SECOND DIVISION
Two of the respondents, Anacorita Valde and Celsa Dizon,
G.R. Nos. 110452-54 November 24, 1994
KINGSIZE MANUFACTURING CORP., and CHARLIE CO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ANACORITA VALDE, CELSA
DIZON, TERESITA ORIBIANA, ET AL., respondents.
Delos Reyes, Bonifacio, Delos Reyes for petitioners.
Venida & Associates SOCDEM for private respondents.
MENDOZA, J.:
This is a petition for certiorari to annul the decision and two resolutions of the
National Labor Relations Commission (First Division) in NLRC NCR Case Nos.
00-09-03984-88, 06-11-04716-88, and 00-09-04030-88, reversing the Labor
Arbiter's decision and ordering petitioners to reinstate private respondents
and pay them backwages equivalent to their salaries for three years.
The facts are as follows:
Petitioner is a garment factory. Private respondents were its employees. Most
of private respondents were hired as early as 1978, the rest in 1987, as sewers
on piece work basis, with the exception of respondent Juancho Bognot who was
an assistant cutter and later supervisor.
At various times between June 1987 and January 1988, private respondents
were dismissed by petitioners for abandonment of work allegedly because
private respondents had not reported for work. When private respondents
presented themselves, they were prevented from entering the work place by
petitioners' agent, Charlie Co.
Within a few days of their dismissal, private respondents were able to secure
employment at another garment factory, the First General Marketing
1
Corporation (FGMC).
were in fact employed at the FGMC on the same day they were dismissed by
petitioners.
On September 21 and 26, 1988 and November 17, 1988, private respondents
filed complaints against petitioners for illegal dismissal, underpayment of
minimum wage, Emergency Cost of Living Allowance (ECOLA) and overtime
pay, and for non-payment of legal holiday pay and service incentive leave pay,
as well as 13th Month pay and attorney's fees. Their complaints were filed with
the Department of Labor where they were later consolidated.
Petitioners submitted a paper in which they denied the charges against them
and claimed that respondents had abandoned their jobs by "not reporting for
work for quite sometime." With respect to respondent Juancho Bognot, it was
alleged that he had been dismissed for "irresponsibility on the job during the
latter part of his employment" and for absenting himself from work without
leave from petitioners. 1
The Labor Arbiter2 found that, with the exception of respondent Juancho
Bognot, the complainants had quit their jobs in order to work for the FGMC.
Hence, in his decision rendered on May 31, 1989, the Labor Arbiter dismissed
their claim for reinstatement. With respect to Juancho Bognot, the Labor
Arbiter found that he had been illegally dismissed and so ordered him paid
backwages for six months.
On the other hand, the Labor Arbiter granted the claims of Teresita Oribiana,
Petra Calim, and Yolanda Parungo for Emergency Cost of Living Allowance
(ECOLA), legal holiday pay, 13th month pay and service incentive leave with
pay and the claims of Teresita Olajo and Agnes Enano for COLA, legal holiday
pay and 13th month pay. No service incentive leave with pay was granted to
Enano and Olajo for the reason that they had less than one year of service in the
factory.
The dispositive portion of the Labor Arbiter's decision reads:
ACCORDINGLY, respondents Kingsize Mfg. Corporation and/or Charlie Co are
hereby ordered to reinstate within ten (10) days from receipt hereof, herein
complainant Juancho Bognot to his former or any substantially equivalent
position without loss of seniority right and privileges with six (6) months
backwages including his money award herein in the amounts of One Thousand
Nine Hundred One Pesos (P1,901.00) in the concept of differentials in
emergency cost of living allowance; One Thousand Two Hundred Twenty-Nine
and Twenty-Five Centavos (P1,229.25), as salary differentials; Ninety-Seven
(sic) Pesos and Seventy-Seven Centavos (P99.77) and Fourty-Two Pesos
(P42.00), as differentials in 13th month pay and legal holiday pay, respectively.
Further, the same respondents are also ordered within the same period to pay
complainants Parungo, Calim, Enano, Olajo, and Oribiano, their respective
underpayment of emergency cost of living allowance in the amount of 7.00
daily, legal holiday pay, 13th month pay differentials, and service incentive
leave with pay except Enano and Olajo who had rendered less than one year
service with respondents, to be based on their respective length of service.
For this purpose, the Office of the Information and Research Unit of this Region
is hereby directed to make the remaining computation in accordance with the
discussion herein within a reasonable period of time after the finality of this
decision.
All other claims are hereby denied for lack of merit.
SO ORDERED.3
On June 30, 1989, five of the complainants, Anacorita Valde, Judy Dreu, Lydia
Llobit, Marlene Bognot, and Celsa Dizon, appealed the Labor Arbiter's decision
finding them guilty of abandoning their jobs. These complainants, who were
granted no monetary awards, prayed that they be granted separation pay. The
other complainants, Teresita Oribiana, Teresita Olajo, Agnes Enano, Petra Calim
and Yolanda Parungo, whose money claims had been granted, did not appeal,
although as will presently be discussed, a claim is now made in their behalf that
they should be deemed to have appealed insofar as they were found to have
abandoned their jobs.
On the other hand, petitioners appealed with respect to the Labor Arbiter's
decision ordering them to reinstate Juancho Bognot and pay backwages to him.
On October 30, 1992 the NLRC rendered a decision, reversing the Labor Arbiter
and finding petitioners guilty of illegally dismissing the "herein complainants,"
meaning all the herein respondents. The NLRC ordered the reinstatement of
these employees to their former positions without loss of seniority rights but
without backwages. The decision with respect to Juancho Bognot was affirmed.
The dispositive portion of the decision reads:
2
WHEREFORE, premises considered, the appealed decision is hereby REVERSED
insofar as the Order dismissing the complaint for dismissal is concerned.
Respondents are ordered to REINSTATE the herein complainants to their
former position[s] without loss of seniority rights. Except for complainant
Juancho Bognot to whom the award of backwages and other monetary benefits
is being AFFIRMED, reinstatement of the rest of complainants shall be without
backwages. Respondents' appeal, on the other hand, is hereby DISMISSED for
lack of merit.
SO ORDERED.
On November 27, 1992, the five complainants, namely, Anacorita Valde, Judy
Dreu, Lydia Llobit, Marlene Bognot, and Celsa Dizon, moved for a
reconsideration of the decision insofar as their reinstatement was ordered to
be without backpay.
In its resolution of February 17, 1993, the NLRC granted their motion and
ordered them paid backwages equal to three years of their salaries at the time
of their dismissal. In other respects, the decision of October 30, 1992 was
affirmed.
Petitioners filed a "Motion for Leave to Reconsider Resolution dated February
17, 1993" in which they sought to set aside the order to reinstate the
complainants, but their motion was denied by the NLRC in its resolution dated
April 22, 1993.4 Hence, this petition.
Petitioners allege that the NLRC gravely abused its discretion in:
1. Holding that abandonment of employment can only be proved by a written
notice to the employees to return to work with warning of dismissal in case of
his failure to report for work.
2. In giving credence to the claim of private respondents that they could not
have abandoned their jobs because they were receiving more benefits from
petitioners than from their new employer.
3. In disregarding the fact that respondents did not file a complaint
immediately upon their dismissal because they did not allegedly know their
rights.
4. In ordering the reinstatement of all the respondents despite the fact that in
their bill of particulars, position paper and notice of partial appeal, the
respondents merely asked for separation pay and only five of them appealed
from the decision of the Labor Arbiter, finding them guilty of abandonment.
The first question here is whether the NLRC gravely abused its discretion in
finding that petitioners were guilty of illegal dismissal of their employees.
Findings of facts of the NLRC are entitled to great respect and will not be
disturbed in the absence of any showing that they are not supported by
substantial evidence.5
Petitioners' defense below was that private respondents had abandoned their
jobs. Petitioners thus had the burden of proving "a clear and deliberate intent"
on the part of the private respondents to discontinue employment without any
intention of returning.6 They had to prove a deliberate and unjustified refusal
on the part of the employee to resume his employment and such refusal must
be clearly shown. Mere absence is not sufficient. It must be accompanied by
overt acts unerringly pointing to the fact that the employee simply does not
want to work anymore.7
Petitioners contend that complainants abandoned their jobs as shown by the
fact that shortly after they had been dismissed by petitioners they were able to
find employment at the FGMC. Indeed the following appears:
1. Anacorita Valde, who was dismissed on June 15, 1987, was employed by First
General Marketing Corporation on the same day, June 15, 1987.
2. Celsa Dizon, who was dismissed on June 15, 1987, was also employed at First
General Marketing Corporation on June 15, 1987, on the same day.
3. Yolanda Parungo, who was dismissed on January 6, 1988, started work at
First General Marketing Corporation on January 7, 1988.
4. Petra Calim, who was dismissed on January 7, 1988, was employed at First
General Marketing Corporation on January 8, 1988.
5. Agnes Enano, who was dismissed on December 14, 1987, was employed by
First General Marketing Corporation on January 7, 1988.
3
6. Erlinda Aguirre, who was dismissed on December 14,
1987, was employed by First General Marketing Corporation on December 17,
1987.
7. Teresita Oribiana, who was dismissed on December 14,
1987, was hired by First General Marketing Corporation on December 28, 1987.
8. Marlene Bognot, who was allegedly dismissed on
December 15, 1987, started work at First General Marketing Corporation on
December 22, 1987.
9. Judy Dreu, who was also allegedly dismissed on December
15, 1987, was employed by First General Marketing Corporation on December
28, 1987.
10. Lydia Llobit, who was dismissed on December 15, 1987,
was employed by First General Marketing Corporation on December 27, 1987.8
We do not think, however, that this circumstance alone is proof of a "clear and
deliberate intent" on the part of the private respondents not to continue work
with petitioners. As the NLRC held, this was due to the fact that in the work
place the demand for experienced, high-speed sewers was quite great. On the
other hand, the countervailing evidence found by the NLRC tend to negate any
inference of abandonment. These are: (1) the unrebutted allegation that
petitioners' representative, Edward Co, barred private respondents from
entering the premises of the company when they reported for work; (2) the
equally uncontested claim of private respondents that they were earning more
from petitioners' factory and (3) the fact that private respondents had already
attained security of tenure in petitioners' company compared to their
probationary status at the FGMC.
Indeed, it is noteworthy that aside from these circumstances negating
petitioners' allegation, private respondents' employment at the FGMC took
place after, not before, their dismissal by petitioners. It would have been a
different matter if it was shown that, at the time of their dismissals, private
respondents had been employed at the FGMC.
That it took private respondents nine months before filing their complaints for
illegal dismissal could be due in part to the fact that, having found ready
employment, they did not feel the urgent need to file their complaints earlier
and partly to the fact that, as found by the NLRC, private respondents only
became aware of their rights under the law after they were employed at the with this contention. Indeed, it could be that after staying in the new jobs these
FGMC where there is a union. complainants had had a change of mind about reinstatement.

In addition, petitioners' failure to give notice with warning to the private Moreover, as the Solicitor General points out, the NLRC should have limited its
respondents before their services were terminated puts in grave doubt decision to five of the complainants since they were the only ones who had
petitioners' claim that the dismissal was for a just cause. Sec. 2, Rule XIV of the appealed from the decision of the Labor Arbiter. These complainants were
Rules Implementing the Labor Code provides: Marlene Bognot, Lydia Llobit, Anacorita Valde, Celsa Dizon and Judy Dreu.

Any employer who seeks to dismiss a worker shall furnish him a written notice As to the other six (6) respondents who did not appeal, namely Teresita
stating the particular acts or omission constituting the grounds for dismissal. In Oribiana, Teresita Olajo, Agnes Enano, Petra Calim, Yolanda Parungo and
case of abandonment of work, the notice shall be served at the worker's last Erlinda Aguirre, the Labor Arbiter's decision became final and executory 15
known address. upon the expiration of the reglementary period of 10 days as prescribed in Art.
223 of the Labor Code. The NLRC acted in excess of its jurisdiction in including
The notice required, as elaborated upon in our decision in Pepsi-Cola Bottling these complainants in its decision.
Co., v. NLRC,9 actually consists of two parts to be separately served on the
employee, to wit: (1) notice to apprise the employee of the particular acts or The case of Juancho Bognot should be considered separately. The Labor Arbiter
omissions for which his dismissal is sought; and (2) subsequent notice to found that he had been illegally dismissed and ordered him to be reinstated
inform him of the employer's decision to dismiss him. with backwages. The order of reinstatement is affirmed because this
respondent was not one of those who appealed to the NLRC and asked for
This requirement is not a mere technicality but a requirement of due process to separation pay.
which every employee is entitled to insure that the employer's prerogative to
dismiss or lay-off is not abused or exercised in an arbitrary manner.10 This rule WHEREFORE, the decision of the NLRC is AFFIRMED, with the modification that
is clear and unequivocal and in applying it to this case the NLRC, far from acting instead of ordering petitioners to reinstate respondents Anacorita Valde, Judy
in excess of its jurisdiction, acted according to law. Dreu, Lydia Llobit, Marlene Bognot, and Celsa Dizon, they should only be
granted separation pay at the rate of one month for every year of service.
Having determined that private respondents were illegally dismissed, the next
question is whether the NLRC gravely abused its discretion in ordering their SO ORDERED.
reinstatement considering that, in appealing the Labor Arbiter's decision, they
only asked for separation pay. In general, the remedy for illegal dismissal is the
reinstatement of the employee to his former position without loss of seniority
rights and the payment to him of backwages. 11 But there may be instances
where reinstatement is not a viable remedy as where in the meantime the
business of the employer has closed 12 or where the relations between the
employer and employee have been so severely strained that it is not advisable
to order reinstatement, 13 or where the employee decides not to be reinstated.
14 In such events the employer will instead be ordered to pay separation pay.

Considering the fact that private respondents, in appealing the decision of the
Labor Arbiter, reduced their original demand for reinstatement to a prayer for
separation pay, there is merit in petitioners' contention that the NLRC exceeded
its jurisdiction in ordering their reinstatement. The Solicitor General agrees

4
FIRST DIVISION
G.R. No. 117378 March 26, 1997
GIL CAPILI and RICARDO CAPILI, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, National Capital Region
(First Division), BENIGNO SANTOS, DELFIN YUSON, LUISITO SANTOS,
URSINO BASISTER, RICARDO REYES, JOSELITO SANTOS, JORGE BINUYA
and NICOLAS MULINGBAYAN, respondents.
BELLOSILLO, J.:
Respondents Benigno Santos, Delfin Yuson, Luisito Santos, Ursino Basister,
Ricardo Reyes, Joselito Santos, Jorge Binuya and Nicolas Mulingbayan are
licensed drivers of public utility jeepneys plying the Libertad-Sta. Cruz route in
Manila. The jeepneys were formerly owned by petitioner Gil Capili. For the use
of the jeepney for twelve hours a driver would pay rent or so-called "boundary"
of P280.00 and earn a net profit of P200.00 per day.
On 7 May 1991, at a time when petitioner Ricardo Capili jointly with his wife
had assumed ownership and operation of the jeepneys driven by private
respondents, the latter and the other drivers similarly situated were required
by the jeepney operators to sign individually contracts of lease of the jeepneys
to formalize their lessor-lessee relationship. However, having gathered the
impression that the signing of the contracts of lease was a condition precedent
before they could continue driving for petitioners, all the drivers stopped
plying their assigned routes beginning 7 May 1991.
A week later or on 14 May 1991 the drivers, numbering twenty-two (22), filed a
complaint for illegal dismissal before the Labor Arbiter praying not for
reinstatement but for separation pay.1
In the interim, fourteen (14) of the complainants desisted and resumed plying
their routes. The remaining eight (8) complainants with their reckoning dates
of employment follow: (a) Benigno Santos, 1972; (b) Jorge Binuya, 1965; (c)
Luisito Santos, 1982; (d) Delfin Yuson, 1983; (e) Ursino Basister, 1980; (f)
5
Ricardo Reyes, 1985; (g) Joselito Santos, 1989; and, (h) Nicolas Mulingbayan,
1978.
Petitioners opposed the claim of private respondents before the Labor Arbiter
alleging that the latter voluntarily abandoned their respective jobs without any
valid cause and thereafter refused and still continue to refuse to return to work
despite repeated demands and/or notices given to them to return to work.
In resolving the dispute, the Labor Arbiter ruled —
On the issue of dismissal versus abandonment, we are inclined to believe that
the latter scenario happened. It is not sound business practice to dismiss many
employees at the same time since it would cripple the operations.
What was more likely was that the drivers, all 22 of them . . . boycotted
respondents on May 7, 1991 by not reporting for work on that day.
xxx xxx xxx
From the viewpoint of complainants, their signing of the lease contract was a
condition sine qua non to the continuous driving of their respective drivers
(jeepneys?). But from the point of view of respondent Capili and as shown in
the aforequoted paragraph 5 of his affidavit, and as further shown in the
notices (Exhibits "3-B" and "3-B-1") which merely asked complainants to
return to work without mentioning any condition like the signing of the
contract, the signing of the lease contract by the drivers was merely intended
as a confirmation of the original concept of a no employer-employee
relationship, and to streamline the operation by indicating the amount of the
boundary per driver, depending on the number of hours they drive and their
obligation to check on the motor/engine, oil, tires, brakes and other routinary
requirements in order to insure the vehicles' roadworthiness. It was never
meant to be that if a driver refuses to sign the contract, he would not be
allowed to continue driving.
To our mind, both parties misappreciated the situation. Respondents'
erroneous insistence of a no employer-employee relationship even in the face
of a well-established contrary doctrine as postulated in the Dinglasan case2
(98 Phil. 649) and complainants' erroneous apprehension of the loss of such
employer-employee relationship if they sign the lease contract propelled the
complainants to file the instant complaint.
In short, this is merely a simple case of misunderstanding.
To remedy the situation, we feel that the most prudent approach would be to
let the parties return to the relationship that existed between them prior to
May 7, 1991.3
The Labor Arbiter thus concluded —
WHEREFORE, decision is hereby rendered declaring the breakage (sic), of
relationship between respondent Ricardo Capili and complainants Benigno T.
Santos, Delfin Yuson, Luisito Santos, Ursino Basister, Ricardo Reyes, Joselito
Santos, Jorge Binuya and Nicholas Mulingbayan, as a product of
misunderstanding and misappreciation of the situation by both parties and,
therefore, respondents are hereby directed to reinstate them to their former
position without loss of seniority rights and other benefits, but without back
wages (p. 7, Annex "F", emphasis supplied).4
Private respondents appealed to the National Labor Relations Commission.
They reiterated their prayer for separation pay equivalent to one (1) month
salary for every year of service and, in addition, three (3) years back wages.
Respondent NLRC upheld the finding of the Labor Arbiter that the case arose
due to simple misunderstanding between the complaining drivers on one hand
and their employers on the other. However, it took exception to the relief
granted to private respondents and modified the appealed decision accordingly
by holding that —
Since there was misunderstanding between the parties and
this misunderstanding resulted in animosity and strained relationship between
them, we deem it proper and most prudent approach to maintain industrial
peace for respondents to pay the complainants their separation pay of one half
(1/2) month for every year of service, based on their daily earnings of
P200.00.5
The petitioners moved to have the above disquisition of respondent NLRC
reconsidered but the latter denied the motion. They now come to us arguing
that since there was a clear finding of abandonment by the Labor Arbiter
consisting in the failure of private respondents to report for work without
justifiable reason, the award of separation pay could not be warranted.
6
The NLRC brushed aside the arguments of petitioners. It emphasized that if it
were the finding of the Labor Arbiter that private respondents were guilty of
abandonment he would not have ordered reinstatement but dismissal of the
case. Thus on 9 August 1994 NLRC denied reconsideration.
Petitioners impute grave abuse of discretion on the part of respondent NLRC in
awarding separation pay to private respondents.
We agree with petitioners. The legal basis for the award of separation pay is
clearly provided by Art. 279 of the Labor Code which states that the remedy for
illegal dismissal is reinstatement without loss of seniority rights plus back
wages computed from the time compensation was withheld up to
reinstatement. However there may be instances where reinstatement is not a
viable remedy as where the relations between employer and employee have
been so severely strained that it is no longer advisable to order reinstatement
or where the employee decides not to be reinstated. In such events, the
employer will instead be ordered to pay separation pay.6
A reading of Art. 279 in relation to Art. 282 of the Labor Code reveals that an
employee who is dismissed for cause after appropriate proceedings in
compliance with the due process requirements is not entitled to an award of
separation pay. Under Arts. 283 and 284 of the same Code, separation pay is
authorized only in cases of dismissals due to any of these reasons: (a)
installation of labor saving devices; (b) redundancy; (c) retrenchment; (d)
cessation of the employer's business, and, (e) when the employee is suffering
from a disease and his continued employment is prohibited by law or is
prejudicial to his health and to the health of his co-employees.7 However,
separation pay shall be allowed as a measure of social justice in those cases
where the employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character, but only when he was
illegally dismissed.
The common denominator of those instances where payment of separation pay
is warranted is that the employee was dismissed by the employer. In the instant
case there was no dismissal at all. Respondent NLRC affirmed the factual
findings of the Labor Arbiter that there was only a misunderstanding between
petitioners and private respondents which caused the latter to stop reporting
for work. If the Labor Arbiter ordered reinstatement it should not be construed
as relief proceeding from illegal dismissal; instead, it should be considered as a
declaration or affirmation that private respondents may return to work
because they were not dismissed in the first place, and they should be happy
that their employers are accepting them back. This could be the reason why
complainants asked only for separation pay — not for reinstatement — in their G.R. No. 139847 March 5, 2004
complaint before the Labor Arbiter.
PROCTER AND GAMBLE PHILIPPINES, petitioner,
The award of separation pay cannot be justified solely because of the existence vs.
of "strained relations" between the employer and the employee. It must be EDGARDO BONDESTO, respondent.
given to the employee only as an alternative to reinstatement emanating from
illegal dismissal. When there is no illegal dismissal, even if the relations are DECISION
strained, separation pay has no legal basis. Besides, the doctrine on "strained
relations" cannot be applied indiscriminately since every labor dispute almost
invariably results in "strained relations;" otherwise, reinstatement can never be TINGA, J.:
possible simply because some hostility is engendered between the parties as a
result of their disagreement. That is human nature.8 For review on certiorari is the Decision1 dated June 16, 1999 of the Court of
Appeals, affirming in toto the decision of the National Labor Relations
The constitutional policy of providing full protection to labor is not intended to Commission (NLRC), which in turn ordered the reinstatement of respondent
oppress or destroy management. The commitment of this Court to the cause of Edgardo C. Bondesto and the payment of backwages for one (1) year only.
labor does not prevent us from sustaining the employer when it is in the right,
as in this case.9 The facts are simple.

When respondents filed their complaint, and taking account of the allegations
therein, they foreclosed reinstatement as a relief, since they prayed only for an
award of separation pay. This is confirmed in their appeal to the NLRC where
they prayed for a modification of the decision of the Labor Arbiter, from
reinstatement without back wages to payment of three (3) years back wages
and separation pay equivalent to one (1) month salary for every year of service.
10 It is therefore clear that respondents never desired to be reinstated. This
being so, the Court cannot order them to return to work. 11 If private
respondents voluntarily chose not to return to work anymore they must be
considered as having resigned from their employment. This is without
prejudice however to the willingness of both parties to continue with their
former contract of employment or enter into a new one whenever they so
desire.
WHEREFORE, the petition is GRANTED and the employer-employee
relationship between petitioners on one hand and each private respondent on
the other is deemed voluntarily terminated. Consequently, the decision of
respondent National Labor Relations Commission dated 28 February 1994 is
REVERSED and SET ASIDE.
On July 18, 1975, respondent Edgardo Bondesto started work in the employ of
petitioner Procter and Gamble Philippines, Inc. Nineteen (19) years later, the
events which preceded the respondent’s dismissal from work unfolded. At that
time, he was working as production technician at the company’s Tondo Plant in
Tondo, Manila.
On June 13, 1994, the respondent received a letter2 dated June 3, 1994, asking
him to explain why his absences consisting of 35 days3 should not be classified
as "unauthorized absence." Unauthorized absence, as a company policy, is a
ground for termination of employment.4
The respondent presented his explanation in two (2) separate letters 5, both
dated June 16, 1994. However, on June 22, 1994, he received another letter, this
time informing him that his employment in the company was to be terminated
effective June 23, 1994 on the ground of "unauthorized absences." The letter
states, thus:
June 22, 1994

SO ORDERED. Mr. Edgardo Bondesto

PR # 751003

7
We received your replies to our letter dated June 3, 1994 asking you to reply in
writing why your absence of 35 days should not be classified as Unauthorized
Absence. When you presented your letters and reported for work last June 16,
1994, you incurred another eight (8) work days of absences (June 06 to June
15, 1994). You now have a total of 43 work days of absences.
Last June 16 and June 20, 1994, you and I discussed your replies and your 43
days of absences. You were not able to justify your absences.
After a thorough study of your case, you have indeed violated a Company Policy
governing Unauthorized Absences, read (sic) as follows:
"As a general rule, employees with six (6) continuous work days or a total of
ten (10) work days of unauthorized absences within a calendar year may be
subject to termination."
You have incurred more than ten (10) work days of unauthorized absences.
We hereby inform you, therefore, that your employment with the Company is
being terminated effective close-of-business Thursday, June 23, 1994.6
Claiming that his dismissal was without just cause, the respondent, represented
by the United Employees Union of Procter and Gamble Phils., Inc., filed a
complaint for illegal dismissal before the National Labor Relations Commission
(NLRC). The respondent contended that his absences were justified.
Sometime in November 1993, the respondent alleged, the petitioner directed
him to go to Mindanao for field assignment. Except for the plane fare which the
petitioner paid prior to his departure, the respondent advanced all the other
work-related expenses incurred during the assignment. One of the petitioner’s
Staff District Managers issued a check in the amount of Ten Thousand Pesos
(₱10,000.00) supposedly to cover respondent’s traveling expenses, but it
bounced after he presented it to the bank.
On January 31, 1994, the respondent was re-assigned in Manila. He
immediately worked on the reimbursement of his advances. But as the
reimbursements were not immediately released, he was constrained to go to
the petitioner’s General Office located in Makati to follow-up the
reimbursement.
8
Meanwhile, the children of the respondent became sick. He spent time
attending to them. And as he needed money, he also went to the company’s
Makati office to follow-up the reimbursement process. The delay in the release
of his reimbursement even forced him to apply for wage advances under the
collective bargaining agreement between the company and the union.
On April 6, 1994, or after more than two months, the petitioner finally released
the respondent’s reimbursements.
One week later, or on April 13, 1994, the respondent received a letter asking
him to explain his "excessive absences"7, which according to him, included the
days he worked on his reimbursements. The respondent demurred. He claimed
that the seventeen (17) days should be considered as compensable working
time since he was then at the Makati office working on the reimbursement of
his money.
On May 2, 1994, the respondent himself got sick. He went to the company clinic
the following day to secure a working permit. The company doctor however
refused to give him one and even required him to see the doctor who operated
on his "Colonic Cancer" way back in 1986. The respondent failed to locate the
doctor. Thus, he was given an indefinite sick leave instead of a working permit.
The petitioner denied the respondent’s assertions. It alleged that from
February 4, 1994 to March 11, 1994, the respondent, without prior notice,
failed to report for work. When asked to explain his numerous absences,8 the
respondent contended that he was at the petitioner’s General Office, working
on the reimbursement of his expenses incurred during his provincial
assignments.
Unconvinced, the petitioner reconsidered only seven (7) days9 of the
respondent’s absences and asked the latter to explain the remaining absences
for seventeen (17) working days.10 Since the respondent, according to the
petitioner, could not satisfactorily explain his absences, it sent him a letter 11
requiring him to explain in writing, within five days, why appropriate
disciplinary measures should not be taken against him in view of his "excessive
absences." According to the petitioner, the respondent did not respond to the
letter.
On May 2, 1994, the respondent did not report for work due to exhaustion.
Following a standard office procedure, he went to the petitioner’s clinic the
next day to get a "return to work" permit. However, the clinic deferred issuance
of the permit until after he shall have undergone a check-up and submitted a
medical certificate from his attending physician. Consequently, the
respondent’s manager did not allow the respondent to work.
On May 4, 1994, the respondent again went to the clinic and requested that he
be allowed to work until he could have an appointment with his doctor. His
request was denied. According to the petitioner, from that time on the
respondent had been absent. He reported back to work only on June 16, 1994,
after receiving the petitioner’s letter dated June 3, 1994.
On February 10, 1997, the labor arbiter rendered a Decision12 finding the
respondent’s termination as one for cause and accordingly dismissing the
complaint. Considering, however, the respondent’s length of service to the
company, the arbiter awarded separation pay at the rate equivalent to one-half
(1/2) month’s salary for every year of service.
The respondent appealed to the NLRC which, on April 23, 1998, reversed the
labor arbiter’s decision and found the respondent’s dismissal illegal. 13 Finding
the respondent’s absences to be justified, the NLRC ruled that his absences
from work were actually spent in following-up reimbursement of the expenses
he incurred during the provincial assignment. The absences could have been
caused by the petitioner’s delay in processing the reimbursement, the NLRC
pointed out. It also took into consideration the fact that the children of the
respondent were in and out of the hospital during the months of February and
March of 1994.
With respect, however, to the absences incurred during the months of May and
June, the NLRC ruled that the respondent failed to show that he exerted any
effort in trying to locate his physician. Nevertheless, the NLRC considered the
penalty of termination too harsh, and ordered the reinstatement of the
respondent with limited back wages equivalent to one (1) year.
The petitioner moved for the reconsideration of the NLRC Decision, but its
motion was denied in a Resolution14 dated July 29, 1998. Undaunted, the
petitioner elevated the case to the Court of Appeals on a petition for
certiorari,15 arguing that (1) the respondent’s dismissal is justified because he
deliberately disregarded the company rules and regulations on leaves and
absences; (2) the respondent’s absences were not only unauthorized but also
unjustified, and; (3) the reinstatement of the respondent is no longer feasible in
view of the strained relations between the parties.
In the meantime, the respondent filed a Motion for Execution16 of the NLRC
Decision. On January 18, 1999, the labor arbiter issued a Writ of Execution
9
directing the petitioner to reinstate the respondent to his former position,
without loss of seniority rights and other employee benefits. In compliance
with the writ, the petitioner reinstated the respondent in its payroll, effective
February 25, 1999.
On June 16, 1999, the appellate court rendered a Decision17 affirming the NLRC
judgment. Accordingly, the Court of Appeals ordered the respondent’s
reinstatement with limited back wages equivalent to one (1) year.
Its Motion for Reconsideration having been denied by the Court of Appeals per
the latter’s Resolution18 dated August 26, 1999, the petitioner now seeks relief
from this Court. Relying once more on its defense of just cause for termination,
the petitioner insists that the respondent’s violation of the company rules and
regulations on absences constitutes serious misconduct and/or willful
disobedience of the lawful orders of his superiors.
The pivotal issue is whether the respondent was terminated from service for a
just cause or whether he was illegally dismissed.
The Court rules that the respondent was illegally dismissed and accordingly
denies the petition.
It is manifest that the petition raises an issue that is fundamentally factual,
which the Court is not at liberty to review. The veracity of a fact is not for the
Court to examine. The Court steps in and exercises its power of review only
when the inference or conclusion arrived at on the basis of facts is manifestly
erroneous.19
The Court reiterates the much-repeated rule that the findings of fact of the
Court of Appeals, where there is absolute agreement with those of the NLRC,
are accorded not only respect but even finality and are deemed binding upon
this Court so long as they are supported by substantial evidence.20
Nonetheless, the Court has reviewed the records of this case and found there is
indeed no compelling reason to disturb the findings of the NLRC, which the
Court of Appeals affirmed in toto. Verily, the respondent’s seemingly prolonged
absences during the period from February 4 to March 11, 1994 were
sufficiently explained in the Sur-Rejoinder21 filed before the labor arbiter.
There, the respondent made an account of each day of absence chronologically.
As thus accounted, the respondent spent most of the days at the company’s
General Office following-up the reimbursement of his advances. He asked the
petitioner to check the security guard’s logbook at the General Office to check
the veracity of his claim. He also presented hospital bills and receipts to prove
that his children were in and out of the hospital during the period.
The petitioner sought to counter the respondent’s claims by referring to his
time cards. According to the petitioner, the respondent’ time card shows no
"punched in" times for February 8 and 9 and no "punched out" time for
February 10 and 11. The problem, however, is that while they were referred to
in the petition, the time cards themselves were not attached thereto.
Nonetheless, such discrepancy, if any, is immaterial considering that aside from
February 11 the dates adverted to were not included in the list of the
respondent’s absences.
The Court agrees, however, with the petitioner that the respondent failed to
justify his prolonged absences during the months of May to June. While his
intention to go back to work was manifest, he regrettably failed to show that he
exerted any effort to locate his physician. Nevertheless, the failure to locate the
physician cannot amount to "serious misconduct or willful disobedience," as
the petitioner would like this Court to believe. "Misconduct" has been defined
as "the transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wrongful
intent and not mere error in judgment."22 On the other hand, "willful
disobedience" envisages the concurrence of at least two (2) requisites: the
employee’s assailed conduct has been willful or intentional, the willfulness
being characterized by a "wrongful and perverse attitude;" and the order
violated must have been reasonable, lawful, made known to the employee and
must pertain to the duties which he had been engaged to discharge.23
Even assuming that the respondent’s absenteeism constitutes willful
disobedience, such offense does not warrant the respondent’s dismissal. Not
every case of insubordination or willful disobedience by an employee
reasonably deserves the penalty of dismissal. There must be a reasonable
proportionality between the offense and the penalty.
At the time of the filing of the complaint, the respondent had worked with the
petitioner for nineteen (19) years. It has not been shown that the respondent
committed any infraction of company rules during his two (2) – decade stint in
the company. Undoubtedly, dismissal is too harsh a sanction. Dismissal has
always been regarded as the ultimate penalty.24
While the Court recognizes the rights of an employer to terminate the services
of an employee for a just or authorized cause, the dismissal of an employee
must be made within the parameters of law and pursuant to the tenets of
10
equity and fair play. Truly, the employer’s power to discipline its workers may
not be exercised in such an arbitrary manner as to erode the constitutional
guarantee of security of tenure.25 The Constitution mandates the protection of
labor. This command the Court has to heed and cannot disregard.
In sum, the Court is convinced that the respondent has been illegally
terminated from employment. The normal consequences of illegal dismissal are
reinstatement without loss of seniority rights and the payment of back wages
computed from the time the employee’s compensation was withheld from him.
However, in view of the Court’s finding that some of the respondent’s absences
were not wholly justified, the Court agrees with the NLRC and the Court of
Appeals that backwages should be limited to one (1) year.
The petitioner claims that the existence of strained relationship between the
parties militates against the reinstatement of the respondent. While the Court
agrees that human nature engenders, in the normal course of things, a certain
degree of hostility as a result of litigation, the strained relations are not
necessarily sufficient to rule out reinstatement. As aptly put by the Court of
Appeals, "if petitioner’s contention should be sustained, reinstatement would
thus become the exception rather than the rule in cases of illegal dismissal."26
However, during the pendency of the case, the petitioner filed an Urgent
Manifestation and Motion,27 stating that more than a year after the respondent
was placed on payroll reinstatement the company’s Tondo Plant, where the
respondent was assigned, was shut down. Since the respondent’s employment
could not be maintained at the Tondo Plant, so the petitioner maintains, it was
constrained to discontinue the respondent’s payroll reinstatement.
Clearly, the respondent is entitled to reinstatement, without loss of seniority
rights, to another position of similar nature in the company. It should be
stressed that while the petitioner manifested to this Court the closure of the
Tondo Plant, it failed to indicate the absence of an unfilled position more or less
of a similar nature as the one previously occupied by the respondent at its
other plant/s. However, if the respondent no longer desires to be reinstated, he
should be awarded separation pay at the rate of one (1) month for every year of
service as an alternative, following settled jurisprudence.28
WHEREFORE, the petition is DENIED and the assailed decision dated June 16,
1999 of the Court of Appeals is AFFIRMED. Petitioner Procter and Gamble
Philippines, Inc. is directed to reinstate respondent Edgardo Bondesto without
loss of seniority rights, or in the alternative, i.e., should he opt not to be
reinstated, to pay him separation pay in the amount equivalent to one (1)
month pay for every year of service, plus backwages for one (1) year only in G.R. No. 152308 January 26, 2005
either case.
ACESITE CORPORATION, HOLIDAY INN, JOHANN ANGERBAUER and PHIL
SO ORDERED. KENNEDY, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (Second Division) and LEO A.
GONZALES, respondents.

x---------------------------------x

G.R. No. 152321 January 26, 2005

LEO A. GONZALES, petitioner,

vs.
ACESITE (PHILIPPINES) HOTEL CORPORATION, HOLIDAY INN MANILA,
JOHANN ANGERBAUER and PHIL KENNEDY, respondents.

DECISION

CARPIO MORALES, J.:

Before this Court are two consolidated petitions for review on certiorari
challenging the Court of Appeals Decision of October 12, 2001 and Resolution
of February 19, 2002 in CA-G.R. SP No. 65406, "Acesite (Philippines) Hotel
Corporation, Holiday Inn Manila, Johann Angerbauer and Phil Kennedy v.
National Labor Relations Commission and Leo A. Gonzales."

The antecedents of the case are as follows:

Leo A. Gonzales (Gonzales) was hired on October 18, 1993 as Chief of Security
of Manila Pavillion Hotel.1 On January 1, 1995, Acesite Corporation (Acesite)
took over the operations of Manila Pavillion and renamed it Holiday Inn Manila
(the hotel). Acesite retained Gonzales as Chief of Security of the hotel.

On March 25, 1998, Gonzales took a 4-day sick leave and took emergency leave
on March 30, 1998. On April 16-29, 1998, he again took a 12-day vacation leave,
thereby using up all leaves that he was entitled for the year.

Before the expiration of his 12-day vacation leave or on April 23, 1998,
Gonzales filed an application2 for emergency leave for 10 days commencing on

11
April 30 up to May 13, 1998. The application was not, however, approved. By
Acesite’s claim, he received a telegram3 informing him of the disapproval and
asking him to report back for work on April 30, 1998.
Gonzales did not report for work on April 30, 1998. On even date, he received a
telegram4 from Acesite advising him that he was on unauthorized leave and
asking him to provide a written explanation within the next 24 hours why he
was not reporting for work. At the same time, he was required to report for
work the following day or on May 1, 1998.
On May 2, 1998, Gonzales’ father Anacleto sent a telegram5 to Acesite stating
that he was still recovering from severe stomach disorder and would report
back for work on May 4, 1998. A medical certificate6 dated May 3, 1998 issued
by a Dr. Laureano C. Gonzales, Jr. stating that Gonzales was under his care from
April 30 – May 3, 1998 was presented to prove that he indeed was treated from
such sickness.
On May 4, 1998, around lunchtime, Gonzales reported for work and presented
himself to Johann Angerbauer, then Resident Manager of the hotel. Angerbauer
claims that when Gonzales went to him, he asked him to explain why he had
been absent despite orders for him to report back for work to which he
(Gonzales) replied that it was necessary for him to go home to his province in
Abra.
Gonzales, on the other hand, claims that when he conferred with Angerbauer,
he requested for leave without pay from May 5-9, 1998 which was
provisionally approved on condition that he (Gonzales) would be sending his
explanation through e-mail behind his absences on April 30, 1998 and May 2,
1998 so that Angerbauer could send it to the hotel General Manager Phil
Kennedy who was then out of the country.
Around 5:33 pm of May 4, 1998, Gonzales sent his explanation7 to Angerbauer
through e-mail, to wit, quoted verbatim:
This has reference with your verbal instruction that I will submit my written
explanation regarding my absences on April 30,1998 and May 2, 1998.
At the outset, my profound apologies for the above-stated absences. As you are
fully aware of, on April 27, 1998, I formally requested your office that my
official leave [which] will expire on April 29, 1998 shall be extended up to May
15, 1998. Inasmuch that I was in the province (ABRA) at that time, I was not
aware that my request was disapproved until such time that I received your
12
telegram two days later. Likewise, when I received your telegram, I was sick at
that time and this was duly communicated to your office thru telegram. This
was the reason I failed to report for work also on May 2, 1998.
As exhaustively discussed to you today, there is a great necessity for me to go
home tonight in the province. Once again, I am asking your kind understanding
that I shall be allowed to go on leave effective tomorrow and rest assured that I
will report for work after the election. At any rate, the training of our new
guards will start on May 18, 1998.
Thank you for this and for the past favors.
In the evening Gonzales left for Abra.
Also on May 4, 1998 Angerbauer sent the following inter-office memo8 to
Gonzales, allegedly received at around 7:55 pm by the security staff:
As discussed during our meeting, you are advised to submit an explanation
within 24 hours why you did not report to work 1st May 1998? And why you
came in late today 4th of May 1998, as we had a 10:30 AM scheduled
communication meeting with the incoming Security Agency.
We will be having another meeting tomorrow regarding the turnover of the
outgoing Security Agency. I will be expecting your presence during the said
meeting.
For your compliance.
Gonzales claims that he got hold of a copy of the above-quoted memo only on
May 8, 1998.
Gonzales not having reported for work on May 5, 1998, Angerbauer sent him on
even date the following telegram9 at his provincial address in Abra:
THIS IS TO REITERATE OUR ADVICE FOR YOU TO REPORT BACK TO WORK
IMMEDIATELY UPON RECEIPT OF THIS NOTICE DUE TO VERY URGENT
MATTERS INVOLVING SECURITY DEPARTMENT’S CONCERNS WHICH
IMPERATIVELY REQUIRE YOUR PERSONAL ATTENTION. PLEASE CONSIDER
THIS AS OUR FINAL ADVICE.
Gonzales, who claims to have received the May 5, 1998 telegram only in the
afternoon of May 7, 1998, immediately repaired back to Manila on May 8, 1998
only to be "humiliatingly and ignominiously barred by the guard (a subordinate
of [Gonzales]) from entering the premises."
It appears that on May 7, 1998, Angerbauer issued the following Notice of
Termination10 through an inter-office memo:
As you continuously disregard our several advices for you to report back to
work to attend to very urgent matters involving Security Department’s
concerns which, as categorically made clear to you, imperatively required your
personal presence and attention considering that you are its Department Head,
thus adversely affecting the operations of said department, we are left with no
recourse but to terminate your services from the Hotel effective immediately
for violations of rule no. 27, Type C, of the House Code of Discipline – "Acts of
gross disobedience or insubordination" and provisions of the Labor Code,
specifically Art. 282. Termination by Employer, par. (a) x x x willful
disobedience by the employee of the lawful orders of his employer or
representative in connection with his work.
Please be guided accordingly. (Emphasis and underscoring supplied)
Gonzales thus filed on May 27, 1998 a complaint11 against Acesite, Angerbauer
and Kennedy for illegal dismissal with prayer for reinstatement and payment of
full backwages, service incentive leave, 13th month pay, moral and exemplary
damages and attorney’s fees. Gonzales, however, failed to appear in 2
consecutive hearings despite notice, meriting the dismissal by the Labor
Arbiter of his complaint by Order12 of September 17, 1998.
Gonzales refiled on July 13, 1999 his complaint for illegal dismissal13 against
Angerbauer and Kennedy, which he amended14 on September 20, 1999, by
impleading Acesite as respondent.
After the filing of their respective position papers, pleadings and documentary
evidence, the Labor Arbiter, by Decision of February 7, 2000, dismissed the
complaint for lack of merit, it holding that Gonzales was dismissed for just
cause and was not denied of due process.
Gonzales appealed to the National Labor Relations Commission (NLRC), he
faulting the Labor Arbiter as follows:
13
I
The Labor Arbiter committed grave abuse of discretion in dismissing the
complaint for lack of merit.
II
The Labor Arbiter seriously erred in the finding of facts, which caused grave or
irreparable damage or injury to the complainant/appellant.
III
The Labor Arbiter seriously erred in the finding that there was absence of due
process in the dismissal of the complaint.15
By Decision16 of December 29, 2000, the NLRC reversed that of the Labor
Arbiter, the dispositive portion of which is quoted verbatim:
WHEREFORE, PREMISES CONSIDERED, the decision of Labor Arbiter Geobel A.
Bartolabac dated February 7, 2000 is hereby, REVERSED. Respondents are
hereby ordered:
1) to immediately reinstate complainant to his former position without loss of
seniority rights;
2) to pay complainant backwages beginning for the period May 16, 1998, until
he is actually reinstated, inclusive of all his other fringe benefits or their
monetary equivalent;
3) to pay complainant the sum of P800,000.00 pesos as moral damages and the
equal amount of P800,000.00 as and for exemplary damages;
4) to pay ten (10) per cent attorney’s fees. (Underscoring supplied)
Acesite thereupon filed a petition for certiorari before the Court of Appeals
anchored on the following grounds:
I. THE NLRC GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OF
JURISDICTION WHEN IT REVERSED THE FINDING OF THE LABOR ARBITER
THAT THE RESPONDENT WAS LEGALLY DISMISSED FOR JUST CAUSE[.]
II. THE NLRC GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OF
JURISDICTION WHEN IT REVERSED THE FINDING OF THE LABOR ARBITER
THAT THE RESPONDENT WAS AFFORDED PROCEDURAL DUE PROCESS[.]
III. THE NLRC GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OF
JURISDICTION WHEN IT REVERSED THE FINDING OF THE LABOR ARBITER
THAT THE RESPONDENT IS NOT ENTITLED TO HIS MONEY CLAIMS[.]
IV. THE NLRC GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OF
JURISDICTION WHEN IT INCLUDED PETITIONERS PHIL KENNEDY AND
JOHANN ANGERBAUER LIABLE TO THE RESPONDENT NOTWITHSTANDING
THE FACT THEY ARE MERE EMPLOYEES OF THE HOTEL[.]17
By Decision18 of October 12, 2001, the Court of Appeals, finding that Gonzales
was illegally dismissed, affirmed with modification the NLRC decision:
After a careful study of the evidence on record and of the allegations of both
parties, this Court is convinced that private respondent Gonzales was illegally
dismissed.
The parties hereto contest the receipt by private respondent Gonzales of the
first telegram sent by petitioner Angerbauer.1awphi1.nét Since the evidence of
petitioners is merely a piece of paper supposedly containing the contents of the
telegram sent to the former, We cannot accept the same as proof that indeed a
telegram was sent and was thereafter received by private respondent Gonzales.
The burden of proof is upon petitioners to show that indeed the latter received
the same.
Insofar as private respondent Gonzales’ failure to report for work on May 1,
1998, we give credence to the medical certificate he submitted to prove that he
was indeed indisposed during the period in controversy especially in the light
of the fact that the same was issued by his rival in the political arena, Dr.
Laureano C. Gonzales, Jr., We do not think Dr. Gonzales who likewise ran for the
same elective position as herein private respondent Gonzales would help him
cover up his absences if he really did not treat the latter and had him under his
care. Thus, his failure to report for work on May 1, 1998 was justified.
As to the third telegram, the final notice by petitioners to private respondent
Gonzales, which directed him to report for work immediately upon receipt
thereof, was complied with by the latter when he reported to the hotel on May
8, 1998 but was refused entry. Petitioners insist that he did not report to work.
14
Private respondent Gonzales however submitted an official receipt of his
diesoline purchase to evidence the fact that he went to Manila on said date.
And even granting arguendo that private respondent Gonzales did not heed the
same, his immediate termination was still unwarranted despite the provision
on petitioner’s House Code of Discipline.
Article 277 of the Labor Code, as amended, provides:
ART. 277. Miscellaneous provisions. – (a) x x x.
(b) Subject to the constitutional right of workers to security of tenure and their
right to be protected against dismissal except for just and authorized cause and
without prejudice to the requirement of notice under Article 283 of this Code,
the employer shall furnish the worker whose employment is sought to be
terminated a written notice containing a statement of the causes for
termination and shall afford the latter ample opportunity to be heard and
defend himself with the assistance of his representative if he so desires in
accordance with company rules and regulations promulgated pursuant to
guidelines set by the Department of Labor and Employment. Any decision taken
by the employer shall be without prejudice to the right of the worker to contest
the validity or legality of his dismissal by filing a complaint with the regional
branch of the National Labor Relations Commission. The burden of proving that
the termination was for a valid or authorized cause shall rest on the employer.
The Secretary of the Department of Labor and Employment may certify the
dispute in the event of a prima facie finding by the appropriate official of the
Department of Labor and Employment before whom such dispute pending that
the termination may cause a serious labor dispute or is in implementation of a
mass lay-off.
xxx
In the present case, the records do not show compliance by petitioners with the
two (2)-notice rule prescribed in the above provision of law. Although several
telegrams were sent to private respondent Gonzales, there is not one (1)
telegram which contains a statement of the cause for his termination. The
telegram and the meeting held on May 4, 1998 requiring him to submit a
written explanation as to his absences did not apprise him that he was being
considered for termination. Moreover, he was not informed that an
investigation was being conducted vis-à-vis his continued absences and his
non-disclosure of the fact that he was running for public office.
In other words, no notice was sent by petitioners to apprise private respondent
Gonzales of the charges against him nor was he given ample opportunity to
contest said charges with the assistance of counsel, if he so desired. What
petitioners did was to send him a notice of termination on the premise that his
immediate dismissal is authorized under their House Code of Discipline. While
it is recognized that company policies and regulations, unless they are
oppressive or contrary to law, are generally valid and binding on the parties
and must be complied with, the same cannot be exercised for the purpose of
defeating the rights of the employees under the law.
Unfortunately for petitioners, their employees are still entitled to the
procedural requirements of notice and hearing despite provisions in their code
of discipline purportedly giving them the right to immediately terminate their
services. Employees cannot bargain away this right notwithstanding their
acquiescence to the employer’s rules.
As to petitioners’ claim that private respondent willfully disobeyed their
orders, the Supreme Court in the case of Lagatic vs. NLRC held:
In order that an employer may dismiss an employee on the ground of
willful disobedience, there must be concurrence of at least two (2)
requisites: the employee’s assailed conduct must have been willful or
intentional, the willingness being characterized by a wrongful and
perverse attitude; and that the order violated must have been reasonable,
lawful, made known to the employee and must pertain to the duties which
he had been engaged to discharge.
The present case does not show the presence of the first requisite. As private
respondent Gonzales’ failure to comply with petitioners’ orders were not
characterized by a perverse attitude. At most he can only be suspended from
service for assuming that his leaves of absence would be approved by
management. The penalty of dismissal is too harsh considering that private
respondent Gonzales has been with the company for almost five (5) years and
has rendered unblemished service until the period in controversy. For his
unauthorized absences, We hereby rule that a suspension of one (1) week is
commensurate to his violation of Type C, House Code of Discipline rule on
unauthorized absences.
Anent the alleged willful non-disclosure by private respondent Gonzales of his
candidacy for public office, We find the same to be unsupported by
evidence.l^vvphi1.net The tenor of private respondent Gonzales’ internal email
to petitioner Angerbauer reveals that the latter was aware that the reason for
15
the former’s prolonged absences was his ongoing campaign as Board Member
of the Province of Abra. Considering the same, We are inclined to believe
private respondent Gonzales’ version of the story.
Going now to the propriety of the monetary awards to private respondent
Gonzales, We find the amount P800,000.00 each as moral and exemplary
damages unwarranted. The collective amount of P100,000.00 as moral and
exemplary damages is just under the circumstances. Public respondent NLRC’s
award of ten (10) per cent attorney’s fees is affirmed.
WHEREFORE, premises considered, the Decision dated December 29, 2000 of
public respondent National Labor Relations Commission is hereby MODIFIED
as follows:
Petitioners are hereby ordered:
1. to reinstate private respondent Leo A. Gonzales to his former position
without loss of seniority rights or privileges. If reinstatement is no longer
feasible, then payment of separation pay equivalent to ½ month pay for every
year of service is hereby ordered;
2. to pay private respondent Leo A. Gonzales his full back wages commencing
on 14 May 1998 in view of his one (1) week suspension until he is actually
reinstated;
3. to pay P100,000.00 as moral and exemplary damages; and
4. to pay 10% of the total monetary award as and for attorney’s fees.
With costs against the petitioners.19 (Emphasis and underscoring supplied)
Hence, the two separate petitions of Acesite and Gonzales.
In its petition, Acesite contends that:
I
THE COURT OF APPEALS GRAVELY ERRED WHEN IT DID NOT AFFIRM THE
FINDING OF THE LABOR ARBITER THAT THE RESPONDENT WAS LEGALLY
DISMISSED FOR JUST CAUSE.
II
THE COURT OF APPEALS GRAVELY ERRED WHEN IT REVERSED THE FINDING
OF THE LABOR ARBITER THAT RESPONDENT WAS AFFORDED PROCEDURAL
DUE PROCESS.
III
THE COURT OF APPEALS GRAVELY ERRED WHEN IT REVERSED THE FINDING
OF THE LABOR ARBITER THAT THE RESPONDENT IS NOT ENTITLED TO HIS
MONEY CLAIMS.20
Gonzales, on the other hand, posits in his petition that:
I it is part of his job to implement it;23 and the medical certificate accomplished
[THE COURT OF APPEALS] GRAVELY ERRED IN DELETING THE AWARDS OF
FRINGE BENEFITS OR THEIR MONETARY EQUIVALENTS WHICH THE NLRC
ORDERED TO BE GIVEN TO THE PETITIONER FROM THE TIME HE WAS
ILLEGALLY DISMISSED UP TO HIS ACTUAL REINSTATEMENT.
II
[THE COURT OF APPEALS] SERIOUSLY ERRED IN BESTOWING TO THE
PRIVATE RESPONDENTS THE OPTION WHETHER TO REINSTATE THE
PETITIONER OR NOT.
III
[THE COURT OF APPEALS] ERRED IN SUBSTANTIALLY REDUCING THE
AMOUNT OF AWARDS OF MORAL AND EXEMPLARY DAMAGES WHICH THE
NLRC DESERVINGLY ADJUDGED TO BE ACCORDED TO THE PETITIONER.21
Acesite argues that there was just cause for Gonzales’ termination under Article
282 of the Labor Code, the pertinent provision of which reads:
ART. 282 TERMINATION BY EMPLOYER. – An employer may terminate an
employment for any of the following causes:
16
(a) Serious Misconduct of willful Disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
(b) Gross and habitual Neglect by the employee of his duties;
xxx
For, so Acesite claims, Gonzales "showed no respect for x x x [the] lawful orders
for him to report back to work and repeatedly ignored all telegrams sent to
him,"22 and it merely exercised its legal right to dismiss him under the House
Code of Discipline which imposes dismissal as penalty for a violation of Rule 27
thereof.
Acesite further claims that Gonzales cannot feign ignorance of said rule because
by a Dr. Gonzales who "could very well be a relative," was issued in Quezon City
on May 3, 1998 whereas it stated that Gonzales was under the physician’s care
in Abra from April 30 to May 3, 1998.
Acesite furthermore claims that, as correctly ruled by the Labor Arbiter, the
facts by any standard suffice to cause it to lose its trust and confidence in
Gonzales especially his concealment that he was seeking an elective post in
Abra during the 1998 elections which would explain why he did not report for
work as directed;24 and that Gonzales was afforded procedural due process as
the twin requirements of notice and hearing were complied with through the
numerous telegrams sent to both Gonzales’ city and provincial addresses
asking him to report for work and explain his unauthorized absences.25
This Court finds no reason to depart from the findings of the Court of Appeals.
Indeed, there appears to have been no just cause to dismiss Gonzales from
employment. As correctly ruled by the Court of Appeals, Gonzales cannot be
considered to have willfully disobeyed his employer. Willful disobedience
entails the concurrence of at least two (2) requisites: the employee’s assailed
conduct has been willful or intentional, the willfulness being characterized by a
"wrongful and perverse attitude;" and the order violated must have been
reasonable, lawful, made known to the employee and must pertain to the duties
which he had been engaged to discharge.26
In Gonzales’ case, his assailed conduct has not been shown to have been
characterized by a perverse attitude, hence, the first requisite is wanting. His
receipt of the telegram disapproving his application for emergency leave
starting April 30, 1998 has not been shown. And it cannot be said that he
disobeyed the May 5, 1998 telegram since he received it only on May 7, 1998.
On the contrary, that he immediately hied back to Manila upon receipt thereof
negates a perverse attitude.
As to Gonzales’ alleged concealment of his candidacy (for provincial board
member) as a ground for Acesite’s loss of trust and confidence in him, the same
is not impressed with merit. It should be noted that Acesite’s ground for
terminating the services of Gonzales as stated in the Notice of Termination is
his alleged acts of insubordination/disobedience. The concealment of
candidacy angle harped upon by Acesite can only thus be considered as mere
afterthought to further justify his illegal dismissal.
With regards to Gonzales’ perceived feigning of illness, the same is purely
speculatory.
If there is anything that Gonzales can be faulted for, it is his being too
presumptuous that his application for leave would be approved. For his
unauthorized absences, this Court finds that Gonzales violated paragraph 26,
Rule 11 of Type B offenses of the Company’s House Code of Discipline –
unauthorized absence from work for three consecutive days27 – which is
punishable by a suspension of 3 days on the first offense – when he did not
report for work from May 5-7, 1998.
As for Gonzales’ petition before this Court, he argues that the Court of Appeals,
absent any reason, modified the decision of the NLRC by deleting or eliminating
the "other fringe benefits or their monetary equivalent;"28 that the said court
should not have given Acesite the option to reinstate him or not since the case
at bar does not fall under circumstances for which reinstatement is no longer
possible; that even assuming that his reinstatement is not in the interest of
labor, the severance pay of ½ month pay ordered by the appellate court is not
in accordance with law and jurisprudence; and that the reduction of the moral
and exemplary damages awarded him by the NLRC was erroneous.
In illegal dismissal cases, reinstatement to an illegally dismissed employee’s
former position may be excused on the ground of "strained relations." This may
be invoked against employees whose positions demand trust and confidence, or
whose differences with their employer are of such nature or degree as to
preclude reinstatement.29 In the case at bar, Gonzales was Chief of Security,
whose duty was to "manage the operation of the security areas of the hotel to
provide and ensure the safety and security of the hotel guests, visitors,
management, staff and their properties according to company policies and local
laws."30 It cannot be gainsaid that Gonzales’ position is one of trust and
17
confidence, he being in charge of the over-all security of said hotel. Thus,
reinstatement is no longer possible. In lieu thereof, Acesite is liable to pay
separation pay of 1 month for every year of service.
As to the award of moral and exemplary damages, this Court finds it
unwarranted. Moral damages are recoverable only where the dismissal of the
employees was attended by bad faith or fraud or constituted an act oppressive
to labor or was done in a manner contrary to morals, good customs or public
policy. Exemplary damages on the other hand may be awarded only if the
dismissal was effected in a wanton, oppressive or malevolent manner.31
Though these grounds have been alleged by Gonzales, they were not sufficiently
proven.l^vvphi1.net
The appellate court affirmed the NLRC ruling that Angerbauer and Kennedy are
solidarily liable with Acesite. In the case of Bogo-Medellin Sugarcane Planters
Association, Inc. v. NLRC ,32 this Court ruled:
Unless they have exceeded their authority, corporate officers are, as a general
rule, not personally liable for their official acts, because a corporation, by legal
fiction, has a personality separate and distinct from its officers, stockholders
and members. However, this fictional veil may be pierced whenever the
corporate personality is used as a means of perpetuating fraud or an illegal act,
evading an existing obligation, or confusing a legitimate issue. In cases of illegal
dismissal, corporate directors and officers are solidarily liable with the
corporation, where terminations of employment are done with malice or in bad
faith. (Underscoring supplied, citations omitted)
In holding Angerbauer and Kennedy solidarily liable, the NLRC intended "to
deter other foreign employer[s] from repeating the inhuman treatment of their
Filipino employees who should be treated with equal respect especially in their
own land and prevent further violation of their human rights as employees."
The records of the case do not, however, show any inhuman treatment of
Gonzales. His superiors just happen to be foreigners. Moreover, as previously
discussed, bad faith or malice was not proven. Angerbauer, acting on behalf of
Acesite, was, like Gonzales, perhaps also too presumptuous in thinking that the
telegrams ordering the latter to report for work were all received on time,
drawing him to hastily conclude that Gonzales intentionally disobeyed the
orders contained therein.
As to the deletion of the "fringe benefits or their monetary equivalent," this
Court agrees with Gonzales that it is not in accord with law and jurisprudence.
Article 279 of the Labor Code provides:
ART. 279 SECURITY OF TENURE. – In cases of regular employment, the
employer shall not terminate the services of an employee except for just cause
or when authorized by this Title. An employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement. (Emphasis and underscoring supplied)
As for the award of attorney’s fees, the same is in order, Gonzales having been
forced to litigate and incur expenses to protect his rights and interest.33 This
Court, however, reduces the award to ₱10,000.00.
In fine, this Court affirms the assailed decision with modification in light of the
foregoing discussions.
WHEREFORE, as modified, the decision reads as follows:
1) Acesite Corporation is hereby ordered to pay Leo A. Gonzales:
a) his full backwages, inclusive of allowances, and his other benefits or their
monetary equivalent, to be computed from the time he was illegally dismissed
until the finality of this Decision less 3 days in view of his suspension;
b) separation pay equivalent to his 1 month salary for every year of service
computed from the time Gonzales was first employed by Acesite until the
finality of this Decision;
c) P10,000.00 as attorney’s fees; and
2) The complaint against Johann Angerbauer and Phil Kennedy is hereby
DISMISSED.
No pronouncement as to costs.
SO ORDERED.
18
G.R. No. 171630 August 8, 2010
CENTURY CANNING CORPORATION, RICARDO T. PO, JR. and AMANCIO C.
RONQUILLO, Petitioners,
vs.
VICENTE RANDY R. RAMIL, Respondent.
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to set aside the Decision1 and Resolution2 of the Court of
Appeals (CA) in CA-G.R. SP. No. 86939, dated December 1, 2005 and February
17, 2006, respectively.
The antecedents are as follows:
Petitioner Century Canning Corporation, a company engaged in canned food
manufacturing, employed respondent Vicente Randy Ramil in August 1993 as
technical specialist. Prior to his dismissal on May 20, 1999, his job included,
among others, the preparation of the purchase requisition (PR) forms and
capital expenditure (CAPEX) forms, as well as the coordination with the
purchasing department regarding technical inquiries on needed products and
services of petitioner's different departments.
On March 3, 1999, respondent prepared a CAPEX form for external fax modems
and terminal server, per order of Technical Operations Manager Jaime Garcia,
Jr. and endorsed it to Marivic Villanueva, Secretary of Executive Vice-President
Ricardo T. Po, for the latter's signature. The CAPEX form, however, did not have
the complete details3 and some required signatures.4 The following day, March
4, 1999, with the form apparently signed by Po, respondent transmitted it to
Purchasing Officer Lorena Paz in Taguig Main Office. Paz processed the paper
and found that some details in the CAPEX form were left blank. She also
doubted the genuineness of the signature of Po, as appearing in the form. Paz
then transmitted the CAPEX form to Purchasing Manager Virgie Garcia and
informed her of the questionable signature of Po. Consequently, the request for
the equipment was put on hold due to Po's forged signature. However, due to
the urgency of purchasing badly needed equipment, respondent was ordered to
make another CAPEX form, which was immediately transmitted to the
Purchasing Department.
Suspecting him to have committed forgery, respondent was asked to explain in
writing the events surrounding the incident. He vehemently denied any
participation in the alleged forgery. Respondent was, thereafter, suspended on
April 21, 1999. Subsequently, he received a Notice of Termination from
Armando C. Ronquillo, on May 20, 1999, for loss of trust and confidence.
Due to the foregoing, respondent, on May 24, 1999, filed a Complaint for illegal
dismissal, non-payment of overtime pay, separation pay, moral and exemplary
damages and attorney's fees against petitioner and its officers before the Labor
Arbiter (LA), and was docketed as NLRC-NCR Case No. 00-05-05894-99.5
LA Potenciano S. Canizares rendered a Decision6 dated December 6, 1999
dismissing the complaint for lack of merit. Aggrieved by the LA's finding,
respondent appealed to the National Labor Relations Commission (NLRC).
Upon recommendation of LA Cristeta D. Tamayo, who reviewed the case, the
NLRC First Division, in its Decision7 dated August 26, 2002, set aside the ruling
of LA Canizares. The NLRC declared respondent's dismissal to be illegal and
directed petitioner to reinstate respondent with full backwages and seniority
rights and privileges. It found that petitioner failed to show clear and
convincing evidence that respondent was responsible for the forgery of the
signature of Po in the CAPEX form.
Petitioner filed a motion for reconsideration. To respondent's surprise and
dismay, the NLRC reversed itself and rendered a new Decision8 dated October
20, 2003, upholding LA Canizares' dismissal of his complaint. Respondent filed
a motion for reconsideration, which was denied by the NLRC.
Frustrated by this turn of events, respondent filed a petition for certiorari with
the CA. The CA, in its Decision dated December 1, 2005, rendered judgment in
favor of respondent and reinstated the earlier decision of the NLRC, dated
August 26, 2002. It ordered petitioner to reinstate respondent, without loss of
seniority rights and privileges, and to pay respondent full backwages from the
time his employment was terminated on May 20, 1999 up to the time of the
finality of its decision. The CA, likewise, remanded the case to the LA for the
computation of backwages of the respondent.
Petitioner filed a motion for reconsideration, which the CA denied in a
Resolution dated February 17, 2006. Hence, the instant petition assigning the
following errors:
I External Fax Modem without the required CAPEX form and a PR form.
19
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DISREGARDING
THE UNANIMOUS FINDINGS OF THE LABOR ARBITER AND THE NATIONAL
LABOR RELATIONS COMMISSION SUSTAINING THE LEGALITY OF PRIVATE
RESPONDENT'S TERMINATION FROM HIS EMPLOYMENT.
II
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING
THAT PETITIONER CORPORATION FAILED TO SATISFY THE BURDEN OF
PROVING THAT THE DISMISSAL OF PRIVATE RESPONDENT WAS FOR A VALID
OR AUTHORIZED CAUSE.
III
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT
FOR LOSS OF TRUST AND CONFIDENCE TO BE A VALID GROUND FOR AN
EMPLOYEE'S DISMISSAL, IT MUST BE SUBSTANTIAL AND NOT ARBITRARY,
AND MUST BE FOUNDED ON CLEARLY ESTABLISHED FACTS, OVERLOOKING
THE RULE THAT THE MERE EXISTENCE OF A BASIS FOR BELIEVING THAT
SUCH EMPLOYEE HAS BREACHED THE TRUST AND CONFIDENCE OF HIS
EMPLOYER SUFFICES FOR HIS DISMISSAL.
IV
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING
THAT ASIDE FROM HIS INVOLVEMENT IN THE FORGERY OF THE CAPITAL
EXPENDITURE (CAPEX) FORMS, PRIVATE RESPONDENT'S PAST VIOLATIONS
OR ADMITTED INFRACTIONS OF COMPANY RULES AND REGULATIONS ARE
MORE THAN SUFFICIENT GROUNDS TO JUSTIFY THE TERMINATION OF HIS
EMPLOYMENT WITH PETITIONER CORPORATION.
Petitioner's main allegation is that there are factual and legal grounds
constituting substantial proof that respondent was clearly involved in the
forgery of the CAPEX form, i.e., respondent is the forger of the signature of Po,
as he is the custodian and the one who prepared the CAPEX form; the forged
signature was already existing when he submitted the same for processing; he
has the motive to forge the signature; respondent has the propensity to deviate
from the Standard Operating Procedure as shown by the fact that the CAPEX
form, with the forged signature of Po, is not complete in details and lacks the
required signatures; also, in February 1999, respondent ordered 8 units of
Petitioner insists that the mere existence of a basis for believing that
respondent employee has breached the trust and confidence of his employer
suffices for his dismissal. Finally, petitioner maintains that aside from
respondent's involvement in the forgery of the CAPEX form, his past violations
of company rules and regulations are more than sufficient grounds to justify his
termination from employment.
In his Comment, respondent alleged that petitioner failed to present clear and
convincing evidence to prove his participation in the charge of forgery nor any
damage to the petitioner.
Anent the first issue raised, petitioner faults the CA in disregarding the
unanimous findings of the LA and the NLRC sustaining the legality of
respondent's termination from his employment. The rule is that high respect is
accorded to the findings of fact of quasi-judicial agencies, more so in the case at
bar where both the LA and the NLRC share the same findings. The rule is not,
however, without exceptions one of which is when the findings of fact of the
labor officials on which the conclusion was based are not supported by
substantial evidence. The same holds true when it is perceived that far too
much is concluded, inferred or deduced from bare facts adduced in evidence. 9
In the case at bar, the NLRC's findings of fact upon which its conclusion was
based are not supported by substantial evidence, that is, the amount of relevant
evidence, which a reasonable mind might accept as adequate to justify a
conclusion.10
As correctly found by the CA:
x x x The record of the case is bereft of evidence that would clearly establish
Ramil's involvement in the forgery. They did not even submit any affidavit of
witness11 or present any during the hearing to substantiate their claim against
Ramil.12
Respondent alleged in his position paper that after preparing the CAPEX form
on March 3, 1999, he endorsed it to Marivic Villanueva for the signature of the
Executive Vice-President Ricardo T. Po. The next day, March 4, 1999,
respondent received the CAPEX form containing the signature of Po. Petitioner
never controverted these allegations in the proceedings before the NLRC and
the CA despite its opportunity to do so. Petitioner's belated allegations in its
reply filed before this Court that Marivic Villanueva denied having seen the
CAPEX form cannot be given credit. Points of law, theories, issues and
arguments not brought to the attention of the lower court, administrative
20
agency or quasi-judicial body need not be considered by a reviewing court, as
they cannot be raised for the first time at that late stage.13 When a party
deliberately adopts a certain theory and the case is decided upon that theory in
the court below, he will not be permitted to change the same on appeal,
because to permit him to do so would be unfair to the adverse party.14
Thus, if respondent retrieved the form on March 4, 1999 with the signature of
Po, it can be correctly inferred that he is not the forger. Had the CAPEX form
been returned to respondent without Po's signature, Villanueva or any officer
of the petitioner's company could have readily noticed the lack of signature,
and could have easily attested that the form was unsigned when it was released
to respondent.
Further, as correctly found by the NLRC in its original decision dated August 26,
2002, if respondent was the one who forged the signature of Po in the CAPEX
form, there was no need for him to endorse the same to Villanueva and
transmit it the next day. He could have easily forged the signature of Po on the
same day that he prepared the CAPEX form and submitted it on the very same
day to petitioner's main office without passing through any officer of petitioner.
Accordingly, for want of substantial basis, in fact or in law, factual findings of an
administrative agency, such as the NLRC, cannot be given the stamp of finality
and conclusiveness normally accorded to it, as even decisions of administrative
agencies which are declared "final" by law are not exempt from judicial review
when so warranted.15 Contrary to petitioner’s assertion, therefore, this Court
sees no error on the part of the CA when it made a new determination of the
case and, upon this, reversed the ruling of the NLRC.
As to the second issue, the law mandates that the burden of proving the validity
of the termination of employment rests with the employer. Failure to discharge
this evidentiary burden would necessarily mean that the dismissal was not
justified and, therefore, illegal. Unsubstantiated suspicions, accusations, and
conclusions of employers do not provide for legal justification for dismissing
employees. In case of doubt, such cases should be resolved in favor of labor,
pursuant to the social justice policy of labor laws and the Constitution.16
The termination letter17 addressed to respondent, dated May 20, 1999,
provides that:
We also conducted inquiries from persons concerned to get more information
in (sic) this forgery. Some of your statements do not jibe with theirs. x x x
However, this information which petitioner allegedly obtained from the
"persons concerned" was not backed-up by any affidavit or proof. Petitioner did
not even bother to name these resource persons.
Petitioner based respondent's dismissal on its unsubstantiated suspicions and
conclusion that since respondent was the custodian and the one who prepared
the CAPEX forms, he had the motive to commit the forgery. However, as
correctly found by the NLRC in its original Decision, respondent would not be
benefited by the purchase of the subject equipment. The equipment would be
for the use of petitioner company.
With respect to the third issue, while We have previously held that employers
are allowed a wider latitude of discretion in terminating the services of
employees who perform functions which by their nature require the
employers' full trust and confidence and the mere existence of basis for
believing that the employee has breached the trust of the employer is
sufficient,18 this does not mean that the said basis may be arbitrary and
unfounded.
The right of an employer to dismiss an employee on the ground that it has lost
its trust and confidence in him must not be exercised arbitrarily and without
just cause.19 Loss of trust and confidence, to be a valid cause for dismissal, must
be based on a willful breach of trust20 and founded on clearly established facts.
The basis for the dismissal must be clearly and convincingly established, but
proof beyond reasonable doubt is not necessary.21 It must rest on substantial
grounds and not on the employer’s arbitrariness, whim, caprice or suspicion;
otherwise, the employee would eternally remain at the mercy of the
employer.22
The case of Philippine Airlines, Inc. v. Tongson,23 cited by the petitioner, is not
applicable to the present case. In that case, PAL dismissed Tongson from
service on the ground of corruption, extortion and bribery in the processing of
PAL's passengers' travel documents. We upheld the validity of Tongson's
dismissal because PAL's overwhelming documentary evidence reflects an
unbroken chain which naturally leads to one fair and reasonable conclusion,
that at the very least, respondent was involved in extorting money from PAL's
passengers. We further said that even if there is no direct evidence to prove
that the employees actually committed the offense, substantial proof based on
documentary evidence is sufficient to warrant their dismissal from
employment.
21
In the case at bar, there is neither direct evidence nor substantial documentary
evidence pointing to respondent as the one liable for the forgery of the
signature of Po.1avvphi1
The cited case of Deles Jr. v. National Labor Relations Commission24 is also
inapplicable. Therein dismissed employee, Deles Jr., himself admitted during
the company investigation that he tampered with the company's sensitive
equipment (the JTF Gravitometer No. 5). Thus, there existed sufficient basis for
the finding that therein employee breached the trust and confidence of his
employer.
As for the final issue raised, petitioner's reliance on respondent's previous
tardiness in reporting for work as a ground for his dismissal is likewise not
meritorious. The correct rule has always been that such previous offense may
be used as valid justification for dismissal from work only if the infractions are
related to the subsequent offense upon which the basis of termination is
decreed.25 His previous offenses were entirely separate and distinct from his
latest alleged infraction of forgery. Hence, the same could no longer be utilized
as an added justification for his dismissal.
Besides, respondent had already been sanctioned for his prior infractions. To
consider these offenses as justification for his dismissal would be penalizing
respondent twice for the same offense.26
Respondent's illegal dismissal carries the legal consequences defined under
Article 279 of the Labor Code, that is, an employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights
and other privileges, and to the payment of his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent, computed
from the time his compensation was withheld from him up to the time of his
actual reinstatement.27
However, the Court finds that it would be best to award separation pay instead
of reinstatement, in view of the strained relations between petitioner and
respondent. Respondent was dismissed due to loss of trust and confidence and
it would be impractical to reinstate an employee whom the employer does not
trust, and whose task is to handle and prepare delicate documents.
Under the doctrine of strained relations, the payment of separation pay has
been considered an acceptable alternative to reinstatement when the latter
option is no longer desirable or viable. On the one hand, such payment liberates
the employee from what could be a highly oppressive work environment. On
the other hand, the payment releases the employer from the grossly must undergo before locating a replacement job. x x x The grant of separation
unpalatable obligation of maintaining in its employ a worker it could no longer pay was a proper substitute only for reinstatement; it could not be an adequate
trust.28 substitute both for reinstatement and for backwages. (Emphasis supplied.) 31

In view of the foregoing, respondent is entitled to the payment of full The case is, therefore, remanded to the Labor Arbiter for the purpose of
backwages, inclusive of allowances, and other benefits or their monetary computing the proper monetary award due to the respondent.
equivalent, computed from the date of his dismissal on May 20, 1999 up to the
finality of this decision, and separation pay in lieu of reinstatement equivalent WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court
to one month salary for every year of service, computed from the time of his of Appeals in CA-G.R. SP No. 86939, dated December 1, 2005 and February 17,
engagement by petitioner on August 1993 up to the finality of the decision. 29 2006, respectively, are AFFIRMED with MODIFICATION that the order of
reinstatement is deleted, and in lieu thereof, Petitioner Century Canning
The awards of separation pay and backwages are not mutually exclusive and Corporation is DIRECTED to pay respondent separation pay.
both may be given to the respondent. In Nissan North Edsa Balintawak, Quezon
City v. Serrano, Jr.,30 the Court held that: The case is REMANDED to the Labor Arbiter for the purpose of computing
respondent's full backwages, inclusive of allowances, and other benefits or
The normal consequences of a finding that an employee has been illegally their monetary equivalent, computed from the date of his dismissal on May 20,
dismissed are, firstly, that the employee becomes entitled to reinstatement to 1999 up to the finality of the decision, and separation pay in lieu of
his former position without loss of seniority rights and, secondly, the payment reinstatement equivalent to one month salary for every year of service,
of backwages corresponding to the period from his illegal dismissal up to actual computed from the time of his engagement by petitioner on August 1993 up to
reinstatement. The statutory intent on this matter is clearly discernible. the finality of this decision.
Reinstatement restores the employee who was unjustly dismissed to the
position from which he was removed, that is, to his status quo ante dismissal, SO ORDERED.
while the grant of backwages allows the same employee to recover from the
employer that which he had lost by way of wages as a result of his dismissal.
These twin remedies —reinstatement and payment of backwages — make the
dismissed employee whole who can then look forward to continued
employment. Thus, do these two remedies give meaning and substance to the
constitutional right of labor to security of tenure. The two forms of relief are
distinct and separate, one from the other. Though the grant of reinstatement
commonly carries with it an award of backwages, the inappropriateness or
non-availability of one does not carry with it the inappropriateness or non-
availability of the other. x x x As the term suggests, separation pay is the
amount that an employee receives at the time of his severance from the service
and x x x is designed to provide the employee with "the wherewithal during the
period that he is looking for another employment." In the instant case, the grant
of separation pay was a substitute for immediate and continued re-employment
with the private respondent Bank. The grant of separation pay did not redress
the injury that is intended to be relieved by the second remedy of backwages,
that is, the loss of earnings that would have accrued to the dismissed employee
during the period between dismissal and reinstatement. Put a little differently,
payment of backwages is a form of relief that restores the income that was lost
by reason of unlawful dismissal; separation pay, in contrast, is oriented
towards the immediate future, the transitional period the dismissed employee

22
G.R. No. 152166 October 20, 2010
ST. LUKE'S MEDICAL CENTER, INC. and ROBERT KUAN, Chairman,
Petitioners,
vs.
ESTRELITO NOTARIO, Respondent.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari seeking to set aside the
Decision1 dated September 21, 2001 and Resolution2 dated February 12, 2002
of the Court of Appeals (CA), Second Division, in CA-G.R. SP No. 58808, entitled
St. Luke’s Medical Center, Inc. and Robert Kuan, Chairman v. National Labor
Relations Commission and Estrelito Notario, which affirmed the Resolutions
dated January 19, 20003 and March 20, 20004 of the National Labor Relations
Commission (NLRC), Third Division, in NLRC NCR Case No. 00-03-02177-97.
The NLRC Resolution dated January 19, 2000 reversed and set aside the
Decision5 dated November 11, 1998 of the Labor Arbiter dismissing
respondent’s complaint for illegal dismissal against petitioners, St. Luke's
Medical Center, Inc. and its Chairman, Robert Kuan, and ordered them to
reinstate respondent to his former position, without loss of seniority rights and
other benefits and full backwages from the date of dismissal until actual
reinstatement, and should reinstatement be no longer feasible, to further pay
him separation pay equivalent to one (1) month’s pay for every year of service,
with the following monetary award, namely, backwages of ₱250,229.97 and
separation pay of ₱31,365.00, or a total amount of ₱281,594.97.
The antecedent facts are as follows:
On June 23, 1995, St. Luke’s Medical Center, Inc. (petitioner hospital), located at
Quezon City, employed respondent as In-House Security Guard. In August 1996,
Nimaya Electro Corporation installed a closed-circuit television (CCTV) system
in the premises of petitioner hospital to enhance its security measures6 and
conducted an orientation seminar for the in-house security personnel on the
proper way of monitoring video cameras, subject to certain guidelines.7
On December 30, 1996, respondent was on duty from 6:00 p.m. to 6:00 a.m. of
the following day, December 31, 1996. His work consisted mainly of monitoring
the video cameras. In the evening of December 30, 1996, Justin Tibon, a
foreigner from Majuro, Marshall Island, then attending to his 3-year-old
23
daughter, Andanie De Brum, who was admitted since December 20, 1996 at
room 257, cardiovascular unit of petitioner hospital, reported to the
management of petitioner hospital about the loss of his mint green traveling
bag, which was placed inside the cabinet, containing, among others, two (2)
Continental Airlines tickets, two (2) passports, and some clothes. Acting on the
complaint of Tibon, the Security Department of petitioner hospital conducted
an investigation. When the tapes of video camera recorder (VCR) no. 3 covering
the subject period were reviewed, it was shown that the VCR was focused on
camera no. 2 (Old Maternity Unit), from 2103H to 2215H [or 9:03 p.m. to 10:15
p.m.] of December 30, 1996, and camera no. 1 (New Maternity Unit), from
0025H to 0600H [or 12:25 a.m. to 6:00 a.m.] of December 31, 1996. The
cameras failed to record any incident of theft at room 257.
On January 6, 1997, petitioner hospital, through Abdul A. Karim, issued a
Memorandum8 to respondent, the CCTV monitoring staff on duty, directing him
to explain in writing, within 24 hours upon receipt thereof, why no disciplinary
action should be taken against him for violating the normal
rotation/sequencing process of the VCR and, consequently, failed to capture the
theft of Tibon's traveling bag at room 257.
In his letter9 dated January 6, 1997, respondent explained that on the subject
dates, he was the only personnel on duty as nobody wanted to assist him.
Because of this, he decided to focus the cameras on the Old and New Maternity
Units, as these two units have high incidence of crime.
Finding the written explanation of respondent to be unsatisfactory, petitioner
hospital, through Calixton, served on respondent a copy of the Notice of
Termination,10 dated January 24, 1997, dismissing him on the ground of gross
negligence/inefficiency under Section 1, Rule VII of its Code of Discipline.
Thus, on March 19, 1997, respondent filed a Complaint11 for illegal dismissal
against petitioner hospital and its Chairman, Robert Kuan, seeking
reinstatement with payment of full backwages from the time of his dismissal up
to actual reinstatement, without of loss of seniority rights and other benefits.
Petitioners countered that they validly dismissed respondent for gross
negligence and observed due process before terminating his employment.
On November 11, 1998, the Labor Arbiter dismissed respondent’s complaint
for illegal dismissal against petitioners. He stated that a CCTV monitoring
system is designed to focus on many areas in a programmed and sequential
manner and should not to be focused only on a specific area, unless the
situation requires it. He concluded that during respondent’s duty from
December 30 to 31, 1996, he was negligent in focusing the cameras at the Old
and New Maternity Units only and, consequently, the theft committed at room
257 was not recorded. He said that respondent’s infraction exposed petitioners
to the possibility of a damage suit that may be filed against them arising from
the theft.
On appeal by the respondent, the NLRC issued a Resolution dated January 19,
2000, reversing the Decision of the Labor Arbiter. It stated that petitioners
failed to submit proof that there was an existing Standard Operating Procedure
(SOP) in the CCTV monitoring system, particularly on the focusing procedure. It
observed that respondent was not negligent when he focused the cameras on
the Old and New Maternity Units, as they were located near the stairways and
elevators, which were frequented by many visitors and, thus, there is the
likelihood that untoward incidents may arise. If at all, it treated the matter as a
single or isolated act of simple negligence which did not constitute a just cause
for the dismissal of an employee. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, the decision dated November 11, 1998 is
hereby SET ASIDE and a new one entered ordering respondents-appellees to
reinstate complainant-appellant to his former position without loss of seniority
rights and other benefits, with full backwages from the date of dismissal until
actual reinstatement. Should reinstatement be no longer feasible, to further pay
complainant-appellant separation pay equivalent to one (1) month pay for
every year of service.
As computed, complainant-appellant’s monetary award as of this date of
decision are as follows:
Backwages …………….. ₱250,229.97
Separation Pay………… + 31,365.00
Total …..........…………. ₱281,594.97
SO ORDERED.12
On February 14, 2000, petitioners filed a Motion for Reconsideration, but the
same was denied by the NLRC in its Resolution dated March 20, 2000.
24
On September 21, 2001, the CA dismissed petitioners' petition for certiorari,
affirming the NLRC’s finding that while respondent may appear to be negligent
in monitoring the cameras on the subject dates, the same would not constitute
sufficient ground to terminate his employment. Even assuming that
respondent’s act would constitute gross negligence, it ruled that the ultimate
penalty of dismissal was not proper as it was not habitual, and that there was
no proof of pecuniary injury upon petitioner hospital. Moreover, it declared
that petitioners failed to comply with the twin notice rule and hearing as what
they did was to require respondent to submit a written explanation, within 24
hours and, thereafter, he was ordered dismissed, without affording him an
opportunity to be heard.
As their motion for reconsideration was denied in the CA's Resolution dated
February 12, 2002, petitioners filed this present petition.
Petitioners allege that, by not focusing the CCTV cameras on the different areas
of the hospital, respondent committed gross negligence which warrants his
dismissal. According to them, there was no need to prove that the act done was
habitual, as the occurrence of the theft exposed them to possible law suit and,
additionally, there might be a repetition of a similar incident in the future if
respondent would remain in their employ.
Respondent maintains that he was not negligent in the discharge of his duties.
He said that there was no actual loss to petitioner hospital as no complaint or
legal action was taken against them and that the supposed complainant, Tibon,
did not even report the matter to the police authorities.
Contrary to the stance of petitioners, respondent was illegally dismissed
without just cause and compliance with the notice requirement.
Article 282 (b) of the Labor Code provides that an employer may terminate an
employment for gross and habitual neglect by the employee of his duties.
Corollarily, regarding termination of employment, Section 2(a) and (d), Rule 1,
Book VI of the Omnibus Rules Implementing the Labor Code, as amended,
provides that:
Section 2. Security of Tenure. (a) In cases of regular employment, the employer
shall not terminate the services of an employee except for just or authorized
causes as provided by law, and subject to the requirements of due process.
xxxx
(d) In all cases of termination of employment, the following standards of due
process shall be substantially observed:
For termination of employment based on just causes as defined in Article 282
of the Labor Code:
(i) A written notice served on the employee specifying the ground or
grounds for termination, and giving said employee reasonable opportunity
within which to explain his side.
(ii) A hearing or conference during which the employee concerned,
with the assistance of counsel if he so desires is given opportunity to respond to
the charge, present his evidence, or rebut the evidence presented against him.
(iii) A written notice of termination served on the employee,
indicating that upon due consideration of all the circumstances, grounds have
been established to justify his termination.
xxxx
To effectuate a valid dismissal from employment by the employer, the Labor
Code has set twin requirements, namely: (1) the dismissal must be for any of
the causes provided in Article 282 of the Labor Code; and (2) the employee
must be given an opportunity to be heard and defend himself. This first
requisite is referred to as the substantive aspect, while the second is deemed as
the procedural aspect.13
An employer can terminate the services of an employee only for valid and just
causes which must be supported by clear and convincing evidence. The
employer has the burden of proving that the dismissal was indeed for a valid
and just cause.14
A perusal of petitioner hospital’s CCTV Monitoring Guidelines,15 disseminated
to all in-house security personnel, reveals that that there is no categorical
provision requiring an in-house security personnel to observe a rotation
sequence procedure in focusing the cameras so that the security monitoring
would cover as many areas as possible.
This fact is corroborated by Tito M. Maganis, petitioners' former In-House
Security Department Head, in his Affidavit16 dated October 28, 1997, stating,
among others:
25
xxxx
2. That as Department Head of the In-House Security of SLMC [St.
Luke’s Medical Center], I am familiar with the standard operating procedures
governing the conduct and operation of equipment and devices for observance
by all security personnel of SLMC to secure the premises;
3. That to the best of my personal knowledge, there had been no rules
on rotation/sequencing process of CCTVs disseminated for observance by
security personnel;
4. That in the past, there were occasions when the CCTVs were
focused on specific areas where untoward incidents usually happen; That no
penalty of dismissal had been imposed, thus far, on any security personnel
found focusing these CCTVs; and
xxxx
Further, the Certification17 dated April 14, 1998, issued by Himaya Electro
Corporation, indicating respondent as one of the participants in the orientation
conducted for in-house security personnel18 contradicted the joint statement,19
dated April 15, 1998, by therein participants, which excluded respondent as
one of the attendees. Thus, the certification cannot support petitioners’ theory
that respondent ought to know the rudiments of monitoring the CCTV cameras
on the basis that he was one of the participants in the said orientation.
Probably, respondent was listed as one of the participants, but he failed to
attend.
For his part, respondent denied having attended the said orientation and being
informed of the SOP of CCTV cameras. Despite the foregoing, respondent had
been efficiently performing his assigned task. In fact, in the Letter of
Commendation20 dated December 8, 1996, petitioner hospital, through Alfredo
D. Calixton, Jr., commended the vigilance of respondent and other four in-house
security personnel in preventing the occurrence of thefts and thwarting the loss
of the personal belongings of a confined patient.
Under Article 282 (b) of the Labor Code, an employer may terminate an
employee for gross and habitual neglect of duties. Neglect of duty, to be a
ground for dismissal, must be both gross and habitual. Gross negligence
connotes want of care in the performance of one’s duties. Habitual neglect
implies repeated failure to perform one’s duties for a period of time, depending
upon the circumstances. A single or isolated act of negligence does not
constitute a just cause for the dismissal of the employee.21 Under the prevailing
circumstances, respondent exercised his best judgment in monitoring the CCTV
cameras so as to ensure the security within the hospital premises. Verily,
assuming arguendo that respondent was negligent, although this Court finds
otherwise, the lapse or inaction could only be regarded as a single or isolated
act of negligence that cannot be categorized as habitual and, hence, not a just
cause for his dismissal.
Petitioners anchor on the postulate that even a single or isolated act of
negligence by respondent constitutes a just cause for his dismissal as it
engendered the possibility of a legal action that may be taken against them by
the owner of the lost items. This is purely speculative. The Certification,22 dated
July 8, 1999, issued by Renato Politud Valebia, Police Superintendent, Station
Commander of Galas Police Station (Station II), located at Unang Hakbang
Street, corner Luzon Avenue, Galas, Quezon City, stated that no incident of theft
was reported by the management of petitioner hospital or any of its authorized
representatives involving the loss of the plane tickets and other personal
belongings of Justin Tibon and Andanie De Brum. Even the supposed
complainant, Tibon, did not institute any complaint against petitioner hospital.
Therefore, it cannot be said that petitioners incurred actual loss or pecuniary
damage.
Petitioners question the findings of the CA that there was no compliance with
the twin-notice rule and hearing, while respondent maintains that they violated
his right to due process.1avvphi1
The employee must be furnished two written notices: the first notice apprises
the employee of the particular acts or omissions for which his dismissal is
sought, and the second is a subsequent notice, which informs the employee of
the employer's decision to dismiss him.23
The CA found that petitioner hospital failed to comply with the rule on twin
notice and hearing as it merely required respondent to give his written
explanation within 24 hours and, thereafter, ordered his dismissal.
The facts showed that on January 6, 1997, petitioner hospital, through Abdul A.
Karim, issued a Memorandum to respondent, with the directive to require him
to explain in writing, within 24 hours upon receipt thereof, why no disciplinary
action should be taken against him for violating the normal rotation or
sequencing process of the VCR which led to the loss of the traveling bag of
Tibon, the patient’s father, at room 257. On the same day, January 6, 1997,
respondent submitted a written explanation, stating that during the subject
26
hours on December 30 to 31, 1996, he was the only personnel on duty as
nobody wanted to assist him and, this being so, he decided to focus the cameras
on the Old and New Maternity Units as these two units usually have high
incidence of theft and other untoward incidents. Later, on January 24, 1997,
petitioner hospital served a copy of the Notice of Termination upon the
respondent for gross negligence/inefficiency.1awphil
Petitioners claim that since the dismissal of respondent was made in good faith,
as he even admitted his infraction, the award of backwages was erroneous;
while respondent seeks reinstatement with payment of full backwages from the
time of his dismissal up to actual reinstatement, without of loss of seniority
rights and other benefits.
Where the dismissal was without just cause and there was no due process,
Article 279 of the Labor Code, as amended, mandates that the employee is
entitled to reinstatement without loss of seniority rights and other privileges
and full backwages, inclusive of allowances and other benefits, or their
monetary equivalent computed from the time the compensation was not paid
up to the time of actual reinstatement.
The awards of separation pay and backwages are not mutually exclusive and
both may be given to respondent.24 An employee who is illegally dismissed is
entitled to the twin reliefs of full backwages and reinstatement. If
reinstatement is not viable, separation pay is awarded to the employee. In
awarding separation pay to an illegally dismissed employee, in lieu of
reinstatement, the amount to be awarded shall be equivalent to one month
salary for every year of service.25
Petitioners’ lack of just cause and non-compliance with the procedural
requisites in terminating respondent’s employment renders them guilty of
illegal dismissal. Consequently, respondent is entitled to reinstatement to his
former position without loss of seniority rights and payment of backwages.
However, if such reinstatement proves impracticable, and hardly in the best
interest of the parties, perhaps due to the lapse of time since his dismissal, or if
he decides not to be reinstated, respondent should be awarded separation pay
in lieu of reinstatement.26
Prescinding from the foregoing, the Court deems that since reinstatement is no
longer feasible due to the long passage of time, petitioners are required to pay
respondent his separation pay equivalent to one (1) month’s pay for every year
of service. Petitioners are thus ordered to pay respondent his backwages of
₱250,229.97 and separation pay of ₱31,365.00, or a total amount of
₱281,594.97.

WHEREFORE, the petition is DENIED. The Decision dated September 21, 2001
and Resolution dated February 12, 2002 of the Court of Appeals, Second
Division, in CA-G.R. SP No. 58808, which affirmed the Resolutions dated January
19, 2000 and March 20, 2000 of the National Labor Relations Commission,
Third Division, are AFFIRMED.

SO ORDERED.

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