Cosmos Bottling Corp vs Fermin

Facts:
Wilson B. Fermin (Fermin) was a forklift operator at Cosmos. He was accused of
stealing the cellphone of his fellow employee. Fermin was then given a Show
Cause Memorandum, requiring him to explain why the cellphone was found
inside his locker.] In compliance therewith, he submitted an affidavit the following
day, explaining that he only hid the phone as a practical joke and had every
intention of returning it to Braga. After conducting an investigation, COSMOS
found Fermin guilty of stealing Bragas phone in violation of company rules and
regulations] Consequently, on 2 October 2003, the company terminated Fermin
from employment after 27 years of service. Fermin filed a Complaint for Illegal
Dismissal.
Labor Arbiter - dismissed for lack of merit on the ground that the act of taking a
fellow employees cellphone amounted to gross misconduct.
NLRC - affirmed
CA - eversed the rulings of the LA and the NLRC and awarded him his full
retirement benefitsIt must be noted that in the case at bar, all the lower tribunals
were in agreement that Fermins act of taking Bragas cellphone amounted to
theft.

Issue :
whether the imposition of the penalty of dismissal was appropriate.

Held:
Yes. Theft committed against a co-employee is considered as a case analogous to
serious misconduct, for which the penalty of dismissal from service may be meted
out to the erring employee by virtue of Article 282 of the Labor Code Misconduct
involves the transgression of some established and definite rule of action,
forbidden act, a dereliction of duty, willful in character, and implies wrongful
intent and not mere error in judgment.
For misconduct to be serious and therefore a valid ground for dismissal, it must
be:
1. of grave and aggravated character and not merely trivial or unimportant and
2. connected with the work of the employee.

Nonetheless, Article 282(e) of the Labor Code talks of other analogous causes or
those which are susceptible of comparison to another in general or in specific
detail. For an employee to be validly dismissed for a cause analogous to those
enumerated in Article 282, the cause must involve a voluntary and/or willful act
or omission of the employee. A cause analogous to serious misconduct is a
voluntary and/or willful act or omission attesting to an employees moral
depravity. Theft committed by an employee against a person other than his
employer, if proven by substantial evidence, is a cause analogous to serious
misconduct.

IMASEN PHILIPPINE MANUFACTURING CORPORATION, Petitioner,

vs

RAMONCHITO T. ALCON and JOANN S. PAPA, Respondents.

G.R. No. 194884 October 22, 2014

PONENTE: Brion

TOPIC: Sexual intercourse in workplace during work hours as serious misconduct

FACTS:

Petitioner Imasen Philippine Manufacturing Corporation is a domestic

corporation engaged in the manufacture of auto seat-recliners and slide-
adjusters. It hired the respondents as manual welders in 2001.

On October 5, 2002, the respondents reported for work on the second

shift from 8:00 pm to 5:00 am of the following day. At around 12:40 am, Cyrus
A. Altiche, Imasens security guard on duty, went to patrol and inspect the
production plants premises. When Altiche reached Imasens Press Area,
he heard the sound of a running industrial fan. Intending to turn the fan off, he
followed the sound that led him to the plants Tool and Die section.

At the Tool and Die section, Altiche saw the respondents having sexual
intercourse on the floor, using a piece of carton as mattress. Altiche immediately
went back to the guard house and relayed what he saw to Danilo S. Ogana,
another security guard on duty.

Respondents defense: they claimed that they were merely sleeping in

the Tool and Die section at the time of the incident. They also claimed that
other employees were near the area, making the commission of the act charged
impossible.

Both LA and NLRC held that the dismissal was valid. CA however nullified
NLRCs decision and held that sexual intercourse inside company premises is not
serious misconduct.

ISSUE:

Whether the respondents infraction engaging in sexual intercourse

inside company premises during work hours amounts to serious misconduct
justifying their dismissal.

HELD:

YES. Sexual acts and intimacies between twoconsenting adults belong, as

a principled ideal, to the realm of purely private relations. Whether aroused by
lust or inflamed by sincere affection, sexual acts should be carried out at such
place, time and circumstance that, by the generally accepted norms of conduct,
will not offend public decency nor disturbthe generally held or accepted social
morals. Under these parameters, sexual acts between two consenting adults do
not have a place in the work environment.

Indisputably, the respondents engaged in sexual intercourse inside

company premises and during work hours. These circumstances, by themselves,
are already punishable misconduct. Added to these considerations, however, is
the implication that the respondents did not only disregardcompany rules but
flaunted their disregard in a manner that could reflect adversely on the status of
ethics and morality in the company.

Additionally, the respondents engaged in sexual intercourse in an area

where co-employees or other company personnel have ready and available
access. The respondents likewise committed their act at a time when the
employees were expected to be and had, in fact, been at their respective posts,
and when they themselves were supposed to be, as all other employees had in
fact been, working.

The Court also considered the respondents misconduct to be

of grave and aggravated character so that the company was justified in imposing
the highest penalty available dismissal.

Their infraction transgressed the bounds of socially and morally accepted

human public behavior, and at the same time showed brazen disregard for the
respect that their employer expected of them as employees. By their misconduct,
the respondents, in effect, issued an open invitation for others to commit the
same infraction, with likedisregard for their employers rules, for the respect
owed to their employer, and for their co-employees sensitivities.

Leus vs. St. Scholastica College

Date: January 28, 2015 GR. NO. 197011
PETITIONER: Cheryll Santos Leus
RESPONDENT: St. Scholasticas College Westgrove

FACTS:
SSCW(respondent) hired the petitioner as an Assistant to SSCWs Director. Petitioner and her boyfriend
conceived a child out of wedlock. When SSCW learned of the petitioners pregnancy, they advised her to
file a resignation. The petitioner refused to resign her employment just because she got pregnant
without the benefit of marriage.

Respondent formally directed the petitioner to explain in writing why she should not be dismissed. Later
on, being unsatisfied with petitioners explanation, her employment with SSCW was terminated on the
ground of serious misconduct.

Petitioner filed a complaint for illegal dismissal. Respondent claimed that there was just cause to
terminate the petitioner and that it was a valid exercise of management prerogative. They maintained
that engaging in pre-marital sex, and getting pregnant amounts to a disgraceful or immoral conduct,
which is a ground for thedismissal of an employee under the 1992 MRPS(Manual of Regulation for
Private School)

The CA and the labor tribunals affirmed the validity of the petitioners dismissal pursuant to Section
94(e) of the 1992 MRPS which provides:
Sec. 94. Causes of Terminating Employment In addition to the just causes enumerated in the
Labor Code, the employment of school personnel, including faculty, may be terminated for any
of the following causes xxx
e. Disgraceful or immoral conduct; xxx

The labor tribunals concluded that the petitioners pregnancy out of wedlock, per se, is disgraceful and
immoral considering that she is employed in a Catholic educational institution.

ISSUE:
a.) whether the CA committed reversible error in ruling that it is the 1992 MRPS and not the Labor Code
that governs the termination of employment of teaching and non-teaching personnel of private schools
b.) whether the petitioners pregnancy out of wedlock constitutes a valid ground to terminate her
employment

HELD:
First Issue: Applicability of the Manual of Regulation for Private Schools(MRPS)
THE MRPS is applicable.
MRPS, the regulation in force at the time of the instant controversy, was issued by the Secretary of
Education pursuant to BP 232 which empowers the Department of Education to promulgate rules and
regulations necessary for the administration, supervision and regulation of the educational system. The
qualifications of teaching and non-teaching personnel of private schools, as well as the causes for the
termination of their employment, are an integral aspect of the educational system of private schools.
It is thus within the authority of the Secretary of Education to issue a rule, which provides for the
dismissal of teaching and non-teaching personnel of private schools based on their incompetence,
inefficiency, or some other disqualification.

Second Issue: Validity of the Petitioners Dismissal of whether pregnancy out of wedlock by an
employee of a catholic educational institution is a cause for the termination of her employment.
No. The fact of the petitioners pregnancy out of wedlock, without more, is not enough to characterize
the petitioners conduct as disgraceful or immoral. There must be substantial evidence to establish that
pre-marital sexual relations and, consequently, pregnancy out of wedlock, are indeed considered
disgraceful or immoral.

The determination of whether a conduct is disgraceful or immoral involves a two-step process:

first,a consideration of the totality of the circumstances surrounding the conduct; and
second, an assessment of the said circumstances vis--vis the prevailing norms of conduct, i.e., what the
society generally considers moral and respectable.

The morality referred to in the law is public and necessarily secular, not religious.Otherwise, if
government relies upon religious beliefs in formulating public policies and morals, the resulting policies
and morals would require conformity to what some might regard as religious programs or agenda.
For a particular conduct to constitute disgraceful and immoral behavior under civil service laws, it
must be regulated on account of the concerns of public and secular morality. It cannot be judged based
on personal bias, specifically those colored by particular mores. Nor should it be grounded on cultural
values not convincingly demonstrated to have been recognized in the realm of public policy expressed in
the Constitution and the laws.

The petitioners dismissal is not a valid exercise of SSCWs management prerogative.SSCW, as

employer, undeniably has the right to discipline its employees and, if need be, dismiss them if there is
a valid cause to do so. However, there is no cause to dismiss the petitioner. Her conduct is not
considered by law as disgraceful or immoral. Further, the respondents themselves have admitted that
SSCW, at the time of the controversy, does not have any policy or rule against an employee who
engages in pre-marital sexual relations and conceives a child as a result thereof. There being no valid
basis in law or even in SSCWs policy and rules, SSCWs dismissal of the petitioner is not a valid
exercise of management prerogative.

In sum, the Court finds that the petitioner was illegally dismissed as there was no just cause for the
termination of her employment. SSCW failed to adduce substantial evidence to establish that the
petitioners conduct in engaging in pre-marital sexual relations and conceiving a child out of wedlock as
considered disgraceful or immoral.

G.R. No. 157633 September 10, 2014

NORTHWEST AIRLINES, INC., Petitioner,

vs.
MA. CONCEPCION M. DEL ROSARIO, Respondent.

DECISION

BERSAMIN, J.:

Under review is the decision promulgated on June 21, 2002,1 whereby the Court of Appeals (CA)
dismissed the petition for certiorari filed by Northwest Airlines, Inc. to assail on the ground of grave
abuse of discretion amounting to lack or excess of jurisdiction the adverse decision of the National
Labor Relations Commission (NLRC).

Antecedents

Petitioner Northwest Airlines, Inc. employed respondent Ma. Concepcion M. Del Rosario on
December 10, 1994 as one of its Manilabased flight attendants. On May 18, 1998, Del Rosario was
assigned at the Business Class Section of Northwest Flight NW 26 bound for Japan. During the
boarding preparations, Kathleen Gamboa, another flight attendant assigned at the First Class
Section of Flight NW 26, needed to borrow a wine bottle opener from her fellow attendants because
her wine bottle opener was dull. Vivien Francisco, Gamboas runner, went to the Business Class
Section to borrow a wine bottle opener from Del Rosario, but the latter remarked that any flight
attendant who could not bring a wine bottle opener had no business working in the First Class
Section. Upon hearing this, Aliza Ann Escao, another flight attendant, offered her wine bottle
opener to Francisco. Apparently, Gamboa overheard Del Rosarios remarks, and later on verbally
confronted her. Their confrontation escalated into a heated argument. Escao intervened but the two
ignored her, prompting her to rush outside the aircraft to get Maria Rosario D. Morales, the Assistant
Base Manager, to pacify them.

The parties differed on what happened thereafter. Del Rosario claimed that only an animated
discussion had transpired between her and Gamboa, but Morales insisted that it was more than an
animated discussion, recalling that Del Rosario had even challenged Gamboa to a brawl
(sabunutan). Morales asserted that she had tried topacify Del Rosario and Gamboa, but the two did
not stop; that because the two were still arguing although the Business Class passengers were
already boarding, she ordered them out of the plane and transfer to another nearby Northwest
aircraft; that she inquired from them about what had happened, and even asked if they were willing
to fly on the condition that they would have to stay away from each other during the entire flight; that
because Del Rosario was not willing to commit herself to do so, she decided not to allow both of
them on Flight NW 26, and furnished them a Notice of Removal from Service (effectively informing
Del Rosario of her dismissal from the service pending an investigation of the fighting incident
between her and Gamboa).

On May 19, 1998, Morales sent a letter to Del Rosario telling her that Northwest would conduct an
investigation of the incident involving her and Gamboa. The investigation was held on May 28, 1998
before Atty. Ceazar Veneracion III, Northwests Legal Counsel and Head of its Human Resources
Department. All the parties attended the investigation

On June 19, 1998, Del Rosario was informed of her termination from the service. Northwest stated
that based on the results of the investigation, Del Rosario and Gamboa had engaged in a fight on
board the aircraft, even if there had been no actual physical contact between them; and that
because fighting was strictly prohibited by Northwest to the point that fighting could entail dismissal
from the service even if committed for the first time, Northwest considered her dismissal from the
service justified and in accordance with the Rules of Conduct for Employees, as follows:

Section 1, General

x x x. Rule infractions will be dealt with according to the seriousness of the offense and violators will
be subjected to appropriate disciplinary action up to and including discharge. Some acts of
misconduct, even if committed for the first time, are so serious that, standing alone, they justify
immediate discharge. Some examples of these offenses are violations of rules regarding
theft,alcohol and drugs, insubordination, dishonesty, fighting, falsification of records, sleeping on the
job, failure to cooperate or lying in a Company investigation, intentional destruction or abuse of
property, threatening, intimidating or interfering with other employees, abuse of nonrevenue and
reduced rate travel privileges and unauthorized use of Company communications systems. x x x x

Section 24 (c), Disturbing Others, which states that:

Harassing, threatening, intimidating, assaulting, fighting or provoking a fight or similar interference

with other employees at any time, on or off duty is prohibited." (Italics supplied)

Del Rosario subsequently filed her complaint for illegal dismissal against Northwest.2

Decision of the Labor Arbiter

In her decision dated January 18, 1999,3 Labor Arbiter Teresita D. Castillon-Lora ruled in favor of
Northwest, holding that the dismissal of Del Rosario had been justified and valid upon taking into
account that Northwest had been engaged in the airline business in which a good public image had
been demanded, and in which flightattendants had been expected to maintain an image of
sweetness and amiability; that fighting among its employees even in the form of heated arguments
or discussions were very contradictory to that expected image;4and that it could validly dismiss its
employees like the respondent because it had been entitled to protect its business interests by
putting up an impeccable imageto the public.

Ruling of the NLRC

Upon appeal, the NLRC reversed the decision of the Labor Arbiter, and ruled in favor of Del Rosario,
declaring that the incident between her and Gamboa could not be considered as synonymous with
fighting as the activity prohibited by Northwests Rules of Conduct; that based on Blacks Law
Dictionary, fightreferred to a hostile encounter, affray, or altercation; a physical or verbal struggle for
victory, pugilistic combat; that according to Bouviers Law Dictionary, fighting did not necessarily
imply that both parties should exchange blows, for it was sufficient that they voluntarily put their
bodies in position with that intent;5 and that the incident between Del Rosario and Gamboa could
notbe held similar to the fightthat Northwest penalized under its Rules of Conduct.

The NLRC further ratiocinated as follows:

Evident in the definition of fighting is the existence of an underlying hostility between the parties
which is sointense that there is an imminent danger of a physical conflict (if there is none yet). In
other words, when we say two people are fighting, at the very least, they should project a general
appearance of wanting to physically strike each other. Was this the image that appellant and FA
Gamboaprojected when they were facing each other during the incident of May 18, 1998[?] We do
not think so.

x x x Almost unanimously, the witnesses of NWA refer to the incident as "arguing" or a "serious or
animated discussion." An argument is an effort to establish belief bya course of reasoning (Bouvier's
Law Dictionary). In ordinary parlance, arguing is merely talking or debating about a certain issue.
There are nounderpinnings of animosity in the discussion nor (sic) between the parties. These
witnesses never saw any hostility between the appellant and FA Gamboa. Neither did they see
these two ladies wanting to strike each other. What they saw were two FAs engaged in an animated
verbal exchange, arguing but not fighting.6

The NLRC ordered the reinstatement of Del Rosario to her former position without loss of seniority
rights and with payment of backwages, per diems, other lost income and benefitsfrom June 19,
1998; as well as the payment of attorneys fees equivalent to 10% of the monetary award.

Decision of the CA

Aggrieved, Northwest elevated the adverse decision of the NLRC to the CA on certiorari, averring
that the NLRC thereby committed grave abuse of discretion in reversing the decision of the Labor
Arbiter, and submitting that Del Rosarios dismissal from the service had been for a just cause, with
the evidence presented against her being more than sufficient to substantiate its position that there
had really been a fight between her and Gamboa; and that the NLRC likewise gravely abused its
discretion in ordering the reinstatement of Del Rosario and the payment of her backwages and
attorneys fees.

As stated, the CA sustained the NLRC through its decision promulgated on June 21, 2002,
observing that Northwest did not discharge its burden to prove not merely reversible error but grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of the NLRC; and that,
indeed, the NLRC had correctly held that Del Rosarios conduct did not constitute serious
misconduct, because the NLRC, in determining the usual, ordinary and commonly understood
meaning of the word fighting, had resorted to authoritative lexicons that supported its conclusion that
the exchange of words between Del Rosario and Gamboadid not come within the definition of the
word fighting.7

The CA disposed thusly:

WHEREFORE, for lack of merit, the instant petition is DISMISSED. Accordingly, the decision ofthe
NLRC dated January 11, 2000, is hereby AFFIRMEDwith the MODIFICATIONthat in lieu of
reinstatement, petitioner is ordered to pay private respondent separation pay equivalent to one
month's salary for every year of service plus full backwages without deduction or qualification,
counted from the date of dismissal until finality of this decision including other benefits to which she
is entitled under the law. Petitioner is likewise ordered to pay respondent Del Rosario attorneys
feesconsisting of five(5%) per cent of the adjudged relief.

SO ORDERED.8

Issues

The issues are the following, namely: (1) Was Del Rosarios dismissal from the service valid?; and
(2) Were the monetary awards appropriate?

Ruling

The Court AFFIRMSthe decision of the CA.

As provided in Article 282 of the Labor Code, an employer may terminate an employee for a just
cause, to wit:

Art. 282. TERMINATION BY EMPLOYER

An employer may terminate an employee 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;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representative; and

(e) Other causes analogous to the foregoing.

Northwest argues that Del Rosario was dismissed on the grounds of serious misconduct and willful
disobedience. Misconduct refers to the improper or wrong conduct that transgresses 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. But misconduct or improper behavior, to be a
just cause for termination of employment, must: (a) be serious; (b) relate to the performance ofthe
employees duties; and (c) show that the employee has become unfit to continue working for the
employer.9

There is no doubt that the last two elements of misconduct were present in the case of Del Rosario.
The cause of her dismissal related to the performance of her duties as a flightattendant, and she
became unfit to continue working for Northwest. Remaining to be determined is, therefore, whether
the misconduct was serious as tomerit Del Rosarios dismissal. In that respect, the fightbetween her
and Gamboa should beso seriousthat it entailed the termination of her employment even if it was her
first offense. Northwest insists that what transpired on May 18, 1998 between her and Gamboa was
obviously a form of fightthat it strictly prohibited, but Del Rosario disputes this by contending thatit
was only an animated discussion between her and Gamboa. She argues that as settled in American
jurisprudence fightpertained to combat or battle, like the hostile encounter or engagement between
opposing forces, suggesting primarily the notion of a brawl or unpremeditated encounter, or of a
pugilistic combat;10 while argumentwas a connected discourse based upon reason, or a course of
reasoning tending and intended to establish a position and to induce belief.11

In several rulings where the meaning of fightwas decisive, the Court has observed that the term
fightwas considered to be different from the term argument. In People v. Asto,12 for instance, the
Court characterized fightas not just a merely verbal tussle but a physical combat between two
opposing parties, to wit:

Well into their second bottle of gin, at about eleven o'clock that morning, Fernando Aquino and
Peregrino had a verbal tussle. Fernando Aquino declared that he was going to run for councilor of
1wphi 1

Alcala, Pangasinan. Peregrino countered by saying: "If you will run for that post, cousin, I will fight
you." After a brief exchange of words, Fernando Aquino, laughing, went to sit beside Abagat. As
Aquino continued with his mirth, Abagat stared at Peregrino with contempt.

xxx. A few minutes later, he heard a commotion in the plantation some two hundred meters
away. He claims to have seen several people fightingeach other with pieces of wood butdid not go
1w phi 1

to the field to check what was happening.13 (Italics supplied.)

Similarly, in Pilares, Sr. v. People,14 fightwas held to be more than just an exchange of words that
usually succeeded the provocation by either party, thus:

When the petitioner was about to hand over the bottles of beer to the private complainant, the latter
called him "coward" and dared him to get out for a fight. Insulted, the petitioner went out of his store
and chased the private complainant. (Italics supplied.)

Based on the foregoing, the incident involving Del Rosario and Gamboa could not be justly
considered as akin to the fightcontemplated by Northwest. In the eyes of the NLRC, Del Rosario and
Gamboa were arguing but not fighting. The understanding of fight as one that required physical
combat was absent during the incident of May 18, 1998. Moreover, the claim of Morales that Del
Rosario challenged Gamboa to a brawl (sabunutan) could not be given credence by virtue of its
being self-serving in favor of Northwest, and of its being an apparent afterthought on the part of
Morales during the investigation of the incident, without Del Rosario having the opportunity to
contest Morales' statement. In that context, the investigation then served only as Northwest's means
to establish that the grounds of a valid dismissal based on serious misconduct really existed.

Moreover, even assuming arguendo that the incident was the kind of fight prohibited by Northwest's
Rules of Conduct, the same could not be considered as of such seriousness as to warrant Del
Rosario's dismissal from the service. The gravity of the fight, which was not more than a verbal
argument between them, was not enough to tarnish or diminish Northwest's public image.
Under the circumstances, therefore, the CA properly ruled that the NLRC did not gravely abuse its
discretion amounting to lack or excess of jurisdiction by declaring Del Rosario's dismissal unjustified.
Northwest as the petitioner for certiorari must demonstrate grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of the NLRC. Grave abuse of discretion, according to De las
Santos v. Metropolitan Bank and Trust Company,15 "must be grave, which means either that the
judicial or quasi-judicial power was exercised in an arbitrary or despotic manner by reason of
passion or personal hostility, or that the respondent judge, tribunal or board evaded a positive duty,
or virtually refused to perform the duty enjoined or to act in contemplation of law, such as when such
judge, tribunal or board exercising judicial or quasi-judicial powers acted in a capricious or whimsical
manner as to be equivalent to lack of jurisdiction." Alas, Northwest did not show how the NLRC
could have abused its discretion, let alone gravely, in ruling adversely against it.

WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals promulgated on June 21,
2002; and ORDERS the petitioner to pay the costs of suit.

SO ORDERED.

G.R. No. 192582 April 7, 2014

BLUER THAN BLUE JOINT VENTURES COMPANY/MARY ANN DELA VEGA, Petitioners,
vs.
GLYZA ESTEBAN, Respondent.

DECISION

REYES, J.:

"It is not the job title but the actual work that the employee performs that determines whether he or
she occupies a position of trust and confidence."1 In this case, while respondent's position was
denominated as Sales Clerk, the nature of her work included inventory and cashiering, a function
that clearly falls within the sphere of rank-and-file positions imbued with trust and confidence.

Facts of the Case

Respondent Glyza Esteban (Esteban) was employed in January 2004 as Sales Clerk, and assigned
at Bluer Than Blue Joint Ventures Company's (petitioner) EGG boutique in SM City Marilao,
Bulacan, beginning the year 2006. Part of her primary tasks were attending to all customer needs,
ensuring efficient inventory, coordinating orders from clients, cashiering and reporting to the
accounting department.

In November 2006, the petitioner received a report that several employees have access to its point-
of-sale (POS) system through a universal password given by Elmer Flores (Flores). Upon
investigation, it was discovered that it was Esteban who gave Flores the password. The petitioner
sent a letter memorandum to Esteban on November 8, 2006, asking her to explain in writing why she
should not be disciplinary dealt with for tampering with the companys POS system through the use
of an unauthorized password. Esteban was also placed under preventive suspension for ten days.

In her explanation, Esteban admitted that she used the universal password three times on the same
day in December 2005, after she learned of it from two other employees who she saw browsing
through the petitioners sales inquiry. She inquired how the employees were able to open the system
and she was told that they used the "123456" password.
On November 13, 2006, Estebans preventive suspension was lifted, but at the same time, a notice
of termination was sent to her, finding her explanation unsatisfactory and terminating her
employment immediately on the ground of loss of trust and confidence. Esteban was given her final
pay, including benefits and bonuses, less inventory variances incurred by the store amounting to
8,304.93. Esteban signed a quitclaim and release in favor of the petitioner.

On December 6, 2006, Esteban filed a complaint for illegal dismissal, illegal suspension, holiday
pay, rest day and separation pay.

In a Decision2 dated September 28, 2007, the Labor Arbiter (LA) ruled in favor of Esteban and found
that she was illegally dismissed. The LA also awarded separation pay, backwages, unpaid salary
during her preventive suspension and attorneys fees. The dispositive portion of the LA decision
provides:

WHEREFORE, a Decision is hereby rendered declaring [Esteban] to have been illegally dismissed.
Corollarily, she is entitled for the payment of separation pay as prayed for at one month salary for
every year of service, plus backwages from November 13, 2006 when she was dismissed up to the
rendition of this Decision.

Further, as [Esteban] was illegally suspended she is entitled to salaries during her suspension from
November 9-13, 2006.

In addition, an attorneys fees equivalent to ten (10%) percent of the total award is hereby granted,
computed as follows:

a) Backwages

11/13/06 - 9/28/07 = 10.50 mos.

[P]350 x 26 x 10.50 = [P]95,550.00

13th Month Pay

1/12 of [P]95,550.00 = 7,962.50
SILP

[P]350 x 5/12 x 10.50 = 1,531.25 [P]105,043.75

b) Separation Pay

11/25/03 - 12/6/06 = 3 yrs.

[P]350 x 26 x 3 27,300.00

c) Unpaid Salaries

11/9 - 13/06 = 5 days

[P]350 x 5 = 1,750.00

[P]134,093.75

Ten (10%) Percent Attorneys Fees 13,409.37

TOTAL [P]147,503.12
SO ORDERED.3

The petitioner filed an appeal with the National Labor Relations Commission (NLRC), and in its
Decision4 dated September 23, 2008, the NLRC reversed the decision of the LA and dismissed the
case for illegal dismissal. The dispositive portion of the NLRC decision reads:

WHEREFORE, the decision appealed from is hereby reversed and set aside and in its stead a new
one is rendered dismissing this case for lack of merit.

[Petitioners] however are ordered to refund to [Esteban] the amount of [P]8,304.93 which was
illegally deducted from her salary.

SO ORDERED.5

Thus, Esteban went to the Court of Appeals (CA) on certiorari. In the assailed Decision6 dated
November 25, 2009, the CA granted Estebans petition and reinstated the LA decision, to wit:

WHEREFORE, premises considered, the petition is hereby GRANTED. The assailed Decision dated
September 23, 2008 and Resolution dated November 27, 2008 of public respondent National Labor
Relations Commission are ANNULLED and SET ASIDE[.]

Accordingly, the Decision of the Labor Arbiter dated September 28, 2007 is REINSTATED with
MODIFICATION, that the award of separation pay is computed from January 2, 2004, and not from
November 25, 2003.

SO ORDERED.7

Hence, this petition with the following assignment of errors:

I. THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION WHEN

IT HELD THAT RANK-AND-FILE EMPLOYEES CANNOT BE DISMISSED ON GROUND
OF LOSS OF TRUST AND CONFIDENCE.

II. THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN

APPLYING THE PRINCIPLE OF REASONABLE PROPORTIONALITY ON THE
WRONGFUL ACTS OF RESPONDENT ESTEBAN.

II. THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN

HOLDING THAT THE PREVENTIVE SUSPENSION OF RESPONDENT ESTEBAN WAS
UNWARRANTED.

IV. THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN

HOLDING THAT THE WAGE DEDUCTION FOR THE NEGATIVE VARIANCE AMOUNTING
TO [P]8,304.93 IS UNFOUNDED.8

The petitioner argues that it had just cause to terminate the employment of Esteban, that is, loss of
trust and confidence. Esteban, the petitioner believes, is a rank-and-file employee whose nature of
work is reposed with trust and confidence. Her unauthorized access to the POS system of the
company and her dissemination of the unauthorized password, which Esteban admitted, is a breach
of trust and confidence, and justifies her dismissal.9
The petitioner also contends that the CA failed to appreciate the significance of Estebans infraction
when it ruled that suspension would have sufficed to discipline her. Estebans length of service
should also not have been considered to mitigate the penalty imposed, as her acts show a lack of
concern for her employer. As regards her preventive suspension, the petitioner maintains that it was
justified in imposing the same despite that the acts were committed almost a year before the
investigation since it did not have any prior knowledge of the infraction.10

Finally, the petitioner contends that the deduction on Estebans wages of the negative variances in
the sales is allowed by the Labor Code, and such practice has been widely recognized in the retail
industry.11

Esteban, on the other hand, avers that the competency clause she signed with the petitioner merely
states the following functions: (1) attend to and assist the customer in all their needs; (2) conduct
physical inventory; (3) clean and tidy up the merchandise and store; and (4) coordinate with the
stockroom for orders. As regards the cashiering function, it merely states "to follow."12 As such, her
main task is that of a sales clerk.

Esteban also avers, albeit belatedly, that the notice to explain given to her did not identify the acts or
omissions allegedly committed by her. She also contends that it was the companys fault in not
creating a strong password, and that she was forced into signing the quitclaim and waiver, among
others.13

Ruling of the Court

The LA and the CA were one in ruling that Esteban was illegally dismissed by the petitioner. It was
their finding that the position occupied by Esteban was that of a rank-and-file employee and she is
neither a supervisor, manager nor a cashier; thus, she does not hold a position of trust and
confidence.14 The CA also affirmed the ruling of the LA that Estebans preventive suspension was not
warranted.15 The CA also upheld the finding of the NLRC that the deduction of 8,304.93,
representing the stores negative variance, from Estebans salary violates Article 113 of the Labor
Code, which prohibits wage deduction.16

The NLRC, on the other hand, found that Esteban was dismissed for cause. According to the NLRC,
Esteban admitted that she violated the petitioner when she made an unauthorized access to the
POS system, and even shared the password to another employee. The NLRC also rejected
Estebans assertion that her job as sales clerk does not occupy a position of trust, and that her
preventive suspension was not warranted. With regard to her waiver and quitclaim, the NLRC upheld
its validity as Esteban signed the same with full awareness that she committed a wrong.17

Loss of trust and confidence as a

valid ground for dismissal from
employment

The antecedent facts that gave rise to Estebans dismissal from employment are not disputed in this
case. The issue is whether Estebans acts constitute just cause to terminate her employment with
the company on the ground of loss of trust and confidence.

Loss of trust and confidence is premised on the fact that the employee concerned holds a position of
responsibility, trust and confidence. The employee must be invested with confidence on delicate
matters, such as the custody, handling, care and protection of the employers property and
funds.18 "[W]ith respect to rank-and-file personnel, loss of trust and confidence as ground for valid
dismissal requires proof of involvement in the alleged events in question, and that mere
uncorroborated assertions and accusations by the employer will not be sufficient."19

Esteban is, no doubt, a rank-and-file employee. The question now is whether she occupies a
position of trust and confidence.

Among the fiduciary rank-and-file employees are cashiers, auditors, property custodians, or those
who, in the normal exercise of their functions, regularly handle significant amounts of money or
property.20 These employees, though rank-and-file, are routinely charged with the care and custody
of the employers money or property, and are thus classified as occupying positions of trust and
confidence.21

In this case, Esteban was a sales clerk. Her duties, however, were more than that of a sales clerk.
Aside from attending to customers and tending to the shop, Esteban also assumed cashiering
duties. This, she does not deny; instead, she insists that the competency clause provided that her
tasks were that of a sales clerk and the cashiering function was labelled "to follow."22 A perusal of the
competency clause, however, shows that it is merely an attestation on her part that she is competent
to "meet the basic requirements needed for the position [she] is applying for x x x". It does not define
her actual duties. As consistently ruled by the Court, it is not the job title but the actual work that the
employee performs that determines whether he or she occupies a position of trust and
confidence.23 In Philippine Plaza Holdings, Inc. v. Episcope,24 the Court ruled that a service attendant,
who was tasked to attend to dining guests, handle their bills and receive payments for transmittal to
the cashier and was therefore involved in the handling of company funds, is considered an employee
occupying a position of trust and confidence. Similarly in Estebans case, given that she had in her
care and custody the stores property and funds, she is considered as a rank-and-file employee
occupying a position of trust and confidence.

Proceeding from the above conclusion, the pivotal question that must be answered is whether
Estebans acts constitute just cause to terminate her employment.

Loss of trust and confidence to be a valid cause for dismissal must be work related such as would
show the employee concerned to be unfit to continue working for the employer and it must be based
on a wilful breach of trust and founded on clearly established facts.25 Such breach is wilful if it is done
intentionally, knowingly, and purposely, without justifiable excuse as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently.26 The loss of trust and confidence must spring
from the voluntary or wilful act of the employee, or by reason of some blameworthy act or omission
on the part of the employee.27

In this case, the Court finds that the acts committed by Esteban do not amount to a wilful breach of
trust. She admitted that she accessed the POS system28 with the use of the unauthorized "123456"
password. She did so, however, out of curiosity and without any obvious intention of defrauding the
petitioner. As professed by Esteban, "she was acting in good faith in verifying what her co-staff told
her about the opening of the computer by the use of the "123456" password, x x x. She even told her
co-staff not to open again said computer, and that was the first and last time she opened said
computer."29 Moreover, the petitioner even admitted that Esteban has her own password to the POS
system. If it was her intention to manipulate the stores inventory and funds, she could have done so
long before she had knowledge of the unauthorized password. But the facts on hand show that she
did not. The petitioner also failed to establish a substantial connection between Estebans use of the
"123456" password and any loss suffered by the petitioner. Indeed, it may be true that, as posited by
the petitioner, it is the fact that she used the password that gives cause to the loss of trust and
confidence on Esteban. However, as ruled above, such breach must have been done intentionally,
knowingly, and purposely, and without any justifiable excuse, and not simply something done
carelessly, thoughtlessly, heedlessly or inadvertently. To the Courts mind, Estebans lapse is, at
best, a careless act that does not merit the imposition of the penalty of dismissal.

The Court is not saying that Esteban is innocent of any breach of company policy. That she relayed
1wphi1

the password to another employee is likewise demonstrative of her mindless appreciation of her
duties as a sales clerk in the petitioners employ. But absent any showing that her acts were done
with "moral perverseness" that would justify the claimed loss of trust and confidence attendant to her
job,30 the Court must sustain the conclusion that Esteban was illegally dismissed. As stated by the
CA, "[s]uspension would have sufficed as punishment, considering that the petitioner had already
been with the company for more than 2 years, and the petitioner apologized and readily admitted her
mistake in her written explanation, and considering that no clear and convincing evidence of loss or
prejudice, which was suffered by the [petitioner] from [Estebans] supposed infraction."31

Preventive suspension during

investigation

Preventive suspension is a measure allowed by law and afforded to the employer if an employees
continued employment poses a serious and imminent threat to the employers life or property or of
his co-workers.32 It may be legally imposed against an employee whose alleged violation is the
subject of an investigation.33

In this case, the petitioner was acting well within its rights when it imposed a 10-day preventive
suspension on Esteban. While it may be that the acts complained of were committed by Esteban
almost a year before the investigation was conducted, still, it should be pointed out that Esteban was
performing functions that involve handling of the petitioners property and funds, and the petitioner
had every right to protect its assets and operations pending Estebans investigation.34

Sales negative variances as wage

deductions

The petitioner deducted the amount of 8,304.93 from Estebans last salary. According to the
petitioner, this represents the stores negative variance for the year 2005 to 2006. The petitioner
justifies the deduction on the basis of alleged trade practice and that it is allowed by the Labor Code.

Article 113 of the Labor Code provides that no employer, in his own behalf or in behalf of any
person, shall make any deduction from the wages of his employees, except in cases where the
employer is authorized by law or regulations issued by the Secretary of Labor and Employment,
among others. The Omnibus Rules Implementing the Labor Code, meanwhile, provides:

SECTION 14. Deduction for loss or damage. Where the employer is engaged in a trade,
occupation or business where the practice of making deductions or requiring deposits is recognized
to answer for the reimbursement of loss or damage to tools, materials, or equipment supplied by the
employer to the employee, the employer may make wage deductions or require the employees to
make deposits from which deductions shall be made, subject to the following conditions:

(a) That the employee concerned is clearly shown to be responsible for the loss or damage;

(b) That the employee is given reasonable opportunity to show cause why deduction should
not be made;
 (c) That the amount of such deduction is fair and reasonable and shall not exceed the actual
loss or damage; and

(d) That the deduction from the wages of the employee does not exceed 20 percent of the
employees wages in a week.

In this case, the petitioner failed to sufficiently establish that Esteban was responsible for the
negative variance it had in its sales for the year 2005 to 2006 and that Esteban was given the
opportunity to show cause the deduction from her last salary should not be made. The Court cannot
accept the petitioners statement that it is the practice in the retail industry to deduct variances from
an employees salary, without more. In Nia Jewelry Manufacturing of Metal Arts, Inc. v.
Montecillo,35 the Court ruled that:

[T]he petitioners should first establish that the making of deductions from the salaries is authorized
by law, or regulations issued by the Secretary of Labor. Further, the posting of cash bonds should be
proven as a recognized practice in the jewelry manufacturing business, or alternatively, the
petitioners should seek for the determination by the Secretary of Labor through the issuance of
appropriate rules and regulations that the policy the former seeks to implement is necessary or
desirable in the conduct of business. The petitioners failed in this respect. It bears stressing that
without proofs that requiring deposits and effecting deductions are recognized practices, or without
securing the Secretary of Labor's determination of the necessity or desirability of the same, the
imposition of new policies relative to deductions and deposits can be made subject to abuse by the
employers. This is not what the law intends.36
1w phi1

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision dated November 25, 2009 and
Resolution dated June 10, 2010 of the Court of Appeals in CA-G.R. SP No. 107573 insofar as it
reinstated with modification the Decision of the Labor Arbiter dated September 28, 2007 are
AFFIRMED. Insofar as it affirmed respondent Glyza Esteban's preventive suspension, the same are
hereby REVERSED.

The Labor Arbiter is hereby ORDERED to re-compute the monetary award in favor of Glyza Esteban
and to exclude the award of backwages during such period of preventive suspension, if any.

SO ORDERED

Case Digest: Arabit, et al. v. Jardine Pacific Finance

G.R. No. 181719 : April 21, 2014

EUGENE S. ARABIT, ET AL., Petitioner, v. JARDINE PACIFIC FINANCE, INC., Respondent.

BRION, J.:
FACTS:

Petitioners were former regular employees of respondent Jardine Pacific Finance, Inc. (formerly MB
Finance) (Jardine). The petitioners were also officers and members of MB Finance Employees
Association-FFW Chapter (the Union), a legitimate labor union and the sole exclusive bargaining agent of
the employees of Jardine. The table below shows the petitioners previously occupied positions, as well as
their total length of service with Jardine before their dismissal from employment.

On the claim of financial losses, Jardine decided to reorganize and implement a redundancy program
among its employees. The petitioners were among those affected by the redundancy program. Jardine
thereafter hired contractual employees to undertake the functions these employees used to perform.

The Union filed a notice of strike with the National Conciliation and Mediation Board (NCMB), questioning
the termination of employment of the petitioners who were also union officers. The Union alleged unfair
labor practice on the part of Jardine, as well as discrimination in the dismissal of its officers and members.

Negotiations ensued between the Union and Jardine under the auspices of the NCMB, and both parties
eventually reached an amicable settlement. In the settlement, the petitioners accepted their redundancy
pay without prejudice to their right to question the legality of their dismissal with the NLRC. Jardine paid
the petitioners a separation package composed of their severance pay, plus their grossed up
transportation allowance.

On June 1, 1999, the petitioners and the Union filed a complaint against Jardine with the NLRC for illegal
dismissal and unfair labor practice.

Jardine argued in its defense that the company had been incurring substantial business losses from 1996
to 1998. According to Jardine, its audited financial statements reflect that for 1996, it suffered a net loss of
P5,538,960.00; for 1997, a net loss in the amount of P57,274,018.00; and a net loss of P95,529,527.00
for 1998.

Because of these serious business losses, Jardine asserted that it had to lay-off some of its employees
and reorganize its ranks to eliminate positions that were in excess of what its business required.

Jardine, however, admitted that it hired contractual employees to replace petitioners in their previous
posts. Jardine reasoned out that no bad faith took place since the hiring of contractual employees was a
valid exercise of its management prerogative.15 Jardine argued that the distinction between redundancy
and retrenchment is not material; an employer resorts to retrenchment or redundancy for the same
reason, namely the economics of business. Since Jardine successfully established that it incurred serious
business losses, then termination of employment of the petitioners was valid for all intents and purposes.

The LA ruled in the petitioners favor. The CA reversed the LAs and the NLRCs rulings, and granted
Jardines petition for certiorari. The CA found that Jardines act of hiring contractual employees in
replacement of the petitioners does not run counter to the argument that their positions are already
superfluous.

ISSUE: Whether the petitioners maintain that the CA gravely abused its discretion and that its ruling is not
in conformity with the law and jurisprudence.

HELD: We resolve to GRANT the petition.

REMEDIAL LAW

We emphasize at the outset that the current petition was brought under Rule 45 of the Rules of Court. As
a rule, only questions of law may be raised on appeal under this remedy. This is in contrast with a petition
for certiorari brought under Rule 65 where the review centers on the jurisdictional errors the lower court or
tribunal may have committed.
We thus limit our review to errors of law which the CA might have committed. A question of law arises
when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when
the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same
must not involve an examination of the probative value of the evidence presented by the litigants or any of
them.

In ruling for legal correctness, we have to view the CA decision in the same context that the petition for
certiorari it ruled upon was presented to it; we have to examine the CA decision from the prism of whether
it correctly determined the presence or absence of grave abuse of discretion in the NLRC decision before
it, not on the basis of whether the NLRC decision on the merits of the case was correct. In other words,
we have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the
NLRC decision challenged before it. This is the approach that should be basic in a Rule 45 review of a
CA ruling in a labor case.

LABOR LAW

We cannot accept Jardines shallow understanding of the concepts of redundancy and retrenchment in
determining the validity of the severance of an employer-employee relationship. The fact that they are
found together in just one provision does not necessarily give rise to the conclusion that the difference
between them is immaterial. This Court has already ruled before that retrenchment and redundancy are
two different concepts; they are not synonymous; thus, they should not be used interchangeably. The
clear distinction between these two concepts was discussed in Andrada, et al., v. NLRC, citing the case
of Sebuguero v. NLRC, where this Court clarified:

Redundancy exists where the services of an employee are in excess of what is reasonably demanded by
the actual requirements of the enterprise. A position is redundant where it is superfluous, and superfluity
of a position or positions may be the outcome of a number of factors, such as over hiring of workers,
decreased volume of business, or dropping of a particular product line or service activity previously
manufactured or undertaken by the enterprise.

Retrenchment, on the other hand, is used interchangeably with the term lay-off. It is the termination of
employment initiated by the employer through no fault of the employees and without prejudice to the
latter, resorted to by management during periods of business recession, industrial depression, or
seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of
the plant for a new production program or the introduction of new methods or more efficient machinery, or
of automation. Simply put, it is an act of the employer of dismissing employees because of losses in the
operation of a business, lack of work, and considerable reduction on the volume of his business, a right
consistently recognized and affirmed by this Court.

These rulings appropriately clarify that redundancy does not need to be always triggered by a decline in
the business. Primarily, employers resort to redundancy when the functions of an employee have already
become superfluous or in excess of what the business requires. Thus, even if a business is doing well, an
employer can still validly dismiss an employee from the service due to redundancy if that employees
position has already become in excess of what the employers enterprise requires.

From this perspective, it is illogical for Jardine to terminate the petitioners employment and replace them
with contractual employees. The replacement effectively belies Jardines claim that the petitioners
positions were abolished due to superfluity. Redundancy could have been justified if the functions of the
petitioners were transferred to other existing employees of the company.

To dismiss the petitioners and hire new contractual employees as replacements necessarily give rise to
the sound conclusion that the petitioners services have not really become in excess of what Jardines
business requires. To replace the petitioners who were all regular employees with contractual ones would
amount to a violation of their right to security of tenure. For this, we affirm the NLRCs ruling, citing the LAs
decision, when it ruled:

In the case at bench, respondents did not dispute that after laying-off complainants herein, they engaged
the services of an agency to perform the tasks use to be done by complainants. This is in direct
contradiction to the concept of redundancy which precisely requires the trimming down of the workforce
because a task is being carried out by just too many people. The subsequent contracting out to an
agency the functions or duties that used to be the domain of individual complainants herein is a
circumvention of their constitutional rights to security of tenure, and therefore illegal.

LABOR LAW

We recognize that management has the prerogative to characterize an employees services as no longer
necessary or sustainable, and therefore properly terminable.

The CA also correctly cited De Ocampo, et al., v. NLRC when it discussed that Jardines decision to hire
contractual employees as replacements is a management prerogative which the company has the right to
undertake to implement a more economic and efficient operation of its business.

In De Ocampo, this Court held that, in the absence of proof that the management abused its discretion or
acted in a malicious or arbitrary manner in replacing dismissed employees with contractual ones, judicial
intervention should not be made in the companys exercise of its management prerogative.

The employers exercise of its management prerogative, however, is not an unbridled right that cannot be
subjected to this Courts scrutiny. The exercise of management prerogative is subject to the caveat that it
should not performed in violation of any law and that it is not tainted by any arbitrary or malicious motive
on the part of the employer.

This Court, in several cases, sufficiently explained that the employer must follow certain guidelines to
dismiss employees due to redundancy. These guidelines aim to ensure that the dismissal is not
implemented arbitrarily and is not tainted with bad faith against the dismissed employees.

In Golden Thread Knitting Industries, Inc. v. NLRC, this Court laid down the principle that the employer
must use fair and reasonable criteria in the selection of employees who will be dismissed from
employment due to redundancy. Such fair and reasonable criteria may include the following, but are not
limited to: (a) less preferred status (e.g. temporary employee); (b) efficiency; and (c) seniority. The
presence of these criteria used by the employer shows good faith on its part and is evidence that the
implementation of redundancy was painstakingly done by the employer in order to properly justify the
termination from the service of its employees.
For the implementation of a redundancy program to be valid, the employer must comply with the following
requisites: (1) written notice served on both the employees and the Department of Labor and Employment
at least one month prior to the intended date of retrenchment; (2) payment of separation pay equivalent to
at least one month pay or at least one month pay for every year of service, whichever is higher; (3) good
faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what
positions are to be declared redundant and accordingly abolished.

Admittedly, Jardine complied with guidelines 1 and 2 of the guidelines in Asian Alcohol. Jardine informed
the Department of Labor and Employment of the petitioners separation from the service due to
redundancy on April 30, 1999, one month before their terminations effectivity. Also, the petitioners were
given their individual separation packages, composed of their severance pay, plus their grossed up
transportation allowance.

Guidelines 3 and 4 of Asian Alcohol, however, are different matters. These last two guidelines are
interrelated to ensure good faith in abolishing redundant positions; the employer must clearly show that it
used fair and reasonable criteria in ascertaining what positions are to be declared redundant.

GRANTED.

Case Digest: SPI Tech, et al. v. Mapua

G.R. No. 191154 : April 7, 2014

SPI TECHNOLOGIES, INC., ET AL., Petitioners, v. VICTORIA K. MAPUA, Respondent.

REYES, J.:

FACTS:

Victoria K. Mapua (Mapua) alleged that she was hired in 2003 by SPI Technologies, Inc. (SPI) and was
the Corporate Developments Research/Business Intelligence Unit Head and Manager of the company.

Subsequently in August 2006, the then Vice President and Corporate Development Head, Peter Maquera
(Maquera) hired Elizabeth Nolan (Nolan) as Mapuas supervisor.

Sometime in October 2006, the hard disk on Mapuas laptop crashed, causing her to lose files and data.
Mapua informed Nolan and her colleagues that she was working on recovering the lost data and asked
for their patience for any possible delay on her part in meeting deadlines.

On November 13, 2006, Mapua retrieved the lost data with the assistance of National Bureau of
Investigation Anti-Fraud and Computer Crimes Division. Yet, Nolan informed Mapua that she was
realigning Mapuas position to become a subordinate of co-manager Sameer Raina (Raina) due to her
missing a work deadline. Nolan also disclosed that Mapuas colleagues were demotivated because she
was taking things easy while they were working very hard, and that she was frequently absent, under
timing, and coming in late every time [Maquera] goes on leave or on vacation.
On November 16, 2006, Mapua obtained a summary of her attendance for the last six months to prove
that she did not have frequent absences or under time when Maquera would be on leave or vacation.
When shown to Nolan, she was merely told not to give the matter any more importance and to just move
on.

In December 2006, Mapua noticed that her colleagues began to ostracize and avoid her. Nolan and
Raina started giving out majority of her research work and other duties under Healthcare and Legal
Division to the rank-and-file staff. Mapua lost about 95% of her work projects and job responsibilities.

Mapua consulted these work problems with SPIs Human Resource Director, Lea Villanueva (Villanueva),
and asked if she can be transferred to another department within SPI. Subsequently, Villanueva informed
Mapua that there is an intra-office opening and that she would schedule an exploratory interview for her.
However, due to postponements not made by Mapua, the interview did not materialize.

On February 28, 2007, Mapua allegedly saw the new table of organization of the Corporate Development
Division which would be renamed as the Marketing Division. The new structure showed that Mapuas level
will be again downgraded because a new manager will be hired and positioned between her rank and
Rainas.

On March 21, 2007, Raina informed Mapua over the phone that her position was considered redundant
and that she is terminated from employment effective immediately. Villanueva notified Mapua that she
should cease reporting for work the next day. Her laptop computer and company mobile phone were
taken right away and her office phone ceased to function.

Mapua was shocked and told Raina and Villanueva that she would sue them. Mapua subsequently called
her lawyer to narrate the contents of the termination letter.

Mapuas lawyer, in a phone call, advised Villanueva that SPI violated Mapuas right to a 30-day notice.
Mapua filed with the Labor Arbiter (LA) a complaint for illegal dismissal, claiming reinstatement or if
deemed impossible, for separation pay. Afterwards, she went to a meeting with SPI, where she was given
a second termination letter, the contents of which were similar to the first one.

On April 25, 2007, Mapua received through mail, a third Notice of Termination dated March 21, 2007 but
the date of effectivity of the termination was changed from March 21 to April 21, 2007. It further stated
that her separation pay will be released on May 20, 2007 and a notation was inscribed, refused to sign
and acknowledge with unintelligible signatures of witnesses.

On May 13, 2007, a recruitment advertisement of SPI was published in the Philippine Daily Inquirer
(Inquirer advertisement, for brevity). It listed all vacancies in SPI, including a position for Marketing
Communications Manager under Corporate Support the same group where Mapua previously belonged.

SPI also sent a demand letter to Mapua, asking her to pay for the remaining net book value of the
company car assigned to her under SPIs car plan policy. Under the said plan, Mapua should pay the
remaining net book value of her car if she resigns within five years from start of her employment date.

In her Reply and Rejoinder, Mapua submitted an affidavit and alleged that Prime Manpower Resources
Development (Prime Manpower) posted an advertisement on the website of Jobstreet Philippines for the
employment of a Corporate Development Manager in an unnamed Business Process Outsourcing (BPO)
company located in Paraque City. Mapua suspected that this advertisement was for SPI because the
writing style used was similar to Rainas. She also claimed that SPI is the only BPO office in Paraque City
at that time. Thereafter, she applied for the position under the pseudonym of Jeanne Tesoro. On the day
of her interview with Prime Manpowers consultant, Ms. Portia Dimatulac (Dimatulac), the latter allegedly
revealed to Mapua that SPI contracted Prime Manpowers services to search for applicants for the
Corporate Development Manager position.

Because of these developments, Mapua was convinced that her former position is not redundant.
According to her, she underwent psychiatric counseling and incurred medical expenses as a result of
emotional anguish, sleepless nights, humiliation and shame from being jobless. She also averred that the
manner of her dismissal was unprofessional and incongruous with her rank and stature as a manager as
other employees have witnessed how she was forced to vacate the premises on the same day of her
termination.

On the other hand, SPI stated that the company regularly makes an evaluation and assessment of its
corporate/organizational structure due to the unexpected growth of its business along with its partnership
with ePLDT and the acquisition of CyMed. As a result, SPI underwent a reorganization of its structure
with the objective of streamlining its operations. This was embodied in an Inter-Office Memorandum dated
August 28, 2006 issued by the companys Chief Executive Officer.

SPI denied contracting the services of Prime Manpower for the hiring of a Corporate Development
Manager and emphasized that Prime Manpower did not even state the name of its client in the Jobstreet
website. SPI also countered that Dimatulacs alleged revelation to Mapua that its client is SPI must be
struck down as mere hearsay because only Mapua executed an affidavit to prove that such disclosure
was made. While SPI admitted the Inquirer advertisement, the company stated that Mapua was a
Corporate Development Manager and not a Marketing Communications Manager, and that from the
designations of these positions, it is obvious that the functions of one are entirely different from that of the
other.

LA declared the termination to be illegal. NLRC reversed the decision. CA reinstated LAs decision.

ISSUES: 1) Whether Mapuas termination is illegal; 2) Was the redundancy program valid?

HELD: The Court sustains the CAs ruling.

LABOR LAW: requisites of termination

Mapua was dismissed from employment supposedly due to redundancy. However, she contended that
her position as Corporate Development Manager is not redundant. She cited that SPI was in fact actively
looking for her replacement after she was terminated. Furthermore, SPI violated her right to procedural
due process when her termination was made effective on the same day she was notified of it.

Article 283 of the Labor Code provides for the following:

ART. 283. Closure of establishment and reduction of personnel. The employer may also terminate the
employment of any employee due to installation of labor-saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the
worker and the Department of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to installation of labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least one (1) month pay or to at
least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closures or cessation of operations of establishment or undertaking not due to
serious business losses and financial reverses, the separation pay shall be equivalent to one (1) month
pay or at least one-half () month pay for every year of service, whichever is higher. A fraction of at least
six (6) months shall be considered as one (1) whole year.

Expounding on the above requirements of written notice and separation pay, this Court in Asian Alcohol
Corporation v. NLRC pronounced that for a valid implementation of a redundancy program, the employer
must comply with the following requisites: (1) written notice served on both the employee and the DOLE
at least one month prior to the intended date of termination; (2) payment of separation pay equivalent to
at least one month pay or at least one month pay for every year of service, whichever is higher; (3) good
faith in abolishing the redundant position; and (4) fair and reasonable criteria in ascertaining what
positions are to be declared redundant.

Anent the first requirement which is written notice served on both the employee and the DOLE at least
one month prior to the intended date of termination, SPI had discharged the burden of proving that it
submitted a notice to the DOLE on March 21, 2007, stating therein that the effective date of termination is
on April 21, 2007. It is, however, quite peculiar that two kinds of notices were served to Mapua. One
termination letter stated that its date of effectivity is on the same day, March 21, 2007. The other
termination letter sent through mail to Mapuas residence stated that the effective date of her termination
is on April 21, 2007.

Explaining the discrepancy, SPI alleged that the company served a notice to Mapua on March 21, 2007,
which stated that the effective date of termination is on April 21, 2007. However she refused to
acknowledge or accept the letter. Later on, Mapua requested for a copy of the said letter but due to
inadvertence and oversight, a draft of the termination letter bearing a wrong effectivity date was given to
her. To correct the oversight, a copy of the original letter was sent to her through mail.

Our question is, after Mapua initially refused to accept the letter, why did SPI make a new letter instead of
just giving her the first one which the Court notes was already signed and witnessed by other employees?

Curiously, there was neither allegation nor proof that the original letter was misplaced or lost which would
necessitate the drafting of a new one. SPI did not even explain in the second letter that the same was
being sent in lieu of the one given to her. Hence, SPI must shoulder the consequence of causing the
confusion brought by the variations of termination letters given to Mapua.

On the matter of separation pay, there is no question that SPI indeed offered separation pay to Mapua,
but the offer must be accompanied with good faith in the abolishment of the redundant position and fair
and reasonable criteria in ascertaining the redundant position. It is insignificant that the amount offered to
Mapua is higher than what the law requires because the Court has previously noted that a job is more
than the salary that it carries. There is a psychological effect or a stigma in immediately finding ones self
laid off from work.
LABOR LAW: redundancy

2) In AMA Computer College, Inc. v. Garcia, et al., the Court held that the presentation of the new table of
the organization and the certification of the Human Resources Supervisor that the positions occupied by
the retrenched employees are redundant are inadequate as evidence to support the colleges redundancy
program.

Also connected with the evidence negating redundancy was SPIs publication of job vacancies after
Mapua was terminated from employment. SPI maintained that the CA erred when it considered Mapuas
self-serving affidavit as regards the Prime Manpower advertisement because the allegations therein were
based on Mapuas unfounded suspicions. Also, the failure of Mapua to present a sworn statement of
Dimatulac renders the formers statements hearsay.

Even if we disregard Mapuas affidavit as regards the Prime Manpower advertisement, SPI admitted that it
caused the Inquirer advertisement for a Marketing Communications Manager position. Mapua alleged
that this advertisement belied the claim of SPI that her position is redundant because the Corporate
Development division was only renamed to Marketing division.

Instead of explaining how the functions of a Marketing Communications Manager differ from a Corporate
Development Manager, SPI hardly disputed Mapua when it stated that, judging from the titles or
designation of the positions, it is obvious that the functions of one are entirely different from that of the
other. SPI, being the employer, has possession of valuable information concerning the functions of the
offices within its organization. Nevertheless, it did not even bother to differentiate the two positions.

Furthermore, on the assumption that the functions of a Marketing Communications Manager are different
from that of a Corporate Development Manager, it was not even discussed why Mapua was not
considered for the position. While SPI had no legal duty to hire Mapua as a Marketing Communications
Manager, it could have clarified why she is not qualified for that position. In fact, Mapua brought up the
subject of transfer to Villanueva and Raina several times prior to her termination but to no avail. There
was even no showing that Mapua could not perform the duties of a Marketing Communications Manager.

Therefore, even though the CA based its ruling only on the Prime Manpower advertisement coupled with
the purported disclosure to Mapua, the Court holds that the confluence of other factors supports the said
ruling. The Court does not agree with the rationalization of the NLRC that if it were true that her position
was not redundant and indispensable, then the company must have already hired a new one to replace
her in order not to jeopardize its business operations. The fact that there is none only proves that her
position was not necessary and therefore superfluous.

What the above reasoning of the NLRC failed to perceive is that of primordial consideration is not the
nomenclature or title given to the employee, but the nature of his functions. It is not the job title but the
actual work that the employee performs. Also, change in the job title is not synonymous to a change in
the functions. A position cannot be abolished by a mere change of job title. In cases of redundancy, the
management should adduce evidence and prove that a position which was created in place of a previous
one should pertain to functions which are dissimilar and incongruous to the abolished office.

CIVIL LAW: damages

The Court sustains the CAs award of moral and exemplary damages.Award of moral and exemplary
damages for an illegally dismissed employee is proper where the employee had been harassed and
arbitrarily terminated by the employer. Moral damages may be awarded to compensate one for diverse
injuries such as mental anguish, besmirched reputation, wounded feelings, and social humiliation
occasioned by the employers unreasonable dismissal of the employee. The Court has consistently
accorded the working class a right to recover damages for unjust dismissals tainted with bad faith; where
the motive of the employer in dismissing the employee is far from noble. The award of such damages is
based not on the Labor Code but on Article 220 of the Civil Code. However, the Court observes that the
CA decision affirming the LAs award of P500,000.00 and P250,000.00 as moral and exemplary damages,
respectively, is evidently excessive because the purpose for awarding damages is not to enrich the
illegally dismissed employee. Consequently, the Court hereby reduces the amount of P50,000.00 each as
moral and exemplary damages.

Mapua is also entitled to attorneys fees but the Court is modifying the amount of P196,848.42 awarded by
the LA and fix such attorneys fees in the amount of ten percent (10%) of the total monetary award,
pursuant to Article 11157 of the Labor Code.
WHEREFORE, the Decision dated October 28, 2009 and Resolution dated January 18, 2010 of the
Court of Appeals in CA-G.R. SP. No. 107879 are hereby AFFIRMED with MODIFICATIONS.

Case Digest: Emeritus Security & Maintenance Systems v.

Dailig
G.R. No. 204761 : April 2, 2014

EMERITUS SECURITY AND MAINTENANCE SYSTEMS, INC., Petitioner, v. JANRIE C. DAILIG,

Respondent.

CARPIO, J.:

FACTS:

In August 2000, petitioner hired respondent as one of its security guards. During his employment,
respondent was assigned to petitioner's various clients, the last of which was Panasonic in Calamba,
Laguna starting 16 December 2004.

On 10 December 2005, respondent was relieved from his post.

On 27 January 2006, respondent filed a complaint for underpayment of wages, non-payment of legal and
special holiday pay, premium pay for rest day and underpayment of ECOLA before the Department of
Labor and Employment, National Capital Region. The hearing officer recommended the dismissal of the
complaint since the claims were already paid.

On 16 June 2006, respondent filed a complaint for illegal dismissal and payment of separation pay
against petitioner before the Conciliation and Mediation Center of the NLRC. On 14 July 2006,
respondent filed another complaint for illegal dismissal, underpayment of salaries and non-payment of full
backwages before the NLRC.

Respondent claimed that on various dates in December 2005 and from January to May 2006, he went to
petitioners office to follow-up his next assignment. After more than six months since his last assignment,
still respondent was not given a new assignment. Respondent argued that if an employee is on floating
status for more than six months, such employee is deemed illegally dismissed.

Petitioner denied dismissing respondent. Petitioner admitted that it relieved respondent from his last
assignment on 10 December 2005; however, petitioner required respondent to report to the head office
within 48 hours from receipt of the order of relief. Respondent allegedly failed to comply. Petitioner
claimed that on 27 January 2006 it sent respondent a notice to his last known address requiring him to
report to the head office within 72 hours from receipt of the said notice. Petitioner further alleged that it
had informed respondent that he had been absent without official leave for the month of January 2006,
and that his failure to report within 72 hours from receipt of the notice would mean that he was no longer
interested to continue his employment.

Petitioner also claimed that there was no showing that respondent was prevented from returning to his
work and that it had consistently manifested its willingness to reinstate him to his former position. In
addition, the fact that there was no termination letter sent to respondent purportedly proved that
respondent was not dismissed.

On 5 December 2007, the Labor Arbiter rendered a Decision, declaring respondent to have been illegally
dismissed.

Petitioner appealed before the NLRC, which dismissed the appeal for lack of merit. Petitioner moved for
reconsideration, which the NLRC denied. The NLRC, however, pointed out that the computation of
respondents award of full backwages should be reckoned from 10 June 2006 and not 10 December 2005.

On appeal with the Court of Appeals, petitioner argued that there was abandonment on respondents part
when he refused to report for work despite notice. Thus, there was no illegal dismissal to speak of.
ISSUES:
1) whether respondent was illegally dismissed by respondent and
2) if he was, whether respondent is entitled to separation pay, instead of reinstatement.
HELD: The Court affirms the finding of illegal dismissal of the Labor Arbiter, NLRC, and Court of
Appeals. However, the Court sets aside the Court of Appeals award of separation pay in favor of
respondent, and reinstates the Labor Arbiters reinstatement order.

LABOR LAW: illegal dismissal

Petitioner admits relieving respondent from his post as security guard on 10 December 2005. There is
also no dispute that respondent remained on floating status at the time he filed his complaint for illegal
dismissal on 16 June 2006. In other words, respondent was on floating status from 10 December 2005 to
16 June 2006 or more than six months. Petitioners allegation of sending respondent a notice sometime in
January 2006, requiring him to report for work, is unsubstantiated, and thus, self-serving.

The Court agrees with the ruling of the Labor Arbiter, NLRC and Court of Appeals that a floating status of
a security guard, such as respondent, for more than six months constitutes constructive dismissal. In
Nationwide Security and Allied Services, Inc. v. Valderama, the Court held:

x x x the temporary inactivity or floating status of security guards should continue only for six months.
Otherwise, the security agency concerned could be liable for constructive dismissal. The failure of
petitioner to give respondent a work assignment beyond the reasonable six-month period makes it liable
for constructive dismissal. x x x

Further, the Court notes that the Labor Arbiter, NLRC, and Court of Appeals unanimously found that
respondent was illegally dismissed by petitioner. Factual findings of quasi-judicial bodies like the NLRC, if
supported by substantial evidence, are accorded respect and even finality by this Court, more so when
they coincide with those of the Labor Arbiter. Such factual findings are given more weight when the same
are affirmed by the Court of Appeals. The Court finds no reason to depart from the foregoing rule.

LABOR LAW: separation pay

Article 279 of the Labor Code of the Philippines mandates the reinstatement of an illegally dismissed
employee, to wit:

Security of Tenure. - An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full back wages, inclusive of allowances, and
to his other benefits or their monetary equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement.

Thus, reinstatement is the general rule, while the award of separation pay is the exception. The
circumstances warranting the grant of separation pay, in lieu of reinstatement, are laid down by the Court
in Globe-Mackay Cable and Radio Corporation v. National Labor Relations Commission, thus:

Over time, the following reasons have been advanced by the Court for denying reinstatement under the
facts of the case and the law applicable thereto; that reinstatement can no longer be effected in view of
the long passage of time (22 years of litigation) or because of the realities of the situation; or that it would
be inimical to the employers interest; or that reinstatement may no longer be feasible; or, that it will not
serve the best interests of the parties involved; or that the company would be prejudiced by the workers
continued employment; or that it will not serve any prudent purpose as when supervening facts have
transpired which make execution on that score unjust or inequitable or, to an increasing extent, due to the
resultant atmosphere of antipathy and antagonism or strained relations or irretrievable estrangement
between the employer and the employee.

In this case, petitioner claims that it complied with the reinstatement order of the Labor Arbiter. On 23
January 2008, petitioner sent respondent a notice informing him of the Labor Arbiters decision to reinstate
him. Accordingly, in February 2008, respondent was assigned by petitioner to Canlubang Sugar Estate,
Inc. in Canlubang, Laguna, and to various posts thereafter. At the time of the filing of the petition,
respondent was assigned by petitioner to MD Distripark Manila, Inc. in Binian, Laguna.

Respondent admits receiving a reinstatement notice from petitioner. Thereafter, respondent was assigned
to one of petitioner's clients. However, respondent points out that he was not reinstated by petitioner
Emeritus Security and Maintenance Systems, Inc. but was employed by another company, Emme
Security and Maintenance Systems, Inc. (Emme). Thus, according to respondent, he was not reinstated
at all.

Petitioner counters that Emeritus and Emme are sister companies with the same Board of Directors and
officers, arguing that Emeritus and Emme are in effect one and the same corporation.

Considering petitioner's undisputed claim that Emeritus and Emme are one and the same, there is no
basis in respondent's allegation that he was not reinstated to his previous employment. Besides,
respondent assails the corporate personalities of Emeritus and Emme only in his Comment filed before
this Court. Further, respondent did not appeal the Labor Arbiter's reinstatement order.

Contrary to the Court of Appeals' ruling, there is nothing in the records showing any strained relations
between the parties to warrant the award of separation pay. There is neither allegation nor proof that such
animosity existed between petitioner and respondent. In fact, petitioner complied with the Labor Arbiter's
reinstatement order.

Considering that (1) petitioner reinstated respondent in compliance with the Labor Arbiter's decision, and
(2) there is no ground, particularly strained relations between the parties, to justify the grant of separation
pay, the Court of Appeals erred in ordering the payment thereof, in lieu of reinstatement.
WHEREFORE, the Court DENIES the petition and REINSTATES the 5 December 2007 Decision of
the Labor Arbiter.