PRUDENTIAL GUARANTEE AND ASSURANCE EMPLOYEE LABOR UNION and SANDY T. VALLOTA vs.

NATIONAL LABOR RELATIONS COMMISSION, PRUDENTIAL GUARANTEE AND ASSURANCE INC., and/or JOCELYN RETIZOS FACTS: Vallota was employed by respondent Prudential Guarantee and Assurance, Inc. (PGAI) as a Junior Programmer assigned to the Electronic Data Processing (EDP) Department. During an on the spot security chec! in the In"ormation and #echnology (IT) Department by PGAI, Vallota$s computer was chec!ed and a "older named %&AA' was "ound in his "iles. Vallota e(plained that there is nothing wrong with the "iles. Vallota was later in"ormed that the "iles will be printed and Vallota did not ob)ect. A"ter the "iles were printed, Vallota and the *nion +ecretary were as!ed to sign each page o" the printout. Vallota was not given a copy o" the printed "ile. ,ater, Vallota received a memorandum directing him to e(plain within -. hours why highly con"idential "iles were stored in his computer. #he same memorandum also in"ormed him that he was being placed under preventive suspension "or /0 days e""ective upon receipt o" the said notice. A second memorandum noti"ied Vallota o" the e(tension o" his preventive suspension "or another /0 days because the management needed more time to evaluate the administrative case against him. Vallota responded in writing and three days later, PGAI sent him another memorandum re1uesting "urther details on some o" the matters he raised in his response. Vallota then re1uested a con"erence in a letter, to be attended by a *nion representative and counsel. In reply, PGAI sent Vallota another memorandum which set a new deadline "or Vallota to submit his reply and evidence in his de"ense. In compliance with the deadline set, Vallota submitted his reply memorandum, outlining his response to the charges. &eanwhile, the *nion sent a letter to the PGAI President re1uesting that a grievance committee be convened and that the contents o" the computers o" other I# personnel be similarly produced. #he re1uest was ignored. A"terwards, Vallota was given a notice o" termination o" his employment e""ective on the ground o" loss o" trust and con"idence. #hus, the petitioners "iled a complaint "or illegal dismissal. #he ,abor Arbiter ruled in "avor o" petitioners but the 2,34 reversed the ,A$s decision. ISSUE: 562 petitioner Vallota was illegally dismissed. ELD: 7E+. Lo!! o" #on"$d%n#% as a )ust cause "or dismissal was never intended to provide employers with a blan! chec! "or terminating their employees. +uch a vague, all encompassing prete(t as loss o" con"idence, i" un1uali"iedly given the seal o" approval by this 4ourt, could readily reduce to barren "orm the words o" the constitutional guarantee o" security o" tenure. 8aving this in mind, loss o" con"idence should ideally apply only to cases involving employees occupying positions o" trust and con"idence or to those situations where the employee is routinely charged with the care and custody o" the employer9s money or property. #o the "$r!& #'a!! belong managerial employees, i.e., those vested with the powers or prerogatives to lay down management policies and:or to hire, trans"er, suspend, lay o"", recall, discharge, assign or discipline employees or e""ectively recommend such managerial actions; and to the !%#ond #'a!! belong cashiers, auditors, property custodians, etc., or those who, in the normal and routine e(ercise o" their "unctions, regularly handle signi"icant amounts o" money or property. Evidently, an ordinary chambermaid who has to sign out "or linen and other hotel property "rom the property custodian each day and who has to account "or each and every towel or bedsheet utili<ed by the hotel9s guests at the end o" her shi"t would not "all under any o" these two classes o" employees "or which loss o" con"idence, i" ably supported by evidence, would normally apply. #he "$r!& r%()$!$&% "or d$!*$!!a' on &+% ,ro)nd o" 'o!! o" &r)!& and #on"$d%n#% is that the employee concerned must be one holding a position o" trust and con"idence. #he !%#ond r%()$!$&% is that there must be an act that would )usti"y the loss o" trust and con"idence. ,oss o" trust and con"idence to be a valid cause "or dismissal must be based on a will"ul breach o" trust and "ounded on clearly established "acts. #he basis "or the dismissal must be clearly and convincingly established but proo" beyond reasonable doubt is not necessary. Vallota$s position as Junior Programmer is analogous to the second class o" positions o" trust and con"idence. #hough he did not physically handle money or property, he became privy

to con"idential data or in"ormation by the nature o" his "unctions. At a time when the most sensitive o" in"ormation is "ound not printed on paper but stored on hard drives and servers, an employee who handles or has access to data in electronic "orm naturally becomes the unwilling recipient o" con"idential in"ormation. As to the second re1uisite, the act alleged to have caused the loss o" trust and con"idence o" PGAI in Vallota was the presence in his computer$s hard drive o" a "older named =&AA= allegedly containing "iles with in"ormation on &AA &utual ,i"e Philippines, a domestic corporation selling li"e insurance policies to the buying public, and "iles relating to PGAI$s internal a""airs. 5hile the law and this 4ourt recogni<e the right o" an employer to dismiss an employee based on loss o" trust and con"idence, the evidence o" the employer must clearly and convincingly establish the "acts upon which the loss o" trust and con"idence in the employee is based. #o be a valid ground "or dismissal, loss o" trust and con"idence must be based on a will"ul breach o" trust and "ounded on clearly established "acts. A breach is will"ul i" it is done intentionally, !nowingly and purposely, without )usti"iable e(cuse, as distinguished "rom an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer$s arbitrariness, whims, caprices or suspicion; otherwise, the employee would remain eternally at the mercy o" the employer. >urther, in order to constitute a )ust cause "or dismissal, the act complained o" must be wor! related and show that the employee concerned is un"it to continue wor!ing "or the employer. +uch ground "or dismissal has never been intended to a""ord an occasion "or abuse because o" its sub)ective nature. It must also be remembered that in illegal dismissal cases li!e the one at bench, the burden o" proo" is upon the employer to show that the employee$s termination "rom service is "or a )ust and valid cause. #he employer$s case succeeds or "ails on the strength o" its evidence and not the wea!ness o" that adduced by the employee, in !eeping with the principle that the scales o" )ustice should be tilted in "avor o" the latter in case o" doubt in the evidence presented by them. 6"ten described as more than a mere scintilla, the 1uantum o" proo" is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as ade1uate to support a conclusion, even i" other e1ually reasonable minds might conceivably opine otherwise. >ailure o" the employer to discharge the "oregoing onus would mean that the dismissal is not )usti"ied and, there"ore, illegal. In this case, there was no other evidence presented to prove "raud in the manner o" securing or obtaining the "iles "ound in Vallota$s computer. In "act, aside "rom the presence o" these "iles in Vallota$s hard drive, there was no other evidence to prove any gross misconduct on his part. #here was no proo" either that the presence o" such "iles was part o" an attempt to de"raud his employer or to use the "iles "or a purpose other than that "or which they were intended. I" anything, the presence o" the "iles reveals some degree o" carelessness or neglect in his "ailure to delete them, but it is an e(tremely "ar"etched conclusion bordering on paranoia to state that it is part o" a larger conspiracy involving corporate espionage. &oreover, contrary to the respondents$ allegations, the &AA "iles "ound in Vallota$s computer, the prospectus and corporate pro"ile, are not sensitive corporate documents. #hese are documents routinely made available to the public, and serve as means to in"orm the public about the company and to disseminate in"ormation about the products it sells or the services it provides, in order that potential clients may ma!e a sound and in"ormed decision whether or not to purchase or avail o" such goods and services. I" anything, the presence o" the "iles would merely merit the development o" some suspicion on the part o" the employer, but should not amount to a loss o" trust and con"idence such as to )usti"y the termination o" his employment. +uch act is not o" the same class, degree or gravity as the acts that have been held to be o" such character. 5hile Vallota$s act or omission may have been done carelessly, it "alls short o" the standard re1uired "or termination o" employment. It does not mani"est either that the employee concerned is un"it to continue wor!ing "or his employer. DUE PROCESS - #he petitioners allege that Vallota was denied due process o" law, as the records o" the case clearly show that his re1uest "or an administrative hearing was denied without reason by PGAI. 4iting 3ule ?, +ection .@dA o" the Implementing 3ules o" Boo! VI o" the ,abor 4ode, the petitioners argue that a hearing or con"erence must be conducted to a""ord the employee an opportunity to respond to the charge, and to present or rebut evidence presented against him. #he petitioners are o" the position that the

un)usti"ied re"usal o" PGAI to conduct a hearing violated the said provision o" the 3ules implementing the ,abor 4ode, as well as Vallota$s right to de"end himsel" be"ore an impartial investigating body. In sum, the "ollowing are the guiding principles in connection with the hearing re1uirement in dismissal casesC @aA =ample opportunity to be heard= means any meaning"ul opportunity @verbal or writtenA given to the employee to answer the charges against him and submit evidence in support o" his de"ense, whether in a hearing, con"erence or some other "air, )ust and reasonable way. @bA a "ormal hearing or con"erence becomes mandatory only when re1uested by the employee in writing or substantial evidentiary disputes e(ist or a company rule or practice re1uires it, or when similar circumstances )usti"y it. @cA the =ample opportunity to be heard= standard in the ,abor 4ode prevails over the =hearing or con"erence= re1uirement in the implementing rules and regulations. In this case, the two notice re1uirement was complied with. Given, however, that the petitioners e(pressly re1uested a con"erence or a convening o" a grievance committee, such "ormal hearing became mandatory. A"ter PGAI "ailed to a""irmatively respond to such re1uest, it "ollows that the hearing re1uirement was not complied with and, there"ore, Vallota was denied his right to procedural due process. COSMOS BOTTLING CORP. .!. /ILSON FERMIN FACTS: 5ilson B. >ermin @>erminA was a "or!li"t operator at 4osmos Bottling 4orporation @46+&6+A. 8e was accused o" stealing the cellphone o" his "ellow employee, ,uis Braga @BragaA. >ermin was then given a +how 4ause &emorandum, re1uiring him to e(plain why the cellphone was "ound inside his loc!er. In compliance therewith, he submitted an a""idavit the "ollowing day, e(plaining that he only hid the phone as a practical )o!e and had every intention o" returning it to Braga. A"ter conducting an investigation, 46+&6+ "ound >ermin guilty o" stealing Braga$s phone in violation o" company rules and regulations. 4onse1uently, the company terminated >ermin "rom employment a"ter .- years o" service. >ollowing the dismissal o" >ermin "rom employment, Braga e(ecuted an a""idavit, which stated the belie" that the "ormer had merely pulled a pran! without any intention o" stealing the cellphone, and withdrew "rom 46+&6+ his complaint against >ermin. &eanwhile, >ermin "iled a 4omplaint "or Illegal Dismissal, which the ,abor Arbiter @,AA dismissed "or lac! o" merit on the ground that the act o" ta!ing a "ellow employee$s cellphone amounted to gross misconduct. >urther, the ,A li!ewise too! into consideration >ermin$s other in"ractions, namelyC @aA committing acts o" disrespect to a superior o""icer, and @bA sleeping on duty and abandonment o" duty. #he 2,34 a""irmed the ,A$s decision. #he 4ourt o" Appeals, however, reversed such decision. ISSUE: 5hether or not the imposition o" the penalty o" dismissal was appropriate. ELD: YES. #he"t committed against a co employee is considered as a case analogous to serious misconduct, "or which the penalty o" dismissal "rom service may be meted out to the erring employee. &isconduct involves =the transgression o" some established and de"inite rule o" action, "orbidden act, a dereliction o" duty, will"ul in character, and implies wrong"ul intent and not mere error in )udgment.= >or misconduct to be serious and there"ore a valid ground "or dismissal, it must beC ?. o" grave and aggravated character and not merely trivial or unimportant and .. connected with the wor! o" the employee. Article .D.@eA o" the ,abor 4ode tal!s o" other analogous causes or those which are susceptible o" comparison to another in general or in speci"ic detail. >or an employee to be validly dismissed "or a cause analogous to those enumerated in Article .D., the cause must involve a voluntary and:or

will"ul act or omission o" the employee. A cause analogous to serious misconduct is a voluntary and:or will"ul act or omission attesting to an employee$s moral depravity. #he"t committed by an employee against a person other than his employer, i" proven by substantial evidence, is a cause analogous to serious misconduct. In this case, the ,A has already made a "actual "inding, which was a""irmed by both the 2,34 and the 4A, that >ermin had committed the"t when he too! Braga$s cellphone. #hus, this act is deemed analogous to serious misconduct, rendering >ermin$s dismissal "rom service )ust and valid. 5hile it is true that previous in"ractions may be cited as )usti"ication "or dismissing an employee only i" they are related to the subse1uent o""ense, it must be noted that such a discussion was unnecessary since the the"t, ta!en in isolation "rom >ermin$s other violations, was in itsel" a valid cause "or the termination o" his employment.

ROMEO E. PAULINO .!. NATIONAL LABOR RELATIONS COMMISSION and P ILIPPINE LONG DISTANCE TELEP ONE COMPANY, INCORPORATED FACTS: Petitioner, who was then employed by private respondent Philippine ,ong Distance #elephone 4ompany, Inc. @P,D#A as 4able +plicer III, surrendered his service vehicle to P,D#$s motor pool "or body repairs. >or this reason, he unloaded the company issued plant materials contained in the vehicle and stored them at his residence "or sa"e!eeping. >or ? month and ?? days, P,D#$s properties were in the custody o" petitioner. #hus, members o" the Philippine 2ational Police @P2PA, armed with a search warrant, searched his house where company materials were "ound and retrieved. Based on the investigation by the P2P, petitioner did not present any documents or re1uisition slips that would )usti"y his possession o" the materials. 4onse1uently, P,D# caused the "iling o" an In"ormation "or 1uali"ied the"t against him. #he ne(t day, P,D# issued an invitation to V. Pesayco, the manager o" petitioner, re1uesting him to ma!e petitioner available to clari"y certain matters. Petitioner attended this meeting along with his lawyer, but P,D#$s investigators merely tal!ed with the counsel. P,D# then received a security report stating that petitioner had engaged in the illicit disposal o" its plant materials, which were recovered during the search conducted at his residence. P,D# then issued an Inter 6""ice &emo re1uiring petitioner to e(plain why he should not be terminated "rom employment "or serious misconduct @the"t o" company propertyA. #he &emo also gave him the option to as! "or a "ormal hearing o" his case. In reply, he re1uested that the proceedings be held in abeyance until the criminal case against him had been concluded. #hen, Pesayco in"ormed petitioner in writing that since his reply did not provide any clari"ication whatsoever that would have warranted an evaluation o" his case, the company was terminating his services e""ective on the said date. #hree years later, a"ter the criminal case "or 1uali"ied the"t had been terminated "or "ailure o" the prosecution to prove his guilt beyond reasonable doubt, petitioner "iled a 4omplaint "or Illegal Dismissal which the ,abor Arbiter @,AA dismissed "or utter lac! o" merit. #he 2,34 and 4A a""irmed the ,A$s Decision. ISSUE: 5hether or not the petitioner$s dismissal was based on )ust cause. ELD: YES. #he ,abor 4ode recogni<es that an employer, "or )ust cause, may validly terminate the services o" an employee "or serious misconduct or will"ul disobedience o" the law"ul orders o" the employer or representative in connection with the employee$s wor!. >raud or will"ul breach by the employee o" the trust reposed by the employer in the "ormer, or simply loss o" con"idence, also )usti"ies an employee$s dismissal "rom employment.

2otwithstanding petitioner$s ac1uittal in the criminal case "or 1uali"ied the"t, respondent P,D# had ade1uately established the basis "or the company$s loss o" con"idence as a )ust cause to terminate petitioner. #his 4ourt "inds that approach to be correct, since proo" beyond reasonable doubt o" an employee$s misconduct is not re1uired in dismissing an employee. 3ather, as opposed to the =proo" beyond reasonable doubt= standard o" evidence re1uired in criminal cases, labor suits re1uire only substantial evidence to prove the validity o" the dismissal. 5ill"ul breach o" trust or loss o" con"idence re1uires that the employee @?A occupied a position o" trust or @.A was routinely charged with the care o" the employer$s property../ As correctly appreciated by the 4A, petitioner was charged with the care and custody o" P,D#$s property. #o warrant dismissal based on loss o" con"idence, there must be some basis "or the loss o" trust or the employer must have reasonable grounds to believe that the employee is responsible "or misconduct that renders the latter unworthy o" the trust and con"idence demanded by his or her position. In this case, even assuming that he law"ully possessed the materials, P,D# still had ample reason or basis to already distrust petitioner. >or more than a month, he did not even in"orm P,D# o" the whereabouts o" the plant materials. Instead, he stoc!ed these materials at his residence even i" they were needed in the daily operations o" the company. In !eeping with the honesty and integrity demanded by his position, he should have turned over these materials to the plant$s warehouse. #he "act that petitioner did not present any documents or re1uisition slips at the time that the P2P too! the plant materials logically e(cites suspicion. In addition, P,D# received a security report stating that petitioner had engaged in the illicit disposal o" its plant materials, which were recovered during the search conducted at his residence. #hus, P,D# reasonably suspected petitioner o" stealing the company$s property. At that )uncture, the employer may already dismiss the employee since it had reasonable grounds to believe or to entertain the moral conviction that the latter was responsible "or the misconduct, and the nature o" his participation therein rendered him absolutely unworthy o" the trust and con"idence demanded by his position. Petitioner also claims that he could only be "aulted "or breaching P,D#$s rules and regulations which prohibited the employees "rom bringing home company materials. In this regard, petitioner e(acerbates his position. By admitting that he breached company rules, he buttressed his employer$s claim that he committed serious misconduct. Employees cannot ta!e company rules "or granted, especially in this case where petitioner$s breach involved various plant materials that may cause ma)or disruption in the company$s operations. Indeed, an employer may discharge an employee "or re"usal to obey a reasonable company rule. As a rule, although this 4ourt leans over bac!wards to help wor!ers and employees continue with their employment, acts o" dishonesty in the handling o" company property are a di""erent matter. Given these circumstances, it would have been un"air "or P,D# to !eep petitioner in its employ. Petitioner displayed actions that made him untrustworthy. #hus, as a measure o" sel" protection, P,D# validly terminated his services "or serious misconduct and loss o" con"idence.

allowed to enter the company premises by the security guard upon the instruction o" 3uben 6ng, his superior. A"ter several minutes o" begging to the guard to allow him to enter, he saw 6ng who instructed him by saying, %#anungin mo ana! mo. 8e then went home and tal!ed to his "amily and discovered that 6ng had been courting his daughter Annalyn. +ubse1uently, Annalyn tried to tal! to 6ng and convince him to spare her "ather "rom trouble but he re"used to accede. #herea"ter, Javier was terminated "rom his employment without notice. 8e was neither given the opportunity to re"ute the cause:s o" his dismissal "rom wor!. >ly Ace averred that &r. 6ng contracted Javier roughly F to E times only in a month whenever the vehicle o" its contracted hauler, was not available. 6n April /0, .00D, >ly Ace no longer needed the services o" Javier. Denying that he was their employee, >ly Ace insisted that there was no illegal dismissal. >ly Ace submitted a copy o" its agreement with the contracted hauler and copies o" ac!nowledgment receipts evidencing payment to Javier "or his contracted services on a %pa!yaw':piece rate pay basis and the latter$s signatures:initials. #he ,A dismissed the complaint "or lac! o" merit, holding that the respondents are not liable "or salary di""erentials. 6n appeal with the 2,34, the appeal was partially G3A2#ED holding respondent >,7 A4E 463P63A#I62 guilty o" illegal dismissal and non payment o" ?/th month pay. 6n appeal to the 4A, the 2,34$s "indings that Javier was indeed a "ormer employee o" >ly Ace were annulled. #he 4A reinstated the dismissal o" Javier$s complaint as ordered by the ,A. #he 4A li!ewise added that Javier$s "ailure to present pieces o" evidence pointed to the conclusion that he was not an employee o" >ly Ace. #he petitioners moved "or reconsideration, but to no avail. 8ence, an appeal to the +upreme 4ourt was "iled. ISSUES: ?. 5hether or not the petitioner was an employee o" >ly Ace. .. 5hether or not the petitioner is entitled to his monetary claims. RULING: ?. #he ,A and the 4A both concluded that Javier "ailed to establish his employment with >ly Ace. By way o" evidence on this point, all that Javier presented were his sel" serving statements purportedly showing his activities as an employee o" >ly Ace. 4learly, Javier "ailed to pass the substantiality re1uirement to support his claim. 8ence, the 4ourt sees no reason to depart "rom the "indings o" the 4A. #he 4ourt is o" the considerable view that on Javier lies the burden to pass the well settled tests to determine the e(istence o" an employer employee relationship, vi<C @?A the selection and engagement o" the employee; @.A the payment o" wages; @/A the power o" dismissal; and @GA the power to control the employee$s conduct. 6" these elements, the most important criterion is whether the employer controls or has reserved the right to control the employee not only as to the result o" the wor! but also as to the means and methods by which the result is to be accomplished. In this case, Javier was not able to persuade the 4ourt that the above mentioned elements e(ist. 2either was there competent proo" that >ly Ace engaged his services as a regular employee; that >ly Ace paid his wages as an employee, nor that >ly Ace could dictate what his conduct should be while at wor!. Javier$s allegations did not establish the attributes o" an employer employee relationship on the basis o" the above mentioned "our "old test. 5orse, Javier was not able to re"ute >ly Ace$s assertion that it had an agreement with a hauling company to underta!e the delivery o" its goods. It was also ba""ling to reali<e that Javier did not dispute >ly Ace$s denial o" his services$ e(clusivity to the company. In short, all that Javier laid down were bare allegations without corroborative proo". .. 4onsidering the above "indings, the 4ourt does not see the necessity to resolve the second issue presented. #he 4ourt$s decision does not contradict the settled rule that %payment by the piece is )ust a method o" compensation and does not de"ine the essence o" the relation.' Payment on a

BITOY JAVIER .!. FLY ACE CORPORATION FACTS: Javier "iled a complaint be"ore the 2,34 "or underpayment o" salaries and other labor standard bene"its, alleging that he was an employee o" >ly Ace per"orming tas!s at the respondent$s warehouse e(cept in instances when he would be ordered to accompany the company$s delivery vehicles, as pahinante that during his employment, he was not issued an identi"ication card and payslips by the company. 6n &ay E, .00D, he reported "or wor! but he was no longer

piece rate basis does not negate regular employment. %#he term Hwage$ is broadly de"ined in Article I- o" the ,abor 4ode as remuneration or earnings, capable o" being e(pressed in terms o" money whether "i(ed or ascertained on a time, tas!, piece or commission basis. Payment by the piece is )ust a method o" compensation and does not de"ine the essence o" the relations. #he petition was DE2IED.

re1uiring them to sign a 1uitclaim which would e""ectively bar them "rom see!ing redress against petitioners. ISSUE: 5hether or not a local private employment agency may be held liable "or breach o" contract "or "ailure to deploy a sea"arer. RULING: #he +upreme 4ourt sustained the trial court$s ruling. #he contract o" employment entered into by the plainti""s and the 4.>. +harp is an actionable document, the same contract having the essential re1uisites "or its validity. 4ontracts undergo three distinct stages, negotiation; per"ection or birth; and consummation. *nder Article ?/?F o" the 4ivil 4ode, a contract is per"ected by mere consent and "rom that moment the parties are bound not only to the "ul"illment o" what has been e(pressly stipulated but also the conse1uences which, according to their nature, may be in !eeping with good "aith, usage and law. #he +upreme 4ourt held that it is a per"ected contract o" employment. By the contract, 4.>. +harp, on behal" o" its principal, International +hipping &anagement, Inc. hired respondents as +andblaster:painter "or a / month contract with a basic monthly salary o" *+KGF0.00. #hus, the ob)ect o" the contract is the service to be rendered by the respondents on board the vessel while the cause o" the contract is the monthly compensation they e(pect to receive. #hese terms were embodied in the 4ontract o" Employment which was e(ecuted by the parties. #he agreement upon the terms o" the contract was mani"ested by the consent "reely given by both parties through their signatures in the contract. 2either parties disavow the consent they both voluntarily gave. #hus, there is a per"ected contract o" employment. #he commencement o" an employer employee relationship must be treated separately "rom the per"ection o" an employment contract. #he per"ection o" the contract which in this case coincided with the date o" e(ecution thereo", occurred when petitioner and respondent agreed on the ob)ect and the cause, as well as the rest o" the terms and conditions therein. #he commencement o" the employer employee relationship would have ta!en place had petitioner been actually deployed "rom the point o" hire. #hus, even be"ore the start o" any employer employee relationship, contemporaneous with the per"ection o" the employment contract was the birth o" certain rights and obligations, the breach o" which may give rise to a cause o" action against the erring party. Despite the "act that the employer employee relationship has not commenced due to the "ailure to deploy respondents in this case, respondents are entitled to rights arising "rom the per"ected contract o" employment, such as the right to demand per"ormance by 4.>. +harp o" its obligation under the contract. >urthermore, the +upreme 4ourt a""irms the e(emplary damages and attorney$s "ees. E(emplary damages may be awarded when a wrong"ul act is accompanied by bad "aith or when the de"endant acted in a wanton, "raudulent, rec!less, oppressive, or malevolent manner which would )usti"y an award o" e(emplary damages under article ../. o" the 4ivil 4ode. +ince the award o" e(emplary damages is proper, attorney$s "ees and cost o" the suit may also be recovered as provided under Article ..0D o" the 4ivil 4ode.

C.F. S ARP CO. .!. PIONEER INSURANCE FACTS: 5il"redo Agustin and 8ernando &inimo applied with 4.>. +harp sometime in August ?II0 as sandblasters and painters in ,ibya. A"ter passing the interview, they were re1uired to submit their passports, seaman$s boo!, 2BI clearance, employment certi"icates, certi"icates o" seminar attended and results o" medical e(amination. *pon submission o" the re1uirements, a contract o" employment was e(ecuted between respondents and 4.> +harp. #herea"ter, respondents were re1uired to attend various seminars, open ban! account with the corresponding allotment slips and attend a pre departure orientation. #hey were then advised to prepare "or immediate deployment and to report to 4.> +harp to ascertain the schedule o" their deployment. A"ter a month, respondents were yet to be deployed prompting them to re1uest "or the release o" the documents they had submitted to 4.>. +harp but it re"used to surrender the documents which led to the "iling o" the complaint be"ore the P6EA. P6EA "ound 4.>. +harp guilty o" violation o" Article/G@!A o" the ,abor 4ode. 4onse1uently 4.>. +harp$s license was suspended until the return o" the disputed documents to respondent. 6n &arch ?0, ?IIF, respondents "iled a complaint "or breach o" contract and damages against 4.>. +harp and its surety, Pioneer Insurance and +urety 4orporation be"ore the 3#4 o" Pasay 4ity. #he trial court ruled that there was violation o" the contract when 4.>. +harp "ailed to deploy and release the papers and documents o" respondents, hence, they are entitled to damages. #he trial court li!ewise upheld the cause o" action o" respondents against Pioneer Insurance, the "ormer being the actual bene"iciaries o" the surety bond. 6n appeal, 4.>. +harp and 3ocha raise )urisdictional issue J that 3#4 has no )urisdiction over the case as it is vested upon the P6EA, including money claims arising out o" or by virtue o" any contract involving wor!ers "or overseas employment. #he 4ourt o" Appeals upheld the )urisdiction o" the trial court by ruling that petitioners are stopped "rom raising such 1uestion because they have actively participated in the proceeding be"ore the trial court. #he 4A "urther held that since there is no per"ected employment contract between the parties, it is the 3#4 not the P6EA whose )urisdiction pertains only to claims arising "rom contracts involving >ilipino seamen, which has )urisdiction over the case. Despite the "inding that no contract was per"ected between the parties, the 4A ad)udged 4.>. +harp and 3ocha liable "or damages but limited the liability o" Pioneer Insurance to P?F0,000.00 pursuant to the contract o" suretyship between 4.>. +harp and Pioneer Insurance. 3ocha "iled the instant petition on the submission that there is no basis to hold him liable "or damages because 4.>. +harp has signi"ied its intention to return the documents and had in "act in"ormed respondents that they may withdraw their documents anytime. 8e introduced a new argument that he should not be held )ointly liable with 4.>. +harp considering that the company has a separate personality and that there was no showing in the complaint that he had participated in the malicious act complained. 8e adds that his liability only stems "rom the Indemnity Agreement with Pioneer and does not e(tend to respondents. CONTENTION OF T E PETITIONER: 3ocha contended that he should not be held liable with 4.>. +harp considering that the company has a separate personality. CONTENTION OF T E RESPONDENTS: 3espondents maintain that they are entitled to damages "or 4.>. +harp$s un)usti"ied re"usal to release the documents to them and "or

ARO, TIROL, ET AL. .!. NLRC FACTS: +everal employees o" private respondent Benthel Development 4orporation, including the petitioners, "iled a 4omplaint "or illegal dismissal with various money claims and prayer "or damages against the latter, in the 2,34 Arbitration Branch. #herea"ter, ,abor Arbiter rendered a decision "inding private respondent guilty o" illegal dismissal and ordering it to pay its thirty si( @/EA employees PGGE,IG0.00 as separation pay. #he employees, including the petitioners herein, appealed "rom the said decision. #he 2,34, in 2,34 4ase 2o. V 000/II ID, a""irmed the decision o" ,abor Arbiter 4arreon in its Decision dated January ?., ?III, with the modi"ication that private respondent pay bac!wages computed "rom the respective dates o" dismissal until "inality o" the decision. Private respondent, unsatis"ied with the modi"ication made by the 2,34, "iled a motion "or reconsideration. #he 2,34, however, denied the motion ruling that private respondent "ailed to establish the date o" the completion o" the pro)ect.

Aggrieved, private respondent "iled a Petition "or 4ertiorari with the 4A, assailing the decision o" the 2,34 and the denial o" its motion "or reconsideration which was dismissed "or non payment o" doc!et "ees and insu""iciency o" "orm. It "iled a motion "or reconsideration, but the latter was also denied. #hus, private respondent "iled with this 4ourt, a Petition "or 3eview on 4ertiorari. In a 3esolution dated +eptember .0, .000, this 4ourt denied the petition "or having been "iled out o" time and "or non payment o" doc!et and other law"ul "ees. #he employees, including the petitioners, upon the "inality o" this 4ourt9s resolution, "iled a &otion "or E(ecution be"ore the ,abor Arbiter o" the January ?., ?III decision. #herea"ter, the ,abor Arbiter ordered "or the issuance o" a writ o" e(ecution directing the computation o" the awards. A"terwards, private respondent "iled an appeal "rom the said 6rder with an urgent prayer "or the issuance o" a temporary restraining order and:or preliminary in)unction with public respondent 2,34. #he said appeal was denied. Public respondent remanded the case to the arbitration branch "or appropriate action. In the meantime, "i"teen @?FA employees have e(ecuted A""idavits o" >ull +ettlement a"ter having settled amicably with the private respondent. ,abor Arbiter Violeta 6rti< Bantug issued an 6rder dated July /?, .00/ "or the issuance o" a writ o" e(ecution only "or the payment o" the claims o" the twenty one @.?A remaining employees in the total amount o" PG,/D/,..F.00, which included attorney9s "ees e1uivalent to ten @?0LA percent o" the sum received as settlement by the "i"teen @?FA employees who had earlier settled with the private respondent. Public respondent, in its Decision dated June .F, .00G, a""irmed the 6rder o" ,abor Arbiter Bantug, but reduced the total amount to PG,0-/,DFD.00, inclusive o" attorney9s "ees. #herea"ter, private respondent "iled a motion "or reconsideration o" the June .F, .00G decision which was denied by the public respondent, but not be"ore the admittance o" the a""idavits o" withdrawal, release:waiver and 1uitclaim e(ecuted by another group o" "ourteen @?GA employees, leaving unresolved only the claims o" the petitioners herein. #hus, in the resolution o" the private respondent9s motion "or reconsideration, the award was reduced to the sum o" P?,/-G,//I.00, inclusive o" attorney9s "ees. As a recourse, private respondent "iled a petition "or certiorari with the 4A, alleging that public respondent committed grave abuse o" discretion in promulgating its assailed decision and denying its motion "or reconsideration. #he 4A granted the petition, there"ore, annulling and setting aside the decision and resolution o" the 2,34 as to the award "or bac!wages and remanded the case to the same public respondent "or the proper computation o" the bac!wages due to each o" the petitioners herein. CONTENTION OF T E RESPONDENT: +ince it has been "ound by the ,abor Arbiter and a""irmed in the assailed decision that the employees were pro)ect employees, the computation o" bac!wages should be limited to the date o" the completion o" the pro)ect and not to the "inality o" the decision. ISSUE: 5hether or not the respondent court committed grave abuse o" discretion in declaring that petitioners are pro)ect employees, considering that 2,34 Gth division had long ruled that said employees are in "act regular employees and which ruling was long con"irmed and a""irmed not only by the court o" appeals but by the +upreme 4ourt itsel". RULING: Private respondent insists that the ine1uitable, nay illegal, in a decision cannot lapse into "inality, re"erring to the computation o" the bac!wages which is not commensurate to the "actual "indings o" the ,abor Arbiter and the 2,34. Basically, according to private respondent, the 4A merely sought to correct the 2,349s and the ,abor Arbiter9s one sided and blind adherence to and:or misguided application o" strict technical rules, and their over<ealous partiality in "avor o" labor. Private respondent "urther claims that the issues presented in their earlier petitions with the 4A and this 4ourt, are not the same issues raised in the petition "or certiorari later "iled with the 4A and the decision o" which is now the sub)ect o" herein petition. Private respondent clari"ies that there is no "inal and e(ecutory ruling that petitioners were regular and not )ust pro)ect employees, hence, there was a need to "ile a petition with the 4A. #he issue as to whether

petitioners were pro)ect employees or regular employees is "actual in nature. According to the 4A, petitioners are pro)ect employees as "ound by ,abor Arbiter Ernesto 4arreon in his Decision dated &ay .D, ?IID, because they were hired "or the construction o" the 4ordova 3ee" Village 3esort in 4ordova, 4ebu, which was later on a""irmed by the 2,34 in its January ?., ?III decision. #he 4ourt agrees with the "indings o" the 4A that petitioners were pro)ect employees. It is not disputed that petitioners were hired "or the construction o" the 4ordova 3ee" Village 3esort in 4ordova, 4ebu. By the nature o" the contract alone, it is clear that petitioners9 employment was to carry out a speci"ic pro)ect. 8ence, the 4A did not commit grave abuse o" discretion when it a""irmed the "indings o" the ,abor Arbiter. #here"ore, being pro)ect employees, petitioners are only entitled to "ull bac!wages, computed "rom the date o" the termination o" their employment until the actual completion o" the wor!. Illegally dismissed wor!ers are entitled to the payment o" their salaries corresponding to the une(pired portion o" their employment where the employment is "or a de"inite period. In this case, as "ound by the 4A, the 4ordova 3ee" Village 3esort pro)ect had been completed in 6ctober ?IIE and private respondent herein had signi"ied its willingness, by way o" concession to petitioners, to set the date o" completion o" the pro)ect as &arch ?D, ?II-; hence, the latter date should be considered as the date o" completion o" the pro)ect "or purposes o" computing the "ull bac!wages o" petitioners.

AILING .!. FELICIANO, ET AL. FACTS: 3espondent 5ide 5ide 5orld E(press 4orporation @555E4A o""ered to employ petitioner Armando Aliling as Account E(ecutive o" +ea"reight +ales. #he o""er came with a E month probation period conditioned with this e(press caveatC =Per"ormance during probationary period shall be made as basis "or con"irmation to 3egular or Permanent +tatus.= 6n June ??, .00G, Aliling and 555E4 in!ed an Employment 4ontract under the "ollowing terms, among othersC M4onversion to regular status shall be determined on the basis o" wor! per"ormance; and MEmployment services may, at any time, be terminated "or )ust cause or in accordance with the standards de"ined at the time o" engagement. 8owever, instead o" a +ea"reight +ale assignment, 555E4 as!ed Aliling to handle Ground E(press @GNA, a new company product launched on June ?D, .00G involved in domestic cargo "orwarding service "or ,u<on. &ar!eting this product and "inding daily contracts "or it "ormed the core o" Aliling$s new assignment. 6n 6ctober G, .00G, Aliling "iled a 4omplaint "or illegal dismissal due to "orced resignation, nonpayment o" salaries as well as damages with the 2,34 against 555E4. Appended to the complaint was Aliling$s A""idavit dated 2ovember ?., .00G, in which he statedC =F. At the time o" my engagement, respondents did not ma!e !nown to me the standards under which I will 1uali"y as a regular employee.= 3e"uting Aliling$s basic posture, 555E4 stated in its Position Paper dated 2ovember .., .00G that, in addition to the letter o""er and employment contract adverted to, 555E4 and Aliling have signed a letter o" appointment on June ??, .00G containing the "ollowing terms o" engagementC Additionally, upon the e""ectivity o" your probation, you and your immediate superior are re1uired to )ointly de"ine your ob)ectives compared with the )ob re1uirements o" the position. Based on the pre agreed ob)ectives, your per"ormance shall be reviewed on the /rd month to assess your competence and wor! attitude. #he Fth month Per"ormance Appraisal shall be the basis in elevating or con"irming your employment status "rom Probationary to 3egular. >ailure to meet the )ob re1uirements during the probation stage means that your services may be terminated without prior notice and without recourse to separation pay. 555E4 also attached to its Position Paper a memo dated +eptember .0, .00G in which +an &ateo as!ed Aliling to e(plain why he should not be terminated "or "ailure to meet

the e(pected )ob per"ormance, considering that the load "actor "or the GN +huttles "or the period July to +eptember was only 0.?DL as opposed to the allegedly agreed upon load o" D0L targeted "or August F, .00G. According to 555E4, Aliling, instead o" e(plaining himsel", simply submitted a resignation letter. In a 3eply A""idavit dated December ?/, .00G, Aliling denied having received a copy o" +an &ateo$s +eptember .0, .00G letter. #he ,abor Arbiter @,AA declared Aliling$s termination as un)usti"ied and ordered 555E4 to pay Aliling his salaries and bene"its, ?/th month pay and attorney$s "ees. #he ,A gave credence to Aliling$s allegation about not receiving and, there"ore, not bound by, +an &ateo$s purported +eptember .0, .00G memo. #he memo, to reiterate, supposedly apprised Aliling o" the sales 1uota he was, but "ailed, to meet. Pushing the point, the labor arbiter e(plained that Aliling cannot be validly terminated "or non compliance with the 1uota threshold absent a prior advisory o" the reasonable standards upon which his per"ormance would be evaluated. Both parties appealed the above decision to the 2,34, which a""irmed the Decision in toto in its 3esolution dated &ay /?, .00-. #he separate motions "or reconsideration were also denied by the 2,34 in its 3esolution dated August /?, .00-. Aliling went on certiorari to the 4A, which eventually rendered a Decision on the "ollowing premisesC @aA respondents "ailed to prove that Aliling$s dismal per"ormance constituted gross and habitual neglect necessary to )usti"y his dismissal; @bA not having been in"ormed at the time o" his engagement o" the reasonable standards under which he will 1uali"y as a regular employee, Aliling was deemed to have been hired "rom day one as a regular employee; and @cA the strained relationship e(isting between the parties argues against the propriety o" reinstatement. CONTENTION OF T E PETITIONER: 4ontends that he is a regular employee "rom the time he signed the employment contract. 8e was illegally dismissed and that he is entitled to bac!wages and separation pay i" not entitled to reinstatement. CONTENTION OF T E RESPONDENT: 555E4 contends that Aliling was hired on a probationary basis and "ired him be"ore he became a regular employee. ISSUES: ?. 5hether or not the petitioner is a regular employee o" respondent. .. 5hether or not the petitioner was illegally dismissed. RULING: ?. #he petitioner Aliling is a regular employee. #he employee concerned !new, having been duly in"ormed during his engagement, o" the standards "or becoming a regular employee. #his is in star! contrast to the instant case where the element o" being in"ormed o" the regulari<ing standards does not obtain. #o note, the June ., .00G letter o""er itsel" states that the regulari<ation standards or the per"ormance norms to be used are still to be agreed upon by Aliling and his supervisor. 555E4 has "ailed to prove that an agreement as regards thereto has been reached. 4learly then, there were actually no per"ormance standards to spea! o". And lest it be overloo!ed, Aliling was assigned to GN truc!ing sales, an activity entirely di""erent to the +ea"reight +ales he was originally hired and trained "or. #hus, at the time o" his engagement, the standards relative to his assignment with GN sales could not have plausibly been communicated to him as he was under +ea"reight +ales. Based on the "acts established in this case in light o" e(tant )urisprudence, the 4A$s holding as to the !ind o" employment petitioner en)oyed is correct. +o was the 2,34 ruling, a""irmatory o" that o" the labor arbiter. In the "inal analysis, one common thread runs through the holding o" the labor arbiter, the 2,34 and the 4A, i.e., petitioner Aliling, albeit hired "rom management$s standpoint as a probationary employee, was deemed a regular employee by "orce Art .D? o" the ,abor 4ode which provides that an employee who is allowed to wor! a"ter probationary period shall be considered a regular employee. +ection E@dA o" the Implementing 3ules o" Boo! VI, 3ule VIII A o" the ,abor 4ode provides that in all cases o" probationary employment, the employer shall ma!e !nown to the employee the standards

under which he will 1uali"y as a regular employee at the time o" his engagement. 5here no standards are made !nown to the employee at that time, he shall be deemed a regular employee. #he a"ore1uoted +ection E o" the Implementing 3ules o" Boo! VI, 3ule VIII A o" the 4ode speci"ically re1uires the employer to in"orm the probationary employee o" such reasonable standards at the time o" his engagement, not at any time later which 555E4 made; else, the latter shall be considered a regular employee. #hus, pursuant to the e(plicit provision o" Article .D? o" the ,abor 4ode, +ection E@dA o" the Implementing 3ules o" Boo! VI, 3ule VIII A o" the ,abor 4ode and settled )urisprudence, petitioner Aliling is deemed a regular employee as o" June ??, .00G, the date o" his employment contract. .. Petitioner was illegally dismissed. #o )usti"y "ully the dismissal o" an employee, the employer must, as a rule, prove that the dismissal was "or a )ust cause and that the employee was a""orded due process prior to dismissal. As a complementary principle, the employer has the onus o" proving with clear, accurate, consistent, and convincing evidence the validity o" the dismissal. 555E4 had "ailed to discharge its twin burden in the instant case. #he attendant circumstances in the instant case aptly show that the issue o" petitioner$s alleged "ailure to achieve his 1uota, as a ground "or terminating employment, stri!es the 4ourt as a mere a"terthought on the part o" 555E4. 4onsiderC ,ariosa$s letter o" +eptember .F, .00G already betrayed management$s intention to dismiss the petitioner "or alleged unauthori<ed absences. Aliling was in "act made to e(plain and he did so satis"actorily. But, lo and behold, 555E4 nonetheless proceeded with its plan to dismiss the petitioner "or non satis"actory per"ormance, although the corresponding termination letter dated 6ctober E, .00G did not even speci"ically state Aliling$s =non satis"actory per"ormance,= or that Aliling$s termination was by reason o" his "ailure to achieve his set 1uota. 5hat 555E4 considered as the evidence purportedly showing it gave Aliling the chance to e(plain his inability to reach his 1uota was a purported +eptember .0, .00G memo o" +an &ateo addressed to the latter. 8owever, Aliling denies having received such letter and 555E4 has "ailed to re"ute his contention o" non receipt. In net e""ect, 555E4 was at a loss to e(plain the e(act )ust reason "or dismissing Aliling. At any event, assuming "or argument that the petitioner indeed "ailed to achieve his sales 1uota, his termination "rom employment on that ground would still be un)usti"ied. In "ine, an employee$s "ailure to meet sales or wor! 1uotas "alls under the concept o" gross ine""iciency, which in turn is analogous to gross neglect o" duty that is a )ust cause "or dismissal under Article .D. o" the 4ode. 8owever, in order "or the 1uota imposed to be considered a valid productivity standard and thereby validate a dismissal, management$s prerogative o" "i(ing the 1uota must be e(ercised in good "aith "or the advancement o" its interest. #he duty to prove good "aith, however, rests with 555E4 as part o" its burden to show that the dismissal was "or a )ust cause. 555E4 must show that such 1uota was imposed in good "aith. #his 555E4 "ailed to do, perceptibly because it could not. #he "act o" the matter is that the alleged imposition o" the 1uota was a desperate attempt to lend a semblance o" validity to Aliling$s illegal dismissal. Being an e(perimental activity and having been launched "or the "irst time, the sales o" GN services could not be reasonably 1uanti"ied. #his would e(plain why Amador implied in her email that other bases besides sales "igures will be used to determine Aliling$s per"ormance. And yet, despite such a neutral observation, Aliling was still dismissed "or his dismal sales o" GN services. In any event, 555E4 "ailed to demonstrate the reasonableness and the bona "ides on the 1uota imposition. Employees must be reminded that while probationary employees do not en)oy permanent status, they en)oy the constitutional protection o" security o" tenure. #hey can only be terminated "or cause or when they otherwise "ail to meet the reasonable standards made !nown to them by the employer at the time o" their engagement. 3espondent 555E4 miserably "ailed to prove the termination o"

petitioner was "or a )ust cause nor was there substantial evidence to demonstrate the standards were made !nown to the latter at the time o" his engagement. 8ence, petitioner$s right to security o" tenure was breached. >urther, Aliling$s right to procedural due process was violated. As earlier stated, to e""ect a legal dismissal, the employer must show not only a valid ground there"or, but also that procedural due process has properly been observed. 5hen the ,abor 4ode spea!s o" procedural due process, the re"erence is usually to the two @.A written notice rule envisaged in the ,abor 4ode which providesC @aA A written notice served on the employee speci"ying the ground or grounds "or termination, and giving to said employee reasonable opportunity within which to e(plain his side;@bA A hearing or con"erence during which the employee concerned, with the assistance o" counsel i" the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and @cA A written notice Oo"P termination served on the employee indicating that upon due consideration o" all the circumstance, grounds have been established to )usti"y his termination. In case o" termination, the "oregoing notices shall be served on the employee$s last !nown address. 8ere, the "irst and second notice re1uirements have not been properly observed, thus tainting petitioner$s dismissal with illegality. #he adverted memo dated +eptember .0, .00G o" 555E4 supposedly in"orming Aliling o" the li!elihood o" his termination and directing him to account "or his "ailure to meet the e(pected )ob per"ormance would have had constituted the =charge sheet,= su""icient to answer "or the "irst notice re1uirement, but "or the "act that there is no proo" such letter had been sent to and received by him. In "act, in his December ?/, .00G 4omplainant$s 3eply A""idavit, Aliling goes on to tag such letter:memorandum as "abrication. 555E4 did not adduce proo" to show that a copy o" the letter was duly served upon Aliling. 4learly enough, 555E4 did not comply with the "irst notice re1uirement. 2either was there compliance with the imperatives o" a hearing or con"erence. #he 4ourt need not dwell at length on this particular breach o" the due procedural re1uirement. +u""ice it to point out that the record is devoid o" any showing o" a hearing or con"erence having been conducted. 6n the contrary, in its 6ctober ?, .00G letter to Aliling, or barely "ive @FA days a"ter it served the notice o" termination, 555E4 ac!nowledged that it was still evaluating his case. And the written notice o" termination itsel" did not indicate all the circumstances involving the charge to )usti"y severance o" employment.

petitioner$s complaint "or want o" an employer employee relationship between the parties. 6n appeal, the 2,34 reversed the ,abor Arbiter$s decision and declared that petitioner had been illegally dismissed. It ordered the payment o" unpaid salaries, bac!wages and ?/th month pay, separation pay and attorney$s "ees. 3espondents moved "or the reconsideration o" the 2,34 decision, but such was denied. 6n petition to the 4ourt o" Appeals, the 4A agreed that no employer employee relationship e(isted between petitioner B44 and the private respondent. #he 4A denied petitioner$s motion "or reconsideration, hence, this petition. CONTENTION OF T E PETITIONER: #o prove his employment with B44, petitioner o""ered the "ollowing, among othersC @aA B44 Identi"ication 4ard @IDA issued to him stating his name and his position as %comptroller,' and bearing his picture, his signature, and the signature o" #y; and @bA a payroll o" B44 "or the period o" 6ctober ? ?F, ?IIE that petitioner approved as comptroller. 5ith regards to his a""idavit e(ecuted in &arch ?IIE, petitioner contends that such did not establish the absence o" an employer employee relationship between him and respondents because it had been e(ecuted a"ter his employment with respondents had been terminated; and that the a""idavit re"erred to his subse1uent employment by +>4 "ollowing the termination o" his employment by B44. CONTENTION OF T E RESPONDENT: 3espondents denied that petitioner was B44$s employee. #hey a""irmed that +>4 had installed petitioner as its comptroller in B44 to oversee and supervise +>4$s collections and the account o" B44 to protect +>4$s interest; that their issuance o" the ID to petitioner was only "or the purpose o" "acilitating his entry into the B44 premises in relation to his wor! o" overseeing the "inancial operations o" B44 "or +>4; and that petitioner e(ecuted an a""idavit in &arch ?IIE, stating, among others, as "ollowsC ?. I am a 4PA @4erti"ied Public AccountantA by pro"ession but presently associated with, or employed by, +obien >ood 4orporation (((; .. In the course o" my association with, or employment by, +obien >ood 4orporation, I have been entrusted by my employer to oversee and supervise collections on account o" receivables due +>4 "rom its customers or clients ISSUE: 5hether or not an employer employee relationship e(isted between petitioner and B44. RULING: #here is no employer employee between petitioner and respondent. relationship

JAO .!. BCC PRODUCT SALES FACTS: Petitioner 4harlie Jao maintains that respondent B44 Product +ales Inc. @B44A and its President, respondent #errance #y employed him as comptroller starting "rom +eptember ?IIF with a monthly salary o" P.0,000.00 to handle the "inancial aspect o" B44$s business. 8owever, on 6ctober ?I,?IIF, the security guards o" B44, acting upon the instruction o" #y, barred him "rom entering the premises o" B44 where he then wor!ed. 8is attempts to report to wor! were "rustrated because he continued to be barred "rom entering the premises o" B44. #hus, he "iled a complaint "or illegal dismissal, reinstatement with "ull bac!wages, non payment o" wages, damages and attorney$s "ees. 3espondents countered that petitioner was not their employee but the employee o" +obien >ood 4orporation @+>4A, the ma)or creditor and supplier o" B44; and that +>4 had posted him as its comptroller in B44 to oversee B44$s "inances and business operations and to loo! a"ter +>4$s interests or investments in B44. #he ,abor Arbiter ruled in "avor o" petitioner but the 2,34 vacated the ruling and remanded the case "or "urther proceedings. #herea"ter, a new ,abor Arbiter dismissed

6n the a""idavit o" petitioner, the 4ourt "ound that such a""idavit actually supported the contention that petitioner had really wor!ed in B44 as +>4$s representative. It is more believable that petitioner$s a""idavit was re"erring to his employment by +>4 even while he was reporting to B44 as a comptroller. Petitioner e(ecuted the a""idavit in &arch ?IIE to re"ute a statement #y made in his own a""idavit to the e""ect that petitioner had illegally appropriated some chec!s without authority "rom B44. Petitioner thereby sought to show that he had the authority to receive the chec!s pursuant to the arrangements between +>4 and B44. 2aturally, the circumstances petitioner adverted to in such a""idavit concerned those occurring when he actually wor!ed as comptroller in B44. >urther, an a""idavit by Al"redo +o, the President o" +>4, lent credence to respondents$ denial o" petitioner$s employment. +o declared in that a""idavit, among others, that he had !nown petitioner "or being %earlier his retained accountant having his own o""ice but did not hold o""ice' in +>4$s premises; and that #y had approached him %loo!ing "or an accountant or comptroller to be employed by him in B44$s distribution business' o" +>4$s general merchandise. &oreover, in determining the presence or absence o" an employer employee relationship, the 4ourt has consistently loo!ed "or the "ollowing incidents, to witC @aA the selection and engagement o" the employee; @bA the payment o" wages; @cA the power o" dismissal; and @dA the employer$s power to control the employee on the means and methods by which

the wor! is accomplished. #he last element, the so called control test, is the most important element. All these "our elements are absent in the present case. >irst, there is no proo" that the services o" the private respondent were engaged to per"orm the duties o" a comptroller in the petitioner company. #here is no proo" that the private respondent has undergone a selection procedure as a standard re1uisite "or employment, especially with such a delicate position in the company. 2either is there any proo" o" his appointment nor is there any showing that the parties entered into an employment contract. +econd, as clearly established on record, the private respondent was not included in the petitioner company$s payroll during the time o" his alleged employment with the "ormer. #he name o" 4harlie Jao appears therein as a comptroller who is authori<ed to approve the same. +u""ice it to state that it is rather obscure "or a certi"ied public accountant doing the "unctions o" a comptroller "rom +eptember ?IIF up to December ?IIF not to receive his salary during the said period. 4oming now to the most controlling "actor, the records indubitably reveal the undisputed "act that the petitioner company did not e(ercise the power o" control over the private respondent. It did not prescribe the manner by which the wor! is to be carried out, or the time by which the private respondent has to report "or and leave "rom wor!. #he decision o" the 4A was a""irmed.

in good "aith "or the advancement o" the employer$s interest and not "or purposes o" de"eating the rights o" employees, such will be upheld. .. 7mbong was not illegally dismissed. 8e was deemed resigned when he ran "or councilor pursuant to the company policy which is valid. 8e was separated "rom AB+ 4B2 because he resigned and not because he was terminated. +ince there is no termination to spea! o", the re1uirement o" due process in dismissal cases cannot be applied. #hus, AB+ 4B2 is not duty bound to as! 7mbong to e(plain why he did not tender his letter o" resignation.

NEGROS SLAS ERS, ET AL. .!. TENG FACTS: 3espondent Alvin #eng is a pro"essional bas!etball player. 6n >ebruary G, ?III, #eng signed a / year contract with the ,aguna ,a!ers. Be"ore the e(piration o" his contract with the ,aguna ,a!ers on December /?, .00?, the ,a!ers traded and:or trans"erred #eng to 2egros +lashers@2egrosA, with the latter assuming the obligations o" ,aguna ,a!ers under #eng$s une(pired contract. 6n &arch .D, .000, the management o" the ,aguna ,a!ers "ormally in"ormed #eng o" his trans"er to the 2egros. #eng e(ecuted with the 2egros the Player$s 4ontract o" Employment. 6n Game 2umber G o" the &BA 4hampionship 3ound "or the year .000 season, #eng had a below par playing per"ormance. Because o" this, the coaching sta"" decided to pull him out o" the game. #eng then sat on the bench, untied his shoelaces and donned his practice )ersey. 6n the "ollowing game, Game 2umber F o" the 4hampionship 3ound, #eng called in sic! and did not play. 4onse1uently, the >inance 8ead o" 2egros wrote #eng re1uiring him to e(plain in writing why no disciplinary action should be ta!en against him "or his absence during the crucial Game F o" the 2ational 4hampionship 3ound. 8e was "urther in"ormed that a "ormal investigation would be conducted. A"ter the hearing, the management o" 2egros, in"ormed #eng o" his termination "rom the team. #he ,abor Arbiter ruled that #eng$s dismissal is illegal ruling that the penalty o" dismissal was not )usti"ied since the grounds relied upon by petitioners did not constitute serious misconduct or will"ul disobedience or insubordination that would call "or the e(treme penalty o" dismissal "rom service. 6n appeal, the 2,34 dismissed the complaint "or being premature since the arbitration proceedings be"ore the 4ommissioner o" the &BA were still pending when #eng "iled his complaint "or illegal dismissal. #he 4A upheld the order o" the ,abor Arbiter holding that the grounds relied upon by 2egros were not enough to merit the supreme penalty o" dismissal. CONTENTION OF T E PETITIONERS: #he petitioners contend that there was )ust cause "or the dismissal o" respondent, hence, they could not be charged o" illegal dismissal. ISSUE: 5hether terminated. or not the respondent was illegally

YMBONG .!. ABS-CBN FACTS: Petitioner Ernesto 7mbong is a television talent o" respondent AB+ 4B2 4ebu. Patalinghug also wor!ed "or AB+ 4B2 4ebu as talent, director and scriptwriter. AB+ 4B2 issued a company policy that any employee who intends to run "or any public position must "ile his letter o" resignation and any employee who intends to openly and aggressively campaign "or a candidate must "ile a leave o" absence during the campaign period. Because o" the policy, Patalinghug tendered his letter o" resignation because he will be running in the &ay ?IID elections. 7mbong also approached the station manager and told that the will be on leave o" absence because he will be campaigning "or the administration tic!et. 8owever, it was only a"ter the election that AB+ 4B2 "ound out that 7mbong actually ran "or councilor. Both 7mbong and Patalinghug lost in the election. #hey tried to come bac! to AB+ 4B2. 6ut o" liberality allowed 7mbong and Patalinghug to "inish their pending drama series. A"ter the drama series, AB+ 4B2 terminated 7mbong and Patalinghug. 8ence, both "iled a complaint "or illegal dismissal. #he ,abor Arbiter ruled that they were illegally dismissed. 6n appeal, the 2,34 upheld the dismissal o" Patalinghug based on his letter o" resignation. 8owever, it ruled that 7mbong was illegally dismissed. #he 4A reversed the 2,34 decision and upheld the dismissal o" 7mbong. CONTENTION OF T E PETITIONER: 7mbong maintained that the company policy is illegal "or being violative o" his right to su""rage. Also, he was denied due process when he was automatically resigned without being given the opportunity to e(plain why he did not tender his letter o" resignation. ISSUES: ?. 5hether or not the company policy is illegal "or violating the right o" su""rage. .. 5hether or not 7mbong was illegally dismissed. RULING: ?. #he company policy is valid. #he rationale behind the policy is "or AB+ 4B2 to remain apolitical. #he employee, in case he wins the election cannot serve the government and at the same time, AB+ 4B2. In such cases, not only the interest o" the company would be pre)udiced but also public interest. It is the company$s ob)ective to remain politically independent and unattached to any political individual or entity. #he policy was passed to protect the company "rom any public misconception and to preserve its ob)ectivity, neutrality and credibility. As long as a company$s management prerogatives are e(ercised

RULING: 7E+. #he court "inds penalty o" dismissal was indeed too harsh. 5hile the employer has the inherent right to discipline, including that o" dismissing its employees, this prerogative is sub)ect to the regulation by the +tate in the e(ercise o" its police power. In this regard, it is a hornboo! doctrine that in"ractions committed by an employee should merit only the corresponding penalty demanded by the circumstance. #he penalty must be commensurate with the act, conduct or omission imputed to the employee and must be imposed in connection with the disciplinary authority o" the employer. In the case at bar, the penalty handed out by the petitioners was the ultimate penalty o" dismissal. #here was no warning or admonition "or respondent$s violation o" team rules, only outright termination o" his services "or an act which could have been punished appropriately with a severe reprimand or suspension.

LYNVIL FIS ING .!. ARIOLA FACTS: ,ynvil >ishing Enterprises, Inc. @,ynvilA is a company engaged in deep sea "ishing, operated and managed by 3osendo +. de Bor)a. 6n Aug ?, ?IID, a report was received

"rom a witness that the herein respondents conspired with one another and stole eight @DA tubs o" =pampano= and =tangigue= "ish and delivered them to another vessel, to the pre)udice o" ,ynvil. By reason o" the report and a"ter initial investigation, ,ynvil$s General &anager 3osendo +. De Bor)a @De Bor)aA summoned respondents to e(plain within "ive @FA days why they should not be dismissed "rom service. 8owever, e(cept "or Alcovendas and BaQe<, the respondents re"used to sign the receipt o" the notice. >ailing to e(plain as re1uired, respondents$ employment was terminated. ,ynvil, through De Bor)a, "iled a criminal complaint against the dismissed employees. Aggrieved, the employees "iled with the Arbitration Branch o" the 2ational ,abor 3elations 4ommission 2ational 4apital 3egion on .F August ?IID a complaint "or illegal dismissal with claims "or bac!wages, salary di""erential reinstatement, service incentive leave, holiday pay and its premium and ?/th month pay "rom ?IIE to?IID. #hey also claimed "or moral, e(emplary damages and attorney$s "ees "or their dismissal with bad "aith. #he ,abor Arbiter "ound merit in complainants$ charge o" illegal dismissal. 2,34 reversed such decision and entered a new one dismissing the present complaints "or utter lac! o" merits. 8owever on appeal to the 4A, the latter reinstated the decision o" the 2,34, hence this appeal. CONTENTION OF T E PETITIONERS: #he "inding o" the criminal case "iled against respondents is a su""icient basis "or valid termination o" employment based on serious misconduct and:or loss o" trust and con"idence. ISSUE: 5hether or not the respondents were illegally dismissed. RULING: #he 4ourt ruled that such dismissal was valid based on the positive and clear narration o" "acts o" the three witnesses to the commission o" 1uali"ied the"t. Just cause is re1uired "or a valid dismissal. #he ,abor 4ode provides that an employer may terminate an employment based on "raud or will"ul breach o" the trust reposed on the employee. +uch breach is considered will"ul i" it is done intentionally, !nowingly, and purposely, without )usti"iable e(cuse, as distinguished "rom an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must also be based on substantial evidence and not on the employer$s whims or caprices or suspicions otherwise, the employee would eternally remain at the mercy o" the employer. ,oss o" con"idence must not be indiscriminately used as a shield by the employer against a claim that the dismissal o" an employee was arbitrary. And, in order to constitute a )ust cause "or dismissal, the act complained o" must be wor! related and shows that the employee concerned is un"it to continue wor!ing "or the employer. In addition, loss o" con"idence as a )ust cause "or termination o" employment is premised on the "act that the employee concerned holds a position o" responsibility, trust and con"idence or that the employee concerned is entrusted with con"idence with respect to delicate matters, such as the handling or care and protection o" the property and assets o" the employer. #he betrayal o" this trust is the essence o" the o""ense "or which an employee is penali<ed. Breach o" trust is present in this case.

D&4I denied liability. It argued that it hired Jamin on a pro)ect to pro)ect basis, "rom the start o" his engagement in ?IED until &arch .0, ?III where Jamin last wor!ed. ISSUE: 5hether or not Jamin is a regular employee. RULING: 7es. It is based onC @?A Jamin$s repeated and successive rehiring in D&4I$s various pro)ects; and @.A the nature o" his wor! in the pro)ects he was per"orming activities necessary or desirable in D&4I$s construction business. #he pattern o" Jamin$s rehiring and the recurring need "or his services are su""icient evidence o" the necessity and indispensability o" such services to D&4I$s business or trade, a !ey indicator o" regular employment. It opined that although Jamin started as a pro)ect employee, the circumstances o" his employment made it regular or, at the very least has ripened into a regular employment. In ,igan<a v. 3B, +hipyard 4orporation, it was held that %Assuming, without granting, that the petitioner was initially hired "or speci"ic pro)ects or underta!ings, the repeated re hiring and continuing need "or his services "or over eight @DA years have undeniably made him a regular employee.' 5e "ind the ,igan<a ruling s1uarely applicable to this case, considering that "or almost /? years, D&4I had repeatedly, continuously and successively engaged Jamin$s services. ,ength o" time is not the controlling test "or pro)ect employment. 2evertheless, it is vital in determining i" the employee was hired "or a speci"ic underta!ing or tas!ed to per"orm "unctions vital, necessary and indispensable to the usual business or trade o" the employer. 8ere, Jamin had been a pro)ect employee several times over. 8is employment ceased to be coterminous with speci"ic pro)ects when he was repeatedly re hired due to the demands o" petitioner$s business. 8aving "ound Jamin to be a regular employee, the 4A declared his dismissal illegal as it was without a valid cause and without due process.

CANADIAN OPPORTUNITIES UNLIMITED .!. DALANGIN FACTS: 3espondent Bart Dalangin Jr. was hired by petitioner company as Immigration and ,egal &anager with a monthly salary o" P?F,000.00. 8e was placed on probation "or si( months. 8e was to report directly to the 4hie" 6perations 6""icer, Annie ,laman<ares Abad. 8is tas!s involved principally the review o" the clients$ applications "or immigration to 4anada to ensure that they are in accordance with 4anadian and Philippine laws. 6n 6ctober .-, .00?, the company terminated Dalangin$s employment, declaring him %un"it' and %un1uali"ied' to continue as Immigration and ,egal &anager. #he ,abor Arbiter ruled in "avor o" Dalangin but later such decision was reversed by the 2,34. #hen, the 4ourt o" Appeals declared the dismissal o" Dalangin illegal. CONTENTION OF T E PETITIONER: Dalangin is under probation so he can be removed anytime i" he does not 1uali"y "or the position where he is employed. Accordingly, Dalangin lac!s interpersonal s!ills that are needed "or the position he holds. 8e also lac!s enthusiasm and is indi""erent to the other employees. CONTENTION OF T E RESPONDENT: #he petitioner contends that he was illegally dismissed without any legal grounds. ISSUE: 5hether or not the respondent, who probationary employee, was illegally terminated. was a

D.M. CONSUNJI .!. ESTELITO FACTS: 6n December ?-, ?IED, petitioner D.&. 4onsun)i, Inc. @D&4IA, a construction company, hired respondent Estelito ,. Jamin as a laborer. +ince his initial hiring, Jamin$s employment contract had been renewed a number o" times. 6n &arch .0, ?III, his wor! at D&4I was terminated due to the completion o" one o" D&4I$s pro)ect. #his termination mar!ed the end o" his employment at D&4I as he was not rehired again. 6n April F, ?III, Jamin "iled a complaint "or illegal dismissal, against D&4I and its President:General &anager, David &. 4onsun)i. Jamin alleged that D&4I terminated his employment without a )ust and authori<ed cause at a time when he was already FF years old and had no independent source o" livelihood. 8e claimed that he rendered service to D&4I continuously "or almost /? years.

RULING: 2o. #he essence o" a probationary period o" employment "undamentally lies in the purpose or ob)ective o" both the employer and the employee during the period. 5hile the employer observes the "itness, propriety and e""iciency o" a probationer to ascertain whether he is 1uali"ied "or permanent employment, the latter see!s to prove to the "ormer that he has the 1uali"ications to meet the reasonable

standards "or permanent employment. #he %trial period' or the length o" time the probationary employee remains on probation depends on the parties$ agreement, but it shall not e(ceed si( @EA months under Article .D? o" the ,abor 4ode, unless it is covered by an apprenticeship agreement stipulating a longer period. Dalangin admitted in compulsory arbitration that the pro(imate cause "or his dismissal was his re"usal to attend the company$s %Values >ormation +eminar' scheduled on 6ctober .-, .00?, a +aturday. 8is reason is that it has no relation to his duties when in "act it would help him to !now more the company policies. 8e also doesn$t want to interact with his co employees. #hese are some o" the acts proved that made Dalangin not 1uali"y "or his wor!. #he dismissal was a valid e(ercise o" management prerogative.

notice on the employer at least one @?A month in advance.= Given that provision, the law contemplates the re1uirement o" a written notice o" resignation. In the absence o" a written resignation, it is sa"e to presume that the employer terminated the sea"arers. In addition, the tele( message relied upon by the ,abor Arbiter and 2,34 bore con"licting dates o" .. January ?IID and .. January ?III, giving doubt to the veracity and authenticity o" the document. In .. January ?IID, De Gracia, et al. were not even employed yet by the "oreign principal. >or these reasons, the dismissal o" De Gracia, et al. was illegal.

JULIE1S BA0ES OP .!. ARNAIZ FACTS: 6n January .E, .000, respondents who were hired as chie" ba!ers by 3eyes in his three "ranchise branches o" Julie$s Ba!eshop in Anti1ue "iled separate complaints against petitioners "or underpayment o" wages, payment o" premium pay "or holiday and rest day, service incentive leave pay, ?/th month pay, cost o" living allowance @46,AA and attorney$s "ees. #hese complaints were later on consolidated. +ubse1uently on >ebruary ?E, .000, 3eyes reassigned respondents as utility:security personnel tas!ed to clean the outside vicinity o" his ba!eshops and to maintain peace and order in the area without diminution in pay and other privileges. 3espondents, however, re"used to sign the same and li!ewise re"used to per"orm their new assignments by not reporting "or wor!. In a letter memorandum dated &arch ?/, .000, 3eyes directed respondents to report bac! "or wor! and to e(plain why they "ailed to assume their duties as utility:security personnel. A second letter memorandum o" the same tenor dated &arch .D, .000 was also sent to respondents. 3espondents did not heed both memoranda. It was agreed that the parties would enter into a compromise agreement on &arch -, .000. 8owever, on >ebruary .I, .000, respondents, who were then represented by a di""erent counsel, amended their complaints by including in their causes o" action illegal dismissal and a claim "or reinstatement and bac!wages. 3eali<ing the "utility o" "urther resetting the case due to the continued non appearance o" the 3espondents "or the supposed signing o" the compromise agreement, the ,abor Arbiter ordered the parties to "ile their respective position papers. 6n August .F, .000, the ,abor Arbiter resolved to dismiss the complaints without pre)udice as respondents$ position paper was "iled late and no evidence was attached to prove the allegations therein. #he respondents "iled a )oint appeal with the 2,34. In the 2,34$s January ?-, .000 decision, the case was remanded "or purposes o" identi"ying the real respondents "or petitioners claim that 3eyes was not the employers o" Arnai< and 2apal. 3espondents "iled a &otion "or 3econsideration which was given credit by the 2,34. In its resolution it held that 3eyes was the employer o" the respondents "or "ailing to prove that he was not and presumed "or being the "ranchise owner o" the ba!eshop. It also held that the respondents were illegally dismissed and granted the relie"s available as well as their money claims. Petitioners then "iled a motion "or reconsideration. #he 2,34, in its 3esolution dated December ?D, .00/, again reconsidered its own ruling and held that respondents were not dismissed, either actually or constructively, but instead will"ully disobeyed the return to wor! order o" their employer. #he respondents then appealed to the 4ourt o" Appeals through a petition "or certiorari. #he 4ourt o" Appeals reversed the 2,34$s resolution stating that respondents were constructively dismissed since their designation "rom chie" ba!ers to utility:security personnel is undoubtedly a demotion in ran! which involved a drastic change in the nature o" wor! resulting to a demeaning and humiliating wor! condition. #he record o" this case is hereby remanded to the ,abor Arbiter "or the computation o" bac!wages, premium pay "or holidays and rest days, holiday pay, service incentive leave pay, ?/th month pay and attorney$s "ees due to the petitioners and, therea"ter, "or the payment thereo" by the private respondent 3eyes. CONTENTION OF T E PETITIONERS: Petitioners argue that the order trans"erring or reassigning respondents "rom chie" ba!ers to utility:security personnel is a valid e(ercise o" management prerogative "or it does not involve any

S0IPPERS UNITED PACIFIC .!. DOZA FACTS: +!ippers *nited Paci"ic, Inc. deployed, in behal" o" +!ippers, De Gracia, ,ata, and Aprosta to wor! on board the vessel &V 5isdom +tar. De Gracia, et al. claimed that +!ippers "ailed to remit their respective allotments "or almost "ive months, compelling them to air their grievances with the 3omanian +ea"arers >ree *nion. 6n ?E December ?IID, I#> Inspector Adrian &ihalcioiu o" the 3omanian +ea"arers *nion sent 4aptain +avvas o" 4osmos +hipping a "a( letter, relaying the complaints o" his crew, namelyC home allotment delay, unpaid salaries, late provisions, lac! o" laundry services, and lac! o" maintenance o" the vessel. #o date, however, +!ippers only "ailed to remit the home allotment "or the month o" December ?IID.6n .D January ?III, De Gracia, et al. were unceremoniously discharged "rom &V 5isdom +tars and immediately repatriated. *pon arrival in the Philippines, De Gracia, et al. "iled a complaint "or illegal dismissal with the ,abor Arbiter on G April ?III and prayed "or payment o" their home allotment "or the month o" December ?IID, salaries "or the une(pired portion o" their contracts, moral damages, e(emplary damages, and attorney9s "ees. CONTENTION OF T E PETITIONER: Aprosta, De Gracia, ,ata and Do<a, arrived in the master9s cabin and demanded immediate repatriation because they were not satis"ied with the ship. De Gracia, et al. threatened that they may become cra<y any moment and demanded "or all outstanding payments due to them. +ince De Gracia, et al. pre terminated their contracts, +!ippers claims they are liable "or their repatriation e(penses. ISSUE: 5hether or not there is illegal dismissal. RULING: 7E+. Procedural due process in dismissal cases consists o" the twin re1uirements o" notice and hearing. #he employer must "urnish the employee with two written notices be"ore the termination o" employment can be e""ectedC @?A the "irst notice apprises the employee o" the particular acts or omissions "or which his dismissal is sought; and @.A the second notice in"orms the employee o" the employer9s decision to dismiss him. Be"ore the issuance o" the second notice, the re1uirement o" a hearing must be complied with by giving the wor!er an opportunity to be heard. It is not necessary that an actual hearing be conducted. +ubstantive due process, on the other hand, re1uires that dismissal by the employer be made under a )ust or authori<ed cause under Articles .D. to .DG o" the ,abor 4ode. In this case, there was no written notice "urnished to De Gracia, et al. regarding the cause o" their dismissal. 4osmoship "urnished a written notice @tele(A to +!ippers, the local manning agency, claiming that De Gracia, et al. were repatriated because the latter voluntarily pre terminated their contracts. #his tele( was given credibility and weight by the ,abor Arbiter and 2,34 in deciding that there was pre termination o" the employment contract =a!in to resignation= and no illegal dismissal. 8owever, as correctly ruled by the 4A, the tele( message is =a biased and sel" serving document that does not satis"y the re1uirement o" substantial evidence.= I", indeed, De Gracia, et al. voluntarily pre terminated their contracts, then De Gracia, et al. should have submitted their written resignations. Article .DF o" the ,abor 4ode recogni<es termination by the employee o" the employment contract by =serving written

diminution in pay and privileges and that same is in accordance with the re1uirements o" the business to protect its goodwill and reputation as well as the health and wel"are o" the consuming public. CONTENTION OF T E RESPONDENTS: 3espondents contend that the trans"er:reassignment by the petitioner to another position constitutes constructive dismissal. ISSUES: ?. 5hether or not the 4ourt o" Appeals commit grave abuse o" discretion "or disturbing the "indings o" "acts o" the ,abor Arbiter and the 2,34. .. 5hether or not the trans"er:reassignment o" respondents to another position without diminution in pay and other privileges tantamount to constructive dismissal. RULING: ?. #he 4ourt o" Appeals is correct in reviewing the "indings o" the 2ational ,abor 3elations 4ommission. Indeed, "actual "indings o" labor o""icials who are deemed to have ac1uired e(pertise in matters within their respective )urisdictions are generally accorded not only respect, but even "inality. It is a well entrenched rule that "indings o" "acts o" the 2,34, a""irming those o" the ,abor Arbiter, are accorded respect and due consideration when supported by substantial evidence. 8owever, the doctrine o" great respect and "inality has no application to the case at bar "or the ,abor Arbiter dismissed respondents$ complaints on mere technicality and thus the 2,34 did not, on any occasion, a""irm any "actual "indings o" the ,abor Arbiter. Besides, the 4A, at any rate, may still resolve "actual issues by e(press mandate o" the law despite the respect given to administrative "indings o" "act. .. #he trans"er:reassignment o" respondents constitutes constructive dismissal. #he management is "ree to regulate, according to its own discretion and )udgment, all aspects o" employment, including hiring, wor! assignments, wor!ing methods, time, place and manner o" wor!, processes to be "ollowed, supervision o" wor!ers, wor!ing regulations, trans"er o" employees, wor! supervision, lay o"" o" wor!ers and discipline, dismissal and recall o" wor!ers. #he e(ercise o" management prerogative, however, is not absolute as it must be e(ercised in good "aith and with due regard to the rights o" labor. In constructive dismissal cases, the employer has the burden o" proving that the trans"er o" an employee is "or )ust or valid ground, such as genuine business necessity. #he employer must demonstrate that the trans"er is not unreasonable, inconvenient, or pre)udicial to the employee and that the trans"er does not involve a demotion in ran! or a diminution in salary and other bene"its. I" the employer "ails to overcome this burden o" proo", the employee$s trans"er is tantamount to unlaw"ul constructive dismissal. In this case, petitioners insist that the trans"er o" respondents was a measure o" sel" preservation and was prompted by a desire to protect the health o" the buying public, claiming that respondents should be trans"erred to a position where they could not sabotage @introduce harm"ul "oreign substances in ba!ing breadA the business pending resolution o" their cases. Petitioners$ bare assertions o" imminent threat "rom the respondents are mere accusations which are not substantiated by any proo" and are mere imaginary and not real. #his 4ourt is proscribed "rom ma!ing conclusions based on mere presumptions or suppositions. #he trans"er was a demotion in ran!. #here is demotion when an employee is trans"erred "rom a position o" dignity to a servile or menial )ob. 6ne does not need to stretch the imagination to distinguish the wor! o" a chie" ba!er to that o" a security:utility man. Although there was no diminution in pay, there was undoubtedly a demotion in titular ran!. #he petition is denied and the decision o" the 4ourt o" Appeals is a""irmed.

Aside "rom ta!ing care o" the plants, she was re1uired by Galang to be present at the premises at -C/0 a.m. until FC/0 p.m. every day, including +aturdays, +undays and 8olidays without any day o""s. Galang would visit the premises at least thrice a wee! and give her instructions on what to do. Among these instructions were tending, watering and spraying with chemicals various orchid varieties, pac!ing the orchids "or e(port purposes and cleaning the surroundings o" the hal" hectare premises. >rom ?II/ ?IIF, &alasugui was paid by Galang PG0.00 as daily wage and a"ter three years, it was increased to P-0.00 per day until >ebruary ?III. +he was also given one thousand pesos @P?, 000.00A bonus every December by Galang. &alasugui was later made to stay and live at the premises, particularly in one o" the bun! houses within the Pangi property which was vacated by the "amily driver o" Galang, so that she could watch and guard the premises even during nighttime. 8owever, she had to buy her "ood. In 2ovember ?IID, she became sic! with severe cough and as!ed "or "inancial assistance "rom Galang "or medical chec! up. #he coughing became incessant which prompted Galang to bring her to a doctor and made to undergo a series o" e(aminations including chest radiographic e(amination. #herea"ter, she was terminated "rom wor! and barred "rom entering the Pangi property. &alasugui "iled a complaint "or illegal dismissal be"ore the ,abor Arbiter. #he ,abor Arbiter rendered )udgment "inding complainant$s charge o" illegal dismissal without merit but ordered the company and Galang to pay respondent wage di""erentials and ?/th month pay because there was still employer employee relationship. Galang appealed be"ore the 2,34 and the 2,34 a""irmed the decision o" the ,abor Arbiter. 6n petition, the 4ourt o" Appeals ruled that respondent was illegally dismissed by Galang. It reinstated the award o" salary di""erential to &alasugui in addition to the ?/th month pay. >urther, because o" the ruling o" illegal dismissal against Galang, the appellate court awarded separation pay to &alasugui "or every year o" continuous service and "ull bac! wages "rom the time o" her dismissal up to the time o" the "inality o" the )udgment. 8ence this petition was "iled. CONTENTION OF T E PETITIONER: Petitioner alleged that respondent pac!ed her bags and le"t the property a"ter being scolded due to her non appearance at the medical e(amination arranged by the petitioner. #he submission is that respondent le"t the premises and abandoned her wor!. ISSUES: ?. 5hether or not the respondent has abandoned her wor!. .. 5hether or not the respondent was constructively dismissed. RULING: ?. Abandonment is a "orm o" neglect o" duty, one o" the )ust causes "or an employer to terminate an employee. It is a hornboo! precept that in illegal dismissal cases, the employer bears the burden o" proo". >or a valid termination o" employment on the ground o" abandonment, the employer must prove, by substantial evidence, the concurrence o" the employee$s "ailure to report "or wor! "or no valid reason and his categorical intention to discontinue employment. #here is in this case no substantial evidence that will prove respondent$s categorical intention to discontinue employment. 6n the contrary, the story o" abandonment is simply doubt"ul. #he 4ourt o" Appeals was correct in ruling thatC %It is not in accord with normal human e(perience and too "limsy a reason "or petitioner so circumstanced, to )ust pac! up her things and vacate the Pangi property a"ter being 1ueried on why she did not show up at the appointed time with the radiologist. #he allegation that private respondent was displeased a"ter incurring e(penses "or petitioner$s medical chec! up remained unrebutted. 8ence, petitioner$s testimony that she was prevented entry into the Pangi property appeared more credible. 3espondent has been in the employ o" petitioner "or si( years when the alleged abandonment happened. Being scolded, i" it were true, is hardly a reason "or a gardener o" si( years to )ust pac! up and leave the wor! premises where she was even

GALANG .!. MALASU2UI FACTS: 3espondent Julia &alasugui was hired by petitioner &a. &elissa Galang to ta!e care, oversee and man the premises o" the Davao 3oyal Garden 4ompound, the main compound o" Galang where the orchids and other ornamental plants used "or the business were nursed and propagated.

allowed to reside, at a time when she was ill and needed medical attention. Indeed, the alleged scolding is itsel" incredible. #he given reason was that respondent "ailed to show up at her arranged appointment with the radiologist. It is hard to believe that a sic! gardener, certainly o" minimal means, would re"use the o""er o" medical services. In "act, the basic allegation in respondent$s complaint "or illegal dismissal was that petitioner$s %treatment to her became sour especially when she re1uested that she be e(amined by a doctor "or her cough.' #here must be a concurrence o" the intention to abandon and some overt acts "rom which an employee may be deduced as having no more intention to wor!. +uch intent to discontinue the employment must be shown by clear proo" that it was deliberate and un)usti"ied. In the instant case, the overt act relied upon by petitioner is not only a doubt"ul occurrence but is, i" it did transpire, even consistent with the dismissal "rom employment posited by the respondent. #he "actual appraisal o" the 4ourt o" Appeals is correct. Petitioner was displeased a"ter incurring e(penses "or respondent$s medical chec! up and, it is credible that, therea"ter, respondent was prevented entry into the wor! premises. #his is tantamount to constructive dismissal. .. 4onstructive dismissal e(ists where there is cessation o" wor! because continued employment is rendered impossible, unreasonable or unli!ely, as an o""er involving a demotion in ran! and a diminution in pay. 4onstructive dismissal is a dismissal in disguise or an act amounting to dismissal but made to appear as i" it were not. In constructive dismissal cases, the employer is, concededly, charged with the burden o" proving that its conduct and action or the trans"er o" an employee are "or valid and legitimate grounds such as genuine business necessity. #he incredibility o" petitioner$s submission about abandonment o" wor! renders credible the position o" respondent that she was prevented "rom entering the property. #he dismissal o" respondent places upon petitioner the burden o" proo" o" legality o" dismissal. In termination cases, the burden o" proo" rests on the employer to show that the dismissal is "or )ust cause. 5hen there is no showing o" a clear, valid and legal cause "or the termination o" employment, the law considers the matter a case o" illegal dismissal and the burden is on the employer to prove that the termination was "or a valid or authori<ed cause. And the 1uantum o" proo" which the employer must discharge is substantial evidence. An employee$s dismissal due to serious misconduct must be supported by substantial evidence. +ubstantial evidence is that amount o" relevant evidence as a reasonable mind might accept as ade1uate to support a conclusion, even i" other minds, e1ually reasonable, might conceivably opine otherwise. In this case, petitioner, instead o" proving the legality o" dismissal, relied entirely on the de"ense o" abandonment. 5hen such de"ense "ell and "ailed, illegal dismissal was le"t undisputed. 8aving disposed o" the basic issues and "ound that there is an employee employer relationship between the parties and that respondent was illegally dismissed, the rest o" the disposition o" the 4ourt o" Appeals were, conse1uently, a""irmed.

already at wor!. Gala and the other members o" the crew were instructed to help in the digging o" a hole "or the pole to be installed.5hile the &eralco crew was at wor!, one 2oberto %Bing' ,lanes, a non &eralco employee, arrived. 8e appeared to be !nown to the &eralco "oremen as they were seen conversing with him. ,lanes boarded the truc!s, without being stopped, and too! out what were later "ound as electrical supplies. Aside "rom Gala, the "oremen and the other linemen who were at the wor!site when the pil"erage happened were later charged with misconduct and dishonesty "or their involvement in the incident. &eralco called "or an investigation o" the incident and as!ed Gala to e(plain. Gala denied involvement in the pil"erage, contending that even i" his superiors might have committed a wrongdoing, he had no participation in what they did. 8e maintained that his mere presence at the scene o" the incident was not su""icient to hold him liable as a conspirator. &eralco rendered a decision against Gala. #herea"ter, Gala went to the ,abor Arbiter where the complaint was dismissed "or lac! o" merit. Gala appealed to the 2ational ,abor 3elations 4ommission @2,34A. #he 2,34 reversed the ,abor Arbiter$s ruling. It "ound that Gala had been illegally dismissed, since there was no concrete showing o" complicity with the alleged misconduct:dishonesty. #he 2,34, however, ruled out Gala$s reinstatement, stating that his tenure lasted only up to the end o" his probationary period. It awarded him bac!wages and attorney$s "ees. Gala and &eralco elevated the case to the 4A. #he 4A modi"ied the 2,34 decision and ordered Gala$s reinstatement with "ull bac!wages and other bene"its. CONTENTION OF T E PETITIONER: Petitioner alleged that respondent has become un"it "or his )ob and thus, his termination is valid. ISSUE: 5hether or not there was illegal dismissal. RULING: 4ontrary to the conclusions o" the 4A and the 2,34, there is substantial evidence supporting &eralco$s position that Gala had become un"it to continue his employment with the company. Gala was "ound, a"ter an administrative investigation, to have "ailed to meet the standards e(pected o" him to become a regular employee and this "ailure was mainly due to his %undeniable !nowledge, i" not participation, in the pil"erage activities done by their group, all to the pre)udice o" the 4ompany$s interests. Gala "orgets that as a probationary employee, his overall )ob per"ormance and his behavior were being monitored and measured in accordance with the standards @i.e., the terms and conditionsA laid down in his probationary employment agreement. *nder paragraph D o" the agreement, he was sub)ect to strict compliance with, and non violation o" the 4ompany 4ode on Employee Discipline, +a"ety 4ode, rules and regulations and e(isting policies. Par. ?0 re1uired him to observe at all times the highest degree o" transparency, sel"lessness and integrity in the per"ormance o" his duties and responsibilities, "ree "rom any "orm o" con"lict or contradicting with his own personal interest. #he evidence on record established Gala$s presence in the wor!site where the pil"erage o" company property happened. It also established that it was not only on &ay .F, .00E that ,lanes, the pil"erer, had been seen during a &eralco operation. 8e had been previously noticed by &eralco employees, including Gala @based on his admissionA, in past operations. I" Gala had seen ,lanes in earlier pro)ects or operations o" the company, it is incredulous "or him to say that he did not !now why ,lanes was there or what RuQiga and ,lanes were tal!ing about. #o our mind, the &eralco crew @the "oremen and the linemenA allowed or could have even as!ed ,lanes to be there during their operations "or one and only purpose S to serve as their conduit "or pil"ered company supplies to be sold to ready buyers outside &eralco wor!sites. #he "amiliarity o" the &eralco crew with ,lanes, a non &eralco employee who had been present in &eralco "ield operations, does not contradict at all but rather support the &eralco submission that there had been %reported pil"erage' or

MERALCO .!. GALA FACTS: 6n &arch ., .00E, respondent Jan 4arlo Gala was employed by petitioner &eralco Electric 4ompany @&eralcoA as a probationary lineman. Barely "our months on the )ob, Gala was dismissed "or alleged complicity in pil"erages o" &eralco$s electrical supplies, particularly, "or the incident which too! place on &ay .F, .00E. 6n that day, Gala and other &eralco wor!ers were instructed to replace a worn out electrical pole at the Pacheco +ubdivision in Valen<uela 4ity. Gala and the other linemen were directed to )oin the group o" 2emecio 8ipolito. 5hen they arrived at the wor!site, Gala and the other wor!ers saw another crew headed by RuQiga

%rampant the"t,' by the crew, o" company property even be"ore &ay .F, .00E. #he established "act that ,lanes, a non &eralco employee, was o"ten seen during company operations, conversing with the "oremen, "or reason or reasons connected with the ongoing company operations, gives rise to the 1uestionC what was he doing thereT Apparently, he had been visiting &eralco wor!sites, at least in the Valen<uela +ector, not simply to sociali<e, but to do something else. As testi"ied to by witnesses, he was pic!ing up unused supplies and materials that were not returned to the company. >rom these "actual premises, it is not hard to conclude that this activity was "or the mutual pecuniary bene"it o" himsel" and the crew who tolerated the practice. >or one wor!ing at the scene who had seen or who had shown "amiliarity with ,lanes @a non &eralco employeeA, not to have !nown the reason "or his presence is to disregard the obvious, or at least the very suspicious. 6n the whole, the totality o" the circumstances obtaining in the case convinces us that Gala could not but have !nowledge o" the pil"erage o" company electrical supplies on &ay .F, .00E; he was complicit in its commission, i" not by direct participation, certainly, by his inaction while it was being perpetrated and by not reporting the incident to company authorities. #hus, we "ind substantial evidence to support the conclusion that Gala does not deserve to remain in &eralco$s employ as a regular employee. 8e violated his probationary employment agreement, especially the re1uirement "or him %to observe at all times the highest degree o" transparency, sel"lessness and integrity in the per"ormance o" their duties and responsibilities. 8e "ailed to 1uali"y as a regular employee.

CONTENTION OF T E PETITIONER: Petitioner insists that the ground "or the dismissal o" the respondent was his gross dereliction o" duties as 2+&. ISSUE: 5hether or not the petitioner was illegally dismissed. RULING: 2o. Pursuant to Article .DG o" the ,abor 4ode, respondent$s illness is considered an authori<ed cause to )usti"y his termination "rom employment. Article .DG o" the ,abor 4ode provides that an employer may terminate the services o" an employee who has been "ound to be su""ering "rom any disease and whose continued employment is prohibited by law or is pre)udicial to his health, as well as to the health o" his co employees. In addition, the re1uirement "or a medical certi"icate under Article .DG o" the ,abor 4ode cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the employer o" the gravity or e(tent o" the employee$s illness and, thus, de"eat the public policy on the protection o" labor. In the present case, there was no showing that prior to terminating respondent9s employment, petitioner secured the re1uired certi"ication "rom a competent public health authority that the disease he su""ered was o" such nature or at such a stage that it cannot be cured within si( months despite proper medical treatment, pursuant to +ection D, 3ule I, Boo! VI o" the 6mnibus 3ules Implementing the ,abor 4ode. 8owever, although petitioner did not comply with the medical certi"icate re1uirement be"ore respondent$s dismissal was e""ected, this was o""set by respondent9s absence "or more than the si( @EA month period that the law allows an employee to be on leave in order to recover "rom an ailment. Being the 2+&, respondent should have reported bac! to wor! or attended the investigations conducted by petitioner immediately upon being permitted to wor! by his doctors, !nowing that his position remained vacant "or a considerable length o" time. During his absence, nobody was per"orming the duties o" 2+&, which included, among others, supervising and monitoring o" respondent9s sales area which is vital to the company$s orderly operation and viability. 8e did not even show any sincere e""ort to return to wor!.

/UERT

P ILIPPINES .!. YNSON

FACTS: 3espondent 3odante 7nson is the 2ational +ales &anager @2+&A "or automotive o" petitioner 5uerth Philippines, Inc., and he was re1uired to travel to di""erent parts o" the country. 5hile in Davao, he was con"ined at the Davao Doctor9s 8ospital due to stro!e and thus he immediately in"orm the petitioner company o" his ailment with medical certi"icate as proo". 8e re1uested that administrative wor! be given to him while in Davao 4ity, until completion o" his therapy as recommended by his doctors which later on disapproved by respondent company. #herea"ter, 3icanor sent a letter dated to respondent, directing him to appear be"ore the "ormer$s o""ice in &anila, "or an investigation, relative to the "ollowing violations which carry the penalty o" suspension and:or dismissal, based on the "ollowing alleged violationsC @?A absences without leave and @.A abandonment o" wor!. 3espondent 7nson "ailed to attend and stated that his attending physician advised him to re"rain "rom traveling, in order not to disrupt his daily schedule "or therapy and medication. ,ater, 3icanor sent two letters, reiterating the contents o" his "irst letter to respondent, and included gross ine""iciency as an additional ground "or possible suspension or dismissal but respondent reiterated the reasons "or his inability to attend the investigation proceedings in &anila and, instead, suggested that 3icanor come to Davao and conduct the investigation there. >inally, 7nson was terminated on the ground o" continued absences without "iling a leave o" absence. 8e "iled a 4omplaint against petitioner and 3icanor "or illegal dismissal and non payment o" allowances, with claim "or moral and e(emplary damages and attorney$s "ees, in the 2,34, 3egional Arbitration Branch 2o. NI in Davao 4ity. #herea"ter, ,abor Arbiter Amado &. +olamo rendered a decision "inding respondents guilty o" illegal dismissal. Petitioner and 3icanor appealed to the 2,34 @4agayan de 6ro 4ityA, which a""irmed with modi"ication the Decision o" the ,abor Arbiter, reducing the total awards o" moral and e(emplary damages. #he 4A rendered a Decision, "inding that petitioner had the right to terminate the employment o" respondent, and that it had observed due process in terminating his employment.

OASAY .!. PALACIO DEL GOBERNADOR FACTS: 3espondent Palacio Del Gobernador 4ondominium 4orporation @PDG44A is a government owned and controlled corporation organi<ed "or the purpose o" owning and arranging the common areas o" Palacio Del Gobernador 4ondominium. 6n June ?, ?IIG, the petitioner +ebastian 6asay Jr. was appointed by the PDG44 as its Building Administrator "or a three month probationary period. 4onse1uently, the Board o" Directors o" PDG44, through its Board 3esolution 2o. 0?/ dated 6ctober .-, ?IIG, appointed the petitioner as its permanent Building Administrator e""ective +eptember ?, ?IIG. ,ater, PDG44 President 6mar #. 4ru< re1uired the petitioner to submit a written report on the allowances and other compensation, in connection with his duties as Building Administrator, that he received "rom the government o""ices housed in the condominium. Apparently, the petitioner had been earning additional income "or services that he rendered "or the 46&E,E4. #he petitioner submitted his written report wherein he admitted that he had received additional compensation "rom the 46&E,E4 "or services which he rendered a"ter his regular wor!ing hours and on +aturdays, +undays and holidays. 8e e(plained that the 46&E,E4 had caused the rehabilitation o" the Dth "loor o" the condominium and that he was tas!ed by the "ormer, "or a stated compensation, to supervise and monitor the rehabilitation. &eanwhile, 4ru< sent a letter dated December I, .00F to the petitioner re1uiring the latter to e(plain why he allowed the EGB +ecurity Investigation and General +ervices, Inc., despite its lac! o" license to operate as a security agency, to render services to the condominium to the detriment o" PDG44. 4onse1uently, the petitioner sent 4ru< a letter dated January ?., .00E denying any liability on the said matter as he had no

power to award any contract as it is the "unction o" the Bids and Awards 4ommittee o" PDG44. In a letter dated >ebruary ?E, .00E, a"ter investigating the allegations against the petitioner, Atty. Bernardo recommended to 4ru< and the PDG44 Board o" Directors the "iling o" appropriate charges against the petitioner "or violation o" 3epublic Act 2o. /0?I @Anti Gra"t and 4orrupt Practices ActA and 3epublic Act 2o. E-?/ @4ode o" 4onduct and Ethical +tandards "or Public 6""icials and EmployeesA. Attached to the said letter was a detailed outline report prepared by Atty. Bernardo which speci"ied the acts committed by the petitioner which led him to recommend the "iling o" appropriate charges against the latter. 5ith respect to the petitioner$s receipt o" additional compensation "rom the 46&E,E4, Atty. Bernardo opined that the services which the "ormer rendered "or the latter relates to the duties which he actually per"orms pursuant to the "unctions o" his o""ice as Building Administrator. Atty. Bernardo "urther stated that, in rendering the said services "or the 46&E,E4, the petitioner acted with evident bad "aith as he did not see! the permission o" PDG44 nor did he in"orm 46&E,E4 that he was not authori<ed by PDG44 to do so. ,i!ewise, Atty. Bernardo "ound that the petitioner, as member o" the Bids and Awards 4ommittee, maneuvered the bidding process "or the security services "or the condominium to "avor EGB +ecurity Investigation and General +ervices, Inc. J a security agency which lac!s the necessary license to operate as such. In a letter dated &arch ?E, .00E, the petitioner as!ed the PDG44 Board o" Directors and 4ru< to allow him to avail o" an early retirement in view o" the latter$s decision to hand over the administration o" the condominium to the Bureau o" #reasury. #he "oregoing re1uest was reiterated in the petitioner$s letter dated &ay ?0, .00E. 6n 6ctober .D, .00E, 4ru< sent the petitioner a &emorandum in"orming him that the PDG44 Board o" Directors "ound his answers to the allegations against him unsatis"actory and, thus the Bureau o" #reasury was being appointed as the new Building Administrator. 4ru< then directed the petitioner to turn over all o" his accountabilities to PDG44. #he "oregoing was ac!nowledged by the petitioner in his letter to the PDG44 Board o" Directors dated 2ovember ?-, .00E. #he petitioner "iled a complaint "or constructive dismissal with the ,abor Arbiter. #he ,abor Arbiter @,AA dismissed the petitioner$s complaint, "inding that there was substantial evidence to conclude that the petitioner had breached the trust and con"idence o" PDG44. 6n appeal, the 2,34 a""irmed the ,A$s "indings. #he 4A dismissed the petition "or certiorari "iled by the petitioner and granted the PDG44$s prayer "or a reversal o" the award "or separation in "avor o" the "ormer. CONTENTION OF T E RESPONDENT: PDG44 claimed that the petitioner was not a regular employee, serving as a Building Administrator on a yearly basis depending on the PDG44 Board o" Directors$ discretion. >urther, on the assumption that the petitioner is a regular employee, PDG44 asserted that the petitioner was not illegally dismissed as it was based on a )ust cause "or terminating an employment, i.e. loss o" trust and con"idence "or receiving unlaw"ul additional compensation "or wor! rendered without its authority. ISSUE: 5hether or not the petitioner was illegally dismissed. RULING: 2o. Article .D. o" the ,abor 4ode statesC Article .D..#E3&I2A#I62 B7 E&P,67E3. J An employer may terminate an employment "or any o" the "ollowing causesC @aA +erious misconduct or will"ul disobedience by the employee o" the law"ul orders o" his employer or representative in connection with his wor!; @bA Gross and habitual neglect by the employee o" his duties; @cA >raud or will"ul breach by the employee o" the trust reposed in him by his employer or duly authori<ed representative;

@dA 4ommission o" a crime or o""ense by the employee against the person o" his employer or any immediate member o" his "amily or his duly authori<ed representative; and @eA 6ther causes analogous to the "oregoing. In terminating the petitioner$s employment, PDG44 invo!ed loss o" trust and con"idence. #he "irst re1uisite "or dismissal on the ground o" loss o" trust and con"idence is that the employee concerned must be holding a position o" trust and con"idence. Verily, the 4ourt must "irst determine i" the petitioner holds such a position. 8ere, it is indubitable that the petitioner holds a position o" trust and con"idence. #he position o" Building Administrator, being managerial in nature, necessarily en)oys the trust and con"idence o" the employer. #he second re1uisite is that there must be an act that would )usti"y the loss o" trust and con"idence. ,oss o" trust and con"idence, to be a valid cause "or dismissal, must be based on a will"ul breach o" trust and "ounded on clearly established "acts. #he basis "or the dismissal must be clearly and convincingly established but proo" beyond reasonable doubt is not necessary. PDG44 had established, by clear and convincing evidence, the petitioner$s acts which )usti"ied its loss o" trust and con"idence on the "ormer. 6n this score, the ,A !eenly observed thatC 4omplainant$s breach o" the trust reposed in him as Building Administrator is su""iciently supported by the evidence on record. 4omplainant$s admission that he received remuneration "rom 4ommission on Elections @46&E,E4A whose o""ice is housed at respondent Palacio Del Gobernador 4ondominium )usti"ied his termination o" employment. 4omplainant cannot assert that he rendered services to 46&E,E4 only a"ter o""ice hours as his "unctions as Building 4oordinator would de"initely have "avored 46&E,E4 in the per"ormance o" his "unctions during regular o""ice hours. ,i!ewise, as Building Administrator, his active vigilance in reporting and in"orming the respondents as to the e(pired license to operate o" the EGB +ecurity Agency and its revo!ed +E4 4erti"icate o" 3egistration was his duty and loo! out. In the instant case, complainant instead o" in"orming the respondents, !ept this in"ormation "rom the !nowledge o" the respondents and allowed the security agency to render security services to the premises o" respondents despite its e(pired license and revo!ed +E4 4erti"icate o" 3egistration.

GALANG .!. CITILAND S A/ TO/ER FACTS: Petitioner 3omeo Galang alleged on compulsory arbitration that a"ter the e(piration o" his employment contracts with the agencies providing maintenance services to respondent 4ityland, he was absorbed as a )anitor by 4ityland with a promise o" regular employment a"ter the completion o" his si( month probation. 8e claimed that even a"ter the lapse o" the period, he continued wor!ing "or 4ityland although he had no idea about his employment status. 8e did not !now his status "or certain until he was shown a document on &ay .?, .00. in"orming him that his employment would be terminated e""ective &ay .0, .00.. 4ityland alleged that in the "ace o" Galang$s negative wor! attitude and )ob per"ormance, he is charged with gross insubordination, harassment o" his co employees and conduct unbecoming an employee. Galang "iled a complaint "or illegal dismissal with several money claims against 4ityland and &anager Baldemor. As a reply, 4ityland denied liability "or Galang$s money claims, maintaining that either the claim had no basis or Galang had already been granted the bene"it. #he compulsory arbitrator and 2,34 decided in "avor o" Galang and ruled that 4ityland "ailed to present evidence to support Galang$s dismissal "or cause a"ter observance o" due process. #hey observe that the alleged board resolution dismissing Galang was unsubstantiated and sel" serving, and carries no probative value. 8owever, the 4ourt o" Appeals decided in "avor o" 4ityland stating that Galang$s dismissal was "or cause. But it nonetheless believed that Galang was not a""orded procedural

due process "or lac! o" notice. #he 4A re)ected 4ityland$s e(planation that it deviated "rom the rule because the circumstances o" the case le"t it no room to comply with the re1uirement. #he 4A noted that although there was a meeting intended to address the )anitors$ complaints against Galang J the latter had no !nowledge o" the charges at that point in time. #he 4A stressed that Galang should have been given a reasonable time to de"end himsel". CONTENTION OF T E PETITIONER: Galang contends that in granting 4ityland$s appeal, the 4A relied heavily on #upas$ +inumpaang +alaysay and on the )oint a""idavit o" Baldemor, Arrogante and Dela 4ru<, despite the "act that these pieces o" evidence were not presented be"ore the labor arbiter and the 2,34. #hey were presented only on a motion "or reconsideration. CONTENTION OF T E RESPONDENT: In the "ace o" Galang$s negative wor! attitude and )ob per"ormance, 4ityland charged him with gross insubordination, harassment o" his co employees and conduct unbecoming an employee. ,i!ewise, the pieces o" evidence which Galang ob)ected to were not the sole basis o" the 4A ruling. ISSUES: ?. 5hether or not the 4ourt o" Appeals committed grave abuse o" discretion in declaring that Galang was dismissed "or a cause when the decision was alleged to be heavily relied on evidence which were not presented be"ore the ,abor arbiter and the @2,34A but only on the &otion "or 3econsideration. .. 5hether or not there is due process on the part o" 4ityland. RULING: ?. #here was 26 Grave abuse o" Discretion on the part o" the 4ourt o" Appeals. 4ontrary to Galang$s submission, there is substantial evidence S such relevant evidence that a reasonable mind might accept as ade1uate to support a conclusionS supporting the 4A decision. #he pieces o" evidence which Galang ob)ected to @the a""idavits submitted to the 2,34A were not the sole basis o" the 4A ruling. #hey simply corroborated the respondents$ earlier submissions to the labor arbiter. 5e re"er to #upas$ memorandum dated &ay .0, .00. to Arrogante and 4ityland$s reply to the labor arbiter$s summons where 4ityland$s Board o" Directors approved #upas$ recommendation, as well as that o" the audit team, "or Galang$s dismissal. #he grounds "or Galang$s dismissal had already been laid down by #upas$ memorandum. +tated otherwise, the a""idavits e(ecuted in .00F, simply ampli"ied the evidence 4ityland submitted in .00., including documents which cited Galang$s serious negligence in causing the "looding o" his assigned condominium "loor, which resulted in a costly repair o" the buildings$ elevator. Additionally, there was #upas$ memo to 4ityland$s President which =pertains to the case o" 3omeo Galang "or harassment to co )anitors, insubordination to +upervisor and conduct unbecoming an employee.= 5ithout o""ering any possible ill motive that might have impelled 4ityland to summarily dismiss Galang who admitted having been absorbed by the "ormer as )anitor upon the termination o" his contract with his agency, the 4ourt is more inclined to give credence to the evidence pointing to the conclusion that Galang$s employment was actually severed "or a )ust cause. .. #here was 26 due process. #he "inding o" a )ust cause "or Galang$s dismissal notwithstanding, the court concurs with the 4A$s conclusion that 4ityland did not a""ord Galang the re1uired notice be"ore he was dismissed. As the 4A noted, the investigation con"erence #upas called to loo! into the )anitors$ complaints against Galang, did not constitute the written notice re1uired by law as he had no clear idea what the charges were. #hus, the 4A committed no error in sustaining his dismissal and awarding him nominal damages as indemnity.

FACTS: +ince ?II0, Villanueva had been employed with &eralco as bill collector, teller and branch representative. +ometime in June .00., he was reported "or =unusual contract modi"ications= in the transactions he handled. #he report claimed that there were customers who were issued 4ontracts "or Electric +ervice by Villanueva which indicated their payment o" P I/0.00 as deposit payment when they actually gave him a total amount o" P ?,.G0.00. #he discrepancy amounting to P /?0.00 was not covered by any receipt. Pursuant to the complaints, a "ield investigation was conducted where nine sworn statements "rom complaining customers were obtained. #he complaints were corroborated by the sworn statements o" Ben 8ur 4. 2epomuceno and &erle +. +antos, o""ice team leader and assistant o""ice team leader o" the 2ovaliches branch, respectively. In a letter, Villanueva was in"ormed o" the investigation to be conducted by the company. 6n the date o" the scheduled hearing indicated in the letter, Villanueva appeared with counsel who re1uested "or time within which to submit a responsive paper. In his counter a""idavit, he denied demanding payment in e(cess o" the minimum deposit charged "rom applicants "or electric service connection. 8e admitted that there were times that =&odi"ication o" 4ontract= was done because o" the recommendations o" a &eralco "ieldman who, upon inspection, approved a higher load o" electricity than that applied "or. Villanueva e(plained that i" ever there was error or discrepancy in the preparation o" the contract, this would have to be balanced at the end o" the day. 8e claimed that there were instances when initial entries o" applied loads were erroneous prompting him to modi"y the contract in order that the customers$ deposit payment could be entered. In cases when the customer was no longer in the o""ice premises, he would )ust record them as pre payment so as to re"lect the same in their billing upon installation o" the electric meter. I&eralco denied the re1uest o" Villanueva$s counsel to cross e(amine the witnesses @complaining customersA who were not &eralco employees. &anagement maintained that it was not the proper place to grill a witness on cross e(amination which should be done in an appropriate proceeding. Villanueva was then advised that the case would be considered submitted "or decision as the issues had already been )oined with the submission o" his counter a""idavit. ,ater on, Villanueva received the 2otice o" #ermination. 8e "iled a complaint "or illegal dismissal. #he ,abor Arbiter ruled in Villanueva$s "avor but such ruling was reversed by the 2,34. #he 4A a""irmed the 2,34$s decision. ISSUE: 562 Villanueva was illegally dismissed. RULING: 2o. Dismissal "rom employment has two aspectsC ?A the legality o" the act o" dismissal per se, which constitutes substantive due process, and .A the legality o" the manner o" dismissal, which constitutes procedural due process. As to the "irst, the legal provision in point is Article .D. o" the ,abor 4ode which providesC Art. .D.. #ermination by Employer. S An employer may terminate an employment "or any o" the "ollowing causesC @aA +erious misconduct or will"ul disobedience by the employee o" the law"ul orders o" his employer or representative in connection with his wor!; @bA Gross and habitual neglect by the employee o" his duties; @cA >raud or will"ul breach by the employee o" the trust reposed in him by his employer or duly authori<ed representative; @dA 4ommission o" a crime or o""ense by the employee against the person o" his employer or any immediate member o" his "amily or his duly authori<ed representative; and @eA 6ther causes analogous to the "oregoing.

VILLANUEVA .!. NLRC, ET AL.

#he loss o" trust and con"idence must be based on will"ul breach o" the trust reposed in the employee by his employer. +uch breach is will"ul i" it is done intentionally, !nowingly, and purposely, without )usti"iable e(cuse, as distinguished "rom an act done carelessly, thoughtlessly, heedlessly or inadvertently. &oreover, it must be based on substantial evidence and not on the employer$s whims or caprices or suspicions otherwise, the employee would eternally remain at the mercy o" the employer. ,oss o" con"idence must not be indiscriminately used as a shield by the employer against a claim that the dismissal o" an employee was arbitrary. And, in order to constitute a )ust cause "or dismissal, the act complained o" must be wor! related and shows that the employee concerned is un"it to continue wor!ing "or the employer. In addition, loss o" con"idence as a )ust cause "or termination o" employment is premised on the "act that the employee concerned holds a position o" responsibility, trust and con"idence or that the employee concerned is entrusted with con"idence with respect to delicate matters, such as handling or case and protection o" the property and assets o" the employer. #he betrayal o" this trust is the essence o" the o""ense "or which an employee is penali<ed. As a sa"eguard against employers who indiscriminately use =loss o" trust and con"idence= to )usti"y arbitrary dismissal o" employees, the 4ourt, in addition to the above elements, came up with the "ollowing guidelines "or the application o" the doctrineC @?A loss o" con"idence should not be simulated; @.A it should not be used as a subter"uge "or causes which are improper, illegal or un)usti"ied; @/A it may not be arbitrarily asserted in the "ace o" overwhelming evidence to the contrary; and @GA it must be genuine, not a mere a"terthought, to )usti"y an earlier action ta!en in bad "aith. In this case, the above re1uisites have been met. &eralco$s loss o" trust and con"idence arising out o" Villanueva$s act o" misappropriation o" company "unds in the course o" processing customer applications has been proven by substantial evidence, thus, )usti"ied. Verily, the issuance o" additional receipts "or e(cessive payments e(acted "rom customers is a will"ul breach o" the trust reposed in him by the company. 6ne. Villanueva wor!ed "or &eralco as a Branch 3epresentative whose tas!s included the issuance o" 4ontracts "or Electric +ervice a"ter receipt o" the amount due "or service connection "rom customers. 6bviously, he was entrusted not only with the responsibility o" handling company "unds but also to cater to customers who intended to avail o" &eralco$s services. #his is nothing but an indication that trust and con"idence were reposed in him by the company, although his position was not strictly managerial by nature. ,oss o" con"idence generally applies only toC @?A cases involving employees occupying positions o" trust and con"idence; or @.A situations where the employee is routinely charged with the care and custody o" the employer$s money or property. #o the "irst class belong managerial employees, that is, those vested with the powers and prerogatives to lay down management polices and:or to hire, trans"er, suspend, lay o"", recall, discharge, assign or discipline employees, or e""ectively recommend such managerial actions. #o the second class belong cashiers, auditors, property custodians, or those who, in the normal and routine e(ercise o" their "unctions, regularly handle signi"icant amounts o" money or property. Villanueva "alls in the latter category. #wo. Villanueva$s acts o" issuing contracts indicating therein an amount less than the actual payment made by the customers and, therea"ter, issuing a receipt in an attempt to document the discrepancy are certainly wor! related. #his is, in "act, the core o" his position as a Branch 3epresentative. #hree. &eralco$s charge against Villanueva was ade1uately proven by substantial evidence. #he records provide an e(tensive showing o" evidence against Villanueva. #he a""idavits o" co employees and, more especially those o" the customers themselves, bear weight in establishing the speci"ic acts constituting the charge against him. In "act, no inconsistencies among these statements were "ound. Villanueva li!ewise "ailed to pose a plausible de"ense

>our. #he breach o" the company$s trust in Villanueva was shown to have been committed !nowingly and will"ully.?Uwphi? Although the amount o" discrepancy or money misappropriated may be considered minimal and even inconse1uential to an established company such as &eralco, it is the anomalous practice o" re1uiring applicants "or electric service connection to pay amounts higher than re1uired that is the cru( o" Villanueva$s o""ense. #he conscious design o" issuing another receipt to ma!e it appear that there was a mista!e in the initial transaction with the customers e(hibits a culpable act bordering on dishonesty and deceit. I" not "or personal gain, why did Villanueva e(act "rom customers amounts in e(cess o" what was re1uired by the companyT 5hat would have Villanueva done had the customers "ailed to discover the discrepancy between the amount they paid and that appearing in the receipts issued to themT 5hy were there no overages reported to his branch supervisor with respect to e(cess payments which were no longer 1uestioned by the customersT #hese 1uestions arise out o" the practice which un"ortunately corrupted an employee li!e Villanueva. #hese doubts sway the 4ourt away "rom Villanueva$s claim that his errors were promptly corrected upon discovery. Villanueva$s insistence, that the act which triggered his dismissal did not )usti"y his separation "rom the service because the 4ompany 4ode o" Employee Discipline "ailed to ma!e mention o" his case in a speci"ic manner, "ails to persuade the 4ourt. #he established "acts do not constitute a mere case o" simple negligence. #he acts per"ormed were without the slightest connotation o" inadvertence which Villanueva could have demonstrated during the proceedings a 1uo. Besides, the 4ourt is not unmind"ul o" the prerogatives available to &eralco as an employer. #he company has the right to regulate, according to its discretion and best )udgment, all aspects o" employment, including wor! assignment, wor!ing methods, processes to be "ollowed, wor!ing regulations, trans"er o" employees, wor! supervision, lay o"" o" wor!ers and the discipline, dismissal and recall o" wor!ers. &anagement has the prerogative to discipline its employees and to impose appropriate penalties on erring wor!ers pursuant to company rules and regulations../ +o long as they are e(ercised in good "aith "or the advancement o" the employer$s interest and not "or the purpose o" de"eating or circumventing the rights o" the employees under special laws or under valid agreements, the employer$s e(ercise o" its management prerogative must be upheld. #he law imposes many obligations on the employer such as providing )ust compensation to wor!ers and observance o" the procedural re1uirements o" notice and hearing in the termination o" employment. 6n the other hand, the law also recogni<es the right o" the employer to e(pect "rom its wor!ers not only good per"ormance, ade1uate wor! and diligence, but also good conduct and loyalty. #he employer may not be compelled to continue to employ such persons whose continuance in the service will patently be inimical to its interests. .F In his case, no indication o" bad "aith can be attributed to &eralco as there was no dispute that it had lost trust and con"idence in Villanueva and his abilities to per"orm his tas!s with utmost e""iciency and honesty e(pected o" an employee trusted to handle customers and "unds. 5ith substantial evidence presented and Villanueva$s "ailure to pro""er plausible e(planation denying the charges against him, there can be no other conclusion "or the 4ourt but to a""irm his dismissal.

BLUE S0Y TRADING .!. BLAS and SILVANO FACTS: Petitioner Blue +!y #rading 4ompany, Inc. is a duly registered domestic corporation engaged in the importation and sale o" medical supplies and e1uipment. #he respondents Arlene P. Blas @ArleneA and Joseph D. +ilvano @JosephA are regular employees o" Blue +!y and they respectively hold the positions o" stoc! cler! and warehouse helper.

A certain report revealed that si( pairs o" intensi"ying screens were missing. An investigation was conducted and employees were 1uestioned. 8elario Adonis, Jr., a warehouse personnel, was summoned and was as!ed to admit his participation in the the"t o" the missing screens. 8owever, he pleaded innocence. A"terwards, 8elario was noti"ied o" his termination "rom service on the ground o" his "ailure to properly account "or and maintain a balance o" the company9s stoc! inventories, hence, resulting in Blue +!y9s loss o" trust and con"idence in him. #he day a"ter, Blue +!y promptly "iled with the Department o" ,abor and Employment @D6,EA an establishment termination report indicating therein 8elario9s dismissal "rom service "or cause. 2otices to e(plain:preventive suspension was also issued to Arlene, Joseph, delivery personnel Jayde #ano an and maintenance personnel:driver 5il"redo >asonilao. #he notices in"ormed them that they were being accused o" gross dishonesty in connection with their alleged participation in and conspiracy with other employees in committing the"t against company property, speci"ically relative to the loss o" the si( intensi"ying screens. #hey were placed under preventive suspension pending investigation and were thus re1uired to "ile their written e(planations within GD hours "rom receipt o" the notices. #hey submitted handwritten memorandums denying !nowledge or complicity with the the"t o" the intensi"ying screens. 2otices o" dismissal was then issued to Arlene, Joseph, Jayde and 5il"redo notices o" dismissal "or cause stating therein that evidence that they had conspired with each other to commit the"t against company property was too glaring to ignore. Blue +!y had lost its trust and con"idence on them and as an act o" sel" preservation, their termination "rom service was in order. #hey "iled with the 2ational ,abor 3elations 4ommission @2,34A a complaint "or illegal dismissal and suspension. &eanwhile, an entrapment operation was conducted by the police during which Jayde and 8elario were caught allegedly attempting to sell to an operative an ultrasound probe worth around PG00,000.00 belonging to Blue +!y. #hey were then criminally charged in court. Be"ore the complaint which was "iled with the 2,34 can be resolved, 8elario, Jayde and 5il"redo e(ecuted a""idavits o" desistance stating therein that their termination by Blue +!y was "or cause and a"ter observance o" due process. #he ,abor Arbiter denied the claims o" Arlene and Joseph. +uch decision was reversed by the 2,34. #he 4A a""irmed the 2,34$s ruling. ISSUE: 562 petitioners had proven by substantial evidence the charges o" the"t against Arlene and Joseph which led to the latter9s termination "rom service on the ground o" loss o" trust and con"idence. RULING: NO. #he rule is long and well settled that, in illegal dismissal cases li!e the one at bench, the burden o" proo" is upon the employer to show that the employee$s termination "rom service is "or a )ust and valid cause. #he employer$s case succeeds or "ails on the strength o" its evidence and not on the wea!ness o" that adduced by the employee, in !eeping with the principle that the scales o" )ustice should be tilted in "avor o" the latter in case o" doubt in the evidence presented by them. 6"ten described as more than a mere scintilla, the 1uantum o" proo" is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as ade1uate to support a conclusion, even i" other e1ually reasonable minds might conceivably opine otherwise. >ailure o" the employer to discharge the "oregoing onus would mean that the dismissal is not )usti"ied and there"ore illegal. >or there to be a valid dismissal based on loss o" trust and con"idence, the breach o" trust must be will"ul, meaning it must be done intentionally, !nowingly, and purposely, without )usti"iable e(cuse.

In the case at bar, we agree with the petitioners that mere substantial evidence and not proo" beyond reasonable doubt is re1uired to )usti"y the dismissal "rom service o" an employee charged with the"t o" company property. 8owever, we "ind no error in the 4A9s "indings that the petitioners had not ade1uately proven by substantial evidence that Arlene and Joseph indeed participated or cooperated in the commission o" the"t relative to the si( missing intensi"ying screens so as to )usti"y the latter9s termination "rom employment on the ground o" loss o" trust and con"idence. Blue +!y alleged that Arlene, who was a stoc! cler!, and Joseph, a warehouse helper, had "ree access to the missing items. Arlene, who !ept the stoc! cards, was supposed to be monitoring on a daily basis the incoming and outgoing stoc!s stored in or ta!en out o" the warehouse. Joseph too! the stoc!s "rom the warehouse to the vehicles "or transport or delivery purposes. Arlene and Joseph averred otherwise. #hey insisted that they were mere lowly employees who did not have actual custody o" company property, speci"ically, o" the missing items. Arlene claimed that she was not responsible "or conducting inventories and that she released stoc!s only when urgently necessary and only in the absence o" those authori<ed to do so. Joseph alleged that he only went to the me<<anine, where the missing items were stored, when ordered to do so by his superiors. 5e note that the parties disagree as to what tas!s were actually and regularly per"ormed by Arlene and Joseph. #hey are at odds as to the issue o" whether or not Arlene and Joseph had custody o" the missing screens. 5e observe though that neither o" the parties presented any documentary evidence, such as employment contracts, to establish their claims relative to the actual nature o" Arlene and Joseph9s daily tas!s. It bears emphasi<ing though that the photocopies o" the identi"ication cards issued by Blue +!y, which were anne(ed to the respondents9 position paper "iled with the ,A, indicated that Arlene was assigned at the customer service department while Joseph was part o" the warehouse department. During the entrapment operation conducted by police operatives, Jayde and 8elario were caught attempting to sell an ultrasound probe allegedly belonging to Blue +!y. #herea"ter, Jayde, 8elario and 5il"redo withdrew their complaints "or illegal dismissal against the company. Arlene and Joseph, however, pursued their claims. 2onetheless, Blue +!y construed the result o" the entrapment operation to mean that there was a conspiracy among the "ive employees to commit the"t o" company property. In the reply "iled by the petitioners to the respondents9 position paper "iled be"ore the ,A, the "ormer alleged that in a letter, Jayde, 8elario and 5il"redo implicated Arlene and Joseph as participants and conspirators in the commission o" the"t./G 8owever, we note that the petitioners9 allegation was bare since the letter supposedly written by Jayde, 8elario and 5il"redo was not o""ered as evidence. >urther, Blue +!y alleged that the ultrasound probe was among the items "ound missing in the inventory conducted in December .00G. 5e observe though that the employees were dismissed "or alleged the"t o" si( intensi"ying screens. In the termination notices, no re"erences were made at all to a missing ultrasound probe. Also, in the notices sent to Arlene and Joseph, "irst charging them with the"t, and later, in"orming them o" their dismissal "rom service, gross negligence was not stated therein as a ground. 8ence, Arlene and Joseph could not have de"ended themselves against the charge o" gross negligence. #hey cannot be dismissed on that ground lest due process be violated. 6nly the "ollowing had been established without disputeC @aA the "act o" loss o" the si( intensi"ying screens; @bA an entrapment operation was success"ully conducted by the police operatives who caught Jayde and 8elario in the act o" attempting to sell an ultrasound probe which allegedly belonged to Blue +!y; and @cA Jayde, 8elario and 5il"redo "iled their a""idavits o" desistance to withdraw their complaints "or illegal dismissal against Blue +!y while Arlene and Joseph pursued their complaints.

#he nature o" Arlene and Joseph9s regular duties while under Blue +!y9s employ and their speci"ic participation in or !nowledge o" the the"t o" the intensi"ying screens remain uncertain. #hus, whether or not Arlene and Joseph had actual custody over company property, we agree with the 4A that the petitioners had "ailed to establish by substantial evidence the charges which led to Arlene and Joseph9s dismissal "rom service. 5hile we empathi<e with Blue +!y9s loss and understand that its actions were merely motivated by its intent to protect the interests o" the company, no blan!et authority to terminate all employees whom it merely suspects as involved in the commission o" the"t resides in its "avor. 5e thus reiterate the doctrine enunciated in >unctional, Inc./F that the employer$s case succeeds or "ails on the strength o" its evidence and not on the wea!ness o" that adduced by the employee, in !eeping with the principle that the scales o" )ustice should be tilted in "avor o" the latter in case o" doubt in the evidence presented by them. 8owever, Blue +!y committed no impropriety in imposing preventive suspension against Arlene and Joseph pending investigation o" the the"t allegedly committed against the company. Preventive suspension may be legally imposed on an employee whose alleged violation is the sub)ect o" an investigation. #he purpose o" the suspension is to prevent an employee "rom causing harm or in)ury to his colleagues and to the employer. #he ma(imum period o" suspension is /0 days, beyond which the employee should either be reinstated or be paid wages and bene"its due to him. In Arlene and Joseph9s case, Blue +!y issued to them notices to e(plain on >ebruary /, .00F. #hey submitted their written e(planation the day a"ter and they were dismissed "rom service on >ebruary F, .00F. #here is no impropriety in Blue +!y$s act o" imposing preventive suspension upon the respondents since the period did not e(ceed the ma(imum imposed by law and there was a valid purpose "or the same.

CONTENTION OF PETITIONER: #he dismissal o" ,ogarta through retrenchment was valid. ISSUE: 5hether or not respondent$s dismissal through retrenchment is illegal. RULING: 2o. 3etrenchment is the reduction o" wor! personnel usually due to poor "inancial returns, aimed to cut down costs "or operation particularly on salaries and wages. It is one o" the economic grounds to dismiss employees and is resorted by an employer primarily to avoid or minimi<e business losses. 3etrenchment programs are purely business decisions within the purview o" a valid and reasonable e(ercise o" management prerogative. It is one way o" downsi<ing an employer9s wor!"orce and is o"ten resorted to by the employer during periods o" business recession, industrial depression, or seasonal "luctuations, and during lulls in production occasioned by lac! o" orders, shortage o" materials, conversion o" the plant "or a new production program, or introduction o" new methods or more e""icient machinery or automation. It is a valid management prerogative, provided it is done in good "aith and the employer "aith"ully complies with the substantive and procedural re1uirements laid down by law and )urisprudence. Philippine ,aw recogni<es retrenchment as a valid cause "or the dismissal o" a migrant or overseas >ilipino wor!er under Article .D/ o" the ,abor 4ode. #hus, retrenchment is a valid e(ercise o" management prerogative sub)ect to the strict re1uirements set by )urisprudence, to witC @?A#hat the retrenchment is reasonably necessary and li!ely to prevent business losses which, i" already incurred, are not merely de minimis, but substantial, serious, actual and real, or i" only e(pected, are reasonably imminent as perceived ob)ectively and in good "aith by the employer; @.A#hat the employer served written notice both to the employees and to the Department o" ,abor and Employment at least one month prior to the intended date o" retrenchment; @/A#hat the employer pays the retrenched employees separation pay e1uivalent to one month pay or at least ?:. month pay "or every year o" service, whichever is higher; @GA#hat the employer e(ercises its prerogative to retrench employees in good "aith "or the advancement o" its interest and not to de"eat or circumvent the employees9 right to security o" tenure; and @FA#hat the employer used "air and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status,Ve""iciency, seniority, physical "itness, age, and "inancial hardship "or certain wor!ers. Applying the above stated re1uisites "or a valid retrenchment in the case at bar, it is apparent that the "irst, "ourth and "i"th re1uirements were complied with by respondent9s employer. 8owever, the second and third re1uisites were absent when Petrocon terminated the services o" respondent. As aptly "ound by the 2,34 and )ustly sustained by the 4A, Petrocon e(ercised its prerogative to retrench its employees in good "aith and the considerable reduction o" wor! allotments o" Petrocon by +audi Aramco was su""icient basis "or Petrocon to reduce the number o" its personnel. As "or the notice re1uirement, however, contrary to petitioner9s contention, proper notice to the D6,E within /0 days prior to the intended date o" retrenchment is necessary and must be complied with despite the "act that respondent is an overseas >ilipino wor!er. In the present case, although respondent was duly noti"ied o" his termination by Petrocon /0 days be"ore its e""ectivity, no allegation or proo" was advanced by petitioner to establish that Petrocon ever sent a notice to the D6,E /0 days be"ore the respondent was terminated. #hus, this re1uirement o" the law was not complied with.

INTERNATIONAL MANAGEMENT SERVICES .!. LOGARTA FACTS: 3ecruitment agency, International &anagement +ervices @I&+A, deployed 3oel P. ,ogarta to wor! "or Petrocon Arabia ,imited @PetroconA +audi Arabia, in connection with general engineering services o" Petrocon "or the +audi Arabian 6il 4ompany @+audi AramcoA. ,ogarta was employed "or a period o" two @.A years, commencing on 6ctober ., ?II-, with a monthly salary o" eight hundred *+ Dollars @*+KD00.00A. 6n April .I, ?IID, +audi Aramco noti"ied Petrocon that due to changes in the general engineering services wor! "orecast "or ?IID, the man hours that were "ormerly allotted to Petrocon is going to be reduced by G0L which constrained Petrocon to reduce its personnel. #hus, on June ?, ?IID, Petrocon gave ,ogarta a written notice in"orming the latter that due to the lac! o" pro)ect wor!s related to his e(pertise, he is given a /0 day notice o" termination, and that his last day o" wor! with Petrocon will be on July ?, ?IIDBe"ore his departure "rom +audi Arabia, respondent received his "inal paychec! "rom Petrocon amounting +3-,GDD.F-, without paying the separation "ee o" ,ogarta. *pon his return, ,ogarta "iled a complaint with the 2,34 against I&+ "or illegal dismissal as the recruitment agency which employed him "or employment abroad. #he ,A rendered )udgment in "avor o" the ,ogarta and ordered I&+ to pay wages "or the une(pired portion o" his contract o" employment. #he 2,34 on appeal a""irmed the ,A$s decision but reduced the award. #he 4A li!ewise dismissed the petition and a""irmed the 2,34 decision.

In the case at bar, despite the "act that respondent was employed by Petrocon as an 6>5 in +audi Arabia, still both he and his employer are sub)ect to the provisions o" the ,abor 4ode when applicable. #he basic policy in this )urisdiction is that all >ilipino wor!ers, whether employed locally or overseas, en)oy the protective mantle o" Philippine labor and social legislations. In the case at bar, notwithstanding the "act that respondent9s termination "rom his employment was procedurally in"irm, having not complied with the notice re1uirement, nevertheless the same remains to be "or a )ust, valid and authori<ed cause, i.e., retrenchment as a valid e(ercise o" management prerogative. #o stress, despite the employer9s "ailure to comply with the one month notice to the D6,E prior to respondent9s termination, it is only a procedural in"irmity which does not render the retrenchment illegal. In Agabon v. 2,34, this 4ourt ruled that when the dismissal is "or a )ust cause, the absence o" proper notice should not nulli"y the dismissal or render it illegal or ine""ectual. Instead, the employer should indemni"y the employee "or violation o" his statutory rights. 4onse1uently, it is Article .D/ o" the ,abor 4ode and not +ection ?0 o" 3.A. 2o. D0G. that is controlling. #hus, respondent is entitled to payment o" separation pay e1uivalent to one @?A month pay, or at least one hal" @?:.A month pay "or every year o" service, whichever is higher. 4onsidering that respondent was employed by Petrocon "or a period o" eight @DA months, he is entitled to receive one @?A month pay as separation pay. In addition, pursuant to current )urisprudence, "or "ailure to "ully comply with the statutory due process o" su""icient notice, respondent is entitled to nominal damages in the amount PF0,000.00.

2ational ,abor 3elations 4ommission @2,34A.#he ,abor Arbiter @,AA rendered a decision sustaining the respondent$s claim o" illegal dismissal thus ordering the petitioner to reinstate the respondent to his "ormer position and awarding the latter bac!wages and ?/th month pay. #he ,A opined that the petitioner "ailed to adduce substantial evidence that there was a valid ground "or the respondent$s dismissal. >urther, the >ebruary ?G, .00E Audit 3eport that was adduced by the petitioner in evidence was disregarded by the ,A since it was unsigned. #he petitioner appealed the "oregoing disposition to the 2,34, submitting a new audit report dated April /0, .00-. Pending appeal, the petitioner sent the respondent a letter dated April /0, .00- re1uiring him to report "or wor! on &ay G, .00pursuant to the reinstatement order o" the ,A. #he said letter was served to the respondent on &ay /, .00- but he re"used to receive the same. #he 2,34 a""irmed the decision o" the ,A. #he 2,34 held that it was su""iciently established that only ,ingad was the one responsible "or the said misappropriations. >urther, the 2,34 asserted that the >ebruary ?G, .00E and April /0, .00- audit reports presented by the petitioner could not be given evidentiary weight as the same were e(ecuted a"ter the respondent had already been dismissed. #he petitioner sought reconsideration o" the said July .?, .00D Decision but it was denied by the 2,34 in its 3esolution- dated +eptember .., .00I. #he 4A denied the petition "or certiorari "iled by the petitioner. 8owever, the 4A held that the respondent is entitled to separation pay e1uivalent to one month salary "or every year o" service in lieu o" reinstatement and bac!wages to be computed "rom the time o" his illegal dismissal until the "inality o" the said decision. #he 4A agreed with the ,A and the 2,34 that the petitioner "ailed to establish by substantial evidence that there was indeed a valid ground "or the respondent$s dismissal. 2evertheless, the 4A held that the petitioner should pay the respondent separation pay since the latter did not pray "or reinstatement be"ore the ,A and that the same would be in the best interest o" the parties considering the animosity and antagonism that e(ist between them. #he petitioner$s &otion "or 3econsideration was denied by the 4A. CONTENTION OF T E PETITIONER: #he petitioner instituted the instant petition "or review on certiorari be"ore this 4ourt asserting the "ollowing argumentsC @?A the 4A erred in awarding separation pay in "avor o" the respondent in lieu o" reinstatement considering that the appeal be"ore it only involved the issue o" the legality or illegality o" the respondent$s dismissal; @.A an award o" separation pay to the respondent is not proper in this case considering that, in his complaint, he merely prayed "or reinstatement and not payment o" separation pay; and @/A the 4A erred in awarding bac!wages in "avor o" the respondent since it acted in good "aith when it terminated the respondent$s employment. CONTENTION OF T E RESPONDENT: #he respondent asserted that the 4A did not err in ordering the payment o" separation pay in his "avor in lieu o" reinstatement since there is already a strained relationship between him and the petitioner. 8e intimated that the petitioner had previously "iled various criminal charges against him "or 1uali"ied the"t thus e""ectively rendering his reinstatement to his "ormer position in the Ban! o" ,ubao impracticable. ISSUES: ?. 5hether or not the 4A erred in ordering the petitioner to pay the respondent separation pay in lieu o" reinstatement. .. 5hether or not the respondent is entitled to payment o" bac!wages. RULING: ?. #he law on reinstatement is provided "or under Article .-I o" the ,abor 4ode o" the PhilippinesC Article .-I.+ecurity o" #enure. In cases o" regular employment, the employer shall not terminate the services o" an employee e(cept "or a )ust cause or when authori<ed by this #itle. An employee who is un)ustly dismissed "rom wor! shall be entitled to reinstatement without loss o" seniority

BAN0 OF LUBAO .!. MANABAT FACTS: +ometime in .00?, 3ommel J. &anabat @respondentA was hired by petitioner Ban! o" ,ubao, a rural ban!, as a &ar!et 4ollector. +ubse1uently, the respondent was assigned as an encoder at the Ban! o" ,ubao$s +ta. 4ru< E(tension 6""ice, which he manned together with two other employees, teller +usan P. ,ingad and &ay 6. &anasan. As an encoder, the respondent$s primary duty is to encode the clients$ deposits on the ban!$s computer a"ter the same are received by ,ingad. In 2ovember .00G, an initial audit on the Ban! o" ,ubao$s +ta. 4ru< E(tension 6""ice conducted by the petitioner revealed that there was a misappropriation o" "unds in the amount o" P/,000,000.00, more or less. Apparently, there were transactions entered and posted in the passboo!s o" the clients but were not entered in the ban!$s boo! o" accounts. >urther audit showed that there were various deposits which were entered in the ban!$s computer but were subse1uently reversed and mar!ed as =error in posting=. 6n 2ovember ?-, .00G, the respondent, through a memorandum sent by the petitioner, was as!ed to e(plain in writing the discrepancies that were discovered during the audit. 6n 2ovember ?I, .00G, the respondent submitted to the petitioner his letter e(planation which, in essence, asserted that there were times when ,ingad used the ban!$s computer while he was out on errands. 6n December ??, .00G, an administrative hearing was conducted by the ban!$s investigating committee where the respondent was "urther made to e(plain his side. +ubse1uently, the investigating committee concluded that the respondent conspired with ,ingad in ma!ing "raudulent entries disguised as error corrections in the ban!$s computer. 6n August I, .00F, the petitioner "iled several criminal complaints "or 1uali"ied the"t against ,ingad and the respondent with the &unicipal #rial 4ourt @&#4A o" ,ubao, Pampanga. #herea"ter, citing serious misconduct tantamount to will"ul breach o" trust as ground, it terminated the respondent$s employment e""ective +eptember ?, .00F. 6n +eptember .E, .00F, the respondent "iled a 4omplaint/ "or illegal dismissal with the 3egional Arbitration Branch o" the

rights and other privileges and to his "ull bac!wages, inclusive o" allowances, and to his other bene"its or their monetary e1uivalent computed "rom the time his compensation was withheld "rom him up to the time o" his actual reinstatement. *nder the law and prevailing )urisprudence, an illegally dismissed employee is entitled to reinstatement as a matter o" right. 8owever, i" reinstatement would only e(acerbate the tension and strained relations between the parties, or where the relationship between the employer and the employee has been unduly strained by reason o" their irreconcilable di""erences, particularly where the illegally dismissed employee held a managerial or !ey position in the company, it would be more prudent to order payment o" separation pay instead o" reinstatement. *nder the doctrine o" strained relations, the payment o" separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. 6n one hand, such payment liberates the employee "rom what could be a highly oppressive wor! environment. 6n the other hand, it releases the employer "rom the grossly unpalatable obligation o" maintaining in its employ a wor!er it could no longer trust. In such cases, it should be proved that the employee concerned occupies a position where he en)oys the trust and con"idence o" his employer; and that it is li!ely that i" reinstated, an atmosphere o" antipathy and antagonism may be generated as to adversely a""ect the e""iciency and productivity o" the employee concerned. #he 4ourt agreed with the 4A that the relations between the parties had been already strained thereby )usti"ying the grant o" separation pay in lieu o" reinstatement in "avor o" the respondent. >irst, it cannot be gainsaid that the petitioner$s reinstatement to his "ormer position would only serve to intensi"y the atmosphere o" antipathy and antagonism between the parties. *ndoubtedly, the petitioner$s "iling o" various criminal complaints against the respondent "or 1uali"ied the"t and the subse1uent "iling by the latter o" the complaint "or illegal dismissal against the latter, ta!en together with the pendency o" the instant case "or more than si( years, had caused strained relations between the parties. +econd, considering that the respondent$s "ormer position as ban! encoder involves the handling o" accounts o" the depositors o" the Ban! o" ,ubao, it would not be e1uitable on the part o" the petitioner to be ordered to maintain the "ormer in its employ since it may only inspire vindictiveness on the part o" the respondent. #hird, the re"usal o" the respondent to be re admitted to wor! is in itsel" indicative o" the e(istence o" strained relations between him and the petitioner. +trained relations between the employer and employee is an e(ception to the rule re1uiring actual reinstatement "or illegally dismissed employees "or the practical reason that the already e(isting antagonism will only "ester and deteriorate, and will only worsen with possible adverse e""ects on the parties, i" reinstatement shall be compelled; thus, the use o" a viable substitute that protects the interests o" both parties while ensuring that the law is respected. .. 7es. Employees who are illegally dismissed are entitled to "ull bac!wages, inclusive o" allowances and other bene"its or their monetary e1uivalent, computed "rom the time their actual compensation was withheld "rom them up to the time o" their actual reinstatement. But i" reinstatement is no longer possible, the bac!wages shall be computed "rom the time o" their illegal termination up to the "inality o" the decision. #hus, when there is an order o" reinstatement, the computation o" bac!wages shall be rec!oned "rom the time o" illegal dismissal up to the time that the employee is actually reinstated to his "ormer position.

branch administrator and had supervision and control o" all the employees. 3espondent was also responsible "or sales and collection. In the year .00., he was re1uired to e(plain in writing why he should not be penali<ed "or being absent without o""icial leave and rendering under time service on certain dates "rom April /, .00. to June ??, .00.. . 6n July F, .00., 2or!is conducted an investigation through &r. Edmund 7. Ping!ian. >inding that respondent was not able to prove that he was really in the branch or on o""icial travel, petitioners suspended him "or "i"teen @?FA days without pay beginning July D, .00.. 5hile serving his suspension, several "indings against Descallar was "ound by 2or!is Distributor. #herea"ter he was placed on preventive suspension and eventually petitioner terminated respondent$s services "or loss o" trust and con"idence and gross ine""iciency. 3espondent "iled a case against 2or!is Distributor "or illegal dismissal. 6n &arch ?G, .00/, the ,abor Arbiter rendered a decision in "avor o" Descallar and ordered 2or!is Distributor to pay him separation pay e1uivalent to one @?A month "or every year o" service plus bac!wages. 2or!is Distributor appealed. CONTENTION OF T E PETITIONERS: ,oss o" trust and con"idence is a ground "or termination o" an employee under Article .D. o" the ,abor 4ode, hence 2or!is is not liable "or illegal dismissal and payment o" bac!wages and monetary claims. ISSUE: 5hether or not the petitioners validly dismissed the respondent. RULING: 2o. ,oss o" trust and con"idence as a ground "or termination o" an employee under Article .D. o" the ,abor 4ode re1uires that the breach o" trust be will"ul, meaning it must be done intentionally, !nowingly, and purposely, without )usti"iable e(cuse. #he basic premise "or dismissal on the ground o" loss o" con"idence is that the employee concerned holds a position o" trust and con"idence. It is the breach o" this trust that results in the employer$s loss o" con"idence in the employee. Petitioners having "ailed to establish by substantial evidence any valid ground "or terminating respondent$s services, the +upreme 4ourt upheld the "inding o" the ,abor Arbiter and the 4A that respondent was illegally dismissed.

An illegally dismissed employee is entitled to two relie"sC bac! wages and reinstatement. #he two relie"s provided are separate and distinct. In instances where reinstatement is no longer "easible because o" strained relations between the employee and the employer, separation pay is granted. In e""ect, an illegally dismissed employee is entitled to either reinstatement i" such is viable, or separation pay i" reinstatement is no longer viable, and to bac! wages. #he normal conse1uences o" respondent$s illegal dismissal, then, are reinstatement without loss o" seniority rights, and payment o" bac! wages computed "rom the time compensation was withheld "rom him up to the date o" actual reinstatement. 5here reinstatement is no longer viable as an option, separation pay e1uivalent to one month salary "or every year o" service should be awarded as an alternative. #he payment o" separation pay is in addition to payment o" bac! wages.

JIAO, ET AL. .!. GLOBAL BUSINESS BAN0 FACTS: #he petitioners were regular employees o" the Philippine Ban!ing 4orporation @Philban!A, each with at least ten years o" service in the company. Philban! established a Gratuity Pay Plan @6ld PlanA "or its employees. #he 6ld Plan providedC?. Any employee who has reached the compulsory retirement age o" E0 years, or who wishes to retire or resign prior to the attainment o" such age or who is separated "rom service by reason o" death, sic!ness or other causes beyond

NOR0IS DISTRIBUTION .!. DESCALLAR FACTS: 6n April .E, ?II/, respondent Del"in Descallar was assigned at the Iligan 4ity Branch o" petitioner 2or!is Distributors, Inc., a distributor o" 7amaha motorcycles. 8e became a regular employee on >ebruary ?, ?IIG and was promoted as Branch &anager on June /0, ?II-. 8e acted as

his:her control shall "or himsel" or thru his:her heirs "ile with the personnel o""ice an application "or the payment o" bene"its under the plan. +ection ? Bene"its ?.? #he gratuity pay o" an employee shall be an amount e1uivalent to one month salary "or every year o" credited service, computed on the basis o" last salary received. ?.. An employee with credited service o" ?0 years or more, shall be entitled to and paid the "ull amount o" the gratuity pay, but in no case shall the gratuity pay e(ceed the e1uivalent o" .G months, or two years, salary. 6n &arch D, ?II?, Philban! implemented a new Gratuity Pay Plan @2ew Gratuity PlanA. In particular, the 2ew Gratuity Plan stated thusC %An Employee who is involuntarily separated "rom the service by reason o" death, sic!ness or physical disability, or "or any authori<ed cause under the law such as redundancy, or other causes not due to his own "ault, misconduct or voluntary resignation, shall be entitled to either one hundred percent @?00LA o" his accrued gratuity bene"it or the actual bene"it due him under the Plan, whichever is greater. %In >ebruary .000, Philban! merged with Global Business Ban!, Inc. @Globalban!A the ban! operated under the name Global Business Ban!, Inc. As a result o" the merger, complainants$ respective positions became redundant. A +pecial +eparation Program @++PA was implemented and the petitioners were granted a separation pac!age e1uivalent to one and a hal" month$s pay @or ?F0L o" one month$s salaryA "or every year o" service based on their current salary. Be"ore the petitioners could avail o" this program, they were re1uired to sign two documents, namely, an Acceptance ,etter and a 3elease, 5aiver, Wuitclaim @1uitclaimA. As their positions were included in the redundancy declaration, the petitioners availed o" the ++P, signed acceptance letters and e(ecuted 1uitclaims in Globalban!$s "avoring consideration o" their receipt o" separation pay e1uivalent to ?F0L o" their monthly salaries "or every year o" service. +ubse1uently, the petitioners "iled separate complaints "or non payment o" separation pay with prayer "or damages and attorney$s "ees be"ore the 2ational ,abor 3elations 4ommission @2,34A. #he petitioners asserted that, under the 6ld Plan, they were entitled to an additional F0L o" their gratuity pay on top o" ?F0L o" one month$s salary "or every year o" service they had already received. #he petitioners "urther argued that the 1uitclaims they signed should not bar them "rom claiming their "ull entitlement under the law. #hey also claimed that they were de"rauded into signing the same without "ull !nowledge o" its legal implications. #he ,abor Arbiter @,AA promulgated a decision dismissing the complaint. #he ,A ruled that the petitioners were not entitled to the additional F0L in gratuity pay that they were as!ing "or. As to the validity o" the 1uitclaim, the ,A held that the issue has been rendered moot. #he 2,34 dismissed the appeal and a""irmed the ,A$s decision. In the "irst o" the assailed 4A resolutions, the 4A ruled that the petition was dismissible outright "or "ailure o" the petitioners to "ile a motion "or reconsideration o" the decision under review be"ore resorting to certiorari. >urther, the 4A held that the case did not "all under any o" the recogni<ed e(ceptions to the rule on motions "or reconsideration. #he petitioners then moved "or the reconsideration, which was denied in the second assailed 3esolution, noting the absence o" an e(planation "or their "ailure to "ile a motion "or reconsideration o" the assailed 2,34 decision in their petition "or certiorari. CONTENTION T E RESPONDENT: Globalban! asserted that the ++P should prevail and the petitioners were no longer entitled to the additional F0L gratuity pay which was already paid CONTENTION T E PETITIONERS: According to the petitioners, they are entitled to separation pay at a rate o" one month salary "or every year o" service under the ,abor 4ode and gratuity pay at a rate o" one month salary "or every year o" service whether under the 6ld Plan or the 2ew Gratuity Plan. +ince what they received as separation pay was e1uivalent to only ?F0L or one and one hal" o" their monthly salaries "or every year o" service, the respondents are still

liable to pay them the de"iciency e1uivalent to one hal" o" their monthly salary "or every year o" service. ISSUES: ?. 5hether the 4A erred in dismissing their petition due to their "ailure to "ile a motion "or reconsideration o" the 2,34$s adverse resolution. .. 5hether the employees are still entitled to the additional F0L. RULING: ?. #he Petition has no merit, hence, must be denied. #he petitioners$ une(plained "ailure to move "or the reconsideration o" the 2,34$s resolution be"ore applying "or a writ o" certiorari in the 4A is reason enough to deny such application. #o begin with, the petitioners do not have the discretion or prerogative to determine the propriety o" complying with procedural rules. #he petitioners may not arrogate to themselves the determination o" whether a motion "or reconsideration is necessary or not. #o dispense with the re1uirement o" "iling a motion "or reconsideration, the petitioners must show a concrete, compelling, and valid reason "or doing so. .. #he petitioners$ receipt o" separation pay e1uivalent to their one and a hal" months salary "or every year o" service as provided in the ++P and the 2ew Gratuity Plan more than su""iciently complies with the ,abor 4ode, which only re1uires the payment o" separation pay at the rate o" one month salary "or every year o" service. #he petitioners do not 1uestion the legality o" their separation "rom the service or the basis "or holding their positions redundant. 5hat they raise is their entitlement to gratuity pay, as provided in the 6ld Plan, in addition to what they received under the ++P. According to the petitioners, they are entitled to separation pay at a rate o" one month salary "or every year o" service under the ,abor 4ode and gratuity pay at a rate o" one month salary "or every year o" service whether under the 6ld Plan or the 2ew Gratuity Plan. 5e disagree. #he 2ew Gratuity Plan has repealed the 6ld Plan. REALDA .!. NE/ AGE GRAP ICS FACTS: Petitioner Billy 3ealda was a "ormer machine operator o" respondent 2ew Age Graphics. 3ealda was dismissed "rom employment due to the "ollowing violationsC insubordination, deliberate slowdown o" wor!, habitual tardiness, absence without o""icial leave and ine""iciency. #he 2,34 and the ,abor Arbiter "ound him to be illegally dismissed. #he 4ourt o" Appeals, however, ruled otherwise. It held that 3ealda$s un)usti"ied re"usal to render overtime wor!, une(plained "ailure to observe prescribed wor! standards, habitual tardiness and chronic absenteeism despite warning and non compliance with the directive "or him to e(plain his numerous unauthori<ed absences constitute su""icient grounds "or his termination. #he 4A also held that 3ealda was not accorded procedural due process since the notice given to him was already a notice o" dismissal. CONTENTION OF T E PETITIONER: 8e cannot render overtime wor! since he was not "eeling well that day. 8is "ailure to render overtime wor! was not will"ul and does not constitute a valid ground "or will"ul disobedience. 8e was not a""orded procedural due process. CONTENTION OF T E RESPONDENTS: 3ealda$s dismissal was )usti"ied. 8is e(cuse "or not wor!ing overtime, even i" it is legally demanded, was merely sel" serving. 8e also violated many rules and regulations li!e being absent without valid e(cuse. 8is violations warrant dismissal. ISSUE: 5hether or not the petitioner was illegally dismissed. RULING: 2o. 3ealda$s arbitrary de"iance to Graphics, Inc.$s order "or him to render overtime wor! constitutes will"ul disobedience. An employer has the right to re1uire the per"ormance o" overtime service in any o" the situations contemplated under Article DI o" the ,abor 4ode and an employee$s non compliance is will"ul disobedience. >or will"ul disobedience to be a valid cause "or dismissal, these two elements must concurC @?A the employee$s assailed conduct must have been will"ul, that is, characteri<ed by a wrong"ul and perverse attitude; and @.A the order violated must have

been reasonable, law"ul, made !nown to the employee, and must pertain to the duties which he had been engaged to discharge. In the present case, there is no 1uestion that petitioners$ order "or respondent to render overtime service to meet a production deadline complies with the second re1uisite. Graphics, Inc. "ailed to a""ord the petitioner a reasonable opportunity to be heard and de"end itsel". An administrative hearing set on the same day that the petitioner received the memorandum and the .GJ hour period "or him to submit a written e(planation are "ar "rom being reasonable. #here is no indication that Graphics, Inc. issued a second notice, in"orming the petitioner o" his dismissal. Graphics, Inc. decided to terminate the petitioner$s employment a"ter he ceased reporting "or wor! "rom the time he received the memorandum re1uiring him to e(plain and subse1uent to his "ailure to submit a written e(planation. #he 4A is correct in holding that he was not a""orded due process prior to dismissal.

8owever, the petitioners alleged that the charges against them were "abricated and that their dismissal was prompted by Xingspoint E(press$ aversion to their union activities. ISSUE: 5hether or not the petitioners$ termination is valid. RULING: 7es, the petitioners were legally dismissed. It is "undamental that in order to validly dismiss an employee, the employer is re1uired to observe both substantive and procedural due processJthe termination o" employment must be based on a )ust or authori<ed cause and the dismissal must be e""ected a"ter due notice and hearing. #he 4ourt agreed with the 4A that the petitioners$ re"usal to submit themselves to drug test is a )ust cause "or their dismissal. An employer may terminate an employment on the ground o" serious misconduct or will"ul disobedience by the employee o" the law"ul orders o" his employer or representative in connection with his wor!. 5ill"ul disobedience re1uires the concurrence o" two elementsC @?A the employee9s assailed conduct must have been will"ul, that is, characteri<ed by a wrong"ul and perverse attitude; and @.A the order violated must have been reasonable, law"ul, made !nown to the employee, and must pertain to the duties which he had been engaged to discharge. Both elements are present in this case. At no point did the dismissed employees deny Xingspoint E(press$ claim that they re"used to comply with the directive "or them to submit to a drug test or, at the very least, e(plain their re"usal. #hus, this gives rise to the impression that their non compliance is deliberate. #he utter lac! o" reason or )usti"ication "or their insubordination indicates that it was prompted by mere obstinacy, hence, will"ul and warranting o" dismissal. Drivers are indispensable to Xingspoint E(press$ primary business o" rendering door to door delivery services. It is common !nowledge that the use o" dangerous drugs has adverse e""ects on driving abilities that may render the dismissed employees incapable o" per"orming their duties to Xingspoint E(press and acting against its interests, in addition to the threat they pose to the public. 2onetheless, while Xingspoint E(press had reason to sever their employment relations, the 4ourt "ound its supposed observance o" the re1uirements o" procedural due process pretentious. 5hile Xingspoint E(press re1uired the dismissed employees to e(plain their re"usal to submit to a drug test, the . days a""orded to them to do so cannot 1uali"y as %reasonable opportunity', which the 4ourt construed in Xing o" Xings #ransport, Inc. v. &amac as a period o" at least F calendar days "rom receipt o" the notice. #hus, even i" Xingspoint E(press$ de"ective attempt to comply with procedural due process does not negate the e(istence o" a )ust cause "or their dismissal, it was held that Xingspoint E(press is still liable to indemni"y the dismissed employees.

0A0AMPI and $&! MEMBERS .!. 0INGSPOINT E3PRESS and LOGISTICS FACTS: Victor PaQuelos, Bobby Dacara, Alson Di<on, +aldy Dimabayao, >ernando ,upangco, Jr., +andy Pa<i, 4amilo #abarangao, Jr., Eduardo 8i<ole and 3eginald were the "ormer drivers o" Xingspoint E(press and ,ogistic, a sole proprietorship registered in the name o" &ary Ann 4o and engaged in the business o" transport o" goods. 6n January ?E, .00E, Xingspoint E(press issued separate notices stating the in"ractions committed by the petitioners. Xingspoint E(press directed them to e(plain the said in"ractions with a warning that "ailure to do so would mean waiver o" their right to submit their answer. #hey "urther advised them to %opt "or a "ormal investigation with assistance o" the counsel, or proceed with the investigation you may choose'. #hey were also placed under preventive suspension "or thirty @/0A days e""ective on the same date. Due to petitioners$ "ailure to submit their written e(planation within GD hours, they were dismissed "rom service on January .0, .00E on the grounds o" serious misconduct, dishonesty, loss o" trust and con"idence and commission o" acts inimical to the interest o" Xingspoint E(press. A complaint "or illegal dismissal was then "iled by petitioners. #he ,abor Arbiter "ound Dacara, ,upangco, Pa<i, #abarangao, 8i<ole and 4arillo illegally dismissed. 6n the other hand, the complaint was dismissed inso"ar as Panuelos, Di<on and Dimabayao are concerned as they were deemed not to have "iled their position papers. 5hile the allegation o" anti unionism as the primordial motivation "or the dismissal is considered un"ounded, the respondents "ailed to prove that the dismissal was "or a )ust cause. 6n appeal, the 2ational ,abor 3elations 4ommission a""irmed the ,abor Arbiter$s decision. Xingspoint E(press moved "or reconsideration and the 2,34 reversed itsel" and declared the individual petitioners legally dismissed on the ground o" will"ul disobedience o" a law"ul order by re"using to undergo drug testing. Petitioners moved "or reconsideration but the same was denied. +ubse1uently, the petitioners "iled a petition "or certiorari with the 4ourt o" Appeals. #he 4ourt o" Appeals reversed and set aside the 2,34 decision. 3espondents promptly "iled a motion "or reconsideration. +imilar to the 2,34, the 4A reversed itsel" and retracted its earlier "inding that the individual petitioners were illegally dismissed. Petitioners moved "or reconsideration but it was denied by the 4A, hence this petition. CONTENTION OF T E RESPONDENT: Xingspoint E(press and ,ogistic aver that petitioners committed the "ollowing acts against the companyC ?. >abrication o" baseless money claims against the company; .. &isleading "ellow co wor!ers to sign the malicious complaint "or money claims against the company; /. 3e"usal to undergo the company$s general drug test; and G. E(torting money "rom co wor!ers to "und activities that they were never "ully in"ormed o".

POLYFOAM-RGC INTERNATIONAL .!. CONCEPCION FACTS: 6n >ebruary D, .000, respondent "iled a 4omplaint "or illegal dismissal, non payment o" wages, premium pay "or rest day, separation pay, service incentive leave pay, ?/th month pay, damages, and attorney$s "ees against Poly"oam and &s. 2atividad 4heng @4hengA. 3espondent alleged that he was hired by Poly"oam as an =all around= "actory wor!er and served as such "or almost si( years. 6n January ?G, .000, he allegedly discovered that his time card was not in the rac! and was later in"ormed by the security guard that he could no longer punch his time card. 5hen he protested to his supervisor, the latter allegedly told him that the management decided to dismiss him due to an in"raction o" a company rule. 4heng, the company$s manager, also re"used to "ace him. 3espondent$s counsel later wrote a letter to Poly"oam$s manager re1uesting that respondent be re admitted to wor!, but the re1uest remained unheeded prompting the latter to "ile the complaint "or illegal dismissal. 6n April .D, .000, Grama)e "iled a &otion "or Intervention claiming to be the real employer o" respondent. 6n the other hand, Poly"oam and 4heng "iled a &otion to Dismiss on the grounds that the 2,34 has no )urisdiction over the case, because o" the absence o" employer employee relationship

between Poly"oam and respondent and that the money claims had already prescribed. 6n &ay .G, .000, ,abor Arbiter Adol"o Babiano issued an 6rder granting Grama)e$s motion "or intervention, it appearing that she is an indispensable party and denying Poly"oam and 4heng$s motion to dismiss as the lac! o" employer employee relationship is only a matter o" de"ense. In their Position Paper, Poly"oam and 4heng insisted that the 2,34 has no )urisdiction over the case, because respondent was not their employee. #hey li!ewise contended that respondent$s money claims had already prescribed. >inally, they "ault respondent "or including 4heng as a party de"endant, considering that she is not even a director o" the company. In her Position Paper, Grama)e claimed that P.A. Grama)e Employment +ervices @PAGE+A is a legitimate )ob contractor who provided some manpower needs o" Poly"oam. It was alleged that respondent was hired as =pac!er= and assigned to Poly"oam, charged with pac!ing the latter$s "inished "oam products. +he argued, however, that respondent was not dismissed "rom employment, rather, he simply stopped reporting "or wor!. ISSUE: 5hether or not respondent was illegally dismissed "rom employment. RULING: 7E+. 3espondent stated that on January ?G, .000, his time card was suddenly ta!en o"" the rac!. 8is supervisor later in"ormed him that Poly"oam$s management decided to dismiss him due to in"raction o" company rule. In short, respondent insisted that he was dismissed "rom employment without )ust or law"ul cause and without due process. Poly"oam did not o""er any e(planation o" such dismissal. It, instead, e(plained that respondent$s real employer is Grama)e. Grama)e, on the other hand, denied the claim o" illegal dismissal. +he shi"ted the blame on respondent claiming that the latter in "act abandoned his wor!. #he ,A gave credence to respondent$s narration o" the circumstances o" the case. +aid conclusion was a""irmed by the 4A. 5e "ind no reason to depart "rom such "indings. Abandonment cannot be in"erred "rom the actuations o" respondent. 5hen he discovered that his time card was o"" the rac!, he immediately in1uired "rom his supervisor. 8e later sought the assistance o" his counsel, who wrote a letter addressed to Poly"oam re1uesting that he be re admitted to wor!. 5hen said re1uest was not acted upon, he "iled the instant illegal dismissal case. #hese circumstances clearly negate the intention to abandon his wor!. Petitioners "ailed to show any valid or authori<ed cause under the ,abor 4ode which allowed it to terminate the services o" respondent. 2either was it shown that respondent was given ample opportunity to contest the legality o" his dismissal. 2o notice o" termination was given to him. 4learly, respondent was not a""orded due process. 8aving "ailed to establish compliance with the re1uirements o" termination o" employment under the ,abor 4ode, the dismissal o" respondent was tainted with illegality.

one o" the participants. #o resolve the issue, Valle Verde conducted an investigation; the employees who were assigned in the two "unction rooms were summoned and made to e(plain, in writing, what had transpired. 6n &arch E, .000, Valle Verde sent a memorandum to Esguerra re1uiring her to show cause as to why no disciplinary action should be ta!en against her "or the non remittance o" the Ballroom$s sales. Esguerra was placed under preventive suspension with pay, pending investigation. In her letter response, Esguerra denied having committed any misappropriation. +he e(plained that it had been her daughter @who was assigned as a "ood chec!erA who lost the money. #o settle the matter, Esguerra paid the unaccounted amount as soon as her daughter in"ormed her about it. Esguerra also e(plained the unauthori<ed charging o" "ood on Judge Boni"acio$s account. +he alleged that Judge Boni"acio too! pity on her and told her to ta!e home some "ood and to charge it on his account. Valle Verde "ound Esguerra$s e(planation unsatis"actory and, on July .E, .000, issued a second memorandum terminating Esguerra$s employment. ISSUE: 562 Esguerra was illegally dismissed. RULING: NO. =*nder the ,abor 4ode, the re1uirements "or the law"ul dismissal o" an employee are two "oldOCP the substantive and the procedural aspects. 2ot only must the dismissal be "or a )ust or authori<ed cause, the rudimentary re1uirements o" due process S notice and hearing S must, li!ewise, be observed ( ( (. 5ithout the concurrence o" the two, the termination would ( ( ( be illegalO;P employment is a property right o" which one cannot be deprived o" without due process.= #here are no irregularities in the service o" notice to Esguerra. #he memorandum dated &arch E, .000?I in"ormed her o" the charges, and clearly directed her to show cause, in writing, why no disciplinary action should be imposed against her. Esguerra$s allegation that the notice was insu""icient since it "ailed to contain any intention to terminate her is incorrect. #o meet the re1uirements o" due process in the dismissal o" an employee, an employer must "urnish the wor!er with two written noticesC @?A a written notice speci"ying the grounds "or termination and giving to said employee a reasonable opportunity to e(plain his side and @.A another written notice indicating that, upon due consideration o" all circumstances, grounds have been established to )usti"y the employer$s decision to dismiss the employee. 4ontrary to Esguerra$s allegation, the law does not re1uire that an intention to terminate one$s employment should be included in the "irst notice. It is enough that employees are properly apprised o" the charges brought against them so they can properly prepare their de"enses; it is only during the second notice that the intention to terminate one$s employment should be e(plicitly stated. #here is also no basis to 1uestion the absence o" a proper hearing. #he "ollowing are the guiding principles in connection with the hearing re1uirement in dismissal casesC aA =ample opportunity to be heard= means any meaning"ul opportunity @verbal or writtenA given to the employee to answer the charges against him and submit evidence in support o" his de"ense, whether in a hearing, con"erence or some other "air, )ust and reasonable way. bA a "ormal hearing or con"erence becomes mandatory only when re1uested by the employee in writing or substantial evidentiary disputes e(ist or a company rule or practice re1uires it, or when similar circumstances )usti"y it. cA the =ample opportunity to be heard= standard in the ,abor 4ode prevails over the =hearing or con"erence= re1uirement in the implementing rules and regulations. In sum, the e(istence o" an actual, "ormal =trial type= hearing, although pre"erred, is not absolutely necessary to satis"y the employee9s right to be heard. Esguerra was able to present

ESGUERRA .!. VALLE VERDE COUNTRY CLUB FACTS: 6n April ?, ?I-D, Valle Verde hired Esguerra as 8ead >ood 4hec!er. In ?III, she was promoted to 4ost 4ontrol +upervisor. 6n January ?F, .000, the 4ouples "or 4hrist held a seminar at the country club. Esguerra was tas!ed to oversee the seminar held in the two "unction rooms J the Ballroom and the #anay 3oom. #he arrangement was that the "ood shall be served in the "orm o" pre paid bu""et, while the drin!s shall be paid in a =pay as you order= basis. #he Valle Verde &anagement "ound out the "ollowing day that only the proceeds "rom the #anay 3oom had been remitted to the accounting department. #here were also unauthori<ed charges o" "ood on the account o" Judge 3odol"o Boni"acio,

her de"enses; and only upon proper consideration o" it did Valle Verde send the second memorandum terminating her employment. +ince Valle Verde complied with the two notice re1uirement, no procedural de"ect e(ists in Esguerra$s termination. 6n the substantive aspect o" Esguerra$s dismissal, Esguerra occupied a position o" trust. #here are two @.A classes o" positions o" trust J the "irst class consists o" managerial employees, or those vested with the power to lay down management policies; and the second class consists o" cashiers, auditors, property custodians or those who, in the normal and routine e(ercise o" their "unctions, regularly handle signi"icant amounts o" money or property. Esguerra held the position o" 4ost 4ontrol +upervisor and had the duty to remit to the accounting department the cash sales proceeds "rom every transaction she was assigned to. #his is not a routine tas! that a regular employee may per"orm; it is related to the handling o" business e(penditures or "inances. >or this reason, Esguerra occupies a position o" trust and con"idence J a position enumerated in the second class o" positions o" trust. Any breach o" the trust imposed upon her can be a valid cause "or dismissal. In Jardine Davies, Inc. v. 2ational ,abor 3elations 4ommission, we held that loss o" con"idence as a )ust cause "or termination o" employment can be invo!ed when an employee holds a position o" responsibility, trust and con"idence. In order to constitute a )ust cause "or dismissal, the act complained o" must be related to the per"ormance o" the duties o" the dismissed employee and must show that he or she is un"it to continue wor!ing "or the employer "or violation o" the trust reposed in him or her. #here is no merit in the allegation that it was Esguerra$s daughter who should be held liable. +he had no custody o" the cash sales since it was not part o" her duties as a "ood chec!er. It was Esguerra$s responsibility to account "or the cash proceeds; in case o" problems, she should have promptly reported it, regardless o" who was at "ault. Instead, she settled the unaccounted amount only a"ter the accounting department in"ormed her about the discrepancy, almost one month "ollowing the incident. Esguerra$s "ailure to ma!e the proper report re"lects on her irresponsibility in the custody o" cash "or which she was accountable, it was her duty to account "or the sales proceeds, and she should have !nown about the missing amount immediately a"ter the event.

6n >ebruary ?0, .00E, De)an received a letter "rom &arcelino 3osario, head o" &eralco9s Investigation Paralegal +ervices, charging him with the unauthori<ed ta!ing o" .0 meter soc!ets, in violation o" +ection -, paragraphs G and ?? o" the 4ompany 4ode o" Employee Discipline, in relation to Article .D. o" the ,abor 4ode. 6n >ebruary ?-, .00E, &eralco conducted a "ormal investigation where De)an admitted issuing the meter soc!ets without the authori<ation o" the applicants "or electric connection. 8e alleged that he released the items even without authori<ation as it had been the accepted practice in the o""ice, provided the deposit "ee had been paid. 8e claimed that he tal!ed with Depante, through the cell phone o" Duenas, about it, a"ter Duenas himsel" re1uested him @De)anA to release the meter soc!ets to Go<arin. 5hen De)an released the meter soc!ets, Duenas instructed Go<arin to ta!e them out o" the &eralco premises and load them in 3eyes9 )eep. Also testi"ying at the investigation, Depante corroborated De)an9s account o" the incident. 8e alleged that he made the re1uest "or the release o" the meter soc!ets due to his inability to pic! up the items himsel" as he was busy with another pro)ect at the time. 8e and Duenas retrieved the meter soc!ets "rom 3eyes9 house the ne(t day. *nconvinced with De)an9s e(planation, &eralco served De)an a letter on April E, .00E, terminating his employment e""ective the "ollowing day, with "or"eiture o" all rights and privileges. 6n April .0, .00E, De)an "iled his complaint with the 2ational ,abor 3elations 4ommission @2,34A. ISSUE: 562 De)an was illegally dismissed. RULING: 2o. De)an is liable as charged. &ore speci"ically, he is liable "or violation o" +ection -, paragraphs G and ?? o" the 4ompany 4ode o" Employee Discipline, constituting serious misconduct, "raud and will"ul breach o" trust o" the employer, )ust causes "or termination o" employment under the law. #he "acts and the evidence on record clearly bear this out and we wonder how the 4A could have missed the seriousness or gravity o" De)an9s transgression. #here is no dispute about the release o" the meter soc!ets. Also, the persons involved were clearly identi"ied De)an; Go<arin or &ang Islao, a private electrician who received the meter soc!ets; 3eyes, the owner o" the )eep where the meter soc!ets were loaded by Go<arin; Duenas, a &eralco "ield representative; and Depante, another private electrician who purportedly owned the meter soc!ets. #here is also no 1uestion that De)an released the meter soc!ets to Go<arin without the written authority or +PA "rom the customer or customers who applied "or electric connection @as a matter o" company policyA. De)an released the meter soc!ets to Go<arin on the mere say so o" Depante, as he claimed, through a call to Duenas9 cell phone, and )usti"ied his act to be in accord with accepted company practice. De)an tried to minimi<e the gravity o" his o""ense by denying that the meter soc!ets were lost and that he issued them without authority since they were all contracted, as shown by the +I2s he submitted in evidence. #his is untenable. 5hile the meter soc!ets might not have been lost, their issuance or release was highly irregular, perpetrated to de"raud the company. #he release o" the meter soc!ets served as a !ey element in a private contracting activity "or electric service connection o" De)an and Duenas. It was bad enough that De)an "ailed to as! "or a written authori<ation "or the release o" the meter soc!ets as re1uired by company policy. 8is apparent motive behind the move to mislead the company, in concert with Duenas, as to the real recipient o" the meter soc!ets made it worse. It could only result in a loss to &eralco as it was not the customer, who applied "or electric service, or his authori<ed representative who received the meter soc!ets. As the circumstances strongly indicate, it was Duenas who retrieved the meter soc!ets. It was obviously an act intended to de"raud the company. It lends credence to &eralco9s submission that

MERALCO .!. DEJAN FACTS: 3espondent 8erminigildo De)an commenced employment with the &anila Electric 4ompany on July -, ?II.. 8e was then &eralco9s branch representative in its +an Pedro, ,aguna branch, with a monthly salary o" P/0,F00.00. 8is wor! consisted o" accepting payments o" the re1uired "ees "rom applicants "or electric service installation and issuing the corresponding meter soc!ets:bases a"ter payment o" a deposit, preceded by an inspection o" the premises to be energi<ed by a &eralco "ield personnel. In the mid a"ternoon o" &arch ?D, .00F, the security guard on duty at the branch, 5arlito +ilverio, noticed a certain Estanislao Go<arin a.!.a. &ang Islao, a private electrician, ta!e out "rom the branch premises .0 pieces o" meter soc!ets which were then loaded into a par!ed &eralco contracted )eep belonging to one 4esar 3eyes. 3eyes brought the meter soc!ets to his house. #he meter soc!ets were therea"ter allegedly pic!ed up by Gil Duenas, a &eralco "ield representative. De)an was as!ed to e(plain the incident. In his letter e(planation, dated &arch ./, .00F, to a certain Emilia +J 3easo, De)an admitted that he released the meter soc!ets in 1uestion because the deposit "ees had already been paid. #he payor, a certain Antonio A. Depante a.!.a. Bruce, also an electrician, as!ed "or the release o" the items. Allegedly, he had several contracts "or service installation with the branch. De)an indicated the list o" contracts covering the released meter soc!ets. +ometime in +eptember, 6ctober and 2ovember .00F, &eralco as!ed Go<arin, De)an, and 3eyes to give their sworn statements on the incident.

Duenas was engaged in private contracting "or electric connection, together with De)an. #he above impression is bolstered by De)an9s "alse claim that the meter soc!ets were all accounted "or because they were issued "or Depante9s service applications. As the company discovered, however, the +I2s De)an submitted in evidence covered applications which had already been inspected, approved and provided @installedA with meters even be"ore &arch ?D, .00F, the date when the .0 meter soc!ets were released. &eralco argued be"ore the 2,34.- that i" Depante9s service applications had already been installed with meters, it could only be that the meter soc!ets De)an issued were intended "or purposes which the company had not approved or authori<ed. It added that there was clear indication o" De)an9s intent to gain "rom and to de"raud the company. De)an submitted the +I2s in 1uestion to ma!e it appear that the released meter soc!ets pertained to outstanding service applications contracted by Depante; in other words, to give a semblance o" regularity in the transaction and to avoid liability "or their unauthori<ed release. 8e released the meter soc!ets with intent to de"raud the company. #he court cannot blame &eralco "or losing its trust and con"idence in De)an. 8e is no ordinary employee. As branch representative, =he was principally charged with the "unction and responsibility to accept payment o" "ees re1uired "or the installation o" electric service and "acilitate issuance o" meter soc!ets.= #he duties o" his position re1uire him to always act with the highest degree o" honesty, integrity and sincerity, as the company puts it. In light o" his "raudulent act, &eralco, an enterprise imbued with public interest, cannot be compelled to continue De)an9s employment, as it would be inimical to its interest. 2eedless to say, =OtPhe law, in protecting the rights o" the laborer, authori<es neither oppression nor sel" destruction o" the employer.= >or sure, De)an was validly dismissed "or serious misconduct, and loss o" trust and con"idence.

o""ices. Accordingly, many o" the security guards were placed on "loating status. =>loating status= means an inde"inite period o" time when one does not receive any salary or "inancial bene"it provided by law. In this case, petitioners were actually reassigned to new posts, albeit in a di""erent location "rom where they resided. #hus, there can be no "loating status or inde"inite period to spea! o". Instead, petitioners were the ones who re"used to report "or wor! in their new assignment. In cases involving security guards, a relie" and trans"er order in itsel" does not sever the employment relationship between the security guards and their agency. Employees have the right to security o" tenure, but this does not give them such a vested right to their positions as would deprive the company o" its prerogative to change their assignment or trans"er them where their services, as security guards, will be most bene"icial to the client. An employer has the right to trans"er or assign its employees "rom one o""ice or area o" operation to another in pursuit o" its legitimate business interest, provided there is no demotion in ran! or diminution o" salary, bene"its, and other privileges; and the trans"er is not motivated by discrimination or bad "aith, or e""ected as a "orm o" punishment or demotion without su""icient cause.

P ILBAG INDUSTRIAL .!. P ILBAG /OR0ERS UNION FACTS: Edwin &auricio and Rharralyn 4amacho were employees o" the petitioner, Philbag Industrial &anu"acturing 4orporation @companyA, until their dismissal in the second hal" o" .00G. #hey wor!ed as cutter and circular loom operator, respectively. #hey were members o" the respondent, Philbag 5or!ers *nion ,a!as at Gabay ng &anggagawang 2ag!a!aisa @unionA, the e(clusive bargaining representative o" the company$s ran! and "ile employees. #he union had a collective bargaining agreement @4BAA with the company. &auricio and 4amacho protested their dismissal, prompting the union and the company to convene the 4BA$s grievance machinery in an e""ort to resolve the matter at plant level. *nable to reach a settlement, they agreed to have the dispute resolved through voluntary arbitration. In a submission agreement,G they as!ed Voluntary Arbitrator @VAA Angel ,. Ancheta to resolve the dispute. #he union, through its President, Danilo 4aQete, represented &auricio and 4amacho. ISSUE: Illegal Dismissal RULING: *nder the law, the burden o" proving that the termination o" employment was "or a valid or authori<ed cause rests on the employer. >ailure to discharge this burden would result in an un)ust or illegal dismissal, as aptly pointed out by the 4A. 5e "ind such a "ailure on the part o" the employer in this case. In &auricio$s case, the company$s submissions "all short o" establishing that he was indeed not doing his )ob as cutter on &ay .G, .00G, together with "our other employees. 8e was, as he claimed @through his unionA, unwinding te(tile "rom the rolled bul! be"ore cutting it. #he cutters devised this =unwind and cut= method to ma!e their wor! easier. #he union$s claim on the matter had never been disputed by the company. Early on the day in 1uestion, 3einoso, the company$s cutting supervisor, allegedly saw "rom a distance that &auricio and "our other employees were not cutting the te(tile and, there"ore, not doing their )obs. 3einoso submitted an incident report to the company on June .D, .00G, more than a month a"ter the alleged incident. 6n July /, .00G, the company dismissed &auricio a"ter giving him three demerit points "or violating +ection B@FA o" the company rules and regulations on =idling or wasting company wor!ing hours,= which i" added to the demerit points he incurred "or past in"ractions would total ?. demerits points, within a twelve month period, enough to warrant his dismissal. #he 4A re"used to give credit to 3einoso$s report, dismissing it as a =mere a"terthought,= on grounds earlier mentioned.

MOJAR .!. AGRO COMMERCIAL FACTS: Petitioners were employed as security guards by respondent and assigned to the various branches o" the Ban! o" 4ommerce in Pangasinan, ,a *nion and Ilocos +ur. In separate 6""ice 6rders dated ./ and .G &ay .00., petitioners were relieved "rom their respective posts and directed to report to their new assignments in &etro &anila e""ective / June .00.. #hey, however, "ailed to report "or duty in their new assignments, prompting respondent to send them a letter dated ?D June .00.. It re1uired a written e(planation why no disciplinary action should be ta!en against them, but the letter was not heeded. 6n ?F >ebruary .00F, petitioners "iled a 4omplaint "or illegal dismissal against respondent and the Ban! o" 4ommerce, Dagupan Branch, be"ore the 2ational ,abor 3elations 4ommission @2,34A. Petitioners claimed, among others, that their reassignment was a scheme to sever the employer employee relationship and was done in retaliation "or their pressing their claim "or salary di""erential, which they had earlier "iled against respondent and the Ban! o" 4ommerce be"ore the 2,34. #hey also contended that the trans"er to &anila was inconvenient and pre)udicial, since they would incur additional e(penses "or board and lodging. ISSUEC Illegal Dismissal RULING: Petitioners argue that they were illegally dismissed, based on the ?IDI case Agro 4ommercial +ecurity +ervices Agency, Inc. v. 2,34., which holds that when the "loating status o" employees lasts "or more than si( @EA months, they may be considered to have been illegally dismissed "rom the service. *n"ortunately, the above mentioned case is not applicable here. In Agro, the service contracts o" the security agency therein with various corporations and government agencies J to which the security guards were previously assigned J were terminated, generally due to the se1uestration o" the said

5e share the 4A$s reservations on &auricio$s dismissal. #he company$s evidence on his alleged in"raction does not substantially show that he violated company rules and regulations to warrant his dismissal. 3einoso$s report on &auricio not doing his )ob on &ay .G, .00G came one month a"ter the alleged incident, thus inviting the 4A$s suspicion on its veracity. Also, as the 4A observed, why did 3einoso not con"ront &auricio and the "our others she caught idling, i" they had indeed been not doing their wor!. It is surprising that she did not call their attention about the incident considering that she was their supervisor. 3einoso$s delayed report casts doubt on the company$s case against &auricio. In +evillana v. I.#. @InternationalA 4orporation, et al., the 4ourt stressed that the evidence must be substantial and not arbitrary, and "ounded on clearly established "acts to warrant a dismissal. #he petition must "ail with respect to &auricio. 5e have the same conclusion in relation to 4amacho. ,i!e &auricio, the company terminated 4amacho$s employment "or having incurred more than the allowed demerit points to remain in the service. #he company rules and regulations did not de"ine the =demerits= system o" employee discipline, but a"ter a reading o" the document, we gather that an employee is meted demerit points "or committing any o" the o""enses listed under G36*2D+ >63 AD&I2I+#3A#IVE DI+4IP,I2A37 A4#I62, +ections A, B, 4, D and E o" the company rules and regulations. As the records show, the company charged 4amacho o" having been on A56, "rom &arch ?F .?, .00G @- daysA. It re"used to recogni<e the medical certi"icate presented by 4amacho "or the period as it was not countersigned by the company doctor. +he was thus meted ?. demerit points, enough to warrant her dismissal under +ection E above, item ? o" which provides that being on A56, "or si( or more consecutive days shall be given ?. demerit points. *nder the title DI+4IP,I2A37 A4#I62 o" the company, any employee who has been given ?. demerit points under +ection E, or a total o" ?. demerit points under +ections A to D, within a ?. month period, shall be separated "rom the service. #he company "actored in 4amacho$s earlier A56, in"raction @>ebruary ?E, .00GA "or two days @two demerit pointsA to ma!e her demerit points add up to ?G, two more than the limit. #here is no dispute that 4amacho was absent "rom wor! "rom &arch F to .?, .00G. But as the 4A correctly pointed out, the circumstances surrounding her absence did not )usti"y her separation "rom the service. 5e 1uote with approval the "ollowing e(cerpt "rom the 4A rulingC A )udicious evaluation o" the "acts shows that 4amacho did not deliberately disregard the company rules. +he did comply with the said policy although =1uite belatedly.= 2onetheless, 5e do not "ind any valid reason "or the company doctor to re"use to countersign the sub)ect medical certi"icate since it was properly signed by the physician o" 4amacho and bears all the earmar!s o" regularity in its issuance and hence, is entitled to "ull probative value. Besides, said company doctor could have easily veri"ied the "acts stated therein. In "act, 4amacho had been absent "rom / to ?G o" &arch .00G due to abdominal pain and slight bleeding and the medical certi"icate covering the said period was duly countersigned by the company doctor. #he same is true with the &edical 4erti"icate dated F April .00G which advised 4amacho to rest "or a month due to threatened abortion. #hus, 4amacho$s records would reveal that indeed she was su""ering "rom threatened abortion and that she had a valid reason to absent hersel" "or .0 days starting "rom ?F &arch .00G. &oreover, it is interesting to note that Philbag did not include the period "rom .. &arch to G April .00G.?Uwphi? 6bviously, this is because it had already received in"ormation through a telephone call that 4amacho was sic!. I" Philbag can give credence to a telephone call then why cannot it accept a medical certi"icate which only lac!s a countersignatureT It is obvious that the company overstepped the bounds o" its management prerogative in the dismissal o" &auricio and 4amacho. It lost sight o" the principle that management prerogative must be e(ercised in good "aith and with due

regard to the rights o" the wor!ers in the spirit o" "airness and with )ustice in mind. In sum, we "ind &auricio and 4amacho$s dismissal without a valid cause and, there"ore, illegal.

/ATERFRONT CEBU CITY

OTEL .!. JIMENEZ

FACTS: 3espondents &a. &elanie P. Jimene<, Jac1ueline 4. Baguio, ,ovella V. 4arillo, and &aila G. 3oble were hired "or 4lub 5ater"ront @the 4lubA, a division under petitioner 5ater"ront 4ebu 4ity 8otel @the 8otelA which catered to "oreign high sta!es gamblers. 6n ?. &ay .00/, respondents received identical letters o" termination "rom petitioner$s Director o" 8uman 3esources in"orming them o" the temporary suspension o" business o" the 4lub. A total o" GF employees were noti"ied o" the imminent closure. 6n the "ollowing day, petitioner served the notice o" suspension o" business with the Department o" ,abor and Employment @D6,EA. #he dismissed employees were o""ered separation pay e1uivalent to hal" month pay "or every year o" service. #he 4lub$s closure too! e""ect on ?F June .00/. 6n .E June .00/, respondents "iled a complaint be"ore the ,abor Arbiter "or illegal dismissal, illegal suspension, and non payment o" salaries and other monetary bene"its. #hey li!ewise prayed "or damages and attorney$s "ees. 3espondents re"used to believe that the 4lub was su""ering "rom losses because they !new e(actly the number o" arrivals as well as )un!et clients o" the 4lub. #hey presented documentsE to show the arrival o" "oreign guests at the 4lub. 3espondents maintained that upon the other hand, they are employees o" petitioner assigned to the 4lub, hence they should have been allowed to wor! in other departments o" the hotel. 6ppositely, petitioner averred that since April .00., the 4lub has been incurring losses that it had to temporarily cease its operations e""ective ?F June .00/. #o support the allegations o" losses, petitioner presented "inancial statements o" 5ater"ront Promotion, ,td. Petitioner argued that pursuant to Article .DE o" the ,abor 4ode, the temporary suspension o" business operations does not terminate employment. #hus, respondents have no cause o" action against them. ISSUE: Illegal dismissal RULING: Initially, the respondents were laid o"" as a result o" the suspension o" the 4lub$s operation. *nder Art. .DE o" the ,abor 4ode, a bona "ide suspension o" business operations "or not more than si( @EA months does not terminate employment. A"ter si( @EA months, the employee may be recalled to wor! or be permanently laid o"". In this case, more than si( @EA months have elapsed "rom the time the 4lub ceased to operate. 8ence, respondents$ termination became permanent. Petitioner anchors its arguments mainly on the thesis that retrenchment to prevent losses was underta!en to )usti"y the dismissal o" respondents. Petitioner li!ened the closure o" the 4lub, which it deemed as a division:department, to retrenchment. Acting on the same premise that the 4lub is a division o" petitioner, respondents demanded that they should be trans"erred to another department o" petitioner, instead o" being dismissed "rom employment. 3espondents also claim that petitioner "ailed to prove losses to support retrenchment. At the outset, it should be stated that the respondents cannot be accommodated in other departments o" the 8otel. #he duties and "unctions they per"orm are peculiar to the positions they hold in the 4lub. It is li!ewise undisputed that the 4lub remained closed and there is no other department in the 8otel similar to the 4lub and which catered to "oreign high

sta!es gamblers. Verily, reinstatement cannot be and could not have been an option "or petitioner 8otel. >or the purpose o" proving "inancial losses, petitioner presented the "inancial statements o" 5ater"ront Promotion, ,td. which petitioner describes as the company which promotes, mar!ets and "inances the 4lub. A review o" the corporate structure o" the 4lub as contained in the "inancial statements submitted by petitioner reveals that it is actually a wholly owned subsidiary o" 5ater"ront Promotion, ,td. #heir corporate relationship is described as "ollowsC 5ater"ront Promotion ,td @=5P,=A and its wholly owned subsidiary, 4lub 5ater"ront International ,imited @=45I,=A, were incorporated in the 4ayman Islands on &arch E, ?IIF and June ??, ?IIE, respectively. 5P, is a wholly owned subsidiary o" 5ater"ront Philippines, Incorporated @=5PI=A, a company registered with the Philippine +ecurities and E(change 4ommission @=+E4=A. 5P, and 45I, invite and organi<e groups o" "oreign casino players to play in Philippine casinos pursuant to certain agreements entered into with the Philippine Amusement and Gaming 4orporation @=PAG463=A under the latter$s >oreign 8ighroller &ar!eting Program @=the Program=A. #o support the Program, 5P, and 45I, entered into several agreements with certain parties also !nown as )un!et operators to mar!et and promote the Philippine casinos to "oreign casino players. In consideration "or mar!eting and promoting the Philippine casinos, these operators receive certain incentives such as "ree hotel accommodations, "ree air"ares, and rolling commissions "rom 5P, and 45I,. #he "inancial statements have been prepared on a going concern basis, which assumes that 5P, and 45I, will continue in e(istence. #he validity o" this assumption is dependent upon 5P, and 45I, to meet their "inancing re1uirements on a continuing basis and the success o" their "uture operations. &anagement continues to loo! "or other business opportunities and intends to run 5P, and 45I, as going concerns. At present, both 5P, and 45I, have temporarily stopped their operations. #he &anagement decided to temporarily cease the operations o" 5P, and 45I, on June .00/ and 2ovember .00? respectively, due to un"avorable economic conditions. 8owever, the &anagement o" 5ater"ront Philippines, Incorporated @5PIA, the *ltimate Parent 4ompany, has given an underta!ing to provide necessary support in order "or the 4ompany to continue as a going concern. 5P,$s principal o""ice is located in George #own, Grand 4ayman, 4ayman Islands, British 5est Indies. In turn, 5ater"ront Promotion, ,td. is a wholly owned subsidiary o" 5ater"ront Philippines. Petitioner 8otel, as shown in the o""icial records, is also another subsidiary o" 5ater"ront Philippines. +trictly spea!ing, the 4lub is not related to petitioner e(cept to say that they are two di""erent subsidiaries o" one parent corporation, i.e., 5ater"ront Philippines. Petitioner, then, could have right at the beginning avoided the con"lict with respondents by setting itsel" apart "rom them. Petitioner could have invo!ed the separateness "rom the 8otel o" the 4lub which employed respondents. Petitioner did not do so. Instead, and at the outset, it "ormally presented itsel" as the respondents$ employer when, through its Director o" 8uman 3esources, it in"ormed respondents about the temporary suspension o" the business o" the 4lub and "orthwith served the notices o" suspension o" business on D6,E. A review o" the consolidated "inancial statement shows that "or the "iscal years .00. and .00/, the parent company and the consolidated companies re"lect the same amounts o" lossesC *nited +tates @*.+.A K.,-I?,?0G.00 "or .00. and *.+. K-EF,....00 "or .00/. #his proves petitioner$s assertion that the losses there re"lected re"er to the losses o" the 4lub. #he consolidated "inancial statement and the corporate relationships it indicates, cannot, however, be relied upon by

petitioner to avoid this particular labor dispute because, as already stated, petitioner itsel" has been claiming "rom the very beginning that the 4lub is only a division:department o" the hotel. Verily, retrenchment and not closure was e""ected to warrant the valid dismissal o" respondents. Petitioner has not totally ceased its operations. It merely closed down a department. 3etrenchment is the termination o" employment initiated by the employer through no "ault o" and without pre)udice to the employees. It is resorted to during periods o" business recession, industrial depression, or seasonal "luctuations or during lulls occasioned by lac! o" orders, shortage o" materials, conversion o" the plant "or a new production program or the introduction o" new methods or more e""icient machinery or o" automation.?E It is an act o" the employer o" dismissing employees because o" losses in the operation o" a business, lac! o" wor!, and considerable reduction on the volume o" his business.?In case o" retrenchment, proo" o" "inancial losses becomes the determining "actor in proving its legitimacy. In establishing a unilateral claim o" actual or potential losses, "inancial statements audited by independent e(ternal auditors constitute the normal method o" proo" o" pro"it and loss per"ormance o" a company. #he condition o" business losses )usti"ying retrenchment is normally shown by audited "inancial documents li!e yearly balance sheets and pro"it and loss statements as well as annual income ta( returns.?D 3etrenchment is sub)ect to "aith"ul compliance with the substantative and procedural re1uirements laid down by law and )urisprudence.?I >or a valid retrenchment, the "ollowing elements must be presentC @?A #hat retrenchment is reasonably necessary and li!ely to prevent business losses which, i" already incurred, are not merely de minimis, but substantial, serious, actual and real, or i" only e(pected, are reasonably imminent as perceived ob)ectively and in good "aith by the employer; @.A #hat the employer served written notice both to the employees and to the Department o" ,abor and Employment at least one month prior to the intended date o" retrenchment; @/A #hat the employer pays the retrenched employees separation pay e1uivalent to one @?A month pay or at least Y month pay "or every year o" service, whichever is higher; @GA #hat the employer e(ercises its prerogative to retrench employees in good "aith "or the advancement o" its interest and not to de"eat or circumvent the employees$ right to security o" tenure; and @FA #hat the employer used "air and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, e""iciency, seniority, physical "itness, age, and "inancial hardship "or certain wor!ers..0 All these elements were success"ully proven by petitioner. >irst, the huge losses su""ered by the 4lub "or the past two years had "orced petitioner to close it down to avert "urther losses which would eventually a""ect the operations o" petitioner. +econd, all GF employees wor!ing under the 4lub were served with notice o" termination. #he corresponding notice was li!ewise served to the D6,E one month prior to retrenchment. #hird, the employees were o""ered separation pay, most o" whom have accepted and opted not to )oin in this complaint. >ourth, cessation o" or withdrawal "rom business operations was bona "ide in character and not impelled by a motive to de"eat or circumvent the tenurial rights o" employees. As a matter o" "act, as o" this writing, the 4lub has not resumed operations. 2either is there a showing that petitioner carried out the closure o" the business in bad "aith. 4rd ALERT SECURITY .!. NAVIA FACTS: #his case started "rom an illegal dismissal complaint "iled by 3omualdo 2avia against /rd Alert.

6n 2ovember /0, .00F, the labor arbiter issued a decision that 2avia$s dismissal was illegal. /rd Alert appealed to the 2ational ,abor 3elations 4ommission @2,34A which a""irmed the ruling o" the labor arbiter. /rd Alert$s motion "or reconsideration o" the 2,34 decision was denied in a resolution dated 6ctober ?I, .00D. >rom this ruling, /rd Alert "iled an appeal with the @doc!eted as 4A G.3. +P 2o. ?0EIE/A with a prayer "or issuance o" a temporary restraining order. #he 4A denied appeal; /rd Alert moved "or a motion "or reconsideration the motion was also denied. 4A the the but

reemployed on ?E April ?II. as a member o" a tas! "orce assigned to collect its delin1uent accounts. A"ter this 4ourt ad)udged that the ban!$s closure was illegal, Banco >ilipino eventually reopened in June ?II.. ,a<aro continued to wor! "or the ban! until he retired "rom his last post as assistant vice president on ? December ?IIF. #herea"ter, he was paid retirement bene"its "or .0 years and months o" service pegged at his latest gross salary rate o" P /D,000 per month. ,a<aro, however, demanded a higher amount. +peci"ically, he asserted that since his employment lasted "rom ? >ebruary ?IED until ? December ?IIF, he should be credited with .years and ?0 months o" service. Additionally, he claimed that the base amount o" his retirement pay should be increased "rom P /D,000 to P F0,000 to re"lect the salary increase given by the ban! to its senior o""icers in December ?IIF. Aside "rom demanding his retirement pay di""erential, ,a<aro also re1uired Banco >ilipino to pay the ?0L attorney$s "ees it received while "oreclosing delin1uent accounts. >urthermore, he sought the payment o" his ?0L pro"it share "rom ?IDG to ?IIF. Banco >ilipino re"used the additional demands o" ,a<aro. As a result, he "iled a 4omplaint "or underpayment o" retirement bene"its, as well as nonpayment o" attorney$s "ees and pro"it shares be"ore the ,abor Arbiter @,AA. ISSUE: Employee suit, damages

In the meantime, on January .I, .00I, the 2,34 issued an Entry o" Judgment certi"ying that the 2,34 resolution dated 6ctober ?I, .00D has become "inal and e(ecutory. #hus, 2avia "iled with the labor arbiter an e( parte motion "or recomputation o" bac! wages and an e( parte motion "or e(ecution based on the recomputed bac! wages. 6n 2ovember ?0, .00I, the labor arbiter issued a writ o" e(ecution to en"orce the recomputed monetary awards. /rd Alert appealed the recomputed amount stated in the writ o" e(ecution to the 2,34. /rd Alert also alleged that the writ was issued with grave abuse o" discretion since there was already a notice o" reinstatement sent to 2avia. ISSUE: Dismissal RULING: Article ../ o" the ,abor 4ode provides that in case there is an order o" reinstatement, the employer must admit the dismissed employee under the same terms and conditions, or merely reinstate the employee in the payroll. #he order shall be immediately e(ecutory. #hus, /rd Alert cannot escape liability by simply invo!ing that 2avia did not report "or wor!. #he law states that the employer must still reinstate the employee in the payroll. 5here reinstatement is no longer viable as an option, separation pay e1uivalent to one @?A month salary "or every year o" service could be awarded as an alternative. +ince the proceedings below indicate that /rd Alert "ailed to adduce additional evidence to show that it tried to reinstate 2avia, either physically or in the payroll, we adopt as correct the "inding that there was no earnest e""ort to reinstate 2avia. #he 4A was correct in a""irming the )udgment o" the 2,34 in this regard. 5e also ta!e note that /rd Alert resorted to legal tactics to "rustrate the e(ecution o" the labor arbiter$s order; "or about "our @GA years, it evaded the obligation to reinstate 2avia. By so doing, /rd Alert has made a moc!ery o" )ustice. 5e thus "ind it proper, under the circumstances, to impose treble costs against /rd Alert "or its utter disregard to comply with the writ o" e(ecution. #o reiterate, no indication e(ists showing that /rd Alert e(erted any e""orts to reinstate 2avia; worse, /rd Alert$s lame e(cuse o" having sent a notice o" reinstatement to a certain =Bi<nar= only compounded the intent to mislead the courts. Also, the main issue o" this case, "inding 2avia to have been illegally dismissed, has already attained "inality. ,itigation must end and terminate sometime and somewhere, and it is essential "or an e""ective and e""icient administration o" )ustice that, once a )udgment has become "inal, the winning party be not deprived o" the "ruits o" the verdict.E #he order is to reinstate 2avia; sadly, the mere e(ecution o" this )udgment has to even reach the highest court o" the land, thereby "rustrating the entire )udicial process.

RULING: ,a<aro must establish a legal basis J either by law, contract or other sources o" obligations J to merit the receipt o" the additional ?0L attorney$s "ees collected in the various "oreclosure procedures he settled as the ban!$s legal o""icer. A"ter a perusal o" the instant Petition, we note that ,a<aro has not produced any contract or provision o" law that would warrant the payment o" the additional attorney$s "ees. 5ithout any basis, there"ore, this 4ourt sustains the rulings o" the courts below that he is only entitled to his salaries as the ban!$s legal o""icer, because the services he rendered in the "oreclosure proceedings was part o" his o""icial tas!s. Anent the claim "or pro"it shares, the 4A has already made a "inding that ,a<aro received "ull payment thereo" based on the chec!, voucher, 5ithholding #a( 4erti"icate and Wuitclaim attached by Banco >ilipino. 8owever, he points out that the payment covered only his pro"it shares in ?IDG, ?IIG and ?IIF; and, hence, the ban! reneged on it duty to give his shares "rom ?IDF to ?II/. 6n this point, this 4ourt cannot try the case anew to determine "ully whether the 4A seriously erred in ma!ing a "actual conclusion that ,a<aro received "ull payment o" his pro"it shares. #his 4ourt is not a trier o" "acts, and this doctrine applies with greater "orce to labor cases. 5e generally do not weigh anew the evidence already passed upon by the 4A. In any event, ,a<aro has not demonstrated that Banco >ilipino earned pro"its "rom ?IDF to ?II/, the very period during which the ban! was closed. #he records show that Banco >ilipino$s allegation pertaining to its pro"it shares "or ?IDF to ?II/ remains unre"uted. 4onsidering that ,a<aro does not dispute its submission, we rule that he has "ailed to substantiate the a""irmative relie" prayed "or. 6ne day salary di""erential and ,a<aro$s claims "or moral and e(emplary damages, attorney$s "ees and e(penses o" suit. Pre"atorily, ,a<aro$s claims "or one day salary di""erential, which was raised only be"ore the 4A, merits instant dismissal.?avvphi? #his ruling is supported by basic considerations o" due process, which prohibits the raising o" issues "or the "irst time on appeal. Points o" law, theories, issues, and arguments not brought to the attention o" the lower court will not be considered by the reviewing court. #o consider them would be un"air to the adverse party, who would have no opportunity to present contrary evidence as it

BANCO FILIPINO .!. LAZARO FACTS: 6n ? >ebruary ?IED, ,a<aro started wor!ing "or Banco >ilipino as a probationary employee. 3ising "rom the ran!s, he was promoted to the position o" assistant manager, which he held until the ban! was closed by the 4entral Ban! o" the Philippines on .F January ?IDF. 2otwithstanding the cessation o" the regular operations o" the ban!, ,a<aro was

could have done had it been aware o" the new theory at the time o" the hearing be"ore the trial court. As "or damages, attorney$s "ees and e(penses o" the suit, the courts a 1uo consistently did not grant, or even address, the claims o" ,a<aro. But to "inally write "inis to this case, we hold that he is not entitled to those relie"s. #o obtain moral damages, the claimant must prove the e(istence o" bad "aith by clear and convincing evidence, "or the law always presumes good "aith. It is not even enough that one merely su""ered sleepless nights, mental anguish and serious an(iety as the result o" the actuations o" the other party. In this case, ,a<aro did not state any moral anguish that he su""ered. 2either did he substantiate his imputations o" malice to Banco >ilipino. 8e only made a sweeping declaration, without concrete proo", that the ban! in re"using his claim maliciously damaged his property rights and interest. Accordingly, neither moral damages nor e(emplary damagesGD can be awarded to him. 5ith respect to attorney$s "ees, an award is proper only i" the one was "orced to litigate and incur e(penses to protect one$s rights and interest by reason o" an un)usti"ied act or omission o" the party "or whom it is sought. #he award o" attorney$s "ees is more o" an e(ception than the general rule, since it is not sound policy to place a penalty on the right to litigate. 8ere, Banco >ilipino had a prima "acie legitimate de"ense that, because it underwent li1uidation proceedings, it cannot be compelled to credit that period to the retirement pay and pro"it shares o" its employees. It also rationali<ed that ,a<aro cannot be additionally paid attorney$s "ees without showing any basis "or the compensation. 4onsidering that Banco >ilipino$s re"usal cannot be accurately characteri<ed as un)usti"ied, ,a<aro cannot claim an award o" attorney$s "ees.