Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 76219 May 27, 1991

GTE DIRECTORIES CORPORATION, petitioner,

vs.
HON. AUGUSTO S. SANCHEZ and GTE DIRECTORIES CORPORATION EMPLOYEES UNION, respondents.

Siguion Reyna, Montecillo & Ongsiako for petitioner.

Ignacio P. Lacsina for respondent Union.

NARVASA, J.:

GTE Directories Corporation (hereafter, simply GTE) is a foreign corporation engaged in the Philippines in the
business of publishing the PLDT (Philippine Long Distance Telephone Company) telephone directories for Metro
Manila and several provinces.

The record shows that initially, the practice was for its sales representatives to be given work assignments within
specific territories by the so-called "draw method." These sales territories were so plotted or mapped out as to have
"an equal number of advertisers as well as . . . revenue. . ." Within these territories, the sales representatives therein
assigned were given quotas; i.e., they had to "achieve a certain amount of revenue or advertisements sold,
decreased, increased or cancelled within a given period of time."

A territory was not fully released to the salesperson for handling at one time, but assigned in increments or partial
releases of account. Now, increments were given by the so-called "Grid System," grids (divisions or sections) within
each territory usually numbering five (i.e., Grids I to V). Each grid was assigned a fixed closing dated. At such closing
date, a salesperson should have achieved a certain amount of the revenue target designated for his grid; otherwise,
he loses the forthcoming grid or forfeits the remaining grids not yet received. The Grid System was installed for the
following reasons: (1) to give all salespersons an opportunity to contact advertisers within a reasonable period; (2) to
assure GTE that it will get its share of advertising budget from clients as early as possible; and (3) to ensure an even
flow of work throughout the company.

This practice was observed from 1980 until sometime in June, 1984 when GTE realized that competition among
media for a share of the advertising revenue had become so keen as to require quick reaction. GTE therefore
launched an aggressive campaign to get what it considered to be its rightful share of the advertising budget of its
clientele before it could be allocated to other media (newspaper, television, radio, etc.) It adopted a new strategy by
which:

(1) all its sales representatives were required, as in the past, to achieve specified revenue targets
(advertisements sold) within pre-determined periods;

(2) in cases of cancelled revenue accounts or advertisements, it required all its salespersons to re-establish
contact and renew the same within a fixed period;

(3) if the cancelled revenue accounts were not renewed within the assigned period, said accounts were
declared, for a set period, OPEN TERRITORY to all sales representatives including the one who reported
the cancellation;

(4) if not renewed during said open territory period, said cancelled accounts were deemed no longer "open
territory," and the same could be referred for handling to contractual salespersons and/or outside agencies.

A new "Sales Evaluation and Production Policy" was thereafter drawn up. GTE informed all its sales representatives
of the new policy in a Memorandum dated October 12, 1984. The new policy was regarded as an improvement over
the previous Sales Production Policy, which solely considered quota attainment and handling in the Sales Report for
the purpose of evaluating performance.

It appears that the new policy did not sit well with the union. It demanded that it be given 15 days "to raise questions
or objections to or to seek reconsideration of the sales and administrative practices issued by the Company on June
14, 1984." This, GTE granted, and by letter dated October 26, 1984, the union submitted its proposals for "revisions,
corrections and deletions of some policies incorporated in the Sales Administrative Practices issued on June 14,
1984 including the new policies recently promulgated by Management."

GTE next formulated a new set of "Sales Administrative Practices," pursuant to which it issued on July 9, 1985, a
memorandum requiring all Premise Sales Representatives (PSRs) to submit individual reports reflecting target
revenues as of deadlines, set at August 2, 1985. This was superseded by another memorandum dated July 16, 1985,
revising the previous schedules on the basis of "the consensus reached after several discussions with your DSMs, as
well as, most of you," and pointing out that "the amount required on the 1st deadline (P30,000) . . . has been reduced
further (to P20,000) having taken into consideration that most of your accounts you have already on hand are with
your respective "prep artists""

On August 5, 1985, GTE's Sales Manager sent another Memorandum to "all premise sales personnel." That
memorandum observed that most of them had omitted to submit reports regarding "the target of P20,000.00 revenue
handled on . . . (the) first Grid deadline of August 2, 1985" notwithstanding that "several consultations/discussions . . .
(had) been held with your DSMs, as well as yourselves in different and separate occasions," and "these
schedules/targets were drawn up by no less than you, collectively," and notwithstanding that "this has been a practice
of several years." It closed with the expressed expectation that the sales reports would be submitted "no later than
2:00 P.M. reflecting P20,000.00 revenue handled, as per memo re: Grid Deadlines dated July 16, 1985."

But as before, the sales representatives did not submit the reports. Instead their union, GTE Directories Corporation
Employees Union (hereafter, simply the union), sent a letter to the Sales Manager dated August 5, 1985. 1 The letter
stated that in fact "only one out of nineteen sales representatives met the P20,000 revenue handled on our first grid
deadline of August 2;" that the schedule was not "drawn (up) as a result of an agreement of all concerned" since GTE
had failed to get "affirmative responses" from "clustered groups of SRs;" that the union could not "Comprehend how
cancelling non-cancelling accounts help production;" and that its members would fail "expectations of cancelling . . .
non-cancelling accounts" since it "would result to further reduction of our pay which (they) believe is the purpose of
your discriminate and whimsical memo."

The following day, on August 6, 1985, the union filed in behalf of the sales representatives, a notice of strike
grounded on alleged unfair labor practices of GTE consisting of the following:

1. Refusal to bargain on unjust sales policies particularly on the failure to meet the 75% of the average sales
production for two consecutive years;

2. Open territory of accounts;

3. Illegal suspension of Brian Pineda, a union officer; and

4. Non-payment of eight days' suspension pay increase.

In due course, the Bureau of Labor Relations undertook to conciliate the dispute.

On the same day, August 6, 1985, GTE sent still another memorandum to sixteen (16) of its premise sales
representatives, this time through its Director for Marketing & Sales, requiring submission of "individual reports
reflecting target revenues as of grid deadlines . . . not later than 4:00 P.M. . . ."2 No compliance was made. GTE
thereupon suspended its sales representatives "without pay effective August 12, 1985 for five (5) working days" and
warned them that their failure to submit the requisite reports by August 19, 1985 would merit "more drastic
disciplinary actions." Still, no sales representative complied with the requirement to submit the reports ("list of
accounts to be cancelled"). So, by memorandum of the Marketing Director dated August 19, 1985, all the sales
representatives concerned were suspended anew "effective August 20, 1985 until you submit the . . . (report)."

Finally, GTE gave its sales representatives an ultimatum. By memorandum dated August 23, 1985, individually
addressed to its sales representatives, GTE required them, for the last time, to submit the required reports ("list of
accounts to be cancelled") within twenty-four (24) hours from receipt of the memorandum; otherwise, they would be
terminated "for cause." Again not one sales representatives submitted a report. Instead, on August 29, 1985, the
Union President sent an undated letter to GTE (addressed to its Director for Marketing & Sales) acknowledging
receipt of the notice of their suspension on August 19, 1985 in view of their "continued refusal to submit the list of
accounts to be cancelled," professing surprise at being "served with a contradictory notice, giving us this time 24
hours to submit the required list, without the suspension letter, which we consider as still in force, being first recalled
or withdrawn," asking that they be informed which of the two directives should be followed, and reserving their "right
to take such action against you personally for your acts of harassment and intimidation which are clearly designed to
discourage our legitimate union activities in protesting management's continious (sic) unfair labor practices."
Consequently, by separate letters dated August 29, 1985 individually received, GTE terminated the employment of
the recalcitrant sales representatives, numbering fourteen, with the undertaking to give them "separation pay, upon
proper clearance and submission of company documents, material etc., in . . . (their) possession." Among those
dismissed were the union's president and third vice president, and several members of its board of directors. On
September 2, 1985, the union declared a strike in which about 60 employees participated.

During all this time, conciliation efforts were being exerted by the Bureau of Labor Relations, including attempts to
prevent the imposition of sanctions by GTE on its employees, and the strike itself. When these proved futile, Acting
Labor Minister Vicente Leogardo, Jr. issued an Order dated December 6, 1985 assuming jurisdiction over the
dispute. The order made the following disposition, to wit:

WHEREFORE, this Office hereby assumes jurisdiction over the labor dispute at G.T.E. Directories, pursuant
to Article 264 (g) of the Labor Code of the Philippines, as amended. Accordingly, all striking workers
including those who were dismissed during the conciliation proceedings, except those who have already
resigned, are hereby directed to return to work and the management of G.T.E. Directories to accept all
returning employees under the same terms and conditions prevailing previous to the strike notice and
without prejudice to the determination of the obligation and rights of the parties or to the final outcome of this
dispute. The Bureau of Labor Relations is hereby directed to hear the dispute and submit its
recommendations within 15 days upon submission of the case for resolution.

All concerned including the military and police authorities are hereby requested to assist in the
implementation of this Order."

The Acting Secretary opined that the dispute "adversely affects the national interest," because:

1) GTE, a "100% foreign owned" company, had, as publisher of "PLDT's Metro Manila and provincial directories . . .
earned a total of P127,038,463 contributing close to P10 million in income tax alone to the Philippine government,"
and that "major contribution to the national economy . . . (was) being threatened because of the strike;" and

2) "top officers of the union were dismissed during the conciliation process thereby compounding the dispute,"

Reconsideration of this Order was sought by GTE by motion filed on December 16, 1985, on the ground that—

1) "the basis for assumption of jurisdiction is belied by the facts and records of the case and hence,
unwarranted;"

2) "national interest is not adversely affected to warrant assumption of jurisdiction by (the) Office of the
Minister of Labor and Employment;" and

3) "assumption of jurisdiction by the . . . Minister . . . without prior consultation with the parties violates the
company's right to due process of law."

GTE however reiterated its previously declared "position that with or without the order now being questioned, it will
accept all striking employees back to work except the fourteen (14) premise sales representatives who were
dismissed for cause prior to the strike."

By Resolution of then Labor Minister Blas Ople dated January 20, 1986, GTE's motion for reconsideration was
denied. The order noted inter alia that GTE had "accepted back to work all the returning workers except fourteen (14)
whom it previously dismissed insisting that they were legally dismissed for violation of company rules and, therefore,
are not included and may not be reinstated on the basis of a return-to-work order," and that "they were dismissed for
their alleged failure to comply with the reportorial requirement under the Sales and Administrative Practices in effect
since 1981 but which for the present is the subject of negotiations between the parties." The Order then —

1) adverted to the "general rule (that) promulgations of company policies and regulations are basic management
prerogatives although the principle of collective bargaining encompasses almost all relations between the employer
and its employees which are best threshed out through negotiations, . . . (and that) it is recognized that company
policies and regulations are, unless shown to be grossly oppressive or contrary to law, generally binding and valid on
the parties until finally revised or amended unilaterally or preferably through negotiations or by competent authorities;"

2) affirmed the "recognized principle of law that company policies and regulations are, unless shown to be grossly
oppressive or contrary to law, generally binding (and) valid on the parties and must be complied with until finally
revised or amended unilaterally or preferably through negotiations or by competent authorities;" and
3) closed by pointing out that "as a basic principle, the matter of the acceptability of company policies and rules is a
proper subject of collective negotiations between the parties or arbitration if necessary."

In a clarificatory Order dated January 21, 1986, Minister Ople reiterated the proposition that "promulgations of
company policies and regulations are basic management prerogatives," and that "unless shown to be grossly
oppressive or contrary to law," they are "generally binding and valid on the parties and must be complied with until
finally revised or amended unilaterally or preferably, through negotiations or by competent authorities."

Adjudication of the dispute on the merits was made on March 31, 1986 by Order of Minister Ople's successor,
Augusto Sanchez. The Order —

1) pointed out "that the issue central to the labor dispute revolves around compliance with existing company policies,
rules and regulations specifically the sales evaluation and production policy which was amended by the October 12,
1984 memorandum and the grid schedule;"

2) declared that because fourteen (14) sales representatives — who after reinstatement pursuant to the order of
January 20, 1986 had been placed "on forced leave with pay —"were actually dismissed for failure to comply with the
reporting requirements under the "Sales Administration Practices" which was (sic) then the subject of negotiations
between the parties at the Bureau of Labor Relations," it was only fair that they 'be reinstated . . .with back wages
since they were terminated from employment based on a policy . . . still being negotiated to avoid precisely a labor-
management dispute from arising" therefrom;"

3) pronounced the union's action relative to the allegedly illegal dismissal of one Brian Pineda to be "barred by
extinctive prescription" in accordance with the CBA then in force; and

4) on the foregoing premises adjudicated the dispute as follows:

1. The union and management of G.T.E. Directories Corporation are directed to negotiate and effect a
voluntary settlement on the questioned Grid schedule, the Sales Evaluation and Production Policy;

2. Management is ordered to reinstate the fourteen (14) employees with full back wages from the time they
were dismissed up to the time that they were on forced leave with pay."

Both the Union and GTE moved for reconsideration of the Order.

The Union contended that:

1) GTE should have been adjudged guilty of unfair labor practice and other unlawful acts;

2) its strike should have been declared lawful;

3) GTE's so-called "bottom-third" policy, as well as all sales and administrative practices related thereto, should have
been held illegal; and

4) GTE should have been commanded: (a) to pay all striking employees their usual salaries, allowances, commission
and other emoluments corresponding to the period of their strike; (b) to release to its employees the 8-days pay
increase unlawfully withheld from them; (c) to lift the suspension imposed on Brian Pineda and restore to him the pay
withheld corresponding to the suspension period; (d) to pay the sales representatives all their lost income
corresponding to the period of their suspensions, and dismissal, including commissions that they might have earned
corresponding to their one-week forced leave.

GTE for its part, argued that the termination of the employment of its fourteen (14) premise sales representatives
prior to the strike should have been upheld. It also filed an opposition to the union's motion for reconsideration.

The motions were resolved in a "Decision" handed down by Minister Sanchez on June 6, 1986. The Minister stated
that he saw no need to change his rulings as regards Pineda's suspension, the question on GTE's sales and
administrative policies, and the matter of back wages. However, as regards "the other issues raised by the union," the
Minister agreed "with the company that these were not adequately threshed out in the earlier proceedings . . . (for)
(w)hile it is true that the union had already presented evidence to support its contention, the company should be
given the opportunity to present its own evidence." Accordingly, he directed the Bureau of Labor Relations to hear
said "other issues raised by the union and to submit its findings and recommendations thereon within 20 days from
submission of the case for decision."
Again GTE moved for reconsideration; again it was rebuffed. The Labor Minister denied its motion by Order dated
October 1, 1986. In that order, the Minister, among other things—

1) invoked Section 6, Rule XIII of the Rules and Regulations Implementing the Labor Code, pertinently reading as
follows:

During the proceedings, the parties shall not do any act which may disrupt or impede the early settlement of
the dispute. They are obliged, as part of their duty to bargain collectively in good faith, to participate fully and
promptly in the conciliation proceedings called by the Bureau or the Regional Office.

and pointed out that "in dismissing 14 salesmen . . . for alleged violations of the reportorial requirements of its sales
policies which was then the subject of conciliation proceedings between them, (GTE) acted evidently in bad faith;
hence the status quo prior to their dismissal must be restored . . . (and) their reinstatement with backwages is in order
up to the time they were on forced leave. . . ;"

2) declared that because he had "ordered the parties to negotiate and effect a voluntary settlement of the questioned
Grid Schedule, the Sales Evaluation and Productions Policy, it would be unripe and premature for us to rule on the
legality or illegality on the company's sales policies at this instance;"

3) opted, however, to himself resolve "the so-called 'other issues"' which he had earlier directed the Bureau of Labor
Relations to first hear and resolve (in the Decision of June 6, 1986, supra), i.e., GTE's liability for unfair labor practice,
the legality of the strike and the strikers' right to be paid their wages while on strike, his ruling thereon being as
follows:

While the company, in merely implementing its challenged sales policies did not ipso facto commit an unfair
labor practice, it did so when it in mala fide dismissed the fourteen salesmen, all union members, while
conciliation proceedings were being conducted on disputes on its very same policies, especially at that time
when a strike notice was filed on the complaint of the union alleging that said sales policies are being used
to bust the union; thus precipitating a lawful strike on the part of the latter. A strike is legal if it was provoked
by the employer's failure to abide by the terms and conditions of its collective bargaining agreement with the
union, by the discrimination employed by it with regard to the hire and tenure of employment, and the
dismissal of employees due to union activities as well as the company's refusal to bargain collectively in
good faith (Cromwell Commercial Co., Inc. vs. Cromwell Employees and Laborers Union, 19 SCRA 398).
The same rule applies if employer was guilty of bad faith delay in reinstating them to their position (RCPI vs.
Phil. Communications Electronics & Electricity Workers Federation, 58 SCRA 762).

While as a rule strikers are not entitled to backpay for the strike period (J.P. Heilbronn Co. vs. NLU, 92 Phil.
575) strikers may be properly awarded backwages where the strike was precipitated by union busting
activities of the employer (Davao Free Workers, Front, et al. vs, CIR, 60 SCRA 408), as in the case at bar. . .
.

The Minister accordingly annulled and set aside his order for the Bureau of Labor Relations to conduct hearings on
said issues since he had already resolved them, and affirmed his Order of March 31, 1986—"directing Union and
Management to negotiate a voluntary settlement on the company sales policies and reinstating the fourteen
employees with full backwages from the time they were dismissed up to the time they were on forced leave with pay"
— "but with the modification that management . . . (was) directed to give the striking workers strike duration pay for
the whole period of the strike less earnings."

GTE thereupon instituted the special civil action of certiorari at bar praying for invalidation, because rendered with
grave abuse of discretion, of the Labor Minister's orders—

1) commanding "reinstatement of the fourteen dismissed employees, and

2) "finding . . . (it) guilty of unfair labor practice and directing (it) to pay strike duration pay to striking workers."

It seems to the Court that upon the undisputed facts on record, GTE had cause to dismiss the fourteen (14) premise
sales representatives who had repeatedly and deliberately, not to say defiantly, refused to comply with its directive for
submission of individual reports on specified matters. The record shows that GTE addressed no less than (six) written
official communications to said premise sales representatives embodying this requirement, to wit:

1) Memorandum of July 9, 1985 pursuant to GTE's "Sales Administrative Practices" — superseded by a

memorandum dated July 16, 198 — requiring submission of individual reports by August 2, 1985;
2) Memorandum of August 5, 1985, requiring submission of the reports by 2:00 P.M.;

3) Memorandum of August 6, 1985, for submission of requisite reports not later than 4:00 P.M. of that day, with a
warning of "appropriate disciplinary action;"

4) Letter of August 9, 1985 imposing suspension without pay for five (5) working days and extending the period for
submission of reports to August 19, 1985;

5) Letter of August 19, 1985 suspending the sales representatives until their submission of the required reports;

6) Letter dated August 28, 1985 giving the sales representatives "a last chance to comply with . . . (the) directive
within 24 hours from receipt . . .;" with warning that failure to comply would result in termination of employment.

The only response of the sales representatives to these formal directives were:

1) a letter by their Union to GTE's Sales Manager dated August 5, 1985 in which the requirement was criticized as not
being the "result of an agreement of all concerned," and as incomprehensible, "discriminate and whimsical;"

2) a strike notice filed with the Ministry of Labor on August 6, 1985; and

3) an undated letter sent to GTE's Director for Marketing & Sales on August 29, 1985, drawing attention to what it
deemed contradictory directives, and reserving the right to take action against the manager for "acts of harassment
and intimidation . . . clearly designed to discourage our legitimate union activities in protesting management's
continuous unfair labor practices."

The basic question then is whether or not the effectivity of an employer's regulations and policies is dependent upon
the acceptance and consent of the employees thereby sought to be bound; or otherwise stated, whether or not the
union's objections to, or request for reconsideration of those regulations or policies automatically suspend
enforcement thereof and excuse the employees' refusal to comply with the same.

This Court has already had occasion to rule upon a similar issue. The issue was raised in a 1989 case, G.R. No.
53515, San Miguel Brewery Sales Force Union (PTGWO) v. Ople.3 In that case, the facts were briefly as follows:

In September 1979, the company introduced a marketing scheme known as the "Complementary distribution
system" (CDS) whereby its beer products were offered for sale directly to wholesalers through San Miguel's
sales offices.

The labor union (herein petitioner) filed a complaint for unfair labor practice in the Ministry of Labor, with a
notice of strike on the ground that the CDS was contrary to the existing marketing scheme whereby the
Route Salesmen were assigned specific territories within which to sell their stocks of beer, and wholesalers
had to buy beer products from them, not from the company. It was alleged that the new marketing scheme
violates . . . (a provision) of the collective bargaining agreement because the introduction of the CDS would
reduce the take-home pay of the salesmen and their truck helpers for the company would be unfairly
competing with them."

The Labor Minister found nothing to suggest that the employer's unilateral action of inaugurating a new sales scheme
"was designed to discourage union organization or diminish its influence;" that on the contrary, it was "part of its
overall plan to improve efficiency and economy and at the same time gain profit to the highest;" that the union's
"conjecture that the new plan will sow dissatisfaction from its rank is already a prejudgment of the plan's viability and
effectiveness, . . . like saying that the plan will not work out to the workers' (benefit) and therefore management must
adopt a new system of marketing." The Minister accordingly dismissed the strike notice, although he ordered a slight
revision of the CDS which the employer evidently found acceptable.

This Court approved of the Minister's findings, and declared correct his holding that the CDS was "a valid exercise of
management prerogatives,"4 viz.:

Except as limited by special laws, an employer is free to regulate, according to his own discretion and
judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and
manner of work, tools to be used, processes to be followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of work. . .
. (NLU vs. Insular La Yebana Co., 2 SCRA 924; Republic Savings Bank vs. CIR, 21 SCRA 226, 235.)
(Perfecto V. Hernandez, Labor Relations Law, 1985 ed., p. 44.) (Emphasis ours.)
The Court then closed its decision with the following pronouncements: 5

Every business enterprise endeavors to increase its profits. In the process, it may adopt or devise means
designed towards that goal. In Abbott Laboratories vs. NLRC, 154 SCRA 713, We ruled:

. . . Even as the law is solicitous of the welfare of the employees, it must also protect the right of an
employer to exercise what are clearly management prerogatives. The free will of management to
conduct its own business affairs to achieve its purpose cannot be denied.

So long as a company's management prerogatives are exercised in good faith for the advancement of the
employer's interest and not for the purpose of defeating or circumventing the rights of the employees under
special laws or under valid agreements, this Court will uphold them (LVN, Pictures Workers vs. LVN, 35
SCRA 147; Phil. American Embroideries vs. Embroidery and Garments Workers, 26 SCRA 634; Phil.
Refining Co. vs. Garcia, 18 SCRA 110). . . .

In the case at bar, it must thus be conceded that its adoption of a new "Sales Evaluation and Production Policy" was
within its management prerogative to regulate, according to its own discretion and judgment, all aspects of
employment, including the manner, procedure and processes by which particular work activities should be done.
There were, to be sure, objections presented by the union, i.e., that the schedule had not been "drawn (up) as a
result of an agreement of all concerned," that the new policy was incomprehensible, discriminatory and whimsical,
and "would result to further reduction" of the sales representatives' compensation. There was, too, the union's
accusation that GTE had committed unfair labor practices, such as—

1. Refusal to bargain on unjust sales policies particularly on the failure to meet the 75% of the average sales
production for two consecutive years;

2. Open territory of accounts;

3. Illegal suspension of Brian Pineda, a union officer; and

4. Non-payment of eight days' suspension pay increase.

This Court fails to see, however, how these objections and accusations justify the deliberate and obdurate refusal of
the sales representatives to obey the management's simple requirement for submission by all Premise Sales
Representatives (PSRs) of individual reports or memoranda requiring reflecting target revenues—which is all that
GTE basically required — and which it addressed to the employees concerned no less than six (6) times. The Court
fails to see how the existence of objections made by the union justify the studied disregard, or wilful disobedience by
the sales representatives of direct orders of their superior officers to submit reports. Surely, compliance with their
superiors' directives could not have foreclosed their demands for the revocation or revision of the new sales policies
or rules; there was nothing to prevent them from submitting the requisite reports with the reservation to seek such
revocation or revision.

To sanction disregard or disobedience by employees of a rule or order laid down by management, on the pleaded
theory that the rule or order is unreasonable, illegal, or otherwise irregular for one reason or another, would be
disastrous to the discipline and order that it is in the interest of both the employer and his employees to preserve and
maintain in the working establishment and without which no meaningful operation and progress is possible.
Deliberate disregard or disobedience of rules, defiance of management authority cannot be countenanced. This is not
to say that the employees have no remedy against rules or orders they regard as unjust or illegal. They may object
thereto, ask to negotiate thereon, bring proceedings for redress against the employer before the Ministry of Labor.
But until and Unless the rules or orders are declared to be illegal or improper by competent authority, the employees
ignore or disobey them at their peril. It is impermissible to reverse the process: suspend enforcement of the orders or
rules until their legality or propriety shall have been subject of negotiation, conciliation, or arbitration.

These propositions were in fact adverted to in relation to the dispute in question by then Minister Blas Ople in his
Order dated January 21, 1986, to the effect among others, that "promulgations of company policies and regulations
are basic management prerogatives" and that it is a "recognized principle of law that company policies and
regulations are, unless shown to be grossly oppressive or contrary to law, generally binding (and) valid on the parties
and must be complied with until finally revised or amended unilaterally or preferably through negotiations or by
competent authorities."

Minister Sanchez however found GTE to have "acted evidently in bad faith" in firing its 14 salespersons "for alleged
violations of the reportorial requirements of its sales policies which was then the subject of conciliation proceedings
between them;"6 and that "(w)hile the company, in merely implementing its challenged sales policies did not ipso
facto commit an unfair labor practice, it did so when it in mala fide dismissed the fourteen salesmen, all union
members, while conciliation proceedings were being conducted on disputes on its very same policies, especially at
that time when a strike notice was filed on the complaint of the union alleging that said sales policies are being used
to bust the union; thus precipitating a lawful strike on the part of the latter." No other facts appear on record relevant
to the issue of GTE's dismissal of the 14 sales representatives. There is no proof on record to demonstrate any
underhanded motive on the part of GTE in formulating and imposing the sales policies in question, or requiring the
submission of reports in line therewith. What, in fine, appears to be the Minister's thesis is that an employer has the
prerogative to lay down basic policies and rules applicable to its employees, but may not exact compliance therewith,
much less impose sanctions on employees shown to have violated them, the moment the propriety or feasibility of
those policies and rules, or their motivation, is challenged by the employees and the latter file a strike notice with the
Labor Department — which is the situation in the case at bar.

When the strike notice was filed by the union, the chain of events which culminated in the termination of the 14 sales
persons' employment was already taking place, the series of defiant refusals by said sales representatives to comply
with GTE's requirement to submit individual reports was already in progress. At that time, no less than three (3) of the
ultimate six (6) direct orders of the employer for the submission of the reports had already been disobeyed. The filing
of the strike notice, and the commencement of conciliation activities by the Bureau of Labor Relations did not operate
to make GTE's orders illegal or unenforceable so as to excuse continued non-compliance therewith. It does not follow
that just because the employees or their union are unable to realize or appreciate the desirability of their employers'
policies or rules, the latter were laid down to oppress the former and subvert legitimate union activities. Indeed, the
overt, direct, deliberate and continued defiance and disregard by the employees of the authority of their employer left
the latter with no alternative except to impose sanctions. The sanction of suspension having proved futile, termination
of employment was the only option left to the employer.

To repeat, it would be dangerous doctrine indeed to allow employees to refuse to comply with rules and regulations,
policies and procedures laid down by their employer by the simple expedient of formally challenging their
reasonableness or the motives which inspired them, or filing a strike notice with the Department of Labor and
Employment, or, what amounts to the same thing, to give the employees the power to suspend compliance with
company rules or policies by requesting that they be first subject of collective bargaining, It would be well nigh
impossible under these circumstances for any employer to maintain discipline in its establishment. This is, of course,
intolerable. For common sense teaches, as Mr. Justice Gregorio Perfecto once had occasion to stress 7 that:

Success of industries and public services is the foundation upon which just wages may be paid. There
cannot be success without efficiency. There cannot be efficiency without discipline. Consequently, when
employees and laborers violate the rules of discipline they jeopardize not only the interest of the employer
but also their own. In violating the rules of discipline they aim at killing the hen that lays the golden eggs.
Laborers who trample down the rules set for an efficient service are, in effect, parties to a conspiracy, not
only against capital but also against labor. The high interest of society and of the individuals demand that we
should require everybody to do his duty. That demand is addressed not only to employer but also to
employees.

Minister Sanchez decided the dispute in the exercise of the jurisdiction assumed by his predecessor in accordance
with Article 263 (g) of the Labor Code,8 providing in part as follows:

(g) When in his opinion there exists a labor dispute causing or likely to cause strikes or lockouts adversely
affecting the national interest, such as may occur in but not limited to public utilities, companies engaged in
the generation or distribution of energy, banks, hospitals, and export-oriented industries, including those
within export processing zones, the Minister of Labor and Employment shall assume jurisdiction over the
dispute and decide it or certify the same to the Commission for compulsory arbitration. . . .

Even that assumption of jurisdiction is open to question.

The production and publication of telephone directories, which is the principal activity of GTE, can scarcely be
described as an industry affecting the national interest. GTE is a publishing firm chiefly dependent on the marketing
and sale of advertising space for its not inconsiderable revenues. Its services, while of value, cannot be deemed to be
in the same category of such essential activities as "the generation or distribution of energy" or those undertaken by
"banks, hospitals, and export-oriented industries." It cannot be regarded as playing as vital a role in communication
as other mass media. The small number of employees involved in the dispute, the employer's payment of "P10
million in income tax alone to the Philippine government," and the fact that the "top officers of the union were
dismissed during the conciliation process," obviously do not suffice to make the dispute in the case at bar one
"adversely affecting the national interest."

WHEREFORE, the petition is GRANTED, and as prayed for, the Order dated October 1, 1986 of the public
respondent is NULLIFIED and SET ASIDE.
SO ORDERED.

Gancayco, Griño-Aquino and Medialdea, JJ., concur.

SECOND DIVISION

[G.R. No. 171189, March 09 : 2011]

LORES REALTY ENTERPRISES, INC., LORENZO Y. SUMULONG III, PETITIONERS, VS. VIRGINIA E. PACIA,
RESPONDENT.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioners Lores Realty
Enterprises, Inc. (LREI) and Lorenzo Y. Sumulong III (Sumulong) seeking to reverse and set aside the November 25,
2005 Decision[1] of the Court of Appeals (CA), in CA-G.R. SP No. 59975, which affirmed the Decision[2] of the
National Labor Relations Commission (NLRC), in NLRC NCR CA No. 019221-99 (RAB-IV-10-10492-98-RI).

The Facts

In 1982, respondent Virginia E. Pacia (Pacia) was hired by LREI. At the time of her dismissal, she was the assistant
manager and officer-in-charge of LREI's Accounting Department under the Finance Administrative Division.

On October 28, 1998, LREI's acting general manager, petitioner Sumulong, through Ms. Julie Ontal, directed Pacia to
prepare Check Voucher No. 16477 worth P150,000.00 as partial payment for LREI's outstanding obligation to the
Bank of the Philippine Islands-Family Bank (BPI-FB). Pacia did not immediately comply with the instruction. After two
repeated directives, Pacia eventually prepared Check No. 0000737526 in the amount of P150,000.00. Later,
Sumulong again directed Pacia to prepare Check Voucher No. 16478 in the amount of P175,000.00 to settle the
balance of LREI's outstanding indebtedness with BPI-FB. Pacia once again was slow in obeying the order. Due to
the insistence of Sumulong, however, Pacia eventually prepared Check No. 0000737527 in the amount of
P175,000.00.

To explain her refusal to immediately follow the directive, Pacia reasoned out that the funds in LREI's account were
not sufficient to cover the amounts to be indicated in the checks.

The next day, October 29, 1998, Sumulong issued a memorandum [3] ordering Pacia to explain in writing why she
refused to follow a clear and lawful directive.

On the same day, Pacia replied in writing and explained that her initial refusal to prepare the checks was due to the
unavailability of funds to cover the amounts and that she only wanted to protect LREI from liability under the
Bouncing Checks Law.[4]

On November 6, 1998, Pacia received a notice of termination[5] stating, among others, that she was being dismissed
because of her willful disobedience and their loss of trust and confidence in her.

Pacia then filed a Complaint for Unfair Labor Practice due to Harassment, Constructive Dismissal, Moral and
Exemplary Damages[6] against LREI and Sumulong. Subsequently, Pacia filed an Amended Complaint [7] to include
the charges of illegal dismissal and non-payment of salaries.

On March 11, 1999, the Labor Arbiter (LA) rendered a decision[8] finding that the dismissal of Pacia was for a just and
valid cause but ordering payment of what was due her. The dispositive portion of the decision reads:

WHEREFORE, premises considered, judgment is hereby rendered, as follows:

1. Ordering respondent corporation to pay complainant her:

a. unpaid salary P12,550.00

b. proportionate 13th month pay 20,916.66
Total P33,466.66
 2. Dismissing the complaint for constructive/illegal dismissal, unfair labor practice, and claim for
payment of damages and attorney's fees for lack of merit.

SO ORDERED.

On appeal, the NLRC in its March 31, 2000 Decision[9] reversed the LA's Decision and found LREI and
Sumulong guilty of illegal dismissal. Pertinent portions of the NLRC decision including the decretal portion read:

A careful perusal of the records reveal[s] that complainant's actuation herein cannot in any manner be construed as
an act of insubordination. Neither can we classify it as an example of wilful disobedience by the employee of the
lawful order of her employer in connection with her work.

Records show that Check No. 0000737527 in the amount of P175,000.000 bounced as shown by the Return Checks
Advice issued by the BPI family Bank on 3 November 1998.

xxx xxx xxx

The above evidence clearly reveal[s] that there were no sufficient funds to cover the check which the acting Manager
directed complainant to prepare. However, complainant nevertheless prepared Check Nos. 737527 and 737526 on
28 October 1998 and also corrected Check Vouchers Nos. 16477 and 16478 on 28 October 1998.

We take note and give due merit to complainant's explanation in her reluctance to issue checks against insufficient
funds which was to protect the company and its signatories from liabilities resulting from issuance of bounced checks.
Complainant's initial refusal was good intentioned. Respondents also insist that complainant refused to follow a lawful
directive of her superior officer to make some corrections on the vouchers. However, we cannot see how an order to
prepare a check at the time when there was no sufficient fund to cover the same can be classified as a lawful
directive of the acting Manager.

xxx xxx xxx

Considering that complainant was illegally dismissed, the law provides that her reinstatement with payment of full
backwages would be in order. However, mindful of the animosity and strained relations between parties emanating
from this litigation we declare that in lieu of reinstatement, separation pay may be given to complainant, at the rate of
one (1) month pay for every year of service.

WHEREFORE, the Decision dated 11 March 1999 is MODIFIED. Respondent Lores Realty Ent., Inc. is held liable for
illegally dismissing complainant and is directed to pay her, in addition to her unpaid salary and proportionate
13th month pay for the year 1998, the following:

1. Backwages

(6 November 1998 to 15 March 2000)

Basic Pay P25,100.00 x 16.3 mos. = P409,130.00
13th Month Pay P409,130.00 / 12 = 34,094.17
P443,224.17

2. Separation Pay (one month for every year of service)

(18 years)
P25,100 x 18 = P451,800.00
P895,024.17
vvvvvvvvvv

The other findings are AFFIRMED.

SO ORDERED.[10]

Dissatisfied, LREI and Sumulong elevated the case to the CA by way of a petition for certiorari under Rule 65 of the
Rules of Court asserting grave abuse of discretion on the part of the NLRC in reversing the LA's finding that Pacia
was guilty of wilful disobedience of a lawful order of her employer in connection with her work.

On November 25, 2005, the CA found no merit in the petition and dismissed it. [11] Thus:

WHEREFORE, the petition is DISMISSED. Public respondent's Decision dated 31 March 2000 and the Resolution
dated 15 May 2000 in NLRC-RAB IV-10-10492-98-RI, CA NO. 019221-99, are AFFIRMED.

SO ORDERED.
The CA held that LREI and Sumulong failed to establish with substantial evidence that the dismissal of Pacia was for
a just cause. It found that Pacia's initial reluctance to obey the orders of her superiors was for a good reason - to
shield the company from liability in the event that the checks would be dishonored for insufficiency of funds.

Hence, the petition.

THE ISSUES

1. WHETHER OR NOT THE INSTANT PETITION FOR REVIEW RAISES QUESTIONS OF LAW.

2. WHETHER OR NOT THE COURT OF APPEALS ERRED IN AFFIRMING THE RULING OF THE
NLRC THAT THE ESTABLISHED FACTS JUSTIFY RESPONDENT'S TERMINATION FROM
EMPLOYMENT.

3. WHETHER OR NOT THE AWARD OF BACKWAGES MUST BE COMPUTED FROM THE TIME
OF DISMISSAL UNTIL FINALITY OF THE DECISION ESTABLISHING HER ILLEGAL
DISMISSAL.[12]

In essence, the main issue to be resolved is whether Pacia's dismissal was justified under the circumstances.

The Court finds no merit in the petition.

At the outset, it must be emphasized that the issues raised in this petition are questions of fact which are not proper
subjects of an appeal by certiorari. Well-settled is the rule that under Rule 45 of the Rules of Court, only questions of
law may be raised before this Court.[13] A disharmony between the factual findings of the LA and the NLRC, however,
opens the door to a review by this Court.Factual findings of administrative agencies are not infallible and will be set
aside when they fail the test of arbitrariness. Moreover, when the findings of the NLRC contradict those of the LA, this
Court, in the exercise of its equity jurisdiction, may look into the records of the case and re-examine the questioned
findings.[14]

LREI and Sumulong argue that Pacia's refusal to obey the directives of Sumulong was a "manifest intent not to
perform the function she was engaged to discharge." [15] They are of the position that Pacia's claim of "good
intentions" in refusing to prepare the checks was a mere afterthought. They stress that the instruction to prepare a
check despite the absence of sufficient funds to cover the same was, nevertheless, a lawful order.

On the other hand, Pacia counters that her initial reluctance to prepare the checks, which she knew were not
sufficiently funded, cannot "be characterized as `wrongful or perverse attitude.'" [16] In her view, the directive to
prepare the checks at the time it was not sufficiently funded was not a lawful order contemplated in Article 282 of the
Labor Code. It was an unlawful directive because it asked for the preparation of a check despite the fact that the
account had no sufficient funds to cover the same. She further explained that she did not comply with the directive in
order to protect Sumulong and LREI from any liability in the event that the checks would be dishonored upon
presentment for payment for insufficiency of funds.

Article 282 of the Labor Code enumerates the just causes for which an employer may terminate theservices of an
employee, to wit:

ARTICLE 282.Termination by employer. - An employer may terminate an employment for any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;

(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. [Emphasis supplied]

The offense of willful disobedience requires the concurrence of two (2) requisites: (1) the employee's assailed
conduct must have been willful, that is characterized by a wrongful and perverse attitude; and (2) the order violated
must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been
engaged to discharge.[17]

Let it be noted at this point that the Court finds nothing unlawful in the directive of Sumulong to prepare checks in
payment of LREI's obligations. The availability or unavailability of sufficient funds to cover the check is immaterial in
the physical preparation of the checks.

Pacia's initial reluctance to prepare the checks, however, which was seemingly an act of disrespect and defiance,
was for honest and well intentioned reasons. Protecting LREI and Sumulong from liability under the Bouncing Checks
Law[18] was foremost in her mind. It was not wrongful or willful. Neither can it be considered an obstinate defiance of
company authority. The Court takes into consideration that Pacia, despite her initial reluctance, eventually did
prepare the checks on the same day she was tasked to do it.

The Court also finds it difficult to subscribe to LREI and Sumulongs's contention that the reason for Pacia's initial
reluctance to prepare the checks was a mere afterthought considering that "check no. 0000737527 under one of the
check vouchers she reluctantly prepared, bounced when it was deposited."[19] Pacia's apprehension was justified
when the check was dishonored. This clearly affirms her assertion that she was just being cautious and circumspect
for the company's sake. Thus, her actuation should not be construed as improper conduct.

In finding for Pacia, the Court is guided by the time-honored principle thatif doubt exists between the evidence
presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. The rule in
controversies between a laborer and his master distinctly states that doubts reasonably arising from the evidence, or
in the interpretation of agreements and writing, should be resolved in the former's favor. [20]

WHEREFORE, the petition isDENIED.

SO ORDERED.

[G.R. NO. 171023 : December 18, 2009]

ARSENIO S. QUIAMBAO, Petitioner, v. MANILA ELECTRIC COMPANY, Respondent.

DECISION

DEL CASTILLO, J.:

The liberality of the law can never be extended to the unworthy and undeserving. In several instances, the policy of
social justice has compelled this Court to accord financial assistance in the form of separation pay to a legally
terminated employee. This liberality, however, is not without limitations. Thus, when the manner and circumstances
by which the employee committed the act constituting the ground for his dismissal show his perversity or depravity,
no sympathy or mercy of the law can be invoked.

This Petition for Review on Certiorari 1 assails the Decision2 dated October 28, 2005 and Resolution3dated January
12, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 85332, which reversed the February 4, 2004 Decision 4 of
the National Labor Relations Commission (NLRC) awarding petitioner Arsenio S. Quiambao separation pay in the
amount of P126,875.00.

Factual Antecedents

On July 16, 1986, petitioner was employed as branch teller by respondent Manila Electric Company. He was
assigned at respondent's Mandaluyong office and was responsible for the handling and processing of payments
made by respondent's customers.

It appears from his employment records, however, that petitioner has repeatedly violated the Company Code of
Employee Discipline and has exhibited poor performance in the latter part of his employment. Thus:
 EMPLOYEE'S PROFILE

A. INFRACTIONS -

Nature DATE ACTION TAKEN

FROM TO

1. Excessive absences 11/11/99 11/24/99 10-day suspension

2. Excessive absences 10/19/99 10/25/99 5-day suspension

3. Excessive absences 07/27/99 07/29/99 3-day suspension

4. Assaulting others with 02/17/99 02/17/99 Reprimand

bodily harm over work

matters

5. Excessive tardiness 02/08/99 02/08/99 Reprimand

6. Excessive tardiness 10/06/97 10/06/97 Reprimand

7. Simple Absence 03/11/97 03/11/97 Reprimand

8. Excessive tardiness 06/14/96 06/14/96 Reprimand

9. Excessive tardiness 09/03/92 09/03/92 Reprimand

B. PERFORMANCE RATING

His merit ratings from 1995 to 1999 are as follows:

YEAR RATING

1999 Poor

1998 Needs Improvement

1997 Needs Improvement

1996 Satisfactory

1995 Satisfactory5

On March 10, 2000, a Notice of Investigation6 was served upon petitioner for his unauthorized and unexcused
absences on November 10, 25, 26, 29, 1999; December 1, 2, 14, 15, 16, 17, 20, 21, 22, 2000; and from February 17,
2000 up to the date of such notification letter. Petitioner was likewise required to appear at the investigation and to
present his evidence in support of his defense. However, despite receipt of such notice, petitioner did not participate
in the investigation. Consequently, in a Memorandum 7 dated March 21, 2000, the legal department recommended
petitioner's dismissal from employment due to excessive, unauthorized, and unexcused absences, which constitute (i)
abandonment of work under the provisions of the Company Code of Employee Discipline (ii) and gross and habitual
neglect of duty under Article 282 of the Labor Code of the Philippines. Through a Notice of Dismissal 8dated March
28, 2000, petitioner's employment was terminated effective March 29, 2000.

Proceedings before the Labor Arbiter

On July 3, 2001, petitioner filed a complaint before the Arbitration Branch of the NLRC against respondent assailing
the legality of his dismissal. While petitioner did not dispute his absences, he nonetheless averred that the same were
incurred with the corresponding approved application for leave of absence. He also claimed that he was denied due
process.
On November 29, 2002, the Labor Arbiter rendered a Decision9 dismissing petitioner's complaint for lack of merit. The
Labor Arbiter ruled that no evidence was presented to prove that the absences of petitioner were authorized; that
petitioner was deprived of due process; and that petitioner's habitual absenteeism without leave did not violate the
company's rules and regulations which justified his termination on the ground of gross and habitual neglect of duties
under Article 282(b) of the Labor Code.

Proceedings before the NLRC

Petitioner appealed to the NLRC which affirmed the legality of his dismissal due to habitual absenteeism.
Nonetheless, the NLRC awarded separation pay in favor of petitioner citing the case of Philippine Geothermal, Inc. v.
National Labor Relations Commission.10 The dispositive portion of the NLRC Decision reads:

WHEREFORE, the decision appealed from is hereby MODIFIED to the extent that the respondent is hereby ordered
to pay the complainant separation pay amounting to P126,875.00 (P18,125.00 x 14 yrs./2 = P126,875.00).???ñr?bl?š

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 152166 October 20, 2010

ST. LUKE'S MEDICAL CENTER, INC. and ROBERT KUAN, Chairman, Petitioners,
vs.
ESTRELITO NOTARIO, Respondent.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari seeking to set aside the Decision1 dated September 21, 2001
and Resolution2 dated February 12, 2002 of the Court of Appeals (CA), Second Division, in CA-G.R. SP No. 58808,
entitled St. Luke’s Medical Center, Inc. and Robert Kuan, Chairman v. National Labor Relations Commission and
Estrelito Notario, which affirmed the Resolutions dated January 19, 2000 3 and March 20, 20004 of the National Labor
Relations Commission (NLRC), Third Division, in NLRC NCR Case No. 00-03-02177-97. The NLRC Resolution dated
January 19, 2000 reversed and set aside the Decision5 dated November 11, 1998 of the Labor Arbiter dismissing
respondent’s complaint for illegal dismissal against petitioners, St. Luke's Medical Center, Inc. and its Chairman,
Robert Kuan, and ordered them to reinstate respondent to his former position, without loss of seniority rights and
other benefits and full backwages from the date of dismissal until actual reinstatement, and should reinstatement be
no longer feasible, to further pay him separation pay equivalent to one (1) month’s pay for every year of service, with
the following monetary award, namely, backwages of ₱250,229.97 and separation pay of ₱31,365.00, or a total
amount of ₱281,594.97.

The antecedent facts are as follows:

On June 23, 1995, St. Luke’s Medical Center, Inc. (petitioner hospital), located at Quezon City, employed respondent
as In-House Security Guard. In August 1996, Nimaya Electro Corporation installed a closed-circuit television (CCTV)
system in the premises of petitioner hospital to enhance its security measures 6 and conducted an orientation seminar
for the in-house security personnel on the proper way of monitoring video cameras, subject to certain guidelines. 7

On December 30, 1996, respondent was on duty from 6:00 p.m. to 6:00 a.m. of the following day, December 31,
1996. His work consisted mainly of monitoring the video cameras. In the evening of December 30, 1996, Justin
Tibon, a foreigner from Majuro, Marshall Island, then attending to his 3-year-old daughter, Andanie De Brum, who
was admitted since December 20, 1996 at room 257, cardiovascular unit of petitioner hospital, reported to the
management of petitioner hospital about the loss of his mint green traveling bag, which was placed inside the cabinet,
containing, among others, two (2) Continental Airlines tickets, two (2) passports, and some clothes. Acting on the
complaint of Tibon, the Security Department of petitioner hospital conducted an investigation. When the tapes of
video camera recorder (VCR) no. 3 covering the subject period were reviewed, it was shown that the VCR was
focused on camera no. 2 (Old Maternity Unit), from 2103H to 2215H [or 9:03 p.m. to 10:15 p.m.] of December 30,
1996, and camera no. 1 (New Maternity Unit), from 0025H to 0600H [or 12:25 a.m. to 6:00 a.m.] of December 31,
1996. The cameras failed to record any incident of theft at room 257.

On January 6, 1997, petitioner hospital, through Abdul A. Karim, issued a Memorandum 8 to respondent, the CCTV
monitoring staff on duty, directing him to explain in writing, within 24 hours upon receipt thereof, why no disciplinary
action should be taken against him for violating the normal rotation/sequencing process of the VCR and,
consequently, failed to capture the theft of Tibon's traveling bag at room 257.

In his letter9 dated January 6, 1997, respondent explained that on the subject dates, he was the only personnel on
duty as nobody wanted to assist him. Because of this, he decided to focus the cameras on the Old and New
Maternity Units, as these two units have high incidence of crime.

Finding the written explanation of respondent to be unsatisfactory, petitioner hospital, through Calixton, served on
respondent a copy of the Notice of Termination,10 dated January 24, 1997, dismissing him on the ground of gross
negligence/inefficiency under Section 1, Rule VII of its Code of Discipline.

Thus, on March 19, 1997, respondent filed a Complaint 11 for illegal dismissal against petitioner hospital and its
Chairman, Robert Kuan, seeking reinstatement with payment of full backwages from the time of his dismissal up to
actual reinstatement, without of loss of seniority rights and other benefits.

Petitioners countered that they validly dismissed respondent for gross negligence and observed due process before
terminating his employment.

On November 11, 1998, the Labor Arbiter dismissed respondent’s complaint for illegal dismissal against petitioners.
He stated that a CCTV monitoring system is designed to focus on many areas in a programmed and sequential
manner and should not to be focused only on a specific area, unless the situation requires it. He concluded that
during respondent’s duty from December 30 to 31, 1996, he was negligent in focusing the cameras at the Old and
New Maternity Units only and, consequently, the theft committed at room 257 was not recorded. He said that
respondent’s infraction exposed petitioners to the possibility of a damage suit that may be filed against them arising
from the theft.

On appeal by the respondent, the NLRC issued a Resolution dated January 19, 2000, reversing the Decision of the
Labor Arbiter. It stated that petitioners failed to submit proof that there was an existing Standard Operating Procedure
(SOP) in the CCTV monitoring system, particularly on the focusing procedure. It observed that respondent was not
negligent when he focused the cameras on the Old and New Maternity Units, as they were located near the stairways
and elevators, which were frequented by many visitors and, thus, there is the likelihood that untoward incidents may
arise. If at all, it treated the matter as a single or isolated act of simple negligence which did not constitute a just
cause for the dismissal of an employee. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, the decision dated November 11, 1998 is hereby SET ASIDE and a new one
entered ordering respondents-appellees to reinstate complainant-appellant to his former position without loss of
seniority rights and other benefits, with full backwages from the date of dismissal until actual reinstatement. Should
reinstatement be no longer feasible, to further pay complainant-appellant separation pay equivalent to one (1) month
pay for every year of service.

As computed, complainant-appellant’s monetary award as of this date of decision are as follows:

Backwages …………….. ₱250,229.97

Separation Pay………… + 31,365.00

Total …..........…………. ₱281,594.97

SO ORDERED.12

On February 14, 2000, petitioners filed a Motion for Reconsideration, but the same was denied by the NLRC in its
Resolution dated March 20, 2000.
On September 21, 2001, the CA dismissed petitioners' petition for certiorari, affirming the NLRC’s finding that while
respondent may appear to be negligent in monitoring the cameras on the subject dates, the same would not
constitute sufficient ground to terminate his employment. Even assuming that respondent’s act would constitute gross
negligence, it ruled that the ultimate penalty of dismissal was not proper as it was not habitual, and that there was no
proof of pecuniary injury upon petitioner hospital. Moreover, it declared that petitioners failed to comply with the twin
notice rule and hearing as what they did was to require respondent to submit a written explanation, within 24 hours
and, thereafter, he was ordered dismissed, without affording him an opportunity to be heard.

As their motion for reconsideration was denied in the CA's Resolution dated February 12, 2002, petitioners filed this
present petition.

Petitioners allege that, by not focusing the CCTV cameras on the different areas of the hospital, respondent
committed gross negligence which warrants his dismissal. According to them, there was no need to prove that the act
done was habitual, as the occurrence of the theft exposed them to possible law suit and, additionally, there might be
a repetition of a similar incident in the future if respondent would remain in their employ.

Respondent maintains that he was not negligent in the discharge of his duties. He said that there was no actual loss
to petitioner hospital as no complaint or legal action was taken against them and that the supposed complainant,
Tibon, did not even report the matter to the police authorities.

Contrary to the stance of petitioners, respondent was illegally dismissed without just cause and compliance with the
notice requirement.

Article 282 (b) of the Labor Code provides that an employer may terminate an employment for gross and habitual
neglect by the employee of his duties. Corollarily, regarding termination of employment, Section 2(a) and (d), Rule 1,
Book VI of the Omnibus Rules Implementing the Labor Code, as amended, provides that:

Section 2. Security of Tenure. (a) In cases of regular employment, the employer shall not terminate the services of an
employee except for just or authorized causes as provided by law, and subject to the requirements of due process.

xxxx

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

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

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

(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so
desires is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented
against him.

(iii) A written notice of termination served on the employee, indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination.

xxxx

To effectuate a valid dismissal from employment by the employer, the Labor Code has set twin requirements, namely:
(1) the dismissal must be for any of the causes provided in Article 282 of the Labor Code; and (2) the employee must
be given an opportunity to be heard and defend himself. This first requisite is referred to as the substantive aspect,
while the second is deemed as the procedural aspect.13

An employer can terminate the services of an employee only for valid and just causes which must be supported by
clear and convincing evidence. The employer has the burden of proving that the dismissal was indeed for a valid and
just cause.14

A perusal of petitioner hospital’s CCTV Monitoring Guidelines, 15 disseminated to all in-house security personnel,
reveals that that there is no categorical provision requiring an in-house security personnel to observe a rotation
sequence procedure in focusing the cameras so that the security monitoring would cover as many areas as possible.
This fact is corroborated by Tito M. Maganis, petitioners' former In-House Security Department Head, in his
Affidavit16 dated October 28, 1997, stating, among others:

xxxx

2. That as Department Head of the In-House Security of SLMC [St. Luke’s Medical Center], I am familiar
with the standard operating procedures governing the conduct and operation of equipment and devices for
observance by all security personnel of SLMC to secure the premises;

3. That to the best of my personal knowledge, there had been no rules on rotation/sequencing process of
CCTVs disseminated for observance by security personnel;

4. That in the past, there were occasions when the CCTVs were focused on specific areas where untoward
incidents usually happen; That no penalty of dismissal had been imposed, thus far, on any security
personnel found focusing these CCTVs; and

xxxx

Further, the Certification17 dated April 14, 1998, issued by Himaya Electro Corporation, indicating respondent as one
of the participants in the orientation conducted for in-house security personnel18 contradicted the joint
statement,19 dated April 15, 1998, by therein participants, which excluded respondent as one of the attendees. Thus,
the certification cannot support petitioners’ theory that respondent ought to know the rudiments of monitoring the
CCTV cameras on the basis that he was one of the participants in the said orientation. Probably, respondent was
listed as one of the participants, but he failed to attend.

For his part, respondent denied having attended the said orientation and being informed of the SOP of CCTV
cameras. Despite the foregoing, respondent had been efficiently performing his assigned task. In fact, in the Letter of
Commendation20 dated December 8, 1996, petitioner hospital, through Alfredo D. Calixton, Jr., commended the
vigilance of respondent and other four in-house security personnel in preventing the occurrence of thefts and
thwarting the loss of the personal belongings of a confined patient.

Under Article 282 (b) of the Labor Code, an employer may terminate an employee for gross and habitual neglect of
duties. Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes
want of care in the performance of one’s duties. Habitual neglect implies repeated failure to perform one’s duties for a
period of time, depending upon the circumstances. A single or isolated act of negligence does not constitute a just
cause for the dismissal of the employee.21 Under the prevailing circumstances, respondent exercised his best
judgment in monitoring the CCTV cameras so as to ensure the security within the hospital premises. Verily,
assuming arguendo that respondent was negligent, although this Court finds otherwise, the lapse or inaction could
only be regarded as a single or isolated act of negligence that cannot be categorized as habitual and, hence, not a
just cause for his dismissal.

Petitioners anchor on the postulate that even a single or isolated act of negligence by respondent constitutes a just
cause for his dismissal as it engendered the possibility of a legal action that may be taken against them by the owner
of the lost items. This is purely speculative. The Certification,22 dated July 8, 1999, issued by Renato Politud Valebia,
Police Superintendent, Station Commander of Galas Police Station (Station II), located at Unang Hakbang Street,
corner Luzon Avenue, Galas, Quezon City, stated that no incident of theft was reported by the management of
petitioner hospital or any of its authorized representatives involving the loss of the plane tickets and other personal
belongings of Justin Tibon and Andanie De Brum. Even the supposed complainant, Tibon, did not institute any
complaint against petitioner hospital. Therefore, it cannot be said that petitioners incurred actual loss or pecuniary
damage.

Petitioners question the findings of the CA that there was no compliance with the twin-notice rule and hearing, while
respondent maintains that they violated his right to due process.1avvphi1

The employee must be furnished two written notices: the first notice apprises the employee of the particular acts or
omissions for which his dismissal is sought, and the second is a subsequent notice, which informs the employee of
the employer's decision to dismiss him.23

The CA found that petitioner hospital failed to comply with the rule on twin notice and hearing as it merely required
respondent to give his written explanation within 24 hours and, thereafter, ordered his dismissal.

The facts showed that on January 6, 1997, petitioner hospital, through Abdul A. Karim, issued a Memorandum to
respondent, with the directive to require him to explain in writing, within 24 hours upon receipt thereof, why no
disciplinary action should be taken against him for violating the normal rotation or sequencing process of the VCR
which led to the loss of the traveling bag of Tibon, the patient’s father, at room 257. On the same day, January 6,
1997, respondent submitted a written explanation, stating that during the subject hours on December 30 to 31, 1996,
he was the only personnel on duty as nobody wanted to assist him and, this being so, he decided to focus the
cameras on the Old and New Maternity Units as these two units usually have high incidence of theft and other
untoward incidents. Later, on January 24, 1997, petitioner hospital served a copy of the Notice of Termination upon
the respondent for gross negligence/inefficiency.1awphil

Petitioners claim that since the dismissal of respondent was made in good faith, as he even admitted his infraction,
the award of backwages was erroneous; while respondent seeks reinstatement with payment of full backwages from
the time of his dismissal up to actual reinstatement, without of loss of seniority rights and other benefits.

Where the dismissal was without just cause and there was no due process, Article 279 of the Labor Code, as
amended, mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges
and full backwages, inclusive of allowances and other benefits, or their monetary equivalent computed from the time
the compensation was not paid up to the time of actual reinstatement.

The awards of separation pay and backwages are not mutually exclusive and both may be given to respondent.24An
employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If reinstatement
is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally dismissed
employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for every year
of service.25

Petitioners’ lack of just cause and non-compliance with the procedural requisites in terminating respondent’s
employment renders them guilty of illegal dismissal. Consequently, respondent is entitled to reinstatement to his
former position without loss of seniority rights and payment of backwages. However, if such reinstatement proves
impracticable, and hardly in the best interest of the parties, perhaps due to the lapse of time since his dismissal, or if
he decides not to be reinstated, respondent should be awarded separation pay in lieu of reinstatement. 26

Prescinding from the foregoing, the Court deems that since reinstatement is no longer feasible due to the long
passage of time, petitioners are required to pay respondent his separation pay equivalent to one (1) month’s pay for
every year of service. Petitioners are thus ordered to pay respondent his backwages of ₱250,229.97 and separation
pay of ₱31,365.00, or a total amount of ₱281,594.97.

WHEREFORE, the petition is DENIED. The Decision dated September 21, 2001 and Resolution dated February 12,
2002 of the Court of Appeals, Second Division, in CA-G.R. SP No. 58808, which affirmed the Resolutions dated
January 19, 2000 and March 20, 2000 of the National Labor Relations Commission, Third Division, are AFFIRMED.

SO ORDERED.

SECOND DIVISION

[ G.R. No. 164860, February 02, 2010 ]

HILTON HEAVY EQUIPMENT CORPORATION AND PETER LIM, PETITIONERS, VS. ANANIAS P. DY,
RESPONDENT.

DECISION

CARPIO, J.:

The Case

This is a petition for review[1] assailing the Decision[2] promulgated on 30 May 2003 of the Court of Appeals (appellate
court) in CA-G.R. SP No. 72454 as well as the Resolution[3] promulgated on 6 August 2004. The appellate court
partly granted the petition filed by respondent Ananias P. Dy (Dy) and ruled that Dy was dismissed for just cause but
was not entitled to reinstatement and separation pay. The appellate court ordered Hilton Heavy Equipment
Corporation and its President, Peter Lim, (petitioners) to pay Dy backwages from the time of Dy's termination on 19
May 2000 up to the time of the finality of the decision less the amount of P120,000 which Dy received as separation
pay.

The Facts

The appellate court narrated the facts as follows:

Ananias Dy (hereafter, "DY") was employed at Hilton Heavy Equipment Corporation (hereafter, the
"CORPORATION"). In the course of his employment, he was assigned as the personal bodyguard of Peter Lim
(hereafter, "LIM"), the President of the said Corporation. On 19 April 2000, in the presence of the Corporation's
employees and Lim, Dy mauled Duke Echiverri, a co-employee, within the premises of the principal office of the
Corporation. Dy defied orders of Lim to stop mauling Duke Echiverri. Dy also threatened to kill the latter, and uttered
that if he will be given monetary consideration, he will cease working in the company. Geraldine Chan, Secretary of
the Corporation, executed an affidavit attesting to the fact of Dy's utterance of his intention to resign from his job.
Thereafter, Dy stopped reporting to work. Subsequently, Duke Echiverri filed criminal complaints against Dy for grave
threats and less serious physical injuries and the corresponding Informations were filed before the Municipal Trial
Court in Cities, Mandaue City. These cases were later dismissed upon motion filed by Duke Echiverri. A month after
the mauling incident, on 19 May 2000, Lim requested Dy to come to the office where he was confronted by Lim and
Wellington Lim, Lim's brother. Thereat, Dy was paid by Wellington Lim the amount of P120,000.00 as may be shown
by Solidbank Mandaue Branch Check No. CD 0590750 dated 19 May 2000 payable to cash, as separation pay.[4]

On 19 June 2000, Dy filed a complaint before the National Labor Relations Commission (NLRC) Regional Arbitration
Branch VII in Cebu City against petitioners for illegal dismissal and non-payment of labor standard benefits with claim
for damages and attorney's fees. The case was docketed as NLRC RAB-VIII Case No. 06-1003-2000.

The Labor Arbiter's Ruling

In his Decision dated 25 August 2000, Labor Arbiter Ernesto F. Carreon (Arbiter Carreon) dismissed Dy's complaint
for illegal dismissal because Dy stopped working when he was given separation pay of P120,000 Arbiter Carreon
explained thus:

Complainant Dy was not terminated from the service. The record reveals that complainant Dy mauled one Duke
Echiverri even in the presence of respondent Lim who was his superior. Complainant Dy apparently possesses
violent character that even with the pacification made by his superior he continued on delivering fistic blows to his
victim and even threatened him with death. At present complainant Dy is facing criminal charges in the Municipal Trial
Court of Mandaue City for his criminal acts. Complainant Dy could have been validly dismissed for the said mauling
incident because fighting in the company premises and disorderly or violent behavior are just causes for termination
of employment. But complainant Dy instead opted to stop working when given separation benefits in the amount of
P120,000.00. In a nutshell we find that in case of complainant Dy there is no dismissal let alone illegal dismissal to
speak of.[5]

The Fourth Division of the NLRC affirmed the ruling of Arbiter Carreon. In its Decision [6] promulgated on 6 July 2001,
the NLRC stated that:

Thus as correctly found by the Labor Arbiter, the mauling incident by itself was a valid ground to terminate
complainant's services considering that the victim was a manager and therefore a duly authorized representative of
respondents. It does not matter later on that the case was settled by the execution of an affidavit of desistance
because "conviction of an employee in a criminal case is not indispensable to warrant his dismissal by his employer
and that the fact that a criminal complaint against the employee has been dropped by the City Fiscal is not binding
and conclusive upon a labor tribunal." (Starlite Plastic Industrial Corp. vs. NLRC, 171 SCRA 315)

Moreover, records reveal that after the mauling incident which occurred on a Holy Wednesday, complainant did not
report to the office anymore. But because he earlier intimated that he was willing to accept a separation pay, he was
called to the office last May 19, 2000 and was given a check in the amount of One Hundred Twenty Thousand
(P120,000.00) Pesos. This was testified to by Geraldine Chan, Secretary of respondent Hilton Heavy Equipment
Corporation who executed a sworn statement to that effect (pp. 39-40, Records). A copy of Solid Bank Check No. CD
059750 dated 19 May 2000 in the amount of One Hundred Twenty Thousand (P120,000.00) somehow validated her
statement (p. 41, Records). Under these circumstances, We find that the Labor Arbiter did not err in ruling that there
was no illegal dismissal.[7]
In its Resolution promulgated on 20 June 2002, the NLRC further stated:

Resignation is the voluntary act of an employee who finds himself in a situation where he believes that personal
reason cannot be sacrificed in favor of the exigency of the service, then he has no other choice but to dissociate
himself from his employment. Resignation may be express or implied. By Dy's acceptance of the amount of
P120,000.00 on 19 May 2000, he is deemed to have opted to terminate voluntarily his services with the respondent
company.

Thus, complainant Ananias Dy was not illegally dismissed. [8]

Dy assailed the NLRC's decision and resolution before the appellate court. Dy imputed grave abuse of discretion
amounting to lack or excess of jurisdiction upon the NLRC for the following reasons:

1. There is not a single substantial evidence to prove that petitioner [Dy] had actually resigned from his
employment with private respondents;

2. There is likewise not a single evidence to prove that petitioner [Dy] had actually received the so-called
separation pay of P120,000.00;

3. As there is no substantial evidence to show petitioner [Dy] had resigned from employment, public
respondents therefore gravely abused their discretion in finding the contrary. Truth is, petitioner [Dy] was
actually illegally dismissed from employment as petitioner's rights to substantive and procedural due process
were grossly violated.[9]

The Decision of the Appellate Court

The appellate court ruled that Dy did not voluntarily resign from his employment, but there was a valid cause for Dy's
termination from employment. Petitioners, however, failed to observe due process in terminating Dy's services. The
appellate court decided that Dy was dismissed for just cause but was not entitled to reinstatement. The appellate
court awarded Dy full backwages, computed from the time he was terminated until finality of the present Decision, but
did not award separation pay. The amount of P120,000 given to Dy as supposed separation pay should be treated as
partial payment of Dy's backwages. The appellate court subsequently denied the motion for reconsideration filed by
petitioners in a Resolution promulgated on 6 August 2004.[10]

The Issues

Petitioners raise the following issues in their petition:

1. The Honorable Court of Appeals committed a reversible error in finding that [Dy] did not resign from his
employment.

2. The Honorable Court of Appeals committed a reversible error in ordering the petitioners to pay [Dy] his
backwages from the time of his termination on May 19, 2000 up to the time that its Decision becomes
final.[11]

The Ruling of the Court

The petition has partial merit. Although petitioners failed to show that the appellate court arbitrarily made factual
findings and disregarded the evidence on record, the amount of P120,000 paid by petitioners to Dy constitutes a
sufficient award of nominal damages.

The pertinent Articles of the Labor Code read as follows:

Art. 282. Termination by Employer. -- An employer may terminate an employment for any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative
in connection with his work;

(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.

Art. 285. Termination by Employee. -- (a) An employee may terminate without just cause the employee-employer
relationship by serving a written notice on the employer at least one (1) month in advance. The employer upon whom
no such notice was served may hold the employee liable for damages.

(b) An employee may put an end to the relationship without serving any notice on the employer for any of the
following just causes:

1. Serious insult by the employer or his representative on the honor and person of the employee;

2. Inhuman and unbearable treatment accorded the employee by the employer or his representative;

3. Commission of a crime or offense by the employer or his representative against the person of the employee or any
of the immediate members of his family; and

4. Other causes analogous to any of the foregoing.

We will not disturb the finding that Dy was the perpetrator in a mauling incident, as well as the ruling that Dy's act is a
just cause for termination. However, we also observe that petitioners failed to accord Dy due process.

Petitioners assert that Dy intended to sever the employer-employee relationship by his mere failure to return to work.
One month after the mauling incident, petitioners summoned Dy to give him a check worth P120,000 as separation
pay. Dy, on the other hand, never gave a resignation letter to petitioners but instead filed a complaint for illegal
dismissal against them.

Petitioners assert that Dy abandoned his work. To constitute abandonment, two elements must concur: (1) the failure
to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-
employee relationship, with the second element as the more determinative factor and being manifested by some
overt acts.[12] In the present case, Dy reported for work after the mauling incident only on 19 May 2000, after
petitioner Lim called him to the office. On the other hand, apart from Dy's absence, petitioners failed to show any
evidence of Dy's clear intent to sever his ties with petitioners.

Dy, on the other hand, asserts that petitioners are guilty of illegal dismissal for failure to observe due process. Dy's
serious misconduct merited a written notice of termination from petitioners in accordance with Section 2, Rule XXIII,
Book V of the Omnibus Rules Implementing the Labor Code.

Section 2. Standards of due process; requirements of due notice. -- In all cases of termination of employment, the
following standards of due process shall be substantially observed:

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

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

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so
desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against
him; and

(c) A written notice of termination served on the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination.
In case of termination, the foregoing notices shall be served on the employee's last known address.

Moreover, the immediate filing of a complaint for illegal dismissal against the employer with a prayer for reinstatement
shows that the employee was not abandoning his work.

In an unlawful dismissal case, the employer has the burden of proving the lawful cause sustaining the dismissal of the
employee. The employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable
cause.[13] Dy's behavior constituted just cause. However, petitioners cannot deny that they failed to observe due
process. The law requires that the employer must furnish the worker sought to be dismissed with two written notices
before termination of employment can be legally effected: (1) notice which apprises the employee of the particular
acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the
employer's decision to dismiss him. Failure to comply with the requirements taints the dismissal with illegality. [14]

Petitioners should thus indemnify Dy for their failure to observe the requirements of due process. Dy is not entitled to
reinstatement, backwages and attorney's fees because Dy's dismissal is for just cause but without due process. [15] In
light of this Court's ruling in Agabon v. National Labor Relations Commission,[16] the violation of Dy's right to statutory
due process by petitioners, even if the dismissal was for a just cause, warrants the payment of indemnity in the form
of nominal damages. This indemnity is intended not to penalize the employer but to vindicate or recognize the
employee's right to statutory due process which was violated by the employer. [17] Considering that both the Labor
Arbiter and the NLRC found that petitioners already gave Dy P120,000 of their own free will, this amount should thus
constitute the nominal damages due to Dy.

WHEREFORE, we GRANT the petition. We AFFIRM with MODIFICATION the Decision of the Court of Appeals
promulgated on 30 May 2003 in CA-G.R. SP No. 72454 as well as the Resolution promulgated on 6 August 2004.
The amount of P120,000 previously given by petitioners Hilton Heavy Equipment Corporation and Peter Lim to
respondent Ananias P. Dy constitutes the award of nominal damages. Although the amount of P120,000 exceeds the
P30,000 normally given in similar cases, the excess paid by Hilton Heavy Equipment Corporation and Peter Lim may
be retained by Ananias P. Dy as voluntary and discretionary gratuity.

SO ORDERED.

Corona,* Brion, Del Castillo, and Perez, JJ., concur.