1. BROWN MADONNA PRESS INC., THADDEUS ANTHONY A.

CABANGON, FORTUNE LIFE

INSURANCE COMPANY (now Fortune General Insurance Corporation) and/or ANTONIO
CABANGON CHUA,
vs.
MARIA ROSARIO M. CASAS,

FACTS:

In 1984, Casas was hired as an accounting clerk at Fortune General Insurance. She eventually rose from
the ranks; she was transferred to BMPI, another ALC member company, as its Vice President for Finance
and Administration.

Casas met with BMPI’s company president, and the Vice President for the Central Human Resource
Department of the ALC Group of Companies. During the meeting, Casas was allegedly told not to report
to work anymore starting January 8, 2007, upon the instructions of Cabangon-Chua, ALC’s Chairman
Emeritus. Casas claims that the reason for her abrupt dismissal was not disclosed to her, but she was
promised a separation pay. She thus packed her things and left.

BMPI, on the other hand, asserts that it was Casas who requested a graceful exit from the company. The
meeting was supposedly held to confront Casas about certain complaints against her, and about the
growing rift between her and another company officer. BMPI asserts that Casas opted to leave the
company to avoid an administrative investigation against her and to give her the chance to jumpstart her
career outside the company. She succeeded in convincing Cabangon to grant her some form of financial
assistance as they were friends.4

Casas no longer reported for work and BMPI, for its part, started the processing of her clearance. Casas
sent Cabangon-Chua a letter asking for the reconsideration of his decision to terminate her employment.
Cabangon-Chua did not act on this letter.

Casas filed a complaint for illegal dismissal and for payment of separation pay, backwages, retirement
benefits and attorney’s fees.

ISSUE: WON Casas had been illegally dismissed.

(Did she voluntarily resign from, or abandon her work at, BMPI, or was she summarily dismissed by
Cabangon?)

HELD: YES, Casas had been illegally dismissed.

The CA did not err in affirming the

NLRC’s factual finding that Casas
had been dismissed from work

In illegal dismissal cases, the employer has the burden of proving that the employee’s dismissal was
legal.1âwphi1However, to discharge this burden, the employee must first prove, by substantial evidence,
that he had been dismissed from employment.

The CA, in affirming the NLRC’s conclusion that Casas had been dismissed, gave emphasis to the
existence of two documents on record: first, the unsigned clearance and quitclaim document unilaterally
prepared by BMPI, and second, the letter Casas sent to Cabangon-Chua, asking the latter to reconsider
her termination.
These pieces of evidence sufficiently establish Casas’ dismissal from the company.

The Clearance and Quitclaim document discloses that Casas would "cease to be connected with the
company at the close of office on January 16, 2007." The document, which was even introduced as
evidence by the petitioners, was prepared unilaterally at Cabangon’s instructions. It shows the company’s
intent to sever its employment relationship with Casas. Considered together with the letter Casas sent
Cabangon-Chua asking for her reinstatement on May 17, 2007, these documents back Casas’sr assertion
that she was compelled to leave her job on January 5, 2007.

As their main defense, BMPI and Cabangon claim that they never dismissed Casas from work, and that
she instead requested a graceful exit from the company.

Jurisprudence has established that employers interposing their employee’s resignation as a defense from
illegal dismissal cases have the burden of proving that the employee indeed voluntarily
resigned.33 Resignation — the formal pronouncement or relinquishment of a position or office — is the
voluntary act of an employee compelled by personal reason(s) to disassociate himself from
employment.34 It is done with the intention of relinquishing an office, accompanied by the act manifesting
this intent.35

In the present case, the petitioners allege that Casas asked for a graceful exit from the company to avoid
an administrative investigation against her. They claim that Casas had grossly failed to manage and take
control of BMPI’s ex-deal assets, which caused the company serious losses. When Casas was
confronted about these reports of mismanagement, she voluntarily resigned from office in exchange for
separation pay.

NLRC and CA correctly disregarded these allegations in concluding that Casas had been terminated from
office.

First, the pieces of evidence that the petitioners submitted are insufficient to establish their claim. To
prove that Casas voluntarily abandoned her work, the petitioners submitted affidavits from their
employees, Domingo Almoninia, Jr. and Victoria C. Nava, who both testified to the events leading to a
private conversation between Casas and Cabangon.

Domingo Almoninia, Jr., BMPI’s former Chief Audit Executive, Testified 36 that he had informed Cabangon
of reports regarding Casas’s mismanagement of BMPI’s ex-deal assets on January 5, 2007. Casas,
together with Vice President for Human Resources Victoria Nava, were then summoned to Cabangon’s
room. According to Almoninia, he witnessed Cabangon confront Casas regarding reports about her
mismanagement and certain unauthorized transactions. In the course of the discussion, Cabangon
allegedly told Casas that the reports against her would have to be investigated, and instructed her to
settle her differences with a certain Mr. Tayag. Casas asked Cabangon if she was being dismissed, to
which the latter answered in the negative. Both Almoninia and Nava were then asked to leave the room.

Nava, on the other hand, corroborated Almoninia’s narration, and added insinuations that Casas had
been having problems in the company.37

In considering their affidavits, we emphasize that neither Almoninia nor Nava were present in the private
conversation that ensued between Cabangon and Casas, after the confrontation that they witnessed. This
leaves Cabangon’s claim that Casas asked for a graceful exit from the company uncorroborated; what
stands is Casas’ statement contradicting the claim that she had not been dismissed from her job.

Second, Cabangon failed to provide any documentary evidence supporting Casas’ voluntary resignation.
BMPI failed to show any resignation letter from Casas. The Clearance and Quitclaim document, which
shows Casas’ severance from the company, does not contain her signature. 38 Neither was Casas given
any return to work order, notice of infraction, or notice of termination, all of which could have supported
BMPI’s theory that Casas was never prevented from going back to work.

Third, Cabangon, Almoninia and Nava’s testimonies show that Casas could have entertained the motive
to resign from her work, but does not prove her intent to leave her office. Intent to relinquish one’s office is
determined from the acts of an employee before and after the alleged resignation. Casas’ acts after
allegedly resigning from work negate this intent: she wrote a letter asking Cabangon-Chua to reconsider
her termination from office; she refused to sign the Clearance and Quitclaim document; and she filed an
illegal dismissal case against her employers.

The CA did not err in affirming the

NLRC’s conclusion that Casas’
dismissal violated the procedural
requirements of the Labor Code

The sudden termination from office was without just cause and violated procedural due process.

According to the NLRC, despite the serious allegations that the BMPI lodged against Casas, it never
asked her to explain her acts, and instead opted to sever its employment relations with her. On this basis
alone, the NLRC concluded that Casas’ dismissal had been illegal and non-compliant with procedural due
process.

Casas had been dismissed prior to any probe on her reported violation of company rules and regulations.

In determining whether an employee’s dismissal had been legal, the inquiry focuses on whether the
dismissal violated his right to substantial and procedural due process. An employee’s right not to be
dismissed without just or authorized cause as provided by law, is covered by his right to substantial due
process. Compliance with procedure provided in the Labor Code, on the other hand, constitutes the
procedural due process right of an employee.

The violation of either the substantial due process right or the procedural due process right of an
employee produces different results. Termination without a just or authorized cause renders the dismissal
invalid, and entitles the employee to reinstatement without loss of seniority rights and other privileges and
full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from
the time the compensation was not paid up to the time of actual reinstatement.

An employee’s removal for just or authorized cause but without complying with the proper procedure, on
the other hand, does not invalidate the dismissal. It obligates the erring employer to pay nominal
damages to the employee, as penalty for not complying with the procedural requirements of due process.

Thus, two separate inquiries must be made in resolving illegal dismissal cases: first, whether the
dismissal had been made in accordance with the procedure set in the Labor Code; and second, whether
the dismissal had been for just or authorized cause.

There can be no doubt that the procedural requirements had not been complied with in the present case:
shortly after a private conversation between Cabangon and Casas, Casas took her belongings from the
office and left the building. As explained earlier, Casas’s acts after this private conversation reveal that
she had been summarily dismissed: Casas gave no resignation letter, refused to sign the Clearance and
Quitclaim document that the company issued, and sent a letter asking for her reinstatement.

Notably, the private conversation that led to Casas’s summary dismissal did not conform, in any way, to
the procedural due process requirements embodied in Rule XIV of the Omnibus Rules Implementing the
Labor Code, viz:
RULE XIV Termination of Employment

SECTION 1. Security of tenure and due process. — No workers shall be dismissed except for a just or
authorized cause provided by law and after due process.

SECTION 2. Notice of dismissal.— Any employer who seeks to dismiss a worker shall furnish him a
written notice stating the particular acts or omission constituting the grounds for his dismissal. In cases of
abandonment of work, the notice shall be served at the worker's last known address.

xxx

SECTION 5. Answer and hearing. — The worker may answer the allegations stated against him in the
notice of dismissal within a reasonable period from receipt of such notice. The employer shall afford the
worker ample opportunity to be heard and to defend himself with the assistance of his representative, if
he so desires.

SECTION 6. Decision to dismiss. — The employer shall immediately notify a worker in writing of a
decision to dismiss him stating clearly the reasons therefor.

Cabangon failed to show any written notice provided to Casas informing her of the charges against her,
and neither had she been informed in writing of her dismissal and the reasons behind it.

Even assuming arguendo that Casas had indeed voluntarily abandoned her work – an uncorroborated
claim by Cabangon – Cabangon had the duty to give Casas a written notice of the grounds leading to her
dismissal.

Thus, Cabangon failed to comply with the two-notice requirement under the law, resulting in a violation of
Casas’s right to procedural due process.

The CA did not err in finding no

grave abuse of discretion in the
NLRC’s decision to hold that Casas
had been dismissed without just
cause

Casas’s dismissal had not been for just cause, because at the time she was dismissed, not one of the
charges against her had been proven. Casas was, at the time of her dismissal, presumed innocent until
proven guilty; thus, there existed no just cause to terminate her employment at the time she was
summarily dismissed.

In reaching this conclusion, the CA reviewed whether the NLRC acted with grave abuse of discretion in
holding that Casas’s dismissal had no just cause. The NLRC, in its decision, held that Casas’s dismissal
had not been for just cause because she was not even allowed to explain the supposed acts that had
been inimical to BMPI’s interests.

In affirming the NLRC’s decision, the CA clarified the application of procedural and substantial due
process in the present case: Casas had not been given the two-notice requirement in the law, and hence,
her procedural due process rights had been violated. And because not one of the allegations against her
had been proven at the time she was summarily dismissed, there existed no cause to terminate her
services.

We have, in the past, affirmed the NLRC in ruling that an employee’s act not proven at the time he had
been dismissed does not constitute just cause for his dismissal. In other words, for an act to justify an
employee’s dismissal, it should have been proven, with substantial evidence, at the time he was
dismissed. Otherwise, the dismissal would not be for just cause.

This conclusion finds support in cases emphasizing that an unsubstantiated accusation will not ripen into
a holding that there is just cause for dismissal. 47 A mere accusation of wrongdoing is not sufficient cause
for a valid dismissal of an employee. The facts for which a dismissal is based should be backed by
substantial evidence at the time the employee is dismissed, and not at the time his dismissal is being
questioned before the courts.

In the present case, the petitioners allege that Casas had committed various infractions that would have
warranted disciplinary action against her. At the time that Casas was dismissed, however, these alleged
infractions were mere speculations. The present petition for review on certiorari admits this reality in two
instances: first, in the body of the petition itself stating that at the time of the January 5, 2007 meeting,
disciplinary proceedings had yet to be initiated against Casas and that the reports against her would still
have to be verified;48 and second, through its annexes, which provided that the result of the investigation
in the ex-deal assets that Casas allegedly mismanaged was produced only on February 17, 2007, or a full
month after Casas’ dismissal.

Thus, at the time Cabangon asked Casas to leave her employment, all he had as basis for Casas’s
dismissal were speculations. Worse, Cabangon’s summary dismissal of Casas left her with little
opportunity to adequately defend herself from the allegations against her.

In these lights, we support the CA in holding that Casas’ summary dismissal had not been for just cause.

Just cause must be proven with

substantial evidence at the time of
dismissal

At its core, substantive due process guarantees a right to liberty that cannot be taken away or unduly
constricted, except through valid causes provided in the law.

The concepts of procedural and substantive due process had been carried over and applied to illegal
dismissal cases, although notably, employers are not governmental bodies to which these rights usually
refer. Agabon v. NLRC51 described the due process required in dismissing employees as statutory –
requirements that the law imposes on employers to comply with, in contrast to constitutional due process
rights that guarantee against overreach from the government.

Although statutory in nature, the procedural and substantive due process requirements in illegal dismissal
cases stem from the protection that the Constitution provides labor – the Constitution has tasked the
State to promote the workers’ security of tenure, humane conditions of work, and a living wage. These
guarantees, as well as a host of other rights and responsibilities, find implementation through the Labor
Code, which fleshed out the concept of security of tenure 54 as the continuance of regular employment
until an employee's services are terminated because of just or authorized causes enumerated in the law.

Thus, despite the differences in origin and application between constitutional due process rights and the
statutory requirements in the Labor Code, we have applied concepts implementing constitutional due
process rights to the statutory due process requirements of the Labor Code. We did this in the present
case, when we emphasized the need for substantial evidence to support the just cause for the
employee's dismissal at the time her services were terminated. In the same way that the crime charged
against an accused must first be proven before his or her right to liberty is taken away, or that a
government employee's infraction must first be proven before the accused is deprived of the right to
continue !o hold office, so too, must just cause against an employee be proven before he or she may be
deprived of a means of livelihood. Otherwise, the employee's right to substantive due process would be
violated.
In these lights, and in order to give full effect to the embodiment of substantive due process in illegal
dismissal cases, it is necessary to rule, that an employee, in this present case Casas, cannot be
terminated from service without sufficient substantial evidence of the just cause that would merit her
dismissal.

2. Gregorio vs. Salon

FACTS:

The instant petition stemmed from a complaint for illegal dismissal, non-payment of 13th month pay,
damages and attorney's fees filed by Gregorio "Tongee" Balais, Jr. (Balais) against Se'lon by Aimee,
Amelita Revilla and Alma Belarmino before the NLRC. Balais narrated that he was Salon de Orient's
senior hairstylist and make-up artist from October 16, 2004 until November 26, 2007 when respondent
Amelita Revilla (Revilla) took over the business. Revilla, however, retained his services as senior
hairstylist and make-up artist.

Under the new management, Salon De Orient became Se'lon by Aimee and respondent Alma Belarmino
(Belarmino) was appointed as its salon manager, who was in-charge of paying the employees' wages,
dismissing erring employees, and exercising control over them.

Balais, on the other hand, being the senior hairstylist and make-up artist, allegedly had the discretion to
choose from among the junior hairstylist who should assist him in servicing his clients, as customarily
observed in beauty salons. He worked during the 1Oam-7pm shift or 11 am-8pm shift, six ( 6) days a
week with Sunday as his regular rest day for a monthly salary of Php 18,500.00 paid every two (2) weeks.

In June 2008, his salary was reduced to Php 15,000.00. Balais claimed that his working relationship with
respondents had been harmonious until the evening of July I, 2008 when Belarmino dismissed him
without due process, in the following manner:

Belarmino angrily shouted: "You gel out of"this Company! I do not need you here at Se 'Ion by
Aimee!"

Balais Jr., calmly replied: "lbigay ang I 3th month ko and sweldo ko, at separation pay. "

Belarmino angrily replied: "Maghahla ka !whit saan na korte at haharapin kita. "

Balais Jr. responded: "Maski ang Jollibee nagbibigay nang 13th month pay, sweldo and
separation pay pag may tinatanggal na e mp! eyado ! "

Belarmino retorted: "Eh di doon ka magtrabaho sa Jollibee kasi doon nagbibigay sila nang J 3th
month pay, sweldo al separation pay pag may tinatanggal na empleyado. "

Balais felt humiliated as he was berated in front of his co-workers. The next day, he did not report for work
anymore and instead filed the complaint before the NLRC.

Respondents alleged that it was known to all their employees that one of the salon's policies was for
junior stylists to take turns in assisting any of the senior stylists for purposes of equalizing commissions.
However, Belarmino was told that Balais failed to comply with this policy as the latter allegedly gave
preference to only two (2) junior stylists, disregarding the other two (2) junior stylists. When Belarmino
asked Balais for explanation, the latter allegedly snapped and retorted that he would do whatever he
wanted. Belarmino reminded him of the salon's policy and his duty to comply with it but petitioner
allegedly insisted he would do as he pleased and if they can no longer take it, they would have to dismiss
him. After the incident, Balais sued them and never reported back to work.

Respondents insisted that Balais was not terminated from employment but he instead abandoned his
work. Respondents explained that even assuming that he was indeed dismissed, there was a valid
ground therefor as his acts amounted to serious misconduct against a superior and willful disobedience to
reasonable policy related to his work.

ISSUE 1: Whether there was a valid dismissal.

HELD: NONE

The principle echoed and re-echoed in our jurisprudence is that the onus of proving that the employee
was dismissed for a just cause rests on the employer, and the latter's failure to discharge that burden
would result in a finding that the dismissal is unjustified.

In the instant case, a perusal of the records would show that both parties presented their own versions of
stories, not necessarily contradicting but nonetheless lacking in some material points.

Interestingly, however, both parties never denied that there was an altercation between them. Without
admitting that he violated the salon policy of rotation of the junior stylists, Balais maintained that said
policy runs counter with customary salon practice which allows senior hairstylists to choose their preferred
junior stylist to assist them. For their part, supplemental to their claim of abandonment, respondents
averred that assuming that Balais was dismissed, they insisted that there was a valid ground therefor as
he was disrespectful and insubordinate due to his failure to comply with the salon's policy.

Noteworthy is the fact that respondents never denied that the incident narrated by Balais actually
happened. In Solas v. Power & Telephone Supply Phils., Inc., 12 this silence constitutes an admission
that fortifies the truth of the employee's narration. While respondents were evasive on the complete
details of how the reported incident of termination transpired, they never categorically denied that said
incident happened or the fact that Belarmino uttered: "get out of this company! 1 do not need you here."
Belarmino attempted to sidestep the fact that she actually said it, yet, raised the defense that assuming
she had indeed verbally terminated Balais, she was justified in doing so because of the disrespect shown
to her.

Under the rules of evidence, if an allegation is not specifically denied or the denial is a negative pregnant,
the allegation is deemed admitted. In fine, the fact that respondents are even raising their own justification
for the alleged verbal dismissal means that the said verbal dismissal actually transpired. If in the first
place, said incident of verbal dismissal truly never happened, there is nothing to assume anymore or to
justify. The fact that Belarmino was offering justification for her action, it follows that indeed said incident
of verbally dismissing Salais on-the-spot actually happened.

Putting two versions of the story together, considering that none of the parties categorically deny that an
altercation erupted between them which resulted in the dismissal of Balais, and the tenor of Belarmino's
statements leaving no room for interpreting it other than a verbal dismissal, we are inclined to believe that
there was indeed a dismissal.

This being the case, having established that there was dismissal, it becomes axiomatic that respondents
prove that the dismissal was valid. Respondents averred that there was abandonment as Balais failed to
report back to work the following day after the incident.
In this regard, this Court finds that respondents failed to establish that Balais abandoned his work. To
constitute abandonment, two elements must concur: (a) the failure to report for work or absence without
valid or justifiable reason, and (b) a clear intention to sever the employer-employee relationship, with the
second element as the more determinative factor and being manifested by some overt acts. Mere
absence is not sufficient. The employer has the burden of proof to show a deliberate and unjustified
refusal of the employee to resume his employment without any intention of returning. Respondents, other
than their bare allegation of abandonment, failed to prove that these two elements were met. It cannot be
said that Balais failed to report back to work without justifiable reason as in fact he was told that he was
no longer wanted in the salon.

Moreover, we likewise note the high improbability of petitioner intentionally abandoning his work, taking
into consideration his length of service, i.e., 18 years of service with the salon. It does not make sense for
an employee who had worked for his employer for 18 years would just abandon his work and forego
whatever benefits he may be entitled, unless he was made to believe or was told that he was already
terminated.

Respondents cannot discharge the burden of proving a valid dismissal by merely alleging that they did not
dismiss Balais; neither can they escape liability by claiming that Balais abandoned his work. When there
is no showing of a clear, valid and legal cause for the termination of employment, the law considers it a
case of illegal dismissal.

Thus, respondents, presumably thinking that their claim of abandonment holds no water, it likewise
manifested that assuming Balais was indeed terminated, there was a valid ground therefor because or his
insubordination.

We disagree.

Willful disobedience of the employer's lawful orders, as a just cause for the dismissal of an employee,
envisages the concurrence of at least two requisites: (1) the employee's assailed conduct must have
been willful or intentional, the willfulness being characterized by a "wrongful and perverse attitude;" and
(2) the order violated must have been reasonable, lawful, made known to the employee and must pertain
to the duties which he had been engaged to discharge.

It must be likewise stressed anew that the burden of proving the insubordination as a just and valid cause
for dismissing an employee rests on the employer and his failure to do so shall result in a finding that the
dismissal is unjustified.

In this case, the salon policy of rotating the junior stylists who will assist the senior stylist appears to be
reasonable, lawful, made known to petitioner and pertained to his duty as senior hairstylist of respondent.

However, if we will look at Balais' explanation for his alleged disobedience thereto, it likewise appears to
be reasonable and lawful, to wit:

xx xx

The duty of the Senior Stylist has the overall function in seeing to it that the service accorded to the client
is excellent, thus, he has the right to refuse service of a junior stylist whom he thinks that such junior
stylist cannot give equal or over and above the service that he can give to the client, thus his refusal to
obey the respondent does not constitute a just cause for the treatment given by respondent to herein
respondent (sic).
xx xx

The fact alone that Balais failed to comply with the salon policy docs not establish that his conduct in
failing to comply with the salon's policy had been willful, or characterized by a wrongful and perverse
attitude. Balais' justification maybe adverse to that of the salon's policy but it was neither willful nor
characterized by a perverse attitude. We take note that the alleged non-compliance with the salon policy
was brought to the attention of Balais for the first time only during the said incident. There was no
showing of prior warnings as to his non-compliance. While respondents wield a wide latitude of discretion
in the promulgation of policies, rules and regulations on work-related activities of its employees, these
must, however, be fair and reasonable at all times, and the corresponding sanctions for violations thereof,
when prescribed, must be commensurate thereto as well as to the degree of the infraction. Given that
Balais' preference on who will assist him is based on the junior stylists' competence, the same should
have been properly taken into account in the imposition of the appropriate penalty for violation of the
rotation policy. Suspension would have sufficed to caution him and other employees who may be wont to
violate the same policy.

In adjudging that the dismissal was grounded on a just and valid cause, the totality of infractions or the
number of violations committed during the period of employment shall be considered in determining the
penalty to be imposed upon an erring employee. Let it not be forgotten that what is at stake is the means
of livelihood, the name, and the reputation of the employee. To countenance an arbitrary exercise of the
management's prerogative to terminate an employee is to negate the employee's constitutional right to
security of tenure.

ISSUE 2: Whether the dismissal was effected with due process of law.

HELD: NO

G.R. No. 196557

Under Article 277(b) of the Labor Code, the employer must send the employee who is about to be
terminated, a written notice stating the cause/s for termination and must give the employee the
opportunity to be heard and to defend himself.

Article 277 of the Labor Code provides, inter alia:

(a) xx x

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against
dismissal except for a just and authorized cause and notice under Article 283 of this Code, the employer
shall furnish tile worker whose employment is sought to be terminated a written notice containing a
statement of causes for termination and shall afford the latter ample opportunity to be heard and to
defend himself with the assistance of his representative if he so desires in accordance with company
rules and regulations promulgated pursuant to guidelines set by the Department of Labor and
Employment. x x x

In particular, Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code states:

Sec. 2. Standards of' due process: requirements <~l notice. - In all cases of termination of employment,
the following standards of due process shall be substantially observed:

1. For termination of employment based on just causes as defined in Article 282 of the Code:
(a) A written notice served on tile employee specifying the ground or grounds for termination, and giving to
said employee reasonable opportunity within which to explain his side;

(b) A hearing or conference during which tile employee concerned, with the assistance of counsel if the
employee so desires, is given opportunity to respond to the charge, present !tis evidence or rebut the
evidence presented against him; and

(c) A written notice of termination served on the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination.

Thus, to effect the dismissal of an employee, the law requires not only that there be just and valid cause
as provided under Article 282 of the Labor Code. It likewise enjoins the employer to afford the employee
the opportunity to be heard and to defend himself. On the latter aspect, the employer is mandated to
furnish the employee with two (2) written notices: (a) a written notice containing a statement of the cause
for the termination to afford the employee ample opportunity to be heard and defend himself with the
assistance of his representative, if he so desires; (b) if the employer decides to terminate the services of
the employee, the employer must notify him in writing of the decision to dismiss him, stating clearly the
reason therefor.

Here, a perusal of the records revealed that, indeed, Belarmino's manner of verbally dismissing
Balais on-the-spot fell short of the two-notice requirement. There was no showing of prior warnings
on Balais' alleged non-compliance with the salon policy. There was no written notice informing him of his
dismissal as in fact the dismissal was done verbally and on-the-spot. Respondnts failed to furnish Balais
the written notice apprising him of the charges against him, as prescribed by the Labor Code. There was
no attempt to serve a notice of dismissal on Balais. Consequently, he was denied due process of law
accorded in dismissals.

Reliefs of Illegally Dismissed Employees

Having established that Balais was illegally dismissed, the Court now determines the reliefs that he is
entitled to and their extent. Under the law and prevailing jurisprudence, "an illegally dismissed employee
is entitled to reinstatement as a matter of right." Aside from the instances provided under Articles 283 and
284 of the Labor Code, separation pay is, however, granted when reinstatement is no longer feasible
because of strained relations between the employer and the employee. In cases of illegal dismissal, the
accepted doctrine is that separation pay is available in lieu of reinstatement when the latter recourse is no
longer practical or in the best interest of the parties.

However, other than the strained relationship between the parties, it appears that respondent salon had
already ceased operation of its business, thus, reinstatement is no longer feasible. Consequently, the
Court awards separation pay to the petitioner equivalent to one ( 1) month pay for every year of service,
with a fraction of at least six (6) months considered as one ( 1) whole year, from the time of her illegal
dismissal up to the finality of this judgment, as an a ternative to reinstatement.

Also, employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and
other benefits or their monetary equivalent, computed from the time their actual compensation was
withheld from them up to the time of their actual reinstatement but if reinstatement is no longer possible,
the backwages shall be computed from the time of their illegal termination up to the finality of the
decision. Accordingly, the petitioner is entitled to an award of full backwages from the time he was illegally
dismissed up to the finality of this decision.
Balais is likewise entitled to attorney's fees in the amount of 10% of the total monetary award pursuant to
Article 111 22 of the Labor Code. It is settled that where an employee was forced to litigate and, thus,
incur expenses to protect his rights and interest, the award of attorney's fees is legally and morally
justifiable. Finally, legal interest shall be imposed on the monetary awards herein granted at the rate of six
percent ( 6%) per annum from the finality of this judgment until fully paid.

3. G.R. No. 207315

INTERADENT ZAHNTECHNIK PHILIPPINES, INC., BERNARDINO G. BANTEGUI, JR. and SONIA J.

GRANDEA, Petitioners vs. REBECCA F. SIMBILLO, Respondent

Facts

Simbillo worked at Interadent as Finance and Accounting Manager. She was also Interadent' s Treasurer
upon being elected by the Board of Directors.

Petitioners served Simbillo a Memorandum9 (Notice to Explain) requiring her to submit a written
explanation and to attend an administrative hearing regarding a message she posted on her Facebook
account "referring to company concerns with the Bureau of Internal Revenue (BIR) and insulting
statements against a co-worker”. She was preventively suspended for seven days effective July 29, 2010
to August 6, 2010.

Later on, she was given a second notice informing Simbillo of her termination from service effective
August 25, 2010 on the ground of loss of trust and confidence. Petitioners found Simbillo to have
disclosed sensitive and confidential information when she posted it on her Facebook account.

Simbillo filed with the Labor Arbiter a Complaint13 for constructive illegal dismissal, non-payment of
service incentive leave pay, 13th month pay, illegal suspension, claims for moral and exemplary damages
and attorney's fees against petitioners.

Simbillo asserted that her dismissal was without just cause or compliance with procedural due process
since the alleged loss of trust and confidence was based on self-serving allegations and mere
speculation. She averred that the Facebook entry cannot support the charge of breach of trust since it did
not mention Interadent or any of its personnel.

Petitioners, for their part, denied Simbillo's claim of constructive dismissal for absence of proof. They
asserted that the security measures were implemented company-wide without favoring or discriminating
against anyone.

Moreover, Simbillo was terminated for a valid and just cause and with compliance with procedural due
process. As a managerial and confidential employee of Interadent, the highest degree of professionalism
and confidentiality was expected of Simbillo and the presence of the basis for the loss of the trust and
confidence reposed upon her has warranted her dismissal. Petitioners maintained that they observed due
process by serving Simbillo both the Notice to Explain and the Second Notice of Termination. Simbillo
was afforded the opportunity to answer but instead waived her chance to do so by opting not to submit an
answer and attend the hearing.

The Labor Arbiter ruled that Simbillo was not constructively dismissed because she failed to prove her
claim of discrimination. The security measures were implemented as part of management prerogative to
preserve the integrity of Interadent's network system and encompassed all employees as gleaned from a
poster17 Simbillo herself submitted. The Labor Arbiter sustained Simbillo's preventive suspension since
her continued presence during investigation posed an imminent threat to the company's confidential
information and records.

The NLRC affirmed the ruling of the Labor Arbiter. Simbillo filed a Motion for Reconsideration which was
denied by the NLRC.

The CA found merit in Simbillo's Petition. It ruled that to constitute a valid cause for dismissal, the breach
of trust should be willful and intentional, which petitioners failed to prove in this case. It rejected
petitioners' allegation that Simbillo divulged confidential company information.

It noted that the Facebook entry did not contain any corporate record or confidential information but was
merely "a vague expression of feelings or opinion towards a person or entity, which was not even
identified with certainty ."24 It pointed out that the term "b_i_r_" in the entry cannot be construed as the
acronym "B.I.R." or the Bureau of Internal Revenue. Finding no willful breach of trust, the CA held that
Simbillo's dismissal was illegal and ordered the payment of her separation pay in lieu of reinstatement
due to strained relations of the parties plus backwages.

Petitioners filed a Motion for Reconsideration but was denied by the CA.

Hence, petitioners filed this Petition for Review on Certiorari27 and a Motion for Issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction 28 to restrain the implementation of the CA Decision
and Resolution.

Issue

Whether or not Simbillo was validly dismissed.

Ruling

No.

As a managerial employee, the existence of a basis for believing that Simbillo has breached the trust of
petitioners justifies her dismissal.35 However, to be a valid ground, loss of trust and confidence must be
based on willful breach of trust, that is, done intentionally, knowingly and purposely, without justifiable
excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently. 36

It bears emphasizing that the right of an employer to dismiss its employees on the ground of loss of trust
and confidence must not be exercised arbitrarily, For loss of trust and confidence to be a valid ground for
dismissal, it must be substantial and founded on clearly established facts. Loss of confidence must not be
used as a subterfuge for causes which are improper, illegal or unjustified; it must be genuine, not a mere
afterthought, to justify earlier action taken in bad faith. Because of its subjective nature, this Court has
been very scrutinizing in cases of dismissal based on loss of trust and confidence because the same can
easily be concocted by an abusive employer. x x x37

In this case, the act alleged to have caused the loss of trust and confidence of petitioners in Simbillo was
her Facebook post which supposedly suggests that Interadent was being "feasted on" by the BIR and
also contains insulting statements against a co-worker and hence has compromised the reputation of the
company. According to petitioners, there was disclosure of confidential information that gives the
impression that Interadent is under investigation by the BIR for irregular transactions. However, we agree
with the CA's observation that the Facebook entry did not contain any corporate record or any confidential
information. Otherwise stated, there was really no actual leakage of information. No company information
or corporate record was divulged by Simbillo.
All told, we find no reversible error on the CA in finding that Simbillo was illegally dismissed. The
allegation of loss of trust and confidence was not supported by substantial evidence, hence, we find
Simbillo 's dismissal unjustified. A lighter penalty would have sufficed for Simbillo's laxity and
carelessness. As this Court has held, termination of employment is a drastic measure reserved for the
most serious of offenses.

4. CENTRAL AZUCARERA DE BAIS, INC. and ANTONIO STEVEN L. CHAN, vs., JANET T. SIASON

Facts:

Siason was employed as Purchasing Officer of CABI. She received a letter from Chan informing
her that she had been committing various purchasing policy violations over the past 12 months which are
very unfavorable to CABI, and that the management could no longer turn a blind eye on such violations;
as such, she should tender her immediate resignation from CABI, "rather than [to] force [his] hand."

Siason received another letter, this time from CABI's legal officer, Atty. Ner-Tiangco, following up
the farmer's action regarding Chan's letter. Consequently, Siason wrote a resignation letter, stating that
she was tendering her resignation because Chan told her to do so. However, petitioners refused to accept
the same, thus, Siason was constrained to draft another resignation letter which was acceptable to
petitioners.

Siason filed a complaint against petitioners alleging that CABI forced her to resign as shown by
the letters.

In their defense, petitioners claimed that Siason voluntarily resigned from CABI. They explained
that CABI's accounting department discovered irregularities in the procurement of several supplies. In
view of her long tenure in CABI and close relationship with Chan, she was given the option of resigning
instead of facing an administrative investigation which would eventually result in her termination.

Issue:
WoN Siason was constructively dismissed.

Held:
No. Resignation is the formal pronouncement or relinquishment of a position or office. It is the
voluntary act of an employee who is in a situation where he believes that personal reasons cannot be
sacrificed in favor of the exigency of the service, and he has then no other choice but to disassociate
himself from employment. The intent to relinquish must concur with the overt act of relinquishment;
hence, the acts of the employee before and after the alleged resignation must be considered in
determining whether he in fact intended to terminate his employment. In illegal dismissal cases, it is a
fundamental rule that when an employer interposes the defense of resignation, on him necessarily rests
the burden to prove that the employee indeed voluntarily resigned.

In contrast, constructive dismissal exists where there is cessation of work because continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or
a diminution in pay and other benefits. Aptly called a dismissal in disguise or an act amounting to
dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act of clear
discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the
employee that it could foreclose any choice by him except to forego his continued employment.
 The circumstances show that Siason was given the option to voluntarily resign from CABI,
instead of dealing with an investigation which might result in her dismissal. Verily, Chan's decision to give
Siason a graceful exit rather than to file an action for redress is perfectly within the discretion of the
former; as it is not uncommon that an employee is permitted to resign to avoid the humiliation and
embarrassment of being terminated for just cause after the exposure of her malfeasance.