BERNADETH LONDONIO

AND JOAN CORCORO,

Petitioners,

G.R. No. 191459

Present:
CARPIO MORALES,

- versus -

BRION,

BIO RESEARCH, INC.

AND WILSON Y. ANG,

BERSAMIN,

Respondents.

VILLARAMA, JR., and

SERENO, JJ.
Promulgated:
January 17, 2011
x - - - - - - - - - - - - - - - - - -x
DECISION

CARPIO MORALES, J.:

Petitioners Bernadeth E. Londonio (Bernadeth) and Joan T. Corcoro
(Joan) were hired by respondent Bio Research Inc. (Bio Research)
as graphic/visual artists on February 12 and October 19, 2004,
respectively.
In a Memorandum dated April 30, 2005 which petitioners received
on May 7, 2005,[1] Bio Research informed its employees including
petitioners that pursuant to its plan to reduce the workforce in order
to prevent losses, it would be severing their employment with the
company. On May 9, 2005, Bio Research filed an Establishment
Termination Report[2] with the Department of Labor and
Employment (DOLE) stating that it was retrenching 18 of its
employees including petitioners due to redundancy and to prevent
losses.
Bernadeth and Joan were in fact retrenched on May 26 and May 18,
2005, respectively.
Joan accepted her retrenchment pay in the sum of P9,990.14 and
executed a Quitclaim and Waiver[3] reading:
FOR AND IN CONSIDERATION OF THE SUM OF NINE THOUSAND
NINE HUNDRED NINETY PESOS & 14/100 (P9,990.14), as financial

assistance, receipt whereof in settlement of my claims, I x x x do

hereby release/discharge xxx with principal office at x x x and/or its
officers, from any or all claims/liabilities by way of unpaid wages,
overtime pay, separation pay, retirement benefits, 13 th month, or
otherwise as may be due me incident to my past employment with
the said x x x. I hereby state further that I have no more claim
or cause of action of whatsoever nature whether past, present or
contingent, including my alleged right for continued employment
with xxx, and/or any of its officers.
This QUITCLAIM AND WAIVER may be used to secure dismissal of
any complaint or action already filed or may be subsequently filed
either by myself, my heirs and successors in interests.
I have executed this QUITCLAIM AND WAIVER voluntarily and of my
own freewill and I understand the legal and factual consequences.
Bernadeth refused to accept hers.
Petitioners later filed a complaint for illegal dismissal, moral and
exemplary damages and attorneys fees against respondent Bio
Research and its co-respondent President/CEO Wilson Y. Ang (Ang).
Petitioners claimed that their dismissal was done in bad faith and
tainted with malice, being retaliatory in nature, following the filing
by Bernadeth of a complaint against Jose Ang, Jr. (Jose), one of Bio
Researchs managers, for a sexual harassment incident that
occurred in his office on February 19, 2005.
In support of their claim that their dismissal was retaliatory in
nature, petitioners alleged that soon after the filing by Bernadeth of
the sexual harassment complaint,[4] several members of the
management approached Joan, to whom Bernadeth had poured her
heart out after the incident, urging her to convince her friend
Bernadeth to drop the complaint, to which she (Joan) paid no heed
as she expressed support for Bernadeths cause.
Petitioners added that an administrative investigation[5] of the
sexual harassment complaint was in fact conducted by Bio Research
but before it could be resolved, Jose resigned on April 15, 2005.[6]
To refute Bio Researchs claim that it had been incurring business
losses, Joan cited the recommendation for her regularization on
April 12, 2005, 18 days before she received a copy of the
Memorandum of April 30, 2005.
Bio Research, disclaiming that the sexual harassment case had
anything to do with its decision to terminate the services of
petitioners, maintained that financial reverses prompted it to take

such drastic action. It went on to stress that as Joan had already

received her separation pay and had in fact signed a waiver and
quitclaim in its favor, she is estopped from challenging the validity
of her dismissal.
By Decision of March 31, 2006,[7] the Labor Arbiter (LA) ruled in
favor of petitioners, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is entered finding that
complainants were illegally dismissed by respondents in bad faith,
ORDERING respondents BIO RESEARCH CORP. and/or WILSON ANG
(President/Manager), to reinstate complainants to their former
positions, without loss of seniority rights and benefits, and pay them
full backwages from date of illegal dismissal/illegal retrenchments of
complainants, Bernadette Londonio on 05/26/2005, Joan Corcoro is
05/18/2005, until actually reinstated, and to pay them moral and
exemplary damages in the combined amount of P125,000.00 each,
plus to pay them 10% of the total award as attorneys fees.
Complainants full backwages, as of date of this decision is shown
hereunder:
Bernadette Londonio
1) Basic
2) 13th month pay
3) 5 days SILP
4) COLA
Total FB

P95,000.00
P7,307.69
P1,314.16
P15,208.33
P118,830.18

(05/26
(1/12 P
(P9,50
(P50.0

P93,600.00
P7,800.00
P1,290.00
P15,816.66
P118,506.66

(05/18
(1/12 P
(P9,00
(P50.0

Joan Corcoro
1) Basic
2) 13th month pay
3) 5 days SILP
4) COLA
Total FB

In finding against Bio Research, the LA held that it failed to prove

financial losses to justify its call for the retrenchment of petitioners,
and to use fair and reasonable criteria to ascertain who to dismiss
or retain; and that Bio Research failed to comply with the
requirements of Article 283 of the Labor Code ? that notice should
be given to the DOLE and employees concerned at least a month
before the intended retrenchment.
Finally, the LA held that since Joans receipt of her salary for the
period April 11, 2005 April 18, 2005, the amount which was
lumped with her retrenchment pay, was conditioned on her signing

the quitclaim, the execution thereof was done through force, hence,
not valid.
On appeal by respondents, the National Labor Relations Commission
(NLRC), by Resolution of February 18, 2008,[8] affirmed the LAs
decision. And it denied respondents reconsideration of its decision
by Resolution of May 30, 2008.
The Court of Appeals to which respondents assailed the NLRC
resolutions by certiorari, sustained the ratio decidendi behind the
NLRC decision in favor of petitioners, by Decision of May 27, 2009.
[9] Specifically with respect to Joan, however, it pronounced that
she could no longer question the legality of her dismissal in light of
her execution of the quitclaim and waiver.
Further, the appellate court departed from the NLRC ruling holding
respondent Ang solidarily liable with Bio Research for the money
claims of petitioners, the latter having failed to show that Ang was
impelled by malice and bad faith in dismissing them. Thus the
appellate court held:

Settled is the rule in this jurisdiction that a corporation is invested

by law with a legal personality separate and distinct from those
acting for and in behalf and, in general, from the people comprising
it. Thus, obligations incurred by corporate officers acting as
corporate agents are not theirs but the direct accountabilities of the
corporation they represent. True, solidary liabilities may at times be
incurred by corporate officers, but only when exceptional
circumstances so warrant. For instance, in labor cases, corporate
directors and officers may be held solidarily liable with the
corporation for the termination of employment if done with malice
or in bad faith.[10]

Finally, the appellate court deleted the award of moral and

exemplary damages.[11]
The appellate court thus disposed:
WHEREFORE, the instant petition for certiorari is PARTIALLY
GRANTED. The assailed Resolutions of the public respondent
National Labor Relations Commission, in NLRC NCR-06-05472(05)
CA
No.
050702-06,
are
AFFIRMED
with
the
following
MODIFICATIONS: (1) petitioner Wilson Y. Ang is ABSOLVED from
any liability adjudged against co-petitioner Bio Research, Inc.; (2)

the awards of moral and exemplary damages in favor of the private

respondents Bernadeth E. Londonio and Joan Corcoro are DELETED;
and (3) the complaint for illegal dismissal insofar as private
respondent Joan Corcoro is concerned is DISMISSED.
SO ORDERED.[12] (underscoring supplied)
Petitioners Motion for Reconsideration of the appellate courts
decision having been denied,[13] they filed the present petition for
review on certiorari, contending that
. . . petitioner [Joan] is not barred to question the validity of her
dismissal notwithstanding the execution of a waiver and quitclaim;
. . . they are entitled to the award of damages; and
. . . Wilson Y. Ang is solidarily liable with Bio Research.
Absent any showing that the appellate court ignored, misconstrued
and misapplied facts and circumstances of substance, its affirmance
of the NLRC decision holding that petitioners were illegally
dismissed stands. It is settled that where the Labor Arbiter, the
NLRC and the Court of Appeals all concur in their factual findings
and it does not appear that they acted with grave abuse of
discretion or otherwise acted without jurisdiction or in excess of the
same, this Court is bound by the said findings.[14] The Labor
Arbiter and the NLRC, being the most equipped and having acquired
expertise in the specific matters entrusted to their jurisdiction, their
findings of fact are accorded not only respect but even finality if
they are supported by substantial evidence, or that amount of
relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion.[15]
Verily, in determining that petitioners were illegally retrenched, the
appellate court pointed out that not only did Bio Research fail to
submit in evidence its audited financial statements to show its
financial condition prior to and at the time it enforced its
retrenchment program; it also failed to show that it adopted fair
and reasonable standards in ascertaining who would be retained or
dismissed among it employees.[16]
It is, however, with respect to the appellate courts ruling that Joan
is, on account of her execution of the waiver and quitclaim,
estopped from questioning her dismissal that this Court takes
exception.
An employees execution of a final settlement and receipt of
amounts agreed upon do not foreclose his right to pursue a claim

for illegal dismissal.[17] For, as reflected above, Joan was illegally

retrenched. She is thus entitled to reinstatement without loss of
seniority rights and privileges, as well as to payment of full
backwages from the time of her separation until actual
reinstatement, less the amount of P9,990.14 which she received as
retrenchment pay.
Respecting the appellate courts freeing Ang from liability, the same
is in order. Corporate officers, absent any evidence that they have
exceeded their authority, are not personally liable for their official
acts. For a corporation has, by legal fiction a personality separate
and distinct from its officers, stockholders and members. In cases
of illegal dismissal, this fictional veil may be pierced and its
directors and officers held solidarily liable with it, where the
dismissals of its employees are done with malice or in bad faith,
which was not proven to be the case here.[18]
As for the deletion by the appellate court of the award of moral and
exemplary damages, the same is in order too, petitioners having
failed to substantiate their claim that their dismissal was made in
bad faith.
WHEREFORE, the challenged Decision and Resolution of the Court
of Appeals are AFFIRMED with the MODIFICATION in that
petitioner Joan Corcoro is ordered reinstated to her former position,
without loss of seniority rights and with full backwages from the
time of the termination of her employment until reinstated less the
amount of P9,990.14, or if reinstatement is not possible, the
payment of separation pay equivalent to one half month salary for
every year of service.
The Decision is, in all other respects, including the reinstatement of
Bernadeth Londonio, AFFIRMED.
SO ORDERED.
HOSPITAL MANAGEMENT SERVICES, INC. MEDICAL CENTER MANILA,
Petitioner,

G.R. No. 176287

Present:

CARPIO, J., Chairperso

- versus -

NACHURA,

HOSPITAL MANAGEMENT SERVICES, INC. MEDICAL

PERALTA,
CENTER MANILA
EMPLOYEES ASSOCIATION-AFW and EDNA R. DE
ABAD, and
CASTRO,

Respondents.

MENDOZA, JJ.
Promulgated:
January 31, 2011
x-------------------------------x
DECISION

PERALTA, J.:
Before this Court is a petition for review on certiorari seeking to set
aside the Decision[1] dated May 24, 2006 and Resolution[2] dated
January 10, 2007 of the Court of Appeals (CA), Special First
Division, in CA-G.R. SP No. 73189, entitled Hospital Management
Services, Inc.-Medical Center Manila Employees Association-AFW
and Edna R. De Castro v. National Labor Relations Commission,
Hospital Management Services, Inc.-Medical Center Manila and
Asuncion Abaya-Morido, which reversed and set aside the
Decision[3] dated February 28, 2002 of the National Labor Relations
Commission (NLRC), Second Division, in NLRC NCR No. 00-0707716-99 (CA No. 027766-01), and its Resolution[4] dated May 31,
2002. The assailed CA decision ordered petitioner Hospital
Management Services, Inc.-Medical Center Manila to reinstate
respondent Edna R. De Castro to her former position without loss of
seniority rights or by payroll reinstatement, pursuant to the Labor
Arbiter's Decision dated January 18, 2001, but with payment of full
backwages and other benefits or their monetary equivalent,
computed from the expiration of the 14-day suspension period up to
actual reinstatement.
The antecedent facts are as follows:
Respondent De Castro started working as a staff nurse at petitioner
hospital since September 28, 1990, until she was dismissed on July
20, 1999.
Between 2:00 a.m. to 3:00 a.m. of March 24, 1999, while
respondent De Castro and ward-clerk orientee Gina Guillergan were
at the nurse station on night duty (from 10:00 p.m. of March 23,
1999 to 6:00 a.m. of March 24, 1999), one Rufina Causaren, an 81year-old patient confined at Room 724-1 of petitioner hospital for
gangrenous wound on her right anterior leg and right forefoot and
scheduled for operation on March 26, 1999, fell from the right side
of the bed as she was trying to reach for the bedpan. Because of
what happened, the niece of patient Causaren staying in the room

was awakened and she sought assistance from the nurse station.
Instead of personally seeing the patient, respondent De Castro
directed ward-clerk orientee Guillergan to check the patient. The
vital signs of the patient were normal. Later, the physician on duty
and the nursing staff on duty for the next shift again attended to
patient Causaren.

Chief Nurse Josefina M. Villanueva informed Dr. Asuncion AbayaMorido, president and hospital director, about the incident and
requested for a formal investigation. On May 11, 1999, the legal
counsel of petitioner hospital directed respondent De Castro and
three other nurses on duty, Staff Nurse Janith V. Paderes and
Nursing Assistants Marilou Respicio and Bertilla T. Tatad, to appear
before the Investigation Committee on May 13, 1999, 2:00 p.m., at
the conference room of petitioner hospital. During the committee
investigation, respondent De Castro explained that at around 2:30
a.m. to 3:00 a.m., she was attending to a newly-admitted patient at
Room 710 and, because of this, she instructed Nursing Assistant
Tatad to check the vital signs of patient Causaren, with ward-clerk
orientee Guillergan accompanying the latter. When the two arrived
at the room, the patient was in a squatting position, with the right
arm on the bed and the left hand holding on to a chair.
In the Investigation Report[5] dated May 20, 1999, the
Investigation Committee found that the subject incident happened
between 11:00 a.m. to 11:30 a.m. of March 23, 1999. The three
other nurses for the shift were not at the nurse station. Staff Nurse
Paderes was then in another nurse station encoding the medicines
for the current admissions of patients, while Nursing Assistant
Respicio was making the door name tags of admitted patients and
Nursing Assistant Tatad delivered some specimens to the
laboratory. The committee recommended that despite her more
than seven years of service, respondent De Castro should be
terminated from employment for her lapse in responding to the
incident and for trying to manipulate and influence her staff to
cover-up the incident. As for Staff Nurse Paderes and Nursing
Assistants Respicio and Tatad, the committee recommended that
they be issued warning notices for failure to note the incident and
endorse it to the next duty shift and, although they did not have
any knowledge of the incident, they should be reminded not to
succumb to pressure from their superiors in distorting the facts.
On July 5, 1999, Janette A. Calixijan, HRD Officer of petitioner
hospital, issued a notice of termination, duly noted by Dr. AbayaMorido, upon respondent De Castro, effective at the close of office
hours of July 20, 1999, for alleged violation of company rules and

regulations, particularly paragraph 16 (a), Item 3, Chapter XI of the

Employee's Handbook and Policy Manual of 1996 (Employee's
Handbook):[6] (1) negligence to follow company policy on what to
do with patient Rufina Causaren who fell from a hospital bed; (2)
failure to record and refer the incident to the physician-[on- duty
and] allow[ing] a significant lapse of time before reporting the
incident; (3) deliberately instructing the staff to follow her version
of the incident in order to cover up the lapse; and (4) negligence
and carelessness in carrying out her duty as staff nurse-on-duty
when the incident happened.
On July 21, 1999, respondent De Castro, with the assistance of
respondent Hospital Management Services Inc.-Medical Center
Manila Employees Association-AFW, filed a Complaint[7] for illegal
dismissal against petitioners with prayer for reinstatement and
payment of full backwages without loss of seniority rights,
P20,000.00 moral damages, P10,000.00 exemplary damages, and
10% of the total monetary award as attorney's fees.
On January 18, 2001, the Labor Arbiter rendered a Decision,[8]
ordering petitioner hospital to reinstate respondent De Castro to her
former position or by payroll reinstatement, at the option of the
former, without loss of seniority rights, but without backwages and,
also, directing petitioners to notify her to report to work. Her
prayer for damages and attorney's fees was denied. The Labor
Arbiter concluded that although respondent De Castro committed
the act complained of, being her first offense, the penalty to be
meted should not be dismissal from the service, but merely 7 to 14
days suspension as the same was classified as a less serious offense
under the Employees Handbook.
On appeal by respondent De Castro, the NLRC rendered a Decision
dated February 28, 2002, reversing the findings of the Labor Arbiter
and dismissing the complaint against the petitioners. It observed
that respondent De Castro lacked diligence and prudence in carrying
out her duty when, instead of personally checking on the condition
of patient Causaren after she fell from the bed, she merely sent
ward-clerk orientee Guillergan to do the same in her behalf and for
influencing her staff to conceal the incident.
On May 31, 2002, the NLRC denied respondent De Castro's Motion
for Reconsideration dated April 16, 2002.
On May 24, 2006, the CA reversed and set aside the Decision of the
NLRC and reinstated the Decision of the Labor Arbiter, with
modification that respondent De Castro should be entitled to
payment of full backwages and other benefits, or their monetary
equivalent, computed from the expiration of the 14-day-suspension

period up to actual reinstatement. The CA ruled that while

respondent De Castro's failure to personally attend to patient
Causeran amounted to misconduct, however, being her first offense,
such misconduct could not be categorized as serious or grave that
would warrant the extreme penalty of termination from the service
after having been employed for almost 9 years. It added that the
subject infraction was a less serious offense classified under
commission of negligent or careless acts during working time or on
company property that resulted in the personal injury or property
damage causing expenses to be incurred by the company stated in
subparagraph 11, paragraph 3 (B), Chapter XI [on the Rules on
Discipline] of the Employee's Handbook[9] of petitioner hospital.
The CA did not sustain the NLRC's ruling that respondent De
Castro's dismissal was proper on the ground that her offense was
aggravated to serious misconduct on account of her alleged act of
asking her co-employees to lie for her as this fact was not proven.
Petitioners' motion for reconsideration was denied by the CA in the
Resolution dated January 10, 2007.
Hence, this present petition.
Petitioners allege that the deliberate refusal to attend to patient
Causaren after the latter fell from the bed justifies respondent De
Castro's termination from employment due to serious misconduct.
They claim that respondent De Castro failed to: (a) personally
assist the patient; (b) check her vital signs and examine if she
sustained any injury; (c) refer the matter to the patient's attending
physician or any physician-on-duty; and (d) note the incident in the
report sheet for endorsement to the next shift for proper
monitoring. They also aver that respondent De Castro persuaded
her co-nurses to follow her version of what transpired so as to cover
up her nonfeasance.
In her Comment, respondent De Castro counters that there was no
serious misconduct or gross negligence committed, but simple
misconduct or minor negligence which would warrant the penalty of
7 to 14 days of suspension under the Employee's Handbook of
petitioner hospital. She denies exerting influence over the four
nursing personnel, but points out that it was Chief Nurse Villanueva,
a close friend of patient Causaren's niece, who persuaded the four
nursing staff to retract their statements appearing in the incident
reports as to the approximate time of occurrence, from 2:00 a.m. to
3:00 a.m. of March 24, 1999 to 11:00 p.m. to 11:30 p.m. of March
23, 1999, so as to pin her for negligence. She appeals for leniency,
considering that the subject infraction was her first offense in a
span of almost nine years of employment with petitioner hospital.

We affirm with modification the CA ruling which declared petitioners

guilty of illegal dismissal.
Article 282 (b) of the Labor Code provides that an employer may
terminate an employment for gross and habitual neglect by the
employee of his duties. The CA ruled that per the Employees
Handbook of petitioner hospital, respondent De Castros infraction is
classified as a less serious offense for commission of negligent acts
during working time as set forth in subparagraph 11, paragraph 3
(B) of Chapter XI[10] thereof. Petitioners anchor respondent De
Castros termination of employment on the ground of serious
misconduct for failure to personally attend to patient Causaren who
fell from the bed as she was trying to reach for the bedpan. Based
on her evaluation of the situation, respondent De Castro saw no
necessity to record in the chart of patient Causaren the fact that she
fell from the bed as the patient did not suffer any injury and her
vital signs were normal. She surmised that the incident was not of
a magnitude that would require medical intervention as even the
patient and her niece did not press charges against her by reason of
the subject incident.
It is incumbent upon respondent De Castro to ensure that patients,
covered by the nurse station to which she was assigned, be
accorded utmost health care at all times without any qualification or
distinction. Respondent De Castros failure to personally assist
patient Causaren, check her vital signs and examine if she sustained
any injury, refer the matter to the patient's attending physician or
any physician-on-duty, and note the incident in the report sheet for
endorsement to the next shift for proper monitoring constitute
serious misconduct that warrants her termination of employment.
After attending to the toxic patients under her area of responsibility,
respondent De Castro should have immediately proceeded to check
the health condition of patient Causaren and, if necessary, request
the physician-on-duty to diagnose her further. More importantly,
respondent De Castro should make everything of record in the
patients chart as there might be a possibility that while the patient
may appear to be normal at the time she was initially examined, an
injury as a consequence of her fall may become manifest only in the
succeeding days of her confinement. The patients chart is a
repository of ones medical history and, in this regard, respondent
De Castro should have recorded the subject incident in the chart of
patient Causaren so that any subsequent discomfort or injury of the
patient arising from the incident may be accorded proper medical
treatment.
Neglect of duty, to be a ground for dismissal, must be both gross
and habitual. Gross negligence connotes want of care in the

performance of one's duties. Habitual neglect implies repeated

failure to perform one's duties for a period of time, depending upon
the circumstances. A single or isolated act of negligence does not
constitute a just cause for the dismissal of the employee.[11]
Despite our finding of culpability against respondent De Castro;
however, we do not see any wrongful intent, deliberate refusal, or
bad faith on her part when, instead of personally attending to
patient Causaren, she requested Nursing Assistant Tatad and wardclerk orientee Guillergan to see the patient, as she was then
attending to a newly-admitted patient at Room 710. It was her
judgment call, albeit an error of judgment, being the staff nurse
with presumably more work experience and better learning curve,
to send Nursing Assistant Tatad and ward-clerk orientee Guillergan
to check on the health condition of the patient, as she deemed it
best, under the given situation, to attend to a newly-admitted
patient who had more concerns that needed to be addressed
accordingly. Being her first offense, respondent De Castro cannot
be said to be grossly negligent so as to justify her termination of
employment. Moreover, petitioners allegation, that respondent De
Castro exerted undue pressure upon her co-nurses to alter the
actual time of the incident so as to exculpate her from any liability,
was not clearly substantiated.
Negligence is defined as the failure to exercise the standard of care
that a reasonably prudent person would have exercised in a similar
situation.[12] The Court emphasizes that the nature of the business
of a hospital requires a higher degree of caution and exacting
standard of diligence in patient management and health care as
what is involved are lives of patients who seek urgent medical
assistance. An act or omission that falls short of the required
degree of care and diligence amounts to serious misconduct which
constitutes a sufficient ground for dismissal.
However, in some cases, the Court had ruled that sanctioning an
erring employee with suspension would suffice as the extreme
penalty of dismissal would be too harsh.[13] Considering that this
was the first offense of respondent De Castro in her nine (9) years
of employment with petitioner hospital as a staff nurse without any
previous derogatory record and, further, as her lapse was not
characterized by any wrongful motive or deceitful conduct, the
Court deems it appropriate that, instead of the harsh penalty of
dismissal, she would be suspended for a period of six (6) months
without pay, inclusive of the suspension for a period of 14 days
which she had earlier served. Thereafter, petitioner hospital should
reinstate respondent Edna R. De Castro to her former position
without loss of seniority rights, full backwages, inclusive of
allowances and other benefits, or their monetary equivalent,

computed from the expiration of her suspension of six (6) months

up to the time of actual reinstatement.
WHEREFORE, the petition is DENIED. The Decision dated May 24,
2006 and Resolution dated January 10, 2007 of the Court of
Appeals, Special First Division, in CA-G.R. SP No. 73189, which
reversed and set aside the Decision dated February 28, 2002 and
Resolution dated May 31, 2002 of the National Labor Relations
Commission,
Second
Division,
are
AFFIRMED
WITH
MODIFICATION insofar as respondent Edna R. De Castro is found
guilty of gross negligence and is SUSPENDED for a period of SIX
(6) MONTHS without pay, inclusive of the suspension for a period
of 14 days which she had earlier served. Petitioner Hospital
Management Services, Inc.-Medical Center Manila is ORDERED to
reinstate respondent Edna R. De Castro to her former position
without loss of seniority rights, full backwages, inclusive of
allowances and other benefits, or their monetary equivalent,
computed from the expiration of her suspension of six (6) months
up to the time of actual reinstatement.
SO ORDERED.
SANDEN AIRCON PHILIPPINES

G.R. No.

and ANTONIO ANG,

Petitioners,
Present:

CORONA
-versus-

VELASCO

LEONARD

DEL CAS

PEREZ, J
LORESSA P. ROSALES,

Promulga
Respondent.

x---------------------x

March 23

DECISION
DEL CASTILLO, J.:
An employer has the discretion to dismiss an employee for loss of
trust and confidence but the former may not use the same to cloak
an illegal dismissal.
This Petition for Review on Certiorari[1] assails the Decision[2]
dated May 24, 2005 of the Court of Appeals (CA) in CA-G.R. SP No.
85698, which granted the petition for certiorari and reversed and
set aside the Resolution[3] dated November 28, 2003 of the
National Labor Relations Commission (NLRC) in NLRC CASE No.
RAB-IV-9-9330-97-L (NLRC NCR CA No. 016826-98) and reinstated
the Resolution[4] dated November 29, 2000 of the NLRC.
Also assailed is the Resolution[5] dated August 1, 2005 denying the
Motion for Reconsideration
Factual Antecedents
Sanden Aircon Philippines (Sanden) is a corporation engaged in the
business of manufacturing, assembling, and fabricating automotive
air-conditioning systems.
In August 1992, Sanden employed Loressa P. Rosales (Loressa) as
Management Information System (MIS) Department Secretary. On
December 26, 1996, she was promoted as Data Custodian and
Coordinator. As such, Loressa had access to all computer programs
and marketing computer data, including the Delivery Receipt
Transaction files of Sanden. The Finance Department based its
billing and collection activities on the marketing delivery receipt
transactions. Loressas functions and authority include opening,
editing and copying files in Sandens computers. She was also
charged with the duty of creating back-up copies of all files under
her custody. For this purpose, she can request all computer users
at a particular time to log out or exit from the system.
On May 16, 1997, Sanden discovered that the marketing delivery
receipt transactions computer files were missing. The Internal
Auditing Department, through its Audit Officer, Ernesto M. Bayubay
(Ernesto), immediately sent a memorandum[6] dated May 17, 1997
to Garrick L. Ang (Garrick), the MIS Manager, requesting that a
technical investigation be conducted.
On May 19, 1997, Garrick issued a memorandum[7] enumerating
the findings of the MIS Department, the pertinent portions of which
read:

This is in response on [sic] your request for a technical investigation

regarding the missing Marketing Delivery Receipt (DR) transactions
filed inside our computer system. The incident happened at [sic] the
16 of May 1997 12:35 noon in which we discovered a data
corruption in the Marketing DR transactions file wherein all the data
were missing. We immediately conducted an investigation of the
incident and found out the following:
1.
Before the incident, [the] Marketing Staff are still
using the said file until 12:00 noon [when they] were instructed by
the Data Custodian (Ms. Loressa Rosales) to log out from the
system because a back-up was to be conducted. The back-up
activities never took place for [unknown reasons];
2.
We dont have an updated back up on the
mentioned file which was the responsibility of the Data Custodian,
the last back up of the file was [conducted] on 10 of May 1997.
3.
The incident can only happen when only one user
[was] using the file and after the incident we immediately look[ed]
into the Server Manager, a security auditing tool of the system, and
found out that Ms. Loressa Rosales was the only one log[ged] in on
the system at 12:05 noon to 12:21 noon with 16 minutes of usage
time as witnesse[d] by many MIS personnel including one audit
officer.
4.
The Data Custodian [has] all the rights of Add, Edit,
Delete on all the files found in the system.
5.
So based on the facts that we have gathered it is
highly probable that Ms. Loressa Rosales was the culprit in the said
incident.
On June 26, 1997, Atty. Reynaldo B. Destura (Atty. Reynaldo), the
Personnel and Administrative Services Manager sent a letter[8] to
Loressa charging her with data sabotage and absences without
leave (AWOL). She was given 24 hours to explain her side.
On July 2, 1997, Loressa submitted her letter[9] to Atty. Reynaldo
where she vehemently denied the allegations of data sabotage.
According to her, only a computer programmer equipped with the
necessary expertise and not a mere data custodian like her would
be capable of such an act. As to the charge of incurring absences
without leave, she challenged Sanden to specify the dates and
circumstances of her alleged AWOL.
In a memorandum[10] dated July 3, 1997, Atty. Reynaldo
scheduled the administrative investigation on the charge of data

sabotage in the afternoon of the next day.

pushed through as scheduled.

The investigation

On July 17, 1997, the husband of Loressa received a Notice[11] of

Disciplinary Action from Sanden notifying Loressa that management
is terminating Loressas employment effective upon receipt of the
said communication. The reason cited by Sanden was the loss of
trust on her capability to continue as its Coordinator and Data
Custodian. Sanden indicated in the said letter that based on all the
documents and written testimonies gathered during the
investigation, Loressa caused the deliberate sabotage of the
marketing data involving the Delivery Receipts.
On September 9, 1997, Loressa filed a complaint[12] for illegal
dismissal with a prayer for the payment of 13 th month pay,
attorneys fees and other benefits.
In her position paper,[13] Loressa alleged that no evidence was
presented during the investigation conducted by Sanden to prove
that she indeed committed data sabotage. She claimed that she
was singled out as the culprit based on mere suspicion unsupported
by any testimonial or documentary evidence. The Delivery Receipts,
which Sanden claims to have been deleted, were not presented
during the investigation process. Moreover, there were no witnesses
presented who pointed to Loressa as the one who actually
committed the data sabotage.
On the other hand, in Sandens position paper,[14] it alleged that at
around noon of May 16, 1997, Loressa requested the Marketing
Staff to log out or exit from the computer system because she
would create a backup of the Marketing Delivery Receipt Transaction
files. At that time, some members of the Marketing Staff were still
using and encoding additional data but as requested, all of them
logged out from the network. The Server Manager showed that from
12:05 p.m. to 12:21 p.m., the only computer logged in was that of
Loressa. This is precisely the period when the deletion of the
Marketing Delivery Receipt Transaction files occurred.
Ruling of the Labor Arbiter
On May 28, 1998, Labor Arbiter Nieves De Castro rendered a
Decision[15] finding that Sanden is guilty of illegal dismissal. She
ruled that there exists no justifiable basis for Sandens act of
terminating the services of Loressa. Nowhere in the records can be
found evidence, documentary or otherwise (i) that will directly point
to Loressas having committed data sabotage or (ii) that she
absented herself without leave. The Labor Arbiter also ruled that
since animosity between Sanden and Loressa already exists, the

award of separation pay in lieu of reinstatement is in order and in

accord with industrial peace and harmony. The dispositive portion of
the Labor Arbiters Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered,
declaring the dismissal of the complainant illegal and respondent
Sanden Aircon Philippines, Inc. is ordered:
1.
To pay complainant backwages from the time of [her]
dismissal up to the date of promulgation of this decision[;]
2.
To pay complainant separation pay of one (1) month for
every year of service [from] the date of employment up to the date
of promulgation of this decision[;]
3.

To pay attorneys fees of 10% of the total award[; and]

4.
[To have its] financial analyst x x x compute the
monetary award[s which form] part of this decision.
All other claims are dismissed for lack of merit.
SO ORDERED.[16]
Ruling of the National Labor Relations Commission
Sanden sought recourse to the NLRC by submitting its Notice[17] of
Appeal and Memorandum on Appeal on September 28, 1998.
On November 29, 2000, the NLRC issued a Resolution[18] affirming
the May 28, 1998 Decision of the Labor Arbiter with the modification
that the computation of the amount of separation pay to be
awarded be reckoned from December 26, 1996 which was the date
when Loressa was hired by Sanden as Data Custodian and
Coordinator. The NLRC found that Loressa was paid separation pay
corresponding to the period beginning August 1992 (the date she
was hired) up to December 26, 1996.
Sanden filed
Resolution.

a Motion for Reconsideration[19] of the NLRC

On November 28, 2003, the NLRC issued another Resolution[20]

which reversed its November 29, 2000 Resolution and dismissed the
complaint for lack of merit.
Ruling of the Court of Appeals

Aggrieved, Loressa filed with the CA a petition for certiorari.[21]

The CA through a Resolution[22] dated August 19, 2004, directed
her to submit within five days from receipt of said resolution copies
of Sandens appeal memorandum and motion for reconsideration of
the November 29, 2000 resolution which were mentioned in her
petition but were not attached thereto. On September 8, 2004,
Loressa submitted the documents as directed by the CA.[23] On
September 27, 2004, the CA issued its Resolution[24] noting the
compliance of Loressa and also directing Sanden to file its
comment.
On October 18, 2004, Sanden filed a Motion for Extension of Time
to File Comment.[25] This was granted by the CA through its
Resolution[26] dated November 3, 2004. On November 5, 2004,
Sanden filed its comment.[27]
On May 24, 2005, the CA granted the petition and reversed and set
aside the November 28, 2003 Resolution of the NLRC and reinstated
the latters November 29, 2000 Resolution.
Petitioners moved for reconsideration,[28] but to no avail. Hence,
this appeal anchored on the following grounds:
Issues
THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER
SANDEN FAILED TO SUBSTANTIATE RESPONDENT ROSALESS
DISMISSAL, CONSIDERING THAT:
A. THE ASSERTION MADE BY THE COURT OF APPEALS AS TO THE
POSSIBLE EXISTENCE OF A PARALLEL SET OF DOCUMENTS
CORRESPONDING TO THE DELETED FILES, AS WELL AS THE
POSSIBILITY OF A GLITCH IN THE COMPUTER SYSTEM WHICH
CAUSED THE DELETION OF THE SUBJECT FILES, ARE HIGHLY
SPECULATIVE AND CANNOT STAND AGAINST THE EVIDENCE ON
RECORD.
B.
SIMILARLY, THE CLAIM THAT THE DELETION OF THE SUBJECT
FILES COULD HAVE OCCURRED AT ANY POINT IN TIME IS PURELY
SPECULATIVE AND CANNOT STAND AGAINST THE EVIDENCE ON
RECORD.
C.
LIKEWISE, THE CLAIM THAT ANOTHER PERSON COULD HAVE
CAUSED THE DELETION OF THE SUBJECT FILES CONSIDERING
THAT RESPONDENT ROSALES COULD NOT POSSIBLY HAVE BEEN
THE SOLE PERSON WITH ACCESS THERETO IS PURELY
SPECULATIVE AND CANNOT STAND AGAINST THE EVIDENCE ON
RECORD.

D.
HENCE, THERE IS MORE THAN SUFFICIENT SUBSTANTIAL
EVIDENCE WARRANTING THE VALID DISMISSAL OF RESPONDENT
ROSALES.[29]
These matters boil down to a single issue of whether Sanden legally
terminated Loressas employment on the ground of willful breach of
trust and confidence as Coordinator and Data Custodian.
Petitioners Arguments
Petitioners contend that Loressa was vested with the delicate
position of safekeeping the records of Sanden. She was charged
with the duty of creating back up files so that Sanden may be fully
protected in any eventuality. Loressas act, therefore, of maliciously
deleting the Marketing Delivery Receipt Transaction files is a valid
ground to dismiss her from her employment on the ground of loss
of trust. It is betrayal of the highest order when the very custodian
of the records deleted the same.
According to petitioners, it was clearly shown by evidence that
before the deletion of said files, the Marketing Staff were still using
the files until noon when they were instructed by Loressa to log out
from the system because a back up was to be conducted. The back
up activities never took place and worse the data were deleted from
the system. Petitioners emphasized that as Data Custodian,
Loressa has capability to add, edit, or delete all the files in the
system of Sanden.
Petitioners also aver that from the time the data sabotage occurred
on May 16, 1997 to May 30, 1997, Loressa went on AWOL for at
least five times.

Respondents Arguments
Loressa insists that Sanden failed to provide sufficient evidence
which would clearly point to her as the one who erased the files. For
loss of trust and confidence to be a valid ground for dismissal of an
employee, it must be founded on clearly established facts.
In this case, the fact that Loressas computer was the only one
logged on during the period that the alleged deletion of data
occurred does not mean that she was the one who deleted the
missing files. Loressa maintains that Sanden failed to substantially
prove her direct involvement in the alleged deletion of the files
except for a mere suspicion that it was she who deleted the data in
question.

As to the charge of her absences without leave, Loressa claims that

they were not substantiated by any documentary evidence or
testimony of a witness. As such, her dismissal from employment is
without any legal ground.
Our Ruling
The petition is bereft of merit.
Article 282 of the Labor Code states:
ART. 282. TERMINATION BY EMPLOYER. An employer may
terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of
the lawful orders of his employer or representative in connection
with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in
him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or
his duly authorized representative; and
(e) Other causes analogous to the foregoing.
Article 282(c) of the Labor Code prescribes two separate and
distinct grounds for termination of employment, namely: (1) fraud
or (2) willful breach by the employee of the trust reposed in him by
his employer or duly authorized representative.
Settled is the rule that under Article 282(c), the breach of trust
must be willful. Ordinary breach will not suffice. A breach is willful
if it is done intentionally and knowingly without any justifiable
excuse, as distinguished from an act done carelessly, thoughtlessly
or inadvertently.[30]
As firmly entrenched in our jurisprudence, loss of trust and
confidence as a just cause for termination of employment is
premised on the fact that an employee concerned holds a position
where greater trust is placed by management and from whom
greater fidelity to duty is correspondingly expected.[31] The
betrayal of this trust is the essence of the offense for which an
employee is penalized.[32]

Sanden has the burden of proof to prove its allegations.

Unlike in other cases where the complainant has the burden of
proof to [prove] its allegations, the burden of establishing facts as
bases for an employers loss of confidence in an employee facts
which reasonably generate belief by the employer that the
employee was connected with some misconduct and the nature of
his participation therein is such as to render him unworthy of trust
and confidence demanded of his position is on the employer.[33]
While it is true that loss of trust and confidence is one of the just
causes for termination, such loss of trust and confidence must,
however, have some basis. Proof beyond reasonable doubt is not
required. It is sufficient that there must only be some basis for such
loss of confidence or that there is reasonable ground to believe if
not to entertain the moral conviction that the concerned employee
is responsible for the misconduct and that the nature of his
participation therein rendered him absolutely unworthy of trust and
confidence demanded by his position.[34]
Sanden failed to discharge the burden of proof that the
dismissal of Loressa is for a just cause.
The first requisite for dismissal on the ground of loss of trust and
confidence is that the employee concerned must be holding a
position of trust and confidence.
In this case, we agree that Loressa, who had immediate access to
Sandens confidential files, papers and documents, held a position of
trust and confidence as Coordinator and Data Custodian of the MIS
Department.
The second requisite is that there must be an act that would justify
the loss of trust and confidence. Loss of trust and confidence, to be
a valid cause for dismissal, must be based on a willful breach of
trust and founded on clearly established facts. The basis for the
dismissal must be clearly and convincingly established but proof
beyond reasonable doubt is not necessary.[35]
Sandens evidence against Loressa fails to meet this standard.
Worth noting are the pertinent portions of the Resolution of
the NLRC
dated November 29, 2000 before it reversed itself, to wit:
As correctly found by the Labor Arbiter, nowhere in the records can
be found evidence that directly point to complainant as having

committed acts of sabotage. Also, during the administrative

investigation, the guilt of complainant-appellee was based on mere
allegations not supported by documentary evidence nor any factual
basis. Even appellants cannot directly pinpoint appellee as the
culprit. They were only thinking of her as the one probably
responsible thereto, considering that when she used the computer,
she told the other users to log out and thereafter, used the
computer for 16 minutes, with only 1 minute as usage time. But
these allegations would not suffice (sic) termination of employment
of appellee. Note that security of tenure is protected by
constitutional mandate.
The same holds true with AWOL. Appellant failed to prove that
complainant-appellee went on absence without official leave. The
appellant should have at least presented the daily time record of
appellee to prove that the latter was absent. Mere allegations again
would not suffice.[36]
During the Administrative Investigation conducted by Sanden, there
was no evidence presented to prove that Loressa indeed committed
data sabotage. The Minutes[37] of the Discussion with respect to
the May 16, 1997 data only made mention that Bobots theory is
that it was zapped, meaning permanently deleted. It is therefore a
mere theory with no apparent factual basis, testimonial or
documentary evidence, that would establish the guilt of Loressa for
the charges of data sabotage.
On the other hand, Loressa was able to provide documentary
evidence to show that Sandens computer system was experiencing
some problems even before May 16, 1997. The March 22, 1996
Report[38] of the System Administrator, stated, viz:
Marketing could not use their system due to error encountered such
as an abnormal program termination (problem in pairing).
Warehouse A is affected by this. o.e. in updating marketing
inventory qty. (DR Transaction)[39]
xxxx
Furthermore, in the entry dated March 27, 1996, it was indicated:
Restored Marketing Data from March 23 back-up.
Files restored:
1.

DR HEAD

2.

DR ITEM

Reindexed both.
*lacking data shall be reentered 3/25/95 & 3/26/95
transactions[40]

The following entries as reported by the System Administrator

clearly show that the problem of missing data already existed as
early as 1995, when Loressa was still an MIS Secretary and was not
yet tasked to back up the Marketing Delivery Receipt Transaction
files.
We also fully agree with the CA when it ruled that:
On the contrary, we find the records bereft of any substantial
evidence to show that the petitioner was indeed directly responsible
for the deletion of the subject files or the alleged data sabotage. It
is not difficult to see that the imputed guilt of the petitioner was
based on mere allegations and theories held by private respondents
as possible causes for the deletion of the subject files. In the first
place, if the subject delivery receipt files were as crucial to the
operations of the company as what the private respondents claimed
them to be, then sound business judgment would dictate that it
keep a record or paper trail of all its delivery transactions which
could still be made available to the Finance Department for its
billing and collection activities. It is common knowledge that no
computer system is absolutely crash proof or bug-free and that a
total obliteration of a particular computer file could be attributed to
so many other causes other than the deliberate deletion of the
same. In the second place, the deletion of the subject files could
have occurred at any one point or time and not necessarily during
the time at which the petitioner was the only registered user in the
system. In this case, the private respondents failed to determine
with absolute certainty and to show proof of the exact date or time
when it occurred. Third and last, while it may be true that the
petitioner had access to the subject files as well as the code to
delete the same, it is hardly believable that she would be the sole
person in the company who could access the same. It is noted that
the petitioner worked under the supervision of an MIS Manager as
well as other company officers, who in all probability also had
access to the same files and codes available to the petitioner. x x
x[41]

Having shown that Sanden failed in discharging the burden of proof

that the dismissal of Loressa is for a just cause, we have no other

recourse but to declare that she was illegally dismissed based on

the ground of loss of trust and confidence. This is in consonance
with the constitutional guarantee of security of tenure.
WHEREFORE, the instant petition for review on certiorari is
DENIED. The Decision of the Court of Appeals in CA-G.R. SP No.
85698 dated May 24, 2005 and its Resolution dated August 1, 2005
are AFFIRMED.
SO ORDERED.