LEPANTO CONSOLIDATED V CA
because his services were no longer
PETITIONERS: Lepanto Consolidated Mining
Charles B. Foster
RESPONDENTS: Court of Appeals
Leonardo Arca
DOCKET NO.: GR No. L-15171
PROMUL DATE: April 29, 1961
PONENTE: Labrador, J.
FACTS:
LEONARDO ARCA instituted this action on
October 22, 1954. He alleges that
o On July 22, 1953, he was employed by
the defendants as clerk-typist at
P6.25/day.
o On August 22, 1954, the defendants
terminated his services, on the alleged
ground that they were no longer needed,
that his employment was made under an
existing agreement between the
employees and the defendants company
on March 27, 1953 under which it was to
continue until the work assigned to him
was to be finished.
o The termination of his employment
constituted a breach of the agreement
entered into upon his employment.
o He said that defendants must have been
irked by act of plaintiff in organizing a
labor union.
o Moreover, he suffered actual damages
consisting of loss of wages, attorneys
fees and costs, and that because of the
acute employment problem, he has
suffered mental anguish and serious
anxiety.
DEFENDANTS; ANSWER:
o Charles B. Foster denied the claim of the
plaintiff that his work was to continue until
the completion of the work or project
assigned to him
o Alleged that under the agreement
between the Lepanto Consolidated
Mining Company and its employees
dated March 27, 1953, he, as the general
superintendent, has the power to
determine when a particular work in the
mine is deemed completed or what work
should be curtailed, as well as the power
and authority to lay-off and discharge an
employee when his services are no
longer necessary or when such lay-off or
discharge was required in the conduct
and furtherance of the companys
business
o that the defendant was discharged
needed
o that plaintiff accepted the separation slip
without any protest
o and that the defendants have the
exclusive right to lay-off employees
whose services are no longer required in
the furtherance of the business.
TRIAL COURTS DECISION:
o Found that the plaintiffs separation was
JUSTIFIED and so the complaint was
DISMISSED.
COURT OF APPEALS
o REVERSED THE JUDGMENT, and
reinstated the plaintiff.
o It held that the act of appellant in writing
the President of the Philippines
requesting for a commercial or price
control agent to investigate the prices in
the store of defendants is not an act of
dishonesty, as it is an exercise of the
constitutional right of the citizen to
petition the Government for redress of his
and his co-employees grievances.
o that the act of the plaintiff in preparing a
complaint against the principal of the
Lepanto High School was also in accord
with a civic duty to help the students.
o that his act of snooping among the
papers of the defendant Foster is only a
conclusion, not justified by the premises,
for he is supposed to be entrusted with
the duty of reorganizing the confidential
files and one cannot reorganize the
confidential files of an office without
reshuffling or reading of the same
o that the organization of a rival labor union
is neither a dishonest act prejudicial to
defendants unless it is admitted that the
Lepanto Civic Welfare Union to which he
belongs is company controlled, and the
curtailment of his right to organize would
constitute an unfair labor practice on the
part of the employer.
ISSUE: WON the termination of employment of
Leonard Arca was proper
HELD:
o No objection was raised against
evidence tending to prove that plaintiff
had been caught in the act of shuffling
papers in the desk of Mr. Foster, papers
which had no connection with his work,
as a result of which defendant Foster had
lost confidence in plaintiff.
 o It was also proved without objection that
defendant Foster had intended to assign
plaintiff to organize or reorganize the
confidential files of the company, but in
the meanwhile had assigned him to work
as assistant of his secretary.
o That the secretary had reported that
plaintiffs work was not very satisfactory
because plaintiff was inattentive.
o that desiring to terminate his services,
defendant Foster gave him his
separation slip because he had lost
confidence in him
o that no mention was made about the
dishonest acts committed by him in order
that he be given opportunity to find other
employment.
The acts committed by the respondent in sending
petition to authorities regarding the activities of
his employer, while in themselves, legitimate acts
of an individual protected by law, by such acts
plaintiff has shown conduct which would render
him unsuitable for the work for which the
employer intended him that is, confidential
work. Certainly this is what Foster must have
meant when he declared in court that he had
lost confidence in plaintiff.
The consensus of opinion among the members of
the Court is that it would be unfair and unjust to
the employer to require it to continue employing
the services of the person in whom the manager
has lost confidence.
o The employer has committed a breach of
the contract of employment; if it made a
mistake in choosing the right person it
may be relieved from continuing the
employment, but it should not and would
not be relieved from liability for the
damages arising from the breach of the
contract of employment. (di ko to gets. )
The Court believes that the respondent-employee
should be granted an award of such damages as
he may have suffered by reason of the breach of
the contract of employment, but his
reinstatement should not be ordered, as it is
not appropriate to the peculiar circumstances
of the case.
The case should be remanded to the Court of
First Instance for the determination of the amount
of damages which may be awarded to the
respondent-employee.
WHEREFORE, the decision of the Court of
Appeals appealed from is hereby set aside,
but the case is hereby remanded to the Court
of First Instance for further trial as above
indicated.
REYES V MAXIMS TEA HOUSE
PETITIONER: Ariel A. Tres Reyes
RESPONDENTS: Maxims Tea House
Jocelyn Poon
DOCKET NO.: G.R. No. 140853
PROMUL. DATE: February 27, 2003
PONENTE: Quisumbing, J.
FACTS:
Respondent Maxims Tea House (Maxims)
o employed Ariel Tres Reyes as a driver
since October 1995.
o He was assigned to its M.H. del Pilar St.,
Ermita, Manila branch.
o His working hours were from 5:00PM to
3:00AM.
o Among his duties was to fetch and bring
to their respective homes the employees
of Maxims after the restaurant closed for
the day.
In the wee hours of the morning of September
27, 1997
o Ariel was driving a Mitsubishi L300 van
and was sent to fetch some employees of
Savannah Moon, a ballroom dancing
establishment in Libis, Quezon City. Ariel
complied and took his usual route along
Julia Vargas Street in Pasig City.
o He was headed towards Meralco Avenue
at a cruising speed of 50 to 60 kilometers
per hour, when he noticed a ten-wheeler
truck coming his way at full speed despite
the fact that the latters lane had a red
signal light on.
o Ariel maneuvered to avoid a collision, but
nonetheless the van he was driving
struck the truck. As a result, petitioner
and seven of his passengers sustained
physical injuries and both vehicles were
damaged.
On October 15, 1997, the management of
Maxims required petitioner to submit, within forty-
eight hours, a written explanation as to what
happened that early morning of September 27,
1997.
He complied but his employer found his
explanation unsatisfactory and as a result he was
preventively suspended for thirty (30) days,
effective October 20, 1997.
On November 19, Maxims terminated the
petitioners employment for cause.
Petitioner felt that the vehicular accident was
neither a just nor valid cause for the severance of
his employment, so he filed a complaint for illegal
dismissal.
 LABOR ARBITER:
o DISMISSED the complaint, but ordered
Maxims to pay the complainant:
Financial assistance
13th month pay
SIL pay
o LA found that petitioner was grossly
negligent in failing to avoid the collision.
NLRC DECISION
o REVERSED THE LA DECISION.
o There was no negligence on the
petitioners part.
o Ordered Maxims to REINSTATE Ariel to
his former position w/o loss of seniority
rights plus full backwages.
o In the event that reinstatement is no
longer feasible, respondents are hereby
ordered to pay complainant separation
pay in the amount of one month for every
year of service computed from October 7,
1995 to the date of this Decision, in
addition to payment of backwages
computed from date of termination on
November 19, 1997 up to date of this
decision.
Respondents filed a special civil action with the
CA alleging that the NLRC committed a grave
abuse of discretion amounting to want or excess
of jurisdiction in:
o (a) giving due course to petitioners
Motion for Partial Reconsideration
notwithstanding that it was a prohibited
pleading under Sec. 17 (now Sec. 19),
Rule V of the NLRC Rules of Procedure
and despite want of showing that it was
seasonably filed; and
o (b) for substituting its own findings to the
factual findings of the Labor Arbiter.
COURT OF APPEALS
o DISMISSED the complaint.
ISSUES:
o WON the Motion for Partial
Reconsideration be considered as an
appeal to the NLRC
o WON petitioners dismissal from
employment valid and legal
HELD:
o The first issue involves a question of
substance versus form. Strictly speaking,
a motion for reconsideration of a
decision, order, or award of a Labor
Arbiter is prohibited by Section 19, Rule
V of the NLRC Rules of Procedure. But
said rule likewise allows that a motion for
reconsideration shall be treated as an
appeal provided it meets all the requisites
of an appeal. Petitioner insists that his
pleading was in form a motion for
reconsideration, but in substance it was
an appeal which complied with all the
technical requirements. Respondents
counter that the formal requisites take
precedence.
o How the Court of Appeals could have
been misled by respondents allegations
of technical deficiencies with respect to
the questioned Motion for Partial
Reconsideration in NLRC CA No. 0
17339-98, is surprising. Had the court a
quo, to use its own words, carefully
perused the case records, it would have
readily seen that said pleading had
complied with the technical requirements
of an appeal. Hence, we are
constrained to conclude that the
appellate court had no basis for
concluding that the NLRC had gravely
abused its discretion when the NLRC
gave due course to the motion and
treated it as an appeal.
o In labor cases, rules of procedure should
not be applied in a very rigid and
technical sense. They are merely tools
designed to facilitate the attainment of
justice, and where their strict application
would result in the frustration rather than
promotion of substantial justice,
technicalities must be avoided.
Technicalities should not be permitted to
stand in the way of equitably and
completely resolving the rights and
obligations of the parties. Where the
ends of substantial justice shall be better
served, the application of technical rules
of procedure may be relaxed.
o On the second issue, petitioner contends
that the Court of Appeals erred in holding
that the factual findings made by the
Labor Arbiter regarding negligence
should be sustained because at the trial,
the Labor Arbiter had the opportunity to
observe the demeanor of the litigants.
Petitioner points out that no such trial or
hearing was made. In NLRC NCR Case
No. 00-12-08773-97, the Labor Arbiter
decided the case based on the position
papers submitted by the parties.
Moreover, says the petitioner, the Court
of Appeals ignored substantial evidence,
showing that there was no gross
negligence on his part because the
vehicular accident was entirely due to the
 fault of the truck driver who was speeding
on the wrong lane.
o The OSG joins petitioner in his stance,
pointing out that the police report relied
upon by the parties before the Labor
Arbiter clearly showed that the ten-
wheeler truck lost its brakes, intruded into
the lane of the vehicle driven by
petitioner, and collided with petitioners
van. These factual findings could not be
rebutted by the Labor Arbiter by
observing the demeanor of the parties at
the hearings, more so since the Labor
Arbiter did not conduct any trial-type
hearing. Thus, concluded the OSG, the
Court of Appeals erred when it relied
upon such ground in sustaining the Labor
Arbiters finding that petitioner was
grossly negligent.
o Moreover, based on the police traffic
accident investigation report, we are
convinced that the accident was the fault
of the ten-wheeler trucks driver. On
seeing the signal light change to red, this
driver stepped on his brake, not just once
but three times, but his truck could not
stop. Since the truck was on the wrong
lane, petitioners van, which was in its
proper lane with the green light, smashed
into the out-of-control truck. This episode
led to petitioners dismissal which, in our
view, is unjustified.
o Under the Labor Code, gross negligence
is a valid ground for an employer to
terminate an employee. Gross
negligence is negligence characterized
by want of even slight care, acting or
omitting to act in a situation where there
is a duty to act, not inadvertently but
willfully and intentionally with a conscious
indifference to consequences insofar as
other persons may be affected. In this
case, however, there is no substantial
basis to support a finding that petitioner
committed gross negligence.
o In sustaining the Labor Arbiters finding
that petitioner was grossly negligent, the
appellate court stressed that the cited
episode was the second vehicular
accident involving petitioner, and as such
it may clearly reflect against [his]
attitudinal character as a driver. We note,
however, that the Commission found that
in the first vehicular accident involving
petitioner he was the victim of the
reckless and negligent act of a fellow
driver. We agree with the NLRC that an
imputation of habitual negligence cannot
be drawn against petitioner, since the
earlier accident was not of his own
making.
o There being no clear showing that
petitioner was culpable for gross
negligence, petitioners dismissal is
illegal. It was error for the Court of
Appeals to reverse and set aside the
decision of the Third Division of the
NLRC.
JGB ASSOCIATES V NLRC
PETITIONER: JGB & Associates, Inc.
RESPONDENTS: NLRC
Arturo C. Arrojado
DOCKET NO.: G.R. No. 109390
PROMUL. DATE: March 7, 1996
PONENTE: Mendoza, J.
FACTS:
Private respondent Arturo Arrojado hired by
JGB & Associates for its principal, Tariq Hajj
Architects, to work as draftsman in Saudi Arabia.
o The contract of employment was for 2
years, commencing May 27, 1989.
o The salary was US$500/month, although
Travel Exit Pass (TEP) showed that his
monthly salary was US$525/month.
February 25, 1990 before the expiration of his
contract of employment, private respondent was
given notice by his employer that his employment
was terminated for the reason that his
performance both in productivity and efficiency
was below average. The termination of his
employment took effect on the same day.
He was immediately scheduled to depart Saudi
Arabia and on February 28, 1990, three days after
his dismissal, he found himself already in the
Philippines.
March 12, 1990 Arturo filed a complaint w/ the
POEA against JGB, Tariq Hajj, and Country
Bankers Insurance Corporation, alleging illegal
dismissal and seeking payment of salaries
corresponding to the unexpired portion of his
employment contract, salary differential, refund of
S.R. 1,000 which was withheld from him for
telephone bills, moral damages and attorneys
fees.
o Arturo alleged that he did his job
conscientiously and that he was even
asked to make scale models, in addition
to his regular duties.
o He claimed that he was never
reprimanded nor informed of his alleged
negligence and incompetence either by
his immediate supervisor or by his
employer.
 o He also complained that he was denied
due process because his dismissal took
effect on the same day he was given
notice and claimed that, because he was
immediately repatriated, he had no
opportunity to challenge his arbitrary
dismissal.
o Private respondent admitted that he
signed a waiver of claims but alleged that
he did so under compulsion and that, in
any event, he was not precluded from
questioning the legality of his dismissal
and from recovering monetary claims
due him.
JGBS ANSWER:
o Arturo was dismissed for neglect of
duties and performance below par.
o Petitioner also alleged that although no
prior notice of dismissal was given to
private respondent, he was given in lieu
thereof a notice pay equivalent to one
month salary.
o Petitioner denied liability for salary
differential on the ground that the
employment contract stipulated that his
monthly salary was US$500.00.
o Petitioner invoked a quitclaim signed by
private respondent as evidence that he
had been paid all the monetary claims
due him.
POEAS DECISION:
o DISMISSED THE COMPLAINT but
ordered the respondents to pay
complainant jointly and severally the
peso equivalent at the time of actual
payment the amount of SR1,000
representing the refund of the telephone
bills deducted from the latter.
NLRC DECISION:
o Declared complainants dismissal from
employment ILLEGAL.
o MR was also dismissed by the NLRC.
ISSUE: WON NLRC committed a grave abuse of
discretion in reversing the decision of the POEA
and ruling that private respondent was illegally
dismissed
HELD:
o We find that petitioner failed to prove that
the NLRC committed grave abuse of
discretion in holding that private
respondent was illegally dismissed. In
termination cases, the burden of proving
just cause for dismissal is on the
employer.
o In this case, the grounds for the dismissal
of private respondent were stated in two
documents presented by petitioner
before the POEA:
(1) the notice of termination
given to private respondent on
February 20, 1990; and
(2) the letter of the principal,
Tariq Hajj on August 1, 1990.
o None of these causes (gross and
habitual negligence and fraud and wilful
neglect by the employee) is stated in the
two letters of the employer as reasons for
dismissing private respondent. None of
the reasons there stated even
approximates any of the causes provided
in the contract of employment for the
termination of employment by the
employer.
o Indeed, the grounds given for private
respondents dismissal are nothing
but general, vague and amorphous
allegations. As the NLRC noted, the
letters do not state particular acts which
show that private respondent was indeed
negligent and that his performance was
below par. Nor did petitioner show the
tangible financial loss which it claimed it
suffered as a result of private
respondents alleged neglect of duty.
o Nor is the quitclaim signed by private
respondent a bar to the filing of the
complaint. We have already held in a
number of cases that a deed of release
or quitclaim cannot bar an employee
from demanding what is legally due
him. The reason for this is that the
employee does not really stand on an
equal footing with his employer. In some
cases he may be so penurious that he is
willing to bargain even rights secured to
him by law. There is good reason for
applying this ruling here because private
respondent was made to sign the deed of
quitclaim in this case on the same day he
was dismissed. He was in a foreign
country and he had no one to help him.
In three days he was due for repatriation
to the Philippines. He had no means of
questioning his employers acts. He had
no choice but to accept what was being
offered to him. Necessitous men are
not free men.
o In the case at bar, private respondent
was not only dismissed without cause but
his dismissal was made without due
process. He was informed of the reason
for his dismissal only at the time his
employment was terminated on February
25, 1990. Giving him notice pay
 equivalent to his one month salary in lieu
of the notice in the contract of
employment could not take the place of
notice before dismissal as required by
law. The notice required is not a mere
technicality but a requirement of due
process to which every employee is
entitled to insure that the employers
prerogative to dismiss is not exercised in
an arbitrary manner.
o As the employment contract in the case
at bar is for a definite period, private
respondent is entitled to the payment of
his salaries corresponding to the
unexpired portion of his contract. The
NLRC, therefore, correctly awarded
private respondent the amount which is
equivalent to the unexpired portion of his
contract. The notice pay given to private
respondent should be deemed as
indemnity for his dismissal without due
process.
o WHEREFORE, the petition is
DISMISSED for lack of merit.
CIVIL SERVICE V ARANDIA
PETITIONERS: Civil Service Commission
Department of Science &
Technology (Reg. Office V)
RESPONDENT: Marilyn G. Arandia
DOCKET NO.: G.R. No. 199549
PROMUL. DATE: April 7, 2014
PONENTE: Brion, J.
FACTS:
Eriberta Nepomuceno, Regional Director of
DOST-V In March 2000, filed an administrative
complaint for gross insubordination, gross
neglect of duty, conduct grossly prejudicial to the
best interest of public service, grave misconduct
and gross inefficiency in the performance of duty
against respondent Marilyn G. Arandia, with
the Civil Service Commission Regional Office No.
V (CSCRO-V), Legazpi City.
o Nepomuceno alleged that the
respondent refused to sign, without
justifiable cause, documents for the
payment of certain miscellaneous and
travelling expenses, phone bills, and the
release of salaries and allowances of
Nepomuceno and other employees of
DOST-V.
Answer to the Complaint: Arandia justified her
refusal to sign and attributed it to the failure of
Nepomuceno and the other concerned
employees to submit sufficient supporting
documents for their claims for reimbursement and
the release of their salaries and allowances.
March 22, 2002, a formal charge was issued
against Arandia for the offenses of grave
misconduct, gross insubordination and conduct
prejudicial to the best interest of the service.
CIVIL SERVICE REGIONAL OFFICE
o In an Order dated April 26, 2006,
Director Cecilia R. Nieto of CSCRO-V
found respondent GUILTY of conduct
prejudicial to the best interest of the
service only and imposed on her the
penalty of suspension for six months and
one day.
o Respondent filed an MR but same was
DENIED.
o Respondent then appealed to the Civil
Service Commission National Office.
CIVIL SERVICE NATIONAL OFFICE
o Found merit in Respondents appeal
o After careful evaluation of the records of
the case, the Commission finds no
substantial evidence to hold Arandia
guilty of Conduct Prejudicial to the Best
Interest of the Service.
The records are replete with evidence
that indeed Arandia had justifiable
reasons in not signing these
disbursement vouchers.
It must be emphasized that the functions
performed by Arandia are not merely
clerical in nature, neither are they
ministerial. The Position Description
Form (PDF) of Arandia as Administrative
Officer V states supervises and
coordinates accounting functions, budget
operation and control. Clearly, these
functions require a degree of discretion
which is even more amplified considering
that it involves the disbursement of public
funds.
Also, her cautious attitude in approving
disbursements is not without basis.
Records show that in the audit conducted
by the DOST Central Office for the period
January to August 1999 signed by then
DOST Assistant Secretary Imelda D.
Rodriguez yielded adverse findings with
regard to the transactions of DOST
Region V. In the said report, it was
indicated that: The findings covered
disbursement of public funds principally
approved by Regional Director Eriberta
N. Navera, which indicate a pattern of
 dishonesty, consisting largely of claims of
the Regional Director which are
unnecessary, irregular, excessive and
extravagant. The disbursements
indicate, likewise, a pattern of wanton
disregard for accounting and auditing
rules and regulations involving other
finance officials such as the Budget
Officer and the Accountant.
o These findings, notwithstanding, the
CSC still found the respondent liable
for insubordination for her refusal to
obey several memoranda issued by
Nepomuceno requiring her to
immediately turn-over the documents
under her supervision to the new
Administrative Officer-Designate, Engr.
Manuel Sn. B. Lucena, Jr., and to comply
with the exchange of room assignment
(as well as the memoranda directing her
to answer or submit an explanation for
her refusal) brought about by the
respondents reassignment from the
position of Administrative Officer to
Planning Officer.
o Also, the CSC found that the respondent
refused to comply with an office
memorandum dated March 6, 2000
requiring her and another Division Chief,
to secure Nepomucenos
approval/signature before using the
office telephone. For these reasons, the
CSC found the respondent guilty of
two counts of insubordination and
imposed on her the penalty of three
months suspension.
o MR was also denied. Hence, the CA
appeal.
COURT OF APPEALS
o Ruled in the respondents favor and
dismissed the administrative complaint
after it found that she actually complied
with the subject office memoranda.
o Immediately upon receipt of such denial,
Arandia complied with Nepomucenos
order and forwarded to Engr. Lucena
pertinent documents in her possession.
This is evinces by the Letter dated 28
June 2000 detailing the list of documents
entrusted into the custody of Engr.
Lucena, The Letter speaks for itself as it
ineluctably established that petitioner
complied with her superiors order to
turn over pertinent documents despite
her reluctance to relinquish her post as
Administrative Officer V.
ISSUE: WON the respondent is is guilty of
insubordination
HELD:
o Petition partially meritorious. The
respondent is guilty of simple
insubordination.
o Insubordination is defined as a refusal
to obey some order, which a superior
officer is entitled to give and have
obeyed. The term imports a willful or
intentional disregard of the lawful and
reasonable instructions of the employer.
o In this case, the respondent committed
insubordination when she failed to
promptly act on the June 16, 2000
memorandum issued by her superior,
Regional Director Nepomuceno,
reminding her of her duties to
immediately turn-over documents to and
exchange room assignments with the
new Administrative Officer-Designate,
Engr. Lucena.
o We see in the respondents initial inaction
on her deliberate choice not to act on the
subject memoranda; she waited until the
resolution of her motion for
reconsideration of her reassignment
before she actually complied. The
service would function very inefficiently if
these types of dilatory actions would be
allowed.
o Since we merely found the respondent
guilty of insubordination in not promptly
complying with the memoranda for the
turn-over of documents, we find the
suspension of 1 month and 1 day as
sufficient penalty for her offense.
o Considering, however, that respondent is
no longer with DOST-V and is now
working abroad, we can no longer
impose on her the penalty of suspension
from service. So we impose on the
respondent the penalty of a fine of one
month salary, which amount is to be
deducted from her retirement benefits or
from whatever benefits, if any, that she is
still entitled to receive after her
resignation. If there is none, the
respondent is ordered to pay the fine
directly to and within the period to be
directed by the CSC.
o WHEREFORE, premises considered, we
find Marilyn G. Arandia GUILTY of
INSUBORDINATION and impose on her
the penalty of a FINE equivalent to her
one month salary.
PHILIPPINE SHEET METAL V CIR
PETITIONER: PH Sheet Metal Workers Union
RESPONDENTS: The Court of Industrial Relations
Philippine Can Company
Liberal Labor Union
DOCKET NO.: GR No. L-2028
PROMUL. DATE: April 28, 1949
PONENTE: Reyes, J
NOTE:
Guys, yung ibang parts ng case, (issues and held) were
written in Spanish kaya kinailangan kong mag-refer sa digests
available in the internet.
FACTS:
The controversy in this case involves an industrial
dispute between the respondent company (a
corporation engaged in the manufacture of tin
plates, aluminum sheets, etc.) and its laborers
some of whom belong to the Philippine Sheet
Metal Workers Union (CLO) and some to the
Liberal Labor Union.
The dispute was over certain demands made
upon the company by the laborers, one of the
demands, being for the recall of eleven workers
who had been laid off.
o Temporarily taken back on certain
conditions pending final determination of
the controversy, these eleven workers
were, in the end, ordered retained in the
decision handed down by the court on
February 19, 1947.
The petitioner tried to prove that the 11 laborers
were laid off by the respondent company due to
their union activities.
On February 10, 1947, that is, nine days before
the decision came down, the company filed a
motion in the case, asking for authority to lay off
at least 15 workers in its can department on the
ground that the installation and operation of nine
new labor-saving machines in said department
had rendered the services of the said workers
unnecessary.
o The Philippine Sheet Metal Workers
Union (CLO) opposed the motion,
alleging that there was more than
sufficient work in the company to keep all
its workers busy, and, on the further
allegation that the company had hired
without the authority of the courts some
ten new laborers pending resolution of
the principal case, it in turn asked that the
company be declared guilty of contempt
of court.
o About a year later, the court, after due
hearing and investigation, rendered an
order, dated February 5, 1948, granting
the companys motion to lay off 15
workers and denied the petition to have
the company declared in contempt of
court.
ISSUE: WON the firing of the laborers due to their
union activities is valid
HELD:
o Yes. The right to reduce personnel
should, of course, not be abused. It
should not be made a pretext for easing
out laborers on account of their union
activities. But neither should it be denied
when it is shows that they are not
discharging their duties in a manner
consistent with good discipline and the
efficient operation of an industrial
enterprise.
o The petitioner contends that the order
complained of was made with grave
abuse of discretion and in excess of
jurisdiction in that it is contrary to the
pronouncement made by the lower court
in its decision in the main case where it
disapproved of the dismissal of eleven
workers "with whom the management is
displeased due to their union activities."
It appears, however, that the
pronouncement was made upon a
distinct set of facts, which are different
from those found by the court in
connection with the present incident, and
that very decision, in ordering the
reinstatement of the eleven laborers,
qualifies the order by saying that those
laborers are to be retained only until the
occurrence of facts that may give rise to
a just cause of their laying off or
dismissal, or there is evidence of
sufficient weight to convince the Court
that their conduct is not satisfactory.
o After a careful review of the record, we
find that the Court of Industrial Relations
has neither exceeded its jurisdiction nor
committed grave abuse of discretion in
rendering the order complained of. The
petition for certiorari is, therefore, denied,
but without costs against the petitioner
for the reasons stated in its motion to
litigate as pauper.
ESGUERRA V VALLE VERDE
PETITIONER: Dolores T. Esguerra
RESPONDENTS: Valle Verde Country Club, Inc.
Ernesto Villaluna
DOCKET NO.: GR No. 173012
PROMUL. DATE: June 13, 2012
PONENTE: Brion, J
FACTS:
April 1, 1978 Valle Verde hired Esguerra as
Head Food Checker. In 1999, she was promoted
to Cost Control Supervisor.
January 15, 2000 - the Couples for Christ held a
seminar at the country club. Esguerra was tasked
to oversee the seminar held in the two function
rooms the Ballroom and the Tanay Room. The
arrangement was that the food shall be served in
the form of pre-paid buffet, while the drinks shall
be paid in a pay as you order basis.
The Valle Verde Management found out the
following day that only the proceeds from the
Tanay Room had been remitted to the accounting
department.
o There were also unauthorized charges of
food on the account of Judge Rodolfo
Bonifacio, one of the participants.
o To resolve the issue, Valle Verde
conducted an investigation; the
employees who were assigned in the two
function rooms were summoned and
made to explain, in writing, what had
transpired.
March 6, 2000 Valle Verde sent a memo to
Esguerra requiring her to show cause as to why
no disciplinary action should be taken against her
for the non-remittance of the Ballrooms sales.
She was placed under preventive suspension
with pay, pending investigation.
IN HER RESPONSE Esguerra DENIED having
committed any misappropriation.
o She explained that it had been her
daughter (who was assigned as a food
checker) who lost the money. To settle
the matter, Esguerra paid the
unaccounted amount as soon as her
daughter informed her about it.
o Esguerra also explained the
unauthorized charging of food on Judge
Bonifacios account. She alleged that
Judge Bonifacio took pity on her and told
her to take home some food and to
charge it on his account.
July 26, 2000 Valle Verde issued a second
memo terminating Esguerras employment as
they found her explanation unsatisfactory.
Esguerra filed a complaint with the NLRC for
illegal dismissal.
THE LABOR ARBITER
o April 25, 2002 - Labor Arbiter Marita V.
Padolina DISMISSED the complaint for
lack of merit, but ordered Valle Verde to
pay Esguerra 13th month pay in the
amount of P2,016.66, rice subsidy in the
amount of P1,100.00, and ten percent
(10%) attorneys fees in the amount of
P311.66.
THE NLRC
o Esguerra appealed to the NLRC.
o December 27, 2002 NLRC MODIFIED
the decision and only awarded
P143,000.00 as separation pay,
equivalent to one-half (1/2) month for
every year of service, after taking into
account Esguerras long years of service
and absence of previous derogatory
records.
o BOTH Valle Verde and Esguerra filed
Motions for Recon. Only Valle Verdes
was granted, and so the NLRC set aside
its December 27 decision, and
AFFIRMED the April 5 decision of the LA.
THE COURT OF APPEALS
o Esguerra elevated her case to the CA via
Rule 65, petition for certiorari.
o February 7, 2006 the CA DENIED
Esguerras certiorari.
o It found that the NLRC did not commit
any grave abuse of discretion in finding
that Esguerra was validly dismissed from
employment for loss of trust and
confidence, and that her length of service
cannot be counted in her favor.
o CA also denied her MR.
ISSUE: WON the CA erred in affirming the
decision of the NLRC, in declaring that Esguerra
was validly dismissed
HELD:
o The petition is without merit.
o Under the Labor Code, the requirements
for the lawful dismissal of an employee
are two-fold: the substantive and the
procedural aspects. Not only must the
dismissal be for a just or authorized
cause, the rudimentary requirements of
due process notice and hearing must,
likewise, be observed x x x. Without the
concurrence of the two, the termination
would x x x be illegal; employment is a
property right of which one cannot be
deprived of without due process.
o There was valid notice and hearing.
We fail to find any irregularities in
the service of notice to Esguerra.
The memorandum dated March
6, 2000 informed her of the
charges, and clearly directed her
to show cause, in writing, why no
disciplinary action should be
imposed against her. Esguerras
allegation that the notice was
insufficient since it failed to
contain any intention to
terminate her is incorrect.
Contrary to Esguerras
allegation, the law does not
require that an intention to
terminate ones employment
should be included in the first
notice. It is enough that
employees are properly apprised
of the charges brought against
them so they can properly
prepare their defenses; it is only
during the second notice that the
intention to terminate ones
employment should be explicitly
stated.
In sum, the existence of an
actual, formal trial-type
hearing, although preferred, is
not absolutely necessary to
satisfy the employees right to be
heard. Esguerra was able to
present her defenses; and only
upon proper consideration of it
did Valle Verde send the second
memorandum terminating her
employment. Since Valle Verde
complied with the two-notice
requirement, no procedural
defect exists in Esguerras
termination.
o Esguerra occupied a position of trust
and confidence
We have held that there are two
(2) classes of positions of trust
the first class consists of
managerial employees, or those
vested with the power to lay
down management policies; and
the second class consists of
cashiers, auditors, property
custodians or those who, in the
normal and routine exercise of
their functions, regularly handle
significant amounts of money or
property.
Esguerra held the position of
Cost Control Supervisor and had
the duty to remit to the
accounting department the cash
sales proceeds from every
transaction she was assigned to.
This is not a routine task that a
regular employee may perform; it
is related to the handling of
business expenditures or
finances. For this reason,
Esguerra occupies a position of
trust and confidence a position
enumerated in the second class
of positions of trust. Any breach
of the trust imposed upon her
can be a valid cause for
dismissal.
We find no merit in the allegation
that it was Esguerras daughter
who should be held liable. She
had no custody of the cash sales
since it was not part of her duties
as a food checker. It was
Esguerras responsibility to
account for the cash proceeds; in
case of problems, she should
have promptly reported it,
regardless of who was at fault.
Instead, she settled the
unaccounted amount only after
the accounting department
informed her about the
discrepancy, almost one month
following the incident. Esguerras
failure to make the proper report
reflects on her irresponsibility in
the custody of cash for which she
was accountable, it was her duty
to account for the sales
proceeds, and she should have
known about the missing amount
immediately after the event.
We cannot favorably consider
Esguerras explanation about the
unauthorized charging on Judge
Bonifacios account. It is highly
unethical for an employee to
bring home food intended to be
sold to customers. At any rate,
her explanation is self-serving
and cannot be believed; the
numerous written testimonies of
the other co-workers never even
mentioned it.
o WHEREFORE, we hereby DENY the
petition for lack of merit. Costs against
Dolores T. Esguerra.
WILTSHIRE FILE V NLRC
PETITIONER: Wiltshire File Co., Inc.
RESPONDENTS: NLRC
Vicente T. Ong
DOCKET NO.: GR No. 82249
PROMUL. DATE: February 7, 1991
PONENTE: Feliciano, J
FACTS:
Private respondent Vicente Ong Sales
Manager of Wiltshire from March 16 1981 to June
18 1985.
o He received a monthly salary of
P14,375.00 excluding commissions from
sales which averaged P5,000.00 a
month.
o He also enjoyed vacation leave with pay
equivalent to P7,187,50 per year, as well
as hospitalization privileges to the extent
of P10,000.00 per year.
June 13, 1985 - upon private respondents return
from a business and pleasure trip abroad, he was
informed by the President of petitioner Wiltshire
that his services were being terminated.
o Private respondent maintains that he
tried to get an explanation from
management of his dismissal but to no
avail.
o On 18 June 1985, when private
respondent again tried to speak with the
President of Wiltshire, the companys
security guard handed him a letter which
formally informed him that his services
were being terminated upon the ground
of redundancy.
Private respondent filed, on 21 October 1985, a
complaint before the Labor Arbiter for illegal
dismissal alleging that his position could not
possibly be redundant because nobody (save
himself) in the company was then performing the
same duties.
o Private respondent further contended
that retrenching him could not prevent
further losses because it was in fact
through his remarkable performance as
Sales Manager that the Company had an
unprecedented increase in domestic
market share the preceding year.
In its answer, petitioner company alleged that the
termination of respondents services was a cost-
cutting measure:
o that in December 1984, the company had
experienced an unusually low volume of
orders
o and that it was in fact forced to rotate its
employees in order to save the company
o Despite the rotation of employees,
petitioner alleged; it continued to
experience financial losses and private
respondents position, Sales Manager of
the company, became redundant.
In a decision dated 11 March 1987, the Labor
Arbiter declared the termination of private
respondents services illegal and ordered
petitioner to pay private respondent backwages in
the amount of P299,000.00, unpaid salaries in the
amount of P22,352.11, accumulated sick and
vacation leaves in the amount of P12,543.91,
hospitalization benefit package in the amount of
P10,000.00, unpaid commission in the amount of
P57,500,00, moral damages in the amount of
P100,000.00 and attorney's fees in the amount of
P51,639.60.
The NLRC AFFIRMED the LA Decision.
ISSUE: WON the dismissal of the private
respondent was justified and legal
HELD:
o Turning to the legality of the termination
of private respondents employment, we
find merit in petitioners basic argument.
We are unable to sustain public
respondent NLRCs holding that
private respondents dismissal was
not justified by redundancy and hence
illegal. In the first place, we note that
while the letter informing private
respondent of the termination of his
services used the word redundant, that
letter also referred to the company
having incur[red] financial losses which
[in] fact has compelled [it] to resort to
retrenchment to prevent further losses.
o Thus, what the letter was in effect saying
was that because of financial losses,
retrenchment was necessary, which
retrenchment in turn resulted in the
redundancy of private respondents
position.
o In the second place, we do not believe
that redundancy in an employers
personnel force necessarily or even
ordinarily refers to duplication of
work. That no other person was holding
the same position that private respondent
held prior to the termination of his
services, does not show that his position
had not become redundant. Indeed, in
any well-organized business enterprise,
it would be surprising to find duplication
of work and two (2) or more people doing
the work of one person. We believe that
redundancy, for purposes of our Labor
Code, exists where the services of an
employee are in excess of what is
 reasonably demanded by the actual
requirements of the enterprise.
Succinctly put, a position is redundant
where it is superfluous, and superfluity of
a position or positions may be the
outcome of a number of factors, such as
overhiring of workers, decreased volume
of business, or dropping of a particular
product line or service activity previously
manufactured or undertaken by the
enterprise.
o The determination of the continuing
necessity of a particular officer or position
in a business corporation is
managements prerogative, and the
courts will not interfere with the exercise
of such so long as no abuse of discretion
or merely arbitrary or malicious action on
the part of management is shown.
o We hold, therefore, that the NLRCs
finding that private respondent had
not been accorded due process, is
bereft of factual and legal bases. The
award of moral damages that rests on
such ground must accordingly fall.
o While private respondent may well have
suffered personal embarrassment by
reason of termination of his services,
such fact alone cannot justify the award
of moral damages. Moral damages are
simply a species of damages awarded to
compensate one for injuries brought
about by a wrongful act. As discussed
above, the termination of private
respondents services was not a wrongful
act. There is in this case no clear and
convincing evidence of record showing
that the termination of private
respondent's services, while due to an
authorized or statutory cause, had been
carried out in an arbitrary, capricious and
malicious manner, with evident personal
ill-will. Embarrassment, even humiliation,
that is not proximately caused by a
wrongful act does not constitute a basis
for an award of moral damages.
o Private respondent is, of course, entitled
to separation pay and other benefits
under Act 283 of the Labor Code and
petitioners letter dated 17 June 1985.