[G.R. No. 117040.

January 27, 2000]

RUBEN SERRANO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and

ISETANN DEPARTMENT STORE, respondents.

FACTS
Ruben Serrano was the head of the security checkers section of Isetann Department Store. He
was charged with the task of supervising security checkers in their jobs (apprehending shoplifters
and preventing pilfirege of merchandise). On October 11, 1991, the management sent him a
letter immediately terminating his services as security section head, effective on the same day.
The reason given by the management was retrenchment; they had opted to hire an
independent security agency as a cost-cutting measure. Serrano filed a complaint for ID, illegal
layoff, ULP, underpayment of wages and nonpayment of salary and OT pay with the LA.

The LA rendered a decision in favor of Serrano. It stated that Isetann failed to establish that it
had retrenched its security division, that the petitioner was not accorded due process, etc. and
even stated that the day after Serranos dismissal, Isetann employed a safety and security
supervisor with similar duties to that of the former.

The NLRC on the other hand reversed the LA but ordered Isetann to pay separation pay
equivalent to one month per year of service, unpaid salary, et al. It held that the phase-out of the
security section was a valid exercise of management prerogative on the part of Isetann, for
which the NLRC cannot substitute its judgment in the absence of bad faith or abuse of discretion
on the part of the latter; and that the security and safety supervisors position was long in place
prior to Serranos separation from the company, or the phase-out of the Security Section.

ISSUE
Whether the petitioners dismissal was illegal.

RULING: Valid, but ineffectual (without legal effect) payment of backwages,

separation pay and other monetary claims
No. The Court held that the dismissal was due to an authorized cause under Art. 283 of the Labor
Code, i.e. redundancy. However, while an authorized cause exists, Isetann failed to follow the

procedural requirement provided by Art. 283 of LC. For termination due to authorized causes, the
employer must give a written notice of termination to the employee concerned and to the DOLE
at least 30 days prior to its effectivity. This Isetann failed to do.

The question now arises as to whether the failure of Isetann to comply with the procedural
requirements renders the dismissal invalid, or, in the event that it is valid, what the appropriate
sanction or penalty must be meted out.

Prior to the doctrine laid down in the decision rendered in Wenphil Corp. NLRC in 1989, the
termination of an employee, even for just cause but without following the requisite procedure,
renders such dismissal illegal, and therefore null and void.

In the Wenphil doctrine, this was reversed; the said rule was unjust to employers. Instead, the
dismissal was held to be still valid but the employer was sanctioned by way of the payment of
indemnity (damages) in that case, P1,000. The amount of indemnity will be depended on the
circumstances of each case, taking into account the gravity of the offense committed by the
employer.

Now, the Court once again examines the Wenphil doctrine. Puno says that the effect of the
Wenphil doctrine was such that there has been a dismiss now, pay later policy where the
employers were able to circumvent the procedural requisites of termination, which is more
convenient than the compliance with the 30-day notice. Panganiban said that the monetary
sanctions were too insignificant, niggardly, sometimes even late. Both justices are of the
opinion that the deprivation of due process which must be accorded to the employee renders the
dismissal illegal. Puno quoted that Legislative, Executive and Judicial proceedings that deny due
process do so under the pain of nullity. Panganiban stated that such denial of due process
renders decisions and proceedings void for lack of jurisdiction.

The present ruling of the Court held that the dismissal of the employee is merely ineffectual,
not void. The dismissal was upheld but it is ineffectual. The sanction provided was the
payment of backwages from the time of dismissal up to the decision of the court finding just or
authorized cause. This was thought to balance the interests of both parties, recognizing the
employees right to notice and at the same time the right of the employer to dismiss for any of
the just and authorized causes.

The Court also responded to the arguments of Justices Puno and Panganiban by stating that
the violation in the procedural requirement of termination is not a denial of the fundamental right
to due process. This is because of the ff reasons:
1) The due process clause is a limitation on governmental powers, inapplicable to the
exercise of private power, such as in this case. The provision No person shall be deprived
of life, liberty and property without due process of law pertains only to the State, as only
it has the authority to do the same.
2) The purpose of the notice and hearing under the Due process clause is to provide an
opportunity for the employee to be heard before the power of the organized society is
brought upon the individual. Under Art. 283, however, the purpose is to give him time to
prepare for the eventual loss of his job and for DOLE to determine whether economic
causes exist to justify termination. It is not to give opportunity to be heard there is no
charge against the employee under Art. 283
3) The employer cannot be expected to be an impartial judge of his own cause.
4) Not all notice requirements are requisites of due process. Some are simply a part of a
procedure to be followed before a right granted to party can be exercised; others are an
application of the Justinian precept. Such is the case here. The failure of the employer to
observe a procedure for the termination of employment which makes the termination of
employment merely ineffectual.
5) Art. 279 of the LC provides that only dismissal without just or authorized cause renders
such dismissal illegal. To consider termination without observing procedural reqts as also
ID is to add another ground for ID, thereby amending Art. 279.; Further, there is a
disparity in legal treatment, as employees who resign without giving due notice are only
liable for damages; it does not make their resignation void.

In this case, the separation pay was a distinct award from the payment of backwages as a
way of penalty.

Petition was denied.

AGABON v.NLRC
FACTS
Virgilio and Jenny Agabon worked for respondent Riviera Home Improvements, Inc. as gypsum
and cornice installers from January 1992 until Feb 1999. Their employment was terminated when
they were dismissed for allegedly abandoning their work. Petitioners Agabon then filed a case of
illegal dismissal. /// The LA ruled in favor of the spouses and ordered Riviera to pay them their
money claims. The NLRC reversed the LA, finding that the Agabons were indeed guilty of
abandonment. The CA modified the LA by ruling that there was abandonment but ordering
Riviera to pay the Agabons money claims.///
The arguments of both parties are as follows:
The Agabons claim, among others that Riviera violated the requirements of notice and
hearing when the latter did not send written letters of termination to their addresses.
Riviera admitted to not sending the Agabons letters of termination to their last known addresses
because the same would be futile, as the Agabons do not reside there anymore. However, it also
claims that the Agabons abandoned their work. More than once, they subcontracted installation
works for other companies. They already were warned of termination if the same act was
repeated, still, they disregarded the warning.
ISSUES
1. Whether the Agabons were illegally dismissed
2. Whether Riviera violated the requirements of notice and hearing
3. Is the violation of the procedural requirements of notice and hearing for termination of
employees a violation of the Constitutional due process?
4. What are the consequences of violating the procedural requirements of termination?
RULING: Valid dismissal but violation of statutory due process = payment of nominal
damages (P30,000) & balance of 13th month pay, etc.
1. No. There was just cause for their dismissal, i.e., abandonment. Art. 282 specifies the grounds
for just dismissal, to wit:
a. Serious misconduct or willful disobedience of the lawful orders of the employer or his duly
authorized representative in connection with the employees work
b. Gross and habitual neglect of the by the employee of his duties (includes abandonment)
c. Fraud or willful breach of the trust reposed by the employer or his duly authorized
representative to the employee
d. Commission of a crime or offense by the employee against the person of the employer or
any member of his immediate family or his duly authorized representative
e. Any other causes analogous to the foregoing.
To establish abandonment, two elements must be present:
a. The unjustified failure of the employee to report for work
b. A clear intention to sever e-e relationship, manifested by overt acts
Here, the Agabons were frequently absent from work for having performed installation work
for another company, despite prior warning given by Riviera. This clearly establishes an
intention to sever the e-e relationship between them, and which constitutes abandonment.
2. Yes. While the employer has the right to expect good performance, diligence, good conduct
and loyalty from its employees, it also has the duty to provide just compensation to his
employees and to observe the procedural requirements of notice and hearing in the
termination of his employees.
Procedure of termination (Omnibus Rules Implementing the Labor Code):
a. A written notice to the employee specifying the grounds for termination and giving the
employee reasonable opportunity to be heard

b. A hearing where the employee is given the opportunity to respond to the charges against
him and present evidence or rebut the evidence presented against him (if he so requests)
c. A written notice of termination indicating that grounds have been established to justify his
termination upon due consideration of all circumstances
In this case, Riviera failed to notify the Agabons of their termination to their last known
addresses. Hence, they violated the procedural requirement laid down by the law in the
termination of employees.
3. No. Constitutional due process is that provided under the Constitution, which involves the
protection of the individual against governmental oppression and the assurance of his rights In
civil, criminal and administrative proceedings; statutory due process is that found in the
Labor Code and its Implementing Rules and protects the individual from being unjustly
terminated without just or authorized cause after notice and hearing.
The two are similar in that they both have two aspects: substantive due process and
procedural due process. However, they differ in that under the Labor Code, the first one
refers to the valid and authorized causes of employment termination, while the second one
refers to the manner of dismissal. A denial of statutory due process is not the same as a denial
of Constitutional due process for reasons enunciated in Serrano v. NLRC.
4.

The dismissal is valid, but Riviera should pay nominal damages to the Agabons in vindication
of the latter for violating their right to notice and hearing. The penalty is in the nature of a
penalty or indemnification, the amount dependent on the facts of each case, including the
nature of gravity of offense of the employer.
In this case, the Serrano doctrine was re-examined.
First, in the Serrano case, the dismissal was upheld, but it was held to be ineffectual (without
legal effect). Hence, Serrano was still entitled to the payment of his backwages from the time
of dismissal until the promulgation of the court of the existence of an authorized cause.
Further, he was entitled to his separation pay as mandated under Art. 283. The ruling is unfair
to employers and has the danger of the following consequences:
a. The encouragement of filing frivolous suits even by notorious employees who were justly
dismissed but were deprived of statutory due process; they are rewarded by invoking due
process
b. It would create absurd situations where there is just or authorized cause but a procedural
infirmity invalidates the termination, ie an employee who became a criminal and
threatened his co-workers lives, who fled and could not be faound
c. It could discourage investments that would generate employment in the economy
Second, the payment of backwages is unjustified as only illegal termination gives the
employee the right to be paid full backwages. When the dismissal is valid or upheld, the
employee has no right to backwages.
ADDITIONAL NOTES:
1. Dismissals based on just causes: acts or omissions attributable to the employee; no
right to claim backwages or to pay separation pay (separation pay is subject to exception,
ie if termination is not based on serious misconduct or a conduct reflecting the moral
depravity of a person, separation pay may be granted by reason of social justice)
Dismissals based on authorized causes: involve grounds provided under the Labor
Code; employee (and DOLE) is entitled the payment of separation pay (redundancy and
installation of labor-saving devices: 1 month pay or 1 month/yr of service, whichever is
higher; retrenchment and closure or cessation of business: 1 month pay or month per
year of service, whichever is higher)
Illegal termination: employee is entitled to the payment of full backwages as well as
reinstatement without loss of seniority rights and other privileges, inclusive of allowances

and other monetary claims from the time compensation was withheld until reinstatement;
if reinstatement is not possible, separation pay shall be given.

INTEGRATED MICROELECTRONICS, INC. (IMI) VS ADONIS A. PIONILLA

G.R. NO. 200222, AUGUST 28, 2013

FACTS:
Petitioner IMI employed respondent Adonis Pionilla as one of its production worker. Pionilla
was later on dismissed for violating company rules and regulations which prohibits lending one's
ID since the same is considered a breach of its security rules. It was reported that Pionilla was
seen escorting a lady to board the company shuttle bus at a terminal, and that the lady was
wearing a company ID which serves as a free pass for shuttle bus passengers even if she was
just a job applicant at IMI. Pionilla admitted that he lent his ID to the lady who turned out to be
his relative. It was also admitted by Pionilla that at the time of the incident, he had two Ids in his
name as he lost his original ID but was able to secure a temporary ID later on. As Pionilla and his
relative were about to board the shuttle bus, they were both holding separate Ids, both in his
name. The day after the incident, Pionilla received a notice requiring him to explain the incident
and a committee was subsequently formed to investigate the matter. Subsequently IMI found
Pionilla guilty and was dismissed from service.

ISSUE: Whether or not Pionilla was illegally dismissed and hence entitled to reinstatement and
full back wages

RULING:

An illegally dismissed employee is entitled to either reinstatement, if viable or separation pay if

reinstatement is no longer viable and backwages. In certain cases, however, the Court has
ordered reinstatement of the employee without backwages considering the fact that (1) the
dismissal of the employee would be too harsh a penalty and, (2) the employer was in good faith
in terminating the employee.

The Court observed that: (a) the penalty of dismissal was too harsh of a penalty to be imposed
against Pionilla for his infractions; and (b) IMI was in good faith when it dismissed Pionilla as his
dereliction of its policy on ID usage was honestly perceived to be a threat to the company's
security. In this respect, since these circumstances trigger the application of the exception to the
rule on backwages, the Court finds it proper to accord the same disposition and consequently
directs the deletion of the award of back wages in favor of Pionilla, notwithstanding the illegality
of the dismissal.

NATHANIEL DONGON v. RAPID MOVERS AND FORWARDERS CO. INC. ET AL.

G.R. No. 163431, August 28, 2013, First Division (Bersamin, J.)

The prerogative of the employer to dismiss an employee on the ground or willful

disobedience to company policies must be exercised in good faith and with due regard to the
rights of labor.

Natahniel Dongon was dismissed from Rapid Movers and Forwarders Co. Inc. due to
willful disobedience. Dongon is a fromer truck helper leadman. Dongons area of assignment is in
Tanduay Otis Warehous where Dongon and his driver Vicente Villaruz tried to get some goods to
be distributed to their clients. To get the clearance for the release of the goods, Dongon lent his
ID card to Villaruz. However, the security guard, who saw the misrepresentation committed by
Dongon and Villaruz, accosted them and reported the matter to the management of Tanduay.
Now, Dongon is claiming that he is illegally dismissed from his work.

Dongon claims that his dismissal was a penalty too harsh and disproportionate to his
supposed violation; and that his dismissal was inappropriate due to the violation being his first
infraction that was even committed in good faith and without malice. On the other hand, Rapid
Movers claims they rightly exercised its prerogative to dismiss petitioner because he violated the
Companys Manual of Discipline which amounted to willful disobedience. The Labor Arbiter
dismissed the complaint and agrees with the contention of Rapid Movers. On appeal, the NLRC
reversed the decision of the Labor Arbiter. The Court of Appeals affirmed the decision of the
NLRC.

ISSUE: Is the dismissal of Dongon on the ground of willful disobedience to the company
regulation lawful?

RULING:Dongon was not guilty of willful disobedience; hence, his dismissal was
illegal.

The Supreme Court ruled the disobedience attributed to Dongon could not be justly
characterized as willful within the contemplation of Article 296 of the Labor Code. Willfulness
must be attended by a wrongful and perverse mental attitude rendering the employees act
inconsistent with proper subordination.

Dongon neither benefitted from it, nor thereby prejudiced the business interest of Rapid
Movers. His explanation that his deed had been intended to benefit Rapid Movers was credible.
There could be no wrong or perversity on his part that warranted the termination of his
employment based on willful disobedience and considering also that he had rendered seven long
unblemished years of service to Rapid Movers, his dismissal was plainly unwarranted.

Moreover, the Supreme Court reiterated an employer is given a wide latitude of discretion
in managing its own affairs. The broad discretion includes the implementation of company rules
and regulations and the imposition of disciplinary measures on its employees. But the exercise of
a management prerogative like this is not limitless, but hemmed in by good faith and a due
consideration of the rights of the worker.

Eats-Cetera Food Services Outlet v. Letran, G.R. No. 179507, October 2, 2009

Facts:
Espadero had been employed by Eats-cetera Food Services Outlet since June 30, 2001 as cashier.
When she reported for duty, Espadero discovered that her time card was already punched in.
After asking around, she found out that a certain Joselito Cahayagan was the one who punched in
her time card. Espadero, however, failed to report the incident to her supervisor, Clarissa Reduca
(Reduca), who reported the incident to the personnel manager, Greta dela Hostria. Espadero
contended that she was dismissed outright without being given ample opportunity to explain her
side. She claimed that on November 21, 2002, petitioners called her and asked her to make a
letter of admission as a condition for her reemployment. After writing a letter [of apology about
not being able to report the incident immediately], Espadero was told to wait for an assignment.
The following day, on November 22, 2002, the company issued a Memorandum terminating her
for violation of Rule 24 of the company rules and regulations. Because of this, Espadero decided
to file a complaint for illegal dismissal before the NLRC.
Petitioners maintained that the company rules and regulations, as well as the corresponding
penalties in case of violation thereof, were made known to Espadero before and upon her actual
employment as cashier; that contrary to her claim, petitioners gave Espadero ample opportunity
to explain her side; and presented the affidavit of supervisor Reduca [containing the incident
report]; they conducted an impartial investigation of the incident and found substantial evidence
that Espadero was in cahoots with a co-worker in punching in her time card. For this reason,
petitioners decided to terminate her.
Labor Arbiter declared petitioners liable for illegally terminating Espadero. Upon appeal, the
NLRC reversed the Labor Arbiters findings. Aggrieved, respondents filed a petition for certiorari
before the CA, who rendered a ruling affirming the Labor Arbiters pronouncement that Espadero
was not afforded due process. The appellate court also observed that the punishment of
dismissal was too harsh and unjustified.
Issues:
whether Espadero was afforded her right to due process prior to being dismissed from her job;
whether Espaderos infraction was serious enough to warrant the penalty of dismissal.
Ruling:
Article 282 of the Labor Code includes serious misconduct, fraud and willful breach of trust
among the just causes for termination. But prior to termination on such grounds, the employer
must satisfy both substantive and procedural due process. Not only must the employee be
afforded a reasonable opportunity to be heard and to submit any evidence he may have in
support of his defense, but the dismissal must be for a just or authorized cause as provided by
law.

THE PROCEDURAL REQUIREMENTS are set forth in

Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code, to wit:

SEC. 2. Security of Tenure. x x x. 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:
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.
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.
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.
Petitioners complied with the second notice requirement. Greta dela Hostria, as personnel
manager, issued a Memorandum stating with clarity the reason for Espaderos dismissal.
SUBSTANTIVELY, we also sustain petitioners reasoning that Espaderos position as a cashier - is
one that requires a high degree of trust and confidence, and that her infraction reasonably taints
such trust and confidence reposed upon her by her employer.
A POSITION OF TRUST AND CONFIDENCE - has been defined as one where a person is entrusted
with confidence on delicate matters, or with the custody, handling, or care and protection of the
employers property and/or funds.
One such position is that of a cashier. A cashier is a highly sensitive position which requires
absolute trust and honesty on the part of the employee. It is for this reason that the Court has
sustained the dismissal of cashiers who have been found to have breached the trust and
confidence of their employers.
In one case, the Court upheld the validity of the dismissal of a school cashier despite her 19
years of service after evidence showed that there was a discrepancy in the amount she was
entrusted to deposit with a bank.
In Metro Drug Corporation v. National Labor Relations Commission, we explained:
LOSS OF CONFIDENCE - as a ground for dismissal does not entail proof beyond reasonable
doubt of the employees misconduct. It is enough that there be some basis for such loss of
confidence or that the employer has reasonable grounds to believe, if not to entertain the moral
conviction[,]
that the employee concerned is responsible for the misconduct and that the nature of his
participation therein rendered him absolutely unworthy of the trust and confidence demanded by
his position.
The rule, therefore, is that - if there is sufficient evidence to show that the employee occupying
- a position of trust and confidence - is guilty of a breach of trust, or that his employer - has
ample reason to distrust him, the labor tribunal cannot justly deny the employer - the authority
to dismiss such employee.
In the instant case, petitioners cannot be faulted for losing their trust in Espadero.

As an employee occupying a job - which requires utmost fidelity to her employers, she failed to
report to her immediate supervisor - the tampering of her time card. Whether her failure was
deliberate - or due to sheer negligence, and whether Espadero was or was not - in cahoots with a
co-worker, the fact remains that - the tampering was not promptly reported and could, very
likely, not have been known by petitioners, or, at least, could have been discovered at a much
later period, if it had not been reported by Espaderos supervisor - to the personnel manager.
Petitioners, therefore, cannot be blamed for losing their trust in Espadero.
Moreover, the peculiar nature of Espaderos position aggravates her misconduct.
MISCONDUCT has been defined as improper or wrong conduct;
the transgression of some established or definite rule of action, a forbidden act, a dereliction of
duty,
willful in character, and implies wrongful intent and not mere error in judgment.
The misconduct, to be serious, must be of such a grave character
and not merely trivial or unimportant.
To constitute just cause for termination, it must be in connection with the employees work.
With the degree of trust expected of Espadero, such infraction can hardly be classified as one
that is trivial or unimportant. Her failure to promptly report the incident reflects a cavalier regard
for the responsibility required of her in the discharge of the duties of her position.

G.R. No. 198620, November 12, 2014

P.J. LHUILLIER, INC. AND MARIO RAMON LUDEA, Petitioners, v. FLORDELIZ VELAYO,
Respondent.
The Facts

The essential antecedent facts are summarized in the assailed CA decision, to

wit:chanroblesvirtuallawlibrary
On June 13, 2003, (herein petitioner) PJ (CEBU) LHUILLIER, INC. (PJ LHUILLIER for brevity) hired
FLORDELIZ M. ABATAYO [sic] as Accounting Clerk at the LH-4, Cagayan de Oro City Branch with a
basic monthly salary of P9,353.00. On February 9, 2008 appellant (herein private respondent)
was served with a Show Cause Memo by MARIO RAMON LUDENA, Area Operations Manager of PJ
Lhuillier (herein petitioner), ordering her to explain within 48 hours why no disciplinary action
should be taken against her for dishonesty, misappropriation, theft or embezz[le]ment of
company funds in violation of Item 11, Rule V of the Company Code of Conduct. Thereafter, (s)he
was placed under preventive suspension from February 9 to March 8, 2008 while her case was
under investigation.
The charges against the appellant (herein private respondent) were based on the Audit Findings
conducted on October 29, 2007, where the overage amount of P540.00 was not reported
immediately to the supervisor, not recorded at the end of that day.
On February 11, 2008, complainant (herein private respondent) submitted her reply and
admitted that she was not able to report the overage to the supervisor since the latter was on
leave on that day and that she was still tracing the overage; and that the omission or failure to
report immediately the overage (sic) was just a simple mistake without intent to defraud her
employer.
On March 10, 2008, after the conduct of a formal investigation and after finding complainant's
(herein private respondent's) [explanations] without merit, PJ LHUILLIER (herein petitioner)
terminated her employment as per Notice of Termination on grounds of serious misconduct and
breach of trust.4 (Citation omitted)
On March 14, 2008, the respondent filed a complaint for illegal dismissal, separation pay and
other damages against RJ. Lhuillier, Inc. (PJLI) and Mario Ramon Ludena, Area Operations
Manager (petitioners). On July 23, 2008, the Labor Arbiter (LA) rendered judgment, the
dispositive portion of which reads as follows:chanroblesvirtuallawlibrary
WHEREFORE, in view of all the foregoing, judgment is hereby entered ordering the dismissal of
the instant complaint for lack of merit.
SO ORDERED.5chanrobleslaw
The LA found that the respondent's termination was valid and based not on a mere act of simple
negligence in the performance of her duties as cashier:chanroblesvirtuallawlibrary
This is not a case of simple negligence as the facts show that complainant, instead of reporting
the matter immediately, had set aside the P540.00 for her personal use instead of reporting the
overage or recording it in the operating system of the company.
Complainant is not entitled to moral as well as exemplary damages for lack of
basis.6chanrobleslaw
On appeal, the NLRC in its Decision dated March 19, 2009 countermanded the LA, holding that
the respondent was illegally dismissed since the petitioners failed to prove a just cause of serious
misconduct and willful breach of trust:chanroblesvirtuallawlibrary
In fine, the Labor Arbiter a quo utterly disregarded the rule on proportionality that has been
observed in a number of cases, that is, "the penalty imposed should be commensurate to the
gravity of his offense." x x x

xxxx
In the instant case, PJ LHUILLIER was not able to discharge the burden of proving that the
dismissal of the complainant was for valid or just causes of serious misconduct and willful breach
of trust. Thus, We disagree with the Labor Arbiter's findings and conclusion that complainant was
validly dismissed from service.
xxxx
... Significantly, the complainant's omission or procedural lapse did not cause any loss or damage
to the company.7chanrobleslaw
Nonetheless, finding that the relations between the petitioners and the respondent have become
strained, the NLRC did not order the reinstatement of the respondent.
Thus:chanroblesvirtuallawlibrary
WHEREFORE, the instant appeal is GRANTED. The assailed decision is hereby SET ASIDE and
REVERSED, and a new one entered declaring that complainant was ILLEGALLY DISMISSED.
Accordingly, respondent PJ (CEBU) LHUILLIER, INC. is hereby
ORDERED:chanroblesvirtuallawlibrary
(a) to pay complainant separation pay equivalent to one (1) month salary for every year of
service, a fraction of at least six (6) months being considered as one (1) whole year in lieu of
reinstatement due to strained relationship, computed from June 13, 2003 up to the finality of the
promulgation of this judgment;cralawlawlibrary
(b) to pay complainant FULL BACKWAGES in accordance with Bustamante vs. NLRC ruling (265
SCRA 061); and
(c) to pay ten percent (10%) of the total money award as attorney's fees.
SO ORDERED.8chanrobleslaw
The NLRC subsequently denied the petitioners' motion for reconsideration thereof. On July 31,
2009, the petitioners filed a petition for certiorari in the CA with prayer for issuance of a
temporary restraining order (TRO) and/or writ of preliminary injunction, invoking the following
issues:chanroblesvirtuallawlibrary
I
WHETHER OR NOT THE RESPONDENT [NLRC] COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION WHEN IT DEVIATED FROM THE FINDINGS
OF FACTS OF THE HONORABLE LABOR ARBITER.ChanRoblesVirtualawlibrary
II
WHETHER OR NOT PETITIONERS ARE ENTITLED TO THE ISSUANCE OF A TEMPORARY
RESTRAINING ORDER AND/OR WRIT OF PRELIMINARY INJUNCTION PENDING THE RESOLUTION OF
THE INSTANT PETITION.9chanrobleslaw
The respondent filed her comment on August 19, 2009. On October 8, 2009, the petitioners filed
an urgent motion to resolve their petition for certiorari and prayer for TRO and/or writ of
preliminary injunction. On November 9, 2009, the CA denied the petitioners' prayer for TRO
stating that they have not shown that they stood to suffer grave and irreparable injury if the TRO
was denied. The remaining issue in the CA, then, was whether the NLRC acted with grave abuse

of discretion amounting to lack or excess of jurisdiction when it set aside the factual conclusion
and ruling of the LA. The CA ruled in the negative:chanroblesvirtuallawlibrary
We concur with the NLRC in finding for private respondent. Time and again, the Supreme Court
has held that it is cruel and unjust to impose the drastic penalty of dismissal if not
commensurate to the gravity of the misdeed.
In employee termination disputes, the employer bears the burden of proving that the employee's
dismissal was for just and valid cause. In the instant case, the evidence does not support the
finding of the Labor Arbiter that private respondent is guilty of serious misconduct.
In this jurisdiction, the Supreme Court has consistently defined misconduct as an improper or
wrong conduct, a transgression of some established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, implies wrongful intent and not mere error of judgment. To
be a just cause for termination under Article 282 of the Labor Code of the Philippines, the
misconduct must be serious, that is, it must be of such grave and aggravated character and not
merely trivial or unimportant. However serious, such misconduct must nevertheless be in
connection with the employee's work; the act complained of must be related to the performance
of the employee's duties showing him to be unfit to continue working for the employer.
Private respondent's lapse was not a "serious" one, let alone indicative of serious misconduct. In
fact, she (herein private respondent) admitted that she was not able to report the overage to the
supervisor since the latter was on leave on that day and that she was still tracing the overage;
and that the omission or failure to report immediately the overage was just a simple mistake
without intent to defraud her employer. As found by the NLRC, private respondent worked for
petitioner for almost six (6) years, and it is not shown that she committed any infraction of
company rules during her employment. In fact, private respondent was once awarded by
petitioner due to her heroic act of defending her Manager, Ms. Lilibeth Cortez, while resisting a
hold-upper.
The settled rule is that when supported by substantial evidence, factual findings made by quasijudicial and administrative bodies are accorded great respect and even finality by the courts.
These findings are not infallible, though; when there is a showing that they were arrived at
arbitrarily or in disregard of the evidence on record, they may be examined by the courts. Hence,
when factual findings of the Labor Arbiter and the NLRC are contrary to each other, there is a
necessity to review the records to determine which conclusions are more conformable to the
evidentiary facts. The case before Us shows that the finding of the NLRC is supported by
substantive evidence as compared to the finding of the Labor Arbiter with respect to the issue of
illegal dismissal. Moreover, in case of doubt, such cases should be resolved in favor of labor,
pursuant to the social justice policy of labor laws and the Constitution.
Finally, it is a time-honored principle that although it is the prerogative of management to
employ the services of a person and likewise to discharge him, such is not without limitations
and restrictions. The dismissal of an employee must be done with just cause and without abuse
of discretion. It must not be done in an arbitrary and despotic manner. To hold otherwise would
render nugatory the security of tenure clause enshrined in the Constitution.10 (Citations omitted
and emphasis ours)
Invoking Article 27911 of the Labor Code, the CA agreed with the NLRC that the respondent
should have been reinstated without loss of seniority rights and other privileges, with payment of
her full backwages, inclusive of allowances and other benefits or their monetary equivalent
computed from the time her compensation was withheld up to the time of actual reinstatement.
However, with the parties' relations now strained, the CA conceded that the payment of a
separation pay, along with backwages as a separate and distinct relief, is an acceptable
alternative to reinstatement. The CA further awarded the respondent attorney's fees since she

was forced to litigate and incur expenses to protect her rights and interests by reason of the
unjustified acts of the petitioners.ChanRoblesVirtualawlibrary
Petition for Review in the Supreme Court
In this petition, the petitioners raise the following issues:chanroblesvirtuallawlibrary
WHETHER OR NOT THE MISAPPROPRIATION BY A PAWNSHOP PERSONNEL IN THE AMOUNT OF
[P]540.00, COUPLED WITH SUBSEQUENT DENIALS, AMOUNT TO A SERIOUS MISCONDUCT IN
OFFICE?
WHETHER OR NOT THE IMPOSITION OF THE PENALTY OF TERMINATION FROM OFFICE [UPON] A
PAWNSHOP PERSONNEL WHO MISAPPROPRIATED AN AMOUNT OF P540.00 FROM THE COFFERS
OF THE PAWNSHOP, AND WHO MADE SUBSEQUENT DENIALS, IS CRUEL AND UNJUST?12
The appellate court agreed with the NLRC that the respondent's lapse was "just a simple mistake
without intent to defraud her employer;"13 that the incident was neither serious nor indicative of
serious misconduct; and that her dismissal was disproportionate to her offense. It accepted the
respondent's explanation that her failure to report her cash overage of P540.00 on October 29,
2007 to the branch manager, who was her immediate superior, was because the latter was then
on leave, and that for days thereafter, she was hard-pressed in trying to trace and determine the
cause thereof. The CA noted that the respondent had worked for PJLI for almost six years without
any previous infractions of company rules, and that she was once commended for a heroic act of
defending her former branch manager, Ms. Lilibeth Cortez, during a branch holdup.
On the other hand, the petitioners strongly maintain that under Rule V(A)(11) of its Code of
Conduct on "Dishonesty, Misappropriation, Theft or Embezzlement of Company Funds or
Property," the respondent committed a "First Level Offense" which is punishable by outright
dismissal. According to the petitioners, the respondent committed the following acts which
constitute dishonesty and serious misconduct:chanroblesvirtuallawlibrary
The respondent did not enter the discovered cash overage in the "operating system"
(computerized cash ledger) of the branch on October 29, 2007 notwithstanding that she was fully
aware of the company's policy that such unexplained receipt should be recorded at the end of
the business day;cralawlawlibrary
The respondent did not report the cash overage to her immediate superior, Branch Manager
Violette Grace Tuling (Tuling), upon the latter's return from a leave of absence on November 3,
2007. Neither did the respondent seek Tuling's help concerning the matter, and just averred that
she was afraid to be scolded by Tuling;cralawlawlibrary
The respondent deliberately lied about her cash overage after Tuling confronted her on
December 17, 2007;cralawlawlibrary
Again, the respondent falsely denied the cash overage when the company auditor asked her to
explain how it happened; and
The respondent concocted a cover-up by claiming that a computer glitch occurred when she was
about to post the cash overage in the operating system.14
Ruling of the Court
There is merit in the petition.
It need not be stressed that the nature or extent of the penalty imposed on an erring employee
must be commensurate to the gravity of the offense as weighed against the degree of

responsibility and trust expected of the employee's position. On the other hand, the respondent
is not just charged with a misdeed, but with loss of trust and confidence under Article 282(c) of
the Labor Code, a cause premised on the fact that the employee holds a position whose
functions may only be performed by someone who enjoys the trust and confidence of
management. Needless to say, such an employee bears a greater burden of trustworthiness than
ordinary workers, and the betrayal of the trust reposed is the essence of the loss of trust and
confidence which is a ground for the employee's dismissal.15
The respondent's misconduct must
be viewed in light of the strictly fiduciary
nature of her position.
In addition to its pawnshop operations, the PJLI offers its "Pera Padala" cash remittance service
whereby, for a fee or "sending charge," a customer may remit money to a consignee through its
network of pawnshop branches all over the country. On October 29, 2007, a customer sent
P500.00 through its branch in Capistrano, Cagayan de Oro City, and paid a remittance fee of
P40.00. Inexplicably, however, no corresponding entry was made to recognize the cash receipt of
P540.00 in the computerized accounting system (operating system) of the PJLI. The respondent
claimed that she tried very hard but could not trace the source of her unexplained cash surplus
of P540.00, but a branch audit conducted sometime in December 2007 showed that it came from
a "Pera Padala" customer.
To be sure, no significant financial injury was sustained by the PJLI in the loss of a mere P540.00
in cash, which, according to the respondent she sincerely wanted to account for except that she
was pre-empted by fear of what her branch manager might do once she learned of it. But in
treating the respondent's misconduct as a simple negligence or a simple mistake, both the CA
and the NLRC grossly failed to consider that she held a position of utmost trust and confidence in
the company.
There are two classes of corporate positions of trust: on the one hand are the managerial
employees whose primary duty consists of the management of the establishment in which they
are employed or of a department or a subdivision thereof, and other officers or members of the
managerial staff; on the other hand are the fiduciary rank-and-file employees, such as cashiers,
auditors, property custodians, or those who, in the normal exercise of their functions, regularly
handle significant amounts of money or property. These employees, though rank-and-file, are
routinely charged with the care and custody of the employer's money or property, and are thus
classified as occupying positions of trust and confidence.16
The respondent was first hired by the petitioners as an accounting clerk on June 13, 2003, for
which she received a basic monthly salary of P9,353.00. On October 29, 2007, the date of the
subject incident, she performed the function of vault custodian and cashier in the petitioners'
Branch 4 pawnshop in Capistrano, Cagayan de Oro City. In addition to her custodial duties, it was
the respondent who electronically posted the day's transactions in the books of accounts of the
branch, a function that is essentially separate from that of cashier or custodian. It is plain to see
then that when both functions are assigned to one person to perform, a very risky situation of
conflicting interests is created whereby the cashier can purloin the money in her custody and
effectively cover her tracks, at least temporarily, by simply not recording in the books the cash
receipt she misappropriated. This is commonly referred to as lapping of accounts.17 Only a most
trusted clerk would be allowed to perform the two functions, and the respondent enjoyed this
trust.
The series of willful misconduct
committed by the respondent in
mishandling the unaccounted cash
receipt exposes her as unworthy
of the utmost trust inherent in her

position as branch cashier and vault

custodian and bookkeeper.
The respondent insists that she never intended to appropriate the money but was afraid that
Tuling would scold her, and that she kept the money for a long time in her drawer and only
decided to take it home after her search for the cause of the cash overage had proved futile.
Both the CA and the NLRC agreed with her, and held that what she committed was a simple
mistake or simple negligence.
The Court disagrees.
Granting arguendo that for some reason not due to her fault, the respondent could not trace the
source of the cash surplus, she nonetheless well knew and understood the company's policy that
unexplained cash must be treated as miscellaneous income under the account "Other Income,"
and that the same must be so recognized and recorded at the end of the day in the branch books
or "operating system." No such entry was made by the respondent, resulting in unrecorded cash
in her possession of P540.00, which the company learned about only two months thereafter
through a branch audit.
Significantly, when Tuling returned on November 3, 2007 from her leave of absence, the
respondent did not just withhold from her the fact that she had an unaccounted overage, but she
refused to seek her help on what to do about it, despite having had five days to mull over the
matter until Tuling's return.
In order that an employer may invoke loss of trust and confidence in terminating an employee
under Article 282(c) of the Labor Code, certain requirements must be complied with, namely: (1)
the employee must be holding a position of trust and confidence; and (2) there must be an act
that would justify the loss of trust and confidence.18 While loss of trust and confidence should be
genuine, it does not require proof beyond reasonable doubt,19 it being sufficient that there is
some basis to believe that the employee concerned is responsible for the misconduct and that
the nature of the employee's participation therein rendered him unworthy of trust and confidence
demanded by his position.20
The petitioners are fully justified in claiming loss of trust and confidence in the respondent. While
it is natural and understandable that the respondent should feel apprehensive about Tuling's
reaction concerning her cash overage, considering that it was their first time to be working
together in the same branch, we must keep in mind that the unaccounted cash can only be
imputed to the respondent's own negligence in failing to keep track of the transaction from which
the money came. A subsequent branch audit revealed that it came from a "Pera Padala"
remittance, implying that although the amount had been duly remitted to the consignee, the
sending branch failed to record the payment received from the consigning customer. For days
following the overage, the respondent tried but failed to reconcile her records, and for this inept
handling of a "Pera Padala" remittance, she already deserved to be sanctioned.
Further, as a matter of strict company policy, unexplained cash is recognized at the end of the
day as miscellaneous income. Inexplicably, despite being with the company for four years as
accounting clerk and cashier, the respondent failed to make the required entry in the branch
operating system recognizing miscellaneous income. Such an entry could have been easily
reversed once it became clear how the overage came about. But the respondent obviously
thought that by skipping the entry, she could keep Tuling from learning about the overage. Her
trustworthiness as branch cashier and bookkeeper has been irreparably tarnished. The
respondent's untrustworthiness is further demonstrated when she began to concoct lies
concerning the overage: first, by denying its existence to Tuling and again to the company
auditor; later, when she falsely claimed that a computer glitch or malfunction had prevented her
from posting the amount on October 29, 2007; and finally, when she was forced to admit before
the company's investigating panel that she took and spent the money.[21

Mere substantial evidence is

sufficient to establish loss of trust
and confidence
The respondent's actuations were willful and deliberate. A cashier who, through carelessness,
lost a document evidencing a cash receipt, and then wilfully chose not to record the excess cash
as miscellaneous income and instead took it home and spent it on herself, and later repeatedly
denied or concealed the cash overage when confronted, deserves to be dismissed.
Article 28222 of the Labor Code allows an employer to dismiss an employee for willful breach of
trust or loss of confidence. It has been held that a special and unique employment relationship
exists between a corporation and its cashier. Truly, more than most key positions, that of a
cashier calls for utmost trust and confidence,23 and it is the breach of this trust that results in an
employer's loss of confidence in the employee.24 In San Miguel Corporation v. NLRC, et
al.,25cralawred the Court held:chanroblesvirtuallawlibrary
As a rule this Court leans over backwards to help workers and employees continue in their
employment. We have mitigated penalties imposed by management on erring employees and
ordered employers to reinstate workers who have been punished enough through suspension.
However, breach of trust and confidence and acts of dishonesty and infidelity inthe handling of
funds and properties are an entirely different matter. 26 (Emphasis ours)
It has been held that in dismissing a cashier on the ground of loss of confidence, it is sufficient
that there is some basis for the same or that the employer has a reasonable ground to believe
that the employee is responsible for the misconduct, thus making him unworthy of the trust and
confidence reposed in him.27 Therefore, if there is sufficient evidence to show that the employer
has ample reason to distrust the employee, the labor tribunal cannot justly deny the employer
the authority to dismiss him.[28 Indeed, employers are allowed wider latitude in dismissing an
employee for loss of trust and confidence, as the Court held in Atlas Fertilizer Corporation v.
NLRC:[29
As a general rule, employers are allowed a wider latitude of discretion in terminating the services
of employees who perform functions which by their nature require the employer's full trust and
confidence. Mere existence of basis for believing that the employee has breached the trust of the
employer is sufficient and does not require proof beyond reasonable doubt. Thus, when an
employee has been guilty of breach of trust or his employer has ample reason to distrust him, a
labor tribunal cannot deny the employer the authority to dismiss him. x x x.30 (Citations omitted)
Furthermore, it must also be stressed that only substantial evidence is required in order to
support a finding that an employer's trust and confidence accorded to its employee had been
breached. As explained in Lopez v. Alturas Group of Companies:[31
[T]he language of Article 282(c) of the Labor Code states that the loss of trust and confidence
must be based on willful breach of the trust reposed in the employee by his employer. Such
breach is willful if it is done intentionally, knowingly, and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Moreover, it
must be based on substantial evidence and not on the employer's whims or caprices or
suspicions otherwise, the employee would eternally remain at the mercy of the employer. 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. And, in order to constitute a just cause for dismissal,
the act complained of must be work-related and shows that the employee concerned is unfit to
continue working for the employer. In addition, loss of confidence as a just cause for termination
of employment is premised on the fact that the employee concerned holds a position of
responsibility, trust and confidence or that the employee concerned is entrusted with confidence
with respect to delicate matters, such as the handling or care and protection of the property and

assets of the employer. The betrayal of this trust is the essence of the offense for which an
employee is penalized.32 (Emphasis and underscoring in the original)
In holding a position requiring full trust and confidence, the respondent gave up some of the rigid
guarantees available to ordinary employees. She insisted that her misconduct was just an
"innocent mistake," and maybe it was, had it been committed by other employees. But surely not
as to the respondent who precisely because of the special trust and confidence given her by her
employer must be penalized with a more severe sanction.33
A cashier's inability to safeguard
and account for missing cash is sufficient
cause to dismiss her.
The respondent insisted that she never intended to misappropriate the missing fund, but in
Santos v. San Miguel Corp.,34 the Court held that misappropriation of company funds,
notwithstanding that the shortage has been restituted, is a valid ground to terminate the
services of an employee for loss of trust and confidence.35 Also, in Caeda v. Philippine Airlines,
Inc. ,36 the Court held that it is immaterial what the respondent's intent was concerning the
missing fund, for the undisputed fact is that cash which she held in trust for the company was
missing in her custody. At the very least, she was negligent and failed to meet the degree of care
and fidelity demanded of her as cashier. Her excuses and failure to give a satisfactory
explanation for the missing cash only gave the petitioners sufficient reason to lose confidence in
her.37 As it was held in Metro Drug Corporation v. NLRC:38
It would be most unfair to require an employer to continue employing as its cashier a person
whom it reasonably believes is no longer capable of giving full and wholehearted trustworthiness
in the stewardship of company funds.39chanrobleslaw
WHEREFORE, premises considered, the petition is hereby GRANTED. The Decision dated June 30,
2011 of the Court of Appeals in CA-G.R. SP No. 03069 is REVERSED and SET ASIDE. The Decision
of the Labor Arbiter dated July 23, 2008 is REINSTATED.
SO ORDERED.

G.R. No. 157633, September 10, 2014

NORTHWEST AIRLINES, INC., Petitioner, v. MA. CONCEPCION M. DEL ROSARIO,
Respondent.
BERSAMIN, J.:
Under review is the decision promulgated on June 21, 2002,1 whereby the Court of Appeals (CA)
dismissed the petition for certiorari filed by Northwest Airlines, Inc. to assail on the ground of
grave abuse of discretion amounting to lack or excess of jurisdiction the adverse decision of the
National Labor Relations Commission (NLRC).
Antecedents
Petitioner Northwest Airlines, Inc. employed respondent Ma. Concepcion M. Del Rosario on
December 10, 1994 as one of its Manila-based flight attendants. On May 18, 1998, Del Rosario

was assigned at the Business Class Section of Northwest Flight NW 26 bound for Japan. During
the boarding preparations, Kathleen Gamboa, another flight attendant assigned at the First Class
Section of Flight NW 26, needed to borrow a wine bottle opener from her fellow attendants
because her wine bottle opener was dull. Vivien Francisco, Gamboas runner, went to the
Business Class Section to borrow a wine bottle opener from Del Rosario, but the latter remarked
that any flight attendant who could not bring a wine bottle opener had no business working in
the First Class Section. Upon hearing this, Aliza Ann Escao, another flight attendant, offered her
wine bottle opener to Francisco. Apparently, Gamboa overheard Del Rosarios remarks, and later
on verbally confronted her. Their confrontation escalated into a heated argument. Escao
intervened but the two ignored her, prompting her to rush outside the aircraft to get Maria
Rosario D. Morales, the Assistant Base Manager, to pacify them.
The parties differed on what happened thereafter. Del Rosario claimed that only an animated
discussion had transpired between her and Gamboa, but Morales insisted that it was more than
an animated discussion, recalling that Del Rosario had even challenged Gamboa to a brawl
(sabunutan). Morales asserted that she had tried to pacify Del Rosario and Gamboa, but the two
did not stop; that because the two were still arguing although the Business Class passengers
were already boarding, she ordered them out of the plane and transfer to another nearby
Northwest aircraft; that she inquired from them about what had happened, and even asked if
they were willing to fly on the condition that they would have to stay away from each other
during the entire flight; that because Del Rosario was not willing to commit herself to do so, she
decided not to allow both of them on Flight NW 26, and furnished them a Notice of Removal from
Service (effectively informing Del Rosario of her dismissal from the service pending an
investigation of the fighting incident between her and Gamboa).
On May 19, 1998, Morales sent a letter to Del Rosario telling her that Northwest would conduct
an investigation of the incident involving her and Gamboa. The investigation was held on May 28,
1998 before Atty. Ceazar Veneracion III, Northwests Legal Counsel and Head of its Human
Resources Department. All the parties attended the investigation
On June 19, 1998, Del Rosario was informed of her termination from the service. Northwest
stated that based on the results of the investigation, Del Rosario and Gamboa had engaged in a
fight on board the aircraft, even if there had been no actual physical contact between them; and
that because fighting was strictly prohibited by Northwest to the point that fighting could entail
dismissal from the service even if committed for the first time, Northwest considered her
dismissal from the service justified and in accordance with the Rules of Conduct for Employees,
as follows:chanRoblesvirtualLawlibrary
Section 1, General
x x x. Rule infractions will be dealt with according to the seriousness of the offense and violators
will be subjected to appropriate disciplinary action up to and including discharge. Some acts of
misconduct, even if committed for the first time, are so serious that, standing alone, they justify
immediate discharge. Some examples of these offenses are violations of rules regarding theft,
alcohol and drugs, insubordination, dishonesty, fighting, falsification of records, sleeping on the
job, failure to cooperate or lying in a Company investigation, intentional destruction or abuse of
property, threatening, intimidating or interfering with other employees, abuse of nonrevenue and
reduced rate travel privileges and unauthorized use of Company communications systems.
xxxx
Section 24 (c), Disturbing Others, which states that:
Harassing, threatening, intimidating, assaulting, fighting or provoking a fight or similar
interference with other employees at any time, on or off duty is prohibited. (Italics supplied)

Del Rosario subsequently filed her complaint for illegal dismissal against
Northwest.2cralawlawlibrary
Decision of the Labor Arbiter
In her decision dated January 18, 1999,3 Labor Arbiter Teresita D. Castillon-Lora ruled in favor of
Northwest, holding that the dismissal of Del Rosario had been justified and valid upon taking into
account that Northwest had been engaged in the airline business in which a good public image
had been demanded, and in which flight attendants had been expected to maintain an image of
sweetness and amiability; that fighting among its employees even in the form of heated
arguments or discussions were very contradictory to that expected image;4 and that it could
validly dismiss its employees like the respondent because it had been entitled to protect its
business interests by putting up an impeccable image to the public.
Ruling of the NLRC
Upon appeal, the NLRC reversed the decision of the Labor Arbiter, and ruled in favor of Del
Rosario, declaring that the incident between her and Gamboa could not be considered as
synonymous with fighting as the activity prohibited by Northwests Rules of Conduct; that based
on Blacks Law Dictionary, fight referred to a hostile encounter, affray, or altercation; a physical
or verbal struggle for victory, pugilistic combat; that according to Bouviers Law Dictionary,
fighting did not necessarily imply that both parties should exchange blows, for it was sufficient
that they voluntarily put their bodies in position with that intent;5 and that the incident between
Del Rosario and Gamboa could not be held similar to the fight that Northwest penalized under its
Rules of Conduct.
The NLRC further ratiocinated as follows:chanRoblesvirtualLawlibrary
Evident in the definition of fighting is the existence of an underlying hostility between the parties
which is so intense that there is an imminent danger of a physical conflict (if there is none yet).
In other words, when we say two people are fighting, at the very least, they should project a
general appearance of wanting to physically strike each other. Was this the image that appellant
and FA Gamboa projected when they were facing each other during the incident of May 18,
1998[?] We do not think so.
x x x Almost unanimously, the witnesses of NWA refer to the incident as arguing or a serious
or animated discussion. An argument is an effort to establish belief by a course of reasoning
(Bouvier's Law Dictionary). In ordinary parlance, arguing is merely talking or debating about a
certain issue. There are no underpinnings of animosity in the discussion nor (sic) between the
parties. These witnesses never saw any hostility between the appellant and FA Gamboa. Neither
did they see these two ladies wanting to strike each other. What they saw were two FAs engaged
in an animated verbal exchange, arguing but not fighting.6chanrobleslaw
The NLRC ordered the reinstatement of Del Rosario to her former position without loss of
seniority rights and with payment of backwages, per diems, other lost income and benefits from
June 19, 1998; as well as the payment of attorneys fees equivalent to 10% of the monetary
award.
Decision of the CA
Aggrieved, Northwest elevated the adverse decision of the NLRC to the CA on certiorari, averring
that the NLRC thereby committed grave abuse of discretion in reversing the decision of the Labor
Arbiter, and submitting that Del Rosarios dismissal from the service had been for a just cause,
with the evidence presented against her being more than sufficient to substantiate its position
that there had really been a fight between her and Gamboa; and that the NLRC likewise gravely

abused its discretion in ordering the reinstatement of Del Rosario and the payment of her
backwages and attorneys fees.
As stated, the CA sustained the NLRC through its decision promulgated on June 21, 2002,
observing that Northwest did not discharge its burden to prove not merely reversible error but
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the NLRC; and
that, indeed, the NLRC had correctly held that Del Rosarios conduct did not constitute serious
misconduct, because the NLRC, in determining the usual, ordinary and commonly understood
meaning of the word fighting, had resorted to authoritative lexicons that supported its conclusion
that the exchange of words between Del Rosario and Gamboa did not come within the definition
of the word fighting. 7cralawlawlibrary
The CA disposed thusly:chanRoblesvirtualLawlibrary
WHEREFORE, for lack of merit, the instant petition is DISMISSED. Accordingly, the decision of the
NLRC dated January 11, 2000, is hereby AFFIRMED with the MODIFICATION that in lieu of
reinstatement, petitioner is ordered to pay private respondent separation pay equivalent to one
month's salary for every year of service plus full backwages without deduction or qualification,
counted from the date of dismissal until finality of this decision including other benefits to which
she is entitled under the law. Petitioner is likewise ordered to pay respondent Del Rosario
attorneys fees consisting of five (5%) per cent of the adjudged relief.
SO ORDERED. 8
Issues
The issues are the following, namely: (1) Was Del Rosarios dismissal from the service valid?; and
(2) Were the monetary awards appropriate?
Ruling
The Court AFFIRMS the decision of the CA.
As provided in Article 282 of the Labor Code, an employer may terminate an employee for a just
cause, to wit:chanRoblesvirtualLawlibrary
Art. 282. TERMINATION BY EMPLOYER
An employer may terminate an employee for any of the following
causes:chanRoblesvirtualLawlibrary
(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.
Northwest argues that Del Rosario was dismissed on the grounds of serious misconduct and
willful disobedience. Misconduct refers to the improper or wrong conduct that transgresses some

established and definite rule of action, a forbidden act, a dereliction of duty, willful in character,
and implies wrongful intent and not mere error in judgment. But misconduct or improper
behavior, to be a just cause for termination of employment, must: (a) be serious; (b) relate to the
performance of the employees duties; and (c) show that the employee has become unfit to
continue working for the employer.9cralawlawlibrary
There is no doubt that the last two elements of misconduct were present in the case of Del
Rosario. The cause of her dismissal related to the performance of her duties as a flight attendant,
and she became unfit to continue working for Northwest. Remaining to be determined is,
therefore, whether the misconduct was serious as to merit Del Rosarios dismissal. In that
respect, the fight between her and Gamboa should be so serious that it entailed the termination
of her employment even if it was her first offense. Northwest insists that what transpired on May
18, 1998 between her and Gamboa was obviously a form of fight that it strictly prohibited, but
Del Rosario disputes this by contending that it was only an animated discussion between her and
Gamboa. She argues that as settled in American jurisprudence fight pertained to combat or
battle, like the hostile encounter or engagement between opposing forces, suggesting primarily
the notion of a brawl or unpremeditated encounter, or of a pugilistic combat;10 while argument
was a connected discourse based upon reason, or a course of reasoning tending and intended to
establish a position and to induce belief.11cralawlawlibrary
In several rulings where the meaning of fight was decisive, the Court has observed that the term
fight was considered to be different from the term argument. In People v. Asto,12 for instance,
the Court characterized fight as not just a merely verbal tussle but a physical combat between
two opposing parties, to wit:chanRoblesvirtualLawlibrary
Well into their second bottle of gin, at about eleven o'clock that morning, Fernando Aquino and
Peregrino had a verbal tussle. Fernando Aquino declared that he was going to run for councilor of
Alcala, Pangasinan. Peregrino countered by saying: If you will run for that post, cousin, I will
fight you. After a brief exchange of words, Fernando Aquino, laughing, went to sit beside
Abagat. As Aquino continued with his mirth, Abagat stared at Peregrino with contempt.
xxx. A few minutes later, he heard a commotion in the plantation some two hundred meters
away. He claims to have seen several people fighting each other with pieces of wood but did not
go to the field to check what was happening.13 (Italics supplied.)
Similarly, in Pilares, Sr. v. People,14fight was held to be more than just an exchange of words that
usually succeeded the provocation by either party, thus:chanRoblesvirtualLawlibrary
When the petitioner was about to hand over the bottles of beer to the private complainant, the
latter called him coward and dared him to get out for a fight. Insulted, the petitioner went out
of his store and chased the private complainant. (Italics supplied.)
Based on the foregoing, the incident involving Del Rosario and Gamboa could not be justly
considered as akin to the fight contemplated by Northwest. In the eyes of the NLRC, Del Rosario
and Gamboa were arguing but not fighting. The understanding of fight as one that required
physical combat was absent during the incident of May 18, 1998. Moreover, the claim of Morales
that Del Rosario challenged Gamboa to a brawl (sabunutan) could not be given credence by
virtue of its being self-serving in favor of Northwest, and of its being an apparent afterthought on
the part of Morales during the investigation of the incident, without Del Rosario having the
opportunity to contest Morales statement. In that context, the investigation then served only as
Northwests means to establish that the grounds of a valid dismissal based on serious
misconduct really existed.

Moreover, even assuming arguendo that the incident was the kind of fight prohibited by
Northwests Rules of Conduct, the same could not be considered as of such seriousness as to
warrant Del Rosarios dismissal from the service. The gravity of the fight, which was not more
than a verbal argument between them, was not enough to tarnish or diminish Northwests public
image.
Under the circumstances, therefore, the CA properly ruled that the NLRC did not gravely abuse
its discretion amounting to lack or excess of jurisdiction by declaring Del Rosarios dismissal
unjustified. Northwest as the petitioner for certiorari must demonstrate grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the NLRC. Grave abuse of discretion,
according to De los Santos v. Metropolitan Bank and Trust Company,15 must be grave, which
means either that the judicial or quasi-judicial power was exercised in an arbitrary or despotic
manner by reason of passion or personal hostility, or that the respondent judge, tribunal or board
evaded a positive duty, or virtually refused to perform the duty enjoined or to act in
contemplation of law, such as when such judge, tribunal or board exercising judicial or quasijudicial powers acted in a capricious or whimsical manner as to be equivalent to lack of
jurisdiction. Alas, Northwest did not show how the NLRC could have abused its discretion, let
alone gravely, in ruling adversely against it.
WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals promulgated on June 21,
2002; and ORDERS the petitioner to pay the costs of suit.
SO ORDERED.

G.R. No. 200729, September 29, 2014

TEMIC AUTOMOTIVE (PHILIPPINES), INC., Petitioner, v. RENATO M. CANTOS,
Respondent.
BRION, J.:
We resolve the present petition for review on certiorari1 which seeks the reversal of the
decision2 dated September 28, 2011 and resolution3 dated February 16, 2012 of the Court of
Appeals (CA) in CA-G.R. SP No. 117171.
The Antecedents
On March 9, 2009, respondent Renato M. Cantos (Cantos) filed a complaint for illegal dismissal
against petitioner Temic Automotive (Phils.), Inc. (Temic) based in Taguig City and its General
Manager (GM), Martin Wadewitz (Wadewitz).4 Cantos started his employment with Temic on July
16, 1993 as Special Projects Officer of the company's Materials Department. Sometime in 1998,
he was appointed Purchasing & Import-Export Manager (Purchasing Manager) of the Logistics
Department and, on December 1, 2007, he was named Warehouse & Import-Export Manager
(Wimpex Manager), the last position he held before he was allegedly dismissed illegally.
Temic is a member firm of Continental Corporation, a multinational company (with head office in
Germany), with over sixty facilities worldwide. It is engaged in vehicle safety applications,
comfort and powertrain, as well as in the networking of active and passive driving systems.5 In

September and December 2008, a team from the head office audited Temic's operations. The
audit team allegedly discovered several irregularities, particularly with respect to Temic's
purchasing transactions supposedly attended by "fraudulent activities."6 Some purchase orders
(POs), it was claimed, were ensured to go to some suppliers, thereby systematically avoiding a
competitive tender process. Temic believed the irregularities could only have happened with the
participation of personnel in the Purchasing and Manufacturing departments. It stressed that
initial findings indicated that Cantos, as former Purchasing Manager, "was likely involved in said
transactions."7cralawred
On December 11, 2008, Temic issued a Show Cause and Preventive Suspension Notice8 to
Cantos, requiring him to explain in writing several infractions which he allegedly committed
during his stint as Purchasing Manager. He was charged principally with having violated Temic's
procedures on purchases, particularly the Purchase Activities in System, Application, Products in
Data Processing (FV 9-F0081) and the Non-Production/Indirect Material Purchasing Procedures
(FV9-F0158).
Allegedly, Cantos failed to meet the required number of purchase quotations, in violation of
paragraph 10.6.1 of FV 9-F0158 under which purchases of all articles must conform with
Continental Temic Electronics (Phils.), Inc. (CTEPI,) Procurement Policy and that of Temic as a
general rule.9 Cantos would claim10 that from 2005 to early 2008, he was tasked to also serve
the Purchasing Department of CTEPI (without additional compensation), a sister firm of Temic
located in Calamba, Laguna and that it was in relation with his work in CTEPI that his dismissal
was chiefly based. He would also claim that the purchasing procedures are essentially the same
for CTEPI and for Temic, except that in CTEPI's case, the signature of the GM is not required for
the Process Deviation Temporary Authority (PDTA).
Under par. 10.6.1 of FV 9-F0158, before a purchase is made in Temic, quotations must be secured
based on the purchasing value as follows: (1) P1.00-P50,599.00 (1 quotation/bid); (2)
P51,000.00-P200,999.00 (min. 2 quotations/bids); and (3) P201,000-above (min. 3
quotations/bids). Cantos allegedly allowed the proliferation of deviations from the established
procedures and resorted instead to the PDTAs favoring suppliers Globaltech Automation, Inc.
(Globaltech) and Maxtronix, Inc. (Maxtronix) without a valid reason and despite the lapse of a
substantial lead time (up to three months between the date of receipt of the quotation and date
of validity of the PDTA). Under both the Temic and CTEPI purchasing procedures, the acquisition
of machines without the three quotations/bids is allowed through the PDTA.
Temic maintained that by favoring Globaltech and Maxtronix, Cantos violated the provisions of
pars. 10.6.1 and 10.6.3 of FV 9-F0158 requiring that "in general, [djecision has to be made in
favor of the accredited supplier/vendor or bidder with the lowest total cost, based on the
fulfillment of the specification," insinuating that the two suppliers were not accredited. As none
of the PDTAs was approved and signed by the GM, Cantos was also charged of deviating from the
normal protocol in the tender process (par. 10.6.3 of FV-9-F0158) which requires that the PDTA
should be signed by the department manager, senior manager, purchasing manager, controlling
manager and GM.
Additionally, Cantos was charged with the: (1) disappearance of optional items supposed to be
part of purchase orders; (2) engagement of customs brokers Airfreight 2100 and Diversified
Cargo without contracts; (3) unauthorized engagement of personnel of the two customs brokers
to work for Temic; and (4) failure to consolidate deliveries from the same point of origin, resulting
in higher costs for the company. Cantos supposedly also violated the Employee Handbook and
Code of Discipline, particularly Group II on Insubordination, No. 9 and Group III on Fraud, Acts of
Dishonesty and/or Breach of Trust, No. 14, and the Code of Conduct on Personal Ethics provisions
on "suppliers," "internal controls" and "conflict of interest."
On December 12, 2008, Cantos asked for copies of documents he considered necessary for his
reply to the show-cause notice,11 but he was given only copies of the POs. He was advised that

the other documents were "irrelevant" or "can be presented at the proper time if deemed
necessary by the company."12cralawred
Cantos submitted his explanation on December 18, 2008.13 The salient points of the submission
are as follows:14cralawred
1. There are three instances when a deviation from the three- quotation requirement is allowed
and they are: (a) when skeleton agreements or global contracts are available; (b) when
"accredited suppliers/vendors are approved;" or (c) when there is an immediate need for the
item to be purchased. The POs in question which number only twelve (12),15 out of more than
thirty thousand (30,000)16 processed during his tenure as Purchasing Manager, were all covered
by duly- accomplished PDTAs.
2. He was not to blame for the missing optional items because he handled only the purchasing
aspect of the transactions. The items were delivered to Temic's Receiving Section to determine
whether they are complete and then sent to the end-user department which determines if the
deliveries are indeed complete and, when an item is missing, informs the Purchasing Department
about it. He never received information on missing deliveries.
3. The contracts with Airfreight 2100 and Diversified Cargo were just awaiting the signatures of
the customs brokers. Said contracts were upon the initiative of Temic management who had
been dealing with the two customs brokers even before he became head of the Imports-Exports
Department.
4. The hiring of the personnel of the two customs brokers was at the behest of his superior
Rosalie Isaac (Isaac) and former Warehouse Manager Antonio Gregorio in order to respond to
Temic's need for additional manpower without incurring the costs usually entailed for regular
employees.
5. The non-consolidation of shipments coming from the same point of origin happens only when
the other shipments are under DDU or DDP terms or when the delivery charges are for the
account of the suppliers. During his tour of duty, he significantly lowered shipment costs by
reducing evening shipments, thus avoiding special customs fees for night or backdoor releases.
Temic then conducted an administrative investigation17 where Cantos appeared, together with
his counsel. Cantos believed he was able to establish his compliance with Temic's procurement
procedures during his term as Purchasing Manager and was confident he would be found
innocent of the charges against him.18 Even so, he bewailed Temic's suspicion, aired during the
investigation, that he connived with CTEPI's Raul Navarro (Navarro), Senior Manager for
Manufacturing, and Navarro's subordinate, Arnold Balita (Balita), Process Engineering &
Maintenance Manager, as well as Globaltech and Maxtronix, in favoring the two suppliers' bids.
Cantos explained that sometime in 2008, Temic's former foreign expatriate GM, Eynollah Rahideh
(GM Rahideh), was audited due to a conflict of interest incident involving the planned purchase of
a FUJI NXT machine from Japan for P30,000,000.00. The purchase was cancelled and transferred
to a European firm, FUJI-Germany, where his son worked. GM Rahideh suspected Navarro and
Balita to have given the information to the head office in Germany about the incident. Cantos
was asked by the head office for copies of documents on the planned purchase. He complied
with the request and since then he had never been in good terms with GM Rahideh.
Thereafter, according to Cantos, rumors circulated that Navarro and Balita were conniving with
Globaltech and Maxtronix for the two suppliers to corner Temic's equipment purchases, for a
commission. Then, word spread that Cantos was complicit with the alleged fraudulent act,
despite the fact that he was not close to Navarro and Balita.

In October 2008, flowers for the dead were sent to Temic's Purchasing Manager, Gemma Ignacio
(Ignacio) who had taken over Cantos' position as Purchasing Manager. Navarro and Balita were
suspected to be behind the sending of the flowers. Ignacio allegedly tried to get back at the two,
but she was pre-empted by their resignation. She thus trained her attention on Cantos whose
position as Wimpex Manager she coveted.
The new foreign expatriate GM, Wadewitz, took the cudgels for Ignacio who had assumed the
position of Wimpex Manager. Wadewitz wanted Cantos to provide the company information about
the "fraudulent activities" of Navarro and Balita, but since Cantos had no knowledge of their
activities, he could not tell Temic anything. This proved to be his undoing as he was dismissed for
charges that he claimed remained unsubstantiated.
On February 16, 2009, Temic issued a notice of termination of employment19 to Cantos, with
immediate effect, on grounds of loss of trust and confidence. It stressed that while Cantos
initially denied any wrongdoing, he eventually admitted having bypassed some purchasing
procedures and/or local controls, although allegedly due to simple oversight on his part. It added
that after a careful deliberation and based on his own admission, as well as the evidence, it had
been established that he committed the acts he was charged with.
The Compulsory Arbitration Rulings
In a decision20 dated November 27, 2009, Labor Arbiter Jaime M. Reyno (LA Reyno) dismissed
the complaint for lack of merit. LA Reyno declared that Cantos, a managerial employee, had lost
the trust and confidence of his employer for the various infractions he committed as company
Purchasing Manager.
Cantos appealed the dismissal. Through its decision21 of July 30, 2010, the National Labor
Relations Commission (NLRC) affirmed LA Reyno's ruling and dismissed the appeal. Cantos then
moved for reconsideration, but the NLRC denied the motion,22 prompting him to seek relief from
the CA by way of a petition for certiorari under Rule 65 of the Rules of Court.
The CA Proceedings
Cantos argued before the CA that the NLRC committed grave abuse of discretion in upholding his
dismissal. He maintained that he committed no act that violated the purchasing procedures of
either CTEPI or Temic since both procedures allow the acquisition of machines from a supplier
even without the three-quotations/bids requirement, through the due. accomplishment of PDTAs.
Contrary to the pronouncement of the NLRC, he never admitted violating the company rules on
purchases as there was no proof of his wrongdoing. He decried the absence of the minutes of the
investigation since only an attendance sheet was presented in evidence.23cralawred
He pointed out that his supposed admission was mentioned only in Ignacio's affidavit.24 He
disputed the probative value of the affidavit because it came from a company official who had
been hostile to him, rendering her declarations suspect; no other employee corroborated her
story and she merely "parroted" the words used in the termination-of-employment letter25
issued to him by Temic through Human Resource Manager Artemio Del Rosario (Del Rosario).
For its part, Temic argued that the NLRC correctly ruled that the complaint is devoid of merit as
Cantos patently violated the company's purchasing procedures. It maintained that he was caught
red-handed in the act and his belated presentation of separate purchasing rules for CTEPI and
Temic would not do him any good as the documents should have been presented as early as
during the administrative investigation.
It argued that Cantos cannot rely on mere unsubstantiated arguments to refute the valid and
admissible evidence it presented. It insisted that he was afforded due process before he was
dismissed.

In its decision under review, the CA granted the petition. It reversed the NLRC rulings and
declared that Cantos had been illegally dismissed. It found no valid cause for his dismissal and
he was not accorded due process. Consequently, the CA ordered Temic to pay Cantos full
backwages and separation pay (in lieu of reinstatement since it is no longer viable), moral and
exemplary damages, plus attorney's fees. However, it absolved Wadewitz from liability for
Cantos' dismissal as no malice or bad faith on his part was "sufficiently proven."26cralawred
While the CA noted that Cantos occupied a position of trust and confidence as Purchasing
Manager (so as to satisfy one of the requisites of a dismissal for breach of trust), it found that
Temic "utterly" failed to establish the requirements under the law and jurisprudence for his
dismissal on that ground. It noted that the principal charge Temic lodged against Cantos arose
from his violation of its purchasing procedures (FV 9-F0158), yet it adduced in evidence POs for
CTEPI, an entity separate and distinct from it and had a different set of purchasing procedures.
The CA stressed that nowhere in the records could evidence be found showing that Cantos
deliberately failed to secure at least three quotations (under par. 10.6.1 of FV 9-F0158) for the
supply of equipment covered by the eleven (11) POs. It upheld his position that there are
exceptions to the rule and that he relied on this excepting clause for the PDTAs in question. The
CA further pointed out that Temic failed to prove its allegation that the purchases were not from
accredited suppliers or bidders with the lowest total cost. It also faulted Temic for blaming Cantos
for not securing the GM's approval (signature) for the subject PDTAs as the GM's signature is not
required for CTEPI purchases, although it is a requirement for Temic PDTAs.
The CA disagreed with the NLRC's finding that based on the minutes of the administrative
hearing, Cantos admitted having violated company rules. The "minutes," the CA clarified, were a
mere attendance sheet.27cralawred
In sum, the CA concluded that Temic's charges against Cantos "were never substantiated by any
evidence other than the barefaced allegations in the Affidavit of Ignacio which must be taken
with a grain of salt considering that she is an employee of the company who harbored hostility
against [the] petitioner x x x."28 The CA believed that Cantos' "imputed guilt" was based on
Temic's claim that he was complicit in the "anomalous transactions of CTEPI employees Balita
and Navarro,"29 but which had never been proven.
On the due process issue, the CA found Temic to have "almost" complied with the procedural
requirements under the law30 as indicated by the following: (1) a show-cause notice to Cantos of
the charges against him; (2) conduct of an administrative investigation on said charges; and (3)
a notice of termination of his employment. Nonetheless, it still found Temic's compliance
insufficient since charges B, C, D and E in the show-cause notice were not stated with
particularity.31cralawred
The Petition
Temic seeks a reversal of the CA judgment for being contrary to law and jurisprudence. It
contends that the appellate court should have accorded respect to the labor tribunals' rulings
because they were supported by overwhelming evidence consisting of affidavits of key officers
and pertinent documents as compared with Cantos' bare assertions. It submits that Cantos
affirmed that he knew the company's purchasing procedures fully well, having co-authored the
procedures himself. It adds that when asked by the investigating committee about his acts being
violative of the company procedures, he made an admission that they were, but said that it was
merely due to oversight.
The Case for Cantos
By way of a Comment,32 Cantos asks for the petition's dismissal for lack of merit.

He argues that the CA committed no error in finding that Temic failed to afford him due process
on account of its refusal to provide him with copies of relevant documents he needed in his
defense, especially the purchasing procedures of both Temic and CTEPI which Temic dismissed as
irrelevant. Through his own efforts, however, he was able to secure a copy each of Temic's and
CTEPI's purchasing procedures and accordingly submitted copies of the documents to LA Reyno,
but the latter rejected the documents for late submission.33 Further, he insists that Temic also
failed to prove that there was a valid cause for his dismissal.
Cantos urges the Court to make Temic accountable for its refusal to furnish him copies of the
purchasing procedures because the documents are material to his defense that he did not violate
Temic's purchasing procedures. He maintains that all the PDTAs and POs for which he was
charged pertained to CTEPI, a distinct and separate corporation from Temic. He points out that
the set of procedures for Temic is pre-numbered 9;34 whereas, that for CTEPI is pre-numbered
8.35 He bewails Temic's resorting to "foul trickery" when it denied him access to the documents
he was asking, the obvious reason being the fact that under Temic's purchasing procedures (par.
10.6.3.2 of FV 9-F0158 in relation to par. 10.6.3.2.5),36 a PDTA has to be signed by the GM;
whereas, it is not a requirement under CTEPI's purchasing procedures (par. 10.6.3.1 of FV 8F0007).37cralawred
He contends that Temic was not telling the truth when it alleged that Globaltech and Maxtronix
from whom the machines covered by questioned PDTAs were purchased are not Temic accredited
suppliers, the truth being that Temic and CTEPI had long been buying machines from the two
suppliers even before he was hired by Temic. In fact, he adds, the items covered by the subject
PDTAs were repeat orders and "many earlier purchases from these companies" were made "in
the past without requiring three (3) prior bidders, and the [petitioner never raised a howl about
them."38cralawred
Cantos further contends that Temic singled him out for dismissal at all costs with respect to the
PDTAs in question, to the extent of resorting to misrepresentations, denying him access to
relevant documents and passing off generalizations as evidence in the form of affidavits of its
key officers, such as Ignacio and Del Rosario,39 to pin him down. He asserts that Temic is aware,
as it is written in the purchasing procedures of both Temic and CTEPI, that a PDTA starts from an
end-user unit of either firm. The subject PDTAs, he explains, came from the Manufacturing
Department headed by Navarro and Balita who were suspected to have received "kickbacks"
from suppliers and yet, they were allowed to retire with full benefits. He laments that he, a mere
conduit of the two, was dismissed and his benefits withheld, without proof that he profited from
the POs covered by the PDTAs.
Moreover, Cantos points out, Navarro and Balita were not the only ones who participated in the
execution of the PDTAs. He names Purchasing Officer Clave Campos (Campos), Controlling
Manager Susan Aranilla (Aranilla) and their "over-arching" officer, his superior Isaac, who all took
part in consummating the transactions covered by the subject PDTAs,. but the said employees
were never investigated, let alone charged. Neither was there evidence that Temic filed charges
against Globaltech and Maxtronix for the damage that it caused the company, as it claims,
resulting from the questioned POs.
Cantos takes exception to Temic's submission that his "sterling sixteen (16) years of service" for
the company should work against him because with such a long exemplary tenure with the
company, he should not have deliberately violated the company's purchasing procedures. He
stresses that one year after he allegedly participated in the purported anomalous purchase
transactions, Temic recognized his excellent service, evidenced by its letters of commendations
which the CA acknowledged.40cralawred
In fine, Cantos maintains that the burden of proof that his dismissal was for a just cause was
hardly, if ever, discharged by Temic.

The Court's Ruling

We deny the petition for patent lack of merit.
Like the CA, we are convinced that the NLRC committed grave abuse of discretion in upholding
Cantos' dismissal. We find no substantial evidence in the records in support of its ruling. In Ilagan
v. Court of Appeals,41 we re-echoed the principle in employee dismissals that it is the employer's
burden to prove that the dismissal was for a just or authorized cause. Temic failed to discharge
this burden of proof in Cantos' case.
First. The POs Temic offered in evidence to prove the principal charge against Cantos pertained to
its sister company CTEPI,42 most of which, except for two POs, were made in 2005 and 2006 as
listed in the show-cause notice. In the face of Cantos' submission that the two entities are
separate and distinct from each other, it is puzzling that Temic did not bother to explain why it
proceeded against Cantos based on purchase transactions entered into by CTEPI and not by
itself; it did not also explain the precise relationship between it and CTEPI with respect to the POs
in question. The reason for this, we believe, was Temic's undue haste to dismiss Cantos, such
that it did not even check on the documentary support for the charges it laid against him.
Thus, and apparently without being aware that it was referring to CTEPI's purchasing procedures,
it faulted Cantos for resorting to the PDTAs without the signature and approval of the GM. Under
Temic rules, the GM approves and signs the PDTA; it is not a requirement under CTEPI rules.
There is no basis therefore for making Cantos accountable for the absence of the GM's signature
for CTEPI's PDTAs.
Also, Temic faulted Cantos for belatedly presenting to the LA the purchasing procedures of Temic
and CTEPI to prove his point, which the labor official rejected for not having been raised during
the company investigation.43 This is rather unfortunate considering that the NLRC and the LAs
are mandated by law to "use every and all reasonable means to ascertain the facts in each case
speedily and objectively and without regard to technicalities of law or procedure; all in the
interest of due process. "44 LA Reyno overlooked the fact that Cantos requested Temic for copies
of documents which he considered vital to his defense.
Second. The foregoing notwithstanding and, as the CA declared, nowhere in the records is there
evidence that directly pointed to Cantos as having deliberately violated the company procedures
for the procurement of services and materials by allowing the proliferation of PDTAs.
We agree with the CA pronouncement. Other than the fact that Cantos was the Purchasing
Manager at the time and was a signatory to the PDTAs in question, we find no other indication of
his involvement in the execution of the subject PDTAs. More importantly, his position as
Purchasing Manager and his signature appearing on the PDTAs do not prove that the PDTAs
[eleven (11) out of thirty thousand (30,000) POs during his term as Purchasing Manager)] were
executed in violation of Temic's purchasing procedures and that he was responsible for their
execution.
Indeed, there is no evidence on record that it was Cantos who caused the execution of the
subject PDTAs or that he did it for his personal gain or in collusion with Navarro and Balita of
CTEPIs Manufacturing Department who were suspected to be involved in fraudulent purchase
transactions discovered by the audit team from Germany in favor of certain suppliers. In
fact, as the records show, Temic never refuted Cantos' submission that under the purchasing
procedures of both Temic and CTEPI, a PDTA starts at an end-user department and that the
PDTAs in question came from the Manufacturing Department as the end-user.
Further, there were others who participated in the execution of the PDTAs Purchasing Officer
Campos, Controlling Manager Aranilla and Cantos' superior Isaac yet they were never

investigated for their involvement in the supposed violation of the company's purchasing
procedures and meted a similar dismissal action. Again, Temic is silent with respect to this
particular assertion of Cantos.
As we see it, the overwhelming evidence45 which Temic claims supported the rulings of LA
Reyno and the NLRC that Cantos was validly dismissed does not exist. This purported
overwhelming evidence consists largely of generalizations, suppositions and bare conclusions of
Cantos' direct involvement or participation in the alleged anomalous execution of PDTAs for
eleven (11) POs, mostly between 2005 and 2006, which as the evidence shows,46even pertained
to CTEPI and not to Temic. We thus wonder how Temic arrived at its conclusion that Cantos was
caught red-handed to have patently violated the company's clear policies, particularly its
purchasing procedures, which he even co-authored.47cralawred
Third. Temic's contention that Cantos made an admission of guilt during the administrative
investigation48 likewise has no evidentiary support. The supposed "admission" could have
sealed the company's case against him had it backed up its claim with what transpired during
the investigation. It could have been done by simply presenting the minutes of the investigation.
No such investigation minutes were ever presented, only an attendance sheet.49 This was a
serious lapse on Temic's part since in her affidavit,50 Ignacio (a member of the investigating
committee and who succeeded Cantos as purchasing manager) deposed that Cantos admitted
that he violated the company's purchasing procedures. In the absence of the minutes, we can
understand why the CA dismissed Ignacio's affidavit as nothing but "barefaced
allegations."51cralawred
To our mind, the minutes of the investigation are crucial, especially since Cantos has persistently
denied that he made the admission of wrongdoing during the investigation. Ignacio's affidavit, as
well as that of Human Resource Manager Del Rosario in the same tenor,52 cannot substitute for
the minutes of the investigation whose absence in the evidence presented remains unexplained.
Under the circumstances, we cannot accept the affidavits of Ignacio and Del Rosario as evidence
of Cantos' purported admission that he violated Temic's purchasing procedures.
In sum, we reiterate and emphasize that the NLRC committed grave abuse of discretion in
validating the dismissal of Cantos as we find no substantial evidence in support of this
pronouncement. We thus find the due process question academic.
In conclusion, we quote with approval the following CA observation:chanRoblesvirtualLawlibrary
xxx [the petitioner] did not commit any act which was dishonest or deceitful. He did not use his
authority as the Purchasing Manager to misappropriate company property and derive benefits
therein nor did he abuse the trust reposed in him by respondent Temic with respect to his
responsibilities. There was no demonstration of moral perverseness that would justify the
claimed loss of trust and confidence attendant to [the] petitioner's job. Temic failed to adduce
any proof that [the] petitioner ever profited from the transactions involved in the purchase
orders. The supplies described in the purchase orders are still with the company even up to the
time when petitioner's services were terminated. And neither was there evidence shown that the
same deviates from the specifications of the company or has no more use to the company.53
(Emphases supplied)
WHEREFORE, premises considered, the petition is DENIED for lack of merit. The assailed decision
and resolution of the Court of Appeals are AFFIRMED.
Costs against petitioner Temic Automotive (Phils.), Inc.
SO ORDERED.

ALILEM CREDIT COOPERATIVE, INC., NOW KNOWN AS ALILEM MULTIPURPOSE

COOPERATIVE, INC. v. SALVADOR M. BANDIOLA, JR.
G.R. No. 173489, 25 February 2013
FACTS
Salvador M. Bandiola (Bandiola) was employed by Alilem Multipurpose Cooperative (AMPC) as its
bookkeeper. AMPC, thru its Board of Directors, after complying with due process, terminated the
services of Bandiola when it was informed that the latter engaged in extra-marital affairs with
one Thelma G. Palma (Palma). The termination letter informed Bandiola of the existence of a
prima facie case against him for illicit marital affair, an act that brings discredit to the
cooperative and a cause for termination pero AMPC Personnel Policy. AMPCs evidence consisted
of sworn statements of the relatives and friends of Palma and Bandiola.
Insisting that the ground for his termination was not among the just causes enumerated under
the Labor Code, Bandiola filed a Complaint for Illegal Dismissal before the Labor Arbiter (LA). The
LA dismissed the Complaint for lack of merit. The National Labor Relations Commission (NLRC)
set aside the LAs Decision. The Court of Appeals (CA) reinstated the earlier Decision of the LA.
RULING
An employer is free to regulate all aspects of employment. It may make reasonable rules
and regulations for the government of its employees which become part of the contract of
employment provided they are made known to the employee. In the event of a violation, an
employee may be validly terminated from employment on the ground that an employer cannot
rationally be expected to retain the employment of a person whose lack of morals, respect and
loyalty to his employer, regard for his employers rules and application of the dignity and
responsibility, has so plainly and completely been barred.
The employers evidence consists of sworn statements of either relatives or friends of
Palma and Bandiola. They either had direct personal knowledge of the illicit relationship or
revealed circumstances indicating the existence of such relationship.
While Bandiolas act of engaging in extra-marital affairs may be considered personal to
him and does not directly affect the performance of his assigned task as bookkeeper, aside from
the fact that the act was specifically provided for by AMPCs Personnel Policy as one of the
grounds for termination of employment, said act raised concerns to AMPC as the Board received

numerous complaints and petitions from the cooperative members themselves asking for the
removal of Bandiola because of his immoral conduct.