G.R. No. 173489, February 25, 2013 2.
2. Rosita Tegons (Rosita) sworn statement that on May 23, 1997, she
ALILEM CREDIT COOPERATIVE, INC., NOW KNOWN AS
ALILEM MULTIPURPOSE COOPERATIVE, INC., PETITIONER, VS.
SALVADOR M. BANDIOLA, JR., RESPONDENTS.
DECISION
PERALTA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court
filed by petitioner Alilem Credit Cooperative, Inc. against respondent
Salvador M. Bandiola, Jr. assailing the Court of Appeals (CA) Decision[1]
dated January 16, 2006 and Resolution[2] dated July 5, 2006 in CA-G.R. SP
No. 64554.
The case stemmed from the following facts:
Respondent was employed by petitioner as bookkeeper. Petitioners Board of
Directors (the Board) received a letter from a certain Napoleon Gao-ay
(Napoleon) reporting the alleged immoral conduct and unbecoming behavior
of respondent by having an illicit relationship with Napoleons sister, Thelma
G. Palma (Thelma). This prompted the Board to conduct a preliminary
investigation.[3]
During the preliminary investigation, the Board received the following
evidence of respondents alleged extramarital affair:
1. Melanie Gao-ays (Melanie) sworn statement declaring that sometime
in December 1996, respondent slept on the same bed with Thelma in a
boarding house in San Fernando, La Union where she (Melanie) and
Thelma resided. She personally witnessed the intimacy of respondent
and Thelma when they engaged in lovemaking as they slept in one
room and openly displayed their affection for each other.[4]
saw Thelma talk to respondent in petitioners office asking him to
accompany her in San Fernando, La Union.[5]
3. Emma Gao-ay Lubrins (Emma, Thelmas sister) interview wherein
she admitted that she and her family confronted Thelma about the
alleged extramarital affair which Thelma allegedly admitted.[6]
4. Napoleons interview with the Board wherein he claimed that their
family tried to convince Thelma to end her extramarital affair with
respondent but instead of complying, she in fact lived together with
respondent.[7]
The Board decided to form an Ad Hoc Committee to investigate the charges
against respondent yielding the following additional evidence:
1. Agustina Boteras (Agustina) sworn statement that she witnessed a
confrontation between Thelma and her sister in the latters residence
concerning the alleged extramarital affair. At that time, respondents
wife was allegedly present who in fact pleaded Thelma to end her
relationship with respondent but she supposedly said No way![8]
2. Milagros Villacortes sworn statement that while she was at the
Bethany Hospital in San Fernando, La Union where her husband was
confined, respondent approached her and asked her to look for Thelma
who was then having her class. When he finally found her, respondent
and Thelma met and talked in the hospital premises.[9]
3. Julienne Marie L. Dalangeys certification that on August 9 to 10,
1996, respondent attended a seminar on Internal Control and Systems
Design I at the Northern Luzon Federation of Cooperatives and
Development Center (NORLU) Pension House in Baguio City,
together with a lady companion whom he introduced as his wife.
Apparently, the lady was not his wife because at that time, his wife
reported for work in the Municipal Hall of Alilem.[10]
Respondent, on the other hand, denied the accusation against him. He, instead,
claimed that the accusation was a result of the insecurity felt by some
members of the cooperative and of the Board because of his growing
popularity owing to his exemplary record as an employee.[11] Thelma executed
an affidavit likewise denying the allegations of extra-marital affair.[12]
Meanwhile, on June 7, 1997, the Board received a petition from about fifty
members of the cooperative asking the relief of respondent due to his illicit
affair with Thelma.[13]
In its Summary Investigation Report, the Ad Hoc Committee concluded that
respondent was involved in an extra-marital affair with Thelma. On July 10,
1997, the Chairman of the Board sent a letter[14] to respondent informing him
of the existence of a prima facie case against him for illicit marital affair, an
act that brings discredit to the cooperative organization and a cause for
termination per AMPC (Alilem Multi-Purpose Cooperative) Personnel
Policy. Respondent was directed to appear and be present at the AMPC office
for a hearing. He was likewise advised of his right to be assisted by counsel.
On the day of the hearing, respondent requested[15] for postponement on the
ground that his lawyer was not available. The request was, however, denied
and the hearing proceeded as scheduled.
In a Memorandum[16] dated July 16, 1997, respondent was informed of Board
Resolution No. 05, series of 1997[17] embodying the Boards decision to
terminate his services as bookkeeper of petitioner, effective July 31, 1997,
without any compensation or benefit except the unpaid balance of his regular
salary for services actually rendered.[18]
Aggrieved, respondent filed a Complaint for Illegal Dismissal against
petitioner before the Regional Arbitration Branch of the National Labor
Relations Commission (NLRC).[19]
On April 30, 1998, the Labor Arbiter (LA) dismissed[20] respondents
complaint for lack of merit. The LA concluded that respondent had been or
might still be carrying on an affair with a married woman. The LA found it
unforgiving in the case of a married employee who sleeps with or has illicit
relations with another married person for in such case, the employee sullies
not only the reputation of his spouse and his family but the reputation as well
of the spouse of his paramour and the latters family.[21] As opposed to
respondents claim that the accusation is a mere fabrication of some of the
directors or cooperative members who were allegedly envious of his growing
popularity, the LA gave more credence to the testimonies of petitioners
witnesses who were relatives of Thelma and who had no motive to falsely
testify because their family reputation was likewise at a risk of being
tarnished.[22] The LA, thus, found respondent to have been validly dismissed
from employment for violation of the cooperatives Personnel Policy,
specifically the commission of acts that bring discredit to the cooperative
organization, especially, but not limited to conviction of any crime, illicit
marital affairs, scandalous acts inimical to established and accepted social
mores. The LA also found no violation of respondents right to due process
as he was given ample opportunity to defend himself from the accusation
against him.[23]
On appeal, the NLRC set aside[24] the LA decision and rendered a judgment
disposed in this wise:
WHEREFORE, the appealed Decision of the Executive Labor Arbiter is SET
ASIDE. Judgment is hereby rendered:
1. declaring respondent Alilem Credit Cooperative, Inc. (ACCI) also
known as Alilem Multi-Purpose Cooperative (AMPC) guilty of illegal
dismissal for the reasons above-discussed;
2. directing the said respondent to pay complainant Salvador Bandiola,
Jr. full backwages computed from the time of (sic) his wages were
withheld until finality of this judgment;
 3. directing, on account of strained relationship between the parties, the
above-named respondent to pay complainant, in lieu of reinstatement,
separation pay computed at one (1) month pay for every year of
service, a fraction of six (6) months to be computed as one (1) whole
year; [and]
4. directing respondent to pay complainant ten (10%) percent attorneys
fees based on the total monetary award.
SO ORDERED.[25]
The NLRC found petitioners Personnel Policy to be of questionable existence
and validity because it was unnumbered.[26] It held that even assuming that
respondent had an extra-marital affair with a married woman, the latter is not
his fellow worker in petitioners business establishment.[27] It, thus, concluded
that respondents dismissal was not founded on any of the just causes for
termination of employment under Article 282 of the Labor Code, as
amended.[28] It, likewise, declared that respondent was not afforded his right to
his counsel of choice as his request for postponement was not allowed.[29]
Therefore, the NLRC declared respondents dismissal from employment
illegal, entitling him to the payment of backwages, separation pay, and
attorneys fees.[30]
Petitioner elevated the matter to the CA, but it failed to obtain a favorable
decision. The CA found respondents dismissal being founded on the serious
misconduct he allegedly committed by carrying an illicit relationship with a
married woman.[31] While considering said act a serious misconduct, it refused
to consider it sufficient to justify respondents dismissal, because it was not
done in the performance of his duties as would make him unfit to continue
working for petitioner.[32] Petitioners motion for reconsideration was likewise
denied in the assailed July 5, 2006 resolution.
Unsatisfied, petitioner now comes before the Court in this petition for review
on certiorari insisting on the validity of respondents dismissal from
employment.
We find merit in the petition.
It is undisputed that respondent was dismissed from employment for engaging
in extramarital affairs, a ground for termination of employment stated in
petitioners Personnel Policy. This basis of termination was made known to
respondent as early as the first communication made by petitioner. In its June
20, 1997 letter, petitioner directed respondent to explain in writing or personal
confrontation why he should not be terminated for violation of Section 4.1.4
of the Personnel Policy.[33] Respondent merely denied the accusation against
him[34] and did not question the basis of such termination. When the LA was
called upon to decide the illegal dismissal case, it ruled in favor of petitioner
and upheld the basis of such dismissal which is the cited Personnel Policy.
The NLRC, however, refused to recognize the existence and validity of
petitioners Personnel Policy on which the ground for termination was
embodied.[35]
The existence of the Personnel Policy containing provisions on the grounds
for termination of employees was not questioned by respondent. In his
position paper, respondent only assailed the effectivity of the policy, as for
him as it was amended on the same date as the letter-complaints against him.
In other words, he claimed that the policy was amended in order to include
therein the ground for his termination to make sure that he is removed from
his position.[36]
We do not subscribe to such an argument.
A comparison of petitioners old and new Personnel Policies attached by
respondent himself to his Position Paper shows that under the old policy, one
of the grounds for termination of an employee is commission of acts or
commission (sic) of duties that bring discredit to the organization,[37] while
under the new policy, one of the grounds is the commission of acts that
brings (sic) discredit to the cooperative organization, especially, but not
limited to, conviction of any crime, illicit marital affairs, scandalous acts
inimical to established and accepted social mores.[38] Contrary to
respondents claim, with the amendment of the Personnel Policy, petitioner
did not create a new ground for the termination of employment to make sure
that respondent is removed from his position. The quoted ground under the old
policy is similar to that provided for in the new policy. The enumeration
containing the specific act of illicit marital affairs is not an additional
ground, but an example of an act that brings discredit to the cooperative. It is
merely an interpretation of what petitioner considers as such. It is, thus, clear
from the foregoing that engaging in extra-marital affairs is a ground for
termination of employment not only under the new but even under the old
Personnel Policy of petitioner. The effectivity of the policy as to respondent
cannot, therefore, be questioned.
To be sure, an employer is free to regulate all aspects of employment.[39] It
may make reasonable rules and regulations for the government of its
employees which become part of the contract of employment provided they
are made known to the employee.[40] In the event of a violation, an employee
may be validly terminated from employment on the ground that an employer
cannot rationally be expected to retain the employment of a person whose lack
of morals, respect and loyalty to his employer, regard for his employers rules
and application of the dignity and responsibility, has so plainly and
completely been bared.[41]
Applying now the above-discussed ground for termination, we now determine
whether respondent was properly dismissed from employment. In other words,
did petitioner adequately prove that respondent indeed engaged in extra-
marital affairs, an act which petitioner considers as would bring discredit to
the cooperative?
We answer in the affirmative.
The employers evidence consists of sworn statements of either relatives or
friends of Thelma and respondent. They either had direct personal knowledge
of the illicit relationship or revealed circumstances indicating the existence of
such relationship. As aptly observed by the LA:
x x x Moreover, the credibility of the persons who bore witness against him
can hardly be questioned because some of these persons are relatives or
friends of either [respondent] or his lover. In particular, it is hard to see how
Napoleon Gao-ay, the brother of his lover, Thelma, could have resorted to a
lie just to destroy him when the same scandal could also result in tarnishing
the reputation of his own family. The motive of Napoleon in bringing the
matter to the attention of the Board of Directors, after all, was based on ethical
grounds he wanted a stop to the affair because it was a disgrace to the
community.
There is also no reason to doubt the statement of Melanie Gao-ay, the wife of
Napoleon, who witnessed the embarrassing encounter, to borrow the term
she used, between [respondent] and Thelma in her own boarding house.[42]
While respondents act of engaging in extra--marital affairs may be
considered personal to him and does not directly affect the performance of his
assigned task as bookkeeper, aside from the fact that the act was specifically
provided for by petitioners Personnel Policy as one of the grounds for
termination of employment, said act raised concerns to petitioner as the Board
received numerous complaints and petitions from the cooperative members
themselves asking for the removal of respondent because of his immoral
conduct.[43]
The next question is whether procedural due process was observed in the
termination of respondents services. Before the services of an employee can
be validly terminated, the employer must furnish him two written notices: (a)
a written notice served on the employee specifying the ground or grounds for
termination, and giving the employee reasonable opportunity to explain his dismissing respondent Salvador M. Bandiola, Jr.s complaint against
side; and (b) a written notice of termination served on the employee indicating petitioner Alilem Credit Cooperative, Inc., is REINSTATED.
that upon due consideration of all the circumstances, grounds have been
established to justify his termination.[44] The employer must inform the SO ORDERED.
employee of the charges against him and to hear his defenses. A full
adversarial proceeding is not necessary as the parties may be heard through
pleadings, written explanations, position papers, memorandum or oral
argument.[45]

In this case, respondent was adequately afforded the opportunity to defend

himself and explain the accusation against him. Upon receipt of the complaint,
petitioner conducted a preliminary investigation and even created an Ad Hoc
Committee to investigate the matter. Respondent was directed to explain
either in writing or by a personal confrontation with the Board why he should
not be terminated for engaging in illicit affair.[46] Not only did petitioner give
him the opportunity but respondent in fact informed petitioner that he opted to
present his side orally[47] and did so as promised when he specifically denied
such allegations before the AdHoc Committee.[48] Moreover, respondent was
also allowed to peruse the investigation report prepared by the Ad Hoc
Committee and was advised that he was entitled to assistance of counsel.[49]
Afterwhich, hearing was conducted. It was only after thorough investigation
and proper notice and hearing to respondent that petitioner decided whether to
dismiss the former or not. The decision to terminate respondent from
employment was embodied in Board Resolution No. 05, series of 1997 a copy
of which was furnished respondent.[50] With this resolution, respondent was
adequately notified of petitioners decision to remove him from his position.
Respondent cannot now claim that his right to due process was infringed
upon.

WHEREFORE, premises considered, the petition is hereby GRANTED. The

Court of Appeals Decision dated January 16, 2006 and Resolution dated July
5, 2006 in CA-G.R. SP No. 64554, are SET ASIDE. The Labor Arbiters
Decision dated April 30, 1998 in NLRC Case No. RAB-I-08-1144-97 (IS)
G.R. No. 194884, October 22, 2014
IMASEN PHILIPPINE MANUFACTURING CORPORATION,
PETITIONER, VS. RAMONCHITO T. ALCON AND JOANN S. PAPA,
RESPONDENTS.
DECISION
BRION, J.:
We resolve in this petition for review on certiorari[1] the challenge to he June
9, 2010 decision[2] and the December 22, 2010 resolution[3] of the Court of
Appeals (CA) in CA-G.R. SP No. 110327. This CA decision nullified the
December 24, 2008 decision[4] of the National Labor Relations Commission
(NLRC) in NLRC CA No. 043915-05 (NLRC CASE No. RAB IV-12-1661-
02-L). The NLRC ruling, in turn, affirmed the December 10, 2004 decision[5]
of the Labor Arbiter (LA), dismissing the illegal dismissal complaint filed by
respondents Ramonchito T. Alcon and Joann S. Papa (collectively referred to
as respondents).
The Factual Antecedents
Petitioner Imasen Philippine Manufacturing Corporation is a domestic
corporation engaged in the manufacture of auto seat-recliners and slide-
adjusters. It hired the respondents as manual welders in 2001.
On October 5, 2002, the respondents reported for work on the second shift -
from 8:00 pm to 5:00 am of the following day. At around 12:40 am, Cyrus A.
Altiche, Imasen's security guard on duty, went to patrol and inspect the
production plant's premises. When Altiche reached Imasen's Press Area, he
heard the sound of a running industrial fan. Intending to turn the fan off, he
followed the sound that led him to the plant's "Tool and Die" section.
At the "Tool and Die" section, Altiche saw the respondents having sexual
intercourse on the floor, using a piece of carton as mattress. Altiche
immediately went back to the guard house and relayed what he saw to Danilo
S. Ogana, another security guard on duty.
On Altiche's request, Ogana made a follow-up inspection. Ogana went to the
"Tool and Die" section and saw several employees, including the respondents,
already leaving the area. He noticed, however, that Alcon picked up the carton
that Altiche claimed the respondents used as mattress during their sexual act,
and returned it to the place where the cartons were kept. Altiche then
submitted a handwritten report[6] of the incident to Imasen's Finance and
Administration Manager.
On October 14, 2002, Imasen issued the respondents separate interoffice
memoranda[7] informing them of Altiche's report on the October 5, 2002
incident and directing them to submit their individual explanation. The
respondents complied with the directive; they claimed that they were merely
sleeping in the "Tool and Die" section at the time of the incident. They also
claimed that other employees were near the area, making the commission of
the act charged impossible.
On October 22, 2002, Imasen issued the respondents another interoffice
memorandum[8] directing them to appear at the formal hearing of the
administrative charge against them. The hearing was conducted on October
30, 2002,[9] presided by a mediator and attended by the representatives of
Imasen, the respondents, Altiche and Ogana. Altiche and Ogana reiterated the
narrations in Altiche's handwritten report.
On December 4, 2002, Imasen issued the respondents separate interoffice
memoranda[10] terminating their services. It found the respondents guilty of
the act charged which it considered as "gross misconduct contrary to the
existing policies, rules and regulations of the company."
On December 5, 2002, the respondents filed before the LA the complaint[11]
for illegal dismissal. The respondents maintained their version of the incident.

[12]
In the December 10, 2004 decision, the LA dismissed the respondents'
complaint for lack of merit. The LA found the respondents' dismissal valid,
i.e., for the just cause of gross misconduct and with due process. The LA gave
weight to Altiche's account of the incident, which Ogana corroborated, over
the respondents' mere denial of the incident and the unsubstantiated
explanation that other employees were present near the "Tool and Die"
section, making the sexual act impossible. The LA additionally pointed out
that the respondents did not show any ill motive or intent on the part; of
Altiche and Ogano sufficient to render their accounts of the incident
suspicious.
The NLRC"s ruling
[13]
In its December 24, 2008 decision, the NLRC dismissed the respondents'
appeal[14] for lack of merit. In affirming the LA's ruling, the NLRC declared
that Imasen substantially and convincingly proved just cause for dismissing
the respondents and complied with the required due process.
The respondents filed before the CA a petition for certiorari[15] after the
NLRC denied their motion for reconsideration[16] in its May 29, 2009
resolution.[17]
The CA's ruling
In its June 9, 2010 decision,[18] the CA nullified the NLRC's ruling. The CA
agreed with the labor tribunals' findings regarding the infraction charged -
engaging in sexual intercourse on October 5, 2002 inside company premises -
and Imasen's observance of due process in dismissing the respondents from
employment.
The CA, however, disagreed with the conclusion that the respondents' sexual
intercourse inside company premises constituted serious misconduct that the
Labor Code considers sufficient to justify the penalty of dismissal. The CA
pointed out that the respondents' act, while provoked by "reckless passion in
an inviting environment and time," was not done with wrongful intent or with
the grave or aggravated character that the law requires. To the CA, the penalty
of dismissal is not commensurate to the respondents' act, considering
especially that the respondents had not committed any infraction in the past.
Accordingly, the CA reduced the respondents' penalty to a three-month
suspension and ordered Imasen to: (1) reinstate the respondents to their former
position without loss of seniority rights and other privileges; and (2) pay the
respondents backwages from December 4, 2002 until actual reinstatement,
less the wages corresponding to the three-month suspension.
Imasen filed the present petition after the CA denied its motion for
reconsideration[19] in the CA's December 22, 2010 resolution.[20]
The Petition
Imasen argues in this petition that the act of engaging in sexual intercourse
inside company premises during work hours is serious misconduct by
whatever standard it is measured. According to Imasen, the respondents'
infraction is an affront to its core values and high ethical work standards, and
justifies the dismissal. When the CA reduced the penalty from dismissal to
three-month suspension, Imasen points out that the CA, in effect, substituted
its own judgment with its (Imasen's) own legally protected management
prerogative.
Lastly, Imasen questions the CA's award of backwages in the respondents'
favor. Imasen argues that the respondents would virtually gain from their
infraction as they would be paid eight years worth of wages without having
rendered any service; eight (8) years, in fact, far exceeds their actual period of
service prior to their dismissal.
The Case for the Respondents

The respondents argue in their comment[21] that the elements of serious
misconduct that justifies an employee's dismissal are absent in this case,
adopting thereby the CA's ruling. Hence, to the respondents, the CA correctly
reversed the NLRC's ruling; the CA, in deciding the case, took a wholistic
consideration of all the attendant facts, i.e., the time, the place, the persons
involved, and the surrounding circumstances before, during, and after the
sexual intercourse, and not merely the infraction committed.
The Issue
The sole issue for this Court's resolution is whether the respondents' infraction
engaging in sexual intercourse inside company premises during work hours
amounts to serious misconduct within the terms of Article 282 (now
Article 296) of the Labor Code justifying their dismissal.
The Court's Ruling
We GRANT the petition.
We find that the CA reversibly erred when it nullified the NLRC's decision for
grave abuse of discretion the NLRC's decision.
Preliminary considerations:
tenurial security vis-a-vis
management prerogative
The law and jurisprudence guarantee to every employee security of tenure.
This textual and the ensuing jurisprudential commitment to the cause and
welfare of the working class proceed from the social justice principles of the
Constitution that the Court zealously implements out of its concern for those
with less in life. Thus, the Court will not hesitate to strike down as invalid any
employer act that attempts to undermine workers' tenurial security. All these
the State undertakes under Article 279 (now Article 293)[22] of the Labor Code
which bar an employer from terminating the services of an employee, except
for just or authorized cause and upon observance of due process.
In protecting the rights of the workers, the law, however, does not authorize
the oppression or self-destruction of the employer.[23] The constitutional
commitment to the policy of social justice cannot be understood to mean that
every labor dispute shall automatically be decided in favor of labor.[24] The
constitutional and legal protection equally recognize the employer's right and
prerogative to manage its operation according to reasonable standards and
norms of fair play.
Accordingly, except as limited by special law, an employer is free to regulate,
according to his own judgment and discretion, all aspects of employment,
including hiring, work assignments, working methods, time, place and manner
of work, tools to be used, processes to be followed, supervision of workers,
working regulations, transfer of employees, worker supervision, layoff of
workers and the discipline, dismissal and recall of workers.[25] As a general
proposition, an employer has free reign over every aspect of its business,
including the dismissal of his employees as long as the exercise of its
management prerogative is done reasonably, in good faith, and in a manner
not otherwise intended to defeat or circumvent the rights of workers.
In these lights, the Court's task in the present petition is to balance the
conflicting rights of the respondents to security of tenure, on one hand, and of
Imasen to dismiss erring employees pursuant to the legitimate exercise of its
management prerogative, on the other.
Management's right to dismiss an
employee; serious misconduct as just
cause for the dismissal
The just causes for dismissing an employee are provided under Article 282[26]
(now Article 296)[27] of the Labor Code. Under Article 282(a), serious
misconduct by the employee justifies the employer in terminating his or her
employment.
Misconduct is defined as an improper or wrong conduct. It is a 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.[28] To constitute a valid cause for the dismissal within the text and
meaning of Article 282 of the Labor Code, the employee's misconduct must
be serious, i.e., of such grave and aggravated character and not merely
trivial or unimportant.[29]
Additionally, the misconduct must be related to the performance of the
employee's duties showing him to be unfit to continue working for the
employer.[30] Further, and equally important and required, the act or conduct
must have been performed with wrongful intent.[31]
To summarize, for misconduct or improper behavior to be a just cause for
dismissal, the following elements must concur: (a) the misconduct must be
serious; (b) it must relate to the performance of the employee's duties showing
that the employee has become unfit to continue working for the employer;[32]
and (c) it must have been performed with wrongful intent.
The respondents' infraction amounts to
serious misconduct within the terms of
Article 282 (now Article 296) of the
Labor Code justifying their dismissal
Dismissal situations (on the ground of serious misconduct) involving sexual
acts, particularly sexual intercourse committed by employees inside company
premises and during work hours, are not usual violations[33] and are not found
in abundance under jurisprudence. Thus, in resolving the present petition, we
are largely guided by the principles we discussed above, as applied to the
totality of the circumstances that surrounded the petitioners' dismissal.
In other words, we view the petitioners' act from the prism of the elements
that must concur for an act to constitute serious misconduct, analyzed and
understood within the context of the overall circumstances of the case. In
taking this approach, we are guided, too, by the jurisdictional limitations that a
Rule 45 review of the CA's Rule 65 decision in labor cases imposes on our
discretion.[34]
In addressing the situation that we are faced with in this petition, we
determine whether Imasen validly exercised its prerogative as employer to
dismiss the respondents-employees who, within company premises and during
work hours, engaged in sexual intercourse. As framed within our limited Rule
45 jurisdiction, the question that we ask is: whether the NLRC committed
grave abuse of discretion in finding that the respondents' act amounted to
what Article 282 of the Labor Code textually considers as serious misconduct
to warrant their dismissal.
After due consideration, we find the NLRC legally correct and well within its
jurisdiction when it affirmed the validity of the respondents' dismissal on the
ground of serious misconduct.
Sexual acts and intimacies between two consenting adults belong, as a
principled ideal, to the realm of purely private relations. Whether aroused by
lust or inflamed by sincere affection, sexual acts should be carried out at such
place, time and circumstance that, by the generally accepted norms of
conduct, will not offend public decency nor disturb the generally held or
accepted social morals. Under these parameters, sexual acts between two
consenting adults do not have a place in the work environment.
Indisputably, the respondents engaged in sexual intercourse inside company
premises and during work hours. These circumstances, by themselves, are
already punishable misconduct. Added to these considerations, however, is the
implication that the respondents did not only disregard company rules but Consequently, we reverse the CA's decision for its failure to recognize that no
flaunted their disregard in a manner that could reflect adversely on the status grave abuse of discretion attended the NLRC's decision to support the
of ethics and morality in the company. respondents' dismissal for serious misconduct.

Additionally, the respondents engaged in sexual intercourse in an area where
co-employees or other company personnel have ready and available access.
The respondents likewise committed their act at a time when the employees
were expected to be and had, in fact, been at their respective posts, and when
they themselves were supposed to be, as all other employees had in fact been,
working.
WHEREFORE, in light of these considerations, we hereby GRANT the
petition. We REVERSE the decision dated June 9, 2010 and the resolution
dated December 22, 2010 of the Court of Appeals in CA-G.R. SP No. 110327
and REINSTATE the decision dated December 24, 2008 of the National
Labor Relations Commission in NLRC CA No. 043915-05 (NLRC Case No.
RAB IV-12-1661-02-L).

Under these factual premises and in the context of legal parameters we SO ORDERED.
discussed, we cannot help but consider the respondents' misconduct to be of
grave and aggravated character so that the company was justified in imposing
the highest penalty available dismissal. Their infraction transgressed the
bounds of socially and morally accepted human public behavior, and at the
same time showed brazen disregard for the respect that their employer
expected of them as employees. By their misconduct, the respondents, in
effect, issued an open invitation for others to commit the same infraction, with
like disregard for their employer's rules, for the respect owed to their
employer, and for their co-employees' sensitivities. Taken together, these
considerations reveal a depraved disposition that the Court cannot but
consider as a valid cause for dismissal.

In ruling as we do now, we considered the balancing between the respondents'

tenurial rights and the petitioner's interests - the need to defend their
management prerogative and to maintain as well a high standard of ethics and
morality in the workplace. Unfortunately for the respondents, in this balancing
under the circumstances of the case, we have to rule against their tenurial
rights in favor of the employer's management rights.

All told, the respondents' misconduct, under the circumstances of this case,
fell within the terms of Article 282 (now Article 296) of the Labor Code.
G.R. No. L-49549, August 30, 1990
EVELYN CHUA-QUA, PETITIONER, VS. HON. JACOBO C. CLAVE,
IN HIS CAPACITY AS PRESIDENTIAL EXECUTIVE ASSISTANT,
AND TAY TUNG HIGH SCHOOL, INC., RESPONDENTS.
DECISION
REGALADO, J.:
This would have been just another illegal dismissal case were it not for the
controversial and unique situation that the marriage of herein petitioner, then a
classroom teacher, to her student who was fourteen (14) years her junior, was
considered by the school authorities as sufficient basis for terminating her
services.
Private respondent Tay Tung High School, Inc. is an educational institution in
Bacolod City. Petitioner had been employed therein as a teacher since 1963
and, in 1976 when this dispute arose, was the class adviser in the sixth grade
where one Bobby Qua was enrolled. Since it was the policy of the school to
extend remedial instructions to its students, Bobby Qua was imparted such
instructions in school by petitioner.[1] In the course thereof, the couple fell in
love and on December 24, 1975, they got married in a civil ceremony
solemnized in Iloilo City by Hon. Cornelio G. Lazaro, City Judge of Iloilo.[2]
Petitioner was then thirty (30) years of age but Bobby Qua, being sixteen (16)
years old, consent and advice to the marriage was given by his mother, Mrs.
Concepcion Ong.[3] Their marriage was ratified in accordance with the rites of
their religion in a church wedding solemnized by Fr. Nick Melicor at Bacolod
City on January 10, 1976.[4]
On February 4, 1976, private respondent filed with the sub-regional office of
the Department of Labor at Bacolod City an application for clearance to
terminate the employment of petitioner on the following ground: "For abusive
and unethical conduct unbecoming of a dignified school teacher and that her
continued employment is inimical to the best interest, and would downgrade
the high moral values, of the school." [5]
Petitioner was placed under suspension without pay on March 12, 1976.[6]
Executive Labor Arbiter Jose Y. Aguirre, Jr. of the National Labor Relations
Commission, Bacolod City, to whom the case was certified for resolution,
required the parties to submit their position papers and supporting evidence.
Affidavits[7] were submitted by private respondent to bolster its contention
that petitioner, "defying all standards of decency, recklessly took advantage of
her position as school teacher, lured a Grade VI boy under her advisory
section and 15 years her junior into an amorous relation."[8] More specifically,
private respondent raised issues on the fact that petitioner stayed alone with
Bobby Qua in the classroom after school hours when everybody had gone
home, with one door allegedly locked and the other slightly open.
On September 17, 1976, Executive Labor Arbiter Jose Y. Aguirre, Jr., without
conducting any formal hearing, rendered an "Award" in NLRC Case No. 956
in favor of private respondent granting the clearance to terminate the
employment of petitioner. It was held therein that
"The affidavits x x x although self-serving but were never disputed by the
respondent pointed out that before the marriage of respondent to Bobby Qua,
fourteen (14) years her junior and during her employment with petitioner, an
amorous relationship existed between them. In the absence of evidence to the
contrary, the undisputed written testimonies of several witnesses convincingly
picture the circumstances under which such amorous relationship was
manifested within the premises of the school, inside the classroom, and within
the sight of some employees. While no direct evidences have been introduced
to show that immoral acts were committed during these times, it is however
enough for a sane and credible mind to imagine and conclude what transpired
and took place during these times. x x x."[9]
Petitioner, however, denied having received any copy of the affidavits referred
to.[10]
On October 7, 1976, petitioner appealed to the National Labor Relations
Commission claiming denial of due process for not having been furnished
copies of the aforesaid affidavits relied on by the labor arbiter. She further
contended that there was nothing immoral, nor was it abusive and unethical
conduct unbecoming of a dignified school teacher, for a teacher to enter into
lawful wedlock with her student.[11]
On December 27, 1976, the National Labor Relations Commission
unanimously reversed the Labor Arbiter's decision and ordered petitioner's
reinstatement with backwages, with the following specific findings:
"Affiant Maselliones deposed and said that he saw appellant and Qua sitting
on the student desk inside a classroom after classes. The depositions of
affiants Despi and Chiu are of the same tenor. No statements whatever were
sworn by them that they were eyewitnesses to immoral or scandalous acts.
xxx
"Even if we have to strain our sense of moral values to accommodate the
conclusion of the Arbiter, we could not deduce anything immoral or
scandalous about a girl and a boy talking inside a room after classes with
lights on and with the door open.
xxx
"Petitioner-appellee naively insisted that the clearance application was
precipitated by immoral acts which did not lend dignity to the position of
appellant. Aside from such gratuitous assertions of immoral acts or conduct by
herein appellant, no evidence to support such claims was introduced by
petitioner-appellee. We reviewed the sequence of events from the beginning
of the relationship between appellant Evelyn Chua and Bobby Qua up to the
date of the filing of the present application for clearance in search of evidence
that could have proved detrimental to the image and dignity of the school but
none has come to our attention. x x x."[12]
The case was elevated by private respondent to the Minister of Labor who, on
March 30, 1977, reversed the decision of the National Labor Relations
Commission. The petitioner was, however, awarded six (6) months salary as
financial assistance.[13]
On May 20, 1977, petitioner appealed the said decision to the Office of the
President of the Philippines.[14] After the corresponding exchanges, on
September 1, 1978 said office, through Presidential Executive Assistant
Jacobo C. Clave, rendered its decision reversing the appealed decision. Private
respondent was ordered to reinstate petitioner to her former position without
loss of seniority rights and other privileges and with full back wages from the
time she was not allowed to work until the date of her actual reinstatement.[15]
Having run the gamut of three prior adjudications of the case with alternating
reversals, one would think that this decision of public respondent wrote finis
to petitioner's calvary. However, in a resolution dated December 6, 1978,
public respondent, acting on a motion for reconsideration[16] of herein private
respondent and despite opposition thereto,[17] reconsidered and modified the
aforesaid decision, this time giving due course to the application of Tay Tung
High School, Inc. to terminate the services of petitioner as classroom teacher
but giving her separation pay equivalent to her six (6) months salary.[18]
In thus reconsidering his earlier decision, public respondent reasoned out in
his manifestation/comment filed on August 14, 1979 in this Court in the
present case:
"That this Office did not limit itself to the legal issues involved in the case, but
went further to view the matter from the standpoint of policy which involves
the delicate task of rearing and educating of children whose interest must be
held paramount in the school community, and on this basis, this Office
deemed it wise to uphold the judgment and action of the school authorities in
terminating the services of a teacher whose actuations and behavior, in the
belief of the school authorities, had spawned ugly rumors that had cast serious
doubts on her integrity, a situation which was considered by them as not
healthy for a school campus, believing that a school teacher should at all times
act with utmost circumspection and conduct herself beyond reproach and
above suspicion;"[19]
In this petition for certiorari, petitioner relies on the following grounds for the
reversal of the aforesaid resolution of public respondent, viz.:
1. The dismissal or termination of petitioner's employment, despite Tay Tung's
claim to the contrary, was actually based on her marriage with her pupil and
is, therefore, illegal.
2. Petitioner's right to due process under the Constitution was violated when
the hearsay affidavits of Laddy Maselliones, Eleuterio Despi, Pina D. Chiu,
and Ong Lee Bing, were admitted and considered in evidence without
presenting the affiants as witnesses and affording the petitioner the right to
confront and cross-examine them.
3. No sufficient proofs were adduced to show that petitioner committed
serious misconduct or breached the trust reposed on her by her employer or
committed any of the other grounds enumerated in Article 283 (now Article
282) of the Labor Code which will justify the termination of her employment.
[20]
We first dispose of petitioner's claim that her right to due process was
violated. We do not agree. There is no denial of due process where a party was
afforded an opportunity to present his side. Also, the procedure by which
issues are resolved based on position papers, affidavits and other documentary
evidence is recognized as not violative of such right. Moreover, petitioner
could have insisted on a hearing to confront and cross-examine the affiants,
but she did not do so, obviously because she was convinced that the case
involves a question of law. Besides, said affidavits were also cited and
discussed by her in the proceedings before the Ministry of Labor.
Now, on the merits. Citing its upright intention to preserve the respect of the
community toward the teachers and to strengthen the educational system,
private respondent submits that petitioner's actuations as a teacher constitute
serious misconduct, if not an immoral act, a breach of trust and confidence
reposed upon her and, thus, a valid and just ground to terminate her services.
It argues that as a school teacher who exercises substitute parental authority
over her pupils inside the school campus, petitioner had moral ascendancy
over Bobby Qua and, therefore, she must not abuse such authority and respect
extended to her. Furthermore, it charged petitioner with having allegedly
violated the Code of Ethics for teachers the pertinent provision of which states
that a "school official or teacher should never take advantage of his/her
position to court a pupil or student."[21]
On the other hand, petitioner maintains that there was no ground to terminate
her services as there is nothing wrong with a teacher falling in love with her
pupil and, subsequently, contracting a lawful marriage with him. She argued
that she was dismissed because of her marriage with Bobby Qua. This
contention was sustained in the aforesaid decision of the National Labor
Relations Commission thus:
"x x x One thing, however, has not escaped our observation: That the
application for clearance was filed only after more than one month elapsed
from the date of appellant's marriage to Bobby Qua. Certainly, such belated
application for clearance weakens instead of strengthening the cause of
petitioner-appellee. The alleged immoral acts transpired before the marriage
and if it is these alleged undignified conduct that triggered the intended
separation, then why was the present application for clearance not filed at that
time when the alleged demoralizing effect was still fresh and abrasive?"[22]
After a painstaking perusal of the records, we are of the considered view that
the determination of the legality of the dismissal hinges on the issue of
whether or not there is substantial evidence to prove that the antecedent facts
which culminated in the marriage between petitioner and her student
constitute immorality and/or grave misconduct. To constitute immorality, the
circumstances of each particular case must be holistically considered and
evaluated in the light of prevailing norms of conduct and the applicable law.
Contrary to what petitioner had insisted on from the very start, what is before
us is a factual question, the resolution of which is better left to the trier of
facts.
Considering that there was no formal hearing conducted, we are constrained to
review the factual conclusions arrived at by public respondent, and to nullify
his decision through the extraordinary writ of certiorari if the same is tainted
by absence or excess of jurisdiction or grave abuse of discretion. The findings
of fact must be supported by substantial evidence; otherwise, this Court is not
bound thereby.[23]
We rule that public respondent acted with grave abuse of discretion. As
vividly and forcefully observed by him in his original decision:
"Indeed, the records relied upon by the Acting Secretary of Labor (actually the
records referred to are the affidavits attached as Annexes A' to 'D' of the
position paper dated August 10, 1976 filed by appellee at the arbitration
proceedings) in arriving at his decision are unbelievable and unworthy of
credit, leaving many questions unanswered by a rational mind. For one thing,
the affidavits refer to certain times of the day during off-school hours when
appellant and her student were found together in one of the classrooms of the
school. But the records of the case present a ready answer: appellant was
giving remedial instruction to her student and the school was the most
convenient place to serve the purpose. What is glaring in the affidavits is the
complete absence of specific immoral acts allegedly committed by appellant
and her student. For another, and very important at that, the alleged acts
complained of invariably happened from September to December, 1975, but
the disciplinary action imposed by appellee was sought only in February,
1976, and what is more, the affidavits were executed only in August, 1976 and
from all indications, were prepared by appellee or its counsel. The affidavits
heavily relied upon by appellee are clearly the product of after-thought. x x x
The action pursued by appellee in dismissing appellant over one month after
her marriage, allegedly based on immoral acts committed even much earlier,
is open to question. The basis of the action sought is seriously doubted; on the
contrary, we are more inclined to believe that appellee had certain selfish,
ulterior and undisclosed motives known only to itself."[24]
As earlier stated, from the outset even the labor arbiter conceded that there
was no direct evidence to show that immoral acts were committed.
Nonetheless, indulging in a patently unfair conjecture, he concluded that "it is
however enough for a sane and credible mind to imagine and conclude what
transpired during those times."[25] In reversing his decision, the National Labor
Relations Commission observed that the assertions of immoral acts or
conducts are gratuitous and that there is no direct evidence to support such
claim,[26] a finding which herein public respondent himself shared.
We are, therefore, at a loss as to how public respondent could adopt the volte-
face in the questioned resolution, which we hereby reject, despite his prior
trenchant observations hereinbefore quoted. What is revealing, however, is
that the reversal of his original decision is inexplicably based on
unsubstantiated surmises and non sequiturs which he incorporated in his
assailed resolution in this wise:
"x x x While admittedly, no one directly saw Evelyn Chua and Bobby Qua
doing immoral acts inside the classroom, it seems obvious and this Office is
convinced that such a happening indeed transpired within the solitude of the
classroom after regular class hours. The marriage between Evelyn Chua and
Bobby Qua is the best proof which confirms the suspicion that the two
indulged in amorous relations in that place during those times of the day. x x
x."[27]
With the finding that there is no substantial evidence of the imputed immoral
acts, it follows that the alleged violation of the Code of Ethics governing
school teachers would have no basis. Private respondent utterly failed to show
that petitioner took advantage of her position to court her student. If the two
eventually fell in love, despite the disparity in their ages and academic levels,
this only lends substance to the truism that the heart has reasons of its own
which reason does not know. But, definitely, yielding to this gentle and
universal emotion is not to be so casually equated with immorality. The
deviation of the circumstances of their marriage from the usual societal pattern
cannot be considered as a defiance of contemporary social mores.
It would seem quite obvious that the avowed policy of the school in rearing
and educating children is being unnecessarily bannered to justify the dismissal
of petitioner. This policy, however, is not at odds with and should not be
capitalized on to defeat the security of tenure granted by the Constitution to
labor. In termination cases, the burden of proving just and valid cause for
dismissing an employee rests on the employer and his failure to do so would
result in a finding that the dismissal is unjustified.
The charge against petitioner not having been substantiated, we declare her
dismissal as unwarranted and illegal. It being apparent, however, that the
relationship between petitioner and private respondent has been inevitably and
severely strained, we believe that it would neither be to the interest of the
parties nor would any prudent purpose be served by ordering her
reinstatement.
WHEREFORE, the petition for certiorari is GRANTED and the resolution
of public respondent, dated December 6, 1978 is ANNULLED and SET
ASIDE. Private respondent Tay Tung High School, Inc. is hereby ORDERED
to pay petitioner backwages equivalent to three (3) years, without any
deduction or qualification, and separation pay in the amount of one (1) month
for every year of service.
SO ORDERED.
G.R. No. 106341, September 02, 1994
DELFIN G. VILLARAMA, PETITIONER, VS. NATIONAL LABOR
RELATIONS COMMISSION AND GOLDEN DONUTS, INC.,
RESPONDENTS.
DECISION
PUNO, J.:
Sexual harassment abounds in all sick societies. It is reprehensible enough but
more so when inflicted by those with moral ascendancy over their victims. We
rule that it is a valid cause for separation from service.
First, the facts. On November 16, 1987, petitioner DELFIN VILLARAMA
was employed by private respondent GOLDEN DONUTS, INC., as its
Materials Manager. His starting salary was P6,500.00 per month, later
increased to P8,500.00.
On July 15 1989, petitioner Villarama was charged with sexual harassment by
Divina Gonzaga, a clerk-typist assigned in his department. The humiliating
experience compelled her to resign from work. Her letter-resignation, dated
July 15, 1989, reads:
"MR. LEOPOLDO H. PRIETO
President
Golden Donuts, Inc.
Dear Sir:
I would like to tender my resignation from my post as Clerk Typist of
Materials Department effective immediately.
It is really my regret to leave this company which has given me all the
opportunity I long desired. My five (5) months stay in the company have been
very gratifying professionally and financially and I would not entertain the
idea of resigning except for the most shocking experience I have had in my
whole life.
Last Friday, July 7, 1989, Mr. Delfin Villarama and Mr. Jess de Jesus invited
all the girls of Materials Department for a dinner when in (sic) the last minute
the other three (3) girls decided not to join the group anymore. I do (sic) not
have second thought(s) in accepting their invitation for they are my
colle(a)gues and I had nothing in mind that would in any manner prompt me
to refuse to what appeared to me as a simple and cordial invitation. We went
to a restaurant along Makati Avenue where we ate our dinner. Mr. Villarama,
Mr. Olaybar and Mr. Jess de Jesus were drinking while we were eating and
(they) even offered me a few drinks and when we were finished, they decided
to bring me home. While on my way, I found out that Mr. Villarama was
not driving the way to my house. I was wondering why we were taking the
wrong way until I found out that we were entering a motel. I was really
shock(ed). I did not expect that a somewhat reputable person like Mr.
Villarama could do such a thing to any of his subordinates. I should have
left the company without any word but I feel that I would be unfair to
those who might be similarly situated. I hope that you would find time to
investigate the veracity of my allegations and make each (sic) responsible for
his own deed. (emphasis ours)
Thank you very much and more power.
Very respectfully yours,
DIVINA GONZAGA"
The letter prompted Mr. Leopoldo Prieto, President of Golden Donuts, Inc., to
call petitioner to a meeting on August 4, 1989. Petitioner was then required to
explain the letter against him. It appears that petitioner agreed to tender his
resignation. Private respondent moved swiftly to separate petitioner. Thus,
private respondent approved petitioner's application for leave of absence with
pay from August 5-28, 1989. It also issued an inter-office memorandum, dated
August 4, 1989, advising "all concerned" that petitioner was no longer
connected with the company effective August 5, 1989.[1] Two (2) days later,
or on August 7, 1989, Mr. Prieto sent a letter to petitioner confirming their
agreement that petitioner would be officially separated from the private
respondent. The letter reads:
"Dear Mr. Villarama:
This is to officially confirm our discussion last Friday, August 4, 1989,
regarding your employment with us. As per our agreement, you will be
officially separated from the company effective August 23, 1989.
May I, therefore, request you to please submit or send us your resignation
letter on or before the close of business hours of August 22, 1989.
Please see the Personnel & Industrial Relations Office for your clearance.
Very truly yours,
(SGD). LEOPOLDO H. PRIETO, JR.
President"
In the interim, petitioner had a change of mind. In a letter dated August 16,
1989, petitioner sought reconsideration of the management's decision to
terminate him, viz:
"DEAR SIR:
MAY I REQUEST FOR A RECONSIDERATION ON THE DECISION
HANDED DURING OUR MEETING OF AUGUST 4, 1989,
TERMINATING MY SERVICES WITH THE COMPANY EFFECTIVE
AUGUST 5, 1989.
THE SIGNIFICANT CONTRIBUTION OF THE MATERIALS
DEPARTMENT, WHICH I HAD BEEN HEADING FOR THE PAST 21
MONTHS, TO THE PERFORMANCE OF THE COMPANY FAR
OUTWEIGHS THE ERROR THAT I HAD COMMITTED. AN ERROR
THAT MUST NOT BE A BASIS FOR SUCH A DRASTIC DECISION.
AS I AM STILL OFFICIALLY ON LEAVE UNTIL THE 29th, OF THIS
MONTH, MAY I EXPECT THAT I WILL RESUME MY REGULAR DUTY
ON THE 29th?
ANTICIPATING YOUR FAVORABLE REPLY.
VERY TRULY YOURS,
(SGD.) DELFIN G. VILLARAMA"
For his failure to tender his resignation, petitioner was dismissed by private
respondent on August 23, 1989. Feeling aggrieved, petitioner filed an illegal
dismissal case[2] against private respondent.
In a decision dated January 23, 1991, Labor Arbiter Salimar V. Nambi held
that due process was not observed in the dismissal of petitioner and there was
no valid cause for dismissal. Private respondent GOLDEN DONUTS, INC.
was ordered to: (1) reinstate petitioner DELFIN G. VILLARAMA to his
former position, without loss of seniority rights, and pay his backwages at the
rate of P8,500.00 per month from August 1989, until actual reinstatement; (2)
pay petitioner the amount of P24,866.66, representing his unused vacation
leave and proportionate 13th month pay; (3) pay petitioner P100,000.00, as
moral damages, and P20,000.00, as exemplary damages; and (3) pay the
attorney's fees equivalent to ten percent of the entire monetary award.
Private respondent appealed to the National Labor Relations Commission. On
July 16, 1992, public respondent reversed the decision of the labor arbiter. The
dispositive portion of its Resolution reads:
"WHEREFORE, premises considered, the decision appealed from is hereby
set aside and a new one entered declaring the cause of dismissal of
complainant as valid; however, for the procedural lapses, respondent (Golden
Donuts, Inc.) is hereby ordered to indemnify complainant (petitioner) in the
form of separation pay equivalent to two month's (sic) pay (for his two years
of service, as appears (sic) in the records), or the amount of P17,000.00.
"SO ORDERED."
Hence, this petition where the following arguments are raised:
THE ALLEGED IMMORALITY CHARGED AGAINST PETITIONER IS
NOT SUPPORTED BY SUBSTANTIAL EVIDENCE ON RECORD.
THE MERE ADMISSION OF THE VIOLATION OF DUE PROCESS
ENTITLES PETITIONER TO REINSTATEMENT.
IN ANY EVENT, PETITIONER IS ENTITLED TO HIS SALARIES FROM
RECEIPT BY PRIVATE RESPONDENT OF THE DECISION OF THE
LABOR ARBITER ON 4 FEBRUARY 1991 TO (sic) AT LEAST THE
PROMULGATION OF THE ASSAILED RESOLUTION ON (sic) 16 JULY
1992.
IN ANY EVENT, PETITIONER IS ALSO ENTITLED TO HIS UNUSED
VACATION LEAVE AND PROPORTIONATE 13TH MONTH PAY IN
THE TOTAL AMOUNT OF P24,866.66, ADJUDGED BY THE LABOR
ARBITER.
THE AWARD OF MORAL AND EXEMPLARY DAMAGES AND
ATTORNEY'S FEES BY THE LABOR ARBITER IS JUSTIFIED.
We affirm with modification the impugned Resolution.
At the outset, we note that the Petition was not accompanied by a certified true
copy of the assailed July 16, 1992 NLRC Resolution,[3] in violation of Revised
Circular No. 1-88. Neither was there any certification under oath that
"petitioner has not commenced any other action or proceeding involving the
same issues in the Supreme Court, the Court of Appeals or different Divisions
thereof, or any other tribunal or agency, and that to the best of his knowledge,
no such action or proceeding is pending in the Supreme Court, the Court of
Appeals, or different Divisions thereof or any other tribunal or agency," as
required under Circular No. 28-91. It is settled, that non-compliance with the
provisions of Revised Circular No. 1-88 and Circular No. 28-91, would result
in the outright dismissal of the petition.[4]
In addition, under Rule 65 of the Revised Rules of Court, the special civil
action for certiorari is available in cases where the concerned "tribunal, board
or officer exercising judicial functions had acted without or in excess of its
jurisdiction, or with grave abuse of discretion and there is no appeal, nor any
plain, speedy, and adequate remedy in the ordinary course of law." In
Antonio v. National Labor Relations Commission,[5] we held that the plain
and adequate remedy expressly provided by law is a motion for
reconsideration of the assailed decision, and the resolution thereof, which is
not only expected to be but would actually have provided adequate and more
speedy remedy than a petition for certiorari. The rationale for this
requirement is to enable the court or agency concerned to pass upon and
correct its mistakes without the intervention of a higher court.[6] In this case,
the assailed July 16, 1992 Resolution of the National Labor Relations
Commission was received by petitioner's counsel on July 23, 1992.[7]
Petitioner did not file a motion for reconsideration, instead, he commenced
this special civil action for certiorari. Be that as it may, we allowed the
petition to enable us to rule on the significant issues raised before us, viz: (1)
whether or not petitioner's right to procedural due process was violated, and
(2) whether or not he was dismissed for a valid or just cause.
The procedure for terminating an employee is found in Article 277 (b) of the
Labor Code, viz:
"x x x
"(b) Subject to the constitutional right of workers to security of tenure and
their right to be protected against dismissal except for a just and authorized
cause and without prejudice to the requirement of notice under Article 283 of
this Code the employer shall furnish the worker whose employment is sought
to be terminated a written notice containing a statement of the causes for
termination and shall afford the latter ample opportunity to be heard and
to defend himself with the assistance of his counsel if he so desires in
accordance with company rules and regulations promulgated pursuant to
guidelines set by the Department of Labor and Employment. Any decision
taken by the employer shall be without prejudice to the right of the worker to
contest the validity or legality of his dismissal by filing a complaint with the
regional branch of the National Labor Relations Commission. The burden of
proving that the termination was for a valid or authorized cause shall rest on
the employer. xxx" (emphasis supplied)
This procedure protects not only rank-and-file employees but also managerial
employees. Both have the right to security of tenure as provided for in Section
3, Article XIII of the 1987 Constitution. In the case at bench, petitioner
decided to seek reconsideration of the termination of his service thru his
August 16, 1989 letter. While admitting his error, he felt that its gravity did
not justify his dismissal. Considering this stance, and in conformity with the
aforequoted Article 277 (b) of the Labor Code, petitioner should have been
formally charged and given an opportunity to refute the charges. Under the
facts in field, we hold that petitioner was denied procedural due process.
We now come to the more important issue of whether there was valid cause to
terminate petitioner.
Petitioner claims that his alleged immoral act was unsubstantiated, hence, he
could not be dismissed. We hold otherwise. The records show that petitioner
was confronted with the charge against him. Initially, he voluntarily agreed to
be separated from the company. He took a leave of absence preparatory to his
separation. This agreement was confirmed by the letter to him by Mr. Prieto
dated August 7, 1989. A few days after, petitioner reneged on the agreement.
He refused to be terminated on the ground that the seriousness of his offense
would not warrant his separation from service. So he alleged in his letter to
Mr. Prieto dated August 16, 1989. But even in this letter, petitioner admitted
his "error" vis-a-vis Miss Gonzaga. As a manager, petitioner should know the
evidentiary value of his admissions. Needless to stress, he cannot complain
there was no valid cause for his separation.
Moreover, loss of trust and confidence is a good ground for dismissing a
managerial employee. It can be proved by substantial evidence which is
present in the case at bench. As further observed by the Solicitor General:
"x x x assuming arguendo that De Jesus and Gonzaga were sweethearts and
that petitioner merely acceded to the request of the former to drop them in the
motel, petitioner acted in collusion with the immoral designs of De Jesus and
did not give due regard to Gonzaga's feeling on the matter and acted in
chauvinistic disdain of her honor, thereby justifying public respondent's
finding of sexual harassment. Thus, petitioner not only failed to act
accordingly as a good father of the family because he was not able to maintain
his moral ascendancy and authority over the group in the matter of morality
and discipline of his subordinates, but he actively facilitated the commission
of immoral conduct of his subordinates by driving his car into the motel."
(Comment, April 29, 1993, p. 9)
As a managerial employee, petitioner is bound by a more exacting work
ethics. He failed to live up to this higher standard of responsibility when he
succumbed to his moral perversity. And when such moral perversity is
perpetrated against his subordinate, he provides a justifiable ground for his
dismissal for lack of trust and confidence. It is the right, nay, the duty of every
employer to protect its employees from over sexed superiors.
To be sure, employers are given wider latitude of discretion in terminating the
employment of managerial employees on the ground of lack of trust and
confidence.[8]
We next rule on the monetary awards due to petitioner. The public respondent
erred in awarding separation pay of P17,000.00 as indemnity for his dismissal
without due process of law. The award of separation pay is proper in the cases
enumerated under Articles 283 and 284 of the Labor Code,[9] and in cases
where there is illegal dismissal (for lack of valid cause) and reinstatement is
no longer feasible. But this is not to state that an employer cannot be penalized
for failure to give formal notice and conduct the necessary investigation
before dismissing an employee.[10] Thus, in Wenphil vs. NLRC[11] and Pacific
Mills, Inc. vs. Alonzo,[12] this Court awarded P1,000.00 as penalty for non--
observance of due process.
Petitioner is not also entitled to moral and exemplary damages. There was no
bad faith or malice on the part of private respondent in terminating the
services of petitioner.[13]
Petitioner is entitled, however, to his unused vacation/sick leave and
proportionate 13th month pay, as held by the labor arbiter. These are monies
already earned by petitioner and should be unaffected by his separation from
the service.
WHEREFORE, premises considered, the assailed resolution of public
respondent is hereby AFFIRMED WITH MODIFICATION that the award of
separation pay is DELETED. Private respondent is ordered to pay petitioner
the amount of P1,000.00 for non-observance of due process, and the
equivalent amount of his unused vacation/sick leave and proportionate 13th
month pay. No pronouncement as to costs.
SO ORDERED.
G.R. No. 74562, July 31, 1987
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY,
PETITIONER, VS. THE NATIONAL LABOR RELATIONS
COMMISSION AND LAZARO R. SANTOS, RESPONDENTS.
DECISION
PARAS, J.:
This is a petition for review on certiorari of the April 30, 1986 Decision of the
National Labor Relations Commission in Case No. NLRC-NCR-2-636-85
entitled Lazaro R. Santos v. Philippine Long Distance Telephone Company,
reversing the July 16, 1985 Decision of the Labor Arbiter by reinstating
Lazaro R. Santos with three (3) months back wages.
On March 28, 1983, herein private respondent was employed by the herein
petitioner as a Junior Telephone Installer with a monthly salary of P810.00
plus P350.00 monthly living allowance. His duties, among other things, were
to install and repair telephones.
On May 20, 1984, private respondent was assigned to repair telephone No. 50-
34-06 installed at 1639 Neptune Street, Fabie Estate, Paco, Manila, subscribed
by Mr. Remigio Perez. After inspecting the telephone wirings, respondent
allegedly told Mrs. Remedios Perez that it would take time to repair the
telephone since the defect involves cable replacement. When asked by Mrs.
Remedios Perez how the cable can be repaired, he answered that there are
personnel duly assigned to work on cables but expressed willingness to make
the repair himself provided he is paid P160.00 for cable replacement and
service charges. Unable to decide for herself, Mrs. Remedios Perez requested
respondent to come back the next day at 7:00 p.m., but as it was beyond
private respondent's office hours, the latter gave Mrs. Perez his telephone
number with the advice that he could be contacted between 12:00 p.m. to 1:00
p.m. and that such transaction should not be divulged to anybody because it is
confidential.
Subsequently, Mr. Remigio Perez sent a letter complaint dated May 24, 1984
to the petitioner denouncing respondent for demanding P160.00 from his
daughter-in-law, Mrs. Remedios Perez, for the immediate repair of their
telephone. This prompted the petitioner to dispatch Engineers Melanio Poce
and Fidel Paulino to conduct an on the spot inspection of telephone No. 50-
34-06 and it was ascertained that the real trouble was a slash on the portion of
the inside wire which was easily restored by connecting the jumper wire to the
terminal and by changing a portion of the inside wire.
Mrs. Remedios Perez appeared before petitioner's Quality Control and
Inspection Department (QCID) in the afternoon of May 24, 1984 and gave a
sworn statement pointing to the respondent as the person who demanded
P160.00 from her for cable replacement and service charge in connection with
the repair of telephone No. 50-34-06; and executed a "KATUNAYAN" dated
May 24, 1984 where she positively identified respondent as the person who
demanded P160.00 for repair of their telephone.
On May 29, 1984, a confrontation among private respondent, Mrs. Remedios
Perez, Mr. Reynaldo Perez and Mr. Rufino dela Cruz was conducted and
during the confrontation, Mr. and Mrs. Reynaldo Perez reiterated that
respondent demanded P160.00 for the repair of their telephone. Subsequently,
Mr. Nicanor Sacdalan, petitioner's OPSIM I Manager, sent a letter dated July
9, 1984 to respondent requiring the latter to explain within 72 hours from
receipt thereof why he should not be dismissed from the service for
demanding personal compensation for services rendered to the subscriber in
connection with his telephone. In reply thereto, respondent submitted a
written explantion dated July 13, 1984 denying the accusation against him.
However, petitioner having been convinced that respondent committed the
offense imputed against him, terminated the services of the latter effective
October 6, 1984. But three (3) weeks after petitioner had terminated the
services of respondent, Messrs. Remigio Perez and Reynaldo Perez, and Mrs.
Remedios Perez executed affidavits of retraction dated November 2, 1984,
November 12, 1984 and November 8, 1984, respectively.
On February 26, 1985, private respondent filed a complaint for illegal
dismissal against petitioner before the Arbitration Branch of the National
Labor Relations Commission, docketed therein as NLRC-NCR-2- 636-85
(Rollo, pp. 2-14).
In a Decision dated July 16, 1985, Labor Arbiter Bienvenido Hernandez
dismissed the complaint for lack of merit (Ibid., pp. 16-22). The dispositive
portion of the said Decision, reads:
"WHEREFORE, judgment is hereby rendered holding and adjudging
complainant's dismissal from the service of respondent legal and must be, as it
is hereby sustained. The dismissal of complainant should therefore receive
the seal of approval by this Office. The case is dismissed for lack of merit
with prejudice.
"SO ORDERED."
On appeal, the National Labor Relations Commission in a Decision dated
April 30, 1986, reversed the Labor Arbiter (Rollo, pp. 23-25). The dispositive
portion of which, reads:
"WHEREFORE, respondent is hereby directed to reinstate complainant
Lazaro R. Santos with three (3) months back wages within ten (10) days from
finality thereof.
"SO ORDERED."
Hence, the present petition (Ibid., pp. 2-14).
The Second Division of this Court, in a Resolution dated June 2, 1986,
resolved to require the respondents to comment; and to issue a temporary
restraining order (Ibid., p. 26).
In compliance with the above-said Resolution, private respondent filed his
Comment on June 20, 1986 (Ibid., pp. 32-34); while public respondent filed
its Comment on September 25, 1986 (Ibid., pp. 45-53).
Petitioner filed its Reply on November 24, 1986 (Rollo, pp. 58-63) in
compliance with the Resolution of October 15, 1986 (Ibid., p. 55).
The petition was given due course in the Resolution of February 9, 1987 and
the parties were required to file their respective memoranda (Ibid., p. 64).
On March 2, 1987, public respondent, through counsel, filed a Manifestation
and Motion praying that its Comment of September 19, 1987 be considered as
its memorandum (Ibid., pp. 67-68).
On March 6, 1987, private respondent filed his Memorandum (Ibid., pp. 69-
73) while petitioner filed its Memorandum on April 1, 1987 (Ibid., pp. 77-78).
The sole issue in this case is -
WHETHER OR NOT PRIVATE RESPONDENT WAS ILLEGALLY
DISMISSED FROM HIS EMPLOYMENT BY PETITIONER.
The instant petition is impressed with merit.
NLRC, in ordering the reinstatement of private respondent with three (3)
months back wages, relied solely on the affidavits of retraction of Mr.
Remigio Perez, Mr. Reynaldo Perez and Mrs. Remedios Perez, which were
executed nearly one (1) month after petitioner terminated private respondent's
services.
NLRC's pronouncement was to the effect that what transpired between private
respondent and Mr. and Mrs. Reynaldo Perez was a simple case of
misunderstanding; that the said spouses overly reacted by the frequent trouble
in their telephone line and the failure of private respondent to immediately
bring the same to its normal operation, so that, in view of the fact that the
charge was not true, private respondent's detractors executed the affidavits of
retraction. On the whole, NLRC found private respondent's discharge to be
wihtout a solid foundation.
After a careful review of the records, it appears more reasonable to believe
that the affidavits of retraction were, as claimed by petitioner, a mere
afterthought, executed out of compassion to enable private respondent to
extricate himself from the consequence of his malfeasance. As such, this
Court ruled in People v. Rojo, that said affidavits have no probative value
(114 SCRA 304, May 31, 1982).
More specifically, in the case of People v. Galicia (123 SCRA 556, July 25,
1983, citing the case of People v. Ubina, 97 Phil. 515), this Court in sustaining
the action of the lower court in brushing aside the affidavit of retraction
executed by complaining witness, ruled:
"x x x it would be a dangerous rule for courts to reject testimonies solemnly
taken before the courts of justice simply because the witnesses who had given
them later on changed their mind for one reason or another, for such a rule
would make solemn trials a mockery and place the investigation of truth at the
mercy of unscrupulous witnesses."
Accordingly, full faith and credit should have been given to the letter-
complaint of Mr. Remigio Perez, to the sworn statement of Mr. Reynaldo
Perez and Mrs. Remedios Perez, and the "KATUNAYAN" executed by Mrs.
Remedios Perez. Conversely, their affidavits of retraction should have been
disregarded.
The other pronouncement of public respondent that private respondent's
dismissal from his employment was effected without petitioner complying
with the provisions of Sections 1, 2 and 5 of Rule XIV of the Rules implemen-
ting Batas Pambansa Blg. 130, is likewise devoid of merit. Said Rule
provides:
"SEC. 1. Security of tenure and due process. - No worker shall be dismissed
except for a just or authorized cause provided by law and after due process.
"Sec. 2. Notice of Dismissal. - Any employer who seeks to dismiss a worker
shall furnish him a written notice stating the particular acts or omission
constituting the grounds for his dismissal. In case of abandonment of work,
the notice shall be served at the worker's last known address.
xxx xxx xxx.
"Sec. 5. Answer and hearing. - The worker may answer the allegations stated
against him in the notice of dismissal within a reasonable period from receipt
of such notice. The employer shall afford the worker ample opportunity to be
heard and to defend himself with the assistance of his representative, if he so
desire."
From the evidence presented it was established that private respondent was
dismissed from the service for a just cause - he willfully committed a serious
act of misconduct by demanding P160.00 for the repair of telephone No. 56-
34-06. Among others, it was shown that the letter-complaint of Mr. Remigio
Perez was followed by an investigation conducted by Engineers Melanio Poce
and Fidel Paulino who ascertained that the trouble was a mere slash on the
portion of the inside wire, contrary to private respondent's assertion that it was
cable trouble necessitating cable replacement and other expenses.
Subsequently, Mrs. Remedios Perez appeared before petitioner's Quality
Control and Inspection Department in the afternoon of May 24, 1984 and gave
a sworn statement pointing to the private respondent as the person who
demanded P160.00 from her for cable replacement and service charge. She
executed further a "KATUNAYAN" dated May 24, 1984 where she positively
identified respondent as the person who demanded P160.00 for the repair of
their telephone. Still later on May 29, 1984, it was followed by a
confrontation among private respondent, Mrs. Remedios Perez, Reynaldo
Perez and Mr. Rufino dela Cruz wherein Mr. and Mrs. Reynaldo Perez
reiterated their charge against private respondent. Finally, giving private
respondent his chance to be heard, Mr. Nicanor Sacdalan, petitioner's OPSIM
I Manager, sent a letter dated July 9, 1984 to the respondent requiring him to
explain within 72 hours from receipt thereof why he should not be dismissed
from the service for demanding personal compensation for service rendered to
the subscriber in connection with the latter's telephone, to which private
respondent in a letter dated July 13, 1984, merely denied the accusation
without submitting the affidavits of retraction in question until much later,
after he was dismissed from the service.
Moreover, he never requested for a formal investigation; so that petitioner, SO ORDERED.
convinced that private respondent committed the offense imputed against him,
terminated his services effective October 16, 1984.
It is thus apparent, that the justness of the cause of the dismissal as well as
compliance with procedural requirements, is beyond dispute. The disciplinary
action of dismissal against private respondent is legally justified considering
that his continuance in the service is patently inimical to the interest of the
petitioner. As held by this Court, an employer cannot be legally compelled to
continue with the employment of a person guilty of malfeasance (National
Service Corporation v. Leogardo Jr., 130 SCRA 502, July 20, 1984).
Reinstatement of an employee dismissed due to breach of trust and confidence
would be oppression (University of the East v. NLRC, 140 SCRA 296,
November 22, 1985).
Moreover, the alleged illegality of private respondent's dismissal because of
petitioner's failure to secure clearance from the Department of Labor before
effecting his dismissal, no longer holds true in this case.
Article 278 (b) of the Labor Code of the Philippines, as amended by Sections
13 and 14, Batas Pambansa Blg. 130, now provides:
"Subject to the constitutional right of workers to security of tenure and their
right to be protected against dismissal except for a just or authorized cause and
without prejudice to the requirement of notice under Article 284 of this Code,
Clearance To Terminate employment shall no longer be necessary."
As the above-mentioned amendment took effect on August 21, 1981, and
private respondent's dismissal from the service was on October 16, 1984, it is
clear that petitioner is no longer bound to secure clearance from the
Department of Labor before it can validly dismiss private respondent.
PREMISES CONSIDERED, the April 30, 1986 Decision of the National
Labor Relations Commission is hereby REVERSED and the July 16, 1985
Decision of the Labor Arbiter is hereby REINSTATED.
G.R. NO. 167385, December 13, 2005
JESUS B. LOPEZ, PETITIONER, VS. NATIONAL LABOR
RELATIONS COMMISSION (NLRC) SECOND DIVISION, HON.
COMMISSIONERS ANGELITA GACUTAN, VICTORIANO
CALAYCAY, RAUL AQUINO, MAYNILAD WATER SERVICES,
INC., BENJAMIN REYES CRISTINA M. BONIFACIO,
RESPONDENTS.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari under Rule 45 of the Rules of Court,
seeks the reversal of the January 5, 2005 Decision[1] of the Court of Appeals in
CA-G.R. SP No. 81543, and its March 4, 2005 Resolution[2] denying the
petitioner's motion for reconsideration.
The antecedent facts show that on April 21, 1998, Regina M. Gopez wrote a
letter[3] to respondent Maynilad Water Services, Inc. (Maynilad) alleging that
she entered into an agreement with petitioner Jesus B. Lopez, Maynilad's
Senior Engineering Assistant assigned in the Sampaloc area, to repair her
water meter for a fee. Despite payment of P500, petitioner allegedly never
returned to fix the defective meter.
On April 22, 1998, Maynilad's Head of Technical Operations-Sampaloc
Sector issued a memorandum requiring petitioner to answer the allegations.[4]
Petitioner denied the charges against him. He claimed that he never received
any amount from Gopez and even advised her to file a proper job order for her
meter concerns.[5]
Maynilad also formed an Ad-Hoc Investigation Panel which recommended
petitioner's dismissal from the service based on its findings that petitioner
committed serious misconduct in contracting an unauthorized work for a
fee.[6] Thus, on September 10, 1998, petitioner was served a notice of
termination.[7]
Aggrieved, petitioner filed a complaint for illegal dismissal claiming that he
was dismissed without just cause.
On January 30, 2002, the labor arbiter[8] rendered a Decision[9] holding that
Lopez was illegally dismissed as there was no proof that he promised to work
on the waterline of Gopez, much less that he received money from the latter.
The dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered declaring the dismissal of the
complainant as illegal and ordering respondent company to immediately
reinstate him to his former position without loss of seniority rights and to pay
complainant full backwages and attorney's fees, as follows:
1. P537,030.00 representing backwages as of the date of this decision
until complainant is actually reinstated in the service; and,
2. 10% of the total judgment award in this case representing attorney's
fees.
The complaint for moral and exemplary damages are hereby disallowed for
want of merit.
SO ORDERED.[10]
On appeal, the National Labor Relations Commission (NLRC) set aside the
decision of the labor arbiter. The dispositive portion of the Resolution[11]
reads:
WHEREFORE, the assailed Decision of the Labor Arbiter ordering the
reinstatement of complainant with backwages and payment of attorney's fees
is ordered SET ASIDE. A new one is hereby entered declaring the dismissal
of complainant legal. However, as a measure of compassionate justice,
respondent is ordered to pay complainant the sum of P13,260.00 by way of
financial assistance.
SO ORDERED.[12]
The NLRC found that petitioner entered into a contractual agreement with
Gopez and that he received money from the latter through Carreon, his
conduit. However, the NLRC also held that petitioner's infraction was not
tantamount to serious misconduct as Maynilad did not suffer any pecuniary
loss. If at all, petitioner violated Maynilad's policy on conflict of interest
which is a ground for dismissal based on loss of trust and confidence.
Petitioner's motion for reconsideration was denied,[13] hence he filed a petition
for certiorari under Rule 65 of the Rules of Court before the Court of Appeals.
On January 5, 2005, the Court of Appeals rendered a Decision[14] dismissing
the petition and affirming the resolution of the NLRC. According to the
appellate court:
Petitioner entered in a contract to work for a fee with a customer (Mrs. Gopez)
contrary to company policy. Such dishonesty is tantamount to serious
misconduct on the part of the employee, a breach of trust reposed upon him by
his employer. Loss of confidence can be a ground for dismissing an employee
when there is basis for the same as it is in this case, or when the employer has
reasonable ground to believe, if not, entertain, the moral conviction that the
employee is responsible for the misconduct and that the nature of his
participation therein renders him unworthy of the trust and confidence
demanded by his position.
Maynilad expected petitioner to project a credible and professional image to
the public being the head of a service team. However, contrary to
expectations, petitioner committed a misconduct by entering into a prohibited
contract with a customer. Thus, Maynilad could not be faulted in losing its
trust and confidence in petitioner and in dismissing him under the
circumstances.[15]
Petitioner sought reconsideration of the appellate court's decision but the same
was denied.[16]
The principal issue for our resolution is the validity of petitioner's termination.
Misconduct has been defined as improper or wrong conduct. It is 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 of judgment.[17] The misconduct to be serious must be of such
grave and aggravated character. Such misconduct, however serious, must
nevertheless be in connection with the employee's work to constitute just
cause for his separation.[18] Thus, for misconduct or improper behavior to be a
just cause for dismissal, (a) it must be serious; (b) must relate to the
performance of the employee's duties; and, (c) must show that the employee
has become unfit to continue working for the employer.[19]
Factual findings of the NLRC and the Court of Appeals that petitioner
contracted unauthorized work and accepted money from Gopez for the repair
of the water meter deserves respect and even finality. Settled is the rule that
only questions of law may be raised in a petition for review under Rule 45 of
the Rules of Court.
When petitioner contracted with Gopez, he in effect engaged in a business that
competed with Maynilad's and thus came in conflict of interest with the latter.
He cannot serve himself and his employer at the same time all at the expense
of the latter.[20]
As a measure of self-preservation against acts inimical to its interests, an
employer has the right to dismiss an employee found committing acts of
dishonesty and disloyalty. The employer may not be compelled to continue to
employ such a person whose continuance in the service would patently be
inimical to his employer's interest.[21] The law, in protecting the rights of
workers, authorizes neither oppression nor self-destruction of the employer.[22]
Thus, in Philippine Long Distance Telephone Company v. National Labor
Relations Commission,[23] a junior telephone installer was dismissed from
service for just cause when he willfully committed a serious act of misconduct
by demanding money for the repair of a telephone that was officially part of
his job.
In the instant case, we find the penalty of dismissal from service reasonable
and appropriate and a valid exercise of management prerogative. Maynilad
specifically prescribes that, should any employee begin or continue to engage
in conflict of interest activities despite management pronouncement or
disapproval, the appropriate disciplinary sanctions shall be imposed on him.[24]
Appropriate disciplinary sanction, such as termination, is within the purview
of management imposition.
as an equitable concession. It is allowed only in those instances where the
employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character.[27]
WHEREFORE, the petition is DENIED. The January 5, 2005 Decision and
the March 4, 2005 Resolution of the Court of Appeals in CA-G.R. SP No.
81543, are AFFIRMED with MODIFICATION. The award of P13,260 by
way of financial assistance in favor of petitioner is DELETED for lack of
basis.
SO ORDERED.

That Maynilad suffered no damage resulting from the acts of petitioner is

inconsequential. In Glaxo Wellcome Philippines, Inc. v. Nagkakaisang
Empleyado ng Wellcome-DFA (NEW-DFA),[25] we held that deliberate
disregard or disobedience of company rules could not be countenanced, and
any justification that the disobedient employee might put forth would be
deemed inconsequential. The lack of resulting damage was unimportant,
because "the heart of the charge is the crooked and anarchic attitude of the
employee towards his employer. Damage aggravates the charge but its
absence does not mitigate nor negate the employee's liability."[26] What is
abhorrent and punishable is the act of contracting unauthorized work for a fee,
regardless of whether the act caused damage to the company. Thus, we hold
that Maynilad validly terminated the services of petitioner on the ground of
serious miconduct which resulted to the loss of trust of Maynilad upon
petitioner because his credibility in doing his job as a team leader of a repair
crew has already been eroded.

As regards the amount of P13,260 awarded to petitioner by way of financial

assistance, the same must be deleted for lack of basis. Financial assistance
may be given as a measure of social justice in exceptional circumstances and
G.R. No. 208908, March 11, 2015
THE COFFEE BEAN AND TEA LEAF PHILIPPINES, INC. AND
WALDEN CHU, PETITIONERS, VS. ROLLY P. ARENAS,
RESPONDENT.
DECISION
BRION, J.:
We resolve in this petition for review on certiorari[1] the challenge to the
Court of Appeals (CA) decision[2] dated March 26, 2013 and resolution[3]
dated August 30, 2013 in CA-G.R. SP No. 117822. These assailed CA rulings
affirmed the National Labor Relations Commissions (NLRC) decision[4] dated
August 13, 2010, which also affirmed the Labor Arbiters (LA) February 28,
2010 decision.
The Antecedent Facts
On April 1, 2008, the Coffee Bean and Tea Leaf Philippines, Inc. (CBTL)
hired Rolly P. Arenas (Arenas) to work as a barista at its Paseo Center
Branch. His principal functions included taking orders from customers and
preparing their ordered food and beverages.[5] Upon signing the employment
contract,[6] Arenas was informed of CBTLs existing employment policies.
To ensure the quality of its crews services, CBTL regularly employs a
mystery guest shopper who poses as a customer, for the purpose of covertly
inspecting the baristas job performance.[7]
In April 2009, a mystery guest shopper at the Paseo Center Branch submitted
a report stating that on March 30, 2009, Arenas was seen eating non-CBTL
products at CBTLs al fresco dining area while on duty. As a result, the
counter was left empty without anyone to take and prepare the customers
orders.[8]
On another occasion, or on April 28, 2009, Katrina Basallo (Basallo), the duty
manager of CBTL, conducted a routine inspection of the Paseo Center Branch.
While inspecting the stores products, she noticed an iced tea bottle being
chilled inside the bin where the ice for the customers drinks is stored; thus,
she called the attention of the staff on duty. When asked, Arenas muttered,
kaninong iced tea? and immediately picked the bottle and disposed it
outside the store.[9]
After inspection, Basallo prepared a store managers report which listed
Arenas recent infractions, as follows:
1. Leaving the counter unattended and eating chips in an unauthorized
area while on duty (March 30, 2009);
2. Reporting late for work on several occasions (April 1, 3 and 22); and
3. Placing an iced tea bottle in the ice bin despite having knowledge of
company policy prohibiting the same (April 28, 2009).[10]
Based on the mystery guest shopper and duty managers reports, Arenas was
required to explain his alleged violations. However, CBTL found Arenas
written explanation unsatisfactory, hence CBTL terminated his
employment.[11]
Arenas filed a complaint for illegal dismissal. After due proceedings, the LA
ruled in his favor, declaring that he had been illegally dismissed. On appeal,
the NLRC affirmed the LAs decision.
CBTL filed a petition for certiorari under Rule 65 before the CA. CBTL
insisted that Arenas infractions amounted to serious misconduct or willful
disobedience, gross and habitual neglect of duties, and breach of trust and
confidence. To support these allegations, CBTL presented Arenas letter[12]
where he admitted his commission of the imputed violations.
On March 26, 2013, the CA issued its decision dismissing the
petition. The CA ruled that Arenas offenses fell short of the required legal
standards to justify his dismissal; and that these do not constitute serious
misconduct or willful disobedience, and gross negligence, to merit his
termination from service. The CA denied CBTLs motion for reconsideration
opening the way for this present appeal via a petition for review on certiorari.
The main issue before us is whether CBTL illegally dismissed Arenas from
employment.
The Petition
CBTL argues that under the terms and conditions of the employment contract,
Arenas agreed to abide and comply with CBTLs policies,
procedures, rules and regulations, as provided for under CBTLs table
of offenses and penalties and/or employee handbook.[13] CBTL cites serious
misconduct as the primary reason for terminating Arenas
employment. CBTL also imputes dishonesty on the part of Arenas for not
immediately admitting that he indeed left his bottled iced tea inside the ice
bin.
Our Ruling
We DENY the petition.
As a rule, in certiorari proceedings under Rule 65 of the Rules of Court, the
CA does not assess and weigh each piece of evidence introduced in the
case. The CA only examines the factual findings of the NLRC to determine
whether its conclusions are supported by substantial evidence, whose absence
points to grave abuse of discretion amounting to lack or excess of
jurisdiction.[14] In the case of Mercado v. AMA Computer College,[15] we
emphasized that:
As a general rule, in certiorari proceedings under Rule 65 of the Rules of
Court, the appellate court does not assess and weigh the sufficiency of
evidence upon which the Labor Arbiter and the NLRC based their conclusion.
The query in this proceeding is limited to the determination of whether or not
the NLRC acted without or in excess of its jurisdiction or with grave abuse of
discretion in rendering its decision. x x x[16] [Italics supplied]
Our review of the records shows that the CA did not err in affirming the LA
and the NLRCs rulings. No grave abuse of discretion tainted these rulings,
thus, the CAs decision also warrants this Courts affirmation. The infractions
which Arenas committed do not justify the application of the severe penalty of
termination from service.
First, Arenas was found eating non-CBTL products inside the stores premises
while on duty. Allegedly, he left the counter unattended without anyone to
entertain the incoming customers. Second, he chilled his bottled iced tea
inside the ice bin, in violation of CBTLs sanitation and hygiene policy.
CBTL argues that these violations constitute willful disobedience, thus
meriting dismissal from employment.
We disagree with CBTL.
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.[17]
Tested against these standards, it is clear that Arenas alleged infractions do
not amount to such a wrongful and perverse attitude. Though Arenas may
have admitted these wrongdoings, these do not amount to a wanton disregard
of CBTLs company policies. As Arenas mentioned in his written explanation,
he was on a scheduled break when he was caught eating at CBTLs al fresco
dining area. During that time, the other service crews were the one in charge
of manning the counter. Notably, CBTLs employee handbook imposes only
the penalty of written warning for the offense of eating non-CBTL products
inside the stores premises.
CBTL also imputes gross and habitual neglect of duty to Arenas for coming in
late in three separate instances.
Gross negligence implies a want or absence of, or failure to exercise even a
slight care or diligence, or the entire absence of care. It evinces a thoughtless
disregard of consequences without exerting any effort to avoid them.[18] There
is habitual neglect if based on the circumstances, there is a repeated failure to
perform ones duties for a period of time.[19]
In light of the foregoing criteria, we rule that Arenas three counts of tardiness
cannot be considered as gross and habitual neglect of duty. The infrequency of
his tardiness already removes the character of habitualness. These late
attendances were also broadly spaced out, negating the complete absence of
care on Arenas part in the performance of his duties. Even CBTL admitted in
its notice to explain that this violation does not merit yet a disciplinary action
and is only an aggravating circumstance to Arenas other violations.[20]
To further justify Arenas dismissal, CBTL argues that he committed serious
misconduct when he lied about using the ice bin as cooler for his bottled iced
tea. Under CBTLs employee handbook, dishonesty, even at the first instance,
warrants the penalty of termination from service.[21]
For misconduct or improper behavior to be a just cause for dismissal, (a) it
must be serious; (b) it must relate to the performance of the employees duties;
and (c) it must show that the employee has become unfit to continue
working for the employer.[22]
However, the facts on record reveal that there was no active dishonesty on the
part of Arenas. When questioned about who placed the bottled iced tea inside
the ice bin, his immediate reaction was not to deny his mistake, but to remove
the bottle inside the bin and throw it outside. More importantly, when he was
asked to make a written explanation of his action, he admitted that the bottled
iced tea was his.
Thus, even if there was an initial reticence on Arenas part, his subsequent act
of owing to his mistake only shows the absence of a deliberate intent to lie or
deceive his CBTL superiors. On this score, we conclude that Arenas action
did not amount to serious misconduct.
Moreover, the imputed violations of Arenas, whether taken singly or as a
whole, do not necessitate the imposition of the strict and harsh penalty of
dismissal from service. The LA, NLRC and the CA all consistently ruled that
these offenses are not grave enough to qualify as just causes for dismissal.
Factual findings of the labor tribunals especially if affirmed by the CA
must be given great weight, and merit the Courts respect.
As a final remark, we note that petitioner Walden Chu (Chu) should not be
held jointly and severally liable with CBTL for Arenas adjudged monetary
awards. The LA and the NLRC ruled for their solidary liability but the CA
failed to dispose this issue in its decision.
A corporation is a juridical entity with a legal personality separate and distinct
from those acting for and in its behalf and, in general, from the people
comprising it.[23] Thus, as a general rule, an officer may not be held liable for
the corporations labor obligations unless he acted with evident malice and/or
bad faith in dismissing an employee.[24]
In the present case, there was no showing of any evident malice or bad faith
on Chus part as CBTLs president. His participation in Arenas termination
was not even sufficiently alleged and argued. Hence, he cannot be held
solidarily liable for CBTLs liabilities to Arenas.
WHEREFORE, in light of these considerations, we hereby DENY the
petition for lack of merit. The Court of Appeals committed no grave abuse of
discretion in its decision of March 26, 2013 and its resolution of August 30,
2013 in CA-G.R. SP No. 117822, except with respect to the liability of
petitioner Walden Chu. We thus absolve petitioner Walden Chu from paying
in his personal capacity the monetary awards of respondent Rolly P. Arenas.
No costs.

SO ORDERED.