3B LIST OF CASES- LABOR RELATIONS (Just and Authorized Causes) Serious Misconduct

1. Maribago Bluewater Beach Resort, Inc. vs. Nito Dual, G.R. No. 180660, July 20, 2010. 2. Joeb M. Aliviado, et al. vs. Procter and Gamble Phils., Inc., et al., G.R. No. 160506, June 6, 2011. 3. The Coca-Cola Export Corporation, vs. Clarita P. Gacayan, G.R. No. 149433, December 15, 2010. 4. Salvador O. Echano, Jr. vs. Liberty Toledo, G.R. No. 173930,September 15, 2010. 5. NLMK-OLALIA-KMU and Helen Valenzuela vs. Keihin Philippines Corporation, G.R. No. 171115, August 9, 2010. 6. Jeffrey Nacague vs. Sulpicio Lines, Inc., G.R. No. 172589, August 8, 2010. 7. National Power Corporation vs. Alan Olandesca, G.R. No. 171434, April 23, 2010. 8. Caltex (Philippines), Inc., et. al. vs. Hermie G. Abad, et. al., G.R. No. 163554, April 23, 2010. 9. White Diamond Trading Corporation and/or Jerry Uy vs. NLRC, et al., G.R. No. 186019. March 29, 2010. 10. Reno Foods, Inc., and/or Vicente Khu vs. (NLM) Katipunan on behalf of its member, NenitaCapor, G.R. No. 164016, March 15,
2010. Willful Disobedience

1. 2. 1. 2. 3. 4. 5. 6. 1. 2. 3. 4. 5. 6. 7. 8. 9. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 6. 1. 2. 1. 2. 3. 4.

Lores Realty Enterprises, Inc., Lorenzo Y. Sumulong III v. Virginia E. Pacia, G.R. No. 171189, March 9, 2011. Equitable PCI Bank (Now Banco De Oro Unibank, Inc.), vs. Castor A. Dompor, G.R. Nos. 163293 & 163297, December 8, 2010.

Gross Negligence Hospital Management Services MCM vs. HMS-Inc. MCM Employees Association-AFW., G.R. No. 176287, January 31, 2011. St. Lukes Medical Center, Inc. and Robert Kuan vs. EstrelitoNazario, G.R. No. 152166, October 20, 2010. Jesus E. Dycoco, Jr.vs. Equitable PCI Bank (now Banco de Oro), et al. G.R. No. 188271, August 16, 2010. Dr. Edilberto Estampa, Jr. vs. Government of Davao, G.R. No. 190681, June 21, 2010. BPI and BPI Family Bank vs. Hon. NLRC (1st Division) and Ma. Rosario N. Arambulo, G.R. No. 179801. June 18, 2010. Kulas Ideas & Creations, et al. vs. Juliet Alcoseba, et al., G.R. No. 180123, February 18, 2010.

Breach of Trust and Confidence James Ben L. Jerusalem v. Keppel Monte Bank, et al., G.R. No. 169564. April 6, 2011. Equitable PCI Bank (Now Banco De Oro Unibank, Inc.), vs. Castor A. Dompor, G.R. Nos. 163293 & 163297, December 8, 2010. Century Canning Corporation, Ricardo T. Po, Jr., et al. vs. Vicente Randy R. Ramil, G.R. No. 171630, August 8, 2010. Luzviminda A. Ang vs. Philippine National Bank, G.R. No. 178762, June 16, 2010. Lima Land, Inc., Leandro Javier, Sylvia Duque and Premy Ann Beloy vs. MarlynCuavas, G.R. No. 169523, June 16, 2010. Anabel Benjamin, et al. vs. Amellar Corporation., G.R. No. 183383, April 5, 2010. Joeb Aliviado, et al. vs. Procter & Gamble Philippines, Inc., et al., G.R. No. 160506, March 9, 2010. Bibiana Farms and Mills, Inc. vs. Arturo Lado, G.R. No. 157861, February 2, 2010. Rolando P. Ancheta vs. Destiny Financial Plans, Inc. and Arsenio Bartolome, G.R. No. 179702, February 16, 2010.

Loss of Confidence The Coca-Cola Export Corporation, vs. Clarita P. Gacayan, G.R. No. 149433, December 15, 2010. Philippine Airlines, Inc. vs. National Labor Relations Commission and Aida M. Quijano, G.R. No. 123294, October 20, 2010. Leandro M. Alcantara vs. The Philippine Commercial and International Bank, G.R. No. 151349, October 20, 2010. Lima Land, Inc., Leandro Javier, Sylvia Duque and Premy Ann Beloy vs. MarlynCuavas, G.R. No. 169523, June 16, 2010. Philippine Journalist, Inc. vs. Leozar Dela Cruz y Balobal, G.R. No. 187120, February 16, 2010.

Abandonment Harpoon Marine Services, Inc., et al. v. Fernan H. Francisco, GR No. 167751, March 2, 2011. E.G. & I. Construction Corporation and Edsel Galeos v. Ananias P. Sato, et al., G.R. No. 182070, February 16, 2011. Elpidio Calipay vs. National Labor Relations Commission, et al., G.R. No. 166411, August 3, 2010. Philippine Rural Reconstruction vs. VirgilioPulgar, G.R. No. 169227. July 5, 2010. Evangeline C. Cobarrubias vs. Saint Louis University, Inc., G.R. No. 176717, March 17, 2010. CRC Agricultural Trading and Rolando B. Catindig vs. NLRC and Roberto Obias, G.R. No. 177664, December 23, 2009.

Closure of Business Peafrancia Tours and Travel Transport, Inc. vs. Joselito P. Sarmiento and Ricardo S. Catimbang, G.R. No. 178397, October 20, 2010. SolidBank Corporation vs. National Labor Relations Commission, et al., G.R. No. 165951, March 30, 2010.

Redundancy Nelson A. Culili v. Eastern Telecommunications Philippines, Inc., et al. G.R. No. 165381, February 9, 2011. Coca Cola Bottlers Philippines, Inc. vs. Angel U. Del Villar, G.R. No. 163091, October 6, 2010. Lambert Pawnbrokers and Jewelry corporation and Lambert Lim vs. Helen Binamira, G.R. No. 170464. July 12, 2010. Efren M. Herrera, et al. vs. National Power Corporation, et al., G.R. No. 166570, December 18, 2009.

Retrenchment

1. 2. 3. 4. 5. 6. 1. 1. 2. 3. 4. 5.

Plastimer Industrial Corporation and TeoKee Bin v. Natalia C. Gopo, et al., G.R. No. 183390, February 16, 2011. Manila Mining Corp. Employees Association, et al. vs..Manila Mining corp, et al., G.R. Nos. 178222-23, September 29, 2010. Shimizu Philippines Constractors, Inc. vs. Virgilio P. Callanta, G.R. No. 165923, September 29, 2010. Francis Ray Talam vs. National Labor Relations Commission, 4th Division, Cebu City, et al.,G.R. No. 175040, April 6, 2010. Virgilio G. Anabe vs. Asian Construction (ASIAKONSTRUKT), et al., G.R. No. 183233, December 23, 2009. Hotel Enterprises of the Philippines, Inc., etc. vs. Hyatt-National Union etc., G.R. No. 165756, June 5, 2009.

Floating Status Bebina G. Salvaloza vs. NLRC, Gulf Pacific Security Agency, Inc., and Angel Quizon, G.R. No. 182086, November 24, 2010.

Constructive Dismissal Coca Cola Bottlers Philippines, Inc. vs. Angel U. Del Villar, G.R. No. 163091, October 6, 2010. SHS Perforated Materials, Inc., et al. vs. Manuel F. Diaz, G.R. No. 185814, October 13, 2010. Estrella Velasco vs. Transit Automotive Supply, Inc. and Antonio de Dios, G.R. No. 171327, June 18, 2010. Elsa S. Malig-on v. Equitable General Services Inc., G.R. No. 185269, June 29, 2010. Gualberto Aguanza vs. Asian Terminal, Inc., et al., G.R. No. 163505, August 14, 2009.

Resignation 1. Elsa S. Malig-on v. Equitable General Services Inc., G.R. No. 185269, June 29, 2010. 2. Manolo A. Peaflor vs. Outdoor Clothing Manufacturing Corp., et al., G.R. No. 177114, April 13, 2010. 3. Baltazar L. Payno vs. Orizon Trading Corp./ Orata Trading and Flordeliza Legaspi, G.R. No. 175345, August 19, 2009.

SERIOUS MISCONDUCT
G.R. No. 180660; July 20, 2010. MARIBAGO BLUEWATER BEACH RESORT, INC. vs. NITO DUAL FACTS: Petitioner Maribago is a corporation operating a resort hotel and restaurant in Lapu-Lapu City. Respondent Dual is petitioners waiter who was promoted thereafter as outlet cashier of its Poolbar/Allegro Restaurant. On the evening of January 9, 2005, a group of japanese guest together with several companions dined @ Allegro. Hiyas, (captain waiter) took their dinner orders comprising of six (6) sets of lamb and six (6) sets of fish. He forwarded one copy of the order slip to the kitchen and another copy to Dual (cashier). Pursuant to the order slip, the chef made 14 sets of dinner, 6 sets of lamb, 6 sets of fish with 2 free sets. Hiyas and Mission, (waiters) served the dinner sets. After dinner, the guests asked for their bill, which Mission gave, and the latter asked Dual for the sales receipt and presented this to the guests. The guests paid the amount indicated on the receipt and thereafter left in a hurry. It was later discovered that there was a huge discrepancy between the amount punched in by Dual and the alleged payment given by the guests. As such, petitioner through its HR mgr, issued memoranda requiring respondents and the other waiters to explain why they should not be penalized for committing acts of dishonesty and violating their house rules. Several clarificatory hearings ensued until Mission testified that the transaction receipts given to him by Dual indicated 10, 100php and that the guest gave him (Mission) 10,500php with the instruction to just return 200php and keep the rest as tip. It was discovered later that Dual only 3,036php was entered by Dual in the cash register. After the investigation, Dual was found guilty of dishonesty for his fabricated statements and for asking one of the waiters (Mission) to corroborate his allegations and was thereafter terminated. Dual then filed a complaint for unfair labor practice, illegal dismissal, non-payment of 13 th month and separation pay, and damages before the NLRC, Regional Arbitration Branch of Cebu City. The Labor Arbiter found that respondents termination was without valid cause and ruled that respondent is entitled to separation pay. NLRC dismissed Duals complaint for lack of merit. CA reversed NLRC decision and affirmed the Labor Arbiter Issue: Whether the Court of Appeals erred in ruling that respondent was illegally dismissed. HELD: After a full review of the case, SC reversed the CA decision. Facts that based SC reversal: 1) The receipt which bears his name NITO was printed at 22:40 (10:40 p.m.) or 1 hour and 40 minutes after the guests had left at 9:00 p.m 2) respondents claim that he received P3,100.00 only and gave Mission P64.00 as change is not shown by the receipt that he issued. The issued receipt does not show that change was given. 3) The allegation of Dual that six (6) dinner sets were indeed cancelled as evidenced by the dishes he allegedly saw in the utensil station is negated by the testimonies of the kitchen staff (Chef Armand Galica, Butcher Alegrado and Dessert-in-charge John Marollano) that twelve (12) set meals were served and consumed. 4) The standard operating procedure of Maribago dictates that in cases of cancellation, the order slip has to be countersigned by the attending waiter (which in this case should have been Chief Waiter Hiyas) but such was not so in this case. The law requires that an employer shall not terminate the services of an employee except for a just or authorized cause. Otherwise, an employee unjustly dismissed from work is entitled to reinstatement and full backwages. However, in this case, petitioners evidence proved that Dual is guilty of dishonesty and of stealing money entrusted to him as cashier. Respondents acts constitute serious misconduct which is a just cause for termination under the law. Theft committed by an employee is a valid reason for his dismissal by the employer. G.R. No. 160506 June 6, 2011 JOEB M. ALIVIADO, ARTHUR CORPUZ, et.al. vs.PROCTER & GAMBLE PHILS., INC., and PROMM-GEM INC. FACTS: There were 80 employees involved in the suit. Petitioners worked as merchandisers of P&G from various dates, allegedly starting as early as 1982. They all individually signed employment contracts with either Promm-Gem or SAPS for periods of more or less five months. They were assigned at different outlets, supermarkets and stores where they handled all the products of P&G. They received their wages from PrommGem or SAPS. SAPS and Promm-Gem imposed disciplinary measures on erring merchandisers for reasons such as habitual absenteeism, dishonesty or changing day-off without prior notice. P&G is principally engaged in the manufacture and production of different consumer and health products, which it sells on a wholesale basis to various supermarkets and distributors.To enhance consumer awareness and acceptance of the products, P&G entered into contracts with Promm-Gem and SAPS for the promotion and merchandising of its products In December 1991, petitioners filed a complaint against P&G for regularization, service incentive leave pay and other benefits with damages. The complaint was later amended to include the matter of their subsequent dismissal. Ruling of the Labor Arbiter There was no employer-employee relationship between petitioners and P&G. He found that the selection and engagement of the petitioners, the payment of their wages, the power of dismissal and control with respect to the means and methods by which their work was accomplished, were all done and exercised by Promm-Gem/SAPS. He further found that Promm-Gem and SAPS were legitimate independent job contractors. Ruling of the NLRC DISMISSED and the decision appealed from AFFIRMED. Petitioners filed a motion for reconsideration but the motion was denied in the November 19, 1998 Resolution. Ruling of the Court of Appeals AFFIRMED with the MODIFICATION that respondent Procter & Gamble Phils., Inc. is ordered to pay service incentive leave pay to petitioners. Petitioners filed a motion for reconsideration but the motion was also denied. ISSUES: 1. WON serious misconduct was committed to warrant the dismissal of the employees concerned. 2. WON the plaintiffs are entitled to damages. RULING: 1. In the instant case, the termination letters given by Promm-Gem to its employees uniformly specified the cause of dismissal as grave misconduct and breach of trust, as follows: This informs you that effective May 5, 1992, your employment with our company, Promm-Gem, Inc. has been terminated. We find your expressed admission, that you considered yourself as an employee of Procter & Gamble Phils., Inc. and assailing the integrity of the Company as legitimate and independent promotion firm, is deemed as an act of disloyalty prejudicial to the interests of our Company: serious misconduct and breach of trust reposed upon you as employee of our Company which constitute just cause for the termination of your employment.

Misconduct has been defined as improper or wrong conduct; the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, unlawful in character implying wrongful intent and not mere error of judgment. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. To be a just cause for dismissal, such misconduct (a) must be serious; (b) must relate to the performance of the employees duties; and (c) must show that the employee has become unfit to continue working for the employer. In other words, in order to constitute serious misconduct which will warrant the dismissal of an employee under paragraph (a) of Article 282 of the Labor Code, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been performed with wrongful intent.48 In the instant case, petitioners-employees of Promm-Gem may have committed an error of judgment in claiming to be employees of P&G, but it cannot be said that they were motivated by any wrongful intent in doing so. As such, we find them guilty of only simple misconduct for assailing the integrity of Promm-Gem as a legitimate and independent promotion firm. A misconduct which is not serious or grave, as that existing in the instant case, cannot be a valid basis for dismissing an employee. Meanwhile, loss of trust and confidence, as a ground for dismissal, must be based on the willful breach of the trust reposed in the employee by his employer. Ordinary breach will not suffice. A breach of trust is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.49 Loss of trust and confidence, as a cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility or of trust and confidence. As such, 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. And, in order to constitute a just cause for dismissal, the act complained of must be work-related and must show that the employee is unfit to continue to work for the employer.50 In the instant case, the petitioners-employees of Promm-Gem have not been shown to be occupying positions of responsibility or of trust and confidence. Neither is there any evidence to show that they are unfit to continue to work as merchandisers for Promm-Gem. All told, we find no valid cause for the dismissal of petitioners-employees of Promm-Gem. While Promm-Gem had complied with the procedural aspect of due process in terminating the employment of petitionersemployees, i.e., giving two notices and in between such notices, an opportunity for the employees to answer and rebut the charges against them, it failed to comply with the substantive aspect of due process as the acts complained of neither constitute serious misconduct nor breach of trust. Hence, the dismissal is illegal. 2. Moral and exemplary damages are recoverable where the dismissal of an employee was attended by bad faith or fraud or constituted an act oppressive to labor or was done in a manner contrary to morals, good customs or public policy. With regard to the employees of Promm-Gem, there being no evidence of bad faith, fraud or any oppressive act on the part of the latter, we find no support for the award of damages. As for P&G, the records show that it dismissed its employees through SAPS in a manner oppressive to labor. The sudden and peremptory barring of the concerned petitioners from work, and from admission to the work place, after just a one-day verbal notice, and for no valid cause bellows oppression and utter disregard of the right to due process of the concerned petitioners. Hence, an award of moral damages is called for. Attorneys fees may likewise be awarded to the concerned petitioners who were illegally dismissed in bad faith and were compelled to litigate or incur expenses to protect their rights by reason of the oppressive acts of P&G. Lastly, under Article 279 of the Labor Code, an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, inclusive of allowances, and other benefits or their monetary equivalent from the time the compensation was withheld up to the time of actual reinstatement. Hence, all the petitioners, having been illegally dismissed are entitled to reinstatement without loss of seniority rights and with full back wages and other benefits from the time of their illegal dismissal up to the time of their actual reinstatement. G.R No. 149433 The Coca- Cola Export Corporation vs. Clarita P. Gacayan FACTS: Respondent Gacayan was the Senior Financial Accountant of the petitioner from October 8, 1895 to April 6, 1995 and was dismissed on the ground of alleged loss of trust and confidence. One of the benefits enjoyed by the respondent was the reimbursement of meal allowances incurred during overtime work with Php 150 as the maximum amount per meal. Upon investigation of the petitioner, it was found out that the meal receipts incurred by respondent during the period from July to November 1994 were altered in the date or items purchased which was deemed a violation of company policy. During the formal investigation, Cola- Cola informed the respondent of the alleged fraudulent alterations while Gacayan denied any personal knowledge in the commission of the alterations. Subsequently, in a letter dated April 4, 1995, Coca Cola dismissed the services of the Gacayan because of the alleged gross violation of the petitioners policy. Thereafter, Gacayan filed a complaint for illegal dismissal against Coca-Cola. The Labor Arbiter decided in favor of the latter on the ground that the alterations made by the petitioner reflect her questionable integrity and honesty which was affirmed by the NLRC. However, CA overturned the decision and ordered the reinstatement of the Gacayan without loss of seniority and with full backwages. ISSUE: Whether or not the acts of respondent constitute as serious misconduct, thus, giving cause for her termination? HELD: No. Misconduct has been defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, wilful character, and implies wrongful intent and not mere error of judgment. Thus, for misconduct or improper behaviour to be a just cause for dismissal, (a) it must be serious; (b) must relate to the performance of the employees duties; and (c) must show that the employee has become unfit to continue working for the employer. It is well to stress that in order to constitute serious misconduct serious misconduct which will warrant the dismissal of an employee, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been done with wrongful intent. Such is, however, lacking in the instant case. Coca-cola alleges that under its rules and regulations, respondents submission of fraudulent items of expense is punishable by dismissal. However, petitioners rules cannot preclude the State from inquiring whether the strict and rigid application or interpretation thereof would be harsh to the employee. Even when an employee is found to have transgressed the employers rules, in the actual imposition of penalties upon the erring employee, due consideration must still be given to his length of service and the number of violations committed during his employ. Respondent had no previous record in her 9 years of service; this would have been her first offense. Respondent had also been a recipient of various commendations attesting to her competence and diligence in the performance of her duties, not only from petitioner, but also from petitioners counterparts in Poland and Thailand. Respondent also countered that she acted in good faith and with no wrongful intent when she submitted the receipts in support of her claim for reimbursement of meal allowance. According to respondent, only the dates or items were altered on the receipts. She did not claim more than what was allowed as meal expense for the days that she rendered overtime work. She believed that the submission of receipts was simply for records-keeping, since she actually rendered overtime work on the dates that she claimed for meal allowance. All told, this Court holds that the penalty of dismissal imposed on respondent is unduly oppressive and disproportionate to the infraction which she committed. G.R. No. 173930 September 15, 2010 SALVADOR O. ECHANO, JR. vs. LIBERTY TOLEDO FACTS: The case involves charges of grave misconduct and conduct prejudicial to the service filed by the City Treasurer of Manila (Toledo) against a cashier of a government-owned bank-Land Bank-Taft Avenue Branch (Echano). Echano allowed one of the Banks clients, Perez, to deposit into her account second-endorsed checks. These checks were not however payable to Perez but to the Office of the City Treasurer of Manila. Echano claimed that he was unaware that the checks deposited by Perez are payable to the Office of the City Treasurer of Manila. After trial, the Office of the Ombudsman found Echano guilty of grave misconduct and dishonesty. The Penalty of dismissal was imposed.

ISSUE: Whether the conduct of Echano (a bank cashier who allowed an unauthorized person to deposit to the latters own account, a check payable to another) constitutes grave misconduct. HELD: Echano was guilty of grave misconduct. Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful behavior or gross negligence by a public officer. As differentiated from simple misconduct, in grave misconduct the elements of corruption, clear intent to violate the law or flagrant disregard of established rule, must be manifest. As Acting Branch Cashier, Echano was charged with responsibility of handling the banks daily transactions which could run into large amounts. The evidence clearly shows that Echano took light of such responsibility and flagrantly disregarded established banking rules and practices. G.R. No. 171115, August 9, 2010 NAGKAKAISANG LAKAS NG MANGGAGAWA SA KEIHIN (NLMK-OLALIA-KMU) and HELEN VALENZUELA, vs. KEIHIN PHILIPPINES CORPORATION Facts: Petitioner Valenzuela was a production associate in respondent Keihin Philippines Corporation, a company engaged in the production of intake manifold and throttle body used in motor vehicles manufactured by Honda. Keihin used to subject all its employees to reasonable search before they leave the company premises. On September 5 2003, the lady guard on duty inspected Helens bag and she found a packing tape inside her bag. It was deliberately taken by Helen believing that it was not useful anymore for KEIHIN. On September 6, 2003, respondent company issued a show cause notice7 to Helen accusing her of violating F.2 of the companys Code of Conduct, which says, "Any act constituting theft or robbery, or any attempt to commit theft or robbery, of any company property or other associates property. Penalty: D (dismissal) Helen was directed to explain in writing why no disciplinary action should be taken against her. In her response Helen admitted such but did not reckon that respondent company would terminate her services. Keihin later decided to terminate her services. On Oct. 2003 Helen filed a complaint against respondent For illegal dismissal, backwages, 13th month etc. She act of taking the packing tape did not constitute serious misconduct, because the same was done with no malicious intent. Helen admitted that she took the packing tape, petitioners claimed that her punishment was disproportionate to her infraction. Keihin, on the other hand, maintained that Helen was guilty of serious misconduct because there was a deliberate act of stealing from the company. Respondent company also claimed that motive and value of the thing stolen are irrelevant in this case. The LA ruled in favor of respondent, there was no illegal dismissal ,the penalty was not disproportionate and due process was observed. The Nlrc affirmed. In the CA the union (nagkakaisang) filed a petition for certiorari. It was however dismissed for it is not filed by the Indispensable party Helen. Issue: Whether or not serious misconduct could be attributed to petitioner valenzuela Held: Yes, CA decision affirmed as to procedure and merits. Helen took the packing tape with the thought that she could use it for her own personal purposes. When Helen was asked to explain in writing why she took the tape, she stated, "Kumuha po ako ng isang packing tape na gagamitin ko sa paglilipat ng gamit ko sa bago kong lilipatang bahay." In other words, by her own admission, there was intent on her part to benefit herself when she attempted to bring home the packing tape in question. Also there has been several cases of theft in the company prompting respondent to be strict and issued memorandai mplementing an intensive inspection procedure and reminding all employees that those who will be caught stealing and performing acts of vandalism will be dealt with in accordance with the companys Code of Conduct. Helens claim that the penalty is disproportionate is also rejected the case of Caltex is not applicable in that case the employee has worked for eight years, Helen was only on her 2nd year. . And what further distinguishes the instant case from Caltex is that respondent company was dealing with several cases of theft, vandalism, and loss of company and employees property when the incident involving Helen transpired. As to due process The employer must furnish the employee with two written notices before termination of employment can be legally effected: (a) a notice apprising the employee of the particular acts or omissions for which his dismissal is sought, and (b) a subsequent notice informing the employee of the employers decision to dismiss him. Respondent company furnished Helen a show-cause notice dated September 6, 2003 We find that such notice sufficiently informed Helen of the charge of theft of company property against her. G.R. No. 172589, August 8, 2010. Jeffrey Nacague vs. Sulpicio Lines, Inc., FACTS: On 15 June 1995, respondent Sulpicio Lines, Inc. (Sulpicio Lines) hired Nacague as hepe de viaje or the representative of Sulpicio Lines on board its vessel M/V Princess of the World (the ship). On 25 January 2003, Sulpicio Lines received an anonymous letter reporting the use of illegal drugs on board the ship. A house keeper also filed a report regarding a drug paraphernalia found in one of the rooms. Sulpicio Lines sent a notice of investigation to Nacague informing him of the charges against him for use of illegal drugs and threatening a co-employee. Petitioner and other crew members were subjected to random drug test in S.M. LazoMedical Clinic The result of the random drug test revealed that Nacague was positive for methamphetamine hydrochloride or shabu. On 20 February 2003, Sulpicio Lines subjected Nacague to a formal investigation. Nacague denied using illegal drugsand went to Chong Hua Hospital in Cebu City to undergo a voluntary drug test. The drug test with Chong Hua Hospital yielded a negative result. Nacague submitted this test result to Sulpicio Lines.However, on 7 March 2003, Sulpicio Lines sent a memorandum to Nacague terminating him from the service. Petitioner then filed a complaint against illegal suspension, illegal dismissal and for reinstatement with backwages. LA agreed with Nacague that the drug test result from S.M. Lazo Clinic was questionable because the clinic is not accredited by the Dangerous Drug Board and not under its supervision. The Labor Arbiter gave more weight to the drug test performed by Chong Hua Hospital because it was accredited by the Dangerous Drug Board. The Labor Arbiter said that doubts must be resolved in favor of the employee. The Labor Arbiter also ruledthat reinstatement is no longer viable due to the strained relations between Nacague and Sulpicio Lines and, thus, awarded separation pay to Nacague. NLRC reversed the decision of the LA stating that the dismissal is proper since he is guilty of misconduct and loss of trust and confidence and that there is a presumption that S.M. Lazo Clinic is an accredited drug testing center and that it was incumbent upon Nacague to show otherwise. CA affirmed the decision of the NLRC. ISSUE: WON the dismissal of Nacague is valid. HELD: NO. Under Article 279 of the Labor Code, an employer may terminate the services of an employee for just causes or for authorized causes. Furthermore, under Article 277(b) of the Labor Code, the employer must send the employee who is about to be terminated, a written notice stating the causes for termination and must give the employee the opportunity to be heard and to defend himself. Thus, to constitute valid dismissal from employment, two requisites must concur: (1) the dismissal must be for a just or authorized cause; and (2) the employee must be afforded an opportunity to be heard and to defend himself. The NLRC and the Court of Appeals ruled that Sulpicio Lines validly terminated Nacagues employment because he was found guilty of using illegal drugs which constitutes serious misconduct and loss of trust and confidence. However, we find thatSulpicio Lines failed to clearly show that Nacague was guilty of using illegal drugs. We agree with the Labor Arbiter that the lack of accreditation of S.M. LazoClinic made its drug test results doubtful. Section 36 of R.A. No. 9165 provides that drug tests shall be performed only by authorized drug testing centers. Moreover, Section 36 also prescribes that drug testing shall consist of both the screening test and the confirmatory test.

The law is clear that drug tests shall be performed only by authorized drug testing centers. In this case, Sulpicio Lines failed to prove that S.M. Lazo Clinic is an accredited drug testing center. SulpicioLines did not even deny Nacagues allegation that S.M. Lazo Clinic was not accredited. Also, only a screening test was conducted to determine if Nacague was guilty of using illegal drugs. Sulpicio Lines did not confirm the positive result of the screening test with a confirmatory test. Sulpicio Lines failed to indubitably prove that Nacague was guilty of using illegal drugs amounting to serious misconduct and loss of trust and confidence. Sulpicio Lines failed to clearly show that it had a valid and legal cause for terminating Nacagues employment. When the alleged valid cause for the termination of employment is not clearly proven, as in this case, the law considers the matter a case of illegal dismissal. G.R. No. 171434 . April 23, 2010 National Power Corporation, Petitioner vs. Alan A. Olandesca, Respondent. PERALTA, J.: FACTS: Respondent Alan A. Olandesca was first employed by petitioner as an Extension Aide and was assigned at the Tiwi Watershed. Thereafter, he held various positions in petitioner's corporation, which included the following: Senior Forest Ranger, Extension Services Officer, Watershed Management Officer, Procurement Officer B, Senior Property/Supply Officer, Senior Property Officer. At the time of the alleged commission of acts of dishonesty, respondent held the position of Supervising Property Officer of the Angat River Hydroelectric Plant. As Supervising Property Officer, respondent had custody of all the materials and supplies stored at the property office of Angat River HEP and was accountable for those properties which were turned over to him under his Property Accountability Report. In addition, respondent was also tasked to monitor the proper documentation of the receipt and release of all items, materials, and supplies in his custody. It was petitioners policy that the receipt and release of any item from the property office be covered by a Warehouse Requisition Slip (WRS) and duly approved by higher authorities. On several occasions, from November 17, 1996 to January 25, 1997, respondent withdrew several items from the warehouse/property office, without the required WRS. Among these items were barbed wires, interlink wires, nails, and G.I. wires. Upon respondent's directive, all items he withdrew from the property office were duly recorded on the security logbook of the security guard on duty. Thereafter, respondent used the foregoing items to fence two (2) development areas which are part of the NPC Angat Watershed Areas and Reservations. The management team held a meeting, wherein the issue of respondent's withdrawal of items from the property office was raised. Teodulo V. Largo, Section Chief of the Angat River HEP, filed with the Officer-In-Charge of the Angat River HEP a Complaint against respondent. After evaluating the complaint, Lino S. Cruz, petitioners Vice-President from the Northern Luzon Regional Center, administratively charged respondent with Acts of Dishonesty/Getting Supplies, Materials for Personal Use/Acts Prejudicial to the Interest of the Corporation. Petitioner's Regional Board of Inquiry and Discipline (RBID) heard the case. Thereafter, the RBID issued its findings and recommended that respondent suffer the penalty of dismissal with forfeiture of all cash and non-cash benefits due him by virtue of his employment. ISSUE: Whether or not respondent Olandesca commited an act of dishonesty which would warrant his dismissal from work. HELD: NO. The Supreme Court agrees with the factual findings of the CA that respondent did not commit dishonesty. It is not disputed that respondent took several materials and supplies from petitioner's warehouse without the approved WRS. However, this should not be construed as dishonesty on the part of respondent that would warrant his dismissal from the service for the following reasons: 1) The withdrawals of the supplies were duly recorded in the security guard's logbook. If respondent intended to defraud petitioner, he could have easily taken items from the warehouse without having them recorded as he was then the Supervising Property Officer who had free access to the supplies. Allowing the recording to be done in the logbook indicates his lack of intent to deceive or defraud petitioner.

2) 3) 4)

Right after withdrawing the items, respondent replaced them on his own initiative, without anyone instructing him to do so. This act negates his intent to defraud petitioner. There is no clear showing that respondent misappropriated or converted the items for his own personal use or benefit. No competent and sufficient evidence on record to show that there was intent to gain on the part of the respondent, considering that the materials and supplies taken by him were used in fencing the watershed and reservation area of petitioner. It also found that respondent acted in good faith and there was no undue injury to petitioner as the materials and supplies were used in the petitioner's premises. Thus, the company itself benefited from the conduct of the respondent.

Nonetheless, although the respondent did not commit an overt act of dishonesty, he is not exonerated from liability. It was an established company procedure that before the materials can be taken out from the warehouse, the issuance of a WRS is an indispensable requirement. Respondent, by taking the said properties without the approved WRS, violated reasonable office rules and regulations and since this is the first offense of respondent in his more than 16 years of service, the appropriate penalty to be imposed against him is REPRIMAND instead of dismissal. G.R. No. 162017 April 23, 2010 CALTEX (PHILIPPINES), INC., WILLIAM P. TIFFANY, E.C. CAVESTANY, and E.M. CRUZ vs. HERMIE G. AGAD and CALTEX UNITED SUPERVISORS' ASSOCIATION Facts: Petitioner Caltex Philippines, Inc. (Caltex) employed respondent Hermie G. Agad (Agad) as Depot Superintendent-A on a probationary basis for six months. On 28 February 1984, Agad became a regular employee. After Agad had served for two years since 1990 as Superintendent of the Tacloban Bulk Depot (Depot) in Leyte, Caltex transferred Agad to Bauan Bulk Depot in Batangas effective 16 May 1992. To transfer his belongings from Leyte to Batangas, Agad secured the carpentry services of Alfredo Delda (Delda), the owner of A.A. Delda Engineering Services (Delda Services) for the construction of two crates. Agad paid Delda P15,500, evidenced by Official Receipt and submitted the receipt and Caltex reimbursed him the said amount. Caltex conducted its regular audit of employees account and expenses. The company auditor of Caltex verified the crating expense incurred by Agad with Delda. Delda alleged that he was forced by Agad to issue the official receipt in order to get a favorable recommendation from the incoming superintendent of the Depot. In another audit report, the company auditor declared that 190 pieces of 11 kg. liquefied petroleum gas (LPG) cylinders from the Depot were allegedly withdrawn when Agad was still depot superintendent In a Confidential Memorandum, Agad was informed of his dismissal on the grounds of serious misconduct and loss of trust and confidence. The LA held that there were no just causes for Agads termination of employment. The NLRC reversed the decision of the LA and held that there existed just causes which justified Agads dismissal. Agad filed a Motion for Reconsideration which was denied. He then filed a petition for certiorari under Rule 65 with the CA for the nullification of the decision of the NLRC. The CA modified the judgment of the NLRC and ruled in favor of Agad. Caltex filed a Motion for Reconsideration which was denied. Hence, the instant petition. Issue: Whether or Not Caltex legally terminate Agads employment on just causes Ruling: YES. The findings of the CA and National Labor Relations Commission (NLRC) establish the following: (1) Agads request for withdrawal of the 190 cylinders of LPG as stated in a Memorandum dated 12 February 1992 cannot be given credence since the Memorandum pertains to the replacement of the scrap materials due to Boy Bato consisting of 3,000 kilograms of black iron plates and not to the subject LPG cylinders; (2) Agad did not observe Caltexs rules and regulations when he transferred the said cylinders to Millanes compound without the RMRD form as required under Caltexs Field Accounting Manual; (3) Agad gave specific instructions to Millanes to sell the cylinders without bidding to third parties in violation of company rules; (4) Agad failed to submit the periodic inventory report of the LPG cylinders to the

accounting department; (5) Agad did not remit the proceeds of the sale of the LPG cylinders; and (6) even if considered as scrap materials, the LPG cylinders still had monetary value which Agad cannot appropriate for himself without Caltexs consent. Considering these findings, it is clear that Agad committed a serious infraction amounting to theft of company property. This act is akin to serious misconduct or willful disobedience by the employee of the lawful orders of his employer in connection with his work, a just cause for termination of employment recognized under Article 282(a) of the Labor Code. Misconduct has been defined as a 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. To be serious, the misconduct must be of such grave and aggravated character. G.R. No. 186019 March 29, 2010 WHITE DIAMOND TRADING CORPORATION and/or JERRY UY and JESSIE UY vs. NATIONAL LABOR RELATIONS COMMISSION, NORLITO ESCOTO, MARY GRACE PASTORIL and MARIA MYRNA OMELA BRION, J.: Facts: The petitioner White Diamond Trading Corporation (the company) is engaged in buying and selling second hand motor vehicles. The company employed Maria Myrna Omela (Omela) in 1999 as assistant secretary, Mary Jane Pastoril (Pastoril) in 2000 as secretary, and Norlito Escoto (Escoto) in 2001 as salesman. On February 28, 2004, Escoto consummated the sale of a Toyota Town Ace to Teodoro Abejar Aquino (Aquino) for P200,000.00. While the purchase price indicated in the original copy of the receipt issued to Aquino was P200,000.00, it was only P190,000.00 in the duplicate copy that remained with the company. The receipt was issued by Omela to Aquino after he gave Omela P200,000.00 in cash, which amount Aquino counted in the presence of Pastoril. Pastoril then took out the deed of sale and handed it to Aquino. The deed showed that the consideration for the sale to be P190,000.00 On March 8, 2004, the company terminated the employment of Escoto, Omela and Pastoril. On March 10, 2004, the three employees filed a complaint for illegal dismissal against the company and its two top officers. The Company alleged that the petitioners stole the company fund. Labor Arbiter dismissed the complaint for lack of merit in her decision of September 30, 2004. The arbiter found that Escoto, Omela and Pastoril defrauded the company through their concerted action. The labor arbiter found that they made it appear in the company records that Aquino bought the Toyota Town Ace for P190,000.00, but charged Aquino and issued him a receipt for P200,000.00. On appeal, the NLRC affirmed the labor arbiter's ruling with modification. While the NLRC was convinced that the company had validly dismissed Escoto and Omela for having effected the discrepancies in sales amount of the Toyota Town Ace, it found that no contributory act was shown from Pastoril who, in Aquinos Sinumpaang Salaysay, merely handed him the Deed of Sale. It therefore ruled that Pastoril's dismissal was without just cause. The NLRC denied the companys motion for reconsideration, thus, paving the way for the elevation of the case to the CA . Appellate Court dismissed the petition for lack of merit. Issue: Whether or not Pastoril was illegally dismissed.

Ruling: The Court find that Pastoril was not illegally dismissed. It finds that Pastoril was as actively involved as Escoto and Omela in the sale of the Toyota Town Ace that resulted in a loss to the company. All three participated in making the company believe that Aquino bought the Toyota Town Ace for P190,000.00 when in fact, Aquino paid P200,000.00 for the vehicle. The company was completely in the dark about the actual purchase price until it learned about the irregularity and commenced an investigation. Pastorils involvement in the questionable transaction was much more than handing over to Aquino his copy of the deed of sale. The payment of the purchase price, the issuance of the receipt and the handing of the deed of sale to Aquino were not separate isolated acts. They occurred in one continuous logical sequence with the players in close proximity with one another. Under these circumstances, to say that Pastoril merely handed over the deed of sale to Aquino without even looking at the document or knowing what it contained, and without knowing what was actually happening, can hardly be believed. The deed of sale did not appear out of thin air; somebody in the company prepared the document. Given the positions of the three dismissed employees in the company and based on the sequence of events, it could only be Pastoril, the secretary, who prepared the deed of sale, not Omela. To reiterate, Pastoril was not an innocent participant in the fraudulent sale of the companys Toyota Town Ace. She acted in concert with Escoto and Omela in the transaction that defrauded their employer in the amount of P10,000.00 the difference in the vehicles actual price of P200,000.00 paid by the buyer, and the price (P190,000.00) entered in the duplicate purchase receipt and in the deed of sale. Pastoril prepared and issued the deed of sale indicating that the vehicle was sold for P190,000.00, although she knew that the buyer was being charged P200,000.00 for the vehicle. Under these facts, there was a conspiracy where every participant had made significant contributory acts. Therefore, there was a valid dismissal against Pastoril. GR No. 164016, March 15, 2010 Reno Foods Inc. vs. Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan FACTS: Petitioner RENO FOODS (RENO) is a manufacturer of canned meat products of which Vicente Khu is the president and is being sued in that capacity. Respondent Nenita Capor (Capor) was an employee of Reno Foods until her dismissal on October 27, 1998. It is a standard operating procedure of petitioner-company to subject all its employees to reasonable search of their belongings upon leaving the company premises. On October 19, 1998, the guard on duty found six Reno canned goods wrapped in nylon leggings inside Capors fabric clutch bag. Reno accorded Capor several opportunities to explain her side often with the assistance of the union officers of NLM-Katipunan. Unfortunately, Reno terminated Capor. (NLM) Katipunan filed on behalf of Capor a complaint for illegal dismissal and money claims against petitioners. The complaint prayed that Capor be paid her full backwages as well as moral and exemplary damages. LA found Capor guilty of serious misconduct which is a just cause for termination (Art 232 of the Labor Code). he Labor Arbiter found that theft of company property is tantamount to serious misconduct; as such, Capor is not entitled to reinstatement and backwages, as well as moral and exemplary damages. Moreover, the Labor Arbiter ruled that consistent with prevailing jurisprudence, an employee who commits theft of company property may be validly terminated and consequently, the said employee is not entitled to separation pay. On appeal, NLRC affirmed the Labor Arbiters decision but with modification granting an award of financial assistance in the form of separation pay equivalent to one-half month pay for every year of service. (Both filed MFRs and both were denied). The CA affirmed the NLRCs award of financial assistance to Capor. ISSUE: Whether the grant of financial assistance to an employee, who was validly dismissed for theft of company property, is correct. HELD: NO. SC upheld Labor Arbiters decision. The law is clear. Separation pay is only warranted when the cause for termination is not attributable to the employees fault, such as those provided in Articles 283 and 284 of the Labor Code, as well as in cases of illegal dismissal in which reinstatement is no longer feasible. It is not allowed when an employee is dismissed for just cause, such as serious misconduct. Jurisprudence has classified theft of company property as a serious misconduct and denied the award of separation pay to the erring employee. We see no reason why the same should not be similarly applied in the case of Capor. She attempted to steal the property of her long-time employer. For committing such misconduct, she is definitely not entitled to an award of separation pay. Length of service and a previously clean employment record cannot simply erase the gravity of the betrayal exhibited by a malfeasant employee. Length of service is not a bargaining chip that can simply be stacked against the employer. After all, an employer-employee relationship is symbiotic where both parties benefit from mutual loyalty and dedicated service. If an employer had treated his employee well, has accorded him fairness and adequate compensation as determined by law, it is only fair to expect a long-time employee to return such fairness with at least some respect and honesty. Thus, it may be said that betrayal by a long-time employee is more insulting and odious for a fair employer. On the date that the appellate court issued its Decision, Capor filed a Manifestation informing the CA of her acquittal in the charge of qualified theft. We held that a criminal conviction is not necessary to find just cause for employment termination. Otherwise stated, an employees acquittal in a criminal case, especially one that is grounded on the existence of reasonable doubt, will not preclude a determination in a labor case that he is guilty of acts inimical to the employers interests.

WILLFUL DISOBEDIENCE 7

G.R. No. 171189 March 9, 2011 LORES REALTY ENTERPRISES, INC., LORENZO Y. SUMULONG III vs. VIRGINIA E. PACIA MENDOZA, J.: FACTS: In 1982, Pacia was hired by LREI. At the time of her dismissal, she was the assistant manager and OIC of LREIs Accounting Department under the Finance Administrative Division. On October 28, 1998, LREIs acting general manager, petitioner Sumulong, through Ms. Julie Ontal, directed Pacia to prepare Check Voucher No. 16477 worth P150,000.00 as partial payment for LREIs outstanding obligation to the Bank of the Philippine Islands-Family Bank (BPI-FB). Pacia did not immediately comply with the instruction. After two repeated directives, Pacia eventually prepared Check No. 0000737526 in the amount of P150,000.00. Later, Sumulong again directed Pacia to prepare Check Voucher No. 16478 in the amount of P175,000.00 to settle the balance of LREIs outstanding indebtedness with BPI-FB. Pacia once again was slow in obeying the order. Due to the insistence of Sumulong, however, Pacia eventually prepared Check No. 0000737527 in the amount of P175,000.00. The next day, Sumulong issued a memorandum ordering Pacia to explain in writing why she refused to follow a clear and lawful directive. Pacia replied in writing and explained that her initial refusal to prepare the checks was due to the unavailability of funds to cover the amounts and that she only wanted to protect LREI from liability under the Bouncing Checks Law. On November 6, 1998, Pacia received a notice of termination stating, among others, that she was being dismissed because of her willful disobedience and their loss of trust and confidence in her. Pacia then filed a Complaint for Unfair Labor Practice due to Harassment, Constructive Dismissal, Moral and Exemplary Damages against LREI and Sumulong. Subsequently, Pacia filed an Amended Complaint to include the charges of illegal dismissal and non-payment of salaries. RULINGS OF LA/NLRC/CA LA rendered a decision finding that the dismissal of Pacia was for a just and valid cause. On appeal, the NLRC reversed the LAs Decision and found LREI and Sumulong guilty of illegal dismissal. NLRC opined that careful perusal of the records reveals that complainants actuation herein cannot in any manner be construed as an act of insubordination. Neither can we classify it as an example of wilful disobedience by the employee of the lawful order of her employer in connection with her work. Records show that Check No. 0000737527 in the amount of P175,000.00 bounced as shown by the Return Checks Advice issued by the BPI family Bank on 3 November 1998. The above evidence clearly reveals that there were no sufficient funds to cover the check which the acting Manager directed complainant to prepare. However, complainant nevertheless prepared Check Nos. 737527 and 737526 on 28 October 1998 and also corrected Check Vouchers Nos. 16477 and 16478 on 28 October 1998. NLRC takes note and gives due merit to complainants explanation in her reluctance to issue checks against insufficient funds which was to protect the company and its signatories from liabilities resulting from issuance of bounced checks. Complainants initial refusal was good intentioned. Dissatisfied, LREI and Sumulong elevated the case to the CA by way of a petition for certiorari (Rule 65) asserting grave abuse of discretion on the part of the NLRC in reversing the LAs finding. CA found no merit in the petition and dismissed it. Hence, the petition. CONTENTIONS LREI and Sumulong argue that Pacias refusal to obey the directives of Sumulong was a manifest intent not to perform the function she was engaged to discharge. They are of the position that Pacias claim of good intentions in refusing to prepare the checks was a mere afterthought. They stress that the instruction to prepare a check despite the absence of sufficient funds to cover the same was, nevertheless, a lawful order. On the other hand, Pacia counters that her initial reluctance to prepare the checks, which she knew were not sufficiently funded, cannot be characterized as wrongful or perverse attitude. In her view, the directive to prepare the checks at the time it was not sufficiently funded was not a lawful order contemplated in Article 282 of the Labor Code. It was an unlawful directive because it asked for the preparation of a check despite the fact that the account had no sufficient funds to cover the same. She further explained that she did not comply with the directive in order to protect Sumulong and LREI from any liability in the event that the checks would be dishonored upon presentment for payment for insufficiency of funds. ISSUE: Whether or not Pacias dismissal was justified on the ground of willful disobedience. HELD: No. The offense of willful disobedience requires the concurrence of 2 requisites: 1. the employees assailed conduct must have been willful, that is characterized by a wrongful and perverse attitude; and 2. the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. The Court finds nothing unlawful in the directive of Sumulong to prepare checks in payment of LREIs obligations. The availability or unavailability of sufficient funds to cover the check is immaterial in the physical preparation of the checks. Pacias initial reluctance to prepare the checks, however, which was seemingly an act of disrespect and defiance, was for honest and well intentioned reasons. Protecting LREI and Sumulong from liability under the Bouncing Checks Law was foremost in her mind. It was not wrongful or willful. Neither can it be considered an obstinate defiance of company authority. The Court takes into consideration that Pacia, despite her initial reluctance, eventually did prepare the checks on the same day she was tasked to do it. The Court also finds it difficult to subscribe to LREI and Sumulongss contention that the reason for Pacias initial reluctance to prepare the checks was a mere afterthought considering that check no. 0000737527 under one of the check vouchers she reluctantly prepared, bounced when it was deposited. Pacias apprehension was justified when the check was dishonored. This clearly affirms her assertion that she was just being cautious and circumspect for the companys sake. Thus, her actuation should not be construed as improper conduct. G.R. Nos. 163293 & 163297, December 8, 2010 EQUITABLE PCI BANK (Now Banco De Oro Unibank, Inc. v. CASTOR A. DOMPOR DEL CASTILLO, J.: Facts: On February 7, 1997, respondent Dompor who was assigned as branch manager of PCIBs Makati Cinema Branch (now BDO) received a Memo dated January 7, 1997 dismissing him from employment on the grounds of serious policy violations, willful breach of trust, and loss of confidence, with further sanction of forfeiture of benefits and contingent restitution of the total amount of P6,712,756.61 including costs. It appears that respondent allowed Luz Fuentes (Fuentes), a client-depositor of PCIB Makati Cinema Branch who opened checking account no. 0672-04408-0 on July 14, 1995, to deposit several second-endorsed PLDT dividend checks beginning the last quarter of 1995. A special audit was then conducted from August 14-21, 1996. The audit report showed the irregularity of the transactions involving the account of Fuentes, to wit: the checks were fraudulently negotiated in favor of Fuentes; that the transactions, which were inadequately documented, have exposed the bank to probable losses and could make the bank liable under its endorsement as the checks drawer may claim reimbursement on the ground of wrong payment or forgery. Prior to the dismissal, respondent was placed under preventive suspension pending investigation. In a Memo dated October 23, 1996, respondent was asked to explain in writing why no disciplinary action should be taken against him for committing the following serious policy violations: 1) Failure to comply with PCIB Accounting Procedure Manual (APM) No. 26B.5A.1b which states that checks payable to corporations, societies, firms, etc. for credit to a personal account and/or checks with unusual endorsement should not be accepted; 2) Allowing/approving the acceptance of second-endorsed checks despite Ayala-Makati Area managements instruction to stop accepting this type of deposits on June 27, 1996; and 3) Failure to comply with Credit Policy Supervision (CPS) No. 612 which prohibits the purchase of second-endorsed PLDT checks totaling P56,435.26 in the absence of approved credit line on October 25, 1995 Respondent submitted his reply explaining that, on the alleged failure to comply with APM No. 26B.5A.1b, his acceptance of secondendorsed checks was solely for marketing considerations.xxx He claimed that the acceptance of the checks was made in good faith, and did not in any way benefit him but in fact benefited the bank. Above all, the bank was amply protected from injury in view of the Agreement on Acceptance of Second-Endorsed Check which he made Fuentes to sign. On May 26, 1999, the Labor Arbiter rendered a Decision finding respondents dismissal valid. The Labor Arbiter as affirmed by the NLRC concluded that there were enough infractions committed by respondent which constitute serious misconduct or willful disobedience and

willful breach of trust and that petitioner need not incur damages to sustain the validity of dismissal. The CA rendered its Decision reversing the ruling of the NLRC and holding that respondents dismissal was effected without due process of law and without just cause. Issues: (1) Whether respondent committed willful disobedience and willful breach of trust sufficient as just causes for his dismissal? (2) Whether the requirements of due process were satisfied? (3) Whether separation pay should not be awarded in favor of respondent. Held:

(1) Yes. To justify willful disobedience or insubordination as a valid ground for termination, "the employees assailed conduct must have been
willful [or] characterized by a wrongful or 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." On the other hand, willful breach of trust requires that "the loss of confidence must not be simulated; it should not be used as a subterfuge for causes which are illegal, improper or unjustified; it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; it must be genuine, not a mere afterthought to justify earlier action taken in bad faith; and, the employee involved holds a position of trust and confidence." While petitioners manual of procedures does not absolutely prohibit the negotiation or acceptance of second-endorsed checks for deposits, it does expressly disallow the acceptance of checks endorsed by corporations, societies, firms, etc. and checks with unusual endorsements. As shown by the records, this explicit policy was transgressed by respondent intentionally and willfully. As correctly noted by the Labor Arbiter, the negotiation of checks by hundreds of payees to only one individual should have alerted respondent as to the authenticity of the endorsements. These considerations have convinced the Court that the PLDT dividend checks indeed contain unusual and suspicious endorsements and cannot be overruled by the mere denial of respondent. Respondent unduly yielded to the whims of a client and gave undue advantage to her instead of performing his duties towards the best interest of the bank. From the start, respondent was perceived to have been extending special favors to Fuentes even though such entails contravention of strict bank guidelines. Respondent, as bank manager, has the duty to ensure that bank rules are strictly complied with not only to ensure efficient bank operation which is imbued with public interest but also to serve the best interest of the bank as he holds a position of trust and confidence. Indubitably, any negligence in the exercise of his responsibilities can be sufficient ground for loss of trust and confidence demanded by his position. Respondents wanton violation of bank policies equates to abuse of authority and, therefore, abuse of the trust reposed in him. Such intention to violate the trust of petitioner is enough for his dismissal from service.

(2) Yes. The requirements of procedural due process were complied with when petitioner sent a Memo dated October 23, 1996 to respondent
informing him of the specific charges and giving him opportunity to air his side. Subsequently, in a letter dated January 7, 1997, respondent was informed that on the basis of the results of the investigation conducted, his written explanation, the written explanation of other employees as well as the audit report, the management has decided to terminate him. The two-notice requirement, which includes a written notice of the cause of dismissal to afford the employee ample opportunity to be heard and defend himself, and written notice of the decision to terminate him which states the reasons therefor, was thus complied with. The audit committees conclusion to dismiss respondent from the service was merely recommendatory. It was not conclusive upon the petitioner. This is precisely the reason why the petitioner still conducted further investigations. To reiterate, respondent was properly informed of the charges and had every opportunity to rebut the accusations and present his version. Respondent was not denied due process of law for he was adequately heard as "the very essence of due process is the opportunity to be heard."

(3) Separation

pay should not be awarded in favor of respondent. In Philippine Long Distance Telephone Company v. National Labor Relations Commission the Court categorically declared that "separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for cause other than serious misconduct x x x." Likewise, we ruled in Toyota Motor Philippines Corp. Workers Association (TMPCWA) v. National Labor Relations Commission that in addition to serious misconduct, separation pay should not be conceded to an employee who was dismissed based on willful disobedience. It was established that the infractions committed by the respondent constituted serious misconduct or willful disobedience resulting to loss of trust and confidence. Clearly therefore, even based on equity and social justice, respondent does not deserve the award of separation pay.

GROSS NEGLIGENCE
G.R. No. 176287. January 31, 2011. HOSPITAL MANAGEMENT SERVICES, INC. - MEDICAL CENTER MANILA, Petitioner vs. HOSPITAL MANAGEMENT SERVICES, INC. MEDICAL CENTER MANILA EMPLOYEES ASSOCIATION-AFW and EDNA R. DE CASTRO, Respondents. Facts: One Rufina Causaren, an 81-year-old patient confined at Room 724-1 of petitioner hospital fell from the right side of the bed as she was trying to reach for the bedpan. Because of what happened, the niece of patient Causaren staying in the room was awakened and she sought assistance from the nurse station. Instead of personally seeing the patient, respondent De Castro directed ward-clerk orientee Guillergan to check the patient. On May 11, 1999, the legal counsel of petitioner hospital directed respondent De Castro and three other nurses on duty, Staff Nurse Janith V. Paderes and Nursing Assistants Marilou Respicio and Bertilla T. Tatad, to appear before the Investigation Committee. The committee recommended that despite her more than seven years of service, respondent De Castro should be terminated from employment for her lapse in responding to the incident. Petitioners allege that the deliberate refusal to attend to patient Causaren after the latter fell from the bed justifies respondent De Castro's termination from employment due to serious misconduct. On July 5, 1999, Janette A. Calixijan, HRD Officer of petitioner hospital, issued a notice of termination, duly noted by Dr. Abaya-Morido, upon respondent De Castro. Issue: W/N respondent De Castro was illegally dismissed Held: Yes. Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes want of care in the performance of one's duties. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. Despite our finding of culpability against respondent De Castro; however, we do not see any wrongful intent, deliberate refusal, or bad faith on her part when, instead of personally attending to patient Causaren, she requested Nursing Assistant Tatad and ward-clerk orientee Guillergan to see the patient, as she was then attending to a newly-admitted patient at Room 710. Being her first offense, respondent De Castro cannot be said to be grossly negligent so as to justify her termination of employment. It was her judgment call, albeit an error of judgment, being the staff nurse with presumably more work experience and better learning curve, to send Nursing Assistant Tatad and wardclerk orientee Guillergan to check on the health condition of the patient, as she deemed it best, under the given situation, to attend to a newlyadmitted patient who had more concerns that needed to be addressed accordingly. Being her first offense, respondent De Castro cannot be said to be grossly negligent so as to justify her termination of employment and that such misconduct could not be categorized as serious or grave that would warrant the extreme penalty of termination from the service after having been employed for almost 9 years.

G.R. No. 152166 October 20, 2010 ST. LUKE'S MEDICAL CENTER, INC. and ROBERT KUAN, Chairman, Petitioners, vs. ESTRELITO NOTARIO, Respondent.

FACTS: On June 23, 1995, St. Lukes Medical Center, Inc. (petitioner hospital), located at Quezon City, employed respondent as In-House Security Guard. On December 30, 1996, respondent was on duty from 6:00 p.m. to 6:00 a.m. of the following day, December 31, 1996. His work consisted mainly of monitoring the video cameras. In the evening of December 30, 1996, a foreigner, attending to his daughter admitted in the cardiovascular unit, lost his traveling bag. Acting on the complaint, petitioner hospital conducted an investigation. The cameras failed to record any incident of theft at room 257 because the cameras were focused in the old and new maternity units. On January 6, 1997, petitioner hospital, through Abdul A. Karim, issued a Memorandum to respondent, the CCTV monitoring staff on duty, directing him to explain in writing, within 24 hours upon receipt thereof, why no disciplinary action should be taken against him for violating the normal rotation/sequencing process of the VCR and, consequently, failed to capture the theft of Tibon's traveling bag at room 257. In his letter dated January 6, 1997, respondent explained that on the subject dates, he was the only personnel on duty as nobody wanted to assist him. Because of this, he decided to focus the cameras on the Old and New Maternity Units, as these two units have high incidence of crime. Finding his excuse unsatisfactory, Petitioner hospital dismissed him on the ground of gross negligence/inefficiency under Section 1, Rule VII of its Code of Discipline. Respondent then filed a complaint against petitioners. On November 11, 1998, the Labor Arbiter dismissed respondents complaint for illegal dismissal against petitioners. On appeal by the respondent, the NLRC issued a Resolution dated January 19, 2000, reversing the Decision of the Labor Arbiter. It stated that petitioners failed to submit proof that there was an existing Standard Operating Procedure (SOP) in the CCTV monitoring system, particularly on the focusing procedure. It observed that respondent was not negligent when he focused the cameras on the Old and New Maternity Units, as they were located near the stairways and elevators, which were frequented by many visitors and, thus, there is the likelihood that untoward incidents may arise. If at all, it treated the matter as a single or isolated act of simple negligence which did not constitute a just cause for the dismissal of an employee (not habitual) On February 14, 2000, petitioners filed a Motion for Reconsideration, but the same was denied by the NLRC in its Resolution dated March 20, 2000. On September 21, 2001, the CA dismissed petitioners' petition for certiorari, affirming the NLRCs decision. The CA further added that the respondent was deprived of due process because he was not afforded the twin notice rule and hearing ISSUE: 1. Whether or not petitioner hospital can validly dismiss respondent 2. Whether or not respondent was given the twin notice rule and hearing RULING: 1. To effectuate a valid dismissal from employment by the employer, the Labor Code has set twin requirements, namely: (1) the dismissal must be for any of the causes provided in Article 282 of the Labor Code; and (2) the employee must be given an opportunity to be heard and defend himself. This first requisite is referred to as the substantive aspect, while the second is deemed as the procedural aspect. An employer can terminate the services of an employee only for valid and just causes which must be supported by clear and convincing evidence. The employer has the burden of proving that the dismissal was indeed for a valid and just cause. A perusal of petitioner hospitals CCTV Monitoring Guidelines, disseminated to all in-house security personnel, reveals that that there is no categorical provision requiring an in-house security personnel to observe a rotation sequence procedure in focusing the cameras so that the security monitoring would cover as many areas as possible. Under Article 282 (b) of the Labor Code, an employer may terminate an employee for gross and habitual neglect of duties. Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes want of care in the performance of ones duties. Habitual neglect implies repeated failure to perform ones duties for a period of time, depending upon the circumstances. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. Under the prevailing circumstances, respondent exercised his best judgment in monitoring the CCTV cameras so as to ensure the security within the hospital premises. Verily, assuming arguendo that respondent was negligent, although this Court finds otherwise, the lapse or inaction could only be regarded as a single or isolated act of negligence that cannot be categorized as habitual and, hence, not a just cause for his dismissal. Petitioners anchor on the postulate that even a single or isolated act of negligence by respondent constitutes a just cause for his dismissal as it engendered the possibility of a legal action that may be taken against them by the owner of the lost items. This is purely speculative. The Certification, dated July 8, 1999, issued by Renato Politud Valebia, Police Superintendent, Station Commander of Galas Police Station (Station II), located at Unang Hakbang Street, corner Luzon Avenue, Galas, Quezon City, stated that no incident of theft was reported by the management of petitioner hospital or any of its authorized representatives involving the loss of the plane tickets and other personal belongings of Justin Tibon and Andanie De Brum. Even the supposed complainant, Tibon, did not institute any complaint against petitioner hospital. Therefore, it cannot be said that petitioners incurred actual loss or pecuniary damage. 2. The CA found that petitioner hospital failed to comply with the rule on twin notice and hearing as it merely required respondent to give his written explanation within 24 hours and, thereafter, ordered his dismissal. Petitioners claim that since the dismissal of respondent was made in good faith, as he even admitted his infraction, the award of backwages was erroneous; while respondent seeks reinstatement with payment of full backwages from the time of his dismissal up to actual reinstatement, without of loss of seniority rights and other benefits. Where the dismissal was without just cause and there was no due process, Article 279 of the Labor Code, as amended, mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances and other benefits, or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement. Petitioners lack of just cause and non-compliance with the procedural requisites in terminating respondents employment renders them guilty of illegal dismissal. Consequently, respondent is entitled to reinstatement to his former position without loss of seniority rights and payment of backwages. However, if such reinstatement proves impracticable, and hardly in the best interest of the parties, perhaps due to the lapse of time since his dismissal, or if he decides not to be reinstated, respondent should be awarded separation pay in lieu of reinstatement G.R. No. 188271, August 16, 2010 Jesus E. Dycoco, Jr. v. Equitable PCI Bank (Now Banco De Oro), Rene Buenaventura and Siles Samalea. CORONA, J. : FACTS: Dycoco, Jr. was hired by Equitable PCI as Asst. Manager and/or OIC Branch Head in Legazpi City and became its Branch Head then Personal Banking Manager (PBM) after internal reogranization. In 2005, show cause letters were issued by the Bank against Dycoco, Jr. and other officers for alleged unauthorized abstractions of various trust funds, treasury placements and deposits. A 2nd show cause letter addressed to Dycoco, Jr. stated the results of the investigation charging him with involvement in alleged dollar-trading activties and thus putting him under 1 month preventive suspension. While petitioner was under preventive suspension, he filed a complaint in the NLRC alleging constructive dismissal and illegal suspension, and demanding reinstatement/separation pay and payment of incentives, 13th month pay, bonuses, moral and exemplary damages and attorneys fees. However, respondent bank rendered a decision with respect to the first "show cause" letter finding petitioner guilty of violating the banks Code of Conduct, and Article 282 (b) of the Labor Code. The penalty of which is dismissal but Dycoco, Jr. was exonerated from the charge in the 2nd show cause letter. LA ruled that petitioner was illegaly dismissed and ordered respondent bank to pay separation pay, backwages, incentives, bonuses, 13th month pay and attorneys fees in the total amount of P1,147,216. NLRC reversed LAs decision on appeal. CA affirmed NLRCs decision. ISSUE: Whether or not petitioner was illegally dismissed. HELD: No. As the banking industry is impressed with public interest, all bank personnel are burdened with a high level of responsibility insofar as care and diligence in the custody and management of funds are concerned. The banking business will thrive only as long as it maintains the trust and confidence of its customers/clients. Indeed, by the very nature of their work, the degree of responsibility, care and trustworthiness expected of officials and employees of the bank is far greater than

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those of ordinary officers and employees in the other business firms. Hence, no effort must be spared by banks and their officers and employees to ensure and preserve the trust and confidence of the general public and its customers/clients as well as the integrity of its records and the safety and well-being of its customers/clients while in its premises. Petitioner miserably failed to discharge this burden. Petitioner violated his duties and responsibilities as PBM when he signed and approved the subject transactions without the necessary signatures of the concerned clients. As PBM, it was his obligation to ensure "that all documentary requirements (were) complied with by clients being handled and that the banks interest (was) at all times protected." It was incumbent on him to enforce "strict compliance with bank policies and internal control procedures while maintaining the highest level of service quality. It is significant that petitioner did not even deny that it was he who signed, approved and facilitated the subject transactions relating to the various abstractions committed by a bank employee. It was an implied admission that he was the one who opened the door for the commission of the unlawful abstractions by failing to ensure that all requirements for the opening of accounts were complied with. This constituted gross negligence. WHEREFORE, the motion for reconsideration is DENIED with FINALITY. Costs against petitioner. No further pleadings or motions shall be entertained. Let entry of judgment be made in due course. SO ORDERED. DOCTRINE: Dismissal; gross negligence and loss of confidence Gross negligence connotes want of care in the performance of ones duties. Petitioners failure on 3 separate occasions to require clients to sign the requisite documents constituted gross negligence. His repeated failure to carefully observe his duties as PBM clearly showed utter want of care. Loss of confidence applies to situations where the employee is routinely charged with the care and custody of employers money or property. Furthermore, it has been held that if the employees are cashiers, managers, supervisors, salesmen or other personnel occupying positions of responsibility, the employers loss of trust and confidence in said employees may justify the termination of their employment. After committing gross negligence, petitioner surprisingly still expects respondent bank to retain him. Nothing can compel an employer to continue availing of the services of an employee guilty of acts inimical to its interests as this is a ground for loss of confidence. Petitioners breach of respondent banks policies intended to safeguard the bank and its clients funds was clearly inimical to the interests of his employer. Loss of confidence and dismissal from employment were therefore justified.

G.R. No. 179801, June 18, 2010. Bank of the Philippine Islands vs. NLRC (First Division) Facts: Respondent ( Ma. Rosario Arambulo) was initially employed as Clerk in 1972 at Citytrust Banking Corporation, which eventually merged with the Bank of Philippine Islands (BPI). She later became Lead Teller, then as Sales Manager, and subsequently, as Bank Manager in BPI-San Pablo, Laguna Branch in 1996. On 2001, respondent was reprimanded for the improper handling and retention of a client's account. She was transferred to BPI Family Bank in Los Baos, Laguna. On 2002, a client of BPI-San Pablo, Laguna Branch requested for a certification of her savings account. Her balance reflected an amount less than the actual amount deposited. Hence, BPI conducted an investigation and discovered that its bank teller, Teotima Helen Azucena (Azucena) was making unauthorized withdrawals. A show cause memorandum was served to Azucena asking her to explain the unauthorized withdrawals. In her written response, Azucena implicated respondent and added that the same practice was continued by her son, Artie Arambulo. BPI conducted a thorough investigation and discovered that respondent had approved several withdrawals from various accounts of clients whose signatures were forged. A hearing was conducted on 2 September 2002 to give respondent opportunity to present additional explanation. On 16 January 2003, respondent was served with the notice of termination on the ground of loss of trust and confidence, for gross violation of policies and procedures. Respondent filed a complaint for illegal dismissal with the labor arbiter praying for payment of separation pay, backwages and attorney's fees. The labor arbiter found respondent's dismissal for cause in accordance with the law. It was established that respondent had approved withdrawals which were later proven to be forged. On appeal, the NLRC sustained the dismissal but ordered the payment of separation pay. In the instant petition, BPI essentially questions the award of separation pay. Issue: Whether or not respondent is entitled to backwages. Held: NO. While as a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not entitled to separation pay, the Court has allowed in numerous cases the grant of separation pay or some other financial assistance to an employee dismissed for just causes on the basis of equity. In the leading case of Philippine Long Distance Telephone Co. v. NLRC, the Court stated that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. In granting separation pay to respondent, the NLRC and Court of Appeals both adhered to this jurisprudential precept and cleared respondent of bad faith. However, the succeeding case of Toyota Motor Phils. Corp. Workers Association v. NLRC reaffirmed the general rule that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct, willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, commission of a crime against the employer or his family, or those reflecting on his moral character. These five grounds are just causes for dismissal as provided in Article 282 of the Labor Code. Verily, it may not be amiss to emphasize that if an employee has been dismissed for a just cause under Article 282 of the Labor Code, he is not entitled to separation pay. In the instant case, respondent was dismissed on the ground of loss of trust and confidence. It is significant to stress that for there to be a valid dismissal based on loss of trust and confidence, the breach of trust must be willful, meaning it must be done intentionally, knowingly, and purposely, without justifiable excuse. The basic premise for dismissal on the ground of loss of confidence is that the employees concerned hold a position of trust and confidence. It is the breach of this trust that results in the employers loss of confidence in the employee. WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of Appeals dated 3 July 2007, insofar as it orders BPI to pay respondent separation pay, is REVERSED AND SET ASIDE. G.R. No. 180123, February 18, 2010. Kulas Ideas & Creations, et al vs. Juliet Alcoseba and Flordelinda Arao-arao Facts: In 1996, respondents Juliet Alcoseba (Juliet) and Flordelinda Arao-arao (Flordelinda) were employed as sales attendants of herein petitioner KULAS Ideas & Creations (KULAS), a gift boutique. As part of their duties and responsibilities, Juliet and Flordelinda were tasked to sell KULAS's products, prepare weekly sales reports and assist the clerk in the monthly inventory of saleable goods.

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In February 2000, the Department of Labor and Employment (DOLE) inspected theoutlet of KULAS in Ayala Center in Cebu where Juliet and Flordelinda were assigned and found that it violated several labor standards laws. The DOLE later sent KULAS a Notice of Summary Investigation, directing it to pay the salary differential of its employees from January to August 2000 amounting to P173,003.28. KULAS subsequently directed Juliet and Flordelinda, by Memorandum of November 23, 2000, to explain and/or investigate an alleged inventory discrepancy which entailed the amount of P48,179.30. And thereafter suspended Juliet and Flordelinda for seven days, by Memorandum of November 29, 2000, starting December 1, 2000 for gross negligence of duties and responsibilities. Both Juliet and Flordelinda thus filed a complaint for illegal suspension and withholding of salaries before the National Labor Relations Commission (NLRC). Finding for petitioners, Labor Arbiter Violeta Ortiz-Bantug, ruled that there was no illegal dismissal. On appeal, the NLRC, likewise held that there was no illegal dismissal. On herein respondents' motion for reconsideration, the NLRC "partially reconsidered." Petitioners and respondents both moved for reconsideration of the NLRC September 3, 2004 Resolution. By Resolution of March 18, 2005, the NLRC denied respondents' second motion for reconsideration for being a prohibited pleading but granted petitioners' motion for reconsideration. It accordingly reinstated its April 19, 2004 Decision which, it bears recalling, held that there was no illegal dismissal and set aside "the monetary award for lack of jurisdiction." Respondents, via certiorari, elevated the case to the Court of Appeals which, by Decision of March 21, 2007, reversed and set aside the NLRC. Hence this petition. Issue: Whether or not the respondents were validly dismissed. Held: NO. Article 282 (b) and (c) of the Labor Code provide that an employer may terminate an employee for "gross and habitual neglect by the employee of his duties" and for "fraud." In both instances, substantial evidence is necessary for an employer to effectuate any dismissal. Uncorroborated assertions and accusations by the employer do not suffice, otherwise the constitutional guaranty of security of tenure of the employee would be jeopardized. Article 282 (b) imposes a stringent condition before an employer may terminate an employment due to gross and habitual neglect by the employee of his duties. To sustain a termination of employment based on this provision of law, the negligence must not only be gross but also habitual. Petitioners assert that respondents failed to regularly undertake a monthly physical inventory of the outlet's merchandise. The assertion fails to persuade. For the most part, inventory preparation and reporting did not fall on respondents' shoulders since they were to "assist the [stock] clerk" only. In cases of termination of employees based on just causes, the law mandates the following requisites: (i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side. (ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him. (iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. Thus a first notice informing and bearing on the charge must be sent to the employee. Maquiling v. Philippine Tuberculosis Society, Inc., emphasizes that the first notice must inform outright the employee that an investigation will be conducted on the charges specified in such notice which, if proven, will result in the employee's dismissal. This notice will afford the employee an opportunity to avail all defenses and exhaust all remedies to refute the allegations hurled against him for what is at stake is his very life and limb his employment. Otherwise, the employee may just disregard the notice as a warning without any disastrous consequence to be anticipated. Absent such statement, the first notice falls short of the requirement of due process...xxx In the present case, the only time petitioners apprised respondents of gross neglect of duties and dishonesty as grounds for the termination of the services was by Memorandum of December 13, 2000. The memorandum did not inform outright respondents that an investigation would be conducted on the charges particularized therein which, if proven, would result to their dismissal. It likewise did not contain a plain statement of the particular charges of malfeasance or misfeasance.

BREACH OF TRUST AND CONFIDENCE

G.R. No. 169564. April 6, 2011. James Ben L. Jerusalem v. Keppel Monte Bank, et al., FACTS: James Ben L. Jerusalem (James) was employed by Keppel Monte Bank (Keppel) as Assistant Vice-President. He was assigned as Head of the newly created VISA Credit Card Department. The bank subsequently re-organized the VISA Credit Card Department and reduced it to a mere unit. Carrying the same rank, James was reassigned as Head of the Marketing and Operations of the Jewelry Department. James received from Jorge Javier (Jorge) a sealed envelope said to be containing VISA Card application forms. James immediately handed over the envelope with accomplished application forms to the VISA Credit Card Unit. All in all, the VISA credit card applications referred by Jorge which James forwarded to the VISA Credit Card Unit numbered 67, all of which were subsequently approved. As it turned out, all the accounts under these approved applications became past due. Marciana sent a letter to Jorge asking the latter to assist the bank in the collection of his referred VISA accounts which have already an accumulated principal balance of P6,281,443.90 excluding interest and service fees in the amount of P1,157,490.08. On the same date, James upon knowing the status of the accounts referred by Jorge, sent a Memorandum to Roberto recommending the filing of a criminal case for estafa against Jorge. He further recommended that a coordination with the other banks where Jorge has deposits should be made promptly so that they can ask said banks to freeze Jorges accounts. James even warned Keppel that immediate action should be taken while Jorge is still in the country. James received a Notice to Explain from Keppels Vice President for Operations, Sunny Yap (Sunny), why no disciplinary action should be taken against him for referring/endorsing fictitious VISA card applicants. The said referrals resulted in substantial financial losses to Keppel. James submitted his written explanation to Sunny. He pointed out that he had no participation in the processing of the VISA card applications since he was no longer connected with the VISA Credit Card Unit at the time of such transactions. He explained that he can only endorse the applications referred by Jorge to the VISA Credit Card Unit because he was already transferred to Jewelry Department, as Head. The Manager for Human Resources Department, Josefina Picart, handed to James a Notice of Termination informing the latter that he was found guilty of breach of trust and confidence for knowingly and maliciously referring, endorsing and vouching for VISA card applicants who later turned out to be impostors resulting in financial loss to Keppel. This prompted James to file before the Labor Arbiter a complaint for illegal dismissal. LA: Keppel guilty of illegal dismissal / NLRC: Affirmed MR: denied / CA: Reversed ISSUE: whether Keppel legally terminated Jamess employment on the ground of willful breach of trust and confidence? Held: NO. Article 282 of the Labor Code states: ART. 282. TERMINATION BY EMPLOYER. An employer may terminate an employment for any of the following causes: (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

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(e) Other causes analogous to the foregoing. Article 282(c) of the Labor Code prescribes two separate and distinct grounds for termination of employment, namely: (1) fraud; or (2) willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. Law and jurisprudence have long recognized the right of employers to dismiss employees by reason of loss of trust and confidence. As provided for in Article 282, an employer may terminate an employees employment for fraud or willful breach of trust reposed in him. But, in order to constitute a just cause for dismissal, the act complained of must be work-related such as would show the employee concerned to be unfit to continue working for the employer. DOCTRINE: TWO REQUISITES FOR DISMISSAL DUE TO LOSS OF TRUST AND CONFIDENCE The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be holding a position of trust and confidence. In this case, there is no doubt that James held a position of trust and confidence as Assistant Vice-President of the Jewelry Department. The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary. Keppels evidence against James fails to meet this standard. DOCTRINE: EMPLOYEE HOLDS POSITION OF RESPONSIBILITY OR TRUST AND CONFIDENCE. 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. 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. Disposition: Petition granted, reversed and set aside. Petitioner reinstated. G.R. No. 171630, August 8, 2010 CENTURY CANNING CORPORATION, RICARDO T. PO, JR. and AMANCIO C. RONQUILLO vs. VICENTE RANDY R. RAMIL FACTS: Petitioner Century Canning Corporation, a company engaged in canned food manufacturing, employed respondent Vicente Randy Ramil in August 1993 as technical specialist. Prior to his dismissal on May 20, 1999, his job included, among others, the preparation of the purchase requisition (PR) forms and capital expenditure (CAPEX) forms, as well as the coordination with the purchasing department regarding technical inquiries on needed products and services of petitioner's different departments. On March 3, 1999, respondent prepared a CAPEX form for external fax modems and terminal server, per order of Technical Operations Manager Jaime Garcia, Jr. and endorsed it to Marivic Villanueva, Secretary of Executive Vice-President Ricardo T. Po, for the latter's signature. The CAPEX form, however, did not have the complete details and some required signatures. The following day, March 4, 1999, with the form apparently signed by Po, respondent transmitted it to Purchasing Officer Lorena Paz in Taguig Main Office. Paz processed the paper and found that some details in the CAPEX form were left blank. She also doubted the genuineness of the signature of Po, as appearing in the form. Paz then transmitted the CAPEX form to Purchasing Manager Virgie Garcia and informed her of the questionable signature of Po. Consequently, the request for the equipment was put on hold due to Po's forged signature. However, due to the urgency of purchasing badly needed equipment, respondent was ordered to make another CAPEX form, which was immediately transmitted to the Purchasing Department. Suspecting him to have committed forgery, respondent was asked to explain in writing the events surrounding the incident. He vehemently denied any participation in the alleged forgery. Respondent was, thereafter, suspended on April 21, 1999. Subsequently, he received a Notice of Termination from Armando C. Ronquillo, on May 20, 1999, for loss of trust and confidence. Due to the foregoing, respondent, on May 24, 1999, filed a Complaint for illegal dismissal, non-payment of overtime pay, separation pay, moral and exemplary damages and attorney's fees against petitioner and its officers before the Labor Arbiter (LA). The LA dismissed the complaint for lack of merit. Respondent appealed to the NLRC. NLRC set aside LAs ruling and declared respondents dismissal as illegal and directed petitioner to reinstate respondent with full backwages and seniority rights and privileges. It found that petitioner failed to show clear and convincing evidence that respondent was responsible for the forgery of the signature of Po in the CAPEX form. Petition filed a motion for reconsideration. NLRC reversed its decision and upheld the LAs dismissal of the complaint. MR filed by Respondent before NLRC. NLRC denied. Respondent appealed with the CA. CA rendered judgment in favor of respondent and reinstated the earlier decision of the NLRC. Petitioner filed MR, which the CA denied in a Resolution. Hence the instant petition. Petitioner's main allegation is that there are factual and legal grounds constituting substantial proof that respondent was clearly involved in the forgery of the CAPEX form, i.e., respondent is the forger of the signature of Po, as he is the custodian and the one who prepared the CAPEX form; the forged signature was already existing when he submitted the same for processing; he has the motive to forge the signature; respondent has the propensity to deviate from the Standard Operating Procedure as shown by the fact that the CAPEX form, with the forged signature of Po, is not complete in details and lacks the required signatures; also, in February 1999, respondent ordered 8 units of External Fax Modem without the required CAPEX form and a PR form. Petitioner insists that the mere existence of a basis for believing that respondent employee has breached the trust and confidence of his employer suffices for his dismissal. Finally, petitioner maintains that aside from respondent's involvement in the forgery of the CAPEX form, his past violations of company rules and regulations are more than sufficient grounds to justify his termination from employment. In his Comment, respondent alleged that petitioner failed to present clear and convincing evidence to prove his participation in the charge of forgery nor any damage to the petitioner. ISSUE: Whether or not the termination from employment of PR is legal? HELD: NO. x x x The record of the case is bereft of evidence that would clearly establish Ramil's involvement in the forgery. They did not even submit any affidavit of witness or present any during the hearing to substantiate their claim against Ramil. Respondent alleged in his position paper that after preparing the CAPEX form on March 3, 1999, he endorsed it to Marivic Villanueva for the signature of the Executive Vice-President Ricardo T. Po. The next day, March 4, 1999, respondent received the CAPEX form containing the signature of Po. Petitioner never controverted these allegations in the proceedings before the NLRC and the CA despite its opportunity to do so. Petitioner's belated allegations in its reply filed before this Court that Marivic Villanueva denied having seen the CAPEX form cannot be given credit. Thus, if respondent retrieved the form on March 4, 1999 with the signature of Po, it can be correctly inferred that he is not the forger. Had the CAPEX form been returned to respondent without Po's signature, Villanueva or any officer of the petitioner's company could have readily noticed the lack of signature, and could have easily attested that the form was unsigned when it was released to respondent. Further, as correctly found by the NLRC, if respondent was the one who forged the signature of Po in the CAPEX form, there was no need for him to endorse the same to Villanueva and transmit it the next day. He could have easily forged the signature of Po on the same day that he prepared the CAPEX form and submitted it on the very same day to petitioner's main office without passing through any officer of petitioner. RATIO DECIDENDI: The law mandates that the burden of proving the validity of the termination of employment rests with the employer. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and, therefore, illegal. Unsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal justification for dismissing employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of labor laws and the Constitution. The termination letter addressed to respondent, dated May 20, 1999, provides that: We also conducted inquiries from persons concerned to get more information in (sic) this forgery. Some of your statements do not jibe with theirs. x x x

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However, this information which petitioner allegedly obtained from the "persons concerned" was not backed-up by any affidavit or proof. Petitioner did not even bother to name these resource persons. Petitioner based respondent's dismissal on its unsubstantiated suspicions and conclusion that since respondent was the custodian and the one who prepared the CAPEX forms, he had the motive to commit the forgery. However, as correctly found by the NLRC in its original Decision, respondent would not be benefited by the purchase of the subject equipment. The equipment would be for the use of petitioner company. While We have previously held that employers are allowed a wider latitude of discretion in terminating the services of employees who perform functions which by their nature require the employers' full trust and confidence and the mere existence of basis for believing that the employee has breached the trust of the employer is sufficient, this does not mean that the said basis may be arbitrary and unfounded. The right of an employer to dismiss an employee on the ground that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established, but proof beyond reasonable doubt is not necessary. It must rest on substantial grounds and not on the employers arbitrariness, whim, caprice or suspicion; otherwise, the employee would eternally remain at the mercy of the employer. In the case at bar, there is neither direct evidence nor substantial documentary evidence pointing to respondent as the one liable for the forgery of the signature of Po. G.R. No. 178762 LUZVIMINDA A. ANG v. PHILIPPINE NATIONAL BANK ABAD, J.: This case is about the dismissal of an employee for offenses committed during her employment in a government-owned corporation but which offenses were discovered after the privatized corporation rehired her to work for it. FACTS: Luzviminda A. Ang (Ang) claimed that respondent Philippine National Bank (PNB), then a government-owned corporation, hired her on December 4, 1967 as a probationary clerk. But she rose from the ranks, eventually becoming an Assistant Department Manager I, a position she held when the PNB was privatized on May 26, 1996 and when she, like her co-employees, was deemed automatically retired. PNB re-employed Ang as Assistant Manager effective on May 27, 1996 and assigned her in its Tuguegarao, Cagayan Branch. Less than four months later, PNB administratively charged her with serious misconduct and willful breach of trust for taking part in a scam, called kiting operation, where a depositor used a conduit bank account for depositing several unfunded checks drawn against the same depositors other current accounts and from which conduit bank account he later withdrew those checks. PNB alleged that Ang had allowed this illegal activity while she was the Assistant Department Manager I in its Tuguegarao Branch. PNB heaped 3 other charges against Ang of serious misconduct and gross violation of the banks rules and regulations as follows: She issued six certificates of deposit between June 5, 1992 up to January 10, 1996 in amounts exceeding the true deposit balance of various depositors; She issued two bank commitments dated January 24, 1994 and for providing a credit line in favor of a government contractor without authority and in violation of SEL Cir. 2-166/91 of July 10, 1996; and She committed tardiness and under time from October to December 1995 and January to March 1996 in violation of Gen. Cir. 161/91 of February 1, 1991. For the 1st charge: Ang claimed that it was not a kiting operation, but an accommodation of a very valued client. She admitted that the checks were not funded and were converted into account receivables or accommodation loans that the client had settled, including interests, penalties, and other charges. Consequently, the PNB did not suffer any loss from those transactions; it even reaped enormous profits from them. For the 2nd charge: Ang claimed that the issuance of the certificates had been tolerated to accommodate valued clients as a marketing strategy and prevent their move to other banks. These had been open transactions, said Ang, which were known to all the officers of the branch. Again, the PNB did not suffer any loss on account of the issuance of those certificates. The clients involved maintained their loyalty to the bank. For the 3rd charge: Ang claimed that the PNBs loan commitments in those cases amounted to mere recommendations since she had no authority to approve loans. For the last charge: Ang claimed that she was not covered by the circular governing office hours because she was a bank officer. Managerial employees, according to her, worked beyond the usual eight hours and even worked on Saturdays and Sundays. She added that, since the bank had already made deductions for tardiness on her pay check, she cannot anymore be administratively charged for it. Ang further pointed out that the causes for her termination took place when she was yet a government official. The PNB had since ceased to be government-owned. If she were to be charged for those causes, the jurisdiction over her case would lie with the Civil Service Commission. Even then, since she already retired from the government service, the employment that could be terminated no longer existed. PNBs Inspection and Investigation Unit recommended her dismissal. Ang alleged that the PNB dismissed her from work, withholding her fringe benefits, gratuity benefits, monetary value of her leave credits, rights and interests in the provident fund, and other benefits due her. She sought reconsideration but it was denied. Ang then filed a complaint against the PNB before the National Labor Relations Commission (NLRC) for illegal dismissal, illegal deductions, non-payment of 13th month pay, allowances, separation pay, and retirement benefits with prayer for payment of moral and exemplary damages, attorneys fees, and litigation expenses. PNB claimed that it observed due process in terminating Ang, notifying her of the charges and giving her a chance to defend herself in a formal hearing but she waived this and opted to submit a position paper. The PNB Board of Inquiry informed her of its decision before implementing the same. Indeed, she even sought its reconsideration. The PNB pointed out that since it separated petitioner Ang for a just cause, she was not entitled to termination pay. Further she ceased to be entitled to the benefits she claimed. LA rendered a Decision finding the PNBs dismissal of Ang illegal for failure to show that the dismissal was for a valid cause and after notice and hearing. Specifically, the PNB failed to prove any basis for loss of trust. The LA ordered the reinstatement of petitioner Ang to her former position or its substantial equivalent, without loss of seniority rights and with full backwages and other benefits or their money value from the time of her actual dismissal up to her reinstatement. PNB appealed the decision to the NLRC but the latter dismissed the appeal. Upon motion for reconsideration, however, the NLRC reconsidered its finding of lack of due process, considering Angs admission during direct examination that the PNB informed her of the charges against her and gave her a chance to present her side with the assistance of a counsel. The NLRC deleted the award of damages because of absence of bad faith on the part of the PNB officers but maintained the LAs finding that the PNB had not proved loss of trust as a ground for dismissal. On petition for certiorari with the Court of Appeals (CA), the latter rendered a decision on January 30, 2007, finding valid reason to uphold Angs dismissal from the service for willful breach of the trust reposed in her by the PNB. As to the procedural aspect, the CA found that without doubt the PNB observed due process in dismissing Ang. She received two memoranda; first informing her of the charges against her, and second informing her of the decision to terminate her services. The CA reversed the NLRC Decision and dismissed Angs complaint. She moved for reconsideration, but this was denied. ISSUES: 1. Whether or not the CA erred in finding that the PNB dismissed Ang based on the evidence that she betrayed its trust in her as a bank officer; 2. Whether or not the CA erred in holding that the PNB accorded Ang due process when it dismissed her from the service; and 3. Whether or not the CA erred in holding that Ang was not entitled to the benefits that the PNB withheld from her. RULING: 1. Ang claims that her dismissal by PNB, the private corporation, was illegal since she had committed no offense under its employ. The offense for which she was removed took place when the government still owned PNB and she was then a government employee. But while PNB began as a government corporation, it did not mean that its corporate being ceased and was subsequently reestablished when it was privatized. It remained the same corporate entity before, during, and after the change over with no break in its life as a corporation.

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Consequently, the offenses that Ang committed against the bank before its privatization continued to be offenses against the bank after the privatization. But, since the PNB was already a private corporation when it looked into Angs offenses, the provisions of the Labor Code governed its disciplinary action.

2.

As to the existence of just cause, it is clear to the Court that Ang did not deny the acts and omissions constituting the offense. Her defense consisted in her claim that she accommodated a clients unfunded checks and issued false bank certificates with the knowledge and consent of the branch manager and comptroller. But such uncorroborated defense is unsatisfactory, revealing a mind that was willing to disregard bank rules and regulations when other branch officers concurred. The PNB rightfully separated her from work for willful breach of the trust that it reposed in her under the Labor Code. Her defense that the PNB did not suffer any loss is of no moment. The focal point is that she betrayed the trust of the bank in her fidelity to its interest and rules. 3. There was due process as she admitted having received from the PNB a memorandum of September 15, 1996, containing the administrative charges against her and a memorandum of June 3, 1997 containing the decision to terminate her service. She likewise admitted that the bank gave her a chance to present her side and to consult a lawyer. When PNB was privatized, Angs employment with it as a government-owned corporation ceased. Indeed, the PNB already computed the retirement and other benefits to which she was entitled as a result of the cessation of her employment. Since she had no pending administrative case on the day she ceased to be a PNB employee and had been cleared of any accountability, all those benefits already accrued to her on the date of her termination. But as she was already an employee of the privatized PNB, her separation from work for a just cause does not entitle her to termination pay. Thus, the PNB may rightfully withhold Angs termination pay that accrued beginning on May 27, 1996 because of her dismissal. G.R. No. 169523 June 16, 2010 LIMA LAND, INC., LEANDRO JAVIER, SYLVIA DUQUE, and PREMY ANN BELOY, Petitioners, vs. MARLYN CUEVAS, Respondent. Keywords: arriendo contracts, due process, valid cause, loss of confidence, willful breach Facts: Petitioner Lima Land, Inc. (Lima) is a company engaged in the real estate business and a member of the Alcantara Group of Companies (Alcantara Group). Petitioners Leandro D. Javier [Javier] and Premy Ann G. Beloy [Beloy] are Lima's Executive Vice-President and Operating Officer, and Assistant Corporate Secretary, respectively. Petitioner Sylvia M. Duque [Duque] is the Vice-President-Director of the Human Resources Department of the Alcantara Group. Private respondent Marlyn G. Cuevas [Cuevas] was the Finance and Administration Manager of Lima. In 1996, Lima entered into several lease agreements known as "arriendo contracts" with different persons whereby [the former transferred to the latter] its right to harvest [coconuts as well as other fruits planted on the lands it owned] in consideration of certain monetary equivalent. The collection of the proceeds were under the direct supervision of Jonas Senia [Senia], Operation and Estate Manager at the Lima Land Estate, Batangas City. He was assisted by Flor San Gabriel [San Gabriel], Site Assistant and Imelda Melo [Melo], Liaison Assistant. The arriendo collections were, thereafter, remitted to the Head Office in Makati and booked as company income. In February 2000, irregularities in [the] arriendo collections were discovered. Petitioners formed an investigating panel to conduct a thorough investigation on the status of the collections. The initial findings of the investigating panel revealed fraudulent activities and irregularities committed by the Private Respondent relative to the Company funds. Consequently, Private Respondent was served with a notice to explain and was placed under preventive suspension on May 22, 2002. She was, thereafter, ordered to turn over all documents and keys in her possession to Mrs. Venus Quieta. On May 23, 2002, Private Respondent received another notice charging her with the following: 1) failure to exercise reasonable diligence to inquire about the status of the unremitted arriendo collections; 2) approving a patently false request for reimbursement of representation expenses; and 3) failure to institute sufficient accounting standards. Respondent failed to appear at the initial hearing, and although was allowed to file a reply, she failed to attend the succeeding hearing and to submit additional evidences. On June 21, 2002, Petitioners dismissed Private Respondent on the ground of loss of trust and confidence effective May 22, 2002, the date of her preventive suspension. The notice of termination was received by the Private Respondent on the same date. On July 3, 2002, Private Respondent filed a Complaint with the Labor Arbiter for illegal suspension, illegal dismissal, and non-payment of salaries, holiday pay, service incentive leave pay and 13th month pay against the Petitioners. She also prayed for her reinstatement, payment of backwages, damages, attorney's fees and other monetary claims. The Labor Arbiter dismissed the case for lack of merit, the NLRC reversed this decision (thus, denying the MR also). The CA affirmed the NLRCs decision. Issue: Whether petitioners validly dismissed respondent from her employment. Ruling: No 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 defend himself; and (b) the dismissal must be for a valid cause, as provided in Article 282 of the Labor Code, or for any of the authorized causes under Articles 283 and 284 of the same Code. Second requisite is lacking In the instant case, the Court agrees with petitioners' contention that respondent was afforded due process prior to her dismissal (supplied). (procedurally) Well-settled is the rule that the essence of due process is simply an opportunity 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. Moreover, in dismissing an employee, the employer has the burden of proving that the former worker has been served two notices: (1) one to apprise him of the particular acts or omissions for which his dismissal is sought, and (2) the other to inform him of his employers decision to dismiss him. The first notice must state that dismissal is sought for the act or omission charged against the employee, otherwise, the notice cannot be considered sufficient compliance with the rules. These were complied with. However, the Court notes that the CA and the NLRC did not err in ruling that petitioners failed to comply with the other requisite of valid dismissal as there was no sufficient evidence to prove that petitioners are justified in terminating respondent's employment on the basis of loss of trust and confidence. Loss of trust and confidence, as a just cause for termination of employment, is premised on the fact that an employee concerned holds a position where greater trust is placed by management and from whom greater fidelity to duty is correspondingly expected. This includes managerial personnel entrusted with confidence on delicate matters, such as the custody, handling, or care and protection of the employers property.The betrayal of this trust is the essence of the offense for which an employee is penalized WITH respect to rank-and-file personnel, loss of trust and confidence, as ground for valid dismissal, requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions and accusations by the employer will not be sufficient. WITH regards a managerial employee, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. Hence, in the case of managerial employees, proof beyond reasonable doubt is not required, it being sufficient that there is some basis for such loss of confidence The loss of trust and confidence must be based not on ordinary breach by the employee of the trust reposed in him by the employer, but, in the language of Article 282 (c) of the Labor Code, on willful breach. A breach is willful if it is done intentionally, knowingly and purposely,

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without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employers 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. There must, therefore, be an actual breach of duty committed by the employee which must be established by substantial evidence. In the case at bar, respondent's duty insofar as the arriendo collections are concerned, is to see to it that these are timely remitted to the head office. In the present case, the Court agrees with petitioners that respondent was remiss in this particular duty. Respondents negligence or carelessness in handling the arriendo collections, however, are not justifiable grounds for petitioners' loss of trust and confidence in her, especially in the absence of any malicious intent or fraud on respondents part. Loss of trust and confidence stems from a breach of trust founded on a dishonest, deceitful or fraudulent act. Respondent did not commit any act which was dishonest or deceitful. There is also no showing that petitioners took steps to hold accountable the other employees who, admittedly, were guilty of failing to remit their arriendo collections. (As to the alleged false request for reimbursement signed by respondent, the Court finds that petitioners failed to present substantial evidence to show that there was irregularity in respondents approval of the questioned reimbursement for the expenses incurred during the birthday celebration of one of the companys former officers. In the same manner, the Court finds as unsubstantiated petitioners' allegation regarding the supposed failure of respondent to institute sufficient accounting standards leading to irregularities committed in handling the companys Petty Cash Fund. The Court agrees with respondent that in the six years that she rendered service to petitioners, her attention was never called to any insufficient accounting standards that supposedly exist in the company. On the contrary, respondent was able to present evidence to show that certain procedures were followed with respect to cash and check disbursements and collections.) G.R. No. 183383. April 5, 2010 ANABEL BENJAMIN and RENATO CONSOLACION, Petitioners, vs. AMELLAR CORPORATION, Respondent. CARPIO MORALES, J.: FACTS: Respondent Amellar provides IT service to LGUs, wherein during Oct 1999, petitioner Benjamin was hired and stayed as Project Data Controller of its Content Build Up (CBU) Dept since March 2001. By letter of March 2003, the municipal assessor of Mabini, Batangas informed the manager of respondent that its real property tax database was not 100% complete contrary to the report of respondents supervising data controller, Evangeline. Respondents Tech Manager Tandoc sent Benjamin a Memo regarding the 1st written complaint of such nature received from a client and that he was informed that petitioner SDC Consolacion allegedly gave specific oral instruction to Data Controllers and Encoders on field not to encode several decks of index cards of payments to beat the deadline. As per order of Benjamin, Consolacion gave a written explanation refuting such claim but stated that he has instructed the Land Tax Division, Treasurers Office to separate those recently posted with new payments to update later in order to have a systematic flow of mass updating of payments. Tandoc was not satisfied with Consolacions explanation and instructed Benjamin to conduct an investigation, so the latter sent Consolacion a memo notifying him of a formal investigation w/out any mention of actual date of formal hearing. It was only on April 23, 2003 that Tandoc directed Benjamin to inform Consolacion and Evangeline that the formal hearing would proceed at 1:45pm of said date. Respondent, allegding that Benjamin did not inform Consolacion of the hearing, preventively suspended her for 3 days for obstructing the conduct of due process, and also another 3 days for not obeying a direct order. Benjamin filed a complaint for illegal suspension before the NLRC against Respondent and/or Tandoc. On May 6, 2003, Tandoc sent Benjamin a memorandum apprising her that her dismissal was being sought due to Willful Breach of Trust Reposed in her, Gross and Habitual Neglect of Duties, and Willful Disobedience of Lawful Orders in Connection with Work. She was directed to submit within 72 hours a written answer on why she should not be dismissed on said grounds. Upon receipt of the Memorandum, Benjamin asked for a Bill of Particulars and for additional time to respond to the charges but Tandoc replied that the annex to the Memo was particular enough and gave her until May 14, 2003 to respond to which Benjamin reiterated her request on said date. On even date, Tandoc issued Consolacion a Memo informing him of his dismissal for willful breach of trust reposed in him and all related and applicable charges acceptable to the Philippine Labor Code Benjamin was issued a Notice on Decision to Dismiss a day after. Benjamin amended her Complaint, adding as causes of action: Illegal dismissal, damages, and attorneys fees. Consolacion also filed a complaint for illegal dismissal, nony-payment of OT pay, service incentive leave, damages and attorneys fees. Both cases being consolidated, LA Pati held that petitioners were illegally dismissed. Respondents were ordered jointly and severally liable to reinstate petitioners to their former positions w/out loss of seniority rights and to pay their full backwages subject to adjustment upon actual reinstatement. All other claims were dismissed for lack of merit. NLRC affirmed LAs Decision prompting respondent before the CA, which reversed the NLRC Decision and dismissed petitioners complaints. ISSUE: Whether or not there is proof of gross and habitual neglect of duties or loss of trust and confidence HELD: NO. On Petitioner Renato Consolacion Consolacion was terminated for willful breach of trust reposed in him and all related and applicable charges acceptable to the Philippine Labor Code. To terminate the services of an employee for loss of trust and confidence, two requisites must concur: (1) the employee concerned must be holding a position of trust and confidence and (2) there must be an act that would justify the loss of trust and confidence. Consolacion occupied a position imbued with trust and confidence, he being a supervising data controller. It was his primary duty to monitor and report the performance of the data controllers in relation to the scope of work contracted out to respondent. Respondent thus banks heavily on the report of Consolacion to monitor the output quality and quantity of its data controllers. On the basis of this report, respondent assesses its employees and bills its clients for work done. Respondent failed to justify its loss of trust and confidence on Consolacion even as it imputed to him via Notice of Formal Investigation of April 14, 2003 for non-compliance with established non-written and written procedures and standards and verbal ordrrs and/or instructions. These are too general and encompass just about any malfeasance. And nowhere in the Notice was there a detailed narration of facts and circumstances that would serve as basis to terminate Consolacion. In the case of King of Kinds Transport vs. Mamac on the importance of the 1st written notice: (1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. "Reasonable opportunity" under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses,the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees. Furthermore, the Hearing of April 23, 2003 on commonly encountered problems in the Imus project did not specify acts against Consolacion and was only an assessment conference among the DCs designed to pinpoint strengths and weaknesses in the work, which cannot stand as proxy for the requisite hearing. Respondent was itself not sure of what to charge petitioner Consolacion. It would appear that it was baiting him into admitting whatever malfeasance may be uncovered during the process.

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The other ground cited in the dismissal notice (all related and applicable charges acceptable to the Labor Code) evidently lacks particularity and does not clearly state what those related and applicable charges were. Such omnibus ground does not suffice at law. On Petitioner Anabel Benjamin Petitioner Benjamin as OIC of the CBU Department, who was dismissed for willful breach of trust, gross and habitual neglect of duties, and willful disobedience to lawful orders, also occupied a position of trust and confidence. Respondent failed to prove even a single act and failed to present any piece of documentary evidence as basis of its loss of trust and confidence in Benjamin. It merely harps on supposed numerous complaints yet only one written complaint on Mabini project was presented. It bears stressing in dismissing an employee for gross and habitual neglect of duties, the negligence should not merely be gross. It should also be habitual. There being nothing in the records to identify what specific duties Anabel violated and whether the violations were gross and habitual, any discussion herein is an exercise in futility. SC finds that respondent erred in preventively suspending petitioner Anabel for lack of basis, there being no serious and imminent threat to its life and property or to her co-workers. Likewise, SC found erroneous such suspension penalty for violating her right to due process. Respondent cannot suspend Anabel without hearing her side for her alleged disobedience since suspension in this instance was a penalty. Respondent should thus be made to reimburse Anabel for her suspension without pay covering 3 working days. Finally, that respondent did not even bother to calendar a hearing on Anabels case further betrays any constancy to due process. Anabels failure to give a written answer to the first notice notwithstanding, the same cannot be construed as a waiver of her right to a hearing. WHEREFORE, the assailed CA Decision is REVERSED and SET ASIDE. Respondent, Amellar Corporation, is ORDERED to reinstate petitioners, Anabel Benjamin and Renato Consolacion, to their former positions or their equivalent, without loss of seniority rights and privileges, and to pay them full backwages inclusive of allowances and other benefits or their monetary equivalent, from the time of their dismissal until actual reinstatement. If reinstatement is no longer feasible, respondent is directed to give them separation pay equivalent to at least one month salary for every year of service, computed from the time of engagement of their services up to the finality of this decision. Respondent is further DIRECTED to pay Anabel Benjamin her wages covering three working days for her illegal suspension. The records of this case are REMANDED to the Labor Arbiter for computation of petitioners respective monetary claims. No costs. SO ORDERED. G.R. No. 157861 (2 February 2010) Bibiana Farms and Mills, Inc. vs. Arturo Lado Brion, J: Facts: The Bibiana is an agricultural corporation engaged in hog and cattle-raising and corn milling. Arturo Lado started his employment with Bibiana on November 2, 1982 as Quality Controller of Feeds. When he was dismissed in 1998, Lado held the position of Warehouseman with the tasks of receiving incoming and outgoing feed ingredients; supervising the feed mill laborers; acting as empty sacks classifier and controller; and feeds ingredients classifier. On September 7, 1998, at about 9:30 a.m., Mildred Manzo transacted with Rosalia Manalo, the petitioners cashier, for the purchase of 3,000 pieces of empty sacks. Since the price of the sacks still had to be ascertained, Manalo advised Manzo to come back in the afternoon. When Manzo returned at 4:35 p.m., Manalo quoted the price at P3.50 per sack. Manalo then gave Manzo a note containing the number and words "3,000/mix-mix" and told her to proceed to the warehouse. Manzo did and showed the note to Lado. The latter in turn showed her the bundles of empty sacks (50 pieces per bundle) available for sale. At Manzos request, Lado loaded 68 bundles (or 3,400 pieces of empty sacks) in the dump truck for unloading at the gate after payment. Upon payment, however, Manalo only accepted the cash payment for 60 bundles (3,000 pieces) and refused to accept Manzos personal check for the excess; thus, Manzo only paid for the original 60 bundles purchased. Instead of personally overseeing the segregation and unloading of the excess 8 bundles on being informed (through the delivery receipt and the gate pass) that only 60 bundles were paid for, Lado allegedly delegated the task. The excess 8 bundles, however, were not removed from the truck and the whole lot was unloaded at the gate. When Manalo passed by the gate on her way home, she saw the sacks "dumped outside the guardhouse." She asked for a count of the sacks as they appeared to be more than the 60 bundles that Manzo purchased.4 She confirmed that there were 68 bundles outside the guardhouse. Lado was then put into preventive suspension during the investigation of the matter concerning his negligence. On September 15, 1998, Lim issued Lado a Notice of Termination, dismissing him from the service effective upon receipt, for "serious misconduct, dishonesty, willful breach of trust, fraud, loss of confidence and other grounds," based on the results of the investigation and after considering his written explanations dated September 9, 1998 and September 10, 1998. Lado filed a complaint for illegal dismissal against the petitioner and Lim. In defense, the petitioner alleged that Lado was validly dismissed for loss of trust and confidence due to dishonesty and fraud in the release of the excess 400 empty sacks, as well as for other infractions, such as extortion from laborers under his supervision in exchange for overtime work, habitual tardiness and absenteeism. It also claimed that Lado was afforded due process when he was required to submit his written explanations on the empty-sacks incident; when he was preventively suspended and duly informed of the investigation to be conducted on September 11, 1998 and when he received the Notice of Termination on September 18, 1998. The Labor Arbiter dismissed the complaint, which was reversed by the NLRC and affirmed by the CA. Hence, this petition. Issue: Whether or not Lado had been illegally dismissed.

Held: There was a valid cause for Lados dismissal for he was unmindful of his work as instructed to him by Manalo, considering his position in the company as Warehouseman, not an ordinary rank-and-file employee. There was a clear instruction to him regarding the retrieval of 8 bundles as what was paid was only for the 60 bundles. However, Lado did not see to it that the 8 bundles were retrieved; he even just instructed the same to be done by others without his supervision. This is a clear act of negligence and mishandling in its gross kind. With regards to the due process issue, it was shown that Lado was duly notified about the investigation and the cause for the same. Therefore, the Court reversed the appealed decision, and ruled that the dismissal and termination of Lado on the grounds of serious misconduct, dishonesty, willful breach of trust, fraud, and loss of confidence is proper. G.R. No. 179702 ROLANDO P. ANCHETA, vs DESTINY FINANCIAL PLANS, INC. and ARSENIO BARTOLOME. FACTS: In Dec. 2002, Respondent Destiny Financial Plans, Inc., a pre-need insurance company, hired petitioner as Head of its Marketing Group, with a compensation package of Ninety Thousand Pesos (P90,000.00) a month. On Feb. 2, 2004, BARTOLOME called a meeting between petitioner and the rest of the marketing team making several announcements, among which the resignation of Ancheta. On Feb 11, 2004, sent him a show-cause letter asking him to explain w/in 48 hrs why his services shouldnt be terminated for loss of confidence stating alleged misconduct on his side amounting to breach of trust. On feb 13, petitioner sent in his reply explaining and denying such allegations. On February 17, the Board of Directors terminated his services on the grounds of loss of confidence. Petitioner filed before the Labor Arbitera complaint for illegal dismissal with prayer for reinstatement, payment of full backwages, payment of 13th month pay, moral and exemplary damages, and attorneys fees, against respondent. The Labor arbiter found in favour of petitioner. On appeal, the NLRC reversed the decision, dismissing the same for lack of merit and denying the Motion for reconsideration. Petitioner filed a petition for certiorari before the CA, which found for the respondents, affirming with modification the decision of the NLRCm ordering the respondents to pay Ancheta nominal damages of Php100K for non-compliance with statutory due process. Hence this petition. ISSUE: Whether petitioners employment was validly terminated because of loss of confidence. HELD: Two requisites must concur in order that there be a valid dismissal from employment, namely: (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 to defend himself. 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 representative."

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The doctrine of loss of confidence requires the concurrence of the following: (1) loss of confidence should not be simulated; (2) it should not be used as a subterfuge for causes which are improper, illegal, or unjustified; (3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; (4) it must be genuine, not a mere afterthought to justify an earlier action taken in bad faith; and (5) the employee involved holds a position of trust and confidence. 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, trust and confidence. He must be invested with confidence on delicate matters, such as the custody, handling, care, and protection of the employer's property and/or funds. In order to constitute a just cause for dismissal, the act complained of must be "work-related" such as would show the employee concerned to be unfit to continue working for the employer As a rule, employers are allowed a wide latitude of discretion in terminating the employment of managerial personnel or those who, while not of similar rank, perform functions which by their nature require the employers full trust and confidence. Proof beyond reasonable doubt is not required. It is sufficient that there is some basis for 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.[21] This must be distinguished from the case of ordinary rank-and-file employees, whose termination on the basis of these same grounds requires a higher proof of involvement in the events in question; mere uncorroborated assertions and accusations by the employer will not suffice. Petitioner was a managerial employee of respondent company, holding a highly sensitive position. Being the Head of the Marketing Group of respondent company, he was in charge, among others, of the over-all production and sales performance of the company.[23] Thus, as aptly pointed out by the CA, his performance was practically the lifeblood of the corporation, because its earnings depended on the sales of the marketing group, which he used to head. Petitioners inability to perform the functions of his office to the satisfaction of his employer and the formers poor judgment as marketing head caused the company huge financial losses. The power to dismiss an employee is a recognized prerogative inherent in the employers right to freely manage and regulate his business. With regard to respondent companys compliance with procedural due process, we agree with the CA when it enunciated that: Be that as it may, this Court finds that the private respondents did not strictly comply with the two notice requirement in dismissing petitioner Ancheta. While private respondents sent a show cause letter to petitioner Ancheta, the same letter precipitately implemented termination procedures, i.e., demanded the return of the Executive elevator key which allows petitioner Ancheta access to the office premises and the surrender of the company car assigned to him, even as petitioner Ancheta had yet to answer and air his side. Such betrays the fact that the said show cause letter was but a formality and petitioner Anchetas dismissal is a foregone conclusion. It is thus apparent that private respondents did not comply with the procedural requirements of due process in dismissing petitioner Ancheta. Respondents failure to observe due process in the termination of employment of petitioner for a just cause does not invalidate the dismissal but makes respondent company liable for non-compliance with the procedural requirements of due process. The violation of petitioners right to statutory due process warrants the payment of nominal damages, the amount of which is addressed to the sound discretion of the court, taking into account the relevant circumstances. In this case, Php 30K.

LOSS OF CONFIDENCE
G.R. No. 123294. October 20, 2010 PHILIPPINE AIRLINES, INC.vs.NATIONAL LABOR RELATIONS COMMISSION and AIDA M. QUIJANO LEONARDO-DE CASTRO, J. Facts: Aida M. Quijano, complainant, rose from the ranks starting as accounting clerk until she became Manager-Agents Services Accounting Division (ASAD) in 1984. ASAD is the specific unit in PAL charged with the processing, verification, reconciliation, and validation of all claims for commission filed by agents worldwide. In 1989, an investigating committee (Espino Committee) formally charged Quijano as Manager-ASAD in connection with the processing and payment of commission claims to Goldair Pty. Ltd. wherein PAL overpaid commissions to Goldair amounting to several million Australian dollars during the period 1984-1987. Quijano was charged with failure on the job and gross negligence resulting in loss of trust and confidence. A Senior Accounts Analyst in ASAD (and was under Quijanos supervision) named Dora Jane Curammeng was specifically assigned to handle and process commissions of agents in the Australia Region, and the Goldair account was handled by her. Curammeng was accused of failing to verify the completeness of the documents supporting the claims. However, Curammeng had already resigned and became a resident of Canada at the time of the investigation. Pending further investigation, the Espino Committee placed Quijano under preventive suspension and at the same time required her to submit her answer. Her defenses include heavy load assigned to ASAD; reliance on the staffs judgment and competence particularly when random checking of commission claims; ASAD underwent scrutiny of 3 prestigious consulting firms and PALs own internal audit but there were no unfavorable findings. Per investigation, the Goldair fraud started in 1981 and continued until its discovery sometime in the latter part of 1987. And as of that year, Goldair had been PALs agent for about 17 years already. Meantime, PAL filed a civil case in Australia against Goldair seeking to recover AUD 11 million. Twice, Quijano went to Australia as witness for PAL. Thereafter, a settlement was reached whereby Goldair was to pay PAL a total of around AUD 7 million inclusive of court costs. A criminal case was nevertheless filed against Goldairs owner. Another team, the Ocampo Committee submitted its findings to the PAL Board of Directors, and the latter, in a resolution dated 1991 considered Quijano, among others ,resigned from the service for loss of confidence and for acts inimical to the interest of the company. Quijanos motion for reconsideration (MR) was denied by the Board which prompted her to file a case against PAL for illegal suspension and illegal dismissal. The Labor Arbiter (LA) dismissed Quijanos complaint for lack of merit. On appeal to the NLRC, the LAs decision was set aside. PAL was directed to pay Quijano her separation pay in accordance with its Special Retirement & Separation Program plus 10% of the total amount by way of attorneys fee. However, the NLRC was emphatic in declaring that it was not prepared to rule as illegal the preventive suspension and eventual dismissal from the service of Quijano because the last position that Quijano held, Manager-ASAD undeniably qualifies as a position of trust and confidence. PALs MR was denied by NLRC, hence this petition. Note: The parties do not dispute the validity of Quijanos dismissal from employment for loss of confidence and acts inimical to the interest of the employer. Loss of confidence as a just cause for termination of employment is premised from the fact that an employee concerned holds a position of trust and confidence. This situation holds where a person is entrusted with confidence on delicate matters, such as the custody, handling, or care and protection of the employers property. But, in order to constitute a just cause for dismissal, the act complained of must be workrelated such as would show the employee concerned to be unfit to continue working for the employer. The NLRC Decision, clearly laid out the reasons why it considered Quijano along with her other co-employees in PAL resigned from the service for loss of confidence and for acts inimical to the interest of the company. In Quijanos case, the Resolution underscored her acts of mismanagement and gross incompetence which made her fail to detect the irregularities in the Goldair account that resulted in huge financial losses for PAL. Issue: Whether the award of separation pay to Quijano is proper despite having been lawfully terminated for a just cause.

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Ruling: YES. Although the language of Article 2791 of the Labor Code is pregnant with the implication that a legally dismissed employee is not entitled to separation pay, in exceptional cases, the Supreme Court has granted separation pay to a legally dismissed employee as an act of social justice or based on equity. In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) does not reflect on the moral character of the employee or would involve moral turpitude. Serious misconduct as a valid cause for the dismissal of an employee is defined simply as improper or wrong conduct. It is a 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 of judgment. To be serious within the meaning and intendment of the law, the misconduct must be of such grave and aggravated character and not merely trivial or unimportant. However serious such misconduct, it must, nevertheless, be in connection with the employees work to constitute just cause for his separation. Moral turpitude has been defined as everything which is done contrary to justice, modesty, or good morals; an act of baseness, vileness or depravity in the private and social duties which a man owes his fellowmen, or to society in general, contrary to justice, honesty, modesty, or good morals. In the case at bar, the transgressions imputed to Quijano have never been firmly established as deliberate and willful acts clearly directed at making PAL lose millions of pesos. At the very most, they can only be characterized as unintentional, albeit major, lapses in professional judgment. Likewise, the same cannot be described as morally reprehensible actions. Thus, Quijano may be granted separation pay on the ground of equity. The SC, however, did not agree with the NLRC that Quijanos separation pay should be awarded in accordance with PALs Special Retirement & Separation Program plus 10 attorneys fees. Quijano was not separated from PALs employ due to mandatory or optional retirement but, rather, by termination of employment for a just cause. Thus, any retirement pay provided by PALs Special Retirement & Separation Program cannot be made to operate for the benefit of private respondent. Likewise, attorneys fees are not proper in this case because the same can only be awarded when the employee is illegally dismissed in bad faith and is compelled to litigate or incur expenses to protect his rights by reason of the unjustified act of his employer. The assailed NLRC decision was affirmed with modification that PAL pay Quijano one-half (1/2) month salary for every year of service as separation pay on equitable grounds. G.R. No. 151349 October 20, 2010 Alcantara vs. Philippine Commercial and International Bank LEONARDO-DE CASTRO, J.: FACTS: Petitioner Leandro M. Alcantara is a branch manager of Respondent PCIB(Bank) in Rizal Avenue, Manila branch. Petitioner had not been subject to any disciplinary action prior to present controversy. On December 12, 1997, the a report has been made to the Customer Care of the bank by a certain Romy Espiritu that petitioner is involved in a big syndicate. Two Certificates of Time Deposit (CTD) issued by PCIB were allegedly being used by the syndicate in their illegal activities. The CTDs were signed by the petitioner and Guillerma F. Alcantara, the head of Sales. However, the CTDs were unbooked and the duplicate control copy and PCIAV Input Document Copy do not state the due dates and term of the two (2) CTDs. Petitioner was the one who prepared and processed the CTDs. Petitioner was dismissed from employment because it was allegedly determined that the petitioner took advantage of the trust and confidence reposed in his position as branch manager and "falsified Bank records in order to facilitate a transaction amounting to P538,360,000.00 that was prejudicial to the welfare and interest of the Bank". Petitioner admitted that he was the one who processed and prepared the CTDs. He claims that the CTDs were not booked or recorded completely because the same were already cancelled. He further alleged that no bank policy nor rules and regulations prohibit a Branch Manager from assisting a depositor or depositors of the bank. Nothing was done in secrecy and CTDs were allegedly promptly cancelled owing to the failure of the clients to come up with the money within the time frame given by petitioner. On August 12, 1998, petitioner filed with the Regional Arbitration Branch of the NLRC a complaint for illegal dismissal and other priveleges and benefits with damages. The Labor Arbiter dismissed petitioners complaint for illegal dismissal for lack of merit. It held that there was substantial evidence that petitioner manipulated the records of respondent to facilitate the anomalous transactions of the members of the alleged criminal syndicate. Petitioner appealed the Labor Arbiters Decision. However, the NLRC affirmed the same and dismissed petitioners appeal for lack of merit. Thus, petitioner filed a petition for certiorari under Rule 65 of the Rules of Court with the Court of Appeals which was dismissed on account of petitioners failure to attach the material portions of the records of the NLRC case, and various relevant or pertinent documents, in accordance with paragraph 3, Section 3, Rule 46 of the 1997 Revised Rules of Civil Procedure so it was unable to resolve the issues presented to it and thus was constrained to dismiss the petition. Hence this petition. ISSUES: 1) Whether the CA is correct in dismissing the petition on pure technicalities. 2) Whether petitioners termination is substantially and procedurally valid. RULING: Petition is PARTLY MERITORIOUS. 1) With respect to the first issue, the SC held that failure to attach all pleadings and documents, by itself, is not a sufficient ground to dismiss a petition. In appropriate cases, the courts may liberally construe procedural rules in order to meet and advance the cause of substantial justice. Lapses in the literal observation of a procedural rule will be overlooked when they do not involve public policy, when they arose from an honest mistake or unforeseen accident, and when they have not prejudiced the adverse party or deprived the court of its authority. These conditions are present in the case at bar. Furthermore, 14 days after petitioners receipt of the Court of Appeals Resolution dismissing his petition, he filed a Motion for Reconsideration along with the documents deemed by the Court of Appeals as lacking in his originally filed petition. Technicalities should never be used to defeat the substantive rights of the other party. Considering that there was substantial compliance, a liberal interpretation of procedural rules in this labor case is more in keeping with the constitutional mandate to secure social justice. Instead of the case being remanded, the SC decided to rule on the case, which has been pending for nearly a decade, for its prompt disposition.

2)

With respect to the second issue, a) First on the SUBSTANTIVE aspect of petitioners dismissal, the SC held that a careful perusal of the record leaves it with no choice but to affirm the identical conclusions reached by both the Labor Arbiter and the NLRC that petitioner was indeed properly dismissed from work. Loss of confidence as a just cause for termination of employment is premised from the fact that an employee concerned holds a position of trust and confidence. This situation holds where a person is entrusted with confidence on delicate matters, such as the custody, handling, or care and protection of the employers property. But, in order to constitute a just cause for dismissal, the act complained of must be "work-related" such as would show the employee concerned to be unfit to continue

Art. 279. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

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working for the employer. As Branch Manager of the Rizal Avenue Branch of the respondent bank, petitioner undoubtedly held a position of trust and confidence. The SC did not give credence to petitioners claim that the Labor Arbiter and the NLRC decided his case purely on the basis of respondents evidence. A perusal of petitioners own pleadings and evidence readily showed his admission that he personally processed the two Certificates of Time Deposit (CTDs) at issue, despite his knowledge that they were unfunded. In fact, he admittedly issued them even before he received the purported managers checks that would fund the time deposits and, again by his own allegation, he had to cancel the CTDs when the promised checks were not delivered to him at the appointed time. According to the SC, it is incomprehensible why petitioner was so eager to issue the CTDs with the total amount of P538,360,000.00 on the mere verbal representations of the clients and the expedient of being shown a passbook from a different bank. The SC hardly find it believable that petitioner was, motivated by a noble desire to generate more business for the respondent bank. If he truly had the banks best interests at heart, with more reason that he would exercise caution before issuing CTDs for enormous amounts by waiting for the funds to be actually deposited instead of exposing his employer to great risk. The fact that petitioner had the unfunded CTDs eventually cancelled is of no moment. He should have never issued those CTDs in the first place since, through those documents, he was in effect certifying the existence of time deposits in his branch that were actually fictitious. Thus, it can be said that his obvious laxity or negligence in the issuance of the said CTDs was even tainted with dishonesty. This leads to the conclusion that respondent bank was justified in terminating petitioners employment on the ground of loss of trust and confidence. As a general rule, employers are allowed a wider latitude of discretion in terminating the employment of managerial personnel or those who, while not of similar rank, perform functions which by their nature require the employers full trust and confidence. This must be distinguished from the case of ordinary rank and file employees, whose termination on the basis of these same grounds requires a higher proof of involvement in the events in question; mere uncorroborated assertions and accusations by the employer will not suffice.

b)

With respect to the PROCEDURAL aspect of petitioners dismissal, it is settled that notice and hearing constitute the essential elements of due process in the dismissal of employees. The employer must furnish the employee with two written notices before termination of employment can be legally effected. The first apprises the employee of the particular acts or omissions for which his dismissal is sought. The second informs the employee of the employers decision to dismiss him. With regard to the requirement of a hearing, the essence of due process lies simply in an opportunity to be heard, and not that an actual hearing should always and indispensably be held. Facts shows that respondent more than acted in accordance with the due process required in the termination of an employee. It gave petitioner considerable leeway with regard to the submission of his written explanation by allowing multiple extensions of time to submit the same and by furnishing him the documents used in respondents investigation. Ultimately, even assuming that he was not fully heard during the employers investigation, it was petitioners fault because of his misguided insistence on having a trial-type hearing despite established jurisprudence stating that the mere opportunity to be heard would suffice as due process in administrative proceedings. In any event, petitioner was given full opportunity to prove his claim of illegal dismissal before the Labor Arbiter and the NLRC but he still failed to discharge his burden of proof.

G.R. No. 187120, February 16, 2010 PHILIPPINE JOURNALISTS, INC. vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER FEDRIEL S. PANGANIBAN and EDUARDO S. RIVERA BRION, J.: FACTS: PJI is a corporation engaged in the publication of People's Journal, People's Journal Tonight, People's Journal International, People's Taliba, Women's Journal, and Insider. In December 1978, it employed respondent Eduardo S. Rivera (Rivera) as proof reader. Rivera rose from the ranks over the years, becoming purchasing manager in 1998. His primary duty involved the canvassing and purchase of paper and other materials for PJI's day-to-day operations. Sometime in November 2002, Women's Journal implemented a calendar insertion project requiring paper-coated materials. Rivera canvassed and purchased the material sheets at P6.50 each, while a reliable quotation from Nation Paper Products Corporation (NAPPCO) shows a price of only P3.40 per sheet for this kind of paper with exactly the same specifications. On January 8, 2003, PJI's Chief Legal Counsel issued a memorandum requiring Rivera to explain in writing why he "should not be terminated from employment for defrauding or attempting to defraud the Company " in the canvassing and purchase of Womens Journals paper requirements. Rivera submitted his written explanation, denying that he defrauded or attempted to defraud PJI. Ruiz-Bruno issued a memorandum on the same day to Assistant Purchasing Manager Jean Alvarado (Alvarado), requiring her to explain the difference in the quotation prices. On the same day, Alvarado submitted her explanation, stating that she signed the canvass sheet as instructed by Rivera and she claimed that the figures were written by Rivera himself. In a memorandum dated February 7, 2003, Rivera was terminated "on the ground of loss of trust and confidence". Rivera filed a complaint for illegal dismissal. Labor Arbiter found that Rivera's dismissal was proper. The NLRC reversed the labor arbiter's decision which was affirmed by the CA. ISSUE: Is the dismissal on the ground of loss of trust and confidence valid? HELD: Yes. As the company's purchasing manager, Rivera held a position of trust and confidence; his role in the procurement of the company's operational requirements is critical. PJI is a publication company and is engaged in a highly competitive enterprise. The facts shows that Rivera arranged a purchase transaction markedly disadvantageous to the company mainly due to: (1) his failure to conduct an honest-to-goodness canvass of prices for the required paper material and (2) his dishonesty, or at least his misrepresentations, in making it appear that he canvassed two suppliers when he really dealt only with one of them. Substantial evidence exists justifying Riveras dismissal for a just cause loss of trust and confidence. For loss of trust and confidence to be a ground for dismissal, the law requires only that there be at least some basis to justify the dismissal. To place this conclusion in Riveras own terms, contrary to what he claimed, his dismissal was not on the basis of "mere speculation and conjecture," but on the basis of relevant evidence that a reasonable mind might accept to support a conclusion. In legal terms, this is the quantum of proof required in administrative proceedings.

ABANDONMENT
G.R. No. 167751 March 2, 2011 Harpoon Marine Services, Inc. and Jose Lido T. Rosit vs Fernan H. Francisco FACTS: Petitioner Harpoon, a company engaged in ship building and ship repair, with petitioner Rosit as its President and CEO, originally hired respondent in 1992 as its Yard Supervisor. In 1998, respondent left for employment elsewhere but was rehired by petitioner Harpoon and assumed his previous position a year after. On June 15, 2001, respondent averred that he was unceremoniously dismissed by petitioner Rosit. He was informed that the company could no longer afford his salary and that he would be paid his separation pay and accrued commissions. But petitioner Rosit offered only his separation pay. Respondent refused to accept it and also declined to sign a quitclaim. Respondent filed an illegal dismissal complaint. Petitioners denied having terminated respondent as the latter voluntarily abandoned his work after going on Absence Without Official Leave (AWOL) beginning June 22, 2001. Petitioners contended that when respondents absences persisted, several memoranda informing him of his absences were sent to him by ordinary mail and were duly filed with the DOLE on August 13, 2001. Upon respondents continuous and

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deliberate failure to respond to these memoranda, a Notice of Termination dated July 30, 2001 was later on issued to him. Likewise, petitioners contended that respondent was hired as a regular employee with a fixed salary and not as an employee paid on commission basis. The act of giving additional monetary benefit once in a while to employees was a form of recognizing employees efforts and cannot in any way be interpreted as commissions. The Labor Arbiter ruled that respondent was validly dismissed due to his unjustified absences and tardiness and that due process was observed. The NLRC initially affirmed but modified its previous ruling and held that respondents dismissal was illegal. CA affirmed the findings and conclusions of the NLRC ISSUE: Is respondent illegally dismissed? RULING: YES. Respondent was illegally dismissed for failure of petitioners to prove the existence of a just cause for his dismissal. We find no merit in petitioners contention that respondent incurred unexplained and habitual absences and tardiness. A scrutiny of the time card and payroll discloses that respondent incurred only three days of absence and no record of tardiness. As aptly held by the NLRC, the time card and payroll presented by petitioners do not show gross and habitual absenteeism and tardiness especially since respondents explanation of his three-day absence was not denied by petitioners at the first instance before the Labor Arbiter. No other evidence was presented to show the alleged absences and tardiness. On the other hand, Solares, a co-worker of respondent has stated under oath that, as their supervisor, respondent was diligent in reporting for work until June 20, 2001 when they heard the news concerning respondents termination from his job. Oddly, petitioners deemed it fit to give respondent his separation pay despite their assertion that there is just cause for his dismissal on the ground of habitual absences. This inconsistent stand of petitioners bolsters the fact that they wanted to terminate respondent, thus giving more credence to respondents protestation that he was barred and prevented from reporting for work. Jurisprudence provides for two essential requirements for abandonment of work to exist. The failure to report for work or absence without valid or justifiable reason and clear intention to sever the employer-employee relationship x x x manifested by some overt acts should both concur. Further, the employees deliberate and unjustified refusal to resume his employment without any intention of returning should be established and proven by the employer. The CA correctly ruled that petitioners failed to present evidence that they sent these notices to respondents last known address for the purpose of warning him that his continued failure to report would be construed as abandonment of work. . The award of backwages and separation pay in favor of respondent is therefore proper.Respondent is not entitled to the payment of commissions since the check vouchers and purported list of vessels show vagueness as to sufficiently prove the claim. Rosit could not be held solidarily liable with Harpoon for lack of substantial evidence of bad faith and malice on his part in terminating respondent.

G.R. No. 182070. February 16, 2011. E.G & I. CONSTRUCTION CORPORATION and EDSEL GALEOS, Petitioners, vs. ANANIAS P. SATO, NILO BERDIN, ROMEO M. LACIDA, JR., and HEIRS OF ANECITO S. PARANTAR, SR., namely: YVONNE, KIMBERLY MAE, MARYKRIS, ANECITO, JR., and JOHN BRYAN, all surnamed PARANTAR, Respondents. NACHURA, J.: Facts: Respondent Ananias P. Sato (Sato) was hired in October 1990 by petitioner E.G. & I. Construction Corporation as a grader operator.sato upon learnimg in april 2004 that the petitioner did not remit his sss contribution and requesting the latter to remit the same, he was removed as a grader operator and made to perform manual labor. On July 22, 2004, petitioners told Sato that they could no longer afford to pay his wages, and he was advised to look for employment in other construction companies. Sato however had been blacklisted in other construction companies and was prevented from entering the project sites of petitioners. On July 24, 2004, the project engineer of respondents Berdin, Parantar, and Lacida instructed them to affix their signatures on various documents. They refused to sign the documents because they were written in English, a language that they did not understand. Irked by their disobedience, the project engineer terminated their employment. On the same date, they were given their weekly wages. The following day, they were not allowed to enter the work premises. Respondents filed their respective complaints for illegal dismissal, underpayment of wages (wage differentials), holiday pay, thirteenth (13th) month pay, and service incentive leave pay. Petitioners denied that they illegally terminated respondents employment and that the respondents abandoned their work when they failed to report for work starting on July 22, 2004. Petitioner corporation sent letters advising respondents to report for work, but they refused. Petitioner corporation maintained that respondents are still welcome, if they desire to work. As to respondent Sato, petitioner corporation alleged that it admonished respondent for having an illicit affair with another woman; that, in retaliation, Sato complained to the SSS for alleged non-remittance of his premium contributions; that Satos work was substandard; and that he also incurred unexplained absences and was constantly reprimanded for habitual tardiness. LA rendered a decision finding that respondents were illegally dismissed from employment. In lieu of reinstatement due to strained relationship and as prayed for, each of them was granted separation pay equivalent to one (1) month pay for every year of service. On appeal, the NLRC reversed the ruling of the Labor Arbiter and ratiocinated that they failed to present a written notice of dismissal and that respondents individual complaints opted for the payment of separation pay instead of reinstatement. The NLRC opined that illegal dismissal was inconsistent with the prayer for separation pay instead of reinstatement. CA ruled that respondents were illegally dismissed. A written notice of dismissal is not a pre-requisite for a finding of illegal dismissal.Respondents did not abandon their work. They were refused entry into the companys project sites. Issue: whether respondents were illegally terminated from employment by petitioner corporation Held: We sustain the ruling of the CA. Petitioner corporation failed to prove that respondents were dismissed for just or authorized cause. In an illegal dismissal case, the onus probandi rests on the employer to prove that the dismissal of an employee is for a valid cause. The reason why respondents failed to report for work was because petitioner corporation barred them from entering its construction sites. It is a settled rule that failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment.The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified.32 Petitioner corporation failed to show overt acts committed by respondents from which it may be deduced that they had no more intention to work. Respondents filing of the case for illegal dismissal barely four (4) days from their alleged abandonment is totally inconsistent with our known concept of what constitutes abandonment. G.R. No. 166411. August 3, 2010. Elpidio Calipay vs. National Labor Relations Commission, et al. Facts: On July 16, 1999, a Complaint[ for illegal dismissal, unfair labor practice, underpayment of wages and 13th month pay, non-payment of service incentive leave pay, overtime pay, premium pay for holiday, rest day, night shift allowances and separation pay was filed by herein petitioner Elpidio Calipay, together with Alfredo Mission and Ernesto Dimalanta against herein private respondents Triangle Ace Corporation (Triangle) and Jose Lee. They alleged : that they were not given any specific work assignment; they performed various kinds of work imposed upon them by Lee; in discharging their functions, they were required by Lee to work for nine (9) hours a day, beginning from 7:00 a.m. and ending at 6:00 p.m. with a break of one hour at 12:00 noon; they were also required to report from Monday to Sunday; for work rendered from Mondays to Saturdays beyond the normal eight (8) working hours in a day, they were paid a uniform daily wage in the amount of P140.00 even during holidays; for work performed on Sundays, they were not paid any wage due to the policy of Lee that his workers must provide work without pay at least a

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day in the week under his so-called bayanihan system; in receiving their wages, they were not given any duly accomplished payslips; instead, they were forced to sign a blank form of their daily time records and salary vouchers. Furthermore, in May 1998, Lee confronted Calipay and Mission regarding their alleged participation and assistance in Dimalantas claim for disability benefits with the Social Security System; despite their denials, Lee scolded Calipay and Mission; this incident later led to their dismissal in the same month. Private respondents contention: the termination of Calipay and the other complainants was for a valid or just cause and that due process was observed. They claimed, among others, that Calipay was on absence without leave (AWOL) status from November 2, 1998 up to November 17, 1998; a memorandum dated November 17, 1998, requiring him to explain why his services should not be terminated, was sent by mail but he refused to receive the same; for failure to explain his side, another memorandum dated December 11, 1998 was issued terminating Calipays employment on the ground of abandonment of work; there is no unfair labor practice because there is no union; there is full compliance with the law regarding payment of wages and other benefits due to their employees; non-payment of nightshift premium is true, because the company does not operate at night. LA dismissed the Complaint for lack of merit. NLRC: (a) in dismissing the complainants from their employment, respondents failed to faithfully observe the requirements of notice and hearing rendering the said dismissals invalid and illegal; (b) the dismissals were not based on any of the just causes provided in Article 282 of the Labor Code; (3) the complainants failure to report for work were justified by their sudden termination from employment which nullified respondents contention that complainants were guilty of abandonment of work. NLRC issued a Resolution granting private respondents Motion for Reconsideration. As a consequence, Calipay and the other complainants moved for the reconsideration of the above-quoted Resolution, but the same was denied by the NLRC in a Resolution. Calipay and the other complainants then filed a special civil action for certiorari, with the CA which dismissed the same.Calipay filed a Motion for Reconsideration, but the CA denied it in its Resolution. Issue: Whether or not petitioners abandoned their work. Held: YES. Labor Arbiter made the following categorical findings: Complainant Ernesto Dimalanta claimed that he was dismissed on January 30, 1998. x x x Complainants Alfredo Mission and Elpidio Calipay, for their part, alleged that they were dismissed by the respondent[s] on May 25, 1998 and May 27, 1998, respectively x x x. The record, however, shows that complainants actually reported for work and were paid wages by the respondent company even after their alleged termination as evidenced by their Daily Time Records and Salary Vouchers submitted by respondents. Complainant Mission worked with the respondent until July 15, 1998, complainant Calipay up to November 2, 1998 while complainant Dimalanta until May 17, 1998. After those dates, they absented themselves from their work without any permission from the management or without filing any leave of absence. Thus, two (2) written notices were sent to each complainant and the Department of Labor and Employment by the respondent through its General Manager. Calipay and the other complainants failed to sufficiently refute these findings of the Labor Arbiter in their appeal filed with the NLRC. They did not present any evidence to prove their allegation. On the other hand, as held by the Labor Arbiter, private respondents were able to present the DTRs and Salary Vouchers of Calipay and the other complainants showing that they indeed reported for work even after their alleged termination from employment. Calipay and the other complainants also failed to present evidence to prove their allegation that they were forced to sign blank forms of their DTRs and Salary Vouchers. Moreover, why did petitioner file his complaint for illegal dismissal only on July 16, 1999, or more than one year after he claims to have been illegally dismissed?On the basis of the foregoing, the Court arrives at the conclusion that the filing of the complaint for illegal dismissal appears only as a convenient afterthought on the part of petitioner and the other complainants after they were dismissed in accordance with law. Jurisprudence has held time and again that abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so if the same is accompanied by a prayer for reinstatement. In the present case, however, petitioner filed his complaint more than one year after his alleged termination from employment. Moreover, petitioner and the other complainants inconsistency in their stand is also shown by the fact that in the complaint form which they personally filled up and filed with the NLRC, they only asked for payment of separation pay and other monetary claims. They did not ask for reinstatement. It is only in their Position Paper later prepared by their counsel that they asked for reinstatement. This is an indication that petitioner and the other complainants never had the intention or desire to return to their jobs. In fact, there is no evidence to prove that petitioner and his former coemployees ever attempted to return to work after they were dismissed from employment. On the other hand, private respondents were able to present memoranda or show-cause letters served on petitioner and the other complainants at their last known address requiring them to explain their absence, with a warning that their failure would be construed abandonment of work. Also, private respondents served on petitioner and the other complainants a notice of termination as required by law. Private respondents compliance with said requirements, taken together with the other circumstances above-discussed, only proves petitioner and the other complainants abandonment of their work. *Note: Petitioners basic contention is that the CA erred in dismissing the petition filed with it on the basis of strictly adhering to purely technical grounds. Petitioner argues that he cannot be solely faulted for his failure to timely file his appeal with the NLRC. It bears to reiterate the settled rule that the timely perfection of an appeal is a mandatory requirement, which cannot be trifled with as a mere technicality to suit the interest of a party. The rules on periods for filing appeals are to be observed religiously, and parties who seek to avail themselves of the privilege must comply with the rule. It is true that procedural rules may be waived or dispensed with in the interest of substantial justice. This Court may deign to veer away from the general rule if, on its face, the appeal appears to be absolutely meritorious. Indeed, in a number of instances, procedural rules are relaxed in order to serve substantial justice. However, the Court sees no reason to do so in this case as there is no reason to reverse the findings of the CA. G.R. No. 169227 : July 5, 2010 PHILIPPINE RURAL RECONSTRUCTION MOVEMENT (PRRM), Petitioner, vs. VIRGILIO E. PULGAR, Respondent. Facts: PRRM is a non-stock, non-profit, non-governmental organization. Pulgar was the manager of PRRM's branch office - the Tayabas Bay Field Office (TBFO) - in Quezon Province. When Pulgar was reassigned to PRRM's central office, PRRM, through Goyena Solis (Solis), conducted an investigation into alleged financial anomalies committed at the TBFO. In her investigation report, Solis stated that part of the funds allotted to the TBFO was missing or not properly accounted for. The report also stated that some of the receipts that the TBFO submitted to liquidate the organization's financial transactions were fictitious and manufactured. PRRM maintains that while the investigation was ongoing, Pulgar went on leave on March 3-10, March 20-25, and April 1-15, 1997. After the lapse of his last leave on April 15, 1997, Pulgar no longer reported to work, leading PRRM to believe that Pulgar had abandoned his work to evade any liability arising from the investigation. PRRM was therefore surprised to learn that Pulgar had filed an illegal dismissal case on April 3, 1997. Pulgar tells another tale. According to him, on March 17, 1997, he submitted a letter to PRRM to complain that he was not given the right to confront and question Solis,but his letter went unanswered. Thereafter, on March 31, 1997, he was not allowed to enter the premises of the organization. Pulgar also alleges that PRRM's representatives removed his personal properties and records from his office, placed them in boxes and kept them in storage. Believing he was constructively dismissed by PRRM's actions, Pulgar filed a complaint against PRRM on April 3, 1997 for illegal dismissal, illegal suspension, and nonpayment of service incentive leave pay and 13thmonth pay. Pulgar also asked for actual damages, moral damages, and attorney's fees. ISSUE: Whether or not Pulgar was illegally dismissed from employment. Ruling: The court ruled in the negative.

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Primarily, SC underscores the fact that when Pulgar filed an illegal dismissal complaint on April 3, 1997, he was still on leave from the organization. From PRRMs standpoint, Pulgar was still its employee when he filed the illegal dismissal case against the organization. From Pulgars own admissions, SC considered the following facts to be established: First, Pulgar took funds intended for one activity or project and applied them to other activities/projects. Second, Pulgar took the savings from the TBFO and placed them in a bank account under his own name. To date, Pulgar has not turned over these funds to the PRRM. Third, Pulgar submitted manufactured and fake receipts to PRRM to liquidate TBFOs expenses. Noticeably, from Pulgars disclosures alone, a prima facie case for estafa can already be made out against Pulgar. With the danger of criminal prosecution hanging over his head, Pulgars abrupt decision to terminate his employment with PRRM becomes easily understandable. While we recognize the rule that in illegal dismissal cases, the employer bears the burden of proving that the termination was for a valid or authorized cause, in the present case, however, the facts and the evidence do not establish a prima facie case that the employee was dismissed from employment.Before the employer must bear the burden of proving that the dismissal was legal, the employee must first establish by substantial evidence the fact of his dismissal from service. Logically, if there is no dismissal, then there can be no question as to its legality or illegality. Bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence. As we said in Machica v. Roosevelt Services Center, Inc.: The rule is that one who alleges a fact has the burden of proving it;thus, petitioners were burdened to prove their allegation that respondents dismissed them from their employment. It must be stressed that the evidence to prove this fact must be clear, positive and convincing. The rule that the employer bears the burden of proof in illegal dismissal cases finds no application here because the respondents deny having dismissed the petitioners Although under normal circumstances, an employee's act of filing an illegal dismissal complaint against his employer is inconsistent with abandonment; in the present case, we simply cannot use that one act to conclude that Pulgar did not terminate his employment with PRRM, and in the process ignore the clear, substantial evidence presented by PRRM that proves otherwise. Our ruling on this point in Leopard Integrated Services, Inc. v. Macalinao is very relevant. We said: The fact that respondent filed a complaint for illegal dismissal, as noted by the CA, is not by itself sufficient indicator that respondent had no intention of deserting his employment since the totality of respondent's antecedent acts palpably display the contrary. In Abad v. Roselle Cinema, the Court ruled that:chanrobles virtualaw library The filing of a complaint for illegal dismissal should be taken into account together with the surrounding circumstances of a certain case. In Arc-Men Food Industries Inc. v. NLRC, the Court ruled that the substantial evidence proffered by the employer that it had not, in the first place, terminated the employee, should not simply be ignored on the pretext that the employee would not have filed the complaint for illegal dismissal if he had not really been dismissed. "This is clearly a non-sequitur reasoning that can never validly take the place of the evidence of both the employer and the employee." While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. Management also has its rights which are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, the Supreme Court has inclined, more often than not, toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded the Court to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine. G.R. No. 176717. March 17, 2010 Evangeline Cobarrubias vs. Saint Louis Univesity, Inc. Facts: In 1982, Evangeline C. Cobarrubias was hired as a faculty member at St. Louis University, Inc. in Baguio City. By letter of May 23, 2003, respondents President Rev. Fr. Paul Van Parijs informed petitioner that she had failed to meet the required minimum evaluation rating for faculty members during the 5-year period beginning school year 1998 until 2003 to thus place her on forced leave during the first semester of school year 2003-2004; and that while on forced leave, all benefits due her would be suspended following Section 7.7 of the existing Collective Bargaining Agreement (CBA) between respondent and the Union of Faculty and Employees of Saint Louis University. Petitioner was also advised that "before the lapse of 30 days prior to the end of the First Semester or on or before 12 September 2003," she should "inform in writing her readiness and availability to teach during the Second Semester ". The cited CBA provision reads: Section 7.7. For teaching employees in college who fail the yearly evaluation, the following provisions shall apply: a) Teaching employees who are retained for 3 cumulative years in 5 years, shall be on forced leave for 1 regular semester during which period all benefits due them shall be suspended; b) Teaching employees who obtain evaluation ratings below 80 for 3 cumulative years in 5 years shall be terminated. Under the guidelines for Faculty Promotion of respondents Handbook, a faculty member is "retained in rank if he does not obtain the required rating for that particular rank." And under respondents Evaluation Manual, a faculty member is evaluated on the basis of his rank. Before the first semester of the 2003-2004 school year began or in June 2003, petitioner attempted to report for work, but as she was placed on forced leave, she was not given any teaching load. Petitioner thereupon filed on June 5, 2003 a complaint for illegal dismissal with prayer for reinstatement, backwages, moral and exemplary damages, attorneys fees and payment of service incentive leave before the Regional Arbitration Branch, CAR of the NLRC. The Executive Labor Arbiter, for lack of jurisdiction, was later to refer the case to the NCMB by Order of January 19, 2005. The Voluntary Arbitrator declared the stated CBA provision as void as it does not reflect the University policy as the CBA provision imposes a penalty. The CA reversed the decision as it ruled that the Voluntary Arbitrator exceeded its authority because it should have only interpreted the CBA between the parties and not declare its validity. Hence, this petition. Issue: Whether or not petitioner was illegally dismissed. Held: Petitioner was, for five times, notified in writing by respondent to resume teaching for the second semester of school year 2003-2004 following the service of her suspension during the first semester. She was advised that a teaching load had already been prepared for her. Respondent never ever replied to those notices. Petitioners justification for her failure to respond to the notices that her acceptance of the offer could be constituted as a waiver of her claims is not indeed a valid excuse. At all events, petitioner contends that her filing of a complaint for illegal dismissal was a manifestation of her desire to return to her job and negated any intention to severe the employer-employee relationship. But petitioner forgot that her complaint for "illegal dismissal" which she filed on June 5, 2003 sprang, not from her dismissal on December 6, 2003 due to abandonment but from her suspension during the first semester of school year 2003-2004. While the filing of a complaint with a prayer for reinstatement negates an intention to sever the employer-employee relationship, the same contemplates an action made subsequent to dismissal. Therefore, the Court affirmed the appealed decision that there was just cause to terminate petitioner from her work. G.R. No. 177664 23 December 2009 CRC AGRICULTURAL TRADING vs. NLRC Brion, J. Facts: Roberto Obias was employed by CRC Agricultural as a driver sometime in 1985. Obias worked as such until he met an accident in 1989, after which CRC no longer allowed him to work. After 6 years, CRC again hired Obias as a driver and offered him to stay inside the companys premises. Sometime in March 2003, CRC ordered Obias to have the alternator of one of its vehicles repaired. Obias brought the vehicle to a repair shop and subsequently gave CRC two receipts issued by the repair shop. The latter suspected that the receipts were falsified and stopped talking to him and giving him work assignments. After a month, CRC no longer gave Obias any salary. As a result, Obias and his family moved out of the CRCs compound and relocated to a nearby place.

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On June 2004, Obias filed a complaint for illegal dismissal against CRC and its owner, Rolando Catindig before the Labor Arbiter. In opposing the complaint, CRC claimed that Obias was a seasonal driver; his work was irregular and was not fixed and that CRC paid him under a no work no pay basis. They maintained that they did not anymore engage his services as they had already lost trust and confidence in him after discovering that he had forged receipts for the vehicle parts he bought for them. The labor arbiter ruled in favor of Obias and held that as a regular employee, the latters services could only be terminated after the observance of due process. The labor arbiter likewise disregarded CRCs charge of abandonment against Obias. This was reversed by NLRC, which ruled that it was Obias himself who decided to move his family out of CRCs lot; hence, no illegal dismissal occurred. Moreover, Obias could not claim wages for the days he did not work, as he was employed by the petitioners under a no work no pay scheme. However, the NLRC decision was reversed and set aside by the CA. Issue: Whether or not there was an illegal dismissal. Held: Yes. The SC reversed CAs decision and held the following:

That there was an employer-employee relationship between Obias and CRC by applying the four Control Test. The fact the respondent was paid under a no work no pay scheme, assuming this claim to be true, is not significant. The no work no pay scheme is merely a method of computing compensation, not a basis for determining the existence or absence of employer-employee relationship. That there was no abandonment of work on the part of Obias Abandonment of work, or the deliberate and unjustified refusal of an employee to resume his employment, is a just cause for the termination of employment under paragraph (b) of Article 282 of the Labor Code, since it constitutes neglect of duty. The jurisprudential rule is that abandonment is a matter of intention that cannot be lightly presumed from equivocal acts. 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 intent, manifested through overt acts, to sever the employer-employee relationship. The employer bears the burden of showing a deliberate and unjustified. In the present case, CRC did not adduce any proof to show that Obias clearly and unequivocally intended to abandon his job or to sever the employer-employee relationship. Moreover, the respondents filing of the complaint for illegal dismissal strongly speaks against the petitioners charge of abandonment; it is illogical for an employee to abandon his employment and, thereafter, file a complaint for illegal dismissal. That Obias was constructively dismissed. Case law defines constructive dismissal as a cessation of work because continued employment has been rendered impossible, unreasonable, or unlikely, as when there is a demotion in rank or diminution in pay or both or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. The test of constructive dismissal is whether a reasonable person in the employees position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but is made to appear as if it were not. In fact, the employee who is constructively dismissed might have been allowed to keep coming to work. Constructive dismissal is therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer.

CLOSURE OF BUSINESS
G.R. No. 178397 October 20, 2010 PEAFRANCIA TOURS AND TRAVEL TRANSPORT, INC., Petitioner,vs. JOSELITO P. SARMIENTO and RICARDO S. CATIMBANG, Respondents. FACTS: Since October 1993, until his alleged termination on October 30, 2002, respondent Joselito Sarmiento (Sarmiento) worked as a bus inspector of petitioner Peafrancia Tours and Travel Transport, Inc. (petitioner), earning a daily wage of P198.00. He filed a complaint for illegal dismissal against herein petitioner PEAFRANCIA TOURS AND TRAVEL TRANSPORT, INC. (PTTI) on November 26, 2002. Meanwhile, respondent Ricardo Catimbang (Catimbang) also worked for petitioner as a bus inspector from February 1997 until his termination on October 30, 2002. He was also paid a daily wage of P198.00. According to Sarmiento and Catimbang, in the middle of October 2002, a meeting was called by petitioner's President and General Manager, Bonifacio Cu, wherein respondents were introduced to Alfredo Perez, the owner of ALPS Transportation, as the new owner of petitioner, having allegedly bought the same. On October 30, 2002, respondents received their last pay with a letter informing them that their application with the company had been held in abeyance. Sarmiento was paid P26,730.00 as separation pay and P4,686.00 as 13th month pay; while Catimbang was paid P17,820.00 as separation pay and P4,851.00 as 13th month pay. Respondents, however, learned that, several days after their termination, Bonifacio Cu continued to operate petitioner bus company. In response to these allegations, PTTI maintained that Petitioner argued that the matter of rehiring respondents rested on the sound discretion of its new owners, and the latter could not be compelled to absorb petitioner's former employees since the same was not part of the deal. Petitioner alleged that respondents submitted their application for reemployment but, after evaluation, the new owners opted not to hire respondents. While respondents' case for illegal dismissal was pending before the LA, a notice was issued by Perez to all employees of petitioner, stating that, effective February 11, 2003, the management of the company shall revert to its former President, Bonifacio Cu. On February 28, 2003, Bonifacio Cu wrote Alfredo Perez relative to the latter's failure to comply with their agreement and the decision to rescind the sale involving petitioner. Thereafter, sometime in March 2003, Bonifacio Cu entered into a transaction, denominated as a "Deed of Sale with Assignment of Franchise (By Way of Dation in Payment)," with Southern Comfort Bus Co., Inc. (SCBC). The LA rendered a decision in favor of PTTI. This decision was reversed by the NLRC, finding that there was no sale made by PTTI. The CA ruled in favor of respondents. It held that petitioner failed to establish its allegation that it was suffering from business reverses. Likewise, the CA affirmed the NLRC's findings that petitioner did not actually sell its business to the Perez family and to SCBC. ISSUE: Whether respondents were legally terminated from employment by reason of the sale of the business enterprise and the consequent change or transfer of ownership/management. HELD: NO. Although it has been held that a change of ownership in a business concern is not proscribed by law. Lest petitioner forget, however, the sale or disposition must be motivated by good faith as a condition for exemption from liability. Thus, where the charge of ownership is done in bad faith, or is used to defeat the rights of labor, the successor-employer is deemed to have absorbed the employees and is held liable for the transgressions of his or her predecessor. But, in this case, there is no successor-employer because there was no actual change of ownership. It is sustained the uniform factual finding of both the NLRC and the CA that no actual sale transpired and, as such, there is no closure or cessation of business that can serve as an authorized cause for the dismissal of respondents. The CA also found that the records explicitly show that PTTTI failed to establish its allegation that it was suffering from business reverses. Neither was there proof that indeed a sale was made and executed on 01 October 2002 involving the company's assets in favor of ALPS Transportation owned by the Perez family. It did not present any documentary evidence to support its claim that it sold the same to ALPS Transportation. On the contrary, PTTTI continuously operates under the same name, franchises and routes and under the same circumstances as before the alleged sale.

G.R. No. 165951 SOLIDBANK CORPORATION v. NLRC

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FACTS: In May 2000, petitioner decided to cease its commercial banking operations and forthwith surrendered to the Bangko Central ng Pilipinas its expanded banking license. As a result of petitioners decision to cease its operations, 1,867 of its employees would be terminated. On July 25, 2000, petitioner sent individual letters to its employees, including respondents, advising them of its decision to cease operations and informing them that their employment would be terminated om August 31, 2000. On July 31, 2000, petitioner sent to the Department of Labor and Employment a letter informing said office of the termination of its employees. The separation package offered to Solidbankers is more than what is required by law. Separation pay given to its employees was equivalent to 150% of gross monthly pay per year of service, and cash equivalent of earned and accrued vacation and sick leaves as a result of their dismissal. However on September 27, 2000, respondents filed with the Labor Arbiter complaints for illegal dismissal, underpayment of separation pay, plus damages and attorneys fees, On July 22, 2002, the LA rendered a Decision ruling that respondents were validly terminated from employment as a result of petitioners decision to cease its banking operations. The LA, however, inspired by compassionate justice, awarded financial assistance of one months salary to respondents. With this, each complainant given a financial assistance of one months salary. On appeal NLRC affirmed that the employees were validly terminated and modified the amount of financial assistance by increasing the same to two months salary out of compassionate justice. On May 28, 2004, the CA rendered a Decision reversing the Decision of the NLRC. The CA shared the view of the LA that respondents should only be awarded one months salary as financial assistance and not two months salary as previously decreed by the NLRC. ISSUE: Whether or not the employees should be given additional award of one months salary as financial assistance based on compassionate justice despite already given separation pay and other benefits more than whats required by law RULING: 1) The LA and the NLRC and CA have already determined that their dismissal was valid. They are accorded not only great respect but also finality, and are deemed binding upon the SC. Hence the dismissal was valid 2) On the merits of the case, Article 283 provides that in case of cessation of operations, the employer is only required to pay his employees a separation pay of one month pay or at least one-half month pay for every year of service, whichever is higher. That is all that the law requires. Here, petitioner paid respondents the following: (a) separation pay computed at 150% of their gross monthly pay per year of service; and (b) cash equivalent of earned and accrued vacation and sick leaves. Clearly, petitioner had gone over and above the requirements of the law. Despite this, however, petitioner has been ordered to pay respondents an additional amount, equivalent to one months salary, as a form of financial assistance. SC hence finds that the award of financial assistance is bereft of legal basis and serves to penalize petitioner who has complied with the requirements of the law. Solidbank has complied with the mandate of the law. Hence, it would be unjust and inequitable to allow the employees to receive higher benefits than those prescribed by the Labor Code and jurisprudence. 3) Moreover, a review of jurisprudence relating to the application of compassionate and social justice in granting financial assistance in labor cases shows that the same has been generally used in instances when an employee has been dismissed for a just cause under Article 282 of the Labor Code and not when an employee has been dismissed for an authorized cause under Article 283. The reason that the law does not statutorily grant separation pay or financial assistance in instances of termination due to a just cause(Art 282) is precisely because the cause for termination is due to the acts of the employee. In such instances, however, this Court, inspired by compassionate and social justice, has in the past awarded financial assistance to dismissed employees when circumstances warranted such an award. It is clear that the causes of the termination of an employee under Article 283 are due to circumstances beyond their control, such as when management decides to reduce personnel based on valid grounds, or when the employer decides to cease operations. Thus, the bias towards labor is very apparent, as the employer is statutorily required to pay separation pay, the amount of which is also statutorily prescribed. Petiton is GRANTED. Order of CA is reversed and set aside.

REDUNDANCY
G.R. No. 165381. 9 February 2011 Nelson Culili vs Eastern Telecommunications, Inc. Leonardo De Castro, J FACTS: Eastern Telecommunications Philippines, Inc. (ETPI), respondent, is a telecommunications company engaged in the business of establishing commercial telecommunications systems and leasing of international datalines or circuits. Petitioner Nelson A. Culili (Culili) was employed by ETPI as a Technician in its Field Operations Department on January 27, 1981. On December 12, 1996, Culili was promoted to Senior Technician. Due to interconnection problems with the Philippine Long Distance Telephone Company (PLDT), poor subscription and cancellation of subscriptions, and other business difficulties, ETPI was forced to stop its installation operations. This compelled ETPI to implement a RightSizing Program which consisted of two phases: the first phase involved the reduction of ETPIs workforce to only those employees that were necessary and which ETPI could sustain; the second phase entailed a company-wide reorganization which would result in the transfer, merger, absorption or abolition of certain departments of ETPI. For the first phase, ETPI, in 1998, offered to its employees who had rendered at least fifteen years of service, the Special Retirement Program, which consisted of the option to voluntarily retire at an earlier age and a retirement package equivalent to two and a half (2) months salary for every year of service. At first, this offer was rejected by the Eastern Telecommunications Employees Union (ETEU). Later on, ETPI re-offered the Special Retirement Program and the corresponding retirement package to one hundred two (102) employees who qualified for the program. Of all the employees who qualified for the program, only Culili rejected the offer. ETPI, on March 1, 1999 proceeded with the second phase which necessitated the abolition, transfer and merger of a number of ETPIs departments. The functions of the Customer Premises Equipment Management Unit, Culilis unit, was absorbed by the Business and Consumer Accounts Department. The abolition of the Service Quality Department rendered the specialized functions of a Senior Technician unnecessary. As a result, Culilis position was abolished due to redundancy and his functions were absorbed by Andre Andrada. Culili later discovered that his name was omitted in ETPIs New Table of Organization. In a letter dated March 8, 1999, ETPI, through its Assistant Vice President Stella Garcia, informed Culili of his termination from employment effective April 8, 1999. Culili argued that he was illegally dismissed because there was no valid cause to terminate his employment. He also claimed that ETPI failed to prove that his position had become redundant and that his functions as a Senior Technician could not be considered a superfluity because his tasks were crucial and critical to ETPIs business. ISSUE: Was Culili validly dismissed on the ground of redundancy?

RULING: Yes. Article 283 of the Labor Code providesArt. 283. Closure of establishment and reduction of personnel. - The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to

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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. A fraction of at least six (6) months shall be considered one (1) whole year. ETPI was upfront with its employees about its plan to implement a Right-Sizing Program. Even in the face of initial opposition from and rejection of the said program by ETEU, ETPI patiently negotiated with ETEUs officers to make them understand ETPIs business dilemma and its need to reduce its workforce and streamline its organization. The records show that ETPI had sufficiently established not only its need to reduce its workforce and streamline its organization, but also the existence of redundancy in the position of a Senior Technician. As explained by Mr. Arnel D. Reyel, the Head of both the Business Services Department, the Service Quality Department was abolished and its functions were absorbed by the Business and Consumer Accounts Department and the Corporate and Major Accounts Department. With the abolition and resulting simplification of the Service Quality Department, one of the units thereunder, the Customer Premises Equipment Maintenance (CPEM) unit, to which Culili belongs, was transferred to the Business and Consumer Accounts Department. Since the Business and Consumer Accounts Department had to remain economical and focused yet versatile enough to meet all the needs of its small and medium sized clients, it was decided that, the specialized functions of a Senior Technician in the CPEM unit whose sole function was essentially the repair and servicing of ETPIs telecommunications equipment was no longer needed. Moreover, in the new table of organization that the management approved, one hundred twelve (112) employees were redeployed and nine (9) positions were declared redundant. It is inconceivable that ETPI would effect a company-wide reorganization of this scale for the mere purpose of singling out Culili and terminating him. If Culilis position were indeed indispensable to ETPI, then it would be absurd for ETPI, which was then trying to save its operations, to abolish that one position which it needed the most. Contrary to Culilis assertions that ETPI could not do away with his functions as long as it is in the telecommunications industry, ETPI did not abolish the functions performed by Culili as a Senior Technician. What ETPI did was to abolish the position itself for being too specialized and limited. The functions of that position were then added to another employee whose functions were broad enough to absorb the tasks of a Senior Technician. G.R. No. 163091 October 6, 2010 COCA-COLA BOTTLERS PHILIPPINES, INC., Petitioner, vs. ANGEL U. DEL VILLAR, Respondent. LEONARDO-DE CASTRO, J.: FACTS: The Company, one of the leading and largest manufacturers of beverages in the country, initially hired respondent Angel U. del Villar (Del Villar) as Physical Distribution Fleet Manager with a job grade of S-7 and monthly salary of P50,000.00, aside from the use of a company car, gasoline allowance, and annual foreign travel, among other benefits. As part of the reorganization of the Company, Del Villar became the Transportation Services Manager, under the Business Logistic Directorate, headed by Director Edgardo I. San Juan (San Juan). As Transportation Services Manager, Del Villar prepares the budget for the vehicles of the Company nationwide. While serving as Transportation Services Manager, Del Villar submitted a Report to the Company President, Natale J. Di Cosmo (Di Cosmo), detailing an alleged fraudulent scheme undertaken by certain Company officials in conspiracy with local truck manufacturers, overpricing the trucks purchased by the Company by as much as P70,000.00 each. In the same Report, Del Villar implicated San Juan and Jose L. Pineda, Jr. (Pineda), among other Company officials, as part of the conspiracy. Pineda then served as the Executive Assistant in the Business Logistic Directorate in charge of the Refrigeration Services of the Company. The Company embarked on a reorganization of the Business Logistic Directorate. As a result, the functions related to Refrigeration were assigned to the Transportation Services Manager, which was renamed the Transportation and Refrigeration Services Manager. Mr. Nathaniel L. Evangelistawas appointed the Corporate Transportation and Refrigeration Services Manager, replacing both Del Villar and Pineda. Pineda was then appointed as the Corporate Purchasing and Materials Control Manager, while Del Villar as Pinedas Staff Assistant. These new appointments took effect on May 1, 1996. On July 8, 1996, seven months after the submission of his Report on the fraudulent scheme of several company officials, Del Villar received a Memorandum5 from San Juan informing Del Villar that (1) Del Villar was designated as Staff Assistant to the Corporate Purchasing and Materials Control Manager, with a job grade of NS-VII; (2) with Del Villars new assignment, he ceased to be entitled to the benefits accruing to an S-7 position under existing company rules and policies; and (3) Del Villar was to turn over the vehicle assigned to him as Transportation Services Manager to Pineda by July 10, 1996. Although as the Staff Assistant of the Corporate Purchasing and Materials Control Manager, Del Villar continued to receive the same salary as Transportation Services Manager, but his car and other privileges were withdrawn and he spent his time at his new post sitting "at a desk with no meaningful work whatsoever."6 Del Villar believed that he was demoted by the Company to force him to resign. Unable to endure any further the harassment, Del Villar filed with the Arbitration Branch of the NLRC a complaint against the Company for illegal demotion and forfeiture of company privileges. Del Villar also impleaded in his complaint Company President Di Cosmo, Vice-President and General Manager Jaime G. Oracion (Oracion), Senior Vice-President and Human Resources Director Rosa Maria Chua (Chua), San Juan, and Pineda. The Company failed to appear, despite due notice, at the scheduled preliminary conference before the NLRC Arbitration Branch. Del Villar filed his Position Paper, supported by his Complaint Affidavit. The Company filed a Motion to Dismiss praying for the dismissal of Del Villars complaint on the ground that Del Villar had no cause of action. The Company reasoned that in appointing Del Villar as the Staff Assistant of the Corporate Purchasing and Materials Control Manager, from his former position as Transportation Services Manager, the Company was merely exercising its inherent management prerogative to transfer an employee from one position to another. The Company also contended that Del Villar had no vested right to the privileges he previously enjoyed as Transportation Services Manager. Labor Arbiter The Labor Arbiter rendered a Decision in Del Villars favor. The Labor Arbiter held that the allegations in Del Villars complaint sufficiently presented a cause of action against the Company. The Company, in filing a Motion to Dismiss, hypothetically admitted the truth of the facts alleged in the complaint, and the failure of the Company to deny or rebut Del Villars allegations of bad faith on the part of the Company, gave rise to the presumption against the latter. The issue as to whether or not the Company acted illegally in demoting Del Villar is, therefore, answered in the affirmative. This office is inclined to believe and so holds that the reorganization of [the Company] appears to have been done sans the necessary requisite of good faith, after [Del Villar] had filed his complaint to the company President detailing the scam involving the purchase of the truck fleet of 1996.[Del Villar] was not outrightly dismissed; instead, he was removed from his former position as Transportation Services Manager, and demoted to Staff Assistant to the Corporate Purchasing and Materials Control Manager. Furthermore, as "Staff Assistant" [Del Villar] allegedly receives his usual salary but his car privileges, gasoline allowances, and foreign travel were withdrawn and he now sits at a desk "with no meaningful work whatsoever."[Del Villar] appears to have been singled out or discriminated upon due to his having reported the 1996 truck scam, and his present isolation can be seen as a punishment for acting in a righteous and forthright manner. Otherwise, as a "Staff Assistant" [Del Villar] should have been given some meaningful or responsible work appurtenant to the job designation. This Office finds and so holds that in all the foregoing rulings, the concept of management prerogative is limited or otherwise qualified. Procedurally and substantively, [the Company] through its named officers appears to have acted illegally and in bad faith in its purported "reorganization", in demoting [Del Villar] and in removing [Del Villars] company privileges. (According to the Labor Arbiter, had [Del Villar] resigned under the circumstances, he could be said to have been constructively discharged because a constructive discharge is defined as "a quitting because continued employment is rendered impossible, unreasonable and unlikely, as an offer involving demotion in rank and a diminution in pay"). The Company appealed to the NLRC. While the case was still pending appeal before the NLRC, Del Villar received a letter signed by one Virgilio B. Jimeno for the Company, which read:

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xxx Your position has been determined as no longer necessary due to the reorganization of the Business Logistics Directorate. The Transportation and Refrigeration Services Department of the Technical Operations Directorate has absorbed your function and our efforts to transfer you to a similar position within the organization have not been successful. Thus, you are considered separated from [the Company] effective May 31, 1998 x xx NLRC Contrary to the Labor Arbiters pronouncement that [the Company] should have rebutted allegations of bad faith and malice, we are more inclined to apply the presumption of good faith. Mere conclusions of fact and law should not be used as bases for an automatic finding of bad faith. As it is, we do not even see any disclosure of the scam and his alleged demotion. If indeed the so-called "great grandmother of Coca cola scams of 1996" were true, the logical consequence of such disclosure is for the president of the company to dismiss the erring employees and officers for their highly irregular acts and not to penalize [Del Villar] for making such disclosure. This is amply supported by the fact that the [the Company] conducted a thorough investigation of the reported scam and even obtained the services of an independent auditor to determine whether the alleged anomalous transactions were actually irregular and/or questionable. This manifests that [Del Villars] disclosure was taken seriously contrary to his claims of discrimination. Accordingly, it cannot be said that the act of the [Company] was retaliatory or penal in nature nor tainted with bad faith and/or malice. Otherwise, [the Company] would not have given grave attention to the disclosure of [Del Villar]. On the issue of whether there was a demotion, we are of the view that it was improper to conclude that [Del Villars] movement from the position of Transportation Services Manager to Staff Assistant to the Corporate Purchasing and Materials Control Manager necessarily indicated a demotion. The records show that there was no diminution of salary. While it appears that his transportation benefits were withheld, it does not follow that his position as Staff Assistant is inferior to that of a Transportation Services Manager. We take notice of the fact that certain positions in a company involve traveling from one place to another, hence the necessity to provide for a car, and related benefits like allowances for gasoline and maintenance. A company cannot, however, be reasonably expected to provide the same benefits to an employee whose position for example, requires that he stays in the office during working hours. Benefits, privileges and perquisites that attach to a certain position do not provide sufficient bases for determining the superiority or inferiority of the position so held.11 We find that [Del Villar] was not demoted and that the [Company] has not acted in bad faith or with malice. Court of Appeals The Court of Appeals promulgated its Decision favoring Del Villar. According to the Court of Appeals, the NLRC committed grave abuse of discretion by turning a blind eye on several indicia that clearly showed Del Villar was demoted without any lawful reason: (1) the very nomenclature used by the Company designating Del Villars new job: from Transportation Services Manager, Del Villar was suddenly designated as staff assistant to another manager; (2) the diminution in the benefits being enjoyed by Del Villar prior to his transfer, such as the use of the company car, gasoline allowance, and annual foreign travel; and (3) Del Villars new post in the Company did not require him to perform any meaningful work, a far cry from his previous responsibilities as Transportation Services Manager which include the preparation of the budget of the Company for all of its vehicles nationwide. The Court of Appeals also made a finding of bad faith against the Company: We have reasonable ground to believe that the reorganization theory poised by [the Company] was a mere afterthought. If indeed [Del Villar] was a casualty of a valid reorganization, officials of [the Company] could have easily told him in the several memos they issued to [Del Villar].In all four (4) memos, officials of [the Company] never once attributed to company reorganization as the reason behind [Del Villars] relief as Transportation Services Manager. Instead, [the Company] waited for [Del Villar] to file a complaint before it declared publicly its reason for relieving him from his post. It is unfortunate enough for [the Company] to give San Juan, the very person charged by [Del Villar] of committing fraud against the company, the free hand to deal with his accuser. And whatever remains of [the Companys] tattered claim to good faith towards [Del Villar] evaporated by its absence of forthrightness to the latter. [The Companys] lack of candor clearly lends support to a conclusion that [Del Villars] relief was occasioned by a reason alien to an alleged company reorganization. The evidence presented by [Del Villar] tend to show that he was demoted, not because of company reorganization, but because of his authorship of the report about the fraud being committed by certain officials of [the Company]. Hence, this Petition for Review. ISSUE: Whether or not the Company, in transferring Del Villar from the position of Transportation Services Manager to Staff Assistant to the Corporate Purchasing and Materials Control Manager, validly exercised its management prerogative or committed constructive dismissal RULING: In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. Managerial prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice. In the case of Blue Dairy Corporation v. National Labor Relations Commission, we described in more detail the limitations on the right of management to transfer employees: xxxBut, like other rights, there are limits thereto. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employees transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment. x xx In the case at bar, there is no dispute that Del Villar was transferred by the Company from the position of Transportation Services Manager to the position of Staff Assistant to the Corporate Purchasing and Materials Control Manager. The burden thus falls upon the Company to prove that Del Villars transfer was not tantamount to constructive dismissal. After a careful scrutiny of the records, we agree with the Labor Arbiter and the Court of Appeals that the Company failed to discharge this burden of proof. A transfer is a movement from one position to another which is of equivalent rank, level or salary, without break in service. Promotion, on the other hand, is the advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary. Conversely, demotion involves a situation where an employee is relegated to a subordinate or less important position constituting a reduction to a lower grade or rank, with a corresponding decrease in duties and responsibilities, and usually accompanied by a decrease in salary. First, as the Court of Appeals observed, Del Villars demotion is readily apparent in his new designation. Formerly, he was the Transportation Services Manager; then he was made a Staff Assistant a subordinate to another manager, particularly, the Corporate Purchasing and Materials Control Manager. Second, the two posts are not of the same weight in terms of duties and responsibilities. Del Villars position as Transportation Services Manager involved a high degree of responsibility, he being in charge of preparing the budget for all of the vehicles of the Company nationwide.

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Third, while Del Villars transfer did not result in the reduction of his salary, there was a diminution in his benefits. The Company admits that as Staff Assistant of the Corporate Purchasing and Materials Control Manager, Del Villar could no longer enjoy the use of a company car, gasoline allowance, and annual foreign travel, which Del Villar previously enjoyed as Transportation Services Manager. Fourth, it was not bad enough that Del Villar was demoted, but he was even placed by the Company under the control and supervision of Pineda as the latters Staff Assistant. To recall, Pineda was one of the Company officials who Del Villar accused of defrauding the Company in his Report dated January 4, 1996. It is not too difficult to imagine that the working relations between Del Villar, the accuser, and Pineda, the accused, had been strained and hostile. The situation would be more oppressive for Del Villar because of his subordinate position vis--vis Pineda. Fifth, all the foregoing caused Del Villar inconvenience and prejudice, so unbearable for him that he was constrained to seek remedy from the NLRC. The Labor Arbiter was correct in his observation that had Del Villar resigned immediately after his "transfer," he could be said to have been constructively dismissed. There is constructive dismissal when there is a demotion in rank and/or diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. Eventually, however, the Company actually terminated Del Villars services effective May 31, 1998, as his position was no longer necessary or was considered redundant due to the reorganization of the Business Logistic Directorate. Redundancy is one of the authorized causes for the dismissal of an employee. It is governed by Article 283 of the Labor Code. 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. Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. The determination that the employee's services are no longer necessary or sustainable and, therefore, properly terminable for being redundant is an exercise of business judgment of the employer. The wisdom or soundness of this judgment is not subject to discretionary review of the Labor Arbiter and the NLRC, provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious act. In other words, 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 this case, other than its own bare and self-serving allegation that Del Villars position as Staff Assistant of Corporate Purchasing and Materials Control Manager had already become redundant, no other evidence was presented by the Company. Neither did the Company present proof that it had complied with the procedural requirement in Article 283 of prior notice to the Department of Labor and Employment (DOLE) of the termination of Del Villars employment due to redundancy one month prior to May 31, 1998. The notice to the DOLE would have afforded the labor department the opportunity to look into and verify whether there is truth as to the claim of the Company that Del Villars position had become redundant "with the implementation of new distribution systems, utilization of improved operational processes, and functional reorganization" of the Company. Compliance with the required notices would have also established that the Company abolished Del Villars position in good faith. Del Villars poor employee performance is irrelevant as regards the issue on redundancy. Redundancy arises because there is no more need for the employees position in relation to the whole business organization, and not because the employee unsatisfactorily performed the duties and responsibilities required by his position. There being no authorized cause for the termination of Del Villars employment, then he was illegally dismissed. WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The Decision dated October 30, 2003 and Resolution dated March 29, 2004 of the Court of Appeals in CA-G.R. SP No. 53815 are hereby AFFIRMED with the following MODIFICATIONS: 1) the amount of backwages shall be computed from the date of Del Villars illegal dismissal until the finality of this judgment; and 2) the amount of moral and exemplary damages are reduced to P100,000.00 and P50,000.00, respectively. For this purpose, the case is hereby REMANDED to the Labor Arbiter for the computation of the amounts due Angel U. del Villar. G.R. No. 170464. JULY 12, 2010 LAMBERT PAWNBROKERS and JEWELRY CORPORATION and LAMBERT LIM, vs. HELEN BINAMIRA. Facts: Petitioner Lambert Lim (Lim) is a Malaysian national operating various businesses in Cebu and Bohol one of which is Lambert Pawnbrokers and Jewelry Corporation. Lim is married to Rhodora Binamira, daughter of Atty. Boler Binamira, Sr., (Atty. Binamira), who is also the counsel and father-in-law of respondent Helen Binamira (Helen). Lambert Pawnbrokers and Jewelry Corporation Tagbilaran Branch hired Helen as an appraiser in July 1995 and designated her as Vault Custodian in 1996. On September 14, 1998, Helen received a letter5 from Lim terminating her employment effective that same day. Lim cited business losses necessitating retrenchment as the reason for the termination. Helen thus filed a case for illegal dismissal Helen alleged that she was dismissed without cause and the benefit of due process. She claimed that she was a mere casualty of the war of attrition between Lim and the Binamira family. Moreover, she claimed that there was no proof that the company was suffering from business losses. Petitioners asserted that they had no choice but to retrench respondent due to economic reverses. The corporation suffered a marked decline in profits as in its Statement of Income and Expenses, its gross income for 1998 dropped from P1million toP665,000.00. Ruling of the Labor Arbiter- FOR LAMBERT Declared the respondent NOT guilty of illegally terminating the complainant but is however directed to pay the complainant her retrenchment benefit Ruling of the NLRC FOR HELEN NLRC reversed and set aside the Decision of the LA. Retrenchment to be valid, a written notice shall be given to the employee and to the Department of Labor and Employment (DOLE) at least one month prior to the intended date thereof. Since none was given in this case, then the retrenchment of Helen was not valid. Respondents are ordered to reinstate Helen without loss of seniority rights and with full backwages. Petitioners filed a MR. Ruling of NLRC MR filed by petitioner- Granted FOR LAMBERT The NLRC opined that what was actually implemented by the petitioners was NOT retrenchment due to serious business losses BUT TERMINATION due to REDUNDANCY. Tagbilaran operations was overstaffed thus necessitating the termination of some employees. Accordingly, NLRC reversed its prior decision and respondent was ordered to pay the complainant her redundancy pay of one month for every year of service and in lieu of notice, she should also be paid one (1) month salary as indemnity--- since the redundancy program was not properly implemented because no written notices were furnished the employee and the DOLE one month before the intended date of termination. Helen filed a MR but was denied by the NLRC

Ruling of the Court of Appeals FOR HELEN CA on certiorari found that both LA and the NLRC FAILED to consider substantial evidence showing that the exercise of management prerogative, in this instance, was done in bad faith and in violation of the employees right to due process. The CA ruled that there was NO REDUNDANCY because the position of vault custodian is a requisite, necessary and desirable position in the pawnshop business. There was likewise NO RETRENCHMENT because none of the conditions for retrenchment is present in this case.

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HOWEVER, what transpired was an incident of ILLEGAL DISMISSAL. (awarded full backwages and/or reinstatement/separation pay) Petitioners filed MR but was denied. ISSUE: WON CA was wrong in negating the factual findings of both LA and NLRC finding that there was neither retrenchment nor redundancy. Stated differently: Is the case one of retrenchment, redundancy or only a case of Illegal dismissal for lack of just or authorized cause. HELD: FOR HELEN (ONLY ILLEGAL DISMISSAL- LACK OF JUST AND AUTHORIZED CAUSE) There was no valid dismissal based on retrenchment. Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees. It is resorted to during periods of business recession etc. It is a management prerogative resorted to avoid or minimize business losses, and is recognized by Article 283 of the Labor Code. To effect a valid retrenchment, the following elements must be present: (1) the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious and real, or only if expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) the employer serves written notice both to the employee/s concerned and the DOLE at least one month before the intended date of retrenchment; (3) the employer pays the retrenched employee separation pay in an amount prescribed by the Code; (4) the employer exercises its prerogative. Petitioners merely alleged a sharp drop in its income in 1998 from P1million to only P665,000.00. This is not the business losses contemplated by the Labor Code that would justify a valid retrenchment. A mere decline in gross income cannot in any manner be considered as serious business losses. It should be substantial, sustained and real. Petitioners did not adopt other cost-saving measures before resorting to retrenchment. They also did not use any fair and reasonable criteria in ascertaining who would be retrenched. Finally, no written notices were served on the employee and the DOLE prior to the implementation of the retrenchment. Helen received her notice only on September 14, 1998, the day when her termination would supposedly take effect. This is in clear violation of the Labor Code provision which requires notice at least one month prior to the intended date of termination. There was no valid dismissal based on redundancy. Redundancy, on the other hand, exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the enterprise. For the implementation of a redundancy program to be valid, the employer must comply with the following requisites: (1) written notice served on both the employees and the DOLE at least one month prior to the intended date of termination of employment; (2) payment of separation pay equivalent to at least one month pay for every year of service; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. In this case, there is no proof that the essential requisites for a valid redundancy program as a ground for the termination of the employment of respondent are present. There was no showing that the function of respondent is superfluous or that the business was suffering from a serious downturn that would warrant redundancy. In fine, Helens dismissal is illegal for lack of just or authorized cause and failure to observe due process of law. Lambert Pawnbrokers and Jewelry Corporation is solely liable for the illegal dismissal of respondent. The lack of authorized or just cause to terminate ones employment and the failure to observe due process do not ipso facto mean that the corporate officer acted with malice or bad faith. There must be independent proof of malice or bad faith which is lacking in the present case. Thus only Lambert Pawbrokers is liable Respondent is entitled to the following relief under the law. An illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges and to this full backwages, inclusive of allowances, and to her other benefits or their monetary equivalent, computed from the time the compensation was withheld up to the time of actual reinstatement. Where reinstatement is no longer feasible, separation pay equivalent to at least one month salary or one month salary for every year of service, whichever is higher, a fraction of at least six months being considered as one whole year, should be awarded to respondent, Helen. G.R. No. 166570; December 18, 2009 HERRERA et. al vs NATIONAL POWER CORPORATION, FACTS: To provide a framework for the restructuring of the electric power industry, including the privatization of NPCs assets and liabilities, RA 9136 was enacted. Consequence of such reorganization was the displacement of employees from the Dept of Energy, the ERB, the National Electrification Administration and the NPC. Congress then provided in Section 63 of the EPIRA (Electric Power Industry Reform Act of 2001), for a separation package superior than those provided under existing laws. All NPC employees, including the petitioners, were separated from the service. As a result, all the employees who held permanent positions at the NPC were paid the corresponding separation pay. In addition to the separation package mandated by the EPIRA, a number of NPC employees also claimed retirement benefits under CA No. 186,2 as amended by RA No. 6603 and RA No. 1616. NPC, claimed that the grant of retirement benefits to displaced employees in addition to separation pay was inconsistent with the constitutional proscription on the grant of a double gratuity and that RA No. 9136 did not specifically authorize NPC to grant retirement benefits in addition to separation pay. As the matter cannot be resolved with its employees, NPC filed a Petition for Declaratory Relief against several parties, including the petitioners, before the RTC of Quezon City. TC ruled that employees who received the separation benefit under RA No. 9136 are no longer entitled to retirement benefits. Petitioners appealed directly to SC on a pure question of law. Issue: Whether or not NPC employees who were separated from the service because of the reorganization of the electric power industry and who received their separation pay under RA No. 9136 are still entitled to receive retirement benefits under CA No. 186, as amended Ruling: NO. (SC affirmed TCs decision) Section 8 of Article IX(B) of the Constitution provides that [n]o elective or appointive public officer or employee shall receive additional, double, or indirect compensation, unless specifically authorized by law. Court ruled that there must be a clear and unequivocal statutory provision to justify the grant of both separation pay and retirement benefits to an employee. Here, absent an express provision of law, the grant of both separation and retirement benefits would amount to double compensation from one single act of separation from employment. The EPIRA, a legislative enactment dealing specifically with the privatization of the electric power industry, provides: SEC. 63. Separation Benefits of Officials and Employees of Affected Agencies. xxx shall be entitled to either a separation pay and other benefits in accordance with existing laws, rules or regulations or be entitled to avail of the privileges provided under a separation plan which shall be one and one-half month[s] salary for every year of service in the government: xxx A careful reading of Section 63 of the EPIRA affirms that said law did not authorize the grant of both separation pay and retirement benefits. Indeed, the option granted was either to a separation pay and other benefits in accordance with existing laws, rules and regulations or to a separation plan which shall be one and one-half months salary for every year of service in the government. The options were alternative, not cumulative. Having chosen the separation plan, they cannot now claim additional retirement benefits under CA No. 186.

RETRENCHMENT
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G.R. No. 183390 February 16, 2011 PLASTIMER INDUSTRIAL CORPORATION and TEO KEE BIN vs. NATALIA C. GOPO, et al. FACTS: The case involves a complaint for illegal dismissal filed by several employees against their employer Plastimer Industrial Corporation (Plastimer). A memorandum informing the employees of the decision of the Board to downsize and to reorganize its business operations was issued by Plastimer 30 days before the intended date of the termination of the employees. A report was also submitted to the DOLE which was however short of the 30-day period prescribed by the Labor Code. The retrenchment was allegedly due to the withdrawal of investment of shares of stocks. Plastimer suffered financial losses from 2001 to 2002 but later on improved in 2003. The Employees filed a complaint for illegal dismissal and alleged that Plastimer failed to establish the causes or valid reasons for retrenchment, and that Plastimer failed to comply with the 30-day notice to the DOLE. Plastimer on the other hand countered that the retrenchment was a management prerogative. ISSUE: Whether there was a valid Retrenchment

HELD: Plastimers failure to comply with the one-month notice to the DOLE is only a procedural infirmity and does not render the retrenchment illegal. In Agabon v. NLRC, we ruled that when the dismissal is for a just cause, the absence of proper notice should not nullify the dismissal or render it illegal or ineffectual. Instead, the employer should indemnify the employee for the violation of his statutory rights. Here, the failure to fully comply with the one-month notice of termination of employment did not render the retrenchment illegal but it entitles respondents to nominal damages. The fact that there was a net income in 2003 does not justify the Court of Appeals ruling that there was no valid reason for the retrenchment. Records showed that the net income for 2003 was not even enough for Plastimer to recover from the loss in 2002. Article 283 of the Labor Code recognizes retrenchment to prevent losses as a right of the management to meet clear and continuing economic threats or during periods of economic recession to prevent losses. There is no need for the employer to wait for substantial losses to materialize before exercising ultimate and drastic option to prevent such losses. G.R. No. 178222-23. September 29, 2010. MANILA MINING CORP. EMPLOYEES ASSOCIATION-FEDERATION vs MANILA MINING CORP Facts: Respondent (MMC) is engaged in large-scale mining for gold and copper ore. MMC is required by law to maintain a tailings containment facility to store waste generated by its mining operations. One of the dams was operated under DENR permit. On January 2000, 11 rank and file employees of MMC attended a union meeting for purpose of union registration. Upon expiration of the tailings permit on 25 July 2001, DENR did not issue a permanent permit due to the inability of MMC to secure an Environmental Compliance Certificate. Hence MMC t was compelled to temporarily shut down its mining operations, resulting in the temporary lay-off of more than 400 employees in the mine site. Herein petitioners together with the Union filed a complaint before the labor arbiter for reinstatement aetc. and recognition of union. Complainants challenged the validity of their lay-off on the averment that MMC was not suffering from business losses. They alleged that MMC did not want to bargain collectively with the Union, second no criteria were employed in choosing which employees to lay-off; and third, the individuals laid-off were those who signed the attendance sheet of the union organizational meeting. Respondents justified the temporary layoff as bona fide in character and a valid management prerogative pending the issuance of the permit. The LA ruled in favor of MMC. In the NLRC the decision was modified ordering payment of s eparation pay equivalent to one month pay for every year of service. It ratiocinated that the temporary lay-off, which exceeded more than six (6) months, had the effect of severance of the employer-employee relationship. Both parties appealed to the CA. The Ca modified the decision by ordering ONE-HALF (1/2) MONTH PAY for every year of service. Only the union appealed. aside from other the union claims that the temporary lay-off was effected without any proper notice to the DOLE as mandated by Article 283 of the Labor Code. It further maintains that MMC did not observe the jurisprudential criteria in the selection of the employees to be laid-off. MMc claims valid management prerogative. ISSUE: Whether or not the lay-off is illegal Held: No, Despite all efforts exerted by MMC, it did not succeed in obtaining the consent of the residents of the community where the tailings pond would operate, one of the conditions imposed by DENR-EMB in granting its application for a permanent permit. It is precisely MMCs faultless failure to secure a permit which caused the temporary shutdown of its mining operations. The suspension of MMCs mining operations was not due to its fault nor was it necessitated by financial reasons. Such suspension was brought about by the non-issuance of a permit for the continued operation of TP No. 7 without which MMC cannot resume its milling and mining operations MMC further submits that where the closure is due to serious business losses, such as in this case where the aggregate losses amounted to over P880,000,000.00, the law does not impose any obligation upon the employer to pay separation benefits. We disagree. Even as we declare the validity of the lay-off, we cannot say that MMC has no obligation at all to the laid-off employees. provides that an employee, who was dismissed due to cessation of business operation, is entitled to the separation pay equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. And it is jurisprudential that separation pay should also be paid to employees even if the closure or cessation of operations is not due to losses. G.R. No. 165923, September 29, 2010. Shimizu Philippines Constractors, Inc. vs. Virgilio P. Callanta FACTS: Petitioner, a corporation engaged in the construction business, employed respondent on August 23, 1994 as Safety Officer assigned at petitioners Yutaka-Giken Project and eventually as Project Administrator of petitioners Structural Steel Division (SSD) in 1995. In a Memorandum dated June 7, 1997, respondent was informed that his services will be terminated effective July 9, 1997 due to the lack of any vacancy in other projects and the need to re-align the companys personnel requirements brought about by the imperatives of maximum financial commitments. Respondent then filed an illegal dismissal complaint against petitioner assailing his dismissal as without any valid cause. Petitioner posited that the termination of the respondent was in accordance with a valid retrenchment program due to financial crisis that plague the construction business and offered in support its financial statements and the SEC approval. Terminations were also done as each project is completed in order not to jeopardize completion. It offered respondent his separation pay but the latter refused and instead filed his complaint. The respondent on the other hand contended that there was no valid retrenchment program and therefore no valid dismissal since it failed to comply with the requirements of the law particularly the 30-day prior notice requirement and that it failed to use fair and reasonable criteria in determining which employee shall be terminated. He also said that he was only one of the many employees who was terminated and been replaced by junior inexperienced employees. In its answer the respondent claimed that there is substantial compliance with the requirements and that respondent is giving false narration of facts about his employment position and further disclosed that respondent has been saddled with complaints subject of administrative investigations for violations of several company rules, i.e., cited for discrepancies in his time sheet, unauthorized use of company vehicle, stealing of company property, and abandonment of work, so much so that petitioners decision to appoint more competent and more senior employees in his stead cannot be questioned. ISSUE: Whether or not the dismissal of the respondent was valid. HELD: YES. There was substantial compliance for a valid retrenchment; petitioner used fair and reasonable criteria in effecting retrenchment.

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As an authorized cause for separation from service under Article 283 of the Labor Code, retrenchment is a valid exercise of management prerogative subject to the strict requirements set by jurisprudence:

(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 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, x x x efficiency, seniority, physical fitness, age, and financial hardship for certain workers In implementing its retrenchment scheme, petitioner was constrained to streamline its operations and to downsize its complements in a progressive manner in order not to jeopardize the completion of its projects. Thus, several departments like the Civil Works Division, Electro-mechanical Works Division and the Territorial Project Management Offices, among others, were abolished in the early part of 1996 and thereafter the Structural Steel Division, of which respondent was an Administrator. Respondent was among the last batch of employees who were retrenched and by the end of year 1997, all of the employees of the Structural Steel Division were severed from employment. Respondent, in any of the pleadings filed by him, never refuted the foregoing facts. Respondents argument that he was singled out for termination as allegedly shown in petitioners monthly termination report for the month of July 1997 filed with the DOLE does not persuade this Court. Standing alone, this document is not proof of the total number of retrenched employees or that respondent was the only one retrenched. It merely serves as notice to DOLE of the names of employees terminated/ retrenched only for the month of July. In other words, it cannot be deemed as an evidence of the number of employees affected by the retrenchment program. Thus we cannot conclude that no other employees were previously retrenched. Respondent then claimed that petitioner did not observe seniority in retrenching him. He further alleged that he is more qualified and efficient than those retained by petitioner. Notably, however, the records do not bear any proof that these allegations were substantiated. On the contrary, the Labor Arbiter found respondents notoriety due to pieces of evidence showing numerous company violations imputed against respondent. This fact of being subject of several administrative investigations, respondent failed to refute. Moreover, the Labor Arbiter likewise found respondent guilty of several misrepresentations in the pleadings filed before the tribunal with regard to the latters employment position. By advancing that other employees were less efficient, qualified and senior than him, respondent has the burden of proving these allegations which he failed to discharge. On the contrary, we find that petitioner implemented its retrenchment program in good faith because it undertook several measures in cutting down its costs, to wit, withdrawing certain privileges of petitioners executives and expatriates; limiting the grant of additional monetary benefits to managerial employees and cutting down expenses; selling of company vehicles; and infusing fresh capital into the company. Respondent did not attempt to refute that petitioner adopted these measures before implementing its retrenchment program. In fine, we hold that petitioner was able to prove that it incurred substantial business losses, that it offered to pay respondent his separation pay, that the retrenchment scheme was arrived at in good faith, and lastly, that the criteria or standard used in selecting the employees to be retrenched was work efficiency which passed the test of fairness and reasonableness. The termination notice sent to DOLE did not comply with the 30-day notice requirement, thus, respondent is entitled to indemnity for violation of due process. However, although there was authorized cause to dismiss respondent from the service, we find that petitioner did not comply with the 30-day notice requirement. Petitioner maintains that it substantially complied with the requirement of the law in that it, in fact, submitted two notices or reports with the DOLE. However, petitioner admitted that the reports were submitted 21 days, in the case of the first notice, and 16 days, in the case of the second notice, before the intended date of respondents dismissal. The purpose of the one month prior notice rule is to give DOLE an opportunity to ascertain the veracity of the cause of termination. Non-compliance with this rule clearly violates the employees right to statutory due process. Consequently, we affirm the NLRCs award of indemnity to respondent for want of sufficient due notice. G.R. No. 175040 April 6, 2010 FRANCIS RAY TALAM, Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, 4th DIVISION, CEBU CITY, THE SOFTWARE FACTORY, INC. and/or TERESA GRAPILON, Office Manager, and WOLFGANG HERMLE, Chief Executive Officer, Respondents. BRION, J.: FACTS: The respondent, The Software Factory, Inc. (TSFI), is a domestic corporation engaged in providing information technology and computer consultancy to the public. It holds office in Makati City. In April 2001, it employed Talam as a full-time programmer. In the latter part of 2001 and in 2002, TSFI suffered financial reverses. Its external financial auditor advised that it cut on its payroll expenses which accounted for 41% of its total operating costs. TSFI heeded the advice and decided to retrench some of its employees, using as basis its employees' service income and contribution margins to the company. TSFI found that Talam was one of two employees with the least or with no income contribution for the year 2002. Consequently, respondents Teresa Grapilon (Grapilon), TSFI's Office Manager, and Wolfgang Hermle (Hermle), Chief Executive Officer, verbally informed Talam that his services with the company would be terminated thirty (30) days after September 27, 2002. Thereafter, TSFI notified Talam in writing of the termination of his employment. On November 6, 2002, or after a month, Talam signed a Release and Quitclaim in consideration and receipt ofP89,954.00 in compensation and other benefits. On November 29, 2002, Talam questioned the legality of his separation from the service through a complaint for illegal dismissal and illegal deduction, with claims for service incentive leave pay, damages and attorney's fees against TSFI, Grapilon and Hermle, before the National Labor Relations Commission (NLRC) in Cebu City. The Executive Labor Arbiter Reynoso A. Belarmino rendered a decision10 declaring Talam's dismissal illegal and directing TSFI to pay Talam separation benefits, backwages and 13th month pay in the aggregate amount of P260,560.00. TSFI appealed to the NLRC. NLRC Fourth Division set aside the labor arbiter's ruling and dismissed Talam's complaint without prejudice, for improper venue. It ruled that Talam should have filed the complaint with the NLRC-Regional Arbitration Branch in the National Capital Region which has jurisdiction over the workplace in Makati City. The NLRC found Talam's dismissal valid by reason of retrenchment, but deleted the award of separation pay "in view of payment." the CA denied the petition for lack of merit. It found Talam's separation from the service by reason of retrenchment to be valid. Talam moved for reconsideration of the decision, but the CA denied the motion in a resolution promulgated on September 29, 2006. Hence, the present recourse to the Court. ISSUE: Whether there was a valid cause for Talams dismissal. HELD: YES. Here are the conclusions of the Supreme Court:

1) 2)

The decision to retrench had a basis; it was not simulated nor resorted to for the purpose of getting rid of employees. The decision was upon the recommendation of the companys external auditor Leah A. Villanueva. The cost-cutting measure recommended involved reduction of TSFIs payroll expense account which, as the auditor found, makes up 41% of the companys total operating expenses. In the present case, we note that the auditor suggested that TSFI "review the contribution margin per consultant and compensation packages of personnel in the executive and support group." Again,

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absent any showing of bad faith, we cannot fault the company for choosing the option of looking at the margins of contribution of the consultants to the income of the company as primary retrenchment standard. Talam was dismissed due to a cause authorized by law retrenchment to prevent losses. At the time of Talams dismissal, TSFIs financial condition, as found by the external auditor, showed that it was not just expecting losses, it already suffered a net income loss and retained earnings deficit. 4) TSFI resorted to other measures to abate its losses. It claimed that during the crises period, it used as an office a small-room (a mere cubicle) with only a two-person support staff in the persons of Grapilon and Hermle; it reduced the salaries of its employees by as much as 30%. On the whole, we find that TSFI satisfied the requisites for a valid retrenchment. Regarding the release and quitclaim, the CA erred in glossing over the legal effect of Talam's release and quitclaim. It should NOT have been nullified. The quitclaim was a voluntary act as there is no showing that he was coerced into executing the instrument; he received a valuable consideration for his less than two years of service with the company. Thus, from all indications, the release and quitclaim was a valid and binding undertaking that should have been recognized by the labor authorities and the CA. With the foregoing backdrop in Talams execution of the release and quitclaim, we find the filing of the illegal dismissal case tainted with bad faith on his part for he has already "released and forever discharged" the company "from any and all claims of damages and other liability, any from any and all manner of claims, cause or causes of actions whatsoever x x x against them. G.R. No. 183233 December 23, 2009 VIRGILIO G. ANABE vs. ASIAN CONSTRUCTION (ASIAKONSTRUKT) FACTS: Virgilio G. Anabe (petitioner) was hired by respondent Asian Construction (Asiakonstrukt) as radio technician/operator on April 15, 1993. By notice dated September 8, 1999, he was advised that his services would be, as he was in fact, terminated effective October 8, 1999 on the ground of retrenchment. Petitioner thus filed on February 10, 2000 a complaint for illegal dismissal and illegal deduction and payment of overtime pay, premium pay, holiday pay, service incentive leave pay, and 13th month pay. Asiakonstrukt, attributing petitioners retrenchment to sudden business reversal in the construction industry, averred, however, that petitioners money claims have been offset against his outstanding accountabilities. On June 29, 2001, the Labor Arbiter, finding that Asiakonstrukt failed to submit financial statements to prove losses, ruled that petitioner was not validly dismissed and ordered to reinstate complainant to his former position or its equivalent without loss of seniority rights and other privileges, with full backwages and benefits from date of dismissal up to actual date of reinstatement ,and ordered to pay complainant ten percent (10%) of the total award as attorneys fees. On appeal, the (NLRC), taking into consideration the certified true copies of the Audited Financial Statements from 1998 to 2000 submitted by Asiakonstrukt, partly granted the appeal by and modified the Labor Arbiters Decision by holding that petitioner was not illegally dismissed. While it affirmed the award of the 13th month pay, overtime pay and attorneys fees, it ordered the payment to petitioner of P19,170 as separation pay. Petitioners motion for reconsideration was denied by Order, hence, he appealed to the Court of Appeals, assailing the consideration by the NLRC of the Audited Financial Statements which were submitted only on appeal. On December 26, 2007, the appellate court held that there was no grave abuse of discretion on the part of the NLRC when it considered the financial statements as they "already form part of the records on appeal." Hence, this petition. ISSUE: Whether or Not he was illegally dismissed as Asiakonstrukt failed to prove that it was suffering business losses to warrant a valid retrenchment of its employees and Asiakonstrukt belatedly submitted financial statements were not shown to be newly found evidence and unavailable during the proceedings before the Labor Arbiter to thus cast doubts as to their veracity RULING: YES. Asiakonstrukt failed to submit its audited financial statements within the two years that the case was pending before the Labor Arbiter. It submitted them only after it received the adverse judgment of the Labor Arbiter. Indubitably, the NLRC is not precluded from receiving evidence on appeal as technical rules of evidence are not binding in labor cases. There is, however, a caveat to this policy. The delay in the submission of evidence should be clearly explained and should adequately prove the employers allegation of the cause for termination. In the present case, Asiakonstrukt proffered no explanation behind the belated submission. And the financial statements13 it submitted covered the period 1998-2000. Further, note that the audited financial statement14covering the period 1998-2000 was prepared in April 2001, which begs the question of how the management knew at such date of the companys huge losses to justify petitioners retrenchment in 1999. Furthermore, from the certification issued by the Securities and Exchange Commission (SEC), it would appear that Asiakonstrukt failed to submit its financial statements to the SEC, as required under the law, for the period 1998-2000 and 2003-2005, thereby lending credence to petitioners theory that the financial statements submitted on appeal may have been fabricated. Indeed, Asiakonstrukt could have easily submitted its audited financial statements during the pendency of the proceedings at the labor arbiters level, especially considering that it was in late 2001 that the case was decided. For failure then of Asiakonstrukt to clearly and satisfactorily substantiate its financial losses, the dismissal of petitioner on account of retrenchment is unjustified. Petitioner is thus entitled to the twin reliefs of payment of backwages and other benefits from the time of his dismissal up to the finality of this Courts Decision, and reinstatement without loss of seniority rights or, in lieu thereof, payment of separation pay. Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees, it is resorted to during periods of business recession, industrial depression, or seasonal fluctuations or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery or of automation. It is a management prerogative resorted to, to avoid or minimize business losses, and is recognized by Article 283 of the Labor Code, as amended, viz: To effect a valid retrenchment, the following elements must be present: (1) the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, and real, or only if expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) the employer serves written notice both to the employee/s concerned and the Department of Labor and Employment at least a month before the intended date of retrenchment; (3) the employer pays the retrenched employee separation pay in an amount prescribed by the Code; (4) the employer exercises its prerogative to retrench in good faith; and (5) the employer uses fair and reasonable criteria in ascertaining who would be retrenched or retained. The losses must be supported by sufficient and convincing evidence, the normal method of discharging which is the submission of financial statements duly audited by independent external auditors. The case is REMANDED to the National Labor Relations Commission which is DIRECTED to recompute WITH DISPATCH the monetary awards due petitioner. G.R. No. 165756. June 5, 2009. HOTEL ENTERPRISES OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency Manila vs. SAMAHAN NG MGA MANGGAGAWA SA HYATT-NATIONAL UNION OF WORKERS IN THE HOTEL AND RESTAURANT AND ALLIED INDUSTRIES (SAMASAH-NUWHRAIN) NACHURA, J.

3)

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Facts: In 2001, HEPIs hotel business suffered a slump due to the local and international economic slowdown, aggravated by the events of September 11, 2001 in the United States. An audited financial report made by Sycip Gorres Velayo (SGV) & Co. on January 28, 2002 indicated that the hotel suffered a gross operating loss amounting to P16,137,217.00 in 2001, a staggering decline compared to its P48,608,612.00 gross operating profit in year 2000. According to petitioner, the management initially decided to cost-cut by implementing energy-saving schemes. Meanwhile, on August 31, 2001, the Union filed a notice of strike due to a bargaining deadlock before the National Conciliation Mediation Board (NCMB) In the course of the proceedings, HEPI submitted its economic proposals for the rank-and-file employees which included manning and staffing standards for employees. The Union accepted the economic proposals. Hence, a new collective bargaining agreement (CBA) was signed on November 21, 2001, adopting the manning standards for the 248 rank-and-file employees. Subsequently, on January 21, 2002, petitioner decided to implement a downsizing scheme after studying the operating costs of its different divisions to determine the areas where it could obtain significant savings. After evaluating the hotels manning guide, the following positions were identified as redundant or in excess of what was required for the hotels actual operation given the prevailing poor business condition, viz.: a) housekeeping attendant-linen; b) tailor; c) room attendant; d) messenger/mail clerk; and e) telephone technician. The effect was to be a reduction of the hotels rank-and file employees from the agreed number of 248 down to just 150 but it would generate estimated savings of around P9,981,267.00 per year. The Union opposed the downsizing plan because no substantial evidence was shown to prove that the hotel was incurring heavy financial losses, and for being violative of the CBA, more specifically the manning/staffing standards agreed upon by both parties in November 2001. Despite its opposition, a list of the positions declared redundant and to be contracted out was given by the management to the Union on March 22, 2002. Notices of termination were, likewise, sent to 48 employees whose positions were to be retrenched or declared as redundant. The notices were sent on April 5, 2002 and were to take effect on May 5, 2002. A notice of termination was also submitted by the management to DOLE. All were given separation pay equivalent to one (1) months salary for every year of service. Thereafter, the hotel management engaged the services of independent job contractors to perform the following services: (1) janitorial (previously, stewarding and public area attendants); (2) laundry; (3) sundry shop; (4) cafeteria; and (5) engineering. Some employees, including one Union officer, who were affected by the downsizing plan were transferred to other positions in order to save their employment.On April 12, 2002, the Union filed a notice of strike based on unfair labor practice (ULP) against HEPI. On April 29, 2002, HEPI filed a motion to dismiss notice of strike. On May 8, 2002, conciliation proceedings were held between petitioner and respondent, but to no avail. On May 10, 2002, respondent Union went on strike. Issues: 1. 2. Was petitioners downsizing scheme valid? Does the implementation of the downsizing scheme preclude petitioner from availing the services of contractual and agencyhired employees?

Ruling: 1. In case of redundancy, the employer must prove that: (1) a written notice was served on both the employees and the DOLE at least one month prior to the intended date of retrenchment; (2) separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher, has been paid; (3) good faith in abolishing the redundant positions; and (4) adoption of fair and reasonable criteria in ascertaining which positions are to be declared redundant and accordingly abolished. In the case at bar, petitioner justifies the downsizing scheme on the ground of serious business losses it suffered in 2001. Some positions had to be declared redundant to cut losses. In this context, what may technically be considered as redundancy may verily be considered as a retrenchment measure. To substantiate its claim, petitioner presented a financial report covering the years 2000 and 2001 submitted by the SGV & Co., from an impressive gross operating profit of P48,608,612.00 in 2000, it nose-dived to negative P16,137,217.00 the following year. This was the same financial report submitted to the SEC and later on examined by respondent Unions auditor. The hotel was already operating not only on a slump in income, but on a huge deficit as well. With the local and international economic conditions equally unstable, belt-tightening measures logically had to be implemented to forestall eventual cessation of business. Our labor laws only allow retrenchment or downsizing as a valid exercise of management prerogative if all other else fail. But in this case, petitioner did implement various cost-saving measures and even transferred some of its employees to other viable positions just to avoid the premature termination of employment of its affected workers. It was when the same proved insufficient and the amount of loss became certain that petitioner had to resort to drastic measures to stave off P9,981,267.00 in losses, and be able to survive. If we see reason in allowing an employer not to keep all its employees until after its losses shall have fully materialized, with more reason should we allow an employer to let go of some of its employees to prevent further financial slide. 2. In any event, we have held that an employers good faith in implementing a redundancy program is not necessarily destroyed by availment of the services of an independent contractor to replace the services of the terminated employees. We have previously ruled that the reduction of the number of workers in a company made necessary by the introduction of the services of an independent contractor is justified when the latter is undertaken in order to effectuate more economic and efficient methods of production. With petitioners downsizing scheme being valid, and the availment of contractual and agency-hired employees legal, the strike staged by officers and members of respondent Union is, perforce, illegal.

FLOATING STATUS
G.R. No. 182086, November 24, 2010. Bebina G. Salvaloza vs. NLRC, Gulf Pacific Security Agency, Inc., and Angel Quizon. NACHURA, J.: FACTS: Gregorio filed a complaint before the NLRC against Respondent Gulf Pacific for illegal dismissal with claim for underpayment of wages, non-payment of OT pay, holiday pay, premium pay for holiday and rest day, service incentive leave pay, 13th Month pay, damages and attorneys fees. Alleged in his position paper is that he was employed by Respondent as a security guard in August 1996 with P4,000 salary, from Mon to Sun. 7am-7pm and was assigned to several establishments, continuously working for 5 years until the alleged termination on 2001. According to him, he reported daily to Gulf Pacific, waiting for his new assignment, but he was not given any because there was no position available for him. His last visit to Gulf Pacifics office was in February 2002, but still no assignment was given to him. Respondent Gulf Pacific and Quizon, owner and manager of the agency, denied Gregorios allegations and countered that he had been relieved several times from assignment due to being AWOL. The service records reveal that Gregorio had 3 birth certificates to which Respondent Gulf Pacific asked him to first renew and update his license as security guard in January 2002, but did not do so. LA decided in favor of Gregorio finding Respondents guilty of illegally dismissing him and order them jointly and severally liable to reinstate him to his former or substantially equivalent position w/out loss of seniority rights, benefits and privileges; to pay backwages, service incentive leave pay, 13th month pay and wage differential; and 10% of the total judgment as attorneys fees. Other claims were dismissed for lack of sufficient merit. NLRC reversed LAs Decision upon appeal and dismissed Gregorios complaint for lack of merit. CA rendered its decision affirming NLRC Second Division decision and resolution. During the pendency of the MR, a motion for substitution prayed that Gregorio be substituted by his wife, Bebina. ISSUE: Whether or not Gregorio was constructively dismissed by Respondent Gulf Pacific HELD: YES. The petition filed on behalf of Gregorio alleges that, in termination cases, the burden of proving just cause for dismissing an employee is on the employer. It contends that Gulf Pacific and Quizon failed to discharge this burden when they claimed that Gregorios

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employment was severed for his failure to renew his security guard license, for his alleged inefficiency at work, and for his submission of a spurious security guard license. It is settled that, in labor cases, the employer has the burden of proving that the employee was not dismissed, or, if dismissed, that the dismissal was not illegal. Failure to discharge this burden would be tantamount to an unjustified and illegal dismissal. The Court is mindful of the fact that, in cases involving security guards, most contracts for security services stipulate that the client may request the replacement of the guards assigned to it. A relief and transfer order in itself does not sever the employment relationship between a security guard and the agency. It is true that a security guard has the right to security of tenure, but this does not give him a vested right to the position as would deprive the company of its prerogative to change the assignment of or transfer the security guard to a station where his services would be most beneficial to the client. Indeed, an employer has the right to transfer or assign its employees from one office or area of operation to another, or in pursuit of its legitimate business interest, provided there is no demotion in rank or diminution of salary, benefits, and other privileges, and the transfer is not motivated by discrimination or bad faith, or effected as a form of punishment or demotion without sufficient cause. Temporary off-detail or floating status is the period of time when security guards are in between assignments or when they are made to wait after being relieved from a previous post until they are transferred to a new one. It takes place when the security agencys clients decide not to renew their contracts with the agency, resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster. It also happens in instances where contracts for security services stipulate that the client may request the agency for the replacement of the guards assigned to it even for want of cause, such that the replaced security guard may be placed on temporary off-detail if there are no available posts under the agencys existing contracts. During such time, the security guard does not receive any salary or any financial assistance provided by law. It does not constitute a dismissal, as the assignments primarily depend on the contracts entered into by the security agencies with third parties, so long as such status does not continue beyond a reasonable time. When such a floating status lasts for more than six (6) months, the employee may be considered to have been constructively dismissed. There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice except to forego continued employment. It exists when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely, as an offer involving a demotion in rank and a diminution in pay. It should be pointed out that, per his service record, Gregorio was thrice put on floating status by Gulf Pacific: (1) from October 22, 1996 to April 13, 1997, or a total of 174 days, or six (6) days less than six (6) months; (2) from July 14, 1999 to May 2, 2001, or a total of almost 22 months; and (3) indefinitely, starting from August 30, 2001. Of the three instances when Gregorio was temporarily off-detailed, the Court finds that the last two already ripened into constructive dismissal. Although the Court understands that it could have been difficult for Gulf Pacific to post Gregorio given his age, about 50 years old, and his service record, still the agency should not have allowed him to wait indefinitely for an assignment if its clients were in truth less likely to accept him. If, indeed, Gregorio was undesirable as an employee, Gulf Pacific could just have dismissed him for cause. The unreasonable lengths of time that Gregorio was not posted inevitably resulted in his being constructively dismissed from employment. On the LAs ruling ordering Gregorios reinstatement, the Court differs. Gregorios position paper did not pray for reinstatement, but only sought payment of money claims. Likewise, we consider the strained relations between the parties which make reinstatement impracticable. What is more, even during the time of the LAs decision, reinstatement was no longer legally feasible since Gregorio was past the age qualification for a security guard license, taking into account his three (3) different birthdates, as appearing in his service record. Section 5 of R.A. 5487, enumerating the qualifications for a security guard, provides, among others, that the person should not be less than 21 nor over 50 years of age. And as previously mentioned, as early as June 13, 2002, Gregorio was no longer in possession of a valid license. Thus, separation pay should be paid instead of reinstatement. With respect to the alleged underpayment of wages and benefits, suffice it to state that Gulf Pacific was able to rebut this claim through its payroll sheets correspondingly signed by Gregorio. As the payroll sheets provide a convincing proof of payment of his salaries and other benefits during his tours of duty as a security guard, the burden of proof was shifted to Gregorio to prove otherwise, but only with respect to those salaries and benefits indicated in the said payroll sheets. Finally, private respondent Quizon, manager of Gulf Pacific, should be excepted from paying Gregorios money entitlements inasmuch as Gregorios employer, Gulf Pacific, is a corporation with a separate and distinct legal personality. WHEREFORE, the petition is PARTIALLY GRANTED. The assailed Decision dated September 28, 2007 and the Resolution dated March 13, 2008 of the Court of Appeals in CA G.R. SP No. 96101 are REVERSED and SET ASIDE. The decision of the Labor Arbiter dated June 30, 2004 is REINSTATED with the MODIFICATION that the deceased Gregorio Salvaloza, as represented by his wife Bebina G. Salvaloza, be awarded separation pay in lieu of reinstatement, and that his backwages and other monetary benefits be computed only up to June 13, 2002. This case is remanded to the Labor Arbiter for the proper computation of the judgment award in favor of Gregorio within thirty (30) days from receipt hereof. Costs against Gulf Pacific Security Agency, Inc. SO ORDERED.

CONSTRUCTIVE DISMISSAL
G.R. No. 185814 October 13, 2010 SHS PERFORATED MATERIALS, INC., WINFRIED HARTMANNSHENN, and HINRICH JOHANN SCHUMACHER vs. MANUEL F. DIAZ MENDOZA, J.: FACTS: SHS is a start-up corporation registered with the PEZA. Hartmannshenn is its president while Schumacher is the treasurer and one of its the board of directors, both being German nationals. On the other hand, respondent was the Manager for Business Development on probationary status. During meetings with the respondent, Hartmannshenn expressed his dissatisfaction over respondents poor performance. He said that respondent allegedly failed to make any concrete business proposal or implement any specific measure to improve the productivity of the SHS office and plant or deliver sales. He also said that in numerous electronic mail messages, respondent acknowledged his poor performance and offered to resign from the company. Respondent, however, denied sending such messages but admitted that he had reported to the SHS office and plant only 8 times from July 18, 2005 to November 30, 2005. In preparation for his trip to the Philippines, Hartmannshenn tried to call respondent on his mobile phone, but the latter failed to answer. On November 18, 2005, Hartmannshenn arrived in the Philippines from Germany, and on November 22 and 24, 2005, notified respondent of his arrival through electronic mail messages and advised him to get in touch with him. Respondent claimed that he never received the messages. On November 29, 2005, Hartmannshenn instructed Taguiang not to release respondents salary. Later that afternoon, respondent called and inquired about his salary. Taguiang informed him that it was being withheld and that he had to immediately communicate with Hartmannshenn. Again, respondent denied having received such directive. The next day, November, 30, respondent served on SHS a demand letter and a resignation letter. The resignation letter reads: This is to tender my irrevocable resignation from SHS effective immediately upon receipt of my due and demandable salary for the period covering November 16 to 30, 2005, which has yet been unpaid and is still currently being withheld albeit illegally. It is precisely because of illegal and unfair labor practices such as these that I offer my resignation with neither regret nor remorse. In the evening of the same day respondent met with Hartmannshenn. The latter told him that he was extremely disappointed for the following reasons: his poor work performance; his unauthorized leave and malingering from November 16 to November 30, 2005; and failure to immediately meet Hartmannshenn upon his arrival from Germany. Petitioners averred that respondent was unable to give a proper explanation

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for his behavior. Hartmannshenn then accepted respondents resignation and informed him that his salary would be released upon explanation of his failure to report to work, and proof that he did, in fact, work for the period in question. He demanded that respondent surrender all company property and information in his possession. Respondent agreed to these exit conditions through electronic mail. Instead of complying with the said conditions, however, respondent sent another electronic mail message to Hartmannshenn and Schumacher on December 1, 2005, appealing for the release of his salary. To settle the issue amicably, petitioners counsel advised respondents counsel by telephone that a check had been prepared in the amount of P50,000.00, and was ready for pick-up on December 5, 2005. On the same date, a copy of the formal reply letter relating to the prepared payment was sent to the respondents counsel by facsimile transmission. Despite being informed of this, respondent never picked up the check. Respondent countered that his counsel received petitioners formal reply letter only on December 20, 2005, stating that his salary would be released subsequent to the turn-over of all materials owned by the company in his possession. Respondent claimed that the only thing in his possession was a sample panels folder which he had already returned and which was duly received by Taguiang on November 30, 2005. On December 9, 2005, respondent filed a Complaint against the petitioners for illegal dismissal; non-payment of salaries/wages and 13 th month pay with prayer for reinstatement and full backwages; exemplary damages, and attorneys fees, costs of suit, and legal interest. RULINGS OF LA/NLRC/CA LA rendered his decision declaring complainant as having been illegally dismissed. The LA found that respondent was constructively dismissed because the withholding of his salary was contrary to Article 116 of the Labor Code as it was not one of the exceptions for allowable wage deduction by the employer under Article 113 of the Labor Code. NLRC reversed the decision of the LA and dismissed the complaint for illegal dismissal for lack of merit. It ordered respondents to pay the complainants unpaid salary for the period covering November 16-30, 2005 in the amount of Php 50,000.00. The NLRC explained that the withholding of respondents salary was a valid exercise of management prerogative. The act was deemed justified as it was reasonable to demand an explanation for failure to report to work and to account for his work accomplishments. It held that the respondent voluntarily resigned as evidenced by the language used in his resignation letter and demand letters. Respondents motion for reconsideration was also denied. The CA reversed the NLRC resolutions. It rendered a new judgment awarding petitioner separation pay. CA held that withholding respondents salary was not a valid exercise of management prerogative as there is no such thing as a management prerogative to withhold wages temporarily. The malicious withholding of respondents salary made it impossible or unacceptable for respondent to continue working, thus, compelling him to resign. The respondents immediate filing of a complaint for illegal dismissal could only mean that his resignation was not voluntary. Aggrieved, the petitioners come to this Court praying for the reversal and setting aside of the subject CA decision. ISSUES:

1.
2. 3.

WON temporary withholding of respondents salary/wages by petitioners was a valid exercise of management prerogative. WON respondent was constructively dismissed. WON respondent voluntarily resigned.

HELD: 1. No. Management prerogative refers to the right of an employer to regulate all aspects of employment, such as the freedom to prescribe work assignments, working methods, processes to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of work. Although management prerogative refers to the right to regulate all aspects of employment, it cannot be understood to include the right to temporarily withhold salary/wages without the consent of the employee. To sanction such an interpretation would be contrary to Article 116 of the Labor Code. Said article makes it unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the workers consent. As correctly pointed out by the LA, absent a showing that the withholding of complainants wages falls under the exceptions provided in Article 113, the withholding thereof is thus unlawful. Petitioners argue that Article 116 of the Labor Code only applies if it is established that an employee is entitled to his salary/wages and, hence, does not apply in cases where there is an issue or uncertainty as to whether an employee has worked and is entitled to his salary/wages. The Court, however, finds petitioners evidence insufficient to prove that respondent did not work from November 16 to November 30, 2005. As can be gleaned from respondents Contract of Probationary Employment and the exchanges of electronic mail messages between Hartmannshenn and respondent, the latters duties as manager for business development entailed cultivating business ties, connections, and clients in order to make sales. Such duties called for meetings with prospective clients outside the office rather than reporting for work on a regular schedule. In other words, the nature of respondents job did not allow close supervision and monitoring by petitioners. Therefore, granting that respondent failed to answer Hartmannshenns mobile calls and to reply to two electronic mail messages and given the fact that he admittedly failed to report to work at the SHS plant twice each week during the subject period, such cannot be taken to signify that he did not work from November 16 to November 30, 2005. Moreover, although it cannot be determined with certainty whether respondent worked for the entire period from November 16 to November 30, 2005, the consistent rule is that if doubt exists between the evidence presented by the employer and that by the employee, the scales of justice must be tilted in favor of the latter. 2. Yes. The Court agrees with the LA and the CA that respondent was forced to resign and was, thus, constructively dismissed. In Duldulao v. Court of Appeals, it was held: There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued employment. It exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. What made it impossible, unreasonable or unlikely for respondent to continue working for SHS was the unlawful withholding of his salary. For said reason, he was forced to resign. It is of no moment that he served his resignation letter on November 30, 2005, the last day of the payroll period and a non-working holiday, since his salary was already due him on November 29, 2005, being the last working day of said period. In fact, he was then informed that the wages of all the other SHS employees were already released, and only his was being withheld. What is significant is that the respondent prepared and served his resignation letter right after he was informed that his salary was being withheld. It would be absurd to require respondent to tolerate the unlawful withholding of his salary for a longer period before his employment can be considered as so impossible, unreasonable or unlikely as to constitute constructive dismissal. Petitioners cite the case of Solas v. Power & Telephone Supply Phils., Inc. to support their contention that the mere withholding of an employees salary does not by itself constitute constructive dismissal. Petitioners are mistaken in anchoring their argument on said case, where the withholding of the salary was deemed lawful. In the above-cited case, the employees salary was withheld for a valid reason - it was applied as partial payment of a debt due to the employer, for withholding taxes on his income and for his absence without leave. The partial payment of a debt due to the employer and the withholding of taxes on income were valid deductions under Article 113 paragraph (c) of the Labor Code. The deduction from an employees salary for a due and demandable debt to an employer was likewise sanctioned under Article 1706 of the Civil Code. As to the withholding for income tax purposes, it was prescribed by the National Internal Revenue Code. Moreover, the employee therein was indeed absent without leave. In this case, the withholding of respondents salary does not fall under any of the circumstances provided under Article 113. Neither was it established with certainty that respondent did not work from November 16 to November 30, 2005. Hence, the Court agrees with the LA and the CA that the unlawful withholding of respondents salary amounts to constructive dismissal. 3. No. It is worthy to note that in his resignation letter, respondent cited petitioners illegal and unfair labor practice as his cause for resignation. As correctly noted by the CA, respondent lost no time in submitting his resignation letter and eventually filing a complaint for

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illegal dismissal just a few days after his salary was withheld. These circumstances are inconsistent with voluntary resignation and bolster the finding of constructive dismissal. G.R. No. 171327, June 18, 2010. ESTRELLA VELASCO, Petitioner, vs. TRANSIT AUTOMOTIVE SUPPLY, INC. and ANTONIO DE DIOS, Respondents. Facts: Estrella Velasco (petitioner) was originally hired as accounting clerk and later became the head of the Accounting Department while concurrently the Secretary to the President and General Manager, and Comptroller. Petitioner alleged that in January 1993, she was asked to resign as Comptroller and to concentrate on the preparation of Respondent Corporations Income Statement. Petitioner took a leave of absence for the whole month of February 1993. In a letter dated 5 March 1993, respondent corporation called petitioner's attention that she had been absent without official leave since 1 March 1993. Respondent Corporation required petitioner to explain her absence within three days from receipt of the letter; otherwise, her absence would be considered an abandonment of her duties and responsibilities. In her answer dated 31 March 1993, petitioner through her counsel alleged that she had nothing to explain because in February 1993, she was verbally informed by respondent corporation's President and General Manager, Antonio De Dios (De Dios), to resign from her employment as Comptroller. Petitioner then filed an action for constructive dismissal against respondent corporation and De Dios (collectively, respondents). Labor Arbiters Decision LA dismissed the complaint and ruled that petitioner was holding multiple positions and respondents only exercised their management prerogative. Petitioner appealed to the National Labor Relations Commission (NLRC). NLRCs Decision 1993: NLRC found that petitioner was constructively dismissed from employment and ruled for petitioners recovery of separation pay for having 21 years of service since reinstatement was not logical due to strained relationship between the parties. 1998: New Decision of the NLRC ruled that petitioners transfer was a demotion. The NLRC ruled that from performing a managerial function, petitioner was asked to perform a clerical task although she retained her salary and rank. CAs Decision 2005: CA reinstated the LAs decision, ruling that there was nothing in the records which would show that petitioner was harassed to force her to resign from work. Neither was petitioner maltreated, or a deliberate scheme employed to make her work grossly inconvenient or almost impossible to bear. The Court of Appeals noted that petitioner even admitted that respondents tried to contact her when she absented herself from work for a month. The Court of Appeals further ruled that petitioner was not asked to perform a function she had not been performing for years. Instead, there was only a transfer of some of her duties. The Court of Appeals ruled that petitioner was not terminated without cause or due process nor was she constructively dismissed. Issue: W/N was constructively dismissed from employment. Held: NO. SC agreed with CA in reversing the ruling of the NLRC and in finding that petitioner was not constructively dismissed from employment. In this case, it is undisputed that petitioner was holding three positions: Head of the Accounting Department, Secretary to the President and General Manager, and Comptroller. She was asked to relinquish her duties as Comptroller. Constructive dismissal is defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely, or when there is a demotion in rank or a diminution of pay. It exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment. Here, there was no diminution of petitioner's salary and other benefits. There was no evidence that she was harassed or discriminated upon, or that respondents made it difficult for her to continue with her other duties. Absent any evidence of bad faith, it is within the exercise of respondents' management prerogative to transfer some of petitioner's duties if in their judgment, it would be more beneficial to the corporation. Respondents required petitioner to explain her absence within three days from receipt of the letter. However, it was only on 31 March 1993 when petitioner answered that she had nothing to explain because in February 1993, she was verbally informed by De Dios to resign from her employment as Comptroller. Petitioner's belated reply showed her lack of intention to report back to work and to perform her other responsibilities. G.R. No. 163505 August 14, 2009 GUALBERTO AGUANZA, Petitioner, vs. ASIAN TERMINAL, INC., KEITH JAMES, RICHARD BARCLAY, and ATTY. RODOLFO CORVITE, Respondents. FACTS: Petitioner Gualberto Aguanza was employed with respondent company Asian Terminal, Inc. from April 15, 1989 to October 1997. He was initially employed as Derickman or Crane Operator and was assigned as such aboard Bismark IV, a floating crane barge owned by Asian Terminals, Inc. based at the port of Manila. He was receiving besides from his salary, meal allowance (P1,800. a month) and port allowance (P260. per day when the barge is assigned outside Manila. Sometime in September 1997, the Bismark IV, together with its crew, was temporarily assigned at the Mariveles Grains Terminal in Mariveles, Bataan. On October 20, 1997, respondent James Keith issued a memo to the crew of Bismark IV stating that the barge had been permanently transferred to the Mariveles Grains terminal beginning October 1, 1997 and because of that, its crew would no longer be entitled to out of port benefits of 16 hours overtime and P200 a day allowance. Aguanza, with four other members of the crew, stated that they did not object to the transfer of Bismark IV to Mariveles, Bataan, but they objected to the reduction of their benefits. When they objected to the reduction of their benefits, they were told by James Keith to report to the Manila office only to be told to report back to Bataan. On both occasions, Aguanza was not given any work assignment. After being shuttled between Manila and Bataan, [Aguanza] was constrained to write respondent Atty. Corvite for clarification of his status, at the same time informing the latter of his willingness to work either in Manila or Bataan. While he did not agree with private respondents terms and conditions, he was nonetheless willing to continue working without prejudice to taking appropriate action to protect his rights. According to the respondent, Aguanza insisted on reporting to work in Manila although his barge, Bismark IV, and its other crew were already permanently based in Mariveles, Bataan. Aguanza was not allowed to time in in Manila because his work was in Mariveles, Bataan. Because of private respondents refusal to give him any work assignment and pay his salary, Aguanza filed a complaint for illegal dismissal against respondents. The labor arbiter ruled in favor of the petitioner. NLRC reversed the arbiters decision and this was affirmed by the CA. The fixed overtime of 16 hours, out-of-port allowance and meal allowance previously granted to Aguanza were merely supplements or employment benefits given under a certain condition, i.e., if Aguanza will be temporarily assigned out-of-port. It is not fixed and is contingent or dependent of Aguanzas out-of-port reassignment. Hence, it is not made part of the wage or compensation. This Court also finds utter bad faith on the part of Aguanza. Aguanza claims that he does not contest his permanent reassignment to Mariveles, Bataan and yet he insisted on reporting to Manila. If petitioner had only been sincere to his words, he would have reported to Mariveles, Bataan where his work is, and in compliance with the employment contract with [ATI]. There was no illegal dismissal since it was Aguanza who refused to report to Mariveles, Bataan where he was assigned. ISSUE: 1. Whether or not CA erred in upholding the decision of the NLRC notwithstanding the fact that respondents appeal to the NLRC was never perfected in view of the insufficiency of the supersedeas bond posted by them.

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2. Whether or not CA erred in upholding the decision of the NLRC stating that Aguanza was not illegally dismissed RULING: The petition has no merit. We see no reason to overturn the rulings of the NLRC and of the appellate court. 1. As a preliminary matter, we agree with the NLRC and the appellate court that the alleged defect in the perfection of the appeal to the NLRC because of the insufficiency of the supersedeas bond is a defect in form which the NLRC may waive 2. Aguanza asserts that his transfer constituted constructive dismissal, while ATI asserts that Aguanzas transfer was a valid exercise of management prerogative. We agree with ATI. ATIs transfer of Bismark IVs base from Manila to Bataan was, contrary to Aguanzas assertions, a valid exercise of management prerogative. The transfer of employees has been traditionally among the acts identified as a management prerogative subject only to limitations found in law, collective bargaining agreement, and general principles of fair play and justice. Even as the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. On the other hand, the transfer of an employee may constitute constructive dismissal "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." Aguanzas continued employment was not impossible, unreasonable or unlikely; neither was there a clear discrimination against him. Among the employees assigned to Bismark IV, it was only Aguanza who did not report for work in Bataan. Aguanzas assertion that he was not allowed to "time in" in Manila should be taken on its face: Aguanza reported for work in Manila, where he wanted to work, and not in Bataan, where he was supposed to work. There was no demotion in rank, as Aguanza would continue his work as Crane Operator. Furthermore, despite Aguanzas assertions, there was no diminution in pay. We, thus, agree with the NLRC and the appellate court when they stated that the fixed overtime of 16 hours, out-of-port allowance and meal allowance previously granted to Aguanza were merely supplements or employment benefits given on condition that Aguanzas assignment was out-of-port. The fixed overtime and allowances were not part of Aguanzas basic salary. Aguanzas basic salary was not reduced; hence, there was no violation of the rule against diminution of pay.

RESIGNATION
G.R. No. 177114. January 21, 2010. MANOLO A. PEAFLOR vs. OUTDOOR CLOTHING MANUFACTURING CORPORATION, NATHANIEL T. SYFU, President, MEDYLENE M. DEMOGENA, Finance Manager, and PAUL U. LEE, Chairman. BRION, J.: FACTS: In September 1999, Petitioner was hired as probationary HRD Manager of Respondent Company. His work at the Company went well but changed when his close friend VP for Ops Edgar Lee left the Company because of a big fight with Chief Corporate Officer Nathaniel Syfu. When Outdoor Clothing began undertaking its alleged downsizing program due to negative business returns, Peaflor alleged that his department had been singled out. On the pretext of retrenchment, Peaflors two staff members were dismissed, leaving him as the only member of Outdoor Clothings HRD and compelling him to perform all personnel-related work. He worked as a one-man department, carrying out all clerical, administrative and liaison work; he personally went to various government offices to process the companys papers. He was tasked by the Company to tend to the hospitalization needs of his co-employee Lynn Padilla who suffered injuries in a bombing incident, and considered this an official business. He was surprised to know that the Company deducted 6 days salary since he failed to submit his trip ticket according to Finance Manager Demogena. When he returned from field work, Syfu appointed Buenaobra as the new HRD Manager. Petitioner tried to talk to Syfu but to no avail hence resigned by tendering an irrevocable resignation letter to Syfu. Petitioner filed a complaint for illegal dismissal with the LA claiming constructive dismissal and prayed for reinstatement and payment of backwages, illegally deducted salaries, damages, attorneys fees and other monetary claims. LAs Decision August 2001: LA found that petitioner was illegally dismissed and the respondent Company was ordered to reinstate petitioner to his former/ equivalent position and to pay him his illegally deducted salary for 6 days, proportionate 13th month pay, attorneys fess, moral and exemplary damages. NLRCs Decision The NLRC found Outdoor Clothings submitted memoranda sufficient to overturn the LAs decision. Petitioners resignation is a response to the Companys downward financial spiral and not to the allegedly degrading and hostile treatment that he was subjected to by Syfu. Buenaobra was appointed only after Petitioner submitted his resignation letter to cover for petitioners vacancy. NO illegal dismissal in this case, thus no basis for monetary awards. CAs Decision December 2006: CA affirmed NLRCs decision stating that Petitioner failed to present sufficient evidence supporting his claim on constructive dismissal, and ruling that his resignation was knowingly and voluntarily made. ISSUE: Whether or not the Court should entertain the instant petition which raises questions of facts not questions of law HELD: YES. Rule 45 of the Rules of Court which deals with legal issues is not an absolute rule; it admits of exceptions such as the instant case. In the labor law setting, we wade into factual issues when conflict of factual findings exists among the labor arbiter, the NLRC, and the CA. This is the exact situation that obtains in the present case since the labor arbiter found facts supporting the conclusion that there had been constructive dismissal, while the NLRCs and the CAs factual findings contradicted the labor arbiters findings. Under this situation, the conflicting factual findings below are not binding on us, and we retain the authority to pass on the evidence presented and draw conclusions therefrom. ISSUE: Whether or not the petitioner was constructively dismissed by the respondent Company HELD: YES. SC held that it is more consistent with human experience that Peaflor indeed learned of the appointment of Buenaobra only on March 13, 2000 and reacted to this development through his resignation letter after realizing that he would only face hostility and frustration in his working environment. Three very basic labor law principles support this conclusion and militate against the companys case. The first is the settled rule that in employee termination disputes, the employer bears the burden of proving that the employees dismissal was for just and valid cause. That Peaflor did indeed file a letter of resignation does not help the companys case as, other than the fact of resignation, the company must still prove that the employee voluntarily resigned. There can be no valid resignation where the act was made under compulsion or under circumstances approximating compulsion, such as when an employees act of handing in his resignation was a reaction to circumstances leaving him no alternative but to resign. In sum, the evidence does not support the existence of voluntariness in Peaflors resignation. Another basic principle is that expressed in Article 4 of the Labor Code that all doubts in the interpretation and implementation of the Labor Code should be interpreted in favor of the workingman. This principle has been extended by jurisprudence to cover doubts in the evidence presented by the employer and the employee. As shown above, Peaflor has, at very least, shown serious doubts about the merits of the companys case, particularly in the appreciation of the clinching evidence on which the NLRC and CA decisions were based. In such contest of evidence, the cited Article 4 compels us to rule in Peaflors favor.

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Thus, SC finds that Peaflor was constructively dismissed given the hostile and discriminatory working environment he found himself in, particularly evidenced by the escalating acts of unfairness against him that culminated in the appointment of another HRD manager without any prior notice to him. Where no less than the companys chief corporate officer was against him, Peaflor had no alternative but to resign from his employment. Last but not the least, SC has repeatedly given significance in abandonment and constructive dismissal cases to the employees reaction to the termination of his employment and have asked the question: is the complaint against the employer merely a convenient afterthought subsequent to an abandonment or a voluntary resignation? SC held from the records that Peaflor sought almost immediate official recourse to contest his separation from service through a complaint for illegal dismissal. This is not the act of one who voluntarily resigned; his immediate complaints characterize him as one who deeply felt that he had been wronged.

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