[G.R. No. 111639.

July 29, 1996]

MIDAS TOUCH FOOD CORPORATION, WILSON CHU & RAMON T. LUY, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and IRIS FE
ISAAC, respondents.
DECISION
HERMOSISIMA, JR., J.:
This is a petition seeking the reversal of the decision of the National Labor Relations Commission which declared the dismissal of private
respondent Iris Fe B.Isaac illegal.
Petitioner Midas Touch Foods Corp. (Midas) is a company which owns and operates the chain of West Villa Restaurants and other mini
outlets in various department stores throughout Metro Manila,[1] while petitioner Wilson Chu is its Chairman of the Board of Directors and
Ramon Luy its President and Chief Executive Officer.
On September 16, 1986, private respondent Iris Fe B. Isaac was hired by petitioner Midas as its Operations Manager, next in rank to the
President. As such, her task was to establish an efficient management scheme for the fast-food chain of West Villa Dimsum and Noodles, and
the formulation of company policies on recruitment and training of personnel, planning and expansion of business, purchasing of goods and
other related activities. She was given a free hand in all aspects of the operation and was allowed to bring in Alice Te to act as the
Commissary Manager, and part of the management team, since the company has a centralized commissary.
Respondent Isaac continued her functions as Operations Manager until she received a letter, dated June 15, 1987, terminating her
services as decided by the Executive Committee for alleged lack of confidence. On July 7, 1987, she was informed by petitioner Luy that the
Executive Committee had decided to recall the termination letter. She was allowed thereby to continue to act as the Operations Manager.
Sometime in October, 1987, Alice Te was investigated for allegedly stealing food supplies which were supposedly delivered to another
restaurant, named Food Center, located at the Port Area. This led to the eventual resignation of Alice Te on November 3, 1987. On the same
day, petitioner Luy claims that respondent Isaac admitted to him in one conversation they had that she owns the Food Center. In view of this
admission, petitioner Luy, through a letter, dated November 6, 1987, terminated the services of respondent Isaac on the ground of loss of
confidence. A portion of the said letter reads:[2]
"Among other considerations, you have admitted last Tuesday (November 3, 1987) in my presence, to owning the 'canteen' located near
the Port Area and spending two days operating it. Further, your commissary Manager, MS. ALICE TE, admitted Wednesday (Nov. 4, 1987) in
my presence and in the presence of other witnesses that she uses company premises and facilities in purchasing and transporting for your
'canteen' (Records, p. 34)."
On March 9, 1988, respondent Isaac filed a complaint with the Labor Arbiter for illegal dismissal against petitioners.
On November 23, 1990, the Labor Arbiter rendered judgment, the dispositive portion of which we quote hereinbelow:[3]
"WHEREFORE, finding the dismissal of complainant Iris Fe B. Isaac to be valid and justified, this case, impugning the legality of the same,
should be, as it is hereby DISMISSED.However, respondent Midas Touch Foods Corporation and its chairman of the Board, Wilson Chu and
President Ramon T. Luy, for reason afore-discussed, are hereby ordered to pay said complainant the total amount of P52,682.10, comprising
her one (1) month separation pay, proportionate 13th month pay, unpaid wages from November 1 to 6, 1987 and her sick and vacation
leave."
Petitioners and respondent Isaac appealed the aforequoted decision to the NLRC. Petitioners questioned the award of separation
pay. Wilson Chu and Ramon Luy asked that they be relieved of personal liabilities. Respondent Isaac, on the other hand, argued that the
Labor Arbiter committed an error in relying on the undocumented, self-serving and hearsay evidence which were gathered only after she
was terminated. She further stressed that there was lack of investigation prior to her termination. Petitioners failed to present their witnesses
during the hearing of the case.[4]
In its decision, rendered on July 20, 1993, the NLRC reversed the Labor Arbiter and decided:[5]
"WHEREFORE, premises considered, the appealed decision is modified by declaring the complainant as having been illegally
dismissed. Consequently, respondents are ordered to pay complainant the following amounts: 1) backwages for three years from
November 7, 1987; 2) separation pay in lieu of reinstatement equivalent to one month pay for every year of service, which is to be
computed as to include the period of three years she was awarded backwages; 3) proportionate 13th month pay for 1987; and 4) unpaid
wages from November 1 to 6, 1987. All other claims of the complainant are dismissed for lack of merit."
Petitioners now come before us assailing the decision of the NLRC, without filing any motion for reconsideration. While a motion for
reconsideration under the Rules of Court is required before a petition for certiorari is filed, the rules admit of certain exceptions, among which
is the finding that under the circumstances of the case, a motion for reconsideration would be useless.[6]
In this case, the NLRC had reversed the decision of the Labor Arbiter and no new issues were raised in this appeal. We find it quite
impossible for the NLRC to reverse itself under the foregoing facts and so, a motion for reconsideration will be deemed useless. Hence, by
reason of justice and equity, we resolve to settle the issues on the merits in order to avoid further delay.
We believe that the contrariety of views between the Labor Arbiter and the NLRC mandates us to consider the legality of the dismissal
of respondent Isaac as the primary issue to be resolved. In doing so, it is but appropriate that we lay the legal basis for the conclusions we
are to espouse in respect to the petition at hand.
The requisites of a valid dismissal are (1) the dismissal must be for any of the causes expressed in Article 282 of the Labor Code, and (2)
the employee must be given an opportunity to be heard and to defend himself.[7] Among the valid causes specified in Article 282 of the
Labor Code is loss of trust and confidence of an employee, which is the basis of the termination of the respondent. Nevertheless the
substantive and procedural laws must be strictly complied with before a worker can be dismissed from his employment[8] because what is at
stake is not only the employee's position but his livelihood.[9]
The acts committed by respondent Isaac, which resulted in her employer's loss of confidence were enumerated by petitioners as
follows:[10]
(a) Respondent Isaac and her partner in crime, Alice Te, used their highly confidential positions to occasionally convert the company's
stockroom as their personal supermarket to stuff their canteen, for free.
(b) Because of an apparent conflict in interest, Respondent Isaac who had a full and free control of the company's operations, never
expanded the company's operations to the Ermita portion of Manila, as she even admitted spending two days operating her canteen.
(c) Company properties were used by the partnership of respondent Isaac and Alice Te, not for the company's use, but for their own Food
Center:
(1) The company's service jeep, reported to have made deliveries to their Food Center, was used for more than the time ordinarily
consumed for official company use, with the permission of Alice Te and concurrence of respondent Isaac.
(2) Respondent Isaac, as the Operations Manager of petitioner company, signed a contract for lighted signboard whose size and color
specification (brown) correspond with that of her Food Center, which is irreconciliably different from respondent company's color
specification of white and green, at the expense of the company, who never benefited therefrom.
These accusations were not established by evidence in a fair and impartial hearing.
Indeed, an employee cannot be separated from his employment without according to him his constitutional right of due process,
consisting of proper notice and hearing, whether he be a rank and file or a managerial employee. Due process is wanting in the case at
bench. Respondent Isaac was not given notice of her impending dismissal, not even the chance to explain her side. The essence of due
process is that a party be afforded a reasonable opportunity to be heard and to submit any evidence he may have in support of his
defense.[11] The notice required actually consist of two parts to be separately served on the employee, to wit; 1) notice to apprise the
employee of the particular acts or omission for which his dismissal is sought; and 2) subsequent notice to inform him of the employer's decision
to dismiss him.[12] The letter given by petitioner Luy, dated November 6, 1987, terminating respondent Isaac's services was made effective
immediately. Even if no hearing is conducted, the requirement of due process would have been met where a chance to explain a party's
side of the controversy had been accorded him.[13]Failure to observe this procedure is fatal for this could raise doubt to the petitioner's claim
that the termination was for just cause. The want of due process may be clearly construed based on the termination letter given to respondent
Isaac, to quote:
"Acting in my capacity as President, I am hereby terminating your services as Operations Manager effective immediately on the ground of
loss of confidence."[14] (Italics Supplied)
Considering the foregoing facts, we hold that respondent Isaac was denied procedural due process.
The right of security of tenure cannot be eroded, let alone forfeited except upon a clear and convincing showing of a just and lawful
cause.[15] No less than the Constitution itself has guaranteed the State's protection to labor and its assurance to workers of security of tenure
in their employment.[16] The application of this rule encompasses both the rank and file as well as the managerial employees. It is in this light
that we are inclined to examine the validity of respondent Isaac's dismissal from employment, loss of confidence being the rationale therefor.
While Art. 282 of the Labor Code enumerates loss of confidence as one of the just causes for termination of an employee, it must
nonetheless rest on an actual breach of duty committed by the employee and not on the employer's caprices. [17] The guidelines for the
doctrine of loss of confidence to apply are:[18]
"(1) loss of confidence should not be simulated;
(2) it should not be used as a subterfuge for causes which are improper, illegal, or unjustified;
(3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and
(4) it must be genuine, not a mere afterthought to justify earlier action taken in bad faith."
While proof beyond reasonable doubt is not required, still substantial evidence is vital and the burden rests on the employer to establish
it.
In reversing the decision of the Labor Arbiter, the NLRC ruled, thus:[19]
"In the instant case, respondent Ramon T. Luy allegedly personally confronted the complainant about the ownership of a canteen and her
use of company personnel and facilities in operating the same. According to respondent Luy, complainant admitted to him about her
ownership of the canteen and the use of certain employees, among them Alice Te, in the purchasing of supplies for the said canteen.
But complainant denies this and explained that the truth of the matter is that the canteen is owned by her cousin and her sister and that
respondent Luy knew that she was helping her sister operate. Had there been an investigation made, the truth could have come out.
Assuming that complainant indeed owned the canteen, it has not been shown however, that because of this, she neglected her work as
Operations Manager of the respondent corporation, the same has not been established. As to the fact that complainant was engaged in
a business in competition with that of the respondents. We also noted that respondents' restaurants were located in Makati, Quezon City
and in San Juan, Metro Manila. The canteen being referred to as owned by the complainant is located in Port Area, Manila. We can not
see our way clear how the canteen can compete with the business of the respondents, considering their different locations. For this reason,
we believe that there was no sufficient basis for the respondents to lose their trust and confidence on the complainant. As to the use of the
corporation's personnel in delivering supplies to the canteen, this has not been sufficiently established either."
We agree with the NLRC.
The written statements of witnesses Tierry G. Jaymalin[20] and Marcial Manacop[21] in support of all the allegations of the petitioners
against respondents Isaac were unverified. These witnesses were not presented before the Labor Arbiter to testify in order to give respondent
a chance to cross-examine them. Those exhibits therefore, were hearsay and of no probative value. At any rate, allegations in the
affidavit[22] executed by petitioner Luy were unsubstantiated. Neither was petitioner Luy presented before the Labor Arbiter to testify on the
truth of the allegations written therein. Furthermore, those so called statements and affidavit were executed only after the termination of
respondent in an obvious attempt to circumvent the law, depriving her of the opportunity to defend herself and present evidence in her
defense.It has to be emphasized that this Court has held in innumerable cases, the case of People's Bank and Trust Company v. Leonidas[23] in
particular, that, where the adverse party is deprived of the opportunity to cross-examine the affiants, affidavits are generally rejected for
being hearsay, unless the affiant themselves are placed on the witness stand to testify thereon.
With respect to the alleged involvement of respondent Isaac in the purported pilferage of goods in the company, the same has not
likewise been established by petitioners. If, indeed, this be true, it is but proper for the petitioners to conduct a thorough investigation in order
to determine the persons actually liable therefor, instead of wantonly dismissing employees out of mere suspicion.
Anent the personal liabilities of petitioners Ramon Luy and Wilson Chu, it is their contention that they cannot be held jointly or solidarily
liable for the simple reason that they are not respondent's employers.
Indeed, no less than the public respondent, NLRC, in its Comment[24] admitted that petitioners are correct by stating that:
"The present petition disputes the fact that petitioners Chu and Luy were held jointly and severally liable with petitioner corporation in the
payment of the monetary awards to private respondent on the ground that said individual petitioners, being only the president (Luy) and
chairman of the board of directors (Chu) of petitioner corporation, are not the employers of the private respondent.
It is submitted that petitioners' contention is correct. The individual petitioners cannot be held to be personally liable since they are not the
employers of private respondent."
As we have held in the case of Tramat Mercantile, Inc. vs. Court of Appeals,[25] personal liability of a corporate director, trustee or officer
along (although not necessarily) with the corporation may so validly attach, as a rule, only when 1. He assents (a) to a patently unlawful act
of the corporation, or (b) for bad faith or gross negligence in directing its affairs, or (c) for conflict of interest, resulting in damages to the
corporation, its stockholders or other persons; x x x.
Moreover, Section 31 of the Corporation Code provides that:
"SEC. 31. Liability of directors, trustees or officers. Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts
of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or
pecuniary interest in conflict with their duty as such directors, or trustees shall be liable jointly and severally for all damages resulting
therefrom suffered by the corporation, its stockholders or members and other persons." (Italics supplied)
A corporate officer is not personally liable for the money claims of discharged corporate employees unless he acted with evident
malice and bad faith in terminating their employment.[26] No bad faith can be attributed to both petitioners Luy and Chu. Neither were they
employers of respondent Isaac. Hence, they should not be made liable for the payment of damages to respondent.
WHEREFORE, the Decision of the National Labor Relations Commission is AFFIRMED, BUT WITH THE MODIFICATION that only petitioner
corporation should be made solely liable for all the monetary awards considering that petitioners Luy and Chu were not the employers but
merely the President and Chairman of the Board respectively.
Costs against petitioner corporation.
SO ORDERED.

G.R. No. 97196 January 22, 1993

CHINA CITY RESTAURANT CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, MONICO DIETO and JUNILITO CABLAY, respondents.
Federico C. Leynes for petitioner.
Corazon Agustin-Ongbueco for private respondent.

CAMPOS, JR., J.:

Petitioner seeks to annul the Resolutions ** of the National Labor Relations Commission (NLRC) dated November 29, 1990 in NLRC NCR AC
No. 00057 (NLRC NCR CASE No. 00-06-02857-69) entitled "Monico T. Dieto and Junilito Cablay vs. China City Restaurant" which affirmed the
decision rendered by Labor Arbiter Eduardo Magno declaring the dismissal of private respondents illegal, but with the modification that
instead of reinstatement private respondents be granted separation pay with full backwages.
The antecedent facts are as follows:
Petitioner China City Restaurant (petitioner, for brevity) employed private respondents Monico Dieto and Julinito Cablay (private
respondents, for brevity) as chief steamer and roasting helper, respectively.
Sometime in 1988, the China City Employees Union, with Monico Dieto as President, was organized and thereafter demanded recognition
from petitioner.
On October 17, 1988, Abe Fuentes, a steamer helper at petitioner's restaurant, was detained at the Makati Municipal Jail for allegedly
stealing dried scallops worth two thousand pesos (P2,000.00) belonging to the petitioner. On January 20, 1989, after posting bail paid by the
petitioner, Abe Fuentes gave a statement at the Intelligence and Special Operations Group, SPD, implicating the private respondents.
Abe Fuentes alleged that as early as April 1988, he, in conspiracy with private respondents, had been bringing out from the restaurant dried
scallops wrapped in plastic, by mixing them with leftovers thrown into the thrash can. They were sold at Ongpin, Binondo, Manila. They
would then divide the proceeds among themselves, with the private respondents getting the lion's share. A criminal charge for qualified
theft was thereafter filed against the private respondents.
On March 27, 1989, an amended information was filed to include private respondents as co-accused in the qualified theft case filed
against Abe Fuentes. Later, Abe Fuentes turned state witness.
On March 22, 1989, petitioner, through a memorandum, terminated the services of the private respondents on the ground of loss of trust
and confidence.
Thereafter a complaint for illegal dismissal was filed by the private respondents against the petitioner with the Department of Labor and
Employment.
Private respondents professed ignorance of the crime exposed by Abe Fuentes. They claimed that when they visited Abe Fuentes at his
detention cell, the latter allegedly told them that Jose Polotan, the restaurant administrator, was forcing him to name the private
respondents as his co-conspirators but that he allegedly refused. Later, however, private respondents were surprised to learn that Abe
Fuentes was released on bail at the instance of the petitioner. They vigorously claimed that they were implicated in the theft incident
because of their being union members.
On January 17, 1990, after investigation and submission by the parties of their respective evidence and position papers, the Labor Arbiter
promulgated his decision, the dispositive portion of which is quoted hereunder as follows:
Wherefore, judgment is hereby rendered declaring the dismissal of the complainants as illegal. Respondent is hereby
ordered to immediately reinstate complainants to their former positions without loss of seniority rights with full backwages
from May 20, 1989 until reinstatement plus attorney's fees equivalent to 10% of the amount recoverable by the
complainants.
The claim for moral and exemplary damages are (sic) hereby dismissed for lack of factual and legal basis.
SO ORDERED.1
Dissatisfied with the decision, petitioner appealed to the NLRC.
In its Resolution dated November 29, 1990, the NLRC affirmed the decision of the Labor Arbiter with the modification of granting private
respondents the alternative relief of separation pay plus backwages instead of reinstatement.
Petitioner filed a motion for reconsideration of the NLRC resolution on January 4, 1991, but the same was denied on January 22, 1991.2
Hence, this petition.
The grounds relied upon by the petitioner for the issuance of the writ are the following:
1
THE RESPONDENT COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
HOLDING THAT THE PETITIONER FAILED TO OBSERVE DUE PROCESS IN DISMISSING THE PRIVATE RESPONDENTS WHEN, IN
TRUTH AND IN FACT, AND AS ENUNCIATED IN BLTBCo vs. NLRC, 166 SCRA 721, THEY WERE FULLY ACCORDED THEIR RIGHT
TO DUE PROCESS OF LAW BECAUSE THEIR DISMISSAL WAS EFFECTED ON THE BASIS OF THE PRELIMINARY INVESTIGATION
FINDINGS OF THE CITY FISCAL WHICH FOUND THEM TO BE
CO-CONSPIRATORS IN THE CRIME QUALIFIED THEFT.
2
THE RESPONDENT COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
DECLARING THE DISMISSAL OF PRIVATE RESPONDENTS ILLEGAL ON THE PREMISE THAT THEY WERE NOT ACCORDED DUE
PROCESS AND IN CONSEQUENTLY AWARDING THE UNDULY HARSH RELIEF OF SEPARATION PAY WITH BACKWAGES IN
COMPLETE DISREGARD OF THE CASE OF WENPHIL CORPORATION vs. NLRC, 170 SCRA 69, WHICH MERELY GRANTED A
P1,000.00 SANCTION TO AN EMPLOYEE DISMISSED WITHOUT DUE PROCESS.3
Meanwhile, on March 25, 1991, private respondents were acquitted by the Regional Trial Court of the charge of qualified theft on the
ground of reasonable doubt.4
The issue in this petition is whether or not public respondent committed grave abuse of discretion in holding the dismissal of private
respondents illegal for lack of due process of the law, and in ordering petitioner to pay them separation pay plus backwages.
It is the petitioner's contention that the preliminary investigation conducted by the City Fiscal on the qualified theft charge against private
respondents were sufficient compliance with the due process requirement of the law. Invoking Batangas Laguna Tayabas Bus Co.
(BLTBCo.) vs. NLRC,5 it contends that an employee can be dismissed on the basis of the findings of the City Fiscal during the preliminary
investigation of the criminal complaint. Petitioner claims that in such case due process does not require the employer to conduct a
separate investigation as this would only be a duplication of the City Fiscal's investigation upon which the employer has a right to rely on.6
The NLRC maintains otherwise, stating that they were not afforded the formal investigation required and that the fiscal's investigation could
not legally take its place.7
Due process of law simply means giving opportunity to be heard before judgment is rendered. "Due process of law is a law which hears
before it condemns, which proceeds upon inquiry and renders judgment only after trial".8 In fact, this Court has held that there is no
violation of due process even if no hearing was conducted, where the party was given a chance to explain his side of the controversy.
What is frowned upon is the denial of the opportunity to be heard.9 As a general rule, the preliminary investigation conducted by the City
Fiscal is sufficient compliance with procedural due process because the accused is given ample opportunity to be heard.
As stated in the BLTBCo case:10
. . . the criminal charges initiated by the company against private respondents and the finding after preliminary
investigation of prima facie guilt of the offense charged constitute substantial evidence sufficient to warrant a finding by
the Labor Tribunal of the existence of a just cause for their termination based on loss of trust and confidence. . . .
. . . For the company to conduct its own investigation would only be a duplication of the JAGO's and later, the city
fiscal's investigation, . . . said officials being the persons charged with this special function.
However, the petitioner cannot seek refuge in the BLTBCo case to support its petition. As correctly observed by the Solicitor General, in that
case there was a mass fraud covering a period of ten months involving thirty-six (36) employees and volumes of documentary evidence.
The City Fiscal's finding of a prima facie case of estafa against the employees was based on the affidavits of witnesses and on the
voluminous documentary evidence. There was, therefore, basis for the company to dismiss the employees for loss of confidence without
necessarily conducting a formal investigation separate from the preliminary investigation. 11
In the present case, however, the fiscal's finding of prima facie case of qualified theft against private respondents was based solely on the
affidavit executed by the original accused-turned state witness, Abe Fuentes, to the effect that he conspired with the private respondents
in the theft of dried scallops. The only connection of the private respondents to the charge is the implication made by Abe Fuentes. It is
therefore necessary to scrutinize this implication. The Regional Trial Court which acquitted the private respondents of the crime of qualified
theft doubted the veracity of Abe Fuentes' testimony against them because: (a) the implication was made more than three (3) months
after Abe Fuentes' arrest and after a series of talks with petitioner's representatives; (b) the bond for his (Abe Fuentes') temporary release
was put up by petitioner upon his assurance that he would cooperate with petitioner; (c) the implicatory testimony of Abe Fuentes was not
substantiated by some other evidence, thus rendering it of no provative value; (d) the private respondents are officers of the union with
whom petitioner is at odds. 12
Aside from Abe Fuentes' affidavit and the criminal complaint/information, there is no other evidence shown by petitioner positively linking
private respondents to the alleged theft committed.
Due process in administrative proceedings requires that "evidence must be substantial, and substantial evidence means evidence that a
reasonable mind might accept as adequate to support a conclusion".13
The information for qualified theft, based solely on the affidavit of Abe Fuentes, implicating the private respondents is not the substantial
evidence which a reasonable mind would as sufficient to conclude that private respondents are not trustworthy, and thus can be legally
dismissed for loss of trust. Moreover, the circumstances found by the trial court as leading to Abe Fuentes' implication of the private
respondents tend to show that the basis for the latter's dismissal was not petitioner's loss of trust and confidence but rather its retaliation
against them for their union activities.
Furthermore, even the Labor Arbiter found that "A close scrutiny of the facts and evidences attached to the record will reveal that the
implication of the complainants by Abe Fuentes in the commission of the crime of qualified theft is not enough basis for the respondent to
terminate them. . . . Since they failed to establish sufficient basis for concluding that the complainants were really in connivance with Abe
Fuentes in the commission of the qualified theft, the dismissal becomes illegal".14
The findings of the lower court in the theft case and the decision of the Labor Arbiter that no sufficient basis exists to justify a dismissal on the
ground of loss of confidence deserves Our consideration. The factual findings of the lower court and the Labor Arbiter with respect to this
point are conclusive upon this Court.
Although the BLTBCo. case held that the preliminary investigation is sufficient compliance with due process without needing separate
formal investigation to be conducted by the company for dismissal of erring employees, We do not find the ruling in said case as all
embracing because as held in San Miguel Corporation vs. NLRC, 15 the requirements for due process are two-fold: and We quote:
Under the Labor Code, as amended, the requirements for the lawful dismissal of an employee by his employer are two-
fold: the substantive and the procedural. Not only must the dismissal be for a valid or authorized cause as provided by
law [Arts. 279, 281, 282-284], but the rudimentary requirements of due process — notice and hearing — must also be
observed before an employee may be dismissed [Art. 277(b)]. One cannot go without the other, for otherwise the
termination would, in the eyes of the law, be illegal.
In this case, there is no sufficient basis to support the belief that a just and lawful cause exists. The just and lawful cause constitutes the
substantive aspect of due process. Lack of just causes render the dismissal illegal.
In a long line of cases, this Court stressed that the right of an employer to dismiss employees on the ground that it has lost its trust and
confidence in them must not be exercised arbitrarily and without just cause; that although the dropping of a criminal prosecution for an
employee's alleged misconduct does not bar his dismissal and proof beyond reasonable doubt is not necessary to justify the same, still the
basis thereof must be clearly and convincingly established.16 Although the power to dismiss is a normal prerogative of the employer, the
same is not without limitations. The right of the employer must not be exercised arbitrarily and without just cause. Otherwise, the
constitutional mandate of security of tenure of the workers would be rendered nugatory.17
In General Bank and Trust Co. vs. Court of Appeals, 18 this Court set forth the guidelines for the doctrine of loss of confidence to apply, to
wit:
. . . However, loss of confidence should not be simulated. It should not be used as a subterfuge for causes which are
improper, illegal, or unjustified. Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence
to the contrary. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith.
In this case, the only basis for charging the private respondents with qualified theft is the affidavit of Abe Fuentes implicating them. There is
no evidence on record to support or show any connection of the private respondents to the charge of qualified theft. As found by the trial
court, Abe Fuentes implicated the private respondents only after a series of conferences with petitioner's representatives, and after
petitioner facilitated his release from jail through the former's answering for his bail bond.
For loss of trust and confidence to be a valid ground for the dismissal of employees, it must be substantial and not arbitrary, whimsical,
capricious or concocted.
Irregularities or malpractice should not be allowed to escape the scrunity of this Court. Solicitude for the protection of the rights of the
working class are of prime importance. Although this is not license to disregard the rights of management, still the Court must be wary of the
ploys of management to get rid of employees it considers as undesirable.
Petitioner goes on to contend that even if private respondents were dismissed without due process the award of separation pay with
backwages is unduly harsh. It cites the case of Wenphil, 19 where an indemnity of only P1,000.00 was awarded to the private respondent as
compensation for the failure of petitioner to give formal notice and to conduct investigation. We find the Wenphil case not applicable to
the case at bar because in the former case (Wenphil case) the company was able to conclusively show that the dismissed employee was
guilty of grave misconduct and insubordination which We do not find in this case.
Employees who are illegally dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to
their full backwages.20
However, when reinstatement to their former positions is not possible under the circumstances, an award equivalent to three years
backwages plus separation pay to compensate for their illegal separation is thus proper. 21
The circumstances prevailing in this case do not warrant the reinstatement of the illegally dismissed private respondents. Antagonism and
imputations of bad faith caused a severe strain in the relationship between petitioner and private respondents, that a more equitable
disposition would be an award of separation pay, in lieu of reinstatement, plus backwages for not more than three years without
qualification and deduction.
IN VIEW OF THE FOREGOING, the petition is DISMISSED. The Resolution of the National Labor Relations Commission dated November 29, 1990
is hereby AFFIRMED in toto with the modification that the amount of backwages be reckoned from the actual date of dismissal up to the
date of this decision which in no case should exceed three (3) years. With costs.
SO ORDERED.

TECHNOL EIGHT PHILIPPINES CORPORATION, G.R. No. 187605

Petitioner,
Present:

- versus - CARPIO, J., Chairperson,

BRION,
DEL CASTILLO,
PEREZ, and
NATIONAL LABOR RELATIONS COMMISSION AND *MENDOZA, JJ.
DENNIS AMULAR,
Respondents. -- -

Promulgated:
April 13, 2010
x----------------------------------------------------------------------------------------x

DECISION

BRION, J.:

For resolution is the present Petition for Review on Certiorari[1] addressing the decision[2] and resolution[3] of the Court of Appeals (CA) of
November 18, 2008 and April 17, 2009, respectively, in CA-G.R. SP No. 100406.[4]

THE ANTECEDENTS

The facts are summarized below.

The petitioner Technol Eight Philippines Corporation (Technol), located at 127 East Main Avenue, Laguna Technopark, Bian, Laguna,
manufactures metal parts and motor vehicle components. It hired the respondent Dennis Amular (Amular) in March 1998 and assigned him
to Technols Shearing Line, together with Clarence P. Ducay (Ducay). Rafael Mendoza (Mendoza) was the lines team leader.
On April 16, 2002 at about 5:30 p.m., Mendoza went to the Surf City Internet Caf in Balibago, Sta. Rosa, Laguna. As Mendoza was leaving the
establishment, he was confronted by Amular and Ducay who engaged him in a heated argument regarding their work in the shearing line,
particularly Mendozas report to Avelino S. De Leon, Jr. (De Leon), Technols Production Control and Delivery (PCD) assistant supervisor, about
Amulars and Ducays questionable behavior at work. The heated argument resulted in a fistfight that required the intervention of the
barangay tanods in the area.

Upon learning of the incident, Technols management sent to Amular and Ducay a notice of preventive suspension/notice of discharge
dated May 18, 2002[5]advising them that their fistfight with Mendoza violated Section 1-k of Technols Human Resource Department (HRD)
Manual. The two were given forty-eight (48) hours to explain why no disciplinary action should be taken against them for the incident. They
were placed under preventive suspension for thirty (30) days, from May 19, 2002 to June 17, 2002 for Ducay, and May 21, 2002 to June 20,
2002 for Amular. Amular submitted a written statement on May 20, 2002.[6]

Thereafter, Amular received a notice dated June 8, 2002[7] informing him that Technol management will conduct an administrative hearing
on June 14, 2002.He was also given two (2) days to respond in writing to the statements attached to and supporting the notice. A day before
the hearing or on June 13, 2002, Amular filed a complaint for illegal suspension/constructive dismissal with a prayer for separation pay,
backwages and several money claims, against Technol.Amular failed to attend the administrative hearing. On July 4, 2002, Technol sent him
a notice of dismissal.[8]

Before the Labor Arbiter, Amular alleged that in the afternoon of April 16, 2002, while he and his co-employee Ducay were walking around
the shopping mall in Balibago, Sta. Rosa, Laguna, they incidentally saw Mendoza with whom they wanted to discuss some personal
matters. When they approached Mendoza, the latter raised his voice and asked what they wanted from him; Amular asked Mendoza what
the problem was because Mendoza appeared to be always angry at him (Amular). Mendoza instead challenged Amular and Ducay to a
fistfight and then punched Amular who punched Mendoza in return. Thereafter, a full-blown fistfight ensued until the barangay tanods in the
area pacified the three.

Amular further alleged that he was asked by his immediate supervisor to submit a report on the incident, which he did on April 18,
2002.[9] Subsequently, Amular, Mendoza and Ducay were called by Technol management to talk to each other and to settle their differences;
they agreed and settled their misunderstanding.

THE COMPULSORY ARBITRATION DECISIONS

On November 18, 2003, Executive Labor Arbiter Salvador V. Reyes rendered a decision [10] finding that Amulars preventive suspension and
subsequent dismissal were illegal. He ruled that Amulars preventive suspension was based solely on unsubscribed written statements executed
by Mendoza, Rogelio R. Garces and Mary Ann Palma (subscribed only on August 8, 2002) and that Mendoza, Amular and Ducay had settled
their differences even before Amular was placed under preventive suspension. With respect to Amulars dismissal, the Arbiter held that Technol
failed to afford him procedural due process since he was not able to present his side because he had filed a case before the National Labor
Relations Commission (NLRC) at the time he was called to a hearing; Technol also failed to substantiate its allegations against Amular; the
fistfight occurred around 200 to 300 meters away from the work area and it happened after office hours. Arbiter Reyes awarded Amular
separation pay (since he did not want to be reinstated), backwages, 13th month pay, service incentive leave pay and attorneys fees in the
total amount of P158,987.70.

Technol appealed to the NLRC. In its decision promulgated on March 30, 2005,[11] the NLRC affirmed the labor arbiters ruling. It found that
Amular was unfairly treated and subjected to discrimination because he was the only one served with the notice to explain and placed
under preventive suspension; his co-employee Ducay who was also involved in the incident was not. Technol moved for reconsideration, but
the NLRC denied the motion in a resolution rendered on May 30, 2007.[12] Technol thereafter sought relief from the CA through a petition
for certiorari under Rule 65 of the Rules of Court.[13]

THE CA DECISION

In its decision promulgated on November 18, 2008, the CA found no grave abuse of discretion on the part of the NLRC when it affirmed the
labor arbiters ruling that Amular was illegally dismissed. While the appellate court noted that Amular was dismissed on the ground of serious
misconduct, a just cause for employee dismissal under the Labor Code,[14] it opined that Technol failed to comply with the jurisprudential
guidelines that misconduct warranting a dismissal: (1) must be serious; (2) must relate to the performance of the employees duties; and (3)
must show that the employee has become unfit to continue working for the employer.[15]
The appellate court pointed out that the mauling incident occurred outside the company premises and after office hours; it did not in any
manner disrupt company operations nor pose a threat to the safety or peace of mind of Technol workers; neither did it cause substantial
prejudice to the company. It explained that although it was not condoning Amulars misconduct, it found that the penalty of dismissal
imposed by Technol on Amular was too harsh and evidently disproportionate to the act committed.[16] The CA denied the motion for
reconsideration Technol subsequently filed;[17] hence, the present petition.[18]
THE PETITION

Technol posits that the CA gravely erred in ruling that Amular was illegally dismissed, contending that Amular was discharged for violation of
Section 1-k of its HRD Manual which penalizes the commission of a crime against a co-employee. It submits that Section 1-k of the HRD Manual
is a reasonable company rule issued pursuant to its management prerogative. It maintains that the case should have been examined from
the perspective of whether the company rule is reasonable and not on the basis of where and when the act was committed, or even whether
it caused damage to the company. It adds that the manual does not distinguish whether the crime was committed inside or outside work
premises or during or after office hours. It insists that if the rule were otherwise, any employee who wishes to harm a co-employee can just
wait until the co-employee is outside the company premises to inflict harm upon him, and later argue that the crime was committed outside
work premises and after office hours. It submits that the matter assumes special and utmost significance in this case because Amular inflicted
physical injuries on a supervisor. In any event, Technol argues that even if the misconduct was committed outside company premises, the
perpetrator can still be disciplined as long as the offense was work-related, citing Oania v. NLRC[19] and Tanala v. NLRC[20] in support of its
position.

Technol bewails the CAs appreciation of the implication of Amulars misconduct in the workplace, especially the courts observation that it
did not cause damage to the company because it did not disrupt company operation, that it did not create a hostile environment inside
the company, and that the fight was nipped in the bud by the timely intervention of those who saw the incident.[21] Technol insists that it had
to order Amulars dismissal in order to uphold the integrity of the company rules and to avoid the erosion of discipline among its
employees. Also, it disputes the CAs conclusion that the fact that Amulars liability should be mitigated because the fight was nipped in the
bud. It submits that Mendoza had already sustained grave injuries when the mauling was stopped.

Further, Technol maintains that the CA gravely erred in going beyond the issues submitted to it, since the NLRC decision only declared Amulars
dismissal illegal on the ground that he was the only one subjected to disciplinary action and that the company merely relied on the written
statements of Amulars co-employees.

On the rejection by the CA of the statements of Amulars co-employees regarding the incident, Technol contends that the statements of the
witnesses, together with Amulars admission, constitute substantial evidence of guilt. It points out that the statement of Mendoza on the matter
submitted during the company investigation and before the labor arbiter was not a stand alone statement; Mendozas statement was
corroborated by the statements of Rogelio R. Garces and Mary Ann Palma, verified under oath in the reply [22] it submitted to the arbiter. The
statements were all in their handwriting, indicating that they were not pro forma or prepared on command; a medical certificate[23] and a
barangay report[24] were likewise submitted.

Technol likewise disputes the NLRCs conclusion that Amular was discriminated against and unfairly treated because he was the only one
preventively suspended after the mauling incident. It maintains that from the records of the case and as admitted by Amular himself in his
position paper,[25] his co-employee Ducay was also preventively suspended.[26] That Mendoza was not similarly placed under preventive
suspension was considered by Technol as an exercise of its management prerogative, since the circumstances surrounding the incident
indicated the existence of a reasonable threat to the safety of Amulars co-employees and that Mendoza appeared to be the victim of
Amulars and Ducays assault.

THE CASE FOR AMULAR

In his Comment filed on August 12, 2009,[27] Amular asks that the petition be dismissed for utter lack of merit. He admits that the mauling
incident happened, but claims however that on April 18, 2002, the Technols management called Mendoza, Ducay, and him to a meeting,
asked them to explain their sides and thereafter requested them to settle their differences; without hesitation, they agreed to settle and even
shook hands afterwards. He was therefore surprised that on May 18, 2002, he received a memorandum from Technols HRD charging him and
his co-employee Ducay for the incident. Without waiting for an explanation, Technols management placed him under preventive suspension,
but not Ducay. Adding insult to injury, when Amular followed up his case while on preventive suspension, he was advised by the HRD manager
to simply resign and accept managements offer of P22,000.00, which offer was reiterated during the mandatory conference before the labor
arbiter.
Amular particularly laments that his employment was terminated while the constructive dismissal case he filed against the company was still
pending. He posits that his employment was terminated first before he was informed of the accusations leveled against him an indication of
bad faith on the part of Technol.

Amular asks: if it were true that the mauling incident was a serious offense under company policy, why did it take Technol a month to give
him notice to explain the mauling incident? He submits that the memorandum asking him to explain was a mere afterthought; he was
dismissed without giving him the benefit to be informed of the true nature of his offense, thus denying him his right to be heard.

Finally, Amular questions the propriety of the present petition contending that it only raises questions of fact, in contravention of the rule that
only questions of law may be raised in a petition for review on certiorari.[28] He points out that the findings of facts of the labor tribunals and
the CA are all the same and therefore must be given respect, if not finality.[29]

THE RULING OF THE COURT

The Procedural Issue

We find no procedural impediment to the petition. An objective reading of the petition reveals that Technol largely assails the correctness of
the conclusions drawn by the CA from the set of facts it considered. The question therefore is one of law and not of fact, as we ruled
in Cucueco v. Court of Appeals.[30] Thus, while there is no dispute that a fight occurred between Amular and Ducay, on the one hand, and
Mendoza, on the other, the CA concluded that although Amular committed a misconduct, it failed to satisfy jurisprudential standards to
qualify as a just cause for dismissal the conclusion that Technol now challenges. We see no legal problem, too, in wading into the factual
records, as the tribunals below clearly failed to properly consider the evidence on record. This is grave abuse of discretion on the part of the
labor tribunals that the CA failed to appreciate.
The Merits of the Case

The CA misappreciated the true nature of Amulars involvement in the mauling incident. Although it acknowledged that Amular committed
a misconduct, it did not consider the misconduct as work-related and reflective of Amulars unfitness to continue working for Technol. The
appellate courts benign treatment of Amulars offense was based largely on its observation that the incident happened outside the company
premises and after working hours; did not cause a disruption of work operations; and did not result in a hostile environment in the
company. Significantly, it did not condone Amulars infraction, but it considered that Amulars dismissal was a harsh penalty that is
disproportionate with his offense. It found support for this liberal view from the pronouncement of the Court in Almira v. B.F. Goodrich
Philippines, Inc.,[31] that where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited
with a consequence so severe.

The record of the case, however, gives us a different picture. Contrary to the CAs perception, we find a work-connection in Amular's and
Ducays assault on Mendoza. As the CA itself noted,[32] the underlying reason why Amular and Ducay confronted Mendoza was to question
him about his report to De Leon Technols PCD assistant supervisor regarding the duos questionable work behavior. The motivation behind the
confrontation, as we see it, was rooted on workplace dynamics as Mendoza, Amular and Ducay interacted with one another in the
performance of their duties.

The incident revealed a disturbing strain in Amular's and Ducays characters the urge to get even for a perceived wrong done to them and,
judging from the circumstances, regardless of the place and time. The incident could very well have happened inside company premises
had the two employees found time to confront Mendoza in the workplace as they intimated in their written statements.[33] Having been the
subject of a negative report regarding his work must have rankled on Amular that he resolved to do something about it; thus, he
confronted Mendoza.

From the records, Ducay appeared to have cooperated with Amular in the violent confrontation with Mendoza. Ducay, however, resigned
on June 7, 2002 a week before the filing of the complaint.[34] Hence, Technol did not act against him a move that is within its prerogative to
make.
In an obvious effort to mitigate his involvement in the mauling incident, Amular claimed in the administrative proceedings that while he and
Ducay were walking around the shopping mall in Balibago, Sta. Rosa, Laguna, they incidentally saw their co-employee Mendoza with whom
they wanted to clear some personal matters.[35] We find this claim a clear distortion of what actually happened. Again, based on their written
statements,[36] Amular and Ducay purposely set out for the Balibago commercial area on April 16, 2002 looking for Mendoza. It was not an
incidental or casual encounter. They sought Mendoza out and confronted him regarding what they perceived as Mendozas negative
attitude towards them or pamamarako as Mendoza described it.[37] Considering the subject Amular and Ducay raised with Mendoza, it is not
surprising that they had a heated verbal exchange (mostly between Amular and Mendoza) that deteriorated into a fistcuff fight,
with Mendoza at the losing end as he suffered injuries from the blows he received.
Amular and Ducay point to Mendoza as the proximate cause of the fight because he challenged them to a one-on-one (isa-isa lang)
bout.[38] Looking back at the reason why Amular and Ducay were at the mall in the first place, this attributed causation hardly makes sense. To
reiterate, they were purposely there to confront Mendoza about their work-related problem. They waited for him at the place where they
expected him to be. When Mendoza appeared, they accosted him and put into motion the entire sorry incident.

Under these circumstances, Amular undoubtedly committed a misconduct or exhibited improper behavior that constituted a valid cause for
his dismissal under the law [39] and jurisprudential standards.[40] The circumstances of his misdeed, to our mind, rendered him unfit to continue
working for Technol; guilt is not diminished by his claim that Technols management called the three of them to a meeting, and asked them
to explain their sides and settle their differences, which they did.[41] Mendoza significantly denied the alleged settlement, maintaining that
while they were summoned by De Leon after the incident, he could not shake hands and settle with Amular and Ducay since they did not
even apologize or ask forgiveness for what they did.[42] We do not find Mendozas denial of Amulars claim unusual as Mendoza would not
have stood his ground in this case if a settlement had previously been reached. That a meeting had taken place does not appear disputed,
but a settlement cannot be inferred simply because a meeting took place.

Neither do we believe that Amular was discriminated against because he was not the only one preventively suspended. As the CA itself
acknowledged, Ducay received his notice of preventive suspension/notice of charge[43] on May 19, 2002 while Amular received his on May
21, 2002. These notices informed them that they were being preventively suspended for 30 days from May 19, 2002 to June 17, 2002 for Ducay,
and May 21, 2002 for Amular.[44]

Thus, Amular was not illegally dismissed; he was dismissed for cause.

The Due Process Issue

The labor arbiter ruled that Technol failed to afford Amular procedural due process, since he was not able to present his side regarding the
incident; at the time he was called to a hearing, he had already filed the illegal dismissal complaint. [45] The NLRC, on the other hand, held
that the memorandum terminating Amulars employment was a mere formality, an afterthought designed to evade company liability since
Amular had already filed an illegal dismissal case against Technol.[46]

We disagree with these conclusions. The notice of preventive suspension/notice of discharge served on Amular and Ducay required them to
explain within forty-eight (48) hours why no disciplinary action should be taken against them for their involvement in the mauling
incident.[47] Amular submitted two written statements: the first received by the company on May 19, 2002[48] and the other received on May
20, 2002.[49] On June 8, 2002, Technol management sent Amular a memorandum informing him of an administrative hearing on June 14, 2002
at 10:00 a.m., regarding the charges against him.[50] At the bottom left hand corner of the memorandum, the following notation
appears: accept the copy of notice but refused to receive, he will study first. A day before the administrative hearing or on June 13, 2002,
Amular filed the complaint for illegal suspension/dismissal[51] and did not appear at the administrative hearing. On July 4, 2002, the company
sent Amular a notice of dismissal.[52]

What we see in the records belie Amulars claim of denial of procedural due process. He chose not to present his side at the administrative
hearing. In fact, he avoided the investigation into the charges against him by filing his illegal dismissal complaint ahead of the scheduled
investigation. Under these facts, he was given the opportunity to be heard and he cannot now come to us protesting that he was denied
this opportunity. To belabor a point the Court has repeatedly made in employee dismissal cases, the essence of due process is simply an
opportunity to be heard; it is the denial of this opportunity that constitutes violation of due process of law.[53]

In view of all the foregoing, we find the petition meritorious.

WHEREFORE, premises considered, we hereby GRANT the petition. The assailed decision and resolution of the Court of Appeals
are REVERSED and SET ASIDE. The complaint for illegal dismissal is DISMISSED for lack of merit. Costs against respondent AMULAR.

SO ORDERED.

[G.R. No. 117453. June 26, 1998]

AUTOBUS WORKERS UNION (AWU) and RICARDO ESCANLAR, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and MR. ROBERT
ONG, respondents.
DECISION
MARTINEZ, J.:
This petition for certiorari and prohibition assails the Resolution dated July 12, 1994 of the respondent National Labor Relations
Commission which affirmed the decision of the Labor Arbiter, the dispositive portion of which reads:
CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered finding complainants dismissal valid and in accordance with
procedural due process.
As financial assistance, however, respondents are hereby ordered to give complainant the sum of P5,000.00.
SO ORDERED.[1]
and the Resolution dated October 3, 1994 denying the motion for reconsideration of petitioner.
Petitioner Ricardo E. Escanlar worked with Autobus Industries, Inc. (Autobus for brevity) as a Cutting Machine Operator since January 8,
1981 with a salary of P162.16 per day. He was the recipient of two (2) Plaques of Appreciation as Model Employee in 1987 and as Valuable
Employee in 1988. He was later elected President of the Autobus Workers Union (AWU), the union for the rank and file employees.
On January 29, 1993, Engr. Zosimo Prospero Chavez, Production Manager of Autobus, received a handwritten report[2] from one
Reynaldo T. Andres, a supervisor, pertinent portions of which are quoted hereunder:
1. That in the morning of January 29, 1993, Mr. Andres told the herein complainant, together with another employee of the company their
reassignment to the other section of the company as these latter sections lack manpower; that herein complainant shall be reassigned to
the `Washer Section while the other to the `Painting Section;
2. That despite being told of the reason for his transfer, Mr. Escanlar questioned his transfer to the `Washer Section;
3. That on the way to his assigned section, herein complainant asked for an eye goggle to be used in his work; that a certain Mr. Andres
told complainant that there was one goggle in the section where he is assigned;
4. That herein complainant refused to use the goggles saying that it might have some `ketong in it; that no new goggles were issued to the
complainant; that the latter was given instructions by Mr. Andres; that Mr. Andres proceeded to the `Painting Section;
5. That at around 6:55 a.m. while on his way back to the `Washer Section, Mr. Andres saw herein complainant talking to a certain Odelon
Gamora; that the two talked for about two (2) minutes; that after their conversation, Mr. Andres approached the complainant; that at this
instance Mr. Escanlar told Mr. Andres that he (complainant) did not like the way Mr. Andres chose personnel to go on overtime; that
complainant went on further saying that Mr. Andres chose only persons who are close to him and from those who treat him for a drink; that
Mr. Andres told complainant to ask a certain Mr. Tomas Marahit who was near if the complainants allegations were true;
6. That thereafter, herein complainant answered back by saying `Gago Ka to Mr. Andres; that the latter told the former that they should
talk later at his (Mr. Andres) office but the complainant again called him (Mr. Andres) `Gago Ka;
7. That at this juncture, Mr. Andres deemed it proper to leave complainant; that while Mr. Andres was already in the Seam Weld Section of
the company, complainant continued to stare at him without doing his job; that Mr. Andres decided to ask complainant what his problem
was; that herein complainant retorted by saying: `BAKIT ANONG GUSTO MO, TANG INA MO; Mr. Andres just left him (complainant);
8. That at about 8:30 a.m. of the same day, while Mr. Andres was on his way to the canteen, herein complainant approached him (Mr.
Andres) asking what he told the office regarding the incident between them; that Mr. Andres told the complainant to just ask the
management about the matter; that complainant said `Panapanahon lang yan, panahon mo ngayon;
9. That at 3:08 p.m. of the same day, complainant approached Mr. Andres in the canteen and said `Patunayan mong minura kita at kung
hindi, tandaan mo yan.
On February 5, 1993, Engr. Chavez issued a memorandum[3] to petitioner Escanlar requiring the latter to explain in writing within 48 hours
from receipt thereof why no disciplinary action should be taken against him pursuant to the companys Code of Discipline, for addressing
Reynaldo T. Andres, his supervisor, in profane or obscene language and for threatening him.
On February 6, 1993, Reynaldo Andres wrote a memorandum[4] to Engr. Chavez that petitioner Escanlar had again threatened him the
previous day at the basketball court of the company premises.
On February 8, 1993, petitioner Escanlar submitted a written explanation[5] to Engr. Chavez. On the same day, Engr. Chavez through a
memorandum[6] informed petitioner Escanlar of the scheduled hearing of the January 29 incident on February 17, 1993. The hearing was
continued on March 12, 1993.
After the administrative investigation, petitioner Escanlar was served a Notice of Termination[7] dated April 19, 1993, for gross misconduct,
i.e., uttering unsavory remarks and threatening his supervisor with physical harm.
On April 21, 1993, petitioner filed a complaint for illegal dismissal against Autobus. After the submission by the parties of their respective
position papers, the case was deemed submitted for resolution. On October 29, 1993, Labor Arbiter Melquiades Sol D. Del Rosario rendered
a decision finding the dismissal of petitioner valid, pertinent portions of which are quoted hereunder:
Subjecting the evidence on record to a close scrutiny, this Arbitration Branch notes that the immediate cause of the row was the order of
transfer given by the Supervisor, Mr. Andres to complainant and Julieto Anober from the Cutting Section to the Washer and Painting
Sections, respectively. Complainant felt that being a machine operator and union president at that, his transfer to the washer section is
without legal and justifiable basis and this constituted harassment. The records discloses, however, that the very Collective Bargaining
Agreement, signed by the union headed by complainant and respondent provides for such transfer as management prerogative of
respondent. Article VI of the C.B.A. (Annex 1, Respondents Rejoinder to Reply to Position Paper), reads:
The union hereby recognizes the companys right x x x to transfer employees from one job to another; and to make changes in the duties of
employees as the company may consider fit and proper to the conduct of its business and to exercise the inherent and customary
prerogative and functions of management.
With this blanket grant of management prerogative, complainant who headed the union panel that concluded the C.B.A. with respondent
company is now estopped to question his transfer of work. Further, the reason given for the transfer is the lack of manpower to the two (2)
sections and there is no showing that the transfer is permanent. There is no evidence on record that showed complainants transfer as
permanent. If at all it was done by respondent to meet the exigencies of the situation on account of a dearth in manpower. Finally,
complainants transfer and subsequent dismissal can not be termed unfair labor practice on account of union busting because
complainant failed to show by concrete proof that all the other officers of the union have been removed or are on the verge of being
so. As it appears on records, the union has been in existence prior to complainants ascendancy as president of the union and even with
complainant at the helm of the union as president, respondent company readily concluded a Collective Bargaining Agreement with the
union. If union busting has been the agenda of respondent, complainant would not find himself all alone in his present predicament but his
co-union officers likewise; but this is not the picture obtaining.
In fine, this Arbitration Branch does not find any unfair labor practice committed by respondents as an aftermath of complainants dismissal.
With regard to the issue of illegal dismissal, there is evidence on record that complainant violated Sec. 6 of Rule No. 28 of the Code of
Discipline of respondent company, which provides:
Seksiyon 6- ASAL AT KILOS pag-insulto o panghihiya, pagbanta ng pananakit o pagpakita ng anumang sinasadyang di paggalang sa
isang superbisor o sino mang opisyal ng kumpanya.
The transfer of complainant from the cutting section to the washer section has undoubtedly bruised complainants ego, and created a
rancor in his heart not only because he has been assigned for quite sometime to operate a machine but also because he is the president
of the workers union in the company. He had therefore a reason to commit the acts complained of by respondents. This Arbitration Branch
therefore gives more weight and credence to the supervisors complaint that on four (4) occasions on January 29, 1993, complainant
committed acts that violated said rule. These acts are:
That at around 6:55 a.m. when complainant uttered against his supervisor gago ka (twice) when the latter was accused with playing
favorites in the choosing of employees for overtime work, when the supervisor pointed to one Tomas Marahit who can deny the charge of
favoritism; that the complainant uttered the words bakit, anong gusto mo, tang ina mo upon being approached by the supervisor to ask
what the problem is because complainant was not doing his work but merely staring at him; that at 8:30 a.m., when the supervisor on his
way to the canteen was threatened by complainant when he said, panapanahon lang iyan, panahon mo ngayon when not told about
the contents of the supervisors report to management concerning the incident that transpired between the two (2) of them; and that at
3:08 of the same day, again at the canteen when complainant approached his supervisor and uttered the following words: Patunayan
mong minura kita at kung hindi, tandaan mo iyan.
To these claims of the supervisor, complainant could only give a general denial. As between a positive averment and a mere denial the
former should be accorded more weight and belief. Moreover, in complainants attempt to twist facts, he claims that it was the supervisor
who uttered profane language but during the investigation of February 17, 1993, he admitted that he did not hear the supervisor uttered
any bad word. Rather it was his co-worker Julieto Anober who told him about it not at the time the statement was uttered but in the
afternoon when said co-worker was about to go home. This would constitute an after thought not worthy of credence.Furthermore, the
contents of Julieto Anobers affidavit did not mention during the investigation by the fact finding committee on March 12, 1993 said bad
words but only the word gago as having been uttered by the supervisor and relayed to complainant in the afternoon when he was about
to go home (Annex G-5, Respondents Rejoinder to Reply to Position Paper). He simply said, iyan lang ang sinabi ko kay Ric (Complainant)
nuong kinahapunan x x x pauwi na ako (Annex G-6, Supra).
The utterance of complainant are four-square with the violated rule aforecited. As there is legal cause and procedural due process
accorded to complainant, this Arbitration Branch so holds and declares complainants dismissal to be valid.[8]
On appeal, the decision was affirmed by respondent National Labor Relations Commission in its Resolution[9] dated July 12, 1994.
Dissatisfied with the NLRC decision, petitioner has come to this Court via this petition for certiorari and prohibition, contending that
respondent NLRC acted with grave abuse of discretion in affirming the decision of the labor arbiter.
Petitioner asserts that there are questions of fact which have been overlooked and misconstrued by the labor arbiter and the NLRC.
It is well-settled in this jurisdiction that factual findings of the NLRC, particularly when they coincide with those of the Labor Arbiter, are
accorded respect, even finality, and will not be disturbed for as long as such findings are supported by substantial evidence.[10] In the instant
case, we have no reason to deviate from this policy as petitioner failed to convince us that the findings of the labor arbiter as affirmed by
the NLRC are devoid of basis or are otherwise capricious or arbitrary.[11]
Petitioner was dismissed by respondent Autobus for violation of Section 6 (B) of the companys Code of Discipline, to wit:
B. SEKSIYON 6. ASAL AT KILOS
24. Pag-insulto o panghihiya, pagbabanta ng pananakit o pagpapakita ng anumang sinasadyang di-paggalang sa isang superbisor o
sino mang opisyal ng kumpanya.
Takdang Parusa: Suspensiyon hanggang sa pagtitiwalag, ayon sa bigat ng pagkakasala.[12]
which is considered as an act of gross misconduct and is a valid ground for terminating an employee pursuant to Article 282 of the Labor
Code.
Misconduct is 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 in judgment. The misconduct must be of such a grave
and aggravated character and not merely trivial or unimportant.[13] The charge of serious misconduct finds ample support in the
record. Petitioner failed to satisfactorily rebut this accusation, his only defense being self-serving denials.
The repeated utterances by petitioner of obscene, insulting or offensive words against a superior were not only destructive of the morale
of his co-employees and a violation of the company rules and regulations, but also constitute gross misconduct which is one of the grounds
provided for by law to terminate the services of an employee.[14] His attitude toward his supervisor, Reynaldo T. Andres, amounted to
insubordination and conduct unbecoming of an employee which merited the penalty of dismissal.[15]
Suffice it to state that an employee may be validly dismissed for violation of a reasonable company rule or regulation adopted for the
conduct of the companys business.[16] It is the recognized prerogative of the employer to transfer and reassign employees according to the
requirements of its business. For indeed, regulation of manpower by the company clearly falls within the ambit of management prerogative.
A valid exercise of management prerogative is one which, among others, covers: work assignment, working methods, time, supervision of
workers, transfer of employees, work supervision, and the discipline, dismissal and recall of workers. Except as provided for, or limited by
special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment. [17]
Then petitioner makes the farfetched claim that his dismissal is by reason of his being the union president, thus Autobus is allegedly guilty
of unfair labor practice.This contention is devoid of any legal foundation. We agree with the observation of the respondent NLRC that:
x x x. The records are devoid of any substantial evidence that would establish the theory that the dismissal of herein complainant was
entirely and exclusively motivated by the employees union activities or affiliations nor brought about by a clear discriminatory motive.[18]
Finally, petitioner assails the proceedings during the administrative investigation claiming violation of due process. We are not
convinced.
The twin requirements of notice and hearing constitute the essential elements of due process. Due process of law simply means giving
opportunity to be heard before judgment is rendered. In fact, there is no violation of due process even if no hearing was conducted, where
the party was given a chance to explain his side of the controversy. What is frowned upon is the denial of the opportunity to be heard.[19]
A perusal of the record reveals that petitioner was duly notified of the charges against him and given the opportunity to defend himself
via a written explanation and thereafter, to adduce evidence on his behalf during a formal hearing where he was represented by a counsel
of his own choice.
A formal trial-type hearing is not even essential to due process. It is enough that the parties are given a fair and reasonable opportunity
to explain their respective sides of the controversy and to present supporting evidence on which a fair decision can be based.[20] This type of
hearing is not even mandatory in cases of complaints lodged before the Labor Arbiter.[21]
WHEREFORE, the petition is DISMISSED. The resolution of respondent NLRC affirming the decision of the Labor Arbiter is AFFIRMED.
SO ORDERED.

[G.R. No. 142007. March 28, 2001]

MANUEL C. FELIX, petitioner, vs. ENERTECH SYSTEMS INDUSTRIES, INC. and COURT OF APPEALS, respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the decision[1] of the respondent Court of Appeals, dated January 6, 2000, affirming the
decision of the National Labor Relations Commission (NLRC), dated June 17, 1998, declaring the dismissal of petitioner Manuel C. Felix to be
legal, although granting his claim for 13th month pay, and the appeals courts resolution, dated February 18, 2000, denying petitioners motion
for reconsideration.
The facts, as found by the Court of Appeals, are as follows:
Respondent Enertech System Industries, Incorporated is engaged in the manufacture of boilers and tanks. Petitioner Manuel C. Felix
worked as a welder/fabricator in respondent company. On August 5, 1994, petitioner and three other employees, namely, Dante Tunglapan,
Hilario Lamog, and Emerson Yanos, were assigned to install a smokestack at the Big J Feedmills in Sta. Monica, Bulacan. During the entire
period they were working at the Big J Feedmills, petitioner and his companions accomplished daily time records (DTRs). Petitioner wrote in his
DTR that he had worked eight hours a day on the basis of which his wages were computed.
The work was estimated to be completed within seven days, but it actually took the workers until August 17, 1994, or about two weeks,
before it was finished. On that day, petitioner and his three co-employees were each given notice by respondent, which read in part:
Reports came to our office that for the past few days you were reporting at [the] Big J jobsite at around eleven oclock in the morning and
you were leaving said site at two oclock.
We would like to inform you that said act constitutes Abandonment of Work which is [a] violation of our Company Code on Employees
Discipline that warrants a penalty of DISMISSAL.
Therefore, you are hereby given 24 hours to explain your side on the said matter.[2]
The next day, August 18, 1994, petitioner and his co-workers were placed under preventive suspension for seven working days. On
August 26, 1994, respondent, through its personnel assistant, Ma. Imelda E. Samson (MIES), and in the presence of two union officers, Armando
B. Tumamao (ABT) and Jessie T. Yanos (JTY), interviewed Johnny F. Legaspi (JFL), who owned the Big J Feedmills, and his engineer, Juanito
Avena. The transcript of their interview reads:
MIES: Anong oras ho ba nagtatrabaho ang mga tao naming nai-assign dito?
JFL: Madalas nagsisimula sila ng alas-diyes ng umaga at minsan naman alas-onse ng umaga; mula ng nag-umpisa sila dito hindi pa sila
naka-buo ng apat na oras na trabaho mag-hapon.
MIES: Bakit ho, anong oras ba sila dumarating?
JFL: Hindi pare-pareho, may alas-otso ng umaga, minsan 9:00, minsan 9:30 ng umaga, pero hindi sila sabay-sabay na dumarating
ha. Madalas pa nga mag-aalas-diyes na sila dumarating, pag kumpleto na silang apat saka pa lang sila magsisimulang
magtrabaho.
ABT: May mga araw ho nagdadaan sila sa Shop namin para pumick-up ng gamit baka ito ho iyong tinatanghali sila ng dating?
 JFL: Iyon nga ang sabi nila eh, kaya daw sila tinatanghali kasi nga kumukuha sila ng gamit sa shop ninyo, pero hindi naman sila sabay-
sabay kumukuha ng gamit o suweldo, di ba? Saka nagpapapirma sila ng delivery receipt kay Engr. Avena at isa-isa lang naman
ang nagpupunta sa Shop ninyo, yung naiiwan dito sa Shop hindi agad nagtatrabaho, hinihintay pa nila yung kasama nila.
ABT: May dumarating ho ba ng alas-siyete ng umaga?
JFL: Wala nga eh, tanghali na nga sila dumarating, pagdating magtatabraho sandali tapos titigil para kumain sa tindahan wala pang
alas-dose kumakain na sila kasi baka maubusan sila ng ulam o kakainin, tapos alas-dose magpapahinga na sila, matutulog doon
sa may boiler bago pa lamang mag-alas-kuatro umaalis na sila kaya wala talagang otso oras ang trabaho nila.
JTY: Paano nyo ho nalalaman kung nagtratrabaho sila o hindi?
JFL: Alam ninyo, galing ako sa sakit; kailangan ko ng pahinga pero imbes na sa loob ako nagpapahinga dito na lang ako sa labas,
umagang-umaga pa lang, nandito na ako. Kita niyo naman mula dito nakikita ko ang lumalabas at pumapasok dito, saka makikita
mo kung may tao doon sa bubong saka doon sa may boiler at maririning mo rin kung nag-we-welding o may nag-pupukpok.
Lumalapit nga itong si Manuel sa amin at nagpapagawa ng sulat na nagpapatunay na pumapasok sila ng 7 to 4 pero hindi ako
pumayag kasi lalabas na nagsisinungaling na ako. Gusto lang naman namin lumagay sa tama, kung ano yung totoo iyon na iyon,
noong minsan nag-report kami sa opisina ninyo na nag half-day sila, yun pala natutulog lang sila sa ilalim ng boiler sa may skid. Kaya
naman gumawa kami agad ng sulat para ipaalam sa inyo na hindi pala sila umuwi, nandoon pa pala sila, natutulog.[3]
These statements were corroborated by the affidavit[4] of petitioners co-employee, Emerson G. Yanos, who stated that petitioner and
his co-worker Dante Tunglapan usually arrived for work at the Big J Feedmills between 9:30 to 10:00 a.m., stopped working at 12:00 noon,
then resumed work at 1:00 p.m., continuing until 3:00 p.m. Before going home, they had snacks.
Reynaldo Tapiru, petitioners co-employee and neighbor in Sitio Kabanatuan, Valenzuela, also stated in an affidavit[5] that he had seen
petitioner either in his house or within their compound on August 6, 7, 8, and 14, 1994, between 3 and 4 oclock in the afternoon, when he was
supposed to be working at the Big J Feedmills in Bulacan at that time.
On September 9, 1994, respondent required petitioner to report to the company lawyer on September 13, 1994 for investigation.[6] Then,
on October 17, 1994, it issued a memorandum[7] placing petitioner under preventive suspension for 30 days. Finally, on November 21, 1994,
respondent sent petitioner a memorandum terminating his employment on the following grounds:
SECTION 7. DISHONESTY
6. Falsifying time cards or any other timekeeping records, or drawing salary/allowance by virtue of falsified time cards.
SECTION 8. INSUBORDINATION
4. Willful holding back, slowing down, hindering, or limiting work output.
5. Encouraging, coercing, inciting, bribing, or otherwise inducing any employee to engage in any practice in violation of the
Companys work rules.[8]
Petitioner filed a complaint for illegal dismissal against respondent before the Arbitration Branch of the NLRC. On June 19, 1997, Labor
Arbiter Arthur Amansec rendered a decision finding petitioner to have been illegally dismissed and ordering respondent as follows:
WHEREFORE, complainant Manuel Felix is hereby found to have been illegally DISMISSED from employment and concomitantly respondent
is hereby ordered to reinstate complainant with backwages and pay his proportionate 13th month pay for 1994.
Other claims are hereby ordered DISMISSED for lack of merit. The Complaint of Dante Tungpalan should be as it is hereby DISMISSED by
reason of settlement.
SO ORDERED.[9]
Respondent appealed to the NLRC. Pending appeal, a writ of execution was issued on September 23, 1997 directing respondent to
reinstate petitioner either physically or in the payroll.
On October 10, 1997, respondent filed an omnibus motion[10] arguing that reinstatement was no longer possible as the violations of
company rules committed by petitioner had caused strained relations between petitioner and itself. Respondent further alleged that
because of petitioners falsification of his daily time records which enabled him to collect his full salary, it could no longer trust him. Respondent
prayed that the writ of execution be recalled and that a new order be issued allowing it to pay petitioner separation pay in lieu of
reinstatement.
On June 17, 1998, the NLRC rendered a decision reversing the labor arbiters decision and dismissing petitioners complaint for illegal
dismissal for lack of merit. The NLRC found sufficient evidence to prove that petitioner put in less than the required eight hours daily work
during his detail at the Big J Feedmills and, therefore, held that his dismissal was in accordance with the Company Code of Discipline and
the Labor Code.[11]
Petitioner filed a motion for reconsideration, but the same was denied.[12] He appealed to the Court of Appeals which, on January 6,
2000, affirmed the dismissal of petitioner although it granted his claim for 13 th month pay. In its resolution of February 18, 2000, the Court of
Appeals denied reconsideration of its decision. Hence this present petition.
Petitioner assails the decision of the Court of Appeals in not ordering the award of backwages by reason of respondent corporations
refusal to reinstate him pending appeal of the case. He argues that the omnibus motion filed by respondent during the pendency of the
appeal should have been treated as respondents admission of liability for reinstatement or, in lieu thereof, for separation pay.
First. Petitioner prays that the Court reinstate the labor arbiters decision finding respondent corporation guilty of illegal dismissal. The
labor arbiter held as doubtful the statement of Johnny Legaspi and petitioners two co-employees to the effect that petitioner and his co-
workers put in only four hours; that the statements of Legaspi and Yanos were inaccurate as there was no timekeeper at the job site to monitor
the arrivals and departures of employees; and that the delay in the completion of the project could be due to an erroneous estimate on
duration of work, lack of materials, or lack of work coordination.[13]
 Petitioners argument has no merit. The Court of Appeals, taking into account the findings of the NLRC, the interview with Johnny Legaspi
and his engineer, and the affidavits of Yanos and Tapiru, correctly concluded that there was substantial evidence presented showing that
petitioner did not really work eight hours a day, as he had stated in his time cards.[14]
Indeed, the validity of petitioners dismissal is a factual question. It is not for the reviewing court to weigh the conflicting evidence,
determine the credibility of witnesses, or otherwise substitute its own judgment for that of the administrative agency. Well-settled is the rule
that the findings of fact of quasi-judicial agencies, like the NLRC, are accorded not only respect but at times even finality if such findings are
supported by substantial evidence.[15] This is especially so in this case, in which the findings of the NLRC were affirmed by the Court of
Appeals. The findings of fact made therein can only be set aside upon a showing of grave abuse of discretion, fraud, or error of law.[16] There
is no such showing of grave abuse of discretion in this case.
For this reason, we find petitioners dismissal to be in order. Falsification of time cards constitutes serious misconduct and dishonesty or
fraud,[17] which are just causes for the termination of employment under Art. 282(a) and (c) of the Labor Code which provides:
ART. 282. Termination by employer. An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his
work;
....
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(Emphasis added)
As to the labor arbiters observation that a timekeeper should have been assigned to the Big J Feedmills, we think the Court of Appeals
correctly disposed of the same, thus:
Employees are hired in order to foster the employers business, and company rules and regulations are part of such goal. If we adhere to the
labor arbiters view that a timekeeper should have been placed by private respondent or to commission the latters client to act as
timekeeper, it would be an additional burden not only on the part of private respondent but also on its client. It would be contrary to every
business motto that clients should be given utmost satisfaction and convenience. Moreover, if every time an assignment is given to an
employee, the employer will send out someone to spy, the atmosphere of harmonious relationship between the employer and its
employees will be beclouded, thundering forth suspicion and distrust among themselves.[18]
Second. Petitioner contends that the omnibus motion filed by respondent on October 10, 1997 during the pendency of the appeal is
an admission that it is liable for reinstatement or, in lieu thereof, for separation pay.
The contention has no merit. No such inference can be derived from a reading of the omnibus motion filed by respondent. To the
contrary, respondent in fact vehemently opposed the implementation of the writ of execution issued by the labor arbiter.20 Thus, respondent
said:
2. That reinstatement can no longer be made or is no longer possible considering the nature of the offense or violation (although an issue
under appeal) which the complainant committed. This offense or violation has caused serious and severe strained relationship between
the complainant and the respondent employer;
3. That it must be recalled, and as the records of the case will confirm, complainant committed a virtual criminal act of falsifying his daily
time records based on which he collected his salary. Due to the seriousness of this offense, there is no way by which respondent employer
can trust complainant again and place the future and welfare of the company to shenanigans who try to defraud it;21
Respondent appears merely to have been mistaken about the options open to it upon promulgation of the labor arbiters decision. As
to the question of whether separation pay in lieu of his reinstatement may be awarded to petitioner, it is settled that such can be done only
upon finality of judgment, that is, when the judgment is no longer appealable, hence final and executory, and where reinstatement can no
longer be effected, as when the position previously held by the employee no longer exists or when strained relations result in the loss of trust
and confidence.22
Rather, with the labor arbiters decision still pending appeal in the NLRC, what is applicable is Art. 223 of the Labor Code, which in part
provides:
[T]he decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall
immediately be executory, even pending appeal.The employee shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a
bond by the employer shall not stay the execution for reinstatement provided herein.
If at all, therefore, respondent should have reinstated petitioner in the payroll, instead of offering him separation pay. Be that as it may,
the omnibus motion filed by respondent cannot be construed as an admission of its liability for reinstatement.
Third. Anent petitioners claim that he is entitled to backwages from the time the labor arbiter rendered a decision in his favor until said
decision was reversed by the NLRC, this issue should have been raised earlier in the Court of Appeals and not only now in the present
petition. Hence, this matter cannot be considered by the Court.22
WHEREFORE, the decision of the Court of Appeals is AFFIRMED for lack of showing that it committed a reversible error.
SO ORDERED.

G.R. No. 111110 August 2, 1994

ZENCO SALES, INC. and/or ZENCO FOOTSTEP, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, FIFTH DIVISION, CAGAYAN DE ORO CITY, and ANASTACIO C. YAP, respondents.
Rebolos Valmorida and Associates for petitioner.
Rodulfo Uy for private respondent.

DAVIDE, JR., J.:

This is a special civil action under Rule 65 to nullify the resolution 1 of the public respondent of 12 May 1993 in NLRC CA No. M-001029-92
which affirmed, with modification, the decision 2 of the Executive Labor Arbiter, Hon. Benjamin Pelaez, of 26 August 1992 in NLRC RABX
Case No.
10-06-00351-91, entitled "Anastacio C. Yap vs. Zenco Sales, Inc. and/or Zenco Footstep." The Labor Arbiter had dismissed the private
respondent's complaint for illegal dismissal, profit sharing, commission for 1990, and damages. The public respondent affirmed the decision
of the Labor Arbiter but awarded "separation pay based on social justice."
In dismissing the complaint, the Labor Arbiter noted and held:
Anent the issue of illegal dismissal, We find for Respondent. The Internal Audit Report clearly established Complainant's
misfeasance and malfeasance in the performance of his duty as Branch Manager which resulted to a loss of substantial
amount of money and an act inimical to the interest of Respondent corporation. Complainant is guilty of misfeasance
for his failure to closely monitor and control the sales transactions of salesman Chua and malfeasance because he used
Respondent corporation's properties, equipments and personnel in connection with his personal business of buy and sell
of used sacks. These acts of Complainant constitute gross neglect in the performance of duty and serious misconduct
resulting to loss of trust and confidence which under Article 292 [should be 282] of the Labor Code, as amended, are
ground [sic] to terminate an employment.
We further noted that Complainant failed to dispute the findings of the Internal Auditors of Respondent corporation.
However, he contended lack of due process in effecting the termination of employment. On the contrary, We find
otherwise. Complainant was duly confronted by the findings of the auditors during the investigation conducted by Mr.
Lino Sy, Assistant Vice-President for Sales in Mindanao, at De Luxe Hotel on 1 April 1991. 3
In its resolution of 12 May 1993, the public respondent, acting on the complainant's appeal from the aforesaid decision, found the appeal
"devoid of merit," declared that the Labor Arbiter's findings that the private respondent "is guilty of misfeasance and malfeasance is
substantially supported by the facts and evidence on record," and sustained the Labor Arbiter's conclusion that the complainant was
validly dismissed for cause. It specifically stated that the acts of the private respondent "constitute gross neglect in the performance of duty
and serious misconduct resulting to loss of trust and confidence which under Article 292 [sic] of the Labor Code, as amended, are ground
[sic] to terminate an employment." Nevertheless, it modified the decision by granting the complainant separation pay at the rate of one
month's salary for every year of service. Its justification therefor reads:
Considering, however, that the infractions of complainant which involved violations of company policies does not
constitute a depraved act or those reflecting on his moral character and taking into further account his ten (10) years of
unblemished service, except for the instant case, We find justifiable basis in awarding his separation pay based on social
justice fixed at the rate of one (1) month salary for every year of service (See PLDT vs. NLRC, 164 SCRA 671 [1988]). 4
Its motion to reconsider the modification having been denied by the public respondent in the resolution of 17 June 1993, 5 the petitioner
filed this special civil action imputing upon the public respondent "patent abuse of discretion amounting to lack of jurisdiction and/or
excess of jurisdiction in modifying the decision . . . of the Labor Arbiter." It maintains that giving the complainant (private respondent)
separation pay "in the interest of social justice as an act of compassion is unwarranted under the given set of facts" and his ten years of
service "cannot be given any premium to justify the award." 6
In his comment posted on 28 September 1993, the private respondent defends the modification because the same finds justification under
the Constitutional provision "for the improvement of the lot of the workers" and the ruling in Philippine Long Distance Telephone Co. vs.
National Labor Relations Commission, 7 and asserts that the infraction he committed did not, as correctly held by the public respondent,
involve a depraved act or those reflecting on his moral character. 8 It was, he claims, the petitioner's saleswoman, Ms. Chua, who was
directly responsible for the losses it sustained."
In its Manifestation in Lieu of Comment, 9 the Office of the Solicitor General submits "that there is merit in petitioner's contention that since,
as found by the Labor Arbiter and the NLRC, private respondent was guilty of committing acts which 'constitute gross neglect in the
performance of duty and serious misconduct resulting to loss of trust and confidence,' the award of separation pay to private respondent
was improper," and legally indefensible for it contravenes Section 7, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code. It
argues that the only cases where separation pay shall be granted although the employee was lawfully dismissed are when the cause of
termination was not attributable to the employee's fault but due to the following reasons: (1) the installation of labor-saving devices, (2)
redundancy, (3) retrenchment, (4) cessation of the employer's business, or (5) when the employee is suffering from a disease and his
continued employment is prohibited by law or is prejudicial to his health and to the health of his co-employees. 10 It cites this Court's
decisions in Eastern Paper Mills, Inc. vs. NLRC, 11 Philippine Long Distance Telephone Co. vs. NLRC, 12 and Baguio Country Club Corp. vs.
NLRC. 13
The Office of the Solicitor General then concludes that from the established facts in this case, "it is clear that private respondent was validly
dismissed not only because he committed neglect in the performance of his duties and serious misconduct but that his acts of using
petitioner's equipment and personnel for his personal use and benefit constitutes an offense involving dishonesty."
In the resolution of 1 December 1993, 14 copy of which was received by the public respondent on 20 December 1993, this Court granted
the prayer of the Office of the Solicitor General to give the public respondent a new period to file its own comment. Despite three
extensions of thirty days each, the last of which, with warning, expired on 20 June 1994, the public respondent did not file the required
comment.
The Court then resolved to decide this case on the merits without the public respondent's comment.
We rule for the petitioner.
The public respondent affirmed the findings of the Labor Arbiter that the private respondent "is guilty of misfeasance for his failure to closely
monitor and control the sales transactions of salesman Chua and malfeasance because he used respondent corporation's properties,
equipments and personnel in connection with his personal business of buy and sale of used sacks," which, when brought within the ambit of
Article 282 (not Article 292) of the Labor Code "constitute gross neglect in the performance of duty and serious misconduct resulting to loss
of trust and confidence."
A reading of Articles 279 and 282 of the Labor Code and Section 7, Rule I, Book V of the Omnibus Rules Implementing the Labor
Code 15 reveals that an employee who is dismissed for cause under Article 282 after appropriate proceedings in compliance with the due
process requirements 16 is not entitled to an award of separation pay. Under Articles 283 and 284 of the Labor Code, separation pay is
authorized only in cases of dismissals due to the following reasons: (a) the installation of labor-saving devices, (b) redundancy, (c)
retrenchment, (d) cessation of the employer's business, and (e) when the employee is suffering from a disease and his continued
employment is prohibited by law or is prejudicial to his health and to the health of his
co-employees. 17
In the 23 August 1988 Decision in Philippine Long Distance Telephone Co. vs. NLRC, 18 however, this Court, speaking through Mr. Justice
Isagani A. Cruz, recognized an exception.
Strictly speaking, however, it is not correct to say that there is no express justification for the grant of separation pay to
lawfully dismissed employees other than the abstract consideration of equity. The reason is that our Constitution is replete
with positive commands for the promotion of social justice, and particularly the protection of the rights of the workers.
The enhancement of their welfare is one of the primary concerns of the present charter. In fact, instead of confining itself
to the general commitment to the cause of labor in Article II on the Declaration of Principles and State Policies, the new
Constitution contains a separate article devoted to the promotion of social justice and human rights with a separate
sub-topic for labor. Article XIII expressly recognizes the vital role of labor, hand in hand with management, in the
advancement of the national economy and the welfare of the people in general. The categorical mandates in the
Constitution for the improvement of the lot of the workers are more than sufficient basis to justify the award of separation
pay in proper cases even if the dismissal be for cause. 19
Nevertheless, the Court re-examined the previous cases which granted separation pay in cases of dismissals for cause in the light
of their lack of consistency as to the justification for the grant thereof and the amount or rate of such award, and, thereafter, laid
down the following doctrine and its rationale:
We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the
employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where
the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or
illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation
pay, or financial assistance, or whatever other name it is called, on the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring
employee for his offense. And we do not agree that the punishment is his dismissal only and that the separation pay has
nothing to do with the wrong he had committed. Of course it has. Indeed, if the employee who steals from the company
is granted separation pay even as he is validly dismissed, it is not unlikely that he will commit a similar offense in his next
employment because he thinks he can expect a like leniency if he is again found out. This kind of misplaced compassion
is not going to do labor in general any good as it will encourage the infiltration of its ranks by those who do not deserve
the protection and concern of the Constitution.
The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the
underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the
poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved
privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to
the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives
blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the
protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with
the blemishes of their own character. 20
In the instant case, the private respondent was found guilty of gross misconduct for having used his employer's (petitioner's) "properties,
equipments and personnel in connection with his personal business of buy and sale of used sacks." His acts involve gross dishonesty
deliberately done for his personal advantage. The doctrine laid down in Philippine Long Distance Telephone Co. that separation pay, as a
measure of social justice, shall be allowed only where the employee is validly dismissed for causes other than serious misconduct or those
reflecting on his moral character is applicable.
The public respondent acted with grave abuse of discretion in awarding the private respondent separation pay despite its affirmance in
toto of the findings and conclusions of the Labor Arbiter.
WHEREFORE, the petition is GRANTED. The challenged resolution of public respondent National Labor Relations Commission of 12 May 1993
in NLRC CA No. M-001029-92 (Case No. RAB-10-06-00351-91) is MODIFIED by deleting the award of separation pay.
No pronouncement as to costs.
SO ORDERED.

G.R. No. 201701 June 3, 2013

UNILEVER PHILIPPINES, INC., Petitioner,
vs.
MARIA RUBY M. RIVERA, Respondent.
 DECISION
MENDOZA, J.:
Subject of this disposition is the petition for review on certiorari1 under Rule 45 of the Rules of Court filed by petitioner Unilever Philippines, Inc.
(Unilever) questioning the June 22, 2011 Decision2 and the April 25, 2012 Resolution3 of the Court of Appeals (CA)-Cagayan de Oro City, in
CA G.R. SP No. 02963-MIN, an Illegal Dismissal case filed by respondent Maria Ruby M. Rivera (Rivera). The CA affirmed with modification
the March 31, 2009 Resolution of the National Labor Relations Commission (NLRC) finding Rivera's dismissal from work to be valid as it was for
a just cause and declaring that she was not entitled to any retirement benefit. The CA, however, awarded separation pay in her favor as a
measure of social justice.
The Facts
Unilever is a company engaged in the production, manufacture, sale, and distribution of various food, home and personal care products,
while Rivera was employed as its Area Activation Executive for Area 9 South in the cities of Cotabato and Davao. She was primarily tasked
with managing the sales, distribution and promotional activities in her area and supervising Ventureslink International, Inc. (Ventureslink), a
third party service provider for the company’s activation projects. Unilever enforces a strict policy that every trade activity must be
accompanied by a Trade Development Program (TDP) and that the allocated budget for a specific activity must be used for such activity
only.4
Sometime in 2007, Unilever’s internal auditor conducted a random audit and found out that there were fictitious billings and fabricated
receipts supposedly from Ventureslink amounting to ₱11,200,000.00. It was also discovered that some funds were diverted from the original
intended projects. Upon further verification, Ventureslink reported that the fund deviations were upon the instruction of Rivera.
On July 16, 2007, Unilever issued a show-cause notice to Rivera asking her to explain the following charges, to wit: a) Conversion and
Misappropriation of Resources; b) Breach of Fiduciary Trust; c) Policy Breaches; and d) Integrity Issues.
Responding through an email, dated July 16, 2007, Rivera admitted the fund diversions, but explained that such actions were mere
resourceful utilization of budget because of the difficulty of procuring funds from the head office.5 She insisted that the diverted funds were
all utilized in the company’s promotional ventures in her area of coverage.
Through a letter, dated August 23, 2007, Unilever found Rivera guilty of serious breach of the company’s Code of Business Principles
compelling it to sever their professional relations. In a letter, dated September 20, 2007, Rivera asked for reconsideration and requested
Unilever to allow her to receive retirement benefits having served the company for fourteen (14) years already. Unilever denied her request,
reasoning that the forfeiture of retirement benefits was a legal consequence of her dismissal from work.
On October 19, 2007, Rivera filed a complaint for Illegal Dismissal and other monetary claims against Unilever.
On April 28, 2008, the Labor Arbiter (LA) dismissed her complaint for lack of merit and denied her claim for retirement benefits, but ordered
Unilever to pay a proportionate 13th month pay and the corresponding cash equivalent of her unused leave credits. The decretal portion
of the LA decision reads:
WHEREFORE, premises considered, judgment is hereby rendered dismissing for lack of merit the illegal dismissal complaint. However,
UNILEVER PHILIPPINES, INC. is hereby ordered to pay complainant the total amount of PESOS: FIFTY SEVEN THOUSAND EIGHTY TWO & 90/100
ONLY (₱57,082.90) representing proportionate 13th month pay and unused leave credits.
The complaint against individual respondents Recto Sampang and Alejandro Concha are likewise dismissed for it was not shown that they
acted in bad faith in the dismissal of complainant. Moreover, their legal personality is separate and distinct from that of the corporation.
All other money claims are dismissed for lack of basis.6
On appeal, the NLRC partially granted Rivera’s prayer. In its Resolution, dated November 28, 2008, the NLRC held that although she was
legally dismissed from the service for a just cause, Unilever was guilty of violating the twin notice requirement in labor cases. Thus, Unilever
was ordered to pay her ₱30,000.00 as nominal damages, retirement benefits and separation pay. The dispositive portion reads:
WHEREFORE, foregoing premises considered, the appeal is PARTIALLY GRANTED. The assailed Decision dated 28 April 2008 is hereby
MODIFIED in the sense that respondent UNILEVER PHILIPPINES, INC. is hereby ordered to pay the following sums:
1. The amount of ₱30,000.00 representing nominal damages for violation of complainant’s right to procedural due process;
2. Retirement benefits under the company’s applicable retirement policy or written agreement, and in the absence of which, to
pay complainant her retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at
least six (6) months being considered as one whole year;
3. Separation pay under the company’s applicable policy or written agreement, and in the absence of which, to pay separation
pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being
considered as one whole year.
The rest of the Decision is hereby AFFIRMED.
SO ORDERED.7
Unilever asked for a reconsideration of the NLRC decision. In its Resolution, dated March 31, 2009, the NLRC modified its earlier ruling by
deleting the award of separation pay and reducing the nominal damages from ₱30,000.00 to ₱20,000.00, but affirmed the award of
retirement benefits to Rivera. The fallo reads:
WHEREFORE, foregoing premises considered, the instant Motion for Partial Reconsideration is PARTLY GRANTED. The Resolution dated 28
November 2008 of the Commission is hereby
RECONSIDERED as follows:
(1)The award of separation pay is hereby deleted for lack of factual and legal basis; and
 (2)The award of nominal damages is hereby tempered and reduced to the amount of ₱20,000.00.
The rest of the award for retirement benefits is affirmed in toto.
SO ORDERED.8
Unsatisfied with the ruling, Unilever elevated the case to CA-Cagayan de Oro City via a petition for certiorari under Rule 65 of the Rules of
Court.
On June 22, 2011, the CA affirmed with modification the NLRC resolution. Justifying the deletion of the award of retirement benefits, the CA
explained that, indeed, under Unilever’s Retirement Plan, a validly dismissed employee cannot claim any retirement benefit regardless of
the length of service. Thus, Rivera is not entitled to any retirement benefit. It stated, however, that there was no proof that she personally
gained any pecuniary benefit from her infractions, as her instructions were aimed at increasing the sales efficiency of the company and
competing in the local market. For said reason, the CA awarded separation pay in her favor as a measure of social justice.9 The decretal
portion of the CA decision reads:
WHEREFORE, the assailed Resolution dated March 31, 2009 of the NLRC (Branch 5), Cagayan De Oro City is hereby AFFIRMED with
MODIFICATION. Consequently, UNILEVER is directed to pay MARIA RUBY M. RIVERA the following:
a) Separation pay, to be computed based on the company’s applicable policy or written agreement, or in the absence thereof,
the equivalent of at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being
considered as one whole year;
b) ₱20,000.00 as nominal damages; and
c) Proportionate 13th month pay and unused leave credits, to be computed based on her salary during the period relevant to
the case.
The award of retirement benefits is hereby DELETED.
SO ORDERED.10
Unilever filed a motion for partial reconsideration,11 but it was denied in a Resolution, dated April 25, 2012.
Hence, this petition.12
In support of its position, Unilever submits for consideration the following
GROUNDS
I.
THE COURT OF APPEALS SERIOUSLY ERRED AND GRAVELY ABUSED ITS DISCRETION IN GRANTING AFFIRMATIVE RELIEFS IN FAVOR OF RIVERA
EVEN IF SHE DID NOT FILE ANY PETITION FOR CERTIORARI TO CHALLENGE THE NLRC RESOLUTIONS.
II.
THE COURT OF APPEALS SERIOUSLY ERRED AND GRAVELY ABUSED ITS DISCRETION IN AWARDING SEPARATION PAY IN FAVOR OF RIVERA
CONSIDERING THAT THE LATTER WAS VALIDLY DISMISSED FROM EMPLOYMENT BASED ON JUST CAUSES UNDER THE LAW.
III.
THE COURT OF APPEALS SERIOUSLY ERRED AND GRAVELY ABUSED ITS DISCRETION IN RULING THAT THE COMPANY VIOLATED RIVERA’S RIGHT
TO PROCEDURAL DUE PROCESS BEFORE TERMINATING HER EMPLOYMENT, AND CONSEQUENTLY, IN AWARDING NOMINAL DAMAGES. 13
Unilever argues that Rivera did not file any separate petition for certiorari before the CA. Neither did she file any comment on its petition.
Hence, it was erroneous for the CA to grant an affirmative relief because it was inconsistent with the doctrine that a party who has not
appealed cannot obtain from the appellate court any affirmative relief other than the ones granted in the appealed decision. The
petitioner stresses that Rivera misappropriated company funds amounting to millions of pesos and that granting her separation pay
undermines the serious misdeeds she committed against the company. Moreover, the length of her service with Unilever does not mitigate
her offense, but even aggravates the depravity of her acts.14
The petition is partly meritorious.
The pivotal issue in the case at bench is whether or not a validly dismissed employee, like Rivera, is entitled to an award of separation pay.
As a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 28215of the Labor Code is not
entitled to a separation pay.16 Section 7, Rule I, Book VI of the Omnibus Rules Implementing the Labor Code provides:
Sec. 7. Termination of employment by employer. — The just causes for terminating the services of an employee shall be those provided in
Article 282 of the Code. The separation from work of an employee for a just cause does not entitle him to the termination pay provided in
the Code, without prejudice, however, to whatever rights, benefits and privileges he may have under the applicable individual or
collective agreement with the employer or voluntary employer policy or practice.
In exceptional cases, however, the Court has granted separation pay to a legally dismissed employee as an act of "social justice" or on
"equitable grounds." In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) did not reflect on the moral
character of the employee.17 The leading case of Philippine Long Distance Telephone Co. vs. NLRC18 is instructive on this point:
We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is
validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid
dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker,
the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is
called, on the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring employee for his
offense. And we do not agree that the punishment is his dismissal only and the separation pay has nothing to do with the wrong he has
committed. Of course it has. Indeed, if the employee who steals from the company is granted separation pay even as he is validly
dismissed, it is not unlikely that he will commit a similar offense in his next employment because he thinks he can expect a like leniency if he
is again found out.1âwphi1 This kind of misplaced compassion is not going to do labor in general any good as it will encourage the
infiltration of its ranks by those who do not deserve the protection and concern of the Constitution.
The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best, it
may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society
but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels
any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands
are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant
for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the
blemishes of their own character.19
In the subsequent case of Toyota Motor Philippines Corporation Workers Association (TMPCWA) v. National Labor Relations Commission, 20 it
was further elucidated that "in addition to serious misconduct, in dismissals based on other grounds under Art. 282 like willful disobedience,
gross and habitual neglect of duty, fraud or willful breach of trust, and commission of a crime against the employer or his family, separation
pay should not be conceded to the dismissed employee."21 In Reno Foods, Inc, v. Nagkakaisang Lakas ng Manggagawa (NLM)-
Katipunan,22 the Court wrote that "separation pay is only warranted when the cause for termination is not attributable to the employee’s
fault, such as those provided in Articles 283 and 284 of the Labor Code, as well as in cases of illegal dismissal in which reinstatement is no
longer feasible. It is not allowed when an employee is dismissed for just cause." 23
In this case, Rivera was dismissed from work because she intentionally circumvented a strict company policy, manipulated another entity to
carry out her instructions without the company’s knowledge and approval, and directed the diversion of funds, which she even admitted
doing under the guise of shortening the laborious process of securing funds for promotional activities from the head office. These
transgressions were serious offenses that warranted her dismissal from employment and proved that her termination from work was for a just
cause. Hence, she is not entitled to a separation pay.
More importantly, Rivera did not appeal the March 31, 2009 ruling of the NLRC disallowing the award of separation pay to her. It was
Unilever who elevated the case to the CA. It is axiomatic that a party who does not appeal, or file a petition for certiorari, is not entitled to
any affirmative relief.24 Due process prevents the grant of additional awards to parties who did not appeal.25 An appellee who is not an
appellant may assign errors in his brief where his purpose is to maintain the judgment, but he cannot seek modification or reversal of the
judgment or claim affirmative relief unless he has also appealed.26 It was, therefore, erroneous for the CA to grant an affirmative relief to
Rivera who did not ask for it.
Lastly, Unilever questions the grant of nominal damages in favor of Rivera for its alleged non-observance of the requirements of procedural
due process. It insists that she was given ample opportunity "to explain her side, interpose an intelligent defense and adduce evidence on
her behalf." 27
The Court is not persuaded. Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code expressly states:
Section 2. Standard of due process: requirements of notice.
— In all cases of termination of employment, the following standards of due process shall be substantially observed.
I. For termination of employment based on just causes as defined in Article 282 of the Code:
(a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee
reasonable opportunity within which to explain his side;
(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is
given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and
(c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstance,
grounds have been established to justify his termination.
In case of termination, the foregoing notices shall be served on the employee’s last known address.
King of Kings Transport, Inc. v. Mamac28 detailed the steps on how procedural due process can be satisfactorily complied with. Thus:
To clarify, the following should be considered in terminating the services of employees:
(1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against
them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable
period. "Reasonable opportunity" under the Omnibus Rules means every kind of assistance that management must accord to the
employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5)
calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a
union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover,
in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of
the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which
among the grounds under Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will
be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of
their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the
employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their
choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.
 (3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of
termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2)
grounds have been established to justify the severance of their employment.29
In this case, Unilever was not direct and specific in its first notice to Rivera. The words it used were couched in general terms and were in no
way informative of the charges against her that may result in her dismissal from employment. Evidently, there was a violation of her right to
statutory due process warranting the payment of indemnity in the form of nominal damages. Hence, the Court finds no compelling reason
to reverse the award of nominal damages in her favor. The Court, however, deems it proper to increase the award of nominal damages
from ₱20,000.00 to ₱30,000.00, as initially awarded by the NLRC, in accordance with existing jurisprudence.30
WHEREFORE, the petition is hereby PARTIALLY GRANTED.1âwphi1 The June 22, 2011 Decision and the April 25, 2012 Resolution of the Court of
Appeals (CA)-Cagayan de Oro City in CA-G.R. SP No. 02963-MIN are AFFIRMED with MODIFICATION. The dispositive portion should read as
follows:
WHEREFORE, the March 31, 2009 Resolution of the NLRC (Branch 5), Cagayan de Oro City, is hereby AFFIRMED with MODIFICATION.
UNILEVER PHILIPPINES, INC., is hereby directed to pay MARIA RUBY M. RIVERA the following:
a) ₱30,000.00 as nominal damages; and
b) Proportionate 13th month pay and unused leave credits, to be computed based on her salary during the period relevant to
the case.
The award of retirement benefit is DELETED.
SO ORDERED.

FELIX B. PEREZ and G.R. No. 152048

AMANTE G. DORIA,
Petitioners,
Present:
PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
CARPIO,
AUSTRIA-MARTINEZ,*
- v e r s u s - CORONA,
CARPIO MORALES,
TINGA,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION and
PERALTA, JJ.
PHILIPPINE TELEGRAPH AND
TELEPHONE COMPANY and
JOSE LUIS SANTIAGO,
Respondents. Promulgated:

April 7, 2009
x--------------------------------------------------x

DECISION
CORONA, J.:

Petitioners Felix B. Perez and Amante G. Doria were employed by respondent Philippine Telegraph and Telephone Company (PT&T)
as shipping clerk and supervisor, respectively, in PT&Ts Shipping Section, Materials Management Group.
 Acting on an alleged unsigned letter regarding anomalous transactions at the Shipping Section, respondents formed a special audit
team to investigate the matter. It was discovered that the Shipping Section jacked up the value of the freight costs for goods shipped and
that the duplicates of the shipping documents allegedly showed traces of tampering, alteration and superimposition.

On September 3, 1993, petitioners were placed on preventive suspension for 30 days for their alleged involvement in the
anomaly.[1] Their suspension was extended for 15 days twice: first on October 3, 1993[2] and second on October 18, 1993.[3]

On October 29, 1993, a memorandum with the following tenor was issued by respondents:

In line with the recommendation of the AVP-Audit as presented in his report of October 15, 1993 (copy attached) and the
subsequent filing of criminal charges against the parties mentioned therein, [Mr. Felix Perez and Mr. Amante Doria
are] hereby dismissed from the service for having falsified company documents.[4] (emphasis supplied)

On November 9, 1993, petitioners filed a complaint for illegal suspension and illegal dismissal.[5] They alleged that they were dismissed
on November 8, 1993, the date they received the above-mentioned memorandum.

The labor arbiter found that the 30-day extension of petitioners suspension and their subsequent dismissal were both illegal. He
ordered respondents to pay petitioners their salaries during their 30-day illegal suspension, as well as to reinstate them with backwages and
13th month pay.

The National Labor Relations Commission (NLRC) reversed the decision of the labor arbiter. It ruled that petitioners were dismissed
for just cause, that they were accorded due process and that they were illegally suspended for only 15 days (without stating the reason for
the reduction of the period of petitioners illegal suspension).[6]

Petitioners appealed to the Court of Appeals (CA). In its January 29, 2002 decision,[7] the CA affirmed the NLRC decision insofar as
petitioners illegal suspension for 15 days and dismissal for just cause were concerned. However, it found that petitioners were dismissed without
due process.

Petitioners now seek a reversal of the CA decision. They contend that there was no just cause for their dismissal, that they were not
accorded due process and that they were illegally suspended for 30 days.
We rule in favor of petitioners.

RESPONDENTS FAILED TO PROVE JUST

CAUSE AND TO OBSERVE DUE PROCESS

The CA, in upholding the NLRCs decision, reasoned that there was sufficient basis for respondents to lose their confidence in
petitioners[8] for allegedly tampering with the shipping documents. Respondents emphasized the importance of a shipping order or request,
as it was the basis of their liability to a cargo forwarder.[9]

We disagree.
Without undermining the importance of a shipping order or request, we find respondents evidence insufficient to clearly and
convincingly establish the facts from which the loss of confidence resulted.[10] Other than their bare allegations and the fact that such
documents came into petitioners hands at some point, respondents should have provided evidence of petitioners functions, the extent of
their duties, the procedure in the handling and approval of shipping requests and the fact that no personnel other than petitioners were
involved. There was, therefore, a patent paucity of proof connecting petitioners to the alleged tampering of shipping documents.
The alterations on the shipping documents could not reasonably be attributed to petitioners because it was never proven that
petitioners alone had control of or access to these documents. Unless duly proved or sufficiently substantiated otherwise, impartial tribunals
should not rely only on the statement of the employer that it has lost confidence in its employee.[11]
 Willful breach by the employee of the trust reposed in him by his employer or duly authorized representative is a just cause for
termination.[12] However, in General Bank and Trust Co. v. CA,[13] we said:

[L]oss of confidence should not be simulated. It should not be used as a subterfuge for causes which are improper, illegal
or unjustified. Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. It
must be genuine, not a mere afterthought to justify an earlier action taken in bad faith.

The burden of proof rests on the employer to establish that the dismissal is for cause in view of the security of tenure that employees
enjoy under the Constitution and the Labor Code. The employers evidence must clearly and convincingly show the facts on which the loss
of confidence in the employee may be fairly made to rest.[14] It must be adequately proven by substantial evidence.[15] Respondents failed
to discharge this burden.

Respondents illegal act of dismissing petitioners was aggravated by their failure to observe due process. To meet the requirements
of due process in the dismissal of an employee, an employer must furnish the worker with two written notices: (1) a written notice specifying
the grounds for termination and giving to said employee a reasonable opportunity to explain his side and (2) another written notice indicating
that, upon due consideration of all circumstances, grounds have been established to justify the employer's decision to dismiss the
employee.[16]

Petitioners were neither apprised of the charges against them nor given a chance to defend themselves. They were simply and
arbitrarily separated from work and served notices of termination in total disregard of their rights to due process and security of tenure. The
labor arbiter and the CA correctly found that respondents failed to comply with the two-notice requirement for terminating employees.

Petitioners likewise contended that due process was not observed in the absence of a hearing in which they could have explained
their side and refuted the evidence against them.

There is no need for a hearing or conference. We note a marked difference in the standards of due process to be followed as
prescribed in the Labor Code and its implementing rules. The Labor Code, on one hand, provides that an employer must provide the
employee ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires:

ART. 277. Miscellaneous provisions. x x x

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except
for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the
employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement
of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the
assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant
to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without
prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional
branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or
authorized cause shall rest on the employer. (emphasis supplied)

The omnibus rules implementing the Labor Code, on the other hand, require a hearing and conference during which the employee
concerned is given the opportunity to respond to the charge, present his evidence or rebut the evidence presented against him:[17]

Section 2. Security of Tenure. x x x

(d) In all cases of termination of employment, the following standards of due process shall be substantially
observed:

For termination of employment based on just causes as defined in Article 282 of the Labor Code:

(i) A written notice served on the employee specifying the ground or grounds for termination, and giving said
employee reasonable opportunity within which to explain his side.

(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires,
is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him.
 (iii) A written notice of termination served on the employee, indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination. (emphasis supplied)

Which one should be followed? Is a hearing (or conference) mandatory in cases involving the dismissal of an employee? Can the
apparent conflict between the law and its IRR be reconciled?

At the outset, we reaffirm the time-honored doctrine that, in case of conflict, the law prevails over the administrative regulations
implementing it.[18] The authority to promulgate implementing rules proceeds from the law itself. To be valid, a rule or regulation must conform
to and be consistent with the provisions of the enabling statute.[19] As such, it cannot amend the law either by abridging or expanding its
scope.[20]

Article 277(b) of the Labor Code provides that, in cases of termination for a just cause, an employee must be given ample
opportunity to be heard and to defend himself. Thus, the opportunity to be heard afforded by law to the employee is qualified by the word
ample which ordinarily means considerably more than adequate or sufficient. [21] In this regard, the phrase ample opportunity to be heard
can be reasonably interpreted as extensive enough to cover actual hearing or conference. To this extent, Section 2(d), Rule I of the
Implementing Rules of Book VI of the Labor Code is in conformity with Article 277(b).

Nonetheless, Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code should not be taken to mean that holding
an actual hearing or conference is a condition sine qua non for compliance with the due process requirement in termination of employment.
The test for the fair procedure guaranteed under Article 277(b) cannot be whether there has been a formal pretermination confrontation
between the employer and the employee. The ample opportunity to be heard standard is neither synonymous nor similar to a formal hearing.
To confine the employees right to be heard to a solitary form narrows down that right. It deprives him of other equally effective forms of
adducing evidence in his defense. Certainly, such an exclusivist and absolutist interpretation is overly restrictive. The very nature of due
process negates any concept of inflexible procedures universally applicable to every imaginable situation. [22]

The standard for the hearing requirement, ample opportunity, is couched in general language revealing the legislative intent to
give some degree of flexibility or adaptability to meet the peculiarities of a given situation. To confine it to a single rigid proceeding such as
a formal hearing will defeat its spirit.
Significantly, Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code itself provides that the so-called standards
of due process outlined therein shall be observed substantially, not strictly. This is a recognition that while a formal hearing or conference is
ideal, it is not an absolute, mandatory or exclusive avenue of due process.

An employees right to be heard in termination cases under Article 277(b) as implemented by Section 2(d), Rule I of the Implementing
Rules of Book VI of the Labor Code should be interpreted in broad strokes. It is satisfied not only by a formal face to face confrontation but
by any meaningful opportunity to controvert the charges against him and to submit evidence in support thereof.

A hearing means that a party should be given a chance to adduce his evidence to support his side of the case and that the
evidence should be taken into account in the adjudication of the controversy.[23] To be heard does not mean verbal argumentation alone
inasmuch as one may be heard just as effectively through written explanations, submissions or pleadings.[24] Therefore, while the phrase ample
opportunity to be heard may in fact include an actual hearing, it is not limited to a formal hearing only. In other words, the existence of an
actual, formal trial-type hearing, although preferred, is not absolutely necessary to satisfy the employees right to be heard.

This Court has consistently ruled that the due process requirement in cases of termination of employment does not require an actual
or formal hearing. Thus, we categorically declared in Skippers United Pacific, Inc. v. Maguad:[25]

The Labor Code does not, of course, require a formal or trial type proceeding before an erring employee may be dismissed.
(emphasis supplied)

In Autobus Workers Union v. NLRC,[26] we ruled:

The twin requirements of notice and hearing constitute the essential elements of due process. Due process of law
simply means giving opportunity to be heard before judgment is rendered. In fact, there is no violation of due process
even if no hearing was conducted, where the party was given a chance to explain his side of the controversy. What is
frowned upon is the denial of the opportunity to be heard.

xxxxxxxxx
 A formal trial-type hearing is not even essential to due process. It is enough that the parties are given a fair and
reasonable opportunity to explain their respective sides of the controversy and to present supporting evidence on which
a fair decision can be based. This type of hearing is not even mandatory in cases of complaints lodged before the Labor
Arbiter. (emphasis supplied)

In Solid Development Corporation Workers Association v. Solid Development Corporation,[27] we had the occasion to state:

[W]ell-settled is the dictum that the twin requirements of notice and hearing constitute the essential elements of due
process in the dismissal of employees. It is a cardinal rule in our jurisdiction that the employer must furnish the employee
with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the
particular acts or omissions for which his dismissal is sought; and (2) the second informs the employee of the employers
decision to dismiss him. The requirement of a hearing, on the other hand, is complied with as long as there was an
opportunity to be heard, and not necessarily that an actual hearing was conducted.

In separate infraction reports, petitioners were both apprised of the particular acts or omissions constituting the
charges against them. They were also required to submit their written explanation within 12 hours from receipt of the
reports. Yet, neither of them complied. Had they found the 12-hour period too short, they should have requested for an
extension of time. Further, notices of termination were also sent to them informing them of the basis of their dismissal. In
fine, petitioners were given due process before they were dismissed. Even if no hearing was conducted, the requirement
of due process had been met since they were accorded a chance to explain their side of the controversy. (emphasis
supplied)

Our holding in National Semiconductor HK Distribution, Ltd. v. NLRC[28] is of similar import:

That the investigations conducted by petitioner may not be considered formal or recorded hearings or
investigations is immaterial. A formal or trial type hearing is not at all times and in all instances essential to due process,
the requirements of which are satisfied where the parties are afforded fair and reasonable opportunity to explain their side
of the controversy. It is deemed sufficient for the employer to follow the natural sequence of notice, hearing and judgment.

The above rulings are a clear recognition that the employer may provide an employee with ample opportunity to be heard and
defend himself with the assistance of a representative or counsel in ways other than a formal hearing. The employee can be fully afforded a
chance to respond to the charges against him, adduce his evidence or rebut the evidence against him through a wide array of methods,
verbal or written.

After receiving the first notice apprising him of the charges against him, the employee may submit a written explanation (which
may be in the form of a letter, memorandum, affidavit or position paper) and offer evidence in support thereof, like relevant company
records (such as his 201 file and daily time records) and the sworn statements of his witnesses. For this purpose, he may prepare his explanation
personally or with the assistance of a representative or counsel. He may also ask the employer to provide him copy of records material to his
defense. His written explanation may also include a request that a formal hearing or conference be held. In such a case, the conduct of a
formal hearing or conference becomes mandatory, just as it is where there exist substantial evidentiary disputes[29] or where company rules
or practice requires an actual hearing as part of employment pretermination procedure. To this extent, we refine the decisions we have
rendered so far on this point of law.

This interpretation of Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code reasonably implements the ample
opportunity to be heard standard under Article 277(b) of the Labor Code without unduly restricting the language of the law or excessively
burdening the employer. This not only respects the power vested in the Secretary of Labor and Employment to promulgate rules and
regulations that will lay down the guidelines for the implementation of Article 277(b). More importantly, this is faithful to the mandate of Article
4 of the Labor Code that [a]ll doubts in the implementation and interpretation of the provisions of [the Labor Code], including its implementing
rules and regulations shall be resolved in favor of labor.

In sum, the following are the guiding principles in connection with the hearing requirement in dismissal cases:
(a) ample opportunity to be heard means any meaningful opportunity (verbal or written) given to the employee to answer the
charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair,
just and reasonable way.
(b) a formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary
disputes exist or a company rule or practice requires it, or when similar circumstances justify it.
(c) the ample opportunity to be heard standard in the Labor Code prevails over the hearing or conference requirement in the
implementing rules and regulations.
PETITIONERS WERE ILLEGALLY
SUSPENDED FOR 30 DAYS

An employee may be validly suspended by the employer for just cause provided by law. Such suspension shall only be for a period
of 30 days, after which the employee shall either be reinstated or paid his wages during the extended period.[30]

In this case, petitioners contended that they were not paid during the two 15-day extensions, or a total of 30 days, of their preventive
suspension. Respondents failed to adduce evidence to the contrary. Thus, we uphold the ruling of the labor arbiter on this point.
Where the dismissal was without just or authorized cause and there was no due process, Article 279 of the Labor Code, as amended,
mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of
allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of
actual reinstatement.[31] In this case, however, reinstatement is no longer possible because of the length of time that has passed from the
date of the incident to final resolution.[32] Fourteen years have transpired from the time petitioners were wrongfully dismissed. To order
reinstatement at this juncture will no longer serve any prudent or practical purpose.[33]

WHEREFORE, the petition is hereby GRANTED. The decision of the Court of Appeals dated January 29, 2002 in CA-G.R. SP No. 50536
finding that petitioners Felix B. Perez and Amante G. Doria were not illegally dismissed but were not accorded due process and were illegally
suspended for 15 days, is SET ASIDE. The decision of the labor arbiter dated December 27, 1995 in NLRC NCR CN. 11-06930-93 is
hereby AFFIRMED with the MODIFICATION that petitioners should be paid their separation pay in lieu of reinstatement.

SO ORDERED.

[G.R. No. 122468. September 3, 1998]

SENTINEL SECURITY AGENCY, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, ADRIANO CABANO, JR., VERONICO C. ZAMBO,
HELCIAS ARROYO, RUSTICO ANDOY, and MAXIMO ORTIZ, respondents.
[G.R. No. 122716. September 3, 1998]
PHILIPIPPINE AMERICAN LIFE INSURANCE COMPANY, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, VERONICO ZAMBO, HELCIAS
ARROYO, ADRIANO CABANO, MAXIMO ORTIZ, and RUSTICO ANDOY, respondents.
DECISION
PANGANIBAN, J.:
The transfer of an employee involves a lateral movement within the business or operation of the employer, without demotion in rank,
diminution of benefits or, worse, suspension of employment even if temporary. The recall and transfer of security guards require reassignment
to another post and are not equivalent to their placement on floating status. Off-detailing security guards for a reasonable period of six
months is justified only in bona fide cases of suspension of operation, business or undertaking.
The Case

This is the rationale used by the Court in dismissing the two consolidated petitions for certiorari before us, seeking the reversal of the
Decision dated August 25, 1995, and the Resolution date October 24, 1995, both promulgated by the National Labor Relations
Commission[1] in NLRC Case No. V-0317-94 (RAB VII-01-0097-94, RAB VII-020173-94, and RAB VII-01-0133-94).
In the action for illegal dismissal and payment of salary differential, service incentive leave pay and separation pay filed by private
respondents, Labor Arbiter Dominador A. Almirante rendered a Decision, which disposed:[2]
WHEREFORE, premises considered[,] judgment is hereby rendered ordering xxx Sentinel Security Agency, Inc. jointly and severally with xxx
Philamlife, Cebu Branch, to pay complainants the total amount of [s]ixty [t]housand [o]ne [h]undred [t]welve [p]esos and 50/100
(P60,112.50) in the concept of 13th month pay and service incentive leave benefits as computed by our Labor Arbitration Associate whose
computation is hereto attached and forming part thereof.[3]
On appeal, the NLRC modified the labor arbiters Decision. The dispositive portion of the NLRC Decision[4]reads:
WHEREFORE, the assailed Decision is hereby MODIFIED in so far as the award of 13th month pay for the previous years which is hereby
excluded. Further, xxx Sentinel Security Agency, Inc. is hereby ORDERED to pay complainants separation pay at the rate of month pay for
every year of service and for both xxx Philippine American Life Insurance, Inc. and Sentinel Security Agency, Inc. and/or Daniel Iway to pay
to the [complainants] jointly and severally their backwages from January 16, 1994 to January 15, 1995 and the corresponding 13th month
pay for the said year. The monetary awards hereby granted are broken down as follows [into separation pay, back wages, 13th month pay
and service incentive leave pay]:
x x x x x x x x x.[5]
The challenged Resolution denied reconsideration for lack of merit.[6]
The Facts

The undisputed factual backdrop is narrated by Respondent Commission as follows:[7]

The complainants were employees of Sentinel [Security Agency, Inc. hereafter referred to as the Agency] since March 1, 1966 in the case
of Veronico Zambo; October 27, 1975 in the case of Helcias Arroyo; September 20, 1985 in the case of Adriano Cabano; February 1, 1990 in
the case of Maximo Ortiz; and Ortiz and November 1, 1967 in the case of Rustico Andoy. They were assigned to render guard duty at the
premises of [Philippine American Life Insurance Company] at Jones Avenue, Cebu City. On December 16, 1993 Philippine American Life
Insurance Company [the Client, for brevity], through Carlos De Pano, Jr., sent notice to all concerned that the [Agency] was again
awarded the contract of [s]ecurity [s]ervices together with a request to replace all the security guards in the companys offices at the cities
of Cebu, Bacolod, Cagayan de Oro, Dipolog and Ilagan. In compliance therewith, [the Agency] issued on January 12, 1994, a Relief and
Transfer Order replacing the complainants as guards [of the Client] and for then to be re-assigned [to] other clients effective January 16,
1994. As ordered, the complainants reported but were never given new assignments but instead they were told in the vernacular, gui-ilisa
mo kay mga tigulang naman mowhich when translated means, you were replace[d] because you are already old. Precisely, the
complainants lost no time but filed the subject illegal dismissal cases on January 18, January 26 and February 4, 1994 and prayed for
payment of separation pay and other labor standard benefits.
[The Client and the Agency] maintained there was no dismissal on the part of the complainants, constructive or otherwise, as they were
protected by the contract of security services which allows the recall of security guards from their assigned posts at the will of either party. It
also advanced that the complainants prematurely filed the subject cases without giving the [Agency] a chance to give them some
assignments.
On the part of [the Client], it averred further that there [was] no employer-employee relationship between it and the complainants as the
latter were merely assigned to its Cebu Branch under a job contract; that [the Agency] ha[d] its own separate corporate personality apart
from that of [the Client]. Besides, it pointed out that the functions of the complainants in providing security services to [the Clients] property
[were] not necessary and desirable to the usual business or trade of [the Client], as it could still operate and engage in its life insurance
business without the security guards. In fine, [the Client] maintains that the complainants have no cause of action against it.
Ruling of Respondent Commission

Respondent Commission ruled that the complainants were constructively dismissed, as the recall of the complainants from their long
time post[s] at [the premises of the Client] without any good reason is a scheme to justify or camouflage illegal dismissal.
It ruled Superstar Security Agency, Inc. vs. National Labor Relations Commission[8] and A Prime Security Services, Inc. vs. national Labor
Relations Commission[9] were not applicable to the case at bar. In the former, the security guard was placed on temporary off-detail due to
his poor performance and lack of elementary courtesy and tact, and to the cost-cutting program of the agency. In the latter, the relief of
the security guard was due to his sleeping while on duty and his repeated refusal to resume work despite notice.
In the present case, the complainants case, the complainants were told by the Agency that they lost their assignment at the Clients
premises because they were already old, and not because they had committed any infraction or irregularity. The NLRC applied RA
7641,[10] which gives retirement benefits of one-half month pay per year of service to retirable employees, viz.:
xxx As stated earlier xxx, the complainants were in the service of [the Client] for nearly twenty (20) years in the cases of Helcias Arroyo and
for more than twenty (20) years in the cases of Veronico Zambo and Rustico Andoy, which long years of service [appear] on record to be
unblemished. The complainants were then confronted with an impending sudden loss of earning for while the order of [the Agency] to
immediately report for reassignment momentarily gave them hope, there was in fact no immediate reinstatement. While it could have
been prudent for the complainants to wait, they were set unstable and were actually threatened by the statement of the personnel in
charge of [the Agency] that they were already old, that was why they were replaced.
Against these glaring facts is the new Retirement Law, R.A. 7641 which took effect on January 7, 1993 giving retirement benefits of month
pay per year of service to an employee upon reaching retirement age to be paid by the employer, in this case at quiet a sizeable amount
and in not so long due time as some of the complainants were described as already old.
As complainants were illegally dismissed, the NLRC ruled that they were entitled to the twin remedies of back wages for one (1) year
from the time of their dismissal on January 15, 1994, payable by both the Client and the Agency, and separation pay one-half month pay for
every year of service payable only by the Agency. Reinstatement was not granted due to the resulting antipathy and resentment among
the complainants, the Agency and the Client.
Hence, this petition.[11]
The Issues

In their memoranda, the Agency poses this question:[12]

xxx [W]hether xxx Sentinel is guilty of illegal dismissal[,]
On the other hand, the Client raises the following issues:[13]
Whether xxx [the complainants] were illegally dismissed by their employer, Sentinel Security Agency, Inc., and in holding petitioner to be
equally liable therefor.
Whether xxx petitioner is jointly and severally liable with Sentinel Security Agency, Inc., in the latters payment of backwages, 13th month pay
and service incentive leave pay to its employees xxx.
In sum, the resolution of these consolidated petitions hinges on (1) whether the complainants were illegally dismissed, and (2) whether
the Client is jointly and severally liable for their thirteenth-month and service incentive leave pays.
The Courts Ruling

The petition is partly meritorious.

First Issue: Illegal Dismissal

The private respondents transfer, according to Respondent Commission, was affected to circumvent the mandate of Republic Act
7641 (New Retirement Law), which by then had already taken effect, in view of the fact that the complainants had worked for both the
Client and the Agency for 10 to 20 years and were nearing retirement age. With this premise, the NLRC concluded that the guards were
illegally dismissed. The complainants add that the findings of the Commission match the remarks of the personnel manager of the Agency,
Feliciano Marticion; that is, that they were being replaced because they were already old. They insist that their service records are
unblemished; hence, they could not have been dismissed by reason of any just cause.
We agree that the security guards were illegally dismissed, but not for the reasons given by the public respondent. The aforecited
contentions of the NLRC are speculative and unsupported by the evidence on record. As the solicitor general said in his Manifestation in Lieu
of Comment, the relief and transfer order was akin to placing private respondents on temporary off-detail.
Being sidelined temporarily is a standard stipulation in employment contracts, as the availability of assignment for security guards is
primarily dependent on the contracts entered into by the agency with third parties. Most contracts for security services, as in this case,
stipulate that the client may request the replacement of the guards assigned to it. In security agency parlance, being placed off detail or
on floating status means waiting to be posted.[14] This circumstance is not equivalent to dismissal, so long as such status does not continue
beyond reasonable time.[15]
In the case at bar, the relief and transfer order per se did not sever the employment relationship between the complainants and the
Agency. Thus, despite the fact that complainants were no longer assigned to the Client, Article 287 of the Labor Code, as amended by RA
7641, still binds the Agency to provide them upon their reaching the retirement age of sixty to sixty-five years retirement pay or whatever else
was established in the collective bargaining agreement or in any other applicable employment contract. On the other hand, the Client is
not liable to the complainants for their retirement pay because of the absence of an employer-employee relationship between them.
However, the Agency claims that the complainants, after being placed off-detail, abandoned their employ. The solicitor general, siding
with the Agency and the labor arbiter, contends that while abandonment of employment is inconsistent with the filing of a complaint for
illegal dismissal, such rule is not applicable where [the complainant] expressly rejects this relief and asks for separation pay instead.
The Court disagrees. Abandonment, as a just and valid cause for termination, requires a deliberate and unjustified refusal of an
employee to resume his work, coupled with a clear absence of any intention of returning to his or her work.[16] That complainants did not pray
for reinstatement is not sufficient proof of abandonment. A strong indication of the intention of complainants to resume work is their allegation
that on several dates they reported to the Agency for reassignment, but were not given any. In fact, the contention of complainant is that
the Agency constructively dismissed them. Abandonment has recently been ruled to be incompatible with constructive dismissal. We, thus,
rule that complainants did not abandon their jobs.[17] We will now demonstrate why we believe complainants were illegally dismissed.
In several cases, the Court has recognized the prerogative of management to transfer an employee from one office to another within
the same business establishment, as the exigency of the business may require, provided that the said transfer does not result in a demotion
in rank or a diminution in salary, benefits and other privileges of the employee;[18] or is not unreasonable, inconvenient or prejudicial to the
latter;[19] or is not used as a subterfuge by the employer to rid himself of an undesirable worker.[20]
A transfer means a movement (1) from one position to another of equivalent rank, level or salary, without a break in the service;[21] and
(2) from one office to another within the same business establishment.[22] It is distinguished from a promotion in the sense that it involves a
lateral change as opposed to a scalar ascent.[23]
In this case, transfer of the complainants implied more than a relief from duty to give them time to rest a mere changing of the
guards. Rather, their transfer connoted a reshuffling or exchange of their posts, or their reassignment to other posts, such that no security
guard would be without an assignment.
However, this legally recognized concept of transfer was not implemented. The agency hired new security guards to replace the
complainants, resulting in a lack of posts to which the complainants could have been reassigned. Thus, it refused to reassign Complainant
Andoy when he reported for duty on February 2, 4 and 7, 1994; and merely told the other complainants on various dates from January 25 to
27, 1994 that they were already too old to be posted anywhere.
The Agency now explains that since, under the law, the Agency is given a period of not more than six months to retain the complainants
on floating status, the complaint for illegal dismissal is premature. This contention is incorrect.
A floating status requires the dire exigency of the employers bona fide suspension of operation, business or undertaking. In security
services, this happens when the clients that do not renew their contracts with a security agency are more than those that do and the new
ones that the agency gets. However, in the case at bar, the Agency was awarded a new contract by the Client. There was no surplus of
security guards over available assignments. If there were, it was because the Agency hired new security guards. Thus, there was no suspension
of operation, business or undertaking, bona fide or not, that would have justified placing the complainants off-detail and making them wait
for a period of six months. If indeed they were merely transferred, there would have been no need to make them wait for six months.
The only logical conclusion from the foregoing discussion is that the Agency illegally dismissed the complainants. Hence, as a necessary
consequence, the complainants are entitled to reinstatement and back wages.[24] However, reinstatement is no longer feasible in this
case. The Agency cannot reassign them to the Client, as the former has recruited new security guards; the complainants, on the other hand,
refuse to accept other assignments. Verily, complainants do not pray for reinstatement; in fact, they refused to be reinstated. Such refusal is
indicative of strained relations.[25] Thus, separation pay is awarded in lieu of reinstatement.[26]
Second Issue:

Clients Liability

The Client did not, as it could not, illegally dismiss the complainants. Thus, it should not be held liable for separation pay and back
wages. But even if the Client is not responsible for the illegal dismissal of the complainants, it is jointly and severally liable with the Agency for
the complainants service incentive leave pay. In Rosewood Processing, Inc. vs. National Labor Relations Commission,[27] the Court explained
that, notwithstanding the service contract between the client and the security agency, the two are solidarily liable for the proper wages
prescribed by the Labor Code, pursuant to Article 106, 107 and 109 thereof, which we quote hereunder:
ART. 106. Contractor or subcontractor.Whenever an employer enters into a contract with another person for the performance of the
former[s] work, the employees of the contractor and of the latter[s] subcontractor, if any, shall be paid in accordance with the provisions of
this Code.
In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall
be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the
contract, in the same manner and extent that he is liable to employees directly employed by him.
The Secretary of Labor may, by appropriate regulations, restrict or prohibit the contracting out of labor to protect the rights of workers
established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and job
contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be considered
the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code.
xxx In such cases [labor-only contracting], the person or intermediary shall be considered merely as an agent of the employer who shall be
responsible to the workers in the same manner and extent as if the latter were directly employed by him.
ART. 107. Indirect employer.The provisions of the immediately preceding Article shall likewise apply to any person, partnership, association
or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or
project.
ART. 109. Solidary liability.The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held
responsible with his contractor or subcontractor for any violation of any provision of this Code. For purpose of determining the extent of their
civil liability under this Chapter, they shall be considered as direct employers.
Under these provisions, the indirect employer, who is the Client in the case at bar, is jointly and severally liable with the contractor for
the workers wages, in the same manner and extent that it is liable to its direct employees. This liability of the Client covers the payment of the
service incentive leave pay of the complainants during the time they were posted at the Cebu branch of the Client. As service had been
rendered, the liability accrued, even if the complainants were eventually transferred or reassigned.
The service incentive leave is expressly granted by these pertinent provisions of the Labor Code:
ART. 95. Right to service incentive leave.(a) Every employee who has rendered at least one year of service shall be entitled to a yearly
service incentive leave of five days with pay.
(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay of
at least five days and those employed in establishments regularly employing less than ten employees or in establishments exempted from
granting this benefit by the Secretary of Labor after considering the viability or financial condition of such establishment.
(c) The grant of benefit in excess of that provided herein shall not be made a subject of arbitration or any court [or] admnistrative action.
Under the Implementing Rules and Regulations of the Labor Code, an unused service incentive leave is commutable to its money
equivalent, viz.:
Sec. 5. Treatment of Banefit. - The service incentive leave shall be commutable to its money equivalent if not used or exhausted at the end
of the year.
The award of the thirteenth-month pay is deleted in view of the evidence presented by the Agency that such claim has already been
paid to the complainants. Obviously then, the award of such benefit in the dispositive portion of the assailed Decision is merely an oversight,
considering that Respondent Commission itself deleted it from the main body of the said Decision.
WHEREFORE, the petition is DISMISSED and the assailed Decision and Resolution are hereby AFFIRMED, but the award of the thirteenth-
month pay is DELETED. Costs against petitioners.
SO ORDERED.

[G.R. No. 121621. May 3, 1999]

WESTIN PHILIPPINE PLAZA HOTEL, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION) and LEN RODRIGUEZ, respondents.
DECISION
QUISUMBING, J.:
Petitioner seeks to annul the Decision[1] of the Third Division of the National Labor Relations Commission dated March 29, 1995 in NLRC
NCR Case No. 00-07-04820-93, and its Resolution dated June 22, 1995 denying petitioners motion for reconsideration.
Private respondent was continuously employed by petitioner in various capacities from July 1, 1977 until his dismissal on February 16,
1993. Initially hired as pest controller, he was later posted as room attendant. Next he served as bellman, until he was finally assigned as
doorman in November, 1981, and stayed in that position until his employment was terminated by petitioner.
On December 28, 1992, private respondent received a memorandum from the management transferring him from doorman to linen
room attendant in the Housekeeping Department effective December 29, 1992. The position of doorman is categorized as guest-contact
position while linen room attendant is a non-guest contact position. The transfer was allegedly taken because of the negative feedback on
the manner of providing service to hotel guests by private respondent. This assessment was primarily based on the report of professional
shoppers engaged by petitioner to evaluate and review the various services of the hotel and its personnel. Earlier, private respondent had
figured in altercations with drivers of taxicabs servicing petitioners guests.
Instead of accepting his new assignment, private respondent went on vacation leave from December 29, 1992, to January 16, 1993. In
the meantime, the President of the National Union of Workers in Hotels, Restaurants and Allied Industries (NUWHRAIN) appealed to
management concerning private respondents transfer. In her response, Ms. Merceditas Santos, petitioners director for human resources
development, clarified that private respondents transfer is merely a lateral movement. She explained that management believed that private
respondent was no longer suited to be in a guest-contact position, but there was no demotion in rank or pay.
 When private respondent reported back to work, he still did not assume his post at the linen room. Notwithstanding several reminders
from the personnel department and even his union, private respondent refused to report to his new work station.
Thus, on February 11, 1993, private respondent was served with a memorandum asking him to explain in writing why no disciplinary
action should be taken against him for insubordination. The memorandum noted that while private respondent regularly came to the hotel
everyday, he just stayed at the union office. Private respondent was again reminded to report to his new job otherwise he would be clearly
defying a lawful order. In his reply private respondent, however, merely questioned the validity of his transfer without giving the required
explanation.
On February 16, 1993, petitioner terminated private respondents employment on the ground of insubordination. Feeling aggrieved,
private respondent filed with the Department of Labor and Employment which later indorsed to the NLRC for appropriate action a complaint
for illegal dismissal against petitioner. In a decision dated June 16, 1994, the labor arbiter declared that the dismissal was legal. Accordingly,
the complaint was dismissed for lack of merit.
On appeal, public respondent reversed the judgment of the labor arbiter. In its decision, it declared that the intended transfer was in
the nature of a disciplinary action.[2] It held that there was no just cause in dismissing private respondent and disposed of the case as follows:
WHEREFORE, premises considered, the appealed decision is hereby VACATED and a new one entered with the following dispositions:
a) Respondent is hereby ordered to pay backwages from February 16, 1993 to the date of this decision; and
b) To pay complainant separation pay equivalent to one (1) month pay for every year of service, in lieu of reinstatement.
All other claims are dismissed for lack of merit.
SO ORDERED.[3]
Its motion for reconsideration having been denied, petitioner filed this instant petition.
The fundamental issue to be resolved in this case is whether or not public respondent gravely abused its discretion in ruling that there
was no just and valid cause for dismissing private respondent. And the pivotal query is whether private respondent was guilty of
insubordination or not?
Petitioner contends that private respondents continued refusal to report to his new work assignment constituted gross insubordination. It
avers that the transfer of private respondent was a valid exercise of its management prerogative.
The contention of petitioner is meritorious. The labor arbiters decision, dated June 16, 1994, is amply supported by substantial evidence
and prevailing jurisprudence. It is error as well as grave abuse of discretion on public respondents part to hold otherwise.
Under Article 282 (a) of the Labor Code, as amended, an employer may terminate an employment for serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or representative in connection with his work. But disobedience to be a
just cause for dismissal envisages the concurrence of at least two (2) requisites: (a) the employees assailed conduct must have been willful
or intentional, the willfulness being characterized by a wrongful and perverse attitude; and, (b) the order violated must have been
reasonable, lawful, made known to the employee and must pertain to the duties which he has been engaged to discharge. [4]
In the present case, the willfulness of private respondents insubordination was shown by his continued refusal to report to his new work
assignment. Thus, upon receipt of the order of transfer, private respondent simply took an extended vacation leave. Then, when he reported
back to work, he did not discharge his duties as linen room attendant despite repeated reminders from the personnel office as well as his
union. Worse, while he came to the hotel everyday, he just went to the union office instead of working at the linen room. More than that,
when he was asked to explain why no disciplinary action should be taken against him, private respondent merely questioned the transfer
order without submitting the required explanation. Based on the foregoing facts, private respondents intransigence was very evident.
On the issue of legality and reasonableness of the order of transfer, it must be emphasized that this Court has recognized and upheld
the prerogative of management to transfer an employee from one office to another within the business establishment, provided that there
is no demotion in rank or a diminution of his salary, benefits and other privileges. This is a privilege inherent in the employers right to control
and manage its enterprise effectively.[5] Besides, it is the employers prerogative, based on its assessment and perception of its employees
qualifications, aptitudes and competence, to move him around in the various areas of its business operations in order to ascertain where the
employee will function with utmost efficiency and maximum productivity or benefit to the company. An employees right to security of tenure
does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer
him where he will be most useful.[6]
Indeed, petitioner is justified in reassigning private respondent to the linen room. Petitioners right to transfer is expressly recognized in the
collective bargaining agreement between the hotel management and the employees union as well as in the hotel employees handbook.
The transfer order was issued in the exercise of petitioners management prerogative in view of the several negative reports vis--vis the
performance of private respondent as doorman. It was a lateral movement as the positions of doorman and linen room attendant are
equivalent in rank and compensation. It was a reasonable relocation from a guest contact area to a non-guest contact area. Thus, public
respondents observation that private respondent was demoted because the position of doorman is more glamorous than that of a linen
room attendant is pure conjecture. Public respondents conclusion that the transfer was punitive in character could not be sustained for lack
of substantial basis.
Finally it must be stressed that to sanction the disregard or disobedience by employees of a reasonable rule or order laid down by
management would be disastrous to the discipline and order within the enterprise. It is in the interest of both the employer and the employee
to preserve and maintain order and discipline in the work environment. Deliberate disregard of company rules or defiance of management
prerogative cannot be countenanced. This is not to say that the employees have no remedy against rules or orders they regard as unjust or
illegal. They can object thereto, ask to negotiate thereon, bring proceedings for redress against the employer. But until and unless the rules
or orders are declared to be illegal or improper by competent authority, the employees ignore or disobey them at their peril.[7] In the case at
bar, private respondent was repeatedly reminded not only by management but also by his union to report to his work station but to no
avail. His continued refusal to follow a legal order brought on the fit consequence of dismissal from his position for which management could
not be justly faulted.
 WHEREFORE, the petition is hereby GRANTED. The assailed decision of the National Labor Relations Commission is hereby SET ASIDE. The
decision of the Labor Arbiter dated June 16, 1994, is REINSTATED. No pronouncement as to costs.
SO ORDERED.

G.R. No. 110388 September 14, 1995

ARTEMIO LABOR, PEDRO BONITA, JR., DELFIN MEDILLO, ALLAN ROMMEL GABUT, and IRENEO VISABELLA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, GOLD CITY COMMERCIAL COMPLEX, INC., and RUDY UY, respondents.

DAVIDE, JR., J.:

Petitioners filed this special civil action for certiorari seeking to reverse the decision of 24 September 1992 of public respondent National
Labor Relations Commission (NLRC), Fifth Division, in NLRC CA No. M-000834-92 (RAB 11-08-00742-91)1 which vacated and set aside the
decision of 27 March 1992 of Labor Arbiter Nicolas S. Sayon 2 declaring illegal the petitioners' dismissal from their employment by private
respondent Gold City Commercial Complex, Inc. (hereinafter Gold City) and ordering the latter to pay separation pay and other money
claims.
The petitioners were employees of Gold City at its Eye Ball Disco located at Tagum, Davao. In a complaint dated 19 August 1991 filed with
the Regional Office No. XI of the Department of Labor and Employment (DOLE) in Davao City, the petitioners charged Gold City with
violations of labor standards laws, specifically for underpayment of the minimum wage non-payment of 13th month pay for 1991, premiums
for holidays and rest days, holiday pay service incentive leave pay, night shift differential and allowance pursuant to RTWPB-XI-O2. 3
On 26 August 1991, the petitioners also filed with the NLRC Regional Arbitration Branch No. XI in Davao City a complaint against Gold City
and its President, herein private respondent Rudy Uy, for illegal dismissal and for the same violations of labor standards laws earlier
complained of. 4 This case was docketed as Case No. RAB-11-08-00742-91.
On 2 September 1991, one Atty. Rolando Casaway, representing Lee Manuela Suelto, Ellen de Guzman, Mary Grace Verano, and Percy
Hangad, all employees of Gold City, and Joenel de Mesa, a customer of Eye Ball Disco, wrote the Provincial Prosecutor of Davao
requesting that a criminal action against the petitioners for theft and/or estafa be instituted.5 In support thereof, he attached to his letter
the affidavits of de Mesa executed on 20 August 1991 and of the others he represented executed on 23 August 1991 6 wherein the affiants
attested to alleged acts committed by the petitioners during the period from June to August 1991 which deprived Eye Ball Disco of certain
amounts of money. According to the affiants, the petitioners would get the claim stubs from customers of Eye Ball Disco that entitle them to
one free drink each, but the petitioners did not surrender these stubs to the cashier and instead made the customers pay for the drinks;
then, later, when other customers ordered drinks, the petitioners would surrender these stubs to the cashier as "payment" for the drinks of
these other customers and pocket their payment. 7
On 11 September 1991, Labor Examiner Edgardo Diaz of the DOLE Regional Office No. XI submitted his report8to the Regional Director
wherein he confirmed the labor standards violations committed by Gold City, viz., (1) record-keeping; (2) underpayment of minimum
wage; (3) non-payment of holiday pay; and, (4) overtime premium. He further stated that:
. . . complainants have personally appeared before this Office to manifest that they have nor received the amounts
indicated in the Cash Vouchers submitted by the management of the subject establishment on July 23, 1991 as
payment for the Compromise Settlement representing salary differentials and allowances pursuant to Wage Order
RTWPB-XI-02.
Said Labor Examiner also submitted a computation of the amounts due the petitioners.9 He then recommended that the case be
indorsed to the NLRC because the amounts each of them is entitled to receive exceeded the jurisdictional limit of P5,000.00 for
money claims.
In the meanwhile, on 30 October 1991, 3rd Assistant Provincial Prosecutor Justino Aventurado of Davao handed down a
resolution10 dismissing the criminal complaint against the petitioners He found the story of the petitioners' co-employees and a customer
incredible and concluded thus:
Let it not be forgotten that the name of the game is evidence The precious time of the court, the efforts of all the parties
shall go to naught in cases bereft of evidence. This sort of offense involving money needs physical evidence not mere
words of mouth of respondents' [herein petitioners] own co-workers. Such weakness is worsened by the fact that the
complainant's [sic] witnesses who posture protectiveness of their employer's interest spoke only about the alleged
irregularities several days and even months after their commission. After the labor claims were filed.
If they are that loyal or protective of the establishment as they now appear to be, they should have reported the
irregularities a day after each offense.
WHEREFORE, finding no cause to hold respondents liable for estafa, this complaint is hereby dismissed.
The Provincial Prosecutor approved this resolution and the records fail to disclose if Gold City had taken any action to reverse the
resolution.
Thereafter, Case No. RAB-11-08-0042-91 pending before Labor Arbiter Nicolas Sayon became the sole venue of the legal battle between
the petitioners and Gold City. Both parties therein were required to submit their respective position papers. In their position paper, 11 the
petitioners alleged that Gold City prevented Labor, Visabella, Medillo, and Gabut from entering their work place on 22 August 1991 and
Bonita on 24 August 1991; that their time cards were taken off the time card rack; and that they were advised to resign They assailed the
notice of termination given to them by Gold City dated 6 September 1991, 12 and denied having abandoned their work for, as a matter of
fact, Labor was on an approved leave from 19 August to 21 August 1991 but was not allowed to return to work after that date. They
accused Gold City of unfair labor practice for illegally dismissing them in retaliation for their having filed a complaint for labor standards
violations against it. They also denied having signed any quitclaim or compromise settlement They further claimed the amounts found by
the Labor Examiner as due them from Gold City for the labor standards violations and prayed for full back wages and separation pay in
lieu of reinstatement.
In its Position Paper, 13 Gold City asserted that the petitioners were not illegally terminated but had abandoned their work by not reporting
to their place of employment beginning on 19 August (petitioners Labor and Bonita), 21 August (petitioners Medillo and Gabut), and 22
August (petitioner Visabella) 1991. It further alleged that as early as June 1991, the petitioners were under investigation for the dishonest
acts for which they were charged with estafa and/or theft in the Office of the Provincial Prosecutor, and to preempt any action to be
taken therein, the petitioners filed the "baseless and unfounded complaint" with the DOLE for the labor standards violation and furthermore,
abandoned their work to make it appear that they were illegally dismissed. It also alleged that on 6 September 1991, each of the
petitioners was sent a notice of possible termination due to abandonment or for absence without official leave or notice for six consecutive
days, with a warning that if no explanation is given within seven days from receipt thereof, they will be terminated, 14 but the petitioners
failed to reply to the notice and did not report for work. It then concluded that the abandonment justified their dismissal. As for the
petitioners' money claims, Gold City contended that the petitioners were paid the minimum wage and allowances, and that the
computation made by the DOLE (through the Labor Examiner) did not take into account the other benefits given to the petitioners, viz.,
board and lodging, meals, snacks, clothing and transportation allowance, and the fact that their Social Security Services (SSS) contributions
and cash advances were deducted from their gross pay. It further alleged that the petitioners had already "agreed to compromise
settlement before the DOLE, concerning money claims, as evidenced by cash vouchers 15 duly signed" 16 by them.
The petitioners submitted their Reply 17 to Gold City's position paper.
On 27 March 1992, the Labor Arbiter rendered his decisions 18 in favor of the petitioners, the dispositive portion of which reads as follows:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered:
1. Declaring the dismissal of complainants Artemio Labor, Pedro L. Bonita, Jr., Ireneo Visabella; Delfin Medillo and Allan
Rommel Gabut as ILLEGAL; and
1. Ordering respondent Gold City Commercial Complex, Inc. to pay the above-named complainants, the following:

Name Separation Money Claims Total

Pay Less 20%

(a) Artemio Labor P5,338.00 P24,741.80 P30,079.80

(b) Pedro Bonita, Jr. 5,338.00 24,741.80 30,079.80

(c) Ireneo Visabella 5,338.00 24,741.80 30,079.80

(d) Allan Rommel Gabut 5,338.00 24,741.80 30,079.80

(e) Delfin Medillo 5,338.00 18,251.41 23,589.41

or in the total amount of One Hundred Forty Three Thousand Nine Hundred Eight Pesos and 61/100 (P143,908.61).
SO ORDERED.
We quote his ratiocinations in support thereof:
After judicious scrutiny of the parties' pleadings, arguments, counter-arguments and evidences, this office finds for the
complainants.
First, on the illegal dismissal issue.
The approved application for leave of absence of complainants Labor and Bonita negates the abandonment charge
of respondents. Said applications, which were duly approved by respondent Rudy Uy showed that complainant Labor
was actually on leave from August 19 to 21, 1991; while complainant Bonita, on August 20 to 23, 1991. With such reality,
where could the abandonment of work lie?
Besides, the fact that complainants have immediately filed this complaint for illegal dismissal against them proves that
there was no intention on their part to sever their employment with respondents. It is well-settled in our jurisprudence that
"For abandonment to constitute a valid cause for termination of employment, there must be a deliberate, unjustified
refusal of the employee to resume his employment. This refusal must be clearly shown. Mere absence is not sufficient, it
must be accompanied by overt acts unerringly pointing to the fact that the employee does not want to work anymore"
(Flexo Manufacturing Corp. vs. NLRC, 135 SCRA 145, emphasis supplied).
Records likewise show that the issuance of notice of termination by respondents on September 6, 1991 was only a mere
subterfuge to shield themselves from the sanction of the law for having violated the mandatory requirements in the
termination of employment, which was issued long after complainants had filed this case.
Under the Labor Code, as amended, the requirements for the lawful dismissal of an employee by his employer are two-
fold: the substantive and the procedural. Not only must the dismissal be for a valid or authorized cause as provided by
law (Article 279, 281, 282-284, New Labor Code), but the rudimentary requirements of due process — notice and hearing
— must also be observed before an employee may be dismissed. One does not suffice; without their concurrence, the
termination would, in the eyes of the law be illegal. (Salaw vs. NLRC, G.R. No. 90786, Sept. 27, 1991).
Neither the alleged commission of acts of dishonesty by complainants would warrant the dismissal. It has no leg to stand
on. There is no sufficient proof or evidence that tend to show that complainants were really in cahoots with each other in
misappropriating the proceeds of the "unclaimed" free beer or softdrink due to the disco pub customers, except the
 bare allegations in the affidavits executed by one Joenel Mendoza and respondents' cashiers. Undoubtedly, they are
self-serving testimonies. In fact, it is more apparent that the charges imputed to complainants are pure prevarication as
respondents were bent to dismiss complainants in reprisal to the complaint they have filed with the DOLE.
Absent such two requirements, their dismissal is thus patently illegal. Complainants were constructively dismissed.
Payment of separation pay is proper under the circumstances, and as alternately prayed for by the complainants, which
will be computed at one-month pay for every year of service, a fraction of at least six months being considered as one
year. Thus, they are entitled [to the] equivalent [of] two months' salary or in the month of P5,338.00 for each of them
(P102.00 x 314 x 2)
12
Albeit respondents rebutted complainants' money claims through the submission of the latter's payslips, however, the
same could not be credited in their favor, being found spurious. The payslips, vis-a-vis respondents, did not bear any
entries such as meals, snacks, lodging and SSS contributions (Annexes "A", "B", Complainants' Reply to Respondents'
Position Paper). It is very obvious that those entries are belatedly added by respondents to lessen their actual liabilities to
complainants.
There being no other proofs like payrolls or vouchers that would support their compliance of labor standard laws,
complainants are awarded the following benefits: representing salary differential, 13th month pay for 1991 and holiday
[pay] as computed by this Office which is now part of the records of the case, to wit:

1 Artemio Labor — P30,927.24;

2 Ireneo Visabella — 30,927.24;

3 Allan Rommel Gabut — 30,927.24;

4 Pedro Bonita, Jr. — 30,927.24; and

5 Delfin Medillo — 22,814.27

This Office, however, took cognizance of the fact that complainants were extended free lodging, meals and snacks.
Considering that the monetary award due them was based on straight computations, we deem it equitable that a
twenty (20%) percent deduction is proper to offset those fringe benefits as well as absence, tardiness and non-working
days incurred during their tenure of employment.
As to the alleged receipt by complainants on the compromise settlement of P2,000.00 each, we find that they are not
estopped from claiming the monetary benefits due them. The Supreme Court has ruled:
The fact that petitioner received his retirement benefits voluntarily end executed a deed of release
and quitclaim does not militate against him. In the case of MRR Crew Union vs. PNR, 72 SCRA 88, We
held: "That the employee has signed a satisfaction receipt does not result in waiver, the law does not
consider as valid any agreement to receive less compensation; that what a worker is entitled to
recover." A deed of release or quitclaim cannot bar any employee from demanding benefits to
which he is legally entitled. (Fuentes vs. NLRC, 167 SCRA 767).
The rest of [the] money claim are hereby denied for lack of factual and legal basis.
As expected, Gold City appealed the Labor Arbiter's decision to the NLRC. On 24 September 1992, the NLRC promulgated the challenged
decision reversing that of the Labor Arbiter's and dismissing the petitioners' complaint. Essentially, the NLRC gave full faith and credit to the
same affidavits which were submitted in the aforementioned criminal complaint for estafa or theft filed against the petitioners, Accordingly,
it declared that the findings of the Labor Arbiter that the accusations made by Gold City are mere fabrications is not supported by the
evidence on record. To the NLRC, the filing by the petitioners of the complaint with the DOLE was made "to preempt respondents' lawful
prerogatives." It also ruled that there was abandonment by the petitioners and that Gold City, in terminating them, complied with the
procedural requirements since it gave notice and granted them an opportunity to explain their absences, which they did not avail of. In
ruling that the petitioners were not illegally dismissed, the NLRC found that just cause existed, viz., their dishonest acts which do not require
proof beyond reasonable doubt. As to the money claims, the NLRC ruled that the compromise settlements were freely and voluntarily
executed by the petitioners and their allegation that they were tricked into signing it and that the P2,000.00 was not given to them deserve
scant consideration; hence, they were estopped from claiming such monetary benefits pursuant to the rule laid down in Veloso
vs. Department of Labor and Employment, 19 which abandoned the ruling in Fuentes vs. National Labor Relations Commission 20 that the
Labor Arbiter relied upon.
Their motion for the reconsideration of the decision having been denied by the NLRC, the petitioners filed this special civil action
for certiorari where they alleged that the NLRC acted with grave abuse of discretion amounting to lack or excess of jurisdiction when:
(A) IT ABSOLUTELY AND TOTALLY DISMISSED THE CLAIMS OF PETITIONERS DESPITE THE FINDINGS OF FACTS MADE BY THE
LABOR ARBITER AND THE ADMISSION OF PRIVATE RESPONDENTS OF LIABILITIES AS STATED IN THEIR POSITION PAPER.
(B) IT HELD THAT PETITIONERS ABANDONED THEIR WORK DESPITE KNOWLEDGE THAT THE INSTANT CASE IS ALREADY
INSTITUTED AND THAT THEY COMMITTED ACTS OF DISHONESTY DESPITE SELF-SERVING AFFIDAVITS AND DISMISSAL OF THE
COMPLAINT.
We required the respondents to comment on the petition.
As expected, the private respondents in their comment support the NLRC and quoted the arguments adduced in their Memorandum of
Appeal filed with the NLRC. 21
The Office of the Solicitor General filed a Manifestation in lieu of a Comment 22 and prayed that the NLRC be required to file its own
comment. The said Office takes a stand adverse to the NLRC and in favor of the petitioners, and opines that Gold City was not able to
prove its charge of dishonesty. It disagrees with the NLRC's finding that, because its evidence consisting of the affidavits of its witnesses "very
clearly stated in detail how the complainants [petitioners herein] cheated the customers and the respondents as well," the petitioners are
unworthy of their employer's trust and confidence. On the contrary, the Office of the Solicitor General argues that the affidavits do not
specify the individual participation of the petitioners in the alleged losses incurred by Gold City, and it proceeds to examine the affidavits
and point out their flaws. It also noted that the affidavits which support the NLRC's decision were the very same affidavits upon which the
complaint filed with the Provincial Prosecutor was based and which was eventually dismissed for lack of evidence. It added that, although
it may be argued that the dismissal of the criminal case does not bar the employee's termination, the evidence, nevertheless, does not
support a conclusion that the petitioners committed the dishonest acts complained of.
The Office of the Solicitor General also maintains that the petitioners did not abandon their work, again disagreeing with the findings of the
NLRC. It sounded off its doubts as to the truth of the claim of dishonesty because these acts were not mentioned at all in the notices of 6
September 1991 given to the petitioners which referred only to their alleged absences without leave. If the accusations are true, contends
the Office of the Solicitor General, Gold City could have immediately acted upon them by, for instance, placing the petitioners under
preventive suspension or giving them the requisite notice and opportunity to be heard in the investigation it was allegedly conducting, but
it did not do anything. The Office of the Solicitor General concludes that there is no basis for the charge of loss of confidence. Furthermore,
the immediate filing of the case for illegal dismissal by the petitioners negates the theory of abandonment.
With respect to the money claims, the Office of the Solicitor General opines that the petitioners are entitled to them and their recovery is
not barred by the compromise settlement. It contradicts the opinion of the NLRC that the case of Veloso had abandoned the rule in
Fuentes, citing Philippine National Oil Company vs. National Labor Relations Commission 23 decided by this Court more recently than Veloso
wherein we reaffirmed the rule that quitclaims do not bar recovery by the employees of their claims because such quitclaims are frowned
upon as contrary to public policy. It also said that the petitioners are still entitled to their money claims because the alleged compromise
settlement was for an unconscionably lower amount than that awarded to them by the Labor Arbiter.
It its own comment, 24 the NLRC sustains its challenged resolution and submits that the issues raised are factual and that there is no showing
that the NLRC committed such abuse of discretion but rather, its assailed decision "is based on the records and ably supported by the
evidences presented by the parties." As to the compromise agreements, it maintained that they are valid since they were freely and
voluntarily executed by the parties.
We resolved to give due course to the petition and required the parties to submit their respective memoranda. Only the petitioners
submitted their memorandum. 25 The NLRC and the private respondents manifested that their separate comments will serve as their
memoranda.
We decide in favor of the petitioners.
The first assigned error involves the question of whether or not Gold City is guilty of labor standards violations. The findings regarding this
issue made by the Labor Arbiter and the NLRC are opposed to one another. While it is well-established that the findings of facts of the NLRC
are entitled to great respect and are generally binding on this Court, it is equally well-settled that the Court will not uphold erroneous
conclusions of the NLRC when the Court finds that the latter committed grave abuse of discretion in reversing the decision of the labor
arbiter or when the findings of facts from which the conclusions were based were not supported by substantial evidence. 26
The Labor Arbiter adopted the findings of the Labor Examiner that Gold City committed violations of the labor standards laws. Gold City did
not contest nor protest the findings when it was presented with a copy of the report made by the Labor Examiner. 27 It raised its defenses
only in the position paper it submitted to the Labor Arbiter. The unexplained delay in presenting pertinent documents to support its defenses
strengthens the assertion of the petitioners that the pay slips presented by Gold City, which the latter claims show proper deductions that
the petitioners knew of, were falsified, and that the deductions were added only after these had already been signed by them.
Recovery of the petitioners' money claims for the violations of labor standard laws are not barred by the alleged compromise agreements
signed by the petitioners. Contrary to the NLRC's opinion, Veloso did not overturn the rule laid down in Fuentes The said cases are not
founded on similar or identical facts, thus accounting for the difference in the rulings made therein. In fact, we said in Veloso that the case
of Pampanga Sugar Development Co., Inc. vs. Court of Industrial Relations 28 relied upon by the petitioners therein and which enunciated
the same rule later applied in Fuentes, is not applicable to Veloso because the pertinent facts differ. Veloso did not lay down a rule totally
different from what this Court had set in Pampanga or even in Fuentes and other similar cases. Veloso does not even apply in this case
because the petitioners had asserted, and Gold City did not prove the contrary, that they initially refused to sign a document purportedly
waiving their claims but were later tricked into signing the vouchers which turned out to be for alleged compromise settlements at
P2,000.00 for: each of them. We are inclined to agree with the petitioners. Gold City has not submitted any compromise agreement
attended with the formulations of law. 29 All that it has are the cash vouchers, dated 17 July 1991, which states under the heading
PARTICULARS: "To payment of Compromise Settlement representing Salary Differentials and Allowances as per RTWPB-X1-02." Of course, a
voucher purporting to represent payment of the consideration in a compromise agreement in not the compromise agreement, itself. Since
Gold City did not submit any compromise agreement, then it is logical to presume that none existed for it had the burden of proving its own
assertions.
Even if the petitioners did enter into a compromise settlement with Gold City, such agreement would be valid and binding only if,
per Veloso, quoting Periquet vs. National Labor Relations Commission, 30 the agreement was voluntarily entered into and represents
a reasonable settlement of the claims. In this case, as in Fuentes, the amounts purportedly received by the petitioners were unreasonably
lower than what they were legally entitled to.
Furthermore, like in Pampanga, the "compromise settlements" with the petitioners were not executed with the assistance of the Bureau of
Labor Relations or the Regional Office of the DOLE pursuant to Article 227 of the Labor Code. The records do not disclose that the
assistance of such office was ever solicited. What Gold City did was merely to file with the Regional Office of the DOLE in Davao City the
vouchers purporting to show payments of the alleged considerations of the "compromise settlements." Such filing can by no stretch of the
imagination be considered as the requisite assistance in the execution of compromise settlements.
Finally, we also note that the alleged vouchers were dated 17 July 1991 or before the filing of any complaint with the DOLE on 19 August
1991 and even before the Labor Examiner submitted his findings of violations by Gold City. If indeed the parties entered into such
compromise agreements, then Gold City should have submitted the vouchers to the Labor Examiner to refute the petitioners' claim and put
an end to the controversy.
Having dispensed with the first error ascribed to the NLRC, the next issue to be resolved is whether the petitioners abandoned their jobs
and, consequently, whether their dismissal due to abandonment was lawful.
To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason, and
(2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being
manifested by some overt acts. 31 Mere absence is not sufficient. 32 It is the employer who has the burden of proof to show a deliberate and
unjustified refusal of the employee to resume his employment without any intention of returning. 33 Gold City failed to discharge this burden.
It did not adduce any proof of some overt act of the petitioners that clearly and unequivocally show their intention to abandon their posts.
On the contrary, the petitioners lost no time in filing the case for illegal dismissal against them, taking only four days from the time most of
them were prevented from entering their work place on 22 August 1991 to the filing of the complaint on 26 August 1991. They cannot, by
any reasoning, be said to have abandoned their work, for as we have also previously ruled, the filing by an employee of a complaint for
illegal dismissal is proof enough of his desire to return to work, thus negating the employer's charge of abandonment. 34 Furthermore,
petitioners Labor and Bonita presented proof that during some of those days that they were supposedly on AWOL (absence without official
leave), they were actually on official leave as approved by no less than Rudy Uy himself. 35 Neither Gold City nor Rudy Uy had disputed this.
It may further be observed that the timing of Gold City's alleged refusal to allow the petitioners to enter their work place is highly suspicious.
It happened on 22 August 1991 or only two days after the petitioners filed their complaint for labor standards violations with the DOLE. Mere
coincidence? We think not. What it is, though, is evidence that lends credence to the allegation of the petitioners that they did not
abandon their employment as Gold City asserts but were prevented from going to work. Thus, we cannot agree with the NLRC when it said
that the petitioners "ha[d] to jump the gun against the respondents in order to save their faces from their own wrong doings, dishonest acts"
by filing the case for illegal dismissal against the respondents.
Equally baseless is the charge of dishonesty which Gold City also relies upon to justify the dismissal of the petitioners from their employment.
A charge of dishonesty involves serious misconduct on the part of the employee, a breach of the trust reposed by the employer upon him.
The rule that proof beyond reasonable doubt is not required to terminate an employee on the charge of loss of confidence and that it is
sufficient that there is some basis for such loss of confidence is not absolute. 36 The right of an employer to dismiss employees on the ground
that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause. 37 For loss of trust and confidence to
be a valid ground for an employee's dismissal, it must be substantial and not arbitrary, and must be founded on clearly established facts
sufficient to warrant the employee's separation from work. 38
Unfortunately for Gold City, the evidence it adduced is insubstantial, inadequate, and unreliable to support a conclusion that the
petitioners are even remotely guilty of the acts they are accused of committing. On this matter, we agree with the observations and
conclusions of the Office of the Solicitor General which we quote with approval, to wit:
Indeed, an examination of the affidavits would reveal that the alleged offenses complained of and through which
private respondent Gold City sustained losses estimated at P216,000.00 are couched in general terms and do not
specifically mention the individual participation of each of the petitioners in the alleged losses. For instance, in the
affidavit . . . of Lee Manuela Suelto, the following will be noted:
(i) allegedly the order slip marked "Mrs. Ima V" was missing but it does [not] mention who is responsible
for it;
(ii) allegedly petitioner Visabella or Arnold Veloso did not remit the amount of P60.00 collected by
Visabella from a customer but goes on to conclude that both of them pocketed the amount;
(iii) allegedly the amount paid by a customer for several bottles of beer and soft drinks to petitioner
Visabella was turned over to Veloso but concludes that both of them pocketed it;
(iv) allegedly petitioner Visabella crumpled and threw away an order slip he made out for four (4)
bottles of beer and four (4) soft drinks after receiving payment from the said order but does not
indicate if he appropriated the same;
(v) allegedly petitioner Gabut admitted to affiant that he and Arnold Veloso made some money on
an order slip for draft beer and the former would give the latter part of the money, if he was inclined
to do so since they were at odds at that time. The admission, however, is hearsay and inadmissible
against petitioner Gabut.
On the other hand, the affidavits of Mary Grace Verano, Ellen de Guzman and Renato Dalugdog (Annexes "C", "D" ,and
"F", respectively, of Annex "D", Petition) are pro forma and, except for the different sates of the incidents mentioned
therein, invariably show that petitioners, on three separate occasions from June to August, 1991, failed to remit the
money collected by them allegedly remitted stubs of entrance tickets which entitled customers to free drinks.
If it is true that petitioners were cheating their employer in the manner described in the affidavits of private respondents'
witnesses, how come that they, who held the position of confidence as cashiers, tolerated the practice from June 1991
and blew the whistle only after petitioners filed a complaint of underpayment of wages in August 19, 1991? As pointed
out by the investigating prosecutor, the affiants should have reported the irregularities a day after each offense.
The same may be said of the affidavit (Annex "A" of Annex "D", Petition) of Joenel de Mesa and the affidavit of Percy
Hangad (Annex "B" of Annex "D", Petition), both of which substantiate the alleged modus operandi of petitioners. The
alleged offenses happened in June, 1991 and they came with a clean breast of it only on August 20 and 23, 1991.
Moreover, establishing the mode by which petitioners allegedly cheated private respondent Gold City does not
necessarily prove their complicity.
It is private respondents' posture that great weight should be given to the affidavit of Joenel de Mesa, a mere customer
whose only alleged desire is to protect the public similarly situated with him. However, de Mesa charges only Visabella of
 using his (Mesa's) entrance ticket stub deprive private respondents of P60.00. The same could not be imputed to his so-
petitioners.
Although the employer's evidence is not required to be of such degree as is required in criminal cases, i.e., proof beyond
reasonable doubt, such must be substantial The same must clearly and convincingly establish the facts upon which loss
of confidence in the employer may be made to rest. (Starlite Plastic Industrial Corporation v. NLRC, 171 SCRA 315 [1989].
In the instant case, private respondents have not clearly and convincingly shown by substantial evidence the individual
participation of each of the petitioners in depriving their employer of the estimated amount of P216,000.00 per year. As
correctly pointed out by the investigating prosecutor, there was no cause to hold petitioners liable for the offense
imputed to them.
It may be argued by private respondents that the acquittal of an employee in a criminal case does not guarantee his
reinstatement or that the dropping of a criminal prosecution for an employee's alleged misconduct does not bar his
dismissal. (Starlite Plastic Industrial Corp. Supra).
Still, such an argument would fail to impress since petitioners' actual involvement or participation in the irregularities
complained of have not been proven. Private respondents failed miserably even to establish a prima facie case against
them in the prosecutor's office and, precisely, because of such absence of evidence, the case was dismissed. What
private respondents had were "mere words of mouth" and generalities which are not sufficient to afford reasonable
ground for belief that petitioners were responsible for the misconduct imputed to them.
In the words of the Labor Arbiter, the alleged commission of acts of dishonesty had no leg to stand on. They are but
prevarications in reprisal to the complaint filed by petitioners with the DOLE.
There being no abandonment or commission of dishonest acts by the petitioners, no just cause exists to dismiss them, hence, their
termination by Gold City is illegal. The fact that Gold City sent them notices on 6 September 1991 becomes irrelevant. It does not cure the
illegality of their dismissal for lack of just cause. It is interesting to note, however, that in its letters of 6 September 1991 individually addressed
to the petitioner, Gold City sought an explanation from the petitioners on their alleged absence without official leave or, in short, their
abandonment, and warned them in the form of a reminder that such absence is a ground for separation or dismissal from the company.
Nothing is mentioned about dishonesty or any other misconduct on the part of the petitioners. If indeed the petitioners were guilty of both
abandonment and dishonesty or misconduct, then Gold City should have put them down in black and white. The letters cum notice
cannot then be considered to include dishonesty or misconduct. It would be a gross violation of the petitioners' right to due process to
dismiss them for that cause of which they were not given notice or for a charge for which they were never given an opportunity to defend
themselves. A dismissal must not only be for a valid or substantial cause; the employer must also observe the procedural aspect of due
process in giving the employee notice and the opportunity to be heard and to defend himself. 39
At the same time, when the petitioners were dismissed by preventing them from entering their work place, no previous notice of any kind
was given to them at all. The case for illegal dismissal was filed on 26 August 1991, or at least eleven days before the date of the notices.
The subsequent notices cannot cure the lack of notice prior to the illegal dismissal of the petitioners on 22 August and 24 August 1991.
As for the money claims of the petitioners, the award made by the Labor Arbiter must be upheld, subject to the modification with respect
to the addition of an award for back wages which the Labor Arbiter should have made but did not.
This Court, after scrutinizing the documents and evidence before it, agrees with the findings of the Labor Arbiter on Gold City's disclaimer of
liability for the money claims and adopts them herein, the pertinent portions of which are as follows:
Albeit respondents rebutted complainants' money claims through the submission of the latter's payslips, however, the
same could not be credited in their favor, being found spurious. The payslips, vis-a-vis respondents, did not bear any
entries such as meals, snacks, lodgings and SSS contributions (Annexes "A," "B," Complainants' Reply to Respondents'
Position Paper). It is very obvious that those entries [were] belatedly added by respondents to lessen their actual liabilities
to complainants.
There being no other proofs like payrolls or vouchers that would support their compliance [with] labor standard benefits:
representing salary differentials, 13th month pay for 1991 and holiday [pay] as computed by this Office which is now part
of the records of this case, to wit:

1 Artemio Labor — P30,927.24;

2 Ireneo Visabella — 30,927.24;

3 Allan Rommel Gabut — 30,927.24;

4 Pedro Bonita, Jr. — 30,927.24; and

5 Delfin Medillo — 22,814.27 40

From the above amounts, the Labor Arbiter deducted twenty percent (20%) therefrom to represent the benefits which the petitioners
received, such as lodging, meals and snacks, as well as for absences, tardiness, and for non-working days when no work was performed by
them because, as it stated, "the monetary award due to them was based on straight computations." 41 Though the Labor Arbiter did not
explain why an arbitrary figure of 20% was used to represent these deductions, since the petitioners did not raise this as an issue and we do
not find any reason to delete or modify it, this value for deductions, from the total money claims to be awarded to the petitioners must stay.
With respect to the award of separation pay, the same was properly made and is affirmed. Ordinarily, a finding that an employee has
been illegally dismissed entitles him to reinstatement to his former position without loss of seniority rights and to the payment of back
wages. 42 But in this case, the petitioners did not pray for reinstatement in the position paper they filed with the Labor Arbiter. 43 The latter in
turn ordered the payment of separation pay in lieu of reinstatement and this is part of the decision that the petitioners seek to be affirmed
by this Court. That being the case, and as we have said before, if the employee decides not to be reinstated, the employer shall pay him
separation pay in lieu of reinstatement. 44 This is only just and practical because reinstatement of the petitioners will no longer be in the best
interest of both the petitioners and Gold City considering the animosity and antagonism that exists between them brought about by filing
of charges both parties against each other in the criminal as well as in the labor proceedings. 45 Gold City had also refused entry to the
petitioners into their work place, giving rise to strained relations between the parties which make reinstatement unacceptable to them. The
petitioners would then be entitled to separation pay equivalent to at least one month's salary for every year of service in lieu of
reinstatement in addition to their full back wages.
The Labor Arbiter, however, failed to award wages despite its ruling that the petitioners were illegally dismissed. We thus deem it proper to
make such an award herein in addition to the money claims for labor standards violations and for the separation pay. As a rule, full back
wages are computed from the time of the employee's illegal dismissal until his actual reinstatement, but since in this case, reinstatement is
not possible, the back wages must be computed from the time of the petitioners' illegal dismissal until the finality of our decision
herein. 46 This amount due the petitioners for back wages, however, is subject to deductions for any amount which the petitioners may
have earned during the period of illegal termination. 47 Computation of full back wages and presentation of proof as to income earned
elsewhere by the illegally dismissed employees after their termination and before full payment is effected by Gold City should be ventilated
in the execution proceedings before the Labor Arbiter in accordance with the appropriate rules of procedure of the NLRC. 48
WHEREFORE, the decision of public respondent National Labor Relations Commission in NLRC CA No. M-000834-92 (RAB 11-08-00742-91) is
hereby SET ASIDE and the decision of the Labor Arbiter is REINSTATED, with the addition of an award of full back wages to each of the
petitioners from the time of their illegal termination until the finality of this decision.
SO ORDERED.
G.R. No. L-65706 December 11, 1992
TOP FORM MFG. CO., INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and JULIANA MALUBAY, respondents.

MELO, J.:
Before Us is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the decision of respondent National Labor
Relations Commission (NLRC), in its NCR Case No. AB-1-9943-81 entitled, "Juliana Malubay vs. Top Form Manufacturing (Phils.), Incorporated"
which ordered wherein petitioner to reinstate private respondent Juliana Malubay to her former position, without loss of seniority rights and
other privileges appertaining thereto with one (1) year backwages without deduction.
The antecedent facts of this case are as follows:
Private respondent Jualiana Malubay began her employment with the petitioner Top Form Manufacturing (Phils.), Incorporated in March,
1979, as Plant Supervisor, with a starting salary of P1,200.00 per month. She was initially assigned to supervise a factory line of sixty machine
operators. One month thereafter, she was given one more factory line, also with sixty workers, to supervise. Sometime in August, 1979, she
was given a salary adjustment of P300.00 a month and in February of the following year, another increment in salary was received by her in
the amount of P150.00 per month. Moreover, in October, 1980 she was promoted to the position of Over-All Quality Supervisor in the first
shift, from 5:45 a.m. to 1:45 p.m. with a corresponding increase in salary of P350.00 a month. As such Head Supervisor, she had control and
supervision over the entire first shift consisting of 120 machine operators and some six line-in-charge. She was also responsible not only for
the production and output but also for the quality of products. In addition to her functions, she was likewise given the task of training newly-
hired factory workers and of supervising the repair group composed of several employees.
On January 10, 1981, a Saturday, at about 2:00 o'clock in the afternoon, private respondent and her co-supervisors were called to a
meeting at the conference room by Dickson Chan, Production Manager. During the conference, Dickson Chan reviewed and examined
as usual the production report for the day and he declared the he was not satisfied with the production output, berating private
respondent and the other supervisors, thus:
You Filipinos are lazy people, and your Philippine laws are no good, even your government is no good. In Hongkong,
factory workers can buy the most expensive foods and clothes in the world, but, here, you Filipinos are like beggars, it is
just because you are all lazy.
Thereafter, he crumpled the production report and again threw invectives at private respondent and her co-supervisors, to wit:
You are bullshits, you Filipinos, get out, you are all lazy, you are like pigs, all of you go home. I do not want to see your
face again.
Not satisfied and contended with what he had said. Dickson Chan picked up the stapler on his desk and, but for some better impulse,
would have thrown the same at private respondent and her companions who, frightened, as they were, dispersed.
As a result of this unfortunate incident, private respondent told and instructed her co-supervisors, "Huwag pumasok sa lunes para matauhan
si Dickson." Thus, on the next working day, January 12, 1981, a Monday, they absented themselves from work. However, on January 13,
1981, she and her companions reported for work.
On January 16, 1981, petitioner filed an application for clearance to terminate the services of private respondent on the ground of "Loss of
Management Confidence". Meanwhile, private respondent was placed under preventive suspension leading to her termination effective
January 13, 1981.
Thereafter, on January 19, 1981, private respondent filed a complaint for illegal dismissal against herein petitioner before the Ministry of
Labor and Employment, National Capital Region, Arbitration Branch in Manila.
On May 29, 1981, Labor Arbiter Conrado O. Lasquite rendered a decision dismissing private respondent's complaint. However, upon
elevation of the matter to the NLRC, said body, in a decision dated December 29, 1982, reversed the Arbiter and accordingly disposed:
 WHEREFORE. in view of the foregoing considerations, the Decision appealed from is hereby set aside and another one
entered, directing the respondent company, thru its responsible officials, to reinstate complainant to her former position,
without loss of seniority rights and other privileges appertaining thereto with one (1) year backwages without deduction
considering that complainant is not entirely blameless.
SO ORDERED. (p. 8. NLRC's Decision; p. 23, Rollo.)
On March 2, 1983, petitioner filed a motion for reconsideration of the aforementioned decision of the NLRC but the same was denied on
October 12, 1983, for lack of merit.
Hence, the instant petition.
Very simply, the crux of the matter to be resolved in the petition is whether or not private respondent's services may be terminated for loss
of trust and confidence.
Petitioner argues that respondent Malubay committed willfull breach of trust and confidence reposed upon her when she agitated and led
the boycott against petitioner. It is further averred that private respondent was not merely a participant in the drama but the leader of the
maverick group of supervisors who staged the boycott; that Malubay, as a managerial employee, being Head Supervisor of the entire first
shift consisting of 120 machine operators, her powers and functions are central to the effective operation of the company which entails the
conferment of the highest degree of trust and confidence, but because of what she did, she had shown her unworthiness to continue in
the employ of the company.
On the other hand, private respondent submits that the contentions of the petitioner are devoid of merit. Private respondent claims that
she cannot be dismissed for loss of trust and confidence if said prerogative of the employer is abusively and whimsically exercised. As a
matter of fact, according to private respondent, it was Dickson Chan who was at fault when the latter vituperated against private
respondent and the other supervisors present at the conference. Private respondent further asserts that Chan maligned not only the
employees but also the entire Filipino people, the laws and the government of this Republic, so that the company should have understood
her feelings and actions.
The petition is well-taken.
The employer has a distinct prerogative to dismiss an employee if the former has ample reason to distrust the latter or if there is sufficient
evidence to show that the employee has been guilty of breach of trust. This authority of the employer to dismiss an employee cannot be
denied whenever acts of violation are noted by the employer. The law does not require proof beyond reasonable doubt of the employee's
misconduct before the employer can invoke such justification. It is sufficient that there is some basis for the loss of trust or that the employer
has reasonable grounds to believe that the employee is responsible for the misconduct and that the nature of the employee's action
renders the employee unworthy of the trust and confidence demanded of the position (Valladolid vs. Inciong. 121 SCRA 205 [1983]; DOLE
Philippines, Inc. vs. NLRC, 123 SCRA 673 [1983]; Ocean Terminal Services, Inc. vs. NLRC, 197 SCRA 491 [1991]; Baguio Country Club
Corporation vs. NLRC and GENOVE, G.R. No. 102397, September 4, 1992).
It is an inherent right of the employer to dismiss an employee for loss of confidence. We have a plethora of decisions that supports and
recognizes this authority of the employer to cut its relationship with the employee. In the case at bar, it is an admitted fact that private
respondent is an employee occupying a high managerial position which entails great responsibility. Thus, petitioner was justified in
terminating the employment of the private respondent when she committed acts inimical to her employer's interest. We shall not belabor
the time-honored tenet that while the law protects the rights of the employee, it cannot authorize the oppression or self-destruction of the
employer. As We ruled in Almira vs. B.F. Goodrich Philippines, Inc.(58 SCRA 120 [1974]), through then Chief Justice Enrique Fernando:
. . . The basic doctrine underlying the provisions of the Constitution so solicitous of labor as well as the applicable
statutory norms is that both the working force and the management are necessary components of the economy. The
right of labor has been expanded. Concern is evident for its welfare. The advantages thus conferred, however, call for
attendant responsibilities. The ways of the law are not to be ignored. Those who seek comfort from the shelter that it
affords should be the last to engage in activities which negate the very concept of a legal order as antithetical to force
and coercion . . . It is even more important that reason and not violence should be its milieu. (at pp. 131-132.)
In the present petition. We cannot condone the act of private respondent in inciting her co-supervisors and leading them in the boycott
and wildcat strike. As aptly observed by the Labor Arbiter:
Even assuming that complainant was berrated by the Production Manager due to under par production output, her
remedy is not to sabotage or boycott company operations; she should have gone to higher management levels in order
to redress her grievances against her abusive immediate supervisor. Getting even with the company for the misdeed of
only one person, the Production Manager, is totally uncalled for. (p. 4, Labor Arbiter's Decision; p. 14, Rollo.)
Further, We have laws to protect her and her co-supervisors from oppressive foreigners. She should not have taken the laws in her own
hands. Private respondent should have viewed the incident between her and the Production Manager from a professional point of view.
However, due to her precipitate and irrational action, she hurt the company instead.
The Labor Code, specifically Article 283, acknowledges the right of the employer to put an end to the covenant with the employee, thus:
Termination by employer. — An employer may terminate an employee for any of the following just causes:
a. x x x
b. x x x
c. Fraud and willfull breach by the employee of the trust reposed in him by his employer or his duly authorized agent.
It cannot be gainsaid, in this regard, that the act of private respondent in initiating and leading the boycott, thereby disrupting and
impairing company operations, is sufficient reason for petitioner to lose its trust and confidence on private respondent, considering that the
latter is a managerial employee of the company whose position carries the corresponding highest degree of responsibility in improving and
upholding the interests of the employer and in exemplifying the utmost standard of discipline and good conduct among her co-
employees. Withal, the termination of her employment is justified.
In the light of the foregoing, We are of the opinion, and so hold, that respondent NLRC acted with grave abuse of discretion in ordering the
reinstatement of Malubay because Top Form Mfg. (Phil.). Inc. had just cause to dispense with services of private respondent. Nonetheless,
considering that Juliana Malubay had worked with the company, as the record shows, with zeal, competence and dedication with no
known previous bad record, the ends of social and compassionate justice would be well served if she is paid full separation pay (National
Steel Corporation vs. Leogardo, Jr., 130 SCRA 502 [1984]: Engineering Equipment, Inc. vs. NLRC, 133 SCRA 752 [1984]; Firestone Tire and
Rubber Co. of the Phils. vs. Lariosa, 148 SCRA 187 [1987]).
ACCORDINGLY, the petition is GRANTED. The decision of the National Labor Relations Commission dated December 29, 1982 is REVERSED
and SET ASIDE. Petitioner Top Form Manufacturing (Phils.), Incoporated is directed to pay private respondent Juliana Malubay separation
pay to which she may be entitled under the law, or any collective bargaining agreement or company rules or practice, whichever is
higher.
SO ORDERED.
G.R. No. 100749 April 24, 1992
GT PRINTERS and/or TRINIDAD G. BARBA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (4TH DIVISION) and EDWIN RICARDO, respondents.

GRIÑO-AQUINO, J.:
The private respondent, Edwin Ricardo, was employed in 1968 as an apprentice of GT Printers, a single proprietorship owned by Mrs.
Trinidad Barba of East Capitol Site, Cebu City. Having gained enough experience and expertise in the printing business and after
undergoing special schooling in Manila at company expense, Ricardo was promoted to the position of production manager of GT Printers.
In 1978, he became general manager after the untimely demise of the owner's husband, who held that position. Ricardo earned a monthly
basic salary of P1,680, an ECOLA of P485, representation allowance of P1,000 and or top of these, a three (3%) per cent share in the gross
receipts of the business.
In February, 1985, Ricardo's wife established Insta Printers, a rival printing press, with Edwin Ricardo himself as consultant and owner. Since
the establishment of Insta Printers, Ricardo became a habitual absentee from his job at GT Printers. He neglected his duties and
responsibilities, and became lax in directing and supervising the work force, resulting in numerous major printing errors and failure to meet
printing specifications leading to the rejection of several job orders from regular customers.
Mrs. Barba noticed that Ricardo not only used GT Printers' bookcloth and other printing materials for his Insta Printers, but he also gave
specific instructions to the production staff to give priority to book and magazine job orders for Insta Printers. Eventually, the regular
customers of GT Printers were pirated by Insta Printers. Ricardo also manipulated price quotations during the canvassing of bids to favor his
own outfit instead of GT Printers.
Because of those irregularities, GT Printers suspended Ricardo as general manager for 30 days. Effective June 18, 1986, Richard Barba was
designated to take his place. Contracts concluded by respondent Ricardo thereafter were no longer honored. However, he continued to
be a sales agent for GT Printers, hence, he continued to receive commissions. Notices of his investigation scheduled on July 24, 1986 and
August 13, 1986 were sent to him but he did not appear at the investigation. He stopped reporting for work and soon after filed a complaint
for illegal dismissal in the Regional Arbitration Branch No. VII, of the Department of Labor and Employment in Cebu City, entitled "Edwin
Ricardo vs. GT Printers and/or Trinidad G. Barba." (NLRC Case No. RAB-VII-0398-86)
The case was heard by Labor Arbiter Bonifacio Tumanak who rendered a decision on January 4, 1990 finding that Ricardo was lawfully
dismissed from employment. Nevertheless, the Labor Arbiter ordered the payment to him of separation pay equivalent to one-half month
pay for every year of service (pp. 28-42, Rollo).
Ricardo appealed that decision to the NLRC which on April 18, 1991 (pp. 43-51, Rollo), set aside the labor arbiter's decision and entered a
new one, finding Ricardo's dismissal illegal and ordering his reinstatement with backwages. However, aware that strained relations had
developed between the parties, the Commission ordered GT Printers to pay Ricardo backwages for three (3) years and separation pay of
one month for every year of service in lieu of reinstatement.
GT Printers filed a motion for reconsideration but it was denied. Hence, this petition for review on certiorari, with a prayer for the issuance of
a writ of preliminary injunction or temporary restraining order. On July 29, 1991, the Court issued a temporary restraining order upon
petitioner's filing a P100,000 bond enjoining the respondents to desist from enforcing the NLRC decision during the pendency of this action.
The petition for review is premised on the petitioner's contention that grave abuse of discretion was committed by the NLRC —
1. in disregarding the labor arbiter's findings of fact;
2. in finding that Ricardo was denied due process before being dismissed on July 18, 1986;
3. in finding that Ricardo was dismissed without just cause; and
4. in reversing the decision of the labor arbiter and ordering Ricardo's reinstatement with payment of back wages and
separation pay.
The petition has merit.
The twin requirements of a valid termination: due process and just cause — were met substantially for Ricardo was given ample opportunity
to appear at the two scheduled investigations in order to present his side, but he chose to boycott the investigation. Even at the hearing
before the Labor Arbiter, he waived, through counsel, the presentation and cross-examination of witnesses.
Due process does not necessarily mean or require a hearing, but simply an opportunity or right to be heard (Hian vs. CTA, 59 SCRA 110; Azul
vs. Castro, 133 SCRA 271). The affidavits, testimonies and other documentary evidence presented by the petitioner stand uncontroverted
and are therefore entitled to full credit. It is well-settled that this Court is not a trier of facts, so we defer to the superior opportunity of the
lower courts or administrative bodies to test the credibility of the witnesses and to examine the authenticity of the documentary evidence
directly before them (Mapa vs. Arroyo, 175 SCRA 76; Dagupan Bus Co., Inc. vs. NLRC, 191 SCRA 328).
The security of tenure accorded to labor under the Constitution does not embrace infractions of accepted company rules amounting to
breach of trust and loss of confidence (Rosello, Jr. vs. NLRC, 190 SCRA 779). The right of an employer to dismiss a managerial employee for
breach of trust and loss of confidence, as in this case, cannot be doubted. As a measure of self-preservation against acts inimical to its
interests, an employer has the right to dismiss an employee found committing acts of dishonesty and disloyalty. The employer may not be
compelled to continue to employ such a person whose continuance in the service would patently be inimical to his employer's interest
(Colgate Palmolive Phils. Inc. vs. Ople, 163 SCRA 323). The dismissal of a dishonest employee is in the best interest not only of management
but also of labor for the law never intended to impose an unjust situation on either labor or management (Coca-Cola Bottlers Phils. Inc. vs.
NLRC, 172 SCRA 751).
Reinstatement would be ill-advised and incompatible with the labor arbiter's finding that "from those documentary evidences presented by
respondent, it can be safely conclude[d] that . . . there exist visible conflict of interest amounting to willful breach of trust and confidence
repose (sic) upon him by his employer, . . . as well as (b) habitual neglect of his duties . . ." (pp. 216-217, Rollo). The reinstatement of erring
managers may not be ordered with the same ease and liberality as rank and file workers (Pacific Cement Co., Inc. vs. NLRC, 173 SCRA 192).
WHEREFORE, the assailed decision of the NLRC is hereby reversed and set aside. As the complainant (herein private respondent), Edwin
Ricardo, was lawfully dismissed for dishonesty and serious misconduct, his complaint for illegal dismissal is DISMISSED for lack of merit.
SO ORDERED.
[G.R. No. 125606. October 7, 1998]
SAN MIGUEL CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, THIRD DIVISION, and FRANCISCO DE GUZMAN,
JR., respondents.
DECISION
QUISUMBING, J.:
Before us is the petition for certiorari under Rule 65 of the Revised Rules of Court seeking to set aside the April 18, 1996 Decision [1] and
the May 30, 1996 Resolution[2] of public respondent National Labor Relations Commission[3] in NLRC CA No. 009490-95. Said decision reversed
the June 30, 1995 judgment[4] of the Labor Arbiter[5] in NLRC-NCR Case No. 00-08-05954-94, and ordered the reinstatement of private
respondent as follows:
WHEREFORE, premises considered, the assailed decision is hereby VACATED and SET ASIDE. A new one is hereby entered ordering herein
respondent San Miguel Corporation to reinstate complainant to his former position with full backwages from the time he was dismissed from
work until he is actually reinstated without loss of seniority rights and other benefits, less earnings elsewhere, if any.[6]
The facts on record show that in November 1990, private respondent was hired by petitioner as helper/bricklayer for a specific project,
the repair and upgrading of furnace C at its Manila Glass Plant. His contract of employment provided that said temporary employment was
for a specific period of approximately four (4) months.
On April 30, 1991, private respondent was able to complete the repair and upgrading of furnace C. Thus, his services were terminated
on that same day as there was no more work to be done. His employment contract also ended that day.
On May 10, 1991, private respondent was again hired for a specific job or undertaking, which involved the draining/cooling down of
furnace F and the emergency repair of furnace E. This project was for a specific period of approximately three (3) months.
After the completion of this task, namely the draining/cooling down of furnace F and the emergency repair of furnace E, at the end of
July 1991, private respondents services were terminated.
On August 1, 1991, complainant saw his name in a Memorandum posted at the Companys Bulletin Board as among those who were
considered dismissed.
On August 12, 1994, or after the lapse of more than three (3) years from the completion of the last undertaking for which private
respondent was hired, private respondent filed a complaint for illegal dismissal against petitioner, docketed as NLRC NCR Case No. 08-05954-
94.[7]
Both parties submitted their respective position papers, reply and rejoinder to Labor Arbiter Felipe Garduque II. On June 30, 1995, he
rendered the decision dismissing said complaint for lack of merit. In his ruling Labor Arbiter Garduque sustained petitioners argument that
private respondent was a project employee. The position of a helper does not fall within the classification of regular employees. Hence,
complainant never attained regular employment status. Moreover, his silence for more than three (3) years without any reasonable
explanation tended to weaken his claim.[8]
Not satisfied with the decision, private respondent interposed his appeal with public respondent NLRC on August 8, 1995. Petitioner filed
its opposition thereto on August 29, 1995.
On April 18, 1996, public respondent NLRC, promulgated its assailed decision, reversing Labor Arbiter Garduques decision. In its ruling,
public respondent made the following findings:
Respondents scheme of subsequently re-hiring complainant after only ten (10) days from the last day of the expiration of his contract of
employment for a specific period, and giving him again another contract of employment for another specific period cannot be
countenanced. This is one way of doing violence to the employees constitutional right to security of tenure under which even employees
under probationary status are amply protected.
Under the circumstances obtaining in the instant case we find that herein complainant was indeed illegally dismissed. Respondent failed to
adduce substantial evidence to prove that Francisco de Guzman, Jr. was dismissed for a just or authorized cause and after due
process. The only reason they advanced is that his contract of employment which is for a specific period had already expired. We,
however, find this scheme, as discussed earlier, not in accordance with law.[9]
Petitioner then moved for the reconsideration of said decision. This was, however, denied by public respondent on May 30, 1996 as it
found no cogent reason, or patent or palpable error, that would warrant the disturbance of the decision sought to be reconsidered.
Hence, this petition, based on the following grounds:
1. RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION IN FAILING TO RULE THAT PRIVATE RESPONDENT IS A PROJECT OR A FIXED
PERIOD EMPLOYEE.
2. RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION IN RULING THAT PETITIONER VIOLATED PRIVATE RESPONDENTS RIGHT TO
SECURITY OF TENURE AND THAT PRIVATE RESPONDENT WAS ILLEGALLY DISMISSED.
3. RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION IN RULING THAT LACHES OR SILENCE OR INACTION FOR AN UNREASONABLE
LENGTH OF TIME DID NOT BAR PRIVATE RESPONDENTS CLAIM.
Given these grounds, this petition may be resolved once the following issues are clarified: (a) What is the nature of the employment of
private respondent, that of a project employee or a regular employee? and (b) Was he terminated legally or dismissed illegally?
As a general rule, the factual findings and conclusions drawn by the National Labor Relations Commission are accorded not only great
weight and respect, but even clothed with finality and deemed binding on the Court, as long as they are supported by substantial evidence.
However, when such findings and those of the Labor Arbiter are in conflict, it behooves this Court to scrutinize the records of the case,
particularly the evidence presented, to arrive at a correct decision.[10]
Art. 280 of the Labor Code defines regular, project and casual employment as follows:
ART. 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the
employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to
the activity in which he is employed and his employment shall continue while such actually exists.
The above mentioned provision reinforces the Constitutional mandate to protect the interest of labor as it sets the legal framework for
ascertaining ones nature of employment, and distinguishing different kinds of employees. Its language manifests the intent to safeguard the
tenurial interest of worker who may be denied the enjoyment of the rights and benefits due to an employee, regardless of the nature of his
employment, by virtue of lopsided agreements with the economically powerful employer who can maneuver to keep an employee on a
casual or contractual status for as long as it is convenient to the employer.
Thus, under Article 280 of the Labor Code, an employment is deemed regular when the activities performed by the employee are
usually necessary or desirable in the usual business or trade of the employer even if the parties enter into an agreement stating otherwise. But
considered not regular under said Article are (1) the so-called project employment the termination of which is more or less determinable at
the time of employment, such as those connected with a particular construction project; and (2) seasonal employment, which by its nature
is only for one season of the year and the employment is limited for the duration of that season, such as the Christmas holiday season.
Nevertheless, an exception to this exception is made: any employee who has rendered at least one (1) year of service, whether continuous
or intermittent, with respect to the activity he performed and while such activity actually exists, must be deemed regular.
Following Article 280, whether one is employed as a project employee or not would depend on whether he was hired to carry out a
specific project or undertaking, the duration and scope of which were specified at the time his services were engaged for that particular
project.[11] Another factor that may be considered is the reasonable connection between the particular activity undertaken by the employee
in relation to the usual trade or business of the employer; if without specifying the duration and scope, the work to be undertaken is usually
necessary or desirable in the usual business or trade of the employer, then it is regular employment and not just project much less casual
employment.
Thus, the nature of ones employment does not depend on the will or word of the employer. Nor on the procedure of hiring and the
manner of designating the employee, but on the nature of the activities to be performed by the employee, considering the employers nature
of business[12] and the duration and scope of the work to be done.
In ALU-TUCP vs. NLRC,[13] this Court discussed two types of projects:
In the realm of business and industry, we note that project could refer to one or the other of at least two (2) distinguishable types of
activities. Firstly, a project could refer to a particular job or undertaking that is within the regular or usual business of the employer company,
but which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or undertaking begins
and ends at determined or determinable times. xxx
The term project could also refer to, secondly, a particular job or undertaking that is not within the regular business of the corporation. Such
a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The
job or undertaking also begins and ends at determined or determinable times. x x x (Italics supplied)
Public respondent NLRCs findings that herein private respondent is a regular employee is erroneous as the latters employment clearly
falls within the definition of project employees under paragraph 1 of Article 280 of the Labor Code and such is a typical example of the
second kind of project employment in the ALU-TUCP case discussed above.
 Note that the plant where private respondent was employed for only seven months is engaged in the manufacture of glass, an integral
component of the packaging and manufacturing business of petitioner. The process of manufacturing glass requires a furnace, which has a
limited operating life. Petitioner resorted to hiring project or fixed term employees in having said furnaces repaired since said activity is not
regularly performed. Said furnaces are to be repaired or overhauled only in case of need and after being used continuously for a varying
period of five (5) to ten (10) years.
In 1990, one of the furnaces of petitioner required repair and upgrading. This was an undertaking distinct and separate from petitioners
business of manufacturing glass. For this purpose, petitioner must hire workers to undertake the said repair and upgrading. Private respondent
was, thus, hired by petitioner on November 28, 1990 on a temporary status for a specific job for a determined period of approximately four
months.
Upon completion of the undertaking, or on April 30, 1991, private respondents services were terminated. A few days, thereafter, two of
petitioners furnaces required draining/cooling down and emergency repair. Private respondent was again hired on May 10, 1991 to help in
the new undertaking, which would take approximately three (3) months to accomplish. Upon completion of the second undertaking, private
respondents services were likewise terminated.[14] He was not hired a third time, and his two engagements taken together did not total one
full year in order to qualify him as an exception to the exception falling under the cited proviso in the second paragraph of Art. 280 of the
Labor Code.
Clearly, private respondent was hired for a specific project that was not within the regular business of the corporation. For petitioner is
not engaged in the business of repairing furnaces. Although the activity was necessary to enable petitioner to continue manufacturing glass,
the necessity therefor arose only when a particular furnace reached the end of its life or operating cycle. Or, as in the second undertaking,
when a particular furnace required an emergency repair. In other words, the undertakings where private respondent was hired primarily as
helper/bricklayer have specified goals and purposes which are fulfilled once the designated work was completed. Moreover, such
undertakings were also identifiably separate and distinct from the usual, ordinary or regular business operations of petitioner, which is glass
manufacturing. These undertakings, the duration and scope of which had been determined and made known to private respondent at the
time of his employment, clearly indicated the nature of his employment as a project employee. Thus, his services were terminated legally
after the completion of the project.[15]
Public respondent NLRCs decision, if upheld, would amount to negating the distinctions made in Article 280 of the Labor Code. It would
shunt aside the rule that since a project employees work depends on the availability of a project, necessarily, the duration of his employment
is coterminous with the project to which he is assigned.[16] It would become a burden for an employer to retain an employee and pay him his
corresponding wages if there was no project for him to work on. Well to remember is the language of the Court in the case of Mamansag v.
NLRC:[17]
While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that
every dispute will be automatically decided in favor of labor. Management has also rights, which, as such, are entitled to respect and
enforcement in the interest of fair play. Although the Supreme Court has inclined more often than not toward the worker and has upheld
his cause in his conflicts with the employer, such favoritism has not blinded the Court to the rule that justice is in every case for the
deserving, to be dispensed in the light of the established facts and the applicable law and doctrine.
Considering that private respondent was a project employee whose employment, the nature of which he was fully informed, related
to a specific project, work or undertaking, we find that the Labor Arbiter correctly ruled that said employment legally ended upon completion
of said project. Hence the termination of his employment was not tantamount to an illegal dismissal; and it was a grave abuse of discretion
on public respondent's part to order his reinstatement by petitioner.
WHEREFORE, the instant petition is hereby GRANTED. The decision of respondent NLRC is hereby REVERSED, and the judgment of the
Labor Arbiter REINSTATED.
NO COSTS.
SO ORDERED.
G.R. Nos. 76818-19

NOCON, J.:
This is a petition for certiorari seeking to annul and set aside the November 27, 1986 decision of the public respondent National Labor
Relations Commission (NLRC) in holding that Danilo Estanislao and Guillermo Cariño, Jr., whose complicity in the pilferage of private
respondent corporation's toll collection was established beyond cavil, are not entitled to separation pay while Lily Maglunog and Reynaldo
Miranda are only entitled to separation pay equivalent to one-half month's pay for every year of service, a fraction of at least six months
being considered as one whole year.
It appears from the records that petitioners Reynaldo Miranda and Guillermo Cariño, Jr. were toll tellers of private respondent corporation
Construction and Development Corporation of the Philippines (now Philippine National Construction Corporation) at its Balintawak Toll
Gate, Caloocan City.
At around 1:45 P.M. of July 7, 1983, Victoria Robles, a field auditor of private respondent Corporation saw Rosario Sanchez, a toll teller
reliever of said Corporation, come out of Booth No. 5 which was being manned by petitioner Miranda and, thereafter, entered Booth No. 3
manned by petitioner Cariño where she was seen folding a piece of paper into her pocket. Suspecting said piece of paper to be a cash
count sheet, Robles told her co-auditor Arnel Sequitin to seek permission from the collection supervisor Leonardo Santos to conduct a body
search on Sanchez who was at that time inside Booth No. 12 which was being manned by Lily Maglunog.
Sanchez, initially, refused to be searched but relented upon being informed that the collection supervisor had already given his permission.
However, as they were passing the powerhouse on their way to the sub-office where the search would be conducted, Sanchez suddenly
stepped inside the powerhouse, pulled out from her pocket the folded cash count sheet and threw it inside the powerhouse. Danilo
Estanislao, a technician of private respondent Corporation, who was at that time inside the powerhouse, grabbed said piece of paper and
put it inside his pocket.
Upon Robles' demand to turn over to her said piece of paper, Estanislao refused claiming that said piece of paper was a love letter for
Sanchez' boyfriend. When Robles insisted, Estanislao threw said piece of paper toward Rodolfo Palad, an incoming security guard of
private respondent Corporation, who was then dressing up inside the powerhouse. Believing said piece of paper fell inside the drawer of
the security guard, Robles asked Palad to open said drawer. But the security guard refused to follow Robles' order alleging that he shared
said drawer with two other security guards and he would only open it with the permission of the Collector Supervisor.
When said drawer was eventually opened, petitioner Cariño, who was standing beside the powerhouse, grabbed from Robles the folded
cash count sheet found inside the guard's drawer. The former crumpled said cash count sheet and put it inside his pocket. When said cash
count sheet was finally retrieved from petitioner Cariño, Jr., it yielded P590.00 in paper bills.
Robles also found inside the guard's drawer a carton box which when placed on the floor of the powerhouse was immediately picked up
by Estanislao claiming said box is trash which he is throwing out. When Estanislao brought said box outside the powerhouse, auditor Sequitin
followed the former and retrieved said box. When said box was opened inside the powerhouse, 47 invalidated patron tickets amounting to
P646.00 wrapped in a white plastic were found.
As a result of said incident, Estanislao and Cariño, Jr. were dismissed on August 8, 1983 and August 23, 1983,[1] while Maglunog and Miranda
were also dismissed on October 8, 1983 on grounds of loss of trust and confidence.[2]
Thereafter, Estanislao, Cariño, Jr., Maglunog and Miranda filed separate complaints for illegal dismissal, damages and attorney's fees with
the Regional Office of the Ministry of Labor and Employment in San Fernando, Pampanga, which were consolidated upon the agreements
of the parties.
After the parties submitted their respective position papers and supporting evidence, a decision was rendered on June 27, 1986 by the
labor arbiter sustaining the dismissal of the complainants but awarding them separation pay equivalent to one month's salary for every year
of service.
On November 27, 1986, respondent NLRC affirmed the order of dismissal of the four employees with the modification that only Maglunog
and Miranda may be granted a separation pay of one-half month's pay for every year of service.
As a result, petitioners instituted this petition for certiorari.
Petitioners' contention that the decision of the public respondent NLRC finding Cariño's attempt to cover up the alleged irregularity in
private respondent Corporation's toll collection is based on hearsay and not supported by competent and substantial evidence since it
gave weight and credence to the investigation report of Amadeo San Antonio, Jr. who was not even an eye-witness to the incident is
without merit.
Under the Rules of the National Labor Relations Commission, proceedings before a labor arbiter are summary and non-litigious in nature.
The parties, by agreement, may submit their case for decision on the basis of position papers and their supporting evidence. In the case at
bar, the investigation report of Amadeo San Antonio, Jr. is one of the supporting evidence submitted by the private respondent
Corporation which is attached to its position paper. Although Amadeo San Antonio, Jr. was not an eye-witness to the incident, said fact
should not in any way render his report based on mere hearsay and conjecture since said report was based on the testimonies of witnesses
who had direct knowledge of the incident. Likewise, the affidavit of Atty. Arnulfo Villanueva which was attached to private respondent
Corporation's position paper stated that the cash account sheet containing the amount of P590.00 was handed by petitioner Cariño, Jr. to
Sanchez which was corroborated by the field auditor Robles who stated in her affidavit that she saw Sanchez pocket the cash account
sheet as she was leaving Booth No. 3 manned by petitioner Cariño, Jr. It should be noted that an administrative proceeding requires only
substantial evidence and not proof beyond reasonable doubt as in a criminal proceeding. Furthermore, well-entrenched is the rule that
when the conclusions of the labor arbiter are sufficiently corroborated by the evidence on record, the same should be respected by
appellate tribunals since he is in a better position to assess and evaluate the credibility of the contending parties.[3]
Petitioners' contention that they should be reinstated with backwages instead of merely being awarded separation pay because of the
findings of the public respondent NLRC that the evidence against them are shaky and weak is also unmeritorious.
Inasmuch as the respondent NLRC stated in its decision that:
"On the issue of sufficiency of evidence raised by the complainants to firm up a finding of guilt on their part, we would say that, except for
Estanislao and Cariño, Jr. whose complicity (attempt to cover-up) in the irregularity could hardly be doubted, we share the impression that
the evidence linking the two other complainants (Maglunog and Miranda) to the pilferage of the company's collection was rather weak
and shaky. But that does not make their termination less valid and unjustified. For loss of confidence is a valid ground for dismissing an
employee. And proof beyond reasonable doubt of the employee's misconduct is not required, it being sufficient that there is some basis for
the same or that the employer has reasonable ground to believe that the employee is responsible for the misconduct and his participation
therein renders him unworthy of the trust and confidence demanded of his position (Villadolid vs. Inciong, G.R. Nos. L-52364 and 53349).
Reiterating this principle, the Supreme Court in the case of SMC vs. Deputy Minister of Labor, et al., G.R. No. 61232-33, 29 December 1983,
ruled:
'Loss of confidence is a valid ground for dismissing an employee, and proof beyond reasonable doubt of the employee's misconduct -
apparently demanded by the Minister of Labor - is not required to dismiss him on this charge.' "[4]
Consequently, there is no doubt about the legality of petitioner's dismissals. In the case of petitioner Miranda, although his participation in
said irregularity may not have been sufficiently established, yet there existed sufficient basis for the private respondent Corporation to lose
its confidence in him, which is a valid ground for dismissing an employee and proof beyond reasonable doubt of the employee's
misconduct is not required. It is sufficient if there is some basis for such loss of confidence or if the employer has reasonable ground to
believe or to entertain the moral conviction that the employee concerned is responsible for the misconduct and that the nature of his
participation therein rendered him unworthy of the trust and confidence demanded by his position.[5]
Finally, petitioners contend that they were deprived of due process since they were not informed of the specific or particular cause of their
dismissal nor afforded ample opportunity to defend themselves.
The records show that petitioners were notified by the private respondent Corporation of the specific charges against them. In fact, they
were apprised of the specific cause in their notices of suspension, that is, on their possible involvement in the conspiracy tocommit fraud
against respondent Corporation on July 7, 1983. Likewise, said Corporation informed them again in their notices of dismissal of the cause of
their dismissals which is their involvement in the conspiracy to commit fraud against respondent Corporation and their willful breach of the
trust reposed upon them by the latter. Moreover, in the private Corporation's notice of investigation regarding said incident, all those
suspected of complicity in said incident were instructed to appear before a panel of investigation at 1:30 P.M. on July 22, 1983 to testify
and present evidence. Since petitioners were given all the opportunity to know the causes of their dismissals and to defend themselves in
connection with said incident, they cannot anymore complain that they were deprived of due process of law.
"The law in protecting the rights of the labor, authorizes neither oppression nor self-destruction of the employer. While the Constitution is
committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be
automatically decided in favor of labor. Management also has its own right, which, as such, are entitled to respect and enforcement in the
interest of simple fair play. Out of its concern for those with less privileges in life, the Supreme Court has inclined more often than not toward
the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded the Court to the rule that
justice is in every case for the deserving, to be dispensed in the light of the established facts and applicable law and doctrine."[6]
WHEREFORE, the assailed decision of the National Labor Relations Commission is affirmed and the petition for certiorari is hereby dismissed
for lack of merit.
SO ORDERED.

G.R. No. L-66766 December 20, 1985

ZAMBOANGA CITY WATER DISTRICT, petitioner,
vs.
GENARO A. BARTOLOME, LABOR ARBITER PASTOR I. ALVAREZ and COMMISSIONERS GUILLERMO C. MEDINA, GABRIEL M. GATCHALIAN and
MIGUEL B. VARELA of the National Labor Relations Commission, respondent.
Virginia M. Ramos for petitioner.
Jesus F. Balicanta for respondents.

AQUINO, C.J.:
This is an illegal dismissal case. Genaro Bartolome was employed by the Zamboanga City Water District as meter reader in July, 1976, In a
sworn statement dated February 9, 1981 before Agent Virgilio Mendez of the National Bureau of Investigation, Bartolome admitted that in
September, 1980 he opened the water meter of Manuela Cahipe in order to enable his fellow-employee, Ulysis Lunjas, to adjust the meter
reading. After the adjustment, Cahipe offered them a drink of beer (pp. 44-45, Rollo). Bartolome was supposed to read the water meter,
not to open it.
On the other hand, Lunjas in his sworn statement before Agent Mendez dated February 3, 1981 pointed to Bartolome as the one who
tampered with the water meter by reversing the gear to get the desired meter reading (pp, 43-44, Rollo).
Angel Fernando, another fellow-employee of Bartolome, in his sworn statement before Agent Mendez, declared that Bartolome confided
to him that he was tampering with the water meters of the establishments in the market site (No. 8, Annex J, p. 54, Rollo).
Fiscal Pablo I. Murillo found that at one time Cahipe's water consumption of 60 cubic meters was reduced to 48 cubic meters because of
meter tampering. He recommended her prosecution under the Anti-Graft and Corrupt Practices Law (pp. 39-41, Rollo).
In a later resolution dated September 16, 1982, Fiscal Murillo "apologized" for his error in having overlooked Bartolome's participation in the
theft of water. He recommended that Bartolome be prosecuted for theft (p. 46, Rollo).
The fact that the theft case against Bartolome was dismissed (p. 33, Rollo) would not preclude his removal. The conviction of an employee
in a criminal case is not a condition precedent to his dismissal by his employer. The dropping by the city fiscal of the criminal complaint is
not binding upon a labor tribunal (Sea-Land Service, Inc. vs. National Labor Relations Commission, G.R. No. 68212, May 24, 1985, 136 SCRA
544, 547-548).
Bartolome was dismissed by the petitioner in June, 1981. He filed a complaint for illegal dismissal. We find that Bartolome was guilty of gross
misconduct which is a ground for dismissal under section 283 of the Labor Code.
The Labor Arbiter committed a grave abuse of discretion amounting to lack of jurisdiction when he directed the reinstatement of
Bartolome with backwages from June, 1981 to June, 1982 at P630 a month and when he ordered the payment to him of P4,560 as
allowance for the same period plus P1,010 as 13th month pay (p. 25, Rollo). The NLRC should not have dismissed petitioner's appeal from
that decision.
WHEREFORE, the NLRC resolution dismissing petitioner's appeal and the decision of the Labor Arbiter are reversed and set aside. Bartolome's
complaint is dismissed. Costs against Bartolome.
SOORDERED.
[G.R. No. 111933. July 23, 1997]
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and LETTIE P.
CORPUZ, respondents.
DECISION
ROMERO, J.:
 This petition for certiorari pleads for the revocation of the November 16, 1992, decision of the National Labor Relations Commission
(NLRC), affirming in toto the resolution of Labor Arbiter Jose G. De Vera dated February 28, 1991, as well as its resolution dated August 20,
1993, denying petitioners motion for reconsideration for lack of merit.
Private respondent Lettie Corpuz was employed as traffic operator at the Manila International Traffic Division (MITD) by the Philippine
Long Distance Telephone Company (PLDT) for ten years and nine months, from September 19, 1978, until her dismissal on June 17, 1989. Her
primary task was to facilitate requests for incoming and outgoing international calls through the use of a digital switchboard.
Sometime in December 1987, PLDTs rank-and-file employees and telephone operators went on strike, prompting the supervisors of the
MITD to discharge the formers duties to prevent a total shutdown of its business operations. While in the course of their emergency
assignments, two supervisors almost simultaneously received two different requests for overseas calls bound for different Middle East countries
and both callers reported the same calling number (98-68-16).[1] The tone verifications having yielded negative results, the callers were
advised to hang up their telephones to enable the supervisors to effect an alternative verification system by calling the same number
again. As in the first instance, the number remained unverified. Investigating the seemingly anomalous incident, the matter was reported to
the Quality Control Inspection Department (QCID) which revealed that the subject number was temporarily disconnected on June 10, 1987,
and permanently on September 24, 1987. It also showed that 439 overseas calls were made through the same number between May and
November 1987.
On account of such disclosure, the microfiches containing the completed calls through telephone number 98-68-16 were ordered to
be re-run. It yielded the following results: (1) 235 telephone operators handled the 439 calls placed through the supposedly disconnected
number; (2) respondent handled 56 or 12.8% of the total calls, while the other operators had an average of only 1.8% calls each; (3)
respondent completed one call on May 23, 1987 and effected 34 calls after the disconnection, 24 of which were completed through tone
verification while the other 10 calls were done without the requisite tone verification or call-back procedure, and 21 other calls were
cancelled; (4) of the 21 cancelled calls handled by respondent, one bared a BU report (party unavailable) but fetched a long OCD (operator
call duration) of 13 minutes and 21 seconds while another call registered a BB report (called party, busy) but with an OCD of 22 minutes and
34 seconds, both considered unusually protracted by respondent for holding a connection; and (5) respondent made several personal calls
to telephone numbers 96-50-72, 99-92-82 and 97-25-68, the latter being her home phone number.
Premised on the above findings, on July 26, 1988, MITD Manager Erlinda Kabigting directed respondent to explain her alleged infraction,
that is, facilitating 34 calls using the disconnected number.
Instead of tendering the required explanation, respondent requested a formal investigation to allow her to confront the witnesses and
rebut the proofs that may be brought against her. On grounds of serious misconduct and breach of trust, the Legal Department
recommended her dismissal. In a letter dated June 16, 1989, respondent was terminated from employment effective the following day.
In a complaint for illegal dismissal filed by respondent against petitioner, Labor Arbiter Jose G. De Vera rendered a decision, the
dispositive portion of which reads thus:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered ordering the respondent company to
reinstate the complainant to her former position with all the rights, benefits and privileges thereto appertaining including seniority
plus backwages which as of February 28, 1991 already amounted to P103,381.50 (P5,043.00 mo. x. 20.5 mos.). Further, the
respondent company is ordered to pay complainant attorneys fees equivalent to ten percent (10%) of such backwages that the
latter may recover in this suit.
SO ORDERED.[2]
On appeal, said decision was affirmed by the NLRC on November 16, 1992. Its motion for reconsideration having been denied on
August 20, 1993, petitioner filed the instant petition for certiorari.
The instant petition must be dismissed. Petitioner failed to adduce any substantial argument that would warrant a reversal of the
questioned decision.
Time and again, this Court has reminded employers that while the power to dismiss is a normal prerogative of the employer, the same
is not without limitations.[3]The right of an employer to freely discharge his employees is subject to regulation by the State, basically through
the exercise of its police power. This is so because the preservation of the lives of citizens is a basic duty of the State, an obligation more vital
than the preservation of corporate profits.[4]
Petitioner insists that respondent was guilty of defrauding them when she serviced 56 of the 439 calls coming from telephone number
98-68-16 and received numerous requests for overseas calls virtually from the same calling number, which could not have been a mere
coincidence but most likely was a pre-arranged undertaking in connivance with certain subscribers.
The records show, however, that the subject phone calls were neither unusual nor coincidental as other operators shared similar
experiences. A certain Eric Maramba declared that it is not impossible for an operator to receive continuous calls from the same telephone
number. He testified that at one time, he was a witness to several calls consistently effected from 9:30 p.m. to 5:30 a.m. The calls having
passed the verification tone system, the incident was undoubtedly alarming enough but there was no way that he or his co-operators could
explain the same.
This Court agrees with the labor arbiter when he stated that the more frequent handling by the respondent of overseas calls from the
same calling number than other operators does not give rise to the conclusion that, indeed, respondent was a party to such anomalous
transaction.
As regards petitioners claim that no call can be filed through a disconnected line, a certain Ms. Bautista averred getting the same
subject number after going through the standard verification procedures. She added that this complexity extends even to other
disconnected telephone lines. Equally important is the fact that on February 7, 1989, or about two years after it was permanently
disconnected, telephone number 98-68-16 was used in calling an international number, 561-6800, that lasted for 46 minutes.[5] Telephone
operator number 448 seems to have been spared from any administrative sanction considering that this lapse has aggravated the persistent
problem concerning telephone number 98-68-16.
Thus, Labor Arbiter de Vera correctly ruled:
 It need not be emphasized here that there were lapses in certain operational aspects of the respondent company which made
the irregularity possible, for indeed there exists a mystery about the serviceability of the subject telephone line. That there were
personnel of the respondent company involved who could have restored what was earlier disconnected permanently appears
certain. Nonetheless, exacting the ultimate blame upon the respondent (complainant) in the absence of concrete inculpatory
proofs of her complexity (sic) to an anomaly if there be one, cannot be justified.[6]
This Court will not sanction a dismissal premised on mere conjectures and suspicions. To be a valid ground for respondents dismissal, the
evidence must be substantial and not arbitrary and must be founded on clearly established facts sufficient to warrant his separation from
work.[7]
It should be borne in mind that in termination cases, the employer bears the burden of proving that the dismissal is for just cause failing
which would mean that the dismissal is not justified and the employee is entitled to reinstatement.[8] The essence of due process in
administrative proceedings is the opportunity to explain ones side or a chance to seek reconsideration of the action or ruling complained
of.[9] The twin requirements of notice and hearing constitute the essential elements of due process. This simply means that the employer shall
afford the worker ample opportunity to be heard and to defend himself with the assistance of his representative, if he so desires. Ample
opportunity connotes every kind of assistance that management must accord the employee to enable him to prepare adequately for his
defense including legal representation.[10] In the instant case, the petitioner failed to convincingly establish valid bases on the alleged serious
misconduct and loss of trust and confidence.
In carrying out and interpreting the Labor Codes provisions and its implementing regulations, the workingmans welfare should be the
primordial and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of
the law as provided for in Article 4 of the Labor Code, as amended, which states that all doubts in the implementation and interpretation of
the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor,[11] as well as the
Constitutional mandate that the State shall afford full protection to labor and promote full employment opportunities for all. Likewise, it shall
guarantee the rights of all workers to security of tenure. Such constitutional right should not be denied on mere speculation of any unclear
and nebulous basis.[12]
WHEREFORE, in view of the foregoing, the instant petition is DISMISSED and the decision dated November 16, 1992 is AFFIRMED. Costs
against petitioner Philippine Long Distance Telephone Co.
SO ORDERED.
G.R. No. L-56950-51 September 30, 1982
M. F. VIOLAGO OILER TANK TRUCKS, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION and FELIPE CRUZ, AMADO MARIANO, RICARDO PASCO, TEOFILO DE LEON and ZOSIMO
SACDALAN, respondents.
Abraham Pa. Gorospe for petitioner.
Solicitor General Estelito P. Mendoza, Asst. Solicitor General Ruben E. Agpalo and Solicitor Florencio E. Jacinto for respondent NLRC.
Fortunato M. Borlongan for private respondent.

GUTIERREZ, Jr., J.:

On July 29, 1980, five drivers who used to work for the petitioner filed complaints with the Regional Office of the National Labor Relations
Commission at San Fernando, Pampanga for illegal dismissal, reinstatement with backwages, and such other benefits as they may be
entitled to under the law.
According to the complainants, Mr. Miguel F. Violago, proprietor of an oil-tank trucking business, withdrew the trucks driven by them for no
just cause and without prior clearance from the Ministry of Labor. They charged that their employer did not give them any separation pay
and that during theiremployment, they were not given sick leave pay, vacation leave pay, and overtime or holiday pay for work on
Sundays and holidays. The drivers also alleged that illegal deductions for payments of back premiums to the Social Security System were
levied against them and that their employer unilaterally reduced their wages in 1979 without their consent and with no Ministry of Labor's
authority. Complainants Felipe Cruz and Zosimo Sacdalan added that their deposits or cash bonds were not refunded when the employer
illegally dismissed them.
In its answer, M. F. Violago Oiler Tank Trucks alleged:
That all the charges filed by the complainant against herein respondent are maliciously false and perjurious, the truth of
the matter being that said complainants Teofilo de Leon, Ricardo Pasco, Amado Mariano were allegedly
suspected/caught by the Petrophil authorities of using device to cheat in receiving and delivering fuel from the
compound to the points of delivery and by reason thereof, they were prohibited or banned from entering the Petrophil
compound at Pandacan, Metro Manila, thus, as they were not allowed anymore to enter the compound, they
abandoned the trucks they were respectively operating.
That complainant Felipe Cruz was not illegally dismissed as falsely asserted in his complaint, the truth of the matter being
as gathered by herein respondent, said complainant being a barrio official and active leader of a mayoral candidate in
his municipality, left his work and actively campaigned for the said candidate and after the elections, as, he thought
that the other candidate is related to the respondent, he did not report anymore to his work and instead, he filed this
complaint.
That the unlawful and illegal abandonment made by the complainants caused great and irreparable damage and
prejudice to the respondent.
 That the acts of complainants as stated above, being illegal, respondent most respectfully prays for the dismissal of the
complaint.
The Assistant Director for Arbitration of the regional office rendered a decision on October 8, 1980 the dispositive portion of which reads:
WHEREFORE, IN VIEW OF ALL THE, FOREGOING, judgment is hereby rendered:
1. Ordering respondent M.F. Violago Oiler-Tank Trucks to pay backwages of complainants Felipe Cruz, Ricardo Pasco,
Amado Mariano, Teofilo de Leon and Zosimo Sacdalan from the date of their respective dates of dismissal up to the
date of this decision, broken down as follows:

NAMES BACKWAGES

l Felipe P11,475.00
Cruz

2.Ricardo 17,550.00
Pasco

3.Amado 28,290.00
Mariano

4.Teofilo 27,060.00
de Leon

5.Zosimo 16,500.00
Sacdalan

T o t a l - P100,875.00

2. Ordering respondent, in lieu of reinstatement, to pay the separation pay of complainants herein at one (1) month for
every year of service broken down as follows:

NAMES SEPARATION PAY

1Felipe Cruz P12,150.00

2 Ricardo Pasco 10,800.00

3 Amado Mariano 9,840.00

4 Teofilo de Leon 9,840.00

5 Zosimo Sacdalan 6,000.00

T o t a l - P 48,630.00

3. Ordering respondent to pay complainant Felipe Cruz the monthly allowance of ?60.00 under PD 1634 from 1
September 1979 to 20 January 1980 or the total amount of P280.00;
4. Ordering respondent to pay the emergency allowance of complainant Zosimo Sacdalan from 1 September 1979 to 6
November 1979 or the total amount of P180.00;
5. Ordering respondent to pay the herein complainants the monetary equivalent of their service incentive leave under
Article 95 of the New Labor Code from 1975 up to the date of this decision, as follows:

NAMES SERVICE INCENTIVE LEAVE

1.Felipe Cruz P 660.00

2.Ricardo Pasco 660.00

3.Amado Mariano 600.00

 4.Teofilo de Leon 600.00

5.Zosimo Sacdalan 735.00

T o t a l P3,255.00

All other claims of complainants are hereby DISMISSED for lack of merit.
The respondent Commission rendered a decision on April 30, 1980 affirming the arbiter's decision but deleting the awards of emergency
living allowances to Felipe Cruz and Zosimo Sacdalan and the award of service incentive leave pay to all complainants. Instead of the
award of separation pay, the petitioner was ordered to reinstate the complainants with full backwages until actually reinstated.
A careful consideration of the records before Us shows that insofar as respondents Amado Mariano, Ricardo Pasco, Teofilo de Leon, and
Zosimo Sacdalan are concerned, the petitioner has been made accountable for a predicament where it had no participation and to
answer for circumstances over which it had no control. Justice, fairness, and due process dictate that the questioned decision be modified.
We note that the respondent commission adopted the labor arbiter's findings verbatim and merely added three short paragraphs in its
decision which modified the awards with one sentence justifications for each change.
We agree with the petitioner that the conclusions of the arbiter are "patently erroneous and devoid of logical and justifiable consideration."
The arbiter called the petitioner's defense that it never dismissed the complainants from employment a mere "theory", inspite of the fact
that this defense constituted the crucial issue of the case before him.
According to the arbiter and the commission:
xxx xxx xxx
... As we see it, the fact that complainants herein were not allowed to drive by respondent and more than this alternate
drivers were hired by it to take the place of complainants herein, is more than enough justification for us to rule and
declare that there is a 'constructive dismissal' in this case. The mere fact that the trucks they were originally driving were
taken from them and given to other drivers is mute but clear evidence that they were virtually dismissed from their
employment.
The questioned decision states that the "constructive dismissal" may "perhaps" be justified if the explanations of Violago were true.
We find no reason to find the allegations of the petitioner false or mere concoctions. In addition to the affidavits of the three witness for the
employer and the sworn statements of the Violago manager, the respondent commission wanted documentary evidences from Petrophil
certifying that it has banned the complainants from Petrophil premises, that a formal investigation of the supposed pilferage should have
been conducted, and that the complainants should have been found guilty. The commission also ruled that Violago should have applied
for a clearance to terminate the complainants' employment from the Ministry of Labor and Employment.
These findings ignore the realities of the factual situation. The petitioner has always insisted up to the present that it has nothing against its
drivers, it wants them to continue working, it does not suspect them of any wrong doing and it is ready to resume their services as long as
they can do the work for which they are employed. AU that the four complainants had to do was to show that they could enter Petrophil,
pick up the gasoline or other oil products contracted by Violago for hauling, and deliver the same to the various dealers or gasoline
stations of Petrophil.
It was asking too much to have Violago produce the results of a formal investigation by Petrophil that the private respondents were found
guilty of cheating in receiving oil products from Petrophil depots and delivering the same to various delivery points. Petrophil had no interest
in expending time, money, and effort in conducting a fun-fledged investigation. It was wary of certifications that resulted in suits against its
officials. The complainants are not its employees. Assuming that Violago and its four drivers could have demanded a formal investigation
under the arrangements with Petrophil and, if refused, gone to court, Violago must have felt that it would be risking its entire hauling
contract with Petrophil if it went to that extent. Pressed for the kind of evidence required by the respondent commission from Violago,
Petrophil may have cancelled the entire contract because of the formally proved dishonesty of a few. Not only four drivers but all
employees and the entire fleet would have been Idled. As a matter of fact, an affidavit of three constables of the Constabulary Highway
Patrol Group (CHPG) and a report of investigation shows that respondent Zosimo Sacdalan was apprehended on November 6, 1979 for
violation of BP Blg. 33, that Sacdalan admitted having diverted a portion of 9,000 liters of gasoline on one occasion and 2,000 liters out of
8,000 liters on another occasion and that the persons who supposedly received the diverted gasoline turned out to be fictitious. The
statement of Sacdalan during the investigation in Camp Crame was attached to the appeal. Instead of remanding the case for the
conduct of hearings or at least looking further into the factual situation, the respondent commission chose to merely copy verbatim the
arbiter's findings of facts.
The fact that the four drivers went against their employer who had no command or control over Petrophil when it would have been a
simpler matter to show that they were free to haul Petrophil products and that Violago dismissed them for fancied or non-existent reasons
shows that the evidence presented by the petitioner was not only adequate but also credible.
The petitioner stresses a due process consideration. It points out that it had no opportunity to present a witness from Petrophil to clarify that
the drivers, except Felipe Cruz, were banned from entering the Petrophil compound. It argues that the labor arbiter decided the case,
without giving the petitioner an opportunity to present evidence.
The respondents deny that the petitioner was not accorded administrative due process. They state that petitioner's counsel filed an ex
parte urgent motion for postponement of the July 15, 1980 hearing and failed to show up during the July29, 1980 hearing. 'There were
subsequent hearings, according to the respondents, which the petitioner failed to attend. Instead, the petitioner filed its answer to the
complaint and its position paper with affidavits and a sworn statement on August 11, 1980 and August 29. 1980 respectively. These formed
the basis of the arbiter's decision.
The contention that Violago waived its right to a hearing because of the above absences has no merit. No witness from Petrophil could be
presented during those hearings in July, 1980 because the answer was filed only on August 11, 1980. And since the main basis of the labor
arbiter's decision was the supposed inadequacy of evidence, an opportunity for a hearing after the joining of issues with the filing of an
answer was necessary. More so, when the anomalies in gasoline distribution were so serious that a law, Batas Pambansa Blg. 33 dated June
6, 1979 had to be enacted to meet the situation.
There is another factor ignored by the arbiter and the commission. The private respondents stopped driving the tanker trucks on the
following dates:
1. Amado Mariano — November 8, 1978
2. Teofilo de Leon — November 26,1978
3. Ricardo Pasco — September 1, 1979
4. Zosimo Sacdalan — November 6, 1970
5. Felipe Cruz — January 20, 1980
The complaint was filed on July 29, 1980,
The fact that it took the first four drivers such a long time to complain about their alleged dismissals dovetails with the petitioner's arguments
that there was no controversy between it and the private respondents and that they could drive the tankers anytime that Petrophil allowed
them to enter the oil depots.
The case of Mr. Felipe Cruz is a different matter. The petitioner claimed that Cruz abandoned his job after the January, 1980 elections
because he actively campaigned against the brother of Miguel F. Violago and chose not to work afterwards. On the other hand, Cruz
maintained that he was dismissed because he refused to heed the request of Mr. Violago to campaign for NUL candidates. Cruz was a
barangay captain and a KBL party member.
We sustain the respondent commission's ruling on this point:
The contention of complainant Cruz appears to be logical and meritorious. We do not think that complainant Cruz with
a monthly income of around P1,350.00 will just abandon his work without any positive proof that he has landed in
another job with a larger salary. Being the sole bread-winner in the family, we doubt very much if complainant Cruz will
ever abandon his work because by so doing he will surely expose his family to hunger and untold hardships. No man in
his right mind will do such thing. And more importantly if it is true that complainant abandoned his work then why did not
respondent company file a Report of such abandonment with the Ministry of Labor and Employment. The reason for this
is obvious, because there is no such abandonment. Abandonment being absent, the dismissal of complainant to
reinstatement to his former position with full backwages.
The petitioner has never deviated from its stand that the private respondents except Felipe Cruz may drive its tanker trucks at anytime they
have clearances from Petrophil. There is no basis for the labor arbiter's conclusion that while the respondents are entitled to be reinstated,
they should instead be given a total of P153,220.00 in separation pay, backwages, and other benefits because reinstatement would
foment industrial unrest.
WHEREFORE, the decision dated April 30, 1981 of the respondent commission is hereby modified. The petitioner is directed to reinstate
Amado Mariano, Ricardo Pasco, Teofilo de Leon, and Zosimo Sacdalan, without any payment of backwages, upon their presenting
clearances from Petrophil, Inc. that they are allowed to haul Petrophil products and to reinstate Felipe Cruz with full backwages until
actually reinstated,
Teehankee (Chairman), Makasiar, Melencio-Herrera, Plana, Vasquez and Relova, JJ., concur.