing. A.M. on March 2, 1983 punching in not only his own time card but also
The imputed absence and tardiness of the complainant are the time cards of Delen and Querubin. Seeing Misolas in a tight fix,
documented. He faltered on his attendance 38 times of the 66 working Querubin rushed to the bundy clock and punched in a time card (which
days. His last absences on 11, 13, 14, 15 and 16 March 2000 were turned out to be the card of one Rodrigo de Castro) to save Misolas and
undertaken without even notice/permission from management. These to make it appear to Martin that he (Querubin), punched in his own time
attendance delinquencies may be characterized as habitual and are card. Hence, he was dismissed.
sufficient justifications to terminate the complainant’s employment.
On this score Valiao v. Court of Appealsis instructive: ISSUE: WON complainants were validly terminated.
xxx It bears stressing that petitioners absences and tardiness
were not isolated incidents but manifested a pattern of habituality. xxx HELD:
The totality of infractions or the number of violations committed during YES. The falsification and fraud which the private respondents
the period of employment shall be considered in determining the penalty committed against their employer were inexcusable. Major Asaytuno's
to be imposed upon an erring employee. The offenses committed by him initials on the false entries in their time cards did not purge the
should not be taken singly and separately but in their totality. Fitness for documents of their falsity. Their acts constituted dishonesty and serious
continued employment cannot be compartmentalized into tight little misconduct, lawful grounds for their dismissal under Art. 282, sub-pars.
cubicles of aspects of character, conduct, and ability separate and (a) and (c), of the Labor Code, which provides: ART. 282. Termination by
independent of each other. employer. An employer may terminate an employment for any of the
In Valiao,we defined gross negligence as want of care in the following just causes: (a) Serious misconduct or willful disobedience
performance of ones duties and habitual neglect as repeated failure to by the employee of the lawful orders of his employer or representative in
perform ones duties for a period of time, depending upon the connection with his work. xxx xxx xxx (c) Fraud or willful breach by the
circumstances.51 These are not overly technical terms, which, in the first employee of the trust reposed in him by his employer or duly authorized
place, are expressly sanctioned by the Labor Code of the Philippines, to representative.
wit:
ART. 282.Termination by employer.- An employer may 5. WILLFUL BREACH OF TRUST & LOSS OF CONFIDENCE
terminate an employment for any of the following causes:
(a) xxx 87 NATIONAL SUGAR REFINERIES CORPORATION (NASUREFCO)
(b)Gross and habitual neglect by the employee of his duties; vs. NLRC and SUSAN PABIONA
Xxx (LOSS OF CONFIDENCE)
Clearly, even in the absence of a written company rule defining
gross and habitual neglect of duties, respondents omissions qualify as FACTS:
such warranting his dismissal from the service. Pabiona was appointed as Sugar Accountant-Bookkeeper. She
was tasked to maintain records of all transactions pertaining to the Raw
and Refined Sugar Exchange Program, validate Raw Sugar Quedans
submitted by Exchange participants prior to issuance of the Refined that the Company was terminating his employment for loss of confidence
Sugar Delivery Orders and prepare and issue Refined Sugar Delivery and breach of trust, effective as of the time he was placed under
Orders only after validation procedures have been properly complied preventive suspension.
with. When the books of NASUREFCO were audited in 1990 anomalous
and irregular transactions were uncovered in the Raw Sugar Movement ISSUE:
Report. NASUREFCO found Pabionas written explanation flawed, WON Falguera’s termination was valid.
unsatisfactory. Hence, NASUREFCO charged Pabiona with several
violations of accounting policies. A formal investigation was conducted HELD:
thereafter, NASUREFCO terminated the services of Pabiona for willful YES. It is not disputed that the petitioner is a rank-and-file
violation of company policies, gross and habitual neglect of duties, and employee. Ordinarily, a rank and-file employee is not reposed with a high
willful breach of trust. Complainant herself admits that she may be degree of trust and confidence expected of a supervisory or managerial
negligent yet it was not gross and habitual; that her acts in violating employee. It must, however, be noted that the petitioner served as a
company policies as basis for her dismissal may be viewed by warehouseman and was in charge of the custody, safekeeping, and
respondent as breach of trust, yet the same is not wilful. release of the Company's materials. The nature of his work and the
scope and special character of his duties, therefore, involved utmost trust
ISSUE: and confidence. Among the just causes or valid grounds for termination
WON the dismissal of Pabiona was for a just and valid cause of employment by the employer is "fraud or willful breach by the
employee of the trust reposed in him by his employer or duly authorized
HELD: representative." Ordinary breach will not suffice; it must be willful
YES. The preparation and validation of documents for and without justifiable excuse; there must be basis therefor, and it
purposes of withdrawing refined sugar from NASUREFCO's warehouse must be supported by substantial evidence and not merely by the
involve trust and confidence. It is only through the issuance by Pabiona whims or caprice of the employer. In the instant case, we find no difficulty
of a Refined Sugar Delivery Order that the planters could avail of the in agreeing with the public respondents that the petitioner committed
refined sugar of NASUREFCO. The rule is settled that if the employee willful breach of the trust and confidence reposed in him by the
is guilty of breach of trust or that his employer has justifiable Company.
reason to distrust him, the labor tribunal cannot justly deny the
freedom and authority to dismiss his employee. The basic premise
for dismissal on the ground of loss of confidence is that the employee 89 JAMES BEN L. JERUSALEM, Petitioner, v. KEPPEL MONTE
concerned holds a position of trust and confidence. It is the breach of this BANK, HOE ENG HOCK, SUNNY YAP and JOSEFINA PICART,
trust that results in the employer’s loss of confidence in the employee. Respondents.
Under Art. 282 of the Labor Code, as amended, loss of confidence would (BREACH OF TRUST; REQUISITES)
be the result of fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized representative, a just FACTS:
cause for termination. It cannot be gainsaid that the breach of trust must James Ben L. Jerusalem (James) was employed by Keppel
be related to the performance of the employee's functions. The Monte Bank (Keppel) as Assistant Vice-President and was later was
infractions committed by Pabiona were directly within the purview of her assigned as Head of the newly created VISA Credit Card Department.
job description. It was only through her active participation and The bank subsequently re-organized the said Department and reduced it
involvement in the illicit infringement of the companys accounting to a mere unit. Afterwards, James, carrying the same rank, was
procedures that some clients of NASUREFCO were able to withdraw reassigned as Head of the Marketing and Operations of the Jewelry
refined sugar in larger quantities to the prejudice of the latter. Department.
James received from Jorge Javier (Jorge) a sealed envelope
said to be containing VISA Card application forms. Jorge is a Keppel
88 ALEX A. FALGUERA vs. NLRC, PHILIPPINE REFINING CO. (PRC) Visa Card Holder since December 1998. James immediately handed
or UNILEVER-PRC, and JESUS over the envelope with accomplished application forms to the VISA
JAVELONA Credit Card Unit. All in all, the VISA credit card applications referred by
(WAREHOUSEMAN; SUBSTANTIAL EVIDENCE) Jorge which James forwarded to the VISA Credit Card Unit numbered
67, all of which were subsequently approved. As it turned out, all the
FACTS: accounts under these approved applications became past due.
Falguera was an employee of Philippine Refining Co., Inc., now James received a Notice to Explain why no disciplinary action
known as Unilever Philippines (PRC), Inc. One day, the assistant should be taken against him for referring/endorsing fictitious VISA card
soapery engineer of the Company observed an unusual increase in the applicants. He explained that he had no participation in the processing of
reported requisitions by the soapery department of Parker packing the VISA card applications since he was no longer connected with the
materials for the month of June. Upon his examination of the green VISA Credit Card Unit at the time of such transactions. He explained that
copies of the MRs of the soapery department, he discovered that he can only endorse the applications referred by Jorge to the VISA Credit
P27,025.00 worth of Parker packing materials chargeable to his Card Unit because he was already transferred to Jewelry Department, as
department could not be accounted for and were not reflected in the said Head. However, he was issued a Notice of Termination informing him
copies. He therefore sought the original white copies of the MRs from the that he was found guilty of breach of trust and confidence for knowingly
accounting department. A meticulous scrutiny disclosed that while the and maliciously referring, endorsing and vouching for VISA card
original MRs contained entries of the packing items worth P27,050.00, applicants who later turned out to be impostors resulting in financial loss
they, however, showed alterations, super impositions, and erasures. to Keppel. Thus, the filing of a complaint foe illegal dismissal.
Pending investigation, the petitioner was placed under preventive The LA found Keppel guilty of illegal dismissal and ordered the
suspension pending the investigation of the anomaly. Upon investigation, payment of backwages from the time of his illegal termination and in lieu
it found that eight original MRs were tampered by two engineering of reinstatement, a separation pay should be given. The NLRC affirmed
storemen, in particular, Falguera and Felipe Viado. The latter admitted the LA’s decision. However, the CA reversed and set aside the said
having tampered one MR and offered to testify against the petitioner. decision and dismissed the complaint.
Thereafter, Falguera received a letter signed by Javelona informing him
lawyer (Atty. Edmundo V. Buensuceso) and a military man (one Col.
ISSUE: Flordeliza). After the meeting, the bank found no reason to reconsider
Whether Keppel legally terminated James’s employment on the and reiterated its decision to dismiss Lopez.[8]
ground of willful breach of trust and confidence? NO! Lopez filed a complaint for illegal dismissal and money claims
against the bank, Bosano and Tong.
HELD:
Article 282(c) of the Labor Code prescribes two separate and The Compulsory Arbitration Proceedings
distinct grounds for termination of employment, namely: (1) fraud; or (2) Lopez alleged before the labor arbiter that he issued the POs
willful breach by the employee of the trust reposed in him by his as part of his strategy to enhance the bank's business, in line with his
employer or duly authorized representative. In order to constitute a just duty as branch manager to promote the growth of the bank. He claimed
cause for dismissal, the act complained of must be ‘work-related’ such that the bank honored the first PO for P1.8M from which the bank derived
as would show the employee concerned to be unfit to continue working an income of P142,000.00. He added that the second PO did not
for the employer. materialize because Mr. James Puyat Concepcion, a Hertz incorporator
There are 2 requisites for dismissal on the ground of loss of and director who opened the Hertz account, stopped depositing with the
trust and confidence, these are: 1) employee concerned must be holding bank because of the negative credit rating he received from the bank's
a position of trust and confidence; and 2) there must be an act that would credit committee. Allegedly, the committee discovered that James Puyat
justify the loss of trust and confidence. In the case at hand, the first Concepcion had several pending court cases.
requisite is present for James held a position of trust and confidence as For its part, the bank denied approving the first PO, arguing
Assistant Vice-President of the Jewelry Department. As for the second that Lopez did not have the authority to issue the POs for the Hertz
requisite, the court ruled that Keppel’s evidence against James fails to account as there was a standing advice that no Hertz loan application
clearly and convincingly establish a willful breach of trust. was to be approved. It stressed that Lopez committed a serious violation
From the findings of both the Labor Arbiter and the NLRC it is of company rules when he issued the POs.
clear that James did nothing wrong when he handed over to Marciana, In a decision dated April 28, 2004,[9] Labor Arbiter Cesar D.
the unit head, the envelope containing the applications of persons under Sideño ruled that Lopez was illegally dismissed. Accordingly, the labor
the referred accounts of Jorge who were later found to be fictitious. As arbiter ordered Lopez's immediate reinstatement, and awarded him
the records now stand, James was no longer connected with the VISA backwages of P392,000.00, moral and exemplary damages of P8M, and
Credit Card Unit when the 67 applications for VISA card were approved. P550,000.00 -- the purchase price of a Toyota Revo which Lopez
At such time, he was already the Head of the Marketing and Operations allegedly brought over from his stint with Global Bank (now Metrobank).
of the Jewelry Department. His act therefore of forwarding the already The labor arbiter found that contrary to the bank's claim, the evidence
accomplished applications to the VISA Credit Card Unit is proper as he is showed that Lopez had been issuing POs which the bank had paid,
not in any position to act on them. The processing and verification of the including the first of the two POs that led to his dismissal.[10]
identities of the applicants would have been done by the proper On appeal by the bank, the National Labor Relations
department, which is the VISA Credit Card Unit. Therefore, it is Commission (NLRC) rendered a decision on October 11,
incumbent upon Marciana as Unit Head to have performed her duties. As 2005[11] reversing the labor arbiter's ruling. It dismissed the complaint for
correctly observed by the Labor Arbiter, Keppel had gone too far in lack of merit. The NLRC found merit in the bank's submission that by
blaming James for the shortcomings and imprudence of Marciana. The issuing the questioned POs without authority and against the bank's
invocation of Keppel of the loss of trust and confidence as ground for express orders, Lopez thereby committed a willful disobedience against
James’s termination has therefore no basis at all. Thus, the Court his superiors -- a sufficient basis for the bank to lose its trust and
declared that such dismissal based on the ground of loss of trust and confidence in him as branch manager. It thus found that Lopez had been
confidence was illegal. dismissed for cause after the observance of due process. Lopez moved
for reconsideration, but the NLRC denied the motion in its resolution of
90 Elmer Lopez vs Keppel Bank Philippines, Inc. January 25, 2006.[12] Lopez sought relief from the CA through a petition
(BRANCH MANAGER OF BANK ISSUING CREDIT DESPITE for certiorari, charging the NLRC with grave abuse of discretion for
EXPRESSLY DISALLOWED) setting aside the labor arbiter's decision.
FACTS:
Bea was hired as Senior Head Staff Nurse by Elbualy 114 Realda vs. New Age Graphics Inc., G.R. No. 192190, April 25,
Group/Su ltan Qaboos University Hospital (SQUH), the principal 2012
employer through its placement agency in the Philippines, Eastern (TOTALITY OF INFRACTIONS)
Overseas Employment Center, Inc. (Eastern). Her contractual
employment was for two (2) years. Beas placement with SQUH was Facts:
subject to a three-(3) month probationary period during said contractual Petitioner Realda was dismissed by Respondent New Age
employment. Graphics Inc. for unjustified refusal to render overtime work, unexplained
Beas probationary status ended on May 1992 but she still failure to observe prescribed work standards, habitual tardiness and
continued being in the employ of SQUH. chronic absenteeism despite warning and non-compliance with the
She, like all other employees of the hospital, was also directive for him to explain his numerous unauthorized absences. The
periodically subjected to performance evaluation. After an alleged poor Court of Appeals recognized the existence of just causes for petitioner’s
evaluation of Beas performance as a nurse, she was transferred to the dismissal, however, the appellate court found that the respondent failed
Neo-Natal Unit and her performance was supposedly under observation.
to observe the procedural requirements of due process and, as a Pabayo were subjected to a physical examination where the results
consequence, awarded the petitioner P5,000.00 as Nominal Damages. showed that they were positive of drugs. They were also brought to the
Issues: security office of PAL where they executed written confessions without
WoN the dismissal based on the grounds cited constituted just the benefit of counsel. Roquero and Pabayo then received a notice of
causes; and WoN the amount awarded as Nominal Damages of administrative charge] for violating the PAL Code of Discipline. They
P5,000.00 was valid were required to answer the charges and were placed under
preventive suspension.
Ruling: Eventually, they were dismissed by PAL. Thus, they filed a
First, the petitioner’s arbitrary defiance to Graphics, Inc.’s case for illegal dismissal.
order for him to render overtime work constitutes willful disobedience.
Taking this in conjunction with his inclination to absent himself and to HELD:
report late for work despite being previously penalized, the CA correctly Roquero is guilty of serious misconduct for possessing and
ruled that the petitioner is indeed utterly defiant of the lawful orders and using shabu. He violated Chapter 2, Article VII, section 4 of the PAL
the reasonable work standards prescribed by his employer. Code of Discipline which states: Any employee who, while on company
Second, the petitioner’s failure to observe Graphics, Inc.’s premises or on duty, takes or is under the influence of prohibited or
work standards constitutes inefficiency that is a valid cause for dismissal. controlled drugs, or hallucinogenic substances or narcotics shall be
Failure to observe prescribed standards of work, or to fulfill reasonable dismissed. Serious misconduct is defined as the transgression of some
work assignments due to inefficiency may constitute just cause for established and definite rule of action, a forbidden act, a dereliction of
dismissal. Such inefficiency is understood to mean failure to attain work duty, willful in character, and implies wrongful intent and not mere error in
goals or work quotas, either by failing to complete the same within the judgment. For serious misconduct to warrant the dismissal of an
alloted reasonable period, or by producing unsatisfactory results. As the employee, it (1) must be serious; (2) must relate to the performance of
operator of Graphics, Inc.’s printer, he is mandated to check whether the the employees duty; and (3) must show that the employee has become
colors that would be printed are in accordance with the client’s unfit to continue working for the employer.
specifications and for him to do so, he must consult the General Manager It is of public knowledge that drugs can damage the mental faculties of
and the color guide usedMby Graphics, Inc. before making a full run. the user. Roquero was tasked with the repair and maintenance of PALs
Unfortunately, he failed to observe this simple procedure and proceeded airplanes. He cannot discharge that duty if he is a drug user. His failure
to print without making sure that the colors were at par with the client’s to do his job can mean great loss of lives and properties. Hence, even if
demands. This resulted to delays in the delivery of output, client he was instigated to take drugs he has no right to be reinstated to his
dissatisfaction, and additional costs on Graphics, Inc.’s part. position. He took the drugs fully knowing that he was on duty and more
While a penalty in the form of suspension had already been so that it is prohibited by company rules.
imposed on the petitioner for his habitual tardiness and repeated Instigation is only a defense against criminal liability. It cannot
absenteeism, the principle of “totality of infractions” sanctions the act be used as a shield against dismissal from employment especially when
of Graphics, Inc. of considering such previous infractions in decreeing the position involves the safety of human lives.
dismissal as the proper penalty for his tardiness and unauthorized
absences incurred afterwards, in addition to his refusal to render NOTE: Although both Roquero and Pabayo filed the illegal dismissal
overtime work and conform to the prescribed work standards. case, only Roquero brought this petition for review because Pabayo
This Court cannot likewise agree to the petitioner’s attempt to agreed to monetarily settle with PAL during the pendency of the case.
brush aside his refusal to render overtime work as inconsequential when
Graphics, Inc.’s order for him to do so is justified by Graphics, Inc.’s F. CLOSURE OF ESTABLISHMENTS AND REDUCTION OF
contractual commitments to its clients. Such an order is legal under PERSONNEL; AUTHORIZED CAUSES
Article 89 of the Labor Code and the petitioner’s unexplained refusal to A. INSTALLATION OF LABOR SAVING DEVICES
obey is insubordination that merits dismissal from service.
Nonetheless, while the CA finding that the petitioner is entitled 116 Philippine sheet metal workers' union vs the Court of Industrial
to nominal damages as his right to procedural due process was not Relations, Can Company and Liberal Labor Union
respected despite the presence of just causes for his dismissal is
affirmed, this Court finds the CA to have erred in fixing the amount that FACTS:
the Company is liable to pay. The CA should have taken cognizance of The respondent company filed a motion, in the case pending in
the numerous cases decided by this Court where the amount of nominal the court of industrial relations, asking for authority to lay off at least 15
damages was fixed at P30,000.00 if the dismissal was for a just cause. workers in its can department on the ground that the installation and
operation of nine new labor-saving machines in the said department had
F. DRUG USE rendered the services of the said workers unnecessary. Petitioner
alleged that there was more than sufficient work in the company to keep
115 ALEJANDRO ROQUERO vs. PHILIPPINE AIRLINES, INC. all its workers busy.
FACTS: ISSUE:
Roquero, along with Rene Pabayo, were ground equipment WON the laying off of the 15 employees valid
mechanics of respondent Philippine Airlines, Inc.. They were caught red-
handed possessing and using Methampethamine Hydrochloride or shabu HELD:
in a raid conducted by PAL security officers and NARCOM personnel. Yes. There was justification for reducing the number of workers
They alleged that they did not voluntarily indulge in the said act but were in respondent's factory by the introduction of machinery in the
instigated by a certain Jojie Alipato who was introduced to them by manufacture of its products. There is no question as to the right of the
Joseph Ocul, Manager of the Airport Maintenance Division of PAL. Inside manufacturer to use new labor-saving devices with the view to effecting
the company premises, they locked the door and Alipato lost no time in more economy and efficiency in its method of production. But the right to
preparing the drugs to be used. When they started the procedure of reduce personnel should not be abused. It should not be made a pretext
taking the drugs, armed men entered the room, arrested Roquero and for easing out laborers on account of their union activities. But neither
Pabayo and seized the drugs and the paraphernalia used. Roquero and should it be denied when it is shown that they are not discharging their
duties in a manner consistent with good discipline and efficient operation 118 MAGNOLIA DAIRY PRODUCTS CORPORATION vs. NLRC and
of an industrial enterprise. JENNY A. CALIBO
(ONE MONTH NOTICE; SEPARATION PAY)
NOTE: NO DISCRIMINATION; Their selection was made by a committee
composed of both officers and employees who took no account of the FACTS:
laborers' affiliation to the unions and only considered their proven record. Petitioner entered into a contract of service with Skillpower,
Inc., a duly organized corporation engaged in the business of offering
117 EDGAR AGUSTILO vs. COURT OF APPEALS, SAN MIGUEL and providing manpower services to the public. Skillpower, Inc., assigned
CORPORATION Jenny A. Calibo to petitioners Tetra Paster Division. When petitioners
contract with Skillpower, Inc., expired, Calibo applied with Lippercon
FACTS: Services, Inc., also a corporation engaged in providing manpower
Edgar Agustilo was hired by San Miguel Corporation (SMC) as services.
a temporary employee on its Mandaue Brewery in Mandaue, Cebu. He Lippercon Services, Inc., assigned her to petitioners Tetra
was made permanent and designated as a safety clerk and was later Paster Division as a cleaning aide. Later, Calibo was terminated from
transferred to the Engineering Department of the SMC Mandaue Brewery service due to petitioners installation of automated machines prompting
as an administrative secretary. SMC Mandaue Brewery then adopted a Calibo to institute a complaint for illegal dismissal against petitioner.
policy that managers would no longer be assigned secretaries and that In answer thereto, petitioner averred that it has no employer-employee
only director level positions may be given secretaries. As a result, relationship with private respondent and that the dismissal was prompted
petitioner’s position as administrative secretary was abolished and he by the installation of labor saving devices - an authorized cause for
was transferred to the companys Plant Directors Office-Quality dismissal under the Labor Code, as amended.
Improvement Team (PDO-QIT). Petitioner was informed that 584
employees, including him, would be retrenched due to the modernization ISSUE:
program of the company and that his services would be terminated and WON private respondent was legally dismissed since the
that he would be paid his benefits 30 days after he was cleared of all termination of her employment was due to a cause expressly authorized
accountabilities. SMC notified the DOLE of its modernization program. by the Labor Code
Petitioner was given separation pay representing 175% of his
entitlements under the Labor Code. HELD:
Petitioner then filed a complaint against respondents for unfair YES. Article 283 of the Labor Code provides in part that, the
labor practice, illegal dismissal. employer may also terminate the employment of any employee due to
the installation of labor saving devices, x x x, by serving a written notice
ISSUE: on the workers and the Ministry of Labor and Employment at least one
Whether or not petitioner was illegally dismissed. (1) month before the intended date thereof. In case of termination due to
the installation of labor saving devices or redundancy, the worker
HELD: affected thereby shall be entitled to a separation pay equivalent to at
NO. Complainants termination was justified and that least his one (1) month pay or to at least one (1) month pay for every
respondents adhered to the procedural requirements governing the year of service, whichever is higher. x x x A fraction of at least six (6)
same. We have noted very clearly that petitioners separation from months shall be considered one (1) whole year.
employment was brought about by the installation of labor saving The law authorizes an employer, like the herein petitioner, to
devices and machineries pursuant to the employers reorganizational terminate the employment of any employee due to the installation of
and expansion program. The law in this regard allows such a state of labor saving devices. The installation of these devices is a management
change. Art. 283 of the Labor Code allows the reduction of personnel prerogative, and the courts will not interfere with its exercise in the
with the installation of labor saving devices. While we sympathize with absence of abuse of discretion, arbitrariness, or maliciousness on the
the complainant recognizing the considerable period of his employment part of management, as in this case. Nonetheless, this did not excuse
of more than 11 years, yet equally too, we recognize the respondents petitioner from complying with the required written notice to the employee
judgment in the conduct of its business for which the laws do not and to the Department of Labor and Employment (DOLE) at least one
authorize interference. As a matter of fact, the Labor Code and its month before the intended date of termination. This procedure enables
Implementing Rules do not vest in the Labor Arbiters nor in the different an employee to contest the reality or good faith character of the asserted
divisions of the NLRC managerial authority. The employer is free to ground for the termination of his services before the DOLE.
determine, using his own discretion and business judgment, all elements The failure of petitioner to serve the written notice to private
of employment from hiring to firing (National Federation of Labor Union respondent and to the DOLE, however, does not ipso facto make private
v. NLRC, 202 SCRA 346 (1991)). Moreover, the freedom of management respondents termination from service illegal so as to entitle her to
to conduct its business operations to achieve its purpose cannot be reinstatement and payment of backwages. If at all, her termination from
denied (Yuco Chemical Industries v. Min. of Labor, 185 SCRA 727 service is merely defective because it was not tainted with bad faith or
(1990)). For as we see in the case at bench, complainant was not arbitrariness and was due to a valid cause.
discriminated against. In the respondents program of modernization, The well settled rule is that the employer shall be sanctioned
more than 500 others, to be precise, 583 workers, were likewise affected. for non -compliance with the requirements of, or for failure to observe
And we cannot view this as a manifestation of bad faith and insincerity of due process in terminating from service its employee.
respondents taking into account the installation of machineries and
equipment pursuant to the program as a means of streamlining the B. REDUNDANCY
personnel structure. In a program like this, the eventuality of personnel
being removed cannot be avoided. To contend otherwise would be to 119 WILTSHIRE FILE CO., INC. vs. THE NATIONAL LABOR
intrude into the conduct of an enterprise whose main reason for being is RELATIONS COMMISSION and VICENTE T. ONG, respondents.
the profitability of its operations. (DEFINITION)
122 CALTEX (PHILS.), INC. vs NLRC & ROMEO T. STO. TOMAS Facts: Nelson Culili was employed by Eastern Telecommunications a
(SUBSTANTIAL EVIDENCE – reasonable mind might accept as Senior Technician. In 1998, due to business losses, ETPI was compelled
adequate to support a conclusion; (1) Proof of superfluity of to implement a Right-Sizing Program which consisted of two phases: the
position, (2) Fair and reasonable criteria) first phase involved the reduction of ETPI’s workforce to only those
employees that were necessary and which ETPI could sustain; the
FACTS: Romeo T. Sto Tomas was a regular employee of Caltex. He was second phase entailed a company-wide reorganization which would
a Senior Accounting Analyst. Caltex informed the Department of Labor result in the transfer, merger, absorption or abolition of certain
and Employment (DOLE) of its plan to implement a redundancy program departments of ETPI. Among the departments abolished was the Service
in its Marketing Division and some departments in its Batangas Refinery. Quality Department. As a result, Culili’s position was abolished due to
The letter alleged that the redundancy program is a response to the redundancy. Upon filing a complaint, the Labor Arbiter rendered a
market situation which constrained petitioner to rationalize and simplify decision finding ETPI guilty of illegal dismissal and unfair labor practice,
its business processes; that petitioner undertook a review, restructuring which was affirmed by the NLRC. However, the Court of Appeals found
and streamlining of its organization which resulted in consolidation, that Culili’s position was validly abolished due to redundancy. It was
highly unlikely that ETPI would effect a company-wide reorganization They are either officers or members of the Baliwag Mahogany
simply for the purpose of getting rid of Culili. Also, ETPI cannot be held Corporation Union -CFW, the existing collective bargaining agent of the
guilty of unfair labor practice as mere contracting out of services being rank and file employees in the company. In 1988, Baliwag Mahogany
performed by union members does not per se amount to unfair labor Corporation (company) and Baliwag Mahogany Corporation Union-CFW
practice unless it interferes with the employees’ right to self-organization. (union) entered into a collective bargaining agreement containing,
among other things, provisions on conversion into cash of unused
Issue: Whether or not there was an illegal dismissal. vacation and sick leaves; grievance machinery procedure; and the right
of the company to schedule work on Sundays and holidays. The union
Ruling: There was a valid dismissal on the ground of redundancy. There made several requests from the company, one of which was the cash
is redundancy when the service capability of the workforce is greater conversion of unused vacation and sick leave for 1987- 1988 and 1988-
than what is reasonably required to meet the demands of the business 1989. The company ruled to allow payment of unused vacation and sick
enterprise. A position becomes redundant when it is rendered leaves for the period of 1987-1988 but disallowed cash conversion of the
superfluous by any number of factors such as over-hiring of workers, 1988-1989 unused leaves. The company issued suspension orders
decrease in volume of business, or dropping a particular product line. affecting twenty (20) employees for failure to render overtime work on
Among the requisites of a valid redundancy program are: (1) the good December 30, 1989. The suspension was for a period of three (3) days.
faith of the employer in abolishing the redundant position; and (2) fair and On the same day, the union filed a notice of strike on the grounds of
reasonable criteria in ascertaining what positions are to be declared unfair labor practice particularly the violation of the CBA provisions on
redundant such as but not limited to: preferred status, efficiency, and non-payment of unused leaves and illegal dismissal of seven (7)
seniority. employees. The company then issued a notice of termination to three (3)
employees or union members, namely, Cecile de Ocampo, Rene
The records show that ETPI had sufficiently established not only its need Villanueva and Marcelo dela Cruz, of the machinery department,
to reduce its workforce and streamline its organization, but also the allegedly to effect cost reduction and redundancy.
existence of redundancy in the position of a Senior Technician. It was
decided that, in the judgment of ETPI management, the specialized Petitioners contend that the company acted in bad faith when it
functions of a Senior Technician whose sole function was essentially the terminated the services of the three mechanics because the positions
repair and servicing of ETPI’s telecommunications equipment was no held by them were not at all abolished but merely given to Gemac
longer needed since the Business and Consumer [Accounts] Department Machineries. On the contrary, the company stresses that when it
had to remain economical and focused yet versatile enough to meet all contracted the services of Gemac Machineries for the maintenance and
the multifarious needs of its small and medium sized clients. It is repair of its industrial machinery, it only adopted a cost saving and cost-
inconceivable that ETPI would effect a company-wide reorganization of consciousness program in order to improve production efficiency.
this scale for the mere purpose of singling out Culili and terminating him.
What ETPI did was to abolish the position itself for being too specialized ISSUE: Whether or not the dismissals of petitioners Cecile de Ocampo,
and limited. Rene Villanueva, and Marcelo dela Cruz from their positions by the
company on the ground of redundancy was done in good faith.
SC finds Culili’s dismissal was for a lawful cause and not an act of unfair
labor practice, ETPI, however, was remiss in its duty to observe HELD: YES. Petitioners' dismissal was justified by redundancy due to
procedural due process in effecting the termination of Culili. In Mayon superfluity and hence legal. We believe that redundancy, for purposes of
Hotel & Restaurant v.Adana, SC observed that the requirement of law our Labor Code, exists where the services of an employee are in excess
mandating the giving of notices was intended: not only to enable the of what is reasonably demanded by the actual requirement of the
employees to look for another employment and therefore ease the impact enterprise. Succinctly put, a position is redundant where it is superfluous,
of the loss of their jobs and the corresponding income, but more and superfluity of a position or positions may be the outcome of a
importantly, to give the Department of Labor and Employment (DOLE) number of factors, such as over hiring of workers, decreased volume of
the opportunity to ascertain the verity of the alleged authorized business, or dropping of a particular product line or service activity
cause of termination. previously manufactured or undertaken by the enterprise. The employer
had no legal obligation to keep in its payroll more employees, than are
With regard to the impleaded corporate officers, they cannot be held necessary for the operation of its business. The reduction of the number
liable for acts done in his official capacity because a corporation, by legal of workers in a company made necessary by the introduction of the
fiction, has a personality separate and distinct from its officers, services of Gemac Machineries in the maintenance and repair of its
stockholders, and members. To pierce this fictional veil, it must be shown industrial machinery is justified. There can be no question as to the right
that the corporate personality was used to perpetuate fraud or an illegal of the company to contract the services of Gemac Machineries to replace
act, or to evade an existing obligation, or to confuse a legitimate issue. In the services rendered by the terminated mechanics with a view to
illegal dismissal cases, corporate officers may be held solidarily liable effecting more economic and efficient methods of production. In the
with the corporation if the termination was done with malice or bad faith. same case, We ruled that "(t)he characterization of (petitioners') services
as no longer necessary or sustainable, and therefore properly terminable,
Culili has failed to prove that his dismissal was orchestrated by the was an exercise of business judgment on the part of (private respondent)
individual respondents herein for the mere purpose of getting rid of him. company. The wisdom or soundness of such characterization or decision
Hence, the dismissal is declared valid but Eastern Telecommunications was not subject to discretionary review on the part of the Labor Arbiter
Philippines, Inc. is ordered to pay petitioner Nelson A. Culili the amount nor of the NLRC so long, of course, as violation of law or merely arbitrary
of P50,000.00 as nominal damages for non-compliance with statutory and malicious action is not shown" (ibid, p. 673).
due process, in addition to the mandatory separation pay required under
Article 283 of the Labor Code. In contracting the services of Gemac Machineries, as part of the
company's cost-saving program, the services rendered by the mechanics
123 CECILE DE OCAMPO, et.al. vs NLRC and BALIWAG became redundant and superfluous, and therefore properly terminable.
MAHOGANY CORPORATION The company merely exercised its business judgment or management
prerogative. And in the absence of any proof that the management
FACTS: Petitioners are employees of Baliwag Mahogany Corporation.
abused its discretion or acted in a malicious or arbitrary manner, the the decision to close the entire establishment or to close or abolish a
court will not interfere with the exercise of such prerogative. department or section thereof for economic reasons, such as to minimize
expenses and reduce capitalization. In the present case, when petitioner
C. RETRENCHMENT decided to cease operating its F & B Department and open the same to a
concessionaire, it did not reduce the number of personnel assigned
124 ALABANG COUNTRY CLUB INC. vs. NLRC, ALABANG thereat. It terminated the employment of ALL personnel assigned at the
COUNTRY CLUB INDEPENDENT EMPLOYEES UNION department. As in the case of retrenchment, however, for the closure
(CONDITIONS – (1) SUBSTANTIAL, (2) REASONABLY IMMINENT, (3) of a business or a department due to serious business losses to be
REASONABLY NECESSARY, (4) SUFFICIENT & CONVINCING regarded as an authorized cause for terminating employees, it must be
EVIDENCE; RETRENCHMENT VS. CLOSURE) proven that the losses incurred are substantial and actual or
reasonably imminent; that the same increased through a period of
FACTS: time; and that the condition of the company is not likely to improve
Francisco Ferrer, then President of ACCI, requested its Internal in the near future. Petitioners failure to prove that the closure of its F &
Auditor, Irene CamposUgalde, to conduct a study on the profitability of B Department was due to substantial losses notwithstanding, this Court
ACCIs Food and Beverage Departmen (F & B Department). In her report, finds that individual respondents were dismissed on the ground of
it showed that F & B Department had been incurring substantial losses. closure or cessation of an undertaking not due to serious business losses
Realizing that it was no longer profitable for ACCI to maintain its own F & or financial reverses, which is allowed under Article 283 of the Labor
B Department, the management decided to cease from operating the Code.
department and to open the same to a contractor, such as a
concessionaire, which would be willing to operate its own food and 125 LOPEZ SUGAR CORPORATION vs. FEDERATION OF FREE
beverage business within the club. ACCI subsequently entered into an WORKERS
agreement with La Tasca Restaurant Inc. (La Tasca), for it to operate the (PREVENT LOSSES; PROOF OF ACTUAL DECLINE OF GROSS AND
F & B Department. Subsequently, ACCI sent its F & B Department NET REVENUES)
employees individual letters informing them that their services were
being terminated one month from the date and that they would be paid FACTS:
separation pay equivalent to one hundred twenty five (125%) percent of Petitioner, allegedly to prevent losses due to major economic
their monthly salary for every year of service. ACCI also informed them problems, and exercising its privilege under their Collective Bargaining
that La Tasca agreed to absorb all affected employees immediately with Agreement ("CBA") entered into between petitioner and Philippine Labor
the status of regular employees without need of undergoing a Union Association ("PLUA-NACUSIP"), caused the retrenchment and
probationary period, and that all affected employees would receive the retirement of a number of its employees. Petitioner filed with DOLE a
same salary they were receiving from ACCI at the time of their combined report on retirement and application for clearance to retrench
termination. The Union, with the authority of individual respondents, affecting eighty six (86) of its employees in order to prevent losses.
filed before the NLRC a complaint for illegal dismissal. The Union and Federation of Free Workers ("FFW"), as the certified bargaining agent
individual respondents alleged that the F & B Division had been reporting of the rank-and-file employees of petitioner, filed a complaint for unfair
gaining profits as shown by the Statement of Income and Deficit labor practices and recovery of union.
prepared by SGV&Co. They thus argued that compliance with the FFW claimed that the terminations undertaken by petitioner
standards for losses to justify their retrenchment was not met by ACCI. were violative of the security of tenure of its members and were intended
ACCI averred, however, that it may exercise management prerogatives to "bust" the union and hence constituted an unfair labor practice. FFW
to adopt a cost-saving and cost-consciousness program to improve claimed that after the termination of the services of its members,
efficiency in its operations, prevent losses, and concentrate on core petitioner advised 110 casuals to report to its personnel office. FFW
businesses, and to lay-off workers and contract out their jobs. further argued that to justify retrenchment, serious business reverses
must be "actual, real and amply supported by sufficient and convincing
ISSUE: evidence.
WON the respondents were dismissed due to retrenchment. Petitioner denied having hired casuals to replace those it had
retired or retrenched. It explained that the announcement calling for 110
HELD: workers to report to its personnel office was only for the purpose of
NO. Retrenchment on the ground of serious business losses is organizing a pool of extra workers which could be tapped whenever
allowed subject to the conditions that (1) the losses expected should be there were temporary vacancies by reason of leaves of absence of
substantial and not merely de minimis in extent; (2) the substantial regular workers.
losses apprehended must be reasonably imminent as such imminence
can be perceived objectively in good faith by the employer; (3) ISSUE:
retrenchment must be reasonably necessary and likely to effectively WON the retrenchment was valid.
prevent the expected losses; and (4) the alleged losses, if already
realized and the expected imminent losses sought to be forestalled, must HELD:
be proven by sufficient and convincing evidence. However, the case NO. Article 283 of the Labor Code provides:
at bar is one involving closure of a business undertaking. Article 283. Closure of establishment and reduction of
Retrenchment is the reduction of personnel for the purpose of personnel. — The employer may also terminate then employment of any
cutting down on costs of operations in terms of salaries and wages employee due to the installation of labor saving devices, redundancy,
resorted to by an employer because of losses in operation of a business retrenchment to prevent losses or the closing or cessation of operation of
occasioned by lack of work and considerable reduction in the volume of the establishment or undertaking unless the closing is for the purpose of
business. circumventing the provisions of this Title, by serving a written notice on
Closure of a business or undertaking due to business the workers and the Ministry of Labor and Employer at least one (1)
losses is the reversal of fortune of the employer whereby there is a month before the intended date thereof. In case of termination due
complete cessation of business operations to prevent further financial to the installation of labor saving devices or redundancy, the worker
drain upon an employer who cannot pay anymore his employees since affected thereby shall be entitled to a se pay equivalent to at least his
business has already stopped. One of the prerogatives of management is one (1) month pay or to at least one (1) month pay for every year of
service, whichever is higher. In case of retrenchment to prevent losses Antipuesto, et al., consulted with the Regional Director of the Department
and in cases, of closures or cessation of operations of establishment or of Labor and Employment ("DOLE") who opined that it would be best for
undertaking not due to serious business losses or financial reverses, the them to receive the separation pay being offered by the corporation. His
separation pay shall be equivalent to one (1) month pay or at least one advice was heeded.
half (1/2) month pay for every year of service, whichever is higher. A The subsequent receipt of their separation pay benefits,
fraction of at least six (6) months shall be considered one (1) whole year. nevertheless, did not deter Antipuesto, et al., from later going through
(Emphasis supplied) The phrase "to Prevent losses" means with their complaint for illegal dismissal against the corporation. The
that retrenchment or termination of the services of some employees is charge averred that the retrenchment program was a mere subterfuge
authorized to be undertaken by the employer sometime before the losses used by Edge Apparel to give a semblance of regularity and validity to
anticipated are actually sustained or realized. It is not, in other words, the the dismissal of the complainants.
intention of the lawmaker to compel the employer to stay his hand and Edge Apparel countered that its financial obligations,
keep all his employees until sometime after losses shall have in fact amounting to about P8 Million, had begun to eat up most of its capital
materialized. outlay and resulted in unabated losses of P681,280.00 in 1989,
We consider it may be useful to sketch the general standards P262,741.00 in 1990, P162,170.00 in 1991 and P749,294.00 in 1992,
in terms of which the acts of petitioner employer must be appraised. constraining the company to adopt and implement a retrenchment
Firstly, the losses expected should be substantial and not merely de program.
minimis in extent. If the loss purportedly sought to be forestalled by
retrenchment is clearly shown to be insubstantial and inconsequential in ISSUE:
character, the bona fide nature of the retrenchment would appear to be WON there was a valid retrenchment.
seriously in question. Secondly, the substantial loss apprehended must
be reasonably imminent, as such imminence can be perceived HELD:
objectively and in good faith by the employer. There should, in other YES. Retrenchment is an economic ground to reduce the
words, be a certain degree of urgency for the retrenchment, which is after number of employees. In order to be justified, the termination of
all a drastic recourse with serious consequences for the livelihood of the employment by reason of retrenchment must be due to business losses
employees retired or otherwise laid-off. Because of the consequential or reverses which are serious, actual and real. Not every loss incurred
nature of retrenchment, it must, thirdly, be reasonably necessary and or expected to be incurred by the employer will justify retrenchment,
likely to effectively prevent the expected losses. The employer should since, in the nature of things, the possibility of incurring losses is
have taken other measures prior or parallel to retrenchment to forestall constantly present, in greater or lesser degree, in carrying on the
losses, i.e., cut other costs than labor costs. An employer who, for business operations.
instance, lays off substantial numbers of workers while continuing Retrenchment is normally resorted to by management during
to dispense fat executive bonuses and perquisites or so-called "golden periods of business reverses and economic difficulties occasioned by
parachutes", can scarcely claim to be retrenching in good faith to avoid such events as recession, industrial depression, or seasonal fluctuations.
losses. To impart operational meaning to the constitutional policy of It is an act of the employer of reducing the work force because of losses
providing "full protection" to labor, the employer's prerogative to bring in the operation of the enterprise, lack of work, or considerable reduction
down labor costs by retrenching must be exercised essentially as a on the volume of business. Retrenchment is, in many ways, a measure of
measure of last resort, after less drastic means — e.g., reduction of both last resort when other less drastic means have been tried and found to
management and rank-and-file bonuses and salaries, going on reduced be inadequate. A lull caused by lack of orders or shortage of materials
time, improving manufacturing efficiencies, trimming of marketing must be of such nature as would severely affect the continued business
and advertising costs, etc. — have been tried and found wanting. operations of the employer to the detriment of all and sundry if not
Lastly, but certainly not the least important, alleged if already realized, properly addressed. The institution of "new methods or more efficient
and the expected imminent losses sought to be forestalled, must be machinery, or of automation" is technically a ground for termination of
proved by sufficient and convincing evidence. The reason for requiring employment by reason of installation of labor-saving devices but
this quantum of proof is readily apparent: any less exacting standard of where the introduction of these methods is resorted to not merely to
proof would render too easy the abuse of this ground for termination of effect greater efficiency in the operations of the business but principally
services of employees. because of serious business reverses and to avert further losses, the
In this case, there was no proof of actual declining gross and device could then verily be considered one of retrenchment. In this case,
net revenues submitted. No audited financial statements showing the the Labor Arbiter and the NLRC both concluded that there had been a
financial condition of petitioner corporation during the above mentioned valid ground for the retrenchment of private respondents. The documents
crop years were submitted. Since financial statements audited by presented in evidence were found to "conclusively show that (petitioner)
independent external auditors constitute the normal method of proof of suffered serious financial losses." The general standards or elements
the profit and loss performance of a company, it is not easy to needed for the retrenchment to be valid — i.e., that the losses expected
understand why petitioner should have failed to submit such financial are substantial and not merely de minimis in extent; that the expected
statements. Petitioner made passing reference to cost reduction losses are reasonably imminent such as can be perceived objectively
measures it had allegedly undertaken, it was, once more, a fairly and in good faith by the employer; that the retrenchment is reasonably
conspicuous failure to specify the cost-reduction measures actually necessary and likely to effectively prevent the expected losses; and that
undertaken in good faith before resorting to retrenchment. the imminent losses sought to be forestalled are substantiated — were
adequately shown in the present case.
126 EDGE APPAREL, INC. vs NLRC
(JUSTIFIED – Serious, actual and real business loss; LAST 127 FE S. SEBUGUERO vs NLRC and G.T.I. SPORTSWEAR
RESORT) CORPORATION
(BASIC REQUISITES; MANDATORY NOTICE; MERELEY
FACTS: DEFECTIVE)
Pursuing its retrenchment program, petitioner Edge Apparel,
Inc., dismissed private respondents Josephine Antipuesto, Norina Ando, FACTS:
Juliet Baguio, Apolinaria Velonta, Corazon Pino and Josephine Cañete Petitioners were among the thirty-eight (38) regular employees
from employment effective 03 September 1992. Feeling aggrieved, of private respondent GTI Sportswear Corporation, who were given
"temporary lay-off" notices by the latter due to alleged lack of work and notice because by this time, their lay-off is to become permanent and
heavy losses caused by the cancellation of orders from abroad and by they were definitely losing their employment.
the garments embargo of 1990. The lack of written notice to the petitioners and to the DOLE
Believing that their "temporary lay-off" was a ploy to dismiss does not, however, make the petitioners' retrenchment illegal such that
them, resorted to because of their union activities and was in violation of they are entitled to the payment of back wages and separation pay in lieu
their right to security of tenure since there was no valid ground therefor, of reinstatement as they contend. Their retrenchment, for not having
the 38 laid-off employees filed with the Labor Arbiter's office in the been effected with the required notices, is merely defective. In those
National Capital Region complaints for illegal dismissal, unfair labor cases where we found the retrenchment to be illegal and ordered the
practice, underpayment of wages under Wage Orders Nos. 01 and 02, employees' reinstatement and the payment of back wages, the validity of
and non -payment of overtime pay and 13th month pay. the cause for retrenchment, that is the existence of imminent or actual
GTI denied the claim of illegal dismissal and asserted that it serious or substantial losses, was not proven. But here, such a cause is
was its prerogative to lay-off its employees temporarily for a period not present as found by both the Labor Arbiter and the NLRC. There is only a
exceeding six months to prevent losses due to lack of work or job orders violation by GTI of the procedure prescribed in Article 283 of the Labor
from abroad, and that the lay-off affected both union and non-union Code in effecting the retrenchment of the petitioners. It is now settled that
members. It justified its failure to recall the 38 laid-off employees after the where the dismissal of an employee is in fact for a just and valid cause
lapse of six months because of the subsequent cancellations of job and is so proven to be but he is not accorded his right to due process,
orders made by its foreign principals, a fact which was communicated to i.e., he was not furnished the twin requirements of notice and the
the petitioners and the other complainants who were all offered opportunity to be heard, the dismissal shall be upheld but the employer
severance pay must be sanctioned for non-compliance with the requirements of
or for failure to observe due process.
ISSUE:
WON there was a valid retrenchment. 128 Plastimer Industrial Corp. v. Gopo, G.R. No. 183390, February
16, 2011
HELD: (DEFECTIVE NOTICE AND TEMPORARY NET INCOME DOES NOT
YES but it is defective due to lack of procedural notice. RENDER RETRENCHMENT ILLEGAL)
Retrenchment, on the other hand, is used interchangeably with the term
"lay-off." It is the termination of employment initiated by the employer Facts:
through no fault of the employee's and without prejudice to the latter, The Personnel and Administration Manager of Plastimer issued
resorted to by management during periods of business recession, a Memorandum informing all its employees of the decision of the Board
industrial depression, or seasonal fluctuations, or during lulls occasioned of Directors to downsize and reorganize its business operations due to
by lack of orders, shortage of materials, conversion of the plant for a new withdrawal of investments and shares of stocks which resulted in the
production program or the introduction of new methods or more efficient change of its corporate structure. On 14 May 2004, the employees of
machinery, or of automation. Plastimer, including respondent Gopo and other employees were served
Simply put, it is an act of the employer of dismissing employees written notices of their termination effective 13 June 2004. Plastimer and
because of losses in the operation of a business, lack of work, and Plastimer Industrial Corporation Christian Brotherhood (PICCB), the
considerable reduction on the volume of his business, a right consistently incumbent sole and exclusive collective bargaining representative of all
recognized and affirmed by this Court. rank and file employees, entered into a Memorandum of Agreement
To determine, therefore, whether the petitioners were validly (MOA) relative to the terms and conditions that would govern the
retrenched or were illegally dismissed, we must determine whether there retrenchment of the affected employees. On 26 May 2004, Plastimer
was compliance with the law regarding a valid retrenchment at anytime submitted to the DOLE an Establishment Termination Report containing
within the six month-period that they were temporarily laid-off. Under the the list of the employees affected by the reorganization and downsizing.
aforequoted Article 283 of the Labor Code, there are three basic The affected employees, including respondents, signed individual
requisites for a valid retrenchment: “Release Waiver and Quitclaim.”
(1) the retrenchment is necessary to prevent losses and such Thereafter, respondents filed a complaint against Plastimer and
losses are proven; its President Teo Kee Bin (petitioners) before the Labor Arbiter for illegal
(2) written notice to the employees and to the Department of dismissal with prayer for reinstatement and full backwages,
Labor and Employment at underpayment of separation pay, moral and exemplary damages and
least one month prior to the intended date of retrenchment; and attorney’s fees.
(3) payment of separation pay equivalent to one month pay or Respondents alleged that they did not voluntarily relinquish
at least 1/2 month pay for every year of service, whichever is higher. their jobs and that they were required to sign the waivers and quitclaims
The requirement of notice to both the employees concerned without giving them an opportunity to read them and without explaining
and the Department of Labor and Employment (DOLE) is mandatory their contents; and that Plastimer failed to establish the causes/valid
and must be written and given at least one month before the reasons for the retrenchment and to comply with the one-month notice to
intended date of retrenchment. In this case, it is undisputed that the the DOLE as well as the standard prescribed under the Collective
petitioners were given notice of the temporary layoff. There is, however, Bargaining Agreement between Plastimer and the employees. Petitioners
no evidence that any written notice to permanently retrench them was countered that the retrenchment was a management prerogative and that
given at least one month prior to the date of the intended retrenchment. respondents got their retrenchment or separation pay even before the
The NLRC found that GTI conveyed to the petitioners the impossibility of effective date of their separation from service.
recalling them due to the continued unavailability of work. But what the The Labor Arbiter ruled in favor of petitioners. It held that
law requires is a written notice to the employees concerned and petitioners were able to prove that there was a substantial withdrawal of
that requirement is mandatory. The notice must also be given at least stocks that led to the downsizing of the workforce; that notice to the
one month in advance of the intended date of retrenchment to enable the affected employees were given on 14 May 2004, 30 days before its
employees to look for other means of employment and therefore to ease effective date on 14 June 2004, and it was only the notice to the DOLE
the impact of the loss of their jobs and the corresponding income. That that was filed short of the 30-day period; that respondents claimed their
they were already on temporary lay-off at the time notice should have separation pay in accordance with the MOA; and that respondents could
been given to them is not an excuse to forego the one-month written not claim ignorance of the contents of the waivers and quitclaims
because they were assisted by the union President and their counsel in The Court has ruled that a waiver or quitclaim is a valid and
signing them. binding agreement between the parties, provided that it constitutes a
On appeal, the NLRC affirmed the Labor Arbiter’s decision. credible and reasonable settlement, and that the one accomplishing it
The Court of Appeals reversed the NLRC decision and found has done so voluntarily and with a full understanding of its import. We
that petitioners have been illegally dismissed. agree with the Labor Arbiter and the NLRC that respondents were
The Court of Appeals ruled that there was no valid cause for sufficiently apprised of their rights under the waivers and quitclaims that
retrenchment; that while Plastimer claimed financial losses from 2001 to they signed. Each document contained the signatures of Marcaida,
2004, records showed an improvement of its finances in 2003; that PICCB President, and Atty. Diwa, the counsel for the union, which
Plastimer failed to use a reasonable and fair standard or criteria in proved that respondents were duly assisted when they signed the
ascertaining who would be dismissed and who would be retained among waivers and quitclaims. Further, Marcaida’s letter to Teo Kee Bin, dated
its employees; that the MOA between Plastimer and PICCB only 28 May 2004, proved that proper assistance was extended upon
recognized the need for partial retrenchment and the computation of respondents. Hence, we rule that the waivers and quitclaims that
retrenchment pay without disclosing the criteria in the selection of the respondents signed were valid.
employees to be retrenched; and that the union President and the WHEREFORE, we SET ASIDE the Decision and Resolution of
PICCB’s counsel were not present when the retrenched employees were the Court of Appeals, and hereby REINSTATE the Decision of the Labor
made to sign the waivers and quitclaims. Arbiter and the Resolution of the NLRC upholding the validity of
Hence, the petition before this Court. respondents’ retrenchment with MODIFICATION that petitioners pay
each of the
Issue: respondents the amount of P30,000 as nominal damages for non-
WON respondents were illegally retrenched by petitioners. compliance with statutory due process.
First off, the attendant circumstances in the instant case aptly show that
141-142 Armando Ailing vs. Jose B. Feliciano the issue of petitioner’s alleged failure to achieve his quota, as a ground
for terminating employment, strikes the Court as a mere afterthought on
FACTS: the part of WWWEC.
Respondent Wide Wide World Express Corporation (WWWEC) offered to What WWWEC considered as the evidence purportedly showing it gave
employ petitioner Armando Aliling (Aliling) on June 2, 2004 as “Account Aliling the chance to explain his inability to reach his quota was a
Executive (Seafreight Sales),”. The offer came with a six (6)-month purported September 20, 2004 memo of San Mateo addressed to the
probation period condition with this express caveat: “Performance during latter. However, Aliling denies having received such letter and WWWEC
probationary period shall be made as basis for confirmation to Regular or has failed to refute his contention of non-receipt. In net effect, WWWEC
Permanent Status.” was at a loss to explain the exact just reason for dismissing Aliling.
On June 11, 2004, Aliling and WWWEC inked an Employment Contract At any event, assuming for argument that the petitioner indeed failed to
under the terms of conversion to regular status shall be determined on achieve his sales quota, his termination from employment on that ground
the basis of work performance; and employment services may, at any would still be unjustified. Article 282 of the Labor Code considers any of
time, be terminated for just cause or in accordance with the standards the following acts or omission on the part of the employee as just cause
defined at the time of engagement. or ground for terminating employment:
However, instead of a Sea freight Sale assignment, WWWEC asked (a) Serious misconduct or willful disobedience by the employee
Aliling to handle Ground Express (GX), a new company product launched of the lawful orders of his employer or representative in
on June 18, 2004 involving domestic cargo forwarding service for Luzon. connection with his work;
Marketing this product and finding daily contracts for it formed the core of
Aliling’s new assignment. (b) Gross and habitual neglect by the employee of his
duties;
A month after, Manuel F. San Mateo III (San Mateo), WWWEC Sales
and Marketing Director, emailed Aliling to express dissatisfaction with the (c) Fraud or willful breach by the employee of the trust reposed
latter’s performance. in him by his employer or duly authorized representative;
On October 15, 2004, Aliling tendered his resignation to San Mateo. (d) Commission of a crime or offense by the employee against
While WWWEC took no action on his tender, Aliling nonetheless the person of his employer or any immediate member of his
demanded reinstatement and a written apology, claiming in a subsequent family or his duly authorized representatives; and
letter dated October 1, 2004 to management that San Mateo had forced
him to resign. (e) Other causes analogous to the foregoing. (Emphasis
supplied)
On October 6, 2004, Lariosa again wrote, this time to advise Aliling of the
termination of his services effective as of that date owing to his “non- An employee’s failure to meet sales or work quotas falls under the
satisfactory performance” during his probationary period. Records show concept of gross inefficiency, which in turn is analogous to gross neglect
that Aliling, for the period indicated, was paid his outstanding salary. of duty that is a just cause for dismissal under Article 282 of the Code.
However, in order for the quota imposed to be considered a valid
However, or on October 4, 2004, Aliling filed a Complaint for illegal productivity standard and thereby validate a dismissal, managements
dismissal due to forced resignation, nonpayment of salaries as well as prerogative of fixing the quota must be exercised in good faith for the
damages with the NLRC against WWWEC. advancement of its interest. The duty to prove good faith, however, rests
with WWWEC as part of its burden to show that the dismissal was for a
On April 25, 2006, the Labor Arbiter issued a decision declaring that the just cause. WWWEC must show that such quota was imposed in good
grounds upon which complainant’s dismissal was based did not conform faith. This WWWEC failed to do, perceptibly because it could not. The
not only the standard but also the compliance required under Article 281 fact of the matter is that the alleged imposition of the quota was a
of the Labor Code, Necessarily, complainant’s termination is not justified desperate attempt to lend a semblance of validity to Alilings illegal
for failure to comply with the mandate the law requires. Respondents dismissal.
should be ordered to pay salaries corresponding to the unexpired portion
of the contract of employment and all other benefits amounting to a total Being an experimental activity and having been launched for the first
of P35,811.00 covering the period from October 6 to December 7, 2004. time, the sales of GX services could not be reasonably quantified.
WWWEC failed to demonstrate the reasonableness and the bona
Both parties appealed the decision to the NLRC, which affirmed the fides on the quota imposition. Respondent WWWEC miserably failed to
decision of the Labor Arbiter and was later on sustained by the Court of prove the termination of petitioner was for a just cause nor was there
Appeals. substantial evidence to demonstrate the standards were made known to
the latter at the time of his engagement. Hence, petitioners right to receipt of the notices with a warning that failure to do so would mean
security of tenure was breached. waiver of their answer. They were also placed under preventive
suspension in the meantime.
Alilings right to procedural due process was violated
Petitioners failed to submit their written explanation within the
As earlier stated, to effect a legal dismissal, the employer must show not stated period. Subsequently, Kingspoint Express issued to them separate
only a valid ground therefor, but also that procedural due process has yet uniformly worded notices on January 20, 2006, informing them of
properly been observed. When the Labor Code speaks of procedural due their dismissal for the abovementioned charges based on the following
process, the reference is usually to the two (2)-written notice rule acts: fabrication of baseless money claims against the company,
envisaged in Section 2 (III), Rule XXIII, Book V of the Omnibus Rules misleading fellow co-workers to sign the malicious complaint for money
Implementing the Labor Code, which provides: claims against the company, refusal to undergo the company's general
drug test, and extorting money from co-workers to fund activities that
Section 2. Standard of due process: requirements of notice. In
all cases of termination of employment, the following standards they were never fully informed of. Also, petitioner Dacara was dismissed
of due process shall be substantially observed. for consummating his sexual relations with Co’s helper inside her
residence and thus impregnating the help.
I. For termination of employment based on just causes as defined in A complaint for illegal dismissal was subsequently filed,
Article 282 of the Code: alleging that the charges against them were fabricated and that their
dismissal was prompted by Kingspoint Express' aversion to their union
(a) A written notice served on the employee specifying the ground
activities. The Labor Arbiter ruled in favor of the petitioners as the
or grounds for termination, and giving to said employee reasonable
opportunity within which to explain his side; charges are purportedly mere unsubstantiated allegations. This was
affirmed by the NLRC on appeal but the latter reversed itself on a
(b) A hearing or conference during which the employee subsequent MR filed by Kingspoint. The CA initially reversed the NLRC’s
concerned, with the assistance of counsel if the employee so ruling but on an MR, they too reversed their earlier ruling and favored
desires, is given opportunity to respond to the charge, present his Kingspoint. Thus, this petition for certiorari before the SC.
evidence or rebut the evidence presented against him; and
ISSUE: Whether or not the dismissal by reason of breach of trust was Facts:
valid Petitioner Lynvil Fishing Enterprises, Inc. (Lynvil) is engaged in
deep-sea fishing. Respondents’ services were engaged in various
HELD: capacities:
Yes. Andres G. Ariola, captain; Jessie D. Alcovendas, chief mate;
Labor Law Jimmy B. Calinao, chief engineer; Ismael G. Nubla, cook; Elorde Bañez,
The first requisite for dismissal on the ground of loss of trust oiler; and Leopoldo G. Sebullen, bodegero.
and confidence is that the employee concerned must be holding a On Aug. 1, 1998, Lynvil received a report from Ramonito
position of trust and confidence. Clarido, one of its employees, that on July 31, 1998, he witnessed that
Here, it is indubitable that the petitioner holds a position of trust while on board the company vessel Analyn VIII, respondents conspired
and confidence. The position of Building Administrator, being managerial with one another and stole eight tubs of “pampano” and “tangigue” fish
in nature, necessarily enjoys the trust and confidence of the employer. and delivered them to another vessel.
The second requisite is that there must be an act that would Petitioner filed a criminal complaint against respondents before
justify the loss of trust and confidence. Loss of trust and confidence, to the office of the City Prosecutor of Malabon City which found probable
be a valid cause for dismissal, must be based on a willful breach of trust cause for indictment of respondents for the crime of qualified theft.
and founded on clearly established facts. The basis for the dismissal Relying on the finding and Nasipit Lumber Company v. NLRC, 257 Phil.
must be clearly and convincingly established but proof beyond 937 (1989), Lynvil asserted there was sufficient basis for valid
reasonable doubt is not necessary. termination of employment of respondents based on serious misconduct
PDGCC had established, by clear and convincing evidence, and/or loss of trust and confidence.
the petitioners acts which justified its loss of trust and confidence on the
former. On this score, the LA keenly observed that: Issues:
Complainants breach of the trust reposed in him as Building Whether a finding of the city prosecutor of probable cause to
Administrator is sufficiently supported by the evidence on record. indict employees of qualified theft is sufficient basis for valid termination
Complainants admission that he received remuneration from for serious misconduct and/or loss of trust or confidence?
Commission on Elections (COMELEC) whose office is housed at Whether the employees were validly terminated?
respondent Palacio Del Gobernador Condominium justified his
termination of employment. Complainant cannot assert that he rendered Ruling:
services to COMELEC only after office hours as his functions as Building On the first issue, the Supreme Court ruled in the negative. We
Coordinator would definitely have favored COMELEC in the performance ruled that proof beyond reasonable doubt of an employee’s misconduct is
of his functions during regular office hours. not required when loss of confidence is the ground for dismissal. It is
Likewise, as Building Administrator, his active vigilance in sufficient if the employer has “some basis” to lose confidence or that the
reporting and informing the respondents as to the expired license to employer has reasonable ground to believe or to entertain the moral
operate of the EGB Security Agency and its revoked SEC Certificate of conviction that the employee concerned is responsible for the misconduct
Registration was his duty and look-out. In the instant case, complainant and that the nature of his participation therein rendered him absolutely
instead of informing the respondents, kept this information from the unworthy of the trust and confidence demanded by his position.
knowledge of the respondents and allowed the security agency to render Lynvil cannot argue that since the Office of the Prosecutor
security services to the premises of respondents despite its expired found probable cause for theft the Labor Arbiter must follow the finding
license and revoked SEC Certificate of Registration. as a valid reason for the termination of respondents’ employment. The
What escapes the foregoing argument of the petitioner is that proof required for purposes that differ from one and the other are likewise
he is an employee of PDGCC and not of the COMELEC. It is undisputed different.
that PDGCC did not authorize nor was it informed of the services On the second question, the Court stated that nonetheless,
rendered by the petitioner in favor of the COMELEC. To make matters even without reliance on the prosecutor’s finding, we find that there was
worse, the said services rendered by the petitioner are, essentially, valid cause for respondents’ dismissal.
related to the performance of his duties as a Building Administrator of the Just cause is required for a valid dismissal. The Labor Code
condominium. provides that an employer may terminate an employment based on fraud
or willful breach of the trust reposed on the employee. Such breach is
On the procedural aspect, we find that PDGCC had observed due considered willful if it is done intentionally, knowingly, and purposely,
process in effecting the dismissal of the petitioner. without justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. It must also be based on
DGCC complied with the first notice requirement, i.e. notice informing the substantial evidence and not on the employer’s whims or caprices or
petitioner of his infractions, as shown by the following: (1) the suspicions otherwise, the employee would eternally remain at the mercy
Memorandum dated September 27, 2005 sent by Cruz to the petitioner of the employer. Loss of confidence must not be indiscriminately used as
requiring the latter to explain and to submit his report on the additional a shield by the employer against a claim that the dismissal of an
compensation he received from COMELEC; and (2) the letter dated employee was arbitrary. And, in order to constitute a just cause for
December 9, 2005 sent by Cruz to the petitioner requiring him to explain dismissal, the act complained of must be work-related and shows that the
why he allowed the EGB Security Investigation and General Services, employee concerned is unfit to continue working for the employer. In
Inc. to render services to the condominium. addition, loss of confidence as a just cause for termination of
employment is premised on the fact that the employee concerned holds a
The second notice requirement was likewise complied with by PDGCC position of responsibility, trust and confidence or that the employee
when it sent to the petitioner the Memorandum dated October 28, 2006 concerned is entrusted with confidence with respect to delicate matters,
which, in essence, informed the latter that a new Building Administrator such as the handling or care and protection of the property and assets of
had been appointed.
the employer. The betrayal of this trust is the essence of the offense for company time for his personal affairs, but only for a few hours and not
which an employee is penalized. Breach of trust is present in this case. the whole day.
However, Lynvil contends that it cannot be guilty of illegal While respondent was still suspended, Norkis also found that
dismissal because the private respondents were employed under a fixed- Respondent committed some inappropriate and irregular acts such as
term contract which expired at the end of the voyage. Contrarily, the unexplained low performance of his branch, missing funds, unauthorized
private respondents (employees) contend that they became regular disbursement of funds, irregular transactions.
employees by reason of their continuous hiring and performance of tasks Petitioners terminated respondent’s services for loss of trust
necessary and desirable in the usual trade and business of Lynvil. and confidence and gross inefficiency. Respondent filed a complaint for
Jurisprudence, laid two conditions for the validity of a fixed- illegal suspension and illegal dismissal. LA favored respondent.
contract agreement between the employer and employee: first, the Petitioners appealed to NLRC. NLRC reversed the LA’s decision and
fixed period of employment was knowingly and voluntarily agreed upon found respondent to have been validly dismissed. The NLRC, however,
by the parties without any force, duress, or improper pressure being upheld the LA’s finding that petitioners are liable to respondent for unpaid
brought to bear upon the employee and absent any other circumstances wages. Respondent filed MR. It was denied so he filed with the CA a
vitiating his consent; or second, it satisfactorily appears that the petition for certiorari. CA reinstated with modification the decision of the
employer and the employee dealt with each other on more or less equal LA. Respondent filed a motion for clarification as to the awards of
terms with no moral dominance exercised by the former or the latter. separation pay and back wages while petitioners filed MR. CA issued a
In the context of the facts that: (1) the respondents were doing tasks Resolution stating that as regards respondent’s motion for clarification,
necessarily to Lynvil’s fishing business with positions ranging from the separation pay and back wages shall be reckoned from the time
captain of the vessel to bodegero; (2) after the end of a trip, they will respondent was illegally suspended until finality of its earlier Decision.
again be hired for another trip with new contracts; and (3) this The CA likewise denied petitioners’ MR. Hence, petitioners filed the
arrangement continued for more than ten years, the clear intention is to present petition.
go around the security of tenure of the respondents as regular
employees. And respondents are so by the express provisions of the ISSUE:
second paragraph of Article 280, thus: xxx Provided, That any employee Was respondent lawfully dismissed for grounds of loss of trust
who has rendered at least one year of service, whether such service is and confidence?
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall RULING:
continue while such activity exists. NO. Loss of trust and confidence as a ground for termination of
Having found that respondents are regular employees who an employee under Article 282 of the Labor Code requires that the
may be, however, dismissed for cause as we have so found in this case, breach of trust be willful, meaning it must be done intentionally,
there is a need to look into the procedural requirement of due process in knowingly, and purposely, without justifiable excuse. The basic premise
Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code. for dismissal on the ground of loss of confidence is that the employee
It is required that the employer furnish the employee with two written concerned holds a position of trust and confidence. It is the breach of this
notices: (1) a written notice served on the employee specifying the trust that results in the employer’s loss of confidence in the employee.
ground or grounds for termination, and giving to said employee Here, there is no question that as petitioners’ Branch Manager
reasonable opportunity within which to explain his side; and (2) a written in Iligan City, respondent was holding a position of trust and confidence.
notice of termination served on the employee indicating that upon due He was responsible for the administration of the branch, and exercised
consideration of all the circumstances, grounds have been established to supervision and control over all the employees. He was also incharge of
justify his termination. In this case, it is clear that the employees were not sales and collection.
given the final written notices of dismissal. In termination cases, the burden of proof rests upon the
The Court ruled that since employees were dismissed for just employer to show that the dismissal is for a just and valid cause and
cause, they were not entitle to separation pay and backwages. However, failure to do so would necessarily mean that the dismissal was illegal.
they were to be granted nominal damages for failure of the employer to The quantum of proof required in determining the legality of an
comply with statutory due process. employee’s dismissal is only substantial evidence. CA correctly held that
petitioners failed to discharge this burden.
164 Norkis vs. Buat - GR No. 185255 Petitioners having failed to establish by substantial evidence
any valid ground for terminating respondent’s services, we uphold the
FACTS: finding of the Labor Arbiter and the CA that respondent was illegally
Respondent Delfin S. Descallar was assigned at the Iligan City dismissed.
Branch of petitioner Norkis Distributors, Inc., a distributor of Yamaha An illegally dismissed employee is entitled to two reliefs:
motorcycles. He became a regular employee and was promoted as back wages and reinstatement. The two reliefs provided are separate
Branch Manager. He acted as branch administrator and had supervision and distinct. In instances where reinstatement is no longer feasible
and control of all the employees. Respondent was also responsible for because of strained relations between the employee and the employer,
sales and collection separation pay is granted. The normal consequences of respondent’s
In a memorandum, petitioners required respondent to explain illegal dismissal, then, are reinstatement without loss of seniority rights,
in writing within 48 hrs why he should not be penalized or terminated for and payment of back wages computed from the time compensation was
being absent without official leave (AWOL) or rendering under-time withheld from him up to the date of actual reinstatement. Where
service on certain dates. Respondent explained that he reported to the reinstatement is no longer viable as an option, separation pay equivalent
office on those dates, but he either went to the bank or followed-up on to one month salary for every year of service should be awarded as an
prospects. As he was still within city limits, he did not file any official alternative. The payment of separation pay is in addition to payment of
leave or travel record. back wages.
Norkis conducted an investigation. Finding that respondent was The CA merely clarified the period of payment of back wages
not able to prove that he was really in the branch or on official travel, and separation pay up to the finality of its decision modifying the LA’s
petitioners suspended him for 15 days without pay. According to decision. In view of the modification of monetary awards in the Labor
petitioners, respondent admitted during the investigation that he used Arbiter’s decision, the time frame for the payment of back wages and
separation pay is accordingly modified to the finality of the CA decision.
WHEREFORE, the petition for review on certiorari is DENIED. principle, the employer has the onus of proving with clear, accurate,
consistent, and convincing evidence the validity of the dismissal.
To justify fully the dismissal of an employee, the employer must, as a Section 2. Standard of due process: requirements of notice. In
rule, prove that the dismissal was for a just cause and that the employee all cases of termination of employment, the following standards
was afforded due process prior to dismissal. As a complementary of due process shall be substantially observed.
I. For termination of employment based on just causes as defined in Secretary were asked to sign each page of the printout. Vallota, however,
Article 282 of the Code: was not given a copy of the printed file.
On November 14, 2005, Vallota received a memorandum
(a) A written notice served on the employee specifying the ground
directing him to explain within 72 hours why highly confidential files were
or grounds for termination, and giving to said employee reasonable
opportunity within which to explain his side; stored in his computer, which also informed him that he was being placed
under preventive suspension for 30 days effective upon receipt of the
(b) A hearing or conference during which the employee said notice. A second memorandum, also dated November 14, 2005,
concerned, with the assistance of counsel if the employee so notified Vallota of the extension of his preventive suspension for another
desires, is given opportunity to respond to the charge, present his 30 days, in view of the fact that the management needed more time to
evidence or rebut the evidence presented against him; and evaluate the administrative case against him.
On November 24, 2005, PGAI sent him another memorandum
(c) A written notice [of] termination served on the employee
indicating that upon due consideration of all the circumstance, requesting further details on some of the matters he raised in his
grounds have been established to justify his termination. response. In a letter dated December 6, 2005, Vallota requested a
conference, to be attended by a Union representative and counsel. PGAI
Here, the first and second notice requirements have not been properly sent Vallota another memorandum dated December 7, 2005, which,
observed, thus tainting petitioners dismissal with illegality. among others, set a new deadline for Vallota to submit his reply and
evidence in his defense. In compliance with the deadline set, Vallota
The adverted memo dated September 20, 2004 of WWWEC supposedly
submitted his reply-memorandumdated December 12, 2005, outlining his
informing Aliling of the likelihood of his termination and directing him to
account for his failure to meet the expected job performance would have response to the charges.
had constituted the charge sheet, sufficient to answer for the first notice Meanwhile, the Union sent a letter to PGAI President Philip K.
requirement, but for the fact that there is no proof such letter had been Rico requesting that a grievance committee be convened and that the
sent to and received by him. In fact, in his December 13, 2004 contents of the computers of other IT personnel be similarly produced.
Complainants Reply Affidavit, Aliling goes on to tag such The request for the convening of a grievance committee was ignored. On
letter/memorandum as fabrication. WWWEC did not adduce proof to
December 21, 2005, Vallota was given a notice of termination of his
show that a copy of the letter was duly served upon Aliling. Clearly
enough, WWWEC did not comply with the first notice requirement. employment effective January 10, 2006 on the ground of loss of trust and
confidence.
Neither was there compliance with the imperatives of a hearing or Thus, the petitioners filed a complaint for illegal dismissal with
conference. The Court need not dwell at length on this particular breach claims for full backwages, moral and exemplary damages, and attorney
of the due procedural requirement. Suffice it to point out that the record is fees.
devoid of any showing of a hearing or conference having been On March 31, 2006, Labor Arbiter Aliman D. Mangandog
conducted. On the contrary, in its October 1, 2004 letter to Aliling, or
rendered a decision in favor of the petitioners. The respondents filed their
barely five (5) days after it served the notice of termination, WWWEC
acknowledged that it was still evaluating his case. And the written notice Memorandum of Appeal dated May 19, 2006. On June 30, 2006, the
of termination itself did not indicate all the circumstances involving the National Labor Relations Commission dismissed the appeal on the
charge to justify severance of employment. ground that the respondents failed to submit a certificate of non-forum
shopping in accordance with the Rules of Procedure of the NLRC.
166 PRUDENTIAL GUARANTEE AND ASSURANCE EMPLOYEE The respondents filed their Motion for Reconsideration dated
LABOR UNION and SANDY T. VALLOTA, Petitioners, vs. NATIONAL July 17, 2006, which the Union opposed. On October 31, 2007, the
LABOR RELATIONS COMMISSION, PRUDENTIAL GUARANTEE NLRC granted the respondents motion for reconsideration and reversed
AND ASSURANCE INC., and/or JOCELYN RETIZOS, Respondents. and set aside the decision of the LA.
(HEARING IS MANDATORY; FAILURE TO OBSERVE = NOMINAL
DAMAGES) ISSUE:
Whether or not Vallota was validly dismissed on the ground of
FACTS: loss of trust and confidence?
Vallota was employed by Prudential Guarantee as a Junior
Programmer on May 16, 1995. He reported directly to Gerald Dy Victory, HELD:
then head of the EDP, until his replacement by respondent Jocelyn The Court discussion in Mabeza v. National Labor
Retizos sometime in 1997. In August of 2005, Vallota was elected to the Relations Commission is instructive:
Board of Directors of the Union. Loss of confidence as a just cause for dismissal was never
On November 11, 2005, HR Manager, Atty. Rillo informed intended to provide employers with a blank check for terminating their
Union President, Mike Apostol that PGAI was going to conduct an on- employees. Such a vague, all-encompassing pretext as loss of
the-spot security check in the Information and Technology Department. confidence, if unqualifiedly given the seal of approval by this Court, could
The inspection team proceeded to the IT Department, and the readily reduce to barren form the words of the constitutional guarantee of
EDP head, through PGAI network administrator Angelo Gutierrez security of tenure. Having this in mind, loss of confidence should ideally
initiated the spot check of IT Department computers, beginning with the apply only to cases involving employees occupying positions of trust and
one assigned to Vallota. After exploring the contents of all the folders and confidence or to those situations where the employee is routinely
subfolders in the "My Documents" folder, a folder named AAwas found, charged with the care and custody of the employer's money or property.
which Vallota claimed to be about a mutual life fund. Retizos, on the To the first class belong managerial employees, i.e., those vested with
other hand, asked Vallota if was working for MAA Mutual Life and the powers or prerogatives to lay down management policies and/or to
sending them confidential documents of PGAI. hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
Sensing that Vallota was being singled out, Apostol insisted employees or effectively recommend such managerial actions; and to the
that all the computers in the IT Department, including that of Retizos, be second class belong cashiers, auditors, property custodians, etc., or
also subjected to a spot security check. Later, at Retizos office, and in those who, in the normal and routine exercise of their functions, regularly
the presence of Atty. Rillo, Vallota was informed that Retizos and Atty. handle significant amounts of money or property.
Rillo would print the files found in his computer under the folder "MAA." In Bristol Myers Squibb (Phils.), Inc. v. Baban,the Court
Vallota did not object. After the files were printed, Vallota and the Union discussed the requisites for a valid dismissal on the ground of loss of
trust and confidence:
It is clear that Article 282(c) of the Labor Code allows an files reveals some degree of carelessness or neglect in his failure to
employer to terminate the services of an employee for loss of trust and delete them, but it is an extremely farfetched conclusion bordering on
confidence. The right of employers to dismiss employees by reason of paranoia to state that it is part of a larger conspiracy involving corporate
loss of trust and confidence is well established in jurisprudence. espionage.
The first requisite for dismissal on the ground of loss of trust Moreover, contrary to the respondents allegations, the MAA
and confidence is that the employee concerned must be one holding a files found in Vallota computer, the prospectus and corporate profile, are
position of trust and confidence. There are two (2) classes of positions of not sensitive corporate documents. These are documents routinely made
trust. The first class consists of managerial employees. They are defined available to the public, and serve as means to inform the public about the
as those vested with the powers or prerogatives to lay down company and to disseminate information about the products it sells or the
management policies and to hire, transfer suspend, lay-off, recall, services it provides, in order that potential clients may make a sound and
discharge, assign or discipline employees or effectively recommend such informed decision whether or not to purchase or avail of such goods and
managerial actions. The second class consists of cashiers, auditors, services.
property custodians, etc. They are defined as those who in the normal If anything, the presence of the files would merely merit the
and routine exercise of their functions, regularly handle significant development of some suspicion on the part of the employer, but should
amounts of money or property. Xxx not amount to a loss of trust and confidence such as to justify the
The second requisite is that there must be an act that would termination of his employment. Such act is not of the same class, degree
justify the loss of trust and confidence. Loss of trust and confidence to be or gravity as the acts that have been held to be of such character. While
a valid cause for dismissal must be based on a willful breach of trust and Vallota act or omission may have been done carelessly, it falls short of
founded on clearly established facts. The basis for the dismissal must be the standard required for termination of employment. It does not manifest
clearly and convincingly established but proof beyond reasonable doubt either that the employee concerned is unfit to continue working for his
is not necessary. employer.
Thus, the first question to be addressed is whether Vallota held Procedural due process requirements for termination - In
a position of trust and confidence. Vallota was employed by PGAI as a this case, the two-notice requirement was complied with. By the
Junior Programmer assigned to the EDP Department. Based on the petitioners own admission, PGAI issued to Vallota a written Notice of
standards set by previous jurisprudence, Vallota position as Junior Charges & Preventive Suspension dated November 14, 2005. After an
Programmer is analogous to the second class of positions of trust and exchange of memoranda, PGAI then informed Vallota of his dismissal in
confidence. Though he did not physically handle money or property, he its decision dated December 21, 2005.
became privy to confidential data or information by the nature of his Given, however, that the petitioners expressly requested a
functions. At a time when the most sensitive of information is found not conference or a convening of a grievance committee, following the
printed on paper but stored on hard drives and servers, an employee Court ruling in the Perez case, which was later cited in the recent
who handles or has access to data in electronic form naturally becomes case of Lopez v. Alturas Group of Companies, such formal hearing
the unwilling recipient of confidential information. became mandatory. After PGAI failed to affirmatively respond to
Having addressed the nature of his position, the next question such request, it follows that the hearing requirement was not
is whether the act complained of justified the loss of trust and confidence complied with and, therefore, Vallota was denied his right to
of Vallota employer so as to constitute a valid cause for dismissal. It procedural due process.
must, thus, be determined whether the alleged basis for dismissal was Reinstatement and backwages - In light of the above
based on clearly established facts. discussion, Vallota is entitled to reinstatement and backwages, reckoned
The act alleged to have caused the loss of trust and confidence from the date he was illegally dismissed until the finality of this decision in
of PGAI in Vallota was the presence in his computer hard drive of a accordance with jurisprudence.
folder named "MAA" allegedly containing files with information on MAA In view of the strained relations between Vallota and PGAI,
Mutual Life Philippines, a domestic corporation selling life insurance however, it is not in the best interest of the parties, nor is it advisable or
policies to the buying public, and files relating to PGAI internal affairs. practical to order reinstatement. Where reinstatement is no longer viable
While the law and this Court recognize the right of an employer as an option, separation pay equivalent to one (1) month salary for every
to dismiss an employee based on loss of trust and confidence, the year of service should be awarded as an alternative. It must be stressed,
evidence of the employer must clearly and convincingly establish the however, that an illegally dismissed employee is entitled to two reliefs:
facts upon which the loss of trust and confidence in the employee is backwages and reinstatement, which are separate and distinct. In
based. Golden Ace Builders v. Tagle, it was written:
To be a valid ground for dismissal, loss of trust and confidence Thus, an illegally dismissed employee is entitled to two reliefs:
must be based on a willful breach of trust and founded on clearly backwages and reinstatement. The two reliefs provided are separate and
established facts. A breach is willful if it is done intentionally, knowingly distinct. In instances where reinstatement is no longer feasible because
and purposely, without justifiable excuse, as distinguished from an act of strained relations between the employee and the employer, separation
done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest pay is granted. In effect, an illegally dismissed employee is entitled to
on substantial grounds and not on the employer arbitrariness, whims, either reinstatement, if viable, or separation pay if reinstatement is no
caprices or suspicion; otherwise, the employee would remain eternally at longer viable, and backwages.
the mercy of the employer. Further, in order to constitute a just cause for The normal consequences of respondentsillegal dismissal,
dismissal, the act complained of must be work-related and show that the then, are reinstatement without loss of seniority rights, and payment of
employee concerned is unfit to continue working for the employer. Such backwages computed from the time compensation was withheld up to the
ground for dismissal has never been intended to afford an occasion for date of actual reinstatement. Where reinstatement is no longer viable as
abuse because of its subjective nature. an option, separation pay equivalent to one (1) month salary for every
In this case, there was no other evidence presented to prove year of service should be awarded as an alternative. The payment of
fraud in the manner of securing or obtaining the files found in Vallota separation pay is in addition to payment of backwages.
computer. In fact, aside from the presence of these files in Vallota hard Velasco v. National Labor Relations Commission,
drive, there was no other evidence to prove any gross misconduct on his emphasizes:
part. There was no proof either that the presence of such files was part of The accepted doctrine is that separation pay may avail in lieu
an attempt to defraud his employer or to use the files for a purpose other of reinstatement if reinstatement is no longer practical or in the best
than that for which they were intended. If anything, the presence of the
interest of the parties. Separation pay in lieu of reinstatement may
likewise be awarded if the employee decides not to be reinstated. THE CASE:
Under the doctrine of strained relations, the payment of Reyes hired respondents as chief bakers in his three franchise
separation pay is considered an acceptable alternative to reinstatement branches of Julie’s Bakeshop in Sibalom and San Jose, Antique.
when the latter option is no longer desirable or viable. On one hand, such Respondents filed separate complaints against petitioners for
payment liberates the employee from what could be a highly oppressive underpayment of wages, payment of premium pay for holiday and rest
work environment. On the other hand, it releases the employer from the day, service incentive leave pay, 13th month pay, cost of living allowance
grossly unpalatable obligation of maintaining in its employ a worker it (COLA) and attorney’s fees. These complaints were later on
could no longer trust. consolidated.
GRANTED Subsequently, in a memorandum dated February 16, 2000,
Reyes reassigned respondents as utility/security personnel tasked
I. CONSTRUCTIVE DISMISSAL to clean the outside vicinity of his bakeshops and to maintain peace
and order in the area. Upon service of the memo, respondents,
167 DANILO LEONARDO vs. NATIONAL LABOR RELATIONS however, refused to sign the same and likewise refused to perform
COMMISSION their new assignments by not reporting for work.
Issue:
Whether MPH retained the authority to continue with the
administrative case against Delada for insubordination and willful
disobedience of the transfer order.
Rulings:
Accordingly, we rule in this case that MPH did not lose its
authority to discipline respondent for his continued refusal to report to his
new assignment. In relation to this point, we recall our Decision in Allied
Banking Corporation v. Court of Appeals. In Allied Banking Corporation,
employer Allied Bank reassigned respondent Galanida from its Cebu City
branch to its Bacolod and Tagbilaran branches. He refused to follow the
transfer order and instead filed a Complaint before the Labor Arbiter for
constructive dismissal. While the case was pending, Allied Bank insisted
that he report to his new assignment. When he continued to refuse, it
directed him to explain in writing why no disciplinary action should be
meted out to him. Due to his continued refusal to report to his new
assignment, Allied Bank eventually terminated his services. When the