Labor1 Digest Part6

8/9/2019 Labor1 Digest Part6

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Labor Law 1 A2010 - 186 - DisiniSECTION 14: TERMINATION OFEMPLOYMENT

A. GENERAL CONCEPT

14.01 SECURITY OF TENUREA. NATURE OF SECURITY OF TENURE

SONZA V ABS-CBN BROADCASTING CORP[PAGE 42]

ALHAMBRA INDUSTRIES V. NLRC (RUPISAN)238 SCRA 232

BELLOSILLO; November 18, 1994

NATURESpecial civil action in the Supreme Court. Certiorari

FACTS- Alhambra employed Rupisan as salesman on 6-moprobationary basis. Alhambra made surprise audit, allegedviolations were purportedly committed by him. He was placedunder 1-mo preventive suspension. He protested. He allegesthat charges against him had become academic when he wasgiven clearance of all accountabilities.- A day before end of suspension, he was terminated. He suedAlhambra.- Labor Arbiter found that the termination was for just cause,but there was a violation of due process (failure to furnish copyof audit report).- Both parties appealed to NLRC which affirmed Arbitersfindings.

ISSUE

WON NLRC committed grave abuse of discretion in sustainingfinding of Labor Arbiter that Rupisan was illegally dismissed butdirecting his reinstatement so he could have explained

HELDYES- Employment is no longer just an ordinary human acctivity. Formost families the main source of their livelihood, employmenthas now leveled off with property rights which no one may bedeprived of without due process of law.- Termination of employment is not anymore a mere cessationor severance of contractual relationship but an economicphenomenon affecting members of the family. This explainswhy under the broad principles of social justice the dismissal ofemployees is adequately protected by the laws of the state.- A termination without just cause entitles a worker toreinstatement regardless of whether he was accorded dueprocess. On the other hand, termination of a worker for cause,even without procedural due process, does not warrantreinstatement, but the employer incurs liability for damages.- Since the Labor Arbiter found a valid ground for dismissal, iterred when it directed reinstatement.- To order reinstatement and compel the parties to start theprocedure from step one would be circuitous because almostinvariably that same issue of validity of the ground of dismissalwould be brought back to the Labor Arbiter for adjudication. Welaid down in Wenphil Corporation v. NLRC3 that an otherwise

justly grounded termination without procedural due processwould only sanction payment of damages- Standards of due process in judicial as well as administrativeproceedings have long been established. In its bare minimumdue process of law simply means giving notice and opportunity

to be heard before judgment is rendered.- When the private respondent filed a complaint againspetitioner, he was afforded the right to an investigation by thelabor arbiter.- Although belatedly, private respondent was afforded dueprocess before the labor arbiter wherein the just cause of hisdismissal had been established. With such finding, it would bearbitrary and unfair to order his reinstatement with backwages.- It will be highly prejudicial to the interests of the employer to

impose on him the services of an employee who has beenshown to be guilty of the charges that warranted his dismissafrom employment. Indeed, it will demoralize the rank and file.- However, the petitioner must nevertheless be held to accounfor failure to extend to private respondent his right to aninvestigation before causing his dismissal.

MANILA ELECTRIC COMPANY V NLRC (LOMABAO,MASAYA)

186 SCRA 763NARVASA; July 2, 1991

NATURECERTIORARI

FACTS- Jose Masaya made an unauthorized electric service connectionwhich supplied electricity to the house of Antonio Sanchez (whopaid the former Php 200 for making the said connection.)- Sanchez neither applied with Meralco for electric service nomade the requisite deposit for it.- This clandestine and illicit connection was eventuallydiscovered by Meralco who then charged him (through a letter)with a violation of the Company Code on Employee Disciplineand thereafter conducted a formal investigation of the matter.- Those who gave testimony at that investigation were JoseMasaya himself, and Renato Repuyan, Meralco fieldinvestigator.- Prior to being interrogated about the illegal connection and inresponse to preliminary questions by the investigator, Masayastated for the record that he had received the letter accusinghim of misconduct, that he had a copy of the code of disciplineand understood the nature of the precise charge against himand that he did not need to be assisted by a lawyer or arepresentative of his Union because he said that what he wasabout to say was pawing katotohanan lamang.- Repuyan testified on the fact of the undenied and indisputableinstallation of the illegal electrical connection at the residenceof Antonio Sanchez (his description of the manner of itaccomplishment being substantially the same as Masaya'own), and also, the disclosures made to him by Sanchez's househelpers and the owner of the house- After the investigation, and on the basis of the results thereofMeralco filed with the Ministry of Labor and Employment anapplication for clearance to terminate Masaya's servicesserving copy on the latter.- Meralco also placed Masaya under preventive suspension.

- A week later, Masaya filed a complaint for illegal dismissaagainst Meralco.- After the trial, LA Andres M. Lomabao rendered a decision inMasaya's favor; saying that the record of the investigationconducted by Meralco should not be accorded credence; thatMeralco's contention that Masaya had "surreptitiously effectedthe direct connection of . . . electric service" was not crediblebecause Masaya "was employed as a bill collector, not as alineman collector, hence, he does not know how to instaelectrical connection;" and that the money received by Masayafrom Sanchez (P200 or P250) was not in consideration of anyclandestine connection but was accepted as "representationexpenses in following up Mr. Sanchez' application foinstallation of electric facilities . . . with the Engineer's Office atthe City Hall of Manila.


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Labor Law 1 A2010 - 187 - Disini- NLRC affirmed the Arbiter's decision; said that since Meralcowas charging Masaya of a criminal offense, it should provebeyond reasonable doubt (pbrd) said crime which it was notable to do as it was not shown that Masaya was given theopportunity to be heard by counsel or at least, a representativeto confront his accuser; that based on the doctrine of PBRD,there is no causal connection between Masaya' s duties to thecrime imputed to him, mere substantial evidence is insufficientto hold Masaya guilty of installing electrical connection let alone

deprive him of his right to labor."

ISSUEWON the LA & the NLRC committed GABD in failing to take intoconsideration or excluding Masayas admissions in theirprononcement that Masaya was illegally dismissed

HELDYESReasoningNLRCS ERROR:- Masaya was in truth asked if he wished to be assisted by alawyer or a representative of his Union, and his response was inthe negative because, in his own words, "ang sasabihin konaman dito ay pawang katotohanan lamang"- In administrative or quasi-judicial proceedings, PBRD is notrequired as basis for a judgment of the legality of an employer'sdismissal of an employee, nor even preponderance of evidence,substantial evidence being sufficient.- LC: the rules of evidence prevailing in courts of law or equityshall not be controlling and it is the spirit and intention of thisCode that the Commission and its members and the LaborArbiters shall use every and all reasonable means to ascertainthe facts in each case speedily and objectively and withoutregard to the technicalities of law or procedure, all in theinterest of due process. . . .- SC: the ground for an employer's dismissal of an employeeneed be established only by substantial evidence.

- It is absolutely of no consequence that the misconduct withwhich an employee may be charged also constitutes a criminaloffense-The proceedings being administrative, the quantum of proof isgoverned by the substantial evidence rule and not, as the

respondent Commission seems to imagine, by the rulegoverning judgments in criminal actions.-The Court cannot close its eyes to the following facts of record,to wit:

1) the reality of the illegal electrical connection;2) the letter to Masaya accusing him of misconduct3) Masaya's acknowledgment that, having a copy of thecompany's code of discipline, he understood the nature of theaccusation against him, and his declining to be assisted by alawyer or a representative of his Union because, according tohim, "ang sasabihin ko naman dito ay pawang katotohananlamang;"4) his voluntary admission that it was he who had made theillegal electrical connection, describing the manner by whichhe had made it, and that he had received P250.00 from theoccupant of the house, Antonio Sanchez; and

5) his plea to the company for forgiveness for having madethe illegal connection.- on record: testimony regarding identification of Masaya byAntonio Sanchez' servants and by Castaeda, the owner of thehouse occupied by Sanchez.- nothing in the record to demonstrate that Masaya'sadmissions were made otherwise than voluntarily.- Such an offense is obviously of so serious a character as tomerit the penalty of dismissal from employment, as stated inthe Meralco Code on Employee Discipline:

SECTION 7. Dishonesty. xxx xxx xxx3) Directly or indirectly tampering with electric meters ormetering installation of the Company or the installation ofany device, with the purpose of defrauding the Company.

-The Labor Code pronounces "fraud or willful breach by theemployee of the trust reposed in him by his employer orduly authorized representative," or "serious misconduct"on the part of the employee to be lawful ground toterminate employment.Ratio And this Court has held that the "dismissal of adishonest employee is as much in the interests of laboas it is of management. The labor force in any companyis protected and the workers' security of tenure

strengthened when pilferage of equipment, goods andproducts which endangers the viability of an employerand, therefore, the workers' continued employment isminimized or eliminated and consequently labormanagement relations based on mutual trust andconfidence are promoted."(*IN short: Tenurial Security is not an absolute right for the lawprovides that an employee may be dismissed for just cause. )Disposition Petition for certiorari is GRANTED, the decisions othe NLRC and LA are ANNULLED AND SET ASIDE, and thepetitioner's termination of the employment of privaterespondent is AUTHORIZED and APPROVED

CITYTRUST BANKING CORPORATION V NLRC (RUIZ)258 SCRA 621

MENDOZA; July 11, 1996

NATURESpecial civil action in the Supreme Court. Certiorari

FACTS- Private respondent Ruiz was the internal auditor of petitionerCitytrust Banking Corporation. She was designated manager othe Quiapo branch of the bank, but she refused theappointment on the ground that it was a demotion. As aconsequence, she was suspended and, upon clearance given bythe Department of Labor, she was terminated on November 81974.- Private respondent filed a complaint for illegal dismissal. Shewas ordered reinstated as branch manager, the NLRC urgingher to accept the position, otherwise her refusal would beconsidered a ground for her loss of employment. Private

respondent appealed to the Minister of Labor (now Secretary oLabor and Employment) but again she lost. Both parties thenappealed to the Office of the President, which orderedpetitioner to reinstate private respondent to her former positionas internal auditor and to pay her backwages from the time hecompensation was withheld up to the time of her reinstatement- Petitioner moved for a reconsideration on the ground that theposition of internal auditor had been abolished (although theposition of resident inspector was created in its stead), andtherefore in lieu of reinstatement, it should only be made to payprivate respondent's separation pay. The Office of thePresident modified its decision and ordered petitioner toreinstate private respondent to a substantially equivalenposition without loss of seniority rights and to grant her thebenefits and privileges to which she would be entitled had shenot been dismissed.

- Subsequently, petitioner reinstated private respondent amanager of the Auditing Department. Private respondenaccepted the appointment but questioned her reinstatement tothat position on the ground that it was not substantiallyequivalent to the position of resident inspector (the positioncreated in place of internal auditor). She also questioned theaward of backwages as the report of the socio-economic analysallegedly did not include backwages from April 1974 to June1974 when she was on leave with pay and vacation and sickleave in 1974 and other fringe benefits to which she wasentitled before her termination.- Labor Arbiter Apolinario N. Lumabao issued an order holdingthat the position of manager of the Auditing Department wanot substantially equivalent to that of resident inspectorpossible as it appears (that) the position is already filled up (,) trelocate complainant to a substantially equivalent position wit


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Labor Law 1 A2010 - 188 - Disiniall the emoluments and privileges of a Resident Inspector.Respondent is hereby further ordered to pay.- The NLRC affirmed the Labor Arbiter's order with modificationby ordering the following to be added to the award: (a) Hervacation and sick leave privilege during the period of herseparation in accordance with the disposition hereinbeforestated in the body of this Resolution, and (b)the normalincreases which complainant would have received during theperiod of her separation.

- In connection with the computation of the award in her favor,private respondent sought the production of the bank's payrollsfor 1974-1981. Her motion was opposed by petitioner whichoffered instead P74,344.00, the total amount of backwages ascomputed by the socio-economic analyst of the Department ofLabor, plus P9,040.00 in transportation allowance andP1,050.00 mid-year bonus for 1974.- Private respondent refused the offer, hence the NLRC directedthe analyst to compute the award on the basis of the payrollsfrom 1974 to 1981. Petitioner appealed to the NLRC en banc,but its petition was dismissed, on the ground that the orderappealed from was interlocutory.- Petitioner filed a petition for Certiorari and Prohibition with thisCourt, assailing the dismissal of its appeal. The petition was atfirst dismissed for lack of merit. Petitioner's motion forreconsideration was also dismissed. On July 21, 1986 this Courtmodified its decision and petitioner was ordered to pay privaterespondent "backwages limited to three years withoutqualification or deduction at the salary rate of privaterespondent at the time of dismissal."- The Labor Arbiter issued an alias writ of execution after findingthat the amount corresponded to the amount found due privaterespondent in the decision of the NLRC and the resolution ofthis Court, consisting of salary differentials and other fringebenefits which were not paid to her from the time that she wasreinstated on August 14, 1978 as manager of the AuditingDepartment.- Petitioner moved to quash the alias writ of execution. As itsmotion was denied, it filed a petition for Injunction in the NLRCen banc to stop the implementation of the alias writ ofexecution and prayed for a recomputation of the monetaryaward pursuant to this Court's resolution of July 21, 1986. Itspetition was, however, denied, as was its motion for

reconsideration, in the resolutions of the NLRC. Hence, thispetition.

ISSUEWON private respondent is entitled to only three years ofbackwages and no more

HELDNO- Private respondent is, in addition, entitled to reinstatementwithout loss of seniority rights. Art. 280 of the Labor Codeprovides:

ART. 280. Security of Tenure. In cases of regularemployment, an employer shall not terminate the services ofan employee except for a just cause or when authorized bythis title. An employee who is unjustly dismissed from

work shall be entitled to reinstatement without loss ofseniority rights and to his backwages computed from thetime his compensation was withheld from him up to the timeof his reinstatement. (emphasis supplied)

- Backwages are for earnings which a worker has lost due to hisillegal dismissal. Private respondent was illegally dismissedfrom November 8, 1974 to August 13, 1978. In its May 28,1985 Report, the socio-economic analyst computed privaterespondent's backwages for this period but he erroneouslyconsidered as backwages private respondent's salarydifferential from August 14, 1978 to October 31, 1984. OnAugust 14, 1978, private respondent had already beenreinstated, albeit to a lower paying position as manager of theAuditing Department. Hence the award of backwages should beup to August 13, 1978 only. What she was entitled to receiveafter that date was the difference between the salary of internal

auditor (resident inspector) and that of manager of the AuditingDepartment to which she was actually appointed. This positionas already noted, was found to be not a substantially equivalenposition to that of internal auditor or resident inspector.- The resolution of July 21, 1986 of this Court, which limited theaward of backwages, referred to the backwages for the periodNovember 8, 1974 to August 13, 1978 as component of therelief granted by law to those who are illegally dismissed. TheCourt at that time limited the award of backwages to three

years without qualification and deduction to avoid delayincident to the determination of the earnings of the laid-ofemployees during the pendency of the case and of deductingthem from the backwages later awarded.- The second component of the relief granted under then Art280 of the Labor Code was reinstatement either to their formerposition or if, this was not possible, to a substantially equivalenposition. Reinstatement contemplates a restoration to a positionfrom which one has been removed or separated so that theemployee concerned may resume the functions of the positionhe already held. Private respondent was the internal auditor ofpetitioner at the time of her dismissal. Since this position hadbeen replaced by the position of resident inspector, privaterespondent should have been appointed resident inspector

The position of manager of the Auditing Department to whichshe was appointed was not a substantially equivalent positionas found by the Labor Arbiter in his order of February 26, 1979and later by the NLRC.- The order to reinstate an employee to a former position or to asubstantially equivalent position is a positive mandate of thelaw with which strict compliance is required. This is anaffirmation that those deprived of a recognized and protectedinterest should be made whole so that the employer will notprofit from his misdeeds.- Since private respondent retired from the bank on March 11991, reinstatement is now academic. She should therefore bepaid the difference in pay of a resident inspector and amanager of the Auditing Department from August 14, 1978 upto March 1, 1991.Disposition Petition dismissed.

PHILIPS SEMICONDUCTORS V FADRIQUELA

[PAGE 77]

QUIJANO V BARTOLABAC480 SCRA 204

TINGA; January 27, 1999

FACTS- Quijano was employed by Mercury Drug Corporation as awarehouseman --- a clerical/rank and file position. He wasdismissed, so he filed a complaint with the NLRC for illegadismissal. The case reached the SC. In 1998, the SC ruled fohis reinstatement to his old position or to a substantially similaposition. The SC denied the companys mfr, and came out witha resolution in 1999 for Quijanos reinstatement.- Whats this case all about, then? The respondents in this case

are the LA and the NLRC commissioner, respectively. Quijanofiled a case against then for violation of Canon 1 and Rule 1.01of the Code of Professional Responsibility. WHY? They gave outorders contrary to the resolution of the SC. The LA said to makehim self-service attendant because accdg to mercury therewere only 4 positions open. All 4 positions required collegegraduates, but LA said he thinks Quijano could handle the selfservice attendant job. The NLRC commissioner said since thereare no available positions, he should just be given separationpay.

ISSUEWON Bartolabac & Quimpo erred

HELDYES


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Labor Law 1 A2010 - 189 - Disini- The decision of the SC was already final and executory. Theyhad no place to use discretion in executing a final andexecutory order of the Supreme Court. SUPREME. If the final &executory orders of the SC would be second-guessed by otherbodies, then cases would never reach finality. Theimplementation of the final and executory decision ismandatory. (The court was disappointed in the IBPrecommendation to dismiss the complaint against Bartolabac &Quimpo.)

- The SC wont compel to instantly restore the position ofwarehouseman if it had already been abolished. It ruled thatQuijano should be reinstated to original or substantially similarposition. They took notice of Mercury Drugs nationwideoperation. SC couldnt believe that they wouldnt have aposition for Quijano.- Our Constitution mandates that no person shall be deprived oflife, liberty, and property without due process of law. It shouldbe borne in mind that employment is considered a propertyright and cannot be taken away from the employee withoutgoing through legal proceedings. In the instant case,respondents wittingly or unwittingly dispossessed complainantof his source of living by not implementing his reinstatement. Inthe process, respondents also run afoul of the public policyenshrined in the Constitution ensuring the protection of therights of workers and the promotion of their welfare.Disposition Bartolabac & Quimpo suspended from the practiceof law for 3 months for violation of Canon 1 and Rule 1.01 ofCPR.

B. IMPORTANCE OF EMPLOYMENT

EMPLOYMENT

GONZALES V NLRC (ATENEO DE DAVAOUNIVERSITY)313 SCRA 169

BELLOSILLO; August 26, 1999

FACTS- Lorlene Gonzales was a Grade 6 teacher in Ateneo de DavaoUniversity from 1974 to 1993, when she was terminated. In1991, the Grade School Headmaster sent her a letter informingher of 2 complaints from parents of her students for alleged useof corporal punishment. She demanded to know who theparents were because Ateneo wouldnt tell her. When she foundout that Ateneo was soliciting complaints from parents of herstudents, she demanded an investigation.- Ateneo sent her a notice of investigation, schedule,

Committee composition, affidavits of the parents, and the rulesof procedure. She refused to take part in the investigationunless the rules of procedure were revised. The committee,under advise of counsel, did not revise the rules, since it hadbeen used for a different teacher in the past. The investigationwent on, without her participation. In 1993, she was asked totender her resignation, otherwise she would be consideredresigned.- Lorlene filed for illegal dismissal with the LA. The LA foundthat she was indeed illegally dismissed because although shewas afforded due process, Ateneo failed to establish substantialevidence as to Lorlenes guilt. It was established that she is avery good teacher, equipped with the appropriate educationalqualifications, trainings, seminars and work experiences. Suchfact was affirmed by her present and former students, theirparents, colleagues and the former headmaster of the grade

school. As a matter of fact, 6 out of the nine 9 students andtheir parents/guardians retracted and withdrew theistatements.- NLRC reversed LAs decision, saying the dismissal was validand legal.

ISSUEWON dismissal was valid and legal

HELDNO- In view of the foregoing, the conclusion of the NLRC isunwarranted.No due process The committee refused to revise the rules oprocedure. As a result, Lorlene wasnt afforded a chance defendherself and to examine / cross-examine the accusers.Failure to prove by substantial evidence The evidence oAteneo didnt measure up to the standard laid down in Ang

Tibay v CIR: "substantial evidence is more than mere scintilla. Imeans such relevant evidence as a reasonable mind mighaccept as adequate to support a conclusion."Lorlenes evidence She was able to prove that shes acompetent and dedicated teacher of Ateneo for 17 years.- Employment is not merely a contractual relationship; it hasassumed the nature of property right. It may spell thedifference whether or not a family will have food on their tableroof over their heads and education for their children. It is forthis reason that the State has taken up measures to protectemployees from unjustified dismissals. It is also because of thisthat the right to security of tenure is not only a statutory rightbut, more so, a constitutional right.Disposition NLRC decision reversed and set aside. LA decisionreinstated, affirmed and adopted.

C. STATE REGULATION - RATIONALE

RATIONALE

LLOSA-TAN V SILAHIS INTERNATIONAL HOTEL181 SCRA 738

PARAS; February 5, 1990

NATUREPetition for certiorari seeking to set aside the decision andresolutions of the NLRC

FACTS- The complainant was a front office cashier of SilahisInternational Hotel since November 2, 1976 until her questioneddismissal on October 30, 1982.- Since 1977, the Silahis International Hotel, had a standingcorporate policy (Corporate Policy No. 014), which orders alcashiers of SMC and its affiliates to refuse the cashing opersonal checks of employees and officials, endorsement byany executive of the Sulo Management Company, or Philippine


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Labor Law 1 A2010 - 190 - DisiniVillage Hotel or Silahis International Hotel or Sulo Hotelnotwithstanding, because based on experience, a number ofthese checks unfortunately bounce to the detriment of SMC andits affiliates.- On August 22, 1982, while petitioner was on duty, she wasapproached by Mr. Gayondato, the general cashier of PuertoAzul Beach Resorta sister company of Silahis InternationalHotel and nephew of the Executive Vice President, to encashtwo (2) US dollar checks with a combined value of US$1,200.00

or P10,389.60.- Although petitioner politely explained the existence of PolicyNo. 014 prohibiting such transactions, Gayondato persisted andassured that the presentation of aforesaid checks to the frontoffice cashier was upon instructions of the Executive VicePresident.- Petitioner, eventually encashed the aforesaid checks,notwithstanding Corporate Policy No. 014.- Thereafter, the said checks bounced.- On October 1, 1982, respondent Vanessa Suatengco issued amemorandum to the petitioner requiring her to explain inwriting why she should not be terminated for encashing the two(2) personal checks without proper authorization.- Despite petitioner's explanation, her services were terminatedeffective October 30, 1982.- Petitioner filed a complaint against respondents for illegaldismissal.- Labor Arbiter Virginia G. Son rendered a decision in favor ofpetitioner.- Hotel appealed the decision of the LA to the NLRC, and theNLRC rendered a decision setting aside the decision of theLabor Arbiter and dismissing the complaint for illegal dismissalfor lack of merit- Petitioners 2 MFRs having been denied, recourse was made tothe SC

ISSUEWON the acts of petitioner constitute gross negligence resultingin a valid ground for the termination of her employment

HELDNO- Gross negligence has been defined as the want of any or slight

care or the utter disregard of consequences.- Admittedly, the encashment of the checks in question is aviolation of Policy No. 014 of said hotel. But as found by theLabor Arbiter, it was established that: (a) complainant was notmotivated by bad faith; (b) Policy No. 014 is not strictly orconsistently enforced but has been relaxed repeatedly to meetbusiness exigencies; and (c) complainant's encashment of thechecks in question was not only with the knowledge but withclearance from her superiors who are more knowledgeable as tothe circumstances under which the enforcement of the samemay be relaxed.- Moreover, it cannot be said that complainant was precipitateor that she has acted in utter disregard of consequences. Onthe contrary, she refused to encash subject checks despite therequest of Mr. Gayondato, the general cashier of Puerto Azul,but was persuaded only upon the assurances of the latter that

such was the wish of the Executive Vice President and that saidencashment was necessary to meet certain disbursements inPuerto Azul. In addition, she informed personally Mr. SamuelGrulla, Assistant Manager of the Silahis International Hotel, ofsaid encashment, who also told her that such is "alright".- Finally, against the background of her previous experiencewhen she refused to encash a similar check for Mr. Katte, theFood and Beverage Manager of Silahis International Hotel, andthat she was reprimanded by the management of the SilahisInternational Hotel for her refusal, as well as threatened withsuspension or dismissal from her job, coupled with the advice ofMr. Nestor Famatigan, Jr., Silahis International HotelComptroller, to use her discretion in handling similar requests inthe future, it is not at all surprising that she opted to takesubject course of action.

- It is well settled that dismissal based on loss of trust andconfidence arising from alleged misconduct of employee, is notto be used as a shield to dismiss an employee arbitrarilyAlthough the power to dismiss is a normal prerogative of theemployer, the same is not without limitations. The right of theemployer must not be exercised arbitrarily and without juscause. Otherwise, the constitutional guarantee of security otenure of the workers would be rendered nugatory. Whiledismissing or laying off of an employee is a management's

prerogative, it must nevertheless be done without abuse odiscretion. Furthermore, the right of employer to freely select odischarge his employees is regulated by the State, because thepreservation of the lives of the citizens is a basic duty of theState, more vital than the preservation of the corporate profitIn addition, security of tenure is a right of paramount valueguaranteed by the Constitution and should not be denied onmere speculation. Protection for labor and social justiceprovisions of the Constitution and the labor laws and rules andregulations are interpreted in favor of the exercise of laborights.Disposition The assailed decision of the NLRC is DISMISSEDand SET ASIDE and private respondent Silahis InternationaHotel is ordered to reinstate petitioner Anita Llosa-Tan to heformer position or similar position without loss of seniority rightswith full backwages beginning October 30, 1982 for a period ofthree (3) years therefrom.

D. COVERAGE

CONTRACT EMPLOYEE

LABAJO V ALEJANDRO165 SCRA 747

FELICIANO; September 26, 1988

NATUREPetition for certiorari with preliminary injunction to review NLRCresolution

FACTS- The 6 private respondents had all been contracted by thepetitioners to work as classroom teachers at the San Andres HSa private learning institution situated in Maramag, Bukidnon

They then filed a complaint before the Ministry of Labor andEmployment, alleging that they had each received a letter frompetitioner Fr. Labajo, Director of the San Andres High Schoowhich contained: Please be informed that your service at theSan Andres High School will be terminated effective March 31,1985.Thank you for all services you have rendered to theschool.Thus, their dismissal was without justifiable cause andviolated their rights to due process and security of tenure.Petitioners Claims> It was admitted that they had not paid in full the employmenbenefits claimed by the teachers. It was alleged, however, thatprivate respondents, prior to their acceptance of teaching jobs

at the San Andres High School, "were already made aware thathe school could not give them everything due them undeexisting laws" and, hence, were estopped from claiming suchbenefits.> At time of their dismissal, they were merely probationaryemployees of the San Andres HS whose services wereterminated for just cause (upon expiration on 31 March 1985 oftheir respective contracts and before any of them had achievedregular or permanent status in their jobs.)* Labor Arbiterruled in favor of the teachers. It held that theywere not probationary employees, and that they could only bedismissed for cause and only after having been accorded dueprocess.* NLRC affirmed Labor Arbiters decision.


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Labor Law 1 A2010 - 191 - DisiniISSUEWON the respondents were illegally dismissed

HELDNORatio As probationary and contractual employees, privaterespondents enjoyed security of tenure, but only to a limitedextent i.e., they remained secure in their employment duringthe period of time their respective contracts of employment

remained in effect. As petitioners were not under obligation torenew those contracts of employment, the separation of privaterespondents in this case cannot be said to have been without

justifiable cause, much less illegal.Reasoning- Par 75 of the Manual of Regulations for Private Schools isapplicable in this case: Full-time teachers who have renderedthree years of satisfactory service shall be consideredpermanent. This 3-year period is the maximum period or upperlimit of probationary employment allowed. Whether or not onehas indeed attained permanent status in one's employment,before the passage of 3 years, is a matter of proof.- NONE of them had been able to accumulate at least 3 years ofservice with the San Andres HS at the time of their separation.- Private respondent AMAR argued that the 12 years of teachingexperience he had accumulated prior to his acceptance ofemployment at San Andres qualified him as a regular employeethereof. This is not persuasive since it is the length of time Mr.Amar has been teaching at San Andres that is material indetermining whether or not he in fact qualified as a regularemployee.- Respondent ALEJANDRO asserted that her appointment as"Night Principal" after having served a year thereat as a non-regular full-time teacher amounted to a promotion whichraised her status to that of a regular employee. This is also notpersuasive because mere appointment as "Night Principal" isnot, by itself and absent any additional evidence, sufficientproof that her employment status had in fact been upgradedfrom probationary to regular.- The contracts of employment entered into by the San AndresHS separately with each of the respondents stipulated, amongothers: (a) that employment of the individual concerned tookeffect at the beginning of the school year, or sometime in the

month of June; and (b) that payment of that individual's salarywould be made "every month for 10 months." We read thesestipulations together to mean that such contracts each had aneffective term of ten (10) months, i.e., from June until eitherMarch or April of the following year. New contracts for anotherperiod of ten months were negotiated between them at thebeginning of each school year. It does not appear from therecord or from the stipulations in those contracts, however, thatrenewal was obligatory upon either party.- Private respondents claimed that Fr. Labajos allegedly"unusual antedated letter of termination" did not sufficientlyinform them of the reasons for their dismissal, nor did it satisfythe due process requirements in termination cases. Thesecontentions ignore the fact that their employment was on acontractual basis and for a stipulated period of time.- The use of the word "terminated" was inept and unfortunate

but need not preclude recognition of the real nature of thatletter. Such letter was either a formal reminder that theircontracts were due to expire OR advance notice that suchcontracts would no longer be renewed for the next school yearOR both. Assuming that prior notice of expiration of thecontractual term was necessary in this case, we consider thatFr. Labajo's letter substantially complied with that requirement.* Since the six (6) private respondents were not illegallydismissed, the twin remedies of reinstatement and backwagesare not available to them. Dispositive NLRC Resolution is SETASIDE, except for the portion directing petitioners to payP52,173.67 in favor of private respondents.

PROBATIONARY EMPLOYEE

SKILLWORD MANAGEMENT AND MARKETINGCORPORATION V NLRC (MANUEL)

186 SCRA 465MEDIALDEA; June 13, 1990

NATURE

Petition for certiorari

FACTS- On June 24, 1983, Francisco Manuel was deployed to SaudArabia to work as driver by petitioner Skillworld Managemenand Marketing, a duly licensed recruitment agency operated bypetitioners-spouses Serafin and Alicia Ramos. Upon his arrival in

Jeddah, Manuel signed a 2-year employment contract with hiforeign employer, petitioner Shary Limousine for a monthlybasic salary of $300. 2 months later, Manuel was repatriated tothe Philippines. Upon his arrival in the Philippines, Manueconfronted the Ramoses who promised to deploy him to otheprojects.- After the lapse of more than one year without being deployedto other projects of petitioners, Manuel filed a complaint withthe POEA against petitioners for illegal dismissal. He allegedthat while he was employed as driver of Shary Limousine in its

branch at Jeddah he was stopped, and his driver's licensesought for inspection, by Saudi Arabian police. He showed thepolice two documents given to him by his employer, SharyLimousine who made him believe that these pertained to adriver's temporary license. However, Manuel was informed thatthe documents were not valid for a drivers license. Togethewith eleven other drivers, they brought the matter before theirsuperiors. Three days after bringing the matter to his superiorrespondent was ordered to pack his things. He was taken toRiyadh and from there, repatriated to the Philippines. Uponrespondent's arrival in the Philippines, he requested theMinistry of Foreign Affairs for a translation of what purported tobe his driver's license. When translated it was only acertification of employment with Shary Limousine in its branchat Jeddah.- Petitioners alleged that Manuels dismissal was for a valid and

just cause. Petitioners alleged that Manuel was dismissebecause of disobedience, absenteeism, refusal to work andbanding together to engage in concerted activities against theemployer.- POEA rendered judgment in favor of Manuel, directingpetitioners to pay him $6,900.00 or its peso equivalent. Uponappeal, the NLRC affirmed said decision.- According to petitioners, because of the probationary statuof the employment of Manuel, he may be dismissed at anytime. Furthermore, this agreement was contained in paragraphfour (4) of the employment contract signed by Manuel.

ISSUEWON Manuel was illegally dismissed

HELDYES- There is no dispute that as a probationary employee, Manuehad but a limited tenure. Although on probationary basishowever, he still enjoys the constitutional protection on securityof tenure. During his tenure of employment therefore, or beforehis contract expires, he cannot be removed except for cause asprovided for by law.- The alleged causes for which private respondent wasdismissed (disobedience, absenteeism, refusal to work, etc.were not established. Respondent NLRC found that thepurported temporary licenses to drive issued to Manuel and hisco-drivers by their employer-the Shary Rent a Car/Limousineturned out to be mere certifications to the effect that they areFilipino citizens who are holders of given passport numbers andthat they were sent to work with the Shary Limousine Branch in

Jeddah. It is for this reason that after being accosted twice a


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Labor Law 1 A2010 - 192 - Disinicheckpoints by Saudi police, who informed complainant and hisco-drivers that the alleged temporary licenses were not valid,they brought the matter first to their Lebanese superior andthen to the Philippine Embassy. - - Further, records show thatManuel reported for work regularly and even rendered regularovertime services; that he did not even attempt to join a strikeor any other form of mass action while working in Jeddah,because he knew that the laws in Jeddah are very strict andbeing a foreigner he did not have the courage to join much less

lead a strike which is prohibited there; that he and his co-workers merely inquired from the Philippine Embassy why theywere allowed to drive without licenses; and that their actionprompted the Philippine Embassy to write their employer, whichis perfectly in order as it was designed to protect them inforeign soil.

MANAGERIAL EMPLOYEE

INTERORIENT MARITIME ENTERPRISES INC V NLRC(TAYONG)

235 SCRA 268FELICIANO; August 11, 1994

NATUREPETITION for reviewof a decision of the National Labor RelationsCommission

FACTS- Captain Rizalino Tayong, a licensed Master Mariner withexperience in commanding ocean-going vessels, was employedon 1989 by petitioners for 1 yr as stated in his employmentcontract. He assumed command of petitioners vessel at theport of Hongkong. His instructions were to replenish bunker anddiesel fuel, to sail to South Africa and there to load 120,000metric tons of coal. However, while in HK and unwarding cargo,he received a weather report that a storm would hit HK, soprecautionary measures were taken to secure the safety of thevessel and its crew, considering that the vessels turbo-charger was leaking and the vessel was 14 yrs old. He

also followed-up the requisition by the former captain forsupplies of oxygen and acetylene necessary for the welding-repair of the turbo-charger and the economizer.-The vessel then sailed from HK for Singapore. Captain Tayongreported a water leak from M.E. Turbo Chapter No. 2Exhaust gas casing so he was instructed to black off thecooling water and maintain reduced RPM unlessauthorized by the owners. However, the vessel stopped inmid-ocean for 6 hrs and 45 minutes due to a leakingeconomizer. He was instructed to shut down the economizerand use the auxiliary boiler instead.- The Chief Engineer reminded Captain Tayong that the oxygenand acetylene supplies had not been delivered. He theninformed the shipowner that the departure of the vessel forSouth Africa may be affected because of the delay in thedelivery of the supplies. The shipowner advised Captain Tayongto contact its technical director who would provide a solution forthe supply of said oxygen and acetylene. The technical directorrecommended to Captain Tayong that by shutting off the waterto the turbo charger and using the auxiliary boiler, there shouldbe no further problem. Captain Tayong agreed to therecommendation of the technical director, but communicatedhis reservations regarding proceeding to South Africa withoutthe requested supplies. So the shipowner advised him to waitfor the supplies.- Finally, the vessel arrived at South Africa. However, Captain

Tayong was instructed to turn-over his post to the new captain,and was repatriated to the Philippines after serving petitionersfor around 2 wks. He was not informed of the charges againsthim, and was just sent a letter after arriving in the Philippines.He therefore instituted a complaint for illegal dismissal before

the POEA, claiming his unpaid salary for the unexpired portionof the written employment contract, plus attorneys fees.- POEA: dismissed complaint, there was valid cause for hiuntimely repatriation (the company alleged that due to Captain

Tayongs refusal to sail immediately to South Africa, the vessewas placed off-hire by the charterers, and the chartererrefused to pay the charter hire or compensation correspondingto 12 hours, amounting to US $15,500.00.They fired Captain

Tayong for lost of confidence; POEA believed that the Captains

concern for the oxygen and acetylene was not legitimate asthese supplies were not necessary or indispensable for runningthe vessel.)- NLRC: reversed and set aside POEA decision because Captain

Tayong had not been afforded an opportunity to be heard andthat no substantial evidenced was adduced to establish thebasis for petitioners loss of trust or confidence. Captain hadacted in accordance with his duties to maintain theseaworthiness of the vessel and to insure the safety of the shipand crew.

ISSUEWON Captain Tayong was arbitrarily dismissed and withoucause as reasonably established in an appropriate investigation(whether or not Captain Tayong had reasonable groundsto believe that the safety of the vessel and the crewunder his command or the possibility of substantiadelay at sea required him to wait for the delivery of thesupplies needed for the repair of the turbo-charger andthe economizer before embarking on the long voyagefrom Singapore to South Africa)

HELDYESRatio It is well settled in this jurisdiction that confidentiaand managerial employees cannot be arbitrarilydismissed at any time, and without cause as reasonablyestablished in an appropriate investigation. Suchemployees, too, are entitled to security of tenure, fairstandards of employment and the protection of labolaws.Reasoning- Captain Tayong was denied any opportunity to defend himself

Petitioners curtly dismissed him from his command andsummarily ordered his repatriation to the Philippines withoutinforming him of the charge or charges against him, and muchless giving him a chance to refute any such charge. In fact, itwas only 2 months after his repatriation that Captain Tayongreceived a telegram dated 24 October 1989 from Inter-Orienrequiring him to explain why he delayed sailing to South Africa.- NLRCs conclusion was supported by substantial evidence: Theofficial report of the technical director, which stated that adisruption in the normal functioning of the vessels turbocharger and economizer had prevented the full or regulaoperation of the vessel and that he was the one whorecommended the reduction of RPM during the voyage to SouthAfrica instead of waiting in Singapore for the supplies thawould permit shipboard repair of the malfunctioning machineryand equipment, supported NLRCs conclusion that Captain

Tayong did not arbitrarily and maliciously delay the voyage toSouth Africa.- Captain Tayong's decision (arrived at after consultation withthe vessel's Chief Engineer) to wait seven (7) hours inSingapore for the delivery on board the Oceanic Mindoro of therequisitioned supplies needed for the welding-repair, on boardthe ship, of the turbo-charger and the economizer equipment othe vessel, did not constitute merely arbitrary, capricious ogrossly insubordinate behavior on his part. In the view of theNLRC, that decision of Captain Tayong did not constitute a legabasis for the summary dismissal of Captain Tayong and fotermination of his contract with petitioners prior to theexpiration of the term thereof.Obiter- The captain of a vessel is a confidential and manageriaemployee within the meaning of the above doctrine . A


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Labor Law 1 A2010 - 193 - Disinimaster or captain, for purposes of maritime commerce, is onewho has command of a vessel. A captain commonly performsthree (3) distinct roles: (1) he is a general agent of theshipowner; (2) he is also commander and technical director ofthe vessel; and (3) he is a representative of the country underwhose flag he navigates. Of these roles, by far the mostimportant is the role performed by the captain as commanderof the vessel; for such role (which, to our mind, is analogous tothat of "Chief Executive Officer" [CEO] of a present-day

corporate enterprise) has to do with the operation andpreservation of the vessel during its voyage and the protectionof the passengers (if any) and crew and cargo. In his role asgeneral agent of the shipowner, the captain has authority tosign bills of lading, carry goods aboard and deal with the freightearned, agree upon rates and decide whether to take cargo.The ship captain, as agent of the shipowner, has legalauthority to enter into contracts with respect to thevessel and the trading of the vessel, subject toapplicable limitations established by statute, contract orinstructions and regulations of the shipowner. To thecaptain is committed the governance, care andmanagement of the vessel. Clearly, the captain is vestedwith both management and fiduciary functions.- Indeed, if the ship captain is convinced, as areasonably prudent and competent mariner acting ingood faith that the shipowner's or ship agent'sinstructions (insisted upon by radio or telefax from theirofficers thousand of miles away) will result, in the veryspecific circumstances facing him, in imposingunacceptable risks of loss or serious danger to ship orcrew, he cannot casually seek absolution from hisresponsibility, if a marine casualty occurs, in suchinstructions. 23- Compagnie de Commerce v. Hamburg: xxx where by the forceof circumstances, a man has the duty cast upon him of takingsome action for another, and under that obligation adopts acourse which, to the judgment of a wise and prudent man, isapparently the best for the interest of the persons for whom heacts in a given emergency, it may properly be said of thecourse so taken that it was in a mercantile sense necessary totake it."- ON management prerogative: that prerogative is nevertheless

not to be exercised, in the case at bar, at the cost of loss ofCaptain Tayong's rights under his contract with petitioner's andunder Philippine law.Disposition petitioners having failed to show grave abuse ofdiscretion amounting to loss or excess of jurisdiction on the partof the NLRC in rendering its assailed decision, the Petition forCertiorari is hereby DISMISSED, for lack of merit. Costs againstpetitioners

E. MANAGEMENT RIGHTS AND SECURITYOF TENURE

MANAGEMENT RIGHTS AND SECURITY

OF TENUREC OLEGIO DE SAN JUAN DE LETRAN V ASSN OF

EMPLOYEES AND FACULTY OF LETRAN340 SCRA 587

KAPUNAN; September 18, 2000

NATUREPetition for review on certiorari

FACTS- Private respondent Ambas, the newly elected president of theAssociation of Employees and Faculty of Letran (Union) wantedto continue the renegotiation of its CBA with petitioner Colegio

de San Juan de Letran (Letran) for the last 2 years of the CBAs5 year lifetime. However, petitioner claimed the CBA wasalready prepared for signing by the parties. The CBA wassubmitted to a referendum by the union members, who rejectedit.- Petitioner accused the union officers of bargaining in bad faithbefore the NLRC which decided in favor of petitioner but waslater reversed on appeal with the NLRC.- The Union notified the National Conciliation and Mediation

Board (NCMB) of its intention to strike on the grounds opetitioners refusal to bargain. Later, the parties agreed todisregard the unsigned CBA and start negotiating a new 5 yeaCBA for which the Union submitted its proposals. Ambasprotested a recent changing of her schedule and petitioner senthe Union a letter dismissing Ambas for alleged insubordinationafter which the Union amended its notice of strike to include thesaid dismissal.- Both parties again discussed the ground rules for the CBArenegotiation but petitioner stopped the negotiations aftepurportedly receiving information that a new group oemployees (ACEC) filed a petition for certification electiongiving rise to the issue of majority representation of theemployees.- The Union finally went on strike and the Sec. of Labor andEmployment assumed jurisdiction, ordering those on strike toreturn to work and for petitioner to accept them under the sameterms before the strike. All were readmitted except Ambas. TheSec. issued an order declaring petitioner guilty of unfair labopractice and directing the reinstatement of Ambas withbackwages. Letrans MFR was denied and the CA affirmed theSec.s decision, hence this petition.

ISSUES1. WON petitioner is guilty of unfair labor practice by refusingto bargain with the union2. WON the termination of the Ambas amounts to aninterference of the employees right to self-organization

HELD1. YES

- Petitioner is guilty of unfair labor practice by its stern refusato bargain in good faith with respondent union.

- Article 252 defines collective bargaining as the performance oa mutual obligation to meet and convene promptly andexpeditiously in good faith for the purpose of negotiating anagreement. The Union, in sending its proposals during the 2n

CBA negotiations, kept up its end of the bargain while Letrandevised ways and means to prevent the negotiation.- Letran also failed to make a timely reply to the Unionproposals (no counter-proposal a month later), violating Article250 which requires such a reply within 10 days upon receipt oa written notice of said proposals. Letrans refusal to reply is anindication of bad faith, showing a lack of sincere desire tonegotiate.- In a last ditch effort, Letran suspended the bargaining processon the ground that it allegedly received information that ACEChad filed a petition for certification election. The mere filing of apetition for certification election does not ipso facto justify the

suspension of negotiations when there is no legitimaterepresentation issue raised; also, such an action for interventionhad already prescribed.2. YES- While we recognize the right of the employer to terminate theservices of an employee for just cause, the dismissal oemployees must be made within the parameters of law andpursuant to the tenets of equity and fair play and must beexercised in good faith. It must not amount to interfering withrestraining or coercing employees in the exercise of their rightto self-organization as it would amount to unlawful labopractice under Article 248.-It would appear that Letran terminated Ambas in order to stripthe union of a leader who would fight for her co-workers rightsat the bargaining table and frustrate their desire to form a newCBA. The charge of insubordination was a mere ploy to give a


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Labor Law 1 A2010 - 194 - Disinicolor of legality to the action to dismiss her. Management mayhave the prerogative to discipline its employees forinsubordination but when it interferes with employees right toself-organization, it amounts to union-busting which is aprohibited act.Disposition petition is DENIED for lack of merit

SAN MIGUEL BREWERY SALES FORCE UNION V

OPLE170 SCRA 25GRIO-AQUINO; February 8, 1989

FACTS- A collective bargaining agreement was entered into bypetitioner San Miguel Corporation Sales Force Union and theprivate respondent, San Miguel Corporation. One provision ofthe CBA was employees within the appropriate bargaining unitshall be entitled to a basic monthly compensation pluscommission based on their respective sales."- Few months after the said CBA, the company introduced amarketing scheme known as the "Complementary DistributionSystem" (CDS) whereby its beer products were offered for saledirectly to wholesalers through San Miguel's sales offices.- The labor union filed a complaint for unfair labor practice in

the Ministry of Labor, with a notice of strike on the ground thatthe CDS was contrary to the existing marketing schemewhereby the Route Salesmen were assigned specific territorieswithin which to sell their stocks of beer, and wholesalers had tobuy beer products from them, not from the company. It wasalleged that the new marketing scheme violates Section 1,Article IV of the collective bargaining agreement because theintroduction of the CDS would reduce the take-home pay of thesalesmen and their truck helpers for the company would beunfairly competing with them.

ISSUES1. WON the CDS violates the collective bargaining agreement2. WON it is an indirect way of busting the union

HELD1. NO- CDS is a valid exercise of management prerogatives:Ratio Except as limited by special laws, an employer is free toregulate, according to his own discretion and judgment, allaspects of employment, including hiring, work assignments,working methods, time, place and manner of work, tools to beused, processes to be followed, supervision of workers, workingregulations, transfer of employees, work supervision, lay-off ofworkers and the discipline, dismissal and recall of work.- So long as a company's management prerogatives areexercised in good faith for the advancement of the employer'sinterest and not for the purpose of defeating or circumventingthe rights of the employees under special laws or under validagreements, this Court will uphold them2. NORatio Nothing in the record as to suggest that the unilateralaction of the employer in inaugurating the new sales scheme

was designed to discourage union organization or diminish itsinfluence, but rather it is undisputable that the establishment ofsuch scheme was part of its overall plan to improve efficiencyand economy and at the same time gain profit to the highest.While it may be admitted that the introduction of new sales plansomewhat disturbed the present set-up, the change howeverwas too insignificant as to convince this Office to interpret thatthe innovation interferred with the worker's right to self-organization.

Reasoning- Petitioner failed to consider is the fact that corollary to theadoption of the assailed marketing technique is the effort of thecompany to compensate whatever loss the workers may suffer

because of the new plan over and above than what has beenprovided in the collective bargaining agreement. To us, this isone indication that the action of the management is devoid ofany anti-union hues."Disposition Dismissed

F. GUIDELINE ON IMPOSITION OFPENALTIES

VALIAO V CA[PAGE 11]

FARROL V CA (RCPI)325 SCRA 331

YNARES-SANTIAGA; February 10, 2000

FACTS- Wenifrado Farrol was the station cashier of RCPI Cotabato CityStation.- There was a P50K cash shortage in the branchs PeragramPetty Cash Funds. Farrol was required to explain the cashshortage. He paid to P25K to RCPI

- He was then required to explain why he should not bedismissed. Petitioner wrote to the Field Auditor stating that themissing funds were used for the payment of the retiremenbenefits earlier referred by the Branch Manager and that healready paid P25k. After he made 2 more payments of the cashshortage, he was placed under preventive suspensions. He stilmade 2 payments of the balance.- RCPI then sent Farrol a letter informing him of the terminationof his services for alleging that part of the cash shortage wasused for payment of salaries and retirement benefits, disregardof policies involving statistical reportsmalversation/misappropriation (which is a ground for dismissal)and loss of trust and confidence.- Unaware of the termination letter, he requested hisreinstatement since his preventive suspension had expiredFerrol even manifested his willingness to settle the case. RCPinformed him that his employment had already beenterminated. The conflict was sent to the grievance committee

Two years later, it was submitted for voluntary arbitration.- VA ruled in favor of Farrol. RCPI filed a petition for certiorarbefore the CA which reversed VA decision. CA also dismissedMFR.- Farrol now filed a petition for review on certiorari on theground that his dismissal was illegal because he was noafforded due process and that he cannot be held liable for theloss of trust and confidence reposed in him.

ISSUEWON he was illegally terminated

HELDYES- BOP resides on the employer to prove that there was valid

cause for dismissal, and that he was afforded the opportunity tobe heard and defend himself.- For the 1st notice, RCPI required petitioner to explain why hefailed to account for the shortage. The 2nd notice was thainforming Farrol of his termination. it does not clearly cite thereasons for dismissal, nor were there facts and circumstances insupport thereof.- Even assuming there was a breach of trust and confidencethere was no evidence that Farrol was a managerial employee

The term trust and confidence is restricted to manageriaemployees.- RCPI alleges that under its rules, petitioners infarction is punishable by dismissal. However, employers rules canno preclude the state from inquiring whether strict and rigidapplication or interpretation would be too harsh to the


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Labor Law 1 A2010 - 195 - Disiniemployee. This is Farrols 1st offense, to which the Court holdsthat dismissal is too harsh and grossly disproportionate.Disposition CA is REVERSED and SET ASIDE and new oneentered REINSTATING the decision of the Voluntary Arbitratorsubject to the MODIFICATION that petitioners separation pay berecomputed to include the period within which backwages aredue. For this purpose, this case is REMANDED to the VoluntaryArbitrator for proper computation of backwages, separationpay, 13th month pay, sick leave conversion and vacation leave

conversion.

VH MANUFACTURING INC V NLRC (GAMIDO)322 SCRA 417

DE LEON; January 19, 2000

NATUREBefore us is a petition for certiorari

FACTS- Since November 5, 1985 Gamido was employed in VHManufacturings business of manufacturing liquefied petroleumgas (LPG) cylinders. He served as a quality control inspectorwith the principal duty of inspecting LPG cylinders for anypossible defects. His service with the company was abruptlyinterrupted on February 14, 1995, when he was served a noticeof termination of his employment.- His dismissal stemmed from an incident on February 10, 1995wherein VHs company President, Alejandro Dy Juanco,allegedly caught private Gamido sleeping on the job. On thatsame day, private respondent was asked through a writtennotice from the petitioners Personnel Department to explainwithin twenty-four (24) hours why no disciplinary action shouldbe taken against him for his violation of Company Rule 15-b

which provides for a penalty of separation for sleeping duringworking hours. Without delay, private respondent replied in aletter which reads: "Sir, ipagpaumanhin po ninyo kungnakapikit ako sa aking puwesto dahil hinihintay ko po ang nilihahi Abreu para i quality pasensiya na po kung hindi ko ponamalayan ang pagdaan ninyo dahil maingay po ang paintingbooth." Notwithstanding his foregoing reply, he wasterminated.- Feeling aggrieved, he filed a complaint for illegal dismissal,praying for reinstatement to his position as quality controlinspector. Labor Arbiter declared that Gamidos dismissal isanchored on a valid and just cause. NLRC reversed thedecision.

ISSUEWON Gamidos dismissal was too harsh a penaltly for hisviolation of company rule 15-b

HELDYES- Basically, the reason cited for the dismissal of privaterespondent is sleeping on the job in violation of Company Rule15-b. But according to Gamido, he was not sleeping on the jobbut was merely idle, waiting for the next cylinder to be checked.- In view of the gravity of the penalty of separation, as providedby the Company Rules and Regulation., in termination disputes,the burden of proof is always on the employer to prove that thedismissal was for a just and valid cause. What is at stake here isnot only the job itself of the employee but also his regularincome therefrom which is the means of livelihood of his family.- A thorough review of the record discloses that, contrary to thefindings of the Labor Arbiter, petitioners claim that private

respondent slept on the job was not substantiated by anyconvincing evidence other than the bare allegation of theofficer.- Next, VHs reliance on the authorities it cited that sleeping onthe job is always a valid ground for dismissal, is misplaced. Theauthorities cited involved security guards whose dutynecessitates that they be awake and watchful at all timeinasmuch as their function, to use the words in LuzonStevedoring Corp. v. Court of Industrial Relations, is "to protec

the company from pilferage or loss." Accordingly, the doctrinelaid down in those cases is not applicable to the case at bar.- Finally, while an employer enjoys a wide latitude of discretionin the promulgation of policies, rules and regulations on workrelated activities of the employees, those directives, howevermust always be fair and reasonable, and the corresponding penalties, when prescribed, must be commensurate to theoffense involved and to the degree of the infraction. In the caseat bar, the dismissal meted out on private respondent foallegedly sleeping on the job, under the attendantcircumstances, appears to be too harsh a penalty, consideringthat he was being held liable for first time, after nine 9 ounblemished service, for an alleged offense which caused noprejudice to the employer, aside from absence of substantiationof the alleged offense. Neither was it shown that privaterespondents alleged negligence or neglect of duty, if any, wasgross and habitual. Thus, reinstatement is just and proper.Disposition petition is hereby DISMISSED, and the challengedDecision and Order of public respondent NLRC are AFFIRMED.

REYNO V MANILA ELECTRIC COMPANY434 SCRA 660

SANDOVAL-GUTIERREZ; July 22, 2004

NATUREPetition for review on certiorari under Rule 45 of the 1997 Rulesof Civil Procedure

FACTS- Reyno was employed by MERALCO where he eventuallyoccupied the position of Assistant Squad Leader of Squad 12 atthe Inspection Department. Petitioner and his team oinspectors were in charge of monitoring and inspecting electricmeters installed at the premises of respondents customersensuring the accuracy of the electric consumption recorded inthese meters; and reporting and apprehending violators whouse insidious schemes or devices to reduce their electricconsumption deliberately.

- Later, MERALCO implemented an incentive scheme aimed aencouraging its inspectors to perform their duties zealouslyUnder this incentive scheme, the inspector concerned shall bepaid an additional 30-minute overtime pay for every submittedreport of major violation/s committed by customers againsrespondent.- Roger Sacdalan, Senior Investigator of respondents SpeciaPresidential Committee (SPC), received several complaintsagainst Gilbert Villapa, Leader of Squad 12, about an illegaconnection.- SPC conducted an investigation wherein members of Squad 12were summoned to explain. However, they failed to establishVillapas involvement in such illegal connection. Instead, theideclarations pointed to Reynos irregular performance of hisduties.- This prompted SPC to conduct clarificatory hearing. But the


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Labor Law 1 A2010 - 196 - Disinihearing was cancelled for failure of Reynos counsel to appeardespite notice. When the case was called for hearing asscheduled, his counsel again failed to appear. He then opted toproceed with the clarificatory hearing without the assistance ofhis counsel.- After evaluating the records on hand, the SPC found petitionerguilty of dishonesty, serious misconduct and willful breach oftrust. Respondent then sent petitioner a notice terminating hisservices.

- Reyno filed with the Labor Arbiter a complaint for illegaldismissal and payment of overtime pay, premium pay forholidays and rest days, damages and attorneys fees.

ISSUES1. WON Reyno was deprived of his right to cross examinewitnesses before the Labor Arbiter2. WON Reyno was illegally dismissed

HELD1. NO- His right to cross-examine the three witnesses, did not err asit was not required to apply strictly the Rules of Evidence. Atany rate, MERALCO had valid reasons why it did not presentthose three witnesses during the proceedings before the LaborArbiter2. NO- The standard of substantial evidence is satisfied where theemployer, as in this case, has reasonable ground to believe thatthe employee is responsible for the misconduct and hisparticipation therein renders him unworthy of trust andconfidence demanded by his position. Reyno violatedMERALCOs Code of Employee Discipline and committed seriousmisconduct in the performance of his duties have been provedby the affidavits of petitioners own subordinates in Squad 12 ofwhich he was the Assistant Squad Leader. Moreover, MERALCOhad lost his trust and confidence in petitioner. Under Article282 of the Labor Code, as amended, these are just causes forhis dismissal from the service.- The longer an employee stays in the service of the company,the greater is his responsibility for knowledge and compliancewith the norms of conduct and the code of discipline in thecompany.

- An employees length of service with the company evenaggravates his offense. He should have been more loyal tocompany from which he has derived his family bread and butterfor seventeen (17) years.Disposition Petition is DENIED. The assailed Decision dated

January 17, 2001 and Resolution dated May 3, 2001 of the Courtof Appeals in CA-G.R. SP No. 53987 are hereby AFFIRMED.

FACTORS

ASSOCIATED LABOR UNION V NLRC[PAGE 181]

PHILIPPINE LONG DISTANCE TELEPHONE V NLRC(GABRIEL)303 SCRA 9

QUISUMBING; February 11, 1999

NATUREAppeal from the order of the NLRC

FACTS- Private respondent, Enrique Gabriel, was foreman of petitionerPLDT and was a supervisor with territorial responsibility forCamp Crames First to 20th Avenue and portions of Project 4, alllocated in Quezon City. On two occasions (September 5, 1989and October 16, 1989) he ordered Medel Mercado and Juancho

Jocson to install two telephone lines each at Unit R, FacilitiesCenter Building, located at Shaw Boulevard, Mandaluyong.- The ordered installations were investigated because (a) theFacilities Center Building had no entrance cable facilities oconduit wires for telephone connection, (b) Mandaluyong wasnot within Gabriels area of jurisdiction, and (c) installersMercado and Jocson were not under his direct supervision.- During the investigation, Gabriel. while acknowledgingresponsibility for his action, claimed that his actuation was

motivated by the desire to provide customer satisfaction. Healso claimed that the telephones were installed after thedocuments of approval were issued by PLDT. He dismissed fromservice on September 3, 1990 on the ground that he committedgrave misconduct, breach of trust, and violations of companyrules and regulations.- Gabriel filed an illegal dismissal complaint with the LaboArbiter on September 6, 1990. Said Arbiter affirmed thedismissal but the same was reversed by the NLRC and orderedPLDT to reinstate Gabriel to the position he held as at the timeof the complained dismissal, with full backwages, benefits, andproportionate privileges. Hence the appeal.

ISSUEWON Gabriel is guilty of serious misconduct and/or breach oftrust anent the irregular installation of the telephones

HELDNO- The facts of the case do not point to any misconduct or breachof trust on the part of Gabriel. There was also no provision inthe written rule of PLDT which penalizes unwarrantedinstallation of telephone lines with dismissal. In any case, theinstallations were approved by the company. There was also noevidence that Gabriel profited personally with the transaction

The dismissal of Gabriel is illegal.Reasoning- Dismissal is the ultimate penalty and should not be imposed ithe employee has been in service for a considerable length otime and has not been the recipient of any disciplinary actionsWhere a penalty less punitive would suffice, whatever misstepsmay have been committed by the worker ought not to bevisited with a consequence so severe such as dismissal. This

interpretation gives meaning and substance to the liberal andcompassionate spirit of the law as provided for in Article 4 othe Labor Code which states that all doubts in theimplementation and interpretation of the provisions of the LaboCode including its implementing rules and regulations shall beresolved in favor of labor.- Gabriel is not entirely faultless. As a supervisor, he is requiredto act judiciously and to exercise his authority in harmony withPLDTs policies. When he jeopardized the status of the rank andfile employees whom he ordered to by-pass the standardoperating procedures of the company, to the detriment of hisemployer, he was not entirely blameless. The irregularityattributable to him could not be disregarded. He must not berewarded, in fairness to the employers own legitimate concernsuch as company morale and discipline.Dispositionthe resolution f the NLRC is affirmed subject to the

deletion of the other awards of unspecified benefits andproportionate privileges.


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Labor Law 1 A2010 - 197 - DisiniDISMISSAL AS PENALTY

CEBU FILVENEER CORPORATION V NLRC(VILLAFLOR)286 SCRA 556

PUNO; February 24, 1998

FACTS- Villaflor was the chief accountant of CFC. The top execs wereItalians: Cordaro (president), Kun (GM), Marinoni (Productionmanager). Guillermo was the accounting clerk of Villaflor.- Kun resigned from the company and asked for the liquidationof his investment: P125k. Two weeks later, he asked Guillermofor a blank check and a blank check voucher. Guillermo gavehim. Three days later, Villlaflor noticed that a check voucherwas missing. She asked Guillermo, who said that Mr. Kun has it.- Villaflor immediately informed Mr. Cordaro of whathappened. She also wrote to the bank demanding the return ofthe encashed check.- Marinoni charged Villaflor of complicity in Kuns irregulardisbursement of company funds. Two days later, she wasprevented entry to the office by the security guards. Her officedrawer and safe were also forcibly opened upon order ofMarinoni. Villaflor reported the incident to the PNP.- Marinoni suspended her for 30 days without pay for failure tocome to work for half a day (the day she was prevented entry).

The next day she was preventively suspended for 30 dayspending investigation of her involvement in Kuns booboo. Thecompany also printed a newspaper ad for an accountant.- Villaflor filed for illegal dismissal with the LA. LA decided inher favor. NLRC affirmed.

ISSUEWON Villaflor was illegally dismissed

HELDYES- Due to its far reaching implications, our Labor Code decreesthat an employee cannot be dismissed, except for the mostserious causes. Article 282 enumerates the causes for which the

employer may terminate an employee.- Company says its loss of trust. The SC said that Villaflorsomission cannot be described as willful to justify dismissal. Abreach is willful if it is done intentionally, knowingly andpurposely. Petitioners merely proved the omission of the privaterespondent but there is no evidence whatsoever that it wasdone intentionally.- Company says shes grossly or habitually negligent in theperformance of her duties. The SC said that since she has notbeen remiss in the performance of her duties in the past, shecant be charged with habitual negligence. Neither is hernegligence gross in character. Gross negligence implies awant or absence of or failure to exercise slight care ordiligence or the entire absence of care. It evinces athoughtless disregard of consequences without exertingany effort to avoid them. She had not the slightest reason to

distrust Kun because he was the GM and appears to haveconducted himself well in the performance of his duties in thepast. At most, its error of judgment, not gross negligence.Disposition NLRC decision affirmed.

GOLDEN THREAD KNITTING INDUSTIRES V NLRC(MACASPAC)304 SCRA 720

BELLOSILLO; March 11, 1999

NATUREPetition to review decision of NLRC

FACTS

- several employees of Golden Thread Knitting Industries (GTKwere dismissed for different reasons. 2 employees wereallegedly for slashing the companys products (towels), 2 foredundancy, 1 for threatening the personnel manager andviolating the company rules, and 1 for abandonment of work.- The laborers filed complaints for illegal dismissal. They allegethat the company dismissed them in retaliation for establishingand being members of the Labor Union.GTK, on the other hand, contend that there were valid causes

for the terminations. The dismissals were allegedly a result ofthe slashing of their products, rotation of work, which in turnwas caused by the low demand for their products, andabandonment of work. WRT to the cases involving the slashingof their products and threats to the personnel manager, thedismissals were in effect a form of punishment.- The labor arbiter ruled partially in favor of GTK. He said thatthere was no showing that the dismissals were in retaliation forestablishing a union. He, however, awarded separation pay tosome employees.- NLRC, however, appreciated the evidence differently. It heldthat there was illegal dismissal and ordered reinstatement.

ISSUEWON there was illegal dismissal

HELDYESRatio Dismissal is the ultimate penalty that can be meted toan employee. It must therefore be based on a clear and not onan ambiguous or ambivalent ground.Reasoning- WRT to the case involving slashing of towels, the employeeswere not given procedural due process. There was no noticeand hearing, only outright denial of their entry to the workpremises by the security guards. The charges of seriousmisconduct were not sufficiently proved.- WRT to the employees dismissed for redundancy, there wasalso denial of procedural due process. Hearing and notice werenot observed. Thus, although the characterization of anemployees services is a management function, it must first beproved with evidence, which was not done in this case. thecompany cannot merely declare that it was overmanned.

- WRT to the employee dismissed for disrespect, the SCbelieved the story version of the company (which essentiallysaid that the personnel manager was threatened upon mereservice of a suspension order to the employee), but ruled thatthe dismissal could not be upheld.

the dismissal will not be upheld where it appears that theemployees act of disrespect was provoked by the employerxxx the employee hurled incentives at the personnemanager because she was provoked by the baselesssuspension imposed on her. The penalty of dismissal must becommensurate with the act, conduct, or omission to theemployee.

- The dismissal was too harsh a penalty; a suspension of 1 weekwould have sufficed.

GTK exercised their authority to dismiss without due regardto the provisions of the Labor Code. The right to terminate

should be utilized with extreme caution because itsimmediate effect is to put an end to an employee's presenmeans of livelihood while its distant effect, upon asubsequent finding of illegal dismissal, is just as pernicious tothe employer who will most likely be required to reinstate thesubject employee and grant him full back wages and othebenefits.

Disposition Decision AFFIRMED

CENTRAL PANGASINAN ELECTRIC COOP INC VMACARAEG

395 SCRA 720PUNO; January 22, 2003


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Labor Law 1 A2010 - 198 - DisiniNATUREPetition for review on certiorari

FACTS- De Vera was employed as teller and Geronima Macaraeg ascashier by Central Pangasinan Electric cooperative inc. Theyaccommodated and encashed two hundred eleven crossedchecks of Evelyn Joy Estrada (de Veras sister) amounting toP6,945,128.95 payable to the cooperative despite the absence

of any transaction or any outstanding obligation with it. Theycredited the checks as part of their collection and deposited thesame together with their cash collection to the coops accountat the Rural Bank of Central Pangasinan.- The finance department noticed these checks which bounced(insufficient funds).De Vera and Macaraeg were confronted withthe discovery. De Vera admitted that the checks were issuedby her sister and that she encashed them from the moneycollected from petitioners customers.- De Vera testified and admitted that she encashed the checksof Evelyn Joy Estrada because the latter is her older sister.Macaraeg admitted that she knew of the accommodations givenby respondent de Vera to her sister; that she allowed hersubordinate to do it because respondent de Vera is her kumare,and that she knew that Mrs. Estradas checks were sufficientlyfunded.- On March 19, 1999, on the basis of the findings andrecommendation of Atty. Fernandez (presided over thehearing), the General Manager issued to respondents separatenotices of termination for serious misconduct, and breach oftrust and confidence reposed on them by management.- Respondents questioned their dismissal before the NationalConciliation and Mediation Board (NCMB),claiming that theirdismissal was without just cause and in violation of theCollective Bargaining Agreement (CBA), which requires that thecase should first be brought before a grievance committee.Eventually, the parties agreed to submit the case to a voluntaryarbitrator for arbitration.- LA-ruled in favor of defendants and ordered theirreinstatementCA-affirmed

ISSUES

1. WON the procedure leading to the termination ofrespondents Maribeth de Vera and Geronima Macaraeg was inviolation of the provisions of the CBA2. WON the respondents were validly dismissed

HELD1. Issue is moot and academic- The parties active participation in the voluntary arbitrationproceedings, and their failure to insist that the case beremanded to the grievance machinery, shows a clear intentionon their part to have the issue of respondents illegal dismissaldirectly resolved by the voluntary arbitrator.2. YES- The respondents were validly dismissed. Article 282(c) of theLabor Code allows an employer to dismiss employees for willfulbreach of trust or loss of confidence. Proof beyond reasonable

doubt of their misconduct is not required, it being sufficient thatthere is some basis for the same or that the employer hasreasonable ground to believe that they are responsible for themisconduct and their participation therein rendered themunworthy of the trust and confidence demanded of theirposition.Reasoning- the acts of the respondents were clearly inimical to thefinancial interest of the petitioner. During the investigation,they admitted accommodating Evelyn Joy Estrada by encashingher checks from its funds for more than a year. They did sowithout petitioners knowledge, much less its permission.- there was willful breach of trust on the respondents part, asthey took advantage of their highly sensitive positions to violatetheir duties.

- the acts of the respondents caused damage to the petitionerDuring those times the checks were illegally encashedpetitioner was not able to fully utilize the collections, primarilyin servicing its debts.- it is not material that they did not misappropriate anyamount of money, nor incur any shortage relative to the fundsin their possession. The basic premise for dismissal on theground of loss of confidence is that the employees concernedhold positions of trust. The betrayal of this trust is the essence

of the offence for which an employee is penalized.- the respondents held positions of utmost trust and confidenceAs teller and cashier, respectively, they are expected to possessa high degree of fidelity. They are entrusted with aconsiderable amount of cash. Respondent de Vera acceptedpayments from petitioners consumers while respondenMacaraeg received remittances for deposit at petitioners bank

They did not live up to their duties and obligations.

PHILIPS SEMICONDUCTORS V FADRIQUELA[PAGE 77]

G. RULES MANAGERIALS AND RANK ANDRANK FILE EMPLOYEES

SALVADOR V PHILIPPINE MINING SERVICE CORP395 SCRA 729

PUNO; January 22, 2003

FACTS- JOSE V. SALVADOR was first employed by respondent in 1981He rose from the ranks and assumed the position of PlanInspection Foreman in 1991. He was tasked to: (1) superviseplant equipment and facility inspection; (2) confirm actuadefects; (3) establish inspection standards and frequency; (4analyze troubles and recommend counter measures; and (5prepare weekly/monthly inspection schedule.[3]- As early as March 1, 1985, respondent instituted the shiftboss scheme whereby the foreman from the Plant Section and

the foreman from the Mining Section rotate as shift bossthroughout their night shift to oversee and supervise both themining and plant operations. The shift boss was entrusted withthe care, supervision and protection of the entire plant.- Aside from his employment with respondent, petitioner coowned and managed LHO-TAB Enterprises, with his partneOndo Alcantara. They were engaged in the manufacture andsale of hollow blocks. On September 29, 1997, petitionersemployment relation with respondent was tainted with chargesof pilferage and violation of company rules and policy, resultingto loss of confidence. Respondents evidence disclose that onSeptember 29, 1997, at about 9:30 a.m., Koji Sawarespondents Assistant Resident Manager for Administrationwas on his way back to his office in the plant. He and his driverRoberto Gresones, saw petitioner operating respondentspayloader, scooping fine ore from the stockpile and loading iton his private cargo truck. As the truck was blocking the accessroad leading to the stockyards gate, Sawas car stopped neathe stockpile and the driver blew the horn thrice. Petitioner didnot hear him because of the noise emanating from his operationof the payloader. Sawas driver found a chance to pass throughwhen the payloader maneuvered to get another scoop from thefine ore stockpile.- As it was contrary to respondents standard operatingprocedure for the plant foreman to operate the payloader, Sawawent to the administration office to check the delivery receiptcovering the loading operation of petitioner that morningHowever, sales-in-charge Eduardo Guangco was in the wharfoverseeing the loading of respondents product. Hence, it wasonly in the afternoon that Sawa was able to verify the deliveryreceipt covering petitioners loading transaction. The deliveryreceipt showed that it was dolomite spillage that was purchased


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Labor Law 1 A2010 - 199 - Disiniby buyer Ondo Alcantara, not the fine ore that he saw petitionerloading on his truck. The receipt also showed it was not therespondent but Alcantara, the buyer, who was responsible forloading the spillage he purchased from the plant.- On the basis of the foregoing facts PMSC terminated Salvadorfor pilferage of company property. Labor Arbiter and NLRC ruledin favor of Salvador but CA reversed. Hence, this recourse.

ISSUES

1. WON the charge of pilferage against petitioner wassupported by substantial evidence to warrant his dismissal fromthe service2. WON the employer was well within its rights in imposing aharsh penalty considering the length of the employees service

HELD1. YESRatio The settled rule in administrative and quasi-judicialproceedings is that proof beyond reasonable doubt is notrequired in determining the legality of an employers dismissalof an employee, and not even a preponderance of evidence isnecessary as substantial evidence is considered sufficient.Substantial evidence is more than a mere scintilla of evidenceor relevant evidence as a reasonable mind might accept asadequate to support a conclusion, even if other minds, equallyreasonable, might conceivably opine otherwise. Thus,substantial evidence is the least demanding in the hierarchy ofevidence.Reasoning-The Labor Code provides that an employer may terminate theservices of an employee for just cause and this must besupported by substantial evidence. In the case at bar, ourevaluation of the evidence of both parties indubitably showsthat petitioners dismissal for loss of trust and confidence wasduly supported by substantial evidence.2. NORatio As a general rule, employers are allowed wider latitudeof discretion in terminating the employment of managerialemployees as they perform functions which require theemployers full trust and confidence.Reasoning- To be sure, length of service is taken into consideration in

imposing the penalty to be meted an erring employee.However, the case at bar involves dishonesty and pilferage bypetitioner which resulted in respondents loss of confidence inhim. Unlike other just causes for dismissal, trust in anemployee, once lost is difficult, if not impossible, to regain.Moreover, petitioner was not an ordinary rank-and-fileemployee. He occupied a high position of responsibility. Asforeman and shift boss, he had over-all control of the care,supervision and operations of respondents entire plant. Itcannot be over-emphasized that there is no substitute forhonesty for sensitive positions which call for utmost trust.Fairness dictates that respondent should not be allowed tocontinue with the employment of petitioner who has breachedthe confidence reposed on him.- In the case at bar, respondent has every right to dismisspetitioner, a managerial employee, for breach of trus

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