Easycall Communications Phils., Inc vs.

Edward King
Facts:
Petitioner Easycall Communications Phils., Inc was a domestic corporation engaged in the business of message
handling. On May 1992, petitioner, through its general manager, Roberto Malonzo, hired the services of respondent
as assistant to the general manager. He was given the responsibility of ensuring that the expansion plans outside
Metro Manila and Metro Cebu were achieved as soon as possible.
In an Memo dated Aug 14, Mr. RT Casas, respondents immediate superior, recommended his promotion to assistant
vice president for nationwide expansion. On December 22, respondent was appointed to the even higher position.
His promotion was based his performance for the preceding 6 months of his appointment. As VP, he became
responsible for the sales and rentals of pager units in the expansion areas. He also coordinated with the dealers.
Sometime in March 1993, Malonzo reviewed Kings sales performance. He also scrutinized status of petitioners
Nationwide Expansion program (NEP) which was under Kings responsibility. The management then confronted
respondent. On April 1993, Rockwell Gohu, petitioners deputy manager, talked to respondent and told him that
Malonzo wanted respondents resignation. He then wrote a letter confronting Malonzo.
On April 19 1993, he received a termination letter from Malonzo effective April 30 with the reason that the
management is no longer confident with him for the position hes occupying. Aggrieved, respondent filed a
complaint for illegal dismissal with NLRC. LA found the termination ground for loss of confidence valid. On
appeal, NLRC affirmed that decision of LA but ordered petitioner to indemnify respondent for lack of due process.
MR dismissed. Filed certiorari before CA.CA held NLRC lacked jurisdiction and that there was illegal dismissal.
Petitioner filed MR, denied. Hence, this petition.
Issue/s:
1.
2.

Whether or not NLRC had jurisdiction over the case of respondents illegal dismissal
Whether or not respondent Edward King was validly dismissed

Ruling:
SC ruled first with jurisdiction as it is decisive. If NLRC has no jurisdiction, then it would be unnecessary to talk
about the validity of dismissal.
Petitioner contends that it is SEC, and not the NLRC, who has jurisdiction since respondent was a corporate
officer. Is respondent a corporate officer? Here, petitioner failed to prove that respondent was a corporate officer.
Corporate officers are those officers who are given that character under the Corporation Code. Under
Section 25 thereof, the corporate officers are the president, secretary, treasurer and such other officers as
may be provided by the by-laws.
Since petitioner failed to satisfy burden of proof that was required of it, we cannot sanction its claim that respondent
was a corporate officer whose removal was cognizable by the SEC under PD 902-A and not by NLRC.
An office is created by the charter of the corporation and the officer is elected by the directors and
stockholders. On the other hand, employee occupies no office and generally is employed not by the action
of the directors or stockholders but by the managing officer of the corporation who also determines
compensation of employee.
Respondent was appointed VP by Malonzo, petitioners manager, not by the board of directors. It was also Malozo
who determined respondents compensation package. Thus, respondent was an employee, not a corporate officer.
The CA was correct in ruling that jurisdiction over the case was properly with NLRC, not with SEC.

Validity of the Dismissal

While loss of confidence is a valid ground for dismissing the employee, it should not be simulated. It must not be
indiscriminately used as a shield by the employer against a claim that the dismissal was arbitrary.
Loss of trust and confidence must be based on a willful breach and founded on cleary established facts. A
breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse as opposed
to carelessness, thoughtlessness and heedlessness. It cannot be from mere carelessness.
In this case, LAs finding, was that sales record of respondent at the time he spent work in the field were clear
indications of complainants inefficiency and/or negligence. Inefficiency implies incompetence, ignorance and
carelessness. They were not sufficient to claim a loss of confidence as a ground for dismissal.
Moreover, the promotion of the employee negates the employers claim that it has lost its trust and confidence on the
employee. The lack of cause in respondents dismissal was aggravated by the absence of due process. The twin
requirements of notice and hearing constitute the essential elements of due process.
The law requires the employer to furnish the employee sought to be dismissed 2 written notices before
termination can be legally effected:
1.
2.

Written notice apprising the employee of the particular acts for which his dismissal is sought to afford
him an opportunity to be heard and defend himself
Subsequent notice informing employers decision.

The procedure above is MANDATORY and its absence taints the dismissal with illegality. In the case at bar,
respondent was only served with 1 notice notice of his termination.
Petition is DENIED. CA is affirmed.