Statutory Reference:
amending his previous order and assigning the complainant to the
Article 296 and 297 only and related provisions in the Omnibus Rules
DOLE Department Order No. 147-15 series of 2015
THIRD DIVISION
[ADM. CASE No. 5649 - January 27, 2006]
DANDY V. QUIJANO, Complainant, v. GEOBEL A. BARTOLABAC
(Labor Arbiter, NLRC-NCR South), and ALBERTO R. QUIMPO
(Commissioner, NLRC-First Division), Respondents.
RESOLUTION
TINGA, J.:
On 19 March 2002, complainant Dandy Quijano filed before this Court
a verified complaint1 written in Pilipino against herein respondents
Atty. Geobel A. Bartolabac (Bartolabac), Labor Arbiter of the National
Labor Relations Commission (NLRC), and Commissioner Alberto R.
Quimpo (Quimpo) of the same Commission for violating Canon 12 and
Rule 1.013 of the Code of Professional Responsibility.
According to complainant, respondents violated his constitutional right
to due process in failing to execute the final and executory judgment
of this Court in G.R. No. 126561 entitled Quijano v. Mercury Drug
Corporation.4
The antecedent facts are as follows:
Complainant was dismissed from service by the Mercury Drug
Corporation (corporation). He filed a complaint for illegal dismissal
before the NLRC. Eventually, the case was elevated to this Court. On 8
July 1998, the Court promulgated its Decision in favor of herein
complainant ordering, among others, his reinstatement.5 The
corporation's motion for reconsideration was denied by this Court in its
Resolution dated 5 July 1999.
Complainant relates that he filed with respondent Labor Arbiter
Bartolabac a motion for execution on 9 December 1998 but despite the
final resolution of his case, Bartolabac issued an order that in effect
changed the tenor of the final judgment.6 While the decision of this
Court had mandated complainant's reinstatement, Bartolabac instead
awarded backwages and separation pay.
The Court, upon learning this, issued a Resolution7 on 17 November
1999 directing Bartolabac to fully comply with its Decision dated 8 July
1998 and Resolution dated 5 July 1999 within a non-extendible period
of five (5) days from receipt thereof and to explain in writing why he
should not be punished for indirect contempt for his actuations in
handling the case and defiance of the Court's directives.
Pursuant to the Resolution of this Court, Bartolabac issued an alias writ
of execution on 18 February 2000. However, respondent Bartolabac
allegedly again unilaterally issued another order dated 5 April 2000,
position of self-service attendant of the corporation instead of his
original position of warehouseman. Subsequently, respondent
Commissioner Quimpo overturned the above order of Bartolabac and
directed the payment of separation pay rather than reinstatement to a
substantially similar position as ordered by this Court.
Complainant adds that he had filed a motion to cite counsel for
respondent corporation in contempt8 and an answer to the order dated
5 April 2000, but these were disregarded by Bartolabac on the ground
that an appeal was already underway at the NLRC by the corporation.
Further, he states that he was not given a copy of the appeal
memorandum filed by the corporation with the NLRC; yet, the NLRC
First Division headed by Quimpo disposed of the same. He also alleges
that the corporation did not post a cash bond for the appeal nor did
they give him a temporary reinstatement or payroll reinstatement,
which according to complainant, is mandatory. Despite this, and
without giving complainant any opportunity to comment on the appeal
memorandum, Quimpo nonetheless issued a resolution dated 26
September 2000 which ordered the corporation to pay complainant
separation pay plus backwages. Complainant asserts that Quimpo
should have inhibited himself from deciding the case as he, or the
NLRC First Division, was the public respondent in the Supreme Court
case.
Complainant admits having received the monetary award in the
amount of P449,062.98 from the corporation in satisfaction of this
Court's ruling in G.R. No. 126561 but contends that the award cannot
be considered a cash bond for the appeal memorandum before the
NLRC as the same was computed until 24 November 1999 only and he
has a right to the award because his case had long become final and
executory.
Thus, complainant asserts that his constitutional right to due process
has been seriously violated by Bartolabac and Quimpo.
On 22 April 2002, this Court issued a Resolution9 requiring
respondents to file their respective comments on the complaint within
ten (10) days from notice.
In his comment10 filed on 4 July 2002, Bartolabac states that the
present complaint is a rehash of several complaints against him which
complainant filed before different fora, including this Court and the
Office of the Ombudsman.
As to the issue of monetary award and reinstatement due the
complainant, Bartolabac argues that the records of G.R. No. 126561
reveal that the corporation had already released to complainant the
sum of P297,930.75 as cash bond deposit. The amount of P449,062.98
had been deposited to the cashier of the NLRC. Out of the said
1
remaining amount, Bartolabac directed the release of P250,660.62 to
complainant. The remaining balance of P198,402.36 was to answer for
complainant's MEDICARE and SSS contributions, withholding tax,
loans, etc., which had yet to be determined at that time. Bartolabac
gave both parties the opportunity to dispute or defend their respective
claims but complainant failed to cooperate either by not attending the
scheduled hearing called for that purpose on 27 March 2000, or by
failing to file controverting evidence to dispute the claimed deductions
by the corporation.11
Before Bartolabac could adjudicate the proper monetary award for
complainant, the latter filed a complaint against him before the Office
of the Ombudsman for oppression and grave misconduct. Due to this
supervening event, Bartolabac's sense of propriety compelled him to
inhibit himself from further participating in the adjudication of the
remaining balance of P198,402.36. But most importantly, he adds, the
case was re-raffled to Labor Arbiter Gaudencio P. Demaisip, Jr. who
awarded the whole amount of P449,062.36 which complainant has
already received.
Offering another perspective of the case at bar, Bartolabac avers that
after the Supreme Court had rendered its decision in G.R. No. 126561
on 8 July 1998, the case was re-raffled to Labor Arbiter Renell Joseph
R. Dela Cruz for the satisfaction of judgment. At that point, the exact
monetary award and reinstatement aspects were raised. Both parties
submitted conflicting computations on the monetary award. The
corporation also asserted that they had abolished the position of
warehouseman and there was no substantially equivalent vacant
position. Labor Arbiter Dela Cruz then ordered the parties to submit
their respective position papers but eleven (11) days thereafter, said
labor arbiter issued an order inhibiting himself from handling the case
as he allegedly could not bear with complainant dictating the rules of
the proceedings.12
The labor case was re-raffled to Bartolabac on 20 April 1999. Unaware
of the pending motion for reconsideration of the corporation in G.R.
No. 126561 where the feasibility of reinstatement was at issue, he
issued an order on 24 June 1999 ruling out complainant's
reinstatement, awarding separation pay instead and the amount
of P573,228.00 (less necessary deductions) as backwages.
As a consequence, this Court on 17 November 1999 reproached
Bartolabac for completely disregarding the corporation's motion for
reconsideration with this Court, directing him to order complainant's
reinstatement and payment of backwages, moral damages, exemplary
damages and attorney's fees, and requiring him to explain in writing
why he should not be punished for indirect contempt for his handling
of the case and defiance of the Court's directives. Bartolabac complied
by filing his manifestation stating that his office was not furnished with
a copy of the motion for reconsideration. His act of adjudicating the
issue of reinstatement was impelled by the sense of urgency on the
matter since he received a letter signed by complainant and a Memo
from the NLRC Chairman referring the complainant's letter to him for
appropriate action.13 Both letters sought the immediate disposition of
his labor case.14
Based on the foregoing, Bartolabac maintains that complainant
engaged in forum-shopping for while complainant knew of the
existence of the corporation's motion for reconsideration with this
Court, he remained insistent that Bartolabac resolve the reinstatement
issue.15
He also stresses that he did not incur delay in the disposition of the
labor case. After he received the 17 November 1999 Resolution of this
Court on 22 November 1999, he issued an alias writ of execution on
24 November 1999 directing the sheriff to garnish the amount
of P449,062.98 and to cause the reinstatement of complainant to a
substantially equivalent position. When the sheriff returned the writ
unsatisfied for failure of the corporation to comply with the
reinstatement aspect as the open positions were only for pharmacist,
pharmacy assistant, cashier and self-service attendant, he lost no time
in resolving that, while the first three positions need college graduates,
the self-service attendant position may be sufficiently performed by
complainant even though he is not a college graduate.16
Lastly, Bartolabac declares that with the filing of the appeal from the
order of reinstatement with the NLRC, he lost jurisdiction over the
issue.
For his part, Quimpo alleges that his inclusion in the present
administrative case was due to his participation in disposing of the
corporation's appeal on the issue of complainant's reinstatement as
self-service attendant. He asserts that by law, the Commission has
exclusive appellate jurisdiction to hear and decide all decisions, awards
or orders rendered by the labor arbiter.17 He adds that said authority
was even tacitly recognized by the Court in its Resolution dated 7 June
2000 in relation to G.R. No. 126561. The pertinent portions of the
resolution read:
"On the issue of reinstatement, the Labor Arbiter issued an Order on
April 5, 2000, directing the private respondent to reinstate petitioner
to the position of self-service attendant. The reinstatement order was
impugned by the private respondent as the petitioner was allegedly
not qualified for the position and there was already strained relations
between the parties. The reinstatement order is now pending appeal
before the NLRC.
As the NLRC has acquired jurisdiction over the issue of petitioner's
reinstatement and the amount of deduction on petitioner's monetary
award is subject to proof and/or dispute by the respective parties
2
before the Labor Arbiter, the letter-complaints of the petitioner are
thus hereby NOTED.
IN VIEW THEREOF, Labor Arbiter Geobel A. Bartolabac is hereby
directed to determine with dispatch the amount still owning the
petitioner, if any, and to see to it that no further delay would hamper
the proceedings before him. Public respondent NLRC, on the other
hand, is requested to expedite the proceedings before it on the issue
of petitioner's reinstatement.18
Hence, Quimpo adds, the NLRC did not abuse its discretion when it
assumed jurisdiction over the corporation's appeal.
Quimpo likewise explains that in resolving the appeal, he took judicial
notice of the various resolutions issued by this Court and with utmost
good faith and fidelity tried to implement the directive to reinstate the
complainant to his former position or to a substantially equivalent
position. However, due to certain supervening events that transpired
after the resolution of the labor case and up to the time of execution,
reinstatement had become improbable and so it was the ruling of the
Commission that separation pay instead of reinstatement would be the
most logical, sensible and practical solution.19
As to complainant's claim that he was not furnished a copy of the
corporation's appeal memorandum, records show that a copy of the
appeal memorandum was furnished his counsel and in any event,
complainant admitted his knowledge of the existing appeal when he
filed a Reiteration of Motion to Release Monetary Award dated 20 June
2000, arguing that his monetary award should be released to him
since only the issue of reinstatement is being appealed to the
Commission.20
Furthermore, Quimpo states that complainant filed a similar complaint
with the Office of the Ombudsman for neglect of duty but the same
was dismissed. Complainant's motion for reconsideration was denied
with finality on 21 February 2002. Complainant's act of re-filing
another administrative complaint is designed primarily to harass and
intimidate him.21
He also notes that complainant already received the full satisfaction of
his monetary award which only shows that the Commission has
complied in good faith with the directive to execute the judgment
award in favor of complainant.22
Without waiting for this Court's action, complainant filed his Reply to
Both Respondent[s'] Comments23 on 23 July 2002. He substantially
reiterates the arguments he made in his complaint.
On 19 August 2002, this Court resolved, among others, to refer this
case to the Integrated Bar of the Philippines (IBP) for investigation,
report and recommendation. On 6 May 2003, the IBP submitted its
resolution adopting and approving the report and recommendation of
Investigating Commissioner Lydia A. Navarro dismissing the complaint
against respondents.24
Complainant filed a motion for reconsideration with the IBP but it was
subsequently denied since the matter had already been endorsed to
this Court and the IBP no longer had jurisdiction over the case.25
We nonetheless resolve to treat the motion for reconsideration as a
Petition for Review on Certiorari of the IBP resolution.26
We now go to the main issue at bar, i.e., whether or not respondents
are liable for their acts in deviating from the final and executory
judgment of this Court in G.R. No. 126561.
The Court is unyielding in its adjudication that complainant must be
reinstated to his former position as warehouseman or to a
substantially equivalent position. This was stated in its Decision dated
8 July 1998, reiterated in the Resolution dated 5 July 1999, and again
stressed in the Resolution dated 17 November 1999. In the latter
resolution, it was particularly expressed that:
Indeed, private respondent's [Mercury Drug Corporation] contention,
as erroneously upheld by the labor arbiter, that there is no
substantially equivalent position for petitioner's reinstatement has
been categorically discounted by this Court. We took judicial notice of
the fact that private respondent Mercury Drug Corporation operates
nationwide and has numerous branches all over the Philippines.
Petitioner, as warehouseman, occupied a clerical/rank and file position
in said company and we find it highly inconceivable that no other
substantially equivalent position exists to effect his reinstatement.27
Clearly, the Court is unwilling to accept the corporation and
respondent labor arbiter's reason that reinstatement is no longer
feasible because the position of warehouseman had already been
abolished and there is no substantially equivalent position in the
corporation.
Both respondents labor arbiter and commissioner do not have any
latitude to depart from the Court's ruling. The Decision in G.R. No.
126561 is final and executory and may no longer be amended. It is
incumbent upon respondents to order the execution of the judgment
and implement the same to the letter. Respondents have no discretion
on this matter, much less any authority to change the order of the
Court. The acts of respondent cannot be regarded as acceptable
discretionary performance of their functions as labor arbiter and
commissioner of the NLRC, respectively, for they do not have any
discretion in executing a final decision. The implementation of the final
and executory decision is mandatory.
As held in Siy v. National Labor Relations Commission and Embang:28
Once the case is decided with finality, the controversy is settled and
the matter is laid to rest. The prevailing party is entitled to enjoy the
fruits of his victory while the other party is obliged to respect the
3
court's verdict and to comply with it. We reiterate our pronouncement
in Salicdan v. Court of Appeals:29
'well-settled is the principle that a decision that has acquired finality
becomes immutable and unalterable and may no longer be modified in
any respect even if the modification is meant to correct erroneous
conclusions of fact or law and whether it will be made by the court that
rendered it or by the highest court of the land.
The reason for this is that litigation must end and terminate sometime
and somewhere, and it is essential to an effective and efficient
administration of justice that, once a judgment has become final, the
winning party be not deprived of the fruits of the verdict. Courts must
guard against any scheme calculated to bring about that result and
must frown upon any attempt to prolong the controversies.
The Court recognizes Bartolabac's efforts to adjudicate and advance
the cause of complainant, albeit erroneously. In his desire to settle the
issue of reinstatement, he determined that complainant, a high school
graduate, be appointed to the position of self-service attendant which
requires the appointee to hold a college degree, since the corporation
"failed to rationalize the need for a college graduate for the position of
self-service attendant and complainant has exhibited before [the
NLRC] that he has a reasonable degree of comprehension to
understand and perform the functions of a self-service
attendant."30 Complainant had pointed out several job openings31 in
the corporation to which he would be qualified, but respondent made
no effort to verify it. Instead, he took at face value the corporation's
representation that there were limited vacancies. It is inconceivable
that a company as large as the corporation, operating nationwide,
could not accommodate complainant and appoint him to one of its
numerous rank and file positions.
Again, we are unceasing in emphasizing that the decision in the labor
case has become final and executory since 1999. There can be no
justification for the overturning of the Court's reinstatement order by
the NLRC First Division and full satisfaction of the monetary award of
only three (3) years after the finality of the judgment.
The Court is not wont to compel the corporation to instantly restore
the position of warehouseman if it has been already abolished. Indeed,
the Court granted that complainant could be reinstated to a
substantially equivalent or similar position as a viable alternative for
the corporation to carry out.
rbl r l l l b r r
Our Constitution mandates that no person shall be deprived of life,
liberty, and property without due process of law.32 It should be borne
in mind that employment is considered a property right and cannot be
taken away from the employee without going through legal
proceedings. In the instant case, respondents wittingly or unwittingly
dispossessed complainant of his source of living by not implementing
his reinstatement. In the process, respondents also run afoul of the
public policy enshrined in the Constitution ensuring the protection of
the rights of workers and the promotion of their welfare.33
As a final word, we note that the IBP's report and recommendation
falls far short of the Court's expectations. After a lengthy account of
the allegations of the parties, the investigating commissioner
concluded its report with a two-paragraph uncommendably bare
exoneration, thus:
A detailed examination and evaluation of the evidence submitted by
the parties showed that respondents Labor Arbiter Geobel A.
Bartolabac and Commissioner Alberto R. Quimpo only performed the
duties required of them under the Rules and Procedure of Law
particularly that pertaining to the NLRC Rules and Procedures and the
Labor Code; as Labor Arbiter and Commissioner.
In fact, complainant's complaints against them before the Ombudsman
relative to the same case were dismissed with finality which office has
jurisdiction over respondents relative to the performance of their
duties as Labor Arbiter and Commissioner and not on a lawyer-client
relationship nor on the practice of the professions as lawyer or
members of the Bar.34
How the IBP investigating commissioner arrived at that supposition or
in what manner were the acts of herein respondents regularly done
cannot be extracted from its scanty determination.
WHEREFORE, premises considered, the Court finds respondents liable
for violating Canon 1 and Rule 1.01 of the Code of Professional
Responsibility. Respondents Labor Arbiter Geobel A. Bartolabac and
Commissioner Alberto R. Quimpo are hereby SUSPENDED from the
practice of law for a period of THREE (3) months.
Let a copy of this Resolution be furnished the Bar Confidant for
appropriate annotation on the records of the respondents.
SO ORDERED.
rbl r l l lbrr
Endnotes:
1
Rollo, pp. 1-5.
2
Canon 1 A lawyer shall uphold the Constitution, obey the laws of the
land and promote respect for law and for legal processes.
3
Rule 1.01 A lawyer shall not engage in unlawful, dishonest and
deceitful conduct.
4
354 Phil. 112 (1998).
5
The dispositive portion of the decision states:
"IN VIEW WHEREOF, the petition is GRANTED. Private respondent
MERCURY DRUG CORPORATION is ordered to: (1) reinstate petitioner
4
DANDY V. QUIJANO to his former or substantially equivalent position; tagger, bulker, delivery man, fork lift operator, tospro monitoring,
(2) to pay backwages from the time of petitioner's illegal dismissal warehouse clerk, and driver. Id. at 198.
until his reinstatement in the payroll on May 1, 1995, and from the 32
Const., Art. III, Sec. 1.
time petitioner's salary based on payroll reinstatement was stopped on 33
Id., Art. II, Sec. 18.
June 16, 1996 until his actual reinstatement; (3) to pay moral and 34
Rollo, pp. 223-224.
exemplary damages in the amount of fifty thousand (P50,000.00)
pesos and twenty-five thousand (P25,000.00) pesos, respectively, THIRD DIVISION
and; (4) to pay ten percent (10%) of the total amount due to
petitioner, as attorney's fees. Cost against private respondent. [G.R. No. 145800. January 22, 2003.]
SO ORDERED."
6
On 24 June 1999, respondent labor arbiter issued an Order awarding CENTRAL PANGASINAN ELECTRIC COOPERATIVE,
backwages and separation pay, in lieu of the Supreme Court's order of INC., Petitioner, v. GERONIMA MACARAEG and MARIBETH DE
reinstatement. Rollo, pp. 47-49. VERA, Respondents.
7
Id. at 6-8.
8
Motion to Cite Atty. Corazon Agustin-Counsel for Respondent for DECISION
Contempt or Indirect Contempt dated 10 April 2000; id. at 307-308.
9
Id. at 9.
10
Id. at 14-112, including Annexes "1" to "27."
PUNO, J.:
11
Id. at 16.
12
Id. at 20, the Order of Labor Arbiter Dela Cruz dated 16 April 1999
is attached as Annex "6" of respondent Bartolabac's Comment.
13
Id. at 62, Annex "12" of respondent Bartolabac's Comment. In this petition for review on certiorari, petitioner Central Pangasinan
14
Id. at 80-83, Annex "17" and "18" of respondent Bartolabac's Electric Cooperative, Inc. challenges the decision of the Court of
Comment. Appeals in CA-G.R. SP No. 55128 affirming the decision of the
15
Id. at 26. voluntary arbitrator in NCMB-RBI-PM-VA-5-03-99 ordering the
16
Id. at 27. reinstatement of respondents to petitioners employ and payment of
17
Id. at 128. their backwages.
18
Id. at 129.
19
Id. at 130. Petitioner is an electric cooperative duly organized and existing under
20
Id. at 132. Philippine laws. Respondent Geronima Macaraeg and Maribeth de Vera
21
Id. at 132-134. are employees of petitioner at its office in Area V, Bayambang,
22
Id. at 134. Pangasinan. Respondent de Vera was employed as teller whose
23
Id. at 160-208. primary duty was to accept payments from petitioners consumers in
24
Id. at 211-224. Bayambang and remit her collections to the cashier, herein co-
25
In accordance with Sec. 12 (c) of Rule 139 of the Rules of Court. Id. respondent Geronima Macaraeg. Respondent Macaraegs duty was to
at 226. deposit the daily collections of the office to petitioners account at the
26
Per Resolution dated 10 November 2003. Id. at 232. Rural Bank of Central Pangasinan in Bayambang.
27
Id. at 56. Emphasis in the original.
28
G.R. No. 158971, 25 August 2005. From January 1998 to January 1999, respondent de Vera
29
G.R. No. 128967, 20 May 2004, 428 SCRA 586, 599 citing Philippine accommodated and encashed the crossed checks of her sister, Evelyn
Veterans Bank v. Estrella, G.R. No. 138993, 27 June 2003, 405 SCRA Joy Estrada. Evelyn issued two hundred eleven (211) crossed checks
168 and Salva v. Court of Appeals, 364 Phil. 284 (1999). amounting to P6,945,128.95 payable to petitioner cooperative despite
30
Order dated 5 April 2000 by Labor Arbiter Bartolabac. Rollo, p. 95. the absence of any transaction or any outstanding obligation with
31
In his Comment dated 20 September 1999 in G.R. No. 126561, he petitioner. In turn, respondent de Vera, with the knowledge and
specified some job vacancies such as: preparer-packager, displayer, consent of respondent Macaraeg, paid the full value of these checks

5
from the cash collections of petitioner. At the end of the day,
respondents credited the checks as part of their collection and
deposited the same together with their cash collection to the account
of petitioner at the Rural Bank of Central Pangasinan.
Sometime in January 1999, Petitioner, through its Finance
Department, noticed that several checks payable to petitioner from the
collections in the Area V office were returned due to insufficiency of
funds.chanrob1e s virtua1 1aw 1ib rary
On January 19, 1999, Josefina Mandapat, Sandra Frias and Marites
Radac, petitioners Finance Manager, Chief Accountant and Legal
Assistant, respectively, confronted respondents with their discovery.
Respondent de Vera admitted that the checks were issued by her
sister and that she encashed them from the money collected from
petitioners customers.
On January 21, 1999, Mrs. Josefina Mandapat submitted a
memorandum to petitioners General Manager, Salvador M. de
Guzman, detailing their findings about the bounced checks. On
February 2, 1999, she submitted an addendum to her memorandum.
On February 4, 1999, Petitioner, through de Guzman, issued a
memorandum to respondents placing them under preventive
suspension and requiring them to explain in writing within forty-eight
(48) hours why they misappropriated cooperative funds. In the same
communication, a hearing was set on February 13, 1999 at 9:30 a.m.
at the Board Room of petitioner before Atty. Teodoro Fernandez.
In their respective Answers/Explanations, respondents denied having
misappropriated the funds of petitioner cooperative. They alleged that:
(1) the checks that bounced were redeposited with the Rural Bank of
Central Pangasinan; (2) the amount representing the face value of the
checks had been used by petitioner as of December 15, 1998; (3)
there was never any shortage in the cooperative money or funds in
their possession; and (4) they did not violate any policy of the
cooperative as they have been very religious in remitting the funds-
and money of petitioner. 1
At the scheduled hearing on February 13, 1999, Respondents, with
assistance of counsel, appeared before Atty. Teodoro Fernandez.
Respondent de Vera testified and admitted that she encashed the
checks of Evelyn Joy Estrada because the latter is her older sister and
that she has a soft spot for her; that Mrs. Estrada owns a sash factory
and that she merely wanted to help her sister meet her business
obligations; that sometime in November 1998, Mrs. Marites Radoc,
Chief Accountant of petitioner, called her attention to one check which
bounced thrice; that this check was eventually replaced by her sister
with cash; that despite the bouncing of some other checks, all checks
were eventually funded and paid to petitioner, hence, petitioner
incurred no losses in its collections; that she has worked for petitioner
for nineteen (19) years and this is the first time she has been charged
administratively by petitioner. cralaw : red
Respondent Macaraeg admitted that she knew of the accommodations
given by respondent de Vera to her sister; that she allowed her
subordinate to do it because respondent de Vera is her kumare, and
that she knew that Mrs. Estradas checks were sufficiently funded. She
worked for petitioner for twenty-two (22) years and has never had an
administrative charge.
Mrs. Josefina Mandapat, Finance Manager of petitioner, testified as
petitioners witness. She stated that she prepared a report on the
findings of their accountant regarding the encashment of Evelyn Joy
Estradas checks, and that the encashment of said checks is prohibited
under an office memorandum.
On March 10, 1999, Atty. Fernandez submitted his findings to the
General Manager of petitioner. On March 19, 1999, on the basis of said
findings and recommendation, the General Manager issued to
respondents separate notices of termination, effective April 9, 1999,
for "serious misconduct, and breach of trust and confidence reposed
on them by management." 2
Respondents, with the help of the President and representative of the
Union, Central Pangasinan Electric Cooperative (CENPELCO)
Employees Association-Tupas Local Chapter No. R01-0012, questioned
their dismissal before the National Conciliation and Mediation Board
(NCMB). They claimed that their dismissal was without just cause and
in violation of the Collective Bargaining Agreement (CBA), which
requires that the case should first be brought before a grievance
committee. Eventually, the parties agreed to submit the case to a
voluntary arbitrator for arbitration.
On August 12, 1999, the voluntary arbitrator rendered a decision in
favor of respondents, viz.: jgc:chanro bles. co m.ph
"WHEREFORE, in view of the foregoing, the undersigned arbitrator
finds and so holds:chanro b1es vi rtua l 1aw lib ra ry
6
(1) That the parties failed to comply with the provisions of the
GRIEVANCE PROCEDURE of the Collective Bargaining Agreement;
(2) Reinstate immediately upon receipt of the Decision complainants
GERONIMA MACARAEG and MARIBETH DE VERA to their former
positions without loss of seniority rights;
(3) Pay complainants their backwages to be reckoned from the time
their employment has been [sic] illegally terminated up to their actual
reinstatement based on their last salary.
Parties are hereby enjoined to be faithful with their commitment to
abide by this Decision which under their Collective Bargaining
Agreement is final, executory and not subject to appeal.
SO ORDERED." 3
Petitioner appealed to the Court of Appeals via a petition for review.
On August 17, 2000, the Court of Appeals rendered a decision
dismissing the petition and affirming the decision of the voluntary
arbitrator. Hence, the present course of action. chanrob1es vi rtua 1 1aw 1ib ra ry
Petitioner claims that: jgc:chan roble s.com.p h
"(1) The Honorable Court of Appeals gravely abused its discretion in
finding that the procedure leading to the termination of respondents
Maribeth de Vera and Geronima Macaraeg was in violation of the
provisions of the Collective Bargaining Agreement (CBA) particularly
Steps 1-4, Article XIII of the said Agreement.
(2) The Honorable Court of Appeals gravely abused its discretion in
holding that petitioner illegally terminated the services of herein
private respondents." 4
The petition is impressed with merit.
At the outset, we hold that the first issue raised in the petition
pertaining to the alleged violation of the CBA grievance procedure is
moot and academic. The parties active participation in the voluntary
arbitration proceedings, and their failure to insist that the case be
remanded to the grievance machinery, shows a clear intention on their
part to have the issue of respondents illegal dismissal directly resolved
by the voluntary arbitrator. We therefore find it unnecessary to rule on
the matter in light of their preference to bring the illegal dismissal
dispute to voluntary arbitration without passing through the grievance
machinery.
This leads us to the next issue of whether respondents were validly
dismissed. To constitute a valid dismissal from employment, two
requisites must be met, namely,: (1) it must be for a just or
authorized cause, and (2) the employee must be afforded due process.
5
We hold that there exists a valid reason to dismiss both employees.
Article 282(c) of the Labor Code allows an employer to dismiss
employees for willful breach of trust or loss of confidence. 6 Proof
beyond reasonable doubt of their misconduct is not required, it being
sufficient that there is some basis for the same or that the employer
has reasonable ground to believe that they are responsible for the
misconduct and their participation therein rendered them unworthy of
the trust and confidence demanded of their position. 7
To be sure, the acts of the respondents were clearly inimical to the
financial interests of the petitioner. During the investigation, they
admitted accommodating Evelyn Joy Estrada by encashing her checks
from its funds. They did so without petitioners knowledge, much less
its permission. These inimical acts lasted for more than a year, and
probably would have continued had it not been discovered in time. All
along, they were aware that these acts were prohibited by the Coop
Checks Policy. 8 Clearly, there was willful breach of trust on the
respondents part, as they took advantage of their highly sensitive
positions to violate their duties.
Moreover, the acts of the respondents caused damage to the
petitioner. During those times the checks were illegally encashed,
petitioner was not able to fully utilize the collections, primarily in
servicing its debts. In her memorandum 9 dated January 21, 1999,
Finance Manager Josefina Mandapat reported how petitioner is
prejudiced, thus:jgc:chan robles. com.ph
"Though the checks were funded, it constitutes a violation of Coop
Policy. Checks that are covered even by local clearing only take three
days to be converted to cash and when returned another three (3)
days to retry clearing. The cooperative is deprived of the privilege to
maximize use of its collections primarily in servicing its debts
considering the state of calamity and even at the moment wherein we
worry every time if we can payoff (sic) our NAPOCOR power bills." 10
It is not material that they did not "misappropriate any amount of
money, nor incur any shortage relative to the funds in their
7
possession." 11 The basic premise for dismissal on the ground of loss
of confidence is that the employees concerned hold positions of trust.
The betrayal of this trust is the essence of the offense for which an
employee is penalized. 12 In the case at bar, the respondents held
positions of utmost trust and confidence. As teller 13 and cashier, 14
respectively, they are expected to possess a high degree of fidelity.
They are entrusted with a considerable amount of cash. Respondent de
Vera accepted payments from petitioners consumers while respondent
Macaraeg received remittances for deposit at petitioners bank. They
did not live up to their duties and obligations.
Nor is there any doubt that petitioner observed procedural due process
in dismissing the respondents. In separate memoranda dated February
4, 1999 and signed by the General Manager (de Guzman), the
respondents were both appraised of the particular acts or omissions
constituting the charges against them. They gave their own
"answer/explanation" to the charges. They participated in the
investigations conducted at petitioners board room on February 13,
1999 at 11:30 a.m. They were represented by counsel during the
investigation. Finally, notices were sent to them on March 19, 1999,
informing them of the basis of their termination. In fine, private
respondents were given due process before they were dismissed. Time
and again, we have stressed that due process is simply an opportunity
to be heard. 15
We are aware that the respondents Macaraeg and de Vera have been
employed with the petitioner for 22 and 19 years of continuous
service, respectively, and this is the first time that either of them has
been administratively charged. Nonetheless, it is our considered view
that their dismissal is justified considering the breach of trust they
have committed. Well to emphasize, the longer an employee stays in
the service of the company, the greater is his responsibility, for
knowledge and compliance with the norms of conduct and the code of
discipline in the company. 16 Considering that they have mishandled
the funds of the cooperative and the danger they have posed to its
members, their reinstatement is neither sound in reason nor just in
principle. It is irreconcilable with trust and confidence that has been
irretrievably lost. 17
IN VIEW WHEREOF, the petition is GRANTED. The Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 55128 (affirming
the decision of the voluntary arbitrator in NCMB-RBI-PM-VA-5-03-99)
are reversed and set aside. chan rob1es virtua 1 1aw 1ib rary
SO ORDERED.
Panganiban, Sandoval-Gutierrez, Corona and Carpio Morales, JJ.,
concur.
Endnotes:
1. Rollo, pp. 6970.
2. Rollo, pp. 8586.
3. Decision, p. 11; Rollo, p. 133.
4. Petition, p. 9; Rollo, p. 16.
5. Lagatic v. NLRC, 285 SCRA 251 (1998).
6. "Art. 282. Termination by the Employer. An employer may
terminate an employee for any of the following causes: chanro b1es vi rt ual 1aw lib rary
x x x
(c) Fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative;
x x x." cralaw virtua1aw l ibra ry
7. Auxilio, Jr. v. NLRC, 188 SCRA 263 (1990).
8. Decision, p. 5; Rollo, p. 127.
9. Detailing the result of the reconciliation of bank account under the
custodianship of petitioner Cashier Geronima Macaraeg.
10. Memorandum, p. 2; Rollo, p. 51.
11. See Answer/Explanation of Geronima Macaraeg, Rollo, p. 35; See
also Answer/Explanation of Maribeth de Vera, Rollo, p. 38.
12. See Quezon Electric Cooperative v. NLRC, 172 SCRA 88 (1989).
13. See Allied Banking Corporation v. Castro, Et Al., 156 SCRA 789
(1987), and Galsim v. Philippine National Bank, 29 SCRA 293 (1969),
where we held that the position of a teller is one of utmost confidence.
14. See Metro Drug Corporation v. National Labor Relations, 143 SCRA
8
132 (1986), where we held that the position of a cashier is one of
utmost trust.
15. Maranaw Hotel & Resort Corporation (Century Park Sheraton
Manila) v. NLRC, 244 SCRA 375 (1995).
16. Citibank, N.A. v. Gatchalian, 240 SCRA 212 (1995).
17. Galsim v. Philippine National Bank, supra at 13
SECOND DIVISION
[G.R. No. 117963. February 11, 1999.]
AZCOR MANUFACTURING INC., FILIPINAS PASO and/or
ARTURO ZULUAGA/Owner, Petitioners, v. NATIONAL LABOR
RELATIONS COMMISSION (NLRC) AND CANDIDO
CAPULSO, Respondents.
DECISION
BELLOSILLO, J.:
AZCOR MANUFACTURING, INC., Filipinas Paso and Arturo Zuluaga
instituted this petition for certiorariunder Rule 65 of the Rules of Court
to assail, for having been rendered with grave abuse of discretion
amounting to lack or excess of jurisdiction, the Decision of the National
Labor Relations Commission which reversed the decision of the Labor
Arbiter dismissing the complaint of respondent Candido Capulso
against petitioners. 1
Candido Capulso filed with the Labor Arbiter a complaint for
constructive illegal dismissal and illegal deduction of P50.00 per day
for the period April to September 1989. Petitioners Azcor
Manufacturing, Inc. (AZCOR) and Arturo Zuluaga who were
respondents before the Labor Arbiter (Filipinas Paso was not yet a
party then in that case) moved to dismiss the complaint on the ground
that there was no employer-employee relationship between AZCOR
and herein respondent Capulso; that the latter became an employee of
Filipinas Paso effective 1 March 1990 but voluntarily resigned
therefrom a year after. Capulso later amended his complaint by
impleading Filipinas Paso as additional respondent before the Labor
Arbiter. chan roble s law lib rary : red
On 14 January 1992, Labor Arbiter Felipe T. Garduque II denied the
motion to dismiss holding that the allegation of lack of employer-
employee relationship between Capulso and AZCOR was not clearly
established. Thereafter, the Labor Arbiter ordered that hearings be
conducted for the presentation of evidence by both parties.
The evidence presented by Capulso showed that he worked for AZCOR
as ceramics worker for more than two (2) years starting from 3 April
1989 to 1 June 1991 receiving a daily wage of P118.00 plus other
benefits such as vacation and sick leaves. From April to September
1989 the amount of P50.00 was deducted from his salary without
informing him of the reason therefor.
In the second week of February 1991, upon his doctors
recommendation, Capulso verbally requested to go on sick leave due
to bronchial asthma. It appeared that his illness was directly caused by
his job as ceramics worker where, for lack of the prescribed
occupational safety gadgets, he inhaled and absorbed harmful ceramic
dusts. His supervisor, Ms. Emily Apolinaria, approved his request.
Later, on 1 June 1991, Capulso went back to petitioner AZCOR to
resume his work after recuperating from his illness. He was not
allowed to do so by his supervisors who informed him that only the
owner, Arturo Zuluaga, could allow him to continue in his job. He
returned five (5) times to AZCOR but when it became apparent that he
would not be reinstated, he immediately filed the instant complaint for
illegal dismissal. 2
Capulso presented the following documentary evidence in support of
his claim: (a) His affidavit and testimony to prove that he was
terminated without just cause and without due process; 3 (b)
Identification card issued by AZCOR which he continued to use even
after his supposed employment by Filipinas Paso; 4 (c) Certification of
SSS premium payments; 5 (d) SSS Member Assistance Form wherein
he stated that he worked with AZCOR from March 1989 to April 1991;
6 (e) Certification of Employee Contribution with SSS; 7 and, (f)
Payslips issued by AZCOR. 8
On the other hand, petitioners alleged that Capulso was a former
employee of AZCOR who resigned on 28 February 1990 as evidenced
by a letter of resignation and joined Filipinas Paso on 1 March 1990 as
shown by a contract of employment; in February 1991 Capulso
allegedly informed his supervisor, Ms. Emilia Apolinaria, that he
intended to go on terminal leave because he was not feeling well; on 1
9
March 1991 he submitted a letter of resignation addressed to the
President of Filipinas Paso, Manuel Montilla; and, in the early part of
June 1991 Capulso tried to apply for work again with Filipinas Paso but
there was no vacancy.
Petitioners submitted the following documentary evidence: (a) Sworn
Statement of Ms. Emilia Apolinaria and her actual testimony to prove
that respondent indeed resigned voluntarily from AZCOR to transfer to
Filipinas Paso, and thereafter, from Filipinas Paso due to failing health;
9 (b) Contract of Employment between Filipinas Paso and respondent
which took effect 1 March 1991; 10 (c) Letter of resignation of
respondent from AZCOR dated 28 February 1990, to take effect on the
same date; 11 (d) Undated letter of resignation of respondent
addressed to Filipinas Paso to take effect 1 March 1991; 12 (e) BIR
Form No. W-4 filed 6 June 1990; 13 (f) Individual Income Tax Return
of respondent for 1990; 14 and, (g) BIR Form 1701-B which was an
alphabetical list of employees of Filipinas Paso for the year ending 31
December 1990. 15
On 29 December 1992 the Labor Arbiter rendered a decision
dismissing the complaint for illegal dismissal for lack of merit, but
ordered AZCOR and/or Arturo Zuluaga to refund to Capulso the sum of
P200.00 representing the amount illegally deducted from his salary.
On appeal by Capulso, docketed as NLRC CA No. 004476-93 (NLRC
NCR 00-09-05271-91), "Capulso v. Azcor Manufacturing Inc., Filipinas
Paso and/or Arturo Zuluaga/owner," the NLRC modified the Labor
Arbiters decision by: (a) declaring the dismissal of Capulso as illegal
for lack of just and valid cause; (b) ordering petitioners to reinstate
Capulso to his former or equivalent position without loss of seniority
rights and without diminution of benefits; and, (c) ordering petitioners
to jointly and solidarily pay Capulso his back wages computed from the
time of his dismissal up to the date of his actual reinstatement. The
NLRC held in part
. . . the contract of employment (Exh. 2, p. 187, Rollo) issued to
complainant indicates that the work to be done during the period was
contracted with Filipinas Paso. The said contract was signed by the
Personnel Officer of Ascor Manufacturing Inc. Likewise, the contract
period is for six (6) months, which establishes a presumption that the
said contract could pass either as to cover the probationary period, or
job contracting, the completion of which automatically terminates
employment, whichever will work to respondents advantage should
the case be filed. However, appellant continued working with
respondent after the lapse of the contract and until the alleged
termination of employment of Appellant.
Secondly, the two resignation letters allegedly executed by appellant
are exactly worded, which only shows that the same were prepared by
respondents-appellees plus after the fact that complainant denied
having executed and signed the same.
. . . the letter of resignation (Exh. "3", p. 188, Rollo) supposed to have
been executed by complainant-appellant shows that he resigned from
Ascor Mfg., Inc. on February 28, 1990 while Exhibit "2", page 187,
Rollo, which was the contract of Employment issued to Candido
Capulso by the personnel officer of Ascor Mfg., Inc. shows that
appellant was being hired from March 1, 1990 to August 31, 1990 by
respondent Ascor Mfg., Inc. to do jobs for Filipinas Paso. A run-around
of events and dates.
The events that transpired clearly show that there was no interruption
in the service of complainant with Ascor Mfg., Inc. from April 13, 1989
up to June 1, 1991 when complainant was unceremoniously dismissed.
Considering that Ascor Mfg., Inc. and Filipinas Paso orchestrated the
events that appeared to be in order with the alleged execution of
resignation letters which was disputed by complainant and confirmed
spurious as explained above, likewise overwhelmingly show the bad
faith of respondents in the treatment of their employees.
Petitioners motion for reconsideration was denied by the NLRC
through its Resolution of 14 October 1994, hence, the instant petition.
Meanwhile, during the pendency of the case before this Court, Capulso
succumbed to asthma and heart disease. chanro bles. com : virt ual lawl ibra ry
The issue to be resolved is whether the NLRC committed grave abuse
of discretion in declaring that private respondent Capulso was illegally
dismissed and in holding petitioners jointly and solidarily liable to
Capulso for back wages.
As a rule, the original and exclusive jurisdiction to review a decision or
resolution of respondent NLRC in a petition for certiorari under Rule 65
of the Rules of Court does not include a correction of its evaluation of
the evidence but is confined to issues of jurisdiction or grave abuse of
discretion. The NLRCs factual findings, if supported by substantial
evidence, are entitled to great respect and even finality, unless
petitioner is able to show that it simply and arbitrarily disregarded the
evidence before it or had misappreciated the evidence to such an
extent as to compel a contrary conclusion if such evidence had been
10
properly appreciated. 16 We find no cogent reason to disturb the
findings of the NLRC.
Petitioners insist that Capulso was not really dismissed but he
voluntarily resigned from AZCOR and Filipinas Paso, and that there
was nothing illegal or unusual in the letters of resignation he executed.
We disagree. To constitute a resignation, it must be unconditional and
with the intent to operate as such. There must be an intention to
relinquish a portion of the term of office accompanied by an act of
relinquishment. 17 In the instant case, the fact that Capulso signified
his desire to resume his work when he went back to petitioner AZCOR
after recuperating from his illness, and actively pursued his case for
illegal dismissal before the labor courts when he was refused
admission by his employer, negated any intention on his part to
relinquish his job at AZCOR.
Moreover, a closer look at the subject resignation letters readily
reveals the following: (a) the resignation letter allegedly tendered by
Capulso to Filipinas Paso was identically worded with that supposedly
addressed by him to AZCOR; (b) both were pre-drafted with blank
spaces filled up with the purported dates of effectivity of his
resignation; and, (c) it was written in English, a language which
Capulso was not conversant with considering his low level of
education. No other plausible explanation can be drawn from these
circumstances than that the subject letters of resignation were
prepared by a person or persons other than Capulso. And the fact that
he categorically disowned the signatures therein and denied having
executed them clearly indicates that the resignation letters were
drafted without his consent and participation.
Even assuming for the sake of argument that the signatures were
genuine, we still cannot give credence to those letters in the absence
of any showing that Capulso was aware that what he was signing then
were in fact resignation letters or that he fully understood the contents
thereof. Having introduced those resignation letters in evidence, it was
incumbent upon petitioners to prove clearly and convincingly their
genuineness and due execution, especially considering the serious
doubts on their authenticity. Petitioners miserably failed in this
respect.
The Labor Arbiter held that Capulsos repudiation of the signatures
affixed in the letters of resignation was weakened by the fact that he
filed the case only after almost four (4) months from the date of his
dismissal. But it should be noted that private respondent still wanted
his job and thus, understandably, refrained from filing the illegal
dismissal case against his employer so as not to jeopardize his
chances of continuing with his employment. True enough, when it
became apparent that he was no longer welcome at AZCOR he
immediately instituted the instant case.
In addition, an action for reinstatement by reason of illegal dismissal is
one based on an injury which may be brought within four (4) years
from the time of dismissal pursuant to Art. 1146 of the Civil Code.
Hence, Capulsos case which was filed after a measly delay of four (4)
months should not be treated with skepticism or cynicism. By law and
settled jurisprudence, he has four (4) years to file his complaint for
illegal dismissal. A delay of merely four (4) months in instituting an
illegal dismissal case is more than sufficient compliance with the
prescriptive period. It may betray an unlettered mans lack of
awareness of his rights as a lowly worker but, certainly, he must not
be penalized for his tarrying.
In illegal dismissal cases like the present one, the onus of proving that
the dismissal of the employee was for a valid and authorized cause
rests on the employer 18 and failure to discharge the same would
mean that the dismissal is not justified and therefore illegal. 19
Petitioners failed in this regard.
Petitioners also contend that they could not be held jointly and
severally liable to Capulso for back wages since AZCOR and Filipinas
Paso are separate and distinct corporations with different corporate
personalities; and, the mere fact that the businesses of these
corporations are interrelated and both owned and controlled by a
single stockholder are not sufficient grounds to disregard their
separate corporate entities.
We are not persuaded. The doctrine that a corporation is a legal entity
or a person in law distinct from the persons composing it is merely a
legal fiction for purposes of convenience and to subserve the ends of
justice. This fiction cannot be extended to a point beyond its reason
and policy. 20 Where, as in this case, the corporate fiction was used as
a means to perpetrate a social injustice or as a vehicle to evade
obligations or confuse the legitimate issues, it would be discarded and
the two (2) corporations would be merged as one, the first being
merely considered as the instrumentality, agency, conduit or adjunct
of the other. 21
In this particular case, there was much confusion as to the identity of
Capulsos employer whether it was AZCOR or Filipinas Paso; but, for
11
sure, it was petitioners own making, as shown by the following: First,
Capulso had no knowledge that he was already working under
petitioner Filipinas Paso since he continued to retain his AZCOR
Identification card; Second, his payslips contained the name of AZCOR
giving the impression that AZCOR was paying his salary; Third, he was
paid the same salary and he performed the same kind of job, in the
same work area, in the same location, using the same tools and under
the same supervisor; Fourth, there was no gap in his employment as
he continued to work from the time he was hired up to the last day of
his work; Fifth, the casting department of AZCOR where Capulso was
working was abolished when he, together with six (6) others,
transferred to Filipinas Paso; and Sixth, the employment contract was
signed by an AZCOR personnel officer, which showed that Capulso was
being hired from 1 March 1990 to 31 August 1990 by AZCOR to do
jobs for Filipinas Paso. The employment contract provided in part: chan rob1e s virtual 1aw l ibra ry
The contract is for a specific job contract only and shall be effective for
the period covered, unless sooner terminated when the job contract is
completed earlier or withdrawn by client, or when the employee is
dismissed for just and lawful causes provided by law and the
companys rules and regulations, in which case the employment
contract will automatically terminate.
As correctly observed by the NLRC, the contract was only for six (6)
months, which could pass either as a probationary period or a job
contracting, the completion of which automatically terminated the
employment. Observe further, however, that respondent continued
working even after the lapse of the period in the contract for whom
it was not clear. It may be asked: Was the six (6)-month period
probationary in nature, in which case, after the lapse of the period he
became a regular employee of Filipinas Paso? Or was the period job-
contracting in character, in which case, after the period he was
deemed to have come back to AZCOR?
Interestingly, petitioners likewise argue that it was grave abuse of
discretion for the NLRC to hold them solidarily liable to Capulso when
the latter himself testified that he was not even an employee of
Filipinas Paso. 22 After causing much confusion, petitioners have the
temerity to use as evidence the ignorance of Capulso in identifying his
true employer. It is evident from the foregoing discussion that Capulso
was led into believing that while he was working with Filipinas Paso,
his real employer was AZCOR. Petitioners never dealt with him openly
and in good faith, nor was he informed of the developments within the
company, i.e., his alleged transfer to Filipinas Paso and the closure of
AZCORs manufacturing operations beginning 1 March 1990. 23
Understandably, he sued AZCOR alone and was constrained to implead
Filipinas Paso as additional respondent only when it became apparent
that the latter also appeared to be his employer.
In fine, we see in the totality of the evidence a veiled attempt by
petitioners to deprive Capulso of what he had earned through hard
labor by taking advantage of his low level of education and confusing
him as to who really was his true employer such a callous and
despicable treatment of a worker who had rendered faithful service to
their company.
However, considering that private respondent died during the
pendency of the case before this Court, reinstatement is no longer
feasible. In lieu thereof, separation pay shall be awarded. With respect
to the amount of back wages, it shall be computed from the time of
private respondents illegal dismissal up to the time of his death.
WHEREFORE, the petition is DISMISSED. The NLRC Decision of 12
September 1994 is MODIFIED. Petitioners AZCOR MANUFACTURING,
INC., FILIPINAS PASO and ARTURO ZULUAGA are ORDERED to pay,
jointly and solidarily, the heirs of private respondent Candido Capulso
the amounts representing his back wages, inclusive of allowances and
other benefits, and separation pay to be computed in accordance with
law.
SO ORDERED. chanrobles. com : virt ual law l ibra ry
Puno, Mendoza, Quisumbing and Buena, JJ., concur.
Endnotes:
1. Decision penned by Commissioner Rogelio I. Rayala, concurred in
by Commissioner Victoriano R. Calaycay.
2. TSN, 5 June 1992, p. 35; Records, p. 89;
3. Exh. "A;" Records, pp. 108-109.
4. Exh. "B;" id., p. 111.
5. Exh. "C;" id., p. 172.
6. Exh. "D;" id., p. 173.
7. Exh. "E;" id., p. 174.
12
 No. 81298 reversing the Decision3 of the National Labor Relations
8. Exhs. "F," "G" and "H;" id., pp. 173, 176-177. Commission (NLRC) in NLRC-NCR (South) Case No. 30-07-03393-01.
Pacific Plans, Inc. (PPI) is a domestic corporation engaged in the
9. Exh. "11;" id., pp. 183-185. business of selling pre-need plans, such as educational, pension, and
memorial plans.4 It maintains regional offices throughout the
10. Exh. "2;" id., p. 188. Philippines. At the time material to this case, Metro Manila regional
offices were divided into two sales divisions - the South Sales Division
11. Exh "3;" id., p. 188. and the North Sales Division. Metro Manila VI was part of the North
Sales Division.5Among the corporate officers of PPI were Geoffrey
12. Exh. "4;" id., p. 188. Martinez, Executive Vice-President for Finance; Luciano Abia, Senior
Assistant Vice-President, Metro Manila Marketing Division; and Atty.
13. Exh. "5;" id., p. 190. Manuel Reyes, the Head of the Legal Department.6 Roy Padiernos then
occupied the position of Regional Manager of Metro Manila VI.7
14. Exh. "6;" id., p. 191. PPI solicited subscribers and buyers of its pre-need plans through
clusters of sales associates. One of them was Ruth Padiernos, wife of
15. Exh. "7;" id., p. 192. Roy Padiernos.8
Sometime in October 1994, PPI hired Agripino Molina as Regional
16. Loadstar Shipping Co., Inc. v. Gallo, G.R. No. 102845, 4 February Manager of Metro Manila VI, replacing Roy Padiernos who was
1994, 229 SCRA 659. promoted as First Vice-President for Marketing Operations. As Regional
Manager, Molina performed both administrative and marketing
17. Words and Phrases, Vol. 37, State v. Huff, 87 N.E. 141, 144. functions, whose duties and responsibilities included the following:
A. formulating and recommending short and long range marketing
18. Art. 277, Labor Code, as amended. plans for the Region and executing approved plans;
b. generating new and conserving existing pre-need plan businesses;
19. Agoy v. NLRC, G.R. No. 112096, 30 January 1996, 252 SCRA 588, c. motivating, training, and developing a dedicated and effective
594-595. counselor force;
d. conducting researches to determine sales potentials and share of
20. 13 Am. Jur. 2d 559. the market, pricing, and profitability of Company's products,
competition and the directing of product development for the Region;
21. See Pabalan v. National Labor Relations Commission, G.R. No. e. hiring and terminating counselors, unit managers or group
89879, 20 April 1990, 184 SCRA 495, 500. managers in accordance with policies previously laid out;
f. recommending the creation of additional positions or termination of
22. Rollo, p. 7. services of any employee within the Region;
g. recommending promotions or changes in salaries of personnel
23. AZCOR manifested for the first time before this Court that it has within the Region and lateral shifts of supervisor, their assistants,
already ceased its business operations. understudies of positions of equal rank;
FIRST DIVISION h. training and developing understudies for each position within the
[G.R. NO. 165476 : March 10, 2006] Region to provide immediate replacement whenever vacated;
AGRIPINO V. MOLINA, Petitioner, v. PACIFIC PLANS, i. changing methods and procedures not affecting the other Regions,
INC., Respondent. provided, however, that radical changes should first be cleared with
DECISION [the] superior;
CALLEJO, SR., J.: j. controlling the operations of the Region and establishing a system of
Before us is a Petition for Review on Certiorari assailing the periodic work reporting;
Decision1 and Resolution2 of the Court of Appeals (CA) in CA-G.R. SP k. coordinating the Region's activities with those of the other Regions;

13
l. keeping [the] superior informed of [the] Region's activities and
specially of [the] decision on matters for which he may be held
responsible;
m. realizing the Company's objective for service, growth, and profit;
n. establishing and maintaining harmonious and dignified relationship
with plan holders, counselors, employees, the public, government
instrumentalities, other pre-need plan companies; [and]
o. further enhancing the prestige of the Company and maintaining its
position of leadership in its field.9
Since Metro Manila VI was consistently on top in terms of nationwide
sales and productivity, Molina was promoted Assistant Vice-President
with the same functions as those of a regional manager of the same
sales region.10
Caritas Health Shield, Inc. (Caritas for brevity), a health maintenance
organization (HMO) engaged in selling health and hospitalization plans,
was established on December 16, 1998. Geoffrey Martinez resigned as
Executive Vice-President of PPI and became the President and Chief
Executive Officer of Caritas.11 Among the incorporators and members
of the Board of Directors were Luciano Abia and Atty. Manuel
Reyes.12 Molina was hired as Assistant Vice-President and Marketing
Head of Area 10. His wife, Fe Molina, was the head of a sales agency
of Caritas.
In the meantime, from February 2000, there was a considerable
decrease in the sales output production of PPI's Metro Manila Region
VI.13
On March 21, 2000, Molina received a Memorandum from PPI, through
its Senior Assistant Vice-President for Human Relations, Patricio A.
Picazo, informing him that, based on written reports, he committed the
following: 1) recruiting and pirating activities in favor of Caritas, in
particular, initiating talks and enticing associates to join Caritas, and a
number of associates have already signed up; 2) he called for a
meeting with his associates sometime in November 1999, and solicited
contributions from them for the bill but later asked for reimbursement
from the company; and 3) acts of misdemeanor on several occasions,
such as coming to the office under the influence of liquor, initiating a
smear campaign against PPI, and other acts inimical to the company's
interest.14 Molina was also required to submit, on March 23, 2000, a
written explanation why he should not be held administratively liable
for said acts which, it opined, might constitute conduct unbecoming of
an officer, conflict of interest, and breach of trust and confidence.
Molina was also informed that he was preventively suspended pending
formal investigation effective immediately until April 24, 2000.15
In a letter addressed to Picazo dated March 22, 2000, Molina
categorically denied the acts attributed to him. He, however,
requested that he be furnished with copies of the alleged written
reports to enable him to prepare the required written
explanation.16 However, instead of acceding to the request of copies of
the written reports, Picazo wrote a letter dated April 3, 2000, citing the
particulars of the charges against Molina, thus:
I. Conflict of Interest
1. Recruiting and pirating activities in favor of Caritas Health Shield,
Inc.
* You have acted as conduit for Caritas in recruiting/pirating Mr. Restie
Acosta on March 04, 2000 and Ms. Eppie Acosta on March 06, 2000.
*Your failure to stop and/or tolerating your wife's activities in
recruiting for Caritas Ms. Lennie Gatmaitan who belongs to Ms. Celeste
Villena, a PPI GA.
II. Misappropriation of Funds
1. Solicitation of associates' personal funds in the amount of P200.00
per person, to which 12 persons contributed for a total P2,400.00, for
payment of official function during the meeting held at Barrio Fiesta
last November 27, 1999. Amount solicited was subsequently
reimbursed from the company but not returned to the associates
concerned.
III. Dereliction of Duties
1. You failed to prevent associates from leaving the company in favor
of competitors, thus causing demoralization among your sales
associates.
2. You even encouraged associates to transfer to Caritas.
IV. Conduct unbecoming of a Company Officer
1. Often reporting to office under the influence of liquor.
2. Sowing intrigue in the case of Vilma del Rosario which almost
caused her early retirement from the company and transfer to Caritas.
3. Sowing intrigues between Mr. Roy Padiernos and Mr. Abia.
4. Showing disrespect to immediate superior, Mr. Roy Padiernos, by
shouting at him and walking out in one of the meetings called by him
after the retirement of Atty. Haceta.17
During the investigation the following day, April 4, 2000, Molina
reiterated his request to be provided with a copy of the written
reports.18 Picazo denied the request in a Memorandum dated April 6,
2000, and reiterated his order for Molina to submit his written
explanation on April 11, 2000, and to address his concerns during the
investigation scheduled on April 14, 2000.19 Molina failed to submit
any written explanation. On April 24, 2000, PPI issued a Memorandum
advising Molina that he would be reinstated in the payroll effective
April 25, 2000 without requiring him to report for work during the
pendency of his investigation.20
Molina filed a "Motion to Dismiss Complaints and Motion for Full
Reinstatement" on May 2, 2000.21 He asserted that the charges should
be dismissed since he was compelled to prepare a written explanation
14
on the basis of "summarized specific acts," denying him the right to be
informed of the exact charges and to confront those who made written
reports against him. As to the issue of reinstatement, he alleged that
he should be allowed to report for work, conformably with Rule XIV,
Section 4 of the Implementing Rules of the Labor Code.22
On May 11, 2000, Picazo wrote Molina that his motion to dismiss the
charges would be resolved after the investigation. He was warned that
his non-appearance at the investigation would be considered a waiver
of his right to be heard.23
On the same day, May 11, 2000, Abia issued an inter-office
Memorandum announcing the appointment of Sercy F. Picache as the
Officer-In-Charge (OIC) for Metro VI and XVI effective May 6, 2000.24
Molina and his counsel attended the May 19, 2000 investigation and
filed a Motion to Suspend Proceedings,25 praying that the
administrative investigation be deferred until the resolution of the
"prejudicial" issues raised in his previous motion.26
When Picazo failed to respond, Molina filed, on June 1, 2000, a
complaint for damages with a prayer for a temporary restraining order
and preliminary injunction based on Article 19 of the New Civil Code.
PPI filed a Motion to Dismiss, maintaining that the courts have no
jurisdiction over matters arising from employee-employer relationship.
The trial court denied the motion as well as PPI's motion for
reconsideration.27
Meanwhile, in letter dated June 13, 2000, Molina was notified of the
termination of administrative investigation. PPI considered his failure
to submit a written explanation as a waiver of his right to be heard,
and as such, the investigating committee had evaluated the evidence
at hand and submitted its recommendations to the "higher
management" for decision. Also, it confirmed the denial of his Motion
to Suspend Proceedings.28
On June 23, 2000, the trial court issued an Order granting Molina's
prayer for temporary restraining order, which was later made
permanent per its Order dated July 12, 2000. The motion for
reconsideration filed by PPI on July 26, 2000 was likewise denied.
Thereafter, it filed a petition for certiorari before the CA, assailing the
writ of preliminary injunction issued by the RTC and its order denying
the motion to dismiss the complaint. On July 16, 2001, the CA
rendered judgment in favor of PPI and nullified the writ of preliminary
injunction issued by the RTC as well as the order denying the motion
of PPI for the dismissal of the complaint.29
On July 30, 2001, PPI resolved to dismiss Molina from employment on
its finding that the latter violated its standard operating procedure.30
Molina forthwith filed a complaint with the NLRC against PPI and
Alfredo C. Antonio, Patricio A. Picazo, and Certerio B. Uy, in their
capacity as President, Senior Assistant Vice-President of Human
Resources Development, and Division Head, respectively, for illegal
dismissal and illegal suspension with claim for monetary benefits.
In his Position Paper,31 Molina principally argued that he was denied
the right to due process due to the failure of PPI to furnish him a copy
of the written reports of the sales associates and co-employees, the
basis of the accusations against him. Since an OIC for his position was
already appointed even before all his pending motions were resolved,
he surmised that there were really no such reports, and that the
alleged accusations were merely concocted in order to replace him
with someone close to Picazo. Molina maintained that since he was
denied the opportunity to dispute the authenticity and substantive
contents of the reports, his alleged violations of company rules and
policies were hearsay and, therefore, lacked probative value. Besides,
the termination of his employment was made without the 30-day prior
notice; his dismissal from employment took effect immediately, only
six days after PPI received the CA decision decreeing that the NLRC
has the rightful jurisdiction over the case. Thus, he prayed for the
following relief:
1. Total Money Claims
a) Salary with (overriding) commission from March 21 to April 24,
2000 - suspended w/o pay - P45,000.00 (P25,000[.00] mo. salary
& P20,000[.00] [overriding])
b) Unpaid (overriding) commission from April 25, 2000 to present
- P400,000[.00]
c) Unpaid salary from August 1, 2001 to present - P125,000[.00]
d) One mo. salary for every yr. of service in lieu of reinstatement - 7
years = P175,000.00
2. Leave Credits - P100,000.00 for 7 years
3. Profit Bonus for Year 2000 & 2001 - P400,000.00
4. Moral Damages - P300,000.00
5. Exemplary Damages - P500,000.00
6. Actual Damages - for lifetime medical attendance and medicines at
16 more years life expectancy - P1,249,384.00
7. Attorney's Fees - P300,000.00
8. Amount debited from complainant's ATM [as partial payment for
hospitalization expenses incurred by him which PPI had advanced]
- P12,000.00
9. Retention of complainant's car, as additional penalty for illegal
dismissal.32
For its part, PPI stressed that Caritas was its competitor in the pre-
need plans business, and that Molina and his wife recruited and
enticed some of the sales associates of PPI to work for Caritas, in
violation of its policy against conflict of interest. Some of these sales
associates were the spouses Eppie and Restie Acosta, Lenita
Gatmaitan, Lolita Casaje, Lydia Magalso, Lydia San Miguel, and Alice
15
Halili, and including Vilma del Rosario, the secretary of Roy Padiernos.
PPI, likewise, averred that Molina had the habit of coming to the office
under the influence of liquor; he constantly shouted to lady employees
and solicited money from his sales associates in connection with an
official company function without returning the same after PPI
reimbursed him for the expenses incurred; disseminated intrigues and
created divisiveness among the employees and PPI's senior officers;
and disrespected Padiernos, his superior, by shouting at him during
one of the meetings with other senior officers, and walked out of the
meeting afterwards. Supporting its claims that Molina committed
breach of trust, serious misconduct, fraud, and gross neglect of duty
by reason thereof, PPI appended to its position paper the
statements/affidavits of Marivic Uy, Ruth and Roy Padiernos, Eppie and
Restie Acosta, Celeste Villena, and Vilma del Rosario.33
On the claim of Molina that he was denied due process, PPI averred
that he was given sufficient opportunity to present his personal
submissions before finally issuing the notice of dismissal but Molina
persistently refused to submit his explanation.34 PPI further argued
that he was not entitled to the payment of 13th and 14th month
salaries, overriding commission, profit bonus, actual, moral or
exemplary damages, and attorney's fees. PPI maintained that, under
Article 217(a) of the Labor Code, as amended, and the ruling of this
Court in Baez v. Valdevilla,35 Molina should be held liable
for P1,000,000 as moral damages and an amount not less
than P428,400.00 for the salary he received during the time when the
restraining order/ writ of injunction was erroneously enforced.36
In his Reply, Molina averred that the affidavits submitted by PPI were
antedated since he was never furnished copies of said
reports/affidavits despite demands. PPI even failed to present the
reports/affidavits before the RTC where his complaint for damages
against PPI and its officers was pending. He and Roy Padiernos had
been at odds because the latter appointed his brother and wife as
agency manager and group manager of PPI to which he objected.
Molina averred that the P200.00 collected from each of the employees
of PPI during their luncheon meeting was a voluntary contribution, and
that they spent P4,000.00, more than the amount collected from the
employees. He contended that he had no motive to recruit sales
associates or employees of PPI to be employed by Caritas because the
depletion of sales associates would diminish his effectiveness as an
area manager, including his overriding commission, profit bonus and
fringe benefits. He admitted that he may have raised his voice in the
heat of arguing a point during meetings, but averred that it should not
be considered as disrespect or misdemeanor.
Molina further emphasized that Caritas was not a competitor of PPI, as
the former was engaged in selling health care and is supervised by the
Department of Health (DOH), while the latter is into the business of
selling pre-need plans and supervised by the Securities and Exchange
Commission (SEC). Finally, he averred that the so-called "associates"
of PPI were not actually employees but "independent journeymen" who
derived income on commission basis, free to engage in any kind of
selling activities not in direct competition with PPI.
Molina admitted having had drinking sessions with Certerio Uy, Ilustre
Acosta and Reynaldo Villena, who provided the hard liquor and
pulutan, but only after office hours. He claimed that his officemates
mistook him for being drunk when he went to his office even after
office hours because of his "mestizo complexion."
In its response, PPI averred that, based on the sales data, the acts of
Molina caused demoralization of the sales associates, resulting in a
sudden decrease of the region's output from P343,009,643.00 in 1998
to P263,099,773.00 in 1999, and P228,752,090.00 in 2000.37 PPI
insisted that he should be held liable for not less
than P507,348.00, P2,000,000, and P1,000,000 as actual, moral and
exemplary damages, and attorney's fees, respectively,
and P273,600.00 which was the balance on his car plan agreement
with PPI.38
In his Rejoinder39 and Sur-Rejoinder40 Molina submitted the affidavit of
Geoffrey Martinez, who belied the reports of Uy, Villena, Del Rosario,
and the spouses Padiernos and Acosta.41 He also appended the
affidavits of Natividad Gatchalian,42 San Miguel,43 Gatmaitan,44 and
Magalso,45 who all disputed, in one way or another, Molina's alleged
violations. To counter the imputations of conflict of interest, Molina
also alleged that Abia and Atty. Reyes were incorporators of
Caritas,46 and that Villena had in her possession a license to sell
Caritas products.47 With regard to the declining sales output of his
region, Molina attributed the same to the Asian regional crisis that hit
the Philippines sometime in 1997. He noted, however, that the same
records revealed that despite the financial bane, Metro VI still
managed to be on top from 1998 up to 2000 in terms of its sales
relative to the other regions.
Molina denied any liability for the car plan, claiming that he already
settled the obligation when PPI demanded full payment as, in fact, all
the papers related thereto, including the Release of Mortgage, were
already in his possession.
In its Sur-Rejoinder,48 PPI stressed its claim that Caritas was a
business competitor, as may be inferred from the benefits available
under its health care agreement and the pre-need contract of PPI.
Particularly with regard to the pension plan contract, it noted the
following similarities: (a) Caritas also provides Term Life Insurance,
Accidental Death Insurance, Credit Life Insurance, and Waiver of
Installment Due to Disability; (b) there are similarities in the
16
provisions on contract price, grace period, cancellation, reinstatement,
and transfer and termination; and (c) unlike other health care
programs that provide a one-year coverage, renewable every year
thereafter, Caritas offers a continuous five year coverage and sells the
same in units payable in five-year installment basis, with maturity
period and guaranteed return of investment in the form of Full-Term
Medical Expense Fund computed at P10,000.00 for every unit
purchased with increment of 10% yearly after the maturity period,
which may be withdrawn in cash by its member. It stressed that this
was similar to the pension program offered by PPI which was also sold
in per unit basis, payable by installment in certain number of years or
lump sum payment, and upon maturity also gives P10,000.00 pension
benefit per unit purchased by the plan holder. With respect to the
alleged interest of Atty. Reyes with Caritas, PPI adduced in evidence a
Deed of Sale to prove that as early as February 1999 he had already
divested his stockholdings in Caritas.49
On November 18, 2002, Labor Arbiter Roma C. Asinas rendered a
Decision50 dismissing the complaint and the counterclaims for lack of
merit. The labor arbiter ruled that Molina was lawfully dismissed from
his employment for serious misconduct in office and fraud or willful
breach of trust and confidence. It declared that Molina's mere denial of
the charges against him did not overthrow the overwhelming evidence
against him tending to show that he committed the allegations against
him. Moreover, his wife was then an agency manager of Caritas, and
some PPI sales associates were with Caritas because they were
recruited by Molina. The labor arbiter also ruled that other employees
of respondent attested to the fact that they were being recruited and
enticed by the complainant to join Caritas. This act of pirating
constituted serious misconduct in office, fraud or willful breach of trust
and confidence, which are just causes for termination of employment
under Article 282 of the Labor Code, as amended. As such, PPI could
not legally be compelled to continue Molina's employment due to
breach of trust.
The labor arbiter likewise held that Molina was afforded his right to
due process, but that he refused to give an answer to the charges
leveled against him, and instead insisted that he be furnished a copy
of the alleged reports against him. Since he was given ample
opportunity to answer the charges and explain his side during the
investigation, and a formal or trial-type hearing is not at all times
essential, Molina's right to due process was not violated. The labor
arbiter stressed that the requirements of due process are satisfied
where the parties are afforded fair and reasonable opportunity to
explain their side of the controversy at hand.51
Molina appealed the decision to the NLRC, which rendered judgment in
his favor. The NLRC reversed the decision of the Labor Arbiter and
ordered Molina's immediate reinstatement to his former position as
Assistant Vice President without demotion in rank and salary; and the
payment of his backwages from August 1, 2001 up to his actual
reinstatement, and other accrued monetary benefits. However, the
NLRC denied all other claims for damages.52
According to the NLRC, the charges of coming to the office under the
influence of liquor and making PPI reimburse the expenses already
paid by Molina's co-employees were not supported by the records. The
"loss of trust and confidence" had no factual basis since the alleged
acts of Molina did not result to any loss in favor of PPI.
Anent Molina's recruitment activities, the NLRC ratiocinated that PPI
failed to show that Caritas was a competitor of PPI. Caritas caters to
the health care needs of its clients while PPI to the pre-need (pension,
educational, and memorial) requirements of its plan holders. Any
similarity between PPI and Caritas' extra features like term life
insurance, accidental death insurance, credit life insurance, and waiver
of installment due to disability, did not ipso facto make Caritas a
competitor of PPI. Thus, there was no conflict of interest in Molina's act
of trying to recruit counselors for Caritas to help his wife. Moreover,
PPI failed to establish that recruiting for Caritas affected Molina's
decisions in the performance of his duties with PPI. According to the
NLRC, the drop in the sales and productivity of complainant's area of
responsibility may be due to market forces and depressed economic
condition at that time; absent any clear and convincing proof, it cannot
be attributed to the alleged acts of Molina which constituted willful
breach of trust or confidence.53
PPI filed a motion for reconsideration, and appended a Letter dated
June 13, 2002 from the SEC to Caritas, indicating that its HMO Plan
was similar to the previous plans offered by pre-need companies,
hence, under the regulatory suspension of the SEC;54 another letter of
SEC ordering Caritas to immediately desist from selling its HMO plan
with the full term medial expense fund;55 and the letter of Caritas,
through counsel, endorsing the objectionable features of the HMO
plan.56
The NLRC, however, was not persuaded, and resolved to deny PPI's
motion in its Order dated September 30, 2003.57 On November 19,
2003, the NLRC declared its Decision final and executory as of
November 14, 2003.58
PPI filed a Petition for Certiorari with the CA for the nullification of the
decision and resolution of the NLRC and the reinstatement of the
decision of the Labor Arbiter.59
On August 13, 2004, the CA rendered a decision reversing the Decision
and Resolution of the NLRC, and reinstating the November 18, 2002
Decision of the Labor Arbiter.60 Later, the CA denied Molina's Motion
for Reconsideration61 in its Resolution dated September 27, 2004.62
17
The issues for resolution are the following: whether the decision of the
NLRC was already final and executory when PPI filed its petition
for certiorari in the CA; and whether the NLRC committed grave abuse
of discretion amounting to excess or lack of jurisdiction in issuing the
assailed decision and resolution.
On the first issue, we find and so hold that the decision of the NLRC
had become final and executory when PPI filed its Petition
for Certiorari in the CA. PPI received a copy of the NLRC Decision on
July 11, 2003 and filed the Motion for Reconsideration thereof on July
18, 2003, which motion was denied on September 30, 2003. Under
Rule VII, Section 2 of the NLRC Omnibus Rules of Procedure, the
decision of the NLRC becomes final and executory after ten (10)
calendar days from receipt of the same. PPI received a copy of the
NLRC decision on November 30, 2003; hence, such decision became
final and executory on December 3, 2003. Nonetheless, the Court
ruled in St. Martin Funeral Home v. NLRC63 that, although the 10-day
period for finality of the NLRC decision may have elapsed as
contemplated in the last paragraph of Section 223 of the Labor Code,
the CA may still take cognizance of and resolve a petition
for certiorari for the nullification of the decision of the NLRC on
jurisdictional and due process considerations. Indeed, the remedy of
the aggrieved party from an adverse decision of the NLRC is to timely
file a motion for reconsideration as a precondition for any further or
subsequent remedy, and if the motion is denied, such party may file a
special civil action in accordance with law and jurisprudence
considering that these matters are inseparable in resolving the main
issue of whether the NLRC committed grave abuse of discretion.
The Labor Arbiter and the NLRC act in quasi-judicial capacity in
resolving cases after hearing and on appeal, respectively. On the
presumption that they have already acquired expertise in their
jurisdiction, which is confined on specific matters, their findings of
facts are oftentimes accorded not only with respect but even finality if
supported by substantial evidence. However, in spite of the statutory
provision making "final" the decision of the NLRC, the Court has taken
cognizance of petitions challenging such decision where there is a clear
showing that there is want of jurisdiction, grave abuse of discretion,
violation of due process, denial of substantial justice, or erroneous
interpretation of law.64
In this case, the Labor Arbiter declared that there is substantial
evidence on record warranting the dismissal of petitioner as Assistant
Vice President for serious misconduct in office, fraud or willful breach
of trust and confidence. The NLRC disagreed with the Labor Arbiter
and reversed the latter's findings. The CA, for its part, concurred with
the findings of the Labor Arbiter. In view of the discordance between
the findings of the Labor Arbiter and the CA on one hand, and the
NLRC on the other, there is a need for the Court to review the factual
findings and the conclusions based on the said findings. As this Court
held in Diamond Motors Corporation v. Court of Appeals:65
A disharmony between the factual findings of the Labor Arbiter and the
National Labor Relations Commission opens the door to a review
thereof by this Court. Factual findings of administrative agencies are
not infallible and will be set aside when they fail the test of
arbitrariness. Moreover, when the findings of the National Labor
Relations Commission contradict those of the labor arbiter, this Court,
in the exercise of its equity jurisdiction, may look into the records of
the case and reexamine the questioned findings.66
Article 282 of the Labor Code of the Philippines provides:
Art. 282. Termination by employer. - An employer may terminate an
employment for any of the following causes:
A. Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his
work;
b. Gross and habitual neglect by the employee of his duties;
c. Fraud or willful breach by the employee of his duties 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 cralawlib ra ry
e. Other causes analogous to the foregoing.
Misconduct has been defined as improper or wrong conduct; the
transgression of some established and definite rule of action; a
forbidden act, a dereliction of duty, unlawful in character and implies
wrongful intent and not mere error of judgment. The misconduct to be
serious must be of such grave and aggravated character and not
merely trivial and unimportant. Such misconduct, however, serious,
must nevertheless, be in connection with the employee's work to
constitute just cause for his separation.67
The loss of trust and confidence, in turn, must be based on the willful
breach of the trust reposed in the employee by his employer. Ordinary
breach will not suffice. A breach of trust is willful if it is done
intentionally, knowingly and purposely without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently.68
The Court has laid down the guidelines for the application of the
doctrine for loss of confidence, thus:
1. the loss of confidence must not be simulated;
2. it should not be used as a subterfuge for causes which are illegal,
improper or unjustified;
3. it may not be arbitrarily asserted in the face of overwhelming
evidence to the contrary;
18
4. it must be genuine, not a mere afterthought, to justify earlier action
taken in bad faith; andcralawlib rary
5. the employee involved holds a position of trust and confidence.69
In Samson v. Court of Appeals,70 the Court enumerated the conditions
for one to be considered a managerial employee:
(1) Their primary duty consists of the management of the
establishment in which they are employed or of a department or
subdivision thereof;
(2) They customarily and regularly direct the work of two or more
employees therein;
(3) They have the authority to hire or fire other employees of lower
rank; or their suggestions and recommendations as to the hiring and
firing and as to the promotion or any other change of status of other
employees are given particular weight.71
As a general rule, employers are allowed wide latitude of discretion in
terminating the employment of managerial personnel.72 The mere
existence of a basis for believing that such employee has breached the
trust and confidence of his employer would suffice for his dismissal.73
In this case, petitioner was not a mere employee of respondent. He
was the Assistant Vice-President with the same functions of a regional
manager of the same sales region, Metro Manila VI. Taking into
account his job description, he was one of the top managers of the
respondent, tasked to perform key and sensitive functions in the
interest of his employer and, thus, bound by the more exacting work
ethic.
We find, however, that the charge of misappropriation of funds was
not proven with substantial evidence. As gleaned from the handwritten
statement of Ilustre Acosta, the General Manager of the Springs and
Blessings General Agency under Metro Manila VI, it appears that, aside
from him and petitioner, there were 10 other attendees during the
luncheon conference on November 27, 1999 at the Barrio Fiesta,
Cubao, Quezon City. Petitioner received the amount of only P2,386.00
from respondent to pay for the cost of the luncheon for the
conference, based on Petty Cash Voucher signed by petitioner,74 but
the conferees spent more than P4,000.00. Upon petitioner's
suggestion, the conferees agreed to contribute P200.00 each, or the
total amount of P2000.00 to answer for the difference. Petitioner had
no obligation to return the contributions of the conferees, nor was he
liable for said amount. Significantly, except for Ilustre Acosta, the
other attendees in the conference never complained against petitioner
or requested him to return their respective contributions of P200.00.
Regarding the charge that the petitioner peddled false and malicious
informations against Abia and Padiernos, Abia has not executed any
affidavit to confirm paragraph 9 of the affidavit of Roy Padiernos. As
admitted by del Rosario, the informations allegedly relayed to her by
the petitioner pertaining to Roy Padiernos were confirmed by Zita
Domingo.75
The petitioner does not deny having had a heated exchange of words
with Roy Padiernos in the course of a meeting. However, such incident
does not constitute proof that the petitioner thereby showed disrespect
to Roy Padiernos, nor a valid cause for petitioner's dismissal. It does
happen that in the course of exchange of views during a meeting,
participants may become so assertive to the point of being overbearing
or unyielding and in the process lose their temper, on their sincere
belief of being right. There is no evidence on record that petitioner
committed the same or similar acts thereafter.
To prove its charge of conduct unbecoming of a company officer, more
specifically of drinking alcoholic beverages within the premises of the
company during office hours or going to work drunk, respondent relied
on the statement/affidavit of Celeste Villena, the Agency Manager of
the Wondrous and Miraculous General Agency under Metro Manila
VI;76 and Marivic Uy, the General Manager of the D MBP General
Agency under Metro Manila VI. Both claimed that they always saw
petitioner drunk during office hours, most especially during cut-offs
when many sales counselors were present.77 Petitioner admitted
having had drinking sessions with Certerio Uy, the husband of Marivic
Uy, Ilustre Acosta and Reynaldo Villena, the husband of Celeste
Villena, and who, according to petitioner, provided the hard liquor and
the pulutan.78 He, however, denied reporting to office drunk and
insisted that he reported for work sober.
We are inclined to give credence to petitioner's claim, noting that in
her handwritten letter-report to Norman Gonzales dated March 10,
2000, Villena made no mention of the petitioner going to office
drunk.79 It was only in her affidavit dated January 16, 2002 that
Villena made such declaration.80 Villena did not explain her failure to
report the matter to Gonzales on March 10, 2000, and why she made
the charge for the first time in her Affidavit dated January 16, 2002.
Uy is the wife of no less than Certerio Uy, the Senior Vice-President of
the Manila North Sales Division of respondent. If petitioner's "drinking
problem" had any ring of truth, she should have immediately reported
the matter to her husband or to other officials concerned. Uy's
unexplained silence until March 10, 2000 thus renders her report
implausible.
Respondent avers that petitioner served directly as agent of Caritas, a
business competitor of the respondent, when he connived with his wife
in recruiting Sales Associates of the Metro Sales Division VI to transfer
to Caritas as sales associates. Respondent claims that, by his acts,
petitioner failed to dedicate his full time on the job with respondent
and prevented said sales associates from doing the same. Aside from
violating its policy against conflict of interest, petitioner's acts
19
adversely affected his decisions in the performance of his duties and
obligations to respondent.81
Loyalty of an employee to his employer consists of certain very basic
and common sense obligations. An employee must not, while
employed, act contrary to the employer's interest.82 The scope of the
duty of loyalty that an employee owes to his employer may vary with
the nature of their relationship. Employees occupying a position of
trust and confidence owe a higher duty than those performing low-
level tasks. Assisting an employee's competitor can even constitute a
breach of the employee's duty of loyalty. An employee's self-dealing
may breach that duty.83 However, it has been ruled that
A reality of contemporary life is that many families will consist of two
wage earners, one wage earner with two jobs, or both. For some
employees, particularly those earning low or modest incomes, second
sources of income are an economic necessity. For them, a second job
or "moonlighting" is the only way to make ends meet. Conversely,
employers need the assurance that employees will not disserve them
by furthering their own interests or those of competitors at the
employers' expense.84
A slight assistance to a direct competitor could constitute a breach of
the employee's duty of loyalty. However, when competition is indirect
or minimal, the employer may be required to show that the employee
received substantial assistance from the competitor. If an employee
usurped a corporate opportunity or secretly profited from a
competitive activity, the employer may receive the value of the lost
opportunity or the secret profit.85
An employee's skill, aptitude, and other subjective knowledge obtained
in the course of employment are not the property of his
employer.86 However, an employee occupying a managerial position or
office is obliged to protect the trade secret of his employer consisting
of formula, process, device or compilation which it uses in its business
and gives it an opportunity to obtain an advantage over competitors
who do not know of such trade secret. However, the rule does not
apply to a matter of public knowledge or of general knowledge within
the industry.87 Moreover, an employer has a protectible interest in the
customer relationships of its former employee established and/or
nurtured while employed by the employer, and is entitled to protect
itself from the risk that a former employee might appropriate
customers by taking unfair advantage of the contract developed while
working for the employer.88 While acting as an agent of his employer,
an employee owes the duty of fidelity and loyalty. Being a fiduciary, he
cannot act inconsistently with his agency or trust. He cannot solicit his
employer's customers or co-employees for himself or for a business
competitor of his employer. If such employee or officer connives with
and induces another to betray his employer in favor of a business
competitor of his employer, he is held accountable for his mischief.89
In this case, we are not persuaded that Caritas is the business
competitor of respondent. The evidence on record shows that while
Abia, the Senior Vice-President of respondent's Metro Manila
Marketing, is one of the incorporators of Caritas and is even a member
of the Board of Directors, respondent did not dismiss him from
employment. The Head of the Legal Division of the respondent, Atty.
Reyes, was also an incorporator of Caritas and a member of its Board
of Directors, and although he appears to have sold his shares to
Herminigildo C. Belen for P127,312.34, he only did so on March 7,
1999. There is no evidence on record whether the transfer of such
shares of stocks has already been reflected in the books of Caritas.
Celeste Villena, one of the Sales Associates of respondent, is herself
licensed by Caritas to sell plans for the latter. Villena has likewise not
been prohibited from selling pre-need plans for Caritas. Fe Molina, who
is the head of a sales agency of Caritas, is also a sales agency head of
respondent. Petitioner, his wife, and Villena were not charged nor
meted any sanction by the respondent for conflict of interest.
Petitioner was the Assistant Vice-President, Marketing Head, Area 10,
of Caritas, and for a while, without any protest from respondent. If
Caritas is a business competitor of the respondent, it should have
meted sanctions not only on petitioner but also on Abia, Reyes, Fe
Molina and Villena as well.
The truth of the matter is that, as averred by Caritas President
Geoffrey Martinez, Caritas is engaged in health care and hospitalization
package, whereas respondent sells educational, pension, and pre-need
plans. Caritas is an HMO and is directly supervised by the DOH, while
respondent is under the supervision of the SEC. The so-called sales
associates of the respondent are non-salaried employees and are paid
on commission basis only. Their commissions are based on their
individual initiative and industry. That the contracts executed by the
beneficiaries of both corporations have similar provisions regarding
contract price, grace period, cancellation, reinstatement, transfer and
termination, do not constitute proof that Caritas and respondent are
business competitors. There is also no proof that the two corporations
compete with each other in the same or similar business; in fact, the
business of Caritas and that of the respondent complement each other.
Respondent relied on the declarations of Ruth Padiernos, Spouses
Eppie and Ilustre Acosta, Celeste Villena, and Marivic Uy to prove its
charge that Fe Molina pirated sales associates working for respondent
and that petitioner tolerated the actuations of his wife and even
connived with her.
The Court finds, however, that the evidence adduced by respondent
insufficient to warrant the petitioner's dismissal from employment.
20
Ruth Padiernos, wife of Roy Padiernos, averred in her written
statement dated March 8, 2000, that as far back as July 1999, she had
a conference with her husband and Abia where she reported that
petitioner connived with his wife in pirating sales associates. She was
assured that something would be done to arrest the
problem.90 However, Ruth Padiernos failed to name any such sales
associate who was recruited by Fe Molina. There is likewise no
evidence that Abia ever confronted petitioner relative to the charge.
Roy Padiernos confronted petitioner, but the latter denied the charge.
Since then, no further action was taken against the petitioner by
respondent, until the letter of Picazo dated March 21, 2000 was sent to
him. Roy Padiernos did not explain why he executed his affidavit
regarding the matter almost three years later, only on January 18,
2002. In an Affidavit dated January 18, 2002, it was made to appear
that Ruth Padiernos claimed that petitioner's wife, the Unit Manager of
the Ark Group under Metro Manila Sales Group VI and also an Agency
Manager of Caritas, recruited sales associates under respondent to
work for Caritas, and that petitioner did the same; and that she
(Padiernos) learned that almost all the productive Sales Associates in
Metro Manila VI were already connected with Caritas, using "different
names."91Although notarized, the affidavit has no probative weight
because it was unsigned.
Celeste Villena, for her part, declared in her handwritten statement
dated March 10, 2000 that Fe Molina recruited Lenie Gatmaitan to join
Caritas and that she confronted petitioner.92 In her Affidavit dated
January 16, 2002, she alleged that petitioner and his wife, Fe Molina,
recruited Gatmaitan to join Caritas.93 However, the signature of the
notary public does not appear in said affidavit. For his part, Ilustre
Acosta, averred in his handwritten statement dated March 11, 2000,
that on March 4, 2000, petitioner informed him that Geoffrey Martinez
called petitioner to inquire if petitioner would have no objection for him
(Ilustre) to be with Caritas and that petitioner replied that he had no
objection if that was Ilustre's decision.94 Ilustre maintained this claim
in his Affidavit dated January 16, 2002.95 Eppie Acosta, the wife of
Ilustre Acosta, averred in her handwritten statement of March 12,
2000, that on March 6, 2000, petitioner commented about their low
sales production, and she retorted that he was the cause, hence, may
have grudges against him. Petitioner replied that he and his wife did
not interfere with each other's business dealings, and that petitioner
even declared "Mare, for all you know, ikaw na lang ang hindi nag-ca-
Caritas." She reiterated her claim in her affidavit dated January 16,
2000.96 Marivic Uy averred that the wife of petitioner had been pirating
sales associates of respondent since 1999 to join Caritas and that she
tried to recruit Morena Siasoco, one of the Group Managers. Petitioner
failed to stop his wife, but rather tolerated her actuations.97 She
reiterated her claim in her Affidavit dated January 16, 2002.98
However, there is no evidence on record to prove that respondent
expressly prohibited its Sales Associates from selling for Caritas.
Neither is there evidence on record to prove that Caritas prohibited its
sales associates from selling pre-need plans of respondent.
Respondent likewise failed to present the affidavits of Siasoco, Casaje,
Magalso, San Miguel and Halili. In contrast to the evidence of
respondent, Gatchalian, San Miguel, Siasoco, and Gatmaitan executed
their respective affidavits declaring that neither petitioner nor his wife
ever recruited them.99 They admitted that they sold plans for Caritas,
but without any prodding from petitioner and his wife. Geoffrey
Martinez declared, in his affidavit, that Siasoco, San Miguel, Casaje,
Magalso, and Halili joined Caritas voluntarily and individually, through
him, and he was not aware that petitioner and his wife recommended
them to Caritas. Lenita Gatmaitan called him and inquired if she could
join Caritas, and he replied in the affirmative. He never called
petitioner concerning Ilustre Acosta; on the contrary, it was the latter
who called to inquire if he was entitled to a discount if he purchased a
Caritas health plan. He talked to Vilma Del Rosario and convinced her
to apply as Branch Manager of Caritas, which she did, but backed out
later on.
IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby
GRANTED. The August 13, 2004 Decision and September 27, 2004
Resolution of the Court of Appeals are REVERSED AND SET ASIDE. The
decision and resolution of the NLRC are reinstated.
SO ORDERED.
Endnotes:
1
Penned by Associate Justice Delilah Vidallon-Magtolis, with Associate
Justices Eliezer R. Delos Santos and Arturo D. Brion, concurring.
2
CA rollo, p. 551.
3
Penned by Presiding Commissioner Roy V. Seeres, with
Commissioners Romeo L. Go and Vicente S.E. Veloso, concurring.
4
CA rollo, p. 4.
5
Rollo, p. 37.
6
CA rollo, pp. 66, 250-251.
7
Rollo, p. 145.
8
Id. at 140.
9
CA rollo, pp. 172-173.
10
Rollo, p. 74.
11
CA rollo, p. 205.
21
12
Id. at 258-259. 57
CA rollo, pp. 52-53.
13
Id. at 57. 58
Id. at 389.
14
Id. at 97. 59
Id. at 2-37.
15
Id. 60
Id. at 511-519.
16
Id. at 98-100. 61
Id. at 520-531.
17
Id. at 104-105. 62
Id. at 551.
18
Id. at 131, 144. 63
G.R. No. 130866, September 16, 1998, 295 SCRA 494, 500-501.
19
Id. at 144. 64
See National Steel Corporation v. Court of Appeals, 436 Phil. 656,
20
Id. at 107, 145. 670 (2002).
21
Id. at 146-150. 65
G.R. No. 151981, December 1, 2003, 417 SCRA 46.
22
Id. at 148-149. 66
Supra, at 50.
23
Id. at 151-152. 67
Samson v. National Labor Relations Commission, 386 Phil. 669, 682
24
Id. at 153. (2000).
25
Id. at 59, 131. 68
Diamond Motors Corporation v. Court of Appeals, supra note 65, at
26
Id. at 108-111, 154-157. 50-51.
27
Id. at 131. 69
Ramos v. Court of Appeals, G.R. No. 145405, June 29, 2004, 433
28
Id. at 112. SCRA 177, 183.
29
Id. at 60. 70
Supra note 67.
30
Id. at 130-134. 71
Id.
31
Id. at 130-138. 72
Gonzales v. National Labor Relations Commission, G.R. No. 131653,
32
Id. at 136-137. March 26, 2001, 355 SCRA 195, 208.
33
Id. at 54-81. 73
Asia Pacific Chartering (Phils.), Inc. v. Farolan, 441 Phil. 776, 791.
34
Id. at 70. 74
CA rollo, p. 119.
35
G.R. No. 128024, May 9, 2000, 331 SCRA 584. 75
Id. at 95-96.
36
CA rollo, pp. 76-79. 76
Id. at 125.
37
Id. At 178-180. 77
Id. at 93.
38
Id. at 165-180, 188-193 78
Id. at 184.
39
Id. at 199-204. 79
Id. at 85-87.
40
Id. at 249-251. 80
Id. at 125.
41
Id. at 205-206. 81
Id. at 455.
42
Id. at 252-253. 82
Lamorte Burns & Co., Inc. v. Walters, 167 N.J. 285, 770 A.2d 1158
43
Id. at 254. (2001).
44
Id. at 255. 83
Platinum Management, Inc. v. Dahms, 285 N.J. Super 276, 666 A.2d
45
Id. at 256. 1028 (1995).
46
Id. at 258-259. 84
Cameco, Inc. v. Gedicke, 157 N.J. 504, 724 A.2d. 783, (1999).
47
Id. at 202, 206. 85
Id.
48
Id. at 213-220. 86
American Buildings Company v. Pascoe Building System, Inc., 392
49
Id. at 248. S.E.2d 860, 260 Ga. 346 (1990).
50
Id. at 265-276. 87
Sun Dial Corporation v. Rideout, 16 N.J. 252, 108 A.2d 442 (1954).
51
Id. at 273-275. 88
American Software US A., Inc.. v. Moore, 448 S.E.2d 206, 264 Ga.
52
Id. at 273-275. 480 (1994).
53
Id. at 47-48. 89
Corroon & Black of Illinois, Inc. v. Magner, 494 N.E.2d 785 (1986).
54
Rollo, pp. 196-197. 90
CA rollo, p. 82.
55
Id. at 198-199. 91
Id. at 122-123.
56
Id. at 201. 92
Id. at 85-87.

22
93
Id. at 125. and he received no recall order from petitioners, he no longer reported
94
Id. at 88-89. for work.
95
Id. at 126. Basinillo alleged that sometime in September 1998, the company's
96
Id. at 124. security guard scolded him for not wearing the employee ID. On
97
Id. at 93-94. October 17, 1998, he was dismissed.
98
Id. at 122. Thus, on February 10, 1999, Hermosa, de Castro, and Basinillo
99
Id. at 252-256. collectively filed a Complaint7 for illegal dismissal before the Regional
FIRST DIVISION Arbitration Branch No. IV, docketed as NLRC Case No. RAB-IV-2-
[G.R. NO. 155279 October 11, 2005] 10765-99-C.
MICRO SALES OPERATION NETWORK and WILLY In his Decision8 dated February 21, 2000, Labor Arbiter Antonio R.
BENDOL, Petitioners, v. THE NATIONAL LABOR RELATIONS Macam found that private respondents were illegally dismissed.
COMMISSION (SECOND DIVISION), LARRY HERMOSA, The fallo of the decision reads:
LEONARDO G. DE CASTRO and RAMIL BASINILLO, Respondents. WHEREFORE, premises considered, judgment is hereby rendered
DECISION declaring the dismissal of all complainants herein illegal and ordering
QUISUMBING, J.: respondents to reinstate them to their former or equivalent positions
For review on certiorari are the Resolutions1 dated November 28, and to pay them full backwages, plus ten percent (10%) attorney's
2001 and September 3, 2002, respectively, of the Court of Appeals, in fees, computed as follows:
CA-G.R. SP No. 67755. The said Resolutions dismissed petitioners' LARRY HERMOSA
special civil action for certiorari against the National Labor Relations From January 9, 1999 to Feb. 21, 2000
Commission (NLRC) Resolution,2 which affirmed the Labor Arbiter's = 1 yr. 1 mo. & 12 days or 13.36 mos.
Decision3 finding petitioners herein liable for illegal dismissal. P220.00 x 26 x 13.36 = P76,419.20
The antecedent facts are as follows: P76,419.20/12 = 6,368.27
Petitioner Micro Sales Operation Network ("company" for brevity) is a P220.00 x 5 = 1,100.00 P83,887.47
domestic corporation engaged in local transportation of goods by land. ----------------
Petitioner Willy4 Bendol was the company's operations manager at the LEONARDO DE CASTRO
time of the controversy. From Dec. 12, 1998 to Feb. 21, 2000
Private respondents Larry Hermosa, Leonardo de Castro, and Ramil = 1 yr. 2 mos. & 9 days or 14.30 mos.
Basinillo were employed by the company as driver, warehouseman, P7,280.00 x 14.30 = P104,104.00
and helper, respectively. Hermosa was hired on November 17, 1997, P104,104.00/12 = 8,675.33
de Castro on February 1, 1996, and Basinillo on February 4, 1998. P7,280.00/26 x 5 = 1,400.00 P114,179.33
Hermosa failed to promptly surrender the ignition key of the ----------------
company's vehicle after discharging his duties. Such failure was RAMIL BASINILLO
allegedly contrary to the company's standard operating procedure. From Oct. 17, 1998 to Feb. 21, 2000
Thus, he was asked to explain within 24 hours why disciplinary action = 1 yr., 4 mos. & 4 days or 16.13 mos.
should not be meted on him. He explained that he kept the ignition P200.00 x 26 x 16.13 = P83,876.00
key because the vehicle was stalled when its battery broke P83,876.00/12 = 6,989.67
down.5 Unsatisfied with Hermosa's explanation, the company P200.00 x 5 = 1,000.00 P 91,865.67
dismissed him on January 9, 1999. -------------------------------
De Castro was suspected of firing a gun during the blessing of the Total Full Backwages = P289,932.47
company's warehouse on December 10, 1998. The next day, he was Plus 10% Attorney's Fees = 28,993.25
placed under preventive suspension and temporarily banned from ---------------
entering the company's premises. He was also asked to explain within GRAND TOTAL = P318,925.72
24 hours why he should not be terminated. He explained that he had SO ORDERED.9
no knowledge of the said incident.6 As his suspension was indefinite On appeal, the NLRC affirmed the Labor Arbiter's decision. It also
denied petitioners' motion for reconsideration.

23
Undaunted, petitioners filed with the Court of Appeals a special civil
action for certiorari . However, the appellate court dismissed the
petition for being defective in form. It found that only the company
signed the verification and certification on non-forum shopping.
Petitioner Willy Bendol did not sign the same.
Petitioners' motion for reconsideration was denied. The appellate court
reasoned that even if petitioner Willy Bendol was not impleaded as a
real party in interest, records showed that he was impleaded as a co-
respondent before the Labor Arbiter. Thus, the appellate court ruled,
his failure to sign the verification and certification on non-forum
shopping is a ground for the dismissal of the petition.
Hence, the instant petition anchored on the following grounds:
A. THE HONORABLE COURT OF APPEALS PLAINLY ERRED AND ACTED
CONTRARY TO EXISTING LAW AND JURISPRUDENCE IN DISMISSING
THE PETITION FOR CERTIORARI ON A MERE TECHNICALITY
CONSIDERING THAT WILLY BENDOL WAS JOINED MERELY AS A
NOMINAL PARTY TO THE PETITION.
B. MORE IMPORTANTLY, JUSTICE WOULD BE BEST SERVED IF THE
PETITION WAS GIVEN DUE COURSE CONSIDERING THAT THE PUBLIC
RESPONDENT COMMISSION ACTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION
WHEN IT AFFIRMED THE DECISION OF LABOR ARBITER MACAM
CONSIDERING THAT:
1. THERE IS NO FACTUAL OR EVIDENTIARY BASIS TO SUPPORT THE
FINDING OF ILLEGAL DISMISSAL. DUE PROCESS AND FAIR PLAY
DICTATE THAT THE PUBLIC RESPONDENT COMMISSION POINT OUT
THE PARTICULAR FACTUAL FINDING OF THE LABOR ARBITER WHICH
JUSTIFIED THE FINDING OF ILLEGAL DISMISSAL.
2. THE PUBLIC RESPONDENT COMMISSION IGNORED THE FACT THAT
THE LABOR ARBITER'S FINDING OF ILLEGAL DISMISSAL RESTS ON
PURE SPECULATION, CONJECTURE AND SURMISES.
3. PRIVATE RESPONDENT BASINILLO HIMSELF DENIED THAT HE WAS
DISMISSED BY PETITIONERS.
4. THE ACTS OF HERMOSA CONSTITUTE WILLFUL DISOBEDIENCE
JUSTIFYING HIS DISMISSAL.
5. THE HONORABLE COMMISSION COMPLETELY IGNORED THE FACT
THAT PRIVATE RESPONDENTS' SINGULAR CAUSE OF ACTION IS THAT
FOR ILLEGAL DISMISSAL. THUS, THE LABOR ARBITER'S AWARD OF
SEPARATION PAY AND ATTORNEY'S FEES WAS UTTERLY WITHOUT
BASIS.10
Petitioners insist Willy Bendol was impleaded merely because he was
the immediate supervisor of private respondents. They argue that the
real party in interest in this case is the company. In any case,
petitioners point out that Bendol was no longer connected with the
company when the special civil action for certiorari was filed.
Private respondents, however, maintain that formal requirements must
be strictly complied with. Thus, they posit, the Court of Appeals
correctly dismissed the petition for failure of one of the petitioners to
sign the verification and certification on non-forum shopping.
Further, petitioners contend that Hermosa's omission constituted
willful disobedience justifying his dismissal. With respect to de Castro,
petitioners claim that he was merely suspended. As for Basinillo,
petitioners point to an unsworn statement,11 where he denied filing
any complaint for illegal dismissal against the company.
Private respondents, however, counter that petitioners failed to prove
willful disobedience as a just cause for Hermosa's termination.
Moreover, they posit that de Castro's preventive suspension
constituted constructive dismissal because it was for an indefinite
period and no recall order was issued by the company. Private
respondents also argue that Basinillo's purported unsworn statement
has no probative value.
Lastly, petitioners contend the Labor Arbiter erroneously awarded
separation pay and attorney's fees not prayed for. On this point,
private respondents quickly point out that, contrary to petitioners'
claim, separation pay was not awarded at all. They also claim that the
award of attorney's fees was in accordance with law.
We resolve to give due course to the petition.
The requirement regarding verification of a pleading is not
jurisdictional. Such requirement is simply a condition affecting the
form of the pleading, non-compliance with which does not necessarily
render the pleading fatally defective.12
The Court of Appeals relied on Loquias v. Office of the
Ombudsman,13 which held that a certification on non-forum shopping
signed by only one of two or more petitioners is defective, unless he
was duly authorized by his co-petitioner. However, the said ruling
applies when the co-parties are being sued in their individual
capacities. Note that the petitioners in Loquias14 are the mayor, vice-
mayor, and three members of the municipal board of San Miguel,
Zamboanga del Sur. The said co-parties were charged with violation of
Republic Act No. 301915 in their various capacities.
In the instant case, the petitioners are the company and its operations
manager, Willy Bendol. The latter was impleaded simply because he
was a co-respondent in the illegal dismissal complaint. He has no
interest in this case separate and distinct from the company, which
was the direct employer of private respondents. Any award of
reinstatement, backwages, and attorney's fees in favor of private
respondents will be enforced against the company as the real party in
interest in an illegal dismissal case. Petitioner Bendol is clearly a mere
nominal party in the case. His failure to sign the verification and
certification on non-forum shopping is not a ground for the dismissal of
24
the petition. The appellate court erred in dismissing outright illegal dismissal is filed, the burden is on the employer to prove that
petitioners' special civil action for certiorari solely on that ground. the termination was for valid cause.24 Petitioners failed to discharge
The logical course of action now is to direct the Court of Appeals to this burden persuasively.
give due course to the special civil action for certiorari . However, to Finally, petitioners lament that the Labor Arbiter erred in granting
obviate further delay in the resolution of this case, we shall bring the respondents separation pay and attorney's fees. We note, however,
present controversy to rest. that separation pay was not awarded at all; thus, any discussion on
After weighing the parties' arguments and carefully reviewing the this matter would be futile. On the other hand, the award of attorneys'
records of this case, we agree with the findings and conclusions of the fees, though not prayed for, is sanctioned by law25 and must be
Labor Arbiter as affirmed by the NLRC. upheld.
Hermosa was unjustly dismissed. For willful disobedience to be a valid WHEREFORE, the assailed Resolutions dated November 28, 2001 and
cause for dismissal, the following twin elements must concur: (1) the September 3, 2002, respectively, of the Court of Appeals, in CA-G.R.
employee's assailed conduct must have been willful, that is, SP No. 67755, are SET ASIDE. The NLRC Resolution affirming the
characterized by a wrongful and perverse attitude; and (2) the order Labor Arbiter's Decision, finding petitioners liable for illegal dismissal,
violated must have been reasonable, lawful, made known to the is AFFIRMED. Costs against petitioners.
employee and must pertain to the duties which he had been engaged SO ORDERED.
to discharge.16
Both elements are lacking. We find no hint of perverse attitude in
Hermosa's written explanation.17 On the contrary, it appears that the Endnotes:
alleged company procedure for leaving the ignition key of the
company's vehicles within office premises was not even made known
to him.18 Petitioners failed to prove Hermosa willfully disobeyed the
1
Rollo, pp. 44-45 and 47-48. Penned by Associate Justice Conrado M.
said company procedure. At any rate, dismissal was too harsh a Vasquez, Jr., with Associate Justices Andres B. Reyes, Jr., and Amelita
penalty for the omission imputed to him. G. Tolentino concurring.
De Castro was likewise unlawfully terminated. Contrary to petitioner's
2
Id. at 132-139.
claim, records show that de Castro was not merely suspended. He was
3
Id. at 99-106.
dismissed for alleged abandonment of work.19 To constitute
4
Sometimes "Wilfredo" in some parts of the records.
abandonment as a just cause for dismissal, there must be: (a)
5
Records, p. 80.
absence without justifiable reason; and (b) a clear intention, as
6
Id. at 253.
manifested by some overt act, to sever the employer-employee
7
Id. at 1-2.
relationship.20
8
Rollo, pp. 99-106.
Petitioners failed to prove that de Castro abandoned his job. A clear
9
Id. at 105-106.
intention to end the employer-employee relationship is missing. He did
10
Id. at 22-23.
not report for work simply because he was indefinitely suspended.
11
Id. at 63.
Moreover, the fact that de Castro filed a case for illegal dismissal
12
Shipside Incorporated v. Court of Appeals, G.R. No. 143377, 20
against petitioners belies abandonment.21 February 2001, 352 SCRA 334, 345-346.
In the case of Basinillo, petitioners rely solely on his purported
13
G.R. No. 139396, 15 August 2000, 338 SCRA 62, 68.
14
unsworn statement alleging he was never dismissed. However, not Ibid.
having been sworn to, the said document has no probative value.
15
Otherwise known as the "Anti-Graft and Corrupt Practices Act."
While the Court is liberal in the conduct of proceedings for labor cases,
16
Bascon v. Court of Appeals, G.R. No. 144899, 5 February 2004, 422
proof of authenticity as a condition for the admission of documents is SCRA 122, 131.
nonetheless required.22
17
Records, p. 80.
Petitioners failed to present evidence of Basinillo's continuous
18
Id. at 81.
contribution to SSS or uninterrupted pay slips to prove he remained
19
Id. at 254.
under the company's employ. Hence, the complaint23 for illegal
20
Globe Telecom, Inc. v. Florendo-Flores, G.R. No. 150092, 27
dismissal filed by Basinillo stands and speaks for itself. Once a case for September 2002, 390 SCRA 201, 212.

25
21
Hyatt Taxi Services, Inc. v. Catinoy, G.R. No. 143204, 26 June
2001, 359 SCRA 686, 695.
22
Asuncion v. National Labor Relations Commission, G.R. No. 129329,
31 July 2001, 362 SCRA 56, 63-64.
23
Records, pp. 1-2.
24
Sy v. Court of Appeals, G.R. No. 142293, 27 February 2003, 398
SCRA 301, 310.
25
Civil Code, Art. 2208. In the absence of stipulation, attorney's fees
and expenses of litigation, other than judicial costs, cannot be
recovered, except:
...
(7) In actions for the recovery of wages of - laborers and skilled
workers;
FIRST DIVISION
[G.R. NO. 146621. July 30, 2004]
RENE P. VALIAO, Petitioner, v. .HON. COURT OF APPEALS,
NATIONAL LABOR RELATIONS COMMISSION-FOURTH
DIVISION (Cebu City), WEST NEGROS COLLEGE, Respondents.
DECISION
QUISUMBING, J.:
For review on certiorari is the Decision1 dated August 22, 2000 of the
Court of Appeals in CA-G.R. SP No. 55133, and its Resolution2 dated
November 22, 2000 denying the motion for reconsideration. The Court
of Appeals dismissed the petition for certiorari filed by petitioner and
affirmed the Resolution dated July 7, 1999 of the National Labor
Relations Commission (NLRC) -Fourth Division in NLRC Case No. V-
000134-98 (RAB Case No. 06-01-10026-95), which sustained the
Decision of Labor Arbiter Benjamin E. Pelaez, directing private
respondent West Negros College (WNC) to pay petitioner Rene P.
Valiaos salary during the period of his preventive suspension and
attorneys fees, while dismissing all other claims.
The facts, as culled from records, are as follows:
chanroblesv irt ua1awli bra ry
On February 5, 1990, petitioner Rene Valiao was appointed by private
respondent West Negros College (WNC) as Student Affairs Office
(SAO) Director, with a starting salary of P2,800 per month. On May
14, 1990, he was assigned as Acting Director, Alumni Affairs Office.
On July 29, 1990, petitioner was transferred to a staff position and
designated as Records Chief at the Registrars Office but was again re-
assigned as a typist on June 24, 1991.
The latest re-assignment was due to his tardiness and absences, as
reflected in the summary of tardiness and absences report, which
showed him to have been absent or late for work from a minimum of
seven (7) to a maximum of seventy-five (75) minutes for the period
March to October 31, 1991, and to have reported late almost every
day for the period November to December 1991.
Copies of his tardiness/absences reports were furnished petitioner,
along with memoranda requiring him to explain but his explanations
were either unacceptable or unsatisfactory. Subsequent reports also
showed that he did not change his habits resulting in tardiness and
absences. He was even caught one time manipulating the bundy clock,
thus necessitating another memorandum to him asking him to explain
his dishonest actuations in accomplishing the daily attendance logbook
and in using the bundy clock.
On December 10, 1991, petitioner received a suspension order without
pay for fifteen (15) days effective January 1, 1992, because of
dishonesty in reporting his actual attendance. After serving the
suspension, the petitioner reported back to office on January 16, 1992.
On June 15, 1992, another adverse report on tardiness and absences
from the Registrar was made against the petitioner prompting WNC to
send him another memorandum with an attached tardiness and
absences report, calling his attention on his tardiness and absences for
the period February to April 1992.
On June 20, 1992, petitioner sent a letter of appeal and explained his
side to the new college president, Suzette Arbolario-Agustin, who gave
petitioner another chance. The petitioner was then appointed as
Information Assistant effective immediately. However, the petitioner
did not immediately assume the post of Information Assistant
prompting the President of private respondent WNC to call his
attention. When the petitioner finally assumed his post, he was
allowed a part-time teaching job in the same school to augment his
income.
Sometime in December 1992, WNC won a case against the officials of
the union before the NLRC. Petitioner was ordered to prepare a media
blitz of this victory but the petitioner did not comply with the order on
the ground that such a press release would only worsen the already
aggravated situation and strained relations between WNC
management and the union officials.
When petitioner reported for work on the first day of January 1993, he
was relieved from his post and transferred to the College of Liberal
Arts as Records Evaluator. Not for long, the Dean of the Liberal Arts
sent a letter to the Human Resources Manager complaining about the
petitioners poor performance and habitual absenteeism, as shown in
the daily absence reports.
On January 18, 1993, petitioner was again absent from work without
permission or notice to his immediate superior. It turned out that he
went to Bacolod City and on January 28, 1993, the petitioner was one
of those arrested during a raid in the house of one Toto Ruiz, a
suspected drug pusher and was brought to the Bacolod Police Station
along with four (4) other suspects. Upon further search and
investigation by the Narcotics Control Division, the petitioner was
26
found possessing two (2) suspected marijuana roaches (butts) which
were placed inside his left shoe. The event was widely publicized,
focusing on petitioners position as an Economics teacher of WNC, and
considering further that one of his fellow suspects was a member of
the Philippine Army, who was caught with an unlicensed firearm, a
tooter and other shabu paraphernalia. The petitioner and other
suspects were then charged with violation of the Dangerous Drugs Act
of 1972 (Republic Act No. 6425, as amended).
Petitioner was asked to explain within 24 hours why he should not be
terminated as a result of the raid and the charges against him for
violation of Rep. Act No. 6425 as amended. Petitioner allegedly was
not able to answer immediately since he was in jail and received said
memorandum only on January 30, 1993, although his wife had earlier
received the memorandum on January 28, 1993.
On January 29, 1993, the petitioner was dismissed for failure to
answer said memorandum.
On February 1, 1993, the petitioner wrote to the President of WNC
explaining his side and asking for due process.WNC cancelled its
Notice of Termination dated January 29, 1993, and granted the
petitioners request. The petitioner was notified through a
memorandum about the grant of his request and that a hearing would
be conducted. He was then placed under preventive suspension and an
investigation committee was organized to conduct the probe. On March
6, 1993, a notice of hearing/investigation was sent to the petitioner.
After the investigation attended by the petitioner and his counsel, with
proceedings duly recorded, the investigation committee recommended
the dismissal of petitioner. A notice of termination was then sent to
petitioner informing him of his termination from the service for serious
misconduct and gross and habitual neglect of duty. The petitioner
received the notice on March 25, 1993, but did not file a grievance
concerning the notice of termination.
On January 19, 1995, petitioner filed a Complaint against WNC for
illegal suspension, illegal dismissal, backwages, salary differential for
salary increases and other benefits granted after his dismissal as well
as for moral and exemplary damages and attorneys fees.
In its Answer, WNC alleged that petitioner was dismissed on charges of
serious misconduct, and gross and willful neglect of duty. WNC said his
dismissal was effected after due notice and prior hearing. It claimed
also that since petitioner was terminated for a valid cause after a due
hearing, the latters claim for moral and exemplary damages, and
attorneys fees had no basis in fact and in law.
After due proceedings, the Labor Arbiter rendered a decision, the
decretal portion of which reads as follows:chanrob lesvi rtua 1awlib rary
WHEREFORE, premises considered, judgment is hereby rendered
DIRECTING respondent West Negros College to pay complainant Rene
P. Valiao (a) P3,300.00 as salary for the period of his preventive
suspension, and (b) P330.00 as attorneys fees, or the total amount of
THREE THOUSAND SIX HUNDRED THIRTY PESOS (P3,630.00).
Further, all other claims are DISMISSED for lack of merit.
SO ORDERED.3 cralawred
The Labor Arbiter found no justifiable reason to place the petitioner
under preventive suspension as there was no serious or imminent
threat to the life or property of his employer or co-workers.
However, the Labor Arbiter found the dismissal of the petitioner from
WNC to be valid due to absenteeism and tardiness and after he was
accorded the procedural due process aspect of the law as reflected in
the records showing that the petitioner was formally investigated and
given the opportunity to refute the alleged findings by the
management of WNC. The Labor Arbiter held that frequent
absenteeism and tardiness of the petitioner constituted not only willful
disobedience but also gross and habitual neglect of duties, which are
valid grounds for termination of employment. He stressed that the
petitioners frequent absences without proper leave of absence was not
only unfair to WNC and the petitioners co-employees but also set an
undesirable example to the employees under his supervision,
considering that the petitioner was not a mere rank-and-file employee
but one who owed more than the usual fealty to the organization.
On appeal to the NLRC, the latter affirmed the decision of the Labor
Arbiter, sustained the latters findings of facts, and made its own
findings on the apprehension of the petitioner for possession of
prohibited drugs. The decretal portion of the decision reads as
follows:
cha nro blesvi rtua 1awlib rary
WHEREFORE, premises considered, the appeal is DISMISSED and the
decision of the Executive Labor Arbiter is AFFIRMED in its entirety.
SO ORDERED.4 cralawred
Petitioner then filed a Petition for Certiorari under Rule 65 before the
Court of Appeals but this was dismissed for lack of merit. The decretal
portion of the decision reads as follows: chan roblesv irt ua1awli bra ry
WHEREFORE, the questioned Decision and Resolution dated December
11, 1998 and July 7, 1999, respectively, of public respondent National
Labor Relations Commission are hereby AFFIRMED.
SO ORDERED.5 cralawred
The Court of Appeals held that the petitioner was validly dismissed for
serious misconduct and gross habitual neglect of duties, which was
aggravated by his arrest for violation of Rep. Act No. 6425, as
amended [the January 28, 1993 incident] and that he was afforded the
twin requirements of notice and hearing and the opportunity to defend
himself by the investigating committee. The appellate court noted that
WNC had presented sufficient evidence to support petitioners
termination from employment after taking into consideration the
27
totality of the infractions or the number of violations committed by
petitioner during the period of employment and stressed that it
properly exercised its management prerogative by observing due
process. Finally, the Court of Appeals ruled that the NLRC correctly
denied the claim for damages and attorneys fees for lack of
evidentiary support.
Petitioner duly filed a Motion of Reconsideration, which was denied by
the Court of Appeals.
Hence, this petition alleging that:
chanroble svirtua1awl ibra ry
A. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS ERRED
IN HOLDING THAT THE DISMISSAL OF PETITIONER WAS VALID,
DESPITE THE FACT THAT THERE IS CLEAR AND BLATANT VIOLATION
OF THE BASIC CONSTITUTIONAL RIGHTS OF THE HEREIN PETITIONER
BOTH SUBSTANTIVE AND PROCEDURAL DUE PROCESS.
B. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS IN
(SIC) DISMISSING THE RELIEFS FOR MORAL AND EXEMPLARY
DAMAGES AND ATTORNEYS FEES.6 cralawred
In our view, the only relevant issue for our resolution is whether or not
the petitioner was validly dismissed from employment on the ground
of serious misconduct and gross habitual neglect of duties, including
habitual tardiness and absenteeism.
Petitioner claims that his outright dismissal from employment was not
valid and too harsh and that he was not dismissed from employment
because of tardiness or absences but because he was among those
apprehended in a raid. Also, he was not accorded due process because
although his wife received the show cause notice, he did not have the
proper mind to reply as he was in jail and was psychologically
disturbed.
Considering the submissions of the parties as well as the records
before us, we find the petition without merit. Petitioners dismissal from
employment is valid and justified.
For an employees dismissal to be valid, (a) the dismissal must be for a
valid cause and (b) the employee must be afforded due process.7 cralaw red
Serious misconduct and habitual neglect of duties are among the just
causes for terminating an employee under the Labor Code of the
Philippines. Gross negligence connotes want of care in the
performance of ones duties.Habitual neglect implies repeated failure to
perform ones duties for a period of time, depending upon the
circumstances.8 The Labor Arbiters findings that petitioners habitual
absenteeism and tardiness constitute gross and habitual neglect of
duties that justified his termination of employment are sufficiently
supported by evidence on record. Petitioners repeated acts of
absences without leave and his frequent tardiness reflect his
indifferent attitude to and lack of motivation in his work. More
importantly, his repeated and habitual infractions, committed despite
several warnings, constitute gross misconduct unexpected from an
employee of petitioners stature. This Court has held that habitual
absenteeism without leave constitute gross negligence and is sufficient
to justify termination of an employee.9 c ralawre d
However, petitioner claims that he was dismissed not for his tardiness
or absences but for his arrest as a suspected drug user. His claim,
however, is merely speculative. We find such contention devoid of
basis. First, the decisions of the Labor Arbiter, the NLRC, and the Court
of Appeals are indubitable. They show that indeed petitioner had
incurred numerous and repeated absences without any leave.
Moreover, he was not punctual in reporting for work. These
unexplained absences and tardiness were reflected on the summary
reports submitted by WNC before the labor arbiter, but petitioner
failed to controvert said reports. Second, contrary to petitioners
assertion, the NLRC did not base its conclusions on the fact of the
arrest of petitioner for violation of Rep. Act No. 6425 but on the
totality of the number of infractions incurred by the petitioner during
the period of his employment in different positions he occupied at
WNC. Thus: chanrob lesvi rtua1aw lib rary
In the case of petitioner Valiao, his services were terminated by
private respondent after having been found guilty of serious
misconduct and gross habitual neglect of duty which was
aggravated by the January 28, 1993 incident. In exercising such
management prerogative, due process was properly observed.Private
respondent presented sufficient evidence to support its act in
terminating the services of petitioner. Private respondent took into
consideration the totality of the infractions or the number of
violations committed by petitioner during the period of
employment. Furthermore, it hardly needs reminding that, in view of
petitioners position and responsibilities, he must demonstrate a
scrupulous regard for rules and policies befitting those who would be
role models for their young charges.10 (Emphasis and italics supplied)
Indeed, even without the arrest incident, WNC had more than enough
basis for terminating petitioner from employment. It bears stressing
that petitioners absences and tardiness were not isolated incidents but
manifested a pattern of habituality. In one case, we held that where
the records clearly show that the employee has not only been charged
with the offense of highgrading but also has been warned 21 times for
absences without official leave, these repeated acts of misconduct and
willful breach of trust by an employee justify his dismissal and
forfeiture of his right to security of tenure.11 The totality of infractions
or the number of violations committed during the period of
employment shall be considered in determining the penalty to be
imposed upon an erring employee. The offenses committed by him
should not be taken singly and separately but in their totality. Fitness
28
for continued employment cannot be compartmentalized into tight
little cubicles of aspects of character, conduct, and ability separate and
independent of each other.12 cralawre d
Needless to say, so irresponsible an employee like petitioner does not
deserve a place in the workplace, and it is within the managements
prerogative of WNC to terminate his employment.Even as the law is
solicitous of the welfare of employees, it must also protect the rights of
an employer to exercise what are clearly management prerogatives.
As long as the companys exercise of those rights and prerogative is in
good faith to advance its interest and not for the purpose of defeating
or circumventing the rights of employees under the laws or valid
agreements, such exercise will be upheld.13 c ralaw red
Still, petitioner claims that he was not afforded due process so that his
dismissal from employment should be declared invalid. This contention
deserves scant consideration. The Court of Appeals held that the
records reveal that petitioner was afforded the twin requirements of
notice and hearing and was likewise given the opportunity to defend
himself before the investigating committee. We find no reason to set
aside these factual findings of the Court of Appeals as they are
supported by evidence on record. Besides, we may not review the
appellate courts findings of fact in an appeal via certiorari,14 since as a
rule, the Supreme Courts review is limited to errors of law allegedly
committed by the appellate court.15Judicial review of labor cases does
not go as far as to evaluate the sufficiency of evidence upon which the
Labor Arbiter and National Labor Relations Commission based their
determinations.16 cra lawred
In this case, petitioner was asked to explain his several absences and
tardiness on many occasions. A notice to explain was sent to him
regarding the arrest incident wherein he was able to reply. An
investigation committee was formed by WNC to investigate the arrest
incident and the absences and tardiness of petitioner. It must be
emphasized that proceedings of the committee were duly recorded,
and petitioner actively participated therein by answering the various
questions interposed by the panel members. Finally, a notice of his
termination was sent to petitioner, although he claims to have
received it late as he was in jail. It is an undeniable fact, however, that
his wife had actually received the notice in his house earlier, even
before petitioners termination and this matter was later communicated
to him.
At any rate, petitioner was given enough opportunity to be heard, and
his dismissal was based on valid grounds. The essence of due process
is simply an opportunity to be heard, or as applied to administrative
proceedings, an opportunity to explain ones side or an opportunity to
seek a reconsideration of the action or ruling complained of. A formal
or trial-type hearing is not at all times and in all instances essential, as
the due process requirements are satisfied where the parties are
afforded fair and reasonable opportunity to explain their side of the
controversy at hand. What is frowned upon is the absolute lack of
notice and hearing.17 cralawred
Finally, the Labor Arbiter found that petitioner is entitled to salary
differentials for the period of his preventive suspension, as there is no
sufficient basis shown to justify his preventive suspension. During the
pendency of the investigation, the employer may place the worker
concerned under preventive suspension if his continued employment
poses a serious and imminent threat to life or property of the
employer or of his co-workers.18 But in this case, there is no indication
that petitioner posed a serious threat to the life and property of the
employer or his co-employees. Neither was it shown that he was in
such a position to unduly influence the outcome of the investigation.
Hence, his preventive suspension could not be justified, and the
payment of his salary differentials is in order.
However, the award of attorneys fees to him cannot be sustained, in
view of our findings that petitioner was validly dismissed from
employment. Said award lacks legal basis and could not be granted
properly in this case.
WHEREFORE, the assailed Decision dated August 22, 2000 and
Resolution dated November 22, 2000 of the Court of Appeals in CA-
G.R. SP No. 55133 are AFFIRMED with MODIFICATIONin that the
award of attorneys fees is deleted. No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and
Azcuna, JJ., concur.
Endnotes:
1
Rollo, pp. 23-31. Penned by Associate Justice Remedios A. Salazar
Fernando, with Associate Justices Fermin A. Martin, Jr., and Salvador
J. Valdez, Jr. concurring.
2
Id. at45-46.
3
Id. at 26.
4
Id. at 64.
5
Id. at 31.
6
Id. at 14.
7
Sy v. Court of Appeals, G.R. No. 142293, 27 February 2003, 398
SCRA 301, 310.
8
JGB and Associates, Inc. v. NLRC, G.R. No. 109390, 7 March 1996,
254 SCRA 457, 463.
9
Club Filipino, Inc. v. Sebastian, G.R. No. 85490, 23 July 1992, 211
SCRA 717, 721.
10
Rollo, pp. 30-31.
29
11
Palagpag v. NLRC, G.R. No. 96646, 8 February 1993, 218 SCRA
510, 515.
12
National Service Corporation v. Leogardo, Jr., No. L-64296, 20 July
1984, 130 SCRA 502, 509.
13
Maya Farms Employees Organization v. NLRC, G.R. No. 106256, 28
December 1994, 239 SCRA 508, 515.
14
Arriola v. Mahilum, G.R. No. 123490, 9 August 2000, 337 SCRA 464,
469.
15
Industrial Insurance Company, Inc. v. Bondad, G.R. No. 136722, 12
April 2000, 330 SCRA 706, 713.
16
Damasco v. NLRC, G.R. NOS. 115755 & 116101, 4 December 2000,
346 SCRA 714, 722.
17
See Stayfast Philippines Corp. v. NLRC, G.R. No. 81480, 9 February
1993, 218 SCRA 596, 601.
18
Section 8, Rule XXIII, Book V, Rules and Regulations Implementing
the Labor Code, as amended by Dept. Order No. 9, Series of 1997.
FIRST DIVISION
[G.R. NO. 165268 November 8, 2005]
Challenge socks corporation, Petitioner, v. COURT OF APPEALS
(Former First Division), NATIONAL LABOR RELATIONS
COMMISSION (First Division), HON. ANTONIO R. MACAM, in his
capacity as Labor Arbiter and ELVIE BUGUAT, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of
Court assails the May 11, 2004 Decision1 of the Court of Appeals in
CA-G.R. SP No. 75761, and its September 13, 2004
Resolution2denying the motion for reconsideration.
The antecedent facts show that respondent Elvie Buguat was hired on
January 17, 1997 by petitioner Challenge Socks Corporation as
knitting operator.3 In the course of her employment, she incurred
absences and tardiness without prior approval and had been neglectful
of her duties.4 On May 25, 1998, she failed to check the socks she was
working on causing excess use of yarn and damage to the socks'
design. She was suspended for five days and warned that a repetition
of the same act would mean dismissal from the service.5 On February
2, 1999, she committed the same infraction and was given a
warning.6 Despite the previous warnings, Buguat continued to be
habitually absent and inattentive to her task. On March 1, 1999, she
again failed to properly count the bundle of socks assigned to her.
Thus, on March 2, 1999, petitioner terminated her services on grounds
of habitual absenteeism without prior leave, tardiness and neglect of
work.7
Thereafter, Buguat filed a complaint for illegal dismissal.8
On February 11, 2000, the labor arbiter9 rendered a Decision10 holding
that Buguat was illegally dismissed. The dispositive portion of the
decision reads:
WHEREFORE, following the pronouncement in the case of ALU-TUCP v.
NLRC (G.R. No. 120450, February 10, 1999), judgment is hereby
rendered ordering respondents to reinstate complainants without loss
of seniority rights and benefits, but without backwages.
SO ORDERED.11
The labor arbiter found Buguat's dismissal too harsh and
disproportionate to the infraction committed. It was observed that
counting volumes of socks is tedious and the worker is prone to
commit mistakes especially if the counting is done on a regular basis.
The labor arbiter ruled that mistake in counting bundles of socks is
tolerable and should be punished by suspension only.12
The National Labor Relations Commission (NLRC) adopted the findings
of the labor arbiter. It denied13petitioner's appeal and motion for
reconsideration.
Petitioner filed a petition for certiorari before the Court of Appeals
which rendered a Decision on May 11, 2004 reversing and setting
aside that of the labor arbiter and the NLRC, the dispositive portion of
which provides:
WHEREFORE, the Decision dated October 30, 2001 and the Order of
December 19, 2002 of the National Labor Relations Commission are
hereby REVERSED and SET ASIDE and a new one entered herein.
CHALLENGE SOCKS CORPORATION, having terminated private
respondent with just and valid cause but without observing the proper
procedure in terminating private respondent's services, is ordered to
pay ELVIE BUGUAT full backwages from the time her employment was
terminated on March 2, 1999 up to the time the herein decision
becomes final. For this purpose, this case is REMANDED to the
Regional Labor Arbiter for the computation of the backwages due
private respondent.
SO ORDERED.14
The appellate court found that there was just cause for terminating the
services of Buguat considering the series of infractions she
committed.15 However, it was noted that petitioner failed to comply
with the twin-notice requirement in terminating an employee hence,
the dismissal was considered ineffectual.16Petitioner was ordered to
pay Buguat her back wages computed from the time of her dismissal
up to the finality of the decision.17
Petitioner sought reconsideration of the appellate court's decision but
the same was denied on September 13, 2004.
Hence, this petition.
The issue for resolution is the validity of Buguat's termination.
30
One of the just causes for terminating an employment under Article
282 of the Labor Code is gross and habitual neglect by the employee
of her duties. This cause includes gross inefficiency, negligence and
carelessness. Such just causes is derived from the right of the
employer to select and engage his employees.18
In the instant case, there is no doubt that Buguat was habitually
absent, tardy and neglectful of her duties. We agree with the Court of
Appeals that:
Elvie's commission of three (3) violations of the company's rules and
regulations, including her unauthorized absences and tardiness, all
committed in the span of two years, shows that she did not only fail to
observe due diligence in performing her job, but she has little regard
for the consequences of her acts and inactions. She repeatedly
committed error in counting the socks to be given to the Looping
Section. As a knitting operator, Elvie was required to check the socks
she was working on and to count the bundles of socks she had to pack
to be forwarded to the Looping Section. Elvie did not question the
authenticity of the May 25, 1998 suspension letter and the February 2,
1999 memorandum'.
While a first violation could be considered excusable, repeated
commission of the same offense could be considered willful
disobedience. Elvie, despite the suspension and warning, continued to
disregard the company rules and regulations'.19
Habitual neglect implies repeated failure to perform one's duties for a
period of time. Buguat's repeated acts of absences without leave and
her frequent tardiness reflect her indifferent attitude to and lack of
motivation in her work. Her repeated and habitual infractions,
committed despite several warnings, constitute gross misconduct.
Habitual absenteeism without leave constitute gross negligence and is
sufficient to justify termination of an employee.20
We find the penalty of dismissal from the service reasonable and
appropriate to Buguat's infraction. Her repeated negligence is not
tolerable; neither should it merit the penalty of suspension only. The
record of an employee is a relevant consideration in determining the
penalty that should be meted out.21 Buguat committed several
infractions in the past and despite the warnings and suspension, she
continued to display a neglectful attitude towards her work. An
employee's past misconduct and present behavior must be taken
together in determining the proper imposable penalty.22 The totality of
infractions or the number of violations committed during the period of
employment shall be considered in determining the penalty to be
imposed upon an erring employee. The offenses committed by him
should not be taken singly and separately but in their totality. Fitness
for continued employment cannot be compartmentalized into tight
little cubicles of aspects of character, conduct, and ability separate and
independent of each other.23 It is the totality, not the
compartmentalization, of such company infractions that Buguat had
consistently committed which justified her dismissal.24
Besides, terminating an employment is one of petitioner's
prerogatives. As the employer, petitioner has the right to regulate,
according to its discretion and best judgment, all aspects of
employment, including work assignment, working methods, processes
to be followed, working regulations, transfer of employees, work
supervision, lay-off of workers and the discipline, dismissal and recall
of workers. Management has the prerogative to discipline its
employees and to impose appropriate penalties on erring workers
pursuant to company rules and regulations.25
This Court has upheld a company's management prerogatives so long
as they are exercised in good faith for the advancement of the
employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under
valid agreements.26
In the case at bar, petitioner exercised in good faith its management
prerogative as there is no dispute that Buguat had been habitually
absent, tardy and neglectful of her work, to the damage and prejudice
of the company. Her dismissal was therefore proper.
The law imposes many obligations on the employer such as providing
just compensation to workers, observance of the procedural
requirements of notice and hearing in the termination of employment.
On the other hand, the law also recognizes the right of the employer
to expect from its workers not only good performance, adequate work
and diligence, but also good conduct and loyalty. The employer may
not be compelled to continue to employ such persons whose
continuance in the service will patently be inimical to his interests.27
The employer has the burden of proving that the dismissed worker has
been served two notices: (1) one to apprise him of the particular acts
or omissions for which his dismissal is sought, and (2) the other to
inform him of his employer's decision to dismiss him.28
As found by the Court of Appeals, petitioner failed to comply with this
requirement, thus:
A review of the records shows that private respondent was served a
written termination notice on the very day she was actually dismissed
from the service. The case records are bereft of any showing that
Challenge Socks Corporation notified Elvie in advance of the charge or
charges against her. Likewise, she was not given an opportunity to
refute the charges made against her, thus, depriving her of the right
to defend herself. In other words, petitioner fell short in observing the
two-notice rule required by law.29
In Agabon v. National Labor Relations Commission,30 we upheld as
valid the dismissal for just cause although it did not comply with the
31
requirements of procedural due process. We ruled that while the 16
Id. at 37.
procedural infirmity cannot be cured, it should not invalidate the 17
Id. at 40.
dismissal. However, the employer should be held liable for non- 18
Meralco v. NLRC, 331 Phil. 838, 847 [1996].
compliance with the procedural requirements of due process.31 The 19
Rollo, pp. 36-37.
violation of Buguat's right to statutory due process by the petitioner 20
Valiao v. Court of Appeals, G.R. No. 146621, July 30, 2004, 435
warrants the payment of indemnity in the form of nominal damages in SCRA 543, 551.
the amount of P30,000, which is appropriate under the 21
Cosmos Bottling Corp. v. NLRC, 346 Phil. 127, 134-135 [1997].
circumstances.32 22
Id. at 135.
Conformably, the award of backwages in the present case should be 23
Valiao v. Court of Appeals, supra at 552-553.
deleted. Instead, private respondent should be indemnified in the 24
Meralco v. NLRC, supra at 848.
amount of P30,000.00 as nominal damages.33 25
Deles, Jr. v. NLRC, 384 Phil. 271, 281-282 [2000].
WHEREFORE, the May 11, 2004 Decision and the September 13, 26
Meralco v. NLRC, supra at 847.
2004 Resolution of the Court of Appeals in CA-G.R. SP No. 75761, 27
Agabon v. National Labor Relations Commission, G.R. No. 158693,
which declared that petitioner Challenge Socks Corporation did not November 17, 2004, 442 SCRA 573, 606-607.
comply with the statutory due process requirements in terminating the 28
Electro System Industries Corporation v. National Labor Relations
employment of private respondent Elvie Buguat, are AFFIRMED with Commission, et al., G.R. No. 165282, October 5, 2005.
the MODIFICATION that the award of backwages is DELETED. 29
Rollo, p. 37.
Petitioner is ordered to pay private respondent Elvie Buguat nominal 30
Supra.
damages in the amount of P30,000.00. 31
Id. at 609.
No costs. 32
Id. at 617; Electro System Industries Corporation v. National Labor
SO ORDERED. Relations Commission, et al., supra.
Endnotes: 33
Electro System Industries Corporation v. National Labor Relations
Commission, et al., supra.
*
On official leave. SECOND DIVISION
**
Acting Chairman. [G.R. NO. 166111 : August 25, 2005]
1
Rollo, pp. 29-41. Penned by Associate Justice Regalado E. Maambong STANDARD ELECTRIC MANUFACTURING
and concurred in by Associate Justices Cancio C. Garcia (now Associate CORPORATION, Petitioners, v. STANDARD ELECTRIC EMPLOYEES
Justice of the Supreme Court) and Renato C. Dacudao. UNION-NAFLU - KMU and ROGELIO JAVIER, Respondents.
2
Id. at 43-44. DECISION
3
Id. at 30. CALLEJO, SR., J.:
4
Id. at 31. Before us is a Petition for Review on Certiorari seeking to review the
5
Id. at 35. Decision1 and Resolution2 of the Court of Appeals (CA) in CA-G.R. SP
6
Id. No. 76657, which annulled and set aside the Resolution of the National
7
Id. Labor Relations Commission (NLRC) affirming the Labor Arbiter's
8
Id. at 13. Decision3 in NLRC NCR Case No. 00-08-04760-96.
9
Antonio R. Macam. Rogelio Javier was employed by the Standard Electric Manufacturing
10
Rollo, pp. 45-50. Corporation (SEMC) on January 15, 1973 as radial spot machine
11
Id. at 50. operator in its Production Department. Javier was a member of the
12
Id. at 49. Standard Electric Employees Union-NAFLU (Union).4
13
Id. at 51-57 & 58-60. Penned by Commissioner Vicente S. E. Veloso On July 31, 1995, Javier failed to report for work. He failed to notify
and concurred in by Commissioners Roy V. Seeres and Alberto R. the SEMC of the reason for his absences. On August 9, 1995, he was
Quimpo. arrested and detained for the charge of rape upon complaint of his
14
Id. at 40. neighbor, Genalyn Barotilla. After the requisite preliminary
15
Id. at 36. investigation, an Information for rape was filed in the Regional Trial
Court (RTC) of Pasig, docketed as Criminal Case No. 108593.5

32
On January 13, 1996, the SEMC received a letter6 from Javier, through
counsel, informing the SEMC that Javier was detained for the charge of
rape and for that reason failed to report for work. He requested the
SEMC to defer the implementation of its intention to dismiss him,
citing the ruling of this Court in Magtoto v. NLRC.7 The SEMC denied
Javier's request and issued a Memorandum terminating his
employment for (a) having been absent without leave (AWOL) for
more than fifteen days from July 31, 1995; and (b) for committing
rape.8
On May 17, 1996, the RTC issued an Order9 granting Javier's demurrer
to evidence and ordered his release from jail. Shortly thereafter, Javier
reported for work, but the SEMC refused to accept him back.
A grievance meeting between the Union, Javier and the SEMC was
held, but SEMC refused to re-admit Javier. On August 2, 1996, the
Union and Javier filed a Complaint10 for illegal dismissal against the
SEMC before the NLRC. He averred that since the reason for his
detention for rape was non-existent, the termination of his
employment was illegal. Javier cited the ruling of this Court in Magtoto
v. NLRC.11
For its part, the SEMC averred that Javier's prolonged absences caused
irreparable damages to its orderly operation; he had to be replaced so
that the continuity and flow of production would not be jeopardized. It
could not afford to wait for Javier's indefinite return from detention, if
at all. The SEMC insisted that conformably with its Rules and
Regulations, it was justified in dismissing Javier for being absent
without leave for fifteen days or so.
On January 14, 1997, the Labor Arbiter rendered judgment ordering
the dismissal of the complaint.12The Labor Arbiter ruled that the
complaint was within the exclusive jurisdiction of the Voluntary
Arbitrators or Panel of Arbitrators. On appeal, the NLRC reversed the
Labor Arbiter's decision
and ruled that the latter had jurisdiction over the complaint; it thus
ordered the remand of the case to the Labor Arbiter for resolution on
the merits.13
On August 16, 1999, the Labor Arbiter rendered judgment ordering the
dismissal of the complaint.14However, the SEMC was ordered to pay
separation pay to the complainant. The dispositive portion reads:
WHEREFORE, in view of the foregoing, the complaint for illegal
dismissal is hereby ordered DISMISSED for lack of merit.
The respondents Standard Electric Manufacturing Corporation and Mr.
Jose Uy are, however, ordered to pay complainant Rogelio Javier the
amount of SEVENTY-ONE THOUSAND SEVEN HUNDRED SIXTY PESOS
(P71,760.00) representing his financial assistance/separation pay.
SO ORDERED.15
On appeal, the NLRC affirmed the Labor Arbiter's ruling in its
Resolution of September 24, 2002. The NLRC declared that:
Appellants' contention is baseless. A perusal of the evidence on record
clearly shows that prior to his dismissal from his job by respondents-
appellees, he was made to explain his side (Exhibit "5," respondents'
Formal Offer of Evidence). Evidence on record further shows that a
grievance machinery as provided for in the CBA was activated by
respondents-appellees for the purpose of affording complainant a
chance to present his side prior to his dismissal. (Exhibits "4" to "4-b,"
respondents' Formal Offer of Evidence).
Considering the adequate evidence presented by respondents-
appellants on which the findings of the Labor Arbiter were based, this
Commission finds no merit on complainants-appellants' contention that
the Labor Arbiter had committed serious errors in his findings of facts
and the law in this instant case.
Hence, the assailed decision must stand for "the matter of evaluating
the merits and demerits of the case, as long as the Decision is
supported by the facts and the evidence, is left to the sound discretion
of the Labor Arbiter." (Metropolitan Bank and Trust Company v. NLRC,
et al., 235 SCRA 400, 403).
WHEREFORE, in the light of the foregoing premises, [the] Decision of
the Labor Arbiter dated August 16, 1999 is hereby AFFIRMED.
SO ORDERED.16
When the NLRC denied the motion for reconsideration of the said
decision, Javier and the Union filed a Petition for Certiorari with the
CA, questioning such ruling, as follows:
I
PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN
NOT HOLDING THAT RESPONDENT COMPANY VIOLATED PETITIONER
ROGELIO JAVIER'S RIGHT TO PRIOR NOTICE RELATIVE TO THE
LATTER'S DISMISSAL.
II
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN
HOLDING THAT PETITIONER ROGELIO JAVIER WENT AWOL (ABSENCE
WITHOUT LEAVE) FROM HIS JOB.
III
PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION IN NOT
APPLYING THE RULING IN MAGTOTO v. NLRC TO THE INSTANT
CASE.17
In the Decision18 dated August 19, 2004, the CA reversed the findings
of the Labor Arbiter and the NLRC. The fallo of the decision reads:
WHEREFORE, the NLRC's Resolution dated September 24, 2002
is ANNULLED and SET ASIDE. Private respondent Standard Electric
Manufacturing Corporation is
hereby ORDERED to REINSTATE Rogelio Javier to his former
33
position, without loss of seniority rights and other privileges
appurtenant thereto, with full backwages from the time of his
dismissal until he is actually reinstated, or to pay him separation pay,
if reinstatement is no longer feasible.
SO ORDERED.
The appellate court cited the rulings of this Court in Magtoto v.
NLRC19 and City Government of Makati City v. Civil Service
Commission20 as precedents. It declared that it was not Javier's
intention to abandon his job; his incarceration reasonably
justified his failure to report for work and negated the theory
that he was on AWOL. Likewise, the CA held that Javier could
not be terminated on the ground of commission of a crime, as
when he was acquitted of the rape charges, the second ground
relied upon by the
SEMC ceased to have factual basis. Hence, despite the fact that
Javier was allegedly afforded the opportunity to explain his
side, the same was unnecessary since, in the first place, there
was no just or authorized cause for the dismissal.
The motion for reconsideration seasonably filed by the SEMC on
August 19, 2004 was denied by the CA in its November 23, 2004
Resolution.21 Hence, this recourse.
The issues posed by the petitioner are the following:
I disciplinary action over an erring employee.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED
PATENT AND REVERSIBLE ERROR IN APPLYING THE CASE OF
MAGTOTO v. NLRC IN THIS CASE.
II
WHETHER OF NOT THE HONORABLE COURT OF APPEALS COMMITTED
PATENT AND REVERSIBLE ERROR IN APPLYING THE CASE OF CITY
GOVERNMENT OF MAKATI CITY IN THIS CASE.
III
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED
PATENT AND REVERSIBLE ERROR IN REINSTATING [RESPONDENT]
ROGELIO JAVIER AND GRANTING HIM FULL BACKWAGES.
IV
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED
PATENT AND REVERSIBLE ERROR INTOTALLY DISREGARDING THE
FINDINGS OF THE NATIONAL LABOR RELATIONS COMMISSION AND
THE LABOR ARBITER A QUO.22
The Court finds that the petition is bereft of merit.
The petitioner asserts that the ruling of the Court in Magtoto finds no
application in the present case. It argues that in Magtoto, no criminal
information was filed in the regular court against the employee, as the
city prosecutor found no probable cause to hold the respondent therein
for trial. The petitioner argues that respondent Javier was indicted for
the crime of rape in the RTC. Another difference, the petitioner points
out, is that the employee in the cited case was dismissed solely on
account of his absences duringhis imprisonment; respondent Javier
was terminated due to truancy prior to his detention from July 31,
1995, to his detention for rape on August 9, 1995, until his release on
May 24, 1996. Respondent Javier never informed the petitioner why he
was absent on the said dates, and subsequent thereto. It was only on
January 13, 1996 that respondent Javier, through his counsel,
informed the petitioner of his detention for rape for the first time.
The petitioner avers that the ruling of this Court in City Government of
Makati City is not applicable because respondent Javier was dismissed
on a demurrer to evidence, and not because he did not commit the
offense alleged. The case was dismissed because of the prosecution's
failure to prove his guilt beyond reasonable doubt. In marked contrast,
the petitioner notes, the employee in City Government of Makati
City was acquitted by reason of the prosecution's failure to prove her
complicity in the crime.
The petitioner maintains that the mere filing of the Information for the
crime of rape against respondent Javier rendered its Rules and
Regulations operational, particularly Serious Offense No. 7. It avers
that substantial proof, not clear and convincing evidence or proof
beyond reasonable doubt, is sufficient basis for the imposition of any
The petitioner's contentions are wrong.
Respondent Javier was dismissed by the petitioner effective February
5, 1996 for (a) being AWOL from July 31, 1995 up to January 30,
1996; and (b) committing rape. However, on demurrer to evidence,
respondent Javier was acquitted of the charge. With respondent
Javier's acquittal, the cause of his dismissal from his employment
turned out to be non-existent.
In the Magtoto case, Alejandro Jonas Magtoto was arrested by virtue
of an Arrest, Search and Seizure Order dated September 1, 1980. He
was
charged with violation of Article 136 (Conspiracy and Proposal to
Commit Rebellion) and Article 138 (Inciting to Rebellion or
Insurrection) of the Revised Penal Code (RPC). Although Magtoto
informed his employer and pleaded that he be considered as "on
leave" until released, his employer denied the request. On April 10,
1981, or about seven (7) months after his arrest, Magtoto was
released after the City Fiscal dismissed the criminal charges for lack of
evidence. On the same date, he informed his employer of his intent to
start working again, but the employer rejected the offer. In ruling that
his termination was illegal, the Supreme Court ruled as follows:
The employer tries to distance itself from the detention by stressing
that the petitioner was dismissed due to prolonged absence. However,
34
Mr. Magtoto could not report for work because he was in a prison cell.
The detention cannot be divorced from prolonged absence. One caused
the other. Since the causes for the detention, which in turn gave the
employer a ground to dismiss the petitioner, proved to be non-
existent, we rule that the termination was illegal and reinstatement is
warranted. A non-existent cause for dismissal was explained in Pepito
v. Secretary of Labor (96 SCRA 454).
"... A distinction, however, should be made between a dismissal
without cause and a dismissal for a false or non-existent cause. In the
former, it is the intention of the employer to dismiss his employee for
no cause whatsoever, in which case the Termination Pay Law would
apply. In the latter case, the employer does not intend to dismiss the
employee but for a specific cause which turns out to be false or non-
existent. Hence, absent the reason which gave rise to his separation
from employment, there is no intention on the part of the employer to
dismiss the employee concerned. Consequently, reinstatement is in
order. And this is the situation here. Petitioner was separated because
of his alleged involvement in the pilferage in question. However, he
was absolved from any responsibility therefor by the court. The cause
for his dismissal having been proved non-existent or false, his
reinstatement is warranted. It would be unjust and unreasonable for
the Company to dismiss petitioner after the latter had proven himself
innocent of the cause for which he was dismissed."23
The facts in Pedroso v. Castro24 are similar to the set of facts in the
present case. The petitioners therein were arrested and detained by
the military authorities by virtue of a Presidential Commitment Order
allegedly for the commission of Conspiracy to Commit Rebellion under
Article 136 of the RPC. As a result, their employer hired substitute
workers to avoid disruption of work and business operations. They
were released when the charges against them were not proven. After
incarceration, they reported back to work, but were refused admission
by their employer. The Labor Arbiter and the NLRC sustained the
validity of their dismissal. Nevertheless, this Court again held that the
dismissed employees should be reinstated to their former positions,
since their separation from employment was founded on
a false or non-existent cause; hence, illegal.
Respondent Javier's absence from August 9, 1995 cannot be deemed
as an abandonment of his work. Abandonment is a matter of intention
and cannot lightly be inferred or legally presumed from certain
equivocal acts. To constitute as such, two requisites must concur: first,
the employee must have failed to report for work or must have been
absent without valid or justifiable reason; and second, there must
have been a clear intention on the part of the employee to sever the
employer-employee relationship as manifested by some overt acts,
with the second element being the more determinative factor.
Abandonment as a just ground for dismissal requires clear, willful,
deliberate, and unjustified refusal of the employee to resume his
employment. Mere absence or failure to report for work, even after
notice to return, is not tantamount to abandonment.25
Moreover, respondent Javier's acquittal for rape makes it more
compelling to view the illegality of his dismissal. The trial court
dismissed the case for "insufficiency of evidence," and such ruling is
tantamount to an acquittal of the crime charged, and proof that
respondent Javier's arrest and detention were without factual and legal
basis in the first place.
The petitioner acted with precipitate haste in terminating respondent
Javier's employment on January 30, 1996, on the ground that he had
raped the complainant therein. Respondent Javier had yet to be tried
for the said charge. In fine, the petitioner prejudged him, and
preempted the ruling of the RTC. The petitioner had, in effect,
adjudged respondent Javier guilty without due process of law. While it
may be true that after the preliminary investigation of the complaint,
probable cause for rape was found and respondent Javier had to be
detained, these cannot be made as legal bases for the immediate
termination of his employment.
Moreover, the petitioner did not accord respondent Javier an
opportunity to explain his absences from July 31, 1995. The
petitioner's reliance on the alleged Letter dated August 17, 1995 is
misplaced. There is no evidence on record that respondent Javier
received such letter, and its
sudden presence is highly suspect. The Court agrees with respondent
Javier's observation that the letter was not mentioned nor annexed in
the petitioner's Position Paper, Rejoinder and even in its Opposition to
the Appeal. The letter surfaced only on a much later date, in 1999,
when it was formally offered in evidence26 and referred to in the
petitioner's Memorandum27 before the Labor Arbiter - a clear inference
that the said letter was but an afterthought to justify petitioner's
termination of respondent Javier's employment.
Further, we cannot subscribe to the petitioner's contention that the
due process requirement relative to the dismissal of respondent Javier
was duly complied with when he was allowed to explain his side during
the grievance machinery conferences. Indeed, in the case at bar, the
petitioner did not conduct any investigation whatsoever prior to his
termination, despite being informed of respondent Javier's
predicament by the latter's siblings, his Union and his counsel.28 The
meetings held pursuant to the grievance machinery provisions of the
collective bargaining agreement were only done after his dismissal had
already taken effect on February 5, 1996. Clearly, well-meaning these
conferences might be, they can not cure an otherwise unlawful
termination.
35
It bears stressing that for a dismissal to be validly effected, the twin 8
CA Rollo, p. 55.
requirements of due process - notice and hearing - must be observed. 9
CA Rollo, pp. 102-104.
In dismissing an employee, an employer has the burden of proving 10
Rollo, p. 318.
that the 11
Supra.
former worker has been served two notices: (1) one to apprise him of 12
CA Rollo, pp. 79-87.
the particular acts or omissions for which his dismissal is sought; and 13
CA Rollo, pp. 93-98.
(2) the other to inform him of his employer's decision to dismiss him. 14
Id. at 109-114.
As to the requirement of a hearing, the essence of due process lies in 15
Id. at 114.
an opportunity to be heard, and not always and indispensably in an 16
CA Rollo, pp. 27-28.
actual hearing.29 17
Id. at 12.
Finally, in line with the rulings of this Court in Magtoto and Pedroso on 18
Rollo, pp. 39-46.
the matter of backwages, respondent Javier is not entitled to any 19
Supra, see note 7.
salary during the period of his detention. His entitlement to full 20
G.R. No. 131392, 6 February 2002, 376 SCRA 248.
backwages commenced from the time the petitioner refused his 21
Rollo, pp. 47-48.
reinstatement. In the instant case, when respondent Javier was freed 22
Rollo, p. 20.
on May 24, 1996 by virtue of the judgment of acquittal dated May 17, 23
Magtoto v. NLRC, supra, pp. 64-65.
1996, he immediately proceeded to the petitioner but was not 24
No. L-70361, 30 January 1986, 141 SCRA 252.
accepted back to work; hence, the reckoning point for the grant of 25
R.P. Dinglasan Construction, Inc. v. Atienza, G.R. No. 156104, 29
backwages started therefrom. June 2004, 433 SCRA 263; Hantex Trading Co., Inc. v. Court of
IN LIGHT OF ALL THE FOREGOING, the instant petition is Appeals, G.R. No. 148241, 27 September 2002, 390 SCRA 181; Del
hereby DISMISSED for lack of merit. The assailed Decision of the Monte Philippines v. NLRC, G.R. No. 126688, 5 March 1998, 287 SCRA
Court of Appeals is AFFIRMED WITH MODIFICATION. Petitioner is 71; and Labor v. NLRC, G.R. No. 110388, 14 September 1995, 248
hereby ORDERED to reinstaterespondent Rogelio Javier to his former SCRA 183.
position or, if no longer possible, a substantially equivalent position 26
Rollo, pp. 200-203.
without loss of seniority rights and other privileges appurtenant 27
Id. at 190-199.
thereto, with full backwages from the time it refused to allow his 28
CA Rollo, p. 53.
reinstatement on May 24, 1996 until actually reinstated; or, if 29
Tan v. NLRC, G.R. No. 128290, 24 November 1998, 299 SCRA 169.
reinstatement is no longer feasible, to pay him separation pay FIRST DIVISION
equivalent to one (1) month salary for every year of service. [G.R. NO. 155264 : May 6, 2005]
Costs against the petitioner. FLOREN HOTEL and/or LIGAYA CHU, DELY LIM and JOSE CHUA
SO ORDERED. LIM, Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION,
Puno, (Chairman), Austria-Martinez, Tinga, and Chico- RODERICK A. CALIMLIM, RONALD T. RICO, JUN A. ABALOS,
Nazario, JJ., concur. LITO F. BAUTISTA and GLORIA B. LOPEZ,Respondents.
Endnotes: DECISION
QUISUMBING, J.:
1
Penned by Associate Justice Magdangal M. De Leon, with Associate Petitioners Floren Hotel, Ligaya Chu, Dely Lim and Jose Chua Lim seek
Justices Edgardo P. Cruz and Mariano C. Del Castillo, to annul the Decision,1 dated September 10, 2002, of the Court of
concurring; Rollo, pp. 39-40. Appeals in CA-G.R. SP No. 60685 insofar as it ruled that petitioners
2
Rollo, pp. 47-48. had constructively dismissed private respondents Roderick A. Calimlim
3
Penned by Labor Arbiter Fatima Jambaro-Franco. and Ronald T. Rico, hence the petitioners are liable to the private
4
CA Rollo, p. 80. respondents for their proportionate 13th month pay, service incentive
5
Id. at 52, 102. leave pay, and indemnity.
6
Id. at 53. At the time of their termination, private respondents Roderick A.
7
No. L-63370, 18 November 1985, 140 SCRA 58. Calimlim, Ronald T. Rico and Jun A. Abalos were working in the hotel
as room boys, private respondent Lito F. Bautista as front desk man,

36
and private respondent Gloria B. Lopez as waitress. They all started
working for the hotel in 1993, except for Jun A. Abalos who started
only in 1995.
In the afternoon of June 6, 1998, petitioner Dely Lim randomly
inspected the hotel rooms to check if they had been properly cleaned.
When she entered Room 301, she found private respondent Lito F.
Bautista sleeping half-naked with the air-conditioning on. Lim
immediately called the attention of the hotel's acting supervisor,
Diosdado Aquino, who had supervision over Bautista. Lim admonished
Aquino for not supervising Bautista more closely, considering that it
was Bautista's third offense of the same nature.
When she entered Room 303, she saw private respondents Calimlim
and Rico drinking beer, with four bottles in front of them. They had
taken these bottles of beer from the hotel's coffee shop. Like Bautista,
they had switched on the air conditioning in Room 303.
That same afternoon, Dely Lim prepared a memorandum for Bautista,
citing the latter for the following incidents: (1) sleeping in the hotel
rooms; (2) entertaining a brother-in-law for extended hours during
duty hours; (3) use of hotel funds for payment of SSS loan without
management consent; (4) unauthorized use of hotel's air-con; and (5)
failure to pay cash advance in the amount of P4,000.2
In the presence of Acting Supervisor Aquino as well as workers
Jennifer Rico, Romel Macaraeg, Mario Resquino and Charie Chua, Dely
Lim tried to give Bautista a copy of the memorandum but Bautista
refused to receive it. Bautista then went on absence without leave.
Calimlim and Rico, embarrassed by the incident, went home. When
they returned to work the next day, they were served with a notice3 of
suspension for one week.
Like Bautista, they refused to receive the notice of suspension, but
opted to serve the penalty. Upon their return on June 15, 1998, they
saw a memorandum4 dated June 13, 1998 on the bulletin board
announcing (a) the suspension as room boys of Calimlim and Rico, or
alternately, (b) returning to work on probation as janitors for the
following reasons: unsatisfactory work, having a drinking spree inside
the hotel's rooms, cheating on the Daily Time Record, being absent
without valid reason, leaving work during duty time, tardiness, and
sleeping on the job. The memorandum also included Calimlim and
Rico's new work schedule.
Calimlim and Rico submitted handwritten apologies5 and pleaded for
another chance, before they went AWOL (absent without leave).
On June 25, 1998,6 Calimlim, Rico and Bautista filed separate
complaints, for illegal dismissal and money claims, before the Labor
Arbiter in Dagupan City. Calimlim and Rico claimed they were
constructively dismissed, while Bautista claimed that Dely Lim orally
told him not to go back to work because he was already dismissed.
Abalos and Lopez later also filed separate complaints for
underpayment of wages, non-payment of their 13th month pay, and
service incentive leave pay. On July 7, 1998, after they stopped
working, Abalos and Lopez amended their complaints. They claimed
that petitioners orally dismissed them when they refused to withdraw
their complaints.
Petitioners for their part, alleged that they did not dismiss private
respondents but that private respondents had abandoned their jobs.7
Private respondents filed a manifestation and motion8 dated November
24, 1998, praying that petitioners be ordered to reinstate them to
their former positions since after all, according to petitioners, they
were not dismissed.
Petitioners opposed the motion and argued that private respondents
cannot be reinstated since they were not illegally dismissed but they
had abandoned their jobs and management simply considered them
dismissed for abandonment.9 There is no record, however, that the
Labor Arbiter resolved said motion.
On March 19, 1999, the Labor Arbiter dismissed the complaints but
ordered petitioners to pay private respondents their proportionate
13thmonth pay, and service incentive leave pay. He likewise ordered
petitioners to pay Calimlim and Rico indemnity. He decreed:
IN VIEW OF THE FOREGOING PREMISES, judgment is hereby rendered
as follows:
1. Declaring that the five complainants in these consolidated cases
were not dismissed illegally from their work but they abandoned their
work.
2. Ordering respondents Floren Hotel and/or Ligaya [Chu] and Dely
Joson Lim to pay the complainants proportionate 13thmonth pay for
1998 and incentive leave pay equivalent to two and one half days
salary (January to June 1998), computed as follows:
Proportionate 13th month pay:
a) Roderick Calimlim (daily wage as of June 4, 1998 = P148.00
30 days [=] P4,440 x 6 months (Jan. to June 1998) = P26,640
divided by 12 (one year) = P2,220.00;
b) Ronald Rico = P2,220.00
c) Jun Abalos = P2,220.00
d) Lito Bautista = P2,220.00
e) Gloria Lopez = P2,220.00
Service Incentive Leave:
37
 dismissal where they prayed for reinstatement, did not mean they
R. Calimlim (2 - days = P 369.00 abandoned their jobs. They stressed that the two elements of
salary) abandonment were not proven and that petitioners failed to comply
with the two-notice rule.13 Private respondents likewise insisted that
R. Rico = 369.00 damages were due them, because their dismissal was attended with
bad faith and malice.14
J. Abalos = 369.00 On March 22, 2000, the NLRC rendered its decision.15 It reversed the
L. Bautista = 369.00 decision of the Labor Arbiter and ordered the hotel management to
immediately reinstate complainants-appellants to their former
G. Lopez = 369.00 positions without loss of seniority rights, with full backwages and other
3. Ordering the same respondents to pay Roderick Calimlim and benefits until they are actually reinstated. In the event that
Ronald Rico one thousand five hundred pesos each as indemnity; reinstatement was no longer possible, the respondent-appellees should
Summary: pay herein private respondents their separation pay in addition to the
payment of their full backwages; their incentive leave pay and their
R. Calimlim = P4,089.00 13thmonth pay, together with P1,000 to each of them as indemnity.16
The NLRC concluded that petitioners failed to prove that private
R. Rico = 4,089.00 respondents had abandoned their work. Petitioners likewise failed to
J. Abalos = 2,589.00 serve private respondents notices of termination based on
abandonment. The NLRC added that Calimlim and Rico were
L. Bautista = 2,589.00 constructively dismissed when they were demoted from room boys to
janitors and reclassified as probationary employees.17 However, the
G. Lopez = 2,589.00 NLRC denied private respondents' claim for damages and attorney's
fees. It found no evidence that petitioners acted maliciously or in bad
TOTAL AWARD = P15,945.00 faith in dismissing the five private respondents.18
All other claims of the complainants including moral and exemplary Later, the NLRC also denied petitioners' motion for
damages are hereby denied/dismissed for want of merit. reconsideration.19 Hence, the petitioners appealed to the Court of
SO ORDERED.10 Appeals.20
The Labor Arbiter found that Calimlim, Rico, and Bautista did not On September 10, 2002, the Court of Appeals decided the petition as
report for work and they did not show any order of dismissal, thus follows:
constructively, they abandoned their work and were not illegally WHEREFORE, premises considered, the Court MODIFIES the Decision
dismissed. The Labor Arbiter also ruled that Calimlim and Rico's of the respondent NLRC in this wise: (1) The Court declares that the
demotion and reassignment were valid exercises of management private respondents Roderick A. Calimlim and Jose Abalos [should be
prerogatives. The reassignment was intended to enable management Ronald T. Rico] were illegally dismissed by petitioner Floren
to supervise them more closely and, in any event, did not involve a Hotel/Ligaya Chu who is ORDERED to reinstate them to their former
diminution of wages.11 The Labor Arbiter, however, held petitioners positions without loss of [seniority] rights, with full backwages and
liable for indemnity to Calimlim and Rico for not observing the twin other benefits until they are actually reinstated; but if reinstatement is
notices rule. no longer possible, Floren Hotel/Ligaya Chu shall pay their separation
On the absence of any suspension order or notice of pay in addition to their backwages. (2) Declaring private respondents
dismissal12 concerning Abalos and Lopez, the Labor Arbiter held that Lito Bautista, Jun Abalos and Gloria Lopez to have abandoned their
the allegation that they were orally dismissed was insufficient, self- employment, and, therefore, not entitled to either backwages nor
serving, and baseless. separation pay; and (3) ORDERING Floren Hotel/Ligaya Chu to pay all
Private respondents appealed to the National Labor Relations the private respondents their 13th month pay and incentive leave pay
Commission (NLRC). They averred that the Labor Arbiter committed as computed in the Decision of the Labor Arbiter, to wit:
grave abuse of discretion in ruling (1) that they abandoned their work, Proportionate 13th month pay:
and (2) that the immediate filing of their complaints for illegal

38
 change of their status from regular to probationary for other alleged
a) Roderick Calimlim (daily wage as of June 4, 1998 = plus
offenses for which they were not given notice.22
P148.00 x 30 days But the Court of Appeals held that the NLRC committed grave abuse of
P4,440 x 6 months (Jan. to June 1998) P26,640 divided discretion
by 12 in declaring that Bautista, Abalos and Lopez were illegally
dismissed, since they presented no other piece of evidence besides the
(one year) = P2,220.00; allegations in their position papers.23 The appellate court brushed aside
the issue that petitioners' failure to serve notices of termination was
b) Ronald Rico = P2,220.00 due to the immediate filing of the complaints for illegal dismissal which
c) Jun Abalos = P2,220.00 made the service of such notices superfluous.24
Petitioners received a copy of the decision on September 20, 2002. On
d) Lito Bautista = P2,220.00 October 3, 2002, they filed the instant appeal, raising the following
errors:
e) Gloria Lopez = P2,220.00 (a)
Service Incentive Leave: THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS
DISCRETION IN UPHOLDING THE FINDINGS OF THE RESPONDENT
R. Calimlim (2 - days = P 369.00 NATIONAL LABOR RELATIONS COMMISSION DECLARING
salary) RESPONDENTS CALIMLIM AND RICO TO HAVE BEEN CONSTRUCTIVELY
DISMISSED FROM THE SERVICE, SOLELY ON THE BASIS OF THE
R. Rico = 369.00 MEMORANDUM DATED JUNE 13, 1998. THE COURT OF APPEALS
MISINTERPRETED AND MISAPPRECIATED THE IMPORT OF THE SAID
J. Abalos = 369.00 MEMORANDUM VIS - -VIS THE RULING OF THE HONORABLE COURT
L. Bautista = 369.00 ON CONSTRUCTIVE DISMISSAL.
(b)
G. Lopez = 369.00 THE COURT OF APPEALS ERRED IN ORDERING THE PETITIONERS TO
3. Ordering the same respondents to pay Roderick Calimlim and PAY THE RESPONDENTS-EMPLOYEES THEIR PROPORTIONATE
Ronald Rico one thousand five hundred pesos each as indemnity; 13TH MONTH PAY AND SERVICE INCENTIVE LEAVE AND IN ORDERING
Summary: THE PETITIONERS TO PAY RESPONDENTS CALIMLIM AND RICO
P1,500.00 EACH AS INDEMNITY.25
R. Calimlim = P4,089.00 Private respondents, for their part, received a copy of the decision on
September 23, 2002. On October 7, 2002, the private respondents
R. Rico = 4,089.00 except Calimlim filed a motion for reconsideration. They pointed out
J. Abalos = 2,589.00 the typographical error in the dispositive portion of the Court of
Appeals decision which declared that it was Calimlim and a certain
L. Bautista = 2,589.00 Jose Abalos who were constructively dismissed.26
They raised the following errors:
G. Lopez = 2,589.00 ...
II. The Honorable Court gravely erred in holding that Lito Bautista,
TOTAL AWARD = P15,945.00 Gloria Lopez and Jun Abalos were not illegally dismissed as they
SO ORDERED.21 abandoned their jobs.
The Court of Appeals agreed with the NLRC that the June 13, 1998, III The Honorable Court gravely erred in giving due course to the
memorandum demoting Calimlim and Rico to janitors and reclassifying petition despite the fact that it was not sufficient in form as it was not
them as probationary employees constituted constructive discharge. accompanied by copies of all pleadings and documents relevant and
The Court of Appeals likewise ruled that their right to due process was pertinent thereto.27
violated when they were imposed the additional penalties of demotion On November 20, 2002, the Court of Appeals required management,
from room boys to janitors, reassignment as part-time employees, and herein petitioners, to comment on the motion. Upon receipt of

39
petitioners' comment, however, the Court of Appeals issued a
resolution on March 29, 2004, holding in abeyance the action on said
motion for reconsideration by the concerned employees, herein private
respondents, pending final resolution by this Court of the instant
petition.28
In this petition now before us, we find four issues for our resolution:
(1) whether the Court of Appeals erred in giving due course to the
petition for certiorari filed before the appellate court; (2) whether the
private respondents were illegally dismissed; (3) whether the Court of
Appeals erred in ordering petitioners to pay Calimlim and Rico
indemnity of P1,500; and (4) whether the appellate court erred in
ordering petitioners to pay all of private respondents their
proportionate 13th month pay and incentive leave pay.
On the first issue, private respondents argue that the failure of
petitioners to attach copies of the position papers to their petition
for certiorari before the Court of Appeals was fatal to their cause.
Private respondents point out that petitioners' allegation (that the
NLRC decision holding that Bautista, Abalos and Lopez had been
illegally dismissed) was not supported by substantial evidence. They
add that the NLRC erred in disregarding the material evidence adduced
by petitioners. Hence, it was essential that the evidence for the parties
contained in their position papers be attached to the petition as
required by Section 1, Rule 65 of the Rules of Court.29
We find no merit in private respondents' insistence on procedural
flaws. Acceptance of a Petition for Certiorari as well as the grant of due
course thereto is addressed to the sound discretion of the
court.30 Section 1, Rule 65 of the Rules of Court in relation to Section
3, Rule 46 of the same rules does not specify the precise documents,
pleadings or parts of the records that should be appended to the
petition other than the judgment, final order, or resolution being
assailed. The Rules only state that such documents, pleadings or
records should be relevant or pertinent to the assailed resolution,
judgment or orders.31 Here the pieces of evidence, which petitioners
alleged had been arbitrarily disregarded, were duly annexed to the
petition. Also, the material allegations of the position papers were
summarized and discussed extensively in the decision of the Labor
Arbiter, a copy of which was also made part of the petition. It does not
appear in this case that in deciding to give due course to the petition
for certiorari , the Court of Appeals committed any error that
prejudiced the substantial rights of the parties. There is, therefore, no
reason for this Court to disturb the appellate court's determination that
the copies of the pleadings and documents attached to the petition
were sufficient to make out a prima facie case.
Nonetheless, on the second issue, we find that the Court of Appeals
erred in reversing the NLRC decision and in holding that Bautista,
Abalos and Lopez were not illegally dismissed, but had abandoned
their jobs.
Petitioners claimed that all five private respondents were guilty of
abandoning their jobs. Thus, it was incumbent upon petitioners to
show that the two requirements for a valid dismissal on the ground of
abandonment existed in this case. Specifically, petitioners needed to
present, for each private respondent, evidence not only of the failure
to report for work or that absence was without valid or justifiable
reasons, but also of some overt act showing the private respondent's
loss of interest to continue working in his or her job.32
In our view, petitioners failed to adduce sufficient evidence to prove
the charge of abandonment. Petitioners merely presented joint
affidavits from hotel supervisors Agustin Aninag and Lourdes Cantago
and other hotel employees showing that Calimlim, Rico, and Bautista
simply went on absence without leave after they were confronted with
certain irregularities, and that Abalos and Lopez likewise just left their
employment, also without filing leaves of absence.33 Those joint
affidavits, however, are insufficient as they do not show that the
absence of Calimlim, Rico, Bautista, Abalos and Lopez were unjustified.
More important, they do not show any overt act that proves that
private respondents unequivocally intended to sever their working
relationship with the petitioners. We have held that mere absence
from work does not constitute abandonment.34
If it was true that private respondents abandoned their jobs, then
petitioners should have served them with a notice of termination on
the ground of abandonment as required under Sec. 2, Rule XIV, Book
V, Rules and Regulation Implementing the Labor Code, in effect at that
time. Said Section 2 provided that:
Notice of Dismissal. Any employer who seeks to dismiss a worker shall
furnish him a written notice stating the particular acts or omission
constituting the grounds for his dismissal. In cases of abandonment of
work, the notice shall be served at the worker's last known address.
But petitioners failed to comply with the foregoing requirement,
thereby bolstering further private respondents' claim that they did not
abandon their work but were illegally dismissed.35
Indeed, we find that none of the private respondents in this case had
any intention to sever their working relationship. Just days after they
were dismissed, private respondents Calimlim, Rico, Bautista, Abalos
and Lopez filed complaints to protest their dismissals. The well-
established rule is that an employee who takes steps to protest his
layoff cannot be said to have abandoned his work.36
That private respondents all desired to work in the hotel is further
shown by the fact that during the proceedings before the Labor
Arbiter, shortly after private respondents received petitioners' position
paper where the latter averred that private respondents were never
40
terminated, private respondents filed a manifestation and motion
asking that petitioners be ordered to allow them back to work. This is
nothing if not an unequivocal expression of eagerness to resume
working.
We reiterate here the settled rule that in illegal dismissal cases, the
employer bears the burden of showing that the dismissal was for a just
or authorized cause.37 Failure by the employer to discharge this
burden, as in this case, would necessarily mean that the dismissal is
not justified, and therefore illegal.38
As regards Calimlim and Rico, the NLRC further found that petitioners
constructively dismissed both. Before us, petitioners now argue that
the Court of Appeals misconstrued the memorandum of June 13, 1998.
They insist that they had no intention of dismissing Calimlim and Rico,
as shown by the very fact that the memorandum itself expressly
allows Calimlim and Rico to return to work after they submit their
written explanations for the drinking incident which happened on June
6, 1998.39 Rather than a constructive dismissal, petitioners argue that
the temporary transfer of Calimlim and Rico to janitorial positions was
a valid exercise of the management prerogative to assign their
employees to where they would be of the most benefit to the hotel.
This temporary reassignment, according to the management, was
intended solely to prevent Calimlim and Rico from repeating their
infractions by denying them access to the hotel rooms and keeping
them busy and easier to supervise in their new area assignments.40
Petitioners further argue that the terms of employment imposed in the
memorandum did not render continued employment impossible,
unreasonable or unlikely because, according to them, there was
neither diminution of pay nor demotion involved. They maintain that
room boys and janitors receive the same wages and that the only
difference between the two is that room boys clean the rooms while
janitors clean the common areas.41
We are not persuaded by petitioners' contention. For the transfer of
the employee to be considered a valid exercise of management
prerogatives, the employer must show that the transfer is not
unreasonable, inconvenient or prejudicial to the employee; neither
would it involve a demotion in rank or a diminution of his salaries,
privileges and other benefits. Should the employer fail to discharge
this burden of proof, the employee's transfer shall be tantamount to
constructive dismissal, which has been defined as a quitting because
continued employment is rendered impossible, unreasonable or
unlikely, as in an offer involving a demotion in rank and diminution in
pay.42
In this case, Calimlim and Rico were being forced to accept alternate
work periods in their new jobs as janitors, otherwise they would be
unemployed. Not only did their new schedule entail a diminution of
wages, because they would only be allowed to work every other week,
the new schedule was also clearly for an undefined period. The June
13, 1998, memorandum did not state how long the schedule was to be
effective. Indeed, it appears that the period could continue for as long
as management desired it. These unreasonable new terms of
employment were imposed in the memorandum of June 13, 1998,
which was issued two days before Calimlim and Rico returned from
their week-long suspension. They were imposed for alleged past
infractions for which neither Calimlim nor Rico was given the chance to
be heard. Under the circumstances, we fail to see how the temporary
transfer of Calimlim and Rico could be a valid exercise of management
prerogatives. Even the employer's right to demote an employee
requires the observance of the twin-notice requirement.43
As to the third issue, Article 279 of the Labor Code gives to Calimlim
and Rico the right to reinstatement without loss of seniority rights and
other privileges or separation pay in case reinstatement is no longer
possible, and to his full backwages, inclusive of allowances and other
benefits. It was thus error for the Court of Appeals to affirm the NLRC
decision to award Calimlim and Rico indemnity in addition to the
measure of damages provided in Article 279. The award of indemnity
is a penalty awarded only when the dismissal was for just or
authorized cause but where the twin-notice requirement was not
observed.44
With respect to the fourth issue, petitioners fault the appellate court
for failing to state why petitioners should pay respondents their
proportionate 13th month pay and service incentive leave pay.45 On
this matter, we find that the appellate court committed no error.
Petitioners did not question the propriety of the award of proportionate
13th month pay and service incentive leave in the Court of Appeals.
They assailed the NLRC decision on only one ground: "Respondent
NLRC committed grave abuse of discretion in reversing the Labor
Arbiter's decision insofar as it relates to the issues of illegal dismissal."
Hence, the correctness of the cited award in the NLRC ruling was never
brought before the appellate court and is deemed to have been
admitted by petitioners. It cannot therefore be raised anymore in this
petition. The office of a Petition for Review under Rule 45 is to review
the decision of the Court of Appeals, not the NLRC. The decision of the
NLRC as regards the award of 13th month pay and service incentive
leave pay became binding on petitioners because the failure to
question it before the Court of Appeals amounts to an acceptance of
the ruling. In any event, the award appears to us amply supported by
evidence and in accord with law.
WHEREFORE, the Decision dated September 10, 2002, of the Court of
Appeals in CA-G.R. SP No. 60685 is hereby MODIFIED. Petitioners
Floren Hotel/Ligaya Chu, Dely Lim, and Jose Chua Lim are held liable
41
for illegally dismissing private respondents Roderick A. Calimlim, 27
Id. at 264.
Ronald T. Rico, Jun A. Abalos, Lito F. Bautista and Gloria B. Lopez. 28
Id. at 371.
Petitioners are ordered, (1) to reinstate private respondents to their 29
Id. at 265-266.
former positions without loss of seniority rights, with full backwages 30
Serrano v. Galant Maritime Services, Inc., G.R. No. 151833, 7
and other benefits until they are actually reinstated or to pay their August 2003, 408 SCRA 523, 527.
separation pay in addition to their backwages, if reinstatement is no 31
Quintano v. NLRC, G.R. No. 144517, 13 December 2004, p. 11.
longer feasible; (2) to jointly and solidarily pay P2,589.00 to each of 32
Metro Transit Organization, Inc. v. NLRC, G.R. No. 119724, 31 May
the private respondents as proportionate 13th month pay and service 1999, 307 SCRA 747, 753-754.
incentive leave pay for the period January to June 1998, as computed 33
CA Rollo, pp. 47-48, 51, 59-60.
in the decision dated March 19, 1999, of the Labor Arbiter. No 34
Labor Congress of the Philippines v. NLRC, G.R. No. 123938, 21 May
pronouncement as to costs. 1998, 290 SCRA 509, 525 citing De Ysasi III v.NLRC, G.R. No. 104599,
SO ORDERED. 11 March 1994, 231 SCRA 173, 187.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and 35
Villaruel v. National Labor Relations Commission, G.R. No. 120180,
Azcuna, JJ., concur. 20 January 1998, 284 SCRA 399, 407.
Endnotes: 36
Nazal v. National Labor Relations Commission, G.R. No. 122368, 19
June 1997, 274 SCRA 350, 355.
1
Rollo, pp. 24-40. Penned by Associate Justice Hilarion L. Aquino, with
37
Me-shurn Corporation v. Me-shurn Workers Union-FSM, G.R. No.
Associate Justices Bienvenido L. Reyes, and Mario L. Guaria, III 156292, 11 January 2005, p. 10.
concurring.
38
Gabisay v. National Labor Relations Commission, G.R. No. 108311,
2
CA Rollo, p. 49. 18 May 1999, 307 SCRA 141, 148.
3
Id. at 50.
39
Rollo, p. 14.
4
Rollo, pp. 93-94.
40
Id. at 16-17.
5
CA Rollo, pp. 54-55.
41
Id. at 15-17.
6
June 25, 2000 in some parts of the records.
42
Mendoza v. Rural Bank of Lucban, G.R. No. 155421, 7 July 2004,
7
CA Rollo, pp. 198-201. 433 SCRA 756, 766.
8
Id. at 270-271.
43
See Jarcia Machine Shop and Auto Supply, Inc. v. NLRC, G.R. No.
9
Id. at 272-275. 118045, 2 January 1997, 266 SCRA 97, 109-110.
10
Rollo, pp. 68-69.
44
Agabon v. NLRC, G.R. No. 158693, 17 November 2004, p. 12.
11
CA Rollo, p. 109.
45
Rollo, p. 19.
12
Id. at 110-111. EN BANC
13
Id. at 76.
14
Ibid. [G.R. No. 117418. January 24, 1996.]
15
Id. at 70-84.
16
Id. at 83-84. STELLAR INDUSTRIAL SERVICES, INC., Petitioner, v. NATIONAL
17
Id. at 78-82. LABOR RELATIONS COMMISSION and ROBERTO H.
18
Id. at 82-83. PEPITO, Respondents.
19
Id. at 85.
20
Id. at 7-28. Belo, Gozon, Elma, Parel, Asuncion & Lucila, for Petitioner.
21
Rollo, pp. 39-40.
22
CA Rollo, pp. 255-257. Jose S. Torregoza, for Private Respondent.
23
Id. at 257-259.
24
Id. at 259. The Solicitor-General, for Respondent.
25
Rollo, p. 11.
26
CA Rollo, pp. 264-265.

42
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; TERMINATION OF
EMPLOYMENT; ABSENCE WITHOUT LEAVE AS A GROUND;
SUBSTANTIAL COMPLIANCE WITH COMPANY RULES REGARDING
ABSENCES SHOULD MILITATE EMPLOYEES DISMISSALS CASE AT
BAR. There was substantial compliance vital said company rule by
private Respondent. He immediately informed his supervisor at MBC-
PAL of the fact that he could not report for work by reason of illness.
At the hearing, it was also established without contradiction that
Pepito was able to talk by telephone to one Tirso Pamplona, foreman
at MBC-PAL, and he informed the latter that he would be out for two
weeks as he was not feeling well. Added to this is his letter to the chief
of personnel which states that, on November 2, 1990, he relayed to
his supervisor at MBC-PAL his reason for not reporting for work and
that, thereafter, he made follow-up calls to their office when he still
could not render services. As earlier noted, these facts were never
questioned nor rebutted by petitioner. While there is no record to show
that approval was obtained by Pepito with regard to his absences, the
fact remains that he complied with the company rule that in case of
illness necessitating absence of two days or more, the office should be
informed beforehand about the same, that is, on the first day of
absence. Since the cause of his absence could not have been
anticipated, to require prior approval would be unreasonable. On this
score, then, no serious misconduct may be imputed to Pepito.
Necessarily, his dismissal from work, tainted as it is by lack of just
cause, was clearly illegal. More importantly, private respondent duly
presented the requisite medical certificate.
2. ID.; ID.; PREVIOUS INFRACTION OF COMPANY RULES AS A
GROUND; MAY BE USED AS JUSTIFICATION FOR AN EMPLOYEES
DISMISSAL FROM WORK IN CONNECTION WITH A SUBSEQUENT
SIMILAR OFFENSE; CASE AT BAR. Petitioners reliance on Pepitos
past infractions as sufficient grounds for his eventual dismissal, in
addition to his prolonged absences, is likewise unavailing. The correct
rule is that previous infractions may be used as justification for an
employees dismissal from work in connection with a subsequent
similar offense. That is not the case here. Stellar contends that
Pepitos service record shows that he was under preventive suspension
in October, 1979 due to gambling and that, at various days of certain
months in 1986, 1987, and 1988, he was issued several warnings for
habitual tardiness. Then, in October, 1988, he was asked to explain
why he was carrying three sacks of rice in violation of company rules.
In the present case, private respondents absences, as already
discussed, were incurred with due notice and compliance with
company rules and he had not thereby committed a "similar offense"
as those he had committed in the past. Furthermore, as correctly
observed by the labor arbiter, those past infractions had either been
"satisfactorily explained, not proven, sufficiently penalized or condoned
by the Respondent." In fact, the termination notice furnished Pepito
only indicated that he was being dismissed due to his absences from
November 2, 1990 to December 10, 1990 supposedly without any
acceptable excuse therefor. There was no allusion therein that his
dismissal was due to his supposed unexplained absences on top of his
past infractions of company rules. To refer to those earlier violations
as added grounds for dismissing him is doubly unfair to
private Respondent. Significantly enough, no document or any other
piece of evidence was adduced by petitioner showing previous
absences of Pepito, whether with or without official leave.
3. ID.; LABOR RELATIONS; LABOR ORGANIZATION; DEDUCTIONS
FROM EMPLOYEES SALARY; REQUISITES FOR VALIDITY; NOT MET IN
CASE AT BAR. Regarding the amount deducted from Pepitos salary,
Stellar stresses that said deduction concerning death aid benefits is
lawful since these were made in accordance with Board Resolution No.
02-85 adopted on August 17, 1988 by the board of directors of the
Stellar Employees Association. However, Article 241(n) of the Labor
Code and the implementing rules thereon in Section 13(a), Rule VIII,
Book III disallow such deductions. Article 241(n) states that" (n)o
special assessment or other extraordinary fees may be levied upon the
members of a labor organization unless authorized by a written
resolution of a majority of all the members of a general membership
meeting duly called for the purpose. x x x." The deduction could be
characterized as a special assessment for a "Death Aid Program."
Consequently, a mere board resolution of the directors, and not by the
majority of all the members, cannot validly allow such deduction. Also,
a written individual authorization duly signed by the employee
concerned is a condition sine qua non therefor. Employees are
protected by law from unwarranted practices that have for their object
the diminution of the hard-earned compensation due them. Private
respondent herein must be extended that protection, especially in view
of his lowly employment status.
DECISION
43
REGALADO, J.:
Imputing grave abuse of discretion by public respondent as its cause
of concern in this special civil action for certiorari, petitioner Stellar
Industrial Services, Inc. (Stellar) seeks the annulment of the decision,
1 date May 31, 1994, of the National Labor Relations Commission in
NLRC NCR CA No. 004326-93 and its resolution of July 21, 1994
denying petitioners motion for reconsideration. Interestingly, this
recourse is the culmination of petitioners sustained corporate and
legal efforts directed against a mere janitor who was formerly
employed by it.
Stellar Industrial Services, Inc., an independent contractor engaged in
the business of providing manpower services, employed private
respondent Roberto H. Pepito as a janitor on January 27, 1975 and
assigned the latter to work as such at the Maintenance Base Complex
of the Philippine Airlines (MBC-PAL) in Pasay City. There, Pepito toiled
for a decade and a half. According to petitioner, private respondents
years of service at MBC-PAL were marred by various infractions of
company rules ranging from tardiness to gambling, but he was
nevertheless retained as a janitor out of humanitarian consideration
and to afford him an opportunity to reform. 2
Stellar finally terminated private respondents services on January 22,
1991 because of what it termed as Pepitos being "Absent Without
Official Leave (AWOL)/Virtual Abandonment of Work Absent from
November 2 December 10, 1990." Private respondent had insisted
in a letter to petitioner dated December 2, 1990, to which was
attached what purported to be a medical certificate, that during the
period in question he was unable to report for work due to severe
stomach pain and that, as he could hardly walk by reason thereof, he
failed to file the corresponding official leave of absence. 3
As petitioner disbelieved private respondents explanation regarding
his absences, the latter contested his severance from employment
before the Arbitration Branch of the National Labor Relations
Commission (NLRC) in Manila in a complaint docketed as NLRC NCR-
00-03-01869-91 for illegal dismissal, illegal deduction and
underpayment of wages under Wage Order NCR-001, with prayer for
moral and exemplary damages and attorneys fees. While the labor
arbiter was of the view that Pepito was not entitled to differential pay
under said wage order, or to moral and exemplary damages for lack of
bad faith on the part of petitioner, he opined that private respondent
had duly proved that his 39-day absence was justified on account of
illness and that he was illegally dismissed without just cause. 4
Thus the decision rendered on December 28, 1992 by Labor Arbiter
Manuel R. Caday decreed: jgc:chan roble s.com. ph
"WHEREFORE, judgment is hereby rendered declaring the dismissal of
the complainant as illegal and ordering the respondent to immediately
reinstate complainant to his former position as Utilityman, without loss
of seniority rights and with full backwages and other rights and
privileges appurtenant to his position until he is actually reinstated. As
computed, the judgment award in favor of the complainant is stated
hereunder:
Backwages 1/27/91 - 12/27/92
at P118.00 per day P82,550.83
Refund of amount
illegally deducted
(3 years) 288.00
Grand Total P82,838.83
=========
The respondent is further ordered to pay the complainant reasonable
attorneys fees equivalent to 10% of the amount recoverable by the
complainant." 5
As hereinbefore stated, said judgment of the labor arbiter was affirmed
by respondent commission. Petitioners subsequent motion for
reconsideration was likewise rebuffed by the NLRC, hence the present
remedial resort to this Court.
Petitioner contends that public respondent acted with grave abuse of
discretion when it discussed and resolved the issue of abandonment
which petitioner had not, at any time, raised before it for resolution.
Further, petitioner considers it patently erroneous for public
respondent to rule that the medical certificate adduced by Pepito
sufficiently established the fact of sickness on his part which thereby
justified his absences. Additionally, it claims that respondent
commission gravely erred when it did not carefully examine the
44
evidence, pointing out Pepitos errant behavior and conduct. 6
Petitioner argues, moreover, that the award of back wages and
attorneys fees was not justified considering that Pepito was validly
dismissed due to serious misconduct on his part. Lastly, petitioner
insists that the deductions it imposed upon and collected from Pepitos
salary was authorized by a board resolution of Stellar Employees
Association, of which private respondent was a member. 7 The Court,
however, is unable to perceive or deduce facts constitutive of grave
abuse of discretion in public respondents disposition of the
controversy which would suffice to overturn its affirmance of the labor
arbiters decision.
On the initial issue posed by petitioner, respondent commission should
indeed have refrained from passing upon the matter of abandonment,
much less from considering the same as the ground for petitioners
termination of private respondents services. The records of the case
indicate that Pepitos employment was cut short by Stellar due to his
having violated a company rule which requires the filing of an official
leave of absence should an employee be unable to report for work,
aside from the circumstance that Stellar did not find credible Pepitos
explanation that he was then suffering from severe stomach and
abdominal pains.
To be sure, public respondent may well have been misled by the fact
that petitioner, in dismissing Pepito, labelled his violation as "Absent
Without Official Leave (AWOL)/Virtual Abandonment. 8 Respondent
NLRC should have noted that the matter of abandonment was never
brought up as an issue before it and that Stellar never considered
Pepito as having abandoned his job. As a matter of fact, private
respondent was only considered by petitioner as absent until
December 10, 1990. 9 Pepito was dismissed from work simply for
going on leave without prior official approval and for failing to justify
his absence. This is evident from the fact that petitioner did not assail
Pepitos allegations that, at the start of his extended absence, he had
informed Stellar, through telephone calls to his superior at MBC-PAL,
that he should not report for work due to illness. Thus, while
abandonment is indisputably a valid legal ground for terminating ones
employment, 10 it was a non-issue in this dispute. Be that as it may,
that misapprehension of the NLRC on this particular issue is not to be
considered an abuse of discretion of such gravity as to constitute
reversible error.
In the main, therefore, what is truly at issue here is whether or not
serious misconduct for non-observance of company rules and
regulations may be attributed to Pepito and, if so, whether or not the
extreme penalty of dismissal meted to him by Stellar may be justified
under the circumstances. We resolve both issues in the negative.
Stellars company rules and regulations on the matter could not be any
clearer, to wit:
jgc:c hanro bles. com.ph
"Absence Without Leave
Any employee who fails to report for work without any prior approval
from his superior(s) shall be considered absent without leave.
In the case of an illness or emergency for an absence of not more than
one (1) day, a telephone call or written note to the head office, during
working hours, on the day of his absence, shall be sufficient to avoid
being penalized.
In the case of an illness or an emergency for an absence of two (2)
days or more, a telephone call to the head office, during regular
working hours, on the first day of his absence, or a written note to the
head office, (ex. telegrarn) within the first three (3) days of his
absence, and the submission of the proper documents (ex. medical
certificate) on the first day he reports after his absence shall be
sufficient to avoid being penalized.
1st offense three (3) days suspension
2nd offense seven (7) days suspension
3rd offense fifteen (15) days suspension
4th offense dismissal (with a period of one (1) year." 11
There was substantial compliance with said company rule by
private Respondent. He immediately informed his supervisor at MBC-
PAL of the fact that he could not report for work by reason of illness.
At the hearing, it was also established without contradiction that
Pepito was able to talk by telephone to one Tirso Pamplona, foreman
at MBC-PAL, and he informed the latter that he would be out for two
weeks as he was not feeling well. 12 Added to this is his letter to the
chief of personnel which states that, on November 2, 1990, he relayed
to his supervisor at MBC-PAL his reason for not reporting for work and
that, thereafter, he made follow-up calls to their office when he still
could not render services. 13 As earlier noted, these facts were never
questioned nor rebutted by petitioner.
45
While there is no record to show that approval was obtained by Pepito
with regard to his absences, the fact remains that he complied with
the company rule that in case of illness necessitating absence of two
days or more, the office should be informed beforehand about the
same, that is, on the first day of absence. Since the cause of his
absence could not have been anticipated, to require prior approval
would be unreasonable. On this score, then, no serious misconduct
may be Imputed to Pepito. Necessarily, his dismissal from work,
tainted as it is by lack of just cause, was clearly illegal.
More importantly, private respondent duly presented the requisite
medical certificate. True, Stellar did not accept the veracity of the
same, but it did so quite erroneously. Carlos P. Callanga, petitioners
vice-president for operations, interpreted the certificate submitted by
Pepito in the following strained and nitpicking manner: jgc:chan roble s.com .ph
"a) The medical certificate merely states that Pepito suffered from
alleged, abdominal pain from November 2, 1990 to December 14,
1990. It does not state that the abdominal pain was so severe as to
incapacitate him for (sic) work.
b) Because the medical certificate states that the abdominal pain was
merely alleged, I had reason to believe that the doctor who issued it
did not personally know if such abdominal pain really existed for the
period in question.
c) From the medical certificate, I gathered that the doctor who signed
it examined Pepito only on December 14, 1990, which is the date it,
appears to have been issued. It does not state that said doctor
actually treated Pepito for the period of his absence.
d) The medical certificate also says Pepito was suffering from alleged
abdominal pains until December 14, 1990, but that he could resume
work anytime thereafter. This implies that he was physically fit to
resume work anytime thereafter. However, our records show that
Pepito was absent only until December 10, 1990. If it is true that
Pepitos abdominal pains incapacitated him for (sic) work. he should
have been absent until December 14, 1990. These give me reason to
believe that the medical certificate was secured only as an
afterthought and does not satisfactorily explain Pepitos protracted
absence." 14
A careful perusal and objective appreciation of the medical certificate
in question, which was properly signed by a physician. whose
existence and professional license number was not questioned by
petitioner, convince us to conclude otherwise. Handwritten by the
issuing doctor, it states in no uncertain terms:
jgc:chanrobles. com.ph
"This is to inform that I had examined Roberto Pepito. He has already
recovered from his intestinal abdominal pains suffered last Nov. 2/90
to Dec. 14/90.
He may resume his work anytime." 15
Thus, nowhere in said certificate is there any indication that the
abdominal pain suffered by Pepito was only as alleged by him. It
definitely states that Pepito was personally examined by the physician
and it can be clearly deduced from the affirmative statements" (h)e
has already recovered . . ." and" (h)e may resume his work anytime"
that Pepito was really not in a position to report for work from
November 2 to December 14, 1990 on account of actual, and not
merely alleged, intestinal abdominal pains. The certificate further
confirms Pepitos earlier information given by him on November 2,
1990 and which he duly relayed to his supervisor as the true reason
for his inability to work. Callanga obviously misread, we hope
unwittingly, "intestinal abdominal pain" as "alleged abdominal pain." cralaw virt ua1aw lib ra ry
Again, there is no logic in Callangas assumption that the certificate
was obtained only as an afterthought. It should be noted that Callanga
required Pepito to make a written explanation regarding his absences
only on December 18, 1990. 16 Pepito accordingly complied with the
same and he attached therewith the medical certificate which showed
its date of issuance as December 14, 1990. 17 Thus, even before he
was made to explain his absences, he already had the medical
certificate to prove the reason therefor. To characterize the
procurement of the certificate as an afterthought is consequently
baseless, especially considering that it bears all the earmarks of
regularity in its issuance. Labor is entitled to at least elementary
fairness from management.
Petitioners reliance on Pepitos past infractions as sufficient grounds
for his eventual dismissal, in addition to his prolonged absences, is
likewise unavailing. The correct rule is that previous infractions may be
used as justification for an employees dismissal from work in
connection with a subsequent similar offense. 18 That is not the case
here. Stellar contends that Pepitos service record shows that he was
under preventive suspension in October, 1979 due to gambling and
that, at various days of certain months in 1986, 1987, and 1988, he
was issued several warnings for habitual tardiness. Then, in October,
1988, he was asked to explain why he was carrying three sacks of rice
46
in violation of company rules. petition of Stellar Industrial Services, Inc. is hereby DISMISSED for
lack of merit.
In the present case, private respondents absences, as already
discussed, were incurred with due notice and compliance with SO ORDERED.
company rules and he had not thereby committed a "similar offense"
as those he had committed in the past. Furthermore, as correctly Romero, Puno and Mendoza, JJ., concur.
observed by the labor arbiter, those past infractions had either been Endnotes:
"satisfactorily explained, not proven, sufficiently penalized or condoned
by the Respondent." In fact, the termination notice furnished Pepito
only indicated that he was being dismissed due to his absences from 1. Per Commissioner Rogelio I. Rayala, with the concurrence of
November 2, 1990 to December 10, 1990 supposedly without any Presiding Commissioner Edna Bonto-Perez.
acceptable excuse therefor. There was no allusion therein that his
dismissal was due to his supposed unexplained absences on top of his 2. Rollo, 9-10, 35, 43.
past infractions of company rules. To refer to those earlier violations
as added grounds for dismissing him is doubly unfair to 3. Ibid., 78-80; Annexes "J," "K," and "L," Petition.
private Respondent. Significantly enough, no document or any other
piece of evidence was adduced by petitioner showing previous 4. Ibid., 48-54.
absences of Pepito, whether with or without official leave.
5. Ibid.. 54-55
Regarding the amount deducted from Pepitos salary, Stellar stresses
that said deduction concerning death aid benefits is lawful since these 6. Ibid., 18.
were made in accordance with Board Resolution No. 02-85 adopted on
August 17, 1988 by the board of directors of the Stellar Employees 7. Ibid., loc. cit
Association. However, Article 241 (n) of the Labor Code and the
implementing rules thereon in Section 13(a), Rule VIII, Book III 8. Ibid., 80; Annex "L," Petition.
disallow such deductions. Article 241 (n) states that" (n)o special
assessment or other extraordinary fees may be levied upon the 9. Ibid., 63.
members of a labor organization unless authorized by a written
resolution of a majority of all the members of a general membership 10. Nueva Ecija I Electric Cooperative, Inc. (NEECO I) v. Minister of
meeting duly called for the purpose . . ."
cralaw virtua 1aw lib rary Labor, Et Al., G.R. No. 61965, April 3, 1990, 184 SCRA 25; Cando v.
National Labor Relations Commission, Et Al., G.R. No. 91344
The deduction could be characterized as a special assessment for a September 14, 1990, 189 SCRA 666.
"Death Aid Program." Consequently, a mere board resolution of the
directors, and not by the majority of all the members, cannot validly 11. Rollo, 51.
allow such deduction. Also, a written individual authorization duly
signed by the employee concerned is a condition sine qua non 12. Ibid., 44.
therefor. Employees are protected by law from unwarranted practices
that have for their object the diminution of the hard-earned 13. Ibid., 78, 44; Annex "J," Petition.
compensation due them. 19 Private respondent herein must be
extended that protection, especially in view of his lowly employment 14. Rollo, 63-64.
status.
15. Ibid., 79; Annex "K," Petition.
IN VIEW OF THE FOREGOING, no grave abuse of discretion having
been committed by respondent National Labor Relations Commission 16. Rollo, 77; Annex "I," Petition.
in its decision and resolution assailed in the case at bar, the instant

47
17. Ibid., 78-79; Annexes "J" and "K," Petition.
18. Filipro, Inc., v. Ople, Et Al., G.R. No. 72129, February 7, 1990, 182
SCRA 1.
19. Palacol, Et Al., v. Calleja, etc., Et Al., G.R. No. 85333, February 26,
1990, 182 SCRA 710.
SECOND DIVISION
[G.R. No. 49549. August 30, 1990.]
EVELYN CHUA-QUA, Petitioner, v. HON. JACOBO C. CLAVE, in his
capacity as Presidential Executive Assistant, and TAY TUNG
HIGH SCHOOL, INC., Respondents.
William C. Gunitang and Jaime Opinion for Petitioner.
Laogan Law Offices for Private Respondent.
DECISION
REGALADO, J.:
This would have been just another illegal dismissal case were it not for
the controversial and unique situation that the marriage of herein
petitioner, then a classroom teacher, to her student who was fourteen
(14) years her junior, was considered by the school authorities as
sufficient basis for terminating her services.
Private respondent Tay Tung High School, Inc. is an educational
institution in Bacolod City. Petitioner had been employed therein as a
teacher since 1963 and, in 1976 when this dispute arose, was the
class adviser in the sixth grade where one Bobby Qua was enrolled.
Since it was the policy of the school to extend remedial instructions to
its students, Bobby Qua was imparted such instructions in school by
petitioner. 1 In the course thereof, the couple fell in love and on
December 24, 1975, they got married in a civil ceremony solemnized
in Iloilo City by Hon. Cornelio G. Lazaro, City Judge of Iloilo. 2
Petitioner was then thirty (30) years of age but Bobby Qua, being
sixteen (16) years old, consent and advice to the marriage was given
by his mother, Mrs. Concepcion Ong. 3 Their marriage was ratified in
accordance with the rites of their religion in a church wedding
solemnized by Fr. Nick Melicor at Bacolod City on January 10, 1976. 4
On February 4, 1976, private respondent filed with the subregional
office of the Department of Labor at Bacolod City an application for
clearance to terminate the employment of petitioner on the following
ground: "For abusive and unethical conduct unbecoming of a dignified
school teacher and that her continued employment is inimical to the
best interest, and would downgrade the high moral values, of the
school." 5
Petitioner was placed under suspension without pay on March 12,
1976. 6 Executive Labor Arbiter Jose Y. Aguirre, Jr. of the National
Labor Relations Commission, Bacolod City, to whom the case was
certified for resolution, required the parties to submit their position
papers and supporting evidence. Affidavits 7 were submitted by
private respondent to bolster its contention that petitioner, "defying all
standards of decency, recklessly took advantage of her position as
school teacher, lured a Grade VI boy under her advisory section and
15 years her junior into an amorous relation." 8 More specifically,
private respondent raised issues on the fact that petitioner stayed
alone with Bobby Qua in the classroom after school hours when
everybody had gone home, with one door allegedly locked and the
other slightly open.
On September 17, 1976, Executive Labor Arbiter Jose Y. Aguirre, Jr.,
without conducting any formal hearing, rendered an "Award" in NLRC
Case No. 956 in favor of private respondent granting the clearance to
terminate the employment of petitioner. It was held therein that chanroble s.com:c ralaw:red
"The affidavits . . . although self-serving but were never disputed by
the respondent pointed out that before the marriage of respondent to
Bobby Qua, fourteen (14) years her junior and during her employment
with petitioner, an amorous relationship existed between them. In the
absence of evidence to the contrary, the undisputed written
testimonies of several witnesses convincingly picture the
circumstances under which such amorous relationship was manifested
within the premises of the school, inside the classroom, and within the
sight of some employees. While no direct evidences have been
introduced to show that immoral acts were committed during these
times, it is however enough for a sane and credible mind to imagine
and conclude what transpired and took place during these times. . . ."
9
48
Petitioner, however, denied having received any copy of the affidavits
referred to. 10
On October 7,1976, petitioner appealed to the National Labor Relations
Commission claiming denial of due process for not having been
furnished copies of the aforesaid affidavits relied on by the labor
arbiter. She further contended that there was nothing immoral, nor
was it abusive and unethical conduct unbecoming of a dignified school
teacher, for a teacher to enter into lawful wedlock with her student.
11
On December 27, 1976, the National Labor Relations Commission
unanimously reversed the Labor Arbiters decision and ordered
petitioners reinstatement with backwages, with the following specific
findings:
jgc:c hanro bles. com.ph
"Affiant Maselliones deposed and said that he saw appellant and Qua
sitting on the student desk inside a classroom after classes. The
depositions of affiants Despi and Chiu are of the same tenor. No
statements whatever were sworn by them that they were
eyewitnesses to immoral or scandalous acts.
x x x In thus reconsidering his earlier decision, public respondent reasoned
"Even if we have to strain our sense of moral values to accommodate
the conclusion of the Arbiter, we could not deduce anything immoral or
scandalous about a girl and a boy talking inside a room after classes
with lights on and with the door open.
x x x whose interest must be held paramount in the school community, and
"Petitioner-appellee naively insisted that the clearance application was
precipitated by immoral acts which did not lend dignity to the position
of appellant. Aside from such gratuitous assertions of immoral acts or
conduct by herein appellant, no evidence to support such claims was
introduced by petitioner-appellee. We reviewed the sequence of events
from the beginning of the relationship between appellant Evelyn Chua
and Bobby Qua up to the date of the filing of the present application
for clearance in search of evidence that could have proved detrimental
to the image and dignity of the school but none has come to our
attention. . . . 12
The case was elevated by private respondent to the Minister of Labor
who, on March 30, 1977, reversed the decision of the National Labor
Relations Commission. The petitioner was, however, awarded six (6)
months salary as financial assistance. 13
On May 20, 1977, petitioner appealed the said decision to the Office of
the President of the Philippines. 14 After the corresponding exchanges,
on September 1, 1978 said office, through Presidential Executive
Assistant Jacobo C. Clave, rendered its decision reversing the appealed
decision. Private respondent was ordered to reinstate petitioner to her
former position without loss of seniority rights and other privileges and
with full back wages from the time she was not allowed to work until
the date of her actual reinstatement. 15
Having run the gamut of three prior adjudications of the case with
alternating reversals, one would think that this decision of public
respondent wrote finis to petitioners calvary. However, in a resolution
dated December 6, 1978, public respondent, acting on a motion for
reconsideration 16 of herein private respondent and despite opposition
thereto, 17 reconsidered and modified the aforesaid decision, this time
giving due course to the application of Tay Tung High School, Inc. to
terminate the services of petitioner as classroom teacher but giving
her separation pay equivalent to her six (6) months salary. 18
out in his manifestation/comment filed on August 14, 1979 in this
Court in the present case: chanroble s virtualawl ibra ry chan roble s.com:c han robles. com.ph
"That this Office did not limit itself to the legal issues involved in the
case, but went further to view the matter from the standpoint of policy
which involves the delicate task of rearing and educating of children
on this basis, this Office deemed it wise to uphold the judgment and
action of the school authorities in terminating the services of a teacher
whose actuations and behavior, in the belief of the school authorities,
had spawned ugly rumors that had cast serious doubts on her
integrity, a situation which was considered by them as not healthy for
a school campus, behaving that a school teacher should at all times
act with utmost circumspection and conduct herself beyond reproach
and above suspicion;" 19
In this petition for certiorari, petitioner relies on the following grounds
for the reversal of the aforesaid resolution of public respondent, viz:
libra ry
chan rob1e s virtual 1aw
1. The dismissal or termination of petitioners employment, despite
Tay Tungs claim to the contrary, was actually based on her marriage
with her pupil and is, therefore, illegal.
49
2. Petitioners right to due process under the Constitution was violated
when the hearsay affidavits of Laddy Maselliones, Eleuterio Despi, Pina
D. Chiu, and Ong Lee Bing, were admitted and considered in evidence
without presenting the affiants as witnesses and affording the
petitioner the right to confront and cross examine them.
3. No sufficient proofs were adduced to show that petitioner committed
serious misconduct or breached the trust reposed on her by her
employer or committed any of the other grounds enumerated in Article
283 (Now Article 282) of the Labor Code which will justify the
termination of her employment. 20
We first dispose of petitioners claim that her right to due process was
violated. We do not agree. There is no denial of due process where a
party was afforded an opportunity to present his side. Also, the
procedure by which issues are resolved based on position papers,
affidavits and other documentary evidence is recognized as not
violative of such right. Moreover, petitioner could have insisted on a
hearing to confront and cross-examine the affiants, but she did not do
so, obviously because she was convinced that the case involves a
question of law. Besides, said affidavits were also cited and discussed
by her in the proceedings before the Ministry of Labor.
Now, on the merits. Citing its upright intention to preserve the respect
of the community toward the teachers and to strengthen the
educational system, private respondent submits that petitioners
actuations as a teacher constitute serious misconduct, if not an
immoral act, a breach of trust and confidence reposed upon her and,
thus, a valid and just ground to terminate her services. It argues that
as a school teacher who exercises substitute parental authority over
her pupils inside the school campus, petitioner had moral ascendancy
over Bobby Qua and, therefore, she must not abuse such authority
and respect extended to her. Furthermore, it charged petitioner with
having allegedly violated the Code of Ethics for teachers the pertinent
provision of which states that a "school official or teacher should never
take advantage of his/her position to court a pupil or student. 21
On the other hand, petitioner maintains that there was no ground to
terminate her services as there is nothing wrong with a teacher falling
in love with her pupil and, subsequently, contracting a lawful marriage
with him. She argued that she was dismissed because of her marriage
with Bobby Qua. This contention was sustained in the aforesaid
decision of the National Labor Relations Commission thus: chan robles v irt ualawli bra ry chan roble s.com:c han robles. com.ph
". . . One thing, however, has not escaped our observation: That the
application for clearance was filed only after more than one month
elapsed from the date of appellants marriage to Bobby Qua. Certainly,
such belated application for clearance weakens instead of
strengthening the cause of petitioner-appellee. The alleged immoral
acts transpired before the marriage and if it is these alleged
undignified conduct that triggered the intended separation, then why
was the present application for clearance not filed at that time when
the alleged demoralizing effect was still fresh and abrasive?" 22
After a painstaking perusal of the records, we are of the considered
view that the determination of the legality of the dismissal hinges on
the issue of whether or not there is substantial evidence to prove that
the antecedent facts which culminated in the marriage between
petitioner and her student constitute immorality and or grave
misconduct. To constitute immorality, the circumstances of each
particular case must be holistically considered and evaluated in the
light of prevailing norms of conduct and the applicable law. Contrary to
what petitioner had insisted on from the very start, what is before us
is a factual question, the resolution of which is better left to the trier of
facts.
Considering that there was no formal hearing conducted, we are
constrained to review the factual conclusions arrived at by public
respondent, and to nullify his decision through the extraordinary writ
of certiorari if the same is tainted by absence or excess of jurisdiction
or grave abuse of discretion. The findings of fact must be supported by
substantial evidence; otherwise, this Court is not bound thereby. 23
We rule that public respondent acted with grave abuse of discretion.
As vividly and forcefully observed by him in his original decision: jgc: chan roble s.com.p h
"Indeed, the records relied upon by the Acting Secretary of Labor
(actually the records referred to are the affidavits attached as Annexes
A to D of the position paper dated August 10, 1976 filed by appellee
at the arbitration proceedings) in arriving at his decision are
unbelievable and unworthy of credit, leaving many questions
unanswered by a rational mind. For one thing, the affidavits refer to
certain times of the day during off-school hours when appellant and
her student were found together in one of the classrooms of the
school. But the records of the case present a ready answer: appellant
was giving remedial instruction to her student and the school was the
most convenient place to serve the purpose. What is glaring in the
affiants is the complete absence of specific immoral acts allegedly
committed by appellant and her student. For another, and very
important at that, the alleged acts complained of invariably happened
50
from September to December, 1975, but the disciplinary action
imposed by appellee was sought only in February, 1976, and what is
more, the affidavits were executed only in August, 1976 and from all
indications, were prepared by appellee or its counsel. The affidavits
heavily relied upon by appellee are clearly the product of after-
thought. . . . The action pursued by appellee in dismissing appellant
over one month after her marriage, allegedly based on immoral acts
committed even much earlier, is open to question. The basis of the
action sought is seriously doubted; on the contrary, we are more
inclined to believe that appellee had certain selfish, ulterior and
undisclosed motives known only to itself." 24
As earlier stated, from the outset even the labor arbiter conceded that
there was no direct evidence to show that immoral acts were
committed. Nonetheless, indulging in a patently unfair conjecture, he
concluded that "it is however enough for a sane and credible mind to
imagine and conclude what transpired during those times." 25 In
reversing his decision, the National Labor Relations Commission
observed that the assertions of immoral acts or conducts are
gratuitous and that there is no direct evidence to support such claim,
26 a finding which herein public respondent himself shared.
We are, therefore, at a loss as to how public respondent could adopt
the volte-face in the questioned resolution, which we hereby reject,
despite his prior trenchant observations hereinbefore quoted. What is
revealing, however, is that the reversal of his original decision is
inexplicably based on unsubstantiated surmises and non sequiturs
which he incorporated in his assailed resolution in this wise:cha nrob les law l ibra ry
". . . While admittedly, no one directly saw Evelyn Chua and Bobby
Qua doing immoral acts inside the classroom, it seems obvious and
this Office is convinced that such a happening indeed transpired within
the solitude of the classroom after regular class hours. The marriage
between Evelyn Chua and Bobby Qua is the best proof which confirms
the suspicion that the two indulged in amorous relations in that place
during those times of the day..." 27
With the finding that there is no substantial evidence of the imputed
immoral acts, it follows that the alleged violation of the Code of Ethics
governing school teachers would have no basis. Private respondent
utterly failed to show that petitioner took advantage of her position to
court her student. If the two eventually fell in love, despite the
disparity in their ages and academic levels, this only lends substance
to the truism that the heart has reasons of its own which reason does
not know. But, definitely, yielding to this gentle and universal emotion
is not to be so casually equated with immorality. The deviation of the
circumstances of their marriage from the usual societal pattern cannot
be considered as a defiance of contemporary social mores.
It would seem quite obvious that the avowed policy of the school in
rearing and educating children is being unnecessarily bannered to
justify the dismissal of petitioner. This policy, however, is not at odds
with and should not be capitalized on to defeat the security of tenure
granted by the Constitution to labor. In termination cases, the burden
of proving just and valid cause for dismissing an employee rests on the
employer and his failure to do so would result in a finding that the
dismissal is unjustified.
The charge against petitioner not having been substantiated, we
declare her dismissal as unwarranted and illegal. It being apparent,
however, that the relationship between petitioner and private
respondent has been inevitably and severely strained, we believe that
it would neither be to the interest of the parties nor would any prudent
purpose be served by ordering her reinstatement.
WHEREFORE, the petition for certiorari is GRANTED and the resolution
of public respondent, dated December 6, 1978 is ANNULLED and SET
ASIDE. Private respondent Tay Tung High School, Inc. is hereby
ORDERED to pay petitioner backwages equivalent to three (3) years,
without any deduction or qualification, and separation pay in the
amount of one (1) month for every year of service.
SO ORDERED.
Melencio-Herrera, Paras and Padilla, JJ., concur.
Sarmiento, J., is on leave.
Endnotes:
1. Rollo, 189.
2. Ibid., 84.
3. Ibid., 14; Annex A, Petition.
4. Ibid., id.,: Annex B. id.
5. Ibid., id., Annex C, id.
51
6. Ibid., 43, Annex I, id.
SECOND DIVISION
7. Annexes N-1 to N-4, Petition. G.R. No. 130473. October 21, 1998
8. Rollo, 15; Annex F, Petition. ELIZABETH
RAMOS, Petitioner, v. NATIONAL LABOR
9. Rollo, 60-61.
RELATIONS COMMISSION (Third
10. Ibid., 74. Division) LABOR ARBITER JOSE G. DE
11. Ibid., 73-75. VERA AND U.S. EMBASSY FILIPINO
12. Ibid., 85-87.
EMPLOYEES CREDIT COOPERATIVE
(USECO) and its President, MARVIN
13. Ibid., 111-114.
RAMOS, Respondents.
14. Ibid., 115-122. DECISION
15. Ibid., 137. PUNO, J.:
16. Ibid., 138-142.
This is a petition for certiorari filed by
Elizabeth Ramos to reverse the ruling of the
17. Ibid., 143-144.
National Labor Relations
18. Ibid., 146. Commission1 affirming her suspension and
19. Ibid., 180-181. dismissal from employment for loss of trust
20. Ibid., 22.
and confidence.
In 1978, petitioner was employed as a
21. Ibid., 127.
bookkeeper-accountant by respondent
22. Ibid., 87. United States Embassy Filipino Employees
23. Llobrera v. National Labor Relations Commission, Et Al., 162 SCRA Credit Cooperative (USECO).2 Nine years
788 (1988). later, she was promoted to the position of
24. Rollo. 135-136. Management Assistant. Her latest salary
25. Ibid., 60-61.
was P18,278.46 per month.
In 1993, the members of USECO elected a
26. Ibid., 86.
new set of Board of Directors. The Board,
27. Ibid., 148. led by its President, respondent Marvin

52
Santos, created an Audit and Inventory
Committee (AIC) to determine whether
USECO has a sound financial management
and control mechanism.
The committee unearthed anomalies in
USECOs lending transactions. Its findings
were taken up in the June 4, 1993 meeting
of the Board of Directors. Petitioner and her
co-employees, Luz Coronel and Nanette
Legaspi, were called to shed light on some
items in the Audit Committee Report, to wit:
1. Unrecorded Loans
xx xx xx xx
The case of Aida Halasan (former USECO
Assistant Treasurer) was particularly
discussed in regard to her previous loan
amounting to P76,140 which the AIC
discovered as unrecorded in her ledger. The
transaction was recorded in the Cash
Disbursement book and the check was
issued for the net amount of P74,417. Her
ledger also showed no record of payment in
any manner.
2. Fabricated Ledger
Alex Lopez and Steve Roldans true ledgers
were hidden by Beth Ramos (herein
petitioner) and Luz Coronel and new ones
were fabricated to conceal their loans
amounting to more than the P120,000 limit.
x x x Luz explained that she was given
instructions to keep them from the Audit
Committees knowledge. x x x
3. Falsification of documents
Beth admitted her serious offense in regard
to falsification of documents.
4. Accommodations of Payroll Checks
USECO staff granted a special privilege to
certain employees regarding the
encashment of payroll checks one day in
advance of the date on the check. It was
stopped earlier in the past as it added to the
normal workload and was deemed to be
disadvantageous for the USECO because the
interest to be earned by the money for that
day has been lost.
5. Encashment of Check/CPAs
Why was Beths signature/initial needed for
Citibank to encash the check when the
signatures of the authorized officers already
appear on the check?
Why were CPAs in the past released and
encashed without the authorized signatures?
6. Resigned Members
When asked by the Board to explain
how recently resigned members and
other resigned employees in the past
53
were able to secure loans, Beth replied
that she just wanted to help members
without regard to existing policies.
- Raquel Maniquiz case Raquel was able to
make a loan amounting to P80,000 after she
resigned and her loan application was
approved only by Aida Halasan (?). Beth
Ramos indicated that Raquel intended to
pay said loan thru her CSR payment and
terminal leave pay. x x x
Aside from granting Raquel the loan
of P80,000 she was allowed to withdraw her
remaining deposit with the USECO. Beth
Ramos was asked to explain how this
withdrawal was made possible. As she
was unable to give the answer during
the meeting, she was asked to include
it in her written reply.
xx xx xx xx
8. Unrecorded Loan of Resigned Members
Batoys case was classified under this
irregularity which the AIC discovered during
the internal audit. Batoys loan was recorded
in the cash disbursement book in the name
of E. Ramos. However, E. Ramos ledger
does not show a record of said loan.
Beth Ramos was required by the board
to include her explanation of this case
in her written explanation.
9. Withdrawal of more than the deposits.
Paladays case was mentioned under this
irregularity. It was mentioned, however,
that there could have been an error in the
running balance.
Another case is Rafael Tans over withdrawal
which AIC considers not in error in the
running balance but an accommodation
since he made a deposit of the same
amount the following day. (emphasis ours)
On June 17, 1993, respondent Ramos
directed petitioner to submit her written
explanation on the aforementioned
irregularities.
In her letter, dated June 18, 1993,
petitioner made the following explanation:
x x x I believe that the President was then,
as he is now fully aware of the prevailing
conditions in USECUs (sic) operations with
respect to loan processing and approval. To
support my statement that the loans are
approved based on prerogatives of
individuals in authority, I respectfully invite
the Presidents attention to the letter of Mr.
Franco dated March 15, 1993, in which he
very succinctly expressed his views about
54
loans and I quote Personally, I would rather
violate an existing rule that jeopardize (sic)
the welfare of USECU members since most
of their reasons were to defray their
medical/hospital expenses (and) of that of
their dependents. This view is not restricted
to Mr. Franco, but (was) likewise held and
maintained by previous Boards these past
many, many years.
Given in the context of our culture the terms
of employer-employee relationship, it is
unfortunate that the USECU Staff had to
resort to creating dummy records. But
since the loans are duly acknowledged by
the borrowers in other legitimate
documents, it is readily apparent that the
records were made simply to
accommodate those borrowers beyond
the authorized limits, but never, never to
defraud USECU. In this regard, the President
is respectfully urged to consider the
positions held by the concerned borrowers
not only in the USECU hierarchy when the
loans were obtained, but also their positions
in their respective places of work within the
U.S. Mission. It would have been the height
of naivete for the USECU Staff to impose the
USECU rules and act holier than thou in
contravention of prevailing practice as very
well expressed in Mr. Francos letter. It is
pointed out that these borrowers
exceeding the prescribed limits must be
fully aware of their financial status
each and every time they submitted
applications for additional loans. And in
the absence of authority superior to the
Board and mere employees of the Board,
where could the USECU Staff go, assuming
that for a moment for the sake of
discussion, that the staff did not subscribe
to the practice?
On July 20, 1993, petitioner was
preventively suspended for thirty (30) days.
On August 19, 1993, petitioner was placed
on forced leave with pay, pending the
completion of the investigation.
USECO also commissioned an external
auditing firm, J.D. Cayetano & Associates, to
examine the irregularities discovered in its
lending practices. The external auditor not
only confirmed the irregularities but also
discovered shortages in bank deposits
by P360,964.38.
The Board of Directors held another meeting
to study the report of the external auditor.
It noted overages in the loan receivables in
55
the amount of P2,275,544.38. The overages
were attributed to several factors, i.e., non-
recording of loan payments and/or
unauthorized or fictitious loans which were
entered in the Cash Disbursement Book but
not in the individual subsidiary ledgers.
On September 17, 1993, USECO dismissed
the petitioner for loss of trust and
confidence. Petitioner countered with a
complaint3 against USECO for illegal
dismissal, illegal suspension, underpayment
of salary, moral damages and attorneys
fees. She prayed for her reinstatement with
backwages, or in the alternative, for the
payment of separation pay.
In a Decision4 dated April 24, 1995, Labor
Arbiter Jose G. De Vera sustained the
suspension and dismissal of petitioner but
ordered the payment of her unpaid salary.
Its dispositive portion reads:
WHEREFORE, all the foregoing premises
being considered, judgment is hereby
rendered declaring the complainants
(petitioners) preventive suspension and
dismissal from employment as just and valid
and perforce the complaint for
reinstatement/separation pay, moral
damages and attorneys fees is dismissed for
lack of merit. And on the complaint for
unpaid salaries, the respondent company is
hereby ordered to pay complainant the sum
of P18,278.46.
Petitioner appealed to the National Labor
Relations Commission (NLRC). In a
Decision5 dated February 18, 1997, the
NLRC reversed the labor arbiter. USECOs
first motion for reconsideration was denied
for lack of merit.6 Undaunted, USECO filed a
Second Motion for Reconsideration.7 In its
Resolution dated May 6, 1997, the NLRC
granted the motion and reinstated the
decision of the labor arbiter.8 The relevant
portion of the resolution reads:
x x x (w)e cannot blame respondents from
suspending complainant (petitioner).
Obviously, the provision of law for the
immediate suspension of what is believed to
be a dishonest employee is an appropriate
measure of self-preservation, for the
continuance in office of such an employee
poses grave danger to the viability and
continued existence of the cooperative.
In view of all the foregoing circumstances,
we find that there is indeed justifiable cause
for complainants dismissal on the ground of
breach of trust. There can be no doubt that
56
complainants continuance in the clearly
sensitive and fiduciary position of
Management Assistant would patently
inimical to the cooperatives interest. It
would be oppressive and unjust to order the
respondent to take her back; for the law, in
protecting the rights of the worker,
authorizes neither oppression nor self-
destruction of the employer.
WHEREFORE, the instant motion is hereby
GIVEN DUE COURSE. The Decision of 18
February 1997 as well as the Resolution of
26 March 1997 of this Commission are
hereby SET ASIDE and the 24 April 1995
decision of the Labor Arbiter, REINSTATED
and AFFIRMED.
It was petitioners turn to move for a
reconsideration on the ground that a second
motion for reconsideration is not allowed
under the New Rules of Procedure of the
NLRC. The motion was denied in a
Resolution dated August 29, 1997.9 The
NLRC ruled:
Indeed, the rule is always in favor of
liberality in the construction of procedural
laws so that the real matter in dispute, as in
the instant case, may be submitted and
decided properly and in accordance with the
law and established jurisprudence. Rigid
specifications (Rules of Procedure) set by
the human mind may, at times, be relaxed
so as to give way to the sense of fair play as
recognized by equity when the peculiar
circumstances of a case, like the one at
bench, so warrant. After all, the Rules of
Procedure were never intended to override
the ends of justice.
xxx xxx xxx
WHEREFORE, premises considered, the
Motion for Reconsideration is hereby
DENIED.
SO ORDERED.
Hence, the present petition which poses
two (2) important issues: one is
substantive, whether there is just cause
for petitioners suspension and
dismissal, and the other is procedural,
whether the NLRC committed grave
abuse of discretion in granting private
respondents second motion for
reconsideration.
We dismiss the petition.
There is no question that the position of
petitioner as Management Assistant
requires a high degree of trust and
57
confidence. Her duties involve the
following:
1. Independently conceives and
prepares monthly financial statements
and bank reconciliation statements;
2. Renders budgetary advices to the
Board of Directors and monitors the
Unions marketable securities and
investments.
3. Pre-audits loan applications and
vouchers, prepares checks, effects
deposits to the bank and performs
USECUs (sic) small scale payroll.
4. Reconciles ledgers, maintains the
Cash Disbursement books, prepares
correspondences and supervises the
activities of the U.S. Embassy Credit
Union.
5. Supervises the accounting system
and is responsible for overall general
upkeep of the USECU office and
oversees the Unions central record
files.
Loss of confidence is a valid ground for
dismissal of an employee.10 In the case
at bar, USECO proved that its loss of
confidence on petitioner has a rational
basis. The findings of the labor arbiter
on this factual issue are supported by
the evidence and we quote:
The evidence of irregular and
anomalous transactions in the lending
operations of USECO is quite
insurmountable. These were initially
discovered by the Audit and Inventory
Committee when it embarked on the
examination of pertinent records, books
of accounts, reports and other papers
covering transactions for the period
from November 1, 1991 up to March 31,
1993. Due to these irregularities and
anomalies, not only were established
policies of USECO violated but also the
specter of huge losses looms inasmuch
as there is no assurance that
outstanding loans granted to some
fortyfour (44) resigned members
amounting to P1,047,015.45 may be
collected.
Foremost among the policies that were
ignored are those enumerated in USECO
Circular No. 91-02, as amended by
USECO Circular No. 92-03 (Exh. 1 and
2) specifying the following criteria
before any loan may be extended:
58
1. Loans are available to all members
regardless of grade, level, provided, the
borrower-members application is
equivalent to 120% of his/her total
gross annual salary, fringe benefits
included, but not to
exceed P120,000.00, provided further ,
that his/her pay check should not be
less than 50% of his/her gross pay per
pay period.
2. A borrower-members savings
(including his share capital) must be no
less than 50% of the amount being
loaned, prior to the submission of the
loan application (with guarantor) or
75% (without guarantor).x x x.
xx xx xx xx
4. Withdrawals will be authorized,
provided that at least 50% of the loan
balance (with guarantor) will remain in
his/her savings deposit or at least 75%
if without guarantor.
5. No new loans may be granted unless
50% of the loan has been paid.
6. Loan applications from
over P50,000.00 to P120,000.00 must
be pre-audited by the management
staff, recommended for approval by the
Credit Committee and must be
approved by all members of the Board
of Directors. Loan applications
of P50,000.00 and below must be
approved by the Credit Committee.
7. Loans shall be extended only to
members who have subscribed and fully
paid the required 100 shares
or Pl,000.00 share capital.
Based on the report of the Audit and
Inventory Committee (Exh. "3") as well
as the report of the external auditor,
J.D. Cayetano & Associates (Exh. "9"),
there were six (6) cooperative
members who were extended loans
more than the allowed maximum
of P120,000.00, namely, Luz Coronel
- P278,500.00; Myrna Legaspi
- P153,275.00; Primitivo
Roldan P336,855.00; Cipriano Beltran
- P135,000.00; Guillermo Corospe
- P175,511.00; and Alejandro Lopez
- P1,331,725.00. Of their total loan
of P2,410,866.00, there is an excess
of P1,690,866.0 over the maximum
allowable loan limit. One of the
established control measures provided
in the USECO Circulars aforementioned
59
is the pre-audit of loan applications by
the complainant in her capacity as
management assistant. Apparently, she
failed in her duty as such.
"The audit reports also show that there
are thirty-three (33) borrowers who
were able to make out loans although
their paid-in shares were less than 50%
of the amount borrowed. Of the total
loans of P3,985,830.00, the required
paid-in shares should have
been P1,992,916.00, but these thirty-
three (33) member-borrowers only
have a cumulative deposit
of P584,362.00. Again, there appears to
be a failure on, the part of the
complainant in the exercise of her pre-
audit functions.
"Further, it appears from the audit
reports that there are twenty-nine (29)
loan applications with a total
of P107,740.00 that were granted
without the required approval from the
majority of the Board of Directors.
Certainly, as a pre-auditor the
complainant may not pretend not to
know this.
"More serious violation appears in the
grant of loans to resigned employees
who automatically became non-
members upon their resignation. There
are forty-four (44) of them with an
aggregate loan of P1,047,015.45.
Collecting this amount from said
borrowers is quite difficult at this point.
"The irregularities, deficiencies, or
nonconformity with established rules or
policies that attended the
abovementioned loans could not have
escaped the complainant's notice being
the designated pre-audit personnel.
Had she diligently stuck to her, role as
such, these questionable loans could
not have been extended for she may
deny the pre-audit of the subject loan
applications for failure to comply with
established policies. Or better still, she
could always bring her observations to
the board and recommend denial of
said loan applications. The conclusion
of this Arbitration Branch is that
nothing of this sort was done by the
complainant.
"Complainant was also found on audit
that she signed without authority cash
60
payment advices(CPAS) on five (5)
occasions, instead of the authorized
signatories.
"There are cases of unrecorded
loans such as that obtained by Adelaida
Halasan on December 12, 1991 in the
amount of P76,417.00; it was found out
that the transaction was not posted in
the ledger of Ms. Halasan and there was
no record of subsequent payments.
Another unrecorded loan is that made
out in the name of Benedicto Batoy
which stirs (sic) a mystery on the
matter of how the loan was granted.
We quote the Committee Report (Exh.
"3", p. 19), as follows:
'This member resigned June 23, 1986.
he was granted a loan amount to
(sic) P5,000.00 on March 4, 1993 per
Vou. no. C-131 and Check no. 651991
was issued (Exhibit 17).
'A review of the application shows that
it was not signed by Mr. Batoy. There
were (sic) no approval from any of the
Board of Directors. A name of the
company (PCC Construction Company)
was written on the bottom part of the
application.
'This particular transaction was
recorded in the Cash Disbursement
Book under the name of E. Ramos.
However, this was not posted on E.
Ramos' ledger nor was there a record of
payment. There was no ledger made for
Mr. Batoy during FY 1992 to post this
transaction.
'Further, review of pertinent records
shows that Ch #651991 is missing on
the file of paid checks. The bank
statement, however, shows that the
check was presented/cleared to the
bank.'
The Complainant was also found to
have fabricated ledgers to conceal the
correct balance of a borrower. The
Audit report states:
'During the time that audit is ongoing,
it was discovered that Mr. Lopez has an
additional two (2) sets of ledgers. The
first ledger has a deposit balance
of P56,920.00, loan balance
of P585,800.00 as of March 4, 1993.
The second ledger has a zero deposit
and a loan balance of P835,620.00 for
the same date.
61
'When questioned, Beth Ramos and Luz
Coronel admitted that the last two
ledgers are the correct account
balances of Mr. Lopez. The first ledger
which was presented during the audit
was a fabricated one. They confessed
that they attempted to conceal the
correct balance of Mr. Lopez by creating
another ledger.
'Further investigation revealed that
USECO staff also fabricated the 1992
ledger of Mr. Lopez. A review of 1992
records shows the existence of two (2)
ledgers. The first ledger has a deposit
of P58,980.58 and loan balance
of P623,800.00. The second ledger has
a zero deposit and loan balance
of P844.620.00 (Exh. 131, p. 22).
Capping the foregoing irregularities
abovestated is the finding of the
external auditor of a shortage in the
cash in bank in the amount
of P360,964.61, not to mention
overages in loans receivable in the sum
of P2,275,544.38." (emphasis ours)
Petitioner's explanation that the "loan
practices" were made for the benefit of
the borrowing members and not to
defraud USECO cannot exonerate her.
As aptly pointed out by the Solicitor
General, her unsound practices
endangered the financial condition of
USECO because of the possibility that
the loans could not be collected at all.
We also do not agree that petitioner
was denied due process before she was
suspended and later dismissed. The
records show that on June 4, 1993,
petitioner was called by the USECO
Board of Directors and confronted with
the findings of the Audit, and Inventory
Committee showing the irregularities
she committed. On June 17, 1993, she
was asked to explain in writing these
irregularities. The next day, petitioner
submitted her written explanation.
Thus, petitioner cannot complain that
she did not understand the charges
against her. She is educated and she
immediately explained her side. Due
process simply demands an opportunity
to be heard and this opportunity was
not denied her.
We also hold that the NLRC did not
commit grave abuse of discretion in
entertaining the second motion for
62
reconsideration filed by USECO. Section
14 of the Rules of the NLRC provides:
"Section. 14. Motions for
Reconsideration.--Motions for
reconsideration of any order, resolution
or decision of the Commission shall not
be entertained except when based on
palpable or patent errors, provided that
the motion is under oath and filed
within ten (10) calendar days from
receipt of the order, resolution or
decision, with proof of service that a
copy of the same has been furnished,
within the reglementary period, the
adverse party, and provided further
that only one such motion from the
same party shall be entertained."
The NLRC initially reversed the ruling of
the labor arbiter on the grounds that:
(1) petitioner was denied procedural
due process and (2) the criminal case
for estafa filed against her has been
dismissed by the Manila Prosecutor's
Office for insufficiency of evidence,
particularly, for lack of proof that the
USECO was damaged by the acts
attributed to petitioner.
These are patent errors. As discussed
above, petitioner was not denied due
process. Similarly, it is a well
established rule that the dismissal of
the criminal case against an employee
shall not necessarily be a bar to his
dismissal from employment on the
ground of loss of trust and
confidence.11 The NLRC corrected these
patent errors when it granted private
respondent's second motion for
reconsideration. Section 14 of the NLRC
rules cannot be construed as to prevent
the NLRC from relieving itself from
patent errors in order to render justice.
Technical rules of procedure are not
meant to frustrate but to facilitate
justice. This norm finds more
application in administrative agencies
which were created to dispense justice
with greater freedom from the
strictures of technical rules of
procedure.
WHEREFORE, premises considered, the
petition is dismissed for lack of merit.
No costs.
SO ORDERED.
63
Melo, (Acting Chairman), Mendoza, and On 1 July 1998 Joan Florendo-Flores filed with the Regional Arbitration
Martinez, JJ., concur. Branch of the National Labor Relations Commission (NLRC) an
amended complaint for constructive dismissal against GLOBE, Lazaro,
Endnotes: Galang, and Cacholo M. Santos, her immediate superior, Luzon Head-
Regional Sales. In her affidavit submitted as evidence during the
1 NLRC Case No. 00-10-6600-93. arbitration proceedings, Florendo-Flores bared that Cacholo M. Santos
2
USECO is a duly registered cooperative which extends credit facility never accomplished and submitted her performance evaluation report
for the benefit of its members who are employees of the U.S. Embassy thereby depriving her of salary increases, bonuses and other
and its allied organizations, including USAID, USVA, USIS, Peace Corps, incentives which other employees of the same rank had been
consular offices, etc. receiving; reduced her to a house-to-house selling agent (person-to-
3
Docketed as NLRC-NCR CASE NO. 00-10-06600-93. person sales agent or direct sales agent) of company products
4 Rollo, pp. 37-49.
("handyphone") despite her rank as supervisor of company dealers
5
Id., pp. 52-69; Penned by Commissioner Ireneo B. Bernardo and
concurred in by Commissioners Lourdes C. Javier and Joaquin A. and agents; never supported her in the sales programs and
Tanodra. recommendations she presented; and, withheld all her other benefits,
6
Rollo, pp. 73-74. i.e., gasoline allowance, per diems, representation allowance, and car
7 Id., pp. 94-115.
maintenance, to her extreme pain and humiliation. 3
8 Id., pp. 77-86.
9
Id., pp. 88-92. GLOBE and its co-petitioners claimed that after receiving her salary in
10 Article 282 of the Labor Code, as amended.
11 Dole Philippines, Inc. v. NLRC, 123 SCRA 673 (1983). the second week of May 1998 Florendo-Flores went AWOL (Absent
Without Leave) without signifying through letter or any other means
SECOND DIVISION
that she was resigning from her position; that notwithstanding her
absence and the filing of her case, respondent Florendo-Flores
[G.R. No. 150092. September 27, 2002.]
employment was not terminated as shown by the fact that salary was
still provided her until July 1998 to be released upon her presentation
GLOBE TELECOM, INC., DELFIN LAZARO, JR., and ROBERTO
of the attendance-record sheet indicating that she already returned
GALANG, Petitioners, v. JOAN FLORENDO-FLORES, Respondent.
and reported for work; that she continued to have the use a of
company car and company "handyphone" unit; that she was replaced
DECISION
only when her absence became indefinite and intolerable as the
marketing operations in Northern Luzon began to suffer; that during
the pre-trial conference it was learned that Florendo-Flores complaint
BELLOSILLO, J.: rested on her alleged personal and private disagreement with her
immediate superior Cacholo M. Santos; that there was no official act
from GLOBE or from other officers of the company, including
This is a petition for review under Rule 45 of the Rules of Court respondents Lazaro and Galang, which called for Florendo-Flores
seeking to annul and set aside the Decision 1 of the Court of Appeals termination, diminution in rank, seniority and benefits, or would imply,
of 25 May 2001 in CA-G.R. SP No. 60284 which affirmed the Decision even remotely, any of the same; and, that Florendo-Flores filed the
of the National Labor Relations Commission of 28 January 2000 in complaint without going through the grievance process of GLOBEs
NLRC RAB-CAR 05-0170-98, NLRC NCR CA No. 020270-99. 2 Human Resources Department and without informing its officers of her
problems with Cacholo M. Santos.
Petitioner GLOBE TELECOM, INC. (GLOBE) is a corporation duly
organized and existing under the laws of the Philippines. Petitioners Labor Arbiter Monroe C. Tabingan declared Florendo-Flores to have
Delfin Lazaro Jr. was its President and Roberto Galang its former been illegally dismissed and ordered petitioners to reinstate her
Director-Regional Sales. Respondent Joan Florendo-Flores was the without loss of seniority rights and full benefits; and to pay full back
Senior Account Manager for Northern Luzon. chanrob1es v irt ua1 1aw 1 ibra ry
wages, inclusive of basic pay, allowances and bonuses as prayed for in

64
the complaint amounting to P307,625.00, exemplary damages in the
sum of P200,000.00, and ten percent (10%) of the total monetary
award as attorneys fees. However, the Labor Arbiter set aside the
claim of abandonment as the company failed to send the requisite
notice to Florendo-Flores, 4 hence, there was no adherence to
procedural due process. Although he recognized that the problem
brewed and eventually boiled over due to the acts of Cacholo M.
Santos, GLOBEs former Head of Regional Sales, Luzon Area, the Labor
Arbiter found the company negligent in monitoring all its key
personnel, and thus assessed against it exemplary damages at the
same time deleting actual and moral damages. 5
Petitioners appealed the decision to the NLRC which modified the
judgment of the Labor Arbiter. The NLRC ruled that petitioners did not
dismiss Florendo-Flores but that the latter actually abandoned her
employment because of a disagreement with her immediate superior
which she failed to bring to the attention of GLOBE and its officers,
particularly petitioners Lazaro and Galang. 6 However, the NLRC
declared that if only as an act of grace for the latters past services
with the company, GLOBE, Lazaro and Galang should be held
accountable for the back wages of Florendo-Flores amounting to
P307,625.00 minus the amount of P63,000.00 for the value of the
company car in Florendo-Flores possession, or the net amount of
P244,625.00. 7
Both parties elevated the NLRC decision to the Court of Appeals, each
side through a petition for certiorari. In its Resolution of 2 September
2000 the appellate court dismissed the petition of Florendo-Flores for
failure to append the required verification and certification of non-
forum shopping, 8 while it gave due course to the petition of GLOBE,
Lazaro and Galang.
In their petition before the appellate court, GLOBE, Lazaro and Galang
averred that the NLRC committed grave abuse of discretion amounting
to lack or excess of jurisdiction when it ordered them to pay Florendo-
Flores full back wages and damages despite its express finding that
they did not cause the dismissal of Florendo-Flores as the latter had
actually abandoned her employment on account of her personal
differences with her superior.
In its Decision of 25 May 2001 the Court of Appeals found that
Florendo-Flores was constructively dismissed and that payment of
back wages and damages was in order. On 21 June 2001 GLOBE,
Lazaro and Galang filed a motion for reconsideration but the motion
was denied in the appellate courts Resolution of 19 September 2001.
Petitioners pose the following questions in this petition: In a special
civil action for certiorari where factual findings are deemed to be final
and conclusive, can the Court of Appeals alter or substitute the
findings of fact of the lower court/tribunal? In the face of the finding of
the NLRC that respondent abandoned her employment because of a
personal squabble with her immediate superior, and that petitioners
had nothing to do with the severance of Flores employment, can
petitioners be held legally liable for back wages while the guilty party
Cacholo M. Santos is legally absolved of liability?
Petitioners submit that the answers to both questions must be in the
negative. They argue that the appellate court can neither alter nor
substitute the factual findings of the NLRC as they are legally deemed
to be final and conclusive in a certiorari proceeding. They contend that
a special civil action for certiorari is an extraordinary remedy created
not to correct mistakes in the factual findings or conclusions of the
lower court or tribunal, but a remedy intended to rectify jurisdictional
errors and grave abuse of discretion. Thus, the Court of Appeals
cannot make its own factual findings and substitute them for the
factual findings of the NLRC, and on such basis render a decision.
Petitioners further note that the appellate court failed to address the
issues raised in their petition. They reiterate their position that they
cannot be held liable for payment of back wages as an act of grace in
view of the express finding by the NLRC that respondent abandoned
her employment because of a personal rift with her immediate superior
and not due to any act attributable to them. They stress that there can
be no liability in the absence of any wrongful act.
Invoking the principle of res inter alios acta declaring that the rights of
a party cannot be prejudiced by the act, declaration or omission of
another, petitioners insist that since the NLRC found that respondents
problems arose from the acts and deeds of Santos, he alone should be
held liable. Petitioners find special exception to the NLRCs application
of the concept of "act of grace" to justify the award since an "act of
grace" is not a source of demandable obligation. They argue that it is
not within the power of any judicial or administrative agency to compel
an employer to be liberal.
In the review of an NLRC decision through a special civil action
for certiorari, resolution is confined only to issues of jurisdiction and
grave abuse of discretion on the part of the labor tribunal. 9 Hence,
the Court refrains from reviewing factual assessments of lower courts
and agencies exercising adjudicative functions, such as the NLRC.
65
Occasionally, however, the Court is constrained to delve into factual
matters where, as in the instant case, the findings of the NLRC
contradict those of the Labor Arbiter.
In this instance, the Court in the exercise of its equity jurisdiction may
look into the records of the case and re-examine the questioned
findings. 10 As a corollary, this Court is clothed with ample authority
to review matters, even if they are not assigned as errors in their
appeal, if it finds that their consideration is necessary to arrive at a
just decision of the case. 11 The same principles are now necessarily
adhered to and are applied by the Court of Appeals in its expanded
jurisdiction over labor cases elevated through a petition for certiorari;
thus, we see no error on its part when it made anew a factual
determination of the matters and on that basis reversed the ruling of
the NLRC.
Glaring however is the discrepancy between the text of the decision of
the appellate court which declares that respondent Florendo-Flores
"was unlawfully constructively dismissed" from employment, 12 and its
dispositive portion which declares that "the assailed judgment is
affirmed." 13 It should be noted that the "assailed judgment" referred
to the NLRC Decision which declared that respondent was not illegally
dismissed but that she abandoned her employment. Even in the award
of back wages and exemplary damages the two (2) decisions are at
odds: The award of back wages made by the NLRC was a gratuity or
an act of grace from petitioners while the award made by the Court of
Appeals could be assumed to be anchored on its finding of illegal
dismissal. How should the inconsistency be reconciled?
Where there is conflict between the dispositive portion of the decision
and the body thereof, the dispositive portion controls irrespective of
what appears in the body. 14 While the body of the decision, order or
resolution might create some ambiguity in the manner the courts
reasoning preponderates, it is the dispositive portion thereof that
finally invests rights upon the parties, sets conditions for the exercise
of those rights, and imposes the corresponding duties or obligations.
15 Hence, for the Court of Appeals to have affirmed the assailed
judgment is to adopt and uphold the NLRC finding of abandonment
and its award of full back wages to respondent as an "act of grace"
from petitioners.
However, we believe this is not the proper view as the records reveal
that respondent was constructively dismissed from service.
Constructive dismissal exists where there is cessation of work because
"continued employment is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank and a diminution in
pay." 16 All these are discernible in respondents situation. She was
singularly edged out of employment by the unbearable or undesirable
treatment she received from her immediate superior Cacholo M.
Santos who discriminated against her without reason not preparing
and submitting her performance evaluation report that would have
been the basis for her increased salary; not forwarding her project
proposals to management that would have been the source of
commendation; diminishing her supervisor stature by assigning her to
house-to-house sales or direct sales;. and withholding from her the
enjoyment of bonuses, allowances and other similar benefits that were
necessary for her efficient sales performance. Although respondent
continued to have the rank of a supervisor, her functions were reduced
to a mere house-to-house sales agent or direct sales agent. This was
tantamount to a demotion. She might not have suffered any
diminution in her basic salary but petitioners did not dispute her
allegation that she was deprived of all benefits due to another of her
rank and position, benefits which she apparently used to receive.
Far from pointing to Santos alone as the source of her woes,
respondent attributes her degraded state to petitioners as well.
Florendo-Flores cited petitioners apathy or indifference to her plight as
she was twice left out in a salary increase in August 1987 and May
1998, without petitioners giving her any reason. 17 It eludes belief
that petitioners were entirely in the dark as the salary increases were
granted to all employees across-the-board but respondent was the
only one left receiving a P19,100.00 per month basic salary while the
rest received a basic salary of almost P35,000.00 per month. 18 It is
highly improbable that the exclusion of respondent had escaped
petitioners notice. The absence of an evaluation report from Santos
should have been noted by petitioners and looked into for proper
action to have been made. If a salary increase was unwarranted, then
it should have been sufficiently explained by petitioners
to Respondent.
Petitioners argue that respondent Florendo-Flores could have brought
to their attention the deplorable treatment she received from Santos
by resorting to the companys grievance machinery so that the
problems in her relationship with Santos could then have been easily
ironed out, but she did not. It remains uncontroverted that respondent
had inquired from petitioners the reason why her other benefits had
been withheld and sought clarification for her undeserved treatment
but petitioner company and Santos remained mum. 19
66
Thus, contrary to the observation of the NLRC, the dispute was not a
mere private spat between respondent Florendo-Flores and her
immediate superior Santos. Granting that this was the case, it had
exceeded the periphery of simple personal affairs that overflowed into
the realm of respondents employment.
Respondent narrates that sometime in June 1997 Santos wrote her a
baseless accusatory letter, and he together with GLOBE Sales Director
Roberto Galang, one of petitioners herein, verbally told her that she
should resign from her job, but she refused. 20 Thereafter, in July
1997 and the months subsequent thereto all of respondents other
benefits were withheld without any reason nor explanation from the
company. 21 Even as petitioners endeavored to lay the blame on
Santos alone, he would not have been able to single-handedly
mastermind the entire affair as to influence Sales Director Galang and
manipulate the payroll. It only stands to reason that Santos was acting
pursuant to a management directive, or if not, then petitioners had
condoned it, or at the very least, were negligent in supervising all of
their employees. As aptly observed by the Labor Arbiter
. . . it would appear however that the respondent company was
negligent in monitoring all its key personnel. For it is the bounden duty
of the corporate officialdom to constantly monitor their managerial
staff if only to ascertain the smooth flow of work and operations, which
includes the inter-personal relations of each and every key segment of
the corporate machinery. For such, it must be assessed with just and
reasonable exemplary damages. 22
The unauthorized absence of respondent should not lead to the drastic
conclusion that she had chosen to abandon her work. To constitute
abandonment, there must be: (a) failure to report for work or absence
without valid or justifiable reason; and, (b) a clear intention, as
manifested by some overt act, to sever the employer-employee
relationship, 23 requisites that are negated by the immediate filing by
respondent Florendo-Flores of a complaint for constructive dismissal
against petitioners. A charge of abandonment is totally inconsistent
with the immediate filing of a complaint for illegal dismissal; more so,
when it includes a prayer for reinstatement. 24
The reduction of respondents functions which were originally
supervisory in nature to a mere house-to-house sales agent or direct
sales agent constitutes a demotion in rank. For this act of illegal
dismissal, she deserves no less than full back wages starting from the
time she had been illegally dismissed until her actual reinstatement to
her former position without loss of seniority rights and other benefits
earned, accrued and demandable. She shall continue to enjoy her
benefits, privileges and incentives including the use of the company
car and "handyphone." cralaw virtua 1aw lib rary
The managerial prerogative to transfer personnel must be exercised
without grave abuse of discretion. It must always bear in mind the
basic elements of justice and fair play. Having the right should not be
confused with the manner that right is exercised. Thus, it cannot be
used as a subterfuge by the employer to rid himself of an undesirable
worker.25 cra law:red
In constructive dismissal, the employer has the burden of proving that
the transfer and demotion of an employee are for just and valid
grounds such as genuine business necessity. 26 The employer must be
able to show that the transfer is not unreasonable, inconvenient, or
prejudicial to the employee. It must not involve a demotion in rank or
a diminution of salary and other benefits. If the employer cannot
overcome this burden of proof, the employees demotion shall be
tantamount to unlawful constructive dismissal.
It should be noted that the award of back wages in the instant case is
justified upon the finding of illegal dismissal, and not under the
principle of "act of grace" for past services rendered. There are
occasions when the Court exercises liberality in granting financial
awards to employees, but even then they contemplate only the award
of separation pay and/or financial assistance, and only as a measure of
social justice when the circumstances of the case so warrant, such as
instances of valid dismissal for causes other than serious misconduct
or those reflecting on the employees moral character. 27 Proper
regard for the welfare of the labor sector should not dissuade us from
protecting the rights of management such that an award of back
wages should be forthcoming only when valid grounds exist to support
it.
An award of actual and moral damages is not proper as the dismissal
is not shown to be attended by bad faith, or was oppressive to labor,
or done in a manner contrary to morals, good customs or public policy.
28 Exemplary damages are likewise not proper as these are imposed
only if moral, temperate, liquidated or compensatory damages are
awarded. 29
WHEREFORE, the judgment appealed from is MODIFIED. The Decision
of the Court of Appeals of 25 May 2001 in CA-G.R. SP No. 60284
affirming the Decision of the National Labor Relations Commission of
28 January 2000 declaring that respondent Joan Florendo-Flores had
67
abandoned her work is SET ASIDE. Petitioners Globe Telecom, Inc.,
Delfin Lazaro, Jr., and Roberto Galang are ordered to pay respondent
Joan Florendo-Flores full back wages from the time she was
constructively dismissed on 15 May 1998 until the date of her effective
reinstatement, without qualification or deduction. Accordingly,
petitioners are ordered to cause the immediate reinstatement of
respondent to her former position, without loss of seniority rights and
other benefits. No pronouncement as to costs. chanrob1es vi rtua1 1aw 1ib rary
SO ORDERED.
Quisumbing, Austria-Martinez, and Callejo, Sr., JJ., concur.
Mendoza, J., on official leave.
Endnotes:
1. Decision penned by Associate Justice Delilah Vidallon-Magtolis,
concurred in by Associate Justices Teodoro P. Regino and Josefina
Guevara-Salonga, Tenth Division.
2. Decision penned by Presiding Commissioner Rogelio I. Rayala, First
Division, NLRC.
3. Rollo, pp. 32-36.
4. Rollo, p. 40.
5. Id., pp. 40-41.
6. Id., pp. 47-48.
7. Id., p. 49.
8. Id., p. 92.
9. Deles Jr. v. NLRC, G.R. No. 121348, 9 March 2000, 327 SCRA 540.
10. Aklan Electric Cooperative Inc. v. NLRC, G.R. No. 121439, 25
January 2000, 323 SCRA 258.
11. Barons Marketing Corp. v. Court of Appeals, G.R. No. 126486, 9
February 1998, 286 SCRA 96.
12. Rollo, pp. 25-27.
13. Id., p. 28.
14. Olac v. Court of Appeals, G.R. No. 84256, 2 September 1992, 213
SCRA 321; Republic v. De Los Angeles, 148-B Phil. 902 (1971).
15. Dy Pac Pakiao Workers Union v. Dy Pac and Co., Inc., No. L-
27377, 31 March 1971, 38 SCRA 263.
16. Philippine Japan Active Carbon Corporation, Et. Al. v. NLRC, Et Al.,
G.R. No. 83239, March 8, 1989, 171 SCRA 164; Lemery Savings and
Loan Bank, Et. Al. v. NLRC. Et. Al., G.R. No. 96439, January 27, 1992,
205 SCRA 492.
17. Rollo, p. 34.
18. Ibid.
19. Ibid.
20. Ibid.
21. Ibid.
22. Id., p. 39.
23. Leonardo v. NLRC, G.R. No. 125303, 16 June 2000, 333 SCRA
589.
24. Icawat v. NLRC, G.R. No. 133573, 20 June 2000, 334 SCRA 75.
25. Jarcia Machine Shop and Auto Supply, Inc. v. NLRC, 334 Phil. 93
(1997), citing Philippine Telegraph and Telephone Corp. v. Laplana, Et
Al., G.R. No. 76045, 23 July 1991, 199 SCRA 485.
26. Jarcia Machine Shop and Auto Supply, Inc. v. NLRC, supra at 95.
27. Philippine Long Distance Telephone Co. v. NLRC, G.R. No. 80609,
23 August 1988, 164 SCRA 671; Philippine Airlines, Inc. v. NLRC, G.R.
No. 126805, 16 March 2000, 328 SCRA 273.
28. Nueva Ecija I Electric Cooperative, Inc. v. NLRC, G.R. No. 116066,
24 January 2000, 323 SCRA 86.
29. Art. 2229, Civil Code.
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