LOPEZ vs NLRC Case Digest

[G.R. No. 167385 December 13, 2005]

JESUS B. LOPEZ, Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC)

SECOND DIVISION, HON. COMMISSIONERS ANGELITA GACUTAN, VICTORIANO
CALAYCAY, RAUL AQUINO, MAYNILAD WATER SERVICES, INC., BENJAMIN REYES and
CRISTINA M. BONIFACIO,

FACTS: Regina M. Gopez wrote a letter to respondent Maynilad Water Services, Inc. alleging that
she entered into an agreement with petitioner Jesus B. Lopez, Maynilad’s Senior Engineering
Assistant, to repair her water meter for a fee. Despite payment of P500, petitioner allegedly never
returned to fix the defective meter.

Maynilad’s Head of Technical Operations-Sampaloc Sector issued a memorandum requiring

petitioner to answer the allegations. Petitioner denied the charges against him.

Maynilad also formed an Ad-Hoc Investigation Panel which recommended petitioner’s dismissal
from the service based on its findings that petitioner committed serious misconduct in
contracting an unauthorized work for a fee. Thus, petitioner was served a notice of termination.

Aggrieved, petitioner filed a complaint for illegal dismissal claiming that he was dismissed
without just cause.

ISSUE: Whether or not petitioner’s termination was valid.

HELD: 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. Such misconduct, however serious,
must nevertheless be in connection with the employee’s 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 employee’s duties; and, (c) must show
that the employee has become unfit to continue working for the employer.

As a measure of self-preservation against acts inimical to its interests, an employer has the right
to dismiss an employee found committing acts of dishonesty and disloyalty. The employer may
not be compelled to continue to employ such a person whose continuance in the service would
patently be inimical to his employer’s interest. The law, in protecting the rights of workers,
authorizes neither oppression nor self-destruction of the employer.

In the instant case, we find the penalty of dismissal from service reasonable and appropriate and
a valid exercise of management prerogative. Maynilad specifically prescribes that, should any
employee begin or continue to engage in conflict of interest activities despite management
pronouncement or disapproval, the appropriate disciplinary sanctions shall be imposed on him.
Appropriate disciplinary sanction, such as termination, is within the purview of management
imposition.

That Maynilad suffered no damage resulting from the acts of petitioner is inconsequential. In
Glaxo Wellcome Philippines, Inc. v. Nagkakaisang Empleyado ng Wellcome-DFA (NEW-DFA), we
held that deliberate disregard or disobedience of company rules could not be countenanced, and
any justification that the disobedient employee might put forth would be deemed
inconsequential. The lack of resulting damage was unimportant, because “the heart of the charge
is the crooked and anarchic attitude of the employee towards his employer. Damage aggravates
the charge but its absence does not mitigate nor negate the employee’s liability.” What is
abhorrent and punishable is the act of contracting unauthorized work for a fee, regardless of
whether the act caused damage to the company. Thus, we hold that Maynilad validly terminated
the services of petitioner on the ground of serious misconduct which resulted to the loss of trust
of Maynilad upon petitioner because his credibility in doing his job as a team leader of a repair
crew has already been eroded.

As regards to the amount awarded to the petioner for financial assistance, the same must be
deleted. Financial assistance may be given as a measure of social justice in exceptional
circumstances and as an equitable concession. It is allowed only in those instances where the
employee is validly dismissed for causes other than serious misconduct or those reflecting on his
moral character.

WHEREFORE, the petition is DENIED.

Union of Supervisors v. Sec. of Labor

Summary: Luna was the bank manager of the San Juan branch of Republic Bank (RB). He
charged RB with ULP for harassment, unjust suspension from his employment as Manager of
respondent's San Juan branch and as member of the Board of Trustees of the RB Provident
Fund, as well as his unlawful dismissal as Administrator and Secretary of the said fund, all
due to his militant espousal and defense of workers' rights. In a 1981 decision, the court
ordered RB to reinstate him immediately, but Republic Planters Bank (RPB), a reorganized RB,
refused to do so, alleging that because of the economic problems, it needs to maintain a fresh
batch of officers. Court granted this exception, but still ordered RPB to reinstate Luna in an
equivalent position.

facts of the case

This case is a resolution of the previous decision made (Nov. 1981) finding that "Luna's
discharge was discriminatory and constituted unfair labor practice. He is therefore entitled to
reinstatement with back wages." and accordingly ordered respondent Republic Bank (now
Republic Planters Bank) to immediately reinstate complainant and without loss of seniority
rights + backwages.

On the same month, after receipt of a copy of the said decision, Luna went to RB for
reinstatement but the latter refused, stating that their counsel still needs to study the said
decision.

On Jan 1982, it submitted an MR, alleging the following:

- The complaint for unfair labor practice was filed as early as 1974. The issues and
personality involved were former employees and officers of the old management
team of the defunct Republic Bank. Some have either resigned, retired and/or
terminated when the new management of respondent Bank took over its helm in
1978
- The findings that RB is guilty of ULP refers to the old defunct RB and has nothing to
do with the RPB
o The new RPB was made in lieu of Phil. Sugar Commission’s purchase of a
substantial portion of the bank’s equity in order to bail the bank out from
financial collapse and ruin
o The new goal of RPB is to act as PHILSUCOM’s financing arm vis-à-vis crop
loans granted to sugar planters of the country and its financial exposure
thereto, ultimately to save the sugar industry
- As a necessary consequence of change of corporate personality, RPB had to do
restructuring and reorganization of its management team to give itself a new image
- The instant case came to surface only when the present management of RPB was
furnished a copy of the decision of this Honorable Court. The old management did
not advise the present management of the pendency of the case. If it were
accordingly advised the new management of Republic Planters Bank could have
filed the necessary pleadings and manifestations to advise the Honorable Court of
the foregoing changes in the corporate and management structure of the defunct
Republic Bank
The following grounds were also interposed:

- Even if argued that the corporate life of RB still continued, RPB cannot be forced to
suffer the consequences of the ULP made by the old management to Luna
- Since they have already hired new personalities (esp. for the bank manager position
in San Juan – position Luna is asking for reinstatement) enjoying its trust and
confidence, substituting Luna will cause an undue disturbance in the chain of
 command vis-à-vis branch operations. Also, a new form of injustice and violation of
security of tenure will thus be committed by RPB on the new employee
- RPB respectfully submits that subject order be qualified by allowing respondent
Republic Planters Bank to reinstate Norberto Luna if still possible to his old
position, and if not, he be given an equivalent position

issue

WON RPB may choose to reinstate Luna in to an equivalent position only. YES.

ratio

The court first laid out the general rules in Reinstatement:

Reinstatement is a restoration to a state from which one has been removed or

separated. It is the return to the position from which he was removed and assuming
again the functions of the office already held. It pre-supposes that the previous position
from which one had been removed still exists, or that there is an unfilled position more or
less of a similar nature as the one previously occupied by the employee.

In this regard, Luna may indeed be reinstated in the same position. Even though there was
a reorganization and a change in management, the same position Luna held before still exists,
therefore giving him a right to such position. But RPB’s contention that the position of a
Branch Manager relates to one of trust and confidence and therefore the incumbent manager of
San Juan Branch who has won the trust and confidence of the management by reason of his
capability and probity should not be dismissed in favor of one whose competence and integrity
the management has not tested must be given merit.

Carving out the exception for the Economic Business Condition

As the facts of the case provide (previous ruling), Luna has served RB for 22 years. But
even though Luna has served for this long, it does not prove that he has the trust and
confidence of RPB. Plus, it must be noted that at that time of economic crisis of the respondent
Bank, the herein petitioner was the manager of the San Juan Branch. It cannot be said that he
did not contribute, directly or indirectly, to the downhill economy of the respondent Bank.

Clearly, the respondent Bank, after surviving said crisis, and emerging therefrom as
Republic Planters Bank, should be given the best managers. Managers who can contribute to
its struggle to survive. Managers who have not only the capacity and efficiency but
likewise they must also have the "proven" skill that is essential for the respondent
Republic Planters Bank to go on and weather these times of economic difficulties.

Considering these "economic-business conditions" together with the economic crisis we are
in now, it is inevitable that these be reflected in the desire for efficient and productive
management. This honest intention can only be effectuated if the complainant Norberto Luna
is reinstated to a substantially equivalent position without loss of seniority rights and
the incumbent manager who is now holding the position formerly held by herein complainant
be allowed to continue with his "tested" competence and integrity in the management of the
San Juan Branch of the Republic Planters Bank.

WRT failure of Luna to assert his rights to RPB

 Luna should’ve informed RPB of the pending case, given that he is an active and militant
employee in the defense of union rights. His failure to do so deserves consequences he must
face

WRT increases and benefits

The contention by RPB that such benefits should not automatically attach to the length of
service, but must be earned deserves credence.

Although backwages are compensation to which an employee is entitled, by reason of his

continued status as an employee since an illegally dismissed employee is considered as not
having left his, mere continuance as an employee does not qualify him for benefits and
increases. Benefits and increases are allowed because of outstanding performance of duties
and not solely because of length of service.

However, the Court cannot allow the Republic Planters Bank to make deductions from the
3 year back-wages it has already paid to the complainant Norberto Luna. Equity must operate
in favor of the employee equally as it favors the employer.
Espejo v. NLRC, 255 SCRA 430 (1996)

FACTS:

· On August 1, 1987, the Cooperative Insurance System of the Philippines (CISP) hired
Espejo as General Manager with a monthly salary of P9,000 plus some privileges, including the
use of a company car with driver.

· On September 11, 1989, the Board of Directors of CISP held a meeting to discuss the “cease
and desist order” issued by the Insurance Commission against CISP on the grounds of “capital
impairment and margin of solvency deficiency.” In order to meet the capital requirements, the
Board passed a resolution authorizing the sale of some CISP properties, including the car
assigned to Espejo.

· Espejo objected to the proposed sale. The Board did not act on his objection so Espejo
was prompted to tender his irrevocable resignation effective October 11, 1989.

· On September 22, 1989, the Board held another meeting, where they affirmed the sale of
CISP properties. The Board also resolved to act on Espejo’s resignation.

· On September 26, 1989, the Chairman of the company met with Espejo who manifested
that he had changed his mind about resigning and that he would continue as General Manager
despite the sale of the company car. The Chairman wrote a memo to the Board on October 3 to
inform the latter of Espejo’s oral revocation.

· On October 9, 1989, Espejo received a letter from the Chariman relaying the acceptance
of his resignation effective October 11. Espejo replied stating that he was surprised about this
action of the Board, since he had earlier verbally withdrawn his resignation. On November 14,
1989, CISP paid Espejo his unpaid benefits.

· Espejo filed a complaint for illegal dismissal and damages. The LA ruled in his favor and
ordered CISP to reinstate him to his former position and to pay full backwages limited to three
years. The NLRC affirmed the finding of illegal dismissal but deleted the reinstatement for having
become moot and academic since Espejo was already 60 years old. The award of backwages was
limited to 18 months.

Issue: WON an illegally dismissed employee may be reinstated even if he had already reached
retirement age

Held: NO · CISP did not have any retirement plan for its employees. Thus, Sec. 13 Book IV
of the Omnibus Rules shall apply. This rule provides that in the absence of a retirement plan,
an employee may be retired upon reaching the age of 60 years. This provision has been
construed to mean that an employee may retire, or may be retired by his employer, upon reaching
sixty.

Thus, Espejo cannot be reinstated anymore because he was already sixty years old at the time
the decision was rendered.
 · Generally, an illegally dismissed employee who cannot be reinstated is entitled to
separation pay and backwages. However, considering that Espejo has already reached the
statutory retirement age of sixty, he is only entitled to backwages. He is entitled to backwages
because it is a form of relief that restores the income lost by reason of the unlawful dismissal. He
is NOT entitled to separation pay because separation pay is oriented towards the immediate
future, the transitional period the dismissed employee must undergo before locating a
replacement job.

· However, the amount of backwages should only cover the time when Espejo was illegally
dismissed up to the time when he reached sixty (from October 11, 1989 to January 31, 1990)..

· Moral and exemplary damages cannot be awarded because the decision to sell the
company car was made by the Board, and not the individual whom Espejo considers to be his
enemy. Also, the sale was made to meet certain requirements of the Insurance Commission.

CISP also relied on the term “irrevocable” in accepting the resignation and did not take into
account Espejo’s change of heart. This misapprehension of Espejo’s intentions cannot be
deemed bad faith on the part of CISP.

Judgment affirmed, but portion relating to period of backwages set aside. LA ordered to compute
award of backwages.

Carlos Ranara vs. NLRC G.R. No. 100969 August 14, 1992

Facts:

Petitioner filed a complaint with the Department of Labor and Employment for illegal dismissal.
The private respondents denied the charges, contending that the petitioner had not been
illegally dismissed. Chang said that he had not authorized Leonar, or even his mother who was
the officer-in-charge during his absence, to terminate Ranara's employment. The truth was
that it was Ranara who abandoned his work when he stopped reporting. The Labor Arbiter held
that petitioner had not been illegally dismissed. The Solicitor General disagreed with the NLRC
on the legality of the petitioner's dismissal. He said that the challenged decision was based on
an event subsequent to the illegal dismissal, to wit, the offer of reinstatement, and that such
offer did not validate the dismissal. The NLRC argued that the petitioner had not filed a motion
for reconsideration of its decision and should therefore not be allowed to file his petition for
certiorari with this Court.

Issue: Whether or not procedural lapses may be disregarded in labor cases.

Ruling:

Yes. The failure of the petitioner to file a motion for reconsideration of the NLRC decision before
coming to this Court was not a fatal omission. In the interest of substantial justice, and
especially in cases involving the rights of workers, the procedural lapse may be disregarded to
enable the Court to examine and resolve the conflicting rights and responsibilities of the
parties. This liberality is warranted in the case at bar, especially since it has been shown that
the intervention of the Court was necessary for the protection of the dismissed laborer.
Garcia vs. PAL, G.R. No. 164856, Jan. 20, 2009, En Banc, citing Genuino vs. NLRC, G.R.
No. 142732-33, December 4, 2007

Facts:

This case stemmed from an administrative charge filed by PAL against employees, herein
petitioners after allegedly being caught in the act of sniffing shabu in the workplace. After due
notice, PAL dismissed petitioners prompting the latter to file a complaint for illegal dismissal
which was resolved by the Labor Arbiter in their favor ordering inter alia their reinstatement.
Subsequently, respondent company was placed under corporate rehabilitation. From the Labor
Arbiter, respondent appealed to NLRC which reversed said decision. Later, a writ of execution as
regards the reinstatement was issued by the Labor Arbiter. Respondent then filed an urgent
petition for injunction on the ground that it cannot comply with the reinstatement order due to
its corporate rehabilitation.

Issues:

1. Whether a subsequent finding of a valid dismissal by NLRC removes the basis for implementing
the reinstatement aspect of the Labor Arbiter’s decision?
2. Whether respondent company is justified in refusing to comply with such reinstatement order
in view of its corporate rehabilitation?

Ruling:

On the first issue, jurisprudential trend has maintained that even if the order of reinstatement
of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate
and pay the wages of the dismissed employee during the period of appeal until reversal by the
higher court. The employee is not required to reimburse whatever salary he may have received
for he is entitled to such. The opposite view is articulated in Genuino vs NLRC which states:

“If the decision of the Labor Arbiter is later reversed on appeal upon the finding that the ground
for dismissal is valid, then the employer has the right to require the dismissed employee on
payroll reinstatement to refund the salaries he or she received while the case was pending appeal,
xxx.

Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and
her dismissal is based on a just cause, then she is not entitled to be paid the salaries xxx.”

However, the dearth of authority supporting Genuino renders inutile the rationale of
reinstatement pending appeal. Pursuant to police power, the State may authorize an immediate
implementation, pending appeal of a decision reinstating a dismissed or separated employee
since that saving act is designed to stop, although temporarily since the appeal may be decided
in favor of the appellant, a continuing threat or danger to the survival or even the life of the
dismissed or separated employee and his family. Thus, the “Refund Doctrine” easily demonstrates
how a favorable decision by the Labor Arbiter could harm more than help a dismissed employee.
The employee, to make both ends meet, would necessarily have to use up the salaries received
during the pendency of the appeal, only to end up having to refund the sum in case of a final
unfavorable decision. The provision of Art. 223 is clear that an award by the Labor Arbiter for
reinstatement shall be immediately executory even pending appeal and the posting of a bond by
the employer shall not stay the execution for reinstatement. The legislative intent is quite obvious
i.e. to make an award of reinstatement immediately enforceable, even pending appeal. The Court
reaffirms such prevailing principle that even if the order of reinstatement is reversed on appeal,
it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed
employee during the period of appeal until reversal by the higher court.
After the labor arbiter’s decision is reversed by a higher court, the employee may be barred from
collecting the accrued wages if it is shown that the delay in enforcing the reinstatement was
without fault of the employer. The test is two-fold: a) there must be actual delay or the fact that
the order of reinstatement pending appeal was not executed prior to its reversal and b) the delay
must not be due to the employer’s unjustified act or omission. If the delay is due to employer’s
unjustified refusal, the employer may still be required to pay the salaries notwithstanding the
reversal of the labor arbiter’s decision. In Genuino, the former NLRC Rules of Procedure was still
applied in which it did not lay down a mechanism to promptly effectuate the self-executory order
of reinstatement, making it difficult to establish that the employer actually refused to comply.
The new NLRC Rules of Procedure which took effect on Jan. 7, 2006 now require the employer
to submit a report of compliance within 10 calendar days from receipt of the labor arbiter’s
decision. The employee need not file a motion for the issuance of a writ of execution since the
labor arbiter shall thereafter motu proprio issues the writ. It is settled that upon appointment by
SEC of a rehabilitation receiver, all actions for claims before any tribunal against the corporation
shall ipso jure be suspended. Case law recognizes that unless there is a restraining order, the
implementation of the order of reinstatement is ministerial and mandatory. The suspension of
claims partakes of the nature of a restraining order that constitutes legal justification for
respondent’s non-compliance with the reinstatement order. Respondent’s failure to exercise the
alternative options of actual reinstatement and payroll reinstatement was thus justified. The
petition is denied. The CA decision annulling the NLRC resolutions affirming the validity of the
Writ of Execution and Notice of Garnishment is affirmed.
4 MAGANA v. MEDICARD PHIL., INC.

FACTS:

1. Medicard, a health maintenance organization, hired Magana as company nurse who was
detailed to Medicard’s corporate client (Manila Pavilion).
2. Medicard was summarily replaced with another nurse. Medicard then offered Magana the
position of liaison officer.
3. Magana found the offer unacceptable and with her continued non-assignment, she sued
Medicard and Manila Pavilion in the NLRC for illegal dismissal and payment of benefits and
damages.
4. Labor Arbiter: Medicard was a mere labor contractor for Manila Pavilion which exercised
control and termination powers over Magana. The summary replacement was without cause
and of bad faith. Ordered Manila Pavilion to reinstate Magana and with Medicard, be
solidarily liable for backwages, etc.
5. NLRC: Affirmed, but found Medicard, not Manila Pavilion, as Magana’s employer and held it
liable for constructive illegal dismissal and for the payment of the backwages. Also awarded
reinstatement wages for Medicard’s failure to reinstate her pending appeal as required by the
Labor Code.
6. CA: Found Magana’s dismissal with cause, noting that Medicard’s failure to assign Magana
to a suitable position within six months after her replacement is “analogous to a suspension
of operations of an enterprise” entitling her of separation pay only. Deleted reinstatement
wages.

ISSUE: Whether Magana is entitled to draw wages under an arbiter’s ruling ordering her
reinstatement even though such order is subsequently reversed on appeal. YES.

RATIO:

 The unusual, mandatory mandatory order by law to execute reinstatement orders pending
appeal, unheard of in ordinary civil proceedings, is a police power measure, grounded on the
theory that the preservation of the lives of the citizens is a basic duty of the State that is more
vital than the preservation of corporate profits.
 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. This must be done immediately upon the filing of their appeal,
without need of any executory writ.
 Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory
on the part of the employer to reinstate and pay the wages of the dismissed employee during
the period of appeal until reversal by the higher court.
LANSANGAN vs AMKOR TECHNOLOGY PHILIPPINES Case Digest
LUNESA O. LANSANGAN AND ROCITA CENDAÑA v. AMKOR TECHNOLOGY PHILIPPINES

577 SCRA 493 (2009)

FACTS: An email was sent to Amkor Technology Philippines (Amkor) through their General
Manager alleging that the Lunesa Lansangan (Lansangan) and Rocita Cendana (Cendana) stole
company time. Lansangan and Cendana admitted to the wrongdoing and were terminated for
―extremely serious offenses‖. The two then filed a case of illegal dismissal against Amkor. The
Labor Arbiter (LA) ordered for their reinstatement to their former positions without backwages,
but dismissed the complaint on basis of Lansangan and Cendana’s guilt. The two did not appeal
the finding that they were guilty, and moved for the writ of execution. Amkor appealed the
decision to the National Labor Relations Commissions (NLRC) and was subsequently granted.
The NLRC deleted the grant for reinstatement of the LA.

The Court of Appeals affirmed the decision of the NLRC that Lansangan and Cendana are guilty
and should not be reinstated but modified in so far as backwages are concerned that it must be
paid in full.

ISSUE: Whether or not Lansangan and Cendana are entitled to backwages and reinstatement

HELD: The Arbiter found Lansangan and Cendana’s dismissal to be valid. Such finding had, as
stated earlier, become final, they not having appealed it. Lansangan and Cendana’s are not
entitled to full backwages as their dismissal was not found to be illegal. Agabon v. NLRC so states
–– payment of backwages and other benefits is justified only if the employee was unjustly
dismissed.
 St. Michael’s Institute vs. Santos, GR No. 145280

FACTS

Petitioner is a learning institute in Bacoor, Cavite with Fr. Victorino as Director and Blanco as
the Principal and respondents Santos, Magcamit and Rosarda were regular classroom teachers.
The respondents’ service with the school was interrupted when each of them was served a notice
of termination of employment. On August 10, 1993, there held a rally, organized and participated
in by faculty members, parents and some students of petitioner school aimed at calling the
attention of the school administration to certain grievances relative to substandard school
facilities and the economic demands of teachers and other employees of St. Michael’s Institute.

The school principal sent each of the respondents identical memoranda requiring them to explain
their acts. The investigation committee created by the petitioner school principal found that
respondents had led and actively participated in the said rally, in which they denounced the
Director of the Institute without justification and consequently recommended their termination
from service. The respondents then filed a complaint for illegal dismissal against the petitioners.

The Labor Arbiter found and declared that there was just cause for the dismissal of the
respondents’ complaints since they were guilty of dereliction of duty and insubordination. The
NLRC reversed the ruling of the Labor Arbiter and held that the respondents had been illegally
dismissed. The Court of Appeals sustained the decision of the NLRC.

ISSUE

Whether or not the conduct of the respondents warranted their dismissal from their employment.

RULING

We agree with the appellate court's conclusion that, under the attendant factual antecedents,
the dismissal meted out on the respondents for dereliction of duty for one school day and
denouncing school authority, appears to be too harsh a penalty. It must be noted that the
respondents are being held liable for a first time offense and, in the case of respondent Santos,
despite long years of unblemished service.

Even when an employee is found to have transgressed the employer's rules, in the actual
imposition of penalties upon the erring employee, due consideration must still be given to his
length of service and the number of violations committed during his employment. Where a
penalty less punitive would suffice, whatever missteps may have been committed by the employee
ought not to be visited with a consequence so severe such as dismissal from employment.
Moreover, the facts, as further established on appeal in the NLRC, paint out a picture that the
respondents were singled out by the petitioners apparently for being officers of the teachers'
union which they formed, despite the fact that several other teachers also joined the August 10,
1993 rally.
[G.R. No. 160871 February 6, 2006]
TRIAD SECURITY & ALLIED SERVICES, INC. and ANTHONY U. QUE, Petitioners, VS.
SILVESTRE ORTEGA, JR., ARIEL ALVARO, RICHARD SEVILLANO, MARTIN CALLUENG,
and ISAGANI CAPILA, Respondents.

FACTS

On 25 March 1999, respondents filed a complaint against petitioners and a certain Ret. B/Gen.
Javier D. Carbonell for underpayment/nonpayment of salaries, overtime pay, premium pay for
holiday and rest day, service incentive leave pay, holiday pay, and attorney’s fees. The complaint
was amended on 20 April 1999 to include the charges of illegal dismissal, illegal deductions,
underpayment/nonpayment of allowance, separation pay, and claims for 13th month pay, moral
and exemplary damages as well as night shift differential.

According to respondents, during the time that they were in the employ of petitioners, they were
receiving compensation which was below the minimum wage fixed by law. They were also made
to render services everyday for 12 hours but were not paid the requisite overtime pay, nightshift
differential, and holiday pay. Respondents likewise lamented the fact that petitioners failed to
provide them with weekly rest period, service incentive leave pay, and 13th month pay. As a
result of these perceived unfairness, respondents filed a complaint before the Labor Standards
Enforcement Division of the Department of Labor on 6 January 1999. Upon learning of the
complaint, respondents’ services were terminated without the benefit of notice and hearing.

For their part, petitioners denied respondents’ claim of illegal dismissal. Petitioners explained
that management policies dictate that the security guards be rotated to different assignments to
avoid fraternization and that they be required to take refresher courses at their headquarters.
Respondents allegedly refused to comply with these policies and instead went on leave or simply
refused to report at their headquarters. As for respondents’ money claims, petitioners insisted
that respondents worked for only eight hours a day, six days a week and that they received their
premium pays for services rendered during holidays and rest day. The service incentive leave of
respondents was allegedly made payable as soon as respondents applied for said benefit.

ISSUE

WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT DECLARED THAT THE
REMEDY ADOPTED BY THE PETITIONERS IS ERRONEOUS.

HELD

Petitioners contend that based on the rules of procedure of the NLRC, the order granting the
issuance of the 2nd alias writ of execution could not have been the proper subject of an appeal
before the NLRC neither could petitioners have sought the remedy of certiorari from the NLRC.
Petitioners argue that the rules of procedure of the NLRC do not provide for any remedy or
procedure for challenging the order granting a writ of execution; hence, the pertinent provision
of the Revised Rules of Court should apply which in this case is Section 1 of Rule 41

It is a basic tenet of procedural rules that for a special civil action for a petition for certiorari to
prosper, the following requisites must concur: (1) the writ is directed against a tribunal, a board
or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board or officer has
acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in
the ordinary course of law.

In this case, petitioners insist that the NLRC is bereft of authority to rule on a matter involving
grave abuse of discretion that may be committed by a labor arbiter. Such conclusion, however,
proceeds from a limited understanding of the appellate jurisdiction of the NLRC under
Article 223 of the Labor Code

Given the foregoing, we hold that the Court of Appeals correctly dismissed the petition for
certiorari brought before it. Notwithstanding this procedural defect committed by petitioners, in
the interest of substantial justice

WHEREFORE, premises considered, this Court AFFIRMS the Decision of the Court of Appeals
dated 31 July 2003 and the Order dated 23 April 2003 of the Labor Arbiter declaring petitioners
liable for additional accrued backwages. The amount of money claims due the respondents is,
however, MODIFIED. Let the records of this case be remanded to the Computation and
Examination Unit of the NLRC for proper computation of subject money claims as above-
discussed.
Palteng vs UCPB
GR 172199
Facts:
Petitioner Elizabeth D. Palteng was the Senior Assistant Manager/Branch Operations Officer of
respondent United Coconut Planters Bank in its Banaue Branch in Quezon City.
On April 15, 1996, Area Head and Vice-President Eulallo S. Rodriguez reported to the bank’s
Internal Audit and Credit Review Division that bank client Clariza L. Mercado-The Red Shop
has incurred Past Due Domestic Bills Purchased (BP) of P34,260,000. After conducting a
diligence audit, the division reported to the Audit and Examination Committee that Palteng
committed several offenses under the Employee Discipline Code in connection with Mercado’s
Past Due Domestic BP. It also recommended that the matter be referred to the Committee on
Employee Discipline for proper disposition.
On August 14, 1996, Palteng was required to explain why no disciplinary action should be
taken against her.
In response, Palteng explained that while she admitted committing a major offense that may
cause her dismissal, she claimed that it was an honest mistake.
After hearing and investigation, the committee recommended Palteng’s dismissal. On October
25, 1996, Palteng was dismissed with forfeiture of all benefits.
Palteng filed a complaint for illegal dismissal seeking reinstatement to her former position
without loss of seniority rights with full backwages, or in the alternative, payment of separation
pay with full backwages, and recovery of her monetary claims with damages.
Issue: WON backwages is proper.
Held:
Settled is the rule that an employee who is illegally dismissed from work is entitled to
reinstatement without loss of seniority rights, and other privileges as well as to full backwages,
inclusive of allowances, and to other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement.
However, in the event that reinstatement is no longer possible, the employee may be given
separation pay instead.
Notably, reinstatement and payment of backwages are distinct and separate reliefs. The award
of one does not bar the other. Backwages may be awarded without reinstatement, and
reinstatement may be ordered without awarding backwages.
In a number of cases, the Court, despite ordering reinstatement or payment of separation pay
in lieu of reinstatement, has not awarded backwages as penalty for the misconduct or
infraction committed by the employee.
In the case at bar, petitioner admitted that she granted the BP accommodation against
Mercado’s personal checks beyond and outside her authority. The Labor Arbiter, the NLRC and
the Court of Appeals all found her to have committed an “error of judgment,” “honest mistake,”
“honest mistake” vis-à-vis a “major offense.”
Since petitioner was not faultless in regard to the offenses imputed against her, we hold that
the award of separation pay only, without backwages, is proper.
CA decision affirmed.
 MANILA WATER COMPANY v. DEL ROSARIO

G.R. No. 188747, January 29, 2014

Facts:

Previously, complainant was hired as an Instrument Technician. Sometime afterwards,

Defendant discovered that 24 meters were missing in its stockroom. “Upon initial investigation,
it appeared that [complainant] and his co-employee, a certain Danilo Manguera, were involved
in the pilferage and the sale of water meters to the company’s contractor. Consequently, Manila
Water issued a Memorandum dated 23 June 2000, directing [complainant] to explain in writing
within 72 hours why he should not be dealt with administratively for the loss of the said water
meters. In his letter-explanation, [complainant] confessed his involvement in the act charged
and pleaded for forgiveness, promising not to commit similar acts in the future.” To give ample
opportunity for him to explain, an administrative hearing was conducted wherein complainant
was found responsible for the loss of the water meters. Thus, he was found liable for violating
the company’s Code of Conduct. Accordingly, he was dismissed. As a result, complainant filed
this labor complaint. Throughout the proceedings, it was held that there was no illegal
dismissal but complainant was awarded separation pay considering that he had served 21
years to the company.

Issue:

The issue raised is with respect to the award by the appellate court of separation pay.

Ruling:

The award of separation pay is deleted. “As a general rule, an employee who has been
dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not
entitled to a separation pay.” However, in exceptional cases, separation pay has been granted
to a legally dismissed employee as an act of “social justice” or on “equitable grounds.” In either
case, “it is required that the dismissal (1) was not for serious misconduct; and (2) did not
reflect on the moral character of the employee.”

Citing the leading case of PLDT v. NLRC (247 Phil. 641, 1988), the Supreme Court laid down
the rule “that separation pay shall be allowed as a measure of social justice only in the
instances where the employee is validly dismissed for causes other than serious misconduct
reflecting his moral character…”

In subsequent cases, the high tribunal “expanded the exclusions and elucidated that
separation pay shall be allowed as a measure of social justice only in instances where the
employee is validly dismissed for causes other than serious misconduct, willful disobedience,
gross and habitual neglect of duty, fraud or willful breach of trust, commission of a crime
against the employer or his family, or those reflecting on his moral character… the labor
officials [were instructed] that they must be most judicious and circumspect in awarding
separation pay or financial assistance as the constitutional policy to provide full protection to
labor is not meant to be an instrument to oppress the employers. The commitment of the court
to the cause of the labor should not embarrass us from sustaining the employers when they
are right… In fine, [the Court] should be more cautious in awarding financial assistance to the
undeserving and those who are unworthy of liberality of the law.”

Here, complainant’s claim for separation pay was denied “since the admitted cause of his
dismissal amounts to serious misconduct. He is not only responsible for the loss of the water
meters in flagrant violation of the company’s policy but his act is in utter disregard of his
partnership with his employer in the pursuit of mutual benefits.”

It should be noted that the years of service may determine the separation pay to be awarded if
proper. However, that is not the reason why such pay should be granted at all. “That Del
Rosario rendered 21 years of service to the company will not save the day for him.”
Serrano v. NLRC, 323 SCRA 445 (2000)

FACTS:

Petitioner was hired by private respondent Isetann as a security checker to apprehend shoplifters
and prevent pilferage of merchandise. Initially hired on Oct 1984 on contractual basis, eventually
became regular on 1985 and on 1988 became head of the Security Checkers Section. In 1991,
as a cost-cutting measure, Isetann decided to phase out its entire security section and engage
the services of an independent security agency. Serrano was given a memorandum terminating
his services effective on that same day on Oct 11, 1991.

Serrano filed a complaint for illegal dismissal, illegal layoff, unfair labor practice, underpayment
of wages, and nonpayment of salary and overtime pay. The Labor Arbiter ruled for Serrano. On
appeal the NLRC reversed the decision of the Labor Arbiter.

Issues:

1. WON hiring an independent security agency by Isetann to replace its current security
section as a valid ground.

2. WON the denial of the right to be given a written notice is tantamount to an illegal
dismissal.

Held:

1. No. Absent proof that management acted in a malicious or arbitrary manner, the court will
not interfere with exercise of the judgment by an employer. The only bare assertion is that
Isetann’s real purpose is to avoid payment to the security checkers of the wage increases
provided, such assertion is not a sufficient basis. Indeed, that the phase-out of the security
section constituted a “legitimate business decision” is a factual finding of an administrative
agency which must be accorded respect and even finality by this court. Accordingly, SC held that
the termination of the petitioner’s services was for an authorized cause…redundancy. Hence,
pursuant to Art. 283 of the Labor Code, petitioner should be given separate pay at the rate of
one month pay for every year of service.

2. No. The SC do not agree that to disregard the notice requirement by an employer renders
the dismissal of employment null and void. Such a stance is actually a reversion to the
discredited pre-Wenphil rule ordering an employee to be reinstated and paid backwages when it
is shown that he has not given notice and hearing although his dismissal or layoff is later found
to be a just or authorized cause. Such rule is abandoned in Wenphil because it is really unjust
to require an employer to keep in his service one who is guilty, for example, of an attempt on the
life of the employer or the latter’s family, or when the employer is precisely retrenching in order
to prevent losses. Rather, the remedy is to order the payment to the employee of full backwages
from the time of his dismissal until the court finds that the dismissal was for a just cause. But,
otherwise, his dismissal must be upheld and he should not be reinstated. This is because his
dismissal is ineffectual.

The cases cited by both Justice Puno and Panganiban refer, however, to the denial of due process
by the State, which is not the case here. There are three reasons why, on the other hand, violation
of the employer of the notice of requirement cannot be considered a denial of due process
resulting in the nullity of the employee’s dismissal or layoff.

a) The Due Process Clause of the Constitution is a limitation to the governmental powers. It
does not apply to the exercise of private power, such as termination of employment under the
labor code.

b) Notice and hearing are required under the Due Process Clause before the power of
organized society are brought to bear upon the individual. This is obviously not the case of
termination of employment under Art 283. Here the employee is not faced with an aspect of the
adversary system. The purpose is requiring for a 30-day written notice before an employee is laid
off is not to afford him an opportunity to be heard on any charge against him, for there is none.
The purpose rather is to give him time to prepare for the eventual loss of his job and the DOLE
an opportunity to determine whether economic causes do exist justifying the termination of his
employment.

c) Another reason why the notice requirement under Art 283 can not be considered a
requirement of the Due Process Clause is that the employer cannot really be expected to be
entirely an impartial judge of his own cause. This is also the cause under Art 282.

Lack of notice only makes termination Ineffectual

Not all notice requirements are requirements of due process. Some are simply part of the
procedure to be followed before a right granted to a party can be exercised. Others are simply an
application of the Justinian precept, embodied in the Civil Code, to act with justice, give everyone
his due, and observe honesty and good faith toward one’s fellowmen. Such is the notice of
requirement in Art 282-283. The consequence of the failure either of the employer or the
employee to live up to this precept is to make him liable in damages, not to render his act
(dismissal or resignation, as the case may be) void.

In sum, we hold that in proceedings for reinstatement under Art 283, it is shown that the
termination of employment was due to an authorized cause, then the employee concerned should
not be ordered reinstated even though there is failure to comply with the 30-day notice
requirement. Instead, he must be granted separation pay and backwages from the time his
employment was terminated until it is determined that the termination of employment is for a
just cause because the failure to hear him before he is dismissed renders the termination of his
employment without effect.

Puno, Dissenting

We must immediately set Wenphil in its proper perspective as it is a very exceptional case. Its
doctrine must be limited to its distinct facts. In Wenphil, it was clearly established that the
employee had a violent temper, caused trouble during office hours and even defied his superiors
as they tried to pacify him. The Labor Arbiter proved that the employee was guilty of grave
misconduct and insubordination; we concluded with the rule that it would be highly prejudicial
to the interest of the employer to reinstate the employee, but the employer must indemnify the
employee the amount of P1000.00 for dismissing him without notice.
At the outset, Puno emphasized that Wenphil itself held, and repeatedly held that “the failure of
petitioner to give private respondent the benefit of hearing before he was dismissed, constitutes
an infringement of his constitutional right to due process of law and equal protection of the laws.

Before Wenphil, we protected employees with the ruling that dismissals without prior notice are
illegal and the illegally dismissed employee must be reinstated with backwages. Wenphil diluted
that rule when it held that due process is satisfied if the employee is given the opportunity to be
heard by the Labor Arbiter. It further held that an employee cannot be reinstated if it is
established in the hearing that his dismissal is for a just cause. The failure of the employer is for
a just cause. The failure of the employer to give a pre-dismissal notice is only to be penalized by
payment of an indemnity. The dilution of the rule has been abused by unscrupulous employers
who then followed the “dismiss now, pay later” strategy. This evil practice of employers was what
Puno expected the majority to address in re-examining the Wenphil doctrine. At the very least,
Puno thought the majority would restore the balance of rights between an employee and an
employer by giving back the employee’s mandatory right to notice before dismissal.