likewise directed to submit his written explanation on the charges against him.
The
SECOND DIVISION
[G.R. No. 158232. March 31, 2005]
FUJITSU COMPUTER PRODUCTS CORPORATION OF THE PHILIPPINES and ERNESTO
ESPINOSA, petitioners, vs. THE HONORABLE COURT OF APPEALS, VICTOR DE
GUZMAN and ANTHONY P. ALVAREZ, respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for review under Rule 45 of the Rules of court assailing the Decision [1] of
the Court of Appeals in CA-G.R. SP No. 71324 reversing the decision of the National Labor
Relations Commission (NLRC) in NLRC NCR CA NO. 024541-00 dismissing respondents Victor
De Guzman and Anthony P. Alvarez from employment, and the Resolution dated May 14, 2003
denying the motion for reconsideration thereof.
The Facts of the Case
Petitioner Fujitsu Computer Products Corporation of the Philippines (FCPP) is a
corporation organized and existing under Philippine laws with business address at the Special
Export Processing Zone, Carmelray, Canlubang, Calamba, Laguna. It is engaged in the
manufacture of hard disc drives, MR heads and other computer storage devices for export. [2]
Respondent Victor de Guzman began working for FCPP on September 21, 1997 as
Facilities Section Manager. As of 1999, he was also holding in a concurrent capacity the position
of Coordinator ISO 14000 Secretariat and was receiving a monthly salary of P43,100.00[3]
Respondent Allan Alvarez, on the other hand, was employed as a Senior Engineer on
April 21, 1998. He was assigned at the Facilities Department under the supervision of
respondent De Guzman, and was then earning P16,800.00.[4]
The garbage and scrap materials of FCPP were collected and bought by the Saros
Trucking Services and Enterprises (Saros). On January 15, 1999, respondent De Guzman as
Facilities Section Manager, for and in behalf of FCPP, signed a Garbage Collection
Agreement[5] with Saros, and the latters signatory therein was its owner and general manager,
Larry Manaig.
Sometime in the third week of July 1999, petitioner Ernesto Espinosa, HRD and General
Affairs Director of FCPP, received a disturbing report from Manaig. Manaig reported that
respondent De Guzman had caused the anomalous disposal of steel [purlins][6] owned by
FCPP.[7] Two of Manaigs employees, Roberto Pumarez[8] and Ma. Theresa S. Felipe,[9]executed
written statements detailing how respondent De Guzman had ordered the steel purlins to be
brought out.
Thereafter, petitioner Espinosa sent a two-page Inter-Office Memorandum dated July 24,
1999 to respondent De Guzman, effectively placing him under preventive suspension. He was
Memorandum is worded as follows:
This refers to the report we have received from Mr. Larry Manaig, owner of Saros Trucking Services,
FCPPs garbage/scrap contractor.
It was disclosed to us that sometime in the first week of July 1999, you personally approached Mr.
Roberto Pumarez, Supervisor of Saros, and intimated to him your interest in the scrap metals which were
taken from Building B which at present is undergoing renovation. You allegedly told him that since Saros
is paying FCPP P2.50 per kilo of metal, you will buy it from Saros for P3.00 per kilo. Thereafter, on July
10, 1999, Mr. Adrian Camcaman, one of your staff in the Facilities Section, ordered Mr. [Pumarez] to
send a truck to pick up the scrap metals which you had earlier pointed to Mr. [Pumarez]. These assorted
metals were covered by Scrap/Garbage Gate Pass Receipt No. 3413.
From these assorted metals, it was revealed to us that approximately 2,800 kgs. were delivered by Saros,
per your instruction, to Sta. Rosa Baptist Church. After this, on July 12, 1999, the remaining scrap metals
were again picked up by Saros. This time, the assorted metals were covered by Scrap/Garbage Pass NO.
3419. From these assorted [metals] 1,230 kgs. were purposely excluded from the gross weight to be
reported and paid to FCPP. Again, these excluded metals were delivered to the same Baptist Church, per
your instruction. According to Mr. Manaig, despite several demands from you, you have not yet remitted
to him the payment for those assorted scrap metals which you caused to be delivered to Sta. Rosa Baptist
Church.
In addition to the foregoing, it was likewise reported by Mr. Manaig that there were previous occasions in
the past where you solicited from him empty drums, pails, and corrugated cartons, which were all part of
those picked up from FCPP. Attached hereto are the statements given by the concerned employees of
Saros.
Clearly, your above actions constitute qualified theft, grave abuse of authority, and willful breach of trust
and confidence.
In view of the foregoing, you are hereby directed to submit your written explanation within forty-eight
(48) hours from your receipt hereof why no disciplinary sanction should be imposed against you,
including dismissal from the service. Should you fail to do so, as hereby directed, we shall be compelled
to assess and evaluate your case based on available records. In the meantime, you are hereby placed under
preventive suspension effective immediately, pending further investigation of your case.[10]
Thereafter, Cesar Picardal, the Security Manager of FCPP, interviewed employees of SNK
Philippines, Inc. (SNK), a building contractor then working in the premises of FCPP. Rolando P.
Astillero,[11] Maurice Victoriano[12] and Nat Balayan[13] voluntarily executed handwritten
statements on the matter.
According to their respective accounts of what transpired on July 10, 1999, a 10-wheeler
truck arrived at the company warehouse at around 1:00 p.m. Assorted scrap materials were then
hauled into the truck, including steel purlins. Knowing that they could still be used as braces for
hepa-filter box hangers, SNK Mechanical Supervisor Balayan asked his superior, Nobuaki
Machidori, if the hauling could be stopped, to which the latter consented. Balayan approached
the driver of the truck and told him not to include the steel purlins; the warehouse helpers then
began separating the steel purlins from the other scrap materials to be hauled.
Astillero had also requested the men to stop the hauling. SNK Engineer Victoriano had
apparently told him that the steel purlins would still be used for construction. At around 2:00
p.m., respondent De Guzman called Victoriano and asked whether the scrap materials at the
Fuji Electric Warehouse could already be collected by the scrap dealer. Victoriano assented, but
requested that the existing c-purlins be dismantled and that 20 lengths would be used as
additional bracket support for heap box/FCU installation.[14]
Adrian Camcaman, an employee of the Facilities Department under respondent De
Guzman, then arrived and informed Astillero that Victoriano had already given permission for the
hauling to commence.[15] Camcaman also executed a written statement[16] regarding the matter.
In his Explanation[17] dated July 26, 1999, respondent De Guzman alleged the following in
his defense:
Sometime in the first week of July 1999, I came to know from Rev. Mario de Torres, Pastor of St. Rosa
Bible Baptist Church that they are in need of some steel [purlins] to be used by the church for its roof deck
construction. I told him that I know a scrap dealer where he could possibly buy the said materials. I told
him that Saros Trucking Services is the regular buyer of FCPPs scrap materials and they can buy from
them. I referred the matter therefore to Mr. Roberto [Pumarez], Supervisor of Saros and told him of the
intension of the Sta. Rosa Bible Baptist Church (SRBBC) to buy scrap metal. I further told him that since
Saros is paying FCPP P2.60 of scrap metal, Sta. Rosa Bible Baptist Church can buy it from Saros at P3.00
per kilo a price higher than FCPP. The statement of Mr. [Pumarez] which says that I will buy it from Saros
was not correct which I strongly object. Acknowledging that Mr. [Pumarez] is amenable to sell the scrap
to Sta. Rosa Bible Baptist Church after consultation from his boss I advised the Pastor of Sta. Rosa Bible
Baptist Church that Saros agreed. My part of the transaction ended there. Thereafter, as reported by my
staff the scrap metals were delivered to the church by the Saros Trucking Services on July 10, 1999
covering the net weight of 2,860 kilos based on the submitted weighing scale ticket numbers 37830 and
37844 from ANGLO-WATSONS PHILS., INC., the weighing bridge company. These were covered by
gate pass number 3413. On July 12, 1999, it was reported that the remaining scrap metals were again
delivered to the Sta. Rosa Bible Baptist Church covered by gate pass number 3419 but the exact weight
could not be determined yet pending the scale ticket submission. As of July 24, 1999 the weight scale
ticket of the last delivery was not yet confirmed [or] submitted to FCPP.
It is not true that Mr. Larry Manaig demanded to me several times the payment of the scrap because his
secretary followed up to me only once and I told her that the church is still awaiting for the actual quantity
and value of the metal scrap. When my staff Mr. Camcaman returned from his two weeks nightshift duty
and reported for dayshift duty he submitted to me the scale ticket of the first delivery (see Exhibit I).
Please note that the scale ticket of the second delivery was not yet submitted by Saros and only verbally
communicated that the weight delivered to the Sta. Rosa Bible Baptist Church is approximately 1,230
kgs.[18]
Respondent De Guzman also pointed out that he could not be charged for qualified theft
since he merely issued gate passes to Saros after the scrap metals were declared ready for
disposal by SNK, the company in charge thereof. The scrap metals in question were all
accounted fro and collected by Saros, and upon collection would be considered sold to the latter.
Respondent De Guzman theorized that the latter initiated the complaint against him since he
was now in charge and had recently implemented measures to monitor and confirm the actual
weighing of all the scrap materials which had not been done before. Saros had apparently been
previously free to haul all the scrap materials without field supervision from petitioner FCPP.
On July 28, 1999, respondent Alvarez sent an e-mail message to his co-employees,
expressing sympathy for the plight of respondent De Guzman. Respondent Alvarez used a
different computer, but the event viewer system installed in the premises of petitioner FCPP was
able to trace the e-mail message to him. Thus, on even date, petitioner Espinosa issued an
Inter-Office Memorandum addressed to respondent Alvarez, worded as follows:
TO : MR. ALLAN ALVAREZ
FROM : HRD and General Affairs Department
SUBJECT : SENDING OF E-MAIL MESSAGE SYMPATHETIC
TO MR. DE GUZMAN
DATE : July 28, 1999
___________________________________________________________
This is in reference to the July 28, 1999 E-mail message sent to all E-mail users from R. Sato
this morning.
Upon investigation, records reveal that you used the computer assigned to Shirley Bagnes and
sent a message hi to yourself. Moreover, the event viewer-system showed that you logged at
7:19:58 (also using the computer of Shirley Bagnes).
Please explain in writing within 48 hours why no disciplinary action should be filed against
you, including dismissal, for grossly presenting information which [is] highly confidential
while an investigation on Mr. De Guzman is going on. Moreover, your action of obtaining the
sympathy of employees through the use of the E-mail goes against your role as a key person
holding a highly responsible position in the Facilities Section.
(Sgd.)
ERNESTO G. ESPINOSA
HRD and General Affairs Director[19]
Respondent Alvarez submitted a written Explanation dated September 29, 1999 where he
apologized, readily admitted that he was the sender of the e-mail message in question, and
claimed that he acted alone with his own conviction. He alleged, however, that he was only
expressing his sentiments, and that he was led by his desire to help a friend in distress. He
further explained:
Im not [meddling] with the case of our boss but as Facilities member, we are sympathetic to the case
against him. If the hearsay (sic) is true, that he is [charged] on the ground of manipulating the scrap
management, then we totally disagree. It was said that he was charged with qualified theft due to pull-out
of metal scrap for his church.
Our basis is pure hearsay but in all indication, we feel that the case is going against our boss. It was
frustrating for us to be kept on dark side, helplessly waiting to defend him. We are afraid that one day, the
case is already closed and we even have not said what we have to say. Sorry to have [caused] the e-mail
just to be heard (I regret but the damage has been done and could not do anything about it).
We [believe] that the action of the hauler is premeditated and hastily done to pin down our boss. The
transaction between the Hauler and the Church has been transparent to us. Though the action has been
immediate due to request of hauler to get the metal scrap, verbal agreement has been made. We had
arranged hastily the hauling with the consent of Construction Contractor and know about the request of the
Church. As agreed by the Church and [Hauler], the payment will be P3.00/kg plus hauling fee. Hence, the
Hauler will profit P0.40/kg (already deducted their normal payment to our company of P2.60/kg).
However, for an obvious reason, the hauler had not accepted the payment to make it look that he asked for
the favor. And as hearsay, the case filed against him is very strong with [pre-arranged] evidence. We
believe that the evidence has no merit at all. In fact, the Hauler had to pay the company on its entirety as
we had recorded the full scale of scrap. It is the business and full responsibility of Hauler to sell its
[goods] or donate [them] for free. The church has no liability to our company but only the Hauler who
have to settle all its account. The timing of these charges as we believe could be attributed to the improved
waste management of our company. Beginning June, the hauler had to pay a bigger amount for scrap
(P0.25 million/month) against its previous billing of P15,000/month. As ISO 14001 Promotion Secretariat,
we are mandated [to continuously improve] our Environmental Management System. Aside from the
direction of our President to cut cost, it is our small way of helping on this objective. [20]
 Respondent Alvarez was informed that his services were terminated on the ground of
serious misconduct effective August 13, 1999 through a Memorandum of even date, worded as
follows:
After a careful evaluation of your case, it is our well discerned view, as supported by competent and
strong evidences, that you are guilty of serious misconduct.
Ordinarily, while an innocent and responsible expression of concern or opinion over the probable
innocence or guilt of a co-employee, who is under administrative investigation, may not be considered as
an infraction of company rules and regulations, the same consideration does not obtain in your case.
The following environmental circumstances which surrounded your E-mail message of concern over the
preventive suspension upon Mr. Victor de Guzman, your superior, and whose case is still undergoing
further impartial investigation, do not speak well of your true motive behind the action you have taken.
Firstly, to hide your identity as the source of the E-mail message, you intentionally used the computer of
another employee, Shirley Bagnes. But before you actually sent the E-mail message, you tried to test the
communication line between Shirley Bagnes computer and your assigned computer by using Ms. Bagnes
computer in sending your computer the message hi. Fortunately, however, our viewer-system was able to
record you as the author of the E-mail message.
To further compound the situation, you timed-in at 7:46 a.m. (which you would later admit), in
anticipation of a possible inquiry from the management as to the source of the message, to show that it
was not possible for you to have sent the message just about the same time because you just arrived. It was
later confirmed, however, that you were already using your computer as early as 7:21 a.m.
Moreover, we do not share your justification as contained in your July 29, 1999 written explanation,
where you also readily admitted your culpability, that the reason why you were compelled to send an E-
mail message was simply to show your support to Mr. De Guzman, who according to your premature and
unsupported conclusion is innocent of the charges lodged against him. Nobody can say so at this point
because the matter is still under investigation. Your explanation is contrary to the fact that, with malice
and afterthought, you deliberately sent the E-mail message to almost 150 Filipino and Japanese officers
and employees, who are almost entirely and officially not privy to the ongoing investigation.
Obviously, your foregoing actions at that time, as well as the tenor of your E-mail message, were
evidently and maliciously premeditated to undermine the result of the ongoing administrative investigation
involving Mr. De Guzman, and therefore, constitute serious misconduct. Moreover, your actions do not
speak well of a ranking Senior Engineer in the Facilities Section especially in consideration of the fact that
you have several employees reporting to you and should in fact, serve as their role model.
In view of the foregoing ineluctable facts, you are hereby terminated from the service, effective
immediately. Please proceed to the Finance and Accounting Department to clear yourself from any
accountability and to claim whatever unpaid salaries and benefits which are still due you as of this date.
For your information and guidance.[21]
Respondent De Guzmans employment was thereafter terminated effective August 23,
1999 through an Inter-Office Memorandum[22] of even date.
The respondents then filed a complaint for illegal dismissal against the petitioners with
prayer for reinstatement, full backwages, damages and attorneys fees before the NLRC,
Regional Arbitration Branch, Region IV. The case was docketed as NLRC Case No. RAB-IV-9-
11426-99-L. After the mandatory conciliation proceedings failed, the parties were required to
submit their respective position papers.
The Ruling of the Labor Arbiter
On April 17, 2000, Labor Arbiter Antonio R. Macam ruled in favor of FCPP, stating that it
was justified in terminating the employment of the respondents. The dispositive portion of the
decision reads:
WHEREFORE, premises considered, the instant complaint is hereby dismissed for lack of merit. Ernesto
Espinosas counterclaim is likewise dismissed under the same reason.
SO ORDERED.[23]
According to the Labor Arbiter, respondent De Guzman, a managerial employee, was
validly dismissed for loss of trust and confidence. Citing a number of cases, [24] the Labor Arbiter
stressed that where an employee holds a position of trust and confidence, the employer is given
wider latitude of discretion in terminating his services for just cause.
According to the Labor Arbiter, the systematic and calculated manner by which respondent
Alvarez sent e-mail messages to his co-employees could not be disregarded. Thus, respondent
Alvarezs reliance on his freedom to express his opinion was misplaced, and to condone such
infraction would erode the discipline which FCPP, as the employer, requires its employees to
observe for orderly conduct in the company premises.
The Labor Arbiter likewise ruled that as borne out by the records, the respondents were
not denied due process since they were sufficiently accorded an opportunity to be heard.
Unsatisfied, the respondents appealed the Labor Arbiters decision to the NLRC.
The Ruling of the NLRC
The NLRC sustained the ruling of the Labor Arbiter and dismissed the respondents appeal
for lack of merit. According to the Commission, the Labor Arbiters assessment an evaluation of
the facts of the case, as well as the evidence adduced by both parties, had been quite thorough.
Considering that the decision appealed from was supported by substantial evidence, there was
no reason to deviate from the findings of the Labor Arbiter.
The NLRC also affirmed the Labor Arbiters finding that respondent De Guzman, a
managerial employee who was routinely charged with custody and care of the petitioners
property, was validly dismissed on the ground of willful breach of trust and confidence.
Citing Caete v. NLRC,[25] the Commission pointed out that the right of the employer to dismiss an
employee on the ground of loss of confidence or breach of trust has been recognized by no less
than the Supreme Court. Moreover, respondent De Guzman abused his position as Facilities
Manager of petitioner FCPP when he prematurely declared the steel purlins as scrap materials.
The Commission also considered against respondent De Guzman his belated [and]
unsuccessful attempt to cover up his misdeeds.
In so far as the dismissal of respondent Alvarez was concerned, the Commission held that
the circumstances surrounding the sending of the clearly malicious and premeditated e-mail
message constituted no less than serious misconduct. Hence, respondent Alvarezs dismissal
was also justified under the circumstances.
The NLRC also concluded that the respondents were not denied due process, since they
were adequately informed of the charges against them and were required to explain thereon.
The respondents filed a motion for reconsideration of the said decision, which the NLRC
denied in a Resolution dated April 9, 2002. The respondents then elevated their case to the
Court of Appeals (CA).
The Ruling of the CA
The CA reversed the ruling of the NLRC and held that the respondents were illegally
dismissed. According to the appellate court, the non-payment of the scrap steel purlins by the
Sta. Rosa Bible Baptist Church (Sta. Rosa) to Saros was not a valid cause for the dismissal of
respondent De Guzman. Contrary to the findings of the Labor Arbiter, respondent De Guzman
did not betray the trust reposed on him by his employer, as the transaction involving the sale of
scrap steel purlins was between Sta. Rosa and Saros. The CA further ruled that the burden of
proving just cause for termination of employment rests on the employer, which in this case,
petitioner FCPP was unable to prove by substantial evidence. Considering that respondent De
Guzmans dismissal was not founded on clearly established facts sufficient to warrant his
separation from work, the petitioners act of dismissing him primarily for the sale of scrap metal
purlins was unjustified.
Anent the dismissal of respondent Alvarez, the CA ruled that his act of sympathizing and
believing in the innocence of respondent De Guzman and expressing his views was not of such
grave character as to be considered serious misconduct which warranted the penalty of
dismissal. The appellate court also stressed that in determining the penalty to be imposed on an
erring employee, due consideration must be given to the length of service and the number of
violations committed during employment. According to the CA, the petitioners failed to take
these factors into consideration in dismissing respondent Alvarez; hence, the latter was illegally
dismissed. Thus, they were entitled to reinstatement to their respective positions without loss of
seniority rights, full backwages, and other benefits corresponding to the period from their illegal
dismissal up to actual reinstatement. The dispositive portion reads:
WHEREFORE, the petition is given due course; the assailed decision of respondent NLRC affirming the
Labor Arbiters judgment is hereby REVERSED and SET ASIDE, and another one entered ordering the
reinstatement of petitioners to their respective positions, without loss of seniority rights, and with full
backwages.
SO ORDERED.[26]
The petitioners filed a motion for reconsideration of the said decision, which the appellate
court denied in a Resolution dated May 14, 2003.
Aggrieved, the petitioners now come to this Court, ascribing the following errors committed
by the CA:
I.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION WHEN IT TOTALLY IGNORED THE WELL
ENTRENCHED RULE BEING FOLLOWED IN THIS JURISDICTION THAT FACTUAL FINDINGS
OF THE NLRC AFFIRMING THOSE OF THE LABOR ARBITER, WHEN SUFFICIENTLY
SUPPORTED BY EVIDENCE ON RECORD, ARE ACCORDED RESPECT AND FINALITY BY THE
APPELLATE COURT.
II.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE WHEN IT RULED
THAT THE DISMISSAL OF PRIVATE RESPONDENTS VICTOR DE GUZMAN AND ALLAN
ANTHONY ALVAREZ WERE ILLEGAL, CONTRARY TO THE FINDINGS OF BOTH THE LABOR
ARBITER AND NATIONAL LABOR RELATIONS COMMISSION.
III.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE WHEN IT
COMPLETELY DISREGARDED THE FINDINGS OF BOTH THE LABOR ARBITER AND THE
NATIONAL LABOR RELATIONS COMMISSION THAT PRIVATE RESPONDENT VICTOR DE
GUZMAN HAD WILLFULLY BREACHED THE TRUST AND CONFIDENCE REPOSED ON HIM
BY PETITIONERS WHEN HE PREMATURELY DECLARED THE METAL [PURLINS] AS SCRAP
MATERIALS.
IV.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE WHEN IT
ACCEPTED HOOK [LINE] AND SINKER THE CONTENTION OF RESPONDENT VICTOR DE
GUZMAN THAT THE TRANSACTION TO BUY THE STEEL [PURLINS] WAS BETWEEN STA.
ROSA BIBLE BAPTIST CHURCH AND SAROS TRUCKING SERVICES.
V.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE WHEN IT DID
NOT GIVE PROBATIVE VALUE TO THE UNCONTROVERTED TESTIMONIES OF THE
WITNESSES FOR THE PETITIONERS WHO ALL GAVE THE DETAILS AND CIRCUMSTANCES
ON HOW PRIVATE RESPONDENT VICTOR DE GUZMAN ABUSED HIS POSITION AS
FACILITIES MANAGER AND ISO COORDINATOR.
VI.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT IGNORED
THE HOST OF JURISPRUDENTIAL TENETS CITED BY BOTH THE LABOR ARBITER AND THE
NATIONAL LABOR RELATIONS [COMMISSION] SUPPORTING THE TERMINATION OF
VICTOR DE GUZMAN, A MANAGERIAL EMPLOYEE, FOR WILLFULL BREACH OF TRUST
AND CONFIDENCE.
VII.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF ITS DISCRETION WHEN IT
DISREGARDED THE FINDINGS OF BOTH THE LABOR ARBITER AND THE NATIONAL LABOR
RELATIONS COMMISSION THAT PETITIONER ALLAN ANTHONY ALVAREZ COMMITTED
SERIOUS MISCONDUCT.[27]
According to the petitioners, the conclusions of the Labor Arbiter should be respected,
considering that he is in a better position to assess and evaluate the evidence presented by the
contending parties. Thus, the CA, in ruling for the respondents, ignored a basic jurisprudential
precept. The petitioners add that since the respondents themselves admitted their culpability,
such principle should all the more be applied strictly in this case.
The petitioners also point out that the appellate court ignored the positive and
incontrovertible testimonies of their witnesses, which firmly established the culpability of
respondent De Guzman in prematurely declaring the steel purlins as scrap materials.
Furthermore, the SNK employees confirmed that the steel purlins were still needed for the
construction of a building; in fact, Astillero and Balayan stated that they even prevented the
employees of Saros from loading them onto the truck. More damaging is the statement of
Victoriano, who narrated that it was only at around 2:00 p.m. of July 10, 1999 that he received a
phone call from respondent De Guzman.
Contrary to the ruling of the appellate court, the witnesses for respondent De Guzman,
specifically the representative of Sta. Rosa, failed to prove that they were the ones who
personally transacted with Saros. The petitioners stress that as the evidence would show, it was
through respondent De Guzman that the delivery of steel purlins to Sta. Rosa was made
possible. They reiterate that the respondent wanted to buy the steel purlins, since it was his
precise intention to sell them to Sta. Rosa. The petitioners point out that as shown by his
application for employment, respondent De Guzman is an active member of the said Church.
The petitioners also point out that respondent De Guzman is not an ordinary rank-and-file
employee; he was the Facilities Manager, and concurrently, the Coordinator of the ISO 14000
Secretariat. As such, respondent De Guzman had the sensitive and confidential duty of
managing the scrap disposal of petitioner FCPP, and his actuations justified his dismissal based
on willful breach of trust.
Anent the case of respondent Alvarez, the petitioners assert that when he sent the e-mail
message to more than 150 Filipino and Japanese officers and employees, there was a willful
and malicious intent on his part to undermine the on-going investigation of his superior,
respondent De Guzman.
The petitioners conclude that the penalty imposed upon the respondents is justified under
the circumstances in the instant case.
In their comment, the respondents countered that as correctly held by the appellate court,
their dismissal from employment has no valid and just cause. They stress that all the scrap
metals were placed in the premises of petitioner FCPP, and it was not respondent De Guzman
who had determined whether they could already be considered ready for disposal, but Machidori
of SNK. Moreover, it was Saros which sold the scrap materials to Sta. Rosa, and respondent De
Guzman had no participation therein. The respondents point out that the issue raised before the
Court is factual in nature, and as such, contrary to the Rules of Court.
The primary issue for resolution in the present case is whether respondents De Guzman
and Alvarez were illegally dismissed from employment.
The Courts Ruling
The rule is that factual findings of quasi-judicial agencies such as the NLRC are generally
accorded not only respect, but at times, even finality.[28] However, when it can be shown that
administrative bodies grossly misappreciated evidence of such nature as to compel a contrary
conclusion, the Court will not hesitate to reverse its factual findings. Factual findings of
administrative agencies are not infallible and will be set aside if they fail the test of
arbitrariness.[29] Thus, in this case where the findings of the CA differ from those of the Labor
Arbiter and the NLRC, the Court, in the exercise of its equity jurisdiction, may look into the
records of the case and re-examine the questioned findings. As a corollary, this Court is clothed
with ample authority to review matters, even if they are not assigned as errors in their appeal, if it
finds that their consideration is necessary to arrive at a just decision of the case.[30]
It is settled that to constitute a valid dismissal from employment, two requisites must
concur: (a) the dismissal must be for any of the causes provided for in Article 282[31] of the Labor
Code; and (b) the employee must be afforded an opportunity to be heard and defend himself.
This means that an employer can terminate the services of an employee for just and valid
causes, which must be supported by clear and convincing evidence. It also means that,
procedurally, the employee must be given notice, with adequate opportunity to be heard, before
he is notified of his actual dismissal for cause.[32]
After a careful and painstaking study of the records of the case, the Court rules that the
respondents dismissal from employment was not grounded on any of the just causes
enumerated under Article 282 of the Labor Code.
The term trust and confidence is restricted to managerial employees. [33] In this case, it is
undisputed that respondent De Guzman, as the Facilities Section Manager, occupied a position
of responsibility, a position imbued with trust and confidence. Among others, it was his
responsibility to see to it that the garbage and scrap materials of petitioner FCPP were
adequately managed and disposed of. Thus, respondent De Guzman was entrusted with the
duty of handling or taking care of the property of his employer, i.e., the steel purlins which the
petitioners allege the respondent prematurely declared as scrap materials.
However, to be valid ground for dismissal, loss of trust and confidence must be based on a
willful breach of trust and founded on clearly established facts. A breach is willful if it is done
intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act
done carelessly, thoughtlessly, heedlessly, or inadvertently. It must rest on substantial grounds
and not on the employers arbitrariness, whims, caprices or suspicion; otherwise, the employee
would eternally remain at the mercy of the employer.[34] Loss of confidence must not be
indiscriminately used as a shield by the employer against a claim that the dismissal of an
employee was arbitrary. And, in order to constitute a just cause for dismissal, the act complained
of must be work-related and shows that the employee concerned is unfit to continue working for
the employer.[35]
The Court had the occasion to reiterate in Nokom v. National Labor Relations
Commission[36] the guidelines for the application of the doctrine of loss of confidence-
a. loss of confidence should not be simulated;
b. it should not be used as a subterfuge for causes which are improper, illegal or
unjustified;
c. it may not be arbitrarily asserted in the face of overwhelming evidence to the
contrary; and
d. it must be genuine, not a mere afterthought to justify earlier action taken in bad
faith.[37]
In the case at bar, the grounds relied upon by petitioner FCPP in terminating the
employment of respondent De Guzman are contained in the Inter-Office Memorandum dated
August 23, 1999 which effectively terminated the latters employment:
We have carefully evaluated your case and we are convinced that you have committed grave abuse of
authority amounting to serious misconduct and willful breach of trust and confidence.
Based on our findings, as supported by strong and competent evidences, and contrary to your explanation
per your Letter dated July 26, 1999, the following facts were satisfactorily established:
1. That sometime in the first week of July 1999, you intimated to Mr. Roberto Pumarez, Supervisor of
Saros Trucking Services, your intention to buy from Saros the metals which were then piled up and kept
inside the Fuji Electric Philippines compound;
2. Thereafter, you ordered the metals to be sold to Saros Trucking Services so that you can buy them
(metals) later from Saros at the price of P3.00 per kg., which price you yourself imposed on them;
3. However, it turned out later some pieces of metals which you have earlier declared as scraps and
ordered to be sold to Saros were still to be used in the construction of FCPPs Building B. Thus, on July 10,
1999, while Saros employees were initially loading the metals, an Engineer of SNK Philippines, Inc.,
FCPPs building contractor, stopped them. It was only later after they were prevented from further loading
the metals that you checked with the SNK personnel if the metals can already be disposed of as scraps
which prove that you have prematurely declared the metals as scrap;
4. That through Mr. [Adrian] Camcaman, your subordinate Technician, you instructed the personnel of
Saros to deliver the metals to Sta. Rosa Baptist Church, where you are an active Church member;
5. That, as of this date, you have not yet settled/paid your obligation to Saros. That immediately after you
were placed under preventive suspension and to support your explanation that the transaction was between
Saros and Sta. Rosa Baptist Church, you caused, through some people representing to be members of the
Baptist Church and who are unknown to Saros, to issue a check in favor of Saros. When this failed,
another person, representing to be a member of the Baptist church and who appeared for the first time,
went to the office of Saros and tried to serve a letter addressed to Mr. Larry Manaig, Saros Proprietor,
allegedly inquiring about the total obligation of the Baptist Church to Saros but, which was again not
accepted as, in truth and in fact, there was really no transaction between Saros and the Sta. Rosa Baptist
Church. All along, it was you and Mr. Camcaman who dealt directly with Saros.
6. That in previous occasions, it was reported by Mr. Manaig that you solicited from him empty drums,
pails and corrugated cartons which were all part of those scraps picked up from FCPP and you never paid
any of them, a fact which you never denied in your explanation which is tantamount to admission.
Based on the foregoing, it is our well-discerned view that the transaction was exclusively limited between
you and Saros. Except for your self-serving explanation, you failed miserably to present direct evidence
that it was the Sta. Rosa Baptist church which bought the subject metals from Saros, as what you want us
to believe. At best, your explanation is a mere afterthought desperately concocted to exculpate yourself.
As Facilities Manager, a very sensitive and confidential position, the nature of your work demands of you
that your actions should not be tainted with any suspicion or impropriety. However, you failed in this
regard and abused your position to advance your self-interest.
In view of the foregoing, you are hereby terminated from the service, retroactive July 24, 1999, the date
you were placed under preventive suspension. Please proceed to the Finance and Accounting Department
to clear yourself from any accountability and to claim whatever unpaid salaries and benefits which are still
due you as of this date.
For your information and guidance.[38]
Based on the foregoing, the Court finds and so holds that indeed, the petitioners reliance
on the foregoing facts to justify the dismissal of respondent De Guzman from employment is
misplaced.
First. The scrap metals, including the steel purlins, were already classified as scrap
materials and ready for disposal. No less than the written statements of the witnesses for the
petitioners confirm this. SNK Mechanical Supervisor Nat Balayan stated that the 10-wheeler
truck was about to load scrap irons, which includes c-[purlins]. Knowing that c-[purlins] could be
used for braces of heap-filter box hangers, I immediately informed Mr. Machidori if I would stop
the hauling, to which he consented. On the other hand, SNK Engineer Maurice Victoriano stated
that when respondent De Guzman called him and inquired whether the scrap materials at the
Fuji Electric Warehouse Area could already be disposed of, he (Victoriano) replied that
everything was [okay] for disposal considering that this is [FCPPs] scope. The report of
Machidori is particularly revealing:
I went to Fuji Electric Warehouse last July 10 (rainy day) to check [out] Warehouse situation. I noticed
that scrap materials are being carried out by a truck. I met Mr. Adrian Fujitsu Facilities Staff and asked me
that they will take out those scrap materials. SNK Staff suggested using those scrap materials for BIF
Hepa Box steel supports. So I requested Mr. Adrian [Camcaman] to separate some materials that we want
to use and take out [the] others.
During our Construction meeting, Facilities explained that they controlled scrap and unpacked materials
for disposal. Earlier I thought that taking out those materials are good for maintaining Fuji Electric
Warehouse Area. So I requested them to take out those unrecycled materials. [39]
Thus, the Court agrees with the following ratiocination of the appellate court when it
denied the petitioners motion for reconsideration of its decision:
[T]his Court would like to stress, as borne out by the pleadings submitted by both parties, that the subject
scrap metal [purlins] were already in the scrap yard ready for hauling. It was the building contractor and
not petitioner Victor de Guzman who determined whether the metals are scrap metals. Hence, the
assertion of the private respondents that petitioner Victor de Guzman prematurely declared the metal
[purlins] as scrap materials is without basis.[40]
In fine then, the materials at the said warehouse were already considered scrap and ready
for disposal. The hauling was stopped by the SNK employees because their superiors felt that
pieces of steel purlins could still be used in the construction of a building in the company
premises. Thus, Victoriano and Balayan, with the conformity of their superior Machidori,
requested that some pieces be left behind for the purpose.
Second. No fraud or bad faith could be attributed to respondent De Guzman, as evinced
by his readiness to disclose his participation in the transaction between Saros and Sta. Rosa.
Third. Respondent De Guzman was never charged with qualified theft as earlier alluded to
by the petitioner FCPP in its Inter-Office Memorandum dated August 28, 1999.
Fourth. The focal point of the cause of respondent De Guzmans dismissal from
employment is his alleged involvement in the purchase of the steel purlins from petitioner FCPPs
warehouse. Whether respondent De Guzman was the buyer of the steel purlins or merely
facilitated the sale thereof to Sta. Rosa is of no moment. The fact is that as per the Garbage
Collection Agreement dated January 15, 1999, the scrap metals in the premises of petitioner
FCPP were regularly bought by Saros. Hence, after such scrap materials are weighed, loaded
onto a truck and carried out of the company premises, the petitioner FCPP can no longer be
considered the owner thereof, and ceases to exercise control over such property. [41]Loss of trust
and confidence as a just cause for termination of employment is premised on the fact that the
employee concerned is invested with delicate matters, such as the handling or care and
protection of the property and assets of the employer.[42] In this case however, Saros, as the new
owner of the scrap materials in question, including the steel purlins, was free to contract with
anyone as it wished. At most, respondent De Guzman was merely recommending a buyer for
such scrap materials, an act which could hardly be considered as deserving of such a harsh
penalty as dismissal from employment.
What strikes the Court as odd in this case is that petitioner FCPP willingly believed the
testimony of third persons, non-employees, rather than the account of its own employee. There
has been no allegation that respondent De Guzman had been previously found guilty of any
misconduct or had violated established company rules. Moreover, it is difficult to believe that
respondent De Guzman would jeopardize his job for something as measly as steel purlins. [43]
 The Court thus concludes that respondent De Guzmans actuations do not amount to willful
breach of trust and confidence. It bears stressing that in termination cases, the employer bears
the onus of proving that the dismissal was for just cause. [44] Indeed, a condemnation of
dishonesty and disloyalty cannot arise from suspicions spawned by speculative
inferences.[45] 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. Thus, when the breach of trust or loss of confidence theorized upon is not
borne by clearly established facts, as in this case, such dismissal on the ground of loss of
confidence cannot be allowed.[46] Moreover, the fact that one is a managerial employee does not
by itself exclude him from the protection of the constitutional guarantee of security of tenure.[47]
The Court likewise rules that the dismissal of respondent Alvarez from employment for
gross misconduct was illegal.
The Court has had varied rulings in cases involving gross misconduct as a ground for
dismissal, depending on the circumstances of each case. In Zenco Sales, Inc. v. National Labor
Relations Commission,[48] the Court affirmed the NLRC and the Labor Arbiter in finding the
dismissed employee guilty of misfeasance for his failure to closely monitor and control the sales
transactions of salesman Chua and malfeasance because he used the respondent corporations
properties, equipment and personnel in connection with his personal business of buy and sale of
used sacks. The Court ruled that when brought within the ambit of Article 282 of the Labor Code,
it constitutes gross neglect in the performance of duty and serious misconduct resulting to loss
of trust and confidence.[49] In Philippine National Construction Corporation v. NLRC,[50] the
dismissed employees were caught in the act of accepting a bribe in the form of cash and a dog
from a motorist who was suspected of illegally transporting dogs. The Court held that by yielding
to bribery, the said employees violated their very duty to maintain peace and order in the North
Luzon Expressway, and to ensure that all tollway rules and regulations were followed. Such act
was classified as serious misconduct which warranted the penalty of dismissal from
employment.[51] In another case,[52] the Court considered a dismissed faculty members act of
exerting influence and pressure to change a failing grade to a passing one and the
misrepresentation that a student was his nephew as serious misconduct, and a valid ground for
dismissal.
However, in the old case of Radio Communications of the Philippines, Inc. v. NLRC,[53] the
Court considered the dismissed employees act of hurling invectives at a co-employee as a minor
offense. The Court therein ruled that the termination of an employee on account of a minor
misconduct is illegal because Article 282 of the Labor Code mentions serious Misconduct as a
cause for cessation of employment.[54]
Misconduct has been defined as improper or wrong conduct. It is the transgression of
some established and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error of judgment. [55] The misconduct to be
serious must be of such grave and aggravated character and not merely trivial and unimportant.
Such misconduct, however serious, must nevertheless be in connection with the employees
work to constitute just cause for his separation[56]. Thus, for misconduct or improper behavior to
be a just cause for dismissal, (a) it must be serious; (b) must relate to the performance of the
employees duties; and (c) must show that the employee has become unfit to continue working
for the employer.[57] Indeed, an employer may not be compelled to continue to employ such
person whose continuance in the service would be patently inimical to his employers interest. [58]
In this case, the Court finds that respondent Alvarezs act of sending an e-mail message as
an expression of sympathy for the plight of a superior can hardly be characterized as serious
misconduct as to merit the penalty of dismissal. This can be gleaned from a perusal of the e-mail
message itself, to wit:
Question: Where is Mr. De Guzman, Facilities Manager?
Answer: He was framed-up by Saros Trucking (FCPP garbage hauler) and [accused] of
manipulating scrap metal which is not true since the church buyer and Saros agreed for a fee
of P3.00/kg. [where] Saro will profit P0.40/kg plus hauling fee.
Question: WHY?
Answer: Mr. De Guzman was able to improve the waste management wherein Saro have to
pay close to P0.25 million pesos for June scrap alone against Saros previous collection of
around P15,000/month only.
THE PLOT IS OBVIOUS BUT IS IT JUST TO SUSPEND A GOOD MAN LIKE MR. DE
GUZMAN THAN A GARBAGE HAULER WHO DEVILISHLY [PROFITED] FROM
FCPP WITHOUT SWEAT? PLS. HELP US[59]
There is no showing that the sending of such e-mail message had any bearing or relation
on respondent Alvarezs competence and proficiency in his job. To reiterate, in order to consider
it a serious misconduct that would justify dismissal under the law, the act must have been done
in relation to the performance of his duties as would show him to be unfit to continue working for
his employer.[60] Moreover, while allegations of a frame-up were made against Saros, the e-mail
message does not contain a single malicious imputation or charge against petitioner FCPP, or
petitioner Espinosa. Instructive on this point is the discussion of the Court in Samson v. National
Labor Relations Commission,[61] viz.:
The instant case should be distinguished from the previous cases where we held that the use of insulting
and offensive language constituted gross misconduct justifying an employees dismissal. In De la Cruz v.
NLRC (177 SCRA 626 [1989]), the dismissed employee shouted sayang and pagka-professional
mo! and putang ina mo at the company physician when the latter refused to give him a referral slip.
In Autobus Workers Union (AWU) v. NLRC (291 SCRA 219 [1998]), the dismissed employee called his
supervisor gago ka and taunted the latter by saying bakit, anong gusto mo, tang ina mo. In these cases, the
dismissed employees personally subjected their respective superiors to the foregoing verbal abuses. The
utter lack of respect for their superiors was patent. In contrast, when petitioner was heard to have uttered
the alleged offensive words against respondent companys president and general manager, the latter was
not around.
In Asian Design and Manufacturing Corporation v. Deputy Minister of Labor (142 SCRA 79 [1986]), the
dismissed employee made false and malicious statements against the foreman (his superior) by telling his
co-employees: If you dont give a goat to the foreman you will be terminated. If you want to remain in this
company, you have to give a goat. The dismissed employee therein likewise posted a notice in the comfort
room of the company premises which read: Notice to all Sander Those who want to remain in this
company, you must give anything to your foreman. Failure to do so will be terminated Alice 80.
In Reynolds Philippine Corporation v. Eslava (137 SCRA 259 [1985]), the dismissed employee circulated
several letters to the members of the companys board of directors calling the executive vice-president and
general manager a big fool, anti-Filipino and accusing him of mismanagement, inefficiency, lack of
planning and foresight, petty favoritism, dictatorial policies, one-man rule, contemptuous attitude to labor,
anti-Filipino utterances and activities. In this case, the records do not show that petitioner made any such
false and malicious statements against any of his superiors.[62]
In fine, the petitioners failed to show that the respondents acts were sufficient to warrant
their dismissal from employment, for loss of trust and confidence on one hand for respondent De
Guzman, and for gross misconduct as against respondent Alvarez on the other. To reiterate, it
has not been shown that the respondents had been previously found guilty of any infraction of
company rules and regulations during the period of their employment.
Under Article 279 of the Labor Code, and employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other privileges, and to the
payment of his full backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent, computed from the time his compensation was withheld from him (which,
as a rule, is from the time of his illegal dismissal) up to the time of his actual
reinstatement.[63] These remedies give life to the workers constitutional right to security of
tenure.[64]

The Court is wont to reiterate that while an employer has its own interest to protect, and
pursuant thereto, it may terminate a managerial employee for a just cause, such prerogative to
dismiss or lay-off an employee must be exercised without abuse of discretion. Its implementation
should be tempered with compassion and understanding. The employer should bear in mind
that, in the execution of the said prerogative, what is at stake is not only the employees position,
but his very livelihood.[65] The Constitution does not condone wrongdoing by the employee;
nevertheless, it urges a moderation of the sanction that may be applied to him. [66] Where a
penalty less punitive would suffice, whatever missteps may have been committed by the worker
ought not be visited with a consequence so severe as dismissal from employment. [67] Indeed, the
consistent rule is that if doubts exist between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter. The employer must
affirmatively show rationally adequate evidence that the dismissal was for justifiable cause. [68]

WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of
Appeals in CA-G.R. SP No. 71324 and the Resolution dated May 14, 2003 are AFFIRMED.
Costs against the petitioners.

SO ORDERED.
 Order[4] dated August 3, 2007 directing the Computation and Examination Unit (CEU) of the NLRC to
Republic of the Philippines
Supreme Court compute petitioner's monetary award, inclusive of his other accrued monetary benefits.
Manila

THIRD DIVISION
On September 3, 2007, the Executive Labor Arbiter issued a Writ of Execution commanding the sheriff of
AGRIPINO V. MOLINA, G.R. No. 165476
the NLRC-NCR to collect from respondent the amount of P5,494,358.75 representing petitioner's
Petitioner,
Present:
monetary award, consisting, among others, of backwages, separation pay and overriding commissions, as
VELASCO, JR., J., Chairperson, computed by the CEU.
PERALTA,
- versus - PEREZ,*
MENDOZA, and
SERENO,** JJ. Meanwhile, respondent filed a Partial Appeal assailing the August 3, 2007 Order of the Executive Labor
Promulgated: Arbiter.
PACIFIC PLANS, INC.,
Respondent. August 15, 2011

On February 26, 2008, the NLRC promulgated a Decision [5] granting respondent's partial appeal and

holding that the other monetary benefits granted to petitioner should not include salary increases based on

x-----------------------------------------------------------------------------------------x the Collective Bargaining Agreement (CBA) because he is not covered by it, considering that he is an

RESOLUTION Assistant Vice-President. The NLRC also directed the remand of the records of the case to the Labor

Arbiter of origin for the purpose of conducting a pre-execution conference and for the re-computation of
PERALTA, J.:
the awards due to petitioner.

For resolution is petitioner's Urgent Manifestation and Supplemental Motion to Implement the January 14,
In compliance with the Decision of the NLRC, the CEU submitted its Re-Computation indicating a total
2009 Resolution of this Court.[1]
award of P4,366,954.80 to petitioner.[6] Both parties were furnished copies of the said Re-Computation.

On March 10, 2006, this Court promulgated its Decision [2] in the instant case finding the dismissal of
Subsequently, pre-execution conferences were held. During the proceedings, petitioner manifested that he
herein petitioner to be illegal and ordering herein respondent to immediately reinstate petitioner to his
had no objection to the monetary award as re-computed. However, he claimed that he is entitled to a legal
former position as Assistant Vice-President without demotion in rank and salary, and to pay him his
interest of 12% on the amount due him reckoned from the finality of the March 5, 2007 Decision of this
backwages from August 1, 2001 up to his actual reinstatement, as well as other accrued monetary benefits.
Court until full payment thereof. Respondent, on the other hand, objected to the grant of overriding
On March 5, 2007, the abovementioned Decision became final and executory.[3]
commissions amounting to P2,259,410.40.

Thereafter, upon motion of petitioner, Executive Labor Arbiter Fatima Jambaro-Franco of the National
On November 25, 2008, the Labor Arbiter issued an Order[7] approving the re-computed sum
Labor Relations Commission (NLRC)-National Capital Region Arbitration Branch issued an
of P4,366,954.80.

On December 8, 2008, respondent filed a partial appeal reiterating its stand that petitioner is not entitled to
overriding commissions as well as 12% legal interest on the amount due him.
Meanwhile, on December 3, 2008, petitioner filed with this Court a Very Urgent Manifestation and
Motion to Order Execution of a Final and Executory Judgment. Petitioner prayed, among others, for the
issuance of a writ of execution based on the approved recomputed amount awarded to petitioner plus legal
interest of twelve (12%) per annum until full satisfaction thereof.
On January 14, 2009, this Court issued a Resolution[8] granting petitioner's Motion.
On the other hand, in its Decision dated August 28, 2009, the NLRC found merit in respondent's Partial
Appeal dated December 8, 2008. The dispositive portion of the NLRC Decision reads, thus:
WHEREFORE, premises considered, the partial appeal filed by respondents is
GRANTED IN PART. The computation of [the] Computation and Examination Unit
dated July 8, 2008 is MODIFIED, in that, the award of overriding commission is
DELETED, and respondents are additionally ordered to pay 12% interest per annum
beginning March 5, 2007 on the monetary award of P2,107,544.40 (excluding
vacation and sick leaves), which as of September 5, 2009 amounts to P632,263.32
(P2,107,544.40 x 12% x 2 years and 6 months). Thus, complainant's total monetary
award is provisionally computed in the amount of P2,739,807.72.
Let the records of this case be remanded immediately to the Regional Arbitration
Branch of origin for execution proceedings.
[9]
SO ORDERED.
Both petitioner and respondent moved for the reconsideration of the abovequoted Decision.
On June 18, 2010, the NLRC promulgated a Resolution [10] granting the motions for reconsideration of
petitioner and respondent holding that it was an error on its part to delete the overriding commissions from
petitioner's monetary award. On the other hand, the NLRC deleted the award for legal interest. The
dispositive portion of the Resolution reads as follows:
WHEREFORE, premises considered, the Motions for Reconsideration filed by both
parties are partly GRANTED. The assailed Decision of the Commission
dated August 28, 2009 is SET ASIDE.
A new one is entered REINSTATING the Computation of Monetary Awards
submitted by the Computation and Examination Unit on July 8, 2008, as approved
by Labor Arbiter Quitevis-Alconcel in her Order dated November 25, 2008.
In compliance with the resolution of the Supreme Court dated January 14, 2009, the
entire records of this case is remanded to the Labor Arbiter a quo for the immediate
issuance of a writ of execution of complainant's monetary award
totaling P4,366,954.80
SO ORDERED.[11]
On October 22, 2010, the Labor Arbiter issued an Alias Writ of Execution.
In the meantime, petitioner filed the present Motion praying that the June 18, 2010 Resolution of the
NLRC be modified to conform to the January 14, 2009 Resolution of this Court by including in the award,
aside from the principal amount of P4,366,954.80, interest at the rate of 12% per annum from March 5,
2007 until full payment of the principal amount. Petitioner further prays that, after modification, the
subject NLRC Resolution be immediately executed.
On February 4, 2011, the NLRC, through its Commissioners, filed its Comment to the present Motion.
Respondent also filed his Comment.
The issues left for resolution now are: (1) whether petitioner is entitled to a legal interest of 12% on the
principal amount due him to be computed from the finality of the March 5, 2007 Decision until full
payment thereof; and (2) whether the judgment in favor of petitioner may be executed in view of
respondent's claim that it is still undergoing corporate rehabilitation.
The Court finds the Motion partly meritorious.
With respect to the matter of legal interest, it should be noted that this Court's Resolution of January 14,
2009 granted petitioner's Very Urgent Manifestation and Motion to Order Execution of a Final and
Executory Judgment. Petitioner prayed in the said Manifestation and Motion that in addition to the amount
of P4,366,954.80 granted to him as monetary award, he should also be awarded legal interest at the rate of
12% per annum. Hence, the matter of the award of 12% legal interest is already settled.
 Hence, the payment of legal interest becomes a necessary consequence of the finality of the Court's

Nonetheless, it may not be amiss to reiterate the prevailing rule as enunciated in the landmark case Decision, because reckoned from that time the said Decision becomes a judgment for money which, under

of Eastern Shipping Lines, Inc. v. Court of Appeals[12] thus: established jurisprudence, earns interest at the rate of 12% per annum.

I. When an obligation, regardless of its source, i.e., law, contracts,

quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held With respect to the issue of execution, the Court notes respondent's contention that since it is still
liable for damages. The provisions under Title XVIII on "Damages" of the Civil
Code govern in determining the measure of recoverable damages. undergoing corporate rehabilitation the execution of the judgment in the instant case should be suspended,

especially in view of the fact that a Stay Order was issued by the RTC of Makati City and that the same
II. With regard particularly to an award of interest in the concept of
actual and compensatory damages, the rate of interest, as well as the accrual thereof, has not yet been lifted.
is imposed, as follows:

1. When the obligation is breached, and it consists

in the payment of a sum of money, i.e., a loan or forbearance Petitioner does not dispute respondent's claim of its ongoing corporate rehabilitation. Neither does he
of money, the interest due should be that which may have
been stipulated in writing. Furthermore, the interest due shall question the existence and validity of the Stay Order issued by the RTC. The only point he raises, insofar
itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of interest as this issue is concerned, is that the Interim Rules on Corporate Rehabilitation, upon which the Stay
shall be 12% per annum to be computed from default, i.e.,
from judicial or extrajudicial demand under and subject to the Order was based, applies only to claims or cases which are pending before any court tribunal or board but
provisions of Article 1169 of the Civil Code.
not to cases which have already been adjudicated, much less to those where there is already an entry of
2. When an obligation, not constituting a loan or
forbearance of money, is breached, an interest on the amount judgment, as in the present case.
of damages awarded may be imposed at the discretion of the
court at the rate of 6% per annum. No interest, however, shall
be adjudged on unliquidated claims or damages except when
Petitioner's argument is without merit.
or until the demand can be established with reasonable
certainty. Accordingly, where the demand is established with
reasonable certainty, the interest shall begin to run from the
time the claim is made judicially or extrajudicially (Article The Court finds that all pending actions in the instant case, including the execution of the judgment in
1169, Civil Code) but when such certainty cannot be so
reasonably established at the time the demand is made, the favor of petitioner, should be suspended pending termination of the rehabilitation proceedings.
interest shall begin to run only from the date the judgment of
the court is made (at which time the quantification of
damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal The Court's ruling in the more recent case of Castillo v. Uniwide Warehouse Club, Inc. [14] is instructive,
interest shall, in any case, be on the amount finally adjudged.
thus:
3. When the judgment of the court awarding a
sum of money becomes final and executory, the rate of legal
interest, whether the case falls under paragraph 1 or An essential function of corporate rehabilitation is the mechanism of suspension of
paragraph 2 above, shall be 12% per annum from such all actions and claims against the distressed corporation, which operates upon the
finality until its satisfaction, this interim period being deemed due appointment of a management committee or rehabilitation receiver. The
to be by then an equivalent to a forbearance of credit.[13] governing law concerning rehabilitation and suspension of actions for claims against
corporations is P.D. No. 902-A, as amended. Section 6(c) of the law mandates that,
upon appointment of a management committee, rehabilitation receiver, board, or
body, all actions for claims against corporations, partnerships or associations under
management or receivership pending before any court, tribunal, board, or body shall
be suspended. It materially provides:

Section 6 (c). x x x
 x x x Provided, finally, that upon appointment of a management amount of P4,366,954.80, interest at the legal rate of 12% per annum from March 5, 2007, the date the
committee, rehabilitation receiver, board or body, pursuant to
this Decree, all actions for claims against corporations, Decision in the present case became final and executory, until the principal amount is fully paid.
partnerships or associations under management or
receivership pending before any court, tribunal, board or
body, shall be suspended accordingly.
However, all proceedings in the instant case, including the execution of the June 18, 2010 Resolution of
In Finasia Investments and Finance Corporation v. Court of Appeals [G.R. No.
107002, October 7, 1994, 237 SCRA 446, 450], the term claim has been construed the NLRC, are SUSPENDED until further notice from this Court. Respondent Pacific Plans, Inc. is
to refer to debts or demands of a pecuniary nature, or the assertion to have money
paid. It was referred to, in Arranza v. B.F. Homes, Inc., [389 Phil. 318], as an action hereby DIRECTED to UPDATE the Court within five (5) days from receipt of this Resolution and,
involving monetary considerations and in Philippine Airlines v. Kurangking [438
Phil. 375], the term was identified as the right to payment, whether or not it is thereafter, on a quarterly basis, as to the status of its ongoing rehabilitation.
reduced to judgment, liquidated or unliquidated, fixed or contingent, matured or
unmatured, disputed or undisputed, legal or equitable, and secured or unsecured.
Furthermore, the actions that were suspended cover all claims against a
distressed corporation whether for damages founded on a breach of contract of SO ORDERED.
carriage, labor cases, collection suits or any other claims of a pecuniary nature.
More importantly, the new rules on corporate rehabilitation, as well as the interim
rules, provide an all-encompassing definition of the term and, thus, include all
claims or demands of whatever nature or character against a debtor or its
property, whether for money or otherwise. There is no doubt that petitioners
claim in this case, arising as it does from his alleged illegal dismissal, is a claim
covered by the suspension order issued by the SEC, as it is one for pecuniary
consideration.

Jurisprudence is settled that the suspension of proceedings referred to in the law

uniformly applies to all actions for claims filed against a corporation, partnership or
association under management or receivership, without distinction, except only
those expenses incurred in the ordinary course of business. In the oft-cited case
of Rubberworld (Phils.) Inc. v. NLRC [G.R. No. 126773, April 14, 1999, 305 SCRA
721], the Court noted that aside from the given exception, the law is clear and
makes no distinction as to the claims that are suspended once a management
committee is created or a rehabilitation receiver is appointed. Since the law makes
no distinction or exemptions, neither should this Court. Ubi lex non distinguit nec
nos distinguere debemos.Philippine Airlines, Inc. v. Zamora [G.R. No. 166996,
February 6, 2007, 514 SCRA 584, 605] declares that the automatic suspension of
an action for claims against a corporation under a rehabilitation receiver or
management committee embraces all phases of the suit, that is, the entire
proceedings of an action or suit and not just the payment of claims.

The reason behind the imperative nature of a suspension or stay order in relation to
the creditors claims cannot be downplayed, for indeed the indiscriminate suspension
of actions for claims intends to expedite the rehabilitation of the distressed
corporation by enabling the management committee or the rehabilitation receiver to
effectively exercise its/his powers free from any judicial or extrajudicial interference
that might unduly hinder or prevent the rescue of the debtor company. To allow
such other actions to continue would only add to the burden of the management
committee or rehabilitation receiver, whose time, effort and resources would be
wasted in defending claims against the corporation, instead of being directed toward
its restructuring and rehabilitation.[15]

WHEREFORE, the instant Motion is PARTLY GRANTED. The June 18, 2010 Resolution of the

National Labor Relations Commission is MODIFIED by including in the award, aside from the principal
FIRST DIVISION Petitioner Micro Sales Operation Network (company for brevity) is a domestic corporation engaged in
local transportation of goods by land. Petitioner Willy[4] Bendol was the companys operations manager at
the time of the controversy.

Private respondents Larry Hermosa, Leonardo de Castro, and Ramil Basinillo were employed by the
MICRO SALES OPERATION NETWORK and WILLY BENDOL, G.R. No. 155279
company as driver, warehouseman, and helper, respectively. Hermosa was hired on November 17, 1997,
de Castro on February 1, 1996, and Basinillo on February 4, 1998.
Petitioners,
Present:
Hermosa failed to promptly surrender the ignition key of the companys vehicle after discharging his
duties. Such failure was allegedly contrary to the companys standard operating procedure. Thus, he was
asked to explain within 24 hours why disciplinary action should not be meted on him. He explained that
he kept the ignition key because the vehicle was stalled when its battery broke down. [5] Unsatisfied with
Hermosas explanation, the company dismissed him on January 9, 1999.
Davide, Jr., C.J.,

De Castro was suspected of firing a gun during the blessing of the companys warehouse on December 10,
(Chairman), 1998. The next day, he was placed under preventive suspension and temporarily banned from entering the
companys premises. He was also asked to explain within 24 hours why he should not be terminated. He
- versus - Quisumbing, explained that he had no knowledge of the said incident.[6] As his suspension was indefinite and he
received no recall order from petitioners, he no longer reported for work.
Ynares-Santiago,
Basinillo alleged that sometime in September 1998, the companys security guard scolded him for not
wearing the employee ID. On October 17, 1998, he was dismissed.
Carpio, and

Thus, on February 10, 1999, Hermosa, de Castro, and Basinillo collectively filed a Complaint [7] for illegal
Azcuna, JJ. dismissal before the Regional Arbitration Branch No. IV, docketed as NLRC Case No. RAB-IV-2-10765-
99-C.

THE NATIONAL LABOR RELATIONS COMMISSION (SECOND In his Decision[8] dated February 21, 2000, Labor Arbiter Antonio R. Macam found that private
DIVISION), LARRY HERMOSA, LEONARDO G. DE CASTRO and respondents were illegally dismissed. The fallo of the decision reads:
RAMIL BASINILLO,
Promulgated:
WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of all
Respondents. complainants herein illegal and ordering respondents to reinstate them to their former or equivalent
positions and to pay them full backwages, plus ten percent (10%) attorneys fees, computed as follows:
October 11, 2005
LARRY HERMOSA
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
From January 9, 1999 to Feb. 21, 2000
DECISION
= 1 yr. 1 mo. & 12 days or 13.36 mos.
QUISUMBING, J.:
P220.00 x 26 x 13.36 = P76,419.20
For review on certiorari are the Resolutions[1] dated November 28, 2001 and September 3, 2002,
respectively, of the Court of Appeals, in CA-G.R. SP No. 67755. The said Resolutions dismissed P76,419.20/12 = 6,368.27
petitioners special civil action for certiorari against the National Labor Relations Commission (NLRC)
Resolution,[2] which affirmed the Labor Arbiters Decision[3] finding petitioners herein liable for illegal P220.00 x 5 = 1,100.00 P83,887.47
dismissal.

----------------
The antecedent facts are as follows:
LEONARDO DE CASTRO
From Dec. 12, 1998 to Feb. 21, 2000
= 1 yr. 2 mos. & 9 days or 14.30 mos.
P7,280.00 x 14.30 = P104,104.00
P104,104.00/12 = 8,675.33
P7,280.00/26 x 5 = 1,400.00 P114,179.33
----------------
RAMIL BASINILLO
From Oct. 17, 1998 to Feb. 21, 2000
= 1 yr., 4 mos. & 4 days or 16.13 mos.
P200.00 x 26 x 16.13 = P83,876.00
P83,876.00/12 = 6,989.67
P200.00 x 5 = 1,000.00 P 91,865.67
---------------- ---------------
Total Full Backwages = P289,932.47
Plus 10% Attorneys Fees = 28,993.25
---------------
GRAND TOTAL = P318,925.72
SO ORDERED.[9]
On appeal, the NLRC affirmed the Labor Arbiters decision. It also denied petitioners motion for
reconsideration.
Undaunted, petitioners filed with the Court of Appeals a special civil action for certiorari. However, the
appellate court dismissed the petition for being defective in form. It found that only the company signed
the verification and certification on non-forum shopping. Petitioner Willy Bendol did not sign the same.
Petitioners motion for reconsideration was denied. The appellate court reasoned that even if petitioner
Willy Bendol was not impleaded as a real party in interest, records showed that he was impleaded as a co-
respondent before the Labor Arbiter. Thus, the appellate court ruled, his failure to sign the verification and
certification on non-forum shopping is a ground for the dismissal of the petition.
Hence, the instant petition anchored on the following grounds:
A. THE HONORABLE COURT OF APPEALS PLAINLY ERRED AND ACTED
CONTRARY TO EXISTING LAW AND JURISPRUDENCE IN DISMISSING THE PETITION
FOR CERTIORARI ON A MERE TECHNICALITY CONSIDERING THAT WILLY BENDOL WAS
JOINED MERELY AS A NOMINAL PARTY TO THE PETITION.
B. MORE IMPORTANTLY, JUSTICE WOULD BE BEST SERVED IF THE
PETITION WAS GIVEN DUE COURSE CONSIDERING THAT THE PUBLIC RESPONDENT
COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION WHEN IT AFFIRMED THE DECISION OF LABOR ARBITER
MACAM CONSIDERING THAT:
1. THERE IS NO FACTUAL OR EVIDENTIARY BASIS TO SUPPORT THE FINDING OF
ILLEGAL DISMISSAL. DUE PROCESS AND FAIR PLAY DICTATE THAT THE PUBLIC
RESPONDENT COMMISSION POINT OUT THE PARTICULAR FACTUAL FINDING OF THE
LABOR ARBITER WHICH JUSTIFIED THE FINDING OF ILLEGAL DISMISSAL.
2. THE PUBLIC RESPONDENT COMMISSION IGNORED THE FACT THAT THE LABOR
ARBITERS FINDING OF ILLEGAL DISMISSAL RESTS ON PURE SPECULATION, CONJECTURE
AND SURMISES.
3. PRIVATE RESPONDENT BASINILLO HIMSELF DENIED THAT HE WAS DISMISSED BY
PETITIONERS.
4. THE ACTS OF HERMOSA CONSTITUTE WILLFUL DISOBEDIENCE JUSTIFYING HIS
DISMISSAL.
5. THE HONORABLE COMMISSION COMPLETELY IGNORED THE FACT THAT PRIVATE
RESPONDENTS SINGULAR CAUSE OF ACTION IS THAT FOR ILLEGAL DISMISSAL. THUS,
THE LABOR ARBITERS AWARD OF SEPARATION PAY AND ATTORNEYS FEES WAS
UTTERLY WITHOUT BASIS.[10]
Petitioners insist Willy Bendol was impleaded merely because he was the immediate supervisor of private
respondents. They argue that the real party in interest in this case is the company. In any case, petitioners
point out that Bendol was no longer connected with the company when the special civil action for
certiorari was filed.
Private respondents, however, maintain that formal requirements must be strictly complied with. Thus,
they posit, the Court of Appeals correctly dismissed the petition for failure of one of the petitioners to sign
the verification and certification on non-forum shopping.
Further, petitioners contend that Hermosas omission constituted willful disobedience justifying his
dismissal. With respect to de Castro, petitioners claim that he was merely suspended. As for Basinillo,
petitioners point to an unsworn statement,[11] where he denied filing any complaint for illegal dismissal
against the company.
Private respondents, however, counter that petitioners failed to prove willful disobedience as a just cause
for Hermosas termination. Moreover, they posit that de Castros preventive suspension constituted
constructive dismissal because it was for an indefinite period and no recall order was issued by the
company. Private respondents also argue that Basinillos purported unsworn statement has no probative
value.
Lastly, petitioners contend the Labor Arbiter erroneously awarded separation pay and attorneys fees not
prayed for. On this point, private respondents quickly point out that, contrary to petitioners claim,
separation pay was not awarded at all. They also claim that the award of attorneys fees was in accordance
with law.
We resolve to give due course to the petition.
The requirement regarding verification of a pleading is not jurisdictional. Such requirement is simply a
condition affecting the form of the pleading, non-compliance with which does not necessarily render the
pleading fatally defective.[12]
The Court of Appeals relied on Loquias v. Office of the Ombudsman,[13] which held that a certification on
non-forum shopping signed by only one of two or more petitioners is defective, unless he was duly
authorized by his co-petitioner. However, the said ruling applies when the co-parties are being sued in
their individual capacities. Note that the petitioners in Loquias[14] are the mayor, vice-mayor, and three
members of the municipal board of San Miguel, Zamboanga del Sur. The said co-parties were charged
with violation of Republic Act No. 3019[15] in their various capacities.
In the instant case, the petitioners are the company and its operations manager, Willy Bendol. The latter
was impleaded simply because he was a co-respondent in the illegal dismissal complaint. He has no
interest in this case separate and distinct from the company, which was the direct employer of private
respondents. Any award of reinstatement, backwages, and attorneys fees in favor of private respondents
will be enforced against the company as the real party in interest in an illegal dismissal case. Petitioner
Bendol is clearly a mere nominal party in the case. His failure to sign the verification and certification on
non-forum shopping is not a ground for the dismissal of the petition. The appellate court erred in
dismissing outright petitioners special civil action for certiorari solely on that ground.
The logical course of action now is to direct the Court of Appeals to give due course to the special civil
action for certiorari. However, to obviate further delay in the resolution of this case, we shall bring the
present controversy to rest.
After weighing the parties arguments and carefully reviewing the records of this case, we agree with the
findings and conclusions of the Labor Arbiter as affirmed by the NLRC.
Hermosa was unjustly dismissed. For willful disobedience to be a valid cause for dismissal, the following
twin elements must concur: (1) the employee's assailed conduct must have been willful, that is,
characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable,
lawful, made known to the employee and must pertain to the duties which he had been engaged to
discharge.[16]
Both elements are lacking. We find no hint of perverse attitude in Hermosas written explanation. [17] On the
contrary, it appears that the alleged company procedure for leaving the ignition key of the companys
vehicles within office premises was not even made known to him.[18] Petitioners failed to prove Hermosa
willfully disobeyed the said company procedure. At any rate, dismissal was too harsh a penalty for the
omission imputed to him.
De Castro was likewise unlawfully terminated. Contrary to petitioners claim, records show that de Castro
was not merely suspended. He was dismissed for alleged abandonment of work. [19] To constitute
abandonment as a just cause for dismissal, there must be: (a) absence without justifiable reason; and (b) a
clear intention, as manifested by some overt act, to sever the employer-employee relationship.[20]
Petitioners failed to prove that de Castro abandoned his job. A clear intention to end the employer-
employee relationship is missing. He did not report for work simply because he was indefinitely
suspended. Moreover, the fact that de Castro filed a case for illegal dismissal against petitioners belies
abandonment.[21]
In the case of Basinillo, petitioners rely solely on his purported unsworn statement alleging he was never
dismissed. However, not having been sworn to, the said document has no probative value. While the Court
is liberal in the conduct of proceedings for labor cases, proof of authenticity as a condition for the
admission of documents is nonetheless required.[22]
Petitioners failed to present evidence of Basinillos continuous contribution to SSS or uninterrupted pay
slips to prove he remained under the companys employ. Hence, the complaint [23] for illegal dismissal filed
by Basinillo stands and speaks for itself. Once a case for illegal dismissal is filed, the burden is on the
employer to prove that the termination was for valid cause. [24] Petitioners failed to discharge this burden
persuasively.
Finally, petitioners lament that the Labor Arbiter erred in granting respondents separation pay and
attorneys fees. We note, however, that separation pay was not awarded at all; thus, any discussion on this
matter would be futile. On the other hand, the award of attorneys fees, though not prayed for, is sanctioned
by law[25] and must be upheld.
WHEREFORE, the assailed Resolutions dated November 28, 2001 and September 3, 2002, respectively,
of the Court of Appeals, in CA-G.R. SP No. 67755, are SET ASIDE. The NLRC Resolution affirming the
Labor Arbiters Decision, finding petitioners liable for illegal dismissal, is AFFIRMED. Costs against
petitioners.
SO ORDERED.
FIRST DIVISION
warning.[6] Despite the previous warnings, Buguat continued to be habitually absent and inattentive to

her task. On March 1, 1999, she again failed to properly count the bundle of socks assigned to her. Thus,
CHALLENGE SOCKS G.R. No. 165268
on March 2, 1999, petitioner terminated her services on grounds of habitual absenteeism without prior
CORPORATION,
Petitioner, Present: leave, tardiness and neglect of work.[7]
Davide, Jr., C.J. (Chairman),*
- versus - Quisumbing,**
Thereafter, Buguat filed a complaint for illegal dismissal.[8]
Ynares-Santiago,

On February 11, 2000, the labor arbiter[9] rendered a Decision[10] holding that Buguat was illegally
Carpio, and
dismissed. The dispositive portion of the decision reads:
Azcuna, JJ.
WHEREFORE, following the pronouncement in the case of ALU-TUCP v.
COURT OF APPEALS (Former NLRC (G.R. No. 120450, February 10, 1999), judgment is hereby rendered ordering
respondents to reinstate complainants without loss of seniority rights and
First Division), NATIONAL LABOR benefits, but without backwages.

RELATIONS COMMISSION SO ORDERED.[11]

(First Division), HON. ANTONIO

The labor arbiter found Buguats dismissal too harsh and disproportionate to the infraction
R. MACAM, in his capacity as Promulgated:
committed. It was observed that counting volumes of socks is tedious and the worker is prone to commit
Labor Arbiter and ELVIE BUGUAT,
mistakes especially if the counting is done on a regular basis. The labor arbiter ruled that mistake in

Respondents. November 8, 2005 counting bundles of socks is tolerable and should be punished by suspension only.[12]

x ---------------------------------------------------------------------------------------- x
The National Labor Relations Commission (NLRC) adopted the findings of the labor arbiter. It
DECISION
denied[13] petitioners appeal and motion for reconsideration.
YNARES-SANTIAGO, J.:

Petitioner filed a petition for certiorari before the Court of Appeals which rendered a Decision on May
This petition for review on certiorari under Rule 45 of the Rules of Court assails the May 11, 2004
11, 2004 reversing and setting aside that of the labor arbiter and the NLRC, the dispositive portion of
Decision[1] of the Court of Appeals in CA-G.R. SP No. 75761, and its September 13, 2004
which provides:
Resolution[2] denying the motion for reconsideration.
WHEREFORE, the Decision dated October 30, 2001 and the Order of December 19,
The antecedent facts show that respondent Elvie Buguat was hired on January 17, 1997 by petitioner 2002 of the National Labor Relations Commission are hereby REVERSED and SET
ASIDE and a new one entered herein.
Challenge Socks Corporation as knitting operator.[3] In the course of her employment, she incurred
CHALLENGE SOCKS CORPORATION, having terminated private respondent with just
absences and tardiness without prior approval and had been neglectful of her duties.[4] On May 25, 1998,
and valid cause but without observing the proper procedure in terminating private
she failed to check the socks she was working on causing excess use of yarn and damage to the socks respondents services, is ordered to pay ELVIE BUGUAT full backwages from the
time her employment was terminated on March 2, 1999 up to the time the herein
design. She was suspended for five days and warned that a repetition of the same act would mean decision becomes final. For this purpose, this case is REMANDED to the Regional
Labor Arbiter for the computation of the backwages due private respondent.
dismissal from the service.[5] On February 2, 1999, she committed the same infraction and was given a
 SO ORDERED.[14]
The appellate court found that there was just cause for terminating the services of Buguat considering
the series of infractions she committed.[15] However, it was noted that petitioner failed to comply with
the twin-notice requirement in terminating an employee hence, the dismissal was considered
ineffectual.[16] Petitioner was ordered to pay Buguat her back wages computed from the time of her
dismissal up to the finality of the decision.[17]
Petitioner sought reconsideration of the appellate courts decision but the same was denied
on September 13, 2004.
Hence, this petition.
The issue for resolution is the validity of Buguats termination.
One of the just causes for terminating an employment under Article 282 of the Labor Code is gross and
habitual neglect by the employee of her duties. This cause includes gross inefficiency, negligence and
carelessness. Such just causes is derived from the right of the employer to select and engage his
employees.[18]
In the instant case, there is no doubt that Buguat was habitually absent, tardy and neglectful of her
duties. We agree with the Court of Appeals that:
Elvies commission of three (3) violations of the companys rules and regulations,
including her unauthorized absences and tardiness, all committed in the span of
two years, shows that she did not only fail to observe due diligence in performing
her job, but she has little regard for the consequences of her acts and inactions.
She repeatedly committed error in counting the socks to be given to the Looping
Section. As a knitting operator, Elvie was required to check the socks she was
working on and to count the bundles of socks she had to pack to be forwarded to
the Looping Section. Elvie did not question the authenticity of the May 25, 1998
suspension letter and the February 2, 1999 memorandum.
While a first violation could be considered excusable, repeated commission of the
same offense could be considered willful disobedience. Elvie, despite the
suspension and warning, continued to disregard the company rules and
regulations.[19]
Habitual neglect implies repeated failure to perform ones duties for a period of
time. Buguats repeated acts of absences without leave and her frequent tardiness
reflect her indifferent attitude to and lack of motivation in her work. Her repeated
and habitual infractions, committed despite several warnings, constitute gross
misconduct. Habitual absenteeism without leave constitute gross negligence and is
sufficient to justify termination of an employee.[20]
We find the penalty of dismissal from the service reasonable and appropriate to Buguats
infraction. Her repeated negligence is not tolerable; neither should it merit the penalty of suspension
only. The record of an employee is a relevant consideration in determining the penalty that should be
meted out.[21] Buguat committed several infractions in the past and despite the warnings and suspension,
she continued to display a neglectful attitude towards her work. An employees past misconduct and
present behavior must be taken together in determining the proper imposable penalty.[22] 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. The offenses committed by him
should not be taken singly and separately but in their totality. Fitness for continued employment cannot
be compartmentalized into tight little cubicles of aspects of character, conduct, and ability separate and
independent of each other.[23] It is the totality, not the compartmentalization, of such company
infractions that Buguat had consistently committed which justified her dismissal.[24]
Besides, terminating an employment is one of petitioners prerogatives. As the employer,
petitioner has the right to regulate, according to its discretion and best judgment, all aspects of
employment, including work assignment, working methods, processes to be followed, working
regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and
recall of workers. Management has the prerogative to discipline its employees and to impose
appropriate penalties on erring workers pursuant to company rules and regulations.[25]
This Court has upheld a companys management prerogatives so long as they are exercised in good faith
for the advancement of the employers interest and not for the purpose of defeating or circumventing
the rights of the employees under special laws or under valid agreements.[26]
 In the case at bar, petitioner exercised in good faith its management prerogative as there is

no dispute that Buguat had been habitually absent, tardy and neglectful of her work, to the damage and
WHEREFORE, the May 11, 2004 Decision and the September 13, 2004 Resolution of the Court of
prejudice of the company. Her dismissal was therefore proper.
Appeals in CA-G.R. SP No. 75761, which declared that petitioner Challenge Socks Corporation did not

The law imposes many obligations on the employer such as providing just compensation to workers, comply with the statutory due process requirements in terminating the employment of private

observance of the procedural requirements of notice and hearing in the termination of employment. On respondent Elvie Buguat, are AFFIRMEDwith the MODIFICATION that the award of backwages

the other hand, the law also recognizes the right of the employer to expect from its workers not only is DELETED. Petitioner is ordered to pay private respondent Elvie Buguat nominal damages in the

good performance, adequate work and diligence, but also good conduct and loyalty. The employer may amount of P30,000.00.

not be compelled to continue to employ such persons whose continuance in the service will patently be
No costs.
inimical to his interests.[27]

SO ORDERED.
The employer has the burden of proving that the dismissed worker has been served two

notices: (1) one to apprise him of the particular acts or omissions for which his dismissal is sought, and

(2) the other to inform him of his employers decision to dismiss him.[28]

As found by the Court of Appeals, petitioner failed to comply with this requirement, thus:

A review of the records shows that private respondent was served a

written termination notice on the very day she was actually dismissed from the
service. The case records are bereft of any showing that Challenge Socks
Corporation notified Elvie in advance of the charge or charges against her.
Likewise, she was not given an opportunity to refute the charges made against her,
thus, depriving her of the right to defend herself. In other words, petitioner fell
short in observing the two-notice rule required by law.[29]

In Agabon v. National Labor Relations Commission,[30] we upheld as valid the dismissal for just cause

although it did not comply with the requirements of procedural due process. We ruled that while the

procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer

should be held liable for non-compliance with the procedural requirements of due process.[31] The

violation of Buguats right to statutory due process by the petitioner warrants the payment of indemnity

in the form of nominal damages in the amount of P30,000, which is appropriate under the

circumstances.[32]

Conformably, the award of backwages in the present case should be deleted. Instead,

private respondent should be indemnified in the amount of P30,000.00 as nominal damages.[33]

 Republic of the Philippines increases (Exhs, A to H, J-K, pp. 45-50, 52-53, rollo) and promoted to Authorized
Supreme Court Signer on May 1, 1991. (Exh. I, p. 51, rollo).
Manila
But after all his years of reputed fealty and good service with the
company, something unexpected and besmirching was uncovered. There were
FIRST DIVISION feedbacks and informations that certain irregularities were being committed in the
bidding process and purchase of computers, an area within the powers and
responsibilities of Cruz. To clarify matters, a special investigation was conducted
FELIX M. CRUZ, JR., G.R. NO. 148544 by the Citytrust Internal Audit Group and it was found out that indeed there were
Petitioner, unauthorized and unreported commissions and rebates given out by one of its
Present: computer suppliers, MECO Enterprises, Inc. (MECO), for purchases made by
Citytrust. This was corroborated by the letter dated August 5, 1992 (Exh. 1, p. 148,
PANGANIBAN, C.J. rollo) of the President and Controller [sic] of MECO certifying that Cruz has
(Chairperson) received commissions and rebates amounting to P105,192.00 just for the period of
YNARES-SANTIAGO, September 1992 to March 1993.
- versus - AUSTRIA-MARTINEZ,
With this damaging result of the investigation, Citytrust sent a show-
CALLEJO, SR., and
CHICO-NAZARIO, JJ. cause memorandum (Exh. 13, p. 161, rollo) to Cruz on August 6, 1993 placing him
under a 30-day preventive suspension and directing him to appear in an
administrative hearing by the Ad Hoc Committee. Cruz submitted the said
COURT OF APPEALS, NATIONAL
LABOR RELATIONS COMMISSION memorandum, the Ad Hoc Committee heard the matter, and found Cruz guilty of
AND CITYTRUST BANKING fraud, serious misconduct, gross dishonesty and serious violation of Bank policies,
regulations and procedure. For the resultant loss of confidence, Citytrust terminated
CORPORATION, Promulgated:
Respondents. July 12, 2006 Cruz from employment effective October 6, 1993 (Exh 15, pp. 164-165, rollo).
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x Aggrieved by this, Cruz filed before the Labor Arbiter an action for
Illegal Dismissal and Damages claiming that Citytrust denied him due process and
hastily dismissed him from service. After the submission of position papers and
presentation of witnesses, the Labor Arbiter rendered decision in favor of Cruz
disposing that:
DECISION
WHEREFORE, premises considered, judgment is
hereby rendered, ordering respondent to reinstate
AUSTRIA-MARTINEZ, J.: complainant to his former position without loss of seniority
rights with full backwages which up to the promulgation of
this Decision amounted to THREE HUNDRED EIGHTY
Before the Court is a special civil action for certiorari under Rule 65 of the Rules of Court SEVEN THOUSAND SEVEN HUNDRED NINETY
(P387,790.00) Pesos, subject to adjustment upon actual
seeking to annul the April 27, 2001 Decision [1] of the Court of Appeals (CA) in CA-G.R. SP No. 52373 reinstatement; to pay complainant his 13th month pay in the
sum of THIRTY TWO THOUSAND THREE HUNDRED
which affirmed the January 27, 1998 Decision of the National Labor Relations Commission (NLRC) and FIFTEEN & 83/100 (P32,315.83) Pesos; and to pay the sum
of FIFTY THOUSAND (P50,000.00) Pesos as and for
its Resolution, dated May 14, 1998 in NLRC NCR CA 011087-96 (NLRC NCR 00-10-06448-93-A). damages, plus attorneys fees in the sum of FORTY SEVEN
THOUSAND TEN & 58/100 (P47,010.58) Pesos
representing ten percent (10%) of the monetary award due
The factual and procedural antecedents of the case, as summarized by the CA, are as follows:
complainant, subject also to adjustment.

SO ORDERED. (p. 26, rollo)

Cruz [herein petitioner Felix M. Cruz, Jr.] was an employee of private From this decision Citytrust appealed to the NLRC, which through its Second
respondent Citytrust Banking Corporation (or Citytrust) from October 8, 1979. He Division rendered the Decision dated January 27, 1998 wherein the ruling of the
held the confidential position of Micro Technical Support Officer, with the Labor Arbiter was set aside and went on dismissing the case for lack of merit. (p.
following duties and responsibilities: (a) Evaluate and recommend from various 37, rollo).
departments/units request for Micro Computers received by the Bidding Committee. Cruz filed a motion for its reconsideration but this was denied for lack of merit.[2]
(b) Further evaluate and accept the bids submitted including recommendation
therof, which were done by the Technical Committee of the Bank (Petitioners
Affidavit, p. 102, rollo). The good performance of Cruz did not remain unnoticed
for on several occasions he was recognized with awards and citations, given salary
 Cruz then filed a petition for certiorari with this Court. In a Resolution dated February 15,
[3]
1999, the Court referred the petition to the CA for appropriate action and disposition, pursuant to the
ruling in the case of St. Martin Funeral Homes v. National Labor Relations Commission.[4]
On April 27, 2001, the CA rendered the presently assailed Decision denying due course to and
dismissing the petition. Sustaining the NLRC, the CA held that while it is true that the signature of
petitioner does not appear in the check vouchers, other pieces of evidence prove that he benefited from the
proceeds of the checks issued; that there is substantial evidence to hold petitioner liable for soliciting and
receiving monetary considerations from a supplier; that his act constituted a willful breach of his
employers trust and confidence which justifies his termination from employment; that petitioners
dismissal from employment was the result of a thorough investigation and hearing where he was given the
opportunity to explain his side.
Instead of a motion for reconsideration, petitioner filed the present petition
for certiorari predicated on the following grounds:
THAT PUBLIC RESPONDENT COURT OF APPEALS GRAVELY ABUSE(D)
ITS DISCRETION AMOUNTING TO LACK OF JURISDICTION OR IN
EXCESS OF JURISDICTION IN SETTING ASIDE THE DECISION OF THE
LABOR ARBITER A QUO
THAT HONORABLE COURT OF APPEALS ABUSED ITS DISCRETION IN
CONCLUDING THAT EXHIBITS 2 TO 10 [IN] WHICH PETITIONERS
SIGNATURE DOES NOT APPEAR, THE FACTS REMAIN THAT HE
BENEFITED FROM THE ALLEGED ANOMALOUS TRANSACTIONS, ONE
MA. CRESENCIA MANGUERRA ENCASHED THE CHECK USING THE
BANK ACCOUNT OF PETITIONER ALLEGING THAT THE LATTER
IS PETITIONER[S] PARAMOUR.[5]
Petitioner claims that while his name appears in the check vouchers issued by MECO, marked as Exhibits
2 to 10, the incontrovertible fact remains that his signature does not appear in any of said vouchers. Not
being a signatory of any of the said check vouchers, petitioner contends that there can be no basis in
concluding that he ever received any commission, special discount or rebate from MECO. Petitioner also
asserts that he was denied due process because he was not given the opportunity to refute the charges
imputed against him. While it is true that private respondent conducted an investigation, petitioner claims
that the same was done without his participation.[6]
In its Comment, private respondent contends that the present petition for certiorari is not the proper
remedy to assail the subject decision of the CA. Private respondent asserts that a petition
for certiorari under Rule 65 of the Rules of Court may be availed of only when a party has no adequate
remedy in the ordinary course of law. Petitioner argues that what petitioner should have done was to file a
petition for review on certiorari under Rule 45 of the Rules of Court, and that petitioners failure to file a
petition for review cannot be remedied by the filing of a special civil action for certiorari. Even assuming
that petitioner is allowed to institute the present petition for certiorari, private respondent contends that
the same must still be dismissed because what is being assailed are the factual findings of the CA and the
NLRC and settled is the rule that in certiorari proceedings under Rule 65 of the Rules of Court, judicial
review does not go as far as to evaluate the sufficiency of evidence upon which the NLRC based its
determinations, the inquiry being limited essentially to whether or not said tribunal has acted without or in
excess of its jurisdiction or with grave abuse of discretion. In any case, private respondent further contends
that petitioner failed to prove that the CA committed grave abuse of discretion because pieces of
documentary and oral evidence bear out the fact that petitioner indeed received various amounts from
MECO either as commission, special discount or rebate without private respondents knowledge and
approval.[7]
The Court does not find merit in the present petition for the following reasons:
First, it is well settled that the remedy to obtain reversal or modification of judgment on the
merits is appeal.[8] This is true even if the error, or one of the errors, ascribed to the court rendering the
judgment is its lack of jurisdiction over the subject matter, or the exercise of power in excess thereof, or
grave abuse of discretion in the findings of facts or of law set out in the decision. [9] In the present case, the
CA disposed of CA-G.R. SP No. 52373 on the merits. Petitioner claims that he received the Decision of
the CA on May 17, 2001. Consequently, he had 15 days from said date of receipt of assailed judgment, or
until June 1, 2001, within which to file a petition for review on certiorari, the reglementary period
prescribed by Rule 45 of the Rules of Court to avail of said action. On July 9, 2001 close to two months
after said receipt, petitioner filed the present petition. Evidently, petitioner has lost his remedy of appeal.

The filing of the instant petition for certiorari cannot be used as a means of recovering his appeal as it is
settled that certiorari is not a substitute for lost appeal.[10] The remedies of appeal and certiorari are
mutually exclusive and not alternative or successive.[11]
Second, assuming for the sake of argument that the present petition for certiorari is the
appropriate remedy, the records of the instant case show that petitioner failed to file a motion for
reconsideration of the decision of the appellate court, thus, depriving the CA of the opportunity to correct
on reconsideration such errors as it may have committed. The first paragraph of Section 1, Rule 65 of the
Rules of Court clearly states that in order for a person to avail of the special civil action of certiorari, he
must be left with no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, to
wit:
SECTION 1. Petition for Certiorari. When any tribunal, board or officer
exercising judicial or quasi-judicial functions has acted without or in excess of its or
his jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in
the ordinary course of law, a person aggrieved thereby may file a verified petition
in the proper court, alleging the facts with certainty and praying that judgment be
rendered annulling or modifying the proceedings of such tribunal, board of officer,
and granting such incidental reliefs as law and justice may require. (Italics
supplied)
A motion for reconsideration of an assailed decision is deemed a plain and adequate remedy expressly
available under the law.[12] The general rule is that a motion for reconsideration is indispensable before
resort to the special civil action for certiorari to afford the court or tribunal the opportunity to correct its
error, if any.[13] This rule is subject to certain recognized exceptions, to wit:
(a) where the order is a patent nullity, as where the court a quo has no
jurisdiction;
(b) where the questions raised in the certiorari proceedings have been
duly raised and passed upon by the lower court, or are the same as those raised and
passed upon in the lower court;
(c) where there is an urgent necessity for the resolution of the
question and any further delay would prejudice the interests of the Government or
of the petitioner or the subject matter of the action is perishable;
(d) where, under the circumstances, a motion for reconsideration would
be useless;
(e) where petitioner was deprived of due process and there is extreme
urgency for relief;
(f) where, in a criminal case, relief from an order of arrest is urgent and
the granting of such relief by the trial court is improbable;
(g) where the proceedings in the lower court are a nullity for lack of due
process;
(h) where the proceeding was ex parte or in which the petitioner had no
opportunity to object; and
(i) where the issue raised is one purely of law or where public interest is
involved.[14]
None of these exceptions are present in the instant case. Hence, petitioners unjustified failure to file a
motion for reconsideration of the decision of the CA before recourse to this special civil action was made
calls for the outright dismissal of this case.
Third, going into the merits of the case, the Court finds that the dismissal of the instant petition
is warranted for failure of petitioner to show grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the CA.
Petitioner was dismissed from employment on the ground, among others, of loss of trust and
confidence. Loss of trust and confidence, as a valid ground for dismissal, must be substantiated by
evidence. Jurisprudence has distinguished the treatment of managerial employees or employees occupying
positions of trust and confidence from that of rank-and-file personnel, insofar as the application of the
doctrine of trust and confidence is concerned. In Caoile v. National Labor Relations Commission, the
Court had occasion to explain as follows:
Thus, with respect to rank-and-file personnel, loss of trust and confidence as ground
for valid dismissal requires proof of involvement in the alleged events in question,
and that mere uncorroborated assertions and accusations by the employer will not
be sufficient. But as regards a managerial employee, the mere existence of a
basis for believing that such employee has breached the trust of his employer
would suffice for his dismissal. Hence, in the case of managerial employees,
proof beyond reasonable doubt is not required, it being sufficient that there is
some basis for such loss of confidence, such as when the employer has
reasonable ground to believe that the employee concerned is responsible for
the purported misconduct, and the nature of his participation therein renders
him unworthy of the trust and confidence demanded by his
position.[15] (Emphasis supplied)
In addition, the language of Article 282(c) of the Labor Code states that the loss of trust and
confidence must be based on willful breach of the trust reposed in the employee by his employer. Such
breach is willful if it is done intentionally, knowingly, and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. [16] Moreover, it must
be based on substantial evidence and not on the employers whims or caprices or suspicions otherwise, the Petitioners reliance on the case of Atlas Consolidated Mining & Development Corp. v.
[17]
employee would eternally remain at the mercy of the employer. Loss of confidence must not be National Labor Relations Commission[24] is misplaced. In the said case, the private respondent, who is an

indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was employee of petitioner corporation, was charged with the unauthorized withdrawal and misappropriation
[18]
arbitrary. And, in order to constitute a just cause for dismissal, the act complained of must be work- of 192 liters of gasoline from company stocks and for knowingly allowing company personnel to work on

related and shows that the employee concerned is unfit to continue working for the employer.[19] In company time in the assembly of a privately-owned vehicle. To prove the first charge, the petitioner

addition, loss of confidence as a just cause for termination of employment is premised on the fact that the company presented in evidence entries in a logbook showing gasoline withdrawals allegedly made by

employee concerned holds a position of responsibility, trust and confidence [20] or that the employee private respondent. In ruling against the petitioner company, the Court held that since respondents

concerned is entrusted with confidence with respect to delicate matters, such as the handling or care and signature does not appear in the logbook, there is no proof that he actually withdrew and received the

protection of the property and assets of the employer.[21] The betrayal of this trust is the essence of the gasoline. In fact, the Court ruled that the logbook cannot be relied upon to establish the alleged dishonesty
[22]
offense for which an employee is penalized. of private respondent. Neither did the Court give credence to the testimonies of the witnesses against him.

In sum, no competent evidence was presented to prove the private respondents liability. This is not the

situation in the present case.

There is no dispute that petitioner is a confidential employee. During his cross-examination, he
It is true that the check vouchers alone are not sufficient to prove his guilt owing to the fact that
testified that aside from evaluating and recommending the purchase of Micro Computers, he also
his signatures do not appear in any of these vouchers. However, aside from the abovementioned check
supervises the maintenance of computer hardware including the installation of computers for Citytrust in
vouchers, there are other pieces of evidence presented by Citytrust which petitioner failed to refute and
all of its branches nationwide.[23] It is clear from the foregoing that petitioner is not an ordinary rank-and-
which points to the fact that he received commissions or rebates from MECO. The evidence consists of the
file employee. His job entails the observance of proper company procedures relating to the acquisition,
following: (1) admission made by petitioner in his letter, dated August 3, 1993, that he received material
installation and maintenance of computers which, undeniably, are vital to the operations of his employer.
considerations from MECO since 1992;[25] (2) certification issued by MECO categorically stating that he
Moreover, his functions are not limited to a specific unit of Citytrust but extend to all branches of his
was paid commissions totaling P105,192.00;[26] (3) testimonies of Leoncio Araullo, Vice President
employer nationwide. Thus, his job involves a high degree of responsibility requiring a substantial amount
of Citytrust; and Ma. Lourdes Foronda, Assistant Vice President for Staff Services Division of the Human
of trust and confidence on the part of his employer.
Resources Department of Citytrust, that petitioner admitted having received the amounts of P1,000.00
The question that remains then is whether there is substantial evidence to prove that petitioner and P500.00 from Art Cordero, an officer of MECO, claiming that these amounts are for the boys; (4)
is guilty of the charges imputed against him as to justify Citytrust in dismissing him from employment on statements in the affidavit of Florante del Mundo, auditor at the Internal Audit Department of Citytrust
the ground of loss of trust and confidence. that two of the checks issued by MECO in favor of petitioner were either encashed by the latters common-

Petitioner contends that without his signatures appearing in the check vouchers issued by law-wife or deposited in his account.[27] In addition, the Court agrees with the CA that annotations

MECO, there can be no basis in coming up with the conclusion that he received and appropriated appearing in the check vouchers issued by MECO such as Payment for the Rebate Given to Boy Cruz of

commissions and rebates without the knowledge and authority of Citytrust. Citytrust[28] and Payment for the Sales Rebate Given to Boy Cruz of Citytrust [29] are confirmations of the

fact that the checks were issued and given specifically by MECO to petitioner in consideration of his
The Court is not persuaded.
office and services. These pieces of evidence, when taken together, would constitute substantial evidence
to prove petitioners guilt; and his failure to satisfactorily explain or rebut them only strengthens Citytrusts
case against him.
Thus, petitioners acceptance of commissions and rebates from MECO, without the knowledge
and consent of Citytrust and without said rebates and commissions being reported and turned over to the
latter, are acts which can clearly be considered as a willful breach of the trust and confidence reposed by
Citytrust upon him. Settled is the rule that an employer cannot be compelled to retain an employee who is
guilty of acts inimical to the interests of the employer.[30] A company has the right to dismiss its employees
if only as a measure of self-protection.[31] This is all the more true in the case of supervisors or personnel
occupying positions of responsibility.[32] In the present case, the Court finds that the CA did not commit
grave abuse of discretion when it ruled that Citytrust is justified in dismissing petitioner from his
employment for loss of trust and confidence.
first requirement of notice when it informed petitioner through a letter, dated August 6, 1993, of the
charges against him, directing him to explain in writing why his employment should not be terminated
and, thereafter, to appear in a hearing to be conducted by the company to give him further opportunity to
explain his side.[41] Citytrust also complied with the second requirement of notice when it sent a
memorandum dated September 28, 1993, to petitioner informing him of his dismissal from employment
and the reasons therefor.[42]
WHEREFORE, the instant petition is DISMISSED for lack of merit.
SO ORDERED.

Petitioner contends that he was denied his right to due process because the investigation
conducted by Citytrust was done ex-parte and he was not given the opportunity to confront the witnesses
against him. Petitioners concept of the opportunity to be heard is the chance to ventilate ones side in a
formal hearing where he can have a face-to-face confrontation with his accusers. It is well settled that the
basic requirement of notice and hearing in termination cases is for the employer to inform the employee of
the specific charges against him and to hear his side and defenses. [33] This does not, however, mean a full
adversarial proceeding.[34] The parties may be heard through pleadings, written explanations, position
papers, memorandum or oral argument.[35] In all of these instances, the employer plays an active role by
providing the employee with the opportunity to present his side and answer the charges in substantial
compliance with due process.[36] In the present case, petitioner cannot claim that he was denied due
process because he was able to respond to the letter of Citytrust dated August 6, 1993.[37] Moreover, he
admitted in his cross-examination before the labor arbiter that he was able to attend the investigation of
the ad hoc committee formed by Citytrust where he was shown the check vouchers issued by MECO,
informed of the charges against him and was given further opportunity to explain his side. [38] Hence, the
fact alone that he was not able to confront the witnesses against him during the investigation conducted by
Citytrust does not mean that he was denied his right to due process. What is frowned upon is the absolute
lack of notice and hearing.[39]

As to the requirement of notice, the Labor Code provides that before an employee can be
validly dismissed, the employer is required to furnish the employee with two (2) written notices: (a) a
written notice containing a statement of the cause for termination to afford the employee ample
opportunity to be heard and defend himself with the assistance of his representative, if he so desires; and,
(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 reasons therefor. [40] Citytrust complied with the
SECOND DIVISION Rogelio Javier was employed by the Standard Electric Manufacturing Corporation (SEMC) on January 15,
1973 as radial spot machine operator in its Production Department. Javier was a member of the Standard
Electric Employees Union-NAFLU (Union).[4]
STANDARD ELECTRIC G.R. No. 166111

On July 31, 1995, Javier failed to report for work. He failed to notify the SEMC of the reason for his
MANUFACTURING
absences. On August 9, 1995, he was arrested and detained for the charge of rape upon complaint of his
neighbor, Genalyn Barotilla. After the requisite preliminary investigation, an Information for rape was
CORPORATION, filed in the Regional Trial Court (RTC) of Pasig, docketed as Criminal Case No. 108593.[5]

Petitioner, Present: On January 13, 1996, the SEMC received a letter[6] from Javier, through counsel, informing the SEMC
that Javier was detained for the charge of rape and for that reason failed to report for work. He requested
the SEMC to defer the implementation of its intention to dismiss him, citing the ruling of this Court
PUNO, J., Chairman, in Magtoto v. NLRC.[7] The SEMC denied Javiers request and issued a Memorandum terminating his
employment for (a) having been absent without leave (AWOL) for more than fifteen days from July 31,
AUSTRIA-MARTINEZ, 1995; and (b) for committing rape.[8]

- versus - CALLEJO, SR., On May 17, 1996, the RTC issued an Order[9] granting Javiers demurrer to evidence and ordered his
release from jail. Shortly thereafter, Javier reported for work, but the SEMC refused to accept him back.
TINGA, and
A grievance meeting between the Union, Javier and the SEMC was held, but SEMC refused to re-admit
Javier. On August 2, 1996, the Union and Javier filed a Complaint[10]for illegal dismissal against the
CHICO-NAZARIO, JJ. SEMC before the NLRC. He averred that since the reason for his detention for rape was non-existent, the
termination of his employment was illegal. Javier cited the ruling of this Court in Magtoto v. NLRC.[11]
STANDARD ELECTRIC
For its part, the SEMC averred that Javiers prolonged absences caused irreparable damages to its orderly
EMPLOYEES UNION-NAFLU- Promulgated: operation; he had to be replaced so that the continuity and flow of production would not be jeopardized. It
could not afford to wait for Javiers indefinite return from detention, if at all. The SEMC insisted that
conformably with its Rules and Regulations, it was justified in dismissing Javier for being absent without
KMU and ROGELIO JAVIER, leave for fifteen days or so.

Respondents. August 25, 2005 On January 14, 1997, the Labor Arbiter rendered judgment ordering the dismissal of the
complaint.[12] The Labor Arbiter ruled that the complaint was within the exclusive jurisdiction of the
Voluntary Arbitrators or Panel of Arbitrators. On appeal, the NLRC reversed the Labor Arbiters decision
and ruled that the latter had jurisdiction over the complaint; it thus ordered the remand of the case to the
Labor Arbiter for resolution on the merits.[13]
x--------------------------------------------------x

DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari seeking to review the Decision[1] and Resolution[2] of the
Court of Appeals (CA) in CA-G.R. SP No. 76657, which annulled and set aside the Resolution of the
National Labor Relations Commission (NLRC) affirming the Labor Arbiters Decision [3] in NLRC NCR
Case No. 00-08-04760-96.
On August 16, 1999, the Labor Arbiter rendered judgment ordering the dismissal of the
complaint.[14] However, the SEMC was ordered to pay separation pay to the complainant. The dispositive
portion reads:
WHEREFORE, in view of the foregoing, the complaint for illegal dismissal is hereby ordered
DISMISSED for lack of merit.
The respondents Standard Electric Manufacturing Corporation and Mr. Jose Uy are, however, ordered to
pay complainant Rogelio Javier the amount of SEVENTY-ONE THOUSAND SEVEN HUNDRED
SIXTY PESOS (P71,760.00) representing his financial assistance/separation pay.

SO ORDERED.[15]
On appeal, the NLRC affirmed the Labor Arbiters ruling in its Resolution of September 24, 2002. The
NLRC declared that:
Appellants contention is baseless. A perusal of the evidence on record clearly shows that prior to his
dismissal from his job by respondents-appellees, he was made to explain his side (Exhibit 5, respondents
Formal Offer of Evidence). Evidence on record further shows that a grievance machinery as provided for
in the CBA was activated by respondents-appellees for the purpose of affording complainant a chance to
present his side prior to his dismissal. (Exhibits 4 to 4-b, respondents Formal Offer of Evidence).
Considering the adequate evidence presented by respondents-appellants on which the findings of the
Labor Arbiter were based, this Commission finds no merit on complainants-appellants contention that the
Labor Arbiter had committed serious errors in his findings of facts and the law in this instant case.
Hence, the assailed decision must stand for the matter of evaluating the merits and demerits of the case,
as long as the Decision is supported by the facts and the evidence, is left to the sound discretion of the
Labor Arbiter. (Metropolitan Bank and Trust Company vs. NLRC, et al., 235 SCRA 400, 403).
WHEREFORE, in the light of the foregoing premises, [the] Decision of the Labor Arbiter dated August
16, 1999 is hereby AFFIRMED.
SO ORDERED.[16]
When the NLRC denied the motion for reconsideration of the said decision, Javier and the Union filed a
petition for certiorari with the CA, questioning such ruling, as follows:
I THIS CASE.
PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN NOT HOLDING
THAT RESPONDENT COMPANY VIOLATED PETITIONER ROGELIO JAVIERS RIGHT TO
PRIOR NOTICE RELATIVE TO THE LATTERS DISMISSAL.
II
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING THAT
PETITIONER ROGELIO JAVIER WENT AWOL (ABSENCE WITHOUT LEAVE) FROM HIS JOB.
III
PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION IN NOT APPLYING THE RULING
IN MAGTOTO VS. NLRC TO THE INSTANT CASE.[17]
In the Decision[18] dated August 19, 2004, the CA reversed the findings of the Labor Arbiter and the
NLRC. The fallo of the decision reads:
WHEREFORE, the NLRCs Resolution dated September 24, 2002 is ANNULLED and SET
ASIDE. Private respondent Standard Electric Manufacturing Corporation is
hereby ORDERED to REINSTATE Rogelio Javier to his former position, without loss of seniority rights
and other privileges appurtenant thereto, with full backwages from the time of his dismissal until he is
actually reinstated, or to pay him separation pay, if reinstatement is no longer feasible.
SO ORDERED.
The appellate court cited the rulings of this Court in Magtoto v. NLRC[19] and City Government of Makati
City v. Civil Service Commission[20] as precedents. It declared that it was not Javiers intention to abandon
his job; his incarceration reasonably justified his failure to report for work and negated the theory that he
was on AWOL. Likewise, the CA held that Javier could not be terminated on the ground of commission of
a crime, as when he was acquitted of the rape charges, the second ground relied upon by the
SEMC ceased to have factual basis. Hence, despite the fact that Javier was allegedly afforded the
opportunity to explain his side, the same was unnecessary since, in the first place, there was no just or
authorized cause for the dismissal.
The motion for reconsideration seasonably filed by the SEMC on August 19, 2004 was denied by the CA
in its November 23, 2004 Resolution.[21] Hence, this recourse.
The issues posed by the petitioner are the following:
I
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED PATENT AND
REVERSIBLE ERROR IN APPLYING THE CASE OF MAGTOTO VS. NLRC IN THIS CASE.
II
WHETHER OF NOT THE HONORABLE COURT OF APPEALS COMMITTED PATENT AND
REVERSIBLE ERROR IN APPLYING THE CASE OF CITY GOVERNMENT OF MAKATI CITY IN
III
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED PATENT AND
REVERSIBLE ERROR IN REINSTATING [RESPONDENT] ROGELIO JAVIER AND GRANTING
HIM FULL BACKWAGES.
IV
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED PATENT AND
REVERSIBLE ERROR IN TOTALLY DISREGARDING THE FINDINGS OF THE NATIONAL
LABOR RELATIONS COMMISSION AND THE LABOR ARBITER A QUO.[22]
The Court finds that the petition is bereft of merit.
The petitioner asserts that the ruling of the Court in Magtoto finds no application in the present case. It
argues that in Magtoto, no criminal information was filed in the regular court against the employee, as the
city prosecutor found no probable cause to hold the respondent therein for trial. The petitioner argues that
respondent Javier was indicted for the crime of rape in the RTC. Another difference, the petitioner points
out, is that the employee in the cited case was dismissed solely on account of his absences during his
imprisonment; respondent Javier was terminated due to truancy prior to his detention from July 31, 1995,
to his detention for rape on August 9, 1995, until his release on May 24, 1996. Respondent Javier never
informed the petitioner why he was absent on the said dates, and subsequent thereto. It was only
on January 13, 1996 that respondent Javier, through his counsel, informed the petitioner of his detention
for rape for the first time.
 reinstated to their former positions, since their separation from employment was founded on
The petitioner avers that the ruling of this Court in City Government of Makati City is not applicable a false or non-existent cause; hence, illegal.
because respondent Javier was dismissed on a demurrer to evidence, and not because he did not commit
the offense alleged. The case was dismissed because of the prosecutions failure to prove his guilt beyond
Respondent Javiers absence from August 9, 1995 cannot be deemed as an abandonment of his work.
reasonable doubt. In marked contrast, the petitioner notes, the employee in City Government of Makati
Abandonment is a matter of intention and cannot lightly be inferred or legally presumed from certain
City was acquitted by reason of the prosecutions failure to prove her complicity in the crime.
equivocal acts. To constitute as such, two requisites must concur: first, the employee must have failed to
report for work or must have been absent without valid or justifiable reason; and second, there must have
The petitioner maintains that the mere filing of the Information for the crime of rape against respondent been a clear intention on the part of the employee to sever the employer-employee relationship as
Javier rendered its Rules and Regulations operational, particularly Serious Offense No. 7. It avers that manifested by some overt acts, with the second element being the more determinative factor.
substantial proof, not clear and convincing evidence or proof beyond reasonable doubt, is sufficient basis Abandonment as a just ground for dismissal requires clear, willful, deliberate, and unjustified refusal of
for the imposition of any disciplinary action over an erring employee. the employee to resume his employment. Mere absence or failure to report for work, even after notice to
return, is not tantamount to abandonment.[25]
The petitioners contentions are wrong.
Moreover, respondent Javiers acquittal for rape makes it more compelling to view the illegality of his
dismissal. The trial court dismissed the case for insufficiency of evidence, and such ruling is tantamount to
Respondent Javier was dismissed by the petitioner effective February 5, 1996 for (a) being AWOL
an acquittal of the crime charged, and proof that respondent Javiers arrest and detention were without
from July 31, 1995 up to January 30, 1996; and (b) committing rape. However, on demurrer to evidence,
factual and legal basis in the first place.
respondent Javier was acquitted of the charge. With respondent Javiers acquittal, the cause of his dismissal
from his employment turned out to be non-existent.
The petitioner acted with precipitate haste in terminating respondent Javiers employment on January 30,
1996, on the ground that he had raped the complainant therein. Respondent Javier had yet to be tried for
In the Magtoto case, Alejandro Jonas Magtoto was arrested by virtue of an Arrest, Search and Seizure
the said charge. In fine, the petitioner prejudged him, and preempted the ruling of the RTC. The petitioner
Order dated September 1, 1980. He was
had, in effect, adjudged respondent Javier guilty without due process of law. While it may be true that
charged with violation of Article 136 (Conspiracy and Proposal to Commit Rebellion) and Article 138
after the preliminary investigation of the complaint, probable cause for rape was found and respondent
(Inciting to Rebellion or Insurrection) of the Revised Penal Code (RPC). Although Magtoto informed his
Javier had to be detained, these cannot be made as legal bases for the immediate termination of his
employer and pleaded that he be considered as on leave until released, his employer denied the request.
employment.
On April 10, 1981, or about seven (7) months after his arrest, Magtoto was released after the City Fiscal
dismissed the criminal charges for lack of evidence. On the same date, he informed his employer of his
intent to start working again, but the employer rejected the offer. In ruling that his termination was illegal, Moreover, the petitioner did not accord respondent Javier an opportunity to explain his absences
the Supreme Court ruled as follows: from July 31, 1995. The petitioners reliance on the alleged Letter dated August 17, 1995 is misplaced.
There is no evidence on record that respondent Javier received such letter, and its
sudden presence is highly suspect. The Court agrees with respondent Javiers observation that the letter
The employer tries to distance itself from the detention by stressing that the petitioner was dismissed due
was not mentioned nor annexed in the petitioners Position Paper, Rejoinder and even in its Opposition to
to prolonged absence. However, Mr. Magtoto could not report for work because he was in a prison cell.
the Appeal. The letter surfaced only on a much later date, in 1999, when it was formally offered in
The detention cannot be divorced from prolonged absence. One caused the other. Since the causes for the
evidence[26] and referred to in the petitioners Memorandum[27] before the Labor Arbiter a clear inference
detention, which in turn gave the employer a ground to dismiss the petitioner, proved to be non-existent,
that the said letter was but an afterthought to justify petitioners termination of respondent Javiers
we rule that the termination was illegal and reinstatement is warranted. A non-existent cause for dismissal
employment.
was explained in Pepito v. Secretary of Labor (96 SCRA 454).

Further, we cannot subscribe to the petitioners contention that the due process requirement relative to the
... A distinction, however, should be made between a dismissal without cause and a dismissal for a false
dismissal of respondent Javier was duly complied with when he was allowed to explain his side during the
or non-existent cause. In the former, it is the intention of the employer to dismiss his employee for no
grievance machinery conferences. Indeed, in the case at bar, the petitioner did not conduct any
cause whatsoever, in which case the Termination Pay Law would apply. In the latter case, the employer
investigation whatsoever prior to his termination, despite being informed of respondent Javiers
does not intend to dismiss the employee but for a specific cause which turns out to be false or non-
predicament by the latters siblings, his Union and his counsel.[28] The meetings held pursuant to the
existent. Hence, absent the reason which gave rise to his separation from employment, there is no
grievance machinery provisions of the collective bargaining agreement were only done after his dismissal
intention on the part of the employer to dismiss the employee concerned. Consequently, reinstatement is in
had already taken effect on February 5, 1996. Clearly, well-meaning these conferences might be, they can
order. And this is the situation here. Petitioner was separated because of his alleged involvement in the
not cure an otherwise unlawful termination.
pilferage in question. However, he was absolved from any responsibility therefor by the court. The cause
for his dismissal having been proved non-existent or false, his reinstatement is warranted. It would be
unjust and unreasonable for the Company to dismiss petitioner after the latter had proven himself innocent It bears stressing that for a dismissal to be validly effected, the twin requirements of due process notice
of the cause for which he was dismissed.[23] and hearing must be observed. In dismissing an employee, an employer has the burden of proving that the
former worker has been served two notices: (1) one to apprise him of the particular acts or omissions for
which his dismissal is sought; and (2) the other to inform him of his employers decision to dismiss him.
The facts in Pedroso v. Castro[24] are similar to the set of facts in the present case. The petitioners therein
As to the requirement of a hearing, the essence of due process lies in an opportunity to be heard, and not
were arrested and detained by the military authorities by virtue of a Presidential Commitment Order
always and indispensably in an actual hearing.[29]
allegedly for the commission of Conspiracy to Commit Rebellion under Article 136 of the RPC. As a
result, their employer hired substitute workers to avoid disruption of work and business operations. They
were released when the charges against them were not proven. After incarceration, they reported back to Finally, in line with the rulings of this Court in Magtoto and Pedroso on the matter of backwages,
work, but were refused admission by their employer. The Labor Arbiter and the NLRC sustained the respondent Javier is not entitled to any salary during the period of his detention. His entitlement to full
validity of their dismissal. Nevertheless, this Court again held that the dismissed employees should be backwages commenced from the time the petitioner refused his reinstatement. In the instant case, when
respondent Javier was freed on May 24, 1996 by virtue of the judgment of acquittal dated May 17, 1996,
he immediately proceeded to the petitioner but was not accepted back to work; hence, the reckoning point
for the grant of backwages started therefrom.

IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby DISMISSED for lack of merit. The
assailed Decision of the Court of Appeals is AFFIRMED WITH MODIFICATION. Petitioner is
hereby ORDERED to reinstate respondent Rogelio Javier to his former position or, if no longer possible, a
substantially equivalent position without loss of seniority rights and other privileges appurtenant thereto,
with full backwages from the time it refused to allow his reinstatement on May 24, 1996 until actually
reinstated; or, if reinstatement is no longer feasible, to pay him separation pay equivalent to one (1) month
salary for every year of service.

Costs against the petitioner.

SO ORDERED.

FIRST DIVISION
[G.R. No. 155264. May 6, 2005]
FLOREN HOTEL and/or LIGAYA CHU, DELY LIM and JOSE CHUA LIM, petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION, RODERICK A. CALIMLIM,
RONALD T. RICO, JUN A. ABALOS, LITO F. BAUTISTA and GLORIA B.
LOPEZ, respondents.
DECISION
QUISUMBING, J.:
Petitioners Floren Hotel, Ligaya Chu, Dely Lim and Jose Chua Lim seek to annul the
Decision,[1] dated September 10, 2002, of the Court of Appeals in CA-G.R. SP No. 60685 insofar
as it ruled that petitioners had constructively dismissed private respondents Roderick A.
Calimlim and Ronald T. Rico, hence the petitioners are liable to the private respondents for their
proportionate 13th month pay, service incentive leave pay, and indemnity.
At the time of their termination, private respondents Roderick A. Calimlim, Ronald T. Rico
and Jun A. Abalos were working in the hotel as room boys, private respondent Lito F. Bautista
as front desk man, and private respondent Gloria B. Lopez as waitress. They all started working
for the hotel in 1993, except for Jun A. Abalos who started only in 1995.
In the afternoon of June 6, 1998, petitioner Dely Lim randomly inspected the hotel rooms
to check if they had been properly cleaned. When she entered Room 301, she found private
respondent Lito F. Bautista sleeping half-naked with the air-conditioning on. Lim immediately
called the attention of the hotels acting supervisor, Diosdado Aquino, who had supervision over
Bautista. Lim admonished Aquino for not supervising Bautista more closely, considering that it
was Bautistas third offense of the same nature.
When she entered Room 303, she saw private respondents Calimlim and Rico drinking
beer, with four bottles in front of them. They had taken these bottles of beer from the hotels
coffee shop. Like Bautista, they had switched on the air conditioning in Room 303.
That same afternoon, Dely Lim prepared a memorandum for Bautista, citing the latter for
the following incidents: (1) sleeping in the hotel rooms; (2) entertaining a brother-in-law for
extended hours during duty hours; (3) use of hotel funds for payment of SSS loan without
management consent; (4) unauthorized use of hotels air-con; and (5) failure to pay cash
advance in the amount of P4,000.[2]
In the presence of Acting Supervisor Aquino as well as workers Jennifer Rico, Romel
Macaraeg, Mario Resquino and Charie Chua, Dely Lim tried to give Bautista a copy of the
memorandum but Bautista refused to receive it. Bautista then went on absence without leave.
Calimlim and Rico, embarrassed by the incident, went home. When they returned to work the
next day, they were served with a notice[3] of suspension for one week.
Like Bautista, they refused to receive the notice of suspension, but opted to serve the
penalty. Upon their return on June 15, 1998, they saw a memorandum [4] dated June 13, 1998 on
the bulletin board announcing (a) the suspension as room boys of Calimlim and Rico, or
alternately, (b) returning to work on probation as janitors for the following reasons: unsatisfactory
work, having a drinking spree inside the hotels rooms, cheating on the Daily Time Record, being
absent without valid reason, leaving work during duty time, tardiness, and sleeping on the job.
The memorandum also included Calimlim and Ricos new work schedule.
Calimlim and Rico submitted handwritten apologies[5] and pleaded for another chance,
before they went AWOL (absent without leave).
On June 25, 1998,[6] Calimlim, Rico and Bautista filed separate complaints, for illegal
dismissal and money claims, before the Labor Arbiter in Dagupan City. Calimlim and Rico
claimed they were constructively dismissed, while Bautista claimed that Dely Lim orally told him
not to go back to work because he was already dismissed. Abalos and Lopez later also filed
separate complaints for underpayment of wages, non-payment of their 13th month pay, and
service incentive leave pay. On July 7, 1998, after they stopped working, Abalos and Lopez
amended their complaints. They claimed that petitioners orally dismissed them when they
refused to withdraw their complaints.
Petitioners for their part, alleged that they did not dismiss private respondents but that
private respondents had abandoned their jobs.[7]
Private respondents filed a manifestation and motion[8] dated November 24, 1998, praying
that petitioners be ordered to reinstate them to their former positions since after all, according to
petitioners, they were not dismissed.
Petitioners opposed the motion and argued that private respondents cannot be reinstated
since they were not illegally dismissed but they had abandoned their jobs and management
simply considered them dismissed for abandonment.[9] There is no record, however, that the
Labor Arbiter resolved said motion.
On March 19, 1999, the Labor Arbiter dismissed the complaints but ordered petitioners to
pay private respondents their proportionate 13th month pay, and service incentive leave pay. He
likewise ordered petitioners to pay Calimlim and Rico indemnity. He decreed:
IN VIEW OF THE FOREGOING PREMISES, judgment is hereby rendered as follows:
1. Declaring that the five complainants in these consolidated cases were not dismissed illegally
from their work but they abandoned their work.
2. Ordering respondents Floren Hotel and/or Ligaya [Chu] and Dely Joson Lim to pay the
complainants proportionate 13th month pay for 1998 and incentive leave pay equivalent to
two and one half days salary (January to June 1998), computed as follows:
Proportionate 13th month pay:
a) Roderick Calimlim (daily wage as of June 4, 1998 = P148.00 x 30
days [=] P4,440 x 6 months (Jan. to June 1998) = P26,640
divided by 12 (one year) = P2,220.00;
b) Ronald Rico = P2,220.00
c) Jun Abalos = P2,220.00
d) Lito Bautista = P2,220.00
e) Gloria Lopez = P2,220.00
Service Incentive Leave:
R. Calimlim (2 days salary) = P 369.00
R. Rico = 369.00
 J. Abalos = 369.00 Later, the NLRC also denied petitioners motion for reconsideration. [19] Hence, the
L. Bautista = 369.00 petitioners appealed to the Court of Appeals.[20]
G. Lopez = 369.00
On September 10, 2002, the Court of Appeals decided the petition as follows:
3. Ordering the same respondents to pay Roderick Calimlim and Ronald Rico one thousand five
hundred pesos each as indemnity; WHEREFORE, premises considered, the Court MODIFIES the Decision of the respondent NLRC in this
wise: (1) The Court declares that the private respondents Roderick A. Calimlim and Jose Abalos [should
be Ronald T. Rico] were illegally dismissed by petitioner Floren Hotel/Ligaya Chu who is ORDERED to
Summary: reinstate them to their former positions without loss of [seniority] rights, with full backwages and other
benefits until they are actually reinstated; but if reinstatement is no longer possible, Floren Hotel/Ligaya
R. Calimlim = P4,089.00 Chu shall pay their separation pay in addition to their backwages. (2) Declaring private respondents Lito
R. Rico = 4,089.00 Bautista, Jun Abalos and Gloria Lopez to have abandoned their employment, and, therefore, not entitled to
J. Abalos = 2,589.00 either backwages nor separation pay; and (3) ORDERING Floren Hotel/Ligaya Chu to pay all the private
L. Bautista = 2,589.00 respondents their 13th month pay and incentive leave pay as computed in the Decision of the Labor
G. Lopez = 2,589.00 Arbiter, to wit:
TOTAL AWARD = P15,945.00
Proportionate 13th month pay:
All other claims of the complainants including moral and exemplary damages are hereby denied/dismissed
for want of merit. a) Roderick Calimlim (daily wage as of June 4, 1998 = plus P148.00 x
30 days
SO ORDERED.[10] P4,440 x 6 months (Jan. to June 1998)
P26,640 divided by 12 (one year) = P2,220.00;

The Labor Arbiter found that Calimlim, Rico, and Bautista did not report for work and they b) Ronald Rico = P2,220.00
did not show any order of dismissal, thus constructively, they abandoned their work and were c) Jun Abalos = P2,220.00
not illegally dismissed. The Labor Arbiter also ruled that Calimlim and Ricos demotion and d) Lito Bautista = P2,220.00
reassignment were valid exercises of management prerogatives. The reassignment was e) Gloria Lopez = P2,220.00
intended to enable management to supervise them more closely and, in any event, did not
involve a diminution of wages.[11] The Labor Arbiter, however, held petitioners liable for indemnity
Service Incentive Leave:
to Calimlim and Rico for not observing the twin notices rule.

On the absence of any suspension order or notice of dismissal [12] concerning Abalos and R. Calimlim (2 days salary) = P 369.00
Lopez, the Labor Arbiter held that the allegation that they were orally dismissed was insufficient, R. Rico = 369.00
self-serving, and baseless. J. Abalos = 369.00
L. Bautista = 369.00
Private respondents appealed to the National Labor Relations Commission (NLRC). They
G. Lopez = 369.00
averred that the Labor Arbiter committed grave abuse of discretion in ruling (1) that they
abandoned their work, and (2) that the immediate filing of their complaints for illegal dismissal
where they prayed for reinstatement, did not mean they abandoned their jobs. They stressed 3. Ordering the same respondents to pay Roderick Calimlim and Ronald Rico one thousand
that the two elements of abandonment were not proven and that petitioners failed to comply with five hundred pesos each as indemnity;
the two-notice rule.[13] Private respondents likewise insisted that damages were due them,
because their dismissal was attended with bad faith and malice.[14]
Summary:
On March 22, 2000, the NLRC rendered its decision.[15] It reversed the decision of the
Labor Arbiter and ordered the hotel management to immediately reinstate complainants- R. Calimlim = P4,089.00
appellants to their former positions without loss of seniority rights, with full backwages and other R. Rico = 4,089.00
benefits until they are actually reinstated. In the event that reinstatement was no longer possible, J. Abalos = 2,589.00
the respondent-appellees should pay herein private respondents their separation pay in addition L. Bautista = 2,589.00
to the payment of their full backwages; their incentive leave pay and their 13thmonth pay, G. Lopez = 2,589.00
together with P1,000 to each of them as indemnity.[16] TOTAL AWARD = P15,945.00
The NLRC concluded that petitioners failed to prove that private respondents had
abandoned their work. Petitioners likewise failed to serve private respondents notices of SO ORDERED.[21]
termination based on abandonment. The NLRC added that Calimlim and Rico were
constructively dismissed when they were demoted from room boys to janitors and reclassified as
The Court of Appeals agreed with the NLRC that the June 13, 1998, memorandum
probationary employees.[17] However, the NLRC denied private respondents claim for damages
demoting Calimlim and Rico to janitors and reclassifying them as probationary employees
and attorneys fees. It found no evidence that petitioners acted maliciously or in bad faith in
constituted constructive discharge. The Court of Appeals likewise ruled that their right to due
dismissing the five private respondents.[18]
process was violated when they were imposed the additional penalties of demotion from room
boys to janitors, reassignment as part-time employees, and change of their status from regular
to probationary for other alleged offenses for which they were not given notice.[22]
But the Court of Appeals held that the NLRC committed grave abuse of discretion in
declaring that Bautista, Abalos and Lopez were illegally dismissed, since they presented no
other piece of evidence besides the allegations in their position papers. [23] The appellate court
brushed aside the issue that petitioners failure to serve notices of termination was due to the
immediate filing of the complaints for illegal dismissal which made the service of such notices
superfluous.[24]
Petitioners received a copy of the decision on September 20, 2002. On October 3, 2002,
they filed the instant appeal, raising the following errors:
(a)
THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN UPHOLDING
THE FINDINGS OF THE RESPONDENT NATIONAL LABOR RELATIONS COMMISSION
DECLARING RESPONDENTS CALIMLIM AND RICO TO HAVE BEEN CONSTRUCTIVELY
DISMISSED FROM THE SERVICE, SOLELY ON THE BASIS OF THE MEMORANDUM DATED
JUNE 13, 1998. THE COURT OF APPEALS MISINTERPRETED AND MISAPPRECIATED THE
IMPORT OF THE SAID MEMORANDUM VIS--VIS THE RULING OF THE HONORABLE COURT
ON CONSTRUCTIVE DISMISSAL.
(b)
THE COURT OF APPEALS ERRED IN ORDERING THE PETITIONERS TO PAY THE
RESPONDENTS-EMPLOYEES THEIR PROPORTIONATE 13TH MONTH PAY AND SERVICE
INCENTIVE LEAVE AND IN ORDERING THE PETITIONERS TO PAY RESPONDENTS
CALIMLIM AND RICO P1,500.00 EACH AS INDEMNITY.[25]
Private respondents, for their part, received a copy of the decision on September 23,
2002. On October 7, 2002, the private respondents except Calimlim filed a motion for
reconsideration. They pointed out the typographical error in the dispositive portion of the Court of
Appeals decision which declared that it was Calimlim and a certain Jose Abalos who were
constructively dismissed.[26]
They raised the following errors:
...
II. The Honorable Court gravely erred in holding that Lito Bautista, Gloria Lopez and
Jun Abalos were not illegally dismissed as they abandoned their jobs.
III The Honorable Court gravely erred in giving due course to the petition despite the
fact that it was not sufficient in form as it was not accompanied by copies of all
pleadings and documents relevant and pertinent thereto.[27]
On November 20, 2002, the Court of Appeals required management, herein petitioners, to
comment on the motion. Upon receipt of petitioners comment, however, the Court of Appeals
issued a resolution on March 29, 2004, holding in abeyance the action on said motion for
reconsideration by the concerned employees, herein private respondents, pending final
resolution by this Court of the instant petition.[28]
In this petition now before us, we find four issues for our resolution: (1) whether the Court
of Appeals erred in giving due course to the petition for certiorari filed before the appellate court;
(2) whether the private respondents were illegally dismissed; (3) whether the Court of Appeals
erred in ordering petitioners to pay Calimlim and Rico indemnity of P1,500; and (4) whether the
appellate court erred in ordering petitioners to pay all of private respondents their proportionate
13th month pay and incentive leave pay.
On the first issue, private respondents argue that the failure of petitioners to attach copies
of the position papers to their petition for certiorari before the Court of Appeals was fatal to their
cause. Private respondents point out that petitioners allegation (that the NLRC decision holding
that Bautista, Abalos and Lopez had been illegally dismissed) was not supported by substantial
evidence. They add that the NLRC erred in disregarding the material evidence adduced by
petitioners. Hence, it was essential that the evidence for the parties contained in their position
papers be attached to the petition as required by Section 1, Rule 65 of the Rules of Court. [29]
We find no merit in private respondents insistence on procedural flaws. Acceptance of a
petition for certiorari as well as the grant of due course thereto is addressed to the sound
discretion of the court.[30] Section 1, Rule 65 of the Rules of Court in relation to Section 3, Rule
46 of the same rules does not specify the precise documents, pleadings or parts of the records
that should be appended to the petition other than the judgment, final order, or resolution being
assailed. The Rules only state that such documents, pleadings or records should be relevant or
pertinent to the assailed resolution, judgment or orders. [31] Here the pieces of evidence, which
petitioners alleged had been arbitrarily disregarded, were duly annexed to the petition. Also, the
material allegations of the position papers were summarized and discussed extensively in the
decision of the Labor Arbiter, a copy of which was also made part of the petition. It does not
appear in this case that in deciding to give due course to the petition for certiorari, the Court of
Appeals committed any error that prejudiced the substantial rights of the parties. There is,
therefore, no reason for this Court to disturb the appellate courts determination that the copies of
the pleadings and documents attached to the petition were sufficient to make out a prima
facie case.
Nonetheless, on the second issue, we find that the Court of Appeals erred in reversing the
NLRC decision and in holding that Bautista, Abalos and Lopez were not illegally dismissed, but
had abandoned their jobs.
Petitioners claimed that all five private respondents were guilty of abandoning their jobs.
Thus, it was incumbent upon petitioners to show that the two requirements for a valid dismissal
on the ground of abandonment existed in this case. Specifically, petitioners needed to present,
for each private respondent, evidence not only of the failure to report for work or that absence
was without valid or justifiable reasons, but also of some overt act showing the private
respondents loss of interest to continue working in his or her job.[32]
In our view, petitioners failed to adduce sufficient evidence to prove the charge of
abandonment. Petitioners merely presented joint affidavits from hotel supervisors Agustin
Aninag and Lourdes Cantago and other hotel employees showing that Calimlim, Rico, and
Bautista simply went on absence without leave after they were confronted with certain
irregularities, and that Abalos and Lopez likewise just left their employment, also without filing
leaves of absence.[33] Those joint affidavits, however, are insufficient as they do not show that
the absence of Calimlim, Rico, Bautista, Abalos and Lopez were unjustified. More important,
they do not show any overt act that proves that private respondents unequivocally intended to
sever their working relationship with the petitioners. We have held that mere absence from work
does not constitute abandonment.[34]
If it was true that private respondents abandoned their jobs, then petitioners should have
served them with a notice of termination on the ground of abandonment as required under Sec.
2, Rule XIV, Book V, Rules and Regulation Implementing the Labor Code, in effect at that time.
Said Section 2 provided that:
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 workers last known address.
 But petitioners failed to comply with the foregoing requirement, thereby bolstering further
private respondents claim that they did not abandon their work but were illegally dismissed.[35]
Indeed, we find that none of the private respondents in this case had any intention to sever
their working relationship. Just days after they were dismissed, private respondents Calimlim,
Rico, Bautista, Abalos and Lopez filed complaints to protest their dismissals. The well-
established rule is that an employee who takes steps to protest his layoff cannot be said to have
abandoned his work.[36]
That private respondents all desired to work in the hotel is further shown by the fact that
during the proceedings before the Labor Arbiter, shortly after private respondents received
petitioners position paper where the latter averred that private respondents were never
terminated, private respondents filed a manifestation and motion asking that petitioners be
ordered to allow them back to work. This is nothing if not an unequivocal expression of
eagerness to resume working.
We reiterate here the settled rule that in illegal dismissal cases, the employer bears the
burden of showing that the dismissal was for a just or authorized cause.[37] Failure by the
employer to discharge this burden, as in this case, would necessarily mean that the dismissal is
not justified, and therefore illegal.[38]
As regards Calimlim and Rico, the NLRC further found that petitioners constructively
dismissed both. Before us, petitioners now argue that the Court of Appeals misconstrued the
memorandum of June 13, 1998. They insist that they had no intention of dismissing Calimlim
and Rico, as shown by the very fact that the memorandum itself expressly allows Calimlim and
Rico to return to work after they submit their written explanations for the drinking incident which
happened on June 6, 1998.[39] Rather than a constructive dismissal, petitioners argue that the
temporary transfer of Calimlim and Rico to janitorial positions was a valid exercise of the
management prerogative to assign their employees to where they would be of the most benefit
to the hotel. This temporary reassignment, according to the management, was intended solely to
prevent Calimlim and Rico from repeating their infractions by denying them access to the hotel
rooms and keeping them busy and easier to supervise in their new area assignments. [40]
Petitioners further argue that the terms of employment imposed in the memorandum did
not render continued employment impossible, unreasonable or unlikely because, according to
them, there was neither diminution of pay nor demotion involved. They maintain that room boys
and janitors receive the same wages and that the only difference between the two is that room
boys clean the rooms while janitors clean the common areas. [41]
As to the third issue, Article 279 of the Labor Code gives to Calimlim and Rico the right to
reinstatement without loss of seniority rights and other privileges or separation pay in case
reinstatement is no longer possible, and to his full backwages, inclusive of allowances and other
benefits. It was thus error for the Court of Appeals to affirm the NLRC decision to award
Calimlim and Rico indemnity in addition to the measure of damages provided in Article 279. The
award of indemnity is a penalty awarded only when the dismissal was for just or authorized
cause but where the twin-notice requirement was not observed.[44]
With respect to the fourth issue, petitioners fault the appellate court for failing to state why
petitioners should pay respondents their proportionate 13th month pay and service incentive
leave pay.[45] On this matter, we find that the appellate court committed no error. Petitioners did
not question the propriety of the award of proportionate 13th month pay and service incentive
leave in the Court of Appeals. They assailed the NLRC decision on only one ground:
Respondent NLRC committed grave abuse of discretion in reversing the Labor Arbiters decision
insofar as it relates to the issues of illegal dismissal. Hence, the correctness of the cited award in
the NLRC ruling was never brought before the appellate court and is deemed to have been
admitted by petitioners. It cannot therefore be raised anymore in this petition. The office of a
petition for review under Rule 45 is to review the decision of the Court of Appeals, not the NLRC.
The decision of the NLRC as regards the award of 13th month pay and service incentive leave
pay became binding on petitioners because the failure to question it before the Court of Appeals
amounts to an acceptance of the ruling. In any event, the award appears to us amply supported
by evidence and in accord with law.
WHEREFORE, the Decision dated September 10, 2002, of the Court of Appeals in CA-
G.R. SP No. 60685 is hereby MODIFIED. Petitioners Floren Hotel/Ligaya Chu, Dely Lim, and
Jose Chua Lim are held liable for illegally dismissing private respondents Roderick A. Calimlim,
Ronald T. Rico, Jun A. Abalos, Lito F. Bautista and Gloria B. Lopez. Petitioners are ordered, (1)
to reinstate private respondents to their former positions without loss of seniority rights, with full
backwages and other benefits until they are actually reinstated or to pay their separation pay in
addition to their backwages, if reinstatement is no longer feasible; (2) to jointly and solidarily
pay P2,589.00 to each of the private respondents as proportionate 13thmonth pay and service
incentive leave pay for the period January to June 1998, as computed in the decision dated
March 19, 1999, of the Labor Arbiter. No pronouncement as to costs.
SO ORDERED.

We are not persuaded by petitioners contention. For the transfer of the employee to be
considered a valid exercise of management prerogatives, the employer must show that the
transfer is not unreasonable, inconvenient or prejudicial to the employee; neither would it involve
a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the
employer fail to discharge this burden of proof, the employees transfer shall be tantamount to
constructive dismissal, which has been defined as a quitting because continued employment is
rendered impossible, unreasonable or unlikely, as in an offer involving a demotion in rank and
diminution in pay.[42]

In this case, Calimlim and Rico were being forced to accept alternate work periods in their
new jobs as janitors, otherwise they would be unemployed. Not only did their new schedule
entail a diminution of wages, because they would only be allowed to work every other week, the
new schedule was also clearly for an undefined period. The June 13, 1998, memorandum did
not state how long the schedule was to be effective. Indeed, it appears that the period could
continue for as long as management desired it. These unreasonable new terms of employment
were imposed in the memorandum of June 13, 1998, which was issued two days before
Calimlim and Rico returned from their week-long suspension. They were imposed for alleged
past infractions for which neither Calimlim nor Rico was given the chance to be heard. Under the
circumstances, we fail to see how the temporary transfer of Calimlim and Rico could be a valid
exercise of management prerogatives. Even the employers right to demote an employee
requires the observance of the twin-notice requirement.[43]
 SECOND DIVISION
[G.R. No. 117418. January 24, 1996]
STELLAR INDUSTRIAL SERVICES, INC., petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and ROBERTO H. PEPITO, respondents.
DECISION
REGALADO, J.:
Imputing grave abuse of discretion by public respondent as its cause of concern in this
special civil action for certiorari, petitioner Stellar Industrial Services, Inc. (Stellar) seeks the
annulment of the decision,1 dated May 31, 1994, of the National Labor Relations Commission in
NLRC NCR CA No. 004326-93 and its resolution of July 21, 1994 denying petitioners motion for
reconsideration. Interestingly, this recourse is the culmination of petitioners sustained corporate
and legal efforts directed against a mere janitor who was formerly employed by it.
Stellar Industrial Services, Inc., an independent contractor engaged in the business of
providing manpower services, employed private respondent Roberto H. Pepito as a janitor
on January 27, 1975 and assigned the latter to work as such at the Maintenance Base Complex
of the Philippine Airlines (MBC-PAL) in Pasay City. There, Pepito toiled for a decade and a half.
According to petitioner, private respondents years of service at MBC-PAL were marred by
various infractions of company rules ranging from tardiness to gambling, but he was
nevertheless retained as a janitor out of humanitarian consideration and to afford him an
opportunity to reform.2
Stellar finally terminated private respondents services on January 22, 1991 because of
what it termed as Pepitos being Absent Without Official Leave (AWOL)/Virtual Abandonment of
Work -Absent from November 2 - December 10, 1990. Private respondent had insisted in a letter
to petitioner dated December 2, 1990, to which was attached what purported to be a medical
certificate, that during the period in question he was unable to report for work due to severe
stomach pain and that, as he could hardly walk by reason thereof, he failed to file the
corresponding official leave of absence.3
As petitioner disbelieved private respondents explanation regarding his absences, the
latter contested his severance from employment before the Arbitration Branch of the National
Labor Relations Commission (NLRC) in Manila in a complaint docketed as NLRC NCR-00-03-
01869-91 for illegal dismissal, illegal deduction and underpayment of wages under Wage Order
NCR-001, with prayer for moral and exemplary damages and attorneys fees. While the labor
arbiter was of the view that Pepito was not entitled to differential pay under said wage Order, or
to moral and exemplary damages for lack of bad faith on the part of petitioner, he opined that
private respondent had duly proved that his 39-day absence was justified on account of illness
and that he was illegally dismissed without just cause.4
Thus the decision rendered on December 28, 1992 by Labor Arbiter Manuel R. Caday
decreed:
WHEREFORE, judgment is hereby rendered declaring the dismissal of the complainant as illegal and
ordering the respondent to immediately reinstate complainant to his former position as Utilityman, without
loss of seniority rights and with full backwages and other rights and privileges appurtenant to his position
until he is actually reinstated. As computed, the judgment award in favor of the complainant is stated
hereunder:
Backwages
1/27/91 - 12/27/92
at P118. 00 per day P82,550.83
Refund of amount
illegally deducted
(3 years) 288.00
Grand Total P82,838.83
The respondent is further ordered to pay the complainant reasonable attorneys fees
equivalent to 10% of the amount recoverable by the complainant.5
As hereinbefore stated, said judgment of the labor arbiter was affirmed by respondent
commission. Petitioners subsequent motion for reconsideration was likewise rebuffed by the
NLRC, hence the present remedial resort to this Court.
Petitioner contends that public respondent acted with grave abuse of discretion when it
discussed and resolved the issue of abandonment which petitioner had not, at any time, raised
before it for resolution. Further, petitioner considers it patently erroneous for public respondent to
rule that the medical certificate adduced by Pepito sufficiently established the fact of sickness on
his part which thereby justified his absences. Additionally, it claims that respondent commission
gravely erred when it did not carefully examine the evidence, pointing out Pepitos errant
behavior and conduct.6
Petitioner argues, moreover, that the award of back wages and attorneys fees was not
justified considering that Pepito was validly dismissed due to serious misconduct on his part.
Lastly, petitioner insists that the deductions it imposed upon and collected from Pepitos salary
was authorized by a board resolution of Stellar Employees Association, of which private
respondent was a member.7 The Court, however, is unable to perceive or deduce facts
constitutive of grave abuse of discretion in public respondents disposition of the controversy
which would suffice to overturn its affirmance of the labor arbiters decision.
On the initial issue posed by petitioner, respondent commission should indeed have
refrained from passing upon the matter of abandonment, much less from considering the same
as the ground for petitioners termination of private respondents services. The records of the
case indicate that Pepito s employment was cut short by Stellar due to his having violated a
company rule which requires the filing of an official leave of absence should an employee be
unable to report for work, aside from the circumstance that Stellar did not find credible Pepitos
explanation that he was then suffering from severe stomach and abdominal pains.
To be sure, public respondent may well have been misled by the fact that petitioner, in
dismissing Pepito, labelled his violation as Absent Without Official Leave (AWOL)/Virtual
Abandonment.8 Respondent NLRC should have noted that the matter of abandonment was
never brought up as an issue before it and that Stellar never considered Pepito as having
abandoned his job. As a matter of fact, private respondent was only considered by petitioner as
absent until December 10, 1990.9 Pepito was dismissed from work simply for going on leave
without prior official approval and for failing to justify his absence. This is evident from the fact
that petitioner did not assail Pepitos allegations that, at the start of his extended absence, he
had informed Stellar, through telephone calls to his superior at MBC-PAL, that he could not
report for work due to illness. Thus, while abandonment is indisputably a valid legal ground for
terminating ones employment,10 it was a non-issue in this dispute. Be that as it may, that
misapprehension of the NLRC on this particular issue is not to be considered an abuse of
discretion of such gravity as to constitute reversible error.
 In the main, therefore, what is truly at issue here is whether or not serious misconduct for
non-observance of company rules and regulations may be attributed to Pepito and, if so,
whether or not the extreme penalty of dismissal meted to him by Stellar may be justified under
the circumstances. We resolve both issues in the negative.
Stellars company rules and regulations on the matter could not be any clearer, to wit:
Absence Without Leave
Any employee who fails to report for work without any prior approval from his superior(s) shall be
considered absent without leave.
In the case of an illness or emergency for an absence of not more than one (1) day, a telephone call or
written note to the head office, during working hours, on the day of his absence, shall be sufficient to
avoid being penalized.
In the case of an illness or an emergency for an absence of two (2) days or more, a telephone call to the
head office, during regular working hours, on the first day of his absence, or a written note to the head
office, (ex. telegram) within the first three (3) days of his absence, and the submission of the proper
documents (ex. medical certificate) on the first day he reports after his absence shall be sufficient to avoid
being penalized.
1st offense - three (3) days suspension
2nd offense - seven (7) days suspension
3rd offense - fifteen (15) days suspension
4th offense - dismissal (with a period of one (1) year.11
There was substantial compliance with said company rule by private respondent. He
immediately informed his supervisor at MBC-PAL of the fact that he could not report for work by
reason of illness. At the hearing, it was also established without contradiction that Pepito was
able to talk by telephone to one Tirso Pamplona, foreman at MBC-PAL, and he informed the
latter that he would be out for two weeks as he was not feeling well.12 Added to this is his letter
to the chief of personnel which states that, on November 2, 1990, he relayed to his supervisor at
MBC-PAL his reason for not reporting for work and that, thereafter, he made follow-up calls to
their office when he still could not render services.13 As earlier noted, these facts were never
questioned nor rebutted by petitioner.
While there is no record to show that approval was obtained by Pepito with regard to his
absences, the fact remains that he complied with the company rule that in case of illness
necessitating absence of two days or more, the office should be informed beforehand about the
same, that is, on the first day of absence. Since the cause of his absence could not have been
anticipated, to require prior approval would be unreasonable. On this score, then, no serious
misconduct may be imputed to Pepito. Necessarily, his dismissal from work, tainted as it is by
lack of just cause, was clearly illegal.
More importantly, private respondent duly presented the requisite medical certificate. True,
Stellar did not accept the veracity of the same, but it did so quite erroneously. Carlos P.
Callanga, petitioners vice-president for operations, interpreted the certificate submitted by Pepito
in the following strained and nitpicking manner:
a) The medical certificate merely states that Pepito suffered from alleged abdominal pain from November
2, 1990 to December 14, 1990. It does not state that the abdominal pain was so severe as to incapacitate
him for (sic) work.
b) Because the medical certificate states that the abdominal pain was merely alleged, I had reason to
believe that the doctor who issued it did not personally know if such abdominal pain really existed for the
period in question.
c) From the medical certificate, I gathered that the doctor who signed it examined Pepito only
on December 14, 1990, which is the date it appears to have been issued. It does not state that said doctor
actually treated Pepito for the period of his absence.
d) The medical certificate also says Pepito was suffering from alleged abdominal pains until December 14,
1990, but that he could resume work anytime thereafter. This implies that he was physically fit to resume
work anytime thereafter. However, our records show that Pepito was absent only until December 10,
1990. If it is true that Pepitos abdominal pains incapacitated him for (sic) work, he should have been
absent until December 14, 1990. These give me reason to believe that the medical certificate was secured
only as an afterthought and does not satisfactorily explain Pepito s protracted absence.14
A careful perusal and objective appreciation of the medical certificate in question, which
was properly signed by a physician whose existence and professional license number was not
questioned by petitioner, convince us to conclude otherwise. Handwritten by the issuing doctor,
it states in no uncertain terms:
This is to inform that I had examined Roberto Pepito. He has already recovered from his intestinal
abdominal pains suffered last Nov. 2/90 to Dec. 14/90.
He may resume his work anytime.15
Thus, nowhere in said certificate is there any indication that the abdominal pain suffered
by Pepito was only as alleged by him. It definitely states that Pepito was personally examined by
the physician and it can be clearly deduced from the affirmative statements (h)e has already
recovered x x x and (h)e may resume his work anytime that Pepito was really not in a position to
report for work from November 2 to December 14, 1990 on account of actual, and not merely
alleged, intestinal abdominal pains. The certificate further confirms Pepitos earlier information
given by him on November 2, 1990 and which he duly relayed to his supervisor as the true
reason for his inability to work. Callanga obviously misread, we hope unwittingly, intestinal
abdominal pain as alleged abdominal pain.
Again, there is no logic in Callangas assumption that the certificate was obtained only as
an afterthought. It should be noted that Callanga required Pepito to make a written explanation
regarding his absences only on December 18, 1990.16 Pepito accordingly complied with the
same and he attached therewith the medical certificate which showed its date of issuance
as December 14, 1990.17 Thus, even before he was made to explain his absences, he already
had the medical certificate to prove the reason therefor. To characterize the procurement of the
certificate as an afterthought is consequently baseless, especially considering that it bears all
the earmarks of regularity in its issuance. Labor is entitled to at least elementary fairness from
management.
Petitioners reliance on Pepitos past infractions as sufficient grounds for his eventual
dismissal, in addition to his prolonged absences, is likewise unavailing. The correct rule is that
previous infractions may be used as justification for an employees dismissal from work in
connection with a subsequent similar offense.18 That is not the case here. Stellar contends that
Pepitos service record shows that he was under preventive suspension in October, 1979 due to
gambling and that, at various days of certain months in 1986, 1987, and 1988, he was issued
several warnings for habitual tardiness. Then, in October, 1988, he was asked to explain why he
was carrying three sacks of rice in violation of company rules.

In the present case, private respondents absences, as already discussed, were incurred
with due notice and compliance with company rules and he had not thereby committed a similar
offense as those he had committed in the past. Furthermore, as correctly observed by the labor
arbiter, those past infractions had either been satisfactorily explained, not proven, sufficiently
penalized or condoned by the respondent. In fact, the termination notice furnished Pepito only
indicated that he was being dismissed due to his absences from November 2,
1990 to December 10, 1990 supposedly without any acceptable excuse therefor. There was no
allusion therein that his dismissal was due to his supposed unexplained absences on top of his
past infractions of company rules. To refer to those earlier violations as added grounds for
dismissing him is doubly unfair to private respondent. Significantly enough, no document or any
other piece of evidence was adduced by petitioner showing previous absences of Pepito,
whether with or without official leave.

Regarding the amount deducted from Pepitos salary, Stellar stresses that said deduction
concerning death aid benefits is lawful since these were made in accordance with Board
Resolution No. 02-85 adopted on August 17, 1988 by the board of directors of the Stellar
Employees Association. However, Article 24 1(n) of the Labor Code and the implementing rules
thereon in Section 13(a), Rule VIII, Book III disallow such deductions. Article 241(n) states that
(n)o special assessment or other extraordinary fees may be levied upon the members of a labor
organization unless authorized by a written resolution of a majority of all the members of a
general membership meeting duly called for the purpose. x x x.

The deduction could be characterized as a special assessment for a Death Aid Program.
Consequently, a mere board resolution of the directors, and not by the majority of all the
members, cannot validly allow such deduction. Also, a written individual authorization duly
signed by the employee concerned is a condition sine qua non therefor. Employees are
protected. by law from unwarranted practices that have for their object the diminution of the
hard-earned compensation due them.19 Private respondent herein must be extended that
protection, especially in view of his lowly employment status.

IN VIEW OF THE FOREGOING, no grave abuse of discretion having been committed by

respondent National Labor Relations Commission in its decision and resolution assailed in the
case at bar, the instant petition of Stellar Industrial Services, Inc. is hereby DISMISSED for lack
of merit.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 49549 August 30, 1990
EVELYN CHUA-QUA, petitioner,
vs.
HON. JACOBO C. CLAVE, in his capacity as Presidential Executive Assistant, and TAY
TUNG HIGH SCHOOL, INC., respondents.
William C. Gunitang and Jaime Opinion for petitioner.
Laogan Law Offices for private respondent.
REGALADO, J.:
This would have been just another illegal dismissal case were it not for the controversial and
unique situation that the marriage of herein petitioner, then a classroom teacher, to her student
who was fourteen (14) years her junior, was considered by the school authorities as sufficient
basis for terminating her services.
Private respondent Tay Tung High School, Inc. is an educational institution in Bacolod City.
Petitioner had been employed therein as a teacher since 1963 and, in 1976 when this dispute
arose, was the class adviser in the sixth grade where one Bobby Qua was enrolled. Since it was
the policy of the school to extend remedial instructions to its students, Bobby Qua was imparted
such instructions in school by petitioner. 1 In the course thereof, the couple fell in love and on
December 24, 1975, they got married in a civil ceremony solemnized in Iloilo City by Hon.
Cornelio G. Lazaro, City Judge of Iloilo.2 Petitioner was then thirty (30) years of age but Bobby
Qua being sixteen (16) years old, consent and advice to the marriage was given by his mother,
Mrs. Concepcion Ong.3 Their marriage was ratified in accordance with the rites of their religion in
a church wedding solemnized by Fr. Nick Melicor at Bacolod City on January 10, 1976. 4
On February 4, 1976, private respondent filed with the sub-regional office of the Department of
Labor at Bacolod City an application for clearance to terminate the employment of petitioner on
the following ground: "For abusive and unethical conduct unbecoming of a dignified school
teacher and that her continued employment is inimical to the best interest, and would downgrade
the high moral values, of the school." 5
Petitioner was placed under suspension without pay on March 12, 1976. 6 Executive Labor
Arbiter Jose Y. Aguirre, Jr. of the National Labor Relations Commission, Bacolod City, to whom
the case was certified for resolution, required the parties to submit their position papers and
supporting evidence. Affidavits 7 were submitted by private respondent to bolster its contention
that petitioner, "defying all standards of decency, recklessly took advantage of her position as
school teacher, lured a Grade VI boy under her advisory section and 15 years her junior into an
amorous relation." 8 More specifically, private respondent raised issues on the fact that petitioner
stayed alone with Bobby Qua in the classroom after school hours when everybody had gone
home, with one door allegedly locked and the other slightly open.
On September 17, 1976, Executive Labor Arbiter Jose Y. Aguirre, Jr., without conducting any
formal hearing, rendered an "Award" in NLRC Case No. 956 in favor of private respondent
granting the clearance to terminate the employment of petitioner. It was held therein that —
The affidavits . . . although self-serving but were never disputed by the
respondent pointed out that before the marriage of respondent to Bobby
Qua, fourteen (14) years her junior and during her employment with
petitioner, an amorous relationship existed between them. In the absence of
evidence to the contrary, the undisputed written testimonies of several
witnesses convincingly picture the circumstances under which such
amorous relationship was manifested within the premises of the school,
inside the classroom, and within the sight of some employees. While no
direct evidences have been introduced to show that immoral acts were
committed during these times, it is however enough for a sane and credible
mind to imagine and conclude what transpired and took place during these
times. . . . 9
Petitioner, however, denied having received any copy of the affidavits referred to. 10
On October 7, 1976, petitioner appealed to the National Labor Relations Commission claiming
denial of due process for not having been furnished copies of the aforesaid affidavits relied on by
the labor arbiter. She further contended that there was nothing immoral, nor was it abusive and
unethical conduct unbecoming of a dignified school teacher, for a teacher to enter into lawful
wedlock with her student.11
On December 27, 1976, the National Labor Relations Commission unanimously reversed the
Labor Arbiter's decision and ordered petitioner's reinstatement with backwages, with the
following specific findings:
Affiant Maselliones deposed and said that he saw appellant and Qua sitting
on the student desk inside a classroom after classes. The depositions of
affiants Despi and Chin are of the same tenor. No statements whatever
were sworn by them that they were eyewitnesses to immoral or scandalous
acts.
xxx xxx xxx
Even if we have to strain our sense of moral values to accommodate the
conclusion of the Arbiter, we could not deduce anything immoral or
scandalous about a girl and a boy talking inside a room after classes with
lights on and with the door open.
xxx xxx xxx
Petitioner-appellee naively insisted that the clearance application was
precipitated by immoral acts which did not lend dignity to the position of
appellant. Aside from such gratuitous assertions of immoral acts or conduct
by herein appellant, no evidence to support such claims was introduced by
petitioner-appellee. We reviewed the the sequence of events from the
beginning of the relationship between appellant Evelyn Chua and Bobby
Qua up to the date of the filing of the present application for clearance in
search of evidence that could have proved detrimental to the image and
dignity of the school but none has come to our attention. . . . 12
The case was elevated by private respondent to the Minister of Labor who, on March 30, 1977,
reversed the decision of the National Labor Relations Commission. The petitioner was, however,
awarded six (6) months salary as financial assistance. 13
On May 20, 1977, petitioner appealed the said decision to the Office of the President of the
Philippines. 14 After the corresponding exchanges, on September 1, 1978 said office, through
Presidential Executive Assistant Jacobo C. Clave, rendered its decision reversing the appealed
decision. Private respondent was ordered to reinstate petitioner to her former position without
loss of seniority rights and other privileges and with full back wages from the time she was not
allowed to work until the date of her actual reinstatement. 15
Having run the gamut of three prior adjudications of the case with alternating reversals, one
would think that this decision of public respondent wrote finis to petitioner's calvary. However, in
a resolution dated December 6, 1978, public respondent, acting on a motion for
reconsideration 16 of herein private respondent and despite opposition thereto, 17 reconsidered
and modified the aforesaid decision, this time giving due course to the application of Tay Tung
High School, Inc. to terminate the services of petitioner as classroom teacher but giving her
separation pay equivalent to her six (6) months salary. 18
In thus reconsidering his earlier decision, public respondent reasoned out in
manifestation/comment filed on August 14, 1979 in this Court in the present case:
That this Office did not limit itself to the legal issues involved in the case, but
went further to view the matter from the standpoint of policy which involves
the delicate task of rearing and educating of children whose interest must be
held paramount in the school community, and on this basis, this Office
deemed it wise to uphold the judgment and action of the school authorities
in terminating the services of a teacher whose actuations and behavior, in
the belief of the school authorities, had spawned ugly rumors that had cast
serious doubts on her integrity, a situation which was considered by them as
not healthy for a school campus, believing that a school teacher should at
all times act with utmost circumspection and conduct herself beyond
reproach and above suspicion; 19
In this petition for certiorari, petitioner relies on the following grounds for the reversal of the
aforesaid resolution of public respondent, viz.:
1. The dismissal or termination of petitioner's employment, despite Tay
Tung's claim to the contrary, was actually based on her marriage with her
pupil and is, therefore, illegal.
2. Petitioner's right to due process under the Constitution was violated when
the hearsay affidavits of Laddy Maselliones, Eleuterio Despi, Pina D. Chiu,
and Ong Lee Bing, were admitted and considered in evidence without
presenting the affiants as witnesses and affording the petitioner the right to
confront and cross-examine them.
3. No sufficient proofs were adduced to show that petitioner committed
serious misconduct or breached the trust reposed on her by her employer or
committed any of the other grounds enumerated in Article 283 (Now Article
282) of the Labor Code which will justify the termination of her
employment. 20
We first dispose of petitioner's claim that her right to due process was violated. We do not agree.
There is no denial of due process where a party was afforded an opportunity to present his side.
Also, the procedure by which issues are resolved based on position papers, affidavits and other
documentary evidence is recognized as not violative of such right. Moreover, petitioner could
have insisted on a hearing to confront and cross-examine the affiants but she did not do so,
obviously because she was convinced that the case involves a question of law. Besides, said
affidavits were also cited and discussed by her in the proceedings before the Ministry of Labor.
Now, on the merits. Citing its upright intention to preserve the respect of the community toward
the teachers and to strengthen the educational system, private respondent submits that
petitioner's actuations as a teacher constitute serious misconduct, if not an immoral act, a
breach of trust and confidence reposed upon her and, thus, a valid and just ground to terminate
her services. It argues that as a school teacher who exercises substitute parental authority over
her pupils inside the school campus, petitioner had moral ascendancy over Bobby Qua and,
therefore, she must not abuse such authority and respect extended to her. Furthermore, it
charged petitioner with having allegedly violated the Code of Ethics for teachers the pertinent
provision of which states that a "school official or teacher should never take advantage of his/her
position to court a pupil or student." 21
On the other hand, petitioner maintains that there was no ground to terminate her services as
his
there is nothing wrong with a teacher falling in love with her pupil and, subsequently, contracting
a lawful marriage with him. She argued that she was dismissed because of her marriage with
Bobby Qua This contention was sustained in the aforesaid decision of the National Labor
Relations Commission thus:
. . . One thing, however, has not escaped our observation: That the
application for clearance was filed only after more than one month elapsed
from the date of appellant's marriage to Bobby Qua Certainly, such belated
application for clearance weakens instead of strengthening the cause of
petitioner-appellee. The alleged immoral acts transpired before the marriage
and if it is these alleged undignified conduct that triggered the intended
separation, then why was the present application for clearance not filed at
that time when the alleged demoralizing effect was still fresh and
abrasive?22
After a painstaking perusal of the records, we are of the considered view that the determination
of the legality of the dismissal hinges on the issue of whether or not there is substantial evidence
to prove that the antecedent facts which culminated in the marriage between petitioner and her
student constitute immorality and/or grave misconduct. To constitute immorality, the
circumstances of each particular case must be holistically considered and evaluated in the light
of prevailing norms of conduct and the applicable law. Contrary to what petitioner had insisted
on from the very start, what is before us is a factual question, the resolution of which is better left
to the trier of facts.
Considering that there was no formal hearing conducted, we are constrained to review the
factual conclusions arrived at by public respondent, and to nullify his decision through the
extraordinary writ of certiorari if the same is tainted by absence or excess of jurisdiction or grave
abuse of discretion. The findings of fact must be supported by substantial evidence; otherwise,
this Court is not bound thereby.23
We rule that public respondent acted with grave abuse of discretion. As vividly and forcefully
observed by him in his original decision:
Indeed, the records relied upon by the Acting Secretary of Labor (actually
the records referred to are the affidavits attached as Annexes "A" to "D" of
 the position paper dated August 10, 1976 filed by appellee at the arbitration granted by the Constitution to labor. In termination cases, the burden of proving just and valid
proceedings) in arriving at his decision are unbelievable and unworthy of cause for dismissing an employee rests on the employer and his failure to do so would result in
credit, leaving many question unanswered by a rational mind. For one thing, a finding that the dismissal is unjustified.
the affidavits refer to certain times of the day during off school hours when
appellant and her student were found together in one of the classrooms of
The charge against petitioner not having been substantiated, we declare her dismissal as
the school. But the records of the case present a ready answer: appellant
unwarranted and illegal. It being apparent, however, that the relationship between petitioner and
was giving remedial instruction to her student and the school was the most
private respondent has been inevitably and severely strained, we believe that it would neither be
convenient place to serve the purpose. What is glaring in the affidavits is the
to the interest of the parties nor would any prudent purpose be served by ordering her
complete absence of specific immoral acts allegedly committed by appellant
reinstatement.
and her student. For another, and very important at that, the alleged acts
complained of invariably happened from September to December, 1975, but
the disciplinenary action imposed by appellee was sought only in February, WHEREFORE, the petition for certiorari is GRANTED and the resolution of public respondent,
1976, and what is more, the affidavits were executed only in August, 1976 dated December 6, 1978 is ANNULLED and SET ASIDE. Private respondent Tay Tung High
and from all indications, were prepared by appellee or its counsel. The School, Inc. is hereby ORDERED to pay petitioner backwages equivalent to three (3) years,
affidavits heavily relied upon by appellee are clearly the product of after- without any deduction or qualification, and separation pay in the amount of one (1) month for
thought. . . . The action pursued by appellee in dismissing appellant over every year of service.
one month after her marriage, allegedly based on immoral acts committed
even much earlier, is open to basis of the action sought seriously doubted;
on the question. The basis of the action sought is seriously doubted; on the SO ORDERED.
contrary, we are more inclined to believe that appellee had certain selfish,
ulterior and undisclosed motives known only to itself. 24

As earlier stated, from the outset even the labor arbiter conceded that there was no direct
evidence to show that immoral acts were committed. Nonetheless, indulging in a patently unfair
conjecture, he concluded that "it is however enough for a sane and credible mind to imagine and
conclude what transpired during those times." 25 In reversing his decision, the National Labor
Relations Commission observed that the assertions of immoral acts or conducts are gratuitous
and that there is no direct evidence to support such claim, 26 a finding which herein public
respondent himself shared.

We are, therefore, at a loss as to how public respondent could adopt the volte-face in the
questioned resolution, which we hereby reject, despite his prior trenchant observations
hereinbefore quoted. What is revealing however, is that the reversal of his original decision is
inexplicably based on unsubstantiated surmises and non sequiturs which he incorporated in his
assailed resolution in this wise:

. . . While admittedly, no one directly saw Evelyn Chua and Bobby Qua
doing immoral acts inside the classroom it seems obvious and this Office is
convinced that such a happening indeed transpired within the solitude of the
classrom after regular class hours. The marriage between Evelyn Chua and
Bobby Qua is the best proof which confirms the suspicion that the two
indulged in amorous relations in that place during those times of the day. . .
. 27

With the finding that there is no substantial evidence of the imputed immoral acts, it follows that
the alleged violation of the Code of Ethics governing school teachers would have no basis.
Private respondent utterly failed to show that petitioner took advantage of her position to court
her student. If the two eventually fell in love, despite the disparity in their ages and academic
levels, this only lends substance to the truism that the heart has reasons of its own which reason
does not know. But, definitely, yielding to this gentle and universal emotion is not to be so
casually equated with immorality. The deviation of the circumstances of their marriage from the
usual societal pattern cannot be considered as a defiance of contemporary social mores.

It would seem quite obvious that the avowed policy of the school in rearing and educating
children is being unnecessarily bannered to justify the dismissal of petitioner. This policy,
however, is not at odds with and should not be capitalized on to defeat the security of tenure
 THIRD DIVISION Immediately, they were ordered to go home. The next day, petitioners suspended them for one week
effective July 22 to 28, 1998 (except respondent Wilfredo Toribio[4]). Upon their return, they were served
with a notice of petitioners memorandum terminating their services for abandonment of work.
SHIE JIE CORPORATION/SEASTAR EX-IM CORP., BIEN YANG, G.R. No. 153148
MICHAEL YANG and SAMMY YANG,
Petitioners, in their answer, denied respondents allegations. They claimed that on July 20, 1998, about
2:45 oclock in the afternoon, 13 rank-and-file employees staged a walk-out and abandoned their work.
Petitioners, Among them were respondents Wilfredo Toribio, Nida Toribio, Yolanda Lorenzo, Sorraya Amping,
Vivian Mendoza, Merylene Delos Reyes, Arnold Francisco, and Manuel Francisco. As a consequence,
- versus - petitioners business operations were interrupted and paralyzed, prompting them to issue a memorandum
suspending respondents for one week or from July 22 to 28, 1998. However, on July 24, 1998, petitioners,
in another memorandum, directed them to report for work on July 27, 1998. Instead, respondents Ernesto
NATIONAL FEDERATION OF LABOR, MEMBERS ARNOLD Etrata, Sorraya Amping, Yasher Taning, Yolanda Lorenzo, Merylene Delos Reyes, and Wilfredo Toribio
FRANCISCO, NIDA TORIBIO, SORRAYA AMPING, YOLANDA submitted their resignation letters and quitclaims. Subsequently or on July 28, 1998, petitioners sent
LORENZO, VIVIAN MENDOZA, MERYLENE DELOS REYES, respondents Arnold Francisco, Nida Toribio, Vivian Mendoza, and Manuel Francisco a notice terminating
MANUEL FRANCISCO, WILFREDO TORIBIO, YASHER TANING their services for abandonment of work.
and ERNESTO ETRATA, Present:

On August 20, 1999, the Labor Arbiter rendered a Decision finding respondents guilty of unfair labor
Respondents. practice (for dismissing petitioners illegally); and ordering them, jointly and severally, to pay
petitioners P843,960.62, thus:
PANGANIBAN, J., Chairman,
WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered in the
SANDOVAL-GUTIERREZ, above-entitled case:

CORONA, 1. Declaring Shie Jie Corporation/Seastar Ex-Im Corporation, Michael Yang and Sammy Yang to
have committed unfair labor practice against the complainants for violating the latters
constitutional rights to self-organization;
CARPIO MORALES, and

2. Declaring that complainants Ernesto Etrata, Nida Toribio, Sorraya Amping, Yolanda Lorenzo,
GARCIA, JJ. Vivian Mendoza, Merylene delos Reyes, Manuel Francisco, Wilfredo Toribio, Yasher Taning and
Arnold Francisco were illegally dismissed by the respondents;
Promulgated:
3. Ordering Shie Jie Corporation and/or Seastar Ex-Im Corporation to jointly and severally pay
July 15, 2005 the complainants the claims and awards listed and specified in Annex A forming an integral part
x ---------------------------------------------------------------------------------------------------------------x hereof, in the total amount of Eight Hundred Forty Three Thousand Nine Hundred Sixty & 62/100
Pesos (P843,960.62), Philippine currency; and
DECISION
4. Dismissing the claims for rest day pay and unpaid waiting time, for lack of merit.
SANDOVAL-GUTIERREZ, J.:
SO ORDERED.

At bar is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as
On appeal, the National Labor Relations Commission (NLRC) promulgated its Decision dated April 27,
amended, assailing the Decision[1] dated November 29, 2001 and Resolution[2] dated April 9, 2002
2000 reversing the Labor Arbiters Decision and dismissing respondents complaint.
rendered by the Court of Appeals in CA-G.R. SP No. 61322.

Respondents then filed a motion for reconsideration but was denied by the NLRC in a Resolution dated
The instant controversy stemmed from a complaint for unfair labor practice, illegal dismissal and non-
June 29, 2000. Hence, they filed with the Court of Appeals a petition for certiorari.
payment of benefits, damages and attorneys fees filed with the Labor Arbiter, Regional Branch No. IX,
Zamboanga City by the National Federation of Labor, Arnold Francisco, Nida Toribio, Sorraya Amping,
Yolanda Lorenzo, Vivian Mendoza, Merylene Delos Reyes, Manuel Francisco, Wilfredo Toribio, Yasher On November 29, 2001, the Appellate Court rendered a Decision reversing and setting aside the NLRCs
Taning and Ernesto Etrata, respondents, against Shie Jie Corporation/Seastar Ex-Im Corporation, Bien Decision and reinstating the Labor Arbiters Decision, thus:
Yang, Michael Yang and Sammy Yang, petitioners, docketed as NLRC Case No. RAB-09-03-00105-99.
In resolving this issue we find for the petitioners.
Respondents, in their complaint, alleged that they were employed as fish processors by petitioners.[3] On
July 20, 1998, Sammy Yang and Michael Yang, petitioners, confronted them about their union activities.

When there is no showing of a clear valid and legal cause for the termination of employment, the
law considers the matter a case of illegal dismissal and the burden is on the employer to prove
that the termination was for a valid or authorized cause. This burden of proof appropriately lies
on the shoulders of the employers and not on the employee because a workers job has some of
the characteristics of property rights and is therefore within the constitutional mantle of
protection. No person shall be deprived of life, liberty or property without due process of law, nor
shall any person be denied the equal protection of the laws (Quebec, Sr. vs. NLRC, 301 SCRA
627, 633-634).
Aporopos thereto, Art. 277, par. (b) of the Labor Code mandates in explicit terms that the
burden of proving the validity of the termination of employment rests on the employer. Failure to
discharge this evidential burden would necessarily mean that the dismissal was not justified,
and, therefore, illegal (Ibid.).
In this regard, the private respondents failed.
To our mind, the alleged resignation of the said six petitioners is incredible. To constitute a
resignation, it must be unconditional and with the intent to operate as such. There must be an
intention to relinquish a portion of the term of office accompanied by an act of relinquishment
(Azcor Manufacturing, Inc. vs. NLRC, 303 SCRA 26, 33). In the instant case, the questioned
resignation letters were dated July 27, 1998. If indeed they resigned on the said date then how
come 17 days later or on August 13, 1998 they filed their complaints against the private
respondents? The same is therefore illogical and contrary to human experience. The filing of the
complaints and thereafter their active pursuance of their cases for illegal dismissal negate any
intention on their part to relinquish their job with private respondent Shie Jie Corporation/Seastar
Corporation.
The fact that the resignation letters were fully written by the six petitioners themselves (Annex A
to Comment in Respondents Position Paper, Id. at p. 93) is of no moment. Having introduced
those resignation letters in evidence, it was incumbent upon the private respondents to prove
clearly and convincingly their genuineness and due execution (Azcor Manufacturing, Inc. vs.
NLRC, 303 SCRA 26, 34). (Emphasis ours). This, they failed to do. The fact that the subject
resignation letters were all exactly worded lead us to conclude that indeed the said petitioners
merely copied the same and that they only accomplished said letters for fear that they would not
be regularized in their jobs.
xxxxxx
Regarding the four petitioners who were dismissed for abandonment, we rule that they were
likewise illegally dismissed.
xxxxxx
In the instant case, the intent to abandon was not convincingly shown. It is unlikely that the said
petitioners abandoned their jobs considering that they have worked with the private respondent
company for 4-6 years with the exception of petitioner Arnold Francisco, who started to work
with the company only in November 1997.
Moreover, well-settled is the rule that the filing of the complaint for illegal dismissal negates the
fact that an employee abandoned his work for it is illogical for one to abandon his employment
and then thereafter file a complaint for illegal dismissal. The petitioners in immediately filing the
complaints for illegal dismissal clearly indicated that they have not given up their work.
Furthermore, it must be stressed that abandonment of work does not per se severe the
employer-employee relationship. It is merely a form of neglect of duty, which is in turn a just
cause for termination of employment. The operative act that will ultimately put an end to this
relationship is the dismissal of the employee after complying with the procedure prescribed by
law. If the employer does not follow this procedure, there is illegal dismissal (De Paul/King Philip
Customs Tailor vs. NLRC, 304 SCRA 448, 458-459). If indeed they abandoned their work, then
the private respondents should have served the notices dated July 28, 1998 (Annexes C, D, E,
and F to the Position Paper of the Respondents, pp. 71-74) to the last known addresses of the
petitioners in accordance with the rules.
xxxxxx
WHEREFORE, the decision of the public respondent is hereby REVERSED and SET ASIDE.
The decision of the labor arbiter is REINSTATED with the following modifications:
1. The petitioners are entitled to the payment of full backwages; 13th month pay and service
incentive leave subject to statutory limitations; and
2. Petitioner Wilfredo Toribios monetary claim should be corrected.
SO ORDERED.
On December 21, 2001, petitioners filed a motion for reconsideration, but was denied by the Appellate
Court in a Resolution dated April 9, 2002.
Hence, this petition for review on certiorari.
In this petition, the basic issue posed is whether the Court of Appeals erred in holding that petitioners
failed to prove by substantial evidence that respondents voluntarily resigned and/or abandoned their work.
Voluntary resignation is defined as the act of an employee, who finds himself in a situation in which he
believes that personal reasons cannot be sacrificed in favor of the exigency of the service; thus, he has no
other choice but to disassociate himself from his employment. [5] Acceptance of a resignation tendered by
an employee is necessary to make the resignation effective.[6] No such acceptance, however, was shown in
the instant case.
Moreover, the fact that respondents immediately filed a complaint for illegal dismissal against petitioners
and repudiated their alleged resignation completely negated petitioners claim that they voluntarily
resigned.
In Molave Tours Corporation vs. National Labor Relations Commission,[7] we held:
By vigorously pursuing the litigation of his action against petitioner, private respondent clearly
manifested that he has no intention of relinquishing his employment, which act is wholly
incompatible to petitioners assertion that he voluntarily resigned.
Neither do we find any indication that respondents have shown by some overt acts their intention to sever
their employment in petitioner company.
In Samarca vs. Arc-Men Industries, Inc.,[8] we ruled:

x x x. Absence must be accompanied by overt acts unerringly pointing to the fact that the
employee simply does not want to work anymore. And the burden of proof to show that there
was unjustified refusal to go back to work rests on the employer.

xxx

Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal
acts. To constitute abandonment, there must be clear proof of deliberate and unjustified intent to
sever the employer-employee relationship. Clearly, the operative act is still the employees
ultimate act of putting an end to his employment.

Settled is the rule that mere absence or failure to report for work is not tantamount to
abandonment of work. x x x.

In this case, respondents did not report back for work on July 27, 1998 because they were suspended by
petitioners for one week effective July 22 to 28, 1998. Verily, their absence cannot be considered
abandonment of work, a just cause for termination of employment.

In fine, considering that respondents did not abandon their work, their dismissal from the service is illegal.

WHEREFORE, the petition is DENIED. The assailed Decision dated November 29, 2001 and Resolution
dated April 9, 2002 of the Court of Appeals in CA-G.R. SP No. 61322 are hereby AFFIRMED. Costs
against petitioners.

SO ORDERED.
SECOND DIVISION Beth admitted her serious offense in regard to falsification of documents.

4. Accommodations of Payroll Checks

[G.R. No. 130473. October 21, 1998] USECO staff granted a special privilege to certain employees regarding the encashment of
payroll checks one day in advance of the date on the check. It was stopped earlier in the past
as it added to the normal workload and was deemed to be disadvantageous for the USECO
because the interest to be earned by the money for that day has been lost.

ELIZABETH RAMOS, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (Third

Division) LABOR ARBITER JOSE G. DE VERA AND U.S. EMBASSY FILIPINO 5. Encashment of Check/CPAs
EMPLOYEES CREDIT COOPERATIVE (USECO) and its President, MARVIN
RAMOS, respondents. Why was Beths signature/initial needed for Citibank to encash the check when the signatures
of the authorized officers already appear on the check?
DECISION
Why were CPAs in the past released and encashed without the authorized signatures?
PUNO, J.:

6. Resigned Members
This is a petition for certiorari filed by Elizabeth Ramos to reverse the ruling of the National Labor
Relations Commission[1] affirming her suspension and dismissal from employment for loss of trust and
confidence. When asked by the Board to explain how recently resigned members and other
resigned employees in the past were able to secure loans, Beth replied that she just
In 1978, petitioner was employed as a bookkeeper-accountant by respondent United States wanted to help members without regard to existing policies.
Embassy Filipino Employees Credit Cooperative (USECO).[2] Nine years later, she was promoted to the
position of Management Assistant. Her latest salary was P18,278.46 per month.
- Raquel Maniquiz case Raquel was able to make a loan amounting to P80,000 after she
In 1993, the members of USECO elected a new set of Board of Directors. The Board, led by its resigned and her loan application was approved only by Aida Halasan (?). Beth Ramos
President, respondent Marvin Santos, created an Audit and Inventory Committee (AIC) to determine indicated that Raquel intended to pay said loan thru her CSR payment and terminal leave
whether USECO has a sound financial management and control mechanism. pay. x x x

The committee unearthed anomalies in USECOs lending transactions. Its findings were taken up in
the June 4, 1993 meeting of the Board of Directors. Petitioner and her co-employees, Luz Coronel and Aside from granting Raquel the loan of P80,000 she was allowed to withdraw her remaining
Nanette Legaspi, were called to shed light on some items in the Audit Committee Report, to wit: deposit with the USECO. Beth Ramos was asked to explain how this withdrawal was
made possible. As she was unable to give the answer during the meeting, she was asked
to include it in her written reply.
1. Unrecorded Loans
xx xx xx xx
xx xx xx xx
8. Unrecorded Loan of Resigned Members
The case of Aida Halasan (former USECO Assistant Treasurer) was particularly discussed in
regard to her previous loan amounting to P76,140 which the AIC discovered as unrecorded
in her ledger. The transaction was recorded in the Cash Disbursement book and the check Batoys case was classified under this irregularity which the AIC discovered during the
was issued for the net amount of P74,417. Her ledger also showed no record of payment in internal audit. Batoys loan was recorded in the cash disbursement book in the name of E.
any manner. Ramos. However, E. Ramos ledger does not show a record of said loan. Beth Ramos was
required by the board to include her explanation of this case in her written
explanation.
2. Fabricated Ledger
9. Withdrawal of more than the deposits.
Alex Lopez and Steve Roldans true ledgers were hidden by Beth Ramos (herein petitioner)
and Luz Coronel and new ones were fabricated to conceal their loans amounting to more than
the P120,000 limit. x x x Luz explained that she was given instructions to keep them from the Paladays case was mentioned under this irregularity. It was mentioned, however, that there
Audit Committees knowledge. x x x could have been an error in the running balance.

3. Falsification of documents Another case is Rafael Tans over withdrawal which AIC considers not in error in the running
balance but an accommodation since he made a deposit of the same amount the following
day. (emphasis ours)
 On June 17, 1993, respondent Ramos directed petitioner to submit her written explanation on the
aforementioned irregularities.
In her letter, dated June 18, 1993, petitioner made the following explanation:
x x x I believe that the President was then, as he is now fully aware of the prevailing conditions in
USECUs (sic) operations with respect to loan processing and approval. To support my statement that the
loans are approved based on prerogatives of individuals in authority, I respectfully invite the Presidents
attention to the letter of Mr. Franco dated March 15, 1993, in which he very succinctly expressed his
views about loans and I quote Personally, I would rather violate an existing rule that jeopardize (sic) the
welfare of USECU members since most of their reasons were to defray their medical/hospital expenses
(and) of that of their dependents. This view is not restricted to Mr. Franco, but (was) likewise held and
maintained by previous Boards these past many, many years.
Given in the context of our culture the terms of employer-employee relationship, it is unfortunate that
the USECU Staff had to resort to creating dummy records. But since the loans are duly acknowledged
by the borrowers in other legitimate documents, it is readily apparent that the records were made simply
to accommodate those borrowers beyond the authorized limits, but never, never to defraud USECU. In
this regard, the President is respectfully urged to consider the positions held by the concerned borrowers
not only in the USECU hierarchy when the loans were obtained, but also their positions in their respective
places of work within the U.S. Mission. It would have been the height of naivete for the USECU Staff to
impose the USECU rules and act holier than thou in contravention of prevailing practice as very well
expressed in Mr. Francos letter. It is pointed out that these borrowers exceeding the prescribed limits
must be fully aware of their financial status each and every time they submitted applications for
additional loans. And in the absence of authority superior to the Board and mere employees of the Board,
where could the USECU Staff go, assuming that for a moment for the sake of discussion, that the staff did
not subscribe to the practice?
On July 20, 1993, petitioner was preventively suspended for thirty (30) days. On August 19, 1993,
petitioner was placed on forced leave with pay, pending the completion of the investigation.
USECO also commissioned an external auditing firm, J.D. Cayetano & Associates, to examine the
irregularities discovered in its lending practices. The external auditor not only confirmed the irregularities
but also discovered shortages in bank deposits by P360,964.38.
The Board of Directors held another meeting to study the report of the external auditor. It noted
overages in the loan receivables in the amount of P2,275,544.38. The overages were attributed to several
factors, i.e., non-recording of loan payments and/or unauthorized or fictitious loans which were entered in
the Cash Disbursement Book but not in the individual subsidiary ledgers.
On September 17, 1993, USECO dismissed the petitioner for loss of trust and confidence. Petitioner
countered with a complaint[3] against USECO for illegal dismissal, illegal suspension, underpayment of
salary, moral damages and attorneys fees. She prayed for her reinstatement with backwages, or in the
alternative, for the payment of separation pay.
In a Decision[4] dated April 24, 1995, Labor Arbiter Jose G. De Vera sustained the suspension and
dismissal of petitioner but ordered the payment of her unpaid salary. Its dispositive portion reads:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered declaring the
complainants (petitioners) preventive suspension and dismissal from employment as just and valid and
perforce the complaint for reinstatement/separation pay, moral damages and attorneys fees is dismissed for
lack of merit. And on the complaint for unpaid salaries, the respondent company is hereby ordered to pay
complainant the sum of P18,278.46.
Petitioner appealed to the National Labor Relations Commission (NLRC). In a Decision[5] dated
February 18, 1997, the NLRC reversed the labor arbiter. USECOs first motion for reconsideration was
denied for lack of merit.[6] Undaunted, USECO filed a Second Motion for Reconsideration.[7] In its
Resolution dated May 6, 1997, the NLRC granted the motion and reinstated the decision of the labor
arbiter.[8] The relevant portion of the resolution reads:
x x x (w)e cannot blame respondents from suspending complainant (petitioner). Obviously, the provision
of law for the immediate suspension of what is believed to be a dishonest employee is an appropriate
measure of self-preservation, for the continuance in office of such an employee poses grave danger to the
viability and continued existence of the cooperative.
In view of all the foregoing circumstances, we find that there is indeed justifiable cause for complainants
dismissal on the ground of breach of trust. There can be no doubt that complainants continuance in the
clearly sensitive and fiduciary position of Management Assistant would patently inimical to the
cooperatives interest. It would be oppressive and unjust to order the respondent to take her back; for the
law, in protecting the rights of the worker, authorizes neither oppression nor self-destruction of the
employer.
WHEREFORE, the instant motion is hereby GIVEN DUE COURSE. The Decision of 18 February 1997
as well as the Resolution of 26 March 1997 of this Commission are hereby SET ASIDE and the 24 April
1995 decision of the Labor Arbiter, REINSTATED and AFFIRMED.
It was petitioners turn to move for a reconsideration on the ground that a second motion for
reconsideration is not allowed under the New Rules of Procedure of the NLRC. The motion was denied in
a Resolution dated August 29, 1997.[9] The NLRC ruled:
Indeed, the rule is always in favor of liberality in the construction of procedural laws so that the real
matter in dispute, as in the instant case, may be submitted and decided properly and in accordance with the
law and established jurisprudence. Rigid specifications (Rules of Procedure) set by the human mind may,
at times, be relaxed so as to give way to the sense of fair play as recognized by equity when the peculiar
circumstances of a case, like the one at bench, so warrant. After all, the Rules of Procedure were never
intended to override the ends of justice.
xxx xxx xxx
WHEREFORE, premises considered, the Motion for Reconsideration is hereby DENIED.
SO ORDERED.
Hence, the present petition which poses two (2) important issues: one is substantive, whether there
is just cause for petitioners suspension and dismissal, and the other is procedural, whether the NLRC
committed grave abuse of discretion in granting private respondents second motion for reconsideration.
We dismiss the petition.
There is no question that the position of petitioner as Management Assistant requires a high degree
of trust and confidence. Her duties involve the following:
1. Independently conceives and prepares monthly financial statements and bank
reconciliation statements;
2. Renders budgetary advices to the Board of Directors and monitors the Unions marketable
securities and investments.
 3. Pre-audits loan applications and vouchers, prepares checks, effects deposits to the
bank and performs USECUs (sic) small scale payroll.
4. Reconciles ledgers, maintains the Cash Disbursement books, prepares correspondences
and supervises the activities of the U.S. Embassy Credit Union.
Myrna Legaspi - P153,275.00; Primitivo Roldan P336,855.00; Cipriano Beltran - P135,000.00; Guillermo
Corospe - P175,511.00; and Alejandro Lopez - P1,331,725.00. Of their total loan of P2,410,866.00, there
is an excess of P1,690,866.0 over the maximum allowable loan limit. One of the established control
measures provided in the USECO Circulars aforementioned is the pre-audit of loan applications by
the complainant in her capacity as management assistant. Apparently, she failed in her duty as such.

"The audit reports also show that there are thirty-three (33) borrowers who were able to make out loans
5. Supervises the accounting system and is responsible for overall general upkeep of the
although their paid-in shares were less than 50% of the amount borrowed. Of the total loans
USECU office and oversees the Unions central record files.
of P3,985,830.00, the required paid-in shares should have been P1,992,916.00, but these thirty-three (33)
member-borrowers only have a cumulative deposit of P584,362.00. Again, there appears to be a failure
Loss of confidence is a valid ground for dismissal of an employee.[10] In the case at bar, USECO on, the part of the complainant in the exercise of her pre-audit functions.
proved that its loss of confidence on petitioner has a rational basis. The findings of the labor arbiter on this
factual issue are supported by the evidence and we quote:
"Further, it appears from the audit reports that there are twenty-nine (29) loan applications with a total
of P107,740.00 that were granted without the required approval from the majority of the Board of
The evidence of irregular and anomalous transactions in the lending operations of USECO is quite Directors. Certainly, as a pre-auditor the complainant may not pretend not to know this.
insurmountable. These were initially discovered by the Audit and Inventory Committee when it embarked
on the examination of pertinent records, books of accounts, reports and other papers covering
"More serious violation appears in the grant of loans to resigned employees who automatically
transactions for the period from November 1, 1991 up to March 31, 1993. Due to these irregularities and
became non-members upon their resignation. There are forty-four (44) of them with an aggregate loan
anomalies, not only were established policies of USECO violated but also the specter of huge losses looms
of P1,047,015.45. Collecting this amount from said borrowers is quite difficult at this point.
inasmuch as there is no assurance that outstanding loans granted to some fortyfour (44) resigned members
amounting to P1,047,015.45 may be collected.
"The irregularities, deficiencies, or nonconformity with established rules or policies that attended the
abovementioned loans could not have escaped the complainant's notice being the designated pre-audit
Foremost among the policies that were ignored are those enumerated in USECO Circular No. 91-02, as
personnel. Had she diligently stuck to her, role as such, these questionable loans could not have been
amended by USECO Circular No. 92-03 (Exh. 1 and 2) specifying the following criteria before any loan
extended for she may deny the pre-audit of the subject loan applications for failure to comply with
may be extended:
established policies. Or better still, she could always bring her observations to the board and recommend
denial of said loan applications. The conclusion of this Arbitration Branch is that nothing of this sort was
1. Loans are available to all members regardless of grade, level, provided, the borrower-members done by the complainant.
application is equivalent to 120% of his/her total gross annual salary, fringe benefits included, but not to
exceed P120,000.00, provided further , that his/her pay check should not be less than 50% of his/her gross
"Complainant was also found on audit that she signed without authority cash payment advices (CPAS)
pay per pay period.
on five (5) occasions, instead of the authorized signatories.

2. A borrower-members savings (including his share capital) must be no less than 50% of the amount
"There are cases of unrecorded loans such as that obtained by Adelaida Halasan on December 12, 1991
being loaned, prior to the submission of the loan application (with guarantor) or 75% (without
in the amount of P76,417.00; it was found out that the transaction was not posted in the ledger of Ms.
guarantor).x x x.
Halasan and there was no record of subsequent payments. Another unrecorded loan is that made out in the
name of Benedicto Batoy which stirs (sic) a mystery on the matter of how the loan was granted. We quote
xx xx xx xx the Committee Report (Exh. "3", p. 19), as follows:

4. Withdrawals will be authorized, provided that at least 50% of the loan balance (with guarantor) will 'This member resigned June 23, 1986. he was granted a loan amount to (sic) P5,000.00 on March 4, 1993
remain in his/her savings deposit or at least 75% if without guarantor. per Vou. no. C-131 and Check no. 651991 was issued (Exhibit 17).

5. No new loans may be granted unless 50% of the loan has been paid. 'A review of the application shows that it was not signed by Mr. Batoy. There were (sic) no approval from
any of the Board of Directors. A name of the company (PCC Construction Company) was written on the
bottom part of the application.
6. Loan applications from over P50,000.00 to P120,000.00 must be pre-audited by the management staff,
recommended for approval by the Credit Committee and must be approved by all members of the Board
of Directors. Loan applications of P50,000.00 and below must be approved by the Credit Committee. 'This particular transaction was recorded in the Cash Disbursement Book under the name of E.
Ramos. However, this was not posted on E. Ramos' ledger nor was there a record of payment. There was
no ledger made for Mr. Batoy during FY 1992 to post this transaction.
7. Loans shall be extended only to members who have subscribed and fully paid the required 100 shares
or Pl,000.00 share capital.
'Further, review of pertinent records shows that Ch #651991 is missing on the file of paid checks. The
bank statement, however, shows that the check was presented/cleared to the bank.'
Based on the report of the Audit and Inventory Committee (Exh. "3") as well as the report of the external
auditor, J.D. Cayetano & Associates (Exh. "9"), there were six (6) cooperative members who were
extended loans more than the allowed maximum of P120,000.00, namely, Luz Coronel - P278,500.00;
The Complainant was also found to have fabricated ledgers to conceal the correct balance of a but to facilitate justice. This norm finds more application in administrative agencies which were created to
borrower. The Audit report states: dispense justice with greater freedom from the strictures of technical rules of procedure.

WHEREFORE, premises considered, the petition is dismissed for lack of merit. No costs.
'During the time that audit is ongoing, it was discovered that Mr. Lopez has an additional two (2) sets of
ledgers. The first ledger has a deposit balance of P56,920.00, loan balance of P585,800.00 as of March 4, SO ORDERED.
1993. The second ledger has a zero deposit and a loan balance of P835,620.00 for the same date.

'When questioned, Beth Ramos and Luz Coronel admitted that the last two ledgers are the correct account
balances of Mr. Lopez. The first ledger which was presented during the audit was a fabricated one.They
confessed that they attempted to conceal the correct balance of Mr. Lopez by creating another ledger.

'Further investigation revealed that USECO staff also fabricated the 1992 ledger of Mr. Lopez. A review
of 1992 records shows the existence of two (2) ledgers. The first ledger has a deposit of P58,980.58 and
loan balance of P623,800.00. The second ledger has a zero deposit and loan balance of P844.620.00 (Exh.
131, p. 22).

Capping the foregoing irregularities abovestated is the finding of the external auditor of a shortage in the
cash in bank in the amount of P360,964.61, not to mention overages in loans receivable in the sum
of P2,275,544.38." (emphasis ours)

Petitioner's explanation that the "loan practices" were made for the benefit of the borrowing
members and not to defraud USECO cannot exonerate her. As aptly pointed out by the Solicitor General,
her unsound practices endangered the financial condition of USECO because of the possibility that the
loans could not be collected at all.

We also do not agree that petitioner was denied due process before she was suspended and later
dismissed. The records show that on June 4, 1993, petitioner was called by the USECO Board of Directors
and confronted with the findings of the Audit, and Inventory Committee showing the irregularities she
committed. On June 17, 1993, she was asked to explain in writing these irregularities. The next day,
petitioner submitted her written explanation. Thus, petitioner cannot complain that she did not understand
the charges against her. She is educated and she immediately explained her side. Due process simply
demands an opportunity to be heard and this opportunity was not denied her.

We also hold that the NLRC did not commit grave abuse of discretion in entertaining the second
motion for reconsideration filed by USECO. Section 14 of the Rules of the NLRC provides:

"Section. 14. Motions for Reconsideration.--Motions for reconsideration of any order, resolution or
decision of the Commission shall not be entertained except when based on palpable or patent errors,
provided that the motion is under oath and filed within ten (10) calendar days from receipt of the order,
resolution or decision, with proof of service that a copy of the same has been furnished, within the
reglementary period, the adverse party, and provided further that only one such motion from the same
party shall be entertained."

The NLRC initially reversed the ruling of the labor arbiter on the grounds that: (1) petitioner was
denied procedural due process and (2) the criminal case for estafa filed against her has been dismissed by
the Manila Prosecutor's Office for insufficiency of evidence, particularly, for lack of proof that the
USECO was damaged by the acts attributed to petitioner.

These are patent errors. As discussed above, petitioner was not denied due process. Similarly, it is a
well established rule that the dismissal of the criminal case against an employee shall not necessarily be a
bar to his dismissal from employment on the ground of loss of trust and confidence. [11] The NLRC
corrected these patent errors when it granted private respondent's second motion for
reconsideration.Section 14 of the NLRC rules cannot be construed as to prevent the NLRC from relieving
itself from patent errors in order to render justice. Technical rules of procedure are not meant to frustrate
 SECOND DIVISION
[G.R. No. 150092. September 27, 2002]
GLOBE TELECOM, INC., DELFIN LAZARO, JR., and ROBERTO GALANG, petitioners,
vs. JOAN FLORENDO-FLORES, respondent.
DECISION
BELLOSILLO, J.:
This is a petition for review under Rule 45 of the Rules of Court seeking to annul and set
aside the Decision[1] of the Court of Appeals of 25 May 2001 in CA-G.R. SP No. 60284 which
affirmed the Decision of the National Labor Relations Commission of 28 January 2000 in NLRC
RAB-CAR 05-0170-98, NLRC NCR CA No. 020270-99.[2]
Petitioner GLOBE TELECOM, INC. (GLOBE) is a corporation duly organized and existing
under the laws of the Philippines. Petitioners Delfin Lazaro Jr. was its President and Roberto
Galang its former Director-Regional Sales. Respondent Joan Florendo-Flores was the Senior
Account Manager for Northern Luzon.
On 1 July 1998 Joan Florendo-Flores filed with the Regional Arbitration Branch of the
National Labor Relations Commission (NLRC) an amended complaint for constructive dismissal
against GLOBE, Lazaro, Galang, and Cacholo M. Santos, her immediate superior, Luzon Head-
Regional Sales. In her affidavit submitted as evidence during the arbitration proceedings,
Florendo-Flores bared that Cacholo M. Santos never accomplished and submitted her
performance evaluation report thereby depriving her of salary increases, bonuses and other
incentives which other employees of the same rank had been receiving; reduced her to a house-
to-house selling agent (person-to-person sales agent or direct sales agent) of company products
("handyphone") despite her rank as supervisor of company dealers and agents; never supported
her in the sales programs and recommendations she presented; and, withheld all her other
benefits, i.e., gasoline allowance, per diems, representation allowance, and car maintenance, to
her extreme pain and humiliation.[3]
GLOBE and its co-petitioners claimed that after receiving her salary in the second week of
May 1998 Florendo-Flores went AWOL (Absent Without Leave) without signifying through letter
or any other means that she was resigning from her position; that notwithstanding her absence
and the filing of her case, respondent Florendo-Flores' employment was not terminated as
shown by the fact that salary was still provided her until July 1998 to be released upon her
presentation of the attendance-record sheet indicating that she already returned and reported for
work; that she continued to have the use a of company car and company "handyphone" unit;
that she was replaced only when her absence became indefinite and intolerable as the
marketing operations in Northern Luzon began to suffer; that during the pre-trial conference it
was learned that Florendo-Flores' complaint rested on her alleged personal and private
disagreement with her immediate superior Cacholo M. Santos; that there was no official act from
GLOBE or from other officers of the company, including respondents Lazaro and Galang, which
called for Florendo-Flores' termination, diminution in rank, seniority and benefits, or would imply,
even remotely, any of the same; and, that Florendo-Flores filed the complaint without going
through the grievance process of GLOBE's Human Resources Department and without
informing its officers of her problems with Cacholo M. Santos.
Labor Arbiter Monroe C. Tabingan declared Florendo-Flores to have been illegally
dismissed and ordered petitioners to reinstate her without loss of seniority rights and full
benefits; and to pay full back wages, inclusive of basic pay, allowances and bonuses as prayed
for in the complaint amounting to P307,625.00, exemplary damages in the sum of P200,000.00,
and ten percent (10%) of the total monetary award as attorney's fees. However, the Labor
Arbiter set aside the claim of abandonment as the company failed to send the requisite notice to
Florendo-Flores,[4] hence, there was no adherence to procedural due process. Although he
recognized that the problem brewed and eventually boiled over due to the acts of Cacholo M.
Santos, GLOBE's former Head of Regional Sales, Luzon Area, the Labor Arbiter found the
company negligent in monitoring all its key personnel, and thus assessed against it exemplary
damages at the same time deleting actual and moral damages.[5]
Petitioners appealed the decision to the NLRC which modified the judgment of the Labor
Arbiter. The NLRC ruled that petitioners did not dismiss Florendo-Flores but that the latter
actually abandoned her employment because of a disagreement with her immediate superior
which she failed to bring to the attention of GLOBE and its officers, particularly petitioners
Lazaro and Galang.[6] However, the NLRC declared that if only as an act of grace for the latter's
past services with the company, GLOBE, Lazaro and Galang should be held accountable for the
back wages of Florendo-Flores amounting to P307,625.00 minus the amount of P63,000.00 for
the value of the company car in Florendo-Flores' possession, or the net amount
ofP244,625.00.[7]
Both parties elevated the NLRC decision to the Court of Appeals, each side through a
petition for certiorari. In its Resolution of 2 September 2000 the appellate court dismissed the
petition of Florendo-Flores for failure to append the required verification and certification of non-
forum shopping,[8] while it gave due course to the petition of GLOBE, Lazaro and Galang.
In their petition before the appellate court, GLOBE, Lazaro and Galang averred that the
NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction when it
ordered them to pay Florendo-Flores full back wages and damages despite its express finding
that they did not cause the dismissal of Florendo-Flores as the latter had actually abandoned her
employment on account of her personal differences with her superior.
In its Decision of 25 May 2001 the Court of Appeals found that Florendo-Flores was
constructively dismissed and that payment of back wages and damages was in order. On 21
June 2001 GLOBE, Lazaro and Galang filed a motion for reconsideration but the motion was
denied in the appellate court's Resolution of 19 September 2001.
Petitioners pose the following questions in this petition: In a special civil action for certiorari
where factual findings are deemed to be final and conclusive, can the Court of Appeals alter or
substitute the findings of fact of the lower court/tribunal? In the face of the finding of the NLRC
that respondent abandoned her employment because of a personal squabble with her
immediate superior, and that petitioners had nothing to do with the severance of Flores'
employment, can petitioners be held legally liable for back wages while the guilty party Cacholo
M. Santos is legally absolved of liability?
Petitioners submit that the answers to both questions must be in the negative. They argue
that the appellate court can neither alter nor substitute the factual findings of the NLRC as they
are legally deemed to be final and conclusive in a certiorari proceeding. They contend that a
special civil action for certiorari is an extraordinary remedy created not to correct mistakes in the
factual findings or conclusions of the lower court or tribunal, but a remedy intended to rectify
jurisdictional errors and grave abuse of discretion. Thus, the Court of Appeals cannot make its
own factual findings and substitute them for the factual findings of the NLRC, and on such basis
render a decision.
Petitioners further note that the appellate court failed to address the issues raised in their
petition. They reiterate their position that they cannot be held liable for payment of back wages
as an act of grace in view of the express finding by the NLRC that respondent abandoned her
employment because of a personal rift with her immediate superior and not due to any act
attributable to them. They stress that there can be no liability in the absence of any wrongful act.
 Invoking the principle of res inter alios acta declaring that the rights of a party cannot be
prejudiced by the act, declaration or omission of another, petitioners insist that since the NLRC
found that respondent's problems arose from the acts and deeds of Santos, he alone should be
held liable. Petitioners find special exception to the NLRC's application of the concept of "act of
grace" to justify the award since an "act of grace is not a source of demandable obligation. They
argue that it is not within the power of any judicial or administrative agency to compel an
employer to be liberal.
In the review of an NLRC decision through a special civil action for certiorari, resolution is
confined only to issues of jurisdiction and grave abuse of discretion on the part of the labor
tribunal.[9] Hence, the Court refrains from reviewing factual assessments of lower courts and
agencies exercising adjudicative functions, such as the NLRC. Occasionally, however, the Court
is constrained to delve into factual matters where, as in the instant case, the findings of the
NLRC contradict those of the Labor Arbiter.
In this instance, the Court in the exercise of its equity jurisdiction may look into the records
of the case and re-examine the questioned findings.[10] As a corollary, this Court is clothed with
ample authority to review matters, even if they are not assigned as errors in their appeal, if it
finds that their consideration is necessary to arrive at a just decision of the case.[11] The same
principles are now necessarily adhered to and are applied by the Court of Appeals in its
expanded jurisdiction over labor cases elevated through a petition for certiorari; thus, we see no
error on its part when it made anew a factual determination of the matters and on that basis
reversed the ruling of the NLRC.
Glaring however is the discrepancy between the text of the decision of the appellate court
which declares that respondent Florendo-Flores "was unlawfully constructively dismissed" from
employment,[12] and its dispositive portion which declares that "the assailed judgment is
affirmed."[13] It should be noted that the "assailed judgment" referred to the NLRC Decision which
declared that respondent was not illegally dismissed but that she abandoned her
employment. Even in the award of back wages and exemplary damages the two (2) decisions
are at odds: The award of back wages made by the NLRC was a gratuity or an act of grace from
petitioners while the award made by the Court of Appeals could be assumed to be anchored on
its finding of illegal dismissal. How should the inconsistency be reconciled?
Where there is conflict between the dispositive portion of the decision and the body
thereof, the dispositive portion controls irrespective of what appears in the body. [14] While the
body of the decision, order or resolution might create some ambiguity in the manner the court's
reasoning preponderates, it is the dispositive portion thereof that finally invests rights upon the
parties, sets conditions for the exercise of those rights, and imposes the corresponding duties or
obligations.[15] Hence, for the Court of Appeals to have affirmed the assailed judgment is to adopt
and uphold the NLRC finding of abandonment and its award of full back wages to respondent as
an "act of grace" from petitioners.
However, we believe this is not the proper view as the records reveal that respondent was
constructively dismissed from service.
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 and a diminution in pay."[16] All these are discernible in respondent's situation. She was
singularly edged out of employment by the unbearable or undesirable treatment she received
from her immediate superior Cacholo M. Santos who discriminated against her without reason -
not preparing and submitting her performance evaluation report that would have been the basis
for her increased salary; not forwarding her project proposals to management that would have
been the source of commendation; diminishing her supervisor stature by assigning her to house-
to-house sales or direct sales; and withholding from her the enjoyment of bonuses, allowances
and other similar benefits that were necessary for her efficient sales performance. Although
respondent continued to have the rank of a supervisor, her functions were reduced to a mere
house-to-house sales agent or direct sales agent. This was tantamount to a demotion. She
might not have suffered any diminution in her basic salary but petitioners did not dispute her
allegation that she was deprived of all benefits due to another of her rank and position, benefits
which she apparently used to receive.
Far from pointing to Santos alone as the source of her woes, respondent attributes her
degraded state to petitioners as well. Florendo-Flores cited petitioners' apathy or indifference to
her plight as she was twice left out in a salary increase in August 1987 and May 1998, without
petitioners giving her any reason.[17] It eludes belief that petitioners were entirely in the dark as
the salary increases were granted to all employees across-the-board but respondent was the
only one left receiving a P19,100.00 per month basic salary while the rest received a basic
salary of almost P35,000.00 per month.[18] It is highly improbable that the exclusion of
respondent had escaped petitioners' notice. The absence of an evaluation report from Santos
should have been noted by petitioners and looked into for proper action to have been made. If a
salary increase was unwarranted, then it should have been sufficiently explained by petitioners
to respondent.
Petitioners argue that respondent Florendo-Flores could have brought to their attention the
deplorable treatment she received from Santos by resorting to the company's grievance
machinery so that the problems in her relationship with Santos could then have been easily
ironed out, but she did not. It remains uncontroverted that respondent had inquired from
petitioners the reason why her other benefits had been withheld and sought clarification for her
undeserved treatment but petitioner company and Santos remained mum.[19]
Thus, contrary to the observation of the NLRC, the dispute was not a mere private spat
between respondent Florendo-Flores and her immediate superior Santos. Granting that this was
the case, it had exceeded the periphery of simple personal affairs that overflowed into the realm
of respondent's employment.
Respondent narrates that sometime in June 1997 Santos wrote her a baseless accusatory
letter, and he together with GLOBE Sales Director Roberto Galang, one of petitioners herein,
verbally told her that she should resign from her job, but she refused. [20] Thereafter, in July 1997
and the months subsequent thereto all of respondent's other benefits were withheld without any
reason nor explanation from the company.[21] Even as petitioners endeavored to lay the blame
on Santos alone, he would not have been able to single-handedly mastermind the entire affair as
to influence Sales Director Galang and manipulate the payroll. It only stands to reason that
Santos was acting pursuant to a management directive, or if not, then petitioners had condoned
it, or at the very least, were negligent in supervising all of their employees. As aptly observed by
the Labor Arbiter -
x x x x it would appear however that the respondent company was negligent in monitoring all its key
personnel. For it is the bounden duty of the corporate officialdom to constantly monitor their managerial
staff if only to ascertain the smooth flow of work and operations, which includes the inter-personal
relations of each and every key segment of the corporate machinery. For such, it must be assessed with
just and reasonable exemplary damages.[22]
The unauthorized absence of respondent should not lead to the drastic conclusion that
she had chosen to abandon her work. To constitute abandonment, there must be: (a) failure to
report for work or absence without valid or justifiable reason; and, (b) a clear intention, as
manifested by some overt act, to sever the employer-employee relationship,[23] requisites that
are negated by the immediate filing by respondent Florendo-Flores of a complaint for
constructive dismissal against petitioners. A charge of abandonment is totally inconsistent with
theimmediate filing of a complaint for illegal dismissal; more so, when it includes a prayer for
reinstatement.[24]
The reduction of respondent's functions which were originally supervisory in nature to a
mere house-to-house sales agent or direct sales agent constitutes a demotion in rank. For this
act of illegal dismissal, she deserves no less than full back wages starting from the time she had
been illegally dismissed until her actual reinstatement to her former position without loss of
seniority rights and other benefits - earned, accrued and demandable. She shall continue to
enjoy her benefits, privileges and incentives including the use of the company car
and"handyphone."

The managerial prerogative to transfer personnel must be exercised without grave abuse
of discretion. It must always bear in mind the basic elements of justice and fair play. Having the
right should not be confused with the manner that right is exercised. Thus, it cannot be used as
a subterfuge by the employer to rid himself of an undesirable worker. [25]

In constructive dismissal, the employer has the burden of proving that the transfer and
demotion of an employee are for just and valid grounds such as genuine business
necessity.[26]The employer must be able to show that the transfer is not unreasonable,
inconvenient, or prejudicial to the employee. It must not involve a demotion in rank or a
diminution of salary and other benefits. If the employer cannot overcome this burden of proof,
the employee's demotion shall be tantamount to unlawful constructive dismissal.

It should be noted that the award of back wages in the instant case is justified upon the
finding of illegal dismissal, and not under the principle of "act of grace" for past services
rendered. There are occasions when the Court exercises liberality in granting financial awards to
employees, but even then they contemplate only the award of separation pay and/or financial
assistance, and only as a measure of social justice when the circumstances of the case so
warrant, such as instances of valid dismissal for causes other than serious misconduct or those
reflecting on the employees' moral character.[27] Proper regard for the welfare of the labor sector
should not dissuade us from protecting the rights of management such that an award of back
wages should be forthcoming only when valid grounds exist to support it.

An award of actual and moral damages is not proper as the dismissal is not shown to be
attended by bad faith, or was oppressive to labor, or done in a manner contrary to morals, good
customs or public policy.[28] Exemplary damages are likewise not proper as these are imposed
only if moral, temperate, liquidated or compensatory damages are awarded. [29]

WHEREFORE, the judgment appealed from is MODIFIED. The Decision of the Court of
Appeals of 25 May 2001 in CA-G.R. SP No. 60284 affirming the Decision of the National Labor
Relations Commission of 28 January 2000 declaring that respondent Joan Florendo-Flores had
abandoned her work is SET ASIDE. Petitioners Globe Telecom, Inc., Delfin Lazaro, Jr., and
Roberto Galang are ordered to pay respondent Joan Florendo-Flores full back wages from the
time she was constructively dismissed on 15 May 1998 until the date of her effective
reinstatement, without qualification or deduction. Accordingly, petitioners are ordered to cause
the immediate reinstatement of respondent to her former position, without loss of seniority rights
and other benefits. No pronouncement as to costs.

SO ORDERED.
 THIRD DIVISION

MARICALUM MINING G.R. No. 158637 A grievance meeting was held upon Decorions request on June 5, 1996, during which he
CORPORATION,
Petitioner, Present: manifested that he failed to attend the meeting on April 11, 1996 because he was then still assigning work

to his men. He maintained that he has not committed any offense and that his service record would show
- versus - QUISUMBING, J.,
Chairperson, his efficiency.
CARPIO,
ANTONIO DECORION, CARPIO MORALES, and
Respondent. TINGA, JJ.
On July 23, 1996, Decorion filed before the National Labor Relations Commission (NLRC)
Promulgated:
Regional Arbitration Branch VI of Bacolod City a complaint for illegal dismissal and payment of moral
April 12, 2006
and exemplary damages and attorneys fees.[3]
x---------------------------------------------------------------------------------x

In the meantime, the matter of Decorions suspension and proposed dismissal was referred to
DECISION
Atty. Roman G. Pacia, Jr., Maricalum Minings Chief and Head of Legal and Industrial Relations, who
TINGA, J.:
issued a memorandum on August 13, 1996, recommending that Decorions indefinite suspension be made
This Petition[1] dated July 8, 2003 filed by Maricalum Mining Corporation (Maricalum Mining) definite with a warning that a repetition of the same conduct would be punished with
[2]
assails the Decision of the Court of Appeals which upheld the labor arbiters finding that respondent, dismissal. Maricalum Minings Resident Manager issued a memorandum on August 28, 1996,
Antonio Decorion (Decorion), was constructively dismissed and therefore entitled to reinstatement placing Decorion under definite disciplinary suspension of six (6) months which would include the period
and backwages. of his preventive suspension which was made to take effect retroactively from April 11, 1996 to October

9, 1996.
There is no substantial dispute on the operative facts of this case.

Decorion was a regular employee of Maricalum Mining who started out as a Mill Mechanic
assigned to the Concentrator Maintenance Department and was later promoted to Foreman I. On April 11,
1996, the Concentrator Maintenance Supervisor called a meeting which Decorion failed to attend as he
was then supervising the workers under him. Because of his alleged insubordination for failure to attend
On September 4, 1996, Decorion was served a memorandum informing him of his temporary
lay-off due to Maricalum Minings temporary suspension of operations and shut down of its mining
operations for six (6) months, with the assurance that in the event of resumption of operations, he would
be reinstated to his former position without loss of seniority rights.

the meeting, he was placed under preventive suspension on the same day. He was also not allowed to Decorion, through counsel, wrote a letter to Maricalum Mining on October 8, 1996, requesting
report for work the following day. that he be reinstated to his former position. The request was denied with the explanation that priority for

retention and inclusion in the skeleton force was given to employees who are efficient and whose services
A month after or on May 12, 1996, Decorion was served a Notice of Infraction and Proposed are necessary during the shutdown.
Dismissal to enable him to present his side. On May 15, 1996, he submitted to the Personnel Department

his written reply to the notice.

 Conciliation proceedings having failed to amicably settle the case, the labor arbiter rendered a
[4]
decision dated November 26, 1998, finding Decorionsdismissal illegal and ordering his reinstatement Decorion filed a Comment[8] dated December 5, 2003, maintaining that he was dismissed from

with payment of backwages and attorneys fees. According to the labor arbiter, Decorions failure to attend employment on April 11, 1996 as he was then prevented from reporting for work. He avers that had the

the meeting called by his supervisor did not justify his preventive suspension. Further, no preventive intention of Maricalum Mining been to merely suspend him, it could have manifested this intention by at

suspension should last longer than 30 days. least informing him of his suspension. As it happened, he was not served with any notice relative to why

he was disallowed to report for work. The grievance meeting conducted on June 5, 1996 was allegedly

The NLRC, however, reversed the labor arbiters decision and called only after he had repeatedly requested reconsideration of his dismissal.
[5]
dismissed Decorions complaint. The reversal was premised on the finding that the case was litigated

solely on Decorions allegation that he was dismissed on April 11, 1996. However, during the grievance Maricalum Mining filed a Reply[9] dated April 22, 2004 in reiteration of its arguments.

meeting held on June 5, 1996, Decorion left it up to management to decide his fate, indicating that as of

that time, there was no decision to terminate his services yet. According to the NLRC, to consider the We reject the petition.

events that transpired after April 11, 1996 and make the same the basis for the finding of illegal dismissal

would violate Maricalum Minings right to due process. Sections 8 and 9 of Rule XXIII, Book V of the Implementing Rules provide as follows:

Section 8. Preventive suspension. --- The employer may place the

worker concerned under preventive suspension if his continued employment poses a
On petition for certiorari with the Court of Appeals, the decision of the labor arbiter was serious and imminent threat to the life or property of the employer or his co-
workers.
reinstated. The appellate court held that Decorion was placed under preventive suspension immediately

after he failed to attend the meeting called by his supervisor on April 11, 1996. At the time he filed the
complaint for illegal dismissal on July 23, 1996, he had already been under preventive suspension for
more than 100 days in violation of Sec. 9, Rule XXIII, Book V of the Omnibus Rules Implementing the
Labor Code (Implementing Rules) which provides that no preventive suspension shall last longer than 30
days.
Section 9. Period of Suspension --- No preventive suspension shall last
longer than thirty (30) days. The employer shall thereafter reinstate the worker in
his former or in a substantially equivalent position or the employer may extend the
period of suspension provided that during the period of extension, he pays the
wages and other benefits due to the worker. In such case, the worker shall not be
bound to reimburse the amount paid to him during the extension if the employer
decides, after completion of the hearing, to dismiss the worker. [Emphasis
supplied.]

The appellate court denied Maricalum Minings motion for reconsideration in its The Rules are explicit that preventive suspension is justified where the employees continued
[6]
Resolution dated May 16, 2003. employment poses a serious and imminent threat to the life or property of the employer or of the

employees co-workers. Without this kind of threat, preventive suspension is not proper.
In this petition, Maricalum Mining insists that Decorion was not dismissed but merely

preventively suspended on April 11, 1996. Citing the case of Valdez v. NLRC,[7] petitioner contends that In this case, Decorion was suspended only because he failed to attend a meeting called by his
constructive dismissal occurs only after the lapse of more than six (6) months from the time an employee supervisor. There is no evidence to indicate that his failure to attend the meeting prejudiced his employer
is placed on a floating status as a result of temporary preventive suspension from employment. Thus, it

goes on to argue, since Decorion was suspended for less than six (6) months, his suspension was legal.
or that his presence in the companys premises posed a serious threat to his employer and co-workers. The employees failure to attend a meeting. The allowable period of suspension in such a case is only 30 days
[10]
preventive suspension was clearly unjustified. as provided by the Implementing Rules.

What is more, Decorions suspension persisted beyond the 30-day period allowed by the
In sum, Maricalum Mining cannot feign denial of due process. Its theory is based entirely on its
Implementing Rules. In Premiere Development Bank v. NLRC,[11]private respondents suspension lasted for
erroneous reading of Valdez v. NLRC. The fact is that Decorions preventive suspension was unwarranted
more than 30 days counted from the time she was placed on preventive suspension on March 13, 1986 up
and unjustified and lasted for more than the period allowed by law.
to the last day of investigation on April 23, 1986. The Court ruled that preventive suspension which lasts
WHEREFORE, the instant petition is hereby DENIED. The challenged Decision and
beyond the maximum period allowed by the Implementing Rules amounts to constructive dismissal.
Resolution of the Court of Appeals respectively dated May 29, 2002 andMay 16, 2003 are hereby

AFFIRMED. Costs against petitioner.

Similarly, from the time Decorion was placed under preventive suspension on April 11,

1996 up to the time a grievance meeting was conducted on June 5, 1996, 55 days had already passed.
SO ORDERED.
Another 48 days went by before he filed a complaint for illegal dismissal on July 23, 1996. Thus, at the

time Decorion filed a complaint for illegal dismissal, he had already been suspended for a total of 103

days.

Maricalum Minings contention that there was as yet no illegal dismissal at the time of the filing

of the complaint is evidently unmeritorious. Decorionspreventive suspension had already ripened into

constructive dismissal at that time. While actual dismissal and constructive dismissal do take place in

different fashion, the legal consequences they generate are identical.

Decorions employment may not have been actually terminated in the sense that he was not

served walking papers but there is no doubt that he was constructively dismissed as he was forced to quit

because continued employment was rendered impossible, unreasonable or

unlikely[12] by Maricalum Minings act of preventing him from reporting for work.

Petitioners reliance on Valdez v. NLRC, supra, is misplaced. The legal basis of the ruling in

that case is the principle underlying Article 286 of the Labor Code which provides that the bona

fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months

shall not terminate employment. In contrast, the instant case involves the preventive suspension of an

employee not by reason of the suspension of the business operations of the employer but because of the