ALU v NLRC

SYNOPSIS
Petitioner Renato Felizardo was employed at respondent company as jet printer operator.
He was dismissed from employment for dishonesty and theft of company property for
bringing out a pair of boots, one (1) piece of aluminum container and fifteen (15) pieces of
hamburger patties. He and petitioner Union filed a complaint for illegal dismissal, unfair
labor practice and non-payment of 13th month pay against respondent company. The Labor
Arbiter found that with the exception of the pair of boots, the articles which petitioner took
were mere scrap, which were of no value to the respondent company. The Labor Arbiter
ruled that dismissal was too harsh a penalty to be imposed on a first-time offender and that
petitioners unemployment for about eleven (11) months was sufficient penalty for what he
had done. Hence, the Labor Arbiter ordered the reinstatement of petitioner without
backwages. On appeal, the National Labor Relations Commission reversed the decision of
the Labor Arbiter and dismissed the complaint. Hence, this petition.
The Supreme Court agreed with the Labor Arbiter that petitioners dismissal would not be
proportionate to the gravity of the offense he had committed considering the value of the
articles he pilfered, and the fact that he had no previous derogatory record during his two
(2) years of employment. However, the Labor Arbiter was mistaken in regarding the articles
taken to be mere scraps and hence without value to the respondent company. They were of
some value but not enough to warrant dismissal. Moreover, it should also be taken into
account that petitioner is not a managerial or confidential employee in whom greater trust is
placed by management and from whom greater fidelity to duty is correspondingly expected.
Hence, the Court held that dismissal as a measure to protect the interests of respondent
company is unwarranted. Suspension would have sufficed. However, the Court was of the
opinion that petitioner had already served a reasonable period of suspension commensurate
to the gravity of his offense. Thus, it considered appropriate the Labor Arbiters order of
reinstatement of petitioner without backwages.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; TERMINATION OF EMPLOYMENT;
PENALTY OF DISMISSAL NOT PROPORTIONATE TO THE GRAVITY OF OFFENSE COMMITTED BY
PETITIONER IN CASE AT BAR; REASONS THEREFOR. - We agree with the Labor Arbiter that
dismissal would not be proportionate to the gravity of the offense committed by petitioner
considering the value of the articles he pilfered and the fact that he had no previous
derogatory record during his two (2) years of employment in the company. The Labor
Arbiter is certainly mistaken in regarding the articles taken to be mere scraps and hence
without value to the company. They were of some value but not enough to warrant
dismissal. Moreover, it should also be taken into account that petitioner is not a managerial
or confidential employee in whom greater trust is placed by management and from whom
greater fidelity to duty is correspondingly expected. It is easy to see why an unfaithful
employee who is holding a position of trust and confidence in a company poses a greater
danger to its security than a mere clerk or machine operator like petitioner.
2. ID.; ID.; ID.; VIOLATIONS BY NON-CONFIDENTIAL EMPLOYEES OF COMPANY RULES AND
REGULATIONS CONSIDERED MINOR AND DO NOT DESERVE THE PENALTY OF DISMISSAL;
RATIONALE. - There is another reason why violations by non-confidential employees of
company rules and regulations such as that involved in this case are considered minor.
Such employees are generally mere wage earners whose dismissal from employment can
have severe financial consequences on their families especially at a time like the present

when unemployment is quite high. Consequently, whatever missteps may have been
committed by them ought not to be visited with a consequence so severe as dismissal.
3. ID.; ID.; ID.; PENALTY OF SUSPENSION CONSIDERED SUFFICIENT IN CASE AT BAR; ORDER
OF REINSTATEMENT WITHOUT BACKWAGES, CONSIDERED APPROPRIATE. - Dismissal as a
measure to protect the interests of respondent company is unwarranted under the facts of
this case. Suspension would have sufficed. Without deciding for how long the suspension
should be in cases such as this, considering that petitioner has been prevented from working
in respondent company since September 13, 1993, we hold that, for all purposes, he has
served a reasonable period of suspension commensurate to the gravity of his offense.
Consequently, the Labor Arbiter's order of reinstatement of petitioner without backwages
may be considered appropriate
APPEARANCES OF COUNSEL
Seno, Mendoza, Associates Law Offices for petitioners.
The Solicitor General for public respondent.
M. V. Ampil, Jr. Associates for private respondents.
PLDT v NLRC
SYNOPSIS
Enrique Gabriel was PLDTs supervisor in Quezon City, and when he ordered two installers
who were not under his direct supervision to set-up telephone units in Mandaluyong, the
installation activities were investigated. Later, Gabriel was dismissed from employment on
the ground of grave misconduct, breach of trust, and violations of company rules and
regulations. Gabriel filed a case for illegal dismissal, but the Labor Arbiter ruled that the
dismissal was justified. On appeal, the NLRC reversed the same and directed PLDT to
reinstate Gabriel with full backwages, benefits and proportionate privileges. Hence, this
case.
The NLRC reversed the decision of the labor arbiter when it found no written rule of PLDT
which provides that unwarranted installation of telephone lines is subject to the penalty of
dismissal. Also, there was no proof that Gabriel profited from the said setting up of
telephone lines, and there was no showing that PLDT suffered losses from the telephone
service. Hence, the NLRC is not entirely without good and justifiable reason in ordering the
reinstatement of Gabriel. And since Gabriels dismissal has been found to be of doubtful
justification in law and policy, the award of full backwages had to be sustained, but only
from the date the NLRC promulgated its decision.
On the award of unspecified other benefits and proportionate privileges, the same was
unwarranted since Gabriel was not entirely faultless. The irregularity attributable to him
could not be entirely disregarded.
SYLLABUS
1. LABOR LAWS; EMPLOYMENT; DISMISSAL; GROUND; LOSS OF CONFIDENCE;
ELUCIDATED. The basic requisite for dismissal on the ground of loss of confidence is that
the employee concerned must be one holding a position of trust and confidence. However;
loss of confidence must not be indiscriminately used as a shield by the employer against a
claim that the dismissal of an employee was arbitrary likewise, it must be noted that willful
defiance of company rules must be characterized by perverse attitude that would be
considered as inimical to the interest of his employer. Even when an employee is found to
have transgressed the employers rules, in the actual imposition of penalties upon the erring

employee, due consideration must still be given to his length of service and the number of
violations committed during his employ.
2. ID.; ID.; PENALTY OF DISMISSAL. Dismissal is the ultimate penalty that can be meted to
an employee. Where a penalty less punitive would suffice, whatever missteps may have
been committed by the worker ought not to be visited with a consequence so severe such as
dismissal from employment. For, the Constitution guarantees the right of workers to
security of tenure. The misery and pain attendant to the loss of jobs then could be avoided
if there be acceptance of the view that under certain circumstances of the case the workers
should not be deprived of their means of livelihood.
3. ID.; ID.; ILLEGAL DISMISSAL; APPRECIATED. The NLRC reversed the Labor Arbiters order
of dismissal imposed against private respondent Gabriel after it found no written rule of
PLDT which provides that unwarranted installation of telephone lines is subject to the
penalty of dismissal. Nor was there any proof that the private respondent profited from the
said setting up of telephone lines. Neither was there a showing that PLDT suffered losses
from the same. Finally, the subject telephones were installed only after the documents of
approval were issued by PLDT. Given these circumstances, a substantial doubt as to the
validity of the termination appears, and the employees claim of illegal dismissal accordingly
gains credence because such doubt must be resolved in his favor. In ordering the
reinstatement of private respondent, Gabriel, the public respondent, NLRC, is not entirely
without good and justifiable reason. Thus it could not be said that this portion of the
assailed Resolution of the NLRC is tainted with grave abuse of discretion.
4. ID.; ID.; ID.; BACKWAGES PROPER BUT NOT THE OTHER BENEFITS AS EMPLOYMENT NOT
ENTIRELY FAULTLESS. Since Gabriels dismissal has been found to be of doubtful
justification in law and policy, the award by the NLRC of full backwages in his favor could not
be said as erroneous. It has to be sustained, but only from the date of the NLRCs
promulgation of its Resolution. Backwages including thirteen month pay are a form of relief
that restores the income that was lost by reason of unlawful dismissal. On the other hand,
the award of unspecified other benefits and proportionate privileges to the private
respondent by the NLRC appears to us already unwarranted. Private respondent is not
entirely faultless. As a supervisor, he is required to act judiciously and to exercise his
authority in harmony with company policies. When he jeopardized the status of the rankand-file employees whom he ordered to by-pass the standard operating procedures of the
company, to the detriment of his employer, he was not entirely blameless. The irregularity
attributable to him could not be entirely disregarded. He must not be further rewarded, in
fairness to the employers own legitimate concerns such as company morale and discipline.
APPEARANCES OF COUNSEL
Tanjuatco Corpus Tanjuatco Tagle-Chua Cruz Aquino for petitioner.
The Solicitor General for public respondent.
Cruz Rome Associates for private respondent.
SECOND DIVISION
[G.R. No. 126601. February 24, 1998]
CEBU FILVENEER CORPORATION and/or CARLO CORDARO, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION (Fourth Division) and JESSIELYN VILLAFLOR, respondents.
D E C I SI O N
PUNO, J.:

This petition for certiorari and prohibition[1] seeks to nullify the April 30, 1996 Decision[2] and the
August 28, 1996 Resolution[3] of the National Labor Relations Commission (Fourth Division) declaring
illegal the dismissal of Jessielyn Villaflor and holding Cebu Filveneer Corporation and Carlo Cordaro
solidarily liable for separation pay, backwages, moral damages and attorney's fees.
On November 16, 1991, the private respondent was hired as chief accountant of petitioner Cebu
Filveneer Corporation. Ms. Rhodora M. Guillermo served as her accounting clerk. The top executives
of petitioner corporation were Italians: Mr. Carlo Cordaro, President; Mr. John Chapman Kun, General
Manager; and, Mr. Renato Marinoni, Production Manager.
On January 21, 1992, Mr. Kun informed Mr. Cordaro of his desire to resign as general manager effective
March 1, 1992. He requested for the liquidation of his investment in the company in the sum
of P125,000.00.
On February 7, 1992, Mr. Kun secured one blank check and blank check voucher from Ms.
Guillermo. Ms. Guillermo failed to immediately inform the private respondent of the blank check and
voucher taken by Mr. Kun. Private respondent, however, noticed the missing check voucher on
February 10, 1992. She asked Ms. Guillermo about the check voucher and was told that it was with Mr.
Kun. Mr. Kun was able to prepare the check in the amount of P125,000.00, had it signed by Mr.
Marinoni and encashed on February 12, 1992.
Private respondent learned of Mr. Kun's act and forthwith informed Mr. Cordaro who was then in
Italy. Mr. Cordaro suspended Mr. Kun and designated Mr. Marinoni and the private complainant as
responsible persons for the company funds. He also directed the private complainant to assist the
company lawyer in filing a criminal case against Mr. Kun. On her part, the private complainant wrote to
the PNB MEPZ Branch demanding the return of the encashed check.
On February 15, 1992, Mr. Marinoni confronted the private respondent and charged her with complicity
in Mr. Kun's irregular disbursement of company funds. On February 17, 1992, the private respondent
reported for work late and was prevented entry by the security guards. A Restriction Order has been
issued against her by Mr. Marinoni upon authority of Mr. Cordaro. Mr. Marinoni also caused the forcible
opening of private respondent's table and the vault inside her office. The private respondent reported
the incident to the MEPZ PNP Station.
On February 18, 1992, the private respondent complained to the MEPZ Labor Relations Officer. The
next day, Mr. Marinoni issued a memorandum suspending the private respondent for thirty (30) days
without pay effective February 17, 1992 for failure to report to office for half a day. On February 19,
1992, the private respondent filed a case against the petitioners for illegal dismissal. [4] On February 20,
1992, Mr. Marinoni issued another memorandum preventively suspending her for thirty (30) days
effective the next day pending investigation on her involvement in the unauthorized encashment by
Mr. Kun of company funds. The petitioner also published a newspaper advertisement of its need for an
accountant.
On March 5, 1992, Atty. Julius Neri notified the private respondent that her investigation would start
March 12, 1992. Private respondent failed to attend the investigation so it was reset to March 28,
1992. On said date, the private respondent appeared thru Atty. Godofredo Parawan, Jr. who objected
to the conduct of the investigation on the ground that his client had already filed a complaint for illegal
dismissal with the labor arbiter. Nonetheless, Atty. Neri proceeded with the investigation ex parte. On
April 6, 1992, on the basis of Atty. Neri's recommended action, petitioner dismissed the private
respondent on two grounds: (1) failure to report the blank check and voucher which Mr. Kun secured
from Ms. Guillermo; and (2) overpaying herself P7,000.00 as 13th month pay for the year 1991.[5]
On November 22, 1994, Labor Arbiter Ernesto F. Carreon decided in favor of the private respondent
whom he found to have been illegally dismissed. He ordered petitioners to pay solidarily the private
respondent P24,000.00 as separation pay; P265,315.05 as backwages; P20,000.00 as moral damages
and P30,931.50 as attorney's fees or a total sum of P340,246.55.
Petitioners appealed to the public respondent NLRC.[6] On April 30, 1996, the public respondent
affirmed the Decision with the modification that from the backwages of private respondent should be
deducted the amount she earned as income during the pendency of the case.
In this petition, petitioners contend:

"THE RESPONDENT COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OF

JURISDICTION IN FINDING THAT THERE WAS ILLEGAL DISMISSAL FOR WHICH PRIVATE RESPONDENT
SHOULD BE ENTITLED TO SEPARATION PAY, BACKWAGES, MORAL DAMAGES AND ATTORNEY'S FEES,
DESPITE THE CLEAR PRESENCE OF BREACH OF TRUST, GROSS NEGLECT AND ACTS INIMICAL TO THE
CORPORATION.
EVEN ASSUMING ARGUENDO THAT THERE WAS AN ILLEGAL DISMISSAL, THE RESPONDENT
COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
FAILING TO EXCLUDE THE PERIOD THAT PRIVATE RESPONDENT RESIGNED FROM CATTLEYA TRAVEL TO
STAY IN THE UNITED STATES IN ORDER TO TAKE CARE OF HER PARENTS. MOREOVER, THE RULING OF
ILLEGAL DISMISSAL WOULD NOT WARRANT THE PAYMENT OF SEPARATION PAY AND MORAL DAMAGES
CONSIDERING THAT THE PRIVATE COMPLAINANT CANNOT BE ENTIRELY DECLARED WITHOUT FAULT.
THE RESPONDENT COMMISSION GRAVELY ABUSED ITS DISCRETION IN MAKING PETITIONER CORDARO
SOLIDARILY LIABLE WITH THE PETITIONER CORPORATION."
We affirm with modification.
We uphold the ruling of the public respondent that petitioners have no ground to dismiss the private
respondent for breach of trust or gross negligence. Under Article 282 of the Labor Code, an employer
may terminate an employment for any of the following causes:
"(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer
or representative in connection with his work;
(b)

Gross and habitual neglect by the employee of his duties;

(c)
Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d)
Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representative; and
(e)

Other causes analogous to the foregoing."

In labor-management relations, there can be no higher penalty than dismissal from

employment. Dismissal severs employment ties and could well be the economic death sentence of
an employee. Dismissal prejudices the socio-economic well being of the employee's family and
threatens the industrial peace. Due to its far reaching implications, our Labor Code decrees that an
employee cannot be dismissed, except for the most serious causes. The overly concern of our laws
for the welfare of employees is in accord with the social justice philosophy of our Constitution.
Prescinding from these premises, petitioners' insistence that they legally dismissed the private
respondent for loss of trust stands on quicksand. At the very most, petitioners were only able to prove
that private respondent failed to inform immediately her superiors of the act of Mr. Kun in getting a
blank check and blank voucher from Ms. Guillermo. The omission of the private respondent can hardly
be described as "willful" to justify her dismissal. For one, the omission did not last for long. For
another, the subsequent actions of the private respondent upon learning of the encashment of the
unauthorized check by Mr. Kun negate any implication that she willfully or intentionally defaulted in
reporting to prejudice petitioners. Indeed, she reported the matter to petitioner Cordaro and wrote to
the PNB MEPZ Branch to retrieve the encashed check. A breach is willful if it is done intentionally,
knowingly and purposely. Petitioners merely proved the omission of the private respondent but there
is no evidence whatsoever that it was done intentionally.
Nor are we prepared to agree with petitioners that the private respondent was grossly or habitually
negligent in the performance of her duties. The records reveal that the private respondent has not
been remiss in the past in the performance of her duties, hence, she cannot be charged with habitual
negligence. We cannot also characterize private respondent's negligence as gross in character. 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.[7] In the case at bar, the evidence does not show that the private respondent has any
reason to distrust Mr. Kun. Mr. Kun was petitioner's general manager and appears to have conducted

himself well in the performance of his duties in the past. There was not the slightest reason to suspect
that Mr. Kun would commit any illegal act. At the most, the trust misplaced by the private respondent
constitutes error of judgment but not gross negligence.
Anent petitioners' claim that the private respondent overstated her 13th month pay, suffice to quote
the findings of the public respondent, viz.:
xxx

xxx

xxx

"On the accusation of gross dishonesty relative to the disbursement by the complainant in her favor of
the amount of P8,000.00 as 13th month pay for the year 1991, the complainant claimed this is part of
the compensation package agreed to be granted to her, and this remains unrefuted on record. More
telling than this is the fact that the said disbursement had already passed in audit and was not
discredited by the company president Mr. Carlo Cordaro. At most, this charge of dishonesty against
the complainant is an afterthought resorted to by the respondents to justify their intention to and
eventual dismissal of the complainant."[8]
Petitioners' demand that the backwages should he reduced in view of the time she spent in the United
States deserves scant attention. In Bustamante, et al. vs. NLRC,[9] we held:
xxx

xxx

xxx

"On 21 March 1989, Republic Act No. 6715 took effect, amending the Labor Code. Article 279 thereof
states in part:
`ART. 279. Security of Tenure.- An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive
of allowances, and to his other benefits or their monetary equivalent computed from the time his
compensation is withheld from him up to the time of his actual reinstatement.' (italics supplied)
"In accordance with the above provision, an illegally dismissed employee is entitled to his full
backwages from the time his compensation was withheld from him (which, as a rule, is from the time
of his illegal dismissal) up to the time of his actual reinstatement. It is true that this Court had ruled in
the case of Pines City Educational Center vs. NLRC (G.R. No. 96779, 10 November 1993, 227 SCRA
655) that "in ascertaining the total amount of backwages payable to them (employees), we go back to
the rule prior to the Mercury Drug rule that the total amount derived from employment elsewhere by
the employee from the date of dismissal up to the date of reinstatement, if any, should be deducted
therefrom." The rationale for such ruling was that, the earnings derived elsewhere by the dismissed
employee while litigating the legality of his dismissal, should be deducted from the full amount of
backwages which the law grants him upon reinstatement, so as not to unduly or unjustly enrich the
employee at the expense of the employer.
"The Court deems it appropriate, however, to reconsider such earlier ruling on the computation of
backwages as enunciated in said Pines City Educational Center case, by now holding that
conformably with the evident legislative intent as expressed in Rep. Act No. 6715, above-quoted,
backwages to be awarded to an illegally dismissed employee, should not, as a general rule, be
diminished or reduced by the earnings derived by him elsewhere during the period of his illegal
dismissal. The underlying reason for this ruling is that the employee, while litigating the legality
(illegality) of his dismissal, must still earn a living to support himself and family, while full backwages
have to be paid by the employer as part of the price or penalty he has to pay for illegally dismissing
his employee. The clear legislative intent of the amendment in Rep. Act No. 6715 is to give more
benefits to workers that was previously given them under the Mercury Drug rule or the "deduction of
earnings elsewhere" rule. Thus, a closer adherence to the legislative policy behind Rep. Act No. 6715
points to "full backwages" as meaning exactly that, i.e., without deducting from backwages the
earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. In
other words, the provision calling for "full backwages" to illegally dismissed employees is clear, plain
and free from ambiguity and, therefore, must be applied without attempted or strained
interpretation. Index animi sermo est."
We hold that public respondent should not have awarded moral damages and attorney's fees in favor
of the private respondent. To be sure, the private respondent was negligent when she did not
immediately inform her superior about the blank check and voucher taken by Mr. Kun, although, as

aforediscussed, it is not the specie of negligence that will justify dismissal. Thus, petitioners should
not and cannot be made to pay moral damages and attorney's fees for their dismissal of the private
respondent was not motivated by bad faith or malice.
Finally, we hold that Mr. Cordaro cannot be made solidarily liable with petitioner corporation for the
illegal dismissal of the private respondent. In dismissing the private respondent, he acted as President
of petitioner corporation and he did so in good faith. His act as an officer of the corporation cannot
result in his private liability. This is too fundamental a rule to deserve further discussion.
IN VIEW WHEREOF, the April 30, 1996 Decision and August 28, 1996 Resolution of the public
respondent are affirmed subject to the modification deleting the award of moral damages and
attorney's fees and absolving petitioner Carlo Cordaro from liability. No costs.
SO ORDERED.
Regalado, (Chairman), Melo, Mendoza, and Martinez, JJ., concur.

GOLDEN THREAD
SYNOPSIS
The NLRC reversed the decision of the Labor Arbiter upholding the dismissals of private respondents
by declaring that they were illegally dismissed and thus, directed petitioners to immediately reinstate
said private respondents with full back wages and other benefits.
The Court agreed with the ruling of the NLRC. The charge of serious misconduct against Romulo
Albasin and George Macaspac was not substantiated. Further, they were denied procedural due
process because they were not afforded the benefit of hearing and investigation before termination.
Neither did they receive notice to that effect. They were summarily eased out of employment when
they were refused entry into the company premises after allegedly slashing with razor blades several
bundles of towels in the warehouse.
As regards Gilbert Rivera and Mary Ann Macaspac who were terminated on the ground of redundancy,
there existed serious doubt on the validity and propriety of their termination. It was not shown why
their positions were indeed unnecessary and no criterion whatsoever was adopted in their dismissal.
Further, the dismissal was not reported to the DOLE as required by law.
On the part of Flora Balbino who was terminated for serious misconduct for hurling invectives and
threats to his employer, and taking her time card off the rack, the Court ruled that the same was
provoked by the employer who imposed baseless suspension on her. Hence, dismissal was too harsh a
penalty. One week suspension would have sufficed. Then again, she was denied procedural due
process when she was summarily dismissed.
On the termination of Melchor Cachucha for abandonment of work, the Court noted that Cachucha lost
no time in filing a complaint for illegal dismissal against petitioners. This was incompatible with the
charge of abandonment and confirmed his allegation that he was refused entry into the company
premises.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; EMPLOYMENT; ILLEGAL DISMISSAL; CHARGE OF SERIOUS
MISCONDUCT, NOT SUBSTANTIATED. -- Petitioners were unable to substantiate the charge of serious
misconduct against Macaspac and Albasin. The incident report of the security guards that they caught
the two slashing with razor blades several bundles of towels in the warehouse was on its face
categorical on the culpability of subject respondents, yet the report was not utilized as supporting
evidence in the criminal proceedings. We have reason to believe that the incident report was merely
concocted by petitioners in view of the filing of the labor cases against them. Moreover, it has not
been shown that Macaspac and Albasin were such feckless individuals who would resort to destruction
of company properties in total disregard of its dire consequences. On the contrary, they were union
members fighting for their rights as employees. Even the reason for their misconduct banks on

speculation. Further still, it does not appear that the criminal case filed ever prospered at the
prosecutor's level.
2. ID.; ID.; ID.; NON-COMPLIANCE WITH PROCEDURAL DUE PROCESS. -- Macaspac and Albasin were
likewise denied procedural due process. Petitioners failed to afford Macaspac and Albasin the benefit
of hearing and investigation before termination. Neither did petitioners comply with the requirement
on notices. An established rule of long standing is that to effect a completely valid and unassailable
dismissal, an employer must show not only sufficient ground therefor but must also prove that
procedural due process has been observed by giving the employee two (2) notices: one, of the
intention to dismiss, indicating therein his acts or omissions complained against, and two, notice of the
decision to dismiss.
3. ID.; ID.; ID.; REDUNDANCY, NOT ADEQUATELY PROVEN. -- The characterization of an employee's
services as no longer necessary or sustainable, and therefor properly terminable, is an exercise of
business judgment on the part of the employer. The wisdom or soundness of such characterization or
decision is not subject to discretionary review on the part of the Labor Arbiter nor the NLRC provided,
of course, that violation of law or arbitrary or malicious action is not shown. In the instant case, we
question petitioners' exercise of management prerogative because it was not shown that Rivera and
Macaspac's positions were indeed unnecessary, much less was petitioners' claim supported by any
evidence. It is not enough for a company to merely declare that it has become overmanned. It must
produce adequate proof that such is the actual situation in order to justify the dismissal of the affected
employees for redundancy.
4. ID.; ID.; ID.; NO CRITERIA FOR DISMISSAL ON GROUND OF REDUNDANCY WAS ADOPTED. -- We have
laid down the principle that in selecting the employees to be dismissed, a fair and reasonable criteria
must be used, such as but not limited to: (a) less preferred status (e.g., temporary employee), (b)
efficiency, and (c) seniority. The records disclose that no criterion whatsoever was adopted by
petitioners in dismissing Rivera and Macaspac.
5. ID.; ID.; ID.; LACK OF WRITTEN NOTICE TO DOLE. -- Another procedural lapse committed by
petitioners is the lack of written notice to the DOLE required under Art. 283 of the Labor Code. The
purpose of such notice is to ascertain the verity of the cause of termination of employment.
6. ID.; ID.; ID.; WHERE EMPLOYEE'S ACT OF DISRESPECT WAS PROVOKED BY THE EMPLOYER. -- The
utterances by an employee of obscene, insulting or offensive words against a superior justify his
dismissal for gross misconduct. The scornful attitude is also destructive of his co-employees' morale.
However, the dismissal will not be upheld where it appears, as in this case, that the employee's act of
disrespect was provoked by the employer. Balbino was suspended because she allegedly continually
slowed down in her production. Yet, petitioners failed to show that there was an established quota for
production as a point of reference to determine whether an employee was performing below or above
the quota to warrant the charge. Balbino hurled invectives at petitioner Bico because she was
provoked by the baseless suspension imposed on her. The penalty of dismissal must be
commensurate with the act, conduct or omission imputed to the employee. Under the circumstances,
we believe that dismissal was a harsh penalty; one (1) week suspension would have sufficed.
7. ID.; ID.; ID.; ABANDONMENT, NOT APPRECIATED. -- For abandonment to exist, it is essential that (1)
the employee must have failed to report for work or must have been absent without valid or justifiable
reason; and, (2) there must have been a clear intention to sever the employer-employee relationship
manifested by some overt acts. The circumstance that Cachucha lost no time in filing a complaint for
illegal dismissal against petitioners is incompatible with the charge of abandonment and confirms in
fact that he was refused entry into the company premises.
8. ID.; ID.; ID.; ELUCIDATED. -- Dismissal is the ultimate penalty that can be meted to an employee. It
must therefore be based on a clear and not on an ambiguous or ambivalent ground. From our
assessment of the record, we find that petitioners exercised their authority to dismiss without due
regard to the pertinent exacting provisions of the Labor Code. The right to terminate should be utilized
with extreme caution because its immediate effect is to put an end to an employee's present means of
livelihood while its distant effect, upon subsequent finding of illegal dismissal is just as pernicious to
the employer who will most likely be required to reinstate the subject employee and grant him full
back wages and other benefits.
APPEARANCES OF COUNSEL

Norberto v. Fogeta for petitioners.

The Solicitor General for public respondent.
Antonio A. Geronimo for private respondents.