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22. G.R. No. 169434, March 28, 2008 | Dacut v. CA | QUISUMBING, J.

Facts: Petitioners Lazaro V. Dacut, Cesario G. Cajote, Romerlo F. Tungala, Lowel Z. Zubista, and
Orlando P. Taboy were crew members of the LCT "BASILISA", an inter-island cargo vessel owned by
private respondent Sta. Clara International Transport and Equipment Corporation.
On November 29, 1998, Dacut discovered a hole in the vessel's engine room. The company had the hole
patched up with a piece of iron and cement. Despite the repair, Dacut and Tungala resigned in July 1999
due to the vessel's alleged unseaworthiness.
On the other hand, Cajote went on leave from April 12-28, 1999 to undergo eye treatment. Since then, he
has incurred several unauthorized absences. Fearing that he will be charged as Absent Without Leave
(AWOL), Cajote resigned in June 1999.
On September 22, 1999, petitioners filed a complaint for constructive dismissal amounting to illegal
dismissal (except for Zubista and Taboy); underpayment of wages, special and regular holidays; nonpayment of rest days, sick and vacation leaves, night shift differentials, subsistence allowance, and fixed
overtime pay; actual, moral and exemplary damages; and litigation costs and attorney's fees.
Dacut and Tungala claimed that they resigned after Reynalyn G. Orlina, the secretary of the Personnel
Manager, told them that they will be paid their separation pay if they voluntarily resigned. They also
resigned because the vessel has become unseaworthy after the company refused to have it repaired
properly. Meanwhile, Cajote alleged that he resigned because the company hired a replacement while he
was still on leave. When he returned, the Operations Manager told him that he will be paid his separation
pay if he voluntarily resigned; otherwise, he would be charged for being AWOL. On the other hand,
Zubista claimed that his wage was below the minimum set by the Regional Tripartite Wages and
Productivity Board. Finally, petitioners alleged that they were not paid their rest days, sick and vacation
leaves, night shift differentials, subsistence allowance, and fixed overtime pay.
After the Labor Arbiter declared the case submitted for decision, the company filed its reply to petitioners'
position paper. It countered that Dacut and Tungala voluntarily resigned due to the vessel's alleged
unseaworthiness while Cajote resigned to avoid being charged as AWOL. It also claimed that petitioners'
monetary claims had no basis.
On August 2, 2000, the Labor Arbiter dismissed petitioners' complaint. The Labor Arbiter ruled that there
was sufficient evidence to prove that the vessel was seaworthy. The Labor Arbiter noted that except for
the holiday pay, accrued sick and vacation leaves, and wage differential, petitioners failed to substantiate
their monetary claims.

Petitioners appealed to the NLRC alleging that the Labor Arbiter erred: (1) in entertaining the company's
reply after the case had been submitted for decision; (2) in not finding that Dacut, Cajote and Tungala were
constructively dismissed; (3) in not finding that petitioners were entitled to their monetary claims; and (4) in
not finding that petitioners were entitled to actual, moral and exemplary damages as well as litigation costs
and attorney's fees. At this point, Dacut and Tungala further contended that they resigned because they
were being harassed by the company due to a complaint for violation of labor standards they had filed
On May 20, 2002, the NLRC affirmed the Labor Arbiter's decision.

Issues: WON petitioners voluntarily resigned from employment and WON they are entitled to money claims

Held: The fact that the Labor Arbiter admitted the company's reply after the case had been submitted for
decision did not make the proceedings before him irregular. Petitioners were given adequate opportunity in
the NLRC and the Court of Appeals to rebut the company's evidence against them.
A petition for review on certiorari shall only raise questions of law considering that the findings of fact of the

Court of Appeals are, as a general rule, conclusive upon and binding on this Court. This doctrine applies
with greater force in labor cases where the factual findings of the labor tribunals are affirmed by the Court
of Appeals. The reason is that labor officials are deemed to have acquired expertise in matters within their
jurisdiction and therefore, their factual findings are generally accorded not only respect but also finality.
Here, the Labor Arbiter, the NLRC, and the Court of Appeals were unanimous in finding that the primary
reason why Dacut and Tungala resigned was the vessel's alleged unseaworthiness as borne by their
pleadings before the Labor Arbiter. Dacut and Tungala never mentioned that they resigned because they
were being harassed by the company due to a complaint for violation of labor standards they had filed
against it. This ground was alleged only before the NLRC and not a single act or incident was cited to prove
this point. Even the alleged assurance by Orlina, that they would be given separation pay, served merely
as a secondary reason why they resigned. In fact, we doubt that such assurance was even made
considering that as secretary of the Personnel Manager, it was not shown under what authority Orlina acted
Likewise deserving scant consideration is Cajote's claim that the Operations Manager told him that he will
be paid separation pay if he resigned voluntarily; otherwise, he would be charged as AWOL. Although the
company already hired a replacement, Cajote admitted that he was still employed at the time he resigned.
In fact, the company tried to give him another assignment but he refused it. Thus, the only reason why
Cajote resigned was his long unauthorized absences which would have warranted his dismissal in any
We find no reason to disturb all these factual findings because they are amply supported by substantial
Apropos the monetary claims, there is insufficient evidence to prove petitioners' entitlement thereto. As
crew members, petitioners were required to stay on board the vessel by the very nature of their duties, and
it is for this reason that, in addition to their regular compensation, they are given free living quarters and
subsistence allowances when required to be on board. It could not have been the purpose of our law to
require their employers to give them overtime pay or night shift differential, even when they are not actually
working. Thus, the correct criterion in determining whether they are entitled to overtime pay or night shift
differential is not whether they were on board and cannot leave ship beyond the regular eight working hours
a day, but whether they actually rendered service in excess of said number of hours. In this case, petitioners
failed to submit sufficient proof that overtime and night shift work were actually performed to entitle them to
the corresponding pay. Petition is denied.


The petitioner had worked with Meralco from February 1989 until his dismissal from employment on
February 5, 2004. At the time of said dismissal, he was assigned at the Meralco Malabon Branch Office as
a Branch Field Representative tasked, among other things, to conduct surveys on service applications, test
electric meters, investigate consumer-applicants' records of Violations of Contract (VOC) and perform such
other duties and functions as may be required by his superior. The Inspection Office claimed discovering
shunting wires installed on the meter base for Service Identification Number (SIN) 708668501, registered
under petitioner Yabut's name. These wires allegedly allowed power transmission to the petitioner's
residence despite the fact that Meralco had earlier disconnected his electrical service due to his failure to
pay his electric bills. Meralco's Head of Investigation-Litigation Office issued to the petitioner a notice4
dated November 3, 2003, received by the petitioner's wife on the same day.
Yabut admitted being the registered customer of Meralco at No. 17 Earth Street, Meralco Village 8, Batia,
Bocaue, Bulacan. The petitioner claimed that his electrical service was disconnected sometime in July 2003
for unpaid electric bills. He confirmed that the inspected meter base was installed within his lot's premises.
Claiming that he had been obtaining electricity from a neighbor, he argued that shunting wires in his meter
base could have caused an electrical malfunction. As to Meralco's allegation that Yabut's wife had admitted
the petitioner's authorship of the illegal connection, Yabut denied knowing of such admission.

Yabut wife admitted that he were the one who installed the shunted wires on your meter base to have power
because she and his two children were sick. The illegal connection enabled you to defraud the company
by consuming unregistered electricity which makes him liable for violation of Section 7, par. 3 of the
Company Code on Employee Discipline, defined as (d)irectly or indirectly tampering with electric meters
or metering installations of the Company or the installation of any device, with the purpose of defrauding
the Company, penalized therein with dismissal from the service. Yabut filed with the National Labor
Relations Commission (NLRC) a complaint11 for illegal dismissal and money claims against Meralco and
Labor Arbiter Antonio R. Macam rendered his Decision, declaring the petitioner illegally dismissed from the
service and hence, entitled to reinstatement plus backwages and attorney's fees. NLRC rendered its
Resolution dismissing the herein respondents' appeal for lack of merit. CA rendered the now assailed
Decision reversing the rulings of the NLRC.
Whether or not the CA committed an error of law in annulling and setting aside the resolutions of the NLRC
that declared the herein petitioner illegally dismissed by the respondents.
The petitioner's violation of the company rules was evident. While he denies any involvement in the
installation of the shunting wires which Meralco discovered, it is significant that said SIN 708668501 is
registered under his name, and its meter base is situated within the premises of his property. Said meter
registered electric consumption during the time his electric service was officially disconnected by Meralco.
It was the petitioner and his family who could have benefited from the illegal connection, being the residents
of the area covered by the service. His claim that he failed to know or even notice the shunted wires fails
to persuade as we consider the meter located in the front of his house, the nature of his work as branch
field representative, his long-time employment with Meralco and his familiarity with illegal connections of
this kind.
It is reasonable that its commission is classified as a severe act of dishonesty, punishable by dismissal
even on its first commission, given the nature and gravity of the offense and the fact that it is a grave wrong
directed against their employer.
To reiterate, Article 282 (a) provides that an employer may terminate an employment because of an
employee's serious misconduct, a cause that was present in this case in view of the petitioner's violation of
his employer's code of conduct. Misconduct is defined as the transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent
and not mere error in judgment. For serious misconduct to justify dismissal, the following requisites must
be present: (a) it must be serious; (b) it must relate to the performance of the employee's duties; and (c) it
must show that the employee has become unfit to continue working for the employer. To consider the
petitioner's duties and powers as a Meralco employee. And we conclude that he committed a serious
misconduct. Installation of shunting wires is without doubt a serious wrong as it demonstrates an act that is
willful or deliberate, pursued solely to wrongfully obtain electric power through unlawful means. The act
clearly relates to the petitioner's performance of his duties given his position as branch field representative
who is equipped with knowledge on meter operations, and who has the duty to test electric meters and
handle customers' violations of contract. Instead of protecting the companys interest, the petitioner himself
used his knowledge to illegally obtain electric power from Meralco. His involvement in this incident deems
him no longer fit to continue performing his functions for respondent-company.
Loss of confidence as a just cause for termination of employment is premised from the fact that an employee
concerned holds a position of trust and confidence. This situation holds where a person is entrusted with
confidence on delicate matters, such as the custody, handling, or care and protection of the employer's
property. But, in order to constitute a just cause for dismissal, the act complained of must be work-related
such as would show the employee concerned to be unfit to continue working for the employer. Taking into
account the results of its investigations, Meralco cannot be expected to trust Yabut to properly perform his
functions and to meet the demands of his job. His dishonesty, involvement in theft and tampering of electric
meters clearly prejudice respondent Meralco, since he failed to perform the duties which he was expected
to perform.

., INC.,
Tanduays security guard called the attention of private respondent as to the fact that Mr. Villaruz was not
wearing an I.D. Card. Petitioner, then, assured the guard that he will secure a special permission from th
e management to warrant the orderly release of goods. Instead of complying with his compromise, he lent
his I.D. Card to Villaruz; and by reason of such misrepresentation , private respondent and Mr. Villaruz g
ot a clearance from Tanduay for the release of the goods. However, the security guard, who saw the misr
epresentation committed by private respondent and Mr. Villaruz, accosted them and reported the matter t
o the management of Tanduay. He was then dismissed.
Petitioner submits that his dismissal was a penalty too harsh and disproportionate to his supposed violatio
n; and that his dismissal was inappropriate due to the violation being his first infraction that was even com
mitted in good faith and without malice.
Rapid Movers argues, however, that the strict implementation of company rules and regulations should b
e accorded respect as a valid exercise of its management prerogative.
Whether or not an employer can dismiss an employee by virtue of its managerial prerogative considering
that it was established that the employees act did not constitute just cause provided by the Labor Code.
No. It is true that an employer is given wide latitude of discretion in managing its own affairs. The broad di
scretion includes the implementation of company rules and regulations and the imposition of disciplinary
measures on its employees. But the exercise of a management prerogative like this is not limitless, but he
mmed in by good faith and a due consideration of the rights of the worker. In this light, the management p
rerogative will be upheld for as long as it is not wielded as an implement to circumvent the laws and oppre
ss labor. The discipline exacted by the employer should further consider the employees length of service
and the number of infractions during his employment. The employer should never forget that always at st
ake in disciplining its employee are not only his position but also his livelihood, and that he may also have
a family entirely dependent on his earnings.
Furthermore, petitioner was not guilty of willful disobedience; hence, his dismissal was illegal. For willful di
sobedience to be a ground, it is required that: (a) the conduct of the employee must be willful or intentiona
l; and (b) the order the employee violated must have been reasonable, lawful, made known to the employ
ee, and must pertain to the duties that he had been engaged to discharge. Willfulness must be attended b
y a wrongful and perverse mental attitude rendering the employees act inconsistent with proper subordin
ation. It is implied that in every act of willful disobedience, the erring employee obtains undue advantage
detrimental to the business interest of the employer. In the case at bar, he neither benefitted from it, nor t
hereby prejudiced the business interest of Rapid Movers but was intended to benefit Rapid Movers.

26. G.R. No. 184116

June 19, 2013

According to Century Iron, Baas worked as an inventory comptroller whose duties are to: (1) train newly
hired warehouseman; (2) initiate analysis on the discrepancies concerning records and inventories; (3)
check and confirm warehousemans report; (4) check the accuracy of materials requisition before issuance
to the respective warehouseman at the jobsite; (5) monitor and maintain records; and (6) recommend and
initiate corrective or preventive action as may be warranted.
Sometime in 2002, Century Iron received letters of complaint from its gas suppliers regarding alleged
massive shortage of empty gas cylinders.
In the investigation that Century Iron conducted in response to the letters, it found that Baas failed to make
a report of the missing cylinders. On May 31, 2002, Century Iron issued a Memorandum requiring Baas
to attend a hearing regarding the missing cylinders.
On June 17, 2002, Century Iron, through Personnel Officer Mr. Virgilio T. Baaga, terminated Baas
services on grounds of loss of trust and confidence, and habitual and gross neglect of duty. The termination
was effective June 18, 2002.
In his defense, Baas alleged that he merely worked as an inventory clerk who is not responsible for the
lost cylinders. He pointed out that his tasks were limited to conducting periodic and yearly inventories, and
submitting his findings to the personnel officer. He maintained that unlike a supervisory employee, he was
not required to post a bond and he did not have the authority to receive and/or release cylinders in the way
that a warehouseman does. Therefore, he cannot be terminated on the ground of loss of confidence.
1. Does loss of confidence apply in this case?
2. Can Banas be dismissed based on his previous infractions?

1) No. Baas was a rank-and-file employee who was not charged with the care and custody of
Century Irons money or property. The evidence on record supports the holding that Baas was an
ordinary employee. There is no indication that the NLRCs decision was unfair or arbitrary. It
properly relied on Century Irons numerous memoranda where Baas was identified as an inventory
clerk. Since Baas did not occupy a position of trust and confidence nor was he routinely in charge
with the care and custody of Century Irons money or property, his termination on the ground of
loss of confidence was misplaced.
We point out in this respect that loss of confidence applies to: (1) employees occupying positions of trust
and confidence, the managerial employees; and (2) employees who are routinely charged with the care
and custody of the employers money or property which may include rank-and-file employees.
2) Yes, The evidence on record shows that Baas committed numerous infractions in his one year and
eleven-month stay in Century Iron. On October 27, 2000, Century Iron gave Baas a warning for failing to
check the right quantity of materials subject of his inventory.
On December 29, 2000, Baas went undertime. On January 2, 2001, Baas incurred an absence without
asking for prior leave. On August 11, 2001, he was warned for failure to implement proper warehousing
and housekeeping procedures. On August 21, 2001, he failed to ensure sufficient supplies of oxygenacetylene gases during business hours. On November 15, 2001, Baas was again warned for failing to
secure prior permission before going on leave. In May 2002, Century Irons accounting department found
out that Baas made double and wrong entries in his inventory. To our mind, such numerous infractions
are sufficient to hold him grossly and habitually negligent.
His repeated negligence is not tolerable. The totality of infractions or the number of violations he committed
during his employment merits his dismissal. Moreover, gross and habitual negligence includes
unauthorized absences and tardiness, as well as gross inefficiency, negligence and carelessness.

27. Rolando DS. Torres vs Rural Bank of San Juan, Inc., et al.
The petitioner, Rolando DS. Torres, was hired by the RBSJI as Personnel and Marketing Manager in 1991.
After 6 months probationary period and finding his performance to be satisfactory, RBSJI renewed his

employment to a permanent/regular status. In June 1996, the petitioner was offered the position of Vice
president for RBSJIs newly created department, Allied Business Ventures. He then accepted the offer and
relinquish his post. The vacancy created was filled by respondent Jobel who temporarily held the position
concurrently as the Corporate Planning and Human resources development head.
On September 24, 1996, the petitioner was temporarily assigned as the manager of RBSJIs N. Domingo
branch in view of the resignation of Jacinto Figueroa.
On September 27, 1996, Jacinto requested the petitioner to sign a standard employment clearance
pertaining to his accountabilities with RBSJI. When the petitioner declined his request, Jacinto threw a fit
and shouted foul invectives. To pacify him, the petitioner bargained to issue a clearance but only for
Jacintos paid cash advances and salary loan based on the receipts issued by the cashier, Lily Aguilar.
On April 17, 1997, respondent Jesus issued a memorandum to the petitioner requiring him to explain why
no administrative action should be imposed on him for his unauthorized issuance of a clearance to Jacinto
whose accountabilities were yet to be audited. Jacinto was later found to have unliquidated cash advances
and was responsible for a questionable transaction involving P11 M for which RBSJI is being sued by a
certain Actives Builders Manufacturing Corporation. The memorandum stressed that the clearance
petitioner issued effectively barred RBSJI from running after Jacinto
After conducting an investigation, RBSJIs Human Resources Department recommended the petitioners
termination from employment
On May 19, 1997, RBSJIs Board of Directors adopted the above recommendation and issued Resolution
No. 97-102 terminating the petitioner from employment, which was communicated to him in a memorandum
dated May 30, 1997.
In its decision dated November 27, 1998, the LA sustained the claim of the petitioner as against the factually
unsubstantiated allegation of loss of trust and confidence propounded by the respondents. Basing on the
petitioners selfless dedication to his job and efforts to achieve RBSJIs stability, which respondents failed
to dispute, negate any finding of bad faith on his part when he issued a clearance of accountabilities in
favor of Jacinto. The LA upheld the petitioners contentions that the loss of trust and confidence in him was
a mere afterthought to justify the respondents premeditated plan to ease him out of RBSJI.
On April 14, 2000, the NLRC disagreed with the LAs conclusion and opined that it was anchored on
irrelevant matters such as the petitioners performance and the preferential treatment given to the relatives
of RBSJIs stockholders. The NLRC held that the legality of the petitioners dismissal must be based on an
appreciation of the facts and the proof directly related to the offense charged, which NLRC found to have
weighed heavily in favor of the respondents. Thus the NLRC reversed and set aside the decision appealed
from. The petitioner sought reconsideration which was admitted by the NLRC.
The respondents filed a motion for reconsideration on the ground that the petitioner failed to present a copy
of his purported motion. Traversing both motions, the NLRC reversed its earlier ruling and reinstated the
LAs decision dated November 27, 1998.
The respondents sought recourse with the CA, which in its decision dated February 21, 2008 reversed and
set aside the NLRCs decision dated March 3, 2006 and ruled that the petitioner was dismissed for a just
cause. The petitioner moved for reconsideration but the motion was denied in the CA resolution dated June
3, 2008.
After the revaluation and review by the CA of its factual findings which was contradicting with the findings
of the labor tribunals the CA grants the petition and reversed and set aside its decision dated February 21,
2008 and the resolution dated June 3, 2008.
The decision of the Labor Arbiter dated November 27, 1998 was reinstated with some
The respondents failed to prove that the petitioner was dismissed for a just cause.
As provided in Article 282 of the Labor Code and as firmly entrenched in jurisprudence, an employer has
the right to dismiss an employee by reason of willful breach of the trust and confidence reposed in him.

The law mandates that before validity can be accorded to a dismissal premised on loss of trust and
confidence, two requisites must concur: (1) the employee concerned must be holding a position of trust;
and (2) the loss of trust must be based on willful breach of trust founded on clearly established facts.
The presence of the first requisite is thus certain. Anent the second requisite, the Court finds that the
respondents failed to meet their burden of proving that the petitioners dismissal was for a just cause.
The act alleged to have caused the loss of trust and confidence of the respondents in the petitioner was his
issuance, without prior authority and audit, of a clearance to Jacinto who turned out to be still liable for
unpaid cash advances and for a P11-million fraudulent transaction that exposed RBSJI to suit.
RBSJI also failed to substantiate its claim that the petitioners act estopped them from pursuing Jacinto for
his standing obligations. There is no proof that RBSJI attempted or at least considered to demand from
Jacinto the payment of his unpaid cash advances. Neither was RBSJI able to show that it filed a civil or
criminal suit against Jacinto to make him responsible for the alleged fraud. There is thus no factual basis
for RBSJIs allegation that it incurred damages or was financially prejudiced by the clearance issued by the
The petitioner was caught in the quandary of signing on the spot a standard employment clearance for the
furious Jacinto sans any information on his outstanding accountabilities, and refusing to so sign but risk
alarming or scandalizing RBSJI, its employees and clients. Contrary to the respondents allegation, the
petitioner did not concede to Jacintos demands. It was only after Lily confirmed Jacintos recorded
payments that the petitioner signed the clearance. The absence of an audit was precisely what impelled
the petitioner to decline signing a standard employment clearance to Jacinto and instead issue a different
one pertaining only to his paid accountabilities.
The Court has repeatedly emphasized that the act that breached the trust must be willful such that it was
done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently. The conditions under which the clearance was issued
exclude any finding of deliberate or conscious effort on the part of the petitioner to prejudice his employer.
The respondents cannot capitalize on the petitioners lack of authority to issue a clearance to resigned
First, it remains but an unsubstantiated allegation despite the several opportunities for them in the
proceedings below to show, through bank documents, that the petitioner is not among those officers so
Second, it is the Courts considered view that by virtue of the petitioners stature in respondent bank, it was
well-within his discretion to sign or certify the truthfulness of facts as they appear in RBSJIs records. Here,
the records of RBSJI cashier Lily clearly showed that Jacinto paid the cash advances and salary loan
covered by the clearance issued by the petitioner.
Lastly, the seven-month gap between the clearance incident and the April 17, 1997 memorandum asking
the petitioner to explain his action is too lengthy to be ignored. It likewise remains uncontroverted that during
such period, respondent Jesus verbally terminated the petitioner only to recall the same and instead ask
the latter to tender a resignation letter. When the petitioner refused, he was sent the memorandum
questioning his issuance of a clearance to Jacinto seven months earlier. The confluence of these
undisputed circumstances supports the inference that the clearance incident was a mere afterthought used
to gain ground for the petitioners dismissal.
The Decision of the Labor Arbiter dated November 27, 1998 is REINSTATED with the following
MODIFICATIONS/CLARIFICATIONS: Petitioner Rolando DS. Torres is entitled to the payment of: (a) back
wages reckoned from May 30, 1997 up to the finality of this Decision, with interest at six percent (6%) per
annum, and 12% legal interest thereafter until fully paid; and (b) in lieu of reinstatement, separation pay
equivalent to one (1) month salary for every year of service, with a fraction of at least six (6) months to be
considered as one (1) whole year, to be computed from the date of his employment up to the finality of this
The amounts awarded as moral damages, exemplary damages and 13th month pay are DELETED. Only
respondent Rural Bank of San Juan, Inc. is liable for the illegal dismissal and the consequential monetary
awards arising therefrom. The other portions of and monetary awards in the Labor Arbiter's Decision dated
November 27, 1998 are AFFIRMED.

28. Sampaguita Garments Corp. v NLRC

June 17, 1994
Emilia Santos tried to bring out of company premises, without permission, a piece of cloth belonging to her
employer, Sampaguita Garments Corp.
Sampaguita dismissed her because of this so she filed a complaint for illegal dismissal LA sustained the
NLRC however, reversed the LA and ordered her reinstatement with back wages.
Meantime, Sampaguita also filed a criminal action against Santos for the same offense.
MTC found her guilty of theft, which was affirmed by the RTC.
On appeal, Supreme Court, in separate decisions:
Affirmed the NLRC decision in the illegal dismissal case.
Affirmed the MTC decision in the criminal case for theft.
The decisions in both cases thus became final and executory and the corresponding entries of judgment
were eventually made.
Subsequently, Santos moved for the execution of the NLRC decision.
Sampaguita opposed, invoking her conviction in the criminal case.
NLRC sustained Santos on the ground that its decision, which was affirmed by the Supreme Court, had
long become final and executory.
WON the NLRC decision ordering Santos reinstatement should be enforced. NO
Sampaguita: In view of the private respondents conviction for theft, the decision of the NLRC
should not be enforced because to do so would in effect be rewarding Santos when she should
instead be punished for her offense.
Santos: The decision of the NLRC is independent of the criminal case and can no longer be
modified or reversed after having become final and executory.
Heirs of Francisco Guballa, Sr. vs. Court of Appeals: The power of the NLRC to issue a writ of execution
carries with it the right to look into the correctness of the execution of the decision and to consider
supervening events that may affect such execution.
In this case, NLRC should exercise its authority and suspend the writ of execution because Santos
conviction for theft is a supervening cause that rendered unjust and inequitable the NLRC decision.
The Solicitor Generals opinion that separation pay should be given to Santos in lieu of reinstatement, the
latter being no longer feasible in view of Santos subsequent conviction for theft and the already strained
relationship between her and Sampaguita, is untenable.
Award of separation pay is not justifiable because Santos was found guilty of a crime involving
moral turpitude and so is disqualified from this benefit.
PLDT v. NLRC: xxx Where the reason for the valid dismissal is, for example, habitual intoxication or an
offense involving moral turpitude, like theft xxx the employer may not be required to give the dismissed
employee separation pay, or financial assistance xxx on the ground of social justice. A contrary rule would,
as the petitioner correctly argues, have the effect of rewarding rather than punishing the erring employee
for his offense. xxx This kind of misplaced compassion is not going to do labor in general any good as it will
encourage the infiltration of its ranks by those who do not deserve the protection and concern of the
The same rationale exists for not enforcing the respondent NLRCs award of back wages.
However, while Santos conviction for theft removed the justification for the NLRC decision,
nevertheless, Sampaguita should still have accorded her an administrative investigation in
conformity with the procedural requirements of due process. Its failure to do so in this case renders it

liable to Santos for the sanction mentioned in Wenphil Corporation v. NLRC: The only award to which the
private respondent may be entitled is for the amount of P1,000.00, to be paid to her by the petitioner as a
penalty for effecting her dismissal without complying with the procedural requirements laid down in Sections
2 and 5 of Rule XIV, Book V, of the Omnibus Rules Implementing the Labor Code.

29. Sampaguita auto transport corp vs NLRC

Sampaguita Auto Transport Corporation was charged with illegal dismissal for allegedly firing Sagad when
he was, as he claimed, hired as a regular employee, not as a probationary employee as the company
Allegedly, sometime around September, an evaluator boarded Sagads bus. The evaluator described
Sagads manner of driving as "reckless driver, nakikipaggitgitan, nakikipaghabulan, nagsasakay sa gitna
ng kalsada, sumusubsob ang pasahero." Sagad he claimed that he could not have been driving as reported
because his pregnant wife and one of his children were with him on the bus. He admitted though that at
one time, he chased a bus to serve warning on its driver not to block his bus when he was overtaking. He
also admitted that once in a while, he sped up to make up for lost time in making trips. The company further
alleged it conducted a an evaluation of Sagads performance. It requested conductors who had worked with
Sagad to comment on his work. Conductors revealed that Sagad proposed that they cheat on the company
by way of an unreported early bus trip. Dispatcher E. Castillo likewise submitted a negative report and even
recommended the termination of Sagads employment. The company also cited Sagads involvement in a
hit-and-run accident. Allegedly, Sagad did not report the accident to the company.
Upon conclusion of the evaluation, the company terminated Sagads employment for his failure to qualify
as a regular employee.
1. Whether Sampaguita Auto Transport Corp. dismissed Sagad illegally; and
2. Whether he is entitled to backwages and separation pay, totaling P604, 050.00, after working with
the company for barely five months.
(1) No. The SC ruled that Sagad was not dismissed without basis.
During his brief employment with the company, he exhibited the tendency to speed up when he finds the
need for it, very obviously in violation of traffic rules, regulations and company policy. Instead of negating
the evaluators observations, his admissions make them credible. Also, the SC find no evidence that
Hemoroz and Lucero had an ax to grind against Sagad so that they would lie about their impression of him
as a bus driver. Significantly, their statements validate Castillos own observation that he heard talks of
Sagads orders to the conductors for them to cheat on the company. The scheme, contrary to Sagads
explanation, can only be committed with the cooperation, or even at the behest, of the driver, as the
proposed scheme is for the bus to make unscheduled, but unreported, early trips.
The company cites Sagads involvement in a hit-and-run incident. The Traffic Accident Investigation
Report45 is evidence to such incident. The report was corroborated by the sworn statements of driver of
the Elf truck, UFF-597, the second party in the incident, and the driver of the White Honda City, the first
party in the vehicular accident.
Also, the CA misappreciated the law when it declared that the grounds relied upon by the company in
terminating Sagads employment are not among those enumerated under Article 282 of the Labor Code as
just causes for employee dismissals. Article 282 of the Code provides:
Art. 282. Termination by employer. An employer may terminate an employment for any of the following
(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
(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.

The irregularities or infractions committed by Sagad in connection with his work as a bus driver constitute
a serious misconduct or, at the very least, conduct analogous to serious misconduct, under the above-cited
Article 282 of the Labor Code. To be sure, his tendency to speed up during his trips, his reckless driving,
his picking up passengers in the middle of the road, his racing with other buses and his jostling for vantage
positions do not speak well of him as a bus driver.
Under the circumstances, Sagad has become a liability rather than an asset to his employer, more so when
we consider that he attempted to cheat on the company or could have, in fact, defrauded the company
during his brief tenure as a bus driver. This calls to mind Castillos report on the low revenue of Sagads
bus, an observation which is validated by the companys Daily Operation Reports from June to October
All told, we find substantial evidence supporting Sagads removal as a bus driver. Through his reckless
driving and his schemes to defraud the company, Sagad committed serious misconduct and breach of the
trust and confidence of his employer, which, without doubt, are just causes for his separation from the
service. It is well to stress, at this point, an earlier pronouncement of the Court "that justice is in every
case for the deserving, to be dispensed in the light of the established facts and applicable law and
(2) No. Even as we find a just cause for Sagads dismissal, we agree with the CA that the company failed
to comply with the two-notice rule. It failed to serve notice of: (1) the particular acts for which Sagad was
being dismissed on November 5, 2006 and (2) his actual dismissal. Consistent with our ruling in Agabon v.
NLRC, 52 we hold that the violation of Sagad's right to procedural due process entitles him to an indemnity
in the form of nominal damages. Considering the circumstances in the present case, we deem it appropriate
to award Sagad P30,000.00.

30. Tan Brothers Corporation of Basilan City and Mauro F. Tan vs. Edna R.
G.R. No. 188711, July 3, 2013
Respondent was hired as bookkeeper by petitioners. On September 1, 2004, respondent filed
against petitioners
a complaint
for illegal
dismissal, underpayment
of wages, cost
of living
allowance and 13thmonth pay. In support of the complaint, respondent alleged in her position paper that,
starting July 2003, her monthly salary of P2,500.00 was not paid on time by petitioners. After having the
corporations office remodeled in the early part of 2004, petitioners allegedly rented out the office space
respondent used to occupy and ceased giving her further assignments. Eventually constrained to stop
reporting for work because of her dire financial condition, respondent claimed that petitioners shrewdly
maneuvered her illegal dismissal from employment. In its position paper, on the other hand, petitioners
averred that respondent was paid a daily wage of P155.00, and she abandoned her employment when she
stopped reporting for work in July 2003. Aside from taking with her most of the corporations payrolls,
vouchers and other material documents evidencing due payment of wages and labor standard benefits,
petitioners maintained that, without its knowledge and consent, respondent appropriated for herself an
Olivetti typewriter worth P15,000.00. With respondents refusal to heed its demands for the return of the
typewriter, petitioners asseverated that it was left with no choice but to lodge a complaint with the barangay
authorities. The LA rendered a decision, finding petitioners guilty of constructively dismissing respondent
from employment. On appeal, the Labor Arbiters decision was affirmed in toto.
Was respondent constructively dismissed?
Yes. Constructive dismissal occurs when there is cessation of work because continued employment is
rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or
when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee
leaving the latter with no other option but to quit

(The University of Immaculate Conception v. NLRC, G.R. No. 181146, January 26, 2011). The test is
whether a reasonable person in the employee's position would have felt compelled to give up his position
under the circumstances
(Philippine Veterans Bank v. NLRC, G.R. No. 188882, March 30, 2010). Much
though petitioners may now be inclined to disparage the same as mere alibis, the fact that respondent wa
s deprived of office space, was not given further work assignment and was not paid her salaries until she
was left with no choice but stop reporting for work all combine to make out a clear case of constructive


Petitioner Bienvenido R. Batongbacal, a lawyer who was admitted to the Bar in 1952, began his banking
career in 1961 as manager of the Second Rizal Development Bank and from them on he had worked to
several banking institutions and the last being the Associated Bank as assistant vice-president. on March
15, 1983, because of the banks financial loses and reverses, the bank's board of directors met and
approved a resolution stating that, the new management be given the necessary flexibility in streamlining
the operations of the Bank and for the purpose it is hereby resolved that the Bank officers at the Head
Office and the Branches with corporate rank of Manager and higher be required, as they hereby are required
to submit immediately to the President their courtesy resignations. But petitioner did not submit his courtesy
resignation. But nevertheless, he received a letter accepting his resignation. He asked for reconsideration
of his termination/resignation but it was denied so he filed for illegal dismissal before the NLRC.
The Labor Arbiter ruled in his favor ordering the respondent bank to reinstate petitioner and to pay salary
differentials. But NLRC reversed the decision of the Labor Arbiter.
Whether or not petitioner was illegally dismissed for courtesy resignation not really of his own.
The Court held, while it may be said that the private respondent's call for courtesy resignations was
prompted by its determination to survive, we cannot lend legality to the manner by which it pursued its goal.
By directing its employees to submit letters of courtesy resignation, the bank in effect forced upon its
employees an act which they themselves should voluntarily do. It should be emphasized that resignation
per se means voluntary relinquishment of a position or office. Adding the word "courtesy" did not change
the essence of resignation. That courtesy resignations were utilized in government reorganization did not
give private respondent the right to use it as well in its own reorganization and rehabilitation plan.
There is no guarantee that all employers will not use it to rid themselves arbitrarily of employees they do
not like, in the guise of "streamlining" its organization. On the other hand, employees would be unduly
exposed to outright termination of employment which is anathema to the constitutional mandate of security
of tenure. Petitioner's dismissal was effected through a letter "accepting" his resignation.
Private respondent rationalizes that this was done, even if petitioner did not actually submit such letter, so
as not to jeopardize his chances of future employment. But it is also clear from its pleadings that private
respondent terminated petitioner's employment for insubordination in view of his failure to comply with the
order to submit his letter of courtesy resignation.
We hold, however, that insubordination may not be imputed to one who refused to follow an unlawful order.
Private respondent asserts that petitioner's refusal to submit his letter of courtesy resignation was "sufficient
reason to distrust him." Loss of confidence as a ground for dismissal must be supported by satisfactory
evidence. Even with respect to managerial employees who, under Policy Instructions No. 8, may be
dismissed for lack of confidence, loss of trust must be substantiated and clearly proven. The record fails to
show any valid reasons for terminating the employment of petitioner. There are no proofs of malfeasance
or misfeasance committed by petitioner which jeopardized private respondents.

32. Elcee farms, inc vs. NLRC

33. Manila Electronic Co vs. NLRC


Petitioners were employees of the Philippine Veterans Bank (PVB). On June 15, 1985, their services
were terminated as a result of the liquidation of PVB. On the same day of their termination, petitioners
were rehired through PVB's Bank Liquidator.
All of them were required to sign employment contracts which provided that:
(1) The employment shall be strictly on a temporary basis and only for the duration of the particular
undertaking for which a particular employee is hired; (3) The Liquidator reserves the right to terminate the
services of the employee at any time during the period of such employment if the employee is found not
qualified, competent or, efficient in the performance of his job, or have violated any rules and regulations,
or such circumstances and conditions recognized by law.
January 18, 1991 their employment was terminated. The reasons for which were:
(a) to reduce costs and expenses in the liquidation of closed banks in order to protect the interests of the
depositors, creditors and stockholders of Bank.
(b) The employment were on strictly temporary basis.
Petitioners filed for illegal dismissal. Labor Arbiter found for employees. NLRC however reversed decision
1. WON NLRC gravely abused its discretion in holding that the employment contract entered into by the
complainants and the Liquidator of PVB was for a fixed-period
2. WON NLRC act with grave abuse of discretion in finding that there was no illegal dismissal
1. No, the employment contract between parties states that:
(1) The employment shall be on a strictly temporary basis and only for the duration of the particular
undertaking for which you are hired and only for the particular days during which actual work is available
as determined by the Liquidator or his representatives since the work requirements of the liquidation
process merely demand intermittent and temporary rendition of services."
The Court has repeatedly upheld the validity of fixed-term employment. Philippine National Oil CompanyEnergy Development Corporation vs. NLRC gave two guidelines by which fixed contracts of employment
can be said NOT to circumvent security of tenure:
1. 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;
2. It satisfactorily appears that the employer and employee dealt with each other on more or less equal
terms with no moral dominance whatever being exercised by the former on the latter."
The employment contract entered into by the parties herein appears to have observed the said
guidelines. Furthermore, it is evident from the records that the subsequent re-hiring of petitioners which
was to continue during the period of liquidation and the process of liquidation ended prior to the
enactment of RA 7169 entitled, "An Act to Rehabilitate Philippine Veterans Bank

2. Yes, the reason given by the Liquidator for the termination of petitioners' employment was "in line with
the need of the objective of the Supervision and Examination Sector, Department V, Central Bank of the
Philippines, to reduce costs and expenses in the liquidation of closed banks in order to protect the interest
of the depositors, creditors and stockholders
In cases of illegal dismissal, the burden is on the employer to prove that there was a valid ground for
dismissal. Mere allegation of reduction of costs without any proof to substantiate the same cannot be
given credence by the Court. As the respondents failed to rebut petitioners' evidence, the irresistible
conclusion is that the dismissal in question was illegal.
The failure of respondent bank to dispute complainants' evidence pertinent to the various unnecessary
and highly questionable expenses incurred renders the termination process as a mere subterfuge, as the
same was not on the basis as it purports to see, for reason that immediately after the termination from
their respective positions, the same were given to other employees who appear not qualified. What
respondent's counsel did was merely to dispute by pleadings the jurisdiction of this Office and the claims
for damages, which evidentiary matters respondent is required to prove to sustain the validity of such
As held by this Court, if the contract is for a fixed term and the employee is dismissed without just cause,
he is entitled to the payment of his salaries corresponding to the unexpired portion of the employment