Cruz vs.
CA, 494 SCRA 226, GR 148544, July 12, 2006 matter, and found Cruz guilty of fraud, serious
1. Felix M. Cruz, Jr. was an employee of Citytrust
Banking Corporation (or Citytrust) from October
8, 1979. He held the confidential position of
Micro Technical Support Officer, with the
following duties and responsibilities: (a)
Evaluate and recommend from various
departments/units request for Micro Computers
received by the Bidding Committee. (b) Further
evaluate and accept the bids submitted
including recommendation therof, which were
done by the Technical Committee of the Bank.
2. The good performance of Cruz did not remain
unnoticed for on several occasions he was
recognized with awards and citations, given
salary increases and promoted to Authorized
Signer on May 1, 1991.
3. But after all his years of reputed fealty and good
service with the company, there were feedbacks
and informations that certain irregularities were
being committed in the bidding process and
purchase of computers, an area within the
powers and responsibilities of Cruz.
4. A special investigation was conducted by the
Citytrust Internal Audit Group and it was found
out that indeed there were unauthorized and
unreported commissions and rebates given out
by one of its computer suppliers, MECO
Enterprises, Inc. (MECO), for purchases made by
Citytrust. This was corroborated by the letter
dated August 5, 1992 of the President and
Controller [sic] of MECO certifying that Cruz has
received commissions and rebates amounting to
P105,192.00 just for the period of September
1992 to March 1993.
5. With this damaging result of the investigation,
Citytrust sent a show-cause to Cruz on August 6,
1993 placing him under a 30-day preventive
suspension and directing him to appear in an
administrative hearing by the Ad Hoc
Committee. Cruz submitted the said
memorandum, the Ad Hoc Committee heard the
misconduct, gross dishonesty and serious
violation of Bank policies, regulations and
procedure.
6. For the resultant loss of confidence, Citytrust
terminated Cruz from employment effective
October 6, 1993.
7. Cruz filed before the Labor Arbiter an action for
Illegal Dismissal and Damages claiming that
Citytrust denied him due process and hastily
dismissed him from service.
8. Labor arbiter ruled in favor of Cruz ordering City
Trust to reinstate him to his former position
without loss of seniority rights with full
backwages which up to the promulgation of this
Decision.
9. Citytrust appealed to the NLRC, where it
dismissed LA’s decision.
10. Cruz filed a motion for its reconsideration but
this was denied for lack of merit.
11. Cruz then filed a petition for certiorari with this
Court. In a Resolution dated February 15,
1999, the Court referred the petition to the CA
for appropriate action and disposition, pursuant
to the ruling in the case of St. Martin Funeral
Homes v. National Labor Relations Commission.
12. CA held that while it is true that the signature of
petitioner does not appear in the check
vouchers, other pieces of evidence prove that
he benefited from the proceeds of the checks
issued; that there is substantial evidence to hold
petitioner liable for soliciting and receiving
monetary considerations from a supplier; that
his act constituted a willful breach of his
employer's trust and confidence which justifies
his termination from employment; that
petitioner's dismissal from employment was the
result of a thorough investigation and hearing
where he was given the opportunity to explain
his side.
existence of a basis for believing that such
13. Cruz filed the present petition
for certiorari claiming that while his name
appears in the check vouchers issued by MECO,
his signature does not appear in any of said
vouchers. Not being a signatory of any of the
said check vouchers, he contends that there can
be no basis in concluding that he ever received
any commission, special discount or rebate from
MECO. He also asserts that he was denied due
process because he was not given the
opportunity to refute the charges imputed
against him. While it is true that City Trust
conducted an investigation, Cruz claims that the
same was done without his participation.
14. Citytrust argues that what petitioner should
have done was to file a petition for review
on certiorari under Rule 45 of the Rules of Court,
and that Cruz's failure to file a petition for
review cannot be remedied by the filing of a
special civil action for certiorari. The Court does
not find merit in the present petition.
15. Cruz was dismissed from employment on the
ground of loss of trust and confidence. Loss of
trust and confidence, as a valid ground for
dismissal, must be substantiated by evidence.
16. Jurisprudence has distinguished the treatment
of managerial employees or employees
occupying positions of trust and confidence
from that of rank-and-file personnel, insofar as
the application of the doctrine of trust and
confidence is concerned.
17. In Caoile v. National Labor Relations
Commission, the Court had occasion to explain
as follows:
Thus, with respect to rank-and-file personnel,
loss of trust and confidence as ground for valid
dismissal requires proof of involvement in the
alleged events in question, and that mere
uncorroborated assertions and accusations by
the employer will not be sufficient. But as
regards a managerial employee, the mere
employee has breached the trust of his
employer would suffice for his dismissal.
Hence, in the case of managerial employees,
proof beyond reasonable doubt is not required,
it being sufficient that there is some basis for
such loss of confidence, such as when the
employer has reasonable ground to believe
that the employee concerned is responsible for
the purported misconduct, and the nature of
his participation therein renders him unworthy
of the trust and confidence demanded by his
position.
18. Article 282(c) of the Labor Code states that the
loss of trust and confidence must be based on
willful breach of the trust reposed in the
employee by his employer. Such breach is willful
if it is done intentionally, knowingly, and
purposely, without justifiable excuse, as
distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently.
19. Moreover, it must be based on substantial
evidence and not on the employer's whims or
caprices or suspicions otherwise, the employee
would eternally remain at the mercy of the
employer.
20. Loss of confidence must not be indiscriminately
used as a shield by the employer against a claim
that the dismissal of an employee was
arbitrary. And, in order to constitute a just cause
for dismissal, the act complained of must be
work-related and shows that the employee
concerned is unfit to continue working for the
employer.
21. In addition, loss of confidence as a just cause
for termination of employment is premised on
the fact that the employee concerned holds a
position of responsibility, trust and
confidence or that the employee concerned is
entrusted with confidence with respect to
delicate matters, such as the handling or care
and protection of the property and assets of the
employer. The betrayal of this trust is the
 essence of the offense for which an employee is
penalized.
22. There is no dispute that Cruz is a confidential
employee. During his cross-examination, he
testified that aside from evaluating and
recommending the purchase of Micro
Computers, he also supervises the maintenance
of computer hardware including the installation
of computers for Citytrust in all of its branches
nationwide. His job entails the observance of
proper company procedures relating to the
acquisition, installation and maintenance of
computers which, undeniably, are vital to the
operations of his employer. Thus, his job
involves a high degree of responsibility
requiring a substantial amount of trust and
confidence on the part of his employer.
Issue: W/N Cruz is illegally dismissed on the ground
of loss of trust and confidence.
Held: No.
23. The Court is not persuaded with Cruz’contention
that without his signatures appearing in the
check vouchers issued by MECO, there can be
no basis in coming up with the conclusion that
he received and appropriated commissions and
rebates without the knowledge and authority of
Citytrust.
24. Relying solely on the case of Atlas Consolidated
Mining & Development Corp. v. NLRC is
misplaced. In the said case, the private
respondent, who is an employee of petitioner
corporation, was charged with the unauthorized
withdrawal and misappropriation of 192 liters of
gasoline from company stocks and for knowingly
allowing company personnel to work on
company time in the assembly of a privately-
owned vehicle. To prove the first charge, the
petitioner company presented in evidence
entries in a logbook showing gasoline
withdrawals allegedly made by private
respondent.
25. SC held that since respondent's signature does
not appear in the logbook, there is no proof that
he actually withdrew and received the gasoline.
It was also ruled that the logbook cannot be
relied upon to establish the alleged dishonesty
of private respondent. Neither did the Court
give credence to the testimonies of the
witnesses against him. In sum, no competent
evidence was presented to prove the private
respondent's liability. This is not the situation in
the present case.
26. It is true that the check vouchers alone are not
sufficient to prove his guilt owing to the fact
that his signatures do not appear in any of these
vouchers.
27. However, aside from the abovementioned
check vouchers, there are other pieces of
evidence presented by Citytrust which
petitioner failed to refute and which points to
the fact that he received commissions or
rebates from MECO. The evidence consists of
the following: (1) admission made by petitioner
in his letter, (2) certification issued by MECO
categorically stating that he was paid
commissions (3) testimonies of LeoncioAraullo,
Vice President of Citytrust; and Ma. Lourdes
Foronda, Assistant Vice President for Staff
Services Division of the Human Resources
Department of Citytrust, that Cruz admitted
having received the amounts of P1,000.00
and P500.00 from Art Cordero, an officer of
MECO, claiming that these amounts are "for the
boys"; (4) statements in the affidavit of
Florantedel Mundo, auditor at the Internal Audit
Department of Citytrust that two of the checks
issued by MECO in favor of petitioner were
either encashed by the latter's common-law-
wife or deposited in his account.
28. In addition, SC agrees with the CA that
annotations appearing in the check vouchers
issued by MECO such as "Payment for the
Rebate Given to Boy Cruz of Citytrust"28 and
"Payment for the Sales Rebate Given to Boy
Cruz of Citytrust"29 are confirmations of the fact
that the checks were issued and given given further opportunity to explain his side.
specifically by MECO to petitioner in Hence, the fact alone that he was not able to
consideration of his office and services. These confront the witnesses against him during the
pieces of evidence, when taken together, would investigation conducted by Citytrust does not
constitute substantial evidence to prove mean that he was denied his right to due
petitioner's guilt; and his failure to satisfactorily process.
explain or rebut them only strengthens
Citytrust's case against him. 34. As to the requirement of notice, the Labor Code
provides that before an employee can be validly
29. Thus, Cruz' acceptance of commissions and dismissed, the employer is required to furnish
rebates from MECO, without the knowledge the employee with two (2) written notices.
and consent of Citytrust and without said
rebates and commissions being reported and 35. Citytrust complied with the first requirement of
turned over to the latter, are acts which can notice when it informed petitioner through a
clearly be considered as a willful breach of the letter, dated August 6, 1993, of the charges
trust and confidence reposed by Citytrust upon against him, directing him to explain in writing
him. why his employment should not be terminated
and to appear in a hearing to be conducted by
30. A company has the right to dismiss its the company to give him further opportunity to
employees if only as a measure of self- explain his side.
protection.
36. Citytrust also complied with the second
31. Here, SC finds that the CA did not commit grave requirement of notice when it sent a
abuse of discretion when it ruled that Citytrust memorandum dated September 28, 1993, to
is justified in dismissing petitioner from his petitioner informing him of his dismissal from
employment for loss of trust and confidence. employment and the reasons therefor.
32. Cruz contends that he was denied his right to
due process because the investigation
conducted by Citytrust was done ex-parte and
he was not given the opportunity to confront
the witnesses against him. It is well settled that
the basic requirement of notice and hearing in
termination cases is for the employer to inform
the employee of the specific charges against him
and to hear his side and defenses. This does not,
however, mean a full adversarial proceeding.
33. Here, Cruz cannot claim that he was denied due
process because he was able to respond to the
letter of Citytrust dated August 6, 1993.
Moreover, he admitted in his cross-examination
before the labor arbiter that he was able to
attend the investigation of the ad hoc
committee formed by Citytrust where he was
shown the check vouchers issued by MECO,
informed of the charges against him and was
Standard vs. Standard Union, 468 SCRA 316, GR
166111, August 25, 2005
1. Rogelio Javier was employed by the Standard
Electric Manufacturing Corporation (SEMC) on
January 15, 1973 as radial spot machine
operator in its Production Department. Javier
was a member of the Standard Electric
Employees Union-NAFLU (Union).
2. On July 31, 1995, Javier failed to report for work
and failed to notify the SEMC of the reason for
his absences.
3. On August 9, 1995, he was arrested and
detained for the charge of rape upon complaint
of his neighbor, GenalynBarotilla. After the
requisite preliminary investigation, an
Information for rape was filed in the RTC.
4. On January 13, 1996, Javier, through counsel,
submitted a letter to SEMC informing them that
Javier was detained for the charge of rape and
for that reason failed to report for work. He
requested the SEMC to defer the
implementation of its intention to dismiss him.
5. The SEMC denied Javier’s request and issued a
Memorandum terminating his employment for
(a) having been absent without leave (AWOL)
for more than fifteen days from July 31, 1995;
and (b) for committing rape.
6. On May 17, 1996, the RTC issued an
Order granting Javier’s demurrer to evidence
and ordered his release from jail. Shortly
thereafter, Javier reported for work, but the
SEMC refused to accept him back.
7. A grievance meeting between the Union, Javier
and the SEMC was held, but SEMC refused to re-
admit Javier.
8. On August 2, 1996, the Union and Javier filed a
Complaint for illegal dismissal against the SEMC
before the NLRC. He averred that since the
reason for his detention for rape was non-
existent, the termination of his employment was
illegal.
9. For its part, the SEMC averred that Javier’s
prolonged absences caused irreparable
damages to its orderly operation; he had to be
replaced so that the continuity and flow of
production would not be jeopardized. It could
not afford to wait for Javier’s indefinite return
from detention.
10. On January 14, 1997, Labor Arbiter dismissed
the complaint and ruled that the complaint was
within the exclusive jurisdiction of the Voluntary
Arbitrators or Panel of Arbitrators.
11. On appeal, the NLRC reversed the Labor
Arbiter’s decision
and ruled that the latter had jurisdiction over
the complaint; it thus ordered the remand of
the case to the Labor Arbiter for resolution on
the merits.
12. On August 16, 1999, the Labor Arbiter rendered
judgment ordering the dismissal of the
complaint. However, the SEMC was ordered to
pay separation pay to the complainant.
13. On appeal, the NLRC affirmed the Labor
Arbiter’s ruling saying that SEMC’s contention is
baseless. A perusal of the evidence on record
clearly shows that prior to his dismissal from his
job by SU, he was made to explain his side.
Evidence on record further shows that a
grievance machinery as provided for in the CBA
was activated by SU for the purpose of affording
Javier a chance to present his side prior to his
dismissal.
14. Considering the adequate evidence presented
by respondents-appellants on which the findings
of the Labor Arbiter were based, this
Commission finds no merit on complainants-
appellants’ contention that the Labor Arbiter
had committed serious errors in his findings of
facts and the law in this instant case.
15. When the NLRC denied the motion for
reconsideration of the said decision, Javier and
the Union filed a petition for certiorari with the
CA.
16. CA reversed the findings of the Labor Arbiter
and the NLRC.
17. Using Magtoto v NLRC, it declared that it was
not Javier’s intention to abandon his job; his
incarceration reasonably justified his failure to
report for work and negated the theory that he
was on AWOL. Likewise, the CA held that Javier
could not be terminated on the ground of
commission of a crime, as when he was
acquitted of the rape charges, the second
ground relied upon by the
SEMC ceased to have factual basis. Hence,
despite the fact that Javier was allegedly
afforded the opportunity to explain his side, the
same was unnecessary since, in the first place,
there was no just or authorized cause for the
dismissal.
18. The motion for reconsideration filed by the
SEMC was denied by the CA.
Issues: a.) W/N CA committed an error in applying
Magtoto vs. NLRC and City Government of Makati
Case
b.) W/N Javier is illegally dismissed and therefore
should be reinstated and granted full backwages
Held: The Court dismissed the petition for lack of
merit.
19. The petitioner asserts that the ruling of the
Court in Magtoto finds no application in the
present case.
20. It argues that in Magtoto, no criminal
information was filed in the regular court
against the employee, as the city prosecutor
found no probable cause to hold the Javier for
trial.
21. Standard argues that Javier was indicted for the
crime of rape in the RTC. They also pointed out
that the employee in the cited case was
dismissed solely on account of his
absences during his imprisonment; Javier was
terminated due to truancy prior to his detention
from July 31, 1995, to his detention for rape on
August 9, 1995, until his release on May 24,
1996.
22. Javier never informed the petitioner why he was
absent on the said dates, and subsequent
thereto. It was only on January 13, 1996 that
respondent Javier, through his counsel,
informed the petitioner of his detention for rape
for the first time.
23. Standard avers that the ruling of this Court
in City Government of Makati City is not
applicable because respondent Javier was
dismissed on a demurrer to evidence, and not
because he did not commit the offense alleged.
24. The case was dismissed because of the
prosecution’s failure to prove his guilt beyond
reasonable doubt. The employee here was
acquitted by reason of the prosecution’s failure
to prove her complicity in the crime.
25. The SC held that Javier was dismissed by the
Standard effective February 5, 1996 for (a) being
AWOL from July 31, 1995 up to January 30,
1996; and (b) committing rape.
26. However, on demurrer to evidence, Javier was
acquitted of the charge. With respondent
Javier’s acquittal, the cause of his dismissal from
his employment turned out to be non-existent.
27. In the Magtoto case, Alejandro Jonas Magtoto
was arrested by virtue of an Arrest, Search and
Seizure Order. He was charged with violation of
Article 136 (Conspiracy and Proposal to Commit
Rebellion) and Article 138 (Inciting to Rebellion
or Insurrection) of the Revised Penal Code (RPC).
28. Although Magtoto informed his employer and
pleaded that he be considered as "on leave"
until released, his employer denied the request.
29. On April 10, 1981, or about seven (7) months
after his arrest, Magtoto was released after the
City Fiscal dismissed the criminal charges for
lack of evidence.
30. On the same date, he informed his employer of
his intent to start working again, but the
employer rejected the offer.
31. The SC ruled that the termination was illegal and
will be the employee will be subject to
reinstatement. The employer tries to distance
itself from the detention by stressing that the
petitioner was dismissed due to prolonged
absence. However, Mr.Magtoto could not
report for work because he was in a prison cell.
The detention cannot be divorced from
prolonged absence.
32. A non-existent cause for dismissal was explained
in Pepito v. Secretary of Labor (96 SCRA 454). In
dismissal without cause, it is the intention of
the employer to dismiss his employee for no
cause whatsoever, in which case the
Termination Pay Law would apply. In false or
non-existent cause, the employer does not
intend to dismiss the employee but for a
specific cause which turns out to be false or
non-existent.
33. Pepito was separated because of his alleged
involvement in the pilferage in question.
However, he was absolved from any
responsibility therefor by the court. The cause
for his dismissal having been proved non-
existent or false, his reinstatement is warranted.
It would be unjust and unreasonable for the
Company to dismiss petitioner after the latter
had proven himself innocent of the cause for
which he was dismissed."
34. The facts in Pedroso v. Castroare similar to the
set of facts in the present case. The SC held that
the dismissed employees should be reinstated
to their former positions, since their separation
from employment was founded on
a false or non-existent cause; hence, illegal.
35. Javier’s absence from August 9, 1995 cannot be
deemed as an abandonment of his work.
Abandonment is a matter of intention and
cannot lightly be inferred or legally presumed
from certain equivocal acts.
36. To constitute as such, two requisites must
concur: first, the employee must have failed to
report for work or must have been absent
without valid or justifiable reason; and second,
there must have been a clear intention on the
part of the employee to sever the employer-
employee relationship as manifested by some
overt acts, with the second element being the
more determinative factor.
37. Abandonment as a just ground for dismissal
requires clear, willful, deliberate, and
unjustified refusal of the employee to resume
his employment. Mere absence or failure to
report for work, even after notice to return, is
not tantamount to abandonment.
38. Standard acted with precipitate haste in
terminating Javier’s employment on the ground
that he had raped the complainant therein.
Javier had yet to be tried for the said charge.
Standard adjudged Javier guilty without due
process of law. While it may be true that after
the preliminary investigation of the complaint,
probable cause for rape was found and Javier
had to be detained, these cannot be made as
legal bases for the immediate termination of his
employment.
39. There is no evidence on record that Javier
received a letter giving him an opportunity to
explain his side. SC agrees with Javier’s
observation that the letter was not mentioned
nor annexed in the Standard’s Position Paper,
Rejoinder and in its Opposition to the Appeal.
The letter surfaced only on a much later date, in
1999, when it was formally offered in evidence backwages from the time it refused to allow his
and referred to in the petitioner’s reinstatement on May 24, 1996 until actually
Memorandum before the Labor Arbiter. reinstated; or, if reinstatement is no longer
feasible, to pay him separation pay equivalent
40. According to the SC, Standard did not conduct to one (1) month salary for every year of service.
any investigation whatsoever prior to his
termination, despite being informed of
respondent Javier’s predicament by the latter’s
siblings, his Union and his counsel. The
meetings held pursuant to the grievance
machinery provisions of the collective
bargaining agreement were only done after his
dismissal had already taken effect on February
5, 1996. Clearly, well-meaning these
conferences might be, they can not cure an
otherwise unlawful termination.
41. It bears stressing that for a dismissal to be
validly effected, the twin requirements of due
process – notice and hearing – must be
observed. In dismissing an employee, an
employer has the burden of proving that the
former worker has been served two notices: (1)
one to apprise him of the particular acts or
omissions for which his dismissal is sought; and
(2) the other to inform him of his employer’s
decision to dismiss him. As to the requirement
of a hearing, the essence of due process lies in
an opportunity to be heard, and not always
and indispensably in an actual hearing.
42. Javier is not entitled to any salary during the
period of his detention. His entitlement to full
backwages commenced from the time the
petitioner refused his reinstatement. When
respondent Javier was freed on May 24, 1996 by
virtue of the judgment of acquittal, he
immediately proceeded to the Standard but was
not accepted back to work; hence, the
reckoning point for the grant of backwages
started therefrom.
43. Standard is hereby ORDERED to reinstate
Rogelio Javier to his former position or, if no
longer possible, a substantially equivalent
position without loss of seniority rights and
other privileges appurtenant thereto, with full
Floren Hotel vs NLRC, 458 SCRA 128, GR 155264,
May 6, 2005
1. Roderick A. Calimlim, Ronald T. Rico and Jun A.
Abalos were working in the hotel as room boys,
Lito F. Bautista as front desk man, Gloria B.
Lopez as waitress. They all started working for
the hotel in 1993, except for Jun A. Abalos who
started only in 1995.
2. In the afternoon of June 6, 1998, Dely Lim
randomly inspected the hotel rooms to check if
they had been properly cleaned. When she
entered Room 301, she found Lito F. Bautista
sleeping half-naked with the air-conditioning on.
Lim immediately called the attention of the
hotel’s acting supervisor, Diosdado Aquino, who
had supervision over Bautista. Lim admonished
Aquino for not supervising Bautista more
closely, considering that it was Bautista’s third
offense of the same nature.
3. When she entered Room 303, Calimlim and Rico
drinking beer, with four bottles in front of them.
They had taken these bottles of beer from the
hotel’s coffee shop. Like Bautista, they had
switched on the air conditioning in Room 303.
4. That same afternoon, Dely Lim prepared a
memorandum for Bautista, citing the latter for
the following incidents: (1) sleeping in the hotel
rooms; (2) entertaining a brother-in-law for
extended hours during duty hours; (3) use of
hotel funds for payment of SSS loan without
management consent; (4) unauthorized use of
hotel’s air-con; and (5) failure to pay cash
advance in the amount of P4,000.
5. In the presence of Acting Supervisor Aquino as
well as workers Jennifer Rico, Romel Macaraeg,
Mario Resquino and Charie Chua, Dely Lim tried
to give Bautista a copy of the memorandum but
Bautista refused to receive it.
6. Bautista then went on absence without leave.
Calimlim and Rico, embarrassed by the incident,
went home. When they returned to work the
next day, they were served with a notice of
suspension for one week.
7. Like Bautista, they refused to receive the notice
of suspension, but opted to serve the penalty.
8. Upon their return on June 15, 1998, they saw a
memorandum dated June 13, 1998 on the
bulletin board announcing (a) the suspension as
room boys of Calimlim and Rico, or alternately,
(b) returning to work on probation as janitors
for the following reasons: unsatisfactory work,
having a drinking spree inside the hotel’s rooms,
cheating on the Daily Time Record, being absent
without valid reason, leaving work during duty
time, tardiness, and sleeping on the job. The
memorandum also included Calimlim and Rico’s
new work schedule.
9. Calimlim and Rico submitted handwritten
apologies and pleaded for another chance,
before they went AWOL (absent without leave).
10. Calimlim, Rico and Bautista filed separate
complaints, for illegal dismissal and money
claims, before the Labor Arbiter in Dagupan City.
11. Calimlim and Rico claimed they were
constructively dismissed, while Bautista claimed
that Dely Lim orally told him not to go back to
work because he was already dismissed. Abalos
and Lopez later also filed separate complaints
for underpayment of wages, non-payment of
their 13th month pay, and service incentive leave
pay. On July 7, 1998, after they stopped
working, Abalos and Lopez amended their
complaints. They claimed that petitioners orally
dismissed them when they refused to withdraw
their complaints.
12. Floren Hotel alleged that they did not dismiss
them but that they had abandoned their jobs.
13. Private respondents filed a manifestation and
motion praying that Floren Hotel be ordered to
reinstate them to their former positions since
after all, according to Floren Hotel, they were
not dismissed.
14. Floren Hotel argued that private respondents
cannot be reinstated since they were not
illegally dismissed but they had abandoned their
jobs and management simply considered them
dismissed for abandonment. There is no record,
however, that the Labor Arbiter resolved said
motion.
15. LA dismissed the complaints but ordered Floren
Hotel to pay private respondents their
proportionate 13th month pay, and service
incentive leave pay. He likewise ordered
petitioners to pay Calimlim and Rico indemnity.
16. LA found that Calimlim, Rico, and Bautista did
not report for work and they did not show any
order of dismissal, thus constructively, they
abandoned their work and were not illegally
dismissed. LA also ruled that Calimlim and Rico’s
demotion and reassignment were valid exercises
of management prerogatives. The reassignment
was intended to enable management to
supervise them more closely and did not involve
a diminution of wages. LA held Floren Hotel
liable for indemnity to Calimlim and Rico for not
observing the twin notices rule. On the absence
of any suspension order or notice of
dismissal concerning Abalos and Lopez, the
Labor Arbiter held that the allegation that they
were orally dismissed was insufficient, self-
serving, and baseless.
17. On appeal, the NLRC reversed the decision of
the LA and ordered the hotel management to
immediately reinstate complainants-appellants
to their former positions without loss of
seniority rights, with full backwages and other
benefits until they are actually reinstated. In the
event that reinstatement was no longer
possible, the respondent-appellees should pay
herein private respondents their separation pay
in addition to the payment of their full
backwages; their incentive leave pay and their
13th month pay, together with P1,000 to each of
them as indemnity.
18. The NLRC concluded that Floren Hotel failed to
prove that private respondents had abandoned
their work. They failed to serve private
respondents notices of termination based on
abandonment.
19. The NLRC added that Calimlim and Rico were
constructively dismissed when they were
demoted from room boys to janitors and
reclassified as probationary employees.
20. However, the NLRC denied private respondents’
claim for damages and attorney’s fees. It found
no evidence that petitioners acted maliciously
or in bad faith in dismissing the five private
respondents.
21. Later, the NLRC also denied petitioners’ motion
for reconsideration.
22. The CA agreed with the NLRC that the June 13,
1998, memorandum demoting Calimlim and
Rico to janitors and reclassifying them as
probationary employees constituted
constructive discharge. CA likewise ruled that
their right to due process was violated when
they were imposed the additional penalties of
demotion from room boys to janitors,
reassignment as part-time employees, and
change of their status from regular to
probationary for other alleged offenses for
which they were not given notice.
23. But CA held that the NLRC committed grave
abuse of discretion in declaring that Bautista,
Abalos and Lopez were illegally dismissed, since
they presented no other piece of evidence
besides the allegations in their position
papers. NLRC brushed aside the issue that
petitioners’ failure to serve notices of
termination was due to the immediate filing of
the complaints for illegal dismissal which made
the service of such notices superfluous.
Issues: a.) W/N private respondents were illegally
dismissed;
b.) W/N CA erred in ordering Floren Hotel to pay
Calimlim and Rico indemnity of P1,500
c.) W/N NLRC erred in ordering Floren Hotel to pay
all of private respondents their proportionate
13th month pay and incentive leave pay.
Held: First Issue – Yes.
24. SC cited that CA failed to adduce sufficient
evidence to prove the charge of abandonment.
Floren Hotel merely presented joint affidavits
from hotel supervisors Agustin Aninag and
Lourdes Cantago and other hotel employees
showing that Calimlim, Rico, and Bautista simply
went on absence without leave after they were
confronted with certain irregularities, and that
Abalos and Lopez likewise just left their
employment, also without filing leaves of
absence.
25. Those joint affidavits are insufficient as they do
not show that the absence of Calimlim, Rico,
Bautista, Abalos and Lopez were unjustified.
More important, they do not show any overt
act that proves that private respondents
unequivocally intended to sever their working
relationship with the petitioners. Mere absence
from work does not constitute abandonment.
26. Private respondents should have served them
with a notice of termination on the ground of
abandonment as required under Sec. 2, Rule
XIV, Book V, Rules and Regulation
Implementing the Labor Code.
27. 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
cases of abandonment of work, the notice shall
be served at the worker’s last known address.
28. But Floren hotel failed to comply with the
foregoing requirement.
29. None of the private respondents in this case had
any intention to sever their working
relationship. Just days after they were
dismissed, private respondents Calimlim, Rico,
Bautista, Abalos and Lopez filed complaints to
protest their dismissals.
30. The well-established rule is that an employee
who takes steps to protest his layoff cannot be
said to have abandoned his work.
31. Even during the proceedings before the Labor
Arbiter, Floren Hotel averred that private
respondents were never terminated, filed a
manifestation and motion asking that
petitioners be ordered to allow them back to
work. This is nothing if not an unequivocal
expression of eagerness to resume working.
32. In illegal dismissal cases, the employer bears the
burden of showing that the dismissal was for a
just or authorized cause. Failure by the
employer to discharge this burden, as in this
case, would necessarily mean that the dismissal
is not justified, and therefore illegal.
33. Floren Hotel argue that the CA misconstrued the
memorandum of June 13, 1998. They insist that
they had no intention of dismissing Calimlim and
Rico, as they have allowed Calimlim and Rico to
return to work after they submit their written
explanations for the drinking incident which
happened on June 6, 1998. Rather than a
constructive dismissal, Floren Hotel argue that
the temporary transfer of Calimlim and Rico to
janitorial positions was a valid exercise of the
management prerogative to assign their
employees to where they would be of the most
benefit to the hotel. This temporary
reassignment was intended solely to prevent
Calimlim and Rico from repeating their
infractions by denying them access to the hotel
rooms and keeping them busy and easier to
supervise in their new area assignments.
34. Floren Hotel further argue that the terms of
employment imposed in the memorandum did
not render continued employment impossible,
unreasonable or unlikely because there was
neither diminution of pay nor demotion
involved. They maintain that room boys and
janitors receive the same wages and that the
only difference between the two is that room
boys clean the rooms while janitors clean the
common areas.
35. SC were not persuaded. For the transfer of the
employee to be considered a valid exercise of
management prerogatives, the employer must
show that the transfer is not unreasonable,
inconvenient or prejudicial to the employee;
neither would it involve a demotion in rank or a
diminution of his salaries, privileges and other
benefits. Should the employer fail to discharge
this burden of proof, the employee’s transfer
shall be tantamount to constructive dismissal,
which has been defined as a quitting because
continued employment is rendered impossible,
unreasonable or unlikely, as in an offer involving
a demotion in rank and diminution in pay.
36. Here, Calimlim and Rico were being forced to
accept alternate work periods in their new jobs
as janitors, otherwise they would be
unemployed. Not only did their new schedule
entail a diminution of wages, because they
would only be allowed to work every other
week, the new schedule was also clearly for an
undefined period.
37. Indeed, it appears that the period could
continue for as long as management desired it.
These unreasonable new terms of employment
were imposed and issued two days before
Calimlim and Rico returned from their week-
long suspension. They were imposed for alleged
past infractions for which neither Calimlim nor
Rico was given the chance to be heard.
38. Under the circumstances, Floren hotel failed to
show the temporary transfer of Calimlim and
Rico could be a valid exercise of management
prerogatives. Even the employer’s right to
demote an employee requires the observance of
the twin-notice requirement.
Second Issue – Yes.
39. CA commited an error to affirm the NLRC
decision to award Calimlim and Rico indemnity
in addition to the measure of damages provided
in Article 279 of the Labor Code. The award of
indemnity is a penalty awarded only when the
dismissal was for just or authorized cause but
where the twin-notice requirement was not
observed.
Third issue, No.
40. The decision of the NLRC as regards the award
of 13th month pay and service incentive leave
pay became binding on Floren hotel because the
failure to question it before the CA amounts to
an acceptance of the ruling. In any event, the
award appears to us amply supported by
evidence and in accord with law.
41. SC modified CA’s decision. Floren Hotel/Ligaya
Chu, Dely Lim, and Jose Chua Lim are held liable
for illegally dismissing private respondents
Roderick A. Calimlim, Ronald T. Rico, Jun A.
Abalos, Lito F. Bautista and Gloria B. Lopez.
42. They are ordered (1) to reinstate private
respondents to their former positions without
loss of seniority rights, with full backwages and
other benefits until they are actually reinstated
or to pay their separation pay in addition to
their backwages, if reinstatement is no longer
feasible; (2) to jointly and solidarily
pay P2,589.00 to each of the private
respondents as proportionate 13th month pay
and service incentive leave pay for the period
January to June 1998, as computed in the
decision dated March 19, 1999, of the Labor
Arbiter.
Stellar Industries vs. NLRC, 252 SCRA 323, GR
117418, January 24, 1996
1. Stellar Industrial Services, Inc., an independent
contractor engaged in the business of providing
manpower services, employed Roberto H.
Pepito as a janitor on January 27, 1975 and
assigned the latter to work at the Maintenance
Base Complex of the Philippine Airlines (MBC-
PAL) in Pasay City.
2. There, Pepito toiled for a decade and a half.
According to Stellar, Pepito's years of service at
MBC-PAL were marred by various infractions of
company rules ranging from tardiness to
gambling, but he was nevertheless retained as a
janitor out of humanitarian consideration and to
afford him an opportunity to reform.
3. Stellar finally terminated his services on January
22, 1991 because of Pepito’s Absent Without
Official Leave (AWOL)/Virtual Abandonment of
Work - Absent from November 2 - December 10,
1990.
4. Pepito wrote in reply that during the period in
question, he was unable to report for work due
to severe stomach pain and that, as he could
hardly walk by reason thereof, he failed to file
the corresponding official leave of absence. A
medical certificate was attached in the
response.
5. As Stellar disbelieved Pepito’s explanation
regarding his absences, Pepito filed a complaint
for illegal dismissal, illegal deduction and
underpayment of wages, with prayer for moral
and exemplary damages and attorney's fees
before the NLRC.
6. LA opined that Pepito had duly proved that his
39-day absence was justified on account of
illness and that he was illegally dismissed
without just cause.
7. NLRC affirmed LA’s decision.
8. Stellar contends that NLRC acted with grave
abuse of discretion when it discussed and
resolved the issue of abandonment which
Pepitor had not, at any time, raised before it for
resolution.
9. Further, Stellar considers it patently erroneous
for NLRC to rule that the medical certificate
adduced by Pepito sufficiently established the
fact of sickness on his part which thereby
justified his absences.
10. Stellar argues that the award of back wages and
attorney's fees was not justified considering that
Pepito was validly dismissed due to serious
misconduct on his part.
11. Lastly, Stellar insists that the deductions it
imposed upon and collected from Pepito's salary
was authorized by a board resolution of Stellar
Employees Association, of which Pepito was a
member.
Issue: a.) W/N Pepito committed serious
misconduct for non-observance of company rules
and regulations and if so, a penalty of dismissal
meted to him by Stellar may be justified under the
circumstances.
Held: No.
12. Stellar's company rules and regulations on the
matter could not be any clearer, to wit:
Absence Without Leave
Any employee who fails to report for work
without any prior approval from his superior(s)
shall be considered absent without leave.
In the case of an illness or emergency for an
absence of not more than one (1) day, a
telephone call or written note to the head
office, during working hours, on the day of his
absence, shall be sufficient to avoid being
penalized.
In the case of an illness or an emergency for an
absence of two (2) days or more, a telephone
call to the head office, during regular working
hours, on the first day of his absence, or a
written note to the head office, (ex. telegram)
within the first three (3) days of his absence,
and the submission of the proper documents
(ex. medical certificate) on the first day he
reports after his absence shall be sufficient to
avoid being penalized.
1st offense - three (3) days suspension
2nd offense - seven (7) days suspension
3rd offense - fifteen (15) days suspension
4th offense - dismissal with a period of one (1)
year.
13. There was substantial compliance with said
company rule by Pepito. He immediately
informed his supervisor at MBC-PAL of the fact
that he could not report for work by reason of
illness. At the hearing, it was also established
without contradiction that Pepito was able to
talk by telephone to one Tirso Pamplona,
foreman at MBC-PAL, and he informed the latter
that he would be out for two weeks as he was
not feeling well. Added to this is his letter to the
chief of personnel which states that, on
November 2, 1990, he relayed to his supervisor
at MBC-PAL his reason for not reporting for
work and that he made follow-up calls to their
office when he still could not render services.
As earlier noted, these facts were never
questioned nor rebutted by Stellar.
14. While there is no record to show that approval
was obtained by Pepito with regard to his
absences, the fact remains that he complied
with the company rule that in case of illness
necessitating absence of two days or more, the
office should be informed beforehand about the
same, that is, on the first day of absence. Since
the cause of his absence could not have been
anticipated, to require prior approval would be
unreasonable. On this score, then, no serious
misconduct may be imputed to Pepito.
15. More importantly, private respondent duly
presented the requisite medical certificate.
True, Stellar did not accept the veracity of the
same, but it did so quite erroneously. Carlos P.
Callanga, Stellar's vice-president for operations,
interpreted the certificate submitted by Pepito:
a) The medical certificate merely states that
Pepito suffered from "alleged, abdominal pain"
but does not state that the abdominal pain was
so severe as to incapacitate him for work.
b) Because the medical certificate states that
the abdominal pain was merely "alleged," it was
doubted if such abdominal pain really existed
for the period in question.
c) From the medical certificate, it does not state
that said doctor actually treated Pepito for the
period of his absence.
d) The medical certificate also says Pepito was
suffering from alleged abdominal pains until
December 14, 1990, but that he could resume
work anytime thereafter. However, our records
show that Pepito was absent only until
December 10, 1990. If it is true that Pepito's
abdominal pains incapacitated him for work, he
should have been absent until December 14,
1990. These made them believe that the
medical certificate was secured only as an
afterthought and does not satisfactorily explain
Pepito's protracted absence.
1. Handwritten by the issuing doctor, it states in no
uncertain terms:
This is to inform that I had examined Roberto Pepito.
He has already recovered from his intestinal
abdominal pains suffered last Nov. 2/90 to Dec.
14/90.
He may resume his work anytime.
16. Thus, nowhere in said certificate is there any
indication that the abdominal pain suffered by
Pepito was only as alleged by him. It definitely
states that Pepito was personally examined by
the physician and that Pepito was really not in a
position to report for work from November 2 to
December 14, 1990 on account of actual, and
not merely alleged, intestinal abdominal pains.
17. The certificate further confirms Pepito's earlier
information given by him on November 2, 1990
 and which he duty relayed to his supervisor as
the true reason for his inability to work. Callanga
obviously misread, we hope unwittingly,
"intestinal abdominal pain" as "alleged
abdominal pain."
18. It should be noted that Callanga required Pepito
to make a written explanation regarding his
absences only on December 18, 1990. Pepito
accordingly complied with the same and he
attached therewith the medical certificate which
showed its date of issuance as December 14,
1990.
19. Thus, even before he was made to explain his
absences, he already had the medical certificate
to prove the reason therefor. To characterize
the procurement of the certificate as an
afterthought is consequently baseless.
20. Stellar's reliance on Pepito's past infractions as
sufficient grounds for his eventual dismissal, in
addition to his prolonged absences, is likewise
unavailing.
21. The correct rule is that previous infractions may
be used as justification for an employee's
dismissal from work in connection with a
subsequent similar offense which is not he case
here.
22. Here, Pepito’s absences were incurred with due
notice and compliance with company rules and
he had not thereby committed a "similar
offense" as those he had committed in the past.
23. Furthermore, as correctly observed by the labor
arbiter, those past infractions had either been
"satisfactorily explained, not proven, sufficiently
penalized or condoned by Stellar." In fact, the
termination notice furnished Pepito only
indicated that he was being dismissed due to his
absences from November 2, 1990 to December
10, 1990 supposedly without any acceptable
excuse.
24. There was no allusion that his dismissal was due
to his supposed unexplained absences on top of
his past infractions of company rules.
25. Regarding the amount deducted from Pepito's
salary, Stellar stresses that said deduction
concerning death aid benefits is lawful since
these were made in accordance with Board
Resolution No. 02-85 adopted on August 17,
1988 by the board of directors of the Stellar
Employees Association.
26. However, Article 241(n) of the Labor Code and
the implementing rules thereon in Section 13(a),
Rule VIII, Book III disallow such deductions.
Article 241(n) states that "(n)o special
assessment or other extraordinary fees may be
levied upon the members of a labor
organization unless authorized by a written
resolution of a majority of all the members of a
general membership meeting duly called for
the purpose. . . ."
27. The deduction could be characterized as a
special assessment for a "Death Aid Program."
Consequently, a mere board resolution of the
directors, and not by the majority of all the
members, cannot validly allow such deduction.
Also, a written individual authorization duly
signed by the employee concerned is a
condition sine qua non. Employees are
protected by law from unwarranted practices
that have for their object the diminution of the
hard-earned compensation due them. Pepito
must be extended that protection, especially in
view of his lowly employment status.