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Serious Misconduct MARIBAGO BLUEWATER BEACH RESORT, INC. v. NITO DUAL G.R. No. 180660 July 20, 2010 Perez, J.DOCTRINE: Respondent's acts constitute serious misconduct which is a just cause for termination under the law. Theft committed by an employee is a valid reason for his dismissal by the employer. FACTS: Petitioner Maribago is a corporation operating a resort hotel and restaurant in Barangay Maribago, Lapu-Lapu City(Cebu). On Oct. 18, 1995, it hired respondent Dual as waiter and promoted him later as outlet cashier of its Poolbar/Allegro Restaurant. Around 6:30 p.m. on January 9, 2005, a group of Japanese guests and their companions dined at Allegro. Captain waiter Hiyas took their dinner orders comprising of 6 sets of lamb and 6 sets of fish. Hiyas forwarded one copy of the order slip to the kitchen and another copy to respondent. Hiyas and waiter Genaro Mission, Jr. served 12 set dinners to the guests, and another 2 sets to their guides free of charge (total of 14 sets of dinner). After dinner, at around 9:00 p.m., the guests asked for their bill. Since Hiyas was attending to other guests, he gave a signal to Mission to give the bill. Mission asked respondent Dual for the sales transaction receipt and presented this to the guests. The guests paid the amount indicated on the receipt and thereafter left in a hurry. The receipt printed at 10:40 p.m. shows that only P3,036.00 was remitted by cashier Dual corresponding to only 6 sets of dinner. In view of the discrepancy between the order slip and the receipt issued, petitioner issued memoranda requiring Dual, Alvin Hiyas, Ernesto Avenido and Basilio Alcoseba to explain why they should not be penalized for violating House Rule 4.1 (dishonesty in any nature). After the investigation, respondent Dual was found guilty of dishonesty for his fabricated statements and for asking one of the waiters (Mission) to corroborate his allegations. He was terminated. Petitioner Maribago submits that the transaction receipt handed to Mission by respondent Dual amounted to P10,100.00 (more or less). The guests allegedly gave Mission P10,500.00 with the instruction to return only P200.00. The rest can be kept by the waiter as tip. Mission then handed Dual the P10,500.00 and relayed the guests' instruction. Dual handed Mission the P200.00 which the latter gave to the guests. It was discovered later that only P3,036.00 was entered by Dual in the cash register. The rest of the payment was missing. The original transaction receipt for P10,100.00 was likewise missing and in its place, only a transaction receipt for P3.036.00 was registered. Upon verification, it was also found out that the order slip was tampered by Alcoseba to make it appear that only 6 set dinners were ordered. Dual filed a complaint for illegal dismissal before the NLRC, Regional Arbitration Branch No. VII, Cebu City. The LA found that the termination was without valid cause. The NLRC set aside the LA’s decision and dismissed the complaint. The CA reversed the NLRC resolution. It found no sufficient valid cause to justify respondent’s dismissal. ISSUE: Whether or not respondent was illegally dismissed. HELD: NO.The law requires that an employer shall not terminate the services of an employee except for a just or authorized cause. Otherwise, an employee unjustly dismissed from work is entitled to reinstatement and full backwages. The law also requires the employer to observe due process in termination cases. In Agabon v. NLRC, we ruled that violation of the employee's statutory right to due process makes the employer liable to pay indemnity in the form of nominal damages. The law further requires that the burden of proving the cause for termination rests with the employer. In this case, respondent is guilty of dishonesty and of stealing money entrusted to him as cashier. Instead of reporting P10,100.00 as payment by the guests for their dinner, respondent cashier only reported P3,036.00 as shown by the receipt which he admitted to have issued. The receipt which bears his name "NITO" was printed at 10:40 p.m. or 1 hour and 40 minutes after the guests had left at 9:00 p.m. Moreover, respondent's claim that he received P3,100.00 only and gave Mission P64.00 as change is not shown by the receipt that he issued. In addition, the amount indicated in the receipt does not coincide with Dual's contention that only 4 dishes were cancelled and 2 dishes were given free of charge. If such were the case, then the amount charged to the guests should have been for 8 sets of dinner and not 6 sets (14-6=8). As established during the clarificatory hearing, 12 sets of dinner were served to guests and 2 dinner sets were given to the tour guides free of charge. It is clearly indicated in the altered order slip that 6 out of the 12 sets of dinner were cancelled. The alibi of cancellation has no leg to stand on. The standard operating procedure of Maribago dictates that in cases of cancellation, the order slip has to be countersigned by the attending waiter but such was not so in this case. Dual and Alcoseba tried twice to convince Mission to cover up their crime. They even asked Mission to take the fall by asking him to admit that he altered the order slip from twelve 12 sets of dinner to 6 sets. In fine, what is damning to the cause of Dual is the receipt which he admittedly issued. The receipt was issued long after the guests had left (9:00 p.m.) and after the alteration of the order slip (9:45 p.m.) was done. Such fact led us to the conclusion that he consented to and participated in the anomaly. Respondent's acts constitute serious misconduct which is a just cause for termination under the law. Theft committed by an employee is a valid reason for his dismissal by the employer. Although as a rule this Court leans over backwards to help workers and employees continue with their employment or to mitigate the penalties imposed on them, acts of dishonesty in the handling of company property, petitioner's income in this case, are a different matter. While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. The management also has its own rights, as such, are entitled to respect and enforcement in the interest of simple fair play. JOEB M. ALIVIADO, et al. v. PROCTER & GAMBLE PHILS, INC., and PROMM-GEM INC. G.R. No. 160506 March 9, 2010 Del Castillo, J. DOCTRINE: In order to constitute serious misconduct, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been performed with wrongful intent. FACTS: Petitioners worked as merchandisers of P&G from various dates. They all individually signed employment contracts with either Promm-Gem or SAPS for periods of more or less 5 months at a time. They were assigned at different outlets, supermarkets and stores where they handled all the products of P&G. They received their wages from Promm-Gem or SAPS. To enhance consumer awareness and acceptance of the products, P&G entered into contracts with Promm-Gem and SAPS for the promotion and merchandising of its products. In December 1991, petitioners filed a complaint against P&G for regularization, service incentive leave pay and other benefits with damages. The complaint was later amended to include the matter of their subsequent dismissal. The LA dismissed the complaint for lack of merit. The NLRC affirmed such decision. The CA denied petitioners’ petition for certiorari. Petitioners insist that they are employees of P&G. They claim that they were recruited by the salesmen of P&G and were engaged to undertake merchandising chores for P&G long before the existence of Promm-Gem and/or SAPS. They further claim that when the latter had its so-called re-alignment program, petitioners were instructed to fill up application forms and report to the agencies which P&G created. Petitioners further claim that P&G instigated their dismissal from work as can be gleaned from its letter to SAPS dated February 24, 1993, informing the latter that their Merchandising Services Contract will no longer be renewed. ISSUES: Whether or not petitioners were illegally dismissed. HELD: (Take note: the first issue was whether or not there was employer-employee relationship between petitioners and P&G; petitioners were actually asking for regularization and payment of benefits from P&G). NO. In case of regular employment, the employer shall not terminate the services of an employee except for a just or authorized cause. In the instant case, the termination letters by Promm-Gem to its employees uniformly specified the cause of dismissal as grave misconduct and breach of trust, as follows: “This informs you that effective May 5, 1992, your employment with our company, Promm-Gem, Inc. has been terminated. We find your expressed admission, that you considered yourself as an employee of Procter & Gamble Phils., Inc. and assail the integrity of the Company as legitimate and independent promotion firm, is deemed as an act of disloyalty prejudicial to the interests of our Company: serious misconduct and breach of trust reposed upon you as employee of our Company which constitute just cause for the termination of your employment.” Misconduct has been defined as improper or wrong conduct; the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, unlawful in character implying 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. To be a just cause for dismissal, such misconduct: a. b. c. Must be serious: Must relate to the performance of the employees duties; and Must show that the employee has become unfit to continue working or the employer. In order to constitute serious misconduct, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been performed with wrongful intent. In the instant case, petitioners-employees of Promm-Gem may have committed an error of judgment in claiming to be employees of P&G, but it cannot be said that they were motivated by any wrongful intent in doing so. As such, we find them guilty of only simple misconduct for assailing the integrity of Promm-Gem as a legitimate and independent promotion firm. A misconduct which is not serious or grave cannot be a valid basis for dismissing an employee. THE COCA-COLA EXPORT CORPORATION v. CLARITA P. GACAYAN G.R. No. 149433 December 15, 2010 LEONARDO-DE CASTRO, J.: FACTS Clarita P. Gacayan was a Senior Financial Accountant of Coca Cola Export Corporation. One of her benefits was the reimbursement of meal and transportation expenses incurred while rendering overtime work. This reimbursement was allowed only when the employee worked overtime. The maximum amount allowed to be reimbursed was P150.00 pesos. Because of the alleged alterations(date and food purchase) in three receipts (McDonald’s and Shakey’s) which Gacayan submitted to support her claim for reimbursement of meal expenses, Coca-cola called the attention of Gacayan and required her to explain. Gacayan denied any personal knowledge in the commission of the alterations in the subject receipts. She asserted that her sister’s driver/messenger may have caused the alteration, but she could not be certain about it. With regard to the Shakey’s receipt, respondent maintained that what she ordered was a buddy pack with extra mojos. Her explanation was referred to the Assistant Manager of the Shakey’s Pizza Parlor and upon verification, it was discovered that the receipt was actually for three orders of Bunch of Lunch, and not for Buddy Pack which has a different item code. A memorandum was sent to Gacayan inviting her to a hearing and formal investigation and to give her an opportunity to explain the issues against her. Gacayan appeared at the initial hearing but failed to appear on the second due to her doctor’s advice to rest since she was suffering from “severe mixed migraine and muscle contraction headache.” Gacayan also complained of the alleged partiality of the investigating committee against her. During that second hearing the personnel of Shakey’s denied the allegations of Gacayan. Coca Cola then sent another notice informing Gacayan of the re-setting of the continuation of the formal investigation but Gacayan failed to attend such hearing. Coca Cola then concluded the formal investigation. In a letter, Coca Cola dismissed Gacayan for fraudulently submitting tampered and/or altered receipts in support of her petty cash reimbursements in gross violation of the company’s rules and regulations. Gacayan then filed a complaint for illegal dismissal. Gacayan averred that, assuming that she altered the receipts in question, dismissal was too harsh a penalty for her considering that: “(a) it was her first offense in her 9 ½ years of service; (b) the offense imputed was minor, as only the dates and items, not the amounts, were altered or the amounts involved were very minimal; (c) the company did not suffer material damage, as she was really entitled to the P150.00 allowance even without accompanying receipt; and (d) respondent acted without malice, as she really rendered (unpaid) overtime work on those three dates.” Coca Cola maintained that Gacayan was dismissed for cause, that of “tampering official receipts to substantiate her claim for (meal) reimbursement which reflects her questionable integrity and honesty.” Petitioner added that in terminating the services of an employee for breach of trust, “it is enough that the misconduct of the employee tends to prejudice the employer’s interest since it would be unreasonable to require the employer to wait until he is materially injured before removing the cause of the impending evil.” The Labor Arbiter ruled in favor of Coca Cola and dismissed the complaint. It was held that Coca Cola complied with the notice requirement strictly and that Gacayan was terminated for repeatedly submitting fraudulent items of expense, clearly in violation of company rules and regulations which consequently resulted in loss of trust and confidence. NLRC affirmed. The Court of Appeals reversed and set aside the Resolutions ruling that the penalty of dismissal imposed was too harsh. Coca Cola appealed, contending that Gacayan’s repeated submission of altered or tampered receipts to support her claim for reimbursement constitutes a betrayal of the employer’s trust and confidence and a serious misconduct, thus, giving cause for the termination of her employment. ISSUE WON there is serious misconduct. HELD The Labor Code mandates that before an employer may validly dismiss an employee from the service, the requirement of substantial and procedural due process must be complied with. Under the requirement of substantial due process, the grounds for termination of employment must be based on just or authorized causes. Article 282 of the Labor Code enumerates the just causes for the termination of employment, thus: ART. 282. Termination by employer. - An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing. In the instant case, it was only in the Reply to Respondent’s Comment, that petitioner made mention of another ground for the dismissal of respondent, that of serious misconduct, when she submitted altered or tampered receipts to support her claim for reimbursement. Such allegation appears to be a mere afterthought, being tardily raised only in the Reply. In a case, it was held that: 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 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 business. In this light, the alleged infractions of respondent could hardly be considered serious misconduct. It is well to stress that in order to constitute serious misconduct which will warrant the dismissal of an employee, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been done with wrongful intent. Such is, however, lacking in the instant case. \SALVADOR O. ECHANO, JR. v. LIBERTY TOLEDO G.R. No. 173930 September 15, 2010 ABAD, J.: FACTS: Laurence V. Taguinod of the Medical Center Trading Corporation entrusted a January 18, 2000 manager’s check for P55,205.36 to Rogelio S. Reyes, an officer of the City Treasurer’s Business License Division in payment of his company’s business tax who issued a receipt. However, it was found by Liberty M. Toledo, City Treasurer of Manila, that the receipt issued was spurious since its validation imprint was copied from the Municipal License Receipt issued to Co Siu Kheng and that the city did not receive the manager’s check nor was it deposited to its account with the Land Bank of the Philippines-YMCA Branch. As it turned out, Liza E. Perez, a stenographer in the Office of the Clerk of Court, Manila RTC, deposited the check in her personal account with the Land Bank-Taft Avenue Branch. The deposit was approved by Salvador O. Echano, Jr., Acting Branch Cashier of the Land Bank-Taft Avenue Branch. Toledo then filed charges of grave misconduct and conduct prejudicial to the service against Reyes, Perez, and Echano with the Office of the Ombudsman. Echano claimed that Perez became his bank’s client in 1993 and had been depositing secondendorsed checks to her accounts with the bank since 1995. Edwin Quesada, the Assistant Department Manager, introduced her to him as a valued client with a longstanding business relationship with the bank. Quesada told him that Perez was in the business of rediscounting checks and it was not unusual for her to deposit numerous second-endorsed checks at any given time. Liwliwa Eli, Echano’s predecessor as Acting Branch Cashier, also called him to facilitate Perez’s transactions, she being a valued client of the bank. Echano added that he was unaware, prior to the filing of the complaint, that Perez had been able to deposit in her accounts second-endorsed checks that were payable to the City Treasurer of Manila. He claimed that he may have inadvertently missed out the payee’s name on the check when he examined it prior to signing the stamp of approval on the dorsal side. The Office of the Ombudsman found Reyes and Echano guilty of grave misconduct and dishonesty and meted out to them the penalty of dismissal from the service with forfeiture of leave credits and perpetual disqualification from employment in the government and in government-owned and controlled corporations. On appeal, CA affirmed the Ombudsman decision. ISSUE WON the Office of the Ombudsman erred in finding Echano guilty of grave misconduct and dishonesty HELD There is no doubt, based on the evidence that Echano was guilty of grave misconduct. Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful behavior or gross negligence by a public officer. As differentiated from simple misconduct, in grave misconduct the elements of corruption, clear intent to violate the law or flagrant disregard of established rule, must be manifest. As the CA pointed out, Echano, as Acting Branch Cashier, should have exercised a high degree of diligence and care in handling Perez’s second-endorsed checks since her rediscounting of checks was not a regular banking transaction. Moreover, the manager’s check in this case had been crossed and issued for the payee’s account only. This meant that Medical Center Trading Corporation intended it to be deposited to the account of the payee, namely, the City Treasurer of Manila. And Echano cannot plead simple oversight because he had approved for deposit to Perez’s accounts more or less 26 second-endorsed checks intended for the City Treasurer of Manila. What is more, Echano failed to prove that Perez had indeed been a valued client of his bank or that her questionable transactions carried the approval of higher bank officials. Echano claims that Judge Antonio J. de Castro, who presided over Branch 3 of the RTC of Manila, requested and guaranteed the deposit of Perez’s secondendorsed checks. But the evidence shows that those requests were made in 1995 and 1996 and under the premise that the checks were payable to the court. The transaction in this case occurred in 2000 and there is no showing that Judge De Castro guaranteed it. As Acting Branch Cashier, petitioner was charged with responsibility of handling the bank’s daily transactions which could run into large amounts. There is a tremendous difference between the degree of responsibility, care, and trustworthiness expected of a clerk or ordinary employee in the bureaucracy and that required of bank managers, cashiers, finance officers, and other officials directly handling large sums of money and properties.3 The evidence clearly shows that Echano took light of such responsibility and flagrantly disregarded established banking rules and practices. His misconduct and dishonesty paved the way for the commission of fraud against, and consequent damage to, the City Government of Manila. Nagkakaisang Lakas ng Manggagawa sa Keihin (NLMK-OLALIA-KMU) and Helen Valenzuela vs. Keihin Philippines Corporation G.R. No. 171115, August 9, 2010 Del Castillo, J. DOCTRINE: Misconduct is defined as “the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.” For serious misconduct to justify dismissal under the law, “(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.” The fact that the value of the thing is minimal is not an excuse so long as the requisites are complied with. FACTS: Petitioner Helen Valenzuela is a was a production associate in respondent Keihin Philippines Corporation, a company engaged in the production of intake manifold and throttle body used in motor vehicles manufactured by Honda. Due to several cases of theft and vandalism involving both respondent company’s property and personal belongings of other employees, respondent company issued two memoranda implementing an intensive inspection procedure of the employees before they leave the work premises. On September 5, 2003, while Helen was about to leave the company premises, she saw a packing tape near her work area and placed it inside her bag because it would be useful in her transfer of residence. When the lady guard on duty inspected Helen’s bag, she found the packing tape inside her bag. The guard confiscated it and submitted an incident report. The next day, , respondent company issued a show cause notice to Helen accusing her of violating F.2 of the company’s Code of Conduct, which says, “Any act constituting theft or robbery, or any attempt to commit theft or robbery, of any company property or other associate’s property. Penalty: Dismissal.”She was then directed to explain in writing why no disciplinary action should be taken against her. Helen, in her explanation, admitted the offense stating, “Kumuha po ako ng isang packing tape na gagamitin ko sa paglilipat ng gamit ko sa bago kong lilipatang bahay.” She even manifested that she would accept whatever penalty would be imposed upon her. On September 26, 2003, Helen received a notice of disciplinary action informing her that Keihin has decided to terminate her services. Aggrieved, petitioners filed a complaint against respondent for illegal dismisaal, non-payment of 13th month pay, with a prayer for reinstatement and payment of full backwages as well as moral and exemplary damages. They alleged that Helen’s act of taking the packing tape did not constitute serious misconduct, because the same was done with no malicious intent. According to petitioners, during the routine inspection and even before the guard opened Helen’s bag, she readily admitted that the bag contained a packing tape. Petitioners claim that the mental attitude of Helen negates depravity, willful or wrongful intent and, thus, she cannot be held guilty of serious misconduct. Rather, it was a mere error of judgment on the part of Helen. They believed that the tape was not of great value and of no further use to respondent company since it was already half used. Also, although Helen admitted that she took the packing tape, petitioners claimed that her punishment was disproportionate to her infraction. Keihin, on the other hand, maintained that Helen was guilty of serious misconduct because there was a deliberate act of stealing from the company. Respondent company also claimed that motive and value of the thing stolen are irrelevant in this case. Both the Labor Arbiter and NLRC dismissed the complaint of illegal dismissal. The sane was affirmed by the Court of Appeals. ISSUE: Whether, in taking the packing tape for her own personal use, Helen committed serious misconduct, which is a just cause for her dismissal from service HELD: YES. Misconduct is defined as “the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.” For serious misconduct to justify dismissal under the law, “(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.” In the case at bar, Helen took the packing tape with the thought that she could use it for her own personal purposes. By her own admission, there was intent on her part to benefit herself when she attempted to bring home the packing tape in question. It is noteworthy that prior to this incident, there had been several cases of theft and vandalism involving both respondent company’s property and personal belongings of other employees. In order to address this issue of losses, respondent company issued two memoranda implementing an intensive inspection procedure and reminding all employees that those who will be caught stealing and performing acts of vandalism will be dealt with in accordance with the company’s Code of Conduct. Despite these reminders, Helen took the packing tape and was caught during the routine inspection. All these circumstances point to the conclusion that it was not just an error of judgment on the part of Helen, but a deliberate act of theft of company property. Likewise, it is of no moment that the value of the thing taken is very minimal. JEFFREY NACAGUE v, SULPICIO LINES, NC. G.R. No. 172589, August 8, 2010 Carpio, J. DOCTRINE: When the alleged valid cause for the termination of employment is not clearly proven, as in this case, the law considers the matter a case of illegal dismissal. FACTS: Respondent hired Nacague as “hepe de viaje” or the representative of Sulpicio Lines on board its vessel M/V Princess of the World. On January 25, Hence. basing the same from the positive drug test result from S. Sulpicio Lines did not even deny Nacague’s allegation that S. on 7 March 2003. illegal dismissal and for reinstatement with backwages. However. were subjected to a random drug test. Hence.M. together with Nacague. a written notice stating the causes for termination and must give the employee the opportunity to be heard and to defend himself. No. argues that since Nacague knew that the residue of the drug would no longer be detectable in his body after five days. Respondent. However. the Supreme Court finds that Sulpicio Lines failed to clearly show that Nacague was guilty of using illegal drugs. and recommended the penalty of dismissal. Later on. 9165 provides that drug tests shall be performed only by authorized drug testing centers.R. deceive or betray.M. 2003. Upon appeal to the CA. National Power Corporation vs. two requisites must concur: (1) the dismissal must be for a just or authorized cause. Nacague maintains that. while this is a matter of illegal dismissal. 2010 Peralta. They were taken to S.M. FACTS: A complaint for acts inimical to government service and for violations of NPC Code of Conduct and Discipline was filed against respondent Olandesca. Lazo Clinic is an accredited drug testing center. Moreover. Lazo Clinic) and were required to submit urine samples.M. No. Lazo Clinic did not ask Nacague if he was taking any medication that might alter the results of the drug test. an employer may terminate the services of an employee for just causes or for authorized causes. and that he replaced all the materials taken three days after the last withdrawal even without any demand from any of petitioner’s officers or personnel. Acting on such report. However.A. Aggrieved. It was alleged that respondent withdrew several items from the warehouse/property office. 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. Nacague adds that Republic Act No.M. Nacague submitted this test result to Sulpicio Lines.M. The Court of Appeals affirmed the decision of the NLRC. Said recommendation was adopted by the petitioner. a housekeeper on the ship. When the ship docked in the port of Manila. lack of fairness and straightforwardness. : DOCTRINE: Dishonesty is defined as the disposition to lie. Lazo Clinic. Lazo Clinic is an authorized drug testing center. Nacague maintains that the S.M. probity or integrity in principle. on three occasions during nighttime. Ceasar T. No. . Thus. Under Article 279 of the Labor Code. Sulpicio Lines received an anonymous letter reporting the use of illegal drugs on board the ship. He was terminated on the ground of grave misconduct and loss of trust and confidence. Nacague went to Chong Hua Hospital in Cebu City to undergo a voluntary drug test. cheat. as in this case. some crew members of the ship. Nacague’s reinstatement is no longer feasible due to strained relations between Nacague and Sulpicio Lines. Respondent countered that he had no intent to defraud the government in taking the property from the warehouse. 9165) and the Department of Labor and Employment Order No.2003. Sulpicio Lines subjected Nacague to a formal investigation. the latter ruled in favor of respondent. Lazo Medical Clinic (S. Petitioner's Regional Board of Inquiry and Discipline (RBID) heard the case. On Februarry 23. 9165 (R. untrustworthiness. he was illegally dismissed based on an incomplete drug test. Sulpicio Lines failed to indubitably prove that Nacague was guilty of using illegal drugs amounting to serious misconduct and loss of trust and confidence. Lazo Clinic made its drug test results doubtful. Sulpicio Lines failed to prove that S. Lazo Clinic was not accredited. Lazo Clinic and that the test with Chong Hua Hospital was a “planned” test. deceive. the law considers the matter a case of illegal dismissal. The NLRC reversed the same. Alan Olandesca G. 171434. April 23. Sulpicio Lines failed to clearly show that it had a valid and legal cause for terminating Nacague’s employment. ISSUE: Whether the termination of Nacague is valid HELD: NO. this petition. lack of integrity. disposition to defraud. only a screening test was conducted to determine if Nacague was guilty of using illegal drugs. who was a Supervising Property Officer in petitioner National power Corporation. J.M. He asserted that the materials he took was used fence the mango seedlings which were planted on petitioner’s watershed areas. Furthermore. Nacague also alleges that the urine samples were gathered carelessly without proper labels to identify their owners and that S. As a result. Chico. on the other hand. Nacague underwent another drug test with the Chong Hua Hospital. In this case. Sulpicio Lines did not confirm the positive result of the screening test with a confirmatory test. under Article 277(b) of the Labor Code. Nacague denied using illegal drugs. or defraud. The result of the random drug test revealed that Nacague was positive for methamphetamine hydrochloride or shabu. Petitioner claimed that such acts clearly proved his intention to cheat his employer by deliberately and maliciously taking undue advantage of his position as Supervising Property Officer. since only a screening test was conducted. 53-03 (Department Order No.M. Lazo Clinic drug test was not credible because Sulpicio Lines failed to show that S. Sulpicio Lines sent a notice of investigation to Nacague informing him of the charges against him for use of illegal drugs and threatening a co-employee. without the required Warehouse Requisition Slip (WRS). The drug test with Chong Hua Hospital yielded a negative result. the employer must send the employee who is about to be terminated. Section 36 also prescribes that drug testing shall consist of both the screening test and the confirmatory test. ISSUE: Whether or not respondent Olandesca should be dismissed for his act of withdrawing items without the required WRS. Sulpicio Lines sent a memorandum to Nacague terminating him from the service. Sulpicio Lines insists that the most accurate drug test is the random drug test conducted by S. We agree with the Labor Arbiter that the lack of accreditation of S. The Labor Arbiter rendered a decision in favor of Nacague and declared that Sulpicio Lines illegally dismissed Nacague. Section 36 of R. Nacague filed a complaint for illegal suspension.A. and ordered his reinstatement. lack of honesty.M. Nacague should instead be granted separation pay. When the alleged valid cause for the termination of employment is not clearly proven. Also. submitted a report regarding the drug paraphernalia found inside the Mopalla Suite Room and the threat on his life made by Nacague and Chief Mate Reynaldo Doroon after he found the drug paraphernalia. and (2) the employee must be afforded an opportunity to be heard and to defend himself. The Civil Service Commission affirmed the dismissal. to constitute valid dismissal from employment. 5303) require two drug tests — a screening test and a confirmatory test. Agad’s dismissal from employment based on (1) acts tantamount to serious misconduct or willful violation of company rules and regulations. the issuance of a WRS is an indispensable requirement. Two audit reports were submitted by the company auditors whereby.000.. In the second report. 2010 Carpio. when as alleged by Delda. Jerry Uy is its owner and President.R. 500. only P400 was given to them by Agad. the amount indicated was P15. Further. a forbidden act. Agad’s conduct constitutes willful breach of the trust reposed in him. Aquino tried but failed to haggle for a lower price. HELD: With respect to the reimbursement of crafting expense. For having violated said rule. The purchase price indicated in the receipt issued to Aquino was P200. 2010 Doctrine: Where the employer failed to observe procedural due process in the employee’s dismissal. a serious infraction amounting to theft of company property. handling. Later. without any corroborating evidence to prove otherwise. It was an established company procedure that before the materials can be taken out from the warehouse. Misconduct has been defined as a transgression of some established and definite rule of action. 163554. Right after withdrawing the items. April 23. and implies wrongful intent and not mere error in judgment. deceive. Escoto consummated the sale of a car to Aquino for P200. Dishonesty is defined as the disposition to lie. the Court ruled that petitioners were not able to fully substantiate the alleged fictitious reimbursement of the crating expense. he was found to have acted without authority. However. Pastoril. the Court ruled that Agad committed a serious infraction amounting to theft of company property. Third. et. Records of Materials Received/Delivered (RMRD). is the secretary.e. a forbidden act. a dereliction of duty. Nonetheless. the misconduct must be of such grave and aggravated character. Hermie G. 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. Agad comes within the purview of the trust and confidence rule. There is no clear showing that respondent misappropriated or converted the items for his own personal use or benefit. is insufficient to overcome the presumption of regularity in the issuance of his own official receipt which he gave to Agad. the LPG cylinders still had monetary value which Agad cannot appropriate for himself without Caltex’s consent. J. WHITE DIAMOND TRADING CORPORATION VS. and was motivated only by a desire to serve the public beyond the call of duty. in the first report.000. Thus. Delda’s testimony alone. lack of integrity. FACTS: Petitioner is engaged in buying and selling second hand vehicles. disposition to defraud. No. trust and confidence. another just cause for termination of employment recognized under Article 282(c) of the Labor Code. DOCTRINE: Misconduct has been defined as a transgression of some established and definite rule of action.000. the withdrawal of the supplies were duly recorded in the security guard's logbook. Even if considered as scrap materials. The receipt was issued by Omela to Aquino after Aquino gave Omela P200. as the employer. after ordering the bidding and sale of LPG cylinders. and implies wrongful intent and not mere error in judgment. willful in character. al. In sum. The Court ruled that respondent acted in complete good faith. and Escoto is the salesman. 186019 / 617 scra 129 March 29. such as the custody. NO. he was informed of his dismissal on the grounds of serious misconduct and loss of trust and confidence. Omela is the assistant secretary. Caltex. did not remit the proceeds of the sale of the same. Agad was placed under preventive suspension. both just causes for termination of employment. As a superintendent. Morevoer. payment of indemnity in the form of nominal damages is warranted. prompting him to file a case for illegal dismissal before the Labor Arbiter. Agad. the recording to be done in the logbook indicates his lack of intent to deceive or defraud petitioner. During the investigation conducted by petitioner. has discharged the burden of proof necessary in terminating the services of Agad. It is not disputed that respondent took several materials and supplies from petitioner's warehouse without the approved WRS. the misconduct must be of such grave and aggravated character. Caltex (Philippines). liquefied petroleum gas (LPG) cylinders from the Depot were allegedly withdrawn for scrap and repair purposes without proper documentation. al. without anyone instructing him to do so. vs. care and protection of the employer’s property and funds. Inc. Agad. cheat. owner of the construction company which made the two crates. i. although. In this case. the company auditor declared that 190 pieces of 11 kg. respondent replaced them on his own initiative. who was ascertained to have blatantly abused his position and authority. even if Agad did not commit the alleged charge of fictitious reimbursement of crating expense. or defraud. Agad occupied a position tasked to perform key and sensitive functions which necessarily involved the custody and protection of Caltex’s properties.000 in cash. willful in character. he is not exonerated from liability. This act negates his intent to defraud petitioner. Second. G. the Graft Investigation Officer of the Office of the Ombudsman dismissed a complaint for qualified theft filed against respondent. To be serious. and Fourth. To be serious. Pastoril then took out a deed of sale (which . is premised on the fact that the employee concerned holds a position of responsibility. 500.R. et. With regard to withdrawal and sale of 190 pieces of LPG cylinders without proper documentation. Loss of trust and confidence. untrustworthiness. this should not be construed as dishonesty on the part of respondent that would warrant his dismissal from the service for the following reasons: First. The employee must be invested with confidence on delicate matters. and (2) willful breach of trust and confidence as Depot Superintendent. in the withdrawal and sale of the 190 pieces of LPG cylinders owned by the company. when Agad was still depot superintendent. FACTS: Respondent Hermie Agad was a Depot Superintendent in petitioner company. lack of fairness and straightforwardness. deceive or betray. as appearing from the official receipt issued by Delda.HELD: No. 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. probity or integrity in principle. although the respondent did not commit an overt act of dishonesty. as a just cause for termination of employment. NLRC G. Consequently. lack of honesty. but the price indicated in the duplicate copy of the receipt that remained in the company was P190. it was discovered that Agad ask for reimbursement for the expense incurred in the construction of two crates amounting to P15. a dereliction of duty. a just cause for termination of employment recognized under Article 282(a) of the Labor Code. ISSUE: Whether Caltex legally terminated Agad’s employment on just causes: (1) acts tantamount to serious misconduct and willful violation of company rules and regulations. the appropriate penalty to be imposed against him is reprimand. After two repeated directives. 1998. 0000737526 in the amount of P150. Sumulong again directed Pacia to prepare Check . 16477 worth P150. lawful. Julie Ontal. such as those provided in Articles 283 and 284 of the Labor Code. he tried to contact Aquino but to no avail. Facts: Respondent Virginia E.00 as partial payment for LREI’s outstanding obligation to the Bank of the Philippine Islands-Family Bank (BPI-FB). respondent union filed on behalf of Capor a complaint for illegal dismissal and money claims. Omela then reflected the correct amount of purchase price in the duplicate receipt. * Separation pay is only warranted when the cause for termination is not attributable to employee’s fault. NAGKAKAISANG LAKAS NG MANGGAGAWA (NLM)KATIPUNAN 615 SCRA 240 / G. At the time of her dismissal. the company terminated the employment of Omela. petitioner found no reason to change its decision. ISSUE: Whether Pastoril was illegally dismissed and should be awarded with backwages and separation pay. INC. HELD: NO. Later. It was also discovered that Aquino was not residing in the address stated in the records.shows that the consideration was P190. FACTS: The guard on duty found six Reno canned goods wrapped in nylon leggings inside employee Nenita Capor’s fabric clutch bag. 2010 DOCTRINES: * Criminal conviction is not necessary to find just cause for employment termination. Pacia eventually prepared Check No. No. LORENZO Y. the issuance of the receipt and the handing of the deed of sale were not separate isolated acts. It held that Pastoril had no participation in the commission because she merely handed the deed of sale to Aquino.VIRGINIA E. The company that the company manager became suspicious of the transaction and was prompted to look at the records of the sale. especially one grounded on the existence of reasonable doubt. Petitioner then filed a criminal case for qualified theft against Capor. Willful Disobedience LORES REALTY ENTERPRISES. through Ms. They occurred in one continuous logical sequence with the players in close proximity with one another. will not preclude a determination in a labor case the he is guilty of acts inimical to the employer’s interests. Criminal conviction is not necessary to find just cause for employment termination. The payment of the purchase price.. Capor was acquitted in the criminal case based on reasonable doubt. VS.R. Employee’s acquittal. 1. LREI’s acting general manager. Because of this transaction. HELD: No. such as those provided in Articles 283 and 284 of the Labor Code. When Escoto contacted Aquino. It is not allowed when an employee is dismissed for just cause. directed Pacia to prepare Check Voucher No. he told him that there is a refund of P10. Aquino collected the amount and issued a receipt for such. and Escoto. RENO FOODS.000.000. that is characterized by a wrongful and perverse attitude. Unfortunately. Pastoril should be awarded with backwages and separation pay. ISSUES: 1. Criminal cases require proof beyond reasonable doubt. Jessie Uy agreed to give the requested discount but Aquino had already left the premises. For this reason. PACIA. Whether conviction in a criminal case is necessary to find just cause for termination of employment 2. Petitioner accorded Capor several opportunities to explain her side. Separation pay is only warranted when the cause for termination is not attributable to employee’s fault. DOCTRINE: The offense of willful disobedience requires the concurrence of two (2) requisites: (1) the employee’s assailed conduct must have been willful. petitioner Sumulong. Pacia (Pacia) was hired by LREI.000. On October 28. Pastoril. Hence. while labor disputes require only substantial evidence (such relevant evidence as a reasonable mind might accept as adequate to justify a conclusion).000) and handed it to Aquino. After petitioner sent Capor a Notice of Termination. and (2) the order violated must have been reasonable. vs. 2. Pastoril’s involvement in the questionable transaction as much more than handing over to Aquino his copy of deed of sale. Pacia did not immediately comply with the instruction. Labor Arbiter: Capor is guilty of serious misconduct which is a just cause for termination NLRC and CA: affirmed LA’s factual findings and monetary awards but added an award of financial assistance in the form of separation pay. payment of indemnity in the form of nominal damages is warranted. Thereafter. as well in the cases of illegal dismissal in which reinstatement is no longer feasible. NLRC and CA: affirmed LA’s decision with modification. Labor Arbiter: there is substantial evidence showing the Escoto. The company failed to observe procedural due process in dismissing the employees. INC. she was the assistant manager and officer-in-charge of LREI’s Accounting Department under the Finance Administrative Division. The dismissed employees denied the allegation and averred that Aquino was asking for an additional discount. made known to the employee and must pertain to the duties which he had been engaged to discharge. SUMULONG III. The dismissed employees likewise changed Aquino’s phone number. Omela and Pastoril were legally dismissed due to fraud committed in connection with the sale. Whether the award of separation pay to Capor is warranted.00. such as serious misconduct. 164016 March 15. the latter was given another opportunity for reconsideration. often with the assistance of respondent union. as well in the cases of illegal dismissal in which reinstatement is no longer feasible. Article 282 of the Labor Code enumerates the just causes for which an employer may terminate the services of an employee. as employer. the Court is guided by the time-honored principle that if doubt exists between the evidence presented by the employer and the employee. Neither can it be considered an obstinate defiance of company authority. According to the NLRC. Pacia eventually prepared Check No. Termination by employer. On appeal. which came to be Equitable PCI Bank and now herein petitioner Banco De Oro Unibank. the NLRC in its March 31. 2010. the audit committee recommended respondent’s dismissal from employment and setting up of a contingent liability for the potential loss for violation of bank’s policies and failure to exercise prudence expected of a branch head. 0672-04408-0 on July 14. The Court takes into consideration that Pacia. Pacia reasoned out that the funds in LREI’s account were not sufficient to cover the amounts to be indicated in the checks. Pacia then filed a Complaint for Unfair Labor Practice due to Harassment. In 1995. In finding for Pacia. willful breach of trust.). and loss of confidence. Facts: Respondent was employed by then Philippine Commercial and Industrial Bank (PCIB). eventually did prepare the checks on the same day she was tasked to do it. Inc. Moral and Exemplary Damages6 against LREI and Sumulong. On July 24. made known to the employee and must pertain to the duties which he had been engaged to discharge. 2000 Decision9 reversed the LA’s Decision and found LREI and Sumulong guilty of illegal dismissal. affirmed the Labor Arbiter’s Decision. with further sanction of forfeiture of benefits and contingent restitution. 1998. The rule in controversies between a laborer and his master distinctly states that doubts reasonably arising from the evidence. the Labor Arbiter (LA) rendered a decision8 finding that the dismissal of Pacia was for a just and valid cause. should be resolved in the former's favor. 1996. The CA held that LREI and Sumulong failed to establish with substantial evidence that the dismissal of Pacia was for a just cause. respondent filed a complaint for illegal dismissal before the Regional Arbitration Branch of the NLRC. despite her initial reluctance. A special audit was then conducted. or in the interpretation of agreements and writing. The offense of willful disobedience requires the concurrence of two (2) requisites: (1) the employee’s assailed conduct must have been willful. has the discretion of terminating an employee who holds a position of trust and confidence on the ground of lack or absence thereof. however. Nos. Issue: Whether or not Pacia’s dismissal was justified under the circumstances? Ruling: NO. regarding a number of Philippine Long Distance Telephone Company (PLDT) dividend checks being sent for clearing by PCIB Makati Cinema Branch. 1997 dismissing him from employment on the grounds of serious policy violations. It appears that respondent allowed Luz Fuentes (Fuentes). The Labor Arbiter concluded that there were enough infractions committed by respondent which constitute serious misconduct or willful disobedience and willful breach of trust and that petitioner need not incur damages to sustain the validity of dismissal. Both parties appealed to the NLRC. Upon appeal to the court of appeals it rendered its Decision reversing the ruling of the NLRC and holding that respondent’s dismissal was effected without due process of law and without just cause. lawful. Pacia’s initial reluctance to prepare the checks. Castor A. G. PCIB’s Operations Subcenter Head. – An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. Gerardo C.00 to settle the balance of LREI’s outstanding indebtedness with BPI-FB.000. Subsequently. called the attention of PCIB’s Ayala-Makati Area Head. respondent received a Memo dated January 7. 1997. the NLRC dismissed both appeals for lack of merit and. 1995. was for honest and well intentioned reasons. Equitable PCI Bank (Now Banco De Oro Unibank. Dompor. Cora Mallillin (Mallillin).R. Pacia once again was slow in obeying the order. a client-depositor of PCIB Makati Cinema Branch who opened checking account no. “the employee’s assailed conduct must have been willful [or] characterized by a . consequently. there was enough basis for the loss of trust and confidence on respondent by petitioner on account of the former’s evident disobedience. December 8.Voucher No. Gabriel (Gabriel). among others. Pacia received a notice of termination5 stating. he was assigned as branch manager of PCIB’s Makati Cinema Branch. Constructive Dismissal. vs. To explain her refusal to immediately follow the directive. however. that she was being dismissed because of her willful disobedience and their loss of trust and confidence in her. Due to the insistence of Sumulong. Pacia filed an Amended Complaint7 to include the charges of illegal dismissal and non-payment of salaries. Dissatisfied. 0000737527 in the amount of P175. 16478 in the amount of P175. Inc.00. It found that Pacia’s initial reluctance to obey the orders of her superiors was for a good reason . Issue: Whether or not Respondent committed willful disobedience and willful breach of trust sufficient as just causes for his dismissal? Ruling: YES! To justify willful disobedience or insubordination as a valid ground for termination. DOCTRINE: A bank manager’s abuse of authority in implementing bank policies is an abuse of the trust reposed in him by his employer which constitutes as a just cause for his termination. On November 6. Protecting LREI and Sumulong from liability under the Bouncing Checks Law18 was foremost in her mind. 163293 & 163297. which was seemingly an act of disrespect and defiance.000. The Labor Arbiter rendered a Decision finding respondent’s dismissal valid. that is characterized by a wrongful and perverse attitude. and (2) the order violated must have been reasonable.to shield the company from liability in the event that the checks would be dishonored for insufficiency of funds. to deposit several second-endorsed PLDT dividend checks beginning the last quarter of 1995. It held that petitioner. LREI and Sumulong elevated the case to the CA. the scales of justice must be tilted in favor of the latter. to wit: ARTICLE 282. It was not wrongful or willful. On February 7. m. Janette A. 2006. willful breach of trust requires that “the loss of confidence must not be simulated. respondent De Castro’s infraction is classified as a less serious offense for “commission of negligent acts during working time” as set forth in subparagraph 11. to 3:00 a. has the duty to ensure that bank rules are strictly complied with not only to ensure efficient bank operation which is imbued with public interest but also to serve the best interest of the bank as he holds a position of trust and confidence. The vital signs of the patient were normal. The CA ruled that per the Employee’s Handbook of petitioner hospital. 1999. and must pertain to the duties which he had been engaged to discharge. 1999. 1996. 1999 to 6:00 a. one Rufina Causaren. Respondent’s wanton violation of bank policies equates to abuse of authority and. etc. effective at the close of office hours of July 20. and. Such intention to violate the trust of petitioner is enough for his dismissal from service. The committee recommended that despite her more than seven years of service. It was not denied that on June 27. Instead of personally seeing the patient. 1999.m. such misconduct could not be categorized as serious or grave that would warrant the extreme penalty of termination from the service after having been employed for almost 9 years. Later. it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. with modification that respondent De Castro should be entitled to payment of full backwages and other benefits. the Investigation Committee found that the subject incident happened between 11:00 a. made known to the employee. (2) failure to record and refer the incident to the physician[on. it should not be used as a subterfuge for causes which are illegal. the physician on duty and the nursing staff on duty for the next shift again attended to patient Causaren. for alleged violation of company rules and regulations.” On the other hand. firms. respondent was in charge of the overall administration of the branch and is tasked to ensure that all policies and procedures are strictly followed. 1999). issued a notice of termination. being her first offense. abuse of the trust reposed in him. On May 24.m. therefore. Abaya-Morido. at the option of the former. As emphasized by petitioner. Respondent. until she was dismissed on July 20. Despite such reasonable order. HRD Officer of petitioner hospital. Based on her evaluation of the situation. the CA reversed and set aside the Decision of the NLRC and reinstated the Decision of the Labor Arbiter. 1999.-Medical Center Manila Employees Association-AFW. on two occasions. . respondent justifies his acceptance of the checks as the same were nevertheless returned and cancelled on the ground that the checks include those payable to corporations. filed a Complaint[7] for illegal dismissal against petitioners. Asuncion Abaya-Morido. we hold that respondent was validly dismissed on the grounds of willful disobedience and willful breach of trust under Article 282 of the Labor Code. While petitioner’s manual of procedures does not absolutely prohibit the negotiation or acceptance of second-endorsed checks for deposits.m.wrongful or perverse attitude and the order violated must have been reasonable. On January 18. As shown by the records. On July 5. (3) deliberately instructing the staff to follow her version of the incident in order to cover up the lapse. societies. the Labor Arbiter rendered a Decision. lawful. reversing the findings of the Labor Arbiter and dismissing the complaint against the petitioners. it does expressly disallow the acceptance of checks endorsed by corporations. 1999. Indubitably.[8] ordering petitioner hospital to reinstate respondent De Castro to her former position or by payroll reinstatement. The three other nurses for the shift were not at the nurse station. . the niece of patient Causaren staying in the room was awakened and she sought assistance from the nurse station. respondent De Castro should be terminated from employment for her lapse in responding to the incident and for trying to manipulate and influence her staff to cover-up the incident. 1999. Chapter XI of the Employee's Handbook and Policy Manual of 1996 (Employee's Handbook):[6] (1) negligence to follow company policy on what to do with patient Rufina Causaren who fell from a hospital bed. the employee involved holds a position of trust and confidence. with the assistance of respondent Hospital Management Services Inc. computed from the expiration of the 14-daysuspension period up to actual reinstatement. Because of what happened. Staff Nurse Paderes was then in another nurse station encoding the medicines for the current admissions of patients. Petitioners anchor respondent De Castro’s termination of employment on the ground of serious misconduct for failure to personally attend to patient Causaren who fell from the bed as she was trying to reach for the bedpan. respondent unhesitatingly accommodated the request of Fuentes to accept her checks allegedly on the strength of the Area Head’s approval on the first instance and on the second instance. paragraph 3 (B) of Chapter XI[10] thereof. On July 21.m. the NLRC rendered a Decision dated February 28.Medical Center Manila vs Hospital Management Service Inc. or their monetary equivalent. while respondent De Castro and ward-clerk orientee Gina Guillergan were at the nurse station on night duty (from 10:00 p. an 81-year-old patient confined at Room 724-1 of petitioner hospital for “gangrenous wound on her right anterior leg and right forefoot” and scheduled for operation on March 26. any negligence in the exercise of his responsibilities can be sufficient ground for loss of trust and confidence demanded by his position. De Castro FACTS: Respondent De Castro started working as a staff nurse at petitioner hospital since September 28. Item 3. Respondent admittedly disobeyed not only his superiors’ directives but also simple bank rules. 1990. 1999. HELD: YES. about the incident and requested for a formal investigation. without loss of seniority rights. 2002. respondent De Castro. of March 24. Between 2:00 a. duly noted by Dr. Villanueva informed Dr. respondent was instructed by management to stop accepting second-endorsed checks due to the irregularities attendant to the transactions with Fuentes.” In the case at bench.Medical Center Manila Employees Association-AFW and Edna R.duty and] allow[ing] a significant lapse of time before reporting the incident. it must be genuine. Article 282 (b) of the Labor Code provides that an employer may terminate an employment for gross and habitual neglect by the employee of his duties. however. The CA ruled that while respondent De Castro's failure to personally attend to patient Causeran amounted to misconduct. and checks with unusual endorsements. not a mere afterthought to justify earlier action taken in bad faith. Calixijan. ISSUE: WHETHER OR NOT DE CASTRO WAS ILLEGALLY TERMINATED. Chief Nurse Josefina M. improper or unjustified. Gross Negligence Hospital Management Services Inc. particularly paragraph 16 (a). of March 23. this explicit policy was transgressed by respondent intentionally and willfully. respondent De Castro saw . fell from the right side of the bed as she was trying to reach for the bedpan. of March 24.m. respondent De Castro directed ward-clerk orientee Guillergan to check the patient. and (4) negligence and carelessness in carrying out her duty as staff nurse-on-duty when the incident happened. 2001. In the Investigation Report[5] dated May 20. upon respondent De Castro. while Nursing Assistant Respicio was making the door name tags of admitted patients and Nursing Assistant Tatad delivered some specimens to the laboratory. of March 23. 1999. On appeal by respondent De Castro. as bank manager. to 11:30 a. president and hospital director. the same would not constitute sufficient ground to terminate his employment. we do not see any wrongful intent. Maganis. to be a ground for dismissal. instead of the harsh penalty of dismissal. albeit an error of judgment.[15] disseminated to all in-house security personnel. On November 11.] of December 30. respondent filed a Complaint for illegal dismissal against petitioner hospital and its Chairman. 2001. 1996. On appeal by the respondent. The cameras failed to record any incident of theft at room 257. In his letter dated January 6. and (2) the employee must be given an opportunity to be heard and defend himself. Considering that this was the first offense of respondent De Castro in her nine (9) years of employment with petitioner hospital as a staff nurse without any previous derogatory record and. Rule VII of its Code of Discipline. further.: Second Division reported the lost of his bag containig tickets and passports. employed respondent as In-House Security Guard. 1995. Inc. as these two units have high incidence of crime.m. and camera no. St.m. 2 (Old Maternity Unit). Habitual neglect implies repeated failure to perform one's duties for a period of time. he was the only personnel on duty as nobody wanted to assist him. a foreigner from Majuro. the Court deems it appropriate that. the Security Department of petitioner hospital conducted an investigation. reversing the Decision of the Labor Arbiter. then attending to his 3-year-old daughter. St. Despite our finding of culpability against respondent De Castro.m. she requested Nursing Assistant Tatad and ward-clerk orientee Guillergan to see the patient. to send Nursing Assistant Tatad and ward-clerk orientee Guillergan to check on the health condition of the patient. to 6:00 a. from 0025H to 0600H [or 12:25 a. 2010. Thus. In the evening of December 30. He stated that a CCTV monitoring system is designed to focus on many areas in a programmed and sequential manner and should not to be focused only on a specific area. located at Quezon City. as she deemed it best. In August 1996.m. Nimaya Electro Corporation installed a closed-circuit television (CCTV) system in the premises of petitioner hospital to enhance its security measures[6] and conducted an orientation seminar for the in-house security personnel on the proper way of monitoring video cameras. issued a Memorandum[8] to respondent. 2000. failed to capture the theft of Tibon's traveling bag at room 257. petitioner hospital. 1997. This fact is corroborated by Tito M. affirming the NLRC’s finding that while respondent may appear to be negligent in monitoring the cameras on the subject dates. 1996 at room 257. Acting on the complaint of Tibon. J. consequently. respondent De Castro cannot be said to be grossly negligent so as to justify her termination of employment. petitioners' former In-House Security Department Head. Luke’s Medical Center. 3 covering the subject period were reviewed. directing him to explain in writing. His work consisted mainly of monitoring the video cameras. No. without of loss of seniority rights and other benefits. To effectuate a valid dismissal from employment by the employer. to 6:00 a. Gross negligence connotes want of care in the performance of one's duties. The Court emphasizes that the nature of the business of a hospital requires a higher degree of caution and exacting standard of diligence in patient management and health care as what is involved are lives of patients who seek urgent medical assistance. namely: (1) the dismissal must be for any of the causes provided in Article 282 of the Labor Code. October 20. Negligence is defined as the failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation. On September 21. and Robert Kuan vs Estrelito Notario G. An act or omission that falls short of the required degree of care and diligence amounts to serious misconduct which constitutes a sufficient ground for dismissal.R. why no disciplinary action should be taken against him for violating the normal rotation/sequencing process of the VCR and. Finding the written explanation of respondent to be unsatisfactory. through Abdul A. it was shown that the VCR was focused on camera no. Neglect of duty. respondent was on duty from 6:00 p. he decided to focus the cameras on the Old and New Maternity Units. reveals that that there is no categorical provision requiring an in-house security personnel to observe a rotation sequence procedure in focusing the cameras so that the security monitoring would cover as many areas as possible. 1996. the NLRC issued a Resolution dated January 19. depending upon the circumstances. Marshall Island. the Labor Code has set twin requirements. 1996. 1998. Karim. as she was then attending to a newly-admitted patient at Room 710. Luke's Medical Center. the Labor Arbiter dismissed respondent’s complaint for illegal dismissal against petitioners. December 31. under the given situation.m. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee.no necessity to record in the chart of patient Causaren the fact that she fell from the bed as the patient did not suffer any injury and her vital signs were normal. to 10:15 p. from 2103H to 2215H [or 9:03 p. 1997. Peralta. dated January 24. on March 19. 1996. Being her first offense. being the staff nurse with presumably more work experience and better learning curve. the CA dismissed petitioners' petition for certiorari. as her lapse was not characterized by any wrongful motive or deceitful conduct. unless the situation requires it. 1997. inclusive of the suspension for a period of 14 days which she had earlier served. When the tapes of video camera recorder (VCR) no. Inc. 1997.] of December 31. must be both gross and habitual. subject to certain guidelines. Robert Kuan. On January 6. served on respondent a copy of the Notice of Termination. to attend to a newly-admitted patient who had more concerns that needed to be addressed accordingly. while the second is deemed as the procedural aspect.m. seeking reinstatement with payment of full backwages from the time of his dismissal up to actual reinstatement. A perusal of petitioner hospital’s CCTV Monitoring Guidelines. . FACTS: On June 23. of the following day. It was her judgment call. the CCTV monitoring staff on duty. HELD: YES. in his Affidavit. 1996. Because of this. This first requisite is referred to as the substantive aspect. Andanie De Brum. she would be suspended for a period of six (6) months without pay. petitioner hospital. respondent explained that on the subject dates. instead of personally attending to patient Causaren. 1 (New Maternity Unit). however. On December 30. or bad faith on her part when. Justin Tibon. 152166. (petitioner hospital). through Calixton. within 24 hours upon receipt thereof. dismissing him on the ground of gross negligence/inefficiency under Section 1. who was admitted since December 20. ISSUE: WHETHER OR NOT RESPONDENT WAS VALIDLY TERMINATED. deliberate refusal. 2010. the employer’s loss of trust and confidence in said employees may justify termination of their employment. His wife arrived at 9 p. he filed a complaint in the NLRC Regional Arbitration Branch No.Under Article 282 (b) of the Labor Code. Neglect of duty.Loss of confidence applies to situations where the employee is routinely charged with the care and custody of employer’s money or property. Petitioner violated his duties and responsibilities as PBM when he signed and approved the subject transactions without the necessary signatures of the concerned clients. In 2000. within 24 hours upon receipt thereof. killing 22 persons and injuring 113 others. The penalty of dismissal was imposed on him. supervisors. 1997. Petitioners’ lack of just cause and non-compliance with the procedural requisites in terminating respondent’s employment renders them guilty of illegal dismissal. Petitioner’s breach of respondent bank’s policies intended to safeguard the bank and its clients’ funds was clearly inimical to the interests of his employer. Abad. As the banking industry is impressed with public interest. Rene Bunaventura and SilesSamalea. respondent should be awarded separation pay in lieu of reinstatement.. this being so. 13th month pay. Estampa's motion for reconsideration for lack of merit. several clients of the Legazpi branch filed complaints for alleged unauthorized abstraction of various trust funds. moral and exemplary damages and attorney’s fees. For this Dr. Petitioners failed to observe this requirement. through Abdul A. although this Court finds otherwise. on January 24. Jesus E. The doctor was later found guilty by said officer and was recommended for dismissal. respondent bank underwent an internal reorganization. C. Pursuant thereto. 2006 the CSC denied Dr. Government of Davao.: Facts: Petitioner was hired by respondent bank as Assistant Manager and/or OIC Branch Head of its Legazpi City Branch. Edilberto Estampa. On the same day. Edilberto Estampa. 188271.R. J. petitioner became the Personal Banking Manager (PBM) of the Legazpi branch.R. The latter moved for reconsideration but this was denied. August 16. Respondent bank promptly commenced an investigation. 190681. the mayor approved the recommendation and dismissed Dr. She prevail on Dr. from her work at the Davao Medical Center where most of the bombing victims were brought for treatment. Estampa. at room 257. After committing gross negligence. June 21. perhaps due to the lapse of time since his dismissal. Issue: Whether the petitioner was illegally dismissed. a powerful bomb exploded at the passengers' terminal of the Davao International Airport. why no disciplinary action should be taken against him for violating the normal rotation or sequencing process of the VCR which led to the loss of the traveling bag of Tibon. with the directive to require him to explain in writing. 2003. bonuses. 2006. petitioner surprisingly still expects respondent bank to retain him. "If the employees are cashiers. "show cause" letters were issued to the officers of the Legazpi branch. prompting him to appeal to the Civil Service Commission (CSC). salesmen or other personnel occupying positions of responsibility. and hardly in the best interest of the parties. respondent bank rendered a decision with respect to the "show cause" letter finding petitioner guilty of violating Articles IV (F) (Class C) (1). 2010 CORONA. corrected the denomination of his offense to “gross neglect of duty”. treasury placements and deposits.J. Facts: Dr.m. Karim. and demanding reinstatement or separation pay and payment of incentives. Estampa had just arrived home at that time and was taking care of his one-year-old daughter. or if he decides not to be reinstated. must be both gross and habitual. Estampa's appeal. Dycoco. G. The employee must be furnished two written notices: the first notice apprises the employee of the particular acts or omissions for which his dismissal is sought. stating that during the subject hours on December 30 to 31. G. while petitioner was under preventive suspension. IV (D) (Class D) (1) and IV (E) (Class C) (13) of the bank’s Code of Conduct. Gross negligence connotes "want of care in the performance of one’s duties. which informs the employee of the employer's decision to dismiss him." Petitioner’s failure to observe basic procedure constituted gross negligence. The facts showed that on January 6. However. On March 4. On June 2. on October 10. and affirmed his dismissal. respondent exercised his best judgment in monitoring the CCTV cameras so as to ensure the security within the hospital premises. all bank personnel are burdened with a high level of responsibility insofar as care and diligence in the custody and management of funds are concerned. vs. His repeated failure to carefully observe his duties as PBM clearly showed utter want of care. issued a Memorandum to respondent. 2006. not a just cause for his dismissal. 1997. the lapse or inaction could only be regarded as a single or isolated act of negligence that cannot be categorized as habitual and. Estampa to stay home and he did. Petitioner miserably failed to discharge this burden. vs. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. Under the prevailing circumstances. Habitual neglect implies repeated failure to perform one’s duties for a period of time. Verily. he was the only personnel on duty as nobody wanted to assist him and. managers. if such reinstatement proves impracticable. and the second is a subsequent notice. In June 2005. petitioner hospital. Later. at around 6 p. Is a Medical Officer VI at Davao’s City Health Office. . Consequently. respondent is entitled to reinstatement to his former position without loss of seniority rights and payment of backwages. Equitable PCI Bank (now Banco de Oro). assuming arguendo that respondent was negligent. Loss of confidence and dismissal from employment were therefore justified. Gross negligence connotes want of care in the performance of one’s duties. respondent submitted a written explanation. depending upon the circumstances. Consequently. Nothing can compel an employer to continue availing of the services of an employee guilty of acts inimical to its interests as this is a ground for loss of confidence. petitioner hospital served a copy of the Notice of Termination upon the respondent for gross negligence/inefficiency. Jr. No. The CSC also denied Dr.m." Dr. he decided to focus the cameras on the Old and New Maternity Units as these two units usually have high incidence of theft and other untoward incidents. Dr. Held: NO. Jr. January 6. On September 22. the patient’s father. to be a ground for dismissal. V alleging constructive dismissal and illegal suspension. an employer may terminate an employee for gross and habitual neglect of duties. Jr. and Article 282 (b) of the Labor Code. He learned of the bombing incident between 7 to 8 p. The position made him head of a Task Force Unit assigned to deal with any untoward event taking place in the city and Disaster Coordinator for the Davao City Health Office under the Davao City Disaster Coordinating Council. hence. 1996. Thereafter. No. petitioner became Branch Head and in September 2003. However. 1997. Estampa was charged with “grave neglect of duty” before the City Legal Officer.m. Respondent. He simply was not the right person for the job of disaster coordinator. meaning it must be done intentionally. Estampa is guilty of gross neglect of duty for failing to respond to the March 4. wilful disobedience. he had the choice to resign from it when he realized that he did not have the will and the heart to respond. would make temporary cash borrowings and would return the money at the end of the day through withdrawals from her own or other clients’ accounts.: DOCTRINE: For there to be valid dismissal based on loss of trust and confidence. Besides. Petitioner directed respondents to explain and/or investigate an alleged inventory discrepancy. A person's duty to his family is not incompatible with his job-related commitment to come to the rescue of victims of disasters. if there were any. Uncorroborated assertions and accusations by the employer Bank of the Philippine Islands vs. Respondent was served with notice of termination on the ground of loss and trust and confidence. Assuming that he had a one-year-old daughter in the house. February 18. For there to be a valid dismissal based on loss of trust and confidence. the breach of trust must be willful. Kulas then charge the respondents for estafa but the complaint was later dismissed. Held: YES. fraud or willful breach of trust. In fact. June 18. on many occasions. he could have taken her to relatives temporarily while his wife was still on her way from work. What marked his gross irresponsibility was that he did not even care to call up his superior or associates to inform them of his inability to respond to the emergency. Estampa justified his absence from the emergency rooms of the hospitals to attend to the bombing victims with the claim that he needed to attend to his family first. substantial evidence is necessary for an employer to effectuate any dismissal. Alcoseba GR no 180123.. gross and habitual neglect of duty. Hence BPI conducted an investigation and discovered that its bank teller. ISSUE: Whether or not there was a valid ground based on gross and habitual neglect of duty to terminate the employment of respondents. HELD: No. Article 282 (b) and (c) of the Labor Code provide that an employer may terminate an employee for "gross and habitual neglect by the employee of his duties" and for "fraud. Who knows? Better coordination and dispatch of victims to the right emergency rooms could have saved more lives. without justifiable excuse. Azucena implicated respondent. clearly failed to monitor instances of unauthorized withdrawals.: DOCTRINE: Uncorroborated assertions and accusations of employer on the gross and habitual neglect of duty do not suffice to effect a dismissal of an employee. . ISSUE(2): Whether or not respondent was entitled to separation pay. her omission. NLRC GR no 179801. Her balance reflected an amount less than the actual amount deposited. J. Estampa said in his letter that he was unable from the beginning to give full commitment to his job since he gave priority to his family. the city health office failed to provide the needed coordination of all efforts intended to cope with the disaster. BPI also discovered that respondent had approved several withdrawals from various accounts of clients whose signatures were forged and validated withdrawals slips unsigned by the client at the time of the validation --. 2010 Carpio-Morales. the validity of her dismissal for loss of trust and confidence was no longer disputed by respondent.it was the respondent who personally accomplished the withdrawal slips and later signed by the client beyond banking hours. Disasters do not strike every day. As part of their duties and responsibilities. a client of a bank requested for a certification of her savings account. Gross neglect of duty denotes a flagrant and culpable refusal or unwillingness of a person to perform a duty. otherwise the constitutional guaranty of security of tenure of the employee would be jeopardized. he had in fact permitted her to work away from home up to the evening. HELD: Yes. or those reflecting on his moral character – if an employee had been dismissed for a just cause under Article 282. coupled with unusual accommodation extended to certain bank clients in violation of the bank’s standard operating procedures. he still did not leave under the pretext that his wife was six months pregnant. Dr. knowingly.Issue: Whether Dr. knowing that his job as senior medical health officer entailed the commitment to make a measure of personal sacrifice. When his wife arrived from work shortly. 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. respondents were tasked to sell Kulas’s products. Respondents filed for illegal dismissal.m. 2003 Davao City bombing. so that the proper action may be taken but there never was any report made regarding the stock shortage. Azucena was making unauthorized withdrawals. cost her job. One day. in that the latter. Initially. As a result. But he did not. FACTS: Respondents Juliet Alcoseba and Flordelinda Arao-Arao were employed as sales attendants of petitioner. It has been held that gross negligence exists when a public official's breach of duty is flagrant and palpable. Respondents were given 3 days to settle the shortage. FACTS: Private respondent Ma. commission of a crime against the employer or his family. J. Dr. The basic premise for dismissal on the ground of loss of confidence is that the employees concerned hold a position of trust and confidence. meaning it must be done intentionally. in affixing her signatures on the withdrawal slips which were later found to have been accomplished through forgery. Estampa to the position he abandoned when it needed him. for gross violation of policies and procedures. the breach of trust must be willful. In his letter-explanation. without justifiable excuse. he also could not leave because she was six months pregnant. a bomb was found some meters from their apartment a few weeks earlier. While the evidence presented by BPI fell short of proving respondent’s complicity in the forging of these withdrawal slips." In both instances. he could not leave his one-yearold daughter because they had no house help. ISSUE: Whether or not there was a valid dismissal. It is the breach of this trust that results in the employer’s loss of confidence in the employee. knowingly. and purposely. prepare weekly sales reports and assist the clerk in the monthly inventory of saleable goods. Laguna Branch. The Court finds no excuse for reinstating Dr. he is not entitled to separation pay. Dr. Estampa's defense is not acceptable. Rosario Arambulo was a bank manager in BPI-San Pablo. And when his wife arrived shortly at 9 p. HELD: No. And it thereafter suspended the respondents for seven days for gross negligence of duties and responsibilities. 2010 Perez. Kulas Ideas & Creations vs. In the reconciliation report it was stated that the respondents were assigned at the Ayala boutique to diligently monitor all stocks and to report any stock discrepancy to the office. Further. and purposely. Yet. He allowed Fuentes to open an account despite lack of documents. and checks with unusual endorsements. endorsing and vouching for VISA card applicants who later turned out to be impostors resulting in financial loss to Keppel. Respondent admittedly disobeyed not only his superiors’ directives but also simple bank rules. etc. G. No. Fuentes deposited several second-endorsed PLDT dividends check amounting to 6 million. James received a termination notice on the ground of breach of trust and confidence for knowingly and maliciously referring.do not suffice. 171630 : August 8. c/o James Jerusalem and the mere act of handing the applications do not mean that he directed that existing policy on approval of credit cards be dispensed. respondent unhesitatingly accommodated the request of Fuentes. For the most part. James recommended the filing of criminal case (estafa) against Javier. As emphasized by petitioner. 2010 PERALTA. James immediately submitted the 67 applications to Visa Credit Card Unit which were approved. Breach of Trust and Confidence James Ben L. James received sealed envelopes said to be containing visa application forms submitted by Javier.: FACTS: Petitioner Century Canning Corporation. RAMIL G. DOCTRINE: A bank manager’s abuse of authority in implementing bank policies is an abuse of the trust reposed in him by his employer which constitutes as a just cause for his termination. James has nothing to do with the approval of the cards for he was already Head of another department. Inc. etc. All transactions coursed by Fuentes were approved by respondent even if questionable. Petitioners assert that respondents failed to regularly undertake a monthly physical inventory of the outlet's merchandise. Having shown that Keppel failed to discharge its burden of proving that James’s dismissal is for a just cause. respondent was perceived to have been extending special favors to Fuentes even though such entails contravention of strict bank guidelines..R. Loss of trust and confidence. Castor A. and loss of confidence. Despite several recommendations and orders by his superiors to close the account of Fuentes due to several infractions committed and mishandling of the account. a company engaged in canned food manufacturing. 2011. Equitable PCI Bank (Now Banco De Oro Unibank. Nos. DEL CASTILLO.R. must be based on a willful breach of trust and founded on clearly established facts. and AMANCIO C. et al. The basis for the dismissal must be clearly and convincingly established. Keppel Monte Bank. G. Later it was learned that all cards were sham. Keppel bank has not been able to show any concrete proof that indeed complainant had participated in the approval of the questioned VISA CARD accounts. Indubitably. 2010. that is. PO. Jerusalem v. CENTURY CANNING CORPORATION. to be a valid cause for dismissal. firms. we have no other recourse but to declare that such dismissal based on the ground of loss of trust and confidence was illegal. 169564. for credit to a personal account and/or checks with unusual endorsement should not be accepted and defiance to the order to stop Allowing/approving the acceptance of second-endorsed checks. on two occasions. There must be an act that would justify the loss of trust and confidence. and prompt coordination with other banks as regards Javier’s deposits and suggested that Keppel must look in the inside job angle of the approval of credit cards. has the duty to ensure that bank rules are strictly complied with not only to ensure efficient bank operation which is imbued with public interest but also to serve the best interest of the bank as he holds a position of trust and confidence. Keppel has the burden in proving that it has sufficient basis in terminating James’ services. Del Castillo DOCTRINE: For breach of trust and confidence to become a valid ground for the dismissal of an employee. Such intention to violate the trust of petitioner is enough for his dismissal from service. respondent defied the instructions. the negligence must not only be gross but also habitual. No. Despite such reasonable order. Castor was instructed by management to stop accepting secondendorsed checks due to the irregularities attendant to the transactions with Fuentes.R.). otherwise the constitutional guaranty of security of tenure of the employee would be jeopardized. respondent was in charge of the overall administration of the branch and is tasked to ensure that all policies and procedures are strictly followed. The invocation of Keppel of the loss of trust and confidence as ground for James’s termination has therefore no basis at all. The assertion fails to persuade. inventory preparation and reporting did not fall on respondents shoulders since they were to "assist the [stock] clerk" only. firms. Castor transgressed wilfully and intentionally the explicit policy of the bank to disallow the acceptance of checks endorsed by corporations. HELD: NO. Keppel had gone too far in blaming James for the shortcomings and imprudence of Visa unit head. JR. societies. Respondent unduly yielded to the whims of a client and gave undue advantage to her instead of performing his duties towards the best interest of the bank. On May 1999. therefore. This is in consonance with the constitutional guarantee of security of tenure. VICENTE RANDY R. vs. the cause of loss of trust and confidence must be related to the performance of the employee’s duties FACTS: James Jerusalem was hired by Keppel as assistant vice president. James filed for illegal dismissal ISSUE: whether Keppel legally terminated James’s employment on the ground of willful breach of trust and confidence. He was assigned as Head of newly created Visa Credit card department then in April 1999 he was reassigned as Head of marketing and operations of jewelry department. From the start. RONQUILLO. any negligence in the exercise of his responsibilities can be sufficient ground for loss of trust and confidence demanded by his position. Article 282 (b) imposes a stringent condition before an employer may terminate an employment due to gross and habitual neglect by the employee of his duties. Respondent’s wanton violation of bank policies equates to abuse of authority and. Dompor. FACTS: Castor Dompor was branch manager of PCIB Makati Cinema Branch. J. The fact that there were notations on the applications. He filed for illegal dismissal ISSUE: whether or not he was dismissed illegally HELD: No. Castor failed to comply with the bank rules that checks payable to corporations. These checks were fraudulently negotiated to Fuentes and that the signatures of different payees have similarities in stroke. as bank manager. 163293 & 163297. vs. April 6. The Court also noted that petitioners were themselves remiss in conducting a regular monthly stock inventory. abuse of the trust reposed in him. employed respondent Vicente Randy Ramil in August 1993 as . To sustain a termination of employment based on this provision of law. Respondent. December 8. J. societies. RICARDO T. He was dismissed from his employment on the grounds of serious policy violations. willful breach of trust. Further. Jr. He could have easily forged the signature of Po on the same day that he prepared the CAPEX form and submitted it on the very same day to petitioner's main office without passing through any officer of petitioner. and whose task is to handle and prepare delicate documents. Loss of trust and confidence. Prior to his dismissal his job included the preparation of the purchase requisition (PR) forms and capital expenditure (CAPEX) forms. The CAPEX form. accusations. On the one hand. non-payment of overtime pay. as correctly found by the NLRC. 1999. to be a valid cause for dismissal. respondent was asked to explain in writing the events surrounding the incident. The CA ordered petitioner to reinstate respondent. He vehemently denied the alleged forgery. as well as the coordination with the purchasing department regarding technical inquiries on needed products and services of petitioner's different departments. must be based on a willful breach of trust and founded on clearly established facts. the NLRC First Division set aside the ruling of LA Canizares. Aggrieved by the LA's finding. and conclusions of employers do not provide for legal justification for dismissing employees. the Court finds that it would be best to award separation pay instead of reinstatement. 1999. The rule is not. Under the doctrine of strained relations. suspended on April 21. while We have previously held that employers are allowed a wider latitude of discretion in terminating the services of employees who perform functions which by their nature require the employers' full trust and confidence and the mere existence of basis for believing that the employee has breached the trust of the employer is sufficient. inclusive of allowances. the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. inclusive of allowances. The following day. Paz processed the paper and found that some details in the CAPEX form were left blank. the NLRC's findings of fact upon which its conclusion was based are not supported by substantial evidence. Po. separation pay. The NLRC declared respondent's dismissal to be illegal and directed petitioner to reinstate respondent with full backwages and seniority rights and privileges. Respondent's illegal dismissal carries the legal consequences defined under Article 279 of the Labor Code. that is. as appearing in the form.O. However. Paz then transmitted the CAPEX form to Purchasing Manager Virgie Garcia and informed her of the questionable signature of Po. and to pay respondent full backwages from the time his employment was terminated on May 20. It must rest on substantial grounds and not on the employer's arbitrariness. he received a Notice of Termination on May 20. illegal. therefore. respondent was ordered to make another CAPEX form. Respondent filed a Complaint for illegal dismissal. The basis for the dismissal must be clearly and convincingly established. Unsubstantiated suspicions. 1999. and to the payment of his full backwages. the request for the equipment was put on hold due to Po's forged signature. which a reasonable mind might accept as adequate to justify a conclusion. LA Potenciano S. due to the urgency of purchasing badly needed equipment. in view of the strained relations between petitioner and respondent. with the form apparently signed by Po. Suspecting him to have committed forgery. and separation pay in lieu of reinstatement equivalent to one month salary for every year . the amount of relevant evidence. and other benefits or their monetary equivalent. more so in the case at bar where both the LA and the NLRC share the same findings. 1999 up to the finality of this decision. such cases should be resolved in favor of labor. otherwise. 1999 up to the time of the finality of its decision. Subsequently. without exceptions one of which is when the findings of fact of the labor officials on which the conclusion was based are not supported by substantial evidence. computed from the date of his dismissal on May 20. the employee would eternally remain at the mercy of the employer. Respondent was dismissed due to loss of trust and confidence and it would be impractical to reinstate an employee whom the employer does not trust. caprice or suspicion. however. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and. the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. who reviewed the case. and endorsed it to Marivic Villanueva.technical specialist. which was immediately transmitted to the Purchasing Department. did not have the complete details and some required signatures. such payment liberates the employee from what could be a highly oppressive work environment.N. an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges. Tamayo. respondent transmitted it to Purchasing Officer Lorena Paz in Taguig Main Office. Lastly. ISSUE: W. HELD: The rule is that high respect is accorded to the findings of fact of quasi-judicial agencies. MERE EXISTENCE OF A BASIS FOR BELIEVING THAT SUCH EMPLOYEE HAS BREACHED THE TRUST AND CONFIDENCE OF HIS EMPLOYER SUFFICES FOR HIS DISMISSAL. NLRC reversed itself and upheld LA Canizares' dismissal of his complaint. In case of doubt. that is. In the case at bar. for the latter's signature. Consequently. but proof beyond reasonable doubt is not necessary. respondent appealed to the National Labor Relations Commission. if respondent was the one who forged the signature of Po in the CAPEX form. there was no need for him to endorse the same to Villanueva and transmit it the next day. respondent is entitled to the payment of full backwages. She also doubted the genuineness of the signature of Po. The law mandates that the burden of proving the validity of the termination of employment rests with the employer. this does not mean that the said basis may be arbitrary and unfounded. The same holds true when it is perceived that far too much is concluded. respondent prepared a CAPEX form for external fax modems and terminal server. computed from the time his compensation was withheld from him up to the time of his actual reinstatement. In view of the foregoing. The right of an employer to dismiss an employee on the ground that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause. On March 3. whim. thereafter. inferred or deduced from bare facts adduced in evidence. However. and to his other benefits or their monetary equivalent. Upon recommendation of LA Cristeta D. pursuant to the social justice policy of labor laws and the Constitution. There is neither direct evidence nor substantial documentary evidence pointing to respondent as the one liable for the forgery of the signature of Po. Respondent was. Secretary of Executive Vice-President Ricardo T. per order of Technical Operations Manager Jaime Garcia. without loss of seniority rights and privileges. however. Canizares rendered a Decision dismissing the complaint for lack of merit. It found that petitioner failed to show clear and convincing evidence that respondent was responsible for the forgery of the signature of Po in the CAPEX form. moral and exemplary damages and attorney's fees against petitioner and its officers before the Labor Arbiter. for loss of trust and confidence. On the other hand. 1996 up to her reinstatement. Ang claimed that she was not covered by the circular governing office hours because she was a bank officer. was deemed automatically retired.: FACTS: Petitioner Luzviminda A. She added that.of service. it even reaped enormous profits from them. rights and interests in the provident fund. retirement pay. The transcript of stenographic notes taken during her direct examination on April 22. Section 27 of Presidential Proclamation 50 provided for the automatic termination of employer-employee relationship upon privatization of a government-owned and controlled corporation. according to her. 178762 June 16. which were known to all the officers of the branch. a position she held when the PNB was privatized on May 26. non-payment of 13th month pay. the PNB failed to prove any basis for loss of trust. and the other benefits due her and cleared her of any accountability. the PNB administratively charged her with serious misconduct and willful breach of trust for taking part in a scam. gratuity benefits. The NLRC deleted the award of damages because of absence of bad faith on the part of the PNB officers but maintained the LA’s finding that the PNB had not proved loss of trust as a ground for dismissal. Specifically. The case is. computed from the time of his engagement by petitioner on August 1993 up to the finality of the decision. The LA ordered the reinstatement of petitioner Ang to her former position or its substantial equivalent. Consequently. and other charges. called "kiting operation. attorney’s fees. 2. Whether or not the CA erred in finding that the PNB dismissed Ang based on the evidence that she betrayed its trust in her as a bank officer. the NLRC reconsidered its finding of lack of due process. Although the transformation of the PNB from a government-owned corporation to a private one did not result in a break in its life as juridical person. Her defense that the PNB did not suffer any loss is of no moment. therefore. and other benefits due her as of May 26. penalties. the provisions of the Labor Code governed its disciplinary action. But. for illegal dismissal. These had been open transactions. The PNB alleged that Ang had allowed this illegal activity while she was the Assistant Department Manager I in its Tuguegarao Branch. eventually becoming an Assistant Department Manager I. 2010 ABAD. it is clear to the Court that Ang did not deny the acts and omissions constituting the offense." but an accommodation of a very valued client. and litigation expenses. The bank computed Ang’s gratuity benefits. separation pay. 1967 as a probationary clerk. however. since the bank had already made deductions for tardiness on her pay check. But such uncorroborated defense is unsatisfactory. including interests. Thus: . Ang claimed that respondent Philippine National Bank hired her on December 4. however. LUZVIMINDA A. As to the existence of just cause. ISSUE: 1. Managerial employees. allowances. Less than four months later. The PNB appealed the decision to the NLRC but the latter dismissed the same. The Labor Arbiter found the PNB’s dismissal of Ang illegal for failure to show that the dismissal was for a valid cause and after notice and hearing. she cannot anymore be administratively charged for it. HELD: The offenses that Ang committed against the bank before its privatization continued to be offenses against the bank after the privatization. Ang filed a complaint against the PNB before the National Labor Relations Commission (NLRC). the monetary value of her leave credits. The focal point is that she betrayed the trust of the bank in her fidelity to its interest and rules. since the PNB was already a private corporation when it looked into Ang’s offenses. like her co-employees. 1996 the PNB heaped other charges against Ang of serious misconduct and gross violation of the bank’s rules and regulations. worked beyond the usual eight hours and even worked on Saturdays and Sundays. But the PNB re-employed Ang as Assistant Manager and assigned her in its Tuguegarao. Ang claims that she is entitled to the monetary value of her leave credits. 1996. Further. No. revealing a mind that was willing to disregard bank rules and regulations when other branch officers concurred. J. the PNB did not suffer any loss from those transactions. illegal deductions. without loss of seniority rights and with full backwages and other benefits or their money value from the time of her actual dismissal on July 25. Cagayan Branch. But she rose from the ranks. the same idea of continuity cannot be said of its employees. PHILIPPINE NATIONAL BANK G. Whether or not the CA erred in holding that Ang was not entitled to the benefits that the PNB withheld from her. Ang claimed that it was not a "kiting operation.R. and retirement benefits with prayer for payment of moral and exemplary damages." where a depositor used a conduit bank account for depositing several unfunded checks drawn against the same depositor’s other current accounts and from which conduit bank account he later withdrew those checks. CA upheld Ang’s dismissal from the service for willful breach of the trust reposed in her by the PNB. ANG vs. On September 16. considering Ang’s admission during direct examination that the PNB informed her of the charges against her and gave her a chance to present her side with the assistance of a counsel. Upon motion for reconsideration. shows that her defense consisted in her claim that she accommodated a client’s unfunded checks and issued false bank certificates with the knowledge and consent of the branch manager and comptroller. Cagayan. such privatization cannot deprive the government employees involved of their accrued benefits or compensation. said Ang. She also claimed that the issuance of the certificates had been tolerated to accommodate valued clients as a marketing strategy and prevent their move to other banks. She admitted that the checks were not funded and were converted into account receivables or accommodation loans that the client had settled. 1996 and when she. 1998 before the NLRC Regional Arbitration Branch in Tuguegarao. The PNB rightfully separated her from work for willful breach of the trust that it reposed in her under the Labor Code. remanded to the Labor Arbiter for the purpose of computing the proper monetary award due to the respondent. and attorney’s fees. Consolacion gave the following explanation: “If we are still going to accommodate the latest payments and posted [sic] from time to time posting of collection will never end. Since she had no pending administrative case on the day she ceased to be a PNB employee and had been cleared of any accountability. In 2003.: FACTS: Amellar Corporation (respondent) provides information technology services to local government units (LGUs) including computerizing their system and operations. and applicable legislation. the PNB already computed the benefits to which she was entitled and readied their payment.R. assailing the appellate court’s decision. be construed to deprive said officers and employees of their vested entitlements in accrued benefits or the compensation and other benefits incident to their employment or attaching to termination under applicable employment contracts. 27. of said date. 2003 for "obstructing the conduct of due process. Melvin Tandoc (Tandoc). Anabel thereupon filed a complaint for illegal suspension before the National Labor Relations Commission (NLRC) against respondent and/or Tandoc. Since Ang had none of that. the employer-employee relations between the government and the officers and other personnel of such corporations shall terminate by operation of law.M. Pati. The Court sees no reason why she should not receive the benefits which she earned or which accrued to her as of May 26." Respondent even commended Evangeline for her "care and diligence expected from a responsible supervisor. Nothing in this section shall. the same should be deemed governed by the Labor Code since the PNB that rehired her on May 27. 2003 memorandum would proceed at 1:45 P. respondent cleared her of any wrongdoing. hence. The Court of Appeals reversed the NLRC Decision and dismissed petitioners’ complaints. preventively suspended her for three days starting April 25. Ang’s employment with it as a government-owned corporation ceased. AMELLAR The CBU Department of respondent collates and cleanses all the paper data gathered from the LGU-client which are then encoded and fed into the designed operating system." Tandoc later sent Anabel a memorandum of May 6. Batangas informed the manager of respondent that its real property tax administration database was not "100% complete. Willful Disobedience of Lawful Orders in Connection with Work She was directed to submit within 72 hours your written answer on why she should not be dismissed on the said grounds. Anabel thereupon required Consolacion and Evangeline to explain in writing the alleged incidents subject of Tandoc’s memorandum. Both cases were consolidated. the present petition. it concluding that the written complaint from the municipal assessor of Mabini was "more likely due to miscommunication. 23 ANABEL BENJAMIN CORPORATION G. and attorney’s fees. Labor Arbiter Felipe P. damages. Respondent. Automatic Termination of Employer-Employee Relations." She was also subsequently suspended for three working days starting April 30. adding as causes of action illegal dismissal. when PNB was privatized. alleging that Anabel did not inform Consolacion of the hearing.” Tandoc directed Anabel to inform Consolacion and Evangeline that the formal hearing on the issues raised in his March 27. Gross and Habitual Neglect of Duties. Treasurer[’]s Office to separate those recently posted with new payments to update later in order to have a systematic flow of mass updating of payments. 1996. 2003 for not obeying a direct order. Indeed. I have instructed the Land Tax Division. Anabel amended her Complaint. None of such officers or employees shall retain any vested right to future employment in the privatized or disposed corporation. the cited rule did not apply to her. As for possible benefits accruing to Ang after May 26. In October 1999. As for Evangeline. — Upon the sale or other disposition of the ownership and/or controlling interest of the government in a corporation held by the Trust. prompting respondent to file a petition for certiorari before the Court of Appeals. NLRC affirmed the Labor Arbiter’s decision. finding that petitioners were illegally dismissed. Under the Omnibus Rules Implementing the Labor Code. and the new owners or controlling interest holders thereof shall have full and absolute discretion to retain or dismiss said officers and employees and to hire the replacement or replacements of any one or all of them as the pleasure and confidence of such owners or controlling interest holders may dictate. No. the municipal assessor of Mabini. J. thus sent Anabel a memorandum informing them of complaints received from their clients. The GSIS rule that the PNB now relies on applied only to employees with pending administrative charge at the time of their retirement. the PNB rehired her immediately but that is another story. 2001. In fact. her record as employee of the government-owned PNB was untarnished at the time of her separation from it. Book VI. Here. Section 7. ISSUE: WON there is substantial proof of Gross and Habitual Neglect of duties or Loss of Trust and Confidence April 5. 1996 has become a private corporation. the PNB already computed the retirement and other benefits to which she was entitled as a result of the cessation of her employment.Sec. however. 1996 because of her dismissal.20 all those benefits already accrued to her on the date of her termination. 2010 . Tandoc issued Anabel a Notice on Decision to Dismiss. Of course. damages. the employee’s separation from work for a just cause does not entitle her to termination pay. Thus. 1996. nonpayment of overtime pay and service incentive leave. since March 26. and RENATO CONSOLACION vs. collective bargaining agreements. Rule I." contrary to the report of respondent’s supervising data controller Evangeline Repiano. the PNB may rightfully withhold Ang’s termination pay that accrued beginning on May 27. In the eyes of the law. 183383 CARPIO MORALES. Consolacion also filed a complaint for illegal dismissal. was the Project Data Controller of its Content Build Up (CBU) Department. respondent’s Technology Manager. respondent hired petitioner Anabel Benjamin (Anabel) who. or all or substantially all of the assets of such corporation. 2003 dimissing her for willful Breach of Trust. Respondent also faults Anabel for gross and habitual neglect of duties for "failure to institute existing standards and procedures both written and unwritten" and "failure to monitor and correct the errors of [her] subordinates. like Consolacion. There being nothing in the records to identify what specific duties Anabel violated and whether the violations were gross and habitual. gross and habitual neglect of duties. As did the NLRC. respondent is directed to give them separation pay equivalent to at least one month salary for every year of service. INC. Respondent thus banks heavily on the report of Consolacion to monitor the output quality and quantity of its data controllers. the notice should specifically mention which company rules. any discussion herein is an exercise in futility. 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. PROCTER & GAMBLE PHILS. without loss of seniority rights and privileges. yet only one written complaint on the Mabini project was presented. INC. G. occupied a position of trust and confidence. and decide on the defenses they will raise against the complaint. he being a supervising data controller. knowingly and purposely. Respondent instead sent her a dismissal notice. and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. It was his primary duty to monitor and report the performance of the data controllers in relation to the scope of work contracted out to respondent. Respondent cannot suspend Anabel without hearing her side for her alleged disobedience since suspension in this instance was a penalty. It bears stressing in dismissing an employee for gross and habitual neglect of duties. and willful disobedience to lawful orders. had been absolved from any liability. as a ground for dismissal. she being the officer-in-charge of the CBU Department. It harps on supposed "numerous" complaints it received on their projects. Consolacion occupied a position imbued with trust and confidence. Moreover. respondent assesses its employees and bills its clients for work done. Ordinary breach will not suffice. Mamac explains the importance of the first written notice: (1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them. the immediately stated acts of non-compliance are too general and can encompass just about any malfeasance. It should also be habitual. however. 160506. SO ORDERED. Evangeline. J. Apart from its self-serving assertions. Note that the Mabini project had been determined to be completed and the accountable data controller." Despite Anabel’s May 14. the Court finds that respondent erred in preventively suspending petitioner Anabel for lack of basis. without justifiable excuse. thus leaving to surmise what those procedures. Amellar Corporation. Respecting Anabel who was dismissed for willful breach of trust. heedlessly or inadvertently. Lastly. in order to enable the employees to intelligently prepare their explanation and defenses. Suffice it to state that respondent contented itself with conjectures and surmises as proofs of its charges. thoughtlessly. standards and orders were. is premised on the fact that the employee concerned holds a position of responsibility or of trust and confidence. and to pay them full backwages inclusive of allowances and other benefits or their monetary equivalent. from the time of their dismissal until actual reinstatement. to their former positions or their equivalent. however. 2003 letter for particulars. Respondent should thus be made to reimburse Anabel for her suspension without pay covering three (3) working days. if any.: DOCTRINE: Loss of trust and confidence. No costs. is ORDERED to reinstate petitioners. as a cause for termination of employment. computed from the time of engagement of their services up to the finality of this decision. "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. and PROMM-GEM. gather data and evidence. et al. consult a union official or lawyer. Anabel Benjamin and Renato Consolacion. And so does the Court find erroneous the suspension penalty imposed on Anabel for violating her right to due process. King of Kings Transport v. the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. Evidently. On the basis of this report. 282 is being charged against the employees. the assailed Decision of the Court of Appeals is REVERSED and SET ASIDE. If reinstatement is no longer feasible. must be based on the willful breach of the trust reposed in the employee by his employer. The records of this case are REMANDED to the Labor Arbiter for computation of petitioners’ respective monetary claims. Respondent.. vs. WHEREFORE. March 9. Loss of trust and confidence. the negligence should not merely be gross. as distinguished from an act done carelessly. ALIVIADO. Respondent.HELD: To terminate the services of an employee for loss of trust and confidence. A breach of trust is willful if it is done intentionally. Nowhere in the Notice was there a detailed narration of the facts and circumstances that would serve as bases to terminate Consolacion. No. In order to . 2010 Del Castillo. A general description of the charge will not suffice. respondent never addressed what were the standards and procedures she violated and errors she failed to monitor. failed to prove even a single act ─ basis of its loss of trust and confidence in Anabel. there being no serious and imminent threat to its life and property or to her co-workers. Respondent is further DIRECTED to pay Anabel Benjamin her wages covering three working days for her illegal suspension. respondent had not offered any piece of documentary evidence to lend truth to its allegations.R. she. are violated and/or which among the grounds under Art. two requisites must concur: (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. is deemed as an act of disloyalty prejudicial to the interests of our Company: serious misconduct and breach of trust reposed upon you as employee of our Company which constitute just cause for the termination of your employment. the petitioners-employees of Promm-Gem have not been shown to be occupying positions of responsibility or of trust and confidence. Manalo only accepted the cash payment for 60 bundles (3.50 per sack.400 pieces of empty sacks) in the dump truck for unloading at the gate after payment. Instead of personally overseeing the segregation and unloading of the excess 8 bundles on being informed (through the delivery receipt and the gate pass) that only 60 bundles were paid for. Petitioners insist that since they had been engaged to perform activities which are necessary or desirable in the usual business or trade of P&G. Upon payment. 157861. as follows: This informs you that effective May 5.. is premised on the fact that the employee concerned holds a position of responsibility or of trust and confidence. ISSUE: Whether the dismissal based on willful breach of trust was proper. service incentive leave pay and other benefits with damages. FACTS: Petitioners filed a complaint against P&G for regularization. February 2.000 pieces were duly paid for and covered by receipt. Ordinary breach will not suffice. The complaint was later amended to include the matter of their subsequent dismissal. vs.000 pieces of empty sacks. At Manzo’s request. When Manalo passed by the gate on her way home. as distinguished from an act done carelessly.” She asked for a count of the sacks as they appeared to be more than the 60 bundles that Manzo purchased.” Lado filed a complaint for illegal dismissal against the petitioner and Lim. the act complained of must be work-related and must show that the employee is unfit to continue to work for the employer. and (2) the release of one-use sack when Manalo’s note expressly authorized the release of mix-use sacks. and d) it must be genuine. however. Based on the following considerations. Lim issued Lado a Notice of Termination. The latter in turn showed her the bundles of empty sacks (50 pieces per bundle) available for sale. handling or care and protection of the property and assets of the employer.R. thoughtlessly. we can only conclude that Lado has become unfit to remain in employment with the petitioner. has been terminated. thus. He had access to company property. were not removed from the truck and the whole lot was unloaded at the gate. ISSUE: Whether the dismissal based on willful breach of trust was proper. 1. for “serious misconduct.000/mix-mix” and told her to proceed to the warehouse. as a ground for dismissal. As such. Lado loaded 68 bundles (or 3.: . Promm-Gem. must be based on the willful breach of the trust reposed in the employee by his employer. and assailing the integrity of the Company as legitimate and independent promotion firm. Manzo did and showed the note to Lado. He explained that the buyer only paid for 60 bundles because her cash was only sufficient for 60 bundles and would have paid the excess by a personal check.constitute a just cause for dismissal. Inc…. It was this trust that he had to uphold when Manzo purchased the company’s empty sacks. Lado held a position of trust and confidence. classifying feed ingredients. The petitioner tasked Lado with the close monitoring and handling of company property. And. but Manalo refused to accept payment by check. She confirmed that there were 68 bundles outside the guardhouse. b) it should not be used as subterfuge for causes which are improper. In the instant case. As warehouseman. He stated that when the buyer learned that 68 bundles were available. INC. the petitioner’s cashier. she saw the sacks “dumped outside the guardhouse. J.000 pieces) and refused to accept Manzo’s personal check for the excess. Lado allegedly delegated the task. that you considered yourself as an employee of Procter & Gamble Phils. for the purchase of 3. BIBIANA FARMS AND MILLS. Loss of trust and confidence. Lado submitted to Lim a detailed explanation. Controversy: Petitioner’s General Operations Manager/Production Supervisor. 1992. she expressed her intention to buy all the 68 instead of just 60 bundles. not a mere afterthought to justify earlier action taken in bad faith. Inc. dishonesty. heedlessly or inadvertently. RULING: YES. Manalo quoted the price at P3. The excess 8 bundles. his duties involved the handling of incoming and outgoing feed ingredients. 2010 Brion. your employment with our company. the act complained of must be work-related and must show that the employee is unfit to continue to work for the employer.400 pieces of empty sacks when only 3. to avoid or minimize losses. The termination letters given by Promm-Gem to its employees uniformly specified the cause of dismissal as grave misconduct and breach of trust. Manzo only paid for the original 60 bundles purchased. illegal or unjustified. knowingly and purposely. They claim that they were recruited by the salesmen of P&G and were engaged to undertake merchandising chores for P&G long before the existence of Promm-Gem and/or SAPS. as a cause for termination of employment. in order to constitute a just cause for dismissal. without justifiable excuse. Neither is there any evidence to show that they are unfit to continue to work as merchandisers for Promm-Gem. They claim that the contractors have neither substantial capital nor tools and equipment to undertake independent labor contracting. Petitioners insist that they are employees of P&G. FACTS: Background: Manzo transacted with Manalo. Lim (Lim directed Lado to submit his written explanation on: (1) the release of 3. loss of confidence and other grounds. fraud. Petitioners further assert that Promm-Gem and SAPS are labor-only contractors providing services of manpower to their client. RULING: We find no valid cause for the dismissal of petitioners-employees of Promm-Gem. A breach of trust is willful if it is done intentionally. however. ARTURO G. he must be invested with confidence on delicate matters. We find your expressed admission. LADO. Peter L. DOCTRINE: The guidelines for the application of loss of trust and confidence as a just cause for dismissal of an employee from the service are: a) loss of confidence should not be simulated. then they are its regular employees. dismissing him from the service effective upon receipt. Lado was no ordinary rank-and-file employee. Manalo then gave Manzo a note containing the number and words “3. and supervising feed mill laborers. Loss of trust and confidence. such as custody. willful breach of trust. especially the outflow of full sacks of feeds destined for the stations and the return of empty sacks. c) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. classifying and controlling feeds empty sacks. No. The respondent submitted three receipts to the company for reimbursementone from McDo. 3. the dismissal was not anchored on any of the causes under Art.” This note clearly indicated that Manzo and Manalo agreed that Manzo was only buying 3. Gacayan Facts: Respondent Gacayan started to work for petitioner company from October 1985 until her termination on April 1995 as a Senior Financial Accountant. the company sent successive memos to Gacayan asking her to explain her side. Yet. the BOD of Destiny terminated petitioner due to loss of confidence. given what happened. When he failed to unload despite the clear obligation to do so.) opportunity given to the employee to be heard and defend himself. laying the company open to the possibility of loss. To reiterate. upon appeal. His act of loading 68 bundles of empty sacks. and two from Shakey’s Pizza. He aired his side and gave his reasons: that he organized and created the Marketing group. She aired her comments through letters and eventually. Lado disregarded this note on the justification that Manzo expressed the desire to purchase the entire lot shown to her. was not just in anticipation of the possible purchase by Manzo of the entire lot of empty sacks.) the employee holds a position of trust and confidence. We find these guidelines complied with in the present case. Gacayan attended the first hearing but absented herself from the subsequent ones. 282 of the Labor Code. it will not be wise for the latter to continue the former’s services. On February 2004. Petitioner holds a managerial position. out of company premises.) the same is not simulated. On March 16. Like any business entity. which has the ff. The CA.P100. The law.000 as nominal damages to petitioner because the respondent company did not observe due process in terminating Ancheta. This is already serious misconduct for which he should be held accountable. 4. 1995. we are convinced that Lado’s acts that almost led to the loss of 400 empty sacks. a pre-need insurance company. the respondent was not a managerial employee. hired petitioner Ancheta on November 2002 as Head of the Marketing Group because of the latter’s experience and expertise in the field of pre-need insurance. requisites: 1. Both the LA and the NLRC dismissed the case. despite the authority to deliver only 60 bundles. the latter finding in its decision that there was indeed illegal dismissal. The two requisites of valid dismissal are present: 1. and the other Shakey’s receipt’s itemization of order was altered. it is liable for nominal damages amounting to P30. After considering the parties’ submission. On February 17.) they have the authority to hire and fire. The CA affirmed the NLRC’s decision with modification. and the respondent did not commit it because there was no wrongful intent for her to commit a serious misconduct nor injury to petitioner. among others. Ancheta was surprised to learn because in one Marketing Committee meeting. in fact.000. in protecting the rights of the employee. since the respondent did not comply with the “TWO NOTICE” requirement in dismissing petitioner. the company invited her for a hearing and formal investigation. Lado. In the instant case. illegal or unjustified.the Mcdo and one Shakey’s receipt’s date were altered. When he disregarded Manalo’s note.2. no factual and legal basis. 2004. As regards the contention of the company that Gacayan committed a “serious misconduct”. a part of which was unpaid. constituted not only a violation of company rules and regulations. 282 of the Labor Code and 2. Lourdes School of Mandaluyong. petitioner filed a case of illegal complaint to the Labor Arbiter. noticed and eventually learned that the receipts were altered. Isssue: WON there was valid termination because of loss of confidence Held: Yes. However. Because of the poor performance of the petitioner which causes financial losses to the respondent. and d) it must be genuine. reversed the LA’s decision. Lado held a position of trust and confidence and was given access to and authority over company property with clear tasks and guidelines laid down very early in his employment. mainly because of the poor sales performance of the Marketing group. she was In. and that the loss of confidence has . 2. Lado. The company dismissed her on April 4. Issue: WON there was a valid dismissal due to loss of confidence Held: No.) regularly directs the work of two or more employees. whenever the employees had overtime work. Lado violated company procedures. not only violated the company’s trust and confidence. and was practically the lifeblood of the company. yet again failed to act on this clear evidence of the purchase and the overloading that he had made. he had become a threat to the viability of company operations and to rule that he should be reinstated would be oppressive to the petitioner. c) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. we restated the guidelines for the application of loss of trust and confidence as a just cause for dismissal of an employee from the service. he consummated his end of the deal that would have led to the loss of company property and thereby violated his fiduciary duty as custodian of company property. Consequently.) it’s not used to subterfuge for illegal causes. Fungo v. the issue was raised only in the petitioner’s reply on 2002.)not arbitrarily asserted. 3. Destiny Plans Facts: Respondent Destiny plans. LOSS OF CONFIDENCE Coca-Cola v. 3. the petitioner has every right to protect itself from actual threats to the viability of its operations.) genuine and not a mere afterthought and 5. reversed the decision of the NLRC holding that the penalty of dismissal from work was too harsh. as a matter of fact.) just cause under Art. that his behavior is not alarming. was subsequently presented with the receipt and gate pass for only 3. authorizes neither the oppression nor the selfdestruction of the employer. 2. The NLRC however. He eventually received a letter from the company asking him why he should not be dismissed from work for loss of confidence.000 mix-mix. his boss announced that he (Ancheta) will resign (not dismissed). The company has a policy of reimbursing to its employees their transpo and meal expenses for a maximum of P150 per day. Gacayan filed an illegal dismissal complaint to the Labor Arbiter. The company however. Upon confirmation of such alterations. thus: a) loss of confidence should not be simulated.000 pieces of empty sacks. “Trust and Confidence” is restricted to employees in managerial positions. not a mere afterthought to justify earlier action taken in bad faith. it was part of a scheme to transport the entire lot. The requisites of the doctrine of loss of confidence are also present: 1. Ancheta v.000 empty sacks. but also a serious infraction resulting in his employer’s loss of trust and confidence in him. b) it should not be used as subterfuge for causes which are improper.) primary duty is to manage the establishment or its subdivision. it is difficult to reach the sales target in the 1st and even 2nd year. This is the only conclusion that we can draw when Lado had all the 68 bundles loaded into the truck after Manzo presented to him Manalo’s note clearly stating “3. Unknowingly and trustingly. or care and protection of the employer’s property. In her answer. 2) WoN petitioner’s right to due process was violated. Furthermore.360. the specific unit in PAL charged with the processing. payment of backwages. Quijano filed a complaint before the Labor Arbiter on illegal suspension and illegal dismissal. a new set of procedures were adopted. PHILIPPINE AIRLINES. reconciliation.R. this Court has granted separation pay to a legally dismissed employee as an act of “social justice” or based on “equity. At the very most. (Goldair for short) wherein PAL overpaid commissions to the latter amounting to several million Australian dollars during the period 1984-1987. the act complained of must be “work-related” such as would show the employee concerned to be unfit to continue working for the employer. No.entitled to the privilege of reimbursement. Alcantara. for equity finds no room for application where there is law.00 and P360. it is required that the dismissal (1) was not for serious misconduct. she was made to understand that these were the official procedures in contrast with the actual procedures. On appeal. the case was dismissed on appeal before the NLRC and the CA. in order to constitute a just cause for dismissal. albeit major. On May 5. This situation holds where a person is entrusted with confidence on delicate matters. in exceptional cases. Two Certificates of Time Deposit (CTD) issued by PCIB were allegedly being used by the syndicate in their illegal activities. This was dismissed for lack of merit. vs. Hence. The language of Article 279 of the Labor Code is pregnant with the implication that a legally dismissed employee is not entitled to separation pay.00 that was prejudicial to the welfare and interest of the Bank”. an investigating committee formally charged Quijano (and suspended her while investigation is on-going) as Manager-ASAD for failure on the job and gross negligence resulting in loss of trust and confidence to uncover or detect and report or grossly disregarded the fraud although the commissions vis-àvis production were scandalously high in her department in connection with the processing and payment of commission claims to Goldair Pty. a certain Romy Espiritu called PCIB’s Customer Care Department reporting the alleged involvement of the petitioner with a big syndicate. The Resolution of PAL underscored her acts of mismanagement and gross incompetence which made her fail to detect the irregularities in the Goldair account that resulted in huge financial losses for petitioner. the CTDs were unbooked and the duplicate control copy and PCIAV Input Document Copy do not state the due dates and term of the two (2) CTDs. But. private respondent may be granted separation pay on the ground of equity which this Court had defined as “justice outside law. G. she claimed that during her years of service as ASAD’s manager.. not backed by proof beyond reasonable doubt but are. The Ca correctly stated that the penalty of dismissal was too harsh for the acts of the respondent. However. 2) YES. 151349 FACTS: Alcantara. in order to constitute a just cause for dismissal. NLRC reversed the decision and ordered PAL to pay Quijano her separation pay. On December 1997. or care and protection of the employer’s property. they can only be characterized as unintentional.000. PCIB G. the same cannot be described as morally reprehensible actions.” Leandro Alcantara vs. Thus. Petitioner filed with the Regional Arbitration Branch of the NLRC a complaint for illegal dismissal. The Labor Arbiter dismissed the case for lack of merit and absolved PAL from liability. hence this petition for certiorari. nevertheless. and validation of all claims for commission filed by agents worldwide. WoN Quijano is entitled to separation pay. As we have consistently held. 1984. PAL’s motion for reconsideration was denied. such as the custody. Likewise. there have been 4 prestigious auditing/accounting firms which examined their accounting processes and that there were no audit findings which imply fraud or mistake on their part. Loss of confidence as a just cause for termination of employment is premised from the fact that an employee concerned holds a position of trust and confidence. Admittedly. ISSUES: 1) WoN there has been a valid dismissal for loss of trust and confidence. this petition. However.” In both instances. As a result. being ethical rather than jural and belonging to the sphere of morals than of law. petitioner was dismissed from employment for taking advantage of the trust and confidence reposed in his position as branch manager and “falsified Bank records in order to facilitate a transaction amounting to P538. which is under the direct supervision and control of the Vice President-Comptroller. handling. This situation holds where a person is entrusted with confidence on delicate matters. It is grounded on the precepts of conscience and not on any sanction of positive law. ISSUES: 1) WoN petitioner’s dismissal was valid. rose from the ranks of PCIB from 1974 until he became a branch manager of the PCIB’s branch in Rizal Avenue. lapses in professional judgment. handling. In the case at bar. illegal suspension. Likewise. the petitioner prepared two (2) CTD’s with an aggregate amount of P538. and (2) does not reflect on the moral character of the employee or would involve moral turpitude.000. the head of Sales.00.000. As a result. verification. before Quijano’s term. Manila. HELD: 1) YES. such as the custody. Petitioner was the one who prepared and processed the CTDs. Loss of confidence as a just cause for termination of employment is premised from the fact that an employee concerned holds a position of trust and confidence. 1997. 123294 FACTS: Complainant Quijano rose from the ranks starting as accounting clerk in December 1967 until she became effective September 1. the transgressions imputed to private respondent have never been firmly established as deliberate and willful acts clearly directed at making petitioner lose millions of pesos.R. and other benefits. given credence since they have been adopted by both the labor arbiter and the NLRC and are supported by substantial evidence. QUIJANO. Ltd. she became a participant in the mess. the said findings are . the act complained of must be “work-related” such as would show the employee concerned to be unfit to continue working for the employer. and upon her assumption as manager. Manager-Agents Services Accounting Division (ASAD). the degree of proof required in labor cases is not as stringent as in other types of cases. It appears that on December 23. The CTDs were signed by the petitioner and Guillerma F. No. But. HELD: 1) YES. PAL dismissed her from its employ. and within the scope of the audit program of the Vice President-Internal Audit & Control. NATIONAL LABOR RELATIONS COMMISSION and AIDA M. INC. 1989. On May 23.We cannot give credence to petitioner’s claim that the Labor Arbiter and the NLRC decided his case purely on the basis of respondent’s evidence. the notice cannot be considered sufficient compliance with the rules. June 16. Javier [Javier] and Premy Ann G. The first apprises the employee of the particular acts or omissions for which his dismissal is sought. We hardly find it believable that petitioner was. 2002. A perusal of petitioner’s own pleadings and evidence readily showed his admission that he personally processed the two CTDs at issue. On June 21. Private Respondent filed a Complaint with the Labor Arbiter for illegal suspension. 2002. In any event. it can be said that his obvious laxity or negligence in the issuance of the said CTDs was even tainted with dishonesty. 2002 to submit her written reply. but she again failed to attend. irregularities in [the] arriendo collections were discovered. The first notice must state that dismissal is sought for the act or omission charged against the employee. If he truly had the bank’s best interests at heart. Duque [Duque] is the Vice-President-Director of the Human Resources Department of the Alcantara Group. thereafter. President and Operating Officer. MARLYN CUEVAS G. Batangas City. payment of backwages. Private Respondent requested that the hearing be conducted on June 5. it is incomprehensible why petitioner was so eager to issue the CTDs (which may be used as evidence of the existence of time deposits in the names of petitioner’s clients for the total amount of P538. attorney's fees and other monetary claims. the date of her preventive suspension. through those documents. The initial findings of the investigating panel revealed fraudulent activities and irregularities committed by the Private Respondent relative to the Company funds. and Assistant Corporate Secretary. Beloy [Beloy] are Lima's Executive Vice- . Private Respondent failed to appear. Petitioners dismissed Private Respondent on the ground of loss of trust and confidence effective May 22. damages. despite his knowledge that they were unfunded. 2) NO. On July 3. He should have never issued those CTDs in the first place since. Liaison Assistant. Consequently. He was assisted by Flor San Gabriel [San Gabriel]. The notice of termination was received by the Private Respondent on the same date. 2002. It gave petitioner considerable leeway with regard to the submission of his written explanation by allowing multiple extensions of time to submit the same and by furnishing him the documents used in respondent’s investigation. Site Assistant and Imelda Melo [Melo]. With regard to the requirement of a hearing. ordered to turn over all documents and keys in her possession to Mrs. Petitioners Leandro D. Venus Quieta. 2010. The collection of the proceeds were under the direct supervision of Jonas Senia [Senia]. 2002. It is settled that notice and hearing constitute the essential elements of due process in the dismissal of employees. In February 2000. petitioner was given full opportunity to prove his claim of illegal dismissal before the Labor Arbiter and the NLRC but he still failed to discharge his burden of proof. It is apt to conclude that respondent more than acted in accordance with the due process required in the termination of an employee. She was. No. with more reason that he would exercise caution before issuing CTDs for enormous amounts by waiting for the funds to be actually deposited instead of exposing his employer to great risk.360. In fact. Ultimately. even assuming that he was not fully heard during the employer’s investigation. Operation and Estate Manager at the Lima Land Estate. LIMA LAND vs. The fact that petitioner had the unfunded CTDs eventually cancelled is of no moment. otherwise. Private Respondent submitted her written reply on June 4. Private Respondent was served with a notice to explain and was placed under preventive suspension on May 22. and not that an actual hearing should always and indispensably be held. Thus. Although Petitioners gave her until June 14. Inc. Peralta Facts: Lima Land. he had to cancel the CTDs when the promised checks were not delivered to him at the appointed time. Petitioner Sylvia M. The Labor Arbiter dismissed the action but was overturned by the NLRC. Petitioners formed an investigating panel to conduct a thorough investigation on the status of the collections. and non-payment of salaries. The second informs the employee of the employer’s decision to dismiss him. (Lima) is a company engaged in the real estate business and a member of the Alcantara Group of Companies (Alcantara Group). respectively. and (2) the other to inform him of his employer’s decision to dismiss him. service incentive leave pay and 13th month pay against the Petitioners. Issues: Whether Lima Land validly dismissed Cuevas? Ruling: As to the Requirements of Procedural Due Process: In dismissing an employee. The arriendo collections were. 2002. again by his own allegation. 2002. remitted to the Head Office in Makati and booked as company income.000. 2002. 2002 to submit additional evidence. She also prayed for her reinstatement. and 3) failure to institute sufficient accounting standards. the essence of due process lies simply in an opportunity to be heard. During the initial hearing scheduled on May 24. Private respondent Marlyn G. illegal dismissal. 169523. The CA affirmed the assailed decision. as he averred. it was petitioner’s fault because of his misguided insistence on having a trial-type hearing despite established jurisprudence stating that the mere opportunity to be heard would suffice as due process in administrative proceedings. the employer has the burden of proving that the former worker has been served two notices: (1) one to apprise him of the particular acts or omissions for which his dismissal is sought. To be sure. Private Respondent received another notice charging her with the following: 1) failure to exercise reasonable diligence to inquire about the status of the unremitted arriendo collections. Private Respondent did not submit any. Cuevas [Cuevas] was the Finance and Administration Manager of Lima. 2) approving a patently false request for reimbursement of representation expenses. 2002.R. Lima entered into several lease agreements known as “arriendo contracts” with different persons whereby [the former transferred to the latter] its right to harvest [coconuts as well as other fruits planted on the lands it owned] in consideration of certain monetary equivalent. Petitioners gave her until May 30.00) on the mere verbal representations of the clients and the expedient of being shown a passbook from a different bank. he was in effect certifying the existence of time deposits in his branch that were actually fictitious. holiday pay. motivated by a noble desire to generate more business for the respondent bank. In 1996. We can come to no other conclusion but that respondent bank was justified in terminating petitioner’s employment on the ground of loss of trust and confidence. he admittedly issued them even before he received the purported manager’s checks that would fund the time deposits and. thereafter. The employer must furnish the employee with two written notices before termination of employment can be legally effected. In the case before the Court.80 cash on delivery (COD). caprices or suspicion. be an actual breach of duty committed by the employee which must be established by substantial evidence. as distinguished from an act done carelessly.80/sheet. in order to enable the employees to intelligently prepare their explanation and defenses. She claimed that the canvass sheet (No. People's Journal Tonight. His primary duty involved the canvassing and purchase of paper and other materials for PJI's day-to-day operations. Atty. however. vs. There has been no showing nor allegation that respondent had been previously found guilty of any misconduct or had violated established company rules that would warrant the charge of gross negligence and failure to exercise extraordinary diligence as basis for the petitioner company's loss of trust and confidence in her. 2003. requiring her to explain the difference in the quotation of P6. explained the details of the purchase transaction with NAPPCO. are not justifiable grounds for petitioners' loss of trust and confidence in her.40/sheet. 2002. in the language of Article 282 (c) of the Labor Code. Inc. Leozar Dela Cruz y Balobal. in a hearing which was supposed to be held on May 24. and decide on the defenses they will raise against the complaint. 2002.68/piece (25x27) from LAMCO. He explained that NAPPCO quoted a price of P5. the requirements of procedural due process were complied with by petitioners when they sent a notice dated May 23. 187120. though. exclusive of allowances and other benefits. In support of his position. 20800) itself showed that the figures were written by Rivera himself.50 from NAPPCO and P4. Respondent’s negligence or carelessness in handling the arriendo collections. Chong denied in his letter giving a quotation of P3. issued a memorandum requiring Rivera to explain in writing why he “should not be terminated from employment for defrauding or attempting to defraud the Company x x x” in the canvassing and purchase of Women’s Journal’s paper requirements. Ruby RuizBruno (Ruiz-Bruno). PJI placed Rivera under preventive suspension. but. otherwise. the notice should specifically mention which company rules. heedlessly or inadvertently. it quoted a price of P6. but since PJI could not meet its terms. Upon request of respondent. whims.R. if any. The memo alluded to a “reliable quotation from NAPPCO for 68. does not constitute dishonest or deceitful conduct which would justify the conclusion of loss of trust and confidence. It must rest on substantial grounds and not on the employer’s arbitrariness.26/piece (23x27) and P4. were violated and/or which among the grounds under Article 282 is being charged against the employees. Moreover. She did not use her authority as the Finance and Administration Manager to misappropriate company property nor did she abuse the trust reposed in her by petitioners with respect to her responsibility to implement company rules. In a memorandum dated February 7.000. Sometime in November 2002. Respondent was finally able to submit her written reply on June 4. Rivera. PJI's Corporate Secretary and Chief Legal Counsel. without justifiable excuse. 2003 addressed to Dela Cruz. On the same day. 2002. In the case at bar. on willful breach. with the aid of counsel if she so chooses. Rivera (Rivera) as proof reader. People's Taliba. nor should it appear as a mere afterthought to justify earlier action taken in bad faith or a subterfuge for causes which are improper. “on the ground of loss of confidence” after finding Rivera's “acts and omissions are indicative of fraud and a . It should be genuine and not simulated. On January 10. Loss of trust and confidence stems from a breach of trust founded on a dishonest. respondent was informed of her dismissal from employment. especially in the absence of any showing that she has committed prior infractions in her six years of service to petitioner company before her dismissal. in a letter dated June 21. Nepthalie E. Brion Facts: PJI is a corporation engaged in the publication of People's Journal. As to the Substantial Findings: The loss of trust and confidence must be based not on ordinary breach by the employee of the trust reposed in him by the employer.500 sheets of C25 120 coated paper. There must. respondent did not commit any act which was dishonest or deceitful. 2010. 2003. As such. gather data and evidence. Women's Journal. There was no demonstration of moral perverseness that would justify the claimed loss of trust and confidence attendant to respondent's job. This. Ruiz-Bruno issued a memorandum on the same day to Assistant Purchasing Manager Jean Alvarado (Alvarado). Philippine Journalist. 170 gsm size 23” x 27” from the Nation Paper Products Corporation (NAPPCO) at P6. she does not deserve the penalty of dismissal from employment. thoughtlessly. The most that can be attributed to respondent is that she was remiss in the performance of her duties. a telephone canvass with NAPPCO revealed an offer of P3. the lowest price with quotation was P4. the scheduled hearing was again moved to June 5. and. Respondent failed to appear on the scheduled date but was given the chance to submit a written reply until May 30. but she was not aware that Rivera included LAMCO. in a letter dated January 31. Alvarado submitted her explanation.. 2003 from NAPPCO's Vice-President Kenneth Chong (Chong) to Dela Cruz. No. and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. he attached a letter dated January 9. knowingly and purposely. Rivera canvassed and purchased 68. especially in the absence of any malicious intent or fraud on respondent’s part. shows a price of only P3.91/sheet from Security Commercial although no quotation from the supplier was secured. He received a monthly salary of P25. and Insider. denying that he defrauded or attempted to defraud PJI.[Moreover. 2002. Rivera submitted his written explanation. PJI's Audit Supervisor. the employee would eternally remain at the mercy of the employer. As a result of this letter-explanation.250. it employed respondent Eduardo S. A general description of the charge will not suffice.50 at 30-90 days credit. The canvass showed: a price of P3. 2003. Lastly. the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. “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. 2003. On January 13. A breach is willful if it is done intentionally. Women's Journal implemented a calendar insertion project requiring paper-coated materials. becoming purchasing manager in 1998. another supplier. submitted a report to PJI President Bobby Dela Cruz (Dela Cruz) about the canvass of the price of the Women’s Journal paper requirements. 2002. 2003. consult a union official or lawyer. In December 1978. the burden of proof required in labor cases must be amply discharged. Subsequently.50 a sheet for the total amount of P445.00.00. therefore.” Pending investigation of the matter.000 sheets of this kind of paper with exactly the same specifications. Ruiz-Bruno notified Rivera of the termination of his service effective February 8. illegal or unjustified. 2002 informing respondent of the specific charges leveled against her and giving her the opportunity to be heard and to present evidence in her defense. stating that she signed the canvass sheet as instructed by Rivera. February 16. People's Journal International.12/sheet from Purity Enterprises Co. G. deceitful or fraudulent act.The first written notice to be served on the employees should contain the specific causes or grounds for termination against them. On January 8. Hernandez (Hernandez).40/sheet for PJI's paper requirement. Rivera rose from the ranks over the years. Granting that the purchase was a “rush” request. petitioners deemed it fit to give respondent his separation pay despite their assertion that there is just cause for his dismissal on the ground of habitual absences. is no excuse as a canvass could be done even in a day's time as shown by the audit department’s canvass. thus.50 even at credit terms. 2003. . Executive Vice-President Arnold Banares and Ruiz-Bruno. As we look at the total picture. Rivera failed to perform this duty. but petitioner Rosit offered only his separation pay which respondent refused to receive. This inconsistent stand of petitioners bolsters the fact that they wanted to terminate respondent. for his own reasons. undoubtedly to reflect on paper that a canvass had been made. Instead of improving his work behavior. The Labor Arbiter also found respondent entitled to the payment of commissions by giving credence to the check vouchers presented by respondent as well as attorney’s fees for withholding the payment of commissions pursuant to Article 111 of the Labor Code. Hence this petition. Jurisprudence provides for two essential requirements for abandonment of work to exist. moral and exemplary damages and attorney’s fees. Petitioners contended that when respondent’s absences persisted. Thus. the law requires only that there be at least some basis to justify the dismissal. A few days later. ROSIT. 2001. 2001 when they heard the news concerning respondent’s termination from his job. respondent filed an illegal dismissal complaint praying for the payment of his backwages. he made it appear that he conducted a canvass. it reversed the Labor Arbiters decision in that respondents are found to have illegally dismissed complainant Fernan H. respondent continued to absent himself and sought employment with another company engaged in the same line of business. the time card and payroll presented by petitioners do not show gross and habitual absenteeism and tardiness especially since respondent’s explanation of his three-day absence was not denied by petitioners at the first instance before the Labor Arbiter. a Notice of Termination dated July 30.” On October 14. J. PJI cannot be blamed for losing its trust and confidence in Rivera. material information with financial impact on the purchase transaction. 2002. he settled on one supplier on the pretext that the purchase was certified as a “rush job” by the company's advertising department. FRANCISCO. 2001. he was barred from entering the company premises. Rivera filed a complaint for illegal dismissal against PJI. a co-worker of respondent has stated under oath that. and JOSE LIDO T. Worse than this. He was informed that the company could no longer afford his salary and that he would be paid his separation pay and accrued commissions. resulting in substantial losses to the company. Oddly. on October 24. Francisco. For his own reasons. For loss of trust and confidence to be a ground for dismissal. creating serious damage in the form of unfinished projects. 2001 was later on issued to him. we cannot but conclude that substantial evidence exists justifying Rivera’s dismissal for a just cause – loss of trust and confidence. HELD: NO. to make a real canvass. the Labor Arbiter rendered a Decision holding that respondent was validly dismissed due to his unjustified absences and tardiness. As aptly held by the NLRC. There is no question in our mind that he failed to make a reasonable canvass of the prices of the paper materials required by a company’s special project. On the other hand. Solares. As we previously stated. It was Rivera’s duty as purchasing manager. a meaningful canvass could still have been made. with Rivera playing the principal and most active role. the employee’s deliberate and unjustified refusal to resume his employment without any intention of returning should be established and proven by the employer. A representative sampling of the market certainly would have served the purpose. to wit: (1) the "failure to report for work or absence without valid or justifiable reason" and (2) "clear intention to sever the employer-employee relationship manifested by some overt acts”. 2001. Issue: Whether or not Rivera was dismissed for just cause? Ruling: YES. 2001 not to dismiss him but only to remind and warn him of his excessive absences and tardiness. Upon respondent’s continuous and deliberate failure to respond to these memoranda. respondent was diligent in reporting for work until June 20. Petitioners claimed that they indeed talked to respondent on June 15. On June 15. as evinced by his Time Card covering the period June 1-15. FACTS: Petitioner. however. PJI's audit department conducted a canvass and. DOCTRINE: Jurisprudence provides for two essential requirements for abandonment of work to exist. Rivera did not only fail to canvass the market for the company's paper requirement. thus giving more credence to respondent’s protestation that he was barred and prevented from reporting for work. Further. Petitioners denied having terminated respondent as the latter voluntarily abandoned his work after going on Absence Without Official Leave beginning June 22. If only for his failure to conduct a real canvass. Further. unpaid commissions. with Rosit as its President and CEO. Despite repeated demands. He allowed the purchase of materials at a price considerably higher than the quotations of other suppliers in the market. Inc. Relying on the promise of petitioner Rosit. That Rivera was responsible for concealment and omissions also appears clear to us. No other evidence was presented to show the alleged absences and tardiness. respondent went to the office to receive his separation pay and commissions. In view of the foregoing. and that the material was a special kind of paper readily available from NAPPCO. a company engaged in ship building and ship repair. several memoranda informing him of his absences were sent to him by ordinary mail and were duly filed with the DOLE on August 13. in no time. DEL CASTILLO. ISSUE: Whether or not the CA erred in not ruling that respondent has abandoned his work. under dubious circumstances. he failed to seasonably disclose to PJI. as their supervisor. A scrutiny of the time card and payroll discloses that respondent incurred only three days of absence and no record of tardiness. that a rush job was involved. hired respondent in 1992 as its Yard Supervisor tasked to oversee and supervise all projects of the company. In fact. we are convinced that a pattern of concealment and dishonesty marred the purchase of paper materials for the Women’s Journal’s special project. He did not have to canvass twenty (20) or so suppliers as Rivera put it. The CA affirmed the NLRC’s decision. to a higher purchase cost from his favored supplier. petitioner refused to pay respondent his commissions for the seven boats constructed and repaired under his supervision amounting to P70. 2001. Dela Cruz. separation pay. as noted not only by Rivera. respondent averred that he was unceremoniously dismissed by petitioner Rosit. the supplier of his choice.000. On May 17. 2001. The canvass of prices of production supplies is routine work for any purchasing department. came out with a pricing considerably lower than P6. to wit: (1) the "failure to report for work or absence without valid or justifiable reason" and (2) "clear intention to sever the employer-employee relationship manifested by some overt acts”. vs. had Rivera and his department exerted genuine efforts to undertake one. and that of his department. to enable him to comply with a basic purchase requirement and tie the company. but also by Alvarado. FERNAN H. Hernandez and Ruiz-Bruno. for even a phone canvass would do. to look for prices that would be most advantageous to the company. On appeal to the NLRC. Respondent nonetheless continued to report for work. the employee’s deliberate and unjustified refusal to resume his employment without any intention of returning should be ABANDONMENT HARPOON MARINE SERVICES.clear manifestation of your inability as a Manager to protect the Company's interests. In July 2004. other than respondents’ bare allegation that they were dismissed. NLRC. G. On appeal. which is considered as technical labor. and Lacida instructed them to affix their signatures on various documents. a language that they did not understand. and that petitioner even sent them letters advising them to report for work. Hence. based on the findings of fact of the CA. but to no avail. the CA reversed the NLRC’s ruling and reinstated the Labor Arbiter’s. Sato. There was no proof on how these notices were given to respondent. Calipay and the other complainants alleged in their Position Paper that in the course of their employment. The NLRC opined that illegal dismissal was inconsistent with the prayer for separation pay instead of reinstatement. and respondent Lacida. 2004. the onus probandi rests on the employer to prove that the dismissal of an employee is for a valid cause. 2010 DOCTRINE: Dismissal. respondent Sato worked on May 20. The CA correctly ruled that petitioners failed to present evidence that they sent these notices to respondent’s last known address for the purpose of warning him that his continued failure to report would be construed as abandonment of work. petitioners told Sato that they could no longer afford to pay his wages. NO. Irked by their disobedience. . on July 26. Mere absence is not sufficient. However. NLRC reversed the ruling of the Labor Arbiter in a decision dated July 31. more so if the same is accompanied by a prayer for reinstatement FACTS • On July 16. There must be an unequivocal intent on the part of the employee to discontinue his employment. they were required by petitioners to sign several documents purporting to be employment contracts. Respondents’ filing of the case for illegal dismissal barely four days from their alleged abandonment is totally inconsistent with our known concept of what constitutes abandonment. AUGUST 3. the project engineer of respondents Berdin. In April 2004. 2004 and on June 7. the Labor Arbiter rendered a decision finding that respondents were illegally dismissed from employment. the NLRC ratiocinated that.R. Petitioner filed a complaint for illegal dismissal and several other protests against private respondents. petitioner corporation claims that respondent Sato committed unexplained absences on May 20. Respondent Berdin was hired by petitioners in March 1991 as a steelman/laborer. Time and again. however. despite being stamped as received. respondents abandoned their work when they failed to report for work starting on July 22. SATO. and that respondents’ individual complaints opted for the payment of separation pay instead of reinstatement. J. they were given their weekly wages. HELD: NO. 18. the contention of petitioner must fail. and 23. no time record and payroll documents were presented by petitioner corporation. There must be an unequivocal intent on the part of the employee to discontinue his employment. On July 27. was hired in February 1997 as a steelman. 166411. Lacida. this petition. On July 22. NACHURA. petitioner corporation alleges that they failed to report for work starting on July 22. ELPIDIO CALIPAY VS. TRIANGLE ACE CORPORATIONAND JOSE LEE G. FACTS: Respondent Sato was hired in October 1990 by petitioner as a grader operator. Petitioner corporation maintained that respondents are still welcome. For abandonment to exist. Parantar. 2005. Mere absence is not sufficient. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. 2011 E. Petitioner corporation sent letters advising respondents to report for work. 2004. 2004. on July 24. June 18 and 23. 2004. Petitioner Corporation failed to prove that respondents were dismissed for just or authorized cause. They refused to sign the documents because they were written in English. they were not allowed to enter the work premises. if they desire to work. However. 182070 February 16. 2004. The employer has the burden of proof to show the employee's deliberate and unjustified refusal to resume his employment without any intention of returning. 2004. an inspection team from the SSS went to petitioner’s office to check its compliance with the SSS law. found difficulty in finding a job because he had been blacklisted in other construction companies and was prevented from entering the project sites of petitioners. they failed to present a written notice of dismissal. the project engineer terminated their employment. and he was advised to look for employment in other construction companies. On the same date. In the case at bar. the wages that were paid to them were short of three (3) days’ worth of wages. Jr.established and proven by the employer.R. 1999. This was based on the weekly time record and payroll of respondent Sato that were presented by petitioner corporation in its appeal before the NLRC. Sato discovered that petitioner corporation had not been remitting his premium contributions to the SSS. he was removed as a grader operator and made to perform manual labor. In other words. 24. but they refused. However. and (b) that there must have been a clear intention to sever the employeremployee relationship manifested by some overt acts. When Sato reminded petitioner about this. as penalty for their refusal to sign the documents. CONSTRUCTION CORPORATION vs. respondents filed their respective complaints with the Regional Arbitration Branch of Cebu City for illegal dismissal. In an illegal dismissal case. ANANIAS P. was hired in March 2001 as a laborer. Sr. According to petitioners. The employer has the burden of proof to show the employee's deliberate and unjustified refusal to resume his employment without any intention of returning.G & I. 2004. and 25. Petitioner corporation failed to show overt acts committed by respondents from which it may be deduced that they had no more intention to work. The following day. et al. Petitioners failed to prove that it was respondent who voluntarily refused to report back for work by his defiance and refusal to accept the memoranda and the notices of absences sent to him. Thus. respondent Parantar. 2004. No. and (b) that there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. In reversing the decision of the Labor Arbiter. the memoranda do not bear any signature of respondent to indicate that he actually received the same. it is essential (a) that the employee must have failed to report for work or must have been absent without valid or justifiable reason. it is essential (a) that the employee must have failed to report for work or must have been absent without valid or justifiable reason. However. the Supreme Court has held that abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal. 2006. thirteenth month pay. it was duly proved that the reason why respondents failed to report for work was because petitioner corporation barred them from entering its construction sites. such as tilling the land in a private cemetery and/or digging earthworks in petitioner corporation’s construction projects. ISSUE: Whether or not the CA erred in not ruling that respondents have abandoned their work. abandonment. they were and EDSEL GALEOS DOCTRINE: For abandonment to exist. At the start of their employment. and service incentive leave pay. Neither was there any other cogent evidence that these were properly received by respondent. With regard to respondents Berdin. Hence. and Parantar. holiday pay. underpayment of wages. On respondent Sato’s alleged absences on May 24 and 25 and on June 7. It is a settled rule that failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment. On appeal. Pulgar also alleges that PRRM’s representatives removed his personal properties and records from his office. 1997. asking him to explain these findings. the decision appeal from was modified. On appeal by petitioner to the CA: the CA dismissed the petition due to failure to timely file his appeal with the NLRC. they were required by Lee to work for nine (9) hours a day. and there is full compliance with the law regarding payment of wages and other benefits due to their employees. from PRRM’s standpoint. was sent by mail but he refused to receive the same. together with a memorandum. He explained that as field manager. and subsequently. and several other complaints.The prayer for reinstatement is made only in the Position Paper that was later prepared by his counsel. a memorandum dated November 17. Pulgar no longer reported to work. They claimed. requiring him to explain why his services should not be terminated. ordering the respondent to reinstate the complainants and to pay them full back wages plus attorney’s fee. as long as the use was devoted to the implementation of TBFO projects. HELD: Yes. 1998. substantial evidence presented by PRRM that proves otherwise. private respondents countered that the termination of Calipay and the other complainants was for a valid or just cause and that due process was observed. Pulgar filed a complaint against PRRM on April 3. Pulgar failed to provide any other details on how he was prevented from entering the premises. on March 17. PRRM. 1998 was issued terminating Calipay’s employment on the ground of abandonment of work. In the present case. 1997. Thus. petitioner Calipay had failed to report for work for unknown reasons. however. 1997 . Pulgar was the manager of PRRM’s branch office – the Tayabas Bay Field Office (TBFO) – in Quezon Province. they performed various kinds of work. HELD Yes. conducted an investigation into alleged financial anomalies committed at the TBFO. 1997. In other words. there were instances when he used the funds intended for one project to sustain the activities of other projects. that Calipay was on absence without leave (AWOL) status from November 2. The Labor Arbiter handling the case dismissed the complaint for lack of merit.[8] but his letter went unanswered. non-governmental organization. His continued absences without the private respondents’ approval constituted gross and habitual neglect which is a just cause for termination under Article 282 of the Labor Code. petitioner didnot ask for reinstatement in the complaint form. Solis stated that part of the funds allotted to the TBFO was missing or not properly accounted for. PRRM maintains that while the investigation was ongoing. Pulgar was still its employee when he filed the illegal dismissal case against the organization. among others. 1997. he was not allowed to enter the premises of the organization. According to him. Respondent filed a MR which the NLRC granted. we simply cannot use that one act to conclude that Pulgar did not terminate his employment with PRRM. and April 1-15.not given any specific work assignment. Pulgar went on leave on March 3-10. As a result. 169227. VirgilioPulgar. Thereafter. When Pulgar was reassigned to PRRM’s central office. for failure to explain his side. the Court arrives at the conclusion that the filing of the complaint for illegal dismissal appears only as a convenient afterthought on the part of petitioner and the other complainants after they were dismissed in accordance with law. But aside from making this allegation. Moreover. in the present case. March 2025. 1997. another memorandum dated December 11. through Goyena Solis (Solis). After the lapse of his last leave on April 15. which he personally filled up and filed with the NLRC. G. when Pulgar filed an illegal dismissal complaint on April 3. In addition. PRRM was therefore surprised to learn that Pulgar had filed an illegal dismissal case on April 3.R. petitioner filed his complaint more than one year after his alleged termination from employment. No. In their Position Paper. placed them in boxes and kept them in storage. non-profit. Pulgar tells another tale. with a break of one hour at 12:00 noon. Pulgar claims that he was forced to file an illegal dismissal complaint against PRRM while he was on leave because he was not allowed to enter the office premises on March 31. The report also stated that some of the receipts that the TBFO submitted to liquidate the organization’s financial transactions were fictitious and manufactured. 2010 DOCTRINE: Although under normal circumstances. leading PRRM to believe that Pulgar had abandoned his work to evade any liability arising from the investigation. July 5. FACTS: PRRM is a non-stock. the LA’s decision was reinstated and affirmed. 1998 up to November 17. he was still on leave from the organization.This is an indication that petitioner never had the intention or desire to return to his job Philippine Rural Reconstruction vs.[5] Pulgar admitted that TBFO’s reported expenses did not reflect its actual expenses. he submitted a letter to PRRM to complain that he was not given the right to confront and question Solis. for illegal dismissal ISSUE: Whether or not the petitioner had abandoned his work or was not constructively dismissed from employment. 1997. an employee’s act of filing an illegal dismissal complaint against his employer is inconsistent with abandonment. Was he physically prevented from entering the premises by a security guard? Did the senior officers of PRRM refuse to let him into the office when he reported to work? We are left to guess Believing he was constructively dismissed by PRRM’s actions. In the instant case. ISSUE Whether or not the petitioner had abandoned his work. . there is no unfair labor practice because there is no union. also denied the MR of petitioner. 1998. and in the process ignore the clear. 1997. on March 31.[4]The PRRM management sent Pulgar a copy of the report. On appeal to the NLRC. In her investigation report. he presumed he had the discretion to determine when and how the funds would be used. R. 2003 from SLU wherein she was informed that she failed to meet the required minimum evaluation rating for faculty members during the 5 year period beginning school year 1998 until 2003. The petitioners gave him a P3. 1997. the same contemplates an action made subsequent to dismissal. she filed a complaint for illegal dismissal with prayer for reinstatement and damages. 1997 raises doubt as to his purported ban from the premises. Thus we cannot conceive how private respondent could abandon her job and give up the benefits she has earned from years of hard work. he still filed his application for leave for April 1-15. but no longer gave him any salary after that. FACTS: Roberto Obias was hired by the petitioners CRC Agricultural Trading and Rolando Catindig as a driver and offered him to stay inside the company’s premises. While Pulgar claims he was constructively dismissed when he was barred from the premises on March 31. Sometime in March 2003. 2010 Carpio-Morales. manifested through overt acts.00. 1997. Cobarrubias never responded to any of these letters. like Obias. During the first semester.000. Obias filed a complaint for illegal dismissal against petitioners CRC Agricultural Trading and its owner. 2003. December 23. To constitute abandonment. 1997. FACTS: Evangeline Cobarrubias was a faculty member at St. and in the process ignore the clear. 177664. 2003 was sent asking her to explain in writing why she should not be deemed to have abandoned her work and another final letter dated November 28. More importantly. Inc. Petitioner never ever replied to those notices. in the present case. While the filing of a complaint with a prayer for reinstatement negates an intention to sever the employer-employee relationship. 2003. March 17. 2003 sprang. before the Labor Arbiter on June 22. Petitioner was. reason dictates that he would no longer bother to apply for a leave of absence from PRRM for April 1-15. an employee’s act of filing an illegal dismissal complaint against his employer is inconsistent with abandonment. Thus. In the same letter.: DOCTRINE: Petitioner forgets that her complaint for "illegal dismissal" which she filed on June 5. 2004.: DOCTRINE: The jurisprudential rule is that abandonment is a matter of intention that cannot be lightly presumed from equivocal acts. she was dismissed for abandonment through a letter dated December 6. not from her dismissal on December 6. if Pulgar truly believed that he had already been constructively dismissed on March 31. a letter dated November 12. to sever the employer-employee relationship. He also alleged that the petitioners did not send him a notice of termination. petitioners). 2003. thus. Whether or not there was abandonment of work despite the pendency of illegal dismissal filed by the petitioner against the respondent. thus. Obias and his family moved out of the petitioners’ compound and relocated to a nearby place. No. substantial evidence presented by PRRM that proves otherwise. No. we simply cannot use that one act to conclude that Pulgar did not terminate his employment with PRRM. J. National Labor Relations Commission which held: . At all events. a letter dated November 8. A letter dated October 13. The petitioners argued that Obias was a seasonal driver and that he had abandoned his work and that an employee who had abandoned his work. citing Del Monte Philippines. J. Still later. and (2) a clear intent. for five times. is no different from one who voluntarily resigned ISSUE: Cobarrubias v. 2003 was again sent to her urging her to report for work until November 10. The fact alone that Pulgar was able to return to the office to file his application for leave for April 1-15.00 on April 15 and 30. petitioner contends that her filing of a complaint for illegal dismissal was a manifestation of her desire to return to her job and negated any intention to sever the employer-employee relationship. Petitioner forgets that her complaint for "illegal dismissal" which she filed on June 5. but did not give him service incentive leave. Inc. . respectively. While the filing of a complaint with a prayer for reinstatement negates an intention to sever the employer-employee relationship. v. Rolando B. holiday pay. . two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason. The fact that he did belies his contention that he believed he had already been constructively dismissed on March 31. leaving us to doubt the veracity of this allegation. 2009 Brion. Saint Louis University. still paid him P700. Petitioner’s justification for her failure to respond to the notices – that her acceptance of the offer could be constituted as a waiver of her claims – is not indeed a valid excuse. She received a letter dated May 23. Catindig (collectively. 2003 due to abandonment but.00 and P500. the petitioners ordered him to have the alternator of one of its vehicles repaired. The petitioners.the particulars of how PRRM prevented Pulgar from entering the premises. National Labor Relations Commission G. 2004. As there was no reply from Cobarrubias. Cobarrubias attempted to report for work but she was not given teaching load because she was on forced leave. she was advised to inform in writing her readiness and availability to teach during the second semester on or before September 12. not from her dismissal on December 6. Louis University (SLU) in Baguio City. her filing of an illegal dismissal case contradicts petitioner’s allegations that she abandoned her job. and overtime pay. the same contemplates an action made subsequent to dismissal. He claimed that the petitioners paid him a daily wage of P175. 2003 due to abandonment but. 2003 sprang. from her suspension during the first semester of school year 2003-2004. on June 5. 1997. from her suspension during the first semester of school year 2003-2004. She was advised that a teaching load had already been prepared for her.R. HELD: Yes. Finally. she was placed on a forced leave during the first semester of school year 2003-2004 which would result to the suspension of her benefits following the provision on the CBA. The latter suspected that the receipts were falsified and stopped talking to him and giving him work assignments. however. G. notified in writing by respondent to resume teaching for the second semester of school year 2003-2004 following the service of her suspension during the first semester. 2003 giving her opportunity to explain why she should not be terminated due to abandonment. rest day pay. 2003.00 loan to help him build a hut for his family. 176717. 1997. As a result. CRC Agricultural Trading vs. Although under normal circumstances. ISSUE: . 2003 was sent to Cobarrubias informing her that a 24-unit workload was prepared for her for the second semester. He brought the vehicle to a repair shop and subsequently gave the petitioners two receipts issued by the repair shop. It is true that. in this case. he alleged that respondents submitted their application for reemployment but. . or is used to defeat the rights of labor. Bonifacio Cu entered into a transaction. a meeting was called by petitioner’s President and General Manager. March 30. 2004 strongly speaks against the petitioners’ charge of abandonment. however. We sustain the uniform factual finding of both the NLRC and the CA that no actual sale transpired and. stating that. aims to prevent further financial drain upon an employer who can no longer pay his employees since business has already stopped. 1. Thus. Moreover. the employees of petitioner. we also held therein that the sale or disposition must be motivated by good faith as a condition for exemption from liability. the new owners opted not to hire respondents. Abandonment of work. However. and (2) a clear intent. Inc. plus damages and attorney’s fees.: “Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts. petitioner sent individual letters to its employees. respondents filed with the Labor Arbiter (LA) complaints for illegal dismissal. Respondests averred that. SolidBank Corporation vs. is a just cause for the termination of employment under paragraph (b) of Article 282 of the Labor Code. Inc. Inc. Clearly. The employer bears the burden of showing a deliberate and unjustified refusal by the employee to resume his employment without any intention of returning. since it constitutes neglect of duty. wherein respondents were introduced to Alfredo Perez. 2003. On February 28. 2010. including respondents. 2002. LA rendered a Decision ruling that respondents were validly terminated from employment as a result of petitioner’s decision to cease its banking operations. 178397. the successor-employer is deemed to have absorbed the employees and is held liable for the transgressions of his or her predecessor. underpayment of separation pay. as an authorized cause for termination of employment. Peralta. petitioner terminated the employment of respondents. Bonifacio Cu wrote Alfredo Perez relative to the latter’s failure to comply with their agreement and the decision to rescind the sale involving petitioner.: FACTS: Joselito Sarmiento and Ricardo Catimbang worked as a bus inspector of petitioner Peñafrancia Tours and Travel Transport. G. The NLRC ruled that the closure of a business is an authorized cause sanctioned under Article 283 of the Labor Code and one that is ultimately a management prerogative. and the latter could not be compelled to absorb petitioner’s former employees since the same was not part of the deal. inspired by compassionate justice. (SCBC). While respondents’ case for illegal dismissal was pending before the Labor Arbiter (LA). petitioner decided to cease its commercial banking operations and forthwith surrendered to the Bangko Central ng Pilipinas its expanded banking license. manifested through overt acts. The LA. represented by its President and General Manager. denominated as a “Deed of Sale with Assignment of Franchise (By Way of Dation in Payment). learned that. Willy Deterala. the respondent’s filing of the complaint for illegal dismissal on June 22. But.Whether or not there was abandonment of work. the petitioners did not adduce any proof to show that the respondent clearly and unequivocally intended to abandon his job or to sever the employer-employee relationship. However. Sarmiento and Ricardo S. J. J. and Quitclaim. On the part of petitioner. NLRC rendered a Decision affirming the findings of the LA that respondents were validly terminated. To constitute abandonment. 165951. Labor Arbiter ruled in favor of Petitioner.” CLOSURE OF BUSINESS Peñafrancia Tours and Travel Transport. October 20. Their services were terminated on the ground of Petitioner’s alleged irreversible business losses. 2000. As we held in Samarca v. Respondents... the operative act is still the employee’s ultimate act of putting an end to his employment. National Labor Relations Commission. v. informing said office of the termination of its employees. in Manlimos. HELD: No. as provided in Article 283 of the Labor Code. we held that a change of ownership in a business concern is not proscribed by law. individually signed a “Release. usually due to financial losses. Catimbang. Bonifacio Cu. Bonifacio Cu. there is no closure or cessation of business that can serve as an authorized cause for the dismissal of respondents. having allegedly bought the same. advising them of its decision to cease operations and informing them that their employment would be terminated. as such. As a result. et al. until October 2002. On July 31. NLRC. He also argued that the matter of rehiring respondents rested on the sound discretion of its new owners. two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason. Both parties appealed the LA’s Decision to the National Labor Relations Commission (NLRC). FACTS: Sometime in May 2000. reversed said decision. and cash equivalent of earned and accrued vacation and sick leaves as a result of their dismissal. however. 2010.A. No. Bonifacio Cu continued to operate petitioner bus company.” with Southern Comfort Bus Co. petitioner sent to the Department of Labor and Employment a letter dated July 28. the management of the company shall revert to its former President. 2000. awarded financial assistance of one month’s salary to respondents.. Arc-Men Industries. vs. file a complaint for illegal dismissal. there must be clear proof of deliberate and unjustified intent to sever the employer-employee relationship. a notice was issued by Edilberto Perez to all employees of petitioner. effective February 11.R. Lest petitioner forget. et al. ISSUE: Whether respondents were legally terminated from employment by reason of the sale of the business enterprise and the consequent change or transfer of ownership/management. In the present case. including respondents. thereafter. et al. The jurisprudential rule is that abandonment is a matter of intention that cannot be lightly presumed from equivocal acts. to sever the employeremployee relationship. as invoked by petitioner. On this ground. Closure of business. G. HELD: YES Closure of business is the reversal of fortune of the employer whereby there is a complete cessation of business operations and/or an actual locking-up of the doors of the establishment. To constitute abandonment. 2003. or the deliberate and unjustified refusal of an employee to resume his employment. however.867 of its employees would be terminated. what petitioner apparently made was a transfer of ownership.R. Closure or cessation of operation of the establishment is an authorized cause for terminating an employee. they filed a complaint for illegal dismissal on November 26. Joselito P. NLRC and C. it is illogical for an employee to abandon his employment and. in the middle of October 2002. Waiver. On July 25. 2000. after evaluation. where the charge of ownership is done in bad faith. the owner of ALPS Transportation. several days after their termination.” On September 27. there is no successor-employer because there was no actual change of ownership. NACHURA. 2000. As a result of petitioner’s decision to cease its operations. Thereafter. No. sometime in March 2003. Upon receipt of their separation pay. as the new owner of petitioner. Petitioner granted to its employees separation pay equivalent to 150% of gross monthly pay per year of service. Inc. validly dismissed Nestor Culili by reason of redundancy. As part of the first phase. Due to business troubles and losses. Inc. Hence. an employee who has been dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not entitled to separation pay. HELD: Under Article 283 of the Labor Code. Among the requisites of a valid redundancy program are: (1) the good faith of the employer in abolishing the redundant position. unfair labor practice. the grant of separation pay or some other financial assistance may be allowed to an employee dismissed for just causes on the basis of equity. such as but not limited to: preferred status. However. The second phase of the program necessitated the abolition. ETPI offered to its employees who had rendered at least fifteen years of service. whichever is higher. modified the LA’s Decision by increasing the amount of financial assistance to two month’s salary out of compassionate justice. however. in case of cessation of operations. ISSUE: WON the respondents are entitled to a two month’s salary out of compassionate justice. under RA. and (2) fair and reasonable criteria in ascertaining what positions are to be declared redundant. petitioner has been ordered to pay respondents an additional amount. 165381. CA rendered a Decision reversing the Decision of the NLRC. or dropping a particular product line or service activity previously manufactured or undertaken by the enterprise. 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. ISSUE: Whether or not Eastern Telecommunications Philippines. Among the requisites of a valid redundancy program are: (1) the good faith of the employer in abolishing the redundant position. 2011 Leonardo-De Castro. The reason that the law does not statutorily grant separation pay or financial assistance in instances of termination due to a just cause is precisely because the cause for termination is due to the acts of the employee. feasibility studies/ proposal on the viability of the newly created positions. No. February 9. and money claims before the Labor Arbiter. and (b) cash equivalent of earned and accrued vacation and sick leaves.R. petitioner then appealed to the CA. this Court. which consisted of the option to voluntarily retire at an earlier age and a retirement package equivalent to two and a half (2½) months’ salary for every year of service. The CA held that Culili’s position was validly abolished due to redundancy. however.The NLRC. However. In deciding which positions to retain and which to abolish. As such. Inc. only petitioner Culili rejected the offer. On appeal. Of said employees. job description and the approval by the management of the restructuring. specifically questioning the grant of financial assistance to respondents. the NLRC affirmed the Labor Arbiter’s decision with a modification to exemplary and moral damages. inspired by compassionate and social justice. HELD: No. however. among others. Culili filed a complaint against ETPI and its officers for illegal dismissal. A review of jurisprudence relating to the application of “compassionate and social justice” in granting financial assistance in labor cases shows that the same has been generally used in instances when an employee has been dismissed for a just cause under Article 282 of the Labor Code and not when an employee has been dismissed for an authorized cause under Article 283. has in the past awarded financial assistance to dismissed employees when circumstances warranted such an award. G. ETPI filed a petition for certiorari with the CA. due to interconnection problems with PLDT. The CA shared the view of the LA. which partially granted its petition. The Court also held that the following evidence may be proffered to substantiate redundancy: the new staffing pattern. to establish landlines in Metro Manila and certain provinces. such as but not limited to: preferred status. this petition. was a telecommunications company and an authorized IGF operator. After a series of negotiations with the Eastern Telecommunications Employees’ Union (ETEU). In such instances. poor subscription and cancellation of subscriptions. ETPI was forced to halt its roll out of one hundred twenty-nine thousand (129.000) landlines already allocated to a number of its employees. and (2) fair and reasonable criteria in ascertaining what positions are to be declared redundant. this Court finds that the award of financial assistance is bereft of legal basis and serves to penalize petitioner who has complied with the requirements of the law. 7925 and EO No. Among the departments abolished was the Service Quality Department. efficiency. Respondent Eastern Telecommunications. and other business difficulties. petitioner paid respondents the following: (a) separation pay computed at 150% of their gross monthly pay per year of service. Based on Article 283. petitioner had gone over and above the requirements of the law. transfer and merger of a number of ETPI’s departments. another employee already with the Business and Consumer Accounts Department. Inc. and seniority. and seniority. The 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.” The CA affirmed such grant also out of “compassionate justice” and as a form of “equitable relief” for the employees who were suddenly dismissed due to exigencies of business. efficiency. After a thorough consideration of the circumstances at bar. A position becomes redundant when it is rendered superfluous by any number of factors such as over-hiring of workers. the employer is only required to pay his employees a separation pay of one month pay or at least one-half month pay for every year of service. Clearly. In the case at bar. an employer cannot simply declare that it has become overmanned and dismiss its employees without producing adequate proof to sustain its claim of redundancy. Despite this. That is all that the law requires. As such ETPI was required. as a form of financial assistance. The Labor Arbiter rendered a decision finding ETPI guilty of illegal dismissal and unfair labor practice. The LA awarded the financial assistance out of “compassionate justice. (ETPI) as a Senior Technician in the Customer Premises Equipment Management Unit of the Service Quality Department. REDUNDANCY Culili v. ETPI was thus compelled to implement a RightSizing Program. J. an employer cannot simply declare that it has become overmanned and dismiss its employees without producing adequate proof to sustain its claim of redundancy. decrease in volume of business. ETPI . As a result. Eastern Telecommunications Philippines. ETPI was upfront with its employees about its plan to implement a Right-Sizing Program. on the other hand. FACTS: Petitioner Nelson A. an employer may terminate an employee due to redundancy. Aggrieved by the NLRC Decision. equivalent to one month’s salary. In the case at bar. Culili was employed by Eastern Telecommunications Philippines. Culili’s position was abolished due to redundancy and his functions were absorbed by Andre Andrada. Although by way of exception. 109. However. the Special Retirement Program.: DOCTRINE: The determination of whether or not an employee’s services are still needed or sustainable properly belongs to the employer.102 employees qualified to avail of the program. No. As a general rule. this petition. FACTS: While serving as Transportation Services Manager for petitioner Coca-Cola Bottlers Philippines. provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious act. Inc. decreased volume of business. In other words. Hence. 170464 July 12. If Culili’s position were indeed indispensable to ETPI. There being no authorized cause for the termination of Del Villar’s employment. Del Villar’s poor employee performance is irrelevant as regards the issue on redundancy. and not because the employee unsatisfactorily performed the duties and responsibilities required by his position. Pineda then served as the Executive Assistant in the Business Logistic Directorate in charge of the Refrigeration Services of the Company. the NLRC reversed such decision. and superfluity of a position or positions may be the outcome of a number of factors. LAMBERT PAWNBROKERS and JEWELRY CORPORATION vs. ETPI did not abolish the functions performed by Culili as a Senior Technician. It must produce adequate proof of such redundancy to justify the dismissal of the affected employees. it is not enough for a company to merely declare that it has become overmanned. Inc. Meanwhile. a position is redundant where it is superfluous. Redundancy arises because there is no more need for the employee’s position in relation to the whole business organization. while Del Villar as Pineda’s Staff Assistant. alleging that his position was no longer necessary or was considered redundant due to the reorganization of the Business Logistic Directorate. exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Natale J. In this case however. on November 11. J DOCTRINE: The determination that the employee's services are no longer necessary or sustainable and. No. Redundancy is one of the authorized causes for the dismissal of an employee pursuant to Article 283 of the Labor Code. As such an employer may proffer "new staffing pattern. to abolish that one position which it needed the most. Di Cosmo. which was then trying to save its operations. The determination that the employee's services are no longer necessary or sustainable and. 2011. Del Villar filed with the Arbitration Branch of the NLRC. Compliance with the required notices would have also established that the Company abolished Del Villar’s position in good faith. ISSUE: Whether or not respondent Angel U. a complaint against the Company for illegal demotion and forfeiture of company privileges. Furthermore. overpricing the trucks purchased by the Company by as much as P70. one hundred twelve (112) employees were redeployed and nine (9) positions were declared redundant. detailing an alleged fraudulent scheme undertaken by certain Company officials in conspiracy with local truck manufacturers. the Company embarked on a reorganization of the Business Logistic Directorate. The wisdom or soundness of this judgment is not subject to discretionary review of the Labor Arbiter and the NLRC. therefore." Thus. The wisdom or soundness of this judgment is not subject to discretionary review of the Labor Arbiter and the NLRC. Thus. In the same Report. The functions of that position were then added to another employee whose functions were broad enough to absorb the tasks of a Senior Technician. as part of the conspiracy. Del Villar implicated San Juan and Jose L. Furthermore. Leonardo-De Castro. job description and the approval by the management of the restructuring" as evidence of redundancy.chose on the basis of efficiency. del Villar submitted a Report dated January 4. 1996 to the Company President. provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious act. but also the existence of redundancy in the position of a Senior Technician. Neither did the Company present proof that it had complied with the procedural requirement in Article 283 of prior notice to the Department of Labor and Employment (DOLE) of the termination of Del Villar’s employment due to redundancy one month prior to May 31. then it would be absurd for ETPI. for purposes of the Labor Code.00 each. properly terminable for being redundant is an exercise of business judgment of the employer. . No. no other evidence was presented by the Company. The records show that ETPI had sufficiently established not only its need to reduce its workforce and streamline its organization. job description and the approval by the management of the restructuring" as evidence of redundancy.R. Contrary to Culili’s assertions that ETPI could not do away with his functions as long as it is in the telecommunications industry. or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. therefore. What ETPI did was to abolish the position itself for being too specialized and limited. among other Company officials. Del Villar continued to receive the same salary as Transportation Services Manager. Pineda. On appeal. HELD: YES. feasibility studies/proposal. 1998. versatility and flexibility. 2010 Del Castillo. on the viability of the newly created positions. The notice to the DOLE would have afforded the labor department the opportunity to look into and verify whether there is truth as to the claim of the Company that Del Villar’s position had become redundant "with the implementation of new distribution systems. In 1996. such as overhiring of workers. it is not enough for a company to merely declare that it has become overmanned. Villar G. Coca Cola Bottlers. Succinctly put. Del Villar was illegally dismissed. economy.. then he was illegally dismissed. Coca Cola actually terminated Del Villar’s services effective May 31.: DOCTRINE: It must be shown that the function is superfluous or that the business was suffering from a serious downturn that would warrant redundancy. but his car and other privileges were withdrawn and he spent his time at his new post sitting "at a desk with no meaningful work whatsoever. J. in ETPI’s new table of organization. It is inconceivable that ETPI would effect a company-wide reorganization of this scale for the mere purpose of singling out Culili and terminating him. Redundancy. 1996. As such an employer may proffer "new staffing pattern. 165381. utilization of improved operational processes. The Labor Arbiter ruled in favor of Del Villar. February 9. Although as the Staff Assistant of the Corporate Purchasing and Materials Control Manager.000. In other words. It must produce adequate proof of such redundancy to justify the dismissal of the affected employees. and functional reorganization" of the Company. v.R. properly terminable for being redundant is an exercise of business judgment of the employer. on the viability of the newly created positions. Del Villar filed a petition for certiorari with the CA which ruled in this favor. HELEN BINAMIRA G. other than its own bare and self-serving allegation that Del Villar’s position as Staff Assistant of Corporate Purchasing and Materials Control Manager had already become redundant. 1998. Jr. Respondent Angel U. As a result Pineda was appointed as the Corporate Purchasing and Materials Control Manager. feasibility studies/proposal. 1998. In fact. Whether or not there was a valid dismissal based on redundancy HELD: A mere decline in gross income cannot in any manner be considered as serious business losses. and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. the National Electrification Administration and the NPC.00. no written notices were served on the employee and the DOLE prior to the implementation of the retrenchment.000. There was also no showing that petitioners adopted other cost-saving measures before resorting to retrenchment. J. In their Position Paper. or only if expected. are not merely de minimis. One necessary consequence of the reorganization was the displacement of employees from the Department of Energy. Helen received a letter from Lim terminating her employment effective that same day. – National government employees displaced or separated from the service as a result of the restructuring of the [electric power] industry and privatization of NPC assets pursuant to this Act. Moreover. HERRERA v NATIONAL POWER CORP. seasonal fluctuations. It should be substantial. the Statement of Income and Expenses for the year 1997-1998 submitted by the petitioners was prepared only on January 12. she claimed that there was no proof that the company was suffering from business losses. but substantial. Congress provided in Section 63 of the EPIRA. exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the enterprise. Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees. industrial depression. and is recognized by Article 283 of the Labor Code. 63. 166570 December 18. The losses must be supported by sufficient and convincing evidence. To effect a valid retrenchment. the Energy Regulatory Board. It is a management prerogative resorted to avoid or minimize business losses. Whether or not there was a valid dismissal based on retrenchment 2. There is no evidence at all that the company was suffering from business losses. petitioners merely alleged a sharp drop in its income in 1998 from P1million to only P665. rules or regulations or be 1. SEC. In its Statement of Income and Expenses. serious and real. the grant of both separation pay and retirement benefits violates the constitutional proscription on additional compensation. Helen thus filed a case for illegal dismissal against petitioners docketed as NLRC RAB-VII CASE NO. or automation. such as over hiring of workers. The corporation suffered a marked decline in profits as well as substantial and persistent increase in losses. 9136 was enacted on June 8. 2. This is not the business losses contemplated by the Labor Code that would justify a valid retrenchment. G. there is no proof that the essential requisites for a valid redundancy program as a ground for the termination of the employment of respondent are present.00. Finally. and (5) the employer uses fair and reasonable criteria in ascertaining who would be retrenched or retained. the employer must comply with the following requisites: (1) written notice served on both the employees and the DOLE at least one month prior to the intended date of termination of employment. There was no showing that the function of respondent is superfluous or that the business was suffering from a serious downturn that would warrant redundancy considering that such serious business downturn was the ground cited by petitioners in the termination letter sent to respondent. that they would be incurring substantial losses.FACTS: Lambert Pawnbrokers and Jewelry Corporation – Tagbilaran Branch hired Helen as an appraiser in July 1995 and designated her as Vault Custodian in 1996.R. or during lulls occasioned by lack of orders. A redundant position is one rendered superfluous by any number of factors. In this case. 01-0003-99-B alleging that she was dismissed without cause and the benefit of due process. Under these conditions. No. It is resorted to during periods of business recession. FACTS: RA No. Separation Benefits of Officials and Employees of Affected Agencies. NO. the employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business.On September 14. however. Helen received her notice only on September 14. its gross income for 1998 dropped from P1million toP665. In this case. 1998. For the implementation of a redundancy program to be valid. To soften the blow from the severance of employment. decreased volume of business. on the other hand. the day when her termination would supposedly take effect. are reasonably imminent as perceived objectively and in good faith by the employer. petitioners asserted that they had no choice but to retrench respondent due to economic reverses. Redundancy. She claimed that she was a mere casualty of the war of attrition between Lim and the Binamira family. 1999. ISSUES: 1. shall be entitled to either a separation pay and other benefits in accordance with existing laws. the date of Helen’s retrenchment. This is in clear violation of the Labor Code provision which requires notice at least one month prior to the intended date of termination. sustained and real. in their Position Paper. Thus.000. 2001 to provide a framework for the restructuring of the electric power industry. . (2) payment of separation pay equivalent to at least one month pay for every year of service. The normal method of discharging this is by the submission of financial statements duly audited by independent external auditors. the following elements must be present: (1) the retrenchment is reasonably necessary and likely to prevent business losses which. dropping of a particular product line previously manufactured by the company.: DOCTRINE: Absent clear and unequivocal statutory authority. 2009 DEL CASTILLO. They also did not use any fair and reasonable criteria in ascertaining who would be retrenched. (3) the employer pays the retrenched employee separation pay in an amount prescribed by the Code. NO. conversion of the plant to a new production program. if already incurred. including the privatization of NPC’s assets and liabilities. (2) the employer serves written notice both to the employee/s concerned and the DOLE at least one month before the intended date of retrenchment. for a separation package superior than those provided under existing laws. 1998. (4) the employer exercises its prerogative to retrench in good faith. or phasing out of a service activity previously undertaken by the business. Lim cited business losses necessitating retrenchment as the reason for the termination. it is highly improbable that the management already knew on September 14. (3) good faith in abolishing the redundant positions. shortage of materials. all the employees who held permanent positions at the NPC as of June 26. ‘separation pay and retirement’ refer to only one benefit. Section 8 of Article IX(B) of the Constitution provides that "[n]o elective or appointive public officer or employee shall receive additional. A separated or displaced employee. Natalia C. Section 3(f) of the Implementing Rules and Regulations of RA No. Rule 33. etc. 00-1957. In the first case. the CSC interpreted the phrase "separation pay and retirement" in RA No. 9136 are still entitled to receive retirement benefits under CA No. second. et al. 183390. In prior decisions. Thus. 6607 and RA No.: FACTS: The Personnel and Administration Manager of Plastimer Industrial Corporation (Plastimer) issued a Memorandum informing all its employees of the decision of the Board of Directors to downsize and reorganize its business operations due to withdrawal of investments and shares of stocks which resulted in the change of its corporate structure. double. 6656 as follows: x x x While the aforequoted provision of law used the conjunctive "and" between the words "separation pay" and "retirement". 9136 precludes the receipt of both separation and retirement benefits. The employees of Plastimer were served written notices of their termination effective 13 June 2004. Petitioners claim that Section 9 of RA No. as a result of the restructuring of the electric power industry or privatization of NPC assets pursuant to the act. ISSUE: Whether or not NPC employees who were separated from the service because of the reorganization of the electric power industry and who received their separation pay under RA No. i. as amended. Indeed. In CSC Resolution No. G.24 the CSC declared: The aforequoted provision of law says: ‘separation pay and retirement and other benefits under existing laws’. Statutory Construction. separation due to reorganization gives rise to two possible scenarios: first. 186. The affected employees. 2011. if entitled thereto. Be it noted that the conjunctive ‘and’ is used between ‘separation pay and retirement’. a number of NPC employees also claimed retirement benefits under CA No. Plastimer submitted to the Department of Labor and Employment (DOLE) an Establishment Termination Report containing the list of the employees affected by the reorganization and downsizing. Here. 2001 opted for and were paid the corresponding separation pay equivalent to one and a half months’ salary per year of service. Gopo. which provides: (f) likewise. A careful reading of Section 63 of the EPIRA affirms that said law did not authorize the grant of both separation pay and retirement benefits. when the separated employee is not yet entitled to retirement benefits.” A complaint was filed against Plastimer for illegal dismissal.R. 186. Respondents claimed that: 1) they did not voluntarily relinquish their jobs and that they were required to sign the waivers and quitclaims without giving them an opportunity to read them and without . Plastimer and Plastimer Industrial Corporation Christian Brotherhood (PICCB). CARPIO. HELD: NO. the grant of both separation and retirement benefits would amount to double compensation from one single act of separation from employment. they cannot now claim additional retirement benefits under CA No. No. all NPC employees. who is neither qualified under existing laws. terminal leave pay. Consequently. As a result.e. instead. The options were alternative. 021112. Rule 33 of RA No. the incumbent sole and exclusive collective bargaining representative of all rank and file employees. (Ruperto G. their interpretation has little legal precedent. Under these laws. Unfortunately for the petitioners. absent an express provision of law. not cumulative.entitled to avail of the privileges provided under a separation plan which shall be one and one-half month salary for every year of service in the government: Provided. Plastimer Industrial Corporation and TeoKee Bin v. That those who avail of such privilege shall start their government service anew if absorbed by any governmentowned successor company. signed individual “Release Waiver and Quitclaim. must be paid plus other benefits under existing laws. rules and regulations nor has opted to retire under existing laws. including the petitioners. RETRENCHMENT 45. the court ruled that there must be a clear and unequivocal statutory provision to justify the grant of both separation pay and retirement benefits to an employee. x x x On February 28. and two months’ salary for every year of service in excess of 30 years. The CSC has previously ruled that employees similarly situated to petitioners herein were not entitled to both separation pay and retirement benefits. 186. 1616. were separated from the service. the option granted was either to "a separation pay and other benefits in accordance with existing laws. Nonetheless. this does not mean that both benefits shall be given to an affected employee. Thus. which in its elementary sense would mean that they are to be taken jointly. unless specifically authorized by law". This position finds further support in Section 3(f). absent an express provision of law to the contrary. 6656 amounts to sufficient statutory basis for the grant of both retirement benefits and separation pay. J. or indirect compensation. the employee’s separation pay shall be computed based on the period of service rendered in the government prior to the reorganization. rules and regulations" or to "a separation plan which shall be one and one-half months’ salary for every year of service in the government". as defined by the implementing rules. 9136’s Implementing Rules and Regulations. does not include one who is qualified or has opted to retire under existing laws. Martin. in CSC Resolution No. the concerned employee must either avail of the separation benefit or opt to retire if qualified under existing laws. including respondents. February 16. In the second case. "separation" or "displacement" refers to the severance of employment of any official or employee. where an employee is qualified to retire. 88) Obviously. one and a half months’ salary for every year of service over 20 but below 30 years. entered into a Memorandum of Agreement (MOA) relative to the terms and conditions that would govern the retrenchment of the affected employees. Thereafter. This interpretation is supported by the phrase "if entitled thereto" found before the phrase "be paid the appropriate separation pay and retirement and other benefits under existing laws". 2003. Having chosen the separation plan. therefore. he or she may opt to claim separation or retirement benefits. however. As worded. Also. in addition to the separation package mandated by the EPIRA. when the employee is qualified to retire. as amended by RA No. of which an employee affected by the reorganization. payment of both separation and retirement benefits is not absolute. sixth edition. government employees who have rendered at least 20 years of service are entitled to a gratuity equivalent to one month’s salary for every year of service for the first 20 years. In no case shall there be any diminution of benefits under the separation plan until the full implementation of the restructuring and privatization. Nothing in the EPIRA justifies the grant of both the separation package and retirement benefits. a separated employee must choose between retirement under applicable laws or separation pay under the EPIRA. p. as confirmed by the Court of Appeals. Article 283 of the Labor Code recognizes retrenchment to prevent losses as a right of the management to meet clear and continuing economic threats or during periods of economic recession to prevent losses. it submitted letters to MMC relating its intention to bargain collectively. The cessation of operations. September 29. MMC is required by law to maintain a tailings containment facility to store the waste material generated by its mining operations. It is clear that MMC had no choice. as mandated by law. The fact that there was a net income in 2003 does not justify the Court of Appeals’ ruling that there was no valid reason for the retrenchment. HELD: NO. HELD: YES. It is thus. countered that the retrenchment was a management prerogative and that respondents got their retrenchment or separation pay even before the effective date of their separation from service. declares. As a matter of fact. 7. resulting in the temporary lay-off of more than 400 employees in the mine site. CONTRACTORS.explaining their contents. On 11 July 2001. as here. 178222-23. evident. Respondents justified the temporary lay-off as bona fide in character and a valid management prerogative pending the issuance of the permit to continuously operate TP No. suspension of operations. the employer can lawfully close shop anytime as long as cessation of or withdrawal from business operations is bona fide in character and not impelled by a motive to defeat or circumvent the tenurial rights of employees. vs. Consequently. ISSUE: Whether respondents were illegally retrenched by petitioners. We observe that MMC was forced by the circumstances. On the other hand. and 2) Plastimer failed to establish the causes/valid reasons for the retrenchment and to comply with the one-month notice to the DOLE as well as the standard prescribed under the Collective Bargaining Agreement between Plastimer and the employees. Eleven (11) rank-and-file employees of MMC attended the organizational meeting of MMC-Makati Employees Association-Federation of Free Workers Chapter (Union). Separation pay must nonetheless be given to the separated employees. petitioners.3) there was no showing that cost-cutting measures were taken by MMC. On 30 July 2001. are the laid off employees entitled to separation pay. records showed an improvement of its finances in 2003. which MMC failed to obtain.: FACTS: INC. Manila Mining Corp. The Court of Appeals ruled that the MOA between Plastimer and PICCB only recognized the need for partial retrenchment and the computation of retrenchment pay without disclosing the criteria in the selection of the employees to be retrenched. 2) MMC did not want to bargain collectively with the Union. However. The decision to suspend operation ultimately lies with the employer. CALLANTA September 29. and as long as he pays his employees their termination pay in the amount corresponding to their length of service. Neither was the DOLE informed of this lay-off. The court ruled that there was no valid cause for retrenchment that while Plastimer claimed financial losses from 2001 to 2004. Article 286 is silent with respect to the rights of the employee if the suspension of operations lasts for more than 6 months. 165923 DEL CASTILLO. which was constructed in 1993 and was operated under a permit issued by the Department of Environment and Natural Resources (DENR). through its Environmental Management Bureau (EMB). 7 (TP No. and that Plastimer failed to use a reasonable and fair standard or criteria in ascertaining who would be dismissed and who would be retained among its employees. The Union acquired its legitimate registration status on 30 March 2000. J. There is no need for the employer to wait for substantial losses to materialize before exercising ultimate and drastic option to prevent such losses. Employees Association. Even as we declare the validity of the lay-off. 46. et al. MMC constructed several tailings dams to treat and store its waste materials. 5) the individuals laid-off were those who signed the attendance sheet of the union organizational meeting. DENR-EMB did not issue a permanent permit due to the inability of MMC to secure an Environmental Compliance Certificate (ECC). Under Article 283.R. Hence. Manila Mining corp. In their position paper. the employee is entitled to be reinstated once the employer resumes operations within the 6-month period.297. 7). ISSUE: Whether or not the lay-off is valid and legal and if so. No.185. Subsequently. Nos. PEREZ. SHIMIZU PHILS. the Union submitted its Collective Bargaining Agreement (CBA) proposal to MMC. G. Upon expiration of the tailings permit. an employee is not deemed terminated. who in its desire to avert possible financial losses.904. Article 286 of the Labor Code allows the bona fide suspension of operations for a period not exceeding six (6) months. it resorted to a temporary suspension of its mining and milling operations. An essential component of an ECC is social acceptability or the consent of the residents in the community to allow TP No. The validity of its act of suspending its operations does not excuse it from paying separation pay. VIRGILIO P. et al. The non-issuance of a permit forced MMC to permanently cease its business operations. 2010 . that the MMC declared temporary suspension of operations to avert further losses. hence.88 loss in 2002. complainants claimed that: 1) MMC was not suffering from business losses. 7 to operate. One of these dams was Tailings Pond No.4) no criteria were employed in choosing which employees to lay-off. Records showed that the net income of P6. MMC called for the suspension of negotiations on the CBA with the Union until resumption of mining operations. vs. we cannot say that MMC has no obligation at all to the laid-off employees. and 6) they were denied due process because they were not given a 30-day notice informing them of the lay-off.R. it was compelled to temporarily shut down its mining operations. G. It would be well to reiterate at this juncture that the reason for such suspension cannot be attributed to DENR-EMB. 2010. During the suspension. in the case at bar is of such nature.: FACTS: Manila Mining Corporation (MMC) is a publicly-listed corporation engaged in largescale mining for gold and copper ore. J. It was proven that MMC stopped its operations precisely due to failure to secure permit to operate a tailings pond.707.05 for 2003 was not even enough for petitioners to recover from the P52. and infusing fresh capital into the company. Worse. When respondent’s Honda Project was completed. and (5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees. and ordered respondent’s reinstatement and payment of backwages. that the criteria or standard used in selecting the employees to be retrenched was work efficiency which passed the test of fairness and reasonableness. Non-compliance with this rule clearly violates the employee’s right to statutory due process. ISSUES: Whether petitioner failed to observe fair and reasonable standards or criteria in effecting the dismissal of the respondent HELD: No. we affirm the NLRC’s award of indemnity to respondent for want of sufficient due notice. opined that petitioner failed to prove that there were other employees similarly dismissed and that respondent’s alleged replacements held much higher ranks and were more deserving employees. petitioner did not employ fair and reasonable criteria in determining which employees to retrench. Moreover. the Labor Arbiter found respondent’s notoriety due to pieces of evidence showing numerous company violations imputed against respondent. that the retrenchment scheme was arrived at in good faith. thus. that it offered to pay respondent his separation pay. Respondent was among the last batch of employees who were retrenched and by the end of year 1997. limiting the grant of additional monetary benefits to managerial employees and cutting down expenses. petitioner offered respondent his separation pay which the latter refused to accept and instead filed an illegal dismissal complaint. retrenchment is a valid exercise of management prerogative subject to the strict requirements set by jurisprudence: (1) That the retrenchment is reasonably necessary and likely to prevent business losses which. Petitioner also claimed that respondent has violated several company rules. As shown in the termination report submitted to DOLE. serious. the CA invalidated the retrenchment. held respondent to have been illegally dismissed. we hold that petitioner was able to prove that it incurred substantial business losses. Consequently. junior and inexperienced employees were appointed/assigned in his stead to new projects. petitioner presented financial statements and other documents. Petitioner implemented its retrenchment program in good faith because it undertook several measures in cutting down its costs. the abolition of several departments and the concomitant termination of some employees were implemented as each project is completed. thus also ignoring seniority in hiring and firing employees. However. the records do not bear any proof that these allegations were substantiated. Thus. on the other hand. Respondent then claimed that petitioner did not observe seniority in retrenching him and that he was more qualified than those retained by petitioner. selling of company vehicles. and financial hardship for certain workers.25 In implementing its retrenchment scheme. all of the employees of the Structural Steel Division were severed from employment. On the contrary. Moreover. The Court of Appeals. The Labor Arbiter held that respondent was validly retrenched. petitioner failed to use fair and reasonable criteria in determining which employees shall be retrenched or retained. if already incurred. age. to wit. whichever is higher. Thus. physical fitness. several departments were abolished in the early part of 1996 and thereafter the Structural Steel Division. Under Article 283. . There was substantial compliance for a valid retrenchment. are reasonably imminent as perceived objectively and in good faith by the employer. withdrawing certain privileges of petitioner’s executives and expatriates. Petitioner alleged that in order not to jeopardize the completion of its projects. actual and real. the petitioner’s monthly termination report for the month of July 1997 filed with the DOLE does not prove that respondent was the only one retrenched. (4) That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees’ right to security of tenure. (3) That the employer pays the retrenched employees separation pay equivalent to one month pay or at least ½ month pay for every year of service. or if only expected. of which respondent was an Administrator. Petitioner advanced that respondent’s services were terminated in accordance with a valid retrenchment program due to the financial crisis that plague the construction industry. the notice sent to the Department of Labor and Employment (DOLE) did not conform to the 30-day prior notice requirement. As proof. but substantial. Second. petitioner used fair and reasonable criteria in effecting retrenchment. The termination notice sent to DOLE did not comply with the 30-day notice requirement. petitioner was constrained to streamline its operations and to downsize its complements in a progressive manner in order not to jeopardize the completion of its projects. x x x efficiency. Respondent claimed that petitioner failed to comply with the requirements called for by law before implementing a retrenchment program.Respondent then filed an illegal dismissal complaint against petitioner assailing his dismissal as without any valid cause. such as status. Petitioner argued that there was already substantial compliance with the notice requirement and that the termination report is only for July 1997 and cannot be deemed as evidence of the total number of employees affected by the retrenchment program. he was the only one dismissed out of 333 employees. First. In fine. Consequently. are not merely de minimis. and lastly. (2) That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment. The NLRC upheld the ruling but held that petitioner violated respondent’s right to procedural due process due to noncompliance with the 30-day prior notice to the DOLE and that there is no proof that petitioner used fair and reasonable criteria in the selection of employees to be retrenched. seniority. The purpose of the one month prior notice rule is to give DOLE an opportunity to ascertain the veracity of the cause of termination. such that petitioner’s decision to appoint more competent and more senior employees in his stead cannot be questioned. It merely serves as notice to DOLE of the names of employees terminated/retrenched only for the month of July. Shimizu was ordered to pay Callanta his separation pay and an indemity equivalent to 1 month salary. respondent is entitled to indemnity for violation of due process. HELD: Yes. Talam filed a complaint for illegal dismissal and illegal deduction.00. BRION. 2002. we cannot fault the company for choosing the option of looking at the margins of contribution of the consultants to the income of the company as primary retrenchment standard.000.00 the nominal damages. ISSUE: Whether there was a valid cause for Talam’s dismissal. the respondent. backwages and 13th month pay. (TSFI). The release and quitclaim was a valid and binding undertaking that should have been recognized by the labor authorities and the CA. FACTS: RAY 175040 TALAM vs. considering their know-how in the project. On November 29. In the latter part of 2001 and in 2002. The alleged losses were not imminent as there were only 2 employees who were retrenched. TSFI decided to retrench some of its employees. the decision to retrench had a basis. makes up 41% of the company’s total operating expenses. It insists that the contribution margin or service income is a fair and reasonable criterion in deciding who to retrench. In executing the release and quitclaim. Thus. Consequently. Third. The arbiter held that TSFI had not adopted a retrenchment program and there was also no evidence showing clearly that Talam should be retrenched. 2002.418. The NLRC found Talam's dismissal valid by reason of retrenchment. Thus. Like the Labor Arbiter. or after a month. it increased to P50. TSFI also explains that the 5 probationary employees were working on a project that was then in mid-stream and. The matter was elevated to the Supreme Court. Thereafter. No. Furthermore.R.954. as reported by its external auditor and as established by its financial records. TSFI’s financial condition. Its external financial auditor advised that it cut on its payroll expenses. damages and attorney's fees against TSFI. J. could not just be assigned to Talam. we note that the auditor suggested that TSFI "review the contribution margin per consultant and compensation packages of personnel in the executive and support group. before the National Labor Relations Commission (NLRC) in Cebu City. A legitimate waiver representing a voluntary settlement of a laborer's claims should be respected by the courts as the law between the parties. In the present case. The Software Factory.00 and retained earnings deficit of P7. Talam had unquivocably signified his acceptance of his separation from the service. there were 5 probationary employees who became regular employees on October 1. the choice of who should be retrenched must be conceded to the company as long as there exists a basis for it. 2002. April 6. The Labor Arbiter declared that Talam's dismissal illegal and directed TSFI to pay Talam separation benefits. Grapilon (Office Manager) and Wolfgang Hermle (CEO) verbally informed Talam that his services with the company would be terminated 30 days after September 27. we find that TSFI satisfied the requisites for a valid retrenchment.FRANCIS G. absent any showing of bad faith." Again. Fourth. he had no service income. It also argues that Talam had the highest negative contribution margin. it used as an office a small-room (a mere cubicle) with only a two-person support staff in the persons of Grapilon and Hermle. with claims for service incentive leave pay.000. . First.424. Management explained that TSFI’s clients did not choose him or ask for his services – a management claim Talam did not dispute. but ordered the company to pay Talam P30. the NLRC deleted the award of backwages and 13th month pay. we find the filing of the illegal dismissal case tainted with bad faith on his part. he did not have the highest negative contribution margin. it ruled that the company failed to give Talam the notice required by law. Talam was was one of two employees with the least or with no income contribution for the year 2002. The CA also noted that Talam's employment contract provided for two month's notice. Thus. Second. On the whole. It submits that Talam was not chosen by any of its clients as shown by the fact that since January 2002 until his separation.00 in compensation and other benefits. Grapilon and Hermle. showed that it had already suffered a net income loss of P2. Talam was dismissed due to a cause authorized by law – retrenchment to prevent losses. It posits that it cannot be expected to maintain an employment consultant whose services the clients do not need. Talam contends that the financial statements relied upon by the company do not show that TSFI was in dire financial straits nor was it suffering drastic business losses. TSFI resorted to other measures to abate its losses. suffered financial reverses. be that as it may. The Court of Appeals found the retrenchment to be valid." On motion for reconsideration. He disregarded the release and quitclaim executed by Talam declaring that he was compelled to accept ithe monetary consideration behind it out of necessity. On November 6. Talam signed a Release and Quitclaim in consideration and receipt of P89. NLRC 2010 TSFI maintains that it did not only expect but had already suffered substantial losses. However. He also argues that the basis of having the least contribution margin to the company is not a valid cause for dismissal under Articles 282 and 283 of the Labor Code.00 as nominal damages for violating his right to procedural due process. At that time. it reduced the salaries of its employees by as much as 30%. It claimed that during the crises period. TSFI appealed to the NLRC. The cost-cutting measure recommended involved reduction of TSFI’s payroll expense account which. Absent any showing of bad faith. The fact that it retrenched only 2 employees did not mean its losses were not imminent. The decision was upon the recommendation of the company’s external auditor. Talam himself admitted that he had no contribution income for 2002.250.474. but deleted the award of separation pay "in view of payment. it nullified the release and quitclaim signed by Talam. as found by the external auditor. as the auditor found. which accounted for 41% of its total operating costs. Inc. 2002. using as basis its employees' service income and contribution margins to the company. TSFI notified Talam in writing of the termination of his employment. if already incurred. conversion of the plant for a new production program or the introduction of new methods or more efficient machinery or of automation. HELD: NO. or only if expected. An audited financial report made by SGV indicated that the hotel suffered an operating loss amounting to over P16M. ISSUE: Whether the downsizing scheme. No. provided they are done in good faith and the employer faithfully complies with the substantive and procedural requirements laid down by law and jurisprudence. (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 ofretrenchment. Redundancy. the normal method of discharging which is the submission of financial statements duly audited by independent external auditors. Upon appeal. It submitted them only after it received the adverse judgment of the Labor Arbiter. to our mind. i. or seasonal fluctuations or during lulls occasioned by lack of orders. To effect a valid retrenchment. J. HEPI decided to implement a downsizing scheme to determine the areas where it could obtain significant savings. and (5) the employer uses fair and reasonable criteria in ascertaining who would be retrenched or retained. retrenchment and redundancy. The labor arbiter found the strike to be legal. HEPI alleged that it initially decided to cost-cut by implementing energy-saving schemes. Later. and real. December 23. Retrenchment and redundancy are valid management prerogatives. Prescinding from the foregoing. The Union opposed the downsizing scheme of petitioner arguing that the latter failed to prove that it is incurring heavy financial losses. shortage of materials. HELD: YES. 183233. Note that Anabe was dismissed in 1999. but substantial. On September 8. Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees. Carpio Morales. that the hotel had incurred huge financial losses necessitating the adoption of a downsizing scheme. the financial statements were prepared only in 2001. Asiakonstrukt proffered no explanation behind the belated submission. the following elements must be present: (1) the retrenchment is reasonably necessary and likely to prevent business losses which. industrial depression. Despite the Union’s opposition. An employer’s good faith in implementing a redundancy program is not necessarily destroyed by availment of the services of an independent contractor to replace the services of the terminated employees. he was notified by the latter that his services would be. Thereafter. While the NLRC is not indeed precluded from receiving evidence. Hence. Hence. In the present case. are not merely de minimis. FACTS: Respondent Union is the certified collective bargaining agent of the rank-andfile employees of Hyatt Regency Manila. Considering the same. it found some positions to be redundant. The Labor Arbiter found that Asiakonstrukt failed to submit financial statements to prove losses. For a valid retrenchment. the normal method of discharging which is the submission of financial statements duly audited by independent external auditors. to avoid or minimize business losses. SAMAHAN NG MGA MANGGAGAWA SA HYATT-NATIONAL UNION OF WORKERS IN THE HOTEL AND RESTAURANT AND ALLIED INDUSTRIES (SAMASAH) G. are reasonably imminent as perceived objectively and in good faith by the employer. adopted by petitioner was valid. In 2002. The Court thus gave credence to petitioner’s theory that the statements might have been fabricated. notices of termination were served to 48 employees whose positions were identified to be redundant. No. It begs the question then of how the company knew that it was suffering big losses in 1999 when the financial statements were only accomplished 2 years thereafter. ANABE vs.e. Retrenchment is the reduction of work personnel usually due to poor financial returns. ASIAN CONSTRUCTION (ASIAKONSTRUKT) G. Furthermore. on the ground of retrenchment.Given the release and quitclaim. 2009. June 5. It is resorted to during periods of business recession. serious. the losses must be supported by sufficient and convincing evidence. DOCTRINE: Retrenchment and redundancy are valid management prerogatives. the Union filed a notice of strike based on unfair labor practice against HEPI. FACTS: Petitioner Virgilio Anabe was hired by respondent company (Asiakonstrukt) as radio technician/operator sometime in 1993. on the other hand. 165756. noting that the latter is not precluded from receiving evidence on appeal as technical rules of procedure are not binding in labor cases. HEPI’s hotel business suffered big financial losses. the following requisites must be complied with: (1) the retrenchment is necessary to prevent losses and such losses are proven. erased whatever infirmities there might have been in the notice of termination as Talam had already voluntarily accepted his dismissal through the release and quitclaim. The release and quitclaim. (4) the employer exercises its prerogative to retrench in good faith. the hotel engaged the services of independent job contractors to perform the services of the dismissed employees. Asiakonstrukt submitted certified true copies of its audited financial statements in 1998-2000. terminated effective a month thereafter. Nachura. J. Upon appeal. Asiakonstrukt had also failed to submit its financial statements to the SEC for the year 1998-2000 and 2003-2005. this petition. DOCTRINE: To effect a valid dismissal on the ground of retrenchment. It is a management prerogative resorted to. HOTEL ENTERPRISES OF THE PHILIPPINES (HEPI) vs. After evaluation. a hotel owned by petitioner HEPI. as he was in fact. the delay in the submission of evidence should be clearly explained and should adequately prove the employer’s allegation of the cause for termination. and (3) payment of separation pay equivalent to one-month pay or at . 2009. In 2001.R. Also. (3) the employer pays the retrenched employee separation pay in an amount prescribed by the Code. 1999. we do not see how TSFI can be made to answer for failure to afford Talam procedural due process. provided they are done in good faith and the employer faithfully complies with the substantive and procedural requirements laid down by law and jurisprudence.R. Petitioner filed a complaint for illegal dismissal and illegal deduction and payment of fringe benefits. the Court noted that the losses must be supported by sufficient and convincing evidence. NLRC ruled that Anabe was not illegally dismissed. exists where the number of employees is in excess of what is reasonably demanded by the actual requirements of the enterprise. the Court held that the dismissal of petitioner on account of retrenchment is unjustified for failure of Asiakonstrukt to clearly and satisfactorily substantiate its financial losses. The CA reversed the NLRC decision. this petition. aimed to cut down costs for operation particularly on salaries and wages. Hence. The CA affirmed the finding of NLRC. and thus ruled that Anabe was illegally dismissed. ISSUE: Whether Anabe was validly dismissed based on the ground of retrenchment. Asiakonstrukt failed to submit its audited financial statements within the two years that the case was pending before the Labor Arbiter. (2) written notice to the employees and to the DOLE at least one month prior to the intended date of retrenchment. the NLRC gave credence to the financial report of SGV & Co. or a total of 174 days. license. HELD: Yes. FLOATING STATUS BEBINA SALVALOZA vs. has been paid. Of the three instances when Gregorio was temporarily "off-detailed. insensibility. inefficiency. It takes place when the security agency’s clients decide not to renew their contracts with the agency. it was found that petitioner did implement various cost-saving measures and even transferred some of its employees to other viable positions just to avoid the premature termination of employment of its affected workers. and (3) indefinitely. if provisions for hotel rehabilitation as well as replacement of and additions to the hotel’s furnishings and equipments are included. and (4) adoption of fair and reasonable criteria in ascertaining which positions are to be declared redundant and accordingly abolished. They pointed out that Gregorio submitted a spurious security guard . and dismissing Gregorio’s complaint for lack of merit. or unlikely. 2010 NACHURA. whichever is higher. 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. Aggrieved. 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. issued by the Security Agencies and Guards Supervision Division of the Philippine National Police (PNP). J. per his service record. The unreasonable lengths of time FACTS: Gregorio Salvaloza was employed by Gulf Pacific as a security guard. 2002 for illegal dismissal before the NLRC-NCR. Our labor laws only allow retrenchment or downsizing as a valid exercise of management prerogative if all other else fail. 1999 to May 2. 2001. and poor performance while on duty. Gulf Pacific and Quizon appealed to the NLRC which promulgated its decision reversing the LA decision. and ANGEL QUIZON G.267. It should be pointed out that. unreasonable. so long as such status does not continue beyond a reasonable time.00 in losses. In case of redundancy. 1996 to April 13. On the other hand. Gregorio was undesirable as an employee. NLRC. Accordingly. 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." we find that the last two already ripened into constructive dismissal. In the present case. and instead continued to assign him to various posts. It was when the same proved insufficient and the amount of loss became certain that petitioner had to resort to drastic measures to stave off P9. or a total of almost 22 months. 1997. While we acknowledge that Gregorio’s service record shows that his performance as a security guard was below par. starting from August 30. (3) good faith in abolishing the redundant positions. but was only placed on floating status due to his failure to comply with the Memorandum dated August 2. (2) from July 14. the employee may be considered to have been constructively dismissed. He filed a complaint on March 6. 182086. the Court appreciated the financial statements submitted by SGV in favor of petitioner’s claims. It does not constitute a dismissal. indeed. 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. INC. the Labor Arbiter rendered a decision in favor of Gregorio.: DOCTRINE: When a "floating status" lasts for more than six (6) months. it was incumbent upon Gulf Pacific to be vigilant in its compliance with labor laws. 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.. The Court noted that the financial statements submitted by petitioner were audited by a reputable auditing firm and are clear and substantial enough to prove that the company was in a precarious financial condition.981.R. 2002. the security guard does not receive any salary or any financial assistance provided by law. which rendered its decision affirming the NLRC Second Division decision and resolution. GULF PACIFIC SECURITY AGENCY. But in this case. If. The Court noted that while the hotel has earned in 2001 around P12M. the result is indeed a staggering deficit of more than P16 million. as an offer involving a demotion in rank and a diminution in pay. An employer’s good faith in implementing a redundancy program is not necessarily destroyed by availment of the services of an independent contractor to replace the services of the terminated employees. Gulf Pacific and Quizon argued that Gregorio was not illegally dismissed. Gulf Pacific could just have dismissed him for cause. the employer must prove that: (1) a written notice was served on both the employees and the DOLE at least one month prior to the intended date of retrenchment. the termination of the 48 employees was legal. No. It exists when there is cessation of work because continued employment is rendered impossible. 2001. When such a "floating status" lasts for more than six (6) months. Thus. (2) separation pay equivalent to at least one month pay or at least one month pay for every year of service. or six (6) days less than six (6) months. Gregorio then filed a petition for certiorari before the CA. whichever is higher. On June 30. 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. we join the LA in his finding that Gulf Pacific never issued any memo citing him for the alleged repeated errors. about 50 years old. 2001. and his service record. Gregorio was thrice put on "floating status" by Gulf Pacific: (1) from October 22. The reduction of the number of workers in a company made necessary by the introduction of the services of an independent contractor is justified when the latter is undertaken in order to effectuate more economic and efficient methods of production. November 24. During such time. 2004. Although we understand that it could have been difficult for Gulf Pacific to post Gregorio given his age. requiring him to complete the requirements for his 201 file. and be able to survive. the employee may be considered to have been constructively dismissed. ISSUE: Whether Gregorio was constructively dismissed by when he was put on floating status. There is constructive dismissal if an act of clear discrimination. resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster. as the assignments primarily depend on the contracts entered into by the security agencies with third parties.least one-half month pay for every year of service. the Court ruled that the downsizing scheme implemented by petitioner was valid. as rebutted by the Certification dated June 13. 1998.that Gregorio was not posted inevitably resulted in his being constructively dismissed from employment. October 6. The following day respondent served SHS a resignation letter with a demand of his salary Del Villar believed that he was demoted by the Company to force him to resign. it was legally impossible for Gulf Pacific to deploy him for lack of a valid security guard license. The wisdom or soundness of this judgment is not subject to discretionary review of the Labor Arbiter and the NLRC. The Company expectedly appealed to the NLRC. J. In a Decision dated February 26. However.: DOCTRINE: Although management prerogative refers to “the right to regulate all aspects of employment. The notice to the DOLE would have afforded the labor department the opportunity to look into and verify whether there is truth as to the claim of the Company that Del Villar’s position had become redundant “with the implementation of new distribution systems. gasoline allowance. 2005 ordered the withholding of the latter’s salary. 1999. October 13. the former. It must produce adequate proof of such redundancy to justify the dismissal of the affected employees. properly terminable for being redundant is an exercise of business judgment of the employer. 185814.: ISSUE: Whether or not the Company validly terminated the services of Del Villar. In this case. Del Villar received a letter. utilization of improved operational processes.00. Jimeno for the Company. The determination that the employee's services are no longer necessary or sustainable and. Manuel F. DOCTRINE: It is not enough for a company to merely declare that it has become overmanned. and not up to the promulgation of the decision of the LA. FACTS: Respondent Diaz was hired by petitioner as Manager for Business Development on probationary status from July 18. Redundancy. on that date.” it cannot be understood to include the right to temporarily withhold salary/wages without the consent of the employee. and not because the employee unsatisfactorily performed the duties and responsibilities required by his position.000. on November 29. 1998. exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. No. The Labor Arbiter rendered a Decision in Del Villar’s favor. 2010 LEONARDO-DE CASTRO. It must produce adequate proof of such redundancy to justify the dismissal of the affected employees. no other evidence was presented by the Company. Del Villar submitted a Report to the Company President detailing an alleged fraudulent scheme undertaken by certain Company officials in conspiracy with local truck manufacturers. Diaz G. Redundancy arises because there is no more need for the employee’s position in relation to the whole business organization. and annual foreign travel. with a job grade of NS-VII. Respondent and SHS President (who was often abroad and had been expressing his dissatisfaction with respondent’s poor performance) dealt with each other via e-mails or phone calls and personal meetings when the latter was in the Philippines. other than its own bare and self-serving allegation that Del Villar’s position as Staff Assistant of Corporate Purchasing and Materials Control Manager had already become redundant. considering that. Inc. 1998.R. the NLRC reversed the Labor Arbiter. he ceased to be entitled to the benefits accruing to an S-7 position under existing company rules and policies. INC. CONSTRUCTIVE DISMISSAL COCA-COLA BOTTLERS PHILIPPINES. Thus.R. Redundancy arises because there is no more need for the employee’s position in relation to the whole business organization.. signed by one Virgilio B. The Company actually terminated Del Villar’s services effective May 31. with respect to Gregorio’s "off-detail" starting from August 30. considered separated from the Company effective May 31. we hold that it should only be counted up to June 13.. . then he was illegally dismissed. vs. Neither did the Company present proof that it had complied with the procedural requirement in Article 283 of prior notice to the Department of Labor and Employment (DOLE) of the termination of Del Villar’s employment due to redundancy one month prior to May 31. among other benefits. Del Villar filed with the Arbitration Branch of the NLRC a complaint against the Company for illegal demotion and forfeiture of company privileges. and he was to turn over the vehicle assigned to him as Transportation Services Manager to Pineda. 2010 Mendoza. informing him that his position has been determined as no longer necessary due and thus. Compliance with the required notices would have also established that the Company abolished Del Villar’s position in good faith. When SHS President went to Philippines and respondent allegedly did not meet with him. 2006. An employee’s performance is irrelevant as regards the issue on redundancy. overpricing the trucks purchased by the Company. as his position was no longer necessary or was considered redundant due to the reorganization of the Business Logistic Directorate. ANGEL U. DEL VILLAR G. Unable to endure any further the harassment. Del Villar’s poor employee performance is irrelevant as regards the issue on redundancy. Unsatisfied. it is not enough for a company to merely declare that it has become overmanned. and functional reorganization” of the Company. 2001. Seven months after the submission of his Report he received a Memorandum informing him he was designated as Staff Assistant to the Corporate Purchasing and Materials Control Manager. there being no authorized cause for the termination of Del Villar’s employment. provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious act. While the case was still pending appeal before the NLRC. J. Del Villar brought his case before the Court of Appeal which rendered its decision favoring Del Villar. HELD: No. In other words. 2005 to January 18. for purposes of the Labor Code. therefore. aside from the use of a company car. FACTS: The Company initially hired respondent Angel U. Winfried Hartmannshenn (President) and Hinrich Johann Schumacher (EVP) vs. SHS Perforated Materials. Redundancy is one of the authorized causes for the dismissal of an employee. and not because the employee unsatisfactorily performed the duties and responsibilities required by his position. No. 2002. 163091. del Villar (Del Villar) as Physical Distribution Fleet Manager with a job grade of S-7 and monthly salary of P50. Respondent was forced to resign and was. and Comptroller. June 18. No. When petitioner refused. illegally dismissed. De Dios to resign from her employment as Comptroller. unreasonable or unlikely. things and personal belongings were allegedly transferred without her consent. and Comptroller. NO. she was verbally informed by the corporation’s President and GM. (NOTE: The doctrine of strained relations was also discussed in this case) Estrella Velasco vs. Secretary to the President and General Manager. What made it impossible. her absence would be considered an abandonment of her duties and responsibilities. and required petitioner to explain her absence otherwise. respondent cited petitioners’ “illegal and unfair labor practice as his cause for resignation. 1993. However. 2. compelling him to resign. It dismissed the complaint for illegal dismissal and other claims. CA – reversed NLRC’s decision. There was no evidence that she was harassed or discriminated upon. 171327. Respondents allowed petitioner to take a leave of absence for the whole month of February 1993. affirmed LA’s decision (insufficient evidence to support constructive dismissal). 2010 Carpio. unreasonable or unlikely for respondent to continue working for SHS was the unlawful withholding of his salary. From the contract of probationary employment itself. There is constructive dismissal if an act of clear discrimination. Later modified the said decision and ruled that petitioner’s transfer was a demotion (managerial function to clerical task). petitioner was reduced to performing clerical tasks. Petitioner took a leave of absence for the month of February 1993.: DOCTRINE: 1. respondent called petitioner’s attention that she had been absent without official leave since March 1.” it cannot be understood to include the right to temporarily withhold salary/wages without the consent of the employee. 1993. NLRC – petitioner was constructively dismissed from employment. respondent’s duties as manager called for meetings with prospective clients outside the office rather than reporting for work on a regular schedule. On March 5. constructively dismissed. but it ordered SHS to pay the salary covered by the subject period. employee of respondent corporation. she filed a case for constructive dismissal against respondents which we find to be without factual and legal basis. he was still entitled to security of tenure. ISSUE: Whether or not respondent was constructively dismissed from employment. the withholding thereof is thus unlawful. Petitioners’ evidence insufficient to prove that respondent did not work during the subject period. Respondents required petitioner to explain her absence within three days from receipt of the letter. and legal interest. the continued refusal to release his salary after the payroll period was clearly unlawful. it would be more beneficial to the corporation. she was verbally informed by De Dios to resign from her employment as Comptroller. NLRC – modified LA’s decision. In fact. Petitioner’s belated reply showed her lack of intention to report back to work and to perform her other responsibilities. insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment.covering November 16-30. Labor Code. Even granting that the withholding of respondent’s salary on November 30. thus.R. her office table. it would be contrary to Article 116 of the Labor Code. The malicious withholding of respondent’s salary made it impossible or unacceptable for respondent to continue working. Instead. it would be more beneficial to the corporation. 1993 when respondents called her attention that she had been absent without official leave since March 1. In other words. Absent any evidence of bad faith. it is within the exercise of respondents’ management prerogative to transfer some of petitioner’s duties if in their judgment. It exists when an act of clear discrimination. Although respondent was a probationary employee. 2005. It was only on March 5. there was no diminution of petitioner’s salary and other benefits. Respondent was constructively dismissed and. 1993. Respondents only exercised their management prerogative. The withholding of the salary is a management prerogative. Petitioner answered that she had nothing to explain because in February 1993. . she was asked to resign as Comptroller and to concentrate on the preparation of respondent’s Income Statement. Although management prerogative refers to “the right to regulate all aspects of employment. Any withholding of an employee’s wages by an employer may only be allowed in the form of wage deductions under the circumstances provided in Article 113 of the Labor Code. Absent any evidence of bad faith. LA – respondent was constructively dismissed because withholding of his salary is contrary to Article 116. The quantum of proof required is substantial evidence. the nature of respondent’s job did not allow close supervision and monitoring by petitioners. it was only on March 31. it is undisputed that petitioner was holding three positions: Head of the Accounting Department. It is significant to note that the respondent prepared and served his resignation letter right after he was informed that his salary was being withheld. Here. in his resignation letter. it is within the exercise of respondents’ management prerogative to transfer some of petitioner’s duties if in their judgment. respondent filed a Complaint against the petitioners for illegal dismissal. It exists where there is cessation of work because continued employment is rendered impossible. CA – set aside NLRC’s decision. and Antonio De Dios (President and GM) G. would not constitute an unlawful act. There was no basis for the NLRC’s finding that from performing managerial functions. J. When SHS failed to pay him. therefore. thus. or that respondents made it difficult for her to continue with her other duties. and attorney’s fees. LA – dismissed the complaint. costs of suit. ISSUE: HELD: Whether or not petitioner was constructively dismissed from work. Transit Automotive Supply. She was asked to relinquish her duties as Comptroller. 1993 when petitioner answered that she had nothing to explain because in February 1993. It would be absurd to require respondent to tolerate the unlawful withholding of his salary for a longer period before his employment can be considered as so impossible. non-payment of salaries/wages and 13th month pay with prayer for reinstatement and full backwages. was originally hired as accounting clerk and later became the head of the Accounting Department while concurrently the Secretary to the President and General Manager. Constructive dismissal is defined as a quitting because continued employment is rendered impossible. The withholding is not a management prerogative. In this case. Petitioner alleged that in January 1993. as an offer involving a demotion in rank and a diminution in pay. unreasonable or unlikely. unreasonable or unlikely as to constitute constructive dismissal. exemplary damages. Absent a showing that the withholding of complainant’s wages falls under the exceptions provided in Article 113. FACTS: Petitioner. or when there is a demotion in rank or a diminution of pay. Petitioner then filed an action for constructive dismissal against respondents. Otherwise. Inc. HELD: YES. or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued employment. insensibility. unreasonable or unlikely. third. On both occasions. June 29. from April 15. J. consequently. 2002) Malig-on’s immediate supervisor told her that the company would be assigning her to another client. the assignment was not done. when it ran up to more than six months. which is more than a mere scintilla of evidence. It would make sense only if. she had been on floating status for over six months and the company promised to give her a new assignment if she would go through the process of resigning and reapplying. The company evidently placed Malig-on on floating status after being relieved as janitress in a client’s workplace. Malig-on v. Richard Barclay. 1996 as janitress in its janitorial services. separation pay instead of reinstatement was awarded to Malig-on by the SC. HELD: Yes. the act of “off-detailing” was not the equivalent of dismissal so long as her floating status did not continue beyond a reasonable time. ISSUE: WON PETITIONER MALIG-ON’S OFF-DETAILING WAS A CASE OF CONSTRUCTIVE DISMISSAL. the company . NLRC: reversed LA’s decision. Consequently. that is. her purported resignation on October 15. based at the port of Manila. at the same time informing the latter of his willingness to work either in Manila or Bataan. a floating crane barge owned by respondent company. thus. However. Eight months later Malig-on was advised that she had to file a resignation letter before EGSI could reassign her. when there is a demotion in rank and/or a diminution in pay. No. when Malig-on reportedly dropped out of sight and the company had no idea about the reason for it. that Malig-on went to the NLRC to file a complaint for unjust dismissal just three days after she filed her alleged resignation letter is inconsistent with genuine resignation. NOTE: Strained Relations Doctrine was applied here. the quantum of proof required is substantial evidence. After being shuttled between Manila and Bataan. Respondent company claimed. but they objected to the reduction of their benefits. the company may be considered to have constructively dismissed her from work. G. But. Inc. prompting Malig-on to file a complaint against it for illegal dismissal. together with four other members of the crew. Thus. 2002 could not have been legally possible. Inc. first on August 23. FACTS: Equitable General Services. Inc. its crew would no longer be entitled to out of port benefits of 16 hours overtime and P200 a day allowance. August 14. Asian Terminal. September 1997: The said floating crane barge. found that respondent company constructively dismissed her. as of August 16. And. 2002 and September 2. While he did not agree with private respondents’ terms and conditions. 2002. reinstated LA’s decision. J. 185269. that she just stopped reporting for work on February 16. DOCTRINE: The transfer of an employee may constitute constructive dismissal "when continued employment is rendered impossible. 2002 Malig-on showed up at the company’s office and submitted her resignation letter. they were told by James Keith to report to the Manila office only to be told to report back to Bataan.. reinstatement with full backwages from the time the company illegally dismissed her up to the date of the finality of its decision. Bataan. 1997: Respondent Keith issued a memo to the crew of Bismark IV stating that the barge had been permanently transferred to the Mariveles terminal beginning October 1. Second. Inc. But. as the Court has repeatedly ruled. if Malig-on had abandoned her work and had no further interest in it. Corvite for clarification of his status. he was nonetheless willing to continue DOCTRINE: The Court has repeatedly ruled.R. Keith James. No. LA: found Maligon’s resignation valid and binding. 1989 to October 1997. hired Malig-on on March 4. First. 2002 without giving any reason. 1997. tricked her into filing for resignation upon a promise to give her a new work assignment and failed to deliver such promise. stated that they did not object to the transfer of. But these notices cannot possibly take the place of the notices required by law. 163505. petitioner was not given any work assignment. and Atty. Gualberto Aguanza v.(NOTE: In administrative proceedings.” FACTS: Petitioner Gualberto Aguanza was employed with respondent company Asian Terminal. asking her to explain her continued absence. Rodolfo Corvite G. 2002. Indeed. They came more than six months after the company placed her on floating status and. After six years (February 15. insensibility or disdain by an employer becomes unbearable to the employee. asking her to explain her failure to report for work and informing her that the company would treat such failure as lack of interest in it. such act of “off-detailing” Malig-on was not the equivalent of dismissal so long as her floating status did not continue beyond a reasonable time. the company needed to write Malig-on immediately and ask her to explain in writing why she should not be considered to have abandoned her job so the company may be cleared of its responsibility as employer. despite she made several follow-ups. pay ECOLA and the balance of her 13th month pay. When they objected to the reduction of their benefits. petitioner was constrained to write respondent Atty. The company of course claims that it gave Malig-on notices on August 23. as Malig-on claims. there was no reason for her to suddenly show up at her former place of work after eight months and file her resignation letter. He was initially employed as Derickman or Crane Operator and was assigned as such aboard Bismark IV. On October 15. or when a clear discrimination. CA: reversed NLRC’s decision. respondent company wrote her two letters. thus. but such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion) Elsa S.R. 2002. however. as she claimed. the natural and right thing for it to do was investigate why she had suddenly vanished. the company gave her those notices after it had constructively dismissed her from work. Petitioner. 2002 and again on September 2. This did not happen here. October 20. She complied but the company reneged on its undertaking. respectively. 2009 CARPIO. 2010 Abad. together with its crew. Equitable General Services. Her action would make sense only if. was temporarily assigned at a port in Mariveles. Petitioner. agree with the NLRC and the appellate court when they stated that the fixed overtime of 16 hours. however. out-of-port allowance and meal allowance previously granted to Aguanza were merely supplements or employment benefits given on condition that Aguanza’s assignment was out-of-port. 2005 the National Labor Relations Commission (NLRC) reversed the LA’s decision and ruled that the company had constructively dismissed Malig-on. Among the employees assigned to Bismark IV. Petitioner Elsa Malig-on (Malig-on) claimed that on March 4. NLRC: Reversed LA’s decision. The Rulings of the Court The rule in termination cases is that the employer bears the burden of proving that he dismissed his employee for a just cause. these circumstances do not sound consistent with resignation freely made. MALIG-ON. 2002. 2004 the Labor Arbiter (LA) rendered a decision. The company denied Malig-on’s allegations. Here. Those circumstances must be consistent with the employee’s intent to give up work. the burden is on the employer to prove that he did so willingly. The respondent company went up to the Court of Appeals (CA) to challenge the NLRC decision.versus . On February 28. INC. ATI did not dismiss Aguanza. 2002 the company told Malig-on that she had to file a resignation letter before it would reassign her. Malig-on simply dropped out of sight one day on February 16. June 29. rather. After six years or on February 15. There was no demotion in rank. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. a valid exercise of management prerogative. Clearly. however. Aguanza even asserted. Aguanza refused to report to his proper workplace. On October 15. and not in Bataan. Aguanza’s continued employment was not impossible. Aguanza did not contest his transfer. there was no diminution in pay.R. contrary to Aguanza’s assertions. but the reduction in his take-home pay. 2002 for no reason at all. Aguanza’s assertion that he was not allowed to "time in" in Manila should be taken on its face: Aguanza reported for work in Manila. To the company’s surprise. Eight months later or on October 15. On January 26. 2002 she went to the NLRC office and filed her complaint against the company for illegal dismissal. According to the company. On July 16. Inc. 2002 Malig-on’s immediate supervisor told her that the company would be assigning her to another client. 2010 The Facts and the Case . it must also protect the right of an employer to exercise what are clearly management prerogatives. 2002 she appeared at the company’s office and tendered her resignation. 1996 respondent Equitable General Services. First. They merely prove that she wrote that letter. 2008 the CA reversed the NLRC’s ruling and reinstated that of the LA. and signed it. asking her to explain her continued absence. and general principles of fair play and justice. three days later or on October 18. ATI’s transfer of Bismark IV’s base from Manila to Bataan was. Eight months later or on October 15. first on August 23. unreasonable or unlikely.. Whether that is the case would largely depend on the circumstances surrounding such alleged resignation. gave a letter of resignation that she wrote with her own hand. LA: Respondents illegally dismissed Aguanza. 2002 without giving any reason. We. where he wanted to work. ISSUE: WON THE TRANSFER OF AGUANZA FROM MANILA TO BATAAN CAN BE CONSIDERED AS A CASE OF CONSTRUCTIVE DISMISSAL. that he bound himself to work in such place where ATI might assign or transfer him. as Aguanza would continue his work as Crane Operator. where he was supposed to work. the natural and right thing for it to do was investigate why RESIGNATION G. 2002 Malig-on showed up at the company’s office and submitted her resignation letter. 2002 and again on September 2. thus. Consequently. Furthermore.00 per day for a nine-hour work. The fixed overtime and allowances were not part of Aguanza’s basic salary. finding Maligon’s resignation valid and binding. a thing that she did not deny. The NLRC ordered the company to reinstate Maligon with full backwages. All members of the crew except petitioner accepted the new assignment and its terms and conditions. The transfer of employees has been traditionally among the acts identified as a management prerogative subject only to limitations found in law. the company wrote her two letters. It claimed that she just stopped reporting for work on February 16. contrary to his acts. Even as the law is solicitous of the welfare of employees. when the employer claims that the employee resigned from work.EQUITABLE GENERAL SERVICES. And. (the company) hired her as janitress in its janitorial services. . NOTES ON THE ALLEGED DIMINUTION OF BENEFITS: The circumstances of the case made no mention of the salary structure in case Bismark IV being assigned work outside of Bataan. HELD: No. collective bargaining agreement.working without prejudice to taking appropriate action to protect his rights. CA: Affirmed NLRC’s decision. despite Aguanza’s assertions. But these are not enough. No. petitioner filed a complaint for illegal dismissal against respondents. The Issue Presented The issue in this case is whether or not the CA erred in holding that petitioner Malig-on abandoned her work and eventually resigned from it rather than that respondent company constructively dismissed her. prompting Malig-on to file a complaint against it for illegal dismissal. But it never did despite several follow-ups that she made. 185269 ELSA S. Respondent. She was quick to point out that she wrote it after being told that she needed to resign so she could be cleared for her next assignment. Because of private respondents’ refusal to give him any work assignment and pay his salary. The company paid her P250. used the vernacular language. we surmise that it would not be any different from the salary structure applied for work done out-of-port. She complied but the company reneged on its undertaking. it was only Aguanza who did not report for work in Bataan. neither was there a clear discrimination against him. the company claims that Malig-on voluntarily resigned. when Malig-on reportedly dropped out of sight and the company had no idea about the reason for it. and thus filed his irrevocable resignation from Outdoor Clothing effective at the close of office hours on March 15. that Malig-on went to the NLRC to file a complaint for unjust dismissal just three days after she filed her alleged resignation letter is inconsistent with genuine resignation. The company evidently placed Malig-on on floating status after being relieved as janitress in a client’s workplace. 2000. Second. An illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. MANOLO A. and PAUL LEE. the company may be considered to have constructively dismissed her from work. a period of two years and six months. Her action would make sense only if. she had been on floating status for over six months and the company promised to give her a new assignment if she would go through the process of resigning and reapplying. Peñaflor felt that he was being eased out and this perception made him decide to leave the company. PEÑAFLOR. G. But. that petitioner has the burden of proof that his resignation was involuntary ISSUE: Whether or not petitioner was constructively dismissed HELD: Yes. they would have shown that Peñaflor’s resignation preceded the appointment of Buenaobra. if Malig-on had abandoned her work and had no further interest in it. Backwages represent compensation that should have been earned but were not collected because of the unjust dismissal. The gauge for constructive dismissal is whether a reasonable person in the employee’s position would feel compelled to give up his employment under the prevailing circumstances. MEDYLENE M. the company tricked her into filing for resignation upon a promise to give her a new work assignment and failed to deliver such promise. 1999. the Supreme Court in its January 2010 decision. Thus. After just three days from tendering her resignation. as Malig-on claims. vs. when it ran up to more than six months. The fact of filing a resignation letter alone does not shift the burden of proving that the employee’s dismissal was for a just and valid cause from the employer to the employee. 2002 and September 2. the Court has held that the grant of separation pay. Peñaflor decided to permanently sever his ties with Outdoor Clothing. ruled that petitioner was indeed constructively dismissed because the records of the case showed that petitioner indeed filed his resignation after the alleged appointment of Buenaobra and that the memoranda submitted by the respondent. consequently. when she began her employment to 2005. as the Court has repeatedly ruled. 177114 April 13. Malig-on can be said to be entitled to reinstatement from the time she was constructively dismissed in August 2002 until the NLRC ordered her immediate reinstatement in February 2005. this petition filed as motion for reconsideration on the ruling of the Court. It would make sense only if. Thus. But these notices cannot possibly take the place of the notices required by law. No. both amounts—the backwages and the separation pay—to bear interest of 6 percent per annum until fully paid. DEMOGENA. respondent raised that the resignation of petitioner was irrevocable and voluntary. He thereafter filed an illegal dismissal complaint with the labor arbiter claiming that he had been constructively dismissed. a period of nine years. . They came more than six months after the company placed her on floating status and. that is. as of August 16. as already stated. showing that petitioner resigned on March 1 2000 was not actually received by petitioner and was only raised during the appeal with the NLRC. Still. This falls squarely within the concept of constructive dismissal that jurisprudence defines. Malig-on hastened to the NLRC and accused her employer of illegal dismissal. Precisely because of the attendant hostile and discriminatory working environment. But since. insensibility. such act of “off-detailing” Malig-on was not the equivalent of dismissal so long as her floating status did not continue beyond a reasonable time. For this she is entitled to backwages. hostile. Under the circumstances. Finance Manager. After enduring what he claimed as discriminatory treatment at work. there was no reason for her to suddenly show up at her former place of work after eight months and file her resignation letter. If these memoranda were authentic. when she is deemed to have been actually separated from work. The NLRC. NATHANIEL T. Outdoor Clothing did not discharge this burden by belatedly presenting the three memoranda it relied on. and unfavorable conditions set by the employer. Thus. or disdain by an employer exists and has become unbearable to the employee. OUTDOOR CLOTHING MANUFACTURING CORPORATION. asking her to explain her failure to report for work and informing her that the company would treat such failure as lack of interest in it. as she claimed. 2010 FACTS: Peñaflor was hired as probationary HRD Manager of Outdoor Clothing on September 2. the circumstances already rule out actual reinstatement. Chairman. Nathaniel Syfu (Syfu). 2002. finding that there was no constructive dismissal on the respondent’s part. Peñaflor learned that Outdoor Clothing’s President. the company gave her those notices after it had constructively dismissed her from work. But. respectively. SYFU. and that nothing legally prevented them from submitting additional documents in the NLRC. appointed Edwin Buenaobra (Buenaobra) as the concurrent HRD and Accounting Manager. she is entitled to separation pay at the rate of one month for every year of service from 1996. 2002 could not have been legally possible. The company of course claims that it gave Malig-on notices on August 23. it does not necessarily signify that it was also voluntarily executed. This did not happen here.R. her purported resignation on October 15. her reinstatement to her former position would only result in a highly hostile work environment for the parties and might further worsen their relations which are already scarred by the present case. Indeed. 2000. the company needed to write Malig-on immediately and ask her to explain in writing why she should not be considered to have abandoned her job so the company may be cleared of its responsibility as employer. as involuntarily resignation due to the harsh. Peñaflor considered the appointment of Buenaobra to his position as the last straw. With the appointment of Buenaobra to the position he then still occupied. In its motion for reconsideration. rather than reinstatement. 2002. 2001. may be proper especially when the latter is no longer practical or will be for the best interest of the parties. On March 13. And. While the letter states that Peñaflor’s resignation was irrevocable. It arises when a clear discrimination. third. on appeal. The labor arbiter agreed with Peñaflor and issued a decision in his favor on August 15. however receresed the decision of the labor arbiter.she had suddenly vanished. among others. more than six months from the time he was hired. President. and Lee was not sufficiently proven to justify a ruling holding them solidarily liable with Outdoor Clothing. Petitioner. Undeniably. he was not entitled to separation pay respondents only on the filing of the complaint for separation pay. with the intention of relinquishing the office accompanied by the act of relinquishment. malice or bad faith on the part of the Syfu. petitioner filed an Amended Complaint to include “illegal dismissal” as another cause of action respondents alleged that petitioner already thought of resigning from his job when he learned that separation pay could not be expected as a result of the takeover of Orata Trading by Orizon Trading Corporation. and one who has no other choice but to dissociate oneself from employment. This intention was eventually effected when petitioner refused to continue to work on June 3. Payno was employed as electrician by Orata Trading.2[12] If petitioner was determined to resign. we find no overt act on the part of petitioner that he was ready to sever his employment ties. Ruling: Yes ⇒ In termination cases. Resignation is inconsistent with the filing of the complaint for illegal dismissal. offered him the amount of P7. He was. Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service. Petitioner refused since it was insufficient. it is incumbent upon the employer to prove either the nonexistence or the validity of dismissal. petitioner was informed by the personnel manager that Orata Trading would cease its business operations and that Orizon Trading Corporation was taking over. petitioner was called to the office. petitioner was unceremoniously dismissed in this case. respondent Flordeliza Legaspi. 2009 Facts: ⇒ ⇒ ⇒ ⇒ ⇒ ⇒ Petitioner Baltazar L. informed that he would have to sign a new employment contract with Orizon Trading Corporation. but this alone is not sufficient proof that petitioner intended to resign from the company. he would not have commenced the action for illegal dismissal. respondents had the burden to prove the same. Demogena. continued to work with Orizon Trading Corporation. 2000. What strongly negates the claim of resignation is the fact that petitioner filed the amended complaint for illegal dismissal immediately after he was not allowed to report for work on June 3. however. ⇒ ⇒ ⇒ Issue: whether or not petitioner was illegally dismissed. August 19. petitioner filed a complaint against Orizon Trading for payment of separation pay due to the closure of Orata Trading.1[11] It would have been illogical for petitioner to resign and then file a complaint for illegal dismissal later on. and was told not to report for work anymore if he did not sign the employment contract. nonetheless.000. It is a formal pronouncement or relinquishment of an office.With regard to the solidary liability of Outdoor Clothing’s corporate officers. in fact. No. As the intent to relinquish must concur with the overt act of relinquishment.R. as respondents posited. Petitioner asked about the status of his employment./ Orata Trading and Flordeliza Legaspi. He was told that no separation pay was forthcoming. Since he voluntarily resigned.Baltazar L. 2000. Inasmuch as respondents alleged petitioner’s resignation as the cause of his separation from work. G. the acts of the employee before and after the alleged resignation must be considered in determining whether. Payno vs. The general manager. Perturbed with the new set-up. The alleged resignation was actually premised by ⇒ ⇒ 1 2 . since Orizon Trading Corporation was merely absorbing Orata. In this case. 59. 175345. Orizon TradingCorp. he intended to sever his employment. and further inquired if he would be receiving separation pay due to the closure of Orata Trading.00 as separation pay. The case of the employer must stand or fall on its own merits and not on the weakness of the employee’s defense.