DISMISSAL CASES

1. Imasen Philippine Manufacturing Corp. v. Alcon, G.R. No. 194884, October 22, 2014

DOCTRINE: Sexual intercourse in workplace during work hours is a serious misconduct

To constitute a valid cause for the dismissal within the text and meaning of Article 297 (282) of the Labor
Code, the employee’s misconduct must be serious, i.e., of such grave and aggravated character and not
merely trivial or unimportant.

FACTS:

                Petitioner Imasen Philippine Manufacturing Corporation is a domestic corporation engaged in

the manufacture of auto seat-recliners and slide-adjusters. It hired the respondents as manual welders
in 2001.

                On October 5, 2002, the respondents reported for work on the second shift – from 8:00 pm to
5:00 am of the following day. At around 12:40 am, Cyrus A. Altiche, Imasen’s security guard on duty,
went to patrol and inspect the production plant’s premises. When Altiche reached Imasen’s Press Area,
he heard the sound of a running industrial fan. Intending to turn the fan off, he followed the sound that
led him to the plant’s “Tool and Die” section.

                At the “Tool and Die” section, Altiche saw the respondents having sexual intercourse on the
floor, using a piece of carton as mattress. Altiche immediately went back to the guard house and relayed
what he saw to Danilo S. Ogana, another security guard on duty.

                Respondent’s defense: they claimed that they were merely sleeping in the “Tool and Die”
section at the time of the incident. They also claimed that other employees were near the area, making
the commission of the act charged impossible.

                Both LA and NLRC held that the dismissal was valid. CA however nullified NLRC’s decision and
held that sexual intercourse inside company premises is not serious misconduct.

ISSUE:                Whether the respondents’ infraction – engaging in sexual intercourse inside company
premises during work hours – amounts to serious misconduct justifying their dismissal.

HELD:                YES. Sexual acts and intimacies between two consenting adults belong, as a principled
ideal, to the realm of purely private relations. Whether aroused by lust or inflamed by sincere affection,
sexual acts should be carried out at such place, time and circumstance that, by the generally accepted
norms of conduct, will not offend public decency nor disturb the generally held or accepted social
morals. Under these parameters, sexual acts between two consenting adults do not have a place in the
work environment.

                Indisputably, the respondents engaged in sexual intercourse inside company premises and
during work hours. These circumstances, by themselves, are already punishable misconduct. Added to
these considerations, however, is the implication that the respondents did not only disregard company

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rules but flaunted their disregard in a manner that could reflect adversely on the status of ethics and
morality in the company.

                Additionally, the respondents engaged in sexual intercourse in an area where co-employees or
other company personnel have ready and available access. The respondents likewise committed
their act at a time when the employees were expected to be and had, in fact, been at their respective
posts, and when they themselves were supposed to be, as all other employees had in fact been,
working.

                The Court also considered the respondents’ misconduct to be of grave and

aggravated character so that the company was justified in imposing the highest penalty available ―
dismissal.

                Their infraction transgressed the bounds of socially and morally accepted human public
behavior, and at the same time showed brazen disregard for the respect that their employer expected
of them as employees. By their misconduct, the respondents, in effect, issued an open invitation for
others to commit the same infraction, with like disregard for their employer’s rules, for the respect
owed to their employer, and for their co-employees’ sensitivities.

2. Sy and Alix vs. Neat, Inc., Banana Peel and Ng, G.R. No. 213748, November 27, 2017
DOCTRINE: On the other hand, gross negligence implies two (2) concurring factors: the neglect
of duties must not only be gross but habitual as well. Gross negligence means an absence of
that diligence that a reasonably prudent man would use in his own affairs, and 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 (Sy and Alix vs. Neat, Inc.,
Banana Peel and Ng, G.R. No. 213748, November 27, 2017).

Facts:
Respondent Neat, Inc. is a corporation existing by virtue of Philippine laws, and the owner/distributor of
rubber slippers known as "Banana Peel," while respondent Paul Vincent Ng is its President and Chief
Executive Officer. Petitioner Ricardo Sy was hired on May 5, 2008 as company driver and was dismissed
from work on August 4, 2011. Petitioner Henry Alix was hired on November 30, 2005 as a delivery
helper/utility and was dismissed from work on May 31, 2011.
Petitioner Sy alleged that on July 28, 2011, his co-worker Jeffrey Enconado blocked his way to the daily
time record of the company, which annoyed him as he was going to be late for work. When he learned
from the delivery schedule that Enconado would be his partner, Sy requested the company assistant
operations manager, Cesca Abuan, to assign him another "pahinante" or delivery utility, but the request
was not acted upon. In order to avoid confrontation with Enconado, Sy assigned to himself a new
delivery utility.
Sy was informed that he would be suspended due to insubordination for three (3) days... Manager
Anabel Tetan informed Sy that his services will be terminated effective August 4, 2011 due to poor

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performance. Sy disagreed, claiming that for the 3 years that he worked with the company, he received
bonuses for excellent performance.
Averred that sometime in February 2011, he was ordered to assist a newly-hired clerk. After helping his
co-worker, Alix sat down for a while. Respondent Ng saw Alix, and thought that he was doing nothing
during working hours. On May 19, 2011, Alix was assigned to clean at the company warehouse. After
working, Ng saw Alix resting again. Alix was suspended for 3 days, and was thereafter dismissed...
Petitioners Sy and Alix filed a Complaint for illegal dismissal and payment of money claims.
Respondents contended that because of petitioners' continued and repeated commission of various
offenses and violations of company rules and regulations, they were terminated for a just cause.
LA found that petitioners Sy and Alix were dismissed due to serious misconduct, gross neglect of duty
and insubordination.
LA ruled that the evidence on record shows that respondents gave petitioners opportunity to defend
themselves, and have thus complied with the procedural due process required by the Labor Code...
petitioners filed an appeal before the National Labor Relations Commission (NLRC).
NLRC reversed the LA's Decision, finding that the records failed to support the grounds of serious
misconduct, gross neglect of duty and insubordination cited by respondents as bases in terminating
petitioners' employment.
Respondents filed a motion for reconsideration. Respondents filed before the Court of Appeals (CA)
CA held that the dismissal of petitioners was justified under Article 282 (a) and (b) of the Labor Code, as
amended, on the grounds of serious misconduct or willful disobedience of the lawful order of the
employer or representative in connection with the employee's work, and gross and habitual neglect of
the employee's duties.
CA stressed that his repeated violations of the company's rules and regulation, as reflected in the several
warnings found on record, amounted to just cause for termination, and that his act of insubordination
alone when he changed his "pahinante" in direct contravention of the orders of his superior, amounts to
serious misconduct or willful disobedience.
As for Alix, the CA said that aside from his frequent tardiness, the six (6) warnings issued to him provide
a just cause for his dismissal.
CA ruled that failure to comply with the procedural requirements of notice... which entitles them to an
award of nominal damages in the amount of P30,000.00 each.
Issues:
WHETHER OR NOT RESPONDENTS ILLEGALLY DISMISSED PETITIONERS.
Ruling:
Ricardo Sy was dismissed without just cause and due process. While Alix was dismissed with just cause
but without due process.
Court rules that the CA erred in finding that respondents were able to prove that the totality of Sy's
violations of company rules and regulations constitute a just cause for termination of employment. As a
just cause for termination of employment, on the other hand, the neglect of duties must not only be
gross but habitual as well. Gross negligence means an absence of that diligence that a reasonably

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prudent man would use in his own affairs, and connotes want of care in the performance of one's
duties.28 Habitual neglect implies repeated failure to perform one's duties for a period of time,
depending upon the circumstances.
In light of the totality of petitioner Alix's infractions against the company rules and regulations, the Court
cannot extend the same magnanimity it has accorded to Sy. Respondents have proven with substantial
evidence said infractions through 7 written warning. Habitual tardiness alone, as aptly noted by the CA,
is a just cause for termination of Alix's employment.
However, Respondents failed to afford petitioners the first written notice, containing the specific causes
or grounds for termination against them, as well as the requisite hearing or conference wherein they
should have been given reasonable opportunity to be heard and defend themselves. Save for the
notices of termination dated August 4, 2011 and May 31, 2011 47 issued to petitioners Sy and Alix,
respectively, all the other notices given to petitioners consist of warnings, suspension, and orders to
submit written explanations for specific violations of company rules and regulations. It bears stressing
that prior to his termination on August 4, 2011, the last warning given to Sy on August 3, 2011 was on
account of poor performance evaluation only, without mentioning his past infractions of wearing
improper uniform and insubordination. As for Alix, the last warning given to him was received on the
very day of his termination, May 31, 2011, for poor performance evaluation sans any reference to his
past infractions of negligence in performing work, wearing of improper uniform, wasting time during
working hours, tardiness, and poor performance evaluation.

3. CMP FEDERAL SECURITY AGENCY, INC. AND/OR MS. CAROLINA MABANTA-PIAD, PETITIONERS, v.
NOEL T. REYES, SR., RESPONDENT. G.R. No. 223082, June 26, 2019
DOCTRINE: 1. Procedural due process in illegal dismissal cases does not require formal hearing or
conference; 2. the Court considered inefficiency as an analogous just cause for termination of
employment under Article 282 of the Labor Code

FACTS:
CMP Federal is a duly licensed security agency with petitioner Carolina Mabanta-Piad as its President
and Chief Executive Officer (collectively, petitioners).

Sometime in August 2010, CMP Federal hired respondent Reyes as Security Guard and assigned him at
the Mariveles Grain Terminal (MG Terminal) in Mariveles, Bataan. He was twice promoted, first as Shift-
in-Charge, and then on September 15, 2015, as Detachment Commander.

He also claimed that he received via e-mail various complaints from Maningat, as follows:

i. A complaint in February 2013 for non-observance of the rule on timely submission of the Daily
Situation Reports;

ii. A complaint on April 11, 2013 for failure to comply with the client's instruction that led to the
complaint of Mr. Albert G. Bautista, General Manager of MG Terminal;

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 iii. A complaint on April 16, 2013 regarding his direct transaction with Ed and Racquel Garments for
the procurement of uniforms for the MG Terminal Detachment;

iv. Two (2) complaints on May 9, 2013 for the incomplete data of MG Terminal's Daily Situation
Report for the month of April 2013, and for failure to report to Maningat the incident pertaining
to two (2) CMP Federal security personnel who were confronted by the personnel of Personajes
Trucking; and

v. A complaint on May 23, 2013 for failure to follow Maningat's instruction to designate Sagun as
Shift-in-Charge.8

On June 1, 2013, Reyes formally received Offense Notices 9 pertaining to the complaints from CMP
Federal and was ordered immediately suspended until July 20, 2013. 10 Upon the expiry of the
suspension period, Reyes reported back to work, only to be confronted by additional complaints against
him contained in the Reply by Indorsement dated July 20, 2013, which states:

You are hereby directed to explain in writing within FIVE (5) days upon receipt hereof why you should
not be charged [with] the following:

1. Insubordination: For not: following the instruction of Mr. Arnel Maningat, Operations

Manager[,] to designate SO Robert Sagun as Shift-in-Charge effective 01 May 2013, and
designated him as ordinary guard instead;

2. Negligence (4th Offense): For failure to report to the Operations Manager the incident pertaining
to the two (2) security personnel in the persons of SG Rommy Ramiterre and SG Jesus Sumalbag
who were confronted by the Personajes Trucking Personnel, wherein as Detachment
Commander, [you] are duty-bound to report to the latter all matters pertaining to the
[operations;

3. Violation of Section 1.B.C, Rule X of RA 5487: For providing confidential information relative to

the Cabcaben Vacant Lot takeover, wherein this office has received a reports [sic] that you
allegedly leak [sic] the information to your subordinates on the drinking session last 02
December 2012 that eventually reached the knowledge of the [MG Terminal] General Manager.

On July 22, 2013, Reyes timely submitted his explanation, 12 controverting the accusations against him.
Nevertheless, CMP Federal barred Reyes from reporting to work, and told him instead to await the
decision of the management regarding the complaints. 13

Reyes claimed that he kept on reporting for duty until July 30, 2013 14 when he was verbally informed of
his termination. Indeed, on this very date (July 30, 2013), he received a Notice of Termination, that
reads:15

After due investigation, you are hereby found liable for the following:

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 1. Insubordination - For failure to follow the instruction of the Operations Manager last 01 May
2013;

2. Negligence (4th Offense) - For failure to report to the Operations Manager the incident involving
two (2) security personnel [who were] confronted by the personnel of Personajes Tmcking; and

3. Violation of Ethical Standard (Sec.1.B.c, Rule X of RA 5487) - For revealing confidential

information to unauthorized persons relative to takeover of Cabcaben Vacant Lot.

Such acts are punishable by dismissal under items No. 1.15, 3.24, and 1.2 of the Agency's Table of
Offenses, Administrative Charges & Penalties.

Reyes thereafter lodged a complaint for illegal dismissal, non-payment of service incentive leave,
separation pay, reimbursement of expenditures for supplies and cash bond, with a prayer for payment
of moral and exemplary damages, as well as attorney's fees.

Petitioners denied the complaint and averred that, starting January 2013, Reyes had been remiss in the
discharge of his duties as Detachment Commander at MG Terminal; 18 that Reyes' dismissal was justified
because Reyes was negligent in the performance of his duties as shown by his repeated disregard of
company rules; that Reyes' position was one of trust and confidence, to which Reyes proved
untrustworthy when he leaked confidential information. This breach, according to the petitioners,
stymied CMP Federal's planned takeover of the vacant Cabcaben property. 19

The petitioners likewise asserted that they observed procedural due process in dismissing Reyes from
service; that through the e-mails and Reply by Indorsement that he received, Reyes was sufficiently
apprised of the specific incidents that led to the charges against him and was provided ample
opportunity to explain himself and controvert the charges; that an investigation was then conducted
wherein, based on Reyes' own admission and from the statements obtained from his fellow security
guards, Reyes was found guilty of the violations charged. Thus, the Notice of Termination dated July 30,
2013 was served upon him on even date. 20

Riding of the Labor Arbiter

The Labor Arbiter ratiocinated that the just cause for Reyes' dismissal was adequately substantiated by
the petitioners who also proved that they complied with the due process requirements for termination
of employment. The claim for illegal dismissal and separation pay, therefore, must necessarily fail,
according to the Labor Arbiter. Nevertheless, the Labor Arbiter held that Reyes was entitled to service
incentive leave pay for the years 2011 and 2012, in the aggregate amount of Php 5,220.00, since the
petitioners failed to establish prior payment thereof.

Ruling of the National Labor Relations Commission

Diametrically opposed to the Labor Arbiter's findings, the NLRC held that Reyes committed no serious
misconduct that could have warranted his dismissal. Moreover, the NLRC held, that in dismissing
Reyes,27 the petitioners did not comply with the detailed steps of procedural due process, as laid down
in United Tourist Promotions v. Kemplin.28

Ruling of the Court of Appeals

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The CA sustained the NLRC's findings on the ground that the standards of due process were not strictly
complied with; that, absent proof that an investigation was conducted by the petitioners or that Reyes
was given an opportunity to be heard and present his countervailing evidence, it would be unfair for the
CA to reverse the NLRC's Decision.35 The appellate court also held that, even if the perceived procedural
lapses were to be brushed aside, the petitioners' recourse would still have been dismissible for there
was no sufficient cause to terminate Reyes on the ground of serious misconduct, because Reyes
committed the alleged infractions without deliberate and wrongful intent to violate CMP Federal's rules
and regulations.3

ISSUE: Whether or not THE HONORABLE COURT OF APPEALS ERRED in affirming the Decision of the
NLRC, reversing the Decision of the Labor Arbiter Fe Cellan in finding that the Respondent Reyes was
illegally dismissed.

HELD:
Procedural due process in illegal dismissal cases does not require formal hearing or conference
The 2017 case of Maula v. Ximex Delivery Express, Inc.,40 citing the En Banc ruling in Perez v. Phil.
Telegraph and Telephone Company,41 reiterated the hornbook doctrine that actual hearing or
conference is not a condition sine qua non for procedural due process in labor cases because the
provisions of the Labor Code prevail over its implementing rules. 

To recall, Reyes received two sets of complaints in this case: the first set he received in various
dates via e-mail, and the second he received on July 20, 2013 after his suspension had lapsed. At this
point, it becomes fairly obvious that the petitioners afforded Reyes with ample opportunity to be heard
regarding the complaints leveled against him. A formal hearing or conference was not necessary since
nowhere in any of his Written Explanations did Reyes request for one. The Court finds that Reyes was
not denied procedural due process of law. The CA therefore erred in ruling that the NLRC did not act
with grave abuse of discretion when it reversed the Decision of the Labor Arbiter.

In the case at bar, the explanations proffered by Reyes showed that he was not animated by any
wrongful intent when he committed the infractions complained of. Moreover, the finding that he was
guilty of serious misconduct was incompatible with the charges for negligence which, by definition,
requires lack of wrongful intent. Nevertheless, the Court rules that there was still just cause for Reyes'
termination - gross inefficiency.

The NLRC and the CA should not have fixated itself with the designation of the offense as serious
misconduct when it is clear from the complaints and Reply by Indorsement that Reyes was actually
being made to answer for his violation of company policies and standards.

4. EMILIO S. AGCOLICOL v. JERWIN CASIÑO, GR No. 217732, 2016-06-15

Facts:
Respondent Jerwin Casiño (Casiño) was hired by petitioner in 2009 as Stock Custodian and Cook in the
latter's Kubong Sawali Restaurant. Upon discovery of theft involving company property where
respondent was allegedly a conspirator, a criminal complaint for qualified theft against him and his co-
employees was filed on November 26, 2012 before the Office of the City Prosecutor of Baguio City.

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Additionally, he and his co-employees were preventively suspended indefinitely pending investigation.
He was informed of the suspension through a Memorandum Order dated November 27, 2012, effective
November 28, 2012, by the restaurant's Human Resource Manager, Henry Revilla.
Meanwhile, the criminal complaint for qualified theft was later dismissed for lack of basis. According to
respondent, sometime thereafter, he received a letter-dated January 10, 2013 where he was made to
explain why his services should not be terminated.
On May 17, 2013, respondent filed with the NLRC a complaint for illegal dismissal, illegal suspension,
and non-payment of monetary benefits.[6]

For his part, petitioner denies having dismissed respondent, arguing that they were prevented from
completing the investigation because respondent stopped reporting for work after Reynante Camba, his
co-employee, was arrested. This, according to petitioner, prevented him from complying with the twin-
notice rule. Nevertheless, petitioner insists, respondent was never dismissed from work notwithstanding
the audit team's finding that his participation in the scam was extensive. Furthermore, petitioner
contends that respondent's monetary claims were speculative.

Meanwhile, respondent's co-employee, Rosendo Lomboy, suspected to be involved in the incident, also
filed a separate complaint against petitioner, allegedly based on the same set of facts, before the NLRC.
[7]
 Petitioner sought a consolidation of the two cases which motion was granted.
Labor Arbiter's ruling on the illegality of Lomboy's dismissal.  In said Decision, the Labor Arbiter ruled in
favor of Lomboy, holding that the latter was illegally dismissed.

Later, upon elevation of the case to the NLRC, the NLRC First Division partially granted the appeal and
reversed the Labor Arbiter's ruling on the illegality of Lomboy's dismissal but affirmed the grant of salary
differentials, service incentive leave pay, and 13 th month pay.

As for Casinos CASE:

The Labor Arbiter held that there is no truth to petitioner's defense that respondent abandoned his
work thereat since he was clearly suspended indefinitely following his being charged with the crime of
qualified theft which was later proved to be baseless. Too, petitioner never lifted said suspension and
did not reinstate respondent in his job after the dismissal of the qualified theft case.
On appeal, the NLRC affirmed the Labor Arbiter's Decision. Unlike in Lomboy's case, here the NLRC
agreed with the Labor Arbiter's finding that Casiño was constructively dismissed.

CA Ruling

Finding no merit in the petition, the CA affirmed the Labor Arbiter and NLRC's disposition of the
constructive dismissal case, holding that: (1) the findings of the Labor Arbiter and the NLRC are
supported by substantial evidence; (2) the Memorandum Order issued by petitioner's human resource
manager indeed imposed an indefinite preventive suspension; (3) this indefinite suspension resulted in
Casiño's constructive dismissal;
Issues:

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Whether the CA erred in affirming the Decision of the Second Division of the NLRC and holding that the
private respondent was illegally dismissed;
Whether the CA erred when it did not reconcile the decisions of the First and Second Divisions of the
NLRC notwithstanding that the said decisions are based on the same set of facts; and
Whether the CA and the NLRC erred in not looking beyond the suspension into the cause of the
termination after it had held that the suspension was equivalent to illegal dismissal.
Ruling:
SC resolve to deny the petition.

Foremost, while a careful review of the records shows that petitioner, in handling Casiño's case,
observed the same procedure used in Lomboy's case where he was exonerated from the illegal dismissal
charge, this Court is of the view that the alleged conflict in the NLRC rulings is unnecessary in the
resolution of the instant petition. Besides, We cannot fault the CA for not reconciling the two
dispositions considering that res judicata by conelusiveness of judgment is not applicable in the instant
case due to the absence of the element of identity of parties. This is further shown by the fact that
petitioner himself refrained from invoking the principle in arguing that the NLRC ruling in Casiño's case
should follow that in Lomboy's case which already attained finality.

Thus, even though We are faced with the absurd situation of two cases having the same set of facts and
where the difference is only on the employee involved, giving rise to two different dispositions from the
NLRC, We find it appropriate to simply deal with the issue of whether respondent was indeed
constructively dismissed or not considering that said matter is the meat of the controversy. Perhaps it is
worth mentioning that situations like these can and should be avoided, especially if the parties did not
fall short in informing the quasi-judicial agency or court that a related case is pending or has been
resolved already so as to avoid conflicting rulings or varied appreciation of the same set of facts and
evidence presented.

With that, We now tackle the issue of constructive dismissal through the imposition of an indefinite
preventive suspension.

An employee is considered to be constructively dismissed from service if an act of clear discrimination,

insensibility or disdain by an employer has become so unbearable to the employee as to leave him or
her with no option but to forego with his or her continued employment. 21

From said definition, it can be gathered that various situations, whereby the employee is intentionally
placed by the employer in a situation which will result in the former's being coerced into severing his
ties with the latter, can result in constructive dismissal. One such situation is where an employee is
preventively suspended pending investigation for an indefinite period of time.

At this point it is well to note that not all preventive suspensions are tantamount to constructive
dismissal.
As in the above-cited cases, petitioner's actuations and omissions after the imposition of the indefinite
preventive suspension, coupled with the contents of the Letter and the circumstances surrounding its
issuance, are proof of petitioner's lack of desire to have respondent continue in his employment at
Kubong Sawali. It does not cure petitioner's violation of the 30-day limit. On the contrary, it strengthens

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the finding that respondent was indeed constructively dismissed. There is, therefore, no reason for Us to
disturb the ruling of the CA affirming that of the NLRC Second Division.

With these, We find no need to tackle the other issues presented.chanrobleslaw

5. LINO A. FERNANDEZ, JR., v. MANILA ELECTRIC COMPANY (MERALCO)

G.R. No. 226002, 25 June 2018, SECOND DIVISION (Peralta, J.)

DOCTRINE OF THE CASE

Under the doctrine of strained relations, the payment of separation pay is considered an
acceptable alternative to reinstatement when the latter option is no longer desirable or viable.

FACTS

Petitioner Fernandez was an employee of respondent Manila Electric Company (MERALCO)

until his termination for allegedly participating in an illegal strike. Petitioner filed a case for illegal
dismissal. The Labor Arbiter and the NLRC declared that Fernandez was illegally dismissed. The CA
sustained the motion. The judgement became final and executory.

During the execution proceedings, both parties filed several motions regarding the
reinstatement of the petitioner. The labor arbiter ruled that petitioner cannot be reinstated. Instead, the
petitioner was given a separation pay. Petitioner elevated the case to the CA but it was denied for lack
of merit. Hence, this petition.

ISSUE
Whether or not petitioner should be reinstated.

HELD
YES. The Court ruled that the petitioner is subject to reinstatement. An illegally dismissed
employee is entitled to reinstatement as a matter of right. The award for separation of pay is a mere
exception to the rule. It is an alternative upon: (a) when reinstatement cannot be effected in view of the
passage of a long period of time; (b) reinstatement is inimical to the employer’s interest; (c)
reinstatement is no longer feasible; (d) reinstatement does not serve the best interests of parties
involved; (e) the employer is prejudiced by the worker’s continued employment; (f) facts that make

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execution unjust or inequitable have supervened; (g) strained relations between the employer and
employee.

The doctrine of strained relation cannot be applied indiscriminately since every labor dispute
almost invariably results in “strained relation;” otherwise, reinstatement can never be possible simply
because some hostility is endangered between the parties as a result of their disagreement. It must be
adequately supported by substantial evidence showing that the relationship of employer and employee
is indeed strained resulting as necessary consequence of judicial controversy. The doctrine of strained
relation can only be invoked only against employees whose position demand trust and confidence, or
whose differences with their employer are of such degree that preclude reinstatement.

The Court further ruled that reinstatement cannot be barred especially when the employee has
indicated the aversion to return to work, or does not occupy a position of trust and confidence, or has
no say in the operation of the employer. The petitioner showed his intent and willingness to be
reinstated. The confidential relation between the petitioner and respondent was also not established.
The petitioner was a Leadman which does not require trust and confidence.

6. G.R. No. 221241, September 14, 2016 MARIO N. FELICILDA, PETITIONER, VS. MANCHESTEVE H. UY,
RESPONDENT.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari[1] are the Decision[2] dated July 10, 2015 and the
Resolution[3] dated October 21, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 129784, which set
aside the Decision[4] dated November 16, 2012 and the Resolution[5] dated February 28, 2013 of the
National Labor Relations Commission (NLRC) in NLRC LAC No. 08-002277-12 / NLRC NCR Case No. 12-
18409-11 and, instead, dismissed Mario N. Felicilda's (petitioner) complaint for illegal dismissal with
money claims for lack of merit.

The Facts

Petitioner alleged that on October 29, 2010, respondent Manchesteve H. Uy (respondent) hired him as a
truck driver for the latter's trucking service under the business name "Gold Pillars Trucking"[6] (GPT). In
connection, therewith, petitioner was issued a company identification card (ID), assigned in one of GPT's
branches in Manila, and paid on a percentage basis.[7] On December 9, 2011, petitioner took a nap at
the work station while waiting for his truck to be loaded with cargoes, all of which were delivered to
respondent's clients on schedule. The next day, or on December 10, 2011, respondent's helper told
petitioner that his employment was already terminated due to his act of sleeping while on the job.[8]
Claiming that he was dismissed without just cause and due process, and that his act of taking a nap did

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not prejudice respondent's business, petitioner filed a complaint[9] for illegal dismissal with money
claims against respondent, before the NLRC, docketed as NLRC NCR Case No. 12-18409-11.[10]

In his defense,[11] respondent denied the existence of an employer-employee relationship between him
and petitioner, considering that petitioner was: (a) paid merely on a per trip "percentage" basis and was
not required to regularly report for work; (b) free to offer his services to other companies; and (c) not
under respondent's control with respect to the means and methods by which he performed his job as a
truck driver. Respondent added that petitioner's company ID did not indicate that the latter was his
employee, but only served the purpose of informing the GPT's clients that petitioner was one of
respondent's authorized drivers. Finally, respondent averred that it no longer engaged petitioner's
services due to the latter's "serious transgressions and misconduct."[12]

The Labor Arbiter's Ruling

In a Decision[13] dated June 29, 2012, the Labor Arbiter (LA) ruled in petitioner's favor and, accordingly,
ordered respondent to pay the aggregate sum of P80,145.52 representing his backwages and separation
pay.[14]

Finding that petitioner's service as truck driver was indispensable to respondent's business operations,
the LA concluded that petitioner was respondent's regular employee and, thus, may only be dismissed
for just or authorized cause and with due process. Absent any showing of a clear and valid cause to
terminate petitioner's employment, respondent was, therefore, guilty of illegal dismissal.[15]

Aggrieved, respondent appealed[16] to the NLRC, docketed as NLRC LAC No. 08-002277-12.

The NLRC Ruling

In a Decision[17] dated November 16, 2012, the NLRC affirmed the LA ruling. It ruled that an employer-
employee relationship existed between the parties, considering that: (a) respondent engaged
petitioner's services without the aid of a third party or a manpower agency; (b) the payment of wages
on a percentage basis did not negate such existence; (c) respondent's power to dismiss petitioner was
inherent in his selection and engagement of the latter as truck driver; and (d) respondent exercised
control and supervision over petitioner's work as shown in the former's determination of the latter's
delivery areas and schedules.[18] Considering that respondent failed to show a lawful cause for
petitioner's dismissal, the NLRC sustained the order of payment of monetary awards in petitioner's
favor.[19]

Respondent moved for reconsideration,[20] but was denied in a Resolution[21] dated February 28,
2013. Undaunted, respondent filed a petition for certiorari[22] before the CA.

The CA Ruling

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In a Decision[23] dated July 10, 2015, the CA set aside the NLRC ruling and, instead, dismissed
petitioner's complaint for illegal dismissal with money claims for lack of merit.[24] Contrary to the
findings of the LA and the NLRC, the CA held that the elements of payment of wages and control in
determining an employer-employee relationship were absent, considering that petitioner was not paid
wages, but commissions only, which amounts varied depending on the kind of cargo, length of trip, and
fuel consumption. The CA observed that there was no evidence to show that respondent exercised
control over the means and methods by which petitioner was to perform his duties. Further, petitioner
failed to refute the claims that: (a) the payment of his commission was dependent on his efficiency,
discipline, and industry, which factors were beyond respondent's control; (b) he was not required to
regularly report for work and may make himself available to other companies; and (c) the company ID
was merely issued to him for the purpose of apprising respondent's clients that he was the authorized
driver.[25]

Petitioner moved for reconsideration,[26] but was denied in a Resolution[27] dated October 21, 2015;
hence, this petition.
The Issue Before the Court
The core issue for the Court's resolution is whether or not the CA correctly ascribed grave abuse of
discretion on the part of the NLRC in ruling that no employer-employee relationship existed between
petitioner and respondent and, thus, the latter could not have illegally dismissed the former.

The Court's Ruling

The petition is impressed with merit.

At the outset, it should be mentioned that the jurisdiction of the Supreme Court in cases brought before
it from the CA via Rule 45 of the Rules of Court is generally limited to reviewing errors of law and does
not extend to a re-evaluation of the sufficiency of evidence upon which the courts a quo had based its
determination. This rule, however, is not ironclad and a departure therefrom may be warranted where
the findings of fact of the LA and the NLRC, on the one hand, and the CA, on the other, are
contradictory, as in this case. There is therefore a need to review the records to determine whether the
CA, in the exercise of its certiorari jurisdiction, erred in finding grave abuse of discretion on the part of
the NLRC in ruling that respondent was not illegally dismissed.[28]

To justify the grant of the extraordinary remedy of certiorari, petitioner must satisfactorily show that the
court or quasi-judicial authority gravely abused the discretion conferred upon it. Grave abuse of
discretion connotes a capricious and whimsical exercise of judgment, done in a despotic manner by
reason of passion or personal hostility, the character of which being so patent and gross as to amount to
an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in
contemplation of law.[29]

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In labor disputes, grave abuse of discretion may be ascribed to the NLRC when, inter alia, its findings and
conclusions are not supported by substantial evidence, or that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.[30]

Guided by the foregoing considerations, the Court finds that the CA committed reversible error in
granting respondent's certiorari petition since the NLRC did not gravely abuse its discretion in ruling that
petitioner was respondent's regular employee and, hence, was illegally dismissed by the latter. In this
case, respondent disclaims any liability for illegal dismissal, considering that, in the first place, no
employer-employee relationship existed between him and petitioner.

To ascertain the existence of an employer-employee relationship, jurisprudence has invariably adhered

to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the employee's conduct, or the so-called
"control test."[31] Verily, the power of the employer to control the work of the employee is considered
the most significant determinant of the existence of an employer-employee relationship. This is the so-
called "control test," and is premised on whether the person for whom the services are performed
reserves the right to control both the end achieved and the manner and means used to achieve that
end.[32] It must, however, be stressed that the "control test" merely calls for the existence of the right
to control, and not necessarily the exercise thereof. To be clear, the test does not require that the
employer actually supervises the performance of duties by the employee.[33]

Contrary to respondent's submission, which was upheld by the CA, the Court agrees with the labor
tribunals that all the four (4) elements are present in this case:

First. It is undisputed that respondent hired petitioner to work as a truck driver for his private
enterprise, GPT.

Second. Petitioner received compensation from respondent for the services he rendered. Contrary to
the findings of the CA, while the wages paid was determined on a "per trip" or commission basis, it has
been constantly ruled that such does not negate employment relationship.[34] Article 97 (f) of the Labor
Code broadly defines the term "wage" as "the remuneration or earnings, however designated, capable
of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which is payable by an employer to an
employee under a written or unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered x x x."[35] That petitioner was paid on a "per trip" or commission
basis is insignificant as this is merely a method of computing compensation and not a basis for
determining the existence or absence of an employer-employee relationship.[36]

Third. Respondent's power to dismiss was inherent in the selection and engagement of petitioner as
truck driver.

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Fourth. The presence of the element of control, which is the most important element to determine the
existence or absence of employment relationship, can be safely deduced from the fact that: (a)
respondent owned the trucks that were assigned to petitioner; (b) the cargoes loaded in the said trucks
were exclusively for respondent's clients; and (c) the schedule and route to be followed by petitioner
were exclusively determined by respondent. The latter's claim that petitioner was permitted to render
service to other companies was not substantiated and there was no showing that he indeed worked as
truck driver for other companies. Given all these considerations, while petitioner was free to carry out
his duties as truck driver, it cannot be pretended that respondent, nonetheless, exercised control over
the means and methods by which the former was to accomplish his work. To reiterate, the power of
control refers merely to the existence of the power. It is not essential for the employer to actually
supervise the performance of duties of the employee, as it is sufficient that the former has a right to
wield the power,[37] as in this case.

Having established that an employer-employee relationship exists between the parties, it is now
incumbent for the Court to determine whether or not respondent validly terminated petitioner's
employment.

For a dismissal to be valid, the rule is that the employer must comply with both the substantive and
procedural due process requirements. Substantive due process requires that the dismissal must be
pursuant to either a just or an authorized cause under Articles 297, 298, and 299 (formerly Articles 282,
283 or 284)[38] of the Labor Code, as amended.[39]

Procedural due process, on the other hand, mandates that the employer must observe the twin
requirements of notice and hearing before a dismissal can be effected.[40]

In this case, suffice it to say that aside from respondent's averment that petitioner committed "serious
transgressions and misconduct" resulting in the former's loss of trust and confidence, no other evidence
was shown to substantiate the same. Such averment should be properly deemed as a self serving
assertion that deserves no weight in law.[41] Neither was petitioner accorded procedural due process as
he was merely informed by respondent's helper that he was already terminated from his job. Clearly,
respondent illegally dismissed petitioner, and as such, the latter is entitled to backwages and separation
pay in lieu of reinstatement, as correctly ruled by the labor tribunals.

WHEREFORE, the petition is GRANTED. The Decision dated July 10, 2015 and the Resolution dated
October 21, 2015 of the Court of Appeals in CA-G.R. SP No. 129784 are hereby REVERSED and SET ASIDE.
The Decision dated November 16, 2012 and the Resolution dated February 28, 2013 of the National
Labor Relations Commission in NLRC LAC No. 08-002277-12 / NLRC NCR Case No. 12-18409-11 are
REINSTATED.
(Felicilda vs. Uy G.R. No. 221241 September 14, 2016)

This decision, and more, can be found at https://www.digest.ph/decisions/felicilda-vs-uy

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