CASE DOCTRINES

In constructive dismissal cases, the employer has the burden of proving that the transfer of
an employee is for just or valid ground, such as genuine business necessity. The employer
must demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the
employee and that the transfer does not involve a demotion in rank or a diminution in salary
and other benefits. If the employer fails to overcome this burden of proof, the employees
transfer is tantamount to unlawful constructive dismissal. (JULIES BAKESHOP vs. HENRY
ARNAIZ, G.R. No. 173882, FEBRUARY 15, 2012)
Unlike in other cases where the complainant has the burden of proof to [prove] its
allegations, the burden of establishing facts as bases for an employer’s loss of confidence in
an employee – facts which reasonably generate belief by the employer that the employee
was connected with some misconduct and the nature of his participation therein is such as
to render him unworthy of trust and confidence demanded of his position – is on the
employer. (SANDEN AIRCON PHILIPPINES vs. LORESSA P. ROSALES, G.R. No. 169260, MARCH
23, 2011)
While the Court adheres to the principle of liberality in favor of the seafarer in construing the
Standard Employment Contract, we cannot allow claims for compensation based on surmises. When
the evidence presented negates compensability, we have no choice but to deny the claim, lest we
cause injustice to the employer. The law in protecting the rights of the employees, authorizes
neither oppression nor self-destruction of the employer there may be cases where the
circumstances warrant favoring labor over the interests of management but never should the scale
be so tilted as to result in an injustice to the employer. (SOUTHEASTERN SHIPPING vs. FEDERICO U.
NAVARRA, JR, G.R. No. 167678, JUNE 22, 2010)
JULIES BAKESHOP vs. HENRY ARNAIZ
G.R. No. 173882, FEBRUARY 15, 2012
Doctrine: In constructive dismissal cases, the employer has the burden of proving that the
transfer of an employee is for just or valid ground, such as genuine business necessity. The
employer must demonstrate that the transfer is not unreasonable, inconvenient, or
prejudicial to the employee and that the transfer does not involve a demotion in rank or a
diminution in salary and other benefits. If the employer fails to overcome this burden of
proof, the employees transfer is tantamount to unlawful constructive dismissal.
Facts: Edgar Reyes hired respondents as chief bakers in his three franchise branches of
Julies Bakeshop in Antique. Thereafter, respondents filed separate complaints against
petitioners for underpayment of wages, payment of premium for holiday pay and rest day,
service incentive leave pay, 13th month pay, and cost of living allowance. Subsequently, in a
memorandum, Reyes reassigned respondents as utility/security personnel. Upon service of
the memo, respondents, however, refused to sign the same and did not report to work. In
two letters memoranda, Reyes directed respondents to report back to work and to explain
why they failed to assume their duties but the respondents did not heed both memoranda.
The parties failed to enter into a compromise. The Labor Arbiter ordered to file their
respective position papers. The respondents alleged that they were dismissed from
employment without valid cause. As for petitioners, they stated that the respondents were
never dismissed but they abandoned their jobs after filing their complaints. Thus, the Labor
Arbiter dismissed the complaint. Respondents filed a joint appeal with the NLRC. The NLRC
remanded the case for purpose of identifying the real respondents. Upon petitioners’
motion, however, the NLRC reconsidered this ruling and resolved the case on the merits. In
so doing, it found the respondents to have been constructively dismissed. The NLRC,
however, once again reversed itself in a Resolution upon Reyes’s filing of a Motion for
Reconsideration. This time, the NLRC held that respondents were not illegally dismissed but
instead abandoned their jobs. Respondents sought recourse to the CA. The CA found merit in
the petition, ruling that respondents were constructively dismissed since their designation
from chief bakers to utility/security personnel is undoubtedly a demotion in rank which
involved “a drastic change in the nature of work resulting to a demeaning and humiliating
work condition. Hence, this petition.
Issue: WAS THE TRANSFER/REASSIGNMENT OF RESPONDENTS TO ANOTHER POSITION
WITHOUT DIMINUTION IN PAY AND OTHER PRIVILEGES TANTAMOUNT TO CONSTRUCTIVE
DISMISSAL?
Held: Yes. In constructive dismissal cases, the employer has the burden of proving that the
transfer of an employee is for just or valid ground, such as genuine business necessity. The
employer must demonstrate that the transfer is not unreasonable, inconvenient, or
prejudicial to the employee and that the transfer does not involve a demotion in rank or a
diminution in salary and other benefits. If the employer fails to overcome this burden of
proof, the employees transfer is tantamount to unlawful constructive dismissal. Petitioners
failed to satisfy the burden of proving that the transfer was based on just or valid ground.
Petitioners bare assertions of imminent threat from the respondents are mere accusations
which are not substantiated by any proof. This Court is proscribed from making conclusions
based on mere presumptions or suppositions. An employee’s fate cannot be justly hinged
upon conjectures and surmises. The act attributed against Tolores does not even convince
us as he was merely a suspected culprit in the alleged sabotage for which no investigation
took place to establish his guilt or culpability. Besides, Reyes still retained Tolores as an
employee and chief baker when he could have dismissed him for cause if the allegations
were indeed found true. In view of these, this Court finds no compelling reason to justify the
transfer of respondents from chief bakers to utility/security personnel. What appears to this
Court is that respondents transfer was an act of retaliation on the part of petitioners due to
the formers filing of complaints against them, and thus, was clearly made in bad faith.
SANDEN AIRCON PHILIPPINES vs. LORESSA P. ROSALES
G.R. No. 169260, MARCH 23, 2011
Doctrine: Unlike in other cases where the complainant has the burden of proof to [prove]
its allegations, the burden of establishing facts as bases for an employer’s loss of confidence
in an employee – facts which reasonably generate belief by the employer that the employee
was connected with some misconduct and the nature of his participation therein is such as
to render him unworthy of trust and confidence demanded of his position – is on the
employer.
Facts: Sanden Aircon Philippines employed Loressa P. Rosales as Management Information
System Secretary (MIS) Department Secretary. Subsequently, she was promoted as Data
Custodian and Coordinator which gives her access to all computer programs and marketing
data, including Delivery Receipt Transaction Files od Sanden. Sanden discovered that the
marketing delivery receipt transaction files were missing. The Internal Auditing Department,
through its Audit Officer, immediately sent a memorandum requesting that a technical
investigation be conducted. Based on the facts gathered on the investigation the MIS
Department found that it is highly probable that Ms. Loressa Rosales was the culprit in the
said incident. Thus, Atty. Reynaldo B. Destura, the Personnel and Administrative Services
Manager sent a letter8 to Loressa charging her with data sabotage and absences without
leave (AWOL). She was given 24 hours to explain her side. Loressa submitted her letter
where she vehemently denied the allegations of data sabotage. According to her, only a
computer programmer equipped with the necessary expertise would be capable of such an
act. As to the charge of incurring AWOL, she challenged the dates and circumstances of her
alleged AWOL. Loressa received a Notice of Disciplinary Action from Sanden notifying
Loressa that management is terminating Loressas employment effective upon receipt of the
said communication. The reason cited by Sanden was the loss of trust on her capability to
continue as its Coordinator and Data Custodian. For this reason, Loressa filed a complaint for
illegal dismissal. The Labor Arbiter rendered a decision finding that there was illegal
dismissal. On appeal, the NLRC dismissed the complaint for lack of merit. Aggrieved, Loressa
filed a petition for certiorari before the CA where the NLRC decision was reversed and set
aside. Hence, this petition.
ISSUE: Whether or not Sanden legally terminated Loressa’s employment on the ground of
willful breach of trust and confidence as Coordinator and Data Custodian?
Held: No. Settled is the rule that under Article 282(c), the breach of trust must be willful.
Ordinary breach will not suffice. A breach is willful if it is done intentionally and knowingly
without any justifiable excuse, as distinguished from an act done carelessly, thoughtlessly or
inadvertently. As firmly entrenched in our jurisprudence, loss of trust and confidence as a
just cause for termination of employment is premised on the fact that an employee
concerned holds a position where greater trust is placed by management and from whom
greater fidelity to duty is correspondingly expected. The betrayal of this trust is the essence
of the offense for which an employee is penalized. Sanden has the burden of proof to prove
its allegations. Unlike in other cases where the complainant has the burden of proof to
[prove] its allegations, the burden of establishing facts as bases for an employer’s loss of
confidence in an employee – facts which reasonably generate belief by the employer that
the employee was connected with some misconduct and the nature of his participation
therein is such as to render him unworthy of trust and confidence demanded of his position –
is on the employer. While it is true that loss of trust and confidence is one of the just causes
for termination, such loss of trust and confidence must, however, have some basis. Proof
beyond reasonable doubt is not required. It is sufficient that there must only be some basis
for such loss of confidence or that there is reasonable ground to believe if not to entertain
the moral conviction that the concerned employee is responsible for the misconduct and
that the nature of his participation therein rendered him absolutely unworthy of trust and
confidence demanded by his position. Sanden failed to discharge the burden of proof that
the dismissal of Loressa is for a just cause.

SOUTHEASTERN SHIPPING vs. FEDERICO U. NAVARRA, JR

G.R. No. 167678, June 22, 2010
Doctrine: While the Court adheres to the principle of liberality in favor of the seafarer in construing
the Standard Employment Contract, we cannot allow claims for compensation based on surmises.
When the evidence presented negates compensability, we have no choice but to deny the claim,
lest we cause injustice to the employer. The law in protecting the rights of the employees,
authorizes neither oppression nor self-destruction of the employer there may be cases where the
circumstances warrant favoring labor over the interests of management but never should the scale
be so tilted as to result in an injustice to the employer.
Facts: Petitioner Southeastern Shipping, hired Federico Navarra to work on board the vessel
“George McLeod”. Federico, while on board the vessel, complained of having a sore throat and on
and off fever with chills. He also developed a soft mass on the left side of his neck. He was given
medication. When he arrived back in the Philippines, the specimen excised from his neck lymph
node was found negative for malignancy. Subsequently, he was diagnosed at the Philippine General
Hospital to be suffering from Hodgkin’s Lymphoma. Thus, Federico filed a complaint against
petitioners with the arbitration branch of NLRC claiming entitlement to disability benefits, loss of
earning capacity, moral and exemplary damages, and attorney’s fees. During the pendency of the
case, Federico died. Evelyn substituted him as complainant on her own behalf and in behalf of their
three children. The Labor Arbiter rendered a decision dismissing the complaint on the ground that
Hodgkin’s Lymphoma is not one of the occupational or compensable disease. Upon appeal, the
NLRC reversed the decision of the Labor Arbiter, ordering the petitioner to pay the respondents
death compensation and minor child allowance amounting to $72,000. Petitioners filed a Motion for
Reconsideration which was denied. They, thus, filed a petition for certiorari with the CA. The CA
dismissed the petition for lack of merit. Hence, this present petition.

Issue: Whether or not the petitioners are liable to pay death compensation benefits?

Held: No. Section 20 of the Standard Terms and Conditions Governing the Employment of Filipino
Seafarers On-Board Ocean-Going Vessels states that “ In case of death of the seafarer during the
term of his contact, the employer shall pay his beneficiaries the Philippine currency equivalent to the
amount of Fifty Thousand US Dollars (US$50,000) and an additional amount of Seven Thousand US
Dollars (US$7,000) to each child under the age of twenty-one but not exceeding four children”. The
death of a seaman during the term of employment makes the employer liable to his heirs for death
compensation benefits, but if the seaman dies after the termination of his contract of employment,
his beneficiaries are not entitled to the death benefits. Federico did not die while he was under the
employ of petitioners. His contract of employment ceased when he arrived in the Philippines on
March 30, 1998, whereas he died on April 29, 2000. Thus, his beneficiaries are not entitled to the
death benefits under the Standard Employment Contract for Seafarers.
Moreover, there is no showing that the cancer was brought about by Federico's stint on board
petitioners' vessel. The records show that he got sick a month after he boarded M/V George Mcleod.
He was then brought to a doctor who diagnosed him to have acute respiratory tract infection. It was
only on June 6, 1998, more than two months after his contract with petitioners had expired, that he
was diagnosed to have Hodgkin's Disease. There is no proof and we are not convinced that his
exposure to the motor fumes of the vessel, as alleged by Federico, caused or aggravated his
Hodgkin's Disease. While the Court adheres to the principle of liberality in favor of the seafarer in
construing the Standard Employment Contract, we cannot allow claims for compensation based on
surmises. When the evidence presented negates compensability, we have no choice but to deny the
claim, lest we cause injustice to the employer. The law in protecting the rights of the employees,
authorizes neither oppression nor self-destruction of the employer there may be cases where the
circumstances warrant favoring labor over the interests of management but never should the scale
be so tilted as to result in an injustice to the employer