labor law review case digests.doc

8/14/2019 labor law review case digests.doc

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PRUDENTIAL GUARANTEE AND ASSURANCE EMPLOYEELABOR UNION and SANDY T. VALLOTA vs. NATIONALLABOR RELATIONS COMMISSION, PRUDENTIALGUARANTEE AND ASSURANCE INC., and/or JOCELYNRETIZOS

FACTS: Vallota was employed by respondent PrudentialGuarantee and Assurance, Inc. (PGAI)as a Junior Programmerassigned to the Electronic Data Processing (EDP)Department.During an onthespot security chec! in the In"ormation and

#echnology (IT)Department by PGAI, Vallota$s computer waschec!ed and a "older named %&AA' was "ound in his "iles.

Vallota e(plained that there is nothing wrong with the "iles.Vallota was later in"ormed that the "iles will be printed andVallota did not ob)ect. A"ter the "iles were printed, Vallota andthe *nion +ecretary were as!ed to sign each page o" theprintout. Vallota was not given a copy o" the printed "ile.

ater, Vallota received a memorandum directing him toe(plain within - hours why highly con"idential "iles werestored in his computer. #he same memorandum also in"ormedhim that he was being placed under preventive suspension "or/0 days e""ective upon receipt o" the said notice. A secondmemorandum noti"ied Vallota o" the e(tension o" hispreventive suspension "or another /0 days because themanagement needed more time to evaluate theadministrative case against him. Vallota responded in writingand three days later, PGAI sent him another memorandum

re1uesting "urther details on some o" the matters he raised inhis response. Vallota then re1uested a con"erence in a letter,to be attended by a *nion representative and counsel. Inreply, PGAI sent Vallota another memorandum which set anew deadline "or Vallota to submit his reply and evidence inhis de"ense. In compliance with the deadline set, Vallotasubmitted his replymemorandum, outlining his response tothe charges.

&eanwhile, the *nion sent a letter to the PGAI Presidentre1uesting that a grievance committee be convened and thatthe contents o" the computers o" other I# personnel besimilarly produced. #he re1uest was ignored. A"terwards,Vallota was given a notice o" termination o" his employmente""ective on the ground o" loss o" trust and con"idence. #hus,the petitioners "iled a complaint "or illegal dismissal. #heabor Arbiter ruled in "avor o" petitioners but the 234

reversed the A$s decision.

ISSUE:562 petitioner Vallota was illegally dismissed.

ELD:7E+.

Lo!! o" #on"$d%n#%as a )ust cause "or dismissal was neverintended to provide employers with a blan! chec! "orterminating their employees. +uch a vague, allencompassingprete(t as loss o" con"idence, i" un1uali"iedly given the seal o"approval by this 4ourt, could readily reduce to barren "ormthe words o" the constitutional guarantee o" security o"tenure. 8aving this in mind, loss o" con"idence should ideallyapply only to cases involving employees occupying positionso" trust and con"idence or to those situations where theemployee is routinely charged with the care and custody o"

the employer9s money or property. #o the "$r!& #'a!!belongmanagerial employees, i.e., those vested with the powers orprerogatives to lay down management policies and:or to hire,trans"er, suspend, layo"", recall, discharge, assign ordiscipline employees or e""ectively recommend suchmanagerial actions; and to the !%#ond #'a!!belong cashiers,auditors, property custodians, etc., or those who, in thenormal and routine e(ercise o" their "unctions, regularlyhandle signi"icant amounts o" money or property. Evidently,an ordinary chambermaid who has to sign out "or linen andother hotel property "rom the property custodian each dayand who has to account "or each and every towel or bedsheetutili


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un)usti"ied re"usal o" PGAI to conduct a hearing violated thesaid provision o" the 3ules implementing the abor 4ode, aswell as Vallota$s right to de"end himsel" be"ore an impartialinvestigating body.

In sum, the "ollowing are the guiding principles in connectionwith the hearing re1uirement in dismissal casesC

@a =ample opportunity to be heard= means anymeaning"ul opportunity @verbal or written given tothe employee to answer the charges against him andsubmit evidence in support o" his de"ense, whether ina hearing, con"erence or some other "air, )ust and

reasonable way.@b a "ormal hearing or con"erence becomesmandatory only when re1uested by the employee inwriting or substantial evidentiary disputes e(ist or acompany rule or practice re1uires it, or when similarcircumstances )usti"y it.@c the =ample opportunity to be heard= standard inthe abor 4ode prevails over the =hearing orcon"erence= re1uirement in the implementing rulesand regulations.

In this case, the twonotice re1uirement was complied with.Given, however, that the petitioners e(pressly re1uested acon"erence or a convening o" a grievance committee, such"ormal hearing became mandatory. A"ter PGAI "ailed toa""irmatively respond to such re1uest, it "ollows that thehearing re1uirement was not complied with and, there"ore,Vallota was denied his right to procedural due process.

COSMOS BOTTLING CORP. !. ILSON FERMIN

FACTS: 5ilson B. >ermin @>ermin was a "or!li"t operator at

4osmos Bottling 4orporation @46+&6+. 8e was accused o"

stealing the cellphone o" his "ellow employee, uis Braga

@Braga. >ermin was then given a +how 4ause &emorandum,

re1uiring him to e(plain why the cellphone was "ound inside

his loc!er. In compliance therewith, he submitted an a""idavit

the "ollowing day, e(plaining that he only hid the phone as a

practical )o!e and had every intention o" returning it to Braga.

A"ter conducting an investigation, 46+&6+ "ound >ermin

guilty o" stealing Braga$s phone in violation o" company rulesand regulations. 4onse1uently, the company terminated

>ermin "rom employment a"ter - years o" service. >ollowing

the dismissal o" >ermin "rom employment, Braga e(ecuted an

a""idavit, which stated the belie" that the "ormer had merely

pulled a pran! without any intention o" stealing the cellphone,

and withdrew "rom 46+&6+ his complaint against >ermin.

&eanwhile, >ermin "iled a 4omplaint "or Illegal Dismissal,

which the abor Arbiter @A dismissed "or lac! o" merit on the

ground that the act o" ta!ing a "ellow employee$s cellphone

amounted to gross misconduct. >urther, the A li!ewise too!

into consideration >ermin$s other in"ractions, namelyC @a

committing acts o" disrespect to a superior o""icer, and @b

sleeping on duty and abandonment o" duty. #he 234a""irmed the A$s decision. #he 4ourt o" Appeals, however,

reversed such decision.

ISSUE: 5hether or not the imposition o" the penalty o"

dismissal was appropriate.

ELD: YES. #he"t committed against a coemployee is

considered as a case analogous to serious misconduct, "or

which the penalty o" dismissal "rom service may be meted out

to the erring employee.

&isconduct involves =the transgression o" some established

and de"inite rule o" action, "orbidden act, a dereliction o" duty,

will"ul in character, and implies wrong"ul intent and not mere

error in )udgment.= >or misconduct to be serious andthere"ore a valid ground "or dismissal, it must beC

?. o" grave and aggravated character and not merely trivial or

unimportant and

. connected with the wor! o" the employee.

Article @e o" the abor 4ode tal!s o" other analogous

causes or those which are susceptible o" comparison to

another in general or in speci"ic detail. >or an employee to be

validly dismissed "or a cause analogous to those enumerated

in Article , the cause must involve a voluntary and:or

will"ul act or omission o" the employee. A cause analogous to

serious misconduct is a voluntary and:or will"ul act or

omission attesting to an employee$s moral depravity. #he"t

committed by an employee against a person other than his

employer, i" proven by substantial evidence, is a cause

analogous to serious misconduct.

In this case, the A has already made a "actual "inding, which

was a""irmed by both the 234 and the 4A, that >ermin had

committed the"t when he too! Braga$s cellphone. #hus, this

act is deemed analogous to serious misconduct, rendering

>ermin$s dismissal "rom service )ust and valid. 5hile it is true

that previous in"ractions may be cited as )usti"ication "or

dismissing an employee only i" they are related to the

subse1uent o""ense, it must be noted that such a discussion

was unnecessary since the the"t, ta!en in isolation "rom

>ermin$s other violations, was in itsel" a valid cause "or the

termination o" his employment.

ROMEO E. PAULINO !. NATIONAL LABOR RELATIONS

COMMISSION and PILIPPINE LONG DISTANCE

TELEPONE COMPANY, INCORPORATED

FACTS: Petitioner, who was then employed by private

respondent Philippine ong Distance #elephone 4ompany, Inc.@PD# as 4able +plicer III, surrendered his service vehicle to

PD#$s motor pool "or body repairs. >or this reason, he

unloaded the companyissued plant materials contained in the

vehicle and stored them at his residence "or sa"e!eeping.

>or ? month and ?? days, PD#$s properties were in the

custody o" petitioner. #hus, members o" the Philippine

2ational Police @P2P, armed with a search warrant, searched

his house where company materials were "ound and retrieved.

Based on the investigation by the P2P, petitioner did not

present any documents or re1uisition slips that would )usti"y

his possession o" the materials. 4onse1uently, PD# caused

the "iling o" an In"ormation "or 1uali"ied the"t against him.

#he ne(t day, PD# issued an invitation to V. Pesayco, the

manager o" petitioner, re1uesting him to ma!e petitioner

available to clari"y certain matters. Petitioner attended this

meeting along with his lawyer, but PD#$s investigators

merely tal!ed with the counsel. PD# then received a security

report stating that petitioner had engaged in the illicit

disposal o" its plant materials, which were recovered during

the search conducted at his residence.

PD# then issued an Inter6""ice &emo re1uiring petitioner to

e(plain why he should not be terminated "rom employment

"or serious misconduct @the"t o" company property. #he

&emo also gave him the option to as! "or a "ormal hearing o"

his case. In reply, he re1uested that the proceedings be held

in abeyance until the criminal case against him had been

concluded. #hen, Pesayco in"ormed petitioner in writing that

since his reply did not provide any clari"ication whatsoever

that would have warranted an evaluation o" his case, the

company was terminating his services e""ective on the said

date.

#hree years later, a"ter the criminal case "or 1uali"ied the"t

had been terminated "or "ailure o" the prosecution to prove his

guilt beyond reasonable doubt, petitioner "iled a 4omplaint "or

Illegal Dismissal which the abor Arbiter @A dismissed "or

utter lac! o" merit. #he 234 and 4A a""irmed the A$s

Decision.

ISSUE: 5hether or not the petitioner$s dismissal was basedon )ust cause.

ELD: YES.

#he abor 4ode recogni


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2otwithstanding petitioner$s ac1uittal in the criminal case "or

1uali"ied the"t, respondent PD# had ade1uately established

the basis "or the company$s loss o" con"idence as a )ust cause

to terminate petitioner. #his 4ourt "inds that approach to be

correct, since proo" beyond reasonable doubt o" an

employee$s misconduct is not re1uired in dismissing an

employee. 3ather, as opposed to the =proo" beyond

reasonable doubt= standard o" evidence re1uired in criminal

cases, labor suits re1uire only substantial evidence to prove

the validity o" the dismissal.

5ill"ul breach o" trust or loss o" con"idence re1uires that the

employee @? occupied a position o" trust or @ was routinely

charged with the care o" the employer$s property./ As

correctly appreciated by the 4A, petitioner was charged with

the care and custody o" PD#$s property.

#o warrant dismissal based on loss o" con"idence, there must

be some basis "or the loss o" trust or the employer must have

reasonable grounds to believe that the employee is

responsible "or misconduct that renders the latter unworthy o"

the trust and con"idence demanded by his or her position.

In this case, even assuming that he law"ully possessed the

materials, PD# still had ample reason or basis to alreadydistrust petitioner. >or more than a month, he did not even

in"orm PD# o" the whereabouts o" the plant materials.

Instead, he stoc!ed these materials at his residence even i"

they were needed in the daily operations o" the company. In

!eeping with the honesty and integrity demanded by his

position, he should have turned over these materials to the

plant$s warehouse. #he "act that petitioner did not present

any documents or re1uisition slips at the time that the P2P

too! the plant materials logically e(cites suspicion. In

addition, PD# received a security report stating that

petitioner had engaged in the illicit disposal o" its plant

materials, which were recovered during the search conducted

at his residence. #hus, PD# reasonably suspected petitioner

o" stealing the company$s property. At that )uncture, theemployer may already dismiss the employee since it had

reasonable grounds to believe or to entertain the moral

conviction that the latter was responsible "or the misconduct,

and the nature o" his participation therein rendered him

absolutely unworthy o" the trust and con"idence demanded by

his position.

Petitioner also claims that he could only be "aulted "or

breaching PD#$s rules and regulations which prohibited the

employees "rom bringing home company materials. In this

regard, petitioner e(acerbates his position. By admitting that

he breached company rules, he buttressed his employer$s

claim that he committed serious misconduct.

Employees cannot ta!e company rules "or granted, especially

in this case where petitioner$s breach involved various plant

materials that may cause ma)or disruption in the company$s

operations. Indeed, an employer may discharge an employee

"or re"usal to obey a reasonable company rule. As a rule,

although this 4ourt leans over bac!wards to help wor!ers and

employees continue with their employment, acts o"

dishonesty in the handling o" company property are a

di""erent matter.

Given these circumstances, it would have been un"air "or

PD# to !eep petitioner in its employ. Petitioner displayed

actions that made him untrustworthy. #hus, as a measure o"

sel"protection, PD# validly terminated his services "or

serious misconduct and loss o" con"idence.

BITOY JAVIER !. FLY ACE CORPORATION

FACTS: Javier "iled a complaint be"ore the 234 "or

underpayment o" salaries and other labor standard bene"its,

alleging that he was an employee o" >ly Ace per"orming tas!s

at the respondent$s warehouse e(cept in instances when he

would be ordered to accompany the company$s delivery

vehicles, as pahinante that during his employment, he was

not issued an identi"ication card and payslips by the company.

6n &ay , 00, he reported "or wor! but he was no longer

allowed to enter the company premises by the security guard

upon the instruction o" 3uben 6ng, his superior. A"ter several

minutes o" begging to the guard to allow him to enter, he saw

6ng who instructed him by saying, %#anungin mo ana! mo.

8e then went home and tal!ed to his "amily and discovered

that 6ng had been courting his daughter Annalyn.

+ubse1uently, Annalyn tried to tal! to 6ng and convince him

to spare her "ather "rom trouble but he re"used to accede.

#herea"ter, Javier was terminated "rom his employment

without notice. 8e was neither given the opportunity to re"ute

the cause:s o" his dismissal "rom wor!. >ly Ace averred that

&r. 6ng contracted Javier roughly F to times only in a month

whenever the vehicle o" its contracted hauler, was not

available. 6n April /0, 00, >ly Ace no longer needed the

services o" Javier. Denying that he was their employee, >ly

Ace insisted that there was no illegal dismissal. >ly Ace

submitted a copy o" its agreement with the contracted hauler

and copies o" ac!nowledgment receipts evidencing payment

to Javier "or his contracted services on a %pa!yaw':piece rate

pay basis and the latter$s signatures:initials.

#he A dismissed the complaint "or lac! o" merit, holding that

the respondents are not liable "or salary di""erentials. 6n

appeal with the 234, the appeal was partially G3A2#ED

holding respondent >7 A4E 463P63A#I62 guilty o" illegal

dismissal and nonpayment o" ?/thmonth pay. 6n appeal tothe 4A, the 234$s "indings that Javier was indeed a "ormer

employee o" >ly Ace were annulled. #he 4A reinstated the

dismissal o" Javier$s complaint as ordered by the A. #he 4A

li!ewise added that Javier$s "ailure to present pieces o"

evidence pointed to the conclusion that he was not an

employee o" >ly Ace. #he petitioners moved "or

reconsideration, but to no avail. 8ence, an appeal to the

+upreme 4ourt was "iled.

ISSUES: ?. 5hether or not the petitioner was an

employee o" >ly Ace.

. 5hether or not the petitioner is entitled to his monetary

claims.

RULING:

?. #he A and the 4A both concluded that Javier "ailed to

establish his employment with >ly Ace. By way o" evidence on

this point, all that Javier presented were his sel"serving

statements purportedly showing his activities as an employee

o" >ly Ace. 4learly, Javier "ailed to pass the substantiality

re1uirement to support his claim. 8ence, the 4ourt sees no

reason to depart "rom the "indings o" the 4A.

#he 4ourt is o" the considerable view that on Javier lies the

burden to pass the wellsettled tests to determine the

e(istence o" an employeremployee relationship, vily Ace engaged his services as a

regular employee; that >ly Ace paid his wages as an

employee, nor that >ly Ace could dictate what his conduct

should be while at wor!. Javier$s allegations did not establish

the attributes o" an employeremployee relationship on the

basis o" the abovementioned "our"old test. 5orse, Javier was

not able to re"ute >ly Ace$s assertion that it had an agreementwith a hauling company to underta!e the delivery o" its goods.

It was also ba""ling to realily

Ace$s denial o" his services$ e(clusivity to the company. In

short, all that Javier laid down were bare allegations without

corroborative proo".

. 4onsidering the above "indings, the 4ourt does not see the

necessity to resolve the second issue presented.

#he 4ourt$s decision does not contradict the settled rule that

%payment by the piece is )ust a method o" compensation and

does not de"ine the essence o" the relation.' Payment on a


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piecerate basis does not negate regular employment. %#he

term Hwage$ is broadly de"ined in Article - o" the abor 4ode

as remuneration or earnings, capable o" being e(pressed in

terms o" money whether "i(ed or ascertained on a time, tas!,

piece or commission basis. Payment by the piece is )ust a

method o" compensation and does not de"ine the essence o"

the relations. #he petition was DE2IED.

C.F. SARP CO. !. PIONEER INSURANCE

FACTS: 5il"redo Agustin and 8ernando &inimo applied with

4.>. +harp sometime in August ?0 as sandblasters and

painters in ibya. A"ter passing the interview, they were

re1uired to submit their passports, seaman$s boo!, 2BI

clearance, employment certi"icates, certi"icates o" seminar

attended and results o" medical e(amination. *pon

submission o" the re1uirements, a contract o" employment

was e(ecuted between respondents and 4.> +harp.

#herea"ter, respondents were re1uired to attend various

seminars, open ban! account with the corresponding

allotment slips and attend a predeparture orientation. #hey

were then advised to prepare "or immediate deployment and

to report to 4.> +harp to ascertain the schedule o" their

deployment. A"ter a month, respondents were yet to be

deployed prompting them to re1uest "or the release o" thedocuments they had submitted to 4.>. +harp but it re"used to

surrender the documents which led to the "iling o" the

complaint be"ore the P6EA.

P6EA "ound 4.>. +harp guilty o" violation o" Article/@! o" the

abor 4ode. 4onse1uently 4.>. +harp$s license was suspended

until the return o" the disputed documents to respondent. 6n

&arch ?0, ?F, respondents "iled a complaint "or breach o"

contract and damages against 4.>. +harp and its surety,

Pioneer Insurance and +urety 4orporation be"ore the 3#4 o"

Pasay 4ity.

#he trial court ruled that there was violation o" the contract

when 4.>. +harp "ailed to deploy and release the papers anddocuments o" respondents, hence, they are entitled to

damages. #he trial court li!ewise upheld the cause o" action

o" respondents against Pioneer Insurance, the "ormer being

the actual bene"iciaries o" the surety bond. 6n appeal, 4.>.

+harp and 3ocha raise )urisdictional issue that 3#4 has no

)urisdiction over the case as it is vested upon the P6EA,

including money claims arising out o" or by virtue o" any

contract involving wor!ers "or overseas employment.

#he 4ourt o" Appeals upheld the )urisdiction o" the trial court

by ruling that petitioners are stopped "rom raising such

1uestion because they have actively participated in the

proceeding be"ore the trial court. #he 4A "urther held that

since there is no per"ected employment contract between the

parties, it is the 3#4 not the P6EA whose )urisdiction pertains

only to claims arising "rom contracts involving >ilipino

seamen, which has )urisdiction over the case. Despite the

"inding that no contract was per"ected between the parties,

the 4A ad)udged 4.>. +harp and 3ocha liable "or damages but

limited the liability o" Pioneer Insurance to P?F0,000.00

pursuant to the contract o" suretyship between 4.>. +harp and

Pioneer Insurance. 3ocha "iled the instant petition on the

submission that there is no basis to hold him liable "or

damages because 4.>. +harp has signi"ied its intention to

return the documents and had in "act in"ormed respondents

that they may withdraw their documents anytime. 8e

introduced a new argument that he should not be held )ointly

liable with 4.>. +harp considering that the company has a

separate personality and that there was no showing in thecomplaint that he had participated in the malicious act

complained. 8e adds that his liability only stems "rom the

Indemnity Agreement with Pioneer and does not e(tend to

respondents.

CONTENTION OF TE PETITIONER: 3ocha contended that

he should not be held liable with 4.>. +harp considering that

the company has a separate personality.

CONTENTION OF TE RESPONDENTS: 3espondents

maintain that they are entitled to damages "or 4.>. +harp$s

un)usti"ied re"usal to release the documents to them and "or

re1uiring them to sign a 1uitclaim which would e""ectively bar

them "rom see!ing redress against petitioners.

ISSUE: 5hether or not a local private employment agency

may be held liable "or breach o" contract "or "ailure to deploy

a sea"arer.

RULING:#he +upreme 4ourt sustained the trial court$s ruling.

#he contract o" employment entered into by the plainti""s and

the 4.>. +harp is an actionable document, the same contract

having the essential re1uisites "or its validity. 4ontracts

undergo three distinct stages, negotiation; per"ection or birth;

and consummation. *nder Article ?/?F o" the 4ivil 4ode, a

contract is per"ected by mere consent and "rom that moment

the parties are bound not only to the "ul"illment o" what has

been e(pressly stipulated but also the conse1uences which,

according to their nature, may be in !eeping with good "aith,

usage and law. #he +upreme 4ourt held that it is a per"ected

contract o" employment. By the contract, 4.>. +harp, on

behal" o" its principal, International +hipping &anagement,

Inc. hired respondents as +andblaster:painter "or a /month

contract with a basic monthly salary o" *+KF0.00. #hus, the

ob)ect o" the contract is the service to be rendered by the

respondents on board the vessel while the cause o" the

contract is the monthly compensation they e(pect to receive.

#hese terms were embodied in the 4ontract o" Employmentwhich was e(ecuted by the parties. #he agreement upon the

terms o" the contract was mani"ested by the consent "reely

given by both parties through their signatures in the contract.

2either parties disavow the consent they both voluntarily

gave. #hus, there is a per"ected contract o" employment. #he

commencement o" an employeremployee relationship must

be treated separately "rom the per"ection o" an employment

contract. #he per"ection o" the contract which in this case

coincided with the date o" e(ecution thereo", occurred when

petitioner and respondent agreed on the ob)ect and the

cause, as well as the rest o" the terms and conditions therein.

#he commencement o" the employeremployee relationship

would have ta!en place had petitioner been actually deployed

"rom the point o" hire. #hus, even be"ore the start o" anyemployeremployee relationship, contemporaneous with the

per"ection o" the employment contract was the birth o" certain

rights and obligations, the breach o" which may give rise to a

cause o" action against the erring party. Despite the "act that

the employeremployee relationship has not commenced due

to the "ailure to deploy respondents in this case, respondents

are entitled to rights arising "rom the per"ected contract o"

employment, such as the right to demand per"ormance by

4.>. +harp o" its obligation under the contract. >urthermore,

the +upreme 4ourt a""irms the e(emplary damages and

attorney$s "ees. E(emplary damages may be awarded when a

wrong"ul act is accompanied by bad "aith or when the

de"endant acted in a wanton, "raudulent, rec!less, oppressive,

or malevolent manner which would )usti"y an award o"

e(emplary damages under article / o" the 4ivil 4ode.

+ince the award o" e(emplary damages is proper, attorney$s

"ees and cost o" the suit may also be recovered as provided

under Article 0 o" the 4ivil 4ode.

ARO, TIROL, ET AL. !. NLRC

FACTS: +everal employees o" private respondent Benthel

Development 4orporation, including the petitioners, "iled a

4omplaint "or illegal dismissal with various money claims and

prayer "or damages against the latter, in the 234 Arbitration

Branch. #herea"ter, abor Arbiter rendered a decision "inding

private respondent guilty o" illegal dismissal and ordering it to

pay its thirtysi( @/ employees P,0.00 as separationpay. #he employees, including the petitioners herein,

appealed "rom the said decision. #he 234, in 234 4ase 2o.

V000/, a""irmed the decision o" abor Arbiter 4arreon in

its Decision dated January ?, ?, with the modi"ication that

private respondent pay bac!wages computed "rom the

respective dates o" dismissal until "inality o" the decision.

Private respondent, unsatis"ied with the modi"ication made by

the 234, "iled a motion "or reconsideration. #he 234,

however, denied the motion ruling that private respondent

"ailed to establish the date o" the completion o" the pro)ect.


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Aggrieved, private respondent "iled a Petition "or 4ertiorari

with the 4A, assailing the decision o" the 234 and the denial

o" its motion "or reconsideration which was dismissed "or non

payment o" doc!et "ees and insu""iciency o" "orm. It "iled a

motion "or reconsideration, but the latter was also denied.

#hus, private respondent "iled with this 4ourt, a Petition "or

3eview on 4ertiorari. In a 3esolution dated +eptember 0,

000, this 4ourt denied the petition "or having been "iled out

o" time and "or nonpayment o" doc!et and other law"ul "ees.

#he employees, including the petitioners, upon the "inality o"

this 4ourt9s resolution, "iled a &otion "or E(ecution be"ore the

abor Arbiter o" the January ?, ? decision. #herea"ter, the

abor Arbiter ordered "or the issuance o" a writ o" e(ecution

directing the computation o" the awards. A"terwards, private

respondent "iled an appeal "rom the said 6rder with an urgent

prayer "or the issuance o" a temporary restraining order

and:or preliminary in)unction with public respondent 234.

#he said appeal was denied.

Public respondent remanded the case to the arbitration

branch "or appropriate action. In the meantime, "i"teen @?F

employees have e(ecuted A""idavits o" >ull +ettlement a"ter

having settled amicably with the private respondent. abor

Arbiter Violeta 6rtiailure to meet the )ob re1uirements during the

probation stage means that your services may be terminated

without prior notice and without recourse to separation pay.

555E4 also attached to its Position Paper a memo dated

+eptember 0, 00 in which +an &ateo as!ed Aliling to

e(plain why he should not be terminated "or "ailure to meet


6/29

the e(pected )ob per"ormance, considering that the load

"actor "or the GN +huttles "or the period July to +eptember was

only 0.?L as opposed to the allegedly agreed upon load o"

0L targeted "or August F, 00. According to 555E4,

Aliling, instead o" e(plaining himsel", simply submitted a

resignation letter. In a 3eplyA""idavit dated December ?/,

00, Aliling denied having received a copy o" +an &ateo$s

+eptember 0, 00 letter.

#he abor Arbiter @A declared Aliling$s termination as

un)usti"ied and ordered 555E4 to pay Aliling his salaries and

bene"its, ?/th month pay and attorney$s "ees. #he A gave

credence to Aliling$s allegation about not receiving and,

there"ore, not bound by, +an &ateo$s purported +eptember

0, 00 memo. #he memo, to reiterate, supposedly apprised

Aliling o" the sales 1uota he was, but "ailed, to meet. Pushing

the point, the labor arbiter e(plained that Aliling cannot be

validly terminated "or noncompliance with the 1uota

threshold absent a prior advisory o" the reasonable standards

upon which his per"ormance would be evaluated.

Both parties appealed the above decision to the 234, which

a""irmed the Decision in toto in its 3esolution dated &ay /?,

00-. #he separate motions "or reconsideration were also

denied by the 234 in its 3esolution dated August /?, 00-.

Aliling went on certiorari to the 4A, which eventually rendereda Decision on the "ollowing premisesC @a respondents "ailed to

prove that Aliling$s dismal per"ormance constituted gross and

habitual neglect necessary to )usti"y his dismissal; @b not

having been in"ormed at the time o" his engagement o" the

reasonable standards under which he will 1uali"y as a regular

employee, Aliling was deemed to have been hired "rom day

one as a regular employee; and @c the strained relationship

e(isting between the parties argues against the propriety o"

reinstatement.

CONTENTION OF TE PETITIONER: 4ontends that he is a

regular employee "rom the time he signed the employment

contract. 8e was illegally dismissed and that he is entitled to

bac!wages and separation pay i" not entitled toreinstatement.

CONTENTION OF TE RESPONDENT: 555E4 contends

that Aliling was hired on a probationary basis and "ired him

be"ore he became a regular employee.

ISSUES: ?. 5hether or not the petitioner is a regular

employee o" respondent.

. 5hether or not the petitioner was illegally dismissed.

RULING:

?. #he petitioner Aliling is a regular employee. #he employee

concerned !new, having been duly in"ormed during his

engagement, o" the standards "or becoming a regular

employee. #his is in star! contrast to the instant case where

the element o" being in"ormed o" the regulari


7/29

petitioner was "or a )ust cause nor was there substantial

evidence to demonstrate the standards were made !nown to

the latter at the time o" his engagement. 8ence, petitioner$s

right to security o" tenure was breached.

>urther, Aliling$s right to procedural due process was violated.

As earlier stated, to e""ect a legal dismissal, the employer

must show not only a valid ground there"or, but also that

procedural due process has properly been observed. 5hen

the abor 4ode spea!s o" procedural due process, the

re"erence is usually to the two @written notice rule

envisaged in the abor 4ode which providesC @a A written

notice served on the employee speci"ying the ground or

grounds "or termination, and giving to said employee

reasonable opportunity within which to e(plain his side;@b A

hearing or con"erence during which the employee concerned,

with the assistance o" counsel i" the employee so desires, is

given opportunity to respond to the charge, present his

evidence or rebut the evidence presented against him; and @c

A written notice Oo" termination served on the employee

indicating that upon due consideration o" all the circumstance,

grounds have been established to )usti"y his termination. In

case o" termination, the "oregoing notices shall be served on

the employee$s last !nown address.

8ere, the "irst and second notice re1uirements have not beenproperly observed, thus tainting petitioner$s dismissal with

illegality. #he adverted memo dated +eptember 0, 00 o"

555E4 supposedly in"orming Aliling o" the li!elihood o" his

termination and directing him to account "or his "ailure to

meet the e(pected )ob per"ormance would have had

constituted the =charge sheet,= su""icient to answer "or the

"irst notice re1uirement, but "or the "act that there is no proo"

such letter had been sent to and received by him. In "act, in

his December ?/, 00 4omplainant$s 3eply A""idavit, Aliling

goes on to tag such letter:memorandum as "abrication.

555E4 did not adduce proo" to show that a copy o" the

letter was duly served upon Aliling. 4learly enough, 555E4

did not comply with the "irst notice re1uirement.

2either was there compliance with the imperatives o" a

hearing or con"erence. #he 4ourt need not dwell at length on

this particular breach o" the due procedural re1uirement.

+u""ice it to point out that the record is devoid o" any showing

o" a hearing or con"erence having been conducted. 6n the

contrary, in its 6ctober ?, 00 letter to Aliling, or barely "ive

@F days a"ter it served the notice o" termination, 555E4

ac!nowledged that it was still evaluating his case. And the

written notice o" termination itsel" did not indicate all the

circumstances involving the charge to )usti"y severance o"

employment.

JAO !. BCC PRODUCT SALES

FACTS: Petitioner 4harlie Jao maintains that respondent B44

Product +ales Inc. @B44 and its President, respondent

#errance #y employed him as comptroller starting "rom

+eptember ?F with a monthly salary o" P0,000.00 to

handle the "inancial aspect o" B44$s business. 8owever, on

6ctober ?,?F, the security guards o" B44, acting upon the

instruction o" #y, barred him "rom entering the premises o"

B44 where he then wor!ed. 8is attempts to report to wor!

were "rustrated because he continued to be barred "rom

entering the premises o" B44. #hus, he "iled a complaint "orillegal dismissal, reinstatement with "ull bac!wages, non

payment o" wages, damages and attorney$s "ees.

3espondents countered that petitioner was not their

employee but the employee o" +obien >ood 4orporation @+>4,

the ma)or creditor and supplier o" B44; and that +>4 had

posted him as its comptroller in B44 to oversee B44$s

"inances and business operations and to loo! a"ter +>4$s

interests or investments in B44.

#he abor Arbiter ruled in "avor o" petitioner but the 234

vacated the ruling and remanded the case "or "urther

proceedings. #herea"ter, a new abor Arbiter dismissed

petitioner$s complaint "or want o" an employeremployee

relationship between the parties. 6n appeal, the 234

reversed the abor Arbiter$s decision and declared that

petitioner had been illegally dismissed. It ordered the

payment o" unpaid salaries, bac!wages and ?/th month pay,

separation pay and attorney$s "ees. 3espondents moved "or

the reconsideration o" the 234 decision, but such was

denied. 6n petition to the 4ourt o" Appeals, the 4A agreed

that no employeremployee relationship e(isted between

petitioner B44 and the private respondent. #he 4A denied

petitioner$s motion "or reconsideration, hence, this petition.

CONTENTION OF TE PETITIONER: #o prove his

employment with B44, petitioner o""ered the "ollowing, among

othersC @a B44 Identi"ication 4ard @ID issued to him stating

his name and his position as %comptroller,' and bearing his

picture, his signature, and the signature o" #y; and @b a

payroll o" B44 "or the period o" 6ctober ??F, ? that

petitioner approved as comptroller. 5ith regards to his

a""idavit e(ecuted in &arch ?, petitioner contends that

such did not establish the absence o" an employeremployee

relationship between him and respondents because it had

been e(ecuted a"ter his employment with respondents had

been terminated; and that the a""idavit re"erred to his

subse1uent employment by +>4 "ollowing the termination o"

his employment by B44.

CONTENTION OF TE RESPONDENT:3espondents denied

that petitioner was B44$s employee. #hey a""irmed that +>4

had installed petitioner as its comptroller in B44 to oversee

and supervise +>4$s collections and the account o" B44 to

protect +>4$s interest; that their issuance o" the ID to

petitioner was only "or the purpose o" "acilitating his entry into

the B44 premises in relation to his wor! o" overseeing the

"inancial operations o" B44 "or +>4; and that petitioner

e(ecuted an a""idavit in &arch ?, stating, among others,

as "ollowsC

?. I am a 4PA @4erti"ied Public Accountant by pro"ession but

presently associated with, or employed by, +obien >ood

4orporation (((;. In the course o" my association with, or employment by,

+obien >ood 4orporation, I have been entrusted by my

employer to oversee and supervise collections on account o"

receivables due +>4 "rom its customers or clients

ISSUE: 5hether or not an employeremployee relationship

e(isted between petitioner and B44.

RULING: #here is no employeremployee relationship

between petitioner and respondent.

6n the a""idavit o" petitioner, the 4ourt "ound that such

a""idavit actually supported the contention that petitioner had

really wor!ed in B44 as +>4$s representative. It is more

believable that petitioner$s a""idavit was re"erring to his

employment by +>4 even while he was reporting to B44 as a

comptroller. Petitioner e(ecuted the a""idavit in &arch ? to

re"ute a statement #y made in his own a""idavit to the e""ect

that petitioner had illegally appropriated some chec!s without

authority "rom B44. Petitioner thereby sought to show that he

had the authority to receive the chec!s pursuant to the

arrangements between +>4 and B44. 2aturally, the

circumstances petitioner adverted to in such a""idavit

concerned those occurring when he actually wor!ed as

comptroller in B44. >urther, an a""idavit by Al"redo +o, the

President o" +>4, lent credence to respondents$ denial o"

petitioner$s employment. +o declared in that a""idavit, among

others, that he had !nown petitioner "or being %earlier his

retained accountant having his own o""ice but did not holdo""ice' in +>4$s premises; and that #y had approached him

%loo!ing "or an accountant or comptroller to be employed by

him in B44$s distribution business' o" +>4$s general

merchandise.

&oreover, in determining the presence or absence o" an

employeremployee relationship, the 4ourt has consistently

loo!ed "or the "ollowing incidents, to witC @a the selection and

engagement o" the employee; @b the payment o" wages; @c

the power o" dismissal; and @d the employer$s power to

control the employee on the means and methods by which


8/29

the wor! is accomplished. #he last element, the socalled

control test, is the most important element.

All these "our elements are absent in the present case. >irst,

there is no proo" that the services o" the private respondent

were engaged to per"orm the duties o" a comptroller in the

petitioner company. #here is no proo" that the private

respondent has undergone a selection procedure as a

standard re1uisite "or employment, especially with such a

delicate position in the company. 2either is there any proo" o"

his appointment nor is there any showing that the parties

entered into an employment contract. +econd, as clearly

established on record, the private respondent was not

included in the petitioner company$s payroll during the time o"

his alleged employment with the "ormer. #he name o" 4harlie

Jao appears therein as a comptroller who is authoriinance 8ead o" 2egros wrote #eng

re1uiring him to e(plain in writing why no disciplinary action

should be ta!en against him "or his absence during the crucial

Game F o" the 2ational 4hampionship 3ound. 8e was "urther

in"ormed that a "ormal investigation would be conducted.

A"ter the hearing, the management o" 2egros, in"ormed #eng

o" his termination "rom the team. #he abor Arbiter ruled that

#eng$s dismissal is illegal ruling that the penalty o" dismissal

was not )usti"ied since the grounds relied upon by petitionersdid not constitute serious misconduct or will"ul disobedience

or insubordination that would call "or the e(treme penalty o"

dismissal "rom service. 6n appeal, the 234 dismissed the

complaint "or being premature since the arbitration

proceedings be"ore the 4ommissioner o" the &BA were still

pending when #eng "iled his complaint "or illegal dismissal.

#he 4A upheld the order o" the abor Arbiter holding that the

grounds relied upon by 2egros were not enough to merit the

supreme penalty o" dismissal.

CONTENTION OF TE PETITIONERS: #he petitioners

contend that there was )ust cause "or the dismissal o"

respondent, hence, they could not be charged o" illegal

dismissal.

ISSUE: 5hether or not the respondent was illegally

terminated.

RULING:7E+. #he court "inds penalty o" dismissal was indeed

too harsh. 5hile the employer has the inherent right to

discipline, including that o" dismissing its employees, this

prerogative is sub)ect to the regulation by the +tate in the

e(ercise o" its police power. In this regard, it is a hornboo!

doctrine that in"ractions committed by an employee should

merit only the corresponding penalty demanded by the

circumstance. #he penalty must be commensurate with the

act, conduct or omission imputed to the employee and must

be imposed in connection with the disciplinary authority o" the

employer. In the case at bar, the penalty handed out by thepetitioners was the ultimate penalty o" dismissal. #here was

no warning or admonition "or respondent$s violation o" team

rules, only outright termination o" his services "or an act which

could have been punished appropriately with a severe

reprimand or suspension.

LYNVIL FISING !. ARIOLA

FACTS: ynvil >ishing Enterprises, Inc. @ynvil is a company

engaged in deepsea "ishing, operated and managed by

3osendo +. de Bor)a. 6n Aug ?, ?, a report was received


9/29

"rom a witness that the herein respondents conspired with

one another and stole eight @ tubs o" =pampano= and

=tangigue= "ish and delivered them to another vessel, to the

pre)udice o" ynvil. By reason o" the report and a"ter initial

investigation, ynvil$s General &anager 3osendo +. De Bor)a

@De Bor)a summoned respondents to e(plain within "ive @F

days why they should not be dismissed "rom service.

8owever, e(cept "or Alcovendas and BaQeailing to e(plain as

re1uired, respondents$ employment was terminated. ynvil,

through De Bor)a, "iled a criminal complaint against the

dismissed employees. Aggrieved, the employees "iled with the

Arbitration Branch o" the 2ational abor 3elations

4ommission2ational 4apital 3egion on F August ? a

complaint "or illegal dismissal with claims "or bac!wages,

salary di""erential reinstatement, service incentive leave,

holiday pay and its premium and ?/th month pay "rom ?

to?. #hey also claimed "or moral, e(emplary damages and

attorney$s "ees "or their dismissal with bad "aith.

#he abor Arbiter "ound merit in complainants$ charge o"

illegal dismissal. 234 reversed such decision and entered a

new one dismissing the present complaints "or utter lac! o"

merits. 8owever on appeal to the 4A, the latter reinstated the

decision o" the 234, hence this appeal.

CONTENTION OF TE PETITIONERS: #he "inding o" the

criminal case "iled against respondents is a su""icient basis "or

valid termination o" employment based on serious misconduct

and:or loss o" trust and con"idence.

ISSUE: 5hether or not the respondents were illegally

dismissed.

RULING:#he 4ourt ruled that such dismissal was valid based

on the positive and clear narration o" "acts o" the three

witnesses to the commission o" 1uali"ied the"t.

Just cause is re1uired "or a valid dismissal. #he abor 4ode

provides that an employer may terminate an employmentbased on "raud or will"ul breach o" the trust reposed on the

employee. +uch breach is considered will"ul i" it is done

intentionally, !nowingly, and purposely, without )usti"iable

e(cuse, as distinguished "rom an act done carelessly,

thoughtlessly, heedlessly or inadvertently. It must also be

based on substantial evidence and not on the employer$s

whims or caprices or suspicions otherwise, the employee

would eternally remain at the mercy o" the employer. oss o"

con"idence must not be indiscriminately used as a shield by

the employer against a claim that the dismissal o" an

employee was arbitrary. And, in order to constitute a )ust

cause "or dismissal, the act complained o" must be wor!

related and shows that the employee concerned is un"it to

continue wor!ing "or the employer. In addition, loss o"

con"idence as a )ust cause "or termination o" employment is

premised on the "act that the employee concerned holds a

position o" responsibility, trust and con"idence or that the

employee concerned is entrusted with con"idence with

respect to delicate matters, such as the handling or care and

protection o" the property and assets o" the employer. #he

betrayal o" this trust is the essence o" the o""ense "or which an

employee is penali


10/29

standards "or permanent employment. #he %trial period' or

the length o" time the probationary employee remains on

probation depends on the parties$ agreement, but it shall not

e(ceed si( @ months under Article ? o" the abor 4ode,

unless it is covered by an apprenticeship agreement

stipulating a longer period.

Dalangin admitted in compulsory arbitration that the

pro(imate cause "or his dismissal was his re"usal to attend the

company$s %Values >ormation +eminar' scheduled on 6ctober

-, 00?, a +aturday. 8is reason is that it has no relation to

his duties when in "act it would help him to !now more the

company policies. 8e also doesn$t want to interact with his co

employees. #hese are some o" the acts proved that made

Dalangin not 1uali"y "or his wor!. #he dismissal was a valid

e(ercise o" management prerogative.

S0IPPERS UNITED PACIFIC !. DOZA

FACTS: +!ippers *nited Paci"ic, Inc. deployed, in behal" o"

+!ippers, De Gracia, ata, and Aprosta to wor! on board the

vessel &V 5isdom +tar. De Gracia, et al. claimed that

+!ippers "ailed to remit their respective allotments "or almost

"ive months, compelling them to air their grievances with the

3omanian +ea"arers >ree *nion. 6n ? December ?, I#>Inspector Adrian &ihalcioiu o" the 3omanian +ea"arers *nion

sent 4aptain +avvas o" 4osmos +hipping a "a( letter, relaying

the complaints o" his crew, namelyC home allotment delay,

unpaid salaries, late provisions, lac! o" laundry services, and

lac! o" maintenance o" the vessel. #o date, however, +!ippers

only "ailed to remit the home allotment "or the month o"

December ?.6n January ?, De Gracia, et al. were

unceremoniously discharged "rom &V 5isdom +tars and

immediately repatriated. *pon arrival in the Philippines, De

Gracia, et al. "iled a complaint "or illegal dismissal with the

abor Arbiter on April ? and prayed "or payment o" their

home allotment "or the month o" December ?, salaries "or

the une(pired portion o" their contracts, moral damages,

e(emplary damages, and attorney9s "ees.

CONTENTION OF TE PETITIONER: Aprosta, De Gracia,

ata and Door these reasons, the dismissal o" De

Gracia, et al. was illegal.

JULIE1S BA0ESOP !. ARNAIZ

FACTS: 6n January , 000, respondents who were hired as

chie" ba!ers by 3eyes in his three "ranchise branches o" Julie$s

Ba!eshop in Anti1ue "iled separate complaints against

petitioners "or underpayment o" wages, payment o" premium

pay "or holiday and rest day, service incentive leave pay, ?/th

month pay, cost o" living allowance @46A and attorney$s

"ees. #hese complaints were later on consolidated.

+ubse1uently on >ebruary ?, 000, 3eyes reassigned

respondents as utility:security personnel tas!ed to clean the

outside vicinity o" his ba!eshops and to maintain peace and

order in the area without diminution in pay and otherprivileges. 3espondents, however, re"used to sign the same

and li!ewise re"used to per"orm their new assignments by not

reporting "or wor!. In a lettermemorandum dated &arch ?/,

000, 3eyes directed respondents to report bac! "or wor! and

to e(plain why they "ailed to assume their duties as

utility:security personnel. A second lettermemorandum o" the

same tenor dated &arch , 000 was also sent to

respondents. 3espondents did not heed both memoranda. It

was agreed that the parties would enter into a compromise

agreement on &arch -, 000. 8owever, on >ebruary , 000,

respondents, who were then represented by a di""erent

counsel, amended their complaints by including in their

causes o" action illegal dismissal and a claim "or

reinstatement and bac!wages. 3eali


11/29

diminution in pay and privileges and that same is in

accordance with the re1uirements o" the business to protect

its goodwill and reputation as well as the health and wel"are

o" the consuming public.

CONTENTION OF TE RESPONDENTS: 3espondents

contend that the trans"er:reassignment by the petitioner to

another position constitutes constructive dismissal.

ISSUES: ?. 5hether or not the 4ourt o" Appeals commit

grave abuse o" discretion "or disturbing the "indings o" "acts o"

the abor Arbiter and the 234.

. 5hether or not the trans"er:reassignment o" respondents to

another position without diminution in pay and other

privileges tantamount to constructive dismissal.

RULING:

?. #he 4ourt o" Appeals is correct in reviewing the "indings o"

the 2ational abor 3elations 4ommission. Indeed, "actual

"indings o" labor o""icials who are deemed to have ac1uired

e(pertise in matters within their respective )urisdictions are

generally accorded not only respect, but even "inality. It is a

wellentrenched rule that "indings o" "acts o" the 234,

a""irming those o" the abor Arbiter, are accorded respect and

due consideration when supported by substantial evidence.

8owever, the doctrine o" great respect and "inality has noapplication to the case at bar "or the abor Arbiter dismissed

respondents$ complaints on mere technicality and thus the

234 did not, on any occasion, a""irm any "actual "indings o"

the abor Arbiter. Besides, the 4A, at any rate, may still

resolve "actual issues by e(press mandate o" the law despite

the respect given to administrative "indings o" "act.

. #he trans"er:reassignment o" respondents constitutes

constructive dismissal. #he management is "ree to regulate,

according to its own discretion and )udgment, all aspects o"

employment, including hiring, wor! assignments, wor!ing

methods, time, place and manner o" wor!, processes to be

"ollowed, supervision o" wor!ers, wor!ing regulations, trans"er

o" employees, wor! supervision, lay o"" o" wor!ers anddiscipline, dismissal and recall o" wor!ers. #he e(ercise o"

management prerogative, however, is not absolute as it must

be e(ercised in good "aith and with due regard to the rights o"

labor. In constructive dismissal cases, the employer has the

burden o" proving that the trans"er o" an employee is "or )ust

or valid ground, such as genuine business necessity. #he

employer must demonstrate that the trans"er is not

unreasonable, inconvenient, or pre)udicial to the employee

and that the trans"er does not involve a demotion in ran! or a

diminution in salary and other bene"its. I" the employer "ails to

overcome this burden o" proo", the employee$s trans"er is

tantamount to unlaw"ul constructive dismissal. In this case,

petitioners insist that the trans"er o" respondents was a

measure o" sel"preservation and was prompted by a desire to

protect the health o" the buying public, claiming that

respondents should be trans"erred to a position where they

could not sabotage @introduce harm"ul "oreign substances in

ba!ing bread the business pending resolution o" their cases.

Petitioners$ bare assertions o" imminent threat "rom the

respondents are mere accusations which are not

substantiated by any proo" and are mere imaginary and not

real. #his 4ourt is proscribed "rom ma!ing conclusions based

on mere presumptions or suppositions. #he trans"er was a

demotion in ran!. #here is demotion when an employee is

trans"erred "rom a position o" dignity to a servile or menial

)ob. 6ne does not need to stretch the imagination to

distinguish the wor! o" a chie" ba!er to that o" a

security:utility man. Although there was no diminution in pay,

there was undoubtedly a demotion in titular ran!.

#he petition is denied and the decision o" the 4ourt o" Appeals

is a""irmed.

GALANG !. MALASU2UI

FACTS: 3espondent Julia &alasugui was hired by petitioner

&a. &elissa Galang to ta!e care, oversee and man the

premises o" the Davao 3oyal Garden 4ompound, the main

compound o" Galang where the orchids and other ornamental

plants used "or the business were nursed and propagated.

Aside "rom ta!ing care o" the plants, she was re1uired by

Galang to be present at the premises at -C/0 a.m. until FC/0

p.m. every day, including +aturdays, +undays and 8olidays

without any dayo""s. Galang would visit the premises at least

thrice a wee! and give her instructions on what to do. Among

these instructions were tending, watering and spraying with

chemicals various orchid varieties, pac!ing the orchids "or

e(port purposes and cleaning the surroundings o" the hal"

hectare premises. >rom ?/?F, &alasugui was paid by

Galang P0.00 as daily wage and a"ter three years, it was

increased to P-0.00 per day until >ebruary ?. +he was

also given one thousand pesos @P?, 000.00 bonus every

December by Galang. &alasugui was later made to stay and

live at the premises, particularly in one o" the bun! houses

within the Pangi property which was vacated by the "amily

driver o" Galang, so that she could watch and guard the

premises even during nighttime. 8owever, she had to buy her

"ood.

In 2ovember ?, she became sic! with severe cough and

as!ed "or "inancial assistance "rom Galang "or medical chec!

up. #he coughing became incessant which prompted Galang

to bring her to a doctor and made to undergo a series o"

e(aminations including chest radiographic e(amination.

#herea"ter, she was terminated "rom wor! and barred "rom

entering the Pangi property.

&alasugui "iled a complaint "or illegal dismissal be"ore the

abor Arbiter. #he abor Arbiter rendered )udgment "inding

complainant$s charge o" illegal dismissal without merit but

ordered the company and Galang to pay respondent wage

di""erentials and ?/th month pay because there was still

employeremployee relationship. Galang appealed be"ore the

234 and the 234 a""irmed the decision o" the abor Arbiter.

6n petition, the 4ourt o" Appeals ruled that respondent was

illegally dismissed by Galang. It reinstated the award o" salary

di""erential to &alasugui in addition to the ?/th month pay.

>urther, because o" the ruling o" illegal dismissal against

Galang, the appellate court awarded separation pay to

&alasugui "or every year o" continuous service and "ull bac!wages "rom the time o" her dismissal up to the time o" the

"inality o" the )udgment. 8ence this petition was "iled.

CONTENTION OF TE PETITIONER: Petitioner alleged that

respondent pac!ed her bags and le"t the property a"ter being

scolded due to her nonappearance at the medical

e(amination arranged by the petitioner. #he submission is

that respondent le"t the premises and abandoned her wor!.

ISSUES: ?. 5hether or not the respondent has

abandoned her wor!.

. 5hether or not the respondent was constructively

dismissed.

RULING:

?. Abandonment is a "orm o" neglect o" duty, one o" the )ust

causes "or an employer to terminate an employee. It is a

hornboo! precept that in illegal dismissal cases, the employer

bears the burden o" proo". >or a valid termination o"

employment on the ground o" abandonment, the employer

must prove, by substantial evidence, the concurrence o" the

employee$s "ailure to report "or wor! "or no valid reason and

his categorical intention to discontinue employment.

#here is in this case no substantial evidence that will prove

respondent$s categorical intention to discontinue

employment. 6n the contrary, the story o" abandonment is

simply doubt"ul. #he 4ourt o" Appeals was correct in ruling

thatC %It is not in accord with normal human e(perience andtoo "limsy a reason "or petitioner so circumstanced, to )ust

pac! up her things and vacate the Pangi property a"ter being

1ueried on why she did not show up at the appointed time

with the radiologist. #he allegation that private respondent

was displeased a"ter incurring e(penses "or petitioner$s

medical chec!up remained unrebutted. 8ence, petitioner$s

testimony that she was prevented entry into the Pangi

property appeared more credible.

3espondent has been in the employ o" petitioner "or si( years

when the alleged abandonment happened. Being scolded, i" it

were true, is hardly a reason "or a gardener o" si( years to )ust

pac! up and leave the wor! premises where she was even


12/29

allowed to reside, at a time when she was ill and needed

medical attention. Indeed, the alleged scolding is itsel"

incredible. #he given reason was that respondent "ailed to

show up at her arranged appointment with the radiologist. It

is hard to believe that a sic! gardener, certainly o" minimal

means, would re"use the o""er o" medical services. In "act, the

basic allegation in respondent$s complaint "or illegal dismissal

was that petitioner$s %treatment to her became sour

especially when she re1uested that she be e(amined by a

doctor "or her cough.'

#here must be a concurrence o" the intention to abandon and

some overt acts "rom which an employee may be deduced as

having no more intention to wor!. +uch intent to discontinue

the employment must be shown by clear proo" that it was

deliberate and un)usti"ied.

In the instant case, the overt act relied upon by petitioner is

not only a doubt"ul occurrence but is, i" it did transpire, even

consistent with the dismissal "rom employment posited by the

respondent. #he "actual appraisal o" the 4ourt o" Appeals is

correct. Petitioner was displeased a"ter incurring e(penses

"or respondent$s medical chec!up and, it is credible that,

therea"ter, respondent was prevented entry into the wor!

premises. #his is tantamount to constructive dismissal.

. 4onstructive dismissal e(ists where there is cessation o"

wor! because continued employment is rendered impossible,

unreasonable or unli!ely, as an o""er involving a demotion in

ran! and a diminution in pay. 4onstructive dismissal is a

dismissal in disguise or an act amounting to dismissal but

made to appear as i" it were not. In constructive dismissal

cases, the employer is, concededly, charged with the burden

o" proving that its conduct and action or the trans"er o" an

employee are "or valid and legitimate grounds such as

genuine business necessity.

#he incredibility o" petitioner$s submission about

abandonment o" wor! renders credible the position o"

respondent that she was prevented "rom entering theproperty. #he dismissal o" respondent places upon petitioner

the burden o" proo" o" legality o" dismissal.

In termination cases, the burden o" proo" rests on the

employer to show that the dismissal is "or )ust cause. 5hen

there is no showing o" a clear, valid and legal cause "or the

termination o" employment, the law considers the matter a

case o" illegal dismissal and the burden is on the employer to

prove that the termination was "or a valid or authori


13/29

%rampant the"t,' by the crew, o" company property even

be"ore &ay F, 00. #he established "act that lanes, a non

&eralco employee, was o"ten seen during company

operations, conversing with the "oremen, "or reason or

reasons connected with the ongoing company operations,

gives rise to the 1uestionC what was he doing thereT

Apparently, he had been visiting &eralco wor!sites, at least in

the Valenor

one wor!ing at the scene who had seen or who had shown

"amiliarity with lanes @a non&eralco employee, not to have

!nown the reason "or his presence is to disregard the obvious,

or at least the very suspicious.

6n the whole, the totality o" the circumstances obtaining in

the case convinces us that Gala could not but have !nowledge

o" the pil"erage o" company electrical supplies on &ay F,

00; he was complicit in its commission, i" not by direct

participation, certainly, by his inaction while it was being

perpetrated and by not reporting the incident to company

authorities. #hus, we "ind substantial evidence to support the

conclusion that Gala does not deserve to remain in &eralco$s

employ as a regular employee. 8e violated his probationaryemployment agreement, especially the re1uirement "or him

%to observe at all times the highest degree o" transparency,

sel"lessness and integrity in the per"ormance o" their duties

and responsibilities. 8e "ailed to 1uali"y as a regular

employee.

UERT PILIPPINES !. YNSON

FACTS: 3espondent 3odante 7nson is the 2ational +ales

&anager @2+& "or automotive o" petitioner 5uerth

Philippines, Inc., and he was re1uired to travel to di""erent

parts o" the country. 5hile in Davao, he was con"ined at the

Davao Doctor9s 8ospital due to stro!e and thus heimmediately in"orm the petitioner company o" his ailment with

medical certi"icate as proo". 8e re1uested that administrative

wor! be given to him while in Davao 4ity, until completion o"

his therapy as recommended by his doctors which later on

disapproved by respondent company. #herea"ter, 3icanor sent

a letter dated to respondent, directing him to appear be"ore

the "ormer$s o""ice in &anila, "or an investigation, relative to

the "ollowing violations which carry the penalty o" suspension

and:or dismissal, based on the "ollowing alleged violationsC @?

absences without leave and @ abandonment o" wor!.

3espondent 7nson "ailed to attend and stated that his

attending physician advised him to re"rain "rom traveling, in

order not to disrupt his daily schedule "or therapy and

medication.

ater, 3icanor sent two letters, reiterating the contents o" his

"irst letter to respondent, and included gross ine""iciency as an

additional ground "or possible suspension or dismissal but

respondent reiterated the reasons "or his inability to attend

the investigation proceedings in &anila and, instead,

suggested that 3icanor come to Davao and conduct the

investigation there.

>inally, 7nson was terminated on the ground o" continued

absences without "iling a leave o" absence. 8e "iled a

4omplaint against petitioner and 3icanor "or illegal dismissal

and nonpayment o" allowances, with claim "or moral and

e(emplary damages and attorney$s "ees, in the 234,

3egional Arbitration Branch 2o. NI in Davao 4ity.

#herea"ter, abor Arbiter Amado &. +olamo rendered a

decision "inding respondents guilty o" illegal dismissal.

Petitioner and 3icanor appealed to the 234 @4agayan de 6ro

4ity, which a""irmed with modi"ication the Decision o" the

abor Arbiter, reducing the total awards o" moral and

e(emplary damages. #he 4A rendered a Decision, "inding that

petitioner had the right to terminate the employment o"

respondent, and that it had observed due process in

terminating his employment.

CONTENTION OF TE PETITIONER: Petitioner insists that

the ground "or the dismissal o" the respondent was his gross

dereliction o" duties as 2+&.

ISSUE: 5hether or not the petitioner was illegally dismissed.

RULING: 2o. Pursuant to Article o" the abor 4ode,

respondent$s illness is considered an authori


14/29

power to award any contract as it is the "unction o" the Bids

and Awards 4ommittee o" PDG44.

In a letter dated >ebruary ?, 00, a"ter investigating the

allegations against the petitioner, Atty. Bernardo

recommended to 4ru< and the PDG44 Board o" Directors the

"iling o" appropriate charges against the petitioner "or

violation o" 3epublic Act 2o. /0? @AntiGra"t and 4orrupt

Practices Act and 3epublic Act 2o. -?/ @4ode o" 4onduct

and Ethical +tandards "or Public 6""icials and Employees.

Attached to the said letter was a detailed outline report

prepared by Atty. Bernardo which speci"ied the acts

committed by the petitioner which led him to recommend the

"iling o" appropriate charges against the latter.

5ith respect to the petitioner$s receipt o" additional

compensation "rom the 46&EE4, Atty. Bernardo opined that

the services which the "ormer rendered "or the latter relates

to the duties which he actually per"orms pursuant to the

"unctions o" his o""ice as Building Administrator. Atty.

Bernardo "urther stated that, in rendering the said services "or

the 46&EE4, the petitioner acted with evident bad "aith as

he did not see! the permission o" PDG44 nor did he in"orm

46&EE4 that he was not authoriurther, on the

assumption that the petitioner is a regular employee, PDG44

asserted that the petitioner was not illegally dismissed as it

was based on a )ust cause "or terminating an employment, i.e.

loss o" trust and con"idence "or receiving unlaw"ul additional

compensation "or wor! rendered without its authority.

ISSUE: 5hether or not the petitioner was illegally dismissed.

RULING: 2o.

Article o" the abor 4ode statesC

Article .#E3&I2A#I62 B7 E&P67E3. An employer may

terminate an employment "or any o" the "ollowing causesC

@a +erious misconduct or will"ul disobedience by the

employee o" the law"ul orders o" his employer or

representative in connection with his wor!;

@b Gross and habitual neglect by the employee o" his duties;

@c >raud or will"ul breach by the employee o" the trust

reposed in him by his employer or duly authori


15/29

due process "or lac! o" notice. #he 4A re)ected 4ityland$s

e(planation that it deviated "rom the rule because the

circumstances o" the case le"t it no room to comply with the

re1uirement. #he 4A noted that although there was a meeting

intended to address the )anitors$ complaints against Galang

the latter had no !nowledge o" the charges at that point in

time. #he 4A stressed that Galang should have been given a

reasonable time to de"end himsel".

CONTENTION OF TE PETITIONER: Galang contends that

in granting 4ityland$s appeal, the 4A relied heavily on #upas$

+inumpaang +alaysay and on the )oint a""idavit o" Baldemor,

Arrogante and Dela 4ru


16/29

#he loss o" trust and con"idence must be based on will"ul

breach o" the trust reposed in the employee by his employer.

+uch breach is will"ul i" it is done intentionally, !nowingly, and

purposely, without )usti"iable e(cuse, as distinguished "rom an

act done carelessly, thoughtlessly, heedlessly or

inadvertently. &oreover, it must be based on substantial

evidence and not on the employer$s whims or caprices or

suspicions otherwise, the employee would eternally remain at

the mercy o" the employer. oss o" con"idence must not be

indiscriminately used as a shield by the employer against a

claim that the dismissal o" an employee was arbitrary. And, in

order to constitute a )ust cause "or dismissal, the act

complained o" must be wor!related and shows that the

employee concerned is un"it to continue wor!ing "or the

employer. In addition, loss o" con"idence as a )ust cause "or

termination o" employment is premised on the "act that the

employee concerned holds a position o" responsibility, trust

and con"idence or that the employee concerned is entrusted

with con"idence with respect to delicate matters, such as

handling or case and protection o" the property and assets o"

the employer. #he betrayal o" this trust is the essence o" the

o""ense "or which an employee is penaliour. #he breach o" the company$s trust in Villanueva was

shown to have been committed !nowingly and

will"ully.?Uwphi? Although the amount o" discrepancy or

money misappropriated may be considered minimal and even

inconse1uential to an established company such as &eralco, it

is the anomalous practice o" re1uiring applicants "or electric

service connection to pay amounts higher than re1uired that

is the cru( o" Villanueva$s o""ense. #he conscious design o"

issuing another receipt to ma!e it appear that there was a

mista!e in the initial transaction with the customers e(hibits a

culpable act bordering on dishonesty and deceit. I" not "or

personal gain, why did Villanueva e(act "rom customers

amounts in e(cess o" what was re1uired by the companyT

5hat would have Villanueva done had the customers "ailed to

discover the discrepancy between the amount they paid and

that appearing in the receipts issued to themT 5hy were

there no overages reported to his branch supervisor with

respect to e(cess payments which were no longer 1uestioned

by the customersT #hese 1uestions arise out o" the practice

which un"ortunately corrupted an employee li!e Villanueva.

#hese doubts sway the 4ourt away "rom Villanueva$s claim

that his errors were promptly corrected upon discovery.

Villanueva$s insistence, that the act which triggered his

dismissal did not )usti"y his separation "rom the servicebecause the 4ompany 4ode o" Employee Discipline "ailed to

ma!e mention o" his case in a speci"ic manner, "ails to

persuade the 4ourt. #he established "acts do not constitute a

mere case o" simple negligence. #he acts per"ormed were

without the slightest connotation o" inadvertence which

Villanueva could have demonstrated during the proceedings a

1uo.

Besides, the 4ourt is not unmind"ul o" the prerogatives

available to &eralco as an employer. #he company has the

right to regulate, according to its discretion and best

)udgment, all aspects o" employment, including wor!

assignment, wor!ing methods, processes to be "ollowed,

wor!ing regulations, trans"er o" employees, wor! supervision,layo"" o" wor!ers and the discipline, dismissal and recall o"

wor!ers. &anagement has the prerogative to discipline its

employees and to impose appropriate penalties on erring

wor!ers pursuant to company rules and regulations./ +o

long as they are e(ercised in good "aith "or the advancement

o" the employer$s interest and not "or the purpose o"

de"eating or circumventing the rights o" the employees under

special laws or under valid agreements, the employer$s

e(ercise o" its management prerogative must be upheld. #he

law imposes many obligations on the employer such as

providing )ust compensation to wor!ers and observance o" the

procedural re1uirements o" notice and hearing in the

termination o" employment. 6n the other hand, the law also

recogni


17/29

A certain report revealed that si( pairs o" intensi"ying screens

were missing. An investigation was conducted and employees

were 1uestioned. 8elario Adonis, Jr., a warehouse personnel,

was summoned and was as!ed to admit his participation in

the the"t o" the missing screens. 8owever, he pleaded

innocence. A"terwards, 8elario was noti"ied o" his termination

"rom service on the ground o" his "ailure to properly account

"or and maintain a balance o" the company9s stoc!

inventories, hence, resulting in Blue +!y9s loss o" trust and

con"idence in him. #he day a"ter, Blue +!y promptly "iled with

the Department o" abor and Employment @D6E an

establishment termination report indicating therein 8elario9s

dismissal "rom service "or cause.

2otices to e(plain:preventive suspension was also issued to

Arlene, Joseph, delivery personnel Jayde #anoan and

maintenance personnel:driver 5il"redo >asonilao. #he notices

in"ormed them that they were being accused o" gross

dishonesty in connection with their alleged participation in

and conspiracy with other employees in committing the"t

against company property, speci"ically relative to the loss o"

the si( intensi"ying screens. #hey were placed under

preventive suspension pending investigation and were thus

re1uired to "ile their written e(planations within hours "rom

receipt o" the notices. #hey submitted handwritten

memorandums denying !nowledge or complicity with thethe"t o" the intensi"ying screens.

2otices o" dismissal was then issued to Arlene, Joseph, Jayde

and 5il"redo notices o" dismissal "or cause stating therein that

evidence that they had conspired with each other to commit

the"t against company property was too glaring to ignore.

Blue +!y had lost its trust and con"idence on them and as an

act o" sel"preservation, their termination "rom service was in

order.

#hey "iled with the 2ational abor 3elations 4ommission

@234 a complaint "or illegal dismissal and suspension.

&eanwhile, an entrapment operation was conducted by the

police during which Jayde and 8elario were caught allegedlyattempting to sell to an operative an ultrasound probe worth

around P00,000.00 belonging to Blue +!y. #hey were then

criminally charged in court. Be"ore the complaint which was

"iled with the 234 can be resolved, 8elario, Jayde and

5il"redo e(ecuted a""idavits o" desistance stating therein that

their termination by Blue +!y was "or cause and a"ter

observance o" due process.

#he abor Arbiter denied the claims o" Arlene and Joseph.

+uch decision was reversed by the 234. #he 4A a""irmed the

234$s ruling.

ISSUE: 562 petitioners had proven by substantial evidence

the charges o" the"t against Arlene and Joseph which led to

the latter9s termination "rom service on the ground o" loss o"

trust and con"idence.

RULING: NO.

#he rule is long and well settled that, in illegal dismissal cases

li!e the one at bench, the burden o" proo" is upon the

employer to show that the employee$s termination "rom

service is "or a )ust and valid cause. #he employer$s case

succeeds or "ails on the strength o" its evidence and not on

the wea!ness o" that adduced by the employee, in !eeping

with the principle that the scales o" )ustice should be tilted in

"avor o" the latter in case o" doubt in the evidence presented

by them. 6"ten described as more than a mere scintilla, the

1uantum o" proo" is substantial evidence which is understoodas such relevant evidence as a reasonable mind might accept

as ade1uate to support a conclusion, even i" other e1ually

reasonable minds might conceivably opine otherwise. >ailure

o" the employer to discharge the "oregoing onus would mean

that the dismissal is not )usti"ied and there"ore illegal.

>or there to be a valid dismissal based on loss o" trust and

con"idence, the breach o" trust must be will"ul, meaning it

must be done intentionally, !nowingly, and purposely, without

)usti"iable e(cuse.

In the case at bar, we agree with the petitioners that mere

substantial evidence and not proo" beyond reasonable doubt

is re1uired to )usti"y the dismissal "rom service o" an

employee charged with the"t o" company property. 8owever,

we "ind no error in the 4A9s "indings that the petitioners had

not ade1uately proven by substantial evidence that Arlene

and Joseph indeed participated or cooperated in the

commission o" the"t relative to the si( missing intensi"ying

screens so as to )usti"y the latter9s termination "rom

employment on the ground o" loss o" trust and con"idence.

Blue +!y alleged that Arlene, who was a stoc! cler!, and

Joseph, a warehouse helper, had "ree access to the missing

items. Arlene, who !ept the stoc! cards, was supposed to be

monitoring on a daily basis the incoming and outgoing stoc!s

stored in or ta!en out o" the warehouse. Joseph too! the

stoc!s "rom the warehouse to the vehicles "or transport or

delivery purposes. Arlene and Joseph averred otherwise. #hey

insisted that they were mere lowly employees who did not

have actual custody o" company property, speci"ically, o" the

missing items. Arlene claimed that she was not responsible "or

conducting inventories and that she released stoc!s only

when urgently necessary and only in the absence o" those

authoriurther, Blue +!y alleged that the

ultrasound probe was among the items "ound missing in the

inventory conducted in December 00. 5e observe though

that the employees were dismissed "or alleged the"t o" si(

intensi"ying screens. In the termination notices, no re"erences

were made at all to a missing ultrasound probe.

Also, in the notices sent to Arlene and Joseph, "irst charging

them with the"t, and later, in"orming them o" their dismissal

"rom service, gross negligence was not stated therein as a

ground. 8ence, Arlene and Joseph could not have de"ended

themselves against the charge o" gross negligence. #hey

cannot be dismissed on that ground lest due process beviolated.

6nly the "ollowing had been established without disputeC @a

the "act o" loss o" the si( intensi"ying screens; @b an

entrapment operation was success"ully conducted by the

police operatives who caught Jayde and 8elario in the act o"

attempting to sell an ultrasound probe which allegedly

belonged to Blue +!y; and @c Jayde, 8elario and 5il"redo "iled

their a""idavits o" desistance to withdraw their complaints "or

illegal dismissal against Blue +!y while Arlene and Joseph

pursued their complaints.


18/29

#he nature o" Arlene and Joseph9s regular duties while under

Blue +!y9s employ and their speci"ic participation in or

!nowledge o" the the"t o" the intensi"ying screens remain

uncertain. #hus, whether or not Arlene and Joseph had actual

custody over company property, we agree with the 4A that

the petitioners had "ailed to establish by substantial evidence

the charges which led to Arlene and Joseph9s dismissal "rom

service.

5hile we empathiunctional, Inc./F that the employer$s

case succeeds or "ails on the strength o" its evidence and not

on the wea!ness o" that adduced by the employee, in !eeping

with the principle that the scales o" )ustice should be tilted in

"avor o" the latter in case o" doubt in the evidence presented

by them.

8owever, Blue +!y committed no impropriety in imposing

preventive suspension against Arlene and Joseph pending

investigation o" the the"t allegedly committed against the

company. Preventive suspension may be legally imposed on

an employee whose alleged violation is the sub)ect o" aninvestigation. #he purpose o" the suspension is to prevent an

employee "rom causing harm or in)ury to his colleagues and to

the employer. #he ma(imum period o" suspension is /0 days,

beyond which the employee should either be reinstated or be

paid wages and bene"its due to him.

In Arlene and Joseph9s case, Blue +!y issued to them notices

to e(plain on >ebruary /, 00F. #hey submitted their written

e(planation the day a"ter and they were dismissed "rom

service on >ebruary F, 00F. #here is no impropriety in Blue

+!y$s act o" imposing preventive suspension upon the

respondents since the period did not e(ceed the ma(imum

imposed by law and there was a valid purpose "or the same.

INTERNATIONAL MANAGEMENT SERVICES !. LOGARTA

FACTS: 3ecruitment agency, International &anagement

+ervices @I&+, deployed 3oel P. ogarta to wor! "or Petrocon

Arabia imited @Petrocon +audi Arabia, in connection with

general engineering services o" Petrocon "or the +audi Arabian

6il 4ompany @+audi Aramco. ogarta was employed "or a

period o" two @ years, commencing on 6ctober , ?-, with

a monthly salary o" eight hundred *+ Dollars @*+K00.00.

6n April , ?, +audi Aramco noti"ied Petrocon that due to

changes in the general engineering services wor! "orecast "or

?, the manhours that were "ormerly allotted to Petrocon

is going to be reduced by 0L which constrained Petrocon to

reduce its personnel.

#hus, on June ?, ?, Petrocon gave ogarta a written notice

in"orming the latter that due to the lac! o" pro)ect wor!s

related to his e(pertise, he is given a /0day notice o"

termination, and that his last day o" wor! with Petrocon will be

on July ?, ?Be"ore his departure "rom +audi Arabia,

respondent received his "inal paychec! "rom Petroconamounting +3-,.F-, without paying the separation "ee o"

ogarta.

*pon his return, ogarta "iled a complaint with the 234

against I&+ "or illegal dismissal as the recruitment agency

which employed him "or employment abroad.

#he A rendered )udgment in "avor o" the ogarta and ordered

I&+ to pay wages "or the une(pired portion o" his contract o"

employment. #he 234 on appeal a""irmed the A$s decision

but reduced the award. #he 4A li!ewise dismissed the petition

and a""irmed the 234 decision.

CONTENTION OF PETITIONER: #he dismissal o" ogarta

through retrenchment was valid.

ISSUE: 5hether or not respondent$s dismissal through

retrenchment is illegal.

RULING: 2o. 3etrenchment is the reduction o" wor!

personnel usually due to poor "inancial returns, aimed to cut

down costs "or operation particularly on salaries and wages. It

is one o" the economic grounds to dismiss employees and is

resorted by an employer primarily to avoid or minimiilipino wor!er. In the present case, although

respondent was duly noti"ied o" his termination by P

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