Labrel Art 282

LABREL | CASE DIGEST | ART 282
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Lolita S. Concepcion v. Minex Import Corporation
G.R. No. 153569
January 24, 2012
Bersamin, J.

Case Doctrine:
The employer may validly dismiss for loss of trust and confidence an
employee who commits an act of fraud prejudicial to the interest of
the employer. Neither a criminal prosecution nor a conviction beyond
reasonable doubt for the crime is a requisite for the validity of the
dismissal. Nonetheless, the dismissal for a just or lawful cause must
still be made upon compliance with the requirements of due process
under the Labor Code; otherwise, the employer is liable to pay
nominal damages as indemnity to the dismissed employee.

Facts:
Respondent Minex Import-Export Corporation (Minex) employed the
petitioner initially as a salesgirl, rotating her assignment among nearly
all its outlets. She was assigned at SM Harrison Plaza kiosk with the
instruction to hold the keys of the kiosk. On November 9, 1997, the
petitioner and her salesgirls had sales of crystal items
totaling P39,194.50. At the close of business that day, they
conducted a cash-count of their sales proceeds, including those from
the preceding Friday and Saturday, and determined their total for the
three days to be P50,912.00. The petitioner wrapped the amount in a
plastic bag and deposited it in the drawer of the locked wooden
cabinet of the kiosk. At about 9:30 am of November 10, 1997, the
petitioner phoned Vina Mariano to report that the P50,912.00 was
missing, explaining how she and her salesgirls had placed the
wrapped amount at the bottom of the cabinet the night before, and
how she had found upon reporting to work that morning that the
contents of the cabinet were in disarray and the money already
missing.
Later, while the petitioner was giving a detailed statement on the theft
to the security investigator of Harrison Plaza, Vina and Sylvia
Mariano, her superiors, arrived with a policeman who immediately
placed the petitioner under arrest and brought her to Precinct 9 of the
Malate Police Station. There, the police investigated her. She was
detained for a day, from 11:30 am of November 10, 1997 until 11:30
am of November 11, 1997, being released only because the inquest
prosecutor instructed so. On November 12, 1997, the petitioner
complained against the respondents for illegal dismissal in the
Department of Labor and Employment. On November 14, 1997,
Minex, through Vina, filed a complaint for qualified theft against the
petitioner in the Office of the City Prosecutor in Manila.

Issue: Whether or not the employer denied the employee
dismissed with due process and thu liable for damages?

Ruling:
Yes. To dismiss an employee, the law requires the existence of a
just and valid cause. Article 282 of the Labor Code enumerates
the just causes for termination by the employer: (a) serious
misconduct or willful disobedience by the employee of the lawful
orders of his employer or the latters representative in connection with
the employees 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 his 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.
Indeed, the employer is not expected to be as strict and rigorous as a
judge in a criminal trial in weighing all the probabilities of guilt before
terminating the employee. Unlike a criminal case, which necessitates
a moral certainty of guilt due to the loss of the personal liberty of the
accused being the issue, a case concerning an employee suspected
of wrongdoing leads only to his termination as a consequence. The
quantum of proof required for convicting an accused is thus higher
proof of guilt beyond reasonable doubt than the quantum
prescribed for dismissing an employee substantial evidence. In so
stating, we are not diminishing the value of employment, but only
noting that the loss of employment occasions a consequence lesser
than the loss of personal liberty, and may thus call for a lower degree
of proof.
Yet, even as we now say that the respondents had a just or valid
cause for terminating the petitioner, it becomes unavoidable to ask
whether or not they complied with the requirements of due process.
The petitioner plainly demonstrated how quickly and summarily her
dismissal was carried out without first requiring her to explain
anything in her defense as demanded under Section 2 (d) of Rule I of
the Implementing Rules of Book VI of the Labor Code. Instead, the
respondents forthwith had her arrested and investigated by the police
authorities for qualified theft. This, we think, was a denial of her right
to due process of law, consisting in the opportunity to be heard and to
defend herself. In fact, their decision to dismiss her was already final
even before the police authority commenced an investigation of the
theft, the finality being confirmed by no less than Sylvia Mariano
herself telling the petitioner during their phone conversation following
the latters release from police custody on November 11, 1997 that
she (Sylvia) no longer wanted to see her.
The fair and reasonable opportunity required to be given to the
employee before dismissal encompassed not only the giving to the
employee of notice of the cause and the ability of the employee to
explain, but also the chance to defend against the accusation. This
was our thrust in Philippine Pizza, Inc. v. Bungabong, where we held
that the employee was not afforded due process despite the
dismissal being upon a just cause, considering that he was not given
a fair and reasonable opportunity to confront his accusers and to
defend himself against the charge of theft notwithstanding his having
submitted his explanation denying that he had stolen beer from the
company dispenser. The termination letter was issued a day before
the employee could go to the HRD Office for the investigation, which
made it clear to him that the decision to terminate was already final
even before he could submit his side and refute the charges against
him. Nothing that he could say or do at that point would have
changed the decision to dismiss him. Such omission to give the
employee the benefit of a hearing and investigation before his
termination constituted an infringement of his constitutional right to
due process by the employer.
Where the dismissal is for a just cause, as in the instant case, the
lack of statutory due process should not nullify the dismissal, or
render it illegal, or ineffectual. However, the employer should
indemnify the employee for the violation of his statutory rights, as
ruled in Reta v. National Labor Relations Commission. The indemnity
to be imposed should be stiffer to discourage the abhorrent practice
of dismiss now, pay later, which we sought to deter in
the Serrano ruling. The sanction should be in the nature of
indemnification or penalty and should depend on the facts of each
case, taking into special consideration the gravity of the due process
violation of the employer.
The violation of the petitioners right to statutory due process by the
private respondent warrants the payment of indemnity in the form of
nominal damages. The amount of such damages is addressed to the
sound discretion of the court, taking into account the relevant
circumstances. Considering the prevailing circumstances in the case
at bar, we deem it proper to fix it at P30,000.00. We believe this form
of damages would serve to deter employers from future violations of
the statutory due process rights of employees. At the very least, it
provides a vindication or recognition of this fundamental right granted
to the latter under the Labor Code and its Implementing Rules.

DREAMLAND HOTEL RESORT and WESTLEY J. PRENTICE,
Petitioners, vs. STEPHEN B. JOHNSON, Respondent.
PETIONERS CLAIM:
Dreamland Hotel Resort (Dreamland) and its President, Westley J.
Prentice (Prentice) (petitioners) alleged the following facts in the
instant petition:
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Dreamland is a corporation duly registered with the Securities and
Exchange Commission It is engaged in the hotel, restaurant and
allied businesses. Respondent Stephen B. Johnson is an Australian
citizen who came to the Philippines as a businessman/investor
without the authority to be employed as the employee/officer of any
business as he was not able to secure his Alien Employment Permit
["AEP"]
As a fellow Australian citizen, Johnson was able to convince Prentice
to accept his offer to invest in Dreamland and at the same time
provide his services as Operations Manager of Dreamland with a
promise that he will secure an AEP and Tax Identification Number
["TIN" for brevity] prior to his assumption of work.
Sometime on June 21, 2007, Prentice and Johnson entered into an
Employment Agreement, which stipulates among others, that the
Johnson shall serve as Operations Manager of Dreamland from
August 1, 2007 and shall serve as such for a period of three (3)
years.
Before entering into the said agreement, Prentice required the
submission of the AEP and TIN from Johnson. Johnson promised
that the same shall be supplied within one (1) month from the signing
of the contract because the application for the TIN and AEP were still
under process. Thus[,] it was agreed that the efficacy of the said
agreement shall begin after one (1) month or on August 1, 2007. x x
Johnson worked as a hotel and resort Operations Manager only at
that time. He worked for only about three (3) weeks until he suddenly
abandoned his work and subsequently resigned as Operations
Manager starting November 3, 2007. He never reported back to work
despite several attempts of Prentice to clarify his issues.
RESPONDENTS CLAIM:
Respondent Stephen B. Johnson (Johnson) averred that:
There is also no truth to the allegation that it was [Johnson] who
"offered" and "convinced" petitioner Prentice to "invest" in and
provide his services to petitioner Dreamland Hotel Resort. The truth
of the matter is that it was petitioners who actively advertised for a
resort manager for Dreamland Hotel.
It was in response to these advertisements that private respondent
Johnson contacted petitioners to inquire on the terms for employment
offered. It was Prentice who offered employment and convinced
Johnson to give out a loan, purportedly so the resort can be
completed and operational by August 2007. Believing the
representations of petitioner Prentice, private respondent Johnson
accepted the employment as Resort Manager and loaned money to
petitioners [consisting of] his retirement pay in the amount of One
Hundred Thousand US Dollars (USD 100,000.00) to finish
construction of the resort.
From the start of August 2007, as stipulated in the Employment
Agreement, respondent Johnson already reported for work. It was
then that he found out to his dismay that the resort was far from
finished. However, he was instructed to supervise construction and
speak with potential guests.
As [Johnson] remained unpaid since August 2007 and he has loaned
all his money to petitioners, he asked for his salary after the resort
was opened in October 2007 but the same was not given to him by
petitioners. [Johnson] became very alarmed with the situation as it
appears that there was no intention to pay him his salary, which he
now depended on for his living as he has been left penniless. He was
also denied the benefits promised him as part of his compensation
such as service vehicles, meals and insurance.
On January 31, 2008, Johnson filed a Complaint for illegal dismissal
and non-payment of salaries, among others, against the petitioners.
Labor Arbiter dismissed Johnsons complaint for lack of merit with the
finding that he voluntarily resigned from his employment and was not
illegally dismissed. We quote:
There being competent, concrete and substantial evidence to confirm
the voluntary resignation of [Johnson] from his employment, there
was no illegal dismissal committed against him and for him to be
entitled to reinstatement to his former position and backwages.
Dissatisfied, Johnson appealed to the National Labor Relations
Commission (NLRC).
The NLRC REVERSED the decision.
Consequently, the petitioners elevated the NLRC decision to the CA
by way of Petition for Certiorari with Prayer for the Issuance of a
Temporary Restraining Order and/or Writ of Preliminary Injunction
under Rule 47.
The CA DISMISSED the petition for lack of proof of authority and
affidavit of service of filing as required by Section 13 of the 1997
Rules of Procedure. The subsequent motion for reconsideration filed
by the petitioners was likewise denied by the CA in a Resolution
dated February 11, 2010.
ISSUE:
1. WETHER OR NOT THE HONORABLE [CA] COMMITTED A
REVERSIBLE ERROR IN NOT GIVING DUE CONSIDERATION TO
THE MERITS OF THE PETITIONERS PETITION AND IN NOT
GRANTING THEIR PRAYER FOR TEMPORARY RESTRAINING
ORDER.
HELD: The petition is partially granted.
At its inception, the Court takes note of the Resolutions dated
December 14, 2009 and February 11, 2010 of the CA dismissing the
Petition for Certiorari due to the following infirmities:
1. The affiant has no proof of authority to file the petition in behalf of
petitioner Dreamland.
2. The petition has no appended affidavit of service to show proof of
service of filing as required by Sec. 13 of the 1997 Rules of Civil
Procedure.
"While it is desirable that the Rules of Court be faithfully observed,
courts should not be so strict about procedural lapses that do not
really impair the proper administration of justice. If the rules are
intended to ensure the proper and orderly conduct of litigation, it is
because of the higher objective they seek which are the attainment of
justice and the protection of substantive rights of the parties. Thus,
the relaxation of procedural rules, or saving a particular case from the
operation of technicalities when substantial justice requires it, as in
the instant case, should no longer be subject to cavil."
Brushing aside technicalities, in the utmost interest of substantial
justice and taking into consideration the varying and conflicting
factual deliberations by the LA and the NLRC, the Court shall now
delve into the merits of the case.
As it could not be determined with absolute certainty whether or not
Johnson rendered the services he mentioned during the material
time, doubt must be construed in his favor for the reason that "the
consistent rule is that if doubt exists between the evidence presented
by the employer and that by the employee, the scales of justice must
be tilted in favor of the latter." For the petitioners failure to disprove
that Johnson started working on August 1, 2007, as stated on the
employment contract, payment of his salaries on said date, even prior
to the opening of the hotel is warranted.
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Another argument posited by the petitioners is that the employment
contract executed by the parties is inefficacious because the
employment contract is subject to the presentation of Johnson of his
Alien Employment Permit (AEP) and Tax Identification Number (TIN).
Again, this statement is wanting of merit.
Johnson has adduced proof that as a permanent resident, he is
exempted from the requirement of securing an AEP as expressed
under Department Order No. 75-06, Series of 2006 of the Department
of Labor and Employment (DOLE), which we quote:
Rule I- Coverage and Exemption
2. Exemption. The following categories of foreign nationals are
exempt from securing an employment permit:
2.7 Resident foreign nationals
Anent the requirement of securing a TIN to make the contract of
employment efficacious, records show that Johnson secured his TIN
only on December 2007 after his resignation as operations manager.
Nevertheless, this does not negate the fact that the contract of
employment had already become effective even prior to such date.
In addition to the foregoing, there is no stipulation in the employment
contract itself that the same shall only be effective upon the
submission of AEP and TIN.
As regards the NLRC findings that Johnson was constructively
dismissed and did not abandon his work, the Court is in consonance
with this conclusion with the following basis:
Even the most reasonable employee would consider quitting his job
after working for three months and receiving only an insignificant
fraction of his salaries. There was, therefore, not an abandonment of
employment nor a resignation in the real sense, but a constructive
dismissal, which is defined as an involuntary resignation resorted to
when continued employment is rendered impossible, unreasonable or
unlikely.
The petitioners aver that considering that Johnson tendered his
resignation and abandoned his work, it is his burden to prove that his
resignation was not voluntary on his part.
It is impossible, unreasonable or unlikely that any employee, such as
Johnson would continue working for an employer who does not pay
him his salaries. Applying the Courts pronouncement in Duldulao v.
CA, the Court construes that the act of the petitioners in not paying
Johnson his salaries for three months has become unbearable on the
latters part that he had no choice but to cede his employment with
them. The Court quotes the pertinent sections of Johnsons
resignation letter which reflects the real reason why he was resigning
as operations manager of the hotel.
The statement only goes to show that while it was Johnson who
tendered his resignation, it was due to the petitioners acts that he
was constrained to resign.
Since Johnson was constructively dismissed, he was illegally
dismissed. As to the reliefs granted to an employee who is illegally
dismissed. Thus, an illegally dismissed employee is entitled to two
reliefs: backwages and reinstatement. The two reliefs provided are
separate and distinct. In instances where reinstatement is no longer
feasible because of strained relations between the employee and the
employer, separation pay is granted. In effect, an illegally dismissed
employee is entitled to either reinstatement, if viable, or separation
pay if reinstatement is no longer viable, and backwages.
The normal consequences of respondents illegal dismissal, then, are
reinstatement without loss of seniority rights, and payment of
backwages computed from the time compensation was withheld up to
the date of actual reinstatement. Where reinstatement is no longer
viable as an option, separation pay equivalent to one (1) month salary
for every year of service should be awarded as an alternative. The
payment of separation pay is in addition to payment of backwages.
Under the doctrine of strained relations, the payment of separation
pay is considered an acceptable alternative to reinstatement when
the latter option is no longer desirable or viable.
In the present case, the NLRC found that due to the strained relations
between the parties, separation pay is to be awarded to Johnson in
lieu of his reinstatement.
The NLRC held that Johnson is entitled to backwages from
November 3, 2007 up to the finality of the decision; separation pay
equivalent to one month salary; and unpaid salaries from August 1,
2007 to November 1, 2007 amounting to a total of P172,800.00.
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While the Court agrees with the NLRC that the award of separation
pay and unpaid salaries is warranted. Accordingly, the award of
backwages should be computed from November 3, 2007 to August 1,
2010 - which is three years from August 1, 2007. Furthermore,
separation pay is computed from the commencement of employment
up to the time of termination, including the imputed service for which
the employee is entitled to backwages.

As one-month salary is
awarded as separation pay for every year of service, including
imputed service, Johnson should be paid separation pay equivalent
to his three-month salary for the three-year contract.
GRAND ASIAN SHIPPING LINES, INC., EDUARDO P.
FRANCISCO and WILLIAM HOW vs. WILFREDO GALVEZ, ET AL.
G.R. No. 178184 January 29, 2014
DEL CASTILLO, J.

DOCTRINE:
The employer has broader discretion in dismissing managerial
employees on the ground of loss of trust and confidence than those
occupying ordinary ranks. While plain accusations are not sufficient to
justify the dismissal of rank and file employees, the mere existence of
a basis for believing that managerial employees have breached the
trust reposed on them by their employer would suffice to justify their
dismissal.

KEYWORDS:
Termination by Employer, Loss of Trust and Confidence, Fuel Oil,
Qualified Theft, Pilferage

FACTS:
Sometime in January 2000, one of the vessels Oilers, Richard Abis,
reported to GASLIs Office and Crewing Manager, Elsa Montegrico,
an alleged illegal activity being committed by respondents aboard the
vessel. Abis revealed that after about four to five voyages a week, a
substantial volume of fuel oil is unconsumed and stored in the
vessels fuel tanks. However, Gruta would misdeclare it as consumed
fuel in the Engineers Voyage Reports. Then, the saved fuel oil is
siphoned and sold to other vessels out at sea usually at nighttime.
Respondents would then divide among themselves the proceeds of
the sale. Abis added that he was hesitant at first to report
respondents illegal activities for fear for his life.

An investigation on the alleged pilferage was conducted.

A formal complaint for qualified theft was filed against respondents.

Meanwhile, GASLI placed respondents under preventive suspension.
After conducting administrative hearings, petitioners decided to
terminate respondents from employment. Respondents (except
Sales) were thus served with notices informing them of their
termination for serious misconduct, willful breach of trust, and
commission of a crime or offense against their employer.

It appears that several other employees and crewmembers of
GASLIs two other vessels were likewise suspended and terminated
from employment. Nine seafarers of M/T Deborah Uno were charged
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and terminated for insubordination, defying orders and refusal to take
responsibility of cargo products/fuel. For vessel M/T Coral Song, two
crewmembers were dismissed for serious act of sabotage and grave
insubordination.

Respondents and the other dismissed crewmembers of M/T Deborah
Uno and M/T Coral Song (complainants) filed with the NLRC
separate complaints for illegal suspension and dismissal,
underpayment/non-payment of salaries/wages, overtime pay,
premium pay for holiday and rest day, holiday pay, service incentive
leave pay, hazard pay, tax refunds and indemnities for damages and
attorneys fees against petitioners.

RULING OF THE LA:
The LA found that the dismissal of all 21 complainants illegal. As
regards the dismissal of herein respondents, the Labor Arbiter ruled
that the filing of a criminal case for qualified theft against them did not
justify their termination from employment.

RULING OF THE NLRC:
The NLRC found the appeal meritorious and ruled that petitioners
presented sufficient evidence to show just causes for terminating
complainants employment and compliance with due process.
Accordingly, complainants dismissal was valid, with the exception of
Sales. The NLRC adjudged petitioners to have illegally dismissed
Sales as there was absence of any record that the latter received any
notice of suspension, administrative hearing, or termination.

RULING OF THE CA:
The CA set aside the NLRCs Decision and Resolution. The CA,
nonetheless, proceeded to discuss the merits of the case insofar as
the illegal dismissal charge is concerned. The CA conformed with the
Labor Arbiters ruling that petitioners evidence was inadequate to
support the charge of pilferage and justify respondents termination.
The CA ruled that Sales was also illegally dismissed, stating that
Sales active participation in the labor case against petitioners belies
the theory that he was not terminated from employment.

The CA issued a Resolution denying petitioners Motion for
Reconsideration. Hence, this petition.

ISSUE:
Is there a valid dismissal by the employer?

RULING:
Galvez and Gruta were validly dismissed on the ground of loss
of trust and confidence; there were no valid grounds for the
dismissal of Arguelles, Batayola, Fresnillo, Noble, Dominico,
Nilmao and Austral.

In termination disputes, the burden of proving that the dismissal is for
a just or valid cause rests on the employers. Failure on their part to
discharge such burden will render the dismissal illegal.

As specified in the termination notice, respondents were dismissed
on the grounds of (i) serious misconduct, particularly in engaging in
pilferage while navigating at sea, (ii) willful breach of the trust reposed
by the company, and (iii) commission of a crime or offense against
their employer. Petitioners claim that based on the sworn statement
of Abis, joint affidavit of Bernabe and De la Rama, letter of petitioner
Francisco requesting assistance from the CIDG, formal complaint
sheet, complaint and supplementary complaint affidavit of
Montegrico, CIDGs letter referring respondents case to the Office of
the City Prosecutor of Manila, resolution of the City Prosecutor finding
a prima facie case of qualified theft, and the Information for qualified
theft, there is a reasonable ground to believe that respondents were
responsible for the pilferage of diesel fuel oil at M/T Dorothy Uno,
which renders them unworthy of the trust and confidence reposed on
them.

After examination of the evidence presented, however, the Court
found that petitioners failed to substantiate adequately the charges of
pilferage against respondents. "[T]he quantum of proof which the
employer must discharge is substantial evidence. x x x Substantial
evidence is that amount of relevant evidence as a reasonable mind
might accept as adequate to support a conclusion, even if other
minds, equally reasonable, might conceivably opine otherwise."

Here, the mere filing of a formal charge, to our mind, does not
automatically make the dismissal valid. Evidence submitted to
support the charge should be evaluated to see if the degree of proof
is met to justify respondents termination. The affidavit executed by
Montegrico simply contained the accusations of Abis that
respondents committed pilferage, which allegations remain
uncorroborated. "Unsubstantiated suspicions, accusations, and
conclusions of employers do not provide for legal justification for
dismissing employees." The other bits of evidence were also
inadequate to support the charge of pilferage. The findings made by
GASLIs port captain and internal auditor and the resulting
certification executed by De la Rama merely showed an
overstatement of fuel consumption as revealed in the Engineers
Voyage Reports. The report of Jade Sea Land Inspection Services
only declares the actual usage and amount of fuel consumed for a
particular voyage. There are no other sufficient evidence to show that
respondents participated in the commission of a serious misconduct
or an offense against their employer.

As for the second ground for respondents termination, which is loss
of trust and confidence, distinction should be made between
managerial and rank and file employees. "[W]ith respect to rank-and-
file personnel, loss of trust and confidence, as ground for valid
dismissal, requires proof of involvement in the alleged events x x x
[while for] managerial employees, the mere existence of a basis for
believing that such employee has breached the trust of his employer
would suffice for his dismissal."

In the case before us, Galvez, as the ship captain, is considered a
managerial employee since his duties involve the governance, care
and management of the vessel. Gruta, as chief engineer, is also a
managerial employee for he is tasked to take complete charge of the
technical operations of the vessel. As captain and as chief engineer,
Galvez and Gruta perform functions vested with authority to execute
management policies and thereby hold positions of responsibility over
the activities in the vessel. Indeed, their position requires the full trust
and confidence of their employer for they are entrusted with the
custody, handling and care of company property and exercise
authority over it.

Thus, the Court found that there is some basis for the loss of
confidence reposed on Galvez and Gruta. The certification issued by
De la Rama stated that there is an overstatement of fuel
consumption. Notably, while respondents made self-serving
allegations that the computation made therein is erroneous, they
never questioned the competence of De la Rama to make such
certification. Neither did they question the authenticity and validity of
the certification. Thus, the fact that there was an overstatement of
fuel consumption and that there was loss of a considerable amount of
diesel fuel oil remained unrefuted. Their failure to account for this loss
of company property betrays the trust reposed and expected of them.
They had violated petitioners trust and for which their dismissal is
justified on the ground of breach of confidence.

As for Arguelles, Batayola, Fresnillo, Noble, Dominico, Nilmao and
Austral, proof of involvement in the loss of the vessels fuel as well as
their participation in the alleged theft is required for they are ordinary
rank and file employees. And as discussed above, no substantial
evidence exists in the records that would establish their participation
in the offense charged. This renders their dismissal illegal, thus,
entitling them to reinstatement plus full backwages, inclusive of
allowances and other benefits, computed from the time of their
dismissal up to the time of actual reinstatement.

MIRANT PHIL. CORP. V. CARO
Case doctrine: Company policies and regulations are generally valid
and binding between the employer and the employee unless shown
to be grossly oppressive or contrary to law.
Facts:
Respondent Joselito Caro was a supervisor at the
Logistics and Purchasing Department of petitioner Mirant Philippines
Corporation. On the day that the corporation conducted a random
drug test where respondent was randomly chosen, having been
notified to be tested after lunch of that same day, respondent
allegedly received a phone call at around 11:30 AM alerting him that
there was a bombing incident that occurred near his wifes workplace
in Israel. Respondent notified the Secretary of his Department that he
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will be attending to the said call before anything else, as he allegedly
went to the Israelli Embassy to confirm said bombing thereafter, and
was only able to return at around 6:15 PM, when after allegedly
charging his phone, he found out that the Drug Watch Committee has
sent him a text message informing him to participate in the said drug
test. He immediately called the member of such committee who
texted him explaining the reasons of his failure to submit to the test
and proposing to submit to a drug test the next day at his own
expense.

A few days later, respondent received a Show Cause
notice from petitioner requiring him to explain why he should not be
charged with "unjustified refusal to submit to random drug testing",
penalty of which is termination under company policy. Respondent
submitted his explanation. Petitioners Investigating Panel issued an
Investigating Report, finding respondent guilty, suspending him for
four weeks without pay. However, the VP for operations, Sliman,
terminated his services.

LA found respondent to be illegally dismissed. NLRC ruled otherwise.
CA ruled in favor of respondent, stating that the penalty of dismissal
was too harsh.

Issue: Whether or not there was an illegal dismissal.

Held:

There was illegal dismissal.

First, the policy of the company was not clear on what
constitutes unjustified refusal as evidenced by the fact that the
investigating panel recommended it to the Management that it be
defined clearly and also the LA, NLRC and CA had to engage in
semantics and came up with different constructions. Thus by
jurisprudence and law, all doubts shall be resolved in favor of labor.
CA was therefore correct in pointing out that the petitioners Anti-Drug
Policy is excessive in terminating an employee for his "unjustified
refusal" to subject himself to the random drug test on first offense,
without clearly defining what amounts to an "unjustified refusal.
Secondly, the penalty of termination imposed by
petitioner corporation upon respondent fell short of being
reasonable. Company policies and regulations are generally
valid and binding between the employer and the employee
unless shown to be grossly oppressive or contrary to law. The
unreasonableness of the penalty of termination as imposed in
this case is further highlighted by a fact admitted by petitioner
corporation itself: that for the ten-year period that respondent
had been employed by petitioner corporation, he did not have
any record of a violation of its company policies.
Hence, reinstatement and backwages are awarded, along with moral
and exemplary damages with attorneys fees.

CASE TITLE : BLUER THAN BLUE JOINT
VENTURES COMPANY/MARY
ANN DELA VEGA (vs) GLYZA
ESTEBAN
KEYWORD/S : "123456" password
PONENTE : Reyes, J.
DOCTRINE : It is not the job title but the actual
work that the employee performs
that determines whether he or she
occupies a position of trust and
confidence.

FACTS: Glyza Esteban was employed in January 2004 as Sales
Clerk, and assigned at Bluer Than Blue Joint Ventures Company's
EGG boutique in SM City Marilao, Bulacan. Part of her primary tasks
were attending to all customer needs, ensuring efficient inventory,
coordinating orders from clients, cashiering and reporting to the
accounting department.
Petitioner received a report that several employees have
access to its point-of-sale (POS) system through a universal
password given by Elmer Flores. Upon investigation, it was
discovered that it was Esteban who gave Flores the password. The
petitioner sent a letter memorandum to Esteban asking her to explain
in writing why she should not be disciplinary dealt with for tampering
with the companys POS system through the use of an unauthorized
password. Esteban was also placed under preventive suspension for
10 days. Esteban admitted that she used the universal password
three times on the same day in December 2005, after she learned of
it from two other employees who she saw browsing through the
petitioners sales inquiry. She inquired how the employees were able
to open the system and she was told that they used the "123456"
password.
When Estebans preventive suspension was lifted she
also received a notice of termination was sent to her, finding her
explanation unsatisfactory and terminating her employment
immediately on the ground of loss of trust and confidence. Esteban
was given her final pay with benefits & bonuses, less inventory
variances she incurred. Esteban signed a quitclaim and release in
favor of the petitioner but she later filed a complaint for illegal
dismissal, illegal suspension, holiday pay, rest day and separation
pay.

PETITIONERS CONTENTION: Esteban is a rank-and-file employee
whose nature of work is reposed with trust and confidence. Her
unauthorized access to the POS system of the company and her
dissemination of the unauthorized password, which Esteban
admitted, is a breach of trust and confidence, and justifies her
dismissal. The preventive suspension is justified despite that the acts
were committed almost a year before the investigation since it did not
have any prior knowledge of the infraction. The CA failed to
appreciate the significance of Estebans infraction when it ruled that
suspension would have sufficed to discipline her. The deduction on
Estebans wages of the negative variances in the sales is allowed by
the Labor Code, and such practice has been widely recognized in the
retail industry.

RESPONDENTS CONTENTION: Esteban, on the other hand, avers
that the competency clause she signed with the petitioner merely
states that her main task is that of a sales clerk. As regards the
cashiering function, it merely states "to follow." Esteban claims that
the notice to explain given to her did not identify the acts or omissions
allegedly committed by her. She also contends that it was the
companys fault in not creating a strong password, and that she was
forced into signing the quitclaim and waiver.
LAsRuling: Labor Arbiter ruled in favor of Esteban and found that
she was illegally dismissed. The LA also awarded separation pay,
backwages, unpaid salary during her preventive suspension and
attorneys fees. Further, as [Esteban] was illegally suspended she is
entitled to salaries during her suspension.

NLRC Ruling: NLRC reversed the decision of the LA and dismissed
the case for illegal dismissal.

CA: On certiorari, granted Estebans petition and reinstated the LA
decision

ISSUES:
6
1. Whether or not Estebans acts constitute just cause to
terminate her employment with the company on the ground of
loss of trust and confidence.
2. Whether or not the principle of reasonable proportionality on the
wrongful acts is not applicable to respondent.
3. Whether or not the preventive suspension of respondent was
unwarranted.
4. Whether or not the wage deduction for the negative variance
unfounded

RULING:
1. 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. Esteban was employed as
a sales clerk. Aside from attending to customers and
tending to the shop, Esteban also assumed cashiering
duties. Given that she had in her care and custody the
stores property and funds, she is considered as a rank-
and-file employee occupying a position of trust and
confidence. The acts committed by Esteban do not
amount to a wilful breach of trust. She admitted that she
accessed the POS system with the use of the
unauthorized "123456" password. She did so, however,
out of curiosity and without any obvious intention of
defrauding the petitioner. Moreover, the petitioner even
admitted that Esteban has her own password to the POS
system. If it was her intention to manipulate the stores
inventory and funds, she could have done so long before
she had knowledge of the unauthorized password. But
the facts on hand show that she did not. Estebans lapse
is, at best, a careless act that does not merit the
imposition of the penalty of dismissal. That she relayed
the password to another employee is likewise
demonstrative of her mindless appreciation of her duties
as a sales clerk in the petitioners employ but absent any
showing that her acts were done with "moral
perverseness" that would justify the claimed loss of trust
and confidence attendant to her
job,http://www.lawphil.net/judjuris/juri2014/apr2014/gr_19
2582_2014.html - fnt30 the Court must sustain the
conclusion that Esteban was illegally dismissed.
2. While it may be that the acts complained of were committed by
Esteban almost a year before the investigation was conducted,
still, it should be pointed out that Esteban was performing
functions that involve handling of the petitioners property and
funds, and the petitioner had every right to protect its assets
and operations pending Estebans investigation.
3. Petitioner failed to sufficiently establish that Esteban was
responsible for the negative variance it had in its sales for the
year 2005 to 2006 and that Esteban was given the opportunity
to show cause the deduction from her last salary should not be
made. Guided by Article 113 of the Labor Code and Section 14
of the Omnibus Rules Implementing the Labor Code, the Court
cannot accept the petitioners statement that it is the practice in
the retail industry to deduct variances from an employees
salary, without more.
The petition is partially granted and the decision and resolutions of
the CA insofar as it reinstated with modification the decision of the
Labor Arbiter are affirmed. But the decision shall be reversed insofar
as it affirmed respondent Glyza Esteban's preventive suspension.
The Labor Arbiter is ordered to re-compute the monetary award in
favor of Glyza Esteban and to exclude the award of backwages
during such period of preventive suspension, if any.
MANILA JOCKEY CLUB, INC. v. AIMEE O. TRAJANO.
G.R. No. 160982 June 26, 2013

Keywords: willful breach of trust
Doctrine: The loss of trust and confidence, to be a valid ground for
dismissal, must be based on a willful breach of trust and confidence
founded on clearly established facts.
Facts: MJCI had employed Trajano as a selling teller of betting
tickets. During her shift, two regular bettors gave her their respective
lists of bets (rota) and money for the bets for Race 14. Although the
bettors suddenly left her, she entered their bets in the selling machine
and segregated the tickets for pick up by the two bettors upon their
return. Before closing time, one of the bettors (requesting bettor)
returned and asked her to cancel one of his bets worth P2,000.00.
Since she was also operating the negative machine on that day, she
obliged and immediately cancelled the bet as requested. She later
learned that it was the wrong ticket that she cancelled.She realized
her mistake, and explained to the second bettor that the cancellation
of his ticket had not been intentional, but the result of an honest
mistake on her part.
Trajano was placed under preventive suspension for an unstated
period of time after she submitted a written explanation about the
ticket cancellation incident. At the end of thirty days of her
suspension, Trajano learned that she had been dismissed.
Trajano instituted a complaint for illegal dismissal against MJCI in the
DOLE. She claimed that her dismissal was not based on any of the
grounds enumerated under Article 282 of the Labor Code.
MJCI posits that Trajano held a position of trust and confidence; that
the act of canceling the ticket was unauthorized because it was done
without the consent of the bettor.
Labor Arbiter: dismissed the complaint for illegal dismissal upon
finding that Trajanos gross negligence in the performance of her job
warranted the termination of her employment.
NLRC: reversed LA. Trajanos cancellation of the ticket was an
honest mistake that did not constitute a serious misconduct or willful
disobedience of the lawful orders of her employer; that such
cancellation did not amount to a gross and habitual neglect of duty
because her mistake was only her first offense in the nine years of
service to MJCI; and that MJCI sustained no damage.
CA: upheld the NLRC
Issue: Whether or not there was just cause when Petitioner (MJCI)
dismissed Respondent Aimee O. Trajano from the service
Held: There was no just cause for dismissal.
The loss of trust and confidence, to be a valid ground for dismissal,
must be based on a willful breach of trust and confidence 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 of the employer."
30
An
ordinary breach is not enough.
As a selling teller, Trajano held a position of trust and confidence.
Although the act complained of the unauthorized cancellation of the
ticket (i.e., unauthorized because it was done without the consent of
the bettor) was related to her work as a selling teller, MJCI did not
establish that the cancellation of the ticket was intentional, knowing
and purposeful on her part in order for her to have breached the trust
and confidence reposed in her by MJCI, instead of being only out of
an honest mistake.
Still, to justify the supposed loss of its trust and confidence in Trajano,
MJCI contends that the unauthorized cancellation of the ticket could
have greatly prejudiced MJCI for causing damage to both its income
and reputation.
7
As the records indicate, MJCIs prejudice remained speculative and
unrealized. To dismiss an employee based on speculation as to the
damage the employer could have suffered would be an injustice. The
injustice in the case of Trajano would be greater if the supposed just
cause for her dismissal was not even sufficiently established. While
MJCI as the employer understandably had its own interests to
protect, and could validly terminate any employee for a just cause, its
exercise of the power to dismiss should always be tempered with
compassion and imbued with understanding, avoiding its abuse.
32

HORMILLOSA VS COCA COLA
Doctrine: Article 282 of the Labor Code enumerates the just causes
for the termination of employment of an employee by the employer
The facts
On November 1, 1996, Hormillosa was employed as a route
salesman by Coca-Cola Bottlers Phils., Inc. (CBPI). His duties
included, among others, selling CBPIs soft drink products, either on
cash or on credit basis; receiving payments from proceeds of the
sale or payments of past due or current accounts; issuing sales
invoices; and receiving empty bottles and cases of soft drinks
(empties).
Concerning the sales invoices, he was authorized to issue them on a
cash and credit basis. He prepared the invoices stating the names of
the customers, the quantity and kind of merchandise purchased, and
the corresponding amounts. He was required to make the customers
sign the invoices, especially in cases they were on credit basis, and
leave copies with them. The invoices were then submitted to the
Finance Department for accounting.
Supervisor, Raul S. Tiosayco III (Tiosayco), conducted a verification
and audit of the accounts handled by Hormillosa. He discovered
transactions in violation of CCBPI Employee Code of Disciplinary
Rules and Regulations, specifically "Fictitious sales transactions;
Falsification of company records/data/documents/invoices/reports;
fictitious issuances of TCS/COL(Temporary Credit Sales/Container
on Loan); non-issuance or mis-issuance of invoices and receipts as
well as commercial documents to dealers; forgery; misuse, abuse or
defalcation of funds form market development program."7 On March
8, 1999, Tiosayco issued a memorandum to Hormillosa informing him
that he was being placed on grounded status and would be subjected
to an investigation.
issued another memorandum9 directing Hormillosa to report for a
question-and-answer investigation relative to the findings.
Memorandum 10 otherwise a waiver of his right to be heard.
Subsequently a termination letter was issued.
The grounds for your termination among others are as follows:
1. Issuance of fictitious and falsified COL invoices particularly to
named outlets or customers namely Shirley Jardeleza, Cecilia
Palmes, Feby Panerio, and Virgie Baares
2. Misappropriation of Company Funds
3. Violation of Company Rules and Regulations
4. Loss of Trust and Confidence
The decision to terminate you came up after a thorough investigation
against you.
Even after terminating Hormillosa, Tiosayco uncovered more
anomalies committed by him.
He further alleged that on March 8, 1999, he was immediately placed
on grounded status by Tiosayco supposedly on the basis of some
anomalous transactions conducted by him per verification and audit.
He claimed however, that the verification and audit were contrary to
Section 2(d), Article III of the Collective Bargaining Agreement (CBA)
which provides: "The Company shall coordinate with the Union
authorized representative to witness the account verification that the
company will conduct with respect to questionable accounts issued to
Company customers by route salesman or relief salesmen under
investigation." He likewise alleged that as part of the design to
destroy the union, CBPI discriminated against the officers until they
were pressured to resign.
LA: dismissed Hormillosas complaint for illegal dismissal.
NLRC:remand case to SRAB
SRAB: illegally dismissed but did not order his reinstatement
due to strained relations. It was decreed that he was entitled to
backwages from the date of his dismissal up to December
24,2008 plus a separation pay equivalent to one month pay for
every year of service with a fraction of six months being
considered one whole month.
NLRC: no substantial evidence that Hormillosa falsified and
issued fictitious invoices
Ca: validly dismissed
Ruling of the Court
Article 282 of the Labor Code enumerates the just causes for the
termination of employment of an employee by the employer, to wit:
Art. 282. Termination by employer. An employee 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.
The rule is that, in labor cases, substantial evidence or such relevant
evidence as a reasonable mind might accept as sufficient to support
a conclusion is required.
There are two (2) classes of positions of trust. The first class
consists of managerial employees. They are defined as those
vested with the powers or prerogatives to lay down management
policies and to hire, transfer suspend, lay-off, recall, discharge,
assign or discipline employees or effectively recommend such
managerial actions. The second class consists of cashiers,
auditors, property custodians, etc. They are defined as those
who in the normal and routine exercise of their functions,
regularly handle significant amounts of money or property.
x x x x
The second requisite is that there must be an act that would justify
the loss of trust and confidence. Loss of trust and confidence to be a
valid cause for dismissal must be based on a willful breach of trust
and founded on clearly established facts.
8
Hormillosa, being a route salesman, falls under the second
class. By selling soft drink products and collecting payments for the
same, he was considered an employee who regularly handled
significant amounts of money and property in the normal and routine
exercise of his functions.
We agree that route salesmen are likely individualistic personnel who
roam around selling softdrinks, deal with customers and are entrusted
with large asset and funds and property of the employer. There is a
high degree of trust and confidence reposed on them, and when
confidence is breached, the employer may take proper disciplinary
action on them. The work of a salesman exposes him to
voluminous financial transactions involving his employers
goods
With regard to the second requisite for dismissal on the ground of
loss of trust and confidence Hormillosa cannot deny that fact that he
issued sales invoices to Arnold Store, a store unregistered or
unaccredited with CBPI. He transacted with the said store using the
account of Virgie Bucaes, proprietor of Virgies Eatery. Bucaes, who
had an outlet profile with CBPI, was assigned with Control No.
0027069.22 Hormillosa extended credit to Arnold Store, an unknown
customer to CBPI, as documented by two credit sales invoices,
Invoice Nos. 79872 and 79873, amounting to P5,600.00 and
P4,806.00respectively. By doing so, he gave a false and misleading
representation that the account was that of Bucaes. CBPI had a set
of rules and regulations, one of which was that only those outlets,
which had outlet control, were entitled to enjoy credit from CBPI.
Salesmen were not allowed to extend credit to those who had no
outlet numbers or outlet profiles from CBPI. Evidently,
Hormillosa disregarded and disobeyed the company rules.
As earlier stated, the evidence in this regard was supplied by
Hormillosa himself when he submitted copies of the sales invoices.
For this reason, the stipulation under Section 2(d), Article III of the
CBA, which provides that the company shall coordinate with the
Unions authorized representative to witness the account verification
that the company would conduct with respect to questionable
accounts issued to Company customers by route salesman or relief
salesmen under investigation, is not applicable.
In the case at bench, Hormillosa's act of issuing sales invoices
to Arnold Store could not have been performed without intent
and knowledge on his part as such act could not have been
done without planning or merely through negligence. Hence, the
breach was willful.
The award of separation pay is authorized in the situations dealt
with in Article 283 and Art. 284 of the Labor Code, but not in
terminations of employment based on instances enumerated in
Art. 282
"The only cases when separation pay shall be paid, although the
employee was lawfully dismissed, are when the cause of
termination was not attributable to the employee's fault but due
to: (I) the installation of labor saving devices, (2) redundancy, (3)
retrenchment, (4) cessation of employer's business, or (5) when
the employee is suffering from a disease and his continued
employment is prohibited by law or is prejudicial to his health
and to the health of his co-employees (Articles 283 and 284,
Labor Code.) Other than these cases, an employee who is
dismissed for a just and lawful cause is not entitled to
separation pay even if the award were to be called by another
name."
ERIC V. CHUANICO, Petitioner,
vs.
LEGACY CONSOLIDATED PLANS, INC., Respondent.
G.R. No. 181852 October 9, 2013
This case is about the perceived incompetence and sloth of an Ill-
house counsel as ground for his dismissal from work.
On January 3, 2002 Legacy Plans Philippines, Inc. (Legacy Plans)
hired petitioner Eric V. Chuanico (Atty. Chuanico) as Assistant Vice-
President for legal services. He was to serve as in-house counsel for
the company and its subsidiaries under the supervision of Atty.
Christine A. Cruz (Atty. Cruz), the Senior Vice-President for Legal
Affairs. In the same year, Legacy Plans merged with Consolidated
Plans Philippines, Inc. to become Legacy Consolidated Plans, Inc.
(Legacy Consolidated), the respondent in this case. Its legal services
unit served all its affiliates.
On October 17, 2002 Atty. Cruz wrote Atty. Chuanico a
memorandum, requiring him to explain why no administrative action
should be taken against him for mishandling two cases. In the first
case he was supposed to draft an answer to a complaint for Bank of
East Asia (a Legacy Consolidated affiliate) but he belatedly drafted a
haphazard one that he gave to the handling lawyers without coursing
it to his superior. In his defense, Atty. Chuanico said that he was
given only one day within which to finish the draft. While admitting
that his superior had no opportunity to review it for lack of time, he
denied that the answer had been haphazardly done
In the second case, Atty. Chuanico was required to prepare a
complaint-affidavit for the Rural Bank of Paraaque (also a Legacy
Consolidated affiliate) against a certain De Rama but he failed to do
so. Atty. Chuanico replied that the case had not actually been turned
over to him. It was originally assigned to Atty. Dennis Amparo who
later said that the complaint-affidavit could not be prepared because
the Rural Bank had no witness.
On December 5, 2002 Legacy Consolidated dismissed Atty.
Chuanico with effect on December 20, 2002 for serious misconduct,
willful disobedience to lawful orders, gross and habitual neglect of
duties, and willful breach of trust. This prompted him to file a
complaint for illegal dismissal with claims for his unpaid December
2002 salary and 13th-month pay plus moral and exemplary damages
and attorneys fees.
LA: Legacy Consolidated guilty of illegal dismissal and awarded Atty.
Chuanico with full backwages from December 20, 2002 and
separation pay in lieu of reinstatement computed at one month pay
for every year of service inclusive of the period when the case was
pending.
Atty. Chuanico actually drafted an answer for Bank of East Asia but
the companys two new lawyers did not like it and chose to file one
that they themselves prepared. But since Legacy Consolidated
neither bothered to present Atty. Chuanicos draft answer nor
explained why it regarded the same as haphazardly done, it failed to
prove its case. It also did not present evidence that the bank filed a
late answer on account of Atty. Chuanicos fault.
As to the second charge, the LA gave credence to Atty. Dennis
Amparos sworn statement that it was to Atty. Cruz, not to Atty.
Chuanico, that he personally turned over the cases he was handling.
In one of these, the case for the Rural Bank, he had been unable to
prepare a complaint affidavit against De Rama for failure of the bank
to find a willing witness against her.
NLRC: affirmed the LAs Decision
CA: held that the NLRC committed grave abuse of discretion in
holding Legacy Consolidated guilty of illegal dismissal of Atty.
Chuanico. It affirmed, however, the award to him of P46,100.00 as
13th-month pay for 2002, it appearing that he did not receive it.

ISSUE:
Whether or not the CA erred in holding that the NLRC committed
grave abuse of discretion in finding that Legacy Consolidated illegally
9
dismissed Atty. Chuanico for mishandling the two cases alleged to
have been assigned to him.

HELD:
SC: REINSTATES the Resolution of the National Labor Relations
Commission
The CA found reasonable basis for believing that Atty. Chuanico had
breached his employers trust.1wphi1 He was not a mere rank-and-
file employee but an in-house counsel. Thus, Legacy Consolidated
enjoyed wide latitude in evaluating his work and attitude and in
terminating his employment on the ground of loss of trust and
confidence. His mishandling of the cases assigned to him shows that
he had been unfit to continue working for his employer.
But these are broad principles that do not themselves show when,
where, and how Atty. Chuanico betrayed the trust that Legacy
Consolidated gave him as in-house counsel. To be a valid cause for
dismissal, the loss of trust must be based on a willful breach of such
trust and founded on clearly established facts.
17
The company
charged him with having mishandled two things that were assigned to
him, the drafting of an answer in one and the preparation of a
complaint affidavit in the other. It failed to present proof, however, of
such mishandling.
The CA noted from an alleged copy of Atty. Chuanicos draft-answer,
belatedly submitted, that he incorrectly titled it "Answer with Cross
Party Complaint" instead of "Answer with Cross Claim" and wrote in
the explanation regarding mode of service that the pleading was an
"Answer with Third Party Complaint." But, since Legacy Consolidated
did not adduce this document at the hearing below, the CA cannot
say that the LA and the NLRC gravely abused their discretion in
failing to consider the same. Besides, the alleged error in misstating
the second part of the pleadings title is clearly of little consequence
since what mattered most in pleadings are their factual allegations,
claims, and defenses.
In the second case, Legacy Consolidated accused Atty. Chuanico of
failing to prepare a complaint-affidavit against a certain De Rama.
Atty. Chuanico denied that the matter had been assigned to him. Yet,
as the LA and the NLRC noted, Legacy Consolidated did not bother
to present some note or logbook to refute this denial. It only
presented the sworn statement of the office secretary, supposedly
competent, who relied merely on her memory for ascertaining
individual work assignments in a law practice that served a number of
affiliated companies.
Legacy Consolidated said in its Comment that certain employees
complained of Atty. Chuanico's work attitude and inefficiency. 19 But
these were not the charges that Legacy Consolidated required him to
defend himself Indeed, these charges lack the specifics of time,
place, and circumstances. Moreover, since Legacy Consolidated did
not present evidence to support such broad charges before the LA,
the Court cannot consider the same without violating Atty. Chuanico's
right to due process of law.
Lastly Atty. Chuanico was dismissed due to willful breach of trust.
Settled is the rule, however, that under Article 282(c) of the Labor
Code, the breach of trust must be willful. Ordinary breach will not be
enough. A breach is willful if it is done intentionally and knowingly
without any justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly or inadvertently. Willful breach was not
proved in this case.
ARTICLE 282

9. DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO
A. TECSON vs. GLAXO WELLCOME PHILIPPINES, INC.
KEYWORDS: relationship with employee of competitor, transfer,
constructive dismissal
PONENTE: TINGA, J.

DOCTRINE:
No less than the Constitution recognizes the right of enterprises to
adopt and enforce such a policy to protect its right to reasonable
returns on investments and to expansion and growth. Indeed, while
the laws endeavor to give life to the constitutional policy on social
justice and the protection of labor, it does not mean that every labor
dispute will be decided in favor of the workers. The law also
recognizes that management has rights which are also entitled to
respect and enforcement in the interest of fair play.

Constructive dismissal is defined as a quitting, an involuntary
resignation resorted to when continued employment becomes
impossible, unreasonable, or unlikely; when there is a demotion in
rank or diminution in pay; or when a clear discrimination, insensibility
or disdain by an employer becomes unbearable to the employee

FACTS:

Pedro Tecson was hired by respondent Glaxo Wellcome Philippines,
Inc. as a medical representative. His employment contract stipulates
that he agrees to abide by existing company rules; to disclose to
management any existing or future relationship by consanguinity or
affinity with co-employees or employees of competing drug
companies and should management find that such relationship poses
a possible conflict of interest, to resign from the company. The
Employee Code of Conduct of Glaxo similarly provides the same
provisions, further adding that if indeed management perceives an
actual or potential conflict between such relationship and the
employees employment with the company, the management and the
employee will explore the possibility of a transfer to another
department in a non-counterchecking position or preparation for
employment outside the company after six months. Tecson was
initially assigned to market Glaxos products in the Camarines Sur-
Camarines Norte sales area. Subsequently, he entered into a
romantic relationship with Bettsy, Astra Pharmaceuticals (Astra)
Branch Coordinator in Albay, said company being respondents
competitor. Despite warnings and reminders of possible conflict of
interests, Tecson married Bettsy.

When confronted with the question of which of them would resign
from their respective posts, Tecson requested for more time and
explained that with Astras upcoming merger with another drug
company, Bettsy was planning to avail of the redundancy package to
be offered by Astra and consequently with said separation, the
potential conflict of interest would be eliminated. In November 1999,
Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del
Sur sales area. Tecson asked Glaxo to reconsider its decision, but
his request was denied, causing him to bring then matter to Glaxos
Grievance Committee, but Glaxo remained firm in its decision and
gave Tescon until February 7, 2000 to comply with the transfer order.
Tecson defied the transfer order and continued acting as medical
representative in the Camarines Sur-Camarines Norte sales area.
During the pendency of the grievance proceedings, Tecson was paid
his salary, but was not issued samples of products which were
competing with similar products manufactured by Astra. He was also
not included in product conferences regarding such products.
Because the parties failed to resolve the issue at the grievance
machinery level, they submitted the matter for voluntary arbitration.

PETITIONERS CONTENTION:

Glaxos policy against employees marrying employees of competitor
companies violates the equal protection clause of the Constitution
because it creates invalid distinctions among employees on account
only of marriage. They also argue that Tecson was constructively
dismissed as shown by the following circumstances: (1) he was
transferred from the Camarines Sur-Camarines Norte sales area to
the Butuan-Surigao-Agusan sales area, (2) he suffered a diminution
in pay, (3) he was excluded from attending seminars and training
sessions for medical representatives, and (4) he was prohibited from
promoting respondents products which were competing with Astras
products.

RESPONDENTS CONTENTION:

10
Tecsons reassignment does not amount to constructive dismissal.
The prohibition is valid since as a company engaged in the promotion
and sale of pharmaceutical products, it has a genuine interest in
ensuring that its employees avoid any activity, relationship or interest
that may conflict with their responsibilities to the company and
consequently deprive Glaxo of legitimate profits. It likewise asserts
that in effecting the reassignment, it also considered the welfare of
Tecsons family since Tecsons hometown was in Agusan del Sur and
his wife traces her roots to Butuan City. Glaxo assumed that his
transfer would be favorable to him and his family as he would be
relocating to a familiar territory and minimizing his travel expenses. In
addition, Glaxo avers that Tecsons exclusion from the seminar
concerning the new anti-asthma drug was due to the fact that said
product was in direct competition with a drug which was soon to be
sold by Astra, and hence, would pose a potential conflict of interest
for him.

VA: Glaxo offered Tecson a separation pay of one-half () month
pay for every year of service, or a total of P50,000.00 but he declined
the offer.

NCMD: Declared as valid Glaxos policy and affirmed Glaxos right to
transfer Tecson to another sales territory.

CA: Denied Tecsons petition for Review, affirming NCMDs ruling.
MR was denied.

ISSUE:
1. Whether Glaxos policy against its employees marrying employees
from competitor companies is valid and does not violate the equal
protection clause of the Constitution;
2. Whether Tecson was constructively dismissed.

SC RULING:

1. YES. Glaxos policy of prohibiting an employee from having a
relationship with an employee of a competitor company is a valid
exercise of management prerogative. Glaxo has a right to guard its
trade secrets, manufacturing formulas, marketing strategies and other
confidential programs and information from competitors, especially so
that it and Astra are rival companies in the highly competitive
pharmaceutical industry. The prohibition is reasonable because
relationships of that nature might compromise the interests of the
company. In laying down the assailed company policy, Glaxo only
aims to protect its interests against the possibility that a competitor
company will gain access to its secrets and procedures. That Glaxo
possesses the right to protect its economic interests cannot be
denied. No less than the Constitution recognizes the right of
enterprises to adopt and enforce such a policy to protect its right to
reasonable returns on investments and to expansion and growth.
Indeed, while thelaws endeavor to give life to the constitutional policy
on social justice and the protection of labor, it does not mean that
every labor dispute will be decided in favor of the workers. The law
also recognizes that management has rights which are also entitled
to respect and enforcement in the interest of fair play.

2. NO. Tecson was not constructively dismissed when he was
transferred from the Camarines Norte-Camarines Sur sales area to
the Butuan City-Surigao City-Agusan del Sur sales area, and when
he was excluded from attending the companys seminar on new
products which were directly competing with similar products
manufactured by Astra. Constructive dismissal is defined as a
quitting, an involuntary resignation resorted to when continued
employment becomes impossible, unreasonable, or unlikely; when
there is a demotion in rank or diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes
unbearable to the employee. None of these conditions are present in
the instant case. Tecson was neither demoted nor unduly
discriminated upon by reason of such transfer. Glaxo properly
exercised its management prerogative in reassigning Tecson to
the Butuan City sales area. It must be noted that Tecsons wife holds
a sensitive supervisory position as Branch Coordinator in her
employer-company which requires her to work in close coordination
with District Managers and Medical Representatives, her duties
consisting of monitoring sales of Astra products, conducting sales
drives, establishing and furthering relationship with customers,
collection, monitoring, and managing Astras inventory. She therefore
takes an active participation in the market war characterized as it is
by stiff competition among pharmaceutical companies. The proximity
of their areas of responsibility, all in the same Bicol Region, renders
the conflict of interest not only possible, but actual, as learning by one
spouse of the others market strategies in the region would be
inevitable. Managements appreciation of a conflict of interest is
therefore not merely illusory and wanting in factual basis.

STAR PAPER CORPORATION, JOSEPHINE ONGSITCO &
SEBASTIAN CHUA, vs. RONALD D. SIMBOL, WILFREDA N.
COMIA & LORNA E. ESTRELLA
G.R. No. 164774; April 12, 2006

FACTS:
Petitioner Star Paper Corporation (the company) is a corporation
engaged in trading principally of paper products. Josephine
Ongsitco is the Manager of the Personnel and Administration
Department while Sebastian Chua is its Managing Director.
Respondents Ronaldo D. Simbol (Simbol), Wilfreda N. Comia
(Comia) and Lorna E. Estrella (Estrella) were all regular employees
of the company. He was employed by the company on October 27,
1993. He met Alma Dayrit, also an employee of the company, whom
he married on June 27, 1998. Prior to the marriage, Ongsitco advised
the couple that should they decide to get married, one of them should
resign pursuant to a company policy promulgated in 1995, viz.:

1. New applicants will
not be allowed to be
hired if in case he/she
has [a] relative, up to
[the] 3rd degree of
relationship, already
employed by the
company.

2. In case of two of our
employees (both
singles [sic], one male
and another female)
developed a friendly
relationship during the
course of their
employment and then
decided to get married,
one of them should
resign to preserve the
policy stated above.

Simbol resigned on June 20, 1998 pursuant to the company policy.
Comia was hired by the company on February 5, 1997. She met
Howard Comia, a co-employee, whom she married on June 1, 2000.
Ongsitco likewise reminded them that pursuant to company policy,
one must resign should they decide to get married. Comia resigned
on June 30, 2000. Estrella was hired on July 29, 1994. She met
Luisito Zuiga (Zuiga), also a co-worker. Petitioners stated that
Zuiga, a married man, got Estrella pregnant. The company allegedly
could have terminated her services due to immorality but she opted to
resign on December 21, 1999. The respondents each signed a
Release and Confirmation Agreement. They stated therein that they
have no money and property accountabilities in the company and that
they release the latter of any claim or demand of whatever nature.

Respondents offer a different version of their dismissal. Simbol and
Comia allege that they did not resign voluntarily; they were compelled
to resign in view of an illegal company policy. As to respondent
Estrella, she alleges that she had a relationship with co-worker
Zuiga who misrepresented himself as a married but separated man.
After he got her pregnant, she discovered that he was not separated.
Thus, she severed her relationship with him to avoid dismissal due to
the company policy. On November 30, 1999, she met an accident
and was advised by the doctor at the Orthopedic Hospital to
recuperate for twenty-one (21) days. She returned to work on
December 21, 1999 but she found out that her name was on-hold at
the gate. She was denied entry. She was directed to proceed to the
personnel office where one of the staff handed her a memorandum.
The memorandum stated that she
was being dismissed for immoral conduct. She refused to sign the
memorandum because she was on leave for twenty-one (21) days
and has not been given a chance to explain. The management asked
her to write an explanation. However, after submission of the
explanation, she was nonetheless dismissed by the company. Due to
her urgent need for money she later submitted a letter of resignation
in exchange for her thirteenth month pay. Respondents later filed a
11
complaint for unfair labor practice, constructive dismissal, separation
pay and attorneys fees. They averred that the aforementioned
company policy is illegal and contravenes Article 136 of the Labor
Code. They also contended that they were dismissed due to their
union membership.

On May 31, 2001, Labor Arbiter Melquiades Sol del Rosario
dismissed the complaint for lack of merit. On appeal to the NLRC, the
Commission affirmed the decision of the Labor Arbiter on January 11,
2002. Respondents filed a Motion for Reconsideration but was denied
by the NLRC in a Resolution dated August 8, 2002. They appealed to
respondent court via Petition for Certiorari. In its assailed Decision
dated August 3, 2004, the Court of Appeals reversed the NLRC
decision. On appeal to this Court, petitioners contend that the Court
of Appeals erred in holding that:

ISSUE: Whether the subject 1995 policy/regulation is violative of the
constitutional rights towards marriage and the family of employees
and of Article 136 of the Labor Code

HELD:
YES. These courts find the no-spouse employment policy invalid for
failure of the employer to present any evidence of business necessity
other than the general perception that spouses in the same
workplace might adversely affect the business. They hold that the
absence of such a bona fide occupational qualification invalidates a
rule denying employment to one spouse due to the current
employment of the other spouse in the same office. Thus, they rule
that unless the employer can prove that the reasonable demands of
the business require a distinction based on marital status and there is
no better available or acceptable policy which would better
accomplish the business purpose, an employer may not discriminate
against an employee based on the identity of the employees spouse.
This is known as the bona fide occupational qualification exception.

To justify a bona fide occupational qualification, the employer must
prove two factors: (1) that the employment qualification is reasonably
related to the essential operation of the job involved; and, (2) that
there is a factual basis for believing that all or substantially all
persons meeting the qualification would be unable to properly
perform the duties of the job. We do not find a reasonable business
necessity in the case at bar. Petitioners sole contention that "the
company did not just want to have two (2) or more of its employees
related between the third degree by affinity and/or consanguinity" is
lame. That the second paragraph was meant to give teeth to the first
paragraph of the questioned rule is evidently not the valid reasonable
business necessity required by the law.

It is significant to note that in the case at bar, respondents were hired
after they were found fit for the job, but were asked to resign when
they married a co-employee. Petitioners failed to show how the
marriage of Simbol, then a Sheeting Machine Operator, to Alma
Dayrit, then an employee of the Repacking Section, could be
detrimental to its business operations. Neither did petitioners explain
how this detriment will happen in the case of Wilfreda Comia, then a
Production Helper in the Selecting Department, who married Howard
Comia, then a helper in the cutter-machine. The policy is premised on
the mere fear that employees married to each other will be less
efficient. If we uphold the questioned rule without valid justification,
the employer can create policies based on an unproven presumption
of a perceived danger at the expense of an employees right to
security of tenure. The failure of petitioners to prove a legitimate
business concern in imposing the questioned policy cannot prejudice
the employees right to be free from arbitrary discrimination based
upon stereotypes of married persons working together in one
company. Thus, for failure of petitioners to present undisputed proof
of a reasonable business necessity, we rule that the questioned
policy is an invalid exercise of management prerogative. Corollarily,
the issue as to whether respondents
Simbol and Comia resigned voluntarily has become moot and
academic.

As to respondent Estrella, the Labor Arbiter and the NLRC based
their ruling on the singular fact that her resignation letter was written
in her own handwriting. Both ruled that her resignation was voluntary
and thus valid. The respondent court failed to categorically rule
whether Estrella voluntarily resigned but ordered that she be
reinstated along with Simbol and Comia. Estrella avers that she went
back to work on December 21, 1999 but was dismissed due to her
alleged immoral conduct. At first, she did not want to sign the
termination papers but she was forced to tender her resignation letter
in exchange for her thirteenth month pay. The contention of
petitioners that Estrella was pressured to resign because she got
impregnated by a married man and she could not stand being looked
upon or talked about as immoral is incredulous. If she really wanted
to avoid embarrassment and humiliation, she would not have gone
back to work at all. Nor would she have filed a suit for illegal dismissal
and pleaded for
reinstatement. We have held that in voluntary resignation, the
employee is compelled by personal reason(s) to dissociate himself
from employment. It is done with the intention of relinquishing an
office, accompanied by the act of abandonment. Thus, it is illogical for
Estrella to resign and then file a complaint for illegal dismissal. Given
the lack of sufficient evidence on the part of petitioners that the
resignation was voluntary, Estrellas dismissal is declared illegal.

ST. LUKES MEDICAL CENTER, INC v. ESTRELITO NOTARIO,
G.R. No. 152166, October 20, 2010
KEYWORD: CCTV CAMERA, Security Guard
CASE DOCTRINE: Under Article 282 (b) of the Labor Code, an
employer may terminate an employee for gross and habitual neglect
of duties. Neglect of duty, to be a ground for dismissal, must be both
gross and habitual. Gross negligence connotes want of care in the
performance of ones duties. Habitual neglect implies repeated failure
to perform ones duties for a period of time, depending upon the
circumstances. A single or isolated act of negligence does not
constitute a just cause for the dismissal of the employee.
FACTS: St. Lukes Medical Center, Inc., employed respondent as
In-House Security Guard. On December 30, 1996, respondent was
on duty from 6:00 p.m. to 6:00 a.m. of the following day. His work
consisted mainly of monitoring the video cameras. In the evening of
December 30, 1996, Justin Tibon, a foreigner, then attending to his 3-
year-old daughter, who was admitted in the cardiovascular unit of
petitioner hospital, reported to the management of petitioner hospital
about the loss of his mint green traveling bag, among others, two (2)
Continental Airlines tickets, two (2) passports, and some clothes.
Acting on the complaint of Tibon, the Security Department
of petitioner hospital conducted an investigation. It was shown that
the VCR was focused on camera no. 2 (Old Maternity Unit) on 9:03
p.m. to 10:15 p.m. of December 30, 1996, and camera no. 1 (New
Maternity Unit), from 12:25 a.m. to 6:00 a.m. of December 31, 1996.
The cameras failed to record any incident of theft at room 257.
On January 6, 1997, petitioner hospital directed
respondent to explain in writing why no disciplinary action should be
taken against him for violating the normal rotation/sequencing
process of the VCR. In his letter, he explained that on the subject
dates, he was the only personnel on duty as nobody wanted to assist
him. Because of this, he decided to focus the cameras on the Old and
New Maternity Units, as these two units have high incidence of crime.
Finding the written explanation of respondent to be unsatisfactory,
petitioner hospital, served on respondent a copy of the Notice of
Termination, dated January 24, 1997, dismissing him on the ground
of gross negligence/inefficiency under Section 1, Rule VII of its Code
of Discipline.
Thus, respondent filed a Complaint for illegal dismissal against
petitioner hospital and its Chairman
LABOR ARBITER: Labor Arbiter dismissed respondents complaint
for illegal dismissal against petitioners. He concluded that the
respondent was negligent in focusing the cameras at the Old and
New Maternity Units only and the theft committed at room 257 was
not recorded. He said that respondents infraction exposed petitioners
to the possibility of a damage suit that may be filed against them
arising from the theft.
NLRC: Issued a Resolution reversing the Decision of the Labor
Arbiter. It observed that respondent was not negligent when he
focused the cameras on the Old and New Maternity Units, as they
were located near the stairways and elevators, which were
frequented by many visitors and, thus, there is the likelihood that
untoward incidents may arise. If at all, it treated the matter as a single
12
or isolated act of simple negligence which did not constitute a just
cause for the dismissal of an employee.
COURT OF APPEALS: Dismissed petitioners' petition for certiorari,
affirming the NLRCs finding that while respondent may appear to be
negligent in monitoring the cameras on the subject dates, the same
would not constitute sufficient ground to terminate his employment.
Even assuming that respondents act would constitute gross
negligence, it ruled that the ultimate penalty of dismissal was not
proper as it was not habitual, and that there was no proof of
pecuniary injury upon petitioner hospital. Moreover, it declared that
petitioners failed to comply with the twin notice rule and hearing as
what they did was to require respondent to submit a written
explanation, within 24 hours and, thereafter, he was ordered
dismissed, without affording him an opportunity to be heard.

ISSUE: Whether or not the dismissal of respondent is valid.
HELD: NO. Respondent was illegally dismissed without just cause
and compliance with the notice requirement. Article 282 (b) of the
Labor Code provides that an employer may terminate an employment
for gross and habitual neglect by the employee of his duties.
Corollarily, regarding termination of employment, the Omnibus Rules
Implementing the Labor Code, as amended, provides that:
Section 2. Security of Tenure. (a) In cases of
regular employment, the employer shall not terminate the
services of an employee except for just or authorized
causes as provided by law, and subject to the
requirements of due process. x x x x
(d) In all cases of termination of employment, the following
standards of due process shall be substantially observed:
For termination of employment based on just
causes as defined in Article 282 of the Labor Code: (i) A
written notice served on the employee specifying the
ground or grounds for termination, and giving said
employee reasonable opportunity within which to explain
his side. (ii) A hearing or conference during which the
employee concerned, with the assistance of counsel if he
so desires is given opportunity to respond to the charge,
present his evidence, or rebut the evidence presented
against him. (iii) A written notice of termination served on
the employee, indicating that upon due consideration of
all the circumstances, grounds have been established to
justify his termination. xxxx
To effectuate a valid dismissal from
employment by the employer, the Labor Code has set
twin requirements, namely: (1) the dismissal must be for
any of the causes provided in Article 282 of the Labor
Code; and (2) the employee must be given an opportunity
to be heard and defend himself. This first requisite is
referred to as the substantive aspect, while the second is
deemed as the procedural aspect.
An employer can terminate the services of an
employee only for valid and just causes which must be
supported by clear and convincing evidence. The
employer has the burden of proving that the dismissal was
indeed for a valid and just cause.
A perusal of petitioner hospitals CCTV Monitoring
Guidelines, disseminated to all in-house security personnel, reveals
that that there is no categorical provision requiring an in-house
security personnel to observe a rotation sequence procedure in
focusing the cameras so that the security monitoring would cover as
many areas as possible. Under Article 282 (b) of the Labor Code, an
employer may terminate an employee for gross and habitual neglect
of duties. Neglect of duty, to be a ground for dismissal, must be both
gross and habitual. Gross negligence connotes want of care in the
performance of ones duties. Habitual neglect implies repeated failure
to perform ones duties for a period of time, depending upon the
circumstances. A single or isolated act of negligence does not
constitute a just cause for the dismissal of the employee.
Petitioners lack of just cause and non-compliance with
the procedural requisites in terminating respondents employment
renders them guilty of illegal dismissal. Consequently, respondent is
entitled to reinstatement to his former position without loss of seniority
rights and payment of backwages. However, if such reinstatement
proves impracticable, and hardly in the best interest of the parties,
perhaps due to the lapse of time since his dismissal, or if he decides
not to be reinstated, respondent should be awarded separation pay in
lieu of reinstatement.
The Court deems that since reinstatement is no longer feasible due to
the long passage of time, petitioners are required to pay respondent
his separation pay equivalent to one (1) months pay for every year of
service. Petitioners are thus ordered to pay respondent his
backwages of P250,229.97 and separation pay of P31,365.00, or a
total amount of P281,594.97.
THE COCA-COLA EXPORT CORPORATION,
Petitioner,
- versus -
CLARITA P. GACAYAN,
Respondent.

Facts:
Petitioner The Coca Cola Export Corporation is engaged in the
manufacture, distribution and export of beverage base, concentrate,
and other products bearing its trade name.Respondent Clarita P.
Gacayan began working with petitioner.Under petitioners company
policy, one of the benefits enjoyed by its employees was the
reimbursement of meal and transportation expenses incurred while
rendering overtime work. This reimbursement was allowed only
when the employee worked overtime for at least four hours on a
Saturday, Sunday or holiday, and for at least two hours on
weekdays. The maximum amount allowed to be reimbursed was one
hundred fifty (P150.00) pesos. It was in connection with this company
policy that petitioner called the attention of respondent and required
her to explain the alleged alterations in three receipts which she
submitted to support her claim for reimbursement of meal expenses.
Petitioner issued memorandum requiring respindent to explain such
alteration.Respondent wrote her explanation on the same note and
stated that the alteration may have been made by the staff from
McDonalds as they sometimes make mistakes in issuing receipts.
Upon verification with the Assistant Branch Manager of the
McDonalds petitioner discovered that the date of issuance of the
receipt was altered. The respondent denied personal knowledge of
the reciept. After several hearing and investigation.petitioner
dismissed respondent for fraudulently submitting tampered and/or
altered receipts in support of her petty cash reimbursements in gross
violation of the companys rules and regulations.

LA AND NLRC: upheld the validity of the dismissal as valid exercise
of management prerogatives
CA Reversed ruling that that the penalty of dismissal imposed on
respondent was too harsh and further directed petitioner to
immediately reinstate respondent to her former position, if possible,
or a substantially equivalent position without loss of seniority rights
and with full backwages.

Issue: whether or not the dissmissal is valid.

Held:
No,The Labor Code mandates that before an employer may validly
dismiss an employee from the service, the requirement of substantial
and procedural due process must be complied with. Under the
requirement of substantial due process, the grounds for termination of
employment must be based on just or authorized causes. In
termination cases, the burden of proof rests on the employer to show
that the dismissal was for just cause. Otherwise, an employee who is
illegally dismissed 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.At the outset, it is
important to note that the term trust and confidence is restricted to
managerial employees. In the instant case, respondent was the
Senior Financial Accountant with the Job Description of a Financial
Project Analyst. Respondent, among others, provides support in the
form of financial analyses and evaluation of alternative strategies or
action plans to assist management in strategic and operational
decision-making. In the instant case, the basis for terminating the
13
employment of respondent was for gross violation of the companys
rules and regulations, as specified in the termination letter. Evidently,
no mention was made regarding petitioners alleged loss of trust and
confidence in respondent. Neither was there any explanation nor
discussion of the alleged sensitive and delicate position of
respondent requiring the utmost trust of petitioner. It bears
emphasizing that the right of an employer to dismiss its employees on
the ground of loss of trust and confidence must not be exercised
arbitrarily. For loss of trust and confidence to be a valid ground for
dismissal, it must be substantial and founded on clearly established
facts. Loss of confidence must not be used as a subterfuge for
causes which are improper, illegal or unjustified; it must be genuine,
not a mere afterthought, to justify earlier action taken in bad faith.
MA. LOURDES T. DOMINGO- versus -ROGELIO I. RAYALA
CASE DOCTRINE:
Under the Labor Code, the Chairman of the NLRC shall hold office
during good behavior until he or she reaches the age of sixty-five,
unless sooner removed for cause as provided by law or becomes
incapacitated to discharge the duties of the office.
FACTS:
On November 16, 1998, Ma. Lourdes T. Domingo (Domingo), then
Stenographic Reporter III at the NLRC, filed a Complaint for sexual
harassment against Rayala before Secretary Bienvenido Laguesma
of the Department of Labor and Employment (DOLE). The committee
constituted found Rayala guilty of the offense charged. Secretary
Laguesma submitted a copy of the Committee Report and
Recommendation to the OP, but with the recommendation that the
penalty should be suspension for six (6) months and one (1) day, in
accordance with AO 250.
On May 8, 2000, the OP issued AO 119, disagreeing with the
recommendation that respondent be meted only the penalty of
suspension for six (6) months and one (1) day considering the
circumstances of the case because of the nature of the position of
Reyala as occupying the highest position in the NLRC, being its
Chairman. Long digest by Ernani Tadili. It was ordered that Rayala be
dismissed from service for being found guilty of grave offense of
disgraceful and immoral conduct.
Rayala filed Motions for Reconsideration until the case was finally
referred to the Court of Appeals for appropriate action. The CA found
Reyala guilty and imposed the penalty of suspension of service for
the maximum period of one (1) year.
Domingo filed a Petition for Review before the SC.
Rayala likewise filed a Petition for Review with this Court essentially
arguing that he is not guilty of any act of sexual harassment.
The Republic then filed its own Petition for Review.
On June 28, 2004, the Court directed the consolidation of the three
(3) petitions.
G.R. No. 155831 - Domingo Petition
1. The President has the power to remove presidential
appointees; and
2. AO No. 250 does not cover presidential appointees.
G.R. No. 155840 - Rayala Petition
In his petition, Rayala raises the following issues:
1. He's act does not constitute sexual harassment;
a. demand, request, or requirement of a
sexual favor;
b. the same is made a pre-condition to hiring,
reemployment, or continued employment; or
c. the denial thereof results in discrimination
against the employee.
2. Intent is an element of sexual harassment; and
3. Misapplication of the expanded definition of sexual
harassment in RA 7877 by applying DOLE AO 250.
Rayala asserts that Domingo has failed to allege and establish any
sexual favor, demand, or request from petitioner in exchange for her
continued employment or for her promotion. According to Rayala, the
acts imputed to him are without malice or ulterior motive. It was
merely Domingo's perception of malice in his alleged acts - a "product
of her own imagination" - that led her to file the sexual harassment
complaint. Likewise, Rayala assails the OP's (office of the president)
interpretation, as upheld by the CA, that RA 7877 is malum
prohibitum such that the defense of absence of malice is unavailing.
He argues that sexual harassment is considered an offense against a
particular person, not against society as a whole. Rayala next argues
that AO 250 expands the acts proscribed in RA 7877.
In particular, he assails the definition of the forms of sexual
harassment:
FORMS OF SEXUAL HARASSMENT
Section 1. Forms of Sexual Harassment. - Sexual harassment may
be committed in any of the following forms:
a) Overt sexual advances;
b) Unwelcome or improper gestures of affection;
c) Request or demand for sexual favors including but not
limited to going out on dates, outings or the like for the
same purpose;
d) Any other act or conduct of a sexual nature or for
purposes of sexual gratification which is generally
annoying, disgusting or offensive to the victim.
He posits that these acts alone without corresponding demand,
request, or requirement do not constitute sexual harassment as
contemplated by the law. He alleges that the rule-making power
granted to the employer in Section 4(a) of RA 7877 is limited only to
procedural matters. The law did not delegate to the employer the
power to promulgate rules which would provide other or additional
forms of sexual harassment, or to come up with its own definition of
sexual harassment.
G.R. No. 158700 - Republic
The Republic raises this issue: Whether or not the President of the
Philippines may validly dismiss respondent Rayala as Chairman of
the NLRC for committing acts of sexual harassment.
The Republic argues that Rayala's acts constitute sexual harassment
under AO 250. His acts constitute unwelcome or improper gestures of
affection and are acts or conduct of a sexual nature, which are
generally annoying or offensive to the victim. It also contends that
there is no legal basis for the CA's reduction of the penalty imposed
by the OP. Rayala's dismissal is valid and warranted under the
circumstances. The power to remove the NLRC Chairman solely
rests upon the President, limited only by the requirements under the
law and the due process clause. The Republic further claims that,
although AO 250 provides only a one (1) year suspension, it will not
prevent the OP from validly imposing the penalty of dismissal on
Rayala. It argues that even though Rayala is a presidential appointee,
he is still subject to the Civil Service Law. Under the Civil Service
Law, disgraceful and immoral conduct, the acts imputed to Rayala,
constitute grave misconduct punishable by dismissal from the
service. The Republic adds that Rayala's position is invested with
14
public trust and his acts violated that trust; thus, he should be
dismissed from the service.

This argument, according to the Republic, is also supported by Article
215 of the Labor Code, which states that the Chairman of the NLRC
holds office until he reaches the age of 65 only during good behavior.
Since Rayala's security of tenure is conditioned upon his good
behavior, he may be removed from office if it is proven that he has
failed to live up to this standard.
RAYALA'S ARGUMENT
1. Rayala argues that AO 250 does not apply to him.
First, he argues that AO 250 does not cover the NLRC,
which, at the time of the incident, was under the DOLE
only for purposes of program and policy coordination.
Second, he posits that even assuming AO 250 is
applicable to the NLRC, he is not within its coverage
because he is a presidential appointee.
2. Rayala attacks the penalty imposed by the OP. He alleges that
under the pertinent Civil Service Rules, disgraceful and immoral
conduct is punishable by suspension for a period of six (6) months
and one (1) day to one (1) year. He also argues that since he is
charged administratively, aggravating or mitigating circumstances
cannot be appreciated for purposes of imposing the penalty.
ISSUE:
1.Whether or not AO 250 covers Rayala
2. Whether or not Rayala should be dismissed from office
HELD:
1. As to the question of whether or not AO 250 covers Rayala is of no
real consequence. The events of this case unmistakably show that
the administrative charges against Rayala were for violation of RA
7877; that the OP properly assumed jurisdiction over the
administrative case; that the participation of the DOLE, through the
Committee created by the Secretary, was limited to initiating the
investigation process, reception of evidence of the parties,
preparation of the investigation report, and recommending the
appropriate action to be taken by the OP. AO 250 had never really
been applied to Rayala. If it was used at all, it was to serve merely as
an auxiliary procedural guide to aid the Committee in the orderly
conduct of the investigation.
2. Rayala committed sexual harassment. In this case, it is the
President of the Philippines, as the proper disciplining authority, who
would determine whether there is a valid cause for the removal of
Rayala as NLRC Chairman. This power, however, is qualified by the
phrase for cause as provided by law. Thus, when the President
found that Rayala was indeed guilty of disgraceful and immoral
conduct, the Chief Executive did not have unfettered discretion to
impose a penalty other than the penalty provided by law for such
offense. The imposable penalty for the first offense of either the
administrative offense of sexual harassment or for disgraceful and
immoral conduct is suspension of six (6) months and one (1) day to
one (1) year. Accordingly, it was error for the Office of the President
to impose upon Rayala the penalty of dismissal from the service, a
penalty which can only be imposed upon commission of a second
offense.
Even if the OP properly considered the fact that Rayala took
advantage of his high government position, it still could not validly
dismiss him from the service. Under the Revised Uniform Rules on
Administrative Cases in the Civil Service, taking undue advantage of
a subordinate may be considered as an aggravating circumstance
and where only aggravating and no mitigating circumstances are
present, the maximum penalty shall be imposed. Hence, the
maximum penalty that can be imposed on Rayala is suspension for
one (1) year.
Rayala holds the exalted position of NLRC Chairman, with the rank
equivalent to a CA Justice. Thus, it is not unavailing that rigid
standards of conduct may be demanded of him. In Talens-Dabon v.
Judge Arceo, this Court, in upholding the liability of therein
respondent Judge, said:
The actuations of respondent are aggravated by the fact
that complainant is one of his subordinates over whom he
exercises control and supervision, he being the executive
judge. He took advantage of his position and power in
order to carry out his lustful and lascivious desires.
Instead of he being in loco parentis over his subordinate
employees, respondent was the one who preyed on them,
taking advantage of his superior position.

16. PHILIPPINE AEOLUS AUTOMOTIVE UNITED CORPORATION
and/or FRANCIS CHUA v. NATIONAL LABOR RELATIONS
COMMISSION and ROSALINDA C. CORTEZ
G.R. No. 124617. April 28, 2000
Bellosillo, J.

Case Doctrine: 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
employee has become unfit to continue working for the employer.

Grounds for termination of services: misconduct, gross
negligence; Stapler/Sexual harassment"
FACTS: Petitioner Philippine Aeolus Automotive United Corporation
(PAAUC) is a corporation duly organized and existing under
Philippine laws, petitioner Francis Chua is its President while private
respondent Rosalinda C. Cortez was a company nurse of petitioner
corporation.
The services of respondent Cortez was terminated on
grounds of gross and habitual neglect of duties, serious misconduct
and fraud or willful breach of trust, specifically: (a) for throwing a
stapler at Plant Manager William Chua, her superior, and uttering
invectives against him; (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; (c) for asking a co-employee to punch-in her
time card thus making it appear that she was in the office when in fact
she was not; and, (d) for allegedly failing to process the ATM
applications of her nine (9) co-employees with the Allied Banking
Corporation.

Respondents contentions:
As to the first charge, respondent Cortez claims that as early as her
first year of employment her Plant Manager, William Chua, made
sexual advances of her. The special treatment and sexual advances
continued but she never reciprocated his flirtations. One day, she
found out 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 gross
disrespect.
As regards the second charge, Respondent Cortez
explains that the money entrusted to her for transmittal was not lost;
instead, she gave it to the 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
and that was with the permission of William Chua.
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.

LA: Labor Arbiter rendered a decision holding the termination of
Cortez as valid and legal.
NLRC: NLRC reversed the decision of the Labor Arbiter and found
petitioner corporation guilty of illegal dismissal of private respondent
Cortez.

15
ISSUE: Is petitioner corporation guilty of illegal dismissal of private
respondent Cortez?

RULING: YES, petitioner corporation guilty of illegal dismissal of
private respondent Cortez.
The Supreme Court 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 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 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 nurse. Her employment identification card discloses
the nature of her employment as a nurse and no other. Also, the
memorandum informing her 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.
On alleged infraction No. 4, the money entrusted to the
respondent was in fact deposited in the respective accounts of the
employees concerned, although belatedly. 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.
Gross negligence implies a want or absence of or failure
to exercise slight care or diligence, or the entire absence of care. It
evinces a thoughtless disregard of consequences without exerting
any effort to avoid them. 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 fairly be made to rest. All these requirements
prescribed by law and jurisprudence are wanting in the case at bar.

JERUSALEM VERSUS KEPPEL MONTE BANK,
HOE ENG HOCK, YAP AND PICART
Breach of trust and confidence,
Del Castillo, J.

DOCTRINE:
For breach of trust and confidence to become a valid ground for the
dismissal of an employee, the cause of the loss of trust and
confidence must be related to the performance of the employees
duties.

FACTS:
Jerusalem was employed by Keppel Monte Bank as Assistant Vice
President. He was assigned to the newly created VISA Credit Card
Department, eventually becoming merely as a unit. Jerusalem,
carrying the same rank, was reassigned as Head of the Marketing
and Operations of the Jewelry Department.

Jerusalem received from Jorge Javier a sealed envelope containing
his VISA Credit Card application forms. Jorge is a Keppel VISA Card
Holder since December 1998. Jerusalem handed it over to the VISA
Card Holder Unit, and was subsequently approved and became past
due.

One of the VISA Card Unit asked Jorge to assist the bank in the
collection of his referred VISA accounts. Jerusalem, upon knowing
the accounts referred by Jorge, sent a memorandum to Roberto
Borromeo, head of the VISA Credit Card Unit, recommending for the
filing of a criminal case for estafa against Jorge and further
recommended that a coordination with other banks where Jorge has
deposits should be made promptly so that they can ask the banks to
freeze the latters accounts.

Sunny Yap, Vice President for Operations, sent a Notice to Explain to
Jerusalem why no disciplinary action should be taken against him for
referring/endorsing fictitious applicants. Josefina Picart, HR manager,
handed to Jerusalem a Notice of Termination informing him of breach
of trust and confidence for knowingly and maliciously referring,
endorsing, and vouching for VISA card applicants who later turned
out to be imposters resulting in financial loss to Keppel.

JERUSALEMS CONTENTION:
He pointed out that he had no participation in the processing of the
VISA Card as he was no longer connected with the Unit at the time of
the transaction. He explained that he can only endorse the
applications referred by Jorge to the Unit because he was already
transferred to Jewelry Department, as head. He avers the same that
a dismissal based on loss and confidence should be provided by
substantial evidence and founded on clearly established facts.

KEPPELS CONTENTION:
Loss of trust and confidence is a valid ground for dismissing an
employee, provided that same arises from proven facts. Termination
of employment on this ground does not require proof beyond
reasonable doubt of the employees conduct. It is sufficient that there
is some basis for the loss of trust or that the employer has reasonable
ground to believe that the employee is responsible for the misconduct
which renders him unworthy of the trust and confidence demanded of
his position. They believe that the testimonies of former subordinates
of Jerusalem deserve full faith and credence in the absence of any
evidence that they were impelled by improper motives.

Labor Arbiter:
LA found Keppel guilty of illegal dismissal and should pay his
backwages from the time of his dismissal up to the date of the
decision.

NLRC:
NLRC affirmed the decision of LA with the modification of the award
of moral and exemplary damages be deleted.

COURT OF APPEALS:
CA found merit in the petition and dismissed the case against Keppel
for want of merit.

ISSUE:
Whether or not Keppel illegally terminated Jerusalems employment
on the ground of willful breach of trust and confidence.

RULING:
In order to constitute a just cause for dismissal, the act complained of
must be work-related such as would show the employee concerned
to be unfit to continue working for the employer. While it is true that
loss of trust and confidence is one of the just causes for termination,
such loss of trust and confidence must, however, have some basis.
Proof beyond reasonable doubt is not required. It is sufficient that
there must only be some basis for such loss of confidence or that
there is reasonable ground to believe, if not to entertain, the moral
conviction that the concerned employee is responsible for the
misconduct and that the nature of his participation therein rendered
him absolutely unworthy of trust and confidence demanded by his
position.

The first requisite for dismissal on the ground of loss of trust and
confidence is that the employee concerned must be holding a
position of trust and confidence. In this case, there is no doubt
that James held a position of trust and confidence as Assistant Vice-
President of the Jewelry Department.The second requisite is that
there must be an act that would justify the loss of trust and
confidence. Loss of trust and confidence, to be a valid cause for
dismissal, must be based on a willful breach of trust and founded on
clearly established facts. The basis for the dismissal must be clearly
and convincingly established but proof beyond reasonable doubt is
not necessary. Keppels evidence against James fails to meet this
standard. His act of forwarding the already accomplished applications
to the VISA Credit Card Unit is proper as he is not in any position to
16
act on them. It is incumbent upon Marciana, as Unit Head to have
performed her duties. Keppel had gone too far in blaming Jerusalem
for the shortcomings and imprudence of Marciana. #Anonuevo

RENO FOODS, INC., and/or VICENTE KHU vs. Nagkakaisang
Lakas ng Manggagawa (NLM) - KATIPUNAN on behalf of its
member, NENITA CAPOR
G.R. No. 164016 March 15, 2010 KEYWORD/S: theft of company
property; serious misconduct; separation pay.
DOCTRINE:
Separation pay is only warranted when the cause for termination is
not attributable to the employees fault, such as those provided in
Articles 283 and 284 of the Labor Code, as well as in cases of illegal
dismissal in which reinstatement is no longer feasible. It is not
allowed when an employee is dismissed for just cause, such as
serious misconduct.
FACTS:
Petitioner Reno Foods, Inc. (Reno Foods) is a manufacturer of
canned meat products of which Vicente Khu is the president and is
being sued in that capacity. Respondent Nenita Capor (Capor) was
an employee of Reno Foods until her dismissal on October 27, 1998.
It is a standard operating procedure of petitioner-company to subject
all its employees to reasonable search of their belongings upon
leaving the company premises. On October 19, 1998, the guard on
duty found six Reno canned goods wrapped in nylon leggings
inside Capors fabric clutch bag. The only other contents of the
bag were money bills and a small plastic medicine container.
Petitioners accorded Capor several opportunities to explain her side,
often with the assistance of the union officers of NLM Katipunan. In
fact, after petitioners sent a Notice of Termination to Capor, she was
given yet another opportunity for reconsideration through a labor-
management grievance conference held on November 17, 1999.
Unfortunately, petitioners did not find reason to change its earlier
decision to terminate Capors employment with the company.
On December 8, 1998, petitioners filed a complaint-affidavit against
Capor for qualified theft. On April 5, 1999, a Resolution was issued
finding probable cause for the crime charged. Consequently, an
Information was filed against Capor.
Meanwhile, NLM Katipunan filed on behalf of Capor a complaint for
illegal dismissal and money claims against petitioners with the Head
Arbitration Office of the National Labor Relations Commission
(NLRC) for the National Capital Region. The complaint prayed that
Capor be paid her full backwages as well as moral and exemplary
damages.
The Labor Arbiter noted that Capor was caught trying to sneak out
six cans of Reno products without authority from the company.
Under Article 232 of the Labor Code, an employer may terminate the
services of an employee for just cause, such as serious misconduct.
In this case, the Labor Arbiter found that theft of company property is
tantamount to serious misconduct; as such, Capor is not entitled to
reinstatement and backwages, as well as moral and exemplary
damages. Moreover, the Labor Arbiter ruled that consistent with
prevailing jurisprudence, an employee who commits theft of company
property may be validly terminated and consequently, the said
employee is not entitled to separation pay.
On appeal, the NLRC affirmed the factual findings and monetary
awards of the Labor Arbiter but added an award of financial
assistance.
Aggrieved, petitioners filed a Petition for Certiorari before the CA
imputing grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the NLRC for awarding financial assistance
to Capor.
Citing Philippine Long Distance Telephone Company v.
National Labor Relations Commission, petitioners argued that theft of
company property is a form of serious misconduct under Article
282(a) of the Labor Code for which no financial assistance in the form
of separation pay should be allowed.
Unimpressed, the appellate court affirmed the NLRCs award of
financial assistance to Capor. It stressed that the laborers welfare
should be the primordial and paramount consideration when carrying
out and interpreting provisions of the Labor Code. It explained that
the mandate laid down in Philippine Long Distance Telephone
Company v. National Labor Relations Commission was not absolute,
but merely directory.
Hence, this petition.
ISSUE:
Whether the NLRC committed grave abuse of discretion amounting to
lack or excess of jurisdiction in granting financial assistance to an
employee who was validly dismissed for theft of company property.
RULING:
Separation pay is only warranted when the cause for termination is
not attributable to the employees fault, such as those provided in
Articles 283 and 284 of the Labor Code, as well as in cases of illegal
dismissal in which reinstatement is no longer feasible. It is not
allowed when an employee is dismissed for just cause, such as
serious misconduct.
Jurisprudence has classified theft of company property as a serious
misconduct and denied the award of separation pay to the erring
employee. We see no reason why the same should not be similarly
applied in the case of Capor. She attempted to steal the property of
her long-time employer. For committing such misconduct, she is
definitely not entitled to an award of separation pay.
It is true that there have been instances when the Court awarded
financial assistance to employees who were terminated for just
causes, on grounds of equity and social justice. The same,
however, has been curbed and rationalized in Philippine Long
Distance Telephone Company v. National Labor Relations
Commission. In that case, we recognized the harsh realities faced
by employees that forced them, despite their good intentions, to
violate company policies, for which the employer can rightfully
terminate their employment. For these instances, the award of
financial assistance was allowed. But, in clear and unmistakable
language, we also held that the award of financial assistance shall
not be given to validly terminated employees, whose offenses are
iniquitous or reflective of some depravity in their moral character.
When the employee commits an act of dishonesty, depravity, or
iniquity, the grant of financial assistance is misplaced
compassion. It is tantamount not only to condoning a patently illegal
or dishonest act, but an endorsement thereof. It will be an insult to all
the laborers who, despite their economic difficulties, strive to maintain
good values and moral conduct.
We are not persuaded by Capors argument that despite the finding
of theft, she should still be granted separation pay in light of her long
years of service with petitioners. Length of service and a previously
clean employment record cannot simply erase the gravity of the
betrayal exhibited by a malfeasant employee.
While we sympathize with Capors plight, being of retirement age and
having served petitioners for 39 years, we cannot award any
financial assistance in her favor because it is not only against
the law but also a retrogressive public policy.
FE LA ROSA, OFELIA VELEZ, CELY DOMINGO, JONA
NATIVIDAD and EDGAR DE LEON
vs.
AMBASSADOR HOTEL
FACTS:
17
Employees of Ambassador Hotel including herein petitioners filed
before the NLRC several complaints, for illegal dismissal, illegal
suspension, and illegal deductions against the hotel (respondent) and
its manager, Yolanda L. Chan. They alleged that, following their filing
of complaints with the DOLE-NCR which prompted an inspection of
the hotels premises by a labor inspector, respondent was found to
have been violating labor standards laws and was thus ordered to
pay them some money claims. This purportedly angered
respondents management which retaliated by suspending and/or
constructively dismissing them by drastically reducing their work
days through the adoption of a work reduction/rotation scheme.
Criminal cases for estafa were likewise allegedly filed against several
of the employees involved, some of which cases were eventually
dismissed by the prosecutors office for lack of merit
LA: The labor arbiter found respondent and its manager Yolanda L.
Chan guilty of illegal dismissal.
NLRC: NLRC affirmed the labor arbiters ruling with the modification,
Fe La Rosa, Ofelia Velez, Cely Domingo and Jona Natividad
were constructively dismissed, and Edgar de Leon actually dismissed
but illegally
CA: The appellate court reversed the NLRC decision and dismissed
petitioners complaints, holding that there was no constructive
dismissal because petitioners "simply disappeared from work" upon
learning of the work reduction/rotation scheme.
ISSUE: WON petitioners were illegally dismissed.
RULING: YES. The records fail, however, to show any documentary
proof that the work reduction scheme was adopted due to
respondents business reverses. Respondents memorandum
informing petitioners of the adoption of a two-day work scheme made
no mention why such scheme was being adopted. Neither do the
records show any documentary proof that respondent suffered
financial losses to justify its adoption of the said scheme to stabilize
its operations.
Respecting the appellate courts ruling that petitioners "simply
disappeared" from their work, hence, they are guilty of abandonment,
the same does not lie. Absence must be accompanied by overt acts
unerringly pointing to the fact that the employee simply does not want
to work anymore. And the burden of proof to show that there was
unjustified refusal to go back to work rests on the employer.
Abandonment is a matter of intention and cannot lightly be inferred or
legally presumed from certain equivocal acts. For abandonment to
exist, two requisites must concur: first, the employee must have failed
to report for work or must have been absent without valid or justifiable
reason; and second, there must have been a clear intention on the
part of the employee to sever the employer-employee relationship as
manifested by some overt acts. The second element is the more
determinative factor. Abandonment as a just ground for dismissal
thus requires clear, willful, deliberate, and unjustified refusal of
the employee to resume employment. Mere absence or failure to
report for work, even after notice to return, is not tantamount to
abandonment.
Under Article 279 of the Labor Code and based on settled
jurisprudence, an employee dismissed without just cause and without
due process, like petitioners herein, are entitled to reinstatement and
backwages or payment of separation pay.
MARIBAGO RESORT VS. DUAL, JULY 20, 2010 | G.R. No.
180660 July 20, 2010
Keyword: Serious Misconduct
Facts: On January 5, 2005, a group of JAPANESE GUESTS and
their companions dined at Maribago Beach Resorts
Poolbar/Restaurant. Captain waiter Alvin Hiyas took their dinner
orders comprising of 6 sets of lamb and 6 sets of fish. As per
company procedure, Hiyas forwarded one copy of the order slip to
the kitchen and another copy to Nito Dual. Pursuant to the order slip,
fourteen (14) sets of dinner were prepared by the chef. Hiyas and
waiter Genaro Mission, Jr. served 12 set dinners to the guests, and
another 2 sets to their guides free of charge (total of 14 sets of
dinner). After consuming their dinner, the guests paid the amount
indicated in their bill and thereafter left in a hurry. The receipt show
that only P3,036.00 was remitted by cashier Dual corresponding to 6
sets of dinner. A discrepancy was found between the order slip and
the receipt issued which prompted petitioner Maribago to ask for an
explanation from Dual and the waiters why they should not be
penalized. Clarificatory hearings were made and it was found out that
the guests gave P10,500.00 to Mission as payment for the bill of
P10,100.00. It was discovered later that only P3,036.00 was entered
by Dual in the cash register. The rest of the payment was missing.
The original transaction receipt for P10,100.00 was likewise missing
and in its place, only a transaction receipt for P3.036.00 was
registered. Upon verification, it was also found out that the order slip
was tampered by Alcoseba to make it appear that only six (6) set
dinners were ordered. Respondent Dual was found guilty of
dishonesty for his fabricated statements and for asking one of the
waiters (Mission) to corroborate his allegations. He was terminated
for dishonesty based on his admission that he altered the order slip.
Dual then filed a complaint for illegal dismissal. The Labor Arbiter
found that respondents termination was without valid cause and
ruled that respondent is entitled to separation pay. The NLRC set
aside the Labor Arbiters decision and dismissed the complaint. The
Court of Appeals however reversed the decision and resolution of the
NLRC. Finding no sufficient valid cause to justify respondents
dismissal, the Court of Appeals ordered petitioner to pay respondent
full backwages and separation pay. Thus a petition for review under
Rule 45 was filed in the SC.
ISSUE: Whether or not respondent was illegally dismissed.
HELD: No. Petitioners evidence proved that respondent is guilty of
dishonesty and of stealing money entrusted to him as cashier.
Instead of reporting P10,100.00 as payment by the guests for their
dinner, respondent cashier only reported P3,036.00 as shown by the
receipt which he admitted to have issued. Respondents acts
constitute serious misconduct which is a just cause for termination
under the law. Theft committed by an employee is a valid reason for
his dismissal by the employer. Although as a rule this Court leans
over backwards to help workers and employees continue with their
employment or to mitigate the penalties imposed on them, acts of
dishonesty in the handling of company property, petitioners income
in this case, are a different matter.
CENTURY CANNING CORP., ET. AL. V. RAMIL, GR NO. 171630,
AUGUST 8, 2010

FACTS:

Petitioner Century Canning Corporation, a company engaged in
canned food manufacturing, employed respondent VICENTE RANDY
RAMIL in August 1993 as technical specialist. Prior to his dismissal,
his job included, among others, the preparation of the purchase
requisition (PR) forms and capital expenditure (CAPEX) forms, as
well as the coordination with the purchasing department regarding
technical inquiries on needed products and services of petitioner's
different departments.

On 3 March, 1999, respondent prepared a CAPEX form for external
fax modems and terminal server, per order of Technical Operations
Manager Jaime Garcia, Jr. and endorsed it to Marivic Villanueva,
Secretary of Executive Vice-President Ricardo T. Po, for the latter's
signature. The CAPEX form, however, did not have the complete
details and some required signatures. The following day, with the
form apparently signed by Po, respondent transmitted it to
Purchasing Officer Lorena Paz in Taguig Main Office. Paz processed
the paper and found that some details in the CAPEX form were left
blank. She also doubted the genuineness of the signature of Po, as
appearing in the form. Paz then transmitted the CAPEX form to
Purchasing Manager Virgie Garcia and informed her of the
questionable signature of Po. Consequently, the request for the
equipment was put on hold due to Po's forged signature. However,
due to the urgency of purchasing badly needed equipment,
respondent was ordered to make another CAPEX form, which was
immediately transmitted to the Purchasing Department.
18

Suspecting him to have committed forgery, respondent was asked to
explain in writing the events surrounding the incident. He vehemently
denied any participation in the alleged forgery. Respondent was,
thereafter, suspended on 21 April 1999. Subsequently, he
received a Notice of Termination from Armando C. Ronquillo, on
20 May 1999, for loss of trust and confidence.

Respondent, on May 24, 1999, filed a Complaint for illegal
dismissal, non-payment of overtime pay, separation pay, moral and
exemplary damages and attorney's fees against petitioner and its
officers before the Labor Arbiter (LA).

LA Potenciano S. Canizares rendered a Decision dismissing the
complaint for lack of merit. Aggrieved by the LA's finding, respondent
appealed to the National Labor Relations Commission (NLRC). The
NLRC First Division in its Decision set aside the ruling of LA
Canizares. The NLRC declared respondent's dismissal to be illegal
and directed petitioner to reinstate respondent with full backwages
and seniority rights and privileges. It found that petitioner failed to
show clear and convincing evidence that respondent was responsible
for the forgery of the signature of Po in the CAPEX form.

Petitioner filed a motion for reconsideration. To respondent's surprise
and dismay, the NLRC reversed itself and rendered a new Decision
upholding LA Canizares' dismissal of his complaint. Respondent filed
a motion for reconsideration, which was denied by the NLRC.

Frustrated by this turn of events, respondent filed a petition for
certiorari with the Court of Appeals (CA). The CA rendered judgment
in favor of respondent and reinstated the earlier decision of the
NLRC. It ordered petitioner to reinstate respondent, without loss of
seniority rights and privileges, and to pay respondent full backwages
from the time his employment was terminated up to the time of the
finality of its decision. The CA, likewise, remanded the case to the LA
for the computation of backwages of the respondent. Hence, this
petition for review on certiorari.

ISSUE:

Whether or not respondent was validly dismissed.

RULING:
Yes.
Petitioner's main allegation is that there are factual and legal grounds
constituting substantial proof that respondent was clearly involved in
the forgery of the CAPEX form. Petitioner insists that the mere
existence of a basis for believing that respondent employee has
breached the trust and confidence of his employer suffices for his
dismissal. Finally, petitioner maintains that aside from respondent's
involvement in the forgery of the CAPEX form, his past violations of
company rules and regulations are more than sufficient grounds to
justify his termination from employment.

However, the record of the case is bereft of evidence that would
clearly establish Ramil's involvement in the forgery. They did not
even submit any affidavit of witness or present any during the hearing
to substantiate their claim against Ramil.

Respondent alleged in his position paper that after preparing the
CAPEX form on 3 March 1999, he endorsed it to Marivic Villanueva
for the signature of the Executive Vice-President Ricardo T. Po. The
next day, respondent received the CAPEX form containing the
signature of Po. Petitioner never controverted these allegations in the
proceedings before the NLRC and the CA despite its opportunity to
do so. Petitioner's belated allegations in its reply filed before this
Court that Marivic Villanueva denied having seen the CAPEX form
cannot be given credit. Points of law, theories, issues and arguments
not brought to the attention of the lower court, administrative agency
or quasi-judicial body need not be considered by a reviewing court,
as they cannot be raised for the first time at that late stage. When a
party deliberately adopts a certain theory and the case is decided
upon that theory in the court below, he will not be permitted to change
the same on appeal, because to permit him to do so would be unfair
to the adverse party.

Thus, if respondent retrieved the form on March 4, 1999 with the
signature of Po, it can be correctly inferred that he is not the forger.
Had the CAPEX form been returned to respondent without Po's
signature, Villanueva or any officer of the petitioner's company could
have readily noticed the lack of signature, and could have easily
attested that the form was unsigned when it was released to
respondent.

Furthermore, while employers are allowed a wider latitude of
discretion in terminating the services of employees who perform
functions which by their nature require the employers' full trust and
confidence and the mere existence of basis for believing that the
employee has breached the trust of the employer is sufficient, this
does not mean that the said basis may be arbitrary and
unfounded.

The right of an employer to dismiss an employee on the ground
that it has lost its trust and confidence in him must not be
exercised arbitrarily and without just cause. Loss of trust and
confidence, to be a valid cause for dismissal, must be based on
a willful breach of trust and founded on clearly established facts.
The basis for the dismissal must be clearly and convincingly
established, but proof beyond reasonable doubt is not
necessary. It must rest on substantial grounds and not on the
employers arbitrariness, whim, caprice or suspicion; otherwise,
the employee would eternally remain at the mercy of the
employer.

GREGORIO V. TONGKO, petitioner
vs.
THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC.
and RENATO A. VERGEL DE DIOS, respondents.
G.R. No. 167622; November 7, 2008
Ponente: VELASCO, JR., J .
Case Doctrine: When there is no showing of a clear, valid and legal
cause for the termination of employment, the law considers the
matter a case of illegal dismissal and the burden is on the employer
to prove that the termination was for a valid or authorized cause. This
burden of proof appropriately lies on the shoulders of the employer
and not on the employee. In other words, an employer may terminate
the services of an employee for just cause and this must be
supported by substantial evidence.

Keyword: Career Agent's Agreement; agency growth policy

FACTS: Respondent Manufacturers Life Insurance Co. (Phils.), Inc.
(MANULIFE) is a domestic corporation engaged in life insurance
business. Respondent Renato A. Vergel De Dios was its President
and Chief Executive Officer. Petitioner GREGORIO TONGKO started
his professional relationship with respondent Manulife by virtue of a
Career Agent's Agreement (Agreement) he executed with respondent
Manulife.
The Agreement provided the Agent is an independent contractor and
nothing contained herein shall be construed or interpreted as creating
an employer-employee relationship between the Company and the
Agent.
After sometime, petitioner Tongko was named as a Unit Manager in
Manulife's Sales Agency Organization. Thereafter, he became a
Branch Manager.

After of a series of meetings and communications, between petitioner
Tongko and SVP Kevin O'Connor, some of them with respondent De
Dios, Management of respondent Manulife exercised its prerogative
to terminate their Agreement since the said meetings failed to help
align petitioner Tongko's directions with Management's avowed
agency growth policy.
Petitioner Tongko then filed a complaint against respondent Manulife
for illegal dismissal.
19
Petitioner Tongko contends that there exists an employer-employee
relationship between him and respondent Manulife.
Respondent Manulife argued that even if petitioner Tongko is
considered as its employee, his employment was validly terminated
on the ground of gross and habitual neglect of duties, inefficiency, as
well as willful disobedience of the lawful orders of respondent
Manulife.
ISSUE: Whether or not petitioner Tongko was illegally dismissed.

RULING: Yes. When there is no showing of a clear, valid and legal
cause for the termination of employment, the law considers the
matter a case of illegal dismissal and the burden is on the employer
to prove that the termination was for a valid or authorized cause. This
burden of proof appropriately lies on the shoulders of the employer
and not on the employee. Hence, an employer may terminate the
services of an employee for just cause and this must be supported by
substantial evidence.
In the case at bar, respondent Manulife failed to cite a
single iota of evidence to support its claims. Respondent Manulife did
not even point out which order or rule that petitioner Tongko
disobeyed. More importantly, respondent Manulife did not point out
the specific acts that petitioner Tongko was guilty of that would
constitute gross and habitual neglect of duty or disobedience.
Respondent Manulife merely cited petitioner Tongko's alleged
"laggard performance," without substantiating such claim, and
equated the same to disobedience and neglect of duty.
Thus, it must be concluded that petitioner Tongko was illegally
dismissed.
SCHOOL OF THE HOLY SPIRIT OF QUEZON CITY and/or
SR.CRISPINA A. TOLENTINO, S.Sp.S. - versus - CORAZON P.
TAGUIAM
G.R. No. 165565. July 14, 2008
CASE DOCTRINE:
Under Article 282of the Labor Code, gross and habitual neglect of
duties is a valid ground for an employer to terminate an
employee. Gross negligence implies a want or absence of or a
failure to exercise slight care or diligence, or the entire absence of
care. It evinces a thoughtless disregard of consequences without
exerting any effort to avoid them. Habitual neglect implies repeated
failure to perform ones duties for a period of time, depending upon
the circumstances.

KEYWORDS:
Grade 5 teacher leaving the pupils in the swimming pool area; Gross
and habitual neglect

FACTS:
Respondent Taguiam was the class adviser of a Grade 5 class of
petitioner school. After obtaining permission from the principal, they
were allowed to use the school swimming pool for their year-end
activity. With this, respondent Taguiam distributed the
parents/guardians permit forms to the students. The permit form of
student Chiara Mae was unsigned. But because the mother
personally brought her to the school with her packed lunch and
swimsuit, Taguiam concluded that the mother allowed her to join.
Before the activity started, respondent warned the pupils who did not
know how to swim to avoid the deeper area. However, while the
pupils were swimming, two of them sneaked out. Respondent went
after them to verify where they were going. Unfortunately, while
respondent was away, Chiara Mae drowned. When respondent
returned, the maintenance man was already administering
cardiopulmonary resuscitation on Chiara Mae. She was still alive
when respondent rushed her to the General Malvar Hospital where
she was pronounced dead on arrival. The petitioner school conducted
a clarificatory hearing to which respondent attended and submitted
her Affidavit of Explanation. A month later, petitioner school
dismissed respondent on the ground of gross negligence
resulting to loss of trust and confidence. Meanwhile, Chiara Maes
parents filed aP7 Million damage suit against petitioners and
respondent, among others. They also filed against respondent a
criminal complaint for reckless imprudence resulting in homicide.
Respondent in turn filed a complaint against the school and/or
Sr. Crispina Tolentino for illegal dismissal, with a prayer for
reinstatement with full backwages and other money claims, damages
and attorneys fees.
LA
The Labor Arbiter declared that respondent was validly terminated for
gross neglect of duty. He opined that Chiara Mae drowned because
respondent had left the pupils without any adult supervision. He also
noted that the absence of adequate facilities should have alerted
respondent before allowing the pupils to use the swimming pool. The
Labor Arbiter further concluded that although respondents
negligence was not habitual, the same warranted her dismissal since
death resulted therefrom.

NLRC
Respondent appealed to the NLRC which, however, affirmed the
dismissal of the complaint.

CA
Respondent instituted a petition for certiorari before the Court of
Appeals, which ruled in her favor. The appellate court observed that
there was insufficient proof that respondents negligence was both
gross and habitual.

Issue:
Whether or not respondents dismissal on the ground of gross
negligence resulting to loss of trust and confidence was valid
Held:
Yes. Under Article 282 of the Labor Code, gross and habitual neglect
of duties is a valid ground for an employer to terminate an employee.
Gross negligence implies a want or absence of or a failure to exercise
slight care or diligence, or the entire absence of care. It evinces a
thoughtless disregard of consequences without exerting any effort to
avoid them. Habitual neglect implies repeated failure to perform ones
duties for a period of time, depending upon the circumstances. The
SC concluded that respondent had been grossly negligent. First, it is
undisputed that Chiara Maes permit form was unsigned. Yet,
respondent allowed her to join the activity because she assumed that
Chiara Maes mother has allowed her to join it by personally bringing
her to the school with her packed lunch and swimsuit. Second, it was
respondents responsibility as Class Adviser to supervise her class in
all activities sanctioned by the school. Thus, she should have
coordinated with the school to ensure that proper safeguards, such
as adequate first aid and sufficient adult personnel, were present
during their activity. She should have been mindful of the fact that
with the number of pupils involved, it would be impossible for her by
herself alone to keep an eye on each one of them.
Notably, respondents negligence, although gross, was not
habitual. In view of the considerable resultant damage, however,
the SC agreed that the cause is sufficient to dismiss respondent.
Indeed, the sufficiency of the evidence as well as the resultant
damage to the employer should be considered in the dismissal
of the employee. In this case, the damage went as far as
claiming the life of a child. #DIOLA

JOHN HANCOCK LIFE INSURANCE CORP. VS. JOANNA DAVIS
G.R. NO. 169549; SEPTEMBER 3, 2008

KEYWORDS: termination; analogous causes; stealing of credit card

FACTS: Respondent Joanna Cantre Davis was agency
administration officer of petitioner John Hancock Life Insurance
Corporation.

On October 18, 2000, Patricia Yuseco, petitioners
corporate affairs manager, discovered that her wallet was missing.
She immediately reported the loss of her credit cards to AIG and BPI
Express. To her surprise, she was informed that Patricia Yuseco
had just made substantial purchases using her credit cards in various
stores in the City of Manila. She was also told that a proposed
transaction in Abensons-Robinsons Place was disapproved because
she gave the wrong information upon verification.

20
Cantre was accused of qualified theft for stealing Patricia
Yusecos credit card which the latter allegedly used to purchase items
in various stores in the City of Manila. The NBI identified Cantre in a
security video obtained from Abensons Robinsons Place where a
proposed transaction was disapproved for giving the wrong
information upon verification. However, the complaint was dismissed
by the prosecutor because the affidavits presented by the NBI was
not properly verified.

Meanwhile, petitioner placed respondent under
preventive suspension and instructed her to cooperate with its
ongoing investigation. Instead of doing so, however, respondent
filed a complaint for illegal dismissal alleging that petitioner
terminated her employment without cause.

Labor Arbiter found that the respondent committed
serious misconduct. thus there was a valid cause for dismissal.
Respondent appealed to the NLRC which affirmed the
assailed decision.
The CA found that the labor arbiter and NLRC merely
adopted the findings of the NBI regarding respondent's culpability.
Because the affidavits of the witnesses were not verified, they did not
constitute substantial evidence. The labor arbiter and NLRC should
have assessed evidence independently as "unsubstantiated
suspicions, accusations and conclusions of employers (did) not
provide legal justification for dismissing an employee."

ISSUE:
Whether or not there is a valid cause for termination

HELD:
Yes. Article 282 of the Labor Code provides:

Article 282. Termination by
Employer. - An employer may
terminate an employment for
any of the following causes:
(a) Serious misconduct or willful
disobendience by the employee
of the lawful orders of his
employer or his representatives
in connection with his work; xxx
(e) Other causes analogous to
the foregoing. Misconduct
involves "the transgression of
some established and definite
rule of action, forbidden act, a
dereliction of duty, willful in
character, and implies wrongful
intent and not mere error in
judgment." For misconduct to
be serious and therefore a valid
ground for dismissal, it must be:
1. of grave and aggravated
character and not merely trivial
or unimportant
and
2. connected with the work of the
employee.

In this case, petitioner dismissed respondent based on
the NBI's finding that the latter stole and used Yuseco's credit cards.
But since the theft was not committed against petitioner itself but
against one of its employees, respondent's misconduct was not
work-related and therefore, she could not be dismissed for serious
misconduct.

Nonetheless, Article 282(e) of the Labor Code talks
of other analogous causes or those which are susceptible of
comparison to another in general or in specific detail. For an
employee to be validly dismissed for a cause analogous to those
enumerated in Article 282, the cause must involve a voluntary
and/or willful act or omission of the employee. A cause
analogous to serious misconduct is a voluntary and/or willful act
or omission attesting to an employee's moral depravity. Theft
committed by an employee against a person other than his
employer, if proven by substantial evidence, is a cause
analogous to serious misconduct. #FERNANDO

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