Art. 279
Agabon v. NLRC
G.R. No. 158693, November 17, 2004
Ynares- Santiago, J.
Doctrine:
ART. 279. Security of Tenure. In cases of regular employment, the employer
shall not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
Issues:
Whether or not the employees dismissal should be upheld despite failure to
comply with the notice requirement?
Ruling:
Yes. To dismiss an employee, the law requires not only the existence of a just
and valid cause but also enjoins the employer to give the employee the
opportunity to be heard and to defend himself. Article 282 of the Labor Code
enumerates the just causes for termination by the employer: (a) serious
misconduct or willful disobedience by the employee of the lawful orders of his
employer or the latters representative in connection with the employees work;
(b) gross and habitual neglect by the employee of his duties; (c) fraud or willful
breach by the employee of the trust reposed in him by his employer or his duly
authorized representative; (d) commission of a crime or offense by the employee
against the person of his employer or any immediate member of his family or his
duly authorized representative; and (e) other causes analogous to the foregoing.
Abandonment is the deliberate and unjustified refusal of an employee to resume
his employment. It is a form of neglect of duty, hence, a just cause for termination
of employment by the employer. For a valid finding of abandonment, these two
factors should be present: (1) the failure to report for work or absence without
valid or justifiable reason; and (2) a clear intention to sever employer-employee
relationship, with the second as the more determinative factor which is
manifested by overt acts from which it may be deduced that the employees has
no more intention to work. The intent to discontinue the employment must be
shown by clear proof that it was deliberate and unjustified.
Procedurally, (1) if the dismissal is based on a just cause under Article 282, the
employer must give the employee two written notices and a hearing or
opportunity to be heard if requested by the employee before terminating the
employment: a notice specifying the grounds for which dismissal is sought a
hearing or an opportunity to be heard and after hearing or opportunity to be heard,
a notice of the decision to dismiss; and (2) if the dismissal is based on authorized
causes under Articles 283 and 284, the employer must give the employee and
the Department of Labor and Employment written notices 30 days prior to the
effectivity of his separation.
From the foregoing rules four possible situations may be derived: (1) the
dismissal is for a just cause under Article 282 of the Labor Code, for an authorized
cause under Article 283, or for health reasons under Article 284, and due process
was observed; (2) the dismissal is without just or authorized cause but due
process was observed; (3) the dismissal is without just or authorized cause and
there was no due process; and (4) the dismissal is for just or authorized cause
but due process was not observed. The present case squarely falls under the
fourth situation. The dismissal should be upheld because it was established that
the petitioners abandoned their jobs to work for another company. Private
respondent, however, did not follow the notice requirements and instead argued
that sending notices to the last known addresses would have been useless
because they did not reside there anymore. Unfortunately for the private
respondent, this is not a valid excuse because the law mandates the twin notice
requirements to the employees last known address. Thus, it should be held
liable for non-compliance with the procedural requirements of due process.
Prior to 1989, the rule was that a dismissal or termination is illegal if the employee
was not given any notice. In the 1989 case of Wenphil Corp. v. National Labor
Relations Commission, we reversed this long-standing rule and held that the
dismissed employee, although not given any notice and hearing, was not entitled
to reinstatement and backwages because the dismissal was for grave
misconduct and insubordination, a just ground for termination under Article
282. The employee had a violent temper and caused trouble during office hours,
defying superiors who tried to pacify him. We concluded that reinstating the
employee and awarding backwages may encourage him to do even worse and
will render a mockery of the rules of discipline that employees are required to
observe.
On January 27, 2000, in Serrano, the rule on the extent of the sanction was
changed. We held that the violation by the employer of the notice requirement in
termination for just or authorized causes was not a denial of due process that will
nullify the termination. However, the dismissal is ineffectual and the employer
must pay full backwages from the time of termination until it is judicially declared
that the dismissal was for a just or authorized cause.
After carefully analyzing the consequences of the divergent doctrines in the law
on employment termination, we believe that in cases involving dismissals for
cause but without observance of the twin requirements of notice and hearing, the
better rule is to abandon the Serrano doctrine and to follow Wenphil by holding
that the dismissal was for just cause but imposing sanctions on the
employer. Such sanctions, however, must be stiffer than that imposed in
Wenphil. By doing so, this Court would be able to achieve a fair result by
dispensing justice not just to employees, but to employers as well.
#GANGAN
G.R. No. 151378. March 28, 2005.*
JAKA FOOD PROCESSING CORPORATION, petitioner, vs. DARWIN PACOT,
ROBERT PAROHINOG, DAVID BISNAR, MARLON DOMINGO, RHOEL
LESCANO and JONATHAN CAGABCAB, respondents.
DOCTRINE:
Distinction between a dismissal for just cause under Article 282 and a dismissal
for authorized cause under Article 283.A dismissal for just cause under Article
282 implies that the employee concerned has committed, or is guilty of, some
violation against the employer, i.e. the employee has committed some serious
misconduct, is guilty of some fraud against the employer, or, as in Agabon, he
has neglected his duties. Thus, it can be said that the employee himself initiated
the dismissal process. On another breath, a dismissal for an authorized cause
under Article 283 does not necessarily imply delinquency or culpability on the
part of the employee. Instead, the dismissal process is initiated by the employers
exercise of his management prerogative, i.e. when the employer opts to install
labor saving devices, when he decides to cease business operations or when, as
in this case, he undertakes to implement a retrenchment program. The clear-cut
distinction between a dismissal for just cause under Article 282 and a dismissal
for authorized cause under Article 283 is further reinforced by the fact that in the
first, payment of separation pay, as a rule, is not required, while in the second,
the law requires payment of separation pay.
ISSUE:
What are the implications where an employee is dismissed for cause BUT without
compliance of the notice requirement under the LC?
HELD:
The clear-cut distinction between a dismissal for just cause under Article 282 and
a dismissal for authorized cause under Article 283 is further reinforced by the fact
that in the first, payment of separation pay, as a rule, is not required, while in the
second, the law requires payment of separation pay.
For these reasons, there ought to be a difference in treatment when the ground
for dismissal is one of the just causes under Article 282, and when based on one
of the authorized causes under Article 283.
Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause
under Article 282 but the employer failed to comply with the notice requirement,
the sanction to be imposed upon him should be tempered because the dismissal
process was, in effect, initiated by an act imputable to the employee; and (2) if
the dismissal is based on an authorized cause under Article 283 but the employer
failed to comply with the notice requirement, the sanction should
be stiffer because the dismissal process was initiated by the employers exercise
of his management prerogative.
It is, therefore, established that there was ground for respondents
dismissal, i.e., retrenchment, which is one of the authorized causes enumerated
under Article 283 of the Labor Code. Likewise, it is established that JAKA failed
to comply with the notice requirement under the same Article. Considering the
factual circumstances in the instant case and the above ratiocination, we,
therefore, deem it proper to fix the indemnity at P50,000.00.
NELSON A. CULILI vs. EASTERN TELECOMMUNICATIONS PHILIPPINES,
INC., ET AL.
G.R. No. 165381 FEBRUARY 9, 2011
LEONARDO-DE CASTRO, J.
DOCTRINES:
(1) Article 283 of the Labor Code provides that the employer may also terminate
the employment of any employee due to the installation of labor saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the
purpose of circumventing the provisions of this Title, by serving a written notice
on the workers and the Department of Labor and Employment at least one (1)
month before the intended date thereof.
(2) There is redundancy when the service capability of the workforce is greater
than what is reasonably required to meet the demands of the business enterprise.
(3) Among the requisites of a valid redundancy program are: (1) the good faith of
the employer in abolishing the redundant position; and (2) fair and reasonable
criteria in ascertaining what positions are to be declared redundant, such as but
not limited to: preferred status, efficiency, and seniority.
Under our laws, an employee may be terminated for reasons involving measures
taken by the employer due to business necessities. Article 283 of the Labor Code
provides that the employer may also terminate the employment of any employee
due to the installation of labor saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the provisions
of this Title, by serving a written notice on the workers and the Department of
Labor and Employment at least one (1) month before the intended date thereof.
There is redundancy when the service capability of the workforce is greater than
what is reasonably required to meet the demands of the business enterprise. A
position becomes redundant when it is rendered superfluous by any number of
factors such as over-hiring of workers, decrease in volume of business, or
dropping a particular product line or service activity previously manufactured or
undertaken by the enterprise.
This Court has been consistent in holding that the determination of whether or
not an employees services are still needed or sustainable properly belongs to
the employer. Provided there is no violation of law or a showing that the employer
was prompted by an arbitrary or malicious act, the soundness or wisdom of this
exercise of business judgment is not subject to the discretionary review of the
Labor Arbiter and the NLRC.
However, an employer cannot simply declare that it has become overmanned
and dismiss its employees without producing adequate proof to sustain its claim
of redundancy. Among the requisites of a valid redundancy program are: (1) the
good faith of the employer in abolishing the redundant position; and (2) fair and
reasonable criteria in ascertaining what positions are to be declared redundant,
such as but not limited to: preferred status, efficiency, and seniority.
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This Court also held that the following evidence may be proffered to substantiate
redundancy: the new staffing pattern, feasibility studies/ proposal on the viability
of the newly created positions, job description and the approval by the
management of the restructuring.
In the case at bar, ETPI was upfront with its employees about its plan to
implement a Right-Sizing Program. Even in the face of initial opposition from and
rejection of the said program by ETEU, ETPI patiently negotiated with ETEUs
officers to make them understand ETPIs business dilemma and its need to
reduce its workforce and streamline its organization. This evidently rules out bad
faith on the part of ETPI.
In deciding which positions to retain and which to abolish, ETPI chose on the
basis of efficiency, economy, versatility and flexibility. It needed to reduce its
workforce to a sustainable level while maintaining functions necessary to keep it
operating. The records show that ETPI had sufficiently established not only its
need to reduce its workforce and streamline its organization, but also the
existence of redundancy in the position of a Senior Technician. ETPI explained
how it failed to meet its business targets and the factors that caused this, and
how this necessitated it to reduce its workforce and streamline its organization.
ETPI also submitted its old and new tables of organization and sufficiently
described how limited the functions of the abolished position of a Senior
Technician were and how it decided on whom to absorb these functions.
The termination letter signed by ETPIs AVP Stella Garcia hardly suffices to prove
bad faith on the part of the company. The fact remains that the said letter was
never officially transmitted and Culili was not terminated at the end of the first
phase of ETPIs Right-Sizing Program. ETPI had given an adequate explanation
for the existence of the letter and considering that it had been transparent with its
employees, through their union ETEU, so much so that ETPI even gave ETEU
this unofficial letter, there is no reason to speculate and attach malice to such
act. That Culili would be subsequently terminated during the second phase of
the Right-Sizing Program is not evidence of undue discrimination or singling out
since not only Culilis position, but his entire unit was abolished and absorbed by
another department.
Serrano v. Gallant Maritime, March 24, 2009
Issue:
Whether or not the subject clause of Sec 10 of RA 8042 violate Section 1, Article
III of the Constitution, and Section 18, Article II and Section 3, Article XIII on labor
as a protected sector.
Held:
Yes:
Upon cursory reading, the subject clause appears facially neutral, for it applies to
all OFWs. However, a closer examination reveals that the subject clause has a
discriminatory intent against, and an invidious impact on OFWs.
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term
employment who were illegally discharged were treated alike in terms of the
computation of their money claims: they were uniformly entitled to their salaries
for the entire unexpired portions of their contracts. But with the enactment of R.A.
No. 8042, specifically the adoption of the subject clause, illegally dismissed
OFWs with an unexpired portion of one year or more in their employment contract
have since been differently treated in that their money claims are subject to a 3-
month cap, whereas no such limitation is imposed on local workers with fixed-
term employment.
The Court concludes that the subject clause contains a suspect classification in
that, in the computation of the monetary benefits of fixed-term employees who
are illegally discharged, it imposes a 3-month cap on the claim of OFWs with an
unexpired portion of one year or more in their contracts, but none on the claims
of other OFWs or local workers with fixed-term employment. The subject clause
singles out one classification of OFWs and burdens it with a peculiar
disadvantage.
There being a suspect classification involving a vulnerable sector protected by
the Constitution, the Court now subjects the classification to a strict judicial
scrutiny, and determines whether it serves a compelling state interest through
the least restrictive means.
What constitutes compelling state interest is measured by the scale of rights and
powers arrayed in the Constitution and calibrated by history. It is akin to the
paramount interest of the state for which some individual liberties must give way,
such as the public interest in safeguarding health or maintaining medical
standards, or in maintaining access to information on matters of public concern.
In the present case, the Court dug deep into the records but found no compelling
state interest that the subject clause may possibly serve.
In fine, the Government has failed to discharge its burden of proving the existence
of a compelling state interest that would justify the perpetuation of the
discrimination against OFWs under the subject clause.
Assuming that, as advanced by the OSG, the purpose of the subject clause is to
protect the employment of OFWs by mitigating the solidary liability of placement
agencies, such callous and cavalier rationale will have to be rejected. There can
never be a justification for any form of government action that alleviates the
burden of one sector, but imposes the same burden on another sector, especially
when the favored sector is composed of private businesses such as placement
agencies, while the disadvantaged sector is composed of OFWs whose
protection no less than the Constitution commands. The idea that private
business interest can be elevated to the level of a compelling state interest is
odious.
The subject clause or for three months for every year of the unexpired term,
whichever is less in the 5th paragraph of Section 10 of Republic Act No. 8042 is
declared unconstitutional.
CLAUDIO S. YAP (vs) THENAMARIS SHIPS MANAGEMENT
and INTERMARE MARITIME AGENCIES, INC.
G.R. No. 179532 May 30, 2011
ISSUE: Whether or not 5th paragraph of Section 10 of R.A. No. 8042 is
constitutional
SC RULING: The unanimous finding of the LA, the NLRC and the CA that the
dismissal of petitioner was illegal is not disputed. Likewise not disputed is the
tribunals unanimous finding of bad faith on the part of respondents.
As declared in Serrano v. Gallant Maritime Services, Inc. that the clause or for
three months for every year of the unexpired term, whichever is less provided in
the 5th paragraph of Section 10 of R.A. No. 8042 is unconstitutional for violating
the rights of Overseas Filipino Workers (OFWs) to equal protection of the laws.
The subject clause does not state or imply any definitive governmental purpose;
hence, the same violates not just therein petitioners right to equal protection, but
also his right to substantive due process under Section 1, Article III of the
Constitution.
As a general rule, an unconstitutional act is not a law; it confers no rights; it
imposes no duties; it affords no protection; it creates no office; it is inoperative as
if it has not been passed at all. The doctrine of operative fact, as an exception to
the general rule, only applies as a matter of equity and fair play. It nullifies the
effects of an unconstitutional law by recognizing that the existence of a statute
prior to a determination of unconstitutionality is an operative fact and may have
consequences which cannot always be ignored. The past cannot always be
erased by a new judicial declaration. The doctrine is applicable when a
declaration of unconstitutionality will impose an undue burden on those who have
relied on the invalid law. Thus, it was applied to a criminal case when a
declaration of unconstitutionality would put the accused in double jeopardy or
would put in limbo the acts done by a municipality in reliance upon a law creating
it. This case should not be included in the aforementioned exception. After all, it
was not the fault of petitioner that he lost his job due to an act of illegal dismissal
committed by respondents. To rule otherwise would be iniquitous to petitioner
and other OFWs, and would, in effect, send a wrong signal that
principals/employers and recruitment/manning agencies may violate an OFWs
security of tenure which an employment contract embodies and actually profit
from such violation based on an unconstitutional provision of law. In the same
vein, the tanker allowance should be included in the computation of the lump-
sum salary to be awarded to petitioner. A close perusal of the contract reveals
that the tanker allowance was not categorized as a bonus but was rather
encapsulated in the basic salary clause, hence, forming part of the basic salary
of petitioner. The petition is granted and the assailed decision is modified to the
effect that the petitioner is awarded his salaries for the entire unexpired portion
of his employment contract consisting of nine months. All other awards are
affirmed
G.R. No. 188722 February 1, 2012
BANK OF LUBAO, INC., Petitioner, vs. ROMMEL J. MANABAT and NLRC,
Respondents.
Doctrine: An illegally dismissed employee is entitled to reinstatement as a matter
of right. However, if reinstatement would only exacerbate the tension and
strained relations between the parties, or where the relationship between the
employer and the employee has been unduly strained by reason of their
irreconcilable differences, particularly where the illegally dismissed employee
held a managerial or key position in the company, it would be more prudent to
order payment of separation pay instead of reinstatement.
ISSUES:
(1) whether the CA erred in ordering the petitioner to pay the respondent
separation pay in lieu of reinstatement
(2) whether the respondent is entitled to payment of backwages
HELD:
(1) NO. We agree with the CA that the relations between the parties had been
already strained thereby justifying the grant of separation pay in lieu of
reinstatement in favor of the respondent.
First, it is undoubted that the petitioners filing of various criminal complaints
against the respondent for qualified theft and the subsequent filing by the latter
of the complaint for illegal dismissal against the latter, taken together with the
pendency of the instant case for more than six years, had caused strained
relations between the parties.
Second, considering that the respondents former position as bank encoder
involves the handling of accounts of the depositors of the Bank of Lubao, it would
not be equitable on the part of the petitioner to be ordered to maintain the former
in its employ since it may only inspire vindictiveness on the part of the
respondent.
Third, the refusal of the respondent to be re-admitted to work is in itself indicative
of the existence of strained relations between him and the petitioner.
An illegally dismissed employee is entitled to reinstatement as a matter of right.
However, if reinstatement would only exacerbate the tension and strained
relations between the parties, or where the relationship between the employer
and the employee has been unduly strained by reason of their irreconcilable
differences, particularly where the illegally dismissed employee held a
managerial or key position in the company, it would be more prudent to order
payment of separation pay instead of reinstatement.
Under the doctrine of strained relations, the payment of separation pay is
considered an acceptable alternative to reinstatement when the latter option is
no longer desirable or viable. On one hand, such payment liberates the employee
from what could be a highly oppressive work environment. On the other hand, it
releases the employer from the grossly unpalatable obligation of maintaining in
its employ a worker it could no longer trust.
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(2) YES. Respondent is entitled to backwages. However, the backwages that
should be awarded to the respondent should be modified. Employees who are
illegally dismissed are entitled to full backwages, inclusive of allowances and
other benefits or their monetary equivalent, computed from the time their actual
compensation was withheld from them up to the time of their actual
reinstatement. But if reinstatement is no longer possible, the backwages shall be
computed from the time of their illegal termination up to the finality of the decision.
Thus, when there is an order of reinstatement, the computation of backwages
shall be reckoned from the time of illegal dismissal up to the time that the
employee is actually reinstated to his former position.
Pursuant to the order of reinstatement rendered by the LA, the petitioner sent the
respondent a letter requiring him to report back to work on May 4, 2007.
Notwithstanding the said letter, the respondent opted not to report for work. Thus,
it is but fair that the backwages that should be awarded to the respondent be
computed from the time that the respondent was illegally dismissed until the time
when he was required to report for work, i.e. from September 1, 2005 until May
4, 2007. It is only during the said period that the respondent is deemed to be
entitled to the payment of backwages.
St. Mary;s Academy vs Palacio et al
G.R. No. 164913 08 September 2010
ISSUE(S):
Whether the dismissal of the respondents were premature because it was
effected prior to the deadline set by the PRC to acquire their license.
Whether the respondents are entitled to backwages from March to 19 September
2000, because it is only on such date that they were already dismissible for
cause.
HELD
Yes. The Supreme Court agrees with the decisions of the LA, the NLRC and the
CA. It is incumbent upon the Court to afford full protection to labor.The law has
provided a specific timeframe within which respondents could comply, petitioner
has no right to deny them of this privilege accorded to them by law. In so far as
Palacio, Calibod, Laquio, Santander and Montedramos are concerned, being
dismissed on March 2000 was premature. However, Saile is not qualified to take
the LET, therefore, no prematurity is to speak of on her end. Petitioners intention
and desire not to put the students education and school operation in jeopardy is
neither a decisive consideration for respondents termination prior to the deadline
set by law. The prejudice that respondents retention would cause to the schoold
operation is only trivial.
Yes. The respondents are entitled to limited backwages computed from 31 March
2000 to September 2000 in favor of Palacio, Calibod, Laquio, Santander and
Montederamos. The Petitioner cannot possibly presume that respondents could
not timely comply with the requirements set by law.
TOYOTA MOTOR PHILS. CORP. WORKERS ASSOCIATION (TMPCWA) vs
NLRC
FACTS: Petitioner Union filed a PCE among the Toyota rank and file employees
with the NCMB but was denied. But, on appeal, the DOLE Secretary granted the
Unions petition and directed the immediate holding of the certification election.
The Union was certified as the EBR.
Then, the Union submitted its CBA proposals to Toyota, but the latter refused to
negotiate in view of its pending appeal.
Subsequent strikes were held which was declared illegal by the SC.
Anent the grant of severance compensation to legally dismissed union members,
Toyota assails the turn-around by the CA in granting separation pay in its June
20, 2003 Resolution after initially denying it in its February 27, 2003 Decision.
The company asseverates that based on the CA finding that the illegal acts of
said union members constitute gross misconduct, not to mention the huge losses
it suffered, then the grant of separation pay was not proper.
ISSUE: Whether separation pay should be awarded to the Union members who
participated in the illegal strikes.
HELD: Not entitled due to serious miscounduct.
The advertence to the alleged honest belief on the part of the 227 employees that
Toyota committed a breach of the duty to bargain collectively and an abuse of
valid exercise of management prerogative has not been substantiated by the
evidence extant on record. There can be no good faith in intentionally incurring
absences in a collective fashion from work on February 22 and 23, 2001 just to
attend the DOLE hearings. The Unions strategy was plainly to cripple the
operations and bring Toyota to its knees by inflicting substantial financial damage
to the latter to compel union recognition. The Union officials and members are
supposed to know through common sense that huge losses would befall the
company by the abandonment of their regular work. It was not disputed that
Toyota lost more than PhP 50 million because of the willful desertion of company
operations in February 2001 by the dismissed union members. In addition, further
damage was experienced by Toyota when the Union again resorted to illegal
strikes from March 28 to April 12, 2001, when the gates of Toyota were blocked
and barricaded, and the company officials, employees, and customers were
intimidated and harassed. Moreover, they were fully aware of the company rule
on prohibition against concerted action inimical to the interests of the company
and hence, their resort to mass actions on several occasions in clear violation of
the company regulation cannot be excused nor justified. Lastly, they blatantly
violated the assumption/certification Order of the DOLE Secretary, exhibiting
their lack of obeisance to the rule of law. These acts indeed constituted serious
misconduct. Thus, they are not entitled to separation pay.
ARTCILE 279
CASE TITLE: BRISTOL MYERS SQUIBB (PHILS.), INC. v RICHARD NIXON A.
BABAN
KEYWORDS: nutritional products used in election campaign, breach of trust
PONENTE: REYES, R.T., J.:
DOCTRINE:
Two requisites for dismissal due to loss of trust and confidence: 1) the employee
concerned must be one holding a position of trust and confidence; 2) there must
be a willful act that would justify the loss of trust and confidence founded on
clearly established facts but proof beyond reasonable doubt is not necessary.
ISSUE:
Whether or not reinstatement, with full backwages and damages, of a confidential
employee, whom it had found to be guilty of breach of trust, is warranted.
SC RULING:
NO. Articles 282, 283, and 284 of the Labor Code enumerate the just and
authorized causes for the dismissal of an employee. Article 282 provides:
ART. 282. Termination by employer. - An employer may terminate an
employment for any of the following causes: c) Fraud or willful breach by the
employee of the trust reposed in him by his employer or his duly authorized
representative.
The first requisite for dismissal on the ground of loss of trust and confidence is
that the employee concerned must be one holding a position of trust and
confidence. There are two (2) classes of positions of trust. The first class consists
of managerial employees. They are defined as those vested with the powers or
prerogatives to lay down management policies and to hire, transfer suspend, lay-
off, recall, discharge, assign or discipline employees or effectively recommend
such managerial actions. The second class consists of cashiers, auditors,
property custodians, etc. They are defined as those who in the normal and routine
exercise of their functions, regularly handle significant amounts of money or
property. In this case, respondent was employed as district manager for Cagayan
de Oro-North Mindanao and its immediate vicinities, whose job entails handling
pharmaceutical products for distribution to medical practitioners and sale to drug
outlets. As a result of this, respondent is, by law, an employee with a position of
trust, falling under the second class.
The second requisite is that there must be a wilfull act that would justify the loss
of trust and confidence founded on clearly established facts, but proof beyond
reasonable doubt is not necessary.
Respondent's act of stapling a thank you note from his father warrants the loss
of petitioner's trust and confidence. As the supervisor of fellow medical
representatives, he had the duty to set a good example to his colleagues. A
higher standard of confidence was reposed in him. There is no doubt that
respondent willfully breached the trust and confidence reposed in him by not
asking for permission before using company property for his own or another's
benefit, as required in the Company Standards of Business Conduct. Moreover,
when respondent failed to turn over the samples left in his care and stapled the
political "thank you" note with the intention of distributing them to his father's
supporters, he had, in effect appropriated company property for personal gain
and benefit.
The two requisites for dismissal for loss of trust and confidence having been met,
petitioner is well within its rights to dismiss respondent. While the State can
regulate the right of an employer to select and discharge his employees, an
employer cannot be compelled to continue the employment of an employee in
whom there has been a legitimate loss of trust and confidence.
However, while the dismissal is valid, WE are not deaf to respondent's plea for
mercy. In a line of cases, this court has held that separation pay may be awarded
as some equitable relief in consideration of the past services rendered. Since
respondent was validly dismissed for a cause other than serious misconduct or
those that negatively reflect on his moral character, the award of separation pay
is justifiable. This award is merely to coat the bitter termination experienced by
respondent with a little social justice. Separation pay at the rate of one month
salary for every year of service is proper.
G.R. No. 168081, October 17, 2008
ARMANDO G. YRASUEGUI vs.PHILIPPINE AIRLINES, INC.
ISSUE: WON he was validly dismissed.
HELD:
YES. A reading of the weight standards of PAL would lead to no other conclusion
than that they constitute a continuing qualification of an employee in order to keep
the job. The dismissal of the employee would thus fall under Article 282(e) of the
Labor Code.
In the case at bar, the evidence on record militates against petitioners claims
that obesity is a disease. That he was able to reduce his weight from 1984 to
1992 clearly shows that it is possible for him to lose weight given the proper
attitude, determination, and self-discipline. Indeed, during the clarificatory
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hearing on December 8, 1992, petitioner himself claimed that [t]he issue is could
I bring my weight down to ideal weight which is 172, then the answer is yes. I can
do it now.
Petitioner has only himself to blame. He could have easily availed the assistance
of the company physician, per the advice of PAL.
In fine, We hold that the obesity of petitioner, when placed in the context of his
work as flight attendant, becomes an analogous cause under Article 282(e) of
the Labor Code that justifies his dismissal from the service. His obesity may not
be unintended, but is nonetheless voluntary. As the CA correctly puts it,
[v]oluntariness basically means that the just cause is solely attributable to the
employee without any external force influencing or controlling his actions. This
element runs through all just causes under Article 282, whether they be in the
nature of a wrongful action or omission. Gross and habitual neglect, a recognized
just cause, is considered voluntary although it lacks the element of intent found
in Article 282(a), (c), and (d).
CASE TITLE: Manila Water vs. Del Rosario, January 29, 2014
DOCTRINE: As a general rule, an employee who has been dismissed for any of
the just causes enumerated under Article 28222 of the Labor Code is not entitled
to a separation pay. In exceptional cases, however, the Court has granted
separation pay to a legally dismissed employee as an act of social justice or on
equitable grounds." In both instances, it is required that the dismissal (1) was not
for serious misconduct; and (2) did not reflect on the moral character of the
employee.
ISSUE: Whether or not Del Rosario is entitled to separation pay?
HELD: As a general rule, an employee who has been dismissed for any of the
just causes enumerated under Article 28222 of the Labor Code is not entitled to a
separation pay.23 Section 7, Rule I, Book VI of the Omnibus Rules implementing
the Labor Code provides:
Sec. 7. Termination of employment by employer. The just causes for terminating
the services of an employee shall be those provided in Article 282 of the Code.
The separation from work of an employee for a just cause does not entitle him to
the termination pay provided in the Code, without prejudice, however, to
whatever rights, benefits and privileges he may have under the applicable
individual or collective agreement with the employer or voluntary employer policy
or practice.
In exceptional cases, however, the Court has granted separation pay to a legally
dismissed employee as an act of social justice or on equitable grounds." In both
instances, it is required that the dismissal (1) was not for serious misconduct; and
(2) did not reflect on the moral character of the employee.cralawred
We llaid down the rule that separation pay shall be allowed as a measure of social
justice only in the instances where the employee is validly dismissed for causes
other than serious misconduct reflecting his moral character. We clarified that
We hold that henceforth separation pay shall be allowed as a measure of social
justice only in those instances where the employee is validly dismissed for causes
other than serious misconduct or those reflecting on his moral character. Where
the reason for the valid dismissal is, for example, habitual intoxication or an
offense involving moral turpitude, like theft or illicit sexual relations with a fellow
worker, the employer may not be required to give the dismissed employee
separation pay, or financial assistance, or whatever other name it is called, on
the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of
rewarding rather than punishing the erring employee for his offense. And we do
not agree that the punishment is his dismissal only and that the separation pay
has nothing to do with the wrong he has committed. Of course it has. Indeed, if
the employee who steals from the company is granted separation pay even as
he is validly dismissed, it is not unlikely that he will commit a similar offense in
his next employment because he thinks he can expect a like leniency if he is
again found out. This kind of misplaced compassion is not going to do labor in
general any good as it will encourage the infiltration of its ranks by those who do
not deserve the protection and concern of the Constitution.
The attendant circumstances in the present case considered, we are constrained
to deny Del Rosario separation pay since the admitted cause of his dismissal
amounts to serious misconduct. He is not only responsible for the loss of the
water meters in flagrant violation of the companys policy but his act is in utter
disregard of his partnership with his employer in the pursuit of mutual benefits.
Dario Nacar vs Gallery Frames
G.R. No. 189871 August 13, 2013
DOCTRINE: Interest; legal rate beginning July 1, 2013. The guidelines laid down
in the case of Eastern Shipping Lines are accordingly modified to embody BSP-
MB Circular No. 799
ISSUE: Whether a re-computation, in the course of execution of the labor arbiter's
original computation of the awards made, is legally proper
RULING OF THE SUPREME COURT:
There are two parts of a decision when it comes to illegal dismissal cases
(referring to cases where the dismissed employee wins, or loses but wins on
appeal). The first part is the ruling that the employee was illegally dismissed. This
is immediately final even if the employer appeals but will be reversed if
employer wins on appeal. The second part is the ruling on the award of
backwages and/or separation pay. For backwages, it will be computed from the
date of illegal dismissal until the date of the decision of the Labor Arbiter. But if
the employer appeals, then the end date shall be extended until the day when
the appellate courts decision shall become final.
Hence, as a consequence, the liability of the employer, if he loses on appeal, will
increase this is just but a risk that the employer cannot avoid when it continued
to seek recourses against the Labor Arbiters decision. This is also in accordance
with Article 279 of the Labor Code.
As to the issue of award interest in the form of actual or compensatory damages,
the Supreme Court ruled that the old case of Eastern Shipping Lines vs CA is
already modified by the promulgation of the Bangko Sentral ng Pilipinas
Monetary Board Resolution No. 796 which lowered the legal rate of interest from
12% to 6%. Specifically, the rules on interest are now as follows:
Interest; legal rate beginning July 1, 2013. The guidelines laid down in the case
of Eastern Shipping Lines are accordingly modified to embody BSP-MB Circular
No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi
contracts, delicts or quasi-delicts is breached, the contravenor can be held liable
for damages. The provisions under Title XVIII on Damages of the Civil Code
govern in determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that which
may have been stipulated in writing. Furthermore, the interest due shall itself earn
legal interest from the time it is judicially demanded. In the absence of stipulation,
the rate of interest shall be 6% per annum to be computed from default, i.e., from
judicial or extrajudicial demand under and subject to the provisions of Article 1169
of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is
breached, an interest on the amount of damages awarded may be imposed at
the discretion of the court at the rate of 6% per annum. No interest, however,
shall be adjudged on unliquidated claims or damages, except when or until the
demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty, the
interest shall begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so
reasonably established at the time the demand is made, the interest shall begin
to run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any
case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 6% per annum from such finality until its satisfaction,
this interim period being deemed to be by then an equivalent to a forbearance of
credit. And, in addition to the above, judgments that have become final and
executory prior to July 1, 2013, shall not be disturbed and shall continue to be
implemented applying the rate of interest fixed therein.
BANI RURAL BANK INC. ENOC THEATER I AND II and/or RAFAEL DE
GUZMAN, Petitioners,
vs.
TERESA DE GUZMAN, EDGAR C. TAN and TERESA G. TAN, Respondents.
Issue:
Whether or not the NLRC committed grave abuse of discretion when it ruled that
the computation of the backwages should be until the decision attained finality.
Held:
No.an illegally dismissed employee is entitled to two reliefs: backwages and
reinstatement. The two reliefs provided are separate and distinct. In instances
where reinstatement is no longer feasible because of strained relations between
the employee and the employer, separation pay is granted. In effect, an illegally
dismissed employee is entitled to either reinstatement, if viable, or separation pay
if reinstatement is no longer viable, and backwages.
a final judgment may no longer be altered, amended or modified, even if the
alteration, amendment or modification is meant to correct what is perceived to be
an erroneous conclusion of fact or law and regardless of what court, be it the
highest Court of the land, rendered it. An exception to this rule is the existence of
supervening events.the existence of the strained relations between the
petitioners and the respondents was a supervening event that justified the NLRC
s modification of its final March 17, 1995 resolution.
First,when reinstatement is ordered, the general concept under Article 279 of the
Labor Code, as amended, computes the backwages from the time of dismissal
until the employees reinstatement. The computation of backwages (and similar
benefits considered part of the backwages) can even continue beyond the
decision of the labor arbiter or NLRC and ends only when the employee is
actually reinstated.
Second, when separation pay is ordered in lieu of reinstatement (in the event that
this aspect of the case is disputed) or reinstatement is waived by the employee
(in the event that the payment of separation pay, in lieu, is not disputed),
backwages is computed from the time of dismissal until the finality of the decision
ordering separation pay.
Third, when separation pay is ordered after the finality of the decision ordering
the reinstatement by reason of a supervening event that makes the award of
4
reinstatement no longer possible (as in the case), backwages is computed from
the time of dismissal until the finality of the decision ordering separation pay.
16. MINETTE BAPTISTA, et. al vs. ROSARIO VILLANUEVA, et. al
G.R. No. 194709 July 31, 2013
Mendoza, J.
Expulsion due to violation of CBL, not to restrict self-organization; Expulsion
from Union is termination from the Company
ISSUE: Is the expulsion of the petitioners from the union, and their subsequent
dismissal from employment valid?
HELD: YES.
First, Petitioners were found to have violated the provisions of the unions
Constitution and By- Laws when they filed petitions for impeachment against their
union officers and for audit before the DOLE without first exhausting all internal
remedies available within their organization. This act is a ground for expulsion
from union membership. Thus, petitioners expulsion from the union was not a
deliberate attempt to curtail or restrict their right to organize, but was triggered by
the commission of an act, expressly sanctioned by the unions Constitution and
By-Laws. It is indubitable that all the prohibited acts constituting unfair labor
practice should materially relate to the workers' right to self-organization. The
petitioners were unable to prove their charge of ULP against the respondents.
The records likewise failed to sufficiently show that the respondents unduly
persuaded management into discriminating against petitioners, other than to
bring to its attention their expulsion from the union, which in turn, resulted in the
implementation of their CBA' s union security clause.
Second, Based on RPNEUs Constitution and By-Laws, the charges against
petitioners were not mere internal squabbles, but violations that demand proper
investigation because, if proven, would constitute grounds for their expulsion
from the union.
As such, Article X, Investigation Procedures and Appeal Process of RPNEUs
Constitution and By-Laws, which reads - SECTION 1. Charge against any
member or officer of the Union shall be submitted to the Board of Directors (BOD)
in writing, which shall refer the same, if necessary, to the committee on Grievance
and Investigation. The Committee shall hear any charge and subsequently,
forward its finding and recommendation to the BOD. The BOD has the power to
approve or nullify the recommendation of the Committee on Grievance and
Investigation based on the merit of the appeal was correctly applied under the
circumstances.
Besides, any supposed procedural flaw in the proceedings before the Committee
was deemed cured when petitioners were given the opportunity to be heard. It
cannot be denied that petitioners were properly notified of the charges filed
against them and were equally afforded the opportunity to present their side.
Mere absence of a one-on-one confrontation between the petitioners and their
complainants does not automatically affect the validity of the proceedings before
the Committee. Not all cases necessitate a trial-type hearing.
INTEGRATED MICROELECTRONICS INC., VERSUS PIONILLA
Exception to the rule on reinstatement and backwages
Perlas-Bernabe, J.
DOCTRINE:
An illegally dismissed employee is entitled to either reinstatement, if viable, or
separation pay if reinstatement is no longer viable, and backwages. In certain
cases, however, the Court has ordered the reinstatement of the employee without
backwages considering the fact that (1) the dismissal of the employee would be
too harsh a penalty; and (2) the employer was in good faith in terminating the
employee.
ISSUE:
Whether or not the termination of Pionilla is excessive
RULING:
As a general rule, an illegally dismissed employee is entitled to reinstatement (or
separation pay, if reinstatement is not viable) and payment of full backwages.
However, the Court has carved out an exception to the rule and thereby order
reinstatement of employees without backwages on account of: a) the fact that
dismissal of the employee would be too harsh of a penalty, and b) that the
employer was in good faith in terminating the employee.
In this case, the Court observes that: (a) the penalty of dismissal was too harsh
of a penalty to be imposed against Pionilla for his infractions; and (b) IMI was in
good faith when it dismissed Pionilla as his dereliction of its policy on ID usage
was honestly perceived to be a threat to the company's security.
In this respect, since these concurring circumstances trigger the application of
the exception to the rule on backwages cases, the Court finds it proper to accord
the same disposition and consequently directs the deletion of the award of back
wages in favor of Pionilla, notwithstanding the illegality of his dismissal.
#Anonuevo
GOLDEN ACE BUILDERS and ARNOLD U. AZUL vs. JOSE A. TALDE
DOCTRINE:
Under the doctrine of strained relations, the payment of separation pay is
considered an acceptable alternative to reinstatement when the latter option is
no longer desirable or viable. On one hand, such payment liberates the
employee from what could be a highly oppressive work environment. On the
other hand, it releases the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust.
ISSUE:
Whether respondent Talde is entitled to both backwages and separation pay,
even if separation pay was not granted by the Labor Arbiter, the latter in view of
the strained relations between the parties.
RULING:
An illegally dismissed employee is entitled to two reliefs: backwages and
reinstatement. The two reliefs provided are separate and distinct. In instances
where reinstatement is no longer feasible because of strained relations between
the employee and the employer, separation pay is granted. In effect, an illegally
dismissed employee is entitled to either reinstatement, if viable, or separation pay
if reinstatement is no longer viable, and backwages.
The normal consequences of respondents illegal dismissal, then, are
reinstatement without loss of seniority rights, and payment of backwages
computed from the time compensation was withheld up to the date of actual
reinstatement. Where reinstatement is no longer viable as an option, separation
pay equivalent to one (1) month salary for every year of service should be
awarded as an alternative. The payment of separation pay is in addition to
payment of backwages.
Under the doctrine of strained relations, the payment of separation pay is
considered an acceptable alternative to reinstatement when the latter option is
no longer desirable or viable. On one hand, such payment liberates the
employee from what could be a highly oppressive work environment. On the
other hand, it releases the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust.
Strained relations must be demonstrated as a fact, however, to be adequately
supported by evidence substantial evidence to show that the relationship
between the employer and the employee is indeed strained as a necessary
consequence of the judicial controversy.
In the present case, the Labor Arbiter found that actual animosity existed between
petitioner Azul and respondent as a result of the filing of the illegal dismissal case.
Such finding, especially when affirmed by the appellate court as in the case at
bar, is binding upon the Court, consistent with the prevailing rules that this Court
will not try facts anew and that findings of facts of quasi-judicial bodies are
accorded great respect, even finality.
Clearly then, respondent is entitled to backwages and separation pay as his
reinstatement has been rendered impossible due to strained relations. As
correctly held by the appellate court, the backwages due respondent must be
computed from the time he was unjustly dismissed until his actual reinstatement,
or from February 1999 until June 30, 2005 when his reinstatement was rendered
impossible without fault on his part.
ART. 282
Lolita S. Concepcion v. Minex Import Corporation
G.R. No. 153569
January 24, 2012
Bersamin, J.
Case Doctrine:
The employer may validly dismiss for loss of trust and confidence an employee
who commits an act of fraud prejudicial to the interest of the employer. Neither a
criminal prosecution nor a conviction beyond reasonable doubt for the crime is a
requisite for the validity of the dismissal. Nonetheless, the dismissal for a just or
lawful cause must still be made upon compliance with the requirements of due
process under the Labor Code; otherwise, the employer is liable to pay nominal
damages as indemnity to the dismissed employee.
Issue: Whether or not the employer denied the employee dismissed with due
process and thu liable for damages?
Ruling:
Yes. To dismiss an employee, the law requires the existence of a just and valid
cause. Article 282 of the Labor Code enumerates the just causes for termination
by the employer: (a) serious misconduct or willful disobedience by the employee
of the lawful orders of his employer or the latters representative in connection
with the employees work; (b) gross and habitual neglect by the employee of his
duties; (c) fraud or willful breach by the employee of the trust reposed in him by
his employer or his duly authorized representative; (d) commission of a crime or
offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representative; and (e) other causes
analogous to the foregoing.
Indeed, the employer is not expected to be as strict and rigorous as a judge in a
criminal trial in weighing all the probabilities of guilt before terminating the
employee. Unlike a criminal case, which necessitates a moral certainty of guilt
due to the loss of the personal liberty of the accused being the issue, a case
concerning an employee suspected of wrongdoing leads only to his termination
as a consequence. The quantum of proof required for convicting an accused is
thus higher proof of guilt beyond reasonable doubt than the quantum
prescribed for dismissing an employee substantial evidence. In so stating, we
are not diminishing the value of employment, but only noting that the loss of
employment occasions a consequence lesser than the loss of personal liberty,
and may thus call for a lower degree of proof.
Yet, even as we now say that the respondents had a just or valid cause for
terminating the petitioner, it becomes unavoidable to ask whether or not they
complied with the requirements of due process. The petitioner plainly
demonstrated how quickly and summarily her dismissal was carried out without
first requiring her to explain anything in her defense as demanded under Section
2 (d) of Rule I of the Implementing Rules of Book VI of the Labor Code. Instead,
the respondents forthwith had her arrested and investigated by the police
authorities for qualified theft. This, we think, was a denial of her right to due
5
process of law, consisting in the opportunity to be heard and to defend herself. In
fact, their decision to dismiss her was already final even before the police
authority commenced an investigation of the theft, the finality being confirmed by
no less than Sylvia Mariano herself telling the petitioner during their phone
conversation following the latters release from police custody on November 11,
1997 that she (Sylvia) no longer wanted to see her.
The fair and reasonable opportunity required to be given to the employee before
dismissal encompassed not only the giving to the employee of notice of the cause
and the ability of the employee to explain, but also the chance to defend against
the accusation. This was our thrust in Philippine Pizza, Inc. v. Bungabong, where
we held that the employee was not afforded due process despite the dismissal
being upon a just cause, considering that he was not given a fair and reasonable
opportunity to confront his accusers and to defend himself against the charge of
theft notwithstanding his having submitted his explanation denying that he had
stolen beer from the company dispenser. The termination letter was issued a day
before the employee could go to the HRD Office for the investigation, which made
it clear to him that the decision to terminate was already final even before he
could submit his side and refute the charges against him. Nothing that he could
say or do at that point would have changed the decision to dismiss him. Such
omission to give the employee the benefit of a hearing and investigation before
his termination constituted an infringement of his constitutional right to due
process by the employer.
Where the dismissal is for a just cause, as in the instant case, the lack of statutory
due process should not nullify the dismissal, or render it illegal, or
ineffectual. However, the employer should indemnify the employee for the
violation of his statutory rights, as ruled in Reta v. National Labor Relations
Commission. The indemnity to be imposed should be stiffer to discourage the
abhorrent practice of dismiss now, pay later, which we sought to deter in
the Serrano ruling. The sanction should be in the nature of indemnification or
penalty and should depend on the facts of each case, taking into special
consideration the gravity of the due process violation of the employer.
The violation of the petitioners right to statutory due process by the private
respondent warrants the payment of indemnity in the form of nominal
damages. The amount of such damages is addressed to the sound discretion of
the court, taking into account the relevant circumstances. Considering the
prevailing circumstances in the case at bar, we deem it proper to fix it
at P30,000.00. We believe this form of damages would serve to deter employers
from future violations of the statutory due process rights of employees. At the
very least, it provides a vindication or recognition of this fundamental right granted
to the latter under the Labor Code and its Implementing Rules.
GRAND ASIAN SHIPPING LINES, INC., EDUARDO P. FRANCISCO and
WILLIAM HOW vs. WILFREDO GALVEZ, ET AL.
G.R. No. 178184 January 29, 2014
DEL CASTILLO, J.
DOCTRINE:
The employer has broader discretion in dismissing managerial employees on the
ground of loss of trust and confidence than those occupying ordinary ranks. While
plain accusations are not sufficient to justify the dismissal of rank and file
employees, the mere existence of a basis for believing that managerial
employees have breached the trust reposed on them by their employer would
suffice to justify their dismissal.
ISSUE:
Is there a valid dismissal by the employer?
RULING:
Galvez and Gruta were validly dismissed on the ground of loss of trust and
confidence; there were no valid grounds for the dismissal of Arguelles, Batayola,
Fresnillo, Noble, Dominico, Nilmao and Austral.
In termination disputes, the burden of proving that the dismissal is for a just or
valid cause rests on the employers. Failure on their part to discharge such burden
will render the dismissal illegal.
As specified in the termination notice, respondents were dismissed on the
grounds of (i) serious misconduct, particularly in engaging in pilferage while
navigating at sea, (ii) willful breach of the trust reposed by the company, and (iii)
commission of a crime or offense against their employer. Petitioners claim that
based on the sworn statement of Abis, joint affidavit of Bernabe and De la Rama,
letter of petitioner Francisco requesting assistance from the CIDG, formal
complaint sheet, complaint and supplementary complaint affidavit of Montegrico,
CIDGs letter referring respondents case to the Office of the City Prosecutor of
Manila, resolution of the City Prosecutor finding a prima facie case of qualified
theft, and the Information for qualified theft, there is a reasonable ground to
believe that respondents were responsible for the pilferage of diesel fuel oil at
M/T Dorothy Uno, which renders them unworthy of the trust and confidence
reposed on them.
After examination of the evidence presented, however, the Court found that
petitioners failed to substantiate adequately the charges of pilferage against
respondents. "[T]he quantum of proof which the employer must discharge is
substantial evidence. x x x Substantial evidence is that amount of relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion, even if other minds, equally reasonable, might conceivably opine
otherwise."
Here, the mere filing of a formal charge, to our mind, does not automatically make
the dismissal valid. Evidence submitted to support the charge should be
evaluated to see if the degree of proof is met to justify respondents termination.
The affidavit executed by Montegrico simply contained the accusations of Abis
that respondents committed pilferage, which allegations remain uncorroborated.
"Unsubstantiated suspicions, accusations, and conclusions of employers do not
provide for legal justification for dismissing employees." The other bits of
evidence were also inadequate to support the charge of pilferage. The findings
made by GASLIs port captain and internal auditor and the resulting certification
executed by De la Rama merely showed an overstatement of fuel consumption
as revealed in the Engineers Voyage Reports. The report of Jade Sea Land
Inspection Services only declares the actual usage and amount of fuel consumed
for a particular voyage. There are no other sufficient evidence to show that
respondents participated in the commission of a serious misconduct or an
offense against their employer.
As for the second ground for respondents termination, which is loss of trust and
confidence, distinction should be made between managerial and rank and file
employees. "[W]ith respect to rank-and-file personnel, loss of trust and
confidence, as ground for valid dismissal, requires proof of involvement in the
alleged events x x x [while for] managerial employees, the mere existence of a
basis for believing that such employee has breached the trust of his employer
would suffice for his dismissal."
In the case before us, Galvez, as the ship captain, is considered a managerial
employee since his duties involve the governance, care and management of the
vessel. Gruta, as chief engineer, is also a managerial employee for he is tasked
to take complete charge of the technical operations of the vessel. As captain and
as chief engineer, Galvez and Gruta perform functions vested with authority to
execute management policies and thereby hold positions of responsibility over
the activities in the vessel. Indeed, their position requires the full trust and
confidence of their employer for they are entrusted with the custody, handling
and care of company property and exercise authority over it.
Thus, the Court found that there is some basis for the loss of confidence reposed
on Galvez and Gruta. The certification issued by De la Rama stated that there is
an overstatement of fuel consumption. Notably, while respondents made self-
serving allegations that the computation made therein is erroneous, they never
questioned the competence of De la Rama to make such certification. Neither did
they question the authenticity and validity of the certification. Thus, the fact that
there was an overstatement of fuel consumption and that there was loss of a
considerable amount of diesel fuel oil remained unrefuted. Their failure to
account for this loss of company property betrays the trust reposed and expected
of them. They had violated petitioners trust and for which their dismissal is
justified on the ground of breach of confidence.
As for Arguelles, Batayola, Fresnillo, Noble, Dominico, Nilmao and Austral, proof
of involvement in the loss of the vessels fuel as well as their participation in the
alleged theft is required for they are ordinary rank and file employees. And as
discussed above, no substantial evidence exists in the records that would
establish their participation in the offense charged. This renders their dismissal
illegal, thus, entitling them to reinstatement plus full backwages, inclusive of
allowances and other benefits, computed from the time of their dismissal up to
the time of actual reinstatement.
MIRANT PHIL. CORP. V. CARO
Case doctrine: Company policies and regulations are generally valid and
binding between the employer and the employee unless shown to be grossly
oppressive or contrary to law.
Issue: Whether or not there was an illegal dismissal.
Held:
There was illegal dismissal.
First, the policy of the company was not clear on what constitutes unjustified
refusal as evidenced by the fact that the investigating panel recommended it to
the Management that it be defined clearly and also the LA, NLRC and CA had
to engage in semantics and came up with different constructions. Thus by
jurisprudence and law, all doubts shall be resolved in favor of labor. CA was
therefore correct in pointing out that the petitioners Anti-Drug Policy is
excessive in terminating an employee for his "unjustified refusal" to subject
himself to the random drug test on first offense, without clearly defining what
amounts to an "unjustified refusal.
Secondly, the penalty of termination imposed by petitioner corporation upon
respondent fell short of being reasonable. Company policies and regulations
are generally valid and binding between the employer and the employee unless
shown to be grossly oppressive or contrary to law. The unreasonableness of
the penalty of termination as imposed in this case is further highlighted by a fact
admitted by petitioner corporation itself: that for the ten-year period that
respondent had been employed by petitioner corporation, he did not have any
record of a violation of its company policies.
Hence, reinstatement and backwages are awarded, along with moral and
exemplary damages with attorneys fees.
CASE TITLE : BLUER THAN BLUE JOINT VENTURES
COMPANY/MARY ANN DELA VEGA (vs) GLYZA ESTEBAN
ISSUES:
1. Whether or not Estebans acts constitute just cause to terminate her
employment with the company on the ground of loss of trust and confidence.
2. Whether or not the principle of reasonable proportionality on the
wrongful acts is not applicable to respondent.
3. Whether or not the preventive suspension of respondent was
unwarranted.
4. Whether or not the wage deduction for the negative variance
unfounded
RULING:
1. With respect to rank-and-file personnel, loss of trust and confidence
as ground for valid dismissal requires proof of involvement in the alleged events
in question, and that mere uncorroborated assertions and accusations by the
employer will not be sufficient. Esteban was employed as a sales clerk. Aside
from attending to customers and tending to the shop, Esteban also assumed
cashiering duties. Given that she had in her care and custody the stores property
6
and funds, she is considered as a rank-and-file employee occupying a position
of trust and confidence. The acts committed by Esteban do not amount to a wilful
breach of trust. She admitted that she accessed the POS system with the use of
the unauthorized "123456" password. She did so, however, out of curiosity and
without any obvious intention of defrauding the petitioner. Moreover, the
petitioner even admitted that Esteban has her own password to the POS system.
If it was her intention to manipulate the stores inventory and funds, she could
have done so long before she had knowledge of the unauthorized password. But
the facts on hand show that she did not. Estebans lapse is, at best, a careless
act that does not merit the imposition of the penalty of dismissal. That she relayed
the password to another employee is likewise demonstrative of her mindless
appreciation of her duties as a sales clerk in the petitioners employ but absent
any showing that her acts were done with "moral perverseness" that would justify
the claimed loss of trust and confidence attendant to her job, the Court must
sustain the conclusion that Esteban was illegally dismissed.
2. While it may be that the acts complained of were committed by
Esteban almost a year before the investigation was conducted, still, it should be
pointed out that Esteban was performing functions that involve handling of the
petitioners property and funds, and the petitioner had every right to protect its
assets and operations pending Estebans investigation.
3. Petitioner failed to sufficiently establish that Esteban was responsible
for the negative variance it had in its sales for the year 2005 to 2006 and that
Esteban was given the opportunity to show cause the deduction from her last
salary should not be made. Guided by Article 113 of the Labor Code and Section
14 of the Omnibus Rules Implementing the Labor Code, the Court cannot accept
the petitioners statement that it is the practice in the retail industry to deduct
variances from an employees salary, without more.
The petition is partially granted and the decision and resolutions of the CA insofar
as it reinstated with modification the decision of the Labor Arbiter are affirmed.
But the decision shall be reversed insofar as it affirmed respondent Glyza
Esteban's preventive suspension. The Labor Arbiter is ordered to re-compute the
monetary award in favor of Glyza Esteban and to exclude the award of
backwages during such period of preventive suspension, if any.
MANILA JOCKEY CLUB, INC. v. AIMEE O. TRAJANO.
G.R. No. 160982 June 26, 2013
Keywords: willful breach of trust
Doctrine: The loss of trust and confidence, to be a valid ground for dismissal,
must be based on a willful breach of trust and confidence founded on clearly
established facts.
Issue: Whether or not there was just cause when Petitioner (MJCI) dismissed
Respondent Aimee O. Trajano from the service
Held: There was no just cause for dismissal.
The loss of trust and confidence, to be a valid ground for dismissal, must be
based on a willful breach of trust and confidence founded on clearly established
facts. "A breach is willful, if it is done intentionally, knowingly and purposely,
without justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and
not on the employers arbitrariness, whims, caprices or suspicion; otherwise, the
employee would eternally remain at the mercy of the employer."30 An ordinary
breach is not enough.
As a selling teller, Trajano held a position of trust and confidence. Although the
act complained of the unauthorized cancellation of the ticket (i.e., unauthorized
because it was done without the consent of the bettor) was related to her work
as a selling teller, MJCI did not establish that the cancellation of the ticket was
intentional, knowing and purposeful on her part in order for her to have breached
the trust and confidence reposed in her by MJCI, instead of being only out of an
honest mistake.
Still, to justify the supposed loss of its trust and confidence in Trajano, MJCI
contends that the unauthorized cancellation of the ticket could have greatly
prejudiced MJCI for causing damage to both its income and reputation.
As the records indicate, MJCIs prejudice remained speculative and unrealized.
To dismiss an employee based on speculation as to the damage the employer
could have suffered would be an injustice. The injustice in the case of Trajano
would be greater if the supposed just cause for her dismissal was not even
sufficiently established. While MJCI as the employer understandably had its own
interests to protect, and could validly terminate any employee for a just cause, its
exercise of the power to dismiss should always be tempered with compassion
and imbued with understanding, avoiding its abuse.32
HORMILLOSA VS COCA COLA
Doctrine: Article 282 of the Labor Code enumerates the just causes for the
termination of employment of an employee by the employer
Ruling of the Court
Article 282 of the Labor Code enumerates the just causes for the termination of
employment of an employee by the employer, to wit:
Art. 282. Termination by employer. An employee may terminate an employment
for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representative; and
(e) Other causes analogous to the foregoing.
The rule is that, in labor cases, substantial evidence or such relevant evidence
as a reasonable mind might accept as sufficient to support a conclusion is
required.
There are two (2) classes of positions of trust. The first class consists of
managerial employees. They are defined as those vested with the powers or
prerogatives to lay down management policies and to hire, transfer suspend, lay-
off, recall, discharge, assign or discipline employees or effectively recommend
such managerial actions. The second class consists of cashiers, auditors,
property custodians, etc. They are defined as those who in the normal and routine
exercise of their functions, regularly handle significant amounts of money or
property.
xxxx
The second requisite is that there must be an act that would justify the loss of
trust and confidence. Loss of trust and confidence to be a valid cause for
dismissal must be based on a willful breach of trust and founded on clearly
established facts.
Hormillosa, being a route salesman, falls under the second class. By selling soft
drink products and collecting payments for the same, he was considered an
employee who regularly handled significant amounts of money and property in
the normal and routine exercise of his functions.
We agree that route salesmen are likely individualistic personnel who roam
around selling softdrinks, deal with customers and are entrusted with large asset
and funds and property of the employer. There is a high degree of trust and
confidence reposed on them, and when confidence is breached, the employer
may take proper disciplinary action on them. The work of a salesman exposes
him to voluminous financial transactions involving his employers goods
With regard to the second requisite for dismissal on the ground of loss of trust
and confidence Hormillosa cannot deny that fact that he issued sales invoices to
Arnold Store, a store unregistered or unaccredited with CBPI. He transacted with
the said store using the account of Virgie Bucaes, proprietor of Virgies Eatery.
Bucaes, who had an outlet profile with CBPI, was assigned with Control No.
0027069.22 Hormillosa extended credit to Arnold Store, an unknown customer
to CBPI, as documented by two credit sales invoices, Invoice Nos. 79872 and
79873, amounting to P5,600.00 and P4,806.00respectively. By doing so, he gave
a false and misleading representation that the account was that of Bucaes. CBPI
had a set of rules and regulations, one of which was that only those outlets, which
had outlet control, were entitled to enjoy credit from CBPI. Salesmen were not
allowed to extend credit to those who had no outlet numbers or outlet profiles
from CBPI. Evidently, Hormillosa disregarded and disobeyed the company rules.
As earlier stated, the evidence in this regard was supplied by Hormillosa himself
when he submitted copies of the sales invoices. For this reason, the stipulation
under Section 2(d), Article III of the CBA, which provides that the company shall
coordinate with the Unions authorized representative to witness the account
verification that the company would conduct with respect to questionable
accounts issued to Company customers by route salesman or relief salesmen
under investigation, is not applicable.
In the case at bench, Hormillosa's act of issuing sales invoices to Arnold Store
could not have been performed without intent and knowledge on his part as such
act could not have been done without planning or merely through negligence.
Hence, the breach was willful.
The award of separation pay is authorized in the situations dealt with in Article
283 and Art. 284 of the Labor Code, but not in terminations of employment based
on instances enumerated in Art. 282
"The only cases when separation pay shall be paid, although the employee was
lawfully dismissed, are when the cause of termination was not attributable to the
employee's fault but due to: (I) the installation of labor saving devices, (2)
redundancy, (3) retrenchment, (4) cessation of employer's business, or (5) when
the employee is suffering from a disease and his continued employment is
prohibited by law or is prejudicial to his health and to the health of his co-
employees (Articles 283 and 284, Labor Code.) Other than these cases, an
employee who is dismissed for a just and lawful cause is not entitled to separation
pay even if the award were to be called by another name."
ERIC V. CHUANICO, Petitioner,
vs.
LEGACY CONSOLIDATED PLANS, INC., Respondent.
G.R. No. 181852 October 9, 2013
ISSUE:Whether or not the CA erred in holding that the NLRC committed grave
abuse of discretion in finding that Legacy Consolidated illegally dismissed Atty.
Chuanico for mishandling the two cases alleged to have been assigned to him.
HELD:
7
SC: REINSTATES the Resolution of the National Labor Relations Commission
The CA found reasonable basis for believing that Atty. Chuanico had breached
his employers trust.1wphi1 He was not a mere rank-and-file employee but an
in-house counsel. Thus, Legacy Consolidated enjoyed wide latitude in evaluating
his work and attitude and in terminating his employment on the ground of loss of
trust and confidence. His mishandling of the cases assigned to him shows that
he had been unfit to continue working for his employer.
But these are broad principles that do not themselves show when, where, and
how Atty. Chuanico betrayed the trust that Legacy Consolidated gave him as in-
house counsel. To be a valid cause for dismissal, the loss of trust must be based
on a willful breach of such trust and founded on clearly established facts. 17 The
company charged him with having mishandled two things that were assigned to
him, the drafting of an answer in one and the preparation of a complaint affidavit
in the other. It failed to present proof, however, of such mishandling.
The CA noted from an alleged copy of Atty. Chuanicos draft-answer, belatedly
submitted, that he incorrectly titled it "Answer with Cross Party Complaint" instead
of "Answer with Cross Claim" and wrote in the explanation regarding mode of
service that the pleading was an "Answer with Third Party Complaint." But, since
Legacy Consolidated did not adduce this document at the hearing below, the CA
cannot say that the LA and the NLRC gravely abused their discretion in failing to
consider the same. Besides, the alleged error in misstating the second part of the
pleadings title is clearly of little consequence since what mattered most in
pleadings are their factual allegations, claims, and defenses.
In the second case, Legacy Consolidated accused Atty. Chuanico of failing to
prepare a complaint-affidavit against a certain De Rama. Atty. Chuanico denied
that the matter had been assigned to him. Yet, as the LA and the NLRC noted,
Legacy Consolidated did not bother to present some note or logbook to refute
this denial. It only presented the sworn statement of the office secretary,
supposedly competent, who relied merely on her memory for ascertaining
individual work assignments in a law practice that served a number of affiliated
companies.
Legacy Consolidated said in its Comment that certain employees complained of
Atty. Chuanico's work attitude and inefficiency. 19 But these were not the charges
that Legacy Consolidated required him to defend himself Indeed, these charges
lack the specifics of time, place, and circumstances. Moreover, since Legacy
Consolidated did not present evidence to support such broad charges before the
LA, the Court cannot consider the same without violating Atty. Chuanico's right
to due process of law.
Lastly Atty. Chuanico was dismissed due to willful breach of trust. Settled is the
rule, however, that under Article 282(c) of the Labor Code, the breach of trust
must be willful. Ordinary breach will not be enough. A breach is willful if it is done
intentionally and knowingly without any justifiable excuse, as distinguished from
an act done carelessly, thoughtlessly or inadvertently. Willful breach was not
proved in this case.
ARTICLE 282
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON
vs. GLAXO WELLCOME PHILIPPINES, INC.
KEYWORDS: relationship with employee of competitor, transfer, constructive
dismissal
PONENTE: TINGA, J.
DOCTRINE:
No less than the Constitution recognizes the right of enterprises to adopt and
enforce such a policy to protect its right to reasonable returns on investments
and to expansion and growth. Indeed, while the laws endeavor to give life to the
constitutional policy on social justice and the protection of labor, it does not
mean that every labor dispute will be decided in favor of the workers. The law
also recognizes that management has rights which are also entitled to respect
and enforcement in the interest of fair play.
Constructive dismissal is defined as a quitting, an involuntary resignation
resorted to when continued employment becomes impossible, unreasonable, or
unlikely; when there is a demotion in rank or diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to
the employee
ISSUE:
1. Whether Glaxos policy against its employees marrying employees from
competitor companies is valid and does not violate the equal protection clause of
the Constitution;
2. Whether Tecson was constructively dismissed.
SC RULING:
1. YES. Glaxos policy of prohibiting an employee from having a relationship with
an employee of a competitor company is a valid exercise of management
prerogative. Glaxo has a right to guard its trade secrets, manufacturing formulas,
marketing strategies and other confidential programs and information from
competitors, especially so that it and Astra are rival companies in the highly
competitive pharmaceutical industry. The prohibition is reasonable because
relationships of that nature might compromise the interests of the company. In
laying down the assailed company policy, Glaxo only aims to protect its interests
against the possibility that a competitor company will gain access to its secrets
and procedures. That Glaxo possesses the right to protect its economic interests
cannot be denied. No less than the Constitution recognizes the right of
enterprises to adopt and enforce such a policy to protect its right to reasonable
returns on investments and to expansion and growth. Indeed, while thelaws
endeavor to give life to the constitutional policy on social justice and the
protection of labor, it does not mean that every labor dispute will be decided in
favor of the workers. The law also recognizes that management has rights which
are also entitled to respect and enforcement in the interest of fair play.
2. NO. Tecson was not constructively dismissed when he was transferred from
the Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao City-
Agusan del Sur sales area, and when he was excluded from attending the
companys seminar on new products which were directly competing with similar
products manufactured by Astra. Constructive dismissal is defined as a quitting,
an involuntary resignation resorted to when continued employment becomes
impossible, unreasonable, or unlikely; when there is a demotion in rank or
diminution in pay; or when a clear discrimination, insensibility or disdain by an
employer becomes unbearable to the employee. None of these conditions are
present in the instant case. Tecson was neither demoted nor unduly
discriminated upon by reason of such transfer. Glaxo properly exercised its
management prerogative in reassigning Tecson to the Butuan City sales area. It
must be noted that Tecsons wife holds a sensitive supervisory position as Branch
Coordinator in her employer-company which requires her to work in close
coordination with District Managers and Medical Representatives, her duties
consisting of monitoring sales of Astra products, conducting sales drives,
establishing and furthering relationship with customers, collection, monitoring,
and managing Astras inventory. She therefore takes an active participation in
the market war characterized as it is by stiff competition among pharmaceutical
companies. The proximity of their areas of responsibility, all in the same Bicol
Region, renders the conflict of interest not only possible, but actual, as learning
by one spouse of the others market strategies in the region would be
inevitable. Managements appreciation of a conflict of interest is therefore not
merely illusory and wanting in factual basis.
STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN
CHUA, vs. RONALD D. SIMBOL, WILFREDA N. COMIA & LORNA E.
ESTRELLA
G.R. No. 164774; April 12, 2006
ISSUE: Whether the subject 1995 policy/regulation is violative of the
constitutional rights towards marriage and the family of employees and of Article
136 of the Labor Code
HELD:
YES. These courts find the no-spouse employment policy invalid for failure of the
employer to present any evidence of business necessity other than the general
perception that spouses in the same workplace might adversely affect the
business. They hold that the absence of such a bona fide occupational
qualification invalidates a rule denying employment to one spouse due to the
current employment of the other spouse in the same office. Thus, they rule that
unless the employer can prove that the reasonable demands of the business
require a distinction based on marital status and there is no better available or
acceptable policy which would better accomplish the business purpose, an
employer may not discriminate against an employee based on the identity of the
employees spouse. This is known as the bona fide occupational qualification
exception.
To justify a bona fide occupational qualification, the employer must prove two
factors: (1) that the employment qualification is reasonably related to the
essential operation of the job involved; and, (2) that there is a factual basis for
believing that all or substantially all persons meeting the qualification would be
unable to properly perform the duties of the job. We do not find a reasonable
business necessity in the case at bar. Petitioners sole contention that "the
company did not just want to have two (2) or more of its employees related
between the third degree by affinity and/or consanguinity" is lame. That the
second paragraph was meant to give teeth to the first paragraph of the
questioned rule is evidently not the valid reasonable business necessity required
by the law.
It is significant to note that in the case at bar, respondents were hired after they
were found fit for the job, but were asked to resign when they married a co-
employee. Petitioners failed to show how the marriage of Simbol, then a Sheeting
Machine Operator, to Alma Dayrit, then an employee of the Repacking Section,
could be detrimental to its business operations. Neither did petitioners explain
how this detriment will happen in the case of Wilfreda Comia, then a Production
Helper in the Selecting Department, who married Howard Comia, then a helper
in the cutter-machine. The policy is premised on the mere fear that employees
married to each other will be less efficient. If we uphold the questioned rule
without valid justification, the employer can create policies based on an unproven
presumption of a perceived danger at the expense of an employees right to
security of tenure. The failure of petitioners to prove a legitimate business
concern in imposing the questioned policy cannot prejudice the employees right
to be free from arbitrary discrimination based upon stereotypes of married
persons working together in one company. Thus, for failure of petitioners to
present undisputed proof of a reasonable business necessity, we rule that the
questioned policy is an invalid exercise of management prerogative. Corollarily,
the issue as to whether respondents
Simbol and Comia resigned voluntarily has become moot and academic.
As to respondent Estrella, the Labor Arbiter and the NLRC based their ruling on
the singular fact that her resignation letter was written in her own handwriting.
Both ruled that her resignation was voluntary and thus valid. The respondent
court failed to categorically rule whether Estrella voluntarily resigned but ordered
that she be reinstated along with Simbol and Comia. Estrella avers that she went
back to work on December 21, 1999 but was dismissed due to her alleged
immoral conduct. At first, she did not want to sign the termination papers but she
was forced to tender her resignation letter in exchange for her thirteenth month
pay. The contention of petitioners that Estrella was pressured to resign because
she got impregnated by a married man and she could not stand being looked
upon or talked about as immoral is incredulous. If she really wanted to avoid
embarrassment and humiliation, she would not have gone back to work at all.
Nor would she have filed a suit for illegal dismissal and pleaded for
reinstatement. We have held that in voluntary resignation, the employee is
compelled by personal reason(s) to dissociate himself from employment. It is
done with the intention of relinquishing an office, accompanied by the act of
abandonment. Thus, it is illogical for Estrella to resign and then file a complaint
for illegal dismissal. Given the lack of sufficient evidence on the part of petitioners
that the resignation was voluntary, Estrellas dismissal is declared illegal.
ST. LUKES MEDICAL CENTER, INC v. ESTRELITO NOTARIO, G.R. No.
152166, October 20, 2010
8
CASE DOCTRINE: Under Article 282 (b) of the Labor Code, an employer may
terminate an employee for gross and habitual neglect of duties. Neglect of duty,
to be a ground for dismissal, must be both gross and habitual. Gross negligence
connotes want of care in the performance of ones duties. Habitual neglect
implies repeated failure to perform ones duties for a period of time, depending
upon the circumstances. A single or isolated act of negligence does not constitute
a just cause for the dismissal of the employee.
ISSUE: Whether or not the dismissal of respondent is valid.
HELD: NO. Respondent was illegally dismissed without just cause and
compliance with the notice requirement. Article 282 (b) of the Labor Code
provides that an employer may terminate an employment for gross and habitual
neglect by the employee of his duties. Corollarily, regarding termination of
employment, the Omnibus Rules Implementing the Labor Code, as amended,
provides that:
Section 2. Security of Tenure. (a) In cases of regular employment, the employer
shall not terminate the services of an employee except for just or authorized
causes as provided by law, and subject to the requirements of due process. x x
xx
(d) In all cases of termination of employment, the following standards of due
process shall be substantially observed:
For termination of employment based on just causes as defined in Article 282 of
the Labor Code: (i) A written notice served on the employee specifying the ground
or grounds for termination, and giving said employee reasonable opportunity
within which to explain his side. (ii) A hearing or conference during which the
employee concerned, with the assistance of counsel if he so desires is given
opportunity to respond to the charge, present his evidence, or rebut the evidence
presented against him. (iii) A written notice of termination served on the
employee, indicating that upon due consideration of all the circumstances,
grounds have been established to justify his termination. xxxx
To effectuate a valid dismissal from employment by the employer, the Labor
Code has set twin requirements, namely: (1) the dismissal must be for any of the
causes provided in Article 282 of the Labor Code; and (2) the employee must be
given an opportunity to be heard and defend himself. This first requisite is referred
to as the substantive aspect, while the second is deemed as the procedural
aspect.
An employer can terminate the services of an employee only for valid and just
causes which must be supported by clear and convincing evidence. The
employer has the burden of proving that the dismissal was indeed for a valid and
just cause.
A perusal of petitioner hospitals CCTV Monitoring Guidelines, disseminated to
all in-house security personnel, reveals that that there is no categorical provision
requiring an in-house security personnel to observe a rotation sequence
procedure in focusing the cameras so that the security monitoring would cover
as many areas as possible. Under Article 282 (b) of the Labor Code, an employer
may terminate an employee for gross and habitual neglect of duties. Neglect of
duty, to be a ground for dismissal, must be both gross and habitual. Gross
negligence connotes want of care in the performance of ones duties. Habitual
neglect implies repeated failure to perform ones duties for a period of time,
depending upon the circumstances. A single or isolated act of negligence does
not constitute a just cause for the dismissal of the employee.
Petitioners lack of just cause and non-compliance with the procedural requisites
in terminating respondents employment renders them guilty of illegal dismissal.
Consequently, respondent is entitled to reinstatement to his former position
without loss of seniority rights and payment of backwages. However, if such
reinstatement proves impracticable, and hardly in the best interest of the parties,
perhaps due to the lapse of time since his dismissal, or if he decides not to be
reinstated, respondent should be awarded separation pay in lieu of
reinstatement.
The Court deems that since reinstatement is no longer feasible due to the long
passage of time, petitioners are required to pay respondent his separation pay
equivalent to one (1) months pay for every year of service. Petitioners are thus
ordered to pay respondent his backwages of P250,229.97 and separation pay of
P31,365.00, or a total amount of P281,594.97.
THE COCA-COLA EXPORT CORPORATION,
Petitioner,
- versus - G.R. No. 124617. April 28, 2000
CLARITA P. GACAYAN,
Respondent.
Issue: whether or not the dissmissal is valid.
Held:
No,The Labor Code mandates that before an employer may validly dismiss an
employee from the service, the requirement of substantial and procedural due
process must be complied with. Under the requirement of substantial due
process, the grounds for termination of employment must be based on just or
authorized causes. In termination cases, the burden of proof rests on the
employer to show that the dismissal was for just cause. Otherwise, an employee
who is illegally dismissed shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from
the time his compensation was withheld from him up to the time of his actual
reinstatement.At the outset, it is important to note that the term trust and
confidence is restricted to managerial employees. In the instant case,
respondent was the Senior Financial Accountant with the Job Description of a
Financial Project Analyst. Respondent, among others, provides support in the
form of financial analyses and evaluation of alternative strategies or action plans
to assist management in strategic and operational decision-making. In the instant
case, the basis for terminating the employment of respondent was for gross
violation of the companys rules and regulations, as specified in the termination
letter. Evidently, no mention was made regarding petitioners alleged loss of trust
and confidence in respondent. Neither was there any explanation nor discussion
of the alleged sensitive and delicate position of respondent requiring the utmost
trust of petitioner. It bears emphasizing that the right of an employer to dismiss
its employees on the ground of loss of trust and confidence must not be exercised
arbitrarily. For loss of trust and confidence to be a valid ground for dismissal, it
must be substantial and founded on clearly established facts. Loss of confidence
must not be used as a subterfuge for causes which are improper, illegal or
unjustified; it must be genuine, not a mere afterthought, to justify earlier action
taken in bad faith.
MA. LOURDES T. DOMINGO- versus -ROGELIO I. RAYALA
CASE DOCTRINE:
Under the Labor Code, the Chairman of the NLRC shall hold office during good
behavior until he or she reaches the age of sixty-five, unless sooner removed for
cause as provided by law or becomes incapacitated to discharge the duties of
the office.
ISSUE:
1.Whether or not AO 250 covers Rayala
2. Whether or not Rayala should be dismissed from office
HELD:
1. As to the question of whether or not AO 250 covers Rayala is of no real
consequence. The events of this case unmistakably show that the administrative
charges against Rayala were for violation of RA 7877; that the OP properly
assumed jurisdiction over the administrative case; that the participation of the
DOLE, through the Committee created by the Secretary, was limited to initiating
the investigation process, reception of evidence of the parties, preparation of the
investigation report, and recommending the appropriate action to be taken by the
OP. AO 250 had never really been applied to Rayala. If it was used at all, it was
to serve merely as an auxiliary procedural guide to aid the Committee in the
orderly conduct of the investigation.
2. Rayala committed sexual harassment. In this case, it is the President of the
Philippines, as the proper disciplining authority, who would determine whether
there is a valid cause for the removal of Rayala as NLRC Chairman. This power,
however, is qualified by the phrase for cause as provided by law. Thus, when
the President found that Rayala was indeed guilty of disgraceful and immoral
conduct, the Chief Executive did not have unfettered discretion to impose a
penalty other than the penalty provided by law for such offense. The imposable
penalty for the first offense of either the administrative offense of sexual
harassment or for disgraceful and immoral conduct is suspension of six (6)
months and one (1) day to one (1) year. Accordingly, it was error for the Office of
the President to impose upon Rayala the penalty of dismissal from the service, a
penalty which can only be imposed upon commission of a second offense.
Even if the OP properly considered the fact that Rayala took advantage of his
high government position, it still could not validly dismiss him from the service.
Under the Revised Uniform Rules on Administrative Cases in the Civil Service,
taking undue advantage of a subordinate may be considered as an aggravating
circumstance and where only aggravating and no mitigating circumstances are
present, the maximum penalty shall be imposed. Hence, the maximum penalty
that can be imposed on Rayala is suspension for one (1) year.
Rayala holds the exalted position of NLRC Chairman, with the rank equivalent to
a CA Justice. Thus, it is not unavailing that rigid standards of conduct may be
demanded of him. In Talens-Dabon v. Judge Arceo, this Court, in upholding the
liability of therein respondent Judge, said:
The actuations of respondent are aggravated by the fact that complainant is one
of his subordinates over whom he exercises control and supervision, he being
the executive judge. He took advantage of his position and power in order to carry
out his lustful and lascivious desires. Instead of he being in loco parentis over his
subordinate employees, respondent was the one who preyed on them, taking
advantage of his superior position.
16. PHILIPPINE AEOLUS AUTOMOTIVE UNITED CORPORATION and/or
FRANCIS CHUA v. NATIONAL LABOR RELATIONS COMMISSION and
ROSALINDA C. CORTEZ
Bellosillo, J.
Case Doctrine: For misconduct or improper behavior to be a just cause for
dismissal (a) it must be serious; (b) must relate to the performance of the
employees duties; and, (c) must show that the employee has become unfit to
continue working for the employer.
Grounds for termination of services: misconduct, gross negligence;
Stapler/Sexual harassment"
ISSUE: Is petitioner corporation guilty of illegal dismissal of private respondent
Cortez?
RULING: YES, petitioner corporation guilty of illegal dismissal of private
respondent Cortez.
The Supreme Court has ruled that for misconduct or improper behavior to be a
just cause for dismissal (a) it must be serious; (b) must relate to the performance
of the employees duties; and, (c) must show that the employee has become unfit
to continue working for the employer. The act of private respondent in throwing a
stapler and uttering abusive language upon the person of the plant manager may
be considered as a serious misconduct. However, in order to consider it a serious
misconduct that would justify dismissal under the law, it must have been done in
relation to the performance of her duties as would show her to be unfit to continue
working for her employer. The acts complained of, under the circumstances they
were done, did not in any way pertain to her duties as a nurse. Her employment
identification card discloses the nature of her employment as a nurse and no
other. Also, the memorandum informing her that she was being preventively
suspended pending investigation of her case was addressed to her as a nurse.
9
As regards the third alleged infraction, i.e., the act of private respondent in asking
a co-employee to punch-in her time card, although a violation of company rules,
likewise does not constitute serious misconduct. Firstly, it was done by her in
good faith considering that she was asked by an officer to perform a task outside
the office, which was for the benefit of the company, with the consent of the plant
manager. Secondly, it was her first time to commit such infraction during her five
(5)-year service in the company. Finally, the company did not lose anything by
reason thereof as the offense was immediately known and corrected.
On alleged infraction No. 4, the money entrusted to the respondent was in fact
deposited in the respective accounts of the employees concerned, although
belatedly. The mere delay/failure to open an ATM account for nine employees is
not sufficient, by itself, to support a conclusion that Rosalinda is guilty of gross
and habitual neglect of duties. First, petitioner did not show that opening an ATM
is one of her primary duties as company nurse. Second, petitioner failed to show
that Rosalinda intentionally, knowingly, and purposely delayed the opening of
ATM accounts for petitioners employees.
Gross negligence implies a want or absence of or failure to exercise slight care
or diligence, or the entire absence of care. It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them. The negligence, to
warrant removal from service, should not merely be gross but also habitual.
Likewise, the ground "willful breach by the employee of the trust reposed in him
by his employer" must be founded on facts established by the employer who must
clearly and convincingly prove by substantial evidence the facts and incidents
upon which loss of confidence in the employee may fairly be made to rest. All
these requirements prescribed by law and jurisprudence are wanting in the case
at bar.
JERUSALEM VERSUS KEPPEL MONTE BANK,
HOE ENG HOCK, YAP AND PICART
Breach of trust and confidence,
Del Castillo, J.
DOCTRINE:
For breach of trust and confidence to become a valid ground for the dismissal of
an employee, the cause of the loss of trust and confidence must be related to the
performance of the employees duties.
ISSUE:
Whether or not Keppel illegally terminated Jerusalems employment on the
ground of willful breach of trust and confidence.
RULING:
In order to constitute a just cause for dismissal, the act complained of must be
work-related such as would show the employee concerned to be unfit to
continue working for the employer. While it is true that loss of trust and
confidence is one of the just causes for termination, such loss of trust and
confidence must, however, have some basis. Proof beyond reasonable doubt is
not required. It is sufficient that there must only be some basis for such loss of
confidence or that there is reasonable ground to believe, if not to entertain, the
moral conviction that the concerned employee is responsible for the misconduct
and that the nature of his participation therein rendered him absolutely unworthy
of trust and confidence demanded by his position.
The first requisite for dismissal on the ground of loss of trust and confidence is
that the employee concerned must be holding a position of trust and
confidence. In this case, there is no doubt that James held a position of trust and
confidence as Assistant Vice-President of the Jewelry Department.The second
requisite is that there must be an act that would justify the loss of trust and
confidence. Loss of trust and confidence, to be a valid cause for dismissal, must
be based on a willful breach of trust and founded on clearly established
facts. The basis for the dismissal must be clearly and convincingly established
but proof beyond reasonable doubt is not necessary. Keppels evidence against
James fails to meet this standard. His act of forwarding the already accomplished
applications to the VISA Credit Card Unit is proper as he is not in any position to
act on them. It is incumbent upon Marciana, as Unit Head to have performed her
duties. Keppel had gone too far in blaming Jerusalem for the shortcomings and
imprudence of Marciana.
RENO FOODS, INC., and/or VICENTE KHU vs. Nagkakaisang Lakas ng
Manggagawa (NLM) - KATIPUNAN on behalf of its member, NENITA CAPOR
G.R. No. 164016 March 15, 2010 KEYWORD/S: theft of company property;
serious misconduct; separation pay.
DOCTRINE:
Separation pay is only warranted when the cause for termination is not
attributable to the employees fault, such as those provided in Articles 283 and
284 of the Labor Code, as well as in cases of illegal dismissal in which
reinstatement is no longer feasible. It is not allowed when an employee is
dismissed for just cause, such as serious misconduct.
ISSUE:
Whether the NLRC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in granting financial assistance to an employee who was
validly dismissed for theft of company property.
RULING:
Separation pay is only warranted when the cause for termination is not
attributable to the employees fault, such as those provided in Articles 283 and
284 of the Labor Code, as well as in cases of illegal dismissal in which
reinstatement is no longer feasible. It is not allowed when an employee is
dismissed for just cause, such as serious misconduct.
Jurisprudence has classified theft of company property as a serious misconduct
and denied the award of separation pay to the erring employee. We see no
reason why the same should not be similarly applied in the case of Capor. She
attempted to steal the property of her long-time employer. For committing such
misconduct, she is definitely not entitled to an award of separation pay.
It is true that there have been instances when the Court awarded financial
assistance to employees who were terminated for just causes, on grounds of
equity and social justice. The same, however, has been curbed and rationalized
in Philippine Long Distance Telephone Company v. National Labor Relations
Commission. In that case, we recognized the harsh realities faced by employees
that forced them, despite their good intentions, to violate company policies, for
which the employer can rightfully terminate their employment. For these
instances, the award of financial assistance was allowed. But, in clear and
unmistakable language, we also held that the award of financial assistance shall
not be given to validly terminated employees, whose offenses are iniquitous or
reflective of some depravity in their moral character. When the employee
commits an act of dishonesty, depravity, or iniquity, the grant of financial
assistance is misplaced compassion. It is tantamount not only to condoning a
patently illegal or dishonest act, but an endorsement thereof. It will be an insult
to all the laborers who, despite their economic difficulties, strive to maintain good
values and moral conduct.
We are not persuaded by Capors argument that despite the finding of theft, she
should still be granted separation pay in light of her long years of service with
petitioners. Length of service and a previously clean employment record cannot
simply erase the gravity of the betrayal exhibited by a malfeasant employee.
While we sympathize with Capors plight, being of retirement age and having
served petitioners for 39 years, we cannot award any financial assistance in her
favor because it is not only against the law but also a retrogressive public policy.
FE LA ROSA, OFELIA VELEZ, CELY DOMINGO, JONA NATIVIDAD and
EDGAR DE LEON
vs.
AMBASSADOR HOTEL
ISSUE: WON petitioners were illegally dismissed.
RULING: YES. The records fail, however, to show any documentary proof that
the work reduction scheme was adopted due to respondents business reverses.
Respondents memorandum informing petitioners of the adoption of a two-day
work scheme made no mention why such scheme was being adopted. Neither
do the records show any documentary proof that respondent suffered financial
losses to justify its adoption of the said scheme to stabilize its operations.
Respecting the appellate courts ruling that petitioners "simply disappeared" from
their work, hence, they are guilty of abandonment, the same does not lie.
Absence must be accompanied by overt acts unerringly pointing to the fact that
the employee simply does not want to work anymore. And the burden of proof to
show that there was unjustified refusal to go back to work rests on the employer.
Abandonment is a matter of intention and cannot lightly be inferred or legally
presumed from certain equivocal acts. For abandonment to exist, two requisites
must concur: first, the employee must have failed to report for work or must have
been absent without valid or justifiable reason; and second, there must have been
a clear intention on the part of the employee to sever the employer-employee
relationship as manifested by some overt acts. The second element is the more
determinative factor. Abandonment as a just ground for dismissal thus
requires clear, willful, deliberate, and unjustified refusal of the employee to
resume employment. Mere absence or failure to report for work, even after notice
to return, is not tantamount to abandonment.
Under Article 279 of the Labor Code and based on settled jurisprudence, an
employee dismissed without just cause and without due process, like petitioners
herein, are entitled to reinstatement and backwages or payment of separation
pay.
MARIBAGO RESORT VS. DUAL, JULY 20, 2010 | G.R. No. 180660 July
20, 2010
Keyword: Serious Misconduct
ISSUE: Whether or not respondent was illegally dismissed.
HELD: No. Petitioners evidence proved that respondent is guilty of dishonesty
and of stealing money entrusted to him as cashier. Instead of reporting
P10,100.00 as payment by the guests for their dinner, respondent cashier only
reported P3,036.00 as shown by the receipt which he admitted to have issued.
Respondents acts constitute serious misconduct which is a just cause for
termination under the law. Theft committed by an employee is a valid reason for
his dismissal by the employer. Although as a rule this Court leans over backwards
to help workers and employees continue with their employment or to mitigate the
penalties imposed on them, acts of dishonesty in the handling of company
property, petitioners income in this case, are a different matter.
CENTURY CANNING CORP., ET. AL. V. RAMIL, GR NO. 171630, AUGUST 8,
2010
ISSUE:
Whether or not respondent was validly dismissed.
RULING:
Yes.
Petitioner's main allegation is that there are factual and legal grounds constituting
substantial proof that respondent was clearly involved in the forgery of the
CAPEX form. Petitioner insists that the mere existence of a basis for believing
10
that respondent employee has breached the trust and confidence of his employer
suffices for his dismissal. Finally, petitioner maintains that aside from
respondent's involvement in the forgery of the CAPEX form, his past violations of
company rules and regulations are more than sufficient grounds to justify his
termination from employment.
However, the record of the case is bereft of evidence that would clearly establish
Ramil's involvement in the forgery. They did not even submit any affidavit of
witness or present any during the hearing to substantiate their claim against
Ramil.
Respondent alleged in his position paper that after preparing the CAPEX form
on 3 March 1999, he endorsed it to Marivic Villanueva for the signature of the
Executive Vice-President Ricardo T. Po. The next day, respondent received the
CAPEX form containing the signature of Po. Petitioner never controverted these
allegations in the proceedings before the NLRC and the CA despite its
opportunity to do so. Petitioner's belated allegations in its reply filed before this
Court that Marivic Villanueva denied having seen the CAPEX form cannot be
given credit. Points of law, theories, issues and arguments not brought to the
attention of the lower court, administrative agency or quasi-judicial body need not
be considered by a reviewing court, as they cannot be raised for the first time at
that late stage. When a party deliberately adopts a certain theory and the case
is decided upon that theory in the court below, he will not be permitted to change
the same on appeal, because to permit him to do so would be unfair to the
adverse party.
Thus, if respondent retrieved the form on March 4, 1999 with the signature of Po,
it can be correctly inferred that he is not the forger. Had the CAPEX form been
returned to respondent without Po's signature, Villanueva or any officer of the
petitioner's company could have readily noticed the lack of signature, and could
have easily attested that the form was unsigned when it was released to
respondent.
Furthermore, while employers are allowed a wider latitude of discretion in
terminating the services of employees who perform functions which by their
nature require the employers' full trust and confidence and the mere existence of
basis for believing that the employee has breached the trust of the employer is
sufficient, this does not mean that the said basis may be arbitrary and unfounded.
The right of an employer to dismiss an employee on the ground that it has lost its
trust and confidence in him must not be exercised arbitrarily and without just
cause. Loss of trust and confidence, to be a valid cause for dismissal, must be
based on a willful breach of trust and founded on clearly established facts. The
basis for the dismissal must be clearly and convincingly established, but proof
beyond reasonable doubt is not necessary. It must rest on substantial grounds
and not on the employers arbitrariness, whim, caprice or suspicion; otherwise,
the employee would eternally remain at the mercy of the employer.
GREGORIO V. TONGKO, petitioner
vs.
THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and RENATO
A. VERGEL DE DIOS, respondents.
G.R. No. 167622; November 7, 2008
Case Doctrine: When there is no showing of a clear, valid and legal cause for the
termination of employment, the law considers the matter a case of illegal
dismissal and the burden is on the employer to prove that the termination was for
a valid or authorized cause. This burden of proof appropriately lies on the
shoulders of the employer and not on the employee. In other words, an employer
may terminate the services of an employee for just cause and this must be
supported by substantial evidence.
ISSUE: Whether or not petitioner Tongko was illegally dismissed.
RULING: Yes. When there is no showing of a clear, valid and legal cause for the
termination of employment, the law considers the matter a case of illegal
dismissal and the burden is on the employer to prove that the termination was for
a valid or authorized cause. This burden of proof appropriately lies on the
shoulders of the employer and not on the employee. Hence, an employer may
terminate the services of an employee for just cause and this must be supported
by substantial evidence.
In the case at bar, respondent Manulife failed to cite a single iota of evidence to
support its claims. Respondent Manulife did not even point out which order or
rule that petitioner Tongko disobeyed. More importantly, respondent Manulife did
not point out the specific acts that petitioner Tongko was guilty of that would
constitute gross and habitual neglect of duty or disobedience. Respondent
Manulife merely cited petitioner Tongko's alleged "laggard performance," without
substantiating such claim, and equated the same to disobedience and neglect of
duty.
Thus, it must be concluded that petitioner Tongko was illegally dismissed.
SCHOOL OF THE HOLY SPIRIT OF QUEZON CITY and/or SR.CRISPINA A.
TOLENTINO, S.Sp.S. - versus - CORAZON P. TAGUIAM
G.R. No. 165565. July 14, 2008
CASE DOCTRINE:
Under Article 282of the Labor Code, gross and habitual neglect of duties is a
valid ground for an employer to terminate an employee. Gross negligence
implies a want or absence of or a failure to exercise slight care or diligence, or
the entire absence of care. It evinces a thoughtless disregard of consequences
without exerting any effort to avoid them. Habitual neglect implies repeated failure
to perform ones duties for a period of time, depending upon the circumstances.
Issue:
Whether or not respondents dismissal on the ground of gross negligence
resulting to loss of trust and confidence was valid
Held:
Yes. Under Article 282 of the Labor Code, gross and habitual neglect of duties is
a valid ground for an employer to terminate an employee. Gross negligence
implies a want or absence of or a failure to exercise slight care or diligence, or
the entire absence of care. It evinces a thoughtless disregard of consequences
without exerting any effort to avoid them. Habitual neglect implies repeated failure
to perform ones duties for a period of time, depending upon the circumstances.
The SC concluded that respondent had been grossly negligent. First, it is
undisputed that Chiara Maes permit form was unsigned. Yet, respondent allowed
her to join the activity because she assumed that Chiara Maes mother has
allowed her to join it by personally bringing her to the school with her packed
lunch and swimsuit. Second, it was respondents responsibility as Class Adviser
to supervise her class in all activities sanctioned by the school. Thus, she should
have coordinated with the school to ensure that proper safeguards, such as
adequate first aid and sufficient adult personnel, were present during their
activity. She should have been mindful of the fact that with the number of pupils
involved, it would be impossible for her by herself alone to keep an eye on each
one of them.
Notably, respondents negligence, although gross, was not habitual. In view of
the considerable resultant damage, however, the SC agreed that the cause is
sufficient to dismiss respondent. Indeed, the sufficiency of the evidence as well
as the resultant damage to the employer should be considered in the dismissal
of the employee. In this case, the damage went as far as claiming the life of a
child.
JOHN HANCOCK LIFE INSURANCE CORP. VS. JOANNA DAVIS
G.R. NO. 169549; SEPTEMBER 3, 2008
ISSUE:
Whether or not there is a valid cause for termination
HELD:
Yes. Article 282 of the Labor Code provides:
Article 282. Termination by Employer. - An employer may
terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobendience by the
employee of the lawful orders of his employer or his
representatives in connection with his work; xxx
(e) Other causes analogous to the foregoing. Misconduct
involves "the transgression of some established and definite
rule of action, forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in
judgment." For misconduct to be serious and therefore a
valid ground for dismissal, it must be:
1. of grave and aggravated character and not merely trivial or
unimportant
and
2. connected with the work of the employee.
In this case, petitioner dismissed respondent based on the NBI's finding that the
latter stole and used Yuseco's credit cards. But since the theft was not committed
against petitioner itself but against one of its employees, respondent's
misconduct was not work-related and therefore, she could not be dismissed for
serious misconduct.
Nonetheless, Article 282(e) of the Labor Code talks of other analogous
causes or those which are susceptible of comparison to another in general or in
specific detail. For an employee to be validly dismissed for a cause
analogous to those enumerated in Article 282, the cause must involve a
voluntary and/or willful act or omission of the employee. A cause analogous to
serious misconduct is a voluntary and/or willful act or omission attesting to an
employee's moral depravity. Theft committed by an employee against a person
other than his employer, if proven by substantial evidence, is a cause analogous
to serious misconduct. #FERNANDO
Art. 283
SPI TechnologiesInc.v. Mapua
G.R. No. 191154
April 7, 2014
Case Doctrine:
It is not the job title but the actual work that the employee performs. Also, change
in the job title is not synonymous to a change in the functions. A position cannot
be abolished by a mere change of job title. In cases of redundancy, the
management should adduce evidence and prove that a position which was
created in place of a previous one should pertain to functions which are dissimilar
and incongruous to the abolished office.
Issue: Whether or not Mapua was validly separated from service on the ground
of redundancy?
Ruling:
No. ART. 283. Closure of establishment and reduction of personnel. The
employer may also terminate the employment of any employee due to installation
of labor-saving devices, redundancy, retrenchment to prevent losses or the
closing or cessation of operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving
a written notice on the worker and the Department of Labor and Employment at
least one (1) month before the intended date thereof. In case of termination due
to installation of labor-saving devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at least one (1) month pay or
to at least one (1) month pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses
and financial reverses, the separation pay shall be equivalent to one (1) month
pay or at least one-half (1/2) month pay for every year of service, whichever is
higher. A fraction of at least six (6) months shall be considered as one (1) whole
year. (Emphasis ours)
11
Anent the first requirement which is written notice served on both the employee
and the DOLE at least one month prior to the intended date of termination, SPI
had discharged the burden of proving that it submitted a notice to the DOLE on
March 21, 2007, stating therein that the effective date of termination is on April
21, 2007. It is, however, quite peculiar that two kinds of notices were served to
Mapua. One termination letter stated that its date of effectivity is on the same
day, March 21, 2007. The other termination letter sent through mail to Mapuas
residence stated that the effective date of her termination is on April 21, 2007.
Explaining the discrepancy, SPI alleged that the company served a notice to
Mapua on March 21, 2007, which stated that the effective date of termination is
on April 21, 2007. However she refused to acknowledge or accept the letter. Later
on, Mapua requested for a copy of the said letter but due to inadvertence and
oversight, a draft of the termination letter bearing a wrong effectivity date was
given to her. To correct the oversight, a copy of the original letter was sent to her
through mail. Our question is, after Mapua initially refused to accept the letter,
why did SPI make a new letter instead of just giving her the first one which the
Court notes was already signed and witnessed by other employees? Curiously,
there was neither allegation nor proof that the original letter was misplaced or lost
which would necessitate the drafting of a new one. SPI did not even explain in
the second letter that the same was being sent in lieu of the one given to her.
Hence, SPI must shoulder the consequence of causing the confusion brought by
the variations of termination letters given to Mapua.
On the matter of separation pay, there is no question that SPI indeed offered
separation pay to Mapua, but the offer must be accompanied with good faith in
the abolishment of the redundant position and fair and reasonable criteria in
ascertaining the redundant position. It is insignificant that the amount offered to
Mapua is higher than what the law requires because the Court has previously
noted that "a job is more than the salary that it carries. There is a psychological
effect or a stigma in immediately finding ones self laid off from work."
As to the evidence negating redundancy was SPIs publication of job vacancies
after Mapua was terminated from employment. SPI maintained that the CA erred
when it considered Mapuas self-serving affidavit as regards the Prime Manpower
advertisement because the allegations therein were based on Mapuas
unfounded suspicions. Also, the failure of Mapua to present a sworn statement
of Dimatulac renders the formers statements hearsay. Even if we disregard
Mapuas affidavit as regards the Prime Manpower advertisement, SPI admitted
that it caused the Inquirer advertisement for a Marketing Communications
Manager position. Mapua alleged that this advertisement belied the claim of SPI
that her position is redundant because the Corporate Development division was
only renamed to Marketing division. Instead of explaining how the functions of a
Marketing Communications Manager differ from a Corporate Development
Manager, SPI hardly disputed Mapua when it stated that, "judging from the titles
or designation of the positions, it is obvious that the functions of one are entirely
different from that of the other." SPI, being the employer, has possession of
valuable information concerning the functions of the offices within its
organization. Nevertheless, it did not even bother to differentiate the two
positions.
It is not the job title but the actual work that the employee performs. Also,
change in the job title is not synonymous to a change in the functions. A
position cannot be abolished by a mere change of job title. In cases of
redundancy, the management should adduce evidence and prove that a
position which was created in place of a previous one should pertain to
functions which are dissimilar and incongruous to the abolished office.
#GANGAN
PHILIPPINE CARPET MANUFACTURING CORPORATION, ET AL., vs.
IGNACIO B. TAGYAMON, ET AL.
G.R. No. 191475 December 11, 2013
DOCTRINE:
The illegality of the basis of the implementation of both voluntary retirement and
retrenchment programs of petitioners had been thoroughly ruled upon by the
Court in the Philcea case. It discussed the requisites of both retrenchment and
redundancy as authorized causes of termination and that the petitioners failed to
substantiate them.
ISSUE:
Is the dismissal valid?
RULING:
NO. This case and the Philcea case involve the same period which is March to
April 2004; the issuance of Memorandum to employees informing them of the
implementation of the cost reduction program; the implementation of the
voluntary retirement program and retrenchment program, except that this case
involves different employees; the execution of deeds of release, waiver, and
quitclaim, and the acceptance of separation pay by the affected employees.
The illegality of the basis of the implementation of both voluntary retirement and
retrenchment programs of petitioners had been thoroughly ruled upon by the
Court in the Philcea case. It discussed the requisites of both retrenchment and
redundancy as authorized causes of termination and that the petitioners failed to
substantiate them. In ascertaining the bases of the termination of employees, it
took into consideration petitioners claim of business losses; the purchase of
machinery and equipment after the termination, the declaration of cash dividends
to stockholders, the hiring of 100 new employees after the retrenchment, and the
authorization of full blast overtime work for six hours daily. These, said the Court,
are inconsistent with petitioners claim that there was a slump in the demand for
its products which compelled them to implement the termination programs. In
arriving at its conclusions, the Court took note of petitioners net sales, gross and
net profits, as well as net income. The Court, thus, reached the conclusion that
the retrenchment effected by PCMC is invalid due to a substantive defect.
Just like the union members in the Philcea case, respondents Tagyamon, Luna,
Badayos, Dela Cruz, and Comandao received similarly worded memorandum of
dismissal effective April 15, 2004 based on the same ground of slump in the
market demand for the companys products. As such, they are similarly situated
in all aspects as the union members. With respect to respondents Marcos, Nemis
and Ilao, although they applied for voluntary retirement, the same was not
accepted by petitioner. Instead, it issued notice of termination dated March 6,
2004 to these same employees. And while it is true that petitioner paid them
separation pay, the payment was in the nature of separation and not retirement
pay. In other words, payment was made because of the implementation of the
retrenchment program and not because of retirement. As their application for
availing of the companys voluntary retirement program was based on the wrong
premise, the intent to retire was not clearly established, or rather that the
retirement is involuntary. Thus, they shall be considered discharged from
employment. Consequently, they shall be treated as if they are in the same
footing as the other respondents herein and the union members in the Philcea
case.
ADDITIONAL INFO (from the Philcea case which was used by the Court to
decide the above case):
Retrenchment is defined as the termination of employment initiated
by the employer through no fault of the employee and without prejudice to the
latter, resorted by management during periods of business recession, industrial
depression or seasonal fluctuations or during lulls over shortage of materials. It
is a reduction in manpower, a measure utilized by an employer to minimize
business losses incurred in the operation of its business.
Explaining the import of the phrase to prevent losses, this Court held
in Lopez Sugar Corporation v. Federation of Free Workers, thus:
In its ordinary connotation, the phrase to prevent losses means that
retrenchment or termination of the services of some employees is authorized to
be undertaken by the employer sometime before the losses anticipated are
actually sustained or realized. It is not, in other words, the intention of the
lawmaker to compel the employer to stay his hand and keep all his employees
until sometime after losses shall have, in fact, materialized; if such an intent were
expressly written into the law, that law may well be vulnerable to constitutional
attack as taking property from one man to give to another. This is simple enough.
The prerogative of an employer to retrench its employees must be
exercised only as a last resort, considering that it will lead to the loss of the
employees livelihood. It is justified only when all other less drastic means have
been tried and found insufficient or inadequate.[48] Moreover, the employer must
prove the requirements for a valid retrenchment by clear and convincing
evidence; otherwise, said ground for termination would be susceptible to abuse
by scheming employers who might be merely feigning losses or reverses in their
business ventures in order to ease out employees. The requirements are:
xxx (1) that the retrenchment is reasonably necessary and likely to prevent
business losses which, if already incurred, are not merely de minimis, but
substantial, serious, actual and real, or if only expected, are reasonably imminent
as perceived objectively and in good faith by the employer; (2) that the employer
served written notice both to the employees and to the Department of Labor and
Employment at least one month prior to the intended date of retrenchment; (3)
that the employer pays the retrenched employees separation pay equivalent to
one month pay or at least month pay for every year of service, whichever is
higher; (4) that the employer exercises its prerogative to retrench employees in
good faith for the advancement of its interest and not to defeat or circumvent the
employees right to security of tenure; and (5) that the employer used fair and
reasonable criteria in ascertaining who would be dismissed and who would be
retained among the employees, such as status (i.e., whether they are temporary,
casual, regular or managerial employees), efficiency, seniority, physical fitness,
age, and financial hardship for certain workers
SANOH FULTON PHILS., INC. V. BERNARDO
Case doctrine: Closure should be done in good faith, and it rests upon the
employer to prove that it had done so.
Issue: Whether or not the retrenchment was valid.
Held: Using Art. 283, SC stated that retrenchment to prevent losses and
closure not due to serious business losses are two separate authorized causes
for terminating the services of an employee.
For retrenchment, the three (3) basic requirements are: (a) proof that the
retrenchment is necessary to prevent losses or impending losses; (b) service of
written notices to the employees and to the Department of Labor and
Employment at least one (1) month prior to the intended date of retrenchment;
and (c) payment of separation pay equivalent to one (1) month pay, or at least
one-half (1/2) month pay for every year of service, whichever is higher. In
addition, jurisprudence has set the standards for losses which may justify
retrenchment, thus: (1) the losses incurred are substantial and not de minimis;
(2) the losses are actual or reasonably imminent; (3) the retrenchment is
reasonably necessary and is likely to be effective in preventing the expected
losses; and (4) the alleged losses, if already incurred, or the expected imminent
losses sought to be forestalled, are proven by sufficient and convincing evidence.
Upon the other hand, in termination, the law authorizes termination of
employment due to business closure, regardless of the underlying reasons and
motivations therefor, be it financial losses or not. However, to put a stamp to its
validity, the closure/cessation of business must be bona fide, i.e., its purpose is
to advance the interest of the employer and not to defeat or circumvent the rights
of employees under the law or a valid agreement.
In this case, there was no valid retrenchment. Nor was there a closure of
business. The losses must be supported by sufficient and convincing evidence
and the normal method of discharging this is by the submission of financial
statements duly audited by independent external auditors. It was aptly observed
by the appellate court that no financial statements or documents were presented
to substantiate Sanohs claim of loss of P7 million per month.1wphi1And a
business lull caused by lack of orders which could have justified retrenchment
was not shown by petitioner. As observed once more by the Court of Appeals,
petitioner failed to present proof of the extent of the reduced order and its
contribution to the sustainability of its business.
12
On the other hand, respondents refutations of the employers reason for
retrenchment were supported by documentary evidence. Respondents explained
that Matsushita had four (4) outstanding orders of condensers of refrigerators:
Model 17-20, Model 1404, Model 802 and Model 602. It was only in March 2004
that Model 17-20 and Model 1404 were phased out and only in July 2004 that
Model 802 was phased out. However, Model 602 remained and the order of
Matsushita had been increased from 500 to 1600 units monthly from July 2004.
With respect to the Sanyo account, respondent assert that Sanyo had sufficient
stocks for three (3) months which explained why it did not order from Sanyo.
However, beginning February 2004, Sanyo resumed making orders.
Respondents added that despite the cancellation of some orders by Matsushita
and Sanyo, the additional orders made by Concepcion Industries and Uni-
Magma more than compensated the losses incurred on the cancelled orders.
As already stated, the burden of proving that the closure was bona fide, rests
upon the employer. Sanoh made a categorical statement that the Wire
Condenser Department was totally closed. The documentary evidence presented
by respondents, however, negate Sanohs statement. In other words, Sanoh
lacked bona fides even in its assertion that Wire Condenser Department had
closed down. Respondents disclose that this department had gone full blast in its
operations, even with substantial overtime operations immediately after their
dismissal was effected. To substantiate, respondents submitted the time sheets
of the Wire Condenser Department for the months of January up to July
2004 which showed that some of the employees had been rendering overtime
work after retrenchment was effected presumably to compensate the lack of
manpower in that department.
As the Wire Condenser Department is still in operation and no business losses
were proven by Sanoh, the dismissal of respondents was unlawful. Respondents
are awarded backwages from the time of dismissal up to finality of this judgment,
with interest at the rate of six percent (6%) per annum which shall he increased
to twelve percent (12%) after the finality of this judgment and separation pay
equivalent to one-half (1/2) month pay for every year of service.
RUBEN L. ANDRADA vs. NLRC, SUBIC LEGEND RESORTS AND CASINO,
INC
G.R. No. 173231 December 28, 2007
Keywords: Retrenchment, Redundancy, Lay-off
Doctrine: The employer bears the burden of proving the cause or causes for
termination. Its failure to do so would necessarily lead to a judgment of illegal
dismissal.
Issue: Was there a valid cause for dismissal?
Held: There was no valid cause.
As to retrenchment:
Legend glaringly failed to show its financial condition prior to and at the time it
enforced its retrenchment program. It failed to submit audited financial
statements regarding its alleged financial losses. Though Legend complied with
the notice requirements and the payment of separation benefits to the
retrenched employees, its failure to establish the basis for the retrenchment of
its employees constrains us to declare the retrenchment illegal.
As to redundancy:
It is not enough for a company to merely declare that positions have become
redundant. It must produce adequate proof of such redundancy to justify the
dismissal of the affected employees. The following evidence may be proffered
to substantiate redundancy: "the new staffing pattern, feasibility
studies/proposal, on the viability of the newly created positions, job description
and the approval by the management of the restructuring." In another case, it
was held that the company sufficiently established the fact of redundancy
through "affidavits executed by the officers of the respondent PLDT, explaining
the reasons and necessities for the implementation of the redundancy
program."
The pieces of evidence submitted by Legend are mere allegations and
conclusions not supported by other evidence. Legend did not even bother to
illustrate or explain in detail how and why it considered petitioners positions
superfluous or unnecessary.
BONIFACIO ASUFRIN, JR., petitioner, vs. SAN MIGUEL CORPORATION and
the COURT OF APPEALS, respondents.
FACTS:Coca Cola Plant, then a department of respondent San Miguel Beer
Corporation (SMC), hired petitioner as a utility/miscellaneous worker in February
1972. On November 1, 1973, he became a regular employee paid on daily basis
as a Forklift Operator. On November 16, 1981, he became a monthly paid
employee promoted as Stock Clerk.
Sometime in 1984, the sales office and operations at the Sum-ag, Bacolod City
Sales Office were reorganized. Several positions were abolished including
petitioners position as Stock Clerk. After reviewing petitioners qualifications, he
was designated warehouse checker at the Sum-ag Sales Office. On April 1, 1996,
respondent SMC implemented a new marketing system known as the "pre-selling
scheme" at the Sum-ag Beer Sales Office. As a consequence, all positions of
route sales and warehouse personnel were declared redundant.
Thereafter, the employees of Sum-ag sales force were informed that they can
avail of respondents early retirement package pursuant to the retrenchment
program, while those who will not avail of early retirement would be redeployed
or absorbed at the Brewery or other sales offices. Petitioner opted to remain and
manifested to Acting Personnel Manager Salvador Abadesco his willingness to
be assigned to any job, considering that he had three children in college.
Petitioner was surprised when he was informed by the Acting Personnel Manager
that his name was included in the list of employees who availed of the early
retirement package. Petitioners request that he be given an assignment in the
company was ignored by the Acting Personnel Manager.
Petitioner thus filed a complaint for illegal dismissal. The Labor Arbiter dismissed
then complaint. NLRC set aside the LA's decision and ordered reinstatement of
petitioner. CA reversed the ruling of the NLRC.
ISSUE:Whether or not petitioner was terminated validly
HELD:Petitioner's termination is not valid. Petitioner was terminated for
redunduncy which is one of the authorized causes for dismissal. However, it is
not enough for a company to merely declare that it has become overmanned. It
must produce adequate proof that such is the actual situation to justify the
dismissal of the affected employees for redundancy.
The court is not convinced with respondent's proof. First, of the 14 employees
who did not accept the retirement package, only petitioner was not accepted back
to work. The others, who did not even bother to inform the manager, were
redeployed to the Sta. Fe Brewery or other offices or outlets in Bacolod city.
Petitioner was even willing to be demoted just to remain working in the company.
Second, petitioner was in the payroll of the Sta. Fe Brewery and assigned to the
Materials Section, Logistics Department, although he was actually posted at the
Sum-ag Warehouse.15 Thus, even assuming that his position in the Sum-ag
Warehouse became redundant, he should have been returned to the Sta. Fe
Brewery where he was actually assigned and where there were vacant positions
to accommodate him.
Third, it appears that despite respondents allegation that it ceased and closed
down its warehousing operations at the Sum-ag Sales Office, actually it is still
used for warehousing activities and as a transit point where buyers and dealers
get their stocks.
Fourth, in selecting employees to be dismissed, a fair and reasonable criteria
must be used, such as but not limited to (a) less preferred status, e.g. temporary
employee; (b) efficiency; and (c) seniority.17 In the case at bar, no criterion
whatsoever was adopted by respondent in dismissing petitioner.
In a similar case, it was stated:
Even if private respondents were given the option to retire, be retrenched or
dismissed, they were made to understand that they had no choice but to leave
the company. More bluntly stated, they were forced to swallow the bitter pill of
dismissal but afforded a chance to sweeten their separation from employment.
They either had to voluntarily retire, be retrenched with benefits or be dismissed
without receiving any benefit at all.
What was the true nature of petitioners offer to private respondents? It was in
reality a Hobsons choice.21 All that the private respondents were offered was a
choice on the means or method of terminating their services but never as to the
status of their employment. In short, they were never asked if they wanted to work
for petitioner.
In the case at bar, petitioner is similarly situated. It bears stressing that whether
it be by redundancy or retrenchment or any of the other authorized causes, no
employee may be dismissed without observance of the fundamentals of good
faith.
ARTICLE 284
VICENTE SY, TRINIDAD PAULINO, 6BS TRUCKING CORPORATION, and
SBT TRUCKING CORPORATION vs. HON. COURT OF APPEALS and JAIME
SAHOT:
DOCTRINE:
Art. 284. Disease as a ground for termination- An employer may terminate the
services of an employee who has been found to be suffering from any disease
and whose continued employment is prohibited by law or prejudicial to his health
as well as the health of his co-employees.
However, in order to validly terminate employment on this ground, Book VI, Rule
I, Section 8 of the Omnibus Implementing Rules of the Labor Code requires:
Sec. 8. Disease as a ground for dismissal- Where the employee suffers from a
disease and his continued employment is prohibited by law or prejudicial to his
health or to the health of his co-employees, the employer shall not terminate his
employment unless there is a certification by competent public health authority
that the disease is of such nature or at such a stage that it cannot be cured within
a period of six (6) months even with proper medical treatment. If the disease or
13
ailment can be cured within the period, the employer shall not terminate the
employee but shall ask the employee to take a leave. The employer shall
reinstate such employee to his former position
ISSUE: Whether or not there was a valid dismissal of private respondent.
RULING OF THE SC:
NO. It is worthy to note that respondent is engaged in the trucking business where
physical strength is of utmost requirement. Complainant started working with
respondent as truck helper at age twenty-three (23), then as truck driver since
1965. Complainant was already fifty-nine (59) when the complaint was filed and
suffering from various illness triggered by his work and age. In termination cases,
the burden is upon the employer to show by substantial evidence that the
termination was for lawful cause and validly made. Article 277(b) of the Labor
Code puts the burden of proving that the dismissal of an employee was for a valid
or authorized cause on the employer, without distinction whether the employer
admits or does not admit the dismissal. 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.
Article 284 of the Labor Code authorizes an employer to terminate an employee
on the ground of disease, viz:
Art. 284. Disease as a ground for termination- An employer may terminate the
services of an employee who has been found to be suffering from any disease
and whose continued employment is prohibited by law or prejudicial to his health
as well as the health of his co-employees.
However, in order to validly terminate employment on this ground, Book VI, Rule
I, Section 8 of the Omnibus Implementing Rules of the Labor Code requires:
Sec. 8. Disease as a ground for dismissal- Where the employee suffers from a
disease and his continued employment is prohibited by law or prejudicial to his
health or to the health of his co-employees, the employer shall not terminate his
employment unless there is a certification by competent public health authority
that the disease is of such nature or at such a stage that it cannot be cured within
a period of six (6) months even with proper medical treatment. If the disease or
ailment can be cured within the period, the employer shall not terminate the
employee but shall ask the employee to take a leave. The employer shall
reinstate such employee to his former position immediately upon the restoration
of his normal health.
As this Court stated in Triple Eight integrated Services, Inc. vs. NLRC, the
requirement for a medical certificate under Article 284 of the Labor Code cannot
be dispensed with; otherwise, it would sanction the unilateral and arbitrary
determination by the employer of the gravity or extent of the employees illness
and thus defeat the public policy in the protection of labor. In the case at bar, the
employer clearly did not comply with the medical certificate requirement before
Sahots dismissal was effected. In the absence of the required certification by a
competent public health authority, this Court has repeatedly ruled against the
validity of the employees dismissal.
In addition, we must likewise determine if the procedural aspect of due process
had been complied with by the employer. From the records, it clearly appears
that procedural due process was not observed in the separation of private
respondent by the management of the trucking company. The employer is
required to furnish an employee with two written notices before the latter is
dismissed: (1) the notice to apprise the employee of the particular acts or
omissions for which his dismissal is sought, which is the equivalent of a charge;
and (2) the notice informing the employee of his dismissal, to be issued after the
employee has been given reasonable opportunity to answer and to be heard on
his defense. These, the petitioners failed to do, even only for record purposes.
What management did was to threaten the employee with dismissal, then actually
implement the threat when the occasion presented itself because of private
respondents painful left thigh.
All told, both the substantive and procedural aspects of due process were
violated. Clearly, therefore, Sahots dismissal is tainted with invalidity.
#MAQUILING
UNION MOTOR CORPORATION vs. NATIONAL LABOR RELATIONS
COMMISSION and ALEJANDRO A. ETIS
[G.R. No. 159738. December 9, 2004]
ISSUES:
1) Whether or not the ca committed a reversible error in giving much evidentiary
weight to the medical certificates submitted by the private respondent;
2) Whether or not the LA committed a reversible error in ruling that private
respondent was illegally dismissed
RULING:
The contention of the petitioner has no merit.
We note that the company rules do not require that the notice of an employees
absence and the reasons therefor be in writing and for such notice to be given to
any specific office and/or employee of the petitioner. Hence, the notice may be
verbal; it is enough then that an officer or employee of the petitioner, competent
and responsible enough to receive such notice for and in behalf of the petitioner,
was informed of such absence and the corresponding reason.
The evidence on record shows that the respondent informed the petitioner of his
illness through the company nurse. The security guard who was dispatched by
the petitioner to verify the information received by the company nurse, confirmed
the respondents illness. We find and so hold that the respondent complied with
the requisite of giving notice of his illness and the reason for his absences to the
petitioner.
Regrettably, the Labor Arbiter a quo clearly failed to appreciate complainants
pieces of evidence. Nowhere in our jurisprudence requires that all medical
certificates be notarized to be accepted as a valid evidence. In this case, there
is [neither] difficulty nor an obstacle to claim that the medical certificates
presented by complainant are genuine and authentic. Indeed, the physician and
the dentist who examined the complainant, aside from their respective
letterheads, had written their respective license numbers below their names and
signatures. These facts have not been impugned nor rebutted by respondent-
appellee throughout the proceedings of his case. Common sense dictates that
an ordinary worker does not need to have these medical certificates to be
notarized for proper presentation to his company to prove his ailment; hence, the
Labor Arbiter a quo, in cognizance with the liberality and the appreciation on the
rules on evidence, must not negate the acceptance of these medical certificates
as valid pieces of evidence.
Dismissal is the ultimate penalty that can be meted to an employee. Thus, it must
be based on just cause and must be supported by clear and convincing
evidence.[22] To effect a valid dismissal, the law requires not only that there be
just and valid cause for termination; it, likewise, enjoins the employer to afford
the employee the opportunity to be heard and to defend himself.[23] Article 282
of the Labor Code enumerates the just causes for the termination of employment
by the employer:
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.
To warrant removal from service, the negligence should not merely be gross but
also habitual. Gross negligence implies a want or absence of or failure to exercise
slight care or diligence, or the entire absence of care. It evinces a thoughtless
disregard of consequences without exerting any effort to avoid them. The
petitioner has not sufficiently shown that the respondent had willfully disobeyed
the company rules and regulation. The petitioner also failed to prove that the
respondent abandoned his job. The bare fact that the respondent incurred
excusable and unavoidable absences does not amount to an abandonment of
his employment.
The petitioners claim of gross and habitual neglect of duty pales in comparison
to the respondents unblemished record. The respondent did not incur any
intermittent absences. His only recorded absence was the consecutive ten-day
unauthorized absence, albeit due to painful and unbearable toothache. The
petitioners claim that the respondent had manifested poor work attitude was
belied by its own recognition of the respondents dedication to his job as
evidenced by the latters awards: Top Technician of the Year (1995), Member of
the Exclusive P40,000.00 Club, and Model Employee of the Year (1995).
Art. 285
CASE TITLE: ELSA S. MALIG-ON vs. EQUITABLE GENERAL SERVICES, INC.
DOCTRINE: The rule in termination cases is that the employer bears the burden
of proving that he dismissed his employee for a just cause. And, when the
employer claims that the employee resigned from work, the burden is on the
employer to prove that he did so willingly. Whether that is the case would largely
depend on the circumstances surrounding such alleged resignation. Those
circumstances must be consistent with the employees intent to give up work.
ISSUE: Whether or not the CA erred in holding that petitioner Malig-on
abandoned her work and eventually resigned from it rather than that respondent
company constructively dismissed her.
HELD: YES, Malig-on did not abandon but rather was constructively dismissed
by the employer.
According to the company, Malig-on simply dropped out of sight one day on
February 16, 2002 for no reason at all. Eight months later or on October 15, 2002
she appeared at the companys office and tendered her resignation. To the
companys surprise, three days later or on October 18, 2002 she went to the
NLRC office and filed her complaint against the company for illegal dismissal.
Clearly, however, these circumstances do not sound consistent with resignation
freely made.
First, when Malig-on reportedly dropped out of sight and the company had no
idea about the reason for it, the natural and right thing for it to do was investigate
why she had suddenly vanished. Indeed, the company needed to write Malig-on
immediately and ask her to explain in writing why she should not be considered
to have abandoned her job so the company may be cleared of its responsibility
as employer. This did not happen here.
Second, if Malig-on had abandoned her work and had no further interest in it,
there was no reason for her to suddenly show up at her former place of work after
eight months and file her resignation letter. Her action would make sense only if,
as she claimed, she had been on floating status for over six months and the
company promised to give her a new assignment if she would go through the
process of resigning and reapplying.
And, third, that Malig-on went to the NLRC to file a complaint for unjust dismissal
just three days after she filed her alleged resignation letter is inconsistent with
genuine resignation. It would make sense only if, as Malig-on claims, the
company tricked her into filing for resignation upon a promise to give her a new
work assignment and failed to deliver such promise.
The company evidently placed Malig-on on floating status after being relieved as
janitress in a clients workplace. But, as the Court has repeatedly ruled, such act
of off-detailing Malig-on was not the equivalent of dismissal so long as her
floating status did not continue beyond a reasonable time. But, when it ran up to
14
more than six months, the company may be considered to have constructively
dismissed her from work, that is, as of August 16, 2002. Thus, her purported
resignation on October 15, 2002 could not have been legally possible.
The company of course claims that it gave Malig-on notices on August 23, 2002
and September 2, 2002, asking her to explain her failure to report for work and
informing her that the company would treat such failure as lack of interest in it,
respectively. But these notices cannot possibly take the place of the notices
required by law. They came more than six months after the company placed her
on floating status and, consequently, the company gave her those notices after
it had constructively dismissed her from work.
CHIANG KAI SHEK COLLEGE VS TORRES
G.R. No. 189456 April 2, 2014
PEREZ, J.:
DOCTRINE: There is constructive dismissal when there is cessation of work,
because continued employment is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank or a diminution in pay and other
benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but
made to appear as if it were not, constructive dismissal may, likewise, exist if an
act of clear discrimination, insensibility, or disdain by an employer becomes so
unbearable on the part of the employee that it could foreclose any choice by him
except to forego his continued employment.
ISSUE: whether or not the schools act of imposing the penalty of suspension
instead of immediate dismissal from service in exchange for the employees
resignation at the end of the school year, constitutes constructive dismissal
HELD : NO.
Resignation is the voluntary act of an employee who is in a situation where one
believes that personal reasons cannot be sacrificed for the favor of employment,
and opts to leave rather than stay employed. It is a formal pronouncement or
relinquishment of an office, with the intention of relinquishing the office
accompanied by the act of relinquishment. As the intent to relinquish must concur
with the overt act of relinquishment, the acts of the employee before and after the
alleged resignation must be considered in determining whether, he or she, in fact,
intended to sever his or her employment.
Given the indications of voluntary resignation, the Court ruled that there is no
constructive dismissal in this case. There is constructive dismissal when there is
cessation of work, because continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving a demotion in rank or a diminution
in pay and other benefits. Aptly called a dismissal in disguise or an act amounting
to dismissal but made to appear as if it were not, constructive dismissal may,
likewise, exist if an act of clear discrimination, insensibility, or disdain by an
employer becomes so unbearable on the part of the employee that it could
foreclose any choice by him except to forego his continued employment.
There was here no discrimination committed by petitioners. While respondent did
not tender her resignation wholeheartedly, circumstances of her own making did
not give her any other option. With due process, she was found to have
committed the grave offense of leaking test questions. Dismissal from
employment was the justified equivalent penalty. Having realized that, she asked
for, and was granted, not just a deferred imposition of, but also an acceptable
cover for the penalty.
The fact that she waited until the close of the school year to challenge her
impending resignation demonstrate that respondent had bargained for a graceful
exit and is now trying to renege on her obligation. Associate Justice Antonio T.
Carpio accordingly noted that petitioners should not be punished for being
compassionate and granting respondent's request for a lower penalty. Put
differently, respondent should not be rewarded for reneging on her promise to
resign at the end of the school year. Otherwise, employers placed in similar
situations would no longer extend compassion to employees. Compromise
agreements, like that in the instant case, which lean towards desired liberality
that favor labor, would be discouraged. WHEREFORE, premises considered, the
Petition is GRANTED
VICTORINO OPINALDO, Petitioner, v. NARCISA RAVINA, Respondent.
Issue: whether or not the dismissal is valid.
Held:
We disagree, Jurisprudence is replete with cases recognizing the right of the
employer to have free reign and enjoy sufficient discretion to regulate all aspects
of employment, including the prerogative to instill discipline in its employees and
to impose penalties, including dismissal, upon erring employees. This is a
management prerogative where the free will of management to conduct its own
affairs to achieve its purpose takes form. However, the exercise of management
prerogative is not unlimited. Managerial prerogatives are subject to limitations
provided by law, collective bargaining agreements, and general principles of fair
play and justice. Hence, in the exercise of its management prerogative, an
employer must ensure that the policies, rules and regulations on work-related
activities of the employees must always be fair and reasonable and the
corresponding penalties, when prescribed, commensurate to the offense
involved and to the degree of the infraction. In the words of petitioner, he had
been on a floating status42 for three months. Within this period, petitioner did
not have any work assignment from respondent who proffers the excuse that he
has not submitted the required medical certificate. While it is a management
prerogative to require petitioner to submit a medical certificate, we hold that
respondent cannot withhold petitioners employment without observing the
principles of due process and fair play. Abandonment is the deliberate and
unjustified refusal of an employee to resume his employment. To constitute
abandonment of work, two elements must concur: (1) the employee must have
failed to report for work or must have been absent without valid or justifiable
reason; and, (2) there must have been a clear intention on the part of the
employee to sever the employer-employee relationship manifested by some
overt act. None of these elements is present in the case at bar.
5. SKIPPERS UNITED PACIFIC, INC. and SKIPPERS MARITIME SERVICES,
INC., LTD. v. NATHANIEL DOZA, NAPOLEON DE GRACIA, ISIDRO L. LATA,
and CHARLIE APROSTA
G.R. No. 175558 February 8, 2012
Carpio, J.
Case Doctrine: Article 285 of the Labor Code recognizes termination by the
employee of the employment contract by serving written notice on the employer
at least one (1) month in advance. Given that provision, the law contemplates
the requirement of a written notice of resignation. In the absence of a written
resignation, it is safe to presume that the employer terminated the seafarers.
Termination by employee ; No written notice ; Seafarers
ISSUE: Was there a pre-termination by the respondents-workers, De Gracia, et.
al, of their own employment contract?
RULING: NO, there was no termination of employment contract by the
respondents-workers. Article 285 of the Labor Code recognizes termination by
the employee of the employment contract by serving written notice on the
employer at least one (1) month in advance. Given that provision, the law
contemplates the requirement of a written notice of resignation. In the absence
of a written resignation, it is safe to presume that the employer terminated the
seafarers.
In the present case, there was no written notice served by De Gracia, et. al on
Skippers to evidence their alleged resignation. The telex message relied upon by
the Labor Arbiter and NLRC bore conflicting dates giving doubt to the veracity
and authenticity of the document.
Consequently, For a workers dismissal to be considered valid, it must comply
with both procedural and substantive due process. The legality of the manner of
dismissal constitutes procedural due process, while the legality of the act of
dismissal constitutes substantive due process.
Procedural due process in dismissal cases consists of the twin requirements of
notice and hearing. The employer must furnish the employee with two written
notices before the termination of employment can be effected: (1) the first notice
apprises the employee of the particular acts or omissions for which his dismissal
is sought; and (2) the second notice informs the employee of the employers
decision to dismiss him. Before the issuance of the second notice, the
requirement of a hearing must be complied with by giving the worker an
opportunity to be heard. It is not necessary that an actual hearing be conducted.
Substantive due process, on the other hand, requires that dismissal by the
employer be made under a just or authorized cause under Articles 282 to 284 of
the Labor Code.
In this case, there was no written notice furnished to De Gracia, et al. regarding
the cause of their dismissal. Cosmoship furnished a written notice (telex) to
Skippers, the local manning agency, claiming that De Gracia, et al. were
repatriated because the latter voluntarily pre-terminated their contracts. This telex
was given credibility and weight by the Labor Arbiter and NLRC in deciding that
there was pre-termination of the employment contract akin to resignation and
no illegal dismissal. However, as correctly ruled by the CA, the telex message is
a biased and self-serving document that does not satisfy the requirement of
substantial evidence. If, indeed, De Gracia, et al. voluntarily pre-terminated their
contracts, then De Gracia, et al. should have submitted their written resignations.
For these reasons, the dismissal of De Gracia, et al. was illegal.
SHS PERFORATED MATERIALS VERSUS DIAZ
DOCTRINE:
Section 3 (2) Article 13 of the Constitution guarantees the right of all workers to
security of tenure. In using the expression all workers, the Constitution puts no
distinction between a probationary and a permanent or regular employee. This
means that probationary employees cannot be dismissed except for cause or for
failure to qualify as regular employees
FACTS:
ISSUE:
Whether or not Diaz is a probationary employee who voluntarily resigned prior to
the expiration of the probation period
RULING:
What made it impossible, unreasonable, or unlikely for Diaz to continue working
for the company was the unlawful withholding of his salary. There is no sufficient
proof that would warrant the failure of Diaz to be present in the companys
factories. It is significant to note here, that Diaz prepared and served his
resignation letter right after he was informed that his salary was being withheld.
It would be absurd to require Diaz to tolerate the withholding of his salary for a
longer period before his employment can be considered as so impossible,
unreasonable or unlikely as to constitute constructive dismissal. These
circumstances are contrary to voluntary resignation and bolster the finding of
constructive dismissal.
Respondent was constructively dismissed and, therefore, illegally
dismissed. Although respondent was a probationary employee, he was still
entitled to security of tenure. Section 3 (2) Article 13 of the Constitution
guarantees the right of all workers to security of tenure. In using the expression
all workers, the Constitution puts no distinction between a probationary and a
permanent or regular employee. This means that probationary employees cannot
be dismissed except for cause or for failure to qualify as regular employees.
Probationary employees who are unjustly dismissed during the probationary
period are entitled to reinstatement and payment of full backwages and other
benefits and privileges from the time they were dismissed up to their actual
reinstatement. Respondent is, thus, entitled to reinstatement without loss of
seniority rights and other privileges as well as to full backwages, inclusive of
allowances, and other benefits or their monetary equivalent computed from the
time his compensation was withheld up to the time of actual reinstatement.
15

SAN MIGUEL PROPERTIES PHILIPPINES, INC. vs. GWENDELLYN ROSE S.
GUCABAN
G.R. No. 153982 July 18, 2011
DOCTRINE:
Resignation the formal pronouncement or relinquishment of a position or office
is the voluntary act of an employee who is in a situation where he believes that
personal reasons cannot be sacrificed in favor of the exigency of the service, and
he has then no other choice but to disassociate himself from employment. The
intent to relinquish must concur with the overt act of relinquishment; hence, the
acts of the employee before and after the alleged resignation must be considered
in determining whether he in fact intended to terminate his employment.
ISSUE:
Whether Gucaban voluntarily tendered her resignation following the presentation
to her of the possibility of company reorganization and of the resulting abolition
of her office as necessitated by the companys business losses at the time.
RULING:
No. Resignation the formal pronouncement or relinquishment of a position or
office is the voluntary act of an employee who is in a situation where he believes
that personal reasons cannot be sacrificed in favor of the exigency of the service,
and he has then no other choice but to disassociate himself from employment.
The intent to relinquish must concur with the overt act of relinquishment; hence,
the acts of the employee before and after the alleged resignation must be
considered in determining whether he in fact intended to terminate his
employment. In illegal dismissal cases, fundamental is the rule that when an
employer interposes the defense of resignation, on him necessarily rests the
burden to prove that the employee indeed voluntarily resigned. SMPI was unable
to discharge this burden.
It is not difficult to see that, shortly prior to and at the time of Gucabans alleged
resignation, there was actually no genuine corporate restructuring plan in place
as yet. In other words, although the company might have been suffering from
losses due to market decline as alleged, there was still no concrete plan for a
corporate reorganization at the time Gonzalez presented to Gucaban the
seemingly last available alternative options of voluntary resignation and
termination by abolition of her office. Certainly, inasmuch as the necessity of
corporate reorganization generally lies within the exclusive prerogative of
management, Gucaban at that point had no facility to ascertain the truth behind
it, and neither was she in a position to question it right then and there. Indeed,
she could not have chosen to file for resignation had SMPI not broached to her
the possibility of her being terminated from service on account of the supposed
reorganization.
Another argument advanced by SMPI to support its claim that the resignation of
Gucaban was voluntary is that the latter has actually been given ample time to
weigh her options and was, in fact, able to negotiate with management for
improved benefits. Again, this contention is specious as the same is not
supported by the availing records. Indeed, as clarified by Gucaban, the increased
benefits was the result of practice sanctioned and even encouraged by the
mother company in favor of those availing of early retirement and that the
increased basic monthly rate in the computation of the benefits is applied to April
and retroacts to January.
Besides, whether there have been negotiations or not, the irreducible fact
remains that Gucabans separation from the company was the confluence of the
fraudulent representation to her that her office would be declared redundant,
coupled with the subsequent alienation which she suffered from the company by
reason of her refusal to tender resignation. The element of voluntariness in her
resignation is, therefore, missing. She had been constructively and, hence,
illegally dismissed as indeed her continued employment is rendered impossible,
unreasonable or unlikely under the circumstances.
BMG RECORDS (PHILS.), INC. and JOSE YAP, JR.
vs.
AIDA C. APARECIO and NATIONAL LABOR RELATIONS COMMISSION
ISSUE:
WON respondents resignation was valid and no vitiation of consent took place.
RULING:
YES. Reading through the records would ineluctably reveal that the evidence
upon which both the NLRC and the CA based their conclusion rests on rather
shaky foundation. After careful analysis, this Court finds and so holds that the
submissions of Aparecio in all her pleadings failed to substantiate the allegation
that her consent was vitiated at the time she tendered her resignation and that
petitioners are guilty of illegal dismissal.
The Court agrees with petitioners' contention that the circumstances surrounding
Aparecio's resignation should be given due weight in determining whether she
had intended to resign. In this case, such intent is very evident:
First, Aparecio already communicated to other people that she was about to
resign to look for a better paying job since she had been complaining that
employees like her in other companies were earning much more;
Second, prior to the submission of her resignation letter, Aparecio and two other
promo girls, Soco and Mutya, approached their supervisor, intimated their desire
to resign, and requested that they be given financial assistance, which petitioners
granted on the condition that deductions would be made in case of shortage after
inventory;
Third, Aparecio, Soco, and Mutya submitted their duly signed resignation letters,
which were accepted by petitioners; and
Fourth, Aparecio already initiated the processing of her clearance; thus, she was
able to receive her last salary, 13thmonth pay, and tax refund but refused to
receive the financial assistance less the deductions made.
Art. 286
SKM ART CRAFT CORP. v EFREN BAUCA, ET AL.
GR 171282 | NOV 27 2013
ISSUE: Whether respondents were illegally dismissed.
HELD: While we agree with the NLRC that the suspension of petitioners
operation is valid, the Labor Arbiter and the CA are correct that respondents were
illegally dismissed since they were not recalled after six months, after the bona
fide suspension of petitioners operations.
We agree with the Labor Arbiter and the CA that respondents were already
considered illegally dismissed since petitioner failed to recall them after six
months, when its bona fide suspension of operations lapsed. We stress that
under Article 286 of the Labor Code, the employment will not be deemed
terminated if the bona fide suspension of operations does not exceed six months.
But if the suspension of operations exceeds six months, the employment will be
considered terminated.
Under Article 286 of the Labor Code, the bona fide suspension of the operation
of a business or undertaking for a period not exceeding six months shall not
terminate employment. Consequently, when the bona fide suspension of the
operation of a business or undertaking exceeds six months, then the employment
of the employee shall be deemed terminated. By the same token and applying
said rule by analogy, if the employee was forced to remain without work or
assignment for a period exceeding six months, then he is in effect constructively
dismissed.
Indeed, petitioners manifestation dated October 2, 2001 that it is willing to admit
respondents if they return to work was belatedly made, almost one year after
petitioners suspension of operations expired in November 2000. We find that
petitioner no longer recalled, nor wanted to recall, respondents after six months.
HENCE, THE RESPONDENTS WERE ILLEGALLY DISMISSED.
(This case was submitted for settlement. Wherein respondents herein signed a
Release, Waiver and Quitclaim; the court upheld the settlement. But for the
purpose of determining whether there was illegal dismissal in the case at bar,
mention the ruling above. )
EMERITUS SECURITY AND MAINTENANCE SYSTEMS, INC., Petitioner, vs.
JANRIE C. DAILIG, Respondent.
Issues (1) whether respondent was illegally dismissed by respondent
(2) if he was, whether respondent is entitled to separation pay, instead of
reinstatement.
The Ruling of the Court
The Court affirms the finding of illegal dismissal of the Labor Arbiter, NLRC, and
Court of Appeals. However, the Court sets aside the Court of Appeals award of
separation pay in favor of respondent, and reinstates the Labor Arbiters
reinstatement order.
On whether respondent was illegally dismissed
Petitioner admits relieving respondent from his post as security guard on 10
December 2005. There is also no dispute that respondent remained on floating
status at the time he filed his complaint for illegal dismissal on 16 June 2006. In
other words, respondent was on floating status from 10 December 2005 to 16
June 2006 or more than six months. Petitioners allegation of sending respondent
a notice sometime in January 2006, requiring him to report for work, is
unsubstantiated, and thus, self-serving.
The Court agrees with the ruling of the Labor Arbiter, NLRC and Court of Appeals
that a floating status of a security guard, such as respondent, for more than six
months constitutes constructive dismissal.
The failure of petitioner to give respondent a work assignment beyond the
reasonable six-month period makes it liable for constructive dismissal. x x x.9
Further, the Court notes that the Labor Arbiter, NLRC, and Court of Appeals
unanimously found that respondent was illegally dismissed by petitioner. Factual
findings of quasi-judicial bodies like the NLRC, if supported by substantial
evidence, are accorded respect and even finality by this Court, more so when
they coincide with those of the Labor Arbiter.10
On whether respondent is entitled to separation pay
Article 279 of the Labor Code of the Philippines mandates the reinstatement of
an illegally dismissed employee, to wit:
Security of Tenure. - x x x An employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges
and to his full back wages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
Thus, reinstatement is the general rule, while the award of separation pay is the
exception. The circumstances warranting the grant of separation pay, in lieu of
reinstatement, are laid down by the Court in Globe-Mackay Cable and Radio
Corporation v. National Labor Relations Commission,12 thus:
Over time, the following reasons have been advanced by the Court for denying
16
reinstatement under the facts of the case and the law applicable thereto; that
reinstatement can no longer be effected in view of the long passage of time (22
years of litigation) or because of the realities of the situation; or that it would be
inimical to the employers interest; or that reinstatement may no longer be
feasible; or, that it will not serve the best interests of the parties involved; or that
the company would be prejudiced by the workers continued employment; or that
it will not serve any prudent purpose as when supervening facts have transpired
which make execution on that score unjust or inequitable or, to an increasing
extent, due to the resultant atmosphere of antipathy and antagonism or strained
relations or irretrievable estrangement between the employer and the
employee.
In this case, petitioner claims that it complied with the reinstatement order of the
Labor Arbiter.1wphi1 On 23 January 2008, petitioner sent respondent a notice
informing him of the Labor Arbiters decision to reinstate him. Accordingly, in
February 2008, respondent was assigned by petitioner to Canlubang Sugar
Estate, Inc. in Canlubang, Laguna, and to various posts thereafter. At the time of
the filing of the petition, respondent was assigned by petitioner to MD Distripark
Manila, Inc. in Bian, Laguna.
Respondent admits receiving a reinstatement notice from petitioner. Thereafter,
respondent was assigned to one of petitioner's clients. However, respondent
points out that he was not reinstated by petitioner Emeritus Security and
Maintenance Systems, Inc. but was employed by another company, Emme
Security and Maintenance Systems, Inc. (Emme). Thus, according to
respondent, he was not reinstated at all.
Petitioner counters that Emeritus and Emme are sister companies with the same
Board of Directors and officers, arguing that Emeritus and Emme are in effect
one and the same corporation.
Considering petitioner's undisputed claim that Emeritus and Emme are one and
the same, there is no basis in respondent's allegation that he was not reinstated
to his previous employment. Besides, respondent assails the corporate
personalities of Emeritus and Emme only in his Comment filed before this Court.
Further, respondent did not appeal the Labor Arbiter's reinstatement order.
Contrary to the Court of Appeals' ruling, there is nothing in the records showing
any strained relations between the parties to warrant the award of separation
pay. There is neither allegation nor proof that such animosity existed between
petitioner and respondent. In fact, petitioner complied with the Labor Arbiter's
reinstatement order.
Considering that (1) petitioner reinstated respondent in compliance with the
Labor Arbiter's decision, and (2) there is no ground, particularly strained relations
between the parties, to justify the grant of separation pay, the Court of Appeals
erred in ordering the payment thereof, in lieu of reinstatement.
NIPPON HOUSING PHIL. INC., and/or TADASHI OTA, HOROSHI TAKADA,
YUSUHIRO KAWATA, MR. NOBOYUSHI and JOEL REYES vs. MAIAH
ANGELA LEYNES
Case Doctrines:
Art. 286. When employment not deemed terminated. The bona fide
suspension of the operation of a business undertaking for a period not
exceeding six (6) months, or the fulfillment by the employee of a civic duty shall
not terminate employment. In all such cases the employer shall reinstate the
employee to his former position without loss of seniority rights if he indicates his
desire to resume his work not later than one (1) month from the resumption of
operations of his employer or from his relief from the military or civic duty.
The rule is settled that "off-detailing" is not equivalent to dismissal, so long as
such status does not continue beyond a reasonable time and that it is only
when such a "floating status" lasts for more than six months that the employee
may be considered to have been constructively dismissed. A complaint for
illegal dismissal filed prior to the lapse of said six-month and/or the actual
dismissal of the employee is generally considered as prematurely filed.
ISSUES: Whether or not petitioners' decision to place respondent Leynes on
floating status is tantamount to constructive dismissal.
RULING: No. Article 286 of the Labor Code (When employment not deemed
terminated) states that the bona fide suspension of the operation of a business
undertaking for a period not exceeding six (6) months, or the fulfillment by the
employee of a civic duty shall not terminate employment. In all such cases the
employer shall reinstate the employee to his former position without loss of
seniority rights if he indicates his desire to resume his work not later than one
(1) month from the resumption of operations of his employer or from his relief
from the military or civic duty.
Futhermore, the rule is settled that "off-detailing" is not equivalent to dismissal,
so long as such status does not continue beyond a reasonable time and that it
is only when such a "floating status" lasts for more than six months that the
employee may be considered to have been constructively dismissed. A
complaint for illegal dismissal filed prior to the lapse of said six-month and/or
the actual dismissal of the employee is generally considered as prematurely
filed.
In the case at bar, in view of the sensitive nature of respondent Leynes position
and the critical stage of the Projects business development, petitioner NHPI
was constrained to relay the situation to BGCC which, in turn, requested the
immediate adoption of remedial measures from Takada, including the
appointment of a new Property Manager for the Project. Upon BGCCs
recommendation, petitioner NHPI consequently hired Engr. Jose as respondent
Leynes replacement. Far from being the indication of bad faith the CA
construed the same to be, these factual antecedents suggest that petitioner
NHPIs immediate hiring of Engr. Jose as the new Property Manager for the
Project was brought about by respondent Leynes own rash announcement of
her intention to resign from her position. Although she subsequently changed
her mind and sent Reyes a letter announcing the reconsideration of her planned
resignation and her intention to return to work, respondent Leynes evidently had
only herself to blame for precipitately setting in motion the events which led to
petitioner NHPIs hiring of her own replacement.
The record, moreover, shows that petitioner NHPI simply placed respondent
Leynes on floating status "until such time that another project could be secured"
for her. Traditionally invoked by security agencies when guards are temporarily
sidelined from duty while waiting to be transferred or assigned to a new post or
client, Article 286 of the Labor Code has been applied to other industries when,
as a consequence of the bona fide suspension of the operation of a business or
undertaking, an employer is constrained to put employees on floating status for
a period not exceeding six months. In brushing aside petitioner NHPI's reliance
on said provision to justify the act of putting respondent Leynes on floating
status, the CA ruled that no evidence was adduced to show that there was a
bona fide suspension of petitioner NHPIs business. What said court clearly
overlooked, however, is the fact that petitioner NHPI had belatedly ventured into
building management and, with BGCC as its only client in said undertaking, had
no other Property Manager position available to respondent Leynes.
Finally, the record shows that respondent Leynes filed the complaint for actual
illegal dismissal from which the case originated on 22 February 2002 or
immediately upon being placed on floating status as a consequence of
petitioner NHPIs hiring of a new Property Manager for the Project. Thus, there
was no constructive dismissal and that her complaint was prematurely filed.
MAYON HOTEL & RESTAURANT, PACITA O. PO and/or JOSEFA PO LAM vs.
ROLANDO ADANA, CHONA BUMALAY, ROGER BURCE, EDUARDO
ALAMARES, AMADO ALAMARES, EDGARDO TORREFRANCA, LOURDES
CAMIGLA, TEODORO LAURENARIA, WENEFREDO LOVERES, LUIS
GUADES, AMADO MACANDOG, PATERNO LLARENA, GREGORIO NICERIO,
JOSE ATRACTIVO, MIGUEL TORREFRANCA, and SANTOS BROOLA
G.R. No. 157634. May 16, 2005
CASE DOCTRINE:
In termination disputes, the burden of proof is always on the employer to prove
that the dismissal was for a just or authorized cause. Where there is no showing
of a clear, valid and legal cause for termination of employment, the law considers
the case a matter of illegal dismissal. If doubts exist between the evidence
presented by the employer and the employee, the scales of justice must be tilted
in favor of the latter the employer must affirmatively show rationally adequate
evidence that the dismissal was for a justifiable cause.
ISSUES:
1. Whether or not respondents were illegally dismissed by petitioner;
2. Whether or not respondents are entitled to their money claims due to
underpayment of wages, and nonpayment of holiday pay, rest day premium,
SILP, COLA, overtime pay, and night shift differential pay.
HELD:
1. Illegal Dismissal: claim for separation pay
Since April 1997 until the time the Labor Arbiter rendered its decision in July
2000, or more than three (3) years after the supposed temporary lay-off, the
employment of all the respondents with petitioner had ceased, notwithstanding
that the new premises had been completed and the same resumed its
operation. This is clearly dismissal or the permanent severance or complete
separation of the worker from the service on the initiative of the employer
regardless of the reasons therefor.
Article 286 of the Labor Code is clear there is termination of
employment when an otherwise bona fide suspension of work
exceeds six (6) months. The cessation of employment for more than
six months was patent and the employer has the burden of proving
that the termination was for a just or authorized cause.
While we recognize the right of the employer to terminate the services of an
employee for a just or authorized cause, the dismissal of employees must be
made within the parameters of law and pursuant to the tenets of fair play. And in
termination disputes, the burden of proof is always on the employer to prove that
the dismissal was for a just or authorized cause. Where there is no showing of a
clear, valid and legal cause for termination of employment, the law considers the
case a matter of illegal dismissal.
If doubts exist between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter the employer
must affirmatively show rationally adequate evidence that the dismissal was for
a justifiable cause. It is a time-honored rule that in controversies between a
laborer and his master, doubts reasonably arising from the evidence, or in the
interpretation of agreements and writing should be resolved in the formers favor.
The policy is to extend the doctrine to a greater number of employees who can
avail of the benefits under the law, which is in consonance with the avowed policy
of the State to give maximum aid and protection of labor.
2. Money claims
The Supreme Court reinstated the award of monetary claims granted by the
Labor Arbiter.
The cost of meals and snacks purportedly provided to respondents cannot be
deducted as part of respondents minimum wage. As stated in the Labor Arbiters
decision.
Even granting that meals and snacks were provided and indeed constituted
facilities, such facilities could not be deducted without compliance with certain
legal requirements. As stated in Mabeza v. NLRC, the employer simply cannot
deduct the value from the employees wages without satisfying the following: (a)
proof that such facilities are customarily furnished by the trade; (b) the provision
of deductible facilities is voluntarily accepted in writing by the employee; and (c)
the facilities are charged at fair and reasonable value. The law is clear that mere
availment is not sufficient to allow deductions from employees wages.
As for petitioners repeated invocation of serious business losses, suffice to say
that this is not a defense to payment of labor standard benefits. The employer
cannot exempt himself from liability to pay minimum wages because of poor
financial condition of the company. The payment of minimum wages is not
dependent on the employers ability to pay. #DIOLA
17

Art. 287
CASE TITLE : RODOLFO J. SERRANO (vs) SEVERINO SANTOS
TRANSIT and/or SEVERINO SANTOS
KEYWORD/S : optional retirement with quitclaim ; retirement pay under
protest
DOCTRINE : Under P.D. 851 or the SIL Law, the exclusion from its
coverage of workers who are paid on a purely commission basis is only with
respect to field personnel.
ISSUE: Whether or not the 22.5 days pay per year of service is the correct
formula in arriving at the complete retirement pay of complainant
RULING: Republic Act No. 7641 amended Article 287 of the Labor Code by
providing for retirement pay to qualified private sector employees in the absence
of any retirement plan in the establishment. Admittedly, petitioner worked for 14
years for the bus company which did not adopt any retirement scheme. Even if
petitioner as bus conductor was paid on commission basis then, he falls within
the coverage of R.A. 7641 and its implementing rules. As thus correctly ruled by
the Labor Arbiter, petitioners retirement pay should include the cash equivalent
of the 5-day SIL and 1/12 of the 13th month pay.
For purposes of applying the law on SIL, as well as on retirement, the Court notes
that there is a difference between drivers paid under the boundary system and
conductors who are paid on commission basis. In practice, taxi drivers do not
receive fixed wages. They retain only those sums in excess of the boundary or
fee they pay to the owners or operators of the vehicles. Conductors, on the other
hand, are paid a certain percentage of the bus earnings for the day. Under P.D.
851 or the SIL Law, the exclusion from its coverage of workers who are paid on
a purely commission basis is only with respect to field personnel.
The petition is granted and the CA decision and resolution are reversed
and set aside. The Labor Arbiters decision is reinstated.
[RETIREMENT BENEFITS]
JEROME M. DAABAY, Petitioner, v. COCA-COLA BOTTLERS PHILS., INC.,
Respondent.
DOCTRINE: Art. 287 (retirement); Being intended as a mere measure of equity
and social justice, the NLRCs award was then akin to a financial assistance or
separation pay that is granted to a dismissed employee notwithstanding the
legality of his dismissal. A contrary rule would, as the petitioner correctly argues,
have the effect, of rewarding rather than punishing the erring employee for his
offense. And we do not agree that the punishment is his dismissal only and that
the separation pay has nothing to do with the wrong he has committed. Of course
it has.
ISSUE: Whether or not Daabay is entitled to retirement benefits.
HELD: No. We emphasize that the appeal to the CA was brought not by Daabay
but by Coca-Cola, and was limited to the issue of whether or not the award of
retirement benefits in favor of Daabay was proper. A party who has not appealed
from a decision may not obtain any affirmative relief from the appellate court other
than what he had obtained from the lower court, if any, whose decision is brought
up on appeal. Considering that Daabay had not yet appealed from the NLRCs
Resolution to the CA, his plea for the modification of the NLRCs findings was
then misplaced. For the Court to review all matters that are raised in the petition
would be tolerant of what Daabay was barred to do before the appellate court.
Daabay was declared by the NLRC to have been lawfully dismissed by Coca-
Cola on the grounds of serious misconduct, breach of trust and loss of
confidence. Our pronouncement in Philippine Airlines, Inc. v. NLRC on the issue
of whether an employee who is dismissed for just cause may still claim retirement
benefits equally applies to this case. We held:
At the risk of stating the obvious, private respondent was not separated from
petitioners employ due to mandatory or optional retirement but, rather, by
termination of employment for a just cause. Thus, any retirement pay provided
by PALs Special Retirement & Separation Program dated February 15, 1988
or, in the absence or legal inadequacy thereof, by Article 287 of the Labor Code
does not operate nor can be made to operate for the benefit of private
respondent. Even private respondents assertion that, at the time of her lawful
dismissal, she was already qualified for retirement does not aid her case because
the fact remains that private respondent was already terminated for cause
thereby rendering nugatory any entitlement to mandatory or optional retirement
pay that she might have previously possessed.
In ruling against the grant of the retirement benefits, we also take note of the
NLRCs lone justification for the award. Being intended as a mere measure of
equity and social justice, the NLRCs award was then akin to a financial
assistance or separation pay that is granted to a dismissed employee
notwithstanding the legality of his dismissal. Jurisprudence on such financial
assistance and separation pay then equally apply to this case.
A contrary rule would, as the petitioner correctly argues, have the effect, of
rewarding rather than punishing the erring employee for his offense. And we do
not agree that the punishment is his dismissal only and that the separation pay
has nothing to do with the wrong he has committed. Of course it has. Indeed, if
the employee who steals from the company is granted separation pay even as
he is validly dismissed, it is not unlikely that he will commit a similar offense in
his next employment because he thinks he can expect a like leniency if he is
again found out. This kind of misplaced compassion is not going to do labor in
general any good as it will encourage the infiltration of its ranks by those who do
not deserve the protection and concern of the Constitution.
Clearly, considering that Daabay was dismissed on the grounds of serious
misconduct, breach of trust and loss of confidence, the award based on equity
was unwarranted.
Although retirement benefits, where not mandated by law, may still be granted
by agreement of the employees and their employer or as a voluntary act of the
employer, there is no proof that any of these incidents attends the instant case.
Pinero v NLRC
Case Doctrine: An employee who is dismissed for cause is generally not entitled
to any financial assistance. Equity considerations, however, provide an exception
Facts:Private respondent Dumaguete Cathedral College, Inc., an educational
institution, is the employer of the faculty and staff members comprising the labor
union Dumaguete Cathedral College Faculty and Staff Association-National
Federation of Teachers and Employees Union DUCACOFSA-NAFTEU. On
December 19, 1986, DUCACOFSA (then affiliated with the National Alliance of
Teachers and Allied Workers NATAW) and private respondent entered into a
Collective Bargaining Agreement (CBA) effective for 3 years. Upon the
expiration of their CBA in 1989, the parties failed to conclude another CBA which
led DUCACOFSA (now affiliated with NAFTEU) to file a notice of strike with the
Department of Labor and Employment (DOLE) on the ground of refusal to
bargain.
On November 4, 1991, DUCACOFSA-NAFTEU conducted a strike in the
premises of private respondent without submitting to the DOLE the required
results of the strike vote obtained from the members of the union. Consequently,
on November 21, 1991, private respondent filed with the DOLE a complaint to
declare the strike illegal and to dismiss the some officers of DUCACOFSA-
NAFTEU, including the petitioner. On December 19, 1995, the NLRC affirmed
the decision of the Labor Arbiter, declaring the strike illegal. In addition to the
failure to comply with strike vote requirements, the NLRC ratiocinated that the
strike was illegal because DUCACOFSA-NAFTEU, not being a legitimate labor
organization, has no personality to hold a strike. The union officers filed a Motion
for Reconsideration but the same was denied. CA affirmed the decision of NLRC.
Petitioner Rosendo U. Piero filed with this Court a petition for certiorari.
Issue: Whether or not petitioner should be dismissed on the ground of illegal
strike and not entitled to retirement benefits?
Ruling: Under the aforequoted provisions, the requisites for a valid strike are as
follows: (a) a notice of strike filed with the DOLE thirty days before the intended
date thereof or fifteen days in case of unfair labor practice; (b) strike vote
approved by a majority of the total union membership in the bargaining unit
concerned obtained by secret ballot in a meeting called for that purpose; (c)
notice given to the DOLE of the results of the voting at least seven days before
the intended strike. These requirements are mandatory and failure of a union to
comply therewith renders the strike illegal.
Pursuant to Article 264 of the Labor Code, any union officer who knowingly
participates in an illegal strike and any worker or union officer who knowingly
participates in the commission of illegal acts during a strike may be declared to
have lost his employment status. In the case at bar, DUCACOFSA-NAFTEU
failed to prove that it obtained the required strike-vote among its members and
that the results thereof were submitted to the DOLE. The strike was therefore
correctly declared illegal, for non-compliance with the procedural requirements of
Article 263 of the Labor Code, and Piero properly dismissed from service.
The Court notes that petitioner Piero turned 60 years old and retired on March
1, 1996 after 29 years of service, rendering his dismissal from service moot and
academic. However, in view of the propriety of his termination as a consequence
of the illegal strike, he is no longer entitled to payment of retirement benefits
because he lost his employment status effective as of the date of the decision of
the Labor Arbiter October 28, 1994. An employee who is dismissed for cause
is generally not entitled to any financial assistance. Equity considerations,
however, provide an exception. Equity has been defined as justice outside law,
being ethical rather than jural and belonging to the sphere of morals than of law.
It is grounded on the precepts of conscience and not on any sanction of positive
law, for equity finds no room for application where there is law.
Although meriting termination of employment, Pieros infraction is not so
reprehensible nor unscrupulous as to warrant complete disregard of his long
years of service. Moreover, he has no previous derogatory records. Weighed
on the scales of justice, conscience and reason tip in favor of granting financial
assistance to support him in the twilight of his life after long years of service.
Under the circumstances, social and compassionate justice dictate that petitioner
Piero be awarded financial assistance equivalent to one-half (1/2) months pay
for every year of service computed from his date of employment up to October
28, 1994 when he was declared to have lost his employment status. Indeed,
equities of this case should be accorded due weight because labor law
determinations are not only secundum rationem but also secundum caritatem.
G.R. No. 144483 November 19, 2003
STA. CATALINA COLLEGE and SR. LORETA ORANZA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and HILARIA G. TERCERO,
respondents.
DOCTRINE:
Dismissals; Abandonment; Elements for a valid finding of abandonment.For a
valid finding of abandonment, two factors must be present: (1) the failure to report
for work, or absence without valid or justifiable reason; and (2) a clear intention
to sever employer-employee relationship, with the second element as the more
determinative factor, being manifested by some overt acts.
To prove abandonment, the employer must show that the employee deliberately
and unjustifiably refused to resume his employment without any intention of
returning.To prove abandonment, the employer must show that the employee
deliberately and unjustifiably refused to resume his employment without any
intention of returning. There must be a concurrence of the intention to abandon
and some overt acts from which an employee may be deduced as having no
more intention to work. The law, however, does not enumerate what specific overt
acts can be considered as strong evidence of the intention to sever the employee-
employer relationship.
Abandonment of work being a just cause for termination, petitioner was under no
obligation to serve written notice to respondent.Abandonment of work being a
just cause for terminating the services of Hilaria, petitioner school was under no
obligation to serve a written notice to her.
Separation Pay; An employee who is terminated for just cause is generally not
entitled to separation pay.It was error too for the CA to conclude that since
petitioner school did not award separation pay and Hilarias share of her
18
retirement contributions when she temporarily stopped working after she left her
teaching position in 1971, employer-employee relation between them was not
severed. It bears noting that an employee who is terminated for just cause is
generally not entitled to separation pay. Moreover, the PERAA, petitioner
schools substitute retirement plan, was only established in 1972, such that when
Hilaria abandoned her work in 1971, there were no retirement contributions to
speak of.
Retirement Benefits; Gratuity pay is separate and distinct from retirement
benefits; It is paid purely out of generosity.As for the ruling of the CA affirming
that of the NLRC that the P12,000.00 gratuity pay earlier awarded to Hilaria
should not be deducted from the retirement benefits due her, the same is in order.
Gratuity pay is separate and distinct from retirement benefits. It is paid purely out
of generosity. So Republic Planters Bank v. NLRC holds: Gratuity pay x x x is
paid to the beneficiary for the past services or favor rendered purely out of the
generosity of the giver or grantor. Gratuity, therefore, is not intended to pay a
worker for actual services rendered or for actual performance. It is a money
benefit or bounty given to the worker, the purpose of which is to reward
employees who have rendered satisfactory service to the company.
Retirement benefits are a form of reward for employees loyalty to the
employer.Retirement benefits, on the other hand, are intended to help the
employee enjoy the remaining years of his life, releasing him from the burden of
worrying for his financial support, and are a form of reward for his loyalty to the
employer.
ISSUE:Whether Hilarias services for petitioner school during the period from
1955 to 1970 should be factored in the computation of her retirement benefits
HELD: No.
ABANDONMENT OF WORK
For a valid finding of abandonment, two factors must be present: (1) the failure
to report for work, or absence without valid or justifiable reason; and (2) a clear
intention to sever employer-employee relationship, with the second element as
the more determinative factor, being manifested by some overt acts.
It is not disputed that the approved one year leave of absence without pay of
Hilaria expired in 1971, without her, it bears repeating, requesting for extension
thereof or notifying petitioner school if and when she would resume teaching. Nor
is it disputed that she was rehired only in 1982 after filing anew an application,
without her proffering any explanation for her more than a decade of absence.
Under the circumstances, abandonment of work at petitioner school in 1971 is
indubitably manifest.
Abandonment of work being a just cause for terminating the services of Hilaria,
petitioner school was under no obligation to serve a written notice to her. That
Hilaria was in 1997 given a plaque of appreciation for thirty years of service to
the school and awardedP12,000.00 as gratuity pay should not be taken against
petitioners, for acknowledgment of the total number of years of her service, which
was discontinuous, should not obliterate the fact that she abandoned her
employment in 1971, albeit she was rehired in 1982.
GRATUITY PAY
As for the ruling of the CA affirming that of the NLRC that the P12,000.00 gratuity
pay earlier awarded to Hilaria should not be deducted from the retirement benefits
due her, the same is in order. Gratuity pay is separate and distinct from retirement
benefits. It is paid purely out of generosity.
Gratuity pay x x x is paid to the beneficiary for the past services or favor rendered
purely out of the generosity of the giver or grantor. Gratuity, therefore, is not
intended to pay a worker for actual services rendered or for actual performance.
It is a money benefit or bounty given to the worker, the purpose of which is to
reward employees who have rendered satisfactory service to the company.
Retirement benefits, on the other hand, are intended to help the employee enjoy
the remaining years of his life, releasing him from the burden of worrying for his
financial support, and are a form of reward for his loyalty to the employer.
COMPUTATION OF RETIREMENT (Art 287)
Hence, Hilaria is entitled to receive P98,706.45 computed as follows:
One-half month salary = (15 days x latest salary per day) + (5 days leave x latest
salary per day) + (1/12 of 13th month pay)
= P4,512.30 + P1,504.10 + P547.33 = P6,563.73
Retirement Pay = number of years in service x one-half month salary
= 15 years x P6,580.43
= P98,455.95
Since petitioner school had already paid Hilaria P28,853.09 representing
employer contributions under the PERAA, the same should be deducted from the
retirement pay due her, to thereby leave a balance of P69,602.86 still due her.
PANTRANCO NORTH EXPRESS, INC., vs. NATIONAL LABOR RELATIONS
COMMISSION and URBANO SUIGA
DOCTRINE: Under Article 287, any employee may be retired upon reaching the
retirement age established in the Collective Bargaining Agreement or other
applicable employment contract. In case of retirement, the employee shall be
entitled to receive such retirement benefits as he may have earned under existing
laws and any collective bargaining or other agreement.
Section 13, Rule I, Book VI of the Omnibus Rule Implementing the Labor Code
reads that in the absence of any collective bargaining agreement or other
applicable agreement concerning terms and condition of employment which
provides for retirement at an older age, an employee may be retired upon
reaching the age of sixty (60) years.
ISSUE: Is a Collective Bargaining Agreement provision allowing compulsory
retirement before age 60 but after twenty five years of service legal and
enforceable?
RULING: YES. Art. 287 of the Labor Code as worded permits employers and
employees to fix the applicable retirement age at below 60 years. Moreover,
providing for early retirement does not constitute diminution of benefits. In almost
all countries today, early retirement, i.e., before age 60, is considered a reward
for services rendered since it enables an employee to reap the fruits of his labor
particularly retirement benefits, whether lump-sum or otherwise at an earlier
age, when said employee, in presumably better physical and mental condition,
can enjoy them better and longer. As a matter of fact, one of the advantages of
early retirement is that the corresponding retirement benefits, usually consisting
of a substantial cash windfall, can early on be put to productive and profitable
uses by way of income-generating investments, thereby affording a more
significant measure of financial security and independence for the retiree who,
up till then, had to contend with life's vicissitudes within the parameters of his
fortnightly or weekly wages.
It is also further argued that, being a union member, private respondent is bound
by the CBA because its terms and conditions constitute the law between the
parties. The parties are bound not only to the fulfillment of what has been
expressly stipulated but also to all the consequences which according to their
nature, may be in keeping with good faith, usage and law.
A CBA incorporates the agreement reached after negotiations between employer
and bargaining agent with respect to terms and conditions of employment. A
CBA is not an ordinary contract. "(A)s a labor contract within the contemplation
of Article 1700 of the Civil Code of the Philippines which governs the relations
between labor and capital, (it) is not merely contractual in nature but impressed
with public interest, thus it must yield to the common good. As such, it must be
construed liberally rather than narrowly and technically, and the courts must
place a practical and realistic construction upon it, giving due consideration to the
context in which it is negotiated and purpose which it is intended to serve."
Being a product of negotiation, the CBA between the petitioner and the union
intended the provision on compulsory retirement to be beneficial to the
employees-union members, including herein private respondent. When private
respondent ratified the CBA with the union, he not only agreed to the CBA but
also agreed to conform to and abide by its provisions. Thus, it cannot be said
that he was illegally dismissed when the CBA provision on compulsory retirement
was applied to his case.
Incidentally, we call attention to Republic Act No. 7641, known as "The
Retirement Pay Law," which went into effect on January 7, 1993. Although
passed many years after the compulsory retirement of herein private respondent,
nevertheless, the said statute sheds light on the present discussion when it
amended Art. 287 of the Labor Code, to make it read as follows:
"ART. 7. Retirement. Any employee may be retired upon reaching the
retirement age establish in the collective bargaining agreement or other
applicable employment contract.
xxx xxx xxx
In the absence of a retirement plan or agreement providing for retirement benefits
of employees in the establishment, an employee upon reaching the age of sixty
(60) years or more, but not beyond sixty-five (65) years which is hereby declared
the compulsory retirement age, who has served at least five (5) years in the said
establishment may retire x x x."
The aforequoted provision makes clear the intention and spirit of the law to give
employers and employees a free hand to determine and agree upon the terms
and conditions of retirement. Providing in a CBA for compulsory retirement of
employees after twenty-five (25) years of service is legal and enforceable so long
as the parties agree to be governed by such CBA. The law presumes that
employees know what they want and what is good for them absent any showing
that fraud or intimidation was employed to secure their consent thereto.
On this point then, public respondent committed a grave abuse of discretion in
affirming the decision of the labor arbiter. The compulsory retirement of private
respondent effected in accordance with the CBA is legal and binding.
R and E Transport v. Latag
Case doctrine: The question of whether a corporation is a mere alter ego is one
of fact. Piercing the veil of corporate fiction may be allowed only if the following
elements concur: (1) control -- not mere stock control, but complete domination -
- not only of finances, but of policy and business practice in respect to the
transaction attacked, must have been such that the corporate entity as to this
transaction had at the time no separate mind, will or existence of its own; (2) such
control must have been used by the defendant to commit a fraud or a wrong to
perpetuate the violation of a statutory or other positive legal duty, or a dishonest
and an unjust act in contravention of plaintiffs legal right; and (3) the said control
and breach of duty must have proximately caused the injury or unjust loss
complained of.
Ponente: PANGANIBAN, J.
Issue: Whether or not the retirement pay of Latag should include his 23 years of
employment with La Mallorca in addition to his 14 years of service with R&E
Transport.
Held:
No. The Labor Arbiters conclusion that La Mallorca and R&E Transport are one
and the same entity was only based on mere surmises and self-serving
assertions of Respondent Avelina Latag. Evidence sufficiently shows that 1) R &
E Transport, Inc., was established only in 1978; 2) Honorio Enriquez, its
president, was not a stockholder of La Mallorca Taxi; and 3) none of the
stockholders of the latter company hold stocks in the former.
Furthermore, basic is the rule that the corporate veil may be pierced only if it
becomes a shield for fraud, illegality or inequity committed against a third person.
The question of whether a corporation is a mere alter ego is one of fact. Piercing
the veil of corporate fiction may be allowed only if the following elements concur:
(1) control -- not mere stock control, but complete domination -- not only of
finances, but of policy and business practice in respect to the transaction
attacked, must have been such that the corporate entity as to this transaction had
at the time no separate mind, will or existence of its own; (2) such control must
have been used by the defendant to commit a fraud or a wrong to perpetuate the
19
violation of a statutory or other positive legal duty, or a dishonest and an unjust
act in contravention of plaintiffs legal right; and (3) the said control and breach of
duty must have proximately caused the injury or unjust loss complained of.
Respondent has not shown by competent evidence that one taxi company had
stock control and complete domination over the other or vice versa. In fact, no
evidence was presented to show the alleged renaming of La Mallorca Taxi to
R & E Transport, Inc. The seven-year gap between the time the former closed
shop and the date when the latter came into being also casts doubt on any
alleged intention of petitioners to commit a wrong or to violate a statutory
duty. #lim
There was a quitclaim in this case signed by Avelina Latag, but the court annulled
it, stating that a quitclaim in which the consideration is scandalously low and
inequitable cannot be an obstacle to the pursuit of a workers legitimate claim.
Heres how SC computed it:
It is accepted that taxi drivers do not receive fixed wages, but retain only those
sums in excess of the boundary or fee they pay to the owners or operators of
their vehicles.[34] Thus, the basis for computing their benefits should be
the average daily income. In this case, the CA found that Pedro was earning an
average of five hundred pesos (P500) per day. We thus compute his retirement
pay as follows: P500 x 15 days x 14 years of service equals P105,000. Compared
with this amount, the P38,850 he received, which represented just over one third
of what was legally due him, was unconscionable. #lim
AMELIA R. OBUSAN vs. PHILIPPINE NATIONAL BANK,
Doctrine: Article 287 of the Labor Code, as amended, applies only to a situation
where (1) there is no CBA or other applicable employment contract providing for
retirement benefits for an employee; or (2) there is a collective bargaining
agreement or other applicable employment contract providing for retirement
benefits for an employee, but it is below the requirement set by law.
Issue: W/N PNB can lower the compulsory retirement age to 60 years without
violating Article 287.
Held: Yes. Undisputed is the fact that, when complainant was hired, PNB was
still a government owned and controlled corporation. Accordingly, the Revised
Government Service Insurance Act [RGSI] of 1977, which established that the
compulsory retirement age for government employees to be 65 years governs
the employment of PNB employees. The same may apply only as long as PNB
remains a government owned and controlled corporation. From the time PNB
ceased to be such, it cannot be said that [the] RGSI Act of 1977 still applies. Thus
negating the claim of complainant to retire at age 65 under the said law.
The retirement age is primarily determined by the existing agreement or
employment contract. Absent such an agreement, the retirement age shall be
fixed by law. Article 287 of the Labor Code, as amended, applies only to a
situation where (1) there is no CBA or other applicable employment contract
providing for retirement benefits for an employee; or (2) there is a collective
bargaining agreement or other applicable employment contract providing for
retirement benefits for an employee, but it is below the requirement set by law.
The rationale for the first situation is to prevent the absurd situation where an
employee, deserving to receive retirement benefits, is denied them through the
nefarious scheme of employers to deprive employees of the benefits due them
under existing labor laws. The rationale for the second situation is to prevent
private contracts from derogating from the public law.
KIMBERLY CLARK PHILIPPINES VS DIMAYUGA
Doctrine: According to the Supreme Court, the initial retirement grant already
given to therespondents was already due to the privilege given by the company
to the employees. They areclearly not included anymore but because of their
request, the company made adjustments andreconsidered their inclusion.
So when the company announced an additional incentive, it was clearthat the
respondents are no longer covered by it because they are no longer employees
when it wasannounced. To have them included would be additional burden to
the employer. The nature a bonus arose from the financial growth or good
performance of the company, it is clearly not mandatory and legally demandable
by the employees when it is clear that no collective bargaining agreement or law
that mandates the grant
Issues: A re additional benefits/bonuses given to the employees due to the
gratuitous grant of the employer be required to the employees although it is
not included in CollectiveBargaining Agreement
Ruling: It is settled that entitlement of employees to retirement benefits must
specifically be granted under existing laws, a collective bargaining agreement or
employment contract, or an established employer policy.[21] No law or collective
bargaining agreement or other applicable contract, or an established company
policy was existing during respondents employment entitling them to
the P200,000 lump-sum retirement pay. Petitioner was not thus obliged to grant
them such pay.
Respondents citing the pronouncement in Businessday that:
x x x The law requires an employer to extend equal treatment to its employees.
Respondents reliance on Businessday is misplaced. The factual milieu
in Businessday is markedly different from that of the present case. That case
involved theretrenched employees separation pay to which they are entitled
under Article 283 of the Labor Code. In the present case, Nora and
Rosemarie resigned prior to petitioners offer of the lump sum retirement pay as
an incentive to those employees who would voluntarily avail of its early retirement
scheme as a cost-cutting and streamlining measure. .
Petitioners decision to extend the benefit to some former employees who had
already resigned before the offer of the lump sum pay incentive was thus an act
of generosity which it is not obliged to extend to respondents. Apropos is this
Courts ruling in Businessday:
With regard to the private respondents claim for the mid-year bonus, it is settled
doctrine that the grant of a bonus is a prerogative, not an obligation, of the
employer. The matter of giving a bonus over and above the workers lawful
salaries and allowances is entirely dependent on the financial capability of the
employer to give it. The fact that the companys business was no longer
profitable (it was in fact moribund) plus the fact that the private respondents did
not work up to the middle of the year (they were discharged in May 1998) were
valid reasons for not granting them a mid-year bonus. Requiring the company to
pay a mid-year bonus to them also would in effect penalize the company for its
generosity to those workers who remained with the company till the end of its
days.[24] (Citations omitted) (Emphasis and underscoring supplied)
Neither are Nora and Rosemarie entitled to the economic assistance which
petitioner awarded to all monthly employees who are under regular status as of
November 16, 2002, they having resigned earlier or on October 21, 2002.
MARCELINO A. MAGDADARO, vs. PHILIPPINE NATIONAL BANK
Issue: The only issue in this case is whether petitioner was illegally dismissed
from employment.
Held: The petition has no merit.
Retirement is the result of a bilateral act of the parties, a voluntary agreement
between the employer and the employee whereby the latter, after reaching a
certain age, agrees to sever his or her employment with the former. Retirement
is provided for under Article 287 of the Labor Code, as amended by Republic Act
No. 7641, or is determined by an existing agreement between the employer and
the employee.
In this case, respondent offered the SSIP to overhaul the bank structure and to
allow it to effectively compete with local peer and foreign banks. SSIP was not
compulsory on employees. Employees who wished to avail of the SSIP were
required to accomplish a form for availment of separation benefits under the SSIP
and to submit the accomplished form to the Personnel Administration and
Industrial Relations Division (PAIRD) for approval.
Petitioner voluntarily availed of the SSIP. He accomplished the application form
and submitted it to the PAIRD. He only questioned the approval of his retirement
on a date earlier than his preferred retirement date.
The Labor Arbiter ruled that petitioner was not illegally dismissed from the
service. Even the NLRC ruled that petitioner could no longer withdraw his
application for early retirement under the SSIP. However, the NLRC ruled that
respondent could not accelerate the petitioners retirement date. The NLRC ruled
that it could not imagine how petitioners continued employment until 31
December 1999 would impair the delivery of bank services and attribute bad faith
on respondent when it accelerated petitioners retirement.
We do not agree. Whether petitioners early retirement within the SSIP period will
improve or impair the delivery of bank services is a business decision properly
within the exercise of management prerogative. More importantly, the SSIP
provides:
7. Management shall have the discretion and prerogative in approving the
applications filed under the Plan, as well as in setting the effectivity dates for
separation within the implementation period of the Plan. (Emphasis supplied)
It is clear that it is within respondents prerogative to set the date of effectivity of
retirement and it may not be necessarily what is stated in the application.
Art. 291
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY VS PINGOL
KEYWORDS: maintenance technician, prescription of action
DOCTRINE: Labor Code: Article 291. Money Claims. All money claims arising
from employer-employee relations accruing during the effectivity of this Code
shall be filed within three (3) years from the time the cause of action accrued;
otherwise they shall be barred forever.
New Civil Code: ART. 1155. The prescription of actions is interrupted when they
are filed before the Court, when there is a written extrajudicial demand by the
creditors, and when there is any written acknowledgment of the debt by the
debtor.
An action predicated "upon an injury to the rights of the plaintiff," as contemplated
under Art. 1146 of the New Civil Code, which must be brought within four (4)
years
ISSUE: Whether or not respondent Pingol filed his complaint for constructive
dismissal and money claims within the prescriptive period of four (4) years as
provided in Article 1146 of the Civil Code ]and three (3) years as provided in
Article 291 of the Labor Code, respectively.
SC RULING: NO. As this Court stated in Callanta v. Carnation, when one is
arbitrarily and unjustly deprived of his job or means of livelihood, the action
instituted to contest the legality of one's dismissal from employment constitutes,
in essence, an action predicated "upon an injury to the rights of the plaintiff," as
contemplated under Art. 1146 of the New Civil Code, which must be brought
within four (4) years. With regard to the prescriptive period for money claims,
Article 291 of the Labor Code states:
Article 291. Money Claims. All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three (3)
years from the time the cause of action accrued; otherwise they shall be barred
forever.
In the case at bench, since Pingol filed his claim only on March 29, 2004,
exactly four (4) years and three (3) months later, and respondent never denied
making such admission or raised palpable mistake as the reason therefor,
petitioner correctly relied on such allegation in the complaint to move for the
dismissal of the case on the ground of prescription.
The Labor Code has no specific provision on when a claim for illegal dismissal or
a monetary claim accrues. Thus, the general law on prescription applies. Article
1150 of the Civil Code states:
Article 1150. The time for prescription for all kinds of actions, when there is no
special provision which ordains otherwise, shall be counted from the day they
may be brought.
The day the action may be brought is the day a claim starts as a legal possibility.
In the present case, January 1, 2000 was the date that respondent Pingol was
not allowed to perform his usual and regular job as a maintenance
technician. Respondent Pingol cited the same date of dismissal in his complaint
20
before the LA. As, thus, correctly ruled by the LA, the complaint filed had already
prescribed.
Respondent claims that between 2001 and 2003, he made follow-ups with PLDT
management regarding his benefits. This, to his mind, tolled the running of the
prescriptive period.
The rule in this regard is covered by Article 1155 of the Civil Code. Its
applicability in labor cases was upheld in the case of International Broadcasting
Corporation v. Panganiban where it was written:
Like other causes of action, the prescriptive period for money claims is
subject to interruption, and in the absence of an equivalent Labor Code provision
for determining whether the said period may be interrupted, Article 1155 of the
Civil Code may be applied, to wit:
ART. 1155. The prescription of actions is interrupted when they are filed before
the Court, when there is a written extrajudicial demand by the creditors, and when
there is any written acknowledgment of the debt by the debtor.
In this case, respondent Pingol never made any written extrajudicial demand.
Neither did petitioner make any written acknowledgment of its alleged
obligation. Thus, the claimed follow-ups could not have validly tolled the
running of the prescriptive period. It is worthy to note that respondent never
presented any proof to substantiate his allegation of follow-ups.
Unfortunately, respondent Pingol has no one but himself to blame for his own
predicament. By his own allegations in his complaint, he has barred his remedy
and extinguished his right of action.
ROBERTO R. SERRANO vs. COURT OF APPEALS, NATIONAL LABOR
RELATIONS COMMISSION, MAERSK-FILIPINAS CREWING, INC. and A.P.
MOLLER
ISSUE: Whether or not the claim of the petitioner has prescribed.
RULING:
Article 291. Money claims. All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three
years from the time the cause of action accrued, otherwise they shall be forever
barred. (emphasis supplied)
Petitioner contends that his cause of action accrued only in 1993 when
respondent A.P. Moller wrote to him that its accounting records showed it had no
outstanding money orders and that his case was considered outdated. Thus, the
three (3) year prescriptive period should be counted from 1993 and not 1978 and
since his complaint was filed in 1994, he claims that it has not prescribed.
We agree. Petitioner's cause of action accrued in November 1993 upon
respondent Maersk's definite denial of his money claims following this Court's
ruling in the similar case of Baliwag Transit , Inc. v. Ople.[10] In that case, a bus
of the petitioner Baliwag Transit bus company driven by the respondent driver
figured in an accident with a train of the Philippine National Railways (PNR) on
August 10, 1974. This resulted to the death of eighteen (18) passengers and
caused serious injury to fifty-six (56) other passengers. The bus itself also
sustained extensive damage. The bus company instituted a complaint against
the PNR. The latter was held liable for its negligence in the decision rendered
on April 6, 1977. The respondent driver was absolved of any contributory
negligence. However, the driver was also prosecuted for multiple homicide and
multiple serious physical injuries, but the case was provisionally dismissed in
March 1980 for failure of the prosecution witness to appear at the scheduled
hearing. Soon after the PNR decision was rendered, the driver renewed his
license and sought reinstatement with Baliwag Transit. He was advised to wait
until his criminal case was terminated. He repeatedly requested for
reinstatement thereafter, but to no avail, even after termination of the criminal
case against him. Finally, on May 2, 1980, he demanded reinstatement in a letter
signed by his counsel. On May 10, 1980, petitioner Baliwag Transit replied that
he could not be reinstated as his driver's license had already been revoked and
his driving was "extremely dangerous to the riding public." This prompted
respondent driver to file on July 29, 1980 a formal complaint with the Ministry of
Labor and Employment for illegal dismissal against Baliwag Transit praying for
reinstatement with back wages and emergency cost of living allowance. The
complaint was dismissed by the regional director on the ground of prescription
under Art. 291 of the Labor Code. This was reversed by then Labor and
Employment Minister Ople. On appeal to this Court, we ruled that the action had
not prescribed, viz:
. . . (T)he antecedent question that has to be settled is the date when the cause
of action accrued and from which the period shall commence to run. The parties
disagree on this date. The contention of the petitioner is that it should be August
10, 1974, when the collission occurred. The private respondent insists it is May
10, 1980, when his demand for reinstatement was rejected by the petitioner.
It is settled jurisprudence that a cause of action has three elements, to wit, (1) a
right in favor of the plaintiff by whatever means and under whatever law it arises
or is created; (2) an obligation on the part of the named defendant to respect or
not to violate such right; and (3) an act or omission on the part of such defendant
violative of the right of the plaintiff or constituting a breach of the obligation of the
defendant to the plaintiff.
The problem in the case at bar is with the third element as the first two are
deemed established.
We hold that the private respondent's right of action could not have accrued from
the mere fact of the occurrence of the mishap on August 10, 1974, as he was not
considered automatically dismissed on that date. At best, he was deemed
suspended from his work, and not even by positive act of the petitioner but as a
result of the suspension of his driver's license because of the accident. There
was no apparent disagreement then between (respondent driver) Hughes and
his employer. As the private respondent was the petitioner's principal witness in
its complaint for damages against the Philippine National Railways, we may
assume that Baliwag Transit and Hughes were on the best of terms when the
case was being tried. Hence, there existed no justification at that time for the
private respondent to demand reinstatement and no opportunity warrant (sic)
either for the petitioner to reject that demand.
The facts in the case at bar are similar to the Baliwag case. Petitioner repeatedly
demanded payment from respondent Maersk but similar to the actuations of
Baliwag Transit in the above cited case, respondent Maersk warded off these
demands by saying that it would look into the matter until years passed by. In
October 1993, Serrano finally demanded in writing payment of the unsent money
orders. Then and only then was the claim categorically denied by respondent
A.P. Moller in its letter dated November 22, 1993. Following the Baliwag Transit
ruling, petitioners cause of action accrued only upon respondent A.P. Moller's
definite denial of his claim in November 1993. Having filed his action five (5)
months thereafter or in April 1994, we hold that it was filed within the three-year
(3) prescriptive period provided in Article 291 of the Labor Code.
CASE TITLE: ACCESSORIES SPECIALIST INC vs.ERLINDA B. ALABANZA
Doctrine: Promissory estoppel may arise from the making of a promise, even
though without consideration, if it was intended that the promise should be relied
upon, as in fact it was relied upon, and if a refusal to enforce it would virtually
sanction the perpetration of fraud or would result in other injustice. The principle
of promissory estoppel is a recognized exception to the three-year prescriptive
period enunciated in Article 291of the Labor Code. Labor Law. The posting of a
bond is indispensable to the perfection of an appeal in cases involving monetary
awards from the decision of the Labor Arbiter. The filing of the bond is not only
mandatory but also a jurisdictional requirement that must be complied with in
order to confer jurisdiction upon the NLRC.
Issues: Whether the cause of action of respondents has already prescribed;
The Ruling of the Court: The petition is DENIED. ASI contends that the three-
year prescriptive period under Article 291 of the Labor Code had already set-in,
thereby barring all of respondents money claims arising from their employer-
employee relations.
Based on the findings of facts of the LA, it was ASI which was responsible for the
delay in the institution of the complaint. When Jones filed his resignation, he
immediately asked for the payment of his money claims. However, the
management of ASI promised him that he would be paid immediately after the
claims of the rank-and-file employees had been paid. Jones relied on this
representation. Unfortunately, the promise was never fulfilled even until the time
of Jones death.
The Court applied the principle of promissory estoppel, which is a recognized
exception to the three-year prescriptive period enunciated in Article 291 of the
Labor Code.
Promissory estoppel may arise from the making of a promise, even though
without consideration, if it was intended that the promise should be relied upon,
as in fact it was relied upon, and if a refusal to enforce it would virtually sanction
the perpetration of fraud or would result in other injustice. Promissory estoppel
presupposes the existence of a promise on the part of one against whom
estoppel is claimed. The promise must be plain and unambiguous and sufficiently
specific so that the court can understand the obligation assumed and enforce the
promise according to its terms.
In order to make out a claim of promissory estoppel, a party bears the burden of
establishing the following elements: (1) a promise was reasonably expected to
induce action or forbearance; (2) such promise did, in fact, induce such action or
forbearance; and (3) the party suffered detriment as a result.
All the requisites of promissory estoppel are present in this case. Jones relied on
the promise of ASI that he would be paid as soon as the claims of all the rank-
and-file employees had been paid. If not for this promise that he had held on to
until the time of his death, we see no reason why he would delay filing the
complaint before the LA. Thus, we find ample justification not to follow the
prescriptive period imposed under Article 291 of the Labor Code. Great injustice
will be committed if we will brush aside the employees claims on a mere
technicality, especially when it was petitioners own action that prevented
respondent from interposing the claims within the required period.
Extra Issue Resolved: (For your consumption and satisfaction) Issue No. 2:
WON the posting of the complete amount of the bond in an appeal from the
decision of the Labor Arbiter to the NLRC is an indispensable requirement for the
perfection of the appeal despite the filing of a motion to reduce the amount of the
appeal bond.
Held: YES. Ratio: Article 223 of the Labor Code mandates that in case of a
judgment of the Labor Arbiter involving a monetary award, an appeal by the
employer to the NLRC maybe perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the
Commission, in the amount equivalent to the monetary award in the judgment
appealed from.
AUTO BUS TRANSPORT SYSTEMS VS. BAUTISTA
DOCTRINE: Article 291 of the Labor Code states that all money claims arising
from employer-employee relationship shall be filed within three (3) years from the
time the cause of action accrued; otherwise, they shall be forever barred. In the
computation of the three-year prescriptive period, a determination must be made
as to the period when the act constituting a violation of the workers right to the
benefits being claimed was committed.
ISSUES: Whether or not Bautista is entitled to Service Incentive Leave. If he is,
Whether or not the three (3)-year prescriptive period provided under Article 291
of the Labor Code, as amended, is applicable to respondents claim of service
incentive leave pay.
RULING OF THE COURT:
a. Yes, Bautista is entitled to Service Incentive Leave
Auto Bus averred that Bautista is a commissioned employee and if that is not
reason enough that Bautista is also field personnel hence he is not entitled to a
service incentive leave. They invoke:
21
Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE
(a) Every employee who has rendered at least one year of service
shall be entitled to a yearly service incentive leave of five days with
pay.
Book III, Rule V: SERVICE INCENTIVE LEAVE
SECTION 1. Coverage. This rule shall apply to all employees
except:
(d) Field personnel and other employees whose performance is
unsupervised by the employer including those who are engaged on
task or contract basis, purely commission basis, or those who are
paid in a fixed amount for performing work irrespective of the time
consumed in the performance thereof; . . .
The Supreme Court emphasized that it does not mean that just because an
employee is paid on commission basis he is already barred to receive service
incentive leave pay. The question actually boils down to whether or not Bautista
is a field employee.
According to Article 82 of the Labor Code, field personnel shall refer to non-
agricultural employees who regularly perform their duties away from the principal
place of business or branch office of the employer and whose actual hours of
work in the field cannot be determined with reasonable certainty.
As a general rule, field personnel are those whose performance of their
job/service is not supervised by the employer or his representative, the workplace
being away from the principal office and whose hours and days of work cannot
be determined with reasonable certainty; hence, they are paid specific amount
for rendering specific service or performing specific work. If required to be at
specific places at specific times, employees including drivers cannot be said to
be field personnel despite the fact that they are performing work away from the
principal office of the employee.
Certainly, Bautista is not a field employee. He has a specific route to traverse as
a bus driver and that is a specific place that he needs to be at work. There are
inspectors hired by Auto Bus to constantly check him. There are inspectors in
bus stops who inspects the passengers, the punched tickets, and the driver.
Therefore he is definitely supervised though he is away from the Auto Bus main
office.
b. Yes. His money claim was filed within the prescriptive period provided
for by Article 291 of the Labor Code
Article 291 of the Labor Code states that all money claims arising from employer-
employee relationship shall be filed within three (3) years from the time the cause
of action accrued; otherwise, they shall be forever barred. In the computation of
the three-year prescriptive period, a determination must be made as to the period
when the act constituting a violation of the workers right to the benefits being
claimed was committed. For if the cause of action accrued more than three (3)
years before the filing of the money claim, said cause of action has already
prescribed.
The 3 year prescriptive period ran but Bautista was able to file his suit in time
before the prescriptive period expired. It was only upon his filing of a complaint
for illegal dismissal, one month from the time of his dismissal, that Bautista
demanded from his former employer commutation of his accumulated leave
credits. His cause of action to claim the payment of his accumulated service
incentive leave thus accrued from the time when his employer dismissed him and
failed to pay his accumulated leave credits.
Therefore, the prescriptive period with respect to his claim for service incentive
leave pay only commenced from the time the employer failed to compensate his
accumulated service incentive leave pay at the time of his dismissal. Since
Bautista had filed his money claim after only one month from the time of his
dismissal, necessarily, his money claim was filed within the prescriptive period
provided for by Article 291 of the Labor Code.
Definition of Service Incentive Leave
Service incentive leave is a right which accrues to every employee who has
served within 12 months, whether continuous or broken reckoned from the date
the employee started working, including authorized absences and paid regular
holidays unless the working days in the establishment as a matter of practice or
policy, or that provided in the employment contracts, is less than 12 months, in
which case said period shall be considered as one year. It is also commutable to
its money equivalent if not used or exhausted at the end of the year. In other
words, an employee who has served for one year is entitled to it. He may use it
as leave days or he may collect its monetary value.
------------------------------------------------------------------------------------------------------
[LIABILITY OF CORPORATE OFFICERS]
ANTONIO C. CARAG v. NATIONAL LABOR RELATIONS COMMISSION,
ISABEL G. PANGANIBAN-ORTIGUERRA, as Executive Labor Arbiter, NAFLU,
and MARIVELES APPAREL CORPORATION LABOR UNION
Case doctrine: Article 212(e) of the Labor Code, by itself, does not make a
corporate officer personally liable for the debts of the corporation. The governing
law on personal liability of directors for debts of the corporation is still Section 31
of the Corporation Code.
The personal liability of corporate officers validly attaches only when (a) they
assent to a patently unlawful act of the corporation; or (b) they are guilty of bad
faith or gross negligence in directing its affairs; or (c) they incur conflict of interest,
resulting in damages to the corporation, its stockholders or other persons.
Instances when officers may be personally liable for the debts of the corporation
; Article 212 vs. Section 31
ISSUE: Is petitioner Carag personally liable for the unpaid salaries or separation
pay of employees of the corporation?
RULING: NO, petitioner Carag is not personally liable for the unpaid salaries or
separation pay of employees of the corporation MAC.
The rule is that a director is not personally liable for the debts of the corporation,
which has a separate legal personality of its own. However, Section 31 of the
Corporation Code lays down the exceptions to the rule: Section 31 makes a
director personally liable for corporate debts if he wilfully and knowingly votes for
or assents to patently unlawful acts of the corporation. Section 31 also makes a
director personally liable if he is guilty of gross negligence or bad faith in directing
the affairs of the corporation.
In the present case, the complainants did not allege in their complaint that Carag
wilfully and knowingly voted for or assented to any patently unlawful act of MAC.
Complainants did not present any evidence showing that Carag wilfully and
knowingly voted for or assented to any patently unlawful act of MAC. Neither did
the LA make any finding to this effect in her Decision.
Complainants did not also allege that Carag is guilty of gross negligence or bad
faith in directing the affairs of MAC. Complainants did not present any evidence
showing that Carag is guilty of gross negligence or bad faith in directing the affairs
of MAC. Neither did the LA make any finding to this effect in her Decision.
In fact, LA did not specify what act of bad faith Carag committed, or what
particular labor standard laws he violated.
Article 283 of the Labor Code, requiring a one-month prior notice to employees
and the Department of Labor and Employment before any permanent closure of
a company, does not state that non-compliance with the notice is an unlawful act
punishable under the Code. There is no provision in any other Article of the Labor
Code declaring failure to give such notice an unlawful act and providing for its
penalty.
Moreover, LAs assertion that "when the company had already ceased operations
and there is no way by which a judgment in favor of employees could be satisfied,
corporate officers can be held jointly and severally liable with the company." This
assertion echoes the complainants' claim that Carag is personally liable for
MAC's debts to complainants on the basis of Article 212(e) of the Labor Code, as
amended. The Court has already ruled that Article 212(e) of the Labor Code, by
itself, does not make a corporate officer personally liable for the debts of the
corporation. The governing law on personal liability of directors for debts of the
corporation is still Section 31 of the Corporation Code.
The personal liability of corporate officers validly attaches only when (a) they
assent to a patently unlawful act of the corporation; or (b) they are guilty of bad
faith or gross negligence in directing its affairs; or (c) they incur conflict of interest,
resulting in damages to the corporation, its stockholders or other person.
[CORPORATE LIABILITIES]
FERNANDEZ, BELTRAN VERSUS NEWFIELD STAFF SOLUTIONS, INC.
DOCTRINE:
ISSUE: Whether or not Fernandez and Beltran are illegally dismissed.
RULING: Petitioners employment agreements are not fixed-term contracts for
six months because they are entitled to loyalty bonus and life insurance upon
reaching six months of employment in Newfield. They merely guaranteed to
perform their tasks for six months and failure to comply with the guarantee makes
them liable for liquidated damages. It also includes that if they would want to
terminate the agreements AFTER the guaranteed period of engagement, they
must notify the company 45 days in advance. NLRC and CA misread this
guarantee.
They are probationary employees and may be terminated for a just and
authorized cause or when he fails to qualify as a regular employee in accordance
with the reasonable standards prescribed by the employer.
Abandonment is a form of neglect of duty. For it to exist, two factors must be
present: failure to report for work or absence without valid or justifiable reason
and a clear intention to sever the EE-ER relationship, with the second element
as the more determinative factor being manifested by some overt acts. These
two instances are wanting. GM fired them and they cannot be accused of being
AWOL or of breaching their employment agreements.
Petitioners protest of their dismissal by sending demand letters and filing a
complaint for illegal dismissal cannot logically be said to have abandoned their
work. A charge of abandonment is totally inconsistent with the immediate filing of
a complaint for illegal dismissal. The filing thereof is proof enough of ones desire
to return to work, thus negating any suggestion of abandonment.
22
In the LAs decision, it stated that GM is solidarily liable with Newfield. In labor
cases, the Court has held corporate directors and officers solidarily liable with the
corporation for the termination of an employment of employees done with malice
of bad faith. Bad faith does not connote bad judgment or negligence. It imports
dishonest purpose or some moral obliquity and conscious doing of a wrong thing.
LA and NLRC have not found GM guilty of malice or bad faith. Hence, there is no
basis to hold him solidarily liable.
[CHANGE OF EQUITY COMPOSITION OF CORP]
G.R. No. 184517 October 8, 2013
SME BANK INC., ABELARDO P. SAMSON, OLGA SAMSON and AURELIO
VILLAFLOR, JR. vs. PEREGRIN T. DE GUZMAN,EDUARDO M. AGUSTIN, JR.,
ELICERIO GASPAR, RICARDO GASPAR JR., EUFEMIA ROSETE, FIDEL
ESPIRITU, SIMEONESPIRITU, JR., and LIBERATO MANGOBA
G.R. No. 186641
SME BANK INC., ABELARDO P. SAMSON, OLGA SAMSON and AURELIO
VILLAFLOR, JR. vs. ELICERIO GASPAR, RICARDO GASPAR, JR., EUFEMIA
ROSETE, FIDEL ESPIRITU, SIMEONESPIRITU, JR., and LIBERATO
MANGOBA
DOCTRINE: Because the corporation possesses a personality separate and
distinct from that of its shareholders, a shift in the composition of its shareholders
will not affect its existence and continuity. Thus, notwithstanding the stock sale,
the corporation continues to be the employer of its people and continues to be
liable for the payment of their just claims. Furthermore, the corporation or its new
majority share holders are not entitled to lawfully dismiss corporate employees
absent a just or authorized cause.
ISSUE: Whether respondent employees were illegally dismissed.
RULING: Respondent employees were illegally dismissed.
The Samson Group contends that Elicerio, Ricardo, Fidel, and Liberato
voluntarily resigned from their posts, while Eufemia retired from her position. As
their resignations and retirements were voluntary, they were not dismissed from
their employment. In support of this argument, it presented copies of their
resignation and retirement letters, which were couched in terms of gratitude.
We disagree. While resignation letters containing words of gratitude may indicate
that the employees were not coerced into resignation, this fact alone is not
conclusive proof that they intelligently, freely and voluntarily resigned. In order to
withstand the test of validity, resignations must be made voluntarily and with the
intention of relinquishing the office, coupled with an act of relinquishment.
Therefore, in order to determine whether the employees truly intended to resign
from their respective posts, we cannot merely rely on the tenor of the resignation
letters, but must take into consideration the totality of circumstances in each
particular case.
The records show that Elicerio, Ricardo, Fidel, and Liberato only tendered
resignation letters because they were led to believe that, upon reapplication, they
would be reemployed by the new management. As it turned out, except for
Simeon, Jr., they were not rehired by the new management. Their reliance on the
representation that they would be reemployed gives credence to their argument
that they merely submitted courtesy resignation letters because it was demanded
of them, and that they had no real intention of leaving their posts.
As to Eufemia, a review of the records shows that, unlike her co-employees, she
did not resign; rather, she submitted a letter indicating that she was retiring from
her former position. The fact that Eufemia retired and did not resign, however,
does not change our conclusion that illegal dismissal took place. Retirement, like
resignation, should be an act completely voluntary on the part of the employee.
If the intent to retire is not clearly established or if the retirement is involuntary, it
is to be treated as a discharge.
In this case, the facts show that Eufemias retirement was not of her own volition.
The facts show that Eufemia was likewise given the option to resign or retire in
order to fulfill the precondition in the Letter Agreements that the seller should
"terminate/retire the employees [mutually agreed upon] upon transfer of shares"
to the buyers.
Petitioner bank also argues that, there being a transfer of the business
establishment, the innocent transferees no longer have any obligation to continue
employing respondent employees, and that the most that they can do is to give
preference to the qualified separated employees; hence, the employees were
validly dismissed.
The argument is misleading and unmeritorious. Contrary to petitioner banks
argument, there was no transfer of the business establishment to speak of, but
merely a change in the new majority shareholders of the corporation.
There are two types of corporate acquisitions: asset sales and stock sales.
In asset sales, the rule is that the seller in good faith is authorized to dismiss the
affected employees, but is liable for the payment of separation pay under the law.
The buyer in good faith, on the other hand, is not obliged to absorb the employees
affected by the sale, nor is it liable for the payment of their claims. The most that
it may do, for reasons of public policy and social justice, is to give preference to
the qualified separated personnel of the selling firm.
The transaction in stock sales takes place at the shareholder level. Because the
corporation possesses a personality separate and distinct from that of its
shareholders, a shift in the composition of its shareholders will not affect its
existence and continuity. Thus, notwithstanding the stock sale, the corporation
continues to be the employer of its people and continues to be liable for the
payment of their just claims. Furthermore, the corporation or its new majority
share holders are not entitled to lawfully dismiss corporate employees absent a
just or authorized cause.
In the case at bar, the Letter Agreements show that their main object is the
acquisition by the Samson Group of 86.365% of the shares of stock of SME Bank.
Hence, this case involves a stock sale, whereby the transferee acquires the
controlling shares of stock of the corporation. Thus, following the rule in stock
sales, respondent employees may not be dismissed except for just or authorized
causes under the Labor Code.
_______________________________________________________________
[EFFECT OF CHANGE OF OWNERSHIP OF A BUSINESS]
Case: Penafrancia Tours and Travel Transport v. Sarmiento, October 20, 2010
Ruling:
Closure of business is the reversal of fortune of the employer whereby there is a
complete cessation of business operations and/or an actual locking-up of the
doors of the establishment, usually due to financial losses. Closure of business,
as an authorized cause for termination of employment, aims to prevent further
financial drain upon an employer who can no longer pay his employees since
business has already stopped.[19]
Closure or cessation of operation of the establishment is an authorized cause for
terminating an employee, as provided in Article 283 of the Labor Code, to wit:
Art. 283. Closure of establishment and reduction of personnel. The employer
may also terminate the employment of any employee due to the installation of
labor-saving devices, redundancy, retrenchment to prevent losses or the closing
or cessation of operation of the establishment or undertaking unless the closing
is for the purpose of circumventing the provisions of this Title, by serving a written
notice on the workers and the Department of Labor and Employment at least one
(1) month before the intended date thereof. x x x. In case of retrenchment to
prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to one (1) month pay or to at
least one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1) whole year.
_______________________________________________________________
[EFFECT OF COMPANY MERGER ON UNION SHOP CLAUSE]
Case: BPI Vs BPI Employees Union Davao Chapter
Ruling:
The lack of a provision in the plan of merger regarding the transfer of employment
contracts to the surviving corporation could have very well been deliberate on the
part of the parties to the merger, in order to grant the surviving corporation the
freedom to choose who among the dissolved corporations employees to retain,
in accordance with the surviving corporations business needs. If terminations, for
instance due to redundancy or labor-saving devices or to prevent losses, are
done in good faith, they would be valid. The surviving corporation too is duty-
bound to protect the rights of its own employees who may be affected by the
merger in terms of seniority and other conditions of their employment due to the
merger. Thus, we are not convinced that in the absence of a stipulation in the
merger plan the surviving corporation was compelled, or may be judicially
compelled, to absorb all employees under the same terms and conditions
obtaining in the dissolved corporation as the surviving corporation should also
take into consideration the state of its business and its obligations to its own
employees, and to their certified collective bargaining agent or labor union.
Even assuming we accept Justice Brions theory that in a merger situation the
surviving corporation should be compelled to absorb the dissolved corporations
employees as a legal consequence of the merger and as a social justice
consideration, it bears to emphasize his dissent also recognizes that the
employee may choose to end his employment at any time by voluntarily
resigning. For the employee to be absorbed by BPI, it requires the employees
implied or express consent. It is because of this human element in employment
contracts and the personal, consensual nature thereof that we cannot agree that,
in a merger situation, employment contracts are automatically transferable from
one entity to another in the same manner that a contract pertaining to purely
proprietary rights such as a promissory note or a deed of sale of property is
perfectly and automatically transferable to the surviving corporation.
23