TERMINATION

 EMPLOYEE NOT REQUIRED TO PROVE INNOCENCE OF THE CHARGE LEVELED AGAINST HIM

The private respondent's allegation of non-payment of these benefits, to which he is by law entitled, is a negative allegation which need not be supported by evidence unless it is an essential part of the cause of action. It must be noted that the main cause of action of the private respondent is his illegal dismissal, and the claim for the monetary benefits is but an incident of the protest against such dismissal. Thus, the burden of proving that payment of said benefits has been made rests upon the party who will suffer if no evidence at all is presented by either party, that is, the petitioners as private respondent's employer.||| (Philippine Transmarine Carriers, Inc. v. Carilla, G.R. No. 157975, [June 26, 2007], 552 PHIL 652-668)


MANAGEMENT PREROGATIVE

 LABOR LAW; MANAGEMENT PREROGATIVE, VALIDLY EXERCISED IN CASE AT BAR. — Public respondent was correct in holding that the CDS is a valid exercise of management prerogatives: "Except as limited by special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, 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 work. . . . (NLU vs. Insular La Yebana Co., 2 SCRA 924; Republic Savings Bank vs. CIR, 21 SCRA 226, 235.)" (Perfecto V. Hernandez, Labor Relations Law, 1985 Ed., p. 44.) Every business enterprise endeavors to increase its profits. In the process, it may adopt or devise means designed towards that goal. So long as a company's management prerogatives 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, this Court will uphold them (LVN Pictures Workers vs. LVN, 35 SCRA 147; Phil. American Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634; Phil. Refining Co. vs. Garcia, 18 SCRA 110). San Miguel Corporation's offer to compensate the members of its sales force who will be adversely affected by the implementation of the CDS, by paying them a so-called "back adjustment commission" to make up for the commissions they might lose as a result of the CDS, proves the company's good faith and lack of intention to bust their union.||| (San Miguel Brewery Sales Force Union v. Ople, G.R. No. 53515, [February 8, 1989], 252 PHIL 27-31)


 JUST CAUSE FOR TERMINATION 

In analogous causes for termination like inefficiency, drug use, and others, the NLRC or the courts may opt to grant separation pay anchored on social justice in consideration of the length of service of the employee, the amount involved, whether the act is the first offense, the performance of the employee and the like, using the guideposts enunciated in PLDT on the propriety of the award of separation pay.||| (Toyota Motor Phils. Corp. Workers Association v. National Labor Relations Commission, G.R. Nos. 158786, 158789 & 158798-99, [October 19, 2007], 562 PHIL 759-817)


EMPLOYER MUST PROVE FACT OF DISMISSAL FIRST

In the absence then of petitioner's written conformity to the deduction of the 10% tithe from her salary, the deduction made by Forest Hills was illegal.

Finally, on petitioner's claim that Forest Hills did not remit her SSS contributions, Villar v. National Labor Relations Commission enlightens:

. . . [T]he burden of proving payment of monetary claims rests on the employer. . . .

The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents — which will show that overtime, differentials, service incentive leave and other claims of workers have been paid — are not in the possession of the worker but in the custody and absolute control of the employer.

||| (Labadan v. Forest Hills Academy, G.R. No. 172295, [December 23, 2008], 595 PHIL 859-869)

In an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal of an employee was for a valid cause. However, before a case for illegal dismissal can prosper, an employer-employee relationship must first be established.||| (Javier v. Fly Ace Corp., G.R. No. 192558, [February 15, 2012], 682 PHIL 359-376)


SERIOUS MISCONDUCT

Misconduct has been defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. Such misconduct, however, serious, must nevertheless be in connection with the employee's work to constitute just cause for his separation. Thus, for misconduct or improper behavior to be a just cause for dismissal, (a) it must be serious; 

(b) must relate to the performance of the employee's duties; and 

(c) must show that the employee has become unfit to continue working for the employer. Indeed, an employer may not be compelled to continue to employ such person whose continuance in the service would be patently inimical to his employer's interest.||| (Torreda v. Toshiba Information Equipment (Phils.), Inc., G.R. No. 165960, [February 8, 2007], 544 PHIL 71-94)


FIGHTING WITHIN THE COMPANY PREMISES

these guideposts were not complied with in the instant case. Although we have recognized that fighting within company premises may constitute serious misconduct, we have also held that not every fight within company premises in which an employee is involved would automatically warrant dismissal from service. Thus, in Sanyo Travel Corporation v. National Labor Relations Commission, Oania v. National Labor Relations Commission, and Foodmine, Inc. (Kentucky Fried Chicken) v. National Labor Relations Commission, where the employees were dismissed for their alleged involvement in a fight, it was ruled that the employer must prove by substantial evidence the accusation of serious misconduct, and that in failing to discharge the burden, the employee is deemed to have been illegally dismissed.||| (Supreme Steel Pipe Corporation v. Bardaje, G.R. No. 170811, [April 24, 2007], 550 PHIL 326-342)


Although fighting within company premises constitute serious misconduct, this however, does not apply in this case. Complainant did not start nor provoke the fight. It was precipitated, instead, by guard Albao when he tried to get the complainant's camera for no valid reason. The statement of Albao that complainant tried to snatch his service firearm is not only unbelievable but is also exaggerated. The Labor Arbiter is correct and we concur in his finding that the complainant was not foolish enough to try to snatch the gun of Albao. The camera is undisputably owned by complainant. Bringing it inside his workplace is not a crime. So why would he try to snatch a gun for a very trivial misunderstanding. What is clear is that the security guards over acted in the performance of their duty.|||(Gurango v. Best Chemicals and Plastics, Inc., G.R. No. 174593, [August 25, 2010], 643 PHIL 520-532)


There is no doubt that the last two elements of misconduct were present in the case of Del Rosario. The cause of her dismissal related to the performance of her duties as a flight attendant, and she became unfit to continue working for Northwest. Remaining to be determined is, therefore, whether the misconduct was serious as to merit Del Rosario's dismissal. In that respect, the fight between her and Gamboa should be so serious that it entailed the termination of her employment even if it was her first offense. Northwest insists that what transpired on May 18, 1998 between her and Gamboa was obviously a form of fight that it strictly prohibited, but Del Rosario disputes this by contending that it was only an animated discussion between her and Gamboa. She argues that as settled in American jurisprudence fight pertained to combat or battle, like the hostile encounter or engagement between opposing forces, suggesting primarily the notion of a brawl or unpremeditated encounter, or of a pugilistic combat; while argument was a connected discourse based upon reason, or a course of reasoning tending and intended to establish a position and to induce belief. – there’s no serious misconduct to warrant dismissal||| (Northwest Airlines, Inc. v. Del Rosario, G.R. No. 157633, [September 10, 2014], 742 PHIL 562-573)


The settled rule is that fighting within company premises is a valid ground for the dismissal of an employee. Moreover, the act of assaulting another employee is serious misconduct which justifies the termination of employment. 

Also, the Court agrees with respondent's contention that if petitioner's long years of service would be regarded as a justification for moderating the penalty of dismissal, it will actually become a prize for disloyalty, perverting the meaning of social justice and undermining the efforts of labor to cleanse its ranks of all undesirables. In addition, where the totality of the evidence was sufficient to warrant the dismissal of the employees, the law warrants their dismissal without making any distinction between a first offender and a habitual delinquent. In the present case, all the more should petitioner's years of service be taken against him in light of the finding of the lower tribunals that his violation of an established company rule was shown to be willful and such willfulness was characterized by a wrongful attitude. Moreover, petitioner has never shown any feelings of remorse for what he has done, considering that the lower tribunals found no justification on his part in inflicting injury upon a co-employee. To make matters worse, petitioner even exhibited a seemingly arrogant attitude in insisting to remain silent and rejecting requests for him to explain his side despite having been given numerous opportunities to do so.

||| (Naguit v. San Miguel Corp., G.R. No. 188839, [June 22, 2015], 761 PHIL 184-195)





ATTITUDE PROBLEM. NEGATIVE ATTITUDE

Petitioner's 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. 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.

As petitioner school is run by a religious order, it is but expected that good behavior and proper deportment, especially among the ranks of its own employees, are major considerations in the fulfillment of its mission. Under the circumstances, the sisters cannot be faulted for deciding to terminate private respondent whose presence "has become more a burden rather than a joy" and had proved to be disruptive of the harmonious atmosphere of the school.

||| (Cathedral School of Technology v. National Labor Relations Commission, G.R. No. 101438, [October 13, 1992], 289 PHIL 157-173)


SERIOUS MISCONDUCT BY MANAGER

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.||| (Citibank v. National Labor Relations Commission, G.R. No. 159302, [February 6, 2008], 568 PHIL 61-78)

Petitioner does not deny having withdrawn the amount of P3,000,000.00 lire from the bank's account. What petitioner submits is that she used said amount for the Radio Pilipinas sa Roma radio program of the company. Respondent, however, countered that at the time she withdrew said amount, the radio program was already off the air. Respondent is a managerial employee. Thus, loss of trust and confidence is a valid ground for her dismissal. The mere existence of a basis for believing that a managerial employee has breached the trust of the employer would suffice for his/her dismissal. 

[w]hen an employee accepts a promotion to a managerial position or to an office requiring full trust and confidence, she gives up some of the rigid guaranties available to ordinary workers. Infractions which if committed by others would be overlooked or condoned or penalties mitigated may be visited with more severe disciplinary action. A company's resort to acts of self-defense would be more easily justified.

||| (Sim v. National Labor Relations Commission, G.R. No. 157376, [October 2, 2007], 560 PHIL 762-773)


Tirazona, in this case, has given PET more than enough reasons to distrust her. The arrogance and hostility she has shown towards the company and her stubborn, uncompromising stance in almost all instances justify the company's termination of her employment. Moreover, Tirazona's reading of what was supposed to be a confidential letter between the counsel and directors of the PET, even if it concerns her, only further supports her employer's view that she cannot be trusted. In fine, the Court cannot fault the actions of PET in dismissing petitioner.||| (Tirazona v. Court of Appeals, G.R. No. 169712, [March 14, 2008], 572 PHIL 334-357)




MOONLIGHTING

In the case at bar, the conflict of interest scenario is out of the question since respondent Capitol Wireless (Capwire) business is very different from Contractual Concepts Incorporated. The problem, however, is as to time and performance of duty. With respondent CAPWIRE complainant works as a collector from 8:00 A.M. to 5:00 P.M. On the other hand, his job at Contractual Concept is as a messenger assigned at China Bank. As a messenger, we do not believe that he'll be performing his task after 5:00 P.M. as by then all private offices are closed. In fact, Bank closes at 3:00 PM. This being so, it is highly improbable that in the exercise of a performance of his work with Contractual Concept, the same will not eat up or use part or portion of his official time as collector with herein respondents. So that while earning his salary with respondent from 8:00-5:00 PM as messenger, he was also being paid as messenger by the other company. In which cases, respondent company has all the right and reason to cry foul as this is a clear case of moonlighting and using the company's time, money and equipment to render service to another company. A classic case of wanting to have his cake and eat it too. A situation which we simply cannot countenance. Apropos from evidence on records it is clear that complainant was guilty of violating the company rules and regulations resulting into lost [sic] of trust and confidence. He was therefore lawfully and rightfully separated from service for cause and with due process.||| (Capitol Wireless, Inc. v. Balagot, G.R. No. 169016, [January 31, 2007], 542 PHIL 658-667)


THEFT BY EMPLOYEE

Considering these findings, it is clear that Agad committed a serious infraction amounting to theft of company property. This act is akin to a serious misconduct or willful disobedience by the employee of the lawful orders of his employer in connection with his work, a just cause for termination of employment recognized under Article 282 (a) of the Labor Code. EDATSC

Misconduct has been defined as a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. To be serious, the misconduct must be of such grave and aggravated character. 

Further, Agad's conduct constitutes willful breach of the trust reposed in him, another just cause for termination of employment recognized under Article 282 (c) of the Labor Code.Loss of trust and confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. The employee must be invested with confidence on delicate matters, such as the custody, handling, care and protection of the employer's property and funds. 

As a superintendent, Agad occupied a position tasked to perform key and sensitive functions which necessarily involved the custody and protection of Caltex's properties. Consequently, Agad comes within the purview of the trust and confidence rule.

In Sagales v. Rustan's Commercial Corporation, we held that in loss of trust and confidence, as a just cause for dismissal, it is sufficient that there must only be some basis for the loss of trust and confidence or that there is reasonable ground to believe, if not to entertain the moral conviction, that the employee concerned is responsible for the misconduct and that his participation in the misconduct rendered him absolutely unworthy of trust and confidence.

In sum, even if Agad did not commit the alleged charge of fictitious reimbursement of crating expense, he was found to have acted without authority, a serious infraction amounting to theft of company property, in the withdrawal and sale of the 190 pieces of LPG cylinders owned by the company. Caltex, as the employer, has discharged the burden of proof necessary in terminating the services of Agad, who was ascertained to have blatantly abused his position and authority. Thus, Agad's dismissal from employment based on (1) acts tantamount to serious misconduct or willful violation of company rules and regulations; and (2) willful breach of trust and confidence as Depot Superintendent was lawful and valid under the circumstances as mandated by Article 282 (a) and (c) of the Labor Code.

||| (Caltex (Phils.), Inc. v. Agad, G.R. No. 162017, [April 23, 2010], 633 PHIL 216-234)


the dishonesty of an employee to be a valid cause for dismissal must relate to or involve the misappropriation or malversation of the club funds, or cause or tend to cause prejudice to VGC. The substantial evidence on record indicates that the P17,990.00, which was accumulated from a portion of the tips given by the golfers from May 1998 to October 1998 and was allegedly misappropriated by the respondent as the purported custodian thereof, did not belong to VGC but to the forced savings of its locker room personnel. The truth is, the separate affidavits of Pepito Buenaventura,  Juanito Superal, Jr.,  Ricardo Mendoza, Cesar Velasquez, and Vicente Casabon, as well as the allegations in the petitioners' Position Paper, show that even the VGC management did not know about the mutual fund or sanctioned its existence. Hence, the claim that the petitioners' interest was prejudiced has no factual basis.

Company policies and regulations are, unless shown to be grossly oppressive or contrary to law, generally valid and binding and must be complied with by the parties unless finally revised or amended, unilaterally or preferably through negotiation. However, while an employee may be validly dismissed for violation of a reasonable rule or regulation adopted for the conduct of the company's business, an act allegedly in breach thereof must clearly and convincingly fall within the express intendment of such order.

||| (Villamor Golf Club v. Pehid, G.R. No. 166152, [October 4, 2005], 509 PHIL 33-44)


A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an employee's moral depravity. Theft committed by an employee against a person other than his employer, if proven by substantial evidence, is a cause analogous to serious misconduct.

In this case, the LA has already made a factual finding, which was affirmed by both the NLRC and the CA, that Fermin had committed theft when he took Braga's cellphone. Thus, this act is deemed analogous to serious misconduct, rendering Fermin's dismissal from service just and valid.

Further, the CA was correct in ruling that previous infractions may be cited as justification for dismissing an employee only if they are related to the subsequent offense. However, it must be noted that such a discussion was unnecessary since the theft, taken in isolation from Fermin's other violations, was in itself a valid cause for the termination of his employment.

||| (Cosmos Bottling Corp. v. Fermin, G.R. Nos. 193676 & 194303, [June 20, 2012], 688 PHIL 607-615)

DRUG ABUSE AS SERIOUS MISCONDUCT

REQUIREMENTS FOR VALID DRUG TEST RA 9165:

DOH - 2 testing methods, the SCREENING TEST which will determine the positive result as well as the type of the drug used and the CONFIRMATORY TEST which will confirm a positive screening test. Drug test certificates shall be valid for a 1-year period from the date of issue. 

                      

AER's fault is obvious from the fact that a day after the union filed a petition for certification election before the DOLE, it hit back by requiring all its employees to undergo a compulsory drug test. Although AER argues that the drug test was applied to all its employees, it was silent as to whether the drug test was a regular company policy and practice in their 35 years in the automotive engine repair and rebuilding business. As the Court sees it, it was AER's first ever drug test of its employees immediately implemented after the workers manifested their desire to organize themselves into a union. Indeed, the timing of the drug test was suspicious.

Moreover, AER failed to show proof that the drug test conducted on its employees was performed by an authorized drug testing center. It did not mention how the tests were conducted and whether the proper procedure was employed. The case of Nacague v. Sulpicio Lines, is instructive:

Contrary to Sulpicio Lines' allegation, Nacague was already questioning the credibility of S.M. Lazo Clinic as early as the proceedings before the Labor Arbiter. In fact, the Labor Arbiter declared that the S.M. Lazo Clinic drug test result was doubtful since it is not under the supervision of the Dangerous Drug Board. DTEAHI

The NLRC and the Court of Appeals ruled that Sulpicio Lines validly terminated Nacague's employment because he was found guilty of using illegal drugs which constitutes serious misconduct and loss of trust and confidence. However, we find that Sulpicio Lines failed to clearly show that Nacague was guilty of using illegal drugs. We agree with the Labor Arbiter that the lack of accreditation of S.M. Lazo Clinic made its drug test results doubtful.

||| (Automotive Engine Rebuilders, Inc. v. Progresibong Unyon ng mga Manggagawa sa AER, G.R. Nos. 160138 & 160192, [July 13, 2011], 669 PHIL 181-204)

The charge of drug abuse inside the company's premises and during working hours against petitioner constitutes serious misconduct, which is one of the just causes for termination. Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not merely an error in judgment. The misconduct to be serious within the meaning of the Act must be of such a grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must nevertheless, in connection with the work of the employee, constitute just cause for his separation. This Court took judicial notice of scientific findings that drug abuse can damage the mental faculties of the user. It is beyond question therefore that any employee under the influence of drugs cannot possibly continue doing his duties without posing a serious threat to the lives and property of his co-workers and even his employer.||| (Bughaw, Jr. v. Treasure Island Industrial Corp., G.R. No. 173151, [March 28, 2008], 573 PHIL 435-451)


where there is no showing of a clear, valid and legal cause for termination of employment, the law considers the case a matter of illegal dismissal. The burden is on the employer to prove that the termination of employment was for a valid and legal cause. 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.

In fine, as petitioners failed to indubitably prove that respondents were guilty of drug use in contravention of its drug-free workplace policy amounting to serious misconduct, respondents are deemed to have been illegally dismissed.

||| (Plantation Bay Resort and SPA v. Dubrico, G.R. No. 182216, [December 4, 2009], 622 PHIL 753-761)



CONSPIRACY IN COMMISSION OF THEFT

Pastoril was not an innocent participant in the fraudulent sale of the company's Toyota Town Ace. She acted in concert with Escoto and Omela in the transaction that defrauded their employer in the amount of P10,000.00 — the difference in the vehicle's actual price of P200,000.00 paid by the buyer, and the price (P190,000.00) entered in the duplicate purchase receipt and in the deed of sale. Pastoril prepared and issued the deed of sale indicating that the vehicle was sold for P190,000.00, although she knew that the buyer was being charged P200,000.00 for the vehicle. Escoto, Omela and Pastoril helped themselves to the price difference and tried to silence Rodriguez (who got wind of the anomaly) by giving him P1,000.00 and passing the P10,000.00 price difference off as the approved discount Aquino asked for. Under these facts, there was a conspiracy where every participant had made significant contributory acts. (White Diamond Trading Corp. v. National Labor Relations Commission, G.R. No. 186019, [March 29, 2010], 631 PHIL 126-139)


While it is true that in conspiracy, direct proof is not essential, it must however, be shown that it exists as clearly as the commission of the offense itself. There must at least be adequate proof that the malefactors had come to an agreement concerning the commission of a felony and decided to commit it.

. . . For conspiracy to exist, it is essential that there must be conscious design to commit an offense. Conspiracy is not the product of negligence but of intentionality on the part of the cohorts.

||| (Sargasso Construction and Development Corporation v. National Labor Relations Commission, G.R. No. 164118, [February 9, 2010], 625 PHIL 674-682)


COMMITTING OFFENSES PENALIZED WITH 3 SUSPENSIONS WITHIN A 12 MONTH PERIOD

Here, Caragdag's dismissal was due to several instances of willful disobedience to the reasonable rules and regulations prescribed by his employer. The Voluntary Arbitrator pointed out that according to the hotel's Code of Discipline, an employee who commits three different acts of misconduct within a twelve (12)-month period commits serious misconduct. He stressed that Caragdag's infractions were not even spread in a period of twelve (12) months, but rather in a period of a little over a month. Records show the various violations of the hotel's rules and regulations were committed by Caragdag. He was suspended for violating the hotel policy on bag inspection and body frisking. He was likewise suspended for threatening and intimidating a superior while the latter was counseling his staff. He was again suspended for leaving his work assignment without permission. Evidently, Caragdag's acts constitute serious misconduct.||| (SAMASAH-NUWHRAIN v. Magsalin, G.R. Nos. 164939 & 172303, [June 6, 2011], 665 PHIL 584-599)


WHEN NOT SERIOUS MISCONDUCT

We reviewed the entire records of the case and arrived at the finding that complainant was not guilty of serious misconduct. Complainant reacted to the posting by Mattus of a poster at the bulletin board without his consent and the latter's angrily barging into the room where he was seated but his reaction — his attempt to throw a stapler at Mattus and, thereafter, his uttering foul language at him although constituting misconduct cannot, we are confident, fall under the category of a serious misconduct. Complainant was provoked by Mattus who unjustifiably barged into his room. Complainant did not actually throw a stapler at Mattus. He could have just tried to scare him with the stapler. He allowed himself to be pacified by cooler heads. These attending circumstances removed complainant's reaction from the classification of a serious misconduct. (Radio Communications of the Philippines, Inc. v. National Labor Relations Commission, G.R. Nos. 113178 & 114777, [July 5, 1996], 327 PHIL 838-851)


PENALTIES IMPOSED MUST BE COMMENSURATE TO OFFENSE INVOLVED AND TO DEGREE OF INFRACTION. — While an employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the employees, those directives, however, must always be fair and reasonable, and the corresponding penalties, when prescribed, must be commensurate to the offense involved and to the degree of the infraction. In the case at bar, the dismissal meted out on private respondent for allegedly sleeping on the job, under the attendant circumstances, appears to be too harsh a penalty, considering that he was being held liable for the first time, after nine (9) long years of unblemished service, for an alleged offense which caused no prejudice to the employer, aside from absence of substantiation of the alleged offense. The authorities cited by petitioner are also irrelevant for the reason that there is no evidence on the depravity of conduct, willfulness of the disobedience, or conclusiveness of guilt on the part of private respondent. Neither was it shown that private respondent's alleged negligence or neglect of duty, if any, was gross and habitual. Thus, reinstatement is just and proper.||| (VH Manufacturing Inc. v. National Labor Relations Commission, G.R. No. 130957, [January 19, 2000], 379 PHIL 444-451)


Misconduct is improper or wrongful conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. Under Article 282 of the Labor Code, the misconduct, to be a just cause for termination, must be serious. This implies that it must be of such grave and aggravated character and not merely trivial or unimportant. Examples of serious misconduct justifying termination, as held in some of our decisions, include: sexual harassment (the manager's act of fondling the hands, massaging the shoulder and caressing the nape of a secretary); fighting within company premises; uttering obscene, insulting or offensive words against a superior; misrepresenting that a student is his nephew and pressuring and intimidating a co-teacher to change that student's failing grade to passing. In this light, the alleged infractions of the respondent could hardly be considered serious misconduct. – respondent failed to help out during the preparations for graduation and this, to us, was not a significant reason for terminating or dismissing her from her job. (Colegio de San Juan de Letran-Calamba v. Villas, G.R. No. 137795, [March 26, 2003], 447 PHIL 692-704)


UTTERING OF INVECTIVES

The alleged misconduct of petitioner, when viewed in its context, is not of such serious and grave character as to warrant his dismissal. First, petitioner made the alleged offensive utterances and obscene gesture during an informal Christmas gathering of respondent company's district sales managers and marketing staff. The gathering was just a casual get-together of employees. It is to be expected during this kind of gatherings, where tongues are more often than not loosened by liquor or other alcoholic beverages, that employees freely express their grievances and gripes against their employers. Employees should be allowed wider latitude to freely express their sentiments during these kinds of occasions which are beyond the disciplinary authority of the employer. Significantly, it does not appear in the records that petitioner possessed any ascendancy over the employees who heard his utterances as to cause demoralization in the ranks. Petitioner's outburst was in reaction to the decision of the management in the "Cua Lim" case. Admittedly, using the words "bullshit" and "putang ina" and making lewd gesture to express his dissatisfaction over said management decision were clearly in bad taste but these acts were not intended to malign or cast aspersion on the person of respondent company's president and general manager.||| (Samson v. National Labor Relations Commission, G.R. No. 121035, [April 12, 2000], 386 PHIL 669-690)



Petitioner invokes Samson v. National Labor Relations Commission where this Court held that the dismissal of the therein petitioner was too harsh a penalty for uttering "Si EDT [Epitacio D. Titong, the General Manager and President of the employer], bullshit yan," "sabihin mo kay EDT yan" and "sabihin mo kay EDT, bullshit yan," while making the "dirty finger" gesture, and warning that the forthcoming national sales conference of the company would be a "very bloody one."

Petitioner's reliance on Samson is misplaced. First, in that case, this Court found that the misconduct committed was not related with the employee's work as the offensive remarks were verbally made during an informal Christmas gathering of the employees, an occasion "where tongues are more often than not loosened by liquor or other alcoholic beverages" and "it is to be expected . . . that employees freely express their grievances and gripes against their employers."  

In petitioner's case, her assailed conduct was related to her work. It reflects an unwillingness to comply with reasonable management directives.

While in Samson, Samson was held to be merely expressing his dissatisfaction over a management decision, in this case, as earlier shown, petitioner's offensive remarks were directed against Geisert.

Additionally, in Samson, this Court found that unlike in Autobus Workers' Union (AWU) v. NLRC where dismissal was held to be an appropriate penalty for uttering insulting remarks to the supervisor, Samson uttered the insulting words against EDT in the latter's absence. In the case at bar, while petitioner did not address her e-mail message to Geisert, she circulated it knowing — or at least, with reason to know — that it would reach him. As ETSI notes, "[t]hat [petitioner] circulated this e-mail message with the knowledge that it would reach the eyes of management may be reasonably concluded given that the first e-mail message reached her immediate supervisor's attention." 

Finally, in Samson, this Court found that the "lack of urgency on the part of the respondent company in taking any disciplinary action against [the employee] negates its charge that the latter's misbehavior constituted serious misconduct." In the case at bar, the management acted 14 days after petitioner circulated the quoted e-mail message. 

Petitioner asks that her 12 years of service to ETSI during which, so she claims, she committed no other offense be taken as a mitigating circumstance. This Court has held, however, that "the longer an employee stays in the service of the company, the greater is his responsibility for knowledge and compliance with the norms of conduct and the code of discipline in the company." 

In fine, petitioner, having been dismissed for just cause, is neither entitled to reinstatement nor to backwages.

||| (Punzal v. ETSI Technologies, Inc., G.R. Nos. 170384-85, [March 9, 2007], 546 PHIL 704-719)



Benitez went up the stage and confronted his superior with a verbal abuse. Also, the petitioners cited Samson selectively and concealed its real thrust, thus:

The instant case should be distinguished from the previous cases where we held that the use of insulting and offensive language constituted gross misconduct justifying an employee's dismissal. In De la Cruz vs. NLRC, the dismissed employee shouted "saying ang pagka-professional mo!" and "putang ina mo" at the company physician when the latter refused to give him a referral slip. In Autobus Workers' Union (AWU) v. NLRC, the dismissed employee called his supervisor "gago ka" and taunted the latter by saying "bakit anong gusto mo tang ina mo." In these cases, the dismissed employees personally subjected their respective superiors to the foregoing verbal abuses. The utter lack of respect for their superiors was patent. In contrast, when petitioner was heard to have uttered the alleged offensive words against respondent company's president and general manager, the latter was not around.

||| (Benitez v. Santa Fe Moving and Relocation Services/Vedit Kurangil, G.R. No. 208163, [April 20, 2015])


LIBEL

with the derogatory statements issued by Mahilum that were intended to incite, not just public condemnation of VECO, but antagonism and obstruction against rate increases in electricity that it may be allowed, by law, to fix, there can be no dispute that VECO, indeed, had lost its trust and confidence in Mahilum and his ability to perform his tasks with utmost efficiency and loyalty expected of an employee entrusted to handle customers and funds. Settled is the rule that an employer cannot be compelled to retain an employee who is guilty of acts inimical to the interests of the employer. A company has the right to dismiss its employee if only as a measure of self-protection.||| (Visayan Electric Co. Employees Union-ALU-TUCP v. Visayan Electric Co., Inc. (VECO), G.R. No. 205575, [July 22, 2015], 764 PHIL 608-626)


GROSS INSUBORDINATION

Gross negligence implies a want or absence of, or failure to exercise even a slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. There is habitual neglect if based on the circumstances, there is a repeated failure to perform one's duties for a period of time. 

In light of the foregoing criteria, we rule that Arenas' three counts of tardiness cannot be considered as gross and habitual neglect of duty. The infrequency of his tardiness already removes the character of habitualness. These late attendances were also broadly spaced out, negating the complete absence of care on Arenas' part in the performance of his duties. Even CBTL admitted in its notice to explain that this violation does not merit yet a disciplinary action and is only an aggravating circumstance to Arenas' other violations.

||| (The Coffee Bean and Tea Leaf Philippines, Inc. v. Arenas, G.R. No. 208908, [March 11, 2015], 755 PHIL 882-892)


EMPLOYEE’S REFUSAL TO COMPLY WITH RULES AND REGULATIONS BY SIMPLE EXPEDIENT OF CHALLENGING REASONABLENESS, NOT ALLOWABLE

it would be dangerous doctrine indeed to allow employees to refuse to comply with rules and regulations, policies and procedures laid down by their employer by the simple expedient of formally challenging their reasonableness or the motives which inspired them, or filing a strike notice with the Department of Labor and Employment, or, what amounts to the same thing, to give the employees the power to suspend compliance with company rules or policies by requesting that they be a first subject of collective bargaining. It would be well nigh impossible under these circumstances for any employer to maintain discipline in its establishment. This is, of course, intolerable. For common sense teaches, as Mr. Justice Gregorio Perfecto once had occasion to stress, that:

"Success of industries and public services is the foundation upon which just wages may be paid. There cannot be success without efficiency. There cannot be efficiency without discipline. Consequently, when employees and laborers violate the rules of discipline they jeopardize not only the interest of the employer but also their own. In violating the rules of discipline they aim at killing the hen that lays the golden eggs. Laborers who trample down the rules set for an efficient service are, in effect, parties to a conspiracy, not only against capital but also against labor. The high interest of society and of the individuals demand that we should require everybody to do his duty. That demand is addressed not only to employer but also to employees.

||| (GTE Directories Corp. v. Sanchez, G.R. No. 76219, [May 27, 1991], 274 PHIL 738-758)


ACTS WERE WITHIN DISCRETIONARY POWERS OF MANAGER

While respondent Cabansay was a managerial employee, a Senior Training Manager entrusted with the delicate matter of molding the minds and characters of call center agents and team leaders, and clothed with discretion to determine what was in the best interest of the company, her managerial discretion was not without limits. Its parameters were contained the moment her discretion was exercised and then opposed by the immediate superior officer/employer for being against the policies and welfare of the company. Hence, any action in pursuit of the discretion thus opposed ceased to be discretionary and could be considered as willful disobedience. 

Indeed, by refusing to postpone the presentation and implementation of the new training process, respondent intentionally, knowingly and purposely, without justifiable excuse, breached the trust and confidence reposed in her by her employer. To present and discuss a training module, which is deemed by management as still inadequate in its content, will certainly not only waste the time, effort and energy of the participants in the discussion but will also entail losses on the part of the company.

It is of no moment that the presentation did not push through, and that no actual damage was done by respondent to the company. The mere fact that respondent refused to obey the reasonable and lawful order to defer the presentation and implementation of the module already gave a just cause for petitioners to dismiss her. Verily, had it not been for the timely intervention of the Telesales Senior Manager, under the instructions of the SVP, harm could have been done to company resources.

Let it be stressed that insofar as the application of the doctrine of trust and confidence is concerned, jurisprudence has distinguished the treatment of managerial employees or employees occupying positions of trust and confidence from that of rank-and-file personnel. With respect to the latter, loss of trust and confidence as a ground for dismissal requires proof of involvement in the alleged events in question, but as regards managerial employees, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his or her dismissal. For this purpose, there is no need to present proof beyond reasonable doubt. It is sufficient that there is some basis for the loss of trust or that the employer has reasonable ground to believe that the employee is responsible for the misconduct which renders him unworthy of the trust and confidence demanded by his position. Respondent's conduct, in this case, is sufficient basis for the company to lose its trust and confidence in her. Under the circumstances, the company cannot be expected to retain its trust and confidence in and continue to employ a manager whose attitude is perceived to be inimical to its interests. Unlike other just causes for dismissal, trust in an employee, once lost, is difficult, if not impossible to regain.

||| (e Pacific Global Contact Center, Inc. v. Cabansay, G.R. No. 167345, [November 23, 2007], 563 PHIL 804-824)



this court finds that PRUDENTIAL's branch manager MAURICIO's act of allowing SPOUSES CRUZ to immediately withdraw [the] above instruments is well within his functions as a branch manager. A person occupying such position exercises a certain degree of discretion with respect to the accommodations extended [to] certain valued clients such as herein plaintiffs SPOUSES CRUZ. Having been recommended by the legal counsel himself of PRUDENTIAL and in view of the fact that they have substantial deposit with the same bank, it cannot be doubted that SPOUSES CRUZ were valued clients. (TSN dated 8, November 1999 p. 14; TSN dated 27 January 1999, p. 10; and TSN dated 12 January 2000, pp. 7-10)[.]

Further, as testified to by Andres Mangahas, witness of PRUDENTIAL, encashment of and/or withdrawal against US Treasury Warrants by valued client is not prohibited though it is not exactly encouraged. (TSN dated 27 January 1999, p. 10) This court moreover holds that MAURICIO was not in anyway prompted by any malicious motive in approving the encashment and/or withdrawal; he not only tried to collect from herein plaintiffs SPOUSES CRUZ, (Exhibit 8 — Mauricio) he made sure that worst comes to worst, the withdrawals were covered (TSN dated 8 November 1999, p. 95) and that all the transactions were reported to the head office. (TSN dated 8 November 1999, pp. 17-18) In fact, before MAURICIO allowed the encashment of the dollar checks and as testified by SPOUSES CRUZ, a condition was imposed. (TSN dated 22 July 1998, pp. 10-13) So, if indeed such transaction was irregular or worse, prohibited, the Head Office of PRUDENTIAL should have immediately called MAURICIO's attention to the same. Instead, PRUDENTIAL, continued to credit the account of the spouses for the value of the returned checks.

||| (Prudential Bank v. Mauricio, G.R. No. 183350, [January 18, 2012], 679 PHIL 369-394)


REFUSAL TO COMPLY DUE TO VALID REASON

The offense of willful disobedience requires the concurrence of two (2) requisites: (1) the employee's assailed conduct must have been willful, that is characterized by a wrongful and perverse attitude; and (2) 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. 17

Let it be noted at this point that the Court finds nothing unlawful in the directive of Sumulong to prepare checks in payment of LREI's obligations. The availability or unavailability of sufficient funds to cover the check is immaterial in the physical preparation of the checks.

Pacia's initial reluctance to prepare the checks, however, which was seemingly an act of disrespect and defiance, was for honest and well intentioned reasons. Protecting LREI and Sumulong from liability under the Bouncing Checks Law was foremost in her mind. It was not wrongful or willful. Neither can it be considered an obstinate defiance of company authority. The Court takes into consideration that Pacia, despite her initial reluctance, eventually did prepare the checks on the same day she was tasked to do it.

The Court also finds it difficult to subscribe to LREI and Sumulong's contention that the reason for Pacia's initial reluctance to prepare the checks was a mere afterthought considering that "check no. 0000737527 under one of the check vouchers she reluctantly prepared, bounced when it was deposited." Pacia's apprehension was justified when the check was dishonored. This clearly affirms her assertion that she was just being cautious and circumspect for the company's sake. Thus, her actuation should not be construed as improper conduct.

||| (Lores Realty Enterprises, Inc. v. Pacia, G.R. No. 171189, [March 9, 2011], 660 PHIL 419-428)

VIOLATIONS OF COMPANY RULES AND REGULATIONS, TOLERANCE THEREOF

Given that management knew of and tolerated the practice of logging out in advance, it cannot hold the same against Filoteo. The rule is that where a violation of company policy or breach of company rules and regulations was found to have tolerated by management, then such violation cannot serve as the basis for termination. (Permex v. NLRC)


GROSS NEGLIGENCE / HABITUAL NEGLECT OF DUTY

gross inefficiency is closely related to gross neglect because both involve specific acts of omission resulting in damage to another. Gross neglect of duty or gross negligence refers to negligence characterized by the want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally, with a conscious indifference to consequences insofar as other persons may be affected. 

As borne by the records, petitioner's actions fall within the purview of the above-definitions. Petitioner failed to diligently perform her duties. It was unrefuted that: (1) there were dates when a medical examination was supposed to have been conducted and yet the dates fell on weekends; (2) failure to conduct medical examination on all students for two (2) to five (5) consecutive years; (3) lack of medical records on all students; and (4) students having medical records prior to their enrollment.

||| (Rio v. Colegio de Sta. Rosa-Makati, G.R. No. 189629, [August 6, 2014], 740 PHIL 574-583)


HABITUAL ABSENCES/TARDINESS AS FORM OF NEGLECT

the records of this case do not show any hint that Calucin's [Jr.'s] dismissal is due to his trade union activities. On the other hand, per findings of the public respondent, the Foundation was able to support with documents how Calucin [Jr.] declared himself irrelevant in the Foundation through his tardiness and shallow excuses such as fetching the water, cooking breakfast, seeing to it that his kids took breakfast before going to school, preparing packed lunch for himself and even the diversions from the usual route of jeepneys that he rode in on these days that he was absent are all lame excuses that amount to lack of interest in his work. His lackluster work attitude reached his highest point when he filed for a leave of absence of three months to join his brother's business venture. Furthermore, it is not true that his attendance improved in 1993 because the records show that in 1993, his tardiness worsened to the point that his repeated tardiness went beyond the maximum contemplated in the Foundation's Code of Discipline.||| (San Juan De Dios Educational Foundation Employees Union - AFW v. San Juan de Dios Educational Foundation, Inc., G.R. No. 143341, [May 28, 2004], 474 PHIL 223-241)


MAY GROSS AND HABITUAL NEGLECT LIKEWISE BE CONSIDERED AS A SERIOUS MISCONDUCT

petitioner's unauthorized absences as well as tardiness are habitual despite having been penalized for past infractions. In Gustilo v. Wyeth Philippines, Inc., we held that a series of irregularities when put together may constitute serious misconduct. We also held that gross neglect of duty becomes serious in character due to frequency of instances. Serious misconduct is said to be a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and indicative of wrongful intent and not mere error of judgment. Oddly, petitioner never advanced any valid reason to justify his absences. Petitioner's intentional and willful violation of company rules shows his utter disregard of his work and his employer's interest. Indeed, there can be no good faith in intentionally and habitually incurring unexcusable absences. Thus, the CA did not commit grave abuse of discretion amounting to lack or excess of jurisdiction in equating petitioner's gross neglect of duty to serious misconduct.|||(Quiambao v. Manila Electric Railroad and Light Co., G.R. No. 171023, [December 18, 2009], 623 PHIL 416-424)


SINGLE ISOLATED ACT OF NELIGENCE INSUFFICIENT GROUND FOR TERMINATION

Under Article 282 (b) of the Labor Code,an employer may terminate an employee for gross and habitual neglect of duties. Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes want of care in the performance of one's duties. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. Under the prevailing circumstances, respondent exercised his best judgment in monitoring the CCTV cameras so as to ensure the security within the hospital premises. Verily, assuming arguendo that respondent was negligent, although this Court finds otherwise, the lapse or inaction could only be regarded as a single or isolated act of negligence that cannot be categorized as habitual and, hence, not a just cause for his dismissal.||| (St. Luke's Medical Center, Inc. v. Notario, G.R. No. 152166, [October 20, 2010], 648 PHIL 285-300)


TOTALITY OF INFRACTIONS RULING

It bears stressing that petitioner's absences and tardiness were not isolated incidents but manifested a pattern of habituality. . . . 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. Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct, and ability separate and independent of each other.||| (Mansion Printing Center v. Bitara, Jr., G.R. No. 168120, [January 25, 2012], 680 PHIL 43-63)


ABANDONMENT

To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overt acts. In the present case, Dy reported for work after the mauling incident only on 19 May 2000, after petitioner Lim called him to the office. On the other hand, apart from Dy's absence, petitioners failed to show any evidence of Dy's clear intent to sever his ties with petitioners.||| (Hilton Heavy Equipment Corp. v. Dy, G.R. No. 164860, [February 2, 2010], 625 PHIL 168-178)


Abandonment as a just ground for dismissal requires the deliberate, unjustified refusal of the employee to perform his employment responsibilities. Mere absence or failure to work, even after notice to return, is not tantamount to abandonment. 

Furthermore, it is well-settled that the filing by an employee of a complaint for illegal dismissal with a prayer for reinstatement is proof enough of his desire to return to work, thus, negating the employer's charge of abandonment.  An employee who takes steps to protest his dismissal cannot logically be said to have abandoned his work. 

Abandonment in this case was a trumped up charge, apparently to make it appear that petitioner was not yet terminated when she filed the illegal dismissal complaint and to give a semblance of truth to the belated investigation against the petitioner. Petitioner did not abandon her work but was told not to report for work anymore after being served a written notice of termination of company closure on July 27, 2000 and turning over company properties to respondent Rialubin-Tan.

||| (Manarpiis v. Texan Philippines, Inc., G.R. No. 197011, [January 28, 2015], 752 PHIL 305-325)


FRAUD

The CA taking into account the findings of the NLRC, correctly concluded that there was substantial evidence showing that petitioner did not really work 8 hours a day. The validity of petitioner’s dismissal is a factual question and the rule is well settled that the findings of fact of quarrel – judicial agencies, like the NLRC, are accorded not only respect, but finally if they are supported by substantial evidence. Furthermore, the omnibus motion filed by Y Co, during the tendency of the appeal is not an admission that it is the liable for reinstatement or separation pay. (Felix v. Enertech)


There are two (2) jurisprudential rules of long-standing in this jurisdiction. First, is the hoary rule that factual issues are beyond the scope of certiorari as they do not involve any jurisdictional issue. As held by this Court in Quiambao v. Court of Appeals,  in certiorari proceedings under Rule 65, questions of fact are not generally permitted, the inquiry being limited essentially to whether or not the respondent tribunal acted without or in excess of its jurisdiction. Second, is the cardinal principle that factual findings of the NLRC affirming those of the Labor Arbiter, when devoid of any unfairness or arbitrariness, are accorded respect if not finality by the Court of Appeals. And where the findings of the Labor Arbiter are affirmed by the NLRC and the Court of Appeals, these are deemed binding, final, and conclusive upon the Supreme Court. It is not the function of the Supreme Court to inquire into the correctness of the evaluation of the evidence which was the basis for the labor official's ruling. And this Court may not disturb the findings of facts of those officials who have gained expertise in their specialized field, where such findings have been given the stamp of approval by the Court of Appeals.

This Court, therefore, sustains the findings of fact by the labor agencies and the Court of Appeals which warrant the dismissal of petitioners' complaint for loss of trust and confidence against respondent. – no deliberate attempt to defraud employer

||| (Pfizer, Inc. v. Galan, G.R. No. 158460, [August 24, 2007], 557 PHIL 685-690)


Rivera was dismissed from work because she intentionally circumvented a strict company policy, manipulated another entity to carry out her instructions without the company's knowledge and approval, and directed the diversion of funds, which she even admitted doing under the guise of shortening the laborious process of securing funds for promotional activities from the head office. These transgressions were serious offenses that warranted her dismissal from employment and proved that her termination from work was for a just cause. Hence, she is not entitled to a separation pay.||| (Unilever Philippines Inc. v. Rivera, G.R. No. 201701, [June 3, 2013], 710 PHIL 124-138)


CONCEALMENT OF PREGNANCY; DISMISSAL TOO HARSH

Her absence for 16 days was justified considering that she had just delivered a child, which can hardly be considered a forbidden act, a dereliction of duty; much less does it imply wrongful intent on the part of Belga. Tropical harps on the alleged concealment by Belga of her pregnancy. This argument, however, begs the question as to how one can conceal a full-term pregnancy. We agree with respondent's position that it can hardly escape notice how she grows bigger each day. While there may be instances where the pregnancy may be inconspicuous, it has not been sufficiently proven by Tropical that Belga's case is such.

Belga's failure to formally inform Tropical of her pregnancy can not be considered as grave misconduct directly connected to her work as to constitute just cause for her separation.

||| (Lakpue Drug Inc. v. Belga, G.R. No. 166379, [October 20, 2005], 510 PHIL 390-399)


LOSS OF CONFIDENCE / BREACH OF TRUST

Among the just causes for termination is the employer's loss of trust and confidence in its employee. Article 296 (c) (formerly Article 282 [c]) of the Labor Code provides that an employer may terminate the services of an employee for fraud or willful breach of the trust reposed in him. But in order for the said cause to be properly invoked, certain requirements must be complied with namely, (1) the employee concerned must be holding a position of trust and confidence and (2) there must be an act that would justify the loss of trust and confidence. 

It is noteworthy to mention that there are two classes of positions of trust: on the one hand, there are managerial employees whose primary duty consists of the management of the establishment in which they are employed or of a department or a subdivision thereof, and to other officers or members of the managerial staff; on the other hand, there are fiduciary rank-and-file employees, such as cashiers, auditors, property custodians, or those who, in the normal exercise of their functions, regularly handle significant amounts of money or property. These employees, though rank-and-file, are routinely charged with the care and custody of the employer's money or property, and are thus classified as occupying positions of trust and confidence. Episcope belongs to this latter class and therefore, occupies a position of trust and confidence.

As may be readily gleaned from the records, Episcope was employed by PPHI as a service attendant in its Café Plaza. In this regard, she was tasked to attend to dining guests, handle their bills and receive their payments for transmittal to the cashier. It is also apparent that whenever discount cards are presented, she maintained the responsibility to take them to the cashier for the application of discounts. Being therefore involved in the handling of company funds, Episcope is undeniably considered an employee occupying a position of trust and confidence and as such, was expected to act with utmost honesty and fidelity.

Anent the second requisite, records likewise reveal that Episcope committed an act which justified her employer's (PPHI's) loss of trust and confidence in her.

Primarily, it is apt to point out that proof beyond reasonable doubt is not required in dismissing an employee on the ground of loss of trust and confidence; it is sufficient that there lies some basis to believe that the employee concerned is responsible for the misconduct and that the nature of the employee's participation therein rendered him absolutely unworthy of trust and confidence demanded by his position.

||| (Philippine Plaza Holdings, Inc. v. Episcope, G.R. No. 192826, [February 27, 2013], 705 PHIL 210-221)


route salesmen are likely individualistic personnel who roam around selling softdrinks, deal with customers and are entrusted with large asset and funds and property of the employer. There is a high degree of trust and confidence reposed on them, and when confidence is breached, the employer may take proper disciplinary action on them. The work of a salesman exposes him to voluminous financial transactions involving his employer's goods. The life of the soft drinks company depends not so much on the bottling or production of the product since this is primarily done by automatic machines and personnel who are easily supervised but upon mobile and far-ranging salesmen who go from store to store all over the country or region. Salesmen are highly individualistic personnel who have to be trusted and left essentially on their own. A high degree of confidence is reposed on them because they are entrusted with funds or properties of their employer.||| (Hormillosa v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 198699, [October 9, 2013], 719 PHIL 421-441)


Sanchez was validly dismissed by SLMC for her willful disregard and disobedience of Section 1, Rule I of the SLMC Code of Discipline, which reasonably punishes acts of dishonesty, i.e., "theft, pilferage of hospital or co-employee property, . . . or its attempt in any form or manner from the hospital, co-employees, doctors, visitors, [and] customers (external and internal)" with termination from employment. Such act is obviously connected with Sanchez's work, who, as a staff nurse, is tasked with the proper stewardship of medical supplies. Significantly, records show that Sanchez made a categorical admission in her handwritten letter — i.e., "[k]ahit alam kong bawal ay nagawa kong [makapag-uwi] ng gamit"  — that despite her knowledge of its express prohibition under the SLMC Code of Discipline, she still knowingly brought out the subject medical items with her. It is apt to clarify that SLMC cannot be faulted in construing the taking of the questioned items as an act of dishonesty (particularly, as theft, pilferage, or its attempt in any form or manner) considering that the intent to gain may be reasonably presumed from the furtive taking of useful property appertaining to another.  Note that Section 1, Rule 1 of the SLMC Code of Discipline is further supplemented by the company policy requiring the turn-over of excess medical supplies/items for proper handling and providing a restriction on taking and bringing such items out of the SLMC premises without the proper authorization or "pass" from the official concerned, which Sanchez was equally aware thereof. Nevertheless, Sanchez failed to turn-over the questioned items and, instead, "hoarded" them, as purportedly practiced by the other staff members in the Pediatric Unit. As it is clear that the company policies subject of this case are reasonable and lawful, sufficiently known to the employee, and evidently connected with the latter's work, the Court concludes that SLMC dismissed Sanchez for a just cause. – conviction in a criminal case is not necessary to find just cause for termination of employment. Criminal and Labor cases involving an employee arising from the same infraction are separate and distinct proceedings which should not arrest any judgment from one to the other (St. Luke's Medical Center, Inc. v. Sanchez, G.R. No. 212054, [March 11, 2015], 755 PHIL 910-925)


The Bank should be reminded that for a dismissal based on loss of trust and confidence to be valid, the breach of trust must be willful, meaning it must be done intentionally, knowingly, and purposely, without justifiable excuse. Loss of trust and confidence stems from a breach of trust founded on dishonest, deceitful or fraudulent act. This is obviously not the case here.

Besides, Office Order No. 1596, one of the office orders allegedly violated by Mauricio, provides:

Approving officers shall exercise extreme caution in allowing deposit of, encashment or withdrawals against foreign and out-of-town checks. Refund to the bank of the amount involved shall be the personal responsibility and accountability of the officer who authorized the deposit or encashment over the counter when the check should be returned by the drawee bank for any reason whatsoever.

The above company directive is an explicit admission that Mauricio was clothed with such discretion to enter into the questioned transactions as well as a forewarning that in case the foreign and out-of town checks were returned for whatever reason, the approving officer, in this case, Mauricio, shall be personally responsible and accountable. We subscribe to the CA's interpretation that "personal responsibility and accountability" could only mean the reimbursement of the value of any dishonored check but does not mean termination of the approving officer's employment for breaching the bank's trust and confidence.

||| (Prudential Bank v. Mauricio, G.R. No. 183350, [January 18, 2012], 679 PHIL 369-394)


The mere existence of a basis for the loss of trust and confidence justifies the dismissal of the managerial employee because when an employee accepts a promotion to a managerial position or to an office requiring full trust and confidence, such employee gives up some of the rigid guaranties available to ordinary workers. Infractions, which if committed by others would be overlooked or condoned or penalties mitigated, may be visited with more severe disciplinary action. Proof beyond reasonable doubt is not required provided there is a valid reason for the loss of trust and confidence, such as when the employer has a reasonable ground to believe that the managerial employee concerned is responsible for the purported misconduct and the nature of his participation renders him unworthy of the trust and confidence demanded by his position.  (Manese v. Jollibee Foods Corp., G.R. No. 170454, [October 11, 2012], 697 PHIL 322-342)


petitioner was remiss in the performance of her duty to approve the pre-termination of certificates of deposits by legitimate depositors or their duly-authorized representatives, resulting in prejudice to the bank, which reimbursed the monetary loss suffered by the affected clients. Hence, respondent was justified in dismissing petitioner on the ground of breach of trust. As long as 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 of his position, a managerial employee may be dismissed.

The test of "supervisory" or "managerial status" depends on whether a person possesses authority to act in the interest of his employer and whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment.. (Cruz v. Bank of the Philippine Islands, G.R. No. 173357, [February 13, 2013], 703 PHIL 504-519)


2 KINDS OF POSITIONS OF TRUST IDENTIFIED

There are two classes of positions of trust. The first class consists of managerial employees. They are defined as those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. The second class consists of cashiers, auditors, property custodians, etc.. They are defined as those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. 

In this case, petitioner was a Contract Claims Assistant at respondent's Legal Department at the time he allegedly committed the acts which led to its loss of trust and confidence. It is not the job title but the actual work that the employee performs. It was part of petitioner's responsibilities to monitor the performance of respondent's contractors in relation to the scope of work contracted out to them.

||| (Abel v. Philex Mining Corp., G.R. No. 178976, [July 31, 2009], 612 PHIL 203-222)


Evidence overwhelmingly shows that petitioner Valenzuela was indeed guilty of habitual and gross neglect of his duties. It was not the first time that there occurred a shortage of the merchandise stocks but apparently petitioner Valenzuela did nothing about it and, instead, manipulated documents and records, i.e., stock cards, to create the illusion that all merchandise stocks were accounted for, when in fact a lot of these merchandise were already missing from petitioner Company's Lapu-Lapu terminal. 

Furthermore, petitioner Valenzuela likewise committed fraud and willful breach of the trust reposed in him by petitioner Caltex. He was in-charge of the custody and monitoring of the merchandise stocks, and, as found by the Labor Arbiter, was entrusted with confidence on delicate matters, i.e., the handling and care and protection of the employer's property. Considering that the merchandise stocks are the lifeblood of petitioner Caltex, petitioner Valenzuela's act of allowing the loss of merchandise stocks and concealing these from the employer is reason enough for his termination from his employment.

||| (Valenzuela v. Caltex, Phiippines, Inc., G.R. Nos. 169965-66, [December 15, 2010], 653 PHIL 187-199)


petitioner has a history of committing violations of company rules, the last one being a repeat violation against extending free rides to passengers. This infraction is considered as a grave offense and serious misconduct which merits the penalty of dismissal. The CA also agreed that there was intent to cheat the company of its funds.||| (Mapili v. Philippine Rabbit Bus Lines, Inc., G.R. No. 172506, [July 27, 2011], 670 PHIL 252-263)


RANK AND FILE NOT ENTRUSTED WITH CUTODY OF PROPERTY TERMINATED FOR LOSS OF TRUST AND CONFIDENCE

Since Bañas did not occupy a position of trust and confidence nor was he routinely in charge with the care and custody of Century Iron's money or property, his termination on the ground of loss of confidence was misplaced.

We point out in this respect that loss of confidence applies to: (1) employees occupying positions of trust and confidence, the managerial employees; and (2) employees who are routinely charged with the care and custody of the employer's money or property which may include rank-and-file employees. Examples of rank-and-file employees who may be dismissed for loss of confidence are cashiers, auditors, property custodians, or those who, in the normal routine exercise of their functions, regularly handle significant amounts of money or property. Thus, the phrasing of the petitioners' second assignment of error is inaccurate because a rank-and-file employee who is routinely charged with the care and custody of the employer's money or property may be dismissed on the ground of loss of confidence.

||| (Century Iron Works, Inc. v. Bañas, G.R. No. 184116, [June 19, 2013], 711 PHIL 576-591)


DIFFERENCE IN TERMINATION OF CONFIDENTIAL EMPLOYEES V. RANK AND FILE 

Tirazona, in this case, has given PET more than enough reasons to distrust her. The arrogance and hostility she has shown towards the company and her stubborn, uncompromising stance in almost all instances justify the company's termination of her employment. Moreover, Tirazona's reading of what was supposed to be a confidential letter between the counsel and directors of the PET, even if it concerns her, only further supports her employer's view that she cannot be trusted. In fine, the Court cannot fault the actions of PET in dismissing petitioner.||| (Tirazona v. Court of Appeals, G.R. No. 169712, [March 14, 2008], 572 PHIL 334-357)


TAMPERING OF COMPANY RECORDS SUFFICIENT FOR LOSS OF TRUST

petitioners cannot be faulted for losing their trust in Espadero. As an employee occupying a job which requires utmost fidelity to her employers, she failed to report to her immediate supervisor the tampering of her time card. Whether her failure was deliberate or due to sheer negligence, and whether Espadero was or was not in cahoots with a co-worker, the fact remains that the tampering was not promptly reported and could, very likely, not have been known by petitioners, or, at least, could have been discovered at a much later period, if it had not been reported by Espadero's supervisor to the personnel manager. Petitioners, therefore, cannot be blamed for losing their trust in Espadero.

Moreover, the peculiar nature of Espadero's position aggravates her misconduct. Misconduct has been defined as improper or wrong conduct; the transgression of some established or definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. The misconduct, to be serious, must be of such a grave character and not merely trivial or unimportant. To constitute just cause for termination, it must be in connection with the employee's work. With the degree of trust expected of Espadero, such infraction can hardly be classified as one that is trivial or unimportant. Her failure to promptly report the incident reflects a cavalier regard for the responsibility required of her in the discharge of the duties of her position.

||| (Eats-Cetera Food Services Outlet v. Letran, G.R. No. 179507, [October 2, 2009], 617 PHIL 723-733)



AUTHORIZED CAUSES

INCOMPETENCE

In Prieto, this Court ruled that "[i]t is presumed that before their deployment, the petitioners were subjected to trade tests required by law to be conducted by the recruiting agency to insure employment of only technically qualified workers for the foreign principal." The CA, using the ruling in the said case, ruled that Gran must have passed the test; otherwise, he would not have been hired. Therefore, EDI was at fault when it deployed Gran who was allegedly "incompetent" for the job.||| (EDI-Staffbuilders International, Inc. v. National Labor Relations Commission, G.R. No. 145587, [October 26, 2007], 563 PHIL 1-36)


INEFFICIENCY OF EMPLOYEE; CONDONATION OF EMPLOYER

Of the three instances when Gregorio was temporarily "off-detailed," we find that the last two already ripened into constructive dismissal. While we acknowledge that Gregorio's service record shows that his performance as a security guard was below par, we join the LA in his finding that Gulf Pacific never issued any memo citing him for the alleged repeated errors, inefficiency, and poor performance while on duty, and instead continued to assign him to various posts. This amounts to condonation by Gulf Pacific of whatever infractions Gregorio may have committed. Even assuming the reasons behind Gregorio's being relieved as indicated in his service record to be true, it was incumbent upon Gulf Pacific to be vigilant in its compliance with labor laws. Although we understand that it could have been difficult for Gulf Pacific to post Gregorio given his age, about 50 years old, and his service record, still the agency should not have allowed him to wait indefinitely for an assignment if its clients were in truth less likely to accept him. If, indeed, Gregorio was undesirable as an employee, Gulf Pacific could just have dismissed him for cause. The unreasonable lengths of time that Gregorio was not posted inevitably resulted in his being constructively dismissed from employment.||| (Salvaloza v. National Labor Relations Commission, G.R. No. 182086, [November 24, 2010], 650 PHIL 543-561)


REDUNDANCY

Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. 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. – there is no specific provision of law which treats of a temporary retrenchment or lay-off (Sebuguero v. National Labor Relations Commission, G.R. No. 115394, [September 27, 1995], 318 PHIL 635-653)


There is redundancy when the service capability of the workforce is greater than what is reasonably required to meet the demands of the business enterprise. A position becomes redundant when it is rendered superfluous by any number of factors such as over-hiring of workers, decrease in volume of business, or dropping a particular product line or service activity previously manufactured or undertaken by the enterprise.  

This Court has been consistent in holding that the determination of whether or not an employee's services are still needed or sustainable properly belongs to the employer. Provided there is no violation of law or a showing that the employer was prompted by an arbitrary or malicious act, the soundness or wisdom of this exercise of business judgment is not subject to the discretionary review of the Labor Arbiter and the NLRC. 

However, an employer cannot simply declare that it has become overmanned and dismiss its employees without producing adequate proof to sustain its claim of redundancy. Among the requisites of a valid redundancy program are: (1) the good faith of the employer in abolishing the redundant position; and (2) fair and reasonable criteria in ascertaining what positions are to be declared redundant, such as but not limited to: preferred status, efficiency, and seniority. 

This Court also held that the following evidence may be proffered to substantiate redundancy: the new staffing pattern, feasibility studies/proposal on the viability of the newly created positions, job description and the approval by the management of the restructuring. 

In the case at bar, ETPI was upfront with its employees about its plan to implement a Right-Sizing Program. Even in the face of initial opposition from and rejection of the said program by ETEU, ETPI patiently negotiated with ETEU's officers to make them understand ETPI's business dilemma and its need to reduce its workforce and streamline its organization. This evidently rules out bad faith on the part of ETPI.

||| (Culili v. Eastern Telecommunications Philippines, Inc., G.R. No. 165381, [February 9, 2011], 657 PHIL 342-373)


ALLEGED REDUNDANCY CONTRADICTORY TO ‘VOLUNTARY’ RETIREMENT

While termination of employment and retirement from service are common modes of ending employment, they are mutually exclusive, with varying juridical bases and resulting benefits. Retirement from service is contractual (i.e., based on the bilateral agreement of the employer and employee), while termination of employment is statutory (i.e., governed by the Labor Code and other related laws as to its grounds, benefits and procedure). The benefits resulting from termination vary, depending on the cause. For retirement, Article 287 of the Labor Code gives leeway to the parties to stipulate above a floor of benefits.

The line between voluntary and involuntary retirement is thin but it is one which this Court has drawn. Voluntary retirement cuts employment ties leaving no residual employer liability; involuntary retirement amounts to a discharge, rendering the employer liable for termination without cause. The employee's intent is the focal point of analysis. In determining such intent, the fairness of the process governing the retirement decision, the payment of stipulated benefits, and the absence of badges of intimidation or coercion are relevant parameters. 

Clearly, the instant case is not about retirement since the term has its peculiar meaning and is governed by Article 287 of the Labor Code.Rather, this is a case of termination due to redundancy under Article 283 of the Labor Code.Thus, the demand of GMC for the respondent to sign an "Application for Retirement and Benefits" is really suspect.

||| (General Milling Corp. v. Viajar, G.R. No. 181738, [January 30, 2013], 702 PHIL 532-547)


RETRENCHMENT OR BUSINESS REVERSES

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)||| (Businessday Information Systems and Services, Inc. v. National Labor Relations Commission, G.R. No. 103575, [April 5, 1993])


Under the circumstances, we cannot say that the company's employees were illegally dismissed; rather, they lost their employment because the company ceased operations after failing to recover from their financial reverses. The CA itself recognized what happened to the company when it observed: "The temporary shutdown has ripened into a closure or cessation of operations. In this situation[,] private respondents are definitely entitled to the corresponding benefits of separation." Even the respondents had an inkling of the company's fate when they claimed before the LA that on October 20, 2003, they were called, together with all the other employees of the company, by Villaflor; the latter allegedly told them that he would be closing the company, but would give them their separation pay. He also disclosed to them the reason — he could no longer pay their salaries due to the company's unsettled financial obligations on fuel and ice and other indebtedness.  

The respondents' verbal account of what happened during the meeting, particularly the company's imminent closure, to our mind, confirmed the company's dire situation. The temporary shutdown, it appears, was a last ditch effort on the part of Villaflor to make the company's operations viable but, as it turned out, the effort proved futile. The shutdown became permanent as the CA itself acknowledged. The CA misappreciated the facts when it opined that the respondents were illegally dismissed because they were not reinstated by the petitioners after the lapse of the company's temporary shutdown. It lost sight of the fact that the company did not resume operations anymore, a situation the CA itself recognized. The respondents, therefore, had no more jobs to go back to; hence, their non-reinstatement.

In these lights, the CA was not only incorrect from the point of law; it likewise disregarded, or at the very least, grossly misappreciated the evidence on record — that the petitioner was in distress and had temporarily suspended its operations, and duly reflected these circumstances to the DOLE. From this perspective, there was no grave abuse of discretion to justify the CA's reversal of the NLRC's findings and conclusions.

||| (Navotas Shipyard Corp. v. Montallana, G.R. No. 190053, [March 24, 2014], 730 PHIL 279-294)


SEPARATION PAY NOT NECESSARY IN CASE OF BANKRUPTCY

Where the closure was due to business losses the Labor Code does not impose any obligation upon the employer to pay separation benefits, for obvious reasons. Art. 283 of the Labor Code does not obligate an employer to pay separation benefits when the closure is due to losses.||| (North Davao Mining Corp. v. National Labor Relations Commission, G.R. No. 112546, [March 13, 1996], 325 PHIL 202-217)


AUDITED FINANCIAL STATEMENTS AS PROOF OF SERIOUS BUSINESS LOSSES

To effect a valid retrenchment, the following elements must be present: (1) the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, and real, or only if expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) the employer serves written notice both to the employee/s concerned and the Department of Labor and Employment at least a month before the intended date of retrenchment; (3) the employer pays the retrenched employee separation pay in an amount prescribed by the Code; (4) the employer exercises its prerogative to retrench in good faith; and (5) the employer uses fair and reasonable criteria in ascertaining who would be retrenched or retained.  

The losses must be supported by sufficient and convincing evidence, the normal method of discharging which is the submission of financial statements duly audited by independent external auditors. 

In the present case, Asiakonstrukt failed to submit its audited financial statements within the two years that the case was pending before the Labor Arbiter. It submitted them only after it received the adverse judgment of the Labor Arbiter.

Indubitably, the NLRC is not precluded from receiving evidence on appeal as technical rules of evidence are not binding in labor cases. There is, however, a caveat to this policy. The delay in the submission of evidence should be clearly explained and should adequately prove the employer's allegation of the cause for termination. In the present case, Asiakonstrukt proffered no explanation behind the belated submission. And the financial statements it submitted covered the period 1998-2000. Further, note that the audited financial statement covering the period 1998-2000 was prepared in April 2001, which begs the question of how the management knew at such date of the company's huge losses to justify petitioner's retrenchment in 1999

||| (Anabe v. Asian Construction, G.R. No. 183233, [December 23, 2009], 623 PHIL 857-865)


NOTICE TO DOLE EMPLOYEE PLUS PAYMENT OF SEPARATION PAY TO AFFECTED EMPLOYEES

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. There is also nothing in the records to prove that a written notice was ever given to the DOLE as required by law. GTI's position paper, offer of exhibits, Comment to the Petition, and Memorandum in this case do not mention of any such written notice. 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. In those cases where we found the retrenchment to be illegal and ordered the employees' reinstatement and the payment of back wages, the validity of the cause for retrenchment, that is the existence of imminent or actual serious or substantial losses, was not proven. But here, such a cause is present as found by both the Labor Arbiter and the NLRC. 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

||| (Sebuguero v. National Labor Relations Commission, G.R. No. 115394, [September 27, 1995], 318 PHIL 635-653)


CLOSURE

The phrase "closures or cessation of operations of establishment or undertaking" includes a partial or total closure or cessation. . . . Ordinarily, the closing of a warehouse facility and the termination of the services of employees there assigned is a matter that is left to the determination of the employer in the good faith exercise of its management prerogatives. The applicable law in such a case is Article 283 of the Labor Code which permits 'closure or cessation of operation of an establishment or undertaking not due to serious business losses or financial reverses,' which, in our reading includes both the complete cessation of operations and the cessation of only part of a company's business. And the phrase "closures or cessation . . . not due to serious business losses or financial reverses" recognizes the right of the employer to close or cease his business operations or undertaking even if he is not suffering from serious business losses or financial reverses, as long as he pays his employees their termination pay in the amount corresponding to their length of service.

It would indeed be stretching the intent and spirit of the law if a court were to unjustly interfere in management's prerogative to close or cease its business operations just because said business operation or undertaking is not suffering from any loss. As long as the company's exercise of the same is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the law or a valid agreement, such exercise will be upheld. Clearly then, the right to close an establishment or undertaking may be justified on grounds other than business losses but it cannot be an unbridled prerogative to suit the whims of the employer. The ultimate test of the validity of closure or cessation of establishment or undertaking is that it must be bona fide in character. And the burden of proving such falls upon the employer. In the case at bar, Capitol failed to sufficiently prove its good faith in closing the ISU.

The "Analysis of Income and Expenses" adduced by Capitol showing that the ISU incurred losses from July 1990 to February 1992, to wit: . . . . was prepared by its internal auditor Vicenta Fernandez, a relative of Dr. Clemente, and not by an independent external auditor, hence, not beyond doubt. It is the financial statements audited by independent external auditors which constitute the normal method of proof of the profit and loss performance of a company.

The foregoing disquisition notwithstanding, the existence of business losses is not required to justify the closure or cessation of establishment or undertaking as a ground to terminate employment of employees. Even if the ISU were not incurring losses, its abolition or closure could be justified on other grounds like that proffered by Capitol — extinct demand. Capitol failed, however, to present sufficient and convincing evidence to support such claim of extinct demand. In fact, the employees of Capitol submitted a petition dated April 21, 1992 addressed to Dr. Clemente opposing the abolition of the ISU. The closure of ISU then surfaces to be contrary to the provisions of the Labor Code on termination of employment.

||| (Capitol Medical Center Inc. v. Meris, G.R. No. 155098, [September 16, 2005], 507 PHIL 130-147)


The Constitution, while affording full protection to labor, nonetheless, recognizes "the right of enterprises to reasonable returns on investments, and to expansion and growth." In line with this protection afforded to business by the fundamental law, Article 283 [(now, Article 297)] of the Labor Code clearly makes a policy distinction. It is only in instances 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" that employees whose employment has been terminated as a result are entitled to separation pay. In other words, Article 283 [(now, Article 297)] of the Labor Code does not obligate an employer to pay separation benefits when the closure is due to serious losses. To require an employer to be generous when it is no longer in a position to do so, in our view, would be unduly oppressive, unjust, and unfair to the employer. Ours is a system of laws, and the law in protecting the rights of the working man, authorizes neither the oppression nor the self-destruction of the employer.||| (Benson Industries Employees Union-ALU-TUCP v. Benson Industries, Inc., G.R. No. 200746, [August 6, 2014], 740 PHIL 670-684)


WHEN DONE IN BAD FAITH

Benson even admits in its Comment that it was already saddled with loan from banks as early as 1997 and that it had been unable to service its loan obligations. And yet, nothing appears on record to discount the fact that it still unqualifiedly and freely agreed to the separation pay provision in the July 1, 2005 to June 30, 2010 CBA, its distressed financial condition notwithstanding.

Thus, in view of the foregoing, the Court disagrees with the CA in negating Benson's obligation to pay petitioners their full separation benefits under the said agreement. The postulation that Benson had closed its establishment and ceased operations due to serious business losses cannot be accepted as an excuse to clear itself of any liability since the ground of serious business losses is not, unlike Article 297 of the Labor Code, considered as an exculpatory parameter under the aforementioned CBA. Clearly, Benson, with full knowledge of its financial situation, freely and voluntarily entered into such agreement with petitioners. Hence, having failed to show that the subject CBA provision on separation benefits is contrary to law, morals, public order or public policy, or that the same can be interpreted as one with a condition — for instance, that the parties actually contemplated non-payment of separation benefits in the event of closure due to serious business losses — the Court is constrained to reinstate the October 24, 2008 VA Decision ordering Benson to pay each of the petitioners separation benefits in "an amount equivalent to four (4) days for every year of service based on the latest rate of pay of the [individual petitioner] concerned, subject to whatever legally valid deductions chargeable against [said individual petitioner], whenever applicable."

||| (Benson Industries Employees Union-ALU-TUCP v. Benson Industries, Inc., G.R. No. 200746, [August 6, 2014], 740 PHIL 670-684)


DISEASE

Under Section 8, Rule I, Book VI of the Rules and Regulations Implementing the Labor Code, for a disease to be a valid ground for the dismissal of the employee, the continued employment of such employee is prohibited by law or prejudicial to his health or the health of his co-employees, there must be 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. ||| (Sevillana v. I.T. (International) Corp., G.R. No. 99047, [April 16, 2001], 408 PHIL 570-588)


A plain reading of the abovequoted provision clearly presupposes that it is the employer who terminates the services of the employee found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees. It does not contemplate a situation where it is the employee who severs his or her employment ties. This is precisely the reason why Section 8, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code, directs that an employer shall not terminate the services of the employee 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.||| (Villaruel v. Yeo Han Guan, G.R. No. 169191, [June 1, 2011], 665 PHIL 212-223)


despite notices sent by the petitioner, i.e., letter dated June 12, 2003, requiring respondent to attend an investigation set on July 14, 2003; letter dated July 4, 2003, requiring respondent to appear on July 25, 2003 for investigation; and letter dated July 31, 2003, requiring respondent to appear for the hearing and investigation on August 18, 2003, respondent refused to report to his office, either to resume work or attend the investigations set by the petitioner. Even considering the directive of respondent's doctor to continue with his present regimen for at least another month and a half, it could be safely deduced that, counted from June 4, 2003, respondent's rehabilitation regimen ended on July 19, 2003. Despite the completion of his treatment, respondent failed to attend the investigations set on July 25, 2003 and August 18, 2003. Thus, his unexplained absence in the proceedings should be construed as waiver of his right to be present therein in order to adduce evidence that would have justified his continued absence from work. ||| (Wuerth Phils., Inc. v. Ynson, G.R. No. 175932, [February 15, 2012], 682 PHIL 143-163)


At the outset, it must be maintained that the Labor Code provision on termination on the ground of disease under Article 297 does not apply in this case, considering that it was the petitioner and not the Bank who severed the employment relations. As borne from the records, the clear import of Padillo's September 10, 2007 letter and the fact that he stopped working before the foregoing date and never reported for work even thereafter show that it was Padillo who voluntarily retired and that he was not terminated by the Bank.||| (Padillo v. Rural Bank of Nabunturan, Inc., G.R. No. 199338, [January 21, 2013], 701 PHIL 697-711)


MERGER OR CONSOLIDATION WITH ANOTHER COMPANY

Merger agreement compelled the respondents, FGMC and Uy, to respect the permanent status of the complainants. They could not be dismissed without cause. The seasonal demand of respondents for workers was not a lawful cause to dismiss the complainants who have always been considered permanent, rather than seasonal, workers at Paramount. The respondents were directed to reinstate then to their former positions with full back wages. Jose Uy signed the agreement as President and General Manager of both Paramount Gloves Phils. Inc. and FGMC. Therefore, he is estopped from disclaiming any liability under it. The probationary employment contracts which the private respondents were made to sign on May 23, 1988, a week after the execution of the merger agreement on March 16, 1988, violated the terms of the merger agreement and the employees' right to security of tenure.|||(First General Marketing Corp. v. National Labor Relations Commission, G.R. No. 97835, [June 14, 1993], 295 PHIL 385-388)



SPECIAL CIRCUMSTANCES

PREVENTIVE SUSPENSION

Sections 3 and 4, Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code, Termination of Employment, provide:

"Section 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.

"Section 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 or 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, must indemnify private respondent in the amount of One Thousand Pesos (P1,000.00).||| (JRS Business Corp. v. National Labor Relations Commission, G.R. No. 108891, [July 17, 1995], 316 PHIL 540-546)


petitioners insist that respondent bank never lost trust and confidence in them as it did not place them under preventive suspension, and more tellingly, it even promoted them after the labor arbiter had ordered their reinstatement. Preventive suspension, which is never obligatory on the part of the employer, may be resorted to only when the continued employment of the employee poses "a serious and imminent threat to the life or property of the employer or of his co-workers."  The bank points out that the Alfiscar account, through which the anomalous transactions were coursed, was no longer active at the time the fraud was discovered. Clearly, the bank had reason to conclude that the imminence of the threat posed by the employees was not as vital as it would have been had the dubious account still been open. ||| (Cadiz v. Court of Appeals, G.R. No. 153784, [October 25, 2005], 510 PHIL 721-736)


CONSTRUCTIVE DISMISSAL

The test of constructive dismissal is whether a reasonable person in the employee's position would have felt compelled to give up his position under the circumstances.  It is an act amounting to dismissal but made to appear as if it were not.  Constructive dismissal is, therefore, a dismissal in disguise.  As such, the law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer.  In fact, the employee who is constructively dismissed may be allowed to keep on coming to work.||| (McMer Corp., Inc. v. National Labor Relations Commission, G.R. No. 193421, [June 4, 2014], 735 PHIL 204-223)


FLOATING STATUS NOT TO EXCEED 6 MONTHS

Temporary "off-detail" or "floating status" is the period of time when security guards are in between assignments or when they are made to wait after being relieved from a previous post until they are transferred to a new one. It takes place when the security agency's clients decide not to renew their contracts with the agency, resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster. It also happens in instances where contracts for security services stipulate that the client may request the agency for the replacement of the guards assigned to it even for want of cause, such that the replaced security guard may be placed on temporary "off-detail" if there are no available posts under the agency's existing contracts. During such time, the security guard does not receive any salary or any financial assistance provided by law. It does not constitute a dismissal, as the assignments primarily depend on the contracts entered into by the security agencies with third parties, so long as such status does not continue beyond a reasonable time. When such a "floating status" lasts for more than six (6) months, the employee may be considered to have been constructively dismissed. 

There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice except to forego continued employment. It exists when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely, as an offer involving a demotion in rank and a diminution in pay.

||| (Salvaloza v. National Labor Relations Commission, G.R. No. 182086, [November 24, 2010], 650 PHIL 543-561)


SUSPENSION OF OPERATION ON ACCOUNT OF BUSINESS LOSSES

Closure or suspension of operations for economic reasons is, therefore, recognized as a valid exercise of management prerogative. The determination to cease or suspend operations is a prerogative of management, which the State does not usually interfere with as no business or undertaking is required to continue operating at a loss simply because it has to maintain its workers in employment. Such an act would be tantamount to a taking of property without due process of law.  

However, the burden of proving, with sufficient and convincing evidence, that such closure or suspension is bona fide falls upon the employer.

||| (Nasipit Lumber Co. v. National Organization of Workingmen, G.R. No. 146225, [November 25, 2004], 486 PHIL 348-365)


Serious business losses are substantial losses, not de minimis.  "Losses" means that the business must have operated at a loss for a period of time for the employer "to [have] perceived objectively and in good faith" that the business' financial standing is unlikely to improve in the future.

The burden of proving serious business losses is with the employer.  The employer must show losses on the basis of financial statements covering a sufficient period of time. The period covered must be sufficient for the National Labor Relations Commission and this court to appreciate the nature and vagaries of the business. 

Considering that G.J.T. Rebuilders failed to prove its alleged serious business losses, it must pay respondents their separation pay equivalent to one-month pay or at least one-half-month pay for every year of service, whichever is higher. In computing the period of service, a fraction of at least six months is considered a year. (G.J.T. Rebuilders Machine Shop v. Ambos, G.R. No. 174184, [January 28, 2015], 752 PHIL 166-185)


LAST IN FIRST OUT RULE

It is not disputed that the LIFO rule applies to termination of employment in the line of work. Verily, what is contemplated in the LIFO rule is that when there are two or more employees occupying the same position in the company affected by the retrenchment program, the last one employed will necessarily be the first to go.

Moreover, the reason why there was no violation of the LIFO rule was amply explained by public respondent in this wise:

. . . The LIFO rule under the CBA is explicit. It is ordained that in cases of retrenchment resulting in termination of employment in line of work, the employee who was employed on the latest date must be the first one to go. The provision speaks of termination in the line of work. This contemplates a situation where employees occupying the same position in the company are to be affected by the retrenchment program. Since there ought to be a reduction in the number of personnel in such positions, the length of service of each employees is the determining factor, such that the employee who has a longer period of employment will be retained.

||| (Maya Farms Employees Organization v. National Labor Relations Commission, G.R. No. 106256, [December 28, 1994], 309 PHIL 465-475)


Petitioner also assails the severity of the penalty imposed upon him alleging that he should have merited a suspension only considering his past performance. Unfortunately petitioner does not appear to be a first offender. Aside from the infractions he was found to have committed, it appears that petitioner falsified the truth when he made a false report about the incident to private respondent SMC to cover up for his misdeeds. Moreover on previous occasions, petitioner committed violations of company rules and regulations concerning pricing as a salesman of the company in a way that is detrimental to his employer. On one occasion, he failed to remit collections, so that in 1986 he was suspended for thirty days. Thus, the totality of the infractions that petitioner has committed justifies the penalty of dismissal.||| (Mendoza v. National Labor Relations Commission, G.R. No. 94294, [March 22, 1991], 272-A PHIL 608-615)


Where the totality of the evidence was sufficient to warrant the dismissal of the employees the law warrants their dismissal without making any distinction between a first offender and a habitual delinquent. Under the law, respondent Minister is duly mandated to equally protect and respect not only the labor or workers' side but also the management and/or employers' side. The law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer.||| (Villeno v. National Labor Relations Commission, G.R. No. 108153, [December 26, 1995], 321 PHIL 880-889)


**CONTRA 

As earlier stated, we find no basis for deviating from the oft-espoused legal tenet that findings of facts and conclusion of the labor arbiter are generally accorded not only great weight and respect but even clothed with finality and deemed binding on this Court as long as they are supported by substantial evidence, without any clear showing that such findings of fact, as affirmed by the NLRC, are bereft of substantiation. More so, when passed upon and upheld by the Court of Appeals, they are binding and conclusive upon us and will not normally be disturbed; accordingly, the finding that the alleged absences and incidences of tardiness of private respondent are but past infractions for which petitioners had already imposed several sanctions and for which private respondent had been duly penalized. And being past infractions, they cannot be taken collectively as a justification for the dismissal from service of the employee. 

But even assuming for the sake of argument that the past infractions could still validly be the subject of future punishment, still there is no basis for petitioners' claim that private respondent's supposed habitual absenteeism and tardiness is a form of gross and habitual neglect of duty. Under Article 282 (b) of the Labor Code, gross and habitual neglect of duty by the employee of his duties is a just cause for the termination of the latter's employment. To warrant removal from service, however, the negligence should not merely be gross but also habitual.  In this case, assuming the absences and tardiness of private respondent Asegurado to be habitual, can they also be categorized as gross?

Gross negligence implies a want or absence of or failure to exercise even slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.  Though there may have been times when private respondent's absences were undertaken without the necessary approved leave applications, nevertheless, she would send word for when these would occur. Moreover, quite telling is the fact that nowhere in the memoranda sent to private respondent was there any mention of a complaint relating to the quality of her work. As the present case does not show the presence of one of the two requisites to make the finding of negligence a just cause for dismissal. At the most, private respondent should have been further suspended from service for taking for granted that her leave would be approved by the personnel department of petitioner corporation. The penalty of dismissal is too harsh, considering that private respondent had been with the company for five years and, apparently, the management had no complaint as regards the former's quality of work.

||| (Acebedo Optical v. National Labor Relations Commission, G.R. No. 150171, [July 17, 2007], 554 PHIL 524-547)


LENGTH OF SERVICE

respondent Llonillo's employment service for twenty-two (22) years would not, by itself, mitigate her negligence, especially in view of the substantial loss incurred by petitioner bank. As correctly pointed out by respondent voluntary arbitrator:cdasia

"The Union's claim for compassionate justice on Emy's 22 years of service and as first offender merit scant consideration. The longer an employe(e) stays in the service of the company, the greater is his responsibility for knowledge and compliance with the norms of conduct, and the code of discipline of the company.

||| (Citibank, N.A. v. Gatchalian, G.R. No. 111222, [January 18, 1995], 310 PHIL 211-220)


Length of service is not a bargaining chip that can simply be stacked against the employer. After all, an employer-employee relationship is symbiotic where both parties benefit from mutual loyalty and dedicated service. If an employer had treated his employee well, has accorded him fairness and adequate compensation as determined by law, it is only fair to expect a long-time employee to return such fairness with at least some respect and honesty. Thus, it may be said that betrayal by a long-time employee is more insulting and odious for a fair employer.||| (Moya v. First Solid Rubber Industries, Inc., G.R. No. 184011, [September 18, 2013], 718 PHIL 77-90)


DEMOTION

FUERTE nonetheless decries his transfer as being violative of his security of tenure, the clear implication being that he was constructively dismissed. We have held that an employer acts well within its rights in transferring an employee as it sees fit provided that there is no demotion in rank or diminution in pay. The two circumstances are deemed badges of bad faith, and thus constitutive of constructive dismissal. In this regard, constructive dismissal is defined in the following manner: an involuntary resignation resorted to when continued employment becomes impossible, unreasonable, or unlikely; when there is a demotion in rank or diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. Yet here, the transfer was undertaken beyond the parameters as aforesaid. The instinctive conclusion would be that his transfer is actually a constructive dismissal, but oddly, private respondent never denies that it was really demoting FUERTE for cause. It should be borne in mind, however, that the right to demote an employee also falls within the category of management prerogatives. This arrangement appears to us to be an allowable exercise of company rights. An employer is entitled to impose productivity standards for its workers, and in fact, non-compliance may be visited with a penalty even more severe than demotion.||| (Leonardo v. National Labor Relations Commission, G.R. Nos. 125303 & 126937, [June 16, 2000], 389 PHIL 118-130)


EMPLOYEE’S ABRASIVE CHARACTER AND FAILURE TO GET ALONG WITH OTHER CO-EMPLOYEES

Petitioner's 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. 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.

As petitioner school is run by a religious order, it is but expected that good behavior and proper deportment, especially among the ranks of its own employees, are major considerations in the fulfillment of its mission. Under the circumstances, the sisters cannot be faulted for deciding to terminate private respondent whose presence "has become more a burden rather than a joy" and had proved to be disruptive of the harmonious atmosphere of the school.

||| (Cathedral School of Technology v. National Labor Relations Commission, G.R. No. 101438, [October 13, 1992], 289 PHIL 157-173)


An employee who cannot get along with his co-employees is detrimental to the company for he can upset and strain the working environment. Without the necessary teamwork and synergy, the organization cannot function well. Thus, management has the prerogative to take the necessary action to correct the situation and protect its organization. When personal differences between employees and management affect the work environment, the peace of the company is affected. Thus, an employee's attitude problem is a valid ground for his termination. It is a situation analogous to loss of trust and confidence that must be duly proved by the employer. Similarly, compliance with the twin requirement of notice and hearing must also be proven by the employer.||| (Heavylift Manila Inc. v. Court of Appeals, G.R. No. 154410, [October 20, 2005], 510 PHIL 315-325)


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. (Emphasis supplied)

It bears noting that petitioner cited Cathedral School of Technology in its Comment/Reply to Complainant-Appellant's Appeal Memorandum precisely to show that its dismissal of complainant on the ground of "gross inefficiency and unreasonable behavior" was correctly upheld by the labor arbiter.  

When an employee, despite repeated warnings from the employer, obstinately refuses to curtail a bellicose inclination such that it erodes the morale of co-employees, the same may be a ground for dismissal for serious misconduct.

||| (Citibank v. National Labor Relations Commission, G.R. No. 159302, [February 6, 2008], 568 PHIL 61-78)


RESIGNATION INSTEAD OF TERMINATION

if the termination of employment is by the employee, the resignation must show the concurrence of the intent to relinquish and the overt act of relinquishment, as held in San Miguel Properties v. Gucaban: 

Resignation — the formal pronouncement or relinquishment of a position or office — is the voluntary act of an employee who is in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and he has then no other choice but to disassociate himself from employment. The intent to relinquish must concur with the overt act of relinquishment; hence, the acts of the employee before and after the alleged resignation must be considered in determining whether he in fact intended to terminate his employment. In illegal dismissal cases, fundamental is the rule that when an employer interposes the defense of resignation, on him necessarily rests the burden to prove that the employee indeed voluntarily resigned.

||| (Mendoza v. HMS Credit Corp., G.R. No. 187232, [April 17, 2013], 709 PHIL 756-771)


SIGNING OF RELEASE WAIVERS AND QUITCLAIMS

The validity of quitclaims executed by laborers has long been recognized in this jurisdiction. In Periquet vs. National Labor Relations Commission (186 SCRA 724 [1990]), this Court ruled that not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement of the claims of the employee, it is binding on the parties and may not later be disowned simply because of a change of mind. Such legitimate waivers resulting from voluntary settlements of laborer's claims should be treated and upheld as the law between the parties (Labor Congress of the Philippines vs. NLRC, 292 SCRA 469, 477 [1998]). However, when as in this case, the voluntariness of the execution of the quitclaim or release is put into issue, then the claim of employee may still be given due course (Talla vs. National Labor Relations Commission, 175 SCRA 479, 480-481 [1989]). The law looks with disfavor upon quitclaims and releases by employees pressured into signing the same by unscrupulous employers minded to evade legal responsibilities ||| (Becton Dickinson Phils., Inc. v. National Labor Relations Commission, G.R. Nos. 159969 & 160116, [November 15, 2005], 511 PHIL 566-591)


In certain cases, however, the Court has given effect to quitclaims executed by employees if the employer is able to prove the following requisites, to wit: (1) the employee executes a deed of quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the quitclaim is credible and reasonable; and (4) the contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with a right recognized by law.||| (Goodrich Manufacturing Corp. v. Ativo, G.R. No. 188002, [February 1, 2010], 625 PHIL 102-111)


IMMORALITY / SEXUAL HARASSMENT 

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.||| (Chua-Qua v. Clave, G.R. No. L-49549, [August 30, 1990], 267 PHIL 141-152)


Section 3 of Republic Act 7877 provides: "SEC. 3. Work, Education or Training-related Sexual Harassment Defined. — Work, education or training-related sexual harassment is committed by an employer, employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other person who, having authority, influence or moral ascendancy over another in a work or training or education environment, demands, requests or otherwise requires any sexual favor from the other, regardless of whether the demand, request or requirement for submission is accepted by the object of said Act. "(a) In a work-related or employment environment, sexual harassment is committed when: "(1) The sexual favor is made as a condition in the hiring or in the employment, re-employment or continued employment of said individual, or in granting said individual favorable compensation, terms, conditions, promotions, or privileges; or the refusal to grant the sexual favor results in limiting, segregating or classifying the employee which in any way would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said employee."||| (Jacutin v. People, G.R. No. 140604, [March 6, 2002], 428 PHIL 508-519)


In this case, it is the President of the Philippines, as the proper disciplining authority, who would determine whether there is a valid cause for the removal of Rayala as NLRC Chairman. This power, however, is qualified by the phrase "for cause as provided by law". Thus, when the President found that Rayala was indeed guilty of disgraceful and immoral conduct, the Chief Executive did not have unfettered discretion to impose a penalty other than the penalty provided by law for such offense. As cited above, the imposable penalty for the first offense of either the administrative offense of sexual harassment or for disgraceful and immoral conduct is suspension of six (6) months and one (1) day to one (1) year. Accordingly, it was error for the Office of the President to impose upon Rayala the penalty of dismissal from the service, a penalty which can only be imposed upon commission of a second offense.

Even if the OP properly considered the fact that Rayala took advantage of his high government position, it still could not validly dismiss him from the service. Under the Revised Uniform Rules on Administrative Cases in the Civil Service,  taking undue advantage of a subordinate may be considered as an aggravating circumstance and where only aggravating and no mitigating circumstances are present, the maximum penalty shall be imposed.  Hence, the maximum penalty that can be imposed on Rayala is suspension for one (1) year.

||| (Domingo v. Rayala, G.R. Nos. 155831, 155840 & 158700, [February 18, 2008], 569 PHIL 423-458)


the determination of whether a conduct is disgraceful or immoral involves a two-step process: first, a consideration of the totality of the circumstances surrounding the conduct; and second, an assessment of the said circumstances vis-à-vis the prevailing norms of conduct, i.e., what the society generally considers moral and respectable.

That the petitioner was employed by a Catholic educational institution per se does not absolutely determine whether her pregnancy out of wedlock is disgraceful or immoral. There is still a necessity to determine whether the petitioner's pregnancy out of wedlock is considered disgraceful or immoral in accordance with the prevailing norms of conduct.

||| (Leus v. St. Scholastica's College Westgrove, G.R. No. 187226, [January 28, 2015], 752 PHIL 186-220)


The totality of the circumstances of this case does not justify the conclusion that Cadiz committed acts of immorality. Similar to Leus, Cadiz and her boyfriend were both single and had no legal impediment to marry at the time she committed the alleged immoral conduct. In fact, they eventually married on April 15, 2008.  Aside from these, the labor tribunals' respective conclusion that Cadiz's "indiscretion" "scandalized the Brent community" is speculative, at most, and there is no proof adduced by Brent to support such sweeping conclusion. Even Brent admitted that it came to know of Cadiz's "situation" only when her pregnancy became manifest.  Brent also conceded that "[a]t the time [Cadiz] and Carl R. Cadiz were just carrying on their boyfriend-girlfriend relationship, there was no knowledge or evidence by [Brent] that they were engaged also in premarital sex."  This only goes to show that Cadiz did not flaunt her premarital relations with her boyfriend and it was not carried on under scandalous or disgraceful circumstances. As declared in Leus, "there is no law which penalizes an unmarried mother by reason of her sexual conduct or proscribes the consensual sexual activity between two unmarried persons; that neither does such situation contravene[s] any fundamental state policy enshrined in the Constitution."  The fact that Brent is a sectarian institution does not automatically subject Cadiz to its religious standard of morality absent an express statement in its manual of personnel policy and regulations, prescribing such religious standard as gauge as these regulations create the obligation on both the employee and the employer to abide by the same.||| (Capin-Cadiz v. Brent Hospital and Colleges, Inc., G.R. No. 187417, [February 24, 2016], 781 PHIL 610-643)



WHEN NOT SEXUAL HARASSMENT

In her report, the investigating justice held that a mere casual buss on the cheek is not a sexual conduct or favor and does not fall within the purview of sexual harassment under R.A. No. 7877. She found that the complainant failed to show by convincing evidence that the acts of the respondent judge in greeting her with a kiss on the cheek, in a 'beso-beso' fashion, were carried out with lustful and lascivious desires or were motivated by malice or ill motive. Hence, she recommended that the administrative complaint be dismissed and, accordingly, the respondent judge be exonerated therefrom.

The Supreme Court agreed with the findings of the investigating justice. The Court had reviewed carefully the records of the case and found no convincing evidence to sustain complainant's charges. What the Court perceived to have been committed by respondent judge were casual gestures of friendship and camaraderie, nothing more, nothing less. In kissing complainant, the Court found no indication that respondent judge was motivated by malice or lewd design. Complainant misunderstood respondent judge's actuations and construed them as work related sexual harassment under R.A. 7877. However, from the records on hand, there was no showing that the respondent judge demanded, requested or required any sexual favor from complainant in exchange for "favorable compensation, terms, conditions, promotion or privileges" specified under Section 3 of R.A. 7877. Nor did he, by his actuations, violate the Canons of Judicial Ethics or the Code of Professional Responsibility. Thus, the Court exonerated the respondent judge from the charges against him. He was, however, advised to be more circumspect in his deportment.

||| (Aquino v. Acosta, A.M. No. CTA-01-1, [April 2, 2002], 429 PHIL 498-510)


By abandoning his lawful wife and cohabiting with another woman who had borne him a child, respondent had failed to maintain the highest degree of morality expected and required of a member of the Bar.||| (Toledo v. Toledo, A.C. No. 266, [April 27, 1963], 117 PHIL 768-776)


TERMINATION INSTIGATED BY UNION ON ACCOUNT OF UNION SECURITY CLAUSE 

While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union security clause of the collective bargaining agreement upon the recommendation by the union, this dismissal should not be done hastily and summarily thereby eroding the employees' right to due process, self-organization and security of tenure. The enforcement of union security clauses is authorized by law provided such enforcement is not characterized by arbitrariness, and always with due process. Even on the assumption that the federation had valid grounds to expel the union officers, due process requires that these union officers be accorded a separate hearing by respondent company.||| (Malayang Samahan Ng Mga Manggagawa Sa M. Greenfield v. Ramos, G.R. No. 113907, [February 28, 2000], 383 PHIL 329-374)


FPSI was justified in enforcing the Union Security Clause in the CBA. However, We cannot countenance respondents' failure to accord herein petitioners the due process they deserve after the former dismissed them outright "in order to avoid a serious labor dispute among the officers and members of the bargaining agent". In enforcing the Union Security Clause in the CBA, We are upholding the sanctity and inviolability of contracts. But in doing so, We cannot override an employee's right to due process. In Carino v. National Labor Relations Commission, We took a firm stand in holding that:

The power to dismiss is a normal prerogative of the employer. However, this is not without limitation. The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement . . . . Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood. Employers should respect and protect the rights of their employees, which include the right to labor."

Thus, as held in that case, "the right of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the company or his own Union is not wiped away by a Union Security Clause or a Union Shop Clause in a collective bargaining agreement. An employee is entitled to be protected not only from a company which disregards his rights but also from his own Union, the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and mere dismissal from his job"

||| (Inguillo v. First Philippine Scales, Inc., G.R. No. 165407, [June 5, 2009], 606 PHIL 464-489)


EFFECT WHEN EMPLOYER CHOOSES TO EXTEND SUSPENSION PERIOD

Sections 8 and 9 of Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code (Implementing Rules), viz:

SEC. 8. 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. 9. Period of suspension. — No preventive suspension shall last longer than thirty (30) days. The employer shall thereafter reinstate the worker in his former or in a substantially equivalent position or 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. (Emphasis, italics, and underscoring supplied)

As above-quoted Section 9 of the said Implementing Rules expressly provides, in the event the employer chooses to extend the period of suspension, he is required to pay the wages and other benefits due the worker and the worker is not bound to reimburse the amount paid to him during the extended period of suspension even if, after the completion of the hearing or investigation, the employer decides to dismiss him.

||| (Pido v. National Labor Relations Commission, G.R. No. 169812, [February 23, 2007], 545 PHIL 507-519)


To clarify, the following should be considered in terminating the services of employees:

(1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. "Reasonable opportunity" under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense.  This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees.

(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment.

||| (King of Kings Transport, Inc. v. Mamac, G.R. No. 166208, [June 29, 2007], 553 PHIL 108-119)


Section 2, Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, provides:

Section 2. Standards of due process: requirements of notice. — In all cases of termination of employment, the following standards of due process shall be substantially observed:

I. For termination of employment based on just causes as defined in Article 282 of the Code:

(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;

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and

(c) 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.

||| (Magro Placement and General Services v. Hernandez, G.R. No. 156964, [July 4, 2007], 553 PHIL 374-385)


The two-notice requirement of the Labor Code is an essential part of due process. The first notice informing the employee of the charges should neither be pro-forma nor vague. It should set out clearly what the employee is being held liable for. The employee should be afforded ample opportunity to be heard and not mere opportunity. As explained in King of Kings Transport, Inc., ample opportunity to be heard is especially accorded the employees sought to be dismissed after they are specifically informed of the charges in order to give them an opportunity to refute such accusations leveled against them. Since the notice of charges given to Genuino is inadequate, the dismissal could not be in accordance with due process.||| (Genuino v. National Labor Relations Commission, G.R. Nos. 142732-33 & 142753-54, [December 4, 2007], 564 PHIL 315-336)


In this case, Unilever was not direct and specific in its first notice to Rivera. The words it used were couched in general terms and were in no way informative of the charges against her that may result in her dismissal from employment. Evidently, there was a violation of her right to statutory due process warranting the payment of indemnity in the form of nominal damages. Hence, the Court finds no compelling reason to reverse the award of nominal damages in her favor. The Court, however, deems it proper to increase the award of nominal damages from P20,000.00 to P30,000.00, as initially awarded by the NLRC, in accordance with existing jurisprudence.||| (Unilever Philippines Inc. v. Rivera, G.R. No. 201701, [June 3, 2013], 710 PHIL 124-138)


IS THE EMPLOYER REQUIRED TO INFORM THE EMPLOYEE IN THE APPRAISAL/CHARGE SHEET THAT HE MAY BE TERMINATED FOR THE INFRACTION

Contrary to Esguerra's allegation, the law does not require that an intention to terminate one's employment should be included in the first notice. It is enough that employees are properly apprised of the charges brought against them so they can properly prepare their defenses; it is only during the second notice that the intention to terminate one's employment should be explicitly stated.

There is also no basis to question the absence of a proper hearing. In Perez, the Court provided the following guiding principles in connection with the hearing requirement in dismissal cases:

a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way.

b) a formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it.

c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or conference" requirement in the implementing rules and regulations. 

In sum, the existence of an actual, formal "trial-type" hearing, although preferred, is not absolutely necessary to satisfy the employee's right to be heard. Esguerra was able to present her defenses; and only upon proper consideration of it did Valle Verde send the second memorandum terminating her employment. Since Valle Verde complied with the two-notice requirement, no procedural defect exists in Esguerra's termination.

||| (Esguerra v. Valle Verde Country Club, Inc., G.R. No. 173012, [June 13, 2012], 687 PHIL 163-171)


The failure of petitioner to give private respondent the benefit of a hearing before he was dismissed constitutes an infringement of his constitutional right to due process of law and equal protection of the laws. The standards of due process in judicial as well as administrative proceedings have long been established. In its bare minimum due process of law simply means giving notice and opportunity to be heard before judgment is rendered. 3

The claim of petitioner that a formal investigation was not necessary because the incident which gave rise to the termination of private respondent was witnessed by his co-employees and supervisors is without merit. The basic requirement of due process is that which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial.

||| (Wenphil Corp. v. National Labor Relations Commission, G.R. No. 80587, [February 8, 1989], 252 PHIL 73-83)


Procedurally, (1) if the dismissal is based on a just cause under Article 282, 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.

From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons under Article 284, and due process was observed; (2) the dismissal is without just or authorized cause but due process was observed; (3) the dismissal is without just or authorized cause and there was no due process; and (4) the dismissal is for just or authorized cause but due process was not observed.

In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any liability.

In the second and third situations where the dismissals are illegal, Article 279 mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement.

In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process.

The present case squarely falls under the fourth situation. The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company. Private respondent, however, did not follow the notice requirements and instead argued that sending notices to the last known addresses would have been useless because they did not reside there anymore. Unfortunately for the private respondent, this is not a valid excuse because the law mandates the twin notice requirements to the employee's last known address. Thus, it should be held liable for non-compliance with the procedural requirements of due process.

||| (Agabon v. National Labor Relations Commission, G.R. No. 158693, [November 17, 2004], 485 PHIL 248-367)


ADMINISTRATIVE HEARING/INVESTIGATION NOT REQUIRED

There is no need for a hearing or conference. We note a marked difference in the standards of due process to be followed as prescribed in the Labor Code and its implementing rules. The Labor Code, on one hand, provides that an employer must provide the employee ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires:

ART. 277. Miscellaneous provisions. — . . .

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. (emphasis supplied)

The omnibus rules implementing the Labor Code, on the other hand, require a hearing and conference during which the employee concerned is given the opportunity to respond to the charge, present his evidence or rebut the evidence presented against him: 

Section 2. Security of Tenure. — . . .

(d) In all cases of termination of employment, the following standards of due process shall be substantially observed:

For termination of employment based on just causes as defined in Article 282 of the Labor Code:

(i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side.

(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him.

(iii) 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. 

Which one should be followed? Is a hearing (or conference) mandatory in cases involving the dismissal of an employee? Can the apparent conflict between the law and its IRR be reconciled?

At the outset, we reaffirm the time-honored doctrine that, in case of conflict, the law prevails over the administrative regulations implementing it.  The authority to promulgate implementing rules proceeds from the law itself. To be valid, a rule or regulation must conform to and be consistent with the provisions of the enabling statute. As such, it cannot amend the law either by abridging or expanding its scope.

||| (Perez v. Philippine Telegraph and Telephone Co., G.R. No. 152048, [April 7, 2009], 602 PHIL 522-564)


WHEN EMPLOYEE HAS VOLUNTARILY ADMITTED GUILT

Petitioner claims that without giving her the right to be heard, private respondent found her guilty of violating company rules for having inserted in the approved requisition request an order for an executive swivel chair and for other violations of company rules allegedly committed in the past. With respect to the first ground (inserting an additional item in the approved request for purchase), we hold that no formal hearing was necessary considering that petitioner admitted responsibility for the unauthorized insertion. It was sufficient that she was informed of the findings of management on the basis of its decision to dismiss her.||| (Bernardo v. National Labor Relations Commission, G.R. No. 105819, [March 15, 1996], 325 PHIL 371-390)


RIGHT TO COUNSEL ON THE PART OF THE EMPLOYEE – IS IT MANDATORY?

The right to counsel and the assistance of one in investigations involving termination cases is neither indispensable nor mandatory, except when the employee himself requests for one or that he manifests that he wants a formal hearing on the charges against him. In petitioner's case, there is no showing that he requested for a formal hearing to be conducted or that he be assisted by counsel. Verily, since he was furnished a second notice informing him of his dismissal and the grounds therefor, the twin-notice requirement had been complied with to call for a deletion of the appellate court's award of nominal damages to petitioner. (Lopez v. Alturas Group of Companies, G.R. No. 191008, [April 11, 2011], 663 PHIL 121-131)


BURDEN OF PROOF RESTS UPON EMPLOYER TO SHOW JUST CAUSE AND DUE PROCESS

Private respondent's documentary evidence showing the culpability of petitioners should prevail over petitioners' uncorroborated explanations and self-serving denials regarding their involvement in the pilferages. All administrative determinations require only substantial proof and not clear and convincing evidence (Manalo v. Roldan-Confesor, 215 SCRA 808). Proof beyond reasonable doubt of the employee's misconduct is not required, it being sufficient that there is some basis for the same or that the employer has reasonable ground to believe that the employee is responsible for the misconduct, and his participation therein renders him unworthy of the trust and confidence demanded by his position (Riker v. Ople, 155 SCRA 85). Thus, petitioners cannot assert that the public respondent closed its eyes to their evidence. The latter's findings are supported by substantial evidence which goes beyond the minimum evidentiary support required by law.||| (Segismundo v. National Labor Relations Commission, G.R. No. 112203, [December 13, 1994], 309 PHIL 160-165)


Having been in the employ of private respondents continuously for more than one year, under the law, petitioner is considered a regular employee. Proof beyond reasonable doubt is not required as a basis for judgment on the legality of an employer's dismissal of an employee, nor even preponderance of evidence for that matter, substantial evidence being sufficient.  Petitioner's contention that private respondents terminated his employment due to their suspicion that he was being enticed by another firm to work for it was not refuted by private respondents. The labor arbiter's conclusion that petitioner's dismissal is therefore illegal, is not necessarily arbitrary or erroneous. It is entitled to great weight and respect.

It was error and grave abuse of discretion for the NLRC to remand the case for further proceedings to determine whether or not petitioner was private respondents' employee. This would only prolong the final disposition of the complaint. It is stressed that, in labor cases, simplification of procedures, without regard to technicalities and without sacrificing the fundamental requisites of due process, is mandated to ensure the speedy administration of justice.

||| (Domasig v. National Labor Relations Commission, G.R. No. 118101, [September 16, 1996], 330 PHIL 518-527)


In cases of illegal dismissal, the burden is on the employer to prove that there was a valid ground for dismissal. Mere allegation of reduction of costs without any proof to substantiate the same cannot be given credence by the Court. As the respondents failed to rebut petitioners' evidence, the irresistible conclusion is that the dismissal in question was illegal.||| (Medenilla v. Philippine Veterans Bank, G.R. No. 127673, [March 13, 2000], 384 PHIL 529-539)


To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overt acts. Mere absence is not sufficient. The burden of proof is on the employer to show an unequivocal intent on the part of the employee to discontinue employment. 

In this case, the respondent company failed to discharge this burden. Certain facts dissuade us from believing that petitioner intended to sever his employment relations with respondent company. First, it is undisputed that petitioner filed applications for leave on September 1, 1995, and again on September 12 and 19, 1995. The filing of applications for leave is inconsistent with petitioner's alleged abandonment.  Second, petitioner exerted much effort in complying with the memoranda issued by respondent company. When petitioner was given a Memorandum dated September 26, 1995 that he was being placed under preventive suspension and was directed to report to a certain Mr. T. Cunanan within three (3) days from receipt of the notice, petitioner promptly reported to respondent company's Main Office and explained his side in a formal investigation. When, on October 21, 1995,  petitioner received respondent company's Memorandum dated October 11, 1995 that he was deemed to have abandoned his job and unless he reports to work within two (2) days from receipt of the memorandum, he shall be considered to have constructively resigned, petitioner likewise promptly reported to their office and tried to seek an audience with the company President, private respondent Nisce. He made several attempts to talk to private respondent Nisce until finally, he was allowed to return to work on November 4, 1995. Third, he reported regularly after he was allowed to do so starting November 4, 1995 except that respondent company did not give him any work assignment. These acts clearly show that petitioner was still interested in his job.

||| (De Guzman v. National Labor Relations Commission, G.R. No. 167701, [December 12, 2007], 564 PHIL 600-617)


With respect to the procedural aspect of private respondent's dismissal, he was given ample opportunity to present his side and to defend himself against the charges against him. He had every opportunity to be heard. Petitioner sent a letter dated July 8, 1988, to respondent, requiring him to answer the charges against him. He participated in the investigation conducted by the company and he appeared with his counsel on October 3, 1988. After investigation, he was notified of his dismissal. The fact that respondent Diamante was not able to confront Pineda did not mean that he was deprived of his right to due process. 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.||| (Philippine Airlines, Inc. v. National Labor Relations Commission, G.R. No. 115785, [August 4, 2000], 392 PHIL 50-57)


WHERE THERE IS JUST CAUSE AND DUE PROCESS, EMPLOYEE NOT ENTITLED TO SEPARATION PAY


In exceptional cases, however, the Court has granted separation pay to a legally dismissed employee as an act of "social justice" or on "equitable grounds." In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) did not reflect on the moral character of the employee. The leading case of Philippine Long Distance Telephone Co. vs. NLRC is instructive on this point:

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice.

||| (Unilever Philippines Inc. v. Rivera, G.R. No. 201701, [June 3, 2013], 710 PHIL 124-138)


REINSTATEMENT PLUS FULL BACKWAGES, OR SEPARATION PAY, IN LIEU OF REINSTATEMENT

We thus rule that the petitioner's dismissal from employment was illegal. She is therefore entitled to reinstatement with full back wages from the time she was illegally dismissed until such reinstatement, pursuant to R.A. No. 6715 and the Resolution of this Court, en banc, of 28 November 1996 in Bustamante v. National Labor Relations Commission. However, considering the seemingly irreconcilable differences between the parties and the consequent strained relations between them, reinstatement may no longer be feasible nor prove to be expedient and practical. Reinstatement could only further exacerbate the tension between the parties and tempt vindictiveness.

Accordingly, in lieu of reinstatement, separation pay equivalent to one month's salary for every year of service may be awarded.

||| (Dela Cruz v. National Labor Relations Commission, G.R. No. 119536, [February 17, 1997], 335 PHIL 932-944)


RECOMPUTATION OF BACKWAGES IS AUTOMATICALLY INTEGRATED INTO DECISION WHERE PARTY HAS APPEALED THE CASE

recomputation as this step is a necessary consequence that flows from the nature of the illegality of dismissal declared by the Labor Arbiter in that decision.  A recomputation (or an original computation, if no previous computation has been made) is a part of the law — specifically, Article 279 of the Labor Code and the established jurisprudence on this provision — that is read into the decision. By the nature of an illegal dismissal case, the reliefs continue to add up until full satisfaction, as expressed under Article 279 of the Labor Code. The recomputation of the consequences of illegal dismissal upon execution of the decision does not constitute an alteration or amendment of the final decision being implemented. The illegal dismissal ruling stands; only the computation of monetary consequences of this dismissal is affected, and this is not a violation of the principle of immutability of final judgments. (Nacar v. Gallery Frames, G.R. No. 189871, [August 13, 2013], 716 PHIL 267-283)


WHEN REINSTATEMENT IS NOT DONE IN GOOD FAITH; DEMOTION

MORAL AND EXEMPLARY DAMAGES

Moral damages are recoverable only where the dismissal of the employee was attended by bad faith or fraud or constituted an act oppressive to labor or was done in a manner contrary to morals, good customs or public policy. Exemplary damages may be awarded only if the dismissal was effected in a wanton, oppressive or malevolent manner. None of these grounds has been proven.||| (Garcia v. National Labor Relations Commission, G.R. No. 110518, [August 1, 1994], 304 PHIL 798-806)


Private respondent is not entitled to the recovery of moral damages since these are recoverable only where the dismissal of the employee was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy.||| (Zamboanga City Electric Cooperative, Inc. v. Buat, G.R. No. 100514, [March 29, 1995], 312 PHIL 957-964)


Not every employee who is illegally dismissed or suspended is entitled to damages. As a rule, moral damages are recoverable only where the dismissal or suspension of the employee was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. Bad faith does not simply mean negligence or bad judgment. It involves a state of mind dominated by ill will or motive. It implies a conscious and intentional design to do a wrongful act for a dishonest purpose or some moral obliquity. The person claiming moral damages must prove the existence of bad faith by clear and convincing evidence for the law always presumes good faith. In the case at bar, there is no showing that the management of petitioner company was moved by some evil motive in suspending private respondent. It suspended private respondent on an honest, albeit erroneous, belief that private respondent's act of leaving the company premises to take his meal at home constituted abandonment of post which warrants the penalty of suspension. Also, it is evident from the facts that petitioner gave private respondent all the opportunity to refute the charge against him and to defend himself. These negate the existence of bad faith on the part of petitioner. Under the circumstances, we hold that private respondent is not entitled to moral damages.||| (Philippine Airlines, Inc. v. National Labor Relations Commission, G.R. No. 132805, [February 2, 1999], 362 PHIL 197-204)


To warrant an award of moral damages, it must be shown that the dismissal of the employee was attended by bad faith, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. The Labor Arbiter ruled that there was unfair labor practice. Unfair labor practices violate the constitutional rights of workers and employees to self-organization, are inimical to the legitimate interests of both labor and management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect; and disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations. As the conscience of the government, it is the Court's sworn duty to ensure that none trifles with labor rights. For this reason, we find it proper in this case to impose moral and exemplary damages on private respondent. In determining the amount of damages recoverable, the business, social and financial position of the offended parties and the business and financial position of the offender are taken into account. It is our view that herein private respondents had not fully acted in good faith. However, we are cognizant that a cooperative promotes the welfare of its own members. The economic benefits filter to the cooperative members. Either equally or proportionally, they are distributed among members in correlation with the resources of the association utilized. Cooperatives help promote economic democracy and support community development. Under these circumstances, we deem it proper to reduce moral damages to P10,000.00 payable by private respondent NEECO I to each individual petitioner. We also deem it sufficient for private respondent NEECO I to pay each individual petitioner P5,000.00 to answer for exemplary damages, based on the provisions of Articles 2229 and 2232 of the Civil Code. c||| (Nueva Ecija I Electric Cooperative, Inc. v. National Labor Relations Commission, G.R. No. 116066, [January 24, 2000], 380 PHIL 44-60)


Considering the factory practice which management tolerated, we are persuaded that Filoteo, in his rush to catch the service vehicle, merely forgot to correct his initial time-out entry. Nothing is shown to prove he deliberately falsified his daily time record to deceive the company. The NLRC found that even management's own evidence reflected that a certain Felix Pelayo, a co-worker of private respondent, was also allowed to go home that night and like private respondent logged in advance 7:00 a.m. as his time-out. This supports Filoteo's claim that it was common practice among night-shift workers to log in their usual time-out in advance in the daily time record.

Moreover, as early as Tide Water Associated Oil Co. v. Victory Employees and Laborers' Association, 85 Phil. 166 (1949), we ruled that, where a violation of company policy or breach of company rules and regulations was found to have been tolerated by management, then the same could not serve as a basis for termination.

All told we see no reason to find that the NLRC gravely abused its discretion when it ruled that private respondent was illegally dismissed. Hence we concur in that ruling. Nonetheless, we find that the award of moral and exemplary damages by the public respondent is not in order and must be deleted. Moral damages are recoverable only where the dismissal of the employee was tainted by bad faith or fraud, or where it constituted an act oppressive to labor, and done in a manner contrary to morals, good customs or public policy.  Exemplary damages may be awarded only if the dismissal was done in a wanton, oppressive, or malevolent manner.  None of these circumstances exist in the present case.

||| (Permex Inc. v. National Labor Relations Commission, G.R. No. 125031, [January 24, 2000], 380 PHIL 79-88)


A contingent fee arrangement is an agreement laid down in an express contract between a lawyer and a client in which the lawyer's professional fee, usually a fixed percentage of what may be recovered in the action, is made to depend upon the success of the litigation. This arrangement is valid in this jurisdiction. It is, however, under the supervision and scrutiny of the court to protect clients from unjust charges. Section 13 of the Canons of Professional Ethics states that "[a] contract for a contingent fee, where sanctioned by law, should be reasonable under all the circumstances of the case including the risk and uncertainty of the compensation, but should always be subject to the supervision of a court, as to its reasonableness." When it comes, therefore, to the validity of contingent fees, in large measure it depends on the reasonableness of the stipulated fees under the circumstances of each case. The reduction of unreasonable attorney's fees is within the regulatory powers of the courts. cda

We agree with the NLRC's assessment that fifty percent of the judgment award as attorney's fees is excessive and unreasonable. The financial capacity and economic status of the client have to be taken into account in fixing the reasonableness of the fee. Noting that petitioner's clients were lowly janitors who receive miniscule salaries and that they were precisely represented by petitioner in the labor dispute for reinstatement and claim for backwages, wage differentials, emergency cost of living allowance, thirteenth-month pay and attorney's fees to acquire what they have not been receiving under the law and to alleviate their living condition, the reduction of petitioner's contingent fee is proper. Labor cases, it should be stressed, call for compassionate justice. Furthermore, petitioner's contingent fee falls within the purview of Article 111 of the Labor Code. This article fixes the limit on the amount of attorney's fees which a lawyer, like petitioner, may recover in any judicial or administrative proceedings since the labor suit where he represented private respondents asked for the claim and recovery of wages. In fact, We are not even precluded from fixing a lower amount than the ten percent ceiling prescribed by the article when circumstances warrant it. Nonetheless, considering the circumstances and the able handling of the case, petitioner's fee need not be further reduced. The manifestation of petitioner's four clients indicating their conformity with the contingent fee contract did not make the agreement valid. The contingent fee contract being unreasonable and unconscionable the same was correctly disallowed by public respondent NLRC even with respect to the four private respondents who agreed to pay higher percentage. Petitioner is reminded that as a lawyer he is primarily an officer of the court charged with the duty of assisting the court in administering impartial justice between the parties. When he takes his oath, he submits himself to the authority of the court and subjects his professional fees to judicial control.

||| (Taganas v. National Labor Relations Commission, G.R. No. 118746 (Resolution), [September 7, 1995], 318 PHIL 157-163)


Article 111 of the Labor Code, as amended, governs the grant of attorney's fees in labor cases:

'Art. 111. Attorney's fees. — (a) In cases of unlawful withholding of wages, the culpable party may be assessed attorney's fees equivalent to ten percent of the amount of wages recovered.

(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorney's fees which exceed ten percent of the amount of wages recovered.'

Section 8, Rule VIII, Book III of its Implementing Rules also provides, viz.:

'Section 8. Attorney's fees. — Attorney's fees in any judicial or administrative proceedings for the recovery of wages shall not exceed 10% of the amount awarded. The fees may be deducted from the total amount due the winning party.' IAcDET

We explained in PCL Shipping Philippines, Inc. v. National Labor Relations Commission that there are two commonly accepted concepts of attorney's fees — the ordinary and extraordinary. In its ordinary concept, an attorney's fee is the reasonable compensation paid to a lawyer by his client for the legal services the former renders; compensation is paid for the cost and/or results of legal services per agreement or as may be assessed. In its extraordinary concept, attorney's fees are deemed indemnity for damages ordered by the court to be paid by the losing party to the winning party. The instances when these may be awarded are enumerated in Article 2208 of the Civil Code, specifically in its paragraph 7 on actions for recovery of wages, and is payable not to the lawyer but to the client, unless the client and his lawyer have agreed that the award shall accrue to the lawyer as additional or part of compensation.

We also held in PCL Shipping that Article 111 of the Labor Code, as amended, contemplates the extraordinary concept of attorney's fees and that Article 111 is an exception to the declared policy of strict construction in the award of attorney's fees. Although an express finding of facts and law is still necessary to prove the merit of the award, there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. . . .

We similarly so ruled in RTG Construction, Inc. v. Facto and in Ortiz v. San Miguel Corporation. In RTG Construction, we specifically stated:

'Settled is the rule that in actions for recovery of wages, or where an employee was forced to litigate and, thus, incur expenses to protect his rights and interests, a monetary award by way of attorney's fees is justifiable under Article 111 of the Labor Code; Section 8, Rule VIII, Book III of its Implementing Rules; and paragraph 7, Article 2208 of the Civil Code. The award of attorney's fees is proper, and there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. There need only be a showing that the lawful wages were not paid accordingly.

||| (Tangga-an v. Philippine Transmarine Carriers, Inc., G.R. No. 180636, [March 13, 2013], 706 PHIL 339-354)


As a final word, it is necessary to state that no court can shirk from enforcing the contractual stipulations in the manner they have agreed upon and written. As a rule, the courts, whether trial or appellate, have no power to make or modify contracts between the parties. Nor can the courts save the parties from disadvantageous provisions. The same precepts hold sway when it comes to enforcing fee arrangements entered into in writing between clients and attorneys. In the exercise of their supervisory authority over attorneys as officers of the Court, the courts are bound to respect and protect the attorney's lien as a necessary means to preserve the decorum and respectability of the Law Profession. Hence, the Court must thwart any and every effort of clients already served by their attorneys' worthy services to deprive them of their hard-earned compensation. Truly, the duty of the courts is not only to see to it that attorneys act in a proper and lawful manner, but also to see to it that attorneys are paid their just and lawful fees. ||| (Malvar v. Kraft Food Phils., Inc., G.R. No. 183952, [September 9, 2013], 717 PHIL 427-460)


LIABILITY OF CORPORATE OFFICERS

To hold a director personally liable for debts of the corporation, and thus pierce the veil of corporate fiction, the bad faith or wrongdoing of the director must be established clearly and convincingly. Bad faith is never presumed. Bad faith does not connote bad judgment or negligence. Bad faith imports a dishonest purpose. Bad faith means breach of a known duty through some ill motive or interest. Bad faith partakes of the nature of fraud. (Emphasis and underscoring supplied)

Ineluctably, absent a clear and convincing showing of the bad faith in effecting the closure of HELIOS that can be individually attributed to petitioner as an officer thereof, and without the pronouncement in the Decision that she is being held solidarily liable, petitioner is only jointly liable.

||| (Dy-Dumalasa v. Fernandez, G.R. No. 178760, [July 23, 2009], 611 PHIL 280-291)


A corporation being a juridical entity, may act only through its directors, officers and employees. Obligations incurred by them, acting as such corporate agents, are not theirs but the direct accountabilities of the corporation they represent. True, solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as, generally, in the following cases:

1.  When directors and trustees or, in appropriate cases, the officers of a corporation:

(b)  act in bad faith or with gross negligence in directing the corporate affairs;

||| (Lynvil Fishing Enterprises, Inc. v. Ariola, G.R. No. 181974, [February 1, 2012], 680 PHIL 696-717)


although the corporate veil between Park Hotel and Burgos cannot be pierced, it does not necessarily mean that Percy and Harbutt are exempt from liability towards respondents. Verily, a corporation, being a juridical entity, may act only through its directors, officers and employees. Obligations incurred by them, while acting as corporate agents, are not their personal liability but the direct accountability of the corporation they represent.  However, corporate officers may be deemed solidarily liable with the corporation for the termination of employees if they acted with malice or bad faith. In the present case, the lower tribunals unanimously found that Percy and Harbutt, in their capacity as corporate officers of Burgos, acted maliciously in terminating the services of respondents without any valid ground and in order to suppress their right to self-organization.||| (Park Hotel v. Soriano, G.R. No. 171118, [September 10, 2012], 694 PHIL 471-488)


ILLEGALITY IN MANNER OF DISMISSAL – DISMISSAL WITHOUT DUE PROCESS

CIVIL CODE PRINCIPLES

MERE FAILURE TO COMPLY WITH NOTICE REQUIREMENT ON CLOSURE OR DISMISSAL DOES NOT AMOUNT TO A PATENTLY ILLEGAL ACT

Neither does bad faith arise automatically just because a corporation fails to comply with the notice requirement of labor laws on company closure or dismissal of employees. The failure to give notice is not an unlawful act because the law does not define such failure as unlawful. Such failure to give notice is a violation of procedural due process but does not amount to an unlawful or criminal act. Such procedural defect is called illegal dismissal because it fails to comply with mandatory procedural requirements, but it is not illegal in the sense that it constitutes an unlawful or criminal act.

For a wrongdoing to make a director personally liable for debts of the corporation, the wrongdoing approved or assented to by the director must be a patently unlawful act. Mere failure to comply with the notice requirement of labor laws on company closure or dismissal of employees does not amount to a patently unlawful act. Patently unlawful acts are those declared unlawful by law which imposes penalties for commission of such unlawful acts. There must be a law declaring the act unlawful and penalizing the act.

||| (Carag v. National Labor Relations Commission, G.R. No. 147590, [April 2, 2007], 548 PHIL 581-609)


IF DISMISSAL IS FOR AUTHORIZED CAUSE BUT WITHOUT DUE PROCESS, THEN P50K; IF DISMISSAL IS FOR AUTHORIZED CAUSE BUT WITH DUE PROCESS, P30K.

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.

On another breath, a dismissal for an authorized cause under Article 283 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, as in this case, he undertakes to implement a retrenchment program.

The clear-cut distinction between a dismissal for just cause under Article 282 and a dismissal for authorized cause under Article 283 is further reinforced by the fact that in the first, payment of separation pay, as a rule, is not required, while in the second, the law requires payment of separation pay. 9

For these reasons, there ought to be a difference in treatment when the ground for dismissal is one of the just causes under Article 282, and when based on one of the authorized causes under Article 283.

Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the employer failed 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.

||| (Jaka Food Processing Corp. v. Pacot, G.R. No. 151378, [March 28, 2005], 494 PHIL 114-125)


FACTORS IN CONSIDERING NOMINAL DAMAGES FOR FAILURE TO COMPLY WITH DUE PROCESS REQUIREMENTS

Although the closure was done in good faith and for valid reasons, we find that ITC did not comply with the notice requirement. While an employer is under no obligation to conduct hearings before effecting termination of employment due to authorized cause, however, the law requires that it must notify the DOLE and its employees at least one month before the intended date of closure. In the case at bar, ITC notified its employees and the DOLE of the 'no plant operation' on March 16, 1990 due to lack of raw materials. This was followed by a 'shut down' notice dated June 26, 1990 due to the expiration of the anti-pollution permit. However, this shutdown was only temporary as ITC assured its employees that they could return to work once the renewal is acted upon by the DENR. On August 17, 1990, the ITC sent its employees a final notice of closure or cessation of business operations to take effect on the same day it was released. We find that this falls short of the notice requirement for termination of employment due to authorized cause considering that the DOLE was not furnished and the notice should have been furnished both the employees and the DOLE at least one month before the intended date of closure. . . . Where the dismissal is based on an authorized cause under Article 283 of the Labor Code but the employer failed to comply with the notice requirement, the sanction should be stiff as the dismissal process was initiated by the employer's exercise of his management prerogative, as opposed to a dismissal based on a just cause under Article 282 with the same procedural infirmity where the sanction to be imposed upon the employer should be tempered as the dismissal process was, in effect, initiated by an act imputable to the employee. In light of the factual circumstances of the cases at bar, we deem it wise and reasonable to award P50,000.00 to each employee as nominal damages.||| (Industrial Timber Corp. v. Ababon, G.R. Nos. 164518 & 164965, [January 25, 2006], 515 PHIL 805-823)



RELIEFS UNDER THE LABOR CODE

Strained relations," as amplified in Employee's Association of the Philippine American Life Insurance Company v. NLRC, 199 SCRA 628 [1991], must be of such a nature or degree as to preclude reinstatement. But, where the differences between the parties are neither personal nor physical, nor serious, then there is no reason why the illegally dismissed employee should not be reinstated rather than simply given separation pay and backwages. More so if the cause of the perceived "strained relations" is the filing of a complaint for illegal dismissal. As the Court held in Globe-Mackay Cable and Radio Corporation v. NLRC, 206 SCRA 701 [1992], citing Anscor Transport and Terminals v. NLRC, 190 SCRA 147 [1990]; Sibal v. Notre Dame of Greater Manila, 182 SCRA 538 [1990]: prLL

"Obviously, the principle of 'strained relations' cannot be applied indiscriminately. Otherwise, reinstatement can never be possible simply because some hostility is invariably engendered between the parties as a result of litigation. That is human nature. Cdpr

"Besides, no strained relations should arise from a valid and legal act of asserting one's right; otherwise an employee who shall assert his right could be easily separated from the service, by merely paying his separation pay on the pretext that his relationship with his employer had already become strained."

||| (Kunting v. National Labor Relations Commission, G.R. No. 101427, [November 8, 1993], 298 PHIL 360-372)


A careful scrutiny of the records of the case at bench, readily discloses the existence of strained relationship between the petitioner and private respondents. Petitioner consistently refused to re-admit private respondents in his establishment. Petitioner even replaced private respondents with a new set of workers to perform the tasks of private respondents. Moreover, although petitioner ostensibly argued in his supplemental motion for reconsideration that reinstatement should have been the proper remedy in the case at bench on his premise that the existence of strained relationship was not adequately established, yet petitioner never sincerely intended to effect the actual reinstatement of private respondents. For if petitioner were to pursue further the entire logic of his argument, the prayer in his supplemental motion for reconsideration should have contained not just the mere deletion of the award of separation pay, but precisely, the reinstatement of private respondents. Quite obviously then, notwithstanding petitioner’s argument for reinstatement, he was only interested in the deletion of the award of separation pay to private respondents.||| (Congson v. National Labor Relations Commission, G.R. No. 114250, [April 5, 1995], 313 PHIL 69-83)


As regards the award of reinstatement, the Court finds that it would be best to award separation pay instead of reinstatement, in view of the strained relations between petitioner and respondents. In fact, while petitioner prayed for reinstatement, he also admitted that there is a "strained relationship now prevailing between [him and respondents.]"  Under the doctrine of strained relations, the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. 

In view of the illegal dismissal of petitioner, he is entitled to separation pay in lieu of reinstatement for the reason above stated, computed from the date of petitioner's employment until finality of our decision;  and backwages to be computed from the date he was constructively dismissed, i.e., July 17, 2002, up to the finality of this decision, less the amounts paid in accordance with his payroll reinstatement.

||| (Aguilar v. Burger Machine Holdings Corp. , G.R. No. 172062, [February 21, 2007], 545 PHIL 307-310)


ACTUAL REINSTATEMENT V. PAYROLL REINSTATEMENT; EFFECT WHERE THE ORIGINAL DECISION FINDING FOR ILLEGAL TERMINATION WAS REVERSED ON APPEAL


If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries s/he received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her employer under existing laws, collective bargaining agreement provisions, and company practices. However, if the employee was reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services rendered without need of refund.||| (Genuino v. National Labor Relations Commission, G.R. Nos. 142732-33 & 142753-54, [December 4, 2007], 564 PHIL 315-336)


PAYMENT OF SEPARATION PAY NOT INCONSISTENT WITH PAYMENT OF BACKWAGES

The Court held that the contention of Sweet Lines that separation pay and back wages are inconsistent with each other is not well-taken. Separation pay is granted where reinstatement is no longer advisable because of strained relations between the employee and the employer. Back wages represent compensation that should have been earned but were not collected because of the unjust dismissal. The bases for computing the two are different, the first being usually the length of the employee’s service and the second the actual period when he was unlawfully prevented from working. – Lim v. NLRC


BACKWAGES

CONTRACTS IN CASE AT BAR ENTERED INTO KNOWINGLY AND VOLUNTARILY; TERMINATION, LAWFUL AFTER EXPIRATION OF PERIOD. — Insofar as the private respondents who knowingly and voluntarily agreed upon fixed periods of employment are concerned, their services were lawfully terminated by reason of the expiration of the periods of their respective contracts. These are Dangwa Bentrez, Apollo Ribaya, Sr., Ruperta Ribaya, Virginia Boado, Cecilia Emocling, Jose Bentrez, Leila Dominguez and Rose Ann Bermudez. Thus, public respondent committed grave abuse of discretion in affirming the decision of the Labor Arbiter ordering their reinstatement and payment of full backwages and other benefits and privileges.

The order for their reinstatement and payment of full backwages and other benefits and privileges from the time they were dismissed up to their actual reinstatement is proper, conformably with Article 279 of the Labor Code, as amended by Section 34 of Republic Act No. 6715, which took effect on March 21, 1989. It should be noted that private respondents Roland Picart and Lucia Chan were dismissed illegally on March 31, 1989, or after the effectivity of said amendatory law.

BACKWAGES; AMOUNT DERIVED FROM EMPLOYMENT ELSEWHERE SHOULD BE DEDUCTED THEREFROM; REASON. — In ascertaining the total amount of backwages payable to them, 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 dismissal up to the date of reinstatement, if any, should be deducted therefrom. We restate the underlying reason that employees should not be permitted to enrich themselves at the expense of their employer. In addition, the law abhors double compensation. To this extent, our ruling in Alex Ferrer, et al. v. NLRC, et al., G.R. No. 100898, promulgated on July 5, 1993, is hereby modified.

||| (Pines City Educational Center v. National Labor Relations Commission, G.R. No. 96779, [November 10, 1993], 298 PHIL 450-464)


Even if a clear majority of the union members agreed to a settlement with the employer, the union has no authority to compromise the individual claims of members who did not consent to such settlement. Rule 138, Section 23 of the 1964 Revised Rules of Court requires a special authority before an attorney may compromise his client's litigation. "The authority to compromise cannot lightly be presumed and should be duly established by evidence." In the case at bar, minority union members did not authorize the union to compromise their individual claims. Absent a showing of the union's special authority to compromise the individual claims of private respondents for reinstatement and back wages, there is no valid waiver of the aforesaid rights. As private respondents did not authorize the union to represent them in the compromise settlement, they are not bound by the terms thereof.|||

Since the Labor Arbiter found no evidence showing that private respondents committed any illegal act during the strike, petitioners' failure to reinstate them after the settlement of the strike amounts to illegal dismissal, entitling them to the twin reliefs of reinstatement and back wages. "The burden is on the employer to prove that the termination was after due process, and for a valid or authorized cause. For the two requisites in our jurisdiction to constitute a valid dismissal are: (a) the existence of a cause expressly stated in Article 282 of the Labor Code; and (b) the observance of due process, including the opportunity given the employee to be heard and defend himself."

SEPARATION PAY — The separation pay must be deleted, as private respondents are entitled to reinstatement and back wages and there is no showing of strained relations as would prevent their reinstatement.

||| (Golden Donuts, Inc. v. National Labor Relations Commission, G.R. Nos. 113666-68, [January 19, 2000], 379 PHIL 303-316)


We agree that no full backwages from the time their pay was withheld up to the time of actual reinstatement can be ordered paid to petitioners. R.A. No. 6715, which amended Art. 279 of the Labor Code by requiring that an employee who is illegally dismissed shall be paid "his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement," has no retroactive effect and does not apply to cases of illegal dismissal taking place before its effectivity on March 21,1989. Since petitioners were dismissed in 1987, they cannot demand payment of full backwages until they were actually reinstated.

PAYMENT THEREOF WHERE CASE OF REINSTATEMENT IS NOT TERMINATED SOONER; RULE PRIOR TO THE EFFECTIVITY OF R.A. No. 6715. — The NLRC should have awarded additional backwages instead of merely affirming the Labor Arbiter's award of backwages for 15 months corresponding to the time petitioners were illegally dismissed in April 1987 up to the time the Labor Arbiter rendered his decision on August 5, 1988. Prior to the effectivity of R.A. No. 6715, the rule was that an employee, who was illegally dismissed, was entitled to an award of backwages equivalent to three years (where his case is not terminated sooner). This rule is understood to be written into the dispositive portion of every decision awarding backwages, in view of the obvious difficulty in some cases of determining when actual reinstatement would be made. In the case at bar it was not quite possible for the Labor Arbiter to determine when petitioners would actually be reinstated since it had only been 15 months since their illegal dismissal. But in 1992, when even after three years they had not been reinstated the NLRC should have modified the award of backwages and given them the equivalent of three years full backwages.

||| (Balladares, Jr. v. National Labor Relations Commission, G.R. No. 111342, [June 19, 1995], 315 PHIL 203-210)


Private respondents, as verily ruled by the NLRC, are entitled only to three (3) years backwages. The amendatory provision in R.A. No. 6715 (Art. 279 of the Labor Code) consequently allowing illegally dismissed employees to be awarded their full backwages took effect on March 21, 1989 or two (2) years after private respondents were terminated on February 6, 1987. This Court has consistently ruled that said amendment has no retroactive effect and therefore, does not apply. In the case at bench, the policy of awarding illegally dismissed employees' backwages limited to three (3) years, without qualification or deduction, otherwise known as the Mercury Drug Rule, (Mercury Drug Co., Inc. v. Court of Industrial Relations, 56 SCRA 694 [1974]) would thus prevail. This Court finds untenable private respondents' contention that since the decision of the Labor Arbiter has become final and executory and was in fact partially executed, it can no longer be disturbed or modified. We adhere to our ruling in Sealand Service, Inc. v. NLRC, (190 SCRA 347 [1990]) thus: We have constantly adopted the policy of awarding backwages to illegally dismissed employees to three years without qualification or deduction. This policy applies even to final decisions awarding backwages in excess of three years.||| (Bliss Development Corp. v. National Labor Relations Commission, G.R. No. 111017, [August 31, 1995], 317 PHIL 920-932)


GENERAL RULE – AN EMPLOYEE WHO IS LEGALLY DISMISSED IS NOT ENTITLED TO SEPARATION PAY. 

EXCEPTION – WHEN HE IS DISMISSED DUE TO A DISEASE, INSTALLATION OF LABOR-SAVING DEVICE, REDUNDANCY, RETRENCHMENT AND CESSATION OF BUSINESS


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