TOPIC: Sexual intercourse in workplace during work hours as

serious misconduct
IMASEN V. ALCON
FACTS:
Petitioner Imasen Philippine Manufacturing Corporation is a
domestic corporation engaged in the manufacture of auto seat-recliners and
slide-adjusters. It hired the respondents as manual welders in 2001.
On October 5, 2002, the respondents reported for work on the
second shift from 8:00 pm to 5:00 am of the following day. At around
12:40 am, Cyrus A. Altiche, Imasens security guard on duty, went to patrol
and inspect the production plants premises. When Altiche reached Imasens
Press Area, he heard the sound of a running industrial fan. Intending to turn
the fan off, he followed the sound that led him to the plants Tool and Die
section.
HELD:
YES. Sexual acts and intimacies between two consenting
adults belong, as a principled ideal, to the realm of purely private relations.
Whether aroused by lust or inflamed by sincere affection, sexual acts should
be carried out at such place, time and circumstance that, by the generally
accepted norms of conduct, will not offend public decency nor disturb the
generally held or accepted social morals. Under these parameters, sexual acts
between two consenting adults do not have a place in the work environment.
Indisputably, the respondents engaged in sexual intercourse inside
company premises and during work hours. These circumstances, by
themselves, are already punishable misconduct. Added to these
considerations, however, is the implication that the respondents did not only
disregard company rules but flaunted their disregard in a manner that could
reflect adversely on the status of ethics and morality in the company.

At the Tool and Die section, Altiche saw the respondents having
sexual intercourse on the floor, using a piece of carton as mattress. Altiche
immediately went back to the guard house and relayed what he saw to
Danilo S. Ogana, another security guard on duty.
Respondents defense: they claimed that they were merely sleeping
in the Tool and Die section at the time of the incident. They also claimed
that other employees were near the area, making the commission of the act
charged impossible.
Both LA and NLRC held that the dismissal was valid. CA however
nullified NLRCs decision and held that sexual intercourse inside company
premises is not serious misconduct.
ISSUE:
Whether the respondents infraction engaging in sexual
intercourse inside company premises during work hours amounts to
serious misconduct justifying their dismissal.
Additionally, the respondents engaged in sexual intercourse in an
area where co-employees or other company personnel have ready
and available access. The respondents likewise committed their act at a time
when the employees were expected to be and had, in fact, been at their
respective posts, and when they themselves were supposed to be, as all other
employees had in fact been, working.
The Court also considered the respondents misconduct to be of
grave and aggravated character so that the company was justified in
imposing the highest penalty available dismissal.
Their infraction transgressed the bounds of socially and morally
accepted human public behavior, and at the same time showed brazen
disregard for the respect that their employer expected of them as employees.
By their misconduct, the respondents, in effect, issued an open invitation for
others to commit the same infraction, with like disregard for their employers
rules, for the respect owed to their employer, and for their co-employees
sensitivities.

ALEX Q. NARANJO, DONNALYN DE GUZMAN, RONALD V. CRUZ,
ROSEMARIE P. PIMENTEL, and ROWENA B. BARDAJE,Petitioners, v.
BIOMEDICA HEALTH CARE, INC. and CARINA "KAREN" J. MOTOL,
Respondents.
VELASCO, JR., J.:
FACTS:
Petitioners Alex Naranjo (Naranjo), Ronald Allan Cruz, Rowena Bardaje,
Donnalyn De Guzman and Rosemarie Pimentel were all employees of
Biomedica Health Care, Inc. (Biomedica).
On November 7, 2006, Naranjo, et al. were all absent for various personal
reasons. The next day, Naranjo, et al. came in for work but were not allowed
to enter the premises. Carina Motol (Motol), Biomedicas president, informed
them using foul language, to just find other employment.
Subsequently, Biomedica issued notices to Naranjo, et al. accusing them of
having conducted an illegal strike and were accordingly directed to explain
within twenty-four (24) hours to explain why they should not be held guilty of
and dismissed for violating the company policy against illegal strikes under
Article XI, Category Four, Sections 6, 8, 12, 18 and 25 of the Company
Policy.Biomedica, however, failed to furnish them with the copy of the said
company policy.
Naranjo, et al. failed to submit their written explanation. Thus, Biomedica
served Notices of Termination stating that Naranjo, et al. engaged in illegal
strike. Consequently, Naranjo et al. filed a complaint for illegal dismissal. The
LA dismissed the complaint. The NLRC reversed the LA. On appeal to the
CA, the CA reinstated the decision of the LA.
ISSUE: Whether or not Naranjo, et al. were illegally dismissed?
HELD: The petition is meritorious.
LABOR LAW: illegal dismissal; mass leave; strike
Petitioners were not afforded procedural due process.Thus, the Court
elaborated in King of Kings Transport, Inc. v. Mamac that a mere general
description of the charges against an employee by the employer is
insufficient to comply with the above provisions of the law. Clearly,
petitioners were charged with conducting an illegal strike, not a mass leave,
without specifying the exact acts that the company considers as constituting
an illegal strike or violative of company policies.
Further, while Biomedica cites the provisions of the company policy which
petitioners purportedly violated, it failed to quote said provisions in the notice
so petitioners can be adequately informed of the nature of the charges
against them and intelligently file their explanation and defenses to said
accusations.
Moreover, the period of 24 hours allotted to petitioners to answer the notice
was severely insufficient and in violation of the implementing rules of the
Labor Code. Under the implementing rule of Art. 277, an employee should
be given "reasonable opportunity" to file a response to the notice. King of
Kings Transport, Inc. elucidates in this wise: " Reasonable opportunity under
the Omnibus Rules means every kind of assistance that management must
accord to the employees to enable them to prepare adequately for their
defense. This should be construed as a period of at least five (5) calendar
days from receipt of the notice to give the employees an opportunity to study
the accusation against them, consult a union official or lawyer, gather data
and evidence, and decide on the defenses they will raise against the
complaint."
In addition, Biomedica did not set the charges against petitioners for hearing
or conference in accordance with Sec. 2, Book V, Rule XIII of the
Implementing Rules and Regulations of the Labor Code and in line with
ruling in King of Kings Transport, Inc., where the Court explained: "After
serving the first notice, the employers should schedule and conduct a
hearing or conference wherein the employees will be given the opportunity
to: (1) explain and clarify their defenses to the charge against them; (2)
present evidence in support of their defenses; and (3) rebut the evidence
presented against them by the management."
Petitioners were denied substantive due process. Clearly, to justify the
dismissal of an employee on the ground of serious misconduct, the employer
must first establish that the employee is guilty of improper conduct, that the
employee violated an existing and valid company rule or regulation, or that
the employee is guilty of a wrongdoing. In the instant case, Biomedica failed
to even establish that petitioners indeed violated company rules, failing to
even present a copy of the rules and to prove that petitioners were made
aware of such regulations.

Petitioners did not stage a mass leave. The term "Mass Leave" has been left
undefined by the Labor Code. Plainly, the legislature intended that the terms
ordinary sense be used. "Mass" is defined as "participated in, attended by, or
affecting a large number of individuals; having a large-scale character."
While the term "Leave" is defined as "an authorized absence or vacation
from duty or employment usually with pay." Thus, the phrase "mass leave"
may refer to a simultaneous availment of authorized leave benefits by a
large number of employees in a company. It is undeniable that going on
leave or absenting ones self from work for personal reasons when they have
leave benefits available is an employees right. Here, the five (5) petitioners
were absent on November 7, 2006. The records are bereft of any evidence
to establish how many workers are employed in Biomedica. There is no
evidence on record that 5 employees constitute a substantial number of
employees of Biomedica.

Petitioners did not go on strike. Art. 212(o) of the Labor Code defines a strike
as "any temporary stoppage of work by the concerted action of employees
as a result of any industrial or labor dispute." "Concerted" is defined as
"mutually contrived or planned" or "performed in unison." In the case at bar,
the 5 petitioners went on leave for various reasons.Petitioners were in
different places on November 7, 2006 to attend to their personal needs or
affairs. They did not go to the company premises to petition Biomedica for
their grievance. This shows that there was NO intent to go on strike.

Dismissal is not the proper penalty. But setting aside from the nonce the
facts established above, the most pivotal argument against the dismissal of
petitioners is that the penalty of dismissal from employment cannot be
imposed even if we assume that petitioners went on an illegal strike. It has
not been shown that petitioners are officers of the Union. On this issue, the
NLRC correctly cited Gold City Integrated Port Service, Inc. v. NLRC,
wherein We ruled that: "An ordinary striking worker cannot be terminated for
mere participation in an illegal strike. There must be proof that he committed
illegal acts during a strike."

The CA is REVERSED and SET ASIDE. The NLRC is REINSTATED with

MODIFICATION.

G.R. No. 112573 February 9, 1995
Lessons Applicable: Territoriality Principle (conflicts of law)
FACTS:
Northwest Airlines (Northwest) and C.F. Sharp & Company
(C.F.), through its Japan branch, entered into an International
Passenger Sales Agency Agreement, whereby the Northwest
authorized the C.F. to sell its air transportation tickets
March 25, 1980: Unable to remit the proceeds of the ticket
sales, Northwest sued C.F. in Tokyo, Japan, for collection of the
unremitted proceeds of the ticket sales, with claim for
damages
April 11, 1980: writ of summons was issued by the 36th
Civil Department, Tokyo District Court of Japan
The attempt to serve the summons was
unsuccessful because Mr. Dinozo was in Manila and would be
back on April 24, 1980
April 24, 1980: Mr. Dinozo returned to C.F. Office to serve
the summons but he refused to receive claiming that he no
longer an employee
After the 2 attempts of service were
unsuccessful, Supreme Court of Japan sent the summons
together with the other legal documents to the Ministry of
Foreign Affairs of Japan> Japanese Embassy in
Manila>Ministry (now Department) of Foreign Affairs of the
Philippines>Executive Judge of the Court of First Instance
(now Regional Trial Court) of Manila who ordered Deputy
Sheriff Rolando Balingit>C.F. Main Office
August 28, 1980: C.F. received from Deputy Sheriff
Rolando Balingit the writ of summons but failed to appear at
the scheduled hearing.
January 29, 1981: Tokyo Court rendered judgment ordering
the C.F. to pay 83,158,195 Yen and damages for delay at the
rate of 6% per annum from August 28, 1980 up to and until
payment is completed
March 24, 1981: C.F. received from Deputy Sheriff Balingit
copy of the judgment. C.F. did not appeal so it became final
and executory
May 20, 1983: Northwest filed a suit for enforcement of the
judgment a RTC
July 16, 1983: C.F. averred that the Japanese Court sought
to be enforced is null and void and unenforceable in this
jurisdiction having been rendered without due and proper
notice and/or with collusion or fraud and/or upon a clear
mistake of law and fact. The foreign judgment in the Japanese
Court sought in this action is null and void for want of
jurisdiction over the person of the defendant considering that
this is an action in personam. The process of the Court in
Japan sent to the Philippines which is outside Japanese
jurisdiction cannot confer jurisdiction over the defendant in
the case before the Japanese Court of the case at bar
CA sustained RTC: Court agrees that if the C.F. in a foreign
court is a resident in the court of that foreign court such court
could acquire jurisdiction over the person of C.F. but it must
be served in the territorial jurisdiction of the foreign court
ISSUE: W/N the Japanese Court has jurisdiction over C.F.
HELD: YES. instant petition is partly GRANTED, and the challenged
decision is AFFIRMED insofar as it denied NORTHWEST's claims for
attorneys fees, litigation expenses, and exemplary damages
Consequently, the party attacking (C.F.) a foreign judgment
has the burden of overcoming the presumption of its validity
Accordingly, the presumption of validity and regularity of
the service of summons and the decision thereafter rendered
by the Japanese court must stand.
Applying it, the Japanese law on the matter is presumed to
be similar with the Philippine law on service of summons on a
private foreign corporation doing business in the Philippines.
Section 14, Rule 14 of the Rules of Court provides that if the
defendant is a foreign corporation doing business in the
Philippines, service may be made:
(1) on its resident agent designated in accordance
with law for that purpose, or,
(2) if there is no such resident agent, on the
government official designated by law to that effect; or
 (3) on any of its officers or agents within the
Philippines.
If the foreign corporation has designated an agent
to receive summons, the designation is exclusive, and service
of summons is without force and gives the court no
jurisdiction unless made upon him.
Where the corporation has no such agent, service
shall be made on the government official designated by law,
to wit:
(a) the Insurance Commissioner in the
case of a foreign insurance company
(b) the Superintendent of Banks, in the
case of a foreign banking corporation
(c) the Securities and Exchange
Commission, in the case of other foreign corporations duly
licensed to do business in the Philippines. Whenever service of
process is so made, the government office or official served
shall transmit by mail a copy of the summons or other legal
proccess to the corporation at its home or principal office. The
sending of such copy is a necessary part of the service.
The service on the proper government official under
Section 14, Rule 14 of the Rules of Court, in relation to Section
128 of the Corporation Code
Our laws and jurisprudence indicate a purpose to
assimilate foreign corporations, duly licensed to do business
here, to the status of domestic corporations
We think it would be entirely out of line with this policy
should we make a discrimination against a foreign corporation,
like the petitioner, and subject its property to the harsh writ of
seizure by attachment when it has complied not only with
every requirement of law made specially of foreign
corporations, but in addition with every requirement of law
made of domestic corporations
In as much as SHARP was admittedly doing business in
Japan through its four duly registered branches at the time the
collection suit against it was filed, then in the light of the
processual presumption, SHARP may be deemed a resident of
Japan, and, as such, was amenable to the jurisdiction of the
courts therein and may be deemed to have assented to the
said courts' lawful methods of serving process.
Accordingly, the extraterritorial service of summons on it
by the Japanese Court was valid not only under the processual
presumption but also because of the presumption of regularity
of performance of official duty
UNIVERSAL CANNING INC., MS. MA. LOURDES A. LOSARIA,
PERSONNEL OFFICER, AND ENGR. ROGELIO A. DESOSA,
PLANT MANAGER, Petitioners, v. COURT OF APPEALS AND
DANTE SAROSAL, FRANCISCO DUMAGAL, JR., NELSON E.
FRANCISCO, ELMER C. SAROMINES AND SAMUEL D.
CORONEL, Respondents.
DECISION
PEREZ, J.:
For resolution by the Court is this instant Petition for Review
on Certiorari1 filed by petitioners Universal Canning Inc., Ma.
Lourdes Losaria and Engr. Rogelio A. Desosa, seeking to reverse
and set aside the Decision2 dated 13 December 2013 and the
Resolution3 dated 9 September 2014 of the Court of Appeals in CA-
G.R. SP. No. 03808-MIN. The assailed decision and resolution
reversed the ruling of the National Labor Relations Commission
(NLRC) in NLRC Case No. MAC-09-011031-2009 and declared the
dismissal of respondents Dante M. Sarosal, Francisco Dumagal. Jr.,
Nelson E. Francisco, Elmer C. Saromines and Samuel D. Coronel,
as illegal.chanroblesvirtuallawlibrary
The Facts
Petitioner Universal Canning Inc. is a domestic corporation duly
authorized to engage in business by Philippine laws. Petitioners
Ma. Lourdes A. Losaria and Engr. Rogelio Desosa are respectively
employed by the company as its Personnel Officer and Plant
Manager.4
Respondents Dante M. Sarosal, Francisco Dumagal. Jr., Nelson E.
Francisco, Elmer C. Saromines and Samuel D. Coronel were
employed by petitioner Universal Canning on various capacities
with wages ranging from P240.00 to P280.00 a day.5
On 21 January 2009, respondents were caught by petitioner
company's Purchasing Officer, Falconieri Almazan, playing cards at
the company's premises during working hours. The incident was
immediately reported by Almazan to the Personnel Officer, Ma.
Lourdes Losaria, who immediately conducted an investigation to
determine the names and of those who were involved in the
gambling activities. On the same day, respondents were placed
under preventive investigation pending further investigation by a
panel indicated in a memorandum addressed to and duly received
by the individuals concerned. Under the same memorandum,
respondents were required by the petitioner to file their written
explanation of the incident. Respondents complied with the
directive.6
In their letter-explanation dated 23 January 2009, respondents
denied that they were involved in gambling activities within the
company's premises during work hours. It was argued by the
respondents that while indeed they were playing cards inside the
company premises, it cannot be considered gambling as there was
no money involved and that it took place during noon break. 7
On 9 February 2009, the investigation was conducted where
respondents were questioned regarding their participation in the
21 January 2009 activities inside the company's premises. After
the inquiry, the Investigating Officer found that respondents were
playing cards during working hours which is considered an
infraction of the company's rules and regulations. 8
On the basis of the Investigation Report, respondents were
dismissed from employment through a notice thereof dated 19
February 2016 which enumerated the grounds: (1) taking part in a
betting, gambling or any unauthorized game of chance inside the
company premises while on duty; and (2) for loss of trust and
confidence. The termination of respondents was reported by the
petitioner to the Department of Labor of Employment (DOLE) on
24 February 2009.
Aggrieved by the tum of events, respondents initiated an action for
illegal dismissal, illegal suspension, payment of separation pay,
rest day pay and moral and exemplary damages before the Labor
Arbiter. In their Position Paper, respondents argued that their
severance from employment is unlawful because of lack of
sufficient basis for their termination. They reiterated their position
in their letter-explanation that they could not be considered guilty
of gambling because there were no stakes involved and the activity
took place during authorized noon break.
For lack of merit, the Labor Arbiter dismissed the complaint in a
Decision9 dated 24 August 2009. The Labor Arbiter held that
respondents were dismissed for just cause and after compliance
with due process. The dispositive portion of the Decision
reads:chanRoblesvirtualLawlibrary
WHEREFORE, the above-entitled case is hereby dismissed for lack
of merit.
SO ORDERED.10
On appeal, the NLRC affirmed the dismissal of respondents'
complaint. It was declared by the Commission that "playing cards
during office hours whether for a stake or fun is considered a
dishonest act of stealing company time. The company's working
hours could be used for more profitable activities since they are
paid by the company." Setting aside the claim of respondents that
their length of service should be considered a mitigating
circumstance, the NLRC held that "the fact that [respondents]
have been employed by the company for a long period of time
could not work in their favor. Their attitude towards their work is
smocked (sic) with disloyalty, lack of concern and enthusiasm." 11
On Certiorari, the Court of Appeals reversed and set aside the
NLRC Decision on the ground that it was rendered with grave
abuse of discretion amounting to lack or excess in jurisdiction.
According to the appellate court, there exists no just cause to
dismiss respondents from employment. As rank and file
employees, respondents could not be dismissed for lack of trust
and confidence as they were not holding positions imbued with
trust and confidence.12 The Court of Appeals disposed in this
wise:chanRoblesvirtualLawlibrary
THE FOREGOING CONSIDERED, the instant PETITION is thus
GRANTED. The NLRC's Resolution dated December 29, 2009 and
June 29, 2010 are hereby REVERSED AND SET ASIDE, and a new
entered mandating UCI to:
1. Pay each [respondents] their respective full backwages,
inclusive of allowances and other benefits required by law
or their monetary equivalent computed from the time they
 were actually dismissed effective February 20, 2009 until
the finality of this decision; and
2. To reinstate [respondents] without loss of seniority rights
and other privileges, or if reinstatement is not possible, to
pay each of the petitioners their respective separation pay
equivalent to one month to every year of service,
computed from the date of employment up to the finality
of the decision. A fraction of at least six (6) months shall
be considered one (1) whole year. Any fraction below six
(6) months shall be paid pro rata.
SO ORDERED.
In a Resolution13 dated 9 September 2014, the Court of Appeals
refused to reconsider its earlier Decision.
Petitioners are now before this Court via this instant Petition for
Review on Certiorari assailing the Courts of Appeals' Decision and
Resolution on the ground that:chanRoblesvirtualLawlibrary
The Issue
THE COURT OF APPEALS ERRED IN REVERSING AND SETTING
ASIDE THE NLRC DECISION WHICH IN TURN, AFFIRMED THE
LABOR ARBITER'S DECISION DISMISSING RESPONDENTS'
COMPLAINT FOR ILLEGAL DISMISSAL FOR LACK OF MERIT.
The Court's Ruling
The core issue here is whether the Court of Appeals erred in
holding that there is no just cause for dismissing respondents from
employment.
The Court resolves to grant the petition.
It must be stressed at the onset that respondents were dismissed
by petitioners for two reasons: (1) for violation of company rules
and regulations under Paragraph IV, Number 4 under Offenses
Against Public Morals;14 and (2) for loss of trust and confidence.
While it is true that loss of trust and confidence alone could not
stand as a ground for dismissal in this case since respondents are
rank and file employees who are not occupying positions of trust
and confidence, such is not the only ground, relied by the company
in terminating respondents' employment. Petitioner company also
cited the infraction of company rules and regulations, in addition to
loss and trust of confidence. Infraction of the company rules and
regulation which is akin to serious misconduct is a just cause for
termination of employment recognized under Article 282 (a) of the
Labor Code which states that:chanRoblesvirtualLawlibrary
ARTICLE 282. Termination by employer. An employer may
terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of
the lawful orders of his employer or representative in
connection with his work;
Misconduct is defined as an improper or wrong conduct. It is a
transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error in judgment. To constitute a
valid cause for the dismissal within the text and meaning of Article
282 of the Labor Code, the employee's misconduct must be
serious, i.e., of such grave and aggravated character and not
merely trivial or unimportant. Additionally, the misconduct must be
related to the performance of the employee's duties showing him
to be unfit to continue working for the employer. Further, and
equally important and required, the act or conduct must have been
performed with wrongful intent.15
Here, there is no question that respondents were caught in the act
of engaging in gambling activities inside the workplace during work
hours, a fact duly established during the investigation conducted
by the petitioner company and adopted by the labor tribunals
below. As a matter of fact, respondents never controverted their
participation in the gambling activities, but instead raised the
defense that it took place during noon break and that no stakes
were involved; these claims even if were proven true, will however
not save the day for the respondents. The use of the company's
time and premises for gambling activities is a grave offense which
warrants the penalty of dismissal for it amounts to theft of the
company's time and it is explicitly prohibited by the company rules
on the ground that it is against public morals.
Suffice it to state that an employee may be validly dismissed for
violation of a reasonable company rule or regulation adopted for
the conduct of the company's business. It is the recognized
prerogative of the employer to transfer and reassign employees
according to the requirements of its business. For indeed,
regulation of manpower by the company clearly falls within the
ambit of management prerogative. A valid exercise of
management prerogative is one which, among others, covers:
work assignment, working methods, time, supervision of workers,
transfer of employees, work supervision, and the discipline,
dismissal and recall of workers. Except as provided for, or limited
by special laws, an employer is free to regulate, according to his
own discretion and judgment, all aspects of employment. 16 As a
general proposition, an employer has free reign over every aspect
of its business, including the dismissal of his employees as long as
the exercise of its management prerogative is done reasonably, in
good faith, and in a manner not otherwise intended to defeat or
circumvent the rights of workers.17
Both the Labor Arbiter and the NLRC uniformly ruled that the
complaint for illegal dismissal filed by the respondents utterly lacks
merit and, thus, upheld the petitioners' position that there exists a
valid ground for dismissing the respondents. The NLRC even went
further by saying that respondents' length of service should not
mitigate the consequence of their acts as they owe the company
loyalty and concern. Considering that there is substantial evidence
at hand to support the ruling of the labor tribunals, the Court
hereby adopts their findings.
It is settled that this Court is not a trier of facts, and this applies
with greater force in labor cases.18Factual findings of administrative
or quasi-judicial bodies, including labor tribunals, are accorded
much respect by this Court as they are specialized to rule on
matters falling within their jurisdiction especially when these are
supported by substantial evidence.19
WHEREFORE, premises considered, the petition is GRANTED.
The assailed Resolutions of the Court of Appeals are
hereby REVERSED AND SET ASIDE.
STELLAR INDUSTRIAL SERVICES, INC., petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION and ROBERTO H.
PEPITO, respondents.
DECISION
REGALADO, J.:
Imputing grave abuse of discretion by public respondent as its cause of
concern in this special civil action for certiorari, petitioner Stellar Industrial
Services, Inc. (Stellar) seeks the annulment of the decision, 1 dated May 31,
1994, of the National Labor Relations Commission in NLRC NCR CA No.
004326-93 and its resolution of July 21, 1994 denying petitioners motion for
reconsideration. Interestingly, this recourse is the culmination of petitioners
sustained corporate and legal efforts directed against a mere janitor who
was formerly employed by it.
Stellar Industrial Services, Inc., an independent contractor engaged in
the business of providing manpower services, employed private respondent
Roberto H. Pepito as a janitor on January 27, 1975 and assigned the latter
to work as such at the Maintenance Base Complex of the Philippine Airlines
(MBC-PAL) in Pasay City. There, Pepito toiled for a decade and a half.
According to petitioner, private respondents years of service at MBC-PAL
were marred by various infractions of company rules ranging from tardiness
to gambling, but he was nevertheless retained as a janitor out of
humanitarian consideration and to afford him an opportunity to reform.2
Stellar finally terminated private respondents services on January 22,
1991 because of what it termed as Pepitos being Absent Without Official
Leave (AWOL)/Virtual Abandonment of Work -Absent from November 2
- December 10, 1990. Private respondent had insisted in a letter to petitioner
dated December 2, 1990, to which was attached what purported to be a
medical certificate, that during the period in question he was unable to report
for work due to severe stomach pain and that, as he could hardly walk by
reason thereof, he failed to file the corresponding official leave of absence.3
As petitioner disbelieved private respondents explanation regarding his
absences, the latter contested his severance from employment before the
Arbitration Branch of the National Labor Relations Commission (NLRC)
in Manila in a complaint docketed as NLRC NCR-00-03-01869-91 for illegal
dismissal, illegal deduction and underpayment of wages under Wage Order
NCR-001, with prayer for moral and exemplary damages and attorneys fees.
While the labor arbiter was of the view that Pepito was not entitled to
differential pay under said wage Order, or to moral and exemplary damages
for lack of bad faith on the part of petitioner, he opined that private
respondent had duly proved that his 39-day absence was justified on
account of illness and that he was illegally dismissed without just cause.4
Thus the decision rendered on December 28, 1992 by Labor Arbiter
Manuel R. Caday decreed:
WHEREFORE, judgment is hereby rendered declaring the dismissal of the
complainant as illegal and ordering the respondent to immediately reinstate
complainant to his former position as Utilityman, without loss of seniority rights and
with full backwages and other rights and privileges appurtenant to his position until
he is actually reinstated. As computed, the judgment award in favor of the
complainant is stated hereunder:
Backwages
1/27/91 - 12/27/92
at P118. 00 per day P82,550.83
Refund of amount
illegally deducted
(3 years) 288.00
Grand Total P82,838.83
The respondent is further ordered to pay the complainant reasonable
attorneys fees equivalent to 10% of the amount recoverable by the
complainant.5
As hereinbefore stated, said judgment of the labor arbiter was affirmed
by respondent commission. Petitioners subsequent motion for
reconsideration was likewise rebuffed by the NLRC, hence the present
remedial resort to this Court.
Petitioner contends that public respondent acted with grave abuse of
discretion when it discussed and resolved the issue of abandonment which
petitioner had not, at any time, raised before it for resolution. Further,
petitioner considers it patently erroneous for public respondent to rule that
the medical certificate adduced by Pepito sufficiently established the fact of
sickness on his part which thereby justified his absences. Additionally, it
claims that respondent commission gravely erred when it did not carefully
examine the evidence, pointing out Pepitos errant behavior and conduct.6
Petitioner argues, moreover, that the award of back wages and
attorneys fees was not justified considering that Pepito was validly dismissed
due to serious misconduct on his part. Lastly, petitioner insists that the
deductions it imposed upon and collected from Pepitos salary was
authorized by a board resolution of Stellar Employees Association, of which
private respondent was a member.7 The Court, however, is unable to
perceive or deduce facts constitutive of grave abuse of discretion in public
respondents disposition of the controversy which would suffice to overturn its
affirmance of the labor arbiters decision.
On the initial issue posed by petitioner, respondent commission should
indeed have refrained from passing upon the matter of abandonment,
much less from considering the same as the ground for petitioners
termination of private respondents services. The records of the case indicate
that Pepito s employment was cut short by Stellar due to his having violated
a company rule which requires the filing of an official leave of absence
should an employee be unable to report for work, aside from the
circumstance that Stellar did not find credible Pepitos explanation that he
was then suffering from severe stomach and abdominal pains.
To be sure, public respondent may well have been misled by the fact
that petitioner, in dismissing Pepito, labelled his violation as Absent Without
Official Leave (AWOL)/Virtual Abandonment.8 Respondent NLRC should
have noted that the matter of abandonment was never brought up as an
issue before it and that Stellar never considered Pepito as having
abandoned his job. As a matter of fact, private respondent was only
considered by petitioner as absent until December 10, 1990.9 Pepito was
dismissed from work simply for going on leave without prior official approval
and for failing to justify his absence. This is evident from the fact that
petitioner did not assail Pepitos allegations that, at the start of his extended
absence, he had informed Stellar, through telephone calls to his superior at
MBC-PAL, that he could not report for work due to illness. Thus, while
abandonment is indisputably a valid legal ground for terminating ones
employment,10 it was a non-issue in this dispute. Be that as it may, that
misapprehension of the NLRC on this particular issue is not to be considered
an abuse of discretion of such gravity as to constitute reversible error.
In the main, therefore, what is truly at issue here is whether or not
serious misconduct for non-observance of company rules and regulations
may be attributed to Pepito and, if so, whether or not the extreme penalty of
dismissal meted to him by Stellar may be justified under the circumstances.
We resolve both issues in the negative.
Stellars company rules and regulations on the matter could not be any
clearer, to wit:
Absence Without Leave
Any employee who fails to report for work without any prior approval from his
superior(s) shall be considered absent without leave.
In the case of an illness or emergency for an absence of not more than one (1) day, a
telephone call or written note to the head office, during working hours, on the day of
his absence, shall be sufficient to avoid being penalized.
In the case of an illness or an emergency for an absence of two (2) days or more, a
telephone call to the head office, during regular working hours, on the first day of
his absence, or a written note to the head office, (ex. telegram) within the first three
(3) days of his absence, and the submission of the proper documents (ex. medical
certificate) on the first day he reports after his absence shall be sufficient to avoid
being penalized.
1st offense - three (3) days suspension
2nd offense - seven (7) days suspension
3rd offense - fifteen (15) days suspension
4th offense - dismissal (with a period of one (1) year.11
There was substantial compliance with said company rule by private
respondent. He immediately informed his supervisor at MBC-PAL of the fact
that he could not report for work by reason of illness. At the hearing, it was
also established without contradiction that Pepito was able to talk by
telephone to one Tirso Pamplona, foreman at MBC-PAL, and he informed
the latter that he would be out for two weeks as he was not feeling
well.12 Added to this is his letter to the chief of personnel which states that,
on November 2, 1990, he relayed to his supervisor at MBC-PAL his reason
for not reporting for work and that, thereafter, he made follow-up calls to their
office when he still could not render services.13 As earlier noted, these facts
were never questioned nor rebutted by petitioner.
While there is no record to show that approval was obtained by Pepito
with regard to his absences, the fact remains that he complied with the
company rule that in case of illness necessitating absence of two days or
more, the office should be informed beforehand about the same, that is, on
the first day of absence. Since the cause of his absence could not have
been anticipated, to require prior approval would be unreasonable. On this
score, then, no serious misconduct may be imputed to Pepito. Necessarily,
his dismissal from work, tainted as it is by lack of just cause, was clearly
illegal.
More importantly, private respondent duly presented the requisite
medical certificate. True, Stellar did not accept the veracity of the same, but
it did so quite erroneously. Carlos P. Callanga, petitioners vice-president for
operations, interpreted the certificate submitted by Pepito in the following
strained and nitpicking manner:
a) The medical certificate merely states that Pepito suffered from alleged abdominal
pain from November 2, 1990 to December 14, 1990. It does not state that the
abdominal pain was so severe as to incapacitate him for (sic) work.
b) Because the medical certificate states that the abdominal pain was merely alleged,
I had reason to believe that the doctor who issued it did not personally know if such
abdominal pain really existed for the period in question.
c) From the medical certificate, I gathered that the doctor who signed it examined
Pepito only on December 14, 1990, which is the date it appears to have been issued.
It does not state that said doctor actually treated Pepito for the period of his absence.
d) The medical certificate also says Pepito was suffering from alleged abdominal
pains until December 14, 1990, but that he could resume work anytime thereafter.
This implies that he was physically fit to resume work anytime thereafter. However,
our records show that Pepito was absent only until December 10, 1990. If it is true
that Pepitos abdominal pains incapacitated him for (sic) work, he should have been
absent until December 14, 1990. These give me reason to believe that the medical
certificate was secured only as an afterthought and does not satisfactorily explain
Pepito s protracted absence.14
A careful perusal and objective appreciation of the medical certificate in
question, which was properly signed by a physician whose existence and
professional license number was not questioned by petitioner, convince us to
conclude otherwise. Handwritten by the issuing doctor, it states in no
uncertain terms:
This is to inform that I had examined Roberto Pepito. He has already recovered from
his intestinal abdominal pains suffered last Nov. 2/90 to Dec. 14/90.
He may resume his work anytime.15
Thus, nowhere in said certificate is there any indication that the
abdominal pain suffered by Pepito was only as alleged by him. It definitely
states that Pepito was personally examined by the physician and it can be
clearly deduced from the affirmative statements (h)e has already recovered
x x x and (h)e may resume his work anytime that Pepito was really not in a
position to report for work from November 2 to December 14, 1990 on
account of actual, and not merely alleged, intestinal abdominal pains. The
certificate further confirms Pepitos earlier information given by him
on November 2, 1990 and which he duly relayed to his supervisor as the
true reason for his inability to work. Callanga obviously misread, we hope
unwittingly, intestinal abdominal pain as alleged abdominal pain.
Again, there is no logic in Callangas assumption that the certificate was
obtained only as an afterthought. It should be noted that Callanga required
Pepito to make a written explanation regarding his absences only
on December 18, 1990.16 Pepito accordingly complied with the same and he
attached therewith the medical certificate which showed its date of issuance
as December 14, 1990.17 Thus, even before he was made to explain his
absences, he already had the medical certificate to prove the reason
therefor. To characterize the procurement of the certificate as an afterthought
is consequently baseless, especially considering that it bears all the
earmarks of regularity in its issuance. Labor is entitled to at least elementary
fairness from management.
Petitioners reliance on Pepitos past infractions as sufficient grounds for
his eventual dismissal, in addition to his prolonged absences, is likewise
unavailing. The correct rule is that previous infractions may be used as
justification for an employees dismissal from work in connection with a
subsequent similar offense.18 That is not the case here. Stellar contends that
Pepitos service record shows that he was under preventive suspension in
October, 1979 due to gambling and that, at various days of certain months in
1986, 1987, and 1988, he was issued several warnings for habitual
tardiness. Then, in October, 1988, he was asked to explain why he was
carrying three sacks of rice in violation of company rules.
In the present case, private respondents absences, as already
discussed, were incurred with due notice and compliance with company
rules and he had not thereby committed a similar offense as those he had
committed in the past. Furthermore, as correctly observed by the labor
arbiter, those past infractions had either been satisfactorily explained, not
proven, sufficiently penalized or condoned by the respondent. In fact, the
termination notice furnished Pepito only indicated that he was being
dismissed due to his absences from November 2, 1990 to December 10,
1990 supposedly without any acceptable excuse therefor. There was no
allusion therein that his dismissal was due to his supposed unexplained
absences on top of his past infractions of company rules. To refer to those
earlier violations as added grounds for dismissing him is doubly unfair to
private respondent. Significantly enough, no document or any other piece of
evidence was adduced by petitioner showing previous absences of Pepito,
whether with or without official leave.
Regarding the amount deducted from Pepitos salary, Stellar stresses
that said deduction concerning death aid benefits is lawful since these were
made in accordance with Board Resolution No. 02-85 adopted on August
17, 1988 by the board of directors of the Stellar Employees Association.
However, Article 24 1(n) of the Labor Code and the implementing rules
thereon in Section 13(a), Rule VIII, Book III disallow such deductions. Article
241(n) states that (n)o special assessment or other extraordinary fees may
be levied upon the members of a labor organization unless authorized by a
written resolution of a majority of all the members of a general membership
meeting duly called for the purpose. x x x.
The deduction could be characterized as a special assessment for a
Death Aid Program. Consequently, a mere board resolution of the directors,
and not by the majority of all the members, cannot validly allow such
deduction. Also, a written individual authorization duly signed by the
employee concerned is a condition sine qua non therefor. Employees are
protected. by law from unwarranted practices that have for their object the
diminution of the hard-earned compensation due them. 19 Private respondent
herein must be extended that protection, especially in view of his lowly
employment status.
IN VIEW OF THE FOREGOING, no grave abuse of discretion having
been committed by respondent National Labor Relations Commission in its
decision and resolution assailed in the case at bar, the instant petition of
Stellar Industrial Services, Inc. is hereby DISMISSED for lack of merit.
SO ORDERED.
HOCHENG PHILIPPINES
CORPORATION, Petitioner, v. ANTONIO M.
FARRALES, Respondent.
DECISION
REYES, J.:
Before this Court on Petition for Review on Certiorari1 is the
Decision2 dated October 17, 2013 of the Court of Appeals (CA) in
CA-G.R. SP No. 125103, which reversed the Decision3 dated
February 29, 2012 and Resolution4 dated May 7, 2012 of the
National Labor Relations Commission (NLRC) in NLRC LAC No. 08-
002249-11, and reinstated with modifications the Decision 5 dated
April 29, 2011 of the Labor Arbiter (LA) in NLRC Case No. RAB-IV-
03-00618-10-C, which found that respondent Antonio M. Farrales
(Farrales) was illegally dismissed by Hocheng Philippines
Corporation (HPC). The fallo of the appellate decision
reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the Decision of the Labor
Arbiter dated April 29, 2011 in NLRC Case No. RAB-IV-03-00618-
10-C is reinstated with modifications. Private respondent
Hocheng Philippines Corporation is liable to pay [Farrales] the
following:chanRoblesvirtualLawlibrary
(1) Full backwages from date of dismissal on February 15, 2010
until date of decision equivalent to P276,466.67;
(2) Separation pay of one (1) month salary per year of service for
a period of twelve years equivalent to P228,800.00;
(3) Appraisal year-end bonus in the sum of P11,000.00; and,
(4) Attorneys fees equivalent to 10% of the total award.
SO ORDERED.6
The Facts
Farrales was first employed by HPC on May 12, 1998 as Production
Operator, followed by promotions as (1) Leadman in 2004, (2)
Acting Assistant Unit Chief in 2007, and (3) Assistant Unit Chief of
Production in 2008, a supervisory position with a monthly salary of
?17,600.00. He was a consistent recipient of citations for
outstanding performance, as well as appraisal and year-end
bonuses.7chanroblesvirtuallawlibrary
On December 2, 2009, a report reached HPC management that a
motorcycle helmet of an employee, Reymar Solas (Reymar), was
stolen at the parking lot within its premises on November 27,
2009. On December 3, 2009, Security Officer Francisco Paragas III
confirmed a video sequence recorded on closed-circuit television
(CCTV) around 3:00 p.m. on November 27, 2009 showing Farrales
taking the missing helmet from a parked motorcycle, to
wit:chanRoblesvirtualLawlibrary
a. At around 3:07:44, [Farrales] was seen walking towards
the motorcycle parking lot;chanrobleslaw
b. At around 3:08:47, [Farrales] walked back towards the
pedestrian gate of the company, passing by the motorcycle
parking lot;chanrobleslaw
c. At around 3:08:51, [Farrales] walked back towards the
motorcycle parking lot and returned to the pedestrian
gate;chanrobleslaw
d. At around 3:09:10, [Farrales] called on the person of Andy
Lopega and instructed him to get the helmet he was
pointing at; [and]
e. At around 3:09:30, Andy gave the helmet to [Farrales]. 8
Later that day, HPC sent Farrales a notice to explain his
involvement in the alleged theft. The investigation was supported
by the employees union, ULO-Hocheng.9Below is Farrales
explanation, as summarized by the CA:chanRoblesvirtualLawlibrary
On November 27, 2009, [Farrales] borrowed a helmet from his co-
worker Eric Libutan (Eric) since they reside in the
same barangay. They agreed that Eric could get it at the house of
[Farrales] or the latter could return it the next time that they will
see each other. Eric told him that his motorcycle was black in color.
As there were many motorcycles with helmets, he asked another
employee, Andy Lopega (Andy) who was in the parking area
where he could find Erics helmet. Andy handed over to him the
supposed helmet which he believed to be owned by Eric, then he
went home.
On November 28, 2009, at around 6 oclock in the morning, he
saw Eric at their barangay and told him to get the helmet. But Eric
was in a rush to go to work, he did not bother to get it.
In the morning of December 3, 2009, upon seeing Eric in the
workplace, [Farrales] asked him why he did not get the helmet
from his house. Eric told him that, Hindi po sa akin yung nakuha
nyong helmet. [Farrales] was shocked and he immediately phoned
the HPCs guard to report the situation that he mistook the helmet
which he thought belonged to Eric. After several employees were
asked as to the ownership of the helmet, he finally found the
owner thereof, which is Jun Reyess (Jun) nephew, Reymar, who
was with him on November 27, 2009. [Farrales] promptly
apologized to Jun and undertook to return the helmet the following
day and explained that it was an honest mistake. These all
happened in the morning of December 3, 2009; [Farrales] did not
know yet that HPC will send a letter demanding him to explain. 10
A hearing was held on December 10, 2009 at 1:00 p.m. Present
were Farrales, Eric Libutan (Eric), Andy Lopega (Andy), Jun Reyes,
Antonio Alinda, a witness, and Rolando Garciso, representing ULO-
Hocheng. From Andy it was learned that at the time of the alleged
incident, he was already seated on his motorcycle and about to
leave the company compound when Farrales approached and
asked him to hand to him a yellow helmet hanging from a
motorcycle parked next to him. When Andy hesitated, Farrales
explained that he owned it, and so Andy complied. But Eric had
specifically told Farrales that his helmet was colored red and black
and his motorcycle was a black Honda XRM-125 with plate number
8746-DI, parked near the perimeter fence away from the walkway
to the pedestrian gate. The CCTV showed Farrales instructing Andy
to fetch a yellow helmet from a blue Rossi 110 motorcycle with
plate number 3653-DN parked in the middle of the parking lot,
opposite the location given by Eric. Farrales in his defense claimed
he could no longer remember the details of what transpired that
time, nor could he explain why he missed Erics specific
directions.11chanroblesvirtuallawlibrary
On February 15, 2010, the HPC issued a Notice of Termination 12 to
Farrales dismissing him for violation of Article 69, Class A, Item
No. 29 of the HPC Code of Discipline, which provides that stealing
from the company, its employees and officials, or from its
contractors, visitors or clients, is akin to serious misconduct
and fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized
representative, which are just causes for termination of
employment under Article 282 of the Labor Code.
On March 25, 2010, Farrales filed a complaint for illegal dismissal,
non-payment of appraisal and mid-year bonuses, service incentive
leave pay and 13th month pay. He also prayed for reinstatement,
or in lieu thereof, separation pay with full backwages, plus moral
and exemplary damages and attorneys fees. During the
mandatory conference, HPC paid Farrales ?10,914.51, representing
his 13th month pay for the period of January to February 2010 and
vacation leave/sick leave conversion. Farrales agreed to waive his
claim for incentive bonus.13chanroblesvirtuallawlibrary
On April 29, 2011, the LA ruled in favor of Farrales,14 the fallo of
which is as follows:chanRoblesvirtualLawlibrary
WHEREFORE, PREMISES CONSIDERED, all the respondents
Hocheng Phils. Corporation, Inc. Sam Chen[g] and Judy Geregale
are found guilty of illegal dismissal and ordered jointly and
severally to pay complainant the
following:chanRoblesvirtualLawlibrary
1. Full backwages from date of dismissal on February 15, 2010
until date of decision equivalent to P276,466.67.
2. Separation pay of one (1) month salary per year of service for
a period of twelve years equivalent to P228,800.00.
3. Appraisal year-end bonus in the sum of P11,000.00.
4. Moral damages in the sum of P200,000.00.
5. Exemplary damages in the sum of P100,000.00.
6. 10% of all sums owing as attorneys fees or the amount of
P81,626.67.
SO ORDERED.15
On appeal by HPC,16 the NLRC reversed the LA,17 and denied
Farrales motion for reconsideration, finding substantial evidence of
just cause to terminate Farrales.18chanroblesvirtuallawlibrary
On petition for certiorari to the CA,19 Farrales sought to refute the
NLRCs factual finding that he committed theft, as well as to
question NLRCs jurisdiction over HPCs appeal for non-payment of
appeal fees. But the CA found that HPC was able to perfect its
appeal by posting a bond equivalent to the monetary award of ?
897,893.37 and paying the appeal fees by postal money order in
the amount of ?520.00.20chanroblesvirtuallawlibrary
Concerning the substantive issues, the appellate court agreed with
the LA that Farrales act of taking Reymars helmet did not amount
to theft, holding that HPC failed to prove that Farrales conduct was
induced by a perverse and wrongful intent to gain, in light of the
admission of Eric that he did let Farrales borrow one of his two
helmets, only that Farrales mistook Reymars helmet as the one
belonging to him.
Petition for Review to the Supreme Court
In this petition, HPC raises the following grounds for this Courts
review:chanRoblesvirtualLawlibrary
A. THE HONORABLE [CA] PLAINLY ERRED AND ACTED
CONTRARY TO EXISTING LAW AND JURISPRUDENCE IN
REVERSING THE DECISION OF THE [NLRC] AND
DECLARING ILLEGAL THE DISMISSAL FOR [HPCs]
ALLEGED FAILURE TO PROVE THE EXISTENCE OF JUST
CAUSE.
1. THERE IS SUBSTANTIAL EVIDENCE TO SHOW
THAT [FARRALES] COMMITTED THEFT IN [HPCs]
PREMISES.
2. THEFT IS A JUST CAUSE FOR TERMINATION.
3. BY COMMITTING THEFT, [FARRALES], BEING A
SUPERVISORIAL EMPLOYEE, FORFEITED THE
TRUST REPOSED IN HIM BY [HPC], THUS
RENDERING HIM DISMISSIBLE FOR LOSS OF
CONFIDENCE.

B. IN DECLARING ILLEGAL THE DISMISSAL OF [FARRALES],
THE HONORABLE [CA] VIOLATED DOCTRINES LAID DOWN
BY THE SUPREME COURT.
1. COURTS CANNOT SUBSTITUTE THEIR
JUDGMENT FOR THAT OF THE MANAGEMENT.
2. COURTS MUST ACCORD DUE RESPECT TO THE
FINDINGS OF ADMINISTRATIVE AGENCIES.21
Chiefly, HPC insists that since the complaint below involves an
administrative case, only substantial evidence, not proof of guilt
beyond reasonable doubt, is required to prove the guilt of
Farrales;22 that what the CA has done is substitute its judgment for
that of the NLRC, which is vested with statutory duty to make
factual determinations based on the evidence on
record.23chanroblesvirtuallawlibrary
Ruling of the Court
The Court resolves to deny the petition.
To validly dismiss an employee, the law requires the employer to
prove the existence of any of the valid or authorized
causes,24 which, as enumerated in Article 282 of the Labor Code,
are: (a) serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or the latters
representative in connection with his work; (b) gross and habitual
neglect by the employee of his duties; (c) fraud or willful breach by
the employee of the trust reposed in him by his employer or his
duly authorized representative; (d) commission of a crime or
offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized
representative; and (e) other causes analogous to the
foregoing.25 As a supervisorial employee, Farrales is admittedly
subject to stricter rules of trust and confidence, and thus pursuant
to its management prerogative HPC enjoys a wider latitude of
discretion to assess his continuing trustworthiness, than if he were
an ordinary rank-and-file employee.26 HPC therefore insists that
only substantial proof of Farrales guilt for theft is needed to
establish the just causes to dismiss him, as the NLRC lengthily
asserted in its decision.
Article 4 of the Labor Code mandates that all doubts in the
implementation and interpretation of the provisions thereof shall
be resolved in favor of labor. Consistent with the States avowed
policy to afford protection to labor, as Article 3 of the Labor Code
and Section 3, Article XIII of the 1987 Constitution have
enunciated, particularly in relation to the workers security of
tenure, the Court held that [t]o be lawful, the cause for
termination must be a serious and grave malfeasance to justify the
deprivation of a means of livelihood. This is merely in keeping with
the spirit of our Constitution and laws which lean over backwards
in favor of the working class, and mandate that every doubt must
be resolved in their favor.27 Moreover, the penalty imposed on the
erring employee ought to be proportionate to the offense, taking
into account its nature and surrounding circumstances.
The Court has always taken care, therefore, that the employer
does not invoke any baseless justification, much less management
prerogative, as a subterfuge by which to rid himself of an
undesirable worker,28 and thus in exceptional cases the Court has
never hesitated to delve into the NLRCs factual conclusions where
evidence was found insufficient to support them, or too much was
deduced from the bare facts submitted by the parties, or the LA
and the NLRC came up with conflicting positions, as is true in this
case.29chanroblesvirtuallawlibrary
As aptly pointed out by the LA, while HPC has the onus
probandi that the taking of Reymars helmet by Farrales was with
intent to gain, it failed to discharge this burden, as shown by the
following circumstances: Farrales sought and obtained the
permission of Eric, his co-employee as well as barangay co-
resident, to borrow his helmet; at the parking lot, Farrales asked
another employee, Andy, to fetch a yellow helmet from one of the
parked motorcycles, mistakenly thinking it belonged to Eric (whom
he knew owned two helmets); the following day, November 28,
Farrales asked Eric why he had not dropped by his house to get his
helmet, and Eric replied that Farrales got the wrong helmet
because he still had his other helmet with him; Farrales
immediately sought the help of the company guards to locate the
owner of the yellow helmet, who turned out to be Reymar; Farrales
apologized to Reymar for his mistake, and his apology was
promptly accepted.30 All these circumstances belie HPCs claim that
Farrales took Reymars helmet with intent to gain, the LA said.
In ruling that Farrales dismissal by HPC was attended with utmost
malice and bad faith as to justify an award of moral and exemplary
damages and attorneys fees, the LA stated that [i]t is succinctly
clear that [the] respondents [therein] tried to blow out of
proportions the indiscretion of [Farrales] for reasons known only to
them, and moreover, [f]inding that the dismissal on the ground
of theft is unavailing, [the] respondents [therein] immediately
offered [Farrales] his former position when he filed [his] complaint.
What does this act of [the] respondents [therein] speak
[of]?31chanroblesvirtuallawlibrary
On the other hand, the NLRC found that Farrales lied, first, when
he told Andy, then already astride his motorbike at the parking
area and about to leave the company premises, that the yellow
helmet belonged to him,32 and second, when he claimed that Eric
was his neighbor, although they were not. It ruled as doubtful
Farrales hazy recollection about what happened that afternoon at
the parking lot, since he could not even give a description of the
motorcycle from which he took the yellow helmet. These
circumstances, the NLRC determined, comprise substantial proof
belying Farrales claim of good faith. As a supervisory employee,
he held a position of high responsibility in the company making
him accountable to stricter rules of trust and confidence than an
ordinary employee, and under Article 282 of the Labor Code, he is
guilty of a serious misconduct and a willful breach of trust. The
NLRC went on to cite a settled policy that in trying to protect the
rights of labor, the law does not authorize the oppression or self-
destruction of the employer. Management also has its own rights,
which as such, are entitled to respect and enforcement in the
interest of simple fair play.33chanroblesvirtuallawlibrary
But the Court agrees with the CA that Farrales committed no
serious or willful misconduct or disobedience to warrant his
dismissal. It is not disputed that Farrales lost no time in returning
the helmet to Reymar the moment he was apprised of his mistake
by Eric, which proves, according to the CA, that he was not
possessed of a depravity of conduct as would justify HPCs claimed
loss of trust in him. Farrales immediately admitted his error to the
company guard and sought help to find the owner of the yellow
helmet, and this, the appellate court said, only shows that Farrales
did indeed mistakenly think that the helmet he took belonged to
Eric.
It is not, then, difficult to surmise that when Farrales told Andy
that the yellow helmet was his, his intent was not to put up a
pretence of ownership over it and thus betray his intent to gain, as
the NLRC held, but rather simply to assuage Andys reluctance to
heed his passing request to reach for the helmet for him; Andy, it
will be recalled, was at that moment already seated in his
motorbike and about to drive out when Farrales made his request.
As to Farrales claim that he and Eric were neighbors, suffice it to
say that as the CA noted, they resided in the same barangay, and
thus, loosely, were neighbors.
The CA also pointed out that although the alleged theft occurred
within its premises, HPC was not prejudiced in any way by Farrales
conduct since the helmet did not belong to it but to Reymar. In
light of Article 69, Class A, Item No. 29 of the HPC Code of
Discipline, this observation may be irrelevant, although it may be
that the LA regarded it as proving HPCs bad faith.
Theft committed by an employee against a person other than his
employer, if proven by substantial evidence, is a cause analogous
to serious misconduct.34 Misconduct is improper or wrong conduct,
it is the transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character,
and implies wrongful intent and not mere error in judgment. The
misconduct to be serious must be of such grave and aggravated
character and not merely trivial or unimportant. Such misconduct,
however serious, must, nevertheless, be in connection with the
employees work to constitute just cause for his
separation.35chanroblesvirtuallawlibrary
But where there is no showing of a clear, valid and legal cause for
termination of employment, the law considers the case a matter of
illegal dismissal.36 If doubts exist between the evidence presented
by the employer and that of the employee, the scales of justice
must be tilted in favor of the latter. The employer must
affirmatively show rationally adequate evidence that the dismissal
was for a justifiable cause.37chanroblesvirtuallawlibrary
Nonetheless, the Court agrees with the CAs dismissal of the award
of moral and exemplary damages for lack of merit. There is no
satisfactory proof that the concerned officers of HPC acted in bad
faith or with malice in terminating Farrales. Notwithstanding the
LAs assertion to this effect, Farrales bare allegations of bad faith
deserve no credence, and neither is the mere fact that he was
illegally dismissed sufficient to prove bad faith on the part of HPCs
officers.38 But concerning the award of attorneys fees, Farrales
was dismissed for a flimsy charge, and he was compelled to litigate
to secure what is due him which HPC unjustifiably withheld.
WHEREFORE, premises considered, the petition for review
is DENIED.
SO ORDERED.
NORMAN YABUT, Petitioner, v. MANILA ELECTRIC COMPANY AND
MANUEL M. LOPEZ, Respondents.
REYES,J.:
FACTS:
This case stems from a complaint for illegal dismissal and monetary claims
filed by herein petitioner Norman Yabut (Yabut) against respondents Manila
Electric Company (Meralco) and Meralco officer Manuel M. Lopez (Lopez).
The petitioner had worked with Meralco from February 1989 until his
dismissal from employment on February 5, 2004. Meralco's Inspection Office
issued a memorandum informing it of an illegal service connection at the
petitioner's residence. Given this report, Meralco's Head of Investigation-
Litigation Office issued to the petitioner a notice of investigation.
Meralcos Litigation Investigation Office summarized the results of Meralco's
findings in a memorandum which indicated that Yabuts electric service was
disconnected for account delinquency. Notwithstanding the disconnection
and the fact that Meralcos service had not been reconnected, Yabut's meter
registered electric consumption. In view of these findings, respondent
Meralco, issued a notice of dismissaladdressed to the petitioner. The notice
cites violation of Section 7, paragraph 3 of Meralco's Company Code on
Employee Discipline and Article 282 (a), (c), (d) and (e) of the Labor Code of
the Philippines as bases for the dismissal.
Aggrieved by the decision of the management, Yabut filed with the National
Labor Relations Commission (NLRC) a complaintfor illegal dismissal and
money claims against Meralco and Lopez.
Labor Arbiter Antonio R. Macam rendered his Decision,declaring the
petitioner illegally dismissed from the service and hence, entitled to
reinstatement plus backwages and attorney's fees.
NLRC rendered its Resolutiondismissing the herein respondents' appeal for
lack of merit.
CA rendered the now assailed Decisionreversing the rulings of the NLRC. In
finding the petitioner's dismissal lawful, the appellate court attributed unto
Yabut authorship of the meter tampering and illegal use of electricity acts
which it regarded as serious misconduct.
ISSUE: Whether or not petitioners dismissal is illegal?
HELD: Court of Appeals decision is sustained.
LABOR LAW
Article 279 of the Labor Code of the Philippines provides that (i)n 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. x x x The
just causes are enumerated in Article 282, which provides:
Article 282.Termination by employer. - An employer may terminate an
employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of
his employer or any immediate member of his family or his duly authorized
representative; and
(e) Other causes analogous to the foregoing.
Significantly, tampering with electric meters or metering installations of the
Company or the installation of any device, with the purpose of defrauding the
Company is classified as an act of dishonesty from Meralco employees,
expressly prohibited under company rules. It is reasonable that its
commission is classified as a severe act of dishonesty, punishable by
dismissal even on its first commission, given the nature and gravity of the
offense and the fact that it is a grave wrong directed against their employer.
Article 282 (a) provides that an employer may terminate an employment
because of an employee's serious misconduct, a cause that was present in
this case in view of the petitioner's violation of his employer's code of
conduct. Misconduct is defined as the transgression of some established
and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment. For
serious misconduct to justify dismissal, the following requisites must be
present:
(a) it must be serious;
(b) it must relate to the performance of the employee's duties; and
(c) it must show that the employee has become unfit to continue working for
the employer.
The dismissal is also justified as the act imputed upon the petitioner qualifies
as fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative under Article 282 (c) of the Labor
Code. While the petitioner contests this ground by denying that his position
is one of trust and confidence, it is undisputed that at the time of his
dismissal, he was holding a supervisory position after he rose from the ranks
since commencement of his employment with Meralco. As a supervisor with
duty and power that included testing of service meters and investigation of
violations of contract of customers, his position can be treated as one of trust
and confidence, requiring a high degree of honesty as compared with
ordinary rank-and-file employees.
We emphasize that dismissal of a dishonest employee is to the best interest
not only of the management but also of labor. As a measure of self-
protection against acts inimical to its interest, a company has the right to
dismiss its erring employees. An employer cannot be compelled to continue
employing an employee guilty of acts inimical to the employer's interest,
justifying loss of confidence in him.
DENIED
JONATHAN I. SANG-AN, Petitioner, v. EQUATOR KNIGHTS DETECTIVE
AND SECURITY AGENCY, INC.,Respondent.
BRION, J.:
FACTS:
Jonathan was the Assistant Operation Manager of respondent Equator Knights
Detective and Security Agency, Inc. (Equator). He was tasked, among others, with
the duty of assisting in the operations of the security services. He was also in charge
of safekeeping Equators firearms.
On April 21, 2001, Equator discovered that two firearms were missing from its
inventory. The investigation revealed that it was Jonathan who might have been
responsible for the loss. On April 24, 2001, Jonathan was temporarily suspended
from work pending further investigation.
On May 8, 2001, while Jonathan was under suspension, a security guard from
Equator was apprehended by policemen for violating the Commission on Elections
gun ban rule. The security guard stated in his affidavit that the unlicensed firearm
had been issued to him by Jonathan.
On May 24, 2001, Jonathan filed with the NLRC a complaint for illegal suspension
with prayer for reinstatement. In his position paper, however, he treated his case as
one for illegal dismissal and alleged that he had been denied due process when he
was dismissed. Equator, on the other hand, argued that Jonathans dismissal was for a
just cause under Article 282 of the Labor Code.
The LA dismissed the complaint holding that no illegal dismissal took place as
Jonathans services were terminated pursuant to a just cause. The LA found that
Jonathan was dismissed due to the two infractions he committed: (1) the loss of
Equators firearms under Jonathans watch, and (2) issuance of an unlicensed firearm
to Equators security guard.
Jonathan appealed to the NLRC, contending that no charge had been laid against
him; there was no hearing or investigation of any kind; and he was not given any
chance or opportunity to defend himself.
The NLRC sustained the findings of the LA. However, it held that Equators letter
informing him of his temporary suspension until further notice did not satisfy the
requirements of due process for a valid dismissal. Thus, the NLRC modified the
LAs decision and ordered Equator to pay Jonathan backwages from April 24, 2001
until the date of the NLRCs decision. Equator moved for reconsideration but the
NLRC denied the motion, prompting the filing of a petition for certiorari under Rule
65 of the Rules of Court with the CA.
The CA reinstated the LAs decision dismissing Jonathans complaint. Jonathan filed
a motion for reconsideration which the CA denied.

Hence, this petition.
Jonathan contends that when Equator filed a petition for certiorari under Rule 65 of
the Rules of Court, it failed to post a cash or surety bond as required by Article 223
of the Labor Code. Without complying with this condition, the petition for certiorari
should have been dismissed outright. Also, Jonathan contends that the CAs findings
of fact are contrary to the findings of fact by the NLRC.
ISSUES:
Whether or not the posting of a cash or surety bond is required for the filing of a
petition for certiorari under Rule 65 of the Rules of Court with the CA?
Whether or not Jonathan was validly dismissed?
HELD:
The petition is partly meritorious.
LABOR LAW
The requirement of a cash or surety bond as provided under Article 223 of the Labor
Code only applies to appeals from the orders of the LA to the NLRC. It does not
apply to special civil actions such as a petition for certiorari under Rule 65 of the
Rules of Court. In fact, nowhere under Rule 65 does it state that a bond is required
for the filing of the petition.
A petition for certiorari is an original and independent action and is not part of the
proceedings that resulted in the judgment or order assailed before the CA. It deals
with the issue of jurisdiction, and may be directed against an interlocutory order of
the lower court or tribunal prior to an appeal from the judgment, or to a final
judgment where there is no appeal or any plain, speedy or adequate remedy provided
by law or by the rules.
LABOR LAW
In order to validly dismiss an employee, it is fundamental that the employer observe
both substantive and procedural due process the termination of employment must be
based on a just or authorized cause and the dismissal can only be effected, after due
notice and hearing.
The Court finds that Equator complied with the substantive requirements of due
process when Jonathan committed the two offenses.
Article 282(A) of the Labor Code provides that an employee may be dismissed on
the ground of serious misconduct or willful disobedience of the lawful orders of his
employer or representative in connection with his work. Misconduct is improper or
wrongful conduct; it is the transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error of judgment. The misconduct, to be serious
within the meaning of the Labor Code, must be of such grave and aggravated
character and not merely trivia or unimportant. It is also important that the
misconduct be in connection with the employee's work to constitute just cause for
his separation.
By losing two firearms and issuing an unlicensed firearm, Jonathan committed
serious misconduct. He did not merely violate a company policy; he violated the law
itself, Presidential Decree No. 1866, and placed Equator and its employees at risk of
being made legally liable. Thus, Equator had a valid reason that warranted Jonathans
dismissal from employment as Assistant Operation Manager.
However, the Court finds that Equator failed to observe the proper procedure in
terminating Jonathans services.
Jurisprudence has expounded on the guarantee of due process, requiring the
employer to furnish the employee with two written notices before termination of
employment can be effected: a first written notice that informs the employee of the
particular acts or omissions for which his or her dismissal is sought, and a second
written notice which informs the employee of the employer's decision to dismiss
him. In considering whether the charge in the first notice is sufficient to warrant
dismissal under the second notice, the employer must afford the employee ample
opportunity to be heard.
A review of the records shows that Jonathan was not furnished with any written
notice that informed him of the acts he committed justifying his dismissal from
employment. The notice of suspension given to Jonathan only pertained to the first
offense. With respect to his second offense, Jonathan was never given any notice
that allowed him to air his side and to avail of the guaranteed opportunity to be
heard. That Equator brought the second offense before the LA does not serve as
notice because by then, Jonathan had already been dismissed.
In order to validly dismiss an employee, the observance of both substantive and
procedural due process by the employer is a condition sine qua non. Procedural due
process requires that the employee be given a notice of the charge against him, an
ample opportunity to be heard, and a notice of termination.
The decision and resolution of the Court of Appeals AFFIRMED with
MODIFICATION. The dismissal of the petitioner is valid. Consequently,
Equator Knights Detective and Security Agency, Inc. is ordered to pay
petitioner Jonathan I. Sang-an P130, 000.00 as nominal damages for its non-
compliance with procedural due process.
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Fujitsu Computer Products Corporation of the Philippines v CA
Date: March 31, 2005
Ponente: Callejo
Doctrine:
It is settled that to constitute a valid dismissal from employment, two
requisites must concur: (a) the dismissal must be for any of the causes
provided for in Article 282 of the Labor Code; and (b) the employee must be
afforded an opportunity to be heard and defend himself. This means that an
employer can terminate the services of an employee for just and valid
causes, which must be supported by clear and convincing evidence. It also
means that, procedurally, the employee must be given notice, with adequate
opportunity to be heard, before he is notified of his actual dismissal
for cause.
Fast Facts:
Victor de Guzman (R) (managerial employee) began working for
Fujitsu Computer Products Corporation of the Philippines (FCPP) on
September 21, 1997 as Facilities Section Manager. Allan Alvarez (R), on the
other hand, was employed as a Senior Engineer on April 21, 1998. He was
assigned at the Facilities Department under the supervision of De Guzman.
Both respondents were dismissed: (1) De Guzman allegedly caused the
anomalous disposal of steel purlins which amounted to loss of confidence or
breach of willful trust; whereas, (2) Alvarez was allegedly guilty of serious
misconduct for sending an anonymous and premeditated/malicious email
to several employees and officers expressing his sympathy towards De
Guzmans case. LA ruled in favor of FCPP holding that the termination of
said employees was justified and that they were not denied due process (i.e.
adequately informed of the charges and were required to explain). NLRC
affirmed. CA reversed. Contrary to the findings of the LA, De Guzman did
not betray the trust reposed on him by his employer, as the transaction
involving the sale of scrap steel purlins was between Sta. Rosa (Church)
and Saros. On the part of Alvarez, CA ruled that his act of sympathizing
and believing in the innocence of De Guzman and expressing his views was
not of such grave character as to be considered serious misconduct which
warranted the penalty of dismissal.
Issue: WON they were illegally dismissed
Held: Yes.
Ratio:
De Guzmans actuations do not amount to willful breach of trust and
confidence.
It was the building contractor and not petitioner Victor de Guzman
who determined whether the metals are scrap metals. Hence, the assertion
of the private respondents that petitioner Victor de Guzman prematurely
declared the metal [purlins] as scrap materials is without basis. Moreover,
the fact is that as per the Garbage Collection Agreement dated January 15,
1999, the scrap metals in the premises of petitioner FCPP were regularly
bought by Saros. Hence, after such scrap materials are weighed, loaded
onto a truck and carried out of the company premises, the petitioner FCPP
can no longer be considered the owner thereof, and ceases to exercise
control over such property. Saros, as the new owner of the scrap materials
in question, including the steel purlins, was free to contract with anyone as it
wished. At most, respondent De Guzman was merely recommending a
buyer for such scrap materials, an act which could hardly be considered as
deserving of such a harsh penalty as dismissal from employment.
Dismissal of respondent Alvarez from employment for gross misconduct was
illegal.
There is no showing that the sending of such e-mail message had
any bearing or relation on respondent Alvarezs competence and proficiency
in his job. To reiterate, in order to consider it a serious misconduct that would
justify dismissal under the law, the act must have been done in relation to
the performance of his duties as would show him to be unfit to continue
working for his employer.
Notes:
Loss of Trust and Confidence
To be a valid ground for dismissal, loss of trust and confidence must be
based on a willful breach of trust and founded on clearly established facts. A
breach is willful if it is done intentionally, knowingly and purposely, without
justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly, or inadvertently. It must rest on substantial
grounds and not on the employers arbitrariness, whims, caprices or
suspicion; otherwise, the employee would eternally remain at the mercy of
the employer. 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. The Court had the
occasion to reiterate in Nokom v. National Labor Relations Commission the
guidelines for the application of the doctrine of loss of confidence: a. loss of
confidence should not be simulated; b. it should not be used as a subterfuge
for causes which are improper, illegal or unjustified; c. it may not be
arbitrarily asserted in the face of overwhelming evidence to the contrary; and
d. it must be genuine, not a mere afterthought to justify earlier action taken in
bad faith.
Serious Misconduct
Misconduct has been defined as improper or wrong conduct. It is the
transgression of some established and definite rule of action, a forbidden
act, a dereliction of duty, willful in character, and implies wrongful intent and
not mere error of judgment. The misconduct to be serious must be of such
grave and aggravated character and not merely trivial and unimportant.
Such misconduct, however serious, must nevertheless be in connection with
the employees work to constitute just cause for his separation. Thus, for
misconduct or improper behavior to be a just cause for dismissal, (a) it must
be serious; (b) must relate to the performance of the employees duties; and
(c) must show that the employee has become unfit to continue working for
the employer. Indeed, an employer may not be compelled to continue to
employ such person whose continuance in the service would be patently
inimical to his employers interest.