legal trends and updates on supreme court...

Handouts for PACU HRD Cebu Seminar Jan2014 Updates for Schools: Supreme Court cases on Management Prerogatives and Termination of Employment Atty. Ada D. Abad

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LEGAL TRENDS AND UPDATES ON SUPREME COURT CASES AFFECTING PRIVATE HIGHER EDUCATION:

MANAGEMENT PREROGATIVES, AND TERMINATION OF EMPLOYMENT

.ATTY. ADA D. ABAD

Managing Partner, Abad Abad & Associates Law Offices Former Vice-Dean, Lyceum College of Law

A. INTRODUCTION: BASIC ASSUMPTIONS IN LABOR RELATIONS LAW

1. Labor relations law has, for the most part, a HUMAN ELEMENT which is its basic element. It presupposes a relationship between the capitalist management and its workers.

1.1. Managements interest:

The employer is allowed to control the variables in business operations, to enhance the chances of making a profit otherwise termed as the elbow room in the quest for profits.1 The Supreme Court, in a multitude of cases, has thus held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, layoff of workers and discipline, dismissal, and recall of workers. 2

1.2. Labors interest:

While labor recognizes the right of management to its profits, it contends that since management cannot earn profit without labors efforts, they should likewise share in the profits.

2. The law recognizes the INHERENT INEQUALITY of the status between

management and worker. 3. Because of this inherent inequality, the State, in the exercise of its police power

and in consonance with the concept of social justice, INTERVENES in the relationship between management and labor by: (a) the promulgation of laws relative to labor standards and labor relations; and (b) balancing the conflicting yet interrelated and closely intertwined interests of both management and labor.3

How to balance conflicting interests between management and labor?

3.1 Burden of proof is always upon employer to show validity of its exercise

of management prerogatives, especially as regards termination of employment.

3.2 There must exist substantial evidence to prove valid exercise of

management prerogatives, viz., just or authorized cause of termination. Proof beyond reasonable doubt not required in administrative cases.

1 Chu vs. NLRC, 232 SCRA 764

2 Manila Jockey Club Employees Labor Union-PGTWO vs. Manila Jockey Club, G.R. No.

1667760, 07 March 2007; See also: Rural Bank of Cantilan vs. Julve, G.R. No. 169750, 27 February 2007). 3 Cebu Institute of Technology vs. Ople, 156 SCRA 620 (1987). Ponente: J. Irene Cortes.


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Note: Failure of employer to submit documents which are presumed to be in its possession, inspite of an Order to do so, implies that the presentation of said documents is prejudicial to its case. (De Guzman vs. NLRC, 540 SCRA 210 [Dec. 2007]).

3.3 Interpretation in favor of labor. Article 1702 of the New Civil Code

provides that, in case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living of the laborer. Any doubt or ambiguity in the contract between management and the uion members should be resolved in favor or the latter. Therefore, there is no doubt, in this case, that the welfare of the laborers stand supreme. (BPI vs. BPI Employees Union Metro Manila, G.R. No. 175678 [22 August 2012].

3.4 Paradigm shift towards mutual cooperation - It is high time that employer and employee cease to view each other as adversaries and instead recognize that there is a symbiotic relationship, wherein they must rely on each other to ensure the success of the business. (Toyota Motor Phils. Workers vs. NLRC, 537 SCRA 171)

3.5 But management prerogatives are likewise to be equally protected

when circumstances show the validity of the exercise. .

Mansion Printing Center vs. Bitara, Jr., G.R. No. 168120, 25 January 2012 citing Associate Justice Ma. Alicia Austria-Martinez in Philippine Long Distance and Telephone Company, Inc. v. Balbastro, GR No. 157202, 28 March

2007: While it is true that compassion and human consideration should guide the disposition of cases involving termination of employment since it affects one's source or means of livelihood, it should not be overlooked that the benefits accorded to labor do not include compelling an employer to retain the services of an employee who has been shown to be a gross liability to the employer. The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer. It should be made clear that when the law tilts the scale of justice in favor of labor, it is but a recognition of the inherent economic inequality between labor and management. The intent is to balance the scale of justice; to put the two parties on relatively equal positions. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. Justitia nemini neganda est (Justice is to be denied to none).

MANAGEMENT VS. LABOR Capital Work

Profit

Equitable share in the profits

Management prerogatives - hiring, employee classification, working methods, regulations

Workers rights - minimum standards - constitutional rights security of tenure, unionize and to collective bargaining, strike

STATE Police power/social justice Interpretation in favor of labor


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B. MANAGEMENT PREROGATIVES:

1. GENERAL PRINCIPLE: Management is free to regulate, according to its discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers, and discipline, dismissal and recall of workers. Julies Bakeshop vs. Arnaiz, 666 SCRA 1010 [2012]; see also: Reyes-Rayal vs. Philippine Luen Thai Holdings, 676 SCRA 183 [2012].

2. ELEMENTS: Valid exercise of management prerogatives

The free will of the management to conduct its own affairs to achieve its purpose cannot be denied, PROVIDED THAT THE SAME IS EXERCISED:

IN GOOD FAITH (BONA-FIDE IN CHARACTER), FOR THE ADVANCEMENT OF THE EMPLOYERS INTEREST;

AND NOT TO CIRCUMVENT THE RIGHTS OF THE EMPLOYEES.

(Capitol Medical Center vs. Meriz; San Miguel Brewery and Union Carbide cases).

3. NEW CASES ON MANAGEMENT PREROGATIVES

3.1 QUESTION: IS THE MANAGEMENTS DECISION TAKE OUT THE

CHAIRS OF EMPLOYEES IN AN ASSEMBLY LINE IN EXCHANGE FOR ADDITIONAL PERIODS OF REST/BREAKS, A VALID EXERCISE OF MANAGEMENT PREROGATIVES, OR IS IT A DIMINUTION OF BENEFIT WHICH CANNOT BE WITHDRAWN WITHOUT EMPLOYEES CONSENT? Royal Plant Workers Union vs. Coca-Cola Bottlers Phils., G.R. 198783, 15 April 2013.

Unions position: The use of chairs by the operators had been a company practice for 34 years, and cannot be withdrawn without consent of affected employees. Having chairs are favourable to the assembly line operators who get tired and exhausted; the frequency of the break period is not advantageous to the operators because it cannot compensate for the time they are made to stand throughout their working time. Management position: The directive to take out the chairs is in line with the I Operate, I Maintain, I Clean program of petitioner for bottling operators, wherein every bottling operator is given the responsibility to keep the machinery and equipment assigned to him clean and safe, and reinforces the task of bottling operators to constantly move about in the performance of their duties and responsibilities. The removal of the chairs was implemented so that the bottling operators will avoid sleeping, thus, prevent injuries to their persons. Answer: For Management. Valid exercise of management prerogatives. The decision to remove the chairs was done with good intentions as CCBPI wanted to avoid instances of operators sleeping on the job while in the performance of their duties and responsibilities and because of the fact that the chairs were not necessary considering that the operators constantly move about while working. In short, the removal of the chairs was designed to increase work efficiency. Hence, CCBPIs exercise of its management prerogative was made in good faith without doing any harm to the workers rights. The rights of the Union under any labor law were not violated. There is no law that requires employers to provide chairs for bottling operators. The CA


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correctly ruled that the Labor Code, specifically Article 132 thereof, only requires employers to provide seats for women. No similar requirement is mandated for men or male workers. It must be stressed that all concerned bottling operators in this case are men.

The Union should not complain too much about standing and moving about for one and one-half (1 ) hours because studies show that sitting in workplaces for a long time is hazardous to ones health. The report of VicHealth, Australia,12 disclosed that prolonged workplace sitting is an emerging public health and occupational health issue with serious implications for the health of our working population. Importantly, prolonged sitting is a risk factor for poor health and early death, even among those who meet, or exceed, national activity guidelines.

3.2 QUESTION: MAY MANAGEMENT VALIDLY IMPOSE A PROHIBITION

AGAINST ELECTIVE OFFICE?

Ymbong vs. ABS-CBN, G.R. 184885, 07 March 2012, J. Villarama -- In the instant case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded. ABS-CBN strongly believes that it is to the best interest of the company to continuously remain apolitical. While it encourages and supports its employees to have greater political awareness and for them to exercise their right to suffrage, the company, however, prefers to remain politically independent and unattached to any political individual or entity.

3.3 MAY MANAGEMENT SEARCH OFFICE COMPUTER TO CHECK ON

MISCONDUCT? VS. NON-INFRINGEMENT OF RIGHT TO PRIVACY.

Briccio Ricky A. Pollo vs. Chairperson Karina Constantino-David, et al., G.R. No. 181881. 18 October 2011, VILLARAMA. -- This case involves a search of office computer assigned to a government employee who was charged administratively and eventually dismissed from the service. The employees personal files stored in the computer were used by the government employer as evidence of misconduct. Question: May the search conducted on employees office computer and copying of personal files without his knowledge and consent, be considered an infringement of the employees constitution right to privacy? Answer: No, it is not an infringement of the right to privacy.. Petitioner failed to prove that he had an actual (subjective) expectation of privacy either in his office or government-issued computer which contained his personal files. Petitioner did not allege that he had a separate enclosed office which he did not share with anyone, or that his office was always locked and not open to other employees or visitors. Neither did he allege that he used passwords or adopted any means to prevent other employees from accessing his computer files. On the contrary, he submits that being in the public assistance office of the CSC, he normally would have visitors in his office. Even assuming that petitioner had at least a subjective expectation of privacy in his computer as he claims, the same is negated by the presence of policy regulating the use ofoffice computers. The CSC had implemented a policy that puts its employees on notice that they have no expectation of privacy in anything they create, store, send or receive on the office computers. Under this policy, the CSC may monitor the use of the


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computer resources usingboth automated or human means. This implies that on-the-spot inspections may be done toensure that computer resources were used only for legitimate business purposes. Question: May the search on the employees computer be considered as reasonable? Answer: Yes. The search of petitioners computer files was conducted in connection with an investigation of work-related misconduct prompted by an anonymous letter-complaint addressed to Commissioner David regarding anomalies in the CSC-ROIV where the head of the Mamamayan Muna Hindi Mamaya Na division is supposedly lawyering for individuals with pending cases in the CSC. A search by a government employer of an employees office is justified at inception when there are reasonable grounds for suspecting that it will turn up evidence that the employee is guilty of work-related misconduct. Under the facts obtaining, the search conducted on petitioners computer was justified at its inception and scope.

C. BASIC PRINCIPLES IN DISCIPLINARY CASES 1. Code of Conduct vs. security of tenure

Balancing of interests in disciplinary cases

1.1 Labors interests

A workers right to labor is recognized by the Constitution as a property right. As such, an employee cannot be deprived of his work without just cause or due process. 1.2 Managements interests

On the other hand, the employer is allowed, in the exercise of its management prerogatives, to promulgate rules and regulations, and to enforce/implement them for the efficient operations of the business. Moreover, the law also recognizes the right of the employer to expect from its workers not only good performance, adequate work and diligence, but also good conduct and loyalty. 1.3 Balancing of interests: Thus, in the context of implementing the rules and regulations for the conduct of human relationships and work performance within the business, certain parameters will have to be observed:

a) Burden of proof is upon the employer to show just cause for the imposition of a penalty upon the employee. Hence, there must exist substantial evidence to prove just or authorized cause of termination. Proof beyond reasonable doubt not required in administrative cases.

Note: Failure of employer to submit documents which are presumed to be in its possession, inspite of an Order to do so, implies that the presentation of said documents is prejudicial to its case. (De Guzman vs. NLRC, 540 SCRA 210 [Dec. 2007]).

b) In the imposition of penalty, whether suspension or termination, the

same must be commensurate to the offense committed. (Sagales v. Rustans Commercial Corporation (G.R. No. 166554, November 27, 2008)


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c) Thus: for valid termination, there must both be JUST CAUSE AND

DUE PROCESS. (exception: Wenphil/Serrano/Agabon ruling, see Section 4 hereunder)

MANAGEMENT VS. LABOR

Management prerogatives Security of tenure

Right to discipline employee in accordance with rules and regulations

Right to continuous employment until termination for just or authorized cause

STATE

Police power/social justice Interpretation in favor of labor

2. GROUNDS FOR TERMINATION

2.1 TERMINATION OF EMPLOYEES ON PROBATIONARY STATUS, GUIDING PRINCIPLES:

2.1.1 Grounds for termination of a probationary employee:

a) just causes under Article 282 of the Labor Code b) authorized causes under Article 283 of the Labor Code c) failure to qualify as a regular employee in accordance with

standards made known to them at the time of hiring, under Article 281 of the Labor Code. (Aliling vs. Feliciano, G.R. No. G.R. No. 185829, 25 April 2012; See also: Carvajal vs. Luzon Development Bank, G.R. No. 186169, 01 August 2012)

2.1.2 Burden of proof upon employer to show that the employee failed

to qualify as a regular employee in accordance with reasonable standards made known to him at the time of engagement. If

employer failed to specify the reasonable standards, or that the standards were made known to the probationar employee at the start of employment, then the employee is deemed to have been hired from DAY ONE as a regular employee. DUE PROCESS dictates that an employee be apprised beforehand of the conditions of his employment and of the advancement therein. (Hacienda Primera Devlpt Corp vs. Villegas, G.R. No. 186243, 11 April 2011).

2.1.3 BUT while the probationary employee is required to be appraised of the

standards against which his performance shall be assessed, there is however no need to inform the probationary employee that he has to follow company rules and regulations such requirement strains credulity. (Philippine Daily Inquirer vs. Magtibay, 528 SCRA 355 [2007]).

Punctuality is a reasonable standard imposed on every employee, whether in government or private sector. As a matter of fact, habitual tardiness is a serious offense that may very well constitute gross or habitual neglect of duty, a just cause to dismiss a regular employee. Assuming that petitioner was not apprised of the standards concomitant to her job, it is but common sense that she must abide by the work hours imposed by the bank. As we have aptly stated xxx, the rule on reasonable standards made known to the employee prior to engagement should not be used to exculpate a probationary


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employee who acts in a manner contrary to basic knowledge and common sense, in regard to which there is no need to spell out a policy or standard to be met. (Carvajal vs. Luzon Development Bank, G.R. No. 186169, 01 August 2012)

2.1.4 QUESTION: ARE THE ACADEMIC REQUIREMENTS IN THE

MANUAL OF REGULATIONS FOR PRIVATE SCHOOLS DEEMED INCORPORATED INTO ANY PROBATIONARY FACULTY EMPLOYMENT CONTRACT? Jocelyn Herrera-Manaois vs. St. Scholasticas College, G.R. No.

188914, 11 December 2013.

The mere completion of the three-year probation, even with an above-average performance, does not guarantee that the employee will automatically acquire a permanent employment status. Upon conclusion of the probation period, the college or university, being the employer, has the sole prerogative to make a decision on whether or not to re-hire the probationer. The probationer cannot automatically assert the acquisition of security of tenure and force the employer to renew the employment contract. In the case at bar, Manaois failed to comply with the stated academic qualifications required for the position of a permanent full-time faculty member, for her failure to COMPLETE her masters degree prior to the lapse of her probationary period. Notwithstanding the existence of the SSC Faculty Manual, Manaois still cannot legally acquire a permanent status of employment. Private educational institutions must still supplementarily refer to the prevailing standards, qualifications, and conditions set by the appropriate government agencies (presently the Department of Education, the Commission on Higher Education, and the Technical Education and Skills Development Authority). Thus, pursuant to the 1992 Manual, private educational institutions in the tertiary level may extend full-time faculty status only to those who possess, inter alia, a masters degree in the field of study that will be taught.This minimum requirement is neither subject to the prerogative of the school nor to the agreement between the parties. For all intents and purposes, this qualification must be deemed impliedly written in the employment contracts between private educational institutions and prospective faculty members.

The issue of whether probationers were informed of this academic requirement before they were engaged as probationary employees is

thus no longer material, as those who are seeking to be educators are presumed to know these mandated qualifications. Thus, all those who fail to meet the criteria under the 1992 Manual cannot legally attain the status of permanent full-time faculty members, even if they have completed three years of

satisfactory service. 2.1.5 QUESTION: MAY COLLEGE VALIDLY REFUSE TO GRANT

PERMANENT TENURE TO PROBATIONARY FACULTY WHO, DESPITE ON EXTENDED PROBATIONARY PERIOD, FAIL TO COMPLY WITH MASTERAL DEGREE REQUIREMENT? University of the East, Dean Eleanor Javier et. al vs. Analiza Pepanio and Mariti D. Bueno, G.R. No. 193891, 23 January 2013

ANSWER: YES. The requirement of a masteral degree for tertiary education teachers is not unreasonable. The operation of educational

http://vs.st/


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institutions involves public interest. The government has a right to ensure that only qualified persons, in the posession of sufficient academic knowledge and teaching skills, are allowed to teach in such institutions. Government regulation in this field of human activity is desirable for protecting, not only the students but also the general public from ill-prepared teachers who are lacking in the required scientific or technical knowledge. They may be required to take an examination or to possess post-graduate degrees as prerequisite to employment. Respondents were each given only semester-to-semester appointments from the beginning of their employment with UE precisely because they lacked the required master's degree. Here, UE gave respondents Bueno and Pepanio more than ample opportunities to acquire the postgraduate degree required of them. But they did not take advantage of such opportunities. Justice, fairness, and due process demand that an employer should not be penalized for situations where it had little or no participation or control.

2.1.6 NEW RULINGS ON PROBATIONARY EMPLOYMENT ON FIXED-

TERM CONTRACT; EXPIRATION OF CONTRACT NO LONGER VALID GROUND FOR TERMINATION OF PROBATIONARY EMPLOYEE.

AS APPLIED TO TERTIARY EDUCATION: Yolanda Mercado, et al. vs. AMA Computer College Paraaque City, Inc. 618 SCRA 218 [2010].) In a petition for review, the Supreme Court stated that nothing is illegitimate in defining the school-teacher on fixed term basis. The school, however, cannot forget that its system of fixed-term contract is a system that operates during the probationary period and for this reason is subject to the terms of Article 281 of the Labor Code. Unless this reconciliation is made, the requirements of this Article on probationary status would be fully negated as the school may freely choose not to renew contracts simply because their terms have expired. Given the clear constitutional and statutory intents, the Supreme Court concluded that in a situation where the probationary status overlaps with a fixed-term contract not specifically used for the fixed term it offers, Article 281 should assume primacy and the fixed-period character of the contract must give way. NOTE: To highlight what the Supreme Court meant by a fixed-term contract specifically used for the fixed term it offers, a replacement teacher, for example, may be contracted for a period of one year to temporarily take the place of a permanent teacher on a one-year study leave. The expiration of the replacement teachers contracted term, under the circumstances, leads to no probationary status implications as she was never employed on probationary basis; her employment is for a specific purpose with particular focus on the term and with every intent to end her teaching relationship with the school upon expiration of this term. While the Supreme Court can grant that the standards were duly communicated to the teachers and could be applied beginning the 1st trimester of the school year 2000-2001, glaring and very basic gaps in the schools evidence still exist. The exact terms of the standards


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were never introduced as evidence; neither does the evidence show how these standards were applied to the teachers. Without these pieces of evidence the Supreme Court had nothing to consider and pass upon as valid or invalid for each of the teachers. Inevitably, the non-renewal (or effectively, the termination of employment of employees on probationary status) lacks the supporting finding of just cause that the law requires and, hence, is illegal. (Mercado, et al. vs. AMA Computer College Paraaque City, Inc. 618 SCRA 218 [2010]. Emphasis supplied.)

AS APPLIED TO BASIC EDUCATION SCHOOLS: (Colegio del

Santissimo Rosario vs. Rojo, G.R. No. 170388, 03 September 2013.)

Situation: High School teacher on probationary status with fixed term contracts who was able to to complete three consecutive years of service but no longer rehired on the ground that with the expiration of their contract to teach, the employment contract would no longer be renewed.

The fixed-term character of employment essentially refers to the period agreed upon between the employer and the employee; employment exists only for the duration of the term and ends on its own when the term expires. In a sense, employment on probationary status also refers to a period because of the technical meaning "probation" carries in Philippine labor law a maximum period of six months, or in the academe, a period of three years for those engaged in teaching jobs. Their similarity ends there, however, because of the overriding meaning that being "on probation" connotes, i.e., a process of testing and observing the character or abilities of a person who is new to a role or job.

Understood in the above sense, the essentially protective character of probationary status for management can readily be appreciated. But this same protective character gives rise to the countervailing but equally protective rule that the probationary period can only last for a specific maximum period and under reasonable, well-laid and properly communicated standards. Otherwise stated, within the period of the probation, any employer move based on the probationary standards and affecting the continuity of the employment must strictly conform to the probationary rules.

However, for teachers on probationary employment, in which case a fixed term contract is not specifically used for the fixed term it offers, it is incumbent upon the school to have not only set reasonable standards to be followed by said teachers in determining qualification for regular employment, the same must have also been communicated to the teachers at the start of the probationary period, or at the very least, at the start of the period when they were to be applied. These terms, in addition to those expressly provided by the Labor Code, would serve as the just cause for the termination of the probationary contract. The specific details of this finding of just cause must be communicated to the affected teachers as a matter of due process.42 Corollarily, should the teachers not have been apprised of such reasonable standards at the time specified above, they shall be deemed regular employees.

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2.2 JUST CAUSES FOR TERMINATION (Art. 282, LC)

2.2.1 SERIOUS MISCONDUCT

a) QUESTION: CAN A FACULTY EMPLOYEE BE TERMINATED FOR FAILURE TO DISCLOSE EMPLOYMENT WITH OTHER SCHOOLS?

Dator vs. UST Rev. Tamerlane Lana, and Rev. Rodel Aligan, 31 Aug. 2006 -- Upon discovery of employment with the Ombudsman, UST converted Dators full time faculty status into one of part-time. Dator filed a case, alleging that deloading is in bad faith and in contravention of his security of tenure rights and of CBA provisions. Supreme Court ruled in favor of the School. Faculty Code explicity states that all faculty members must submit each semester a statement of number of teaching hours per week to be rendered in other institutions and/or daily hours of work outside the university. The rationale is unmistakably to maintain USTs quality of education and to ensure that government service is not jeopardized. Hence, there is factual basis for deloading. CONTRA: Moreno vs. San Sebastian College-Recoletos, Manila, 550 SCRA 415 [28 March 2008] -- Faculty admitted having failed to secure prior permission before teaching in other schools, in violation of Faculty Manual. Defense: need to augment income due to financial difficulty. Records show that she was a 1st time offender; and there was voluntary admission of guilt. However, Faculty Manual penalty is dismissal. Question: May she be validly terminated on this account? Supreme Court ruled in favour of the professor. This misconduct FALLS BELOW the required level of gravity that would warrant dismissal as a penalty. Moreover, willful disobedience of employers lawful order as a just cause for termination must comply with the element that the willfulness is characterized by a wrongful and perverse attitude. The School failed to prove that the faculty member indeed harbored perverse or corrupt motivations in violating the aforesaid school policy.

b) THEFT OF COMPANY PROPERTY VS. PERSONAL PROPERTY OF CO-EMPLOYEE.

General rule: If company property, valid termination on the ground of serious misconduct. Caltex (Phils.), Inc vs. Agad, G.R. No. 162017, 23 April 2010; Theft of Company Property (scrap metal). Even if considered as scrap materials, the LPG cylinders still had monetary value which Agad cannot appropriate for himself without Caltexs consent. Considering these findings, it is clear that Agad committed a serious infraction amounting to theft of company property. This act is akin to a serious misconduct or willful disobedience by the employee of the lawful orders of his employer in connection with his work, a just cause for termination of employment recognized under Article 282(a) of the Labor Code. Exception: If not company property but personal property of co-

employee, Supreme Court has made divergent rulings. b.1) Villamor Golf Club vs. Pehid, G.R. No. 166152, 04 October 2005. -- Malversation of a Paluwagan or voluntary contribution to a common fund by the employees which was not known by the employer, is not


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serious misconduct. If ever there was misappropriation or loss of the said mutual fund, the respondent will not and cannot be in any way tend or cause to prejudice the club. Such mutual fund is a separate transaction among the employees and is not in any way connected with the employees work.

b.2) Cosmos Bottling Vs. Wilson Fermin, G.R. 193676 and Wilson Fermin Vs. Cosmos Bottling, GR 194303, 20 June 2012 -- Theft committed against a co-employee is considered as a case analogous to serious misconduct, for which the penalty of dismissal from service may be meted out to the erring employee It must be noted that in the case at bar, all the lower tribunals were in agreement that Fermins act of taking Bragas cellphone amounted to theft. Factual findings made by administrative agencies, if established by substantial evidence as borne out by the records, are final and binding on this Court, whose jurisdiction is limited to reviewing questions of law.[25] The only disputed issue left for resolution is whether the imposition of the penalty of dismissal was appropriate. We rule in the affirmative.

2.2.2 GROSS INSUBORDINATION a) QUESTION: MAY AN EMPLOYEE REFUSE TO COMPLY WITH

THE TRANSFER ORDER BY RAISING SAID TRANSFER ORDER AS A GRIEVANCE? Manila Pavillion vs. Henry Delada, GR 189947, 25 January 2012

Supreme Court: NO!!! In this instance, Head Waiter of Fine Dining restaurant ordered to transfer to Coffee Shop due to hotel reorganization. The refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an employer. Employees may object to, negotiate and seek redress against employers for rules or orders that they regard as unjust or illegal. However, until and unless these rules or orders are declared illegal or improper by competent authority, the employees ignore or disobey them at their peril. In fact, Delada cannot hide under the legal cloak of the grievance machinery of the CBA or the voluntary arbitration proceedings to disobey a valid order of transfer from the management of the hotel. While it is true that Deladas transfer to Seasons is the subject of the grievance machinery in accordance with the provisions of their CBA, Delada is expected to comply first with the said lawful directive while awaiting the results of the decision in the grievance proceedings.

2.2.3 GROSS AND HABITUAL NEGLECT OF DUTIES a) QUESTION: MAY A COMPANY VALIDLY TERMINATE AN

EMPLOYEE UNDER A PROVISION IN THE EMPLOYEE HANDBOOK WHICH STATES COMMITTING OFFENSES PENALIZED WITH THREE SUSPENSIONS WITHIN A TWELVE-MONTH PERIOD?

Yes, under the case of Samahan Ng Manggagawa Sa Hyatt-NUHWRAIN Vs. Magsalin, GR No. 164939, 06 June 2011, VILLARAMA where a union officer found guilty of several infractions during negotiations stand-off. The company terminated the union

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officer on the basis of a specific provision in their employees handbook, which provided that an employee may be terminated for the commission of offenses meriting three suspensions within a twelve-month period. The Supreme Court ruled that a series of irregularities, when put together, may constitute serious misconduct and hence, a just cause for termination. (See also: Mapili vs. Phil Rabbit Bus Lines, 27 July )

b) Inefficiency of employee; condonation by employer; Bebina G.

Salvaloza vs. National Labor Relations Commission, Gulf Pacific Security Agency, Inc., and Angel Quizon, G.R. No. 182086,

November 24, 2010. -- While it is acknowledged that petitioner Gregorios service record shows that his performance as a security guard was below par, respondent Gulf Pacific never issued any memo citing him for the alleged repeated errors, inefficiency, and poor performance while on duty, and instead continued to assign him to various posts. This amounts to condonation by Gulf Pacific of whatever infractions Gregorio may have committed. Even assuming the reasons for relieving Gregorio of his position were true, it was incumbent upon Gulf Pacific to be vigilant in its compliance with labor laws.

2.2.4 FRAUD OR WILLFUL BREACH OF TRUST a) QUESTION: MAY LENGTH OF SERVICE BE USED TO MITIGATE

PENALTY OF DISMISSAL FOR A FIRST TIME-OFFENDER OF AN INFRACTION INVOLVING LOSS OF TRUST AND CONFIDENCE?

Answer: NO. The general rule is that an employee terminated for just causes is not entitled to separation pay except on grounds of equity and social justice. Where the dismissal is based on willful breach by the employee of the trust reposed in him by the employer, the supervisory employee Moya is outside the protective mantle of the principle of social justice as his act of concealing the truth from the company4 is a clear disloyalty to the company which has long employed him. The defense of the infraction being his first offense, and that he had no willful intention to conceal the truth or cover up the mistake of his employee, is unavailing. His length of service should be taken against him. Length of service is not a bargaining chip that can simply be stacked against the employer. If an employer has treated his employee well, has accorded him fairness and adequate compensation as determined by law, it is only fair to expect a long-time employee to return such fairness with at least some respect and honesty. Moya vs. First Solid Rubber, G.R. No. 184011, 18 September 2013

b) QUESTION: MAY AN EMPLOYEE BE DISMISSED FOR FRAUD IF

THE COMPANY DID NOT SUFFER FROM IT?

Answer: YES. In the case of Panuncillo vs. CAP, G.R. No. 161305, 09 February 2007 (Carpio-Morales), the employee caused the double sale of her own childs CAP educational plan to different customers. Employee argued that she cannot be terminated for loss of trust and confidence, because CAP was not itself defrauded or been damaged by her actuations relative to the multiple sale of her childs educational plan to customers. The Supreme Court ruled that

4 Failure to report five tires damaged as a result of undercuring brought about by negligence of

another employee.

http://www.google.com/url?q=http%3A%2F%2Fsc.judiciary.gov.ph%2Fjurisprudence%2F2010%2Fnovember2010%2F182086.htm&sa=D&sntz=1&usg=AFQjCNGctpbzK_dWFQM5LPnYPGYASFBuYghttp://www.google.com/url?q=http%3A%2F%2Fsc.judiciary.gov.ph%2Fjurisprudence%2F2010%2Fnovember2010%2F182086.htm&sa=D&sntz=1&usg=AFQjCNGctpbzK_dWFQM5LPnYPGYASFBuYg


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she may still be terminated for loss of trust and confidence, because deliberate disregard or disobedience of rules by the employees cannot be countenanced. The lack of resulting damage was unimportant. xxx. Damage aggravates the charge but its absence does not mitigate nor negate the employees liability."

c) QUESTION: MAY AN EMPLOYEE BE DISMISSED FOR FRAUD

AND/OR DISHONESTY, EVEN IF HE DID NOT PERSONALLY BENEFIT FROM IT?

Answer: YES. Pecuniary gain is not a necessary element for terminations due to loss of trust and confidence. In the case of Dela Cruz V. Coca-Cola Bottlers (31 July 2009), an employee was involved in a motor vehicle accident while driving Coca-Cola vehicle without authorization. He was hospitalized in San Fernando, La Union, where he was observed to have been under the influence of alcohol. This was evidenced by a medical certificate and police report secured by Coca-cola. Two friends of the employee (one was a supervisor) secured a police report and medical certificate omitting any reference to employee being drunk, for which they were charged with DISHONESTY. After due process, they were dismissed and they thereafter questioned the termination on the ground that: (a) they did not occupy positions of trust and confidence; and (b) they did not benefit from the fraud. The Supreme Court ruled that the supervisor and friend were VALIDLY TERMINATED. By obtaining an altered police report and medical certificate, petitioners deliberately attempted to cover up the fact that Sales was under the influence of liquor at the time of accident. In so doing, they committed acts inimical to company interest work-related wilful breach of trust and confidence.

See also: Unilever vs. Ma. Ruby Rivera, G.R. No. 201701, 03 June 2013, where Unilevers internal auditor conducted a random audit and found out that there were fictitious billings and fabricated receipts supposedly from Ventureslink amounting to P11,200,000.00. It was also discovered that some funds were diverted from the original intended projects. Upon further verification, Ventureslink reported that the fund deviations were upon the instruction of Rivera. The employee admitted the fund diversion but explained that such actions were mere resourceful utilization of budget because of the difficulty of procuring funds from the head office.

Supreme Court decision: In this case, Rivera was dismissed from work because she intentionally circumvented a strict company policy, manipulated another entity to carry out her instructions without the companys knowledge and approval, and directed the diversion of funds, which she even admitted doing under the guise of shortening the laborious process of securing funds for promotional activities from the head office. These transgressions were serious offenses that warranted her dismissal from employment and proved that her termination from work was for a just cause. Hence, she is not entitled to a separation pay.


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3. PROCEDURE FOR TERMINATION:

General Rule: The twin requirements of NOTICE and HEARING are the essential elements of due process in termination cases, which cannot be dispensed with without violating the constitutional right to due process King of Kings Transport vs. Mamac, 526 SCRA116 (29 Jun 2007). -- In order to intelligently prepare the employees for their explanation and defenses, the notice should contain a detailed narration of the facts & circumstances that will serve as the basis for the charge against the employee a general description of the change will not suffice.

4. ON NOTICE AND HEARING Dept. Order No. 10, Article V; IRR B5 R14 S1-11

4.1 Two notices required:

1st notice: Notice of appraisal, which is a written notice served on the employee specifying the ground or grounds of termination, and giving the employee reasonable opportunity within which to explain his side

The first notice should contain a detailed narration of facts and circumstances that will serve as basis for the charge against the employee. A general description of the charge will not suffice. The notice should specifically mention which company rules, if any, are violated. (King of Kings Transport vs. Mamac, 526 SCRA 116 [29 June 2007]), and that the employer seeks dismissal for the act or omission charged against the employee; otherwise; the notice does not comply with the rules. (Magro Placement vs. Hernandez, 526 SCRA 408 [04 July 2007])

NEW CASES MODIFYING THE KING OF KINGS AND MAGRO 2007 CASES: QUESTION: HOW SPECIFIC SHOULD THE SHOW CAUSE/CHARGE SHEET (PLEASE EXPLAIN MEMO) BE? Answer: It should be specific enough to allow the employee to be informed of the charges against her. Hence, in the case of Unilever vs. Ma. Ruby Rivera (ibid., G.R. 201701, 03 June 2013) where the Supreme Court found that there were valid grounds to terminate her from employment, the Court still awarded nominal damages to the employee for failure of the employer Unilever to comply with the procedural requirements of due process. Thus:

In this case, Unilever was not direct and specific in its first notice to Rivera. The words it used were couched in general terms and were in noway informative of the charges against her that may result in her dismissal from employment. Evidently, there was a violation of her right to statutory due


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process warranting the payment of indemnity in the form of nominal damages.

QUESTION: IS THE EMPLOYER REQUIRED TO INFORM THE EMPLOYEE IN THE APPRAISAL/CHARGE SHEET THAT HE MAY BE TERMINATED FOR THE INFRACTION? ANSWER: NO. Contrary to Esguerras allegation, the law does not require that an intention to terminate ones employment should be included in the first notice. It is enough that employees are properly apprised of the charges brought against them so they can

properly prepare their defenses; it is only during the second notice that the intention to terminate ones employment should be explicitly stated. Dolores T. Esguerra vs. Valle Verde Country Club et. al., G.R. No. 173012, 13 June 2012

On Reasonable opportunity: This means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of FIVE (5) CALENDAR DAYS from receipt of notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. (King of Kings Transport, ibid.)

2nd notice: Notice of termination, which is a written notice of termination served upon the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

4.2 The NEW doctrine of due process in termination cases; HEARING OR CONFERENCE NOT NECESSARY. (Perez vs. Philippine Telegraph and Telephone Company, 584 SCRA 110 [2009], En Banc.;

Petitioners in this case contended that due process was not observed in the absence of a hearing in which they could have explained their side and refuted the evidence against them. The Supreme Court ruled that there is no need for a hearing or conference, and noted:

xxx a marked difference in the standards of due process to be followed as prescribed in the Labor Code and its implementing rules. The Labor Code, on one hand, provides that an employer must provide the employee ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires. The Omnibus Rules implementing the Labor Code, on the other hand, require a hearing and conference during which the employee concerned is given the opportunity to respond to the charge, present his evidence or rebut the evidence presented against him. Which one should be followed? Is a hearing (or conference) mandatory in cases involving the dismissal of an employee? Can the apparent conflict between the law and its IRR be reconciled? At the outset, it must be stated that the time-honored doctrine


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is that, in case of conflict, the law prevails over the administrative regulations implementing it. The authority to promulgate implementing rules proceeds from the law itself. To be valid, a rule or regulation must conform to and be consistent with the provisions of the enabling statute. As such, it cannot amend the law either by abridging or expanding its scope. (Perez vs. Philippine Telegraph and Telephone Company, 584 SCRA 110 [2009], En Banc.)

See also: Esguerra vs. Valle Verde Country Club, 672 SCRA 177 [2012]). -- The existence of a formal trial-type hearing, ALTHOUGH PREFERRED, is NOT absolutely ecessary to satisfy an employees right to be heard.

4.3 QUESTION: IS THE RIGHT TO COUNSEL ON THE PART OF THE

EMPLOYEE, MANDATORY AND INDISPENSABLE AS PART OF DUE PROCESS?

ANSWER: NO. In the case of Lopez vs. Alturas Group, 11 April 2011, the Supreme Court ruled that the right to counsel and the assistance of one in investigations involving termination cases is neither indispensable nor mandatory, except when the employee himself requests for one or that he manifests that he wants a formal hearing on the charges against him.

Legal Updates on Management Prerogatives And Termination of Employment for Schools As of 28 January 2014

Ada D. Abad 0917-526-9732 [email protected]; [email protected]
mailto:[email protected]

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