194 - JARDINE DAVIES, INC., Petitioner, v. THE NATIONAL LABOR RELATIONS Private respondent appealed to the NLRC.
ed to the NLRC. In its Decision dated March 17, 1986, the
COMMISSION, JARDINE DAVIES EMPLOYEES UNION (FFW) and VIRGILIO REYES
[G.R. No. 76272. July 28, 1999.]
FATCS: Petitioner is a domestic corporation engaged in general trading, including
the exclusive distribution in the country of the world-renowned "Union 76"
lubricating oil manufactured by Unoco Philippines, Inc. Private respondent was a
former sales representative of petitioner.
Petitioner engaged the services of a private investigation agency to conduct
surveillance and investigation pertinent to reports that some of petitioner’s
products, particularly the "Union 76" lubricating oil, were being illegally
manufactured, blended, packed and distributed. Consequently, a private
investigator of the said investigation agency, confirmed that there were really fake
"Union 76" lubricating oil in the market and reported further that the same were
indeed being illegally manufactured, blended, packed and distributed by private
respondent Virgilio Reyes.
Thereafter, a criminal complaint for violation of Article 189 on unfair competition
of the Revised Penal Code 2 was filed against private respondent and others.
Subsequently, private respondent was likewise charged administratively for having
committed serious misconduct inimical to the interest of petitioner company.
Accordingly, he was advised to go on an indefinite leave. This eventually led to his
termination from employment on February 23, 1983.
Meanwhile, all the materials seized by virtue of the search warrant issued were
released by order of the same court in view of a petition filed by private
respondent’s younger brother, Donato Reyes. He further proved that he was legally
engaged in the business of general merchandising, operating under the trade name
of Lubrix Conglomerate, a single proprietorship duly licensed by the government in
dealing with oil and lubricant products.
Relying on the foregoing facts, private respondent sued petitioner for illegal
dismissal. But the Labor Arbiter, Manuel R. Caday, dismissed his complaint.
In a Decision dated September 24, 1985, the labor arbiter is convinced that private
respondent was personally involved in the aforementioned illegal activity, the labor
arbiter ruled that the private respondent committed an act of serious misconduct,
fraud or wilful breach of trust reposed in him by petitioner, a just cause for
terminating employment.
NLRC reversed the labor arbiter’s judgment on the ground that there is no cogent
reason for petitioner to lose its trust and confidence on private respondent, there
being "no shadow of an act amounting to serious misconduct, fraud or breach of
trust" on the part of private Respondent. The NLRC disposed of the case as follows:j
"WHEREFORE, premises considered, the Decision appealed from is hereby SET
ASIDE and a new one entered ordering the respondent-appellee to reinstate
complainant-appellant with full backwages without deduction or qualification
whatsoever for earning elsewhere and without loss of seniority rights.
It’s motion for reconsideration having been denied, petitioner filed the instant
petition before us.
ISSUE: Whether public respondent committed grave abuse of discretion in
reversing the labor arbiter’s judgment which found a just and valid cause for
dismissal of private respondent by petitioner.
RULING: No. Private respondent’s dismissal was found illegal. In order to constitute
a just cause for dismissal, the act complained of must be "work-related" such as
would show the employee concerned to be unfit to continue working for the
employer. It is 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
of his position. However, the right of an employer to dismiss employees on account
of loss of trust and confidence must not be exercised arbitrarily and without
showing just cause, so as not to render the employee’s constitutional right to
security of tenure nugatory. The ground must be founded on facts established by
the employer who must clearly and convincingly prove by substantial evidence the
facts and incidents upon which loss of confidence in the employee may be fairly
made to rest; otherwise the dismissal will be rendered illegal.
In the case at bar, private respondent was suspended and eventually dismissed for
allegedly committing fraudulent acts and unfairly competing with petitioner. To
justify its administrative action, petitioner somehow grave credence to the
surveillance report implicating private respondent in the illegal manufacture,
blending, packing and distribution of petitioner’s products. For evidently, the
surveillance report is unreliable. As found by the NLRC, the conclusions therein
were mere deductions not supported by any substantial corroborating evidence.
Public respondent also observed that the petitioner failed to show concrete
evidence to controvert the proof presented by private respondent that the packing
of genuine "Union 76" oil in small containers was in support of the marketing policy
of petitioner. Accordingly, public respondent cannot be faulted in concluding that
petitioner failed to substantiate its claim as to the actual existence of fake "Union
76" products.
With the finding that private respondent was illegally dismissed, an award of
backwages is proper. Considering that private respondent was terminated from the
service on February 23, 1983, he is entitled to backwages up to three years only,
computed on the basis of his last monthly salary or pay.
In addition to backwages, illegally dismissed employees are entitled to either
reinstatement, if feasible, or separation pay, if reinstatement is no longer viable. In
our view, the circumstances obtaining in this case would not warrant the
reinstatement of the private Respondent. Thus, a more equitable disposition would
be an award of separation pay equivalent to one (1) month’s pay for every year of
service with petitioner, a fraction of at least six (6) months being considered as one
(1) whole year. In the computation of separation pay, the three-year period
wherein backwages are awarded must be included.
195 - JACKSON BUILDING CONDOMINIUM CORPORATION and/or RAZUL
REQUESTO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and FERDINAND GUMOGDA,
respondents.
G.R. No. 111515 July 14, 1995
FACTS: On November 22, 1989, private respondent was employed as a janitor by
petitioner with a monthly salary of P2,340.00 or a daily wage of P90.00.
On November 15, 1992, private respondent filed a 45-day leave of absence from
November 15, 1991 to December 29, 1991 to undergo an appendectomy, which
would necessitate complete bed rest for about thirty days from the date of
operation as shown by his medical certificate. This was granted by petitioner.
On January 3, 1992, private respondent informed petitioner Razul Requesto,
president of petitioner corporation, that he was physically fit to assume his work.
However, petitioners refused to accept him back contending that he had
abandoned his work.
On March 24, 1992, private respondent filed with the Labor Arbiter a complaint
against petitioners for illegal dismissal, underpayment of wages and non-payment
of thirteenth-month pay and service-incentive leave pay.
On July 12, 1992, petitioners submitted their position paper wherein they alleged
that private respondent was not dismissed but was merely advised to rest for
health reasons until he could procure a medical certificate attesting that he was fit
to work. They further alleged that private respondent failed to return to his
workplace or to submit the required medical certificate.
On October 30, 1992, the Labor Arbiter rendered a decision in favor of private
respondent.
Petitioners then appealed to NLRC, alleging that the Labor Arbiter committed grave
abuse of discretion. .However, NLRC affirmed in toto the decision of the Labor
Arbiter. A subsequent motion for reconsideration was denied.
ISSUE: 1.) Whether private respondent abandoned his work; and 2.) Whether
petitioners are liable for the payment of private respondent's back wages,
differential pay, thirteenth-month pay and service-incentive leave pay for 1991.
RULING: 1.) No. For abandonment to be a valid ground for dismissal, two requisites
must be present: the intention by an employee to abandon coupled with an overt
act from which it may be inferred that the employee had no more intention to
resume his work.
In the instant case, the said requisites are not present. The private respondent was
ready to assume his responsibilities considering that he had fully recovered from
the operation. Furthermore, the filing of a complaint for illegal dismissal by private
respondent is inconsistent with the allegation of petitioners that he had abandoned
his job. Surely, an employee's posture will be illogical if he abandons his work and
then immediately files an action for his reinstatement.
2.) Yes. The law on the matter refutes this legal challenge of petitioners.
Section 31 of R.A. No. 6715 which amended Article 279 of the Labor Code of the
Philippines provides that "an employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges
without loss of seniority rights and other privileges and to his full back wages,
inclusive of allowances, and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the time
of his actual reinstatement."
The award of back wages by NLRC to private respondent was predicated on the
ground that he was illegally dismissed and not on his failure to report for work.
Private respondent is likewise entitled to the thirteenth-month pay. Presidential
Decree No. 851, as amended by Memorandum Order No. 28, provides that
employees are entitled to the thirteenth-month pay benefit regardless of their
designation and irrespective of the method by which their wages are paid.
196 - ARC-MEN FOOD INDUSTRIES, INC., Petitioner, v. NATIONAL LABOR
RELATIONS COMMISSION and FABIAN ALCOMENDRAS, Respondents.
[G.R. No. 113721. May 7, 1997.]
FACTS: Private respondent alleges that he was a regular employee of the petitioner
firm as a company driver from September 1985 until he was unlawfully terminated
on January 23, 1990. That as a company driver he was required to render his
services to both the petitioner’s food and construction business; that since his
employment, he has never enjoyed the minimum wage, ECOLA and service
incentive leave pay.
Private respondent has been in the employ for four years and four months of which
he has been rendering faithful services and following the rules and regulations of
the company.
Rising to their defense, petitioner belied the allegations of the private respondent.
They claimed that private respondent was not illegally dismissed from his
employment but it was he who has abandoned his work.
Anent the issue of termination, petitioner disclosed that from December 2, 1989 up
to February 25, 1990, the plant was not in full operation and employees directly
connected with the plant including herein complainant were advised of the
shutdown and were told not to report for work. To prove that private respondent
was not terminated on January 23, 1990 is the fact that on January 29, 1990, he
secured and was given a cash advance of P700.00 as shown by the Temporary Cash
Advance Slip. It is inconceivable for the company to give cash advance "against
salary deductions" if he was already terminated on January 23, 1990 or six days
before private respondent was given the said cash advance.
Another evidence that private respondent was not dismissed is the fact that
petitioner formally advised him to report for work on February 25, 1990 which was
hand-delivered by Noli Paglinawan. Despite being advised to report for work
private respondent refused.
As shown in their Summary of Plant Operations will show that there were only two
(2) days of operation, on December 1, 1989 and February 20, 1990. There was no
operation for the whole month of January, 1990. As alleged, the private respondent
was included in the temporary lay-off during this period (from December 2, 1990
up to February 20, 1990) considering that there was no plant operation. However,
contrary to the allegation of the petitioner, they also presented the number of days
worked by the private respondent wherein for the month of December 1 to 31,
1989, the latter had worked for twenty-one (21) days and for January 1 to 20, 1990,
he worked 16.5 days. Assuming that there were only two days plant operation from
December 1, 1989 to February 20, 1990, then it is presumed that private
respondent was still reporting for duty during that period not for the hauling of
banana peelings but for some other purpose for which the respondent is engaged.
Thereafter, for unknown reason, private respondent was not anymore required to
work effective January 23, 1990, hence, he filed his complaint on February 5, 1990.
From the foregoing facts, the Labor Arbiter concluded that "the allegation that it
was private respondent who had abandoned his job is belied by the fact that he
immediately filed his complaint after he was terminated from his work on January
23, 1990" and that the report-to-work letter dated February 25, 1990 and cash
advance slip dated January 29, 1990 were dubious, the former being a mere after-
thought and the latter bearing an alleged forged signature of private Respondent.
Petitioner appealed to the NLRC but the NLRC upheld the findings of the Labor
Arbiter. NLRC echoing as it did that petitioner’s "theory of abandonment is contrary
to logic and sound reasoning in view of the immediate filing of the complaint for
illegal dismissal" and declaring that petitioner had not validly discharged its burden
of proving that the termination was for a valid or authorized cause.
ISSUE: Whether private respondent abandoned his work.
RULING: Yes. The over-reliance of both the Labor Arbiter and the NLRC on the
notion that the filing of a complaint for illegal dismissal is inconsistent with the
employer’s defense of abandonment by the employee of his work. The Labor
Arbiter and the NLRC, instead of at least reviewing whatever countervailing
evidence private respondent had vis-a-vis petitioner’s documentary proofs, simply
swept under the rug the issues of lay-off and abandonment of work, relying as they
did on the earlier mentioned notion of the inconsistency between the filing of a
complaint for illegal dismissal and the interposing of the defense of abandonment
by the employee of his work. The evidence on record indeed clearly shows that
private respondent was not illegally dismissed. He was temporarily laid off in view
of the temporary shut down of petitioner’s operations. When he was asked to
report back to work, he refused.
In the face of solid evidence of petitioner’s temporary plant shutdown during the
time that private respondent claims to have been illegally dismissed and of private
respondent’s receipt of notice to return to work and his refusal to do so, with full
awareness on the part of the Labor Arbiter and the NLRC as to the related
circumstance of the pendency of a criminal charge by petitioner against private
respondent, and considering the utter lack of evidence in negation of petitioner’s
own documentary evidence formidably establishing the veracity of its defense, it
was grave abuse of decision on the part of the Labor Arbiter and the NLRC to have
found petitioners liable for having illegally terminated private Respondent.
The management can temporarily suspend business operations or undertakings for
a period not exceeding six (6) months without having to pay separation pay to
workers, but the suspension must be done bona fide and not for the purpose of
defeating the rights of employees. Within this period, the employer-employee
relationship shall be deemed suspended.
Thus, when petitioner was to resume its operations on February 26, 1990, it sent a
notice to private respondent on February 25, 1990, however, private respondent
refused to receive said letter and did not report for work as required of him. Such
being the case, petitioner cannot compel private respondent to report for work.
The decision to resume his work as dump truck driver rests solely on him.
197 - PHILIPPINE COMMERCIAL INTERNATIONAL BANK, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and EDUARDO V. MATURAN,
respondents.
G.R. No. 114920 August 23, 1995
The instant petition involves the dismissal of private respondent Eduardo Maturan,
a bank teller of petitioner bank's General Santos City branch, whose services were
terminated on July 18, 1991 allegedly for incurring a cash shortage in the amount of
P10,000.00, for failure to return the P8,000.00 cash withdrawal of a client, Rebecca
Salud, and for extending unauthorized accommodations to clients. A complaint for
illegal dismissal was filed before the NLRC Sub-Regional Arbitration Branch No. XI in
General Santos City which thereafter rendered a decision, dated May 7, 1992,
declaring herein petitioner guilty of illegal dismissal and ordering the reinstatement
of respondent Maturan to his former position without loss of seniority rights and
privileges, and with payment of his back wages, allowances and other benefits from
the time of his illegal dismissal until promulgation of the decision, moral and
exemplary damages, and attorney's fees.
In so ruling, the labor arbiter declared that the penalty of dismissal is too harsh
considering that it had not been shown that private respondent had acted in bad
faith and with malice; that, on the contrary, if respondent was really guilty, he
would not have resorted to "client checking" because it would only expose his
anomaly, whereas he could just have immediately declared the amount he
supposedly abstracted as cash shortage; that the shortage had already been paid
for; and that respondent's dismissal is irregular in that it was "union motivated,"
plus the fact that it took some time before respondent's immediate superiors and
other bank officers actually conducted an investigation on the matter.
On appeal, public respondent NLRC rendered a resolution promulgated on March
8, 1993 which reversed and set aside the decision of the labor arbiter, declaring as
valid the dismissal of respondent and, accordingly, dismissing the complaint for lack
of merit. However, said resolution was subsequently reconsidered and modified in
another resolution of the same commissioners promulgated on December 15,
1993, with the following dispositive portion:
WHEREFORE, premises considered, the resolution of the
Commission dated March 8, 1993 is hereby Modified in the
sense that respondent bank is hereby ordered to reinstate
complainant but without backwages from the time he was
terminated up to the promulgation of the decision of the Labor
Arbiter. Complainant shall be reinstated to a comparable
position like that of a Customer Relations Assistant in lieu of the
position of a teller. In case reinstatement is no longer feasible,
the determination of which is tasked to the Labor Arbiter below
during the execution stage, complainant is entitled to
separation pay fixed in the amount of one (1) month salary,
inclusive of other fringe benefits based on his latest salary for
every year of service, a fraction of six (6) months to be
considered as one (1) whole year. In the alternative,
complainant may be allowed to avail of the company
retirement plan if he qualifies, or whichever has greater
benefits.
 Finally, respondent is further ordered to pay complainant his
accrued backwages from the time it was withheld during the
pendency of the appeal up to the rendition of this judgment.
No costs.
ISSUE: Whether loss of trust and confidence justifies the dismissal of the private
respondent.
RULING: No. Respondent Maturan was involved in a single incident of cash
shortage in the amount of P10,000.00. As correctly found by the labor arbiter,
respondent is not a habitual violator, which undesirable category would have
warranted his dismissal.
In Allied Banking Corporation case, there was a provision in the collective
bargaining agreement which granted a yearly allowance for tellers to cover
shortages which they may incur during the year. Thus, the NLRC held that this, in
effect, is a recognition that among the hazards of tellers is the incidence of
shortages and overages up to a certain limit. This very provision, therefore, is a
clear indication that such errors are understandingly viewed and forgiven provided
they do not go beyond the allowable limit.
The ruling therein supports the labor arbiter's observation that "in tellering,
regardless of how long one has been in the trade, and how careful one is, there is
no guarantee that one can never incur cash shortage or overage. No teller for that
matter can testify that in his stint as such, everyday his actual cash on hand always
tallies with the figure appearing in the teller's validating machine tape as the
'should be cash on hand'. Cash shortages and overages are but ordinary and normal
banking activities." As a matter of fact, it is not disputed that there were other
shortages or overages incurred by the other tellers in petitioner's General Santos
City branch at about the same time that this particular infraction of private
respondent occurred.
than the Manager, Mr. Cubar and, as the records reveal, it can be safely assumed
that the same was approved because the amount was fully paid by respondent on
March 28, 1990. The imposition of a penalty is, therefore, unwarranted.
The manner by which private respondent dealt with the missing money only serves
to emphasize his good faith.
To be a valid ground for dismissal, loss of trust and confidence must be based on a
wilful breach of trust. And, as realistically stressed by the Solicitor General, unless
based on a ground provided by law and supported by substantial evidence,
dismissal will be disallowed, for what is at stake is not only the employee's position,
but also his means of livelihood. Considering that private respondent was acting in
good faith, his dismissal would run counter to such established doctrinal rulings.
There is grossly insufficient evidence to warrant the dismissal of private respondent
on the ground of loss of trust and confidence. We are convinced, however, that the
filing of the complaint for illegal dismissal and the protracted proceedings with
confrontational exchanges therein between the parties have now evidently
strained their erstwhile harmonious relationship. The reinstatement of private
respondent would, in our view, no longer be beneficial to either party. An award of
back salaries and severance pay in lieu of reinstatement would thus appear to be in
order

We must add, however, that these occurrences are subject to certain limitations,
depending on the amount involved as well as the number and the gravity of the
infractions. As earlier explained, we do not find the infraction committed by private
respondent to be so grave as to warrant his dismissal. We are not even inclined to
conform with the penalty imposed by respondent NLRC, that is, the non-payment
of back wages from the time of respondent's dismissal up to the rendition of the
decision of the labor arbiter (or from July 18, 1991 to May 7, 1992), considering
that he has already paid, through salary deductions, the amount of P10,000.00.
Moreover, this mode of payment was even recommended for approval by no less