DO 147 s 15 CASES

Lopez v. Irvin Construction Corp- Abratique

FACTS: Crispin Lopez was hired by Irvin Construction Co. as a laborer in 1994. On
December 18, 2005, he was allegedly laid off for no reason by the company so he filed
a case for illegal dismissal. ICC claimed that Lopez was hired as a laborer but was
sometimes asked to work as a security guard. However, he was temporarily laid off on
December 27, 2005 because the construction project in Cavite was already finished. He
was served with an Establishment Termination Report which was submitted to DOLE on
December 28, 2005. He was later asked to report to work on June 5, 2006, which is
within the 6 months period allowed by the Labor Code Art. 286.

The LA and NLRC ruled that he was a regular employee entitled to the full security of
tenure since he was employed by Irvine since 1994. There was no proof that he was
asked to return to work nor was there any proof that any just or authorized cause
surrounded his termination.

The CA ruled that he was merely a project employee. He was merely temporarily laid off
and not dismissed.

ISSUE: Was Lopez a regular employee?

DECISION: Yes. The test to determine whether he was a project employee or a regular
employee is whether he was assigned to carry out a specific project or undertaking
within a specified time or upon completion of the project. In this case, there was no
evidence showing that he was merely engaged until the completion of the Cavite
project. On the contrary, he was employed by ICC since 1994, which indicates that he is
a regular employee. While temporary lay-off is a valid exercise of management
prerogative, lay-off is an act of the employer of dismissing employees because of losses
in the operation, lack of work, and considerable reduction on the volume of its business.
However, a lay-off would be tantamount to a dismissal only if it is permanent. When a
lay-off is only temporary, the employment status of the employee is not deemed
terminated, but merely suspended.

Lay-off must be grounded on some sufficient and convincing evidence of its necessity.
The evidence shows that ICC just finished a project which would not indicate that it
needs to temporarily lay-off its employees. The employer has to prove that there are no
other posts available to which Lopez can be assigned. ICC failed to prove this.
Cajucom vs TPI Philippines Cement Corp-Alden
CAJUCOM v TPI Phil Cement Corp

FACTS: On June 1, 1995, respondents employed Atty. Benedicto A. Cajucom VII,

petitioner, as Vice-President for Legal Affairs with a monthly salary of P70,000.00.

As a result of the economic slowdown then experienced in this country, respondent TP

Cement, having no viable projects, shortened its corporate term from 50 years to 2
years and 7 months. In fact, it was dissolved on January 27, 1998. With respect to
respondent TP Vinyl, it shifted its business from production to marketing and trading of
Thai Petrochemical products.

Thus, respondents implemented cost-cutting measures resulting in the retrenchment or

termination from the service of their employees, including petitioner.

On December 3, 1998, respondents sent petitioner a notice terminating his services

effective December 30, 1998. Simultaneously, respondents, on the same day, filed with
the Department of Labor and Employment (DOLE) an "Establishment Termination
Report" of petitioner's retrenchment from the service. Petitioner contested respondents'
action, claiming that his retrenchment was based erroneously on respondents' probable
losses, instead of their actual, substantial and imminent losses, as shown by the
following:

1. an increase or raise in his monthly salary from P70,000.00 in 1995 to P80,000.00

in 1996;
2. hiring by respondents of more marketing and accounting employees for the
period from July 1997 to December 1998;
3. acquisition, in 1998, of a warehouse; and
4. expansion in 1998 of their operations by including sales and marketing of oil
products.
Petitioner further claimed that respondents were motivated by revenge in terminating his
services. This stemmed from his October 7, 1996 memorandum to respondents'
Executive Vice-President Thun Tritasavit, also a respondent herein, questioning his
financial transactions detrimental to respondents' interests.

Eventually, or on January 12, 1999, petitioner filed with the Office of the Labor Arbiter a
complaint for illegal dismissal against respondents, docketed as NLRC-NCR Case No.
00-01-00485-99.

On March 31, 1999, the Labor Arbiter rendered a Decision holding that respondents
failed to adduce sufficient evidence to show that their alleged losses are substantial and
imminent and concluded that petitioner was illegally dismissed from employment.
Upon appeal, the National Labor Relations Commission (NLRC) promulgated a
Decision dated October 29, 1999 reversing the Labor Arbiter's Decision. In concluding
that the termination from the service of petitioner is justified.
ISSUE: Whether his retrenchment is lawful and valid

HELD: Retrenchment is recognized as an authorized cause for the dismissal of an

employee from the service. In Trendline Employees Association-Southern Philippines
Federation of Labor vs. NLRC, we enumerated the requisites of retrenchment, thus:

"To be valid, three requisites must concur, as provided in Article 283 of the Labor Code,
as amended, namely: (1) The retrenchment is necessary to prevent losses and the
same is proven; (2) Written notice to the employees and to the DOLE at least one
month prior to the intended date thereof; and (3) Payment of separation pay equivalent
to one month pay or at least month pay for every year of service, whichever is
higher."
We observe that the Court of Appeals, in finding that respondents suffered from
financial losses and justifying the retrenchment of petitioner from the service, relied on
the audited reports prepared by SyCip Gorres Velayo & Co. Such reliance is in order. In
Dela Salle University vs. Dela Salle University Employees Association, we held:

"x x x. We believe that the standard proof of a company's financial standing is its
financial statements duly audited by independent and credible external auditors.
Financial statements audited by an independent external auditor, as in the case at bar,
constitute the normal method of proof of profit and loss performance of a company."

For his part, petitioner insists that actual, not probable losses, justify retrenchment.
Article 283 (quoted earlier) entails, among others, only a situation where there is
"retrenchment to prevent losses." The phrase "to prevent losses" means that
retrenchment or termination from the service of some employees is authorized to be
undertaken by the employer sometime before the losses anticipated are actually
sustained or realized. This is the situation in the case at bar. Evidently, actual losses
need not set in prior to retrenchment.
Reyes vs. RP Guardians Security Agency - Apolonio

Facts: Petitioners Venancio S. Reyes, Edgardo C. Dabbay, Walter A. Vigilia, Nemesio

M. Calanno, Rogelio A. Supe, Jr., Roland R. Trinidad, and Aurelio A. Duldulao
(petitioners) were hired by respondent RP Guardians Security Agency, Inc.
(respondent) as security guards. They were deployed to various clients of respondent,
the last of which were the different branches of Banco Filipino Savings and Mortgage
Bank. In September 2006, respondents security contract with Banco Filipino was
terminated.
In separate letters, petitioners were individually informed of the termination of the
security contract with Banco de Oro. Petitioners waited for their next assignment, but
several months lapsed and they were not given new assignments.
Consequently, on April 10, 2007, petitioners filed a complaint for constructive dismissal.
In its position paper, respondent claimed that there was no dismissal, of petitioners,
constructive or otherwise, and asserted that their termination was due to the expiration
of the service contract which was coterminus with their contract of employment.

Issue: Was there illegal dismissal?

Held: There is no doubt that petitioners were constructively dismissed. The LA, the
NLRC and the CA were one in their conclusion that respondent was guilty of illegal
dismissal when it placed petitioners on floating status beyond the reasonable six-month
period after the termination of their service contract with Banco de Oro.
Temporary displacement or temporary off-detail of security guard is, generally, allowed
in a situation where a security agencys client decided not to renew their service
contract with the agency and no post is available for the relieved security guard. Such
situation does not normally result in a constructive dismissal.
Nonetheless, when the floating status lasts for more than six (6) months, the employee
may be considered to have been constructively dismissed. No less than the Constitution
guarantees the right of workers to security of tenure, thus, employees can only be
dismissed for just or authorized causes and after they have been afforded the due
process of law.
Settled is the rule that that 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 up to the time of
actual reinstatement. If reinstatement is not possible, however, the award of separation
pay is proper.
Back wages and reinstatement are separate and distinct reliefs given to an illegally
dismissed employee in order to alleviate the economic damage brought about by the
employees dismissal. "Reinstatement is a restoration to a state from which one has
been removed or separated" while "the payment of backwages is a form of relief that
restores the income that was lost by reason of the unlawful dismissal." Therefore, the
award of one does not bar the other.
In this case, respondent would have been liable for reinstatement and payment of
backwages. Reinstatement, however, was no longer feasible because, as found by the
LA, respondent had already ceased operation of its business. Thus, backwages and
separation pay, in the amount of one month for every year of service, should be paid in
lieu of reinstatement.

Espina v CA-Baucas

Facts:
M.Y. San Biscuits, Inc. was previously engaged in the business of manufacturing biscuits and
other related products.
M.Y. San informed the DOLE and the Union of its closure or cessation of business operations of
as result of the intended sale of the business and all the assets of M.Y. San to Monde M.Y. San
Corporation. In the interest of industrial peace, the union and management have agreed, among
others, on payment of separation package to the employees. It was also agreed that M.Y. San
shall provide Monde a list of all its present employees who shall be given preference in
employment by
Monde. When Monde commenced its operations, all the former employees of M.Y. San who
were terminated upon its closure and who applied and qualified for probationary employment,
including petitioners herein, started working for respondent Monde on a contractual basis for a
period of six months. Subsequently, petitioners were terminated on various dates. Thus, they
filed a Complaint for illegal dismissal and money claims. They alleged that the sale of
respondent M.Y. San to Monde was merely a ploy to circumvent the provisions of the Labor
Code.

Issue:
Were the employees validly dismissed?

Held:
The right to close the operations of an establishment or undertaking is explicitly recognized
under the Labor Code as one of the authorized causes in terminating employment of workers,
the only limitation being that the closure must not be for the purpose of circumventing the
provisions on terminations of employment embodied in the Labor Code.The phrase "closure or
cessation of operations of establishment or undertaking" includes a partial or total closure or
cessation. And the phrase "closure or cessation not due to serious business losses or financial
reverses" recognizes the right of the employer to close or cease its business operations
orundertaking even in the absence of serious business losses or financial reverses, as long as
he pays
his employees their termination pay in the amount corresponding to their length of service.
The determination to cease operations is a prerogative of management which the State does
not usually interfere with, as no business or undertaking must be required to continue operating
simply because it has to maintain its workers in employment, and such act would be tantamount
to a taking of property without due process of law. As long as the companys exercise of the
same is in good faith to advance its interest and not for the purpose of circumventing the rights
of employees under the
law or a valid agreement, such exercise will be upheld. Clearly then, the right to close an
establishment or undertaking may be justified on grounds other than business losses but it
cannot be an unbridled prerogative to suit the whims of the employer.
Under Article 283 of the Labor Code, three requirements are necessary for a valid cessation of
business operations, namely:
(1) service of a written notice to the employees and to the DOLE at least one (1) month before
the intended date thereof;
(2) the cessation must be bona fide in character; and
(3) payment to the employees of termination pay amounting to at least one half (1/2) month pay
for every year of service, or one (1) month pay, whichever is higher.
M.Y. San complied with the said requirements.
The ultimate test of the validity of closure or cessation of establishment or undertaking is that it
must be bona fide in character. The burden falls upon the employer. M.Y. San in good faith
complied with the requirements for closure; sold and conveyed all its assets to Monde for
valuable consideration;and there were no previous labor problems.

Independent Union v Hon. Torres-Bautista

Facts:

JISSCOR was a company engaged in the iron and steel sheet industry. Within the
company, there were two labor unions that were emerging the JISSCOR Independent
Union (JIU) and Samahan ng Manggagawang JISSCOR (SMJ). There was a scheduled
election to vote which union would become the primary labor agent of the employees
during bargaining agreements. But instead of an election on the scheduled date of
election, a pre-election conference happened. In that conference, the employer and the
two unions agreed that the election will be set on a later date and that the labor unions
waive the mandatory five days of posting such date. Election day came and the results
went in favor of SMJ.

JIU registered a protest in the minutes of the election, objecting to the use of visors, etc.
They later on filed a formal complaint with the DOLE NCR stating that the election was
done disorderly, and that SMJ committed acts which were unfair like the usage of visors
and emblems with texts urging workers to vote for them. The Med-Arbiter of DOLE
declared the election void. SMJ appealed the decision to the DOLE Secretary.
The DOLE Secretary set aside the decision of the Med-Arbiter. They ordered that SMJ
is the sole authorized and exclusive bargaining agent of all the rank and file employees
of JISSCOR.

JIU filed a petition for certiorari with the SC to annul the DOLE Secretarys decision.

Issue:

Was there a violation against JIUs rights which SMJ and the company committed?

Held:

None. Section 3, Rule VI, Book V of the Omnibus Rules implementing the Labor Code
provides that the grounds of a protest may be filed on the spot or in writing with the
representation officer and shall be contained in the minutes of the proceedings. Protests
not so raised are deemed waived.

The minutes of the certification election show, however, that JIU only protested against
the use of emblem, visor, pin. Hence, other "protests not so raised are deemed waived.
There is also no merit in the petitioner's contention that the non-posting of the notice of
the certification election as prescribed by Section 1, Rule VI, Book V of the Onmibus
Rules Implementing the labor Code misled and confused the workers regarding the
mechanics of the election. The petitioner is estopped from raising that issue for it signed
an agreement with the private respondent to waive the mandatory five (5) days posting
of election notices. The results of the certification election belie the petitioner's
allegation that the workers were misinformed about the election for the records show
that out of 104 eligible voters, 99 were able to cast their votes and only 3 were spoiled
ballots.

On the alleged use of sunvisors, pins, emblems and the posting of a huge streamer, the
Undersecretary found nothing in the records that shows that the alleged wearing of
sunvisors and pins, the posting of huge streamers, as well as the alleged escorting of
voters by SMJ-ALU have unduly pressured, influenced, vitiated, or in any manner
affected the choice of the workers of their bargaining agent.

The decision of the DOLE Secretary was affirmed.

Phil Education Co. v Union of Phil. Education Employees-Cabigting
Facts:
1. Ernesto Carpio and other employees of the company, members of the Union of
Philippine Education Employees (NLU) joined a strike staged on January 16, 1953. The
Industrial Court ordered the reinstatement of the strikers, including Carpio.
2. The company, however, opposed the reinstatement of Carpio for the reason that a
criminal complaint had been filed against him in the Municipal Court of Manila for theft
of magazines allegedly belonging to the company but Carpio was acquitted on the
ground of reasonable doubt.
3.The Industrial Court agreed with the finding of the Court of First Instance that the
offense had not been proven beyond reasonable doubt and held that Carpio's acquittal
entitled him to reinstatement, though without backpay.
Issue:
whether the acquittal of an employee, especially on the ground of reasonable doubt, in
a criminal case for theft involving articles and merchandise belonging to his employer,
entitles said employee to reinstatement.
Held:
The relation of employer and employee, especially where the employee has access to
the employer's property in the form of articles and merchandise for sale, necessarily
involves trust and confidence.
If said merchandise are lost and said loss is reasonably attributed to said employee,
and he is charged with theft, even if he is acquitted of the charge on reasonable doubt,
when the employer has lost its confidence in him, it would be highly unfair to require
said employer to continue employing him or to reinstate him, for in that case the former
might find it necessary for its protection to employ another person to watch and keep an
eye on him.
In the present case, Carpio was refused reinstatement not because of any union
affiliation or activity or because the company has been guilty of any unfair labor
practice. As already stated, Carpio was convicted in the Municipal Court and although
he was acquitted on reasonable doubt in the Court of First Instance, the company had
ample reason to distrust him. Under the circumstances, we cannot in conscience
require the company to reemploy or reinstate him.

Reyes v Maxim Tea House-Carlos

ARIEL A. TRES REYES vs. MAXIMS TEA HOUSE and JOCELYN POON
Facts:
Respondent Maxims Tea House (hereinafter Maxims for brevity) had employed
Ariel Tres Reyes as a driver since October 1995. He was assigned to its M.H. del Pilar
Street, Ermita, Manila branch. His working hours were from 5:00 P.M. to 3:00 A.M., and
among his duties was to fetch and bring to their respective homes the employees of
Maxims after the restaurant closed for the day.
In the wee hours of the morning of September 27, 1997, petitioner was driving
and was sent to fetch some employees of Savannah Moon, a ballroom dancing
establishment in Libis, Quezon City. Petitioner complied and took his usual route along
Julia Vargas Street in Pasig City. He was headed towards Meralco Avenue at a cruising
speed of 50 to 60 kilometers per hour, when he noticed a ten-wheeler truck coming his
way at full speed despite the fact that the latters lane had a red signal light on. Petitioner
maneuvered to avoid a collision, but nonetheless the van he was driving struck the
truck. As a result, petitioner and seven of his passengers sustained physical injuries and
both vehicles were damaged.
On October 15, 1997, the management of Maxims required petitioner to submit,
within forty-eight hours, a written explanation as to what happened that early morning of
September 27, 1997. He complied but his employer found his explanation unsatisfactory
and as a result he was preventively suspended for thirty (30) days, effective October 20,
1997. On November 19, 1997, Maxims terminated petitioner for cause. Feeling that the
vehicular accident was neither a just nor a valid cause for the severance of his
employment, petitioner filed a complaint for illegal dismissal in the NLRC.
Labor Arbiter found that petitioner was grossly negligent in failing to avoid the
collision. But, NLRC reversed the decision of the Labor Arbiter on the ground that there
was no negligence on petitioners part. They ask for the reinstatement of the petitioner.
Respondents then filed a special civil action for certiorari with the CA. It was
alleged that the NLRC committed a grave abuse of discretion amounting to want or
excess of jurisdiction in: (a) giving due course to petitioners Motion for Partial
Reconsideration notwithstanding that it was a prohibited pleading under Sec. 17 (now
Sec. 19), Rule V of the NLRC Rules of Procedure and despite want of showing that it
was seasonably filed; and (b) for substituting its own findings to the factual findings of
the Labor Arbiter.
CA decided in favor of the employer.

Issue:
Whether petitioners dismissal from employment valid and legal.

Held: NO
Based on the police traffic accident investigation report, we are convinced that
the accident was the fault of the ten-wheeler trucks driver. On seeing the signal light
change to red, this driver stepped on his brake, not just once but three times, but his
truck could not stop. Since the truck was on the wrong lane, petitioners van, which was
in its proper lane with the green light, smashed into the out-of-control truck. This
episode led to petitioners dismissal which, in our view, is unjustified.
 Under the Labor Code, gross negligence is a valid ground for an employer to
terminate an employee. Gross negligence is negligence characterized by want of even
slight care, acting or omitting to act in a situation where there is a duty to act, not
inadvertently but willfully and intentionally with a conscious indifference to
consequences insofar as other persons may be affected. In this case, however, there is
no substantial basis to support a finding that petitioner committed gross negligence.
In sustaining the Labor Arbiters finding that petitioner was grossly negligent, the
appellate court stressed that the cited episode was the second vehicular accident
involving petitioner, and as such it may clearly reflect against [his] attitudinal character
as a driver. We note, however, that the Commission found that in the first vehicular
accident involving petitioner he was the victim of the reckless and negligent act of a
fellow driver. We agree with the NLRC that an imputation of habitual negligence cannot
be drawn against petitioner, since the earlier accident was not of his own making.
Petition is granted.

JGB Associates, Inc. v NLRC-Chilagan

Civil Service Commission v Arandia-Dicang

Philippine Sheet Metal Workers Union v. CIR (COURT OF INDUSTRIAL RELATIONS)

-Dino
FACTS:
An industrial dispute between the respondent company (a corporation
engaged in the manufacture of tin plates, aluminum sheets, etc.) and its laborers some
of whom belong to the Philippine Sheet Metal Workers' Union (CLO) and some to the
Liberal Labor Union. The dispute was over certain demands made upon the company
by the laborers, one of the demands being for the recall of eleven workers who had
been laid off (Temporarily taken back on certain conditions pending final determination
of the controversy, these eleven workers were in the end ordered retained in the
decision handed down by the court on February 1947)
As a separate incident, the company, on February 1947, filed a motion
asking for authority to lay off at least 15 workers in its department on the ground that the
installation and operation of nine new labor-saving machines in said department had
rendered the services of the said workers unnecessary.
The Philippine Sheet Metal Workers' Union (CLO) opposed the motion,
alleging that there was more than sufficient work in the company and further allege that
the company had hired without the authority of the courts some ten new laborers
pending resolution of the principal case, it in turn asked that the company be declared
guilty of contempt of court.
 About a year later, after due hearing and investigation, rendered an order
(February 1948) granting the company's motion to lay off 15 workers and denied the
petition to have the company declared in contempt of court.

RULING:
It appearing that there has been fair hearing and that there is ample
evidence to support the conclusions of fact of the lower court, no grounds for interfering
with those conclusions. And these make it clear that there was real justification for
reducing the number of workers in respondent company's factory, such a measure
having been made necessary by the introduction of machinery in the manufacture of its
products, and that the company cannot be charged with discrimination in recommending
the dismissal of the fifteen laborers named in the above list since their selection was
made by a committee composed of both officers and employees who took no account of
the laborers' affiliation to the unions and only considered their proven record.
There can be no question as to the right of the manufacturer to use new
labor-saying devices with a view to effecting more economy and efficiency in its method
of production.
The right to reduce personnel should, of course, not be abused. It should
not be made a pretext for easing out laborers on account of their union activities. But
neither should it be denied when it is shows that they are not discharging their duties in
a manner consistent with good discipline and the efficient operation of an industrial
enterprise.
The petitioner contends that the order complained of is contrary to the
pronouncement made by the lower court in its decision in the main case where it
disapproved of the dismissal of eleven workers (with whom the management is
displeased due to their union activities). It appears that the pronouncement was made
upon a distinct set of facts. In ordering the reinstatement of the eleven laborers, such
laborers are to be retained only when there is evidence of sufficient weight to convince
the Court that their conduct is not satisfactory.
The Court of Industrial Relations has neither exceeded its jurisdiction nor
committed grave abuse of discretion in rendering the order complained of. The petition
for certiorari is, therefore, denied, but without costs against the petitioner
Esguerra v. Valle Verde Country Club Inc. and Ernesto Villaluna-Donato
April 1, 1978: Valle Verde hired Esguerra as Head Food Checker.
1999: Esguerra was promoted to Cost Control Supervisor.
January 15, 2000: the Couples for Christ held a seminar at the country club.
Esguerra was tasked to oversee the seminar held in the 2 function rooms the Ballroom
and the Tanay Room. The arrangement was that the food shall be served in the form of
pre-paid buffet, while the drinks shall be paid in a pay as you order basis.

The Valle Verde Management found out the following day:

that only the proceeds from the Tanay Room had been remitted to the accounting
department.
There were also unauthorized charges of food on the account of Judge Rodolfo
Bonifacio, one of the participants. To resolve the issue, Valle Verde conducted an
investigation; the employees who were assigned in the two function rooms were
summoned and made to explain, in writing.

March 6, 2000: Valle Verde sent a memorandum to Esguerra.

requiring her to show cause as to why no disciplinary action shouldbe taken against her
for the non-remittance of the Ballrooms sales. Esguerra was placed under preventive
suspension with pay, pending investigation.

Esguerras Contention:
Esguerra denied having committed any misappropriation, that it had been her daughter
(who was assigned as a food checker) who lost the money.
To settleEsguerra paid the unaccounted amount as soon as her daughter informed her
about it.
Esguerra also explained the unauthorized charging of food on Judge Bonifacios
account. She alleged that Judge Bonifacio took pity on her and told her to take home
some food and to charge it on his account.

Valle Verde found Esguerras explanation unsatisfactory and, on July 26, 2000, issued a
second memorandum terminating Esguerras employment

Esguerra filed a complaint for illegal dismissal. In April 5, 2002, the Labor Arbiter
dismissed the complaint for lack of merit. Esguerra appealed the case to the NLRC. In
its December 27, 2002 decision, the NLRC affirmed with modification the ruling of the
Labor Arbiter.
Esguerra filed a partial motion for reconsideration, while Valle Verde filed its own motion
for reconsideration.The NLRC denied Esguerra motion, but granted Valle Verde motion.
Thus, it set aside its December 27, 2002 decision and affirmed the April 5, 2002
decision of the labor arbiter.

Aggrieved, Esguerra elevated her case to the CA via a Rule 65 petition for certiorari. In
its February 7, 2006 decision, the CA denied Esguerra petition for certiorari.

Esguerra filed the present petition after the CA denied her motion for reconsideration.

Petition:
Esguerra argues that the appellate court erred in ruling that she had been validly
dismissed on the ground of loss of trust and confidence.
She alleges that she was only a regular employee and did not occupy a supervisory
position vested with trust and confidence.
She also questions the manner of dismissal since Valle Verde failed to comply with
procedural requirements.

Issue:
Whether or not intention to terminate should be included in the notice of
informing of charges against an employee.
Whether or not Cost Control Supervisor can be dismissed on the ground of loss
of trust and confidence.

Held:
"Under the Labor Code, the requirements for the lawful dismissal of an employee are
two-fold[:] the substantive and the procedural aspects. Not only must the dismissal be
for a just or authorized cause, the rudimentary requirements of due process notice
and hearing must, likewise, be observed x x x. Without the concurrence of the two,
the termination would x x x be illegal[;] employment is a property right of which one
cannot be deprived of without due process."
The existence of an actual, formal "trial-type" hearing, although preferred, is not
absolutely necessary to satisfy the employee's right to be heard.
Esguerra occupied a position of trust and confidence

We now dwell on the substantive aspect of Esguerras dismissal. We have held that
there are two (2) classes of positions of trust the first class consists of managerial
employees, or those vested with the power to lay down management policies; and the
second class consists of cashiers, auditors, property custodians or those who, in the
normal and routine exercise of their functions, regularly handle significant amounts of
money or property.

Esguerra held the position of Cost Control Supervisor and had the duty to remit to the
accounting department the cash sales proceeds from every transaction she was
assigned to. This is not a routine task that a regular employee may perform; it is related
to the handling of business expenditures or finances. For this reason, Esguerra
occupies a position of trust and confidence a position enumerated in the second class
of positions of trust. Any breach of the trust imposed upon her can be a valid cause for
dismissal.

In Jardine Davies, Inc. v. National Labor Relations Commission, we held that loss of
confidence as a just cause for termination of employment can be invoked when an
employee holds a position of responsibility, trust and confidence. In order to constitute a
just cause for dismissal, the act complained of must be related to the performance of
the duties of the dismissed employee and must show that he or she is unfit to continue
working for the employer for violation of the trust reposed in him or her.

Wiltshire File Co., Inc. v NLRC-Dulnuan

Vicente T. Ong was the Sales Manager of Wiltshire File Co., Inc. ("Wiltshire")
from 16 March 1981 up to 18 June 1985. Upon his return after a business trip abroad,
he was informed by the President of Wiltshire that his services was being terminated.
When private respondent again tried to speak with the President of Wiltshire, the
company's security guard handed him a letter which formally informed him that his
services were being terminated upon the ground of redundancy.
Ong then filed before the Labor Arbiter a complaint for illegal dismissal alleging
that his position could not possibly be redundant because nobody (save himself) in the
company was then performing the same duties. In its answer, petitioner company
alleged that the termination of respondent's services was a cost-cutting measure: that in
December 1984, the company had experienced an unusually low volume of orders: and
that it was in fact forced to rotate its employees in order to save the company. Despite
the rotation of employees, petitioner alleged; it continued to experience financial losses
and private respondent's position, Sales Manager of the company, became redundant.
On 2 December 1986, during the proceedings before the Labor Arbiter, Wiltshire
notified the Minsitry of Labor it will close permanently due to substantial business
losses.
In a decision dated 11 March 1987, the Labor Arbiter declared the termination of private
respondent's services illegal and ordered Wiltshire to pay Ong back wages, unpaid
salaries etc. On appeal by Wiltshire, the National Labor Relations Commission
("NLRC") affirmed in toto on 9 February 1988 the decision of the Labor Arbiter.
ISSUE: WON Ong was illegally dismissed.

HELD:
NO. the Court has satisfied itself that indeed petitioner had serious financial difficulties
before, during and after the termination of the services since the companys audited
financial reports shows plenty of deficits. Most importantly, Wiltshire finally closed its
doors and terminated all operations in the Philippines on January 1987, barely two (2)
years after the termination of Ongs employment.

Turning to the legality of the termination of private respondent's employment, the

SC is unable to sustain public respondent NLRC's holding that private respondent's
dismissal was not justified by redundancy and hence illegal. In the first place, it was
noted that while the letter informing private respondent of the termination of his services
used the word "redundant", that letter also referred to the company having "incur[red]
financial losses which [in] fact has compelled [it] to resort to retrenchment to prevent
further losses". Thus, what the letter was in effect saying was that because of financial
losses, retrenchment was necessary, which retrenchment in turn resulted in the
redundancy of private respondent's position.

In the second place, redundancy in an employer's personnel force does not

necessarily or even ordinarily refers to duplication of work. That no other person was
holding the same position that private respondent held prior to the termination of his
services, does not show that his position had not become redundant. Redundancy, for
purposes of our Labor Code, exists where the services of an employee are in excess of
what is reasonably demanded by the actual requirements of the enterprise. Succinctly
put, a position is redundant where it is superfluous, and superfluity of a position or
positions may be the outcome of a number of factors, such as overhiring of workers,
decreased volume of business, or dropping of a particular product line or service activity
previously manufactured or undertaken by the enterprise.
The employer has no legal obligation to keep in its payroll more employees than
are necessarily for the operation of its business.
In the third place, Wiltshire, in view of the contraction of its volume of sales and in
order to cut down its operating expenses, effected some changes in its organization by
abolishing some positions and thereby effecting a reduction of its personnel. Thus, the
position of Sales Manager was abolished and the duties previously discharged by the
Sales Manager simply added to the duties of the General Manager, to whom the Sales
Manager used to report.
Ong cannot insist on the retention of his position upon the ground that he had not
contributed to the financial problems of Wiltshire. The characterization of private
respondent's services as no longer necessary or sustainable, and therefore properly
terminable, was an exercise of business judgment on the part of petitioner company.
The wisdom or soundness of such characterization or decision was not subject to
discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course,
as violation of law or merely arbitrary and malicious action is not shown. It should also
be noted that the position held by private respondent, Sales Manager, was clearly
managerial in character.
The determination of the continuing necessity of a particular officer or position in
a business corporation is management's prerogative, and the courts will not interfere
with the exercise of such so long as no abuse of discretion or merely arbitrary or
malicious action on the part of management is shown.

Atlantic Gulf and Pacific Company of Manila, Inc. V nlrc-Flora

FACTS:
Atlantic Gulf and Pacific Company of Manila, Inc. (AG&P) is a corporation
engaged in general construction work. In the 1980s, the construction industry
experienced a major slump. In 1987, the company reportedly incurred huge operating
losses of P134.8 million and net losses of P35.42 million. To save itself, the company
implemented a redundancy program in 1988 where 177 employees occupying rank and
file, managerial and staff positions were separated from employment. Among those who
were terminated are 3 of the companys employees and all members of the AG&P
United Rank and File Association (the certified labor union). The terminated employees
received full benefits due to them under the Labor Code, and signed releases indicating
their conformity with AG&Ps redundancy program.

After a year, the employees charged AG&P with unfair labor practice and illegal
dismissal. They contended that the redundancy program was actually a union-busting
scheme of management, aimed at removing union officers who had declared a strike.

In this present case, the issues raised were the same issues posed in an earlier
case involving 36, employees of AG&P. The earlier case stems from the same
redundancy program implemented by AG&P in 1988. In the present case, the NLRC
decided that the redundancy program was invalid. However, the Supreme Court said
that the NLRC should have reconsidered its Decision of the present case after the SC
promulgated its Decision regarding the earlier case.

ISSUE: Whether the redundancy program is valid.

RULING:
Yes. the redundancy program is valid. In the earlier case, the SC ruled that
the redundancy program was valid because the company losses were duly established
by its financial statements. The additional evidence presented confirmed AG&Ps
allegation that the losses expected by the company were substantial and reasonably
imminent to justify the layoff of the employees.

The ruling of the SC in the earlier case must be applied to the present case. The
redundancy program is valid because the losses or abrupt down fall in income which
AG&P wanted to abate by resorting to the reduction in the number of employees was
imminent and real. Indeed, the records show that aside from its redundancy program,
AG&P had to resort to other cost-cutting measures in order to stave off impending
losses. While it is true that the company rehired or reemployed some of the dismissed
workers, it has been shown that such action was made only as company projects
became available and that this was done in pursuance of the companys policy of giving
preference to its former workers in the hiring of project employees. The rehiring or
reemployment does not negate the imminence to losses, which prompted private
respondent to retrench.

Unilever v Rivera -Follante

FACTS:
Unilever is a company engaged in the production, manufacture, sale, and distribution of
various food, home and personal care products, while Rivera was employed as its Area
Activation Executive for Area South in the cities of Cotabato and Davao. She was
primarily tasked with managing the sales, distribution and promotional activities in her
area and supervising Ventureslink, a third party service provider for the companys
activation projects. Unilever enforces a strict policy that every trade activity must be
accompanied by a Trade Development Program and that the allocated budget for a
specific activity must be used for such activity only.
Sometime in 2007, Unilevers internal auditor conducted a random audit and found out
that there were fictitious billings and fabricated receipts supposedly from Ventureslink
amounting to 11,200,000.00. It was also discovered that some funds were diverted
from the original intended projects. Ventureslink reported that the fund deviations were
upon the instruction of Rivera.
On July 16, 2007, Unilever issued a show-cause notice to Rivera asking her to explain
the following charges, to wit: a) Conversion and Misappropriation of Resources; b)
Breach of Fiduciary Trust; c) Policy Breaches; and d) Integrity Issues.
Responding through an email, dated July 16, 2007, Rivera admitted the fund diversions,
but explained that such actions were mere resourceful utilization of budget because of
the difficulty of procuring funds from the head office. She insisted that the diverted funds
were all utilized in the companys promotional ventures in her area of coverage.
Through a letter, dated August 23, 2007, Unilever found Rivera guilty of serious breach
of the companys Code of Business Principles compelling it to sever their professional
relations. In a letter, dated September 20, 2007, Rivera asked for reconsideration and
requested Unilever to allow her to receive retirement benefits having served the
company for fourteen (14) years already. Unilever denied her request, reasoning that
the forfeiture of retirement benefits was a legal consequence of her dismissal from work.
On October 19, 2007, Rivera filed a complaint for Illegal Dismissal and other monetary
claims against Unilever.
On April 28, 2008, the Labor Arbiter dismissed her complaint for lack of merit and
denied her claim for retirement benefits, but ordered Unilever to pay a proportionate
13th month pay and the corresponding cash equivalent of her unused leave credits.

On appeal, the NLRC partially granted Riveras prayer. In its Resolution, the NLRC held
that although she was legally dismissed from the service for a just cause, Unilever was
guilty of violating the twin notice requirement in labor cases. Thus, Unilever was ordered
to pay her 30,000.00 as nominal damages, retirement benefits and separation pay.

Unilever asked for a reconsideration of the NLRC decision. NLRC modified its earlier
ruling by deleting the award of separation pay and reducing the nominal damages from
30,000.00 to 20,000.00, but affirmed the award of retirement benefits to Rivera.

Unsatisfied with the ruling, Unilever elevated the case to CA-Cagayan de Oro City via a
petition for certiorari under Rule 65 of the Rules of Court.the CA affirmed with
modification the NLRC resolution. Justifying the deletion of the award of retirement
benefits, the CA explained that, indeed, under Unilevers Retirement Plan, a validly
dismissed employee cannot claim any retirement benefit regardless of the length of
service. Thus, Rivera is not entitled to any retirement benefit. It stated, however, that
there was no proof that she personally gained any pecuniary benefit from her
infractions, as her instructions were aimed at increasing the sales efficiency of the
company and competing in the local market. For said reason, the CA awarded
separation pay in her favor as a measure of social justice.

ISSUE:
Whether the grant of nominal damages in favor of Rivera for its alleged non-observance
of the requirements of procedural due process. It insists that she was given ample
opportunity "to explain her side, interpose an intelligent defense and adduce evidence
on her behalf
HELD:
In this case, Unilever was not direct and specific in its first notice to Rivera. The words it
used were couched in general terms and were in no way informative of the charges
against her that may result in her dismissal from employment. Evidently, there was a
violation of her right to statutory due process warranting the payment of indemnity in the
form of nominal damages. Hence, the Court finds no compelling reason to reverse the
award of nominal damages in her favor. The Court, however, deems it proper to
increase the award of nominal damages from 20,000.00 to 30,000.00, as initially
awarded by the NLRC, in accordance with existing jurisprudence.

Perez v. PTTC-Garduce
(On the meaning of ample opportunity to be heard)

Facts:
Felix Perez and Amante Doria (the petitioners) were employed as shipping clerk
and supervisor in Philippine Telegraph and Telephone Company (the respondent),
Shipping Section, Materials Management Group.

An unsigned letter tipped the company of anomalous transactions at the Shipping

Section. Because of this, PTTC (or PT&T) formed a special audit team to investigate.
The team discovered the following:
1. that the shipping section jacked up (raised) the freight costs; and
2. that the duplicates of the shipping documents allegedly showed traces of
tampering, alteration and superimposition.

Perez and Doria were placed on a 30-day preventive suspension for their alleged
involvement. Their suspension was later on extended for 15 days, twice (total of 30
days extension). And on October 29, 1993, the company issued a memorandum
dismissing them for having falsified company documents.

On November 9, 1993, petitioners filed a complaint for illegal suspension and

illegal dismissal, alleging that they were dismissed on November 8, 1993, the date they
received the above-mentioned memorandum.

Labor Arbiter: The 2 extensions of suspension and their subsequent dismissal were all
illegal. PT&T was ordered to pay their salaries during the 30-day illegal suspension, as
well as to reinstate them with backwages and 13th month pay.

NLRC: Reversed the decision of the Labor Arbiter. It ruled that (a) Perez and Doria
were dismissed for just cause; (b) that they were accorded due process; and (c) that
they were illegally suspended for 15 days only (without stating the reason for the
reduction of the period of petitioners' illegal suspension).

CA: Affirmed the NLRC's ruling that (a) there was illegal suspension for 15 days; and
(b) there was just cause. There was sufficient basis for the company to lose their
confidence in Perez and Doria. But the CA ruled that they were dismissed without due
process.

Perez and Doria then elevated the case to the SC, seeking reversal of the CA's
decision and contending the following:
(a) that there was no just cause for their dismissal;
(b) that they were not accorded due process; and
(c) that they were illegally suspended for 30 days.

Issues:
1. Did PT&T prove just cause (loss of confidence) for the dismissal?
2. Was there due process afforded to the employees?
3. Is a formal hearing mandatory in dismissal cases (so that it could be said
that due process was properly observed)? --this is the issue related to the citation
in the DO
4. Were the employees illegally suspended for 30 days?
5. Should the employees be reinstated?

SC's Decision: Ruled in favor of Perez and Doria. The CA's decision was set aside.
The LA's decision was affirmed with modification: Perez and Doria should be paid
separation pay in lieu of reinstatement.

SC's ruling on the issues:

1. No, the employer failed to prove just cause.

PT&T argued that there was sufficient basis for loss of confidence. Perez and
Doaria tampered with the shipping documents which the company considers as
important for being the basis of its liability to a cargo forwarder.

The SC ruled that the evidence was insufficient to clearly and convincingly
establish the facts from which the loss of confidence resulted. It further said:
Other than their bare allegations and the fact that such documents came into
petitioners hands at some point, respondents should have provided evidence of
petitioners functions, the extent of their duties, the procedure in the handling and
approval of shipping requests and the fact that no personnel other than petitioners were
involved. There was, therefore, a patent paucity (scarcity) of proof connecting
petitioners to the alleged tampering of shipping documents.
The alterations on the shipping documents could not reasonably be attributed to
petitioners because it was never proven that petitioners alone had control of or access
to these documents. Unless duly proved or sufficiently substantiated otherwise,
impartial tribunals should not rely only on the statement of the employer that it has lost
confidence in its employee.

It has been held in General Bank and Tust Co. vs CA that Loss of confidence
should not be simulated. It should not be used as a subterfuge for causes which are
improper, illegal or unjustified. Loss of confidence may not be arbitrarily asserted in the
face of overwhelming evidence to the contrary. It must be genuine, not a mere
afterthought to justify an earlier action taken in bad faith.

2. No, the employer failed to observe due process. It did not comply with the two-notice
rule.

To meet the requirements of due process in the dismissal of an employee, an

employer must furnish the worker with two written notices: (1) a written notice specifying
the grounds for termination and giving to said employee a reasonable opportunity to
explain his side and (2) another written notice indicating that, upon due consideration of
all circumstances, grounds have been established to justify the employer's decision to
dismiss the employee.

In this case, Perez and Doria were neither apprised of the charges against them
nor given a chance to defend themselves. They were simply and arbitrarily separated
from work and served notices of termination.

3. No, there is no need for a hearing or conference.

Perez and Doria contended that due process was not observed in the absence of
a hearing where they could have explained their side and refuted the evidence against
them.

The SC noted a marked difference between the standards of due process as

prescribed in the (a) Labor Code and (b) its implementing rules:
Under the Labor Code (Art 277-b): An employer must provide the employee
ample opportunity to be heard and to defend himself with the assistance of his
representative if he so desires. Under the Omnibus Rules (IRR; Sec 2(d), Rule I, Book
IV): A hearing and conference during which the employee concerned is given the
opportunity to respond to the charge, present his evidence or rebut the evidence
presented against him is required.

(Which one should be followed? Is a hearing mandatory in cases involving

the dismissal of an employee? Can the apparent conflict between the law and its
IRR be reconciled?)

The SC reaffirmed the time-honored doctrine that in case of conflict, the law
prevails over the administrative IRR: The authority to promulgate implementing rules
proceeds from the law itself. To be valid, a rule or regulation must conform to and be
consistent with the provisions of the enabling statute. As such, it cannot amend the law
either by abridging or expanding its scope.

The LC uses the word ample which ordinarily means considerably more than
adequate or sufficient. In this regard, the phrase "ample opportunity to be heard can
be reasonably interpreted as extensive enough to cover actual hearing or conference.

The IRR provision doesn't mean that holding an actual hearing or conference is a
condition sine qua non for compliance with the due process requirement in termination
of employment. A formal pre-termination confrontation between the employer and the
employee is not required.

The SC further held that: To confine the employees right to be heard to a

solitary form narrows down that right. It deprives him of other equally effective forms of
adducing evidence in his defense. Certainly, such an exclusivist and absolutist
interpretation is overly restrictive. The very nature of due process negates any concept
of inflexible procedures universally applicable to every imaginable situation.

The general language used by the Legislature reveals its intent to give some
degree of flexibility or adaptability to meet the peculiarities of a given situation. To
confine it to a single rigid proceeding such as a formal hearing will defeat its spirit.

What the IRR requires is that the due process requirements be observed
substantially, not strictly. While a formal hearing or conference is ideal, it is not an
absolute, mandatory or exclusive avenue of due process.

To be heard does not mean verbal argumentation alone inasmuch as one may
be heard just as effectively through written explanations, submissions or pleadings.
 In sum, the SC wrote down the following guiding principles in connection with the
hearing requirement in dismissal cases:
(a) ample opportunity to be heard means any meaningful opportunity (verbal or
written) given to the employee to answer the charges against him and submit evidence
in support of his defense, whether in a hearing, conference or some other fair, just and
reasonable way.
(b) a formal hearing or conference becomes mandatory only when requested by
the employee in writing or substantial evidentiary disputes exist or a company rule or
practice requires it, or when similar circumstances justify it.
(c) the ample opportunity to be heard standard in the Labor Code prevails over
the hearing or conference requirement in the implementing rules and regulations.

4. Yes, they were illegally suspended for 30 days (pertaining to the two 15-day
extensions).

Suspension for just cause should only be for 30 days, after which the employee
shall either be reinstated or paid his wages during the extended period. In this case,
PT&T failed to submit evidence that they paid the employees during the extensions.

5. The SC ruled that the employees can no longer be reinstated.

Where the dismissal was without just or authorized cause and there was no due
process, Article 279 of the LC mandates that the employee is entitled to reinstatement
without loss of seniority rights and other privileges and full backwages, inclusive of
allowances, and other benefits or their monetary equivalent computed from the time the
compensation was not paid up to the time of actual reinstatement.

But in this case. reinstatement is no longer possible because of the length of time
that has passed from the date of the incident to final resolution. 14 years have
transpired from the time petitioners were wrongfully dismissed. To order reinstatement
will no longer serve any prudent or practical purpose.
Techno Eight Philippines Corporation v NLRC and Denis Amular-Gonzales

FACTS
Technol Eight Philippines Corporation hired Denis Amular, Clarence Ducat and
Rafael Mendoza(lines team leader) and assigned them to Technols Shearing Line. On
April 16, 2002, Mendoza went to Surf City Internet Caf in Balibago, Sta. Rosa, Laguna.
As he was leaving the establishment, Amular and Ducay confronted regarding their
work in the shearing line. The heated argument turned into a fistfight that required the
intervention of the barangay tanods in the area. Upon learning the incident, Technols
management sent to Amular and Ducay a notice of preventive suspension/ notice of
discharge dated May 18, 2002 advising them that their fistfight with Mendoza violated
Section 1-k of Technols Human Resource Department (HRD) Manual. They were given
48 hours to explain why no disciplinary action should be taken against them for the
incident. They were placed under preventive suspension for 30 days (Ducay: May 19,
2002- June 17,2002; Amular: May 21,2002- June 20,2002).
Amular received a notice dated June 18, 2002 informing him that Technol
management will conduct an administrative hearing on June 14, 2002. A day before the
hearing, Amular filed a complaint for illegal suspension/constructive dismissal with
separation pay, backwages, and other several money claims against Technol. However,
Amular failed to attend administrative hearing so Technol sent him a notice of dismissal.
The Labor Arbiter ruled that Amulars preventive suspension and dismissal were
illega because they were only based on written statements. Further, he was also
deprived of the opportunity to present his side and answer the allegations against him.
The NLRC affirmed the Labor Arbiters ruling. It found that Amular was unfairly treated
and subjected to discrimination because he was the only one served with the notice to
explain and placed under preventive suspension; his co-employee Ducay who was also
involved in the incident was not. Technol moved for reconsideration, but the NLRC
denied the motion in a resolution. Technol then sought relief from the CA. The CA
denied the motion and found no grave abuse of discretion on the part of the NLRC in
affirming the Labor Arbiters decision. The appellate court noted that Amular was
dismissed on the ground of serious misconduct, a just cause for employee dismissal
under the Labor Code. The appellate court pointed out that the mauling incident
occurred outside the company premises and after office hours; it did not in any manner
disrupt company operations nor pose a threat to the safety or peace of mind of Technol
workers; neither did it cause substantial prejudice to the company. It explained that
although it was not condoning Amulars misconduct, it found that the penalty of dismissal
imposed by Technol on Amular was too harsh and evidently disproportionate to the act
committed.
Technol again filed a subsequent petition
Technol: Even if the misconduct was committed outside company premises, the
perpetrator can still be disciplined as long as the offense was work-related.

ISSUE:
Whether the CA erred in ruling that Amular was illegally dismissed

HELD:

Yes, the CA misappreciated the true nature of Amulars involvement in the

mauling incident. Although it acknowledged that Amular committed a misconduct, it did
not consider the misconduct as work-related and reflective of Amulars unfitness to
continue working for Technol. The appellate courts benign treatment of Amulars offense
was based largely on its observation that the incident happened outside the company
premises and after working hours; did not cause a disruption of work operations; and
did not result in a hostile environment in the company. Significantly, it did not condone
Amulars infraction, but it considered that Amulars dismissal was a harsh penalty that is
disproportionate with his offense.
The record of the case, however, gives us a different picture. Contrary to the CAs
perception, we find a work-connection in Amular's and Ducays assault on Mendoza. As
the CA itself noted, the underlying reason why Amular and Ducay confronted Mendoza
was to question him about his report to De Leon Technols PCD assistant supervisor
regarding the duos questionable work behavior. The motivation behind the
confrontation, as we see it, was rooted on workplace dynamics as Mendoza, Amular
and Ducay interacted with one another in the performance of their duties.

Under these circumstances, Amular undoubtedly committed a misconduct or exhibited

improper behavior that constituted a valid cause for his dismissal under the law and
jurisprudential standards. The circumstances of his misdeed, to our mind, rendered him
unfit to continue working for Technol. Thus, Amular was not illegaly dismissed.

Due process (in case tanungin):

What we see in the records belie Amulars claim of denial of procedural due
process. He chose not to present his side at the administrative hearing. In fact, he
avoided the investigation into the charges against him by filing his illegal dismissal
complaint ahead of the scheduled investigation. Under these facts, he was given the
opportunity to be heard and he cannot now come to us protesting that he was denied
this opportunity. To belabor a point the Court has repeatedly made in employee
dismissal cases, the essence of due process is simply an opportunity to be heard; it is
the denial of this opportunity that constitutes violation of due process of law .

Autobus Workers Union, et al. v NLRC et al-Lacaden

FACTS:
Petitioner Ricardo E. Escanlar worked with Autobus as a Cutting Machine Operator
since January 8, 1981 with a salary of P162.16 per day. He was the recipient of two (2)
Plaques of Appreciation as Model Employee in 1987 and as Valuable Employee in
1988. He was later elected President of the Autobus Workers Union (AWU), the union
for the rank and file employees.
Production Manager received a report containing the following
1. That in the morning of January 29, 1993, Mr. Andres told the herein complainant,
together with another employee of the company their reassignment to the other section
of the company because they lack manpower; the complainant was then reassigned to
the `Washer Section while the other to the `Painting Section; That despite being told of
the reason for his transfer, Mr. Escanlar questioned his transfer to the `Washer
Section;Mr. Escanlar told Mr. Andres that he (complainant) did not like the way Mr.
Andres chose personnel to go on overtime; That thereafter, herein complainant
answered back by saying `Gago Ka to Mr. Andres; that the latter told the former that
they should talk later at his (Mr. Andres) office but the complainant again called him (Mr.
Andres) `Gago Ka; That at this juncture, Mr. Andres deemed it proper to leave
complainant; that while Mr. Andres was already in the Seam Weld Section of the
company, complainant continued to stare at him without doing his job; that Mr. Andres
decided to ask complainant what his problem was; that herein complainant retorted by
saying: `BAKIT ANONG GUSTO MO, TANG INA MO; Mr. Andres just left him
(complainant). That at about 8:30 a.m. of the same day, while Mr. Andres was on his
way to the canteen, herein complainant approached him (Mr. Andres) asking what he
told the office regarding the incident between them; that Mr. Andres told the
complainant to just ask the management about the matter; that complainant said
`Panapanahon lang yan, panahon mo ngayon;
On February 5, 1993, Engr. Chavez issued a memorandumto petitioner Escanlar
requiring the latter to explain in writing within 48 hours from receipt thereof why no
disciplinary action should be taken against him pursuant to the companys Code of
Discipline, for addressing Reynaldo T. Andres, his supervisor, in profane or obscene
language and for threatening him.
 After the administrative investigation, petitioner Escanlar was served a Notice of
Terminationdated April 19, 1993, for gross misconduct, i.e., uttering unsavory remarks
and threatening his supervisor with physical harm.
Petitioner filed a complaint for illegal dismissal against Autobus. After the
submission by the parties of their respective position papers, the case was deemed
submitted for resolution. Labor Arbiter Melquiades Sol D. Del Rosario rendered a
decision finding the dismissal of petitioner valid,
ISSUE:
1. Whether the act of the employee in calling his supervisor GAGO KA!, BAKIT
ANONG GUSTO MO? TANG INA MO and other taunts are a sufficient ground to
dismiss the employee?
2. Whether the employee was terminated in violation of due process?

HELD:
1. YES, SC held the decision of the labor arbiter wherein Arbitration Branch does not
find any unfair labor practice committed by respondents as an aftermath of
complainants dismissal.
With regard to the issue of illegal dismissal, there is evidence on record that
complainant violated Sec. 6 of Rule No. 28 of the Code of Discipline of respondent
company, which provides:
B. SEKSIYON 6. ASAL AT KILOS
24. Pag-insulto o panghihiya, pagbabanta ng pananakit o pagpapakita ng anumang
sinasadyang di-paggalang sa isang superbisor o sino mang opisyal ng kumpanya.
Takdang Parusa: Suspensiyon hanggang sa pagtitiwalag, ayon sa bigat ng
pagkakasala.
which is considered as an act of gross misconduct and is a valid ground for terminating
an employee pursuant to Article 282 of the Labor Code.
Misconduct is improper or wrong conduct. It is the transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment. The misconduct
must be of such a grave and aggravated character and not merely trivial or unimportant.
The charge of serious misconduct finds ample support in the record. Petitioner failed to
satisfactorily rebut this accusation, his only defense being self-serving denials.
The repeated utterances by petitioner of obscene, insulting or offensive words
against a superior were not only destructive of the morale of his co-employees and a
violation of the company rules and regulations, but also constitute gross misconduct
which is one of the grounds provided for by law to terminate the services of an
employee. His attitude toward his supervisor, Reynaldo T. Andres, amounted to
insubordination and conduct unbecoming of an employee which merited the penalty of
dismissal.
Suffice it to state that an employee may be validly dismissed for violation of a
reasonable company rule or regulation adopted for the conduct of the companys
business. It is the recognized prerogative of the employer to transfer and reassign
employees according to the requirements of its business. For indeed, regulation of
manpower by the company clearly falls within the ambit of management prerogative. A
valid exercise of management prerogative is one which, among others, covers: work
assignment, working methods, time, supervision of workers, transfer of employees,
work supervision, and the discipline, dismissal and recall of workers. Except as provided
for, or limited by special laws, an employer is free to regulate, according to his own
discretion and judgment, all aspects of employment.

2. NO, Finally, petitioner assails the proceedings during the administrative investigation
claiming violation of due process. We are not convinced.
The twin requirements of notice and hearing constitute the essential elements of due
process. Due process of law simply means giving opportunity to be heard before
judgment is rendered. In fact, there is no violation of due process even if no hearing was
conducted, where the party was given a chance to explain his side of the controversy.
What is frowned upon is the denial of the opportunity to be heard.
A perusal of the record reveals that petitioner was duly notified of the charges
against him and given the opportunity to defend himself via a written explanation and
thereafter, to adduce evidence on his behalf during a formal hearing where he was
represented by a counsel of his own choice.
A formal trial-type hearing is not even essential to due process. It is enough that the
parties are given a fair and reasonable opportunity to explain their respective sides of
the controversy and to present supporting evidence on which a fair decision can be
based. This type of hearing is not even mandatory in cases of complaints lodged before
the Labor Arbiter.
Manuel C Felux v Enertech Systems Industries Inc.-Lopez

Zenco Sales, Inc. v. NLRC-Lumasac

Facts:

Anastacio C. Yap filed a complaint for illegal dismissal before the Labor Arbiter after
being dismissed as Branch Manager of Zenco Sales. The Labor Arbiter dismissed the
case because the Internal Audit Report of Zenco Sales sufficiently established
misfeasance for Yaps failure to closely monitor and control the sales transactions of
one salesman Chua and malfeasance because he used the corporation's properties,
equipment, and personnel in connection with his personal business of buy and sell of
used sacks. These acts constituted gross neglect in the performance of duty and
serious misconduct resulting to loss of trust and confidence which, under Article 292 of
the Labor Code, as amended, are grounds to terminate an employment.

On appeal, the NLRC affirmed the decision but awarded separation pay based on social
justice at the rate of one month's salary for every year of service. The separation pay
was given because according to the NLRC, Yaps violations of company policies do not
constitute a depraved act or those reflecting on his moral character and taking into
further account his ten years of unblemished service.

Zenco Sales filed a Motion for Reconsideration but was denied by NLRC. It then filed a
special civil action imputing upon NLRC "patent abuse of discretion amounting to lack of
jurisdiction and/or excess of jurisdiction in modifying the decision . . . of the Labor
Arbiter." It claimed that the separation pay is unwarranted under the given set of facts
and his ten years of service cannot be given any premium to justify the award.

Issue:
Was Yap entitled to separation pay based on social justice?

Held:
No, Yap is not entitled because a separation pay is 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. In the case, Yap was
found guilty of gross misconduct for having used his employer's properties, equipment,
and personnel in connection with his personal business of buy and sale of used sacks
and these acts involve gross dishonesty deliberately done for his personal advantage.

SENTINEL SECURITY AGENCY, INC., vs. NLRC--Macatulad

(Wala namang about insubordination or willful disob/refusal to transfer
)

Facts: The complainants ( Veronico Zambo, Helcias Arroyo, Maximo Ortiz, and Rustico
Andoy ) were employees of Sentinel Security Agency, Inc. They were assigned to
render guard duty at the premises of Philippine American Life Insurance Company (PAL
Insurance) at Jones Avenue, Cebu City.
On December 16, 1993 PAL Insurance sent notice that Sentinel was again awarded the
contract of security services together with a request to replace all the security guards in
the company's offices at the cities of Cebu, Bacolod, Cagayan de Oro, Dipolog and
Ilagan. In compliance therewith, Sentinel issued a Relief and Transfer Order replacing
the complainants as guards of PAL Insurance and for them to be re-assigned to other
clients.
When the complainants reported, they were never given new assignments but instead
they were told you were replaced because you are already old. Complainants then
filed the illegal dismissal cases and prayed for payment of separation pay and other
labor standard benefits.
PAL Insurance and Sentinel maintained there was no dismissal on the part of the
complainants, constructive or otherwise, as they were protected by the contract of
security services which allows the recall of security guards from their assigned posts at
the will of either party. PAL Insurance averred further that there was no employer-
employee relationship between it and the complainants. It pointed out that the functions
of the complainants in providing security services to their property were not necessary
and desirable to its usual business or trade.
NLRC Ruling:
The Commission ruled that the complainants were constructively dismissed. The
complainants were told by the Sentinel that they lost their assignment because they
were already old, and not because they had committed any infraction or irregularity. The
NLRC applied RA 7641. It noted that the security guards were in the service of Sentinel
for nearly 20 years. The new Retirement Law, giving retirement benefits of month pay
per year of service to an employee upon reaching retirement age to be paid by the
employer; in this case it is at quite a sizeable amount and in not so long due time as
some of the complainants were described as already old.
NLRC ruled that they were entitled to (1) back wages for 1 year from the time of their
dismissal, payable by both the PAL Insurance and Sentinel, and (2) separation pay one-
half month pay for every year of service payable only by the Sentinel. Reinstatement
was not granted due to the resulting antipathy and resentment among the parties.
Issues: (1) whether the complainants were illegally dismissed, and (2) whether the PAL
Insurance is jointly and severally liable for their 13th month and service incentive leave
pays.
Held: (1) Yes, the security guards were illegally dismissed, but not for the reasons given
by NLRC. The relief and transfer order was akin to placing the security guards on
temporary off-detail. Being sidelined temporarily is a standard stipulation in employment
contracts, as the availability of assignment for security guards is primarily dependent on
the contracts entered into by the agency with third parties. Most contracts for security
services, as in this case, stipulate that the client may request the replacement of the
guards assigned to it. In security agency parlance, being placed off detail or on floating
status means waiting to be posted.This circumstance is not equivalent to dismissal, so
long as such status does not continue beyond reasonable time.
In this case, transfer of the complainants implied more than a relief from duty to give
them time to rest. Rather, their transfer should connote a reshuffling or exchange of
their posts, or their reassignment to other posts, such that no security guard would be
without an assignment. However, this legally recognized concept of transfer was not
implemented. The agency hired new security guards to replace the complainants,
resulting in a lack of posts to which the complainants could have been reassigned.Thus,
it refused to reassign the complainants and told them that they already too old to be
posted anywhere.
Sentinel also explains that under the law, they are given a period of not more than 6
months to retain the complainants on floating status; hence, the complaint for illegal
dismissal is premature.
This contention is incorrect. A floating status requires the dire exigency of the
employers bona fide suspension of operation, business or undertaking. In security
services, this happens when the clients that do not renew their contracts with a security
agency are more than those that do and the new ones that the agency gets. However,
in the case at bar, the Sentinel was awarded a new contract by the Client., PAL
Insurance. There was no surplus of security guards over available assignments. If there
were, it was because the Sentinel hired new security guards. Thus, there was no
suspension of operation, business or undertaking, bona fide or not, that would have
justified placing the complainants off-detail and making them wait for a period of six
months. If indeed they were merely transferred, there would have been no need to
make them wait for six months.
The only logical conclusion from the foregoing discussion is that the Sentinel illegally
dismissed the security guards. Hence, they are entitled to reinstatement and
backwages.
(2) Yes. PAL Insurance did not, as it could not, illegally dismiss the complainants. Thus,
it should not be held liable for separation pay and backwages. But even if the it is not
responsible for the illegal dismissal of the complainants, it is jointly and severally liable
with the Agency for the complainants service incentive leave pay. As an indirect
employer, it is jointly and severally liable with the contractor for the workers wages, in
the same manner and extent that it is liable to its direct employees.
The award of the thirteenth-month pay is deleted in view of the evidence presented that
such claim has already been paid to the guards.
Westin Philippine Plaza Hotel v NLRC-Madrid
FACTS: Len Rodriguez (Rodriguez) was hired as pest controller and was later
transferred to various positions like room attendant, bellman, and doorman. He was
continuously employed by Westin Philippine Plaza Hotel (Westin) from July 1, 1977 until
his dismissal on February 16, 1993.
On December 28, 1992, Rodriguez received a memorandum from the
management transferring him from doorman to linen room attendant in the
Housekeeping Department effective December 29, 1992. Instead of accepting his new
assignment, Rodriguez went on vacation leave from December 29, 1992, to January 16,
1993. Ms. Merceditas Santos, Westin's director for human resources development,
clarified that Rodriguez's transfer is merely a lateral movement. She explained that
management believed that Rodriguez was no longer suited to be in a guest-contact
position, but there was no demotion in rank or pay.
When Rodriguez reported back to work, he still did not assume his post at the
linen room. Notwithstanding several reminders from the personnel department and even
his union, Rodriguez refused to report to his new work station.
On February 11, 1993, Rodriguez was served with a memorandum asking him to
explain in writing why no disciplinary action should be taken against him for
insubordination. In his reply Rodriguez, however, merely questioned the validity of his
transfer without giving the required explanation. On February 16, 1993, Westin
terminated Rodriguez's employment on the ground of insubordination. Feeling
aggrieved, Rodriguez filed a complaint for illegal dismissal against Westin. The labor
arbiter declared that the dismissal was legal. On appeal, NLRC reversed the judgment
of the labor arbiter.
ISSUE: Whether Rodriguez was guilty of insubordination or not. YES
HELD: Under Article 282 (a) of the Labor Code, as amended, an employer may
terminate an employment for serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or representative in connection with his
work. But disobedience to be a just cause for dismissal envisages the concurrence of at
least two (2) requisites: (a) the employee's assailed conduct must have been willful or
intentional, the willfulness being characterized by a wrongful and perverse attitude; and,
(b) the order violated must have been reasonable, lawful, made known to the employee
and must pertain to the duties which he has been engaged to discharge.
The willfulness of Rodriguez's insubordination was shown by his continued
refusal to report to his new work assignment. Thus, upon receipt of the order of transfer,
Rodriguez simply took an extended vacation leave. Then, when he reported back to
work, he did not discharge his duties as linen room attendant despite repeated
reminders from the personnel office as well as his union. More than that, when he was
asked to explain why no disciplinary action should be taken against him, Rodriguez
merely questioned the transfer order without submitting the required explanation.
 Westin is justified in reassigning Rodriguez to the linen room. Westin's right to
transfer is expressly recognized in the collective bargaining agreement between the
hotel management and the employees union as well as in the hotel employees
handbook. The transfer order was issued in the exercise of Westin's management
prerogative in view of the several negative reports vis-a-vis the performance of
Rodriguez as doorman. It was a lateral movement as the positions of doorman and linen
room attendant are equivalent in rank and compensation. It was a reasonable relocation
from a guest contact area to a non-guest contact area.

Labor et al v. NLRC-Masedman
FACTS:
Labor et al. were employees of Gold City at its Eye Ball Disco located at Tagum,
Davao. In August 19, 1991, they filed a complaint in DOLE in Davao City, charging Gold
City with violations of labor standards laws, specifically for underpayment of the
minimum wage non-payment of 13th month pay for 1991, premiums for holidays and
rest days, holiday pay service incentive leave pay, night shift differential and allowance.
They also filed with the NLRC in Davao City a complaint against Gold City and its
President, Rudy Uy, for illegal dismissal and for the same violations of labor standards
laws.
Days after filing the complaint, the petitioners alleged that Gold City prevented
them from entering their work place; that their time cards were taken off the time card
rack; and that they were advised to resign. They assailed the notice of termination given
to them by Gold City dated September 6, 1991, and denied having abandoned their
work for, as a matter of fact, Labor was on an approved leave August 19-22, 1991 but
was not allowed to return to work after that date. They accused Gold City of unfair labor
practice for illegally dismissing them in retaliation for their having filed a complaint for
labor standards violations against it. They also denied having signed any quitclaim or
compromise settlement.
Gold City asserted that the petitioners were not illegally terminated but had
abandoned their work by not reporting to their place of employment. It further alleged
that as early as June 1991, the petitioners were under investigation for the dishonest
acts for which they were charged with estafa and/or theft in the Office of the Provincial
Prosecutor, and to preempt any action to be taken therein, the petitioners filed the
"baseless and unfounded complaint" with the DOLE for the labor standards violation
and furthermore, abandoned their work to make it appear that they were illegally
dismissed. It also alleged that on September 6, 1991, each of the petitioners was sent a
notice of possible termination due to abandonment or for absence without official leave
or notice for six consecutive days, with a warning that if no explanation is given within
seven days from receipt thereof, they will be terminated, but the petitioners failed to
reply to the notice and did not report for work. It then concluded that the abandonment
justified their dismissal.
On 27 March 1992, the Labor Arbiter rendered his decisions in favor of the
petitioners declaring the dismissal illegal.
Gold City appealed the Labor Arbiter's decision to the NLRC. On September 24,
1992, the NLRC promulgated the challenged decision reversing that of the Labor
Arbiter's and dismissing the petitioners' complaint. It also ruled that there was
abandonment by the petitioners and that Gold City, in terminating them, complied with
the procedural requirements since it gave notice and granted them an opportunity to
explain their absences, which they did not avail of. In ruling that the petitioners were not
illegally dismissed, the NLRC found that just cause existed, viz., their dishonest acts
which do not require proof beyond reasonable doubt.
ISSUE:
Whether there was abandonment by the petitioners.
HELD:
There was none.
To constitute abandonment, two elements must concur: (1) the failure to report
for work or absence without valid or justifiable reason, and (2) a clear intention to sever
the employer-employee relationship, with the second element as the more
determinative factor and being manifested by some overt acts. Mere absence is not
sufficient. It is the employer who has the burden of proof to show a deliberate and
unjustified refusal of the employee to resume his employment without any intention of
returning. Gold City failed to discharge this burden. It did not adduce any proof of some
overt act of the petitioners that clearly and unequivocally show their intention to
abandon their posts. On the contrary, the petitioners lost no time in filing the case for
illegal dismissal against them, taking only four days from the time most of them were
prevented from entering their workplace on August 22, 1991 to the filing of the
complaint on August 26, 1991. They cannot, by any reasoning, be said to have
abandoned their work, for as we have also previously ruled, the filing by an employee of
a complaint for illegal dismissal is proof enough of his desire to return to work, thus
negating the employer's charge of abandonment. Furthermore, petitioners Labor and
Bonita presented proof that during some of those days that they were supposedly on
AWOL (absence without official leave), they were actually on official leave as approved
by no less than Rudy Uy himself. Neither Gold City nor Rudy Uy had disputed this.
It may further be observed that the timing of Gold City's alleged refusal to allow
the petitioners to enter their workplace is highly suspicious. It happened only two days
after the petitioners filed their complaint for labor standards violations with the DOLE.
Mere coincidence? We think not. What it is, though, is evidence that lends credence to
the allegation of the petitioners that they did not abandon their employment as Gold City
asserts but were prevented from going to work. Thus, we cannot agree with the NLRC
when it said that the petitioners "had to jump the gun against the respondents in order to
save their faces from their own wrong doings, dishonest acts" by filing the case for
illegal dismissal against the respondents.
ADDITIONAL; On alleged dishonesty (Baka tanungin ni sir)
On 2 September 1991, one Atty. Rolando Casaway requested that a criminal
action against the petitioners for theft and/or estafa be instituted. In support thereof, he
attached to his letter the affidavits employees where they attested to alleged acts
committed by the petitioners during the period from June to August 1991 which deprived
Eye Ball Disco of certain amounts of money. According to the affiants, the petitioners
would get the claim stubs from customers of Eye Ball Disco that entitle them to one free
drink each, but the petitioners did not surrender these stubs to the cashier and instead
made the customers pay for the drinks; then, later, when other customers ordered
drinks, the petitioners would surrender these stubs to the cashier as "payment" for the
drinks of these other customers and pocket their payment. (It was dismissed; late filed)

Top Form Mfg. Co., Inc. v NLRC-Mayaoyao

FACTS: Private respondent Juliana Malubay began her employment with petitioner Top
Form Manufacturing (Phils.), Incorporated in March, 1979, as Plant Supervisor. She
was initially assigned to supervise a factory line of sixty machine operators. After one
month she was given one more factory line, also with sixty workers, to supervise. in
October, 1980, she was promoted to the position of Over-All Quality Supervisor in the
first shift . As Head Supervisor, she had control and supervision over the entire first shift
consisting of 120 machine operators and some six line-in-charge. She was also
responsible not only for the production and output but also for the quality of products. In
addition to her functions, she was likewise given the task of training newly-hired factory
workers and of supervising the repair group composed of several employees.
On January 10, 1981, a Saturday, private respondent and her co-supervisors were
called to a meeting at the conference room by Dickson Chan, Production Manager.
During the conference, Dickson Chan reviewed and examined as usual the production
report for the day and he declared that he was not satisfied with the production output,
berating private respondent and the other supervisors, thus:
"You Filipinos are lazy people and your Philippine laws are no good, even your
government is no good. In Hong-kong, factory workers can buy the most expensive
foods and clothes in the world, but, here you Filipinos are like beggars, it is just because
you are all lazy."
Thereafter, he crumpled the production report and again threw invectives at private
respondent and her co-supervisors, to wit:
"You are bullshits, you Filipinos, get out, you are all lazy, you are like pigs, all of you go
home. I do not want to see your face again."
Not satisfied and contended with what he had said. Dickson Chan picked up the stapler
on his desk and, but for some better impulse, would have thrown the same at private
respondent and her companions who, frightened, as they were, dispersed.
As a result of this unfortunate incident, private respondent told and instructed her co-
supervisors, "Huwag pumasok sa lunes para matauhan si Dickson." Thus, on the next
working day, January 12, 1981, a Monday, they absented themselves from work.
However, on January 13, 1981, she and her companions reported for work.
On January 16, 1981, petitioner filed an application for clearance to terminate the
services of private respondent on the ground of "Loss of Management Confidence".
Meanwhile, private respondent was placed under preventive suspension leading to her
termination effective January 13, 1981.
on January 19, 1981, private respondent filed a complaint for illegal dismissal. The labor
arbiter dismissed the Malubay's complaint, however NLRC reversed the LA's decision.

ISSUE: whether private respondent's services may be terminated for loss of trust and
confidence.

HELD: The court cannot condone the act of private respondent in inciting her co-
supervisors and leading them in the boycott and wildcat strike. As aptly observed by the
Labor Arbiter:
"Even assuming that complainant was berrated by her Production Manager due to
under par production output, her remedy is not to sabotage or boycott company
operations; she should have gone to higher management levels in order to redress her
grievances against her abusive immediate superior. Getting even with the company for
the misdeed of only one person, the Production Manager, is totally uncalled for."
The Labor Code, specifically Article 283, acknowledges the right of the employer to put
an end to the covenant with the employee due to Fraud and willful breach by the
employee of the trust reposed in him by his employer or his duly authorized agent.
Thus, the act of private respondent in initiating and leading the boycott, thereby
disrupting and impairing company operations, is sufficient reason for petitioner to lose
its trust and con-fidence on private respondent, considering that the latter is a
managerial employee of the company whose position carries the corresponding highest
degree of responsibility in improving and upholding the interests of the employer and in
exemplifying the utmost standard of discipline and good conduct among her co-
employees. Withal, the termination of her employment is justified.

GT Printers v NLRC-Milan
FACTS:
Edwin Ricardo was employed in 1968 as an apprentice at GT Printers. GT Printers is a
single proprietorship owned by Mrs. Trinidad Barba. Ricardo gained enough experience
and expertise in the printing business, and after undergoing special schooling in Manila
at company expense, Ricardo was promoted to production manager at GT Printers. He
became general manager when the husband of Mrs. Barba died.

In February 1985, Ricardos wife established a rival printing press named Insta Printers
with Edwin Ricardo himself as consultant and owner. Since the establishment of Insta
Printers, Ricardo became a habitual absentee at GT printers. He neglected his duties
and responsibilities, and became lax in directing and supervising the work force,
resulting in numerous major printing errors and failure to meet printing specifications
leading to the rejection of several job orders from regular customers.

Eventually, the regular customers of GT Printers were pirated by Insta Printers. He also
manipulated price quotations during the canvassing of bids to favor his own business
instead of GT Printers. Thus, Ricardo was suspended by GT Printers for 30 days.
Richard Barba was designated to take his place. However, Ricardo continued to be a
sales agent for GT Printers so he still received commissions. He was ordered to be
investigated, thus the company sent him notices of investigation but he did not appear
at the investigation. He stopped reporting for work and soon after filed a complaint for
illegal dismissal.

Labor Arbiter: the dismissal was valid.

NLRC: the dismissal was illegal so it ordered to reinstate Ricardo and pay backwages.

ISSUE: Whether Edwin Ricardo was dismissed without just cause.

RULING:
Edwin Ricardo was dismissed with just cause. The security of tenure accorded to labor
under the Constitution does not embrace infractions of accepted company rules
amounting to breach of trust and loss of confidence. As a measure of self-preservation
against acts inimical to its interests, an employer has the right to dismiss an employee
found committing acts of dishonesty and disloyalty. The dismissal of a dishonest
employee is in the best interest not only of management but also of labor for the law
never intended to impose an unjust situation on either labor or management. There
exists visible conflict of interest amounting to willful breach of trust and
confidence reposed upon him by his employer, as well as habitual neglect of his
duties.
San Miguel Corp v NLRC-Munoz

FACTS:
On July 1990, San Miguel Corporation shut down some of its plants and declared
55 positions redundant. Consequently, San Miguel Corporation Employees Union
(SMCEU) filed several grievance cases for the retrenched employees. The cases were
for redeployment of the employees to the other divisions of the company. The grievance
proceedings were based on Section 5 and 8, Article VIII of the 1990 Collective
Bargaining Agreement of the parties. However, most of the employees were redeployed
during the grievance proceedings. Others accepted early retirement. As a result, only 17
employees remained when the parties proceeded to the third level of the grievance
procedure. In a meeting, SMC informed the union that if by October 30, 1990, the
remaining employees could not yet been redeployed, their services would be terminated
on November 2, 1990. SMCEU then filed with the National Conciliation and Mediation
Board (NCMB) of the DOLE a notice of strike. The grounds of the strike are as follows:
(a) bargaining deadlock; (b)union busting; (c) gross violation of CBA; (d) failure to
provide list of vacant positions and; (e) defiance of voluntary arbitration award.
Thereafte, SMC filed a complaint praying for (1)the dismissal of the notice of stroke; (2)
an order compelling the union to submit the issue to grievance and arbitration, and (3)
the recovery of the expenses of litigation. The NLRC dismissed the complaint.

ISSUES:
1. Whether NLRC has the legal duty to compel arbitration and to enjoin a strike in
violation of a no strike clause
2. Whether injunction is the only immediate and effective substitute for the
disastrous economic warfare

HELD

1. The NLRC gravely abused its discretion in dismissing the complaint of petitioner
SMC for the dismissal of the notice of strike, issuance of a temporary restraining
order, and an order compelling the respondent union to settle the dispute under
the grievance machinery of their CBA. In the case under consideration, the
grounds relied upon by the private respondent union are non-strikeable. The
issues which may lend substance to the notice of strike filed by the private
respondent union are: collective bargaining deadlock and petitioners alleged
violation of the collective bargaining agreement. These grounds, however,
appear more illusory than real.
 Collective Bargaining Deadlock is defined as the situation between the labor and
the management of the company where there is failure in the collective bargaining
negotiations resulting in a stalemate. This situation, is non-existent in the present case
since there is a Board assigned on the third level (Step 3) of the grievance machinery to
resolve the conflicting views of the parties. Instead of asking the Conciliation Board
composed of five representatives each from the company and the union, to decide the
conflict, petitioner declared a deadlock, and thereafter, filed a notice of strike. For failing
to exhaust all the steps in the grievance machinery and arbitration proceedings provided
in the Collective Bargaining Agreement, the notice of strike should have been dismissed
by the NLRC and private respondent union ordered to proceed with the grievance and
arbitration proceedings.

2. No, but abolition of departments to positions in the company is one of the recognized
management prerogatives.Noteworthy is the fact that the private respondent does not
question the validity of the business move of petitioner. In the absence of proof that the
act of petitioner was ill-motivated, it is presumed that petitioner San Miguel Corporation
acted in good faith. In fact, petitioner acceded to the demands of the private respondent
union by redeploying most of the employees involved; such that from an original 17
excess employees in BLD, 15 were successfully redeployed. In AOC, out of the 17
original excess, 15 were redeployed. In the Magnolia - Manila Buying Station, out of 18
employees, 6 were redeployed and only 12 were terminated.

CDCP Tollways Operation Employees and Worker Unions v NLRC-Obra

Nature: Petition for Certiorari. The assailed judgment held that Danilo Estanislao and
Guillermo Cario, Jr.,(participation in pilferage is established), are not entitled to
separation pay while Lily Maglunog and Reynaldo Miranda are only entitled to
separation pay equivalent to one-half month's pay for every year of service, a fraction of
at least six months being considered as one whole year

FACTS: Victoria Robles, a field auditor of CDCP Tollways Corporation saw Rosario
Sanchez, a toll teller reliever, come out of Booth No. 5 which was being manned by
petitioner Miranda and, thereafter, entered Booth No. 3 manned by petitioner Cario
where she was seen folding a piece of paper into her pocket. Suspecting said piece of
paper to be a cash count sheet, Robles seek permission to conduct a body search on
Sanchez. At that time, Robles was inside booth 12 manned by Maglunog As they were
passing the powerhouse on their way to the location for the search, Sanchez threw the
piece of paper inside the powerhouse. Danilo Estanislao, technician, grabbed the paper
and hid it in his pocket. Robles demanded the return of the paper but Estanislao refused
alleging that it was a love letter for Sanchez. Estanislao threw the paper toward Rodolfo
Palad, security guard. It fell inside the drawer of Palad. When the drawer is opened,
Guillermo Carino grabbed the piece of paper, crumpled it and placed it on his pocket.
When the count sheet was finally recovered, it yielded P590.00 paper bills. Robles also
found a box inside the drawer. Estanislao claimed that it was thrash and offered to
throw it away. The auditors followed him and they found that the box contained 47
unvalidated patron tickets amounting to P646.00 wrapped in a white plastic were found.

Estanislao, Carino, Maglunog and Miranda were dismissed on the grounds of

loss of trust and confidence. They filed separate complaints for illegal dismissal. The
labor arbiter sustaining the dismissal of the complainants but awarding them separation
pay equivalent to one month's salary for every year of service.

ISSUE: Whether or not Maglunog and Miranda should be should be reinstated with
backwages instead of merely being awarded separation pay because of the findings of
the public respondent NLRC that the evidence against them are shaky and weak.

HELD: The dismissal of Maglunog and Miranda are valid. Unlike the finding of guilt
on Estanislao and Carino whose complicity cannot be doubted, the evidence linking the
two other complainants we share the impression that the evidence linking the two other
complainants (Maglunog and Miranda) to the pilferage of the company's collection was
rather weak and shaky. But that does not make their termination less valid and
unjustified. For loss of confidence is a valid ground for dismissing an employee.
And proof beyond reasonable doubt of the employee's misconduct is not
required, it being sufficient that there is some basis for the same or that the
employer has reasonable ground to believe that the employee is responsible for
the misconduct and his participation therein renders him unworthy of the trust
and confidence demanded of his position

Zamboanga Water District v Bartolome-Padrigo

Footnote 23: Fraud or willful breach of trust: stealing company property

Facts
This is an illegal dismissal case.

Genaro Bartolome was employed by the Zamboanga City Water District as meter reader in July,
1976, In a sworn statement dated February 9, 1981 before Agent Virgilio Mendez of the National
Bureau of Investigation, Bartolome admitted that in September, 1980 he opened the water meter of
Manuela Cahipe in order to enable his fellow-employee, Ulysis Lunjas, to adjust the meter reading.
After the adjustment, Cahipe offered them a drink of beer
Bartolome was supposed to read the water meter, not to open it.

On the other hand, Lunjas in his sworn statement before Agent Mendez dated February 3, 1981
pointed to Bartolome as the one who tampered with the water meter by reversing the gear to get the
desired meter reading
Angel Fernando, another fellow-employee of Bartolome, in his sworn statement before Agent
Mendez, declared that Bartolome confided to him that he was tampering with the water meters of the
establishments in the market site
In a later resolution dated September 16, 1982, Fiscal Murillo "apologized" for his error in having
overlooked Bartolome's participation in the theft of water. He recommended that Bartolome be
prosecuted for theft.
The case for theft was dismissed

Issue: Whether the dismissal of the theft case against Bartolome would preclude his removal

Held: No

The fact that the theft case against Bartolome was dismissed would not preclude his removal.

The conviction of an employee in a criminal case is not a condition precedent to his dismissal by his
employer. The dropping by the city fiscal of the criminal complaint is not binding upon a labor tribunal
(Sea-Land Service, Inc. vs. National Labor Relations Commission, G.R. No. 68212, May 24, 1985,
136 SCRA 544, 547-548).
Bartolome was dismissed by the petitioner in June, 1981. He filed a complaint for illegal dismissal.
We find that Bartolome was guilty of gross misconduct which is a ground for dismissal under section
283 of the Labor Code.
The Labor Arbiter committed a grave abuse of discretion amounting to lack of jurisdiction when he
directed the reinstatement of Bartolome with backwages from June, 1981 to June, 1982 at P630 a
month and when he ordered the payment to him of P4,560 as allowance for the same period plus
P1,010 as 13th month pay (p. 25, Rollo). The NLRC should not have dismissed petitioner's appeal
from that decision.

PLDT v. NLRC-Pena
FACTS: This petition involves two separate applications for clearance to terminate
employment. The first, is the application for clearance to terminate the employment of
private respondent Melquiades Alfonso on the ground of misappropriation of company
properties. The second, concerns the application for clearance to terminate the services
of private respondent Noel Sevilla on the ground of commission of fraudulent acts.

Private respondents Noel Sevilla and Melquiades Alfonso were employed by petitioner
Philippine Long Distance Telephone Company as Cable Splicer Headcrews. The total
value of the materials covered by Requisition Slips Nos. 93388, 78130, 88141, 78143
and 88147 which were allegedly withdrawn and misappropriated by private respondent
Sevilla is Three Thousand Two Hundred and Twenty-One Pesos and Thirty Seven
Centavos (P3,221.37). Petitioner company filed an application to terminate the
employment of private respondent Sevilla. On the same date, Sevilla was placed under
preventive suspension leading to his dismissal.

The petitioner appealed to the respondent NLRC, the respondent commission affirmed
the decision of the Labor Arbiter.

CONTENTION OF THE PETITIONER: There is sufficient evidence to warrant the

dismissal of private respondent Sevilla.

ISSUES: Whether Sevilla's dismissal is proper.

RULING: Yes. We agree with the petitioner that private respondent Sevilla is guilty of
acts inimical to the interests of his employer. The records show that Sevilla took
advantage of his position as Cable Splicer Headcrew (Sj-5) to withdraw company
properties which should never have been issued to him on the strength of double and/or
fictitious requisition slips. By means of Requisition Slip No. 93388 dated February 28,
1980 respondent Sevilla was able to withdraw company materials for a fictitious and
non-existing work order. Requisition Slips Nos. 78130 and 88141, both dated February
29, 1980 are double requisitions for the same work order. Requisition Slip No. 78143
dated March 3, 1980 was for a fictitious and non-existing work order while under
Requisition Slip No. 88147, also dated March 3, 1980, the materials requisitioned
exceeded what was actually needed, and despite non-use of the excess materials,
respondent Sevilla never returned the same to the petitioner company.

These evidences of double or fictitious requisitions were not successfully controverted

by respondent Sevilla. The fact that evidence against him was gathered only after his
arrest does not mean that he was not guilty of wrongdoing. The petitioner had valid and
legitimate reasons to lose its confidence in respondent Sevilla and to order his
dismissal.

Loss of confidence is a valid ground for dismissing an employee, and proof beyond
reasonable doubt of the employee's misconduct-apparently demanded by the Minister
of Labor is not required to dismiss him on this charge. It is sufficient if there is "some
basis" for such loss of confidence; or if the employer has reasonable grounds to believe,
if not to entertain the moral conviction that the employee concerned is responsible for
the misconduct and that the nature of his participation therein rendered him absolutely
unworthy of the trust and confidence demanded by his position.
In cases where the acts of misconduct amount to a crime, a dismissal may still be
properly ordered notwithstanding that the employee is not criminally prosecuted or is
acquitted after a criminal prosecution.

China City Restaurant Corp. v NLRC-Saavedra

Facts:

Monica Dieto and Julinito Cablay were employees of China City Restaurant. One day,
Abe Fuentes, a steamer helper in the said restaurant was caught stealing dried scallops
worth P2,000. In Fuentess statement, he included Dieto and Cablay as his co-
conspirators. They would allegedly steal the scallops and sell them in Ongpin, Binondo,
Manila.
China City terminated the services of Dieto and Cablay on the ground of loss of trust
and confidence based on the accusations of Abe Fuentes. In turn, they filed a case of
illegal dismissal against China City. In their defense, they did not know about Fuentes
activities. When they also visited Fuentess cell, the latter pointed to Jose Polotan as a
person who coerced him to include them as co-conspirators.
The labor arbiter ruled in favor of the employees. Aggrieved, the petitioners China City
appealed the decision to the NLRC. The NLRC affirmed the labor arbiters findings with
the modification granting the alternative relief of separation pay with back wages.
China City sought the annulment of the NLRC decision with the Supreme Court. Prior
the decision, the employees were acquitted by reasonable doubt.

Issue:
Did China City Restaurant validly dismiss the services of Dieto and Cablay?
Held:
No. Aside from non-compliance of the due process requirement in labor cases,
petitioners ground for dismissal was incorrect.
There was non-compliance of due process because the employer relied on the
preliminary investigation of the City Fiscals Office without affording the employees an
opportunity to be heard. Furthermore, the prima facie findings of the Fiscal was based
solely on an affidavit that Abe Fuentes executed three months after his arrest. China
City should have scrutinized the veracity of this first by asking the respondents
themselves what happened.
Because of the abovementioned reason, loss of confidence as a ground of dismissal
was not applicable in this case. For loss of trust and confidence to be a valid ground for
the dismissal of employees, it must be substantial and not arbitrary, whimsical,
capricious or concocted. It became arbitrary and whimsical the moment China City
failed to scrutinize the complaint or failed to give the employees an opportunity to
explain their side.

In the end, the respondents were awarded separation pay with back wages computed
from the time of their dismissal.

MF Violago Oiler Tank Trucks v NLRC-Toyoken-Doyog

Philippine Sheet Metal Workers Union v CIR-Masedman

FACTS:
On March 1, 1985, the respondent Union filed a Notice of Strike with the Bureau
of Labor Relations (BLR) on ground of unfair labor practice consisting of alleged refusal
to bargain, dismissal of union officers/members; and coercing employees to retract their
membership with the union and restraining non-union members from joining the union.
The said order was issued of said court involving an industrial dispute between
the respondent company (a corporation engaged in the manufacture of tin plates,
aluminum sheets, etc.) and its laborers some of whom belong to the Philippine Sheet
Metal Workers' Union (CLO) and some to the Liberal Labor Union.
The dispute was over certain demands made upon the company by the laborers,
one of the demands, being for the recall of eleven workers who had been laid off.
Temporarily taken back on certain conditions pending final determination of the
controversy, these eleven workers were in the end ordered retained in the decision
handed down by the court on February 19, 1947.
The petitioner tried to prove that the 11 laborers were laid off by the respondent
company due to their union activities. The respondent company proved that the laying
off of these eleven workers was due to lack of materials which was the case.
On February 10, 1947, that is, nine days before the decision came down, filed a
motion in the case, asking for authority to lay off at least 15 workers in its can
department on the ground that the installation and operation of nine new labor-saving
machines in said department had rendered the services of the said workers
unnecessary. The employees opposed the motion. The court, after due hearing and
investigation, rendered an order, dated February 5, 1948, granting the company's
motion to lay off 15 workers and denied the petition to have the company declared in
contempt of court. The fifteen laborers slated for dismissal had each of them a bad
record according to the list submitted by the company,

ISSUE:
Whether the laying off or dismissal of the laborers who are members of the union
is valid
HELD:
Yes. The right to reduce personnel should, of course, not be abused. It should
not be made a pretext for easing out laborers on account of their union activities. But
neither should it be denied when it is shows that they are not discharging their duties in
a manner consistent with good discipline and the efficient operation of an industrial
enterprise.
The petitioner contends that the order complained of was made with grave abuse
of discretion and in excess of jurisdiction in that it is contrary to the pronouncement
made by the lower court in its decision in the main case where it disapproved of the
dismissal of eleven workers "with whom the management is displeased due to their
union activities." It appears, however, that the pronouncement was made upon a distinct
set of facts (for abandoning their work for a long time; for having been leaving often
during work hours and leaving the service without reasonable cause or permission),
which are different from those found by the court in connection with the present incident,
and that very decision, in ordering the reinstatement of the eleven laborers, qualifies the
order by saying that those laborers are to be retained only "until the occurrence of facts
that may give rise to a just cause of their laying off or dismissal, or there is evidence of
sufficient weight to convince the Court that their conduct is not satisfactory."
After a careful review of the record, we find that the Court of Industrial Relations
has neither exceeded its jurisdiction nor committed grave abuse of discretion in
rendering the order complained of.

Dole Philippines Inc. etal. v. NLRC et. al.-Mayaoyao

FACTS:Dole Philippines, Inc., is a corporation engaged in the business of growing,
canning, processing and manufacturing pineapples and other allied products. The other
petitioners were DOLE officers and respondents were DOLE employees of rank and file
positions.

In 1982, Dole reduced its manpower by 509 workers but prolonged collective bargaining
negotiations, which ended in 1990, prevented the company from proceeding with its
restructuring. Among factors considered by the company in undertaking the reduction
program was the high absenteeism rate that causes higher paid sick leaves, higher
operating costs for medical facilities, and higher transportation costs due to under-filled
and late hauls. Dole also cites operating cost problems due to factors beyond its control,
oil price increases, mandated wage increases, the import levy, power rate hikes, and
increased land rentals, existing at that time. Furthermore, the bloody December 1989
coup detat shook investor confidence and put in doubt the continued economic
progress of the country.
Dole also decided to reduce the number of employees company-wide and offered a
Special Voluntary Resignation (SVR) program of which many employees may avail.
Those employees who availed the SVR were given notices of termination and received
benefits under the redundancy program like; 40 days for every year of service, cash
conversion of any earned/unused and accrued vacation leave credits, proportionate 13 th
month pay,one month extra pay in lieu of one month prior written notice, relocation
assistance of P3,000.00.
After assessing the outcome of the SVR, Dole found that it could still do with lesser
employees, and proceeded to dismiss more of them in 1991. A total of 435 employees
were terminated and also received redundancy benefits.
Dole employees filed complaint for Illegal dismissal. The LA dismissed the complaint for
lack of merit. The NLRC reversed the LAs decision declaring the dismissal illegal.

ISSUE: Whether the Redundancy program was valid.

HELD: Yes. The petition alleges that the redundancy program is part of a wide-scale
restructuring of the company. This purported restructuring is supported by the
companys undisputed history towards these ends, which culminated in the abolition of
certain positions and the Special Voluntary Resignation program in 1990-1991. Among
the avowed goals of such restructuring is the reduction of absenteeism in the company.
The harsh economic and political climate then prevailing in the country also emphasized
the need for cost-saving measures.
Reorganization as a cost-saving device is acknowledged by jurisprudence. An employer
is not precluded from adopting a new policy conducive to a more economical and
effective management, and the law does not require that the employer should be
suffering financial losses before he can terminate the services of the employee on the
ground of redundancy.
Also, private respondents even filled up application forms to be considered for the
redundancy program and thus acknowledged the existence that their services were
redundant.
In any case, private respondents executed two releases in favor of petitioners
company. Not all quitclaims are per se invalid or against public policy. But those (1)
where there is clear proof that the waiver was wangled from an unsuspecting or gullible
person or (2) where the terms of settlement are unconscionable on their face are
invalid. In these cases, the law will step in to annul the questionable transaction. There
is no showing here that private respondents are unsuspecting or gullible persons.
Neither are the terms of the settlement unconscionable. Indeed, private respondents
received a generous separation package, as set out in the narration of facts above.
Wiltshire File Co., Inc v NLRC supra

Asian Alcohol Corporation v NLRC-Milan

General Milling Corporation v Violeta L. Viajar-Munoz

FACTS:
Violeta Viajar received a Letter-Memorandum from General Milling Corporation (GMC)
informing her that her services are no longer needed because her position as
Purchasing Staff was deemed redundant. When Viajar reported for work on October 31,
2003, a month prior the effectivity from her severance from GMC, the guard on duty
prevented her from entering the companys premises. She was also asked to sign an
Application for Retirement and Benefits. Viajar refused to sign. Thus, she filed a
complaint for illegal dismissal. The Labor Arbiter ruled in favor of GMC and held that the
latter acted in good faith in terminating Viajar. On appeal, the NLRC affirmed LAs
decision.Viajar filed a petition before the Court of Appeals. The CA granted the petition.
Thus, GMC filed this instant petition for review before the Supreme Court.

ISSUE: Whether or not Viajar was validly terminated from GMC?

HELD: No, the court held that the company failed to show the basis of redundancy. To
exhibit good faith and that there was a reasonable criteria in ascertaining redundant
positions, a company claiming to be over manned must produce proof.

Art. 283 of the Labor Code provides that redundancy is one of the authorized
causes for dismissal. It is imperative that the employer must comply with the
requirements for a valid implementation of the companys redundancy program, to wit:
(a) the employer must serve a written notice to the affected employees and the DOLE at
least one (1) month before the intended date of retrenchment; (b) the employer must
pay the employees a separation pay equivalent to at least one month pay or at least
one month pay for every year of service, whichever is higher; (c) the employer must
abolish the redundant positions in good faith; and (d) the employer must set fair and
reasonable criteria in ascertaining which positions are redundant and may be abolished.
While it is true that the characterization of an employees services as superfluous
or no longer necessary and, therefore, properly terminable, is an exercise of business
judgment on the part of the employer, the exercise of such judgment, however, must not
be in violation of the law, and must not be arbitrary or malicious.
San Miguel Corporation v NLRC-Obra
FACTS: In July 1990, San Miguel Corporation, alleging the need to streamline its
operations due to financial losses, shut down some of its plants and declared 55
positions as redundant. This positions is composed of seventeen (17) employees in the
Business Logistics Division (BLD), seventeen (17) in the Ayala Operations Center
(AOC), and eighteen (18) in the Magnolia-Manila Buying Station (Magnolia-MBS) The
union filed grievance cases for the retrenched employees.
During the course of the grievance proceeding, some retrenched employees
were redeployed, others accepted early retirement and only 17 employees were to
proceed with the 3rd step for the grievance procedure. They were scheduled for
termination on Nov. 2, 1990. The meeting adjourned and the union representative
declared a deadlock.
The procedures in the grievance proceeding, as provided for in the CBA are as
follows:
Step 1: individual employee and union director will take the matter orally to the
immediate supervisor. If within 20 days the grievance is not satisfactorily resolved, it will
be filed in writing to the Department Manager or next immediate supervisor who will
deiced within 20 days.
Step 2: If not satisfied with the decision, may elevate or appeal in writing to the Plant
Manager/Director or his duly authorized representative within 20 working days from the
receipt of the Decision of the Department Manager. Department Manager will decide
within 10 days and a copy of the Decision will be furnished to the Employee Relations
Directorate.
Step 3: If no satisfactory judgment is arrived, employee may appeal Decision to the
Conciliation Board, within 15 working days from the date of receipt of the decision in
Step 2. The Board has 15 days to decide on the grievance.
On Nov. 7, 1990 the union filed with the NLRC a notice of strike on the following
grounds:
a) bargaining deadlock;
b) union busting;
c) gross violation of the Collective Bargaining Agreement (CBA), such as non-
compliance with the grievance procedure;
d) failure to provide private respondent with a list of vacant positions pursuant to the
parties side agreement that was appended to the 1990 CBA; and
e) defiance of voluntary arbitration award. Petitioner on the other hand, moved to
dismiss the notice of strike but the NCMB failed to act on the motion
 SMC filed a complaint against the union which prayed for:
1) the dismissal of the notice of strike;
(2) an order compelling the respondent union to submit to grievance and arbitration the
issue listed in the notice of strike; and
(3) the recovery of the expenses of litigation.
However, the complaint was dismissed.

ISSUE: WON the dismissal of SMCs complaint is proper.

HELD: No, dismissal of SMCs complaint is improper and a Temporary Restraining

Order should be issued against the union. The grounds relied upon by the union are
non-strikable. There is still a third step to resolve the conflicting views of the parties.
Instead of asking the Conciliation Board to decide the conflict, the union declared a
deadlock and filed for strike. The notice of strike should have failed because the
procedures in the CBA were not yet exhausted. NLRC should have ordered the union to
proceed with the grievance and administrative proceeding.
Abolition of departments or positions in the company is one of the recognized
management prerogatives. Noteworthy is the fact that the private respondent does not
question the validity of the business move of petitioner. In the absence of proof that the
act of SMC was ill-motivated, it is presumed that SMC acted in good faith. In fact, SMC
acceded to the demands of the private respondent union by redeploying most of the
employees involved; such that from an original 17 excess employees in BLD, 15 were
successfully redeployed. In AOC, out of the 17 original excess, 15 were redeployed. In
the Magnolia - Manila Buying Station, out of 18 employees, 6 were redeployed and only
12 were terminated.

BASILIO A. BALASBAS, vs.

NATIONAL LABOR RELATIONS COMMISSION and VETERANS PHILIPPINE
SCOUT SECURITY AGENCY,
(Retrenchment) Footnote 31: (3) The expected or actual losses must be proved by
sufficient and convincing evidence
Facts:
Private respondent Jamilla & Company, Inc., owns a security agency named Veterans
Philippine Scout Security Agency.
On August 31, 1984, it hired Basilio Balasbas as operations supervisor and assigned
him in the security division. Part of his job was to
a) issue orders relative to the guards' assignments,
b) direct work activities of the inspectors and
c) re-screen guard applicants.
On April 12, 1985 or EIGHT MONTHS after his employment, the company handed him
a termination notice advising him of his severance from the service effective
immediately pursuant to a retrenchment program that was being implemented.
The same day, he filed a case with the Labor Arbiter for illegal dismissal, non-payment
of the 13th month pay and underpayment of basic salary.
Finding that the petitioner's dismissal was indeed unlawful, having been effected without
proper notice as required by law, Labor Arbiter Ruben M. Alberto rendered a judgment
on February 28, 1986 ordering the petitioner's reinstatement with full backwages and
other benefits from the date of his dismissal until actually reinstated. Additionally, he
ordered the payment of petitioner's 13th month pay for 1985 (partial) as admitted by
respondent company. However, the rest of the complaint was rejected and dismissed
for lack of basis or insufficiency of evidence.
Interposing grave abuse of discretion and serious errors in the findings of facts, the
respondent company appealed to the NLRC on April 21, 1986.
On April 27, 1988, the NLRC reversed and set aside the Labor Arbiter's ruling, citing in
particular the petitioner's waiver of the mandatory 30-day notice required by law to
justify the reversal.
Balasbas elevated his case to the Supreme Court through a Petition for Review on
Certiorari.
Seeking the reversal of the NLRC Decision, for having been rendered with grave abuse
of discretion and pleading for affirmance in toto of the Decision of the Labor Arbiter, he
specifically invokes Article 277, paragraph b of the Labor Code which guarantees the
constitutional right of workers to security of tenure and their right to be protected against
dismissal except for a just and authorized cause and without prejudice to the
requirement of notice under Article 283 of the same Code.
Thereunder, the employer shall furnish the worker whose employment is sought to be
terminated a written notice containing a statement of the causes for termination and
shall afford the latter ample opportunity to be heard and to defend himself with the
assistance of his representative, if he so desires.
Finding himself suddenly jobless, he had no choice but to accept his separation pay of
P1,750.00, as well as P500.00 as extra cash bonus.
Contention of Balasabas
He argues that his acceptance of the separation pay and other benefits should not be
construed as a waiver of the 30-day notice of termination. Thus, he avers that if the
alleged renunciation were true, he would not have filed a complaint. Yet, on the very
same day that he received the said notice, he immediately lodged a complaint for illegal
dismissal against respondent company on April 12, 1985. From there on, he has
vigorously prosecuted his claim through all the stages of the proceedings. Finally, he
stoutly maintains that his eventual separation from employment lacks due process.
Contention of the Company and Solicitor General
Retrenchment, being a managerial prerogative resorted to by any employer when
confronted by economic losses, respondent was within its rights in separating the
petitioner.

Issues:
I
Whether the retrenchment conducted by the company was valid despite lack of
supporting evidence

II
Whether the 30-day advance notice is deemed to have been waived when the
petitioner voluntarily accepted the termination benefits and such notice of
termination constitutes substantial compliance with the requirement of notice of
the law.

Held:
I
No
Under Article 283 of the Labor Code, the closure of a business establishment or
reduction of personnel is a ground for the termination of the services of any employee
unless the closing or retrenching is for the purpose of circumventing the provision of the
law.
But while business reverses can be a just cause for terminating employees, these must
be sufficiently proved by the employer.

The case of Sugar Lopez Corporation v. Federation of Free Workers, lays down the
general standards under which an employer may retrench or reduce the number of his
employees.
A) the losses expected should be substantial and not merely de minimis in extent. If the
loss purportedly sought to be forestalled by retrenchment is clearly shown to be
insubstantial and inconsequential in character, the bonafide nature of the retrenchment
would appear to be seriously in question. (Emphasis supplied.)
B) the substantial loss apprehended must be reasonably imminent, as such imminence
can be perceived objectively and in good faith by the employer. There should, in other
words, be a certain degree of urgency for the retrenchment, which is after all a drastic
recourse with serious consequences for the livelihood of the employees retired or
otherwise laid-off. Because of the far-reaching nature of the retrenchment
C) be reasonably necessary and likely to effectively prevent the expected losses.
D) the alleged losses if already incurred, and the expected imminent losses sought to
be forestalled, must be proved by sufficient and convincing evidence.
In the case at bar, there is a lack of sufficient and convincing documentary evidence to
bolster the claim of the respondent company that it is indeed suffering from business
losses of such magnitude as to impel the retrenchment of petitioner Basilio Balasbas.
The records are bereft of evidence on any application for a reduction of employees or
written notice to the Department of Labor. If indeed there were, it would have been
logical for the respondent company to have attached copies of the same.
Interestingly, the records, however, show that immediately after the petitioners
termination from work, the respondent company advertised and hired another employee
for the position of inspector or investigator, indubitable proof that the alleged
retrenchment was merely a cover-up to ease out herein petitioner Basilio Balasbas.
This unlawful and unjust act of the respondent company was compounded when it
dismissed the petitioner without complying with the 30-day advance notice of
termination containing a statement of the cause for his termination, thus affording him
ample opportunity to be heard.
There being no proof of serious business losses or financial reverses that would justify
the petitioners dismissal and there being a failure on the part of the employer to prove
that the dismissal is for a just cause, the employee is entitled to reinstatement with full
backwages.
II
No
The alleged waiver by the petitioner of the 30-day notice of termination deserves scant
consideration. Being an ordinary rank and file employee, the petitioner may not be
expected to completely comprehend or realize the consequences of his act. This is
more than adequately shown by the fact that he immediately filed a complaint for illegal
dismissal on April 12, 1985, 16 the same day he was served the notice of termination of
employment.

Central Azycarerra dela Carlota v NLRC-Pena

FACTS: Private respondent Reynaldo Decrepito began his employment with petitioner
in April 1981 and worked his way up to his present position as Accounting Clerk II,
earning a monthly salary of P1,801.00. Petitioner's Board of Directors passed a
resolution On 31 March 1987 petitioner's Board of Directors passed a resolution to
undertake and implement a comprehensive cost reduction program to address
petitioner's financial difficulties "on account of huge financial losses suffered due to a
big production shortfall (in the) last crop year which was further aggravated by the
reduction of areas planted to cane in the district and the recent dry spell."

Subsequently, petitioner apprised Reynaldo Decrepito of his dismissal due to

retrenchment through a memorandum dated 18 June 1987 terminating his services
effective 23 June 1987. Decrepito received P2,622.00 as retrenchment pay and on 27
July 1987 he executed a Release and Quitclaim absolving petitioner from any and all
claims or liabilities.

CONTENTION OF DECRIPTO: Retrenchment program resorted to by petitioner was

not based on valid grounds. Private respondent Decrepito filed a complaint against
petitioner for reinstatement with backwages, moral damages and attorney's fees.

ISSUE:
a) Whether or not the dismissal of private respondent due to retrenchment was valid
and justified, and;
b) Whether or not private respondent was estopped from questioning his dismissal on
the basis of the release and quitclaim he allegedly freely signed.

RULING OF LABOR ARBITER: The case dismissed thefor lack of merit. He opined
that Decripto freely accepted the retrenchment and its concomitant effects as evidenced
by his receipt of separation pay and the release and quitclaim he voluntarily signed. He
was, therefore, estopped from questioning the same.

RULING OF NLRC: It reversed the decision of the Labor Arbiter on grounds that
petitioner failed to comply with both the substantive and procedural requirements of a
valid retrenchment. The employer should comply with the so-called "four standards of
retrenchment"; Firstly, the losses expected should be substantial and not merely de
minimis in extent. Secondly, the substantial loss apprehended must be reasonably
imminent, as such imminence can be perceived objectively and in good faith by the
employer. There should, in other words, be a certain degree of urgency for the
retrenchment, which is after all a drastic recourse with serious consequences for the
livelihood of the employees retired or otherwise laid-off. It must, thirdly, be reasonably
necessary and likely to effectively prevent the expected losses. The employer should
have taken other measures prior or parallel to retrenchment to forestall losses, i.e., cut
other costs than labor costs. Lastly, but certainly not the least important, alleged losses
if already realized, and the expected imminent losses sought to be forestalled, must be
proved by sufficient and convincing evidence. The reason for requiring this quantum of
proof is readily apparent: any less exacting standard of proof would render too easy the
abuse of this ground for termination of services of employees.

Peitioner dismally failed to present adequate, credible and persuasive evidence that it
was in dire financial straits and indeed suffering, or will imminently suffer, from drastic
business losses. Petitioner, likewise, failed to comply with the procedural requisites of
Art. 283 of the Labor Code. The law mandatorily requires that written notice be given to
both the employee concerned and the DOLE at least one (1) month prior to the intended
date of retrenchment to enable the former to find other employment and the latter to
determine the validity of said retrenchment.

On the issue of estoppel, the employer drove the employee to the wall. The latter must
have to get hold of money. Because, out of job, he had to face the harsh necessities of
life. He thus found himself in no position to resist money proffered. His, then, is a case
of adherence, not of choice. One thing sure, however, is that petitioners did not relent
on their claim. They pressed it. They are deemed not have waived any of their rights.

Cheniver Deco Print Technics Corporation v. NLRC-Saavedra

Facts:

Cheniver was a printing business situated on a leased parcel of land in Makati. Because
of the expiration of the lease over the parcel of land in Makati, they planned to transfer
to Sto. Tomas, Batangas. Before June 1992, they informed their employees of the
transfer and gave them until the end of June 1992 to inform the management if they
want to continue working in Batangas or not.

On August 1, 1992, they started their operation in their new site. They wrote to the
employees through the labor union that they have seven days to report to the new site,
otherwise, they will be deemed replaced. The union replied that they are willing to
continue working. But when the end of the 7-day period came, no one showed up.

Some employees opted to just receive separation pays instead. Meanwhile private
respondents-employees filed a case with the labor arbiter against Cheniver for Unfair
Labor Practices. The Labor Arbiter ruled that Cheniver was not guilty of unfair labor
practices but ordered them to pay their employees separation pay. Cheniver did not
agree with the judgment of paying separation pay to their employees. So they appealed
the decision with the NLRC. The NLRC affirmed the labor arbiters findings.

Thus, the petitioner-employer elevated the case to the Supreme Court. They contend
that they should not pay their employees their separation pay because the business
was not closing or cessating from business but only transferring their location.
Issue:

Should Cheniver pay the money awards which NLRC granted to its employees?

Held:

Yes. The relocation of petitioners plant to Batangas amounts to cessation of petitioners

business operations in Makati. The phrase "closure or cessation of operation of an
establishment or undertaking not due to serious business losses or reverses" under
Article 283 of the Labor Code includes both the complete cessation of all business
operations and the cessation of only part of a companys business.
There is no doubt that petitioner has legitimate reason to relocate its plant because of
the expiration of the lease contract on the premises it occupied. That is its prerogative.
But even though the transfer was due to a reason beyond its control, petitioner has to
accord its employees some relief in the form of severance pay.

Consequently, petitioner herein must pay his employees their termination pay in the
amount corresponding to their length of service. Since the closure of petitioners
business is not on account of serious business losses, petitioner shall give private
respondents separation pay equivalent to at least one (1) month or one-half (1/2) month
pay for every year of service, whichever is higher.

Petitioners contention that private respondents resigned from their jobs, does not
appear convincing. As public respondent observed, the subsequent transfer of petitioner
to another place hardly accessible to its workers resulted in the latters untimely
separation from the service not to their own liking, hence, not construable as
resignation. Resignation must be voluntary and made with the intention of relinquishing
the office, accompanied with an act of relinquishment. Indeed, it would have been
illogical for private respondents herein to resign and then file a complaint for illegal
dismissal. Resignation is inconsistent with the filing of the said complaint.

Lucena Oil Factory Inc v NLRC-Toyoken

Maya Farms Employees Organization v NLRC-Chilagan

Libres v. NLRC, National Steel Corp.-Dicang

 Maya Farms Employees Organization vs. NLRC
G.R. No. 106256 December 28, 1994
Kapunan, J.

Facts: This petition for review on certiorari seeks to set aside the decision of public
respondent NLRC which upheld the legality of the separation of 66 employees who are
members of petitioner unions, thereby dismissing petitioners' complaint against private
respondents for violation of CBA and unfair labor practice.
Private respondents Maya Farms, Inc. and Maya Realty and Livestock Corporation
belong to the Liberty Mills group of companies whose undertakings include the
operation of a meat processing plant which produces ham, bacon, cold cuts, sausages
and other meat and poultry products.
Petitioners, on the other hand, are the exclusive bargaining agents of the employees of
Maya Farms, Inc. and the Maya Realty and Livestock Corporation. An early retirement
program was announced as a cost-cutting. Dialogues were conducted to give the
parties an opportunity to discuss the details of the program. Accordingly, the program
was amended to reduce the minimum requirement of 8 years of service to only 5 years.
However, the early retirement program was converted into a special redundancy
program intended to reduce the work force to an optimum number so as to make
operations more viable. Letters were sent to 66 employees informing them that their
respective positions had been declared redundant and that their services would be
terminated effective 30 days from receipt thereof.
Petitioners filed a notice of strike which accused private respondents of unfair labor
practice, violation of CBA and discrimination. On their part, private respondents contend
that their decision to implement a special redundancy program was an exercise of
management prerogative which could not be interfered with unless it is shown to be
tainted with bad faith and ill motive. Private respondents explained that they had no
choice but to reduce their work force, otherwise, they would suffer more losses.
Furthermore, they denied that the program violated CBA provisions.

Issue: Whether or not there was grave abuse of discretion amounting to lack or in
excess of jurisdiction.

Held: The termination of the sixty-six employees was done in accordance with Article
283 of the Labor Code. The basis for this was the companies' study to streamline
operations so as to make them more viable. Positions which overlapped each other, or
which are in excess of the requirements of the service, were declared redundant.
We sustain the companies' prerogative to adopt the alleged
redundancy/retrenchment program to minimize if not, to avert losses in the conduct of
its operations. This has been recognized in a line of cases. (Wiltshire File Co. vs. NLRC,
G.R. No. L-82249, February 7, 1991). However, the companies' decision on this matter
is not absolute. The basis for such an action must be far from being whimsical and the
same must be proved by substantial evidence. In addition, the implementation of such a
decision or policy must be in accordance with existing laws, rules and procedure and
provisions of the CBA between the parties, if there be any. Short of any of these
conditions, management policy to pursue and terminate its employees allegedly to avert
losses, must fail.
In subject case, the 66 complaining employees were separated from service as a result
of the decision of management to limit its operations and streamline positions and
personnel requirements.
Furthermore, it is not disputed that the LIFO rule applies to termination of employment
in the line of work. Verily, what is contemplated in the LIFO rule is that when there are
two or more employees occupying the same position in the company affected by the
retrenchment program, the last one employed will necessarily be the first to go.
Finally, contrary to petitioners' contention, there is nothing on record to show that the
30-day notice of termination to the workers was disregarded and that the same
substituted with separation pay by private respondents. As found by public respondent,
written notices of separation were sent to the employees. The notices expressly stated
that the termination of employment was to take effect one month from receipt thereof.
Therefore, the allegation that separation pay was given in lieu of the 30-day notice
required by law is baseless.