Katrina Evangelista Cario

Case Doctrine:
The employer cannot be compelled to continue in employment an employee
guilty of acts inimical to the interest of the employer and justifying loss of
confidence in him.
Article 292(b), of the Labor Code, as amended, requires the employer to
give the employee two written notices prior to his termination for just cause.
There is no lack of due process when the employee is given ample time to be
heard and refute the charges against him.
Title of the Case: PUNONGBAYAN AND ARAULLO (P&A), BENJAMIN R.
PUNONGBAYAN., JOSE G. ARAULLO, GREGORIO S. NAVARRO, ALFREDO V.
DAMIAN AND JESSIE C. CARPIO, Petitioners, v. ROBERTO PONCE
LEPON, Respondent.
G.R. No. 174115, dated November 09, 2015
Ponente: JARDELEZA, J.
Facts:
Roberto Ponce Lepon was the Manager in charge of Cebu operations and the
Director of the Visayas-Mindanao operations of Punongbayan & Araullo (a
professional accounting firm). In April 2002, there were negotiations of
possible merger between SGV and P&A. Lepon and some P&A employees
expressed their disapproval. Subsequently, P&A learned that Lepon (1) met
with P&A's clients and invited them to engage the services of Laya
Mananghaya-KPMG (LM-KPMG), a competing accounting firm, and (2)
attempted to pirate the entire staff of P&A's Cebu City Office and Davao City
Office.
P&A sent Lepon a letter requiring explanation and the respondent replied,
denying the allegations. In June 2002, Lepon was terminated on the ground
of loss of trust and confidence. On June 14, 2002, respondent filed a
complaint for illegal suspension and illegal dismissal, and for payment of
13th month pay, service incentive leave, allowances, separation pay,
retirement benefits, moral damages, and exemplary damages against P&A
and its partners with the Regional Arbitration Branch No. VII of the National
Labor Relations Commission (NLRC) in Cebu City.

Labor Arbiter dismissed the petition for lack of merit, which was affirmed by
the NLRC. The Court of Appeals found the petition meritorious. It reviewed
the factual findings of the NLRC, and it ruled that petitioners illegally
suspended and dismissed respondent from employment. It further ruled that
the responded was denied due process.
Issues:
Based on petitioners' allegations of errors, the issues for resolution before
this Court are:
1. Whether the factual findings of both the NLRC and the Labor
Arbiter were supported by substantial evidence;
2. Whether respondent was deprived of his right to due process;
and
3. Whether the petitioners are jointly and severally liable with
P&A to pay the judgment award.
Held:
I.

The factual findings of the NLRC and the Labor Arbiter were
supported by substantial evidence.

The affidavits executed by the affiants constitute as substantial evidence and

sufficient basis to prove that respondent committed acts breaching the trust
and confidence reposed on him by P&A. In fact, respondent never
questioned the evidentiary value of the affidavits at any stage of the
proceedings.
While the right of an employer to freely select or discharge his employees is
subject to regulation by the State in the exercise of its paramount police
power, there is also an equally established principle that an employer cannot
be compelled to continue in employment an employee guilty of acts inimical
to the interest of the employer and justifying loss of confidence in him.
In Bristol Myers Squibb (Phils.), Inc. v. Baban, this Court explained that the
following requisites must be satisfied to justify a valid dismissal based on
loss of trust and confidence, to wit:
(1) The employee concerned must be one holding a position of
trust and confidence; and
(2) There must be an act that would justify the loss of trust and
confidence.

These two requisites are present in this case.

Lepon is the Manager-in-Charge of the Cebu operations and the Director of
the Visayas-Mindanao operations of P&A which is the highest ranking officer
of P&A's Visayas-Mindanao operations, demanded utmost trust and
confidence.
Respondent breached the trust reposed in him by committing the following
acts: (1) negotiating to transfer to a competing firm while still employed
with P&A; (2) enjoining a number of P&A's clients to transfer their audit
business to a competing firm; (3) inviting P&A's staff to join him in his
transfer to a competing firm; and (4) enjoining P&A's staff to engage in a
sympathy strike during his preventive suspension.
II.

Respondent was not deprived of due process

Article 292(b), of the Labor Code, as amended, in relation to the then

applicable Section 2(d), Rule I of the Implementing Rules of Book VI of the
Labor Code, as amended by Department Order No. 10, series of 1997,
requires the employer to give the employee two written notices prior to his
termination for just cause. P&A complied with the two notices: the first one
is the May 30, 2002 requiring explanation from Lepon; and the second is the
June 17, 2002 notice of termination.
Despite the lack of formal hearing or investigation, respondent was given
ample opportunity to be heard. He was given the opportunity to refute the
charges against him. In fact, his reply dated June 6, 2002 thoroughly
discussed his justifications and defenses to the accusations imputed on
him. He cannot argue that the absence of a formal hearing or investigation,
despite his denial to the accusations, constituted a defect on his dismissal
from employment.
In view of the foregoing, respondent's dismissal from employment is valid.
Thus, respondent's monetary claims against P&A and petitioners have no
legal and factual basis.
Case Doctrine:
The Court is not unmindful of the rule in labor cases that the employer has
the burden of proving that the termination was for a valid or authorized
cause. However, it is likewise incumbent upon the employees that they
should first establish by competent evidence the fact of their dismissal from

employment. As an allegation is not evidence, it is elementary that a party

alleging a critical fact must support his allegation with substantial evidence.
It was also stressed that the evidence to prove the fact of dismissal must be
clear, positive and convincing.
In the absence of any showing of an overt or positive act proving that
petitioner had dismissed respondents, the latters claim of illegal dismissal
cannot be sustained as the same would be self-serving, conjectural and of
no probative value.
Title of the Case: TRI-C GENERAL SERVICES, Petitioner, v. NOLASCO B. MATUTO,
ROMEO E. MAGNO AND ELVIRA B. LAVIA, Respondents.
G.R. No. 194686, dated September 23, 2015
Ponente: PERALTA, J.
Facts:
Respondents Nolasco Matuto, Romeo E. Magno and Elvira B. Lavia were
hired by petitioner Tri-C General Services as janitors/janitress assigned at
the PLDT Business Office in Calamba City. They alleged that in Nov. 3, 2004,
Matuto and Lavia were barred from their workplace while Magno was
denied entry in Nov. 26, 2004. Consequently, they filed a complaint for
illegal dismissal against petitioner.
In its defense, petitioner alleged that sometime in October 2004, PLDTLaguna informed it that it would implement cost-cutting measures and that it
would discontinue the services of respondents. It further claimed that it had
no other recourse but to temporarily put respondents on floating status
upon termination of the clients contract. It alleged that the complaint for
illegal dismissal was premature since the six-month legal period for placing
an employee on a floating status has not yet lapsed.
The Court of Appeals (CA) reversed the decision of the National Labor
Relations Commission (NLRC). It found that respondents were illegally
dismissed and ordered their reinstatement with full backwages from the date
of dismissal and awarded attorneys fees.
Issue:
Whether or not the Court of Appeals erred when it ruled that the
respondents were constructively dismissed.
Ruling:
The Supreme Court held that the Court of Appeals erred.

The Court is not unmindful of the rule in labor cases that the employer has
the burden of proving that the termination was for a valid or authorized
cause. However, it is likewise incumbent upon the employees that they
should first establish by competent evidence the fact of their dismissal from
employment. As an allegation is not evidence, it is elementary that a party
alleging a critical fact must support his allegation with substantial evidence.
It was also stressed that the evidence to prove the fact of dismissal must be
clear, positive and convincing. In the present case, the facts and the
evidence do not establish a prima facie case that respondents were
dismissed from employment. Aside from their mere assertion and joint
affidavit, respondents failed to adduce corroborative and competent
evidence to substantiate their conclusion that they were dismissed from
employment. Respondents did not even present the alleged notice of
termination of their employment. Therefore, in the absence of any showing
of an overt or positive act proving that petitioner had dismissed respondents,
the latters claim of illegal dismissal cannot be sustained as the same would
be self-serving, conjectural and of no probative value. The records are
devoid of any indication that they were barred from petitioners premises or
were otherwise deprived of any work assignment after the discontinuance of
their work in PLDT-Calamba. It was also not shown that respondents
reported or even tried to report to petitioners office and requested for
another work assignment after being dismissed from PLDT-Calamba. On the
contrary, the evidence presented by petitioner showed that they were
repeatedly summoned to report to its main office and did not even bother to
show despite several notices.
Moreover, the rule that the employer bears the burden of proof in illegal
dismissal cases finds no application in a case, like the present petition,
where the employer denied having dismissed the employees. Petitioner
alleged that the CA erred in ruling that respondents were entitled to
reinstatement, payment of backwages and other monetary benefits.
Petitioner believed that respondents are not entitled to the awards since they
were not illegally dismissed. Under Article 279 of the Labor Code and as
settled in jurisprudence, an employee who is dismissed without just cause
and without due process is entitled to backwages and reinstatement or
payment of separation pay in lieu thereof. While we agree with the rulings of
the LA and the NLRC that respondents were not illegally dismissed and not
guilty of abandonment, we do not agree with their decisions to dismiss the
case for lack of merit. Instead, we find that respondents are entitled to
reinstatement without payment of backwages and other monetary benefits.
Anent the issue on the award of attorneys fees, Article 111 of the Labor
Code provides that in cases of unlawful withholding of wages, the culpable
party may be assessed attorneys fees, equivalent to ten percent (10%) of

the amount of wages recovered. Likewise, we have recognized that in

actions for recovery of wages or where an employee was forced to litigate
and, thus, incur expenses to protect his rights and interest, the award of
attorneys fees is legally and morally justifiable. We have similarly so ruled
in RTG Construction, Inc., et at. v. Facto[13] in which we specifically stated:
xxx Settled is the rule that in actions for recovery of wages, or
where an employee was forced to litigate and, thus, incur
expenses to protect his rights and interests, a monetary award
by way of attorneys fees is justifiable under Article 111 of the
Labor Code; Section 8, Rule VIII, Book III of its Implementing
Rules; and paragraph 7, Article 2208 of the Civil Code. The
award of attorneys fees is proper, and there need, not be any
showing that the employer acted maliciously or in bad faith
when it withheld the wages. There need only be a showing that
the lawful wages were not paid accordingly.
In the present case, however, it was settled that respondents were not
illegally dismissed from employment and their wages were not withheld
without valid and legal basis. There/fore, they are not entitled to receive
attorneys fees.
As all circumstances surrounding the alleged termination are taken into
account, petitioner should accept respondents back and reinstate them to
their former positions. However, under the principle of no work, no pay,
there should be no payment of backwages. In a case where the employees
failure to work was occasioned neither by his abandonment nor by a
termination, the burden of economic loss is not rightfully shifted to the
employer; each party must bear his own loss.
Absent any showing that there is strained relationship between petitioner
and respondents, the order of reinstatement shall stand. The doctrine of
strained relations is not applied indiscriminately as to bar reinstatement,
especially when the employee has not indicated an aversion to returning to
work or does not occupy a position of trust and confidence in or has no say
in the operation of the employers business. In this case, there was no
evidence that respondents disliked returning to their former posts and that
they occupy a position of trust and confidence.