113. NATIONAL FEDERATION OF SUGAR WORKERS (NFSW) v.

ETHELWOLDO the strike-vote is manifest in the provision that "in every case," the union shall
R. OVEJERA et. al., furnish the MOLE with the results of the voting "at least seven (7) days before
G.R. No. L-59743 May 31, 1982 the intended strike, subject to the (prescribed) cooling-off period." It must be
Doctrines: 1. The foregoing provisions hardly leave any room for doubt that stressed that the requirements of cooling-off period and 7-day strike ban must
the cooling-off period in Art. 264(c) and the 7-day strike ban after the strike- both be complied with, although the labor union may take a strike vote and
vote report prescribed in Art. 264(f) were meant to be, and should be deemed, report the same within the statutory cooling-off period.
mandatory. If only the filing of the strike notice and the strike-vote report would be
2. Purposes of strike notice and strike-vote report.— In requiring a strike notice deemed mandatory, but not the waiting periods so specifically and
and a cooling-off period, the avowed intent of the law is to provide an emphatically prescribed by law, the purposes (hereafter discussed) for which
opportunity for mediation and conciliation. It thus directs the MOLE "to exert the filing of the strike notice and strike-vote report is required would not be
all efforts at mediation and conciliation to effect a voluntary settlement" during achieved, as when a strike is declared immediately after a strike notice is
the cooling-off period . As applied to the CAC-NFSW dispute regarding the served, or when — as in the instant case — the strike-vote report is filed with
13th month pay, MOLE intervention could have possibly induced CAC MOLE after the strike had actually commenced Such interpretation of the law
to provisionally give the 13th month pay in order to avert great business loss ought not and cannot be countenanced. It would indeed be self-defeating for
arising from the project strike, without prejudice to the subsequent resolution the law to imperatively require the filing on a strike notice and strike-vote
of the legal dispute by competent authorities; or mediation/conciliation could report without at the same time making the prescribed waiting periods
have convinced NFSW to at least postpone the intended strike so as to avoid mandatory.
great waste and loss to the sugar central, the sugar planters and the sugar 2. No. The intention was to grant some relief — not to all workers — but only
workers themselves, if the strike would coincide with the mining season. to the unfortunate ones not actually paid a 13th month salary or what amounts
Facts: NFSW struck against private respondent Central Azucarera de la Carlota to it, by whatever name called; but it was not envisioned that a double burden
(CAC) to compel the latter for the payment of the 13th month pay under PD would be imposed on the employer already paying his employees a 13th month
851 (13th Month Pay Law) in addition to the Christmas, milling and pay or its equivalent — whether out of pure generosity or on the basis of a
amelioration bonuses being enjoyed by CAC workers which amount to 1-½ binding agreement and, in the latter ease, regardless of the conditional
months’ salary. The strike was declared before the expiration of the 15-day character of the grant, so long as there is actual payment. Otherwise, what
cooling-off period for unfair labor practice (ULP) strikes, and the strike was was conceived to be a 13th month salary would in effect become a 14th or
staged before the lapse of seven days from the submission to MOLE of the possibly 15th month pay.
result of the strike-vote.
Petitioner contends that since the non-compliance (with PD 851) imputed to
CAC is an unfair labor practice which is an offense against the state, the
cooling-off period provided in the Labor Code would not apply, as it does not
apply to ULP strikes. It is argued that mediation or conciliation in order to
settle a criminal offense is not allowed.
Labor Arbiter Ovejera declared the strike as illegal and no pronouncement was
made as to the demand on the 13th month pay. This caused petitioner to file
an instant petition with SC.
Issue: 1.Whether the cooling off period and 7-strike ban are mandatory
2.Whether under PD 851, an employer is obliged to give its workers a 13th
month salary in addition to Christmas, milling and amelioration bonuses, the
aggregate of which exceeds the 13th month pay.
Held: 1. YES. When the law says "the labor union may strike" should the
dispute "remain unsettled until the lapse of the requisite number of days
(cooling-off period) from the filing of the notice," the unmistakable implication
is that the union may not strike before the lapse of the cooling-off period.
Similarly, the mandatory character of the 7-day strike ban after the report on
114. PhilTread Workers Union, et al. v. Confesor, et al.
G.R. No. 117169 March 12, 1997
Doctrines:
Facts: Petitioner PTWU filed a notice of strike on grounds of unfair labor
practice, more specifically union busting and violation of CBA. On the other
hand, private respondent Philtread Tire and Rubber Corporation filed a notice
of lockout. It also filed a petition to declare illegal the work slowdowns staged
by the petitioner Union. Both cases were then consolidated. Several
conciliation meetings were conducted but the parties failed to settle their
dispute.
At some time, the National Labor Relations Commission declared the
slowdowns illegal. Thereafter, private respondent corporation requested the
Secretary of Labor to assume jurisdiction over the labor dispute. Secretary
Confesor then issued an order, which, among other things, certified the
dispute for compulsory arbitration. Petitioners filed a motion for
reconsideration of the order but the same was denied for lack of merit.
Petitioners questioned the constitutionality of Article 263 (g) of the Labor Code
on the ground that the Secretary of Labor’s intervention violates the workers’
constitutional right to strike, and alleged that he acted with grave abuse of
discretion in issuing the order since his power to certify a dispute for
compulsory arbitration is strictly restricted to cases involving industries that
are indispensable to national interest. The tire industry has long ceased to be
a government protected industry and, moreover, Philtread Tire and Rubber
Corporation is not indispensable to the national interest. The strike in Philtread
will not adversely affect the supply of tires in the market and the supply of
imported tires is more than sufficient to meet the market requirements.
Issues: 1. Whether or not Article 263 (g) of the Labor Code is unconstitutional;
and
2. Whether or not public respondent acted with grave abuse of discretion in
issuing the questioned order.
Held: 1. No. On the issue of the constitutionality of Article 263 (g) of the Labor
Code, the same had already been resolved in Union of Filipino Employees
vs. Nestle Philippines, Inc., to wit:
In the case at bar, no law has ever been passed by Congress expressly
repealing Articles 263 and 264 of the Labor Code. Neither may the 1987
Constitution be considered to have impliedly repealed the said Articles
considering that there is no showing that said articles are inconsistent with the
said Constitution. Moreover, no court has ever declared that the said articles
are inconsistent with the 1987 Constitution.
On the contrary, the continued validity and operation of Articles 263 and 264
of the Labor Code has been recognized by no less than the Congress of the
Philippines when the latter enacted into law R.A. 6715, otherwise known as
Herrera law, Section 27 of which amended paragraphs (g) and (l) of Article
263 of the Labor Code.
Article 263 (g) of the Labor Code does not interfere with the workers’ right to
strike but merely regulates it, when in the exercise of such right, national
interests will be affected. The rights granted by the Constitution are not
absolute. They are still subject to control and limitation to ensure that they are
not exercised arbitrarily. The interests of both the employers and employees
are intended to be protected and not one of them is given undue
preference. The assumption of the Secretary of Labor of jurisdiction is in the
nature of police power measure. This is done for the promotion of the common
good considering that a prolonged strike or lockout can be inimical to the
national economy. The Secretary of Labor acts to maintain industrial peace.
As articulated in International Pharmaceuticals, Inc. vs. Secretary of Labor, it
is fundamental that a statute is to be read in a manner that would breathe life
into it, rather than defeat it.
2. No. Grave abuse of discretion implies capricious and whimsical exercise of
judgment. The respondent company is indispensable to national interest
considering that the tire industry has already been liberalized. Philtread
supplies 22% of the tire products in the country. As observed by the Secretary
of Labor, “the Company is one of the tire manufacturers in the country
employing more or less 700 workers. Any work disruption thereat, as a result
of a labor dispute will certainly prejudice the employment and livelihood of its
workers and their dependents. Furthermore, the labor dispute may lead to the
possible closure of the Company and loss of employment to hundreds of its
workers. This will definitely aggravate the already worsening unemployment
situation in the country and discourage foreign and domestic investors from
further investing in the country.”
115. University of the Immaculate Conception vs Sec of Labor
GR 151379
Doctrines: 1. As an exception to the rule, payroll reinstatement must rest on
special circumstances that render actual reinstatement impracticable or
otherwise not conducive to attaining the purposes of the law.
2. When, in his opinion, there exists a labor dispute causing or likely to cause
a strike or lockout in an industry indispensable to the national interest, the
Secretary of Labor and Employment may assume jurisdiction over the dispute
and decide it or certify the same to the Commission for compulsory arbitration.
Such assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in the
assumption or certification order. If one has already taken place at the time
of assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout.
Facts: This case stemmed from the collective bargaining negotiations between
petitioner University of Immaculate Concepcion, Inc. (UNIVERSITY) and
respondent The UIC Teaching and Non- Teaching Personnel and Employees
Union (UNION). The UNION, as the certified bargaining
agent of all rank and file employees of the UNIVERSITY, submitted its
collective bargaining proposals to the latter on February 16, 1994. However,
one item was left unresolved and this was the inclusion or exclusion of some
positions in the scope of the bargaining unit.
The UNION it filed a notice of strike on the grounds of bargaining deadlock
and ULP. During the thirty (30) day cooling-off period, two union members
were dismissed by petitioner. Consequently, the UNION went on strike.
On January 23, 1995, the then Secretary of Labor, Ma. Nieves R. Confessor,
issued an Order assuming jurisdiction over the labor dispute.
On March 10, 1995, the UNION filed another notice of strike, this time citing
as a reason the UNIVERSITY’s termination of the individual respondents. The
UNION alleged that the UNIVERSITY’s act of terminating the individual
respondents is in violation of the Order of the Secretary of Labor.
On March 28, 1995, the Secretary of Labor issued another Order reiterating
the directives contained in the January 23, 1995 Order. Hence, the
UNIVERSITY was directed to reinstate the individual respondents under the
same terms and conditions prevailing prior to the labor dispute.
The UNIVERSITY filed a MR. In the Order dated August 18, 1995, then Acting
Secretary Jose S. Brilliantes denied the MR, but modified the two previous
Orders by adding:
Anent the Union’s Motion, we find that superseding circumstances would
not warrant the physical reinstatement of the twelve (12) terminated
employees.
Hence, they are hereby ordered placed under payroll reinstatement until the
validity of their termination is finally resolved.
Issue: WON payroll reinstatement, instead of actual reinstatement, is proper.
Held: Yes. With respect to the Secretary’s Order allowing payroll reinstatement
instead of actual reinstatement for the individual respondents herein, an
amendment to the previous Orders issued by her office, the same is usually
not allowed. Article 263(g) of the Labor Code aforementioned states that all
workers must immediately return to work and all employers
must readmit all of them under the same terms and conditions prevailing
before the strike or lockout. The phrase “under the same terms and
conditions” makes it clear that the norm is actual reinstatement. This is
consistent with the idea that any work stoppage or slowdown in that
particular industry can be detrimental to the national interest.
In ordering payroll reinstatement in lieu of actual reinstatement, then Acting
Secretary of Labor Jose S. Brillantes said:
Anent the Union’s Motion, we find that superseding circumstances would not
warrant the physical reinstatement of the twelve (12) terminated employees.
Hence, they are hereby ordered placed under payroll reinstatement until the
validity of their termination is finally resolved.
As an exception to the rule, payroll reinstatement must rest on special
circumstances that render actual reinstatement impracticable or otherwise not
conducive to attaining the purposes of the law.
The “superseding circumstances” mentioned by the Acting Secretary of Labor
no doubt refer to the final decision of the panel of arbitrators as to the
confidential nature of the positions of the twelve private respondents, thereby
rendering their actual and physical reinstatement impracticable and more
likely to exacerbate the situation. The payroll reinstatement in lieu of actual
reinstatement ordered in these cases, therefore, appears justified as an
exception to the rule until the validity of their termination is finally resolved.
This Court sees no grave abuse of discretion on the part of the Acting
Secretary of Labor in ordering the same. Furthermore, the issue has not been
raised by any party in this case.
Petition denied.

116. TRANS-ASIA SHIPPING LINES, INC. - UNLICENSED CREWS EMPLOYEES
UNION – ASSOCIATED LABOR UNIONS (TASLI-ALU) et. al. v. CA
G.R. No. 145428 July 7, 2004
Doctrines: 1. Case law recognizes the employer's right to transfer or assign
employees from one area of operation to another. This right, however, is not
absolute but subject to limitations imposed by law. Article 263 (g) of the Labor
Code constitutes one such limitation provided by law.
2. When a labor dispute has in fact occurred and a general injunction has been
issued restraining the commission of disruptive acts, management
prerogatives must always be exercised consistently with the statutory
objective.
3. "Under the same terms and conditions prevailing prior to the strike." The
order simply means that the employees should be returned to their ship
assignments as before they staged their strike.
Facts: Petitioner TASLI-ALU is a labor union of the respondent's rank-and-file
employees, while petitioner TASLI-APSOTEU is a labor union of its supervisory
employees. The individual petitioners are members of these two unions and
the respondent's employees.
On July 6 and 7, 1999, the two unions filed separate notices of strike with the
National Conciliation and Mediation Board, Regional Branch VII (NCMB-RB VII)
against the respondent on the ground of unfair labor practice. Acting thereon
and to avert any work stoppage, then Secretary of Labor Bienvenido E.
Laguesma intervened and issued the Order dated July 20, 1999 certifying the
labor dispute to the NLRC for compulsory arbitration pursuant to Article 263(g)
of the Labor Code and enjoining any strike or lock-out. Further, the parties
were directed to cease and desist from committing any act that would
exacerbate the situation.
Despite the aforesaid order, the petitioners went on strike on July 23, 1999,
paralyzing the respondent's operations. The Secretary of Labor was thus
constrained to issue the Order dated July 23, 1999 directing all striking workers
"to return to work within twelve (12) hours from receipt of this Order and for
the Company to accept them back under the same terms and conditions
prevailing before the strike."4
On even date, twenty-one (21) of the striking workers, including the individual
petitioners, were dismissed from employment by the respondent for alleged
violation of the "cease-and-desist" directive contained in the Order of July 20,
1999 by waging an illegal strike. The petitioners, through their respective
officers, manifested their willingness to comply with the "return-to-work"
order, provided the twenty-one (21) employees would also be allowed to
report back for work. They demanded that the respondent issue "embarkation
orders" to the positions they held prior to the strike before they lift the pickets
and barricades. The respondent refused, claiming that the assignment of an
employee to a post is purely a management prerogative
The bone of contention between the petitioners, on the one hand, and the
respondent, on the other, hinged on the proper interpretation of the phrase
"for the company to accept them back under the same terms and conditions
prevailing before the strike." The terminated workers asserted that said phrase
must be construed to mean that they be reinstated to their former
assignments. The respondent posited that it refers only to their salary grades,
rank and seniority, but cannot encompass the usurpation of management's
prerogative to determine where its employees are to be assigned nor to
determine their job assignments.
Issue: Whether the phrase "for the company to accept them back under the
same terms and conditions prevailing before the strike." Encompasses
management's prerogative to determine where its employees are to be
assigned nor to determine their job assignments.
Held: Yes. The case of Metrolab Industries, Inc. v. Roldan-Confesor is
particularly instructive. In that case, the Secretary of Labor, pursuant to Article
263 (g) of the Labor Code, assumed jurisdiction over the labor dispute at Metro
Drug, Inc. Pending resolution of said dispute, the company laid-off ninety-four
(94) of its rank-and-file employees invoking the exercise of management
prerogative. The Secretary of Labor declared the layoff illegal and ordered the
company to reinstate the employees. The Court upheld said order of the
Secretary of Labor as it quoted the assailed resolution therein, viz.:
... But it may nevertheless be appropriate to mention here that one of the
substantive evils which Article 263 (g) of the Labor Code seeks to curb is the
exacerbation of a labor dispute to the further detriment of the national
interest. When a labor dispute has in fact occurred and a general injunction
has been issued restraining the commission of disruptive acts, management
prerogatives must always be exercised consistently with the statutory
objective.
Likewise apropos is the case of University of Sto. Tomas v. NLRCvwhere the
Secretary of Labor, pursuant to Article 263 (g) of the Labor Code, directed the
University to "readmit all its faculty members, including the sixteen (16) union
officials, under the same terms and conditions prevailing prior to the present
dispute." Instead of fully complying therewith, the University gave some of the
teachers "substantially equivalent academic assignments without loss in rank,
pay or privilege." The Court ruled therein that the grant of substantially
equivalent academic assignments could not be sustained because it could not
be considered a reinstatement under the same terms and conditions prevailing
before the strike.

In the same manner, the respondent cannot rightfully exercise its

management's prerogative to determine where its employees are to be
assigned or to determine their job assignments in view of the explicit directive
contained in the Orders dated July 23, 1999 and July 27, 1999 of the Secretary
of Labor to accept the striking workers back "under the same terms and
conditions prevailing prior to the strike." The order simply means that the
employees should be returned to their ship assignments as before they staged
their strike. To reiterate, Article 263 (g) of the Labor Code constitutes an
exception to the management prerogative of hiring, firing, transfer, demotion
and promotion of employees.21 And to the extent that Article 263 (g) calls for
the admission of all workers under the same terms and conditions prevailing
before the strike, the respondent is restricted from exercising its generally
unbounded right to transfer or reassign its employees.The respondent is
mandated, under the said order, to issue embarkation orders to the employees
to enable them to report to their ship assignments in compliance with the
Order of the Secretary of Labor.
117.PHILIPPINE LONG DISTANCE TELEPHONE CO. INC., v. MANGGAGAWA
NG
KOMUNIKASYON SA PILIPINAS and the COURT OF APPEALS,
G.R. No. 162783/ July 14, 2005
Doctrines: 1. The phrase "all striking or locked out employees" and
"readmit all workers" does not distinguish or qualify and emphatically is a
catch all embracing enumeration of who should be returned to work. "Where
the law does not distinguish, courts should not distinguish (Recaña v. Court of
Appeals, 349 SCRA 24 [2001] )."
2. ubi lex non distinguit nec nos distinguere debemos. Where the law does
not distinguish, courts should not distinguish.
Facts: Petitioner Philippine Long Distance Telephone Co., Inc. (PLDT) is a
domestic corporation engaged in the telecommunications business. Private
respondent Manggagawa ng Komunikasyon sa Pilipinas (MKP) is a labor union
of rank and file employees in PLDT. The members of respondent union learned
that a redundancy program would
be implemented by the petitioner. Thereupon it filed a Notice of Strike with
the National Conciliation and Mediation Board (NCMB) on 04 November 2002.
The Notice fundamentally contained the following:
UNFAIR LABOR PRACTICES, to wit:
1. PLDT’s abolition of the Provisioning Support Division, in violation of the duty
to bargain collectively with MKP in good faith.
2. PLDT’s unreasonable refusal to honor its commitment before this Honorable
Office that it will provide MKP its comprehensive plan/s with respect to
personnel downsizing/reorganization and closure of exchanges. Such refusal
violates its duty to bargain collectively with MKP in good faith.
3. PLDT’s continued hiring of “contractual”, “temporary”, “project” and
“casual” employees for regular jobs performed by union members, resulting in
the decimation of the union membership and in the denial of the right to self-
organization to the concerned employees.
4. PLDT’s gross violation of the legal and CBA provisions on overtime work
andcompensation.
5. PLDT’s gross violation of the CBA provisions on promotions and job grade
re-evaluation or reclassification.
On 11 November 2002, another Notice of Strike was filed by the private
respondent,
which contained the following: UNFAIR LABOR PRACTICES, to wit: PLDT’s
alleged
restructuring of its GMM Operation Services. A number of conciliation
meetings, conducted by the NCMB, National Capital Region, were held
between the parties. However, these efforts proved futile.On 23 December
2002, the private respondent staged a strike. On 31 December 2002,
three hundred eighty three (383) union members were terminated from
service pursuant
to PLDT’s redundancy program. On 02 January 2003, the Secretary, Patricia
Sto. Tomas, issued an Order[4] in NCMB- NCR-NS-11-405-02 and NCMB-NCR-
NS-11-412-02. Portions of the Order are reproduced hereunder:
xxx Accordingly, the strike staged by the Union is hereby enjoined. All striking
worker sare hereby directed to return to work within twenty four (24) hours
from receipt of this Order, except those who were terminated due to
redundancy. The employer is hereby enjoined to accept the striking workers
under the same terms and conditions prevailing prior to the strike. The parties
are likewise directed to cease and desist from committing any act that might
worsen the situation. Xxx
Issue: WHETHER THE SUBJECT ORDERS OF THE SECRETARY OF THE DOLE
EXCLUDING FROM THE RETURN-TO-WORK ORDER THE WORKERS
DISMISSED DUE TO THE REDUNDANCY PROGRAM OF PETITIONER, ARE
VALID OR NOT.
Held: The phrase "all striking or locked out employees" and
"readmit all workers" does not distinguish or qualify and emphatically is a
catch all embracing enumeration of who should be returned to work. "Where
the law does not distinguish, courts should not distinguish (Recaña v. Court of
Appeals, 349 SCRA 24 [2001] )."
Article 263(g) of the Labor Code is very clear that once a strike is certified to
the National Labor Relations Commission (NLRC) for compulsory arbitration, it
is the direct mandate of the law that an employer should readmit all striking
workers under the same terms and conditions prevailing before the strike.
. . . Assumption of jurisdiction over a labor dispute, or as in this case the
certification of the same to the NLRC for compulsory arbitration, always co-
exists with an order for workers to return to work immediately and for
employers to readmit all workers under the same terms and conditions
prevailing before the strike or lockout. Time and again, this Court has held
that when an official bypasses the law on the asserted ground of attaining a
laudable objective, the same will not be maintained if the
intendment or purpose of the law would be defeated.
One last piece. Records would show that the strike occurred on 23 December
2002. Article 263(g) directs that the employer must readmit all workers under
the same terms and conditions prevailing before the strike. Since the strike
was held on the aforementioned date, then the condition prevailing before it,
which was the condition present on 22 December 2002, must be maintained.
Undoubtedly, on 22 December 2002, the members of the private respondent
who were dismissed due to alleged redundancy were still employed by the
petitioner and holding their respective positions. This is the status quo that
must be maintained.
123. STANDARD ELECTRIC MANUFACTURING CORPORATION vs. STANDARD
ELECTRIC EMPLOYEES UNION-NAFLU- KMU and ROGELIO JAVIER
DOCTRINES
Abandonment is a matter of intention and cannot lightly be inferred or legally
presumed from certain equivocal acts. To constitute as such, two requisites
must concur:
First, the employee must have failed to report for work or must have been
absent without valid or justifiable reason; and
Second, there must have been a clear intention on the part of the employee
to sever the employer-employee relationship as manifested by some overt
acts, with the second element being the more determinative factor.
Abandonment as a just ground for dismissal requires clear, willful, deliberate,
and unjustified refusal of the employee to resume his employment. Mere
absence or failure to report for work, even after notice to return, is not
tantamount to abandonment.
FACTS
Rogelio Javier was employed by the Standard Electric, Production Department,
as radial spot machine operator. Javier was a member of the Standard Electric
Employees Union-NAFLU (Union). Javier failed to report for work and failed to
notify the SEMC of the reason for his absences. He was arrested and detained
for the charge of rape. Javier informed the SEMC of such fact and requested
for it to defer the implementation of its intention to dismiss him. SEMC denied
Javier’s request and issued a Memorandum terminating his employment for
(a) having been (AWOL) for more than fifteen days; and (b) for committing
rape. RTC issued an Order9 granting Javier’s demurrer to evidence and ordered
his release from jail. Shortly thereafter, Javier reported for work, but the SEMC
refused to accept him back. A grievance meeting between the Union, Javier
and the SEMC was held, but SEMC refused to re-admit Javier prompting the
Union and Javier to file a Complaint10 for illegal dismissal against the SEMC
before the NLRC. He averred that since the reason for his detention for rape
was non-existent, the termination of his employment was illegal. For its part,
the SEMC averred that Javier’s prolonged absences caused irreparable
damages to its orderly operation; he had to be replaced so that the continuity
and flow of production would not be jeopardized.
Labor Arbiter rendered judgment ordering the dismissal of the complaint, as
the complaint was within the exclusive jurisdiction of the Voluntary Arbitrators
or Panel of Arbitrators. On appeal, the NLRC reversed and ruled that the latter
had jurisdiction over the complaint; it thus ordered the remand of the case to
the Labor Arbiter for resolution on the merits. Labor Arbiter rendered judgment
ordering the dismissal of the complaint but SEMC was ordered to pay
separation pay to the complainant. NLRC affirmed the Labor Arbiter’s ruling.
When the NLRC denied the motion for reconsideration of the said decision,
Javier and the Union filed a petition for certiorari with the CA which reversed
the findings of the Labor Arbiter and the NLRC.
ISSUE
WON there is a valid termination of employment?
RULING
NO. With respondent Javier’s acquittal, the cause of his dismissal from his
employment turned out to be non-existent. A distinction, however, should be
made between a dismissal without cause and a dismissal for a false or non-
existent cause. In the former, it is the intention of the employer to dismiss his
employee for no cause whatsoever. In the latter case, the employer does not
intend to dismiss the employee but for a specific cause which turns out to be
false or non-existent.
Respondent Javier’s absence cannot be deemed as an abandonment of his
work. Moreover, respondent Javier’s acquittal for rape makes it more
compelling to view the illegality of his dismissal.
Further, we cannot subscribe to the petitioner’s contention that the due
process requirement relative to the dismissal of respondent Javier was duly
complied with when he was allowed to explain his side during the grievance
machinery conferences. Indeed, in the case at bar, the petitioner did not
conduct any investigation whatsoever prior to his termination, despite being
informed of respondent Javier’s predicament by the latter’s siblings, his Union
and his counsel. The meetings held pursuant to the grievance machinery
provisions of the collective bargaining agreement were only done after his
dismissal had already taken effect. Clearly, well-meaning these conferences
might be, they cannot cure an otherwise unlawful termination.
Finally, in line with the rulings of this Court in Magtoto and Pedroso on the
matter of backwages, respondent Javier is not entitled to any salary during
the period of his detention. His entitlement to full backwages commenced from
the time the petitioner refused his reinstatement. In the instant case, when
respondent Javier was freed on May 24, 1996 by virtue of the judgment of
acquittal dated May 17, 1996, he immediately proceeded to the petitioner but
was not accepted back to work; hence, the reckoning point for the grant of
backwages started therefrom.
124. CHRISTOPHER MAÑEBO, vs. NATIONAL LABOR RELATIONS
COMMISSION and TRITRAN and/or MICHAEL TRINIDAD
DOCTRINE
Article 282 of the Labor Code provides:
Art. 282. Termination by Employer — An employer may terminate an
employment for any of the following causes:
(a) Serious misconduct or wilful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
(emphasis supplied).
Thus, in Gold City Integrated Port Services, Inc. vs. NLRC, 17
we ruled:
Wilful disobedience of the employer's lawful orders, as a just cause for the
dismissal of an employee, envisages the concurrence of at least two (2)
requisites: the employee's assailed conduct must have been wilful or
intentional, the wilfulness being characterized by a "wrongful and perverse
attitude"; and the other violated must have been reasonable, lawful, made
known to the employee and must pertain to the duties which he has been
engaged to discharge.
It is settled that pursuant to Paragraph (b), Article 277 of the Labor Code and
Sections 2 to 6, Rule XIV, Book V of the Rules Implementing the Labor Code:
[T]he employer is required to furnish an employee who is to be dismissed two
(2) written notices before such termination. The first is the notice to apprise
the employee of the particular acts or omissions for which his dismissal is
sought. This may be loosely considered as the proper charge. The second is
the notice informing the employee of the employer's to dismiss him. This
decision, however, must come only after the employee is given a reasonable
period from receipt of the first notice within which to answer the charge, an
ample opportunity to be heard and defend himself with the assistance of his
representative, if he so desires. This is in consonance with the express
provisions of law on the protection to labor and the broader dictates of
procedural due process. Non-compliance therewith is fatal because these
requirements are conditions sine qua non before dismissal may be validly
affected. 22
"Ample opportunity" connotes every kind of assistance that management must
accord the employee to enable him to prepare adequately for his defense
including legal representation.
FACTS
Petitioner Christopher Mañebo was hired as a bus conductor by RJM Bus Co.
before it became TRITRAN Bus Co. He was then appointed as the bus
company's comptroller in Biñan, Laguna. He was active in union activities,
occupying the position of Chief Shop Steward and representing union
members in the grievance machinery committee hearings However, he was
dismissed for serious misconduct committed against the firm's operation
manager. Aggrieved, petitioner appealed the matter to the grievance
machinery committee, which resolved to remove from petitioner's file the
record of termination. It directed petitioner to report to the Personnel Office
the following day for assignment. It appears, however, that the company
president was dissatisfied with resolution. While a scheduled Grievance
Committee Hearing was about to start, petitioner was advised by the Personnel
Manager to see that same day the company president at his Caloocan office.
Apparently, the meeting was arranged by the Personnel Manager, in order that
the bus company president may be given an opportunity to finally approve the
latter's reinstatement. Petitioner failed to follow instructions considering that
he was then attending, as representative of the union workers, a grievance
machinery committee hearing. Personnel Manager issued a memorandum
requiring Mañebo to explain why he should not be dealt with administratively,
but was still subsequently dismissed on the ground of willful disobedience of
the order of the company president and serious misconduct committed against
the bus company's operations manager.
Petitioner then filed in NLRC, a complaint for unfair labor practice, illegal
suspension, and illegal dismissal; the Labor Arbiter rendered a decision
dismissing the petitioner's complaint. On appeal to the NLRC, said decision
was affirmed.
ISSUE
WON the termination was lawful.
RULING
NO. The directive for the petitioner to go to Caloocan City to see the company
president is neither a reasonable order nor one connected with his duties. Even
a wilful disobedience thereof cannot be a valid ground for dismissal. In the
instant case, the private respondents have not even endeavored to show that
the directive or order pertained to the regular duties of the petitioner as a
comptroller. The purpose therefor was not revealed to the petitioner. It was,
as wittingly or unwittingly revealed in the Supplemental Position Paper, to
provide "an opportunity for the company president who apparently objects to
the Grievance Committee['s] and the Personnel Department's separate
resolutions ordering petitioner's reinstatement," 19 to "finally approve" the
petitioner's reinstatement, which was, of course, unnecessary since the
reinstatement was not subject to such final approval. The primary aim then of
the directive was wholly unrelated to the petitioner's duties. It was to extract
a whimsical and oppressive condition. It was, as well, unreasonable and
extremely difficult to comply with since the petitioner was attending a
conference of the Grievance Committee held fifty kilometers away from where
he was ordered to go. It was clearly a peremptory summons meant to put the
petitioner "in his proper place." Disobedience thereof, even if wilful, cannot be
a ground for the dismissal of the petitioner. In any event, the petitioner's
disobedience can by no means be characterized as wilful. And even if the
directive were reasonable and connected with the petitioner's duties, his
dismissal by TRITRAN was void for lack of due process. While it may be true
that he was allowed to explain, no hearing was actually conducted.
125. ESTRELLITA AGUILAR, petitioner, vs. THE HONORABLE NATIONAL
LABOR RELATIONS COMMISSION (NLRC), First Division, WACK WACK GOLF
AND COUNTRY CLUB and COL. PERFECTO V. EUGENIO, respondents.
DOCTRINE
Article 282 of the Labor Code provides in part:
Art. 282. Termination by Employer. — An employer may terminate an
employment for any of the following causes: a) Serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or
representative in connection with his work.
Willful disobedience of the employer's lawful orders, as a just cause for the
dismissal of an employee, envisages the concurrence of at least two (2)
requisites: the employee's assailed conduct must have been willful or
intentional, the willfulness being characterized by a "wrongful and perverse
attitude." The order violated must have been reasonable, lawful, made known
to the employee and must pertain to the duties which he had been engaged
to discharge.
With regards to the award of financial assistance to petitioner, We find that
the same is not justified. Petitioner's willful disobedience of the orders of her
employer constitutes serious misconduct. As We held in the case of Del Monte
Phils., Inc. vs. NLRC, 14 "henceforth, separation pay shall be allowed as a
measure of social justice only in those instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his
moral character". Hence, the employer, CLUB, may not be required to give the
petitioner separation pay, or financial assistance, or whatever other name it is
called, on the ground of social justice.
FACTS
Wack Wack Golf and Country Club operates (2) golf courses known as the East
Course and the West Course, runs a Clubhouse with a restaurant and bar, and
maintains other sports facilities with Col. Perfecto Eugenio is its General
Manager. In the course of its operation, the CLUB employed Aguilar for (23)
years prior to her alleged "illegal dismissal". The last position she held was
that of an Accounting Clerk. Prior thereto, the CLUB had been incurring
continuous losses in its restaurant and bar operations. To remedy the
situation, the CLUB imposed a patronage fee of (P200.00) per member
pursuant to a Board Resolution which provides that CLUB members whose
restaurant and bar bills/chits do not exceed (200.00) a month are to be
charged an additional amount equivalent to the difference between their
bill/chits and the patronage fee of P200.00. And CLUB members who do not
avail of the restaurant and bar services will be charged P200.00 a month.
On several occasions, petitioner, without the knowledge and consent of the
CLUB management, ordered and consumed food from the CLUB
restaurant/bar and charged them against the patronage fees of a few CLUB
members. The CLUB, upon discovery of petitioner's misconduct, sent a written
notice of charges against her, but she refused to receive it. The CLUB then
conducted an investigation and was reminded that she was not allowed under
CLUB rules to sign restaurant and bar bills/chits chargeable to the patronage
fees of CLUB members. Nonetheless, petitioner continued to do so, which led
to her dismissal for violation of House Rule (A), Section 15 (a); House Rule
(B), Section 7, as amended; and for serious misconduct and breach of trust.
This prompted the petitioner to file a Complaint for Illegal Dismissal against
the CLUB and Col. Eugenio before the NLRC-NCR, of which the Labor Arbiter
affirmed that there was indeed an illegal dismissal. However, the NLRC
reversed.
ISSUE
WON petitioner violated any company rules and regulations when she signed
the chits for and in behalf of CLUB members.
RULING
YES. The above-quoted rules are applicable to petitioner. There is no showing
that petitioner was unaware of said rules and regulations. All she invokes is
that the same is not applicable to her being merely an employee of the CLUB.
It is undeniable that petitioner is not a member of the CLUB. Being a non-
member, she is prohibited from signing chits for and in behalf of club members
notwithstanding any authorization given by them. Furthermore, under Rule
(B), Section 7, only the spouses and dependents are allowed to sign chits for
themselves and their guests for food and beverage and other facilities.
However, in case of green fees, only the legitimate spouse of the member can
sign chits for his/her guests but the same must be expressly authorized in
writing by the member. Not being any of the persons mentioned in said Rule,
petitioner cannot sign chits even if authorized by CLUB members.
By petitioner's own admission, she continued signing the restaurant and Bar
Grill bills or chits chargeable to the patronage fee of the CLUB members
Cepeda and Gonzales even after she had been investigated for such
misconduct and after she was already made aware that non-members like her
cannot sign chits for and in behalf of the CLUB members. We agree with the
NLRC that the acts of herein complainant is defiantly disobeying the rules of
the company even after investigation, shows her cavalier attitude which leaves
the management no other recourse but to terminate her services. To condone
such conduct will certainly erode the discipline that an employer would
uniformly enforce so that it can expect compliance with said rules and
regulations by its other employees. Otherwise the rules necessary and proper
for the operation of its business would be rendered ineffectual. 12 An employer
cannot legally be compelled to continue with the employment of a person who
admittedly was guilty of misfeasance or malfeasance towards his employer,
and whose continuance in the service of the latter is patently inimical to his
interests.
126. GOLDEN THREAD KNITTING INDUSTRIES, INC., GEORGE NG and
WILFREDO BICO, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, GEORGE MACASPAC, MARY ANN MACASPAC, ROMULO
ALBASIN, MELCHOR CACHUCHA, GILBERT RIVERA and FLORA
BALBINO, respondents.
DOCTRINE
An established rule of long standing is that to effect a completely valid and
unassailable dismissal, an employer must show not only sufficient ground
therefor but must also prove that procedural due process has been observed
by giving the employee two (2) notices: one, of the intention to dismiss,
indicating therein his acts or omissions complained against, and two, notice of
the decision to dismiss.
The characterization of an employee's services as no longer necessary or
sustainable, and therefore properly terminable, is an exercise of business
judgment on the part of the employer. The wisdom or soundness of such
characterization or decision is not subject to discretionary review on the part
of the Labor Arbiter nor the NLRC provided, of course, that violation of law or
arbitrary or malicious action is not shown. It is not enough for a company to
merely declare that it has become overmanned. It must produce adequate
proof that such is the actual situation in order to justify the dismissal of the
affected employees for redundancy.
Furthermore, we have laid down the principle that in selecting the employees
to be dismissed, a fair and reasonable criteria must be used, such as but not
limited to: (a) less preferred status (e.g., temporary employee), (b) efficiency,
and (c) seniority. 20 The records disclose that no criterion whatsoever was
adopted by petitioners in dismissing Rivera and Macaspac. Another procedural
lapse committed by petitioners is the lack of written notice to the DOLE
required under Art. 283 of the Labor Code. 21 The purpose of such notice is to
ascertain the verity of the cause of termination of employment.
The utterances by an employee of obscene, insulting or offensive words
against a superior justify his dismissal for gross misconduct. The scornful
attitude is also destructive of his co-employees' morale. 27 However, the
dismissal will not be upheld where it appears, as in this case, that the
employee's act of disrespect was provoked by the employer.
For abandonment to exist, it is essential that (1) the employee must have
failed to report for work or must have been absent without valid or justifiable
reason; and, (2) there must have been a clear intention to sever the employer-
employee relationship manifested by some overt acts. Dismissal is the ultimate
penalty that can be meted to an employee. It must therefore be based on a
clear and not on an ambiguous or ambivalent ground. The right to terminate
should be utilized with extreme caution because its immediate effect is to put
an end to an employee's present means of livelihood while its distant effect,
upon a subsequent finding of illegal dismissal, is just as pernicious to the
employer who will most likely be required to reinstate the subject employee
and grant him full back wages and other benefits. 36
FACTS
4 separate complaints were filed against Golden Thread for unfair labor
practice: illegal dismissal, non-payment of overtime pay, premium pay, holiday
pay and illegal rotation by several employees, reduction of working days,
fabrication/frame-up of union member and union busting, withholding of
wages. The complainants organized a labor union. Several key employees of
the union were either barred from entering the work premises, or was
dismissed, or was suspended from work. The complainants thus considered
the acts as retaliatory measures of petitioners on account of the former having
established a union. Petitioners on the other hand, contended that they
resorted to rotation of work, which affected practically all employees, because
of the low demand for their towels and shirts. Petitioners also avowed that
they validly dismissed (5) of the complainants.
Labor Arbiter partly ruled in favor of the complainants. On the issue of unfair
labor practice, he opined that the reduction of working days and suspension
or dismissal of union officers or members were not shown to have been done
in retaliation to the complainants' act of organizing a union. NLRC ruled
otherwise, stating that some employees were illegally dismissed so that
petitioners were directed to immediately reinstate them with full back wages
and other benefits.
ISSUE
WON NLRC committed grave abuse of discretion in ordering petitioners to
reinstate private respondents (Security guards, Artists, Sewer, Printer)
RULING
NO to all. From our assessment of the records, we find that petitioners
exercised their authority to dismiss without due regard to the pertinent
exacting provisions of the Labor Code.
1. With regard to 2 security guards We find that petitioners were unable to
substantiate the charge of serious misconduct against them. The incident
report of the (2) security guards was on its face categorical on the culpability
of subject respondents, yet it is perplexing that the report was not utilized as
supporting evidence in the criminal proceedings. As previously stated, the
incident report was addressed to the Manager of the company. Considering
that it was the Manager who instructed petitioner Bico to lodge the criminal
complaint, and if the report was submitted after the incident, then there was
no reason for it not to form part of the evidence in the criminal proceedings.
As it is, we can gather from the narration of petitioner Bico that the person
who revealed to him the identities of the culprits was not one of the security
guards but witness who supplied the supporting affidavit. These circumstances
inevitably lead us to the conclusion that the incident report was merely
concocted by petitioners in view of the filing of the labor cases against them.
The narration of a witness regarding the alleged slashing incident is obviously Anyway, no material damage was demonstrated to have been suffered by
another fabrication. Indeed, it is hard to believe that the guards destroyed petitioners on account thereof and a time card shows the actual number of
company properties in Mejia's full view who did not appear to be with them in hours and days in a certain period performed by an employee such that the
the controversy. Often, misdeeds are committed either in the presence of an loss thereof will surely pose a problem. But not so in the case of Balbino since
ally, if nobody is around to blow the whistle, or when darkness has adequately only her work performed on 31 July and 3 August was unpaid.
shrouded the surroundings. Moreover, it has not been shown that the guards 4. Insofar as Melchor Cachucha (printer) is concerned, petitioners insist that
were such feckless individuals who would resort to destruction of company he abandoned his work and refused to return despite notice sent through his
properties in total disregard of its dire consequences. They were likewise wife, but disputing the charge, Cachucha claimed that he was prevented by
denied procedural due process. As correctly observed by respondent NLRC, the company security guards from reporting for work. The NLRC is correct for
petitioners failed to afford them the benefit of hearing and investigation before sustaining Cachucha that he did not abandon his work considering that he
termination. It is also our observation that neither did petitioners comply with seasonably filed a complaint for illegal dismissal against petitioners on and
the requirement on notices. Macaspac and Albasin were summarily eased out positively disavowed any notice to return to work allegedly sent to him by
of employment when they were refused entry into the company premises three petitioners. The circumstance that Cachucha lost no time in filing a complaint
(3) days after allegedly slashing the bundles of towels. for illegal dismissal against petitioners is incompatible with the charge of
2. As regards the two artists, petitioner claim that they were constrained to abandonment and confirms in fact that he was refused entry into the company
trim down the number of their artists in the Design Section from five (5) to premises. Petitioners' allegation that they informed Cachucha's wife that
two (2) is a consequence of the drastic reduction of their volume of work, and Cachucha must report to work immediately is unsubstantiated and self-
both were among the three (3) employees dismissed for redundancy. The serving. The alleged notification through the memorandum has not been
artists however alleged that they were terminated due to insufficiency of shown to have been received by Cachucha. On the other hand, the affidavit
income on the part of the company. In the instant case, we question of Wales stating that he relayed to Cachucha the directive to return to work
petitioners' exercise of management prerogative because it was not shown which the latter turned down for lack of interest does not inspire belief. If
that Rivera and Macaspac's positions were indeed unnecessary, much less was Wales' narrations were true, then Cachucha would have simply-abided by the
petitioners' claim supported by any evidence. directive and moved for the dismissal of his complaint which was filed earlier.
3. As regards to one of the knitters, petitioner submitted a certification stating After all, it was precisely reinstatement that he was seeking.
that on that day, he explained to Flora Balbino the company memorandum on
her 3-day suspension on the ground that she repeatedly slowed down her
production. He told her to sign the memorandum which according to Bico,
obviously infuriated her thus prompting her to hurl invectives at him in the
presence of many persons inside his office. Balbino's story is completely
different. According to her, she was dismissed outright by Bico on the same
date she asked for a memorandum on her suspension. She was however silent
on the other charge that she stole the time card in her name.
It may be recalled that Balbino was suspended because she allegedly
continually slowed down in her production. Yet, as found by the NLRC,
petitioners failed to show that there was an established quota for production
as a point of reference to determine whether an employee was performing
below or above the quota to warrant the charge. What surfaces from our
assessment of the evidence of petitioners is that Balbino hurled invectives at
petitioner Bico because she was provoked by the baseless suspension imposed
on her. The penalty of dismissal must be commensurate with the act, conduct
or omission imputed to the employee. Under the circumstances, we believe
that dismissal was a harsh penalty; (1) week suspension would have sufficed.
Balbino might have taken the time card in her name but the Court considers
this act as a mere emotional outburst and an offshoot of her suspension.
127. JARDINE DAVIES, INC., vs.NATIONAL LABOR RELATIONS
COMMISSION, FOURTH DIVISION, CEBU CITY, and SALVADOR
SALUTIN, respondents.
DOCTRINE
For abandonment to constitute a valid cause for termination of employment,
there must be a deliberate unjustified refusal of the employee to resume his
employment. This refusal must be clearly shown. Mere absence is not
sufficient; it must be accompanied by overt acts pointing to the fact that the
employee simply does not want to work anymore.
The order of immediate reinstatement pending appeal, in cases of illegal
dismissal is an ancillary relief under R.A. 6715 granted to a dismissed employee
to cushion him and his family against the impact of economic dislocation or
abrupt loss of earnings. If the employee chooses not to report for work
pending resolution of the case appeal, he foregoes such a temporary relief and
is not paid of his salary. The final determination of the rights and obligations
respectively of the parties is the ultimate and final resolution of this
Commission.
FACTS
Salutin was employed by Jardine Davies, Inc, as a demonstrator/agronomist
to provide services relating to, and to give advice on, the promotion and use
of JDI's pesticides and other products. Salutin filed a complaint against
petitioner JDI for illegal dismissal, and the Labor Arbiter in favor of Salutin.
JDI appealed the case to the NLRC, and also reinstated Salutin, "on payroll
only". NLRC dismissed JDI's appeal for lack of merit.
JDI filed its first petition for certiorari with this Court, assailing the decision of
respondent Commission. In our resolution, the petition was dismissed for
failure to comply with this Court's Circular on forum-shopping. Its subsequent
motion for reconsideration was itself denied.
At the time when the above narrated events were still unfolding, some material
facts occurred beginning with JDI's appeal to the NLRC. Shortly after the
reinstatement of Salutin "on payroll only", JDI sent a letter, to Salutin directing
him to report for work to their Bacolod Branch Manager. Salutin, as directed
reported at around 9:20 a.m. He did not stay long, however, since after fifteen
minutes or so, he left and was reported not to have thereafter returned for
work. JDI forthwith stopped further payment of salary to Salutin.
On 17 October 1991, JDI filed a "Manisfestation and Motion" with the
respondent Commission stating, that he be considered as having abandoned
his work considering his continuous absence, Salutin opposed the motion,
claiming that he was forced to leave in haste because he was then suffering
from a serious ailment. He submitted a medical certificate to support his claim.
Commission denied JDI's "Manifestation & Motion", prescinding from its receipt
of an information that Salutin was employed elsewhere, JDI filed an ex
parte motion, to set for hearing the aforestated "Manifestation and
Motion." 6 Salutin, on his part, also filed a motion praying that JDI be ordered
to release his withheld salary,7 claiming that he had reported for work when
he recovered from his ailment.
Commission denied the motion.
ISSUE:
WON Salutin, who was then on payroll reinstatement, not guilty of
abandonment when his failure to report for work was because he was also
working for another entity? Correlatively, did respondent Commission not
gravely abuse its discretion when it did not take into consideration such other
employment?
RULING
NO.
The records show that at the time JDI filed its Manifestation and Motion, the
sole basis of its prayer for a declaration that Salutin abandoned his work was
his alleged unauthorized absences from the date he was notified to report for
work. A shift to a new focus took place when, JDI, at its request, received a
letter-certification issued by the Officer-in-Charge of King's Enterprises of Iloilo
that Salutin was employed by Monsato Philippines, Incas Aggressive Crop
Technician. When JDI filed its first petition it also raised, as an added argument
on the alleged abandonment of work by Salutin, the fact that he was gainfully
employed elsewhere. 13 Considering that this matter was thus already taken
up by the petitioner in its first petition for certiorari, which this Court dismissed
with finality, the petitioner should really now be barred from invoking anew
that issue in this present (second) petition.
Be that as it may, the same fate of dismissal is still inevitable. Although this
Court is not a trier of facts, it may still wade through the records of a case if
only to prevent any possible misgiving in its ultimate disposition. 14 The
petitioner's evidence to establish Salutin's supposed abandonment of work is
the certification of employment issued by King's Enterprises at the request of
herein petitioner to the effect that Salutin had indeed been employed by
Monsato Philippines, Inc. Is this enough?
Abandonment of position is a matter of intention expressed in clearly certain
and unequivocal acts. In this instance, however, certain uncontroverted facts
show just exactly the opposite. Hence, Salutin did report, as directed, but that
he could not stay long because he was ailing at that time; he, although
perhaps belatedly made, did seek medical consultation, at the Corazon Locsin
Montelibano Memorial Regional Hospital, for "peptic ulcer"; and, he did, in
fact, manifest his desire to assume his work with the petitioner.
This Court's resolution denying the petition, became final and executory.
Respondent Salutin's interim employment, stressed by the petitioner, did not
stain the picture at all.
128. JACKSON BUILDING CONDOMINIUM CORPORATION vs. NLRC
G.R. No. 111515 July 14, 1995
Doctrine:
1. For abandonment to be a valid ground for dismissal, two requisites must be
compresent: a. the intention by an employee to abandon b. an overt act from
which it may be inferred that the employee had no more intention to resume
his work.
2. an employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges without loss
of seniority rights and other privileges and to his full back wages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed
from the time his compensation was withheld from him up to the time of his
actual reinstatement.
Facts:
On November 22, 1989, private respondent was employed as a janitor by
petitioner with a monthly salary of P2,340.00 or a daily wage of P90.00. He
then filed a 45-day leave of absence from November 15, 1991 to December
29, 1991 to undergo an appendectomy, which would necessitate complete bed
rest for about thirty days from the date of operation as shown by his medical
certificate. This was granted by petitioner.
On January 3, 1992, private respondent informed petitioner Razul Requesto,
president of petitioner corporation, that he was physically fit to assume his
work. However, petitioners refused to accept him back contending that he had
abandoned his work.
On March 24, 1992, private respondent filed with the Labor Arbiter a complaint
against petitioners for illegal dismissal, underpayment of wages and non-
payment of thirteenth-month pay and service-incentive leave pay.
On July 12, 1992, petitioners submitted their position paper wherein they
alleged that private respondent was not dismissed but was merely advised to
rest for health reasons until he could procure a medical certificate attesting
that he was fit to work. They further alleged that private respondent failed to
return to his workplace or to submit the required medical certificate.
On October 30, 1992, the Labor Arbiter rendered a decision in favor of private
respondent.
Petitioners then appealed to NLRC, alleging that the Labor Arbiter committed
grave abuse of discretion. However, NLRC affirmed in toto the decision of the
Labor Arbiter. A subsequent motion for reconsideration was denied.
Issue:
1. Whether private respondent abandoned his work.
2. Whether petitioners are liable for the payment of private respondent's back
wages, differential pay, thirteenth-month pay and service-incentive leave pay
for 1991.
Ruling:
1. No. For abandonment to be a valid ground for dismissal, two requisites must
be compresent: the intention by an employee to abandon coupled with an
overt act from which it may be inferred that the employee had no more
intention to resume his work (People's Security, Inc. v. National Labor
Relations Commission, 226 SCRA 146 [1993]).
In the instant case, the said requisites are not present.
As found by the Labor Arbiter, private respondent's physician advised him to
rest for 30 days before reporting back for work in order to recuperate. Private
respondent heeded this advise and even exceeded the number of days
recommended by his doctor for his recuperation. In fact, he reported back for
work 50 days after his operation. This would clearly show that private
respondent was ready to assume his responsibilities considering that he had
fully recovered from the operation. Furthermore, the filing of a complaint for
illegal dismissal by private respondent is inconsistent with the allegation of
petitioners that he had abandoned his job. Surely, an employee's posture will
be illogical if he abandons his work and then immediately files an action for
his reinstatement (Remerco Garments Manufacturing v. Minister of Labor and
Employment, 135 SCRA 167 [1985]).
2. Yes. Section 31 of R.A. No. 6715 which amended Article 279 of the Labor
Code of the Philippines provides that "an employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights
and other privileges without loss of seniority rights and other privileges and to
his full back wages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement."
The award of back wages by NLRC to private respondent was predicated on
the ground that he was illegally dismissed and not on his failure to report for
work (Llosa-Tan v. Silahis International Hotel, 181 SCRA 738 [1990]).
Private respondent is likewise entitled to the thirteenth-month pay.
Presidential Decree No. 851, as amended by Memorandum Order No. 28,
provides that employees are entitled to the thirteenth-month pay benefit
regardless of their designation and irrespective of the method by which their
wages are paid.
129. ARC-MEN FOOD INDUSTRIES, INC. vs. NLRC & FABIAN
ALCOMENDRAS
G.R. No. 113721 May 7, 1997
Doctrine:
While the burden of refuting a complaint for illegal dismissal is upon the
employer, fair play as well requires that, where the employer proffers
substantial evidence of the fact that it had not, in the first place, terminated
the employee but simply laid him off due to valid reasons, neither the Labor
Arbiter nor the NLRC may simply ignore such evidence on the pretext that the
employee would not have filed the complaint for illegal dismissal if he had not
indeed been dismissed.
Facts:
Private respondent alleges that he was a regular employee of the petitioner
firm as a company driver from September 1985 until he was unlawfully
terminated on January 23, 1990. That as a company driver he was required to
render his services to both the petitioner's food and construction business;
that since his employment, he has never enjoyed the minimum wage, ECOLA
and service incentive leave pay.
It was disclosed that petitioner acted arbitrarily, unjustifiably and without any
reason at all, [and] he was terminated from his employment contrary to the
provision of Article 283 of the Labor Code, as amended by B.P. 130. Private
responden] has been in the employ for four years and four months of which
he has been rendering faithful services and following the rules and regulations
of the company and in fact should have been given more benefits that . . .[are]
necessary instead of terminating his employment.
Rising to their defense petitioner belied the allegations of the private
respondent. They claimed that private respondent was not illegally dismissed
from his employment but it was he who has abandoned his work.
Petitioner allege[d] that the company is an export-oriented processing
company engaged in the manufacture, production and exportation of banana
chips and is not engaged in construction business contrary to the allegation of
the private respondent. The company is a relatively newly opened corporation
and is beset with recurring problems and imperfections in its plant equipments
and machineries which requires [sic] modifications and alterations that in the
process has [sic] resulted in frequent temporary shutdowns which necessarily
affected its operations and profitability. One additional problem is its total
dependence on independent suppliers for its raw materials of bananas.
It was posited that under these circumstances, it is therefore not surprising
that most employees are seasonal workers and are paid on daily wage basis
and likewise also evident that there are temporary lay-offs due to lack of work.
Anent the issue of termination, petitioner disclosed that as per Summary of
Plant Operations the last time the plant operated in 1989 was December 1,
1989. From December 2, 1989 up to February 25, 1990, the plant was not in
full operation and employees directly connected with the plant including herein
complainant were advised of the shutdown and were told not to report for
work. To prove that . . . [private respondent] was not terminated on January
23, 1990 is the fact that on January 29, 1990, he secured and was given a
cash advance of P700.00 as shown by the Temporary Cash Advance Slip . . .
[I]t is inconceivable for the company to give cash advance "against salary
deductions" if he was already terminated on January 23, 1990 or six days
before . . . [private respondent] was given the said cash advance.
Issue:
Whether Private respondent abandoned his work and was not illegally
dismissed?
Ruling:
Alcomendras clearly abandoned his work when he refused to report back to
work. Of course, he will always claim that he did not abandon his work because
he filed a complaint before this Honorable Commission. Certainly, one can see
through his ploy and the mercenary motive for his action. He had nothing to
lose but everything to gain. Firstly, if he succeeds in misleading this Honorable
Commission into believing his claim he would stand to gain monetary
advantage in the form of separation pay to which he is definitely not entitled.
Secondly, it was clearly his intention to use this present complaint as a
leverage hoping that respondents will enter into a settlement with him and
thereby in the process he would gain the upper hand by demanding that the
complaint which he knew or ought to know respondent is filing against him
and a former employee with [the] Office of the Provincial Prosecutor of Davao
del Norte will be dismissed as part of the settlement. In point of fact the
complaint that respondent filed against him with the Office of the Provincial
Prosecutor of Davao del Norte is not, as he claimed, "in retaliation to the
institution of this case". Nothing can be farther from the truth. For one thing,
it was a management decision arrived at even before management was aware
of the complaint filed in this case by the complainant. . . . The truth of the
matter is that the decision to file a criminal complaint against Alcomendras
and one other person was arrived at long before the company came to know
of the complaint of Alcomendras with the NLRC. What delayed the filing of this
complaint with the Office of the Provincial Fiscal is the mechanical preparation
of the affidavits to support the complaint.
130. PCIB vs NLRC
G.R. No. 114920 August 23, 1995
Doctrine:
Facts:
The instant petition involves the dismissal of private respondent Eduardo
Maturan, a bank teller of petitioner bank's General Santos City branch, whose
services were terminated on July 18, 1991 allegedly for incurring a cash
shortage in the amount of P10,000.00, for failure to return the P8,000.00 cash
withdrawal of a client, Rebecca Salud, and for extending unauthorized
accommodations to clients. A complaint for illegal dismissal was filed before
the NLRC Sub-Regional Arbitration Branch No. XI in General Santos City which
thereafter rendered a decision,1dated May 7, 1992, declaring herein petitioner
guilty of illegal dismissal and ordering the reinstatement of respondent
Maturan to his former position without loss of seniority rights and privileges,
and with payment of his back wages, allowances and other benefits from the
time of his illegal dismissal until promulgation of the decision, moral and
exemplary damages, and attorney's fees.
Issue:
Whether Private respondent was illegally dismissed?
Ruling: The aforecited case of Allied Banking Corporation vs. Castro, et al.,
which upheld the dismissal of the bank teller due to numerous infractions
committed by him, is not applicable to the present case of herein respondent
Maturan. In that case, the bank tellers there were found to have incurred
several shortages on various dates (around 11 to 12 incidents were reported)
within a span of 5 to 7 months; there were 2 to 4 reported incidents of
overages incurred within a period of 4 months; they allowed encashment of
checks over the counter without verification of the drawer's signature and
without the approval of authorized officers; and they did not comply with
instruction of their superiors to report to Central Bank Cash Units. These
offenses justified the dismissal of the employees concerned.
On the contrary, respondent Maturan was involved in a single incident of cash
shortage in the amount of P10,000.00. By petitioner's own admission, the last
shortage incurred by respondent prior to this incident was way back in
January, 1988. As correctly found by the labor arbiter, respondent is not a
habitual violator, which undesirable category would have warranted his
dismissal. This is aside from the similar findings made by the labor arbiter and
respondent NLRC that the dismissal was caused by respondent's active
involvement in union activities. Consequently, it is justifiedly believed that the
dismissal of the private respondent is not warranted under the circumstances.
Furthermore, in the aforesaid Allied Banking Corporation case, there was a
provision in the collective bargaining agreement which granted a yearly
allowance for tellers to cover shortages which they may incur during the year.
Thus, the NLRC held that this, in effect, is a recognition that among the
hazards of tellers is the incidence of shortages and overages up to a certain
limit. This very provision, therefore, is a clear indication that such errors are
understandingly viewed and forgiven provided they do not go beyond the
allowable limit.
The ruling therein supports the labor arbiter's observation that "(i)n (t)ellering,
(r)egardless of how long one has been in the trade, and how careful one is,
there is no guarantee that one can never incur cash shortage or overage. No
teller for that matter can testify that in his stint as such, everyday his actual
cash on hand always tallies with the figure appearing in the teller's validating
machine tape as the 'should be cash on hand'. Cash shortages and overages
are but ordinary and normal banking activities." As a matter of fact, it is not
disputed that there were other shortages or overages incurred by the other
tellers in petitioner's General Santos City branch at about the same time that
this particular infraction of private respondent occurred.
NLRC to the effect that private respondent's dismissal was by reason of or
related to his union activities were not categorically refuted by petitioner.
Neither were the allegations of harassment and intimidation committed on
private respondent by bank officers Go and Cubar ever denied.
To conclude, we hold that there is grossly insufficient evidence to warrant the
dismissal of private respondent on the ground of loss of trust and confidence.
We are convinced, however, that the filing of the complaint for illegal dismissal
and the protracted proceedings with confrontational exchanges therein
between the parties have now evidently strained their erstwhile harmonious
relationship. The reinstatement of private respondent would, in our view, no
longer be beneficial to either party. An award of back salaries and severance
pay in lieu of reinstatement would thus appear to be in order.

We must add, however, that these occurrences are subject to certain

limitations, depending on the amount involved as well as the number and the
gravity of the infractions. As earlier explained, we do not find the infraction
committed by private respondent to be so grave as to warrant his dismissal.
We are not even inclined to conform with the penalty imposed by respondent
NLRC, that is, the non-payment of back wages from the time of respondent's
dismissal up to the rendition of the decision of the labor arbiter (or from July
18, 1991 to May 7, 1992), considering that he has already paid, through salary
deductions, the amount of P10,000.00. Moreover, this mode of payment was
even recommended for approval by no less than the Manager, Mr. Cubar and,
as the records reveal, it can be safely assumed that the same was approved
because the amount was fully paid by respondent on March 28, 1990. The
imposition of a penalty is, therefore, unwarranted.
To be a valid ground for dismissal, loss of trust and confidence must be based
on a willful breach of trust. And, as realistically stressed by the Solicitor
General, unless based on a ground provided by law and supported by
substantial evidence, dismissal will be disallowed, for what is at stake is not
only the employee's position, but also his means of livelihood. Considering that
private respondent was acting in good faith, his dismissal would run counter
to such established doctrinal rulings.
Finally, there is the issue as to the long delay in the investigation of the incident
and in effecting the dismissal of respondent only on July 18, 1991, or two
years after the commission of the infraction on August 16, 1989. It is quite
interesting and significant that the findings of the labor arbiter and respondent
131. Concorde Hotel v CA It applies only to employees who occupy positions of trust and confidence or
G.R. No. 144089. August 9, 2001 to situations where the employees are routinely charged with the care
and custody of the employer’s money or property. It must be shown that there
Doctrine: is reasonable ground to believe that the employee is responsible for the
Loss of confidence applies only to cases involving employees who occupy misconduct or infraction and that the nature of his participation rendered him
positions of trust and confidence, or to those situations where the employee unworthy of the trust and confidence demanded by his position. Loss of
is routinely charged with the care and custody of the employer’s money or confidence must be based on a willful breach of trust, founded in clearly
property. It must be shown, or the employer must have reasonable ground to establishedfacts. As assistant cook, respondent is charged with the care
believe, if not entertain, the moral conviction that the employee concerned is of food preparation in the coffee shop and responsible for the custody of food
responsible for the misconduct or infraction and that the nature of his supplies and must see to it that there is sufficient stock in the kitchen. He
participation therein rendered him absolutely unworthy of the trust and should not permit food or other materials to be taken out without the
confidence demanded by his position. To be a valid ground for dismissal, the necessary order slip or authorization, as there is hotel property. Thus, the
loss of confidence must be based on a willful breach of trust and founded on nature of his position as assistant cook is one charged with trust and
clearly established or proven facts. confidence. In this case the burden of proof establishing the charge wasn’t
overcome and there was no due process as the 2 notice requirement wasn’t
Facts: met and he was never given an opportunity to explain his side.
Petitioner engaged in a mass hiring through a manpower service agency.
Respondent was one of those hired as assistant cook. Petitioner discovered
some missing and unaccounted stock so an inquiry was conducted. It was
discovered that employees were bringing home inventory. An in house
investigation was held and they were asked to explain such. The agency was
given a list of those involved. They were called and asked to explain in writing
that same day. When nobody complied petitioner and the agency issued
separate notices of termination. Later on respondent was included and also
terminated sc he filed a complaint for illegal dismissal. He argues that he was
made to testify against those charged but he refused so he was terminated
for allowing the thefts to take place. He argues that it couldn’t be true because
hecomplained to the police that he was threatened to keep quiet by the
employees stealing. Another reason for his dismissal was his failure to meet
minimum company standards. The LA dismissed the complaint but the NLRC
and CA ruled that the dismissal was without cause. The hotelargues that it
was the agency that dismissed him and not the hotel.

ISSUE:
Whether there was illegal dismissal by the hotel.

HELD:
The SC ruled that there was illegal dismissal. An employee may be terminated
for loss of trust and confidence but this can’t be used to justify every dismissal
so the Court came up with guidelines for the application of the doctrine: loss
of confidence should not be simulated, it shout not be used as a subterfuge
for causes which are improper illegal or unjustified, should not be arbitrarily
asserted in the face of overwhelming evidence to the contrary and must be
genuine, not a mere after thought to justify earlier or action taken in bad faith.
132. Etcuban v Sulpicio Lines
G.R. NO. 148410 - January 17, 2005
Doctrine:
Loss of confidence as a just cause for termination of employment is premised
from the fact that an employee concerned holds a position of trust and
confidence. This situation holds where a person is entrusted with confidence
on delicate matters, such as the custody, handling, or care and protection of
the employer's property. But, in order to constitute a just cause for dismissal,
the act complained of must be "work-related" such as would show the
employee concerned to be unfit to continue working for the employer.
Facts:
The petitioner was employed by the respondent on January 30, 1978 until his
dismissal on June 10, 1994 for loss of trust and confidence. At the time of his
dismissal, the petitioner was the Chief Purser of the M/V Surigao Princess
receiving a monthly salary of P5,000.00. As the Chief Purser, the petitioner
handled the funds of the vessel and was the custodian of all the passage
tickets and bills of lading. It was his responsibility, among other things, to
issue passage tickets and to receive payments from the customers of the
respondent, as well as to issue the corresponding official receipts therefor. He
was also tasked to disburse the salaries of the crewmen of the vessel.
Sometime in the last week of May 1994, the newly designated jefe de viaje7 of
the M/V Surigao Princess, in a surprise examination, discovered that several
yellow passenger's duplicate original8 of yet to be sold or unissued passage
tickets already contained the amount of P88.00 - the fare for adult passengers
for the Cagayan de Oro to Jagna, Bohol route. He noticed that three other
original copies which made up the full set did not bear the same impression,
although they were supposed to have been prepared at the same time. Acting
on what appeared to be a strong evidence of short-changing the company,
the jefe deviaje dug deeper on what he uncovered. As expected, he found
inordinate amount of ticket issuances for children at half the fare of P44.00 in
Voyage 434 of the vessel. When word of the anomaly reached the respondent,
it waited for the petitioner to return to Cebu City in the hope of shedding more
light on the matter.
On May 30, 1994, shortly after disembarking from the M/V Surigao Princess at
the port of Cebu, the petitioner received a memorandum of even date from
Personnel Officer Artemio relative to the irregularity in the "alleged
involvement in anomaly of ticket issuance," instructing him to forthwith report
to the main office and to explain in writing why no disciplinary action should
be meted on him or to submit himself to an investigation. The memorandum
warned the petitioner that his failure to comply with the aforementioned
instructions would be construed as a waiver of his right to be heard. It also
informed the petitioner of his immediate preventive suspension until further
notice. The petitioner, however, refused to acknowledge receipt of the
memorandum which was personally served on him, prompting the respondent
to mail the same, and which the petitioner received days later.
On June 9, 1994, the respondent received its summons. 17 Short of pre-
empting its administrative investigation, coupled with the petitioner's obstinate
refusal to submit to further investigation, the respondent decided to terminate
the petitioner's employment for loss of trust and confidence in connection with
passage tickets.
Issue:
Whether petitioner is validly dismissed?
Ruling:
Yes. Law and jurisprudence have long recognized the right of employers to
dismiss employees by reason of loss of trust and confidence.43 More so, in
the case of supervisors or personnel occupying positions of responsibility, loss
of trust justifies termination. Loss of confidence as a just cause for termination
of employment is premised from the fact that an employee concerned holds a
position of trust and confidence. This situation holds where a person is
entrusted with confidence on delicate matters, such as the custody, handling,
or care and protection of the employer's property. But, in order to constitute
a just cause for dismissal, the act complained of must be "work-related" such
as would show the employee concerned to be unfit to continue working for
the employer.
The degree of proof required in labor cases is not as stringent as in other types
of cases.46 It must be noted, however, that recent decisions of this Court have
distinguished the treatment of managerial employees from that of rank-and-
file personnel, insofar as the application of the doctrine of loss of trust and
confidence is concerned. Thus, with respect to rank-and-file personnel, loss of
trust and confidence as ground for valid dismissal requires proof of
involvement in the alleged events in question, and that mere uncorroborated
assertions and accusations by the employer will not be sufficient. But as
regards a managerial employee, the mere existence of a basis for believing
that such employee has breached the trust of his employer would suffice for
his dismissal. Hence, in the case of managerial employees, proof beyond
reasonable doubt is not required, it being sufficient that there is some basis
for such loss of confidence, such as when the employer has reasonable ground
to believe that the employee concerned is responsible for the purported
misconduct, and the nature of his participation therein renders him unworthy
of the trust and confidence demanded by his position.47
In the present case, the petitioner is not an ordinary rank-and-file employee.
The petitioner's work is of such nature as to require a substantial amount of
trust and confidence on the part of the employer. Being the Chief Purser, he
occupied a highly sensitive and critical position and may thus be dismissed on
the ground of loss of trust and confidence. One of the many duties of the
petitioner included the preparation and filling up passage tickets, and
indicating the amounts therein before being given to the passengers. More
importantly, he handled the personnel funds of the MV Surigao Princess.
Clearly, the petitioner's position involves a high degree of responsibility
requiring trust and confidence. The position carried with it the duty to observe
proper company procedures in the fulfillment of his job, as it relates closely to
the financial interests of the company.

The requirement that there be some basis or reasonable ground to believe

that the employee is responsible for the misconduct was sufficiently met in the
case at bar. As Chief Purser, the petitioner cannot feign ignorance on the
irregularity as he had custody of the tickets when the anomaly was discovered.
It would not be amiss to suppose that the petitioner, who would benefit
directly or indirectly from the fruits of such fraudulent scheme, was a party to
such irregularity. That there were other pursers who could have done the
irregularity is of no moment. It bears stressing that the petitioner was the
Chief Purser who was tasked to directly supervise each and every purser under
him. While, indeed, it was not proved that he was the one who made the
irregular entries on the tickets, the fact that he did not lift a finger at all to
determine who it was is a sad reflection of his job. In fact, even if the petitioner
had no actual and direct participation in the alleged anomalies, his failure to
detect any anomaly in the passage tickets amounts to gross negligence and
incompetence, which are, likewise, justifiable grounds for his dismissal. Be that
as it may, to our mind, it is no longer necessary to prove the petitioner's direct
participation in the irregularity, for what is material is that his actuations were
more than sufficient to sow in his employer the seed of mistrust and loss of
confidence.

Neither are we impressed with the petitioner's claim that he was singled out,
or that his dismissal was a ploy to obviate payment of his retirement benefits.
There is nothing in the records to show that beyond making these allegations,
the petitioner did nary of anything to substantiate the same.
133. WORLDWIDE PAPER MILLS VS NLRC intervention of R. Brusola, Union President he was only suspended for one (1)
month. A promissory note to this effect was executed by Sabuya and
DOCTRINE: While it is true that compassion and human consideration should witnessed by R. Brusola, stressing among others to improve his attendance in
guide the disposition of cases involving termination of employment since it 1989; once he exceeds the VL & SL granted by the company, he accepts to be
affects one’s source or means of livelihood, it should not be overlooked that terminated; and the next time he is declared AWOL he accepts the DA of
the benefits accorded to labor do not include compelling an employer to retain termination. To summarize it all, no improvement up to this date. He sought
the services of an employee who has been shown to be a gross liability to the a leave once again but was disapproved for lying about his reason to avail the
employer. The law in protecting the rights of the employees authorizes neither sick leave.
oppression nor self-destruction of the employer. It should be made clear that
when the law tilts the scale of justice in favor of labor, it is but a recognition Petitioner issued a memorandum to private respondent requiring him to
of the inherent economic inequality between labor and management. The explain within twenty-four (24) hours from receipt why no disciplinary action
intent is to balance the scale of justice; to put the two parties on relatively should be imposed upon him for his excessive absences without official leave.
equal positions. There may be cases where the circumstances warrant favoring
labor over the interest of management but never should the scale be so titled In compliance therewith, private respondent gave his answer,
if the result is an injustice to the employer. Justicia nemini neganda est. thus:chanrob1es virtual 1aw library

FACTS: ‘SIR, ETO LANG PO ANG MASASAGOT KO SA AKING EXPLANATION SA LOOB

NG SIYAM NA TAON PAGIGING MANGAGAWA NG KOMPANYANG ITO
"Private respondent was employed by petitioner as a packer on July 8, 1982 GINANAP KO NG TAMA AT NAAAYON SA REGULASYON ANG AKING
until his services were terminated on September 28, 1991. PAGTATRABAHO. MALIBAN SA DI INAASAHANG MAHIGPIT NA DAHILAN SA
SANHI NG MINSANG PAGPALYA KO SA PAGPASOK.’
It appears that private respondent incurred excessive unexcused absences
from 1986 to 1989, as summarized in a memorandum dated January 22, 1990 Petitioner terminated the employment of private Respondent. Thus, on
prepared and signed by the personnel/administrative officer of petitioner, September 30, 1991, the latter filed a complaint for illegal dismissal, praying
thus:chanrob1es virtual 1aw library for reinstatement and payment of backwages. The case was docketed as NLRC
NCR Case No 00-09-05668-91 and it was raffled to Labor Arbiter Manuel R.
‘In 1986, he incurred a total of 46 days without pay including AWOL but Caday.
excluding 30 days VL & SL given to him. The following year, 1987, he LA: Dismissal was Illegal.
accumulated about 17. 5 days leave without pay including AWOL after
exhausting the 30 days VL/SL with pay. Followed by 1988, in which after NLRC: Reversed LA
exhausting the 30 days leave with pay, he again accumulated 60 days leave
without pay, 12 days of which AWOL. Finally, 1989 he acquired a total of 26 Hence, this petition.
days leave without pay including 3 days AWOL after exhausting the 30 days
leave with pay. (Please refer to attached breakdown of absences.) ISSUE:
WoN, Respondent was validly terminated.
Disciplined for unofficial leaves, in 1986, he was admonished, (1) month. In
1987, he was admonished, warned sternly, and suspended for one (1) week. Ruling:
While in 1988 for AWOL he was admonished, warned sternly and suspended YES.
for one (1) month. On Nov. 11, he was warned sternly for excessive leave
without pay. Finally in 1989, he got an admonition and consequently warned Article 282 of the Labor Code provides the grounds for which an employer may
sternly for AWOL. validly dismiss an employee, among which is gross and habitual neglect by the
employee of his duties.
Due to having incurred 12 days AWOL in 1988, he was supposed to be
terminated based on our rule, but due to his asking reconsideration and In the case at bench, it is undisputed that respondent Edwin P. Sabuya had
within a span of almost six (6) years been repeatedly admonished, warned
and suspended for incurring excessive unauthorized absences. Worse, he was
not at home but was out driving a pedicab to earn extra income when the
company nurse visited his residence after he filed an application for sick leave.
Such conduct of respondents Edwin P. Sabuya undoubtedly constitutes gross
and habitual neglect of duties.

In Philippines Geothermal, Inc. v. NLRC 10 , the Court stated thus:j

"While it is true that compassion and human consideration should guide the
disposition of cases involving termination of employment since it affects one’s
source or means of livelihood, it should not be overlooked that the benefits
accorded to labor do not include compelling an employer to retain the services
of an employee who has been shown to be a gross liability to the employer.
The law in protecting the rights of the employees authorizes neither
oppression nor self-destruction of the employer. It should be made clear that
when the law tilts the scale of justice in favor of labor, it is but a recognition
of the inherent economic inequality between labor and management. The
intent is to balance the scale of justice; to put the two parties on relatively
equal positions. There may be cases where the circumstances warrant favoring
labor over the interest of management but never should the scale be so titled
if the result is an injustice to the employer. Justicia nemini neganda est”

The dismissal of private respondent Edwin P. Sabuya is, under the

circumstances of this case, declared valid and justified. Petitioners are hereby
ordered, for humanitarian reasons, to pay respondent Edwin P. Sabuya
separation pay equivalent to one-half (1/2) month salary for every year of
service and to indemnify him the amount of Five Thousand Pesos (P5,000.00)
for failure of petitioners to fully comply with the requirements of procedural
due process.
134. PASTOR DIONISIO V. AUSTRIA, v. NLRC
KAPUNAN, J.:
DOCTRINES: 1. An ecclesiastical affair is one that concerns doctrine, creed,
or form or worship of the church, or the adoption and enforcement within a
religious association of needful laws and regulations for the government of the
membership, and the power of excluding from such associations those deemed
unworthy of membership.21 Based on this definition, an ecclesiastical affair
involves the relationship between the church and its members and relate to
matters of faith, religious doctrines, worship and governance of the
congregation.
2. In termination cases, the settled rule is that the burden of
proving that the termination was for a valid or authorized cause rests on the
employer. Thus, private respondents must not merely rely on the weaknesses
of petitioners evidence but must stand on the merits of their own defense.
FACTS:
Private Respondent Central Philippine Union Mission Corporation of the
Seventh-Day Adventists (hereinafter referred to as the SDA) is a religious
corporation duly organized and existing under Philippine law and is
represented in this case by the other private respondents, officers of the SDA.
Petitioner, on the other hand, was a Pastor of the SDA until 31 October 1991,
when his services were terminated.
The records show that petitioner Pastor Dionisio V. Austria worked with the
SDA for twenty eight (28) years from 1963 to 1991.2 He began his work with
the SDA on as a literature evangelist, selling literature of the SDA over the
island of Negros. From then on, petitioner worked his way up the ladder and
got promoted several times. Petitioner became the Assistant Publishing
Director in the West Visayan Mission of the SDA. In July, 1972, he was elevated
to the position of Pastor in the West Visayan Mission covering the island of
Panay, and the provinces of Romblon and Guimaras. Petitioner held the same
position up to 1988. Finally, in 1989, petitioner was promoted as District Pastor
of the Negros Mission of the SDA and was assigned at Sagay, Balintawak and
Toboso, Negros Occidental, with twelve (12) churches under his jurisdiction.
In January, 1991, petitioner was transferred to Bacolod City. He held the
position of district pastor until his services were terminated on 31 October
1991.
On various occasions from August up to October, 1991, petitioner received
several communications3from Mr. Eufronio Ibesate, the treasurer of the
Negros Mission asking him to admit accountability and responsibility for the
church tithes and offerings collected by his wife, Mrs. Thelma Austria, in his
district which amounted to P15,078.10, and to remit the same to the Negros
Mission.
In his written explanation dated 11 October 1991, 4 petitioner reasoned out
that he should not be made accountable for the unremitted collections since it
was private respondents Pastor Gideon Buhat and Mr. Eufronio Ibesate who
authorized his wife to collect the tithes and offerings since he was very sick to
do the collecting at that time.
A dispute between Pastor Rodrigo and petitioner arose from an incident in
which petitioner assisted his friend, Danny Diamada, to collect from Pastor
Rodrigo the unpaid balance for the repair of the latters motor vehicle which
he failed to pay to Diamada. Subsequently, on 29 October 1991, petitioner
received a letter of dismissal10 citing misappropriation of denominational
funds, willful breach of trust, serious misconduct, gross and habitual neglect
of duties, and commission of an offense against the person of employers duly
authorized representative, as grounds for the termination of his services.
On 15 February 1993, Labor Arbiter Cesar D. Sideo rendered a decision in
favor of petitioner
NLRC: Reversed LA.
NLRC reversed its own decision through MR of SDA citing separation of Church
and State and Dismissed the case for want of Jurisdiction.
Hence, the recourse to this Court by petitioner.
ISSUES:
1) Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide
the complaint filed by petitioner against the SDA;
2) Whether or not the termination of the services of petitioner is an
ecclesiastical affair, and, as such, involves the separation of church and state;
and
3) Whether or not such termination is valid.
RULE:
ISSUE 1: YES NLRC has Jurisdiction
ISSUE 2: NO, it does not involve separation of Church and State.
The contention of private respondents deserves scant consideration. The
principle of separation of church and state finds no application in this case.
The case at bar does not concern an ecclesiastical or purely religious affair as
to bar the State from taking cognizance of the same. An ecclesiastical affair is
one that concerns doctrine, creed, or form or worship of the church, or the
adoption and enforcement within a religious association of needful laws and
regulations for the government of the membership, and the power of excluding
from such associations those deemed unworthy of membership. 21 Based on
this definition, an ecclesiastical affair involves the relationship between the
church and its members and relate to matters of faith, religious doctrines,
worship and governance of the congregation.
The case at bar does not even remotely concern any of the abovecited
examples. While the matter at hand relates to the church and its religious
minister it does not ipso facto give the case a religious significance. Simply
stated, what is involved here is the relationship of the church as an employer
and the minister as an employee. It is purely secular and has no relation
whatsoever with the practice of faith, worship or doctrines of the church.
As pointed out by the OSG in its memorandum, the grounds invoked for establish that petitioner failed to remit the same to the Negros Mission, and
petitioners dismissal, namely: misappropriation of denominational funds, that he pocketed the amount and used it for his personal purpose.
willful breach of trust, serious misconduct, gross and habitual neglect of duties WHEREFORE, the petition for certiorari is GRANTED. The challenged
and commission of an offense against the person of his employers duly Resolution of public respondent National Labor Relations Commission,
authorize representative, are all based on Article 282 of the Labor Code which rendered on 23 January 1996, is NULLIFIED and SET ASIDE. The Decision of
enumerates the just causes for termination of employment. 22 By this alone, it the Labor Arbiter, dated 15 February 1993, is reinstated and hereby
is palpable that the reason for petitioners dismissal from the service is not AFFIRMED.
religious in nature.
With this clear mandate, the SDA cannot hide behind the mantle of protection
of the doctrine of separation of church and state to avoid its responsibilities as
an employer under the Labor Code.
ISSUE #3: NO
We turn now to the crux of the matter. In termination cases, the settled rule
is that the burden of proving that the termination was for a valid or authorized
cause rests on the employer. Thus, private respondents must not merely rely
on the weaknesses of petitioners evidence but must stand on the merits of
their own defense.
Before the services of an employee can be validly terminated, Article 277 (b)
of the Labor Code and Section 2, Rule XXIII, Book V of the Rules Implementing
the Labor Code further require the employer to furnish the employee with two
(2) written notices, to wit: (a) a written notice served on the employee
specifying the ground or grounds for termination, and giving to said employee
reasonable opportunity within which to explain his side; and, (b) a written
notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to
justify his termination.
This decision, however, must come only after the employee is given a
reasonable period from receipt of the first notice within which to answer the
charge and ample opportunity to be heard and defend himself with the
assistance of a representative, if he so desires.33 This is in consonance with
the express provision of the law on the protection to labor and the broader
dictates of procedural due process.34 Non-compliance therewith is fatal
because these requirements are conditions sine quo non before dismissal may
be validly effected.35cräläwvirtualibräry
Private respondent failed to substantially comply with the above requirements.
We cannot sustain the validity of dismissal based on the ground of breach of
trust. Private respondents allege that they have lost their confidence in
petitioner for his failure, despite demands, to remit the tithes and offerings
amounting to P15,078.10, which were collected in his district. A careful study
of the voluminous records of the case reveals that there is simply no basis for
the alleged loss of confidence and breach of trust. Settled is the rule that under
Article 282 (c) of the Labor Code, the breach of trust must be willful.
Though private respondents were able to establish that petitioner collected
and received tithes and donations several times, they were not able to
135. FELIX vs ENERTECH SYSTEMS
DOCTRINE: Falsification of time cards constitutes serious misconduct and
dishonesty or fraud, which are just causes for the termination of employment
under Art. 282(a) and (c) of the Labor Code.
FACTS:
Respondent Enertech System Industries, Incorporated is engaged in the
manufacture of boilers and tanks. Petitioner Manuel C. Felix worked as a
welder/fabricator in respondent company. On August 5, 1994, petitioner and
three other employees, namely, Dante Tunglapan, Hilario Lamog, and
Emerson Yanos, were assigned to install a smokestack at the Big J Feedmills
in Sta. Monica, Bulacan. During the entire period they were working at the Big
J Feedmills, petitioner and his companions accomplished daily time records
(DTRs). Petitioner wrote in his DTR that he had worked eight hours a day on
the basis of which his wages were computed.
The work was estimated to be completed within seven days, but it actually
took the workers until August 17, 1994, or about two weeks, before it was
finished. On that day, petitioner and his three co-employees were each given
notice by respondent, which read in part:
Reports came to our office that for the past few days you were reporting at
[the] Big J jobsite at around eleven o’clock in the morning and you were
leaving said sit at two o’clock.
We would like to inform you that said act constitutes Abandonment of Work
which is [a] violation of our Company Code on Employees Discipline that
warrants a penalty of DISMISSAL. Therefore, you are hereby given 24 hours
to explain your side on the said matter. The next day, August 18, 1994,
petitioner and his co-workers were placed under preventive suspension for
seven working days.
Finally, on November 21, 1994, respondent sent petitioner a memorandum
terminating his employment on the following grounds:
Dishonesty
Falsifying timecards
Insubordination
Holding or slowing back the work
Petitioner filed a complaint for illegal dismissal against respondent before the
Arbitration Branch of the NLRC.
Labor Arbiter: There was illegal dismissal.
NLRC: Reversed the decision of LA.
CA: Affirmed NLRC
ISSUE: WoN the dismissal was Valid.
RULE:
YES
Falsification of time cards constitutes serious misconduct and dishonesty or
fraud, which are just causes for the termination of employment under Art.
282(a) and (c) of the Labor Code which provides:
ARTICLE 282. Termination by employer. — An employer may terminate an
employment for any of the following causes:
Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
x x x
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
As to the labor arbiter’s observation that a timekeeper should have been
assigne to the Big J Feedmills, we think the Court of Appeals correctly disposed
of the same, thus:chanrob1es virtual 1aw library
Employees are hired in order to foster the employer’s business, and company
rules and regulations are part of such goal. If we adhere to the labor arbiter’s
view that a timekeeper should have been placed by private respondent or to
commission the latter’s client to act as timekeeper, it would be an additional
burden not only on the part of private respondent but also on its client. It
would be contrary to every business motto that "clients should be given utmost
satisfaction and convenience." Moreover, if every time an assignment is given
to an employee, the employer will send out someone to spy, the atmosphere
of harmonious relationship between the employer and its employees will be
beclouded, thundering forth suspicion and distrust among themselves.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED for lack of
showing that it committed a reversible SO ORDERED.
136. CATHEDRAL SCHOOL OF TECHNOLOGY, vs. NLRC

REGALADO, J.:
Private respondent Teresita Vallejera sought admission as an aspirant to the
Congregation of the Religious of Virgin Mary (RVM), upon the recommendation
of Archbishop Patrick Cronin. In order to observe the life of a religious, she
came to live with the sisters of the congregation and received free board and
lodging at the house of the nuns. During the period of her aspirancy and in
return for her accommodations, she volunteered to assist as a library aide in
the library section of the Cathedral School of Technology, an educational
institution run by the RVM sisters. In return for her work as such, she was
given a monthly allowance of P200.00.
Private respondent had a change of heart in later years and confessed to the
sisters that she was no longer interested in becoming a nun. She pleaded,
however, to be allowed to continue living with the sisters for she had no other
place to stay in, to which request the sisters acceded and, in exchange
therefor, she voluntarily continued to assist in the school library.
Respondent formally applied for and was appointed to the position of library
aide with a monthly salary of P1,171.00. It was at around this time, however,
that trouble developed. The sisters began receiving complaints' from students
and employees about private respondent's difficult personality and sour
disposition at work.
Private respondent resented the observations about her actuations and was
completely unreceptive to the advice given by her superior. She reacted
violently to petitioner's remarks and angrily offered to resign, repeatedly
saying, "OK, I will resign. I will resign." Thereafter, without waiting to be
dismissed from the meeting, she stormed out of the office in discourteous
disregard and callous defiance of authority.
On separate occasions thereafter, petitioners sent at least three persons to
talk to and convince private respondent to settle her differences with the
former. Private respondent, however, remained adamant in her refusal to
submit to authority. Sister Apolinaria sent a letter 2 formally informing private
respondent that she had a month from said date or until July 15, 1989 to look
for another job as the school had decided to accept her resignation. Private
respondent then filed a complaint for illegal deduction and underpayment of
salary, overtime pay and service incentive pay. Consequently, private
respondent amended her complaint to include illegal dismissal.
LA: There was Illegal Dismissal.
NLRC: Affirmed.
ISSUE: WoN, there was illegal dismissal.
RULE:
NO.
An evaluative review of the records of this case nonetheless supports a finding
of a just cause for termination. The reason for which private respondent's
services were terminated, namely, her unreasonable behavior and unpleasant
deportment in dealing with the people she closely works with in the course of
her employment, is analogous to the other "just causes" enumerated under
the Labor Code, as amended:
Art. 282. Termination by employer. — An employer may terminate an
employment for any of the following just 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 breach 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.
Petitioners' averments on private respondent's disagreeable character —
"quarrelsome, bossy, unreasonable and very difficult to deal with" — are
supported by the various testimonies of several co-employees and students of
the school. 12 In fact, as earlier stated, her overbearing personality caused
the chief librarian to resign. Furthermore, the complaints about her
objectionable behavior were confirmed by her reproachable actuations during
her meeting with the petitioner directress on June 2, 1989, when private
respondent, upon being advised of the need to improve her working relations
with others, obstreperously reacted and unceremoniously walked out on her
superior, and arrogantly refused to subsequently clear up matters or to
apologize therefor. To make matters worse, she ignored the persons sent by
petitioners on separate occasions to intervene in an effort to bring the matter
to a peaceful resolution. The conduct she exhibited on that occasion smacks
of sheer disrespect and defiance of authority and assumes the proportion of
serious misconduct or insubordination, any of which constitutes just cause for
dismissal from employment.
IN VIEW OF ALL THE FOREGOING, the dispositions of public respondent in its
resolution dated June 24, 1992 are hereby ANNULLED and SET ASIDE.
Petitioners are, however, ordered to INDEMNIFY private respondent in the
amount of P1,000.00 concordant with the current jurisprudential norm.
SO ORDERED.
137. ARMANDO G. YRASUEGUI, petitioners, vs.PHILIPPINE AIRLINES,
INC., respondents.
DOCTRINE: The obesity of petitioner is a ground for dismissal under Article
282(e) 44 of the Labor Code.
REYES, R.T., J.:
THIS case portrays the peculiar story of an international flight steward who
was dismissed because of his failure to adhere to the weight standards of the
airline company.
FACTS:
Petitioner Armando G. Yrasuegui was a former international flight steward of
Philippine Airlines, Inc. (PAL). He stands five feet and eight inches (5’8") with
a large body frame. The proper weight for a man of his height and body
structure is from 147 to 166 pounds, the ideal weight being 166 pounds, as
mandated by the Cabin and Crew Administration Manual1 of PAL.
The weight problem of petitioner dates back to 1984. Back then, PAL advised
him to go on an extended vacation leave from December 29, 1984 to March
4, 1985 to address his weight concerns. Apparently, petitioner failed to meet
the company’s weight standards, prompting another leave without pay from
March 5, 1985 to November 1985.
After meeting the required weight, petitioner was allowed to return to work.
But petitioner’s weight problem recurred. He again went on leave without pay
from October 17, 1988 to February 1989.
He weighed 209 pounds, 43 pounds over his ideal weight. In line with
company policy, he was removed from flight duty effective May 6, 1989 to July
3, 1989. He was formally requested to trim down to his ideal weight and report
for weight checks on several dates. He was also told that he may avail of the
services of the company physician should he wish to do so. He was advised
that his case will be evaluated on July 3, 1989. 2
Despite the lapse of a ninety-day period given him to reach his ideal weight,
petitioner remained overweight. On January 3, 1990, he was informed of the
PAL decision for him to remain grounded until such time that he satisfactorily
complies with the weight standards. Again, he was directed to report every
two weeks for weight checks.
He was formally warned that a repeated refusal to report for weight check
would be dealt with accordingly. He was given another set of weight check
dates.6 Again, petitioner ignored the directive and did not report for weight
checks. When petitioner tipped the scale on July 30, 1990, he weighed at 212
pounds. Clearly, he was still way over his ideal weight of 166 pounds.
PAL finally served petitioner a Notice of Administrative Charge for violation of
company standards on weight requirements. He was given ten (10) days from
receipt of the charge within which to file his answer and submit controverting
evidence.8
On December 7, 1992, petitioner submitted his Answer. 9 Notably, he did not
deny being overweight. What he claimed, instead, is that his violation, if any,
had already been condoned by PAL since "no action has been taken by the
company" regarding his case "since 1988." He also claimed that PAL
discriminated against him because "the company has not been fair in treating
the cabin crew members who are similarly situated."
He was formally informed by PAL that due to his inability to attain his ideal
weight, "and considering the utmost leniency" extended to him "which
spanned a period covering a total of almost five (5) years," his services were
considered terminated "effective immediately."11
His motion for reconsideration having been denied,12 petitioner filed a
complaint for illegal dismissal against PAL.
Labor Arbiter: There was illegal dismissal
NLRC: In favor of PAL.
CA: Affirmed NLRC.
Issues:
WoN, there can be a valid dismissal due to obesity (WoN, the dismissal was
valid)
RULE:
YES
I. The obesity of petitioner is a ground for dismissal under Article 282(e) 44 of
the Labor Code.
A reading of the weight standards of PAL would lead to no other conclusion
than that they constitute a continuing qualification of an employee in order to
keep the job. Tersely put, an employee may be dismissed the moment he is
unable to comply with his ideal weight as prescribed by the weight standards.
The dismissal of the employee would thus fall under Article 282(e) of the Labor
Code.
x x x [T]he standards violated in this case were not mere "orders" of the
employer; they were the "prescribed weights" that a cabin crew
must maintain in order to qualify for and keep his or her position in the
company. In other words, they were standards that establish continuing
qualifications for an employee’s position. In this sense, the failure to maintain
these standards does not fall under Article 282(a) whose express terms require
the element of willfulness in order to be a ground for dismissal. The failure to
meet the employer’s qualifying standards is in fact a ground that does not
squarely fall under grounds (a) to (d) and is therefore one that falls under
Article 282(e) – the "other causes analogous to the foregoing."
True, petitioner claims that reducing weight is costing him "a lot of
expenses."50 However, petitioner has only himself to blame. He could have
easily availed the assistance of the company physician, per the advice of
PAL.51 He chose to ignore the suggestion. In fact, he repeatedly failed to report
when required to undergo weight checks, without offering a valid explanation.
Thus, his fluctuating weight indicates absence of willpower rather than an
illness.
In fine, We hold that the obesity of petitioner, when placed in the context of
his work as flight attendant, becomes an analogous cause under Article 282(e)
of the Labor Code that justifies his dismissal from the service. His obesity may
not be unintended, but is nonetheless voluntary. As the CA correctly puts it,
"[v]oluntariness basically means that the just cause is solely attributable to the
employee without any external force influencing or controlling his actions. This
element runs through all just causes under Article 282, whether they be in the
nature of a wrongful action or omission. Gross and habitual neglect, a
recognized just cause, is considered voluntary although it lacks the element of
intent found in Article 282(a), (c), and (d)."54
not has no direct relation to its mission of transporting passengers to their
destination"; and that the weight standards "has nothing to do with
airworthiness of respondent’s airlines," must fail.
WHEREFORE, the appealed Decision of the Court of Appeals
is AFFIRMED but MODIFIED in that petitioner Armando G. Yrasuegui is
entitled to separation pay in an amount equivalent to one-half (1/2) month’s
pay for every year of service, which should include his regular allowances.
SO ORDERED.

The law leaves no room for mistake or oversight on the part of a common
carrier. Thus, it is only logical to hold that the weight standards of PAL show
its effort to comply with the exacting obligations imposed upon it by law by
virtue of being a common carrier.
The business of PAL is air transportation. As such, it has committed itself to
safely transport its passengers. In order to achieve this, it must necessarily
rely on its employees, most particularly the cabin flight deck crew who are on
board the aircraft. The weight standards of PAL should be viewed as imposing
strict norms of discipline upon its employees.
In other words, the primary objective of PAL in the imposition of the weight
standards for cabin crew is flight safety. It cannot be gainsaid that cabin
attendants must maintain agility at all times in order to inspire passenger
confidence on their ability to care for the passengers when something goes
wrong. It is not farfetched to say that airline companies, just like all common
carriers, thrive due to public confidence on their safety records. People,
especially the riding public, expect no less than that airline companies
transport their passengers to their respective destinations safely and soundly.
A lesser performance is unacceptable.
The task of a cabin crew or flight attendant is not limited to serving meals or
attending to the whims and caprices of the passengers. The most important
activity of the cabin crew is to care for the safety of passengers and the
evacuation of the aircraft when an emergency occurs. Passenger safety goes
to the core of the job of a cabin attendant. Truly, airlines need cabin
attendants who have the necessary strength to open emergency doors, the
agility to attend to passengers in cramped working conditions, and the stamina
to withstand grueling flight schedules.
On board an aircraft, the body weight and size of a cabin attendant are
important factors to consider in case of emergency. Aircrafts have constricted
cabin space, and narrow aisles and exit doors. Thus, the arguments of
respondent that "[w]hether the airline’s flight attendants are overweight or
138. FE S. SEBUGUERO vs. NLRC
Doctrine: It is now settled that where the dismissal of an employee is in fact
for a just and valid cause and is so proven to be but he is not accorded his
right to due process, i.e., he was not furnished the twin requirements of notice
and the opportunity to be heard, the dismissal shall be upheld but the
employer must be sanctioned for non-compliance with the requirements of or
for failure to observe due process. The sanction, in the nature of
indemnification or penalty, depends on the facts of each case and the gravity
of the omission committed by the employer.
Facts: The petitioners were among the thirty-eight (38) regular employees of
private respondent GTI Sportswear Corporation, a corporation engaged in the
manufacture and export of ready-to-wear garments, who were given
"temporary lay-off" notices by the latter on 22 January 1991 due to alleged
lack of work and heavy losses caused by the cancellation of orders from abroad
and by the garments embargo of 1990.
Believing that their "temporary lay-off" was a ploy to dismiss them, resorted
to because of their union activities and was in violation of their right to security
of tenure since there was no valid ground therefor, the 38 laid-off employees
filed with the Labor Arbiter's office in the National Capital Region complaints
for illegal dismissal, unfair labor practice, underpayment of wages under Wage
Orders Nos. 01 and 02, and non-payment of overtime pay and 13th month
pay.
Private respondent GTI denied the claim of illegal dismissal and asserted that
it was its prerogative to lay-off its employees temporarily for a period not
exceeding six months to prevent losses due to lack of work or job orders from
abroad, and that the lay-off affected both union and non-union members. It
justified its failure to recall the 38 laid-off employees after the lapse of six
months because of the subsequent cancellations of job orders made by its
foreign principals, a fact which was communicated to the petitioners and the
other complainants who were all offered severance pay. Twenty-two (22) of
the 38 complainants accepted the separation pay. The petitioners herein did
not. LA ruled in favor of petitioners. However, NLRC reversed the decision.
Issue: Whether or not petitioners are illegally dismissed? Yes
Whether or not there was valid retrenchment? No
Ruling: Yes, The petitioners' contention is based on a wrong premise or on a
miscomprehension of the statement of the NLRC. What the NLRC sustained
and affirmed is not redundancy, but retrenchment as a ground for termination
of employment. They are not synonymous but distinct and separate grounds.
Retrenchment, on the other hand, is used interchangeably with the term "lay-
off." It is the termination of employment initiated by the employer through no
fault of the employee's and without prejudice to the latter, resorted to by
management during periods of business recession, industrial depression, or
seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of
materials, conversion of the plant for a new production program or the
introduction of new methods or more efficient machinery, or of automation.
Simply put, it is an act of the employer of dismissing employees because of
losses in the operation of a business, lack of work, and considerable reduction
on the volume of his business, a right consistently recognized and affirmed by
this Court.
This provision (Art. 283), however, speaks of a permanent retrenchment as
opposed to a temporary lay-off as is the case here. There is no specific
provision of law which treats of a temporary retrenchment or lay-off and
provides for the requisites in effecting it or a period or duration therefor. These
employees cannot forever be temporarily laid-off. To remedy this situation or
fill the hiatus, Article 286 may be applied but only by analogy to set a specific
period that employees may remain temporarily laid-off or in floating status.13
Six months is the period set by law that the operation of a business or
undertaking may be suspended thereby suspending the employment of the
employees concerned. The temporary lay-off wherein the employees likewise
cease to work should also not last longer than six months. After six months,
the employees should either be recalled to work or permanently retrenched
following the requirements of the law, and that failing to comply with this
would be tantamount to dismissing the employees and the employer would
thus be liable for such dismissal.
To determine, therefore, whether the petitioners were validly retrenched or
were illegally dismissed, we must determine whether there was compliance
with the law regarding a valid retrenchment at anytime within the six month-
period that they were temporarily laid-off.
There are three basic requisites for a valid retrenchment:(1) the retrenchment
is necessary to prevent losses and such losses are proven;(2) written
notice to the employees and to the Department of Labor and Employment at
least one month prior to the intended date of retrenchment; and (3) payment
of separation pay equivalent to one month pay or at least 1/2 month pay for
every year of service, whichever is higher.
The requirement of notice to both the employees concerned and the
Department of Labor and Employment (DOLE) is mandatory and must be
written and given at least one month before the intended date of
retrenchment. In this case, it is undisputed that the petitioners were given
notice of the temporary lay-off. There is, however, no evidence that any
written notice to permanently retrench them was given at least one month
prior to the date of the intended retrenchment. The NLRC found that GTI
conveyed to the petitioners the impossibility of recalling them due to the
continued unavailability of work. But what the law requires is a written notice
to the employees concerned and that requirement is mandatory. The notice
must also be given at least one month in advance of the intended date of
retrenchment to enable the employees to look for other means of employment
and therefore to ease the impact of the loss of their jobs and the corresponding
income. That they were already on temporary lay-off at the time notice should
have been given to them is not an excuse to forego the one-month written
notice because by this time, their lay-off is to become permanent and they
were definitely losing their employment. The law requires two notices — one
to the employee/s concerned and another to the DOLE — not just one. The
notice to the DOLE is essential because the right to retrench is not an absolute
prerogative of an employer but is subject to the requirement of law that
retrenchment be done to prevent losses. The DOLE is the agency that will
determine whether the planned retrenchment is justified and adequately
supported by facts.

The lack of written notice to the petitioners and to the DOLE does not,
however, make the petitioners' retrenchment illegal such that they are entitled
to the payment of back wages and separation pay in lieu of reinstatement as
they contend. Their retrenchment, for not having been effected with the
required notices, is merely defective. There is only a violation by GTI of the
procedure prescribed in Article 283 of the Labor Code in effecting the
retrenchment of the petitioners. It is now settled that where the dismissal of
an employee is in fact for a just and valid cause and is so proven to be but he
is not accorded his right to due process, i.e., he was not furnished the twin
requirements of notice and the opportunity to be heard, the dismissal shall be
upheld but the employer must be sanctioned for non-compliance with the
requirements of or for failure to observe due process. The sanction, in the
nature of indemnification or penalty, depends on the facts of each case and
the gravity of the omission committed by the employer.
139. ASIA WORLD PUBLISHING HOUSE, INC. v. HON. BLAS OPLE
Doctrine: LABOR AND SOCIAL LEGISLATIONS; LABOR LAW; TERMINATION
OF EMPLOYMENT; BACKWAGES; PAYMENT THEREOF MANDATED AS
ALTERNATIVE TO REINSTATEMENT. — As regards the order of reinstatement,
we have to take into account that antagonism between the petitioner and the
private respondent has been brought about by the filing of this case plus the
fact that a new employee had been hired to take over the place of the
Respondent. There is no showing that an equivalent position is available to
Ms. Joaquin. All of these militate against the propriety of reinstating the
Respondent. An officer in such a key position can work effectively only if she
enjoys the full trust and confidence of top management. Likewise, we ruled:
"It should be underscored that the backwages are being awarded on the basis
of equity or in the nature of a severance pay. This means that a monetary
award is to be paid to the striking employees as an alternative to reinstatement
which can no longer be effected in view of the long passage of time or because
of the ‘realities of the situation.’"
ID.; ID.; ID.; ID.; AWARD LIMITED TO A MAXIMUM OF THREE YEARS;
SEVERANCE PAY APPEARS REASONABLE. — We, therefore, affirm the award
of backwages with modifications as an alternative to reinstatement. We limit
the award to a maximum of three (3) years. Secondly, while the Supreme
Court ruled that where there was no valid termination, private respondent is
entitled under Article 280 of the Labor Code to reinstatement without loss of
seniority rights and with backwages from the time his compensation was
withheld up to the time of his reinstatement, still in a great number of illegal
dismissal cases, . . . this Court in the interest of justice and expediency adopted
the policy of granting backwages for a maximum period of three (3) years
without qualification and deduction." Since the private respondent has worked
for the petitioner since 1975, twelve months salaries as severance pay appear
reasonable.
Facts:
Private respondent was hired by Asiaworld Publishing House, Inc., as its
advertising sales director. As such, she managed and supervised the
petitioner’s advertising sales force, prepared advertising sales campaign
programs, and solicited advertisements from local and foreign advertisers.
Due to the respondent’s able management and hard work, Asiaworld’s income
from sales advertising increased tremendously. Sometime in 1976, Vicente
Pesayco, Jr., the corporation’s president and private respondent’s immediate
superior, requested Ms. Joaquin not to go on vacation leave because she was
needed to help direct the advertising sales campaign of Asia Forum, a
magazine the petitioner had newly acquired. Respondent Joaquin acceded to
such request. She did not avail of her vacation leave benefits for three times
at the request of Pesayco. Meanwhile, in October of 1976, the respondent was
eventually designated to take charge of the advertising sales work for Asia
Forum.
In 1977, the private respondent was appointed Vice President for marketing
in a concurrent capacity and her monthly compensation was increased to
P2,300.00. Then petitioner advised the private respondent in writing that her
services would be terminated effective May 16, 1978 because of continued
losses and offered to pay her one (1) month’s salary for her more than three
(3) years of service.
The private respondent filed a complaint with the Office of the Regional
Director, National Capital Region (NCR), Minister of Labor and Employment for
illegal dismissal and for recovery of unpaid earned and unused vacation leave
credits and reimbursement of representation expenses which she advanced
for the petitioner. RD ruled in favor of private respondent.
Issue: Whether or not petitioner was deprived of due process? No
Whether or not private respondent was illegally dismissed? Yes
Whether or not reinstatement is possible? No
Ruling: In any proceeding before the Commission or any of the Labor Arbiters,
the rules of evidence prevailing in courts of law or equity shall not be
controlling. The respondent Minister or the Regional Director can decide the
case on the basis of the position papers and other documents submitted by
the contending parties without resorting to the technical rules of evidence
observed in the courts of justice. Such a procedure substantially complies with
the requirements of due process.
Private respondent was illegally dismissed. Both the Regional Director and the
respondent Minister found that after the private respondent’s termination, the
petitioner hired a new employee to take the former’s position. Although the
petitioner belies the fact that the person who assumed the private
respondent’s job was a new employee, it did not present any employment
contract or other proof to support its allegation. It merely presented BIR forms
of the new employee showing reported income from commissions given by the
petitioner. We do not see any justifiable reason from the foregoing why the
findings of facts of the respondent Minister should be set aside. Such findings
are not tainted with grave abuse of discretion.
However, as regards the order of reinstatement, we have to take into account
that antagonism between the petitioner and the private respondent has been
brought about by the filing of this case plus the fact that a new employee had
been hired to take over the place of the Respondent. There is no showing that
an equivalent position is available to Ms. Joaquin. If the respondent had been
a laborer, clerk, or other rank and file employee, there would be no problem
in ordering her reinstatement with facility. But she was Vice President for
Marketing of Asiaworld. An officer in such a key position can work effectively
only if she enjoys the full trust and confidence of top management.
140. NORTH DAVAO vs. NLRC
Facts: North Davao Mining Corporation was incorporated in 1974 as a 100%
privately-owned company. As of December 31, 1990 the national government
held 81.8% of the common stock and 100% of the preferred stock of said
company.
In May 1992, North Davao completely ceased operations due to serious
business reverses. When it ceased operations, its remaining employees were
separated and given the equivalent of 12.5 days’ pay for every year of service,
computed on their basic monthly pay. However it appears that, during the life
of the petitioner corporation, from the beginning of its operations in 1981 until
its closure in 1992, it had been giving separation pay equivalent to 30 days’
pay for every year of service.
Subsequently, a complaint was filed with respondent LA by respondent
Guillema and 271 other seperated employees for additional separation pay of
17.5 days for every year of service, among others.
Issue: Is a company which is forced by huge business losses to close its
business, legally required to pay separation benefits to its employees at the
time of its closure in an amount equivalent to the separation pay paid to those
who were separated when the company was still a going concern?
Ruling: No. “Art. 283. Closure of establishment and reduction of personnel. –
The employer may also terminate the employment of any employee due to
the installation of labor saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or under-
taking unless the closing is for the purpose of circumventing the provisions of
this Title, by serving a written notice on the workers and the Ministry of Labor
and Employment at least 1 month before the intended date thereof. In case
of termination due to the installation of labor saving devices or redundancy,
the worker affected thereby shall be entitled to a separation pay equivalent to
at least his 1 month pay or to at least 1 month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses and in cases
of closures or cessation of operations of establishment or undertaking not due
to serious business losses or financial reverses, the separation pay shall be
equivalent to 1 month pay or at least ½ month pay for every year of service,
whichever is higher. A fraction of at least 6 months shall be considered whole
year.”
The underscored portion of Art. 283 governs the grant of sepAration benefits
“in case of closures or cessation of operation” of business establishments “NOT
due to serious business losses or financial reverses x x x”. Where, however,
the closure was due to business losses – as in the instant case, in which the
aggregate losses amounted to over P20 billion – the Labor Code does not
impose any obligation upon the employer to pay separation benefits, for
obvious reasons.
In the instant case, the company’s practice of giving one month’s pay for every
year of service could no longer be continued precisely because the company
could not afford it anymore. It was forced to close down on account of
accumulated losses of over P20 billion. North Davao gave 30-days’ separation
pay to its employees when it was still a going concern even if it was already
losing heavily. As a going concern, its cash flow could still have sustained the
payment of such separation benefits. But when a business enterprise
completely ceases operations, i.e., upon its death as a going business concern,
its vital lifeblood -its cashflow – literally dries up. Therefore, the fact that less
separation benefits were granted when the company finally met its business
death cannot be characterized as discrimination. Such action was dictated not
by a discriminatory management option but by its complete inability to
continue its business life due to accumulated losses. Indeed, one cannot
squeeze blood out of a dry stone. Nor water out of parched land.
NOTES: Even if the national government owned or controlled 81.8% of the
common stock and 100% of the preferred stock of North Davao, it remains
only a stockholder thereof, and under existing laws and prevailing
jurisprudence, a stockholder as a rule is not directly, individually and/or
personally liable for the indebtedness of the corporation. The obligation of
North Davao cannot be considered the obligation of the national government,
hence, whether the latter be solvent or not is not material to the instant case.
The respondents have not shown that this case constitutes one of the
instances where the corporate veil may be pierced. From another angle, the
national government is not the employer of private respondent and his co-
complainants, so there is no reason to expect any kind of bailout by the
national government under existing law and jurisprudence.
ASIAN ALCOHOL CORPORATION VS. NATIONAL LABOR RELATIONS
COMMISSION
Doctrine: Same; Same; Same; Requirements for valid retrenchment must be
proved by clear and convincing evidence.—The requirements for valid
retrenchment which must be proved by clear and convincing evidence are: (1)
that the retrenchment is reasonably necessary and likely to prevent business
losses which, if already incurred, are not merely de minimis, but substantial,
serious, actual and real, or if only expected, are reasonably imminent as
perceived objectively and in good faith by the employer; (2) that the employer
served written notice both to the employees and to the Department of Labor
and Employment at least one month prior to the intended date of
retrenchment; (3) that the employer pays the retrenched employees
separation pay equivalent to one month pay or at least 1/2 month pay for
every year of service, whichever is higher; (4) that the employer exercises its
prerogative to retrench employees in good faith for the advancement of its
interest and not to defeat or circumvent the employees’ right to security of
tenure; and (5) that the employer used fair and reasonable criteria in
ascertaining who would be dismissed and who would be retained among the
employees, such as status (i.e., whether they are temporary, casual, regular
or managerial employees), efficiency, seniority, physical fitness, age, and
financial hardship for certain workers.
Same; Same; Same; The law gives the new management every right to
undertake measures to save the company from bankruptcy.—In the case at
bar, Prior Holdings took over the operations of Asian Alcohol in October 1991.
Plain to see, the last quarter losses in 1991 were already incurred under the
new management. There were no signs that these losses would abate.
Irrefutable was the fact that losses have bled Asian Alcohol incessantly over a
span of several years. They were incurred under the management of the
Parsons family and continued to be suffered under the new management of
Prior Holdings. Ultimately, it is Prior Holdings that will absorb all the losses,
including those incurred under the former owners of the company. The law
gives the new management every right to undertake measures to save the
company from bankruptcy.
Fact: In September, 1991, the Parsons family, who originally owned the
controlling stocks in Asian Alcohol, sold their majority rights to Prior Holdings,
Inc. The next month, Prior Holdings took over its management and operation.
To thwart further losses, Prior Holdings implemented are organizational plan
and other cost-saving measures. Some one hundred seventeen (117)
employees out of a total workforce of three hundred sixty (360) were
separated. Seventy two (72) of them occupied redundant positions that were
abolished. Of these positions, twenty one (21) held by union members and
fifty one (51) by non-union members. The six (6) private respondents are
among those union members 5 whose positions were abolished due to
redundancy. On December 18, 1992 the six (6) private respondents filed with
the NLRC complaints for illegal dismissal with a prayer for reinstatement with
backwages, moral damages and attorney's fees. They alleged that Asian
Alcohol used the retrenchment program as a subterfuge for union busting.
They claimed that they were singled out for separation by reason of their active
participation in the union. They also asseverated that Asian Alcohol was not
bankrupt as it has engaged in an aggressive scheme of contractual hiring. The
executive Labor Arbiter dismissed the complainants. Private respondents
appealed to the NLRC. NLRC ruled in favor of private respondents. Asian
Alcohol moved for reconsideration of the foregoing decision. On September
25, 1997, the NLRC denied the motion.
Issue: Were the private respondents illegally dismissed?
Ruling: No. The right of management to dismiss workers during periods of
business recession and to install labor saving devices to prevent losses is
governed by Art. 283 of the labor Code, as amended. Under Art. 283,
retrenchment and redundancy are just causes for the employer to terminate
the services of workers to preserve the viability of the business. In exercising
its right, however, management must faithfully comply with the substantive
and procedural requirements laid down law and jurisprudence. In the instant
case, private respondents never contested the veracity of the audited financial
documents proffered by Asian Alcohol before the Executive Labor Arbiter.
Neither did they object to their admissibility. We find that the reorganizational
plan and comprehensive cost-saving program to turn the business around
were not designed to bust the union of the private respondents. Retrenched
were one hundred seventeen (117) employees. Seventy two (72) of them
including private respondents were separated because their positions had
become redundant.
An employer’s good faith in implementing a redundancy program is not
necessarily put in doubt by the availment of the services of an independent
contractor to replace the services of the terminated employees to promote
economy and efficiency. In the case at bar, Prior Holdings took over the
operations of Asian Alcohol in October 1991. Plain to see, the last quarter
losses in 1991 were already incurred under the new management. There were
no signs that these losses would abate. Irrefutable was the fact that losses
have bled Asian Alcohol incessantly over a span of several years. They were
incurred under the management of the Parsons family and continued to be
suffered under the new management of Prior Holdings. Ultimately, it is Prior
Holdings that will absorb all the losses, including those incurred under the
former owners of the company. The law gives the new management every
right to undertake measures to save the company from bankruptcy.
141.BASILIO A. BALASBAS vs. NLRC
Doctrines: Same; Same; Same; Absence of application to Department of Labor
for reduction of employees negates allegation of business losses sufficient to
warrant retrenchment.—In the case at bar, there is a dearth of sufficient and
convincing documentary evidence to bolster the claim of the respondent
company that it is indeed suffering from business losses of such magnitude as
to impel the retrenchment of petitioner Basilio Balasbas. The records are bereft
of evidence of any application for a reduction of employees or written notice
to the Department of Labor. If indeed there were, it would have been logical
for the respondent company to have attached copies of the same.
Same; Same; Same; Immediate hiring of another employee to the same
position of dismissed employee is proof that alleged retrenchment is mere
cover-up for illegal dismissal.—Interestingly, the records, however, show that
immediately after the petitioner’s termination from work, the respondent
company advertised and hired another employee for the position of inspector
or investigator, indubitable proof that the alleged retrenchment was merely a
cover-up to ease out herein petitioner Basilio Balasbas.
Same; Same; Notice of Termination; Waiver; Immediate filing of complaint for
illegal dismissal negates waiver of right to 30-day notice of termination.—The
alleged waiver by the petitioner of the 30-day notice of termination deserves
scant consideration. Being an ordinary rank and file employee, the petitioner
may not be expected to completely comprehend or realize the consequences
of his act. This is more than adequately shown by the fact that he immediately
filed a complaint for illegal dismissal on April 12, 1985, the same day he was
served the notice of termination of employment.
Issue: Whether or not there was valid retrenchment? No
Whether or not the there is waiver of notice? No
Ruling: In the case at bar, there is a dearth of sufficient and convincing
documentary evidence to bolster the claim of the respondent company, that it
is indeed suffering from business losses of such magnitude as to impel the
retrenchment of petitioner Basilio Balasbas. The records are bereft of evidence
of any application for a reduction of employees or written notice to the
Department of Labor. If indeed there were, it would have been logical for the
respondent company to have attached copies of the same. Interestingly, the
records, however, show that immediately after the petitioner’s termination
from work, the respondent company advertised and hired another employee
for the position of inspector or investigator, indubitable proof that the alleged
retrenchment was merely a cover-up to ease out herein petitioner Basilio
Balasbas. The alleged waiver by the petitioner of the 30-day notice of
termination deserves scant consideration. Being an ordinary rank and file
employee, the petitioner may not be expected to completely comprehend or
realize the consequences of his act. This is more than adequately shown by
the fact that he immediately filed a complaint for illegal dismissal on April 12,
1985, the same day he was served the notice of termination of employment.
There being no proof of serious business losses or financial reverses that would
justify the petitioner's dismissal and there being a failure on the part of the
employer to prove that the dismissal is for a just cause, the employee is
entitled to reinstatement with full backwages.

Facts: Private respondent Jamilla & Company, Inc., owns a security agency
named Veterans Philippine Scout Security Agency. It hired Basilio Balasbas as
operations supervisor and assigned him in the security division. Part of his job
was to issue orders relative to the guards' assignments, direct work activities
of the inspectors and re-screen guard applicants. 8 months after his
employment, the company handed him a termination notice advising him of
his severance from the service effective immediately pursuant to a
retrenchment program that was being implemented.

The same day, he filed NLRC Case No. 9-3187-85 with the Labor Arbiter for
illegal dismissal, non-payment of the 13th month pay and underpayment of
basic salary.

Finding that the petitioner's dismissal was indeed unlawful, having been
effected without proper notice as required by law, Labor Arbiter ruled in favor
of petitioner. NLRC reversed the decision.
142. Rolando Revidad vs NLRC
Doctrine: Labor Law; Retrenchment; Adverse business conditions justify the
exercise of management prerogative to retrench in order to avoid the not so
remote possibility of the closure of the entire business.—First, it has been
sufficiently and convincingly established by AG & P before the voluntary
arbitrator that it was suffering financial reverses. Even the rank and file union
at AG & P did not contest the fact that management had been undergoing
financial difficulties for the past several years. Hence, the voluntary arbitrator
considered this as an admission that indeed AG & P was actually experiencing
adverse business conditions which would justify the exercise of its
management prerogative to retrench in order to avoid the not so remote
possibility of the closure of the entire business which, in the opinion of the
voluntary arbitrator, would in the last analysis be adverse to both the
management and the union.
Same; Same; Financial statements audited by independent external auditors
constitute the normal and reliable method of proof of the profit and loss
performance of a company.—Second, the voluntary arbitrator’s conclusions
were premised upon and substantiated by the audited financial statements
and the auditor’s reports of AG & P for the years 1987 to 1991. These financial
statements audited by independent external auditors constitute the normal
and reliable method of proof of the profit and loss performance of a company.
whichever is higher. The financial assistance which petitioners have received
shall be deducted from the amount of separation pay they will receive.
In its ordinary connotation, the phrase “to prevent losses” means that
retrenchment or termination of the services of some employees is authorized
to be undertaken by the employer sometime before the anticipated losses are
actually sustained or realized. It is not, in other words, the intention of the
lawmaker to compel the employer to stay his hand and keep all his employees
until after losses shall have in fact materialized. If such intent were expressly
written into the law, that law may well be vulnerable to constitutional attack
as unduly taking property from one man to be given to another.
At the other end of the spectrum, it seems equally clear that not every asserted
possibility of loss is sufficient legal warrant for the reduction of personnel. In
the nature of things, the possibility of incurring losses is constantly present, in
greater or lesser degree, in the carrying on of business operations, since some,
indeed many, of the factors which impact upon the profitability or viability of
such operations may be substantially outside the control of the employer.

Same; Same; Retrenchment is one of the economic grounds to dismiss

employees, which is resorted to by an employer to avoid or minimize business
losses.—Third, contrary to petitioners’ asseverations, proof of actual financial
losses incurred by the company is not a condition sine qua non for
retrenchment. Retrenchment is one of the economic grounds to dismiss
employees, which is resorted to by an employer primarily to avoid or minimize
business losses. The law recognizes this under Article 283 of the Labor Code.

Facts: Pursuant to Presidential Directive No. 0191 issued by the company

president and containing management’s decision to lay off 40% or 705
employees due to financial losses incurred from 1989-1990, AG & P
implemented and effected, the temporary lay-off. The labor unions and the
management officials had a conference and agreed to extend financial
assistance for the meantime. But the management failed to recall them.
Issue: Whether or not the temporary mass lay off of employees due to financial
losses and to prevent losses is valid considering that the management failed
to recall them.
Ruling: Yes, temporary lay-off is valid and justified, and that by reason of
management’s failure to recall them, their services shall be considered duly
terminated and they shall be entitled to separation pay equivalent to one
month pay or at least one-half (½) month pay for every year of service,
144. FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THE
PHILIPPINES (FASAP) v. PHILIPPINE AIRLINES, INC., PATRIA CHIONG and
COURT OF APPEALS
October 2, 2009/ G.R. No. 178083
Doctrine: There was no reason to drastically implement a permanent
retrenchment scheme in response to a temporary strike, which could have
ended at any time, or remedied promptly, if management acted with
alacrity. Juxtaposed with its failure to implement the required cost-cutting
measures, the retrenchment scheme was a knee-jerk solution to a temporary
problem that beset PAL at the time.
PAL must still prove that it implemented cost-cutting measures to obviate
retrenchment, which under the law should be the last resort. By PAL’s own
admission, however, the cabin personnel retrenchment scheme was one of the
first remedies it resorted to, even before it could complete the proposed
downsizing of its aircraft fleet.
Facts: Cabin crew personnel were covered by the retrenchment and demotion
scheme of PAL due to financial distress which is evidenced by proof of its
claimed losses in a petition for suspension of payments, as well as the Order
of the Securities and Exchange Commission (SEC) approving the said petition
for suspension of payments, together with proof of summary of its debts and
other liabilities.
Exercising its management prerogative and sound business judgment, it
decided to cut its fleet of aircraft in order to minimize its operating losses and
rescue itself from “total downfall;” which meant that a corresponding
company-wide reduction in manpower necessarily had to be made. As a
result, 5,000 PAL employees (including the herein 1,400 cabin attendants)
were retrenched.
PAL, however, gave a whole different reason for retrenchment when the pilots
went on strike. Accordingly, what really brought about “the really perilous
situation of closure was that on June 5, 1998, the pilots went on strike, ninety
(90%) per cent of the pilots went on strike, approximately six hundred (600).”
These pilots’ strike was so devastating x x x. Without any pilots no plane can
fly, your Honor, that is the stark reality of the situation, and without airplanes
flying, there would be no place for employment of cabin attendants.
Issue: Whether the strike, which PAL used as basis to undertake the massive
retrenchment under scrutiny, is an authorized cause.
Held: The strike was a temporary occurrence that did not necessitate the
immediate and sweeping retrenchment of 1,400 cabin or flight attendants.
There was no reason to drastically implement a permanent retrenchment
scheme in response to a temporary strike, which could have ended at any
time, or remedied promptly, if management acted with alacrity. Juxtaposed
with its failure to implement the required cost-cutting measures, the
retrenchment scheme was a knee-jerk solution to a temporary problem that
beset PAL at the time.
PAL must still prove that it implemented cost-cutting measures to obviate
retrenchment, which under the law should be the last resort. By PAL’s own
admission, however, the cabin personnel retrenchment scheme was one of the
first remedies it resorted to, even before it could complete the proposed
downsizing of its aircraft fleet.
The following elements under Article 283 of the Labor Code must concur or be
present, to wit:
(1) That retrenchment is reasonably necessary and likely to prevent
business losses which, if already incurred, are not merely de minimis, but
substantial, serious, actual and real, or if only expected, are reasonably
imminent as perceived objectively and in good faith by the employer;
(2) That the employer served written notice both to the employees and
to the Department of Labor and Employment at least one month prior to the
intended date of retrenchment;
(3) That the employer pays the retrenched employees separation pay
equivalent to one (1) month pay or at least one-half (½) month pay for every
year of service, whichever is higher;
(4) That the employer exercises its prerogative to retrench employees in
good faith for the advancement of its interest and not to defeat or circumvent
the employees’ right to security of tenure; and,
(5) That the employer uses fair and reasonable criteria in ascertaining
who would be dismissed and who would be retained among the employees,
such as status, efficiency, seniority, physical fitness, age, and financial
hardship for certain workers.
In the absence of one element, the retrenchment scheme becomes an
irregular exercise of management prerogative.
The retrenchment scheme under scrutiny was not triggered directly by any
financial difficulty PAL was experiencing at the time, nor borne of an actual
implementation of its proposed downsizing of aircraft.
145. Business Information Systems and Services INC. v. NLRC
G.R. No. 103575. April 5, 1993
Doctrine: Petitioners' right to terminate employees on account of retrenchment
to prevent losses or closure of business operations, is recognized by law, but
it may not pay separation benefits unequally for such discrimination breeds
resentment and ill-will among those who have been treated less generously
than others. "Granting that the 16 May 1988 termination was a retrenchment
scheme, and the 31 July 1988 and the 28 February 1989 were due to closure,
the law requires the granting of the same amount of separation benefits to
the affected employees in any of the cases. The respondent argued that the
giving of more separation benefit to the second and third batches of
employees separated was their expression of gratitude and benevolence to
the remaining employees who have tried to save and make the company viable
in the remaining days of operations. This justification is not plausible. there
are workers in the first batch who have rendered more years of service and
could even be said to be more efficient than those separated subsequently,
yet, they did not receive the same recognition. Understandably, their being
retained longer in their job and be not included in the batch that was first
terminated, was a concession enough and may already be considered as favor
granted by the respondents to the prejudice of the complainants. As it
happened, there are workers in the first batch who have rendered more years
in service but received lesser separation pay, because of that arrangement
made by the respondents in paying their termination benefits . . ." Clearly,
there was impermissible discrimination against the private respondents in the
payment of their separation benefits. The law requires an employer to extend
equal treatment to its employees. It may not, in the guise of exercising
management prerogatives, grant greater benefits to some and less to others.
Management prerogatives are not absolute prerogatives but are subject to
legal limits, collective bargaining agreements, or general principles of fair play
and justice (UST vs. NLRC, 190 SCRA 758). Article 283 of the Labor Code, as
amended, protects workers whose employment is terminated because of
closure of the establishment or reduction of personnel (Abella vs. NLRC, 152
SCRA 141, 145).
Facts: BSSI was engaged in the manufacture and sale of computer forms. Due
to financial reverses, its creditors, the Development Bank of the Philippines
(DBP) and the Asset Privatization Trust (APT), took possession of its assets,
including a manufacturing plant in Marilao, Bulacan.
As a retrenchment measure, some plant employees, including the private
respondents, were laid off on May 16, 1988, after prior notice, and were paid
separation pay equivalent to one-half (1/2) month pay for every year of
service. Upon receipt of their separation pay, the private respondents signed
individual releases and quitclaims in favor of BSSI.
BSSI retained some employees in an attempt to rehabilitate its business as a
trading company.
However, barely two and a half months later, these remaining employees were
likewise discharged because the company decided to cease business
operations altogether. Unlike the private respondents, that batch of employees
received separation pay equivalent to a full month's salary for every year of
service plus mid-year bonus.
Protesting against the discrimination in the payment of their separation
benefits, the twenty-seven (27) private respondents filed three (3) separate
complaints against the BSSI and Raul Locsin. These cases were later
consolidated.
At the conciliation proceedings before Labor Arbiter Manuel P. Asuncion,
petitioners denied that there was unlawful discrimination in the payment of
separation benefits to the employees. They argued that the first batch of
employees was paid "retrenchment" benefits mandated by law, while the
remaining employees were granted higher "separation" benefits because their
termination was on account of the closure of the business.
Issue: Whether BSSI’s decision to provide different rates of separation pay to
different batches of employees separated from employment is discriminatory.
Held: Yes. The following observations of the Commission are relevant:
"The respondents cited financial business difficulties to justify their termination
of the complainants' employment on 16 May 1988. They were given one-half
(1/2) month of their salary for every year of service. Due to continuing losses,
which is a sign that business, after the termination did not improve, they
closed operations on 31 July 1989, where they dismissed the second batch of
employees who were given one (1) month pay for every year they served. The
third batch of employees were terminated on 28 February 1989, who were
likewise given one (1) monthly pay for every year of service. The business
climate obtaining on 16 May 1988 when the complainants were terminated did
not at all defer (sic) improvement-wise, with that of 31 July 1988 nor to 28
February 1989. The internal between the dates of termination was so close to
each other, so that, no improvement in business maybe likely expected. In
fact, the respondents suffered continuous losses, hence, there is no difference
in the circumstances of the business to distinguish.
"Granting that the 16 May 1988 termination was a retrenchment scheme, and
the 31 July 1988 and the 28 February 1989 were due to closure, the law
requires the granting of the same amount of separation benefits to the
affected employees in any of the cases. The respondent argued that the giving
of more separation benefit to the second and third batches of employees
separated was their expression of gratitude and benevolence to the remaining
employees who have tried to save and make the company viable in the
remaining days of operations. This justification is not plausible. There are
workers in the first batch who have rendered more years of service and could
even be said to be more efficient than those separated subsequently, yet they
did not receive the same recognition. Understandably, their being retained
longer in their job and be not included in the batch that was first terminated,
was a concession enough and may already be considered as favor granted by
the respondents to the prejudice of the complainants. As it happened, there
are workers in the first batch who have rendered more years in service but
received lesser separation pay, because of that arrangement made by the
respondents in paying their termination benefits . . ."
(pp. 36-37, Rollo)

Clearly, there was impermissible discrimination against the private

respondents in the payment of their separation benefits. The law requires an
employer to extend equal treatment to its employees. It may not, in the guise
of exercising management prerogatives, grant greater benefits to some and
less to others. Management prerogatives are not absolute prerogatives but are
subject to legal limits, collective bargaining agreements, or general principles
of fair play and justice (UST vs. NLRC, 190 SCRA 758). Article 283 of the Labor
Code, as amended, protects workers whose employment is terminated
because of closure of the establishment or reduction of personnel.
146. Cheniver Deco Print Technics Corporation v. NLRC
G.R. No. 122876, February 17, 2000
Doctrine: 1. The phrase, “closure or cessation of operation of an
establishment not due to serious business losses or reverses,” under Article
288 of the Labor Code includes the cessation of only part of a company’s
business.
2. Since the closure of petitioner's business is not on account of serious
business losses, petitioner shall give private respondents separation pay
equivalent to at least one (1) month or one-half (1/2) month pay for every
year of service, whichever is higher.
Facts: Petitioner is printing business in Sta. Cruz Makati. Petitioner informed
its workers that it was going to transfer its site in Makati to Batangas. It gave
its employees time to inform the management of their willingness to go with
petitioner; otherwise, they would find replacements. petitioner reminded its
respondent workers of the following schedule to be followed:
June 29, 1992 — last day of operation in Makati
July 1-31, 1992 — temporary shutdown to give way to transfer of operation
August 1, 1992 — start of operation at new site in Sto. Tomas, Batangas.
The union advised petitioner that its members were not willing to transfer to
the new site. Private respondents herein filed a complaint for ULP, illegal
dismissal, underpayment of wages, non-payment of holiday pay, 13th month
pay. SIL and separation pay. The labor Arbiter directed petitioner to pay
separation pay and attorney’s fees. The NLRC affirmed the decision, but
deleted the award of attorney’s fees.
Petitioner contends that the transfer of its business is neither a closure nor
retrenchment, hence, separation pay should not be awarded to the private
respondents. It also avers that private respondents were not terminated from
the service but they resigned from their job because they find the new work
site too far from their residences.
Issue: Whether private respondent are entitled to separation pay by virtue of
their refusal to transfer to the business in Batangas.
Held: Yes. Although there is no complete dissolution of petitioner’s
undertaking, but a mere relocation; the phrase, “closure or cessation of
operation of an establishment not due to serious business losses or reverses,”
under Article 288 of the Labor Code includes the cessation of only part of a
company’s business. Petitioner did have legitimate reason to relocate its plant
due to the expiration of the lease contract in Makati; however petitioner is still
required to pay its workers separation pay. Cessation of operation not due to
serious business losses is an authorized cause for termination; but the
Labor Code provides that the terminated employees are entitled to separation
pay of 1 month pay or less ½ for every year of service, whichever is higher.
There is no doubt that petitioner has legitimate reason to relocate its plant
because of the expiration of the lease contract on the premises it occupied.
That is its prerogative. But even though the transfer was due to a reason
beyond its control, petitioner has to accord its employees some relief in the
form of severance pay. Thus, in E. Razon, Inc. vs. Secretary of Labor and
Employment, petitioner therein provides arrastre services in all piers in South
Harbor, Manila, under a management contract with the Philippine Ports
Authority. Before the expiration of the term of the contract, the PPA cancelled
the said contract resulting in the termination of employment of workers
engaged by petitioner. Obviously, the cancellation was not sought, much less
desired by petitioner. Nevertheless, this Court required petitioner therein to
pay its workers separation pay in view of the cessation of its arrastre
operations.
Now, let it be noted that the termination of employment by reason of closure
or cessation of business is authorized under Article 283 of the Labor Code
which provides:
Art. 283. Closure of establishment and reduction of personnel. — The
employer may terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the intended
date thereof. In case of termination due to the installation of labor saving
devices or redundancy, the worker affected thereby shall be entitled to a
separation pay equivalent to at least his one (1) month pay or at least one (1)
month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses
or financial reverses, the separation pay shall be equivalent to one (1) month
pay or at least one-half (1/2) month pay for every year of service, whichever
is higher. A fraction of at least six (6) months shall be considered one (1)
whole year.
Consequently, petitioner herein must pay his employees their termination pay
in the amount corresponding to their length of service. Since the closure of
petitioner's business is not on account of serious business losses, petitioner
shall give private respondents separation pay equivalent to at least one (1)
month or one-half (1/2) month pay for every year of service, whichever is
higher.
Petitioner's contention that private respondents resigned from their jobs, does
not appear convincing. As public respondent observed, the subsequent
transfer of petitioner to another place hardly accessible to its workers resulted
in the latter's untimely separation from the service not to their own liking,
hence, not construable as resignation.7Resignation must be voluntary and
made with the intention of relinquishing the office, accompanied with an act
of relinquishment. Indeed, it would have been illogical for private respondents
herein to resign and then file a complaint for illegal dismissal. Resignation is
inconsistent with the filing of the said complaint.
147. National Federation of Labor v. NLRC
G.R. No. 127718 March 2, 2000
Doctrine: Article 283 of the Labor Code applies in cases of closures of
establishment and reduction of personnel. The peculiar circumstances in the
case at bar, however, involves neither the closure of an establishment nor a
reduction of personnel as contemplated under the aforesaid article. When the
Patalon Coconut Estate was closed because a large portion of the estate was
acquired by DAR pursuant to CARP, the ownership of that large portion of the
estate was precisely transferred to PEARA and ultimately to the petitioners as
members thereof and as agrarian lot beneficiaries. Hence, Article 283 of the
Labor Code is not applicable to the case at bench.
Facts: Petitioners are bona fide members of the National Federation of Labor
(NFL), a legitimate labor organization duly registered with the Department of
Labor and Employment. They were employed by private respondents Charlie
Reith and Susie Galle Reith, general manager and owner, respectively, of the
354-hectare Patalon Coconut Estate located at Patalon, Zamboanga City.
Patalon Coconut Estate was engaged in growing agricultural products and in
raising livestock.
In 1988, Congress enacted into law Republic Act (R.A.) No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law (CARL), which mandated
the compulsory acquisition of all covered agricultural lands for distribution to
qualified farmer beneficiaries under the so-called Comprehensive Agrarian
Reform Programme (CARP).
Pursuant to R.A. No. 6657, the Patalon Coconut Estate was awarded to the
Patalon Estate Agrarian Reform Association (PEARA), a cooperative accredited
by the Department of Agrarian Reform (DAR), of which petitioners are
members and co-owners.
As a result of this acquisition, private respondents shut down the operation of
the Patalon Coconut Estate and the employment of the petitioners was severed
on July 31, 1994. Petitioners did not receive any separation pay.
Issue: Whether petitioners are entitled to separation pay
Held: NO. Art. 283. Closure of establishment and reduction of personnel. —
The employer may also terminate the employment of any employee due to
the installation of labor saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the intended
date thereof. In case of termination due to the installation of labor saving
devices or redundancy, the worker affected thereby shall be entitled to a
separation pay equivalent to at least his one (1) month pay or to at least one
(1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses
or financial reverses, the separation pay shall be equivalent to one (1) month
pay or at least one-half (1/2) month pay for every year of service, whichever
is higher. A fraction of at least six (6) months shall be considered as one (1)
whole year.
It is clear that Article 283 of the Labor Code applies in cases of closures of
establishment and reduction of personnel.
The peculiar circumstances in the case at bar, however, involves neither the
closure of an establishment nor a reduction of personnel as contemplated
under the aforesaid article. When the Patalon Coconut Estate was closed
because a large portion of the estate was acquired by DAR pursuant to CARP,
the ownership of that large portion of the estate was precisely transferred to
PEARA and ultimately to the petitioners as members thereof and as agrarian
lot beneficiaries. Hence, Article 283 of the Labor Code is not applicable to the
case at bench.
Even assuming, arguendo, that the situation in this case were a closure of the
business establishment called Patalon Coconut Estate of private respondents,
still the petitioners/employees are not entitled to separation pay. The closure
contemplated under Article 283 of the Labor Code is a unilateral and voluntary
act on the part of the employer to close the business establishment as may be
gleaned from the wording of the said legal provision that "The
employer may also terminate the employment of any employee due to. . .".
The use of the word "may," in a statute, denotes that it is directory in nature
and generally permissive only. The "plain meaning rule" or verba legisin
statutory construction is thus applicable in this case. Where the words of a
statute are clear, plain and free from ambiguity, it must be given its literal
meaning and applied without attempted interpretation.
In other words, Article 283 of the Labor Code does not contemplate a situation
where the closure of the business establishment is forced upon the employer
and ultimately for the benefit of the employees.
As earlier stated, the Patalon Coconut Estate was closed down because a large
portion of the said estate was acquired by the DAR pursuant to the CARP.
Hence, the closure of the Patalon Coconut Estate was not effected voluntarily
by private respondents who even filed a petition to have said estate exempted
from the coverage of RA 6657. Unfortunately, their petition was denied by the
Department of Agrarian Reform. Since the closure was due to the act of the
government to benefit the petitioners, as members of the Patalon Estate
Agrarian Reform Association, by making them agrarian lot beneficiaries of said
estate, the petitioners are not entitled to separation pay. The termination of
their employment was not caused by the private respondents. The blame, if
any, for the termination of petitioners' employment can even be laid upon the
petitioner-employees themselves inasmuch as they formed themselves into a
cooperative, PEARA, ultimately to take over, as agrarian lot beneficiaries, of
private respondents' landed estate pursuant to RA 6657. The resulting closure
of the business establishment, Patalon Coconut Estate, when it was placed
under CARP, occurred through no fault of the private respondents.
148. CEBU ROYAL PLANT (SAN MIGUEL CORPORATION), petitioner, vs. THE
HONORABLE DEPUTY MINISTER OF LABOR and RAMON
PILONES, respondents.
DOCTRINE
The applicable rule on the ground for dismissal invoked against him is Section
8, Rule I, Book VI, of the Rules and Regulations Implementing the Labor Code
reading as follows:
Sec. 8. Disease as a ground for dismissal. — Where the employee suffers from
a disease and his continued employment is prohibited by law or prejudicial to
his health or to the health of his co-employees, the employer shall not
terminate his employment unless there is a certification by a competent public
health authority that the disease is of such nature or at such a stage that it
cannot be cured within a period of six (6) months even with proper medical
treatment. If the disease or ailment can be cured within the period, the
employer shall not terminate the employee but shall ask the employee to take
a leave. The employer shall reinstate such employee to his former position
immediately upon the restoration of his normal health.
However, this does not hold true especially when the medical certification
came from the health officer of the employer. We cannot permit this
subterfuge if we are to be true to the spirit and mandate of social justice. On
the other hand, we have also the health of the public and of the dismissed
employee himself to consider. Hence, although we must rule in favor of his
reinstatement, this must be conditioned on his fitness to resume his work, as
certified by competent authority.
We take this opportunity to reaffirm our concern for the lowly worker who,
often at the mercy of his employers, must look up to the law for his protection.
Fittingly, that law regards him with tenderness and even favor and always with
faith and hope in his capacity to help in shaping the nation's future. It is error
to take him for granted. He deserves our abiding respect. How society treats
him will determine whether the knife in his hands shall be a caring tool for
beauty and progress or an angry weapon of defiance and revenge. The choice
is obvious, of course. If we cherish him as we should, we must resolve to
lighten "the weight of centuries" of exploitation and disdain that bends his
back but does not bow his head.
FACTS
Pilones was employed on a probationary period of employment for six (6)
months. After said period, he underwent medical examination for qualification
as regular employee but the results showed that he is suffering from PTB
minimal. Consequently, he was informed of the termination of his employment
by respondent." The order then concluded that the termination was "justified."
The petitioner for its part claims that the private respondent was still on
probation at the time of his dismissal and so had no security of tenure. His
dismissal was not only in conformity with company policy but also necessary
for the protection of the public health, as he was handling ingredients in the
processing of soft drinks which were being sold to the public.

ISSUE
WON the termination was valid on the ground of disease.

RULING
NO. The six-month period of probation started from the said date of
appointment and ended on August 17, 1978, but it is not shown that the
private respondent's employment also ended then; on the contrary, he
continued working as usual. Under Article 282 of the Labor Code, "an
employee who is allowed to work after a probationary period shall be
considered a regular employee." Hence, Pilones was already on permanent
status when he was dismissed on August 21, 1978, or four days after he
ceased to be a probationer. We note that when the petitioner had all of six
months during which to conduct such examination, it chose to wait until
exactly the last day of the probation period. In the light of such delay, its
protestations now that reinstatement of Pilones would prejudice public health
cannot but sound hollow and hypocritical. By its own implied admission, the
petitioner had exposed its customers to the employee's disease because of its
failure to examine him before entrusting him with the functions of a "syrup
man." Its belated concern for the consuming public is hardly persuasive.
As such, he could validly claim the security of tenure guaranteed to him by the
Constitution and the Labor Code.
It is also worth noting that the petitioner's application for clearance to
terminate the employment of the private respondent was filed with the
Ministry of Labor only seven days after his dismissal. 6 As the NLRC has
repeatedly and correctly said, the prior clearance rule (which was in force at
that time) was not a "trivial technicality." It required "not just the mere filing
of a petition or the mere attempt to procure a clearance" but that "the said
clearance be obtained prior to the operative act of termination. 7
We agree that there was here an attempt to circumvent the law by separating
the employee after five months' service to prevent him from becoming a
regular employee, and then rehiring him on probation, again without security
of tenure.
149. REY PABLO D. SICANGCO, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION AND METRO DRUG, INC., respondents.
DOCTRINE
We have said that there is nothing illegal with the practice of allowing an
employee to resign instead of being separated for just cause, so as not to
smear his employment record.
Courts cannot constitute themselves guardians of persons who are not legally
incompetent. Courts operate not because one person has been defeated or
overcome by another, but because he has been defeated or overcome illegally.
Men may do foolish things, make ridiculous contracts, use miserable judgment
and lose money by them — indeed, all they have in the world; but not for that
alone can the law intervene and restore. There must be, in addition, a violation
of law, the commission of what the law knows as an actionable wrong, before
the courts are authorized to lay hold of the situation and remedy it.
Not all waivers and quitclaims are invalid as against public policy. If the
agreement was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind. It is only where there is clear proof that the
waiver was wangled from an unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law will step in to annul
the questionable transaction. But where it is shown that the person making
the waiver did so voluntarily, with full understanding of what he was doing,
and the consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as a valid and binding undertaking.
FACTS
Rey Pablo D. Sicangco was appointed Senior Attorney in the Metro Drug
Corporation (MDC). In 1986, he was promoted to the position of Assistant
Vice-President for Legal Affairs. Later that same year, MDC was acquired by
another company and subsequently renamed Metro Drug Inc. (MDI). Sicangco
retained his position in MDI. As Assistant Vice-President for Legal Affairs, he
was in charge of labor relations, personnel administration, and all other
corporate concerns of MDI. Sicangco was then assigned to the legal staff of
the mother company, First Pacific Metro Corporation, under the supervision of
its general counsel. In a letter the company informed him that his position
would be declared redundant. Sicangco did not protest and instead
successfully negotiated for higher separation benefits. The separation pay was
only P93,436.10, but the company agreed to write off his outstanding car loan
of P162,000.00 as part of his separation package. Sicangco was paid an extra
amount of P13,291.57, representing his pay adjustment and proportionate
bonuses. All in all, the separation benefits awarded to him amounted to
P268,727.67.
In accordance with his agreement with the company and before the declared
redundancy of his position took effect, Sicangco tendered his
resignation. Upon receipt of his separation benefits, Sicangco signed a
document entitled "Release, Waiver and Quitclaim." Then, Sicangco filed an
action against the company for unfair labor practice and illegal dismissal.
Labor Arbiter declared Sicangco's dismissal as illegal and ordered his
reinstatement; National Labor Relations Commission took the opposite view
when the decision was appealed to it as the termination from employment was
due to his voluntary resignation and not because of redundancy.
ISSUE
Whether there is the intimidation on the part of the employer in the resignation
and quitclaim executed by Sicangco?
RULING
Contrary to Sicangco's allegations, there is no indication in the record that he
was coerced into resigning from the company. It should be noted that the
petitioner is a lawyer and specializes in labor relations at that. There is every
reason to suppose that he knows his basic rights as an employee and, no less
importantly, knows how to protect these rights as a lawyer. In fact, he used
this knowledge to his advantage when he negotiated successfully for higher
separation benefits. The petitioner was not illegally dismissed. It would appear
that when he was informed that his position had become redundant, he
decided to resign and was allowed to do so before his redundancy took effect.
Moreover, the petitioner cannot renege on the release, waiver and quitclaim
he executed. His contention that it was coerced, considered especially in the
light of the fact that he is a lawyer, must be rejected. Lawyers are not easily
coerced into signing legal documents. Quitclaims executed by employees are
commonly frowned upon as contrary to public policy and ineffective to bar
claims for the full measure of the worker's legal rights. Neither does
acceptance of benefits estop the employee from prosecuting his employer for
unfair labor practice acts. The reason is plain. Employer and employee
obviously do not stand on the same footing. 6
It is inconceivable that as an experienced lawyer, the petitioner would allow
himself to be inveigled or coerced into signing away his rights.
150. INTERTROD MARITIME, INC. and TROODOS SHIPPING
CO., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and
ERNESTO DE LA CRUZ, respondents.
DOCTRINE
Article 21(c) of the Labor Code requires that the Philippine Overseas
Employment Administration (formerly NSB) should approve and verify a
contract for overseas Employment. 11 A contract, which is approved by the
National Seamen Board, such as the one in this case, is the law between the
contracting parties; and where there is nothing in it which is contrary to law,
morals, good customs, public policy or public order, the validity of said contract
must be sustained.12
Resignation is the voluntary act of an employee who "finds himself in a
situation where he believes that personal reasons cannot be sacrificed in favor
of the exigency of the service, then he has no other choice but to disassociate
himself from his employment."16 The employer has no control over
resignations and so, the notification requirement was devised in order to
ensure that no disruption of work would be involved by reason of the
resignation. This practice has been recognized because "every business
enterprise endeavors to increase its profits by adopting a device or means
designed towards that goal." Resignations, once accepted and being the sole
act of the employee, may not be withdrawn without the consent of the
employer.
FACTS
Ernesto de la Cruz signed a shipboard employment contract with petitioner
Troodos Shipping Company as principal and petitioner Intertrod Maritime, Inc.,
as agent to serve as Third Engineer on board the M/T "BREEDEN" for a period
of (12) months but he eventually boarded a sister vessel, M/T "AFAMIS" and
proceeded to work as the vessel's Third Engineer under the same terms and
conditions of his employment contract previously referred to. While the ship
(M/T "Afamis") was at Port Pylos, Greece, private respondent requested for
relief, due to "personal reason."3 The Master of the ship approved his request
but informed private respondent that repatriation expenses were for his
account and that he had to give (30) days notice in view of the Clause 5 of
the employment contract so that a replacement for him (private respondent)
could be arranged. While the vessel was at Port Said in Egypt and despite the
fact that it was only four (4) days after private respondent's request for relief,
the Master "signed him off" and paid him in cash all amounts due him less the
amount of US$780.00 for his repatriation expenses.
Private respondent filed a complaint with the National Seamen Board
(NSB)(now POEA) charging petitioners for breach of employment contract and
violation of NSB rules and regulations.6 Private respondent alleged that his
request for relief was made in order to take care of a Filipino member of the
crew of M/T "AFAMIS" who was hospitalized on 25 August 1982 in Athens,
Greece. However, the Master of the ship refused to let him immediately
disembark in Greece so that the reason for his request for relief ceased to
exist. Hence, when the Master of the ship forced him to step out in Egypt
despite his protestations to the contrary, there being no more reason to
request for relief, an illegal dismissal occurred and he had no other recourse
but to return to the Philippines at his own expense. 7
POEA rendered a decision dismissing the complaint for lack of merit.9 On
appeal to the NLRC, the decision was reversed.
ISSUES
WON the employee was validly dismissed?
RULING
YES. Paragraph 5 of the Employment Contract between petitioners and private
respondent Ernesto de la Cruz provides as follows:
5. That, if the seaman decide to terminate his contract prior to the expiration
of the service period as stated and defined in paragraph 4 of this Employment
Contract, without due cause, he will give the Master thirty (30) days notice
and agree to allow his repatriation expenses to be deducted from wages due
him.14
Clearly, therefore, private respondent Ernesto de la Cruz was required by the
employment contract not only to pay his own repatriation expenses but also
to give thirty (30) days notice should he decide to terminate his employment
prior to the expiration of the period provided in the contract. When the Master
approved his request for relief, the Master emphasized that private respondent
was required to give thirty (30) days notice and to shoulder his own
repatriation expenses. Approval of his request for relief, therefore, did not
constitute a waiver by petitioners of the provisions of the contract, as private
respondent would have us believe, for it was made clear to him that the
provisions of the contract, insofar as the thirty (30) days notice and
repatriation expenses were concerned, were to be enforced.
Once an employee resigns and his resignation is accepted, he no longer has
any right to the job. If the employee later changes his mind, he must ask for
approval of the withdrawal of his resignation from his employer, as if he were
re-applying for the job. It will then be up to the employer to determine whether
or not his service would be continued. If the employer accepts said withdrawal,
the employee retains his job. If the employer does not, as in this case, the
employee cannot claim illegal dismissal for the employer has the right to
determine who his employees will be. To say that an employee who has
resigned is illegally dismissed, is to encroach upon the right of employers to
hire persons who will be of service to them.
151. JOSE S. SANTOS, JR., petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, HAGONOY INSTITUTE INC., ITS
DIRECTRESS, MARTA B. ZUNIGA and PRINCIPAL B.
BANAG, respondents.
DOCTRINE
On the outset, it must be stressed that to constitute immorality, the
circumstances of each particular case must be holistically considered and
evaluated in light of the prevailing norms of conduct and applicable laws. Thus,
in petitioner's case, the gravity and seriousness of the charges against him
stem from his being a married man and at the same time a teacher. We cannot
overemphasize that having an extra-marital affair is an affront to the sanctity
of marriage, which is a basic institution of society. As a teacher, petitioner
serves as an example to his pupils, especially during their formative
years18 and stands in loco parentis to them.19 To stress their importance in our
society, teachers are given substitute and special parental authority under our
laws.
Consequently, it is but stating the obvious to assert that teachers must adhere
to the exacting standards of morality and decency. There is no dichotomy of
morality. A teacher, both in his official and personal conduct, must display
exemplary behavior. He must freely and willingly accept restrictions on his
conduct that might be viewed irksome by ordinary citizens. In other words,
the personal behavior of teachers, in and outside the classroom, must be
beyond reproach.
Accordingly, teachers must abide by a standard of personal conduct which not
only proscribes the commission of immoral acts, but also prohibits behavior
creating a suspicion of immorality because of the harmful impression it might
have on the students.21 Likewise, they must observe a high standard of
integrity and honesty.
FACTS
Petitioner, a married man, was employed as a teacher by the private
respondent Hagonoy Institute Inc. until his dismissal. Likewise working as a
teacher for the private respondent was Mrs. Arlene T. Martin, also married. In
the course of their employment, the couple fell in love. Thereafter, rumors
regarding the couple's relationship spread, especially among the faculty
members and school officials. Concerned about the rumors, the private
respondent advised Mrs. Martin to take a leave of absence which she ignored,
as she continued to report for work. Consequently, she was barred from
reporting for work and was not allowed to enter the private respondent's
premises, effectively dismissing her from her employment.
In view of her termination from the service, Mrs. Martin filed a case for illegal
dismissal before the NLRC against the private respondent. Labor Arbiter
rendered a decision dismissing the complaint; NLRC in a decision, reversed the
labor arbiter's ruling.
Meanwhile, private respondent set up a committee to investigate the veracity
of the rumors. After two weeks of inquiry, the committee rendered its report
confirming the illicit relationship between the petitioner and Mrs. Martin.
In view of the committee's finding, petitioner was charged administratively for
immorality and was required to present his side on the controversy. Five
months later petitioner was informed by the private respondent's Board of
Directors of his dismissal. Unable to accept such verdict, petitioner filed a
complaint for illegal dismissal before the NLRC, Labor Arbiter Quintin C.
Mendoza rendered a decision dismissing petitioner's complaint. NLRC,
however, did not find any substantial reason to overturn the labor arbiter's
ruling.
ISSUE
Whether the illicit relationship between the petitioner and Mrs. Martin could
be considered immoral as to constitute just cause to terminate an employee
under Article 282 of the Labor Code.
RULING
We have consistently held that in order to constitute a valid dismissal, two
requisites must concur: (a) the dismissal must be for any of the causes
expressed in Art. 282 of the Labor Code, and (b) the employee must be
accorded due process, basic of which are the opportunity to be heard and
defend himself. From the foregoing, it seems obvious that when a teacher
engages in extra-marital relationship, especially when the parties are both
married, such behavior amounts to immorality, justifying his termination from
employment. Having concluded that immorality is a just cause for dismissing
petitioner, it is imperative that the private respondent prove the same. Since
the burden of proof rests upon the employer to show that the dismissal was
for a just and valid cause,24 the same must be supported by substantial
evidence. Undoubtedly, the question of immorality by the petitioner is factual
in nature.
Finally, petitioner cannot invoke in his favor the ruling in the Arlene
Martin case, wherein the NLRC ruled that her dismissal was illegal. It must be
noted that the reason for declaring Martin's dismissal as illegal was the failure
by the private respondent to accord her the required due process. In view of
our finding that petitioner's dismissal was for a just and valid cause, the grant
of financial assistance by the NLRC is without any factual and legal basis.
152. Chua-Qua v Clave
GR No. 49549; Aug 30, 1991
Doctrine:
In termination cases, the burden of proving just and valid cause for dismissing
an employee rests on the employer and his failure to do so would result in a
finding that the dismissal is unjustified.
FACTS:
Petitioner was employed in Tay Tung High School, Inc. as the class adviser in
the sixth grade where Bobby Qua was enrolled in. Since it was the policy of
the school to extend remedial instructions to its students, Bobby Qua was
imparted such instructions in school by petitioner. In the course thereof, the
couple fell in love and got married in a civil ceremony. Petitioner was then 30
years old while Bobby Qua was 16 years old. Consent and advice to the
marriage was given by his mother, and their marriage was ratified in
accordance with the rites of their religion in a church wedding.
Private respondent filed with the sub-regional office of the Department of
Labor at Bacolod City an application for clearance to terminate the
employment of petitioner on the following ground: “For abusive and unethical
conduct unbecoming of a dignified school teacher and that her continued
employment is inimical to the best interest, and would downgrade the high
moral values, of the school.”
Petitioner was placed under suspension without pay.
The Labor Arbiter, without conducting any formal hearing, granted the
clearance to terminate the employment of petitioner.
The NLRC unanimously reversed the Labor Arbiter’s decision and ordered
petitioner’s reinstatement with backwages,
ISSUE:
Whether or not petitioner committed serious misconduct or breached the trust
reposed on her by her employer or committed any of the other grounds
enumerated in the Labor Code which will justify the termination of her
employment.
RULING:
We rule that public respondent acted with grave abuse of discretion.
With the finding that there is no substantial evidence of the imputed immoral
acts, it follows that the alleged violation of the Code of Ethics governing school
teachers would have no basis. Private respondent utterly failed to show that
petitioner took advantage of her position to court her student. If the two
eventually fell in love, despite the disparity in their ages and academic levels,
this only lends substance to the truism that the heart has reasons of its own
which reason does not know. But, definitely, yielding to this gentle and
universal emotion is not to be so casually equated with immorality. The
deviation of the circumstances of their marriage from the usual societal pattern
cannot be considered as a defiance of contemporary social mores.
It would seem quite obvious that the avowed policy of the school in rearing
and educating children is being unnecessarily bannered to justify the dismissal
of petitioner. This policy, however, is not at odds with and should not be
capitalized on to defeat the security of tenure granted by the Constitution to
labor. In termination cases, the burden of proving just and valid cause for
dismissing an employee rests on the employer and his failure to do so would
result in a finding that the dismissal is unjustified.
The charge against petitioner not having been substantiated, we declare her
dismissal as unwarranted and illegal. It being apparent, however, that the
relationship between petitioner and private respondent has been inevitably
and severely strained, we believe that it would neither be to the interest of
the parties nor would any prudent purpose be served by ordering her
reinstatement.
153. JRS Business v NLRC
Doctrine:
The employer may place the worker concerned under preventive suspension
if his continued employment poses a serious and imminent threat to the life
or property of the employer or of his co-workers.
No preventive suspension shall last longer than 30 days. The employer shall
thereafter reinstate the worker in his former or in a substantially equivalent
position of the employer may extend the period of suspension provided that
during the period of extension, he pays the wages and other benefits due to
the worker.
Facts:
Petitioner employed private respondent on April 7, 1980. Subsequently, private
respondent was promoted as Station Manager of petitioner's Davao branch
office.
In September 1988, petitioner's Internal Auditor, conducted an audit of its
Davao office. The audit revealed a shortage totalling P145,564.33 arising from
undeposited cash sales and unexplained cash shortages from charge sales.
On September 27, 1988, private respondent was informed by Ernesto A.
Gonzales, petitioner's Personnel Manager, of the appointment of Fernando T.
dela Cerna as officer-in-charge of the Davao office. He was further instructed
to report to dela Cerna for his new duties pending petitioner's final decision
regarding the result of the audit report.
On October 2, 1988, the employees of petitioner: namely, Elizabeth Paulino,
the office cashier, her husband, Jaime, and Darwin Solis, signed statements
which detailed the irregularities committed by private respondent and his wife.
On October 12, 1988, private respondent was directed by Ernesto A. Gonzales
to go on leave without pay effective October 15, 1988 until further notice, in
view of the on-going investigation.
On October 13, 1988, private respondent wrote petitioner a letter rebutting
the allegations contained in the affidavits submitted against him. He alleged
that he merely requested his wife to assist him in the preparation of reports
as she was a former employee of petitioner. Furthermore, he denied any
participation in the cash shortage.
On November 17, 1988, private respondent and his wife received separate
demand letters for the immediate restitution of the amount of P145,564.33.
On February 6, 1988, considering his indefinite forced leave without pay as a
constructive dismissal, private respondent filed a complaint against petitioner
with the Regional Arbitration Branch of Davao City for illegal dismissal,
reinstatement with back wages, vacation and sick leave pay, moral and
exemplary damages and attorney's fees.
Issue:
Whether private respondent was constructively or illegally dismissed
Ruling:
Yes. The NLRC also found the other charges levelled against private
respondent to be without basis and accepted his explanation thereof as
satisfactory. It took note of the long and dedicated service of private
respondent to the company. It belittled the charges that private respondent
allowed his wife to go to the branch office to help him prepare his reports and
that he brought to the office his own air-conditioning unit saying that it is
common practice for housewives to have "their presence felt" in the offices of
their husbands and executives to bring their own appliances to their office.
Sections 3 and 4, Rule XIV, Book V of the Omnibus Rules Implementing the
Labor Code, Termination of Employment, provide:
Sec. 3. Preventive suspension. The employer may place the worker concerned
under preventive suspension if his continued employment poses a serious and
imminent threat to the life or property of the employer or of his co-workers.
Sec. 4 Period of suspension. No preventive suspension shall last longer than
30 days. The employer shall thereafter reinstate the worker in his former or in
a substantially equivalent position of the employer may extend the period of
suspension provided that during the period of extension, he pays the wages
and other benefits due to the worker. In such case, the worker shall not be
bound to reimburse the amount paid to him during the extension if the
employer decides, after completion of the hearing, to dismiss the worker.
Petitioner having violated the maximum 30-day preventive suspension under
Section 4, Rule XIV, Book of the Omnibus Rules Implementing the Labor Code,
a sanction is imposed on him in consonance with our ruling in Great Pacific
Life Assurance Corporation v. National Labor Relations Commission, 187 SCRA
694 (1990). Petitioner must indemnify private respondent in the amount of
One Thousand Pesos (P1,000.00).
154. Gaco v NLRC
Doctrine:
Constructive dismissal as a quitting because continued employment is
rendered impossible, unreasonable or unlikely; as, an offer involving a
demotion in rank and a diminution in pay.
Facts:
Petitioner was hired by private respondent on April 17, 1974 for the position
of Picker. In 1975, after a year of service, she was promoted to the position
of Production Recorder. She held this position for a period of fourteen (14)
years until the end of private respondent's working season in 1989. In April,
1990, when petitioner reported for work at the start of the working season for
that year, she found out that her position was already occupied by another
employee and that she was being demoted to the position of Picker.
Petitioner believed that, having been with private respondent for fifteen (15)
years without any derogatory record, her demotion was not justified.
Considering it as constructive dismissal, petitioner thus refused to report for
work and filed a complaint before the Labor Arbiter for payment of separation
pay.
monetary equivalent computed from the time her compensation was withheld
from her up to the time of her actual reinstatement. In ascertaining the total
amount of backwages payable to her, we enunciated in the case of Pines City
Educational Center, et al. v. NLRC, et al. The doctrine that:
. . . we go back to the rule prior to the Mercury Drug rule that the total amount
derived from employment elsewhere by the employee from the date of
reinstatement , if any, should be deducted therefrom. . . .
However, we shall not follow Article 279 of the Labor Code to the letter
regarding the period of backwages in view of the peculiar circumstances of
the present case, namely, "there is now a strained relationship between
(petitioner) and (private respondent) and (petitioner) prays for payment of
separation pay in lieu of reinstatement." Instead, the period thereof shall be
reckoned from the time her compensation was withheld from her, or in April,
1990 up to the finality of our decision.

Issue:
Whether or not Petitioner should be awarded backwages because she was
dismissed illegally.

Ruling:
Court finds merit in the petition and holds that respondent NLRC gravely
abused its discretion when it modified the decision of the Labor Arbiter.

The case of Philippine Japan Active Carbon Corporation, et al. v. NLRC, et al.,
which was cited in the recent case of Lemery Savings and Loan Bank, et al. v.
NLRC. et al., defines constructive dismissal as a quitting because continued
employment is rendered impossible, unreasonable or unlikely; as, an offer
involving a demotion in rank and a diminution in pay. As we have stated
previously, both the Labor Arbiter and respondent NLRC arrived at a factual
finding that petitioner was demoted to her former position without any
justifiable cause. However, they differed in the conclusions they derived
therefrom: the Labor Arbiter considered petitioner's demotion as constructive
dismissal whereas respondent NLRC held that constructive dismissal could not
deduced from the circumstances. On the basis of the foregoing jurisprudence
defining the term constructive dismissal, we sustain the ruling of the Labor
Arbiter and his rationalization thereon. Consequently, petitioner is entitled to
her full backwages, inclusive of allowances, and other benefits or their
155. PhilAm Life v Gramaje
Doctrine:
Constructive dismissal exists when an act of clear discrimination, insensibility
or disdain by an employer has become so unbearable to the employee leaving
him with no option but to forego with his continued employment.
Facts: (yung facts, based sa case, ay perspective ng CA. Ang petitioner na
sinasabi dito sa facts ay ang private respondent gramaje)
Petitioner was employed on October 28, 1997 by private respondent as
Assistant Vice President and Head of the Pensions Department and in
concurrent capacity as Trust Officer of Philam Savings Bank, a Philam Life
subsidiary. She was to be paid P750,000.00 per annum and is entitled to the
benefits given by private respondent to its employees.
Working as Assistant Vice President of Pensions Department of Philamlife,
petitioner was offered an additional position by respondent Cuisia, which was
then resolved and approved by Philam Savings Bank's Board of Directors, for
the position of Head of Trust Banking Division or AVP-Trust Officer on a
concurrent capacity and under a separate compensation.
Effective January 1998, however, petitioner's marketing manager and
marketing officer were immediately transferred to Group Insurance Division.
Petitioner, thereafter, was never given replacements for the marketing
manager and marketing officer, contrary to private respondent Cuisia's
assurance. Thus, petitioner ran the Pensions Department single-handedly with
only one administrative assistant as her staff. Petitioner did the field work, the
desk work the out of town meetings, the client presentations, aside from her
work with the Philam Savings Bank as fund manager, wherein private
respondent Cuisia offered to her for a separate compensation, but has still
remain [sic] unpaid.
Sometime in November, 1998, petitioner availed of her housing and car
benefits and applied for a car loan and housing loan.
On November 18, 1998, however, private respondent through Centeno and
Sotelo, offered her P250,000.00 for her to vacate her position by December
1998. Petitioner declined the offer considering that there was no valid reason
for her to leave. Private respondents Centeno and Sotelo admonished her that
her filing of suit would prompt respondent Cuisia to blacklist her in companies
where he holds directorships and advised her that Philamlife is big and can
stand the long ordeal of justice system, whereas she may not withstand the
phase of the trial. Evidence that this meeting and matter took place was the
formal letter of rejection dated November 25, 1998 sent by petitioner and duly
received by the offices of respondents Cuisia, Centeno and Sotelo.
Also, on December 10, 1998, respondent Centeno declined the car loan benefit
of petitioner, thus:
This refers to your December 1998 memorandum regarding your request for
a car loan. I have earlier discussed your application for a car loan with both
Mr. Anthony B. Sotelo, FVP and Corporate HR Director and Mr. Jose L. Cuisia,
Jr., President and CEO. Considering your present employment status, which
has been the subject of several discussions between you and Messrs. Jose L.
Cuisia, Jr. and Anthony B. Sotelo and myself, we deem it prudent to defer
action on your loan request until such time that the issue is resolved with
definitiveness.
Also, although, it is the tradition of Philamlife to give, during the Christmas
Season, officers and employees a traditional Season's giveaways, i.e., ham
and queso de bola, petitioner then, thru her authorized representatives, asked
for her share, but she was not in the list of recipients. Petitioner's name was
not in the Legal Department, not in the Pensions Department, and not in the
list of employees of Philamlife when verified with the Personnel Department.
Hence, on December 23, 1998, petitioner filed the instant case for illegal or
constructive dismissal against herein private respondents.
Issue:
Was respondent constructively dismissed or was her transfer a legitimate
exercise of management prerogative?
Ruling:
In the case at bar, bad faith and discrimination on the part of petitioner are
profusely perceived from its actions.
First, as early as 23 August 1998, unbeknown to respondent, petitioner had
already advertised in the Manila Bulletin for the former's replacement.16
Respondent was not even notified in advance of an impending transfer.
2nd, the president and ceo already appointed respondent's replacement
despite the fact that she was still on official sick leave.
3rd, Third, the transfer of respondent to the Legal Department was
unreasonable, inconvenient and prejudicial to her. Petitioner must have known
that respondent has no adequate exposure in the field of litigation, and yet
she was transferred to the Legal Department, and as AVP at that. The position
of AVP-Legal would have placed respondent in a very inopportune position undesirable worker. In particular, the employer must be able to show that the
because she would be heading a team of lawyers who are far more transfer is not unreasonable, inconvenient or prejudicial to the employee; nor
experienced than she was in the area of litigation. It was a poor business does it involve a demotion in rank or a diminution of his salaries, privileges
decision and it is unlikely that the officers of petitioner would have made such and other benefits. Should the employer fail to overcome this burden of proof,
a decision, except to inconvenience or prejudice respondent. Under the the employee's transfer shall be tantamount to constructive dismissal, which
circumstances, the decision to transfer was unreasonable. has been defined as a quitting because continued employment is rendered
impossible, unreasonable or unlikely; as an offer involving a demotion in rank
4th, there was, likewise, discrimination against respondent, as shown from the and diminution in pay. Likewise, constructive dismissal exists when an act of
following: clear discrimination, insensibility or disdain by an employer has become so
(a) the Pensions Department was run by respondent with practically no unbearable to the employee leaving him with no option but to forego with his
support from management. continued employment.
(b) respondent tried to avail herself of her car loan benefit sometime in
November 1998 by filing the appropriate application. However, action on this In fine, this Court rules that there was constructive dismissal, and therefore,
application was deferred by Reynaldo Centeno in his letter20 dated 10 the petition must fail.
December 1998, saying that respondent's employment status has been the
subject of several discussions between the high ranking officers of petitioner
(c) it is a tradition on the part of petitioner, during the Christmas season, to
give its officers and employees a season's giveaway, i.e., ham and queso de
bola. Respondent sent an authorized representative to ask for her share, but,
unfortunately, she was not in the list of recipients. Her name was not listed in
the Legal Department, nor in the Pensions Department. Respondent's name,
when verified with the Personnel Department, was not in the list of employees
of Philamlife.

Fifth, as clearly pointed out by respondent, she was offered but formally
rejected the offer of P250,000 for her to leave the company.

we have held that the right and privilege of the employer to exercise the so-
called management prerogative is recognized, and the courts will not interfere
with it. This privilege is inherent in the right of employers to control and
manage their enterprise effectively. The right of employees to security of
tenure does not give them vested rights to their positions to the extent of
depriving management of its prerogative to change their assignments or to
transfer them. Managerial prerogatives, however, are subject to limitations
provided by law, collective bargaining agreements, and general principles of
fair play and justice.25 In the case of Blue Dairy Corporation v. NLRC,26 we
explained the test for determining the validity of the transfer of employees, as
follows:

But, like other rights, there are limits thereto. The managerial prerogative to
transfer personnel must be exercised without grave abuse of discretion,
bearing in mind the basic elements of justice and fair play. Having the right
should not be confused with the manner in which that right is exercised. Thus,
it cannot be used as a subterfuge by the employer to rid himself of an
156. G.R. No. 156963 November 11, 2004
THE PHILIPPINE AMERICAN LIFE AND GENERAL INSURANCE CO.
vs. ANGELITA S. GRAMAJE
DOCTRINE: Constructive dismissal exists when an act of clear discrimination,
insensibility or disdain by an employer has become so unbearable to the
employee leaving him with no option but to forego with his continued
employment.32The circumstances which prevailed in the working environment
of the respondent clearly demonstrate this. The failure of the Labor Arbiter to
resolutely consider these prevailing circumstances before respondent was
asked to transfer was a major flaw in his decision.
FACTS:
Petitioner was employed by private respondent as Assistant Vice President and
Head of the Pensions Department and in concurrent capacity as Trust Officer
of Philam Savings Bank, a Philam Life subsidiary.
Working as Assistant Vice President of Pensions Department of Philamlife,
petitioner was offered an additional position by respondent Cuisia, which was
then resolved and approved by Philam Savings Bank's Board of Directors, for
the position of Head of Trust Banking Division or AVP-Trust Officer on a
concurrent capacity and under a separate compensation.
Effective January 1998, however, petitioner's marketing manager and
marketing officer were immediately transferred to Group Insurance Division.
Petitioner, thereafter, was never given replacements for the marketing
manager and marketing officer, contrary to private respondent Cuisia's
assurance. Thus, petitioner ran the Pensions Department single-handedly with
only one administrative assistant as her staff. Petitioner did the field work, the
desk work (administrative, legal, finance, marketing), the out of town
meetings, the client presentations, aside from her work with the Philam
Savings Bank as fund manager, wherein private respondent Cuisia offered to
her for a separate compensation, but has still remain [sic] unpaid.
However, private respondent through Centeno and Sotelo, offered her
P250,000.00 for her to vacate her position by December 1998. Petitioner
declined the offer considering that there was no valid reason for her to leave.
Private respondents Centeno and Sotelo admonished her that her filing of suit
would prompt respondent Cuisia to blacklist her in companies where he holds
directorships and advised her that Philamlife is big and can stand the long
ordeal of justice system, whereas she may not withstand the phase of the trial.
Cuisia met with petitioner and cajoled her to reconsider and accept the offer
of settlement. Cuisia even volunteered to help her look for another job.
Petitioner declined, and reiterated that the actuations of respondents clearly
intended to harass and humiliate her and have caused her and her family
extreme emotional stress.
Two days after the aforesaid December 6 meeting, respondents issued her a
memorandum instructing her to transfer to the Legal Department effective
December 14, 1998 and to make proper turnover and submit the status report
not later than December 11, 1998.
Petitioner protested the sudden unexplained transfer, more so a non-existing
position, and stressed that she was hired because of her marketing, finance,
and fund management skills, not her legal skills.
Atty. Angelita Gramaje AVP for pensions sustained that Haas must remain in
her pensions department.
Respondent Cuisia through a memorandum appointed Ms. Corine Moralda as
replacement of petitioner as Head of the Pensions Department. It was only at
that time that petitioner learned that as early as August 23, 1998, respondents
had advertised in the Manila Bulletin for her replacement.
A case for illegal or constructive dismissal against PhilAm.
LA: No illegal Dismissal,
NLRC: Affirmed in toto
ISSUE:
WoN, there exist a constructive dismissal.
RULE: YES
While It may be true that in the transfer of respondent from the Pensions
Department to the Legal Department, there was no demotion in rank nor
diminution of the salaries, benefits and privileges. But this is not the only
standard that must be satisfied in order to substantiate the transfer. In the
pursuit of its legitimate business interests, management has the prerogative
to transfer or assign employees from one office or area of operation to another
– provided there is no demotion in rank or diminution of salary, benefits, and
other privileges; and the action is not motivated by discrimination, made in
bad faith, or effected as a form of punishment or demotion without sufficient
cause.11
In the case at bar, bad faith and discrimination on the part of petitioner are
profusely perceived from its actions.
First, unbeknown to respondent, petitioner had already advertised in the
Manila Bulletin for the former's replacement.16 Respondent was not even
notified in advance of an impending transfer.
Second, the President and CEO of petitioner corporation, Jose L. Cuisia, Jr., in
his Memorandum, announced the appointment of respondent's replacement
effective during the time that respondent was still on official sick leave.
Third, the transfer of respondent to the Legal Department was unreasonable,
inconvenient and prejudicial to her. Petitioner must have known that
respondent has no adequate exposure in the field of litigation, and yet she
was transferred to the Legal Department, and as AVP at that. The position of
AVP-Legal would have placed respondent in a very inopportune position
because she would be heading a team of lawyers who are far more
experienced than she was in the area of litigation. It was a poor business
decision and it is unlikely that the officers of petitioner would have made such
a decision, except to inconvenience or prejudice respondent. Under the
circumstances, the decision to transfer was unreasonable.
Fourth, there was, likewise, discrimination against respondent, as shown from
the following: (a) the Pensions Department was run by respondent with
practically no support from management. Respondent was left to fend for
herself, and yet was required to bring in the numbers
In fine, this Court rules that there was constructive dismissal, and therefore,
the petition must fail.
Constructive dismissal exists when an act of clear discrimination, insensibility
or disdain by an employer has become so unbearable to the employee leaving
him with no option but to forego with his continued employment.32The
circumstances which prevailed in the working environment of the respondent
clearly demonstrate this. The failure of the Labor Arbiter to resolutely consider
these prevailing circumstances before respondent was asked to transfer was
a major flaw in his decision.
157. JOEL MENDOZA, Petitioner, v. NATIONAL LABOR RELATIONS
COMMISSION, SAN MIGUEL CORPORATION, MAGNOLIA DIVISION and
CONRAD YUMAN III, Respondents.
DOCTRINE: Due process contemplates freedom from arbitrariness. What it
requires is fairness or justice; the substance rather than the form being
paramount. When a party has been given the opportunity to be heard, then
he was afforded due process.
FACTS:
Petitioner was a regular employee (salesman) of private respondent San
Miguel Corporation (SMC), Magnolia Division, assigned to its Baguio Sales
Office.
On June 2, 1988, petitioner submitted to private respondent Conrad B.
Yumang III, then Regional Sales Supervisor, an accident report that reads as
follows:jgc:chanrobles.com.ph
"This is to inform you about the accident that happened last May 31, 1988 at
around nine thirty to ten thirty in the evening along Holy Ghost in Imelda
Village, Baguio City.
I left the sales office at about 7:05 in the evening after submitting my
remittances on the said date, I was constrained to return to Lina’s Mini-Mart
along Marcos Highway to collect my uncollected cash sales for the purpose
that no short remittance will be reflected on my report due to month ending.
Mr. Nick Villabona came along with me.
While waiting for the owner of the said outlet, Mr. Nick Villabona recalled that
there is a missing freezer, who at that time is conducting a physical freezer
inventory. I suggested that we have to look for it. We were informed that Mr.
Roberto Tan of Bollian’s brought the freezer at the vicinity of Imelda Village.
And then, while we were maneuvering a right turn curve, suddenly two men
crossed the road coming from the left side. To avoid hitting them, I slowed
down and moved the truck a little to the left. Not knowing that the road was
softened by the constant heavy downpour of rain. All of a sudden, the left
shoulder gave way and the truck with Plate No. SMC 408 slowly slipped down
and turned-turtle in its left side. Hitting first the separate kitchen located
infront of the house which was badly damaged and then landed at the left
portion of the house. Because of the incident, we were too confused and
shocked that we proceeded first to the house of Mr. Nick Villabona to inform
his wife. Not knowing what to do, while Nick Villabona was experiencing pain
due to the incident, we decided to go to SLM Hospital for medical check-up
and treatment. From there I called-up the police station to report the accident
that happened.
An investigation followed which submitted Mendoza in a series of questioning.
Despite his plea for help with SMC, petitioner was relieved by private
respondent SMC of the duties and responsibilities as tetra salesman of the
Baguio Sales Office and eventually terminated.
Consequently, petitioner filed a complaint for illegal dismissal with the labor Due process contemplates freedom from arbitrariness. What it requires is
arbiter. fairness or justice; the substance rather than the form being paramount. When
LA: There was illegal dismissal. a party has been given the opportunity to be heard, then he was afforded due
NLRC: Petition has no merit, ruled in favor of SMC. process.
ISSUE:
WoN, there was due process to consequently conclude that the dismissal was
valid.

RULE: YES there was due process.

There can be no dispute about the requirement that before any regular
employee or laborer may be dismissed from service by the employer he must
be given due notice and an opportunity to be heard.

Petitioner contends that the investigation conducted by private respondent

Yumang was only to determine the truth about the reported accident and not
to determine his responsibility arising therefrom and to impose disciplinary
action.

The Court is not impressed. During the investigation it appears that he knew
all the time that the investigation involves his administrative responsibility to
his superior, as he made this statement:

"A Sir tulungan mo naman ako for the lost time, please. I am appealing for
the offense committed which is in your behalf causes you a big problem. I am
really very sorry sir for what has been done. I realized the gravity of my offense
and I know that a heavy penalty would be imposed upon me. And for this, I
am begging for your consideration and hoping that you will extend a helping
hand not just for the but also for my family.

In no uncertain terms he admitted the gravity of his offense and asked that a
heavy penalty should be imposed on him.

At such investigation private respondent SMC found that petitioner violated

the company’s policy on employees conduct on three counts, namely (1)
driving under the influence of liquor; (2) unauthorized use of company vehicle;
and (3) damage to company vehicle which was a total wreck.

The rules laid down by the company for the investigation of an employee
before his termination need not be observed to the letter. It is enough that
there was due notice and a hearing before a judgment or resolution thereof is
made.
158. G.R. No. 114129 October 24, 1996
MANILA ELECTRIC COMPANY
vs. NLRC
DOCTRINE: 1. Article 283 of the Labor Code enumerates the just causes for
termination. Among such causes are the following:
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.
This cause includes gross inefficiency, negligence and carelessness. Such just
causes is derived from the right of the employer to select and engage his
employees. For indeed, regulation of manpower by the company clearly falls
within the ambit of management prerogative.
2. Notice and hearing in termination cases does not connote full
adversarial proceedings as elucidated in numerous cases decided by this
court. 15 The essence of due process is simply an opportunity to be heard, or
as applied to administrative proceedings, an opportunity to explain one's side
FACTS:
Private respondent Jeremias C. Cortez, Jr. was employed on probationary
status by petitioner Manila Electric Company (Meralco) as lineman driver. Six
months later, he was regularized as a 3rd class lineman-driver assigned at
petitioner's North Distribution Division. In 1977, and until the time of his
dismissal, he worked as 1st class lineman-driver whose duties and
responsibilities among others, includes the maintenance of Meralco's
distribution facilities (electric lines) by responding to customer's complaints of
power failure, interruptions, line trippings and other line troubles.
Characteristic, however, of private respondent's service with petitioner is his
perennial suspensions from work.
Due to his numerous infractions, private respondent was administratively
investigated for violation of Meralco's Code on Employee Discipline, particularly
his repeated and unabated absence from work without prior notice from his
superiors specifically from August 2 to September 19, 1989.
After such administrative investigation was conducted by petitioner, it
concluded that private respondent was found to have grossly neglected his
duties by not attending to his work as lineman from Aug. 2, 1989 to September
19, 1989 without notice to his superiors.
In a letter, private respondent was notified of the investigation result and
consequent termination of his services effective January 19, 1990
Respondent filed a complaint for illegal dismissal against petitioner.
LA: The petition was dismissed for lack of merit.
NLRC: Dismissal was illegal.
ISSUE:
WoN, the dismissal was illegal.
RULE: NO.
Article 283 of the Labor Code enumerates the just causes for termination.
Among such causes are the following:
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.
This cause includes gross inefficiency, negligence and carelessness. Such just
causes is derived from the right of the employer to select and engage his
employees. For indeed, regulation of manpower by the company clearly falls
within the ambit of management prerogative. This court had defined a valid
exercise of management prerogative as one which covers: hiring, work
assignment, working methods, time, place and manner of work, tools to be
used, processes to be followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay-off of workers, 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.
Moreover, this Court has upheld a company's management prerogatives so
long as they are exercised in good faith for the advancement of the employer's
interest and not for the purpose of defeating or circumventing the rights of
the employees under special laws or under valid agreements.
In the case at bar, the service record of private respondent with petitioner is
perpetually characterized by unexplained absences and unauthorized sick
leave extensions. The nature of his job i.e. as a lineman-driver requires his
physical presence to minister to incessant complaints often faulted with
electricity.
The penchant of private respondent to continually incur unauthorized
absences and/or a violation of petitioner's sick leave policy finally rendered his
dismissal as imminently proper.
Habitual absenteeism should not and cannot be tolerated by petitioner herein
which is a public utility company engaged in the business of distributing and
selling electric energy within its franchise areas and that the maintenance of
Meralco's distribution facilities (electric lines) by responding to customer's
complaints of power failure, interruptions, line trippings and other line troubles
is of paramount importance to the consuming public.
Hence, an employee's habitual absenteeism without leave, which violated
company rules and regulations is sufficient cause to justify termination from
service. 11
Notice and hearing in termination cases does not connote full adversarial
proceedings as elucidated in numerous cases decided by this court. 15 The
essence of due process is simply an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain one's side.
In this case, private respondent was given the opportunity of a hearing as he
was able to present his defense to the charge against him. Unfortunately,
petitioner found such defense inexcusable. In other words, the fact that 159. G.R. No. 146621 July 30, 2004
private respondent was given the chance to air his side of the story already RENE P. VALIAO,
suffices. vs. CA
DOCTRINE: The totality of infractions or the number of violations committed
during the period of employment shall be considered in determining the
penalty to be imposed upon an erring employee. The offenses committed by
him should not be taken singly and separately but in their totality.

FACTS:
Petitioner Rene Valiao was appointed by private respondent West Negros
College (WNC) as Student Affairs Office (SAO) Director. He was assigned as
Acting Director, Alumni Affairs Office.
Petitioner was transferred to a staff position and designated as Records Chief
at the Registrar’s Office but was again re-assigned as a typist.
The latest re-assignment was due to his tardiness and absences, as reflected
in the summary of tardiness and absences report, which showed him to have
been absent or late for work from a minimum of seven (7) to a maximum of
seventy-five (75) minutes for the, and to have reported late almost every day
for the period November to December 1991.
Copies of his tardiness/absences reports were furnished petitioner, along with
memoranda requiring him to explain but his explanations were either
unacceptable or unsatisfactory. Subsequent reports also showed that he did
not change his habits resulting in tardiness and absences. He was even caught
one time manipulating the bundy clock, thus necessitating another
memorandum to him asking him to explain his dishonest actuations in
accomplishing the daily attendance logbook and in using the bundy clock.
Petitioner was suspended due to dishonesty and after serving the suspension,
the petitioner reported back to office.
Petitioner was reshuffled in various postitions but his absences and tardiness
persists.
He was relieved from his post and transferred to the College of Liberal Arts as
Records Evaluator. Not for long, the Dean of the Liberal Arts sent a letter to
the Human Resources Manager complaining about the petitioner’s poor
performance and habitual absenteeism, as shown in the daily absence reports.
He was again absent from work without permission or notice to his immediate
superior. It turned out that he went to Bacolod City, the petitioner was one of
those arrested during a raid in the house of one "Toto Ruiz," a suspected drug
pusher and was brought to the Bacolod Police Station along with four (4) other
suspects. Upon further search and investigation by the Narcotics Control
Division, the petitioner was found possessing two (2) suspected marijuana
roaches (butts) which were placed inside his left shoe. (LOL noob!)
Petitioner was asked to explain within 24 hours why he should not be
terminated as a result of the raid and the charges against him for violation of
Rep. Act No. 6425 as amended. Petitioner allegedly was not able to answer
immediately since he was in jail and received said memorandum only on also has been warned 21 times for absences without official leave, these
January 30, 1993, although his wife had earlier received the memorandum. repeated acts of misconduct and willful breach of trust by an employee justify
On January 29, 1993, the petitioner was dismissed for failure to answer said his dismissal and forfeiture of his right to security of tenure. 11 The totality of
memorandum. infractions or the number of violations committed during the period of
Petitioner requested for due process and was granted. employment shall be considered in determining the penalty to be imposed
After the investigation attended by the petitioner and his counsel, with upon an erring employee. The offenses committed by him should not be taken
proceedings duly recorded, the investigation committee recommended the singly and separately but in their totality. Fitness for continued employment
dismissal of petitioner. A notice of termination was then sent to petitioner cannot be compartmentalized into tight little cubicles of aspects of character,
informing him of his termination from the service for serious misconduct and conduct, and ability separate and independent of each other.12
gross and habitual neglect of duty. The petitioner received the notice on March Needless to say, so irresponsible an employee like petitioner does not deserve
25, 1993, but did not file a grievance concerning the notice of termination. a place in the workplace, and it is within the management’s prerogative of
A petition for illegal dismissal was filed. WNC to terminate his employment.
LA ruled the dismissal was valid due to absenteeism and tardiness.
NLRC: Affirmed.
CA: Affirmed NLRC
ISSUE: WoN the dismissal was valid.
RULE: YES
Considering the submissions of the parties as well as the records before us,
we find the petition without merit. Petitioner’s dismissal from employment is
valid and justified.
For an employee’s dismissal to be valid, (a) the dismissal must be for a valid
cause and (b) the employee must be afforded due process. 7
Serious misconduct and habitual neglect of duties are among the just causes
for terminating an employee under the Labor Code of the Philippines. Gross
negligence connotes want of care in the performance of one’s duties. Habitual
neglect implies repeated failure to perform one’s duties for a period of time,
depending upon the circumstances.8The Labor Arbiter’s findings that
petitioner’s habitual absenteeism and tardiness constitute gross and habitual
neglect of duties that justified his termination of employment are sufficiently
supported by evidence on record. This Court has held that habitual
absenteeism without leave constitute gross negligence and is sufficient to
justify termination of an employee.9
However, petitioner claims that he was dismissed not for his tardiness or
absences but for his arrest as a suspected drug user. His claim, however, is
merely speculative. Contrary to petitioner’s assertion, the NLRC did not base
its conclusions on the fact of the arrest of petitioner for violation of Rep. Act
No. 6425 but on the totality of the number of infractions incurred by the
petitioner during the period of his employment in different positions he
occupied at WNC.
Indeed, even without the arrest incident, WNC had more than enough basis
for terminating petitioner from employment. It bears stressing that petitioner’s
absences and tardiness were not isolated incidents but manifested a pattern
of habituality. In one case, we held that where the records clearly show that
the employee has not only been charged with the offense of highgrading but
160. GATUS v. QUALITY
DOCTRINE:
The law itself only requires, “ample opportunity to be heard” The essence of
the requirement as an element of due process in administrative proceedings
is the chance to explain one’s side. Jurisprudence has amply clarified that
administrative due process cannot be fully equated with due process in a
judicial sense, and that there is no violation of due process even if no formal
or actual hearing was conducted, provided a party is given the chance to
explain his side. What is frowned upon is the denial of the opportunity to be
heard.
In cases of termination for a just cause, an employee must be given ample
opportunity to be heard and to defend himself. Thus, the opportunity to be
head afforded by law to the employee is qualified by the word ample which
ordinarily means, “considerably more than adequate or sufficient” In this
regard, the phrase, “ample opportunity to be heard” can be reasonably
interpreted as extensive enough to cover actual hearing and conference.
The "ample opportunity to be heard" standard is neither synonymous nor
similar to a formal hearing. To confine the employee’s right to be heard to a
solitary form narrows down that right. It deprives him of other equally effective
forms of adducing evidence in his defense. Certainly, such an exclusivist and
absolutist interpretation is overly restrictive. The "very nature of due process
negates any concept of inflexible procedures universally applicable to every
imaginable situation."
The standard for the hearing requirement, ample opportunity, is couched in
general language revealing the legislative intent to give some degree of
flexibility or adaptability to meet the peculiarities of a given situation. To
continue it to a single rigid proceeding such as a formal hearing will defeat its
spirit.
The Labor Code itself provides that the so-called standards of due process
outline therein shall be observed "substantially," not strictly. This is a
recognition that while a formal hearing or conference is ideal, it is not an
absolute, mandatory or exclusive avenue of due process.
A hearing means that a party should be given a chance to adduce his evidence
to support his side of the case and that the evidence should be taken into
account in the adjudication of the controversy. "To be heard" does not mean
verbal argumentation inasmuch as one may be heard just as effectively
through written explanations, submissions or pleadings. Therefore, while the
phrase "ample opportunity to be heard" may in fact include an actual hearing,
it is not limited to a formal hearing only. In other words, the existence of an
actual, formal "trial type" hearing, although preferred is not absolutely
necessary to satisfy the employee’s right to be heard.
FACTS:
Petitioner is this case was placed under preventive suspension when she
instigated her husband who mauled Enchavez. It was alleged that petitioner
was having difficulty with work due to Enchavez and several colleagues due to
her trade union activities because she did not join PAFLU. Due to humiliation
and harassment, she was compelled to tell he husband which enraged the
latter. Petitioner filed a complaint for illegal suspension against respondents.
Respondent terminated her employment. Petitioner amended her complaint to
unfair labor practice and illegal dismissal with claims for moral and exemplary
damages. Respondents replied and narrated the infractions committed by the
petitioner that showed her poor work attitude which she received the penalties
of reprimand and two suspensions. Last infraction was when she instigated
her husband to maul Enchavez. LA dismissed the complaint finding no
substantial proof that the company committed unfair labor practice. NLRC
affirmed the decision of LA but was reversed upon motion for reconsideration.
CA reversed the decision of NLRC for grave abuse of discretion amounting to
lack of jurisdiction.
ISSUE:
Whether Petitioner was illegally terminated.
RULING:
Yes, petitioner was dismissed for a just cause. The mauling incident that
resulted from the instigation of the petitioner shows her to be unfit to continue
working for her employer. Her admitted grievances translated into the
concrete act of violence performed against her supervisor who represented
her employer. Her continuous employment would cause undue strain in the
workplace. Taken lightly, the incident would inspire the breakdown of respect phrase "ample opportunity to be heard" may in fact include an actual hearing,
and discipline among the workforce. it is not limited to a formal hearing only. In other words, the existence of an
actual, formal "trial type" hearing, although preferred is not absolutely
The petitioner was given due process. The law itself only requires, “ample
necessary to satisfy the employee’s right to be heard.
opportunity to be heard” The essence of the requirement as an element of
due process in administrative proceedings is the chance to explain one’s side.
Jurisprudence has amply clarified that administrative due process cannot be
fully equated with due process in a judicial sense, and that there is no violation
of due process even if no formal or actual hearing was conducted, provided a
party is given the chance to explain his side. What is frowned upon is the
denial of the opportunity to be heard.

In cases of termination for a just cause, an employee must be given ample

opportunity to be heard and to defend himself. Thus, the opportunity to be
head afforded by law to the employee is qualified by the word ample which
ordinarily means, “considerably more than adequate or sufficient” In this
regard, the phrase, “ample opportunity to be heard” can be reasonably
interpreted as extensive enough to cover actual hearing and conference.

The "ample opportunity to be heard" standard is neither synonymous nor

similar to a formal hearing. To confine the employee’s right to be heard to a
solitary form narrows down that right. It deprives him of other equally effective
forms of adducing evidence in his defense. Certainly, such an exclusivist and
absolutist interpretation is overly restrictive. The "very nature of due process
negates any concept of inflexible procedures universally applicable to every
imaginable situation."

The standard for the hearing requirement, ample opportunity, is couched in

general language revealing the legislative intent to give some degree of
flexibility or adaptability to meet the peculiarities of a given situation. To
continue it to a single rigid proceeding such as a formal hearing will defeat its
spirit.

The Labor Code itself provides that the so-called standards of due process
outline therein shall be observed "substantially," not strictly. This is a
recognition that while a formal hearing or conference is ideal, it is not an
absolute, mandatory or exclusive avenue of due process.

A hearing means that a party should be given a chance to adduce his evidence
to support his side of the case and that the evidence should be taken into
account in the adjudication of the controversy. "To be heard" does not mean
verbal argumentation inasmuch as one may be heard just as effectively
through written explanations, submissions or pleadings. Therefore, while the
 reinstatement. NLRC reversed the decision of LA and motion for
reconsideration was denied.
161. ABIERA v. NLRC

ISSUE:
DOCTRINE :
Whether RPB failed to comply with the requirements of due process.
The twin requirements of notice and hearing constitute the essential elements
of due process. Neither of these elements can be omitted without running
afoul of the constitutional guaranty.
RULING:
Ample opportunity connotes every kind of assistance that management must
No, RPB did not fail to comply with the requirements of due process. The twin
accord the employee to enable him to prepare adequately for his defense
requirements of notice and hearing constitute the essential elements of due
including legal representation. A formal trial-type hearing is not at all times
process. Neither of these elements can be omitted without running afoul of
and in all instances essential to due process. It is enough that the parties are
the constitutional guaranty.
given a fair and reasonable opportunity to explain their respective sides of the
controversy and to present supporting evidence on which a fair decision can The first element was not violated because petitioner was duly notified of the
be based. specification charges and invited to appear at the hearing scheduled for
investigation. He was even advised to bring a lawyer with him if he so desired.

The requirement of hearing was also observed. The petitioner cannot say he
FACTS:
was deprived of this right because the records shows that he was duly afforded
Petitioner was a manager of RPB was dismissed on the ground of loss of ample opportunity to defend himself and introduce evidence on his behalf.
confidence. The branch was subject to audit by the internal auditors of RPB’s
Ample opportunity connotes every kind of assistance that management must
head office. Abiera applied for a vacation leave for two weeks. Upon his return,
accord the employee to enable him to prepare adequately for his defense
petitioner received a memorandum from the Executive Vice President of the
including legal representation. A formal trial-type hearing is not at all times
bank requiring him to submit his response to the internal audit report. Th
and in all instances essential to due process. It is enough that the parties are
report suggested his participation to several violations. He was not allowed to
resume his position for the meantime and the RPB extended his leave of given a fair and reasonable opportunity to explain their respective sides of the
controversy and to present supporting evidence on which a fair decision can
absence.
be based.
Petitioner received a memorandum containing the charges which is required
to explain. He was also asked to bring a counsel who can assist him during
the hearing. He however, appeared without the assistance of any counsel since
he believed that the preliminary hearing will be informal. He was then placed
under preventive suspension for thirty days without pay to which he protested
alleging that the preliminary hearing was procedurally defective.

Petitioner demanded to access RPB to branch records, transcripts of the

hearings, the opportunity to confront witnesses against him, the services of a
legal counsel, and such other rights pertaining to him in an administrative
case, however, he was ignored. He was dismissed. LA ordered his
162. DEL MONTE v. SALDIVAR as a ground for dismissal from Del Monte. It might be suggested that expulsion
from Union will render Del Monte no choice but to implement the CBA
provisions and cause dismissal. Yet deciding the problem from such a closed
DOCTRINE perspective would virtually guarantee unmitigated discretion on the part of the
union terminating the employment status of individual employee. What the
Even if dismissal of an employee is conditioned not on the ground for Constitution does recognize is that all workers, whether union member or not,
termination under the Labor Code but pursuant to the provisions of a CBA, it are “entitled to security of tenure” The guarantee of security of tenure itself is
is still necessary to observe substantive due process in order to validate the implemented through legislation, which lays down the proper standards in
dismissal. As applied to the dismissal grounded on the violation of CBA, determining whether such right was violated.
observance of substantial due process is indispensable in establishing the
presence of the cause or causes for dismissal as provided for the CBA. Even if dismissal of an employee is conditioned not on the ground for
termination under the Labor Code but pursuant to the provisions of a CBA, it
is still necessary to observe substantive due process in order to validate the
dismissal. As applied to the dismissal grounded on the violation of CBA,
FACTS:
observance of substantial due process is indispensable in establishing the
ALU is the exclusive bargaining agent of plantation worker of petitioner presence of the cause or causes for dismissal as provided for the CBA.
corporation. Respondent. Private respondent is a member of the union was
charged with disloyalty along with 4 other employees, for defecting to rival
union NFL. It was alleged that Timbal was given an honorarium for attending
union meetings and recruiting new members for NFL. Disloyalty board
concluded that Timbal was guilty of acts or conduct inimical to the interest of
ALU, and recommended expulsion of membership in ALU and dismissal from
Del Monte in accordance with the union Security Clause in the existing CBA
between ALU and Del Monte. Timbal and other co-workers were expelled from
the union and was dismissed by Del Monte.

Separate complaints were filed against Del Monte and ALU with Regional
Arbitration Branch for Illegal dismissal, unfair labor practice and damages.
These complaints were consolidated. LA ordered that the respondents be
reinstated. NLRC reveresed the decision of LA. CA found that Del Monte failed
to observe procedural due process.

ISSUE:

Whether Del Monte failed to observe due process.

RULING:

Yes, Del Monte failed to observe due process. Timbal’s expulsion was premised
on the ground of disloyalty to the union which was under the CBA, also stands
163. KING OF KINGS v. DELA FUENTE present case, the CA affirmed the findings of the LA and NLRC that the
termination of employment was based on “just cause”.

Respondent was not issued a written notice charging him of committing an

DOCTRINE:
infraction. A verbal appraisal of the charges against an employee does not
Due process under the Labor Code involves substantive due process which is comply with the first notice requirement.
the valid and authorized causes of termination of employment under the labor
Even assuming that KKTI was able to furnish respondent an Irregularity Report
code and procedural due process which is the manner of dismissal.
notifying him of his offense, such would not comply with the requirement of
the law. Irregularity reports against respondent for his other offenses that
such contained merely a general description of the charges against him. This
FACTS: report did not even state a company rule or policy that the employee had
allegedly violated. There is no mention of any of the grounds for termination
Respondent was hired as a bus conductor of DMTC. DMTC employees
of employment. There was also no hearing that was conducted. Regardless of
including respondent formed the DMTC-TWU and registered it with DOLE.
respondent’s written explanation, a hearing was still necessary in order for him
Pending the holding of a certification election in DMTC, KKTI was incorporated
to clarify and present evidence in support of his defense.
with SEC which acquired new buses. Many DMTC employees were
subsequently transferred to KKTI and excluded from the elections.

Respondent required to accomplish a Conductor’s trip report and submit it to

the company after each trip which shall be audited. An audit report showed
an irregularity and discovered that respondent declared several sold tickets as
returned tickets causing KKTI to lose an income of eight hundred ninety pesos.
KKTI asked respondent to explain the discrepancy. In his letter, respondent
replied that it the erroneous report was unintentional. He was later terminated
in his employment.

A complaint for illegal dismissal was filed LA dismissed the complaint and the
NLRC affirmed the ruling of the LA. CA likewise affirmed the decision of the LA
and NLRC with modifications as KKTI did not comply with the required due
process.

ISSUE:

Whether KKTI did not comply with the required due process.

RULING:

Due process under the Labor Code involves substantive due process which is
the valid and authorized causes of termination of employment under the labor
code and procedural due process which is the manner of dismissal. In the
164. WENPHIL CORPORATION vs. NATIONAL LABOR RELATIONS
COMMISSION AND ROBERTO MALLARE
Doctrine: The Court holds that the policy of ordering the reinstatement to the
service of an employee without loss of seniority and the payment of his wages
during the period of his separation until his actual reinstatement but not
exceeding three (3) years without qualification or deduction, when it appears
he was not afforded due process, although his dismissal was found to be for
just and authorized cause in an appropriate proceeding in the Ministry of Labor
and Employment, should be re-examined. It will be highly prejudicial to the
interests of the employer to impose on him the services of an employee who
has been shown to be guilty of the charges that warranted his dismissal from
employment. Indeed, it will demoralize the rank and file if the undeserving, if
not undesirable, remains in the service.
Facts: Private respondent Mallare had an altercation with a co-employee. The
following day, the Operations Manager served them memorandum of
suspension and in the afternoon of that same day, Mallare was dismissed from
work. Labor Arbiter dismissed Mallare’s petition for unfair labor practice for
lack of merit. NLRC reversed the decision and ordered the reinstatement of
Mallare with full backwages of one year without qualification and deduction.
Issue: Whether or not an employee dismissed for just cause but without due
process be reinstated to work?
Ruling: No, the basic requirement of due proves is that which hears before it
condemns, proceeds upon inquiry and renders judgment only after trial. The
dismissal of an employee must be for a just cause and after due process.
Petitioner committed an infraction of the second requirement thus it must be
imposed a sanction for its failure to give a formal notice and conduct an
investigation as required by law before dismissing Mallare from employment.
Petitioner must indemnify the dismissed employee which depends on the facts
of each case and the gravity of the omission committed by the employer.
The Court holds that the policy of ordering the reinstatement to the service of
an employee without loss of seniority and the payment of his wages during
the period of his separation until his actual reinstatement but not exceeding
three (3) years without qualification or deduction, when it appears he was not
afforded due process, although his dismissal was found to be for just and
authorized cause in an appropriate proceeding in the Ministry of Labor and
Employment, should be re-examined. It will be highly prejudicial to the
interests of the employer to impose on him the services of an employee who
has been shown to be guilty of the charges that warranted his dismissal from
employment. Indeed, it will demoralize the rank and file if the undeserving, if
not undesirable, remains in the service.
Thus in the present case, where the private respondent, who appears to be of
violent temper, caused trouble during office hours and even defied his
superiors as they tried to pacify him, should not be rewarded with re-
employment and back wages. It may encourage him to do even worse and
will render a mockery of the rules of discipline that employees are required to
observe. Under the circumstances the dismissal of the private respondent for
just cause should be maintained. He has no right to return to his former
employer.
However, the petitioner must nevertheless be held to account for failure to
extend to private respondent his right to an investigation before causing his
dismissal. The rule is explicit as above discussed. The dismissal of an employee
must be for just or authorized cause and after due process. 5 Petitioner
committed an infraction of the second requirement. Thus, it must be imposed
a sanction for its failure to give a formal notice and conduct an investigation
as required by law before dismissing petitioner from employment. Considering
the circumstances of this case petitioner must indemnify the private
respondent the amount of P1,000.00. The measure of this award depends on
the facts of each case and the gravity of the omission committed by the
employer.
WHEREFORE, the petition is GRANTED. The questioned decision of the public
respondent NLRC dated October 16, 1987 for the reinstatement with back
wages of private respondent is REVERSED AND SET ASIDE, and the decision
of the labor arbiter dated December 3, 1986 dismissing the complaint is
revived and affirmed, but with the modification that petitioner is ordered to
indemnify private respondent in the amount of P1,000.00. The restraining
order issued by this Court on December 2, 1987 is hereby made permanent
and the bond posted by petitioner is cancelled. This decision is immediately
executor.

165. RUBEN SERRANO, Petitioner, v. NLRC
Doctrine: If the Wenphil rule imposing a fine on an employer who is found to
have dismissed an employee for cause without prior notice is deemed
ineffective in deterring employer violations of the notice requirement, the
remedy is not to declare the dismissal void if there are just or valid grounds
for such dismissal or if the termination is for an authorized cause. That would
be to uphold the right of the employee but deny the right of the employer to
dismiss for cause. 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.
We hold, therefore, that, with respect to Art. 283 of the Labor Code, the
employer’s failure to comply with the notice requirement does not constitute
a denial of due process but a mere failure to observe a procedure for the
termination of employment which makes the termination of employment
merely ineffectual.
Facts: Serrano was a regular employee of Isetann Department Store as the
head of Security Checker. In 1991, as a cost-cutting measure, Isetann phased
out its entire security section and engaged the services of an independent
security agency. Petitioner filed a complaint for illegal dismissal among others.
Labor arbiter ruled in his favor as Isetann failed to establish that it had
retrenched its security section to prevent or minimize losses to its business;
that private respondent failed to accord due process to petitioner; that private
respondent failed to use reasonable standards in selecting employees whose
employment would be terminated. NLRC reversed the decision and ordered
petitioner to be given separation pay.
Issue: Whether or not the hiring of an independent security agency by the
private respondent to replace its current security section a valid ground for the
dismissal of the employees classed under the latter?
Ruling: Petitioner’s contention has no merit. An employer’s good faith in
implementing a redundancy program is not necessarily put in doubt by the
availment of the services of an independent contractor to replace the services
of the terminated employees to promote economy and efficiency. Absent proof
that management acted in a malicious or arbitrary manner, the Court will not
interfere with the exercise of judgment by an employer.
If termination of employment is not for any of the cause provided by law, it is
illegal and the employee should be reinstated and paid backwages. To contend
that even if the termination is for a just cause, the employee concerned should
be reinstated and paid backwages would be to amend Art 279 by adding
another ground for considering dismissal illegal.
If it is shown that the employee was dismissed for any of the causes mentioned
in Art 282, the in accordance with that article, he should not be reinstated but
must be paid 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 without
legal effect.
If the Wenphil rule imposing a fine on an employer who is found to have
dismissed an employee for cause without prior notice is deemed ineffective in
deterring employer violations of the notice requirement, the remedy is not to
declare the dismissal void if there are just or valid grounds for such dismissal
or if the termination is for an authorized cause. That would be to uphold the
right of the employee but deny the right of the employer to dismiss for cause.
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.
We hold, therefore, that, with respect to Art. 283 of the Labor Code, the
employer’s failure to comply with the notice requirement does not constitute
a denial of due process but a mere failure to observe a procedure for the
termination of employment which makes the termination of employment
merely ineffectual.
In sum, we hold that if 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 in accordance with Art. 283, to wit:
In case of termination due to the installation of labor-saving devices or
redundancy, the worker affected thereby shall be entitled to a separation pay
equivalent to at least his one (1) month pay or to at least one month for every
year of service, whichever is higher. In case of retrenchment to prevent losses
and in cases of closures or cessation of operations of establishment or
undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or at least one-half
(1/2) month pay for every year of service, whichever is higher. A fraction of
at least six months shall be considered one (1) whole year.
WHEREFORE, the petition is GRANTED and the resolution of the National Labor
Relations Commission is MODIFIED by ordering private respondent Isetann
Department Store, Inc. to pay petitioner separation pay equivalent to one (1)
month pay for every year of service, his unpaid salary, and his proportionate
13th month pay and, in addition, full backwages from the time his employment
was terminated on October 11, 1991 up to the time the decision herein
becomes final. For this purpose, this case is REMANDED to the Labor Arbiter
for computation of the separation pay, backwages, and other monetary 166. JENNY M. AGABON and VIRGILIO C. AGABON, Petitioners, v. NATIONAL
awards to petitioner. LABOR RELATIONS COMMISSION (NLRC), RIVIERA HOME IMPROVEMENTS,
INC. and VICENTE ANGELES, Respondents.

Doctrine: The rationale for the re-examination of the Wenphil doctrine in

Serrano was the significant number of cases involving dismissals without
requisite notices. We concluded that the imposition of penalty by way of
damages for violation of the notice requirement was not serving as a deterrent.
Hence, we now required payment of full backwages from the time of dismissal
until the time the Court finds the dismissal was for a just or authorized cause.
Serrano was confronting the practice of employers to "dismiss now and pay
later" by imposing full backwages. After carefully analyzing the consequences
of the divergent doctrines in the law on employment termination, we believe
that in cases involving dismissals for cause but without observance of the twin
requirements of notice and hearing, the better rule is to abandon the Serrano
doctrine and to follow Wenphil by holding that the dismissal was for just cause
but imposing sanctions on the employer. Such sanctions, however, must be
stiffer than that imposed in Wenphil. By doing so, this Court would be able to
achieve a fair result by dispensing justice not just to employees, but to
employers as well.
Abandonment is the deliberate and unjustified refusal of an employee to
resume his employment. For a valid finding or abandonment, two factors are
considered: failure to report for work without a valid reason; and, a clear
intention to sever employer-employee relationship with the second as the
more determinative factor which is manifested by overt acts from which it may
be deduced that the employees has no more intention to work.
Facts: Petitioners were employed by Riviera Home as gypsum board and
cornice installers from January 1992 to February 23, 1999 when they were
dismissed for abandonment of work. Petitioners filed a complaint for illegal
dismissal and was decided in their favor by the Labor Arbiter. Riviera appealed
to the NLRC contending just cause for the dismissal because of petitioner’s
abandonment of work. NLRC ruled there was just cause and petitioners were
not entitled to backwages and separation pay. The CA in turn ruled that the
dismissal was not illegal because they have abandoned their work but ordered
the payment of money claims.
Issue: Whether or not petitioners were illegally dismissed?
Ruling: To dismiss an employee, the law required not only the existence of a
just and valid cause but also enjoins the employer to give the employee the
right to be heard and to defend himself. Abandonment is the deliberate and
unjustified refusal of an employee to resume his employment. For a valid
finding or abandonment, two factors are considered: failure to report for work
without a valid reason; and, a clear intention to sever employer-employee
relationship with the second as the more determinative factor which is
manifested by overt acts from which it may be deduced that the employees
has no more intention to work. In February 1999, petitioners were frequently later” which we sought to deter in Serrano ruling. The violation of employees’
absent having subcontracted for an installation work for another company. rights warrants the payment of nominal damages.
Subcontracting for another company clearly showed the intention to sever the The violation of the petitioners' right to statutory due process by the private
employer-employee relationship with private respondent. This was not the first respondent warrants the payment of indemnity in the form of nominal
time they did this. In January 1996, they did not report for work because they damages. The amount of such damages is addressed to the sound discretion
were working for another company. Private respondent at that time warned of the court, taking into account the relevant circumstances.40 Considering
petitioners that they would be dismissed if this happened again. Petitioners the prevailing circumstances in the case at bar, we deem it proper to fix it at
disregarded the warning and exhibited a clear intention to sever their P30,000.00. We believe this form of damages would serve to deter employers
employer-employee relationship. The record of an employee is a relevant from future violations of the statutory due process rights of employees. At the
consideration in determining the penalty that should be meted out to him. very least, it provides a vindication or recognition of this fundamental right
Procedurally, (1) if the dismissal is based on a just cause under Article 282, granted to the latter under the Labor Code and its Implementing Rules.
the employer must give the employee two written notices and a hearing or
opportunity to be heard if requested by the employee before terminating the
employment: a notice specifying the grounds for which dismissal is sought a
hearing or an opportunity to be heard and after hearing or opportunity to be
heard, a notice of the decision to dismiss; and (2) if the dismissal is based on
authorized causes under Articles 283 and 284, the employer must give the
employee and the Department of Labor and Employment written notices 30
days prior to the effectivity of his separation.
Where the employer had a valid reason to dismiss an employee but did not
follow the due process requirement, the dismissal may be upheld but the
employer will be penalized to pay an indemnity to the employee. This became
known as the Wenphil Doctrine of the Belated Due process Rule.
The rationale for the re-examination of the Wenphil doctrine in Serrano was
the significant number of cases involving dismissals without requisite notices.
We concluded that the imposition of penalty by way of damages for violation
of the notice requirement was not serving as a deterrent. Hence, we now
required payment of full backwages from the time of dismissal until the time
the Court finds the dismissal was for a just or authorized cause.
Serrano was confronting the practice of employers to "dismiss now and pay
later" by imposing full backwages. After carefully analyzing the consequences
of the divergent doctrines in the law on employment termination, we believe
that in cases involving dismissals for cause but without observance of the twin
requirements of notice and hearing, the better rule is to abandon the Serrano
doctrine and to follow Wenphil by holding that the dismissal was for just cause
but imposing sanctions on the employer. Such sanctions, however, must be
stiffer than that imposed in Wenphil. By doing so, this Court would be able to
achieve a fair result by dispensing justice not just to employees, but to
employers as well.
Art 279 means that the termination is illegal if it is not for any of the justifiable
or authorized by law. Where the dismissal is for a just cause, the lack of
statutory due process should not nullify the dismissal but the employer should
indemnify the employee for the violation of his statutory rights. The indemnity
should be stiffer to discourage the abhorrent practice of “dismiss now, pay
167. JAKA FOOD PROCESSING CORPORATION, Petitioners, v. DARWIN its welfare. The exception is when the closure of business or cessation of
PACOT, ROBERT PAROHINOG, DAVID BISNAR, MARLON DOMINGO, RHOEL operations is due to serious business losses or financial reverses; duly proved,
LESCANO and JONATHAN CAGABCAB, Respondents. in which case, the right of affected employees to separation pay is lost for
Facts: Respondents were hired by JAKA until their termination on August 29, obvious reasons. The Statement of Income and Deficit of the respondent-
1997 because the Corporation was “in dire financial straits”. It was not appellant corporation to prove its alleged losses was prepared by an
disputed that they were terminated without complying with the requirement independent auditor, SGV & Co. It convincingly showed that the respondent-
under Art. 283 of the Labor Code regarding the service of notice upon the appellant corporation was in dire financial straits, which the complainants-
employees and DOLE at least one month before the intended date of appellees failed to dispute. The losses incurred by the respondent-appellant
termination. corporation are clearly substantial and sufficiently proven with clear and
Issue: Whether or not full backwages and separation pay be awarded to satisfactory evidence.
respondents when employers effected termination without complying with the WHEREFORE, the instant petition is GRANTED. Accordingly, the assailed
twin notice rule? decision and resolution of the Court of Appeals respectively dated November
Ruling: The difference between Agabon and the instant case is that in the 16, 2001 and January 8, 2002 are hereby SET ASIDE and a new one entered
former, the dismissal was based on a just cause under Article 282 of the Labor upholding the legality of the dismissal but ordering petitioner to pay each of
Code while in the present case, respondents were dismissed due to the respondents the amount of P50,000.00, representing nominal damages for
retrenchment, which is one of the authorized causes under Article 283 of the non-compliance with statutory due process.
same Code.
A dismissal for just cause under Article 282 implies that the employee
concerned has committed, or is guilty of, some violation against the employer,
i.e. the employee has committed some serious misconduct, is guilty of some
fraud against the employer, or, as in Agabon, he has neglected his duties.
Thus, it can be said that the employee himself initiated the dismissal process.
The dismissal of the respondents was for an authorized cause under Article
283. A dismissal for authorized cause does not necessarily imply delinquency
or culpability on the part of the employee. Instead, the dismissal process is
initiated by the employer’s exercise of his management prerogative, i.e. when
the employer opts to install labor-saving devices, when he decides to cease
business operations or when he undertakes to implement a retrenchment
program.

Accordingly, it is wise to hold that: 1) if the dismissal is based on a just cause

but the employer failed to comply with the notice requirement, the sanction
to be imposed upon him should be tempered because the dismissal was initiate
by an act imputable to the employee; 2) if the dismissal is based on an
authorized cause but the employer fails to comply with the notice requirement,
the sanction should be stiffer because the dismissal process was initiated by
the employer’s exercise of his management prerogative. Thus, dismissal was
upheld but ordered JAKA to pay each of the respondents the amount of PhP
50,000.00 representing nominal damages for non-compliance with statutory
due process.
The rule, therefore, is that in all cases of business closure or cessation of
operation or undertaking of the employer, the affected employee is entitled to
separation pay. This is consistent with the state policy of treating labor as a
primary social economic force, affording full protection to its rights as well as