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2. G.R. No. 149859 June 9, 2004 RADIN C. ALCIRA, petitioner, vs.

NATIONAL LABOR RELATIONS COMMISSION, MIDDLEBY PHILIPPINES CORPORATION/FRANK THOMAS, XAVIER G. PEA and TRIFONA F. MAMARADLO, respondents. DECISION CORONA, J.: Before us on appeal is the decision of the Court of Appeals dated June 22, 2001 affirming the decision of the National Labor Relations Commission 5 dated March 23, 1999 which, in turn, affirmed the decision of labor arbiter Pedro Ramos dated May 19, 1998 dismissing petitioner Radin Alciras complaint for illegal dismissal with prayer for reinstatement, backwages, moral damages, exemplary damages and attorneys fees. The facts follow. Respondent Middleby Philippines Corporation (Middleby) hired petitioner as engineering support services supervisor on a probationary basis for six months. Apparently unhappy with petitioners performance, respondent Middleby terminated petitioners services. The bone of contention centered on whether the termination occurred before or after the six-month probationary period of employment. The parties, presenting their respective copies of Alciras appointment paper, claimed conflicting starting dates of employment: May 20, 1996 according to petitioner and May 27, 1996 according to respondent. Both documents indicated petitioners employment status as "probationary (6 mos.)" and a remark 6 that "after five months (petitioners) performance shall be evaluated and any adjustment in salary shall depend on (his) work performance." Petitioner asserts that, on November 20, 1996, in the presence of his co-workers and subordinates, a senior officer of respondent Middleby in bad faith withheld his time card and did not allow him to work. Considering this as a dismissal "after the lapse of his probationary employment," petitioner filed on November 21, 1996 a complaint in the National Labor Relations Commission (NLRC) against respondent Middleby contending that he had already become a regular employee as of the date he was illegally dismissed. Included as respondents in the complaint were the following officers of respondent Middleby: Frank Thomas (General Manager), Xavier Pea (Human Resources Manager) and Trifona Mamaradlo (Engineering Manager). In their defense, respondents claim that, during petitioners probationary employment, he showed poor performance in his assigned tasks, incurred ten absences, was late several times and violated company rules on the wearing of uniform. Since he failed to meet company standards, petitioners application to become a regular employee was disapproved and his employment was terminated. On May 19, 1998, the labor arbiter dismissed the complaint on the ground that: (1) respondents were able to prove that petitioner was apprised of the standards for becoming a regular employee; (2) respondent Mamaradlos affidavit showed that petitioner "did not perform well in his assigned work and his attitude was below par compared to the companys standard required of him" and (3) petitioners dismissal on November 20, 1996 was before his 7 "regularization," considering that, counting from May 20, 1996, the six-month probationary period ended on November 20, 1996. On March 23, 1999, the NLRC affirmed the decision of the labor arbiter. On June 22, 2001, the Court of Appeals affirmed the judgment of the NLRC. According to the appellate court: Even assuming, arguendo, that petitioner was not informed of the reasonable standards required of him by Middleby, the same is not crucial because there is no termination to speak of but rather expiration of contract. Petitioner loses sight of the fact that his employment was probationary, contractual in nature, and one with a definite period. At the expiration of the period stipulated in the contract, his appointment was deemed terminated and a notice or termination letter informing him of the non-renewal of his contract was not necessary. While probationary employees enjoy security of tenure such that they cannot be removed except for just cause as provided by law, such protection extends only during the period of probation. Once that period expired, the constitutional protection could no longer be invoked. Legally speaking, 8 petitioner was not illegally dismissed. His contract merely expired. Hence, this petition for review based on the following assignment of errors: I The Court of Appeals gravely erred, blatantly disregarded the law and established jurisprudence, in upholding the decision of the National Labor Relations Commission. II The Court of Appeals gravely erred and blatantly disregarded the law in holding that probationary employment is employment for a definite period. III The Court of Appeals gravely erred in holding that an employer can be presumed to have complied with its duty to inform the probationary employee of the standards to make him a regular employee. IV
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The Court of Appeals gravely erred and failed to afford protection to labor in not applying to the instant case the doctrine laid down by this Honorable 9 Court in Serrano vs. NLRC, et. al., G.R. No. 117040, January 27, 2000. Central to the matter at hand is Article 281 of the Labor Code which provides that: ART. 281. PROBATIONARY EMPLOYMENT. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. The first issue we must resolve is whether petitioner was allowed to work beyond his probationary period and was therefore already a regular employee at the time of his alleged dismissal. We rule in the negative. Petitioner claims that under the terms of his contract, his probationary employment was only for five months as indicated by the remark "Please be informed that after five months, your performance shall be evaluated and any adjustment in salary shall depend on your work performance." The argument lacks merit. As correctly held by the labor arbiter, the appointment contract also stated in another part thereof that petitioners employment 10 status was "probationary (6 mos.)." The five-month period referred to the evaluation of his work. Petitioner insists that he already attained the status of a regular employee when he was dismissed on November 20, 1996 because, having started work on May 20, 1996, the six-month probationary period ended on November 16, 1996. According to petitioners computation, since Article 13 of the Civil Code provides that one month is composed of thirty days, six months total one hundred eighty days. As the appointment provided that petitioners status was "probationary (6 mos.)" without any specific date of termination, the 180th day fell on November 16, 1996. Thus, when he was dismissed on November 20, 1996, he was already a regular employee. Petitioners contention is incorrect. In CALS Poultry Supply Corporation, et. al. vs. Roco, et. al., this Court dealt with the same issue of whether an employment contract from May 16, 1995 to November 15, 1995 was within or outside the six-month probationary period. We ruled that November 15, 1995 was still within the six-month probationary period. We reiterate our ruling in CALS Poultry Supply: (O)ur computation of the 6-month probationary period is reckoned from the date of appointment up to the same calendar date of the 6th month following.(italics supplied) In short, since the number of days in each particular month was irrelevant, petitioner was still a probationary employee when respondent Middleby opted not to "regularize" him on November 20, 1996. The second issue is whether respondent Middleby informed petitioner of the standards for "regularization" at the start of his employment. Section 6 (d) of Rule 1 of the Implementing Rules of Book VI of the Labor Code (Department Order No. 10, Series of 1997) provides that: (d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee. We hold that respondent Middleby substantially notified petitioner of the standards to qualify as a regular employee when it apprised him, at the start of his employment, that it would evaluate his supervisory skills after five months. In Orient Express Placement Philippines vs. National Labor Relations 12 Commission, we ruled that an employer failed to inform an employee of the reasonable standards for becoming a regular employee: Neither private respondent's Agency-Worker Agreement with ORIENT EXPRESS nor his Employment Contract with NADRICO ever mentioned that he must first take and pass a Crane Operator's License Examination in Saudi Arabia before he would be allowed to even touch a crane. Neither did he know that he would be assigned as floorman pending release of the results of the examination or in the event that he failed; more importantly, that he would be subjected to a performance evaluation by his superior one (1) month after his hiring to determine whether the company was amenable to continuing with his employment. Hence, respondent Flores could not be faulted for precisely harboring the impression that he was hired as crane operator for a definite period of one (1) year to commence upon his arrival at the work-site and to terminate at the end of one (1) year. No other condition was laid out except that he was to be on probation for three (3) months.(emphasis supplied) Conversely, an employer is deemed to substantially comply with the rule on notification of standards if he apprises the employee that he will be subjected to a performance evaluation on a particular date after his hiring. We agree with the labor arbiter when he ruled that: In the instant case, petitioner cannot successfully say that he was never informed by private respondent of the standards that he must satisfy in order to be converted into regular status. This rans (sic) counter to the agreement between the parties that after five months of service the petitioners performance would be evaluated. It is only but natural that the evaluation should be made vis--vis the performance standards for the job. Private respondent Trifona Mamaradlo speaks of such standard in her affidavit referring to the fact that petitioner did not perform well in his assigned work and 13 his attitude was below par compared to the companys standard required of him. The third issue for resolution is whether petitioner was illegally dismissed when respondent Middleby opted not to renew his contract on the last day of his probationary employment.
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It is settled that even if probationary employees do not enjoy permanent status, they are accorded the constitutional protection of security of tenure. This means they may only be terminated for just cause or when they otherwise fail to qualify as regular employees in accordance with reasonable standards 14 made known to them by the employer at the time of their engagement. But we have also ruled in Manlimos, et. al. vs. National Labor Relations Commission that this constitutional protection ends on the expiration of the probationary period. On that date, the parties are free to either renew or terminate their contract of employment. Manlimos concluded that "(t)his 16 development has rendered moot the question of whether there was a just cause for the dismissal of the petitioners xxx." In the case at bar, respondent Middleby exercised its option not to renew the contract when it informed petitioner on the last day of his probationary employment that it did not intend to grant him a regular status. Although we can regard petitioners severance from work as dismissal, the same cannot be deemed illegal. As found by the labor arbiter, the NLRC and the Court of Appeals, petitioner (1) incurred ten absences (2) was tardy several times (3) failed to wear the proper uniform many times and (4) showed inferior supervisory skills. Petitioner failed to satisfactorily refute these substantiated allegations. Taking all this in its entirety, respondent Middleby was clearly justified to end its employment relationship with petitioner. WHEREFORE, the petition is hereby DENIED. No costs. SO ORDERED. 3.G.R. No. L-53453 January 22, 1986 MANILA HOTEL CORPORATION, Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and RENATO L. CRUZ, Respondents. CUEVAS, J.: chanrobles virtual law library This petition for certiorari seeks the review and reversal of the decision of respondent National Labor Relations Commission (NLRC) dated January 11, 1978, which affirmed in toto the decision of the Labor Arbiter ordering petitioner Manila Hotel Corporation to reinstate private respondent Renato L. Cruz "to his former position as gardener without loss of seniority rights and other privileges appertaining thereto if any, with backwages from the date of his dismissal on March 19, 1977 until he is actually reinstated", and "to immediately reclassify him as a regular or permanent employee".chanroblesvirtualawlibrarychanrobles virtual law library Renato L. Cruz was employed as gardener by Manila Hotel on "probation status" effective September 22, 1976. The appointment which was signed by Cruz provided, inter alia: chanrobles virtual law library 1. ...chanroblesvirtualawlibrarychanrobles virtual law library 2. Your compensation will be FOUR HUNDRED PESOS (P400.00) per month payable semi-monthly.chanroblesvirtualawlibrarychanrobles virtual law library 3. This employment is for a probationary period of six (6) months and subject to your submitting all necessary work permits and clearances such as medical and security clearances. Your job performance and efficiency upon the expiration of your probation shall be reviewed and appraised in accordance with the HOTEL's and other generally accepted work standards. If you have satisfactorily passed your probation, you will be reclassified to the regular roll.chanroblesvirtualawlibrarychanrobles virtual law library 4. As soon as you become a regular employee, you will be entitled to (a) number of benefits and privileges that have been instituted. 1 On March 20, 1977, or a day before the expiration of the probationary period, Cruz's position was "abolished" by Manila Hotel allegedly due to economic reverses or business recession, and to salvage the enterprise from imminent danger of collapse. 2 Anent said reason for his termination and/or abolition, private respondent maintains that - chanrobles virtual law library On March 19, 1977, at the close of office hours, Mr. Rodriguez called complainant Cruz and the other three (3) gardeners (Rufino Arcis, Albert Manila and Arthur Reyes) who were also under a Probationary Appointment and told them to immediately tender their respective resignation, because allegedly the Hotel was under a 'retrenchment policy'. The announcement was a blow to Mr. Cruz. In two days he would have finished his probationary period, and he hoped to be reclassified as a regular employee. Earlier, that morning, Mr. Rodriguez had just commended him for his job performance and had designated him "In-Charge" or Lead Gardener. Mr. Cruz requested additional time to think it over. The request was ignored. Mr. Rodriguez informed them that as of that day they were terminated. The following day, Mr. Cruz reported for work nonetheless. However, his time card was no longer in the card rack. From then on Mr. Cruz embarked on a daily trip to Manila Hotel desperately hoping that his short but commendable job performance would earn him a new appointment. It was a fruitless effort for always, management's reply was that 'no position was available which suited his qualification'. It has been so to the present.chanroblesvirtualawlibrarychanrobles virtual law library Ironically, he later learned of Arcis' and Manila's promotion to Steward and Reyes' retention as sole gardener. 3chanrobles virtual law library Sometime on March 24, 1977, private respondent was upon his request, granted a personal clearance. 4 Claiming that his dismissal was illegal and constitutes unfair labor practice, Cruz filed with the Regional Office No. IV, Department (now Ministry) of Labor on March 25,1977 a complaint against petitioner Manila Hotel. 5The case was certified for compulsory arbitration.chanroblesvirtualawlibrarychanrobles virtual law library On December 29, 1977, Labor Arbiter Conrado B. Maglaya rendered a decision 6the dispositive portion of which reads as follows: WHEREFORE, premises considered, respondent Manila Hotel is hereby ORDERED to reinstate complainant Renato L. Cruz to his former position as Gardener without loss of seniority rights and other privileges appertaining thereto if any, with backwages from the date of his dismissal on March 19, 1977 until he is actually reinstated.chanroblesvirtualawlibrarychanrobles virtual law library Respondent is likewise ORDERED upon reinstatement of complainant, to immediately reclassify him as a regular or permanent employee and issue therefor the corresponding appointment. Respondent is further ORDERED to submit proof of compliance with these orders immediately thereafter. Petitioner appealed to the National Labor Relations Commission (NLRC). 7 And the latter affirmed in toto the decision 8 of the Labor Arbiter thereby dismissing petitioner's appeal for lack of merit.chanroblesvirtualawlibrarychanrobles virtual law library Petitioner now contends that respondent Commission (1) unwarrantedly disregarded the fact that private respondent was a mere probationary employee whose position could be abolished for cause; (2) unjustifiably refused to consider the serious business reverses and uneconomic operation as a valid and just cause for terminating services of a probationary employee or abolishing his position upon the expiration of the probationary employment; and (3) erroneously and illegally coerce petitioner into retaining private respondent and paying him backwages even long after the expiration of the probationary
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employment notwithstanding the validity of abolition of private respondent's position and without giving petitioner the right or opportunity to evaluate the performance of the private respondent prior to reclassification of his position to regular status.chanroblesvirtualawlibrarychanrobles virtual law library In a Resolution promulgated on April 11, 1980, We resolved to require respondents to comment on the petition without however giving due course thereto. We likewise issued a restraining order enjoining NLRC from executing the decision complained of until after the instant petition shall have been finally resolved.chanroblesvirtualawlibrarychanrobles virtual law library There is no dispute that as a probationary employee, private respondent Cruz had but a limited tenure. Although on probationary basis, however, Cruz still enjoys the constitutional protection on security of tenure. During his tenure of employment therefore or before his contract expires, respondent Cruz cannot be removed except for cause as provided for by law. This is categorically provided for by Art. 282 of the Labor Code, which states: Art. 282. Probationary Employment- Probationary employment shall not exceed six (6) mo nths from the date the employee started working, unless it is covered by apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards, made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. (Emphasis supplied) This security of tenure of a probationary employee finds added support in the Biboso vs. Victorias Mining case' for even as this Court ruled in that case that the respondent public official did not commit grave abuse of discretion in dismissing the teachers' claim for reinstatement following the expiration of their contracts, it nevertheless held that- chanrobles virtual law library 2. This is by no means to assert that the security of tenure protection of the Constitution does not apply to probationary employees. The Labor Code has wisely provided for such a case thus: 'the termination of employment of probational employees and those employed with a fixed period shall be subject to such regulations as the Secretary of Labor may prescribe to prevent the circumvention of the right of the employees to be secured in their employment as provided herein'. There is no question here as noted in the assailed order of Presidential Executive Assistant Clave, that petitioners did not enjoy a permanent status. During such period they could remain in their position and any circumvention of their rights, in accordance with the statutory scheme, subject to inquiry and thereafter correction by the Department of Labor. Thus there was the safeguard as to their duration of employment being respected, To that extent, their tenure was secure. ... 9 chanrobles virtual law library This brings us to the issue of whether or not, respondent Cruz's termination and/or abolition of his position made on a justifiable cause. Petitioner justifies such termination on ground of retrenchment. Respondent NLRC found this defense untenable. We agree, since an examination of the records failed to indicate any factual or legal basis for such a plea. No financial statement of any kind for the year 1976 or immediately prior thereto was submitted by the petitioner to prove its economic difficulties. Its claim of business reverses and imminent danger of collapse are nothing but glittering generalities.chanroblesvirtualawlibrarychanrobles virtual law library It cannot be denied that a host of cases has affirmed the right of an employer to layoff or dismiss employees due to losses in the operation of business, lack of work, and considerable reduction in the volume of the employer's business. In the case at bar, however, petitioner failed to go into the specifics of its claimed business reverses. It prefers to hide behind the blanket observation of the then Assistant Secretary of Labor that "the hotel industry is virtually in crisis as a result of plummeting business". That the hotel industry is in crisis does not, however, necessarily mean that petitioner is itself suffering from business reverses. Being one of the better known hotels in the country, it could be an exception. But petitioner's asserted excuses being in the nature of an affirmative defense, the burden lies on its shoulder to substantiate such an allegation with clear and satisfactory evidence, which it miserably failed to do.chanroblesvirtualawlibrarychanrobles virtual law library Petitioner likewise argues that it was imperatively necessary to reduce its personnel due to losses in the operation of its business; that it is an employer's prerogative to determine who among its employees should be retained; and that in the exercise thereof, it may not be interfered with. The only exception is when it can be shown that the employer, under cover of this right, is proceeding against an employee in an unjust or capricious manner. Specifically, the power of an employer to terminate a probationary employment contract is subject to various limitations. First, it must be exercised in accordance with the specific requirements of the contract. If a particular time is prescribed, the termination must be done within such time. Should the contract require a written notice, then such form should be used. Secondly, the dissatisfaction of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and thirdly, there must be no unlawful discrimination in the dismissal. 10 The records show that petitioner had four (4) gardeners under probationary employment. Respondent Cruz was one of them. Within the period of his probationary employment, Cruz was made a lead gardener, clearly a recognition of his good performance and competent service. When petitioner, pursuant to its alleged policy of retrenchment, abolished Cruz's position as gardener, the three other gardeners in its employ under similar probationary contract were retained. Two of them, Rufino Arcis and Albert Manila, were even promoted and appointed as stewards. The third one, Arturo Reyes, was retained as sole gardener. Petitioner justifies Cruz not being made a steward he having reached only third year high school. But if a third year high school may not be promoted to be a steward from that of being a gardener, how then can Arcis who was merely a sixth grader, qualify for promotion from gardener to steward? Our examination of the records failed to reveal any standard or criteria adopted by the petitioner in making the promotion and selection in question thus leading us to the conclusion that Cruz was arbitrarily terminated and/or dismissed.chanroblesvirtualawlibrarychanrobles virtual law library What makes Cruz's dismissal highly suspicious is that it took place at a time when he needs only but a day to be eligible as a regular employee. That he is competent finds support in his being promoted to a lead gardener in so short span of less than six (6) months. There is that strong presumption in his favor that his performance had been satisfactory. By terminating his employment and/or abolishing his position with but only one day remaining in his probationary appointment, petitioner deprived Cruz of qualifying as, a regular employee with its concommitant rights and privileges. Cruz was also deprived of his only means of livelihood upon a vague and empty assertion of "retrenchment.chanroblesvirtualawlibrarychanrobles virtual law library Very recently, we had occasion to rule that the prerogative of management to dismiss or lay-off an employee must be done without abuse of discretion, for what is at stake is not only petitioner's position but also his means of livelihood. 11 The right of an employer to freely select or discharge his employees is subject to regulation by the State, basically in the exercise of its paramount police power. 12This is so because the preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profits. 13 In the final analysis, what is in issue is the correctness of the findings of facts made by the National Labor Relations Commission. Such findings of the Commission are entitled to great respect if supported by substantial evidence 14 as in the present case. Moreover, alleged error in the National Labor Relations Commission's factual finding is not correctible by certiorari but by ordinary appeal. 15 Since there was no valid termination, private respondent is entitled under Article 280 of the Labor Code to reinstatement without loss of seniority rights and with backwages from the time his compensation was withheld up to the time of his reinstatement. However, in a number of illegal dismissal cases, 16this Court in the interest of justice and expediency, has adopted the policy of granting backwages for a maximum period of three (3) years without qualification and deduction.chanroblesvirtualawlibrarychanrobles virtual law library

Considering that this case has been pending since March 25, 1977 or a period of almost nine (9) years now, an award of backwages for three (3) years is just and reasonable.chanroblesvirtualawlibrarychanrobles virtual law library WHEREFORE, the appealed decision is hereby MODIFIED insofar as the payment of backwages is concerned in that the petitioner is ordered to pay private respondent Cruz three (3) years backwages computed on the basis of his pay as of March 19, 1977, without qualification and deduction.chanroblesvirtualawlibrarychanrobles virtual law library Except as thus modified, the appealed decision is AFFIRMED in all other respects. The restraining order earlier issued is hereby ordered lifted and/or set aside.chanroblesvirtualawlibrarychanrobles virtual law library Costs against petitioner.chanroblesvirtualawlibrarychanrobles virtual law library SO ORDERED. 4. SECOND DIVISION [G.R. No. 121962. April 30, 1999] ESPERANZA C. ESCORPIZO, and UNIVERSITY OF BAGUIO FACULTY EDUCATION WORKERS UNION, Petitioners, vs.UNIVERSITY OF BAGUIO and VIRGILIO C. BAUTISTA and NATIONAL LABOR RELATIONS COMMISSION, Respondents. DECISION QUISUMBING, J.: This special civil action for certiorari seeks to annul the Resolutioni[1 of NLRC promulgated on May 31, 1995 in NLRC Case No. RAB - CAR - 07-0217-92 which dismissed petitioners appeal and affirmed the decision of the Labor Arbiter. Petitioner Esperanza Escorpizo was initially hired by respondent university on June 13, 1989 as a high school classroom teacher. Under the rules of the respondent university, appointment to teach during the first two years at the university is probationary in nature. During the probation period, the teacher is observed and evaluated to determine his competency. Attainment of a permanent status by a faculty member is conditioned upon compliance with certain requirements, such as passing the professional board examination for teachers (PBET). On March 18, 1991, respondent university informed Escorpizo that her employment was being terminated at the end of the school semester in view of her failure to pass the PBET. But before the start of the school year 1991-1992, Escorpizo reapplied and pleaded that she be given another chance. She told the respondent school that she had just taken the PBET and hoped to pass it. As Escorpizos appeal was favorably considered, she was allowed to teach during the school year 1991-1992. However, her continued employment was conditioned on her passing the PBET. Unfortunately, Escorpizo failed again. Undaunted, Escorpizo took the examination a third time in November 1991. At the end of the school year 1991-1992, respondent university evaluated the teachers performance to determine who would be in the list for the next school year. Escorpizo, not having passed the PBET yet, was not included. Much later, on June 8, 1992, the results of the PBET were released and this time Escorpizo passed said examination. Nevertheless, on June 15, 1992, respondent university no longer renewed Escorpizos contract of employment on the ground that she failed to qualify as a regular teacher. This prompted Escorpizo to file on July 16, 1992 a complaint for illegal dismissal, payment of backwages and reinstatement against private Respondents. On June 22, 1993, the labor arbiter ruled that respondent university had a permissible reason in not renewing the employment contract of Escorpizo.ii[2Nevertheless, the labor official ordered the reinstatement of Escorpizo and disposed of the case as follows: WHEREFORE, evidence and law considered, the respondents are hereby directed to cause the immediate reinstatement of the complainant but without backwages, and to extend to her regular status. All other claims are hereby dismissed for lack of merit. SO ORDERED.iii[3 Dissatisfied with the decision there being no award of backwages, Escorpizo appealed to the National Labor Relations Commission (NLRC). But in its assailed Resolutioniv[4 dated May 31, 1995, the NLRC dismissed said appeal and affirmed the labor arbiters decision. Instead of filing the required motion for reconsideration, petitioners filed this instant petitionv[5 imputing grave abuse of discretion on the part of public respondent in affirming the decision of the labor arbiter. This precipitate filing of petition for certiorari under Rule 65 without first moving for reconsideration of the assailed resolution warrants the outright dismissal of this case. As we consistently held in numerous cases,vi[6 a motion for reconsideration is indispensable for it affords the NLRC an opportunity to rectify errors or mistakes it might have committed before resort to the courts can be had. It is settled that certiorari will lie only if there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law against acts of public respondents. In the case at bar, the plain and adequate remedy expressly provided by law was a motion for reconsideration of the impugned resolution, based on palpable or patent errors, to be made under oath and filed within ten (10) days from receipt of the questioned resolution of the NLRC,vii[7 a procedure which is jurisdictional. Hence, original action of certiorari, as in this case, will not prosper. Further, it should be stressed that without a motion for reconsideration seasonably filed within the ten-day reglementary period, the questioned order, resolution or decision of NLRC, becomes final and executory after ten (10) calendar days from receipt thereof. Consequently, the merits of the case can no longer be reviewed to determine if the public respondent had committed any grave abuse of discretion.viii[8 Besides, petitioners did not comply with the rule on certification against forum shopping. As pointed out by the private respondents, the certification in the present petition was executed by the counsel of petitioners,ix[9 which is not correct. The certification of non-forum shopping must be by the plaintiff or any of the principal party and not the attorney.x[10 This procedural lapse on the part of petitioners is also a cause for the dismissal of this action. To be sure, even if the aforesaid procedural and technical infirmities were to be set aside, we find no cogent reason to depart from the decision of public respondent as hereunder elucidated. Definitely, no grave abuse of discretion could be imputed to the public respondent in affirming the decision of the labor arbiter. Petitioners contend that Escorpizo had attained the status of a regular employee having rendered very satisfactory performance as probationary teacher for two years, consistent with the collective bargaining agreement between the respondent university and petitioner union of which Escorpizo is a member. They argue that the prerequisite prescribed by respondent university that teachers pass the PBET to attain regular employment has no legal basis because it is not stipulated in the collective bargaining agreement. This contention, in our view, is bereft of merit. A probationary employee is one who, for a given period of time, is being observed and evaluated to determine whether or not he is qualified for permanent employment. A probationary appointment affords the employer an opportunity to observe the skill, competence and attitude of a probationer. The word probationary, as used to describe the period of employment, implies the purpose of the term or period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer at the same time, seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment.xi[11

There is no dispute that Escorpizo was a probationary employee from the time she was employed on June 13, 1989 and until the end of the school semester in March 1991 or for two academic years. Thereafter, on her plea, she was again allowed to teach for school year 1991-1992. She knew that her status then was not that of a regular employee. For, she was also aware that her attainment of a regular employment is conditioned upon compliance with the requisites attached to her position, pursuant to the rules prescribed by respondent university, to wit: PROBATIONARY STATUS An appointment to teach during the first two years at the University is probationary in nature. xxx. During the period of probation (four semesters, excluding summer terms), the teacher is observed and evaluated formally by a committee composed of: (1) the most ranking/senior member of the faculty in his discipline/field of specialization, (2) his department head or college dean, (3) the Personnel Director and (4) the Vice President for Academic Affairs, including his students to determine his competency and fitness to be elevated to permanent status. xxx xxx xxx Permanent status is granted to the faculty member of the high school or elementary school who has satisfactorily complied with the requirements of the probationary period, has at least a bachelors degree in education, and has passed the Professional Teacher Board Examination or an equivalent Civil Service Examination.xii[12 Under the aforecited rule, the following conditions must concur in order that a probationary teacher may be extended a regular appointment; (1) the faculty member must satisfactorily complete the probationary period of four semesters or two years, within which his performance shall be observed and evaluated for the purpose of determining his competency and fitness to be extended permanent status; and (2) the faculty member must pass the PBET or an equivalent civil service examination. Admittedly, while Escorpizo met the first requirement, she did not fulfill the second. She had failed the PBET twice at the time her probationary period ended. That she did not qualify to become a permanent employee is further evidenced by the fact that before her employment contract expired, she was informed that her services would be terminated by the end of the school year in March 1991. When she was given, upon her plea, a teaching load in the next succeeding school year, it was already beyond the two-year probationary period. The most that could be conceded in this situation is that her continued employment was deemed an extension, ex-gratia, of her probationary period, affording her another chance to pass the requisite licensure test for teachers.xiii[13 Petitioners did not even deny that Escorpizo was rehired on a temporary basis on condition that she has to pass the PBET in order to become a permanent employee. Under no circumstance could continued employment alone beyond the two-year period bestow on her the status of a regular employee. It was only after fulfilling the cited second requirement when, on the third try, she passed the PBET that she qualified for regular and permanent employment. Petitioners reliance on the collective bargaining agreement (CBA) alone is not tenable. Indeed, provisions of a CBA must be respected since its terms and conditions constitute the law between the contracting parties. Those who are entitled to its benefits can invoke its provisions. And in the event that an obligation therein imposed is not fulfilled, the aggrieved party has the right to go to court for redress.xiv[14 To buttress their position, petitioners cite the following provision of the CBA between respondent university and petitioner union: SECTION 3. Probationary academic employees. A probationary academic employee is one hired by the Administration on trial or probation for the purpose of occupying, if found fit and qualified, a permanent or regular position in the University. Before such probationary employee becomes regular or permanent, he shall undergo for two (2) years, which period however, may be reduced by the Administration at the latters discretion.xv[15 Clearly, the abovequoted provision does not mention that passing the PBET is a prerequisite for attaining permanent status as a teacher. Nevertheless, the aforecited CBA provision must be read in conjunction with statutory and administrative regulations governing faculty qualifications. It is settled that an existing law enters into and forms part of a valid contract without the need for the parties expressly making reference to it.xvi[16 Further, while contracting parties may establish such stipulations, clauses, terms and conditions as they may see fit, such right to contract is subject to limitation that the agreement must not be contrary to law or public policy.xvii[17 In this connection, DECS Order No. 38, series of 1990, a regulation implementing Presidential Decree No. 1006xviii[18 or the Decree Professionalizing Teaching stipulates that no person shall be allowed to engage in teaching and/or act as a teacher unless he has registered as professional teacher with the National Board for Teachers. To be eligible as professional teacher, one must have passed the board examination for teachers or the examinations given by the Civil Service Commission or jointly by the Department of Education, Culture & Sports and the Civil Service Commission. The Order also provides that effective January 1, 1992, no teacher in the private schools shall be allowed to teach unless he or she is a registered professional teacher. Significantly, school officials are enjoined by the said administrative order to ensure that all persons engaged in teaching in the public or private elementary or secondary schools are registered professional teachers. Undoubtedly, the requirement of passing the PBET before one could become a regular employee as prescribed by respondent university is legally in order. Being a prerequisite imposed by law, such requirement could not have been waived by respondent university, as herein insisted by petitioners. In the same vein, petitioners proposition that upon completion of two-year probationary period with a very satisfactory performance, Escorpizo automatically becomes permanent is not correct. For as earlier stressed, Escorpizo could only qualify to become permanent employee upon fulfilling the reasonable standards for permanent employment which include passing the board examination for teachers. This is by no means to assert that probationary teachers do not enjoy security of tenure. They enjoy security of tenure in the sense that during their probationary employment they cannot be dismissed except for cause. However, upon expiration of their contract of employment, probationary academic personnel cannot claim security of tenure and compel their employers to renew their employment contracts.xix[19 In fact, the services of an employee hired on probationary basis may be terminated when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. There is nothing that would hinder the employer from extending a regular or permanent appointment to an employee once the employer finds that the employee is qualified for regular employment even before the expiration of the probationary period. Conversely, if the purpose sought by the employer is neither attained nor attainable within the said period, the law does not preclude the employer from terminating the probationary employment on justifiable ground.xx[20 In the instant case, Escorpizo was entitled to security of tenure during the period of her probation but such protection ended the moment her employment contract expired at the close of school year 1991-1992 and she was not extended a new appointment. No vested right to a permanent appointment had as yet accrued in Escorpizos favor since she had not yet complied, during her probation, with the prerequisites necessary for the acquisition of permanent status.xxi[21 Consequently, as respondent university was not under obligation to renew Escorpizos contract of employment, her separation cannot be said to have been without justifiable cause. Legally speaking, Escorpizo was not illegally dismissed. Her contract merely expired. WHEREFORE, the instant petition is hereby DISMISSED, and the assailed RESOLUTION of public respondent is hereby AFFIRMED. Costs against petitioners. SO ORDERED.

Just Causes for termination of Employement 1. THIRD DIVISION G.R. No. 165389 : October 17, 2008 NFD International Manning Agents and A/S VULCANUS OSLO, Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION, JOSE I. ILAGAN, JR. and CONSTANTINO CO, JR., Respondents. DECISION AUSTRIA-MARTINEZ, J.: 1 Assailed in the present Petition for Review on Certiorari under Rule 45 of the Rules of Court is the June 21, 2004 Decision and September 14, 2004 2 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 78870. The facts of the case are as follows:cra:nad Jose I. Ilagan, Jr. and Constantino Co, Jr. (private respondents) were among 21 Filipino seamen hired by herein petitioner NFD International Manning Agents, Inc. (NFD) to work on board the chemical tanker M/T Lady Helene, a vessel owned and operated by petitioner A/S Vulcanus Oslo (Vulcanus), NFD's foreign principal. On February 11, 1997, while M/T Lady Helene was at Island View Port, Durban, South Africa, Ship Master Captain Steiner Andersen dismissed the 21 Filipino seamen, including herein private respondents, from their employment. They were subsequently repatriated, arriving in the Philippines on February 15, 1997. On March 3, 1997, NFD filed before the Adjudication Office of the Philippine Overseas Employment Administration (POEA), a disciplinary complaint against the 21 seamen alleging that they were guilty of mutiny, insubordination, desertion/attempting to desert the vessel and conspiracy. Subsequently, in an 3 Order dated October 12, 1999, the POEA Adjudication Office dismissed the disciplinary complaint filed by NFD, ordering that the names of the 21 seamen be removed from the POEA watchlist. Meanwhile, on May 6, 1997, private respondents, together with eight (complainants) of the 21 seamen whose employments were terminated, filed with 4 the National Labor Relations Commission (NLRC), National Capital Region in Quezon City, a Complaint for wrongful breach of contract, illegal dismissal and damages against NFD and Vulcanus, contending that: they were summarily dismissed from their employment without just and valid cause and in gross violation of the terms of their employment contracts; they were forcibly disembarked from the vessel; at the time of their discharge, and up to the filing of their complaint, they had not been paid their accrued salaries, guaranteed overtime pay and leave pay; for their summary dismissal, forcible disembarkation and subsequent repatriation, they seek recovery of their unpaid wages and other benefits as well as moral and exemplary damages and attorney's fees. 5 In their Position Paper, NFD and Vulcanus (petitioners) contended: The complainants were validly and lawfully dismissed from their employment for their acts of "mutiny, insubordination, desertion/attempting to desert the vessel and conspiracy among themselves together with the other Filipino seamen in refusing and or failing to join M/T Lady Helene in its next trip or destination to Mauritius without just and valid cause"; contrary to complainants' claim, they were not forcibly disembarked from the vessel; four out of the ten complainants had already withdrawn their complaints; out of the remaining six complainants, five were given the option to return to M/T Lady Helene and rejoin it in its next trip to Mauritius; the filing of the complaint was merely an afterthought of the complainants after NFD filed cases for disciplinary action against them; complainants were not entitled to any of the amounts which they sought to recover, instead, they should reimburse NFD for the expenses incurred by the latter in connection with their valid dismissal and subsequent repatriation to the Philippines. 6 In their Reply to Respondents' Position Paper, complainants averred that no single specific act of insubordination, desertion or attempt to desert the vessel or refusal to sail with the vessel was attributed to them; the Filipino crewman who reportedly instigated the alleged mutiny was among those absolved of any liability by petitioners in exchange for a waiver or quitclaim which he may have had against the latter; the disciplinary cases filed against them was a tactical move resorted to by herein petitioners to preempt complainants from filing a complaint for illegal dismissal; nothing was alleged and no evidence was presented to prove that complainants were accorded the benefit of due process before they were terminated from their employment. 7 8 In their Rejoinder, private respondents contended that the Affidavit of Anselmo V. Rodriguez, NFD President and General Manager, contained several attachments proving the illegal acts of the complainants; that it was an act of desperation on the part of complainants to put color to the action of NFD in promptly reporting to the POEA the illegal acts committed by the latter; that, on the contrary, the complaint for illegal dismissal, which was filed three months after their termination from employment took place, was the complainants' belated move to serve as a smokescreen for their illegal acts. On January 30, 1998, the Labor Arbiter (LA) rendered judgment dismissing the Complaint on the ground that the complainants were lawfully dismissed for 9 just cause. cra 10 Complainants filed an appeal with the NLRC. cra 11 On August 30, 2001, the NLRC promulgated a Decision, the dispositive portion of which reads as follows: WHEREFORE, the assailed decision is set aside. The respondents [herein petitioners] are directed to jointly and severally pay the appellants complainants[herein private respondents and their companions] their wages for the payment of the unexpired portion of their respective contracts, and unpaid wages including moral and exemplary damages of P50,000.00 each and ten percent (10%) attorney's fees of the total amount awarded. The complaint of Alcesar Baylosis is hereby dismissed in view of the settlement of the monetary claims effected on July 17, 1997. 12 SO ORDERED. 13 14 Herein petitioners then filed a Motion for Reconsideration. On April 9, 2002, the NLRC came up with the herein assailed Resolution which granted petitioners' motion and reinstated the Decision dated January 30, 1998 of the LA in their favor. 15 16 Complainants filed a Motion for Reconsideration but it was denied by the NLRC in its Order promulgated on June 16, 2003. Thereafter, five out of the ten original complainants, to wit: Jose I. Ilagan, Jr. (herein private respondent), Reynaldo G. Digma, Francisco C. Octavio, Constantino D. Co, Jr. (herein private respondent) and Jesus G. Domingo filed a special civil action for certiorari with the CA assailing the April 9, 2002 17 Resolution and the June 16, 2003 Order of the NLRC. cra 18 On September 17, 2003, the CA issued a Resolution denying due course to and dismissing the petition for certiorari on the ground that only one out of the five petitioners therein signed the verification and certificate against forum-shopping attached to the petition without any showing that such petitioner was duly authorized to sign for and in behalf of the other petitioners. On October 3, 2002, herein private respondents filed a Motion for Reconsideration with Motion to Exclude Reynaldo G. Digma, Francisco C. Octavio and 19 Jesus G. Domingo as petitioners on the ground that the above-named seamen were still abroad by reason of their employment. cra 20 In a Resolution dated October 16, 2003, the CA reinstated the petition insofar as herein private respondents were concerned. On June 21, 2004, the CA promulgated the presently assailed Decision in favor of private respondents, the dispositive portion of which reads: WHEREFORE, premises considered, the petition is GRANTED. The resolution and order dated April 9, 2002 and June 16, 2003 of the NLRC are hereby ANNULLED and SET ASIDE. The NLRC decision dated August 30, 2001 is hereby REINSTATED.

SO ORDERED. (Underscoring supplied) 22 Herein petitioners filed a Motion for Reconsideration but the CA denied it in its Resolution of September 14, 2004. Hence, the present petition with the following assignment of errors: I. THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DISREGARDING THE FINDINGS OF THE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS COMMISSION, WHICH FINDINGS ARE SUPPORTED BY SUBSTANTIAL EVIDENCE. II. THE COURT OF APPEALS COMMITTED GRAVE ERROR IN HOLDING THAT PETITIONERS FAILED TO PRESENT SUBSTANTIAL EVIDENCE PROVING THAT RESPONDENTS WERE DISMISSED FOR JUST AND VALID CAUSE. THE EVIDENCE ON RECORD PROVES THAT RESPONDENTS WERE GUILTY OF MUTINY, INSUBORDINATION, DESERTION/ATTEMPTING TO DESERT THE VESSEL AND CONSPIRACY WITH THE OTHER FILIPINO SEAFARERS IN REFUSING AND/OR FAILING TO JOIN M/T LADY HELENE IN ITS NEXT TRIP OR DESTINATION. III. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT [RESPONDENTS'] TERMINATION WAS EFFECTED WITHOUT DUE PROCESS OF LAW. IV. THE HONORABLE COURT COMMITTED GRAVE ERROR IN HOLDING THAT [RESPONDENTS'] TERMINATION WAS ATTENDED BY BAD FAITH OR DONE 23 CONTRARY TO MORALS, GOOD CUSTOMS OR PUBLIC POLICY. The petition has no merit. The basic issue to be resolved in the instant case is whether private respondents' termination from their employment was valid. There are two requisites which must be complied with by an employer for a valid dismissal of employees, to wit: (1) the dismissal must be for a just or 24 authorized cause; and (2) the employee must be afforded due process, i.e., he must be given opportunity to be heard and to defend himself. cra Anent the first requisite, it is a basic principle that in the dismissal of employees, the burden of proof rests upon the employer to show that the dismissal is 25 for a just and valid cause and failure to do so would necessarily mean that the dismissal is not justified. This is in consonance with the guarantee of security of tenure in the Constitution and in the Labor Code. A dismissed employee is not required to prove his innocence of the charges leveled against 26 him by his employer. The determination of the existence and sufficiency of a just cause must be exercised with fairness and in good faith and after 27 observing due process. cra The Court is not persuaded by petitioners' contentions in its first and second assigned errors that the CA should have accorded respect and finality to the findings of fact and conclusions of the LA as these are supported by substantial evidence; that petitioners, in fact, were able to present substantial evidence to prove that private respondents were guilty of mutiny, insubordination, desertion/attempt to desert their vessel and conspiracy with the other Filipino seamen in refusing to join said vessel in its next trip. Factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality. However, the rule is not without exceptions, one of which is when the findings of fact of the labor officials on which the 28 conclusion is based are not supported by substantial evidence. Another exception is when it is perceived that far too much is concluded, inferred or 29 deduced from bare facts adduced in evidence. Moreover, when the findings of the LA and the NLRC are inconsistent with that of the CA, as in the instant 30 case, there is a need to review the records to determine which of them should be preferred as more conformable to evidentiary facts. The Court finds that the present case falls under the above-mentioned exceptions. After a review of the arguments and evidence of the parties, the Court sustains the findings and conclusions of the CA, the same being in accord with the facts and law of the case. The Court agrees with the following findings and conclusion of the CA, to wit: [Herein petitioners] charged [herein private respondents] for mutiny, insubordination, desertion and conspiracy in refusing to join the vessel in its next trip. However, except for the disagreement between Capt. Andersen and Engine Fitter Castillo, when the latter refused to resume his work in the Engine Room wherein the other Filipino crew sided with Castillo, there is no proof showing the alleged mutinous and concerted actions of the [private respondents] against Capt. Andersen. There is also the glaring absence of corroborative statements of other officers or crew on board attesting that [private respondents] participated directly or indirectly to any wrong doing, or even intervened in the quarrel between Andersen and Castillo. The records 31 fail to establish clearly the commission of any threat, or any serious misconduct which would justify [private respondents'] dismissal. which affirmed the earlier finding of the NLRC in its August 30, 2001 Decision, thus: We also noted that [herein petitioners'] various charges against the [private respondents] were bereft of factual details showing the alleged mutinous and concerted actions of herein [private respondents] against the ship captain. The absence of competent evidence or corroborative statements of other officers or crew on board attesting to the fact that complainants have participated directly or indirectly, to any wrongdoing or intervened in the quarrel of 32 33 the Ship Captain with Fitter Bautista deters us in considering the said charges with probity. Moreover, the above-quoted findings of the CA and the NLRC are consistent with the findings of the POEA in its October 12, 1999 Order dismissing the disciplinary complaint filed by NFD against herein private respondents and their companions. Pertinent portions of the POEA Order reads: Aside from telexes and telefax messages exchanged between complainant NFD International Manning Agents, Inc. and its principal AS Vulcanus which are all self-serving in nature, no other proof, such as official logbook extracts, was adduced in support of the complaint. Had respondents committed the offense charged, this should at least deserve attention, entry and/or proper documentation in the vessel's logbook/journal. Inciting mutiny, being a serious offense, and punishable under the "Table of Offense and Corresponding Administrative Penalties of the Standard Employment Contract Governing Employment of All Filipino Seamen on Board Ocean Going Vessels" for two to three year suspension, must be established by clear, strong, and incontrovertible pieces of evidence. In the absence of substantial evidence, such as in the instant case, the charge of inciting 34 mutiny/refusal to sail cannot be given credence. Indeed, there is no record in the logbook or journal of the ship to indicate that the 21 Filipino seamen, including herein private respondents who were terminated from their employment, threatened to cease and desist from working and to abandon their vessel as a result of the misunderstanding that happened between the Ship Master and a Filipino crew member. Petitioners' claim that private respondents and their fellow Filipino seamen were guilty of conspiracy in committing mutiny, insubordination, attempting to desert their vessel and refusing to sail with the vessel is not supported by substantial evidence. Aside from the communications, through telex messages, sent by representatives of petitioner Vulcanus and the President and General Manager of NFD, no competent documentary proof was presented to substantiate the charges against private respondents and the other Filipino seamen. No record of any hearing or investigation was presented. Moreover, petitioners did not present the Ship Master or any member of the ship's crew in order to validate or verify the truth regarding the charge against the 21 Filipino seamen. All that were presented by petitioners were allegations which they claimed to have gathered from information provided by the Ship Master that herein private respondents and their fellow Filipino seamen were guilty of the various acts of which they were accused to have committed.

21

Petitioners insist that the findings and conclusions of the LA should be respected. However, the Court finds that the LA failed to cite substantial evidence to support his conclusions. It is not enough for the LA to declare in his Decision that "the established facts of the case, however, reveal that complainant[s] were lawfully dismissed for just cause"; or that "records show that complainants were discharged from their employment for committing acts of mutiny, insubordination and desertion and/or attempting to desert the vessel as well as conspiracy among themselves in refusing to join M/T Lady Helene in its next trip to Mauritius without just and valid cause x x x" without specifying the evidence upon which he derived his conclusions. It is true that the LA cited documents consisting of the following: (1) telex message, dated February 11, 1997, sent by a certain Marianne D. Hovland whose connection with or position at Vulcanus was not indicated, informing NFD that there had been no solution to their problems; and that a Filipino crewman 35 named Castillo has not left the vessel; and that "some other crew" have communicated their intention to leave if Castillo would leave; (2) telex message, dated February 11, 1997, from the NFD President and General Manager addressed to all NFD officers and crew warning them of the possible consequences, should they decide to leave their vessel to accompany Castillo, and advising them to refrain from refusing to work and to treat their 36 problem intelligently and not to involve others; (3) telex message, dated February 12, 1997, from a Captain Helge Grotle whose position at Vulcanus was also not indicated, informing NFD that the Ship Master of M/T Lady Helene decided to dismiss its crew for refusal to go to sea with the vessel, and that 37 according to Grotle, the act of the crew constituted mutiny; (4) telex message, dated February 12, 1997, from Captain Andersen informing NFD of his decision to give 14 of the Filipino seamen, which included herein petitioners, the option to return to the vessel on the ground that these seamen were not 38 involved in the alleged mutiny; (5) letter from the NFD President and General Manager, dated February 28, 1997, informing the POEA about the dismissal 39 of the 21 Filipino seamen on grounds of mutiny and conspiracy for their concerted refusal to work and join the vessel in going to its next destination. cra However, these documents, standing alone and uncorroborated by any other competent evidence, do not constitute substantial proof that herein private respondents are indeed guilty of mutiny. On the contrary, it proves their innocence. First, the evidence consisting of the telex messages from supposed representatives of Vulcanus and NFD are hearsay because they did not come directly from the Ship Master or officer of M/T Lady Helene. The information contained in these communications were merely based on the alleged report or message which came from the Ship Master. However, petitioners failed to present any telex message, testimony or even an affidavit of the Ship Master or any other crew member or officer of the subject vessel to prove that private respondents and their companions were guilty of the acts with which they were charged. Second, the telex message dated February 12, 1997 which came from the Ship Master himself established that private respondents and 12 of their companions were not guilty of mutiny as, in fact, they were given the option to return to the vessel if they wished to. Third, the letter-complaint filed by NFD with the POEA was later found baseless as the POEA, in its Order dated October 12, 1999, dismissed the complaint of NFD. Even the NLRC, in its subsequent Resolution dated April 9, 2002, subject of herein petition, wherein it set aside its August 30, 2001 Decision and reinstated the LA's Decision, did not cite any specific evidence as basis for adopting the factual findings of the LA. The Court also finds that in their pleadings before the LA, the NLRC, the CA and this Court, petitioners failed to cite any direct and substantial evidence to support their claim that private respondents and their companions were guilty of mutiny and conspiracy. Hence, the CA was correct in reinstating the NLRC August 30, 2001 Decision finding that petitioners failed to discharge their burden of proving that the dismissal of private respondents was for a just and valid cause. The next question is whether there was compliance with the second requisite of a valid dismissal which is due process. The Court does not agree with petitioners' asseverations in their third assigned error that in dismissing respondents from their employment, the Ship Master simply acted within his management rights in order to protect the safety of the vessel and its crew, which act, according to petitioners, is recognized under the provisions of the POEA Standard Employment Contract. The minimum requirement of due process in termination proceedings, which must be complied with even with respect to seamen on board a vessel, consists of notice to the employees intended to be dismissed and the grant to them of an opportunity to present their own side on the alleged offense or 40 misconduct, which led to the management's decision to terminate. To meet the requirements of due process, the employer must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected, i.e., (1) a notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice after due hearing which informs the employee of the 41 employers' decision to dismiss him. cra Petitioner maintains that the Ship Master is allowed to dismiss an erring seafarer without notice under Section 17, paragraph D of the Revised Standard 42 Employment Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels issued by the Philippine Overseas Employment Administration (POEA). Section 17 sets forth the disciplinary procedures against erring seafarers, to wit: Section 17. DISCIPLINARY PROCEDURES The Master shall comply with the following disciplinary procedures against an erring seafarer:cra:nad A. The Master shall furnish the seafarer with a written notice containing the following:cra:nad 1. Grounds for the charges as listed in Section 31 of this Contract. 2. Date, time and place for a formal investigation of the charges against the seafarer concerned. B. The Master or his authorized representative shall conduct the investigation or hearing, giving the seafarer the opportunity to explain or defend himself against the charges. An entry on the investigation shall be entered into the ship's logbook. C. If, after the investigation or hearing, the Master is convinced that imposition of a penalty is justified, the Master shall issue a written notice of penalty and the reasons for it to the seafarer, with copies furnished to the Philippine agent. D. Dismissal for just cause may be effected by the Master without furnishing the seafarer with a notice of dismissal if doing so will prejudice the safety of the crew or the vessel. This information shall be entered in the ship's logbook. The Master shall send a complete report to the manning agency substantiated by witnesses, testimonies and any other documents in support thereof. (Emphasis supplied) Under paragraph D, Section 17 of the Revised Standard Employment Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels, the Ship Master is excused from furnishing a seafarer with the required notice of dismissal if doing so will prejudice the safety of the crew and the vessel, as in cases of mutiny. 43 Explaining the notice requirements under Section 17, this Court held in Skippers Pacific, Inc. v. Mira, that : x x x under Section 17 of what is termed the Standard Format, the "two-notice rule" is indicated. An erring seaman is given a written notice of the charge against him and is afforded an opportunity to explain or defend himself. Should sanctions be imposed, then a written notice of penalty and the reasons for it shall be furnished the erring seafarer. It is only in the exceptional case of clear and existing danger to the safety of the crew or vessel that the required notices are dispensed with; but just the same, a complete report should be sent to the manning agency, supported by substantial evidence of the 44 findings. (Emphasis supplied) However, in the instant case, petitioners failed to establish that private respondents and their companions were guilty of mutiny or that, in any other manner, they posed a clear and present danger to the vessel and its crew which would have justified the Ship Master in dispensing with the required

notices. Even if the Ship Master was justified in dispensing with the notice requirements, still, it was essential that his decision to dismiss the Filipino seamen should have been entered in the ship's logbook; and that a complete report, substantiated by witnesses, testimonies and any other documents in support thereof, duly sent to the manning agency. The record of this case is bereft of any such entry in the ship's logbook or journal and of any report and supporting documents. Instead, respondents and the other Filipino seamen were verbally ordered to disembark from the vessel and were repatriated to the Philippines without being given written notice of the reasons why. There being no mutiny, petitioners should have complied with Section 17A quoted above. The records reveal that Section 17A was not complied with by the Ship Master. Petitioners failed to present evidence to prove that private respondents and their fellow complainants were served written notices stating the particular acts or omissions constituting the grounds for their termination. Neither was there evidence to show that private respondents and their companions were given opportunity to answer the charges against them. Thus, the Court sustains the findings of the CA that private respondents and the other complainants were not given the benefit of procedural due process before they were terminated from their employment. Anent the last assigned error. While the Court agrees with petitioners that there is no evidence to prove that force, violence or intimidation was employed to effect the disembarkation of the Filipino seamen, the Court still sustains the finding of the CA that the dismissal of private respondents and their companions was done in bad faith, contrary to morals, good customs or public policy, arbitrary and oppressive to labor, thus entitling them to the award of moral and exemplary damages. Moral damages are recoverable where the dismissal of the employee was attended by bad faith or fraud or constituted 45 an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. On the other hand, exemplary damages are proper when the dismissal was effected in a wanton, oppressive or malevolent manner, and public policy requires that these acts must be suppressed and 46 discouraged. In the instant case, it is undisputed that respondents and the other Filipino seamen were actually engaged in the performance of their assigned tasks aboard M/T Lady Helene and were even rendering overtime work when they were unceremoniously directed to disembark from their vessel. Moreover, the total absence of any prior written notice of the charges against them, the opportunity to defend themselves against such charges and a written notice of the subsequent decision of the Ship Master to terminate their employment establish the arbitrary and oppressive character of the dismissal from employment of private respondents and their companions. WHEREFORE, the instant Petition is DENIED for lack of merit. The Decision and Resolution of the Court of Appeals dated June 21, 2004 and September 14, 2004 in CA-G.R. SP No. 78870 are AFFIRMED. SO ORDERED. 2. FIRST DIVISION G.R. No. 141371 : March 24, 2006 EDNA ABAD, JOSEPH MARTINEZ and ELISEO ESCANILLAS, JR., Petitioners,v. ROSELLE CINEMA, SILVER SCREEN CORPORATION and VERMY TRINIDAD, Respondents. DECISION AUSTRIA-MARTINEZ, J.: 1 Edna Abad, Joseph Martinez and Eliseo Escanillas, Jr. (petitioners) filed the present petition for review assailing the Decision dated September 30, 1999 and Resolution dated December 10, 1999, issued by the Court of Appeals (CA) in CA-G.R. SP No. 53246. This case originated from individual complaints filed by petitioners against Roselle Cinema, Silver Screen Corporation and Vermy Trinidad (respondents) for illegal dismissal, underpayment, non-payment of overtime pay, premium for holiday, premium pay for rest day, holiday pay, service incentive leave, night shift differentials, separation pay, damages, and attorney's fees. These complaints were later consolidated. In a Decision dated April 17, 1998, the Labor Arbiter (LA) of the National Labor Relations Commission (NLRC) in Iloilo City ruled that petitioners were not illegally dismissed. The LA dismissed petitioners' complaints primarily on the ground that petitioners failed to substantiate their claims, as they have only their bare allegations to support it and no corroborative evidence to refute respondents' substantial evidence showing that they voluntarily terminated their relationship with Respondents. The LA also denied their money claims because their allegations were belied by documentary evidence showing that 2 these claims have been properly paid to petitioners. cra On appeal, the NLRC reversed the LA in its Decision dated December 24, 1998, declaring that petitioners were illegally dismissed and ordering respondents to pay the moneys claimed by petitioners. The dispositive portion of the NLRC Decision reads:cra:nad WHEREFORE, premises considered, the decision appealed from rendered on April 17, 1998, is hereby REVERSED AND SET ASIDE and a new one entered ordering respondents, Roselle Cinema and/or Silver Screen Corporation, to pay complainants the following: a) Edna Abad, the amount of b) Joseph Martinez, the amount of c) Eliseo Escanillas, Jr. the amount of P107,318.00 P97,586.38 P102,074.60 P306,978.98 and 10% attorney's fees GRAND TOTAL 30,697.90 P337,676.88 vvvvvvvvvvvvv

All other claims are hereby dismissed for lack of merit. 3 SO ORDERED. cra The NLRC's main reasons for reversing the LA's Decision were due to the fact that respondents failed to adduce clear and convincing evidence to support 4 their defense, and that petitioners' filing of a case for illegal dismissal negated respondents' defense that petitioners abandoned their work. 5 Consequently, the NLRC ordered the award of separation pay and other monetary claims in favor of petitioners. chanroblesvirtuallawlibary 6 Respondents' motion for reconsideration was denied by the NLRC in its Resolution dated April 16, 1999. chanroblesvirtuallawlibary Thereafter, respondents filed a special civil action for certiorari with the CA which, in its assailed Decision dated September 30, 1999, reversed the NLRC Decision and reinstated the LA Decision, dismissing the complaint of petitioners.

The CA sustained the LA's findings that there was no illegal dismissal, as petitioners voluntarily left their jobs, and that their money claims were not supported by evidence. The CA stated that the NLRC should not have dealt with the issue of abandonment since respondents did not raise this as a 7 defense. cra 8 Petitioners sought reconsideration, but the CA denied the motion in its assailed Resolution dated December 10, 1999. cra Hence, the present petition for review. Petitioners argue that if the issue in this case is the illegality of their dismissal, then why should the CA conclude that "the decision of the NLRC was not supported by evidence adduced and the applicable law and jurisprudence" (page 5), when in such a situation it is the respondents that would adduce 9 evidence. Petitioners further argue that the award of wage differentials were obliterated in the decision of the CA without expressing therein clearly and 10 distinctly the law on which it is based. Lastly, petitioners insist that the CA should have dismissed the petition before it because it was filed late on June 16, 1999, the NLRC decision having been received by respondents on February 10, 1999, and their motion for reconsideration being pro forma, the last day 11 to file the petition was on April 12, 1999. cra On the other hand, respondents contend that petitioners were not dismissed from work; they voluntarily left their jobs without notice. According to respondents, petitioner Escanillas last reported for work on January 5, 1997; petitioner Martinez on January 15, 1997; and petitioner Abad on January 31, 1997. They take exception to the NLRC's finding that they failed to substantiate their allegation that petitioners abandoned their jobs, and insist that they did not raise such ground as a defense. As a rule, the Court refrains from reviewing factual assessments of lower courts and agencies exercising adjudicative functions, as petitions for certiorari 12 under Rule 65 involve only jurisdictional issues, or grave abuse of discretion amounting to lack or excess of jurisdiction. However, when the NLRC and the 13 Labor Arbiter have come up with differing opinions, the Court is constrained to review the evidence on record, as in the present case. The petition raises three issues, as follows: (1) whether petitioners were illegally dismissed; (2) whether they are entitled to their money claims; and (3) 14 whether the NLRC Decision had become final and executory. chanroblesvirtuallawlibary On the third issue, petitioners claim that the motion for reconsideration of the NLRC decision is pro forma and therefore said decision had become final and executory. The same does not merit any serious consideration inasmuch as petitioners failed to show why the motion for reconsideration should be considered pro forma. The Court answers the remaining two issues in the negative because the records are bereft of any evidence which will substantiate petitioners' claims. In their appeal to the NLRC, petitioners stated that they were "summarily dismissed from employment at Roselle Cinema without notice and just 15 cause." Petitioners, however, did not elaborate on how their dismissal was effected by respondents, i.e., whether respondents refused to admit them back to work; whether their wages were withheld from them; or whether respondents elicited any other act that can be virtually construed as termination of their employment. Even in their petition before the Court, and in their Comment before the CA, petitioners merely alleged in general terms that they were "summarily dismissed," without anything more. The Court is well-aware that in labor cases, the employer has the burden of proving that the employee was not dismissed or if dismissed, that the dismissal 16 was not illegal, and failure to discharge the same would mean that the dismissal is not justified and therefore illegal. The Court ruled in Great Southern 17 Maritime Services Corp. v. Acua, to wit:cra:nad Time and again we have ruled that in illegal dismissal cases like the present one, the onus of proving that the employee was not dismissed or if dismissed, that the dismissal was not illegal, rests on the employer and failure to discharge the same would mean that the dismissal is not justified and therefore illegal. Thus, petitioners must not only rely on the weakness of respondents' evidence but must stand on the merits of their own defense. A party alleging a critical fact must support his allegation with substantial evidence for any decision based on unsubstantiated allegation cannot stand as it 18 will offend due process. x x x (Emphasis supplied) Respondents maintain that petitioners were not dismissed from work, but voluntarily left their jobs. In their Position Paper, respondents alleged that 19 petitioners were their employees "until they voluntarily left their respective jobs without formally serving notice to their employers." There was no dismissal to speak of in the first place in this case. It was petitioners who, by their acts, terminated the employer-employee relationship with Respondents. As found by the LA, petitioner Escanillas last reported for work on January 5, 1997 after he was chastised by respondent Trinidad for cleaning the semidark theater without a flashlight. When he did not report for work the next day, Trinidad sent an employee to check on him, and the employee reported that Escanillas was not sick, but was driving his tricycle. The next day, an employee was again sent to Escanillas to tell the latter that he should report for work. On January 16, 1997, Escanillas, who was then under the influence of alcohol, went to see Trinidad and confronted him. He was told to return only when he is sober. Escanillas left, and was heard muttering that he was better off driving his tricycle. Escanillas was also seen milling around the theater premises with other men, in what Trinidad perceived to be an attempt on Escanillas's part to make good his previous threat that he would pounce on 20 Trinidad should Escanillas see him outside. He never reported for work again. The company's security guard, Dominador Malocon, executed an affidavit 21 on February 18, 1998, in support of these claims. cra With regard to petitioner Martinez, he last reported for work on January 15, 1997. In the evening of that day, Trinidad called him to replace a light bulb. Instead of complying, he told Trinidad that it was not his job to do it. Despite this, Trinidad asked him to report for work early the next day because he has to assist the repairman that would be coming to fix the electric fan; but Martinez did not report for work the next day. It was discovered on January 16, 1997 that a part of the company vehicle that Martinez drove was missing, and the suspect for the loss was Martinez. Two days after he last reported for 22 23 work, Martinez assumed his new job as driver with the Israel Pork and Beef Dealer, as evidenced by a notarized certification issued by its proprietor. The LA also found that petitioner Abad was not dismissed. On January 31, 1997, Abad was asked to explain regarding the missing shortages and "overages" on the canteen stocks and remittances. She was also reminded to observe decorum in the workplace, as there were several instances when her suitors had been rude to Trinidad. Abad, however, stated that she would rather resign than her personal life be interfered with. Abad then verbally offered to resign 24 and left her station without getting her wages. cra Petitioners failed to refute respondents' evidence. Unfortunately, petitioners have only the following lame statements to say:cra:nad x x x The flashlight story involving Escanillas does not jibe with facts of life because one cannot clean the semi-dark corner of the theater holding flashlight, broom and dustpan, all three at the same time. Besides, you clean the semi-dark corner of the theater before or after the showing when the light is on and during the showing you clean the lighted corridors, alleys and comfort rooms. While the story about bulb, electric fan and missing califer involving Martinez as told by Trinidad only shows his inadequacy as manager of the theater. As regards Edna Abad, love happens anywhere even in oval office, or perhaps, in some chambers, the news sometimes revealed, it could happen in theater canteen or in the seats. These circumstances as told by Trinidad are 25 not enough to show that the private respondents voluntarily leave [sic] their works [sic]. x x x cra The Court agrees with the CA when it reinstated the LA decision. The Court upholds the LA when he declared that "x x x [r]espondents have submitted substantial evidence in support of their claim that complainants were not dismissed. Complainants [have] only their bare allegations in their position paper 26 that they were dismissed. They have not presented any corroborative evidence to refute the allegations of Respondents."

The Court finds that the antecedent circumstances and petitioners' contemporaneous acts amply provide substantial proof of their voluntary termination of employment. On the part of petitioner Escanillas, he was not deprived of his chance to return to work despite his disagreement with Trinidad, and in fact, he was reminded several times by Trinidad, through his employee, to report for work, but he did not do so; he was seen driving his tricycle on a certain day when Trinidad sent his employee to ask him to report for work; and he was heard muttering that he was better off driving his tricycle. The same goes with petitioner Martinez. Inspite of his earlier insubordination, when he refused to change the light bulb as ordered by Trinidad, he was asked to report early the next day, but, like Escanillas, he did not return to work. Instead, two days after he last reported for work with respondents, he took on another job as a driver with the Israel Pork and Beef Dealer. With regard to petitioner Abad, apparently, she resented it when Trinidad asked her to explain the shortages on her charge, and when she was reminded to observe proper ethics in the workplace. Consequently, Abad was heard saying that she'd rather resign, after which she manifested her intention to terminate her employment by leaving her station without getting her pay check. These notwithstanding, however, the NLRC relied heavily on the fact that petitioners filed a complaint for illegal dismissal, ruling that it negates respondents' theory of abandonment. In the first place, this case does not involve abandonment as ground for termination. Abandonment, involves termination of an employee by the 27 employer. The truth of the matter is that before respondent could dismiss petitioners on ground of abandonment, petitioners filed with the LA their complaint for illegal dismissal. In the present case, it must be stressed that there is no evidence showing that respondents were actually dismissed by petitioners, let alone, on ground of abandonment. Neither is there a showing that petitioners formally resigned from work. What is actually involved herein is the informal voluntary termination of employment by the petitioners employees. Thus, petitioners' filing of the complaint for illegal dismissal should not have been the NLRC's sole consideration in determining whether, indeed, they have been illegally dismissed. The filing of a complaint for illegal dismissal should be taken into account together with the surrounding circumstances of a 28 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 29 the employee." Given that petitioners were not illegally dismissed, but voluntarily terminated their work, therefore, they are not entitled to an award of separation pay 30 and backwages. Also, petitioners Escanillas and Martinez are not entitled to any salary from January 16-31, 1997 since they have already left respondents' employ by then. With regard to petitioner Abad, the Court sustains the NLRC's award of her salary for said period in the amount of P1,710.19, as it was shown that she resigned only on January 31, 1997. As to the award of service incentive leave pay (SILP), 13th month pay, overtime pay, rest day and holiday pay premium, the NLRC granted the award of these money claims as there is no proof that these labor standard benefits were paid to petitioners for the year 1996. As noted by the NLRC, the 31 Department of Labor and Employment (DOLE) Regional Offices conduct their inspections yearly, and the restitution payroll covered only the years 199432 33 1995, which was admitted by respondents in their Position Paper. Regional Director Carlos L. Boteros, in its Order dated February 16, 1998, stated that 34 respondents have already restituted to petitioners their respective labor standards benefits as of February 13, 1996, as signed and acknowledged by 35 respondents' employees, which include petitioners, in the restitution payroll dated March 31, 1996. chanroblesvirtuallawlibary However, records show that respondents failed to prove that petitioners were actually paid these entitlements for the year 1996. The statement in the inspection report dated July 9, 1997, by DOLE Inspector Joselito dela Banda that "there were no labor standards violation" by respondents will not suffice to prove that these benefits, in fact, have been paid. Thus, the Court sustains the NLRC's award to petitioners of the following labor standard benefits for the year 1996, viz.: (1) EDNA ABAD SILP 13th month pay Overtime pay Rest day premium Holiday pay premium P 437.50 2,850.31 10,694.37 1,338.75 1,365.00 P 16,685.93 (2) JOSEPH MARTINEZ SILP 13th month pay Night Shift differential Overtime pay NONE Rest day premium Holiday pay premium 1,313.25 1,339.00 P 10,490.87 P 429.17 2,796.02 4,613.43

(3) ELISEO ESCANILLAS, JR. SILP 13th month pay Night Shift differential Overtime pay Rest day premium Holiday pay premium P 429.17 2,796.02 4,613.43 NONE 1,313.25 1,339.00 P 10,490.87 WHEREFORE, the petition is PARTIALLY GRANTED. The Court of Appeals Decision dated September 30, 1999 is AFFIRMED insofar only as it reinstated the Labor Arbiter's finding that there was no illegal dismissal. However, the NLRC's Decision dated December 24, 1998 granting monetary awards to petitioners Edna Abad, Joseph Martinez, and Eliseo Escanillas, Jr., is AFFIRMED but MODIFIED. Respondents Roselle Cinema and/or Silver Screen Corporation are ORDERED to pay petitioners the following: (1) Edna Abad including salary for Jan. 16-31, 1997 Total (2) Joseph Martinez (3) Eliseo Escanillas, Jr. No pronouncement as to costs 3. FIRST DIVISION P16,685.93 1,710.19 P18,396.12 P10,490.87 P10,490.87

DR. DANILO T. TING and MRS. ELENA TING, doing business under the name and style of GST FISHING ENTERPRISES, Petitioners,

G.R. No. 146174 Present: PANGANIBAN, C.J. Chairperson, YNARES-SANTIAGO, AUSTRIA-MARTINEZ, CALLEJO, SR., and CHICO-NAZARIO, JJ.

- versus -

HON. COURT OF APPEALS and PILARDO ISMAEL, Respondents.

Promulgated: July 12, 2006 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION CHICO-NAZARIO, J.:


1[1] 2[2]

This is a Petition for Review on Certiorari of the Decision of the Court of Appeals dated 5 June 2000 and Resolution dated 17 November 3[3] 2000 in CA-G.R. SP No. 56062, which reversed and set aside the Decision of the National Labor Relations Commission (NLRC) dated 20 May 1999, and

affirmed in toto the Decision of the Executive Labor Arbiter dated 15 February 1999. The Executive Labor Arbiter declared illegal the dismissal of private respondent Pilardo Ismael, and ordered petitioner GST Fishing Enterprises and/or Spouses Dr. Danilo Ting and Elena Ting, as owners thereof, to pay private respondent, inter alia, separation pay, backwages, unpaid wages and commissions. As culled from the evidence on record, petitioner-spouses Danilo and Elena Ting are engaged in the operation of fishing boats plying the 5[5] Zamboanga, Jolo, and Basilan seas under the business name and style of GST Fishing Enterprises. In March 1974, private respondent Pilardo Ismael was employed by petitioner-spouses as laborer. As such, private respondent was initially assigned to work in fishing boat, F/B Liza I, one of the five fishing 6[6] boats owned and operated by petitioner-spouses. In May 1989, private respondent was transferred to F/B Queen Elena, and designated as the maestro thereof. Finally, in January 1992, private respondent was appointed Chiefmate of F/B Liza III. On 24 June 1998, private respondent filed a Complaint with the Regional Arbitration Branch No. IX of the NLRC, Zamboanga City, for illegal dismissal against petitioner-spouses and/or GST Fishing Enterprises, docketed as NLRC Case No. RAB-09-06-00214-98. Private respondent prayed for th separation pay and backwages, unpaid wages covering the period of June 1 to 13, 1998, unpaid commission for May 1998, and 13 month differential pay. In his Position Paper, dated 5 August 1998, private respondent alleged that at the time of his termination, he had worked for more than 24 years as a regular employee of petitioner-spouses; and that on 13 June 1998, he was verbally dismissed by petitioner-spouses from his employment, in disregard of 9[9] the security of tenure accorded by law to regular employees. In a subsequent Manifestation, dated 9 August 1998, and consequently noted by the Labor 10[10] Arbiter in the Order of 18 August 1998, private respondent manifested that the dates, June 1 to 13, 1998 as specified in his Complaint was th erroneously included therein, and the same should read, 13 month pay differentials for 1997, 1996, and 1995. Refuting the charge of illegal dismissal, petitioner-spouses, in their Position Paper contended that on 3 September 1993, private respondent was reprimanded for having sold, while on stream, an undetermined number of tubs of fish to two or more pump boats tailing behind the fishing vessel, F/B Liza III. Petitioner-spouses further averred that on 6 July 1995, private respondent was rehired following his promise to reform, and eventually worked as patron/pilot on special license. Moreover, according to petitioner-spouses, private respondent, on several occasions, abandoned his post as patron of F/B Liza II, while at sea, and boarded another carrier to take him to land, designating his responsibilities to a person not qualified nor authorized to perform
11[11] 8[8] 7[7]

4[4]

the tasks of a patron. On 13 May 1997, private respondent disembarked from F/B Liza III despite instructions to the contrary, for which reason he 13[13] was placed on preventive suspension for a period of 15 days. He was similarly warned that another offense will cause his termination. On 30 March 1998, private respondent, was again placed on preventive suspension for a period of ten days, for disembarking from F/B Liza-II/35 while the same was operating at the fishing grounds, notwithstanding instruction to the contrary. On 11 June 1998, private respondent abandoned his post as patron of F/B 14[14] Liza-V while on a fishing expedition at sea, and thereafter, boarded a carrier to take him to land. Due to the foregoing incident, on 16 June 1998, 15[15] petitioner Elena Ting, as Operations Manager of GST Fishing Enterprises, issued a Memorandum to private respondent directing him to explain in writing within 48 hours why he should not be meted out the penalty of termination for gross and serious negligence of duty, prejudicing the interest of the 16[16] company and placing the lives of the crew at the hands of an unqualified and unauthorized person at the high seas. Petitioner-spouses posited that 17[17] the Memorandum of 16 June 1998 was served on private respondent, but he refused to sign the same; and failing to file his explanation in writing, private respondent ceased to report to work, and instead, filed a Complaint for illegal dismissal with the Regional Arbitration Branch No. IX of the 18[18] NLRC.

12[12]

The Ruling of the Labor Arbiter Following an exchange of pleadings between the parties, the Executive Labor Arbiter rendered a Decision, dated 15 February 1999, finding for private respondent, and holding his dismissal illegal, thus: WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered in the above-entitled case: Declaring the dismissal of Pilardo Ismael to be illegal, and ordering GST Fishing Enterprises and/or spouses Dr. Danilo Ting and Elena Ting, as owners thereof, to pay said Pilardo Ismael separation and backwages, as well as unpaid wages and commissions, as follows[:] Separation Pay --------------------------------P 88,800.00 Backwages --------------------------------32,066.66 Unpaid Wages --------------------------------1,480.00 Unpaid Commissions ----------------------------751.50 TOTAL ----------------------------- P123,098.16 th 19[19] Dismissing complainants claims for 13 month pay, and wage differentials, for lack of merit.

The Executive Labor Arbiter held that the Memorandum of 16 June 1998 was issued belatedly as private respondent was dismissed on 13 June 1998. Ruling on the substantive aspect of the dismissal, the Executive Labor Arbiter held that there was no just cause for the dismissal on the basis of private 21[21] respondents act of leaving work by disembarking from F/B Liza II on 11 June 1998 to go to Zamboanga City for medical attention. The Executive Labor Arbiter ratiocinated in this wise:

20[20]

Obviously, the complainant was dismissed because he left his lightboad (sic) (F/B Liza II) and endorsed it to somebody whom the respondents allege was not qualified and authorized to act as patron thereof, and went to Zamboanga City, during an ongoing fishing expedition. There is no question about this. But the evidence on records (sic) shows that there was justification for what the complainant did; as already mentioned, he was then suffering from intensifying back and chest pains caused by an upper respiratory infection (Affidavit of Pilardo Ismael, Annex B). Surely, sickness justified an employees being absent, or leaving his work. Consequently, there was not (sic) cause for complainants dismissal on the basis of his leaving work on 11 June 1998 to go to Zamboanga City for medical attention. This, needless to say, renders illegal his dismissal. Anent [the] two (2) other previous incidents on 13 May 1997 and 30 May 1998 when the complainant also left the fishing boats to which he was assigned, despite instructions of the respondents to the contrary, the complainant had already been punished for these by suspensions. Apparently, his being suspended was proper because there was no explanation for what he did. But with respect to the latest incident of 11 June 1998, there was reason for him to leave his lightboat. This[,] thus[,] differentiates this incident from the 22[22] two other previous incidents. 23[23] Consequently, the Executive Labor Arbiter awarded to private respondent separation pay in lieu of reinstatement. Moreover, petitioner-spouses were 24[24] th directed to pay private respondent unpaid commissions. However, private respondents claims for 13 month pay and wage differentials were not 25[25] granted for lack of basis therefore. The Ruling of the NLRC Upon appeal, the NLRC rendered a Decision promulgated on 20 May 1999, declaring that private respondent is not entitled to separation pay and/or backwages, but only to an indemnity of P1,000.00, to be imposed upon petitioner-spouses and/or GST Fishing Enterprises for violating due process of law. The decretal portion thereof reads: WHEREFORE, subject to the foregoing discussions, the assailed decision is Modified. Respondents are ordered to pay complainant the sums of P1,000.00, 26[26] as indemnity and P2,231.50 for the unpaid wages and commissions.

In stark contrast to the conclusion of the Executive Labor Arbiter, the NLRC upheld petitioner-spouses exercise of management prerogative. It held private respondents repeated infractions as just cause for his termination from employment, but ordered petitioner-spouses to pay indemnity on account of lack of observance of due process. The NLRC rationalized, thus: It is an undisputed fact that on June 11, 1998, complainant, a patron of lightboat Liza II, left the fishing ground known as Duhay Bulod and proceeded to Zamboanga City to seek medical help. While in doing so, complainant likewise designated a person, who was not qualified nor authorized to perform the job of a patron, to assume complainants duties and responsibilities. Although complainants acts (sic) of going back to Zamboanga City due to upper respiratory infections (sic) do not warrant the assailed termination of employment, We cannot however go against the principle of management prerogative after taking into account the attendant facts and circumstances. Complainant has a history of infractions for which corresponding penalties were meted out. Thus on account of the reported habit of complainant in leaving the workplace without the consent, knowledge and authority of respondents, the line was drawn. On June 11, 1998, complainant left the boat he was assigned to, without informing respondents. Worse, the lives of the crew members were left to an unqualified person designated by complainant. And while at Zamboanga City, complainant did not even inform respondents that the lightboat was manned by another person. Thus, complainants lack of diligence and care for the lives of the crew left at sea does not deserve commendation. As clearly pointed out in evidence, complainant was verbally terminated from employment on June 13, 1998, while the memorandum requiring an explanation was made on June 16, 1998. This memorandum however did not cure the defect of lack of due process, but, considering the circumstances which led to the termination of employer-employee relationship, which causes are attributed to complainant, We cannot, under the principle of management prerogative, substitute respondents freedom to administer the affairs of their business enterprise (Chu vs. NLRC, 232 SCRA 764), under the guise of protection of labor, which at the very instance violated the law on life and limb. All said, complainant is not therefore entitled to separation pay and/or backwages, but only to an indemnity of P1,000.00 to be imposed upon the respondents for violating the (sic) due process of law in accordance with 27[27] the Wenphil ruling of the Supreme Court.
28[28] 29[29]

Private respondents Motion for Reconsideration thereon was denied by the NLRC in the Resolution dated 31 August 1999, for lack of merit. 30[30] Hence, private respondent filed a Petition for Certiorari with the Court of Appeals, imputing grave abuse of discretion amounting to lack or excess of jurisdiction to the NLRC, when it modified the decision of the Executive Labor Arbiter, and declared private respondent validly terminated from employment. The Ruling of the Court of Appeals The Court of Appeals found that private respondents dismissal on 13 June 1998 was caused verbally and immediately, without observance of due process 31[31] of law. The appellate court opined that the Memorandum of 16 June 1998, directing private respondent to explain in writing within 48 hours why he should not be terminated, was an afterthought to justify the illegal dismissal. Moreover, the Court of Appeals was not persuaded by petitioner-spouses reliance on management prerogative in the dismissal of private respondent, ratiocinating that the latter had been duly sanctioned for his past offenses. According to the appellate court, when private respondent left F/B Liza V to seek emergency medical help, he cannot be punished for considering his life 32[32] as primordial over all others. The fallo of the assailed Decision states, thus:

WHEREFORE, foregoing premises considered, the Petition is herby GIVEN DUE COURSE, and the assailed judgment of the Public Respondent National Labor Relations Commission (Fifth Division, Cagayan de Oro City) REVERSED and SET ASIDE, and the decision of the Executive Labor Arbiter hereby 33[33] AFFIRMED IN TOTO.

The Court of Appeals rendered a Resolution dated 17 November 2000, denying petitioner-spouses Motion for Reconsideration of the 5 June 2000 Decision. Undaunted, petitioner-spouses come to us through the instant Petition for Certiorari, relying on management prerogative as a justification for private respondents dismissal. The Issue The instant case brings to the fore the question of the legitimacy of an employees dismissal. We are, thus, tasked to settle the sole issue of whether private respondent was illegally dismissed. The Courts Ruling 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 34[34] 35[35] 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. The first requisite is referred to as the substantive aspect, while the second is deemed as the procedural aspect. Deeply entrenched in our jurisprudence is the doctrine that an employer can terminate the services of an employee only for valid and just causes which 36[36] 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 37[37] cause. Further, the termination must be effected in compliance with due process of law. The procedural aspect requires that the employee be given two written notices before he is terminated consisting of a notice which apprises the employee of the particular acts/omissions for which the dismissal is 38[38] sought, and the subsequent notice which informs the employee of the employers decision to dismiss him. We shall now come to a determination of whether the requisites of the law were validly met. On one hand, we have before us petitioner-spouses as employers who anchor their position on management prerogative; and on the other, private respondent, who rely on the security of tenure afforded by the law to the working man. A. On the Legality of the Act of Dismissal Petitioner-spouses maintain that the existence of a just cause justified their act of terminating private respondent. It is their contention that private respondent committed a serious offense by leaving the fishing boat in the open sea in the hands of an individual, Francisco Dorens, who was

without a license, and therefore not qualified. Petitioner-spouses raise the argument that private respondents act was fraught with dire consequences, i.e., that the lives of the crew and the safety of the fishing boat were put at great risk and peril; that in the event of a storm or collision, the substitute cannot be expected to steer the fishing boat to safety; and that had the boat capsized, causing oil and gasoline to spill into the ocean, 40[40] petitioner-spouses will be penalized for the resultant pollution, and will undertake great expense for its clean-up. At the outset, it must be stated that this Court is not a trier of facts, and this applies with greater force in labor cases. Thus, we do not, in this instant concern ourselves with the question of whether private respondent is a regular employee, the same having been unanimously settled in the proceedings a quo. It is beyond question that private respondent as a regular employee enjoys the protection of the Labor Code on security of tenure. As 42[42] earlier stated, his termination must comply foremost with the substantive aspect prescribed by the law. Article 279 of the Labor Code makes it clear that, in cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by law. Hence, private respondents dismissal must be based on just or authorized cause enumerated in the Labor Code. We have said that, in an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal of an employee is for a valid cause. As noted earlier, petitioner-spouses issued Memorandum dated 16 June 1998 to private respondent, apprising him of the cause of his dismissal. The pertinent portions thereof are reproduced hereunder:
43[43] 41[41]

39[39]

We have received reports from a very reliable person that you have been abandoning your post on several occasions as patron of Lightboat Liza-II on fishing expeditions on high seas and boarding a Carrier to go on land. Moreover, you have designated your responsibilities to a person not qualified nor authorized to perform such tasks as patron and have not informed this office of your numerous unauthorized leaves, to the detriment of the company and endangering the lives of your fellow crew members. In this connection, you are hereby directed to explain in writing within 48 hours why you should not be meted out the penalty of termination from work for gross and serious negligence of duty, prejudicing the interest of the company and placing the lives of your fellow crew members at the hand of an 44[44] unqualified and unauthorized person in the high seas.

In the case at bar, petitioner-spouses failed to discharge the burden of proving that the private respondent was dismissed for a just cause as mandated by law. We do not find herein a case of such gross and serious negligence of duty that merits the supreme penalty of termination from employment. First. Article 282 of the Labor Code requires that to constitute neglect of duties as a ground for the termination of an employee, the same must not only be gross but also habitual. Department of Labor Manual, Sec. 4343.01(2) provides: To constitute a just cause for the employees dismissal, the neglect of duties must not only be gross but also habitual. Thus, the single or isolated acts of negligence do not constitute a just cause for the dismissal of the employee. Gross negligence means an absence of that diligence that an ordinarily prudent man would use in his own affairs.

To justify the dismissal of an employee for neglect of duties, however, it does not seem necessary that the employer show that he has incurred actual loss, damage, or prejudice by reason of the employees conduct. It is sufficient that the gross and habitual neglect by the employee of his duties tends to prejudice the employers interest since it would be unreasonable to require the employer to wait until he is materially injured before removing the cause of the impending evil.

As borne by the records, while F/B Liza V was on a fishing expedition in the open seas, off a site called Duhay Bulod, private respondent boarded a fish carrier to take him to Zamboanga City. He entrusted his responsibility as patron thereof to Francisco Dorens, an individual alleged to be unqualified and unlicensed by petitioner-spouses. Private respondent, for his part, alleged that he delegated his duty to Francisco Dorens for the reasons that: (1) the latter had the responsibility of taking over the duties of the Chiefmate/captain in cases of emergency and unavailability of the captain; and (2) after Francisco Dorens was advised by private respondent of his need to seek medical attention, the former accepted the delegation and agreed to fulfill his duty as substitute. To our mind, private respondents act of delegating to Francisco Dorens his duty as patron, and then boarding a carrier to proceed to Zamboanga City for medical emergency cannot be referred to as the gross neglect of duty contemplated by the law to warrant termination. Of pivotal consideration is the unmistakable fact that private respondent was justified in leaving the fishing boat. At dawn of 11 June 1998, he was already experiencing back and chest pains. At six a.m. of the same day, the pains intensified to such a degree that constrained him to seek medical attention. His medical records reveal that on 45[45] the date of the incident complained of, private respondent was suffering from upper respiratory infection. Private respondent suffered from a physical condition that necessitated his action. The same was done so in earnest. Private respondent cannot, thus, be faulted for attending to his medical concerns. Under the circumstances, he was justified to leave his current duty, and absent himself from work. Indeed, as keenly pointed out by the Executive Labor Arbiter, and seconded by the appellate court, sickness justifies an employee from being absent or leaving his work. To demand from private respondent to remain in F/B Liza V despite the excruciating physical pain that he was suffering on the day of 11 June 1998, would be to ignore that labor is a human capital subject to the frailties of the physical body. Private respondents act is similarly mitigated by the fact that there was no material prejudice shown as a result of the act of designating F/B Liza V to an unlicensed individual. While we are not unmindful that no material injury need be shown to sustain a finding of gross negligence, private respondent was without bad faith and had reasonable basis for designating the fishing boat to Francisco Dorens. Private respondent had believed the latter to be the 46[46] responsible substitute in cases of emergency due to the unavailability of the captain. Harboring from an intense physical condition that demanded medical attention, it can be said that on 11 June 1998, private respondent merely committed an error in judgment, but not an act so gross as to constitute just cause for his separation. Evidence is wanting as to prove depravity of the act. We find it equally significant that the Executive Labor Arbiter, the NLRC, and the appellate court unanimously found private respondents act of disembarking from F/B Liza V in order to attend to an emergency medical matter to be a valid justification therefor. Even the NLRC, which reversed the Executive Labor Arbiters finding of illegal dismissal, was unequivocal in declaring that private respondents act, by itself, of going to Zamboanga City due to upper respiratory infection does not warrant termination. The reversal by the NLRC was on the ground of private respondents past infractions. Second. Petitioner-spouses was unable to show that the incident of 11 June 1998 was not only gross but habitual. To prove that private respondents neglect of duty was habitual, petitioner-spouses cite two prior incidents. According to petitioner-spouses, on 13 May 1997, private respondent, who was then assigned to unload fresh fish from F/B Liza III, disembarked therefrom, notwithstanding instructions that he was to do so only after the unloading of ice and other supplies had been completed. On 30 March 1998, private respondent disembarked from F/B Liza II, while the same was operating on fishing grounds, and contrary to instructions to wait after the catch was duly loaded and the fishing boat ready to depart for the port. We are not persuaded. Private respondent had already been adequately penalized for his two prior acts of disembarkation. He was meted out appropriate punishments for the commission of the unwarranted disembarkations of 13 May 1997 and 30 March 1998. As can be gleaned from the records, on 15 to 30 May 1997, private respondent was meted out the penalty of suspension from employment. Likewise, as punishment for the 30 March 1998 incident, he was penalized with suspension for ten days from 30 March to 9 April 1998. The fact that private respondent had been penalized for his two prior infractions cannot be considered in the determination of the habitual nature of neglect of duty under Article 282 of the Labor Code because to do so would be to unduly penalize private respondent twice for his infraction. Third. We take occasion to stress that there must be a reasonable proportionality between the offense and the gravity of the penalty. At the time of the dismissal, private respondent had worked for the petitioner-spouses and/or GST Fishing Enterprises for 24 years, beginning on March 1974 as laborer, and rising from the ranks to become patron. Verily, not every case of insubordination or willful disobedience by an employee of a lawful work-connected
47[47]

order of the employer is reasonably penalized with dismissal. Dismissal has always been regarded as the ultimate penalty. Security of tenure is 50[50] one of the highest rights of workers aptly protected and guaranteed by the Constitution, specifically embodied in Section 3, Article XIII thereof. B. On the Legality in the Manner of Dismissal The second facet in the case of valid termination from employment is due process. The cardinal rule is that an employee sought to be dismissed must be served two written notices before termination of his employment. The first notice is to apprise the employee of the particular acts or omissions 51[51] by reason of which his dismissal has been decided upon; and the second notice is to inform the employee of the employers decision to dismiss him. Juxtaposing these legal standards against the factual backdrop of the case at bar, we do not find that the procedural rudiments of the law have been complied with. First. Petitioner-spouses admit the act of verbal termination of private respondent by petitioner Elena Ting on 13 June 1998, following their 52[52] knowledge of private respondents disembarkation. Noteworthy is the fact that petitioner-spouses similarly admitted sending to private respondent, a 53[53] Memorandum dated 16 June 1998, or three days after his verbal termination, requiring the latter to explain within 48 hours his actuation. Hence, there is no gainsaying that the Memorandum of 16 June 1998 was a vain attempt to correct a procedural infirmity earlier committed by petitionerspouses. Evidently, the notice sent to private respondent apprising him of the cause of his dismissal and requiring his explanation for the alleged misdeed was a mere afterthought. The Memorandum of 16 June 1998 cannot be said to be in compliance of the procedural requirements of the law. In illegal termination cases, the procedural requisites must be complied with prior to the dismissal. Second. We do not think that management prerogative can ever be used as a cloak to render nugatory the constitutional mandate of security of tenure. Management prerogative cannot be so exercised with arbitrariness and in defiance of the due process of the law. WHEREFORE, the Petition is DENIED. The assailed Decision dated 5 June 2000 of the Court of Appeals, and Resolution dated 17 November 2000 in CA-G.R. SP No. 56062 are AFFIRMED IN TOTO. Costs against petitioners. SO ORDERED 4. Republic of the Philippines Supreme Court Manila

48[48]

49[49]

FIRST DIVISION

FELIX M. CRUZ, JR., Petitioner,

G.R. NO. 148544 Present: PANGANIBAN, C.J. (Chairperson) YNARES-SANTIAGO, AUSTRIA-MARTINEZ, CALLEJO, SR., and CHICO-NAZARIO, JJ.

- versus -

COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION AND CITYTRUST BANKING CORPORATION, Promulgated: Respondents. July 12, 2006 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x DECISION AUSTRIA-MARTINEZ, J.: 54[1] Before the Court is a special civil action for certiorari under Rule 65 of the Rules of Court seeking to annul the April 27, 2001 Decision of the Court of Appeals (CA) in CA-G.R. SP No. 52373 which affirmed the January 27, 1998 Decision of the National Labor Relations Commission (NLRC) and its Resolution, dated May 14, 1998 in NLRC NCR CA 011087-96 (NLRC NCR 00-10-06448-93-A). The factual and procedural antecedents of the case, as summarized by the CA, are as follows: Cruz [herein petitioner Felix M. Cruz, Jr.] was an employee of private respondent Citytrust Banking Corporation (or Citytrust) from October 8, 1979. He held the confidential position of Micro Technical Support Officer, with the following duties and responsibilities: (a) Evaluate and recommend from various departments/units request for Micro Computers received by the Bidding Committee. (b) Further evaluate and accept the bids submitted including recommendation therof, which were done by the Technical Committee of the Bank (Petitioners Affidavit, p. 102, rollo). The good performance of Cruz did not remain unnoticed for on several occasions he was recognized with awards and citations, given salary increases (Exhs, A to H, J-K, pp. 45-50, 52-53, rollo) and promoted to Authorized Signer on May 1, 1991. (Exh. I, p. 51, rollo). But after all his years of reputed fealty and good service with the company, something unexpected and besmirching was uncovered. There were feedbacks and informations that certain irregularities were being committed in the bidding process and purchase of computers, an area within the powers and responsibilities of Cruz. To clarify matters, a special investigation was conducted by the Citytrust Internal Audit Group and it was found out that indeed there were unauthorized and unreported commissions and rebates given out by one of its computer suppliers, MECO Enterprises, Inc. (MECO), for purchases made by Citytrust. This was corroborated by the letter dated August 5, 1992 (Exh. 1, p. 148, rollo) of the President and Controller [sic] of MECO certifying that Cruz has received commissions and rebates amounting to P105,192.00 just for the period of September 1992 to March 1993. With this damaging result of the investigation, Citytrust sent a show-cause memorandum (Exh. 13, p. 161, rollo) to Cruz on August 6, 1993 placing him under a 30-day preventive suspension and directing him to appear in an administrative hearing by the Ad Hoc Committee. Cruz submitted the said memorandum, the Ad Hoc Committee heard the matter, and found Cruz guilty of fraud, serious misconduct, gross dishonesty and serious violation of Bank policies, regulations and procedure. For the resultant loss of confidence, Citytrust terminated Cruz from employment effective October 6, 1993 (Exh 15, pp. 164-165, rollo). Aggrieved by this, Cruz filed before the Labor Arbiter an action for Illegal Dismissal and Damages claiming that Citytrust denied him due process and hastily dismissed him from service. After the submission of position papers and presentation of witnesses, the Labor Arbiter rendered decision in favor of Cruz disposing that: WHEREFORE, premises considered, judgment is hereby rendered, ordering respondent to reinstate complainant to his former position without loss of seniority rights with full backwages which up to the promulgation of this Decision amounted to THREE HUNDRED EIGHTY SEVEN THOUSAND SEVEN th HUNDRED NINETY (P387,790.00) Pesos, subject to adjustment upon actual reinstatement; to pay complainant his 13 month pay in the sum of THIRTY TWO THOUSAND THREE HUNDRED FIFTEEN & 83/100 (P32,315.83) Pesos; and to pay the sum of FIFTY THOUSAND (P50,000.00) Pesos as and for damages, plus attorneys fees in the sum of FORTY SEVEN THOUSAND TEN & 58/100 (P47,010.58) Pesos representing ten percent (10%) of the monetary award due complainant, subject also to adjustment. SO ORDERED. (p. 26, rollo) From this decision Citytrust appealed to the NLRC, which through its Second Division rendered the Decision dated January 27, 1998 wherein the ruling of the Labor Arbiter was set aside and went on dismissing the case for lack of merit. (p. 37, rollo). 55[2] Cruz filed a motion for its reconsideration but this was denied for lack of merit.

Cruz then filed a petition for certiorari with this Court. In a Resolution dated February 15, 1999, the Court referred the petition to the CA for 57[4] appropriate action and disposition, pursuant to the ruling in the case of St. Martin Funeral Homes v. National Labor Relations Commission. On April 27, 2001, the CA rendered the presently assailed Decision denying due course to and dismissing the petition. Sustaining the NLRC, the CA held that while it is true that the signature of petitioner does not appear in the check vouchers, other pieces of evidence prove that he benefited from the proceeds of the checks issued; that there is substantial evidence to hold petitioner liable for soliciting and receiving monetary considerations from a supplier; that his act constituted a willful breach of his employers trust and confidence which justifies his termination from employment; that petitioners dismissal from employment was the result of a thorough investigation and hearing where he was given the opportunity to explain his side. Instead of a motion for reconsideration, petitioner filed the present petition for certiorari predicated on the following grounds: THAT PUBLIC RESPONDENT COURT OF APPEALS GRAVELY ABUSE(D) ITS DISCRETION AMOUNTING TO LACK OF JURISDICTION OR IN EXCESS OF JURISDICTION IN SETTING ASIDE THE DECISION OF THE LABOR ARBITER A QUO THAT HONORABLE COURT OF APPEALS ABUSED ITS DISCRETION IN CONCLUDING THAT EXHIBITS 2 TO 10 *IN+ WHICH PETITIONERS SIGNATURE DOES NOT APPEAR, THE FACTS REMAIN THAT HE BENEFITED FROM THE ALLEGED ANOMALOUS TRANSACTIONS, ONE MA. CRESENCIA MANGUERRA ENCASHED THE 58[5] CHECK USING THE BANK ACCOUNT OF PETITIONER ALLEGING THAT THE LATTER IS PETITIONER*S+ PARAMOUR. Petitioner claims that while his name appears in the check vouchers issued by MECO, marked as Exhibits 2 to 10, the incontrovertible fact remains that his signature does not appear in any of said vouchers. Not being a signatory of any of the said check vouchers, petitioner contends that there can be no basis in concluding that he ever received any commission, special discount or rebate from MECO. Petitioner also asserts that he was denied due process because he was not given the opportunity to refute the charges imputed against him. While it is true that private respondent conducted an 59[6] investigation, petitioner claims that the same was done without his participation. In its Comment, private respondent contends that the present petition for certiorari is not the proper remedy to assail the subject decision of the CA. Private respondent asserts that a petition for certiorari under Rule 65 of the Rules of Court may be availed of only when a party has no adequate remedy in the ordinary course of law. Petitioner argues that what petitioner should have done was to file a petition for review on certiorari under Rule 45 of the Rules of Court, and that petitioners failure to file a petition for review cannot be remedied by the filing of a special civil action for certiorari. Even assuming that petitioner is allowed to institute the present petition for certiorari, private respondent contends that the same must still be dismissed because what is being assailed are the factual findings of the CA and the NLRC and settled is the rule that in certiorari proceedings under Rule 65 of the Rules of Court, judicial review does not go as far as to evaluate the sufficiency of evidence upon which the NLRC based its determinations, the inquiry being limited essentially to whether or not said tribunal has acted without or in excess of its jurisdiction or with grave abuse of discretion. In any case, private respondent further contends that petitioner failed to prove that the CA committed grave abuse of discretion because pieces of documentary and oral evidence bear out the fact that petitioner indeed received various amounts from MECO either as commission, special discount or rebate without 60[7] private respondents knowledge and approval. The Court does not find merit in the present petition for the following reasons: First, it is well settled that the remedy to obtain reversal or modification of judgment on the merits is appeal. This is true even if the error, or one of the errors, ascribed to the court rendering the judgment is its lack of jurisdiction over the subject matter, or the exercise of power in excess thereof, or grave
61[8]

56[3]

abuse of discretion in the findings of facts or of law set out in the decision. In the present case, the CA disposed of CA-G.R. SP No. 52373 on the merits. Petitioner claims that he received the Decision of the CA on May 17, 2001. Consequently, he had 15 days from said date of receipt of assailed judgment, or until June 1, 2001, within which to file a petition for review on certiorari, the reglementary period prescribed by Rule 45 of the Rules of Court to avail of said action. On July 9, 2001 close to two months after said receipt, petitioner filed the present petition. Evidently, petitioner has lost his remedy of appeal. The filing of the instant petition for certiorari cannot be used as a means of recovering his appeal as it is settled that certiorari is not a substitute for lost 63[10] 64[11] appeal. The remedies of appeal and certiorari are mutually exclusive and not alternative or successive. Second, assuming for the sake of argument that the present petition for certiorari is the appropriate remedy, the records of the instant case show that petitioner failed to file a motion for reconsideration of the decision of the appellate court, thus, depriving the CA of the opportunity to correct on reconsideration such errors as it may have committed. The first paragraph of Section 1, Rule 65 of the Rules of Court clearly states that in order for a person to avail of the special civil action of certiorari, he must be left with no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, to wit: SECTION 1. Petition for Certiorari. When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board of officer, and granting such incidental reliefs as law and justice may require. (Italics supplied) A motion for reconsideration of an assailed decision is deemed a plain and adequate remedy expressly available under the law. The general rule is that a motion for reconsideration is indispensable before resort to the special civil action for certiorari to afford the court or tribunal the opportunity to correct 66[13] its error, if any. This rule is subject to certain recognized exceptions, to wit:
65[12]

62[9]

(a) where the order is a patent nullity, as where the court a quo has no jurisdiction; (b) where the questions raised in the certiorari proceedings have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court; (c) where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of the Government or of the petitioner or the subject matter of the action is perishable; (d) where, under the circumstances, a motion for reconsideration would be useless; (e) where petitioner was deprived of due process and there is extreme urgency for relief; (f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable; (g) where the proceedings in the lower court are a nullity for lack of due process; (h) where the proceeding was ex parte or in which the petitioner had no opportunity to object; and 67[14] (i) where the issue raised is one purely of law or where public interest is involved. None of these exceptions are present in the instant case. Hence, petitioners unjustified failure to file a motion for reconsideration of the decision of the CA before recourse to this special civil action was made calls for the outright dismissal of this case.

Third, going into the merits of the case, the Court finds that the dismissal of the instant petition is warranted for failure of petitioner to show grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the CA. Petitioner was dismissed from employment on the ground, among others, of loss of trust and confidence. Loss of trust and confidence, as a valid ground for dismissal, must be substantiated by evidence. Jurisprudence has distinguished the treatment of managerial employees or employees occupying positions of trust and confidence from that of rank-and-file personnel, insofar as the application of the doctrine of trust and confidence is concerned. In Caoile v. National Labor Relations Commission, the Court had occasion to explain as follows: Thus, 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. But as regards a managerial employee, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. Hence, in the case of managerial employees, proof beyond reasonable doubt is not required, it being sufficient that there is some basis for such loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his 68[15] participation therein renders him unworthy of the trust and confidence demanded by his position. (Emphasis supplied) In addition, the language of Article 282(c) of the Labor Code states that the loss of trust and confidence must be based on willful breach of the trust reposed in the employee by his employer. Such breach is willful if it is done intentionally, knowingly, and purposely, without justifiable excuse, as 69[16] distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Moreover, it must be based on substantial evidence and not on 70[17] the employers whims or caprices or suspicions otherwise, the employee would eternally remain at the mercy of the employer. Loss of confidence 71[18] must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary. 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 working for 72[19] the employer. In addition, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned 73[20] holds a position of responsibility, trust and confidence or that the employee concerned is entrusted with confidence with respect to delicate matters, 74[21] such as the handling or care and protection of the property and assets of the employer. The betrayal of this trust is the essence of the offense for 75[22] which an employee is penalized. There is no dispute that petitioner is a confidential employee. During his cross-examination, he testified that aside from evaluating and recommending the purchase of Micro Computers, he also supervises the maintenance of computer hardware including the installation of computers for Citytrust in all of its

branches nationwide. It is clear from the foregoing that petitioner is not an ordinary rank-and-file employee. His job entails the observance of proper company procedures relating to the acquisition, installation and maintenance of computers which, undeniably, are vital to the operations of his employer. Moreover, his functions are not limited to a specific unit of Citytrust but extend to all branches of his employer nationwide. Thus, his job involves a high degree of responsibility requiring a substantial amount of trust and confidence on the part of his employer. The question that remains then is whether there is substantial evidence to prove that petitioner is guilty of the charges imputed against him as to justify Citytrust in dismissing him from employment on the ground of loss of trust and confidence. Petitioner contends that without his signatures appearing in the check vouchers issued by MECO, there can be no basis in coming up with the conclusion that he received and appropriated commissions and rebates without the knowledge and authority of Citytrust. The Court is not persuaded. Petitioners reliance on the case of Atlas Consolidated Mining & Development Corp. v. National Labor Relations Commission is misplaced. In the said case, the private respondent, who is an employee of petitioner corporation, was charged with the unauthorized withdrawal and misappropriation of 192 liters of gasoline from company stocks and for knowingly allowing company personnel to work on company time in the assembly of a privately-owned vehicle. To prove the first charge, the petitioner company presented in evidence entries in a logbook showing gasoline withdrawals allegedly made by private respondent. In ruling against the petitioner company, the Court held that since respondents signature does not appear in the logbook, there is no proof that he actually withdrew and received the gasoline. In fact, the Court ruled that the logbook cannot be relied upon to establish the alleged dishonesty of private respondent. Neither did the Court give credence to the testimonies of the witnesses against him. In sum, no competent evidence was presented to prove the private respondents liability. This is not the situation in the present case. It is true that the check vouchers alone are not sufficient to prove his guilt owing to the fact that his signatures do not appear in any of these vouchers. However, aside from the abovementioned check vouchers, there are other pieces of evidence presented by Citytrust which petitioner failed to refute and which points to the fact that he received commissions or rebates from MECO. The evidence consists of the following: (1) admission made by petitioner in 78[25] his letter, dated August 3, 1993, that he received material considerations from MECO since 1992; (2) certification issued by MECO categorically stating 79[26] that he was paid commissions totaling P105,192.00; (3) testimonies of Leoncio Araullo, Vice President of Citytrust; and Ma. Lourdes Foronda, Assistant Vice President for Staff Services Division of the Human Resources Department of Citytrust, that petitioner admitted having received the amounts of P1,000.00 and P500.00 from Art Cordero, an officer of MECO, claiming that these amounts are for the boys; (4) statements in the affidavit of Florante del Mundo, auditor at the Internal Audit Department of Citytrust that two of the checks issued by MECO in favor of petitioner were either encashed by the 80[27] latters common-law-wife or deposited in his account. In addition, the Court agrees with the CA that annotations appearing in the check vouchers 81[28] issued by MECO such as Payment for the Rebate Given to Boy Cruz of Citytrust and Payment for the Sales Rebate Given to Boy Cruz of 82[29] Citytrust are confirmations of the fact that the checks were issued and given specifically by MECO to petitioner in consideration of his office and services. These pieces of evidence, when taken together, would constitute substantial evidence to prove petitioners guilt; and his failure to satisfactorily explain or rebut them only strengthens Citytrusts case against him.
77[24]

76[23]

Thus, petitioners acceptance of commissions and rebates from MECO, without the knowledge and consent of Citytrust and without said rebates and commissions being reported and turned over to the latter, are acts which can clearly be considered as a willful breach of the trust and confidence reposed by Citytrust upon him. Settled is the rule that an employer cannot be compelled to retain an employee who is guilty of acts inimical to the interests of the 83[30] 84[31] employer. A company has the right to dismiss its employees if only as a measure of self-protection. This is all the more true in the case of 85[32] supervisors or personnel occupying positions of responsibility. In the present case, the Court finds that the CA did not commit grave abuse of discretion when it ruled that Citytrust is justified in dismissing petitioner from his employment for loss of trust and confidence. Petitioner contends that he was denied his right to due process because the investigation conducted by Citytrust was done ex-parte and he was not given the opportunity to confront the witnesses against him. Petitioners concept of the opportunity to be heard is the chance to ventilate ones side in a formal hearing where he can have a face-to-face confrontation with his accusers. It is well settled that the basic requirement of notice and hearing in termination 86[33] cases is for the employer to inform the employee of the specific charges against him and to hear his side and defenses. This does not, however, mean 87[34] 88[35] a full adversarial proceeding. The parties may be heard through pleadings, written explanations, position papers, memorandum or oral argument. In all of these instances, the employer plays an active role by providing the employee with the opportunity to present his side and answer the charges in 89[36] substantial compliance with due process. In the present case, petitioner cannot claim that he was denied due process because he was able to respond 90[37] to the letter of Citytrust dated August 6, 1993. Moreover, he admitted in his cross-examination before the labor arbiter that he was able to attend the investigation of the ad hoc committee formed by Citytrust where he was shown the check vouchers issued by MECO, informed of the charges against him 91[38] and was given further opportunity to explain his side. Hence, the fact alone that he was not able to confront the witnesses against him during the investigation conducted by Citytrust does not mean that he was denied his right to due process. What is frowned upon is the absolute lack of notice and 92[39] hearing.

As to the requirement of notice, the Labor Code provides that before an employee can be validly dismissed, the employer is required to furnish the employee with two (2) written notices: (a) a written notice containing a statement of the cause for termination to afford the employee ample opportunity to be heard and defend himself with the assistance of his representative, if he so desires; and, (b) if the employer decides to terminate the services of the 93[40] employee, the employer must notify him in writing of the decision to dismiss him, stating clearly the reasons therefor. Citytrust complied with the first requirement of notice when it informed petitioner through a letter, dated August 6, 1993, of the charges against him, directing him to explain in writing why his employment should not be terminated and, thereafter, to appear in a hearing to be conducted by the company to give him further opportunity to 94[41] explain his side. Citytrust also complied with the second requirement of notice when it sent a memorandum dated September 28, 1993, to petitioner 95[42] informing him of his dismissal from employment and the reasons therefor. WHEREFORE, the instant petition is DISMISSED for lack of merit. SO ORDERED 5. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 81471 April 26, 1989 CHONG GUAN TRADING, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and JOSE M. CHUA, respondents. Neva B. Blancaver and Apolinario N. Lomabao, Jr. for petitioner. Faustino F. Tugade for private respondent. The Solicitor General for public respondent. CORTES, J.: Assailed in this petition is the decision of the National Labor Relations Commission (NLRC) in NLRC Case No. 11-4406-83, entitled "Jose M. Chua v. Chong Guan Trading," whereby the NLRC held that private respondent Jose M. Chua was illegally dismissed by petitioner Chong Guan Trading. The Court after a careful examination of the pleadings filed in this case, i.e., the Petition and its Annexes, the Comment of public respondent, the Reply and Supplemental Reply of petitioner, the Manifestation/Opposition of private respondent, and the Rejoinder of public respondent, considered the Comment as answer, the issues joined, and the case submitted for decision. Jose M. Chua was employed as sales manager of Chong Guan Trading, a dealer of paper and paper products owned by Mariano, Pepito and Efren Lim. Private respondent started working with the petitioner way back in 1960 but it was only in 1972 that his name was registered by petitioner with the Social Security System. [Decision of SSC in SSS Case No. 8728, p. 1; Rollo, p. 49.] In November 1983, private respondent filed a complaint with the Office of the Labor Arbiter of the National Capital Region charging petitioner with illegal dismissal and non-payment of overtime pay and other benefits provided for by law. In his complaint, private respondent alleged that he was fired by Mariano Lim because of the incident that occurred on October 28,1983. It appears from the record that on the morning of October 28, 1983, a customer, who borrowed the store's telephone directory, accidentally dropped it on the top-glass of the store's showcase causing it to break. When Pepito Lim saw the already taped broken top-glass he asked for an explanation from private respondent. In order to cover up for the customer, private respondent admitted that he himself accidentally broke it. Pepito then got angry and hurled "unprintable words and invectives" at private respondent. [Decision of NLRC, p. 2; Rollo, p. 14.] What transpired thereafter was disputed by both parties. Private respondent claimed that he was dismissed by Mariano Lim when the later ordered him to leave petitioner's premises. Petitioner, on the other hand, denied having dismissed private respondent and claimed that it was private respondent who went home after the incident and failed to report for work for many days thereafter. Petitioner alleged that, far from being dismissed, it was private respondent himself who abandoned his job. The parties filed their respective position papers and agreed to submit the case for resolution on the basis of the pleadings. On April 18,1984, the Labor Arbiter rendered a decision finding that there was no illegal dismissal since private respondent was never dismissed by petitioner. The Labor Arbiter held that the altercation that occurred between private respondent and the Lim brothers because of the broken top-glass cannot be construed as the dismissal of the private respondent because it was only a minor incident. No pronouncement on the issue of the alleged abandonment by private respondent was made but the Labor Arbiter ordered the reinstatement of private respondent but without backwages. The dispositive portion of the decision reads: WHEREFORE, respondents are hereby ordered to reinstate complainant to his former position without backwages, to pay him his proportionate 13thmonth pay for the year 1983 and the money equivalent of fifteen (15) days service incentive leave pay. All his other claims including the claim for damages are hereby, DISMISSED. SO ORDERED. [Decision of Labor Arbiter, p. 7; Rollo, p. 31 .]

Private respondent elevated the decision of the Labor Arbiter to the NLRC. In a resolution promulgated on June 30, 1987, the NLRC dismissed the appeal for being filed out of time. Upon motion of private respondent, the NLRC reconsidered its Resolution and gave due course to the appeal. On December 29,1987 respondent Commission decided in favor of private respondent and held that: xxx xxx xxx ... we are by and large convinced that the appellant was indeed dismiss without the attendant formalities required by law. On account of which he should therefore, be reinstated to his former position with three (3) years backwages without qualification or deduction. Should reinstatement, however, be not feasible due to circumstances or developments not attributable to the appellees, the appellant should, in addition to the three years backwages, be paid a separation pay equivalent to one half month pay for every year of service, a fraction of at least six (6) months being considered as one whole year. The rest of the award for other benefits stays. WHEREFORE, modified as above-indicated, the decision appealed from is hereby, AFFIRMED. SO ORDERED. [NLRC Decision, p. 18; Rollo, p. 18.] From the NLRC decision, petitioner interposed the present petition. The Court will first address the procedural issue raised by the petitioner. Petitioner maintains that respondent NLRC has no jurisdiction to entertain the appeal flied by private respondent, much less modify the decision appealed from, the same having become final and executory after the lapse of ten (10) days from respondent's receipt thereof. Article 223 of the Labor Code [Pres. Decree 442, as amended] provides for a reglementary period of ten (10) days within which to appeal a decision of the labor arbiter to the NLRC. The ten-day period has been interpreted by this Court in the case of Vir-jen and Marine Services, Inc. v. National Labor Relations Commission [G.R. Nos. 58011-12, July 20, 1987, 115 SCRA 347] as ten (10) "calendar" days and not ten (10) "working" days. In the instant case, while the appeal was filed within ten (10) working days from receipt of the decision, it was filed beyond the (10) calendar days prescribed by law. Private respondent received a copy of the decision of Labor Arbiter Martinez on May 3, 1984 while the appeal was filed only on May 15, 1984 or twelve (12) days from notice of the decision. [Resolution of NLRC, p. 1; Rollo, p. 32.] It is true that the perfection of an appeal in the manner and within the period prescribed by law is not only mandatory but jurisdictional, and failure to perfect an appeal has the effect of rendering the judgment final and executory. [Narag v. National Labor Relations Commission, G.R. No. 69628, October 28,1987, 155 SCRA 199.] However, as correctly pointed out by the Solicitor General, the NLRC may disregard the procedural lapse where there is an acceptable reason to excuse tardiness in the taking of an appeal. [Comment of the Office of the Solicitor General, p. 6; Rollo, p. 46; See also Firestone Tire and Rubber Company of the Philippines v. Lariosa, G.R. No. 70479, February 27, 1987, 148 SCRA 187; MAI Philippines, Inc. v. National Labor Relations Commission, G.R. No. 73662, June 18, 1987, 151 SCRA 196.] In this case, the appeal was filed out of time because the counsel of private respondent relied on the footnote of the notice of the decision of the Labor Arbiter which stated that "the aggrieved party may appeal ... within ten (10) working days, as per NLRC Resolution No. 1, series of 1977." [Decision of NLRC, p. 1; Rollo, p. 13; Emphasis supplied.] In the case of Firestone Tire and Rubber Co. of the Phil. v. Lariosa, [supra], which has substantially the same set of facts as this case, the Court accepted the party's reliance on the erroneous notice in the labor arbiter's decision as a reasonable ground for excusing non-compliance with the ten (10) calendar day period for appeal. Explaining the reason for this ruling, the Court said: xxx xxx xxx Mindful of the fact that Lariosa's counsel must have been misled by the implementing rules of the labor commission and considering that the shortened period for an appeal is principally intended more for the employee's benefit, rather than that of the employer, We are inclined to overlook this particular procedural lapse and to proceed with the resolution of the instant case, [at p. 191.] xxx xxx xxx Thus, private respondent's late filing of the appeal notwithstanding, the Court finds that public respondent did not commit grave abuse of discretion in giving due course to the appeal. Having disposed of the procedural issue, the Court will now deal with the main issue in this case, which is whether or not NLRC committed grave abuse of discretion in ordering petitioner to pay private respondent three years backwages and separation pay (if reinstatement is no longer possible) for the alleged illegal dismissal of private respondent. While petitioner concedes that private respondent must be reinstated since there was no intentional abandonment on the part of private respondent, it challenges the order for the payment of backwages and separation pay. Petitioner contends that there was no illegal dismissal to speak of since private respondent was never dismissed in the first place, and that justice dictates that private respondent must simply be reinstated. [Reply, pp. 1-2; Rollo, pp. 51-52.] Both the labor arbiter and the NLRC agree that the accidental breaking of the showcase's top-glass was so minor an incident as to provoke an employer to dismiss a managerial employee who has worked with him for more than twenty (20) years. [Decision of NLRC, Rollo, p. 16.] However, in holding that private respondent was illegally dismissed by petitioner, the NLRC held that: We agree that the accidental breaking of the showcase's top-glass was a minor incident. Ordinarily it could not provoke an employer (who knew what its repercussions could be) to dismiss an employee for that matter. But the appellees [petitioner Chong Guan trading and its owners] who, we perceive, were indeed bent on ousting the appellant [private respondent Chua] magnified it to such a serious proportion, as shown by the unprintable words and invectives that they hurled to the appellant, to ostensibly justify their heretofore desire to terminate him. In short, they seized the incident as the most opportune time to implement their obvious decision to lay-off the appellant. [Decision of NLRC, p. 4; Rollo, p. 16; Emphasis supplied.] The import of the above findings of the NLRC is that the breaking of the top-glass was used by petitioner as an excuse to terminate respondent Chua in accordance with its scheme or plan to oust him. The Court cannot sustain the findings of respondent NLRC. As found by the labor arbiter, no evidence was presented to establish the existence of the so-called scheme to oust private respondent [Decision of Labor Arbiter, p. 5; Rollo, p. 29.] It was based only on private respondent's unsupported claim that there was an "orchestrated scheme or plan" to oust him and that this plan had been carefully laid out for a long time. Private respondent's claim is not borne out by the record which shows that petitioner has been granting substantial cash advances to private respondent. In fact barely a month before his alleged illegal dismissal, petitioner allowed private respondent to make a cash advance of P4,718.00. [Decision of Labor Arbiter, p. 5; Rollo, p. 29.] If indeed there was a scheme to oust private respondent, petitioner should have denied him further cash advances knowing that his services will soon be terminated and as a result thereof, there may be no way to recover the cash advances.

Furthermore, the NLRC admitted in its decision that its finding that the petitioner was "indeed bent on ousting" private respondent was based only on its "perception" and not on any evidence on record. [Decision of NLRC, p. 4; Rollo, p. 16.] This Court, however, cannot rely on NLRC's perception or speculations in the absence of any credible evidence to support it. [San Miguel Corporation v. National Labor Relations Commission, G.R. No. 50321, March 13, 1984, 128 SCRA 180.] For while it is well-established that the findings of facts of the NLRC are entitled to great respect and are generally binding on this Court [Antipolo Highway Lines, Inc. v. Inciong, G.R. No. L-38532, June 27, 1975, 64 SCRA 441; Philippine Labor Alliance Council (PLAC) v. Bureau of Labor Relations, G.R. No. L-41288, January 31, 1977, 75 SCRA 162; Genconsu Free Workers Union v. Inciong, G.R. No. L-48687, July 2, 1979, 91 SCRA 311; PanPhilippine Life Insurance Corporation v. NLRC, G.R. No. 53721, June 29, 1982, 114 SCRA 866; Pepsi-Cola Labor Union-BLFUTUPAS Local Chapter No. 896 v. National Labor Relations Commission, G.R. No. 58341, June 29, 1982, 114 SCRA 930; Mamerto v. Inciong, G.R. No. 53068, November 15, 1982, 118 SCRA 265; San Miguel Corporation v. National Labor Relations Commission, G.R. No. 50321, March 13, 1984, 128 SCRA 180] it is equally well-settled that the Court will not uphold erroneous conclusions of the NLRC when the Court finds that the latter committed grave abuse of discretion in reversing the decision of the labor arbiter or when the findings of facts from which the conclusions were based were not supported by substantial evidence [Insular Life Assurance Co., Ltd. Employees Association-NATU v. Insular Life Assurance Co., Ltd., G.R. No. L- 25291, March 10, 1977, 76 SCRA 50; Kapisanan ng Manggagawa sa Camara Shoes v. Camara Shoes, G.R. No. 50985, January 30, 1982, 111 SCRA 477.] The question that must now be addressed by the Court is whether, absent the alleged scheme or plan to oust private respondent, it can be inferred from the events that transpired on the morning of October 28, 1983 that private respondent was illegally dismissed by petitioner. Private respondent claims that Mariano Lim dismissed him when the latter said: "Lumayas ka rito." This is disputed by the petitioner who claims that it was private respondent who voluntarily left petitioner's premises. After a careful examination of the events that gave rise to the present controversy as shown by the record, the Court is convinced that private respondent was never dismissed by the petitioner. Even if it were true that Mariano Lim ordered private respondent to go and that at that time he intended to dismiss private respondent, the record is bereft of evidence to show that he carried out this intention. Private respondent was not even notified that he had been dismissed. Nor was he prevented from returning to his work after the October 28 incident. The only thing that is established from the record, and which is not disputed by the parties, is that private respondent Chua did not return to his work after his heated argument with the Lim brothers. Moreover, petitioner has consistently manifested its willingness to reinstate private respondent to his former position. This negates any intention on petitioner's part to dismiss private respondent. Petitioner first expressed its willingness to reinstate private respondent during the initial hearing of the case before the Labor Arbiter. [Decision of Labor Arbiter, p. 6; Rollo, p. 30.] In its position paper the petitioner also stated that: xxxxxxxxx IN PASSING, we gladly reiterate ... that the management is still waiting and more than willing to accept him [private respondent] and return to his former position, notwithstanding his long unauthorized absences and the intentional abandonment from his job. xxxxxxxxx [Annex "B" to the Petition, p. 5; Rollo, p. 24.] This was again reiterated by the petitioner in its Reply to the Comment of public respondent filed in connection with the instant petition. [Reply, pp. 1- 2; Rollo, pp. 51-52.] Therefore, considering the Court's finding that private respondent was never dismissed by the petitioner, the award of three years backwages was not proper. Backwages, in general, are granted on grounds of equity for earnings which a worker or employee has lost due to his illegal dismissal from work. [New Manila Candy Workers Union (NACONWA-PAFLU) v. Court of Industrial Relations, G.R. No. L-29728, October 30, 1978, 86 SCRA 37; Durabuilt Recapping Plant and Co. v. National Labor Relations Commission, G.R. No. 76746, July 27, 1987, 152 SCRA 328.] Where the employee was not dismissed and his failure to work was not due to the employer's fault, the burden of economic loss suffered by the employee should not be shifted to the employer. [SSS v. SSS Supervisors' Union-CUGCO, G.R. No. L-31832, October 23, 1982, 117 SCRA 746; Durabuilt Recapping Plant and Co. v. National Labor Relations Commission, supra.] In this case, private respondent's failure to work was due to the misunderstanding between the petitioner's management and private respondent. As correctly observed by the Labor Arbiter, private respondent must have construed the October 28 incident as his dismissal so that he opted not to work for many days thereafter and instead filed a complaint for illegal dismissal.[Decision of Labor Arbiter, p. 6; Rollo, p. 30.] On the other hand, petitioner interpreted private respondent's failure to report for work as an intentional abandonment. [Annex "B "to the Petition, p. 5; Rollo, p. 24.] However, there was no intent to dismiss private respondent since the petitioner is willing to reinstate him. Nor was there an intent to abandon on the part of private respondent since he immediately filed a complaint for illegal dismissal soon after the October 28 incident. It would be illogical for private respondent to abandon his work and then immediately file an action seeking his reinstatement. [Judric Canning Corporation v. Inciong, G.R. No. 51494, August 19, 1982, 115 SCRA 887; Flexo Manufacturing Corporation v. National Labor Relations Commission, G.R. No. 55971, February 28, 1985, 135 SCRA 145; Remerco Garments Manufacturing v. Ministry of Labor and Employment, G.R. Nos. 56176-77, February 28, 1985, 135 SCRA 167.] Under these circumstances, it is but fair that each party must bear his own loss, thus placing the parties on equal footing. [Pan American World Airways, Inc. v. Court of Industrial Relations, et al., G.R. No. L-20434, July 30, 1966, 17 SCRA 813; SSS v. SSS Supervisors' Union-CUGCO, supra.] As to the separation pay, considering that petitioner has expressed its willingness to reinstate private respondent to his former position, the order for the payment of separation pay is no longer necessary. WHEREFORE, premises considered, the decision of respondent NLRC is REVERSED and SET ASIDE. The decision of the Labor Arbiter is REINSTATED. SO ORDERED. 6. THIRD DIVISION [G.R. No. 131405. July 20, 1999] LEILANI MENDOZA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ASIAN LAND STRATEGIES CORPORATION, respondents. DECISION PANGANIBAN, J.: Unsubstantiated accusations or baseless conclusions of the employer are insufficient legal justifications to dismiss an employee. The employer must prove by substantial evidence the facts and incidents upon which loss of confidence or breach of trust is based. Mere allegations, even if supported by pro forma and generalized affidavits, are not sufficient evidence to justify the dismissal of an employee. The Case The Petition for Certiorari before us seeks to set aside the Decision dated February 19, 1997, promulgated by the National Labor Relations Commission in NLRC CA No. 011082-96, which reversed that of the labor arbiter granting petitioners Complaint for illegal dismissal. In his Decision dated May 17, 1996, xxii[1] Labor Arbiter Dominador B. Saludares disposed as follows: WHEREFORE, premises considered, judgment is hereby entered in favor of the complainant and against the respondent, ordering the latter, as follows: 1. To pay the sum of P8,000.00 as one (1) month separation pay of the complainant in lieu of reinstatement; 2. To pay the sum of P92,000.00 as back wages of complainant from June 16, 1995 up to this writing;

3. To pay complainant moral damages in the sum of P50,000.00; and 4. To pay attorneys fees in the sum of P15,000.00. xxiii[2] Reversing the above disposition, the National Labor Relations Commission (NLRC) ruled: WHEREFORE, premises considered, the appealed decision is hereby REVERSED AND SET ASIDE, and the instant case is hereby dismissed for lack of xxiv[3] merit. xxv[4] Reconsideration was denied in the Resolution dated September 19, 1997. The Facts xxvi[5] Respondent Commission narrates the facts in this wise: *Petitioner+ started working with the *private+ respondent during the latter part of April 1994. Shortly thereafter, she was appointed as [f]inance [m]anager of the [private] respondent and her tasks [included], among others, xxx custody of and disbursement of company funds. On June 9, 1995, *petitioner+ claims that she was summoned by Ms. Ma. Angela Celeridad, the companys *v+ice-[p]resident, who informed her that management had decided to terminate her employment. Hence, she was told either to resign or face dismissal. Later that day at around 7:00 oclock in the evening, [petitioner] alleged that the [p]resident of the company, Johnny P. Lee, announced that her employment was already terminated. On June 23, 1995, [petitioner] lodged her complaint against the company for illegal dismissal. *Private+ *r+espondent, however, paints a different scenario of the circumstances surrounding *petitioner+s cessation from her employment. *Private+ [r]espondent denies having dismissed the [petitioner] as no memorandum or letter of dismissal was issued to the [petitioner]. [Private] [r]espondent asserts that on May 20, 1995, it received a complaint from several of its marketing and sales agents accusing [petitioner] of committing deliberate delays in the payment of their commission in violation of company policy. They alleged that she refused to release their commissions despite payment of the price of the properties they ha[d] brokered unless she [was] given a certain amount [as her cut]. These individual complainants include[d] Amado Roa, [a]cting [v]ice-[p]resident for marketing and all [d]ivision [h]eads of the Sales Department of the company, namely: Leonora Punongbayan, Elma Mendoza, Nestor Pamintuan and Melly Rubid. The company, through its [p]resident, furnished [petitioner] with a copy of the complaint and gave her time to answer the same. Despite having been given an extension to file a reply to the charges against her, [petitioner] failed to submit the same. Instead, on June 10, 1995, she stopped reporting for work. In addition, *private+ respondent claims that on June 15, 1995, another employee of the company, a certain Rufino Pahati, lodged a separate complaint against [petitioner] regarding his application for cash advance. Mr. Pahati claim[ed] that [petitioner] made him apply for cash advance but it was she who took the money. She promised to pay him back but failed. Allegedly, the company sent a letter to Mendoza dated June 24, 1995 demanding her to explain all [the] irregularities imputed [to] her. Hearing no response from her, the company was constrained to conduct an investigation in her absence. [Petitioner] was found to have committed the above-mentioned anomalies imputed [to] her. On June 28, 1995, the [private] respondent notified [petitioner] that as of June 15, 1995, she was considered resigned from her job. On June 23, 1995 the instant complaint was filed seeking xxx reinstatement, backwages, damages and attorneys fees. Ruling of Respondent Commission As finance manager, petitioner held a sensitive position which depended largely on her employers continued trust and confidence in her. Respondent Commission found that she had committed acts that were of such nature as to be sufficient to cause the loss of such trust and confidence. The dismissal of the criminal charges against petitioner did not prove the absence of a valid ground for her dismissal. Conviction in a criminal case is not indispensable to the dismissal of an employee, and the findings of a public prosecutor are not binding upon a labor tribunal. Respondent Commission also faulted petitioner for the failure of private respondent to conduct a hearing regarding the complaints against her. Allegedly, she refused to report for work to avoid and prevent an investigation by the company. Thus, the accusations against her stood unrebutted, and private respondent had no recourse but to consider her services ended. xxvii[6] Hence, this Petition. The Issues xxviii[7] Petitioner does not pinpoint the issues, but Respondent Commission poses the following question: Whether or not Respondent NLRC acted with grave abuse of discretion in reversing the decision of the labor arbiter and in declaring that petitioner was xxix[8] not illegally dismissed. To fully ventilate the foregoing question, the Court resolved to subdivide the discussion into three issues: (1) Should this Court review the factual findings of the labor tribunals below? (2) Did petitioner abandon her post? (3) May petitioner be validly dismissed on the ground of breach of trust and loss of confidence? The Courts Ruling The Petition is partly meritorious. First Issue: Review of Factual Findings The factual findings of the labor arbiter, when sufficiently supported by the evidence on record, should as a rule be given great respect by appellate xxx[9] tribunals. Pursuant to this doctrine, petitioner insists that private respondent adduced no scintilla of evidence to establish that she abandoned her job or committed serious irregularities constituting a breach of trust and loss of confidence. Hence, the NLRC abused its discretion in reversing the labor arbiters factual findings. On the other hand, Respondent Commission ruled that there *was+ sufficient cause for respondent to terminate complainant after she failed to report back to work without justifiable cause. The NLRC and private respondent argue that the labor arbiter failed to take into account important pieces of relevant evidence showing that petitioner was guilty of a serious breach of trust. Thus, Respondent Commission invokes the similarly entrenched rule that xxxi[10] its findings should be respected because they are grounded on substantial evidence. Since the factual findings of the NLRC are inconsistent with those of the labor arbiter, this Court -- as an exception to the rule that only questions of law xxxii[11] may be raised in certiorari proceedings -- resolved to conduct a full review of the records before us in order to determine the facts of this case. xxxiii[12] In St. Martin Funeral Home v. National Labor Relations Commission, we held that petitions for certiorari challenging NLRC decisions should be remanded to or filed directly with the Court of Appeals, which has concurrent jurisdiction over such cases. However, since the Memoranda of the parties have already been filed in this Court prior to the finality of St. Martin, we shall dispose of this case once and for all, rather than remand it to the appellate court. Second Issue: Abandonment Must Be Proven Petitioner prays that we should reinstate the labor arbiters Decision, which ruled out abandonment in this wise:

Anent the defense of alleged abandonment, *the labor arbiter+ also find*s+ the same to be incredible if not highly unthinkable because [petitioner] is a mother and at the same time the head of the family having been separated from her husband. She is the only breadwinner of the family and her job is her only means of livelihood. Abandonment of position is a matter of intention and cannot be lightly inferred, much less legally presumed from certain equivocal acts. For abandonment to arise, there must be concurrence of the intention to abandon and some overt acts from which it can be inferred that the employee concerned has no more interest to work. On the contrary, she immediately filed her complaint for illegal dismissal with prayer for xxxiv[13] reinstatement. Respondent Commission found the foregoing reasoning weak. It held that petitioner abandoned her work to avoid the investigation of the complaints filed against her, viz.: xxx Admittedly, there was a xxx *falling+ out between *petitioner+ and *private+ respondent which was triggered by the complaint filed by several company agents against complainant. This, however, *did+ not justify complainants absence for an indefinite period. There was no reason for her to abandon her work beginning June 10, 1995. In fact, she was supposed to confront her accusers on that day. The absence of any memorandum or order directing her dismissal, which complainant herself kept xxx harping [on] to prove illegal dismissal, all the more strengthens the theory that she was expected by the company to report for work on June 10, 1995 and on the following days. With her actuation, the company was left with no choice but to consider her as xxxv[14] resigned. xxxvi[15] We cannot concur with the NLRC. The unflinching rule in illegal dismissal cases is that the employer bears the burden of proof. To establish a case of abandonment, the employer must prove the employees deliberate and unjustified refusal to resume employment without any intention of returning. Specifically, the employer has to show the concurrence of the following: (1) the employees intention to abandon employment and (2) overt acts from xxxvii[16] which such intention may be inferred -- as when the employee shows no desire to resume work. The private respondent failed to establish any of these. The employer herein argues that the lack of a notice of termination is proof that petitioner abandoned her job. We disagree. Mere absence from work, especially where the employee has been verbally told not to report, cannot by itself constitute abandonment. To repeat, the employer has the burden of proving overt acts on the employees part which demonstrate a desire or an intention to abandon her work. It failed to discharge this burden. xxxviii[17] Furthermore, the filing of a complaint for illegal dismissal within a reasonable period negates abandonment. In the present case, the Complaint was filed about two weeks after petitioner had been dismissed or had been deemed resigned. Third Issue: Loss of Trust and Breach of Confidence Petitioner insists that the complaints against her were afterthoughts concocted by the private respondent to gain leverage in the Complaint for illegal dismissal that she had filed. As proof, she cites the city fiscals dismissal of the criminal Complaints for estafa brought against her by her employer. Respondent Commission correctly held that the dismissal of the said Complaints by the city prosecutor did not bar the private respondent from considering them in evaluating petitioners trustworthiness. Proof beyond reasonable doubt of an employees misconduct is not required to establish loss xxxix[18] of trust and confidence. It is enough for the employer to present substantial evidence such amount of evidence as to induce a belief that the employee is responsible for a misconduct, and participation therein renders that employee unworthy of the trust and confidence demanded by the xl[19] job. Complaints and Notices Petitioner questions the NLRCs admission in evidence of the letter-complaint of Roa and the other division heads of the Sales Department of the xli[20] company. She alleges that these complaints were concocted by the private respondent, as she never received any copy of these; and that they were made known to her only after she had filed the Complaint for illegal dismissal. We disagree. The notices served on her sufficiently apprised her of the existence and the nature of the accusations against her. The company presidents xlii[21] letter of June 2, 1995 informed her that there was a complaint from Amado Roa and the other division heads of the Sales Department for her alleged deliberate withholding or delaying of the release and payment of the commissions xxx, unless and until given a certain amount in consideration [of] the xliii[22] expeditious release of the said commissions. Celeridads letter of June 24, 1995 reiterated the same gripe. That she did not receive a copy of these Complaints does not show that they were mere fabrications of the private respondent. Procedural due process only requires employers to furnish their errant employees written notices stating the particular acts or omissions constituting the grounds for their dismissal and to hear their side of the xliv[23] story. Obviously, the employer complied with these. It was, therefore, incumbent upon petitioner to exercise her right by asking the management for copies of the letters. She also alleges that the notices were fabricated since the private respondent presented them only during the appeal before the NLRC. Again, we disagree. xlv[24] Under its rules, the NLRC is allowed to receive evidence and to weigh its probative value. Furthermore, contrary to petitioners claims, the private respondent did not have to send these notices via registered mail, because the recipient could have been served such documents in the very office where xlvi[25] she was working. Accusations Must Be Substantiated All in all, we believe the petitioner was sufficiently notified of the charges against her. Nonetheless, such belief does not necessarily ripen into a holding that her dismissal was justified, because the employer failed to substantiate the accusations, which are as follows: 1. The division heads, led by acting Vice President Amado Roa, complained that (a) on several occasions petitioner intentionally delayed the release of commissions, unless the sales agents agreed to give her grease money; and (b) she solicited contributions for various causes in exchange for the release of said commissions. 2. Elma Mendoza grumbled that, to encash her disbursement voucher, she had to give the petitioner P1,000. 3. Carolyn Bam Gonzales, one of the firms accredited brokers, protested that although the companys book of accounts showed a disbursement of P6,712.32 representing her commissions for closing a sale, she did not receive such amount. 4. Rufino Pahati complained that petitioner made him sign a cash advance voucher for money given to another employee. After hearing the testimonies of Roa, Mendoza and Pahati, the labor arbiter disbelieved these accusations, because the alleged serious irregularities surfaced for the first time only after this complaint *for illegal dismissal+ was filed. The labor arbiter rationalized that, if there was any truth to petitioners involvement in any serious irregularities, she should have been informed and furnished xxx a written notice stating the particular acts or omissions constituting the grounds for her dismissal, but that private respondent failed to show evidence that it had complied with the notice and hearing requirements. To rectify the oversight, private respondent submitted before the NLRC two notices requiring petitioner to respond to the accusations leveled against xlvii[26] her. On this basis, Respondent Commission reversed the labor arbiter, holding that there was sufficient basis for private respondent to lose trust and confidence in petitioner. It held:

xxx Based on evidence submitted, the allegations in the complaint of Mr. Roa and several other employees stood unrebutted and the company had no recourse but to hold her responsible for the accusations leveled against her, or [at] least, to find her unfit to continue holding such sensitive and fiduciary position as finance manager. xxx xxx xxx As finance manager, complainants relationship with the company *was+ one of trust and confidence. After complainant refused to answer the charges of anomalies imputed [to] her by several sales agents despite being afforded the opportunity to be heard and to defend herself, the respondent cannot be faulted for losing its trust and confidence [i]n her as financ[e] manager. Under the circumstances, it would be most unfair to compel the company to xlviii[27] continue employing complainant. We fail to see how the NLRC could have arrived at such a conclusion. Reviewing the evidence on record, we find that the relevant evidence for the private xlix[28] respondent consisted only of the following: (a) Gonzales commission voucher (Exh. 3); (b) the letter-complaint signed by the division heads of the l[29] li[30] lii[31] Sales Department (Exh. 2); (c) Pahatis letter-complaint (Exh. 1); (d) the affidavits of Celeridad, Gonzales and Mendoza (Exhs. 4-A, 4-B & 5); (e) liii[32] liv[33] Lees letter-notice dated June 2, 1995 (Annex 6); (f) Celeridads letter-notice dated June 24, 1995 (Annex 8); and (g) several cash disbursement lv[34] vouchers including those of Mendoza and Gonzales (Annexes 9-18). While the cash disbursement voucher and Gonzales affidavit support the claim that her commission was released to another person, they do not show that petitioner was responsible for such irregularity. As finance manager, she approved disbursement of the companys funds, but the actual payment of lvi[35] cash was usually the function of the company cashier. Petitioner insists that she had no participation in the preparation of said documents. The flimsiness of private respondents evidence is obvious. In its Memorandum on Appeal, it claims that petitioner had effective control not only over the lvii[36] processing of said application *referring to Pahatis cash advance+ but also the subsequent salary deduction. From such premise, private respondent concludes that petitioner was guilty of the accusations of Roa and company, viz.: In the light of the actuations of *petitioner+ in the foregoing transaction, the accusations of the sale*s+ agents and managers regarding her motives behind the delay in the payment of their commission income become credible. xxx [This] betrays a tendency on her part to circumvent [c]ompany procedures and to employ irregular means without qualms for her personal benefit, especially in pecuniary matters. She likewise exhibited a propensity to capitalize on her superior position to exert undue influence over her peers and subordinates for purposes inimical to the interest of the [c]ompany. Such mental lviii[37] attitude and psychological make-up of *petitioner+ renders her unfit to assume a position as sensitive as that of the *f+inance *m+anager. Labor tribunals should be cautioned against confusing conjecture with evidence. The absence of petitioner, who failed to contest the charges against her in the investigation conducted by private respondent, did not mean admission of the accusations. lix[38] Although admissible in evidence, affidavits being self-serving must be received with caution, even if presented only on appeal before the NLRC. This is lx[39] because the adverse party is not afforded any opportunity to test their veracity. While Roa, Mendoza and Pahati testified for the private respondent before the labor arbiter, stenographic notes of the proceedings were not taken. Since their testimonies were not retaken during the appeal before Respondent Commission, the NLRC had no basis to reverse the labor arbiters assessment of their credibility. Their affidavits, standing alone, cannot be considered as substantial evidence. By themselves, generalized and pro forma affidavits cannot constitute relevant evidence which a reasonable mind may lxi[40] accept as adequate. True, employers cannot be compelled to retain in their service employees who are guilty of acts inimical to the interest of the former. True also, management has the right to dismiss erring employees as a measure of self-protection. In the case of managerial employees, employers are allowed a wider latitude of discretion in terminating their employment because they perform functions which by their nature require the full trust and confidence of lxii[41] the company. lxiii[42] However, loss of trust and confidence has never been intended to afford an occasion for abuse. It cannot be used arbitrarily, whimsically or lxiv[43] capriciously; it must be supported with substantial evidence. Unsubstantiated suspicions, accusations and conclusions of employers do not provide legal justifications for dismissing employees. In case of doubt, such lxv[44] cases should be resolved in favor of labor, pursuant to the social justice policy of our labor laws and the Constitution. The act of extorting money from sales agents in exchange for releasing their commissions is a serious accusation, but allegation is not proof. We reiterate that the employer has the burden of proof. As already pointed out, it failed to present sufficient evidence that petitioner was responsible for such abnormality. lxvi[45] An employee who has been illegally dismissed is entitled to reinstatement and full back wages. However, as held by the labor arbiter, conflict and antagonism have strained the relations between the parties; hence, reinstatement is no longer viable or advisable. Instead, petitioner should be awarded lxvii[46] separation pay in lieu of reinstatement. Moral damages are recoverable only where the dismissal of an employee is attended by bad faith, fraud, or an act oppressive to labor; or if it is done in a lxviii[47] manner contrary to morals, good customs or public policy. The adverse result of an action does not per se subject the actor to the payment of moral lxix[48] lxx[49] damages. Neither attorneys fees nor litigation expenses should be awarded, absent a showing of any of the grounds provided under the Civil lxxi[50] lxxii[51] Code. Where the award of moral damages is eliminated, so must the award for attorneys fees. WHEREFORE, the Petition is hereby GRANTED. The assailed Decision and Resolution are hereby SET ASIDE. The labor arbiters Decision is REINSTATED with MODIFICATION, as follows: (1) private respondent is hereby ORDERED to pay petitioner (a) back wages from June 16, 1995 up to the finality of this judgment without any deduction or qualification and (b) separation pay in the sum of P8,000; and (2) the award for moral damages and attorneys fees is DELETED. No costs. SO ORDERED 7. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 141093 February 20, 2001 PRUDENTIAL BANK and TRUST COMPANY, petitioner, vs. CLARITA T. REYES, respondent. GONZAGA-REYES, J.: 1 Before the Court is a petition for review on certiorari of the Decision, dated October 15, 1999 of the Court of Appeals in C.A.-G.R. SP No. 30607 and of its Resolution, dated December 6, 1999 denying petitioner's motion for reconsideration of said decision. The Court of Appeals reversed and set aside the 2 resolution of the National Labor Relations Commission (NLRC) in NLRC NCR CA No.009364-95, reversing and setting aside the labor arbiter's decision and 3 dismissing for lack of merit private respondent's complaint.

The case stems from NLRC NCR Case No.00-06-03462-92, which is a complaint for illegal suspension and illegal dismissal with prayer for moral and exemplary damages, gratuity, fringe benefits and attorney's fees filed by Clarita Tan Reyes against Prudential Bank and Trust Company (the Bank) before the labor arbiter. Prior to her dismissal, private respondent Reyes held the position of Assistant Vice President in the foreign department of the Bank, tasked with the duties, among others, to collect checks drawn against overseas banks payable in foreign currency and to ensure the collection of foreign bills or checks purchased, including the signing of transmittal letters covering the same. After proceedings duly undertaken by the parties, judgment was rendered by labor Arbiter Cornelio L. Linsangan, the dispositive portion of which reads: "WHEREFORE, finding the dismissal of complainant to be without factual and legal basis, judgment is hereby rendered ordering the respondent bank to pay her back wages for three (3) years in the amount of P540,000.00 (P15,000.00 x 36 mos.). In lieu of reinstatement, the respondent is also ordered to pay complainant separation pay equivalent to one month salary for every year of service, in the amount of P420,000.00 (P15,000 x 28 mos.). In addition, the respondent should. also pay complainant profit sharing and unpaid fringe benefits. Attorney's fees equivalent to ten (10%) percent of the total award should likewise be paid by respondent. 4 SO ORDERED." Not satisfied, the Bank appealed to the NLRC which, as mentioned at the outset, reversed the Labor Arbiter's decision in its Resolution dated 24 March 1997. Private respondent sought reconsideration which, however, was denied by the NLRC in its Resolution of 28 July 1998. Aggrieved, private respondent 5 commenced on October 28, 1998, a petition for certiorari before the Supreme Court. The subject petition was referred to the Court of Appeals for appropriate action and disposition per resolution of this Court dated November 25, 1998, in accordance with the ruling in St. Marlin Funeral Homes vs. 6 NLRC. In its assailed decision, the Court of Appeals adopted the following antecedent facts leading to Reyes's dismissal as summarized by the NLRC: "The auditors of the Bank discovered that two checks, No.011728-7232-146, in the amount of US$109,650.00, and No. 011730-7232-146, in the amount of US$115,000.00, received by the Bank on April 6, 1989, drawn ,by the Sanford Trading against Hongkong and Shanghai Banking Corporation, Jurong Branch, Singapore, in favor of Filipinas Tyrom, were not sent out for collection to Hongkong Shanghai Banking Corporation on the alleged order of the complainant until the said checks became stale. The Bank created a committee to investigate the findings of the auditors involving the two checks which were not collected and became stale. On March 8, 1991, the president of the Bank issued a memorandum to the complainant informing her of the findings of the auditors and asked her to give her side. In reply, complainant requested for an extension of one week to submit her explanation. In a "subsequent letter, dated March 14, 1991, to the president, complainant stated that in view of the refusal of the Bank that she be furnished copies of the pertinent documents she is requesting and the refusal to grant her a reasonable period to prepare her answer, she was constrained to make a general denial of any misfeasance or malfeasance on her part and asked that a formal investigation be made. As the complainant failed to attend and participate in the formal investigation conducted by the Committee on May 24, 1991, despite due notice, the Committee proceeded with its hearings and heard the testimonies of several witnesses. The Committee's findings were: 'a) The two (2) HSBC checks were received by the Foreign Department on 6 April 1989. On the same day, complainant authorized the crediting of the account of Filipinas Tyrom in the amount of P4,780,102.70 corresponding to the face value of the checks, (Exhibits 6, 22 to 22-A and 23 to 23-A). On the following day, a transmittal letter was prepared by Ms. Cecilia Joven, a remittance clerk then assigned in the Foreign Department, for the purpose of sending out the two (2) HSBC checks for collection. She then requested complainant to sign the said transmittal letters (Exhibits 1, 7 and 25; TSN, 11 March 1993, pp. 42-52), as it is complainant who gives her instructions directly concerning the transmittal of foreign bills purchased. All other transmittal letters are in fact signed by complainant. b) After Ms. Joven delivered the transmittal letters and the checks to the Accounting Section of the Foreign Department, complainant instructed her to withdraw the same for the purpose of changing the addressee thereon from American Express Bank to Bank of Hawaii (ibid.) under a special collection scheme (Exhibits 4 and 5 to 5-B). c) After complying with complainant's instruction, Ms. Joven then returned to complainant for the latter to sign the new transmittal letters. However, complainant told Ms. Joven to just hold on to the letters and checks and await further instructions (ibid.). Thus, the new transmittal letters remained unsigned. (See Exhibits 5 to 5-B). d) In June 1989, Ms. Joven was transferred to another department. Hence, her duties, responsibilities and functions, including the responsibility over the two (2) HSBC checks, were turned over to another remittance clerk, Ms. Analisa Castillo (Exhibit 14; TSN, 4 June 1993, pp. 27-29). e) When asked by Ms. Castillo about the two (2) HSBC checks, Ms. Joven relayed to the latter complainant's instruction (Exhibit 14; TSN, 4 June 1993, p. 42). f) About fifteen (15) months after the HSBC checks were received by the Bank, the said checks were discovered in the course of an audit conducted by the Bank's auditors. Atty. Pablo Magno, the Bank's legal counsel, advised complainant to send the checks for collection despite the lapse of fifteen (15) months. g) Complainant, however, deliberately withheld Atty. Magno's advice from her superior, the Senior Vice-President, Mr. Renato Santos and falsely informed the latter that Atty . Magno advised that a demand letter be sent instead, thereby further delaying the collection of the HSBC checks. h) On 10 July 1990, the HSBC checks were finally sent for collection, but were returned on 16 July 1990 for the reason 'account closed' (Exhibits 2-A and 3A).' After a review of the Committee's findings, the Board of Directors of the Bank resolved not to re-elect complainant any longer to the position of assistant president pursuant to the Bank's By-laws. On July 19, 1991, complainant was informed of her termination of employment from the Bank by Senior Vice President Benedicto L. Santos, in a letter the text of which is quoted in full: 'Dear Mrs. Reyes: After a thorough investigation and appreciation of the charges against you as contained in the Memorandum of the President dated March 8, 1991, the Fact Finding Committee which was created to investigate the commission and/or omission of the acts alluded therein, has found the following: 1. You have deliberately held the clearing of Checks Nos. 11728 and 11730 of Hongkong and Shanghai Banking Corporation in the total amount of US$224,650.00 by giving instructions to the collection clerk not to send the checks for collection. In view thereof, when the said checks were finally sent to clearing after the lapse of 15 months from receipt of said checks, they were returned for the reason 'Account closed.' To date, the value of said checks have not been paid by Filipinas Tyrom, which as payee of the checks, had been credited with their peso equivalent; 2. You tried to influence the decision of Atty. Pablo P. Magno, Bank legal counsel, by asking him to do something allegedly upon instructions of a Senior Vice President of the Bank or else lose his job when in truth and in fact no such instructions was given; and

3. You deliberately withheld from Mr. Santos, Senior Vice President, the advice given by the legal counsel of the Bank which Mr. Santos had asked you to seek. As a matter of fact, you even relayed a false advice which delayed further the sending of the two checks for collection. Likewise, you refused to heed the advice of the Bank's legal counsel to send the checks for collection. These findings have given rise to the Bank's loss of trust and confidence in you, the same being acts of serious misconduct in the performance of your duties resulting in monetary loss to the Bank. In view thereof, the Board has resolved not to re-elect you to the position of Assistant Vice President of the Bank. Accordingly, your services are terminated effective immediately. In relation thereto, your monetary and retirement benefits are forfeited except those that have vested in you.' In her position paper, complainant alleged that the real reason for her dismissal was her filing of the criminal cases against the bank president, the vice president and the auditors of the Bank, such filing not being a valid ground for her dismissal. Furthermore, she alleged that it would be self-serving for the respondent to state that she was found guilty of gross misconduct in deliberately withholding the clearing of the two dollar checks. She further alleged that she was not afforded due process as she was not given the chance to refute the charges mentioned in the letter of dismissal. Hence, she was illegally dismissed. On the other hand, respondent argues that there were substantial bases for the bank to lose its trust and confidence on the complainant and, accordingly, had just cause for terminating her services. Moreover, for filing the clearly unfounded suit against the respondent's officers, complainant is liable to pay 7 moral and exemplary damages and attorney's fees." The Court of Appeals found that the NLRC committed grave abuse of discretion in ruling that the dismissal of Reyes is valid. In effect, the Court of Appeals reinstated the judgment of the labor arbiter with modification as follows: "WHEREFORE, in the light of the foregoing, the decision appealed from is hereby REVERSED and SET ASIDE. In lieu thereof, judgment is hereby rendered ordering respondent Bank as follows: 1. To pay petitioner full backwages and other benefits from July 19, 1991 up to the finality of this judgment; 2. To pay petitioner separation pay equivalent to one (1) month salary for every year of service in lieu of reinstatement; and 3. To pay attorney's fee equivalent to ten (10%) percent of the total award. 8 SO ORDERED." Hence, the Bank's recourse to this Court contending in its memorandum that: "IN SETTING ASIDE THE DECISION DATED 24 MARCH 1997 AND THE RESOLUTION DATED 28 JULY 1998 OF THE NLRC AND REINSTATING WITH MODIFICATION THE DECISION DATED 20 JULY 1995 OF LABOR ARBITER CORNELIO L. LINSANGAN, THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED, IN VIEW OF THE FOLLOWING: I. IT IS THE SEC (NOW THE REGIONAL TRIAL COURT) AND NOT THE NLRC WHICH HAS ORIGINAL AND EXCLUSIVE JURISDICTION OVER CASES INVOLVING THE REMOVAL FROM OFFICE OF CORPORATE OFFICERS. II. EVEN ASSUMING ARGUENDO THAT THE NLRC HAS JURISDICTION, THERE WAS SUBSTANTIAL EVIDENCE OF RESPONDENT'S MISCONDUCT JUSTIFYING THE BANK'S LOSS OF TRUST AND CONFIDENCE ON (sic) HER. III. EVEN ASSUMING ARGUENDO THAT RESPONDENT WAS ENTITLED TO BACKWAGES, THE HONORABLE COURT OF APPEALS ERRED IN AWARDING UNLIMITED AND UNQUALIFIED BACKWAGES THEREBY GOING FAR BEYOND THE LABOR ARBITER'S DECISION LIMITING THE SAME TO THREE YEARS, WHICH DECISION 9 RESPONDENT HERSELF SOUGHT TO EXECUTE." In sum, the resolution of this petition hinges on (1) whether the NLRC has jurisdiction over the complaint for illegal dismissal; (2) whether complainant Reyes was illegally dismissed; and (3) whether the amount of back wages awarded was proper. On the first issue, petitioner seeks refuge behind the argument that the dispute is an intra-corporate controversy concerning as it does the non-election of private respondent to the position of Assistant Vice-President of the Bank which falls under the exclusive and original, jurisdiction of the Securities and Exchange Commission (now the Regional Trial Court) under Section 5 of Presidential Decree No. 902-A. More specifically, petitioner contends that complainant is a corporate officer, an elective position under the corporate by-laws and her non-election is an intra-corporate controversy cognizable by 10 the SEC invoking lengthily a number of this Court's decisions. Petitioner Bank can no longer raise the issue of jurisdiction under the principle of estoppel. The Bank participated in the proceedings from start to finish. It filed its position paper with the Labor Arbiter. When the decision of the Labor Arbiter was adverse to it, the Bank appealed to the NLRC. When the NLRC decided in its favor, the bank said nothing about jurisdiction. Even before the Court of Appeals, it never questioned the proceedings on the ground of lack of jurisdiction. It was only when the Court of Appeals ruled in favor of private respondent did it raise the issue of jurisdiction. The Bank actively participated in the proceedings before the Labor Arbiter, the NLRC and the Court of Appeals. While it is true that jurisdiction over the subject matter of a case may be raised at any time of the proceedings, this rule presupposes that laches or estoppel has not supervened. In this regard, Baaga vs. 11 Commission on the Settlement of Land Problems, is most enlightening. The Court therein stated: "This Court has time and again frowned upon the undesirable practice of a party submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction when adverse. Here, the principle of estoppel lies. Hence, a party may be estopped or barred from raising the question of jurisdiction for the first time in a petition before the Supreme Court when it failed to do so in the early stages of the proceedings." Undeterred, the Bank also contends that estoppel cannot lie considering that "from the beginning, petitioner Bank has consistently asserted in all its pleadings at all stages of the proceedings that respondent held the position of Assistant Vice President, an elective position which she held by virtue of her having been elected as such by the Board of Directors." As far as the records before this Court reveal however, such an assertion was made only in the appeal to the NLRC and raised again before the Court of Appeals, not for purposes of questioning jurisdiction but to establish that private respondent's tenure was subject to the discretion of the Board of Directors and that her non-reelection was a mere expiration of her term. The Bank insists that private respondent was elected Assistant Vice President sometime in 1990 to serve as such for only one year. This argument will not do either and must be rejected. It appears that private respondent was appointed Accounting Clerk by the Bank on July 14, 1963. From that position she rose to become supervisor. Then in 1982, she was appointed Assistant Vice-President which she occupied until her illegal dismissal on July 19, 1991. The bank's contention that she merely holds an elective position and that in effect she is not a regular employee is belied by the nature of her work and her length of service with the Bank. As earlier stated, she rose from the ranks and has been employed with the Bank since 1963 until the termination of her employment in 1991. As Assistant Vice President of the foreign department of the Bank, she is tasked, among others, to collect checks drawn against overseas banks payable in foreign currency and to ensure the collection of foreign bills or checks purchased, including the signing of transmittal letters covering the same. It has been stated that "the primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in

relation to the usual trade or business of the employer. Additionally, "an employee is regular because of the nature of work and the length of service, not 13 because of the mode or even the reason for hiring them." As Assistant Vice-President of the Foreign Department of the Bank she performs tasks integral to the operations of the bank and her length of service with the bank totaling 28 years speaks volumes of her status as a regular employee of the bank. In 14 fine, as a regular employee, she is entitled to security of tenure; that is, her services may be terminated only for a just or authorized cause. This being in truth a case of illegal dismissal, it is no wonder then that the Bank endeavored to the very end to establish loss of trust and confidence and serious misconduct on the part of private respondent but, as will be discussed later, to no avail. This brings us to the second issue wherein the Bank insists that it has presented substantial evidence to prove the breach of trust on the part of private respondent warranting her dismissal. On this point, the Court of Appeals disagreed and set aside the findings of the NLRC that Reyes deliberately withheld the release of the two dollar checks; that she is guilty of conflict of interest that she waived her right to due process for not attending the hearing; and that she was dismissed based on loss of trust and confidence. We quote pertinent portions of the decision, to wit: "FIRST: Respondent Bank heavily relied on the testimony and affidavit of Remittance Clerk Joven' in trying to establish loss of confidence. However, Joven's allegation that petitioner instructed her to hold the subject two dollar checks amounting to $224,650.00 falls short of the requisite proof to warrant petitioner's dismissal. Except for Joven's bare assertion to withhold the dollar checks per petitioner's instruction, respondent Bank failed to adduce convincing evidence to prove bad faith and malice. It bears emphasizing that respondent Bank's witnesses merely corroborate Joven's testimony. Upon this point, the rule that proof beyond reasonable doubt is not required to terminate an employee on the charge of loss of confidence and that it is sufficient that there is some basis for such loss of confidence, is not absolute. The right of an employer to dismiss employees on the ground that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause. For loss of trust and confidence to be valid ground for an employee's dismissal, it must be substantial and not arbitrary, and must be founded on clearly established facts sufficient to warrant the employee's separation from work (Labor vs. NLRC, 248 SCRA 183). SECOND. Respondent Bank's charge of deliberate withholding of the two dollar checks finds no support in the testimony of Atty. Jocson, Chairman of the Investigating Committee. On cross examination, Atty. Jocson testified that the documents themselves do not show any direct withholding (pp. 186-187, Rollo). There being conflict in the statement of witnesses, the court must adopt the testimony which it believes to be true (U.S. vs. Losada, 18 Phil. 90). THIRD. Settled is the rule that when the conclusions of the Labor Arbiter are sufficiently substantiated by the evidence on record, the same should be respected by appellate tribunals since he is in a better position to assess and evaluate the credibility of the contending parties (Ala Mode Garments, Inc. vs. NLRC, 268 SCRA 497). In this regard, the Court quotes with approval the following disquisition of Labor Arbiter Linsangan, thus: This Office has repeatedly gone over the records of the case and painstakingly examined the testimonies of respondent bank's witnesses. One thing was clearly established: that the legality of complainant's dismissal based on the first ground stated in respondent's letter of termination (exh. 25-J, supra) will rise or fall on the credibility of Miss Joven who undisputedly is the star witness for the bank. It will be observed that the testimonies of the bank's other witnesses, Analiza Castillo, Dante Castor and Antonio Ragasa pertaining to the non-release of the dollar checks and their corresponding transmittal letters were all anchored on what was told them by Ms. Joven, that is: she was instructed by complainant to hold the release of subject checks. In a nutshell, therefore, the issue boils down to who between complainant and Ms. Joven is more credible. After painstakingly examining the testimonies of Ms. Joven and respondent's other witnesses' this Office finds the evidence still wanting in proof of complainant's guilt. This Office had closely observed the demeanor of Ms. Joven while testifying on the witness stand and was not impressed by her assertions. The allegation of Ms. Joven in that her non-release of the dollar checks was upon the instruction of complainant Reyes is extremely doubtful. In the first place, the said instruction constitutes a gross violation of the bank's standard operating procedure. Moreover, Ms. Joven was fully aware that the instruction, if carried out, will greatly prejudice her employer bank. It was incumbent upon Ms. Joven not only to disobey the instruction but even to report the matter to management, if same was really given to her by complainant. Our doubt on the veracity of Ms. Joven's allegation even deepens as we consider the fact that when the non-release of the checks was discovered by Ms. Castillo the former contented herself by continuously not taking any action on the two dollar checks. Worse, Ms. Joven even impliedly told by Ms. Castillo (sic) to ignore the two checks and just withhold their release. In her affidavit Ms. Castillo said: '4. When I asked Cecille Joven what I was supposed to do with those checks, she said the same should be held as per instruction of Mrs. Reyes.' (Exh. "14", supra). The evidence shows that it was only on 16 May 1990 that Ms. Joven broke her silence on the matter despite the fact that on 15 November 1989, at about 8:00 p.m. the complainant, accompanied by driver Celestino Banito, went to her residence and confronted her regarding the non-release of the dollar checks. It took Ms. Joven eighteen (18) months before she explained her side on the controversy. As to what prompted her to make her letter of explanation was not even mentioned. On the other hand, the actions taken by the complainant were spontaneous. When complainant was informed by Mr. Castor and Ms. Castillo regarding the non-release of the checks sometime in November, 1989 she immediately reported the matter to Vice President Santos, Head of the Foreign Department. And as earlier mentioned, complainant went to the residence of Ms. Joven to confront her. In this regard, Celestino Bonito, complainant's driver, stated in his affidavit, thus: '1. Sometime on November 15, 1989 at about 7:00 o'clock in the evening, Mrs. Clarita Tan Reyes and I were in the residence of one Ms. Cecille Joven, then a Processing Clerk in the Foreign Department of Prudential Bank; 2. Ms. Cecille Joven, her mother, myself, and Mrs. Clarita Tan Reyes were seated in the sala when the latter asked the former, Ms. Cecille Joven, how it came about that the two dollar checks which she was then holding with the transmittal letters, were found in a plastic envelope kept day-to-day by the former; 3. Hesitatingly, Cecille Joven said: "Eh, Mother (Mrs. Tan Reyes had been intimately called Mother in the Bank) akala ko bouncing checks yon mga yon. 4. Mrs. Clarita Tan Reyes, upon hearing those words, was surprised and she said: "Ano, papaano mong alam na bouncing na hindi mo pa pinadadala: 5. Mrs. Cecille Joven turned pale and was not able to answer.' There are other factors that constrain this Office to doubt even more the legality of complainant's dismissal based on the first ground stated in the letter of dismissal. The non-release of the dollar checks was reported to top management sometime on 15 November 1989 when complainant, accompanied by Supervisor Dante Castor and Analiza Castillo, reported the matter to Vice President Santos. And yet, it was only on 08 March 1991, after a lapse of sixteen (16) months from the time the non-release of the checks was reported to the Vice President, that complainant was issued a memorandum directing her to submit an explanation. And it took the bank another four (4) months before it dismissed complainant. The delayed action taken by respondent against complainant lends credence to the assertion of the latter that her dismissal was a mere retaliation to the criminal complaints she filed against the bank's top officials. It clearly appears from the foregoing that the complainant herein has no knowledge of, much less participation in, the non-release of the dollar checks under discussion. Ms. Joven is solely responsible for the same. Incidentally, she was not even reprimanded by the bank.

12

FOURTH. Respondent Bank having failed to furnish petitioner necessary documents imputing loss of confidence, petitioner was not amply afforded opportunity to prepare an intelligent answer. The Court finds nothing confidential in the auditor's report and the affidavit of Transmittal Clerk Joven. Due process dictates that management accord the employees every kind of assistance to enable him to prepare adequately for his defense, including legal representation. 15 The issue of conflict of interest not having been covered by the investigation, the Court finds it irrelevant to the charge." We uphold the findings of the Court of Appeals that the dismissal of private respondent on the ground of loss of trust and confidence was without basis. The charge was predicated on the testimony of Ms. Joven and we defer to the findings of the Labor Arbiter as confirmed and adopted by the Court of Appeals on the credibility of said witness. This Court is not a trier of facts and will not weigh anew the evidence already passed upon by the Court of 16 Appeals. On the third issue, the Bank questions the award of full backwages and other benefits from July 19, 1991 up to the finality of this judgment; separation pay equivalent to one (1) month salary for every year of service in lieu of reinstatement; and attorney's fees equivalent to ten (10%) percent of the total award. The Bank argues, in the main, that private respondent is not entitled to full backwages in view of the fact that she did not bother to appeal that portion of the labor arbiter's judgment awarding back wages limited to three years. It must be stressed that private respondent filed a special civil action 17 for certiorari to review the decision of the NLRC and not an ordinary appeal. An ordinary appeal is distinguished from the remedy of certiorari under Rule 65 of the Revised Rules of Court in that in ordinary appeals it is settled that a party who did not appeal cannot seek affirmative relief other than the ones 18 granted in the decision of the court below. On the other hand, resort to a judicial review of the decisions of the National Labor Relations Commission in a 19 petition for certiorari under Rule 65 of Rules of Court is confined to issues of want or excess of jurisdiction and grave abuse of discretion. In the instant case, the Court of Appeals found that the NLRC gravely abused its discretion in finding that the private respondent's dismissal was valid and so reversed the same. Corollary to the foregoing, the appellate court awarded backwages in accordance with current jurisprudence. Indeed, jurisprudence is clear on the amount of backwages recoverable in cases of illegal dismissal. Employees illegally dismissed prior to the effectivity of Republic Act No. 6715 on March 21, 1989 are entitled to backwages up to three (3) years without deduction or qualification, while those illegally dismissed after are granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was 20 withheld from them up to the time of their actual reinstatement. Considering that private respondent was terminated on July 19, 1991, she is entitled to full backwages from the time her actual compensation was withheld from her (which, as a rule, is from the time of her illegal dismissal) up to the finality of this judgment (instead of reinstatement) considering that reinstatement is no longer feasible as correctly pointed out by the Court of Appeals on account of the strained relations brought about by the litigation in this case. Since reinstatement is no longer viable, she is also entitled to separation pay 21 equivalent to one (1) month salary for every year of service. Lastly, since private respondent was compelled to file an action for illegal dismissal with the 22 labor arbiter, she is likewise entitled to attorney's fees at the rate above-mentioned. There is no room to argue, as the Bank does here, that its liability should be mitigated on account of its good faith and that private respondent is not entirely blameless. There is no showing that private respondent is 23 partly at fault or that the Bank acted in good faith in terminating an employee of twenty-eight years. In any event, Article 279 of Republic Act No. 6715 clearly and plainly provides for "full backwages" to illegally dismissed employees.1wphi1.nt WHEREFORE, the instant petition for review on certiorari is DENIED, and the assailed Decision of the Court of Appeals, dated October 15, 1999, is AFFIRMED. SO ORDERED. 8. SECOND DIVISION [G.R. No. 140043. July 18, 2000] CARMELITA NOKOM, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, RENTOKIL (PHILS.) PAUL STEARN AND RUSSEL HARRIS, respondents. DECISION DE LEON, JR., J.: 96[1] 97[2] 98[3] Before us is a petition for review on certiorari of the Decision and Resolution of the Court of Appeals dated February 24, 1999, and September 6, 99[4] 100[5] 1999, respectively, in its affirmance of the Decision of the NLRC dated September 30, 1997 finding petitioner Carmelita Nokom as having been legally dismissed for loss of confidence from her employment with private respondent Rentokil (Phils.). The pertinent facts are as follows:

Petitioner Nokom was employed as a manager by private respondent Rentokil (Phils.) for its Healthcare Division effective August 1, 1994. As manager, she was responsible for managing the Healthcare Division in accordance with the policies of Rentokil and she reported directly to the General Manager, Framie Ong-dela Luna. Sometime in April 1996, private respondents Paul Stern and Russel Harris, Rentokils Area Director and Regional Finance Controller, respectively, received information that fictitious invoices were sent to Rentokil clients in the Healthcare Division whose contracts have already been terminated. The fictitious invoices were allegedly made to inflate the gross revenues of the Healthcare Division to make up for the shortfall in its target revenues for the year 1995. Because initial findings showed that petitioner Nokom, as Manager of the Healthcare Division, was involved in the anomaly, private respondents placed her on preventive suspension. Later on, it was found out that petitioner knew of the fraudulent activities which, as discovered by the new Finance Manager, continued in 1996. It was likewise discovered that there were fraudulent activities in the Pest Control Division which was also headed by Framie Ong-dela Luna. As a result of that discovery, the local general manager, Framie Ong-dela Luna, was also placed on preventive suspension and she was required to submit a written explanation on the fraudulent activities. Thereafter, private respondent Paul Stern informed petitioner of the findings of their auditor. Petitioner admitted the irregularities and, in her written explanation as required under the notice of preventive suspension, petitioner told Stern that she had no explanation and said that she was leaving her fate up to management. Petitioner also complained about acts committed by private respondent Russel Harris who allegedly forcibly opened and ransacked her office drawers sometime on April 20, 1996 thereby causing her to lose some valuables. During the hearing conducted by Rentokil management on May 13, 1996 to investigate the anomalies, petitioner failed to appear despite notice. After the 101[6] investigation, it was found out that petitioner was aware, tolerated and in fact participated in the production of fictitious invoices. Thus, on May 15, 102[7] 1996, petitioners employment was terminated in a letter of that date which stated: "Dear Carmelita, As you are aware, the Company sent to you on 18th April 1996 a memorandum relative to the fictitious invoices which were raised for Rentokil clients. You were given the opportunity to submit your written answer but you failed to do so. Moreover, you also failed to attend the scheduled hearing. The following were established: 1.....Fictitious invoices were sent to Rentokil clients in August and December of 1995, to the value of P7,114K, with purpose to fraudulently increasing the turnover and therefore the profit of the Healthcare Division. 2.....The Healthcare turnover in the first quarter of 1996 was adjusted manually to declare a higher turnover than had actually occurred by some P3,019K. 3.....You were aware, tolerated and in fact participated in the production of the fictitious invoices. The above points are fraudulent and cannot be tolerated. Accordingly, you are hereby terminated from your employment effective immediately. You are directed to return any company property that may still be in your possession. Yours faithfully, (Sgd.) Paul C. Stearn Area Director, Asia North" 103[8] In a letter dated June 6, 1996, Framie Ong-dela Luna was also given a letter of termination of her employment and which reads: "Dear MRS. DELA LUNA: You will recall that on 7 May 1996, you were required to submit a written explanation relative to report of Mr. David Stedman about the lack of senior management control on subordinate managers giving opportunity for the commission of fraud. In fact, fictitious invoices were sent to Rentokil clients to fraudulently increase the turnover to show profit for the Healthcare Division. The Healthcare turnover in the first quarter of 1996 was adjusted manually to declare higher turnover. In your written explanation dated 11 May 1996, you claim that your name was not stated or the person directly responsible with respect to the falsified invoices and others. Likewise, you claim that the resulting fraudulent reports were not under your direct supervision and control. Hearings were conducted and the final report of Mr. Stedman was shown to you and taking into account your explanation and the matters taken up during the hearings, the following were established: 1.....As Executive Vice President and General Manager (EVP & GM), you failed to oversee and ensure that all reports submitted to the Head Office are accurate. 2.....As EVP & GM, you failed to effectively supervise your subordinate managers resulting in their commission of fraud. 3.....The effect of the fraud was that the company under your control declared to the Rentokil Group some P7,114K is fictitious turnover and profit in the year of 1995. It also overdeclared its turnover in the first quarter of 1996 by P3,332K and its profit by P4,044. 4.....The portfolio of Healthcare was also overdeclared in the Management Account by potentially P15,181K. 5.....As a result of these actions, the trading result of 1996 will now be less by some P500K sterling. In view of the foregoing, you are hereby terminated from your employment effective immediately on the ground of gross neglect of duties resulting in the loss of trust and confidence. You are directed to return company properties that may still be in your possession. Very truly yours,

(Sgd.) Paul Stearn Area Director, Asia North" 104[9] On June 11, 1996, petitioner filed a complaint for illegal suspension, illegal dismissal and non-payment of salaries against Rentokil before Labor Arbiter Eduardo J. Carpio and prayed for her reinstatement, payment of backwages, damages and attorneys fees. On the other hand, Framie Ong-Dela Luna filed 105[10] 106[11] a separate complaint for illegal dismissal against Rentokil. On May 30, 1997, Labor Arbiter Carpio rendered a joint decision in favor of petitioner and Framie Ong- Dela Luna and held: "WHEREFORE, judgment is hereby rendered declaring the employment termination of both complainants as illegal and ordering respondents to immediately reinstate them to their former position (sic) with full backwages from the time of their employment termination up to March 31, 1997 in the amount of: 1. CARMELITA NOKOM ---------- Php400,050.00 2. FRAMIE ONG-DELA LUNA-----Php682,366.38 which amounts of backwages are still subject to further adjustment, until complainants payroll or physical reinstatement. Respondent (Rentokil) is further ordered to pay each complainant the sum of Php100,000.00 for moral damages and Php50,000.00 for exemplary damages, plus 10% of the total judgment award by way of attorneys fees. SO ORDERED." 107[12] On appeal to the NLRC, a Decision was rendered which reversed and set aside the decision of Labor Arbiter Carpio and dismissed the complaints for being without merit. In the case against Nokom, it held that "one does not have to be endowed with an exceptional intelligence to be convinced that the subject managerial employee was directly involved in the uncovered fictitious invoicing in 1995 and in the fraudulent adjustment of Healthcare turnover in the first quarter of 1996. When complainant refused to explain her side in writing as well as in the hearing scheduled for said purpose, she not only waived her right to due process as guaranteed by Article 277 (b) of the Labor Code, worse, she raised the presumption that she was guilty of the 108[13] infractions she was asked to explain about. x x x" Anent the case against Dela Luna, the NLRC ratiocinated that Dela Luna was dismissed not because of any evidence of her complicity or culpability vis--vis the subject fraudulent transactions, but rather, it was because as Executive Vice President and General Manager, she failed to oversee and ensure that all reports submitted to the Head Office are accurate and effectively supervise (her) subordinate managers resulting in their commission of fraud. These matters not only unquestionably serve as valid bases for an employers loss of trust on a managerial employee but worse, they were factual charges that 109[14] complainant Dela Luna failed to seriously refute." Further, the NLRC stated that it was not too late to entertain additional grounds justifying the dismissal of complainants, i.e., committing misstatement of trading expenses, abuse of personal expenses, appointment of relatives, related party transaction, authorization of financial documents, payroll and staff loans and misstatement of portfolio, because such grounds were introduced in the proceedings before the Labor Arbiter. The NLRC justified that if such grounds to dismiss can be validly entertained by it on appeal on the ground that Article 221 of the Labor Code provided that it was not bound by technical rules or even in a petition for new trial or a petition for relief from judgment after a decision has obtained finality, there is no reason why the Labor Arbiter should ignore the infractions which were not disputed by 110[15] complainants.

Petitioner Nokom then filed a petition for certiorari before the Court of Appeals and, in a decision dated February 24, 1999, the petition was dismissed for lack of merit and the assailed decision of the NLRC was affirmed. It held, among others, that "petitioners failure to detect and report to the respondent company the fraudulent activities in her division as well as her failure to give a satisfactory explanation on the existence of the said irregularities constitute fraud or willful breach of the trust reposed on her by her employer or duly authorized representative" one of the just causes in 112[17] 113[18] terminating employment as provided for by paragraph c, Article 283 of the Labor Code, as amended." Further, it held that petitioners bare, unsubstantiated and uncorroborated denial of her participation in the anomalies, and her adamant refusal to cooperate with and explain her side to the management of Rentokil is regrettable, thus, she not only waived her right to due process as guaranteed by Article 277 (b) of the Labor Code but worse, 114[19] she raised the presumption that she was guilty of the infraction she was asked to explain about. All in all, it was held that no grave abuse of discretion was committed by the NLRC in the issuance of its assailed decision because substantial evidence existed which supported the findings of the NLRC that, 115[20] indeed, petitioner Nokom was validly dismissed by private respondents for a legal and just cause. Petitioner thereafter filed a Motion for 116[21] Reconsideration but the same was denied for lack of merit in a Resolution dated September 6, 1999. 117[22] Hence, this petition. Petitioner Nokom raises two (2) issues, namely, (1) whether the Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction correctible by certiorari in concluding that petitioner was legally dismissed despite the overwhelming evidence to the contrary, and (2) 118[23] whether the Court of Appeals gravely abused its discretion in denying the petitioner the reliefs sought by her. 119[24] Private respondents interposed with this Court a Motion to Dismiss the petition on the ground that the petition was filed out of time and raised no 120[25] 121[26] question of law. In their Comment, private respondents citing Martires vs. Court of Appeals, et al. reiterated that the issues raised by petitioner

111[16]

did not fall within the purview of "questions of law" but rather, that they were allegations of "grave abuse of discretion" which were not the proper office 122[27] of appeal by certiorari under Rule 45. Private respondents averred that the Court of Appeals had already ruled that the NLRC did not commit any grave abuse of discretion in upholding the validity of petitioners dismissal from employment and that the NLRC correctly found more than enough 123[28] substantial evidence to justify its decision. Further, private respondents alleged that as gleaned from the issue raised by petitioner, it is apparent that petitioner seeks the re-evaluation by this Court of the sufficiency of evidence for petitioners dismissal from employment which is not the function of 124[29] appeal by certiorari inasmuch as this Court is not a trier of facts. They added that contrary to the assertion of petitioner, she was not denied due 125[30] process because the fact was that she refused to explain the existence of the anomalies in her division. Petitioner refused to submit her written 126[31] explanation and ignored the scheduled administrative hearing on May 13, 1996. Lastly, under the principle of command responsibility, private respondents contend that as Manager of the Healthcare Division, she exercised control and supervision on all transactions including the fraudulent production of falsified invoices in her division and that her unexplained failure to detect the anomalies and unjustified refusal to give her explanation 127[32] constitutes fraud and wilful breach of trust. 128[33] Public respondent NLRC likewise filed its Comment where it stressed that only questions of law may be raised in a petition for review on certiorari and not questions on grave abuse of discretion. Even assuming that such questions on abuse of discretion may be allowed, such ground does not exist in the case at bar because even if petitioner admitted that she had direct control and supervision over the division where the anomalies occurred, she 129[34] claimed that there was no evidence establishing her guilt in the fraudulent issuance of invoices. Anent the claim of petitioner that she was denied due process because she was in Mindoro when the investigation was held and that she was not given an opportunity to defend herself prior to her dismissal, the NLRC found and declared that: "Petitioners claim is without merit. The record reveals that as early as May 1996, Rentokils Area Director private respondent Paul Stern met with petitioner and informed her of the irregularities discovered in her division. Stern had in fact, reminded petitioner to submit her written explanation to these findings in the notice of preventive suspension served upon her. Petitioner, however, opted to remain silent and did not give any explanation. She 130[35] actually hid in Mindoro while the investigation was being conducted. At the outset, we must point out that while petitioner questions the alleged grave abuse of discretion of the appellate court, an error properly assignable only in a petition for certiorari under Rule 65 of the Revised Rules of Court, a close scrutiny of petitioners arguments reveal that, undisputably, at the core of the controversy is the legality of the dismissal of petitioner. The petition, not being meritorious, the same should be as it is hereby denied.

To constitute a valid dismissal from employment, two requisites must concur, namely: (a) the dismissal must be for any of the causes provided for in 131[36] Article 282 of the Labor Code 132[37] and (b) the employee must be afforded an opportunity to be heard and defend himself. In fine, prior to the dismissal of an employee by an employer, the cause for termination must be duly proven and fall under those enumerated in Article 282. Of equal importance is that prior to the dismissal of an employee, the requirements of due process must be met, that is, the employee concerned must be given both due notice and the opportunity to be heard and present his side. In the case at bar, petitioner held the position of Manager in the Healthcare Division. Her duties, among others, were to detect fraudulent activities and irregularities within her Division and thereafter report the same to management. Her position demands that she manage, control and take responsibility over activities in her department. It requires a high degree of responsibility that necessarily includes unearthing of fraudulent and irregular activities. This, she failed to do. Her bare, unsubstantiated and uncorroborated denial of her participation in the anomalies does not prove her innocence nor disprove her alleged guilt. On the contrary, such denial or failure to rebut the serious accusations hurled against her militate against her innocence and strengthened the adverse averments of private respondents. Indeed, it is a well-settled rule that when the evidence tends to prove a material fact which imposes a liability on a party, and he has it in his power to produce evidence which from its very nature must overthrow the case made against him if it is not founded on fact, and he refuses to produce such 133[38] evidence, the presumption arises that the evidence, if produced, would operate to his prejudice, and support the case of his adversary. The ordinary rule is that one who has knowledge peculiarly within his control, and refuses to divulge it, cannot complain if the court puts the most unfavorable 134[39] construction upon his silence, and infers that a disclosure would have shown the fact to be as claimed by the opposing party. Considering the possible effects of the charges against her, petitioner nevertheless chose to remain silent and deny the accusations hurled at her. She did not present evidence in her behalf to prove her innocence. To make matters worse, petitioners inaction or failure to submit her written report and her non-attendance of the scheduled administrative hearing do not speak well of her supposed innocence. She cannot hide under the guise of managements alleged failure to apprise her of the hearings because she was informed of the irregularities by private respondent Stern who also told her to submit her written explanation. Hence, she has only herself to blame. Time and again, this Court had occasion to reiterate the well-established rule that findings of fact by the Court of Appeals are conclusive on the parties and 135[40] are not reviewable by this Court. We find no compelling reason to disturb the factual findings of the Court of Appeals in the absence of any showing 136[41] that the present case falls under the exceptions under this rule. When supported by sufficient evidence, the findings of fact of the Court of Appeals affirming those of the trial court, are not to be disturbed on appeal. The rationale behind this doctrine is that review of the findings of fact of the Court of 137[42] Appeals is not a function that the Supreme Court normally undertakes. In the case at bar, we subscribe to the findings of fact of the Court of Appeals when it held: "Indeed, petitioners failure to detect and report to the respondent company *Rentokil+ the fraudulent activities in her division as well as her failure to give a satisfactory explanation on the existence of the said irregularities constitute "fraud or willful breach of the trust reposed on her by her employer or duly authorized representative" one of the just causes in terminating employment as provided for by paragraph c, Article 283 of the Labor Code, as amended. Concomitantly, petitioners actuations betrayed the utmost trust and confidence reposed on her by the respondent company. We cannot, therefore, compel private respondents to retain the employment of herein petitioner who is shown to be lacking in candor, honesty and efficiency required of her position.

Loss of confidence is a valid ground for dismissing an employee and proof beyond reasonable doubt of the employees misconduct is not required to dismiss him on this charge (Del Carmen v. NLRC, 203 SCRA 245[1991+). It is enough that there be some basis for such loss of confidence, or that the employer has reasonable grounds to believe, if not entertain the moral conviction that the employee concerned is responsible for the misconduct and that the nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded of his position (Vallende v. National Labor Relations Commission, 245 SCRA 662 [1995]). x....x....x" 138[43] As enunciated in the recent case of Vitarich Corporation et al. v. National Labor Relations Commission et al., the guidelines for the application of the doctrine of loss of confidence are: a.....loss of confidence should not be simulated; b.....it should not be used as a subterfuge for causes which are improper, illegal or unjustified; c.....it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and d.....it must be genuine, not a mere afterthought to justify earlier action taken in bad faith. Petitioner was holding a managerial position with Rentokil. As manager of the Healthcare Division, petitioner was duty-bound to perform her functions in accordance with company policies. During her incumbency, fraudulent activities transpired for which she must be held accountable. Petitioner has not presented any persuasive evidence or argument to convince us otherwise. True it is that an employer enjoys a wide latitude of discretion in the promulgation of company rules and regulations that at times become the root of abuse by management. In the present case, however, we find that the policies of private respondent Rentokil are fair and reasonable, the decision to terminate the employment of petitioner was justified and appropriate in the light of the acts committed by her, and considering that the requirements of the constitutional right to due process were duly accorded to petitioner. WHEREFORE, the petition is hereby DENIED. The Decision and the Resolution dated February 24, 1999 and September 6, 1999, respectively, of the Court of Appeals in CA-G.R. SP 50002, are AFFIRMED. No pronouncement as to costs. SO ORDERED. 9. FIRST DIVISION [G.R. No. 125212. June 28, 1999] SURIGAO DEL NORTE ELECTRIC COOPERATIVE AND/OR EUGENIO BALUGO/CIRIACO MESALUCHA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (5th DIVISION) AND ELSIE ESCULANO, respondents. DECISION YNARES-SANTIAGO, J.: lxxiii[1] This special civil action for Certiorari seeks to annul the Resolution, dated January 31, 1996, of the Fifth Division of the National Labor Relations Commission in NLRC Case No. M-001940-94, ordering petitioner cooperative to reinstate private respondent Elsie Esculano (hereinafter referred to as lxxiv[2] private respondent), without loss of seniority rights and to pay backwages and allowances, plus attorneys fees; as well as the Resolution, dated April lxxv[3] 30, 1996, denying petitioners Motion for Reconsideration. The challenged ruling reversed the Decision of the Labor Arbiter, dated March 7, 1994, which declared private respondents dismissal as valid and legal. The facts of the case are as follows: lxxvi[4] On December 3, 1991, a former employee of petitioner cooperative, Cosette O. Quinto, sent a letter of even date addressed to its General Manager, petitioner Eugenio A. Balugo, with copies furnished to petitioner cooperatives Board of Directors and National Electrification Administration Project Supervisor, Engr. Decoroso B. Padilla. The contents of her letter are hereby reproduced, as follows December 3, 1991 MR. EUGENIO A. BALUGO General Manager SURNECO Surigao City Dear General Manager: This is in reference to my nine (9) years continuous service with SURNECO. Last 1988, I decided to be separated with (sic) SURNECO due to my pressing personal problems. Considering my faithful and loyal services with SURNECO, I am supposed to be entitled with (sic) separation benefits and incentives. Hence, I am humbly requesting for consideration that I may be granted with separation benefits and all other incentives due for (sic) me. Hoping for your very fine consideration. Thank you very much. Very truly yours, (signed) COSETTE O. QUINTO cc: 1. The Board of Directors SURNECO 2. Engr. Decoroso B. Padilla NEA Project Supervisor No action was taken on this matter by either petitioner Balugo, petitioner cooperatives Board of Directors or NEA Project Supervisor. Nearly four months later, or on March 30, 1992, private respondent Elsie Esculano, being then the Personnel Officer of petitioner cooperative sent a lxxvii[5] letter to petitioner Balugo regarding Quintos letter-request, after the latter asked her to review her case. Attached to her letter was a report containing her findings and recommendations. Copies of the letter were furnished the following: file, PS and 201.

In her attached report, private respondent concluded that petitioner cooperative had not properly accorded Quinto due process before terminating her services, enumerating the circumstances evidencing such lack of due process. Thus, private respondent recommended that petitioner cooperative grant Quinto separation pay, otherwise, the latter would be entitled to reinstatement without loss of seniority rights and other privileges and benefits. lxxviii[6] Meanwhile, on July 2, 1992, with no action taken by petitioner cooperative on her letter-request, Quinto filed a Complaint for Illegal Dismissal with prayer for Reinstatement and Payment of Full Backwages, Damages and Attorneys Fees against petitioner cooperative before the Surigao Provincial Extension Unit of the Department of Labor and Employment. Without a doubt, the Complaint was based largely on the report submitted to petitioner lxxix[7] Balugo by private respondent. Indeed, attached to Quintos Position Paper was a copy of said report. The Position Paper, itself, extensively quoted portions of private respondents report, particularly her finding of lack of due process in the termination of Quinto and her recommendation for the grant of separation pay. While not quoted, the narration of antecedent facts showing illegal dismissal as well as the grounds supporting the finding thereof, appearing in private respondents report, were also adopted by Quinto. Quintos case was, however, dismissed on October 22, 1992, for being barred by prescription. On account of the filing of the illegal dismissal case against petitioner cooperative, based largely on private respondents report, petitioner Balugo issued a lxxx[8] Memorandum to private respondent on November 27, 1992, the contents of which are hereby reproduced, as follows 27 November 1992 MEMORANDUM NO. 063 Series of 1992 To : MS. ELSIE B. ESCULANO Personnel Officer SUBJECT : Submission of Written Explanation Appended to the complaint of Ms. Cosette O. Quinto against the company was your internal memorandum addressed to the undersigned. You were never commissioned by management to make a review of Ms. Quintos case as the company felt that the latter had already admitted her dismissal from the service as evidenced by her letter of December 3, 1991. For no apparent reason, and with no one authorizing you to review the case of said Miss Quinto, you proceeded to do so. What made the matter worse is that you apparently furnished Miss Quinto with a copy thereof. Necessarily, Miss Quinto utilized your alleged recommendation against the company. Fortunately, however, the NLRC dismissed the complaint. It is, however, on appeal but the appeal is still grounded on your unauthorized recommendation. Your unauthorized action has dragged the company into a protracted litigation not to mention the unnecessary expense that the company had to spend to defend itself. In this connection, therefore, you are directed to explain in writing within 72 hours from receipt hereof why no disciplinary action shall be taken against you for acts unbecoming of a ranking employee and for acts prejudicial to the best interest of the company. For compliance. (signed) EUGENIO A. BALUGO General Manager Noted by: CIRIACO B. MESALUCHA NEA Project Supervisor Cc: The SURNECO Board Atty. Catre DOLE file 201 file lxxxi[9] Private respondent submitted her Written Explanation to petitioner Balugo on December 2, 1992. She reasoned out that it was inherent in her job as Personnel Officer to assist Management in formulating and evaluating plans, policies and procedures on personnel related matters, and recommend to Management and (the) Board of Directors wage, salary and other benefits. She referred to her case review as a feedback on a problem with the corresponding recommendation to Management to take corrective measures. Private respondent also drew attention to the fact that management took eight (8) months to react to her review of Quintos case and opined that perhaps she was being used as a scapegoat. She also said that the protracted litigation could have been avoided if management had exercised its prerogatives in strategic planning and decision-making. To be sure, the tone of private respondents Written Explanation was far from apologetic. lxxxii[10] On December 15, 1992, petitioner Balugo wrote another letter to private respondent requesting her to inform the office whether or not she had additional evidence to present apart from her written explanation. She was there informed that if management does not hear from her within three (3) days, they would consider her case submitted for resolution. lxxxiii[11] Private respondent sent in her reply on December 18, 1992, stating that she had no idea that she had a case and requesting for information thereon. Petitioner cooperative, however, through its Board of Directors, proceeded to act on the case of private respondent and on February 6, 1993, issued a lxxxiv[12] Resolution terminating the services of the latter. The Board found that private respondent furnished Quinto with a copy of her internal memorandum addressed to petitioner Balugo, noting that private respondent never denied having done the same; that as a result of such internal memorandum, Quinto was emboldened to file a case for illegal dismissal against the cooperative, using the memorandum of private respondent as basis; that this dragged the cooperative into an unnecessary labor case and exposed it to tremendous expenses for its defense. According to the Board, it was lamentable that private respondent, whose duty was to protect the interest of the cooperative, was the one who provided Quinto with weapons and ammunition to wage a war against the cooperative. The Board also found that private respondent prepared the said memorandum without having been commissioned by management; that she undertook a review of Quintos case simply because the latter personally talked to her to review the same. According to management, the review, apart from being unauthorized, was unnecessary since as early as December 3, 1991, Quinto herself admitted that she decided to be separated from Surneco due to (my) pressing personal problems. The Board, thus, found private respondents act of releasing and/or divulging the contents of her internal memorandum to Quinto as contrary to norms of decency as far as protection of the interest of the cooperative is concerned as well as violative of Section 9 of their Code of Ethics and Discipline, which provides as follows lxxxv[13] 9-2.2 Without proper authority, revealing, releasing or divulging confidential information to individuals other than authorized persons.

On the other hand, it found private respondents unauthorized review of the case of Quinto, merely on the basis of the latters request, as violative of Section 10 of their Code of Ethics and Discipline, which provides as follows 10-2.1 Having any engagement, participation or involvement, direct or indirect, in any transaction involving any person, firms, corporation or any lxxxvi[14] business, or other coops, where such act is in conflict with or is improper/undesirable to interest of the REC. The Board concluded that Certainly, advancing the interest of Miss Quinto instead of the Cooperative is an undesirable or improper conduct which merits the imposition of sanction. The respondent is a confidential officer of the Cooperative being the Personnel Officer. Her actuations as aforecited does not merit the continuation of the confidence reposed on her as such. In fine, we find the respondent guilty of the offense charged, and considering the prejudice she has caused to the Cooperative, this Board hereby imposes lxxxvii[15] the penalty of dismissal from the service effective 17 February 1993. lxxxviii[16] The Board Resolution was followed by a letter from petitioner Balugo, dated February 15, 1993, notifying private respondent that she had been terminated from the service for cause, effective at the close of office hours on February 19, 1993. On March 2, 1993, private respondent filed a Complaint for illegal dismissal, reinstatement with backwages, service incentive leave and moral damages lxxxix[17] before the Surigao Provincial Extension Unit, Regional Office No. 10, Department of Labor and Employment. A similar Complaint was filed on April 30, 1993 by private respondent with the Sub-Regional Arbitration Branch No. X of the NLRC, as Case No. SRAB 10-04-01020-93. Proceedings were had on this second Complaint. xc[18] Petitioner cooperative filed its Answer to the Complaint on May 12, 1993 and, with no settlement arrived at, the Labor Arbiter directed the parties to xci[19] xcii[20] file their respective Position Papers. Additionally, private respondent filed her Complainants Affidavit Re: Damages, in support of her prayer for xciii[21] moral damages. To this, petitioner cooperative filed its Comments and Rejoinder. xciv[22] On March 7, 1994, the Labor Arbiter, Hon. Marissa Macaraig-Guillen, rendered her Decision declaring private respondents dismissal as valid and legal but ordering petitioner cooperative to pay the latter P3,000.00 as financial indemnity for not having provided private respondent with a hearing to air her side and for not complying with the one month notice requirement provided for in Batas Pambansa Blg. 130. A copy of the Decision was received by private respondents counsel, Atty. Enrique Tandan, on March 22, 1994. On April 5, 1994, he filed, by registered xcv[23] xcvi[24] mail, a Notice of Appeal, which was one day late from the last day to file appeal. On April 8, 1994, however, Atty. Tandan filed a Manifestation explaining that he was not able to file the Notice on April 4, 1994, a Monday, because typhoon Besing hit Surigao City on that date, for which reason the xcvii[25] Post Office was closed. Attached to his Manifestation was a Certification issued by Zosima M. Lagura, Officer-in-Charge of the Philippine Postal Corporation, Region X, Surigao City, confirming that they had no official transaction on April 4, 1994 because of typhoon Besing. xcviii[26] On July 29, 1994, however, the NLRC dismissed the appeal of private respondent for having been filed out of time. Private respondent promptly filed xcix[27] a Motion for Reconsideration, dated September 12, 1994, in which she reiterated the contents of their aforesaid Manifestation as well as the Certification from the Surigao Post Office. c[28] Finally, on January 31, 1996, the NLRC issued its now questioned Resolution reinstating private respondents appeal, setting aside the Decision of the Labor Arbiter and entering new judgment declaring private respondent as having been illegally dismissed. The dispositive portion of the questioned Resolution provides, as follows WHEREFORE, foregoing considered, the decision appealed from is hereby SET ASIDE AND VACATED and a new one entered declaring complainant illegally dismissed. Respondent is directed to reinstate complainant to her previous position without loss of seniority rights, and to pay backwages and allowances computed from the date of her dismissal until duly reinstated, plus attorneys fees equivalent to 10% of the total monetary awards. ci[29] SO ORDERED. cii[30] ciii[31] Petitioners filed their Motion for Reconsideration dated February 23, 1996, to which private respondent filed her corresponding Opposition dated civ[32] February 29, 1996. On April 30, 1996, the NLRC issued its second questioned Resolution denying petitioners Motion for Reconsideration. cv[33] Hence, the instant Petition charging the NLRC with having acted with grave abuse of discretion in reinstating the appeal of private respondent and in declaring private respondents dismissal as illegal. On the first issue, We find that the NLRC did not abuse its discretion in reinstating the appeal of private respondent. Petitioners argue that since private respondents Notice of Appeal was filed late, the same should not have been entertained. In Kathy-O Enterprises vs. National Labor Relations cvi[34] Commission, however, it was explained that -When proper, no serious impediment bars the allowance of tardy appeals under the Rules of Court in recognition of this Courts inherent power to suspend adjective rules. It is a different matter, however, when the period to appeal is provided by statute, as in labor cases. For obvious reasons, this Court cannot ordinarily suspend the statutes operation. Article 223 of the Labor Code expressly provides that: *d+ecisions, awards or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards or orders. While Section 1 of Rule VI of the New Rules of Procedure of the National Labor Relations Commission provides that *I+f the 10th day falls on a Saturday, Sunday or a holiday, the last day to perfect the appeal shall be the next working day. Nevertheless, if only to be able to dispense with substantial justice, strict observance of the period to appeal may not be exacted. Thus, in Firestone Tire and Rubber Co. of the Philippines v. Lariosa (148 SCRA 496, 504), an appeal in a labor dispute was given due course despite the lapse of fourteen (14) days from notice of the decision, due to the fact that the Notice of Decision received by Lariosas lawyer advised the parties that the appeal could be taken to the NLRC within ten (10) working days - not calendar days from notice of the decision. For the same reason was the appeal in Chong Guan Trading v. NLRC (172 SCRA 831, 839) allowed. While in City Fair Corporation v. NLRC (243 SCRA 572, 576), we ruled that the NLRC did not commit grave abuse of discretion when it entertained an appeal filed one (1) day late considering that the facts and circumstances of the case warrant liberality considering the amount and the issue involved. (underscoring, Ours) As in City Fair Corporation, cited above, We find the NLRCs reinstatement of the appeal filed merely one day late far from an abuse of discretion. Liberality in labor cases, alone, considering further that the issue is illegal termination, justifies such reinstatement. Then, too, private respondent adequately explained the one-day delay in filing as occasioned by typhoon Besing, which caused the Surigao Post Office to th close on the fateful 10 or last day for her to file her appeal. Petitioners contention that the Certification filed by private respondent in support of her explanation should not be given evidentiary value for not having been signed by the issuing Officer-in-Charge of the Surigao City Post Office, fails in light of cvii[35] the duly signed copy We find in the records before the NLRC. We now come to the more important issue of whether or not petitioner cooperative was guilty of illegal dismissal. In dismissing private respondent, petitioner cooperative relied on the following two grounds: (1) serious misconduct based on private respondents unauthorized review of Quintos case; and (2) loss of confidence because of private respondents breach of the rules of confidentiality, by furnishing Quinto a copy of her internal cviii[36] memorandum. After a thorough examination of the records, We find no grave abuse of discretion on the part of the NLRC in finding that private respondent was illegally dismissed.

First, there is no basis for petitioner cooperatives charge of serious misconduct on the part of private respondent. Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies cix[37] wrongful intent and not mere error in judgment. Tested by these standards, private respondents review of Quintos case hardly qualifies as serious misconduct. cx[38] As acknowledged by petitioners, private respondent, as Personnel Officer, holds a managerial position. As such, her authority is not merely routinary cxi[39] or clerical in nature but requires independent judgment. Indeed, those occupying managerial positions are considered vested with a certain amount of cxii[40] discretion and independent judgment. It is established that Quinto was a former employee of petitioner cooperative who was asking for a reconsideration of her request for separation pay benefits. It cannot be denied that this matter, i.e., recommendations for separation pay benefits, is within private respondents line of work as Personnel Officer. Thus, when Quinto approached private respondent to request for assistance on her case, it was acceptable for the latter to act thereon even if the first request of Quinto was not addressed to her but to the General Manager. As Personnel Officer, private respondent could very well take charge of matters involving employees, even former ones, and proceed to make recommendations thereon. This is precisely what private respondent did. To require private respondent to wait for management authorization before acting on matters already obviously within her job jurisdiction would be tantamount to making her a mere rank and file employee stripped of discretionary powers. Petitioners claim that in proceeding with her alleged unauthorized review of Quintos case, private respondent violated Section 10-2.1 of their Code of Ethics which proscribes employees from (H)aving any engagement, participation or involvement, direct or indirect, in any transaction involving any person, firms, corporation or any business, or other coops, where such act is in conflict with or is improper/undesirable to interest of the cxiii[41] (corporation). We find this argument devoid of merit. Indeed, there is no transaction, whatsoever, involved in private respondents review of Quintos case. Neither may private respondent be absolutely proscribed from taking the side of labor, Quinto in this case, in her review of personnel cases. All told, We agree with the NLRC that private respondent functioned within the sphere of her job when she acted on Quintos request and drew recommendations thereon. Stated simply, private respondent was merely doing her job. We fail to see any transgression of established and definite rule of action, any forbidden act, any dereliction of duty, willful in character, nor wrongful intent on the part of private respondent as to hold her liable for serious misconduct. Neither do We find private respondents dismissal justified on the basis of loss of confidence. To be a valid ground for dismissal, loss of trust and cxiv[42] confidence must be based on a willful breach of trust and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employers arbitrariness, whims, caprices or suspicion, otherwise, the employee would eternally remain at the mercy cxv[43] of the employer. Petitioners basis for claiming loss of confidence is private respondents alleged act of furnishing Quinto a copy of her internal memorandum. We have searched the records and found no direct proof that private respondent did furnish a copy of her report to Quinto. On the other hand, We agree with the NLRC that Quinto could have very well obtained her copy from other sources. In other words, that private respondent allowed Quinto to obtain a copy of her report has not been clearly established. As such, petitioners cannot validly rely on loss of confidence as a ground to dismiss private respondent. It could be argued that, as found by the Labor Arbiter, private respondent should have maintained the secrecy and confidentiality of her report by cxvi[44] furnishing the same only to petitioner Balugo. Yet, in furnishing file, PS and 201 with copies of her report, private respondent can hardly be said to have circulated the same, as concluded by the Labor Arbiter. If at all, private respondent can only be said to have acted carelessly, thoughtlessly, heedlessly or inadvertently, and not intentionally, knowingly, purposely, or without justifiable excuse as to make her guilty of a willful breach of trust. WHEREFORE, premises considered, the Petition is DISMISSED for lack of merit. The Resolutions of the National Labor Relations Commission dated January 31, 1996 and April 30, 1996 are hereby AFFIRMED. No pronouncement as to costs. SO ORDERED. 10. SECOND DIVISION [G.R. No. 121621. May 3, 1999] WESTIN PHILIPPINE PLAZA HOTEL, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION) and LEN RODRIGUEZ, respondents. DECISION QUISUMBING, J.: cxvii[1] Petitioner seeks to annul the Decision of the Third Division of the National Labor Relations Commission dated March 29, 1995 in NLRC NCR Case No. 00-07-04820-93, and its Resolution dated June 22, 1995 denying petitioners motion for reconsideration. Private respondent was continuously employed by petitioner in various capacities from July 1, 1977 until his dismissal on February 16, 1993. Initially hired as pest controller, he was later posted as room attendant. Next he served as bellman, until he was finally assigned as doorman in November, 1981, and stayed in that position until his employment was terminated by petitioner. On December 28, 1992, private respondent received a memorandum from the management transferring him from doorman to linen room attendant in the Housekeeping Department effective December 29, 1992. The position of doorman is categorized as guest-contact position while linen room attendant is a non-guest contact position. The transfer was allegedly taken because of the negative feedback on the manner of providing service to hotel guests by private respondent. This assessment was primarily based on the report of professional shoppers engaged by petitioner to evaluate and review the various services of the hotel and its personnel. Earlier, private respondent had figured in altercations with drivers of taxicabs servicing petitioners guests. Instead of accepting his new assignment, private respondent went on vacation leave from December 29, 1992, to January 16, 1993. In the meantime, the President of the National Union of Workers in Hotels, Restaurants and Allied Industries (NUWHRAIN) appealed to management concerning private respondents transfer. In her response, Ms. Merceditas Santos, petitioners director for human resources development, clarified that private respondents transfer is merely a lateral movement. She explained that management believed that private respondent was no longer suited to be in a guest-contact position, but there was no demotion in rank or pay. When private respondent reported back to work, he still did not assume his post at the linen room. Notwithstanding several reminders from the personnel department and even his union, private respondent refused to report to his new work station. Thus, on February 11, 1993, private respondent was served with a memorandum asking him to explain in writing why no disciplinary action should be taken against him for insubordination. The memorandum noted that while private respondent regularly came to the hotel everyday, he just stayed at the union office. Private respondent was again reminded to report to his new job otherwise he would be clearly defying a lawful order. In his reply private respondent, however, merely questioned the validity of his transfer without giving the required explanation. On February 16, 1993, petitioner terminated private respondents employment on the ground of insubordination. Feeling aggrieved, private respondent filed with the Department of Labor and Employment which later indorsed to the NLRC for appropriate action a complaint for illegal dismissal against

petitioner. In a decision dated June 16, 1994, the labor arbiter declared that the dismissal was legal. Accordingly, the complaint was dismissed for lack of merit. On appeal, public respondent reversed the judgment of the labor arbiter. In its decision, it declared that the intended transfer was in the nature of a cxviii[2] disciplinary action. It held that there was no just cause in dismissing private respondent and disposed of the case as follows: WHEREFORE, premises considered, the appealed decision is hereby VACATED and a new one entered with the following dispositions: a) Respondent is hereby ordered to pay backwages from February 16, 1993 to the date of this decision; and b) To pay complainant separation pay equivalent to one (1) month pay for every year of service, in lieu of reinstatement. All other claims are dismissed for lack of merit. cxix[3] SO ORDERED. Its motion for reconsideration having been denied, petitioner filed this instant petition. The fundamental issue to be resolved in this case is whether or not public respondent gravely abused its discretion in ruling that there was no just and valid cause for dismissing private respondent. And the pivotal query is whether private respondent was guilty of insubordination or not? Petitioner contends that private respondents continued refusal to report to his new work assignment constituted gross insubordination. It avers that the transfer of private respondent was a valid exercise of its management prerogative. The contention of petitioner is meritorious. The labor arbiters decision, dated June 16, 1994, is amply supported by substantial evidence and prevailing jurisprudence. It is error as well as grave abuse of discretion on public respondents part to hold otherwise. Under Article 282 (a) of the Labor Code, as amended, an employer may terminate an employment for serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. But disobedience to be a just cause for dismissal envisages the concurrence of at least two (2) requisites: (a) the employees assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and, (b) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the cxx[4] duties which he has been engaged to discharge. In the present case, the willfulness of private respondents insubordination was shown by his continued refusal to report to his new work assignment. Thus, upon receipt of the order of transfer, private respondent simply took an extended vacation leave. Then, when he reported back to work, he did not discharge his duties as linen room attendant despite repeated reminders from the personnel office as well as his union. Worse, while he came to the hotel everyday, he just went to the union office instead of working at the linen room. More than that, when he was asked to explain why no disciplinary action should be taken against him, private respondent merely questioned the transfer order without submitting the required explanation. Based on the foregoing facts, private respondents intransigence was very evident. On the issue of legality and reasonableness of the order of transfer, it must be emphasized that this Court has recognized and upheld the prerogative of management to transfer an employee from one office to another within the business establishment, provided that there is no demotion in rank or a diminution of his salary, benefits and other privileges. This is a privilege inherent in the employers right to control and manage its enterprise cxxi[5] effectively. Besides, it is the employers prerogative, based on its assessment and perception of its employees qualifications, aptitudes and competence, to move him around in the various areas of its business operations in order to ascertain where the employee will function with utmost efficiency and maximum productivity or benefit to the company. An employees right to security of tenure does not give him such a vested right in his cxxii[6] position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. Indeed, petitioner is justified in reassigning private respondent to the linen room. Petitioners right to transfer is expressly recognized in the collective bargaining agreement between the hotel management and the employees union as well as in the hotel employees handbook. The transfer order was issued in the exercise of petitioners management prerogative in view of the several negative reports vis--vis the performance of private respondent as doorman. It was a lateral movement as the positions of doorman and linen room attendant are equivalent in rank and compensation. It was a reasonable relocation from a guest contact area to a non-guest contact area. Thus, public respondents observation that private respondent was demoted because the position of doorman is more glamorous than that of a linen room attendant is pure conjecture. Public respondents conclusion that the transfer was punitive in character could not be sustained for lack of substantial basis. Finally it must be stressed that to sanction the disregard or disobedience by employees of a reasonable rule or order laid down by management would be disastrous to the discipline and order within the enterprise. It is in the interest of both the employer and the employee to preserve and maintain order and discipline in the work environment. Deliberate disregard of company rules or defiance of management prerogative cannot be countenanced. This is not to say that the employees have no remedy against rules or orders they regard as unjust or illegal. They can object thereto, ask to negotiate thereon, bring proceedings for redress against the employer. But until and unless the rules or orders are declared to be illegal or improper by competent authority, the cxxiii[7] employees ignore or disobey them at their peril. In the case at bar, private respondent was repeatedly reminded not only by management but also by his union to report to his work station but to no avail. His continued refusal to follow a legal order brought on the fit consequence of dismissal from his position for which management could not be justly faulted. WHEREFORE, the petition is hereby GRANTED. The assailed decision of the National Labor Relations Commission is hereby SET ASIDE. The decision of the Labor Arbiter dated June 16, 1994, is REINSTATED. No pronouncement as to costs. SO ORDERED. 11. SECOND DIVISION [G.R. No. 120450. February 10, 1999] ASSOCIATED LABOR UNIONS - TUCP and RENATO FELIZARDO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, REPUBLIC FLOUR MILLS, GROUP OF COMPANIES and/or SELECTA ICE CREAM CORPORATION and BEN T. MAKIL, respondents. DECISION MENDOZA, J.: This is a petition for certiorari to annul the decision of the National Labor Relations Commission in NLRC NCR 00-09-06075-93 on the ground that it was rendered with grave abuse of discretion. Petitioner Renato Felizardo was employed at respondent Republic Flour Mills-Selecta Ice Cream Corporation as jet printer operator on November 16, 1991. He was dismissed from employment on September 13, 1993 for dishonesty and theft of company property. He and petitioner Associated Labor Union-TUCP, of which he is the secretary, filed a complaint for illegal dismissal, unfair labor practice, and non-payment of 13th month pay against respondent company. He was ordered reinstated without backwages by the Labor Arbiter, but the NLRC reversed the said decision and dismissed his complaint. Hence, this petition. The facts are as follows:

On September 12, 1993, at around 7 oclock in the morning, petitioner was apprehended by a security guard manning respondent companys gate while bringing out a pair of boots, one (1) piece of aluminum container, and fifteen (15) pieces of hamburger patties. During the investigation conducted the cxxiv[1] same day by the companys security services, he gave the following statement written in Filipino: SA KINAUUKULAN, Ako po si G. Renato Felizardo, 22 anyos at kasalukuyang nakatira sa Cainta, Rizal. Ako po ay isang regular employee [ng] SELECTA Production Dept. Ako po ay nahulihan ng isang coloring container, 15 pirasong patties hamburger dito sa SELECTA Gate kasama ang isang pair na boots. Ang mga nabanggit na kagamitan ay walang kaukulang dokumento o papel subalit ito ay batid ni Mr. Orpilla na ilalabas ko ang mga ito. Ako po ay nasita ni Sg. Manolito Ojana bandang 7:45 ng umaga, 12 Setyembre 1993 dito sa SELECTA Gate. Ang pag-aming ito ay kusang loob kong inihayag kay Sg. Richard M. Torino. (Sgd.) R. FELIZARDO On September 13, 1993, he was placed under preventive suspension pending investigation of the incident by the company. On the same day, he wrote a cxxv[2] letter to his supervisor, D.M. Orpilla, Jr., asking for forgiveness. The letter, written in Filipino, reads: BOSS. Pasensya na kayo, alam ko magagalit kayo sa akin pero hindi ko rin kagustuhan ito, iu*u+wi ko sana yong Bota ko kasi baha sa aming saka yong coloring container, saka iyong konting natira na patties pero nasita ako ng Guardia. Kaya sinabi ko yong patties eh, nakuha ko lang sa Janitor eh, itatapon na kaya iuuwi ko sana. Eh, gusto yata ng Guardia eh makausap kayo para maayos. Boss, kakasuhan yata ako kaya nagmamakaawa ako sa inyo Boss tulungan ninyo ako. Hindi ko naman ito gustong mangyari naenganyo lang ako. Eh, gusto yata ni Capt. Molina eh kayo makausap. Boss, ngayon lang ako sa inyo magmamakaawa alam ko maiintindihan ninyo rin ako saka kayo lang ang alam kong makakatulong sa akin sana maunawaan ninyo ko. Hindi ko na kayo nahintay dahil wala pa kong tulog since Sunday morning dahil dito. Kaya nasulat ko na lang. Ang nagmamakaawa, FELIZ However, D.M. Orpilla, Jr., in his memorandum to respondent companys management, recommended petitioners dismissal from employment for the cxxvi[3] following reasons: Stated below are the circumstances regarding the attempt of Renato Felizardo (Production Weigher) to take out of the company premises the following: 1. Fifteen (15) pcs. Hamburger Patties 2. One (1) pc. of White Boots 3. One (1) pc. Aluminum Container (empty) I. BACKGROUND Based on the memo issued by Lt. E.G. Bianes, Detachment Commander dated 13 September 1993, R. FELIZARDO was caught by S.G. Manolito Ojana attempting to take out of the company premises the above items. According to the written statement of R. Felizardo (which he has submitted to the Security Dept.) that DMOrpilla, Jr. gave him the blessing to take out of the premises the said items which is totally not true. Neither did DMOrpilla gave him the alleged blessing nor did he give permission for him to bring the said items out. II. AGGRAVATING CIRCUMSTANCES 1. Subject tried to get out [of] the mess by dragging DMOrpillas name which he is not aware of. 2. Based on the statement of his co-employees (Agnes Bautista, GAD Technician, Leonil Santos, FG Whse Foreman), they both warned him against doing it. III. MITIGATING CIRCUMSTANCES R. Felizardo admitted that he did it based on a handwritten note (see attached) that he sent DMOrpilla thru N. Sta. Ana, morning of September 13, 1993. IV. VIOLATION COMMITTED Based on the existing SDPI Company Rules and Regulations, R. Felizardo violated Company Rules and Regulations 11, Section 15 stated as: Violation Penalty Dishonesty, stealing Termination from the Company or stealing from others V. RECOMMENDATION The subject having committed the above violation is worse but dragging other peoples name to justify commission of such an act is even worst. We are recommending the termination of Mr. Renato Felizardo. On September 27, 1993, petitioner was dismissed for dishonesty for theft of company property, effective September 13, 1993. The Labor Arbiter found that with the exception of the pair of boots, the articles which petitioner took from the company were mere scraps which were of no value to respondent company. He ruled that dismissal was too harsh a penalty to be imposed on a first-time offender and that his unemployment for about eleven (11) months was sufficient penalty for what he had done. Accordingly, the Labor Arbiter ordered petitioners reinstatement without backwages. cxxvii[4] On appeal, the NLRC reversed, stating: A careful examination of the record of the case reveals that complainant was found guilty of theft for stealing a pair of company boots, 15 pieces of hamburger patties, and 1 piece of aluminum container. Humanitarian consideration weighs heavily against harsh punishment but the offense which complainant is admittedly guilty [of] . . . . is specifically defined both under Article 282 of the Labor Code, as amended, and the company rules and regulations as a just cause for dismissal. And while it is true that a worker should be more favored in law, it is equally true that the employer should not be required to continuously employ someone who has betrayed its trust and confidence. In relation with the defenses put up by complainant-appellee, it was aptly observed by the respondents-appellants that the defense of prior knowledge of the company through complainant-appellees immediate supervisor is belied by the contents of his written explanation (p. 19, Records) in connection with his letter to Mr. M. Orpilla, his supervisor, where he practically admitted his attempt to cart away the said items had it not been timely foiled by the security guard manning the gate (p. 20, Records). As to whether or not complainant acted with intent to gain, suffice it to say, that in Criminal Law, intent to gain is presumed from the unlawful taking of personal property belonging to another, and in the case at bar the taking of company property was without the permission or knowledge of the company.

Moreover, it is not necessary that there was real or actual gain on the part of the offender. It is enough that on taking them, he was then actuated by the desire or intent to gain (People vs. Mercado, 65 Phil. 665). PREMISES CONSIDERED, the appeal is hereby granted and the Decision of the Labor Arbiter dated 22 August 1994 is hereby SET ASIDE, and a new Order is hereby entered DISMISSING the complaint for lack of merit. Petitioners contend that the NLRC committed grave abuse of discretion in setting aside the decision of the Labor Arbiter and upholding petitioners dismissal from employment. They claim that the NLRC erred in finding that petitioner was guilty of stealing company property. The Labor Arbiter did not really find petitioner Felizardo innocent of the charge against him. Consequently, the NLRC is not guilty of setting aside the factual findings of the Labor Arbiter. To the contrary, he found that in the morning of September 12, 1993, petitioner was trying to take out of the company premises a pair of boots, a drinking container, and fifteen (15) pieces of hamburger patties but was foiled by the security guard. However, on humanitarian grounds, the Labor Arbiter ordered the reinstatement of petitioner pointing out that except for the pair of boots, the other articles, i.e., the aluminum container and the hamburger patties, were mere scraps without any value. There is no question, therefore, as to petitioners guilt. The only question is whether dismissal is an appropriate penalty to impose on petitioner. There is no question that the employer has the inherent right to discipline, including that of dismissing its employees for just causes. This right is, however, cxxviii[5] subject to reasonable regulation by the State in the exercise of its police power. The finding of the NLRC that an employee violated the company rules and regulations is subject to scrutiny by the Court to determine if the dismissal is justified and, if so, whether the penalty imposed is commensurate cxxix[6] to the gravity of his offense. In this case, we agree with the Labor Arbiter that dismissal would not be proportionate to the gravity of the offense committed by petitioner considering the value of the articles he pilfered and the fact that he had no previous derogatory record during his two (2) years of employment in the company. The Labor Arbiter is certainly mistaken in regarding the articles taken to be mere scraps and hence without value to the company. They were of some value but not enough to warrant dismissal. Moreover, it should also be taken into account that petitioner is not a managerial or confidential employee in whom greater trust is placed by cxxx[7] management and from whom greater fidelity to duty is correspondingly expected. It is easy to see why an unfaithful employee who is holding a position of trust and confidence in a company poses a greater danger to its security than a mere clerk or machine operator like petitioner. There is another reason why violations by non-confidential employees of company rules and regulations such as that involved in this case are considered minor. Such employees are generally mere wage earners whose dismissal from employment can have severe financial consequences on their families especially at a time like the present when unemployment is quite high. Consequently, whatever missteps may have been committed by them ought not to be visited with a consequence so severe as dismissal. The polestar of adjudication in this area is still Justice, later Chief Justice, Enrique M. Fernandos cxxxi[8] statement of the rule in Meracap v. International Ceramics Mfg. Phil., Inc.: It is not only because of the laws concern for the workingman. There is, in addition, his family to consider. Unemployment brings untold hardships and sorrows on those dependent on the wage-earner. The misery and pain attendant on the loss of jobs then could be avoided if there be acceptance of the view that under all the circumstances of this case, petitioners should not be deprived of their means of livelihood. Nor is this to condone what had been done by them. For all this while, since private respondent considered them separated from the service, they had not been paid. For the strictly juridical standpoint, it cannot be too strongly stressed, to follow Davis in his masterly work, Discretionary Justice, that where a decision may be made to rest on informed judgment rather than rigid rules, all the equities of the case must be accorded their due weight. Finally, labor law determinations, to quote from Bultmann, should be not only secundum rationem but also secundum caritatem. cxxxii[9] This case is similar to Gelmart Industries Phils., Inc. v. NLRC, in which this Court affirmed the reinstatement of an employee who had taken out of the cxxxiii[10] employers premises one (1) plastic container filled with about 16 ounces of used motor oil. Reiterating the ruling in Meracap, we held: Considering that private respondent herein has no previous derogatory record in his fifteen (15) years of service with petitioner GELMART, the value of the property pilfered (16 ounces of used motor oil) is very minimal, plus the fact that petitioner failed to reasonably establish that non-dismissal of private respondent would work undue prejudice to the viability of their operation or is patently inimical to the companys interest, it is more in consonance with the policy of the State, as embodied in the Constitution, to resolve all doubts in favor of labor. As already stated, dismissal as a measure to protect the interests of respondent company is unwarranted under the facts of this case. Suspension would have sufficed. Without deciding for how long the suspension should be in cases such as this, considering that petitioner has been prevented from working in respondent company since September 13, 1993, we hold that, for all purposes, he has served a reasonable period of suspension commensurate to the gravity of his offense. Consequently, the Labor Arbiters order of reinstatement of petitioner without backwages may be considered appropriate. WHEREFORE, the instant petition is GRANTED. The decision of the National Labor Relations Commission is hereby SET ASIDE and that of the Labor Arbiter is REINSTATED. SO ORDERED. 12. FIRST DIVISION [G.R. No. 119500. August 28, 1998] PAGUIO TRANSPORT CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and WILFREDO MELCHOR, respondents. DECISION PANGANIBAN, J.: In dismissing the petition, this Court reiterates the following doctrines: (1) the boundary system used in taxi (and jeepney) operations presupposes an employer-employee relation; (2) the employer must prove just (or authorized) cause and due process to justify dismissal of an employee; (3) strained relations must be demonstrated as a fact; and (4) back wages and reinstatement are necessary consequences of illegal dismissal. The Case Before us is a petition for certiorari and prohibition with preliminary injunction, assailing the December 16, 1994 Decision of the National Labor Relations cxxxiv[1] Commission in NLRC NCR Case No. 00-02-01564-94 entitled Wilfredo Melchor vs. Paguio Transport Corporation/Serafin Paguio. The dispositive portion of the challenged Decision reads: WHEREFORE, premises considered, the appeal insofar as it seeks reversal of the finding on illegal dismissal is denied for lack of merit. The decision declaring that complainant was illegally dismissed is affirmed. The decision is however partially modified insofar as liability therefor is concerned. The liability shall inure against PAGUIO TRANSPORT CORPORATION, subject to the provision of the Corporation Code and the Rules of Court on matters taken herein. The backwages as computed in the assailed decision is set aside, and a new one is hereby provided in the amount of P86,400.00 as computed in the immediately preceding paragraph. cxxxv[2] Petitioner also impugns the February 21, 1995 NLRC Resolution denying the motion for reconsideration. cxxxvi[3] The June 28, 1994 Decision of the labor arbiter, which the NLRC modified as to the amount of back wages, disposed as follows:

WHEREFORE, the respondents are hereby ordered to reinstate the complainant with full backwages from the time his salaries were withheld from him until his actual reinstatement. The respondents are further ordered to pay him his 13th month pay in the amount of P5,600.00. Complainants backwages up to the date of this Decision as computed by LEILANI E. CALALANG of the Commissions NLRC NCR Branch is: 11/28/93 - 6/28/94 = 7 mos. P800.00 x 3 days x 4 weeks = P9,600.00 P9,600.00 x 7 mos. = P67,200.00 The aspect of reinstatement either in the job or payroll at the option of the employers being immediately executory pursuant to Article 223 of the Labor Code, the respondents are hereby directed to so reinstate him when he reports for work by virtue of this Decision. Other claims are hereby dismissed for lack of evidence. The Facts The facts, as summarized in the challenged Decision, are as follows: Complainant Wilfredo Melchor was hired by respondent company as a taxi driver on 25 December 1992 under the *b+oundary *s+ystem. He *was+ engaged to drive the taxi unit assigned to him on a 24-hour schedule per trip every two (2) days, for which he used to earn an average income from P500 to P700 per trip, exclusive of the P650.00 boundary and other deductions imposed on him. On 24 [sic] November 1993, complainant allegedly met a vehicular accident along Quirino Avenue near the PNR Station and Plaza Dilao when he accidentally bumped a car which stopped at the intersection even when the traffic light was green and go. After he submitted the traffic accident report to the office of respondents, he was allegedly advised to stop working and have a rest. After several days[,] he allegedly reported for work only to be told that his service was no longer needed. Hence, the complaint for illegal dismissal, among others. Respondent*s+ for their part maintained that complainant was not illegally dismissed, there being in the first place no employer-employee relationship between them. In amplification, it was argued that the element of control which [was] a paramount test to determine the existence of such a relationship [was] lacking. So too, it argued the element of the payment of compensation. Considering that in lieu of the latter, payment of boundary is instead made allegedly makes the relationship between them of a wase-agreement *sic+. Respondents then argued that even if an employer-employee relationship were to be presumed as present, still complainants termination arose out of a valid cause and after he refused to articulate his stand on the investigation being conducted on him. Respondents then harped on the supposed three occasions when complainant figured in a vehicular accident involving the taxi unit he was driving, viz: On August 3, which resulted in damages to the respondent in the amount of P150.00; On August 4 which again resulted [in] the damages to the respondent in the amount of P615.00; and again on 4 November 1993, the mishap costing the respondents this time P25,370.00 in damages. As a result of the alleged compounded damages which the respondents had to shoulder on account of the supposed reckless driving of the complainant, the former was allegedly left with no alternative but to ask complainants explanation why he should still be allowed to drive. Complainant, cxxxvii[4] despite several chances, allegedly failed to do so. Ruling of the NLRC The NLRC held that private respondent was an illegally dismissed employee of petitioner. Upholding the existence of an employer-employee relationship, cxxxviii[5] it cited Doce v. WCC, in which the Supreme Court ruled that the relationship created between the parties operating under a boundary system is cxxxix[6] one of an employer and employee, and not of a lessor and a lessee. The NLRC sustained the ruling of the labor arbiter that the private respondent was illegally dismissed, for he was not afforded the twin requirements of cxl[7] due process x x x. It rejected petitioners claim that private respondent had figured in three vehicular incidents because of his reckless driving. It found that except for petitioners bare statements, no proof was presented to establish with particularity the circumstances being claimed. x x x The guilt and culpability of [private respondent] which would give [petitioner] valid ground to effect his dismissal cannot be established by a mere allegation of his cxli[8] reckless driving. Public Respondent NLRC found petitioner liable for back wages in the amount of P86,400, and not P67,200 as computed by the labor arbiter. It found, however, that this liability should be imposed on Petitioner Corporation only, and not on its president who was also impleaded by private respondent. cxlii[9] Hence, this petition. Issues Petitioner raises the following issues: a. Whether or not public respondent Commission acted in excess of jurisdiction and/or with grave abuse of discretion amounting to lack of jurisdiction in ordering the reinstatement of private respondent with full backwages, despite its strained relations with the petitioner and the reinstatement would, in effect, be inimical to the interest of the latter in particular, and to the riding public in general; b. Whether or not public respondent acted in excess of jurisdiction and/or with grave abuse of discretion in refusing to reconsider its decision and cxliii[10] resolution complained of despite the facts prevailing to support the reconsideration. In resolving the petition, we shall address the following points: (1) employer-employee relation, (2) presence of just cause, (3) due process, (4) strained relationship, and (5) propriety of reinstatement and back wages. The Courts Ruling The petition is not meritorious. First Issue: Employer-Employee Relation Under the boundary system, private respondent was engaged to drive petitioners taxi unit on a 24-hour schedule every two days. On each such trip, private respondent remitted to petitioner a boundary of P650. Whatever he earned in excess of that amount was considered his income. Petitioner argues that under said arrangement, he had no control over the number of hours private respondent had to work and the routes he had to take. Therefore, he concludes that the employer-employee relationship cannot be deemed to exist. cxliv[11] Petitioners contention is not novel. In Martinez v. National Labor Relations Commission, this Court already ruled that the relationship of taxi owners and taxi drivers is the same as that between jeepney owners and jeepney drivers under the boundary system. In both cases, the employer-employee relationship was deemed to exist, viz.: The relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employeremployee and not of lessor-lessee. x x x In the lease of chattels[,] the lessor loses complete control over the chattel leased x x x. In the case of jeepney owners/operators and jeepney drivers, the former exercise supervision and control over the latter. The fact that the drivers do not receive fixed wages but get only the excess of that so-called boundary they pay to the owner/operator is not sufficient to withdraw the relationship between them from that of employer and employee. The doctrine is applicable in the present case. Thus, private respondents were employees x x x because they had been engaged cxlv[12] to perform activities which were usually necessary or desirable in the usual trade or business of the employer.

Second Issue: Just Cause Petitioner also asserts that private respondents involvement in three vehicular accidents within a span of several months constitutes just cause for his dismissal. It alleges that, according to the police report concerning the most recent and serious vehicular mishap, it was private respondent who was at fault and that the city prosecutor of Quezon City recommended that an Information for reckless imprudence resulting in damage to property be filed cxlvi[13] against him. Petitioner, however, did not submit any proof to support these allegations. Well-settled is the rule that the employer has the burden of proving that the dismissal of an employee is for a just cause. The failure of the employer to discharge this burden means that the dismissal is not justified and that the cxlvii[14] employee is entitled to reinstatement and back wages. In this case, petitioner failed to prove any just or authorized cause for his dismissal. Private cxlviii[15] respondent, therefore, must be deemed illegally dismissed. Petitioner contends that he submitted and presented material and competent documentary evidence consisting of police reports of vehicular accidents of taxicab units owned by petitioner and driven by private respondent, the repairs and expenses suffered by the petitioner as a result thereof and the resolution of the [c]ity [p]rosecutor of Quezon City finding private respondent at fault for the November 4, 1993 vehicular accident caused by the cxlix[16] latter. Adding that the submission of these documents only on appeal does not diminish their probative value, petitioner cites Article 221 of the Labor Code which reads: Article 221. Technical rules not binding and prior resort to amicable settlement. -- In any proceeding before the Commission or any of the Labor Arbiters, the rules of procedure prevailing in courts of law and equity shall not be controlling and it is the spirit and intention of the Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively without regard to technicalities of law and procedure, all in the interest of due process. In any proceeding before the Commission or any Labor Arbiter, the parties may be represented by legal counsel but it shall be the duty of the Chairman, any Presiding Commissioner or Commissioner or any Labor Arbiter to exercise complete control of the proceedings at all stages. Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert all efforts towards [t]he amicable settlement of a labor dispute within his jurisdiction on or before the first hearing. The same rule shall apply to the Commission in the exercise of its original jurisdiction. However, a careful examination of both the original Complaint and the Petitioners Memorandum of Appeal from the labor arbiters Decision reveals that cl[17] said pieces of documentary evidence were not mentioned or included therein, but were submitted by petitioner only when he filed his present petition with this Court. These pieces of evidence were attached and referred to as Annexes G, H, I, J, K and L of the said petition. Such factual issues cannot be resolved in a petition for certiorari like the present case, because the Courts review of NLRC decisions is limited to questions of jurisdiction and cli[18] grave abuse of discretion. In PMI Colleges v. NLRC, the Court held: This Court is definitely not the proper venue to consider this matter for it is not a trier of facts. x x x Certiorari is a remedy narrow in its scope and inflexible in character. It is not a general utility tool in the legal workshop. Factual issues are not a proper subject for certiorari, as the power of the Supreme Court to review labor cases is limited to the issue of jurisdiction and grave abuse of discretion. x x x. Of the same tenor was our disquisition in Ilocos Sur Electric Cooperative, Inc. v. NLRC where we made plain that: In certiorari proceedings under Rule 65 of the Rules of Court, judicial review by this Court does not go so far as to evaluate the sufficiency of evidence upon which the Labor Arbiter and the NLRC based their determinations, the inquiry being limited essentially to whether or not said public respondents had acted without or in excess of *their+ jurisdiction or with grave abuse of discretion. x x x Our deference to the expertise acquired by quasi-judicial agencies and the limited scope granted us in the exercise of certiorari jurisdiction restrain us from going so far as to probe into the correctness of a tribunals evaluation of evidence, unless there is a palpable mistake and complete disregard thereof in which case certiorari would be proper. In plain terms, in certiorari proceedings, we are concerned with mere errors of jurisdiction and not errors of judgment. Equally devoid of correctness is petitioners claim that the documents should be considered, pursuant to Article 221 of the Labor Code which states that technical rules are not binding in proceedings before the labor arbiters and the NLRC. The Supreme Court is not a trier of facts; as earlier stated, its jurisdiction in a petition for certiorari, like the present case, is confined to questions of jurisdiction and grave abuse of discretion. The unexplained failure of petitioner to present its evidence before the labor arbiter and the NLRC cannot compel this Court to expand the scope of its review. Indeed, petitioner has not proffered a sufficient reason for this Court to do so. clii[19] Petitioners reliance on Canete v. National Labor Relations Commission is misplaced. In that case, the documents were submitted to the NLRC before they were tackled by the Supreme Court. Private respondents admission that he was involved in the November 4, 1993 accident did not give petitioner a just cause to dismiss him. Mere involvement in an accident, absent any showing of fault or recklessness on the part of an employee, is not a valid ground for dismissal. Third Issue: No Due Process Petitioner insists that private respondent was accorded due process, because he was allowed to explain his side and to show cause why he should still be allowed to act as one of petitioners drivers. This does not persuade. The Court has consistently held that in the dismissal of employees, the twin requirements of notice and hearing are essential elements of due process. The employer must furnish the worker two written 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. As to the requirement of a hearing, the essence of due cliii[20] process lies simply in an opportunity to be heard, and not always and indispensably in an actual hearing. cliv[21] In the present case, petitioner failed to present proof, other than its bare allegations, that it had complied with these requirements. We reiterate: the burden of proof rests on the employer. Private respondent, in fact, was not given notice that he was being dismissed. When ordered to explain the vehicular accident that happened on November 4, 1993, he was not informed that petitioner was contemplating his dismissal and that his involvement in said vehicular accident was the cause thereof. Private respondent was merely asked to explain the vehicular accident per se, not his defense against a charge of dismissal arising from the vehicular accident. He became aware of his employers intention to dismiss him only when he was actually told not to report for work anymore. Fourth Issue: Strained Relations Notwithstanding its failure to prove just cause and due process in the dismissal of private respondent, petitioner seeks to bar his reinstatement by invoking the doctrine of strained relations. It contends that as a result of private respondents reckless and incompetent manner of driving x x x, compounded by the damages suffered by petitioner in terms of repairs, related expenses, and the institution of the instant case, the relationship between clv[22] the parties are so strained as to preclude a harmonious working atmosphere to the prejudice of the petitioner as well as private respondent.

We are not persuaded. Strained relations must be demonstrated as a fact. Petitioner failed to do so. Its allegation that private respondent was incompetent and reckless in his manner of driving, which led to the his involvement in three vehicular accidents, is not supported by the records. As earlier noted, no evidence was properly submitted by petitioner to prove or give credence to his assertions. Thus, Respondent NLRC ruled: Despite allegation on the matter, not an iota of proof was presented to establish the claim. This observation equally applies to the allegation that clvi[23] complainants, in three (3) occasions had figured in *a+ vehicular accident due to his reckless driving x x x. Because the claim of petitioner has no factual basis, the doctrine on strained relations cannot be applied in this case. Moreover, the filing of the Complaint clvii[24] for illegal dismissal does not by itself justify the invocation of this doctrine. As the Court held in Capili vs. NLRC: xxx *T+he doctrine on strained relations cannot be applied indiscriminately since every labor dispute almost invariably results in strained relations; otherwise, reinstatement can never be possible simply because some hostility is engendered between the parties as a result of their disagreement. That is human nature. Fifth Issue: Reinstatement and Back Wages Because he was illegally dismissed, private respondent is entitled to reinstatement and back wages pursuant to Section 279 of the Labor Code, which reads: Art. 279. Security of Tenure. -- In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. 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. clviii[25] Interpreting this provision, the Court held in Bustamante v. NLRC that illegally dismissed employees are entitled to full back wages without conditions or limitations, viz.: xxx *A+ closer adherence to the legislative policy behind Rep. Act No. 6715 points to full backwages as meaning exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. In other words, the provision calling for full backwages to illegally dismissed employees is clear, plain and free from ambiguity and, therefore, must be applied without attempted or strained interpretation. The labor arbiter awarded back wages in the sum of P67,200 based on the following computation: 11/28/93 - 6/28/94 = 7 mos. P800.00 x 3 days x 4 weeks = P9,600.00 clix[26] P9,600 x 7 mos. = P67,200.00 In modifying the foregoing award, the NLRC relied on this other formula: 11/28/93 - 11/28/94 = 12 months P600.00 x 3 days x 4 weeks = P 7,200.00 clx[27] P7,200 x 12 months = P86,400.00. Although the NLRC adjusted the amount of private respondents monthly income and the period during which back wages may be awarded, neither the petitioner nor the private respondent questioned the new computation. Accordingly, we sustain the award but stress that the back wages ought to be computed from the time of the illegal dismissal to the time of reinstatement, either actual or in the payroll, without any deduction or qualification. WHEREFORE, the petition is hereby DISMISSED for utter lack of merit, and the assailed Decision and Resolution are hereby AFFIRMED. Costs against petitioners. SO ORDERED. 13. SECOND DIVISION [G.R. No. 124617. April 28, 2000] PHILIPPINE AEOLUS AUTOMOTIVE UNITED CORPORATION and/or FRANCIS CHUA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ROSALINDA C. CORTEZ, respondents. DECISION BELLOSILLO, J.: This petition seeks to set aside the Decision of 15 February 1996 and the Resolution of 28 March 1996 of public respondent National Labor Relations Commission in NLRC NCR CA No. 009753-95 (NLRC NCR Case No. 00-12-08759-94) which modified the decision of the Labor Arbiter finding petitioners not guilty of illegal dismissal. Petitioner Philippine Aeolus Automotive United Corporation (PAAUC) is a corporation duly organized and existing under Philippine laws, petitioner Francis 139[1] Chua is its President while private respondent Rosalinda C. Cortez was a company nurse of petitioner corporation until her termination on 7 November 1994. Jlexj On 5 October 1994 a memorandum was issued by Ms. Myrna Palomares, Personnel Manager of petitioner corporation, addressed to private respondent Rosalinda C. Cortez requiring her to explain within forty-eight (48) hours why no disciplinary action should be taken against her (a) for throwing a stapler at Plant Manager William Chua, her superior, and uttering invectives against him on 2 August 1994; (b) for losing the amount of P1,488.00 entrusted to her by Plant Manager Chua to be given to Mr. Fang of the CLMC Department on 23 August 1994; and, (c) for asking a co-employee to punch-in her time card thus making it appear that she was in the office in the morning of 6 September 1994 when in fact she was not. The memorandum however was refused by private respondent although it was read to her and discussed with her by a co-employee. She did not also submit the required explanation, so that while her case was pending investigation the company placed her under preventive suspension for thirty (30) days effective 9 October 1994 to 7 November 1994. Lexjuris On 20 October 1994, while Cortez was still under preventive suspension, another memorandum was issued by petitioner corporation giving her seventytwo (72) hours to explain why no disciplinary action should be taken against her for allegedly failing to process the ATM applications of her nine (9) coemployees with the Allied Banking Corporation. On 21 October 1994 private respondent also refused to receive the second memorandum although it was

read to her by a co-employee. A copy of the memorandum was also sent by the Personnel Manager to private respondent at her last known address by registered mail. Jurismis Meanwhile, private respondent submitted a written explanation with respect to the loss of the P1,488.00 and the punching-in of her time card by a coemployee. On 3 November 1994 a third memorandum was issued to private respondent, this time informing her of her termination from the service effective 7 140[2] November 1994 on grounds of gross and habitual neglect of duties, serious misconduct and fraud or willful breach of trust. On 6 December 1994 private respondent filed with the Labor Arbiter a complaint for illegal dismissal, non-payment of annual service incentive leave pay, 141[3] 13th month pay and damages against PAAUC and its president Francis Chua. On 10 July 1995 the Labor Arbiter rendered a decision holding the termination of Cortez as valid and legal, at the same time dismissing her claim for 142[4] damages for lack of merit. On appeal to the NLRC, public respondent reversed on 15 February 1996 the decision of the Labor Arbiter and found petitioner corporation guilty of illegal dismissal of private respondent Cortez. The NLRC ordered petitioner PAAUC to reinstate respondent Cortez to her former position with back wages 143[5] computed from the time of dismissal up to her actual reinstatement. 144[6] On 11 March 1996 petitioners moved for reconsideration. On 28 March 1996 the motion was denied; hence, this petition for certiorari challenging the NLRC Decision and Resolution. The crux of the controversy may be narrowed down to two (2) main issues: whether the NLRC gravely abused its discretion in holding as illegal the dismissal of private respondent, and whether she is entitled to damages in the event that the illegality of her dismissal is sustained. Jjjuris 145[7] The Labor Code as amended provides specific grounds by which an employer may validly terminate the services of an employee, which grounds should be strictly construed since a persons employment constitutes "property" under the context of the constitutional protection that "no person shall be deprived of life, liberty or property without due process of law" and, as such, the burden of proving that there exists a valid ground for termination of 146[8] employment rests upon the employer. Likewise, in light of the employee's right to security of tenure, where a penalty less punitive than dismissal will 147[9] suffice, whatever missteps may have been committed by labor ought not to be visited with a consequence so severe. A perusal of the termination letter indicates that private respondent was discharged from employment for "serious misconduct, gross and habitual neglect of duties and fraud or willful breach of trust." Specifically -justice 1. On August 2, 1994, you committed acts constituting gross disrespect to your superior Mr. William Chua, the Plant Manager. 2. On August 23, 1994, the Plant Manager entrusted you the amount of P1,488.00 to be sent to CLMC for Mr. Fang but the money was allegedly lost in your possession and was not recovered. 3. On September 6, 1994, you caused someone else to punch-in your time card to show that you were at work when in fact you were doing a personal errand for Richard Tan. As per time card you were in at 8:02 A.M. but you only arrived at 12:35 P.M.

4. On July 28, 1994, you received an amount of P900.00 from Miss Lucy Lao to open an ATM card of nine (9) employees. On September 24, 1994, one of the employees complained by the name of Tirso Aquino about the status of his ATM Card and upon query from the bank it was found out that no application and no deposit for said person has been made. Likewise, it was found out that you did not open the ATM Card and deposit the P800.00 for the 148[10] 8 other employees. It turned out that said deposit was made after a month later. As to the first charge, respondent Cortez claims that as early as her first year of employment her Plant Manager, William Chua, already manifested a special liking for her, so much so that she was receiving special treatment from him who would oftentimes invite her "for a date," which she would as often refuse. On many occasions, he would make sexual advances - touching her hands, putting his arms around her shoulders, running his fingers on her arms and telling her she looked beautiful. The special treatment and sexual advances continued during her employment for four (4) years but she never reciprocated his flirtations, until finally, she noticed that his attitude towards her changed. He made her understand that if she would not give in to his sexual advances he would cause her termination from the service; and he made good his threat when he started harassing her. She just found out one day that her table which was equipped with telephone and intercom units and containing her personal belongings was transferred without her knowledge to a place with neither telephone nor intercom, for which reason, an argument ensued when she confronted William Chua resulting in her being charged with 149[11] gross disrespect. Respondent Cortez explains, as regards the second charge, that the money entrusted to her for transmittal was not lost; instead, she gave it to the 150[12] company personnel in-charge for proper transmittal as evidenced by a receipt duly signed by the latter. With respect to the third imputation, private respondent admits that she asked someone to punch-in her time card because at that time she was doing an errand for one of the company's officers, Richard Tan, and that was with the permission of William Chua. She maintains that she did it in good faith believing that she was anyway only accommodating the request of a company executive and done for the benefit of the company with the acquiescence of 151[13] her boss, William Chua. Besides, the practice was apparently tolerated as the employees were not getting any reprimand for doing so. As to the fourth charge regarding her alleged failure to process the ATM cards of her co-employees, private respondent claims that she has no knowledge thereof and therefore denies it. After all, she was employed as a company nurse and not to process ATM cards for her co-employees. Jksm The Supreme Court, in a litany of decisions on serious misconduct warranting dismissal of an employee, has ruled that for misconduct or improper behavior 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 152[14] employee has become unfit to continue working for the employer. The act of private respondent in throwing a stapler and uttering abusive language upon the person of the plant manager may be considered, from a lay man's perspective, as a serious misconduct. However, in order to consider it a serious misconduct that would justify dismissal under the law, it must have been done in relation to the performance of her duties as would show her to be unfit to continue working for her employer. The acts complained of, under the circumstances they were done, did not in any way pertain to her duties as a 153[15] nurse. Her employment identification card discloses the nature of her employment as a nurse and no other. Also, the memorandum informing her 154[16] that she was being preventively suspended pending investigation of her case was addressed to her as a nurse. As regards the third alleged infraction, i.e., the act of private respondent in asking a co-employee to punch-in her time card, although a violation of company rules, likewise does not constitute serious misconduct. Firstly, it was done by her in good faith considering that she was asked by an officer to perform a task outside the office, which was for the benefit of the company, with the consent of the plant manager. Secondly, it was her first time to commit such infraction during her five (5)-year service in the company. Finally, the company did not lose anything by reason thereof as the offense was immediately known and corrected. Es m

On alleged infraction No. 4, as may be gleaned from and admitted in the memorandum of petitioners to private respondent dated 20 October 1994 and the notice of termination dated 3 November 1994, the money entrusted to her was in fact deposited in the respective accounts of the employees concerned, although belatedly. We agree with the submission of the Solicitor General that -Es msc The mere delay/failure to open an ATM account for nine employees is not sufficient, by itself, to support a conclusion that Rosalinda is guilty of gross and habitual neglect of duties. First, petitioner did not show that opening an ATM is one of her primary duties as company nurse. Second, petitioner failed to show that Rosalinda intentionally, knowingly, and purposely delayed the opening of ATM accounts for petitioners employees. It is of common knowledge that a bank imposes upon an applicant certain requirements before an ATM account can be opened, i.e. properly filled up application forms, identification cards, minimum deposit etc. In the instant case, petitioner did not prove that the delay was caused by Rosalindas neglect or willful act (emphasis 156[18] supplied). Gross negligence implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard 157[19] of consequences without exerting any effort to avoid them. The negligence, to warrant removal from service, should not merely be gross but also habitual. Likewise, the ground "willful breach by the employee of the trust reposed in him by his employer" must be founded on facts established by the employer who must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the employee may 158[20] fairly be made to rest. All these requirements prescribed by law and jurisprudence are wanting in the case at bar. On the issue of moral and exemplary damages, the NLRC ruled that private respondent was not entitled to recover such damages for her failure to prove that petitioner corporation had been motivated by malice or bad faith or that it acted in a wanton, oppressive or malevolent manner in terminating her services. In disbelieving the explanation proffered by private respondent that the transfer of her table was the response of a spurned lothario, public respondent quoted the Labor Arbiter Complainants assertion that the cause of the altercation between her and the Plant Manager where she threw a stapler to him and uttered invectives against him was her refusal to submit to his advances to her which started from her early days of employment and lasted for almost four years, is hardly believable. For indeed, if there was such harassment, why was there no complaints (sic) from her during that period? Why did she stay there for so long? 159[21] Besides, it could not have taken that period for the Plant Manager to react. This assertion of the complainant deserves no credence at all. Public respondent in thus concluding appears baffled why it took private respondent more than four (4) years to expose William Chua's alleged sexual harassment. It reasons out that it would have been more prepared to support her position if her act of throwing the stapler and uttering invectives on William Chua were her immediate reaction to his amorous overtures. In that case, according to public respondent, she would have been justified for such outburst because she would have been merely protecting her womanhood, her person and her rights. Esmm is We are not persuaded. The gravamen of the offense in sexual harassment is not the violation of the employee's sexuality but the abuse of power by the employer. Any employee, male or female, may rightfully cry "foul" provided the claim is well substantiated. Strictly speaking, there is no time period within which he or she is expected to complain through the proper channels. The time to do so may vary depending upon the needs, circumstances, and more importantly, the emotional threshold of the employee. Esmso Private respondent admittedly allowed four (4) years to pass before finally coming out with her employer's sexual impositions. Not many women, especially in this country, are made of the stuff that can endure the agony and trauma of a public, even corporate, scandal. If petitioner corporation had not issued the third memorandum that terminated the services of private respondent, we could only speculate how much longer she would keep her silence. Moreover, few persons are privileged indeed to transfer from one employer to another. The dearth of quality employment has become a daily "monster" roaming the streets that one may not be expected to give up one's employment easily but to hang on to it, so to speak, by all tolerable means. Perhaps, to private respondent's mind, for as long as she could outwit her employer's ploys she would continue on her job and consider them as mere occupational hazards. This uneasiness in her place of work thrived in an atmosphere of tolerance for four (4) years, and one could only imagine the prevailing anxiety and resentment, if not bitterness, that beset her all that time. But William Chua faced reality soon enough. Since he had no place in private respondent's heart, so must she have no place in his office. So, he provoked her, harassed her, and finally dislodged her; and for finally venting her pent-up anger for years, he "found" the perfect reason to terminate her. Mse sm In determining entitlement to moral and exemplary damages, we restate the bases therefor. In moral damages, it suffices to prove that the claimant has 160[22] suffered anxiety, sleepless nights, besmirched reputation and social humiliation by reason of the act complained of. Exemplary damages, on the other

155[17]

hand, are granted in addition to, inter alia, moral damages "by way of example or correction for the public good" if the employer "acted in a wanton, 162[24] fraudulent, reckless, oppressive or malevolent manner." Anxiety was gradual in private respondent's five (5)-year employment. It began when her plant manager showed an obvious partiality for her which went out of hand when he started to make it clear that he would terminate her services if she would not give in to his sexual advances. Sexual harassment is an imposition of misplaced "superiority" which is enough to dampen an employee's spirit in her capacity for advancement. It affects her sense of judgment; it changes her life. If for this alone private respondent should be adequately compensated. Thus, for the anxiety, the seen and unseen hurt that she suffered, petitioners should also be made to pay her moral damages, plus exemplary damages, for the oppressive manner with which petitioners effected her dismissal from the service, and to serve as a forewarning to lecherous officers and employers who take undue advantage of their ascendancy over their employees. Ex sm All told, the penalty of dismissal is too excessive and not proportionate to the alleged infractions committed considering that it does not appear that private respondent was an incorrigible offender or that she inflicted serious damage to the company, nor would her continuance in the service be patently 163[25] inimical to her employers interest. Even the suspension imposed upon her while her case was pending investigation appears to be unjustified and uncalled for. WHEREFORE, the Decision of public respondent National Labor Relations Commssion finding the dismissal of private respondent Rosalinda C. Cortez to be without just cause and ordering petitioners Philippine Aeolus Automotive United Corporation and/or Francis Chua to pay her back wages computed from the time of her dismissal, which should be full back wages, is AFFIRMED. However, in view of the strained relations between the adverse parties, instead of reinstatement ordered by public respondent, petitioners should pay private respondent separation pay equivalent to one (1) month salary for every year of service until finality of this judgment. In addition, petitioners are ordered to pay private respondent P25,000.00 for moral damages and P10,000.00 for exemplary damages. Costs against petitioners. Kyle SO ORDERED. 14. SECOND DIVISION [G.R. No. 130957. January 19, 2000] VH MANUFACTURING, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and HERMINIO C. GAMIDO, respondents. ULANDU DECISION DE LEON, JR., J.: 164[1] 165[2] Before us is a petition for certiorari, under Rule 65 of the Rules of Court, seeking to annul the Decision and the Order of the National Labor 166[3] Relations Commission (NLRC), First Division, dated February 27, 1997 and August 14, 1997, respectively, which set aside the Decision dated June 20, 1996 of the Labor Arbiter. Essentially, public respondent found and declared that the petitioners allegation that private respondent slept on the job on February 10, 1995 was not proven and, as a result, there was no just and valid cause for his dismissal, and that even if there was, the penalty of dismissal was too harsh a punishment for violation of petitioners Company Rule 15-b. The facts of the case are the following: 167[4] Since November 5, 1985 private respondent was employed in petitioners business of manufacturing liquefied petroleum gas (LPG) cylinders. He 168[5] served as a quality control inspector with the principal duty of inspecting LPG cylinders for any possible defects and earning P155.00 a day. His service 169[6] with the company was abruptly interrupted on February 14, 1995, when he was served a notice of termination of his employment.

161[23]

His dismissal stemmed from an incident on February 10, 1995 wherein petitioners company President, Alejandro Dy Juanco, allegedly caught private 170[7] respondent sleeping on the job. On that same day, private respondent was asked through a written notice from the petitioners Personnel 171[8] Department to explain within twenty-four (24) hours why no disciplinary action should be taken against him for his violation of Company Rule 15172[9] b which provides for a penalty of separation for sleeping during working hours. Without delay, private respondent replied in a letter which reads: "Sir, ipagpaumanhin po ninyo kung nakapikit ako sa aking puwesto dahil hinihintay ko po ang niliha hi Abreu para i quality pasensiya na po kung hindi ko 173[10] po namalayan ang pagdaan ninyo dahil maingay po ang painting booth." Es m 174[11] Notwithstanding his foregoing reply, he was terminated. Feeling aggrieved, private respondent initially instituted on April 26, 1995 a criminal suit for Estafa, for alleged withholding of his salary, against the 175[12] 176[13] company President, Alejandro Dy Juanco. Said complaint was dismissed on June 22, 1995 for improper forum. He then filed on July 4, 1995 a 177[14] complaint for illegal dismissal, praying for reinstatement to his position as quality control inspector. On June 20, 1996, Labor Arbiter Ricardo C. Nora rendered his decision upholding petitioners position and declared that private respondents dismissal is anchored on a valid and just cause and the latters 178[15] contention of denial of due process as devoid of merit.

Private respondent then appealed the decision of the Labor Arbiter to the public respondent NLRC where it was assigned to the First Division. The NLRC 179[16] reversed the decision of the Labor Arbiter and ordered herein petitioner to reinstate private respondent with full backwages less one-month pay. 180[17] Inasmuch as public respondent in its Order dated August 14, 1997 denied petitioners motion for reconsideration, petitioner now challenges the correctness of the NLRCs decision and order via the instant petition. Petitioner anchors its petition on two (2) grounds, to wit: "1. THE NLRC GRAVELY ABUSED ITS DISCRETION IN HOLDING THAT GAMIDOS DISMISSAL WAS NOT ANCHORED ON A JUST AND VALID CAUSE. 2. THE NLRC GRAVELY ABUSED ITS DISCRETION IN HOLDING THAT DISMISSAL WAS TOO HARSH A PENALTY FOR GAMIDOS VIOLATION OF COMPANY 181[18] RULE 15-b." The instant petition must fail. First. Basically, the reason cited for the dismissal of private respondent is sleeping on the job in violation of Company Rule 15-b. Was the private respondent sleeping on the job or was he merely idle and, as he claimed, waiting for the next cylinder to be checked? Evidence on this score is material, for it is the be-all and end-all of petitioners cause, in view of the gravity of the penalty of separation, as provided by the Company Rules and Regulation. In 182[19] termination disputes, the burden of proof is always on the employer to prove that the dismissal was for a just and valid cause. What is at stake here is not only the job itself of the employee but also his regular income therefrom which is the means of livelihood of his family. Es msc A thorough review of the record discloses that, contrary to the findings of the Labor Arbiter, petitioners claim that private respondent slept on the job on 183[20] February 10, 1995 was not substantiated by any convincing evidence other than the bare allegation of petitioner. The report of Ronaldo M. Alvarez, Acting Quality Control Department Head of petitioner corporation, on the circumstances which ultimately served as basis for the termination of private respondents employment, did not confirm the alleged violation by private respondent of the pertinent Company Rule 15-b. The report merely stated 184[21] private respondents denial and response to petitioners allegation which he reiterated in his written reply. 185[22] Second. Petitioners reliance on the authorities it cited that sleeping on the job is always a valid ground for dismissal, is misplaced. The authorities cited involved security guards whose duty necessitates that they be awake and watchful at all times inasmuch as their function, to use the words in Luzon 186[23] Stevedoring Corp. v. Court of Industrial Relations, is "to protect the company from pilferage or loss." Accordingly, the doctrine laid down in those cases is not applicable to the case at bar. Third. While an employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the employees, those directives, however, must always be fair and reasonable, and the corresponding penalties, when prescribed, must be commensurate to the offense involved and to the degree of the infraction. In the case at bar, the dismissal meted out on private respondent for allegedly sleeping on the 187[24] job, under the attendant circumstances, appears to be too harsh a penalty, considering that he was being held liable for first time, after nine (9) long

years of unblemished service, for an alleged offense which caused no prejudice to the employer, aside from absence of substantiation of the alleged 188[25] offense. The authorities cited by petitioner are also irrelevant for the reason that there is no evidence on the depravity of conduct, willfulness of the 189[26] 190[27] disobedience, or conclusiveness of guilt on the part of private respondent. Neither was it shown that private respondents alleged negligence or 191[28] neglect of duty, if any, was gross and habitual. Thus, reinstatement is just and proper. WHEREFORE, the petition is hereby DISMISSED, and the challenged Decision and Order of public respondent NLRC are AFFIRMED. No pronouncement as to costs. SO ORDERED. 15. G.R. No. 121035 April 12, 2000 RUFINO NORBERTO F. SAMSON, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, SCHERING-PLOUGH CORPORATION, LEO RICONALLA and JOSE L. ESTINGOR, respondents. KAPUNAN, J. Through this petition for certiorari, Rufino Norberto F. Samson ("petitioner") assails the Decision, dated 17 March 1995, of the National Labor Relations Commission in the consolidated cases of NLRC NCR-00-01-00652-94 and NLRC NCR-00-02-00887-94. Petitioner likewise assails the Resolution, dated 10 May 1995, of the NLRC denying his motion for reconsideration. The assailed decision of the NLRC reversed and set aside the Decision, dated 25 August 1994, of Labor Arbiter Ricardo C. Nora finding respondenthering-Plough Corporation ("respondent company") guilty of illegal dismissal and ordering it to reinstate petitioner to his former position as District Sales Manager and to pay him backwages. As culled from the decisions of the labor arbiter and the NLRC, the facts of the case are as follows: This pertains to the case (NCR-00-01-00652-94) filed by the complainant Rufino Norberto F. Samson against the respondentshering Plough. Corp. ("SPC" for brevity) and Mr. Leo C. Riconalla, National Sales Manager, for money equivalent of rice subsidy for the period April 1990 to December 1992 and holiday pay, now deemed submitted for resolution based on records available. On February 1, 1994, said complainant filed another case (NCR-00-02-00887-94) for illegal preventive suspension raffled to the Honorable Labor Arbiter Donato G. Quinto, Jr. and consolidated to the above case number. Likewise, on February 4, 1994, complainant filed a Motion to Amend Complaint and averred pertinently that ". . . complainant was placed under an indefinite preventive suspension on 25 January 1994"; and ". . . was arbitrarily and summarily terminated from employment on 03 February 1994 on ground of loss of confidence." As culled from the records of the instant case, what really precipitated complainant's preventive suspension culminating to his dismissal is (sic) the incident that took place on December 17, 1993 as gleaned from the exchange of letters/memoranda from both parties. In a letter dated 25 January 1994 (Annex "A") addressed to the complainant Mr. Samson signed by one J.L. Estingor, the latter called the attention of (sic) the complainant's conduct ". . . in a manner inimical to the interests of SPC" and enumerated the following acts committed by the complainant; to wit: xxx xxx xxx 1. On or about 17 December 1993, during the Sales and Marketing Christmas gathering, you made utterances of obscene, insulting, and offensive words, referring to or direct against SPC's Management Committee, in the presence of several co-employees. 2. On that same occasion, and again in the presence of several co-employees, you uttered obscene, insulting and offensive words, and made malicious and lewd gesture, all of which referred to or were directed against Mr. Epitacio D. Titong, Jr. President and General Manager of SPC. 3. Also on that same occasion, you repeated your malicious utterances and threatened to disrupt or otherwise create violence during SPC's forthcoming National Sales Conference, and enjoined your co-employees not to prepare for the said conference. 4. Subsequently, on or about 3 January 1994, you repeated your threats to some co-employees, advising them to watch out for some disruptive actions to happen during the National Sales Conference. (Emphasis ours) Complainant was given two (2) days from receipt of the foregoing letter and to-explain ". . . why no disciplinary action, including termination", should be taken against the complainant and in the meantime was placed on preventive suspension effective immediately, until further notice. Complainant on the very same date 25 January 1994 and in reply to the above-mentioned letter/memo (Annex "B") wrote an explanation stating:

xxx xxx xxx Relative to the said memo I would like to categorically state the following facts: 1. That the act(s) alluded in the memo, specifically paragraph[s] 1 and 2, which alleged that I uttered obscene, insulting and offensive words is not true. If ever I happened to utter such words it was made in reference to the decision taken by the management committee on the Cua Lim case and not to any particular or specific person(s) as stated in the memo. 2. I beg to disagree with the statement made in Paragraphs 3 and 4 of the same memo as I deny to have uttered much less threaten to create violence and disrupt the holding of the National Sales Conference: Finally, I am lodging a formal protest for being placed under preventive suspension it being contrary to the memo which gave me two (2) days within which to explain my position before any disciplinary action could be initiated. I believe that the pre-empted imposition of the preventive suspension is not only arbitrary but is violative of my constitutional "right to due process". Submitted for your information. (Emphasis ours) Again, on January 27, 1994, complainant wrote a letter (Annex "C") addressed to Mr. J.L. Estingor, HRD Manager, which in part reads: xxx xxx xxx Being a staff (DSM) assigned in the field I seldom stay in the office except on extreme necessity or when my presence is required. Under such situation my continued employment will not in any way poses [sic] serious or imminent threat to the life and property of the company as well as my coemployees. The preventive suspension meted out against me is not only abusive, arbitrary but indiscriminately applied under the guise of managerial prerogative but violative of my right under the law. I trust that my immediate reinstatement will be acted upon without any further delay. In a letter dated February 3, 1994, respondent SPC thru Mr. J.L. Estingor, wrote a letter (Annex "D") to the complainant Mr. Samson, the dispositive part of which reads as follows: xxx xxx xxx In view of the foregoing, notice is hereby given that your employment fromhering Plough Corporation is terminated effective at the close of business hours of 3 February 1994. We reiterate our previous directive for you to turn over the service vehicle, all money, documents, records and other property in your possession or 1 custody to the National Sales Manager. Please comply with this directive immediately. On the basis of the pleadings filed by the parties and evidence on record, the labor arbiter rendered his Decision, dated 25 August 1994, declaring the dismissal of petitioner illegal. The labor arbiter ruled that petitioner's conduct is not so serious as to warrant his dismissal because: 1) the alleged offensive words were uttered during an informal and unofficial get-together of employees where there was social drinking and petitioner was already tipsy; 2) the words were uttered to show disapproval over management's decision on the "Cua Lim" case; 3) the penalty for the offense is only "verbal reminder" under respondent company's rules and regulations; and 4) petitioner was already admonished during a meeting on 4 January 1994. 2 Accordingly, respondent company was ordered to reinstate petitioner as District Sales Manager and to pay him backwages. Both parties appealed said decision to the NLRC. Petitioner filed a partial appeal of the denial of his claim for holiday pay and the cash equivalent of the rice subsidy. For its part, respondent company sought the reversal of the decision of the labor arbiter alleging that the latter erred in ruling that petitioner's employment was terminated without valid cause and in ordering his reinstatement. In reversing the labor arbiter's decision, the NLRC found that there was just cause, i.e., gross misconduct, for petitioner's dismissal. The NLRC made the following disquisition, thus: It is well established in the records that complainant made insulting and obscene utterances directed at the respondent company's management committee in the presence of several employees. Again, he directed his verbal abuse against General Manager and President Epitacio D. Titong, Jr. by uttering "Si EDT, bullshit yan", "sabihin mo kay EDT yan"; and "sabihin mo kay EDT, bullshit yan" while gesturing and making the "dirty finger" sign. (page 7, Decision) These utterances were made by the complainant in [a] loud manner. (Affidavit of Leo C. Riconalla, Annex "1", of respondents' position paper) He was further accused of threatening to disrupt respondents' national sales conference by telling Ms. Anita Valdezco that the conference will be a "very bloody one." (Respondents' position paper) We consider the foregoing actuations of the complainant as constituting gross misconduct, sufficient to justify respondents in terminating his services. The actuation of the complainant is destructive of the morals of his co-employees and, therefore, his continuance in the position of District Sales Manager would be patently inimical to the respondent company's interest. Complainant is a managerial employee as he is a District Sales Manager. As such, his position carries the highest degree of responsibility in improving and upholding the interests of the employer and in exemplifying the utmost standard of discipline and good conduct among hio-employees. (Top Form Mfg. Inc., vs. NLRC, 218 SCRA 313) In terminating the employment of managerial employees, the employer is allowed a wider latitude of discretion than 3 in the case of ordinary rank-and-file employee. (Aurelio vs. NLRC, et al., G.R. 99034, April 12, 1993) Preliminarily, we find it necessary to resolve the procedural issues raised by respondent company in its Comment (with Motion for Clarification), dated 6 September 1995. Respondent company harped on the fact that the caption of the petition did not include the docket numbers of the cases before the NLRC in violation of Supreme Court Circular 28-91. We do not find this omission fatal as the pertinent docket numbers had been set out in the first and second pages of the petition. The same constitutes substantial compliance with the requirement of the law. Respondent company further opined that the petition should be summarily dismissed as the decision had become final and executory citing Section 114, Rule VII and Section 2 (b), Rule VIII of the Rules of Procedure of the NLRC. This contention is likewise untenable. As an original action for certiorari, 4 the petition was merely required to be filed within a reasonable time from receipt of a copy of the questioned decision or resolution. Under the rules 5 then in effect at the time of the filing of the instant petition, a period of three (3) months was considered to be "reasonable time". In this case, petitioner received a copy of the assailed NLRC decision on 25 April 1995. He filed a motion for reconsideration on 27 April 1995 but it was denied by the NLRC in its assailed resolution, a copy of which was received by petitioner on 1 July 1995. The instant petition was filed twenty-seven (27) days after said receipt or on 28 July 1995. Clearly, the instant petition was filed well within the reglementary period provided by law. Having settled that, we now address the substantive issue involved in this case, i.e., whether the NLRC acted with grave abuse of discretion amounting to lack or excess of jurisdiction in reversing the decision of the labor arbiter and ruling that petitioner was validly dismissed. We rule in favor of petitioner. The issue of whether petitioner was validly dismissed is a factual one and generally, factual findings of the NLRC are accorded respect. In this case, however, there is compelling reason to deviate from this salutary principle because the findings of facts of the NLRC are in conflict with that of the labor arbiter. Accordingly, this Court must of necessity review the records to determine which findings should be preferred as more conformable to the 6 evidentiary facts.

To constitute valid dismissal, two (2) requisites must be met: (1) the dismissal must be for any of the causes expressed in Article 282 of the Labor Code; 7 and (2) the employee must be given an opportunity to be heard and defend himself. Article 282 of the Labor Code provides: 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 e. Other causes analogous to the foregoing. As borne by the records, petitioner's dismissal was brought about by the utterances he made during an informal Christmas gathering of respondent company's Sales and Marketing Division on 17 December 1993. Petitioner was heard to have uttered, "Si EDT (referring to Epitacio D. Tiaong, General Manager and President of respondent company), bullshit yan," "sabihin mo kay EDT yan" and "sabihin mo kay EDT, bullshit yan," while making the "dirty finger" gesture. Petitioner likewise told his co-employees that the forthcoming national sales conference of respondent company would be a "very bloody one." The NLRC ruled that the foregoing actuation of petitioner constituted gross misconduct warranting his dismissal. Citing jurisprudence, the NLRC held that "in terminating the employment of managerial employees, the employer is allowed a wider latitude of discretion than in the case of ordinary 8 rank-and-file." We do not agree with the findings of the NLRC. Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. The misconduct to be serious must be of such gave and aggravated character and not merely trivial and unimportant. Such misconduct, however serious, must, nevertheless, be in connection with the employee's work 9 to constitute just cause for his separation. In this case, the alleged misconduct of petitioner, when viewed in its context, is not of such serious and grave character as to warrant his dismissal. First, petitioner made the alleged offensive utterances and obscene gesture during an informal Christmas gathering of respondent company's district sales managers and marketing staff. The gathering was just a casual get-together of employees. It is to be expected during this kind of gatherings, whom tongues are more often than not loosened by liquor or other alcoholic beverages, that employees freely express their grievances and gripes against their employers. Employees should be allowed wider latitude to freely express their sentiments during these kinds of occasions which are beyond the disciplinary authority of the employer. Significantly, it does not appear in the records that petitioner possessed any ascendancy over the employees who heard his utterances as to cause demoralization in the ranks. Second, petitioner's outburst was in reaction to the decision of the management in the "Cua Lim" case. Admittedly, using the words "bullshit" and "putang ina" and making lewd gesture to express his dissatisfaction over said management decision were clearly in bad taste but these acts were not intended to malign or cast aspersion on the person of respondent company's president and general manager. The instant case should be distinguished from the previous cases where we held that the use of insulting and offensive language constituted gross 10 misconduct justifying an employee's dismissal. In De la Cruz vs. NLRC, the dismissed employee shouted "sayang ang pagka-professional mo!" and 11 "putang ina mo" at the company physician when the latter refused to give him a referral slip. In Autobus Workers' Union (AWU) vs. NLRC, the dismissed employee called his supervisor "gago ka" and taunted the latter by saying "bakit anong gusto mo, tang ina mo." In these cases, the dismissed employees personally subjected their respective superiors to the foregoing verbal abuses. The utter lack of respect for their superiors was patent. In contrast, when petitioner was heard to have uttered the alleged offensive words against respondent company's president and general manager, the latter was not around. 12 In Asian Design and Manufacturing Corporation vs. Deputy Minister of Labor, the dismissed employee made false and malicious statements against the foreman (his superior) by telling his co-employees: "If you don't give a goat to the foreman you will be terminated. If you want to remain in this company, you have to give a goat." The dismissed employee therein likewise posted a notice in the comfort room of the company premises which read: "Notice to all Sander - Those who want to remain in this company, you must give anything to your foreman. Failure to do so will be terminated Alice 13 80." In Reynolds Philippine Corporation vs. Eslava, the dismissed employee circulated several letters to the members of the company's board of directors calling the executive vice-president and general manager a "big fool," "anti-Filipino" and accusing him of "mismanagement, inefficiency, lack of planning and foresight, petty favoritism, dictatorial policies, one-man rule, contemptuous attitude to labor, anti-Filipino utterances and activities." In this case, the records do not show that petitioner made any such false and malicious statements against any of his superiors. Third, respondent company itself did not seem to consider the offense of petitioner serious and grave enough to warrant an immediate investigation on the matter. It must be recalled that petitioner uttered the alleged offensive language at an informal gathering on 17 December 1993. He then allegedly made threatening remarks about the forthcoming sales conference on 3 January 1994. During a meeting on 4 January 1994, Mr. Titong, Jr., the president and general manager of respondent company and allegedly to whom the offensive words were directed, merely admonished petitioner stating that, "when there is a disagreement, act in a professional and civilized manner." Respondent company allowed several weeks to pass before it deemed it necessary to require petitioner to explain why no disciplinary action should be taken against him for his behavior. This seeming lack of urgency on the part of respondent company in taking any disciplinary action against petitioner negates its charge that the latter's misbehavior constituted serious misconduct. 14 Further, respondent company's rules and regulations provide as follows: NATURE OF THE OFFENSE 1. . . . 2. Loafing or loitering, engaging in fistcuffs or loudmouthed quarreling or provoking or engaging others to such behaviour, inflicting bodily harm to another, any violent act or language which affects adversely morals, production or the maintenance of discipline, indecent or immoral conduct during working hours; unauthorized participation in activities during official hours which are outside of regularly assigned duties: malingering; unauthorized absence such as undertime; going on sick leave although not actually sick; frequently receiving visitors during official hours for personal matter. 3. Willful and intentional refusal without valid reason to accept work or follow specific instructions; disrespect; insolence; and like behavior towards a superior authority of a high ranking officer of the company. PENALTIES First Offense: Verbal reminder Second Offense: Written reprimand Third offense: Payroll deduction for time not worked due offenses. Review with Dept. Head with written follow up.

Fourth Offense: 2nd written reprimand with warning of suspension. Fifth Offense: Suspension and final rapimand with warning of dismissal if reoccurs. Sixth Offense: Dismissal Petitioner's conduct on 17 December 1993 may be properly considered as falling under either paragraph number 2, i.e., use of violent language, or paragraph number 3, i.e., insolence or disrespect towards a superior authority. Being a first offense, the appropriate penalty imposable on petitioner is only a "verbal reminder" and not dismissal. Indeed, the penalty of dismissal is unduly harsh considering that petitioner had been in the employ of respondent company for eleven (11) years and it does not appear that he had a previous derogatory record. It is settled that notwithstanding the existence of a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal should not be imposed, as it is too severe a penalty if the latter had been employed for a considerable 15 length of time in the service of his employer, and such employment is untainted by any kind of dishonesty and irregularity. This concern of the Court for the termination of employment even on the assumption that conduct far from exemplary was indulged in was made 16 evident in the case of Almira vs. B.F. Goodrich Philippines, Inc., where this Court held: It would imply at the very least that where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe. It is not only because of the law's concern for the workingman. There is, in addition, his family to consider. Unemployment brings untold hardships and sorrows on those dependent on the wage-earner. The misery and pain attendant on the loss ofbs then could be avoided if there be acceptance of the view that under all circumstances of this case, petitioners should not be deprived of their means of livelihood. Nor is this to condone what had been done by them. For all this while, since private respondent considered them separated from the service, they had not been paid. From the strictly juridical standpoint, it cannot be too strongly stressed, to follow Davis in his masterly work, Discretionary Justice, that where a decision may be made to rest on informed judgment rather than rigid rules, all the equities of the case must be 17 accorded their due weight. Given the environmental circumstances of this case, the acts of petitioner clearly do not constitute serious misconduct as to justify his dismissal. Neither is his dismissal justified on ground of loss of confidence. As a ground for dismissal, the term "trust and confidence" is restricted to managerial 18 employees. We share the view of the Solicitor General that petitioner is not a managerial employee. Before one may be properly considered a managerial employee, all the following conditions must be met: (1) Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof; (2) They customarily and regularly direct the work of two or more employees therein; (3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as 19 to the promotion or any other change of status of other employees we given particular weight. Further, it is the nature of the employee's functions, and not the nomenclature or title given to hisb, which determines whether he has rank-and-file, 20 supervisory or managerial status. Petitioner describes his functions as District Sales Manager as follows: The office of a District Sales Manager's primary responsibility is to achieve or surpass the sales and profit targets for each territory in the assigned district through: (a) efficient planning; (b) management function; and (c) auditing and control. "Management action," on the other hand, means to direct the activities of the Professional Medical Representatives [by]: (1) [making] decisions that are compatible with district, national and corporate objectives; (2) [directing] the activities of representative through (a) frequent field visits (must spend at least 80% of working days in a quarter, allocating eight (8) working days per PMR/quarter excluding travel time); (b) written communications; (c) sales meetings (3) [training] PMRs in medical/product knowledge; (4) [motivating] and [developing] PMRs toward greater productivity; (5) [acting] as a channel between field and home office; (6) [maintaining] records as basis for quick analysis of the district performance; (7) [overseeing] special projects assuring the cost benefit value of such benefit; (8) . . . suggesting to sales management new ideas, methods, devices to increase productivity of sales district or individual properties; 21 and [insuring] safe custody and proper maintenance of all company properties (e.g. company cars, audio-visuals). The aboveb description does not mention that petitioner possesses the power "to lay down policies nor to hire, transfer, suspend, lay off recall, discharge, assign or discipline employees." Absent this crucial element, petitioner cannot be considered a managerial employee despite his designation as District Sales Manager. Granting arguendo that petitioner were to be considered a managerial employee, the ground for "loss of confidence" is still without basis. Loss of trust 22 and confidence to be a valid ground for an employee's dismissal must be clearly established. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer's arbitrariness, whims, caprices or suspicion, otherwise, the employee would remain at the mercy of the 23 employer. When petitioner made the offensive utterances, it can be said that he merely acted "carelessly, thoughtlessly or heedlessly" and not "intentionally, knowingly, purposely, or without justifiable excuse." In fine, there being no just cause for petitioner's dismissal, the same is consequently unlawful. Petitioner is thus entitled to reinstatement to his position as District Sales Manager, unless such position no longer exists, in which case he shall be given a substantially equivalent position without loss of seniority rights. He is likewise entitled to the payment of his full backwages. With respect to petitioner's other monetary claims, however, we agree with the findings of the labor arbiter that he failed to establish his entitlement thereto. We quote with approval the labor arbiter's pertinent findings as follows: Anent the monetary claims of complainant for payment of the holiday pay and the cash equivalent of the rice subsidy for the period April 1990 to December 1992 vis-a-vis the documentary evidence available on records (Annexes "H" and "I") this Office is inclined to deny said claims for failure of the complainant to substantially and convincingly prove the same. When complainant was appointed District Sales Manager effective April 1, 1990, his salary was increased by PESOS: Two Thousand Five Hundred Only (P2,500.00) (Annex "H") in accordance with respondent's "Salary Administrative Policy". Again, effective January 1, 1993, complainant's salary was increased by PESOS: One Thousand One Hundred Four, so much so that in the span of two (2) years, complainant's salary reached the amount of Twenty Thousand Five Hundred Thirty Six (P20,536.00) Pesos which lends credence to the position 24 of the respondent SPC that said claims for holiday pay and rice subsidy is already integrated in complainant's salary. WHEREFORE, the instant petition is GRANTED. The Decision, dated 17 March 1995, and Resolution, dated 10 May 1995, of the NLRC in the consolidated cases of NLRC NCR-00-01-00652-94 and NLRC NCR-00-02-00887-94 are REVERSED and SET ASIDE. The Decision, dated 25 August 1994, of the labor arbiter is REINSTATED. SO ORDERED. 16. Republic of the Philippines SUPREME COURT Manila

SECOND DIVISION G.R. No. 125031 January 24, 2000 PERMEX INC. and/or JANE (JEAN) PUNZALAN, PERSONNEL MANAGER and EDGAR LIM, MANAGER, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and EMMANUEL FILOTEO, respondents. QUISUMBING, J.: This special civil action for certiorari impugns the Resolution of the National Labor Relations Commission, Fifth Division, dated March 14, 1996, which reversed the decision of the Labor Arbiter in NLRC Case No. RAB-09-00259-94, as well as its Resolution, dated April 17, 1996, denying the motion for reconsideration. Petitioner, Permex Producer and Exporter Corporation (hereinafter Permex), is a company engaged in the business of canning tuna and sardines, both for export and domestic consumption. Its office and factory are both located in Zamboanga City. 1 Co-petitioners Edgar Lim and Jean Punzalan are its Manager and Personnel Manager, respectively. Private respondent Emmanuel Filoteo, an employee of Permex, was terminated by petitioners allegedly for flagrantly and deliberately violating company rules and regulations. More specifically, he was dismissed allegedly for falsifying his daily time record. The pertinent facts, as found by both the NLRC and the Labor Arbiter, are as follows: Permex initially hired Emmanuel Filoteo on October 1, 1990, as a mechanic. Eventually, Filoteo was promoted to water treatment operator, a position he held until his termination on August 29, 1994. As water treatment operator, Filoteo did not have a fixed working schedule. His hours of work were dependent upon the company's shifting production schedules. On July 31, 1994, Filoteo was scheduled for the night shift from 7:00 p.m. to 7:00 a.m. the following day. That night he reported for work together with his co-workers, Felix Pelayo and Manuel Manzan. They logged in at the main gate and guardhouse of the petitioner's factory. Filoteo entered his time-in at 8:45 p.m. and since he was scheduled to work until 7:00 a.m. the next day, he wrote 7:00 a.m. in his scheduled time-out. This practice of indicating the time out at the moment they time in, was customarily done by most workers for convenience and practicality since at the end of their work shift, they were often tired and in a hurry to catch the available service vehicle for their trip home, so they often forgot to log out. There were times also when the Log Book was brought to the Office of the Personnel Manager and they could not enter their time out. The company had tolerated the practice.1wphi1.nt On the evening of July 31, 1994, at around 9:20 p.m., Filoteo, together with Pelayo, went to see the Assistant Production Manager to inquire if "butchering" of fish would be done that evening so they could start operating the boiler. They were advised to wait from 9:30 p.m. to 10:00 p.m. for confirmation. At or about 10:00 p.m., Filoteo and Pelayo went back to the Assistant Production Manager's office. There they were informed that there would be no "butchering" of tuna that night. Filoteo then sought permission to go home, which was granted. Filoteo then hurriedly got his things and dashed off to the exit gate to catch the service jeep provided by Permex. The next day, August 1, 1994, Filoteo reported for work as usual. He then remembered that he had to make a re-entry in his daily time record for the previous day. He proceeded to the Office of the Personnel Manager to retime his DTR entry. Later, he received a memorandum from the Assistant Personnel Officer asking him to explain, in writing, the entry he made in his DTR. Filoteo complied and submitted his written explanation that same evening. On August 8, 1994, Filoteo was suspended indefinitely. His explanation was found unsatisfactory. He was dismissed from employment on August 23, 1994. The dismissal arose from Filoteo's alleged violation of Article 2 of the company rules and regulations. The offense charged was entering in his DTR that he had worked from 8:45 p.m. of July 31, 1994 to 7:00 a.m. of August 1, 1994, when in fact he had worked only up to 10:00 p.m. On September 5, 1994, Filoteo filed a complaint for illegal dismissal with claims for separation pay, damages, and attorney's fees with the Labor Arbiter. His complaint was docketed as NLRC Case No. RAB 09-09-00259-94. On June 9, 1995, the Labor Arbiter dismissed the complaint for lack of merit. The decretal portion of the decision reads: WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered dismissing the complaint for lack of merit. However, for violation of compliance of (sic) procedural due process, the respondent is hereby ordered thru its Authorized Officer to pay complainant P1,000.00 by way of indemnity pay. Furthermore, complainant's claims for damages and attorney's fees be dismissed for lack of merit. 2 SO ORDERED. Filoteo appealed to the NLRC. Finding merit therein, the Commission's Fifth Division promulgated its resolution, reversing and setting aside the Labor Arbiter's decision, by disposing as follows: WHEREFORE, the decision appealed from, is Vacated and Set Aside and a new one entered declaring the complainant to have been illegally dismissed by respondent company. Accordingly, respondent Permex, Inc., through its corporate officers, is hereby ordered and directed to pay complainant, Emmanuel Filoteo, separation pay at the rate of one (1) month salary for every year of service or in the equivalent of four (4) months separation pay and backwages effective August 23, 1994 up to the promulgation of this decision, inclusive of fringe benefits, if any. Further, respondent company is ordered to pay complainant moral and exemplary damages in the sum of P10,000.00 and P5,000.00, respectively, as well as attorney's fees equivalent to ten (10%) percent of the total monetary award after computation thereof at the execution stage. 3 SO ORDERED. On April 3, 1996, petitioners filed a motion for reconsideration. It was denied for lack of merit by the NLRC in a resolution dated April 17, 1996. Hence, the present petition, assigning the following errors: I PUBLIC RESPONDENT'S RESOLUTIONS ARE CONTRARY TO THE EVIDENCE ON RECORD AND ADMITTED FACTS. II PUBLIC RESPONDENT ERRED WHEN IT RULED THAT PRIVATE RESPONDENT WAS ILLEGALLY DISMISSED. III PUBLIC RESPONDENT ERRED WHEN IT AWARDED PRIVATE RESPONDENT SEPARATION PAY, BACKWAGES, DAMAGES AND ATTORNEY'S FEES SANS FACTUAL AND LEGAL BASIS. We will now consider these assigned errors to resolve the principal issue of whether or not private respondent was illegally terminated from his employment. Note that, firstly, petitioners seek a reversal of the public respondent's findings of the facts. But as the Court has repeatedly ruled the findings of facts of 4 the NLRC, particularly where the NLRC and the Labor Arbiter are in agreement, are deemed binding and conclusive upon the Court. For the Court is not a 5 trier of facts. Second, resort to judicial review of the decisions of the NLRC in a special civil action for certiorari under Rule 65 of the Rules of Court, is

limited only to the question generally of grave abuse of discretion amounting to lack or excess of jurisdiction. Thirdly, in this case, the NLRC's factual findings are supported by the evidence on record. We are therefore constrained not to disturb said findings of fact. 7 Whether private respondent was illegally dismissed or not is governed by Article 282 of the Labor Code. To constitute a valid dismissal from employment, two requisites must concur: (a) the dismissal must be for any of the causes provided for in Article 282 of the Labor Code; and (b) the employee must be 8 afforded an opportunity to be heard and defend himself. This means that an employer can terminate the services of an employee for just and valid 9 causes, which must be supported by clear and convincing evidence. It also means that, procedurally, the employee must be given notice, with adequate 10 opportunity to be heard, before he is notified of his actual dismissal for cause. In the present case, the NLRC found that the two-fold requirements for a valid dismissal were not satisfied by the petitioners. First, petitioner's charge of serious misconduct of falsification or deliberate misrepresentation was not supported by the evidence on the record contrary to Art. 277 of the Labor Code which provides that: Art. 277. Miscellaneous provisions. xxxxxxxxx (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause. . . The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. . . Second, the private respondent was not afforded an opportunity to be heard. As found by the NLRC: . . . Aside from the fact that there was no valid and justifiable cause for his outright dismissal from the service, complainant's dismissal as correctly held by the Labor Arbiter was tainted with arbitrariness for failure of respondent company (petitioner herein) to observe procedural due process in effecting his dismissal. Admittedly, complainant was suspended indefinitely on August 8, 1994 and subsequently dismissed on August 23, 1994 without any formal 11 investigation to enable complainant to defend himself. Such dismissal, in our view, was too harsh a penalty for an unintentional infraction, not to mention that it was his first offense committed without malice, 12 and committed also by others who were not equally penalized. It is clear that the alleged false entry in private respondent's DTR was actually the result of having logged his scheduled time-out in advance on July 31, 1994. But it appears that when he timed in, he had no idea that his work schedule (night shift) would be cancelled. When it was confirmed at 10:00 p.m. that there was no "butchering" of tuna to be done, those who reported for work were allowed to go home, including private respondent. In fact, Filoteo even obtained permission to leave from the Assistant Production Manager. Considering the factory practice which management tolerated, we are persuaded that Filoteo, in his rush to catch the service vehicle, merely forgot to correct his initial time-out entry. Nothing is shown to prove he deliberately falsified his daily time record to deceive the company. The NLRC found that even management's own evidence reflected that a certain Felix Pelayo, a co-worker of private respondent, was also allowed to go home that night and like private respondent logged in advance 7:00 a.m. as his time-out. This supports Filoteo's claim that it was common practice among night-shift workers to log in their usual time-out in advance in the daily time record. Moreover, as early as Tide Water Associated Oil Co. v. Victory Employees and Laborers' Association, 85 Phil. 166 (1949), we ruled that, where a violation of company policy or breach of company rules and regulations was found to have been tolerated by management, then the same could not serve as a basis for termination. All told we see no reason to find that the NLRC gravely abused its discretion when it ruled that private respondent was illegally dismissed. Hence we concur in that ruling. Nonetheless, we find that the award of moral and exemplary damages by the public respondent is not in order and must be deleted. Moral damages are recoverable only where the dismissal of the employee was tainted by bad faith or fraud, or where it constituted an act oppressive to 13 labor, and done in a manner contrary to morals, good customs, or public policy. Exemplary damages may be awarded only if the dismissal was done in a 14 wanton, oppressive, or malevolent manner. None of these circumstances exist in the present case. WHEREFORE, the petition is DENIED. The assailed resolutions of the National Labor Relations Commission dated March 14, 1996 and April 17, 1996 in NLRC CA No. M-002808-95 are AFFIRMED with MODIFICATION. Petitioner Permex, through its corporate officers, is ORDERED to pay jointly and solidarily the private respondent separation pay at the rate of one (1) month salary for every year of service as well as backwages effective August 23, 1994, inclusive of fringe benefits if any, with legal interest until fully paid, and attorney's fees equivalent to ten (10%) percent of the total monetary award computed at the execution stage hereof. The award of moral and exemplary damages, however, is DELETED. Costs against petitioners.1wphi1.nt SO ORDERED.