1.Autobus Workers' Union v. NLRC, 291 SCRA 219 but the complainant again called him (Mr.
n called him (Mr. Andres) `Gago
FACTS: Petitioner Ricardo E. Escanlar worked with Autobus
Industries, Inc. (Autobus for brevity) as a Cutting Machine
Operator since January 8, 1981 with a salary of P162.16
per day. He was the recipient of two (2) Plaques of
Appreciation as Model Employee in 1987 and as Valuable
Employee in 1988. He was later elected President of the
Autobus Workers Union (AWU), the union for the rank and
file employees.
On January 29, 1993, Engr. Zosimo Prospero Chavez,
Production Manager of Autobus, received a handwritten
report2 from one Reynaldo T. Andres, a supervisor,
pertinent portions of which are quoted hereunder:
1. That in the morning of January 29, 1993, Mr. Andres
told the herein complainant, together with another
employee of the company their reassignment to the other
section of the company as these latter sections lack
manpower; that herein complainant shall be reassigned to
the `Washer Section while the other to the `Painting
Section;
2. That despite being told of the reason for his transfer,
Mr. Escanlar questioned his transfer to the `Washer
Section;
3. That on the way to his assigned section, herein
complainant asked for an eye goggle to be used in his
work; that a certain Mr. Andres told complainant that
there was one goggle in the section where he is assigned;
4. That herein complainant refused to use the goggles
saying that it might have some `ketong in it; that no new
goggles were issued to the complainant; that the latter
was given instructions by Mr. Andres; that Mr. Andres
proceeded to the `Painting Section;
5. That at around 6:55 a.m. while on his way back to the
`Washer Section, Mr. Andres saw herein complainant
talking to a certain Odelon Gamora; that the two talked for
about two (2) minutes; that after their conversation, Mr.
Andres approached the complainant; that at this instance
Mr. Escanlar told Mr. Andres that he (complainant) did not
like the way Mr. Andres chose personnel to go on
overtime; that complainant went on further saying that
Mr. Andres chose only persons who are close to him and
from those who treat him for a drink; that Mr. Andres told
complainant to ask a certain Mr. Tomas Marahit who was
near if the complainants allegations were true;
6. That thereafter, herein complainant answered back by
saying `Gago Ka to Mr. Andres; that the latter told the
former that they should talk later at his (Mr. Andres) office
Ka;
7. That at this juncture, Mr. Andres deemed it proper to
leave complainant; that while Mr. Andres was already in
the Seam Weld Section of the company, complainant
continued to stare at him without doing his job; that Mr.
Andres decided to ask complainant what his problem was;
that herein complainant retorted by saying: `BAKIT ANONG
GUSTO MO, TANG INA MO; Mr. Andres just left him
(complainant);
8. That at about 8:30 a.m. of the same day, while Mr.
Andres was on his way to the canteen, herein complainant
approached him (Mr. Andres) asking what he told the
office regarding the incident between them; that Mr.
Andres told the complainant to just ask the management
about the matter; that complainant said `Panapanahon
lang yan, panahon mo ngayon;
9. That at 3:08 p.m. of the same day, complainant
approached Mr. Andres in the canteen and said
`Patunayan mong minura kita at kung hindi, tandaan mo
yan.
On February 5, 1993, Engr. Chavez issued a
memorandum3 to petitioner Escanlar requiring the latter
to explain in writing within 48 hours from receipt thereof
why no disciplinary action should be taken against him
pursuant to the companys Code of Discipline, for
addressing Reynaldo T. Andres, his supervisor, in profane
or obscene language and for threatening him.
On February 6, 1993, Reynaldo Andres wrote a
memorandum4 to Engr. Chavez that petitioner Escanlar
had again threatened him the previous day at the
basketball court of the company premises.
On February 8, 1993, petitioner Escanlar submitted a
written explanation5 to Engr. Chavez. On the same day,
Engr. Chavez through a memorandum 6 informed petitioner
Escanlar of the scheduled hearing of the January 29
incident on February 17, 1993. The hearing was continued
on March 12, 1993.
After the administrative investigation, petitioner Escanlar
was served a Notice of Termination 7 dated April 19, 1993,
for gross misconduct, i.e., uttering unsavory remarks and
threatening his supervisor with physical harm.
On April 21, 1993, petitioner filed a complaint for illegal
dismissal against Autobus. After the submission by the
parties of their respective position papers, the case was
deemed submitted for resolution. On October 29, 1993,
Labor Arbiter Melquiades Sol D. Del Rosario rendered a
decision finding the dismissal of petitioner valid, pertinent
portions of which are quoted hereunder:
Subjecting the evidence on record to a close scrutiny, this
Arbitration Branch notes that the immediate cause of the
row was the order of transfer given by the Supervisor, Mr.
Andres to complainant and Julieto Anober from the
Cutting Section to the Washer and Painting Sections,
respectively. Complainant felt that being a machine
operator and union president at that, his transfer to the
washer section is without legal and justifiable basis and
this constituted harassment. The records discloses,
however, that the very Collective Bargaining Agreement,
signed by the union headed by complainant and
respondent provides for such transfer as management
prerogative of respondent. Article VI of the C.B.A.
In fine, this Arbitration Branch does not find any unfair
labor practice committed by respondents as an aftermath
of complainants dismissal.
ISSUE: Was there an illegal dismissal?
HELD: YES. 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 must be of such a grave and
aggravated character and not merely trivial or
unimportant.13 The charge of serious misconduct finds
ample support in the record. Petitioner failed to
satisfactorily rebut this accusation, his only defense being
self-serving denials.
The repeated utterances by petitioner of obscene,
insulting or offensive words against a superior were not
only destructive of the morale of his co-employees and a
violation of the company rules and regulations, but also
constitute gross misconduct which is one of the grounds
provided for by law to terminate the services of an
employee.14 His attitude toward his supervisor, Reynaldo T.
Andres, amounted to insubordination and conduct
unbecoming of an employee which merited the penalty of
dismissal.15cräläwvirtualibräry
Suffice it to state that an employee may be validly
dismissed for violation of a reasonable company rule or
regulation adopted for the conduct of the companys
business.16 It is the recognized prerogative of the employer
to transfer and reassign employees according to the
requirements of its business. For indeed, regulation of
manpower by the company clearly falls within the ambit of
management prerogative. A valid exercise of management
prerogative is one which, among others, covers: work
assignment, working methods, time, supervision of
workers, transfer of employees, work supervision, and the
discipline, dismissal and recall of workers. Except as
provided for, or limited by special laws, an employer is free
to regulate, according to his own discretion and judgment,
all aspects of employment.17cräläwvirtualibräry
Then petitioner makes the farfetched claim that his
dismissal is by reason of his being the union president,
thus Autobus is allegedly guilty of unfair labor practice.
This contention is devoid of any legal foundation. We
agree with the observation of the respondent NLRC that:
x x x. The records are devoid of any substantial evidence
that would establish the theory that the dismissal of herein
complainant was entirely and exclusively motivated by the
employees union activities or affiliations nor brought
about by a clear discriminatory
motive.18cräläwvirtualibräry
Finally, petitioner assails the proceedings during the
administrative investigation claiming violation of due
process. We are not convinced.
The twin requirements of notice and hearing constitute
the essential elements of due process. Due process of law
simply means giving opportunity to be heard before
judgment is rendered. In fact, there is no violation of due
process even if no hearing was conducted, where the party
was given a chance to explain his side of the controversy.
What is frowned upon is the denial of the opportunity to
be heard.19cräläwvirtualibräry
A perusal of the record reveals that petitioner was duly
notified of the charges against him and given the
opportunity to defend himself via a written explanation
and thereafter, to adduce evidence on his behalf during a
formal hearing where he was represented by a counsel of
his own choice.
A formal trial-type hearing is not even essential to due
process. It is enough that the parties are given a fair and
reasonable opportunity to explain their respective sides of
the controversy and to present supporting evidence on
which a fair decision can be based. 20 This type of hearing is
not even mandatory in cases of complaints lodged before
the Labor Arbiter.
2.Samson v. NLRC, G.R. No. 121035, April 12, 2000
FACTS: This pertains to the case (NCR-00-01-00652-94)
filed by the complainant Rufino Norberto F. Samson
against the respondents Schering-Plough Corp. (’SPC’ for
brevity) and Mr. Leo C. Riconalla, National Sales Manager,
for money equivalent of rice subsidy for the period April
1990 to December 1992 and holiday pay, now deemed
submitted-for resolution based on records available.
On February 1, 1994, said complainant filed another case
(NCR-00-02-00887-94) for illegal preventive suspension
raffled to the Honorable Labor Arbiter Donato G. Quinto,
Jr. and consolidated to the above case number.
Likewise, on February 4, 1994, complainant filed a Motion
to Amend Complaint and averred pertinently that ‘. . .
complainant was placed under an indefinite preventive
suspension on 25 January 1994’; and ‘. . . was arbitrarily
and summarily terminated from employment on 03
February 1994 on ground of loss of confidence.’
As culled from the records of the instant case, what really
precipitated complainant’s preventive suspension
culminating to his dismissal is (sic) the incident that took
place on December 17, 1993 as gleaned from the exchange
of letters/memoranda from both parties.
In a letter dated 25 January 1994 (Annex ‘A’) addressed to
the complainant Mr. Samson signed by one J.L. Estingor,
the latter called the attention of (sic) the complainant’s
conduct ‘. . . . in a manner inimical to the interests of SPC’
and enumerated the following acts committed by the
complainant
1. On or about 17 December 1993, during the Sales and
Marketing Christmas gathering. you made utterances of
obscene insulting and offensive words referring to or
directed against SPC’s Management Committee in the
presence of several co-employees.
2. On that same occasion, and again in the presence of
several co-employees, you uttered obscene, insulting and
offensive words, and made malicious and lewd gestures,
all of which referred to or were directed against Mr.
Epitacio D. Titong, Jr., President and General Manager of
SPC.
3. Also on that same occasion, you repeated your
malicious utterances and threatened to disrupt or
otherwise create violence during SPC’s forthcoming
National Sales Conference, and enjoined your co-
employees not to prepare for the said conference.
4. Subsequently, on or about 3 January 1994, you repeated
your threats to some co-employees, advising them to
watch out for some disruptive actions to happen during
the National Sales Conference.’ (Emphasis ours)
Complainant was given two (2) days from receipt of the
foregoing letter and to explain ‘. . . why no disciplinary
action, including termination’, should be taken against the
complainant and in the meantime was placed on
preventive suspension effective immediately, until further
notice.
Complainant on the very same date 25 January 1994 and
in reply to the above-mentioned letter/memo (Annex ‘B’)
wrote an explanation stating:chanrobles virtual lawlibrary
x           x          x
Relative to the said memo I would like to categorically
state the following facts:chanrob1es virtual 1aw library
1. That the act(s) alluded in the memo, specifically
paragraph[s] 1 and 2, which alleged that I uttered obscene,
insulting and offensive words is not true. If ever I
happened to utter such words it was made in reference to
the decision taken by the management committee on the
Cua Lim case and not to any particular or specific person(s)
as stated in the memo.
2. I beg to disagree with the statement made in
Paragraphs 3 and 4 of the same memo as I deny to have
uttered much less threaten to create violence and disrupt
the holding of the National Sales Conference.
Finally, I am lodging a formal protest for being placed
under preventive suspension it being contrary to the
memo which gave me two (2) days within which to explain
my position before any disciplinary action could be
initiated. I believe that the pre-empted imposition of the
preventive suspension is not only arbitrary but is
violative of my constitutional ‘right to due process’.
Submitted for your information.’(Emphasis ours)
Again, on January 27, 1994, complainant wrote a letter
(Annex ‘C’) addressed to Mr. J.L Estingor, HRD Manager,
which in part reads:chanrob1es virtual 1aw library
x           x          x
Being a staff (DSM) assigned in the field I seldom stay in
the office except on extreme necessity or when my
presence is required. Under such situation my continued
employment will not in any way poses [sic] serious or
imminent threat to the life and property of the company
as well as my co-employees. The preventive suspension
meted out against me is not only abusive, arbitrary but
indiscriminately applied under the guise of managerial
prerogative but violative of my right under the law.
I trust that my immediate reinstatement will be acted
upon without any further delay.’
In a letter dated February 3, 1994, respondent SPC thru
Mr. J.L. Estingor, wrote a letter (Annex ‘D’) to the
complainant Mr. Samson, the dispositive part of which
reads as follows:chanrob1es virtual 1aw library

‘x       x       x
In view of the foregoing, notice is hereby given that your
employment from Schering Plough Corporation is
terminated effective at the close of business hours of 3
February 1994.
We reiterate our previous directive for you to turn over
the service vehicle, all money, documents, records and
other property in your possession or custody to the
National Sales Manager. Please comply with this directive
immediately.’ 1 ordinary
On the basis of the pleadings filed by the parties and
evidence on record, the labor arbiter rendered his
Decision, dated 25 August 1994, declaring the dismissal of
petitioner illegal. The labor arbiter ruled that petitioner’s
conduct is not so serious as to warrant his dismissal
because: 1) the alleged offensive words were uttered
during an informal and unofficial get-together of
employees where there was social drinking and petitioner
was already tipsy; 2) the words were uttered to show
disapproval over management’s decision on the "Cua Lim"
case; 3) the penalty for the offense is only "verbal
reminder" under respondent company’s rules and
regulations; and 4) petitioner was already admonished
during a meeting on 4 January 1994. Accordingly,
respondent company was ordered to reinstate petitioner
as District Sales Manager and to pay him backwages.
ISSUE: whether petitioner was validly dismissed
HELD: NO. The issue of whether petitioner was validly
dismissed is a factual one and generally, factual findings of
the NLRC are accorded respect. In this case, however,
there is compelling reason to deviate from this salutary
principle because the findings of facts of the NLRC are in
conflict with that of the labor arbiter. Accordingly, this
Court must of necessity review the records to determine
which findings should be preferred as more conformable
to the evidentiary facts. 6 these kinds of occasions which are beyond the disciplinary
To constitute valid dismissal, two (2) requisites must be
met: (1) the dismissal must be for any of the causes
expressed in Article 282 of the Labor Code; and (2) the
employee must be given an opportunity to be heard and
defend himself
As borne by the records, petitioner’s dismissal was brought
about by the utterances he made during an informal
Christmas gathering of respondent company’s Sales and
Marketing Division on 17 December 1993. Petitioner was
heard to have uttered, "Si EDT (referring to Epitacio D.
Titong, General Manager and President of respondent
company), bullshit yan," "sabihin mo kay EDT yan" and
"sabihin mo kay EDT, bullshit yan," while making the "dirty
finger" gesture. Petitioner likewise told his co-employees
that the forthcoming national sales conference of
respondent company would be a "very bloody one."cralaw
virtua1aw library
The NLRC ruled that the foregoing actuation of petitioner
constituted gross misconduct warranting his dismissal.
Citing jurisprudence, the NLRC held that "in terminating
the employment of managerial employees, the employer is
allowed a wider latitude of discretion than in the case of
rank-and-file." 8
We do not agree with the findings of the NLRC.
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 must be
of such grave and aggravated character and not merely
trivial and unimportant. Such misconduct, however
serious, must, nevertheless, be in connection with the
employee’s work to constitute just cause for his
separation. 9chanrobles virtua| |aw |ibrary
In this case, the alleged misconduct of petitioner, when
viewed in its context, is not of such serious and grave
character as to warrant his dismissal. First, petitioner
made the alleged offensive utterances and obscene
gesture during an informal Christmas gathering of
respondent company’s district sales managers and
marketing staff. The gathering was just a casual get-
together of employees. It is to be expected during this
kind of gatherings, where tongues are more often than not
loosened by liquor or other alcoholic beverages, that
employees freely express their grievances and gripes
against their employers. Employees should be allowed
wider latitude to freely express their sentiments during
authority of the employer. Significantly, it does not appear
in the records that petitioner possessed any ascendancy
over the employees who heard his utterances as to cause
demoralization in the ranks.
Second, petitioner’s outburst was in reaction to the
decision of the management in the "Cua Lim" case.
Admittedly, using the words "bullshit" and "putang ina"
and making lewd gesture to express his dissatisfaction
over said management decision were clearly in bad taste
but these acts were not intended to malign or cast
aspersion on the person of respondent company’s
president and general manager.
The instant case should be distinguished from the previous
cases where we held that the use of insulting and offensive
language constituted gross misconduct justifying an
employee’s dismissal. In De la Cruz v. NLRC, 10 the
dismissed employee shouted "sayang ang pagka-
professional mo!" and "putang ina mo" at the company
physician when the latter refused to give him a referral
slip. In Autobus Workers’ Union (AWU) v. NLRC, 11 the
dismissed employee called his supervisor "gago ka" and
taunted the latter by saying "bakit anong gusto mo, tang
ina mo." In these cases, the dismissed employees
personally subjected their respective superiors to the
foregoing verbal abuses. The utter lack of respect for
their superiors was patent. In contrast, when petitioner
was heard to have uttered the alleged offensive words
against respondent company’s president and general
manager, the latter was not around.
In Reynolds Philippine Corporation v. Eslava, 13 the
dismissed employee circulated several letters to the
members of the company’s board of directors calling the
executive vice-president and general manager a "big fool,"
"anti-Filipino" and accusing him of "mismanagement,
inefficiency, lack of planning and foresight, petty
favoritism, dictatorial policies, one-man rule,
contemptuous attitude to labor, anti-Filipino utterances
and activities." In this case, the records do not show that
petitioner made any such false and malicious statements
against any of his superiors.
Third, respondent company itself did not seem to consider
the offense of petitioner serious and grave enough to
warrant an immediate investigation on the matter. It must
be recalled that petitioner uttered the alleged offensive
language at an informal gathering on 17 December 1993.
He then allegedly made threatening remarks about the
forthcoming sales conference on 3 January 1994. During a
meeting on 4 January 1994, Mr. Titong, Sr., the president
and general manager of respondent company and
allegedly to whom the offensive words were directed,
merely admonished petitioner stating that, "when there is
a disagreement, act in a professional and civilized
manner." Respondent company allowed several weeks to
pass before it deemed it necessary to require petitioner
to explain why no disciplinary action should be taken
against him for his behavior. This seeming lack of urgency
on the part of respondent company in taking any
disciplinary action against petitioner negates its charge
that the latter’s misbehavior constituted serious
misconduct
Fifth Offense: Suspension and final reprimand with
warning of dismissal if reoccurs.
Sixth Offense: Dismissal
Petitioner’s conduct on 17 December 1993 may be
properly considered as falling under either paragraph
number 2, i.e., use of violent language, or paragraph
number 3, i.e., insolence or disrespect towards a superior
authority. Being a first offense, the appropriate penalty
imposable on petitioner is only a "verbal reminder" and
not dismissal.
Given the environmental circumstances of this case, the
acts of petitioner clearly do not constitute serious
misconduct as to justify his dismissal. Neither is his
dismissal justified on ground of loss of confidence. As a
ground for dismissal, the term "trust and confidence" is
restricted to managerial employees. 18 We share the view
of the Solicitor General that petitioner is not a managerial
employee. Before one may be properly considered a
managerial employee, all the following conditions must be
met:chanrob1es virtual 1aw library
(1) Their primary duty consists of the management of the
establishment in which they are employed or of a
department or sub-division thereof;
(2) They customarily and regularly direct the work of two
or more employees therein;
(3) They have the authority to hire or fire other employees
of lower rank; or their suggestions and recommendations
as to the hiring and firing and as to the promotion or any
other change of status of other employees are given
particular weight. 19chanrobles virtua| |aw |ibrary
Further, it is the nature of the employee’s functions, and
not the nomenclature or title given to his job, which
determines whether he has rank-and-file, supervisory or
managerial status. 20 Petitioner describes his functions as
District Sales Manager as follows:jgc:chanrobles.com.ph
"The office of a District Sales Manager’s primary
responsibility is to achieve or surpass the sales and profit
targets for each territory in the assigned district through:
(a) efficient planning; (b) management function; and (c)
auditing and control. "Management action," on the other
hand, means to direct the activities of the Professional
Medical Representatives [by]: (1) [making] decisions that
are compatible with district, national and corporate
objectives; (2) [directing] the activities of representative
through — (a) frequent field visits (must spend at least
80% of working days in a quarter, allocating eight (8)
working days per PMR/quarter excluding travel time); (b)
written communications; (c) sales meetings - (3) [training]
PMRs in medical/product knowledge; (4) [motivating] and
[developing] PMRs toward greater productivity; (5) [acting]
as a channel between field and home office; (6)
[maintaining] records as basis for quick analysis of the
district performance; (7) [overseeing] special projects
assuring the cost benefit value of such benefit; (8) . . .
suggesting to sales management new ideas, methods,
devices to increase productivity of sales district or
individual properties; and [insuring] safe custody and
proper maintenance of all company properties (e.g.
company cars, audio-visuals). 21
The above job description does not mention that
petitioner possesses the power "to lay down policies nor
to hire, transfer, suspend, lay off recall, discharge, assign
or discipline employees." Absent this crucial element,
petitioner cannot be considered a managerial employee
despite his designation as District Sales Manager.
Granting arguendo that petitioner were to be considered.
a managerial employee, the ground for "loss of
confidence" is still without basis. Loss of trust and
confidence to be a valid ground for an employee’s
dismissal must be clearly established. 22 A 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.
It must rest on substantial grounds and not on the
employer’s arbitrariness, whims, caprices or suspicion,
otherwise, the employee would remain at the mercy of the
employer. 23 When petitioner made the offensive
utterances, it can be said that he merely acted "carelessly,
thoughtlessly or heedlessly" and not "intentionally,
knowingly, purposely, or without justifiable excuse."cralaw
virtua1aw library
In fine, there being no just cause for petitioner’s dismissal,
the same is consequently unlawful. Petitioner is thus
entitled to reinstatement to his position as District Sales
Manager, unless such position no longer exists, in which
case he shall be given a substantially equivalent position
without loss of seniority rights. He is likewise entitled to
the payment of his full backwages.
3.Cosep v. NLRC, 290 SCRA 704
FACTS: Petitioners Alma Cosep,
Dulcevita Soriano, Marilou Coquia and
Mary Jane Raborar were regular
employees of private respondent
Premiere Development Bank at its
Guadalupe Branch, then headed by
area manager Gloria Doplito. Cosep
began working with private
respondent on October 11, 1989,
Coquia, on March 7, 1994, Soriano, on
April of 1992, and Raborar, on March
4, 1994.
On November 17, 1994, private
respondent suspended Doplito for
alleged malversation of money
belonging to its clients. Commiserating
with Doplito, petitioners wrote an
open letter which criticized private
respondent's handling of the case of
Doplito.
Private respondent required
petitioners to explain what they meant
by issuing the "open letter." It also
suspended petitioner and did not pay
their 13th month pay and wages in the
meantime.
Petitioners filed an answer, explaining
that the "open letter" was just an
exercise of their right to freedom of
speech.
On January 20, 1995, private
respondent sent to each petitioner a
memorandum dismissing them from
the service effective immediately, on
the ground that they undermined the
interest of the bank. However, on
January 23, 1995, private respondent
issued to each petitioner a "transfer
of assignment" temporarily
suspending the effects of the previous
memorandum ordering their
dismissal. Petitioners ignored the
memorandum transferring them to
other branches and, instead, filed a
complaint before the Labor Arbiter
against private respondent for illegal
dismissal and unpaid wages and 13th
month pay. They asked for separation
pay and the award of moral and
exemplary damages.
Despite the filing of the complaint,
private respondent again instructed
petitioners in separate letters dated
February 8, 1995 that they should
report to their new assignments,
warning that "their continued failure
and/or refusals to do so shall leave"
the bank "without any option but (to)
take such action as may be warranted
under the circumstances" to protect its
interest.
 Petitioners subsequently wrote a letter
to private respondent dated February
9, 1995, informing the bank that as of
January 20, 1995, they considered
themselves dismissed from the
service, and that they have already
filed a complaint with public
respondent.
At the time of the filing of the
complaint, Cosep was a cashier with a
monthly salary of P5,440.00. Coquia, a
teller, was earning P3,900.00 a month.
Soriano, an accounting clerk, was
receiving P4,500.00 monthly. On the
other hand, Raborar, a new accounts
clerk, was being paid P3,900.00 a
month.
ISSUE: whether or not the infraction committed by them
warrants the penalty of dismissal. NO
HELD: NO. \
The fundamental guarantees of security of tenure and
due process dictate that no worker shall be dismissed
except for just and authorized cause provided by law and
after due process. 13 Under Article 282 of the Labor Code,
as amended, an employer may validly terminate the
services of an employee on the following grounds: (a)
serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work; (b) gross and
habitual neglect by the employee of his duties; (c) fraud
or willful breach by the employee of the trust reposed in
him by his employer or duly authorized representative;
(d) commission of a crime or offense by the employee
against the person of his employer or any immediate
member of his family or his duly authorized
representative; and (e) other causes analogous to the
foregoing.
In termination cases, the burden of proof rests on the
employer to show that the dismissal is for just
cause. 14 When there is no showing of a clear, valid and
legal cause for the termination of employment, the law
considers the matter a case of illegal dismissal and the
burden is on the employer to prove that the termination
was for a valid or authorized cause. 15
In this case, private respondent has not established nor
presented sufficient basis for the dismissal of petitioners
from service on the ground of serious misconduct. As
correctly found by the Labor Arbiter, there is nothing
wrong with tile petitioners issuance of the open-letter. It
does not lay any material claims upon the bank, nor does
it threaten any sanction, nor invoke right to credit, nor
preferential treatment. It merely expressed an opinion.
Thus, there was here no prejudice, nor intent to prejudice
respondent as a banking entity. 16
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 Act must be of such a grave and
aggravated character and not merely trivial or
unimportant. Such misconduct, however serious, must,
nevertheless, be in connection with the employee's work
to constitute just cause for his separation. 17 In this case
however, the misconduct has no relation to the work of
petitioners; hence, not a valid ground.
4.Escobin v. NLRC, 289 SCRA 48
Facts:
As a just and valid cause for dismissal, willful disobedience
involves the violation of a rule, order or instruction which
is (1) reasonable and lawful, (2) sufficiently known to the
employee, and (3) connected with the duties which the
employee has been engaged to... discharge.
Abandonment, on the other hand, requires a showing that
an employee (1) deliberately and unjustly refuses to
resume his work and (2) has no intention to return to it.
"Respondent PEFTOK Integrated Services, Inc., (PISI for
short), is a duly licensed watchman and protective agency
while respondent UP-NDC Basilan Plantations, Inc. is a
corporation duly organized in accordance with law, and
the owner/possessor of lands... principally planted to
rubber, coconut, citrus, coffee, and other fruit trees in
Lamitan, Province of Basilan. Respondent Teodolfo E.
Santos is the general manager of PISI.
That complainants are bona fide members of the Basilan
Security Force Association hired by PISI in Sta. Clara,
Lamitan, Basilan, to work as guards in UP-NDC Basilan
Plantations, Inc. premises, for the purpose of guarding and
protecting plantation... property and installations from
theft, pilferage, robbery, trespass and other unlawful acts
by strangers or third persons, and plantation employees,
pursuant to an agreement between PISI and UP-NDC
Basilan Plantations, Inc. dated May 17, 1989[.] The
complainants, residents of
Sta. Clara, Lamitan, Basilan, are heads of families, hired by
PISI as security guards in and for plantation premises of
UP-NDC Basilan Plantations, Inc. They were hired on
different dates, with the individual dates of their
employment
In 1988, some of the complainants, namely: Gene
Engracia, Andres Fernandez, Rolando C. Caballes, Larry
Turco, Fernando E. Ablong, Sr. Constancio Silagan,
Winifredo N. Obedencia, Federick Laguyo, Primitivo
Calixto, Felix C. Guipitacio and Claudio Calixto were...
dismissed by PISI for insoburdination [sic] and grave
misconduct, as a result of their refusal to ring the bell in
the evening of May 25, 1988 while on duty in the premises
of the plantation, but were later reinstated in an
agreement forged between the parties at the initiative... of
Congressman Alvin Dans of Basilan Province.
On June 1, 1990, respondent UP-NDC Basilan Plantations,
Inc. ordered the reduction of the contracted guards
assigned in the plantation from seventy (70) to sixty-seven
(67), in a letter addressed by Mr. Roman R. Yap to PISI[.]
And again in a letter dated January 22, 1991 sent to Col.
Raymundo C. Sobrevega, President of PISI, by Hector A.
Quesada, President of UP-NDC Basilan Plantations, Inc.,
PISI was advised to reduce further the guards from sixty-
seven (67) to only ten, (10), xxx a... reduction [of] fifty-
seven (57) guards.
Subsequently, thereafter, PISI issued Office Memorandum
No. 4 dated February 6, 1991 placing the fifty-nine (59)
affected guards under reserved or floating status effective
February 1, 1991, subject to be posted or assigned upon
notice.
On February 12, 1991, PISI issued Office Order No. 5
amending Office Order No. 4 by deleting therefrom the
names of S/G Calixto Florentino Paddit and Sergio Quimpo.
Subsequently, on April 8, 1991, the guards placed on
reserved or floating status were instructed by registered
letter to report to PISI Head Office at Rm. 405, Sunrise
Condominium, Ortigas Avenue, Greenhills, San Juan,
Metro-Manila, for posting to PISI clients... within the
Metro-Manila area not later than April 30, 1991.
That complainants did not reply nor answer the letter sent
them, prompting PISI to reinstate by way of another letter
dated May 2, 1991, its order to complainants to report to
PISI Head Office for posting, and to explain their failure to
report as previously... instructed.
Still failing to receive a reply nor answer from the
complainants despite receipt of said letters, PISI once
more sent individual letters to complainants on May 29,
1991 ordering them to explain why no disciplinary action
shall be taken against them for failing... to comply with
PISI's Order, at the same time, reiterating its previous
Order for complainants to report to PISI Head Office for
posting.
Despite all these, complainants, for reasons known only to
them, did not bother even sending a courtesy reply nor
answer to PISI. Neither did they comply with the reiterated
Order to report to their Head Office for posting. They did
not also explain why they... were unable to so comply with
the Order.
Thus, on June 28, 1991, PISI wrote complainants individual
letters that by reason of their failure to respond to or to
comply with PISI's letters dated April 8, May 2, and May
29, 1991, and by their failure to report to PISI Head Office
for posting, as ordered,... they were dismissed on ground
of insubordination or willful disobedience to lawful orders
of their employer.
After having been terminated, and during the arbitral
proceedings below, complainants belatedly justified their
inability to comply with PISI's Order to report to Head
Office in Metro-Manila for posting, saying: they are
residents of Basilan, have families of... their own in Basilan,
have never traveled beyond Visayas and Mindanao, not
provided by PISI with fare money as they cannot, on their
own, finance their travel from Basilan to Manila; that to
comply with PISI's Order to report to Head Office for
posting under said circumstances... was absurd, to say the
least. Complainants therefore, charged PISI with bad faith
in issuing said Order. That in truth, complainants said they
were constructively dismissed by PISI. For which reason,
complainants prayed that the Labor Arbiter declare their
dismissal as illegal... and consequently they should be paid
separation pay (in lieu of reinstatement), backwages,
moral and exemplary damages, attorney's fees and
litigation costs.
LA RULING
With respect to PISI's Order for complainants to report to
their head office in Manila, the Arbiter held that this is not
a reasonable order considering that complainants are
residents of Basilan, have families in Basilan, have never
been assigned beyond
Mindanao or Visayas, were not provided with fare money.
Neither were they assured of compensation similar to
what they used to receive in Basilan, nor of continued
posting while in Manila. That their transfer would surely
entail great inconvenience to complainants and their...
families. Hence, the validity of their transfer could not be
sustained. Therefore, complainants charged that their
refusal to report to the head office was justified.
Consequently, their dismissal was illegal.
NLRC RULING:
Respondent NLRC reversed the labor arbiter's Decision,
holding that private respondent had no choice but to place
petitioners and other security guards on floating status for
lack of clients to which they could be immediately
reassigned. The directive... to report to Manila for posting
was issued, because private respondent knew that it could
place petitioners on reserve status for only six months.
Petitioners' refusal to comply with said Order and their
"wanton disregard of the order to explain their inability to
xxx comply and... obey lawful orders from their employer"
constituted the "proximate cause for their dismissal." The
fact that petitioners had some reasonable objections to
the directive to report to Manila did not mitigate their
insubordination, because petitioners raised them only
during the... arbitral proceedings.
Under these circumstances, according to Respondent
Commission, private respondent had "no option left but to
charge them with insubordination and willful disobedience
to lawful orders of their employer." In according due
process to petitioners, private respondent gave... them
ample time to explain why no disciplinary measures should
be taken against them, but petitioners still refused to
comply. Hence, private respondent was justified in
dismissing petitioners.
Not only did petitioners' insubordination constitute willful
disobedience; it also partook of abandonment. Thus,
petitioners are not entitled to the payment of back wages
and separation pay or reinstatement.
Issues:
whether petitioners' dismissal was for a valid and just
cause... whether petitioners' alleged disobedience
constituted a just and valid cause to dismiss them.
Ruling:
First Issue: No Just Cause
The solicitor general maintains that petitioners' conduct
amounted to clear insubordination and constituted willful
disobedience to lawful orders given in connection with
their work. PISI reduced its work force in UP-NDC premises
as a result of the inclusion of the... latter's plantation in the
government's agrarian reform program. He argues that
PISI diligently notified petitioners for three consecutive
times to report to its head office for posting, but
petitioners "wantonly refused receipt of the letters and
abjectly failed to comply with... xxx [the] directive under
letters dated April 8, May 2 and May 29, 1991."
We disagree. While it is true that petitioners failed to
report to Manila and to respond to private respondent's
letters, this is not the end-all and be-all of the matter.
One of the fundamental duties of an employee is to obey
all reasonable rules, orders and instructions of the
employer. Disobedience, to be a just cause for
termination, must be willful or intentional, willfulness
being characterized by a wrongful and perverse... mental
attitude rendering the employee's act inconsistent with
proper subordination. A willful or intentional disobedience
of such rule, order or instruction justifies dismissal only
where such rule, order or instruction is (1) reasonable and
lawful, (2)... sufficiently known to the employee, and (3)
connected with the duties which the employee has been
engaged to discharge.[8] The assailed Resolution of
Respondent Commission and the arguments of the
solicitor general... failed to prove these requisites.
On the other hand, petitioners negated the solicitor
general's stance, contending that the instruction to report
to the Manila office was "inconvenient, unreasonable and
prejudicial," as they were not given transportation money
or, more important, any assurance that... work would be
available to them once they reached Manila. They were
not even furnished a copy of the so-called Office
Memorandum No. 4 dated February 6, 1991, which placed
them under "floating status." Thus, they aver that their
failure to report to the Manila office was not...
characterized by a "wrongful and perverse [mental]
attitude." They also assert that they have families which
they could not just leave behind.
The reasonableness and lawfulness of a rule, order or
instruction depend on the circumstances availing in each
case. Reasonableness pertains to the kind or character of
directives and commands and to the manner in which they
are... made.[9] In this case, the order to report to the
Manila office fails to meet this standard.
First, it was grossly inconvenient for petitioners, who were
residents and heads of families residing in Basilan, to
commute to Manila. In Yuco Chemical Industries, Inc. vs.
Ministry of Labor and Employment,[10] the transfer to
Manila of two workers, who were also studying in Tarlac,
was held to be grossly inconvenient. The distance to
Manila from Basilan is considerably greater than that from
Tarlac. Such transfer would have necessarily entailed...
separation of the petitioners from their families.
Second, petitioners were not provided with funds to
defray their transportation and living expenses.
Petitioners, not unknown to their employer, earned only
P1,500 to P2,500 a month before they were placed on
reserve status, after which... they remained jobless.
Furthermore, being residents of Basilan, petitioners would
have required living arrangements in Manila which, in
turn, would have entailed additional expenses on their
part.
Third, private respondent argues that it sent
transportation money to petitioners. However, the
recipients of such funds are not parties in this case.
Moreover, the alleged transportation allowance was given
only after petitioners had already been... terminated from
service. The letter[11] purportedly granting transportation
allowance to other security guards was dated August 12,
1991, which was after petitioners had been dismissed June
28,... 1991.[12]
Fourth, no reason was given by private respondent
company explaining why it had failed to inform petitioners
of their specific security assignments prior to their
departure from Basilan. If indeed the postings were to be
made in Basilan, there would... have been no necessity for
petitioners to report to Manila and no justification for
respondent's insistence on their compliance with its
directive. Since private respondent did not provide
transportation and living allowances; and since, in the first
place, petitioners could... have been easily informed of
their new assignments right there in Basilan, there was no
reason for petitioners to travel all the way to Manila.
It is obvious to us that the dismissal was effected with
mala fides, as it was intended to punish petitioners for
their refusal to heed their employer's unreasonable
directive. Respondent Commission therefore committed
grave abuse of discretion in holding that... petitioners
were dismissed for a just cause.
Abandonment of Work
Respondent Commission avers in its impugned Resolution:
"[Petitioners] are likewise guilty of 'quitting' without just
cause under Article 285 of the Labor Code, as amended.
Hence, they are clearly not entitled to any affirmative
reliefs under the law. They are
'estopped' from asserting claims against their employer,
PISI." Agreeing with Respondent Commission, the solicitor
general posits that petitioners "clearly abandoned their
work without valid cause."
This contention is untenable. Abandonment, as a just and
valid cause for dismissal, requires a deliberate, unjustified
refusal of an employee to resume his work, coupled with a
clear absence of any intention of returning to his work.[15]
No evidence was presented to establish that petitioners
relinquished their jobs. Denying they abandoned their
work, petitioners contend that it was private respondent
agency which deserted them by failing to communicate
with them for over two... months, from February 1, 1991
to April 8, 1991; and that the directive to make them
report to Manila was only a ruse to terminate their
services.
No Constructive Dismissal
For presuming that they were constructively dismissed,
petitioners are likewise in error. Constructive discharge is
an involuntary resignation resorted to when continued
employment is rendered impossible, unreasonable or
unlikely; when there is a demotion in rank and/or... a
diminution in pay; or when a clear discrimination,
insensibility or disdain by an employer becomes
unbearable to the employee.[18] In this particular case,
petitioners were not constructively dismissed; they were...
actually dismissed without just and valid cause.
5.Lagatic v. NLRC, 285 SCRA 25
FACTS: Petitioner Romeo Lagatic was employed in May
1986 by Cityland, first as a probationary sales agent, and
later on as a marketing specialist. He was tasked with
soliciting sales for the company, with the corresponding
duties of accepting call-ins, referrals, and making client
calls and cold calls. Cold calls refer to the practice of
prospecting for clients through the telephone directory.
Cityland, believing that the same is an effective and cost-
efficient method of finding clients, requires all its
marketing specialists to make cold calls. The number of
cold calls depends on the sales generated by each: more
sales mean less cold calls. Likewise, in order to assess cold
calls made by the sales staff, as well as to determine the
results thereof, Cityland requires the submission of daily
progress reports on the same.
On October 22, 1991, Cityland issued a written reprimand
to petitioner for his failure to submit cold call reports for
September 10, October 1 and 10, 1991. This
notwithstanding, petitioner again failed to submit cold call
reports for September 2, 5, 8, 10, 11, 12, 15, 17, 18, 19, 20,
22, and 28, as well as for October 6, 8, 9, 10, 12, 13 and 14,
1992. Petitioner was required to explain his inaction, with
a warning that further non-compliance would result in his
termination from the company. In a reply dated October
18, 1992, petitioner claimed that the same was an honest
omission brought about by his concentration on other
aspects of his job. Cityland found said excuse inadequate
and, on November 9, 1992, suspended him for three days,
with a similar warning.
Notwithstanding the aforesaid suspension and warning,
petitioner again failed to submit cold call reports for
February 5, 6, 8, 10 and 12, 1993. He was verbally
reminded to submit the same and was even given up to
February 17, 1993 to do so. Instead of complying with said
directive, petitioner, on February 16, 1993, wrote a note,
"TO HELL WITH COLD CALLS! WHO CARES?" and exhibited
the same to his co-employees. To worsen matters, he left
the same lying on his desk where everyone could see it.
On February 23, 1993, petitioner received a memorandum
requiring him to explain why Cityland should not make
good its previous warning for his failure to submit cold call
reports, as well as for issuing the written statement
aforementioned. On February 24, 1993, he sent a letter-
reply alleging that his failure to submit cold call reports
should trot be deemed as gross insubordination. He
denied any knowledge of the damaging statement, "TO
HELL WITH COLD CALLS!"
Finding petitioner guilty of gross insubordination, Cityland
served a notice of dismissal upon him on February 26,
1993. Aggrieved by such dismissal, petitioner filed a
complaint against Cityland for illegal dismissal, illegal
deduction, underpayment, overtime and rest day pay,
damages and attorney's fees. The labor arbiter dismissed
the petition for lack of merit. On appeal, the same was
affirmed by the NLRC; hence the present recourse.
ISSUE: WON petitioner was illegally dismissed.
HELD: To constitute a valid dismissal from employment,
two requisites must be met, namely: (1) the employee
must be afforded due process, and (2) the dismissal must
be for a valid cause.
Petitioner loses sight of the fact that "(e)xcept as provided
for, or limited by, special laws, an employer is free to
regulate, according to his discretion and judgment, all
aspects of employment." 2 Employers may, thus, make
reasonable rules and regulations for the government of
their employees, and when employees, with knowledge of
an established rule, enter the service, the rule becomes a
part of the contract of employment. 3 It is also generally
recognized that company policies and regulations, unless
shown to be grossly oppressive or contrary to law, are
generally valid and binding on the parties and must be
complied with. 4 "Corollarily, an employee may be validly
dismissed for violation of a reasonable company rule or
regulation adopted for the conduct of the company
business. An employer cannot rationally be expected to
retain the employment of a person whose . . . lack of
regard for his employer's rules . . . has so plainly and
completely been bared." 5 Petitioner's continued infraction
of company policy requiring cold call reports, as evidenced
by the 28 instances of non-submission of aforesaid
reports, justifies his dismissal. He cannot be allowed to
arrogate unto himself the privilege of setting company
policy on the effectivity of solicitation methods. To do so
would be to sanction oppression and the self-destruction
of the employer.
Moreover, petitioner made it worse for himself when he
wrote the statement, "TO HELL WITH COLD CALLS! WHO
CARES?" When required to explain, he merely denied ally
knowledge of the same. Cityland, on the other hand,
submitted the affidavits of his co-employees attesting to
his authorship of the same. Petitioner's only defense is
denial. The rule, however, is that denial, if
unsubstantiated by clear and convincing evidence, is
negative and self-serving evidence which has no weight
in law. 6 More telling, petitioner, while making much
capital out of his lack of opportunity to confront the
affiants, never, in all of his pleadings, categorically denied
writing the same. He only denied knowledge of the
allegation that he issued such a statement.
Based on the foregoing, we find petitioner guilty of willful
disobedience. Willful disobedience requires the
concurrence of at least two requisites: the employee's
assailed conduct must have been willful or intentional,
the willfulness being characterized by a wrongful and
perverse attitude; and the order violated must have been
reasonable, lawful, made known to the employee and
must pertain to the duties which he had been engaged to
discharge. 7
Petitioner's failure to comply with Cityland's policy of
requiring cold call reports is clearly willful, given the 28
instances of his failure to do so, despite a previous
reprimand and suspension. More than that, his written
statement shows his open defiance and disobedience to
lawful rules and regulations of the company. Likewise, said
company policy of requiring cold calls and the concomitant
reports thereon is clearly reasonable and lawful,
sufficiently known to petitioner, and in connection with
the duties which he had been engaged to discharge. There
is, thus, just cause for his dismissal.
On the procedural aspect, petitioner claims that he was
denied due process. Well settled is the dictum that the
twin requirements of notice and hearing constitute the
elements of due process in the dismissal of employees.
Thus, the employer must furnish the employee with two
written notices before the termination of employment can
be effected. The first apprises the employee of the
particular acts or omissions for which his dismissal is
sought; the second informs him of the employer's decision
to dismiss him. 8
In the case at bar, petitioner was notified of the charges
against him in a memorandum dated February 19, 1993,
which he received on February 23, 1993. He submitted a
letter-reply thereto on February 24, 1993, wherein he
asked that his failure to submit cold call reports be not
interpreted as gross insubordination.  9 He was given notice
of his termination on February 26, 1993. This chronology
of events clearly show that petitioner was served with the
required written notices.
Nonetheless, petitioner contends that he has not been
given the benefit of an effective hearing. He alleges that he
was not adequately informed of the results of the
investigation conducted by the company, nor was he able
to confront the affiants who attested to his writing the
statement, "TO HELL WITH COLD CALLS!" While we have
held that in dismissing employees, the employee must be
afforded ample opportunity to be heard, "ample
opportunity" connoting every kind of assistance that
management must afford the employee to enable him to
prepare adequately for his defense, 10 it is also true that
the requirement of a hearing is complied with as long as
there was an opportunity to be heard, and not necessarily
that an actual hearing be conducted.  11 Petitioner had an
opportunity to be heard as he submitted a letter-reply to
the charge. He, however, adduced no other evidence on
his behalf. In fact, he admitted his failure to submit cold
call reports, praying that the same be not considered as
gross insubordination. As held by this Court in Bernardo vs.
NLRC, 12 there is no necessity for a formal hearing where an
employee admits responsibility for an alleged misconduct.
As to the written statement, "TO HELL WITH COLD CALLS!,"
petitioner merely denied knowledge of the same. He failed
to submit controverting evidence thereon although the
memorandum of February 19, 1993, clearly charged that
he had shown said statement to several sales personnel.
Denials are weak forms of defenses, particularly when they
are not substantiated by clear and convincing evidence.
Given the foregoing, we hold that petitioner's
constitutional right to due process has not been violated.
6.PAL V. NLRC, 194 SCRA 139
FACTS: March 15, 1985, the Philippine Airlines, Inc. (PAL)
completely revised its 1966 Code of Discipline. The Code
was circulated among the employees and was immediately
implemented, and some employees were forthwith
subjected to the disciplinary measures embodied therein.
Thus, on August 20, 1985, the Philippine Airlines
Employees Association (PALEA) filed a complaint before
the National Labor Relations Commission (NLRC) for unfair
labor practice (Case No. NCR-7-2051-85) with the following
remarks: "ULP with arbitrary implementation of PAL's
Code of Discipline without notice and prior discussion with
Union by Management" (Rollo, p. 41). In its position paper,
PALEA contended that PAL, by its unilateral
implementation of the Code, was guilty of unfair labor
practice, specifically Paragraphs E and G of Article 249 and
Article 253 of the Labor Code. PALEA alleged that copies of
the Code had been circulated in limited numbers; that
being penal in nature the Code must conform with the
requirements of sufficient publication, and that the Code
was arbitrary, oppressive, and prejudicial to the rights of
the employees. It prayed that implementation of the Code
be held in abeyance; that PAL should discuss the substance
of the Code with PALEA; that employees dismissed under
the Code be reinstated and their cases subjected to further
hearing; and that PAL be declared guilty of unfair labor
practice and be ordered to pay damages (pp. 7-14,
Record.)
PAL filed a motion to dismiss the complaint, asserting its
prerogative as an employer to prescibe rules and
regulations regarding employess' conduct in carrying out
their duties and functions, and alleging that by
implementing the Code, it had not violated the collective
bargaining agreement (CBA) or any provision of the Labor
Code. Assailing the complaint as unsupported by evidence,
PAL maintained that Article 253 of the Labor Code cited by
PALEA reffered to the requirements for negotiating a CBA
which was inapplicable as indeed the current CBA had
been negotiated.
In its reply to PAL's position paper, PALEA maintained that
Article 249 (E) of the Labor Code was violated when PAL
unilaterally implemented the Code, and cited provisions of
Articles IV and I of Chapter II of the Code as defective for,
respectively, running counter to the construction of penal
laws and making punishable any offense within PAL's
contemplation
Labor Arbiter Isabel P. Ortiguerra handling the case called
the parties to a conference but they failed to appear at the
scheduled date. Interpreting such failure as a waiver of the
parties' right to present evidence, the labor arbiter
considered the case submitted for decision. On November
7, 1986, a decision was rendered finding no bad faith on
the part of PAL in adopting the Code and ruling that no
unfair labor practice had been committed. However, the
arbiter held that PAL was "not totally fault free"
considering that while the issuance of rules and
regulations governing the conduct of employees is a
"legitimate management prerogative" such rules and
regulations must meet the test of "reasonableness,
propriety and fairness."
The labor arbiter also found that PAL "failed to prove that
the new Code was amply circulated." Noting that PAL's
assertion that it had furnished all its employees copies of
the Code is unsupported by documentary evidence, she
stated that such "failure" on the part of PAL resulted in the
imposition of penalties on employees who thought all the
while that the 1966 Code was still being followed. Thus,
the arbiter concluded that "(t)he phrase ignorance of the
law excuses no one from compliance . . . finds application
only after it has been conclusively shown that the law was
circulated to all the parties concerned and efforts to
disseminate information regarding the new law have been
exerted
ISSUE: whether or not the formulation of a Code of
Discipline among employees is a shared responsibility of
the employer and the employees.
HELD: YES. Indeed, it was only on March 2, 1989, with the
approval of Republic Act No. 6715, amending Article 211 of
the Labor Code, that the law explicitly considered it a State
policy "(t)o ensure the participation of workers in decision
and policy-making processes affecting the rights, duties
and welfare." However, even in the absence of said clear
provision of law, the exercise of management prerogatives
was never considered boundless. Thus, in Cruz vs.
Medina (177 SCRA 565 [1989]) it was held that
management's prerogatives must be without abuse of
discretion.
All this points to the conclusion that the exercise of
managerial prerogatives is not unlimited. It is
circumscribed by limitations found in law, a collective
bargaining agreement, or the general principles of fair play
and justice (University of Sto. Tomas vs. NLRC, 190 SCRA
758 [1990]). Moreover, as enunciated in Abbott
Laboratories (Phil.), vs. NLRC  (154 713 [1987]), it must be
duly established that the prerogative being invoked is
clearly a managerial one.
A close scrutiny of the objectionable provisions of the
Code reveals that they are not purely business-oriented
nor do they concern the management aspect of the
business of the company as in the San Miguel case. The
provisions of the Code clearly have repercusions on the
employee's right to security of tenure. The
implementation of the provisions may result in the
deprivation of an employee's means of livelihood which,
as correctly pointed out by the NLRC, is a property right
(Callanta, vs Carnation Philippines, Inc., 145 SCRA 268
[1986]). In view of these aspects of the case which border
on infringement of constitutional rights, we must uphold
the constitutional requirements for the protection of labor
and the promotion of social justice, for these factors,
according to Justice Isagani Cruz, tilt "the scales of justice
when there is doubt, in favor of the worker" (Employees
Association of the Philippine American Life Insurance
Company vs. NLRC, 199 SCRA 628 [1991] 635).
Verily, a line must be drawn between management
prerogatives regarding business operations  per se and
those which affect the rights of the employees. In
treating the latter, management should see to it that its
employees are at least properly informed of its decisions
or modes action. PAL asserts that all its employees have
been furnished copies of the Code. Public respondents
found to the contrary, which finding, to say the least is
entitled to great respect.
PAL posits the view that by signing the 1989-1991
collective bargaining agreement, on June 27, 1990, PALEA
in effect, recognized PAL's "exclusive right to make and
enforce company rules and regulations to carry out the
functions of management without  having to discuss the
same with PALEA and much less, obtain the
latter's conformity thereto
Such provision in the collective bargaining agreement may
not be interpreted as cession of employees' rights to
participate in the deliberation of matters which may affect
their rights and the formulation of policies relative thereto.
And one such mater is the formulation of a code of
discipline.
Indeed, industrial peace cannot be achieved if the
employees are denied their just participation in the
discussion of matters affecting their rights. Thus, even
before Article 211 of the labor Code (P.D. 442) was
amended by Republic Act No. 6715, it was already
declared a policy of the State, "(d) To promote the
enlightenment of workers concerning their rights and
obligations . . . as employees." This was, of course,
amplified by Republic Act No 6715 when it decreed the
"participation of workers in decision and policy making
processes affecting their rights, duties and welfare."
PAL's position that it cannot be saddled with the
"obligation" of sharing management prerogatives as
during the formulation of the Code, Republic Act No.
6715 had not yet been enacted (Petitioner's
Memorandum, p. 44; Rollo, p. 212), cannot thus be
sustained. While such "obligation" was not yet founded
in law when the Code was formulated, the attainment of
a harmonious labor-management relationship and the
then already existing state policy of enlightening workers
concerning their rights as employees demand no less
than the observance of transparency in managerial
moves affecting employees' rights.
Petitioner's assertion that it needed the implementation of
a new Code of Discipline considering the nature of its
business cannot be overemphasized. In fact, its being a
local monopoly in the business demands the most
stringent of measures to attain safe travel for its patrons.
Nonetheless, whatever disciplinary measures are adopted
cannot be properly implemented in the absence of full
cooperation of the employees. Such cooperation cannot
be attained if the employees are restive on account, of
their being left out in the determination of cardinal and
fundamental matters affecting their employment.
7.Judy Philippines v. NLRC, 289 SCRA 755
FACTS: Virginia Antiola was employed by petitioner Judy
Philippines, Inc. in the latter's export business since
January 1985. In the course of such employment, she
worked as an assorter of baby infant dresses with a daily
salary of P69.00 up to January 11, 1989.
On November 15, 1988, Virginia Antiola was directed by
Marietta Elizon, her supervisor, to sort out baby infant
dresses pursuant to an instruction sheet.
On January 4, 1989, petitioner, thru its Personnel
Manager, Mrs. Lolita Agus, required private respondent to
explain in writing why she should not be meted disciplinary
sanctions for her erroneous assortment and packaging of
2,680 dozens of infant wear. On the same day, she
submitted her written explanation, admitting her error and
pleading that "Kaya inihihingi ko po nang paumanhin ang
aking pagkakamali." 4
Similarly on January 24, 1989, Marietta Elizon, private
respondent's supervisor and Ester Rellesiva, the packer,
received a memo requiring them to explain why they
should not be penalized, Marietta Elizon submitted her
explanation on February 2, 1989 5 and Ester Rellesiva on
January 25, 1989. 6
Petitioner found private respondent guilty of negligence
and she was dismissed from employment effective January
11, 1989, Marietta Elizon, on the other hand, was
suspended from employment for one (1) month effective
February 12, 1989 on the ground of negligence through
command responsibility. Ester Rellesiva was found
innocent on the ground that when she undertook the
packing of the infant wear, the same were already sealed
in black plastic bags and could no longer be checked.
The National Federation of Labor Union (NAFLU), in behalf
of Virginia Antiola, filed a complaint for unfair labor
practice and illegal dismissal against Judy Philippines, Inc.
and Lolita Z. Agus.
NAFLU alleged that the dismissal of Virginia Antiola was
unjustified because the infant wear erroneously assorted
by Antiola should not have been shipped to the buyer had
the company's supervisor and the buyer's quality
comptroller exercised due diligence in the performance
of their duties in ensuring that the goods were properly
assorted. NAFLU assert that the act of petitioner in
dismissing private respondent Antiola is a manipulative
scheme designed to support its deliberate attempt to get
rid of her from the service.
Petitioner countered that instead of following the written
instruction of her supervisor, private respondent deviated
therefrom which resulted in erroneous packaging of the
infant wear. Thus, petitioner, avers that the dismissal of
private respondent Antiola was valid and lawful, premised
on the ground of negligence.
ISSUE: Was there an illegal dismissal?
HELD: YES. The Constitution guarantees the right of
workers to "security of tenure." 17 In upholding the same,
Article 277 (b) in relation to Section 1 of Rule XIV (Book
Five) of the Labor Code, requires the existence of a valid to
justify the termination of an employee. Without a valid
cause, dismissal of employees may not properly be done.
While it is true that the decision to dismiss or lay off an
employee is management's prerogative, it must be made
without abuse of discretion, for what is at stake is not only
the employee's position but also his means of
livelihood. 18 Therefore, he should be protected against
any arbitrary deprivation of his job. 19 At any rate, where
a penalty less punitive would suffice, whatever missteps
may be committed by labor ought not to be visited with a
consequence so severe. It is not only because of the law's
concern for the workingmen. There is, in addition, his
family to consider. Unemployment brings about
hardships and sorrows on those dependent on the wage-
earner. The misery and pain attendant to the loss of jobs
then could be avoided if there be acceptance of the view
that under all circumstances of a case the workers should
not be deprived of their means of livelihood. 20
Petitioner anchors its right to terminate the employment
of Virginia Antiola on the ground of "gross neglect of
duties," under Article 282 (b) of the Labor Code. Gross
negligence implies a want or absence of or failure to
exercise slight care or diligence, or the entire absence of
care. It evinces a thoughtless disregard of consequences
without exerting any effort to avoid them. 21
We affirm the finding of the NLRC that "Article 282 (b) of
the Labor Code requires that . . . such neglect must not
only be gross, it should be 'Gross and habitual neglect' in
character." As aptly pronounced by the NLRC, "the penalty
of dismissal is quite severe here" noting that the labor
arbiter himself admits that she committed the infraction
for the first time.
Considering that private respondent worked with the
company for four years with no known previous bad
record, the ends of social and compassionate justice would
be better served if she was merely suspended from work
rather than terminated.
We are not, however, unmindful of the negligence
committed by respondent Antiola. The employer's
obligation to give his workers just compensation and
treatment carries with it the corollary right to expect from
the workers adequate work, diligence and good conduct.
Nonetheless, private respondent's wrongdoing does not
warrant dismissal inasmuch as dismissal is the ultimate
penalty that can be meted to an employee. 22
In view of the foregoing, We rule that Judy Philippines, Inc.
had no valid cause to dispense with the services of private
respondent.
8.NASUREFCO v. NLRC, 286 SCRA 478
FACTS: Petitioner National Sugar Refineries Corporation
(NASUREFCO), a corporation which is fully owned and
controlled by the Government, operates three (3) sugar
refineries located at Bukidnon, Iloilo and Batangas. Private
respondent union represents the former supervisors of the
NASUREFCO Batangas Sugar Refinery.
On June 1, 1988, petitioner implemented a Job Evaluation
(JE) Program affecting all employees, from rank-and-file to
department heads. As a result, all positions were re-
evaluated, and all employees including the members of
respondent union were granted salary adjustments and
increases in benefits commensurate to their actual duties
and functions.
For about ten years prior to the JE Program, the members
of respondent union were treated in the same manner as
rank-and file employees. As such, they used to be paid
overtime, rest day and holiday pay. With the
implementation of the JE Program, the following
adjustments among others were made: (1) the members
of respondent union were re-classified under levels S-5 to
S-8 which are considered managerial staff for purposes of
compensation and benefits; (2) there was an increase in
basic pay of the average of 50% of their basic pay prior to
the JE Program, with the union members now enjoying a
wide gap (P1,269.00 per month) in basic pay compared to
the highest paid rank-and-file employee.
On May 11, 1990, petitioner NASUREFCO recognized
herein respondent union as the bargaining representative
of all the supervisory employees at the NASUREFCO
Batangas Sugar Refinery.
Two years after the implementation of the JE Program the
members of herein respondent union filed a complaint for
non-payment of overtime, rest day and holiday pay
allegedly in violation of Article 100 of the Labor Code.
ISSUE: W/N supervisory employees should be considered
as officers or members of the managerial staff under
Article 82, Book III of the same Code, and hence are not
entitled to overtime rest day and holiday pay.
HELD: YES. Article 212(m), Book V of the Labor Code on
Labor Relations reads:
“(m) ‘Managerial employee’ is one who is vested with
powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend,
lay-off, recall, discharged, assign or discipline
employees. Supervisory employees are those who, in the
interest of the employer effectively recommend such
managerial actions if the exercise of such authority is not
merely routinary or clerical in nature but requires the use
of independent judgment. All employees not falling within
any of those above definitions are considered rank-and-file
employees of this Book.”
Respondent NLRC, in holding that the union members are
entitled to overtime, rest day and holiday pay, and in
ruling that the latter are not managerial employees,
adopted the definition stated in the aforequoted statutory
provision.
A cursory perusal of the Job Value Contribution
Statements of the union members will readily show that
these supervisory employees are under the direct
supervision of their respective department
superintendents and that generally they assist the latter in
planning, organizing, staffing, directing, controlling
communicating and in making decisions in attaining the
company’s set goals and objectives.
These supervisory employees are likewise responsible for
the effective and efficient operation of their respective
departments. The members of respondent union discharge
duties and responsibilities which ineluctably qualify them
as officers or members of the managerial staff, as defined
in Section 2, Rule I Book III of the aforestated Rules to
Implement the Labor Code, viz.: (1) their primary duty
consists of the performance of work directly related to
management policies of their employer; (2) they
customarily and regularly exercise discretion and
independent judgment; (3) they regularly and directly
assist the managerial employee whose primary duty
consist of the management of a department of the
establishment in which they are employed (4) they
execute, under general supervision, work along
specialized or technical lines requiring special training,
experience, or knowledge; (5) they execute, under
general supervision, special assignments and tasks; and
(6) they do not devote more than 20% of their hours
worked in a work-week to activities which are not
directly and clearly related to the performance of their
work hereinbefore described.
Under the facts obtaining in this case, the union members
should be considered as officers and members of the
managerial staff and are, therefore, exempt from the
coverage of Article 82 hence they are not entitled to
overtime, rest day and holiday.
9.Del Monte Phils v. NLRC, 287 SCRA 71
FACTS: On April 2, 1986, Galagar signed Caltex Delivery
Invoice No. AP 41736, acknowledging full receipt of 12,000
liters of gasoline from the Caltex delivery truck into
petitioner's Dalirig underground tank. The fuel was drained
into the underground tank with the assistance of Galagar,
after which Juanito Salazar, the truck driver, left the Dalirig
compound. On the way to Cagayan de Oro City some 200
meters away from the Dalirig station, Salazar met and was
stopped by petitioner's Inventory and Management
Control Supervisor, Mr. Honorato J. Gamboa. Upon
inspection of the compartments which stored the
purchased fuel, Gamboa found some 70 liters of gasoline
still left in the first three compartments he opened. The
fourth compartment yielded a full tank of 2,000 liters.
Salazar remarked then that he was told by the "gas
tender" Galagar to bring the fuel over to the company's
Phillips station. However, Gamboa did not believe this
since the capacity of the underground tank could easily
accommodate the entire delivery, and besides, Galagar
had no authority to order the diversion of the delivery to
the other stations. Evidently, Galagar, in connivance with
Salazar, deliberately failed to completely drain the
contents of all four compartments of the delivery tanker
in order to sell the fuel.
In his signed statement, Salazar admitted that he left five
hundred pesos in Galagar's clipboard, apparently as part
of the latter's share of the loot. Galagar, who remained in
the Dalirig station when Salazar left with the undrained
fuel, denied knowledge of the five hundred pesos left in his
clipboard. However, despite such denial, he returned
Three Hundred Pesos (P300.00) to the plantation security
headquarters. Furthermore, the denial was contradicted
by his claim in a signed statement that the difference of
Two Hundred Pesos (P200.00) was lent to security guard
Elias Pacpaco. Galagar was suspended from work on April
16, 1986 and after investigation, was finally terminated
from work on May 16, 1986.
Finding that all circumstances pointed to Galagar's
participation in the attempt to pilfer over 2,000 liters of
diesel fuel, the labor arbiter rejected his claim of good
faith in acknowledging full receipt of the fuel although the
contents of the delivery truck were not completely
transferred to the tank. The labor arbiter stated that even
granting that the receipts were indeed signed in good
faith, Galagar would still be considered notoriously
negligent in the performance of his duties.
However, although finding that Galagar was dismissed for
cause, the labor arbiter ordered petitioner to extend
"financial assistance" equivalent to one-half month's pay
for every year of service "in view of Complainant's length
of service." [Labor Arbiter's Decision, p. 7; Rollo, p. 17.]
Petitioner then appealed to the NLRC assailing solely the
part of the decision which awarded separation pay in the
guise of "financial assistance" notwithstanding the finding
of just cause for dismissal.
Galagar, in his reply/opposition to petitioner's appeal,
addressed a different issue. Arguing that he was unjustly
dismissed, he maintained that he should be reinstated
with backwages.
On March 30, 1988, the NLRC, based on a different
interpretation of the events that took place, rendered the
assailed decision reversing the labor arbiter's finding of
just cause for dismissal and thereby ordered petitioner to
reinstate Galagar with full backwages. The motion for
reconsideration filed by petitioner was dismissed by the
NLRC. Hence, this petition.
Private respondent and the Solicitor General filed their
respective comments. Considering the comments as the
answer, the Court resolved to give due course to the
petition and to require the parties to file their respective
memoranda. Petitioner filed its reply to the Solicitor
General's comment, and later complied by submitting its
memorandum. The private and public respondents
adopted their comments as their respective memoranda.
ISSUE: whether or not there was grave abuse of discretion
on the part of the NLRC in reversing the labor arbiter's
decision.
HELD: YES. An appeal from a decision, award or order of
the labor arbiter must be brought to the NLRC within ten
(10) calendar days from receipt of such decision, award or
order, otherwise, the same becomes final and executory
[Art. 223, Labor Code; Rule VIII, Sec. 1(a), Revised Rules of
the NLRC]. Moreover, the rules of the NLRC expressly
provide that on appeal, the Commission shall limit
itself only to the specific issues that were elevated for
review, all other matters being final and executory [Rule
VIII, Sec. 5 (c), Revised Rules of the NLRC, italics supplied].
In the present case, petitioner, aggrieved by the labor
arbiter's decision ordering the extension of financial
assistance to Galagar despite the finding that his
termination was for just cause, specifically limited his
appeal to a single legal question, i.e., the validity of the
award of financial assistance to an employee dismissed for
pilfering company property. On the other hand, private
respondent did not appeal.
When petitioner limited the issue on appeal, necessarily
the NLRC may review only that issue raised. All other
matters, including the issue of the validity of private
respondent's dismissal, are final. If private respondent
wanted to challenge the finding of a valid dismissal, he
should have appealed his case seasonably to the NLRC. By
raising new issues in the reply to appeal, private
respondent is in effect appealing his case although he
has, in fact, allowed his case to become final by not
appealing within the reglementary period. A
reply/opposition to appeal cannot take the place of an
appeal. Therefore, in this case, the dismissal of the
complaint for illegal dismissal and the denial of the prayer
for reinstatement, having become final, can no longer be
reviewed.
Justifying its right to review the entire case and not just
the sole legal question raised, public respondent relied on
Article 218 (c) of the Labor Code. In the resolution denying
the motion for reconsideration, public respondent quoted
that portion which provides that the NLRC may in the
exercise of its appellate power "correct, amend or waive
any error, defect or irregularity whether in substance or in
form." [Resolution, p. 2; Rollo, p. 35.]
Such reliance is misplaced.
The Labor Code provision, read in its entirety, states that
the NLRC's power to correct errors, whether substantial
or formal, may be exercised only in the determination of
a question, matter or controversy within its
jurisdiction [Art. 218, Labor Code]. Therefore, by
considering the arguments and issues in the
reply/opposition to appeal which were not properly
raised by timely appeal nor comprehended within the
scope of the issue raised in petitioner's appeal, public
respondent committed grave abuse of discretion
amounting to excess of jurisdiction.
The contention that the NLRC may nevertheless look into
other issues although not raised on appeal since it is not
bound by technical rules of procedure, is likewise devoid
of merit.
The law does not provide that the NLRC is totally free from
"technical rules of procedure", but only that the rules of
evidence prevailing in courts of law or equity shall not be
controlling in proceedings before the NLRC [Art. 221, Labor
Code]. This is hardly license for the NLRC to disregard and
violate the implementing rules it has itself promulgated.
Having done so, the NLRC committed grave abuse of
discretion.
On the other hand, the finding of the labor arbiter that
private respondent breached his employer's trust and
confidence by pilfering company property was supported
by substantial evidence, and became final when no appeal
was made on the legality of the dismissal. We find no
cogent reason to depart from the findings of fact of the
labor arbiter or the conclusion that the dismissal was
lawful.
10.VH Manufacturing Inc. v. NLRC, G.R. No. 130957,
January 19, 2000
FACTS: Since November 5, 1985 private respondent was
employed in petitioner’s business of manufacturing
liquefied petroleum gas (LPG) cylinders. 4 He served as a
quality control inspector with the principal duty of
inspecting LPG cylinders for any possible defects and
earning P155.00 a day. 5 His service with the company was
abruptly interrupted on February 14, 1995, when he was
served a notice of termination of his employment. 6
His dismissal stemmed from an incident on February 10,
1995 wherein petitioner’s company President, Alejandro
Dy Juanco, allegedly caught private respondent sleeping
on the job. 7 On that same day, private respondent was
asked through a written notice from the petitioner’s
Personnel Department 8 to explain within twenty-four (24)
hours why no disciplinary action should be taken against
him for his violation of Company Rule 15-b 9 which
provides for a penalty of separation for sleeping during
working hours. Without delay, private respondent replied
in a letter which reads:jgc:chanrobles.com.ph
"Sir, ipagpaumanhin po ninyo kung nakapikit ako sa aking
puwesto dahil hinihintay ko po ang niliha hi Abreu para i
quality pasensiya na po kung hindi ko po namalayan ang
pagdaan ninyo dahil maingay po ang painting booth." 10
Notwithstanding his foregoing reply, he was terminated.
11
Feeling aggrieved, private respondent initially instituted on
April 26, 1995 a criminal suit for Estafa, for alleged
withholding of his salary, against the company President,
Alejandro Dy Juanco. 12 Said complaint was dismissed on
June 22, 1995 for improper forum. 13 He then filed on July
4, 1995 a complaint for illegal dismissal, praying for
reinstatement to his position as quality control inspector.
14 On June 20, 1996, Labor Arbiter Ricardo C. Nora
rendered his decision upholding petitioner’s position and
declared that private respondent’s dismissal is anchored
on a valid and just cause and the latter’s contention of
denial of due process as devoid of merit.
ISSUE: Was there an illegal dismissal?
HELD: YES. First. Basically, the reason cited for the
dismissal of private respondent is sleeping on the job in
violation of Company Rule 15-b. Was the private
respondent sleeping on the job or was he merely idle
and, as he claimed, waiting for the next cylinder to be
checked? Evidence on this score is material, for it is the be-
all and end-all of petitioner’s cause, in view of the gravity
of the penalty of separation, as provided by the Company
Rules and Regulation. In termination disputes, the burden
of proof is always on the employer to prove that the
dismissal was for a just and valid cause. 19 What is at
stake here is not only the job itself of the employee but
also his regular income therefrom which is the means of
livelihood of his family.
A thorough review of the record discloses that, contrary to
the findings of the Labor Arbiter, petitioner’s claim that
private respondent slept on the job on February 10, 1995
was not substantiated by any convincing evidence other
than the bare allegation of petitioner. The report 20 of
Ronaldo M. Alvarez, Acting Quality Control Department
Head of petitioner corporation, on the circumstances
which ultimately served as basis for the termination of
private respondent’s employment, did not confirm the
alleged violation by private respondent of the pertinent
Company Rule 15-b. The report merely stated private
respondent’s denial and response to petitioner’s allegation
which he reiterated in his written reply. 21
Second. Petitioner’s reliance on the authorities 22 it cited
that sleeping on the job is always a valid ground for
dismissal, is misplaced. The authorities cited involved
security guards whose duty necessitates that they be
awake and watchful at all times inasmuch as their
function, to use the words in Luzon Stevedoring Corp. v.
Court of Industrial Relations, 23 is "to protect the company
from pilferage or loss." Accordingly, the doctrine laid down
in those cases is not applicable to the case at bar.
Third. While an employer enjoys a wide latitude of
discretion in the promulgation of policies, rules and
regulations on work-related activities of the employees,
those directives, however, must always be fair and
reasonable, and the corresponding penalties, when
prescribed, must be commensurate to the offense
involved and to the degree of the infraction. In the case at
bar, the dismissal meted out on private respondent for
allegedly sleeping on the job, under the attendant
circumstances, appears to be too harsh a penalty, 24
considering that he was being held liable for first time,
after nine (9) long years of unblemished service, for an
alleged offense which caused no prejudice to the
employer, aside from absence of substantiation of the
alleged offense. The authorities cited by petitioner are
11. Jo v. NLRC, G.R. No. 121605
Facts:
Private respondent Peter Mejila worked as barber on a
piece rate basis at Dina's Barber Shop. In 1970, the owner,
Dina Tan, sold the barbershop to petitioners Paz Martin Jo
and Cesar Jo. All the employees, including private
respondent, were absorbed by the new owners. The name
of the barbershop was changed to Windfield Barber Shop.
In 1977, petitioners designated private respondent as
caretaker of the shop because the former caretaker
became physically unfit.
When the building occupied by the shop was demolished
in 1986, the barbershop closed. But soon a place nearby
was rented by petitioners and the barbershop resumed
operations as Cesar's Palace Barbershop and Massage
Clinic. In this new location, private respondent continued
to be a barber and caretaker.
In November 1992, private respondent had an altercation
with his co-barber. Subsequently, private respondent
continued reporting for work at the barbershop. But, on
January 2, 1993, he turned over the duplicate keys of the
shop to the cashier and took away all his belongings
therefrom. On January 8, 1993, he began working as a
regular barber at the newly opened Goldilocks Barbershop.
On January 12, 1993, private respondent filed a
complaint2 for illegal dismissal with prayer for payment of
separation pay, other monetary benefits, attorney's fees
and damages.
NLRC ruled that private respondent was illegally dismissed.
Issue:
Whether or not private respondent was dismissed from or
had abandoned his employment.
Ruling:
Jurisprudence has laid out the rules and valid ground for
termination of employment. To constitute abandonment,
there must be concurrence of the intention to abandon
and some overt acts from which it may be inferred that
also irrelevant for the reason that there is no evidence on
the depravity of conduct, 25 willfulness of the
disobedience, 26 or conclusiveness of guilt on the part of
private Respondent. 27 Neither was it shown that private
respondent’s alleged negligence or neglect of duty, if any,
was gross and habitual. 28 Thus, reinstatement is just and
proper.
the employee concerned has no more interest in
working.8 In other words, there must be a clear, deliberate
and unjustified refusal to resume employment and a clear
intention to sever the employer-employee relationship on
the part of the employee.9
In the case at bar, the labor arbiter was convinced that
private respondent was not dismissed but left his work on
his own volition because he could no longer bear the
incessant squabbles with his co-worker. Nevertheless,
public respondent did not give credence to petitioners'
claim that private respondent abandoned his job. On this
score, public respondent gravely erred as hereunder
discussed.
At the outset, we must stress that where the findings of
the NLRC contradict those of the labor arbiter, the Court,
in the exercise of its equity jurisdiction, may look into the
records of the case and reexamine the questioned
findings.10
In this case, the following circumstances clearly manifest
private respondent's intention to sever his ties with
petitioners. First, private respondent even bragged to his
co-workers his plan to quit his job at Cesar's Palace
Barbershop and Massage Clinic as borne out by the
affidavit executed by his former co-workers. 11 Second, he
surrendered the shop's keys and took away all his things
from the shop. Third, he did not report anymore to the
shop without giving any valid and justifiable reason for his
absence. Fourth, he immediately sought a regular
employment in another barbershop, despite previous
assurance that he could remain in petitioners'
employ. Fifth, he filed a complaint for illegal dismissal
without praying for reinstatement.
Moreover, public respondent's assertion that the
institution of the complaint for illegal dismissal manifests
private respondent's lack of intention to abandon his
job12 is untenable. The rule that abandonment of work is
inconsistent with the filing of a complainant for illegal
dismissal is not applicable in this case. Such rule applies
where the complainant seeks reinstatement as a relief.
Corollarily, it has no application where the complainant
does not pray for reinstatement and just asks for
separation pay instead13 as in the present case. It goes
without saying that the prayer for separation pay, being
the alternative remedy to reinstatement, 14 contradicts
private respondent's stance. That he was illegally
dismissed is belied by his own pleadings as well as
contemporaneous conduct.
12. Metro Transit v. NLRC, 307 SCRA 747
Private respondent Victorio T. Turing was a train operator
of the light rail transit system of petitioner. He had been
suspended for three (3) days for having been absent,
without leave, for ten (10) days on December 14, 15, 16,
18, 23, 24, 27, 28, 30 and 31, 1989. 2 On February 14, 1990,
he applied for leave of absence for three (3) days
(February 17, 20, and 21, 1990), but after his leave had
expired, he failed to report for work.
He returned to work on March 12, 1990, explaining that he
had been absent because of domestic problems. However,
on March 29, 1990, private respondent was dismissed for
abandonment of work.
Before the Labor Arbiter, it held that the dismissal of the
Victorio was illegal.
On appeal, the Labor Arbiter's decision was affirmed by
the NLRC.
Issue: WON Victorio Turing have abandoned his work. NO
Ruling:
Indeed, for abandonment of work to be a just and valid
ground for dismissal, there must be a deliberate and
unjustified refusal on the part of an employee to resume
his employment. The burden of proof is on the employer
to show an unequivocal intent on the part of the employee
to discontinue employment. 8 To warrant a finding of
abandonment, there must be evidence not only of the
failure of an employee to report for work or his absence
without valid or justifiable reason, but also of his intention
to sever the employer-employee relationship. The second
element is the more determinative favor, being
manifested by overt acts. 9
To be sure, considering the reason for his absence, private
respondent cannot be said to have abandoned his work.
Indeed, petitioner has adduced no proof of overt acts on
the part of private respondent showing clearly and
unequivocably his intention to abandon his work. To the
contrary, the evidence shows that when the social worker
Emma M. Luciano conducted a home visit, private
respondent declared his intention to return to work on
March 15, 1990. As a matter of fact, he reported for work
on March 12. In his letters to petitioner dated March 12
and 13, 1990, he expressed regrets for his absences. Then,
after learning that he had been dismissed, private
respondent filed a complaint for illegal dismissal. All these
belie petitioner's allegation that private respondent had
abandoned his job. We have ruled in several cases 10 that a
timely filing of an illegal dismissal case negates
abandonment.
However, it is one thing to say that private respondent did
not abandon his work. It is quite another to say that he is
likewise not guilty of absence without leave (AWOL). No
matter what marital problems private respondent had, he
had no excuse for not informing his employer of the
reason for his failure to report for work. The record shows
that he went on leave for three days on February 17, 20,
and 21, 1990, but after his leave had expired, he did not
report for work. Considering that just a month before, on
January 9, 1990, he had been suspended for precisely
being absent without leave, private respondent should
have taken care that his absence was not considered
habitual, at least by sending word to his employer that this
time he had a good excuse.
Consequently, we hold that while private respondent may
not be dismissed for abandonment of work, he should be
suspended for three months for being absent without
leave. For this purpose, he should be considered
suspended for the period March 29, 1990 to June 26,
1990, inclusive.
13. Icawat v. NLRC, G.R. No. 133573, June 20, 2000
Facts:
Private respondent Jose F. Yape started working with
petitioners as driver of their passenger
jeepneys.chanrobles.com
On December 27, 1994, private respondent lost his driver’s
license. To secure a new one, he sought petitioners
permission to go on vacation leave. After obtaining his
license, private respondent reported for work but was
informed by petitioners that another driver had already
taken his place. Aggrieved, private respondent, on January
27, 1995, filed a complaint 4 for illegal dismissal against
herein petitioners before the Department of Labor and
Employment (DOLE) praying that he be reinstated and be
paid his 13th month pay and service incentive leave
credits.
Labor Arbiter Ariel Cadiente Santos, on July 3, 1997,
rendered judgment in favor of herein private respondent.
Issue: WON private respondent was illegally dismissed?
YES
Ruling:
To constitute abandonment, two elements must concur:
(1) the failure to report for work or absence without valid
or justifiable reason, and (2) a clear intention to sever the
employer-employee relationship, with the second element
as the more determinative factor and being manifested by
some overt acts. Mere absence is not sufficient. To prove
abandonment, the employer must show that the
employee deliberately and unjustifiably refused to resume
his employment without any intention of returning. 12
Private respondent, after his vacation leave, immediately
reported back for work but was not allowed by the
petitioners on the ground that he was already replaced by
regular drivers. After he was notified of his termination,
private respondent lost no time in filing the case for illegal
dismissal against petitioners. He cannot, therefore, by any
reasoning, be said to have abandoned his work or had no
intention of going back to work. 13 It would be illogical for
him to have left his job and later on file said
complaint.chanrobles.com : virtuallawlibrary
We have consistently ruled that a charge of abandonment
is totally inconsistent with the immediate filing of a
complaint for illegal dismissal. 14
But even assuming that private respondent abandoned his
work, petitioners should have served him with a notice of
termination on the ground of abandonment. Section 2,
Rule XVI Book V, Rules and Regulation Implementing the
Labor Code provides that any employer who seeks to
dismiss a worker shall furnish him a written notice stating
the particular acts or ormission constituting the grounds
for his dismissal. In cases of abandonment of work, the
notice shall be served at the worker’s last known address.
Hence, before termination of employment can be legally
effected, the employer must furnish the worker with two
(2) written notices, i.e. a notice which apprises the
employee of the particular acts or omissions for which his
dismissal is sought, and the subsequent notice which
informs the employee of the employer’s decision to
dismiss him. 15
Petitioners failed to give private respondent written notice
of his termination on the ground of abandonment. Failure
to do so makes the termination illegal. 16
Finally, the dismissal of private respondent being illegal, he
is entitled to the payment of backwages. We do not,
however, agree with the amount awarded to herein
private respondent in the absence of any factual basis
thereof. Private respondent has not presented any
evidence to warrant such award. The statement in his
complaint that he is earning P800.00 to P1,000.00 when he
is driving petitioners’ jeepney on a "straight" basis, or
P500.00 when driving on "half shift" basis, is purely self-
serving and speculative.
14. Farrol v. CA, G.R. No. 133259, February 10. 2000
Facts:
Petitioner Wenifredo Farrol was employed as station
cashier at respondent RCPI’S Cotabato City station. On
June 18, 1993, respondent RCPI’S district manager in
Cotabato City informed their main office that "Peragram
funds" from said branch were used for the payment of
retirement benefits of five employees.
On October 1, 1993, petitioner verified as correct RCPI’s
Field Auditor’s report that there was a shortage of
P50,985.37 in their branch’s Peragram, Petty and General
Cash Funds. Consequently, petitioner was required by the
Field Auditor to explain the cash shortage within 24 hours
from notice. The next day, petitioner paid to RCPI
P25,000.00 of the cash shortage.chanrobles virtual
lawlibrary
 RCPI required petitioner to explain why he should not be
dismissed from employment. 3 Two days thereafter,
petitioner wrote a letter to the Field Auditor stating that
the missing funds were used for the payment of the
retirement benefits earlier referred to by the branch
manager and that he had already paid P25,000.00 to RCPI.
After making two more payments of the cash shortage to
RCPI, petitioner was informed by the district manager that
he is being placed under preventive suspension. 4
Thereafter, he again paid two more sums on different
dates to RCPI leaving a balance of P6,995.37 of the
shortage.
Respondent RCPI claims that it sent a letter to petitioner
on November 22, 1993 informing him of the termination of
his services as of November 20, 1993.
Unaware of the termination letter, petitioner requested
that he be reinstated considering that the period of his
preventive suspension had expired.
Sometime in September 1995, petitioner manifested to
RCPI his willingness to settle his case provided he is given
his retirement benefits. However, RCPI informed petitioner
that his employment had already been terminated earlier.
After hearing, the Voluntary Arbitrator ruled that
petitioner was illegally dismissed from employment.
Issue: WON petitioner was illegally dismissed from
employment. YES
Ruling:
As set forth in the foregoing procedures, the employer
must comply with the twin requirements of two notices
and hearing. The first notice is that which apprises the
employee of the particular acts or omissions for which his
dismissal is sought, and after affording the employee an
opportunity to be heard, a subsequent notice informing
the latter of the employer’s decision to dismiss him from
work. 13
As regards the first notice, RCPI simply required petitioner
to "explain in writing why he failed to account" for the
shortage and demanded that he restitute the same. 14 On
the assumption that the foregoing statement satisfies the
first notice, the second notice sent by RCPI to petitioner
does not "clearly" cite the reasons for the dismissal,
contrary to the requirements set by the above-quoted
Section 6 of Book V, Rule XIV of the Omnibus
Rules.chanrobles virtua| |aw |ibrary
A perusal of RCPI’S dismissal notice reveals that it merely
stated a conclusion to the effect that the withholding was
deliberately done to hide alleged malversation or
misappropriation without, however, stating the facts and
circumstances in support thereof. It further mentioned
that the position of cashier requires utmost trust and
confidence but failed to allege the breach of trust on the
part of petitioner and how the alleged breach was
committed. On the assumption that there was indeed a
breach, there is no evidence that petitioner was a
managerial employee of respondent RCPI. It should be
noted that the term "trust and confidence" is restricted to
managerial employees. It may not even be presumed that
when there is a shortage, there is also a corresponding
breach of trust. Cash shortages in a cashier’s work may
happen, and when there is no proof that the same was
deliberately done for a fraudulent or wrongful purpose, it
cannot constitute breach of trust so as to render the
dismissal from work invalid.
Assuming further that there was breach of trust and
confidence, it appears that this is the first infraction
committed by petitioner. Although the employer has the
prerogative to discipline or dismiss its employee, such
prerogative cannot be exercised wantonly, but must be
controlled by substantive due process and tempered by
the fundamental policy of protection to labor enshrined in
the Constitution. 16 Infractions committed by an employee
should merit only the corresponding sanction demanded
by the circumstances. The penalty must be commensurate
with the act, conduct or omission imputed to the
employee 17 and imposed in connection with the
employer’s disciplinary authority.chanrobles virtual
lawlibrary
RCPI alleged that under its rules, petitioner’s infraction is
punishable by dismissal. However, employer’s rules cannot
preclude the State from inquiring whether the strict and
rigid application or interpretation thereof would be harsh
to the employee. Petitioner has no previous record in his
twenty-four long years of service — this would have been
his first offense. The Court thus holds that the dismissal
imposed on petitioner is unduly harsh and grossly
disproportionate to the infraction which led to the
termination of his services. A lighter penalty would have
been more just, if not humane. 
15.Deles v. NLRC, G.R. No. 121348, March 9. 2000
Facts:
Respondent company operates a pipeline system which
transports petroleum products from the refineries.
Petitioner Deles was employed by respondent company as
shift supervisor assigned at its joint terminal facility in
Pandacan, Manila, where he was the highest ranking
officer at the terminal during his shift. His primary task was
to oversee the entire pipeline operation in the terminal.
Admittedly, he was a member of the management team.
Deles instructed his chief operator, Yumul to effect a batch
change from the kerosene tank to the aviation fuel tank
when the joint terminal facility turbine meter registers
2,944 barrels of kerosene delivered. Apparently, Yumul
failed to execute correctly petitioner's order. Instead of
effecting the batch change at the prescribed reading of
2,944 barrels, Yumul caused the batch change when the
reading already reached 3,341 barrels.
When informed of the incident, respondent company
required petitioner to explain why he should not be
charged administratively for neglect of duty. Deles was
placed under preventive suspension pending the outcome
of the investigation. Similarly, Yumul and Espejon were
asked to explain for having been remiss in their duties.
Respondent company conducted a joint formal
investigation of the cases. Respondent company found
Deles, Yumul and Espejon guilty as charged. Informed
petitioner that he was found to have violated the section
on Neglect of Duty of respondent company's Code of
Discipline and for this violation he was meted the penalty
of three (3) months suspension. Believing that suspension
for three months was too harsh, petitioner sought
reconsideration of the penalty imposed. Subsequently, he
filed a complaint before the NLRC, questioning the legality
of his suspension.
Respondent company also received reports that petitioner
allowed the entry of two "bar girls" at the terminal at an
unholy hour (4:00 A.M.) on 23 February 1993. Respondent
company required petitioner to explain in writing why he
should not be held liable. Unfortunately, petitioner failed
to submit his written explanation. Respondent company
conducted a formal inquiry and discovered that petitioner
tampered with the automatic shutdown feature of
Gravitometer No. 5 at the terminal on March 19, 1993.
Respondent company again asked petitioner to explain
why he should not be administratively sanctioned.
Petitioner was placed under preventive suspension
effective June 24 1993, pending the outcome of the probe
on the latest charges against him. Meanwhile, on 24 July
1993, petitioner was reinstated in the payroll. After
conducting formal investigation, respondent company
terminated the employment of petitioner.
Having been dismissed, petitioner amended his complaint
by including the charge of illegal dismissal with a claim for
unpaid wages.
Issue: Whether or not Deles whose employment was
terminated due to loss of trust and confidence was illegally
dismissed. NO
Ruling:
Now, it must be emphasized that loss of trust and
confidence constitutes a valid ground for dismissing an
employee. As provided for in the Labor Code: "ART. 282.
Termination by employer. — An employer may terminate
an employment for any of the following causes: . . . (c)
Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized
representative. . ." Of course, it must be stressed also that
loss of confidence as a just cause for termination of
employment is premised on the fact that an employee
concerned holds a position of trust and confidence. This
situation holds where an employee or official of the
company is entrusted with responsibility involving delicate
matters, such as the custody, handling, or care and
protection of the employer’s property. In the case of
company personnel occupying such positions of
responsibility, the Court has repeatedly held that loss of
trust and confidence justifies termination. 15
As regards a managerial employee, moreover, mere
existence of a basis for believing that such employee has
breached the trust of his employer would suffice for his
dismissal. 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. 16
In the case at bar, Petitioner, is tasked to perform key
functions; he is bound by an exacting work ethic. He
should have realized that his position requires the full trust
and confidence of his employer in every exercise of
managerial discretion insofar as the conduct of his
employer’s business is concerned. However, as found a
quo, he committed acts which betrayed the trust and
confidence reposed on him by tampering with very
sensitive equipment at the joint terminal facility. In doing
so, he exposed the terminal complex and the residents in
adjacent communities to the danger of a major disaster
that may be caused by tank explosions and conflagration.
Verily, he committed acts inimical to the interest of his
employer which is mandated by law to observe
extraordinary diligence in its operations to ensure the
safety of the public. Indeed, we are constrained to
conclude that petitioner’s admitted infraction as well his
past violation of safety regulations is more than sufficient
ground for respondent company to terminate the
employment of petitioner.
16. Dela Cruz v. NLRC, 268 SCRA 458
Facts:
Petitioner Gloria de la Cruz was hired by respondent
Company in 1975 as a laboratory aide. Prior to her
dismissal, she was assigned at the Production Department
where she was in charge of printing the product codes,
labels and foils of the company products.
On June 11, 1992, the management called a meeting
where the employees were informed that due to heavy
volume of work, availment of vacation leaves was being
temporarily suspended and sick leaves could be availed of
only if the sickness or injury occurred within company
premises.
Despite the above directive, petitioner went on sick leave
from June 16 to 30, 1992. When petitioner reported for
work on July 1, 1992, the Company's security guard barred
her from entering the premises and handed to her a
memorandum, signed by Antonio Bautista, apprising her of
her temporary lay-off from July 1-15, 1992 allegedly due to
continuous daily brownouts.
On July 16, 1992, petitioner resumed her normal work. As
she was preparing to go home, her immediate supervisor
accosted her why she was keeping her folding umbrella in
a bag marked "Pliva," which was exclusively used in
packaging Pliva products being manufactured by
respondent Company for a foreign client.
Petitioner reasoned out that it was the bag she asked from
a co-employee, Tessa Gajete.
In a Memorandum dated July 17, 1992, the Company's
personnel officer directed petitioner to explain why she
should not be penalized for unauthorized possession of
company property, equipment and supply punishable by
outright dismissal.
Eventually, petitioner was placed under preventive
suspension. When the investigation was completed,
respondent Company terminated the services of
petitioner, for violating the Company Code of Discipline,
specifically the provision on dishonesty.
Issue:
Whether the NLRC committed grave abuse of discretion in
sustaining the validity of the petitioner's temporary lay-off
and eventual dismissal from the service, which necessarily
involves the action of the Labor Arbiter. YES
Ruling:
In termination cases, the burden of proving just and valid
cause for dismissing an employee from his employment
rests upon the employer, and the latter's failure to do so
results in a finding that the dismissal is unjustified. 10 This
rule is designed to give flesh and blood to the guaranty of
security of tenure granted the employees by the
Constitution 11 and the Labor Code. 12
The private respondents could only rely on the perceived
conflicting explanations of the petitioner as to how she
came into possession of the "Pliva" bag. They did not
believe that it was taken from the garbage can and wanted
to impress us that it was taken from the pile of said bags as
testified to by one of its employees. The alleged weakness
of the petitioner's defense cannot operate to relieve nor
discharge the private respondents of their burden in
termination cases. Akin to the prosecution in a criminal
case, the employer's cause stands or falls on the strength
of its evidence, not on the weakness of the
employee's/accused's defense. Here, the private
respondents were unable to convincingly refute the
following observations of the Office of the Solicitor
General in its Manifestation and Motion:
In her explanation, petitioner
maintained that she retrieved the bag
from a garbage can, had been using
the same to contain her umbrella
and/or uniform for at least two (2)
months prior to the incident, and was
never accosted by the company
guards. She additionally claimed that at
the time of the alleged "pre-frisking"
incident, the "Pliva" bag was not in her
person but placed on a table where the
employees deposit their things and
belongings while working. If indeed
petitioner came into possession of the
bag in a fraudulent manner, her
natural action would be to conceal or
hide the bag and not to display it in full
and plain view. Petitioner's conduct
clearly belies any dishonest propensity.
In fact, public respondent NLRC did not
find her guilty of dishonesty, as
concluded by the Labor Arbiter, but
merely of unauthorized possession of
company property (NLRC Decision, p.
7). 13
Their evidence further disclosed that the
petitioner did in fact ask permission from a
Laboratory Aide to get a bag and that the latter
told the petitioner to get a "Mercury" bag;
however, the petitioner picked up a "Pliva"
bag. 14 The "error" in choice can by no means be
deemed dishonesty nor as breach of trust and
confidence. The private respondents failed to
deny the petitioner's claim that she had used it
openly for two months as a container for her
umbrella and uniform.
It is of course settled that an employer may terminate the
services of an employee due to loss of trust and
confidence. However, the loss must be based not on
ordinary breach by the latter of the trust reposed in him by
the former, but, in the language of Article 283[c] of the
Labor Code, on willful breach. A 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.
Elsewise stated, it must rest on substantial grounds and
not on the employer's arbitrariness, whims, caprices or
suspicion; otherwise, the employee would eternally
remain at the mercy of the employer. It should be genuine
and not simulated; nor should it appear as a mere
afterthought to justify earlier action taken in bad faith or a
subterfuge for causes which are improper, illegal or
unjustified. It has never been intended to afford an
occasion for abuse because of its subjective
nature. 15 There must, therefore, be an actual breach of
duty committed by the employee which must be
established by substantial evidence.16
With our finding above that the possession and use of the
"Pliva" bag cannot be considered as an act of dishonesty, it
was then error for the Labor Arbiter to consider it as such
and to make it a basis for loss of trust and confidence.
Besides, it was not shown that the petitioner was
a managerial employee of the private respondents, the
term "trust and confidence" being restricted to said class
of employees. 17
Even the NLRC disagreed with the Labor Arbiter on
"dishonesty." However, the former committed another
serious blunder by holding that the petitioner's taking of
the "Pliva" bag constituted "unauthorized" possession of
company property, which was punishable by dismissal.
Such a conclusion cannot be justified by the facts
established in this case. Even assuming we accept the
NLRC's characterization, the penalty of dismissal from
service which it decreed therefor was unduly harsh and
grossly disproportionate to the perceived cause. All told,
the NLRC then committed grave abuse of discretion.
17.Gonzales v. NLRC, March 26. 2001
discretion in reversing the decision of the Labor Arbiter
and in dismissing the complaint for illegal dismissal.
Under Article 282(c) of the Labor Code, an employer
can terminate the employment of the employee
concerned for “fraud or willful breach by an employee
of the trust reposed in him by his employer or duly
authorized employment, is premised on the fact that the
employee concerned holds a position
of responsibility, trust and confidence.

In the present case, petitioner is not an ordinary rank-

Facts:
and-file employee. He is a Route Manager, a
managerial level position as settled in the case of United
Petitioner Roberto Gonzales was an employee of private
Pepsi–Cola Supervising Union (UPSU) v.
respondent Pepsi Cola Products, Philippines, Inc. (PCPPI)
Laguesma. The test of managerial status has been defined
since July 25, 1989. In 1990 he was promoted to the
as an authority to act in the interest of the employer,
position of Route Manager and tasked with the supervision
which authority is not merely routinary or clerical in nature
and coordination of the activities of salesmen servicing the
but requires independent judgment. As managerial
area under his jurisdiction. His service with the respondent
employee, petitioner is tasked to perform key and
company was abruptly interrupted on October 6, 1993
sensitive functions, and thus he is bound by more
when the private respondent terminated his services after
exacting work ethics.
he was implicated in an irregularity when he instigated the
issuance by his subordinate salesman of an official receipt
Private respondent PCPPI has sufficiently shown that
for his post-dated check whereby he could have evaded
petitioner has become unworthy of the trust and
payment to private respondent of his debt as a concurrent
confidence demanded of his position. Petitioner betrayed
dealer of Pepsi Cola products.
subordinate salesman of an official receipt for his post-
dated check on December 22, 1992 whereby the petitioner
The Labor Arbiter ruled that Gonzales was dismissed
could have evaded payment to private respondent PCPPI
illegally. He found and declared that the petitioner was
of his debt amounting to P116,182,00. These acts
denied due process when no written notice of the charges
committed by petitioner adversely reflected on his
was received by petitioner prior to notice of termination.
integrity. As a Route Manager he disregarded the private
The Labor Arbiter opined that the imputation against
receipt for post-dated check payment unless the same is
the petitioner was committed by the latter not as an
done by the Sales Office Manager.
employee but as a concessionaire, and that PCPPI has
his employer’s trust and confidence when he
suffered no damage as a consequence of the acts of
instigated the issuance by his
petitioner, thus, concluding that there was no justifiable
reason for the termination of the employment of the
The fact the private respondent PCPPI ultimately suffered
petitioner.
no monetary damage as petitioner subsequently settled
his account is of no moment. This was not the reason for
The NLRC reversed the decision of the Labor Arbiter
the termination of his employment in the respondent
finding that the separation or termination from
company but the anomalous scheme he engineered to
employment of the petitioner by the private
cover up his past due account, which
respondent due to loss of trust and confidence is a
constitutes a clear betrayal of trust and confidence.
just and valid cause for dismissal under Article 282(c) of
the Labor Code.
The Court has ruled that the petitioner is indeed unfit to
continue working for private respondent PCPPI, and that
Issue:
public respondent NLRC committed no grave abuse of
discretion in reversing the decision of the Labor
Whether the NLRC erred in reversing the decision of the
Arbiter and in dismissing the complaint for illegal
Labor Arbiter and in dismissing the complaint for illegal
dismissal.
dismissal. NO

18.Sulpicio Lines v. Guide, G.R. No. 149930, February

Ruling: 22, 2002

The dismissal of the petitioner is valid and that public Facts:

respondent NLRC committed no grave abuse of
Petitioner Quinciano Gulde (respondent herein) and one
Martin Manatad were employed as truck driver and truck
helper of private respondent Sulpicio Lines, Inc. (SLI)
(petitioner herein), respectively.
After Gulde and Manapat picked up private respondent
SLI’s cargoes from Nasipit Port delivery to its warehouse in
Butuan City. It appears that two (2) persons by the name
of Doming and Etat boarded their truck while they were in
Nasipit. Manapat knew of the same since he was riding at
the back of the truck.
Manapat said that the 2 persons were able to cart away
four (4) basketballs when they are alighted from the truck
at the time petitioner Gulde stopped. Manapat added that
he did not do anything to stop Domeng and Etat for fear
for his life because they have weapons.
Manapat further stated that petitioner Gulde was not
aware that the two (2) persons boarded their truck.
Petitioner Gulde only knew of the same when Manapat
told him that Domeng and Etat stole four (4) basketballs.
Manapat likewise added that they no longer reported the
incident to SLI because one Boy Oco, who has a cargo in
their truck and was following them, saw the incident that
when Gulde stopped at Calao Street, Oco proceeded to the
SLI’s warehouse and reported the incident to the
warehouseman.
Thereafter, SLI reported the incident to the police and
petitioner Gulde and Manapat were investigated. On
October 1, 1996, they were further investigated by the
SLI’s officers and on October 9, 1996, they were dismissed
for having been found guilty of connivance with the two
pilferers.
Labor Arbiter ruled in favor of petitioner finding that
respondent’s dismissal from employment was valid.
On appeal, the NLRC initially reversed the decision of the
Labor Arbiter.
Issue:
WON they were illegally dismissed? YES
Ruling:
The basic requisite for dismissal on the ground of loss of
trust and confidence is that the employee concerned must
be one holding a position of trust and confidence.
However, loss of confidence must not be indiscriminately
used as a shield by the employer against a claim that the
dismissal of an employee was arbitrary. 6 Loss of confidence
as a just cause for termination of employment is premised
on the fact that the employee concerned holds a position
of responsibility or trust and confidence. He must be
invested with confidence on delicate matters, such as
custody handling or care and protection of the property
and assets of the employer.1âwphi1 And, in order to
constitute a just cause for dismissal, the act complained of
must be work-related and shows that the employee
concerned is unfit to continue to work for the employer. 7
Further, well-settled is the rule that "for loss of trust and
confidence to be a valid ground for dismissal of an
employee, it must be substantial and founded on clearly
established facts sufficient to warrant the employee’s
separation from employment."8
In this case, contrary to the allegations of petitioner,
there is no sufficient evidence to show that respondent
conspired with the thieves in stealing four (4) pieces of
basketball from petitioner’s truck. As found by the CA:
[I]t ca be gleaned that the evidence presented in the case
did not clearly prove that petitioner wilfully breach his
duty. It was not proven the indeed he connived with the
thieves. The same was even commented upon by the NLRC
when it said that the allegations that petitioner
(respondent herein) knew the thieves were not even
found in the police report. (p. 29. Rollo) Additionally, the
reason given by the truck helper as to his inaction in
preventing the thieves from taking the basketballs is not
incredible. His reaction given the situation is not beyond
human reaction to similar circumstances. It is a natural
reaction to think about one’s safety first before the safety
of another’s property.
Likewise, contrary to petitioner’s claim, respondent did not
stop the truck to allow the looters to disembark. Rather,
respondent made a brief stop at the house of a co-
employee in Calao Street near the Agusan Institute of
Technology to deliver his medicines.9 In fact, as testified by
Manapat, respondent’s companion, respondent was not
aware that the two pilferers boarded the truck and he
learned about the theft only when Manapat told him
about it.10
In fine, petitioner failed to present sufficient evidence to
show that respondent committed acts that would
warrant his dismissal for loss of trust and confidence. It is
significant to note that respondent had been in
petitioner’s employ for thirteen (13) years and it has not
been shown that during this period he had been guilty of
any infraction against petitioner. It is difficult to believe
that he would deliberately jeopardize his job for
something as worthless as basketballs.
19.National Bookstore v. CA, G.R. No. 146741, February
27, 2002
Facts: Petitioner National Bookstore, Inc., employed
private respondent Marietta M. Ymasa on 14 February
1980 and private respondent Edna L. Gabriel on 2
September 1979. On 28 August 1992 when both claimed
to have been illegally dismissed from employment,
private respondents Ymasa and Gabriel were Cash
Custodian and Head Cashier of petitioner National
Bookstore, respectively.
On 28 June 1992, a Sunday, private respondents
reported for work at their place of assignment, i.e., the
SM North Edsa Branch of petitioner National Bookstore
to count the previous days sales proceeds as a matter of
routine. Private respondent Ymasa counted the money
intended to be deposited with INTERBANK while private
respondent Gabriel attended to the money for deposit
with PCIB. The counting was done in the presence of a
watcher, one Maricen Cupcupin. After preparing the
corresponding deposit slips which Cupcupin accordingly
signed, the counted money was placed inside two (2)
separate plastic bags which were sealed with scotch
tapes. The plastic bags were then tied together with
rubber band, with the bag containing the money
intended for deposit with INTERBANK placed on top.
Thereafter, private respondent Ymasa put the plastic
bags inside her cabinet which she accordingly locked.
Since both Branch Manager Charito M. Gonzales and
Assistant Branch Manager Roberto Tagalog were not in
their offices, it was only at around closing time at 8:30 in
the evening of 28 June 1992 that the two (2) plastic bags
earlier stored in private respondent Ymasas cabinet
were taken out . These plastic bags and the days sales
placed in another bag euphemistically called sandwich
were handed over to the Assistant Manager for
safekeeping in the Branch vault.
On 29 June 1992, Monday, private respondents
retrieved from the Assistant Manager the money already
counted and placed inside the sealed plastic bags to be
picked up by the roving tellers of INTERBANK and PCIB.
But before being deposited, the money was again
counted. The amount for deposit to PCIB was found
short of P42,758.70. All efforts made to locate the
missing amount failed. Thus, on 30 July 1992 the
Management-through Personnel Manager Atty. Cornelio
A. Padilla, Jr. asked private respondents to explain in
writing not later than end of store hours on August 1,
1992, why [they] should not be dismissed for the loss of
company funds. The Management also placed private
respondents under preventive suspension effective
immediately.
On 31 July 1992 private respondents explained in writing
what transpired on 28 and 29 June 1992, basically
denying responsibility over the lost company funds.
They emphasized that they had no access to petitioner
National Bookstores vault and that before leaving the
office on both occasions and after doing their tasks,
petitioner National Bookstores lady guard, Ms. Roda
Sungkip, subjected them to a thorough body search.
They asserted that [they] have been in the service of the
company for the past 13 years and it has been [their]
practice to turn over [their] collection to [their]
supervisor without any proof of receipt every end of the
business day. Moreover, they appealed that they have
been honest and sincere to [their] work and religiously
rendered [their] services to the company to the best of
[their] ability.
Petitioner National Bookstore, after finding the
explanations of private respondents unsatisfactory,
notified them on 29 August 1992 of the termination of
their services for gross neglect of duty and loss of
confidence to take effect immediately and without
prejudice to appropriate legal action that the
Management may take for the restitution of the missing
Company funds.
Issue: Whether or not the respondent validly dismissed.
NO
Ruling:
We find for private respondents. The petition is without
merit. The onus of proving that the dismissal of the
employee was for a valid and authorized cause rests on
the employer[10] and failure to discharge the same
would mean that the dismissal was not justified and
therefore illegal.[11]
The requisites for a valid dismissal are: (a) the employee
must be afforded due process, i.e., he must be given an
opportunity to be heard and to defend himself; and, (b)
the dismissal must be for a valid cause as provided in
Art. 282[12] of the Labor Code[13] or for any of the
authorized causes under Arts. 283[14] and 284[15] of
the same Code.
Significantly, in order to constitute a just cause for the
employees dismissal, the neglect of duties must not only
be gross but also habitual. Thus, the single or isolated
act of negligence does not constitute a just cause for the
dismissal of the employee.[20] Verily, assuming
arguendo that private respondents were negligent,
although we find otherwise, it could only be a single or
an isolated act that cannot be categorized as habitual,
hence, not a just cause for their dismissal.
On the other hand, loss of trust and confidence to be a
valid ground for dismissal must be based on a willful
breach of trust and founded on clearly established facts.
[21] A 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.[22] The Labor Arbiter, the
NLRC and the Court of Appeals were unanimous in
declaring that there was no willful breach of confidence
in the instant case as petitioners failed to establish with
certainty the facts upon which it could be based. Indeed,
petitioner National Bookstore lost some funds but that
private respondents were responsible therefor was not
supported by any substantial evidence.
Private respondents have been illegally dismissed.
Consequently, they are entitled to reinstatement to
their former positions without loss of seniority rights
and payment of back wages.[23] However, if such
reinstatement would prove impracticable and hardly in
the best interest of the parties, perhaps due to the lapse
of time since their dismissal, private respondents should
be awarded separation pay in lieu of reinstatement[24]
computed at one (1) month salary for every year of
service with a fraction of six (6) months equivalent to
one (1) whole year.
Consequently private respondents, for having been
illegally dismissed after 21 March 1989, conformably
with established jurisprudence,[26] are granted full back
wages inclusive of allowances and other benefits or their
monetary equivalent from the time their actual
compensation was withheld from them up to the time of
their actual reinstatement.
20. Santos v. NLRC, 287 SCRA 117
Facts:
Petitioner is a married man and is employed as a teacher
by private respondent Hagonoy Institute Inc. from June
1980 until his dismissal on June 1, 1991. Petitioner and
Mrs. Arlene T. Martin, also a teacher employed at
Hagonoy Institute, fell in love and had an affair. Private
respondent, upon hearing of circulating rumors among
faculty and school officials, of the illicit relationship of
petitioner and Mrs. Martin, advised the latter to take a
leave of absence, Mrs. Martin ignored such notice and
was henceforth prevented from entering the campus of
private respondent, effectively dismissing her from
work. Private respondent set-up a committee to
investigate the veracity of the rumors, after two weeks
of investigation, the illicit relationship of petitioner and
Mrs. Martin was confirmed. Petitioner was charged
administratively for immorality and asked to present his
side, on May 1991, petitioner was dismissed effective
June 1, 1991. Petitioner filed a complaint for illegal
dismissal with the NLRC Regional Arbitration Branch No.
III, San Fernando, Pampanga and petitioner’s complaint
was dismissed but awarded financial assistance of PHP
13,750. On appeal, the NLRC affirmed the decision of the
labor arbiter.
Issue: Can the illicit relationship between the petitioner
and Mrs. Martin be considered immoral as to constitute
a cause for termination under Art. 282 of the Labor
Code?
Ruling:
We have consistently held that in order to constitute a
valid dismissal, two requisites must concur: (a) the
dismissal must be for any of the causes expressed in Art.
282 of the Labor Code, and (b) the employee must be
accorded due process, basic of which are the opportunity
to be heard and defend himself. 9
Under Article 282 of the Labor Code, as amended, the
following are deemed just causes to terminate an
employee:
(a) Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work;
(b) Gross and habitual neglect by the employee of his
duties:
(c) Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee
against the person of his employer or any immediate
member of his family or his duly authorize representative;
and
(e) Other causes analogous to the foregoing.
Moreover, it is provided inter alia under Section 94 10 of
the Manual of Regulations for Private Schools:
Sec. 94. Causes of Terminating Employment. In addition to
the just cases enumerated in the Labor Code, the
employment of school personnels, including faculty, may
be terminated for any of the following causes:
xxx xxx xxx
E. Disgraceful or immoral conduct.
Private respondent, in justifying the termination of the
petitioner, contends that being a teacher, he "must live up
to the high moral standards required of his position." In
other words, it asserts that its purpose in dismissing the
petitioner was to preserve the respect of the community
towards the teachers and to strengthen the educational
system. 11
On the other hand, petitioner merely argues that the
alleged illicit relationship was not substantially proven by
convincing evidence by the private respondent as to justify
his dismissal.
On the outset, it must be stressed that to constitute
immorality, the circumstances of each particular case must
be holistically considered and evaluated in light of the
prevailing norms of conduct and applicable
laws. 12 America jurisprudence has defined immorality as a
course of conduct which offends the morals of the
community and is a bad example to the youth whose
ideals a teacher is supposed to foster and to elevate,  13 the
same including sexual misconduct.  14 Thus, in petitioner's
case, the gravity and seriousness of the charges against
him stem from his being a married man and at the same
time a teacher.
We cannot overemphasize that having an extra-marital
affair is an affront to the sanctity of marriage, which is a
basic institution of society. Even our Family Code provides
that husband and wife must live together, observe mutual
love, respect and fidelity. 15 This is rooted in the fact that
both our Constitution and our laws cherish the validity of
marriage and unity of the family.  16 Our laws, in
implementing this constitutional edict on marriage and the
family underscore their permanence, inviolability and
solidarity. 17
21. Libres v NLRC G.R. No. 123737. May 28, 1999
Facts: Petitioner Carlos G. Libres, an electrical engineer,
was holding a managerial position with National Steel
Corporation (NSC) as Assistant Manager. He was then
asked to comment regarding the charge of sexual
harrassment filed against him by the VP's secretary
Capiral. This was included with a waiver of his right tobe
heard once he didn't comment.
On 14 August 1993 petitioner submitted his written
explanation denying the accusation against him and
offering to submit himself for clarificatory interrogation.
The Management Evaluation Committee said that
"touching a female subordinate's hand and shoulder,
caressing her nape and telling other people that Capiral
was the one who hugged and kissed or that she responded
to the sexual advances are unauthorized acts that
damaged her honor." They suspended Libres for 30 days
without pay.
As a teacher, petitioner serves as an example to his pupils,
especially during their formative years  18 and stands in loco
parentis to them. 19 To stress their importance in our
society, teachers are given substitute and special parental
authority under our laws. 20
Consequently, it is but stating the obvious to assert that
teachers must adhere to the exacting standards of
morality and decency. There is no dichotomy of morality. A
teacher, both in his official and personal conduct, must
display exemplary behavior. He must freely and willingly
accept restrictions on his conduct that might be viewed
irksome by ordinary citizens. In other words, the personal
behavior of teachers, in and outside the classroom, must
be beyond reproach.
Accordingly, teachers must abide by a standard of personal
conduct which not only proscribes the commission of
immoral acts, but also prohibits behavior creating a
suspicion of immorality because of the harmful impression
it might have on the students.  21 Likewise, they must
observe a high standard of integrity and honesty.  22
From the foregoing, it seems obvious that when a teacher
engages in extra-marital relationship, especially when the
parties are both married, such behavior amounts to
immorality, justifying his termination from employment.  
He filed charges against the corporation in the Labor
Arbiter, but the latter held that the company acted with
due process and that his punishment was only mild.
Moreover, he assailed the NLRC decision as without basis
due to the massaging of her shoulders never
“discriminated against her continued employment,”
“impaired her rights and privileges under the Labor Code,”
or “created a hostile, intimidating or offensive
environment.”
He claimed that he wasn't guaranteed due process
because he wasn't given the right be heard. This was due
to his demand for personal confrontation not being
recognized by the MEC.
In the Supreme Court, petitioner assailed the failure of the
NLRC to strictly apply RA No. 7877 or the law against
sexual harassment to the instant case. Moreover,
petitioner also contends that public respondent’s reliance
on Villarama v. NLRC and Golden Donuts was misplaced.
He draws attention to victim Divina Gonzaga’s immediate
filing of her letter of resignation in the Villarama case as
opposed to the one year delay of Capiral in filing her
complaint against him. He now surmises that the filing of
the case against him was merely an afterthought and not
borne out of a valid complaint, hence, the Villarama case
should have no bearing on the instant case.
Issue: Was Libres accorded due process when the MEC
denied his request for personal confrontatiom?
Held: Yes Petition denied.
On not strictly applying RA 7877- Republic Act No. 7877
was not yet in effect at the time of the occurrence of the
act complained of. It was still being deliberated upon in
Congress when petitioner’s case was decided by the Labor
Arbiter. As a rule, laws shall have no retroactive effect
unless otherwise provided, or except in a criminal case
when their application will favor the accused. Hence, the
Labor Arbiter have to rely on the MEC report and the
common connotation of sexual harassment as it is
generally understood by the public. Faced with the same
predicament, the NLRC had to agree with the Labor
Arbiter. In so doing, the NLRC did not commit any abuse
of discretion in affirming the decision of the Labor Arbiter.
On the Villarama afterthought-it was both fitting and
appropriate since it singularly addressed the issue of a
managerial employee committing sexual harassment on a
subordinate. The disparity in the periods of filing the
complaints in the two (2) cases did not in any way reduce
this case into insignificance. On the contrary, it even
invited the attention of the Court to focus on sexual
harassment as a just and valid cause for termination.
Whereas petitioner Libres was only meted a 30-day
suspension by the NLRC, Villarama, in the other case was
penalized with termination. As a managerial employee,
petitioner is bound by more exacting work ethics. He
failed to live up to his higher standard of responsibility
when he succumbed to his moral perversity. And when
such moral perversity is perpetrated against his
subordinate, he provides a justifiable ground for his
dismissal for lack of trust and confidence.
“It is the duty of every employer to protect his employees
from oversexed superiors.” Public respondent therefore is
correct in its observation that the Labor Arbiter was in fact
lenient in his application of the law and jurisprudence for
which petitioner must be grateful for.
As pointed out by the Solicitor General, it could be
expected since Libres was Capiral’s immediate superior.
Fear of retaliation and backlash, not to forget the social
humiliation and embarrassment that victims of this human
frailty usually suffer, are all realities that Capiral had to
contend with. Moreover, the delay did not detract from
the truth derived from the facts. Petitioner Libres never
questioned the veracity of Capiral’s allegations. In fact his
narration even corroborated the latter’s assertion in
several material points. He only raised issue on the
complaint’s protracted filing.
On the question of due process- Requirements were
sufficiently complied with. Due process as a constitutional
precept does not always and in all situations require a trial
type proceeding. Due process is satisfied when a person is
notified of the charge against him and given an
opportunity to explain or defend himself. The essence of
due process is simply to be heard, or as applied to
administrative proceedings, an opportunity to explain
one’s side, or an opportunity to seek a reconsideration of
the action or ruling complained of.
It is undeniable that petitioner was given a Notice of
Investigation informing him of the charge of sexual
harassment as well as advising him to submit a written
explanation regarding the matter; that he submitted his
written explanation to his superior. The VP further allowed
him to air his grievance in a private session He was given
more than adequate opportunity to explain his side and air
his grievances.
Personal confrontation was not necessary. Homeowners v
NLRC- litigants may be heard through pleadings, written
explanations, position papers, memoranda or oral
arguments.
22. Starlite Plastic industrial Corp. v. NLRC, 171 SCRA 315
Facts: Private respondent GOMEZ was employed as a
factory worker by STARLITE sometime in March 1981. On
22 June 1984, STARLITE dismissed him on the ground that
he was caught attempting to steal one ballast costing
P80.00. STARLITE reported the matter to the police on 19
July 1984, after grievance meetings failed to resolve the
controversy. A criminal complaint was filed against
GOMEZ, but the investigating fiscal dismissed the same
saying that STARLITE failed to establish a prima facie case
against GOMEZ. On 13 August 1983, private respondent
GOMEZ filed a complaint for illegal dismissal against
STARLITE. After the parties submitted their respective
position papers, the Labor Arbiter rendered his decision on
15 January 1985 dismissing the complaint for lack of merit.
GOMEZ appealed the decision to the public respondent
NLRC which in a decision dated 18 February 1987 reversed
the ruling of the Labor Arbiter.
Issue: WON the dismissal is valid
Held: At the outset, the Court finds it necessary to
emphasize that contrary to the tenor of the Labor Arbiter's
decision, a dismissed employee is not required to prove his
innocence of the charges levelled against him by his
employer. The Court has laid down the rule that in
termination cases, the burden of proving the just cause of
dismissing an employee rests on the employer and his
failure to do so would result in a finding that the dismissal
is unjustified.
23. MSMG-UWP v. Ramos, G.R. No. 113907, February 28.
2000
Facts: The petitioners were terminated by the company
but the NLRC upheld the dismissal. Later on, the SC
reversed the decision and ordered all of them reinstated
and paid full backwages but it also held that the officers of
the company shouldn’t be held liable. This is the subject of
this motion for partial record as the union argues that it
was the officers who made the decision to terminate the
employees. Petitioners further contend that while the case
was pending, the company began removing its
machineries and equipment from its plant and began
diverting jobs intended for the regular employees to its
sub-contractor/satellite branches.
ISSUE: W/N the officers should be held liable for the illegal
dismissed.
HELD: The SC ruled that the officers cannot be held liable
because a crop has a personality separate and distinct
from those acting in its behalf. The rule is that obligations
incurred by the corp, through its directors, officers and
employees are its sole liabilities. In labor cases, corporate
directors and officers are solidarily liable with the
corporation for the termination of employment or
corporate employees done with malice or in bad faith.
Bad faith does not connote bad judgment or negligence; it
imports a dishonest purpose of some moral obliquity and
conscious doing of wrong; it means breach of a known
duty thru some motive or interest or will; it part wages of
the nature of fraud.
In this case, there is nothing on record to show that the
officers acted in patent bad faith or were guilty of gross
negligence in terminating the services of petitioners so as
to warrant personal liability.
24. Salaw v. NLRC, 202 SCRA 7
Facts: Espero Santos Salaw, was employed by the private
respondents in September 1967 as a credit investigator-
appraiser. His duties included inspecting, investigating,
appraising, and identifying the company's foreclosed
assets; giving valuation to its real properties, and verifying
the genuineness and encumbrances of the titles of
properties mortgaged to the respondents.
On November 27, 1984, the Criminal Investigation Service
(CIS) of the Philippine Constabulary, National Capital
Region, extracted from the petitioner — without the
assistance of counsel — a Sworn Statement which made it
appear that the petitioner, in cahoots with a co-employee,
Reynaldo Madrigal, a supervisor in charge of the acquired
assets of respondent Associated Bank, sold twenty sewing
machines and electric generators which had been
foreclosed by the respondent bank from Worldwide
Garment and L.P. Money Garment, for P60,000.00, and
divided the proceeds thereof in equal shares of P30,000.00
between the two of them.
On December 5, 1984, the petitioner was requested by
private respondent Rollie Tuazon, the bank manager, to
appear before the bank's Personnel Discipline and
Investigation Committee (PDIC) which would be meeting
the following day, December 6, 1984, at 9:00 a.m., in
connection with the Worldwide case.
On April 1, 1985, the petitioner was terminated from his
employment effective March 27, 1985, for alleged serious
misconduct or willful disobedience and fraud or willful
breach of the trust reposed on him by the private
respondents.
Subsequently, the petitioner filed with the NLRC on April
17, 1985, a complaint for illegal dismissal against
respondent Bank, Jose R. Tengco, and Rollie Tuazon.
LA favored Salaw. NLRC reversed.
Issue: WON the dismissal is valid
Held: No
Under the Labor Code, as amended, the requirements for
the lawful dismissal of an employee by his employer are
two-fold: the substantive and the procedural. Not only
must the dismissal be for a valid or authorized cause as
provided by law (Articles 279, 281, 282-284, New Labor
Code), but the rudimentary requirements of due process
— notice and hearing — must also be observed before an
employee may be dismissed. One does not suffice; without
their concurrence, the terminate would, in the eyes of the
law, be illegal.
The inviolability of notice and hearing for a valid dismissal
an employee can not be over-emphasized. Those twin
requirements constitute essential elements of due process
in cases employee dismissal.
Considering further that the admission by the petitioner
which was extracted from him by the Criminal Investigate
Service of the Philippine Constabulary (National Capital
Region) without the assistance of counsel and which was
made the sole basis for his dismissal, can not be admitted
in evidence against him, then, the finding of guilt of the
PDIC, which was affirmed by the public respondent NLRC;
has no more leg stand on.
Significantly, the dismissal of the petitioner from his
employment was characterized by undue haste. The law is
clear that even in the disposition of labor cases, due
process must not be subordinated to expediency or
dispatch. Otherwise, the dismissal of the employee will be
tainted with illegality. On this point, we have ruled
consistently.
25. Wenphil Corp. v. NLRC, 170 SCRA 69
Facts: Private respondent Mallare had an altercation with
a co-employee. The following day, the Operations
Manager served them memorandum of suspension and in
the afternoon of that same day, Mallare was dismissed
from work. Labor Arbiter dismissed Mallare’s petition for
unfair labor practice for lack of merit. NLRC reversed the
decision and ordered the reinstatement of Mallare with
full backwages of one year without qualification and
deduction.
Issue: Whether or not an employee dismissed for just
cause but without due process be reinstated to work.
Held: The basic requirement of due proves is that which
hears before it condemns, proceeds upon inquiry and
renders judgment only after trial. The dismissal of an
employee must be for a just cause and after due process.
Petitioner committed an infraction of the second
requirement thus it must be imposed a sanction for its
failure to give a formal notice and conduct an investigation
as required by law before dismissing Mallare from
employment. Petitioner must indemnify the dismissed
employee which depends on the facts of each case and the
gravity of the omission committed by the employer.
Where the private respondent appears to be of violent
temper, caused trouble during office hours and even
defied his supervisors as they tried to pacify him, he
should not be rewarded with re-employment and
backwages. The dismissal of the respondent should be
maintained.
26. China City Restaurant Corp. v. NLRC, 217 SCRA 443
Facts: Petitioner China City Restaurant (petitioner, for
brevity) employed private respondents Monico Dieto and
Julinito Cablay (private respondents, for brevity) as chief
steamer and roasting helper, respectively.
On October 17, 1988, Abe Fuentes, a steamer helper at
petitioner's restaurant, was detained at the Makati
Municipal Jail for allegedly stealing dried scallops worth
two thousand pesos (P2,000.00) belonging to the
petitioner. On January 20, 1989, after posting bail paid by
the petitioner, Abe Fuentes gave a statement at the
Intelligence and Special Operations Group, SPD,
implicating the private respondents.
Abe Fuentes alleged that as early as April 1988, he, in
conspiracy with private respondents, had been bringing
out from the restaurant dried scallops wrapped in plastic,
by mixing them with leftovers thrown into the thrash can.
They were sold at Ongpin, Binondo, Manila. They would
then divide the proceeds among themselves, with the
private respondents getting the lion's share. A criminal
charge for qualified theft was thereafter filed against the
private respondents.
On March 27, 1989, an amended information was filed to
include private respondents as co-accused in the qualified
theft case filed against Abe Fuentes. Later, Abe Fuentes
turned state witness.
LA and NLRC ruled in favor of the respondents.
Issue: WON the dismissal is valid
Held: No. There is no evidence on record to support or
show any connection of the private respondents to the
charge of qualified theft. As found by the trial court, Abe
Fuentes implicated the private respondents only after a
series of conferences with petitioner's representatives,
and after petitioner facilitated his release from jail through
the former's answering for his bail bond.
For loss of trust and confidence to be a valid ground for
the dismissal of employees, it must be substantial and not
arbitrary, whimsical, capricious or concocted.
Irregularities or malpractice should not be allowed to
escape the scrunity of this Court. Solicitude for the
protection of the rights of the working class are of prime
importance. Although this is not license to disregard the
rights of management, still the Court must be wary of the
ploys of management to get rid of employees it considers
as undesirable.
27. Farrol v. CA. G.R. No. 133259, February 10, 2000
Facts: Petitioner Wenifredo Farrol was employed as station
cashier at respondent RCPI's Cotabato City station. On
June 18, 1993, respondent RCPI's district manager in
Cotabato City informed their main office that "Peragram
funds" from said branch were used for the payment of
retirement benefits of five employees. On October 1, 1993,
petitioner verified as correct RCPI's Field Auditor's report
that there was a shortage of P50,985.37 in their branch's
Peragram, Petty and General Cash Funds. The next day,
petitioner paid to RCPI P25,000.00 of the cash shortage.
On October 10, 1993, RCPI required petitioner to explain
why he should not be dismissed from employment. Two
days thereafter, petitioner wrote a letter to the Field
Auditor stating that the missing funds were used for the
payment of the retirement benefits earlier referred to by
the branch manager and that he had already paid
P25,000.00 to RCPI. After making two more payments of
the cash shortage to RCPI, petitioner was informed by the
district manager that he is being placed under preventive
suspension. Thereafter, he again paid two more sum's on
different dates to RCPI leaving a balance of P6,995.37 of
the shortage.
Respondent RCPI claims that it sent a letter to petitioner
on November 22, 1993 informing him of the termination of
his services as of November 20, 1993. Unaware of the
termination letter, petitioner requested that he be
reinstated considering that the period of his preventive
suspension had expired.
Sometime in September 1995, petitioner manifested to
RCPI his willingness to settle his case provided he is given
his retirement benefits. However, RCPI informed petitioner
that his employment had already been terminated earlier
as contained in the letter dated November 22, 1993. The
conflict was submitted to the grievance committee.
Despite the lapse of more than two years, the case
remained unresolved before the grievance committee,
hence, it was submitted for voluntary arbitration.
After hearing, the Voluntary Arbitrator ruled that
petitioner was illegally dismissed from employment and
ordered RCPI to pay him backwages, separation pay, 13th
month pay and sick leave benefits.6 Aggrieved, RCPI filed a
petition for certiorari before the Court of Appeals (CA),
which reversed the ruling of the arbitrator and dismissed
the complaint for illegal dismissal. Upon denial of
petitioner's motion for reconsideration by the CA, he filed
the instant petition for review on certiorari on the grounds
that his dismissal was illegal because he was not afforded
due process and that he "cannot be held liable for the loss
of trust and confidence reposed in him" by RCPI.
Issue: WON there is illegal dismissal
Held: Yes. In cases involving the illegal termination of
employment, it is fundamental that the employer must
observe the mandate of the Labor Code, i.e., the employer
has the burden of proving that the dismissal is for a cause
provided by the law10 and that it afforded the employee
an opportunity to be heard and to defend himself.
The employer must comply with the twin requirements of
two notices and hearing. The first notice is that which
apprises the employee of the particular acts or omissions
for which his dismissal is sought, and after affording the
employee an opportunity to be heard, a subsequent notice
informing the latter of the employer's decision to dismiss
him from work.
As regards the first notice, RCPI simply required petitioner
to "explain in writing why he failed to account" for the
shortage and demanded that he restitute the same. On the
assumption that the foregoing statement satisfies the first
notice, the second notice not "clearly" cite the reasons for
the dismissal, contrary to the requirements set by the
above-quoted Section 6 of Book V, Rule XIV of the
Omnibus Rules.
A perusal of RCPI's dismissal notice reveals that it merely
stated a conclusion to the effect that the withholding was
deliberately done to hide alleged malversation or
misappropriation without, however, stating the
circumstances in support thereof. It further mentioned
that the position of cashier requires utmost trust and
confidence but failed to allege the breach of trust on the
part of petitioner and how the alleged breach was
committed. On the assumption that there was indeed a
breach, there is no evidence that petitioner was a
managerial employee of respondent RCPI. It should be
facts noted that the term 'trust and managerial
employees.15 It may not even be presumed that when
there is a shortage, there is also a corresponding breach of
trust. Cash shortages in a cashier's work may happen, and
when there is no proof that the same was deliberately
done for a fraudulent or wrongful purpose, it cannot
constitute breach of trust so as to render the dismissal
from work invalid.
28. PAL v. PALEA, 57 SCRA 489, June 28, 1974
Facts: Fidel Gotangco, an employee of Philippine Airlines
was dismissed by his employer on the ground of betrayal
of trust. A piece of lead material was confiscated from
Gotangco, which he did not deny. Such admission became
the basis of his guilt, hence the dismissal. A complaint was
filed by Gotangco to the Court of Industrial Relations,
which later ruled to reinstate the former with backwages.
A penalty was imposed but one proportionate to the
gravity of the misdeed. Petitioner appears to be
unsatisfied and insists on the dismissal. Hence, this appeal.
Issue: Whether or not the dismissed employee guilty of
theft should be reinstated?
Ruling: There is no dispute as to the facts. The order now
sought to be reviewed started with the nature of the case
as one seeking authority for the dismissal of Fidel
Gotangco, with the employer, petitioner Philippine Air
Lines, presenting in evidence an exhibit referring to the
confiscation of a piece of lead material from his person at
one of the gates of the PAL Airfield compound and a
signed statement by him, taken at an investigation,
wherein he admitted his apprehension by a company
security guard with a lead material he intended to take
home for his personal use. Then the order continues: "On
the whole, the evidence of respondent is uncontroverted.
And no question, Fidel Gotango is guilty of breach of trust
and violation of the rules and regulations of his employer.
But respondent seeks authority to dismiss him on the basis
of such guilt. It is believed, however, that in this particular
case dismissal is too severe a penalty to impose on Fidel
Gotangco for trying to slip out a lead material belonging to
respondent. Because (1) it is his first time to commit the
charge in question for the duration of his 17 years of
service with respondent; (2) the cost of said material,
considering its size, is negligible (8" x 10" x 1/2"); (3)
respondent did not lose anything after all as the lead
material was retrieved in time; (4) the ignominy and
mental torture undergone by Gotangco is practically
punishment in itself; and (5) he has been under preventive
suspension to date. For which reason, it would seem more
equitable to retain than dismiss him."
The whole controversy is centered around the right of the
Court of Industrial Relations to order the readmission of a
laborer who, it is admitted, had been found derelict in' the
performance of his duties towards his employer. We
concede that the right of an employer to freely select or
discharge his employees, is subject to regulation by the
State basically in the exercise of its paramount police
power (Com. Act Nos. 103 and 213). But much as we
should expand beyond economic orthodoxy, we hold that
an employer cannot legally be compelled to continue with
the employment of a person who admittedly was guilty of
misfeasance or malfeasance towards his employer, and
whose continuance in the service of the latter is patently
inimical to his interests.
29. ALU-TUCP V. NLRC, 302 SCRA 708
Facts: Petitioners, as employees of private respondent
National Steel Corporation (NSC), filed separate complaints
for unfair labor practice, regularization and monetary
benefits with the NLRC, Sub-Regional Arbitration Branch
XII, Iligan City. The complaints were consolidated and after
hearing, the Labor Arbiter declared petitioners “regular
project employees who shall continue their employment
as such for as long as such [project] activity exists,” but
entitled to the salary of a regular employee pursuant to
the provisions in the collective bargaining agreement. It
also ordered payment of salary differentials.
The NLRC in its questioned resolutions modified the Labor
Arbiter’s decision. It affirmed the Labor Arbiter’s holding
that petitioners were project employees since they were
hired to perform work in a specific undertaking — the Five
Years Expansion Program, the completion of which had
been determined at the time of their engagement and
which operation was not directly related to the business of
steel manufacturing. The NLRC, however, set aside the
award to petitioners of the same benefits enjoyed by
regular employees for lack of legal and factual basis.
The law on the matter is Article 280 of the Labor Code,
where the petitioners argue that they are “regular”
employees of NSC because: (i) their jobs are “necessary,
desirable and work-related to private respondent’s main
business, steel-making”; and (ii) they have rendered
service for six (6) or more years to private respondent NSC.
Issue: Whether or not petitioners are considered
“permanent employees” as opposed to being only “project
empoyees” of NSC.
Held: NO. Petition for Certiorari dismissed for lack of merit.
NLRC Resolutions affirmed. Function of the proviso.
Petitioners are not considered “permanent employees”.
However, contrary to petitioners’ apprehensions, the
designation of named employees as “project employees”
and their assignment to a specific project are effected and
implemented in good faith, and not merely as a means of
evading otherwise applicable requirements of labor laws.
On the claim that petitioners’ service to NSC of more than
six (6) years should qualify them as “regular employees”,
the Supreme Court believed this claim is without legal
basis. The simple fact that the employment of petitioners
as project employees had gone beyond one (1) year, does
not detract from, or legally dissolve, their status as
“project employees”. The second paragraph of Article 280
of the Labor Code, quoted above, providing that an
employee who has served for at least one (1) year, shall be
considered a regular employee, relates to casual
employees, not to project employees.
19.JAM Transport v. Flores, 220 SCRA 114
20.Philippine Japan Active Carbon Corporation v. NLRC,
171 SCRA164
Facts: The private respondent, who had been employed in
petitioner corporation since January 19, 1982, as Assistant
Secretary/Export Coordinator, was promoted on May 20,
1983 to the position of Executive Secretary to the
Executive Vice President and General Manager. On May
31, 1986, for no apparent reason at all and without prior
notice to her, she was transferred to the Production
Department as Production Secretary, swapping positions
with Ester Tamayo. Although the transfer did not amount
to a demotion because her salary and workload remained
the same, she believed otherwise so she rejected the
assignment and filed a complaint for illegal dismissal. The
Labor Arbiter found, on the basis of the evidence of both
parties, that the transfer would amount to constructive
dismissal, hence, her refusal to obey the transfer order
was justified.
Issue: WON there is illegal dismissal
Held: No. A constructive discharge is defined as: "A
quitting because continued employment is rendered
impossible, unreasonable or unlikely; as, an offer involving
a demotion in rank and a diminution in pay."
In this case, the private respondent's assignment as
Production Secretary of the Production Department was
not unreasonable as it did not involve a demotion in rank
(her rank was still that of a department secretary) nor a
change in her place of work (the office is in the same
building), nor a diminution in pay, benefits, and privileges.
It did not constitute a constructive dismissal.
It is the employer's prerogative, based on its assessment
and perception of its employees' qualifications, aptitudes,
and competence, to move them around in the various
areas of its business operations in order to ascertain where
they will function with maximum benefit to the company.
An employee's right to security of tenure does not give
him such a vested right in his position as would deprive the
company of its prerogative to change his assignment or
transfer him where he will be most useful. When his
transfer is not unreasonable, nor inconvenient, nor
prejudicial to him, and it does not involve a demotion in
rank or a diminution of his salaries, benefits, and other
privileges, the employee may not complain that it amounts
to a constructive dismissal.
30. JAM Transport v. Flores, 220 SCRA 114
Facts: Luis Hermosa Flores avers that he was employed by
the respondent company as a conductor since 1967. He
was paid on percentage basis and received a commission
of about P40.00 to P50.00 a day. Sometime in 1985,
complainant further alleges that he had an accident, which
burned his body partially necessitating his hospitalization
for several days. After hospitalization, complainant
reported to respondent Josefina Alon-Alon Mercado, in
compliance with the letter dated May 20, 1986 of the
respondent ordering him to immediately report for work,
but was told to wait. For several days he kept on reporting
but the Operations Manager just kept promising to give
him a route assignment which did not materialize. Finally,
complainant was able to talk to respondent Joselito
Medrano who told him that he will be accepted back to
work as a new employee. Complainant rejected the offer
since it would mean losing his eighteen (18) years of
service with the respondents. Because of his refusal, he
was allegedly told in the presence of some other
employees: "Balik ka pa ng balik. Ang kapal naman ng
mukha mo." Feeling aggrieved, complainant instituted the
present complaint charging the respondents with illegal
dismissal, unfair labor practice, non-payment of overtime
pay, legal holiday pay and violations of Presidential
Decrees No. 525 and 851.
JAM Transport Inc, in its position paper contend that in
1986, complainant, for unknown reasons, failed to report
for work for about a month. No notice was given to the
company for such continued absence. On May 20, 1986,
respondent company, thru its Personnel Manager, Joselito
Medrano sent a letter to the complainant advising him to
immediately report for work, otherwise, his continued
absence will be construed as a ground for his dismissal and
separation from the service. Respondents further alleged
that complainant failed to respond to its demand that he
immediately report for work, hence, they filed a
termination report with the Ministry of Labor on June 4,
1986, terminating the services of the complainant for
"AWOL" (Absent Without Official Leave).

Issue: Whether or not Flores is fit to return to work
Ruling: No.
We have perused the record and we found no medical
certificate attesting to his fitness to return to his work as
indicated in his position paper. Complainant's termination,
therefore, would be justified under Article 285 of the
Labor Code as amended, which provides:
An employer may terminate the services of an employee
who has been found to be suffering from any disease and
whose continued employment is prohibited by law or is
31.Philippine Japan Active Carbon Corporation v. NLRC,
171 SCRA164
PHILIPPINE JAPAN ACTIVE CARBON CORPORATION and
TOKUICHI SATOFUKA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and OLGA S.
QUIÑANOLA respondents.
FACTS:
The private respondent Olga S. Quiñanola, who had
been employed in petitioner corporation since January
19, 1982, as Assistant Secretary/Export Coordinator, was
promoted to the position of Executive Secretary to the
Executive Vice President and General Manager.
For no apparent reason at all and without prior notice to
her, she was transferred to the Production Department
as Production Secretary, swapping positions with Ester
Tamayo.
Although the transfer did not amount to a demotion
because her salary and workload remained the same,
she believed otherwise so she rejected the assignment
and filed a complaint for illegal dismissal.
prejudicial to his health as well as to the health of his co-
employees; Provided, That he is paid separation pay
equivalent to at least one (1) month salary or to one-half
(1/2) month salary for every year of service, whichever is
greater, a fraction of at least six (6) months being
considered as one (1) whole year.
Which ratiocination was glaringly off-tangent to the issue
posed before him.
Clearly, petitioner has a valid reason to gripe. We cannot,
however, order the reinstatement of private respondent
with petitioner as relations between the two are now
strained after private respondent was humiliated and
embarrassed by petitioner's Mr. Medrano when he tried to
report back to work.
Labor Arbiter: transfer would amount to constructive
dismiss hence, her refusal to obey the transfer order
was justified.
 She was dismissed for causes that are
unjustified, if not entirely non-existent, and
foisted on her by respondents' illegal act the
motivation of which reeks with bad faith.
 complainant Olga Quiñanola's dismissal illegal
and for respondents to reinstate her to her
former position with backwages equivalent to
one year in the amount of P33,684 (P2,807 x
12 months) only, without loss of seniority
rights and other benefits also equivalent to
one year or until the finality of this Decision,
whichever is higher.
NLRC: approved the Labor Arbiter's decision but reduced
to P10,000 the award of moral damages and the
attorney's fees to 10% of the judgment.
EMPLOYER: alleged that:
 The decisions of the Labor Arbiter and of the
NLRC are tainted with grave abuse of
discretion
o In ordering her reinstatement with
full backwages and without loss of
seniority rights and other benefits;
o In awarding to the private
respondent moral damages of
P10,000 and attorney's fees
equivalent to 10% of the judgment;
and
o In not declaring that private
respondent forfeited all her benefits
 for having abandoned her job on June
2 to 3, 1986 and for insubordination.
PRIVATE RESPONDENT: argued that she was dismissed
without due process because she was not given the
opportunity to be heard concerning the causes of her
transfer.
ISSUE: WON private respondent Olga S. Quiñanola was
consttructively dismissed? - NO
RULING: A constructive discharge is defined as: "A
quitting because continued employment is rendered
impossible, unreasonable or unlikely; as, an offer
involving a demotion in rank and a diminution in pay."
In this case, the private respondent's assignment as
Production Secretary of the Production Department was
not unreasonable as it did not involve a demotion in
rank (her rank was still that of a department secretary)
nor a change in her place of work (the office is in the
same building), nor a diminution in pay, benefits, and
privileges. It did not constitute a constructive dismissal.
It is the employer's prerogative, based on its
assessment and perception of its employees'
qualifications, aptitudes, and competence, to move
them around in the various areas of its business
operations in order to "ascertain where they will
function with maximum benefit to the company.
An employee's right to security of tenure does not give
him such a vested right in his position as would deprive
the company of its prerogative to change his
assignment or transfer him where he will be most
useful.
When his transfer is not unreasonable, nor
inconvenient, nor prejudicial to him, and it does not
involve a demotion in rank or a diminution of his
salaries, benefits, and other privileges, the employee
may not complain that it amounts to a constructive
dismissal.
ISSUE: WON private respondent's absence from work on
June 2 to June 3, 1986 constituted an abandonment of
her job in the company resulting in the forfeiture of the
benefits due her? – NO
RULING: The Supreme Court reject the petitioner's
contention that the private respondent's absence from
work on June 2 to June 3, 1986 constituted an
abandonment of her job in the company resulting in the
forfeiture of the benefits due her.
While she was guilty of insubordination for having
refused to move out of her position as Executive
Secretary to the Executive Vice-President and General
Manager of the company, dismissal from the service
would be a draconian punishment for it, as her
complaint for illegal dismissal was filed in good faith.
DESCISION: Olga be shall be reinstated to her position
as Production Secretary of the Production Department
of petitioner's corporation without loss of seniority
rights and other privileges. The awards of backwages,
moral damages and attorney's fees to the private
respondent are hereby set aside.
32.Singa Ship Management Phils. v. NLRC, 288 SCRA
692  
G.R. No. 119080. April 14, 1998
SINGA SHIP MANAGEMENT PHILS., INC., AND ROYAL
CRUISE LINE, Petitioners, v. NATIONAL LABOR
RELATIONS COMMISSION and MARIO SANGIL,
respondent
FACTS: Respondent Mario Sangil signed an employment
contract with petitioner SINGA in behalf of its foreign
principal ROYAL of Piraeus, Greece. He was hired to
work on board the passenger cruise vessel Crown
Odyssey for twelve (12) months as utility man/assistant
steward.
When Mario Sangil boarded the vessel he was unaware
that there was an existing animosity on board between
the Filipino crew and the Greek crew. Thus, at around
9:00 o'clock in the morning, a heated argument occurred
between private respondent Sangil and Greek deck
steward Athanasius "Thanasi" Zakkas which resulted in a
scuffle between the two.
Zakkas pushed respondent Sangil who fell hitting his
head against the steel molding of the door . He suffered
a cut in the head which had to be stitched by the ship
doctor. He was then given three (3) days off from work
during which he went to the Philippine Embassy in
Stockholm and reported the incident to Consul Aro.
Sangil was accompanied back to his ship by Consul Aro.
Sangil informed Ship Captain Yannis Katraz that he was
leaving the ship because of his head injury and of his
fear that further trouble may erupt between him and
the Greeks on board. Since he was still dizzy, he was
brought to the Sabbatsberg Hospital in Stockholm where
he was confined. Same afternoon Crown Odyssey left for
Copenhage without him.
Upon his discharge from the hospital, respondent Sangil
went back to the Philippine Embassy in Stockholm and
executed an affidavit before Consul Aro narrating how
Zakkas and the other Greeks continuously ridiculed him,
calling him names, such as malaca, which means son of a
prostitute.The night before the incident, Zakkas even
threatened to pour hot coffee on his head. The following
morning, while he was busy washing the alleyway of the
crew deck, Zakkas started cursing him again resulting in
the altercation where he sustained a cut on the scalp.
Later on, he was repatriated to the Philippines.
Respondent Sangil filed before the POEA a complaint for
illegal dismissal and payment of wages covering the
unexpired portion of his contract, overtime pay plus
attorney's fees.
POEA: dismissed the complaint for lack of merit on the
ground that respondent Sangil "voluntarily signed off
from the vessel.
NLRC: on appeal reversed the POEA Decision and
ordered petitioners "to pay Mario Sangil jointly and
severally … covering his salary for the unexpired portion
of his employment contract x x x His claim for overtime
pay and tips was dismissed for "lack of
basis."5cräläwvirtualibräry
PETITIONERS SINGA SHIP MANAGEMENT PHILS:
 that there can be no illegal dismissal because
the incident was respondent Sangil's own
doing, and his refusal to go back to the vessel
was voluntary as evidenced by his affidavit
drawn before the Consul of the Philippine
Embassy in Stockholm.
 respondent Sangil was responsible for the
whole incident as it was he who went into a
rage and leaped at the Greek who had to push
him away in self-defense. And because there
was water on the floor, he slipped and hit his
head on the steel molding of the door.
Petitioners maintain that they had nothing to
do with the incident, and that it was in fact
respondent Sangil who voluntarily left the ship.
ISSUE: WON Sangil was illegally dismissed? - YES
x x x this entry in the Logbook Abstract
explains how the complainant got injured in
the head. The above-quoted entry says that
complainant was "pushed and fell down and
suffered scalp trauma."
Complainant did not therefore slip and hit his head
against the tight door molding as alleged by respondents
which was relied upon by the POEA Administrator in this
appealed Decision.
So no less than the ship's Logbook Abstract tend to
support complainant's allegation that he is not the
aggressor but a mere victim. This in turn explains why
Athanasius "Thanasi" Zakkas was fetched from the ship
by the police in Stockholm for questioning.
It is thus clear that based on the ship's Logbook
Abstract, respondent Sangil did not slip but was
actually pushed by the Greek deck steward causing the
former to fall and sustain an injury. And while it may
be argued that the incident may have been a personal
matter between respondent Sangil and the Greek deck
steward, it could have simply been avoided had the
ship captain been more vigilant in the supervision of
his crew.
For, in his affidavit drawn before the Philippine Consul,
respondent Sangil narrated that he had earlier
complained to the captain of the abuses of the Greeks,
but the captain did not only ignore him but blamed him
instead for joining the ship. The captain, as the general
agent of the shipowner, could thus be held responsible
for failing to make the workplace safe.
Since complainant is not the aggressor, and since he
figured a head injury, he is then afraid to go back to the
ship and to mix with his aggressor. Therefore, his
decision to leave the ship "Crown Odyssey" is not
voluntary. He did not leave the ship out of his own free
will but his departure was precipitated by fear. Earlier,
Zakkas threatened to pour hot coffee on his
head.Indeed, the intense undercurrent between the
Filipinos and the Greeks that could erupt into violence at
the slightest provocation was apparent as manifested by
the writings in blood on the wall of the word
"magkaisa," as witnessed by another Greek steward on
the day of the incident. And, Sangil could not get any
protection from the Greek ship captain, not even the
slightest assurance of safety from him.
Without that incident on 20 July 1990 where he was
pushed by the Greek Zakkas, respondent Sangil would
not have had any reason not to return to his ship.
33.Leonardo v. NLRC, G.R. Nos. 125303 & 126937, June
16. 2000   
SECOND DIVISION
[G.R. No. 125303. June 16, 2000.]
DANILO LEONARDO, Petitioner, v. NATIONAL LABOR
RELATIONS COMMISSION and REYNALDO’S MARKETING
CORPORATION, ET. AL., Respondents.
[G.R. No. 126937. June 16, 2000.]
AURELIO FUERTE and DANILO LEONARDO, Petitioners, v.
RAUL T. AQUINO, VICTORIANO R. CALAYCAY and
ROGELIO I. RALAYA, as Chairman and Members of the
NATIONAL LABOR RELATIONS COMMISSION, SECOND
DIVISION and REYNALDO’S MARKETING and/or
REYNALDO PADUA, Respondents.
1aw library
FACTS: Petitioner AURELIO FUERTE was originally
employed by private respondent REYNALDO’S MARKETING
CORPORATION, August 11, 1981, as a muffler specialist,
receiving P45.00 per day.
When he was appointed supervisor, his compensation was
increased to P122.00 a day, augmented by a weekly
supervisor’s allowance of P600.00.
On the other hand, DANILO LEONARDO was hired by
private respondent on March 4, 1988 as an auto-aircon
mechanic at a salary rate of P35.00 per day. His pay was
increased to P90.00 a day when he attained regular status
six months later. From such time until he was allegedly
terminated, he claims to have also received a monthly
allowance equal to P2,500.00 as his share in the profits of
the auto-aircon division.chanrobles virtual lawlibrary
FUERTE ALLEGES:
 he was instructed to report at private
respondent’s main office where he was
informed by the company’s personnel manager
that he would be transferred to its Sucat plant
due to his failure to meet his sales quota, and
for that reason, his supervisor’s allowance
would be withdrawn.
For a short time, FUERTE reported for work at
the Sucat plant; however, he protested his
transfer, subsequently filing a complaint for
illegal termination.
LEONARDO ALLEGES:
 that on April 22, 1991, private respondent was
approached by the same personnel manager
who informed him that his services were no
longer needed. He, too, filed a complaint for
illegal termination
LABOR ARBITER: rendered judgment in favor of
petitioners.
 1aReinstate complainant Aurelio Fuerte, to the
position he was holding before the demotion,
and to reinstate likewise complainant Danilo
Leogardo to his former position or in lieu
thereof, they be reinstated through payroll
reinstatement without any of them losing their
seniority rights and other privileges, inclusive of
allowance and to their other benefits;
 To pay AURELIO FUERTE and DANILO LEOGARDO
NLRC: On appeal, the respondent Commission modified
the aforesaid decision as follows:chanrobles
virtuallawlibrary
 Ordering the reinstatement of complainant
Aurelio Fuerte to his former position without loss
of his seniority rights but without backwages;
 Dismissing the complaint of Danilo Leonardo [sic]
for lack of merit, and
 Deleting the rests [sic] of the monetary award as
well as the award of moral damages and
attorney’s fees in favor of the complainants also
for lack of merit.
PRIVATE RESPONDENT CONTENDS: that it never
terminated petitioners’ services.
 In FUERTE’s case, private respondent claims that
the latter was demoted pursuant to a company
policy intended to foster competition among its
employees. Under this scheme, private
respondent’s employees are required to comply
with a monthly sales quota. Should a supervisor
such as FUERTE fail to meet his quota for a
certain number of consecutive months, he will
be demoted, whereupon his supervisor’s
allowance will be withdrawn and be given to the
individual who takes his place. When the
employee concerned succeeds in meeting the
quota again, he is re-appointed supervisor and
his allowance is restored.
 With regard to LEONARDO, private respondent
likewise insists that it never severed the former’s
employment. On the contrary, the company
claims that it was LEONARDO who abandoned
his post following an investigation wherein he
was asked to explain an incident of alleged
"sideline" work. It would appear that late in the
evening of the day in question, the driver of a
red Corolla arrived at the shop looking for
LEONARDO. The driver said that, as prearranged,
he was to pick up LEONARDO who would
perform a private service on the vehicle. When
reports of the "sideline" work reached
management, it confronted LEONARDO and
asked for an explanation. According to private
respondent, LEONARDO gave contradictory
excuses, eventually claiming that the
unauthorized service was for an aunt. When
pressed to present his aunt, it was then that
LEONARDO stopped reporting for work, filing his
complaint for illegal dismissal some ten months
after his alleged termination.chanrobles
virtual lawlibrary
ISSUE: WON Fuerte was constructively dismissed? - NO
Complainant Fuerte’s failure to meet his sales quota
which caused his demotion and the subsequent
withdrawal of his allowance is fully supported by
respondents’ position paper showing that his
performance is below par.
While it is the policy of the respondent company that an
employer who fails to meet his sales quota for three (3)
consecutive months, he is stripped of his supervisor’s
designation and allowance. In the case of Fuerte, the
respondents went beyond the three (3) months period
before withdrawing his allowance. On this basis,
withdrawal of Fuerte’s allowance is illegal since the
respondents should have withdrawn the same after Fuerte
failed to meet his sales quota for three consecutive
months.
However, the apparent flaw had been sufficiently
reconciled by the respondents when they state that a
supervisor like Fuerte, continues to receive his allowance
until he is officially stripped of his supervisor’s designation
and assigned to another job as ordinary employee. This is
precisely the reason why complainant Fuerte continued to
receive his allowance even beyond the three (3)
consecutive months period to meet his sales quota
considering that it was only on the fifth consecutive
months when the respondent company decided to strip
him of his designation as supervisor.
Moreover, employers acts was well within its rights in
transferring an employee as it sees fit provided that there
is no demotion in rank or diminution in pay.
The two circumstances are deemed badges of bad faith,
and thus constitutive of constructive dismissal. In this
regard, constructive dismissal is defined in the following
manner:chanrob1es virtual 1aw libraryan involuntary
resignation resorted to when continued employment
becomes impossible, unreasonable, or unlikely; when there
is a demotion in rank or diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer
becomes unbearable to the employee.
It should be borne in mind, however, that the right to
demote an employee also falls within the category of
management prerogatives.
This arrangement appears to us to be an allowable
exercise of company rights. An employer is entitled to
impose productivity standards for its workers, and in fact,
non-compliance may be visited with a penalty even more
severe than demotion. Thus,
[t]he practice of a company in laying off workers because
they failed to make the work quota has been recognized in
this jurisdiction.
In the case at bar, the petitioners’ failure to meet the sales
quota assigned to each of them constitute a just cause of
their dismissal, regardless of the permanent or
probationary status of their employment. Failure to
observe prescribed standards of work, or to fulfill
reasonable work assignments due to inefficiency may
constitute just cause for dismissal. Such inefficiency is
understood to mean failure to attain work goals or work
quotas, either by failing to complete the same within the
allotted reasonable period, or by producing unsatisfactory
results. This management prerogative of requiring
standards may be availed of so long as they are exercised
in good faith for the advancement of the employer’s
interest.
Neither can we say that FUERTE’s actions are indicative of
abandonment. To constitute such a ground for dismissal,
there must be
1. failure to report for work or absence without
valid or justifiable reason; and
2. a clear intention, as manifested by some overt
acts, to sever the employer-employee
relationship.
We have accordingly held that the filing of a complaint for
illegal dismissal, as in this case, is inconsistent with a
charge of abandonment.
There remains a question regarding the manner of
demotion.
.ph
After reviewing the record, we are sufficiently persuaded
that private respondent had offered substantial proof of
compliance with this procedural requisite.
Accordingly, given that FUERTE may not be deemed to
have abandoned his job, and neither was he constructively
dismissed by private respondent, the Commission did not
err in ordering his reinstatement but without backwages.
In a case where the employee’s failure to work was
occasioned neither by his abandonment nor by a
termination, the burden of economic loss is not rightfully
shifted to the employer; each party must bear his own
loss.
Neither do we discern any grave abuse of discretion in the
Commission’s ruling dismissing LEONARDO’s complaint. On
this score, the public respondent found that:chanrob1es
virtual 1aw library
Coming now to the case of complainant Danilo Leonardo,
the evidence on record indubitably shows that he
abandoned his work with the respondents.
It must be stressed that while Leonardo alleges that he
was illegally dismissed from his employment by the
respondents, surprisingly, he never stated any reason why
the respondents would want to ease him out from his job.
Moreover, why did it take him ten (10) long months to file
his case if indeed he was aggrieved by respondents. All the
above facts clearly point that the filing of his case is a mere
afterthought on the part of complainant Leonardo.
"For abandonment to constitute a valid cause for
termination of employment, there must be a delibarate
[sic] unjustified refusal of the employee to resume his
employment. This refusal must be clearly shown, mere
absence is not sufficient, it must be accompanied by overt
acts unerringly pointing to the facts [sic] that the employee
simply does not want to work anymore" 
As testified to by Merlin P. Orallo, the personnel manager,
he was given a memorandum asking him to explain the
incident in question, but he refused to receive it. In an
analogous instance, we held that an employee’s refusal to
sign the minutes of an investigation cannot negate the fact
that he was accorded due process. So should it be here.
We find no reason to disturb the Commission’s ruling that
LEONARDO had abandoned his position, the instant case
being a petition for certiorari where questions of fact are
not entertained. Whether a worker has abandoned his
employment is essentially a question of fact. We reiterate
that it is not for us "to re-examine conflicting evidence, re-
evaluate the credibility of witnesses, nor substitute the
findings of fact of an administrative tribunal which has
gained expertise in its special field."
34.Zafra v. CA. G.R. No. 1390
13, September 17. 2002
[G.R. No. 139013. September 17, 2002.]
ZEL T. ZAFRA and EDWIN B. ECARMA, Petitioners, v.
HON. COURT OF APPEALS, PHILIPPINE LONG DISTANCE
TELEPHONE CO., INC., AUGUSTO COTELO, and ERIBERTO
MELLIZA, Respondents.
FACTS: Petitioner Zel T. Zafra was hired by PLDT as
Operations Analyst II while co-petitioner Edwin B.
Ecarma was hired as Junior Operations Analyst I. Both
were regular rank-and-file employees assigned at the
Regional Operations and Maintenance Control Center
(ROMCC) of PLDT’s Cebu Provincial Division. They were
tasked to maintain the operations and maintenance of
the telephone exchanges in the Visayas and Mindanao
areas.
Petitioners were chosen for the OMC Specialist and
System Software Acceptance Training Program in
Germany in preparation for "ALCATEL 1000 S12”.
ALCATEL, the foreign supplier, shouldered the cost of
their training and travel expenses. Petitioners left for
Germany.
While petitioners were in Germany, a certain Mr. R.
Relucio, SwitchNet Division Manager, requested advice,
through an inter-office memorandum, from the Cebu
and Davao Provincial Managers if any of the training
participants were interested to transfer to the Sampaloc
ROMCC to address the operational requirements
therein. The transfer was to be made before the
ALCATEL exchanges and operations and maintenance
center in Sampaloc would become operational.
Upon petitioners’ return from Germany, a certain Mr.
W.P. Acantillado, Senior Manager of the PLDT Cebu
Plant,;informed them about the memorandum. They
balked at the idea, but PLDT, through proceeded to
transfer petitioners to the Sampaloc ROMCC.
Petitioners left Cebu for Manila on December 27, 1995
to air their grievance to PLDT and to seek assistance
from their union head office in Mandaluyong. PLDT
ordered petitioners to report for work on January 16,
1996, but they asked for a deferment to February 1,
1996. Petitioners reported for work at the Sampaloc
office on January 29, 1996. Meanwhile PLDT moved the
effectivity date of their transfer to March 1, 1996. On
March 13, 1996, petitioners again appealed to PLDT to
no avail. And, because all their appeals fell on deaf ears,
Petitioners, while in Manila, tendered their resignation
letters on March 21, 1996. Consequently, the expenses
for their training in Germany were deducted from
petitioners’ final pay.
ISSUE: WON petitioners were constructively dismissed?
- YES
RULING: Despite their knowledge that the lone
operations and maintenance center of the 33 ALCATEL
1000 S12 Exchanges would be "homed" in Sampaloc,
PLDT officials neglected to disclose this vital piece of
information to petitioners before they acceded to be
trained abroad. On arriving home, they did not give
complaining workers any other option but placed them
in an either/or straightjacket, that appeared too
oppressive for those concerned.
As pointed out in the abovementioned inter-office
memorandum by Mr. Reyes:chanrob1es virtual 1aw
library
All sites where training will be utilized are already pre-
determined and pinpointed in the contract documents
and technical protocols signed by PLDT and the
contractor. Hence, there should be no reason or cause
for the misappointment of the training participants, 37
Needless to say, had they known about their pre-
planned reassignments, petitioners could have declined
the foreign training intended for personnel assigned to
the Manila office. The lure of a foreign trip is fleeting
while a reassignment from Cebu to Manila entails major
and permanent readjustments for petitioners and their
families.
A TRANSFER AMOUNTS TO CONSTRUCTIVE DISMISSAL
WHEN THE TRANSFER IS UNREASONABLE,
INCONVENIENT OR PREJUDICIAL TO THE EMPLOYEE
AND INVOLVES A DEMOTION IN RANK OR DIMINUTION
OF SALARIES, BENEFITS AND OTHER PRIVILEGES.
We are not unaware that the transfer of an employee
ordinarily lies within the ambit of management
prerogatives. However, a transfer amounts to
constructive dismissal when the transfer is
unreasonable, inconvenient, or prejudicial to the
employee, and involves a demotion in rank or
diminution of salaries, benefits, and other privileges. 38
In the present case, petitioners were unceremoniously
transferred, necessitating their families’ relocation from
Cebu to Manila. This act of management appears to be
arbitrary without the usual notice that should have been
done even prior to their training abroad. From the
employees’ viewpoint, such action affecting their
families are burdensome, economically and emotionally.
It is no exaggeration to say that their forced transfer is
not only unreasonable, inconvenient, and prejudicial,
but to our mind, also in defiance of basic due process
and fair play in employment relations.
35.Manila Doctors Hospital v. NLRC, 135 SCRA 262  
MANILA DOCTORS HOSPITAL, Petitioner, v. NATIONAL
LABOR RELATIONS COMMISSION (THIRD DIVISION),
LABOR ARBITER VIRGINIA SON, GEORGE CANTOR and
ANTONIO PEPITO, Respondents.
FACTS: petitioner discovered discrepancies in the form
of alterations or falsifications, and of over statements or
additions in the numbers of x-ray films requisitioned on
the original requisition slips and the corresponding stock
cards. This resulted in the abnormally high rate of
expenditures incurred for the x-ray films.
Sister Rosamond Marie Abadesco, Administrator of
petitioner Hospital, called for Jaime A. Macatubal,
storeroom clerk in charge with the duty of carrying out
the requisitions being made by the x-ray department
and confronted him on the aforesaid anomalies.
Macatubal admitted his guilt and offered to pay for
whatever x-ray films that were missing and to resign.
Meanwhile, Jaime A. Macatubal sought the help of
private respondents George Cantor and Antonio Pepito,
Board Member and Acting Member, respectively, of
petitioner Union, with the threat that "Pag hindi ninyo
ako tinulungan makiusap kay Sister Rosamond Marie
Abadesco ay isasabit ko kayo."
Indeed, private respondents Cantor and Pepito and one
Virgilio Artificio were implicated by Macatubal on the
loss of x-ray films and, the National Bureau of
Investigation, on the basis of its findings referred the
case of qualified theft against private respondents,
Virgilio Artificio and Jaime Macatubal to the Manila
Fiscal’s Office.
Thereafter, petitioner reported to the NLRC the
suspension of private respondents and Virgilio Artificio
and at the same time, filed an application for clearance
to terminate herein private respondents.
However investigation by Assistant City Fiscal Cajucom
resulted in the dropping of the charge of theft case
against private respondents Cantor and Pepito.
Private respondents and Virgilio Artificio opposed
petitioner’s application for clearance and filed a case
against herein petitioner for illegal dismissal, unpaid
wages and unfair labor practice.
ISSUE: WON the preventive suspension was proper? -
NO
EMPLOYER-EMPLOYEE RELATIONSHIP; POWER OF
EMPLOYER TO PLACE EMPLOYEE UNDER PREVENTIVE
SUSPENSION; ABSENCE OF BASIS TO EXERCISE THE
SAME IN THE CASE AT BAR.
Although under Section 4, Rule XIV, Book V of the Labor
Code the employer is empowered to place the employee
concerned under preventive suspension, he may do so
only if the continued employment of the employee
poses a serious and imminent threat to the life or
property of the employer or of his co-employees. And,
any preventive suspension before the filing of the
application for clearance shall be considered worked
days, and shall be duly paid as such if the continued
presence of the employee concerned does not pose a
serious threat to the life and property of the employer
or of his co-employees.
In the case at bar, no such threat to the life and property
of the employer or of that of private respondents’ co-
employees is present. It was only Jaime Macatubal who
admitted responsibility with respect to the loss of x-ray
films. Herein private respondents were only implicated
by him and, as a consequence, the fiscal’s office ordered
the dismissal of the case against them. Notwithstanding,
petitioner withheld the salaries of private respondents
during the period from February 16 to 24, 1981, in
violation of the provisions of Section 4, Rule XIV, Book V,
of the Labor Code aforecited and Policy Instructions No.
10, dated April 23, 1976 of the Ministry of Labor.
In the case of Mercury Drug Co. Inc. v. Court of
Industrial Relations (56 SCRA 94), "this Court adopted
the policy of fixing the amount of backwages to a just
and reasonable level without qualification and
deduction to do away with the attendant delay in
awarding backwages because of the extended hearing to
prove the earnings elsewhere of each and every
employees." And, in the recent case of Capital Garment
Corporation v. Ople (117 SCRA 473), "this Court held
that ‘since this case has been pending for four (4) years
We find that a period of two years for purposes of fixing
the backwages of petitioner is fair and reasonable.’
(Philippine Airlines, Inc. v. NLRC, 126 SCRA 223)."
Further, petitioner is hereby ordered to pay fifty percent
(50%) of the backwages of private respondents George
Cantor and Antonio Pepito from the time of their
suspension up to February 28, 1985.
36.PAL v. NLRC, 292 SCRA 40
FACTS: Philippine Airlines hired respondent Raul
Diamante as Integrated Ticket representative fior
Bacolod City station.
In order to book their flight to Manila, Leticia Vista, wife
of Romeo Vista, introduced Raul Diamante to Edgardo
Pineda as the person who could help in the booking of
his flight. Pineda requested Diamante if he could book
their flight tickets.
Pineda gave 4 tickets to Diamante together with the
amount of P1000 then Diamante assured them that they
wll be accommodated.
Upon arrival in Manila, Pineda executed an affidavit
charging Diamante with bribery/corruption.
Petitioner’s Bacolod Branch manager required Diamante
to comment on the affidavit. Diamante submitted his.
After evaluation of the complaint and finding the
explanation of Diamante insufficient, petitioner’s
manager charged Diamante administratively with briber
or extortion and violation of PAL’s Code of Discipline.
Diamante received a notice of his dismissal from the
service by an office memorandum.
Diamante filed with the NLRC a complaint against PAL
for illegal dismissal, reinstatement with back wages and
damages.
ISSUE: WON respondent was illegally dismissed which
would entitle him to reinstatement with back wages? -
NO
RULING: Regarding the legality of respondent's
dismissal, we note that respondent was found to have
violated the Company Code of Discipline. We recognize
the right of an employer to regulate all aspects of
employment. This right, aptlycalled management
prerogative, gives employers the freedom to regulate,
according to their discretion and best judgment, all
aspects of employment, including work assignment,
working methods, processes to be followed, working
regulations transfer of employees, work supervision, lay-
off of workers and the discipline, dismissal and recall of
workers. 9 In general, management has the prerogative
to discipline its employees and to impose appropriate
penalties on erring workers pursuant to company rules
and regulations.
Since private respondent's dismissal was for just and
valid cause, the order of public respondent for the
reinstatement of private respondent with award of back
wages has no factual and legal basis.
37.Philippine Sheet Metal Workers Union v. CIR, 46 OG
5462 
Philippine sheet metal workers' union vs the Court of
Industrial Relations, Can Company and Liberal Labor
UnionG.R. No. L-2028
FACTS:, The respondent company filed a motion, in the
case pending in the court of industrial relations, asking
for authority to lay off at least 15 workers in its can
department on the ground that the installation and
operation of nine new labor-saving machines in the said
department had rendered the services of the said
workers unnecessary.
Petitioner alleged that there was morethan sufficient
work in the company to keep all its workers busy.
ISSUE: WON the laying off of the 15 employees valid? –
YES
RULING: There was justification for reducing the number
of workers in respondent's factory by the introduction of
machinery in the manufacture of its products. There is
no question as to the right of the manufacturer to use
new labor-saving devices with the view to effecting
more economy and efficiency in its method of
production. But the right to reduce personnel should not
be abused. It should not be made a pretext for easing
out laborers on account of their union activities. But
neither should it be denied when it is shown that they
are not discharging their duties in a manner consistent
with good discipline and efficient operation of an
industrial enterprise.
38.Wiltshire File Co. v. NLRC, 193 SCRA 665
FACTS: Private respondent Vicente Ong was the Sales
Manager of petitioner from March 15, 1981 to June 18,
1985.
On June 13, 1985, private respondent’s return from
business and pleasure trip abroad, he was informed by
the President of the petitioner that his services were
being terminated.
Private respondent maintains that he tried to get an
explanation from the management of his dismissal but
to no avail.
When private respondent again tried to speak with the
president of the petitioner, the company’s security
guard handed him a letter which formally informed him
that his services were being terminated upon the ground
of redundancy.
ISSUE: WON private respondent was validly terminated?
- YES
RULING: The court indeed found that petition had
serious financial difficulties before, during and after the
termination of the services of private respondent. The
company has showed a net loss of P4,431,321 in its
audited financial statements. Moreover, Wiltshire finally
closed its doors and terminated all operation in the
Philippines 2 years after the termination of private
respondent.
The court considered that finally shutting down business
operation constitutes strong confirmatory evidence of
petitioner’s previous financial distress. It is also to be
noted that the letter informing private respondent of
the termination of his services used the word
“redundant”, that letter also referred to the company
having “incurred financial losses which in fact has
compelled it to resort to retrenchment to prevent
further losses”. Thus, what the letter in effect saying
was that because of financial losses, retrenchment was
necessary, which in turn resulted in the redundancy of
private respondent’s position.
That no other person was holding the same position that
private respondent held prior to the termination of his
services, does not show that his position had not
become redundant. Redundancy, for purposes of the
labor code, exists where the services of an employee are
in excess of what is reasonably demanded by the actual
requirements of the enterprise. A position is redundant
where it is superfluous, and superfluity of a position or
positions maybe the outcome of a number of factors
such as over hiring of workers,, decreased volume of
business, or dropping of a particular product line or
service activity previously manufactured or undertaken
by the enterprise.
39.Caltex v. NLRC, G.R. No. 159641, October 15, 2007
FACTS: In a letter dated 10/21/96, Caltex informed the
DOLE of its plan to implement a redundancy program in
its Marketing Division and some departments in its
Batangas Refinery for the period starting October 1996
to December 1998.
The letter alleged that the redundancy program is a
response to the market situation which constrained
Caltex to rationalize and simplify its business processes;
that Caltex undertook a review, restructuring and
streamlining of its organization which resulted in
consolidation, abolition and outsourcing of certain
functions and in the identification of certain redundant
positions.
The letter also states that petitioner will provide the
DOLE a list of affected employees as it implements each
phase of the redundancy program.
ISSUE: WON the termination due to redundancy valid? -
NO
RULING: Redundancy, for purposes of the Labor Code,
exists where the services of an employee are in excess
of what is reasonably demanded by the actual
requirements of the enterprise. That no other person
was holding the same position that private respondent
held prior to the termination of his services, does not
show that his position had not become redundant.
A position is redundant where it is superfluous, which
may be the outcome of a number of factors, such as
over hiring of workers, decrease in volume of business,
or dropping of a particular product line or service
activity previously manufactured or undertaken by the
enterprise.
It is true that the characterization of an employee’s
services as no longer necessary or sustainable, and
therefore, properly terminable, is an exercise of
business judgment on the part of the employer, and that
the wisdom or soundness of such characterization or
decision is not subject to discretionary review. However,
such characterization may be rejected if the same is
found to be in violation of law or is arbitrary or
malicious.
The employer must comply with the following requisites
to ensure the validity of the implementation of a
redundancy program:
1) a written notice 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
least one month pay or at least one month pay
for every year of service, whichever is higher;
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.
It is not enough for a company to merely declare that it
has become overmanned. It must produce adequate
proof of such redundancy to justify the dismissal of the
affected employees.
In the instant case, no substantial evidence was
presented by Caltex to justify Romeo's dismissal due to
redundancy. Caltex’s evidence merely consisted of a
copy of its letter to the DOLE informing the latter of its
intention to implement a redundancy program and
nothing more.
The absence of criteria in the selection of an employee
to be dismissed renders the dismissal arbitrary.
Moreover, Caltex failed to refute Romeo’s assertion that
it opened positions of accountants for hiring to which he
could have qualified rather than be dismissed.
Such hiring of accountants is inconsistent with
respondent’s termination due to redundancy. Caltex
also committed a fatal error when it failed to give a
written notice to DOLE as required under Article 283 of
the Labor Code. While petitioner claims that it sent a
notice to the DOLE through a letter dated June 30, 1997,
petitioner failed to show that the same was actually
received by DOLE. The purpose of the written notice to
the DOLE is to give it the opportunity to ascertain the
verity of the alleged authorized cause of termination.
40.Asiaworld Publishing House v. Ople, 152 SCRA 219 
FACTS: Private respondent was hired by Asiaworld
Publishing House, Inc., as its advertising sales director. As
such, she managed and supervised the petitioner’s
advertising sales force, prepared advertising sales
campaign programs, and solicited advertisements from
local and foreign advertisers.
To enable the private respondent to entertain advertisers
in the course of her duties, she was allowed to establish a
credit line with Shiruko Restaurant with the petitioner
agreeing to pay whatever amount was incurred by her for
representation purposes. Sometimes, the private
respondent had to entertain clients elsewhere, spending
her own money and petitioner would later reimburse her
for such expenses.
Due to the respondent’s able management and hard work,
Asiaworld’s income from sales advertising increased
tremendously.
Vicente Pesayco, Jr., the corporation’s president and
private respondent’s immediate superior, requested Ms.
Joaquin not to go on vacation leave because she was
needed to help direct the advertising sales campaign of
Asia Forum. Respondent Joaquin acceded to such request.
She did not avail of her vacation leave benefits for three
times at the request of Pesayco.
Later on private respondent was appointed Vice President
for marketing in a concurrent capacity and her monthly
compensation was increased.
However, sometime later, the petitioner advised the
private respondent in writing that her services would be
terminated effective because of continued losses and
offered to pay her one (1) month’s salary for her more
than three (3) years of service.
The private respondent filed a complaint with the NLRC for
illegal dismissal and for recovery of unpaid earned and
unused vacation leave credits and reimbursement of
representation expenses which she advanced for the
petitioner.
On February 28, 1979, the Regional Director promulgated
an order reinstatating complainant to her former position
with full backwages from May 16, 1978 up to actual
reinstatement without loss of seniority rights and other
benefits. Further, respondent is hereby ordered to pay
complainant the cash equivalent of her vacation leave
totalling forty-five days and reimburse her representation
expenses amounting to P1,517.00..

ISSUE: WON Minister should not have affirmed the
findings of facts of the Regional Director because the same
are erroneous and not supported by evidence?
RULING: Petitioner, in raising this second issue, is, in
effect, asking this Court to review the respondent
Minister’s findings of facts.
The decisions or orders of the Minister of Labor are
reviewable by this Court through a petition for certiorari
and not by way of appeal. This means that the findings of
facts of the respondent Minister are generally accorded
great weight unless there was grave abuse of discretion or
lack of jurisdiction in arriving at such findings.
Even if we treat the instant petition captioned as "Petition
for Review" as a petition for certiorari, there is still no
reason why we should arrive at different factual findings.
In the first place, the only justification presented by the
petitioner for dismissing the private respondent was its
financial statement showing a loss. Asiaworld failed to
show that fair and reasonable standards were used in
ascertaining who would be dismissed and who would be
retained among its employees.
As the Solicitor General correctly stated, there must be fair
and reasonable criteria to be used in selecting employees
to be dismissed, such as:
(a) less preferred status (e.g. temporary employee);
(b) efficiency rating, and
(c) seniority. (Fernandez, P.V., The Law of Employee
Dismissal, pp. 130-131, 1976 Ed.)
In the case at bar, the petitioner never denied the fact that
the private respondent was performing her job
satisfactorily so much so that its income from sales
advertising increased.
Secondly, both the Regional Director and the respondent
Minister found that after the private respondent’s
termination, the petitioner hired a new employee to take
the former’s position. Although the petitioner belies the
fact that the person who assumed the private
respondent’s job was a new employee, it did not present
any employment contract or other proof to support its
allegation. It merely presented BIR forms of the new
employee showing reported income from commissions
given by the petitioner and its record of payment to the
employee of sales commission, gasoline allowances, and
incentive bonus purportedly received for the years 1977
and 1978.
Thirdly, the petitioner never controverted the private
respondent’s allegation that in all instances when she did
not go on vacation leave it was upon the request of the
president of Asiaworld. Clearly, she was prevented from
taking the vacation leaves to which she was entitled.
To argue now that the private respondent should have
secured the authority of her superior and the approval of
management to liquidate and convert into cash her
unused vacation leaves for 1975, 1976, and 1977, would
be grossly unfair. The respondent Minister correctly
affirmed the decision of the Regional Director in awarding
the respondent the cash equivalent of her unused vacation
leaves.chanrobles.com:cralaw:red
We do not see any justifiable reason from the foregoing
why the findings of facts of the respondent Minister
should be set aside.
However, as regards the order of reinstatement, we have
to take into account that antagonism between the
petitioner and the private respondent has been brought
about by the filing of this case plus the fact that a new
employee had been hired to take over the place of the
Respondent. There is no showing that an equivalent
position is available to Ms. Joaquin. All of these militate
against the propriety of reinstating the Respondent.
If the respondent had been a laborer, clerk, or other rank
and file employee, there would be no problem in ordering
her reinstatement with facility. But she was Vice President
for Marketing of Asiaworld. An officer in such a key
position can work effectively only if she enjoys the full
trust and confidence of top management.
The petitioner is hereby ordered, in lieu of reinstatement,
to pay the private respondent the equivalent of twelve
(12) months salaries as severance pay. The petitioner is
also ordered to pay the private respondent three (3) years
backwages. Both the severance pay and the backwages
shall be computed on the basis of the private respondent’s
41.Almoite v. Pacific Architects, 142 SCRA 623
FACTS: Almoite challenge his alleged illegal dismissal by
Pacific Architects. He invokes due process and claims the
absence of a valid cause for his removal.
Pacific Architects is a firm hired by the Ministry of Public
Works and Highways to oversee various government
construction projects. It employed Almoite to supervise
construction of the Zamboanga Area Shop Project. A
new resident engineer was assigned to the Zamboanga
Are Shop Project and asked to report to Almoite for
instruction and training. The services of this engineer
were terminated and taken over by Almoite. However,
owing to complaints of the Ministry of certain
constrction defects in the said project, Almoite was
relieved as senior resident engineer thereof.
He explained his side regarding the said defects but he
was formally notified of the termination of his services.
This prompted him to file a complaint for illegal
dismissal which was decided against him by the labor
arbiter and later by the NLRC.
ISSUE: Whether or not Almoite was denied due process.
NO.
RULING: The petitioner is aware of all these and yet has
the temerity now to claim that he has been deprived of
the right to be heard. When it is considered that his
position paper, although filed out of time, was
nevertheless included in the records elevated to the
National Labor Relations Commission, to which he had
submitted his memorandum of appeal dated April 2,
1985, and his motion for reconsideration dated October
7, 1985, it is difficult to understand how he can honestly
claim that he was not given his day in court. It is not
denial of the right to be heard but denial of the
opportunity to be heard that constitutes violation of due
process of law. In this case, the petitioner was given not
only the opportunity to be heard, which he forfeited in
the proceedings before the labor arbiter, but also the
right to be heard, which he actually exercised through
his various representations before the NLRC.
pay as of May 16, 1978, without qualification and
deduction.
There is also his claim that he could not be held
responsible for the construction defects because much
of the project was done when he was not the resident
engineer thereof. The evidence shows, however, that he
continued to be the supervisor of the Zamboanga Shop
Area Project even after his promotion and that he
visited the project two or three times a week until he
actually took over again as resident engineer. During
that period he never called the attention of the private
respondent to any defect in the project, either in the
plans and specifications or in their execution. It was only
after his attention was called that the petitioner himself
pointed to these defects as if it was he who had made
the discovery. He was a Johnny-come-lately, and what is
worse is that he assumed the posture of an idealistic
crusader, possibly to deflect the blame from him. His
conduct would have been more credible, and his
motives less suspect, if he had acted a little earlier.
No less important are the warnings given to him by the
private respondent for approving overstatements of
accomplishment by the contractor, on which there is no
record of denial or justification from him. As a
consequence of his acts, the contractors were able to
collect payments not yet due or for work not yet done.
In any event, these factual findings made by the labor
authorities support the claim of loss of confidence by
the private respondent in the petitioner’s competence
and integrity. This is a sufficient ground for his dismissal.
As for retrenchment, which is another justification
raised by the private respondent, it is settled that where
there is need for reduction of the work force,
management has the right to choose whom to lay off,
depending on the work still required to be done and the
qualities of the workers to be retained. The project
having been practically completed, and considering the
loss of confidence in the petitioner, his dismissal for
economic reasons by the private respondent cannot be
declared unlawful.
42.Lopez Sugar Corp. v. FFW, 189 SCRA 179
FACTS: Petitioner, allegedly to prevent losses due to
major economic problems, and exercising its privilege
under Article XI, Section 2 of its 1975-1977 Collective
Bargaining Agreement (“CBA”) entered into between
petitioner and private respondent Philippine Labor
Union Association (“PLUA-NACUSIP”), caused the
retrenchment and retirement of a number of its
employees. Petitioner then filed with the MOLE a
combined report on retirement and application for
clearance to retrench, affecting 86 of its employees.
Private respondent FFW, as the certified bargaining
agent of the rank-and-file employees of petitioner filed a
complaint for unfair labor practices and recovery of
union dues. In said complaint, FFW claimed that the
terminations undertaken by petitioner were violative of
the security of tenure of its members and were intended
to “bust” the union and hence constituted an unfair
labor practice. FFW claimed that after the termination of
the services of its members, petitioner advised 110
casuals to report to its personnel office. FFW further
argued that to justify retrenchment, serious business
reverses must be “actual, real and amply supported by
sufficient and convincing evidence.” FFW prayed for
reinstatement of its members who had been retired or
retrenched. Another report on retirement affecting and
additional 25 employees was filed by petitioner.
The LA denied petitioner’s application for clearance to
retrench its employees on the ground that for
retrenchment to be valid, the employer’s losses must be
serious, actual and real and must be amply supported by
sufficient and convincing evidence. The application to
retire was also denied on the ground that petitioner’s
prerogative to so retire its employees was granted by
the 1975-77 collective bargaining agreement which
agreement had long ago expired. On appeal, the NLRC,
finding no justifiable reason for disturbing the decision
of the Labor Arbiter, affirmed that decision
ISSUE: Whether or not petitioner’s application to
retrench its employees should be granted. NO.
RULING: Firstly, the losses expected should be
substantial and not merely deminimis in extent. If the
loss purportedly sought to be forestalled by
retrenchment is clearly shown to be insubstantial and
inconsequential in character, the bona fide nature of the
retrenchment would appear to be seriously in question.
Secondly, the substantial loss apprehended must be
reasonably imminent, as such imminence can be
perceived objectively and in good faith by the employer.
There should, in other words, be a certain degree of
urgency for the retrenchment, which is after all a drastic
recourse with serious consequences for the livelihood of
the employees retired or otherwise laid-off. Because of
the consequential nature of retrenchment, it must,
thirdly, be reasonably necessary and likely to effectively
prevent the expected losses. The employer should have
taken other measures prior or parallel to retrenchment
to forestall losses, i.e., cut other costs than labor costs.
An employer who, for instance, lays off substantial
numbers of workers while continuing to dispense fat
executive bonuses and perquisites or so-called “golden
parachutes”, can scarcely claim to be retrenching in
good faith to avoid losses. To impart operational
meaning to the constitutional policy of providing “full
protection” to labor, the employer’s prerogative to bring
down labor costs by retrenching must be exercised
essentially as a measure of last resort, after less drastic
means—e.g., reduction of both management and rank-
and-file bonuses and salaries, going on reduced time,
improving manufacturing efficiencies, trimming of
marketing and advertising costs, etc.—have been tried
and found wanting.
However, as to the CBA, the court ruled that al though
the CBA expired on 31 December 1977, it continued to
have legal effects as between the parties until a new
CBA had been negotiated and entered into. This
proposition finds legal support in Article 253 of the
Labor Code, which provides: “Article 253—Duty to
bargain collectively when there exists a collective
bargaining agreement.—When there is a collective
bargaining agreement, the duty to bargain collectively
shall also mean that neither party shall terminate nor
modify such agreement during its lifetime. However,
either party can serve a written notice to terminate or
modify the agreement at least sixty (60) days prior to its
expiration date. It shall be the duty of both parties to
keep the status quo and to continue in full force and
effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new
agreement is reached by theparties.” (Italics supplied)
Accordingly, in the instant case, despite the lapse of the
formal effectivity of the CBA by virtue of its own
provisions, the law considered the same as continuing in
force and effect until a new CBA shall have been validly
executed. Hence, petitioner acted within legal bounds
when it decided to retire several employees in
accordance with the CBA. That the employees
themselves similarly acted in accordance with the CBA is
plain from the record. Even after the expiration of the
CBA, petitioner’s employees continued to receive the
benefits and enjoy the privileges granted therein. They
continued to avail of vacation and sick leaves as
computed in accordance with Articles VII and VIII of the
CBA. They also continued to avail of medical and dental
aid under Article IX, death aid and bereavement leave
under Articles X and XIV, insurance coverage under
Article XVI and housing allowance under Article XVIII.
Seventeen (17) employees even availed of Section XI
(dealing with retirement) when they voluntarily retired
between 1 January 1978 and 31 December 1980 and
received retirement pay computed on the basis of
Section 3 of the same article. If the workers chose to
avail of the CBA despite its expiration, equity—if not the
law dictates that the employer should likewise be able
to invoke the CBA.
43.Anino v. NLRC, 290 SCRA 489
FACTS: Hinatuan Mining Supervisory Union (HIMSU) was
formally organized and registered. Complainants here
were elected as officers. Another two complainants
were not elected but were nevertheless active members
of the union. HIMSU formally informed the company of
its desire for a CBA however, the company, as the
complainant claims, completely ignored the union’s
proposals and did not answer HIMSU about it, which
constrained the union to file an unfair labor practice
case against HMC. In order to weaken and if possible
destroy the union, respondents, in the guise of
retrenchment, dismissed the complainants who are the
active leaders of the union.
The LA held that the services of petitioners were
illegally terminated and thus ordered their
reinstatement and the grant of back wages. On the
other hand, neither was there any positive showing that
petitioners were retrenched purposely to weaken or
destroy their union; hence, their claim of unfair labor
practice was dismissed. The NLRC reversed such ruling
and took judicial notice that in one area of Mindanao,
the mining industry suffered economic difficulties. If
small mining cooperatives experienced the same fate,
what more with those highly mechanized
establishments?” As such, the NLRC rejected all claims
of the dismissed employees.
ISSUE: Is the ruling correct? No.
RULING: No, the ruling is erroneous.   Jurisprudence
prescribes the minimum standards necessary to prove the
validity of a retrenchment:  (a) the losses expected must
be substantial and not merely de minimis  in extent; (b) the
substantial losses apprehended must be reasonably
imminent; (c) the retrenchment must be reasonably
necessary and likely to effectively prevent the expected
losses; and (d) the alleged losses, if already incurred, and
the expected imminent losses sought to be forestalled
must be proved by sufficient and convincing evidence.   In
this case, the retrenchment cannot be considered valid on
the basis of the “judicial notice” taken by the Labor
Arbiter. 
44.International Hardware Inc. v. NLRC, 176 SCRA 256
FACTS: Private respondent Bonifacio Pedroso was
employed by petitioner first, as a truck helper, and later
as a delivery truck driver until the number of working
days of private respondent was reduced to just two days
a week due to the financial losses suffered by the
business of petitioner. Thus, private respondent filed a
complaint for illegal dismissal and the payment of
separation pay in the Department of Labor and
Employment (DOLE). The labor arbiter ruled that
inasmuch as the working arrangement of private
respondent was rotated in such a way that the number of
his working days had been substantially reduced for more
than six (6) months since December, 1984 and considering
that the financial crisis of petitioner has not eased, private
respondent is entitled to the payment of separation pay as
if he was actually retrenched, in the amount of P8,100.00.
Petitioner brought an appeal to the respondent National
Labor Relations Commission (NLRC). In a decision dated
July 3, 1987, the NLRC affirmed the said decision of the
labor arbiter. The NLRC held that there was in effect a
“constructive dismissal” of private respondent considering
that his rotation of work was not with his consent and that
the same was not reported to the DOLE, and considering
further that more than six (6) months have already lapsed
but the financial crisis of petitioner had not been adverted
to.
ISSUE: Whether or not an employee who had been
retrenched or otherwise separated from the service of
an employer who, in turn, suffered financial losses and
revenues is entitled to separation pay. YES.
RULING: Under the foregoing provision of law, an
employer may terminate the employment of any
employee due to the following causes: (1) installation of
labor-saving devices; (2) redundancy; (3) retrenchment
to prevent losses; and (4) the closing or cessation of
operation of the establishment or undertaking, unless
the closing is for the purpose of circumventing the
provisions of law. It is required that to effect such
termination of any employee, the employer must serve a
written notice on the workers and the DOLE at least one
(1) month before the intended date thereof. The
purpose of such previous notice to DOLE must be to
enable it to ascertain the verity of the cause for
termination of employment. In case of termination due
to the installation of labor-saving devices or redundancy
the worker affected thereby shall be entitled to
separation pay equivalent to at least one (1) month pay
or to at least one month pay for every year of service,
whichever is higher. However, in case of retrenchment
to prevent losses and in cases of closure or cessation of
operations of the establishment or undertaking not due
to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay
or at least one-half (1/2) month pay for every year of
service, whichever is higher. In this case, it is admitted
that private respondent had not been terminated or
retrenched by petitioner but that due to financial crisis
the number of working days of private respondent was
reduced to just two days a week. Petitioner could not
have been expected to notify DOLE of the retrenchment
of private respondent under the circumstances for there
was no intention to do so on the part of petitioner.
By the same token, if an employee consented to his
retrenchment or voluntarily applied for retrenchment
with the employer due to the installation of labor-saving
devices, redundancy, closure or cessation of operation
or to prevent financial losses to the business of the
employer, the required previous notice to the DOLE is
not necessary as the employee thereby acknowledged
the existence of a valid cause for termination of his
employment. Nevertheless, considering that private
respondent had been rotated by petitioner for over six
(6) months due to the serious losses in the business so
that private respondent had been effectively deprived a
gainful occupation thereby, and considering further that
the business of petitioner was ultimately closed and sold
off, the Court finds, and so holds that the NLRC correctly
ruled that private respondent was thereby
constructively dismissed or retrenched from
employment.
45.Agro Commercial Services Agency v. NLRC, 175 SCRA
790
FACTS:
ISSUE: (1) Is there an employer-employee relationship
between a security agency and its security guards? Yes.
(2) Is the so-called “floating status” of a security guard
lawful and could such prolonged status amount to illegal
dismissal? Yes.
RULING: (1) As to the issue of employer-employee
relationship, an examination of the records shows that
private respondents are regular employees of petitioner.
Their individual length of service ranges from four (4) to
more than ten (10) years. In accordance with the
stipulation of facts, it appears that private respondents
worked with petitioner as security guards/janitors. It
was petitioner who determined how much private
respondents received as their monthly salary,
overtime/night differential pay, mid-year and Christmas
bonus and 13th month pay, uniforms and meal
allowances and other benefits mandated by law. Private
respondents were reported by the petitioner as its
employees for purposes of social security coverage.
Petitioner remitted their withholding taxes to the
Bureau of Internal Revenue and made monthly
contributions to the Pag-Ibig fund for their benefit. It
was petitioner who determined and decided on the
assignments, promotions and salary increases of private
respondents, their working hours, the firearms to be
issued to them and janitorial devices and tools to be
used. Likewise, it was petitioner who imposed the
appropriate disciplinary measures on private
respondents by way of reprimand, suspension and
dismissal.
(2) Forthwith, the allegation of denial of due process is
without basis. Petitioner was afforded the opportunity
to file its position paper. It even entered into a
stipulation of facts with private respondent. In this case,
it appears that twenty-seven (27) of the private
respondents violated this rule by accepting employment in
other security agencies without previously resigning from
employment with petitioner. No doubt, this is a just cause
for termination of their services and as such they are not
entitled to any separation pay.
As regards the other seventeen (17) private respondents,
they admittedly remained in “floating status” for more
than six (6) months. Such a “floating status” is not unusual
for security guards employed in security agencies as their
assignments primarily depend on the contracts entered
into by the agency with third parties. Such a stipulated
status is, therefore, lawful. The “floating status” of such an
employee should last only for a reasonable time. In this
case, respondent labor arbiter correctly held that when
the “floating status” of said employees lasts for more than
six (6) months, they may be considered to have been
illegally dismissed from the service. Thus, they are entitled
to the corresponding benefits for their separation.
46.Edge Apparel v. NLRC, 286 SCRA 302
FACTS: Pursuing its retrenchment program, petitioner
Edge Apparel, Inc., dismissed the 6 private respondents
herein, Antipuesto et al. The respondents consulted with
the DOLE who advised them that it would be best for
them to receive the separation pay being offered by the
corporation, an advice which they took. However, the
subsequent receipt of their separation pay benefits,
nevertheless, did not deter Antipuesto, et al., from filing
a complaint for illegal dismissal against the corporation.
• They claim that the retrenchment program was
a mere misrepresentation by Edge Apparel.
Edge Apparel countered that its financial obligations,
amounting to about P8 Million, had begun to eat up
most of its capital outlay and resulted in unabated losses
of P681,280.00 in 1989, P262,741.00 in 1990,
P162,170.00 in 1991 and P749,294.00 in 1992,
constraining the company to adopt and implement a
retrenchment program.
LA: Dismissed the Complaint.
NLRC: Affirmed with Modification. It found that "There is
basis in the retrenchment of these workers.
ISSUE: Whether or not redundancy was the cause of
their termination. No. Retrenchment.
RULING:
The employer has a right to dismiss employees for valid
causes after proper observance of due process. These
valid causes are categorized into two groups, i.e., “just”
causes under Article 282 of the Labor Code
and “authorized” causes under Articles 283 and 284 of
the same code.
The just causes for termination of employment,
enumerated in Article 282, include—(a) Serious
misconduct or willful disobedience by the employee of
the lawful orders of his employer or representative
relative to his work; (b) Gross and habitual neglect by
the employee of his duties; (c) Fraud or willful breach by
the employee of the trust reposed in him by his
employer or duly authorized representative; (d)
Commission of a crime or offense by the employee
against the person of his employer or any immediate
member of his family or his duly authorized
representative; and (e) Other causes analogous to the
foregoing.
Redundancy exists where the services of an employee
are in excess of what would reasonably be demanded by
the actual requirements of the enterprise. A position is
redundant when it is superfluous, and superfluity of a
position or positions could be the result of a number of
factors, such as the overhiring of workers, a decrease in
the volume of business or the dropping of a particular
line or service previously manufactured or undertaken
by the enterprise. An employer has no legal obligation to
keep on the payroll employees more than the number
needed for the operation of the business.
Retrenchment, in contrast to redundancy, is an
economic ground to reduce the number of employees.
In order to be justified, the termination of employment
by reason of retrenchment must be due to business
losses or reverses which are serious, actual and real. Not
every loss incurred or expected to be incurred by the
employer will justify retrenchment, since, in the nature
of things, the possibility of incurring losses is constantly
present, in greater or lesser degree, in carrying on the
business operations. Retrenchment is normally resorted
to by management during periods of business reverses
and economic difficulties occasioned by such events as
recession, industrial depression, or seasonal
fluctuations. It is an act of the employer of reducing the
work force because of losses in the operation of the
enterprise, lack of work, or considerable reduction on
the volume of business. Retrenchment is, in many ways,
a measure of last resort when other less drastic means
have been tried and found to be inadequate. A lull
caused by lack of orders or shortage of materials must
be of such nature as would severely affect the continued
business operations of the employer to the detriment of
all and sundry if not properly addressed. The institution
of “new methods or more efficient machinery, or of
automation” is technically a ground for termination of
employment by reason of installation of labor-saving
devices but where the introduction of these methods is
resorted to not merely to effect greater efficiency in the
operations of the business but principally because of
serious business reverses and to avert further losses, the
device could then verily be considered one of
retrenchment.
Procedurally, in order to validly effect retrenchment, the
employer must observe two other requirements:
(a) service of a prior written notice of at least one month
on the workers and the Department of Labor and
Employment,
(b) payment of the due separation pay. Petitioner has
been found to have complied with the above
requirements of the law, including the payment of
separation pay.
47.Somerville Stainless Steel Corp. v. NLRC, 287 SCRA
420
FACTS: Somerville Stainless Steel Corporation, the
company for brevity, is engaged in the business of
manufacturing stainless steel kitchen equipment. On
different dates, the complainants were employed by the
respondent company.
The present controversy was triggered by the inability of
the respondent company to pay its workers certain
benefits stipulated in their collective bargaining
agreement starting 16 March 1993. The CBA benefits
that were withheld by management are rice subsidy,
incentive leave pay, hospitalization, t-shirts and safety
shoes and incentive bonus. Complainants allege that
their union communicated with respondents for a
renegotiation of their CBA but the same was rejected by
the latter. Thus, their union filed a notice of strike with
the DOLE and for unfair labor practice. Complainants
contend that most of the retrenched employees were
union officers. Complainants stress that their dismissal
was without just cause and in utter disregard of their
right to due process. The LA rendered a decision in favor
of the complainants to which the NLRC affirmed hence
this petition.
ISSUE: Was the petitioner’s retrenchment of private
respondents justified? NO.
RULING: To justify retrenchment, the “loss” referred to
in Art. 283 cannot be just any kind or amount of loss;
otherwise, a company could easily feign excuses to suit
its whims and prejudices or to rid itself of unwanted
employees, To guard against this possibility of abuse,
the Court has laid down the following standard which a
company must meet to justify retrenchment: “x x x
Firstly, the losses expected should be substantial and
not merely de minimis in extent. If the loss purportedly
sought to be forestalled by retrenchment is clearly
shown to be insubstantial and inconsequential in
character, the bonafide nature of the retrenchment
would appear to be seriously in question. Secondly, the
substantial loss apprehended must be reasonably
imminent, as such imminence can be perceived
objectively and in good faith by the employer. There
should, in other words, be a certain degree of urgency
for the retrenchment, which is after all a drastic
recourse with serious consequences for the livelihood of
the employees retired or otherwise laid off. Because of
the consequential nature of retrenchment, it must,
thirdly, be reasonably necessary and likely to effectively
prevent the expected losses. The employer should have
taken other measures prior or parallel to retrenchment
to forestall losses, i.e., cut other costs other than labor
costs. An employer who, for instance, lays off substantial
numbers of workers while continuing to dispense fat
executive bonuses and perquisites or so-called ‘golden
parachutes,’ can scarcely claim to be retrenching in good
faith to avoid losses. To impart operational meaning to
the constitutional policy of providing ‘full protection’ to
labor, the employer’s prerogative to bring down labor
costs by retrenching must be exercised essentially as a
measure of last resort, after less drastic means—e.g.,
reduction of both management and rank-and-file
bonuses and salaries, going on reduced time, improving
manufacturing efficiencies, trimming of marketing and
advertising costs, etc.—have been tried and found
wanting. Lastly, but certainly not the least important,
alleged losses if already realized, and the expected
imminent losses sought to be forestalled, must be
proved by sufficient and convincing evidence. The
reason for requiring this quantum of proof is readily
apparent: any less exacting standard of proof would
render too easy the abuse of this ground for termination
of services of employees. x x x”
In a nutshell, the law recognizes a company’s right to
retrench employees when “made necessary or
compelled by economic factors that would otherwise
endanger its stability or existence.” Unarguably,
retrenchment is only “a measure of last resort when
other less drastic means have been tried and found to
be inadequate.” Considering the severe consequences
occasioned by retrenchment on the livelihood of the
employee(s) to be dismissed, and the avowed policy of
the State—under Sec. 3, Art. XIII of the Constitution, and
Art. 3 of the Labor Code—to afford full protection to
labor and to assure the employee’s right to enjoy
security of tenure, the Court reiterates that “not every
loss incurred or expected to be incurred by a company
will justify retrenchment. The losses must be substantial
and the retrenchment must be reasonably necessary to
avert such losses.” Settled is the rule that the employer
bears the burden of proving this allegation of the
existence or imminence of substantial losses, which by
its nature is an affirmative defense. It is the duty of the
employer to prove with clear and satisfactory evidence
that legitimate business reasons exist to justify
retrenchment. Failure to do so “inevitably results in a
finding that the dismissal is unjustified.” And the
determination of whether an employer has sufficiently
and successfully discharged this burden of proof “is
essentially a question of fact for the Labor Arbiter and
the NLRC to determine.”
The failure of petitioner to show its income or loss for
the immediately preceding years or to prove that it
expected no abatement of such losses in the coming
years bespeaks the weakness of its cause. The financial
statement for 1992, by itself, does not sufficiently prove
petitioner’s allegation that it “already suffered actual
serious losses,” because it does not show whether its
losses increased or decreased. Although petitioner
posted a loss for 1992, it is also possible that such loss
was considerably less than those previously incurred,
thereby indicating the company’s improving condition.
In view of petitioner’s failure to prove that its alleged
losses were substantial, continuing and without any
immediate prospect of abating, the bona fide nature of
the retrenchment appears to be seriously in question.
48.Phil. Tuberculosis Society v. NLU & NLRC, 294 SCRA
567
FACTS: The Philippine Tuberculosis Society, Inc. is a non-
stock and non-profit domestic corporation with the
primary objective of fighting tuberculosis in the
Philippines. It has employees who are represented by
private respondent National Labor Union. The Society
began to experience serious financial difficulties when it
incurred a deficit of Php 2 million.
First, the Society leased a property in Tayuman to a
fastfood outlet, cancelled its service agreement with a
janitorial company, and sold its equity in the Philippine
Long Distance Telephone Company (PLDT). Second, it
withdrew from the Pag-ibig Fund Program, negotiated with
the Government Service Insurance System for the
restructuring of its obligations, and applied for exemption
from minimum wage increases. Finally, it disapproved the
overtime pay of supervisory and managerial employees,
obtained the waiver of personnel of their entitlement to
wage differentials, and implemented the retrenchment of
one hundred sixteen (116) employees. 2 The retrenchment
is the subject of the present suit.
Respondent NLU filed a notice of strike against the Society
with the National Conciliation and Mediation Board
(NCMB), charging the Society with unfair labor practice in
terminating the services of the aforementioned
employees. Conferences were scheduled but failed to
resolve the case. The Secretary of Labor certified the case
to the NLRC on the ground than the labor dispute seriously
affected the national interest. The NLRC rendered a
decision declaring as invalid the retrenchment of the
employees concerned on the ground that the Society did
not take seniority into account in their selection.
ISSUE: Is retrenchment or reduction in cases of financial
difficulties a ground for the termination of employment?
YES.
RULING: Clearly, retrenchment or reduction of the
workforce in cases of financial difficulties is recognized
as a ground for the termination of employment.
Although petitioner is a non-stock and non-profit
organization, retrenchment as a measure adopted to
stave off threats to its existence is available to it. Article
278 of the Labor Code states that the fiscal measures
recognized therein which an employer may validly adopt
apply to “all establishments or undertakings, whether
for profit or not.” However, the employer’s prerogative
to layoff employees is subject to certain limitations set
forth in Lopez Sugar Corporation v. Federation of Free
Workers as follows: Firstly, the losses expected should
be substantial and not merely de minimis in extent. If
the loss purportedly sought to be forestalled by
retrenchment is clearly shown to be insubstantial and
inconsequential in character, the bonafide nature of the
retrenchment would appear to be seriously in question.
Secondly, the substantial loss apprehended must be
reasonably imminent, as such imminence can be
perceived objectively and in good faith by the employer.
There should, in other words, be a certain degree of
urgency for the retrenchment, which is after all a drastic
recourse with serious consequences for the livelihood of
the employees retired or otherwise laid off. Because of
the consequential nature of retrenchment, it must,
thirdly, be reasonably necessary and likely to effectively
prevent the expected losses. The employer should have
taken other measures prior or parallel to retrenchment
to forestall losses, i.e., cut other costs than labor costs.
An employer who, for instance, lays off substantial
numbers of workers while continuing to dispense fat
executive bonuses and perquisites or so-called “golden
parachutes,” can scarcely claim to be retrenching in
good faith to avoid losses. To impart operational
meaning to the constitutional policy of providing “full
protection” to labor, the employer’s prerogative to bring
down labor costs by retrenching must be exercised
essentially as a measure of last resort, after less drastic
means—e.g., reduction of both management and rank-
and-file bonuses and salaries, going on reduced time,
improving manufacturing efficiencies, trimming of
marketing and advertising costs, etc.—have been tried
and found wanting. Lastly, but certainly not the least
important, alleged losses if already realized, and the
expected imminent losses sought to be forestalled, must
be proved by sufficient and convincing evidence. The
reason for requiring this quantum of proof is readily
apparent: any less exacting standard of proof would
render too easy the abuse of this ground for termination
of services of employees.
In addition to the above, the retrenchment must be
implemented in a just and proper manner. As held in
Asiaworld Publishing House, Inc. v. Ople: there must be
fair and reasonable criteria to be used in selecting
employees to be dismissed, such as: (a) less preferred
status (e.g., temporary employee); (b) efficiency rating;
and (c) seniority.
49.Asian Alcohol v. NLRC, 305 SCRA 416
FACTS: The Parsons family who owned controlling
stocks in Asian Alcohol Corporation suffered major
business losses prompting it to sell the corporation to
Prior Holding which took over its management and
operation. Prior Holding implemented re
organizational plan and other cost-saving measures for 
the company. As a result 117 employees were
separated. Of 72 of them occupied redundant positions,
21 were held by union members and 51 by non-union
members. 6 private respondents were members of the
union whose positions were abolished due to
redundancy. Private respondents Carias, Martines and
Sendon were water pump tenders while Amacio was a
machine shop mechanice. Verayo was a plant helper
under him. They received individual notices of
termination and were paid equivalent of one month
salary for every year of service as separation pay. All of
them executed sworn releases, waivers and quitclaims.
Private respondents filed with the NLRC complaints for
illegal dismissal with a prayer for reinstatement and
backwages. They alleged that Asian Alcohol used the
retrenchment to dismiss them because they were
members of the union. They also alleged that Asian
Alcohol was not bankrupt as it has engaged in aggressive
scheme in contractual hiring.
The LA dismissed the complaint. However, the NLRC
reversed such decision and ruled that they were illegally
dismissed.
ISSUE: Whether or not there is a valid retrenchment
thus making the dismissal of private respondents illegal.
No.
RULING: Retrenchment and redundancy are just causes
for the employer to terminate the services of workers to
preserve the viability of the business. In exercising its
right, however, management must faithfully comply
with the substantive and procedural requirements laid
down by law and jurisprudence. The requirements for
valid retrenchment which must be proved by clear and
convincing evidence are: (1) that the retrenchment is
reasonably necessary and likely to prevent business
losses which, if already incurred, are not merely de
minimis, but substantial, serious, actual and real, or if
only expected, are reasonably imminent as perceived
objectively and in good faith by the employer; (2) that
the employer served written notice both to the
employees and to the Department of Labor and
Employment at least one month prior to the intended
date of retrenchment; (3) that the employer pays the
retrenched employees separation pay equivalent to one
month pay or at least 1/2 month pay for every year of
service, whichever is higher; (4) that the employer
exercises its prerogative to retrench employees in good
faith for the advancement of its interest and not to
defeat or circumvent the employees’ right to security of
tenure; and (5) that the employer used fair and
reasonable criteria in ascertaining who would be
dismissed and who would be retained among the
employees, such as status (i.e., whether they are
temporary, casual, regular or managerial employees),
efficiency, seniority, physical fitness, age, and financial
hardship for certain workers.
It should be observed that Article 283 of the Labor Code
uses the phrase “retrenchment to prevent losses.” In its
ordinary connotation, this phrase means that
retrenchment must be undertaken by the employer
before losses are actually sustained. We have, however,
interpreted the law to mean that the employer need not
keep all his employees until after his losses shall have
materialized. Otherwise, the law could be vulnerable to
attack as undue taking of property for the benefit of
another. In the case at bar, Prior Holdings took over the
operations of Asian Alcohol in October 1991. Plain to
see, the last quarter losses in 1991 were already
incurred under the new management. There were no
signs that these losses would abate. Irrefutable was the
fact that losses have bled Asian Alcohol incessantly over
a span of several years. They were incurred under the
management of the Parsons family and continued to be
suffered under the new management of Prior Holdings.
Ultimately, it is Prior Holdings that will absorb all the
losses, including those incurred under the former
owners of the company. The law gives the new
management every right to undertake measures to save
the company from bankruptcy.
50.UFW v. NLRC, 207 SCRA 435
FACTS: Thirty-six (36) workers of the “lumpia”
department were not given their usual working
materials and equipment for that day and, instead, were
asked to clean their respective working areas. Since
these workers were employed on a “pakiao” basis, they
refused. Nevertheless, they still reported for work on 21
September 1987 but to their surprise, they found out
that SIMEX had removed all materials and equipments
from their workplaces. The Union claims that its
members were, therefore, effectively locked out.
Sixteen (16) more workers from the other departments
were similarly refused employment. As a consequence,
these workers, through UFW, instituted a Complaint for
Unfair Labor Practices and violation of labor standard
laws against SIMEX and its principal officers and
stockholder. however, SIMEX had filed a Notice of
“Permanent Shutdown/Total Closure of All Units of
Operation in the Establishment” with the Department of
Labor and Employment to take effect on 9 November
1987, allegedly due to business reverses brought about
by the enormous rejection of their products for export
to the United States. This notice of closure rendered the
Petition for Direct Certification moot and academic.
Notices of Closure were placed in conspicuous places
around the company premises.
Meanwhile, in sympathy with their fifty-two (52) co-
workers who were allegedly illegally dismissed by SIMEX
and in “protest to the continued acts of unfair labor
practices committed” by SIMEX, thirty-nine (39) other
workers staged a picket outside the company premises
from 10 October 1987 to 27 October 1987. By reason
thereof, SIMEX’s supposed offer of separation pay
totalling P280,000.00 was withdrawn. When these
workers lifted their picket on 27 October 1987 and
voluntarily reported for work, SIMEX refused to give
them their usual work. They were dismissed effective 1
November 1987.
Another Complaint for Unfair Labor Practice was,
therefore, filed against the same respondents, this time
involving the thirty-nine (39) workers who picketed the
company premises in sympathy with their other co-
workers, docketed as NLRC-NCR-11-03887-87 (for Unfair
Labor Practice, Illegal Dismissal/Lockout of thirty-nine
[39] workers). It is this case that is the subject of this
Petition for Certiorari.
These factors strongly give more credence to the
Solicitor General and UFW’s contention that the alleged
closure of business of SIMEX was “but a subterfuge to
discourage formation of a union” and that SIMEX was
guilty of union busting. To all appearances, the company
had filed a Notice of Closure simply to pre-empt the
employees from forming a union within the company.

Labor Arbiter rendered his verdict declaring that the

closure of SIMEX was a mere subterfuge in order to
discourage the formation of the union. The respondents,
SIMEX and the SANTANDERs, were found guilty of unfair
labor practice. On appeal, the NLRC, in a Decision, dated
28 August 1989, set aside the Labor Arbiter’s Decision
when it held that the “determination of the wisdom or
expediency to close a department in a corporation, e.g.,
the ‘lumpia’ department in this case, due to financial
reverses, is the sole prerogative of the corporation.” It
ruled that since SIMEX had filed a Notice of Closure on 9
October 1987 and had complied with the requirements
of the applicable rules and regulations when it posted in
their main gate the aforesaid Notice, its failure to accept
the workers of UFW did not constitute unfair labor
practice considering that SIMEX had already closed the
“lumpia” department. Hence, SIMEX was merely ordered
to pay the workers affected a separation pay equivalent
to one (1) month’s salary for every year of service
rendered.

ISSUE: Whether or not there was unfair labor practice

due to the reduction of work force. YES.

RULING: Indeed, there is no question that an employer

may reduce its work force to prevent losses. However,
these losses must be serious, actual and real (Lopez
Sugar Corporation v. Federation of Free Workers, G.R.
No. 75000-01, 30 August 1990, 189 SCRA 179).
Otherwise, this “ground for termination would be
susceptible to abuse by scheming employers who might
be merely feigning business losses or reverses in their
business ventures in order to ease out employees
(Garcia v. NLRC, G.R. No. L-67825, 4 September 1987,
153 SCRA 639). x x x The Notice of Closure filed by SIMEX
had indicated that it will have a permanent shutdown
and/or total closure of all its units of operation. This was
not so. Workers belonging to the Marketing and Export
Divisions were never laid off. A SEC Certification, dated 4
February 1988, shows that SIMEX never applied for
dissolution. The Labor Arbiter also found as a fact that
SIMEX continued to export its products, including
“eggroll wrap,” long after its target date of closure. x x x