403 NOTES | LABOR LAW REVIEW | ATTY.
JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
LABOR LAW REVIEW 2020-2021
EH403 CASE DIGESTS
TOPIC 14: TERMINATION OF EMPLOYMENT
01 WESLEYAN UNIVERSITY PHILIPPINES v
MAGLAYA
G.R. NO. 212774, JANUARY 23, 2017 SECOND
DIVISION, PERALTA
Illegal dismissal; Intra-corporate dispute
The determination of the rights of a corporate officer
dismissed from his employment, as well as the
corresponding liability of a corporation, if any, is an
intra-corporate dispute subject to the jurisdiction of the
regular courts.
Maglaya was appointed as a corporate member of WUP
and was elected as a member of the Board of Trustees.
Later, he was elected as President of the University for
a five-year term.
In 2009, the Bishops, through a formal notice to all the
officers, deans, staff, and employees of WUP, introduced
the new corporate members, trustees, and officers. In
the said notice, it was indicated that the new Board met,
organized, and elected the new set of officers on April
20, 2009. Palomo, the new Chairman of the Board,
informed Maglaya of the termination of his services and
authority as the President of the University on April 27,
2009. Thereafter, Maglaya filed an illegal dismissal case
against WUP.
Was Maglaya illegally dismissed?
NO. The said issue revolves around the question on
whether Maglaya is a corporate officer or a mere
employee. For purposes of identifying an intra-
corporate controversy, we have defined corporate
officers as those officers of the corporation who are
given that character by the Corporation Code or by the
corporation's by-laws.
WUP presented its amended By-Laws to prove that
Maglaya, as the University President, was a corporate
officer whose rights do not fall within the jurisdiction of
the labor tribunal.
It is apparent from the By-laws of WUP that the
president was one of the officers of the corporation, and
was an honorary member of the Board. He was
appointed by the Board and not by a managing officer
of the corporation. We held that one who is included in
the by-laws of a corporation in its roster of corporate
officers is an officer of said corporation and not a mere
employee. As such, his dismissal is not within the
jurisdiction of the labor tribunals.
1
02 MAULA v XIMEX DELIVERY EXPRESS
G.R. NO. 207838, JANUARY 25, 2017
SECOND DIVISION, PERALTA
Illegal dismissal; Serious misconduct
Misconduct is improper or wrong conduct; it is 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. The misconduct, to be serious within
the meaning of the Labor Code, must be of such a grave
and aggravated character and not merely trivial or
unimportant.
Petitioner was hired by the respondent as Operation
Staff on March 23, 2002. Seven years later the HRD
required him and some other employees to sign a form
subtitled "Personal Data for New Hires." When he
inquired about it he was told it was nothing. On March
4, 2009, petitioner filed a complaint before the National
Conciliation and Mediation Board regarding the
anomalous form.
After he filed his complaint, respondent served several
memorandums and notices against him allegedly for
several infractions. In one of these instances, petitioner
lost his composure and refused to receive the
memorandum and thus retorted "Seguro na abnormal
na ang utak mo", realizing that respondents were out
looking for every means possible to pin him down. He
was later on dismissed for serious misconduct.
Was petitioner illegally dismissed?
YES. For misconduct or improper behavior to be a just
cause for dismissal, (a) it must be serious; (b) it must
relate to the performance of the employee's duties; and
(c) it must show that the employee has become unfit to
continue working for the employer.
Generally, accusatory and inflammatory language used
by an employee to the employer or superior can be a
ground for dismissal or termination, the circumstances
peculiar to this case warrant a different application. The
admittedly insulting and unbecoming language uttered
by petitioner to the HR Manager on April 3, 2009 should
be viewed with reasonable leniency in light of the fact
that it was committed under an emotionally charged
state. The on-the-spur-of-the-moment outburst of
petitioner, he having reached his breaking point, was
due to what he perceived as successive retaliatory and
orchestrated actions of respondent. Indeed, there was
only lapse in judgment rather than a premeditated
defiance of authority.
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
03 SUMIFRU v BERNABE BAYA
G.R. No. 188269, April 17, 2017
FIRST DIVISION, PERLAS-BERNABE
Constructive Dismissal; Demotion
Constructive dismissal exists where there is cessation of
work, because continued employment is rendered
impossible, unreasonable or unlikely, as an offer
involving a demotion in rank or a diminution in pay and
other benefits.
Baya was employed by AMSFC since February 5, 1985,
and from then on, worked his way to a supervisory rank
on September 1, 1997. He joined the supervisory union,
AMSKARBEMCO. In June 1999, Baya was reassigned to
a series of supervisory positions in AMSFC's sister
company, DFC, where he also became part of the
supervisory union.
When AMSFC learned that AMSKARBEMCO entered into
an export agreement with another company, it
summoned AMSKARBEMCO officers, including Baya, to
lash out at them and threatened them. A few days later,
Baya received a letter stating that his secondment with
DFC has ended, thus, ordering his return to AMSFC.
However, upon Baya's return to AMSFC, he was
informed that there were no supervisory positions
available; thus, he was assigned to different rank-and-
file positions instead.
Was Baya constructively dismissed?
YES. In case of a constructive dismissal, the employer
has the burden of proving that the transfer and
demotion of an employee are for valid and legitimate
grounds such as genuine business necessity.
Particularly, for a transfer not to be considered a
constructive dismissal, the employer must be able to
show that such transfer is not unreasonable,
inconvenient, or prejudicial to the employee; nor does
it involve a demotion in rank or a diminution of his
salaries, privileges and other benefits. Failure of the
employer to overcome this burden of proof, the
employee's demotion shall no doubt be tantamount to
unlawful constructive dismissal.
In this case, a judicious review of the records reveals
that the top management of both AMSFC and DFC,
which were sister companies at the time, were well-
aware of the lack of supervisory positions in AMSFC.
This notwithstanding, they still proceeded to order
Baya's return therein, thus, forcing him to accept rank-
and-file positions. These acts are constitutive of
constructive dismissal.
2
04 EXAMANGGAGAWA NG KOMUNIKASYON SA
PILIPINAS VS. PHIL LONG DISTANCE TELEPHONE
COMPANY INC.
G.R. NO. 190389, APRIL 19, 2017
SECOND DIVISION, LEONEN
Redunduncy as authorized cause; Substantial
evidence of redundancy required
An employer's declaration of redundancy becomes a
valid and authorized cause for dismissal when the
employer proves by substantial evidence that the
services of an employee are more than what is
reasonably demanded by the requirements of the
business enterprise.
Petitioner union filed for Petition for Review on Certiorari
before the Court assailing the 2002 redundancy
program of respondent PLDT. The NLRC assumed
jurisdiction after the said issue was certified by the
Secretary of Labor for compulsory arbitration when the
union staged a strike. The NLRC dismissed the union’s
charges of Unfair Labor Practices and held that the
dismissal was legal. The redundancy program was due
to the decline of subscribers for long distance calls and
to fixed line services produced by technological
advances in the communications industry. The Court of
Appeals agreed and held that the NLRC did not commit
grave abuse of discretion when it found that the
dismissal was valid because the program was based on
substantial evidence.
Whether or not the redundancy program was valid.
YES. PLDT’s declaration of redundancy was backed by
substantial evidence showing a consistent decline for
operator-assisted calls for both local and international
calls because of cheaper alternatives like direct dialing
services, and the growth of wireless communication.
Redundancy exists when "the services of an employee
are in excess of what is reasonably demanded by the
actual requirements of the enterprise. One of the
requirements provided for a valid redundancy program
is for the employer to prove good faith that the services
of the employees are in excess of what is required of the
company, and that fair and reasonable criteria were
used to determine the redundant positions. Based on
the evidence presented by PLDT, the Court is satisfied
that PLDT had proven good faith when it declared
redundancy. For one, PLDT experienced a decline of
subscribers, long distance calls, operated both local and
abroad, has declined, landline or fixed line services also
declined. For another, PLDT has a debt burden of P70
billion pesos and it cannot subsidize the salaries of
employees whose positions are redundant.
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
05 JAVINES VS. XLIBRIS
G.R. NO. 214301, JUNE 7, 2017
THIRD DIVISION, TIJAM
Power of Review under Rule 45; Due process not
a natural right
Although appeal is an essential part of judicial process,
the right thereto is not a natural right or a part of due
process but is merely a statutory privilege.
Javines was hired as the Operations Manager of Xlibris.
He was terminated by the said company for
falsifying/tampering three meal receipts. A notice to
explain was sent and an administrative hearing was
conducted for the charge of acts constituting
dishonesty. Javines for his part argued that he had no
knowledge or part of the tampered receipts as it was
only given to him by the supervisors under him. He was
however dismissed by the company, prompting him to
file a case for illegal dismissal. The Labor Arbiter found
that Javines’ dismissal was for just and authorized cause
and with due process. NLRC modified the LA’s decision
stating that the dismissal is not compliant with the due
process requirement hence, nominal damages were
awarded. The Court of Appeals on Certiorari filed by
Xlibris agreed with the NLRC but reduced the amount of
nominal damages granted.
Was Javines’ dismissal valid?
YES. The court observed that the Labor Arbiter and the
NLRC is uniform in their findings that the dismissal was
for a just cause. In these findings, Javines failed to move
for reconsideration nor challenged the ruling before the
Court of Appeals. The NLRC decision therefore, attained
finality and had been placed beyond the appellate
court's power of review.
The finding that Javines was dismissed for just cause
must be upheld. The petition for Certiorari filed by
Xlibres questioning the award for nominal damages
does not open the whole case for review. Emphatically,
neither Xlibris nor Javines further questioned the CA's
award on this point. As such, the issue as to whether
the requirements of procedural due process to
constitute a valid dismissal were complied with has been
resolved with finality. The court cannot also exercise its
power of review under Rule 45 because the relief
provided by the rule only extends to pure questions of
law and does not extend to re-evaluation of evidence.
3
06 BRAVO VS. URIOS COLLEGE
GR NO. 198066, JUNE 7, 2017
SECOND DIVISION, LEONEN
Employees occupying positions of trust;
Difference in treatment between the two
The employer must adduce proof of actual involvement
in the alleged misconduct for loss of trust and
confidence to warrant the dismissal of fiduciary rank-
and-file employees. However, "mere existence of a
basis for believing that [the] employee has breached the
trust [and confidence] of [the] employer" is sufficient
for managerial employees.
Bravo was hired by Urios College as a part-time teacher
and at the same time a comptroller. The college then
formulated a new ranking system for non-academic
personnel. When asked, he suggested that his position
should be reclassified to be middle management. When
the new ranking system was imposed, this was opposed
prompting the College to review the ranking system. It
found that the ranking system caused salary distortions.
Bravo was then administratively charged for serious
misconduct and willful breach of trust and was
dismissed for allegedly misclassifying several positions
and miscomputed his’ and other employees’ salaries.
Bravo then filed a case for illegal dismissal. The Labor
Arbiter dismissed the said complaint. This was reversed
by the NLRC holding that the dismissal was illegal. The
Court of Appeals reversed the NLRC decision.
Was Bravo’s dismissal valid?
YES. Petitioner was validly dismissed for willful breach
of trust.
There are two types of positions in which trust and
confidence is reposed by the employer namely:
Managerial employees and fiduciary rank-and-file
employees. The former is treated differently than the
latter. For the latter, loss of trust and confidence
requires proof of involvement in the alleged events in
question. For managerial employees, it is sufficient that
there is some basis for the loss of trust or confidence.
Bravo was not an ordinary rank-and-file employee. His
position of responsibility on delicate financial matters
entailed a substantial amount of trust from respondent.
His act in assigning to himself a higher salary rate
without proper authorization is a clear breach of the
trust and confidence reposed in him.
Procedural due process was likewise complied with.
Bravo was furnished with a show cause memo stating
the grounds for dismissal and required him to submit a
written explanation of these charges. Hearings were
also conducted, and he was served a notice of
termination containing the company’s decision.
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
07 PANALIGAN VS. PHYVITA ENTERPRISES
GR No. 202086, JUNE 21, 2017
FIRST DIVISION, SERENO
Loss of Trust and Confidence as just cause; effect
of criminal case dismissal on dismissal based on
loss of trust and confidence; burden of proof in
termination based on just causes
In order to dismiss an employee on the ground of loss
of trust and confidence, the employee must be guilty of
an actual and willful breach of duty duly supported by
substantial evidence.
Petitioners were hired as Roomboys by the respondent.
Sometime in 2005, the company’s Finance Assistant
discovered that the amount of P180,000 sales of the
company was missing. Due to this incident, Petitioners
were accused by the company of theft and subsequently
was dismissed on the ground of loss of trust and
confidence. A criminal complaint was likewise instituted
against them, but such was dismissed due to
insufficiency of evidence.
Petitioners on their part filed an illegal dismissal case
against the respondent. They argued that there could
be no valid dismissal because the criminal charge
against them was in fact dismissed. Respondent on its
part reiterated that the dismissal was valid as it was
based on breach of trust hence the dismissal of the
criminal case is immaterial. The Labor Arbiter declared
that petitioners were legally terminated. This was
reversed by the NLRC. The Court of Appeals then
reversed the NLRC decision and reinstated that of the
Labor Arbiter.
Were petitioners’ dismissal valid?
NO. In order to dismiss an employee on the ground of
loss of trust and confidence, the employee must be
guilty of an actual and willful breach of duty duly
supported by substantial evidence.
While it is true that petitioners as room boys occupy
positions of trust and confidence hence the dismissal of
the criminal case does not necessarily exonerate them
from a charge of loss of trust and confidence, equally
important is the fact that in termination cases, the
burden of proof rests on the employer to show that the
dismissal is for a just cause. In this case, respondent
failed to adduce substantial evidence to clearly
demonstrate that petitioners have committed serious
misconduct or perform actions which would warrant loss
of trust and confidence justly reposed upon them by the
employer. No direct evidence was presented to link
petitioners to the theft.
4
08 CLAUDIA KITCHEN INC. VS. TANGUIN
GR NO. 221096, JUNE 28, 2017
SECOND DIVISION, MENDOZA, J
Termination of employment; Illegal Dismissal
While the burden of proof rests with the employer to
show that there was no illegal dismissal, it is incumbent
upon the employee to first prove that she was
dismissed.
Tanguin, an employee of Claudia’s Kitchen, was
preventively suspended while an investigation is being
conducted against her for reports that she was forcing
some employees to buy silver jewelry from her during
office hours and inside company premises. She then
filed a complaint for illegal dismissal. Claudia’s Kitchen
denied having dismissed Tanguin and presented notices
they sent to Tanguin requiring her to answer the
charges and one notice reminding her that she was still
an employee and directing her to report back to work.
Was respondent illegally dismissed?
NO. While the burden of proof rests with the employer
to show that there was no illegal dismissal, it is
incumbent upon the employee to first prove that she
was dismissed. In this regard, Tanguin failed to
discharge. She simply alleged that she was barred from
entering the premises but no evidence was presented to
prove the same. And even if she was indeed barred,
there was lawful basis since she was placed under
preventive suspension. While there was no
abandonment of work, the filing of complaint for illegal
dismissal with prayer for reinstatement negates any
intention to abandon employment. Since there is no
illegal dismissal, separation pay and reinstatement
cannot be awarded to an employee whose employment
was never terminated.
Separation pay and reinstatement are exclusive
remedies and even if there are instances when both are
awarded, it will only apply when there is termination. In
a case where the employee was neither found to have
been dismissed nor to have abandoned work, the
general course of action is for the Court to dismiss the
complaint, direct the employee to return to work, and
order employer to accept employee.
09 ARLO ALUMINUM INC VS.PINON JR
GR NO. 215874, JULY 5,2007
SECOND DIVISION, MENDOZA, J
Waiver of Benefits
To be valid, a deed of release, waiver or quitclaim must
meet the following requirements: (1) that there was no
fraud or deceit on the part of any of the parties; (2) that
the consideration for the quitclaim is sufficient and
reasonable; and (3) that the contract is not contrary to
law, public order, public policy, morals or good customs,
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
or prejudicial to a third person with a right recognized
by law.
Eton Properties contracted with Arlo Aluminum, a duly
registered corporation, for the supply and installation of
aluminum and glass. In turn, Arlo Aluminum engaged
the services of E.M. Glazing through subcontracting. But
then, an unfortunate incident occurred at work that
resulted to the demise of Vic Edward and 9 other
employees of E.M. Glazing. Companies Arlo and Eton
extended P150,000 financial assistance to the families
of the victims.
In return, the families signed a Deed of Release, Waiver
and Quitclaim which provides that the amount received
is enough to cover all labor claims. Now, Vicente (father
of Vic Edward) filed a complaint claiming that the Deed
was invalid because the consideration was insufficient to
cover all the liabilities of Arlo Aluminum.
Is the Deed of Release, Waiver and Quitclaim valid?
YES. To be valid, a deed of release, waiver or quitclaim
must meet the following requirements: (1) that there
was no fraud or deceit on the part of any of the parties;
(2) that the consideration for the quitclaim is sufficient
and reasonable; and (3) that the contract is not contrary
to law, public order, public policy, morals or good
customs, or prejudicial to a third person with a right
recognized by law. The consideration given to Vicente in
the amount of P150,000 was reasonable and sufficient
to cover the labor claims. As such, where it is shown
that the person making the waiver did so voluntarily,
with full understanding of what he was doing, and the
consideration for the quitclaim is sufficient and
reasonable, the transaction must be recognized as a
valid and binding undertaking.
10 STERLING PAPER PRODUCTS ENTERPRISES
VS. KMM-KATIPUNAN,
GR NO. 221493, AUGUST 2, 2017
SECOND DIVISION, MENDOZA, J
Termination of Employment, Just Causes, Serious
Misconduct
To summarize, for misconduct or improper behavior to
be a just cause for dismissal, the following elements
must concur: (a) the misconduct must be serious; (b) it
must relate to the performance of the employee's duties
showing that the employee has become unfit to continue
working for the employer; and (c) it must have been
performed with wrongful intent
Sterling hired Esponga as machine operator. Supervisor
of Sterling, Mercy Vinoya found Esponga and his co-
employees about to take a nap on the sheeter machine.
She called their attention and prohibited them from
taking a nap thereon for safety reasons. A verbal
altercation then ensued where Esponga confronted
Vinoya. Later that day, Esponga was found to have been
5
not working as the machine assigned to him was not
running from 2:20 to 4:30 in the afternoon.
Additionally, he failed to submit his daily report from
June 21 to June 29, 2010. After administrative
proceedings were conducted, Sterling terminated
Esponga on the ground of gross and serious misconduct,
gross disrespect to superior and habitual negligence,
This prompted Esponga and KMMKatipunan to file a
complaint for illegal dismissal.
Whether or not Esponga is guilty of Serious Misconduct.
YES, Esponga is guilty of Serious Misconduct. As such,
his dismissal was valid.
Under Article 282 (a) of the Labor Code, serious
misconduct by the employee justifies the employer in
terminating his or her employment. For misconduct or
improper behavior to be a just cause for dismissal, the
following elements must concur: (a) the misconduct
must be serious; (b) it must relate to the performance
of the employee's duties showing that the employee has
become unfit to continue working for the employer; and
(c) it must have been performed with wrongful intent.
In the case at bench, the charge of serious misconduct
is duly substantiated by the evidence on record.
Primarily, in a number of cases, the Court has
consistently ruled that the utterance of obscene,
insulting or offensive words against a superior is not
only destructive of the morale of his co-employees and
a violation of the company rules and regulations, but
also constitutes gross misconduct which is a ground for
dismissal or termination.
11 DISTRIBUTION & CONTROL PRODUCTS INC.
VS. SANTOS,
GR NO. 212616, JULY 10, 2017
SECOND DIVISION, PERALTA, J
Termination of employment, Just causes, Loss of
trust and confidence
Loss of trust and confidence is a just cause for dismissal
under Article 282(c) of the Labor Code, and in order for
the employer to properly invoke this ground, the
employer must satisfy two conditions. First, the
employer must show that the employee concerned holds
a position of trust and confidence. Jurisprudence
provides for two classes of positions of trust. Second,
the employer must establish the existence of an act
justifying the loss of trust and confidence.
Santos, was employed as company driver by
Distribution & Control Products, Inc. After years of
service, Santos received a notice informing him that he
was being placed under preventive suspension for a
period of 30 days for allegedly having participated in the
unlawful taking of company products; He alleged that
was never given the opportunity to explain his side
before he was suspended; and after the lapse of his 30-
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
day suspension he was no longer allowed to return to
work without any justification for such disallowance.
Thus, he filed a complaint for constructive illegal
dismissal and payment of separation pay
The company, on the other hand, contend that they lost
trust and confidence in Santos. The company demanded
an explanation from Santos and the warehouseman, but
they failed to make an account as to how these products
had gone missing from the warehouse and office
building; as such, petitioners filed a criminal complaint
for qualified theft and, thereafter, they suspended
herein respondent he no longer returned to work.
Was the loss and confidence of the employer in this case
a valid ground for termination?
NO. Loss of trust and confidence is a just cause for
dismissal under the Labor Code, and in order for the
employer to properly invoke this ground, the employer
must satisfy two conditions. First, the employer must
show that the employee concerned holds a position of
trust and confidence. Second, the employer must
establish the existence of an act justifying the loss of
trust and confidence. To be a valid cause for dismissal,
the act that betrays the employer's trust must be real.
Proof beyond reasonable doubt is not needed to justify
the loss as long as the employer has reasonable ground
to believe that the employee is unworthy of the trust
and confidence demanded of his position. Nonetheless,
when the breach of trust or loss of confidence alleged is
not borne by clearly established facts, as in this case,
such dismissal on the cited grounds cannot be allowed.
It is true that respondent may indeed be considered as
one who occupies a position of trust and confidence.
However, the company failed to present substantial
evidence to support their allegations. In other words,
petitioners were not able to establish the existence of
an act justifying their alleged loss of trust and
confidence in respondent.
12 VALMORES VS. DR. ACHACOSO
GR NO. 217453, JULY 19, 2017
FIRST DIVISION, CAGUIOA
Freedom of Religion; 2010 CHED MEMORANDUM
The 2010 CHED Memorandum reveals the ministerial
nature of the duty imposed upon HEIs. Its policy is
crystal clear: a student's religious obligations takes
precedence over his academic responsibilities,
consonant with the constitutional guarantee of free
exercise and enjoyment of religious worship.
Accordingly, the CHED imposed a positive duty on all
HEIs to exempt students, as well as faculty members,
from academic activities in case such activities interfere
with their religious obligations.
Petitioner (Valmores) is a member of the Seventh-day
Adventist Church whose fundamental beliefs include the
strict observance of the Sabbath as a sacred day. As
6
such, petitioner joins the faithful in worshipping and
resting on Saturday, the seventh day of the week, and
refrains from non-religious undertakings from sunset of
Friday to sunset of Saturday.
Petitioner Valmores was enrolled as a first-year student
at the MSU-College of Medicine. To avoid potential
conflict between his academic schedule and his church's
Saturday worship, petitioner Valmores wrote a letter to
respondent Achacoso, requesting that he be excused
from attending his classes in the event that a regular
weekday session is rescheduled to a Saturday, but this
was unheeded.
In one instance, petitioner Valmores was unable to take
his Histo-Pathology laboratory examination held on a
Saturday. Respondent Cabildo was his professor for the
said subject. Despite his request for exemption, no
accommodation was given by either of the respondents.
As a result, petitioner Valmores received a failing grade
of 5 for that particular module and was considered
ineligible to retake the exam.
Whether mandamus lies to compel respondent to
enforce the 2010 Memorandum in the case of petitioner.
YES. The freedom of religion enjoys a preferred status
among the rights conferred to each citizen by our
fundamental charter. The CHED institutionalized the
framework for operationalizing Section 5, Article III of
the 1987 Constitution vis-à-vis the academic freedom of
higher education institutions (HEIs), pursuant to its
statutory power to formulate policies, priorities, and
programs on higher education in both public and private
HEIs.
MSU is an HEI created by legislative charter under
Republic Act No. 1387, as amended, and was
established "to better implement the policy of the
Government in the intensification of the education of the
Filipino youth, especially among the Muslims and others
belonging to the national minorities." Thus, respondents
herein, as faculty members of MSU, fall under the
policy-making authority of the CHED and therefore
bound to observe the issuances promulgated by the
latter.
13 COSUE VS. FERRITZ INTEGRATED
DEVELOPMENT CORP.
GR NO. 230664, JULY 24, 2017
THIRD DIVISION, TIJAM
Illegal Dismissal; Overt or Positive Act of
Dismissal Requirement
The rule is that one who alleges a fact has the burden
of proving it; thus, petitioner was burdened to prove his
allegation that respondents dismissed him from his
employment. It must be stressed that the evidence to
prove this fact must be clear, positive and convincing.
The rule that the employer bears the burden of proof in
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
illegal dismissal cases finds no application here because
the respondents deny having dismissed the petitioner.
In illegal dismissal cases, while the employer bears the
burden to prove that the termination was for a valid or
authorized cause, the employee must first establish by
substantial evidence the fact of dismissal from service.
Petitioner is a regular employee of FIDC, performing
work as janitor/maintenance staff. He 􏰃filed a
Complaint against respondent for actual illegal dismissal
for the reason that he was suspended by respondent on
the suspicion that he stole electronical wires owned by
the company.
Respondents on the other hand averred that following
an investigation on the matter, they issued a
memorandum of suspension to petitioner for obtaining
the keys to the electrical room and entering without
permission. And that when petitioner came back after
the suspension, he agreed that he would voluntarily
resign. However, petitioner did not file his resignation,
and eventually instituted his Complaint for illegal
dismissal.
Respondents argued that there was no illegal dismissal
as there was an agreement between FIDC and petitioner
that the latter would just resign. As petitioner reneged
on this agreement and chose to be absent, he should be
considered absent without leave.
Petitioner maintained that he was constructively
dismissed because he reported to work immediately
after his suspension but was not anymore allowed to
work. He argued that mere absence or failure to report
to work is not tantamount to abandonment of work. He
also asserted that to be dismissed for abandonment, an
employee must be shown to have been absent without
a valid or justifiable reason, and to have a clear
intention to sever the employer-employee relationship,
and that the burden of proof falls on the employer.
Whether or not petitioner was illegally dismissed.
NO. Petitioner's claim that he was not allowed to report
for work after his suspension was unsubstantiated.
Petitioner has not shown by any evidence that he was
barred from the premises. Furthermore, an entry in the
FIDC security logbook, which petitioner had not
challenged, showed him informing security personnel
that he came to FIDC because he was asked to report
to the office.
Petitioner's claim of constructive dismissal fails. Bare
allegations of constructive dismissal, when
uncorroborated by the evidence on record, as in this
case, cannot be given credence. records do not show
any demotion in rank or a diminution in pay made
against petitioner. Neither was there any act of clear
discrimination, insensibility or disdain committed by
respondents against petitioner which would justify or
7
force him to terminate his employment from the
company.
Other than petitioner's bare allegation of having been
dismissed, there was no evidence presented to show
that his employment was indeed terminated by
respondents. In the absence of any showing of an overt
or positive act proving that respondents had dismissed
petitioner, the latter's claim of illegal dismissal cannot
be sustained — as the same would be self-serving,
conjectural and of no probative value.
14 ALASKA MILK CORP.,/ESTATE OF WILFRED
UYTENGSU
GR NO. 228412 & 2284389, JULY 26, 2017
SECOND DIVISION, MENDOZA
Just Cause for Termination; Loss of Trust and
Confidence
As regards a managerial employee, the mere existence
of a basis for believing that such employee has breached
the trust of his employer would suffice for his dismissal.
Hence, in the case of managerial employees, proof
beyond reasonable doubt is not required, it being
sufficient that there is some basis for such loss of
confidence, such as when the employer has reasonable
ground to believe that the employee concerned is
responsible for the purported misconduct, and the
nature of his participation therein renders him unworthy
of the trust and confidence demanded by his position.
Petitioner (AMC) hired respondent (Ponce) as Manager
for Engineering Services of its plants.
Petitioner averred Ponce sent to 12 of his colleagues in
connection with his "Receipted Allowance" (R/A) for
business-related expenses. In the said e-mail (R/A e-
mail), Ponce solicited official receipts from his
colleagues in exchange for a (5%) rebate on the value
of the receipts submitted to him.
Petitioner terminated Ponce’s employment for the act of
e-mailing his 12 colleagues requesting for official
receipts in exchange for a 5% rebate to be used in
liquidating his receipted allowance/fraudulently
submitting official receipts of expenses which he did not
incur.
Respondent filed a complaint for illegal dismissal against
petitioner.
Whether or not the respondent may be dismissed on the
ground of loss of trust and confidence.
YES. After a judicious scrutiny of Ponce's R/A e-mail and
his explanations on the matter, the Court rules that his
dismissal from employment is justified.
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
First, the language of Article 297 (c) of the Labor Code
states that the loss of trust and confidence must be
based on willful breach of the trust reposed in the
employee by his employer. Such breach is willful if it is
done intentionally, knowingly, and purposely, without
justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly, or inadvertently.
The opening sentence of Ponce's R/A e- mail readily
exposes the attendant willfulness in his act. It reads:
"Dear Neighbors and Friends, Do you want to earn extra
from your own expenses?"
Going further, the body of the R/A e-mail consists of
"rules" that the recipients will have to follow in order to
be entitled to a 5% cash rebate on the value of the
receipts they will submit. The "rules" were intelligibly
crafted with the end view of achieving a purpose, and
the inciting tenor of the opening statement evinces
premeditation. Thus, it is beyond cavil that the R/A e-
mail is a product of a conscious design, certainly not one
borne out of sheer carelessness or inadvertence.
Second, the act of soliciting receipts from colleagues
constitutes dishonesty, inimical to AMC's interests, for
the simple reason that Ponce would be collecting
receipted allowance from expenses he did not actually
incur. It has long been settled that an employer cannot
be compelled to retain an employee who is guilty of acts
inimical to his interests.
Third, the R/A e-mail betrays a truly sinister purpose
which AMC had a right to guard against. The solicitation
involved therein was not a simple and perfunctory act
of asking receipts from colleagues. The wordings of the
R/A e-mail convey a well- calculated methodology. The
"rules" constitute a mechanism by which AMC will be
misled to reimburse items of expense that did not
actually come out of Ponce's pocket. Moreover, the
solicitation was accompanied by an offer of a 5% cash
rebate on the value of the receipts. The scheme
envisioned in the R/A e-mail is already alarming by
itself, but the fact that such was the brainwork of a
director like Ponce all the more makes it disconcerting,
as the situation would involve profiteering perpetrated
by a person entrusted with the management of a
department in the company.
15 EVIC HUMAN RESOURCE MANAGEMENT INC.
VS. PANAHON
GR NO. 206890, JULY 31, 2017
FIRST DIVISION, CAGUIOA
Just Causes for Termination; Notice of
Termination
It is a settled rule in labor cases that the employer has
the burden of proving that the dismissal of an employee
was for a just or authorized cause, and failure to show
this would necessarily mean that the dismissal was
unjustified and, therefore, illegal. Furthermore, not only
must the dismissal be for a cause provided by law, it
8
should also comply with the rudimentary requirements
of due process, that is, the opportunity to be heard and
to defend one's self.
Petitioner (EVIC) hired respondent (Panahon) as Chief
on board the vessel of M/V Free Lady. However,
respondent was repatriated to the Philippines without
completing the contracted period of employment.
Respondent alleged that he was illegally dismissed by
petitioner through the vessel’s Captain (Buton).
Respondent averred he took a sip from the small 􏰃ask
of whisky given to him by one of the stevedores he dealt
with and went to bed; but Captain Buton had him
awakened and ordered him to make a report on some
damages in the railings of the ship caused by the
stevedores. When he submitted the report to Captain
Buton, the latter allegedly smelled a faint odor of
whisky. Buton made a logbook entry recommending
respondent's immediate replacement without due notice
and hearing.
Whether or not petitioner was illegally dismissed.
YES. For dismissal to be valid, the employer must show
through substantial evidence — or such amount of
relevant evidence that a reasonable mind might accept
as adequate to support a conclusion — that (1) the
dismissal was for a just or authorized cause; and (2) the
dismissed employee was afforded due process of law.
The records are bereft of any evidence showing that
respondent was given a written notice of the charges
against him, or that he was given an opportunity to
explain or defend himself. Neither is there proof that
respondent was furnished with a written notice of the
penalty imposed against him and the reasons for its
imposition. Indeed, petitioners admit that these
required notices were dispensed with because,
according to them, there was a clear and existing
danger to the safety of the crew or vessel. Unfortunately
for petitioners, however, there is, again, no evidence
that was presented to prove such was the situation
when respondent was terminated.
16 READ-RITE PHILIPPINES, INC. vs. GINA G.
FRANCISCO, ET. AL.
G.R. NO. 195457. AUGUST 16, 2017
FIRST DIVISION, LEONARDO-DE CASTRO, J.
Authorized Causes; Retrenchment
Retrenchment to prevent losses is one of the authorized
causes for an employee's separation from employment
and employees shall be entitled to a separation pay
equivalent to 1 month pay or at least 1/2 month pay for
every year of service, whichever is higher.
Read-Rite began implementing a retrenchment program
due to serious business losses. About 200 employees
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
were terminated and were given involuntary
separation benefits equivalent to one month pay per
year of service. From this first batch of retrenched
employees, however, there were eight employees - who
had rendered at least ten years of service - that
apparently received additional voluntary separation
benefits.
Thereafter, Read-Rite further embarked on another
round of retrenchment. Most of the respondents were
part of this second batch of retrenched employees.
All of the respondents received involuntary
separation benefits. Accordingly, they each executed
a Release, Waiver and Quitclaim, stating that they had
each received from Read-Rite the full payment of all
compensation due them and they will not undertake any
action against the company to demand further
compensation.
However, respondents filed complaints against Read-
Rite and sought the payment of additional voluntary
separation benefits. They argued that Read-Rite
discriminated against them by not granting the
aforesaid benefits, the award of which had since become
a company policy.
Are the respondents entitled to the additional voluntary
separation benefits?
NO. Respondents are only entitled to involuntary
separation benefits.
Retrenchment to prevent losses is one of the authorized
causes for an employee's separation from employment.
The Labor Code recognizes retrenchment as a right of
the management to meet clear and continuing economic
threats or during periods of economic recession to
prevent losses.
As to involuntary separation benefits, the Compensation
and Benefits Manual explicitly and specifically states
that "an employee terminated involuntarily for reasons
beyond his control, including but not limited to
retrenchment or redundancy, shall be entitled to receive
the applicable minimum benefit prescribed by law."
As to voluntary separation benefits, the same Manual
and Retirement Plan are silent as to the conditions for
an employee's entitlement thereto, save for the length
of the required continuous service. However, one ·could
easily discern that the award of voluntary separation
benefits involves a situation that is opposite of that
contemplated in involuntary separation benefits -
that is, the employee's separation from employment is
by his own choice and/or for reasons within his control.
In view of the foregoing, the Court is more inclined to
believe that the payment of additional voluntary
separation benefits, on top of involuntary separation
benefits, to eight retrenched employees of Read-Rite
9
was indeed a mistake since the same was not in
accordance with the company's Manual and Retirement
Plan. In any event, whether said payment was a mistake
or otherwise, respondents cannot use the same to
bolster their own claim of entitlement to additional
voluntary separation benefits.
17 TRANSGLOBAL MARITIME AGENCY, INC.,
GOODWOOD SHIPMANAGEMENT PTE., LTD.
AND/OR MICHAEL ESTANIEL, v. VICENTE D.
CHUA, JR.
G.R. NO. 222430. AUGUST 30, 2017
SECOND DIVISION, PERALTA, J.
Just Causes; Insubordination or Willful
Disobedience; Requisites
Insubordination or willful disobedience, as a just cause
for the dismissal of an employee, necessitates the
concurrence of at least two requisites:
1. The employee's assailed conduct must have
been willful, that is, characterized by a wrongful
and perverse attitude; and
2. 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.
Transglobal and Goodwood hired respondent Vicente
Chua, Jr. as Able Seaman and boarded M.T. WAWASAN
RUBY.
While at the port of Taiwan, Chua and his 4 companions
left the vessel for shore leave from 7:00 to 10:00 p.m.
When they returned at 11:40 p.m., the ship captain was
infuriated.
The ship captain called Chua and the others, and were
served a written reprimand regarding the incident. They
refused to sign and acknowledge receipt of the
reprimand. Thereafter, Chua and the others
disembarked and returned to the Philippines.
Chua then filed a complaint for illegal dismissal. Chua
alleged that he and his companions returned later than
their shore leave because of a problem with their
vehicle. They immediately went to the ship's office to
return their passports and documents. However, the
captain was furious and asked to explain their tardiness.
Chua also alleged that they declined to sign the written
reprimand for it contained falsehoods.
The petitioners, on the other hand, maintained that
Chua was dismissed for a just cause. His refusal to sign
the written reprimand is a clear act of insubordination
and disrespect towards superior officers.
Was Chua’s refusal to sign the written reprimand
containing the incident which he claimed to be false
constitutive of willful disobedience?
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
No. Insubordination or willful disobedience, as a just
cause for the dismissal of an employee, necessitates the
concurrence of at least two requisites:
1. The employee's assailed conduct must have
been willful, that is, characterized by a wrongful
and perverse attitude; and
2. 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.
Chua is indeed bound to obey the lawful commands of
the captain of the ship, but only as long as these pertain
to his duties. ITCAB, there is no relevance to the order
to sign the documents in relation to Chua's performance
of his duty as a seaman. The pieces of evidence
presented are insufficient to establish that Chua's
refusal was characterized by a wrongful and perverse
mental attitude rendering his act inconsistent with
proper subordination. Chua had explained that he
refused to sign the written reprimand for he maintained
that the same contained falsehoods.
18 GRACE R. ALUAG v. BIR MULTI-PURPOSE
COOPERATIVE, NORMA L. LIPANA, AND ESTELITA
V. DATU
G.R. NO. 228449. DECEMBER 6, 2017
SECOND DIVISION, PERLAS-BERNABE, J.
Just Causes; Loss of Trust and Confidence;
Requisites and Positions of Trust
The requisites for the existence of loss of trust and
confidence as a ground for termination of employment
are as follows:
1. The employee concerned holds a position of
trust and confidence; and
2. He performs an act that would justify such loss
of trust and confidence.
There are 2 classes of positions of trust: first,
managerial employees and second, fiduciary rank-and-
file employees, such as cashiers, or those who, in the
normal exercise of their functions, regularly handle
significant amounts of money or property.
Aluag was employed as BIRMPC’s cashier. While Aluag
was on maternity leave she received a letter from
BIRMPC terminating her employment.
BIRMPC terminated Aluag's employment on the ground
of loss of trust and confidence for the following
infractions: (a) acceptance of accommodation checks;
(b) failure to deposit checks on due dates, pursuant to
a member/debtor's request; (c) not reporting to the
manager those checks with no sufficient funds or which
accounts had already closed; and (d) failure to act upon
returned checks.
Aluag then filed a complaint for illegal dismissal.
10
Can BIRMPC validly terminate Aluag’s employment?
YES. In the present case, BIRMPC alleged that Aluag's
employment was terminated on the ground of loss of
trust and confidence under Article 297 (c). The
requisites for the existence of such ground are as
follows:
1. The employee concerned holds a position of
trust and confidence; and
2. He performs an act that would justify such loss
of trust and confidence.
Anent the first requisite, there are 2 classes of positions
of trust: first, managerial employees whose primary
duty consists of the management of the establishment
in which they are employed or of a department or a
subdivision thereof, and to other officers or members of
managerial staff; and second, fiduciary rank-and-file
employees, such as cashiers, or those who, in the
normal exercise of their functions, regularly handle
significant amounts of money or property. These
employees, though rank-and-file, are routinely charged
with the care and custody of the employer's money or
property, and are thus classified as occupying positions
of trust and confidence.
Being a cashier charged with the collection of
remittances and payments, Aluag undoubtedly occupied
a position of trust and confidence.
As regards the second requisite, the employee's act
causing the loss of confidence must be directly related
to her duties rendering her unfit to continue working
for the employer.
In the present case, one of the infractions that BIRMPC
cited in justifying Aluag's dismissal is her failure to
deposit checks on due dates. While the NLRC held that
Aluag was not directly responsible for depositing the
checks on their due dates, a more thorough and
circumspect review of the records reveals that the task
of depositing checks on due dates definitely falls within
Aluag's scope of responsibilities.
Her failure to deposit the checks on their due dates
means that she failed to deliver on her task to safeguard
BIRMPC's finances. It is also well to note that she was
not given any discretion to determine whether or not to
deposit the checks. Under these circumstances, BIRMPC
had ample reason to lose the trust and confidence it
reposed upon her and thereby, terminate her
employment.
19 MEHITABEL, INC. v. JUFHEL L. ALCUIZAR
G.R. NO. 228701-02. DECEMBER 13, 2017
THIRD DIVISION, VELASCO JR, J.
Termination of Employment; Abandonment
The filing of a complaint for illegal dismissal does not
ipso facto foreclose the possibility of abandonment.
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
Respondent was employed by petitioner as its
Purchasing Manager tasked in overseeing the
production and delivery of the latter’s goods. When
respondent's dismal work performance resulted in
delays in the production and delivery of the company's
goods, respondent’s immediate supervisor counselled
the former to improve his work performance, otherwise,
disciplinary proceedings against him for gross
inefficiency may be initiated.
Because of this, respondent left the premises of
petitioner’s company and gave word that he was
quitting his job. Petitioner wrote to respondent to inform
him that the company decided to treat his act of leaving
the office as a violation of its code of conduct,
specifically on the provision of abandonment.
Respondent neither reported back to work nor
submitted his written explanation. Instead, respondent
filed a complaint for illegal dismissal.
Can respondent’s act be considered as abandonment?
YES. Petitioner issued a Return to Work Order to
respondent, which the latter received. This
circumstance effectively negates respondent's self-
serving assertion that he was dismissed from
employment; it more than implies that the company still
considered respondent as its employee.
Respondent's non-compliance with the directive in the
Return to Work, signifies his intention to sever the
employment relation with petitioner, and gives credence
to the latter's claim that it was respondent who
abandoned his job.
Evident from the foregoing is that there is no dismissal
to speak of, let alone one that is illegal. Instead, it was
respondent who clearly demonstrated his lack of
interest in resuming his employment with petitioner,
culminating in abandonment.
Respondent cannot harp on the fact that he filed a
complaint for illegal dismissal in proving that he did not
abandon his post, for the filing of the said complaint
does not ipso facto foreclose the possibility of
abandonment.
20 PHILIPPINE SPAN ASIA CARRIERS
CORPORATION (FORMERLY SULPICIO LINES,
INC.) VS. HEIDI PELAYO
G.R. NO. 212003, FEBRUARY 28, 2018
3RD DIVISION, LEONEN J
Constructive Dismissal
Allegations of constructive dismissal is not a one-sided
affair impelled by romanticized sentiment for a
preconceived underdog. Rather, it is a question of
11
justice that "hinges on whether, given the
circumstances, the employer acted fairly in exercising a
prerogative. It involves the weighing of evidence and a
consideration of the "totality of circumstance”.
Pelayo was an accounting clerk of Sulipicio Lines.
Sulpicio Lines uncovered anomalous transactions:
· One of them involved an altered check from
20,804.00 to 820,820.00.
· There were also double disbursements for a
single transaction involving 5,312.00 and
another double disbursement for a single
transaction involving 20,804.00.
· Another apparent anomaly was a discrepancy of
a voucher and disbursement. The voucher
having an amount of 17, 052.00, but what was
actually disbursed was 29, 306.00.
Pelayo was then investigated by the management team
as she was the one who prepared the checks and
vouchers. During an interview in the conduct of the
investigation, Pelayo walked out claiming she was being
coerced to admit complicity. She was then admitted to
the hospital for depression and nervous breakdown. She
filed a leave of absence and did not report to work.
Sulpicio lines then sent a memorandum requiring Pelayo
for a written explanation concerning the anomalous
transactions and Pelayo was also placed for a preventive
suspension. Sulpicio also sought the assistance of the
NBI which asked Pelayo to appear before it. However,
Pelayo filed a complaint of constructive dismissal
against Sulpicio Lines.
Was there a constructive dismissal by Sulpicio lines to
Pelayo?
NO, there was no constructive dismissal in the case at
bar. An employer who conducts investigations following
the discovery of misdeeds by its employees is not being
abusive when it seeks information from an employee
involved in the workflow which occasioned the misdeed.
In general, management has the prerogative to
discipline its employees and to impose appropriate
penalties on erring workers pursuant to company rules
and regulations. Moreover, not every inconvenience,
disruption, difficulty, or disadvantage that an employee
must endure sustains a finding of constructive
dismissal. It must be way beyond the occasional
discomforts brought about by the misunderstandings
between the employer and employee.
ICAB, no objective proof demonstrating how the
interview in Cebu actually proceeded. there is nothing
to support the claim that her interviewers were hostile,
distrusting, and censorious, or that the interview was a
mere pretext to pin her down. Respondent's subsequent
hospitalization does not prove harassment or coercion
to make an admission either. While it proves that she
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
was stressed, it does not prove that she was stressed
specifically because she was cornered into admitting
wrongdoing.
21 FLIGHT ATTENDANTS AND STEWARDS
ASSOCIATION OF THE PHILS., VS. PHIL.
AIRLINES INC.
GR NO. 178083, MARCH 13, 2018, EN BANC,
REVERSING JULY 22, 2018 AND OCTOBER 2, 2009
DECISIONS;
EN BANC: BERSAMIN J;
Financial Statements; Valid retrenchment
In determining the validity of a retrenchment, judicial
notice may be taken of the financial losses incurred by
an employer undergoing corporate rehabilitation. In
such a case, the presentation of audited financial
statements may not be necessary to establish that the
employer is suffering from severe financial losses.
PAL opined that the remaining issued between the
parties concerned by which Pal had carried out the
retrenchment program. Instead, the SC 3rd division
disbelieved the veracity of PAL’s claim of sever financial
losses, and concluded that PAL had not established its
severe financial losses because of its non-presentation
of audited financial statements. It further concluded
that Pal had implemented the retrenchment program in
bad faith. And had not used fair and reasonable criteria
in selecting the employees to be retrenched. PAL filed a
2 motion for reconsiderations which were all denied.
FASAP furthermore contends PAL failed to prove that it
had complied with the requirements for a valid
retrenchment by not submitting its audited financial
statement; that PAL had immediately terminated the
employees without prior resort to less drastic measures;
and that PALD did not observe any criteria in selecting
the employees to be retrenched.
Was there a valid retrenchment?
YES. There was a valid retrenchment. in a position
paper submitted by FASAP it had admitted the financial
troubles of PAL. Hence it is now not an issue between
the parties and not needed to prove. Thus, the non-
submission of audited financial statements is irrelevant.
Moreover, PAL was undergoing financial rehabilitation it
sufficiently indicates its financial condition. The
presentation of financial audited should not be the sole
means by which to establish financial losses. The
presentation of financial statements although
convenient is not required in all cases of retrenchment.
The evidence of retrenchment really depends on the
particular circumstances obtaining. Moreover, there was
Good-faith on part of PAL. They cannot be motivated by
ill-will or bad faith. Records show that the parties met
on several occasions to explore cost-cutting measures
12
including the implementation of the retrenchment
program.
22 LA CONSOLACION COLLEGE OF MANILA, SR.
IMELDA A. MORA, OSA, ALBERT D. MANALILI,
AND ALICIA MANABAT V. VIRGINIA PASCUA,
M.D.
GR. NO. 214744, MARCH 14, 2018
THIRD DIVISIONG J. LEONEN
Invalid retrenchment; Fair and reasonable
Criteria: Status and Seniority
For a valid retrenchment there must be fair and
reasonable criteria that considered the status and
seniority of the retrenched employee.
On January 10, 2000, Pascua's services as school
physician were engaged by La Consolacion.5 She started
working part-time before serving full-time from 2008.
Later Pascua was handed an inter-office memo. Inviting
her to a meeting concerning her working condition. In
that meeting Pascua was handed a termination of
employment, explaining the reasons and the terms of
her dismissal. It was due to the current financial
situation of LA consolascion caused by the decrease in
enrollment in our institution. Pascua wrote to Sr. Mora,
pointing out that the part-time school physician, Dr.
Venus Dimagmaliw (Dr. Dimagmaliw), should have
been considered for dismissal first. She also noted that
rather than dismissing her outright. Following this,
Pascua proceeded to file a complaint for illegal dismissal
against La Consolacion.
La Consolacion replied that Pascua in particular was
retrenched because her position, the highest paid in the
health services division, was dispensable.
Was the retrenchment valid?
NO. There was no valid retrenchment. it did not comply
with the requirements on valid retrenchment.
particularly that it used fair and reasonable criteria in
ascertaining who would be dismissed and who would be
retained among the employees, such as status,
efficiency, seniority, physical fitness, age, and financial
hardship for certain workers.
ICAB, There is no dispute here about respondent's
seniority and preferred status. Petitioners acknowledge
that she had been employed by La Consolacion since
January 2000, initially as a part-time physician then
serving full-time beginning 2008. It is also not disputed
that while respondent was a full-time physician, La
Consolacion had another physician, Dr. Dimagmaliw,
who served part-time. Precisely, respondent's
preeminence is a necessary implication of the very
criteria used by La Consolacion in retrenching her, that
she was the highest paid employee in health services
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
division. La Consolacion's disregard of respondent's
seniority and preferred status relative to a part-time
employee indicates its resort to an unfair and
unreasonable criterion for retrenchment.
23 UNIVERSITY OF THE EAST AND DR. ESTER
GARCIA VS VERONICA M. MASANGKAY AND
GERTRUDO R. REGONDOLA,
G.R. NO. 226727, APRIL 25, 2018
3RD DIVISION. VELASCO J
Plagiarism; Dismissal from service
Considering the highest integrity and morality that is
required from the teacher, the plagiarism committed by
the teachers, wherein they attest to its originality and
free of plagiarism entitles dismissal from service.
Respondents are regular faculty members of the
University of the East (UE). While holding such
positions, they submitted 3 manuals and holding under
oath that such manuals are entirely original and free
from plagiarism. UE approved the use of said manuals
for the College of Engineering. Thereafter, a complaint
via email was filed by Chenoworth and singer in which
denied giving respondents permission to copy,
reproduce, imitate, or alter said books, and asked for
assistance from UE to stop the alleged unlawful acts and
deal with this academic dishonest. UE investigated the
matter, in which respondent also actively participated.
UE then issued a board of resolution dismissing the
respondents.
Was there a valid dismissal of the respondents?
Yes, there was a valid dismissal. The allegations in the
email are admissible. In labor cases, the deciding
authority should use every reasonable means to
ascertain speedily and objectively the facts, without
regard to technicalities of law and procedure. Technical
rules of evidence are not strictly binding in labor cases
such as the instant one.
Moreover, Respondents were not in good faith since,
being the principal authors thereof, they had full
knowledge as to what they were including in their
written work. In other words, they knew which portions
were truly original and which were not. There is
sufficient basis for dismissing respondents from service,
considering the highest integrity and morality which the
profession requires from its teachers. Respondents
plagiarized the works of Chenoweth and Singer by lifting
large portions of the text of the works of said writers
without properly attributing the copied text, and, to
make matters worse, they represented under oath that
no portion of the Manuals were plagiarized when, in
truth and in fact, huge portions thereof were improperly
lifted from other materials.
13
24 RAYMOND A. SON, RAYMOND S. ANTIOLA,
AND WILFREDO E. POLLARCO VS UNIVERSITY OF
SANTO TOMAS, FR. ROLANDO DELA ROSA, DR.
CLARITA CARILLO, DR. CYNTHIA LOZA, FR.
EDGARDO ALAURIN, AND THE COLLEGE OF FINE
ARTS AND DESIGN FACULTY COUNCIL
G.R. NO. 211273, APRIL 18, 2018
FIRST DIVISION, DEL CASTILL J
Dismissal; Non-compliance with the minimum
qualifications
Non-compliance with the minimum qualifications
entitles dismissal. Since the Petitioners had not
complied with the Master’s degree as minimum
qualification they are validly dismissed by UST.
Petitioners Son, et. al. are full time teachers of UST and
are members of the UST faculty union, with which UST
at the time had a CBA. They were designated as faculty
members on probationary status.
In the CBA provision it required master’s degree for the
faculty members’ field of instruction. This is in line with
the requirement laid down in 1992 Revised Manual of
Relations of Private Schools.
Petitioners did not possess the required Master's
Degrees, but were nonetheless hired by UST on the
condition that they fulfil the requirement within the
prescribed period. Petitioners enrolled in the Master's
Program to comply with the same, but were unable to
finish said Program.
Later, CHED issued a memorandum for the strict
implementation for the minimum qualification
particularly of the Master’s Degree and Licensure
requirements for faculty members of undergraduate
programs. Acting on such memorandum, UST wrote to
the petitioners, that it will cease the re-appointment of
those who failed to complete their master’s degree but
will allow a written appeal from the concerned faculty
members who are due for thesis defense/completion of
their Master's degrees.
Petitioners however did not comply and were
terminated.
Were the petitioners validly dismissed?
YES, the petitioners were validly dismissed. Under the
Manual of Regulations for Private Higher Education of
2008, the minimum faculty qualifications for
undergraduate programs requires that the faculty
member be a Holder of a Master’s Degree.
ICAB, the requirement was not satisfied. It is plain to
see that petitioners are not qualified to teach in the
undergraduate programs of UST. And while they were
given ample time and opportunity to satisfy the
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
requirements by obtaining their respective master's
degrees, they failed in the endeavor. Petitioners knew
this - that they cannot continue to teach for failure to
secure their master's degrees and needed no reminding
of this fact. Both petitioners and respondents have been
violating it. The fact that government has not cracked
down on violators, or that it chose not to strictly
implement the provision, does not erase the violations
committed.
25 MARIA DEL LEON TRANSPORTATION VS.
MACURAY
GR NO. 214940, JUNE 6, 2018
FIRST DIVISION, DEL CASTILLO, J.
Illegal Dismissal; AWOL
There is no illegal dismissal when a dispatcher informed
a bus driver that the latter was on AWOL, as a mere bus
dispatcher does not possess the power to fire a bus
driver from work. However, when an employee avails a
company’s practice and unwritten policy—of allowing its
bus drivers to take needed breaks or sabbaticals to
enable them to recover from the monotony of driving
the same route for long periods and obtained work
elsewhere—he does not abandon his employment.
Respondent Macuray filed a Complaint for illegal
dismissal against petitioner Maria De Leon
Transportation, Inc. before the Regional Arbitration
Branch San Fernando City, La Union. He contended that
after having served as bus driver of petitioner’s
company for 18 years, the latter’s bus dispatcher
informed him that he was already considered AWOL
(absent without leave), without giving him any reason.
Respondent inquired of his employment status but the
company failed to give him any notice or explanation.
During that time, he was already 62 years old, but he
received no benefits for his service. He also claimed that
petitioner owed him three months' salary for the year
2009.
On the other hand, petitioner claimed that respondent
permanently abandoned his employment, after he failed
to report for work; that it received information later on
that respondent was already engaged in driving his
family truck and was seen doing so at public roads and
highways; that respondent's claim of illegal dismissal
was not true, as there was no dismissal or termination
of his services.
Labor Arbiter dismissed the case for respondent’s failure
to state with certainty the date and time of his dismissal.
The NLRC modified the Labor Arbiter's judgment by
awarding in favor of respondent the amount of P
50,000.00 as financial assistance. Court of Appeals
upheld the NLRC’s ruling.
In the present case, petitioner argues that the CA erred
in entertaining respondent's Petition for Certiorari as it
14
was belatedly filed and defective in form and since there
was no illegal dismissal, respondent was not entitled to
his money claims, including retirement pay and
damages, as there was no bad faith on petitioner's part.
Was respondent illegally dismissed from work?
NO, respondent left his work as bus driver to work for
his family's trucking business. There is no truth to the
allegation that respondent was dismissed, actually or
constructively. He claims that the dispatcher informed
him that he was AWOL; however, a mere bus dispatcher
does not possess the power to fire him from work—this
is a prerogative belonging to management. Respondent
did not show that he met with management to inquire
on his employment status. Since respondent was not
dismissed from work, petitioner may not be held liable
for his (respondent's) monetary claims, except those
that were actually owing to him by way of unpaid
salary/commission, and retirement benefits, which are
due to him for the reason that he reached the age of
retirement while under petitioner's employ.
Did respondent abandon his employment?
NO, it cannot be said that respondent abandoned his
employment. Petitioner itself admitted that it sanctioned
the practice of allowing its drivers to take breaks from
work in order to afford them the opportunity to recover
from the stresses of driving the same long and
monotonous bus routes by accepting jobs elsewhere.
Hence, respondent only availed of petitioner's company
practice and unwritten policy.
Is the reward of retirement benefits proper?
YES. Since reinstatement is no longer feasible, the
reward of retirement benefits is proper. As for
retirement benefits, respondent is entitled to them
considering that he was never dismissed from work,
either for cause or by resignation or abandonment. As
far as petitioner is concerned, respondent merely went
on a company sanctioned sabbatical. It just so
happened that during this sabbatical, respondent
reached the retirement age of 60; by this time, he is
already 67 years old. By filing the labor case, he may
have pre-empted the payment of his retirement
benefits; but it is a clear demand for retirement benefits
nonetheless.
In the absence of a retirement plan or agreement in
Maria De Leon Transportation, Inc., the Supreme Court
hereby declares that respondent is entitled to one
month's salary for every year of service, that is:
P10,000.00 x 18 years = P180,000.00
Retirement compensation equivalent to one month's
salary for every year of service is more equitable and
just than the CA's pronouncement of one-half month's
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
salary per year of service, which the Court finds
insufficient. This is considering that petitioner has been
paying its drivers commission equivalent to less than
the minimum wage for the latter's work, and in
respondent's case, it has delayed payment of the latter's
compensation for three months. On the other hand,
petitioner's lax policies regarding the coming and going
of its drivers, as well as the fact that respondent's
layovers are considerable - it appears that throughout
his employment, respondent spends a good number of
days each month not driving for petitioner, which thus
allows him to accept other work outside—makes up for
deficiencies in the parties' compensation arrangement.
Should the petition be dismissed outright for being tardy
and for being procedurally defective?
NO. As against petitioner's claim of procedural
infirmities, the Court must uphold and protect
respondent's substantive rights. Procedure cannot
prevail over substantive rights in this case. The Court
takes into consideration the fact that respondent is
entitled to part of his monetary claims and that the
NLRC judgment failed to appreciate that respondent
remained an employee of petitioner.
Is respondent entitled for attorney’s fees?
YES. Under paragraphs 7 and 11, respectively, of Article
2208 of the Civil Code, attorney's fees and expenses of
litigation, other than judicial costs, may be recovered
"in actions for the recovery of wages of household
helpers, laborers and skilled workers" and "in any other
case where the court deems it just and equitable that
attorney's fees and expenses of litigation should be
recovered." The CA award of P20, 000.00 is thus
reasonable and just under the circumstances.
26 LINGAT VS. COCA-COLA BOTTLERS PHILS,
INC.
GR NO. 205688, JULY 4, 2018
FIRST DIVISION, DEL CASTILLO, J.
Regular Employment; Labor-Only Contracting
“A regular employee is a) one that has been engaged to
perform tasks usually necessary or desirable in the
employer's usual business or trade — without falling
within the category of either a fixed or a project or a
seasonal employee; or b) one that has been engaged
for a least one year, whether his or her service is
continuous or not, with respect to such activity he or
she is engaged, and the work of the employee remains
while such activity exists. To ascertain if one is a regular
employee, it is primordial to determine the reasonable
connection between the activity he or she performs and
its relation to the trade or business of the supposed
employer.”
15
Petitioners filed a Complaint for illegal dismissal against
Coca-Cola Bottlers Phils., Inc. (CCBPI), Monte Dapples
Trading Corp. (MDTC), and David Lyons (Lyons)
(respondents).
Petitioners averred that CCBPI employed Lingat and
Altoveros as plant driver and forklift operator, and
segregator/mixer respectively. They had continually
worked for CCBPI until their illegal dismissal in April
2005 (Lingat) and December 2005 (Altoveros). They
alleged that they were regular employees of CCBPI
because it engaged them to perform tasks necessary
and desirable in its business or trade. They asserted that
their work was the link between CCBPI and its sales
force since without them its products would not reach
its clients.
Petitioners alleged that CCBPI engaged Lingat primarily
as a plant driver but he also worked as forklift operator.
He drove CCBPI's truck loaded with softdrinks and its
other products, and thereafter, returned the empty
bottles as well as the unsold softdrinks back to the plant
of CCBPI. On the other hand, as segregator/mixer of
softdrinks, Altoveros was required to segregate
softdrinks based on the orders of the customers.
Petitioners further stated, that after becoming regular
employees (as they had been employed for more than
a year), and by way of a modus operandi, CCBPI
transferred them from one agency to another. These
agencies included Lipercon Services, Inc., People
Services, Inc., Interserve Management and Manpower
Resources, Inc. The latest agency to where they were
transferred was MDTC. They claimed that such transfer
was a scheme to avoid their regularization in CCBPI.
Petitioners stressed that the aforesaid agencies were
labor-only contractors which did not have any
equipment, machinery, and work premises for
warehousing purposes. They insisted that CCBPI owned
the warehouse where they worked; the supervisors
thereat were CCBPI's employees; and, petitioners
themselves worked for CCBPI, not for any agency.
In fine, they maintained that they were regular
employees of CCBPI because while at work, petitioners
were under the direction, control and supervision of
respondent Coca-Cola's regular employees. Finally,
petitioners argued that CCBPI dismissed them after it
found out that they were "overstaying." As such, they
posited that they were illegally dismissed as their
termination was without cause and due process of law.
CCBPI and Lyons, its President/Chief Executive Officer,
countered that this case must be dismissed because the
Labor Arbiter (LA) lacked jurisdiction, there being no
employer-employee relationship between the parties.
CCBPI and Lyons declared that CCBPI was engaged in
the business of manufacturing, distributing, and
marketing of softdrinks and other beverage products.
By reason of its business, CCBPI entered into a
Warehousing Management Agreement with MDTC for
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
the latter to perform warehousing and inventory
functions for the former.
CCBPI and Lyons insisted that MDTC was a legitimate
and independent contractor, which only assigned
petitioners at CCBPI's plant in Otis, Manila. They posited
that MDTC carried on a distinct and independent
business; catered to other clients, aside from CCBPI;
and possessed sufficient capital and investment in
machinery and equipment for the conduct of its business
as well as an office building.
CCBPI and Lyons averred that when the Warehousing
Management Agreement between CCBPI and MDTC
expired, the parties no longer renewed the same.
Consequently, it came as a surprise to CCBPI that
petitioners filed this complaint considering that CCBPI
was not their employer, but MDTC.
Whether or not there exists an employer-employee
relationship between Petitioners and Respondent CCBPI.
YES. Pursuant to Article 295 of the Labor Code a regular
employee is a) one that has been engaged to perform
tasks usually necessary or desirable in the employer's
usual business or trade — without falling within the
category of either a fixed or a project or a seasonal
employee; or b) one that has been engaged for a least
one year, whether his or her service is continuous or
not, with respect to such activity he or she is engaged,
and the work of the employee remains while such
activity exists. To ascertain if one is a regular employee,
it is primordial to determine the reasonable connection
between the activity he or she performs and its relation
to the trade or business of the supposed employer.
Relating petitioners' tasks to the nature of the business
of CCBPI — which involved the manufacture,
distribution, and sale of soft drinks and other beverages
— it cannot be denied that mixing and segregating as
well as loading and bringing of CCBPI's products to its
customers involved distribution and sale of these items.
Simply put, petitioners' duties were reasonably
connected to the very business of CCBPI. They were
indispensable to such business because without them
the products of CCBPI would not reach its customers.
Petitioners have worked for CCBPI since 1993 (Lingat)
and 1996 (Altoveros) until the non-renewal of their
contracts in 2005. Aside from the fact that their work
involved the distribution and sale of the products of
CCBPI, they remained to be working for CCBPI despite
having been transferred from one agency to another.
Hence, such repeated re-hiring of petitioners, and the
performance of the same tasks for CCBPI established
the necessity and the indispensability of their activities
in its business.
16
Labor only-contracting
CCBPI and Lyons' contention that MDTC was a
legitimate labor contractor and was the actual employer
of petitioners does not hold water.
A labor-only contractor is one who enters into an
agreement with the principal employer to act as the
agent in the recruitment, supply, or placement of
workers for the latter. A labor-only contractor 1) does
not have substantial capital or investment in tools,
equipment, work premises, among others, AND the
recruited employees perform tasks necessary to the
main business of the principal; or 2) does not exercise
any right of control anent the performance of the
contractual employee. In such case, where a labor-only
contracting exists, the principal shall be deemed the
employer of the contractual employee; and the principal
and the labor-only contractor shall be solidarily liable for
any violation of the Labor Code.
On the other hand, a legitimate job contractor enters
into an agreement with the employer for the supply of
workers for the latter but the "employer-employee
relationship between the employer and the contractor's
employees [is] only for a limited purpose, i.e., to ensure
that the employees are paid their wages."
Here, based on their Warehousing Management
Agreement, CCBPI hired MDTC to perform warehousing
management services, which it claimed did not directly
relate to its (CCBPI's) manufacturing operations.
However, it must be stressed that CCBPI's business not
only involved the manufacture of its products but also
included their distribution and sale. Thus, CCBPI's
argument that petitioners were employees of MDTC
because they performed tasks directly related to
"warehousing management services," lacks merit. The
records show that petitioners were performing tasks
directly related to CCBPI's distribution and sale aspects
of its business.
To reiterate, CCBPI is engaged in the manufacture,
distribution, and sale of its products; in turn, as plant
driver and segregator/mixer of soft drinks, petitioners
were engaged to perform tasks relevant to the
distribution and sale of CCBPI's products, which relate
to the core business of CCBPI, not to the supposed
warehousing service being rendered by MDTC to CCBPI.
Petitioners' work were directly connected to the
achievement of the purposes for which CCBPI was
incorporated. Certainly, they were regular employees of
CCBPI.
Whether or not Petitioners were dismissed without
cause and due process.
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
NO. As regular employees, petitioners may be dismissed
only for cause and with due process. These
requirements were not complied with here.
27 MAMARIL VS. RED SYSTEM COMPANY
GR NO. 229920, JULY 4, 2018
SECOND DIVISION, REYES, JR.
Illegal Dismissal
“An employee's tenurial security shall not be used as a
shield to force the hand of an employer to maintain a
recalcitrant employee, whose continued employment is
patently inimical to the employer's interest. Accordingly,
an employee who is found to be willfully disobedient of
the employer's lawful and reasonable rules and
regulations may be dismissed from service.”
Red System is a company engaged in the business of
transporting Coca Cola Products from Coca-Cola
warehouses to its various customers. Red System owns
and operates several delivery trucks. Red System
employed Mamaril as a delivery service representative.
Mamaril was assigned in Davao and was tasked to
transport goods from various depots to the end users.
Prior to his employment as a delivery service
representative, Mamaril was required to undergo
seminars to orient him on the rules and regulations of
Red System. During the orientation, drivers like
Mamaril, were reminded to always observe the following
safety rules, namely, to put a tire choke (kalso), engage
the hand brake, and shift the transmission to first gear,
before leaving the parked vehicle. These safeguards
were necessary to prevent the movement of the truck
while pushed by a forklift during loading and unloading
operations.
Three days after Mamaril's employment, he failed to put
a tire choke, and worse, shifted the gear to neutral after
parking the truck he was driving. This caused the truck
to move, which caused damage to Coca-Cola products
valued at Php14,556.00. Mamaril did not report the
incident, and even concealed the matter.
Upon discovering Mamaril's mishap, Red System
immediately re-assigned the former as a warehouse
yard driver. As a yard driver, he was involved in yet
another accident. Mamaril parked a truck without again
putting a tire choke and engaging the hand break. As a
result, the parked truck moved and hit another vehicle,
causing damage amounting to Php25,500.00. Mamaril
again concealed the incident.
Red System sent Mamaril a Notice to Explain. Mamaril
submitted his written explanation, where he admitted
that he violated the safety rules, which caused damage
to the truck.
Meanwhile, during the pendency of the administrative
hearing against Mamaril, Red Systems' officers noticed
17
that the former encountered several near-accident
misses and exhibited a lack of concern towards his work.
Consequently, Mamaril was advised to be more focused
on his duties. However, the advice remained unheeded.
Thus, to protect the safety of the company personnel
and equipment, Red System placed Mamaril under
preventive suspension for a period of one month.
Subsequently, prior to the expiration of the 30-day
preventive suspension and after the completion of the
administrative investigation, Red System found Mamaril
guilty of violating the Company Code of Conduct,
particularly, Article 4 or Unacceptable Conduct and
Behavior, as well as Rule 5, Section 2, pertaining to
"Other Offenses or Other Acts of Negligence,
Inefficiency in the Performance of Duties or in the Care,
Custody/or Use of Company Property, Funds or
Equipment Where the Amount of Loss or Damage to the
company amounted to more than Php25,000.00."
Accordingly, Mamaril was terminated for willful
disobedience and willful breach of trust as provided
under Article 297 of the Labor Code.
Aggrieved, Mamaril filed a Complaint for illegal
dismissal, he asserted that his termination from
employment was too harsh as it was manifestly
disproportionate to his infractions. Moreover, he claims
that he was even subjected to a double penalty that was
harsh and excessive, as he was initially placed under
suspension and thereafter dismissed, based on the
same infraction.
Whether or not Mamaril was illegally dismissed by Red
System, and is consequently entitled to reinstatement
and full backwages.
Mamaril was validly dismissed on account of his willful
disobedience of the lawful orders of Red System. Article
297 of the Labor Code affirms the right of an employer
to dismiss a miscreant employee on account of the
latter's willful disobedience. For an employee to be
validly dismissed on the ground of willful disobedience,
the employer must prove by substantial evidence that:
(1) the employee's assailed conduct must have been
willful or intentional, the willfulness being characterized
by a wrongful and perverse attitude; and (2) 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.
In the case at bar, the lifeblood of Red System's
business is the safe transport and delivery of Coca-Cola
products from the warehouse to the customers. As such,
drivers were repeatedly reminded to place a tire choke,
shift the engine to first gear, and pull the hand brake,
upon parking the truck. Compliance with these safety
measures was essential to prevent the sudden
movement of the truck while parked and pushed by a
forklift during loading and unloading operations.
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
Red System was not remiss in reminding its drivers of
the importance of abiding by their safety regulations.
Notably, Mamaril violated Red System's safety rules
twice, and caused damage amounting to over
Php40,000.00. To make matters worse, he even
deliberately and willfully concealed his transgressions.
Such flagrant violation of the rules, coupled with the
perversity of concealing the incidents, patently show a
wrongful and perverse mental attitude rendering
Mamaril's acts inconsistent with proper subordination.
Indubitably, this shows that Mamaril was indeed guilty
of willful disobedience of Red System's lawful orders.
Clearly, Mamaril's acts constituted a violation of Red
System's company policy. Rule 5, Section 2 (b) (3) of
Red System's Code of Conduct penalizes other acts of
negligence or inefficiency in the performance of duties
or in the care, custody and/or use of company property,
funds and/or equipment. A violation of such rule
warrants a penalty of dismissal.
Whether or not Red System was guilty of imposing a
double penalty against Mamaril.
Mamaril's preventive suspension and subsequent
dismissal from the service do not partake of a double
penalty; neither may his dismissal be regarded as harsh
and excessive. Mamaril's initial suspension was a
preventive suspension that was necessary to protect
Red System's equipment and personnel.
Preventive suspension is a measure allowed by law and
afforded to the employer if an employee's continued
employment poses a serious and imminent threat to the
employer's life or property or of his co-workers." An
employee may be placed under preventive suspension
during the pendency of an investigation against him.
In fact, the employer's right to place an employee under
preventive suspension is recognized in Sections 8 and 9
of Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code.
In the case at bar, Mamaril was placed under preventive
suspension considering that during the pendency of the
administrative hearings, he was noticed to have several
near-accident misses and he had exhibited a lack of
concern for his work. His inattentiveness posed a
serious threat to the safety of the company equipment
and personnel. This is especially true considering that
he was driving trucks loaded with fragile products.
Even if the errant employee committed the acts
complained of almost a year before the investigation
was conducted, the employer shall not be estopped from
placing the former under preventive suspension, if the
employee still performs functions that involve handling
the employer's property and funds. The employer still
has every right to protect its assets and operations
18
pending the employee's investigation. Red System's
decision to place Mamaril on preventive suspension does
not in any way render the said decision questionable.
What matters is that Mamaril's continued employment
posed a threat to the company's properties and
personnel. It would be at the height of inequity to
prevent Red System from enacting measures to protect
its own equipment pending the administrative
investigation.
28 MANUEL ACOSTA V. MATIERE SAS AND
PHILIPPE GOUVARY
G.R. NO. 232870, JUNE 3, 2019
THIRD DIVISION, LEONEN
Redundancy; Requisites of Valid Redundancy;
Fair and Reasonable Criteria
To validly implement a redundancy program, the
employer must comply with the following: (1) written
notice must be served on both the employees and the
DOLE at least 1 month prior to the intended date of
retrenchment; (2) payment of separation pay
equivalent to at 1 month pay or at least 1 month pay for
every year of service; (3) good faith in abolishing the
redundant positions; and (4) fair and reasonable criteria
in ascertaining what positions are to be declared
redundant and accordingly abolished. Otherwise, it will
be held liable for illegally dismissing the employee
affected by the redundancy.
Employed as a technical assistant, Manuel Acosta was
dismissed from his job due to cessation of Matiere SAS’s
delivery operations; hence, he filed a complaint for
illegal dismissal. The Labor Arbiter ruled in favor of him
and ruled that Matiere SAS failed to provide fair and
reasonable criteria in ascertaining what positions are
redundant and how the selection of employees to be
dismissed was made. The NLRC reversed such decision
and it was affirmed by the Court of Appeals.
Was Acosta validly terminated from employment on the
ground of redundancy?
NO.
To validly implement a redundancy program, the
employer must comply with the following: (1) written
notice must be served on both the employees and the
DOLE at least 1 month prior to the intended date of
retrenchment; (2) payment of separation pay
equivalent to at 1 month pay or at least 1 month pay for
every year of service; (3) good faith in abolishing the
redundant positions; and (4) fair and reasonable criteria
in ascertaining what positions are to be declared
redundant and accordingly abolished.
Although Matiere SAS complied with the first two
requisites, it failed to meet the 3rd and 4th requisites.
Matiere SAS’s basis for Acosta’s termination was his
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021

function, which was to monitor the delivery of supplies
became unnecessary upon completion of the shipments.
However, there was no mention of monitoring
shipments as part of petitioner’s tasks.
Fair and reasonable criteria may take into account the
preferred status, efficiency, and seniority of employees
to be dismissed due to redundancy. The respondents
never showed that they used any of these in choosing
Acosta as among the employees affected by
redundancy.
29 DEBRA ANN P. GAITE VS. FILIPINO SOCIETY
OF COMPOSERS, AUTHORS AND PUBLISHERS,
INC., ARTURO LUI PIO, NOEL G. CABANGON,
ALVIN F. DE VERA, LEOCADIO ERNESTO A.
SANCHEZ III, ADORACION SATURNO AND
CEASAR* APOSTOL
G.R. NO. 219324, AUGUST 8, 2018
SECOND DIVISION, PERALTA
Serious Misconduct; Loss of Trust and
Confidence; Requisites
For misconduct or improper behavior to be a just cause
for dismissal, (a) it must be serious; (b) it must relate
to the performance of the employee's duties; and (c) it
must show that the employee has become unfit to
continue working for the employer.
must show that the employee has become unfit to
continue working for the employer.
SC finds that Gaite’s actuation constitute serious
misconduct. The alleged misappropriated fund is a
staggering amount, and violated an express provision of
the company’s Distribution Rules and was accomplished
without the knowledge, consent, or authorization of the
Board. Also, Gaite committed said transfer in the
performance of her duties as General Manager of
FILSCAP who is responsible for the overall operations
thereof.
LOSS OF TRUST AND CONFIDENCE
For it to apply, it must be shown that: (a) the employee
concerned holds a position of trust and confidence; and
(b) he performs an act that would justify such loss of
trust and confidence.
She held a position of trust and confidence, as a General
Manager who was responsible for the overall operations
thereof. The very act of misappropriation is sufficient
reason for the loss of trust and confidence in Gaite. Proof
beyond reasonable doubt is not required. It would
already be sufficient that there is some basis for such
loss of confidence.

For termination on the ground of loss of trust and

30 JULIUS Q. APELANIO V. ARCANYS, INC. AND
confidence to be valid, it must be shown that: (a) the
CEO ALAN DEBONNEVILLE
employee concerned holds a position of trust and
G.R. NO. 227098, NOVEMBER 14, 2018
confidence; and (b) he performs an act that would
THIRD DIVISION, PERALTA
justify such loss of trust and confidence.
Probationary Period; Absence of Evidence of
Respondent FILSCAP employed petitioner Gaite as its
Working Beyond the Probationary Period
General Manager. Upon finding out theat Gaite allegedly
misappropriated funds from its Special Accounts which
An unsigned retainership agreement cannot be used as
were held in trust by FILSCAP for the benefit of its
evidence against the employer, as it is not an evidence
rightful owners, it dismissed her. Hence, Gaite filed a
to prove that the employee worked beyond the
complaint for constructive dismissal against FILSCAP.
probationary period. Hence, Article 281 of the Labor
LA ruled in favor of her and it was affirmed by the NLRC.
Code cannot be applied.
However, the CA reversed such decision.
When Apelanio was employed by Arcanys, Inc. as a
Was Gaite validly terminated from employment?
Usability/ Web Design Expert, he was initially placed on
a probationary status for 6 months wherein he
YES. Gaite was validly terminated from employment due
underwent evaluation. He was later informed that he did
to serious misconduct and loss of trust and confidence.
not meet the reasonable standards so his status would
not be converted into regular employment. However, he
SERIOUS MISCONDUCT
was offered a retainership agreement in which he
agreed. After refusing to sign a 2nd retainership
For misconduct or improper behavior to be a just cause
agreement, he filed for illegal dismissal. The Labor
for dismissal, (a) it must be serious; (b) it must relate
Arbiter dismissed such complaint, which was reversed
to the performance of the employee’s duties; and (c) it

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 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021

by the NLRC. The CA, however, reinstated the decision
of the LA.
Was Apelanio validly terminated from employment?
option than a dismissal, as the latter could adversely
affect her next job application, and she agreed to do so.
She later filed for illegal dismissal.
Was Dagdag validly terminated from employment?

YES. NO.

An employer may unilaterally prepare an employment
contract, stating the terms and conditions required of a
potential employee, and that a potential employee had
only to adhere to it by signing it.
In this case, Apelanio’s signature was notably absent
from the retainership agreements; hence, these remain
ineffectual and cannot be used as evidence against
respondents.
Constructive dismissal is a cessation of work because
continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in
rank or diminution in pay or both; or when a clear
discrimination, insensibility, or disdain by an employer
becomes unbearable to the employee. The test of
constructive dismissal is whether a reasonable person in
the employee's position would have felt compelled to
give up his employment/position under the
circumstances.

The act of suggesting that Dagdag should simply resign

The retainership agreements indicate that Apelanio was
merely engaged as a consultant, in relation to the
hacking incidents endured by respondents. He merely
alleged that he was hired as an employee under said
retainership agreements, but has yet to provide
evidence to support such claim. Therefore, Article 281
of the Labor Code finds no application in this case,
absent any evidence to prove that petitioner worked
beyond his probationary employment.
31 UNION SCHOOL INTERNATIONAL
REPRESENTED BY PASTOR ABRAHAM CHO
[SCHOOL SUPERINTENDENT], JAIME NABUA
[BOARD PRESIDENT], AND JENNIFER MANDAPAT
[SCHOOL HEAD] V. CHARLEY JANE DAGDAG
G.R. NO. 234186, NOVEMBER 21, 2018
FIRST DIVISION, TIJAM
left her with no choice but to discontinue working for
Union School. Although there was a conduct of
grievance meeting, its outcome was already
predetermined as petitioners were already resolute in
their decision to terminate Dagdag's employment. This
is evident by the fact that Dagdag was left with two
choices—resignation or dismissal and threatening her
with possible revocation of her teaching license.
To determine whether a conduct is disgraceful or
immoral, a consideration of the totality of the
circumstances surrounding the conduct; and an
assessment of the said circumstances vis-a-vis the
prevailing norms of conduct. The totality of evidence in
this case does not justify the dismissal of Dagdag from
her employment considering that there was no legal
impediment to marry between Dagdag and the father of
her child at the time of the conception.

Constructive Dismissal; Gross Immorality

Constructive dismissal is a cessation of work because

continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in
rank or diminution in pay or both; or when a clear
discrimination, insensibility, or disdain by an employer
becomes unbearable to the employee. The test of
constructive dismissal is whether a reasonable person in
the employee's position would have felt compelled to
give up his employment/position under the
circumstances.

Respondent Charley Jane Dagdag was employed as an

Elementary School Teacher by the petitioners. During
her employment, she found out that she was expecting
a child out of wedlock, which she reported to her
employers. Thereafter, she was subjected to a
disciplinary action for gross immorality. During the
hearing, she was advised that resignation was a better
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