April 7, 2014
a)
Backwages
11/13/06 - 9/28/07
10.50 mos.
[P]350 x 26 x 10.50
= [P]95,550.00
b)
1/12 of [P]95,550.00
SILP
= 7,962.50
= 1,531.25
[P]105,043.75
Separation Pay
11/25/03 - 12/6/06
= 3 yrs.
[P]350 x 26 x 3 27,300.00
c)
Unpaid Salaries
11/9 - 13/06
= 5 days
[P]350 x 5
1,750.00
[P]134,093.75
13,409.37
[P]147,503.12
SO ORDERED.3
The petitioner filed an appeal with the National Labor Relations
Commission (NLRC), and in its Decision4 dated September 23, 2008, the
NLRC reversed the decision of the LA and dismissed the case for illegal
dismissal. The dispositive portion of the NLRC decision reads:
WHEREFORE, the decision appealed from is hereby reversed and set aside
and in its stead a new one is rendered dismissing this case for lack of merit.
[Petitioners] however are ordered to refund to [Esteban] the amount of
[P]8,304.93 which was illegally deducted from her salary.
SO ORDERED.5
The NLRC, on the other hand, found that Esteban was dismissed for cause.
According to the NLRC, Esteban admitted that she violated the petitioner
when she made an unauthorized access to the POS system, and even shared
the password to another employee. The NLRC also rejected Estebans
assertion that her job as sales clerk does not occupy a position of trust, and
that her preventive suspension was not warranted. With regard to her waiver
and quitclaim, the NLRC upheld its validity as Esteban signed the same with
full awareness that she committed a wrong.17
Loss of trust and confidence as a
valid ground for dismissal from
employment
The antecedent facts that gave rise to Estebans dismissal from employment
are not disputed in this case. The issue is whether Estebans acts constitute
just cause to terminate her employment with the company on the ground of
loss of trust and confidence.
Loss of trust and confidence is premised on the fact that the employee
concerned holds a position of responsibility, trust and confidence. The
employee must be invested with confidence on delicate matters, such as the
custody, handling, care and protection of the employers property and
funds.18 "[W]ith respect to rank-and-file personnel, loss of trust and
confidence as ground for valid dismissal requires proof of involvement in
the alleged events in question, and that mere uncorroborated assertions and
accusations by the employer will not be sufficient."19
Esteban is, no doubt, a rank-and-file employee. The question now is whether
she occupies a position of trust and confidence.
Among the fiduciary rank-and-file employees are cashiers, auditors,
property custodians, or those who, in the normal exercise of their functions,
regularly handle significant amounts of money or property.20 These
employees, though rank-and-file, are routinely charged with the care and
custody of the employers money or property, and are thus classified as
occupying positions of trust and confidence.21
In this case, Esteban was a sales clerk. Her duties, however, were more than
that of a sales clerk. Aside from attending to customers and tending to the
shop, Esteban also assumed cashiering duties. This, she does not deny;
instead, she insists that the competency clause provided that her tasks were
that of a sales clerk and the cashiering function was labelled "to follow."22 A
perusal of the competency clause, however, shows that it is merely an
attestation on her part that she is competent to "meet the basic requirements
needed for the position [she] is applying for x x x". It does not define her
actual duties. As consistently ruled by the Court, it is not the job title but the
actual work that the employee performs that determines whether he or she
occupies a position of trust and confidence.23 In Philippine Plaza Holdings,
Inc. v. Episcope,24 the Court ruled that a service attendant, who was tasked to
attend to dining guests, handle their bills and receive payments for
transmittal to the cashier and was therefore involved in the handling of
company funds, is considered an employee occupying a position of trust and
confidence. Similarly in Estebans case, given that she had in her care and
custody the stores property and funds, she is considered as a rank-and-file
employee occupying a position of trust and confidence.
Proceeding from the above conclusion, the pivotal question that must be
answered is whether Estebans acts constitute just cause to terminate her
employment.
Loss of trust and confidence to be a valid cause for dismissal must be work
related such as would show the employee concerned to be unfit to continue
working for the employer and it must be based on a wilful breach of trust
and founded on clearly established facts.25 Such breach is wilful if it is done
intentionally, knowingly, and purposely, without justifiable excuse as
distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently.26 The loss of trust and confidence must spring from the
voluntary or wilful act of the employee, or by reason of some blameworthy
act or omission on the part of the employee.27
In this case, the Court finds that the acts committed by Esteban do not
amount to a wilful breach of trust. She admitted that she accessed the POS
system28 with the use of the unauthorized "123456" password. She did so,
however, out of curiosity and without any obvious intention of defrauding
the petitioner. As professed by Esteban, "she was acting in good faith in
verifying what her co-staff told her about the opening of the computer by the
use of the "123456" password, x x x. She even told her co-staff not to open
again said computer, and that was the first and last time she opened said
computer."29 Moreover, the petitioner even admitted that Esteban has her
own password to the POS system. If it was her intention to manipulate the
stores inventory and funds, she could have done so long before she had
knowledge of the unauthorized password. But the facts on hand show that
she did not. The petitioner also failed to establish a substantial connection
between Estebans use of the "123456" password and any loss suffered by
the petitioner. Indeed, it may be true that, as posited by the petitioner, it is
the fact that she used the password that gives cause to the loss of trust and
confidence on Esteban. However, as ruled above, such breach must have
been done intentionally, knowingly, and purposely, and without any
justifiable excuse, and not simply something done carelessly, thoughtlessly,
heedlessly or inadvertently. To the Courts mind, Estebans lapse is, at best, a
careless act that does not merit the imposition of the penalty of dismissal.
The Court is not saying that Esteban is innocent of any breach of company
policy.1wphi1 That she relayed the password to another employee is
likewise demonstrative of her mindless appreciation of her duties as a sales
clerk in the petitioners employ. But absent any showing that her acts were
done with "moral perverseness" that would justify the claimed loss of trust
and confidence attendant to her job,30 the Court must sustain the conclusion
that Esteban was illegally dismissed. As stated by the CA, "[s]uspension
would have sufficed as punishment, considering that the petitioner had
already been with the company for more than 2 years, and the petitioner
apologized and readily admitted her mistake in her written explanation, and
considering that no clear and convincing evidence of loss or prejudice,
which was suffered by the [petitioner] from [Estebans] supposed
infraction."31
Preventive suspension during
investigation
Preventive suspension is a measure allowed by law and afforded to the
employer if an employees continued employment poses a serious and
imminent threat to the employers life or property or of his co-workers.32 It
may be legally imposed against an employee whose alleged violation is the
subject of an investigation.33
In this case, the petitioner was acting well within its rights when it imposed
a 10-day preventive suspension on Esteban. While it may be that the acts
complained of were committed by Esteban almost a year before the
investigation was conducted, still, it should be pointed out that Esteban was
performing functions that involve handling of the petitioners property and
funds, and the petitioner had every right to protect its assets and operations
pending Estebans investigation.34
Sales negative variances as wage
deductions
The petitioner deducted the amount of P8,304.93 from Estebans last salary.
According to the petitioner, this represents the stores negative variance for
the year 2005 to 2006. The petitioner justifies the deduction on the basis of
alleged trade practice and that it is allowed by the Labor Code.
Article 113 of the Labor Code provides that no employer, in his own behalf
or in behalf of any person, shall make any deduction from the wages of his
employees, except in cases where the employer is authorized by law or
regulations issued by the Secretary of Labor and Employment, among
others. The Omnibus Rules Implementing the Labor Code, meanwhile,
provides:
SECTION 14. Deduction for loss or damage. Where the employer is
engaged in a trade, occupation or business where the practice of making
deductions or requiring deposits is recognized to answer for the
reimbursement of loss or damage to tools, materials, or equipment supplied
by the employer to the employee, the employer may make wage deductions
or require the employees to make deposits from which deductions shall be
made, subject to the following conditions:
(a) That the employee concerned is clearly shown to be responsible
for the loss or damage;
(b) That the employee is given reasonable opportunity to show cause
why deduction should not be made;
(c) That the amount of such deduction is fair and reasonable and shall
not exceed the actual loss or damage; and
(d) That the deduction from the wages of the employee does not
exceed 20 percent of the employees wages in a week.
In this case, the petitioner failed to sufficiently establish that Esteban was
responsible for the negative variance it had in its sales for the year 2005 to
2006 and that Esteban was given the opportunity to show cause the
deduction from her last salary should not be made. The Court cannot accept
the petitioners statement that it is the practice in the retail industry to deduct
variances from an employees salary, without more. In Nia Jewelry
Manufacturing of Metal Arts, Inc. v. Montecillo,35 the Court ruled that:
[T]he petitioners should first establish that the making of deductions from
the salaries is authorized by law, or regulations issued by the Secretary of
Labor. Further, the posting of cash bonds should be proven as a recognized
practice in the jewelry manufacturing business, or alternatively, the
petitioners should seek for the determination by the Secretary of Labor
through the issuance of appropriate rules and regulations that the policy the
former seeks to implement is necessary or desirable in the conduct of
business. The petitioners failed in this respect. It bears stressing that without
proofs that requiring deposits and effecting deductions are recognized
practices, or without securing the Secretary of Labor's determination of the
necessity or desirability of the same, the imposition of new policies relative
to deductions and deposits can be made subject to abuse by the
employers.1wphi1 This is not what the law intends.36
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision dated
November 25, 2009 and Resolution dated June 10, 2010 of the Court of
Appeals in CA-G.R. SP No. 107573 insofar as it reinstated with
modification the Decision of the Labor Arbiter dated September 28, 2007 are
AFFIRMED. Insofar as it affirmed respondent Glyza Esteban's preventive
suspension, the same are hereby REVERSED.
The Labor Arbiter is hereby ORDERED to re-compute the monetary award
in favor of Glyza Esteban and to exclude the award of backwages during
such period of preventive suspension, if any.
SO ORDERED.
THIRD DIVISION
G.R. No. 198620, November 12, 2014
P.J. LHUILLIER, INC. AND MARIO RAMON
LUDEA, Petitioners, v. FLORDELIZ VELAYO,Respondent.
DECISION
REYES, J.:
Before this Court is a petition for review on certiorari1 under Rule 45 of the
Decision2 dated June 30, 2011 of the Court of Appeals (CA) in CA-G.R. SP
No. 03069, affirming the finding of the National Labor Relations
Commission (NLRC) that respondent Flordeliz Velayo (respondent) was
illegally dismissed. The Resolution3 dated September 14, 2011 denied the
motion for reconsideration thereof.ChanRoblesVirtualawlibrary
The Facts
The essential antecedent facts are summarized in the assailed CA decision,
to wit:chanroblesvirtuallawlibrary
On June 13, 2003, (herein petitioner) PJ (CEBU) LHUILLIER, INC. (PJ
LHUILLIER for brevity) hired FLORDELIZ M. ABATAYO [sic] as
Accounting Clerk at the LH-4, Cagayan de Oro City Branch with a basic
monthly salary of P9,353.00. On February 9, 2008 appellant (herein private
respondent) was served with a Show Cause Memo by MARIO RAMON
LUDENA, Area Operations Manager of PJ Lhuillier (herein petitioner),
ordering her to explain within 48 hours why no disciplinary action should be
taken against her for dishonesty, misappropriation, theft or embezz[le]ment
of company funds in violation of Item 11, Rule V of the Company Code of
Conduct. Thereafter, (s)he was placed under preventive suspension from
February 9 to March 8, 2008 while her case was under investigation.
The charges against the appellant (herein private respondent) were based on
the Audit Findings conducted on October 29, 2007, where the overage
amount of P540.00 was not reported immediately to the supervisor, not
recorded at the end of that day.
On February 11, 2008, complainant (herein private respondent) submitted
her reply and admitted that she was not able to report the overage to the
supervisor since the latter was on leave on that day and that she was still
tracing the overage; and that the omission or failure to report immediately
the overage (sic) was just a simple mistake without intent to defraud her
employer.
On March 10, 2008, after the conduct of a formal investigation and after
finding complainant's (herein private respondent's) [explanations] without
serious misconduct and willful breach of trust. Thus, We disagree with the
Labor Arbiter's findings and conclusion that complainant was validly
dismissed from service.
xxxx
... Significantly, the complainant's omission or procedural lapse did not
cause any loss or damage to the company.7chanrobleslaw
Nonetheless, finding that the relations between the petitioners and the
respondent have become strained, the NLRC did not order the reinstatement
of the respondent. Thus:chanroblesvirtuallawlibrary
WHEREFORE, the instant appeal is GRANTED. The assailed decision is
hereby SET ASIDE and REVERSED, and a new one entered declaring that
complainant was ILLEGALLY DISMISSED. Accordingly, respondent PJ
(CEBU) LHUILLIER, INC. is hereby
ORDERED:chanroblesvirtuallawlibrary
(a) to pay complainant separation pay equivalent to one (1) month salary for
every year of service, a fraction of at least six (6) months being considered
as one (1) whole year in lieu of reinstatement due to strained relationship,
computed from June 13, 2003 up to the finality of the promulgation of this
judgment;cralawlawlibrary
(b) to pay complainant FULL BACKWAGES in accordance with
Bustamante vs. NLRC ruling (265 SCRA 061); and
(c) to pay ten percent (10%) of the total money award as attorney's fees.
SO ORDERED.8chanrobleslaw
The NLRC subsequently denied the petitioners' motion for reconsideration
thereof. On July 31, 2009, the petitioners filed a petition for certiorari in the
CA with prayer for issuance of a temporary restraining order (TRO) and/or
writ of preliminary injunction, invoking the following
issues:chanroblesvirtuallawlibrary
I
Invoking Article 27911 of the Labor Code, the CA agreed with the NLRC that
the respondent should have been reinstated without loss of seniority rights
and other privileges, with payment of her full backwages, inclusive of
allowances and other benefits or their monetary equivalent computed from
the time her compensation was withheld up to the time of actual
reinstatement. However, with the parties' relations now strained, the CA
conceded that the payment of a separation pay, along with backwages as a
separate and distinct relief, is an acceptable alternative to reinstatement. The
CA further awarded the respondent attorney's fees since she was forced to
litigate and incur expenses to protect her rights and interests by reason of the
unjustified acts of the petitioners.ChanRoblesVirtualawlibrary
Petition for Review in the Supreme Court
In this petition, the petitioners raise the following
issues:chanroblesvirtuallawlibrary
I.
II.
The appellate court agreed with the NLRC that the respondent's lapse was
"just a simple mistake without intent to defraud her employer;"13 that the
incident was neither serious nor indicative of serious misconduct; and that
her dismissal was disproportionate to her offense. It accepted the
respondent's explanation that her failure to report her cash overage of
P540.00 on October 29, 2007 to the branch manager, who was her
immediate superior, was because the latter was then on leave, and that for
days thereafter, she was hard-pressed in trying to trace and determine the
cause thereof. The CA noted that the respondent had worked for PJLI for
almost six years without any previous infractions of company rules, and that
she was once commended for a heroic act of defending her former branch
manager, Ms. Lilibeth Cortez, during a branch holdup.
On the other hand, the petitioners strongly maintain that under Rule V(A)
(11) of its Code of Conduct on "Dishonesty, Misappropriation, Theft or
Embezzlement of Company Funds or Property," the respondent committed a
"First Level Offense" which is punishable by outright dismissal. According
to the petitioners, the respondent committed the following acts which
constitute dishonesty and serious misconduct:chanroblesvirtuallawlibrary
1. The respondent did not enter the discovered cash overage in the
"operating system" (computerized cash ledger) of the branch on
October 29, 2007 notwithstanding that she was fully aware of the
company's policy that such unexplained receipt should be recorded
at the end of the business day;cralawlawlibrary
2. The respondent did not report the cash overage to her immediate
superior, Branch Manager Violette Grace Tuling (Tuling), upon the
latter's return from a leave of absence on November 3, 2007. Neither
did the respondent seek Tuling's help concerning the matter, and just
averred that she was afraid to be scolded by Tuling;cralawlawlibrary
3. The respondent deliberately lied about her cash overage after Tuling
confronted her on December 17, 2007;cralawlawlibrary
4. Again, the respondent falsely denied the cash overage when the
company auditor asked her to explain how it happened; and
5. The respondent concocted a cover-up by claiming that a computer
glitch occurred when she was about to post the cash overage in the
operating system.14
Ruling of the Court
There is merit in the petition.
It need not be stressed that the nature or extent of the penalty imposed on an
erring employee must be commensurate to the gravity of the offense as
weighed against the degree of responsibility and trust expected of the
employee's position. On the other hand, the respondent is not just charged
with a misdeed, but with loss of trust and confidence under Article 282(c) of
the Labor Code, a cause premised on the fact that the employee holds a
position whose functions may only be performed by someone who enjoys
the trust and confidence of management. Needless to say, such an employee
bears a greater burden of trustworthiness than ordinary workers, and the
betrayal of the trust reposed is the essence of the loss of trust and confidence
which is a ground for the employee's dismissal.15
The respondent's misconduct must
be viewed in light of the strictly fiduciary
nature of her position.
In addition to its pawnshop operations, the PJLI offers its "Pera Padala"
cash remittance service whereby, for a fee or "sending charge," a customer
may remit money to a consignee through its network of pawnshop branches
all over the country. On October 29, 2007, a customer sent P500.00 through
its branch in Capistrano, Cagayan de Oro City, and paid a remittance fee of
P40.00. Inexplicably, however, no corresponding entry was made to
recognize the cash receipt of P540.00 in the computerized accounting system
(operating system) of the PJLI. The respondent claimed that she tried very
hard but could not trace the source of her unexplained cash surplus of
P540.00, but a branch audit conducted sometime in December 2007 showed
that it came from a "Pera Padala"customer.
To be sure, no significant financial injury was sustained by the PJLI in the
loss of a mere P540.00 in cash, which, according to the respondent she
sincerely wanted to account for except that she was pre-empted by fear of
what her branch manager might do once she learned of it. But in treating the
respondent's misconduct as a simple negligence or a simple mistake, both
the CA and the NLRC grossly failed to consider that she held a position of
utmost trust and confidence in the company.
There are two classes of corporate positions of trust: on the one hand are
the managerialemployees whose primary duty consists of the management
of the establishment in which they are employed or of a department or a
subdivision thereof, and other officers or members of the managerial staff;
on the other hand are the fiduciary rank-and-file employees, such as
cashiers, auditors, property custodians, or those who, in the normal exercise
of their functions, regularly handle significant amounts of money or
property. These employees, though rank-and-file, are routinely charged with
the care and custody of the employer's money or property, and are thus
classified as occupying positions of trust and confidence.16
The respondent was first hired by the petitioners as an accounting clerk on
June 13, 2003, for which she received a basic monthly salary of P9,353.00.
On October 29, 2007, the date of the subject incident, she performed the
function of vault custodian and cashier in the petitioners' Branch 4
pawnshop in Capistrano, Cagayan de Oro City. In addition to her custodial
duties, it was the respondent who electronically posted the day's transactions
in the books of accounts of the branch, a function that is essentially separate
from that of cashier or custodian. It is plain to see then that when both
functions are assigned to one person to perform, a very risky situation of
conflicting interests is created whereby the cashier can purloin the money in
her custody and effectively cover her tracks, at least temporarily, by simply
not recording in the books the cash receipt she misappropriated. This is
commonly referred to as lapping of accounts.17 Only a most trusted clerk
would be allowed to perform the two functions, and the respondent enjoyed
this trust.
The series of willful misconduct
committed by the respondent in
mishandling the unaccounted cash
receipt exposes her as unworthy
of the utmost trust inherent in her
position as branch cashier and vault
custodian and bookkeeper.
The respondent insists that she never intended to appropriate the money but
was afraid that Tuling would scold her, and that she kept the money for a
long time in her drawer and only decided to take it home after her search for
the cause of the cash overage had proved futile. Both the CA and the NLRC
agreed with her, and held that what she committed was a simple mistake or
simple negligence.
The Court disagrees.
Granting arguendo that for some reason not due to her fault, the respondent
could not trace the source of the cash surplus, she nonetheless well knew and
understood the company's policy that unexplained cash must be treated as
miscellaneous income under the account "Other Income," and that the same
must be so recognized and recorded at the end of the day in the branch books
or "operating system." No such entry was made by the respondent, resulting
in unrecorded cash in her possession of P540.00, which the company learned
about only two months thereafter through a branch audit.
Significantly, when Tuling returned on November 3, 2007 from her leave of
absence, the respondent did not just withhold from her the fact that she had
an unaccounted overage, but she refused to seek her help on what to do
about it, despite having had five days to mull over the matter until Tuling's
return.
In order that an employer may invoke loss of trust and confidence in
terminating an employee under Article 282(c) of the Labor Code, certain
requirements must be complied with, namely: (1) the employee must be
holding a position of trust and confidence; and (2) there must be an act that
would justify the loss of trust and confidence.18 While loss of trust and
confidence should be genuine, it does not require proof beyond reasonable
doubt,19 it being sufficient that there is some basis to believe that the
employee concerned is responsible for the misconduct and that the nature of
the employee's participation therein rendered him unworthy of trust and
confidence demanded by his position.20
The petitioners are fully justified in claiming loss of trust and confidence in
the respondent. While it is natural and understandable that the respondent
should feel apprehensive about Tuling's reaction concerning her cash
overage, considering that it was their first time to be working together in the
same branch, we must keep in mind that the unaccounted cash can only be
imputed to the respondent's own negligence in failing to keep track of the
transaction from which the money came. A subsequent branch audit revealed
that it came from a "Pera Padala" remittance, implying that although the
amount had been duly remitted to the consignee, the sending branch failed to
record the payment received from the consigning customer. For days
following the overage, the respondent tried but failed to reconcile her
records, and for this inept handling of a "Pera Padala" remittance, she
already deserved to be sanctioned.
Further, as a matter of strict company policy, unexplained cash is recognized
at the end of the day as miscellaneous income. Inexplicably, despite being
with the company for four years as accounting clerk and cashier, the
respondent failed to make the required entry in the branch operating system
confidence, it is sufficient that there is some basis for the same or that the
employer has a reasonable ground to believe that the employee is
responsible for the misconduct, thus making him unworthy of the trust and
confidence reposed in him.27 Therefore, if there is sufficient evidence to
show that the employer has ample reason to distrust the employee, the labor
tribunal cannot justly deny the employer the authority to dismiss him.
[28
Indeed, employers are allowed wider latitude in dismissing an employee
for loss of trust and confidence, as the Court held in Atlas Fertilizer
Corporation v. NLRC:[29
As a general rule, employers are allowed a wider latitude of discretion in
terminating the services of employees who perform functions which by their
nature require the employer's full trust and confidence. Mere existence of
basis for believing that the employee has breached the trust of the employer
is sufficient and does not require proof beyond reasonable doubt. Thus,
when an employee has been guilty of breach of trust or his employer has
ample reason to distrust him, a labor tribunal cannot deny the employer the
authority to dismiss him. x x x.30 (Citations omitted)
Furthermore, it must also be stressed that only substantial evidence is
required in order to support a finding that an employer's trust and confidence
accorded to its employee had been breached. As explained in Lopez v.
Alturas Group of Companies:[31
[T]he language of Article 282(c) of the Labor Code states that the loss of
trust and confidence must be based on willful breach of the trust reposed
in the employee by his employer. Such breach is willful if it is done
intentionally, knowingly, and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. Moreover, it must be based onsubstantial evidence and not
on the employer's whims or caprices or suspicionsotherwise, the
employee would eternally remain at the mercy of the employer. Loss of
confidence must not be indiscriminately used as a shield by the employer
against a claim that the dismissal of an employee was arbitrary. And, in order
to constitute a just cause for dismissal, the act complained of must be
work-related and shows that the employee concerned is unfit to
continue working for the employer. In addition, loss of confidence as a
just cause for termination of employment is premised on the fact that
the employee concerned holds a position of responsibility, trust and
confidence or that the employee concerned is entrusted with confidence with
SO ORDERED.
SECOND DIVISION
WENSHA SPA CENTER,
INC. and/or XU ZHI JIE,
Petitioners,
- versus -
Promulgated:
LORETA T. YUNG,
Respondent.
X -------------------------------------------------------------------------------------- X
DECISION
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules
of Court filed by an employer who was charged before the National Labor
Relations Commission (NLRC) for dismissing an employee upon the advice
of a Feng Shui master. In this action, the petitioners assail the May 28, 2008
Decision[1] and October 23, 2008 Resolution[2] of the Court of
Appeals (CA) in CA-G.R. SP No. 98855 entitled Loreta T. Yung v. National
Labor Relations Commission, Wensha Spa Center, Inc. and/or Xu Zhi Jie.
THE FACTS:
The Court finds the LA ruling that states, [a]bsent any proof submitted
by the complainant, this office finds it more probable that the complainant
was dismissed due to loss of trust and confidence, [20] to be utterly erroneous
as it is contrary to the applicable rules and pertinent jurisprudence. The onus
of proving a valid dismissal rests on the employer, not on the employee. [21] It
is the employer who bears the burden of proving that its dismissal of the
employee is for a valid or authorized cause supported by substantial
evidence. [22]
According to the NLRC, [p]erusal of the entire records show that
complainant left the respondents premises when she was confronted with the
infractions imputed against her.[23] This information was taken from the
affidavit[24] of Princess Delos Reyes (Delos Reyes) which was dated March
21, 2005, not in Wenshas earlier position paper or pleadings submitted to the
LA. The affidavits[25] of employees attached to Delos Reyes affidavit were
all dated November 19, 2004 indicating that they were not yet executed
when the complaints against Loreta were supposedly being investigated in
August 2004.
Thousand
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 148410
of his dismissal, the petitioner was the Chief Purser of the M/V Surigao
Princess receiving a monthly salary of P5,000.00.3 As the Chief Purser, the
petitioner handled the funds of the vessel and was the custodian of all the
passage tickets and bills of lading.4 It was his responsibility, among other
things, to issue passage tickets and to receive payments from the customers
of the respondent, as well as to issue the corresponding official receipts
therefor.5 He was also tasked to disburse the salaries of the crewmen of the
vessel.6
Sometime in the last week of May 1994, the newly designated jefe de
viaje7 of the M/V Surigao Princess, in a surprise examination, discovered
that several yellow passengers duplicate original8 of yet to be sold or
unissued passage tickets already contained the amount of P88.00 the fare
for adult passengers for the Cagayan de Oro to Jagna, Bohol route. He
noticed that three other original copies which made up the full set did not
bear the same impression, although they were supposed to have been
prepared at the same time. Acting on what appeared to be a strong evidence
of short-changing the company, the jefe de viaje dug deeper on what he
uncovered. As expected, he found inordinate amount of ticket issuances for
children at half the fare of P44.00 in Voyage 434 of the vessel.9 When word
of the anomaly reached the respondent, it waited for the petitioner to return
to Cebu City in the hope of shedding more light on the matter.
On May 30, 1994, shortly after disembarking from the M/V Surigao Princess
at the port of Cebu, the petitioner received a memorandum of even date from
Personnel Officer Artemio F. Aiga relative to the irregularity in the "alleged
involvement in anomaly of ticket issuance," instructing him to forthwith
report to the main office and to explain in writing why no disciplinary action
should be meted on him or to submit himself to an investigation. The
memorandum warned the petitioner that his failure to comply with the
aforementioned instructions would be construed as a waiver of his right to
be heard. It also informed the petitioner of his immediate preventive
suspension until further notice.10 The petitioner, however, refused to
acknowledge receipt of the memorandum which was personally served on
him,11 prompting the respondent to mail the same, and which the petitioner
received days later.121awphi1.nt
Meanwhile, upon his arrival at the office, the petitioner was questioned by
Mr. Carlo S. Go, Senior Executive Vice-President and General Manager of
respondent. Thereafter, petitioner was preliminarily investigated by Mr.
Aiga wherein his statements were taken down.13 After the initial
investigation, the petitioner was told to sign its minutes but he adamantly
refused, claiming the same to be "self-incriminatory."14 The next day, the
petitioner was replaced by Mr. Felix Almonicar as the Chief Purser of the
M/V Surigao Princess.15 As a result of his replacement, the petitioner
thought he was fired from his job.
Barely a week after the petitioners preventive suspension and pending his
administrative investigation, he filed a complaint against the respondent for
illegal dismissal, non-payment of overtime pay, 13th month pay and other
monetary benefits with the NLRC, Regional Arbitration Branch No. VII,
Cebu City. The case was docketed as NLRC No. RAB-VII-06-0607-84. The
petitioner alleged that the ground for his dismissal, i.e., loss of trust and
confidence, was ill-motivated and without factual basis. He did not deny that
the anomalous tickets were in his possession, but denied that he was guilty
of any wrongdoing. He dismissed the handwriting on the tickets as his, and
claimed that he was singled out for the dismissal. He averred that the
"trumped-up" charge was a clever scheme resorted to by his employer so it
could avoid paying him monetary benefits, considering that he was with the
company for more than sixteen (16) years. He argued that assuming that it
was he who wrote those entries in the tickets, the fact remains that they were
still unissued; hence, no money went to his pocket and no material prejudice
was caused to the respondent. According to the petitioner, he would not
jeopardize his livelihood for something as miniscule as P88.00. He prayed
not for reinstatement but for separation pay, monetary benefits plus
damages.16
On June 9, 1994, the respondent received its summons.17 Short of preempting its administrative investigation, coupled with the petitioners
obstinate refusal to submit to further investigation, the respondent decided to
terminate the petitioners employment for loss of trust and confidence in
connection with passage tickets nos. 636742-636748.18 A copy of the notice
of termination19 dated June 10, 1994 was sent by mail to the petitioner.
After hearing on the merits, Labor Arbiter Ernesto F. Carreon rendered his
Decision dated March 13, 1995, finding the petitioners dismissal illegal. He
ruled that the respondent failed to substantiate and prove that the petitioner
committed any wrongdoing. He found the evidence of impression on the
tickets inadequate, considering that the petitioner was not the only person in
the vessel handling or issuing the passage tickets. According to the Labor
Arbiter, the anomalous entries on the unissued tickets could not be attributed
entirely to the petitioner; thus, there was no reason for the respondent to lose
its trust and confidence on the petitioner.20 The dispositive portion of the
decision reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering
respondent Sulpicio Lines, Inc., to pay the complainant Vicente C. Etcuban,
Jr. the following :
1. Separation pay --------------------------------
P80,480.00
2. Backwages ------------------------------------
40,703.23
2,235.50
P123,418.73
vvvvvvvvvvvv
corresponding 13th month pay and leave (sick and vacation) benefits for the
whole period covered.
SO ORDERED.25
In affirming the decision of the Labor Arbiter, the NLRC ruled as follows
We do not find the allegedly highly irregular condition of the tickets valid
reason to even suspend, much less terminate the complainant-appellant for
loss of trust and confidence. It has not been established by clear and
competent evidence that the alleged irregular condition of the tickets
was attributable to the complainant or to other members of the team of
inspectors who have equal access to the tickets. This is vital in view of the
complainants denial to have committed the same. Moreover, there is no
showing at all on record that the respondent suffered damage as a
consequence of the existence of these tickets with entry of the rate or cost
of transportation from Cagayan de Oro City to Jagna, Bohol, or that the
complainant has benefited from the same. To establish loss of confidence,
the employer must have 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, and makes
him absolutely unfit to continue with his employment.
With more reason, we do not find valid loss of confidence to warrant
dismissal the alleged "stabbing the back" by the complainant-appellant of
the respondent-appellant by the mere filing of the case. This act of the
complainant-appellant is not a misconduct. It is a valid recourse to the
instrumentality of the government that can give him ample protection and
labor justice especially when he felt that his 16 years of service is being
threatened.26
The respondent filed a motion for reconsideration27 which was denied by the
NLRC in a Resolution28promulgated on April 15, 1996. It stressed its finding
that the petitioners alleged breach of trust was not sufficiently established
by the evidence on record. It further ruled that the petitioners indefinite
suspension from work amounted to his constructive dismissal.29
On June 14, 1996, the respondent filed a petition for certiorari30 with this
Court, ascribing to the NLRC, among others, grave abuse of discretion when
it ruled that the preventive suspension of the petitioner was tantamount to
constructive dismissal. Following the pronouncement in St. Martin Funeral
Home v. NLRC ,31 the petition was referred to the Court of Appeals for its
appropriate action and disposition.32
On December 28, 2000, the Court of Appeals reversed and set aside the
NLRC decision.33 It ruled that there was valid and just cause for the
petitioners dismissal, as there was sufficient basis for loss of trust and
confidence on him. The appellate court amplified that in cases of dismissal
for loss of trust and confidence, it is not required that there is proof beyond
reasonable doubt. It ratiocinated, thus:
The office of a purser involves a high degree of trust and confidence. Private
respondent had access to company funds as it was his sensitive duty to issue
tickets and accept payments from the passengers of the vessel. When the
passenger copies of unissued tickets in his custody were written with the
amount of P88.00 while the other copies were clean, this already constituted
culpable tampering of the tickets. This Court is fully aware of the standard
operating procedure that tickets should be accomplished only at the time of
their issuance and that the duplicate or triplicate copies should contain exact
carbon impressions of the entries in the original copies. It was then highly
anomalous that the original copies of the tickets were already written with
the amount of P88.00 when they were still unissued. More so, because the
amount of P88.00 were not duplicated in the other copies of the tickets.
There was a clear case of tampering of the unissued tickets in private
respondents possession. This clearly was intended to facilitate the anomaly
of entering in the duplicate copies an amount different if not lower than what
is stated in the original copy and remitting to the petitioner the lower
amount.
Complainant was the custodian of the tickets with the authority to issue the
same. The tampered tickets were in his possession. As such, it was therefore
reasonable and logical for petitioner to conclude if not certain a wellgrounded moral conviction that private respondent Etcuban committed the
tampering. Even if it is allowed that another person committed the
tampering, private respondent was still culpable as the tampered tickets were
found in his possession and the same could not have been done without his
conformity or negligence. His possession of the tickets with unexplained
written entries in the passenger copies of the unissued tickets was by itself
sufficient basis enough to prove respondents culpability.1a\^/phi1.net He
was the custodian of the tickets and he should be culpable for any violation
of the integrity of the tickets. On this score, this Court agrees with petitioner
that the anomalous entries in the tickets in his custody was sufficient basis
for petitioner to lose trust and confidence on private respondent.
In cases of dismissal for loss of trust and confidence, it is not required that
there is proof beyond reasonable doubt. It is sufficient that there is sufficient
basis for loss of trust and confidence.34
In the instant case, this Court holds that there was sufficient basis for
petitioner to lose trust and confidence in private respondent so as to justify
his termination. It may be pertinent to note that private respondents overall
conduct is inconsistent with innocence. Private respondent did not wait for
the result of petitioners investigation and filed a complaint for illegal
dismissal despite private respondents admission that he was merely placed
under preventive suspension. Preventive suspension is allowed under
Section 3, Rule XIV of the Implementing Rules of the Labor Code. While it
is true that no penalty should be attached to an employees recourse to the
NLRC, his immediate filing of the case in the light of the discovery of the
anomalous tickets only betrays his culpability.
It bears emphasis that private respondents position as purser was highly
sensitive. As such, he must demonstrate utmost honesty and fidelity to the
trust reposed in him. On its part, petitioner was well within its prerogative to
require from its purser a high degree of uprightness and probity. Their
integrity was impaired by the tampered tickets in his possession. There was
sufficient basis for petitioner to lose trust and confidence in private
respondent. Having lost its trust and confidence, petitioner cannot be
expected to allow private respondent to handle the funds of the corporation.
It would be highly unfair to require petitioner to continue employing private
respondent in such sensitive post in the absence of full trust and confidence.
The requirement of due process has been fully satisfied in the instant case.
Private respondent was served notice for investigation as he himself
admitted that he submitted himself to an investigation on May 30, 1994
though he did not signed (sic) the statement as it was self-incriminatory. It is
true that when he filed the case, private respondent has not been served
notice of termination precisely because he took it upon himself to consider
that he was terminated without waiting for the result of the investigation. At
any rate, after petitioner received the summons of the instant case, it
subsequently served upon private respondent a notice of termination.35
The petitioners motion for reconsideration36 was denied by the Court of
Appeals for lack of merit in its Resolution37 dated May 31, 2001.
Aggrieved at the unfortunate turn of events, the petitioner took the present
recourse, and now asks the Court to reinstate and uphold the NLRC
decision. The petitioner anchors his petition for review on the following
grounds:
I
PUBLIC RESPONDENT ACTED IN VIOLATION OF EXISTING LAWS
WHEN IT ORDERED THE DISMISSAL OF THE PETITIONER DESPITE
HIS LONG YEARS IN THE COMPANY AND THE MINIMAL AMOUNT
INVOLVED IN THE CASE.
II
PUBLIC RESPONDENT ACTED IN VIOLATION OF EXISTING LAWS
AND JURISPRUDENCE IN ORDERING THE DISMISSAL OF
PETITIONER DESPITE THE FACT THAT NO LOSS OR PREJUDICE
WAS SUFFERED BY THE COMPANY FROM HIS SUPPOSED
INFRACTION.
III
PUBLIC RESPONDENT COMMITTED A SERIOUS LEGAL ERROR IN
ORDERING THE DISMISSAL OF THE PETITIONER DESPITE THE
FACT THAT OTHER EMPLOYEES COULD HAVE FILLED-UP THE
TICKETS IN QUESTION.
IV
PUBLIC RESPONDENT LEGALLY ERRED IN DELETING THE
AWARD OF 13th MONTH PAY PREVIOUSLY GRANTED TO
PETITIONER.38
The petition is bereft of merit.
The petitioner insists that his dismissal was without factual and legal basis.
Echoing the findings of the Labor Arbiter and the NLRC, he maintains that
the handwriting on the irregular tickets was not proven to be his. He argues
that the reluctance of the respondent to take on his challenge to subject the
same tickets to a handwriting expert proved his inculpability.39 Moreover, he
points out that the very testimony of the respondents Personnel Officer, Mr.
Aiga, to the effect that the latter had no idea whose handwriting it was on
the questioned tickets, helped clear his innocence.40
Upon the other hand, the respondent counters that there was sufficient basis
for its loss of trust and confidence on petitioner; the tampered tickets were
found in his possession, and as Chief Purser, he was the custodian of the
unissued tickets. The respondent avers that proof beyond reasonable doubt is
not necessary to justify loss of trust and confidence, it being sufficient that
there is some basis to justify it.41
We agree with the respondent.
Law42 and jurisprudence have long recognized the right of employers to
dismiss employees by reason of loss of trust and confidence.43 More so, in
the case of supervisors or personnel occupying positions of responsibility,
loss of trust justifies termination.44 Loss of confidence as a just cause for
termination of employment is premised from the fact that an employee
concerned holds a position of trust and confidence. This situation holds
where a person is entrusted with confidence on delicate matters, such as the
custody, handling, or care and protection of the employers property. But, in
order to constitute a just cause for dismissal, the act complained of must be
"work-related" such as would show the employee concerned to be unfit to
continue working for the employer.45
The degree of proof required in labor cases is not as stringent as in other
types of cases.46 It must be noted, however, that recent decisions of this
Court have distinguished the treatment of managerial employees from that of
rank-and-file personnel, insofar as the application of the doctrine of loss of
trust and confidence is concerned. Thus, with respect to rank-and-file
personnel, loss of trust and confidence as ground for valid dismissal requires
proof of involvement in the alleged events in question, and that mere
uncorroborated assertions and accusations by the employer will not be
sufficient. But as regards a managerial employee, the mere existence of a
basis for believing that such employee has breached the trust of his employer
would suffice for his dismissal. Hence, in the case of managerial employees,
proof beyond reasonable doubt is not required, it being sufficient that there
is some basis for such loss of confidence, such as when the employer has
reasonable ground to believe that the employee concerned is responsible for
the purported misconduct, and the nature of his participation therein renders
him unworthy of the trust and confidence demanded by his position.47
In the present case, the petitioner is not an ordinary rank-and-file employee.
The petitioners work is of such nature as to require a substantial amount of
trust and confidence on the part of the employer. Being the Chief Purser, he
occupied a highly sensitive and critical position and may thus be dismissed
on the ground of loss of trust and confidence. One of the many duties of the
petitioner included the preparation and filling up passage tickets, and
indicating the amounts therein before being given to the passengers. More
importantly, he handled the personnel funds of the MV Surigao Princess.
Clearly, the petitioners position involves a high degree of responsibility
requiring trust and confidence. The position carried with it the duty to
observe proper company procedures in the fulfillment of his job, as it relates
closely to the financial interests of the company.
The requirement that there be some basis or reasonable ground to believe
that the employee is responsible for the misconduct was sufficiently met in
the case at bar. As Chief Purser, the petitioner cannot feign ignorance on the
irregularity as he had custody of the tickets when the anomaly was
discovered. It would not be amiss to suppose that the petitioner, who would
benefit directly or indirectly from the fruits of such fraudulent scheme, was a
party to such irregularity. That there were other pursers who could have done
the irregularity is of no moment. It bears stressing that the petitioner was the
Chief Purser who was tasked to directly supervise each and every purser
under him. While, indeed, it was not proved that he was the one who made
the irregular entries on the tickets, the fact that he did not lift a finger at all
to determine who it was is a sad reflection of his job. In fact, even if the
petitioner had no actual and direct participation in the alleged anomalies, his
failure to detect any anomaly in the passage tickets amounts to gross
negligence and incompetence, which are, likewise, justifiable grounds for
his dismissal. Be that as it may, to our mind, it is no longer necessary to
prove the petitioners direct participation in the irregularity, for what is
material is that his actuations were more than sufficient to sow in his
employer the seed of mistrust and loss of confidence.
Neither are we impressed with the petitioners claim that he was singled out,
or that his dismissal was a ploy to obviate payment of his retirement
benefits. There is nothing in the records to show that beyond making these
allegations, the petitioner did nary of anything to substantiate the same.
Finally, the petitioner theorizes that even assuming that there was evidence
to support the charges against him, his dismissal from the service is
unwarranted, harsh and is not commensurate to his misdeeds, considering
the following: first, his 16 long years of service with the company; second,
no loss or damages was suffered by the company since the tickets were
unissued; third, he had no previous derogatory record; and, lastly, the
amount involved is miniscule.48 Citing jurisprudence,49 he appeals for
compassion and requests that he be merely suspended, or at the very least,
given separation pay for his length of service.501awphi1.nt
We find no merit in the petitioners contention.
We are not unmindful of the foregoing doctrine, but after a careful scrutiny
of the cited cases, the Court is convinced that the petitioners reliance
thereon is misplaced. It must be stressed that in all of the cases cited, the
employees involved were all rank-and-file or ordinary workers. As pointed
out earlier, the rules on termination of employment, penalties for infractions,
insofar as fiduciary employees are concerned, are not necessarily the same
as those applicable to the termination of employment of ordinary employees.
Employers, generally, are allowed a wider latitude of discretion in
terminating the employment of managerial personnel or those of similar rank
performing functions which by their nature require the employers trust and
confidence, than in the case of ordinary rank-and-file employees.51
The fact that the petitioner has worked with the respondent for more than 16
years, if it is to be considered at all, should be taken against him. The
infraction that he committed, vis-a-vis his long years of service with the
company, reflects a regrettable lack of loyalty. Loyalty that he should have
strengthened instead of betrayed. If an employees length of service is to be
regarded as a justification for moderating the penalty of dismissal, it will
actually become a prize for disloyalty, perverting the meaning of social
justice and undermining the efforts of labor to cleanse its ranks of all
undesirables.52
The argument that the petitioner was not guilty of anything because the
tickets were never issued or that he had received nothing from the
passengers that he could short-change the company would not mitigate his
liability, nor efface the respondents loss of trust and confidence in him.
Whether or not the respondent was financially prejudiced is immaterial.
Also, what matters is not the amount involved, be it paltry or gargantuan;
rather the fraudulent scheme in which the petitioner was involved, which
constitutes a clear betrayal of trust and confidence. In fact, there are
indications that this fraudulent act had been done before, and probably
would have continued had it not been discovered.
Moreover, the records show that the petitioner is not as blameless as he
claimed to be. In 1979 and 1980, he was suspended by the respondent for
several company infractions,53 which the petitioner did not deny. It must also
be stressed that when an employee accepts a promotion to a managerial
position or to an office requiring full trust and confidence, he gives up some
of the rigid guaranties available to an ordinary worker. Infractions which, if
committed by others, would be overlooked or condoned or penalties
mitigated may be visited with more serious disciplinary action.54
It cannot be over emphasized that there is no substitute for honesty for
sensitive positions which call for utmost trust. Fairness dictates that the
respondent should not be allowed to continue with the employment of the
petitioner who has breached the confidence reposed on him.55 Unlike other
just causes for dismissal, trust in an employee, once lost, is difficult, if not
impossible, to regain.56 There can be no doubt that the petitioners
continuance in the extremely sensitive fiduciary position of Chief Purser
would be patently inimical to the respondents interests. It would be
oppressive and unjust to order the respondent to take him back, for the law,
in protecting the rights of the employee, authorizes neither oppression nor
self-destruction of the employer.57
Anent the petitioners request for separation pay, the Court is constrained to
deny the same. Well-settled is the rule that separation pay shall be allowed
only in those instances where the employee is validly dismissed for causes
other than serious misconduct or those reflecting on his moral
character.58 Inasmuch as reason for which the petitioner was validly
separated involves his integrity, which is especially required for the position
of purser, he is not worthy of compassion as to deserve at least separation
pay for his length of service.59
so,
however,
respondent
filed
complaint
for
illegal
Serious
misconduct or
willful
disobendience by the employee of the lawful
orders of his employer or his representatives in
connection with his work;
xxxxxxxxx
(e) Other causes analogous to the foregoing.
[12]
February 5, 2014
desired. Hill added that "[t]he beginning and the end of the class were poorly
structured with students both coming late and leaving early with no apparent
expectations to the contrary."
On January 17, 1994, Santos submitted to the Personnel Department of the
School a memorandum/form,8 which stated her assignment preference for
the school year 1994-1995. She indicated therein that she planned to return
to the School staff for the said school year and she did not prefer a change of
teaching assignment.
On March 11, 1994, Hill observed Santoss Spanish I class. In the Classroom
Standards Evaluation Form9 he accomplished, Hill stated that Santos needed
improvement on the following areas: (1) uses effective questioning
techniques; (2) uses appropriate praise; (3) deals with students in a fair and
consistent manner; (4) is punctual and time efficient; (5) states and enforces
academic and classroom behavior expectations in a positive manner; (6)
reinforces appropriate behavior; (7) organizes the classroom to enhance
learning and minimize disruption; and (8) states expectations and ideas
clearly.
On May 30, 1994, Hill completed a Summary Evaluation Form10 of Santoss
performance. Hill stated, among others, that Santos should improve on
managing the students punctuality and time efficiency. Hill added that
instructions were not well stated and presented to the class. He said that
Santos needed to identify and state positively the expectations she has for
the students. In a Professional Standards Form11 accomplished on the same
date, Santos was found to be in need of improvement in these areas: (1) has
in-depth knowledge of the appropriate subject matter; and (2) clearly defines
consequences of inappropriate behavior and is consistent in follow through.
In the meantime, for the school year 1994-1995, Santos agreed to teach five
classes of Filipino.12 On November 7, 1994, Santos also informed the School
of her assignment preference for the incoming school year 1995-1996. In a
memorandum/form13 submitted to the Personnel Department of the School,
Santos indicated that she did not prefer a change of teaching assignment. In
the school year 1995-1996, Santos again taught five classes of Filipino.14
Goals:
Improve classroom instruction through the implementation of the areas
marked as "does not meet minimum standards," "needs improvement," or
"not observed" in classroom observations from October 1993 through
February 1996, as well as concerns noted in your Summary Evaluation of
May 30, 1994. These areas include PLANNING, THE TEACHING ACT,
CLIMATE, MANAGEMENT as specified and dated below.
Initial focus for the first part of this GROWTH PLAN, namely the fourth
quarter of SY 1995-96 will be on PLANNING. By focusing on planning
first, other issues relative to climate and management may also be assisted.
This Growth Plan will be reviewed and revised as necessary for SY 1996-97.
Actions:
1. Write daily lesson plans (2/96)
2. Have clearly defined lesson objectives that tie into unit objectives
as well as into the school curriculum (2/96)
3. Incorporate a variety of activities, resources and teaching strategies
into the lesson (2/96)
4. Plan for the entire instructional period (2/96)
5. Provide an instructional sequence which is clear and logical,
leading to stated objectives (2/96)
6. Use effective questioning techniques (2/96, 3/94, 10/93)
7. Provide sufficient guided practice and modeling to ensure success,
particularly homework assignments (11/95)
8. Develop rapport with and between students by creating a supportive
environment (2/96, 11/95)
9. Be punctual and time efficient (2/96, 3/94, 10/93)
planning first, other issues relative to climate and management may also
have assisted and can now be directly addressed in the 1996-97 school year.
Actions:
I. Continue the following, which was an area of focus in SY 1995-96:
A. Short Term Planning
1. Write daily lesson plans (2/96)
2. Have clearly defined lesson objectives that tie into unit
objectives as well as into the school curriculum (2/96)
3. Incorporate a variety of activities, resources and
teaching strategies into the lesson (2/96)
4. Plan for the entire instructional period (2/96)
II. Focus on the following areas in need of improvement:
(Note: these items have been grouped by topic area in this revised
growth plan and therefore re-numbered from the listing in the original
growth plan)
B. Medium and Long Range Planning
5. Provide an instructional sequence which is clear and
logical, leading to stated objectives (2/96)
6. Be punctual and time efficient (2/96, 3/94, 10/93)
C. Classroom Climate and Management
7. Develop rapport with and between students by creating
a supportive environment (2/96, 11/95)
this issue from our previous meetings, and to have a planning book that does
not reflect proper planning, does not address the concerns of that Growth
Plan; instead the concerns not only persist, they become more problematic.
Vangie, to quote you, you "play it by ear." Flexibility only works when you
are flexible within a clear plan. Otherwise, "playing it by ear" is
synonymous with "winging it day-by-day." You must plan, and you need to
begin your second semester outlines now. To this end, I am asking that you
present a draft of your second semester syllabi and plans at our next
meeting."
The memo34 of Loy on November 15, 1996, further stated:
Thank you for coming to speak with me as follow-up to our meeting
yesterday and to share your impressions. You stated that you feel I am being
too hard on you. However, when we reviewed your lesson planning book
which you brought with you we noted the following:
- For your Filipino 1 classes, there were lesson plans for November 6,
7 and 13, but no lesson plans for November 11 and 12.
- For your Conversational Filipino and Filipino 3 classes, there were
at least three "lesson plans" with no activities listed.
- For your Filipino A1/S2, you had gone back to write, using a pen
with a slightly different colored ink to fill in parts of the lesson plan
which I noted as deficient in my observation report of October 29.
- There are no lesson plans for any class beyond todays date.
Clearly, this indicates a lack of planning. With this as your planning guide, I
cannot agree that I am "being too hard on you." As I have stated, your daily
planning is often vague at best; your long term planning does not exist in
writing. A review of your planning book today only supports this.
(Emphases ours.)
In the memo35 dated December 6, 1996, Loy disclosed to Santos that:
Concern was expressed by both Mr. Hammett and myself that, after eight
months working with your Professional Growth Plan, we are still focused on
but one of the four major areas of concern. Still to be addressed, following
Planning, are concerns under the Teaching Act, Climate and Management.
The third quarter is a crucial one for you, Vangie. We need to move beyond
the initial concern in the Growth Plan to work in the other areas as well.
On January 22, 1997, Loy observed the Filipino 3 class of Santos. The
Classroom Standards Evaluation Form36he accomplished stated that Santos
still needed improvement on the following aspects: (1) has daily lesson plans
written out; (2) incorporates a variety of activities, resources and teaching
strategies into the lesson; (3) provides an instructional sequence which is
clear and logical, leading to stated objectives; and (4) states and enforces
academic and classroom behavior expectations in a positive manner. Loy
also remarked that Santoss "lesson plans do not give a clear sense of
direction towards a specified goal other than to reach the end of the chapter
and the book."
In his memo37 dated January 24, 1997, Loy made known his apparent
frustration at Santoss performance in this manner:
As I said today, Vangie, I find myself continuing to use the phrases "vague"
and "lacking specifics" in reviewing your daily, unit, or semestral plans.
Moreover, suggestions and contributions made in our meetings to address
those concerns do not seem to affect your planning. In your lesson plans,
your objectives are basic and elementary; your activities, vacuous.
Objectives such as "enrich vocabulary," "identify the theme of the chapter,"
and "participate actively in discussion" (for a class of 7) are not fitting of a
high school lesson plan, much less a pre-International Baccalaureate course.
Your activities do not specify the format, criteria, analytical features, or
relationship to the days/courses objectives.
While you claim that you are doing much more than what you have in your
lesson plans, my contention is then, that the plans do not accurately reflect
the lesson. As it is, I entered a question mark next to "plans for the entire
instructional period" because your plan gave so little direction about what
you were planning that day. If you know what the specific objectives are,
based on assessment goals, and you plan to include an activity as part of the
lesson, include it in the plan and be specific about what it is, what the
criteria are, and why it is important. (Emphasis ours.)
Since then, Loy continued to voice his concerns on the planning process of
Santos. He noted on his memo38dated February 7, 1997 that the objectives in
Santoss daily lesson plans were very generic and the activities listed were
elementary and very basic. Judging from the lesson plans, Loy concluded
that Santoss planning is still substandard. On February 28, 1997, Loy sent
another memo39 to Santos, which informed her in no uncertain terms that the
growth they see was insufficient. Other than the substandard lessons, Loy
commented that there was virtually no written work nor adequate direction
in her syllabus. Loy also warned her that "continuance in this manner
without marked improvement cannot be tolerated."
In a memo40 dated March 14, 1997, Loy called Santoss attention about a
problem they discovered in one of her classes. Loy said:
With regards to IBS2 Filipino, three of the eight students did not submit
world literature papers as required by the International Baccalaureate
syllabus. Why? You have had these students for the past two years and know
the syllabus of the course. This required component should have been part of
the planning of the course throughout. Although these students are not IB
diploma candidates, the paper should have been drafted, revised, reviewed
and polished throughout the course of the past two years. As you admitted,
you did not know until the day the papers were due that these students were
not submitting a paper.
With regards to your lesson planning, there is still a marked absence of
writing activities in all your classes. x x x
Vangie, I hear that you feel you are doing a good job. What worries me,
then, is your perception of how problematic this situation is. You are now
one year into a Professional Growth Plan with incremental movement in just
one of several areas of concern. I am disappointed that you believe that I do
not want to have you continue as a member of our faculty. I have worked
with you for the past twelve months on this growth plan, meeting with you
no fewer [than] fifteen times since August 1996. Throughout this time, I
have offered observations on the areas of deficiency and suggestions for
ways to improve. Ms. Butt and Mr. Hammett have also been supportive of
your stated desire to improve. We want you to be a successful teacher in the
area you teach for the sake of our students. If, as you have confided, Filipino
is not the language you would choose to teach, what are the options? Mr.
Hammett said again for the record that he did try to schedule a section of
Spanish this year, but was unable to do so. That situation may also exist next
year as we already have four other teachers teaching Spanish. Knowing all
this, it may be difficult to consider your placement next year.
I look forward to continued discussions with you, Vangie, as we search for
ways to assist your improvement toward success as a teacher. I think we all
realize, however, that we are running out of time.
On April 2, 1997, Jeffrey Hammett sent a memo41 to Santos, likewise
expressing his disappointment with the latters performance. Hammett
stated:
Vangie, we have been focusing on your planning for just over one year now,
and this is just the first of four areas we wanted to address in your growth
plan of last March. We have met with you more than thirty times this past
year to check-on, discuss, and help improve your planning processes. Your
planning has become our number one concern. Still, as I look at the threeday plan you presented me today for this pre-IB Filipino 3 class (see
attached) note that this "plan" covers last Monday (31 March), today (2
April), and this coming Friday (4 April) - this one-page planning sheet is less
than half complete. In fact, the "objectives" section contains nothing more
than an unfinished sentence. You list no activities, no student outcomes.
Whats more, I found nothing but blank pages for any future class sessions.
In all honesty, Vangie, this illustrates to me even more explicitly than ever
before how justified we are in focusing our concerns on your planning. You
cannot keep the daily objectives, activities, and expected student outcomes
only "in your head" and "wing it" as you did today. Frankly speaking, you
know how concerned we are with your planning, and you also know that you
and I have had informal conversations relative to your continued
employment with us. I would have hoped and expected, therefore, to see the
complete plans for this quarter in your folder, or at the very least, a
thoroughly planned unit on Noli Me Tangere, the material being presented
and covered this week. Your "plan" shows me very little, and what I do see
is completely unacceptable!
For me, the reality of this unacceptable lesson plan only reinforces the
concerns being expressed by Mr. Loy. You do not plan in any written and
complete way for the success of your students, and this lack of planning is
now, has been, and always will be unacceptable in our school and in our
profession. (Emphasis ours.)
Subsequently, on April 10, 1997, McCauley sent a letter42 to Santos directing
her to explain in writing why her employment from the School should not be
terminated because of her failure to meet the criteria for improvement set out
in her Professional Growth Plan and her substandard performance as a
teacher.
In her reply letter43 dated April 14, 1997, Santos blamed the School for her
predicament. She said that, in the last few years, she had been forced to
teach Filipino, a subject which she had no preparation for. The School
allegedly made this happen against her objections and despite the fact that
she had no training in Filipino linguistics and literature. Santos also asked
for clarification on why she was being asked to explain and the reasons
therefor.
On April 21, 1997, McCauley wrote a letter44 to Santos informing her that
the School considered her letter dated April 14, 1997 as her explanation. The
School also set a formal administrative investigation on April 23, 1997 in
order to further clarify matters and accord Santos the opportunity to explain
her side. Santos was given the choice of bringing a representative or counsel
to assist her.
Both parties appealed the Labor Arbiters Decision to the National Labor
Relations Commission (NLRC).52 The appeals were docketed as NLRC CA
No. 028558-01.
The Judgment of the NLRC
On February 28, 2003, the NLRC issued a Resolution,53 which affirmed the
decision of the Labor Arbiter in this wise:
WHEREFORE, premises considered, the appeal is dismissed for lack of
merit and the Decision appealed from is affirmed en toto.
The NLRC upheld the ruling of the Labor Arbiter that Santoss dismissal
from employment was not warranted given that "her being caught once for
not preparing her lesson plan for the day is not and could not be, by itself, as
gross or serious as defined by law. Likewise, the observations made by her
superior and peers could not be the basis for concluding or finding that she is
grossly incompetent or inefficient."54 The NLRC found the conclusion of the
Labor Arbiter to be supported by substantial evidence.
Petitioners moved for a reconsideration55 of the NLRC Resolution but the
same was denied in a Resolution56dated June 30, 2003. Petitioners then filed
a petition for certiorari57 before the Court of Appeals.
The Decision of the Court of Appeals
On November 17, 2004, the Court of Appeals promulgated the assailed
decision the decretal portion of which provides:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the instant petition
is PARTLY GRANTED. The Resolution of public respondent National
Labor Relations Commission dated February 28, 2003, in NLRC CA No.
028558-01, and its Resolution of June 30, 2003 on the partial motion for
reconsideration are AFFIRMED subject to the MODIFICATION that the
award to private respondent METHELYN FILLER of backwages and
benefits due a regular employee from July 25, 1994 until the rendition of the
already gained expertise in its field. This holds truer if the factual findings
had been affirmed upon review by the NLRC and the Court of Appeals.
According to the respondents, it cannot be said that Santos did not exercise
slight care or diligence in the performance of her duties as she did exert
efforts to make the necessary adjustments. That Santos was shown to have
inadequately prepared a lesson plan in 1997 did not necessarily show that
she was habitually neglectful of her duties. For the said reasons, respondents
also rejected the charge of gross inefficiency. Respondents aver that the
administrative superiors of Santos found that she had greatly improved on
her preparations and she was never found wanting in the other areas of her
teaching. Respondents also stress that petitioners only brought up the claim
of gross inefficiency in the petition for certiorari before the Court of
Appeals. Although respondents admit that Santos did indeed perform her
duties unsatisfactorily, they argue that the same does not warrant dismissal.
Considering that she had worked with the School for 17 long years with no
known previous bad record, they allege that the ends of social and
compassionate justice would be better served if she was merely suspended
from work rather than terminated.
The Judgment of the Court
The Court finds the appeal meritorious.
Generally, on appeal, the findings of fact of an administrative agency like
the NLRC are accorded not only respect but also finality if the findings are
supported by substantial evidence. Such rule, however, is by no means
absolute. As held in San Miguel Corporation v. Aballa,62 "when the findings
of fact of the labor arbiter and the NLRC are not supported by substantial
evidence or their judgment was based on a misapprehension of facts, the
appellate court may make an independent evaluation of the facts of the
case." The Court finds the said exceptions extant in this case.
In Janssen Pharmaceutica v. Silayro,63 we stated that "[t]o constitute a valid
dismissal from employment, two requisites must concur: (1) the dismissal
must be for any of the causes provided in Article 282 of the Labor Code;
Anent the conclusion of the Labor Arbiter that "the observations made by
[Santoss] superior and peers could not be the basis for concluding or finding
that she is grossly incompetent or inefficient,"78 the Court finds the same
utterly baseless. Far from being random and unstructured exercises, said
observations were borne out of the evaluation procedures set up by the
School in order to assist the members of its faculty to improve their
performance. In their petition before this Court, petitioners attached a copy
of their Reply/Position Paper79 before the Labor Arbiter. Annexed to said
pleading is the Schools Position Paper Regarding Professional Growth,
Supervision and Evaluation of Faculty,80 which expressly states that:
It is the policy of the International School Manila to assist teachers in the
improvement of classroom instruction at all levels in order to provide the
highest quality educational program at ISM. To that end, procedures have
been established which include 1) the promotion of on-going professional
growth, 2) on-going supervision including regular monitoring, improvement
of instructional practices and evaluation for continuing employment or
tenure, and 3) evaluation (performance assessment, directed assistance,
remediation and, if necessary, termination of employment).81
Included in the supervision and evaluation process are formal and informal
observations of a faculty members performance in his/her classes. Thus, 2.1
Formal observations will take several forms. Some will be total [sic]
unannounced, with or without a pre-observation conference.
Others will be scheduled in advance, possibly including a pre-observation
conference, and with a post observation conference. One component of the
formal observation will always be a written commentary by the supervisor
or colleague making the observation.
xxxx
2.3 Drop-in, informal observations, will be a part of the supervision and
evaluation process. Drop-ins may be of any length, from a few minutes to an
hour or more. A note from the observer confirming his or her impressions
will be helpful to the teacher observed.82
From the foregoing, it is clear that the Labor Arbiter erred in not giving
weight to the observations made by Santoss superiors and peers in
determining whether she was grossly inefficient or not.
In view of the acts and omissions of Santos that constituted gross
inefficiency, the Court finds that the School was justified in not keeping her
in its employ. At this point, the Court needs to stress that Santos voluntarily
agreed to teach the Filipino classes given to her when she came back from
her leave of absence. Said classes were not forced upon her by the School.
This much she admitted in the hearing of the case before the Labor Arbiter.
She stated therein that for the school year 1993-1994, she was given the
option to teach only one Spanish class and not have any Filipino teaching
loads. She, however, said that if she took that option she would have been
underpaid and her salary would not have been the same.83 Moreover, for the
school years 1994-1995 and 1995-1996, she made known to the School that
she did not prefer a change in teaching assignment. Thus, when she
consented to take on the Filipino classes, it was Santoss responsibility to
teach them well within the standards of teaching required by the School, as
she had done previously as a teacher of Spanish. Failing in this, she must
answer for the consequences.
As held in Agabon v. National Labor Relations Commission84:
The law imposes many obligations on the employer such as providing just
compensation to workers, observance of the procedural requirements of
notice and hearing in the termination of employment. On the other hand, the
law also recognizes the right of the employer to expect from its workers not
only good performance, adequate work and diligence, but also good conduct
and loyalty. The employer may not be compelled to continue to employ such
persons whose continuance in the service will patently be inimical to his
interests. (citations omitted.)
As regards the requirements of procedural due process, Section 2(d) of Rule
1 of The Implementing Rules of Book VI states that:
In view of the finding that Santos was validly dismissed from employment,
she would not ordinarily be entitled to separation pay.85 An exception to this
rule is when the court finds justification in applying the principle of social
justice according to the equities of the case. The Court explained in
Philippine Long Distance Telephone Co. (PLDT) v. National Labor
Relations Commission86 that:
We hold that henceforth separation pay shall be allowed as a measure of
social justice only in those instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his
moral character. Where the reason for the valid dismissal is, for example,
habitual intoxication or an offense involving moral turpitude, like theft or
illicit sexual relations with a fellow worker, the employer may not be
required to give the dismissed employee separation pay, or financial
assistance, or whatever other name it is called, on the ground of social
justice.
xxxx
The policy of social justice is not intended to countenance wrongdoing
simply because it is committed by the underprivileged. At best it may
mitigate the penalty but it certainly will not condone the offense.
Compassion for the poor is an imperative of every humane society but only
when the recipient is not a rascal claiming an undeserved privilege. Social
justice cannot be permitted to be refuge of scoundrels any more than can
equity be an impediment to the punishment of the guilty. Those who invoke
social justice may do so only if their hands are clean and their motives
blameless and not simply because they happen to be poor. This great policy
of our Constitution is not meant for the protection of those who have proved
they are not worthy of it, like the workers who have tainted the cause of
labor with the blemishes of their own character.
In Toyota Motor Phils. Corp. Workers Association v. National Labor
Relations Commission,87 we modified our ruling in PLDT in this wise:
In all of the foregoing situations, the Court declined to grant termination pay
because the causes for dismissal recognized under Art. 282 of the Labor
Code were serious or grave in nature and attended by willful or wrongful
intent or they reflected adversely on the moral character of the employees.
We therefore find that in addition to serious misconduct, in dismissals based
on other grounds under Art. 282 like willful disobedience, gross and habitual
neglect of duty, fraud or willful breach of trust, and commission of a crime
against the employer or his family, separation pay should not be conceded to
the dismissed employee.
In analogous causes for termination like inefficiency, drug use, and others,
the NLRC or the courts may opt to grant separation pay anchored on social
justice in consideration of the length of service of the employee, the amount
involved, whether the act is the first offense, the performance of the
employee and the like, using the guideposts enunciated in PLDT on the
propriety of the award of separation pay.1wphi1 (Emphasis ours.)
In the instant case, the Court finds equitable and proper the award of
separation pay in favor of Santos in view of the length of her service with
the School prior to the events that led to the termination of her employment.
To recall, Santos was first employed by the School in 1978 as a Spanish
language teacher. During this time, the records of this case are silent as to
the fact of any infraction that she committed and/or any other administrative
case against her that was filed by the School. Thus, an award of separation
pay equivalent to one-half (1/2) month pay for every year of service is
awarded in favor of Santos on grounds of equity and social justice.88
WHEREFORE, the instant petition is GRANTED. The assailed Decision
and the Resolution of the Court of Appeals in CA-G.R. SP No. 79031 are
hereby REVERSED and a new one is entered ordering the dismissal of the
complaint of Evangeline Santos in NLRC-NCR Case No. 00-06-04491-97.
Petitioner International School Manila is ORDERED to pay respondent
Evangeline Santos separation pay equivalent to one-half (1/2) month pay for
every year of service. No costs.
SO ORDERED.
SECOND DIVISION
Present:
Petitioners,
- versus -
QUISUMBING,* J.,
Chairperson,
CARPIO,**
CARPIO MORALES,
TINGA, and
DEVELOPMENT (LAND),
Respondents.
Promulgated:
DECISION
Date Hired
Date Dismissed
1. Victor Pia
December 11,
1999
2.
Sacare
November 11,
1999
April 8, 2000
3. Reneboy Sua
December 13,
1999
4. Allan Sacare
December 13,
1999
5. Celso Morojo,
Jr.
December 13,
1999
November 8,
1999
April 8, 2000
February 10,
2000
April 8, 2000
6.
Alinapon
Ildefenso
Ismael
7. Tirso Juan
8.
Rabago
9. Ruding Abordo
10.
Ortega
November 8,
1999
April 8, 2000
April 8, 2000
April 8, 2000
April 8, 2000
April 8, 2000
for a
after
but
their
were
and
The
18,
2002,
the
NLRC
In
their
Motion
for
Reconsideration,
the
[petitioners] reiterated that complainants were
dismissed due to their poor performance. And in
support thereto, [petitioners] submitted the
various
production
reports
of
the
complainants for the period covering January
2000 to April 2000. The [petitioners]
inadvertently failed to attach the production
reports in its position paper which showed
that during their first four months of
employment, complainants miserably failed
to meet the required quota. Their poor
performance was due to their being slow
workers (mabagal magtrabaho) and telling
stories while working (nagkukwentuhan).
Despite ample opportunity given by the
[petitioners], complainants did not even try
to improve their performance and output.
Complainants work which consisted of either
fil[l]ing up bottles or sealing the same,
requires an average or accomplishment of at
least 1,500 bottles per day. However,
xxxx
Complainants
actuation
of
disregarding
compliance with their quota commitment does not
speak well of their work attitude. Thus,
[petitioners] could not be faulted if after
evaluation of the complainants work performance,
they decided to terminate their employment
within the probationary period stated in their
employment contract. It would be unfair and
unjust for the [petitioners] to be required to keep
complainants under their employ despite their
not-so-interested work attitude.
SO ORDERED.
Republic of the Philippines
Supreme Court
Manila
THIRD DIVISION
ARMANDO G. YRASUEGUI, G.R. No. 168081
Petitioner,
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
Promulgated:
PHILIPPINE AIRLINES, INC.,
Respondent. October 17, 2008
x--------------------------------------------------x
DECISION
REYES, R.T., J.:
THIS case portrays the peculiar story of an international flight steward
who was dismissed because of his failure to adhere to the weight standards
of the airline company.
informed of thePAL decision for him to remain grounded until such time that
he satisfactorily complies with the weight standards. Again, he was directed
to report every two weeks for weight checks.
SO ORDERED.[14]
The Labor Arbiter held that the weight standards of PAL are
reasonable in view of the nature of the job of petitioner.[15] However, the
weight standards need not be complied with under pain of dismissal since
his weight did not hamper the performance of his duties. [16] Assuming that it
did, petitioner could be transferred to other positions where his weight
would not be a negative factor.[17] Notably, other overweight employees, i.e.,
Mr. Palacios, Mr. Cui, and Mr. Barrios, were promoted instead of being
disciplined.[18]
Both parties appealed to the National Labor Relations Commission
(NLRC).[19]
On October 8, 1999, the Labor Arbiter issued a writ of execution
directing the reinstatement of petitioner without loss of seniority rights and
other benefits.[20]
On February 1, 2000, the Labor Arbiter denied[21] the Motion to Quash
Writ of Execution[22] of PAL.
On March 6, 2000, PAL appealed the denial of its motion to quash to
the NLRC.[23]
Like the Labor Arbiter, the NLRC found the weight standards
of PAL to be reasonable. However, it found as unnecessary the Labor Arbiter
holding that petitioner was not remiss in the performance of his duties as
flight steward despite being overweight. According to the NLRC, the Labor
Arbiter should have limited himself to the issue of whether the failure of
petitioner to attain his ideal weight constituted willful defiance of the weight
standards of PAL.[28]
SO ORDERED.[32]
The CA opined that there was grave abuse of discretion on the part of
the NLRC because it looked at wrong and irrelevant considerations [33] in
evaluating the evidence of the parties. Contrary to the NLRC ruling, the
weight standards of PAL are meant to be a continuing qualification for an
employees position.[34]The failure to adhere to the weight standards is
an analogous cause for the dismissal of an employee under Article 282(e) of
the Labor Code in relation to Article 282(a). It is not willful disobedience as
the NLRC seemed to suggest.[35] Said the CA, the element of willfulness that
the NLRC decision cites is an irrelevant consideration in arriving at a
conclusion on whether the dismissal is legally proper.[36] In other words, the
relevant question to ask is not one of willfulness but one of reasonableness
of the standard and whether or not the employee qualifies or continues to
qualify under this standard.[37]
Just like the Labor Arbiter and the NLRC, the CA held that the weight
standards of PAL are reasonable.[38] Thus, petitioner was legally dismissed
because he repeatedly failed to meet the prescribed weight standards. [39] It is
obvious that the issue of discrimination was only invoked by petitioner for
purposes of escaping the result of his dismissal for being overweight.[40]
On May 10, 2005, the CA denied petitioners motion for
reconsideration.[41] Elaborating on its earlier ruling, the CA held that the
weight standards of PALare a bona fide occupational qualification which, in
case of violation, justifies an employees separation from the service.[42]
Issues
In this Rule 45 petition for review, the following issues are posed for
resolution:
I.
standards. The dismissal of the employee would thus fall under Article
282(e) of the Labor Code. As explained by the CA:
x x x [T]he standards violated in this case were not mere orders
of the employer; they were the prescribed weights that a cabin
crew must maintain in order to qualify for and keep his or her
position in the company. In other words, they were standards
that establish continuing qualifications for an employees
position. In this sense, the failure to maintain these standards
does not fall under Article 282(a) whose express terms require
the element of willfulness in order to be a ground for
dismissal. The failure to meet the employers qualifying
standards is in fact a ground that does not squarely fall under
grounds (a) to (d) and is therefore one that falls under Article
282(e) the other causes analogous to the foregoing.
By its nature, these qualifying standards are norms that
apply prior to and after an employee is hired. They apply prior
to employment because these are the standards a job applicant
must initially meet in order to be hired. They apply after
hiring because an employee must continue to meet these
standards while on the job in order to keep his job. Under this
perspective, a violation is not one of the faults for which an
employee can be dismissed pursuant to pars. (a) to (d) of Article
282; the employee can be dismissed simply because he no
longer qualifies for his job irrespective of whether or not the
failure to qualify was willful or intentional. x x x[45]
Petitioner, though, advances a very interesting argument. He claims that
obesity is a physical abnormality and/or illness.[46] Relying
on Nadura v. BenguetConsolidated, Inc.,[47] he says his dismissal is illegal:
Conscious of the fact that Naduras case cannot be made to
fall squarely within the specific causes enumerated in
subparagraphs 1(a) to (e), Benguet invokes the provisions of
subparagraph 1(f) and says that Naduras illness occasional
attacks of asthma is a cause analogous to them.
speedily get the passengers out of the aircraft safely. Being overweight
necessarily impedes mobility.Indeed, in an emergency situation, seconds are
what cabin attendants are dealing with, not minutes. Three lost seconds can
translate into three lost lives.Evacuation might slow down just because a
wide-bodied cabin attendant is blocking the narrow aisles. These
possibilities are not remote.
basic rule in evidence that each party must prove his affirmative allegation.
[81]
Since the burden of evidence lies with the party who asserts an
affirmative allegation, petitioner has to prove his allegation with
particularity. There is nothing on the records which could support the finding
of discriminatory treatment. Petitioner cannot establish discrimination by
simply naming the supposed cabin attendants who are allegedly similarly
situated with him. Substantial proof must be shown as to how and why they
are similarly situated and the differential treatment petitioner got
from PAL despite the similarity of his situation with other employees.
Indeed, except for pointing out the names of the supposed overweight cabin
attendants, petitioner miserably failed to indicate their respective ideal
weights; weights over their ideal weights; the periods they were allowed to
fly despite their being overweight; the particular flights assigned to them;
the discriminating treatment they got from PAL; and other relevant data that
could have adequately established a case of discriminatory treatment
by PAL. In the words of the CA,PAL really had no substantial case of
discrimination to meet.[82]
We are not unmindful that findings of facts of administrative agencies,
like the Labor Arbiter and the NLRC, are accorded respect, even finality.
[83]
The reason is simple: administrative agencies are experts in matters
within their specific and specialized jurisdiction.[84] But the principle is not a
hard and fast rule.It only applies if the findings of facts are duly supported
by substantial evidence. If it can be shown that administrative bodies
grossly misappreciated evidence of such nature so as to compel a conclusion
to the contrary, their findings of facts must necessarily be reversed. Factual
findings of administrative agencies do not have infallibility and must be set
aside when they fail the test of arbitrariness.[85]
Here, the Labor Arbiter and the NLRC
inexplicably misappreciated evidence. We thus annul their findings.
To make his claim more believable, petitioner invokes the equal
protection clause guaranty[86] of the Constitution. However, in the absence of
IV. The claims of petitioner for reinstatement and wages are moot.
As his last contention, petitioner avers that his claims for reinstatement and
wages have not been mooted. He is entitled to reinstatement and his
full backwages, from the time he was illegally dismissed up to the time that
the NLRC was reversed by the CA.[92]
At this point, Article 223 of the Labor Code finds relevance:
In any event, the decision of the Labor Arbiter reinstating a
dismissed or separated employee, insofar as the reinstatement
aspect is concerned, shall immediately be executory, even
pending appeal. The employee shall either be admitted back to
work under the same terms and conditions prevailing prior to
his dismissal or separation or, at the option of the employer,
merely reinstated in the payroll. The posting of a bond by the
employer shall not stay the execution for reinstatement
provided herein.
The law is very clear. Although an award or order of reinstatement is
self-executory and does not require a writ of execution,[93] the option to
exercise actual reinstatement or payroll reinstatement belongs to the
employer. It does not belong to the employee, to the labor tribunals, or even
to the courts.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
ALABANG COUNTRY CLUB, INC., G.R. No. 170287
Petitioner,
Present:
- versus QUISUMBING, J., Chairperson,
CARPIO MORALES,
NATIONAL LABOR RELATIONS AZCUNA,*
COMMISSION, ALABANG TINGA, and
COUNTRY CLUB INDEPENDENT VELASCO, JR., JJ.
EMPLOYEES UNION,
CHRISTOPHER PIZARRO,
MICHAEL BRAZA, and Promulgated:
NOLASCO CASTUERAS,
Respondents. February 14, 2008
x-----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:
Petitioner Alabang Country Club, Inc. (Club) is a domestic non-profit
corporation with principal office at Country Club Drive, Ayala
Alabang, Muntinlupa City. Respondent Alabang Country Club Independent
Employees Union (Union) is the exclusive bargaining agent of the Clubs
rank-and-file employees. In April 1996, respondents Christopher Pizarro,
Michael Braza, and Nolasco Castueras were elected Union President, VicePresident, and Treasurer, respectively.
On June 21, 1999, the Club and the Union entered into a Collective
Bargaining Agreement (CBA), which provided for a Union shop and
maintenance of membership shop.
The pertinent parts of the CBA included in Article II on Union
Security read, as follows:
ARTICLE II
UNION SECURITY
SECTION 1. CONDITION OF EMPLOYMENT. All
regular rank-and-file employees, who are members or
subsequently become members of the UNION shall maintain
their membership in good standing as a condition for their
continued employment by the CLUB during the lifetime of this
Agreement or any extension thereof.
SECTION 2. [COMPULSORY] UNION MEMBERSHIP
FOR NEW REGULAR RANK-AND-FILE EMPLOYEES
a)
the UNION shall reimburse the CLUB for any and all liability
or damage it may be adjudged.[1] (Emphasis supplied.)
Subsequently, in July 2001, an election was held and a new set of
officers was elected. Soon thereafter, the new officers conducted an audit of
the Union funds. They discovered some irregularly recorded entries,
unaccounted expenses and disbursements, and uncollected loans from the
Union funds. The Union notified respondents Pizarro, Braza, and Castueras
of the audit results and asked them to explain the discrepancies in writing.[2]
Thereafter, on October 6, 2001, in a meeting called by the Union,
respondents Pizarro, Braza, and Castueras explained their side. Braza denied
any wrongdoing and instead asked that the investigation be addressed to
Castueras, who was the Union Treasurer at that time. With regard to his
unpaid loans, Braza claimed he had been paying through monthly salary
deductions and said the Union could continue to deduct from his salary until
full payment of his loans, provided he would be reimbursed should the result
of the initial audit be proven wrong by a licensed auditor. With regard to the
Union expenses which were without receipts, Braza explained that these
were legitimate expenses for which receipts were not issued, e.g.
transportation fares, food purchases from small eateries, and food and
transportation allowances given to Union members with pending complaints
with the Department of Labor and Employment, the National Labor
Relations Commission (NLRC), and the fiscals office. He explained that
though there were no receipts for these expenses, these were supported by
vouchers and itemized as expenses. Regarding his unpaid and unliquidated
cash advances amounting to almost PhP 20,000, Braza explained that these
were not actual cash advances but payments to a certain Ricardo Ricafrente
who had loaned PhP 200,000 to the Union.[3]
Pizarro, for his part, blamed Castueras for his unpaid and uncollected
loan and cash advances. He claimed his salaries were regularly deducted to
pay his loan and he did not know why these remained unpaid in the
records. Nonetheless, he likewise agreed to continuous salary deductions
until all his accountabilities were paid.[4]
Castueras also denied any wrongdoing and claimed that the irregular
entries in the records were unintentional and were due to inadvertence
because of his voluminous work load. He offered that his unpaid personal
loan of PhP 27,500 also be deducted from his salary until the loans were
fully paid. Without admitting any fault on his part, Castueras suggested that
his salary be deducted until the unaccounted difference between the loans
and the amount collected amounting to a total of PhP 22,000 is paid.[5]
Despite their explanations, respondents Pizarro, Braza, and Castueras
were expelled from the Union, and, on October 16, 2001, were furnished
individual letters of expulsion for malversation of Union funds. [6] Attached
to the letters were copies of the Panawagan ng mga Opisyales ng
Unyon signed by 37 out of 63 Union members and officers, and a Board of
Directors Resolution[7] expelling them from the Union.
In a letter dated October 18, 2001, the Union, invoking the Security Clause
of the CBA, demanded that the Club dismiss respondents Pizarro, Braza, and
Castueras in view of their expulsion from the Union.[8] The Club required the
three respondents to show cause in writing within 48 hours from notice why
they should not be dismissed. Pizarro and Castueras submitted their
respective written explanations on October 20, 2001, while Braza submitted
his explanation the following day.
During the last week of October 2001, the Clubs general manager called
respondents Pizarro, Braza, and Castueras for an informal conference
inquiring about the charges against them. Said respondents gave their
explanation and asserted that the Union funds allegedly malversed by them
were even over the total amount collected during their tenure as Union
officersPhP 120,000 for Braza, PhP 57,000 for Castueras, and PhP 10,840
for Pizarro, as against the total collection from April 1996 to December 2001
of only PhP 102,000. They claimed the charges are baseless. The general
manager announced he would conduct a formal investigation.
Nonetheless, after weighing the verbal and written explanations of the three
respondents, the Club concluded that said respondents failed to refute the
validity of their expulsion from the Union. Thus, it was constrained to
terminate the employment of said respondents. On December 26, 2001, said
respondents received their notices of termination from the Club.[9]
Respondents Pizarro, Braza, and Castueras challenged their dismissal from
the Club in an illegal dismissal complaint docketed as NLRC-NCR Case No.
30-01-00130-02 filed with the NLRC, National Capital Region Arbitration
Branch. In his January 27, 2003 Decision,[10] the Labor Arbiter ruled in favor
of the Club,and found that there was justifiable cause in terminating said
respondents. He dismissed the complaint for lack of merit.
On February 21, 2003, respondents Pizarro, Braza, and Castueras filed an
Appeal docketed as NLRC NCR CA No. 034601-03 with the NLRC.
On February 26, 2004, the NLRC rendered a Decision [11] granting the
appeal, the fallo of which reads:
WHEREFORE, finding merit in the Appeal, judgment is hereby
rendered declaring the dismissal of the complainants illegal. x x
x Alabang Country Club, Inc. and Alabang Country Club
Independent Union are hereby ordered to reinstate complainants
Christopher Pizarro, Nolasco Castueras and Michael Braza to
their former positions without loss of seniority rights and other
privileges with full backwages from the time they were
dismissed up to their actual reinstatement.
SO ORDERED.
The NLRC ruled that there was no justifiable cause for the termination of
respondents Pizarro, Braza, and Castueras. The commissioners relied heavily
on Section 2, Rule XVIII of the Rules Implementing Book V of the Labor
Code. Sec. 2 provides:
3.
4.
The main issue is whether the three respondents were illegally dismissed and
whether they were afforded due process.
The Club avers that the dismissal of the three respondents was in accordance
with the Union security provisions in their CBA. The Club also claims that
the three respondents were afforded due process, since the Club conducted
an investigation separate and independent from that conducted by the Union.
Respondents Pizarro, Braza, and Castueras, on the other hand, contend that
the Club failed to conduct a separate hearing as prescribed by Sec. 2(b), Rule
XXIII, Book V of the implementing rules of the Code.
First, we resolve the legality of the three respondents dismissal from the
Club.
2.
3.
4.
The CA, in dismissing the Clubs petition and affirming the Decision of the
NLRC, also relied on the same case. We explained in Malayang Samahan:
x x x Although this Court has ruled that union security
clauses embodied in the collective bargaining agreement may
be validly enforced and that dismissals pursuant thereto may
likewise be valid, this does not erode the fundamental
requirements of due process. The reason behind the
enforcement of union security clauses which is the sanctity and
inviolability of contracts cannot override ones right to due
process.[24]
In the above case, we pronounced that while the company, under a
maintenance of membership provision of the CBA, is bound to dismiss any
employee expelled by the union for disloyalty upon its written request, this
undertaking should not be done hastily and summarily. The company acts in
bad faith in dismissing a worker without giving him the benefit of a hearing.
[25]
We cautioned in the same case that the power to dismiss is a normal
prerogative of the employer; however, this power has a limitation. The
employer is bound to exercise caution in terminating the services of the
employees especially so when it is made upon the request of a labor union
pursuant to the CBA. Dismissals must not be arbitrary and capricious. Due
process must be observed in dismissing employees because the dismissal
affects not only their positions but also their means of livelihood. Employers
should respect and protect the rights of their employees, which include the
right to labor.[26]
The CA and the three respondents err in relying on Malayang
Samahan, as its ruling has no application to this case. In Malayang
Samahan, the union members were expelled from the union and were
immediately dismissed from the company without any semblance of due
process. Both the union and the company did not conduct administrative
hearings to give the employees a chance to explain themselves. In the
present case, the Club has substantially complied with due process. The
three respondents were notified that their dismissal was being requested by
the Union, and their explanations were heard. Then, the Club, through its
President, conferred with said respondents during the last week of October
2001. The three respondents were dismissed only after the Club reviewed
and considered the documents submitted by the Union vis--vis the written
explanations submitted by said respondents. Under these circumstances, we
find that the Club had afforded the three respondents a reasonable
opportunity to be heard and defend themselves.
On the applicability of Agabon, the Club points out that the CA ruled
that the three respondents were illegally dismissed primarily because they
were not afforded due process. We are not unaware of the doctrine
enunciated in Agabon that when there is just cause for the dismissal of an
employee, the lack of statutory due process should not nullify the dismissal,
or render it illegal or ineffectual, and the employer should indemnify the
employee for the violation of his statutory rights. [27] However, we find that
we could not apply Agabon to this case as we have found that the three
respondents were validly dismissed and were actually afforded due process.
Finally, the issue that since there was no bad faith on the part of the
Club, the Union is solely liable for the termination from employment of the
three respondents, has been mooted by our finding that their dismissal is
valid.
WHEREFORE, premises considered, the Decision dated July 5,
2005 of the CA and the Decision dated February 26, 2004 of the NLRC are
herebyREVERSED and SET ASIDE. The Decision dated January 27,
2003 of the Labor Arbiter in NLRC-NCR Case No. 30-01-00130-02 is
hereby REINSTATED.
No costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 148132
(a
)
Astorga
BACKWAGES;
(P33,650.00 x 4 months)
= P134,600.00
UNPAID SALARIES
(February 15, 1998-April 3,
1998
February 15-28, 1998
= P 16,823.00
= P 33,650.00
= P 3,882.69
CAR MAINTENANCE
ALLOWANCE
(P2,000.00 x 4)
= P 8,000.00
FUEL ALLOWANCE
(300 liters/mo. x 4 mos.
at P12.04/liter)
= P 14,457.83
TOTAL
xxxx
= P211,415.52
also set aside the NLRCs order for the return of the company vehicle
holding that this issue is not essentially a labor concern, but is civil in nature,
and thus, within the competence of the regular court to decide. It added that
the matter had not been fully ventilated before the NLRC, but in the regular
court.
Astorga filed a motion for reconsideration, while SMART sought partial
reconsideration, of the Decision. On December 18, 2001, the CA resolved
the motions, viz.:
WHEREFORE, [Astorgas] motion for reconsideration is hereby
PARTIALLY GRANTED. [Smart] is hereby ordered to pay [Astorga]
her backwages from 15 February 1998 to 06 November 1998.
[Smarts] motion for reconsideration is outrightly DENIED.
SO ORDERED.25
Astorga and SMART came to us with their respective petitions for review
assailing the CA ruling, docketed as G.R Nos. 151079 and 151372. On
February 27, 2002, this Court ordered the consolidation of these petitions
with G.R. No. 148132.26
In her Memorandum, Astorga argues:
I
THE COURT OF APPEALS ERRED IN UPHOLDING THE
VALIDITY OF ASTORGAS DISMISSAL DESPITE THE FACT
THAT HER DISMISSAL WAS EFFECTED IN CLEAR VIOLATION
OF THE CONSTITUTIONAL RIGHT TO SECURITY OF TENURE,
CONSIDERING THAT THERE WAS NO GENUINE GROUND
FOR HER DISMISSAL.
II
SMARTS REFUSAL TO REINSTATE ASTORGA DURING THE
PENDENCY OF THE APPEAL AS REQUIRED BY ARTICLE 223
OF THE LABOR CODE, ENTITLES ASTORGA TO HER
SALARIES DURING THE PENDENCY OF THE APPEAL.
III
In reversing the RTC ruling and consequently dismissing the case for lack of
jurisdiction, the CA made the following disquisition, viz.:
[I]t is plain to see that the vehicle was issued to [Astorga] by [Smart]
as part of the employment package. We doubt that [SMART] would
extend [to Astorga] the same car plan privilege were it not for her
employment as district sales manager of the company. Furthermore,
there is no civil contract for a loan between [Astorga] and [Smart].
Consequently, We find that the car plan privilege is a benefit arising
out of employer-employee relationship. Thus, the claim for such falls
squarely within the original and exclusive jurisdiction of the labor
arbiters and the NLRC.32
We do not agree. Contrary to the CAs ratiocination, the RTC rightfully
assumed jurisdiction over the suit and acted well within its discretion in
denying Astorgas motion to dismiss. SMARTs demand for payment of the
market value of the car or, in the alternative, the surrender of the car, is not a
labor, but a civil, dispute. It involves the relationship of debtor and creditor
rather than employee-employer relations.33 As such, the dispute falls within
the jurisdiction of the regular courts.
In Basaya, Jr. v. Militante,34 this Court, in upholding the jurisdiction of the
RTC over the replevin suit, explained:
Replevin is a possessory action, the gist of which is the right of
possession in the plaintiff. The primary relief sought therein is the
return of the property in specie wrongfully detained by another
person. It is an ordinary statutory proceeding to adjudicate rights to
the title or possession of personal property. The question of whether or
not a party has the right of possession over the property involved and
if so, whether or not the adverse party has wrongfully taken and
detained said property as to require its return to plaintiff, is outside the
pale of competence of a labor tribunal and beyond the field of
specialization of Labor Arbiters.
xxxx
The labor dispute involved is not intertwined with the issue in the
Replevin Case. The respective issues raised in each forum can be
resolved independently on the other. In fact in 18 November 1986, the
NLRC in the case before it had issued an Injunctive Writ enjoining the
petitioners from blocking the free ingress and egress to the Vessel and
ordering the petitioners to disembark and vacate. That aspect of the
controversy is properly settled under the Labor Code. So also with
petitioners right to picket. But the determination of the question of
who has the better right to take possession of the Vessel and whether
petitioners can deprive the Charterer, as the legal possessor of the
Vessel, of that right to possess in addressed to the competence of Civil
Courts.
In thus ruling, this Court is not sanctioning split jurisdiction but
defining avenues of jurisdiction as laid down by pertinent laws.
The CA, therefore, committed reversible error when it overturned the RTC
ruling and ordered the dismissal of the replevin case for lack of jurisdiction.
Having resolved that issue, we proceed to rule on the validity of Astorgas
dismissal.
Astorga was terminated due to redundancy, which is one of the authorized
causes for the dismissal of an employee. The nature of redundancy as an
authorized cause for dismissal is explained in the leading case ofWiltshire
File Co., Inc. v. National Labor Relations Commission,35 viz:
x x x redundancy in an employers personnel force necessarily or even
ordinarily refers to duplication of work. That no other person was
holding the same position that private respondent held prior to
termination of his services does not show that his position had not
become redundant. Indeed, in any well organized business enterprise,
it would be surprising to find duplication of work and two (2) or more
people doing the work of one person. We believe that redundancy, for
purposes of the 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 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 wisdom and soundness of such
characterization or decision is not subject to discretionary review provided,
of course, that a violation of law or arbitrary or malicious action is not
shown.36
Astorga claims that the termination of her employment was illegal and
tainted with bad faith. She asserts that the reorganization was done in order
to get rid of her. But except for her barefaced allegation, no convincing
evidence was offered to prove it. This Court finds it extremely difficult to
believe that SMART would enter into a joint venture agreement with NTT,
form SNMI and abolish CSMG/FSD simply for the sole purpose of easing
out a particular employee, such as Astorga. Moreover, Astorga never denied
that SMART offered her a supervisory position in the Customer Care
Department, but she refused the offer because the position carried a lower
salary rank and rate. If indeed SMART simply wanted to get rid of her, it
would not have offered her a position in any department in the enterprise.
Astorga also states that the justification advanced by SMART is not true
because there was no compelling economic reason for redundancy. But
contrary to her claim, an employer is not precluded from adopting a new
policy conducive to a more economical and effective management even if it
is not experiencing economic reverses. Neither does the law require that the
employer should suffer financial losses before he can terminate the services
of the employee on the ground of redundancy. 37
We agree with the CA that the organizational realignment introduced by
SMART, which culminated in the abolition of CSMG/FSD and termination
of Astorgas employment was an honest effort to make SMARTs sales and
marketing departments more efficient and competitive. As the CA had taken
pains to elucidate:
x x x a careful and assiduous review of the records will yield no other
conclusion than that the reorganization undertaken by SMART is for
no purpose other than its declared objective as a labor and cost
savings device. Indeed, this Court finds no fault in SMARTs decision
to outsource the corporate sales market to SNMI in order to attain
greater productivity. [Astorga] belonged to the Sales Marketing Group
under the Fixed Services Division (CSMG/FSD), a distinct sales force
of SMART in charge of selling SMARTs telecommunications
services to the corporate market. SMART, to ensure it can respond
On the other hand, the petitions of SMART and Astorga docketed as G.R.
Nos. 151079 and 151372 are DENIED. The June 11, 2001 Decision and the
December 18, 2001 Resolution in CA-G.R. SP. No. 57065,
are AFFIRMEDwith MODIFICATION. Astorga is declared validly
dismissed. However, SMART is ordered to pay AstorgaP50,000.00 as
indemnity for its non-compliance with procedural due process, her
separation pay equivalent to one (1) month pay, and her salary from
February 15, 1998 until the effective date of her termination on April 3,
1998. The award of backwages is DELETED for lack of basis.
SO ORDERED.
NELSON A. CULILI,
Petitioner,
- versus -
CORONA, C.J.,
Chairperson,
VELASCO, JR.,
EASTERN
TELECOMMUNICATIONS
LEONARDO-DE
CASTRO,
PHILIPPINES,
INC.,
SALVADOR HIZON (President
and Chief Executive Officer),
EMILIANO JURADO (Chairman
of
the
Board),
VIRGILIO
GARCIA (Vice President) and
STELLA GARCIA (Assistant Vice
President),
Respondents.
February 9, 2011
x----------------------------------------------------x
DECISION
As part of the first phase, ETPI, on December 10, 1998, offered to its
employees who had rendered at least fifteen years of service, the Special
Retirement Program, which consisted of the option to voluntarily retire at an
earlier age and a retirement package equivalent to two and a half (2) months
salary for every year of service.[12] This offer was initially rejected by the
Eastern Telecommunications Employees Union (ETEU), ETPIs duly
recognized bargaining agent, which threatened to stage a strike. ETPI
explained to ETEU the exact details of the Right-Sizing Program and the
Special Retirement Program and after consultations with ETEUs members,
ETEU agreed to the implementation of both programs. [13] Thus, on February
8, 1999, ETPI re-offered the Special Retirement Program and the
corresponding retirement package to the one hundred two (102) employees
who qualified for the program.[14] Of all the employees who qualified to avail
of the program, only Culili rejected the offer.[15]
After the successful implementation of the first phase of the RightSizing Program, ETPI, on March 1, 1999 proceeded with the second phase
which necessitated the abolition, transfer and merger of a number of ETPIs
departments.[16]
March 8, 1999
To: N. Culili
Thru: S. Dobbin/G. Ebue
From: AVP-HRD
-----------------------------------------------------------------------------------------
opportunity to thank you for your services and wish you well in
your future endeavors.
(Signed)
Stella J. Garcia[19]
This letter was similar to the memo shown to Culili by the union
president weeks before Culili was dismissed. The memo was dated
December 7, 1998, and was advising him of his dismissal effective January
4, 1999 due to the Right-Sizing Program ETPI was going to implement to
cut costs and avoid losses.[20]
ETPI denied singling Culili out for termination. ETPI claimed that
while it is true that they offered the Special Retirement Package to reduce
their workforce to a sustainable level, this was only the first phase of the
Right-Sizing Program to which ETEU agreed. The second phase intended to
simplify and streamline the functions of the departments and employees of
ETPI. The abolition of Culilis department - the Service Quality Department and the absorption of its functions by the Business and Consumer Accounts
Department were in line with the programs goals as the Business and
Consumer Accounts Department was more economical and versatile and it
was flexible enough to handle the limited functions of the Service Quality
Department. ETPI averred that since Culili did not avail of the Special
Retirement Program and his position was subsequently declared redundant,
it had no choice but to terminate Culili. [23] Culili, however, continued to
report for work. ETPI said that because there was no more work for Culili, it
was constrained to serve a final notice of termination[24] to Culili, which
Culili ignored. ETPI alleged that Culili informed his superiors that he would
agree to his termination if ETPI would give him certain special work tools in
addition to the benefits he was already offered. ETPI claimed that Culilis
counter-offer was unacceptable as the work tools Culili wanted were worth
almost a million pesos. Thus, on March 26, 1999, ETPI tendered to Culili
his final pay check of Eight Hundred Fifty-Nine Thousand Thirty-Three and
99/100 Pesos (P859,033.99) consisting of his basic salary, leaves, 13th month
pay and separation pay.[25] ETPI claimed that Culili refused to accept his
termination and continued to report for work.[26] ETPI denied hiring outside
contractors to perform Culilis work and denied offering added incentives to
its employees to induce them to retire early. ETPI also explained that the
December 7, 1998 letter was never given to Culili in an official
capacity. ETPI claimed that it really needed to reduce its workforce at that
time and that it had to prepare several letters in advance in the event that
none of the employees avail of the Special Retirement Program. However,
ETPI decided to wait for a favorable response from its employees regarding
the Special Retirement Program instead of terminating them.[27]
On April 30, 2001, the Labor Arbiter rendered a decision finding ETPI
guilty of illegal dismissal and unfair labor practice, to wit:
a.
Basic
Salary
mos.) P696,720.96
(P29,030
24
b.
c.
Leave Benefits
1.
2.
3.
d.
e.
Uniform Allowance
P7,000/annum x 2 years __14,000.00
P949,699.72
II. Damages
a.
MoralP500,000.00
b.
ExemplaryP250,000.00
WHEREFORE,
the
Decision
appealed
from
is AFFIRMED granting complainant the money claims prayed
for including full backwages, allowances and other benefits or
their monetary equivalent computed from the time of his illegal
dismissal on 16 March 1999 up to his actual reinstatement
except the award of moral and exemplary damages which is
modified to P200,000.00 for moral and P100,000.00 for
exemplary
damages. For
this
purpose,
this
case
is REMANDED to the Labor Arbiter for computation of
backwages and other monetary awards to complainant.[29]
ETPI filed a Petition for Certiorari under Rule 65 of the Rules of Civil
Procedure before the Court of Appeals on the ground of grave abuse of
discretion. ETPI prayed that a Temporary Restraining Order be issued
against the NLRC from implementing its decision and that the NLRC
decision and resolution be set aside.
The Court of Appeals found that Culilis position was validly abolished due
to redundancy. The Court of Appeals said that ETPI had been very candid
with its employees in implementing its Right-Sizing Program, and that it
was highly unlikely that ETPI would effect a company-wide reorganization
simply for the purpose of getting rid of Culili. The Court of Appeals also
held that ETPI cannot be held guilty of unfair labor practice as mere
contracting out of services being performed by union members does not per
se amount to unfair labor practice unless it interferes with the employees
right to self-organization. The Court of Appeals further held that ETPIs
officers cannot be held liable absent a showing of bad faith or
malice. However, the Court of Appeals found that ETPI failed to observe the
standards of due process as required by our laws when it failed to properly
notify both Culili and the DOLE of Culilis termination. The Court of
Appeals maintained its position in its September 13, 2004 Resolution when
it denied Culilis Motion for Reconsideration and Urgent Motion to Reinstate
the Writ of Execution issued by the Labor Arbiter, and ETPIs Motion for
Partial Reconsideration.
Culili is now before this Court praying for the reversal of the Court of
Appeals decision and the reinstatement of the NLRCs decision based on the
following grounds:
A.
B.
II
THE COURT OF APPEALS DECIDED A QUESTION OF
SUBSTANCE NOT IN ACCORD WITH LAW AND
JURISPRUDENCE IN FINDING THAT NO UNFAIR LABOR
PRACTICE ACTS WERE COMMITTED AGAINST THE
PETITIONER.
III
THE COURT OF APPEALS DECIDED A QUESTION OF
SUBSTANCE NOT IN ACCORD WITH LAW AND
JURISPRUDENCE IN DELETING THE AWARD OF
MORAL
AND
EXEMPLARY
DAMAGES
AND
ATTORNEYS FEES IN FAVOR OF PETITIONER AND IN
DISSOLVING THE WRIT OF EXECUTION DATED 8
SEPTEMBER 2003 ISSUED BY THE LABOR ARBITER.
IV
THE COURT OF APPEALS DECIDED A QUESTION OF
SUBSTANCE NOT IN ACCORD WITH LAW AND
JURISPRUDENCE IN ABSOLVING THE INDIVIDUAL
RESPONDENTS OF PERSONAL LIABILITY.
CONTRARY
TO
APPLICABLE
LAW
AND
JURISPRUDENCE, THE COURT OF APPEALS, IN A
CERTIORARI PROCEEDING, REVIEWED THE FACTUAL
FINDINGS OF THE NLRC WHICH AFFIRMED THAT OF
THE LABOR ARBITER AND, THEREAFTER, ISSUED A
WRIT OF CERTIORARI REVERSING THE DECISIONS OF
This Court has already confirmed the power of the Court of Appeals, even
on a Petition for Certiorari under Rule 65,[32] to review the evidence on
record, when necessary, to resolve factual issues:
This Court also held that the following evidence may be proffered to
substantiate redundancy: the new staffing pattern, feasibility studies/
proposal on the viability of the newly created positions, job description and
the approval by the management of the restructuring.[41]
In the case at bar, ETPI was upfront with its employees about its plan
to implement a Right-Sizing Program. Even in the face of initial opposition
from and rejection of the said program by ETEU, ETPI patiently negotiated
with ETEUs officers to make them understand ETPIs business dilemma and
its need to reduce its workforce and streamline its organization. This
evidently rules out bad faith on the part of ETPI.
In his affidavit dated April 10, 2000,[42] Mr. Arnel D. Reyel, the Head
of both the Business Services Department and the Finance Department of
ETPI, described how ETPI went about in reorganizing its departments. Mr.
Reyel said that in the course of ETPIs reorganization, new departments were
created, some were transferred, and two were abolished. Among the
departments abolished was the Service Quality Department. Mr. Reyel said
that ETPI felt that the functions of the Service Quality Department, which
catered to both corporate and small and medium-sized clients, overlapped
and were too large for a single department, thus, the functions of this
department were split and simplified into two smaller but more focused and
efficient departments. In arriving at the decision to abolish the position of
Senior Technician, Mr. Reyel explained:
Culili maintains that ETPI had already decided to dismiss him even
before the second phase of the Right-Sizing Program was implemented as
evidenced by the December 7, 1998 letter.
Culili also alleged that ETPI is guilty of unfair labor practice for
violating Article 248(c) and (e) of the Labor Code, to wit:
Art. 248. Unfair labor practices of employers. - It shall
be unlawful for an employer to commit any of the following
unfair labor practice:
xxxx
xxxx
In the past, we have ruled that unfair labor practice refers to acts that
violate the workers' right to organize. The prohibited acts are related to the
workers' right to self-organization and to the observance of a CBA. [45] We
have likewise declared that there should be no dispute that all the prohibited
acts constituting unfair labor practice in essence relate to the workers' right
to self-organization.[46] Thus, an employer may only be held liable for unfair
labor practice if it can be shown that his acts affect in whatever manner the
right of his employees to self-organize.[47]
Both the Labor Arbiter and the NLRC found ETPI guilty of unfair
labor practice because of its failure to dispute Culilis allegations.
According to jurisprudence, basic is the principle that good faith is
presumed and he who alleges bad faith has the duty to prove the same.[48] By
imputing bad faith to the actuations of ETPI, Culili has the burden of proof
to present substantial evidence to support the allegation of unfair labor
practice. Culili failed to discharge this burden and his bare allegations
deserve no credit.
Although the Court finds Culilis dismissal was for a lawful cause and
not an act of unfair labor practice, ETPI, however, was remiss in its duty to
observe procedural due process in effecting the termination of Culili.
We have previously held that there are two aspects which characterize
the concept of due process under the Labor Code: one is substantive whether
the termination of employment was based on the provision of the Labor
Code or in accordance with the prevailing jurisprudence; the other is
procedural the manner in which the dismissal was effected.[49]
Section 2(d), Rule I, Book VI of the Rules Implementing the Labor Code
provides:
xxxx
ETPI does not deny its failure to provide DOLE with a written notice
regarding Culilis termination. It, however, insists that it has complied with
the requirement to serve a written notice to Culili as evidenced by his
admission of having received it and forwarding it to his union president.
The Court of Appeals, in finding that Culili was not afforded procedural due
process, held that Culilis dismissal was ineffectual, and required ETPI to pay
Culili full backwages in accordance with our decision in Serrano v. National
Labor Relations Commission.[55] Over the years, this Court has had the
opportunity to reexamine the sanctions imposed upon employers who fail to
comply with the procedural due process requirements in terminating its
employees. In Agabon v. National Labor Relations Commission,[56] this
Court reverted back to the doctrine in Wenphil Corporation v. National
Labor Relations Commission[57] and held that where the dismissal is due to a
just or authorized cause, but without observance of the due process
requirements, the dismissal may be upheld but the employer must pay an
indemnity to the employee. The sanctions to be imposed however, must be
stiffer than those imposed in Wenphil to achieve a result fair to both the
employers and the employees.[58]
Hence, since it has been established that Culilis termination was due to an
authorized cause and cannot be considered unfair labor practice on the part
of ETPI, his dismissal is valid. However, in view of ETPIs failure to comply
with the notice requirements under the Labor Code, Culili is entitled to
nominal damages in addition to his separation pay.
Culili
asserts
that
the
individual
respondents, Salvador
Hizon, Emiliano Jurado, Virgilio Garcia, and Stella Garcia, as ETPIs
officers, should be held personally liable for the acts of ETPI which were
tainted with bad faith and arbitrariness. Furthermore, Culili insists that he is
entitled to damages because of the sufferings he had to endure and the
malicious manner he was terminated.
In illegal dismissal cases, moral damages are awarded only where the
dismissal was attended by bad faith or fraud, or constituted an act oppressive
to labor, or was done in a manner contrary to morals, good customs or public
policy.[62] Exemplary damages may avail if the dismissal was effected in a
wanton, oppressive or malevolent manner to warrant an award for exemplary
damages.[63]
It is our considered view that Culili has failed to prove that his
dismissal was orchestrated by the individual respondents herein for the mere
purpose of getting rid of him. In fact, most of them have not even dealt with
Culili personally. Moreover, it has been established that his termination was
for an authorized cause, and that there was no bad faith on the part of ETPI
in implementing its Right-Sizing Program, which involved abolishing
certain positions and departments for redundancy. It is not enough that ETPI
failed to comply with the due process requirements to warrant an award of
damages, there being no showing that the companys and its officers acts
were attended with bad faith or were done oppressively.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 181738
necessary.11 At the time of her termination, the respondent was receiving the
salary rate ofP19,651.41 per month.12
For its part, the petitioner insisted that Viajars dismissal was due to the
redundancy of her position. GMC reasoned out that it was forced to
terminate the services of the respondent because of the economic setbacks
the company was suffering which affected the companys profitability, and
the continuing rise of its operating and interest expenditures. Redundancy
was part of the petitioners concrete and actual cost reduction measures.
GMC also presented the required "Establishment Termination Report" which
it filed before the Department of Labor and Employment (DOLE) on
October 28, 2003, involving thirteen (13) of its employees, including Viajar.
Subsequently, GMC issued to the respondent two (2) checks respectively
amounting to P440,253.02 andP21,211.35 as her separation pay.13
On April 18, 2005, the Labor Arbiter (LA) of the NLRC RAB No. VII, Cebu
City, rendered a Decision, the decretal portion of which reads:
WHEREFORE, foregoing considered, judgment is hereby rendered
declaring that respondents acted in good faith in terminating the complainant
from the service due to redundancy of works, thus, complainants refusal to
accept the payment of her allowed separation pay and other benefits under
the law is NOT JUSTIFIED both in fact and law, and so, therefore
complainants case for illegal dismissal against the herein respondents and
so are complainants monetary claims are hereby ordered DISMISSED for
lack of merit.
SO ORDERED.14
The LA found that the respondent was properly notified on October 30, 2003
through a Letter-Memorandum dated October 27, 2003, signed by GMCs
HRD Manager Almocera, that her position as Purchasing Staff had been
declared redundant. It also found that the petitioner submitted to the DOLE
on October 28, 2003 the "Establishment Termination Report." The LA even
faulted the respondent for not questioning the companys action before the
DOLE Regional Office, Region VII, Cebu City so as to compel the
petitioner to prove that Viajars position was indeed redundant. It ruled that
the petitioner complied with the requirements under Article 283 of the Labor
Code, considering that the nation was then experiencing an economic
downturn and that GMC must adopt measures for its survival.15
Viajar appealed the aforesaid decision to the NLRC. On October 28, 2005,
the NLRC promulgated its decision, the dispositive portion of which reads:
WHEREFORE, premises considered, the Decision of the Labor Arbiter
declaring the validity of complainants termination due to redundancy is
hereby AFFIRMED. Respondent General Milling Corporation is hereby
ordered to pay complainants separation pay in the amount of P461,464.37.
SO ORDERED.16
The NLRC, however, stated that it did not agree with the LA that Viajar
should be faulted for failing to question the petitioners declaration of
redundancy before the DOLE Regional Office, Region VII, Cebu City. It
was not imperative for Viajar to challenge the validity of her termination due
to redundancy.17 Notwithstanding, the NLRC affirmed the findings of the LA
that Viajars dismissal was legal considering that GMC complied with the
requirements provided for under Article 283 of the Labor Code and existing
jurisprudence, particularly citing Asian Alcohol Corporation v. NLRC.18 The
NLRC further stated that Viajar was aware of GMCs "reduction mode," as
shown in the GMC Vismin Manpower Complement, as follows:
No. of Employees
Terminated (Redundancy)
Year
Manpower Profile
2000
795
2001
782
2002
736
41
2003
721
24
2004
697
16
2005
0619
27, 2003 addressed to the respondent which was received on October 30,
2003;29 (ii) the "Establishment Termination Report" as prescribed by the
DOLE;30 (iii) the two (2) checks issued in the respondents name amounting
to P440,253.02 and P21,211.35 as separation pay;31 and (iv) the list of
dismissed employees as of June 6, 2006 to show that GMC was in a
"reduction mode."32 Both the LA and the NLRC found these sufficient to
prove that the dismissal on the ground of redundancy was done in good
faith.
The Court does not agree.
Article 283 of the Labor Code provides that redundancy is one of the
authorized causes for dismissal. It reads:
Article 283. Closure of establishment and reduction of personnel. The
employer may also terminate the employment of any employee due to the
installment of labor-saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the worker and the
Ministry of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of laborsaving devices or redundancy, the worker affected thereby shall be entitled
to a separation pay equivalent to at least his one (1) month pay or to at least
one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses
or reverses, the separation pay shall be equivalent to one (1) month pay or at
least one-half (1/2) month pay for every year of service, whichever is higher.
A fraction of at least six (6) months shall be considered one (1) whole year.
(Emphasis supplied)
From the above provision, 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
bandy [sic] clock. She was also made to sign documents, including an
"APPLICATION FOR RETIREMENT AND BENEFITS" in the guise of
payment of her separation pay. When petitioner confronted her immediate
superior regarding her termination, the latters shock aggravated her
confusion and suffering. She also learned about the employment of a number
of new employees, several of whom were even employed in her former
department. Petitioner likewise suffered mental torture brought about by her
termination even though its cause was not clear and
substantiated.50 (Citations omitted)
WHEREFORE, the petition is DENIED. The Decision dated September 21,
2007 of the Court of Appeals, as well as its Resolution dated January 30,
2008 in CA-G.R. SP No. 01734, are hereby AFFIRMED.
SO ORDERED.
THIRD DIVISION
G.R. No. 192518, October 15, 2014
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY AND/OR
ERNANI TUMIMBANG,Petitioners, v. HENRY
ESTRANERO, Respondent.
DECISION
REYES, J.:
This appeal by petition for review1 seeks to annul and set aside the
Decision2 dated February 15, 2010 and Resolution3 dated May 25, 2010 of
the Court of Appeals (CA) in CA-G.R. SP No. 108297, which affirmed the
Decision4 dated August 29, 2008 of the National Labor Relations
Commission (NLRC) in NLRC-NCR Case No. 00-10-08679-05, and its
Resolution5 dated January 30, 2009 denying Philippine Long Distance
Telephone Company's (PLDT) Motion for Reconsideration. The NLRC
Decision affirmed the Decision6 dated December 8, 2006 of the Labor
Arbiter (LA) ordering PLDT to pay Henry Estranero (respondent) his
separation pay.
The Facts
basic monthly salary for every year of service by way of redundancy pay or
equivalent to P240,000.00. In addition, he was also entitled to other benefits
he has earned for the years prior to, and during the year of his actual
separation, i.e., 2002 and 2003 sick leave benefits, 2002 and 2003 vacation
leave and vacation leave premium benefits, longevity pay, mid-year bonus,
13th month pay and Christmas bonus, all in the sum of P27,028.37. Thus, his
aggregate redundancy pay plus other earned benefits amounted to
P267,028.37.
However, the respondent had outstanding liabilities arising from various
loans he obtained from different entities, namely: the Home Development
Mutual Fund (HDMF), PLDT Employees Credit Cooperative, Inc., PLDT
Service Cooperative, Inc.,7 Social Security System (SSS), and the
Manggagawa ng Komunikasyon sa Pilipinas, which summed to
P267,028.37.8 Thus, PLDT deducted the said amount from the payment that
the respondent was supposed to receive as his redundancy pay.
As a result, when the respondent was made to sign the Receipt, Release and
Quitclaim, it showed that his take home pay was in the amount of "zero
pesos." This prompted the respondent to retract his availment of the
separation pay package offered to him through a letter addressed to the
company dated May 8, 2003. Despite said retraction, however, the
respondent was no longer allowed to report for work.
Subsequently, the respondent filed a complaint for illegal dismissal with
reinstatement, as well as moral and exemplary damages plus attorney's fees,
docketed as NLRC-NCR Case No. 04-02820-97, against PLDT and Ernani
Tumimbang (petitioners), the Division Head of the Fleet Management
Division where the respondent was assigned.
In due course, the LA rendered a Decision dated December 8, 2006 in favor
of the respondent, disposing as follows:chanRoblesvirtualLawlibrary
WHEREFORE, foregoing premises considered, respondent Philippine Long
Distance Telephone Company is hereby ordered to pay complainant Henry
T. Estra[n]ero his separation pay in the amount of P267,038.37 [sic].
The "set-off of complainant's outstanding loans in the amount of
P267,038.37 [sic] against his separation pay invoked by respondents is
hereby dismissed for lack of jurisdiction.
All other claims are hereby ordered dismissed for lack of merit.
SO ORDERED.9
The LA sustained the validity of PLDT's redundancy program as an
authorized cause to terminate the employment of the respondent, and his
entitlement to the redundancy/separation pay pursuant to the MRP, being
more advantageous than the benefits allowed under the law. The LA,
however, ruled that the office lacks jurisdiction to pass upon the issue of
PLDT's act in deducting the total outstanding loans which the respondent
obtained from different entities since the same does not involve an
employer-employee relationship, and may only be enforced by PLDT
through a separate civil action in the regular courts.
On appeal, the NLRC affirmed the LA decision. The NLRC ruled that the
respondent should be paid his separation pay on account of redundancy. As
to the setting-off of the respondent's outstanding loans, it agreed with the LA
that the same is not a labor dispute but one arising from a debtor-creditor
relation where PLDT stands as a collecting agent over which the labor
tribunals has no jurisdiction.
The petitioners filed a motion for reconsideration but it was denied; hence,
they filed a petition forcertiorari with the CA.
On February 15, 2010, the appellate court promulgated its Decision
affirming the assailed NLRC decision. The CA held that there is no more
question as to the legality of the respondent's dismissal from employment as
the respondent had accepted the validity of his dismissal from service. The
controversy arose when the petitioners deducted from the respondent's
redundancy pay the latter's outstanding liabilities arising from various loans
he obtained from different entities such that his take home pay became zero.
In sustaining the respondent's claim for redundancy pay, the appellate court
ratiocinated:chanRoblesvirtualLawlibrary
The deductions subject of this case pertain to loans which x x x respondent
availed from various entities. Hence, as above stated, there must be proof
that there is a personal written authorization from x x x respondent
authorizing petitioners to deduct from his terminal pay his outstanding loans
issues may be considered and resolved only when the findings of facts and
the conclusions of the [LA] are inconsistent with those of the NLRC and the
CA."11 It is apparent from the arguments of the petitioners that they are
calling for the Court to re-evaluate the evidence presented by the parties.
"Once the issue invites a review of the evidence, the question posed is one of
fact."12 The petitioners are, therefore, raising questions of facts beyond the
ambit of the Court's review.
Nevertheless, this Court has thoroughly reviewed the records in this case and
found that the NLRC did not commit any grave abuse of its discretion
amounting to lack or excess of jurisdiction in rendering its decision in favor
of the respondent. The CA acted in accord with the evidence on record and
case law when it dismissed the petition and affirmed the assailed decision
and resolution of the NLRC.
In the main, this Court is in consonance with the CA that the instant case is
not about jurisdiction to determine the validity of the set-off but more of the
petitioner's authority to deduct from the redundancy pay of the respondent
his outstanding loans obtained from different entities. It is whether the
deductions done by the petitioners are authorized under existing laws or
subject to a written authorization from the respondent.13cralawred
The antecedent facts that gave rise to the respondent's dismissal from
employment are not disputed in this case. There is no question about the
validity of the MRP implemented by PLDT in 1995, since redundancy is one
of the authorized causes for termination of employment.14 The respondent,
however, argued that the deduction of the outstanding loans that he obtained
from different entities from his redundancy pay was contrary to law. On the
other hand, the petitioners insisted that they can validly deduct the said loans
from the respondent's redundancy pay since the respondent was able to
obtain said loans because of his employment with PLDT.
It is clear in Article 11315 of the Labor Code that no employer, in his own
behalf or in behalf of any person, shall make any deduction from the wages
of his employees, except in cases where the employer is authorized by law
or regulations issued by the Secretary of Labor and Employment, among
others. The Omnibus Rules Implementing the Labor Code, meanwhile,
provides that deductions from the wages of the employees may be made by
the employer when such deductions are authorized by law, or when the
deductions are with the written authorization of the employees for payment
Acting Chairperson per Special Order No. 1815 dated October 3, 2014 vice
Associate Justice Presbitero J. Velasco, Jr.
**
Additional member per Special Order No. 1816 dated October 3, 2014 vice
Associate Justice Presbitero J. Velasco, Jr.
1
Id. at 65-66.
Id. at 91-97.
Id. at 99-100.
P 5,585.57
4,000.00
Pilipinas Loan
PLDT Employees Credit Cooperative,
Inc. Loan
PLDT Service Cooperative, Inc. Loan
SSS
Loan___________________________
Total Outstanding Loans
78,011.93
177,704.31
11,730.00
267,028.37 [sic
]
Rollo, p. 157.
9
Rollo, p. 160.
10
Id. at 58-59.
11
12
Go v. Looyuko, G.R. No. 196529, July 1, 2013, 700 SCRA 313, 318-319.
13
Rollo, p. 35.
14
employees, except:chanroblesvirtuallawlibrary
(a) In cases where the worker is insured with his consent by the employer,
and the deduction is to recompense the employer for the amount paid by him
as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to
check-off has been recognized by the employer or authorized in writing by
the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by
Secretary of Labor.
16
Rule VIII, Section 10. Deductions from the wages of the employees
may be made by the employer in any of the following cases:
(a) When the deductions are authorized by law, including deductions for the
insurance premiums advanced by the employer in behalf of the employee as
well as union dues where the right to check-off has been recognized by the
employer or authorized in writing by the individual employee himself;
(b) When the deductions are with the written authorization of the
employees for payment to a third person and the employer agrees to do so,
provided that the latter does not receive any pecuniary benefit, directly or
indirectly, from the transaction
17
QUISUMBING, J.,
Chairperson,
- versus - CARPIO MORALES,
TINGA,
VELASCO, JR., and
BRION, JJ.
PURITA M. ORTEGA (represented
by Alejandro San Pedro, Jr.) and
MARINA A. MONTERO, Promulgated:
Respondents.
February 13, 2009
x---------------------------------------------------------------------------x
DECISION
TINGA, J.:
In
this Petition
for Review,[1] Coats
Manila
Bay,
Inc.
[2]
(petitioner) assails the decision of the Court of Appeals dated 25 January
2002 which ruled that respondents were illegally dismissed by petitioner as
the latter failed to substantiate its claim that it observed fair and reasonable
that respondents had better educational attainment than the other workers;
hence, the two understood what they were signing.
For purposes of the Labor Code, redundancy 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 over hiring of workers, decreased
volume of business, or dropping of a particular product line or service
activity previously manufactured or undertaken by the enterprise.[16] That no
other person was holding the same position prior to the termination of ones
services, does not show that his position had not become redundant. Indeed,
in any well-organized business enterprise, it would be surprising to find
duplication of work and two (2) or more people doing the work of one
person.[17] Just like installation of labor-saving devices, the ground of
The Court recognizes that a host of relevant factors comes into play in
determining cost-efficient saving measures and in choosing who among the
employees should be retained or separated. It is well settled that the
characterization of an employees services as no longer necessary or
sustainable, and, therefore, properly terminable, is an exercise of business
judgment on the part of the employer. However, the wisdom or soundness of
such characterization or decision is not subject to discretionary review
provided, of course, that violation of law or arbitrary or malicious action is
not shown.[19] In several instances, the Court has held that it is important for
a company to have fair and reasonable criteria in implementing its
redundancy program, such as but not limited to, (a) preferred status, (b)
efficiency and (c) seniority.[20]
\
We are satisfied that petitioner employed reasonable criteria in
choosing which positions to declare redundant.
The Court notes that considerable deliberations were made before the
redundancy program was implemented. As early as 22 April 2000,
management had been upfront regarding its plans to implement a
redundancy program, issuing a memorandum informing its employees that
imminent serious business downturn had forced it to take urgent steps to
reduce (its) workforce. The memorandum also mentioned the criteria for
selection of employees to be made redundant. Thus: x x x primarily
performance, viz absenteeism, record of disciplinary action, efficiency and
work attitude. All other things being equal, the basis will be seniority.[21]
Moreover, of the remaining terminated employees who were not reemployed, only respondents complained of illegal dismissal and
discrimination. It would probably be a different matter had petitioner reemployed each and every terminated employee, save for respondents. Had
such been the case, it would have been easy to infer that respondents were
singled out and discriminated against, and more
The Court of Appeals ruled that the release waivers and quitclaims had not
negated respondents right to pursue their claims, ratiocinating that:
What appears is that petitioners by reason of dire economic
necessity were constrained to accept their separation pay and
signed the quitclaims. When petitioners signed the quitclaims,
they faced the impending threat of losing their jobs after June
15, 2000. This dilemma placed petitioners in no position to
resist their employers offer of separation pay. The fact,
however, is that petitioners continue to press their claims
against private respondent company, which negates the idea
that they waived their rights or claims. The reason for this is
that the employee does not really stand on an equal footing with
his employer. In some cases, he may be so penurious that he is
willing to bargain even rights secured to him by law.
[25]
(emphasis supplied)
The Court disagrees. Not all quitclaims are per se invalid or against policy,
except: (1) where there is clear proof that the waiver was wangled from an
SO ORDERED.
received. Deoferio also prayed for backwages, separation pay, moral and
exemplary damages, as well as attorneys fees.10
In defense, the respondents argued that Deoferios dismissal was based on
Dr. Lees certification that: (1) his schizophrenia was not curable within a
period of six months even with proper medical treatment; and (2) his
continued employment would be prejudicial to his and to the other
employees health.11 The respondents also insisted that Deoferios presence
at Intels premises would pose an actual harm to his co-employees as shown
by his previous acts. On May 8, 2003, Deoferio emailed an Intel employee
with this message: "All souls day back to work Monday WW45.1." On
January 18, 2005, he cut the mouse cables, stepped on the keyboards, and
disarranged the desks of his co-employees.12 The respondents also
highlighted that Deoferio incurred numerous absences from work due to his
mental condition, specifically, from January 31, 2002 until February 28,
2002,13from August 2002 until September 2002,14 and from May 2003 until
July 2003.15 Deoferio also took an administrative leave with pay from
January 2005 until December 2005.16
The respondents further asserted that the twin-notice requirement in
dismissals does not apply to terminations under Article 284 of the Labor
Code.17 They emphasized that the Labor Codes implementing rules (IRR)
only requires a competent public health authoritys certification to
effectively terminate the services of an employee.18They insisted that
Deoferios separation and retirement payments for P247,517.35 were offset
by his company car loan which amounted to P448,132.43.19 He was likewise
not entitled to moral and exemplary damages, as well as attorneys fees,
because the respondents faithfully relied on Dr. Lees certification that he
was not fit to work as a product engineer.20
The Labor Arbitration Ruling
In a decision21 dated March 6, 2008,the Labor Arbiter (LA) ruled that
Deoferio had been validly dismissed. The LA gave weight to Dr. Lees
certification that Deoferio had been suffering from schizophrenia and was
not fit for employment. The evidence on record shows that Deoferios
continued employment at Intel would pose a threat to the health of his coemployees. The LA further held that the Labor Code and its IRR do not
require the employer to comply with the twin-notice requirement in
dismissals due to disease. The LA also found unmeritorious Deoferios
money claims against Intel.22
On appeal by Deoferio, the National Labor Relations Commission (NLRC)
wholly affirmed the LAs ruling.23 The NLRC also denied24 Deoferios
motion for reconsideration,25 prompting him to seek relief from the CA
through a petition for certiorari under Rule 65 of the Rules of Court.
The CAs Ruling
On February 24, 2012, the CA affirmed the NLRC decision. It agreed with
the lower tribunals findings that Deoferio was suffering from schizophrenia
and that his continued employment at Intel would be prejudicial to his health
and to those of his co-employees. It ruled that the only procedural
requirement under the IRR is the certification by a competent public health
authority on the non-curability of the disease within a period of six months
even with proper medical treatment. It also concurred with the lower
tribunals that Intel was justified in not paying Deoferio separation pay as
required by Article 284 of the Labor Code because this obligation had
already been offset by the matured car loan that Deoferio owed Intel.26
Deoferio filed the present petition after the CA denied his motion for
reconsideration.27
The Petition
In the present petition before the Court, Deoferio argues that the uniform
finding that he was suffering from schizophrenia is belied by his subsequent
employment at Maxim Philippines Operating Corp. and Philips
Semiconductors Corp., which both offered him higher compensations. He
also asserts that the Labor Code does not exempt the employer from
complying with the twin-notice requirement in terminations due to disease.28
Express, Inc. v. Payong, Jr.,37 we ruled that the employer-companys nonpresentment of a certification from a public health authority with respect to
Romualdo Payong Jr.s eye cataract was fatal to its defense.
The third element substantiates the contention that the employee has indeed
been suffering from a disease that: (1) is prejudicial to his health as well as
to the health of his co-employees; and (2) cannot be cured within a period of
six months even with proper medical treatment. Without the medical
certificate, there can be no authorized cause for the employees dismissal.
The absence of this element thus renders the dismissal void and illegal.
Simply stated, this requirement is not merely a procedural requirement, but a
substantive one.1wphi1 The certification from a competent public health
authority is precisely the substantial evidence required by law to prove the
existence of the disease itself, its non-curability within a period of six
months even with proper medical treatment, and the prejudice that it would
cause to the health of the sick employee and to those of his co-employees.
In the current case, we agree with the CA that Dr. Lees psychiatric report
substantially proves that Deoferio was suffering from schizophrenia, that his
disease was not curable within a period of six months even with proper
medical treatment, and that his continued employment would be prejudicial
to his mental health. This conclusion is further substantiated by the unusual
and bizarre acts that Deoferio committed while at Intels employ.
The twin-notice requirement applies
to terminations under Article 284 of
the Labor Code
The Labor Code and its IRR are silent on the procedural due process
required in terminations due to disease. Despite the seeming gap in the law,
Section 2, Rule 1, Book VI of the IRR expressly states that the employee
should be afforded procedural due process in all cases of dismissals.38
In Sy v. Court of Appeals39 and Manly Express, Inc. v. Payong,
Jr.,40 promulgated in 2003 and 2005, respectively, the Court finally
pronounced the rule that the employer must furnish the employee two
written notices in terminations due to disease, namely: (1) the notice to
apprise the employee of the ground for which his dismissal is sought; and
(2) the notice informing the employee of his dismissal, to be issued after the
employee has been given reasonable opportunity to answer and to be heard
on his defense. These rulings reinforce the State policy of protecting the
workers from being terminated without cause and without affording them
the opportunity to explain their side of the controversy.
From these perspectives, the CA erred in not finding that the NLRC gravely
abused its discretion when it ruled that the twin-notice requirement does not
apply to Article 284 of the Labor Code. This conclusion is totally devoid of
any legal basis; its ruling is wholly unsupported by law and jurisprudence. In
other words, the NLRCs unprecedented, whimsical and arbitrary ruling,
which the CA erroneously affirmed, amounted to a jurisdictional error.
Deoferio is entitled to nominal
damages for violation of his right to
statutory procedural due process
Intels violation of Deoferios right to statutory procedural due process
warrants the payment of indemnity in the form of nominal damages. In Jaka
Food Processing Corp. v. Pacot,41 we distinguished between terminations
based on Article 282 of the Labor Code42 and dismissals under Article 283 of
the Labor Code.43 We then pegged the nominal damages at P30,000.00 if the
dismissal is based on a just cause but the employer failed to comply with the
twin-notice requirement. On the other hand, we fixed the nominal damages
at P50,000.00 if the dismissal is due to an authorized cause under Article
283 of the Labor Code but the employer failed to comply with the notice
requirement. The reason is that dismissals for just cause imply that the
employee has committed a violation against the employer, while
terminations under Article 283 of the Labor Code are initiated by the
employer in the exercise of his management prerogative.
With respect to Article 284 of the Labor Code, terminations due to disease
do not entail any wrongdoing on the part of the employee. It also does not
FIRST DIVISION
G.R. No. 160325
October 4, 2007
At bottom, this case involves the simple issue of the legality of ones
termination from employment made complicated, however, by over analysis.
Simply put, the question at hand pivots on who has the onus of presenting
the necessary medical certificate to justify what would otherwise be
classified as legal or illegal, as the case may be, dismissal from the service.
The following may be another formulation of the issue: For purposes of
Article 284 of the Labor Code, would the dismissal of an employee on the
ground of disease under the said Article 284 still require the employer to
present a certification from a competent public health authority that the
disease is of such a nature that it could not be cured within a period of six
months even with proper medical treatment? To both the NLRC and the CA,
a dismissal on the ground of disease under Article 284 of the Code is illegal
only if the employee himself presents the required certification from the
proper health authority. Since, as in this case, petitioner failed to produce
such certification, his dismissal could not be illegal.
In the precise words of the NLRC which the CA effectively affirmed:
Neither can it be gainsaid that Article 284 of the Labor Code applies
in the instant case since the complainant [petitioner] failed to
establish that he is suffering from a disease and his continued
employment is prohibited by law or prejudicial to his health or to
the health of his co-employees nor was he able to prove that his illness
is of such nature or at such stage that it cannot be cured within a
period of six months even with proper treatment.8
In order for the complainant to be covered by Article 284 of the
Labor Code, he must first present a certification by a competent
public health authority that his continued employment will result
in the aforesaid consequences, but unfortunately for the
complainant, we find none in the instant case. For the respondents
to require the complainant to submit a medical certificate showing that
he is already physically fit as a condition of his continued
employment under the prevailing circumstance cannot be considered
as neither harsh nor oppressive. xxx
the Labor Code provides Where the employee suffers from a disease
and his continued employment is prohibited by law or prejudicial to
his health or to the health of his co-employees, the employer shall not
terminate his employment, unless there is a certification by a
competent public authority that the disease is of such nature or at such
a stage, that it cannot be cured within a period of six (6) months even
with proper medical treatment.. There is absolutely nothing on
record to show that such a certification was ever obtained by [the
employer] much less that one was issued by a competent public
authority [o]n the contrary, what appears on record is a Medical
Certificate dated May 5, 1999 issued by Dr. Lenita C. de Castro
certifying to the contrary, i.e., that [the employee] was in fact already
fit to return to work. However, [the employer] did not accept the
certificate and insisted that [the employee] present one issued by a
government physician. For his failure to present such a certificate, [the
employee] was penalized with dismissal. Obviously, the condition
imposed by [the employer] finds no basis under the law. To
reiterate, contrary to [the employers] insistence that [the
employee] first obtain a medical certificate attesting that he was
already cured of pulmonary tuberculosis, the abovequoted Sec. 9,
Rule 1, Book VI, of the Omnibus Rules is clear that the burden is
upon [the employer] not [the employee] to justify the dismissal
with a certificate public authority that [the employees] disease is
at such stage or of such nature that it cannot be cured within six
(6) months even with proper medical treatment. For [the
employers] blatant failure to present one, we can only rule that
[the employees] dismissal, like that of Garrido, is illegal, invalid
and unjustified. (Emphasis and words in brackets supplied.)
In Triple Eight Integrated Services, Inc. v. NLRC,11 the Court explains why
the submission of the requisite medical certificate is for the employers
compliance, thus:
The requirement for a medical certificate under Article 284 of the
Labor Code cannot be dispensed with; otherwise, it would sanction
agree with the NLRC that petitioner was validly dismissed because his
continued employment was prohibited by the basic legal mandate that
reasonable diligence must be exercised to prevent prejudice to the public,
which justified respondents in refusing work to petitioner. Petitioner could
have been admitted back to work performing other tasks, such as cleaning
and maintaining respondent companys machine and transportation assets.
As a final consideration, the Court notes that the NLRC, as sustained by the
CA, considered the petitioner as a field worker and, on that basis, denied his
claim for benefits under Articles 9413 to 9514 of the Labor Code, such as
holiday pay and service incentive leave pay. Article 82 of the Code lists
personnel who are not entitled to the benefits aforementioned.15 Among the
excluded group are "field personnel," referring to non-agricultural
employees who regularly perform their duties away from the principal place
of business or branch office of the employer and whose actual hours of work
in the field cannot be determined with reasonable certainty. As a general
proposition, field personnel are those whose job/service are not or cannot be
effectively monitored by the employer or his representative, their workplace
being away from the principal office and whose hours and days of work
cannot be determined with reasonable certainty. Field personnel are paid
specific amount for rendering specific service or performing specific work.
If required to be at specific places at specific times, employees, including
drivers, cannot be said to be field personnel despite the fact that they are
performing work away from the principal office of the employer. Thus, to
determine whether an employee is a field employee, it is also necessary to
ascertain if actual hours of work in the field can be determined with
reasonable certainty by the employer. In so doing, an inquiry must be made
as to whether or not the employees time and performance are constantly
supervised by the employer.16
Guided by the foregoing norms, petitioner was definitely a regular employee
of respondent company and not its field personnel, as the term is used in the
Labor Code. As it were, he was based at the principal office of the
respondent company. His actual work hours, i.e., from 6:00 a.m. to 6:00
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 is the Decision2 dated April
30, 2007 of the Court of Appeals (CA) in CA-G.R. SP. No. 75958 which
affirmed with modification the Decision3 dated August 30, 2002 of the
National Labor Relations Commission (NLRC) in NLRC CA No. 03173902, applying the 22.5-day multiplier in computing respondent Filipinas A.
Lavandera' s (Filipinas) retirement benefits differential, with legal interest
reckoned from the filing date of the latter's illegal dismissal complaint.
The Facts
Filipinas was employed by petitioner Grace Christian High School (GCHS)
as high school teacher since June1977, with a monthly salary of 18,662.00
as of May 31, 2001.4
On August 30, 2001,5 Filipinas filed a complaint for illegal (constructive)
dismissal, non-payment of service incentive leave (SIL) pay, separation pay,
service allowance, damages, and attorneys fees against GCHS6 and/or its
principal,7 Dr. James Tan. She alleged that on May 11, 2001, she was
informed that her serviceswere to be terminated effective May 31, 2001,
pursuant to GCHS retirement plan which gives the school the option to
retire a teacher who has rendered at least 20 years of service, regardless of
age, with a retirement pay of one-half () month for every year of service.
At that time, Filipinas was only 58 years old and still physically fit to work.
She pleaded with GCHS toallow her to continue teaching but her services
were terminated,8 contrary to the provisions of Republic Act No. (RA)
7641,9 otherwise known as the "Retirement Pay Law."
For their part, GCHS denied that they illegally dismissed Filipinas. They
asserted that the latter was considered retired on May 31, 1997 after having
rendered 20 years of service pursuant to GCHS retirement plan and that she
was duly advised that her retirement benefits in the amount of 136,210.00
based on her salary atthe time of retirement, i.e., 13,621.00, had been
deposited to the trustee-bank in her name. Nonetheless, her services were
retained on a yearly basis until May 11, 2001 when she was informed that
her year-to-year contract would no longer be renewed.10
The LA Ruling
In a Decision11 dated March 26, 2002, the Labor Arbiter (LA) dismissed the
illegal dismissal complaint for lack of merit.
The LA found that GCHS has a retirement plan for its faculty and nonfaculty members which pertinently provides:
ARTICLE X
RETIREMENT DATES12
Section 1. Normal Retirement Date For qualified members of the Plans, the
normal retirement date shall be the last day of the month during which he
attains age sixty (60) regardless of length of service or upon completion of
20 years of service unless extended at the option of the School. Such
extension is subject tothe approval of the School on a case to case and year
to year basis. The School reserves the right to require an employee before it
approveshis application for an extension of service beyond the normal
retirement date, to have a licensed physician appointed by the School, certify
that the employee concerned has no physical and/or mental impediments
which will prevent the employee from performing the duties in the
School.13 (Emphasis supplied)
Consequently, the LA ruled that Filipinas was not terminated from
employment but was considered retired14 as of May 31, 1997 after rendering
20 years of service15 and was only allowed by GCHS to continue teaching on
a year-to-year basis (until May 31, 2001)in the exercise of its option to do so
under the aforementioned retirement plan until she was informed that her
contract would not be renewed.16
Nonetheless, the LA found the retirement benefits payable under GCHS
retirement plan to be deficient vis--vis those provided under RA
7641,17 and, accordingly, awarded Filipinas retirement pay differentials
based on her latest salaryas follows:
P18,662.00/30 =
P622.06/day
P622.06 x 22.5 =
P13,996.35 x 20 =
P279,927.00
- P136,210.00
P143,717.00
18
P13,624.00
30 days
26
Daily rate
P454.13
x 22.5 days
x 22.5 days
P10,218.00
x 20 years
27
x 20 years
P204,360.00
P136,210.00
P68,150.00
29
The CA further imposed legal interestat the rate of six percent (6%) per
annum on the award reckoned from the date of the filing of the illegal
dismissal complaint until actual payment30 pursuant to the Courts Decision
in Manuel L. Quezon University v. NLRC(MLQU v. NLRC).31 Unperturbed,
GCHS filed the instant petition.
The Issue before the Court
The essential issue in this case is whether or not the CA committed
reversible error in using the multiplier "22.5 days" in computing the
retirement pay differentials of Filipinas.
The Courts Ruling
The petition is bereft of merit.
RA 7641, which was enacted on December 9, 1992, amended Article 287 of
the Labor Code, providing for the rules on retirement pay to qualified private
sector employees in the absence of any retirement plan in the establishment.
The said law32 states that "an employees retirement benefits under any
collective bargaining [agreement (CBA)] and other agreements shall not be
less than those provided" under the same that is, at least onehalf (1/2)
month salary for every year of service, a fraction of at least six (6) months
being considered as one whole year and that "[u]nless the parties provide
for broader inclusions, the term one-half (1/2) month salary shall mean
fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash
equivalent of not more than five (5) days of service incentive leaves."
The foregoing provision is applicable where (a) there is no CBA or other
applicable agreement providing for retirement benefits to employees, or (b)
there is a CBA or other applicableagreement providing for retirement
benefits but it is below the requirement set by law.33 Verily, the determining
factor in choosing which retirement scheme to apply is still superiority in
terms of benefits provided.34
In the present case, GCHS has a retirement plan for its faculty and nonfaculty members, which gives it the option to retire a teacher who has
rendered at least 20 years of service, regardless of age, with a retirement pay
of one-half (1/2) month for every year ofservice. Considering, however, that
GCHS computed Filipinas retirement pay without including one-twelfth
(1/12) of her 13th month pay and the cash equivalent of her five (5) days
SIL, both the NLRC and the CA correctly ruled that Filipinas retirement
benefits should be computed in accordance withArticle 287 of the Labor
Code, as amended by RA 7641, being the more beneficent retirement
scheme. They differ, however, in the resulting benefit differentials due to
divergent interpretations of the term "one-half (1/2) month salary" as used
under the law.
The Court, in the case of Elegir v. Philippine Airlines,Inc.,35 has recently
affirmed that "one-half (1/2) month salary means 22.5 days: 15 days plus 2.5
days representingone-twelfth (1/12) of the 13th month pay and the
remaining 5 days for [SIL]."36 The Court sees no reason to depart from this
interpretation. GCHS argument37 therefore that the 5 days SIL should be
likewise pro-rated to their 1/12 equivalent must fail.1wphi1
Section 5.2, Rule II38 of the Implementing Rules of Book VI of the Labor
Code, as amended, promulgated to implement RA 7641, further clarifies
what comprises the " month salary" due a retiring employee, to wit:
RULE II
Retirement Benefits
xxxx
SEC. 5. Retirement Benefits.
xxxx
5.2 Components of One-half (1/2) Month Salary. For the purpose of
determining the minimum retirement pay due an employee under this Rule,
the term "one-half month salary" shall include all the following:
(a) Fifteen (15) days salary of the employee based on his latest salary
rate. As used herein, the term "salary" includes all remunerations paid
by an employer to his employees for services rendered during normal
working days and hours, whether such payments are fixed or
ascertained on a time, task, piece or commission basis, or other
method of calculating the same, and includes the fair and reasonable
value, as determined by the Secretary of Labor and Employment, of
food, lodging or other facilities customarily furnished by the employer
to his employees. The term does not include cost of living
allowance,profit-sharing payments and other monetary benefits which
are not considered as part of or integrated into the regular salary of the
employees.
(b) The cash equivalent of not more than five (5) days of service
incentive leave;
(c) One-twelfth of the 13th month paydue the employee.
(d) All other benefits that the employer and employee may agree upon
that should be included in the computation of the employees
retirement pay.
x x x x (Emphases supplied)
The foregoing rules are, thus, clear that the whole 5 days of SIL are included
in the computation of a retiring employees pay,39 as correctly ruled by the
CA.1wphi1
Nonetheless, the Court finds that the award of legal interest at the rate of 6%
per annum on the amount ofP68,150.00 representing the retirement pay
differentials due Filipinas should be reckoned from the rendition of the LA's
Decision on March 26, 2002 and not from the filing of the illegal dismissal
complaint as ordered by the CA,40 in accordance with the ruling in Eastern
Shipping Lines, Inc. v. CA41 (Eastern Shipping). Unlike in MLQU v. NLRC,
where the retired teachers sued for the payment of the deficiency in their
Article 223 of the Labor Code provides that an appeal from a decision of the
Labor Arbiter must be made within ten calendar days from receipt of a copy
of the decision by the aggrieved party; and if the decision involves a
monetary award, an appeal by the aggrieved party may be perfected only
upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the NLRC in the amount equivalent to the
monetary award. In addition, Section 6, Rule VI of the New Rules of
Procedure of the NLRC provides that the Commission may, in justifiable
cases and upon motion of the aggrieved party, reduce the amount of the
bond. Further, the filing of the motion to reduce bond does not stop the
running of the period to perfect appeal.
Time and again, this Court has ruled that while the above-mentioned rule
treats the filing of a cash or surety bond in the amount equivalent to the
monetary award in the judgment appealed from, as a jurisdictional
requirement to perfect an appeal, the bond requirement on appeals involving
awards is sometimes given a liberal interpretation in line with the desired
objective of resolving controversies on the merits.18
The special circumstances in this case, upon which the motion to reduce the
bond was predicated, justify the relaxation of the appeal bond requirement.
However, considering that the claim for retirement benefits was made
sometime in 1999 to support the petitioners during the twilight years of their
lives, there is no doubt that a remand of the case to the NLRC will only
unduly delay the determination of their entitlement to such benefits.
Moreover, since the case calls for the resolution of a question of law, we
consider it more appropriate to resolve the appeal at this juncture, rather than
remand the case to the NLRC.
We come now to the second issue. The petitioners contend that despite their
compulsory membership in the GSIS, they are still covered by Rep. Act No.
7641 for the following reasons: (1) the respondent is registered with the
Securities and Exchange Commission as a non-stock and non-profit
corporation; hence, it is a private entity and its employees are employees in
the private sector; and (2) the petitioners are not included in the exemptions
from coverage of Rep. Act No. 7641.
Respondent PTSI counters that as an employer in the public sector, it is not
covered by Rep. Act No. 7641 which applies only to employees in the
private sector. It relies on Section 3, Rule I of the Amended Rules
Implementing Title II, Book IV of the Labor Code, to wit:
SEC. 3. Employer(a) The term shall mean any person natural or juridical,
domestic or foreign, who carries on in the Philippines any trade, business,
industry, undertaking or activity of any kind and uses the services of another
person who is under his orders as regards the employment.
(b) An employer shall belong to either:
(1) The public sector covered by the GSIS, comprising the National
Government, including government-owned or controlled corporations,
the Philippine Tuberculosis Society, the Philippine National Red
Cross, and the Philippine Veterans Bank; or
(2) The private sector covered by the SSS, comprising all employers
other than those defined in the immediately preceding paragraph.
Respondents reliance on the afore-quoted rules is unfounded. The definition
of a public sector employer as quoted above is relevant only for purposes of
coverage under the Employees Compensation and State Insurance Fund.
Instead, it is the implementing rules of Title II, Book VI of the Labor Code,
which provides for the coverage and exemptions of retirement benefits.
Thus:
SECTION 1. General Statement on Coverage. This Rule shall apply to all
employees in the private sector, regardless of their position, designation or
status and irrespective of the method by which their wages are paid, except
to those specifically exempted under Section 2 hereof. As used herein, the
term "Act" shall refer to Republic Act No. 7641 which took effect on
January 7, 1993.
SEC. 2. Exemption. This Rule shall not apply to the following employees:
2.1 Employees of the National Government and its political subdivisions,
including Government-owned and/or controlled corporations, if they are
covered by the Civil Service Law and its regulations.
...
Having determined the applicable implementing rules, we now proceed to
resolve whether the respondent is a private corporation or a public
corporation; and consequently, whether the petitioners are employees in the
private sector or in the public sector.
On this score, the case of Feliciano v. Commission on Audit,19 finds strong
relevance. Although with different factual circumstances, the Court
discussed therein the two classes of corporations recognized by the 1987
Constitution. The first refers to private corporations created under a general
law; the second refers to government-owned or controlled corporations
created by special charters. We also reiterated that under Section 14 of the
Corporation Code, "[a]ll corporations organized under this Code shall file
with the Securities and Exchange Commission articles of incorporation "
The respondent was incorporated on March 11, 1960 as a non-profit,
benevolent and non-stock corporation under the Corporation Code.20 Having
been created under the general corporation law instead of a special charter,
we hold that the respondent is a private and not a governmental corporation.
More so, Section 2(1), Article IX(B) of the 1987 Constitution provides:
SECTION 2. (1) The civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including governmentowned or controlled corporations with original charters.
Extant on the records is the respondents admission that although its
employees are compulsory members of the GSIS, said employees are not
governed by the Civil Service Law. If the respondent is truly a governmentowned or controlled corporation, and petitioners are employees in the public
sector, then, they should have been covered by said law. The truth, however,
is that, the respondent is a non-profit but private corporation organized under
the Corporation Code, and the petitioners are covered by the Labor Code and
not by the Civil Service Law.
From the foregoing, it is clear to us that the petitioners are employees in the
private sector, hence entitled to the benefits of Rep. Act No. 7641.
Even assuming that by virtue of their compulsory inclusion in the GSIS, the
petitioners became employees in the public sector, they are still entitled to
the benefits of Rep. Act No. 7641 since they are not covered by the Civil
Service Law and its regulations. This much is certain upon reading the
implementing rules of Title II, Book VI of the Labor Code as afore-cited as
well as the Labor Advisory on Retirement Pay Law.21 Under the said
advisory, the coverage of, as well as the exclusion from, Rep. Act No. 7641
has been delineated as follows:
RA 7641 or the Retirement Pay Law shall apply to all employees in the
private sector, regardless of their position, designation or status and
irrespective of the method by which their wages are paid. They shall include
part-time employees, employees of service and other job contractors and
domestic helpers or persons in the personal service of another.
The law does not cover employees of retail, service and agricultural
establishments or operations employing not more than (10) employees or
workers and employees of the National Government and its political
subdivisions, including Government-owned and/or controlled corporations,
if they are covered by the Civil Service Law and its regulations.
(Underscoring ours.)
Neither do we find merit in the respondents argument that the rationale
behind the enactment of Rep. Act No. 7641 justifies the exclusion of
employees in the public sector, who are already enjoying retirement benefits
under the GSIS law, from the New Retirement Law.
excluded from the coverage of Rep. Act No. 7641. As noted by this Court,
the respondent even filed a supersedeas bond, albeit belatedly, with its
motion for reconsideration of the NLRC resolution dismissing its appeal.
Such act only demonstrates that the respondent filed the appeal in good
faith. We could not speculate and say that respondent did not intend to pay
the petitioners their retirement benefits in case the appeal is dismissed.
On the matter of petitioner Dr. Finaflor C. Tan, records show she has two
causes of action: (1) non-payment of terminal leave pay; and (2) nonpayment of retirement benefits.23 While the Labor Arbiter ruled that she is
entitled to the commutation into cash of her unused leave credits which is
the equivalent of her terminal leave pay, the former did not include her in the
award of retirement benefits. This was properly raised in the Motion to
Render Judgment Nunc Pro Tunc24 filed by the petitioners on October 29,
1999 before the NLRC. We see no cogent reason why she should be
excluded from the over-all award of retirement benefits considering that she
has participated in the proceedings before the Labor Arbiter.
WHEREFORE, this petition is PARTIALLY GRANTED. The Decision
dated June 13, 2002 of the Court of Appeals in CA-G.R. SP No. 59597,
directing the NLRC to act on the Motion to Reduce Bond and to give due
course to the Appeal, as well as its Resolution denying the petitioners
motion for reconsideration, are MODIFIED.
Consequently, it is DECLARED that the petitioners are entitled to
retirement benefits under Rep. Act No. 7641. In addition to retirement
benefits, petitioner Dr. Finaflor C. Tan is entitled to the commutation into
cash of her unused leave credits which is the equivalent of her terminal leave
pay. Likewise, the petitioners are entitled to attorneys fees, equivalent to
10% of the total monetary award.
Let this case be remanded to the Labor Arbiter for the computation of the
retirement benefits and terminal leave pay above-mentioned. No
pronouncement as to costs.
SO ORDERED.
which she could qualify for SSS8 pension. But respondent stood pat on its
decision to retire her, citing "company policy."
On November 15, 1993, petitioner filed a complaint in the National Labor
Relations Commission (NLRC) for "termination of service with preliminary
injunction and/or restraining order."9 On November 18, 1993, respondent
compulsorily retired petitioner.
After the parties submitted their position papers, the labor arbiter rendered a
decision finding respondent guilty of illegal dismissal and ordered that
petitioner be reinstated and paid full backwages.10 On appeal, however, the
NLRC reversed the labor arbiters decision and dismissed the complaint for
lack of merit.11 The NLRC likewise denied petitioners motion for
reconsideration.12 In the assailed decision and resolution, the CA affirmed
the NLRC.
Hence, this petition.
The issues for our consideration are:
1) did respondents retirement plan imposing automatic retirement
after 35 years of service contravene the security of tenure clause in the
1987 Constitution and the Labor Code?
2) did respondent commit illegal dismissal by retiring petitioner solely
by reason of such provision in its retirement plan?
Retirement plans allowing employers to retire employees who are less than
the compulsory retirement age of 65 are not per se repugnant to the
constitutional guaranty of security of tenure. Article 287 of the Labor Code
provides:
ART. 287. Retirement - Any employee may be retired upon reaching the
retirement age established in the collective bargaining agreement or other
applicable employment contract. xxx
By its express language, the Labor Code permits employers and employees
to fix the applicable retirement age at below 60 years.13
However, after reviewing the assailed decision together with the rules and
regulations of respondents retirement plan, we find that the plan runs afoul
of the constitutional guaranty of security of tenure contained in Article XIII,
also known as the provision on Social Justice and Human Rights.
The CA, in ruling against petitioner, premised its decision to uphold the
retirement plan on her voluntary participation therein:
The petitioner in this case may, however, argue that the Pantranco case is not
applicable in the case at bar as the controversy in the said case involves a
compulsory retirement on the basis of the length of service rendered by the
employee as agreed in an existing CBA, whereas in the present case, the
private respondent compulsorily retired the petitioner not based on a CBA
but on the retirement scheme provided for in the private respondents
retirement plan. Nonetheless, this argument must fail. The contract fixing for
retirement age as allowed under Article 287 of the Labor Code does not
exclusively refer to CBA which provides for an agreed retirement age. The
said provision explicitly allows, as well, other applicable employment
contract to fix retirement age.
The records disclose that the private respondents Retirement Plan has been
in effect for more than 30 years. The said plan is deemed integrated into the
employment contract between private respondent and its employeesas
evidenced by the latters voluntary contribution through monthly salary
deductions. Previous retirees have already enjoyed the benefits of the
retirement plan, and ever since the said plan was effected, no questions or
disagreement have been raised, until the same was made to apply to the
petitioner. xxx14 (emphasis ours)
The problem with this line of reasoning is that a perusal of the rules and
regulations of the plan shows that participation therein was not voluntary at
all.
From the language of the foregoing retirement plan rules, the compulsory
nature of both membership in and contribution to the plan debunked the
CAs theory that petitioners "voluntary contributions" were evidence of her
willing participation therein. It was through no voluntary act of her own that
petitioner became a member of the plan. In fact, the only way she could have
ceased to be a member thereof was if she stopped working for respondent
altogether. Furthermore, in the rule on contributions, the repeated use of the
word "shall" ineluctably pointed to the conclusion that employees had no
choice but to contribute to the plan (even when they were on leave).
According to the assailed decision, respondents retirement plan "ha(d) been
in effect for more than 30 years."17What was not pointed out, however, was
that the retirement plan came into being in 197018 or 12 years after petitioner
started working for respondent. In short, it was not part of the terms of
employment to which petitioner agreed when she started working for
respondent. Neither did it become part of those terms shortly thereafter, as
the CA would have us believe.
Retirement is the result of a bilateral act of the parties, a voluntary
agreement between the employer and the employee whereby the latter, after
reaching a certain age agrees to sever his or her employment with the
former.19 In Pantranco North Express, Inc. v. NLRC,20 to which both the CA
and respondent refer, the imposition of a retirement age below the
compulsory age of 65 was deemed acceptable because this was part of the
CBA between the employer and the employees. The consent of the
employees, as represented by their bargaining unit, to be retired even before
the statutory retirement age of 65 was laid out clearly in black and white and
was therefore in accord with Article 287.
In this case, neither the CA nor the respondent cited any agreement,
collective or otherwise, to justify the latters imposition of the early
retirement age in its retirement plan, opting instead to harp on petitioners
alleged "voluntary" contributions to the plan, which was simply untrue. The
truth was that petitioner had no choice but to participate in the plan, given
that the only way she could refrain from doing so was to resign or lose her
SO ORDERED.2]
[Emphases supplied]
Both Lim and HMR filed their respective petitions for certiorari before the
CA, docketed as CA-G.R. SP No. 80379 and CA-G.R. SP No. 80630,
respectively, which were consolidated. Pending resolution of the petitions,
the CA issued the Temporary Restraining Order (TRO) enjoining the
execution of the NLRC decision.
On November 15, 2005, the CA affirmed the NLRC decision with
modification as follows:chanRoblesvirtualLawlibrary
WHEREFORE, the Decision of the National Labor Relations Commission is
AFFIRMED, with MODIFICATION by awarding moral damages and
exemplary damages to Conrado A. Lim in the amount of P50,000.00 and
P20,000.00, respectively, as well as attorneys fees equivalent to 10% of the
total amount due him.
SO ORDERED.3chanrobleslaw
On February 7, 2007, this Court, in G.R. No. 175950-51, dismissed the
petition for certiorari4 filed by HMR assailing the November 15, 2005 CA
decision. Entry of judgment was ordered on July 27, 2007.5cralawred
On September 24, 2007, Lim moved for execution.6 On November 28, 2007,
the Computation and Research Unit (CRU) of the NLRC computed the total
award to amount to P2,020,053.46,7 which computed the backwages from
February 3, 2001, the date of the illegal dismissal, up to October 31, 2007,
the date of actual reinstatement.
HMR opposed the computation arguing that the backwages should be
computed until April 11, 2003 only, the date of promulgation of the NLRC
decision, as stated in the dispositive portion of the NLRC decision, which
provided that backwages shall be reckoned from his dismissal on February
3, 2001up to the promulgation of this Decision. It also noted that the 10%
annual increase was computed from 1998 to 2007, instead of only from 1998
to 2000 as decreed.8cralawred
In his Comment, Lim argued that the body of the NLRC decision explictly
stated that he was entitled to full backwages from the time he was illegally
dismissed until his actual reinstatement, which was also in accord with
Article 279 of the Labor Code and all prevailing jurisprudence.9cralawred
Ruling of the LA
On April 21, 2009, the LA issued the order10 granting the motion for
execution filed by Lim. Holding that the backwages should be reckoned
until April 11, 2003 only in accordance with the NLRC decision, the LA
disposed:chanRoblesvirtualLawlibrary
Accordingly, in computing complainants backwages, the following
conditions must apply: 1) that the backwages cover the period February 3,
2001 up to April 11, 2003; 2) that the base rate applicable is his salary as of
February 3, 2001 inclusive of the ten percent adjustment due at the time, or
P12,500.00 plus ten percent (10%) or P13,750.00; 3) that the computation
should include his 13th month pay; and 4) 15 days vacation pay in
accordance with the personnel policy handbook, in lieu of 5 days service
incentive leave pay.
While complainant claims that he is entitled to 15 days sick leave pay, a
perusal of the personnel policy handbook on the grant of said benefit shows
that sick leave pay is availed of only upon notification of illness and
conversion thereof to cash is subject to the discretion of management.
Accordingly, complainants monetary award, which is the proper subject of
enforcement through a writ of execution, in accordance with the Decision of
the Commission as modified by the Court of Appeals, is computed as
follows:cralawlawlibrary
A.
Backwages:
2/3/01 to 4/11/03 =
26.26
P13,750.00 x 26.26
13th month pay
(P366,575.00/12)
Vacation Leave
(P687.50 x 15 x
26.26/12)
=
=
P361,075.00
30,089.58
22,859.37
P414,023.95
B.
C.
Moral Damages
Exemplary Damages
=
=
50,000.00
20,000.00
P484,023.95
D.
Attorneys Fees
=
48,402.39
P532,426.34
2000, as awarded in the fallo of the NLRC decision. He posits that the LA
also failed to include the payment of other benefits, such as a 10% increase
in salary per annum, 15 days vacation leave and 15 days sick leave per
annum, all as part of employee benefits found in HMRs Personnel Policy.
Petitioner Lim also argues that in accordance with the rules laid down
in Eastern Shipping Lines v. Court of Appeals,16 the monetary awards should
be subject to interest. He prays that the respondents be made to pay, jointly
and severally, additional moral and exemplary damages on account of their
bad faith in delaying the payment and reinstatement of the petitioner, which
prompted him to file the present petition.
Respondents Comment
In their Comment,17 the respondents argue that the August 28, 2009 NLRC
Resolution had already become final and executory and could no longer be
modified as the petitioner belatedly filed his motion for reconsideration. In
the same vein, they argue that the April 21, 2009 LA Order had also become
final and executory considering that the petitioners motion ad
cautelam/appeal was not seasonably filed.
The respondents insist that the decretal portion of the NLRC decision,
dated April 11, 2003 limited the amount of petitioners backwages from
February 3, 2001 and up to promulgation of such Decision on April 11, 2003
only.18 Granting that the body of such decision controls, they aver that the
recoverable backwages cannot go beyond December 26, 2007, the date
HMR offered to reinstate Lim, who refused to be reinstated and abandoned
his job. They add that it was also clear from the dispositive portion that the
10% annual salary increase awarded was only for the years 1998 to 2000.
They also point out that the P12,500.00 base pay of Lim was already
inclusive of holiday pay, and that the conversion of sick leave to cash was
subject to management discretion in accordance with company policy.
They further argue that the claims for legal interest and additional moral and
exemplary damages are without merit because these were not awarded in the
decision and they simply acted in good faith in pursuing the legal remedies
available to them.
Petitioners Reply
In his Reply,19 Lim counters that his pleadings before the NLRC and the LA
were timely filed as the notices of their respective orders had not been
received by an authorized representative. As to HMRs offer of
reinstatement, the petitioner explains that the respondent company never
responded to his reply-letter asking for a meeting to discuss the matter of his
compensation upon reinstatement. Lim also argued that holiday pay was not
shown by HMR to be included in his salary, and that it is unjust to leave the
sick leave conversion to management discretion.
Specifically, the Court has to address the following
ISSUES:
Whether the petitioners motion for reconsideration and motion ad
cautelam/appeal were belatedly filed?
Whether the computation of backwages should be reckoned until the
promulgation of the NLRC Decision on April 11, 2003 or until actual
reinstatement?
Whether the petitioner is entitled to the unpaid 10% annual salary
increase from 1998-2000?
Whether the petitioner is entitled to the 10% annual salary increase
after the year 2000?
Whether the petitioner is entitled to holiday pay?
Whether the petitioner is entitled to sick leave pay?
Whether the respondents should be held jointly and severally liable for
additional moral and exemplary damages?
Whether the interest in accordance with Eastern Shipping should be
awarded?
Ruling of The Court
The petition is partly meritorious.
Preliminarily, the Court shall first dispose of the lone procedural issue. The
respondents argue that the August 28, 2009 NLRC Resolution was already
final and executory and could no longer be modified as the petitioner
belatedly filed his motion for reconsideration thereto. In the same vein, they
aver that the April 21, 2009 LA Order was also final and executory
considering that petitioners motion ad cautelam/appeal was not seasonably
filed. The petitioner counters that his pleadings were timely filed because the
aforementioned NLRC Resolution and LA Order were not duly received by
an authorized representative.
It appears that the respondents raised this issue before the NLRC and the
CA. The lower courts, nonetheless, ruled on the merits of the assailed
pleadings of the petitioner. The lower courts, thus, gave credence to the
petitioners argument that the notices were not received by an authorized
representative. The Court sees no reason to deviate from their findings. In
any case, this issue is a question of fact which is beyond the Courts ambit of
review under Rule 45 of the Rules of Court, considering that a resolution of
the issue would require a review of the evidence presented in connection
therewith.
The Court now moves on to the substantive issues.
Backwages
It is beyond question that Lim was illegally dismissed by HMR. All that
remains to be settled is the exact amount owing to petitioner as an illegally
dismissed employee.
Article 279 of the Labor Code is clear in providing that an illegally
dismissed employee is entitled to his full backwages computed from the
time his compensation was withheld up to the time of his actual
reinstatement, to wit:chanRoblesvirtualLawlibrary
Art. 279. Security of tenure. In cases of regular employment, the employer
shall not terminate the services of an employee except for a just cause or
when authorized by this Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from
him up to the time of his actual reinstatement.
[Emphases and underscoring supplied]
In accordance with this provision, the body of the April 11, 2003 NLRC
decision expressly recognizes that Lim is entitled to his full backwages until
his actual reinstatement, as follows:chanRoblesvirtualLawlibrary
In fine, the act of complainant-appellant herein, do not constitute a serious
misconduct as to justify his dismissal. As such, he is, thus, entitled to
reinstatement to his former position as Assistant Technical Manager, unless
such position no longer exists, in which case, he shall be given a
substantially equivalent position without loss of seniority rights. He is,
likewise, entitled to his full backwages from the time he was illegally
dismissed until his actual reinstatement.20cralawred
[Emphasis and underscoring supplied]
Nowhere in the body of the NLRC decision was there a discussion
restricting the award of backwages. Nonetheless, the fallo of the said
decision limited the computation of the backwages up to its promulgation on
April 11, 2003, in this wise:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, judgment is hereby rendered declaring
the appealed Decision REVERSED and SET ASIDE; that the dismissal of
herein complainant-appellant was illegal and the respondent-appellee
Company is hereby ordered to reinstate immediately the said employee to
his former position without loss of seniority rights and other
privileges. Furthermore, the respondent-appellee Company is hereby
ordered to pay the complainant-appellant his full backwages, reckoned
from his dismissal on February 3, 2001 up to the promulgation of this
Decision.
All other claims are hereby DISMISSED for lack of merit.
The Computation and Research Unit (CRU) of this Commission is hereby
directed to compute the backwages and the 10% annual increase from 1998
to 2000.
SO ORDERED.21cralawred
1998
1999
2000
Total
Rate (P)
12,500.00
13,750.00
15,125.00
Increase
Monthly
10%
10%
10%
Increase
(P)
1,250.00
1,375.00
1,512.50
Annual
Increase
(P)
15,000.00
16,500.00
18,150.00
49,650.00
Second, based on the above, the applicable base rate for the computation of
the petitioners backwages from the time he was illegally dismissed on
February 3, 2001 should be P15,125.00.
Lim cannot, however, insist that the 10% annual salary increase be applied
to his backwages past the year 2000 up to his actual reinstatement.
In Equitable Banking Corporation v. Sadac, 41 the Court held that although
Article 279 of the Labor Code mandates that an employees full backwages
be inclusive of allowances and other benefits, salary increases cannot be
interpreted as either an allowance or a benefit, as allowances and benefits are
separate from salary, while a salary increase is added to salary as an
increment thereto.42 It was further held therein that the base figure to be used
in the computation of backwages was pegged at the wage rate at the time of
the employees dismissal, inclusive of regular allowances that the employee
had been receiving such as the emergency living allowances and the 13th
month pay mandated by law. The award of salary differentials was not
allowed, the rule being that upon reinstatement, illegally dismissed
employees were to be paid their backwages without deduction and
qualification as to any wage increases or other benefits that might have been
received by their co-workers who were not dismissed.43cralawred
It must be noted that the NLRC did not err in awarding the unpaid salary
increase for the years 1998-2000 as such did not constitute backwages as a
consequence of the petitioners illegal dismissal, but was earned and owing
to the petitioner before he was illegally terminated.
Holiday pay
The respondents insist that the base pay of Lim is already inclusive of
holiday pay. The records, however, are insufficient to determine whether
holiday pay is indeed included in the petitioners base pay.
Under Article 94 of the Labor Code, every worker shall be paid his regular
daily wage during regular holidays. Thus, an employee must receive his
daily wage even if he does not work on a regular holiday. The purpose of
holiday pay is to prevent diminution of the monthly income of workers on
account of work interruptions declared by the State.44cralawred
The rules on legal interest in Eastern Shipping have, however, been recently
modified by Nacar in accordance with Bangko Sentral ng Pilipinas
Monetary Board (BSP-MB) Circular No. 799, which became effective on
July 1, 2013. Pertinently, it amended the rate of legal interest in judgments
from 12% to 6% per annum, with the qualification that the new rate be
applied prospectively. Thus, the 12% per annum legal interest in judgments
under Eastern Shipping shall apply only until June 30, 2013, and the new
rate of 6% per annum shall be applied from July 1, 2013
onwards.50cralawred
Petitioner also prays that he be awarded interest at a rate of 6% per
annum on the amounts awarded from the time they became legally due him
until entry of judgment, presumably under the second paragraph in Eastern
Shipping (which was not modified by Nacar), which
states:chanRoblesvirtualLawlibrary
2. When an obligation, not constituting a loan or forbearance of money, is
breached, an interest on the amount of damages awarded may be
imposed at the discretion of the court at the rate of 6% per annum. No
interest, however, shall be adjudged on unliquidated claims or damages
except when or until the demand can be established with reasonable
certainty. Accordingly, where the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty
cannot be so reasonably established at the time the demand is made, the
interest shall begin to run only from the date the judgment of the court is
made (at which time the quantification of damages may be deemed to have
been reasonably ascertained). The actual base for the computation of legal
interest shall, in any case, be on the amount finally adjudged.51cralawred
[Emphasis supplied]
It is plain from the above that the interest of 6% per annum for obligations
not constituting a loan or forbearance of money is one that may be imposed
at the discretion of the court. This form of interest is not mandatory but
discretionary in nature and therefore, not necessarily owing to the petitioner
in the present case.
WHEREFORE, the petition is PARTLY GRANTED, the March 30, 2012
Decision of the Court of Appeals, in CA-G.R. SP No. 112708
is REVERSED and SET ASIDE. Respondent HMR Philippines, Inc.
- versus BANK
OF
THE
PHILIPPINE
ISLANDS,
Respondent.
x--------------------x
BANK
OF
PHILIPPINE
ISLANDS,
Petitioner,
- versus -
THE
BPI
EMPLOYEES
UNION
METRO MANILA and
ZENAIDA UY,
Promulgated:
Respondents.
September 21, 2011
x------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The base figure in computing the award of back wages to an illegally
dismissed employee is the employees basic salary plus regular allowances and
benefits received at the time of dismissal, unqualified by any wage and benefit
increases granted in the interim.[1]
No. 137863 reinstated his December 31, 1997 Decision which ordered the
payment of full back wages computed from the time of dismissal until actual
reinstatement including all benefits under the CBA. Nonetheless, the Voluntary
Arbitrator excluded the claims for uniform allowance, anniversary bonus and
Omega watch for want of basis for their grant.
The Voluntary Arbitrator thus granted the motion for issuance of writ of
execution and computed Uys back wages in the total amount of P3,897,197.89 as
follows:
Basic Monthly Salary (BMS) ..............................................P 2,062,
087.50
Cost of Living Allowance.......................................................... 56,
100.00
Financial
Assistance.................................................................... 39,000.00
Total Quarterly Bonuses ....................................................... 693,
820.00
CBA Signing Bonus................................................................... 32,
500.00
Medicine Allowance................................................................... 58,
400.00
Dental
Care .............................................................................. 14,
120.00
Medical and Doctors Allowance.................................... 58,
400.00
Tellers
Functional Allowance........................................ 25,
500.00
Vacation Leave............................................................................ 187,
085.50
Sick Leave.................................................................................... 187,
085.50
Holiday Pay.................................................................................. 128,
808.65
Attorneys Fee.............................................................................. 354,
290.72
Grand
Total....................................................................................P 3
,897,197.89[16]
Voluntary Arbitrator erroneously computed Uy's back wages based on the current
rate. The CA also deleted the award of dental allowance since it was granted in
2002 or more than six years after Uy's dismissal.
Both parties thereafter filed their respective motions for
reconsideration. Consequently, on July 4, 2007, the CA issued the herein assailed
Amended Decision.
In its Amended Decision, the CA upheld the propriety of BPIs resort
to certiorari. It also ruled that this Courts March 31, 2005 Decision in G.R. No.
137863 did not reinstate the December 31, 1997 Decision of the Voluntary
Arbitrator awarding full back wages including CBA benefits. The CA ruled that
the computation of Uys full back wages, as defined under Republic Act No. 6715,
should be based on the basic salary at the time of her dismissal plus the regular
allowances that she had been receiving likewise at the time of her dismissal. It
held that any increase in the basic salary occurring after Uys dismissal as well as
all benefits given after said dismissal should not be awarded to her in consonance
with settled jurisprudence on the matter. Accordingly, the CA pronounced that
Uys basic salary, which amounted to P10,895.00 at the time of her dismissal on
December 14, 1995, is to be used as the base figure in computing her back wages,
exclusive of any increases and/or modifications. As Uys entitlement to COLA,
quarterly bonus and financial assistance are not disputed, the CA retained their
award provided that, again, the base figure for the computation of these benefits
should be the rate then prevailing at the time of Uys dismissal.
The CA deleted the award of CBA signing bonus, medicine allowance,
medical and doctors allowance and dental care allowance for lack of sufficient
proof that these benefits were already being received and enjoyed by Uy at the
time of her dismissal. However, it held that the tellers functional allowance should
rightfully be given to Uy as a regular bank teller as well as the holiday pay and
monetary equivalent of vacation and sick leave benefits. As for the attorneys fees,
the CA ruled that Uys right over the same has already been resolved and has
attained finality when it was neither assailed nor raised as an issue after the
Voluntary Arbitrator awarded it in favor of Uy.
2.
3.
4.
From the foregoing, it is clear that Uys and the Unions contention that the
March 31, 2005 Decision of this Court in G.R. No. 137863 in effect reinstated the
December 31, 1997 Decision of the Voluntary Arbitrator awarding full back wages
including the CBA benefits, is without basis. What is clear is that the March 31,
2005 Decision modified the October 28, 1998 Decision of the CA by awarding
full back wages instead of limiting the award to a period of three years. This
interpretation is further bolstered by the Courts discussion in the main body of
March 31, 2005 Decision as to the meaning of full back wages in view of the
passage of Republic Act No. 6715[31] on March 21, 1989 which amended Article
279 of the Labor Code, as follows:
ART. 279. Security of Tenure. - In cases of regular
employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by the Title. An
employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement. (Italics supplied)
Jurisprudence dictates that such award of back wages is without
qualifications and deductions,[32] that is, unqualified by any wage increases or
other benefits that may have been received by co-workers who were not
dismissed.[33] It is likewise settled that the base figure to be used in the
computation of back wages is pegged at the wage rate at the time of the employees
dismissal unqualified by deductions, increases and/or modifications.[34]
We thus fully agree with the observation of the CA in its Amended
Decision that the back wages as discussed in the March 31, 2005 Decision in G.R.
No. 137863 did not include salary increases and CBA benefits, viz:
There is no ambiguity or omission in the dispositive portion
of the SC decision but Public Respondent erroneously concluded
that said SC decision effectively reinstated Public Respondent's
December 31, 1997 Decision. There is a need to read the findings
correctly availed of the remedy of certiorari under Rule 65 of the Rules of Court
when it assailed the December 6, 2005 order of execution of the Voluntary
Arbitrator.
A legal interest at 12% per annum
should be imposed upon the monetary
awards granted in favor of Uy
commencing from the finality of this
Courts March 31, 2005 Decision until
full satisfaction thereof.
Pursuant to our ruling in Eastern Shipping Lines, Inc. v. Court of Appeals, [39] the
legal interest of 12% per annum shall be imposed upon the monetary award
granted in favor of Uy, from the time this Courts March 31, 2005 Decision
became final and executory until full satisfaction thereof, for the delay caused.
This natural consequence of a final judgment is not defeated notwithstanding the
fact that the parties were at variance in the computation of what is due to Uy under
the judgment.[40]
The CA was properly served with a copy
of Uy's/Unions petition in compliance
with the Rules of Court.
BPI's allegation that Uy's/Unions petition in G.R. No. 178699 should be dismissed
outright for failure to furnish the lower court concerned of their petition is without
basis.Records disclose that Uy's/Unions petition was accompanied with an
affidavit of service with the corresponding registry receipt[41] showing that the CA
was duly provided with a copy of the petition.
Uy is entitled to tellers functional
allowance but not to vacation and sick
leave cash conversion.
BPI contends that at the time of Uys dismissal, she was no longer functioning as a
teller but as a low-counter staff and as such, Uy is not anymore entitled to the
2.
dismissal;
3.
4.
and
5.
Interest at 12% per annum on the total amount of the awards
commencing from the finality of the Decision in G.R. No. 137863 until full
payment thereof.
6.
The award for the monetary conversion of vacation and sick leave
is deleted.
The Voluntary Arbitrator is hereby ORDERED TO RECOMPUTE the
amounts due to Zenaida Uy in accordance with the above disposition.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 211228
[Floren
tino]
P10,70
6.95
(mo.
rate) x
5 mos.
&
21
days =
P63,75
4.82
b
)
[Nilda]
P11,28
2.28
(mo.
rate) x
5 mos.
&
21
days =
P67,18
0.83
TOTAL
BACKWAGE
S
(
2
)
130,93
5.65
Separation Pay:
[Florentino]
P10,706.95
(mo. rate) x 26
years
[Nilda]
P11,282.28 x
29 years
P278,3
80.70
P327,1
86.12
P605,5
66.82
TOTAL
ATTORNEYS FEES:
P
20,000.
00
TOTAL AWARD:
BACKWAGES
P130,9
35.65
SEPARATION PAY
P605,5
66.82
ATTORNEYS FEES
P
20,000.
00
P756,5
02.47
SO ORDERED."
[The petitioners] interposed anappeal to the NLRC, which affirmed [LA
Gambitos] Decision in a Resolution dated June 29, 2001 x x x[.]
xxxx
awarded by [LA Gambito] in the Decision dated November 6, 2000, and not
the recomputed amount ofP2,165,467.02.
In the assailed Decision dated July 21, 2008, the NLRC granted the appeal. x
xx
xxxx
[Florentino and Nilda] filed a Motion for Reconsiderationbut it was denied
by the NLRC in a Resolution dated November 11, 2008 x x x[.]
x x x x9 (Citations omitted and italics in the original)
Proceedings before the CA
The respondents filed before the CA a Petition for Certiorari10 primarily
anchored on the issue of what the proper basis was for the computation of
backwages and benefits to be paid to an employee. They claimed that the
reckoning period should be from the time of illegal dismissal on May 9,
2000 up to the finalityof the decision to be executed on July 11, 2005 as
stated in the Entry of Judgment. Further, an interest of 12% per
annumshould be imposed upon the total adjudged award.
On November 5, 2013, the CA rendered the assailed Decision, the decretal
portion of which reads:
WHEREFORE,premises considered, the Petition for Certiorari is
GRANTED. The Decision dated July 21, 2008 and Resolution dated
November 11, 2008 of the [NLRC] are REVERSEDand SET ASIDEand
[LA Flores] Order dated August 22, 2006 is REINSTATED.
[The petitioners] are ORDEREDto PAY[the respondents] the following:
1) backwages computed from May 9, 2000 (the date when [Florentino
and Nilda] were illegally dismissed from employment) up to July 11,
2005 (the date of the finality of the Supreme Courts Resolution per
Entry of Judgment);
2) separation pay computed from [Florentino and Nildas] respective
first day[s] of employment with [UPI] up to July 11, 2005 at the rate
of one month pay per year of service;
The second part is the computation of the awards made.On its face, the
computation the [LA] made shows that it was time-bound as can be seen
from the figures used in the computation. This part, being merely a
computation of what the first part of the decision established and declared,
can, by its nature, be re-computed. This is the part, too, that the petitioner
now posits should no longer be re-computed because the computation is
already in the [LAs] decision that the CA had affirmed. The public and
private respondents, on the other hand, posit that a re-computation is
necessary because the relief in an illegal dismissal decision goes all the way
up to reinstatement if reinstatement is to be made, or up to the finality of the
decision, if separation pay is to be given in lieu reinstatement.
That the [LAs] decision, at the same time that it found that an illegal
dismissal had taken place, also made a computation of the award, is
understandable in light of Section 3, Rule VIII of the then NLRC Rules of
Procedure which requires that a computation be made. This Section in part
states:
[T]he [LA] of origin, in cases involving monetary awards and at all events,
as far as practicable, shall embody in any such decision or order the detailed
and full amount awarded.
Clearly implied from this original computation is its currency up to the
finality of the [LAs] decision. As we noted above, this implication is
apparent from the terms of the computation itself, and no question would
have arisen had the parties terminated the case and implemented the decision
at that point.
xxxx
We see no error in the CA decision confirming that a re-computation is
necessary as it essentially considered the [LAs] original decision in
accordance with its basic component parts as we discussed above. To
reiterate, the first part contains the finding of illegality and its monetary
consequences; the second part is the computation of the awards or monetary
consequences of the illegal dismissal, computed as of the time of the [LAs]
original decision. To illustrate these points,had the case involved a pure
money claim for a specific sum (e.g., salary for a specific period) or a
specific benefit (e.g., 13th month pay for a specific year) made by a former
employee, the [LAs] computation would admittedly have continuing
currency because the sum is specific and any variation may only be on the
interests that may run from the finality of the decision ordering the payment
of the specific sum.
In contrast with a ruling on a specific pure money claim, is a claim that
relates to status (as in this case, where the claim is the legality of the
termination of the employment relationship). Inthis type of cases, the
decision or ruling is essentially declaratory of the status and of the rights,
obligations and monetary consequences that flow from the declared status
(in this case, the payment of separation pay and backwages and attorneys
fees when illegal dismissal is found). When this type of decision is executed,
what is primarily implemented is the declaratory finding on the status and
the rights and obligations of the parties therein; the arising monetary
consequences from the declaration only follow as component of the
partiesrights and obligations.
In the present case, the CA confirmed that indeed an illegal dismissal had
taken place, so that separation pay in lieu of reinstatement and backwages
should be paid. How much that separation pay would be, would ideally be
stated in the final CA decision; if not, the matter is for handling and
computation by the [LA] of origin as the labor official charged with the
implementation of decisions before the NLRC.
As the CA correctly pointed out, the basis for the computation of separation
pay and backwages is Article 279 of the Labor Code, as amended, which
reads:
"xxx An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his
full backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement."
xxxx
Consistent with what we discussed above, we hold that under the terms of
the decision under execution, no essential change is made bya recomputation as this step is a necessary consequence that flows from the
nature of the illegality of dismissal declared in that decision. A recomputation (or an original computation, if no previous computation has
been made) is a part of the law specifically, Article 279 of the Labor Code
and the established jurisprudence on this provision that is read into the
decision. By the nature of an illegal dismissal case, the reliefs continue to
add on until full satisfaction, as expressed under Article 279 of the Labor
Code. The re-computation of the consequences of illegal dismissal upon
execution of the decision does not constitute an alteration or amendment of
the final decision being implemented. The illegal dismissal ruling stands;
only the computation of monetary consequences of this dismissal is affected
and this is not a violation of the principle of immutability of final judgments.
xxxx
That the amount the petitioner shall now pay has greatly increased is a
consequence that it cannot avoid as it is the risk that it ran when it continued
to seek recourses against the [LAs] decision. Article 279 provides for the
consequences of illegal dismissal in no uncertain terms, qualified only by
jurisprudence in its interpretation of when separation pay in lieu of
reinstatement is allowed. When that happens, the finality of the illegal
dismissal decision becomes the reckoning point instead of the reinstatement
that the law decrees. In allowing separation pay, the final decision
effectively declares that the employment relationship ended so that
separation pay and backwages are to be computed up to that point. The
decision also becomes a judgment for money from which another
consequence flows the payment of interest in case ofdelay. This was what
the CA correctly decreed when it provided for the payment of the legal
interest of 12% from the finality of the judgment, in accordance with our
ruling in Eastern Shipping Lines, Inc. v. [CA].
x x x The strict legalism in limiting the computation of the backwages and
other benefits simply because the Decision of the [LA] provided a
computation only up to the date of the promulgation of his Decision on
November 6, 2000 cannotoverride or prejudice the substantive rights of
anillegally dismissed employee under the law and extant jurisprudence.
Likewise, pursuant to the above ruling of the Supreme Court, the monetary
award in favor of [the respondents] should earn legal interest at the rate of
12% fromJuly 11, 2005, the date of the finality of the Decision, as a
necessary consequence of [the petitioners] legal actions in questioning the
execution of the [LAs] Decision x x x.
xxxx
and not 6% should be imposed upon the award as annual interest. Ruling of
the Court
This Court affirms but modifies the ruling of the CA.
The issues, being interrelated, shall be discussed jointly.
Updating the computation of
awards to include as well
backwages and separation pay
corresponding to the period after
the rendition of LA Gambitos
decision on November 6, 2000 up to
its finality on July 11, 2005 is not
violative of the principle of
immutability of a final and
executory judgment.
This Court need not belabor the first two issues raised since they have been
amply discussed by the CA in the assailed decision and resolution.
In Session Delightsaptly quoted by the CA and reiterated in several cases
including Nacarand Gonzales v. Solid Cement Corporation,27 the Court was
emphatic that:
[N]o essential change is made by a re-computation as this step is a necessary
consequence that flows fromthe nature of the illegality of dismissal declared
in that decision. A re-computation (or an original computation, if no previous
computation has been made) is a part of the lawspecifically, Article 279 of
the Labor Code and the established jurisprudence on this provisionthat is
read into the decision. By the nature of an illegal dismissal case, the reliefs
continue to add on until full satisfaction, as expressed under Article 279 of
the Labor Code. The re- computation of the consequencesof illegal dismissal
upon execution of the decision does not constitute an alteration or
amendment of the final decision being implemented. The illegaldismissal
ruling stands; only the computation of monetary consequences of this
dismissal is affected and this is not a violation of the principle of
immutability of final judgments.
xxxx
That the amount the petitioner shall now pay has greatly increased is a
consequence that it cannot avoid asit is the risk that it ran when it continued
to seek recourses against the labor arbiters decision. Article 279 provides
for the consequences ofillegal dismissal in no uncertain terms, qualified only
by jurisprudence in its interpretation of when separation pay in lieu of
reinstatement is allowed. When that happens, the finality of the illegal
dismissal decision becomes the reckoning point instead of the reinstatement
that the law decrees. In allowing separation pay, the final decision
effectively declares that the employment relationship ended so that
separation pay and backwages are to be computed up to that point. x x
x.28 (Citation omitted and underscoring ours)
Prescinding from the above, the Court finds no reversible error committed
by the CA when it affirmed LA Flores Order dated August 22, 2006, which
allowed the updating beyond November 6, 2000 of the computation of
backwages and separation pay awarded to the respondents. The CA correctly
ruled that the backwages should be computed from May 9, 2000, the date of
illegal dismissal, up toJuly 11, 2005, the date of the Entry of Judgment,
while separation pay should be reckoned from the respective first days of
employment of Florentino and Nilda up to July 11, 2005 as well.
While the dispositive portion of the
herein assailed CA decision did not
explicitly refer to the 13th month
pay, its inclusion in the computation
approved by LA Flores is proper.
Presidential Decree No. 85129 (P.D. No. 851) is the law directing the 13th
month payment. On the other hand, Article 279 of the Labor Code in part
provides that an illegally-dismissed employee shall be entitled to full
backwages, inclusive of allowances, and other benefits ortheir monetary
equivalent computed from the time compensation was withheld up to the
time of actual reinstatement.
In Gonzales, a final and executory decision of the LA did not explicitly
award the 13th month pay. During the execution proceedings, the NLRC
included it in the computation. The CA deleted the same. This Court
thereafter ruled that the CA abused its discretion since "the 13th month pay
fell due x x x by legal mandate."30
the new rate could only be applied prospectively and not retroactively.
Consequently, the twelve percent (12%) per annumlegal interest shall apply
only until June 30, 2013. Come July 1, 2013 the new rate of six percent (6%)
per annum shall be the prevailing rate of interest when applicable.
xxxx
Nonetheless, with regard to those judgments that have become final and
executory prior to July 1, 2013, saidjudgments shall not be disturbed and
shall continue to be implemented applying the rate of interest fixed
therein.42 (Some citations omitted and underscoring ours)
In Nacar, during the execution proceedings, the LA, NLRC and the CA did
not impose a legal interestupon the total adjudged award. Thereafter, this
Court granted the petition filed before it by the dismissed employee pleading
for the imposition upon the monetary award of the legal interest, which the
Court declared to be 12% per annumfrom the date of the Entry of Judgment
on May 27, 2002 to June 30, 2013, and 6% per annum from July 1, 2013
until their full satisfaction.
Similarly, in the case of Florentino and Nilda, LA Gambitos decision
became final and executory on July11, 2005, during which time, the
prevailing rate of legal interest was 12%. Note, however, that LA Gambitos
decision and subsequently, even LA Flores Order, dated August 22, 2006,
made no explicit award of legal interest. As discussed above though, the
imposition of the legal interest is already deemed read into the decision and
order. For the same reason, the CA, in the herein assailed decision, expressly
included the said interest in the computation.
In Nacar, and in the case before this Court now, the judgments finding that
the employees were illegally dismissed became final and executory before
July 1, 2013. In both cases too, the said judgments did not explicitly include
the imposition of the legal interest upon the total adjudged award. In the case
of Florentino and Nilda, it was the CA, which first expressly included the
legal interest in the equation. In Nacar, this Court made the explicit inclusion
and pegged the rate at12% from the date of the Entry of Judgment up to June
30, 2013, and at 6% from July 1, 2013 until full satisfaction thereof. The
circumstances in the instant petition are similar to the foregoing, hence,
Nacarfinds application. Consequently, the Court imposes upon the total
adjudged award an interest of 12% interest per annum reckoned from July
11, 2005 until June30, 2013. The interest of 6% per annumis imposed from
July 1, 2013 until full satisfaction of the judgment award.
The computation of backwages and
separation pay due to Florentino
and Nilda properly includes the
period from 2002 to 2005.
The petitioners point out that Florentino and Nilda turned 60 on December
11, 2002 and April 30, 2002, respectively. Thus, backwages and separation
pay could only be computed up to those dates since under both UPIs
retirement plan and Article 287 ofthe Labor Code, 60 is the optional
retirement age. Further, on July 18, 2005, Florentino and Nilda filed separate
claims for retirement benefits, hence, effectively admitting that 60 and not
65 is the retirement age for UPIs faculty members.
Nilda and Florentino were born on April 30, 1942 and December 11, 1942,
respectively. In 2002, both had turned 60 and can opt to retire. The Court
cannot, however, agree that this isthe cut-off date for the computation of
backwages and separation pay due to them because of the reasons discussed
below.
First, 60 is merely an optional but not the mandatory retirement age. Second,
the evidence submitted do not showat whose option it is to retire the faculty
members before the age of 65. Third, there is no proof whatsoever that the
faculty members of UPI indeed retire at 60 years of age. Fourth, Florentino
and Nilda filed claims for retirement pay in 2005 when they were both 63,
hence, their acts did not necessarily constitute an admission that 60 is the
retirement age for UPIs faculty members.
In view of the above, the Court finds that no mistake was committed by LA
Flores and the CA in allowing the computation of backwages and separation
pay due to Florentino and Nilda to include the period beyond 2002.
WHEREFORE, premises considered, the Decision of the Court of Appeals
rendered on November 5, 2013,and the Resolution issued on February 7,
2014 in CA-G.R. SP No. 107230 are AFFIRMED with MODIFICATIONS.
The petitioners herein, University of Pangasinan, Inc. and its former
officials, Cesar Duque, Juan Llamas Amor and Dominador Reyes are
ORDERED TO PAY Florentino Fernandez and the Heirs of Nilda Fernandez
the following:
DECISION
QUISUMBING, J.:
Before us is a petition for review under Rule 45 assailing the Decision1 dated
August 27, 2003 of the Court of Appeals in CA-G.R. SP No. 75419 and its
Resolution dated February 23, 2004 denying reconsideration. The Court of
Appeals reversed the National Labor Relations Commission's finding of
illegal dismissal.
The pertinent facts of the case are as follows:
Petitioners Annabelle M. Tuazon and Almer R. Abing worked as branch
managers of the Wendy's food chains in MCU Caloocan and Meycauayan,
respectively, of respondent Wenphil Corporation. From September 14 to
November 8, 1998, Wendy's had a "Biggie Size It! Crew Challenge"
promotion contest. The branch with the highest sales of "Biggie Size It"
wins. The Meycauayan and MCU Caloocan branches won first and second
places, respectively. Because of its success, respondent had a second run of
the contest from April 26 to July 4, 1999. The Meycauayan branch won
again. The MCU Caloocan branch failed to make it among the winners.2
Before the start of the third round from October 18, 1999 to January 16,
2000, Abing was assigned to the SM North Edsa Annex branch while
Tuazon was assigned to the Meycauayan branch. Before the announcement
of the third round winners, management received reports that as early as the
first round of the contest, the Meycauayan, MCU Caloocan, Tandang Sora
and Fairview branches cheated. An internal investigation ensued.3
On February 3, 2000, petitioners were summoned to the main office
regarding the reported anomaly. Petitioners denied there was cheating.
Immediately thereafter, petitioners were notified, in writing, of hearings
scheduled on February 4 and 7, 2000 and of their immediate
suspension.4 Thereafter, on February 29, 2000, petitioners were dismissed.
Petitioners filed, with the Regional Arbitration Branch, a complaint for
illegal suspension and dismissal against respondent Wenphil Corporation
and its General Manager, Elizabeth P. Orbita. Petitioners insisted that they
were innocent of the accusations and were dismissed without cause. They
claimed that the real reason for their termination was their persistent
demands for overtime and holiday pay. They aver that (a) they were not
notified beforehand why they were called to the main office; (b) their right
to due process was denied; and (c) they were not afforded counsel despite
their request for one.
In their defense, respondents maintained that petitioners were terminated for
dishonesty amounting to serious misconduct and willful breach of trust.
They presented affidavits of witnesses, receipts and other documents to
support the charges against petitioners. Respondents posited that since
petitioners occupied managerial positions, loss of trust and confidence by
the employer was sufficient cause for their termination. Moreover,
respondents insisted that petitioners were afforded due process, with two
required notices, and the opportunity to defend themselves. Lastly,
respondents asserted that the preventive suspension was necessary for the
protection of the company's property and possible destruction of evidence
pending investigation.
During the hearings, the Labor Arbiter disregarded the affidavits of
respondents' witnesses for being executed only after the company
investigation and held that respondents' evidence insufficiently proved the
alleged cheating of the petitioners. The Labor Arbiter ruled in favor of the
petitioners as follows:
WHEREFORE, judgment is hereby rendered finding the suspension
and dismissal of complainants Almer R. Abing and Annabelle M.
Tuazon illegal. Respondent WENPHIL CORPORATION is hereby
ordered to:
1. immediately reinstate complainants to their former or
equivalent position, actual or in payroll at, their option, without
loss of seniority rights and benefits.
2. to pay them backwages from the time they were illegally
dismissed on 03 February 2000 until their reinstatement,
computed as of the date of this decision, as follows:
([P15,000] + 3,000 + 2,000 + 1,000) x 10 months
= P210,000.00 for each complainant.
3. to pay them ten (10%) percent attorney's fees.
SO ORDERED.7
Petitioners moved for reconsideration but the same was denied. Petitioners
now come before us assigning the following errors:
I. THE FACTUAL BASES USED BY THE COURT OF APPEALS
IN REVERSING THE RULING OF THE NLRC IS (sic)
ACTUALLY UNFOUNDED;
II. THE COURT OF APPEALS HAD DELIBERATELY
OVERLOOKED THE FACT THAT THE INTERROGATION
PROCESS CONDUCTED BY THE EMPLOYER IS VOID AB
INITIO, HENCE, CANNOT BE USED AS A SUBSTITUTE FOR
LAWFUL INVESTIGATION FOR PURPOSES OF DUE PROCESS;
III. THE COURT OF APPEALS HAD WHIMSICALLY GIVE[N]
TOO MUCH WEIGHT TO THE AFFIDAVITS WHICH ASIDE
FROM BEING SELF-SERVING, ARE NON-EXISTEN[T] AT THE
TIME THEY WERE USED AS A GROUND FOR THE DISMISSAL
OF THE PETITIONERS;
IV. IN REVERSING THE FACTUAL FINDINGS OF THE LABOR
TRIBUNALS, THE COURT OF APPEALS WENT TO THE
EXTENT OF OVER-EXPANDING ITS CERTIORARI
JURISDICTION, IN VIOLATION OF LAW AND ESTABLISHED
JURISPRUDENCE ON THE MATTER;
V. THE LABOR ARBITER, BEING THE ONE WHO ACTUALLY
CONDUCTED THE HEARING IN THE ARBITRATION STATE
AND HAD PERSONALLY OBSERVED THE DEMEANOR OF
[THE] PARTIES DURING THE HEARING, HIS FACTUAL
FINDINGS (sic) CARRY HEAVIER WEIGHT THAN THE
EVALUATION OF [THE] COURT OF APPEALS' JUSTICES WHO
MERELY RELY (sic) THEIR FINDINGS SOLELY FROM THE
RECORD OF THE CASE (sic).8
Essentially, we are asked to resolve the following issues: (1) Did the
appellate court act in excess of its jurisdiction when it reviewed factual
findings of the Labor Arbiter and NLRC? (2) Was there compliance with the
due process requirement? (3) Were petitioners illegally dismissed?
assert that the company investigation was irregular or void since they were
not allowed to seek the assistance of counsel, and that they were not present
when the testimonies of the witnesses were taken, and they were not given
the opportunity to confront the witnesses against them.
First, the law requires that the employee be given two written notices before
terminating his employment, namely: (1) a notice which apprises the
employee of the particular acts or omissions for which his dismissal is
sought; and (2) the subsequent notice which informs the employee of the
employer's decision to dismiss him.14
The records show that the petitioners were given written notices informing
them that they were charged with serious misconduct and dishonesty in
relation to the "Biggie Size It! Crew Challenge" program, and notifying
them of the scheduled hearings on February 4 and 7, 2000.15 Although
notices were given to them only on February 3, 2000, it will be noted that
there were other investigations or hearings set after February 4 and 7 where
they had the opportunity to explain their side after they were apprised of
their alleged infractions. We note likewise that petitioners, thinking that their
verbal explanations were sufficient, opted to forego a written explanation,
and did not appear during the set hearing. These actions were choices that
petitioners voluntarily made.
On record are the written notices dated February 29, 2000,16 whereby
petitioners were notified of respondents' decision to terminate them.
Petitioner Tuazon acknowledged receipt of her notice as evidenced by her
signature on the company's copy. Petitioner Abing's refusal to sign the
company's copy, despite his own copy having been tendered to him, does not
invalidate the notice of his termination.
Petitioners contend that they were not given the opportunity to confront the
witnesses against them. Petitioners must be reminded, however, that
confrontation of witnesses is required only in adversarial criminal
prosecutions, and not in company investigations for the administrative
liability of the employee.17 Additionally, actual adversarial proceedings
become necessary only for clarification, or when there is a need to propound
searching questions to witnesses who give vague testimonies. This is not an
inherent right, and in company investigations, summary proceedings may be
conducted.18
Finally, on the last issue. Petitioners contend that respondents did not
sufficiently prove the existence of a just cause for their termination, hence
they were illegally dismissed.
There is no denying that petitioners were managerial employees. They
executed management policies, they had the power to hire personnel and
assign them tasks; and discipline the employees in their branch. They
recommended actions on employees to the head office.19 Pertinent is Article
212 (m) of the Labor Code defining a managerial employee as one who is
vested with powers or prerogatives to lay down and execute management
policies and/or hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees. Consequently, as managerial employees, in the case of
petitioners, the mere existence of grounds for the loss of trust and confidence
justify their dismissal.20 Pursuant to our ruling in Caoile v. National Labor
Relations Commission,21 as long as the employer has a reasonable ground to
believe that the managerial employee concerned is responsible for the
purported misconduct, or the nature of his participation renders him
unworthy of the trust and confidence demanded by his position, the
managerial employee can be dismissed.
In the present case, the tape receipts presented by respondents showed that
there were anomalies committed in the branches managed by the petitioners.
On the principle of respondeat superior or command responsibility alone,
petitioners may be held liable for negligence in the performance of their
managerial duties, unless petitioners can positively show that they were not
involved. Their position requires a high degree of responsibility that
necessarily includes unearthing of fraudulent and irregular activities.22 Their
bare, unsubstantiated and uncorroborated denial of any participation in the
cheating does not prove their innocence nor disprove their alleged
guilt.23 Additionally, some employees declared in their affidavits24 that the
cheating was actually the idea of the petitioners.
Petitioners make much of the fact that the affidavits were executed only after
the investigation. This is of no moment. For even without the affidavits,
sufficient basis exists for respondents' loss of trust and confidence on the
petitioners as managerial officers.
WHEREFORE, the petition is DENIED. The Decision dated August 27,
2003 and Resolution dated February 23, 2004 of the Court of Appeals in
CA-G.R. SP No. 75419 are hereby AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Baguio City
SECOND DIVISION
G.R. No. 195227
In its March 13, 2008 order,15 the LA granted the petitioners motion; it
directed Metrobank-San Lorenzo to release the P1,900,000.00 garnished
amount. The LA found valid and meritorious the respondents claim for
accrued wages in view of the respondents refusal to reinstate the petitioners
despite the final and executory nature of the reinstatement aspect of its
(LAs) May 31, 2005 decision. The LA noted that as of the December 18,
2007 CA decision (that reversed the illegal dismissal findings of the LA), the
petitioners accrued wages amounted to P3,078,366.33.
In its July 16, 2008 resolution,16 the NLRC affirmed in toto the LAs March
13, 2008 order. The NLRC afterwards denied the respondents motion for
reconsideration for lack of merit.17
The respondents assailed the July 16, 2008 decision and September 29, 2009
resolution of the NLRC via a petition for certiorari filed with the CA.
The CAs ruling
The CA granted the respondents petition.18 It reversed and set aside the July
16, 2008 decision and the September 29, 2009 resolution of the NLRC and
remanded the case to the Computation and Examination Unit of the NLRC
for the proper computation of the petitioners accrued wages, computed up
to February 24, 2006.
The CA agreed that the reinstatement aspect of the LAs decision is
immediately executory even pending appeal, such that the employer is
obliged to reinstate and pay the wages of the dismissed employee during the
period of appeal until the decision (finding the employee illegally dismissed
including the reinstatement order) is reversed by a higher court. Applying
this principle, the CA noted that the petitioners accrued wages could have
been properly computed until December 18, 2007, the date of the CAs
decision finding the petitioners validly dismissed.
The CA, however, pointed out that when the LAs decision is "reversed by a
higher tribunal, an employee may be barred from collecting the accrued
wages if shown that the delay in enforcing the reinstatement pending appeal
was without fault" on the employers part. In this case, the CA declared that
the delay in the execution of the reinstatement order was not due to the
respondents unjustified act or omission. Rather, the petitioners refusal to
comply with the February 21, 2006 return-to-work Memorandum that the
respondents issued and personally delivered to them (the petitioners)
prevented the enforcement of the reinstatement order.
Thus, the CA declared that, given this peculiar circumstance (of the
petitioners failure to report for work), the petitioners accrued wages should
only be computed until February 24, 2006 when they were supposed to
report for work per the return-to-work Memorandum. Accordingly, the CA
reversed, for grave abuse of discretion, the NLRCs July 16, 2008 decision
that affirmed the LAs order to release the garnished amount.
The Petition
The petitioners argue that the CA gravely erred when it ruled, contrary to
Article 223, paragraph 3 of the Labor Code, that the computation of their
accrued wages stopped when they failed to report for work on February 24,
2006. They maintain that the February 21, 2006 Memorandum was merely
an afterthought on the respondents part to make it appear that they complied
with the LAs October 7, 2005 writ of execution. They likewise argue that
had the respondents really intended to have them report for work to comply
with the writ of execution, the respondents could and should have issued the
Memorandum immediately after the LA issued the first writ of execution. As
matters stand, the respondents issued the Memorandum more than four
months after the issuance of this writ and only after the LA issued the alias
writ of execution on February 16, 2006.
Additionally, the petitioners direct the Courts attention to the several
pleadings that the respondents filed to prevent the execution of the
reinstatement aspect of the LAs May 31, 2005 decision, i.e., the Opposition
to the Issuance of the Writ of Execution, the Motion to Quash the Writ of
Execution and the Motion to Suspend the Order of Reinstatement. They also
point out that in all these pleadings, the respondents claimed that strained
31, 2005 decision. This is a question of law that falls well within the Courts
power in a Rule 45 petition.
Resolution of this question of law, however, is inextricably linked with the
largely factual issue of whether the accrued wages should be computed until
December 17, 2008 when the CA reversed the illegal dismissal findings of
the LA or only until February 24, 2006 when the petitioners were supposed
to report for work per the February 21, 2006 Memorandum. In either case,
the determination of this factual issue presupposes another factual issue, i.e.,
whether the delay in the execution of the reinstatement order was due to the
respondents fault. As questions of fact, they are proscribed by our Rule 45
jurisdiction; we generally cannot address these factual issues except to the
extent necessary to determine whether the CA correctly found the NLRC in
grave abuse of discretion in affirming the release of the garnished amount
despite the respondents issuance of and the petitioners failure to comply
with the February 21, 2006 return-to-work Memorandum.
The jurisdictional limitations of our Rule 45 review of the CAs Rule 65
decision in labor cases, notwithstanding, we resolve this petitions factual
issues for we find legal errors in the CAs decision. Our consideration of the
facts taken within this narrow scope of our factual review power convinced
us, as our subsequent discussion will show, that no grave abuse of discretion
attended the NLRC decision.
Nature of the reinstatement aspect of the
LAs decision on a finding of illegal
dismissal
Article 223 (now Article 229)21 of the Labor Code governs appeals from, and
the execution of, the LAs decision. Pertinently, paragraph 3, Article 223 of
the Labor Code provides:
Article 223. APPEAL
xxxx
decision under Article 223 of the Labor Code, the Court concluded that to
otherwise "require the application for and issuance of a writ of execution as
prerequisites for the execution of a reinstatement award would certainly
betray and run counter to the very object and intent of Article 223, i.e., the
immediate execution of a reinstatement order."28
In short, therefore, with respect to decisions reinstating employees, the law
itself has determined a sufficiently overwhelming reason for its immediate
and automatic execution even pending appeal.29 The employer is duty-bound
to reinstate the employee, failing which, the employer is liable instead to pay
the dismissed employees salary. The Courts consistent and prevailing
treatment and interpretation of the reinstatement order as immediately
enforceable, in fact, merely underscores the right to security of tenure of
employees that the Constitution30 protects.
The employer is obliged to pay the
dismissed employees salary if he
refuses to reinstate until actual
reinstatement or reversal by a higher
tribunal; circumstances that may bar an
employee from receiving the accrued wages
As we amply discussed above, an employer is obliged to immediately
reinstate the employee upon the LAs finding of illegal dismissal; if the
employer fails, it is liable to pay the salary of the dismissed employee. Of
course, it is not always the case that the LAs finding of illegal dismissal is,
on appeal by the employer, upheld by the appellate court. After the LAs
decision is reversed by a higher tribunal, the employers duty to reinstate the
dismissed employee is effectively terminated. This means that an employer
is no longer obliged to keep the employee in the actual service or in the
payroll. The employee, in turn, is not required to return the wages that he
had received prior to the reversal of the LAs decision.31
The reversal by a higher tribunal of the LAs finding (of illegal dismissal),
notwithstanding, an employer, who, despite the LAs order of reinstatement,
did not reinstate the employee during the pendency of the appeal up to the
reversal by a higher tribunal may still be held liable for the accrued wages of
the employee, i.e., the unpaid salary accruing up to the time the higher
tribunal reverses the decision.32 The rule, therefore, is that an employee may
still recover the accrued wages up to and despite the reversal by the higher
tribunal. This entitlement of the employee to the accrued wages proceeds
from the immediate and self-executory nature of the reinstatement aspect of
the LAs decision.
By way of exception to the above rule, an employee may be barred from
collecting the accrued wages if shown that the delay in enforcing the
reinstatement pending appeal was without fault on the part of the employer.
To determine whether an employee is thus barred, two tests must be
satisfied: (1) actual delay or the fact that the order of reinstatement pending
appeal was not executed prior to its reversal; and (2) the delay must not be
due to the employers unjustified act or omission. Note that under the second
test, the delay must be without the employers fault. If the delay is due to the
employers unjustified refusal, the employer may still be required to pay the
salaries notwithstanding the reversal of the LAs decision.33
Application of the two-fold test; the
petitioners are entitled to receive their
accrued salaries until December 18, 2007
As we earlier pointed out, the core issue to be resolved is whether the
petitioners may recover the accrued wages until the CAs reversal of the
LAs decision. An affirmative answer to this question will lead us to reverse
the assailed CA decision for legal errors and reinstate the NLRCs decision
affirming the release of the garnished amount. Otherwise, we uphold the
CAs decision to be legally correct. To resolve this question, we apply the
two-fold test.
First, the existence of delay - whether there was actual delay or whether the
order of reinstatement pending appeal was not executed prior to its reversal?
We answer this test in the affirmative.
To recall, on May 31, 2005, the LA rendered the decision finding the
petitioners illegally dismissed and ordering their immediate reinstatement.
Per the records, the respondents received copy of this decision on July 8,
2005. On August 20, 2005, the petitioners filed before the LA a Motion for
Issuance of Writ of Execution for their immediate reinstatement. The LA
issued the Writ of Execution on October 7, 2005. From the time the
respondents received copy of the LAs decision, and the issuance of the writ
of execution, until the CA reversed this decision on December 17, 2008, the
respondents had not reinstated the petitioners, either by actual reinstatement
or in the payroll. This continued non-execution of the reinstatement order in
fact moved the LA to issue an alias writ of execution on February 16, 2006
and another writ of execution on April 24, 2007.
From these facts and without doubt, there was actual delay in the execution
of the reinstatement aspect of the LAs May 31, 2005 decision before it was
reversed in the CAs decision.
Second, the cause of the delay whether the delay was not due to the
employers unjustified act or omission. We answer this test in the negative;
we find that the delay in the execution of the reinstatement pending appeal
was due to the respondents unjustified acts.
In reversing, for grave abuse of discretion, the NLRCs order affirming the
release of the garnished amount, the CA relied on the fact of the issuance of
the February 21, 2006 Memorandum and of the petitioners failure to
comply with its return-to-work directive. In other words, with the issuance
of this Memorandum, the CA considered the respondents as having
sufficiently complied with their obligation to reinstate the petitioners. And,
the subsequent delay in or the non-execution of the reinstatement order was
no longer the respondents fault, but rather of the petitioners who refused to
report back to work despite the directive.
Our careful consideration of the facts and the circumstances that surrounded
the case convinced us that the delay in the reinstatement pending appeal was
due to the respondents fault. For one, the respondents filed several
pleadings to suspend the execution of the LAs reinstatement order, i.e., the
March 13, 2008 order of the Labor Arbiter in NLRC Case No. 00-04-054692004.
Costs against the respondents South East Asian Airlines and Irene Dornier.
SO ORDERED.