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NEW PUERTO COMMERCIAL AND RICHARD LIM, Petitioners,


vs.
RODEL LOPEZ AND FELIX GAVAN, Respondents.
D E C I S I O N
DEL CASTILLO, J .:
In order to validly dismiss an employee, he must be accorded both substantive
and procedural due process by the employer. Procedural due process requires
that the employee be given a notice of the charge against him, an ample
opportunity to be heard, and a notice of termination. Even if the aforesaid
procedure is conducted after the filing of the illegal dismissal case, the legality of
the dismissal, as to its procedural aspect, will be upheld provided that the
employer is able to show that compliance with these requirements was not a
mere afterthought.
This Petition for Review on Certiorari seeks to reverse and set aside the Court of
Appeals (CAs) June 2, 2005 Decision
1
in CA-G.R. SP. No. 83577, which
affirmed with modification the October 28, 2003 Decision
2
of the National Labor
Relations Commission (NLRC) in NCR CA No. 034421-03, and the September
23, 2005 Resolution
3
denying petitioners motion for partial reconsideration.
Factual Antecedents
Petitioner New Puerto Commercial hired respondent Felix Gavan (Gavan) as a
delivery panel driver on February 1, 1999 and respondent Rodel Lopez (Lopez)
as roving salesman on October 12, 1999. Petitioner Richard Lim is the
operations manager of New Puerto Commercial.
Under a rolling store scheme, petitioners assigned respondents to sell goods
stocked in a van on cash or credit to the sari-sari stores of far-flung barangays
and municipalities outside Puerto Princesa City, Palawan. Respondents were
duty-bound to collect the accounts receivables and remit the same upon their
return to petitioners store on a weekly basis.
On November 3, 2000, respondents filed a Complaint
4
for illegal dismissal and
non-payment of monetary benefits against petitioners with the Regional Office of
the Department of Labor and Employment in Puerto Princesa City. On November
20, 2000, a conciliation conference was held but the parties failed to reach an
amicable settlement. As a result, the complaint was endorsed for compulsory
arbitration at the Regional Arbitration Branch of the NLRC on February 13, 2001.
Previously or on November 28, 2000, petitioners sent respondents notices to
explain why they should not be dismissed for gross misconduct based on (1) the
alleged misappropriation of their sales collections, and (2) their absence without
leave for more than a month. The notice also required respondents to appear
before petitioners lawyer on December 2, 2000 to give their side with regard to
the foregoing charges. Respondents refused to attend said hearing.
On December 6, 2000, petitioners filed a complaint for three counts of estafa
before the prosecutors office against respondents in connection with the alleged
misappropriation of sales collections.
Thereafter, petitioners sent another set of notices to respondents on December
7, 2000 to attend a hearing on December 15, 2000 but respondents again
refused to attend. On December 18, 2000, petitioners served notices of
termination on respondents on the grounds of gross misconduct and absence
without leave for more than one month.
On February 5, 2001, an information for the crime of estafa was filed by the city
prosecutor against respondents with the Municipal Trial Court in Puerto Princesa
City.
In due time, the parties submitted their respective position papers.
Labor Arbiters Ruling
On August 29, 2002, Labor Arbiter Cresencio G. Ramos, Jr. rendered a
Decision
5
dismissing the complaint for illegal dismissal but ordering petitioners to
pay respondents proportionate 13th month pay:
WHEREFORE, in the light of the foregoing premises, the above case for illegal
dismissal is hereby DISMISSED for being devoid of legal merit. Respondents,
however, are directed to pay herein complainants their proportionate 13th month
pay for the year 2002
6
[sic] as follows:
(1.) Rodel Lopez - P2,998.67
(2.) Felix Gavan - P2,998.67
SO ORDERED.
7

The Labor Arbiter ruled that there is substantial evidence tending to establish that
respondents committed the misappropriation of their sales collections from the
rolling store business. These acts constituted serious misconduct and formed
sufficient bases for loss of confidence which are just causes for termination. The
records also showed that respondents were given opportunities to explain their
side. Both substantive and procedural due processes were complied with, hence,
the dismissal is valid. Petitioners, however, failed to prove that they paid the
proportionate amount of 13th month pay due to respondents at the time of their
dismissal. Thus, the Labor Arbiter ordered petitioners to pay respondents the
same.
National Labor Relations Commissions Ruling
On October 28, 2003, the NLRC rendered a Decision affirming the ruling of the
Labor Arbiter, viz:
WHEREFORE, the appeal is DENIED. The Decision of the Labor Arbiter dated
August 29, 2002 is AFFIRMED en toto.
SO ORDERED.
8

The NLRC agreed with the Labor Arbiter that respondents act of
misappropriating company funds constitutes gross misconduct resulting in loss of
confidence. It noted that respondents never denied that (1) they failed to
surrender their collections to petitioners, and (2) they stopped reporting for work
during the last week of October 2000. Further, respondents admitted
misappropriating the subject collections before the hearing officer of the Palawan
labor office during the
conciliation conference on November 20, 2000. The NLRC also observed that
the investigation on the misappropriation of company funds was not a mere
afterthought and complied with the twin-notice rule. Last, it ruled that damages
cannot be awarded in favor of respondents because their dismissal was for just
causes.
Court of Appeals Ruling
The CA, in its June 2, 2005 Decision, affirmed with modification the ruling of the
NLRC, viz:
WHEREFORE, in view of the foregoing, the Decision of the NLRC dated 29
August 2002
9
is hereby MODIFIED in that private respondents are ordered to pay
petitioners nominal damages of P30,000.00 each. The decision is affirmed in all
other respect.
SO ORDERED.
10

The appellate court held that it was bound by the factual findings of the NLRC
because a petition for certiorari is limited to issues of want or excess of
jurisdiction, or grave abuse of discretion. Thus, the failure of respondents to
report for work and their misappropriation of company funds have become
settled. These acts constitute grave misconduct which is a valid cause for
termination under Article 282 of the Labor Code.
While the dismissal was for just cause, the appellate court found, however, that
respondents were denied procedural due process. It held that the formal
investigation of respondents for misappropriation of company funds was a mere
afterthought because it was conducted after petitioners had notice of the
complaint filed before the labor office in Palawan. In consonance with the ruling
in Agabon v. National Labor Relations Commission,
11
respondents are entitled to
an award of
2

P30,000.00 each as nominal damages for failure of petitioners to comply with the
twin requirements of notice and hearing before dismissing the respondents.
From this decision, only petitioners appealed.
Issues
Petitioners raise the following issues for our resolution:
1. Whether x x x the Court of Appeals erred in construing that the
investigation held by petitioners is an afterthought; and
2. Whether x x x the Court of Appeals erred in awarding the sum of
P30,000.00 each to the respondents as nominal damages.
12

Petitioners Arguments
Petitioners contend that the investigation of respondents was not an afterthought.
They stress the following peculiar circumstances of this case: First, when the
labor complaint was filed on November 3, 2000, respondents had not yet been
dismissed by petitioners. Rather, it was respondents who were guilty of not
reporting for work; Lopez starting on October 23, 2000 and Gavan on October
28, 2000. Second, at this time also, petitioners were still in the process of
collecting evidence on the alleged misappropriation of company funds after they
received reports of respondents fraudulent acts. Considering the distance
between the towns serviced by respondents and Puerto Princesa City, it took a
couple of weeks for petitioners representative, Armel Bagasala (Bagasala), to
unearth the anomalies committed by respondents. Thus, it was only on
November 18, 2000 when Bagasala finished the investigation and submitted to
petitioners the evidence establishing that respondents indeed misappropriated
company funds. Naturally, this was the only time when they could begin the
formal investigation of respondents wherein they followed the twin-notice rule
and which led to the termination of respondents on December 18, 2000 for gross
misconduct and absence without leave for more than a month.
Petitioners lament that the filing of the labor complaint on November 3, 2000 was
purposely sought by respondents to pre-empt the results of the then ongoing
investigation after respondents got wind that petitioners were conducting said
investigation because respondents were reassigned to a different sales area
during the period of investigation.
Respondents Arguments
Respondents counter that their abandonment of employment was a concocted
story. No evidence was presented, like the daily time record, to establish this
claim. Further, the filing of the illegal dismissal complaint negates abandonment.
Assuming arguendo that respondents abandoned their work, no proof was
presented that petitioners served a notice of abandonment at respondents last
known addresses as required by Section 2, Rule XVI, Book V of the Omnibus
Rules Implementing the Labor Code. According to respondents, on November 3,
2000, petitioners verbally advised them to look for another job because the
company was allegedly suffering from heavy losses. For this reason, they sought
help from the Palawan labor office which recommended that they file a labor
complaint.
Respondents also contest the finding that they misappropriated company funds.
They claim that the evidence is insufficient to prove that they did not remit their
sales collections to petitioners. Neither were the minutes of the proceedings
before the labor officer presented to prove that they admitted misappropriating
the company funds. Respondents add that they did not hold a position of trust
and confidence. They claim that the criminal cases for estafa against
respondents were belatedly filed in order to further justify their dismissal from
employment and act as leverage relative to the subject labor case they filed
against petitioners.
Our Ruling
The petition is meritorious.
When the requirements of procedural due process are satisfied, the award of
nominal damages is improper.
At the outset, we note that respondents did not appeal from the decision of the
CA which found that, as to the issue of substantive due process, the dismissal
was valid because it was based on just causes (i.e., grave misconduct and loss
of trust and confidence) due to respondents misappropriation of their sales
collections. Thus, the only proper issue for our determination, as raised in the
instant petition, is whether respondents were denied procedural due process
justifying the award of nominal damages in accordance with the ruling in Agabon
v. National Labor Relations Commission.
13

In termination proceedings of employees, procedural due process consists of the
twin requirements of notice and hearing. The employer must furnish the
employee with two written notices before the termination of employment can be
effected: (1) the first apprises the employee of the particular acts or omissions for
which his dismissal is sought; and (2) the second informs the employee of the
employers decision to dismiss him. The requirement of a hearing is complied
with as long as there was an opportunity to be heard, and not necessarily that an
actual hearing was conducted.
14
As we explained in Perez v. Philippine
Telegraph and Telephone Company:
15
1avvphi1
An employees right to be heard in termination cases under Article 277 (b) as
implemented by Section 2 (d), Rule I of the Implementing Rules of Book VI of the
Labor Code should be interpreted in broad strokes. It is satisfied not only by a
formal face to face confrontation but by any meaningful opportunity to controvert
the charges against him and to submit evidence in support thereof.
A hearing means that a party should be given a chance to adduce his evidence
to support his side of the case and that the evidence should be taken into
account in the adjudication of the controversy. "To be heard" does not mean
verbal argumentation alone inasmuch as one may be heard just as effectively
through written explanations, submissions or pleadings. Therefore, while the
phrase "ample opportunity to be heard" [in Article 277 of the Labor Code] may in
fact include an actual hearing, it is not limited to a formal hearing only. In other
words, the existence of an actual, formal "trial-type" hearing, although preferred,
is not absolutely necessary to satisfy the employee's right to be heard.
16

In the instant case, the appellate court ruled that there are two conflicting
versions of the events and that, in a petition for certiorari under Rule 65 of the
Rules of Court, the courts are precluded from resolving factual issues.
Consequently, the factual findings of the Labor Arbiter, as affirmed by the NLRC,
that petitioners stopped reporting from work and misappropriated their sales
collection are binding on the courts. However, the CA found that respondents
were denied their right to procedural due process because the investigation held
by petitioners was an afterthought considering that it was called after they had
notice of the complaint filed before the labor office in Palawan.
17

Indeed, appellate courts accord the factual findings of the Labor Arbiter and the
NLRC not only respect but also finality when supported by substantial
evidence.
18
The Court does not substitute its own judgment for that of the tribunal
in determining where the weight of evidence lies or what evidence is credible. It
is not for the Court to re-examine conflicting evidence, re-evaluate the credibility
of the witnesses nor substitute the findings of fact of an administrative tribunal
which has gained expertise in its specialized field.
19

However, while we agree with the CA that the labor tribunals factual
determinations can no longer be disturbed for failure of respondents to show
grave abuse of discretion on the part of the Labor Arbiter and NLRC, as in fact
respondents effectively accepted these findings by their failure to appeal from the
decision of the CA, we find that the appellate court misapprehended the import of
these factual findings. For if it was duly established, as affirmed by the appellate
court itself, that respondents failed to report for work starting from October 22,
2000 for respondent Lopez and October 28, 2000 for respondent Gavan,
20
then
at the time of the filing of the complaint with the labor office on November 3,
2000, respondents were not yet dismissed from employment. Prior to this point in
time, there was, thus, no necessity to comply with the twin requirements of notice
and hearing.
The mere fact that the notices were sent to respondents after the filing of the
labor complaint does not, by itself, establish that the same was a mere
afterthought. The surrounding circumstances of this case adequately explain why
the requirements of procedural due process were satisfied only after the filing of
the labor complaint. Sometime in the third week of October 2000, petitioners
received information that respondents were not remitting their sales collections to
the company. Thereafter, petitioners initiated an investigation by sending one of
their trusted salesmen, Bagasala, in the route being serviced by respondents. To
prevent a possible cover up, respondents were temporarily reassigned to a new
route to service. Subsequently, respondents stopped reporting for work (i.e.,
starting from October 22, 2000 for respondent Lopez and October 28, 2000 for
respondent Gavan) after they got wind of the fact that they were being
investigated for misappropriation of their sales collection, and, on November 3,
2000, respondents filed the subject illegal dismissal case to pre-empt the
outcome of the ongoing investigation. On November 18, 2000, Bagasala returned
from his month-long investigation in the far-flung areas previously serviced by
respondents and reported that respondents indeed failed to remit P2,257.03 in
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sales collections. As a result, on November 28, 2000, termination proceedings
were commenced against respondents by sending notices to explain with a
notice of hearing scheduled on December 2, 2000. As narrated earlier,
respondents failed to give their side despite receipt of said notices. Petitioners
sent another set of notices to respondents on December 7, 2000 to attend a
hearing on December 15, 2000 but respondents again refused to attend. Thus,
on December 18, 2000, petitioners served notices of termination on respondents
for gross misconduct in misappropriating their sales collections and absence
without leave for more than a month.
As can be seen, under the peculiar circumstances of this case, it cannot be
concluded that the sending of the notices and setting of hearings were a mere
afterthought because petitioners were still awaiting the report from Bagasala
when respondents pre-empted the results of the ongoing investigation by filing
the subject labor complaint. For this reason, there was sufficient compliance with
the twin requirements of notice and hearing even if the notices were sent and the
hearing conducted after the filing of the labor complaint. Thus, the award of
nominal damages by the appellate court is improper.
WHEREFORE, the petition is GRANTED. The June 2, 2005 Decision and
September 23, 2005 Resolution in CA-G.R. SP. No. 83577 are REVERSED and
SET ASIDE. The October 28, 2003 Decision of the National Labor Relations
Commission in NCR CA No. 034421-03 is REINSTATED and AFFIRMED.
G.R. No. 186209 September 21, 2011
UNITED LABORATORIES, INC., Petitioner,
vs.
JAIME DOMINGO substituted by his spouse CARMENCITA PUNZALAN
DOMINGO, ANONUEVO REMIGIO, RODOLFO MARCELO, RAUL NORICO
AND EUGENIO OZARAGA, Respondents.
D E C I S I O N
PEREZ, J .:
We are confronted with a curious case of employees demanding the severance
of their employment, insisting on the redundancy of their work and thereafter,
when the demands went unheeded, crying constructive dismissal by the
employer.
Assailed in this petition for review on certiorari
1
is the Decision
2
of the Court of
Appeals (CA) in CA-G.R. SP No. 87502 which granted the petition for certiorari
3

filed by respondents Jaime Domingo, Anonuevo Remigio, Rodolfo Marcelo, Raul
Norico and Eugenio Ozaraga and reversed the National Labor Relations
Commissions (NLRCs) finding that there was no constructive dismissal in three
(3) consolidated cases respectively docketed as NLRC NCR CASE NO. 00-08-
06034-2002, NLRC NCR CASE NO. 00-10-08397-2002, and NLRC CASE NO.
00-10-08407-2002. The NLRC decision was an affirmance of the Labor Arbiters
dismissal of respondents complaints for constructive dismissal against petitioner
United Laboratories, Inc. (Unilab).
4

The dispute, which resulted in the unusual resort by the employees to the
principle of constructive dismissal, arose from the following facts:
Unilab is a prominent domestic corporation engaged in the manufacture, sale,
marketing and distribution of pharmaceutical products.
Respondents Jaime Domingo, Anonuevo Remigio, Rodolfo Marcelo, Raul Norico
and Eugenio Ozaraga were former employees of Unilab assigned to the
Distribution Accounting Department (DAD) servicing all the accounting
requirements of Unilabs sixteen (16) provincial depotsfourteen (14) distribution
centers and two (2) area officesspread nationwide.
Sometime in 2001, under a Physical Distribution Master Plan (PDMP), Unilab
consolidated its finished goods inventories and logistics activities (warehousing,
order processing and shipping) into one distribution center located in Metro
Manila. As a result, Unilab closed down its sixteen (16) provincial depots. The job
functions of the employees working thereat were declared redundant and their
positions were abolished. Unilab gave the redundant employees a separation
package of two and a half (2) months pay for every year of service.
In the succeeding year, on 7 January 2002, respondents wrote Unilab requesting
for their separation or retirement from service under a separation package similar
or equivalent to that of the redundant employees in the provincial depots.
Respondents referred to this separation package as the Bagong Sibol Program.
5

On 9 April 2002, respondents counsel, on their behalf, wrote Unilab reiterating
respondents previous request to be separated from service under Unilabs
purported Bagong Sibol Program. Particularly, respondents were keen on retiring
and receiving 2 months pay for every year of service, and all the other benefits
which Unilab had extended to the redundant employees in the provincial depots.
The message and sentiment were that "they should likewise be retired under the
same redundancy plan or retirement scheme [because] their positions are
similarly situated [to] the retired employees of [Unilabs] distribution centers
under the principle that things that are alike should be treated alike since they
also hold the position of distribution personnel."
6

In a letter dated 15 April 2002,
7
Unilab denied respondents claims, pointing out
that:
1. The PDMP is not a retirement program but a cost restructuring
measure which resulted in the redundancy of the job functions of the
employees working in the provincial depots;
2. Unilab has no Bagong Sibol Program, and "independent of the
PDMP, there is no redundancy program or other severance scheme
open [for] application by any employee;"
3. The only existing and official early retirement program of Unilab is
provided for in Article IV, Section 2, in relation to Article V, Section 2,
of the United Retirement Plan (URP);
4. "At the time of the PDMP implementation, [respondents] were not
assigned to the provincial depot centers performing provincial,
[decentralized], distribution functions;" and
5. "At present, [respondents] positions are not redundant, i.e.,
superfluous, or in excess of what is reasonably demanded by the
actual requirements of the business."
Quite relevantly, in the first half of 2002, Unilab implemented a Shared Services
Policy (SSP) which consolidated and centralized all accounting functions of the
UNILAB Group of Companies, its affiliates and subsidiaries, under the Finance
Division of Unilab. Essentially, accounting services and requirements of the
UNILAB Group of Companies, were merged into a single pool, and performed in
Unilabs main office. After the closure of the provincial depots, respondents were
transferred and re-assigned to the accounting work pool pursuant to the SSP.
Respondents, along with four (4) other co-employees, Rosemarie F. Cortez,
Exequiel B. Sioson, Wilfredo M. Tumalad, and William C. Obedencia, filed three
complaints for constructive dismissal, nonpayment/underpayment of separation
pay, damages and attorneys fees against Unilab, which were eventually
consolidated. As it turned out, the denial of their request for retirement covered
by a higher retirement package rankled on respondents.
Interestingly, while their cases were pending before the NLRC, and thereafter
while on petition for certiorari before the CA, Cortez and respondents Domingo
and Remigio remained working at UNILAB. In fact, the three remained employed
at UNILAB until their actual separation therefrom: they received monies as full
retirement benefits and as settlement of all their claims against Unilab.
On 14 July 2003, the Executive Labor Arbiter dismissed respondents complaints
for lack of merit:
WHEREFORE, judgment is hereby rendered dismissing the instant complaints
for utter lack of merit. [UNILAB], however, is directed to pay the Remaining
Complainants, namely: Rosemarie F. Cortez, Jaime A. Domingo, Anonuevo S.
Remigio and William Obedencia their separation pay equivalent to one and one-
half (1&1/2) months salary for every year of service.
8

Dissatisfied, respondents, along with Cortez, appealed to the NLRC. However,
on March 30, 2004, the NLRC denied the appeal and affirmed the Labor Arbiters
dismissal of the complaints.
Posthaste, respondents filed a petition for certiorari before the CA alleging grave
abuse of discretion in the decision of the NLRC. Meanwhile, after respondents
petition was submitted for resolution, Unilab, with respondents Remigio and
Cortez, separately, arrived at an amicable settlement. Remigio, in particular,
received the amount of Four Million Seventy Seven Thousand Eight Hundred
Ninety Seven Pesos and Eighty Seven Centavos (P4,077,897.87) from Unilab as
full settlement and payment of all his claims; he signed a Quitclaim
9
in favor of
Unilab.
4

Not surprisingly, Unilab received a Motion for Leave of Court to Withdraw as
Petitioner separately filed by Cortez and Remigio. The motions were similarly
worded and filed by the same counsel on Cortezs and Remigios behalf.
The reversal by the CA of the NLRC resulted in the ruling that respondents were
constructively dismissed. The CA disposed of the case, thus:
WHEREFORE, the PETITION FOR CERTIORARI is GRANTED.
The assailed RESOLUTIONS DATED MARCH 30, 2004 AND AUGUST 31, 2004
of [the] NATIONAL LABOR RELATIONS COMMISSION are NULLIFIED AND
SET ASIDE.
[Petitioner] UNITED LABORATORIES, INC. is ORDERED:
1. To cause the immediate reinstatement of [respondents] JAIME A.
DOMINGO, EUGENIO P. OZARAGA, RODOLFO R. MARCELO,
RAUL C. NORICO, and ANONUEVO S. REMIGIO to their former
positions or to substantially equivalent positions without loss of
seniority rights and other benefits;
2. If reinstatement is no longer possible, to pay JAIME A. DOMINGO,
EUGENIO P. OZARAGA, RODOLFO R. MARCELO, RAUL C.
NORICO and ANONUEVO S. REMIGIO their separation pay, the
amount of which shall be computed on the basis of the United
Laboratories, Inc. Computation of Separation Benefit;
3. To pay full backwages to JAIME A. DOMINGO, EUGENIO P.
OZARAGA, RODOLFO R. MARCELO, RAUL C. NORICO and
ANONUEVO S. REMIGIO, computed from the time of the abolition of
[Unilabs] Distribution Accounting Department up to the finality of this
Decision without qualification or deduction;
4. To pay 10% of the total award as attorneys fees.
Costs of suit to be paid the [petitioner] (sic).
10

Oddly, despite a motion to withdraw as petitioner signed by Remigios counsel,
the CA did not drop him as petitioner.
Unilab filed separate motions: a Motion for Reconsideration dated July 2, 2008
and a Motion for Inhibition dated July 7, 2008, both pointing out that Remigio
should have been dropped as petitioner in CA-G.R. SP No. 87502 given his
motion to withdraw as petitioner. Naturally, Unilab likewise alleged that the CA
decision is contrary to law and not supported by the evidence.
In a Resolution dated 28 January 2009, the CA promptly dismissed Unilabs
motions:
EXCEPT FOR THE FIRST GROUND, [PETITIONER] APPARENTLY
REITERATE[S] MATTERS ALREADY ADDRESSED AND PASSED UPON IN
THE DECISION DATED JUNDE 16, 2008. AS SUCH, WE REJECT THEM AND
REITERATE THE DECISION.
ANENT THE FIRST GROUND, WE HAVE NO RECORD OF THE SO-CALLED
MOTION FOR LEAVE TO WITHDRAW AS PETITIONER SUPPOSEDLY FILED
BY ANONUEVO S. REMIGIO. THE FIRST TIME WE ARE INFORMED OF THE
MOTION IS VIA THE MOTION FOR RECONSIDERATION. FOR ALL INTENTS
AND PURPOSES, THEREFORE, THE FIRST GROUND OF THE MOTION FOR
RECONSIDERATION IS UNWARRANTED AND SHOULD BE DENIED FOR
THAT REASON.
II
THE MOTION FOR INHIBITION, BEING APPARENTLY WITHOUT FACTUAL
AND LEGAL BASES AS NOW INDICATED, IS DENIED FOR LACK OF
MERIT.
11

Hence, this petition for review on certiorari positing the following issues:
I.
THE COURT OF APPEALS DEPARTED FROM THE USUAL COURSE OF
JUDICIAL PROCEEDINGS WHEN IT INCLUDED REMIGIO IN THE DECISION
EVEN IF HIS MOTION TO WITHDRAW AS A PARTY (WITH ABANDONMENT
OF CLAIMS AGAINST PETITIONER) AND HIS QUITCLAIM HAVE BEEN
PRESENTED BEFORE IT.
II.
THE COURT OF APPEALS REVERSAL OF THE DECISION OF BOTH THE
NLRC AND THE LABOR ARBITER ON THE MATTER OF RESPONDENTS
ALLEGED CONSTRUCTIVE DISMISSAL WAS ARBITRARY AND RUNS
COUNTER TO WELL-SETTLED JURISPRUDENCE.
III.
THE COURT OF APPEALS REVERSAL OF THE DECISION OF BOTH THE
NLRC AND THE LABOR ARBITER ON THE MATTER OF WHETHER
RESPONDENTS NORICO, MARCELO AND OZARAGA WERE FORCED TO
RESIGN WAS HIGHLY SPECULATIVE AND RUNS COUNTER TO WELL-
SETTLED JURISPRUDENCE.
IV.
THE COURT OF APPEALS DIRECTIVE FOR [UNILAB] TO PAY
RESPONDENTS SEPARATION PAY IN THE SAME WAY IT PAID ITS
REDUNDATED EMPLOYEES HAS UTTERLY NO LEGAL BASIS.
V.
THE COURT OF APPEALS RULING THAT RESPONDENTS ARE ENTITLED
TO BOTH SEPARATION PAY AND RETIREMENT PAY NOTWITHSTANDING
THE PROVISIONS OF [UNILIABS] RETIREMENT PLAN TO THE CONTRARY
IS A DIRECT VIOLATION OF WELL-SETTLED JURISPRUDENCE ON THE
MATTER. IRONICALLY, [UNILABS] RETIREMENT PLAN IS THE VERY SAME
PLAN WHICH THIS HONORABLE COURT EARLIER SUSTAINED AS VALID.
12

Respondents filed two Comments dated 20 May 2009
13
and June 8, 2009,
14

respectively, signed by two different counsels. In the expanded Comment dated
8 June 2009, one of respondents counsel, Romulo Macalintal, manifested that
Remigio has executed an Affidavit declaring under oath that he did execute a
quitclaim in favor of Unilab and no longer intends to pursue his case against it.
Albeit belatedly, Atty. Macalintal clarified that the Comment he has filed is only
for respondents Domingo, Marcelo, Norico and Ozaraga.
On 13 August 2009, a different counsel for respondents filed a Manifestation with
Motion to Substitute a Party
15
informing the Court of the death of respondent
Domingo and the substitution of Domingos wife, Carmencita Punzalan Domingo,
as respondent in this case.
Preliminarily, regarding the CAs refusal to drop Remigio as petitioner and its
categorical declaration of the inexistence of a Motion for Leave to Withdraw as
Petitioner filed by Remigios counsel, we have checked the records and found
that one of respondents counsels, Atty. Alexander Versoza, on behalf of
Remigio, indeed filed a Motion for Leave to Withdraw as Petitioner with the CA.
16

In fact, attached to the motion in question is a Quitclaim executed by Remigio in
favor of Unilab, which Remigio does not disavow. Thus, the CA was mistaken in
not dropping Remigio as petitioner contrary to his motion.
The disingenuousness of Remigios counsel is not lost on this Court. We note
that this peripheral issue could have been easily settled if respondents counsel,
Atty. Versoza, forthwith acknowledged the existence of this Motion for Leave to
Withdraw as Petitioner he had filed before the CA and had served on Unilab. We
likewise note that Atty. Macalintal who has been co-counsel from the time of the
filing of the complaints before the NLRC, only belatedly and reluctantly admitted
that Remigio has signed a Quitclaim in favor of Unilab. By that time, the issue
had reached us, unnecessarily.
Respondents counsels ought to be reacquainted with Canon 10 of the Code of
Professional Responsibility: A lawyer owes candor, fairness and good faith to
the Court. Specifically, Rule 10.01: A lawyer shall not do any falsehood, nor
consent to the doing of any in Court; nor shall he mislead, or allow the
Court to be misled by any artifice.
We will here review the factual conclusions of the CA which are contrary to those
of the administrative tribunal. The conflict in findings is a first signal that a further
5

review may be needed. This is so because, as we have long held in a number of
cases, factual findings of administrative or quasi-judicial bodies, which are
deemed to have acquired expertise in matters within their respective jurisdictions,
are generally accorded not only respect but even finality, and bind the Court
when supported by substantial evidence.
17
Such that, while our well-entrenched
holding is that this Court is not a trier of facts,
18
we can go to the rule exceptions
culled from jurisprudence on rule application, among such exception being that
the CA manifestly overlooked certain relevant facts not disputed by the parties,
which, if properly considered, would justify a different conclusion.
19

We so reach a conclusion in this case different from that of the appellate court.
Two facts relevant to the issues at hand were not given enough deserved
importance by the CA:
1. The Physical Distribution Master Plan (PDMP) of Unilab whereby it
consolidated the warehousing and distribution of the finished goods
of the sixteen (16) provincial centers into one distribution center in
Metro Manila; and
2. The Shared Services Policy (SSP) which centralized all accounting
services of Unilab into one pool at its main office.
These plan and policy had company wide application and effect. As earlier
pointed out, the PDMP resulted in the closure of sixteen (16) provincial depots
while the SSP consolidated under the Financial Division of Unilab all the
accounting services in the UNILAB group of companies, affiliates and
subsidiaries. Quite plainly, while the plan and policy resulted in the personnel
movement that included respondents, they were not conceptualized and
implemented by Unilab for the sole purpose of easing the respondents out of the
companys employ, or as the CA underscored, to decrease the "merit rating" of
respondents. The CA did not dispute the uniform findings of the Labor Arbiter
and the NLRC that the PDMP was a "cost restructuring strategy program" and
that the SSP was a "recognized management prerogative." Indeed, the
legitimacy of Unilabs plan and policy was not questioned by the respondents. It
was the implementation of the management projects that respondents
complained about. They wanted to avail of the separation package for employees
declared redundant because of the PDMP. They refused their transfer to the
centralized Financial Division as planned under the SSP. When they were not
included among those considered as redundant employees, they wanted their
transfer to the Financial Division declared as "constructive dismissal," and Unilab
pronounced liable for damages and attorneys fees, aside from non-payment of
separation pay.
The primary facts of respondents employment are enough to support the
submission of Unilab that the CA was wrong in reversing the NLRCs conclusion
that there was no "constructive dismissal." Respondents were accountants or
were performing accounting functions all assigned to the Distribution Accounting
Department (DAD) servicing the accounting requirements of distribution centers
such as Unilabs sixteen (16) provincial depots. The closing of the provincial
depots did not result in the abolition of respondents position as accountants.
While they had assignments pertaining to the provincial depots, they did not
perform goods distribution or warehousing functions. They were accountants and
their work as such was appropriately covered by the SSP that transferred all
accounting functions to the Finance Division of Unilab.
The concept of constructive dismissal is inapplicable to respondents.
Constructive dismissal is a derivative of dismissal without cause; an involuntary
resignation, nay, a dismissal in disguise.
20
It occurs when there is cessation of
work because continued employment is rendered impossible, unreasonable, or
unlikely as when there is a demotion in rank or diminution in pay or when a clear
discrimination, insensibility, or disdain by an employer becomes unbearable to
the employee leaving the latter with no other option but to quit.
21

In turn, dismissal without cause is prohibited because of the Constitutional
security of tenure of workers.
Thus, it is stated in Article XIII, Section 3 of the Constitution that:
xxx [Workers] shall be entitled to security of tenure, humane conditions of work,
and a living wage. xxx
The Labor Code describes as basic policy the workers security of tenure. Thus:
ART. 3. Declaration of basic policy The State shall afford protection to labor,
promote full employment, ensure equal work opportunities regardless of sex,
race or creed, and regulate the relations between worker and employers. The
State shall assure the rights of workers to self-organization, collective bargaining,
security of tenure, and humane conditions of work.
ART. 279. Security of Tenure. In cases of regular employment, the employer
shall not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
It should be remembered, however, that the entitlement of workers to security of
tenure is correlative to the right of enterprises to reasonable returns on
investments.
22
The rights are measured each in relation to the other.
In one section under the same title of Article XIII, the Constitution mandates that
"all workers shall be entitled to security of tenure" and commands at the same
time in the same way, that the State shall recognize the right of enterprises to
reasonable returns on investments, and to expansion and growth. Such that, in
this jurisdiction, we recognize that management has a wide latitude to regulate,
according to his own discretion and judgment, all aspects of employment,
including the freedom to transfer and reassign employees according to the
requirements of its business. The right of employees to security of tenure does
not give them vested rights to their positions to the extent of depriving
management of its prerogative to change their assignments or to transfer them.
23

Managerial prerogatives, on the other hand, are subject to limitations provided by
law, collective bargaining agreements, and general principles of fair play and
justice.
24

Simply put, security of tenure from which springs the concept of constructive
dismissal is not an absolute right. It cannot be pleaded to avoid the transfer or
assignment of employees according to the requirements of the employers
business. Such transfer or assignment becomes objectionable only when it is not
for "reasonable returns on investments," and for "expansion and growth" which
are constitutionally recognized employers rights, but is sought merely as a
convenient cover for oppression. No such thing transpired in the instant case. We
cite with favor the uniform ruling of the NLRC and the labor arbiter:
It is not disputed that Unilab instituted a cost restructuring strategy program
called the Physical Distribution Master Plan (PDMP) which resulted in the closure
of [Unilabs] provincial depots nationwide sometime in March 2002. As a
necessary consequence of the closure of [Unilabs] provincial depots, the
positions affected were became redundant and were declared to be so. Thus, the
personnel affected by the redundancy were separated from the service and paid
a generous separation pay, i.e., 2.5 months pay for every year of service.
It is likewise not disputed that complainants Cortez, [respondents] Domingo,
Marcelo, Norico, Ozaraga, and Remigio were all accountants and/or performing
accounting functions who, with the sole exception of complainant Cortez and
prior to the implementation of the PDMP, were all assigned to the Distribution
Division. Also not disputed is the fact that [Unilab] came up with its Shared
Services Policy where accounting services within the Unilab group of companies
were pooled and consolidated under [Unilabs] Finance Division.
According to [respondents] Domingo, Remigio, Norico, Marcelo and Ozaraga,
they were in effect constructively dismissed after the closure of [Unilabs]
provincial depots. They claim that the job or work subsequently assigned to them
were either menial or servile or they were never given new assignments at all.
This Office is not convinced.
Records will reveal that [respondents] Domingo, Remigio, Norico, Marcelo and
Ozaraga as accountants or employees performing accounting functions were
affected by the Shared Services Policy of the Company. Thus, after the provincial
depots were closed down, they were reassigned to [Unilabs] Finance Division to
service the accounting requirement of the Unilab group of companies. Thereafter,
[respondents] Norico, Marcelo and Ozaraga voluntarily resigned while
respondentns Domingo and Remigio remained with [Unilab].
This Office notes that [respondents] were transferred to the Finance Division on
account of the Shared Services Policy of [Unilab]. In San Miguel v. NLRC, it was
held that the abolition of departments or positions in the company is one of the
recognized management prerogatives. Likewise, in Castillo v. NLRC, the
Supreme Court reiterated the long standing rule that it is the prerogative of the
employer to transfer and reassign employees for valid reasons and according to
the requirements of its business. There is therefore nothing irregular or illegal in
the transfer of [respondents] to the Finance Division after [Unilab] came up with
its Shared Services Policy.
25

6

That the respondents were indeed not constructively dismissed is supported by
substantial evidence.
First. The CAs ruling easily unravels because three (3) of the complainants
before the NLRC, including herein respondents Domingo and Remigio, even
while their petition for certiorari was pending before the CA, remained employed
at UNILAB. In those instances, there was actually no dismissal to speak of.
Most recently, The University of the Immaculate Concepcion v. National Labor
Relations Commission
26
iterated that a crucial element in a finding of constructive
dismissal is a cessation of employment relations between the parties.
A claim of involuntary resignation or being left with no choice but to quit
presupposes an employee actually quitting or resigning. But not all respondents
quit: Domingo stayed on with Unilab until his retirement while Remigio, and even
complainant Cortez, although they eventually settled with Unilab, never resigned.
Plainly, respondents Domingo and Remigio, even Cortez, cannot claim that their
employment circumstances with Unilab were so unbearable and left them with no
other option but to quit.
Second. As regards respondents Marcelo, Norico and Ozaraga, the ruling of the
labor tribunals that the three voluntarily resigned and were not constructively
dismissed is again, and also, supported by substantial evidence.
To substantiate its finding that Noricos, Marcelos and Ozaragas resignations
were involuntary, the CA pointed out that Marcelo and Ozaraga had children who
were still studying, and, obviously had "great need for continued employment."
Moreover, the CA finds incredulous respondents reasons for resigning: Marcelo
to venture into business and Ozaraga to pay off his mounting debt. For the CA,
their resignations forego a steady income from continued employment and,
therefore, inconsistent with a voluntary resignation.
The reasoning of the CA is specious and pure conjecture.
It is not unheard of that employees who have opted for early retirement have
used the windfall therefrom to start their own business and to pay off their debts.
The trade off with having a "steady income" and "continued employment" is to be
their own boss or to turn over a new leaf, free from debt. We can likewise
surmise, as the CA has so easily done, that Ozaraga would have been buried
deeper in debt if he expected to pay it off with only his "steady income." In any
event, the CAs vaguely drawn theory as to the impetus for respondents
resignations can be easily debunked by similarly plausible reasons. It is indeed
apropos, to once more refer to the correlation between the workers right to
security of tenure and the right of enterprise to reasonable returns on investment.
The right of enterprise in the case at bar was exercised by Unilab through the
PDMP which resulted in the abolition of the provincial depots but did not erase
the respondents accounting functions that, in the same manner that the logistic
activities at the provinces were centralized in Metro Manila, were consolidated
under the Finance Division of Unilab under its SSP. Absent a showing that the
PDMP and the SSP were illegal or meant to defeat respondents security of
tenure, we cannot uphold their proposition that they must, like those in the
provincial distribution centers, also be considered redundant employees.
Respondents, who are accounting employees, cannot refuse their assignment to
the Finance Division. As we have delared on more than one occasion:
Certainly, the Court cannot accept the proposition that when an employee
opposes his employers decision to transfer him to another work place, there
being no bad faith or underhanded motives on the part of either party, it is the
employees wishes that should be made to prevail. On the basis of the
qualifications, training and performance of the employee, the prerogative to
determine the place or station where he or she is best qualified to serve the
interests of the company belongs to the employer.
27

As a final point, the allegations of respondents and the factual findings of both
the labor tribunals and the appellate court bring to the fore respondents obvious
position that they have the option to claim redundancy as reason for severing
their employment from Unilab.
From the start, respondents insisted that Unilab has unjustifiably refused to grant
them the same separation package granted to the redundant employees in the
provincial depots. Respondents demanded that this higher separation package
be applied for their retirement as they are "similarly situated" with the redundant
employees. Respondents wished for the cessation of their employment,
specifying, however, their availment of retirement benefits equivalent to the
separation package of the redundant employees. Effectively, respondents were
exercising their right to terminate their employment, invoking a hodgepodge of
provisions from the Unilab Retirement Plan, Unilabs purported Bagong Sibol
Program, and the Labor Code.
Respondents are laboring under a cloud of confusion. Retirement and
redundancy, while both resulting in the cessation of employment relations, are
two entirely different things. Significantly, the Labor Code divides Book 6 on Post
Employment into two titles: Title 1 on Termination of Employment and Title II on
Retirement from the Service. Specifically, Article 283 of the Labor Code lists
redundancy as an authorized cause for the employer to terminate an employee,
while Article 287 thereof provides for the retirement from the service of an
employee, thus:
ART. 283. Closure of establishment and reduction of personnel. The employer
may also terminate the employment of any employee due to the installation of
labor saving devices, redundancy, retrenchment to prevent losses or the closing
or cessation of the operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving
a written notice on the workers and the Department of Labor and Employment at
least one (1) month before the intended date thereof. In case of termination due
to the installation of labor saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one month
pay or to at least one month pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses or
financial reverses, the separation pay shall be equivalent to one (1) month pay or
to at least one-half (1/2) month pay for every year of service, whichever is higher.
A fraction of at least six (6) months shall be considered one (1) whole year.
ART. 287. Retirement. Any employee retirement may be retired upon reaching
the retirement age established in the collective bargaining agreement or other
applicable employment contract.
In case of retirement, the employees shall be entitled to receive such retirement
benefits as he may have earned under existing laws and any collective
bargaining, and other agreement: Provided, however, the employees retirement
benefits under any collective bargaining and other agreement shall not be less
than those provided herein.
In the absence of retirement plan or agreement providing for retirement benefits
of employee upon reaching the age of sixty (60) years or more, but not beyond
sixty-five (65) years which is hereby declared the compulsory retirement age,
who has served at least five (5) years in the said establishment, may retire and
shall be entitled to retirement pay equivalent to at least one-half (1/2) month
salary for every year of service , a fraction of at least six (6) months being
considered as one whole year.
Unless the parties provide for broader inclusions, the term one-half (1/2) month
salary shall mean fifteen (15) days plus one-twelfth of the 13th month pay and
the cash equivalent of not more than five (5) days of service incentive
leaves.1wphi1
xxx
xxx
Violation of this provision is hereby declared unlawful and subject to the penal
provisions under Article 288 of this Code.
Petitioner has an elaborate Retirement Plan that lists all possible benefits for
retiring and resigning employees, and, significantly to this case, a separate article
on involuntary separation due to redundancy.
28

The requirements for, and the benefits from, the several and different manners of
termination of employment are, naturally, also distinct and different. The
employees cannot mix and match rights and obligations which are set and settled
by law or agreement of the parties. This is particularly evident in this case where
respondents demanded either the redundancy of their services in the face of the
employees continuing need for such services, or the benefits from redundancy
upon their retirement or resignation. The demand cannot be honored.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals
in CA-G.R. SP No. 87502 is SET ASIDE. The Resolution of the National Labor
Relations Commission in NLRC NCR CASE NO. 00-08-06034-2002, NLRC NCR
CASE NO. 00-10-08397-2002, and NLRC CASE NO. 00-10-08407-2002 is
REINSTATED. No costs.
7

G.R. No. 186614 February 23, 2011
NATIONWIDE SECURITY AND ALLIED SERVICES, INC., Petitioner,
vs.
RONALD P. VALDERAMA, Respondent.
R E S O L U T I O N
NACHURA, J .:
Petitioner Nationwide Security and Allied Services, Inc. (petitioner) appeals by
certiorari under Rule 45 of the Rules of Court the December 9, 2008 Decision
1
of
the Court of Appeals (CA) in CA-G.R. SP No. 104966, and the February 24, 2009
Resolution
2
denying its reconsideration.
Respondent Ronald Valderama (Valderama) was hired by petitioner as security
guard on April 18, 2002. He was assigned at the Philippine Heart Center (PHC),
Quezon City, until his relief on January 30, 2006. Valderama was not given any
assignment thereafter. Thus, on August 2, 2006, he filed a complaint for
constructive dismissal and nonpayment of 13th month pay, with prayer for
damages against petitioner and Romeo Nolasco.
Petitioner presented a different version. It alleged that respondent was not
constructively or illegally dismissed, but had voluntarily resigned. Its version of
the facts was summarized by the National Labor Relations Commission (NLRC)
in this wise:
[Petitioner] x x x averred that [respondent] has committed serious violations of
the security rules in the workplace. On January 31, 2004, he was charged with
conduct unbecoming for which he was required to explain. Months after, he and
four (4) other co-security guards failed to attend a mandatory seminar. For this,
he was suspended for seven (7) days. On June 5, 2004, [respondent] displayed
his discourteous and rude attitude upon his superior. He said to him in a high
pitch of (sic) voice, "ano ba sir, personalan ba ito, sabihin mo lang kung ano
gusto mo." On June 8, 2004, [petitioner] required him to explain why no
disciplinary action should be meted against him.
Again, on January 22, 2005, seven security guards, including [respondent], were
made to explain their failure to report for duty without informing the office despite
the instruction during their formation day which was held a day before. On
January 31, 2006, Roy Datiles, Detachment Commander, reported that
[respondent] confronted and challenged him in a high pitch and on top of his
voice rudely showing discourtesy and rudeness. Being his superior, Datiles
recommended the relief of [respondent] in the detachment effective January 31,
2006. By order of the Operations Manager, he was relieved from his post at the
Philippine Heart Center. He was directed to report to the office. On February 10,
2006, he got his cash bond and firearm deposit. Despite his voluntary
resignation, [petitioner] sent him a letter through registered mail to report for the
office and give information on whether or not he was still interested for report for
duty or not. [Respondent] did not bother to reply. Neither did he report to the
office.
3

After due proceedings, the Labor Arbiter (LA) rendered a decision, viz.:
This office is of the view that [respondent] was constructively dismissed.
[Petitioners] defense that [respondent] voluntarily resigned on February 10, 2006
is unsubstantiated (Annex "G"). What appears on record is the pro-forma
resignation dated 04 October 2004 (Annex "D") long before this complaint was
filed. It is a basic rule in evidence that the burden of proof is on the part of the
party who makes the allegation. [Petitioner] failed to discharge the burden.
The general rule is that the filing of a complaint for illegal dismissal is inconsistent
with resignation. The Supreme Court in Shie Jie Corp. vs. National Federation of
Labor, G.R. No. 153148, July 15, 2005, held:
"By vigorously pursuing the litigation of his action against petitioner, private
respondent clearly manifested that he has no intention of relinquishing his
employment which is, wholly incompatible [with] petitioner[]s assertion, that he
voluntarily resigned."
In Great Southern Maritime Services Corp. vs. Acua, G.R. No. 140189, Feb. 28,
2005, it was ruled that the execution of the alleged "resignation letters cum
release and quitclaim" to support the employers claim that respondents
voluntarily resigned is unavailing as the filing of the complaint for illegal dismissal
is inconsistent with resignation.
Further it is significant to note that [respondent] was even required by [petitioner]
to undergo a "Re-Training Course" conducted from February 20, 2006 to March
1, 2006 (Annex "F"). It is not only absurd but unbelievable that [respondent] who
according to [petitioner] voluntarily resigned on February 10, 2006 and yet
participated in the said "Re-Training Course" after his alleged resignation.
In this case, [respondent] was not posted since he was relieved from his post on
January 30, 2006 until the filing of the instant complaint on August 2, 2006 or for
a period of more than six (6) months. In Valdez vs. NLRC, 286 SCRA 87, the
Supreme Court held that, "However, it must be emphasized that such temporary
activity should continue for six months. Otherwise, the security agency
concerned could be held liable for constructive dismissal.
This office is in accord with [respondents] argument that the letter sent to the
latter to report for work is an absurdity considering [petitioners] claim that
[respondent] voluntarily resigned. x x x.
4

The LA disposed thus:
WHEREFORE, the foregoing considered, judgment is hereby rendered declaring
[respondent] to have been constructively dismissed. [Petitioner is] ordered to
reinstate [respondent] to his former position without loss of seniority rights and
other benefits. Further, [petitioner] Nationwide Security & Allied Services, Inc. is
ordered to pay [respondent] the following monetary awards[:]
1. Backwages (see computation) 148, 125.00
2. Prop. 13th Month Pay
1/06 - 1/30/06 = 97 mo.
P450 x 30 x 1/12 x .97 1,091.25
TOTAL AWARD 149,216.25
x x x x
SO ORDERED.
5

On appeal, the NLRC modified the LA decision. It declared that respondent was
neither constructively terminated nor did he voluntarily resign. As such,
respondent remained an employee of petitioner. The NLRC thus ordered
respondent to immediately report to petitioner and assume his duty. It also
deleted the award of backwages and the order of reinstatement by the LA for
lack of basis.
6

The NLRC decreed that:
WHEREFORE, the foregoing considered, the instant appeal is PARTIALLY
GRANTED deleting the award of backwages and order of reinstatement.
[Respondent] is directed to report immediately and [petitioner is] ordered to
accept him. [Petitioner is] also ordered to pay his 13th month pay in the amount
of P1,091.25 as ordered in the Decision.
SO ORDERED.
7

Respondent filed a motion for reconsideration, but the NLRC denied it on June
11, 2008.
Respondent went to the CA via certiorari. On December 9, 2008, the CA
rendered a Decision
8
setting aside the resolutions of the NLRC and reinstating
that of the LA. In gist, the CA sustained respondents claim of constructive
dismissal. It pointed out that respondent remained on floating status for more
than six (6) months, and petitioner offered no credible explanation why it failed to
provide a new assignment to respondent after he was relieved from PHC. It
likewise rejected petitioners claim that respondent voluntarily resigned, holding
that no convincing evidence was offered to prove it. The CA found it odd that
respondent attended the re-training course conducted by petitioner from
February 20, 2006 to March 1, 2006, if respondent indeed resigned on February
10, 2006. The CA, therefore, ruled against the legality of respondents dismissal
and sustained the LAs award of backwages and order of reinstatement in favor
of respondent.
8

The CA decreed, thus:
WHEREFORE, premises considered, the Petition is GRANTED. The Resolutions
dated 27 March 2008 and 11 June 2008 of the National Labor Relations
Commission (Third Division) in NLRC NCR CASE NO. 00-08-06365-06; NLRC
CA NO. 051626-07 are REVERSED and SET ASIDE. The Decision dated 29
November 2006 of Labor Arbiter Enrique L. Flores, Jr. is hereby REINSTATED.
Costs against [petitioner].
SO ORDERED.
9

Petitioner filed a motion for reconsideration, but the CA denied it on February 24,
2009.
10

Hence, this appeal by petitioner faulting the CA for sustaining respondents claim
of constructive dismissal.
The appeal lacks merit.
In cases involving security guards, a relief and transfer order in itself does not
sever employment relationship between a security guard and his agency. An
employee has the right to security of tenure, but this does not give him a vested
right to his position as would deprive the company of its prerogative to change
his assignment or transfer him where his service, as security guard, will be most
beneficial to the client. Temporary "off-detail" or the period of time security
guards are made to wait until they are transferred or assigned to a new post or
client does not constitute constructive dismissal, so long as such status does not
continue beyond six months.
11

The onus of proving that there is no post available to which the security guard
can be assigned rests on the employer, viz.:
When a security guard is placed on a "floating status," he does not receive any
salary or financial benefit provided by law. Due to the grim economic
consequences to the employee, the employer should bear the burden of proving
that there are no posts available to which the employee temporarily out of work
can be assigned.
12

Respondent claims that he was relieved from PHC on January 30, 2006;
thereafter, he was not given a new assignment. Petitioner, on the other hand,
asserts that respondent refused to report to petitioner for his reassignment.
Otherwise stated, petitioner claims that respondent abandoned his job.
The jurisprudential rule on abandonment is constant. It is a matter of intention
and cannot lightly be presumed from certain equivocal acts. To constitute
abandonment, two elements must concur: (1) the failure to report for work or
absence without valid or justifiable reason; and (2) a clear intent, manifested
through overt acts, to sever the employer-employee relationship.
13

In this case, petitioner failed to establish clear evidence of respondents intention
to abandon his employment. Except for petitioners bare assertion that
respondent did not report to the office for reassignment, no proof was offered to
prove that respondent intended to sever the employer-employee relationship.
Besides, the fact that respondent filed the instant complaint negates any intention
on his part to forsake his work. It is a settled doctrine that the filing of a complaint
for illegal dismissal is inconsistent with the charge of abandonment, for an
employee who takes steps to protest his dismissal cannot by logic be said to
have abandoned his work.
14

Similarly, we cannot accept petitioners argument that respondent voluntarily
resigned.
Resignation is the voluntary act of an employee who is in a situation where one
believes that personal reasons cannot be sacrificed in favor of the
exigency of the service, and one has no other choice but to dissociate oneself
from employment. It is a formal pronouncement or relinquishment of an office,
with the intention of relinquishing the office accompanied by the act of
relinquishment. As the intent to relinquish must concur with the overt act of
relinquishment, the acts of the employee before and after the alleged resignation
must be considered in determining whether, he or she, in fact, intended to sever
his or her employment.
15

In Mobile Protective & Detective Agency v. Ompad
16
and Mora v. Avesco
Marketing Corporation,
17
we ruled that should the employer interpose the
defense of resignation, it is incumbent upon the employer to prove that the
employee voluntarily resigned. On this point, petitioner failed to discharge the
burden.
Petitioner was also firm in asserting that respondent voluntarily resigned. Oddly,
it failed to present the alleged resignation letter of respondent. We also note that,
in its March 24, 2006 letter,
18
petitioner required respondent to report at its office
for reassignment. It strains credulity that petitioner would require respondent to
report for reassignment if the latter already tendered his resignation effective
February 10, 2006.
Petitioner capitalizes on the withdrawal of the cash and firearm bonds by
respondent. It contends that the withdrawal of bonds sufficiently proved
respondents intention to terminate his employment contract with petitioner. In
support of its argument, petitioner cited Roberta Gaa v. Nationwide Security and
Allied Services, Inc. and Romeo Nolasco,
19
which declared that cash bond and
firearm bond are never withdrawable for as long as the security guard intends to
remain an employee of the security agency.
Petitioners reliance on Gaa is misplaced. We note that the declaration that cash
bond and firearm bond are never withdrawable for as long as the security guard
intends to remain an employee of the security agency was made by the NLRC.
20

Although this Court affirmed the NLRC in a Minute Resolution dated September
26, 2007,
21
still, the said NLRC ruling cannot be considered a binding precedent
that can be invoked by petitioner in its favor.
As explained by this Court in Philippine Health Care Providers, Inc. v.
Commissioner of Internal Revenue:
22

It is true that, although contained in a minute resolution, our dismissal of the
petition was a disposition of the merits of the case. When we dismissed the
petition, we effectively affirmed the CA ruling being questioned. As a result, our
ruling in that case has already become final. When a minute resolution denies or
dismisses a petition for failure to comply with formal and substantive
requirements, the challenged decision, together with its findings of fact and legal
conclusions, are deemed sustained. But what is its effect on other cases?
With respect to the same subject matter and the same issues concerning the
same parties, it constitutes res judicata. However, if other parties or another
subject matter (even with the same parties and issues) is involved, the minute
resolution is not binding precedent. Thus, in CIR v. Baier-Nickel, the Court noted
that a previous case, CIR v. Baier-Nickel involving the same parties and the
same issues, was previously disposed of by the Court thru a minute resolution
dated February 17, 2003 sustaining the ruling of the CA. Nonetheless, the Court
ruled that the previous case "ha(d) no bearing" on the latter case because the
two cases involved different subject matters as they were concerned with the
taxable income of different taxable years.
Besides, there are substantial, not simply formal, distinctions between a minute
resolution and a decision. The constitutional requirement under the first
paragraph of Section 14, Article VIII of the Constitution that the facts and the law
on which the judgment is based must be expressed clearly and distinctly applies
only to decisions, not to minute resolutions. A minute resolution is signed only by
the clerk of court by authority of the justices, unlike a decision. It does not require
the certification of the Chief Justice. Moreover, unlike decisions, minute
resolutions are not published in the Philippine Reports. Finally, the proviso of
Section 4(3) of Article VIII speaks of a decision. Indeed, as a rule, this Court lays
down doctrines or principles of law which constitute binding precedent in a
decision duly signed by the members of the Court and certified by the Chief
Justice.
Accordingly, since petitioner was not a party in G.R. No. 148680 and since
petitioner's liability for DST on its health care agreement was not the subject
matter of G.R. No. 148680, petitioner cannot successfully invoke the minute
resolution in that case (which is not even binding precedent) in its favor.
Furthermore, the filing of the complaint belies petitioners claim that respondent
voluntarily resigned.lavvphil As held by this Court in Valdez v. NLRC:
23

It would have been illogical for herein petitioner to resign and then file a
complaint for illegal dismissal. Resignation is inconsistent with the filing of the
said complaint.
Indubitably, respondent remained on "floating status" for more than six months.
He was relieved on January 30, 2006, and was not given a new assignment at
9

the time he filed the complaint on August 2, 2006. Jurisprudence is trite with
pronouncements that the temporary inactivity or "floating status" of security
guards should continue only for six months. Otherwise, the security agency
concerned could be liable for constructive dismissal.
24
The failure of petitioner to
give respondent a work assignment beyond the reasonable six-month period
makes it liable for constructive dismissal. The CA was correct in sustaining
respondents claim.
If there is a surplus of security guards caused by lack of clients or projects, the
security agency may resort to retrenchment upon compliance with the
requirements set forth in the Labor Code. In this way, the security agency will not
to be held liable for constructive dismissal and be burdened with the payment of
backwages.
Under Article 279
25
of the Labor Code, an employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and
other privileges; to his full backwages, inclusive of allowances; and to other
benefits or their monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual reinstatement.
26
Therefore, the
CA committed no reversible error in sustaining the LAs award of backwages and
ordering respondents reinstatement.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court
of Appeals in CA-G.R. SP No. 104966 are AFFIRMED.
G.R. No. 161596 February 20, 2013
ROBERTO BORDOMEO, JAYME SARMIENTO and GREGORIO BARREDO,
Petitioners,
vs.
COURT OF APPEALS, HON. SECRETARY OF LABOR, and
INTERNATIONAL PHARMACEUTICALS, INC., Respondents.
D E C I S I O N
BERSAMIN, J .:
As an extraordinary remedy, certiorari cannot replace or supplant an adequate
remedy in the ordinary course of law, like an appeal in due course. It is the
inadequacy of a remedy in the ordinary course of law that determines whether
certiorari can be a proper alternative remedy.
The Case
The petitioners implore the Court to reverse and set aside the Decision
1
of the
Court of Appeals (CA) promulgated on May 30, 2003 in C.A.-G.R. SP No. 65970
entitled Roberto Bordomeo, Anecito Cupta, Jaime Sarmiento and Virgilio
Saragena v. Honorable Secretary of Labor and Employment and International
Pharmaceuticals, Inc., dismissing their petition for certiorari by which they had
assailed the Order
2
issued on July 4, 2001 by Secretary Patricia A. Sto. Tomas of
the Department of Labor and Employment (DOLE), to wit:
WHEREFORE, the Order of this Office dated March 27, 1998 STANDS and
having become final and having been fully executed, completely CLOSED and
TERMINATED this case.
No further motion shall be entertained.
SO ORDERED.
3

and the CAs resolution promulgated on October 30, 2003, denying their motion
for reconsideration.
In effect, the Court is being called upon again to review the March 27, 1998 order
issued by the DOLE Secretary in response to the petitioners demand for the
execution in full of the final orders of the DOLE issued on December 26, 1990
and December 5, 1991 arising from the labor dispute in International
Pharmaceuticals, Inc. (IPI).
Antecedents
In 1989, the IPI Employees Union-Associated Labor Union (Union), representing
the workers, had a bargaining deadlock with the IPI management. This deadlock
resulted in the Union staging a strike and IPI ordering a lockout.
On December 26, 1990, after assuming jurisdiction over the dispute, DOLE
Secretary Ruben D. Torres rendered the following Decision,
4
to wit:
WHEREFORE, PREMISES CONSIDERED, decision is hereby rendered as
follows:
1. finding the IPI Employees Union-ALU as the exclusive bargaining
agent of all rank and file employees of ALU including sales personnel;
2. dismissing, for lack of merit, the charges of contempt filed by the
Union against the IPI officials and reiterating our strict directive for a
restoration of the status quo ante the strike as hereinbefore
discussed;
3. dismissing the Unions complaint against the Company for unfair
labor practice through refusal to bargain;
4. dismissing the IPI petition to declare the strike of the Union as
illegal; and
5. directing the IPI Employees Union-ALU and the International
Pharmaceuticals, Inc. to enter into their new CBA, incorporating
therein the dispositions hereinbefore stated. All other provisions in the
old CBA not otherwise touched upon in these proceedings are,
likewise, to be incorporated in the new CBA.
SO ORDERED.
5

Resolving the parties ensuing respective motions for reconsideration or
clarification,
6
Secretary Torres rendered on December 5, 1991 another ruling,
7

disposing thus:
WHEREFORE, in the light of the forgoing considerations, judgment is hereby
rendered:
1. Dismissing the motions for reconsideration filed by the International
Pharmaceutical, Inc. and the Workers Trade Alliance Unions (WATU)
for lack of merit;
2. Ordering the International Pharmaceutical Inc. to reinstate to their
former positions with full backwages reckoned from 8 December
1989 until actually reinstated without loss of seniority rights and other
benefits the "affected workers" herein-below listed:
1. Reynaldo C. Menor
2. Geronimo S. Banquirino
3. Rogelio Saberon
4. Estefanio G. Maderazo
5. Herbert G. Veloso
6. Rogelio G. Enricoso
7. Colito Virtudazo
8. Gilbert Encontro
9. Bebiano Pancho
10. Merlina Gomez
11. Lourdes Mergal
10

12. Anecito Cupta
13. Prescillano O. Naquines
14. Alejandro O. Rodriguez
15. Godofredo Delposo
16. Jovito Jayme
17. Emma L. Lana
18. Koannia M. Tangub
19. Violeta Pancho
20. Roberto Bordomeo
21. Mancera Vevincio
22. Caesar Sigfredo
23. Trazona Roldan
24. Carmelita Ygot
25. Gregorio Barredo
26. Dario Abella
27. Artemio Pepito
28. Anselmo Tareman
29. Merope Lozada
30. Agapito Mayorga
31. Narciso M. Leyson
32. Ananias Dinolan
33. Cristy L. Caybot
34. Johnnelito S. Corilla
35. Noli Silo
36. Danilo Palioto
37. Winnie dela Cruz
38. Edgar Montecillo
39. Pompio Senador
40. Ernesto Palomar
41. Reynante Germininano
42. Pelagio Arnaiz
43. Ireneo Russiana
44. Benjamin Gellangco, Jr.
45. Nestor Ouano (listed in paragraphs 1 & 9 of the IPI
Employees Union- ALUs Supplemental Memorandum
dated 6 March 1991)
3. Ordering the International Pharmaceutical Inc. to reinstate to their
former positions the following employees, namely:
a. Alexander Aboganda
b. Pacifico Pestano
c. Carlito Torregano
d. Clemencia Pestano
e. Elisea Cabatingan
(listed in paragraph 3 of the IPI Employees Union-ALUs Supplemental
Memorandum dated 6 March 1991).
No further motions of the same nature shall be entertained.
8

IPI assailed the issuances of Secretary Torres directly in this Court through a
petition for certiorari (G.R. No. 103330), but the Court dismissed its petition on
October 14, 1992 on the ground that no grave abuse of discretion had attended
the issuance of the assailed decisions.
9
Considering that IPI did not seek the
reconsideration of the dismissal of its petition, the entry of judgment issued in
due course on January 19, 1994.
10

With the finality of the December 26, 1990 and December 5, 1991 orders of the
DOLE Secretary, the Union, represented by the Seno, Mendoza and Associates
Law Office, moved in the National Conciliation and Mediation Board in DOLE,
Region VII on June 8, 1994 for their execution.
11

On November 21, 1994, one Atty. Audie C. Arnado, who had meanwhile entered
his appearance on October 4, 1994 as the counsel of 15 out of the 50 employees
named in the December 5, 1991 judgment of Secretary Torres, likewise filed a
so-called Urgent Motion for Execution.
12

After conducting conferences and requiring the parties to submit their position
papers, Regional Director Alan M. Macaraya of DOLE Region VII issued a Notice
of Computation/Execution on April 12, 1995,
13
the relevant portion of which
stated:
To speed-up the settlement of the issue, the undersigned on 7 February 1995
issued an order directing the parties to submit within ten (10) calendar days from
receipt of the Order, their respective Computations. To date, only the
computation from complainants including those that were not specifically
mentioned in the Supreme Court decision were submitted and received by this
office.
Upon verification of the Computation available at hand, management is hereby
directed to pay the employees including those that were not specifically
mentioned in the decision but are similarly situated, the aggregate amount of
FORTY-THREE MILLION SIX HUNDRED FIFTY THOUSAND NINE HUNDRED
FIVE AND 87/100 PESOS (P43,650,905.87) involving NINE HUNDRED SIXTY-
TWO (962) employees, in the manner shown in the attached Computation
forming part of this Order. This is without prejudice to the final Order of the Court
to reinstate those covered employees.1wphi1
This Order is to take effect immediately and failure to comply as instructed will
cause the issuance of a WRIT OF EXECUTION.
14

In effect, Regional Director Macaraya increased the number of the workers to be
benefitted to 962 employees classified into six groups and allocated to each
group a share in the P43,650,905.87 award,
15
as follows:
GROUP NO. OF
EMPLOYEES
TOTAL CLAIM
11

Those represented by Atty. Arnado 15 P4,162,361.50
Salesman 9 P6,241,535.44
For Union Members 179 P6,671,208.86
For Non-Union Members 33 P1,228,321.09
Employees who ratified the CBA 642 P23,982,340.14
Separated Employees 84 P1,365,136.84
TOTAL 962 P43,650,905.87
On May 24, 1995, Assistant Regional Director Jalilo dela Torre of DOLE Region
VII issued a writ of execution for the amount of P4,162,361.50 (which covered
monetary claims corresponding to the period from January 1, 1989 to March 15,
1995) in favor of the 15 employees represented by Atty. Arnado,
16
to be
distributed thusly:
17

1. Barredo, Gregorio P278,700.10
2. Bordomeo, Roberto P278,700.10
3. Cupta, Anecito P278,700.10
4. Delposo, Godofredo P278,700.10
5. Dinolan, Ananias P278,700.10
6. Jayme, Jovito P278,700.10
7. Lozada, Merope P278,700.10
8. Mayorga, Agapito P278,700.10
9. Mergal, Lourdes P278,700.10
10. Pancho, Bebiano P278,700.10
11. Pancho, Violeta P278,700.10
12. Rodriguez, Alejandro P278,700.10
13. Russiana, Ireneo P263,685.10
14. Tangub, Joannis P278,700.10
15. Trazona, Rolsan P275,575.10
TOTAL P4,162,361.50
On June 5, 1995, Assistant Regional Director dela Torre issued another Writ of
Execution for the amount of P1,200,378.92 in favor of the second group of
employees. Objecting to the reduced computation for them, however, the second
group of employees filed a Motion Declaring the Writ of Execution dated June 5,
1995 null and void.
On July 11, 1995, IPI challenged the May 24, 1995 writ of execution issued in
favor of the 15 employees by filing its Appeal and Prohibition with Prayer for
Temporary Restraining Order in the Office of then DOLE Undersecretary
Cresenciano Trajano.
18

On December 22, 1995,
19
Acting DOLE Secretary Jose Brillantes, acting on IPIs
appeal, recalled and quashed the May 24, 1995 writ of execution, and declared
and considered the case closed and terminated.
20

Aggrieved, the 15 employees sought the reconsideration of the December 22,
1995 Order of Acting DOLE Secretary Brillantes.
On August 27, 1996, DOLE Secretary Leonardo A. Quisumbing granted the
Motion for Reconsideration,
21
and reinstated the May 24, 1995 writ of execution,
subject to the deduction of the sum of P745,959.39 already paid pursuant to
quitclaims from the award of P4,162,361.50.
22
Secretary Quisumbing declared
the quitclaims executed by the employees on December 2, 3, and 17, 1993
without the assistance of the proper office of the DOLE unconscionable for
having been entered into under circumstances showing vitiation of consent; and
ruled that the execution of the quitclaims should not prevent the employees from
recovering their monetary claims under the final and executory decisions dated
December 26, 1990 and December 5, 1991, less the amounts received under the
quitclaims.
Aggrieved by the reinstatement of the May 24, 1995 writ of execution, IPI moved
for a reconsideration.
23

On September 3, 1996, and pending resolution of IPIs motion for
reconsideration, Regional Director Macaraya issued a writ of execution in favor of
the 15 employees represented by Atty. Arnado to recover P3,416,402.10
pursuant to the order dated August 27, 1996 of Secretary Quisumbing.
24

Thereafter, the sheriff garnished the amount of P3,416,402.10 out of the funds of
IPI with China Banking Corporation, which released the amount.
25
Hence, on
September 11, 1996, the 15 employees represented by Atty. Arnado executed a
Satisfaction of Judgment and Quitclaim/Release upon receipt of their respective
portions of the award, subject to the reservation of their right to claim "unsatisfied
amounts of separation pay as well as backwages reckoned from the date after 15
March 1995 and up to the present, or until separation pay is fully paid."
26

Notwithstanding the execution of the satisfaction of judgment and
quitclaim/release, Atty. Arnado still filed an omnibus motion not only in behalf of
the 15 employees but also in behalf of other employees named in the notice of
computation/execution, with the exception of the second group, seeking another
writ of execution to recover the further sum of P58,546,767.83.
27

Atty. Arnado filed a supplemental omnibus motion for the denial of IPIs Motion
for Reconsideration on the ground of mootness.
28

In the meanwhile, the employees belonging to the second group reiterated their
Motion Declaring the Writ of Execution dated June 5, 1995 null and void, and
filed on May 15, 1996 a Motion for Issuance of Writ, praying for another writ of
execution based on the computation by Regional Director Macaraya.
On December 24, 1997,
29
Secretary Quisumbing, affirming his August 27, 1996
order, denied IPIs Motion for Reconsideration for being rendered moot and
academic by the full satisfaction of the May 24, 1995 writ of execution. He also
denied Atty. Arnados omnibus motion for lack of merit; and dealt with the issue
involving the June 5, 1995 writ of execution issued in favor of the second group
of employees, which the Court eventually resolved in the decision promulgated in
G.R. No. 164633.
30

The employees represented by Atty. Arnado moved for the partial
reconsideration of the December 24, 1997 order of Secretary Quisumbing.
Resolving this motion on March 27, 1998, Acting DOLE Secretary Jose M.
Espaol, Jr. held as follow:
31

WHEREFORE, Our Order dated December 24, 1997, is hereby AFFIRMED.
The Motion for Reconsideration/Amend/Clarificatory and Reiteration of Motion for
Issuance of Writ of Execution dated January 12, 1998, filed by six (6) salesmen,
namely, Geronimo S. Banquirigo, Reynaldo C. Menor, Rogelio Enricoso, Danilo
Palioto, Herbert Veloso and Colito Virtudazo as well as the Motion for
Reconsideration and/or Clarification filed by Salesman Noli G. Silo, are hereby
DISMISSED, for lack of merit. The June 5, 1995 Writ of Execution is now
considered fully executed and satisfied.
The Motion for Partial Reconsideration filed by Roberto Bordomeo and 231
others, is likewise DENIED, for lack of merit
SO ORDERED.
32

Records reveal, however, that Virgilio Saragena, et al. brought to this Court a
petition for certiorari to assail the December 24, 1997 and March 27, 1998
Orders of the Secretary of Labor (G.R. No. 134118). As stated at the start, the
Court dismissed the petition of Saragena, et al. on September 9, 1998 for having
been filed out of time and for the petitioners failure to comply with the
requirements under Rule 13 and Rule 45 of the Rules of Court.
33
The entry of
judgment was issued on December 7, 1998.
12

In the meanwhile, on July 27, 1998, Atty. Arnado filed a Motion for Execution with
the DOLE Regional Office,
34
demanding the following amounts from IPI, to wit:
For Roberto Bordomeo and 14 others P4,990,401.00
The rest of complainants 33,824,820.41
Total P 38,815,221.41
Again, on September 22, 1998, Atty. Arnado filed a Motion for Execution with the
Regional Office.
35
This time, no monetary claims were demanded but the rest of
the complainants sought to collect from IPI the reduced amount of
P6,268,818.47.
Another Motion for Execution was filed by Atty. Arnado on July 6, 1999,
36
seeking
the execution of the December 26, 1990 order issued by Secretary Torres and of
the April 12, 1995 notice of computation/execution issued by Regional Director
Macaraya.
Ultimately, on July 4, 2001, DOLE Secretary Patricia Sto. Tomas issued her
Order
37
affirming the order issued on March 27, 1998, and declaring that the full
execution of the order of March 27, 1998 "completely CLOSED and
TERMINATED this case."
Only herein petitioners Roberto Bordomeo, Anecito Cupta, Jaime Sarmiento and
Virgilio Saragena assailed the July 4, 2001 order of Secretary Sto. Tomas by
petition for certiorari in the CA (C.A.-G.R. SP No. 65970).
38

On May 30, 2003, the CA rendered its decision in C.A.-G.R. SP No. 65970,
39
to
wit:
It is worthy to note that all the decisions and incidents concerning the case
between petitioners and private respondent IPI have long attained finality. The
records show that petitioners have already been granted a writ of execution. In
fact, the decision has been executed. Thus, there is nothing for this Court to
modify. The granting of the instant petition calls for the amendment of the Court
of a decision which has been executed. In this light, it is worthy to note the rule
that final and executory decisions, more so with those already executed, may no
longer be amended except only to correct errors which are clerical in nature.
Amendments or alterations which substantially affect such judgments as well as
the entire proceedings held for that purpose are null and void for lack of
jurisdiction. (Pio Barreto Realty Development Corporation v. Court of Appeals,
360 SCRA 127).
This Court in the case of CA GR No. 54041 dated February 28, 2001, has ruled
that the Orders of the Secretary of Labor and Employment dated December 24,
1997 and March 27, 1998 have become final and executory. It may be noted that
the said orders affirmed the earlier orders of the Secretary of Labor and
Employment dated December 22, 1995 and August 27, 1996 granting the
execution of the decision in the case between petitioners and IPI.
x x x x
WHEREFORE, based on the foregoing, the instant petition is hereby DENIED
DUE COURSE and is DISMISSED for lack of merit.
SO ORDERED.
40

The petitioners filed a Motion for Reconsideration,
41
but the CA denied the
motion on October 30, 2003.
42

Hence, they commenced this special civil action for certiorari.
The petitioners hereby contend that:
THE COURT OF APPEALS RULED CONTRARY TO SUPREME COURT
DECISIONS AND GRAVELY ABUSED ITS DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION WHEN IT:
A. HELD THAT GRANTING THE PETITION FOR
MANDAMUS (WHICH MERELY SEEKS FULL
EXECUTION OF DOLE FINAL JUDGMENTS 26
DECEMBER 1990 AND 5 DECEMBER 1991 WOULD
AMEND SAID FINAL AND EXECUTORY JUDGMENTS.
B. FAILED TO IMPLEMENT THE SUPREME COURT
DOCTRINE SET IN PDCP VS. GENILO, G.R. NO.
106705, THAT SIMILARLY SITUATED EMPLOYEES
HAS THE RIGHT TO PROVE THEIR ENTITLEMENT TO
THE BENEFITS AWARDED UNDER FINAL
JUDGMENTS.
C. HELD THAT THE QUESTIONED JUDGMENTS HAD
BEEN EXECUTED WHEN THE RESPONDENTS
THEMSELVES ADMIT THE CONTRARY.
D. HELD THAT DOLE SECRETARY DID NOT COMMIT
GRAVE ABUSE OF DISCRETION WHEN SHE
REFUSED TO FULLY EXECUTE THE 1990 AND 1991
DOLE FINAL JUDGMENTS AND ISSUE
CORRESPONDING WRITS OF EXECUTION.
The petitioners submit that of the six groups of employees classified under the
April 12, 1995 notice of computation/execution issued by Regional Director
Macaraya, only the first two groups, that is, the 15 employees initially
represented by Atty. Arnado; and the nine salesmen led by Geronimo S.
Banquirigo, had been granted a writ of execution. They further submit that the
May 24, 1995 writ of execution issued in favor of the first group of employees,
including themselves, had only been partially satisfied because no backwages or
separation pay from March 16, 1995 onwards had yet been paid to them; that the
reduced award granted to the second group of employees was in violation of the
April 12, 1995 notice of computation/execution; that no writ of execution had
been issued in favor of the other groups of employees; and that DOLE Secretary
Sto. Tomas thus committed grave abuse of discretion in refusing to fully execute
the December 26, 1990 and December 5, 1991 orders.
In its comment, IPI counters that the petition for certiorari should be dismissed for
being an improper remedy, the more appropriate remedy being a petition for
review on certiorari; that a petition for review on certiorari should have been filed
within 15 days from receipt of the denial of the motion for reconsideration, as
provided in Section 1 and Section 2 of Rule 45; and that the petition must also be
outrightly dismissed for being filed out of time.
IPI contends that the finality of the December 24, 1997 and March 27, 1998
orders of the DOLE Secretary rendered them unalterable; that Atty. Arnado had
already brought the December 24, 1997 and March 27, 1998 orders to this Court
for review (G.R. No. 134118); and that the Court had dismissed the petition for
having been filed out of time and for the petitioners failure to comply with Rule
13 and Rule 45 of the Rules of Court.
Ruling
We dismiss the petition for certiorari.
Firstly, an appeal by petition for review on certiorari under Rule 45 of the Rules of
Court, to be taken to this Court within 15 days from notice of the judgment or final
order raising only questions of law, was the proper remedy available to the
petitioners. Hence, their filing of the petition for certiorari on January 9, 2004 to
assail the CAs May 30, 2003 decision and October 30, 2003 resolution in C.A.-
G.R. SP No. 65970 upon their allegation of grave abuse of discretion committed
by the CA was improper. The averment therein that the CA gravely abused its
discretion did not warrant the filing of the petition for certiorari, unless the petition
further showed how an appeal in due course under Rule 45 was not an adequate
remedy for them. By virtue of its being an extraordinary remedy, certiorari cannot
replace or substitute an adequate remedy in the ordinary course of law, like an
appeal in due course.
43

We remind them that an appeal may also avail to review and correct any grave
abuse of discretion committed by an inferior court, provided it will be adequate for
that purpose.
It is the adequacy of a remedy in the ordinary course of law that determines
whether a special civil action for certiorari can be a proper alternative remedy.
We reiterate what the Court has discoursed thereon in Heirs of Spouses Teofilo
M. Reterta and Elisa Reterta v. Spouses Lorenzo Mores and Virginia Lopez,
44

viz:
Specifically, the Court has held that the availability of appeal as a remedy does
not constitute sufficient ground to prevent or preclude a party from making use of
13

certiorari if appeal is not an adequate remedy, or an equally beneficial, or speedy
remedy. It is inadequacy, not the mere absence of all other legal remedies
and the danger of failure of justice without the writ, that must usually
determine the propriety of certiorari. A remedy is plain, speedy and
adequate if it will promptly relieve the petitioner from the injurious effects
of the judgment, order, or resolution of the lower court or agency. It is
understood, then, that a litigant need not mark time by resorting to the less
speedy remedy of appeal in order to have an order annulled and set aside
for being patently void for failure of the trial court to comply with the Rules
of Court.
Nor should the petitioner be denied the recourse despite certiorari not being
available as a proper remedy against an assailed order, because it is better on
balance to look beyond procedural requirements and to overcome the ordinary
disinclination to exercise supervisory powers in order that a void order of a lower
court may be controlled to make it conformable to law and justice. Verily, the
instances in which certiorari will issue cannot be defined, because to do so is to
destroy the comprehensiveness and usefulness of the extraordinary writ. The
wide breadth and range of the discretion of the court are such that authority is not
wanting to show that certiorari is more discretionary than either prohibition or
mandamus, and that in the exercise of superintending control over inferior courts,
a superior court is to be guided by all the circumstances of each particular case
"as the ends of justice may require." Thus, the writ will be granted whenever
necessary to prevent a substantial wrong or to do substantial justice.
45

(Emphasis supplied)
Even so, Rule 65 of the Rules of Court still requires the petition for certiorari to
comply with the following requisites, namely: (1) the writ of certiorari is directed
against a tribunal, a board, or an officer exercising judicial or quasi-judicial
functions; (2) such tribunal, board, or officer has acted without or in excess of
jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate
remedy in the ordinary course of law.
46

Jurisprudence recognizes certain situations when the extraordinary remedy of
certiorari may be deemed proper, such as: (a) when it is necessary to prevent
irreparable damages and injury to a party; (b) where the trial judge capriciously
and whimsically exercised his judgment; (c) where there may be danger of a
failure of justice; (d) where an appeal would be slow, inadequate, and insufficient;
(e) where the issue raised is one purely of law; (f) where public interest is
involved; and (g) in case of urgency.
47
Yet, a reading of the petition for certiorari
and its annexes reveals that the petition does not come under any of the
situations. Specifically, the petitioners have not shown that the grant of the writ of
certiorari will be necessary to prevent a substantial wrong or to do substantial
justice to them.
In dismissing the petitioners petition for certiorari, the CA in effect upheld the
Secretary of Labors declaration in her assailed July 4, 2001 decision that the full
satisfaction of the writs of execution had completely closed and terminated the
labor dispute.
Yet, the petitioners have ascribed grave abuse of discretion to the CA for doing
so.
We do not agree. We find no just cause to now issue the writ of certiorari in order
to set aside the CAs assailed May 30, 2003 decision. Indeed, the following well
stated justifications for the dismissal of the petition show that the CA was correct,
viz:
x x x x
It is worthy to note that all the decisions and incidents concerning the case
between petitioners and private respondent IPI have long attained finality. The
records show that petitioners have already been granted a writ of execution. In
fact, the decision has been executed. Thus, there is nothing for this Court to
modify. The granting of the instant petition calls for the amendment of the Court
of a decision which has been executed. In this light, it is worthy to note the rule
that final and executory decisions, more so with those already executed, may no
longer be amended except only to correct errors which are clerical in nature.
Amendments or alterations which substantially affect such judgments as well as
the entire proceedings held for that purpose are null and void for lack of
jurisdiction (Pio Barretto Realty Development Corporation v. Court of Appeals,
360 SCRA 127).
This Court in the case of CA GR No. 54041 dated February 28, 2001, has ruled
that the Orders of the Secretary of Labor and Employment dated December 24,
1997 and March 27, 1998 have become final and executory. It may be noted that
the said orders affirmed the earlier orders of the Secretary of Labor and
Employment dated December 22, 1995 and August 27, 1996 granting the
execution of the decision in the case between petitioners and IPI.
There is nothing on the records to support the allegation of petitioners that the
Secretary of Labor and Employment abused her discretion. The pertinent portion
of the assailed order reads:
"Given that this office had already ruled on all incidents of the case in its March
27, 1998 order and the Writ of Execution dated June 5, 1995 had already
attained finality and had in fact been completely satisfied through the deposit with
the Regional Office of the amount covered by the Writ, the subsequent Motions
filed by Atty. Arnado can no longer be entertained, much less granted by this
Office. Thus, at this point, there is nothing more to grant nor to execute."
48

x x x x
In a special civil action for certiorari brought against a court with jurisdiction over
a case, the petitioner carries the burden to prove that the respondent tribunal
committed not a merely reversible error but a grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing the impugned order.
49

Showing mere abuse of discretion is not enough, for the abuse must be shown to
be grave. Grave abuse of discretion means either that the judicial or quasi-
judicial power was exercised in an arbitrary or despotic manner by reason of
passion or personal hostility, or that the respondent judge, tribunal or board
evaded a positive duty, or virtually refused to perform the duty enjoined or to act
in contemplation of law, such as when such judge, tribunal or board exercising
judicial or quasi-judicial powers acted in a capricious or whimsical manner as to
be equivalent to lack of jurisdiction.
50
Under the circumstances, the CA
committed no abuse of discretion, least of all grave, because its justifications
were supported by the history of the dispute and borne out by the applicable laws
and jurisprudence.
And, secondly, the records contradict the petitioners insistence that the two writs
of execution to enforce the December 26, 1990 and December 5, 1991 orders of
the DOLE Secretary were only partially satisfied. To recall, the two writs of
execution issued were the one for P4,162,361.50, later reduced to
P3,416,402.10, in favor of the 15 employees represented by Atty. Arnado, and
that for P1,200,378.92 in favor of the second group of employees led by
Banquerigo.
There is no question that the 15 employees represented by Atty. Arnado,
inclusive of the petitioners, received their portion of the award covered by the
September 3, 1996 writ of execution for the amount of P3,416,402.10 through the
release of the garnished deposit of IPI at China Banking Corporation. That was
why they then executed the satisfaction of judgment and quitclaim/release, the
basis for the DOLE Secretary to expressly declare in her July 4, 2001 decision
that the full satisfaction of the writ of execution "completely CLOSED and
TERMINATED this case."
51

Still, the 15 employees demand payment of their separation pay and backwages
from March 16, 1995 onwards pursuant to their reservation reflected in the
satisfaction of judgment and quitclaim/release they executed on September 11,
1996.
The demand lacked legal basis. Although the decision of the DOLE Secretary
dated December 5, 1991 had required IPI to reinstate the affected workers to
their former positions with full backwages reckoned from December 8, 1989 until
actually reinstated without loss of seniority rights and other benefits, the
reinstatement thus decreed was no longer possible. Hence, separation pay was
instead paid to them. This alternative was sustained in law and jurisprudence, for
"separation pay may avail in lieu of reinstatement if reinstatement is no longer
practical or in the best interest of the parties. Separation pay in lieu of
reinstatement may likewise be awarded if the employee decides not to be
reinstated."
52

Under the circumstances, the employment of the 15 employees or the possibility
of their reinstatement terminated by March 15, 1995. Thereafter, their claim for
separation pay and backwages beyond March 15, 1995 would be unwarranted.
The computation of separation pay and backwages due to illegally dismissed
employees should not go beyond the date when they were deemed to have been
actually separated from their employment, or beyond the date when their
reinstatement was rendered impossible. Anent this, the Court has observed in
Golden Ace Builders v. Talde:
53

The basis for the payment of backwages is different from that for the award of
separation pay. Separation pay is granted where reinstatement is no longer
advisable because of strained relations between the employee and the employer.
Backwages represent compensation that should have been earned but were not
14

collected because of the unjust dismissal. The basis for computing backwages is
usually the length of the employees service while that for separation pay is the
actual period when the employee was unlawfully prevented from working.
As to how both awards should be computed, Macasero v. Southern Industrial
Gases Philippines instructs:
[T]he award of separation pay is inconsistent with a finding that there was no
illegal dismissal, for under Article 279 of the Labor Code and as held in a catena
of cases, an employee who is dismissed without just cause and without due
process is entitled to backwages and reinstatement or payment of separation
pay in lieu thereof:
Thus, an illegally dismissed employee is entitled to two reliefs: backwages and
reinstatement. The two reliefs provided are separate and distinct. In instances
where reinstatement is no longer feasible because of strained relations between
the employee and the employer, separation pay is granted. In effect, an illegally
dismissed employee is entitled to either reinstatement, if viable, or separation
pay if reinstatement is no longer viable, and backwages.
The normal consequences of respondents illegal dismissal, then, are
reinstatement without loss of seniority rights, and payment of backwages
computed from the time compensation was withheld up to the date of
actual reinstatement. Where reinstatement is no longer viable as an option,
separation pay equivalent to one (1) month salary for every year of service
should be awarded as an alternative. The payment of separation pay is in
addition to payment of backwages. (emphasis, italics and underscoring supplied)
x x x x
Clearly then, respondent is entitled to backwages and separation pay as his
reinstatement has been rendered impossible due to strained relations. As
correctly held by the appellate court, the backwages due respondent must be
computed from the time he was unjustly dismissed until his actual reinstatement,
or from February 1999 until June 30, 2005 when his reinstatement was rendered
impossible without fault on his part.
The Court, however, does not find the appellate court's computation of
separation pay in order. The appellate court considered respondent to have
served petitioner company for only eight years. Petitioner was hired in 1990,
however, and he must be considered to have been in the service not only until
1999, when he was unjustly dismissed, but until June 30, 2005, the day he is
deemed to have been actually separated (his reinstatement having been
rendered impossible) from petitioner company or for a total of 15 years.
54

As for the portions of the award pertaining to the rest of the employees listed in
the April 12, 1995 notice of execution/computation (i.e., those allegedly similarly
situated as the employees listed in the December 5, 1991 order of the DOLE
Secretary) still remaining unsatisfied, the petitioners are definitely not the proper
parties to ventilate such concern in this or any other forum. At any rate, the
concern has already been addressed and resolved by the Court in G.R. No.
164633.
55

WHEREFORE, the Court DISMISSES the petition for certiorari for its lack of
merit; AFFIRMS the decision promulgated on May 30, 2003; and ORDERS the
petitioners to pay the costs of suit.
G.R. No. 169510 August 8, 2011
ATOK BIG WEDGE COMPANY, INC., Petitioner,
vs.
JESUS P. GISON, Respondent.
D E C I S I O N
PERALTA, J .:
This is a petition for review on certiorari seeking to reverse and set aside the
Decision
1
dated May 31, 2005 of the Court of Appeals (CA) in CA-G.R. SP No.
87846, and the Resolution
2
dated August 23, 2005 denying petitioners motion for
reconsideration.
The procedural and factual antecedents are as follows:
Sometime in February 1992, respondent Jesus P. Gison was engaged as part-
time consultant on retainer basis by petitioner Atok Big Wedge Company, Inc.
through its then Asst. Vice-President and Acting Resident Manager, Rutillo A.
Torres. As a consultant on retainer basis, respondent assisted petitioner's
retained legal counsel with matters pertaining to the prosecution of cases against
illegal surface occupants within the area covered by the company's mineral
claims. Respondent was likewise tasked to perform liaison work with several
government agencies, which he said was his expertise.
Petitioner did not require respondent to report to its office on a regular basis,
except when occasionally requested by the management to discuss matters
needing his expertise as a consultant. As payment for his services, respondent
received a retainer fee of P3,000.00 a month,
3
which was delivered to him either
at his residence or in a local restaurant. The parties executed a retainer
agreement, but such agreement was misplaced and can no longer be found.
The said arrangement continued for the next eleven years.
Sometime thereafter, since respondent was getting old, he requested that
petitioner cause his registration with the Social Security System (SSS), but
petitioner did not accede to his request. He later reiterated his request but it was
ignored by respondent considering that he was only a retainer/consultant. On
February 4, 2003, respondent filed a Complaint
4
with the SSS against petitioner
for the latter's refusal to cause his registration with the SSS.
On the same date, Mario D. Cera, in his capacity as resident manager of
petitioner, issued a Memorandum
5
advising respondent that within 30 days from
receipt thereof, petitioner is terminating his retainer contract with the company
since his services are no longer necessary.
On February 21, 2003, respondent filed a Complaint
6
for illegal dismissal, unfair
labor practice, underpayment of wages, non-payment of 13th month pay,
vacation pay, and sick leave pay with the National Labor Relations Commission
(NLRC), Regional Arbitration Branch (RAB), Cordillera Administrative Region,
against petitioner, Mario D. Cera, and Teofilo R. Asuncion, Jr. The case was
docketed as NLRC Case No. RAB-CAR-02-0098-03.
Respondent alleged that:
x x x [S]ometime in January 1992, Rutillo A. Torres, then the resident manager of
respondent Atok Big Wedge Co., Inc., or Atok for brevity, approached him and
asked him if he can help the companys problem involving the 700 million pesos
crop damage claims of the residents living at the minesite of Atok. He
participated in a series of dialogues conducted with the residents. Mr. Torres
offered to pay him P3,000.00 per month plus representation expenses. It was
also agreed upon by him and Torres that his participation in resolving the
problem was temporary and there will be no employer-employee relationship
between him and Atok. It was also agreed upon that his compensation,
allowances and other expenses will be paid through disbursement vouchers.
On February 1, 1992 he joined Atok. One week thereafter, the aggrieved crop
damage claimants barricaded the only passage to and from the minesite. In the
early morning of February 1, 1992, a dialogue was made by Atok and the crop
damage claimants. Unfortunately, Atoks representatives, including him, were
virtually held hostage by the irate claimants who demanded on the spot payment
of their claims. He was able to convince the claimants to release the company
representatives pending referral of the issue to higher management.
A case was filed in court for the lifting of the barricades and the court ordered the
lifting of the barricade. While Atok was prosecuting its case with the claimants,
another case erupted involving its partner, Benguet Corporation. After Atok
parted ways with Benguet Corporation, some properties acquired by the
partnership and some receivables by Benguet Corporation was the problem. He
was again entangled with documentation, conferences, meetings, planning,
execution and clerical works. After two years, the controversy was resolved and
Atok received its share of the properties of the partnership, which is about 5
million pesos worth of equipment and condonation of Atoks accountabilities with
Benguet Corporation in the amount of P900,000.00.
In the meantime, crop damage claimants lost interest in pursuing their claims
against Atok and Atok was relieved of the burden of paying 700 million pesos. In
between attending the problems of the crop damage issue, he was also assigned
to do liaison works with the SEC, Bureau of Mines, municipal government of
Itogon, Benguet, the Courts and other government offices.
After the crop damage claims and the controversy were resolved, he was
permanently assigned by Atok to take charge of some liaison matters and public
15

relations in Baguio and Benguet Province, and to report regularly to Atoks office
in Manila to attend meetings and so he had to stay in Manila at least one week a
month.
Because of his length of service, he invited the attention of the top officers of the
company that he is already entitled to the benefits due an employee under the
law, but management ignored his requests. However, he continued to avail of his
representation expenses and reimbursement of company-related expenses. He
also enjoyed the privilege of securing interest free salary loans payable in one
year through salary deduction.
In the succeeding years of his employment, he was designated as liaison officer,
public relation officer and legal assistant, and to assist in the ejection of illegal
occupants in the mining claims of Atok.
Since he was getting older, being already 56 years old, he reiterated his request
to the company to cause his registration with the SSS. His request was again
ignored and so he filed a complaint with the SSS. After filing his complaint with
the SSS, respondents terminated his services.
7

On September 26, 2003, after the parties have submitted their respective
pleadings, Labor Arbiter Rolando D. Gambito rendered a Decision
8
ruling in favor
of the petitioner. Finding no employer-employee relationship between petitioner
and respondent, the Labor Arbiter dismissed the complaint for lack of merit.
Respondent then appealed the decision to the NLRC.
On July 30, 2004, the NLRC, Second Division, issued a Resolution
9
affirming the
decision of the Labor Arbiter. Respondent filed a Motion for Reconsideration, but
it was denied in the Resolution
10
dated September 30, 2004.
Aggrieved, respondent filed a petition for review under Rule 65 of the Rules of
Court before the CA questioning the decision and resolution of the NLRC, which
was later docketed as CA-G.R. SP No. 87846. In support of his petition,
respondent raised the following issues:
a) Whether or not the Decision of the Honorable Labor Arbiter and
the subsequent Resolutions of the Honorable Public Respondent
affirming the same, are in harmony with the law and the facts of the
case;
b) Whether or not the Honorable Labor Arbiter Committed a Grave
Abuse of Discretion in Dismissing the Complaint of Petitioner and
whether or not the Honorable Public Respondent Committed a Grave
Abuse of Discretion when it affirmed the said Decision.
11

On May 31, 2005, the CA rendered the assailed Decision annulling and setting
aside the decision of the NLRC, the decretal portion of which reads:
WHEREFORE, the petition is GRANTED. The assailed Resolution of the
National Labor Relations Commission dismissing petitioner's complaint for illegal
dismissal is ANNULLED and SET ASIDE. Private respondent Atok Big Wedge
Company Incorporated is ORDERED to reinstate petitioner Jesus P. Gison to his
former or equivalent position without loss of seniority rights and to pay him full
backwages, inclusive of allowances and other benefits or their monetary
equivalent computed from the time these were withheld from him up to the time
of his actual and effective reinstatement. This case is ordered REMANDED to
the Labor Arbiter for the proper computation of backwages, allowances and other
benefits due to petitioner. Costs against private respondent Atok Big Wedge
Company Incorporated.
SO ORDERED.
12

In ruling in favor of the respondent, the CA opined, among other things, that both
the Labor Arbiter and the NLRC may have overlooked Article 280 of the Labor
Code,
13
or the provision which distinguishes between two kinds of employees,
i.e., regular and casual employees. Applying the provision to the respondent's
case, he is deemed a regular employee of the petitioner after the lapse of one
year from his employment. Considering also that respondent had been
performing services for the petitioner for eleven years, respondent is entitled to
the rights and privileges of a regular employee.
The CA added that although there was an agreement between the parties that
respondent's employment would only be temporary, it clearly appears that
petitioner disregarded the same by repeatedly giving petitioner several tasks to
perform. Moreover, although respondent may have waived his right to attain a
regular status of employment when he agreed to perform these tasks on a
temporary employment status, still, it was the law that recognized and considered
him a regular employee after his first year of rendering service to petitioner. As
such, the waiver was ineffective.
Hence, the petition assigning the following errors:
I. WHETHER OR NOT THE COURT OF APPEALS DECIDED QUESTIONS OF
SUBSTANCE CONTRARY TO LAW AND APPLICABLE RULINGS OF THIS
HONORABLE COURT WHEN IT GAVE DUE COURSE TO THE PETITION FOR
CERTIORARI DESPITE THE FACT THAT THERE WAS NO SHOWING THAT
THE NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE
ABUSE OF DISCRETION.
II. WHETHER OR NOT THE COURT OF APPEALS DECIDED QUESTIONS OF
SUBSTANCE CONTRARY TO THE LAW AND APPLICABLE RULINGS OF
THIS HONORABLE COURT WHEN IT BASED ITS FINDING THAT
RESPONDENT IS ENTITLED TO REGULAR EMPLOYMENT ON A PROVISION
OF LAW THAT THIS HONORABLE COURT HAS DECLARED TO BE
INAPPLICABLE IN CASE THE EXISTENCE OF AN EMPLOYER-EMPLOYEE
RELATIONSHIP IS IN DISPUTE OR IS THE FACT IN ISSUE.
III. WHETHER OR NOT THE COURT OF APPEALS DECIDED QUESTIONS OF
SUBSTANCE CONTRARY TO LAW AND APPLICABLE RULINGS OF THIS
HONORABLE COURT WHEN IT ERRONEOUSLY FOUND THAT
RESPONDENT IS A REGULAR EMPLOYEE OF THE COMPANY.
IV. WHETHER OR NOT THE COURT OF APPEALS DECIDED QUESTIONS OF
SUBSTANCE CONTRARY TO LAW AND APPLICABLE RULINGS OF THIS
HONORABLE COURT WHEN IT ERRONEOUSLY DIRECTED
RESPONDENT'S REINSTATEMENT DESPITE THE FACT THAT THE NATURE
OF THE SERVICES HE PROVIDED TO THE COMPANY WAS SENSITIVE AND
CONFIDENTIAL.
14

Petitioner argues that since the petition filed by the respondent before the CA
was a petition for certiorari under Rule 65 of the Rules of Court, the CA should
have limited the issue on whether or not there was grave abuse of discretion on
the part of the NLRC in rendering the resolution affirming the decision of the
Labor Arbiter.
Petitioner also posits that the CA erred in applying Article 280 of the Labor Code
in determining whether there was an employer-employee relationship between
the petitioner and the respondent. Petitioner contends that where the existence
of an employer-employee relationship is in dispute, Article 280 of the Labor Code
is inapplicable. The said article only set the distinction between a casual
employee from a regular employee for purposes of determining the rights of an
employee to be entitled to certain benefits.
Petitioner insists that respondent is not a regular employee and not entitled to
reinstatement.
On his part, respondent maintains that he is an employee of the petitioner and
that the CA did not err in ruling in his favor.
The petition is meritorious.
At the outset, respondent's recourse to the CA was the proper remedy to
question the resolution of the NLRC. It bears stressing that there is no appeal
from the decision or resolution of the NLRC. As this Court enunciated in the case
of St. Martin Funeral Home v. NLRC,
15
the special civil action of certiorari under
Rule 65 of the Rules of Civil Procedure, which is filed before the CA, is the
proper vehicle for judicial review of decisions of the NLRC. The petition should be
initially filed before the Court of Appeals in strict observance of the doctrine on
hierarchy of courts as the appropriate forum for the relief desired.
16
This Court
not being a trier of facts, the resolution of unclear or ambiguous factual findings
should be left to the CA as it is procedurally equipped for that purpose. From the
decision of the Court of Appeals, an ordinary appeal under Rule 45 of the Rules
of Civil Procedure before the Supreme Court may be resorted to by the parties.
Hence, respondent's resort to the CA was appropriate under the circumstances.
Anent the primordial issue of whether or not an employer-employee relationship
exists between petitioner and respondent.
Well-entrenched is the doctrine that the existence of an employer-employee
relationship is ultimately a question of fact and that the findings thereon by the
16

Labor Arbiter and the NLRC shall be accorded not only respect but even finality
when supported by substantial evidence.
17
Being a question of fact, the
determination whether such a relationship exists between petitioner and
respondent was well within the province of the Labor Arbiter and the NLRC.
Being supported by substantial evidence, such determination should have been
accorded great weight by the CA in resolving the issue.
To ascertain the existence of an employer-employee relationship jurisprudence
has invariably adhered to the four-fold test, to wit: (1) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employee's conduct, or the so-called
"control test."
18
Of these four, the last one is the most important.
19
The so-called
"control test" is commonly regarded as the most crucial and determinative
indicator of the presence or absence of an employer-employee relationship.
Under the control test, an employer-employee relationship exists where the
person for whom the services are performed reserves the right to control not only
the end achieved, but also the manner and means to be used in reaching that
end.
20

Applying the aforementioned test, an employer-employee relationship is
apparently absent in the case at bar. Among other things, respondent was not
required to report everyday during regular office hours of petitioner.
Respondent's monthly retainer fees were paid to him either at his residence or a
local restaurant. More importantly, petitioner did not prescribe the manner in
which respondent would accomplish any of the tasks in which his expertise as a
liaison officer was needed; respondent was left alone and given the freedom to
accomplish the tasks using his own means and method. Respondent was
assigned tasks to perform, but petitioner did not control the manner and methods
by which respondent performed these tasks. Verily, the absence of the element
of control on the part of the petitioner engenders a conclusion that he is not an
employee of the petitioner.
Moreover, the absence of the parties' retainership agreement notwithstanding,
respondent clearly admitted that petitioner hired him in a limited capacity only
and that there will be no employer-employee relationship between them. As
averred in respondent's Position Paper:
21

2. For the participation of complainant regarding this particular problem of Atok,
Mr. Torres offered him a pay in the amount of Php3,000.00 per month plus
representation expenses. It was also agreed by Mr. Torres and the complainant
that his participation on this particular problem of Atok will be temporary since the
problem was then contemplated to be limited in nature, hence, there will be no
employer-employee relationship between him and Atok. Complainant agreed on
this arrangement. It was also agreed that complainant's compensations,
allowances, representation expenses and reimbursement of company- related
expenses will be processed and paid through disbursement vouchers;
22

Respondent was well aware of the agreement that he was hired merely as a
liaison or consultant of the petitioner and he agreed to perform tasks for the
petitioner on a temporary employment status only. However, respondent anchors
his claim that he became a regular employee of the petitioner based on his
contention that the "temporary" aspect of his job and its "limited" nature could not
have lasted for eleven years unless some time during that period, he became a
regular employee of the petitioner by continually performing services for the
company.
Contrary to the conclusion of the CA, respondent is not an employee, much more
a regular employee of petitioner. The appellate court's premise that regular
employees are those who perform activities which are desirable and necessary
for the business of the employer is not determinative in this case. In fact, any
agreement may provide that one party shall render services for and in behalf of
another, no matter how necessary for the latter's business, even without being
hired as an employee.
23
Hence, respondent's length of service and petitioner's
repeated act of assigning respondent some tasks to be performed did not result
to respondent's entitlement to the rights and privileges of a regular employee.
Furthermore, despite the fact that petitioner made use of the services of
respondent for eleven years, he still cannot be considered as a regular employee
of petitioner. Article 280 of the Labor Code, in which the lower court used to
buttress its findings that respondent became a regular employee of the petitioner,
is not applicable in the case at bar. Indeed, the Court has ruled that said
provision is not the yardstick for determining the existence of an employment
relationship because it merely distinguishes between two kinds of employees,
i.e., regular employees and casual employees, for purposes of determining the
right of an employee to certain benefits, to join or form a union, or to security of
tenure; it does not apply where the existence of an employment relationship is in
dispute.
24
It is, therefore, erroneous on the part of the Court of Appeals to rely on
Article 280 in determining whether an employer-employee relationship exists
between respondent and the petitioner
Considering that there is no employer-employee relationship between the parties,
the termination of respondent's services by the petitioner after due notice did not
constitute illegal dismissal warranting his reinstatement and the payment of full
backwages, allowances and other benefits.
WHEREFORE, premises considered, the petition is GRANTED. The Decision
and the Resolution of the Court of Appeals in CA-G.R. SP No. 87846, are
REVERSED and SET ASIDE. The Resolutions dated July 30, 2004 and
September 30, 2004 of the National Labor Relations Commission are
REINSTATED.
G.R. No. 177937 January 19, 2011
ROBINSONS GALLERIA/ROBINSONS SUPERMARKET CORPORATION
and/or JESS MANUEL, Petitioners,
vs.
IRENE R. RANCHEZ, Respondent.
D E C I S I O N
NACHURA, J .:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules
of Court, assailing the Decision
1
dated August 29, 2006 and the Resolution
2

dated May 16, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 91631.
The Facts
The facts of the case are as follows.
Respondent was a probationary employee of petitioner Robinsons
Galleria/Robinsons Supermarket Corporation (petitioner Supermarket) for a
period of five (5) months, or from October 15, 1997 until March 14, 1998.
3
She
underwent six (6) weeks of training as a cashier before she was hired as such on
October 15, 1997.
4

Two weeks after she was hired, or on October 30, 1997, respondent reported to
her supervisor the loss of cash amounting to Twenty Thousand Two Hundred
Ninety-Nine Pesos (P20,299.00) which she had placed inside the company
locker. Petitioner Jess Manuel (petitioner Manuel), the Operations Manager of
petitioner Supermarket, ordered that respondent be strip-searched by the
company guards. However, the search on her and her personal belongings
yielded nothing.
5

Respondent acknowledged her responsibility and requested that she be allowed
to settle and pay the lost amount. However, petitioner Manuel did not heed her
request and instead reported the matter to the police. Petitioner Manuel likewise
requested the Quezon City Prosecutors Office for an inquest.
6

On November 5, 1997, an information for Qualified Theft was filed with the
Quezon City Regional Trial Court. Respondent was constrained to spend two
weeks in jail for failure to immediately post bail in the amount of Forty Thousand
Pesos (P40,000.00).
7

On November 25, 1997, respondent filed a complaint for illegal dismissal and
damages.
8

On March 12, 1998, petitioners sent to respondent by mail a notice of termination
and/or notice of expiration of probationary employment dated March 9, 1998.
9

On August 10, 1998, the Labor Arbiter rendered a decision,
10
the fallo of which
reads:
CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered
dismissing the claim of illegal dismissal for lack of merit.
Respondents are ordered to accept complainant to her former or equivalent work
without prejudice to any action they may take in the premises in connection with
the missing money of P20,299.00.
SO ORDERED.
11

17

In dismissing the complaint for illegal dismissal, the Labor Arbiter ratiocinated
that at the time respondent filed the complaint for illegal dismissal, she was not
yet dismissed by petitioners. When she was strip- searched by the security
personnel of petitioner Supermarket, the guards were merely conducting an
investigation. The subsequent referral of the loss to the police authorities might
be considered routine. Respondents non-reporting for work after her release
from detention could be taken against her in the investigation that petitioner
supermarket would conduct.
12

On appeal, the National Labor Relations Commission (NLRC) reversed the
decision of the Labor Arbiter in a decision
13
dated October 20, 2003. The
dispositive portion of the decision reads:
WHEREFORE, the appealed decision is SET ASIDE. The respondents are
hereby ordered to immediately reinstate complainant to her former or equivalent
position without loss of seniority rights and privileges and to pay her full
backwages computed from the time she was constructively dismissed on
October 30, 1997 up to the time she is actually reinstated.
SO ORDERED.
14

In reversing the decision of the Labor Arbiter, the NLRC ruled that respondent
was denied due process by petitioners. Strip-searching respondent and sending
her to jail for two weeks certainly amounted to constructive dismissal because
continued employment had been rendered impossible, unreasonable, and
unlikely. The wedge that had been driven between the parties was impossible to
ignore.
15
Although respondent was only a probationary employee, the
subsequent lapse of her probationary contract of employment did not have the
effect of validly terminating her employment because constructive dismissal had
already been effected earlier by petitioners.
16

Petitioners filed a motion for reconsideration, which was denied by the NLRC in a
resolution
17
dated July 21, 2005.
Petitioners filed a petition for certiorari under Rule 65 of the Rules of Court before
the CA. On August 29, 2006, the CA rendered a Decision, the dispositive portion
of which reads:
WHEREFORE, premises considered, the challenged Decision of the National
Labor Relations Commission is AFFIRMED with MODIFICATION in that should
reinstatement be no longer possible in view of the strained relation between the
parties, Petitioners are ordered to pay Respondent separation pay equivalent to
one (1) month pay in addition to backwages from the date of dismissal until the
finality of the assailed decision.
SO ORDERED.
18

Petitioners filed a motion for reconsideration. However, the CA denied the same
in a Resolution dated May 16, 2007.
Hence, this petition.
Petitioners assail the reinstatement of respondent, highlighting the fact that she
was a probationary employee and that her probationary contract of employment
lapsed on March 14, 1998. Thus, her reinstatement was rendered moot and
academic. Furthermore, even if her probationary contract had not yet expired, the
offense that she committed would nonetheless militate against her
regularization.
19

On the other hand, respondent insists that she was constructively dismissed by
petitioner Supermarket when she was strip-searched, divested of her dignity, and
summarily thrown in jail. She could not have been expected to go back to work
after being allowed to post bail because her continued employment had been
rendered impossible, unreasonable, and unlikely. She stresses that, at the time
the money was discovered missing, it was not with her but locked in the company
locker. The company failed to provide its cashiers with strong locks and proper
security in the work place. Respondent argues that she was not caught in the act
and even reported that the money was missing. She claims that she was denied
due process.
20

The Issue
The sole issue for resolution is whether respondent was illegally terminated from
employment by petitioners.
The Ruling of the Court
We rule in the affirmative.
There is probationary employment when the employee upon his engagement is
made to undergo a trial period during which the employer determines his fitness
to qualify for regular employment based on reasonable standards made known to
him at the time of engagement.
21

A probationary employee, like a regular employee, enjoys security of tenure.
22

However, in cases of probationary employment, aside from just or authorized
causes of termination, an additional ground is provided under Article 281 of the
Labor Code, i.e., the probationary employee may also be terminated for failure to
qualify as a regular employee in accordance with reasonable standards made
known by the employer to the employee at the time of the engagement. Thus, the
services of an employee who has been engaged on probationary basis may be
terminated for any of the following: (1) a just or (2) an authorized cause; and (3)
when he fails to qualify as a regular employee in accordance with reasonable
standards prescribed by the employer.
23

Article 277(b) of the Labor Code mandates that subject to the constitutional right
of workers to security of tenure and their right to be protected against dismissal,
except for just and authorized cause and without prejudice to the requirement of
notice under Article 283 of the same Code, the employer shall furnish the worker,
whose employment is sought to be terminated, a written notice containing a
statement of the causes of termination, and shall afford the latter ample
opportunity to be heard and to defend himself with the assistance of a
representative if he so desires, in accordance with company rules and
regulations pursuant to the guidelines set by the Department of Labor and
Employment.
In the instant case, based on the facts on record, petitioners failed to accord
respondent substantive and procedural due process. The haphazard manner in
the investigation of the missing cash, which was left to the determination of the
police authorities and the Prosecutors Office, left respondent with no choice but
to cry foul. Administrative investigation was not conducted by petitioner
Supermarket. On the same day that the missing money was reported by
respondent to her immediate superior, the company already pre-judged her guilt
without proper investigation, and instantly reported her to the police as the
suspected thief, which resulted in her languishing in jail for two weeks.
As correctly pointed out by the NLRC, the due process requirements under the
Labor Code are mandatory and may not be supplanted by police investigation or
court proceedings. The criminal aspect of the case is considered independent of
the administrative aspect. Thus, employers should not rely solely on the findings
of the Prosecutors Office. They are mandated to conduct their own separate
investigation, and to accord the employee every opportunity to defend himself.
Furthermore, respondent was not represented by counsel when she was strip-
searched inside the company premises or during the police investigation, and in
the preliminary investigation before the Prosecutors Office.
Respondent was constructively dismissed by petitioner Supermarket effective
October 30, 1997. It was unreasonable for petitioners to charge her with
abandonment for not reporting for work upon her release in jail. It would be the
height of callousness to expect her to return to work after suffering in jail for two
weeks. Work had been rendered unreasonable, unlikely, and definitely
impossible, considering the treatment that was accorded respondent by
petitioners.
As to respondents monetary claims, Article 279 of the Labor Code provides that
an employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges, to full
backwages, inclusive of allowances, and to other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up
to the time of his actual reinstatement. However, due to the strained relations of
the parties, the payment of separation pay has been considered an acceptable
alternative to reinstatement, when the latter option is no longer desirable or
viable. On the one hand, such payment liberates the employee from what could
be a highly oppressive work environment. On the other, the payment releases
the employer from the grossly unpalatable obligation of maintaining in its employ
a worker it could no longer trust.
24

Thus, as an illegally or constructively dismissed employee, respondent is entitled
to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no
longer viable; and (2) backwages. These two reliefs are separate and distinct
from each other and are awarded conjunctively.
25
lavvphil
18

In this case, since respondent was a probationary employee at the time she was
constructively dismissed by petitioners, she is entitled to separation pay and
backwages. Reinstatement of respondent is no longer viable considering the
circumstances.1avvphi1
However, the backwages that should be awarded to respondent shall be
reckoned from the time of her constructive dismissal until the date of the
termination of her employment, i.e., from October 30, 1997 to March 14, 1998.
The computation should not cover the entire period from the time her
compensation was withheld up to the time of her actual reinstatement. This is
because respondent was a probationary employee, and the lapse of her
probationary employment without her appointment as a regular employee of
petitioner Supermarket effectively severed the employer-employee relationship
between the parties.
In all cases involving employees engaged on probationary basis, the employer
shall make known to its employees the standards under which they will qualify as
regular employees at the time of their engagement. Where no standards are
made known to an employee at the time, he shall be deemed a regular
employee,
26
unless the job is self-descriptive, like maid, cook, driver, or
messenger. However, the constitutional policy of providing full protection to labor
is not intended to oppress or destroy management.
27
Naturally, petitioner
Supermarket cannot be expected to retain respondent as a regular employee
considering that she lost P20,299.00 while acting as a cashier during the
probationary period. The rules on probationary employment should not be used
to exculpate a probationary 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.
28

WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision of
the Court of Appeals in CA-G.R. SP No. 91631 is hereby AFFIRMED with the
MODIFICATION that petitioners are hereby ordered to pay respondent Irene R.
Ranchez separation pay equivalent to one (1) month pay and backwages from
October 30, 1997 to March 14, 1998.Costs against petitioners.
G.R. No. 149859 June 9, 2004
RADIN C. ALCIRA, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, MIDDLEBY PHILIPPINES
CORPORATION/FRANK THOMAS, XAVIER G. PEA and TRIFONA F.
MAMARADLO, respondents.
D E C I S I O N
CORONA, J .:
Before us on appeal is the decision
1
of the Court of Appeals
2
dated June 22,
2001 affirming the decision
3
of the National Labor Relations Commission
4
dated
March 23, 1999 which, in turn, affirmed the decision
5
of labor arbiter Pedro
Ramos dated May 19, 1998 dismissing petitioner Radin Alciras complaint for
illegal dismissal with prayer for reinstatement, backwages, moral damages,
exemplary damages and attorneys fees.
The facts follow.
Respondent Middleby Philippines Corporation (Middleby) hired petitioner as
engineering support services supervisor on a probationary basis for six months.
Apparently unhappy with petitioners performance, respondent Middleby
terminated petitioners services. The bone of contention centered on whether the
termination occurred before or after the six-month probationary period of
employment.
The parties, presenting their respective copies of Alciras appointment paper,
claimed conflicting starting dates of employment: May 20, 1996 according to
petitioner and May 27, 1996 according to respondent. Both documents indicated
petitioners employment status as "probationary (6 mos.)" and a remark that
"after five months (petitioners) performance shall be evaluated and any
adjustment in salary shall depend on (his) work performance."
6

Petitioner asserts that, on November 20, 1996, in the presence of his co-workers
and subordinates, a senior officer of respondent Middleby in bad faith withheld
his time card and did not allow him to work. Considering this as a dismissal "after
the lapse of his probationary employment," petitioner filed on November 21, 1996
a complaint in the National Labor Relations Commission (NLRC) against
respondent Middleby contending that he had already become a regular employee
as of the date he was illegally dismissed. Included as respondents in the
complaint were the following officers of respondent Middleby: Frank Thomas
(General Manager), Xavier Pea (Human Resources Manager) and Trifona
Mamaradlo (Engineering Manager).
In their defense, respondents claim that, during petitioners probationary
employment, he showed poor performance in his assigned tasks, incurred ten
absences, was late several times and violated company rules on the wearing of
uniform. Since he failed to meet company standards, petitioners application to
become a regular employee was disapproved and his employment was
terminated.
On May 19, 1998, the labor arbiter dismissed the complaint on the ground that:
(1) respondents were able to prove that petitioner was apprised of the standards
for becoming a regular employee; (2) respondent Mamaradlos affidavit showed
that petitioner "did not perform well in his assigned work and his attitude was
below par compared to the companys standard required of him" and (3)
petitioners dismissal on November 20, 1996 was before his "regularization,"
considering that, counting from May 20, 1996, the six-month probationary period
ended on November 20, 1996.
7

On March 23, 1999, the NLRC affirmed the decision of the labor arbiter.
On June 22, 2001, the Court of Appeals affirmed the judgment of the NLRC.
According to the appellate court:
Even assuming, arguendo, that petitioner was not informed of the
reasonable standards required of him by Middleby, the same is not
crucial because there is no termination to speak of but rather
expiration of contract. Petitioner loses sight of the fact that his
employment was probationary, contractual in nature, and one with a
definite period. At the expiration of the period stipulated in the
contract, his appointment was deemed terminated and a notice or
termination letter informing him of the non-renewal of his contract was
not necessary.
While probationary employees enjoy security of tenure such that they
cannot be removed except for just cause as provided by law, such
protection extends only during the period of probation. Once that
period expired, the constitutional protection could no longer be
invoked. Legally speaking, petitioner was not illegally dismissed. His
contract merely expired.
8

Hence, this petition for review based on the following assignment of errors:
I
The Court of Appeals gravely erred, blatantly disregarded the law and
established jurisprudence, in upholding the decision of the National
Labor Relations Commission.
II
The Court of Appeals gravely erred and blatantly disregarded the law
in holding that probationary employment is employment for a definite
period.
III
The Court of Appeals gravely erred in holding that an employer can
be presumed to have complied with its duty to inform the probationary
employee of the standards to make him a regular employee.
IV
The Court of Appeals gravely erred and failed to afford protection to
labor in not applying to the instant case the doctrine laid down by this
Honorable Court in Serrano vs. NLRC, et. al., G.R. No. 117040,
January 27, 2000.
9

Central to the matter at hand is Article 281 of the Labor Code which provides
that:
19

ART. 281. PROBATIONARY EMPLOYMENT. Probationary
employment shall not exceed six (6) months from the date the
employee started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an employee
who has been engaged on a probationary basis may be terminated
for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer
to the employee at the time of his engagement. An employee who is
allowed to work after a probationary period shall be considered a
regular employee.
The first issue we must resolve is whether petitioner was allowed to
work beyond his probationary period and was therefore already a
regular employee at the time of his alleged dismissal. We rule in the
negative.
Petitioner claims that under the terms of his contract, his probationary
employment was only for five months as indicated by the remark
"Please be informed that after five months, your performance shall be
evaluated and any adjustment in salary shall depend on your work
performance." The argument lacks merit. As correctly held by the
labor arbiter, the appointment contract also stated in another part
thereof that petitioners employment status was "probationary (6
mos.)." The five-month period referred to the evaluation of his work.
10

Petitioner insists that he already attained the status of a regular employee when
he was dismissed on November 20, 1996 because, having started work on May
20, 1996, the six-month probationary period ended on November 16, 1996.
According to petitioners computation, since Article 13 of the Civil Code provides
that one month is composed of thirty days, six months total one hundred eighty
days. As the appointment provided that petitioners status was "probationary (6
mos.)" without any specific date of termination, the 180th day fell on November
16, 1996. Thus, when he was dismissed on November 20, 1996, he was already
a regular employee.
Petitioners contention is incorrect. In CALS Poultry Supply Corporation, et. al.
vs. Roco, et. al.,
11
this Court dealt with the same issue of whether an
employment contract from May 16, 1995 to November 15, 1995 was within or
outside the six-month probationary period. We ruled that November 15, 1995
was still within the six-month probationary period. We reiterate our ruling in CALS
Poultry Supply:
(O)ur computation of the 6-month probationary period is reckoned
from the date of appointment up to the same calendar date of the 6th
month following.(italics supplied)
In short, since the number of days in each particular month was irrelevant,
petitioner was still a probationary employee when respondent Middleby opted not
to "regularize" him on November 20, 1996.
The second issue is whether respondent Middleby informed petitioner of the
standards for "regularization" at the start of his employment.
Section 6 (d) of Rule 1 of the Implementing Rules of Book VI of the Labor Code
(Department Order No. 10, Series of 1997) provides that:
x x x x x x x x x
(d) In all cases of probationary employment, the employer shall make
known to the employee the standards under which he will qualify as a
regular employee at the time of his engagement. Where no standards
are made known to the employee at that time, he shall be deemed a
regular employee.
x x x x x x x x x
We hold that respondent Middleby substantially notified petitioner of
the standards to qualify as a regular employee when it apprised him,
at the start of his employment, that it would evaluate his supervisory
skills after five months. In Orient Express Placement Philippines vs.
National Labor Relations Commission,
12
we ruled that an employer
failed to inform an employee of the reasonable standards for
becoming a regular employee:
Neither private respondent's Agency-Worker Agreement
with ORIENT EXPRESS nor his Employment Contract
with NADRICO ever mentioned that he must first take and
pass a Crane Operator's License Examination in Saudi
Arabia before he would be allowed to even touch a crane.
Neither did he know that he would be assigned as
floorman pending release of the results of the
examination or in the event that he failed; more
importantly, that he would be subjected to a
performance evaluation by his superior one (1) month
after his hiring to determine whether the company
was amenable to continuing with his employment.
Hence, respondent Flores could not be faulted for
precisely harboring the impression that he was hired as
crane operator for a definite period of one (1) year to
commence upon his arrival at the work-site and to
terminate at the end of one (1) year. No other condition
was laid out except that he was to be on probation for
three (3) months.(emphasis supplied)
Conversely, an employer is deemed to substantially comply with the rule on
notification of standards if he apprises the employee that he will be subjected to a
performance evaluation on a particular date after his hiring. We agree with the
labor arbiter when he ruled that:
In the instant case, petitioner cannot successfully say that he was
never informed by private respondent of the standards that he must
satisfy in order to be converted into regular status. This rans (sic)
counter to the agreement between the parties that after five months
of service the petitioners performance would be evaluated. It is only
but natural that the evaluation should be made vis--vis the
performance standards for the job. Private respondent Trifona
Mamaradlo speaks of such standard in her affidavit referring to the
fact that petitioner did not perform well in his assigned work and his
attitude was below par compared to the companys standard required
of him.
13

The third issue for resolution is whether petitioner was illegally dismissed when
respondent Middleby opted not to renew his contract on the last day of his
probationary employment.
It is settled that even if probationary employees do not enjoy permanent status,
they are accorded the constitutional protection of security of tenure. This means
they may only be terminated for just cause or when they otherwise fail to qualify
as regular employees in accordance with reasonable standards made known to
them by the employer at the time of their engagement.
14

But we have also ruled in Manlimos, et. al. vs. National Labor Relations
Commission
15
that this constitutional protection ends on the expiration of the
probationary period. On that date, the parties are free to either renew or
terminate their contract of employment. Manlimos concluded that "(t)his
development has rendered moot the question of whether there was a just cause
for the dismissal of the petitioners xxx."
16
In the case at bar, respondent Middleby
exercised its option not to renew the contract when it informed petitioner on the
last day of his probationary employment that it did not intend to grant him a
regular status.
Although we can regard petitioners severance from work as dismissal, the same
cannot be deemed illegal. As found by the labor arbiter, the NLRC and the Court
of Appeals, petitioner (1) incurred ten absences (2) was tardy several times (3)
failed to wear the proper uniform many times and (4) showed inferior supervisory
skills. Petitioner failed to satisfactorily refute these substantiated allegations.
Taking all this in its entirety, respondent Middleby was clearly justified to end its
employment relationship with petitioner.
WHEREFORE, the petition is hereby DENIED.
G.R. No. 150660 July 30, 2002
CALS POULTRY SUPPLY CORPORATION and DANILO YAP, petitioners,
vs.
ALFREDO ROCO and CANDELARIA ROCO, respondents.
KAPUNAN, J .:
For our resolution is the motion for reconsideration of the Court's minute
Resolution dated April 1, 2002, denying the petition for review filed by CALS
Poultry Supply Corporation (hereinafter referred to as CALS) of the Court of
Appeal's decision in favor of herein private respondents Alfredo Roco and
20

Candelaria Roco. The Court of Appeals reversed the decision of the National
Labor Relations Commission affirming the Labor Arbiter's decision which
dismissed private respondents' complaint for illegal dismissal against CALS.
Private respondents filed a comment on the motion for reconsideration as
required by the Court.1wphi1.nt
CALS Poultry Supply Corporation is engaged in the business of selling dressed
chicken and other related products and managed by Danilo Yap.
1

On March 15, 1984, CALS hired Alfredo Roco as its driver. On the same date,
CALS hired Edna Roco, Alfredo's sister, as a helper in the dressing room of
CALS.
2
On May 16, 1995, it hired Candelaria Roco, another sister, as helper,
3

also at its chicken dressing plant on a probationary basis.
On March 5, 1996, Alfredo Roco and Candelaria Roco filed a complaint for illegal
dismissal against CALS and Danilo Yap alleging that Alfredo and Candelaria
were illegally dismissed on January 20, 1996 and November 5, 1996,
respectively.
4
Both also claimed that they were underpaid of their wages.
5
Edna
Roco, likewise, filed a complaint for illegal dismissal, alleging that on June 26,
1996, she was reassigned to the task of washing dirty sacks and for this reason,
in addition to her being transferred from night shift to day time duties, which she
considered as management act of harassment, she did not report for work.
6

According to Alfredo Roco, he was dismissed on January 20, 1996 when he
refused to accept P30,000.00 being offered to him by CALS' lawyer, Atty. Myra
Cristela A. Yngcong, in exchange for his executing a letter of voluntary
resignation. On the part of Candelaria Roco, she averred that she was
terminated without cause from her job as helper after serving more than six (6)
months as probationary employee.
The Labor Arbiter on April 16, 1998, issued a decision dismissing the complaints
for illegal dismissal for lack of merit. The Labor Arbiter found that Alfredo Roco
applied for and was granted a leave of absence for the period from January 4 to
18, 1996. He did not report back for work after the expiration of his leave of
absence, prompting CALS, through its Chief Maintenance Officer to send him a
letter on March 12, 1996 inquiring if he still had intentions of resuming his work.
Alfredo Roco did not respond to the letter despite receipt thereof, thus, Alfredo
was not dismissed; it was he who unilaterally severed his relation with his
employer.
7

In the case of Candelaria Roco, the Labor Arbiter upheld CALS' decision not to
continue with her probationary employment having been found her unsuited for
the work for which her services were engaged. She was hired on May 16, 1995
and her services were terminated on November 15, 1995.
Edna Roco, according to the Labor Arbiter, began absenting herself on June 25,
1996. She was sent a memo on July 1, 1996 requiring her to report for work
immediately, but she did not respond.
8

In their position papers, the complainants claimed that they were not given their
overtime pay, premium pay for holidays, premium pay for rest days, 13
th
month
pay, allowances. They were also not given their separation pay after their
dismissal. The Labor Arbiter, however, denied their claims, stating that they had
not substantiated the same; on the other hand, CALS presented evidence
showing that complainants received the correct salaries and related benefits.
The National Labor Relations Commission (NLRC), in a decision promulgated on
January 17, 2000, affirmed the judgment of the Labor Arbiter.
On appeal by Alfredo, Candelaria and Edna Roco to the Court of Appeals, the
appellate court set aside the NLRC's decision and ordered reinstatement of
Alfredo and Candelaria Roco to their former positions without loss of seniority of
rights and benefits, with full payment of backwages. However, in the case of
Edna Roco, the Court of Appeals found that her appeal cannot be favorably
considered as she actually abandoned her work without justification.
In holding that Alfredo Roco did not abandon his employment, but was illegally
dismissed, the Court of Appeals ratiocinated:
xxx (P)etitioner Alfredo can not be said to have abandoned his
employment. The failure of Alfredo to report for work was justified
under the circumstances. The positive assertion of petitioner that
when he reported for work on January 20, 1996, he was told that his
services were already terminated is more convincing than the mere
denial of respondent Danilo Yap. Petitioner Alfredo's failure to inquire
from private respondent as to the cause of his dismissal should not
be taken against him. It should be noted that when the secretary of
respondent Danilo Yap conveyed the order of dismissal, Alfredo took
steps to verify the same from the company's Chief Maintenance
Officer Rolando Sibugan who confirmed said order. The filing of the
illegal dismissal case against CALS by petitioner Alfredo negates the
charge of abandonment. Private respondent failed to show that
Alfredo clearly and unequivocably performed overt acts to sever the
employer-employee relationship.
xxx
In termination cases, the burden of proving just and valid cause for
dismissing an employee from his employment rests upon the
employer, and the latter's failure to do so would result in a finding that
the dismissal is unjustified. Abandonment as a just and valid ground
for termination means the deliberate, unjustified refusal of the
employee to resume his employment, and the burden of proof is on
the employer to show a clear, deliberate and unequivocal intent on
the part of the employee to discontinue employment without any
intention of returning. Other than its self-serving claim that petitioner
Alfredo did not report for work, private respondent failed to adduce
other evidence of any overt act of Alfredo showing an intent to
abandon his work. In short, private respondent failed to discharge the
burden.
Moreover, not only was there a lack of a valid cause for the dismissal
of petitioner Alfredo; the record of the case is devoid of any evidence
that Alfredo was afforded his right to due process. If Alfredo was
dismissed because of his abandonment of work, CALS should have
given him a written notice of termination in accordance with Section
2, Rule XVI, Book V of the Omnibus Rules Implementing the Labor
Code which provides:
Section 2. Notice of Dismissal. Any employer who seeks
to dismiss a worker shall furnish him a written notice
stating the particular acts or omission constituting the
grounds for his dismissal. In cases of abandonment of
work, the notice shall be served at the worker's last
known address.
In the instant case, private respondent failed to present as evidence
such notice despite every company's standard policy to record and
file every transaction including notices of termination.
CALS' contention that the letter of Rolando Sibugan inquiring from
Alfredo whether he still had intention of resuming work is a
manifestation of its willingness to reinstate the latter to his former
position, thereby negating any intention on its part to dismiss Alfredo,
is not well-taken. The fact that the employer later made an offer to re-
employ Alfredo did not cure the vice of his earlier arbitrary dismissal.
The wrong had been committed and the harm done. Notably, it was
only after the complaint had been filed that CALS, in a belated
gesture of good will, sought to invite Alfredo back to work. CALS'
sincerity is suspect. Its offer of reinstatement is doubtful since the
same could not have been made if Alfredo had not complained
against it. Whether the offer was sincere or not, the same could not
correct the earlier illegal dismissal of Alfredo. It must be borne in mind
that CALS' offer to reinstate Alfredo was obviously an attempt to
escape liability from having illegally terminated the latter's services.
Hence, CALS incurred liability under the Labor Code from the
moment Alfredo was illegally dismissed, and the liability was not
abated as a result of CALS' offer to reinstate.
9

In ruling in favor of Candelaria Roco, the appellate court held that when her
employment was terminated on November 15, 1995 (she was hired on May 16,
1995), it was four (4) days after she ceased to be a probationary employee and
became a regular employee within the ambit of Article 281 of the Labor Code,
which provides:
ART. 281. Probationary employment. - Probationary employment
shall not exceed six months from the date the employee started
working, unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an employee who has
been engaged on a probationary basis may be terminated for a just
cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer
to the employee at the time of his engagement. An employee who is
allowed to work after a probationary period shall be considered a
regular employee.
21

Not satisfied with the decision of the Court of Appeals, CALS and Danilo Yap
brought before us the petition for review on certiorari claiming that said court
erred in ruling that respondents Alfredo Roco and Candelaria Roco were illegally
dismissed and that they are entitled to any money claims.1wphi1.nt
In considering that Alfredo Roco was illegally dismissed, the Court of Appeals
relied on his allegation that on January 20, 1996 when he reported for work,
following his leave of absence from January 10 to 18, 1996, he learned from
Elvie Acantelado, a secretary of Danilo Yap that he was already separated from
his employment.
Yet, as observed in the decision of the NLRC, he did not even attempt to verify
from Danilo Yap, the owner and general manager of CALS, if his employment
was being terminated and the cause of the termination. Elvie Acantelado denied
vehemently having told Alfredo that he was being dismissed.
Private respondents also stated in their position paper that Alfredo was told by
CALS' lawyer to sign a resignation letter in consideration of P30,000.00.
Strangely, apart from this bare allegation, which finds no corroboration, there is
no explanation when, where and how was the offer made. Alfredo did not
advance any theory why CALS wanted him to resign. Atty. Myra Cristela
Yngcong, counsel for CALS' categorically denied having offered Alfredo Roco
P30,000.00 in exchange for his resignation. She explained that, in fact, she met
Alfredo for the first time when he appeared before the Labor Arbiter on April 23,
1996.
On Alfredo's assertion that CALS' letter dated March 12, 1996 asking him to
report for duty was just an afterthought because it was sent after Alfredo filed his
complaint for illegal dismissal on March 5, 1996. CALS maintains that it came to
know of the complaint filed by the Rocos with the Labor Arbiter only on April 4,
1996 when it received the Notification and Summons dated March 25, 1996 from
the Labor Arbiter.
On the other hand, CALS imputed an ulterior motive for the complaint filed by the
Rocos against it. It said it was manipulated by their relatives Domingo Roco
against whom CALS filed several criminal cases for violation of B.P. Blg. 22 on
account of Domingo Roco's failure to fund the checks he issued as payment for
CALS products he had purchase.
From the facts established, we are of the view that Alfredo Roco has not
established convincingly that he was dismissed. No notice of termination was
given to him by CALS. There is no proof at all, except his self-serving assertion,
that he was prevented from working after the end of his leave of absence on
January 18, 1996. In fact, CALS notified him in a letter dated March 12, 1996 to
resume his work. Both the Labor Arbiter and the NLRC found that Alfredo, as
well as Candelaria Roco, was not dismissed. Their findings of fact are entitled to
great weight.
In Chong Guan Trading v. NLRC, et al.,
10
we held:
After a careful examination of the events that gave rise to the present
controversy as shown by the records, the Court is convinced that
private respondent was never dismissed by the petitioner. Even if it
were true that Mariano Lim ordered private respondent to go and that
at that time he intended to dismiss private respondent, the record is
bereft of evidence to show that he carried out this intention. Private
respondent was not even notified that he had been dismissed. Nor
was he prevented from returning to his work after the October 28
incident. The only thing that is established from the record, and which
is not disputed by the parties, is that private respondent Chua did not
return to his work after his heated argument with the Lim brothers.
xxx
In this case, private respondent's failure to work was due to the
misunderstanding between the petitioner's management and private
respondent. As correctly observed by the Labor Arbiter, private
respondent must have construed the October 28 incident as his
dismissal so that he opted not to work for many days thereafter and
instead filed a complaint for illegal dismissal. On the other hand,
petitioner interpreted private respondent's failure to report for work as
an intentional abandonment. However, there was no intent to dismiss
private respondent since the petitioner is willing to reinstate him. Nor
was there an intent to abandon on the part of private respondent
since he immediately filed a complaint for illegal dismissal soon after
the October 28 incident. It would be illogical for private respondent to
abandon his work and then immediately file an action seeking his
reinstatement xxx. Under these circumstances, it is but fair that each
party must bear his own loss, thus placing the parties on equal
footing.
xxx.
With respect to Candelaria Roco, there is no dispute that she was employed on
probationary basis. She was hired on May 16, 1995 and her services were
terminated on November 15, 1995 due to poor work performance. She did not
measure up to the work standards on the dressing of chicken. The Labor Arbiter
sustained CALS in terminating her employment. The NLRC affirmed the Labor
Arbiter's ruling.
The Court of Appeals did not disagree with the NLRC's finding that Candelaria
was dismissed because she did not qualify as a regular employee in accordance
with the reasonable standards made known by the company to her at the time of
her employment.
11

The standards required by the National Meat Inspection Commission for dressing
plants with Double "AA" Rating to which CALS' employee were brief and with
regard to which Candelaria failed to comply are stated in part in the affidavit
dated March 7, 1997 of Rolly Villaeba, Cold Storage Supervisor of CALS'
Dressing Plant:
xxx
2. As Cold Storage Supervisor of Cals; Dressing Plant, I am
responsible among others, for briefing the new employee on the
workflow in the dressing plant, the nature of their respective jobs
pursuant to the said workflow, and the work standards required of
them by Cals, as well as seeing to it that Cals work standards are
complied with/followed by the employees.
xxx
4. It is the NMIC standard that the dressing of chickens and its parts
must stricly (sic) observe the chronological order of the following
workflow, to wit:
1. Depinning
2. Detoing
3. Removals of entrails/cecum/liver/Gizzard/heart/ Bile
4. Removal of Lungs
5. First Wash
6. Second Wash
7. Third Wash
8. Carcass Quality Control
a. Selection of Carcass
b. Leg Bonding
c. Weighing
d. First Chilling
e. Final Chilling
xxx
9. For the duration of Candelaria Roco's probationary employment,
she failed to comply with Cals standards in the work assigned to her.
First, she frequently failed to observe the allowable inches to be cut,
22

which must only be 1.5 inches, in performing the surgical incision of
the chicken butt, either she cuts it too long, thereby distorting the
appearance of the chickens or she cuts it too short, thereby making it
difficult to remove the chicken parts without damaging these parts;
Second, she frequently mishandles the pull-out of chicken parts, such
that, she damaged said parts; Third, she frequently completes her
assigned tasks in twenty (20) to even twenty-five (25) seconds, over
and above the required time limit, which is only eight (8) to ten (10)
seconds. Resultantly, the chickens/parts which passed through her
hands frequently suffer from premature decomposition/bacterial or
salmonella contamination;
10. By reason of the foregoing, Cals' management deemed it best to
terminate her probationary employment.
xxx
12

However, the Court of Appeals set aside the NLRC ruling on the ground that at
the time Candelaria's services were terminated, she had attained the status of a
regular employee as the termination on November 15, 1995 was effected four (4)
days after the 6-month probationary period had expired, hence, she is entitled to
security of tenure in accordance with Article 281 of the Labor Code.
CALS argues that the Court of Appeals' computation of the 6-month probationary
period is erroneous as the termination of Candelaria's services on November 15,
1995 was exactly on the last day of the 6-month period.
We agree with CALS' contention as upheld by both the Labor Arbiter and the
NLRC that Candelaria's services was terminated within and not beyond the 6-
month probationary period. In Cebu Royal v. Deputy Minister of Labor,
13
our
computation of the 6-month probationary period is reckoned from the date of
appointment up to the same calendar date of the 6
th
month following. Thus, we
held:
The original findings were contained in a one-page order reciting
simply that 'complainant was employed on a probationary period of
employment for six (6) months. After said period, he underwent
medical examination for qualification as regular employee but the
results showed that he is suffering from PTB minimal. Consequently,
he was informed of the termination of his employment by respondent.'
The order then concluded that the termination was 'justified.' That
was all.1wphi1.nt
As there is no mention of the basis of the above order, we may
assume it was the temporary payroll authority submitted by the
petitioner showing that the private respondent was employed on
probation on February 16, 1978. Even supposing that it is not self-
serving, we find nevertheless that it is self-defeating. The six-month
period of probation started from the said date of appointment and so
ended on August 17, 1978, but it is not shown that the private
respondent's employment also ended then; on the contrary, he
continued working as usual. Under Article 282 of the Labor Code, 'an
employee who is allowed to work after a probationary period shall be
considered a regular employee.'' Hence, Pilones was already on
permanent status when he was dismissed on August 21, 1978, or
four days after he ceased to be a probationer.
WHEREFORE, our Resolution of April 1, 2002 denying the petition is hereby
SET ASIDE and another one entered REVERSING the decision of the Court of
Appeals insofar as it ruled in favor of herein respondents and the decisions of the
Labor Arbiter and the National Labor Relations Commission REINSTATED.
G.R. No. 148738 June 29, 2004
MITSUBISHI MOTORS PHILIPPINES CORPORATION, petitioner,
vs.
CHRYSLER PHILIPPINES LABOR UNION and NELSON PARAS, respondents.
D E C I S I O N
CALLEJO, SR., J .:
This is a petition for review on certiorari of the Decision
1
of the Court of Appeals
in CA-GR SP No. 46030 and the Resolution denying the motion for
reconsideration filed by petitioner Mitsubishi Motors Philippines Corporation.
The Antecedents
Mitsubishi Motors Philippines Corporation (MMPC) is a domestic corporation
engaged in the assembly and distribution of Mitsubishi motor vehicles. Chrysler
Philippines Labor Union (CPLU) is a legitimate labor organization and the duly
certified bargaining agent of the hourly-paid regular rank and file employees of
MMPC. Nelson Paras was a member of CPLU. His wife, Cecille Paras, was the
President of the Chrysler Philippines Salaried Employees Union (CPSU).
Nelson Paras was first employed by MMPC as a shuttle bus driver on March 19,
1976. He resigned on June 16, 1982. He applied for and was hired as a diesel
mechanic and heavy equipment operator in Saudi Arabia from 1982 to 1993.
When he returned to the Philippines, he was re-hired as a welder-fabricator at
the MMPC tooling shop from October 3, 1994 to October 31, 1994.
2
On October
29, 1994, his contract was renewed from November 1, 1994 up to March 3,
1995.
3

Sometime in May of 1996, Paras was re-hired on a probationary basis as a
manufacturing trainee at the Plant Engineering Maintenance Department. He and
the new and re-hired employees were given an orientation on May 15, 1996
4
by
Emma P. Aninipot, respecting the companys history, corporate philosophy,
organizational structure, and company rules and regulations, including the
company standards for regularization, code of conduct and company-provided
benefits.
5

Paras started reporting for work on May 27, 1996. He was assigned at the paint
ovens, air make-up and conveyors. As part of the MMPCs policy, Paras was
evaluated by his immediate supervisors Lito R. Lacambacal
6
and Wilfredo J.
Lopez
7
after six (6) months, and received an average rating. Later, Lacambacal
informed Paras that based on his performance rating, he would be regularized.
8

However, the Department and Division Managers, A.C. Velando and H.T.
Victoria,
9
including Mr. Dante Ong,
10
reviewed the performance evaluation made
on Paras. They unanimously agreed, along with Paras immediate supervisors,
that the performance of Paras was unsatisfactory.
11
As a consequence, Paras
was not considered for regularization. On November 26, 1996, he received a
Notice of Termination dated November 25, 1996, informing him that his services
were terminated effective the said date since he failed to meet the required
company standards for regularization.
12

Utilizing the grievance machinery in the collective bargaining agreement, the
CPLU demanded the settlement of the dispute which arose from Paras
termination.
13
The dispute was thereafter submitted for voluntary arbitration, as
the parties were unable to agree on a mutually acceptable solution. CPLU
posited that Paras was dismissed on his one hundred eighty third (183rd) day of
employment, or three (3) days after the expiration of the probationary period of
six (6) months. It was contended that Paras was already a regular employee on
the date of the termination of his "probationary employment."
According to CPLU and Paras, the latters dismissal was an offshoot of the
heated argument during the CBA negotiations between MMPC Labor Relations
Manager, Atty. Carlos S. Cao, on the one hand, and Cecille Paras, the President
of the Chrysler Philippines Salaried Employees Union (CPSU) and Paras wife,
on the other.
On November 3, 1997, the Voluntary Arbitrator (VA) rendered a decision finding
the dismissal of Paras valid for his failure to pass the probationary standards of
MMPC. The dispositive portion of the decision reads:
WHEREFORE, in view of all the foregoing, judgment is hereby
rendered finding the termination of Mr. Paras was valid for cause
his failure to pass the probationary period.
14

The VA declared that hiring an employee on a probationary basis to determine
his or her fitness for regular employment was in accord with the MMPCs
exercise of its management prerogative. The VA pointed out that MMPC had
complied with the requirement of apprising Paras of the standards of
performance evaluation and regularization at the inception of his probationary
employment. The VA agreed with the MMPC that the termination of Paras
employment was effected prior to the expiration of the six-month probationary
period. As to Paras contention that he was already a regular employee before he
was dismissed in 1994 considering that he had an accumulated service of eleven
(11) months, the VA ruled that Paras delay in filing a complaint for regularization
only in 1996, for services rendered in October 1994 to March 1995, militated
against him. The VA stated that Paras dismissal was based on the
unsatisfactory performance rating given to him by his direct supervisors Lito
Lacambacal and Wilfredo Lopez. The VA also found that the alleged heated
argument between Atty. Carlos S. Cao, the Labor Relations Manager of MMPC,
23

and Cecille Paras, the President of CPSU, was irrelevant in the termination of
Paras services.
15

The Case Before the Court of Appeals
Aggrieved, Paras and CPLU filed a petition for review under Rule 43 of the Rules
of Court before the Court of Appeals, docketed as C.A.-G.R. SP No. 46030. They
assigned the following errors:
I
THE VOLUNTARY ARBITRATOR COMMITTED A SERIOUS
ERROR OF LAW IN FAILING TO HOLD THAT THE NOTICE OF
TERMINATION WAS SERVED UPON PETITIONER NELSON
PARAS AFTER HE HAS ALREADY BECOME A REGULAR
EMPLOYEE, HIS PERIOD FOR PROBATION HAVING EXPIRED.
II
THE VOLUNTARY ARBITRATOR SERIOUSLY ERRED AND
GRAVELY ABUSED HIS DISCRETION IN HOLDING THAT
PETITIONER NELSON PARAS SUPPOSED DELAY IN FILING THE
ILLEGAL DISMISSAL CASE WORKED AGAINST HIM.
III
THE VOLUNTARY ARBITRATOR ACTED WITH GRAVE ABUSE OF
DISCRETION AND COMMITTED SERIOUS ERRORS OF FACT
AND LAW IN NOT HOLDING THAT THE PERFORMANCE OF
NELSON PARAS WAS SATISFACTORY AND THAT HIS
DISMISSAL WAS POLITICALLY MOTIVATED.
16

Therein, Paras and CPLU asserted that pursuant to Article 13 of the New Civil
Code, the period of May 27, 1996 to November 26, 1996 consisted of one
hundred eighty-three (183) days. They asserted that the maximum of the
probationary period is six (6) months, which is equivalent to 180 days; as such,
Paras, who continued to be employed even after the 180th day, had become a
regular employee as provided for in Article 282 of the Labor Code. They averred
that as a regular employee, Paras employment could be terminated only for just
or authorized causes as provided for under the Labor Code, and after due notice.
They posited that in the Letter of Termination dated November 25, 1996, the
ground for Paras termination was not among those sanctioned by the Labor
Code; hence, his dismissal was illegal.
Paras and CPLU also stressed that he had already been in the employ of MMPC
from October 3, 1994 to March 3, 1995 as a welder-fabricator in the production of
jigs and fixtures, a function necessary and desirable to the usual business of
MMPC. Such period, in addition to the six-month probationary period, amounted
to eleven (11) months of service, which is sufficient for him to be considered as a
regular employee.
Paras and CPLU averred that the filing of an illegal dismissal complaint only after
his termination in 1996 did not make Paras claim for regularization specious,
since an illegally dismissed employee, like him, has four (4) years within which to
file a complaint.
17

They emphasized that Paras performance evaluation was changed to
unsatisfactory as an off-shoot of the arguments between the latters wife, the
President of the CPSU, and Atty. Carlos S. Cao, one of MMPCs negotiators,
over the provisions in the CBA.
18

The MMPC, for its part, averred that under Article 13 of the New Civil Code,
Paras probationary employment which commenced on May 27, 1996 would
expire on November 27, 1996. Since he received the notice of termination of his
employment on November 25, 1996, the same should be considered to have
been served within the six-month probationary period.
The MMPC asserted that the VA acted correctly in not considering the five-month
period of Paras contractual employment as a welder-fabricator to qualify him for
regularization. It argued that his rating showed that his immediate supervisors, in
tandem with his department head, found his performance unsatisfactory. Thus,
his failure to meet a satisfactory performance rating justified the termination of his
probationary employment.
For its part, the Office of the Solicitor General (OSG), in representation of
Voluntary Arbitrator Danilo Lorredo, agreed that Parasand CPLUs allegation,
that the notice of termination was served on Paras 183rd day, was erroneous.
The OSG opined that the six-month probationary period was to expire on
November 27, 1996 and since Paras was served such notice on November 25,
1996, his employment was deemed terminated within the six-month probationary
period. It posited that the failure of Paras to get a satisfactory performance rating
justified the termination of his probationary employment, and that the inclusion of
his five-month contractual employment as welder-fabricator did not qualify him for
regular employment.
Finally, the OSG contended that the appointment of a probationary employee to
a regular status is voluntary and discretionary on the part of the employer.
In a Decision promulgated on September 13, 2000, the CA reversed the ruling of
the Voluntary Arbitrator, the dispositive portion of which is herein quoted:
WHEREFORE, the petition is GRANTED. The Decision of public
respondent, dated November 3, 1997, is REVERSED and SET
ASIDE. In lieu thereof, judgment is hereby entered declaring
Mitsubishi Motors Phils. Corporations dismissal of Nelson Paras as
ILLEGAL and ORDERING the former to reinstate Paras to his former
position without loss of seniority rights and other privileges.
Conformably with the latest pronouncement of the Supreme Court on
backwages, supra, Mitsubishi Motors Phils. Corporation is further
ORDERED to pay Paras full backwages (without qualifications or
deductions), inclusive of allowances, and his other benefits or their
monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
Petitioners claims for attorneys fees, moral and exemplary damages
are, nevertheless, DENIED for lack of sufficient basis. No costs.
19

The CA agreed with Paras and CPLUs interpretation that six (6) months is
equivalent to one hundred eighty (180 days) and that computed from May 27,
1996, such period expired on November 23, 1996. Thus, when Paras received
the letter of termination on November 26, 1996, the same was served on the
183rd day or after the expiration of the six-month probationary period. The CA
stated that since he was allowed to work beyond the probationary period, Paras
became a regular employee. Hence, his dismissal must be based on the just and
authorized causes under the Labor Code, and in accordance with the two-notice
requirement provided for in the implementing rules. The appellate court
concluded that for MMPCs failure to show that Paras was duly notified of the
cause of his dismissal, the latter was illegally dismissed; hence, his actual
reinstatement without loss of seniority rights and the payment of backwages up
to the time of his reinstatement were in order.
Dissatisfied, the MMPC filed a motion for reconsideration of the decision, alleging
that the CA erred in holding that the six-month probationary period which
commenced on May 27, 1996, expired on November 23, 1996.
The MMPC contended that the reinstatement of Paras to his former position had
become moot and academic because it had retrenched approximately seven
hundred (700) employees as a result of its financial losses in 1997. It posited that
the payment of full backwages should only be computed up to February 1998,
the date when MMPC effected the first phase of its retrenchment program.
The CA denied the motion in a Resolution dated June 18, 2001.
20

The Present Petition
Undaunted, the MMPC, now the petitioner, filed this instant petition, alleging as
follows:
A.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
REVERSING THE 3 NOVEMBER 1997 DECISION OF THE
HONORABLE VA DANILO LORREDO, AND IN FINDING THAT
RESPONDENT PARAS (WAS) ILLEGALLY DISMISSED AND
ORDERING HIS REINSTATEMENT.
B.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
ORDERING THE REINSTATEMENT OF PARAS WITH FULL
24

BACKWAGES DESPITE THE CHANGE IN THE FINANCIAL
CIRCUMSTANCES OF THE COMPANY.
C.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT THE SIX-MONTH PROBATIONARY PERIOD OF
PARAS WHICH STARTED ON 27 MAY 1996 HAD EXPIRED 23
NOVEMBER 1996.
21

The petitioner asserts that the CA erred in ruling that respondent Paras was
already a regular employee when he was served the notice of termination. Citing
Article 13 of the New Civil Code, the petitioner argued that the six-month
probationary period should be computed as follows:
May 27-31 = 4 days
Jun(e) 1-30 = 1 month (30 days)
July 1-31 = 1 month (30 days)
Aug(.) 1-31 = 1 month (30 days)
Sept(.) 1-30 = 1 month (30 days)
Oct(.) 1-31 = 1 month (30 days)
Nov(.) 1-26 = 26 days
22

Hence, according to the petitioner, when the termination letter was served on
November 26, 1996, Paras was still a probationary employee. Considering that
he did not qualify for regularization, his services were legally terminated. As
such, the CA erred in ordering his reinstatement and the payment of his
backwages.
According to the petitioner, even assuming that respondent Paras was a regular
employee when he was dismissed, his reinstatement had already become moot
and academic because of the retrenchment program effected as a result of the
business losses it had suffered in the year 1997. Respondent Paras, who was
employed only in May 27, 1996, would have been included in the first batch of
employees retrenched in February of 1998, in accordance with the "last in first
out policy" embedded in the CBA. The petitioner further contends that Paras
backwages should be computed only up to February of 1998.
In their comment on the petition, the respondents argue that the CA was correct
in concluding that the termination letter was served on respondent Paras one
hundred eighty third (183rd) day of employment with the petitioner, asserting that
six (6) months is equivalent to one hundred eighty (180) days. Since respondent
Paras was employed on May 27, 1996, the 180th day fell on November 23, 1996.
Thus, respondent Paras was already a regular employee when the termination
letter was served on him. Consequently, his dismissal should be based on the
just or authorized causes provided for by the Labor Code, and after proper
notice.
The respondents, likewise, contend that the petitioner cannot raise new and
unsubstantiated allegations in its petition at bar.
The Issues
The issues for resolution are the following: (a) whether or not respondent Paras
was already a regular employee on November 26, 1996; (b) whether or not he
was legally dismissed; (c) if so, whether or not his reinstatement had been
rendered moot and academic; and, (d) whether or not his backwages should be
computed only up to February of 1998.
The Courts Ruling
The petition is partially granted.
At the outset, we must stress that only errors of law are generally reviewed by
this Court in petitions for review on certiorari of CA decisions.
23
Questions of fact
are not entertained.
24
This Court is not a trier of facts and, in labor cases, this
doctrine applies with greater force. Factual questions are for labor tribunals to
resolve.
25
The findings of fact of quasi-judicial bodies like the National Labor
Relations Commission (NLRC), are accorded with respect, even finality, if
supported by substantial evidence.Particularly when passed upon and upheld by
the Court of Appeals, such findings are binding and conclusive upon the
Supreme Court and will not normally be disturbed.
26

However, when the findings of the NLRC and the Court of Appeals are
inconsistent with each other, there is a need to review the records to determine
which of them should be preferred as more conformable to the evidentiary
facts.
27
Considering that the CAs findings of fact clash with those of the
Voluntary Arbitrator, this Court is compelled to go over the records of the case,
as well as the submissions of the parties.
28

Regularization of Employment
Indeed, an employer, in the exercise of its management prerogative, may hire an
employee on a probationary basis in order to determine his fitness to perform
work.
29
Under Article 281 of the Labor Code, the employer must inform the
employee of the standards for which his employment may be considered for
regularization. Such probationary period, unless covered by an apprenticeship
agreement, shall not exceed six (6) months from the date the employee started
working. The employees services may be terminated for just cause or for his
failure to qualify as a regular employee based on reasonable standards made
known to him.
30

Respondent Paras was employed as a management trainee on a probationary
basis. During the orientation conducted on May 15, 1996, he was apprised of the
standards upon which his regularization would be based. He reported for work on
May 27, 1996. As per the companys policy, the probationary period was from
three (3) months to a maximum of six (6) months.
Applying Article 13 of the Civil Code,
31
the probationary period of six (6) months
consists of one hundred eighty (180) days.
32
This is in conformity with paragraph
one, Article 13 of the Civil Code, which provides that the months which are not
designated by their names shall be understood as consisting of thirty (30) days
each. The number of months in the probationary period, six (6), should then be
multiplied by the number of days within a month, thirty (30); hence, the period of
one hundred eighty (180) days.
As clearly provided for in the last paragraph of Article 13, in computing a period,
the first day shall be excluded and the last day included. Thus, the one hundred
eighty (180) days commenced on May 27, 1996, and ended on November 23,
1996. The termination letter dated November 25, 1996 was served on
respondent Paras only at 3:00 a.m. of November 26, 1996. He was, by then,
already a regular employee of the petitioner under Article 281 of the Labor Code.
The Legality of The Dismissal
An employee cannot be dismissed except for just or authorized cause as found in
the Labor Code and after due process.
33
The following grounds would justify the
dismissal of an employee:
(a) Serious misconduct or willful disobedience by the employee of the
lawful orders of the employer or representative in connection with his
work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the
person of his employer or of any immediate member of his family or
his duly authorized representative; and
(e) Other causes analogous to the foregoing.
34

The basis for which respondent Paras services were terminated was his alleged
unsatisfactory rating arising from poor performance. It is a settled doctrine that
the employer has the burden of proving the lawfulness of his employees
dismissal. The validity of the charge must be clearly established in a manner
consistent with due process.
35

Under Article 282 of the Labor Code, an unsatisfactory rating can be a just cause
for dismissal only if it amounts to gross and habitual neglect of duties. Gross
negligence has been defined to be the want or absence of even slight care or
25

diligence as to amount to a reckless disregard of the safety of person or property.
It evinces a thoughtless disregard of consequences without exerting any effort to
avoid them.
36
A careful perusal of the records of this case does not show that
respondent Paras was grossly negligent in the performance of his duties.
The company policy provides the following rule in performance evaluation:
The performance rating sheet must be accomplished by the
immediate supervisor, then reviewed by the Department Head, and
concurred by the Division Head. The Personnel Manager likewise
must note all submitted performance sheets.
Once the rating sheet has gone through this standard procedure, the
immediate supervisor shall discuss the results of the performance
rating with the employee. The discussion/conference may be done in
the presence of the Department Head. This is to emphasize the point
that the employee is given due importance especially in matters
pertaining to his development as a person and employee.
37

In the present case, the immediate supervisor of respondent Paras gave him an
average performance rating and found him fit for regularization.
38
Thereafter, his
immediate supervisor and the department head reviewed the said rating, which
was duly noted by the personnel manager. However, in a complete turn around,
the petitioner made it appear that after the performance evaluation of respondent
Paras was reviewed by the department and division heads, it was unanimously
agreed that the respondents performance rating was unsatisfactory, making him
unfit for regularization.
There is no showing that respondent Paras was informed of the basis for the
volte face of the management group tasked to review his performance rating. His
immediate supervisor even told him that he had garnered a satisfactory rating
and was qualified for regularization, only to later receive a letter notifying him that
his employment was being terminated.
Considering that respondent Paras was not dismissed for a just or authorized
cause, his dismissal from employment was illegal. Furthermore, the petitioners
failure to inform him of any charges against him deprived him of due process.
Clearly, the termination of his employment based on his alleged unsatisfactory
performance rating was effected merely to cover up and "deodorize" the illegality
of his dismissal.
Reinstatement and Backwages
The normal consequences of illegal dismissal are reinstatement without loss of
seniority rights and the payment of backwages computed from the time the
employees compensation was withheld from him.
39
Since respondent Paras
dismissal from employment is illegal, he is entitled tore instatement and to be
paid backwages from the time of his dismissal up to the time of his actual
reinstatement.
The petitioner asserts that assuming respondent Paras was illegally dismissed,
his reinstatement had become moot and academic because of its retrenchment
program which was effected beginning February 1998. The petitioner posits that
even if respondent Paras had become a regular employee by November 26,
1996, he would have been included in the first phase of its retrenchment
program, pursuant to the "last in first out policy" embedded in the CBA. Hence,
the petitioner concludes, the payment of backwages should be computed up to
February of 1998.
The respondents, for their part, aver that the petitioner is proscribed from alleging
new circumstances and allegations of fact, particularly on financial reverses,
before the Court of Appeals and the Voluntary Arbitrator.
We do not agree with the respondents.
A cursory examination of the records shows that the petitioner could not raise its
retrenchment program as an issue before the VA, because it was implemented
only in February 1998, when the case was already in the CA. However, we note
that the petitioner did not raise the same in its comment to the petition. The
petitioner asserted the matter only in its October 20, 2000 motion for
reconsideration of the decision of the CA, where it alleged that the retrenchment
program was effected to arrest the continuing business losses resulting from the
financial reverses it experienced in 1997.
Nevertheless, it is not denied that because of the petitioners losses, it retrenched
seven hundred (700) employees. Business reverses or losses are recognized by
law as an authorized cause for termination of employment. Still, it is an essential
requirement that alleged losses in business operations must be proven
convincingly. Otherwise, such ground for termination would be susceptible to
abuse by scheming employers, who might be merely feigning business losses or
reverses in their business ventures to ease out employees.
40
Retrenchment is an
authorized cause for termination of employment which the law accords an
employer who is not making good in its operations in order to cut back on
expenses for salaries and wages by laying off some employees. The purpose of
retrenchment is to save a financially ailing business establishment from
eventually collapsing.
41

In this case, the petitioner submitted in the CA its financial statements for 1996,
1997 and 1998
42
as well as its application for retrenchment. In its Statements of
Income and Unappropriated Retained Earning, it was shown that in 1996, the
parent company of the petitioner had a net income of P467,744,285. In 1997, it
had a net loss of P29,253,511.
43
In 1998, its net loss, after effecting retrenchment
and closing several plants, was arrested and dropped to P8,156,585.
44
This
shows that even after the retrenchment, the petitioner MMPC still suffered net
losses.
In 1996, the petitioners current assets amounted to P5,381,743,576; it increased
to P8,033,932,745
45
in 1997, while in 1998, it was reduced to P5,053,874,359.
46

This shows that the petitioners assets acquired in 1997 diminished in 1998. The
figures for Current Liabilities are consistent with the movement of current assets
for 1997 and 1998.
In 1996, the petitioner incurred current liabilities of P1,966,445,401 which
increased to P5,088,990,117
47
in 1997 and decreased to P2,880,259,811
48
in
1998. To reduce its losses, the petitioner had to dispose of some of its current
assets to cover the increased liability incurred in 1997, and had to resort to
borrowings in 1998. The continuity of losses which started in 1997 is further
illustrated in the figures on retained earnings for 1996, 1997 and 1998. In 1996,
retained earnings stood at P1,838,098,175,
49
which decreased to
P994,942,628
50
in 1997 and further decreased to P592,614,548
51
in 1998.
The petitioners losses in 1997 and 1998 are not insignificant. It is beyond cavil
then, that the serious and actual business reverses suffered by the petitioner
justified its resort to retrenchment of seven hundred (700) of its employees.
The records show that the petitioner informed the Department of Labor and
Employment of its plight and intention to retrench employees as a result of the
shutdown of its plants.
52
The termination of the five hundred thirty-one (531)
affected employees were made effective a month from receipt of the termination
letter mailed on February 25, 1998.
53

In accordance with the CBA between MMPC and CPLU, employees who were
recently hired were the ones retrenched. Considering that respondent Paras had
just been regularized on November 24, 1996, he would have been included
among those who had been retrenched had he not been dismissed.
The unfavorable financial conditions of the petitioner may not justify
reinstatement. However, it is not a sufficient ground to deny backwages to
respondent Paras who was illegally dismissed.
54
Considering that notices of
retrenchment were mailed on February 25, 1998 and made effective one month
therefrom, respondent Paras should be paid full backwages from the date of his
illegal dismissal up to March 25, 1998. Pursuant to Article 283 of the Labor Code,
he should be paid separation pay equivalent to one (1) month salary, or to at
least one-half month pay for every year of service, whichever is higher, a fraction
of at least six months to be considered as one (1) year.
55

IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED.
The September 13, 2000 Decision of the Court of Appeals in CAGR SP No.
46030 is hereby AFFIRMED WITH MODIFICATIONS. The petitioner is
ORDERED to pay respondent Nelson Paras separation pay equivalent to one (1)
month, or to at least one-half (1/2) month pay for every year of service,
whichever is higher, a fraction of at least six (6) months to be considered as one
year; and to pay full backwages, computed from the time of his dismissal up to
March 25, 1998. That portion of the decision of the Court of Appeals directing the
reinstatement of the respondent Paras is DELETED.
G.R. No. 192416 March 23, 2011
GRANDTEQ INDUSTRIAL STEEL PRODUCTS, INC., ABELARDO
GONZALES,
1
RONALD A. DE LEON,
2
NOEL AGUIRRE, FELIX ARPIA, and
NICK EUGENIO, Petitioners,
vs.
ANNALIZA M. ESTRELLA, Respondent.
26

D E C I S I O N
NACHURA, J .:
This petition for review on certiorari under Rule 45 of the Rules of Court assails
the Decision
3
and the Resolution
4
of the Court of Appeals (CA), respectively
dated November 26, 2009 and May 17, 2010.
The Facts
Petitioner Grandteq Industrial Steel Products, Inc. (Grandteq), a domestic
corporation engaged in the sale and distribution of welding electrodes, alloy
steels, aluminum and copper alloys,
5
hired respondent Annaliza Estrella
(Estrella) on November 15, 2001, as a sales engineer.
6

Abelardo M. Gonzales (Gonzales), Ronald A. de Leon (De Leon), Noel Aguirre
(Aguirre), Felix Arpia (Arpia), and Nick Eugenio (Eugenio) are officers of
Grandteq.
7

Sometime in January 2004, Grandteq and Estrella entered into a
Purchase/Assignment of Car Agreement,
8
whereby the former undertook to
purchase a car for Estrella, who would in turn refund the purchase price to
Grandteq in 100 monthly installments. The agreement likewise stated that the
"company shall retain the ownership of the car until the car loan is fully paid." To
complement the terms of the agreement, Estrella executed a Promissory Note.
9

When Estrella defaulted in her payments, Grandteq instructed her on September
15, 2004 to leave the car in the office premises.
10
Estrella failed to abide by the
companys directive;
11
hence, on September 18, 2004, Grandteq sent her
another memorandum requiring her to explain her "insubordination."
12

In her reply to the memorandum, Estrella asserted that she had already paid the
P50,000.00 downpayment for the vehicle, and that Grandteq had no valid cause
to demand its surrender.
13

Estrella also had claims against the company. On September 17, 2004, she filed
a complaint for recovery of sales commissions, allowances, and other benefits
before the Labor Arbiter (LA).
14
The complaint alleged that Grandteq refused to
release her sales commissions and incentives.
15
She submitted a computation of
such claims to the LA on October 21, 2004.
16

Meanwhile, on September 20, 2004, Estrella filed an application for leave of
absence, and subsequently, submitted a medical certificate recommending that
she rest for three (3) weeks. Grandteq denied her application; nonetheless, she
went on leave of absence effective September 22, 2004 until October 14, 2004.
17

On October 1, 2004, Estrella tried to withdraw her salary for the period
September 15 to 30, 2004 from an Automated Teller Machine. To her dismay,
she discovered that her salary was not remitted by Grandteq.
18
Thus, on October
4, 2004, she amended her complaint to include nonpayment of salary. She
likewise imputed illegal deduction of expanded withholding tax against
Grandteqs officers.
19

On October 15, 2004, Estrella went to the office of Grandteq to report for work,
but the security guard refused her entry, allegedly upon the behest of Grandteqs
vice-president, De Leon.
20
Aggrieved, respondent again amended her complaint
to include illegal dismissal as one of her causes of action. She also demanded
for the payment of moral damages and attorneys fees.
21

Traversing the complaint, Grandteq averred that Estrella was validly dismissed
because she abandoned her job when she did not report for work for three weeks
despite the disapproval of her leave application; that she committed
insubordination when she failed to obey an official order directing her to return a
company vehicle; that she violated the confidence and trust reposed in her by the
company when she negotiated in her personal capacity with a client, Philex
Mining Corporation, at the time when she was allegedly sick; and that she failed
to attend the administrative hearing initiated by the company on October 29,
2004; thus, Grandteq deemed her to have waived her right to be heard. Estrella
was furnished with a Notice of Termination
22
on November 12, 2004, indicating
that she was being dismissed for gross and habitual neglect of duty and fraud or
willful breach of trust. Grandteq denied any outstanding sales commissions or
incentives due Estrella.
23

The LA
24
ruled in favor of Estrella and held that Grandteq had no justifiable cause
to terminate her employment. Abandonment could not be inferred from her
absence sans any overt act showing that she did not want to work anymore.
Besides, she went on sick leave with a prior notice to Grandteq. The immediate
filing of a complaint for illegal dismissal also negated a finding of abandonment.
Lastly, the LA decreed that the notice of termination served to Estrella on
November 12, 2004 was evidently a mere afterthought to cast a
semblance of validity to her termination. As shown in the notice, as early as
September 22, 2004, Grandteq already decided to terminate her services even
before she could present her side and refute the charges against her.
Estrellas money claims were granted, but no specific computation was made as
to her claim for sales commissions and incentives. The decretal portion of the
LAs decision
25
reads:
WHEREFORE, the foregoing considered, judgment is hereby rendered declaring
[respondent] Annaliza M. Estrella to have been illegally dismissed. [Petitioners]
are ordered to reinstate [respondent] to her former position without loss of
seniority rights and other benefits and to her full backwages from the time her
compensation was withheld up to the time of her actual reinstatement. Likewise[,
petitioner] Grandteq Industrial Steel Products[,] Inc. is ordered to pay the
monetary awards pursuant to the computation of the Computation Unit of this
Commission forming part of the records of this case, as follows:
Basic Wage P 6,000.00
Allowance 5,000.00
P11,000.00
Backwages: 9/22/04 8/30/06
P11,000 x 23.30 mos. 256,300.00
13th Month Pay
of P256,300 21,358.33
SILP: P11,000/26 x 5/12 x 23.30.mos. 4,107.37
281,765.71
Moral Damages 10,000.00 10,000.00
Exemplary Damages 10,000.00 20,000.00
301,765.71
Atty.s Fees 28,176.57
TOTAL P329,942.28
Other claims are dismissed for lack of merit.
SO ORDERED.
26

Both parties appealed to the National Labor Relations Commission (NLRC).
Grandteq insisted that Estrellas dismissal was based on valid grounds and was
implemented with due process.
27

Estrella, on the other hand, claimed that her unpaid sales commissions,
incentives, and salary for the period September 15 to 30, 2004 should be
indicated in the dispositive portion of the LAs decision. She further prayed that
Grandteq officers Gonzales, De Leon, Aguirre, Arpia, and Eugenio be declared
solidarily liable with the company.
28

The NLRC found that Grandteq had valid grounds to dismiss Estrella since her
allegation of illegal termination was not sufficiently substantiated by the security
guards mere refusal to allow her entry into Grandteqs premises. Estrellas act of
27

going on leave without Grandteqs approval constituted gross and habitual
neglect of duty. The NLRC decreed that Grandteq merely failed to comply with
procedural due process. Hence, the LAs decision was modified as follows:
WHEREFORE, premises considered, the appeals are PARTLY GRANTED and
the Decision dated July 31, 2006 is MODIFIED finding that respondents has (sic)
valid ground to terminate complainant but for failure to comply with the standards
of due process, respondents shall indemnify complainant in the amount of
P20,000.00 and ordering that the records of this case be remanded to the office
of origin for the disposition of complainants money claims. The award of
damages and attorneys fees were not raised on appeal, hence, STANDS.
SO ORDERED.
29

Grandteq sought recourse with the CA through a petition for certiorari. On
November 26, 2009, the CA reinstated the LAs Decision and
ordered the case remanded to the LA for the resolution of Estrellas claims for
commissions and allowances, viz.:
ACCORDINGLY, the assailed June 11, 2008 Resolution is SET ASIDE. The
Labor Arbiters July 31, 2006 Decision is REINSTATED with the directive that it
must further hear and decide on petitioners claims for sales commission,
allowances and other benefits, car incentive,
S.A. (Salesman Advance) commission, and other incentives" as specified in her
second amended complaint.
SO ORDERED.
30

Petitioners interposed the present recourse when the CA denied
31
their motion
for reconsideration.
32
They proffer this sole argument:
THE HONORABLE COURT OF APPEALS HAD DECIDED A QUESTION OF
SUBSTANCE IN PATENT DISREGARD OF THE PROVISIONS OF THE LABOR
CODE, THE PHILIPPINE CONSTITUTION, THE RULES OF COURT, AND
PERTINENT DECISIONS OF THIS HONORABLE SUPREME COURT.
33

We deny the petition.
The petition hinges on the question of whether the acts imputed to Estrella
constitute gross and habitual neglect of duty and loss of trust and confidence so
as to provide just cause for her dismissal.
At the outset, we stress that these issues involve questions of fact, the
determination of which entails an evaluation of the evidence on record. As a
general rule, purely factual questions are not passed upon in petitions for review
under Rule 45, for this Court does not try facts but merely relies on
the expert findings of labor tribunals whose statutory function is to determine the
facts. In the present case, however, in view of the conflicting factual findings of
the LA and the CA on one hand, and the NLRC on the other, the Court is
constrained to resolve the factual question at hand.
34

A judicious review of the records discloses that Grandteq failed to prove that
Estrella was justifiably dismissed due to lack of trust and confidence and gross
and habitual neglect of duty.
Grandteq attributes loss of trust and confidence to the following acts: (1)
insubordination when Estrella disobeyed a company directive ordering her to
return a company vehicle; and (2) transacting, in her personal capacity, with a
client of Grandteq.
Insubordination, as a just cause for the dismissal of an employee, necessitates
the concurrence of at least two requisites: (1) the employee's assailed conduct
must have been willful, that is, characterized by a wrongful and perverse attitude;
and (2) the order violated must have been reasonable, lawful, made known to the
employee, and must pertain to the duties which he had been engaged to
discharge.
35
The facts of the case do not show the presence of the second
requisite. The failure to return the vehicle and the Purchase/Assignment of Car
Agreement, from which Grandteq derives its claim of ownership over the car, had
no relation at all to the discharge of respondents duties as a sales engineer.
There is likewise no basis for a finding of legitimate loss of confidence because
Grandteq failed to show that Estrella held a position of trust and confidence. Firm
is the rule that loss of confidence as a just cause for termination of employment
is premised on the fact that the employee concerned holds a position of trust and
confidence, where greater trust is placed by management and from whom
greater fidelity to duty is correspondingly expected.
36
The betrayal of this trust is
the essence of the offense for which an employee is penalized.
37

The job description of Estrella dated February 19, 2004, signed by her and by
Grandteqs Vice President for Sales, Aguirre, and approved by De Leon, Vice-
President for Administration, and Gonzales, President, confirms these findings:
- Should report to office 8:00 a.m. regularly from Monday to Saturday.
- Submit itinerary/report of client visits.
- Will receive allowance of P5,000.00 monthly.
- 100Km radius, excess would be reimburse[d] to the office. (Gasoline
Allowance)
- Allowed North visit at least one week/month allocation of P800.00. (This covers
board, transportation and meal allowance)
- Failure to report in office will be deducted to (sic) salary.
38

Grandteq also imputes gross and habitual neglect of duty when Estrella was
absent from work for three (3) weeks without an approved application for leave.
Gross negligence connotes want of care in the performance of one's duties, while
habitual neglect implies repeated failure to perform one's duties for a period of
time, depending on the circumstances. The single or isolated act of negligence
does not constitute a just cause for the dismissal of an employee.
39

We find no gross and habitual neglect in this case, and we quote with approval
the following disquisition of the CA:
Grandteq does not dispute receiving Estrellas Medical Certificate and worse,
proffers no explanation why it did not act on Estrellas application for sick leave.
And even if, arguendo, such absences were established, still, they would merit at
best mere suspension from service. The penalty of dismissal would be too harsh,
considering that apparently, management had no complaint as regards Estrellas
quality of work.
Moreso that it is settled that an employees excusable and unavoidable absences
does (sic) not amount to an abandonment of his employment. Abandonment, as
a just and valid ground for termination, means the deliberate, unjustified refusal
of an employee to resume his employment. For abandonment to be a valid
ground for dismissal, two (2) elements must be proved: the intention of an
employee to abandon, coupled with an overt act from which it may be inferred
that the employee has no more intention to resume his work. The burden of proof
is on the employer to show a clear and deliberate intent on the part of the
employee to discontinue employment.
Here, these elements were not established. Estrellas actions after her absences
negate an intent to abandon her job. Estrellas application for sick leave, the
Medical Certificate she secured, and the letter from her lawyer that she was
going on sick leave and more importantly, her going back to the company
premises on October 15, 2004 all indicate her intention to resume work after
the lapse of the period of her leave of absence. It would be the height of inequity
and injustice to declare Estrella to have abandoned her job on the mere pretext
that her sick leave application was not approved. Especially so that prior to her
dismissal, she had no record of infraction of company rules for which she could
have been sanctioned by either warning, reprimand or suspension. Besides, her
filing of an illegal dismissal case clearly contradicts Grandteqs allegation that
she abandoned her job.
40

We must stress anew that, in termination cases, the burden rests upon the
employer to show that the dismissal of an employee is for just cause, and failure
to do so would mean that the dismissal is not justified.
41
Failure to discharge that
burden would mean that the dismissal is not justified and, therefore, illegal.
42

Grandteq miserably failed to discharge this onus, and Estrellas termination from
employment was, thus, illegal.
28

Anent Estrellas claim for sales commissions and incentives, we agree with the
uniform ruling of the NLRC and the CA that the matter needs the further
assessment of the LA, thus:
A review of the records shows that Estrellas money claims referred to unpaid
sales commissions, allowances and other incentives. And while the Labor Arbiter
held:
"As regards the monetary claims, this office is in accord with the complainant that
respondents have failed to establish by sufficient with evidence (sic) that
complainant is not entitled thereto. This is based on the principle that each party
must prove his affirmatives (sic) allegations. On the other hand, complainant has
adduced evidence of her entitlement thereto. (Annex B is B-10)."
The court notes, however, that he failed to assess and weigh the parties
arguments on the matter. In fact, the Labor Arbiters decision did not touch upon
or rule on Grandteqs arguments and evidence against Estrellas claims. As a
result, the NLRC and this Court have admittedly no basis in affirming his findings.
Verily, the resolution of Estrellas entitlement to her commissions and allowances
requires conscientious evaluation and assessment of the evidence adduced by
the parties, which is best undertaken by the Labor Arbiter. It thus is just proper
that said money claims be remanded to the Labor Arbiter for proper evaluation of
the evidence of both parties.
43

Lastly, we deem it imperative to resolve the question of whether Grandteqs
officers, who are co-petitioners herein, are solidarily liable with the company.
There is solidary liability when the obligation expressly so states, when the law
so provides, or when the nature of the obligation so requires.
44
In MAM Realty
Development Corporation v. NLRC,
45
the solidary liability of corporate officers in
labor disputes was discussed in this wise:
A corporation, being a juridical entity, may act only through its directors, officers
and employees. Obligations incurred by them, acting as such corporate agents,
are not theirs but the direct accountabilities of the corporation they represent.
True, solidary liabilities may at times be incurred but only when exceptional
circumstances warrant such as, generally, in the following cases:
1. When directors and trustees or, in appropriate cases, the officers of a
corporation
(a) vote for or assent to patently unlawful acts of the corporation;
(b) act in bad faith or with gross negligence in directing the corporate
affairs;
x x x x
In labor cases, for instance, the Court has held corporate directors and officers
solidarily liable with the corporation for the termination of employment of
employees done with malice or in bad faith.
From the decisions of the LA, the NLRC, and the CA, there is no indication that
Estrellas dismissal was effected with malice or bad faith on the part of
Grandteqs officers. Their liability for Estrellas illegal dismissal, the consequential
monetary award arising from such dismissal and the other money claims
awarded in the LAs decision, as correctly affirmed by the CA, could thus only be
joint, not solidary.1awphil This pronouncement does not extend to Estrellas
claims for commissions, allowances, and incentives, as the same are still subject
to the LAs scrutiny.
WHEREFORE, foregoing considered, the petition is hereby DENIED, and the
November 26, 2009 Decision and the May 17, 2010 Resolution of the Court of
Appeals are AFFIRMED.
G.R. No. 171189 March 9, 2011
LORES REALTY ENTERPRISES, INC., LORENZO Y. SUMULONG III,
Petitioners,
vs.
VIRGINIA E. PACIA, Respondent.
D E C I S I O N
MENDOZA, J .:
This is a petition for review on certiorari under Rule 45 of the Rules of Court filed
by petitioners Lores Realty Enterprises, Inc. (LREI) and Lorenzo Y. Sumulong III
(Sumulong) seeking to reverse and set aside the November 25, 2005 Decision
1

of the Court of Appeals (CA), in CA-G.R. SP No. 59975, which affirmed the
Decision
2
of the National Labor Relations Commission (NLRC), in NLRC NCR
CA No. 019221-99 (RAB-IV-10-10492-98-RI).
The Facts
In 1982, respondent Virginia E. Pacia (Pacia) was hired by LREI. At the time of
her dismissal, she was the assistant manager and officer-in-charge of LREIs
Accounting Department under the Finance Administrative Division.
On October 28, 1998, LREIs acting general manager, petitioner Sumulong,
through Ms. Julie Ontal, directed Pacia to prepare Check Voucher No. 16477
worth P150,000.00 as partial payment for LREIs outstanding obligation to the
Bank of the Philippine Islands-Family Bank (BPI-FB). Pacia did not immediately
comply with the instruction. After two repeated directives, Pacia eventually
prepared Check No. 0000737526 in the amount of P150,000.00. Later,
Sumulong again directed Pacia to prepare Check Voucher No. 16478 in the
amount of P175,000.00 to settle the balance of LREIs outstanding indebtedness
with BPI-FB. Pacia once again was slow in obeying the order. Due to the
insistence of Sumulong, however, Pacia eventually prepared Check No.
0000737527 in the amount of P175,000.00.
To explain her refusal to immediately follow the directive, Pacia reasoned out that
the funds in LREIs account were not sufficient to cover the amounts to be
indicated in the checks.
The next day, October 29, 1998, Sumulong issued a memorandum
3
ordering
Pacia to explain in writing why she refused to follow a clear and lawful directive.
On the same day, Pacia replied in writing and explained that her initial refusal to
prepare the checks was due to the unavailability of funds to cover the amounts
and that she only wanted to protect LREI from liability under the Bouncing
Checks Law.
4

On November 6, 1998, Pacia received a notice of termination
5
stating, among
others, that she was being dismissed because of her willful disobedience and
their loss of trust and confidence in her.
Pacia then filed a Complaint for Unfair Labor Practice due to Harassment,
Constructive Dismissal, Moral and Exemplary Damages
6
against LREI and
Sumulong. Subsequently, Pacia filed an Amended Complaint
7
to include the
charges of illegal dismissal and non-payment of salaries.
On March 11, 1999, the Labor Arbiter (LA) rendered a decision
8
finding that the
dismissal of Pacia was for a just and valid cause but ordering payment of what
was due her. The dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered, as follows:
1. Ordering respondent corporation to pay complainant her:
a. unpaid salary P12,550.00
b. proportionate 13th month pay 20,916.66

Total P33,466.66
2. Dismissing the complaint for constructive/illegal dismissal, unfair
labor practice, and claim for payment of damages and attorneys fees
for lack of merit.
SO ORDERED.
29

On appeal, the NLRC in its March 31, 2000 Decision
9
reversed the LAs Decision
and found LREI and Sumulong guilty of illegal dismissal. Pertinent portions of the
NLRC decision including the decretal portion read:
A careful perusal of the records reveal[s] that complainants actuation herein
cannot in any manner be construed as an act of insubordination. Neither can we
classify it as an example of wilful disobedience by the employee of the lawful
order of her employer in connection with her work.
Records show that Check No. 0000737527 in the amount of P175,000.000
bounced as shown by the Return Checks Advice issued by the BPI family Bank
on 3 November 1998.
x x x x x x x x x
The above evidence clearly reveal[s] that there were no sufficient funds to cover
the check which the acting Manager directed complainant to prepare. However,
complainant nevertheless prepared Check Nos. 737527 and 737526 on 28
October 1998 and also corrected Check Vouchers Nos. 16477 and 16478 on 28
October 1998.
We take note and give due merit to complainants explanation in her reluctance
to issue checks against insufficient funds which was to protect the company and
its signatories from liabilities resulting from issuance of bounced checks.
Complainants initial refusal was good intentioned. Respondents also insist that
complainant refused to follow a lawful directive of her superior officer to make
some corrections on the vouchers. However, we cannot see how an order to
prepare a check at the time when there was no sufficient fund to cover the same
can be classified as a lawful directive of the acting Manager.
x x x x x x x x x
Considering that complainant was illegally dismissed, the law provides that her
reinstatement with payment of full backwages would be in order. However,
mindful of the animosity and strained relations between parties emanating from
this litigation we declare that in lieu of reinstatement, separation pay may be
given to complainant, at the rate of one (1) month pay for every year of service.
WHEREFORE, the Decision dated 11 March 1999 is MODIFIED. Respondent
Lores Realty Ent., Inc. is held liable for illegally dismissing complainant and is
directed to pay her, in addition to her unpaid salary and proportionate 13th month
pay for the year 1998, the following:
1. Backwages
(6 November 1998 to 15 March 2000)
Basic Pay P25,100.00 x 16.3 mos. = P409,130.00
13th Month Pay P409,130.00 / 12 = 34,094.17
P443,224.17
2. Separation Pay (one month for every year of service)
(18 years)
P25,100 x 18 =

P451,800.00

P895,024.17
vvvvvvvvvvvvv
The other findings are AFFIRMED.
SO ORDERED.
10

Dissatisfied, LREI and Sumulong elevated the case to the CA by way of a
petition for certiorari under Rule 65 of the Rules of Court asserting grave abuse
of discretion on the part of the NLRC in reversing the LAs finding that Pacia was
guilty of wilful disobedience of a lawful order of her employer in connection with
her work.
On November 25, 2005, the CA found no merit in the petition and dismissed it.
11

Thus:
WHEREFORE, the petition is DISMISSED. Public respondents Decision dated
31 March 2000 and the Resolution dated 15 May 2000 in NLRC-RAB IV-10-
10492-98-RI, CA NO. 019221-99, are AFFIRMED.
SO ORDERED.
The CA held that LREI and Sumulong failed to establish with substantial
evidence that the dismissal of Pacia was for a just cause. It found that Pacias
initial reluctance to obey the orders of her superiors was for a good reason - to
shield the company from liability in the event that the checks would be
dishonored for insufficiency of funds.
Hence, the petition.
THE ISSUES
1. WHETHER OR NOT THE INSTANT PETITION FOR
REVIEW RAISES QUESTIONS OF LAW.
2. WHETHER OR NOT THE COURT OF APPEALS
ERRED IN AFFIRMING THE RULING OF THE NLRC
THAT THE ESTABLISHED FACTS JUSTIFY
RESPONDENTS TERMINATION FROM
EMPLOYMENT.
3. WHETHER OR NOT THE AWARD OF BACKWAGES
MUST BE COMPUTED FROM THE TIME OF
DISMISSAL UNTIL FINALITY OF THE DECISION
ESTABLISHING HER ILLEGAL DISMISSAL.
12

In essence, the main issue to be resolved is whether Pacias dismissal was
justified under the circumstances.
The Court finds no merit in the petition.
At the outset, it must be emphasized that the issues raised in this petition are
questions of fact which are not proper subjects of an appeal by certiorari. Well-
settled is the rule that under Rule 45 of the Rules of Court, only questions of law
may be raised before this Court.
13
A disharmony between the factual findings of
the LA and the NLRC, however, opens the door to a review by this Court. Factual
findings of administrative agencies are not infallible and will be set aside when
they fail the test of arbitrariness. Moreover, when the findings of the NLRC
contradict those of the LA, this Court, in the exercise of its equity jurisdiction, may
look into the records of the case and re-examine the questioned findings.
14

LREI and Sumulong argue that Pacias refusal to obey the directives of
Sumulong was a "manifest intent not to perform the function she was engaged to
discharge."
15
They are of the position that Pacias claim of "good intentions" in
refusing to prepare the checks was a mere afterthought. They stress that the
instruction to prepare a check despite the absence of sufficient funds to cover the
same was, nevertheless, a lawful order.
On the other hand, Pacia counters that her initial reluctance to prepare the
checks, which she knew were not sufficiently funded, cannot "be characterized
as wrongful or perverse attitude."
16
In her view, the directive to prepare the
checks at the time it was not sufficiently funded was not a lawful order
contemplated in Article 282 of the Labor Code. It was an unlawful directive
because it asked for the preparation of a check despite the fact that the account
had no sufficient funds to cover the same. She further explained that she did not
comply with the directive in order to protect Sumulong and LREI from any liability
in the event that the checks would be dishonored upon presentment for payment
for insufficiency of funds.
Article 282 of the Labor Code enumerates the just causes for which an employer
may terminate the services of an employee, to wit:
ARTICLE 282. Termination by employer. An employer may terminate an
employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of
the lawful orders of his employer or representative in connection
with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative;
30

(d) Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or his
duly authorized representative; and
(e) Other causes analogous to the foregoing. [Emphasis supplied]
The offense of willful disobedience requires the concurrence of two (2) requisites:
(1) the employees assailed conduct must have been willful, that is characterized
by a wrongful and perverse attitude; and (2) the order violated must have been
reasonable, lawful, made known to the employee and must pertain to the duties
which he had been engaged to discharge.
17

Let it be noted at this point that the Court finds nothing unlawful in the directive of
Sumulong to prepare checks in payment of LREIs obligations. The availability or
unavailability of sufficient funds to cover the check is immaterial in the physical
preparation of the checks.1avvphi1
Pacias initial reluctance to prepare the checks, however, which was seemingly
an act of disrespect and defiance, was for honest and well intentioned reasons.
Protecting LREI and Sumulong from liability under the Bouncing Checks Law
18

was foremost in her mind. It was not wrongful or willful. Neither can it be
considered an obstinate defiance of company authority. The Court takes into
consideration that Pacia, despite her initial reluctance, eventually did prepare the
checks on the same day she was tasked to do it.
The Court also finds it difficult to subscribe to LREI and Sumulongss contention
that the reason for Pacias initial reluctance to prepare the checks was a mere
afterthought considering that "check no. 0000737527 under one of the check
vouchers she reluctantly prepared, bounced when it was deposited."
19
Pacias
apprehension was justified when the check was dishonored. This clearly affirms
her assertion that she was just being cautious and circumspect for the companys
sake. Thus, her actuation should not be construed as improper conduct.
In finding for Pacia, the Court is guided by the time-honored principle that if doubt
exists between the evidence presented by the employer and the employee, the
scales of justice must be tilted in favor of the latter. The rule in controversies
between a laborer and his master distinctly states that doubts reasonably arising
from the evidence, or in the interpretation of agreements and writing, should be
resolved in the former's favor.
20

WHEREFORE, the petition is DENIED.
G.R. No. 164939 June 6, 2011
SAMAHAN NG MGA MANGGAGAWA SA HYATT (SAMASAH-NUWHRAIN),
Petitioner,
vs.
HON. VOLUNTARY ARBITRATOR BUENAVENTURA C. MAGSALIN and
HOTEL ENTERPRISES OF THE PHILIPPINES, INC., Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - x
G.R. No. 172303
SAMAHAN NG MGA MANGGAGAWA SA HYATT (SAMASAH-NUWHRAIN),
Petitioner,
vs.
HOTEL ENTERPRISES OF THE PHILIPPINES, INC., Respondent.
D E C I S I O N
VILLARAMA, JR., J .:
Before this Court are two consolidated petitions filed by petitioner Samahan ng
mga Manggagawa sa Hyatt-NUWHRAIN-APL under Rule 45 of the 1997 Rules
of Civil Procedure, as amended. The first petition, docketed as G.R. No. 164939,
assails the Resolutions dated October 3, 2003
1
and August 13, 2004
2
of the
Court of Appeals (CA) in CA-G.R. SP No. 78364, which dismissed petitioners
petition for review at the CA for being the wrong remedy. The second petition,
docketed as G.R. No. 172303, assails the Decision
3
dated December 16, 2005
and Resolution
4
dated April 12, 2006 of the CA in CA-G.R. SP No. 77478,
modifying the judgment of the Voluntary Arbitrator in NCMB-NCR-CRN-07-008-
01.
The antecedent facts are as follows:
Petitioner Samahan ng mga Manggagawa sa Hyatt-NUWHRAIN-APL is a duly
registered union and the certified bargaining representative of the rank-and-file
employees of Hyatt Regency Manila, a five-star hotel owned and operated by
respondent Hotel Enterprises of the Philippines, Inc. On January 31, 2001,
Hyatts General Manager, David C. Pacey, issued a Memorandum
5
informing all
hotel employees that hotel security have been instructed to conduct a thorough
bag inspection and body frisking in every entrance and exit of the hotel. He
enjoined employees to comply therewith. Copies of the Memorandum were
furnished petitioner.
On February 3, 2001, Angelito Caragdag, a waiter at the hotels Cafe Al Fresco
restaurant and a director of the union, refused to be frisked by the security
personnel. The incident was reported to the hotels Human Resources
Department (HRD), which issued a Memorandum
6
to Caragdag on February 5,
2001, requiring him to explain in writing within forty-eight (48) hours from notice
why no disciplinary action should be taken against him. The following day, on
February 6, 2001, Caragdag again refused to be frisked by the security
personnel. Thus, on February 8, 2001, the HRD issued another Memorandum
7

requiring him to explain.
On February 14, 2001, the HRD imposed on Caragdag the penalty of reprimand
for the February 3, 2001 incident, which was considered a first offense, and
suspended him for three days for the February 6, 2001 incident, which was
considered as a second offense.
8
Both penalties were in accordance with the
hotels Code of Discipline.
Subsequently, on February 22, 2001, when Mike Moral, the manager of Hyatts
Cafe Al Fresco and Caragdags immediate superior, was about to counsel two
staff members, Larry Lacambacal and Allan Alvaro, at the training room,
Caragdag suddenly opened the door and yelled at the two with an enraged look.
In a disturbing voice he said, "Ang titigas talaga ng ulo nyo. Sinabi ko na sa inyo
na huwag kayong makikipagusap sa management habang ongoing pa ang
kaso!" (You are very stubborn. I told you not to speak to management while the
case is ongoing!) Moral asked Caragdag what the problem was and informed him
that he was simply talking to his staff. Moral also told Caragdag that he did not
have the right to interrupt and intimidate him during his counseling session with
his staff.
On February 23, 2001, Moral issued a Memorandum
9
requiring Caragdag to
explain his actions in the training room. Caragdag submitted his written
explanation on February 25, 2001
10
narrating that he was informed by someone
that Lacambacal and Alvaro were requesting for his assistance because Moral
had invited them to the training room. Believing that he should advise the two
that they should be accompanied by a union officer to any inquisition, he went to
the training room. However, before he could enter the door, Moral blocked him.
Thus, he told Lacambacal and Alvaro that they should be assisted by a union
representative before giving any statement to management. Caragdag also
prayed that Moral be investigated for harassing union officers and union
members.
On February 28, 2001, Moral found the explanations unsatisfactory. In a
Memorandum
11
issued on the same date, Moral held Caragdag liable for
Offenses Subject to Disciplinary Action (OSDA) 3.01 of the hotels Code of
Discipline, i.e., "threatening, intimidating, coercing, and provoking to a fight your
superior for reasons directly connected with his discharge of official duty." Thus,
Caragdag was imposed the penalty of seven days suspension in accordance
with the hotels Code of Discipline.
Still later, on March 2, 2001, Caragdag committed another infraction. At 9:35 a.m.
on the said date, Caragdag left his work assignment during official hours without
prior permission from his Department Head. He was required to submit an
explanation, but the explanation
12
he submitted was found unsatisfactory. On
March 17, 2001, Moral found

Caragdag liable for violating OSDA 3.07, i.e.,
"leaving work assignment during official working hours without prior permission
from the department head or immediate superior," and suspended him for three
days.
13

Because of the succession of infractions he committed, the HRD also required
Caragdag to explain on May 11, 2001 why the hotels OSDA 4.32 (Committing
offenses which are penalized with three [3] suspensions during a 12-month
period) should not be enforced against him.
14
An investigation board was formed
after receipt of Caragdags written explanation, and the matter was set for
hearing on May 19, 2001. However, despite notice of the scheduled hearing,
both Caragdag and the Union President failed to attend. Thereafter, the
investigating board resolved on the said date to dismiss Caragdag for violation of
OSDA 4.32.
15
Caragdag appealed but the investigating board affirmed its
resolution after hearing on May 24, 2001.
31

On June 1, 2001, the hotel, through Atty. Juancho A. Baltazar, sent Caragdag a
Notice of Dismissal,
16
the pertinent portion of which reads:
Based on the findings of the Investigation Board dated May 19, 2001 which was
approved by the General Manager Mr. David Pacey on the same day and which
did not merit any reversal or modification after the hearing on your appeal on
May 24, 2001, the penalty of DISMISSAL is therefore affirmed to take effect on
June 1, 2001.
Caragdags dismissal was questioned by petitioner, and the dispute was referred
to voluntary arbitration upon agreement of the parties. On May 6, 2002, the
Voluntary Arbitrator rendered a decision,
17
the dispositive portion of which reads:
WHEREFORE, premises considered, this Arbiter rules that the three separate
suspensions of Mr. Caragdag are valid, his dismissal is legal and OSDA 4.32 of
Hyatts Code of Discipline is reasonable.
However, for humanitarian considerations, Hyatt is hereby ordered to grant
financial assistance to Mr. Caragdag in the amount of One Hundred Thousand
Pesos (PhP100,000.00).
In finding the three separate suspensions of Caragdag valid, the Voluntary
Arbitrator reasoned that the union officers and members had no right to breach
company rules and regulations on security and employee discipline on the basis
of certain suspicions against management and an ongoing CBA negotiation
standoff. The Voluntary Arbitrator also found that when Caragdag advised
Lacambacal and Alvaro not to give any statement, he threatened and intimidated
his superior while the latter was performing his duties. Moreover, there is no
reason why he did not arrange his time-off with the Department Head concerned.
Thus, Caragdag was validly dismissed pursuant to OSDA 4.32 of Hyatts Code of
Discipline, which states that an employee who commits three different acts of
misconduct within a twelve (12)-month period commits serious misconduct.
Petitioner sought reconsideration of the decision while respondent filed a motion
for partial reconsideration. However, the Voluntary Arbitrator denied both motions
on May 26, 2003.
18

On August 1, 2003, petitioner assailed the decision of the Voluntary Arbitrator
before the CA in a petition for certiorari which was docketed as CA-G.R. SP No.
78364.
19
As mentioned at the outset, the CA dismissed the petition outright for
being the wrong remedy. The CA explained:
Rule 43, Section 5 of the 1997 Rules of Civil Procedure explicitly provides that
the proper mode of appeal from judgments, final orders or resolution of voluntary
arbitrators is through a Petition for Review which should be filed within fifteen
(15) days from the receipt of notice of judgment, order or resolution of the
voluntary arbitrator.
Considering that petitioner intends this petition to be a Petition for Certiorari, the
Court hereby resolves to dismiss the petition outright for being an improper mode
of appeal.
Even if this Court treats the instant petition as a Petition for Review, still the Court
has no alternative but to dismiss the same for having been filed out of time. As
admitted by the petitioner it received the Order dated 26 May 2003 denying their
motion for reconsideration on 02 June 2003. The fifteen (15) day period within
which to appeal through a Petition for Review is until June 17, 2003. The
petitioner filed the present petition on August 1, 2003, way beyond the
reglementary period provided for by the Rules.
20

Petitioner duly filed a motion for reconsideration of the dismissal, but the motion
was denied by the CA. Thus, petitioner filed before this Court a petition for review
on certiorari which was docketed as G.R. No. 164939.
In the meantime, on June 30, 2003, respondent also filed a petition for review
21

with the CA on the ground that the Voluntary Arbitrator committed a grievous
error in awarding financial assistance to Caragdag despite his finding that the
dismissal due to serious misconduct was valid. On December 16, 2005, the CA
promulgated a decision in CA-G.R. SP. No. 77478 as follows:
WHEREFORE, the Decision dated May 6, 2002 of Voluntary Arbitrator
Buenaventura C. Magsalin is AFFIRMED with MODIFICATION by DELETING
the award of financial assistance in the amount of P100,000.00 to Angelito
Caragdag.
SO ORDERED.
22

In deleting the award of financial assistance to Caragdag, the CA cited the case
of Philippine Commercial International Bank v. Abad,
23
which held that the grant
of separation pay or other financial assistance to an employee dismissed for just
cause is based on equity and is a measure of social justice, awarded to an
employee who has been validly dismissed if the dismissal was not due to serious
misconduct or causes that reflected adversely on the moral character of the
employee. In this case, the CA agreed with the findings of the Voluntary
Arbitrator that Caragdag was validly dismissed due to serious misconduct.
Accordingly, financial assistance should not have been awarded to Caragdag.
The CA also noted that it is the employers prerogative to prescribe reasonable
rules and regulations necessary or proper for the conduct of its business or
concern, to provide certain disciplinary measures to implement said rules and to
ensure compliance therewith.
Petitioner sought reconsideration of the decision, but the CA denied the motion
for lack of merit. Hence, petitioner filed before us a petition for review on
certiorari docketed as G.R. No. 172303.
Considering that G.R. Nos. 164939 and 172303 have the same origin, involve
the same parties, and raise interrelated issues, the petitions were consolidated.
Petitioner raises the following issues:
In G.R. No. 164939
THE COURT OF APPEALS ERRED IN DISMISSING OUTRIGHT THE
PETITION FOR CERTIORARI ON THE GROUND THAT THE SAME IS AN
IMPROPER MODE OF APPEAL.
24

In G.R. No. 172303
THE COURT OF APPEALS ERRED IN DELETING THE AWARD OF
FINANCIAL ASSISTANCE IN THE AMOUNT OF P100,000.00 TO ANGELITO
CARAGDAG.
25

The issues for our resolution are thus two-fold: first, whether the CA erred in
dismissing outright the petition for certiorari filed before it on the ground that the
same is an improper mode of appeal; and second, whether the CA erred in
deleting the award of financial assistance in the amount of P100,000.00 to
Caragdag.
On the first issue, petitioner argues that because decisions rendered by voluntary
arbitrators are issued under Title VII-A of the Labor Code, they are not covered
by Rule 43 of the 1997 Rules of Civil Procedure, as amended, by express
provision of Section 2 thereof. Section 2, petitioner points out, expressly provides
that Rule 43 "shall not apply to judgments or final orders issued under the Labor
Code of the Philippines." Hence, a petition for certiorari under Rule 65 is the
proper remedy for questioning the decision of the Voluntary Arbitrator, and
petitioner having availed of such remedy, the CA erred in declaring that the
petition was filed out of time since the petition was filed within the sixty (60)-day
reglementary period.
On the other hand, respondent maintains that the CA acted correctly in
dismissing the petition for certiorari for being the wrong mode of appeal. It
stresses that Section 1 of Rule 43 clearly states that it is the governing rule with
regard to appeals from awards, judgments, final orders or resolutions of voluntary
arbitrators. Respondent contends that the voluntary arbitrators authorized by law
include the voluntary arbitrators appointed and accredited under the Labor Code,
as they are considered as included in the term "quasi-judicial instrumentalities."
Petitioners arguments fail to persuade.
In the case of Samahan ng mga Manggagawa sa Hyatt-NUWHRAIN-APL v.
Bacungan,
26
we repeated the well-settled rule that a decision or award of a
voluntary arbitrator is appealable to the CA via petition for review under Rule 43.
We held that:
The question on the proper recourse to assail a decision of a voluntary arbitrator
has already been settled in Luzon Development Bank v. Association of Luzon
Development Bank Employees, where the Court held that the decision or award
of the voluntary arbitrator or panel of arbitrators should likewise be appealable to
the Court of Appeals, in line with the procedure outlined in Revised
Administrative Circular No. 1-95 (now embodied in Rule 43 of the 1997 Rules of
32

Civil Procedure), just like those of the quasi-judicial agencies, boards and
commissions enumerated therein, and consistent with the original purpose to
provide a uniform procedure for the appellate review of adjudications of all quasi-
judicial entities.
Subsequently, in Alcantara, Jr. v. Court of Appeals, and Nippon Paint Employees
Union-Olalia v. Court of Appeals, the Court reiterated the aforequoted ruling. In
Alcantara, the Court held that notwithstanding Section 2 of Rule 43, the ruling in
Luzon Development Bank still stands. The Court explained, thus:
"The provisions may be new to the Rules of Court but it is far from being a new
law. Section 2, Rules 42 of the 1997 Rules of Civil Procedure, as presently
worded, is nothing more but a reiteration of the exception to the exclusive
appellate jurisdiction of the Court of Appeals, as provided for in Section 9, Batas
Pambansa Blg. 129, as amended by Republic Act No. 7902:
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, including the Securities and Exchange
Commission, the Employees Compensation Commission and the Civil Service
Commission, except those falling within the appellate jurisdiction of the Supreme
Court in accordance with the Constitution, the Labor Code of the Philippines
under Presidential Decree No. 442, as amended, the provisions of this Act and of
subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948.
"The Court took into account this exception in Luzon Development Bank but,
nevertheless, held that the decisions of voluntary arbitrators issued pursuant to
the Labor Code do not come within its ambit x x x"
Furthermore, Sections 1, 3 and 4, Rule 43 of the 1997 Rules of Civil Procedure,
as amended, provide:
SECTION 1. Scope. - This Rule shall apply to appeals from judgments or final
orders of the Court of Tax Appeals and from awards, judgments, final orders or
resolutions of or authorized by any quasi-judicial agency in the exercise of its
quasi-judicial functions. Among these agencies are the x x x, and voluntary
arbitrators authorized by law.
x x x x
SEC. 3. Where to appeal. - An appeal under this Rule may be taken to the Court
of Appeals within the period and in the manner therein provided, whether the
appeal involves questions of fact, of law, or mixed questions of fact and law.
SEC. 4. Period of appeal. - The appeal shall be taken within fifteen (15) days
from notice of the award, judgment, final order or resolution, or from the date of
its last publication, if publication is required by law for its effectivity, or of the
denial of petitioners motion for new trial or reconsideration duly filed in
accordance with the governing law of the court or agency a quo. x x x. (Emphasis
supplied.)
Hence, upon receipt on May 26, 2003 of the Voluntary Arbitrators Resolution
denying petitioners motion for reconsideration, petitioner should have filed with
the CA, within the fifteen (15)-day reglementary period, a petition for review, not
a petition for certiorari.
Petitioner insists on a liberal interpretation of the rules but we find no cogent
reason in this case to deviate from the general rule. Verily, rules of procedure
exist for a noble purpose, and to disregard such rules in the guise of liberal
construction would be to defeat such purpose. Procedural rules are not to be
disdained as mere technicalities. They may not be ignored to suit the
convenience of a party. Adjective law ensures the effective enforcement of
substantive rights through the orderly and speedy administration of justice. Rules
are not intended to hamper litigants or complicate litigation. But they help provide
for a vital system of justice where suitors may be heard following judicial
procedure and in the correct forum. Public order and our system of justice are
well served by a conscientious observance by the parties of the procedural
rules.
27

On the second issue, petitioner argues that Caragdag is entitled to financial
assistance in the amount of P100,000 on humanitarian considerations. Petitioner
stresses that Caragdags infractions were due to his being a union officer and his
acts did not show moral depravity. Petitioner also adds that, while it is true that
the award of financial assistance is given only for dismissals due to causes
specified under Articles 283 and 284 of the Labor Code, as amended, this Court
has, by way of exception, allowed the grant of financial assistance to an
employee dismissed for just causes based on equity.
Respondent on the other hand, asserts that the CA correctly deleted the award of
financial assistance erroneously granted to Caragdag considering that he was
found guilty of serious misconduct and other acts adversely reflecting on his
moral character. Respondent stresses that Caragdags willful defiance of the
hotels security policy, disrespect and intimidation of a superior, and unjustifiable
desertion of his work assignment during working hours without permission,
patently show his serious and gross misconduct as well as amoral character.
28

Again, petitioners arguments lack merit.
The grant of separation pay or some other financial assistance to an employee
dismissed for just causes is based on equity.
29
In Phil. Long Distance Telephone
Co. v. NLRC,
30
we ruled that severance compensation, or whatever name it is
called, on the ground of social justice shall be allowed only when the cause of the
dismissal is other than serious misconduct or for causes which reflect adversely
on the employees moral character. The Court succinctly discussed the propriety
of the grant of separation pay in this wise:
We hold that henceforth separation pay shall be allowed as a measure of social
justice only in those instances where the employee is validly dismissed for
causes other than serious misconduct or those reflecting on his moral character.
Where the reason for the valid dismissal is, for example, habitual intoxication or
an offense involving moral turpitude, like theft or illicit sexual relations with a
fellow worker, the employer may not be required to give the dismissed employee
separation pay, or financial assistance, or whatever other name it is called, on
the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of
rewarding rather than punishing the erring employee for his offense. And we do
not agree that the punishment is his dismissal only and that the separation pay
has nothing to do with the wrong he has committed. Of course it has. Indeed, if
the employee who steals from the company is granted separation pay even as he
is validly dismissed, it is not unlikely that he will commit a similar offense in his
next employment because he thinks he can expect a like leniency if he is again
found out. This kind of misplaced compassion is not going to do labor in general
any good as it will encourage the infiltration of its ranks by those who do not
deserve the protection and concern of the Constitution.
The policy of social justice is not intended to countenance wrongdoing simply
because it is committed by the underprivileged. At best it may mitigate the
penalty but it certainly will not condone the offense. Compassion for the poor is
an imperative of every humane society but only when the recipient is not a rascal
claiming an undeserved privilege. Social justice cannot be permitted to be refuge
of scoundrels any more than can equity be an impediment to the punishment of
the guilty. Those who invoke social justice may do so only if their hands are clean
and their motives blameless and not simply because they happen to be poor.
This great policy of our Constitution is not meant for the protection of those who
have proved they are not worthy of it, like the workers who have tainted the
cause of labor with the blemishes of their own character.
31

Here, Caragdags dismissal was due to several instances of willful disobedience
to the reasonable rules and regulations prescribed by his employer. The
Voluntary Arbitrator pointed out that according to the hotels Code of Discipline,
an employee who commits three different acts of misconduct within a twelve
(12)-month period commits serious misconduct. He stressed that Caragdags
infractions were not even spread in a period of twelve (12) months, but rather in a
period of a little over a month. Records show the various violations of the hotels
rules and regulations were committed by Caragdag. He was suspended for
violating the hotel policy on bag inspection and body frisking. He was likewise
suspended for threatening and intimidating a superior while the latter was
counseling his staff. He was again suspended for leaving his work assignment
without permission. Evidently, Caragdags acts constitute serious
misconduct.1wphi1
In Piedad v. Lanao del Norte Electric Cooperative, Inc.,
32
we ruled that a series of
irregularities when put together may constitute serious misconduct, which under
Article 282 of the Labor Code, as amended, is a just cause for dismissal.
Caragdags dismissal being due to serious misconduct, it follows that he should
not be entitled to financial assistance. To rule otherwise would be to reward him
for the grave misconduct he committed. We must emphasize that social justice is
extended only to those who deserve its compassion.
33

WHEREFORE, the petitions for review on certiorari are DENIED. The October 3,
2003 and August 13, 2004 Court of Appeals Resolutions in CA-G.R. SP No.
33

78364, as well as the Court of Appeals December 16, 2005 Decision and April
12, 2006 Resolution in CA-G.R. SP No. 77478, are AFFIRMED and UPHELD.
With costs against the petitioner.
G.R. No. 172506 July 27, 2011
JERRY MAPILI, Petitioner,
vs.
PHILIPPINE RABBIT BUS LINES, INC./NATIVIDAD NISCE, Respondents.
D E C I S I O N
DEL CASTILLO, J .:
An employees propensity to commit repetitious infractions evinces wrongful
intent, making him undeserving of the compassion accorded by law to labor.
This Petition for Review on Certiorari
1
assails the Decision
2
dated January 16,
2006 and Resolution
3
dated April 6, 2006 of the Court of Appeals (CA) in CA-
G.R. SP No. 89733, which affirmed the Decision
4
dated November 25, 2004 and
Resolution
5
dated February 28, 2005 of the National Labor Relations
Commission (NLRC) finding petitioner Jerry Mapili (petitioner) to have been
dismissed for cause.
Factual Antecedents
Respondent Natividad P. Nisce (Nisce) is the President of respondent Philippine
Rabbit Bus Lines, Inc. (PRBLI), an entity engaged in the transportation business.
On April 7, 1993, PRBLI hired petitioner as bus conductor with a salary of
P510.00 per trip. On October 7, 2001, while on duty en route from Manila to
Alaminos, Pangasinan, petitioner was caught by PRBLIs field inspector
extending a free ride to a lady passenger who boarded at Barangay Magtaking,
Labrador, Pangasinan. Upon order of the field inspector, the lady passenger,
who happened to be the wife of Julio Ricardo, petitioners co-employee and one
of PRBLIs drivers, was immediately issued a passenger ticket for which she paid
P50.00.
6

On October 9, 2001, petitioner was preventively suspended and was directed to
appear in an administrative investigation.
7
Thereafter, a formal hearing was
conducted during which petitioner was given an opportunity to present and
explain his side. Consequently, through a memorandum
8
dated November 9,
2001, petitioner was terminated from employment for committing a serious
irregularity by extending a free ride to a passenger in violation of company rules.
Notably, that was already the third time that petitioner committed said violation.
On February 19, 2002, petitioner filed with the NLRC a Complaint
9
for illegal
dismissal against PRBLI, Nisce, and Ricardo Paras (Paras), PRBLIs General
Manager.
Parties Respective Arguments
Petitioner alleged that his employment was terminated without cause and due
process. He argued that the infraction was only trivial. It was done without malice
and resulted from his honest belief that immediate family members of PRBLIs
employees are entitled to free ride. He argued that his two previous violations of
the same company regulation cannot be considered in the imposition of the
penalty of dismissal since those previous infractions were not too serious. The
first involved a police officer supposedly on official duty who refused to pay for a
passenger ticket, while the second involved a former employee of PRBLI who
misrepresented himself to be a current employee by virtue of a company ID duly
presented. Moreover, he has already been penalized for these previous
violations and to consider them anew would be tantamount to penalizing him
twice for the same offense. Under these circumstances and considering further
his length of service, petitioner advanced that his violations are not sufficient to
merit the penalty of dismissal. Petitioner thus prayed that his dismissal be
declared illegal and that he be awarded separation pay in lieu of reinstatement,
backwages, 13th month pay, damages, attorneys fees and refund of cash bond
in the amount of P5,000.00.
Respondents argued that petitioners admissions during the investigation that he
indeed offered a free ride out of gratitude to the wife of his co-employee and that
it was his third offense, justified his termination considering that his position is
imbued with trust and confidence. They claimed that petitioners failure to collect
fares from the riding public, coupled with his past record of serious offenses
ranging from non-issuance, improper passenger tickets to collecting fares without
issuing tickets, and allowing passengers to board without fare coupons, for which
different penalties have been imposed against him, are grounds for valid
dismissal. Respondents also argued that due process was observed when
petitioner was accorded a chance to defend himself in an investigation conducted
for that purpose. Respondents further disclaimed bad faith, malice, and liability to
petitioners money claims.
Ruling of the Labor Arbiter
In a Decision
10
dated July 2, 2003, the Labor Arbiter held that petitioner had no
intention to defraud the company by his failure to issue a ticket to the wife of a
co-employee as the same was done out of gratitude and under the wrong
impression that she is entitled to such privilege. Besides, the amount of the fare
was subsequently collected from and paid by the passenger. The Labor Arbiter
opined that petitioners actuations merited a less punitive penalty such as
suspension of 30 days which he already served during his preventive
suspension. The Labor Arbiter also found that petitioner was not denied due
process since he was given the opportunity to present his side. As regards Nisce
and Paras, the Labor Arbiter held that they cannot be held personally liable for
lack of bad faith on their part. The dispositive portion of said Decision reads:
PREMISES CONSIDERED, judgment is hereby rendered declaring complainant
Jerry B. Mapili to have been illegally dismissed from employment. Respondent
Philippine Rabbit Bus Lines, Inc. is hereby ordered to reinstate complainant to his
former position or to a similar one without loss of seniority rights and pay him the
following:
a.) Backwages amounting to Php271,320.00;
b.) 13th month pay of Php24,650.00;
c.) Php5,000.00 as refund of bond.
All in the total amount of Php300,970.00.
A detailed computation is attached as Annex A.
SO ORDERED.
11

Ruling of the National Labor Relations Commission
The NLRC, in a Decision
12
dated November 25, 2004 set aside the findings of
the Labor Arbiter upon appeal by respondents. It found that the non-issuance of
a ticket to the lady passenger and failure to collect money due to the company
was a deliberate and intentional act of petitioner which prejudiced the companys
interests. In ruling that petitioners dismissal was for just cause, the NLRC opined
that petitioners past record of committing several acts of misconduct and his
propensity to commit similar infractions do not merit the compassion of law.
Thus, the NLRC disposed of the case as follows:
WHEREFORE, premises considered, the decision under review is hereby,
REVERSED and SET ASIDE, and another entered in its stead, DISMISSING the
complaint for lack of merit.
Respondents are, however, ordered to refund complainants cash bond in the
amount of FIVE THOUSAND PESOS (P5,000.00), and his proportionate 13th
month pay for the year 2001 in the amount of ELEVEN THOUSAND THREE
HUNDRED NINETY Pesos (P11,390.00), or a total amount of SIXTEEN
THOUSAND THREE HUNDRED NINETY Pesos (P16,390.00).
SO ORDERED.
13

Petitioner filed his Motion for Reconsideration
14
which was denied by the NLRC
in a Resolution
15
dated February 28, 2005.
Ruling of the Court of Appeals
Petitioner filed with the CA a petition for certiorari.
16
The CA, in its Decision
17

dated January 16, 2006, however, found no grave abuse of discretion on the part
of the NLRC in ruling that petitioner was validly dismissed. The CA agreed that
petitioner has a history of committing violations of company rules, the last one
being a repeat violation against extending free rides to passengers. This
infraction is considered as a grave offense and serious misconduct which merits
34

the penalty of dismissal. The CA also agreed that there was intent to cheat the
company of its funds.
Petitioners Motion for Reconsideration
18
was likewise denied in the CA
Resolution
19
dated April 6, 2006.
Hence, the instant petition.
Issues
Petitioner raised the following grounds:
I.
THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF
LAW IN NOT HOLDING THAT DISMISSAL FROM EMPLOYMENT
IS NOT [A COMMENSURATE] PENALTY [FOR] THE INFRACTION
COMMITTED AS A MERE ERROR IN JUDGMENT, SUCH AS
PETITIONERS ACT OF EXTENDING A FREE BUS RIDE TO THE
CO-EMPLOYEE BUS DRIVERS WIFE ON THE HONEST BELIEF
THAT AN IMMEDIATE FAMILY MEMBER OF AN EMPLOYEE IN
THE COMPANY IS ENTITLED TO A FREE RIDE;
II.
THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF
LAW IN EQUATING AS PROOF RESPONDENTS MERE
ALLEGATIONS OF VARIOUS PAST INFRACTIONS AGAINST
YOUR PETITIONER; and
III.
THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF
LAW IN NOT HOLDING THAT THE PAST TWO SIMILAR
INFRACTIONS [FOR] WHICH AN EMPLOYEE HAS ALREADY
SUFFERED THE CORRESPONDING PENALTY OF WARNING
AND SUSPENSION, CANNOT BE USED AS X X X
JUSTIFICATION[S] FOR THE EMPLOYEES DISMISSAL FROM
SERVICE.
20

Petitioner asserts that the penalty of dismissal is grossly disproportionate to the
infraction he committed because his act of extending a free ride was not
deliberate but was done on a wrong assumption that immediate family members
of company employees are entitled to free rides. He insists that his past
infractions, unsupported by proof, and his previous two offenses of not issuing
fare tickets to a police officer and former company employee cannot be used as
bases for his termination considering that his actuations for the latter offenses
were justified under the circumstances and that he was already penalized for all
these past violations. It is petitioners view that his infraction merits only a 30-day
suspension, as imposed by the Labor Arbiter.
Our Ruling
We deny the petition.
Petitioners violation of company rules was intentional, willful, serious and a just
cause for dismissal.
Petitioner assails the CAs finding that petitioners non-issuance of a passenger
ticket to the lady passenger is a grave offense, that it was committed with
deliberate intent and a repeat violation of a company rule which merits dismissal.
Petitioner insists that his infraction was merely trivial because he was under the
impression that immediate family members of employees are entitled to free ride.
Petitioner cites Section 13, Article VIII
21
of the Collective Bargaining Agreement
which provides:
Section 13. Free Ride and Passes - All employees covered by this Agreement
shall be provided a free ride in all units of Philippine Rabbit Bus Line, Inc. as
presently practiced. However, members of his/her immediate family shall be
given passes upon request to the COMPANY.
Petitioner insists that his act of extending a free ride is in accordance with the
aforequoted provision and the fact that he may have overlooked the requirement
of passes with respect to immediate family members is not so serious as to
characterize the offense he committed to have been performed with malicious
intent.
We are not persuaded.
The above provision is clear and unequivocal that free rides are available only to
employees of PRBLI. The benefit is not automatically extended to members of
the employees immediate family as passes must first be requested for them.
Petitioner should be conversant of this provision considering his previous
infractions of this same provision for which he was duly penalized. Besides,
petitioners claim of good faith is belied by his testimony to the effect that he
extended a free ride out of gratitude to the wife of a co-employee who assisted
him in his financial troubles. During the administrative investigation conducted on
October 15, 2001, petitioner narrated thus:
Q-9 Why on October 07 you [gave] a free ride to the wife of Driver
Ricardo?
A-9 I did this because I want to pay my gratitude to her, sir.
Q-10 What are your gratitude/s to the woman?
A-10 Many times she [helped] me in my problem especially in
financial, sir.
Q-11 Why [do] you need to pay your gratitude [at] the expense of the
company?
A-11 For what I have done compel [sic] myself to do. Napasubo lang
po ako. I admit this is a grave offense against the company.
Whatever suspension that you may impose to [sic] me I am ready to
accept, sir.
22

Based on this testimony, it is quite apparent that petitioner was aware that the
infraction he committed constituted a grave offense but he still persisted in
committing the same out of gratitude to the passenger. Hence, as correctly found
by the CA, there was deliberate intent on the part of the petitioner to commit the
violation in order to repay a personal debt at the expense of the company.
Petitioner chose to violate company rules for his benefit without regard to his
responsibilities to the company. Also, if not for the inspector who discovered the
incident, the company would have been defrauded by the amount of fare.
It bears stressing that petitioner has been in the employ of PRBLI for more
than eight years already and is a member of the companys labor union. As such,
he ought to know the specific company rules pertaining to his line of work as a
bus conductor. For that matter, his length of service has even aggravated the
resulting consequences of his transgressions. In addition, on April 8, 1994 and
May 3, 1995, he committed similar infractions of extending free ride to a police
officer and a former employee, respectively. These had been brought to the
attention of the petitioner and for which the penalties of relief from duty and
suspension were meted out upon him.
23
Hence, he ought to have known better
than to repeat the same violation as he is presumed to be thoroughly acquainted
with the prohibitions and restrictions against extending free rides. We also cannot
agree with petitioners contention that his infraction was trivial. As a bus
conductor whose duties primarily include the collection of transportation fares,
which is the lifeblood of the PRBLI, petitioner should have exercised the required
diligence in the performance thereof and his habitual failure to exercise the same
cannot be taken for granted. As correctly observed by the CA, petitioners
position is imbued with trust and confidence because it involves handling of
money and failure to collect the proper fare from the riding public constitutes a
grave offense which justifies his dismissal. Moreover, petitioners "series of
irregularities when put together may constitute serious misconduct."
24

Petitioners record of offenses of the same nature as his present infraction
justifies his dismissal.
Petitioners past infractions can be gleaned from his employment record of
offenses which was presented by the respondents. This piece of evidence was
not disputed by petitioner. Hence, petitioner cannot claim that the finding of his
past company infractions was based merely on allegations.
As petitioners employment record shows, this is not the first time that
35

petitioner refused to collect fares from passengers. In fact, this is already the
third instance that he failed to collect fares from the riding public. Although
petitioner already suffered the corresponding penalties for his past misconduct,
those infractions are still relevant and may be considered in assessing his liability
for his present infraction.
25
We thus held in Philippine Rabbit Bus Lines, Inc. v.
National Labor Relations Commission
26
that:
Nor can it be plausibly argued that because the offenses were already given the
appropriate sanctions, they cannot be taken against him. They are relevant in
assessing private respondents liability for the present violation for the purpose of
determining the appropriate penalty. To sustain private respondents argument
that the past violation should not be considered is to disregard the warnings
previously issued to him.1avvphi1
As suspension may not anymore suffice as penalty for the violation done as
shown by petitioners disregard of previous warnings and propensity to commit
the same infraction over the years of his employment, and to deter other
employees who may be wont to violate the same company policy, petitioners
termination from employment is only proper.
WHEREFORE, the petition is DENIED. The Decision dated January 16, 2006
and Resolution dated April 6, 2006 of the Court of Appeals in CA-G.R. SP No.
89733 are AFFIRMED.
G.R. No. 172044 February 06, 2013
CAVITE APPAREL, INCORPORATED and ADRIANO TIMOTEO, Petitioners,
vs.
MICHELLE MARQUEZ, Respondent.
D E C I S I O N
BRION, J .:
We resolve the petition for review on certiorari
1
filed by petitioners Cavite Apparel,
Incorporated ( Cavite Apparel) and Adriano Timoteo to nullify the decision
2
dated
January 23, 2006 and the resolution
3
dated March 23, 2006 of the Court of
Appeals ( CA) in C.A.-G.R. SP No. 89819 insofar as it affirmed the disposition
4
of
the National Labor Relations Commission (NLRC) in NLRC CA No. 029726-01.
The NLRC set aside the decision
5
of Labor Arbiter (LA) Cresencio G. Ramos in
NLRC NCR Case No. RAB-IV-7-12613-00-C dismissing the complaint for illegal
dismissal filed by respondent Michelle Marquez against the petitioners.
The Factual Antecedents
Cavite Apparel is a domestic corporation engaged in the manufacture of
garments for export. On August 22, 1994, it hired Michelle as a regular employee
in its Finishing Department. Michelle enjoyed, among other benefits, vacation
and sick leaves of seven (7) days each per annum. Prior to her dismissal on
June 8, 2000, Michelle committed the following infractions (with their
corresponding penalties):
a. First Offense: Absence without leave (AWOL) on December 6,
1999 written warning
b. Second Offense: AWOL on January 12, 2000 stern warning with
three (3) days suspension
c. Third Offense: AWOL on April 27, 2000 suspension for six (6)
days.
6

On May 8, 2000, Michelle got sick and did not report for work. When she
returned, she submitted a medical certificate. Cavite Apparel, however, denied
receipt of the certificate.
7
Michelle did not report for work on May 15-27, 2000
due to illness. When she reported back to work, she submitted the necessary
medical certificates. Nonetheless, Cavite Apparel suspended Michelle for six (6)
days (June 1-7, 2000). When Michelle returned on June 8, 2000, Cavite Apparel
terminated her employment for habitual absenteeism.
On July 4, 2000, Michelle filed a complaint for illegal dismissal with prayer for
reinstatement, backwages and attorneys fees with the NLRC, Regional
Arbitration Branch No. IV.
The LA Ruling
In a decision dated April 28, 2001,
8
LA Ramos dismissed the complaint. He noted
that punctuality and good attendance are required of employees in the
companys Finishing Department. For this reason, LA Ramos considered
Michelles four absences without official leave as habitual and constitutive of
gross neglect of duty, a just ground for termination of employment. LA Ramos
also declared that due process had been observed in Michelles dismissal, noting
that in each of her absences, Cavite Apparel afforded Michelle an opportunity to
explain her side and dismissed her only after her fourth absence. LA Ramos
concluded that Michelles dismissal was valid.
9

The NLRC Decision
On appeal by Michelle, the NLRC referred the case to Executive LA Vito C. Bose
for review, hearing and report.
10
Adopting LA Boses report, the NLRC rendered
a decision
11
dated May 7, 2003 reversing LA Ramos decision. The NLRC noted
that for Michelles first three absences, she had already been penalized ranging
from a written warning to six days suspension. These, the NLRC declared,
should have precluded Cavite Apparel from using Michelles past absences as
bases to impose on her the penalty of dismissal, considering her six years of
service with the company. It likewise considered the penalty of dismissal too
severe. The NLRC thus concluded that Michelle had been illegally dismissed and
ordered her reinstatement with backwages.
12
When the NLRC denied Cavite
Apparels motion for reconsideration in a resolution
13
dated March 30, 2005,
Cavite Apparel filed a petition for certiorari with the CA to assail the NLRC ruling.
The CA Ruling
Cavite Apparel charged the NLRC with grave abuse of discretion when it set
aside the LAs findings and ordered Michelles reinstatement. It disagreed with
the NLRCs opinion that Michells past infractions could no longer be used to
justify her dismissal since these infractions had already been penalized and the
corresponding penalties had been imposed.
The CA found no grave abuse of discretion on the part of the NLRC and
accordingly dismissed Cavite Apparels petition on January 23, 2006.
14
While it
agreed that habitual absenteeism without official leave, in violation of company
rules, is sufficient reason to dismiss an employee, it nevertheless did not
consider Michelles four absences as habitual. It especially noted that Michelle
submitted a medical certificate for her May 8, 2000 absence, and thus
disregarded Cavite Apparels contrary assertion. The CA explained that
Michelles failure to attach a copy of the medical certificate in her initiatory
pleading did not disprove her claim.
The CA agreed with the NLRC that since Cavite Apparel had already penalized
Michelle for her three prior absences, to dismiss her for the same infractions and
for her May 8, 2000 absence was unjust. Citing jurisprudence, The CA concluded
that her dismissal was too harsh, considering her six years of employment with
Cavite Apparel; it was also a disproportionate penalty as her fourth infraction
appeared excusable.
In its March 23, 2006 resolution,
15
the CA denied Cavite Apparels motion for
reconsideration; hence, Cavite Apparels present recourse.
The Petition
Cavite Apparel imputes grave abuse of discretion against the CA when:
1. it did not find that the NLRC committed grave abuse of disretion in
setting aside the decision of the CA;
2. it failed to consider Michelles four (4) AWOLs over a period of six
months, from December 1999 to May 2000, habitual; and
3. it ruled that the series of violations of company rules committed by
Michelle were already meted with the corresponding penalties.
16

Cavite Apparel argues that it is its prerogative to discipline its employees. It thus
maintains that when Michelle, in patent violation of the companys rules of
discipline, deliberately, habitually, and without prior authorization and despite
warning did not report for work on May 8, 2000, she committed serious
misconduct and gross neglect of duty. It submits that dismissal for violation of
company rules and regulations is a dismissal for cause as the Court stressed in
Northern Motors, Inc., v. National Labor Union, et al.
17

36

The Case for the Respondent
Michelle asserts that her dismissal was arbitrary and unreasonable. For one, she
had only four absences in her six (6) years of employment with Cavite Apparel.
She explains that her absence on May 8, 2000 was justified as she was sick and
had sick leave benefits against which Cavite Apparel could have charged her
absences. Also, it had already sanctioned her for the three prior infractions.
Under the circumstances, the penalty of dismissal for her fourth infraction was
very harsh. Finally, as the CA correctly noted, Cavite Apparel terminated her
services on the fourth infraction, without affording her prior opportunity to explain.
The Courts Ruling
The case poses for us the issue of whether the CA correctly found no grave
abuse of discretion when the NLRC ruled that Cavite Apparel illegally terminated
Michelles employment.
We stress at the outset that, as a rule, the Court does not review questions of
fact, but only questions of law in an appeal by certiorari under Rule 45 of the
Rules of Court.
18
The Court is not a trier of facts and will not review the factual
findings of the lower tribunals as these are generally binding and conclusive.
19

The rule though is not absolute as the Court may review the facts in labor cases
where the findings of the CA and of the labor tribunals are contradictory.
20
Given
the factual backdrop of this case, we find sufficient basis for a review as the
factual findings of the LA, on the one hand, and those of the CA and the NLRC,
on the other hand, are conflicting.
After a careful review of the merits of the case, particularly the evidence
adduced, we find no reversible error committed by the CA when it found no grave
abuse of discretion in the NLRC ruling that Michelle had been illegally dismissed.
Michelles four absences were not habitual; "totality of infractions"
doctrine not applicable
Cavite Apparel argues that Michelles penchant for incurring unauthorized and
unexcused absences despite its warning constituted gross and habitual neglect
of duty prejudicial to its business operations. It insists that by going on absence
without official leave four times, Michelle disregarded company rules and
regulations; if condoned, these violations would render the rules ineffectual and
would erode employee discipline.
Cavite Apparel disputes the CAs conclusion that Michelles four absences
without official leave were not habitual since she was able to submit a medical
certificate for her May 8, 2000 absence. It asserts that, on the contrary, no
evidence exists on record to support this conclusion. It maintains that it was in
the exercise of its management prerogative that it dismissed Michelle; thus, it is
not barred from dismissing her for her fourth offense, although it may have
previously punished her for the first three offenses. Citing the Courts ruling in
Mendoza v. NLRC,
21
it contends that the totality of Michelles infractions justifies
her dismissal.
We disagree and accordingly consider the companys position
unmeritorious.
Neglect of duty, to be a ground for dismissal under Article 282 of the Labor Code,
must be both gross and habitual.
22
Gross negligence implies want of care in the
performance of ones duties. Habitual neglect imparts repeated failure to perform
ones duties for a period of time, depending on the circumstances.
23
Under these
standards and the circumstances obtaining in the case, we agree with the CA
that Michelle is not guilty of gross and habitual neglect of duties.
Cavite Apparel faults the CA for giving credit to Michelles argument that she
submitted a medical certificate to support her absence on May 8, 2000; there
was in fact no such submission, except for her bare allegations. It thus argues
that the CA erred in holding that since doubt exists between the evidence
presented by the employee and that presented by the employer, the doubt
should be resolved in favor of the employee. The principle, it contends, finds no
application in this case as Michelle never presented a copy of the medical
certificate. It insists that there was no evidence on record supporting Michelles
claim, thereby removing the doubt on her being on absence without official leave
for the fourth time, an infraction punishable with dismissal under the company
rules and regulations.
Cavite Apparels position fails to convince us. Based on what we see in the
records, there simply cannot be a case of gross and habitual neglect of duty
against Michelle. Even assuming that she failed to present a medical certificate
for her sick leave on May 8, 2000, the records are bereft of any indication that
apart from the four occasions when she did not report for work, Michelle had
been cited for any infraction since she started her employment with the company
in 1994. Four absences in her six years of service, to our mind, cannot be
considered gross and habitual neglect of duty, especially so since the absences
were spread out over a six-month period.
Michelles penalty of dismissal too harsh or not proportionate to the
infractions she commited
Although Michelle was fully aware of the company rules regarding leaves of
absence, and her dismissal might have been in accordance with the rules, it is
well to stress that we are not bound by such rules. In Caltex Refinery Employees
Association v. NLRC
24
and in the subsequent case of Gutierrez v. Singer Sewing
Machine Company,
25
we held that "[e]ven when there exist some rules agreed
upon between the employer and employee on the subject of dismissal, x x x the
same cannot preclude the State from inquiring on whether [their] rigid application
would work too harshly on the employee." This Court will not hesitate to
disregard a penalty that is manifestly disproportionate to the infraction committed.
Michelle might have been guilty of violating company rules on leaves of absence
and employee discipline, still we find the penalty of dismissal imposed on her
unjustified under the circumstances. As earlier mentioned, Michelle had been in
Cavite Apparels employ for six years, with no derogatory record other than the
four absences without official leave in question, not to mention that she had
already been penalized for the first three absences, the most serious penalty
being a six-day suspension for her third absence on April 27, 2000.
While previous infractions may be used to support an employees dismissal from
work in connection with a subsequent similar offense,
26
we cautioned employers
in an earlier case that although they enjoy a wide latitude of discretion in the
formulation of work-related policies, rules and regulations, their directives and the
implemtation of their policies must be fair and reasonable; at the very least,
penalties must be commensurate to the offense involved and to the degree of the
infraction.
27

As we earlier expressed, we do not consider Michelles dismissal to be
commensurate to the four absences she incurred for her six years of service with
the company, even granting that she failed to submit on time a medical certificate
for her May 8, 2000 absence. We note that she again did not report for work on
May 15 to 27, 2000 due to illness. When she reported back for work, she
submitted the necessary medical certificates. The reason for her absence on
May 8, 2000 due to illness and not for her personal convenience all the more
rendered her dismissal unreasonable as it is clearly disproportionate to the
infraction she committed.
Finally, we find no evidence supporting Cavite Apparels claim that Michelles
absences prejudiced its operations; there is no indication in the records of any
damage it sustained because of Michelles absences. Also, we are not convinced
that allowing Michelle to remain in employment even after her fourth absence or
the imposition of a lighter penalty would result in a breakdown of discipline in the
employee ranks. What the company fails to grasp is that, given the
unreasonableness of Michelles dismissal i.e., one made after she had already
been penalized for her three previous absences, with the fourth absence imputed
to illness confirming the validity of her dismissal could possibly have the
opposite effect. It could give rise to belief that the company is heavy-handed and
may only give rise to sentiments against it.1wphi1
In fine, we hold that Cavite Apparel failed to discharge the burden of proving that
Michelles dismissal was for a lawful cause.
28
We, therefore, find her to have
been illegally dismissed.
As a final point, we reiterate that while we recognize managements prerogative
to discipline its employees, the exercise of this prerogative should at all times be
reasonable and should be tempered with compassion and understanding.
29

Dismissal is the ultimate penalty that can be imposed on an employee. Where a
penalty less punitive may suffice, whatever missteps may be committed by labor
ought not to be visited with a consequence so severe for what is at stake is not
merely the employees position but his very livelihood and perhaps the life and
subsistence of his family.
30

WHEREFORE, premises considered, the petition is DENIED. The assailed
January 23, 2006 decision and March 23, 2006 resolution of the Court of Appeals
in CA-G.R. SP No. 89819 are AFFIRMED. Costs against Cavite Apparel,
Incorporated.
G.R. No. 182070 February 16, 2011
37

E.G & I. CONSTRUCTION CORPORATION and EDSEL GALEOS, Petitioners,
vs.
ANANIAS P. SATO, NILO BERDIN, ROMEO M. LACIDA, JR., and HEIRS OF
ANECITO S. PARANTAR, SR., namely: YVONNE, KIMBERLY MAE,
MARYKRIS, ANECITO, JR., and JOHN BRYAN, all surnamed PARANTAR,
Respondents.
D E C I S I O N
NACHURA, J .:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules
of Court, assailing the Decision
1
dated October 24, 2007 and the Resolution
2

dated March 3, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 02316.
The factual and procedural antecedents of the case are as follows:
Respondent Ananias P. Sato (Sato) was hired in October 1990 by petitioner E.G.
& I. Construction Corporation as a grader operator, which is considered as
technical labor. He held the position for more than thirteen (13) years. In April
2004, Sato discovered that petitioner corporation had not been remitting his
premium contributions to the Social Security System (SSS). When Sato kept on
telling petitioners to update his premium contributions, he was removed as a
grader operator and made to perform manual labor, such as tilling the land in a
private cemetery and/or digging earthworks in petitioner corporations
construction projects.
3
In July 2004, an inspection team from the SSS went to
petitioner corporations office to check its compliance with the SSS law. On July
22, 2004, petitioners told Sato that they could no longer afford to pay his wages,
and he was advised to look for employment in other construction companies.
4

Sato, however, found difficulty in finding a job because he had been blacklisted in
other construction companies and was prevented from entering the project sites
of petitioners.
5

Respondent Nilo Berdin (Berdin) was hired by petitioners in March 1991 as a
steelman/laborer; respondent Anecito S. Parantar, Sr.
6
(Parantar) was hired in
February 1997 as a steelman; and respondent Romeo M. Lacida, Jr.
7
(Lacida)
was hired in March 2001 as a laborer.
8
At the start of their employment, they
were required by petitioners to sign several documents purporting to be
employment contracts.
9
They immediately signed the documents without
verifying their contents for fear of forfeiting their employment.
10

Respondents were required to work from 7:00 a.m. until 5:00 p.m. While in the
employ of petitioners, they devoted their time exclusively in the service of
petitioners and were assigned to various construction projects of petitioners.
They were tasked to set up steel bars used in the building foundation, to mix
cement, and to perform other tasks required of them by petitioners.
11

On July 24, 2004, the project engineer of respondents Berdin, Parantar, and
Lacida instructed them to affix their signatures on various documents. They
refused to sign the documents because they were written in English, a language
that they did not understand. Irked by their disobedience, the project engineer
terminated their employment. On the same date, they were given their weekly
wages. However, the wages that were paid to them were short of three (3) days
worth of wages, as penalty for their refusal to sign the documents. The following
day, they were not allowed to enter the work premises.
12

On July 26, 2004, respondents filed their respective complaints with the Regional
Arbitration Branch of Cebu City for illegal dismissal, underpayment of wages
(wage differentials), holiday pay, thirteenth (13th) month pay, and service
incentive leave pay.
13

Petitioners, on the other hand, admitted that respondents were employed by
them and were assigned in their various construction projects. However, they
denied that they illegally terminated respondents employment. According to
petitioners, respondents abandoned their work when they failed to report for work
starting on July 22, 2004. Petitioner corporation sent letters advising respondents
to report for work, but they refused. Petitioner corporation maintained that
respondents are still welcome, if they desire to work.
14

As to respondent Sato, petitioner corporation alleged that it admonished
respondent for having an illicit affair with another woman; that, in retaliation, Sato
complained to the SSS for alleged non-remittance of his premium contributions;
that Satos work was substandard; and that he also incurred unexplained
absences and was constantly reprimanded for habitual tardiness.
On July 27, 2005, the Labor Arbiter rendered a decision
15
finding that
respondents were illegally dismissed from employment. In lieu of reinstatement,
due to the strained relations of the parties and as prayed for by respondents,
each of them was granted separation pay equivalent to one (1) month pay for
every year of service. The Labor Arbiter likewise awarded respondents claim for
wage differentials, 13th month pay, holiday pay, and service incentive leave pay.
The Labor Arbiter ruled in favor of granting the monetary claims of respondents
because of petitioner corporations failure to effectively controvert the said claims
by not presenting proof of payment, such as payrolls or vouchers.
16
The
dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering
respondent [petitioner] E.G. & I. Construction Corporation to pay [respondents]
the following:
1. Ananias P. Sato - P 107,250.00
2. Anecito Parantar - 120,944.00
3. Nilo Berdin - 152,144.00
4. Romeo M. Lacida, Jr. - 138,594.00
Total Award -

P 518,932.00
==========
The other claims and the case against respondent Edsel Galeos are dismissed
for lack of merit.
SO ORDERED.
17

On appeal, the National Labor Relations Commission (NLRC) reversed the ruling
of the Labor Arbiter in a decision
18
dated July 31, 2006. The fallo of the NLRC
decision reads:
WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby
SET ASIDE and VACATED and a new one entered Dismissing the case.
Respondents are however ordered to pay complainants proportionate 13th
month [pay] for the year 2004 computed as follows:
1. Ananias Sato - P 3,180.00
2. Anecito Parantar - 2,520.00
3. Nilo Berdin - 2,700.00
4. Romeo Laceda - 2,520.00
Total -

P 10,920.00
SO ORDERED.
19

In reversing the decision of the Labor Arbiter, the NLRC ratiocinated that, other
than respondents bare allegation that they were dismissed, they failed to present
a written notice of dismissal,
20
and that respondents individual complaints opted
for the payment of separation pay instead of reinstatement.
21
The NLRC opined
that illegal dismissal was inconsistent with the prayer for separation pay instead
of reinstatement. As for the monetary reliefs prayed for by respondents, the
NLRC withdrew the grant of the same because of petitioner corporations
submission of the copies of payrolls, annexed to its memorandum on appeal.
22

Respondents filed a motion for reconsideration. However, the same was denied
in a resolution
23
dated October 9, 2006.
Aggrieved, respondents filed a petition for certiorari under Rule 65 of the Rules of
Court before the CA. On October 24, 2007, the CA rendered a Decision, the
dispositive portion of which reads:
WHEREFORE, premises considered, this petition is GRANTED. The Decision
and Resolution of the NLRC, dated July 31, 2006 and October 9, 2006,
respectively, are hereby REVERSED and SET ASIDE. The Decision of the labor
arbiter, dated July 27, 2005, is REINSTATED.
Costs against private respondents.
38

SO ORDERED.
24

The CA ruled that respondents were illegally dismissed. A written notice of
dismissal is not a pre-requisite for a finding of illegal dismissal.
25
Respondents
did not abandon their work. They were refused entry into the companys project
sites.
26
As to the award of monetary claims, the CA decided in favor of the grant
of the same. Petitioner corporation belatedly submitted copies of the weekly time
record, payroll, and acknowledgement receipts of the 13th month pay. There was
no explanation given why the said documents were not submitted before the
Labor Arbiter in order to establish their authenticity and correctness, and to give
respondents the opportunity to refute the entries therein.
27

Hence, this petition.
The issue to be resolved in this case is whether the CA erred in reinstating the
decision of the Labor Arbiter, declaring that respondents were illegally terminated
from employment by petitioner corporation, and that respondents are entitled to
their monetary claims.
We sustain the ruling of the CA. Petitioner corporation failed to prove that
respondents were dismissed for just or authorized cause. In an illegal dismissal
case, the onus probandi rests on the employer to prove that the dismissal of an
employee is for a valid cause.
28

For abandonment to exist, it is essential (a) that the employee must have failed
to report for work or must have been absent without valid or justifiable reason;
and (b) that there must have been a clear intention to sever the employer-
employee relationship manifested by some overt acts.
29
The employer has the
burden of proof to show the employee's deliberate and unjustified refusal to
resume his employment without any intention of returning. Mere absence is not
sufficient. There must be an unequivocal intent on the part of the employee to
discontinue his employment.
30

In this case, petitioner corporation claims that respondent Sato committed
unexplained absences on May 20, 24, and 25, 2004 and on June 7, 18, and 23,
2004. However, based on the findings of fact of the CA, respondent Sato worked
on May 20, June 18 and 23, 2004. This was based on the weekly time record
and payroll of respondent Sato that were presented by petitioner corporation in
its appeal before the NLRC. On respondent Satos alleged absences on May 24
and 25 and on June 7, 2004, no time record and payroll documents were
presented by petitioner corporation. With regard to respondents Berdin, Lacida,
and Parantar, petitioner corporation alleges that they failed to report for work
starting on July 22, 2004, and that petitioner even sent them letters advising
them to report for work, but to no avail.
Notwithstanding these assertions of petitioner corporation, we sustain the ruling
of the CA.lawphi1 The reason why respondents failed to report for work was
because petitioner corporation barred them from entering its construction sites. It
is a settled rule that failure to report for work after a notice to return to work has
been served does not necessarily constitute abandonment.
31
The intent to
discontinue the employment must be shown by clear proof that it was deliberate
and unjustified.
32
Petitioner corporation failed to show overt acts committed by
respondents from which it may be deduced that they had no more intention to
work. Respondents filing of the case for illegal dismissal barely four (4) days
from their alleged abandonment is totally inconsistent with our known concept of
what constitutes abandonment.
We sustain the ruling of the CA on respondents money claims. As a rule, one
who pleads payment has the burden of proving it. Even as the employee must
allege non-payment, the general rule is that the burden rests on the employer to
prove payment, rather than on the employee to prove non-payment. The reason
for the rule is that the pertinent personnel files, payrolls, records, remittances,
and other similar documents which will show that overtime, differentials,
service incentive leave, and other claims of the worker have been paid are not
in the possession of the worker but in the custody and absolute control of the
employer.
33

In this case, the submission of petitioner corporation of the time records and
payrolls of respondents only on their appeal before the NLRC is contrary to
elementary precepts of justice and fair play. Respondents were not given the
opportunity to check the authenticity and correctness of the same. Thus, we
sustain the ruling of the CA in the grant of the monetary claims of respondents.
We are guided by the time-honored principle that if doubts exist between the
evidence presented by the employer and the employee, the scales of justice
must be tilted in favor of the latter. It is the rule in controversies between a
laborer and his master that doubts reasonably arising from the evidence, or in the
interpretation of agreements and writing, should be resolved in the former's
favor.
34

WHEREFORE, in view of the foregoing, the Decision dated October 24, 2007
and the Resolution dated March 3, 2008 of the Court of Appeals in CA-G.R. SP
No. 02316 are hereby AFFIRMED. Costs against the petitioners.
G.R. No. 176287 January 31, 2011
HOSPITAL MANAGEMENT SERVICES, INC. - MEDICAL CENTER MANILA,
Petitioner,
vs.
HOSPITAL MANAGEMENT SERVICES, INC. - MEDICAL CENTER MANILA
EMPLOYEES ASSOCIATION-AFW and EDNA R. DE CASTRO, Respondents.
D E C I S I O N
PERALTA, J .:
Before this Court is a petition for review on certiorari seeking to set aside the
Decision
1
dated May 24, 2006 and Resolution
2
dated January 10, 2007 of the
Court of Appeals (CA), Special First Division, in CA-G.R. SP No. 73189, entitled
Hospital Management Services, Inc.-Medical Center Manila Employees
Association-AFW and Edna R. De Castro v. National Labor Relations
Commission, Hospital Management Services, Inc.-Medical Center Manila and
Asuncion Abaya-Morido, which reversed and set aside the Decision
3
dated
February 28, 2002 of the National Labor Relations Commission (NLRC), Second
Division, in NLRC NCR No. 00-07-07716-99 (CA No. 027766-01), and its
Resolution
4
dated May 31, 2002. The assailed CA decision ordered petitioner
Hospital Management Services, Inc.-Medical Center Manila to reinstate
respondent Edna R. De Castro to her former position without loss of seniority
rights or by payroll reinstatement, pursuant to the Labor Arbiter's Decision dated
January 18, 2001, but with payment of full backwages and other benefits or their
monetary equivalent, computed from the expiration of the 14-day suspension
period up to actual reinstatement.
The antecedent facts are as follows:
Respondent De Castro started working as a staff nurse at petitioner hospital
since September 28, 1990, until she was dismissed on July 20, 1999.
Between 2:00 a.m. to 3:00 a.m. of March 24, 1999, while respondent De Castro
and ward-clerk orientee Gina Guillergan were at the nurse station on night duty
(from 10:00 p.m. of March 23, 1999 to 6:00 a.m. of March 24, 1999), one Rufina
Causaren, an 81-year-old patient confined at Room 724-1 of petitioner hospital
for "gangrenous wound on her right anterior leg and right forefoot" and scheduled
for operation on March 26, 1999, fell from the right side of the bed as she was
trying to reach for the bedpan. Because of what happened, the niece of patient
Causaren staying in the room was awakened and she sought assistance from
the nurse station. Instead of personally seeing the patient, respondent De Castro
directed ward-clerk orientee Guillergan to check the patient. The vital signs of the
patient were normal. Later, the physician on duty and the nursing staff on duty for
the next shift again attended to patient Causaren.
Chief Nurse Josefina M. Villanueva informed Dr. Asuncion Abaya-Morido,
president and hospital director, about the incident and requested for a formal
investigation. On May 11, 1999, the legal counsel of petitioner hospital directed
respondent De Castro and three other nurses on duty, Staff Nurse Janith V.
Paderes and Nursing Assistants Marilou Respicio and Bertilla T. Tatad, to appear
before the Investigation Committee on May 13, 1999, 2:00 p.m., at the
conference room of petitioner hospital. During the committee investigation,
respondent De Castro explained that at around 2:30 a.m. to 3:00 a.m., she was
attending to a newly-admitted patient at Room 710 and, because of this, she
instructed Nursing Assistant Tatad to check the vital signs of patient Causaren,
with ward-clerk orientee Guillergan accompanying the latter. When the two
arrived at the room, the patient was in a squatting position, with the right arm on
the bed and the left hand holding on to a chair.
In the Investigation Report
5
dated May 20, 1999, the Investigation Committee
found that the subject incident happened between 11:00 a.m. to 11:30 a.m. of
March 23, 1999. The three other nurses for the shift were not at the nurse
station. Staff Nurse Paderes was then in another nurse station encoding the
medicines for the current admissions of patients, while Nursing Assistant
Respicio was making the door name tags of admitted patients and Nursing
Assistant Tatad delivered some specimens to the laboratory. The committee
recommended that despite her more than seven years of service, respondent De
Castro should be terminated from employment for her lapse in responding to the
incident and for trying to manipulate and influence her staff to cover-up the
incident. As for Staff Nurse Paderes and Nursing Assistants Respicio and Tatad,
the committee recommended that they be issued warning notices for failure to
note the incident and endorse it to the next duty shift and, although they did not
39

have any knowledge of the incident, they should be reminded not to succumb to
pressure from their superiors in distorting the facts.
On July 5, 1999, Janette A. Calixijan, HRD Officer of petitioner hospital, issued a
notice of termination, duly noted by Dr. Abaya-Morido, upon respondent De
Castro, effective at the close of office hours of July 20, 1999, for alleged violation
of company rules and regulations, particularly paragraph 16 (a), Item 3, Chapter
XI of the Employee's Handbook and Policy Manual of 1996 (Employee's
Handbook):
6
(1) negligence to follow company policy on what to do with patient
Rufina Causaren who fell from a hospital bed; (2) failure to record and refer the
incident to the physician-[on- duty and] allow[ing] a significant lapse of time
before reporting the incident; (3) deliberately instructing the staff to follow her
version of the incident in order to cover up the lapse; and (4) negligence and
carelessness in carrying out her duty as staff nurse-on-duty when the incident
happened.
On July 21, 1999, respondent De Castro, with the assistance of respondent
Hospital Management Services Inc.-Medical Center Manila Employees
Association-AFW, filed a Complaint
7
for illegal dismissal against petitioners with
prayer for reinstatement and payment of full backwages without loss of seniority
rights, P20,000.00 moral damages, P10,000.00 exemplary damages, and 10% of
the total monetary award as attorney's fees.
On January 18, 2001, the Labor Arbiter rendered a Decision,
8
ordering petitioner
hospital to reinstate respondent De Castro to her former position or by payroll
reinstatement, at the option of the former, without loss of seniority rights, but
without backwages and, also, directing petitioners to notify her to report to work.
Her prayer for damages and attorney's fees was denied. The Labor Arbiter
concluded that although respondent De Castro committed the act complained of,
being her first offense, the penalty to be meted should not be dismissal from the
service, but merely 7 to 14 days suspension as the same was classified as a less
serious offense under the Employees Handbook.
On appeal by respondent De Castro, the NLRC rendered a Decision dated
February 28, 2002, reversing the findings of the Labor Arbiter and dismissing the
complaint against the petitioners. It observed that respondent De Castro lacked
diligence and prudence in carrying out her duty when, instead of personally
checking on the condition of patient Causaren after she fell from the bed, she
merely sent ward-clerk orientee Guillergan to do the same in her behalf and for
influencing her staff to conceal the incident.
On May 31, 2002, the NLRC denied respondent De Castro's Motion for
Reconsideration dated April 16, 2002.
On May 24, 2006, the CA reversed and set aside the Decision of the NLRC and
reinstated the Decision of the Labor Arbiter, with modification that respondent De
Castro should be entitled to payment of full backwages and other benefits, or
their monetary equivalent, computed from the expiration of the 14-day-
suspension period up to actual reinstatement. The CA ruled that while
respondent De Castro's failure to personally attend to patient Causeran
amounted to misconduct, however, being her first offense, such misconduct
could not be categorized as serious or grave that would warrant the extreme
penalty of termination from the service after having been employed for almost 9
years. It added that the subject infraction was a less serious offense classified
under "commission of negligent or careless acts during working time or on
company property that resulted in the personal injury or property damage
causing expenses to be incurred by the company" stated in subparagraph 11,
paragraph 3 (B), Chapter XI [on the Rules on Discipline] of the Employee's
Handbook
9
of petitioner hospital. The CA did not sustain the NLRC's ruling that
respondent De Castro's dismissal was proper on the ground that her offense was
aggravated to serious misconduct on account of her alleged act of asking her co-
employees to lie for her as this fact was not proven.
Petitioners' motion for reconsideration was denied by the CA in the Resolution
dated January 10, 2007.
Hence, this present petition.
Petitioners allege that the deliberate refusal to attend to patient Causaren after
the latter fell from the bed justifies respondent De Castro's termination from
employment due to serious misconduct. They claim that respondent De Castro
failed to: (a) personally assist the patient; (b) check her vital signs and examine if
she sustained any injury; (c) refer the matter to the patient's attending physician
or any physician-on-duty; and (d) note the incident in the report sheet for
endorsement to the next shift for proper monitoring. They also aver that
respondent De Castro persuaded her co-nurses to follow her version of what
transpired so as to cover up her nonfeasance.
In her Comment, respondent De Castro counters that there was no serious
misconduct or gross negligence committed, but simple misconduct or minor
negligence which would warrant the penalty of 7 to 14 days of suspension under
the Employee's Handbook of petitioner hospital. She denies exerting influence
over the four nursing personnel, but points out that it was Chief Nurse Villanueva,
a close friend of patient Causaren's niece, who persuaded the four nursing staff
to retract their statements appearing in the incident reports as to the approximate
time of occurrence, from 2:00 a.m. to 3:00 a.m. of March 24, 1999 to 11:00 p.m.
to 11:30 p.m. of March 23, 1999, so as to pin her for negligence. She appeals for
leniency, considering that the subject infraction was her first offense in a span of
almost nine years of employment with petitioner hospital.
We affirm with modification the CA ruling which declared petitioners guilty of
illegal dismissal.
Article 282 (b) of the Labor Code provides that an employer may terminate an
employment for gross and habitual neglect by the employee of his duties. The
CA ruled that per the Employees Handbook of petitioner hospital, respondent De
Castros infraction is classified as a less serious offense for "commission of
negligent acts during working time" as set forth in subparagraph 11, paragraph 3
(B) of Chapter XI
10
thereof. Petitioners anchor respondent De Castros
termination of employment on the ground of serious misconduct for failure to
personally attend to patient Causaren who fell from the bed as she was trying to
reach for the bedpan. Based on her evaluation of the situation, respondent De
Castro saw no necessity to record in the chart of patient Causaren the fact that
she fell from the bed as the patient did not suffer any injury and her vital signs
were normal. She surmised that the incident was not of a magnitude that would
require medical intervention as even the patient and her niece did not press
charges against her by reason of the subject incident.
It is incumbent upon respondent De Castro to ensure that patients, covered by
the nurse station to which she was assigned, be accorded utmost health care at
all times without any qualification or distinction. Respondent De Castros failure
to personally assist patient Causaren, check her vital signs and examine if she
sustained any injury, refer the matter to the patient's attending physician or any
physician-on-duty, and note the incident in the report sheet for endorsement to
the next shift for proper monitoring constitute serious misconduct that warrants
her termination of employment. After attending to the toxic patients under her
area of responsibility, respondent De Castro should have immediately proceeded
to check the health condition of patient Causaren and, if necessary, request the
physician-on-duty to diagnose her further. More importantly, respondent De
Castro should make everything of record in the patients chart as there might be
a possibility that while the patient may appear to be normal at the time she was
initially examined, an injury as a consequence of her fall may become manifest
only in the succeeding days of her confinement. The patients chart is a
repository of ones medical history and, in this regard, respondent De Castro
should have recorded the subject incident in the chart of patient Causaren so that
any subsequent discomfort or injury of the patient arising from the incident may
be accorded proper medical treatment.
Neglect of duty, to be a ground for dismissal, must be both gross and
habitual.1wphi1 Gross negligence connotes want of care in the performance of
one's duties. Habitual neglect implies repeated failure to perform one's duties for
a period of time, depending upon the circumstances. A single or isolated act of
negligence does not constitute a just cause for the dismissal of the employee.
11

Despite our finding of culpability against respondent De Castro; however, we do
not see any wrongful intent, deliberate refusal, or bad faith on her part when,
instead of personally attending to patient Causaren, she requested Nursing
Assistant Tatad and ward-clerk orientee Guillergan to see the patient, as she was
then attending to a newly-admitted patient at Room 710. It was her judgment call,
albeit an error of judgment, being the staff nurse with presumably more work
experience and better learning curve, to send Nursing Assistant Tatad and ward-
clerk orientee Guillergan to check on the health condition of the patient, as she
deemed it best, under the given situation, to attend to a newly-admitted patient
who had more concerns that needed to be addressed accordingly. Being her first
offense, respondent De Castro cannot be said to be grossly negligent so as to
justify her termination of employment. Moreover, petitioners allegation, that
respondent De Castro exerted undue pressure upon her co-nurses to alter the
actual time of the incident so as to exculpate her from any liability, was not
clearly substantiated.
Negligence is defined as the failure to exercise the standard of care that a
reasonably prudent person would have exercised in a similar situation.
12
The
Court emphasizes that the nature of the business of a hospital requires a higher
degree of caution and exacting standard of diligence in patient management and
health care as what is involved are lives of patients who seek urgent medical
assistance. An act or omission that falls short of the required degree of care and
diligence amounts to serious misconduct which constitutes a sufficient ground for
dismissal.
40

However, in some cases, the Court had ruled that sanctioning an erring
employee with suspension would suffice as the extreme penalty of dismissal
would be too harsh.
13
Considering that this was the first offense of respondent De
Castro in her nine (9) years of employment with petitioner hospital as a staff
nurse without any previous derogatory record and, further, as her lapse was not
characterized by any wrongful motive or deceitful conduct, the Court deems it
appropriate that, instead of the harsh penalty of dismissal, she would be
suspended for a period of six (6) months without pay, inclusive of the suspension
for a period of 14 days which she had earlier served. Thereafter, petitioner
hospital should reinstate respondent Edna R. De Castro to her former position
without loss of seniority rights, full backwages, inclusive of allowances and other
benefits, or their monetary equivalent, computed from the expiration of her
suspension of six (6) months up to the time of actual reinstatement.
WHEREFORE, the petition is DENIED. The Decision dated May 24, 2006 and
Resolution dated January 10, 2007 of the Court of Appeals, Special First
Division, in CA-G.R. SP No. 73189, which reversed and set aside the Decision
dated February 28, 2002 and Resolution dated May 31, 2002 of the National
Labor Relations Commission, Second Division, are AFFIRMED WITH
MODIFICATION insofar as respondent Edna R. De Castro is found guilty of
gross negligence and is SUSPENDED for a period of SIX (6) MONTHS without
pay, inclusive of the suspension for a period of 14 days which she had earlier
served. Petitioner Hospital Management Services, Inc.-Medical Center Manila is
ORDERED to reinstate respondent Edna R. De Castro to her former position
without loss of seniority rights, full backwages, inclusive of allowances and other
benefits, or their monetary equivalent, computed from the expiration of her
suspension of six (6) months up to the time of actual reinstatement.
41

G.R. No. 164181 September 14, 2011
NISSAN MOTORS PHILS., INC., Petitioner,
vs.
VICTORINO ANGELO, Respondent.
D E C I S I O N
PERALTA, J.:
This is to resolve the Petition for Review
1
dated July 10, 2004 of petitioner Nissan
Motors Phils., Inc. (Nissan) assailing the Decision
2
dated March 24, 2004 of the
Court of Appeals (CA) and the latter's Resolution
3
dated June 9, 2004.
The records contain the following antecedent facts:
Respondent Victorino Angelo was employed by Nissan on March 11, 1989 as
one of its payroll staff. On April 7 to 17, 2000, respondent was on sick leave,
thus, he was not able to prepare the payroll for the said period. Again, on April 27
and 28, 2000, respondent was on an approved vacation leave which again
resulted in the non-preparation of the payroll for that particular period.
On May 8, 2000, respondent received a Memorandum
4
from the petitioner
containing the following:
This is to inform you that the Company is considering your dismissal from
employment on the grounds of serious misconduct, willful disobedience and
gross neglect of duties.
It appears that on April 10, 2000, Monday, which was the supposed cut-off date
for payroll purposes for the April 15 payroll, you went home early without finishing
your work and requested for a referral letter from the company clinic to E. Delos
Santos Hospital claiming that you are not feeling well.
On April 11, Tuesday, you did not report for work, without any notice to the
company or to any of your immediate superior section head, department head
and division head. A phone call was made to your home, but the company could
not make any contact.
On April 12, Wednesday, you reported for work but went home early claiming
that you were again not feeling well. You were reminded of the coming payday
on Friday, April 14, and you said you will be able to finish it on time and that you
will just continue/finish your work the following day.
On April 13, Thursday, you again did not report for work without any notice to the
company just like what you did last Tuesday. Your immediate superior, sensing
that you did not finish your task, tried to contact you but to no avail, as you were
residing in Novaliches and your home phone was not in order. So we decided to
open your computer thru the help of our IT people to access the payroll program.
On April 14, Friday (payday), we were still doing the payroll thru IT because we
could not contact you. Later in the day, the Company decided to release the
payroll of employees the following day as we already ran out of time and the
Company just based the net pay of the employees on their March 15 payroll.
Naturally, the amount released to the employees were not accurate as some got
more than (sic), while some got less than what they were supposed to receive.
Consequently, many employees got angry, as the Company paid on a Saturday,
(in practice we do not release salary on a Saturday as it is always done in
advance, i.e., Friday) and majority got lesser amount than what they were
supposed to receive. In addition, the employees were not given their payslip
where they can base the net pay they received.
When you reported for work on Tuesday, April 18, we had a meeting and you
were advised to transfer your payroll task to your immediate superior, which you
agreed. The time table agreement was 2 payroll period, meaning April 30 and
May 15 payroll.
Still on April 18, Tuesday, you filed an application for vacation leave due to your
son's graduation on April 27 and 28. Because it is again payroll time, we advised
that your leave will be approved on the condition that you will ensure that the
payroll is finished on time and [you] will make a proper turn over to your
immediate superior before your leave. You agreed and your leave was approved.
On April 24, Monday, you were reminded you should start on your payroll task
because you will be on leave starting April 27, Thursday, you said yes.
On April 25, Tuesday, you were again reminded on finishing the payroll and the
turn over again and you said yes.
On April 26, Wednesday, you were again reminded on the same matter and, in
fact, Mr. AA del Rosario reminded you also on the matter about 5:30 p.m. And
you promised him that the task will be finished by tomorrow (sic) and will just
leave the diskette in your open drawer. You were left in the office until 6:00 p.m.
On April 27, Thursday, you were already on leave and your superior, Mr. M.
Panela, found out that the diskette only contained the amount and name of
employees, but not the account number. Likewise, the deductions from salaries
was not finished, the salaries of contractuals, apprentices were also not finished.
Since the bank only reads account numbers of employees, we experienced delay
in the payroll processing. You even promised to call the office i.e., M Panela to
give additional instructions not later than 12:00 noon on the same day, but you
did not do so. In fact, the direct phone line of Mr. AA del Rosario was given to
you by your officemate so you can call the office directly and not thru long
distance.
On April 28, Friday, after exhaustive joint efforts done by Welfare Management
Section and IT Division, we were able to finally release the payroll thru the bank,
but many employees got lower amount than what they have expected, as in fact
at least 43 employees out of 360 got salaries below P1,000.00, among them
about 10 people got no salary primarily due to wrong deduction and computation
done by you. Again, many people got angry to the management's inefficient
handling of their payroll.
On May 2, Tuesday, you did not report for work, again you said you are not
feeling well, but the information to us came very late at about noon time.
On May 3, Wednesday, you reported for work, and was instructed to finish the
payslips for the payroll periods April 15 and April 30. You said yes, and you
promised not to go home on that day without finishing the payslips. Later, you
decided on your own to just compute the payslip on a monthly basis instead of
the usual semi-monthly basis as is the customary thing to do. As a result thereof,
an error in the tax withholding happened and again resulted in another confusion
and anger among employees, as in fact for two (2) consecutive days, May 3 and
May 4, the plant workers refused to render overtime.
As a consequence of all these, the manufacturing employees, numbering about
350 people or about 65% of [Nissan's total population], since April 16, have
started to decline rendering overtime work, saying after their 15 days of work
they received only less than P200 while some even received only P80.
The manufacturing operation was hampered completely in the month of April and
the first week of May because of these several incidents. In sum, the company
has suffered massive loss of opportunity to sell because of failure to produce in
the production area due to non-availability of workers rendering overtime, high
absenteeism rate among plant direct workers primarily due to the payroll
problem. It came at a time when NMPI sales [are] just starting to pick up due to
the introduction of the new model Sentra Exalta. The loss is simply too
overwhelming.
Accordingly, you are hereby given a period of three (3) days from receipt hereof
to submit your written answer.
In the meantime, you are hereby placed on preventive suspension effective
immediately.
A hearing will be conducted by Mr. AA del Rosario, on May 13, 2000 at 9:00 a.m.
at the Company's conference room (Fairlady).
Respondent filed a Complaint
5
for illegal suspension with the Department of
Labor and Employment (DOLE) on May 12, 2000.
Petitioner conducted an investigation on May 13, 2000, and concluded that
respondent's explanation was untrue and insufficient. Thus, on June 13, 2000,
petitioner issued a Notice of Termination.
6

Respondent amended his previous complaint against petitioner on June 22,
2000, to include the charge of illegal dismissal.
7
On September 29, 2000, the
Labor Arbiter rendered a Decision
8
dismissing respondent's complaint for lack of
42

merit. Undaunted, respondent brought the case to the National Labor Relations
Commission (NLRC), which eventually rendered a Resolution
9
dated February
14, 2002 dismissing the appeal and affirming the Labor Arbiter's Decision.
Respondent's motion for reconsideration of the NLRC resolution was
subsequently denied on May 13, 2002.
10

Aggrieved, respondent filed a petition for certiorari
11
under Rule 65 of the Rules
of Court with the CA and the latter granted the same petition in its Decision dated
March 24, 2004, the dispositive portion of which reads:
WHEREFORE, the petition is GRANTED. The assailed resolutions dated
February 14, 2002 and May 13, 2002 are REVERSED and SET ASIDE. The
petitioner is hereby reinstated and the private respondents are ordered to pay
him backwages from the time of his illegal dismissal.
SO ORDERED.
Unsatisfied with the decision of the CA, Nissan filed a motion for reconsideration,
which was denied by the same court in a Resolution dated June 9, 2004.
Thus, the present petition, to which the petitioner cites the following grounds:
A
THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF
LAW WHEN IT OVERTURNED THE FACTUAL FINDINGS OF BOTH
THE LABOR ARBITER AND THE NLRC WHICH ARE BASED ON
SUBSTANTIAL EVIDENCE.
B
THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF
LAW WHEN IT DISREGARDED PRIVATE RESPONDENT'S
SERIOUS MISCONDUCT AND INSUBORDINATION, AND
DECIDED THE CASE ONLY ON THE CHARGE OF GROSS AND
HABITUAL NEGLIGENCE.
C
THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF
LAW IN IGNORING PRIVATE RESPONDENT'S MISCONDUCT
WHICH, IF EVER IT DOES NOT JUSTIFY DISMISSAL BECAUSE
OF HIS 11-YEAR SERVICE NONETHELESS LIMITS THE AWARD
OF BACKWAGES.
12

The petition is meritorious.
Petitioner argues that the factual findings of the Labor Arbiter and the NLRC
should have been accorded respect by the CA as they are based on substantial
evidence. However, factual findings of administrative agencies are not infallible
and will be set aside if they fail the test of arbitrariness.
13
In the present case, the
findings of the CA differ from those of the Labor Arbiter and the NLRC. The
Court, in the exercise of its equity jurisdiction, may look into the records of the
case and re-examine the questioned findings.
14

The Labor Code provides that an employer may terminate the services of an
employee for a just cause.
15
Petitioner, the employer in the present case,
dismissed respondent based on allegations of serious miscounduct, willful
disobedience and gross neglect.
One of the just causes enumerated in the Labor Code is serious misconduct.
Misconduct is improper or wrong conduct.
16
It is the transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty, willful
in character, and implies wrongful intent and not mere error in judgment.
17
Such
misconduct, however serious, must nevertheless be in connection with the
employee's work to constitute just cause for his separation.
18
Thus, for
misconduct or improper behavior to be a just cause for dismissal, (a) it must be
serious; (b) it must relate to the performance of the employees duties; and (c) it
must show that the employee has become unfit to continue working for the
employer.
19

Going through the records, this Court found evidence to support the allegation of
serious misconduct or insubordination. Petitioner claims that the language used
by respondent in his Letter-Explanation is akin to a manifest refusal to cooperate
with company officers, and resorted to conduct which smacks of outright
disrespect and willful defiance of authority or insubordination. The misconduct to
be serious within the meaning of the Labor Code must be of such a grave and
aggravated character and not merely trivial or unimportant.
20
The Letter-
Explanation
21
partly reads:
Again, it's not negligence on my part and I'm not alone to be blamed. It's
negligence on your part [Perla Go] and A.A. Del Rosario kasi, noong pang April
1999 ay alam ninyo na hindi ako ang dapat may responsibilidad ng payroll kundi
ang Section Head eh bakit hindi ninyo pinahawak sa Section Head noon pa. Pati
kaming dalawa sa payroll, kasama ko si Thelma. Tinanggal nyo si Thelma. Hindi
nyo ba naisip na kailangan dalawa ang tao sa payroll para pag absent ang isa ay
may gagawa. Dapat noon nyo pa naisip iyan. Ang tagal kong gumawa ng
trabahong hindi ko naman dapat ginagawa.
This Court finds the above to be grossly discourteous in content and tenor. The
most appropriate thing he could have done was simply to state his facts without
resorting to such strong language. Past decisions of this Court have been one in
ruling that accusatory and inflammatory language used by an employee to the
employer or superior can be a ground for dismissal or termination.
22

Another just cause cited by the petitioner is willful disobedience. One of the
fundamental duties of an employee is to obey all reasonable rules, orders and
instructions of the employer. Disobedience, to be a just cause for termination,
must be willful or intentional, willfulness being characterized by a wrongful and
perverse mental attitude rendering the employees act inconsistent with proper
subordination. A willful or intentional disobedience of such rule, order or
instruction justifies dismissal only where such rule, order or instruction is (1)
reasonable and lawful, (2) sufficiently known to the employee, and (3) connected
with the duties which the employee has been engaged to discharge.
23
This
allegation of willful disobedience can still be adduced and proven from the same
Letter-Explanation cited earlier.
Petitioner also dismissed respondent because of gross or habitual negligence.
Neglect of duty, to be a ground for dismissal, must be both gross and habitual.
24

In finding that petitioner was able to adduce evidence that would justify its
dismissal of respondent, the NLRC correctly ruled that the latter's failure to turn
over his functions to someone capable of performing the vital tasks which he
could not effectively perform or undertake because of his heart ailment or
condition constitutes gross neglect. It stated that:
x x x Be it mentioned and emphasized that complainant cannot be faulted for his
absences incurred on 10, 11, 13, 14, 17, 27 and 28 of April 2000 as he went on
official leave on said dates. Except for the last two dates mentioned (27 and 28
April 2000), health problem compelled complainant to be on sick leave of
absence on the foregoing dates. It is not the complainant's liking, in other words,
to be afflicted with any form of heart ailment which actually caused him to incur
such leave of absences. Complainant's pellucid fault, however, lies on his failure
to effect the "much-needed" turn over of functions to someone capable of
performing the vital task(s) which he could not effectively perform or undertake
because of his heart ailment or condition. Indeed, the trouble(s) "felt" by
management and the employees concerned on the payday of 15 April 2000 may
seem justified under the circumstances as complainant indeed has gotten ill and
in fact went on sick leave of absence prior to said payday. The same, however,
certainly does not hold true as to the trouble(s) and chaos felt and which
occurred on the payday of 30 April 2000 as diligence and prudence logically and
equitably required complainant to have effected the necessary turn over of his
functions to someone capable of taking over his assigned task(s) even perhaps
on a merely temporary basis. The preparation of payroll, especially that of a big
business entity such as herein respondent company, certainly involves serious,
diligent, and meticulous attention of the employee tasked of performing such
function and a company definitely could not let either negligence or absence of
the employee concerned get in the way of the performance of the undertaking of
such, otherwise, serious repercussion(s) would be the logical and unavoidable
consequences; such is what befell the respondents. Be it mentioned at this
juncture that under the circumstances herein then prevailing, it would seem just
logical and in keeping with the natural "reflexes," so to speak, of a business
entity, to require an incapable employee tasked to perform a vital function, to
effect the necessary turn over of functions of such employee to someone
capable. Be it further emphasized, however, that even assuming that no formal
directive was given by the company to the employee concerned for the turn over
of the latter's functions, said employee should have taken the initiative of so
doing considering the importance of the task(s) he is performing. Hence, failure
to do so would clearly be tantamount to serious neglect of duty, a valid ground in
terminating employment relations.
25

Gross negligence connotes want of care in the performance of one's
duties.1vvph!1 Habitual neglect implies repeated failure to perform one's duties
for a period of time, depending upon the circumstances. On the other hand, fraud
and willful neglect of duties imply bad faith on the part of the employee in failing
to perform his job to the detriment of the employer and the latter's business.
26

43

It must be emphasized at this point that the onus probandi to prove the
lawfulness of the dismissal rests with the employer. In termination cases, the
burden of proof rests upon the employer to show that the dismissal is for just and
valid cause. Failure to do so would necessarily mean that the dismissal was not
justified and, therefore, was illegal.
27
In this case, both the Labor Arbiter and the
NLRC were not amiss in finding that the dismissal of respondent was legal or for
a just cause based on substantial evidence presented by petitioner. Substantial
evidence, which is the quantum of proof required in labor cases, is that amount of
relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion.
28

However, although the dismissal was legal, respondent is still entitled to a
separation pay as a measure of financial assistance, considering his length of
service and his poor physical condition which was one of the reasons he filed a
leave of absence. As a general rule, an employee who has been dismissed for
any of the just causes enumerated under Article 282
29
of the Labor Code is not
entitled to separation pay.
30
Although by way of exception, the grant of
separation pay or some other financial assistance may be allowed to an
employee dismissed for just causes on the basis of equity.
31
This concept has
been thoroughly discussed in Solidbank Corporation v. NLRC,
32
thus:
The reason that the law does not statutorily grant separation pay or financial
assistance in instances of termination due to a just cause is precisely because
the cause for termination is due to the acts of the employee. In such instances,
however, this Court, inspired by compassionate and social justice, has in
the past awarded financial assistance to dismissed employees when
circumstances warranted such an award.
In Central Philippines Bandag Retreaders, Inc. v. Diasnes,
33
this Court discussed
the parameters of awarding separation pay to dismissed employees as a
measure of financial assistance, viz:
To reiterate our ruling in Toyota, labor adjudicatory officials and the CA must
demur the award of separation pay based on social justice when an employee's
dismissal is based on serious misconduct or willful disobedience; gross and
habitual neglect of duty; fraud or willful breach of trust; or commission of a crime
against the person of the employer or his immediate family - grounds under Art.
282 of the Labor Code that sanction dismissals of employees. They must be
most judicious and circumspect in awarding separation pay or financial
assistance as the constitutional policy to provide full protection to labor is not
meant to be an instrument to oppress the employers. The commitment of the
Court to the cause of labor should not embarrass us from sustaining the
employers when they are right, as here. In fine, we should be more cautious in
awarding financial assistance to the undeserving and those who are unworthy of
the liberality of the law.
34

Thus, in Philippine Commercial International Bank v. Abad,
35
this Court, having
considered the circumstances present therein and as a measure of social justice,
awarded separation pay to a dismissed employee for a just cause under Article
282. The same concession was given by this Court in Aparente, Sr. v. National
Labor Relations Commission
36
and Tanala v. National Labor Relations
Commission.
37

WHEREFORE, the Petition for Review dated July 10, 2004 of petitioner Nissan
Motors Phils., Inc. is hereby GRANTED. Consequently, the Decision dated
March 24, 2004 of the Court of Appeals and the latter's Resolution dated June 9,
2004 are hereby REVERSED AND SET ASIDE and the Decision dated
September 29, 2000 of the Labor Arbiter and its Resolution dated February 14,
2002 are hereby REINSTATED with the MODIFICATION that petitioner shall
award respondent his separation pay, the computation of which shall be based
on the prevailing pertinent laws on the matter.

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