M+W Zander Philippines v.

Enriquez
G.R. No. 169173 – June 5, 2009
C.J. Puno

Topic: Backwages – Damages & Atty’s Fees

Doctrine: With regard to moral damages, in illegal dismissal cases, the SC has consistently ruled that moral
damages are recoverable ONLY when the dismissal of the EE was attended by fraud or bad faith, or
constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public
policy. With regard to attorney’s fees, it may only be awarded when the EE is illegally dismissed in bad
faith and is compelled to litigate or incur expenses to protect his rights by reason of unjustified acts of his
ER.

Petitioners: M+W Zander Philippines and Rolf Wiltschek

Respondents: Trinidad M. Enriquez

Summary: M+W Zander replaced its General Manager, and about 29 EEs signed a letter of appeal
opposing this new appointment. The next day after the letter of appeal was sent out, many of the
employees staged a ‘no work day.’ This ‘no work day’ was imputed to Enriquez and so after an
administrative investigation, she was terminated. The SC found that she was illegally terminated and
upon the way she was treated during said termination, the Court also found that she was entitled to moral
damages and attorney’s fees. With regard to moral damages, in illegal dismissal cases, the SC has
consistently ruled that moral damages are recoverable ONLY when the dismissal of the EE was attended
by fraud or bad faith, or constituted an act oppressive to labor, or was done in a manner contrary to
morals, good customs or public policy. With regard to attorney’s fees, it may only be awarded when the
EE is illegally dismissed in bad faith and is compelled to litigate or incur expenses to protect his rights
by reason of unjustified acts of his ER.

FACTS:
 June 4, 2001: Enriquez was hired on probationary basis as Administration Manager and Executive
Assistant to the GM of the M+W Zander, a multi-national corporation engaged in construction and
facilities management
o December 4, 2001: Became permanent employee
 January 2002: M+W relieved its GM Mr. Van Stiegeren; Mr. Wiltschek replaced him
o When this replacement was announced, a letter of appeal was signed by 29 employees
opposing this appointment
o Enriquez was one of the 29 employees
o The employees opposed the appointment because they did not respect Wiltschek as a
person – they said he was arrogant, and verbally abusive to the Filipino employees
 M+W alleges that after the announcement of Wiltschek’s appointment, Enriquez actively solicited
signatures for a letter opposing said appointment  they claim that she influenced and used her moral
ascendancy over the employees to have them sign said letter of appeal
o M+W also alleged that Enriquez circulated the letter of appeal and coerced people to
participate in the work stoppage that happened the next day after the letter of appeal was
sent to the administration of the company
o M+W sent a notice to Enriquez requiring her to explain within 48 hours from receipt of
notice as to why no disciplinary action should be taken against her for willful breach of
trust and using her authority and/or influence over her subordinates to stage a “no work
day” on February 1, 2001
 She was placed under preventive suspension for 15 working days
 February 5, 2002: Enriquez signed a statement denying the allegations against her; she said that when
she arrived at work on February 2, that she was given a notice of suspension and that she was instructed
to leave the premises without being given an explanation
o Her personal belongings were inspected and that she was escorted outside of the premises
like a criminal
 February 14, 2002: During an administrative investigation and hearing, several subordinates of Enriquez
attested to the fact that they were NEVER asked by Enriquez to participate in a “no work day”
o In addition to the above statements, Sales Engineer Allan Rivera admitted that he was the
one who instigated the “no work day” but was never investigated by the petitioners
o There was one employee though, Mr. Mosende who claimed that Enriquez asked
employees to participate in the “No work day”  however, his accounts were incongruous
as he even went to work on the supposed “no work day”
 March 1, 2002: Enriquez was terminated for willful breach of trust and confidence in using her authority
and/or influence as Administrative Manager of M+W Zander Philippines over her subordinate to stage
a ‘no work day’ last February 1, 2002 which in turn disrupted vital operations of the company
o Filed a complaint or illegal dismissal
 LA: Enriquez was illegally dismissed
 NLRC: Reversed the LA decision
 CA: Reinstated the LA decision

ISSUES + HELD:
1. W/N Enriquez was illegally dismissed – YES
 For an EE to be dismissed for loss of trust and confidence, said loss of confidence should NOT be
simulated. Nor should it be used as a subterfuge for causes which are improper, illegal or unjustified
 There are two requisites to be complied with for a proper dismissal under loss of trust and confidence:
o First: The EE concerned must be one holding a position of trust and confidence
 There are two classes of positions of trust: Managerial employees and fiduciary
rank-and-file EEs
 Managerial: among others, those vested with the powers or prerogatives
to lay down management policies and to hire, transfer, suspend, lay-off, or
discipline employees or effectively recommend such managerial actions
 Fiduciary rank-and-file: these consist of cashiers, auditors, et ., or those
who, in the normal exercise of their functions, regularly handle significant
amounts of money or property
 In the case at bar, as administrative manager, it does seem that based on her job
description, she does take charge of the implementation of company rules, and
does oversee the security of the premises and ensures timely provision of supplies
and equipment  she falls under a managerial EE
o Second: There must be an act that would justify the loss of trust and confidence
 The SC states that it was NOT established that Enriquez used her authority to
influence her subordinates to stage a “no work day”
 Petitioners anchored the termination on the statement of a SINGLE subordinate,
Mosende
 The act of influencing a single subordinate not to report to work is
insufficient to merit the harsh and grave penalty of dismissal
 The penalty must be commensurate with the act, conduct or omission
imputed to the EE and must be imposed in connection with the disciplinary
authority of the ER
 The dismissal is ILLEGAL (This part is also relevant to our topic)
o Enriquez is entitled to reinstatement without loss of seniority rights and other privileges
and to full backwages, inclusive of allowances, and other benefits or their monetary
equivalent
 If reinstatement not possible due to the strained relations between EE and ER,
separation pay should instead be paid equivalent to one month salary for every year
of service, computed from the time of engagement up to the finality of this decision
2. W/N entitled to moral damages and attorney’s fees – YES (Relevant issue to our topic)
 On Moral Damages: In illegal dismissal cases, the SC has consistently ruled that moral damages are
recoverable ONLY when the dismissal of the EE was attended by fraud or bad faith, or constituted
 an act oppressive to labor, or was done in a manner contrary to morals, good customs or public
policy
o Such award cannot be justified solely upon dismissal w/o just cause or due process
o Additional facts must be pleaded and proven to warrant the grant of moral damages under
the civil code (that it was done in bad faith or fraud, and that social humiliation, wounded
feelings, grave anxiety and similar injury resulted therefrom)
 In the case at bar, the SC sees fit to award moral damages because the manner in which she was treated
upon petitioner’s suspicion in her involvement in drafting the letter of appeal and alleged staging the
‘no work day’ was contrary to good morals because it caused unnecessary humiliation to the
respondent
o She was preventively suspended, then her belongs were inspected, and she was even
escorted out of the company premises like a criminal WITHOUT ANY EXPLANATION
 Such measures were unwarranted because the charges against her have to
connection to the breach of trust involving loss of money or company property
which could have called for securing company property from Enriquez
 These measures were oppressive and uncalled for
 On Attorney’s fees: AF may only be awarded when the EE is illegally dismissed in bad faith and is
compelled to litigate or incur expenses to protect his rights by reason of unjustified acts of his ER
o In the case at bar, based on the requirements above, Enriquez is entitled to AF

RULING: “WHEREFORE, the petition is PARTIALLY GRANTED. The portion of the assailed decision
ordering Rolf Witschek liable with M+W Zander is DELETED.”