Legality of Dismissal: As to MANNER (Procedural) and ACT (Substantive) of Dismissal SKIPPERS UNITED PACIFIC, INC.

and SKIPPERS MARITIME SERVICES, INC., LTD., v. NATHANIEL DOZA, NAPOLEON DE GRACIA, ISIDRO L. LATA, and CHARLIE APROSTA FACTS: Skippers United Pacific, Inc. deployed, in behalf of Skippers, De Gracia, Lata, and Aprosta to work on board the vessel MV Wisdom Star. De Gracia, et al. claimed that Skippers failed to remit their respective allotments for almost five months, compelling them to air their grievances with the Romanian Seafarers Free Union. ITF Inspector Adrian Mihalcioiu of the Romanian Seafarers Union sent Captain Savvas of Cosmos Shipping a fax letter, relaying the complaints of his crew. De Gracia, et al. were unceremoniously discharged from MV Wisdom Stars and immediately repatriated. Upon arrival in the Philippines, De Gracia, et al. filed a complaint for illegal dismissal with the Labor Arbiter and prayed for payment of their home allotment, salaries for the unexpired portion of their contracts, moral damages, exemplary damages, and attorneys fees. Skippers, in its Position Paper, admitted non-payment of home allotment for the month of December 1998, but prayed for the offsetting of such amount with the repatriation expenses since De Gracia, et al. pre-terminated their contracts in accordance with Section 19(G) of Philippine Overseas Employment Administration (POEA) Memorandum Circular No. 55, series of 1996. ISSUE: WON the workers dismissal is considered valid RULING: NO. For a workers dismissal to be considered valid, it must comply with both procedural and substantive due process. The legality of the manner of dismissal constitutes procedural due process, while the legality of the act of dismissal constitutes substantive due process. Procedural due process in dismissal cases consists of the twin requirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first notice apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second notice informs the employee of the employers decision to dismiss him. Before the issuance of the second notice, the requirement of a hearing must be complied with by giving the worker an opportunity to be heard. It is not necessary that an actual hearing be conducted. Substantive due process requires that dismissal by the employer be made under a just or authorized cause under Articles 282 to 284 of the Labor Code. Cosmoship furnished a written notice (telex) to Skippers, the local manning agency, claiming that De Gracia, et al. were repatriated because the latter voluntarily pre-terminated their contracts. This telex was given credibility and weight by the Labor Arbiter and NLRC in deciding that there was pretermination of the employment contract akin to resignation and no illegal dismissal. However, as correctly ruled by the CA, the telex message is a biased and self -serving document that does not satisfy the requirement of substantial evidence. If, indeed, De Gracia, et al. voluntarily pre -terminated their contracts, then De Gracia, et al. should have submitted their written resignations. Article 285 of the Labor Code recognizes termination by the employee of the employment contract by serving written notice on the employer at least one (1) month in advance. Given that provision, the law contemplates the requirement of a written notice of resignation. In the absence of a written resignation, it is safe to presume that the employer terminated the seafarers.

TWO REQUISITES for the Ground of Loss of Trust and Confidence SEBASTIAN F. OASAY, JR. v. PALACIO DEL GOBERNADOR CONDOMINIUM CORPORATION and/or OMAR T. CRUZ FACTS: Palacio Del Gobernador Condominium Corporation (PDGCC) is a government-owned and controlled corporation organized for the purpose of owning and arranging the common areas wherein all the units therein having been acquired by the government, houses various government agencies such as the COMELEC, Bureau of Treasury and the Intramuros Administration. Oasay was appointed by the PDGCC as its Building Administrator for a three-month probationary period consequently, the Board of Directors of PDGCC appointed the petitioner as its permanent Building Administrator effective September 1, 1994. PDGCC President Cruz required the Oasay to submit a written report on the allowances and other compensation, in connection with his duties as Building Administrator. Apparently, the petitioner had been earning additional income for services that he rendered for the COMELEC. He explained that the COMELEC had caused the rehabilitation of the 8th floor of the condominium and that he was tasked by the former, for a stated compensation, to supervise and monitor the rehabilitation. The PDGCC Board of Directors referred the petitioners written report to Atty. Bernardo, the Assistan t Secretary for Internal Audit, for study. Meanwhile, Cruz sent a letter to the petitioner requiring him to explain why he allowed the EGB Security Investigation and General Services, Inc., despite its lack of license to operate as a security agency to the condominium. Oasay denied any liability as he had no power to award any contract as it is the function of the Bids and Awards Committee of PDGCC. After investigating, Atty. Bernardo recommended the filing of appropriate charges against Oasay for violation of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) and Republic Act No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees). With respect to the petitioners receipt of additional compensation from the COMELEC, Atty. Bernardo opined that the services which the former rendered for the latter relates to the duties which he actually performs pursuant to the functions of his office as Building Administrator. Further, in rendering the said services for the COMELEC, the petitioner acted with evident bad faith as he did not seek the permission of PDGCC nor did he inform COMELEC that he was not authorized by PDGCC to do so. Likewise, Atty. Bernardo found that Oasay, as member of the Bids and Awards Committee, maneuvered the bidding process for the security services for the condominium to favor EGB Security Investigation and General Services, Inc. Cruz sent the petitioner a Memorandum informing him that the Bureau of Treasury was being appointed as the new Building Administrator. Cruz then directed the petitioner to turn over all of his accountabilities to PDGCC. Oasay filed a complaint for constructive dismissal. ISSUE: WON the Oasays dismissal is considered valid RULING: YES. The validity of an employees dismissal from service hinges on the satisfaction of the two substantive requirements for a lawful termination namely: the procedural aspect and the substantive aspect. On the substantive aspect, we find that PDGCCs termination of the petitioners employment was for a cause provided under the Labor Code. PDGCC invoked loss of trust and confidence. The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be holding a position of trust and

confidence. It is indubitable that the petitioner holds a position of trust and confidence. The position of Building Administrator, being managerial in nature, necessarily enjoys the trust and confidence of the employer. The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary. PDGCC had established, by clear and convincing evidence, the petitioners acts which justified its loss of trust and confidence on the former. he is an employee of PDGCC and not of the COMELEC. It is undisputed that PDGCC did not authorize nor was it informed of the services rendered by the petitioner in favor of the COMELEC. To make matters worse, the said services rendered by the petitioner are, essentially, related to the performance of his duties as a Building Administrator of the condominium. On the procedural aspect, we find that PDGCC had observed due process in effecting the dismissal of the petitioner. PDGCC complied with the two-notice rule. PDGCC complied with the first notice requirement, i.e. notice informing the petitioner of his infractions, as shown by the following: (1) the Memorandum sent by Cruz to the petitioner requiring him to explain and to submit his report on the additional compensation he received from COMELEC; and (2) the letter dated December 9, 2005 sent by Cruz to Oasay requiring him to explain why he allowed the EGB Security Investigation and General Services, Inc. to render services to the condominium.

Complied with Substantive Aspect BUT Failed to Comply with Procedural Aspect ROMEO A. GALANG v. CITYLAND SHAW TOWER, INC. and VIRGILIO BALDEMOR FACTS: Galang alleged that after the expiration of his employment contracts with the agencies providing maintenance services to Cityland, he was absorbed as a janitor by Cityland with a promise of regular employment after the completion of his six-month probation. He claimed that even after the lapse of the period, he continued working for Cityland. He did not know his status for certain until he was shown a document on May 21, 2002 informing him that his employment would be terminated effective May 20, 2002. The respondents countered that during his employment with them, he would disobey the orders of his supervisor, Eva Tupas; that in the face of Galangs negative work attitu de and job performance, Cityland charged him with gross insubordination, harassment of his co-employees and conduct unbecoming an employee. On one occasion, he took pictures of his co-janitors after he allegedly lost P4,000.00 in his locker; he suspected that the culprit was one of the janitors. This caused agitation among the janitors, prompting Tupas to investigate the incident. She called the janitors, including Galang, to a meeting. In the meeting, Galang told Tupas that she was not qualified to be his supervisor. He also verbally insulted and offended her in the presence of her subordinates. Additionally, the other employees disclosed that Galang exhibited an air of superiority towards them and would always shout whenever misunderstandings occurred. Galangs alleged transgressions were the subject of Tupas memo to Moralde Arrogante, Citylands President. The respondents stressed that Citylands Board of Directors terminated Galangs services, for gross insubordination, effective May 20, 2002, after a comprehensive examination of the accusation against complainant. ISSUE: WON Galang had been dismissed for cause. RULING: YES. Galang had been dismissed for cause. Contrary to Galangs submission, there is substantial evidence such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. The affidavits executed in 2005, amplified the evidence Cityland submitted in 2002, including documents which cited Galangs serious negligence in causing the flooding of his assigned condominium floor, which resulted in a costly repair of the buildings elevator. Additionally, there was Tupas memo to Citylands President which pertains to the case of Romeo Galang xxx for harassment to co-janitors, insubordination to Supervisor and conduct unbecoming an employee. In light of the circumstances obtaining in the case, we find credible the respondents submission that Galang had become unfit to continue in employment. The evidence supports the view that he continued to exhibit undesirable traits as an employee and as a person, in relation to both his coworkers and his superiors, particularly Tupas, her immediate supervisor. Cityland did not afford Galang the required notice before he was dismissed. As the CA noted, the investigation conference Tupas called to look into the janitors complaints against Galang, did not constitute the written notice required by law as he had no clear idea what the charges were. The CA

committed no error in sustaining his dismissal and awarding him nominal damages as indemnity.
TWO CONDITIONS For The Validity Of A Fixed-Contract Agreement LYNVIL FISHING ENTERPRISES, INC. and/or ROSENDO S. DE BORJA v. ANDRES G. ARIOLA, JESSIE D. ALCOVENDAS, JIMMY B. CALINAO AND LEOPOLDO G. SEBULLEN FACTS: Version of the Petitioners: Lynvil is a company engaged in deep-sea fishing, operating along the shores of Palawan and other outlying islands of the Philippines. Lynvil received a report from one of its employees, that he witnessed that while on board, Lynvil employees, namely: Ariola, Alcovendas, Calinao, Nubla, Baez and Sebullen, conspired and stole eight (8) tubs of pampano and tangigue fish and delivered them to another vessel, to the prejudice of Lynvil. Lynvils General Manager De Borja (De Borja) summoned respondents to explain within five (5) days why they should not be dismissed from service. However, except for Alcovendas and Baez, the respondents refused to sign the receipt of the notice. Failing to explain as required, respondents employment was terminated. Lynvil, through De Borja, filed a criminal complaint against the dismissed employees for violation of P.D. 532, or the Anti-Piracy and Anti-Highway Robbery Law of 1974.City Prosecutor Silverio found probable cause for the indictment of the dismissed employees for the crime of qualified theft under the Revised Penal Code. Story of the Defense: On 31 July 1998, they arrived at the Navotas Fishport loaded with 1,241 baeras of different kinds of fishes. These baeras were delivered to a consignee named SAS and Royale. The following day, the private respondents reported back to Lynvil office to inquire about their new job assignment but were told to wait for further advice. They were not allowed to board any vessel. Only Alcovendas and Baez received a memorandum from De Borja ordering them to explain the incident that happened on 31 July 1998. Upon being informed about this, Ariola, Calinao, Nubla and Sebullen went to the Lynvil office. However, they were told that their employments were already terminated. ISSUES: (1) WON the filing of a criminal case before the Office of the Prosecutor is sufficient basis for a valid termination of employment based on serious misconduct and/or loss of trust and confidence relying on Nasipit Lumber Company v. NLRC (2) WON Lynvil cannot be guilty of illegal dismissal because the private respondents were employed under a fixed-term contract which expired at the end of the voyage RULING: FIRST ISSUE. Nasipit is about a security guard who was charged with qualified theft which charge was dismissed by the Office of the Prosecutor. However, despite the dismissal of the complaint, he was still terminated from his employment on the ground of loss of confidence. We ruled that proof beyond reasonable doubt of an employee's misconduct is not required when loss of confidence is the ground for dismissal. It is sufficient if the employer has "some basis" to lose confidence or that 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 absolutely unworthy of the trust and confidence demanded by his position. It added that the dropping of the qualified theft charges against the respondent is not binding upon a labor tribunal.In other words, whichever way the public prosecutor disposes of a complaint, the finding does not bind the labor tribunal.

Thus, Lynvil cannot argue that since the Office of the Prosecutor found probable cause for theft the Labor Arbiter must follow the finding as a valid reason for the termination of respondents employment. The proof required for purposes that differ from one and the other are likewise different. Nonetheless, even without reliance on the prosecutors finding, we find that there was valid cause for respondents dismissal. SECOND ISSUE. Jurisprudence, laid two conditions for the validity of a fixed-contract agreement between the employer and employee: First, the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or Second, it satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. 1 Textually, the provision that: NA ako ay sumasang-ayon na maglingkod at gumawa ng mga gawain sang-ayon sa patakarang por viaje na magmumula sa pagalis sa Navotas papunta sa pangisdaan at pagbabalik sa pondohan ng lantsa sa Navotas, Metro Manila is for a fixed period of employment. In the context, however, of the facts that: (1) the respondents were doing tasks necessarily to Lynvils fishing business with positions ranging from captain of the vessel to bodegero; (2) after the end of a trip, they will again be hired for another trip with new contracts; and (3) this arrangement continued for more than ten years, the clear intention is to go around the security of tenure of the respondents as regular employees. And respondents are so by the express provisions of the second paragraph of Article 280, thus: Xxx 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 activity exists. The same set of circumstances indicate clearly enough that it was the need for a continued source of income that forced the employees acceptance of the por viaje provision. Having found that respondents are regular employees who may be, however, dismissed for cause as we have so found in this case, there is a need to look into the procedural requirement of due process. It is required that the employer furnish the employee with two written notices: (1) 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; and (2) 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. From the records, there was only one written notice which required respondents to explain within five (5) days why they should not be dismissed from the service. Applying the rule to the facts at hand, we grant a monetary award of P50,000.00 as nominal damages, this, pursuant to the fresh ruling of this Court in Culili v. Eastern Communication Philippines, Inc.2 Due to the failure of Lynvil to follow the procedural requirement of two-notice rule, nominal damages are due to respondents despite their dismissal for just cause.

Termination After Only About 4 Weeks Does Not Necessarily Mean That Separation From The Service Is Without Basis CANADIAN OPPORTUNITIES UNLIMITED, INC. v. BART Q. DALANGIN, JR. FACTS: Dalangin was hired only in the previous month, as Immigration and Legal Manager, with a monthly salary of P15,000.00 by Canadian Opportunities Unlimited, Inc. which provides assistance and related services to applicants for permanent residence in Canada. He was placed on probation for six months. He was to report directly to the Chief Operations Officer, Annie Abad. His tasks involved principally the review of the clients applications for immigration to Canada to ensure that they are in accordance with Canadian and Philippine laws. Through a memorandum, signed by Abad, the company terminated Dalangins employment, declaring him unfit and unqualified to continue as Immigration and Legal Manager, for the following reasons: a) Obstinacy and utter disregard of company policies. Propensity to take prolonged and extended lunch breaks, shows no interest in familiarizing oneself with the policies and objectives. b) Lack of concern for the companys interest. (Declined to attend company sponsored activities, seminars intended to familiarize company employees with Management objectives and enhancement of company interest and objectives.) c) Showed lack of enthusiasm toward work. d) Showed lack of interest in fostering relationship with his co-employees. Dalangin filed a complaint for illegal dismissal. ISSUE: Whether Dalangin, a probationary employee, was validly dismissed. RULING: YES. In International Catholic Migration Commission v. NLRC,3 the Court explained that a probationary employee, as understood under Article 281 of the Labor Code, is one who is on trial by an employer, during which, the latter determines whether or not he is qualified for permanent employment. A probationary appointment gives the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he would be a proper and efficient employee. Dalangin was barely a month on the job when the company terminated his employment. The essence of a probationary period of employment fundamentally lies in the purpose or objective of both the employer and the employee during the period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the latter seeks to prove to the former that he has the qualifications to meet the reasonable standards for permanent employment.

The trial period or the length of time the probationary employee remains on probat ion depends on the parties agreement, but it shall not exceed six (6) months under Article 281 of the Labor Code, unless it is covered by an apprenticeship agreement stipulating a longer period. As the Court explained in International Catholic Migration Commission, the word probationary, as used to describe the period of employment, implies the purpose of the term or period, but not its length. Thus, the fact that Dalangin was separated from the service after only about four weeks does not necessarily mean that his separation from the service is without basis. Contrary to the CAs conclusions, we find substantial evidence indicating that the company was justified in terminating Dalangins employment, however brief it had been. Time and again, we hav e emphasized that substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. ARMANDO ALILING v. JOSE B. FELICIANO, MANUEL F. SAN MATEO III, JOSEPH R. LARIOSA, and WIDE WIDE WORLD EXPRESS CORPORATION FACTS: WWWEC offered to employ Aliling as Account Executive (Seafreight Sales). The offer came with a six (6)-month probation period condition with this express caveat: Performance during [sic] probationary period shall be made as basis for confirmation to Regular or Permanent Status. Aliling and WWWEC inked an Employment Contract under the following terms, among others: (1) Conversion to regular status shall be determined on the basis of work performance; and (2) Employment services may, at any time, be terminated for just cause or in accordance with the standards defined at the time of engagement. However, instead of a Seafreight Sale assignment, WWWEC asked Aliling to handle Ground Express (GX), a new company product launched on June 18, 2004 involving domestic cargo forwarding service for Luzon. Marketing this product and finding daily contracts for it formed the core of Alilings new assignment. Barely a month after, Manuel F. San Mateo III (San Mateo), WWWEC Sales and Marketing Director, emailed Aliling to express dissatisfaction with the latters performance for failure to meet the quota wherein GX Shuttles should be 80% full by the 3rd week (August 5) after launch (July 15). Aliling wrote San Mateo stating: Pursuant to your instruction on September 20, 2004, I hereby tender my resignation effective October 15, 2004. While WWWEC took no action on his tender, Aliling nonetheless demanded reinstatement and a written apology, claiming in a subsequent letter to management that San Mateo had forced him to resign. Lariosas response -letter of October 1, 2004,4 informed Aliling that his case was still in the process of being evaluate . Lariosa wrote, to advise Aliling of the termination of his services owing to his non-satisfactory performance during his probationary period. Earlier, however, Aliling filed a Complaint for illegal dismissal due to forced resignation. ISSUE: WON petitioner was a probationary or regular employee RULING: Aliling was considered a probationary employee despite not being informed of the reasonable standards by which his probationary employment was to be judged. To note, the letteroffer itself states that the regularization standards or the performance norms to be used are still to be

agreed upon by Aliling and his supervisor. WWWEC has failed to prove that an agreement as regards thereto has been reached. Clearly then, there were actually no performance standards to speak of. And lest it be overlooked, Aliling was assigned to GX trucking sales, an activity entirely different to the Seafreight Sales he was originally hired and trained for. Thus, at the time of his engagement, the standards relative to his assignment with GX sales could not have plausibly been communicated to him as he was under Seafreight Sales. Aliling was deemed a regular employee by force of the following self-explanatory provisions: Article 281 of the Labor Code ART. 281. Probationary employment. - Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.
Section 6(d) of the Implementing Rules of Book VI, Rule VIII-A of the Labor Code Sec. 6. Probationary employment. There is probationary employment where the employee, upon his engagement, is made to undergo a trial period where the employee determines his fitness to qualify for regular employment, based on reasonable standards made known to him at the time of engagement. Probationary employment shall be governed by the following rules: xxxx (d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee. (Emphasis supplied.)

WWWEC also cannot validly argue that the factual findings being assailed are not supported by evidence on record or the impugned judgment is based on a misapprehension of facts. Its very own letter-offer of employment argues against its above posture. Excerpts of the letter-offer:
Additionally, upon the effectivity of your probation, you and your immediate superior are required to jointly define your objectives compared with the job requirements of the position. Based on the pre-agreed objectives, your performance shall be reviewed on the 3rd month to assess your competence and work attitude. The 5th month Performance Appraisal shall be the basis in elevating or confirming your employment status from Probationary to Regular. Failure to meet the job requirements during the probation stage means that your services may be terminated without prior notice and without recourse to separation pay. (Emphasis supplied.)

Respondents further allege that San Mateos email wherein he reminded Aliling of the sales quota he ought to meet as a condition for his continued employment, ( i.e., that the GX trucks should already be 80% full by August 5, 2004) shows that the standards for his regularization were made known to petitioner Aliling at the time of his engagement. This contention is untenable. The email message was sent to Aliling more than a month after he signed his employment contract with WWWEC. The aforequoted Section 6 of the Implementing Rules of Book VI, Rule VIII-A of the Code specifically

requires the employer to inform the probationary employee of such reasonable standards at the time of his engagement, not at any time later; else, the latter shall be considered a regular employee. Thus, pursuant to the explicit provision of Article 281 of the Labor Code, Section 6(d) of the Implementing Rules of Book VI, Rule VIII-A of the Labor Code and settled jurisprudence, Aliling is deemed a regular employee as of June 11, 2004, the date of his employment contract. At any event, assuming for argument that the petitioner indeed failed to achieve his sales quota, his termination from employment on that ground would still be unjustified. In fine, an employees failure to meet sales or work quotas falls under the concept of gross inefficiency, which in turn is analogous to gross neglect of duty that is a just cause for dismissal under Article 282 of the Code. However, in order for the quota imposed to be considered a valid productivity standard and thereby validate a dismissal, managements prerogative of fixing the quota must be exercised in good faith for the advancement of its interest. The duty to prove good faith, however, rests with WWWEC as part of its burden to show that the dismissal was for a just cause. WWWEC must show that such quota was imposed in good faith. This WWWEC failed to do, perceptibly because it could not. The fact of the matter is that the alleged imposition of the quota was a desperate attempt to lend a semblance of validity to Alilings illegal dismissal.