Employer-Employee Relationship Onus probandi.

The onus probandi falls on petitioner to establish or substantiate such claim by the requisite quantum of evidence. The issue of Javiers alleged illegal dismissal is anchored on the existence of an employer-employee relationship between him and Fly Ace. As the records bear out, the Labor Arbiter and the Court of Appeals found Javiers claim of employment with Fly Ace as wanting and deficient. Although Section 10, Rule VII of the New Rules of Procedure of the NLRC allows a relaxation of the rules of procedure and evidence in labor cases, this rule of liberality does not mean a complete dispensation of proof. Labor officials are enjoined to use reasonable means to ascertain the facts speedily and objectively with little regard to technicalities or formalities but nowhere in the rules are they provided a license to completely discount evidence, or the lack of it. The quantum of proof required, however, must still be satisfied. Hence, when confronted with conflicting versions on factual matters, it is for them in the exercise of discretion to determine which party deserves credence on the basis of evidence received, subject only to the requirement that their decision must be supported by substantial evidence. [Salvador Lacorte v. Hon. Amado G. Inciong, 248 Phil. 232 (1988)] Accordingly, Javier needs to show by substantial evidence that he was indeed an employee of the company against which he claims illegal dismissal. Bitoy Javier (Danilo P. Javier) vs. Fly Ace Corporation/Flordelyn Castillo, G.R. No. 192558, February 15, 2012. Employer-employee relationship; test. To determine the existence of an employer-employee relationship, the following are considered: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct. Of these elements, the most important criterion is whether the employer controls or has reserved the right to control the employee not only as to the result of the work but also as to the means and methods by which the result is to be accomplished. In this case, Javier was not able to persuade the Court that the above elements exist in his case. He could not submit competent proof that Fly Ace engaged his services as a regular employee; that Fly Ace paid his wages as an employee, or that Fly Ace could dictate what his conduct should be while at work. In other words, Javiers allegations did not establish that his relationship with Fly Ace had the attributes of an employer-employee relationship on the basis of the above-mentioned four-fold test. Worse, Javier was not able to refute Fly Aces assertion that it had an agreement with a hauling company to undertake the delivery of its goods. It was also baffling to realize that Javier did not dispute Fly Aces denial of his services exclusivity to the company. In short, all that Javier laid down were bare allegations without corroborative proof. Bitoy Javier (Danilo P. Javier) vs. Fly Ace Corporation/Flordelyn Castillo, G.R. No. 192558, February 15, 2012. Employment contract; stages. Contracts undergo three distinct stages, to wit: negotiation; perfection or birth; and consummation. Negotiation begins from the time the prospective contracting parties manifest their interest in the contract and ends at the moment of agreement of the parties. Perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract. Consummation occurs when the parties fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof. Under Article 1315 of the Civil Code, a contract is perfected by mere consent and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. An employment contract, like any other contract, is perfected at the moment

(1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract and (c) cause of the obligation. In the present case, C.F. Sharp, on behalf of its principal, International Shipping Management, Inc., hired Agustin and Minimo as Sandblaster/Painter for a 3-month contract, with a basic monthly salary of US$450.00. Thus, the object of the contract is the service to be rendered by Agustin and Minimo on board the vessel while the cause of the contract is the monthly compensation they expect to receive. These terms were embodied in the Contract of Employment which was executed by the parties. The agreement upon the terms of the contract was manifested by the consent freely given by both parties through their signatures in the contract. Neither parties disavow the consent they both voluntarily gave. Thus, there is a perfected contract of employment. C.F. Sharp & Co. Inc. and John J. Rocha vs. Pioneer Insurance and Surety Corporation, et al., G.R. No. 179469, February 15, 2012. Employment relationship; commencement. The commencement of an employer-employee relationship must be treated separately from the perfection of an employment contract. Santiago v. CF Sharp Crew Management, Inc., (G.R. No. 162419, 10 July 2007) is an instructive precedent on this point. In that case, the Supreme Court made a distinction between the perfection of the employment contract and the commencement of the employer-employee relationship, thus: The perfection of the contract, which in this case coincided with the date of execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as well as the rest of the terms and conditions therein. The commencement of the employer-employee relationship, as earlier discussed, would have taken place had petitioner been actually deployed from the point of hire. Thus, even before the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party. Despite the fact that the employer-employee relationship has not commenced due to the failure to deploy Agustin and Minimo in this case, Agustin and Minimo are entitled to rights arising from the perfected Contract of Employment, such as the right to demand performance by C.F. Sharp of its obligation under the contract. C.F. Sharp & Co. Inc. and John J. Rocha vs. Pioneer Insurance and Surety Corporation, et al., G.R. No. 179469, February 15, 2012. Employees; project vs. regular employees. The principal test for determining whether particular employees are properly characterized as project employees as distinguished from regular employees is whether or not the project employees were assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employees were engaged for that project. In a number of cases, the Court has held that the length of service or the re-hiring of construction workers on a projectto-project basis does not confer upon them regular employment status, since their re-hiring is only a natural consequence of the fact that experienced construction workers are preferred. Employees who are hired for carrying out a separate job, distinct from the other undertakings of the company, the scope and duration of which has been determined and made known to the employees at the time of the employment are properly treated as project employees and their services may be lawfully terminated upon the completion of a project. Should the terms of their employment fail to comply with this standard, they cannot be considered project employees.

Applying the above disquisition, the Court agreed with the findings of the CA that petitioners were project employees. It is not disputed that petitioners were hired for the construction of the Cordova Reef Village Resort in Cordova, Cebu. By the nature of the contract alone, it is clear that petitioners employment was to carry out a specific project. Wilfredo Aro, Ronilo Tirol, et al. vs. NLRC, Fourth Division, et al., G.R. No. 174792. March 7, 2012. Employee; probationary employee. The aforequoted Section 6 of the Implementing Rules of Book VI, Rule VIII-A of the Code specifically requires the employer to inform the probationary employee of such reasonable standards at the time of his engagement, not at any time later; else, the latter shall be considered a regular employee. Thus, pursuant to the explicit provision of Article 281 of the Labor Code, Section 6(d) of the Implementing Rules of Book VI, Rule VIII-A of the Labor Code and settled jurisprudence, petitioner Aliling is deemed a regular employee as of June 11, 2004, the date of his employment contract. The letter-offer to Aliling states that the regularization standards or the performance norms to be used are still to be agreed upon by him and his supervisor. Moreover, Aliling was assigned to GX trucking sales, an activity entirely different to the Seafreight Sales for which he was originally hired and trained for. In the present case, there was no proof that Aliling was informed of the standards for his continued employment, such as the sales quota, at the time of his engagement. Armando Ailing vs. Jose B. Feliciano, Manuel F. San Mateo III, et al., G.R. No. 185829. April 25, 2012. Employer-employee relationship. In determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the following incidents, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employee on the means and methods by which the work is accomplished. The last element, the so-called control test, is the most important element. It can be deduced from the March 1996 affidavit of petitioner that respondents challenged his authority to deliver some 158 checks to SFC. Considering that petitioner contested respondents challenge by pointing to the existing arrangements between BCC and SFC, it should be clear that respondents did not exercise the power of control over petitioner, because he thereby acted for the benefit and in the interest of SFC more than of BCC. Charlie Jao vs. BCC Products Sales, Inc. and Terrance Ty, G.R. No. 163700, April 18, 2012. Management Prerogative Management prerogative; resignation of employees running for public office. The Supreme Court has consistently held that so long as a companys management prerogatives are exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, the Court will uphold them. In the instant case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded. 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. Ernesto Ymbong vs. ABS-CBN Broadcasting Corporation, Veranda Sy & Dante Luzon, G.R. No. 184885. March 7, 2012.

Employer; right to discipline employee. In Sagales v. Rustans Commercial Corporation (G.R. No. 166554, November 27, 2008), the Supreme Court ruled: Truly, while the employer has the inherent right to discipline, including that of dismissing its employees, this prerogative is subject to the regulation by the State in the exercise of its police power. In this regard, it is a hornbook doctrine that infractions committed by an employee should merit only the corresponding penalty demanded by the circumstance. The penalty must be commensurate with the act, conduct or omission imputed to the employee and must be imposed in connection with the disciplinary authority of the employer. (Emphasis in the original.) In the case at bar, the penalty handed out by the petitioners was the ultimate penalty of dismissal. There was no warning or admonition for respondents violation of team rules, only outright termination of his services for an act which could have been punished appropriately with a severe reprimand or suspension. Negros Slashers, Inc., Rodolfo C. Alvarez and Vicente Tan vs. Alvin L. Teng, G.R. No. 187122, February 22, 2012. Security of Tenure Regular employee; fixed-contract agreement, requisites for validity. Prior Supreme Court decisions have laid two conditions for the validity of a fixed-contract agreement between the employer and employee: First, the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or Second, it satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. Lynvil contends that Ariola, et al. were employed under a fixed-term contract which expired at the end of the voyage. Contrarily, Ariola, et al. contend that they became regular employees by reason of their continuous hiring and performance of tasks necessary and desirable in the usual trade and business of Lynvil. Textually, the provision in the contract between Lynvil and Ariola, et al. that: NA ako ay sumasang-ayon na maglingkod at gumawa ng mga gawain sang-ayon sa patakarang por viaje na magmumula sa pagalis sa Navotas papunta sa pangisdaan at pagbabalik sa pondohan ng lantsa sa Navotas, Metro Manila is for a fixed period of employment. In the context, however, of the facts that: (1) Ariola, et al. were doing tasks necessarily to Lynvils fishing business with positions ranging from captain of the vessel to bodegero; (2) after the end of a trip, they will again be hired for another trip with new contracts; and (3) this arrangement continued for more than ten years, the clear intention is to go around the security of tenure of Ariola, et al. as regular employees. As such, the Supreme Court found that Ariola, et al. are regular employees. Lynvil Fishing Enterprises, Inc. vs. Andres G. Ariola, et al., G.R. No. 181974, February 1, 2012. Project employee; conversion into regular employee. In all the 38 projects where DMCI engaged Jamins services, the tasks he performed as a carpenter were indisputably necessary and desirable in DMCIs construction business. He might not have been a member of a work pool since DMCI insisted that it does not maintain a work pool, but his continuous rehiring in 38 projects over a period of 31 years and the nature of his work unmistakably made him a regular employee. In Maraguinot, Jr. v. NLRC, 348 Phil. 580 (1998), the Court held that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to

the usual business or trade of the employer, then the employee must be deemed a regular employee. Surely, length of time is not the controlling test for project employment but it is vital in determining if the employee was hired for a specific undertaking or if it is tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer. Here, [private] respondent had been a project employee several times over. The nature of his employment ceased to be project-based when he was repeatedly re-hired due to the demands of petitioners business. D.M. Consunji, Inc. and/or David M. Consunji vs. Estelito, G.R. No. 192514, April 18, 2012. nature of employment; security of tenure. In the context of these facts (1) Ariola, et al. were doing tasks necessary to Lynvils fishing business with positions ranging from captain of the vessel to bodegero; (2) after the end of a trip, they will again be hired for another trip with new contracts; and (3) this arrangement continued for more than ten years the Court believed that Lynvil intended to go around the security of tenure of Ariola, et al. as regular employees. The Court held that by the express provisions of the second paragraph of Article 280 which cover casual employment, Ariola, et al. had become regular employees of Lynvil. Lynvil Fishing Enterprises, Inc. vs. Andres G. Ariola, et al., G.R. No. 181974, February 1, 2012. Security of Tenure; Probationary employee; valid dismissal even before 6 months. The essence of a probationary period of employment fundamentally lies in the purpose or objective of both the employer and the employee during the period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the latter seeks to prove to the former that he has the qualifications to meet the reasonable standards for permanent employment. The trial period or the length of time the probationary employee remains on probation depends on the parties agreement, but it shall not exceed six (6) months under Article 281 of the Labor Code. The Supreme Court found substantial evidence indicating that the company was justified in terminating Dalangins probationary employment. Dalangin admitted in compulsory arbitration that the proximate cause for his dismissal was his refusal to attend the companys Values Formation Seminar scheduled for October 27, 2001, a Saturday. He refused to attend the seminar after he learned that it had no relation to his duties, as he claimed, and that he had to leave at 2:00 p.m. because he wanted to be with his family in the province. When the Chief Operations Officer, insisted that he attend the seminar to encourage his co-employees to attend, he stood pat on not attending, arguing that marked differences exist between their positions and duties, and insinuating that he did not want to join the other employees. He also questioned the scheduled 2:00 p.m. seminars on Saturdays as they were not supposed to be doing a company activity beyond 2:00 p.m. He considers 2:00 p.m. as the close of working hours on Saturdays; thus, holding them beyond 2:00 p.m. would be in violation of the law. This incident reveals Dalangins lack of interest in establishing a good working relationship with his co-employees, especially the rank and file; he did not want to join them because of his view that the seminar was not relevant to his position and duties. It also betrays his arrogant and condescending attitude towards his co-employees, and a lack of support for the company objective. Dalangin also exhibited negative working habits, particularly with respect to the one hour lunch break policy of the company and the observance of the companys working hours. Dalangin would take prolonged lunch breaks or would go out of the office without leave of the company and call the personnel manager later only to say that he would be unable to return to the office because of some personal matters he needs to attend to. Canadian

Opportunities Unlimited, Inc. vs. Bart Q. Dalangin, Jr., G.R. No. 172223, February 6, 2012. Dismissal Dismissal; resignation vs. illegal dismissal; telex is not equivalent to tender of resignation. Article 285 of the Labor Code recognizes termination by the employee of the employment contract by serving written notice on the employer at least one (1) month in advance. Given that provision, the law contemplates the requirement of a written notice of resignation. In the absence of a written resignation, it is safe to presume that the employer terminated the seafarers. In this case, the Supreme Court found the dismissal of De Gracia, et al. to be illegal since Cosmoship merely sent a telex to Skippers, the local manning agency, claiming that De Gracia, et al. were repatriated because the latter voluntarily pre-terminated their contracts. Skippers United Pacific, Inc. and Skippers Maritime Services, Inc. Ltd. vs. Nathaniel Doza, et al., G.R. No. 175558. February 8, 2012. Employee dismissal; constructive dismissal. In constructive dismissal cases, the employer has the burden of proving that the transfer of an employee is for just or valid ground, such as genuine business necessity. The employer must demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the employee and that the transfer does not involve a demotion in rank or a diminution in salary and other benefits. If the employer fails to overcome this burden of proof, the employees transfer is tantamount to unlawful constructive dismissal. *Merck Sharp and Dohme (Philippines) v. Robles, G.R. No. 176506, November 25, 2009] Petitioners failed to satisfy the burden of proving that the transfer was based on just or valid ground. Petitioners bare assertions of imminent threat from the respondents are mere accusations which are not substantiated by any proof. The Supreme Court agreed with the Court of Appeals in ruling that the transfer of respondents amounted to a demotion. Julies Bakeshop and/or Edgar Reyes vs. Henry Arnaiz, et al., G.R. No. 173882, February 15, 2012. Dismissal; constructive dismissal. Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. Constructive dismissal is a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not. In constructive dismissal cases, the employer is, concededly, charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. In the instant case, the overt act relied upon by petitioner is not only a doubtful occurrence but is, if it did transpire, even consistent with the dismissal from employment posited by the respondent. The factual appraisal of the Court of Appeals is correct. Petitioner was displeased after incurring expenses for respondents medical check-up and, it is credible that, thereafter, respondent was prevented entry into the work premises. This is tantamount to constructive dismissal. The Supreme Court agreed with the Court of Appeals that the incredibility of petitioners submission about abandonment of work renders credible the position of respondent that she was prevented from entering the property. This was even corroborated by the affidavits of Siarot and Mendoza which were made part of the records of this case. Ma. Melissa A. Galang vs. Julia Malasuqui, G.R. No. 174173. March 7, 2012. Dismissal; probationary employees. Gala insists that he cannot be sanctioned for the theft of company property on May 25, 2006. He maintains that he had no direct participation in the incident and that he was not aware that an illegal activity was going on as he was at some distance from the trucks when the alleged theft was being committed. He adds that he did not call the attention of the foremen

because he was a mere lineman and he was focused on what he was doing at the time. He argues that in any event, his mere presence in the area was not enough to make him a conspirator in the commission of the pilferage. Gala misses the point. He forgets that as a probationary employee, his overall job performance and his behavior were being monitored and measured in accordance with the standards (i.e., the terms and conditions) laid down in his probationary employment agreement. Under paragraph 8 of the agreement, he was subject to strict compliance with, and non-violation of the Company Code on Employee Discipline, Safety Code, rules and regulations and existing policies. Par. 10 required him to observe at all times the highest degree of transparency, selflessness and integrity in the performance of his duties and responsibilities, free from any form of conflict or contradicting with his own personal interest. Manila Electric Company vs. Jan Carlo Gala, G.R. No. 191288. March 7, 2012. Just and Authorized Causes Employee dismissal; disease; dereliction of duties. With regard to disease as a ground for termination, Article 284 of the Labor Code provides that an employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health, as well as to the health of his co-employees. In order to validly terminate employment on this ground, Section 8, Rule I, Book VI of the Omnibus Rules Implementing the Labor Code requires that: (i) the employee be suffering from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees, and (ii) a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employer shall not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health. In Triple Eight Integrated Services, Inc. v. NLRC (G.R. No. 129584, December 3, 1998), the Court held that the requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the employer of the gravity or extent of the employees illness and, thus, defeat the public policy on the protection of labor. In this case, Ynson should have reported back to work or attended the investigations conducted by Wuerth Philippines, Inc. immediately upon being permitted to work by his doctors, knowing that his position remained vacant for a considerable length of time. However, he did not even show any sincere effort to return to work. Clearly, since there is no more hindrance for him to return to work and attend the investigations set by Wuerth Philippines, Inc., Ynsons failure to do so was without any valid or justifiable reason. His conduct shows his indifference and utter disregard of his work and his employers interest, and displays his clear, deliberate, and gross dereliction of duties. The power to dismiss an employee is a recognized prerogative inherent in the employers right to freely manage and regulate his business. The law, in protecting the rights of the laborers, authorizes neither oppression nor self-destruction of the employer. The workers right to security of tenure is not an absolute right, for the law provides that he may be dismissed for cause. As a general rule, employers are allowed wide latitude of discretion in terminating the employment of managerial personnel. The mere existence of a basis for believing that such employee has breached the trust and confidence of his employer would suffice for his dismissal. Needless to say, an irresponsible employee like Ynson does

not deserve a position in the workplace, and it is Wuerth Philippines, Inc.s management prerogative to terminate his employment. To be sure, an employer cannot be compelled to continue with the employment of workers when continued employment will prove inimical to the employers interest. Wuerth Philippines, Inc. vs. Rodante Ynson, G.R. No. 175932, February 15, 2012. Employee dismissal; grounds. The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be holding a position of trust and confidence. Here, it is indubitable that Oasay holds a position of trust and confidence. The position of Building Administrator, being managerial in nature, necessarily enjoys the trust and confidence of the employer. The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. Palacio Del Gobernador Condominium Corporation had established, by clear and convincing evidence, Oasays acts which justified its loss of trust and confidence on the former. Sebastian F. Oasay, Jr. vs. Palacio del Gobernador Condominium Corporation and Omar T. Cruz, G.R. No. 194306, February 6, 2012. Employee dismissal; just cause. The Supreme Court found that Galang had become unfit to continue his employment. The evidence supports the view that he continued to exhibit undesirable traits as an employee and as a person, in relation to both his co-workers and his superiors, particularly Tupas, her immediate supervisor. Quoting the Court of Appeals decision with approval, the Supreme Court held: Without offering any possible ill motive that might have impelled [the respondents] to summarily dismiss [Galang], who admitted having been absorbed by the former as janitor upon the termination of his contract with his agency, this Court is more inclined to give credence to the evidence pointing to the conclusion that *Galangs+ employment was actually severed for a just cause. Romeo A. Galang vs. Citiland Shaw Tower, Inc. and Virgilio Baldemor, G.R. No. 173291, February 8, 2012. Dismissal; procedural and substantive due process; grounds for valid termination; breach of trust. Just cause is required for a valid dismissal. The Labor Code provides that an employer may terminate an employment based on fraud or willful breach of the trust reposed on the employee. Such breach is considered willful if it is done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must also be based on substantial evidence and not on the employers whims or caprices or suspicions otherwise, the employee would eternally remain at the mercy of the employer. Loss of confidence must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary. And, in order to constitute a just cause for dismissal, the act complained of must be workrelated and shows that the employee concerned is unfit to continue working for the employer. In addition, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence or that the employee concerned is entrusted with confidence in delicate matters, such as the handling or care and protection of the property and assets of the employer. The betrayal of this trust is the essence of the offense for which an employee is penalized. The Supreme Court found that breach of trust is present in this case, when Ariola (the captain), Alcovendas (Chief Mate), Calinao (Chief Engineer), Nubla (cook), Baez (oiler), and Sebullen (bodegero) conspired with one another and stole pampano and tangigue fish and delivered them to another vessel, to the prejudice of Lynvil. Lynvil Fishing

Enterprises, Inc. vs. Andres G. Ariola, et al., G.R. No. 181974, February 1, 2012. Just Cause for Dismissal of Employee, crime; public prosecutors decision not binding on the labor tribunal. The Supreme Court has held in Nicolas v. National Labor Relations Commission [327 Phil. 883, 886-887 (1996)] that a criminal conviction is not necessary to find just cause for employment termination. Otherwise stated, an employees acquittal in a criminal case, especially one that is grounded on the existence of reasonable doubt, will not preclude a determination in a labor case that he is guilty of acts inimical to the employers interests. In the reverse, the finding of probable cause is not followed by automatic adoption of such finding by the labor tribunals. In other words, whichever way the public prosecutor disposes of a complaint, the finding does not bind the labor tribunal. Lynvil contends that the filing of a criminal case before the Office of the Prosecutor is sufficient basis for a valid termination of employment based on serious misconduct and/or loss of trust and confidence. The Supreme Court held that Lynvil cannot argue that since the Office of the Prosecutor found probable cause for theft, the Labor Arbiter must follow the finding as a valid reason for the termination of respondents employment. The proof required for purposes that differ from one and the other are likewise different. Lynvil Fishing Enterprises, Inc. vs. Andres G. Ariola, et al., G.R. No. 181974, February 1, 2012. Employee dismissal; willful breach of trust. The loss of trust and confidence must be based on willful breach of the trust reposed in the employee by his employer. Such breach is willful if it is done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Moreover, it must be based on substantial evidence and not on the employers whims or caprices or suspicions otherwise, the employee would eternally remain at the mercy of the employer. The Supreme Court has laid down the guidelines for the application of the loss of trust and confidence doctrine: (1) loss of confidence should not be simulated; (2) it should not be used as a subterfuge for causes which are improper, illegal or unjustified; (3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and (4) it must be genuine, not a mere afterthought, to justify an earlier action taken in bad faith. Villanueva worked for Meralco as a Branch Representative whose tasks included the issuance of Contracts for Electric Service after receipt of the amount due for service connection from customers. Obviously, he was entrusted not only with the responsibility of handling company funds but also to cater to customers who intended to avail of Meralcos services. This is nothing but an indication that trust and confidence were reposed in him by the company, although his position was not strictly managerial by nature. Meralcos loss of trust and confidence arising out of Villanuevas act of misappropriation of company funds in the course of processing customer applications has been proven by substantial evidence, thus, justified. Verily, the issuance of additional receipts for excessive payments exacted from customers is a willful breach of the trust reposed in him by the company. Vicente Villanueva, Jr. vs.. The National Labor Relations Commission, Third Division, Manila Electric Company, Manuel Lopez, Chairman and CEO, and Francisco Collantes, Manager. G.R. No. 176893, June 13, 2012. Dismissal; loss of trust and confidence. The rule is long and well settled that, in illegal dismissal cases like the one at bench, the burden of proof is upon the employer to show that the employees termination from service is for a just and valid cause. The employers case succeeds or fails on the strength of its evidence and not on the weakness of that adduced by the employee, in keeping with the principle that

the scales of justice should be tilted in favor of the latter in case of doubt in the evidence presented by them. Often described as more than a mere scintilla, the quantum of proof is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. Failure of the employer to discharge the foregoing onus would mean that the dismissal is not justified and therefore illegal. In the case at bar, the Supreme Court agreed with the petitioners that mere substantial evidence and not proof beyond reasonable doubt is required to justify the dismissal from service of an employee charged with theft of company property. However, the Court found no error in the CAs findings that the petitioners had not adequately proven by substantial evidence that Arlene and Joseph indeed participated or cooperated in the commission of theft relative to the six missing intensifying screens so as to justify the latters termination from employment on the ground of loss of trust and confidence. Blue Sky Trading Company, Inc. et al. vs. Arlene P. Blas and Joseph D. Silvano, G.R. No. 190559. March 7, 2012. Dismissal; just cause. In fine, an employees failure to meet sales or work quotas falls under the concept of gross inefficiency, which in turn is analogous to gross neglect of duty that is a just cause for dismissal under Article 282 of the Code. However, in order for the quota imposed to be considered a valid productivity standard and thereby validate a dismissal, managements prerogative of fixing the quota must be exercised in good faith for the advancement of its interest. The duty to prove good faith, however, rests with WWWEC as part of its burden to show that the dismissal was for a just cause. WWWEC must show that such quota was imposed in good faith. This WWWEC failed to do, perceptibly because it could not. The fact of the matter is that the alleged imposition of the quota was a desperate attempt to lend a semblance of validity to Alilings illegal dismissal. Armando Ailing vs. Jose B. Feliciano, Manuel F. San Mateo III, et al., G.R. No. 185829. April 25, 2012. Dismissal; retrenchment. Retrenchment is a valid exercise of management prerogative subject to the strict requirements set by jurisprudence, to wit: (1) That the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; (3) That the employer pays the retrenched employees separation pay equivalent to one month pay or at least month pay for every year of service, whichever is higher; (4) That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees right to security of tenure; and (5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, x x x efficiency, seniority, physical fitness, age, and financial hardship for certain workers. As aptly found by the NLRC and justly sustained by the CA, Petrocon exercised its prerogative to retrench its employees in good faith and the considerable reduction of work

allotments of Petrocon by Saudi Aramco was sufficient basis for Petrocon to reduce the number of its personnel. As for the notice requirement, however, contrary to petitioners contention, proper notice to the DOLE within 30 days prior to the intended date of retrenchment is necessary and must be complied with despite the fact that respondent is an overseas Filipino worker. In the present case, although respondent was duly notified of his termination by Petrocon 30 days before its effectivity, no allegation or proof was advanced by petitioner to establish that Petrocon ever sent a notice to the DOLE 30 days before the respondent was terminated. Thus, this requirement of the law was not complied with. Despite the fact that respondent was employed by Petrocon as an OFW in Saudi Arabia, still both he and his employer are subject to the provisions of the Labor Code when applicable. The basic policy in this jurisdiction is that all Filipino workers, whether employed locally or overseas, enjoy the protective mantle of Philippine labor and social legislations (citing Philippine National Bank v. Cabansag, G.R. No. 157010, June 21, 2005, 460 SCRA 514, 518 and Royal Crown Internationale v. NLRC, G.R. No. 78085, October 16, 1989, 178 SCRA 569.) International Management Services/Marilyn C. Pascual vs. Roel P. Logarta, G.R. No. 163657, April 18, 2012. Relief for unjust termination Termination; Migrant Workers; RA No. 8042; money claims in cases of unjust termination. Section 10 of Republic Act No. 8042 (Migrant Workers Act) provides for money claims in cases of unjust termination of employment contracts: In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. The Migrant Workers Act provides that salaries for the unexpired portion of the employment contract or three (3) months for every year of the unexpired term, whichever is less, shall be awarded to the overseas Filipino worker, in cases of illegal dismissal. However, in 24 March 2009, Serrano v. Gallant Maritime Services and Marlow Navigation Co. Inc. (G.R. No. 167614), the Court, in an En Banc Decision, declared unconstitutional the clause or for three months for every year of the unexpired term, whichever is less and awarded the entire unexpired portion of the employment contract to the overseas Filipino worker. On 8 March 2010, however, Section 7 of Republic Act No. 10022 (RA 10022) amended Section 10 of the Migrant Workers Act, and once again reiterated the provision of awarding the unexpired portion of the employent contract or three (3) months for every year of the unexpired term, whichever is less. Nevertheless, since the termination occurred on January 1999 before the passage of the amendatory RA 10022, the Supreme Court applied RA 8042, without touching on the constitutionality of Section 7 of RA 10022. The declaration in March 2009 of the unconstitutionality of the clause or for three months for every year of the unexpired term, whichever is less in RA 8042 shall be given retroactive effect to the termination that occurred in January 1999 because an unconstitutional clause in the law confers no rights, imposes no duties and affords no protection. The unconstitutional provision is inoperative, as if it was not passed into law at all. Skippers United Pacific, Inc. and Skippers Maritime Services, Inc. Ltd. vs. Nathaniel Doza, et al., G.R. No. 175558. February 8, 2012. Reinstatement; backwages. Employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no longer possible, the

backwages shall be computed from the time of their illegal termination up to the finality of the decision. Thus, when there is an order of reinstatement, the computation of backwages shall be reckoned from the time of illegal dismissal up to the time that the employee is actually reinstated to his former position. Pursuant to the order of reinstatement rendered by the Labor Arbiter, the Bank of Lubao sent Manabat a letter requiring him to report back to work on May 4, 2007. Notwithstanding the said letter, Manabat opted not to report for work. Thus, it is but fair that the backwages to be awarded to Manabat should be computed from the time that he was illegally dismissed until the time when he was required to report for work, i.e. from September 1, 2005 until May 4, 2007. Bank of Lubao, Inc. vs. Rommel J. Manabat, et al., G.R. No. 188722, February 1, 2012. Reinstatement; doctrine of strained relations; when applicable. Under the law and prevailing jurisprudence, an illegally dismissed employee is entitled to reinstatement as a matter of right. However, if reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and the employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more prudent to order payment of separation pay instead of reinstatement. Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. On one hand, such payment liberates the employee from what could be a highly oppressive work environment. On the other hand, it releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. In such cases, it should be proved that the employee concerned occupies a position where he enjoys the trust and confidence of his employer; and that it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned. In the present case, the Supreme Court found that the relations between the parties had been already strained thereby justifying the grant of separation pay in lieu of reinstatement in favor of Manabat. Manabats reinstatement to his former position would only serve to intensify the atmosphere of antipathy and antagonism between the parties. Undoubtedly, Bank of Lubaos filing of various criminal complaints against Manabat for qualified theft and the subsequent filing by the latter of the complaint for illegal dismissal against the former, taken together with the pendency of the instant case for more than six years, had caused strained relations between the parties. Considering that Manabats former position as bank encoder involves the handling of accounts of the depositors of the Bank of Lubao, it would not be equitable on the part of the Bank of Lubao to be ordered to maintain the former in its employ since it may only inspire vindictiveness on the part of Manabat. Also, the refusal of Manabat to return to work is in itself an indication of the existence of strained relations between him and the petitioner. Bank of Lubao, Inc. vs. Rommel J. Manabat, et al., G.R. No. 188722, February 1, 2012. Dismissal; relief of illegally dismissed employee. An illegally dismissed employee is entitled to two reliefs: back wages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement if such is viable, or separation pay if reinstatement is no longer viable, and to back wages. The

normal consequences of respondents illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of back wages computed from the time compensation was withheld from him up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of back wages. Petitioners question the CA Resolution dated October 24, 2008, arguing that it modified its March 31, 2008 Decision which has already attained finality insofar as respondent is concerned. Such contention is misplaced. The CA merely clarified the period of payment of back wages and separation pay up to the finality of its decision (March 31, 2008) modifying the Labor Arbiters decision. In view of the modification of monetary awards in the Labor Arbiters decision, the time frame for the payment of back wages and separation pay is accordingly modified to the finality of the CA decision. Norkis Distribution, Inc., et al. vs. Delfin S. Descallar, G.R. No. 185255. March 14, 2012 Employee; separation package. Article 283 of the Labor Code provides only the required minimum amount of separation pay, which employees dismissed for any of the authorized causes are entitled to receive. Employers, therefore, have the right to create plans, providing for separation pay in an amount over and above what is imposed by Article 283. There is nothing therein that prohibits employers and employees from contracting on the terms of employment, or from entering into agreements on employee benefits, so long as they do not violate the Labor Code or any other law, and are not contrary to morals, good customs, public order, or public policy. Consequently, petitioners are not allowed to receive separation pay from both the Labor Code, on the one hand, and the New Gratuity Plan and the SSP, on the other, they would receive double compensation for the same cause (i.e., separation from the service due to redundancy). Ma. Corina C. Jiao, et al. vs. Global Business Bank, Inc., et al., G.R. No. 182331, April 18, 2012. Dismissal; willful disobedience. For willful disobedience to be a valid cause for dismissal, these two elements must concur: (1) the employees 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. The petitioners arbitrary defiance to Graphics, Inc.s order for him to render overtime work constitutes willful disobedience. Because of his refusal to render overtime work, the company failed to meet its printing deadlines, resulting in losses to the company. The Supreme Court took into account the fact that petitioner was inclined to absent himself and to report late for work despite being previously penalized, and affirmed the CAs ruling that the petitioner is indeed utterly defiant of the lawful orders and the reasonable work standards prescribed by his employer. The Court reiterated its previous rulings stating that an employer has the right to require the performance of overtime service in any of the situations contemplated under Article 89 of the Labor Code and an employees non-compliance is willful disobedience. Realda v. New Age Graphics, Inc. et. al. G.R. No. 192190, April 25, 2012. Dismissal; inefficiency. The petitioners failure to observe Graphics, Inc.s work standards constitutes inefficiency that is a valid cause for dismissal. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same

within the alloted reasonable period, or by producing unsatisfactory results. As the operator of Graphics, Inc.s printer, he is mandated to check whether the colors that would be printed are in accordance with the clients specifications and for him to do so, he must consult the General Manager and the color guide used by Graphics, Inc. before making a full run. The employee in this case failed to observe this simple procedure and proceeded to print without making sure that the colors were at par with the clients demands. This resulted to delays in the delivery of output, client dissatisfaction, and additional costs to Graphics, Inc.. Realda v. New Age Graphics, Inc. et. al. G.R. No. 192190, April 25, 2012. Dismissal; due process. In King of Kings Transport, Inc. v. Mamac, this Court laid down the manner by which the procedural due requirements of due process can be satisfied: (1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. Reasonable opportunity under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees. (2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (a) explain and clarify their defenses to the charge against them; (b) present evidence in support of their defenses; and (c) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement. (3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment. Graphics, Inc. failed to afford the petitioner with a reasonable opportunity to be heard and defend itself. An administrative hearing set on the same day that the petitioner received the memorandum and the 24-hour period given to him to submit a written explanation is far from reasonable. Furthermore,

there is no indication that Graphics, Inc. issued a second notice, informing the petitioner of his dismissal. Graphics, Inc. admitted that it decided to terminate the petitioners employment when he ceased to report for work after being served with the memorandum requiring him to explain and subsequent to his failure to submit a written explanation. However, there is nothing on record showing that Graphics, Inc. placed its decision to dismiss in writing and that a copy thereof was sent to the petitioner. Notwithstanding the existence of a just cause to terminate petitioners employment, respondent was ordered to pay P30,000 as nominal damages for violation of the employees right to due process. Realda v. New Age Graphics, Inc. et. al. G.R. No. 192190, April 25, 2012. Dismissal; willful disobedience. Willful disobedience requires the concurrence of two elements: (1) the employees 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. Both elements are present in this case. First, at no point did the dismissed employees deny Kingspoint Express claim that they refused to comply with the directive for them to submit to a drug test or, at the very least, explain their refusal. This gives rise to the impression that their non-compliance is deliberate. The utter lack of reason or justification for their insubordination indicates that it was prompted by mere obstinacy, hence, willful thereby justifying their dismissal. Second, that the companys order to undergo a drug test is necessary and relevant in the performance of petitioners functions as drivers of Kingspoint Express is obvious. As the NLRC correctly pointed out, drivers are indispensable to Kingspoint Express primary business of rendering door-to-door delivery services. It is common knowledge that the use of dangerous drugs has adverse effects on driving abilities that may render employees incapable of performing their duties. Not only are they acting against the interests of Kingspoint Express, they also pose a threat to the public. Kakampi and its members, et al. v. Kingspoint Express and Logistic and/or Mary Ann Co, G.R. No. 194813, April 25, 2012. Dismissal; procedural due process requirements. While Kingspoint Express had reason to sever petitioners employment, this Court finds its supposed observance of the requirements of procedural due process pretentious. While Kingspoint Express required the dismissed employees to explain their refusal to submit to a drug test, the two (2) days afforded to them to do so cannot qualify as reasonable opportunity, which the Court construed in King of Kings Transport, Inc. v. Mamac as a period of at least five (5) calendar days from receipt of the notice. Thus, even if a just cause exists for the dismissal of petitioners, Kingspoint Express is still liable to indemnify the dismissed employees, with the exception of Panuelos, Dizon and Dimabayao, who did not appeal the dismissal of their complaints, with nominal damages in the amount of P30,000.00. Kakampi and its members, et al. v. Kingspoint Express and Logistic and/or Mary Ann Co, G.R. No. 194813, April 25, 2012. Dismissal; abandonment. Abandonment cannot be inferred from the actuations of respondent. When he discovered that his time card was off the rack, he immediately inquired from his supervisor. He later sought the assistance of his counsel, who wrote a letter addressed to Polyfoam requesting that he be re-admitted to work. When said request was not acted upon, he filed the instant illegal dismissal case. These circumstances clearly negate the intention to abandon his work. Polyfoam-RGC International, Corporation and Precilla A. Gramaje vs. Edgardo Concepcion.G.R. No. 172349, June 13, 2012.

Dismissal; due process. To meet the requirements of due process in the dismissal of an employee, an employer must furnish the worker with two written notices: (1) a written notice specifying the grounds for termination and giving to said employee a reasonable opportunity to explain his side and (2) another written notice indicating that, upon due consideration of all circumstances, grounds have been established to justify the employers decision to dismiss the employee. The law does not require that an intention to terminate ones employment should be included in the first notice. It is enough that employees are properly apprised of the charges brought against them so they can properly prepare their defenses. It is only during the second notice that the intention to terminate ones employment should be explicitly stated. The guiding principles in connection with the hearing requirement in dismissal cases are the following: 1. Ample opportunity to be heard means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way. 2. A formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it. 3. The ample opportunity to be heard standard in the Labor Code prevails over the hearing or conference requirement in the implementing rules and regulations. The existence of an actual, formal trial-type hearing, although preferred, is not absolutely necessary to satisfy the employees right to be heard. Esguerra was able to present her defenses; and only upon proper consideration of it did Valle Verde send the second memorandum terminating her employment. Since Valle Verde complied with the two-notice requirement, no procedural defect exists in Esguerras termination. Dolores T. Esguerra vs. Valle Verde Country Club, Inc. and Ernesto Villaluna. G.R. No. 173012, June 13, 2012. Dismissal; loss of trust and confidence. There are two (2) classes of positions of trust. The first class consists of managerial employees, or those vested with the power to lay down management policies; and the second class consists of cashiers, auditors, property custodians or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. Esguerra held the position of Cost Control Supervisor and had the duty to remit to the accounting department the cash sales proceeds from every transaction she was assigned to. This is not a routine task that a regular employee may perform; it is related to the handling of business expenditures or finances. For this reason, Esguerra occupies a position of trust and confidence a position enumerated in the second class of positions of trust. Any breach of the trust imposed upon her can be a valid cause for dismissal. Loss of confidence as a just cause for termination of employment can be invoked when an employee holds a position of responsibility, trust and confidence. In order to constitute a just cause for dismissal, the act complained of must be related to the performance of the duties of the dismissed employee and must show that he or she is unfit to continue working for the employer for violation of the trust reposed in him or her. It was Esguerras responsibility to account for the cash proceeds; in case of problems, she

should have promptly reported it, regardless of who was at fault. Instead, she settled the unaccounted amount only after the accounting department informed her about the discrepancy, almost one month following the incident. Esguerras failure to make the proper report reflects her irresponsibility in the custody of cash for which she was accountable. Dolores T. Esguerra vs. Valle Verde Country Club, Inc. and Ernesto Villaluna. G.R. No. 173012, June 13, 2012. Dismissal; serious misconduct and loss of trust and confidence. Dejan is liable for violation of Section 7, paragraphs 4 and 11 of the Company Code of Employee Discipline, constituting serious misconduct, fraud and willful breach of trust of the employer, which are just causes for termination of employment under the law. There is no dispute about the release of the meter sockets. Also, the persons involved were clearly identified Dejan; Gozarin, a private electrician who received the meter sockets; Reyes, the owner of the jeep where the meter sockets were loaded by Gozarin; Duenas, a Meralco field representative; and Depante, another private electrician who purportedly owned the meter sockets. The release by Dejan of the meter sockets to Gozarin without the written authority or SPA from the customer or customers who applied for electric connection (as a matter of company policy) served as a key element in proving the private contracting activity for electric service connection being undertaken by Dejan and Duenas. Moreover, it was bad enough that Dejan failed to ask for a written authorization from the customers for the release of the meter sockets as required by company policy, but the elaborate scheme pursued by Dejan in concert with Duenas, were all undertaken to defraud Meralco. Hence, Meralco had valid reasons for losing its trust and confidence in Dejan. He is no ordinary employee. As branch representative, he was principally charged with the function and responsibility to accept payment of fees required for the installation of electric service and facilitate issuance of meter sockets. The duties of his position require him to always act with the highest degree of honesty, integrity and sincerity, as the company puts it. In light of his fraudulent act, Meralco, an enterprise imbued with public interest, cannot be compelled to continue Dejans employment, as it would be inimical to its interest. Manila Electric Company (Meralco) vs. Herminigildo H. Dejan. G.R. No. 194106, June 18, 2012. Employee dismissal. When the floating status of employees lasts for more than six (6) months, they may be considered to have been illegally dismissed from the service. Floating status means an indefinite period of time when one does not receive any salary or financial benefit provided by law. In this case, petitioners were actually reassigned to new posts, albeit in a different location from where they resided. Thus, there can be no floating status or indefinite period to speak of. Instead, petitioners were the ones who refused to report for work in their new assignment. In cases involving security guards, a relief and transfer order in itself does not sever the employment relationship between the security guards and their agency. Employees have the right to security of tenure, but this does not give them such a vested right to their positions as would deprive the company of its prerogative to change their assignment or transfer them where their services, as security guards, will be most beneficial to the client. An employer has the right to transfer or assign its employees from one office or area of operation to another in pursuit of its legitimate business interest, provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the transfer is not

motivated by discrimination or bad faith, or effected as a form of punishment or demotion without sufficient cause. While petitioners may claim that their transfer to Manila will cause added expenses and inconvenience, absent any showing of bad faith or ill motive on the part of the employer, the transfer remains valid. Salvador O. Mojar, et al. vs. Agro Commercial Security Service Agency, et al. G.R. No. 187188, June 27, 2012. Employee dismissal; burden of proof. Under the law, the burden of proving that the termination of employment was for a valid or authorized cause rests on the employer. Failure to discharge this burden would result in an unjust or illegal dismissal. The companys evidence on the respondents alleged infractions do not substantially show that they violated company rules and regulations to warrant their dismissal. It is obvious that the company overstepped the bounds of its management prerogative in the dismissal of Mauricio and Camacho. It lost sight of the principle that management prerogative must be exercised in good faith and with due regard to the rights of the workers in the spirit of fairness and with justice in mind. Philbag Industrial Manufacturing Corp. vs. Philbag Workers Union-Lakas at Gabay ng Manggagawang Nagkakaisa. G.R. No. 182486, June 20, 2012. Employee dismissal; due process. Retrenchment is subject to faithful compliance with the substantive and procedural requirements laid down by law and jurisprudence. For a valid retrenchment, the following elements must be present: 1. That retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; 2. That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; 3. That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least month pay for every year of service, whichever is higher; 4. That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees right to security of tenure; and 5. That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers. All these elements were successfully proven by petitioner. First, the huge losses suffered by the Club for the past two years had forced petitioner to close it down to avert further losses which would eventually affect the operations of petitioner. Second, all 45 employees working in the Club were served with notice of termination. The corresponding notice was likewise served to the DOLE one month prior to retrenchment. Third, the employees were offered separation pay, most of whom have accepted and opted not to join in this complaint. Fourth, the cessation of or withdrawal from business operations was bona fide in character and not impelled by a motive to defeat or circumvent the tenurial rights of employees. Waterfront Cebu City Hotel vs. Ma. Melanie P. Jimenez, et al. G.R. No. 174214, June 13, 2012.

Employee dismissal; due process. The following are the guiding principles in connection with the hearing requirement in dismissal cases: 1. Ample opportunity to be heard means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way. 2. A formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it. 3. The ample opportunity to be heard standard in the Labor Code prevails over the hearing or conference requirement in the implementing rules and regulations. Given that the petitioners expressly requested a conference or a convening of a grievance committee, such formal hearing became mandatory. After PGAI failed to affirmatively respond to such request, it follows that the hearing requirement was not complied with and, therefore, Vallota was denied his right to procedural due process. Prudential Guarantee and Assurance Employee Labor Union and Sandy T. Vallota vs. NLRC, Prudential Guarantee and Assurance Inc., and/or Jocelyn Retizos. G.R. No. 185335, June 13, 2012. Employee dismissal; just cause. Article 282(e) of the Labor Code talks of other analogous causes or those which are susceptible of comparison to another in general or in specific detail as a cause for termination of employment. A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an employees moral depravity. Theft committed by an employee against a person other than his employer, if proven by substantial evidence, is a cause analogous to serious misconduct. Previous infractions may be cited as justification for dismissing an employee only if they are related to the subsequent offense. However, it must be noted that such a discussion was unnecessary since the theft, taken in isolation from Fermins other violations, was in itself a valid cause for the termination of his employment. Cosmos Bottling Corp. vs. Wilson Fermin/Wilson Fermin vs. Cosmos Bottling Corp. and Cecilia Bautista. G.R. No. 193676 & G.R. No. 194303. June 20, 2012. Employee dismissal; loss of trust and confidence. The Labor Code recognizes that an employer, for just cause, may validly terminate the services of an employee for serious misconduct or willful disobedience of the lawful orders of the employer or representative in connection with the employees work. Fraud or willful breach by the employee of the trust reposed by the employer in the former, or simply loss of confidence, also justifies an employees dismissal from employment. Willful breach of trust or loss of confidence requires that the employee (1) occupied a position of trust or (2) was routinely charged with the care of the employers property. To warrant dismissal based on loss of confidence, there must be some basis for the loss of trust or the employer must have reasonable grounds to believe that the employee is responsible for the misconduct that renders the latter unworthy of the trust and confidence demanded by his or her position. For more than a month, the petitioners did not even inform PLDT of the whereabouts of the plant materials. Instead, he stocked these materials at his residence even if they were needed in the daily operations of the company. In keeping with the honesty and integrity demanded by his position, he should have turned over these materials to the plants warehouse. Thus, PLDT reasonably suspected petitioner of stealing the companys property. At that juncture, the employer may already dismiss the employee

since it had reasonable grounds to believe or to entertain the moral conviction that the latter was responsible for the misconduct, and the nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded by his position.Romeo E. Paulino vs. NLRC, Philippine Long Distance Co., Inc. G.R. No. 176184, June 13, 2012. Employee dismissal; loss of trust and confidence. Loss of confidence as a just cause for dismissal was never intended to provide employers with a blank check for terminating their employees. It should ideally apply only to cases involving employees occupying positions of trust and confidence or to those situations where the employee is routinely charged with the care and custody of the employers money or property. To the first class belong managerial employees, i.e., those vested with the powers or prerogatives to lay down management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees or effectively recommend such managerial actions; and to the second class belong cashiers, auditors, property custodians, etc., or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be one holding a position of trust and confidence. The second requisite is that there must be an act that would justify the loss of trust and confidence. Vallotas position as Junior Programmer is analogous to the second class of positions of trust and confidence. Though he did not physically handle money or property, he became privy to confidential data or information by the nature of his functions. At a time when the most sensitive of information is found not printed on paper but stored on hard drives and servers, an employee who handles or has access to data in electronic form naturally becomes the unwilling recipient of confidential information. There was no other evidence presented to prove fraud in the manner of securing or obtaining the files found in Vallotas computer. The presence of the files would merely merit the development of some suspicion on the part of the employer, but should not amount to a loss of trust and confidence such as to justify the termination of his employment. Such act is not of the same class, degree or gravity as the acts that have been held to be of such character. Prudential Guarantee and Assurance Employee Labor Union and Sandy T. Vallota vs. NLRC, Prudential Guarantee and Assurance Inc., and/or Jocelyn Retizos. G.R. No. 185335, June 13, 2012. Employee dismissal; loss of trust and confidence. To validly dismiss an employee on the ground of loss of trust and confidence under Article 282 (c) of the Labor Code of the Philippines, the following guidelines must be observed: 1) loss of confidence should not be simulated; 2) it should not be used as subterfuge for causes which are improper, illegal or unjustified; 3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and 4) it must be genuine, not a mere afterthought to justify earlier action taken in bad faith. More importantly, it must be based on a willful breach of trust and founded on clearly established facts. The testimony of Lobitaa constitutes substantial evidence to prove that respondent, as the then Power Plant Manager, accepted commissions and/or kickbacks from suppliers, which is a clear violation of Section 2.04 of petitioners Company Rules and Regulations. Jurisprudence consistently holds that for managerial employees, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. Respondents termination was for a just and valid

cause. Apo Cement Corporation Vs. Zaldy E. Baptisma. G.R. No. 176671. June 20, 2012. Employee dismissal; order of reinstatement. Article 223 of the Labor Code provides that in case there is an order of reinstatement, the employer must admit the dismissed employee under the same terms and conditions, or merely reinstate the employee in the payroll. The order shall be immediately executory. Thus, 3rd Alert cannot escape liability by simply invoking that Navia did not report for work. The law states that the employer must still reinstate the employee in the payroll. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service could be awarded as an alternative. 3rd Alert Security and Detective Services, Inc. vs. Romualdo Navia. G.R. No. 200653, June 13, 2012. Employee dismissal; retrenchment. Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees. It is resorted to during periods of business recession, industrial depression, or seasonal fluctuations or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery or of automation. It is an act of the employer of dismissing employees because of losses in the operation of a business, lack of work, and considerable reduction on the volume of his business. In this case, the closure of a department or division of a company constitutes retrenchment by, and not closure of, the company itself. Petitioner has not totally ceased its business operations. It merely ceased operations of a department. Waterfront Cebu City Hotel vs. Ma. Melanie P. Jimenez, et al. G.R. No. 174214, June 13, 2012. Employee suit; damages. To obtain moral damages, the claimant must prove the existence of bad faith by clear and convincing evidence, for the law always presumes good faith. It is not even enough that one merely suffered sleepless nights, mental anguish and serious anxiety as the result of the actuations of the other party. In this case, Lazaro did not state any moral anguish that he suffered. Neither did he substantiate his imputations of malice to Banco Filipino. He only made a sweeping declaration, without concrete proof, that the bank in refusing his claim maliciously damaged his property rights and interest. Accordingly, neither moral damages nor exemplary damage can be awarded to him. With respect to attorneys fees, an award is proper only if that person was forced to litigate and incur expenses to protect ones rights and interest by reason of an unjustified act or omission of the party for whom it is sought. Banco Filipino had a prima facie legitimate defense that, because it underwent liquidation proceedings, it cannot be compelled to credit that period in the computation of the employees the retirement pay and profit shares. Considering that Banco Filipinos refusal cannot be accurately characterized as unjustified, Lazaro cannot claim an award of attorneys fees.Banco Filipino Savings and Mortgage Bank vs. Miguelito M. Lazaro/Miguelito M. Lazaro vs. Banco Filipino Savings and Mortgage Bank, et al. G.R. No. 185346 & G.R. No. 185442. June 27, 2012. Dismissal; liability of officers if termination is attended with bad faith. In labor cases, the corporate directors and officers are solidarily liable with the corporation for the termination of employment of employees done with malice or in bad faith. Indeed, moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy. The term bad faith contemplates a state of mind affirmatively

operating with furtive design or with some motive of selfinterest or will or for ulterior purpose. The Supreme Court agreed with the ruling of both the NLRC and the Court of Appeals when they pronounced that there was no evidence on record that indicates commission of bad faith on the part of De Borja, the general manager of Lynvil, who was tasked with the supervision of the employees and the operation of the business. There is no proof that he imposed on Ariola, et al. the por viaje provision for purpose of effecting their summary dismissal. Lynvil Fishing Enterprises, Inc. vs. Andres G. Ariola, et al., G.R. No. 181974, February 1, 2012.