#1 Duration of the Project or Specific Undertaking

GADIA, ET AL. VS. SYKES ASIA, INC . (JAN. 28, 2015, G.R. NO. 209499)

FACTS

• Sykes Asia is a corporation engaged in BPO which provides support to its

international clients by carrying on some of their operations, governed by service
contracts that it enters with them.
• Alltel Communications, Inc, a United States-based telecommunications firm,
contracted Sykes Asia’s services to accommodate the needs and demands of
Alltel clients for its postpaid and prepaid services.
• Sykes Asia hired petitioners as CSR, team leaders, and trainers for the Alltel
Project.
• Alltel informed Sykes that it was terminating all support services provided by
Sykes to the Alltel Project. Sykes Asia sent each petitioner end-of-life notices,
informing them of their dismissal from employment due to the termination of the
Alltel Project.
• Petitioners filed separate complaints for illegal dismissal against Sykes praying
for reinstatement, backwages, 13th month pay, SIL pay, night shift differential,
moral and exemplary damages and attorney’s fees.

PETITIONER alleged that their dismissal was unjust as the same was effected without
substantive and procedural due process.

RESPONDENT averred that petitioners were not regular employees but merely project-
based employees as as such, the termination of the Alltel Project served as a valid ground
for their dismissal; that it was expressly indicated in employment contracts that their
positions are “project-based” and thus, “co-terminus to the project”; that they complied
with the requirements of procedural due process by furnishing each of them their
notices of termination at least 30 days prior to their respective dates of dismissal.

• LA ruled in favour of Sykes. It found that petitioners are merely project-based

employees, as their respective employment contracts indubitably provided for the
duration and term of their employment, as well as the specific project to which
they are assigned.
• NLR found that petitioners could not be properly characterized as project-based
employees, ratiocinating that while it was made known to petitioners that their
employment would be co-terminus to the Alltel Project, it was not determined
 nor made known to petitioners, at the time of hiring, when the said project would
end, be terminated, or be completed. 
• CA annulled and set aside the ruling of the NLRC. It held that a perusal of
petitioners' respective employment contracts readily shows that they were hired
exclusively for the Alltel Project and that it was specifically stated therein that
their employment would be project-based. The CA further held that petitioners'
employment contracts need not state an actual date as to when their
employment would end, opining that it is enough that such date is determinable. 

ISSUE

• Whether the CA is correct in ruling that petitioners were merely project-based

employees, and thus, validly dismissed from service

RULING

• YES. In this case, records reveal that Sykes Asia adequately informed petitioners
of their employment status at the time of their engagement, as evidenced by the
latter's employment contracts which similarly provide that they were hired in
connection with the Alltel Project, and that their positions were "project-based
and as such is co-terminus to the project." In this light, the CA correctly ruled that
petitioners were indeed project-based employees, considering that: (a) they were
hired to carry out a specific undertaking, i.e., the Alltel Project; and (b) the
duration and scope of such project were made known to them at the time of
their engagement, i.e., "co-terminus with the project
• CA correctly stressed that "[t]he law and jurisprudence dictate that 'the duration
of the undertaking begins and ends at determined or determinable times'" while
clarifying that "[t]he phrase 'determinable times' simply means capable of being
determined or fixed." In this case, Sykes Asia substantially complied with this
requisite when it expressly indicated in petitioners' employment contracts that
their positions were "co-terminus with the project." To the mind of the Court, this
caveat sufficiently apprised petitioners that their security of tenure with Sykes
Asia would only last as long as the Alltel Project was subsisting. In other words,
when the Alltel Project was terminated, petitioners no longer had any project to
 work on, and hence, Sykes Asia may validly terminate them from employment

Article 294 of the Labor Code, as amended, distinguishes a project-based employee from a

regular employee as follows:

Art. 294. Regular and casual employment. — The provisions of written agreement to

the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade of
the employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the
time of the engagement of the employee or where the work or services to be performed
is seasonal in nature and the employment is for the duration of the season.

A project employee is assigned to a project which begins and ends at determined or

determinable times. Unlike regular employees who may only be dismissed for just and/or
authorized causes under the Labor Code, the services of employees who are hired as "
project[-based] employees" may be lawfully terminated at the completion of the
project.

For an employee to be considered project-based, the employer must show compliance with
two (2) requisites, namely that: (a) the employee was assigned to carry out a specific project
or undertaking; and (b) the duration and scope of which were specified at the time they
were engaged for such project.

Case # 2: DIONARTO Q. NOBLEJAS vs. ITALIAN MARITIME ACADEMY PHILS., INC., CAPT.
NICOLO S. TERREI, RACELI B. FERREZ and MA. TERESA R. MENDOZA
[G.R. No. 207888. June 9, 2014.]

Facts:

Petitioner Dionarto Q. Noblejas (Noblejas) filed a complaint for illegal dismissal, tax refund,
moral and exemplary damages, non-payment of 13th month pay, food, gasoline and
schooling allowances, health insurance, monetized leave, and attorney's fees, against Italian
Maritime Academy Phils., Inc. (IMAPI), Capt. Nicolo S. Terrei (Capt. Terrei) , Raceli S. Ferrez (
Ferrez), and Ma. Teresa R. Mendoza (Mendoza).

IMAPI was a training center for seamen and an assessment center for determination of the
qualifications and competency of seamen and officers for possible promotion. Record
shows that Procerfina SA. Terrei, IMAPI President, wrote a Letter to Noblejas informing him
that he had been appointed as training instructor/assessor of the company on a
contractual basis for a period of three (3) months effective May 20, 2009. After the
expiration of the 3-month period, IMAPI hired Noblejas anew as training
instructor/assessor with the same salary rate, but no written contract was drawn for his
rehiring.

The absence of a written contract to cover the renewal of his employment became
Noblejas’ major concern. To address all his apprehensions, he wrote Capt. Terrei a letter,
dated March 16, 2010, requesting that a new contract be executed. Noblejas averred that
the company did not act on his letter/request, so he sought an audience with Capt. Terrei
on March 16, 2010. During the meeting, an altercation between them ensued. He claimed
Respondents presented a different version of what took place on March 16, 2010.
According to respondents, Noblejas got angry, hurled invectives against Ferrez and even
threatened to file a case against them. The following day, March 17, 2010, he did not report
for work anymore and filed the complaint against them.

Respondents theorized that the complaint was filed on the mistaken impression by
Noblejas that the failure to meet his demands, enumerated in his March 9, 2010 letter,
was tantamount to his termination from employment.

On October 15, 2010, Labor Arbiter Lutricia F. Quitevis-Alconcel (LA) handed down her
decision, finding that Noblejas was illegally dismissed from his employment, and awarded
him limited backwages. On October 27, 2011, the NLRC reversed the LA decision.

NLRC reversed the LA decision in a judgment 9 exonerating respondents from the charge
of illegal dismissal. The NLRC explained that there was no showing that respondents
committed any positive and overt act of dismissal and that the claim of Noblejas that Capt.
Terrei ordered Ferrez to terminate his employment was not substantiated.

CA rendered the challenged decision finding the petition for certiorari to be devoid of merit.
It upheld the finndings of the NLRC that Noblejas was a contractual employee of IMAPI and
that there was no evidence to prove that he was dismissed from employment.

Issue: Whether there is an illegal dismissal

Held: Held: No, there is no illegal dismissal

Before the Court tackles the issue of illegal dismissal, there should first be a determination
of the status of his employment. In this regard, the Court finds Noblejas to be a regular
employee of IMAPI.

Pursuant to Article 280 of the Labor Code, there are two kinds of regular employees,
namely: (1) those who are engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer; and (2) those who have rendered
at least one year of service, whether continuous or broken, with respect to the activities in
which they are employed. 13 Regular employees are further classified into (1) regular
employees — by nature of work and (2) regular employees — by years of service.

In the case at bench, Noblejas was employed by IMAPI as a training instructor/assessor for
a period of three (3) months effective May 20, 2009. After the end of the 3-month period, he
was rehired by IMAPI for the same position and continued to work as such until March 16,
2010. There is no dispute that the work of Noblejas was necessary or desirable in the
business or trade of IMAPI, a training and assessment center for seamen and officers of
vessels. Moreover, such continuing need for his services is sufficient evidence of the
necessity and indispensability of his services to IMAPI's business. Taken in this light,
Noblejas had indeed attained the status of a regular employee at the time he ceased to
report for work on March 17, 2010.

There was, however, no illegal dismissal.

Fair evidentiary rule dictates that before employers are burdened to prove that they did
not commit illegal dismissal, it is incumbent upon the employee to first establish by
substantial evidence the fact of his or her dismissal. The Court is not unmindful of the rule
in labor cases that the employer has the burden of proving that the termination was for a
valid or authorized cause. It is likewise incumbent upon the employees, however, that
they should first establish by competent evidence the fact of their dismissal from
employment. Mere allegation is not evidence.

Aside from his mere assertion, no corroborative and competent evidence was adduced by
Noblejas to substantiate his claim that he was dismissed from employment. The record is
bereft of any indication that he was prevented from returning to work or otherwise
deprived of any work assignment. It is also noted that no evidence was submitted to show
that respondent Ferrez, the secretary of Capt. Terrei, was actually authorized by IMAPI to
terminate the employment of the company's employees or that Ferrez was indeed
instructed by Capt. Terrei to dismiss him from employment.

Here, there is no sufficient proof showing that Noblejas was actually laid off from work. In
any event, his filing of a complaint for illegal dismissal, irrespective of whether
reinstatement or separation pay was prayed for, could not by itself be the sole
consideration in determining whether he has been illegally dismissed. All circumstances
surrounding the alleged termination should also be taken into account.

For the above reasons, the Court sustains the LA in granting Noblejas proportionate 13th
month pay covering the period of January 1, 2010 to March 15, 2010 in the aggregate
amount of P15,625.00. 23. Furthermore, the respondents should accept him back and
reinstate him to his former position. There should, however, be no payment of backwages
under the principle of "no work, no pay”.
#3 JONATHAN V. MORALES, petitioner, vs. HARBOUR CENTRE PORT TERMINAL, INC.,
respondent. ||| 
G.R. No. 174208, [January 25, 2012]

PEREZ, J:

FACTS:

On May 16, 2000, Jonathan Morales was hired by Harbour Center Port Terminal, Inc as an
Accountant and Acting Finance Officer with a monthly salary of 18k.

Regularized on Nov 17, 2000, he was promoted to Division Manager of the Accounting
Department with a monthly salary of 33,700 plus allowances.

Subsequent to Harbour's transfer to its new offices in Tondo in 2003, Morales was
reassigned to Operations Cost Accounting thru a memorandum issued by Singson (the new
Admin Manager), noted by Filar (VP for Admin and Finance) and approved by its President
and CEO, Suazo Jr.

On March 31, 2003, Morales wrote Singson protesting that his reassignment was a clear
demotion since the position to which he was transferred was not included in Harbour's
plantilla.

Singson issued a memorandum to the effect that "transfer of employees is a management

prerogative" and that Harbour had the "right and responsibility to find the perfect balance
between the skills and abilities of employees to the needs of the business."

Morales became absent from work and/or tardy, so Singson issued to Morales a
memorandum denominated as a First Warning in April 2003, and then a Second Warning
on May 6, 2003 and a Notice to Report for and Work and Final Warning on May 22, 2003.

In the meantime, Morales filed a complaint against Harbour, Filart and Singson, for
constructive dismissal, moral and exemplary damages as well as attorney's fees, before the
NLRC.
PETITIONER'S CONTENTION:

Morales alleged that subsequent to its transfer to its new offices, Harbour suspended all
privileges enjoyed by its Managers, Division Chiefs and Section Heads; that in March 2003
Filart and Suarez (Treasurer) informed him that he was going to be terminated and had
only 3 weeks to look for another job; that having confirmed his impending termination,
Filart decided to "temper" it by reassigning him to a position which was not included in
Harbour's plantilla, considered as a demotion and operated as a termination from
employment as of said date.

He maintained that he suffered great humiliation and was deprived of his office and
equipments, he received no further instructions regarding his new position which left him
no other choice but to file a complaint for constructive dismissal.

RESPONDENT'S CONTENTION:

Filar and Singson argued that Morales abandoned his employment and was not
constructively dismissed; that Morales was negligent and was confronted by Filart
sometime in March 2003 about his lapses in his work performance which he also admitted,
that as a consequence, Harbour reassigned him to Operations Cost Accounting as an
exercise of its management prerogative to assign its employees to jobs for which they are
best suited; and that despite Singson's reply to his protest, Morales chose to stop reporting
for work.

Labor Arbiter (2003): Dismissed Morales' complaint for lack of merit. It ruled that Morales'
reassignment was a valid exercise of management prerogative which cannot be construed
as constructive dismissal absent showing of bad faith and diminution of his salary and
benefits.

NLRC 3rd Division (appeal, 2005) : NLRC Decision was set aside finding that Morales'
reassignment was a clear demotion despite lack of showing of diminution of salaries and
benefits.

CA: Reversed NLRC's 2005 decision upon finding that the reassignment was a valid exercise
of management prerogative; that the entailed no demotion in rank, salaries and benefits
and rather than being terminated, Morales refused his new assignment by taking a leave of
absence disregarding Harbour's warnings.

ISSUE:
Whether or not the change in the position of Morales constituted constructive dismissal

HELD:

YES.

Constructive dismissal exists where there is cessation of work because "continued

employment is rendered impossible, unreasonable or unlikely, as an offer involving a
demotion in rank or a diminution in pay" and other benefits. Aptly called a dismissal in
disguise or an act amounting to dismissal but made to appear as if it were not, constructive
dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an
employer becomes so unbearable on the part of the employee that it could foreclose any
choice by him except to forego his continued employment. In cases of a transfer of an
employee, the rule is settled that the employer is charged with the burden of proving
that its conduct and action are for valid and legitimate grounds such as genuine
business necessity and that the transfer is not unreasonable, inconvenient or
prejudicial to the employee. If the employer cannot overcome this burden of proof, the
employee's transfer shall be tantamount to unlawful constructive dismissal.

Harbour miserably failed to discharge the foregoing onus. While there was a lack of
showing that the transfer or reassignment entailed a diminution of salary and benefits, one
fact that must not be lost sight of was that Morales was already occupying the position of
Division Manager at the Accounting Department as a consequence of his promotion to said
position. Concurrently appointed as member of Management Committee (MANCOM),
Morales was subsequently reassigned "from managerial accounting to Operations Cost
Accounting", without any mention of the position to which he was actually being
transferred. That the reassignment was a demotion is, however, evident from Morales' new
duties which, far from being managerial in nature, were very simply and vaguely described
as inclusive of "monitoring and evaluating all consumables requests, gears and equipments
related to Harbour's operations" as well as "close interaction with [its] sub-contractor Bulk
Fleet Marine Corporation." Morales' demotion is evident from the fact that his
reassignment entailed a transfer from a managerial position to one which was not even
included in the corporation's plantilla.

Admittedly, the right of employees to security of tenure does not give them vested rights to
their positions to the extent of depriving management of its prerogative to change their
assignments or to transfer them. By management prerogative is meant the right of an
employer to regulate all aspects of employment, such as the freedom to prescribe work
assignments, working methods, processes to be followed, regulation regarding transfer of
employees, supervision of their work, lay-off and discipline, and dismissal and recall of
workers. Although jurisprudence recognizes said management prerogative, it has
been ruled that the exercise thereof, while ordinarily not interfered with, is not
absolute and is subject to limitations imposed by law, collective bargaining
agreement, and general principles of fair play and justice. Thus, an employer may
transfer or assign employees from one office or area of operation to another, provided
there is no demotion in rank or diminution of salary, benefits, and other privileges, and the
action is not motivated by discrimination, made in bad faith, or effected as a form of
punishment or demotion without sufficient cause. Indeed, having the right should not be
confused with the manner in which that right is exercised.

Although much had been made about Morales' supposed refusal to heed his employer's
repeated directives for him to return to work, our perusal of the record also shows that
Harbour's theory of abandonment of employment cannot bear close scrutiny. As a just and
valid ground for dismissal, at any rate, abandonment requires the deliberate, unjustified
refusal of the employee to resume his employment, without any intention of returning.
Since an employee like Morales who takes steps to protest his dismissal cannot logically be
said to have abandoned his work, it is a settled doctrine that the filing of a complaint for
illegal dismissal is inconsistent with abandonment of employment.

LABOR Case No. 4

briefed by (more like. . .arranged by): Liwag, Angelene L.

Topic: Transfer

ALLIED BANKING CORPORATION vs. CA and POTENCIANO GALANIDA

FACTS:

• Potenciano Galanida was hired by Allied Banking (1978) and rose from accountant-book keeper to -
> assistant manager (1991). His appointment was covered by a "Notice of Personnel Action" which
provides as one of the conditions of employment the provision on Allied Banking's right to transfer
employees: "REGULAR APPOINTMENT: . . . It is understood that the bank reserves the right to transfer
or assign you to other departments or branches of the bank as the need arises and in the interest of
maintaining smooth and uninterrupted service to the public."
• Galanida was promoted several times and was transferred to several branches (from 1978 –
Tagbilaran Branch > Lapulapu > Mandaue > Tagbilaran >Dumaguete >Lapulapu City Branch, Cebu >
Carbon Branch, Cebu > Jakosalem Regional Branch, Cebu City in 1994)
• Effecting a rotation of officers assigned in the Cebu home base, Allied Bank listed Galanida as 2nd
in the order of priority of assistant managers to be assigned outside of Cebu City having been
stationed in Cebu for 7 years already. Galanida manifested his refusal to be transferred to Bacolod
City citing as reason parental obligations, expenses, and the anguish that would result if he is away
from his family. He then filed a complaint before the Labor Arbiter for constructive dismissal.
• Subsequently, Allied bank informed Galanida that he was to report to the Tagbilaran City Branch
effective May 1994. In a letter dated June 1994, Allied bank warned Galanida: "There is no
discrimination in your transfer. In fact, among the officers mentioned, only you have refused the new
assignment citing difficulty of working away from your family as if the other officers concerned do not
suffer the same predicament. To exempt you from the officer transfer would result in favoritism in your
favor and discrimination as against the other officers concerned. Your objection on the ground of your
length of service is without merit. As discussed, your refusal to follow instruction concerning your
transfer and reassignment to Bacolod City and to Tagbilaran City is penalized under Article XII of the
Bank's Employee Discipline Policy and Procedure (EDPP). . .

XII. Transfer and Reassignment - Refusal to follow instruction concerning transfers and reassignments.

First and subsequent offenses — penalty may range from suspension to dismissal as determined by
management. The employee shall be required to comply with the order of transfer and reassignment, if
the penalty is not termination. Please explain in writing within three (3) days from receipt hereof why no
disciplinary action should be meted against you.”

• Galanida charged Allied Bank with discrimination and favoritism in ordering his transfer.
• On October 5, 1994, Galanida received an inter-office communication / "Memo” dated September 8,
1994 from Allied Bank – the Memo informed Galanida that Allied Bank had terminated his services
effective September 1, 1994. The reasons given for the dismissal were: (1) Galanida's continued
refusal to be transferred from the Jakosalem, Cebu City branch; and (2) his refusal to report for work
despite the denial of his application for additional vacation leave. "Your refusal to follow instruction
concerning your transfer and reassignment to Bacolod City and to Tagbilaran City is without any
justifiable reason and constituted violations of Article XII of the Bank's EDPP . . .In view of the foregoing,
please be informed that the Bank has terminated your services effective September 1, 1994.”
__

LABOR ARBITER: Labor Arbiter held that Allied Bank had abused its management prerogative in
ordering the transfer of Galanida to its Bacolod and Tagbilaran branches. In ruling that Galanida's
refusal to transfer did not amount to insubordination, the Labor Arbiter misquoted this Court's
decision in Dosch v. NLRC,

"While it may be true that the right to transfer or reassign an employee is an employer's exclusive
right and the prerogative of management, **such right is not absolute**. Refusal to obey a transfer
order cannot be considered insubordination where employee cited reason for said refusal, such as that of
being away from the family." **
Labor Arbiter reasoned that Galanida's transfer was inconvenient and prejudicial because Galanida
would have to incur additional expenses for board, lodging and travel. On the other hand, the Labor
Arbiter held that Allied Bank failed to show any business urgency that would justify the transfer.

NLRC: NLRC likewise ruled that Allied Bank terminated Galanida without just cause. The NLRC
agreed that the transfer order was unreasonable and unjustified, considering the family
considerations mentioned by Galanida. The NLRC characterized the transfer as a demotion since the
Bacolod and Tagbilaran branches were smaller than the Jakosalem branch, a regional office, and
because the bank wanted Galanida, an assistant manager, to replace an assistant accountant in the
Tagbilaran branch. The NLRC found unlawful discrimination since Allied Bank did not transfer several
junior accountants in Cebu. The NLRC ruled that Galanida's termination was illegal for lack of due
process. The NLRC stated that Allied Bank did not conduct any hearing. The NLRC declared that
Allied Bank failed to send a termination notice, as required by law for a valid termination. The Memo
merely stated that Allied Bank would issue a notice of termination, but the bank did not issue any
notice. The NLRC concluded that Allied Bank dismissed Galanida in bad faith, tantamount to an
unfair labor practice as the dismissal undermined Galanida's right to security of tenure and equal
protection of the laws.

CA: held that Galanida's refusal to comply with the transfer orders did not warrant his dismissal. The
CA ruled that the transfer from a regional office to the smaller Bacolod or Tagbilaran branches was
effectively a demotion. The CA agreed that Allied Bank did not afford Galanida procedural due
process because there was no hearing and no notice of termination. The Memo merely stated that
the bank would issue a notice of termination but there was no such notice.

___

ALLIED BANK's contention:

argues that the transfer of Galanida was a valid exercise of its management prerogative. Allied
Bank contends that Galanida's continued refusal to obey the transfer orders constituted willful
disobedience or insubordination, which is a just cause for termination under the Labor Code.

GALANIDA's contention:

Galanida defended his right to refuse the transfer order. The memorandum for Galanida filed with
the SC, prepared by Atty. Durano, the Court's ruling in Dosch v. NLRC, thus:

. . . Galanida's refusal to transfer falls well within the ruling of the SC in Helmut Dosch vs. NLRC:
“Refusal to obey a transfer order cannot be considered insubordination where employee cited
reason for said refusal, such as that of being away from the family."

___

MAIN ISSUE: Whether Galanida could validly refuse the TRANSFER orders on the ground of
parental obligations, additional expenses, and the anguish he would suffer if assigned away
from his family?

RULING:

No, Galanida cannot validly refuse the transfer orders on the ground of parental obligations,
additional expenses, and the anguish he would suffer if assigned away from his family.

• The rule is that the transfer of an employee ordinarily lies within the ambit of the employer's
prerogatives. The employer exercises the prerogative to transfer an employee for valid reasons and
according to the requirement of its business, provided the transfer does not result in demotion in
rank or diminution of the employee's salary, benefits and other privileges. In illegal dismissal cases,
the employer has the burden of showing that the transfer is not unnecessary, inconvenient and
prejudicial to the displaced employee. The constant transfer of bank officers and personnel with
accounting responsibilities from one branch to another is a standard practice of Allied Bank, which
has more than a hundred branches throughout the country. Allied Bank does this primarily for internal
control. It also enables bank employees to gain the necessary experience for eventual promotion.
The Bangko Sentral ng Pilipinas, in its Manual of Regulations for Banks and Other Financial
Intermediaries, requires the rotation of these personnel. The Manual directs that the "duties of
personnel, handling cash, securities and bookkeeping records should be rotated" and that such
rotation "should be irregular, unannounced and long enough to permit disclosure of any
irregularities or manipulations." → Galanida was well aware of Allied Bank's policy of periodically
transferring personnel to different branches. Assignment to the different branches of Allied Bank
was a condition of Galanida's employment. Galanida consented to this condition when he signed the
Notice of Personnel Action. The evidence on record contradicts the charge that Allied Bank
discriminated against Galanida and was in bad faith when it ordered his transfer. Allied Bank's letter
of 13 June 1994 showed that at least 14 accounting officers and personnel from various branches,
including Galanida, were transferred to other branches. Allied Bank did not single out Galanida. The
same letter explained that Galanida was second in line for assignment outside Cebu because he had
been in Cebu for 7 years already. The person first in line, Assistant Manager Roberto Isla, who had
been in Cebu for more than 10 years, had already transferred to a branch in Cagayan de Oro City. We
note that none of the other transferees joined Galanida in his complaint or corroborated his
allegations of widespread discrimination and favoritism. As regards Ms. Co, Galanida's letter of 16
June 1994 itself showed that her assignment to Cebu was not in any way related to Galanida's
transfer. Ms. Co was supposed to replace a certain Larry Sabelino in the Tabunok branch. The
employer has the prerogative, based on its assessment of the employees' qualifications and
competence, to rotate them in the various areas of its business operations to ascertain where they
will function with maximum benefit to the company. Neither was Galanida's transfer in the nature of
 a demotion. Galanida did not present evidence showing that the transfer would diminish his salary,
benefits or other privileges. Instead, Allied Bank's letter of 13 June 1994 assured Galanida that he
would not suffer any reduction in rank or grade, and that the transfer would involve the same rank,
duties and obligations. There is also no basis for the finding that Allied Bank was guilty of unfair
labor practice in dismissing Galanida. Unfair labor practices relate only to violations of "the
constitutional right of workers and employees to self-organization" and are limited to the acts
enumerated in Article 248 of the Labor Code, none of which applies to the present case. There is no
evidence that Galanida took part in forming a union, or even that a union existed in Allied Bank.
• In ruling for the employer, the Court upheld the transfer from one city to another WITHIN THE
COUNTRY as valid as long as there is NO BAD FAITH on the part of the employer.
• Galanida, through counsel, invokes the Court's ruling in Dosch v. NLRC. Dosch, however, is NOT
applicable to the present case. Dosch refused a transfer consequential to a promotion. We upheld
the refusal because no law compels an employee to accept a promotion, and because the position
Dosch was supposed to be promoted to did not even exist at that time. This left as the only basis for
the charge of insubordination a letter from Dosch in which the Court found "not even the slightest hint
of defiance, much less . . . insubordination." [yung case natin ay hindi about accepting a promotion -
transfer]. Moreover, the transfer of an employee to an overseas post, as in the Dosch case, cannot be
likened to a transfer from one city to another within the country, which is the situation in the present
case. The distance from Cebu City to Bacolod City or from Cebu City to Tagbilaran City does not
exceed the distance from Baguio City to Laoag City or from Baguio City to Manila, which the Court
considered a reasonable distance in PT&T v. Laplana.
• The refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an
employer. Employees may object to, negotiate and seek redress against employers for rules or orders
that they regard as unjust or illegal. However, until and unless these rules or orders are declared
illegal or improper by competent authority, the employees ignore or disobey them at their peril. For
Galanida's continued refusal to obey Allied Bank's transfer orders, we hold that the bank dismissed
Galanida for just cause in accordance with Article 282(a) of the Labor Code. Galanida is thus not
entitled to reinstatement or to separation pay.

ART. 282.Termination by employer. — An employer may terminate an employment for any of the
following causes:

(a)Serious misconduct or willful disobedience by the employee of the lawful orders of his employer
or representative in connection with his work

____

ANOTHER ISSUE:

Whether Galanida's dismissal violated the requirement of notice and hearing?

RULING:

No.
• To be effective, a dismissal must comply with Section 2(d), Rule 1, Book VI of the Omnibus Rules
Implementing the Labor Code ("Omnibus Rules"), which provides:
For termination of employment based on just causes as defined in Article 282 of the Labor Code:

(i)A written notice served on the employee specifying the ground or grounds of termination, and
giving said employee reasonable opportunity within which to explain his side.

(ii)A hearing or conference during which the employee concerned, with the assistance of counsel if
he so desires is given opportunity to respond to the charge, present his evidence, or rebut the
evidence presented against him.

(iii)A written notice of termination served on the employee indicating that upon due consideration
of all the circumstances, grounds have been established to justify his termination.

• The first written notice was embodied in Allied Bank's letter of 13 June 1994. The first notice
required Galanida to explain why no disciplinary action should be taken against him for his refusal to
comply with the transfer orders.

• On the requirement of a hearing, SC has held that the essence of due process is simply an
opportunity to be heard. An actual hearing is not necessary. The exchange of several letters, in
which Galanida's wife, a lawyer with the City Prosecutor's Office, assisted him, gave Galanida an
opportunity to respond to the charges against him.

ANOTHER ISSUE: Whether the Memo dated 8 September 1994 sent to Galanida constitutes the
written notice of termination required by the Omnibus Rules?

Yes.

• CA and NLRC said - " Notice of termination shall be issued by the Investigation Committee subject to
the confirmation of the President or his authorized representative." The CA and NLRC held that Allied
Bank did not send any notice of termination to Galanida. The Memo, with the heading "Transfer and
Reassignment," was not the termination notice required by law <-- SC does not agree! Even a cursory
reading of the Memo will show that it unequivocally informed Galanida of Allied Bank's decision to
dismiss him. The statement, "please be informed that the Bank has terminated your services
effective September 1, 1994 and considered whatever benefit, if any, that you are entitled to as
forfeited . . ." is plainly worded and needs no interpretation. The Memo also discussed the findings
of the Investigation Committee that served as grounds for Galanida's dismissal. The Memo referred
to Galanida's "open defiance and refusal" to transfer first to the Bacolod City branch and then to the
Tagbilaran City branch. The Memo also mentioned his continued refusal to report for work despite
the denial of his application for additional vacation leave. The Memo also refuted Galanida's charges
 of discrimination and demotion, and concluded that he had violated Article XII of the bank's
Employee Discipline Policy and Procedure. The Memo, although captioned "Transfer and
Reassignment," did not preclude it from being a notice of termination. The Court has held that the
nature of an instrument is characterized not by the title given to it but by its body and contents.
Moreover, it appears that Galanida himself regarded the Memo as a notice of termination. Further,
Galanida amended his complaint for constructive dismissal to one for illegal dismissal after he
received the Memo. Clearly, Galanida had understood the Memo to mean that Allied Bank had
terminated his services.
• The Memo complied with Allied Bank's internal rules which required the bank's President or his
authorized representative to confirm the notice of termination. The bank's VP for Personnel, as the
head of the department that handles the movement of personnel within Allied Bank, can certainly
represent the bank president in cases involving the dismissal of employees.
o FYI!!! Nevertheless, we agree that the Memo suffered from certain errors. Although the Memo
stated that Allied Bank terminated Galanida's services as of 1 September 1994, the Memo bore the
date 8 September 1994. More importantly, Galanida only received a copy of the Memo on 5 October
1994, or more than a month after the supposed date of his dismissal. To be effective, a written
notice of termination must be served on the employees. Allied Bank could not terminate Galanida on 1
September 1994 because he had not received as of that date the notice of Allied Bank's decision to
dismiss him. Galanida's dismissal could only take effect on 5 October 1994, upon his receipt of the
Memo. For this reason, Galanida is entitled to backwages for the period from 1 September 1994 to 4
October 1994. Under the circumstances, we also find an award of P10K in nominal damages proper.
Courts award nominal damages to recognize or vindicate the right of a person that another has
violated. The law entitles Galanida to receive timely notice of Allied Bank's decision to dismiss him.
Allied Bank should have exercised more care in issuing the notice of termination.

=> Wherefore, NLRC and CA's decisions are affirmed with modifications:

1)The awards of separation pay, moral damages and exemplary damages are hereby deleted for lack
of basis;

2)Reducing the award of backwages to cover only the period from 1 September 1994 to 4 October
1994; and

3)Awarding nominal damages to private respondent for P10K.

This case is REMANDED to the Labor Arbiter for the computation, within thirty (30) days from receipt
of this Decision, of the backwages, inclusive of allowances and other benefits due to Galanida for the
time his dismissal was ineffectual from 1 September 1994 until 4 October 1994.

Labor Arbiter Almirante and Atty. Durano (counsel of Galanida) are ADMONISHED to be more careful
in citing the decisions of the SC in the future.
#5 LOLITA CONCEPCION VS MINEX IMPORT GR NO 153569

Facts

• Respondent Vina Mariano assigned petitioner Lolita Concepcion to the SM Harrison Plaza
kiosk with the instruction to hold the keys of the kiosk.
• At the close of business, they conducted a cash-count of their sales proceeds amounting to P
50,912.00.
• The next morning, the petitioner phoned Vina Mariano to report that the P50,912.00 was
missing.
• Later, while the petitioner was giving a detailed statement on the theft to the security
investigator of Harrison Plaza, Vina and Sylvia Mariano, her superiors, arrived with a
policeman who immediately placed the petitioner under arrest, the police investigated her.
• She was detained for a day being released only because the inquest prosecutor instructed so
.
• The petitioner complained against the respondents for illegal dismissal in the Department of
Labor and Employment. Minex, through Vina, filed a complaint for qualified theft against the
petitioner in the Office of the City Prosecutor in Manila.
• As to the petitioner’s complaint for illegal dismissal, the Labor Arbiter decided in favor of
Lolita Concepcion.
• On appeal by the respondents, the National Labor Relations Commission (NLRC) reversed
the decision of the Labor Arbiter declaring that the petitioner had not been dismissed, but
had abandoned her job after being found to have stolen the proceeds of the sales; and
holding that even if she had been dismissed, her dismissal would be justifiable for loss of
trust and confidence in the light of the finding of probable cause by the DOJ and the City
Prosecutor and the filing of the information for qualified theft against her.
• The petitioner challenged the reversal by the NLRC in the Court of Appeals (CA). The CA
sustained the NLRC mainly because of the DOJ Secretary’s finding of probable cause for
qualified theft.
• The CA denied the petitioner’s motion for reconsideration. Hence, the instant petition.

Issue
1. Whether or not the petitioner was terminated for a just and valid cause – YES
2. W/N they complied with the requirements of due process - NO

Ruling

1. YES. The employer may validly dismiss for loss of trust and confidence an employee who
commits an act of fraud prejudicial to the interest of the employer. Neither a criminal
prosecution nor a conviction beyond reasonable doubt for the crime is a requisite for the
validity of the dismissal. Nonetheless, the dismissal for a just or lawful cause must still be
made upon compliance with the requirements of due process under the Labor Code;
otherwise, the employer is liable to pay nominal damages (30k) as indemnity to the
dismissed employee.
 2. NO. The following standards of due process shall be substantially observed:

For termination of employment based on just causes as defined in Article 282 of the Labor
Code:
• A written notice served on the employee specifying the ground or grounds for
termination, and giving said employee reasonable opportunity within which to
explain his side
• A hearing or conference during which the employee concerned, with the assistance
of counsel if he so desires is given opportunity to respond to the charge, present his
evidence, or rebut the evidence presented against him.
• A written notice of termination served on the employee, indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
termination. 

#6 [G.R. NO. 189082 - July 11, 2012]

JOSEPHINE RUIZ, Petitioner, v. WENDEL OSAKA REALTY CORP., D.M. WENCESLAO AND
ASSOCIATES, INC. and DELFIN J. WENCESLAO, JR., Respondents.

SERENO, J.:

FACTS:
…As raised from Repondents’ Position Paper with LA
⮚ 1 February 1982 → Petitioner- Ruiz was hired as secretary to respondent Delfin, the
president of DMWAI.3 
⮚ When Ruiz expressed her intention to resign, because she could not get along with her co-
workers, Delfin decided to transfer her.4 
⮚ 1 November 1989 → she was appointed as executive assistant to the president of
respondent WORC, who happens to be respondent Delfin also.5  rνll
⮚ She was its only employee and the only undertaking of WORC has been its reclamation
project in Cavite City known as the Ciudad Nuevo Project.7ςrνll
⮚ 1 August 2001 → Delfin supposedly promoted petitioner to Office Manager of DMWAI.8 
⮚ 21 October 2002 → Ruiz was assigned to be a member of a task force formed for the
implementation of the marketing campaign for the Ciudad Nuevo Project.9ςrνll
⮚ Sometime in 2002, the BIR informed Delfin of the tax deficiency allegations against his
companies based from the latter’s very own records.
⮚ This prompted Delfin to check the company files and records. On November 2002, he
discovered that "various very important files"11 of DMWAI were missing (e di ba dito na-
promote si Ruiz).
⮚ Respondents claim that they received a call from a woman, who later turned out to be the
wife of a former employee one who was close friends with petitioner-Ruiz.
⮚ The female informant was Mrs. Miguela S. Sunicothe BIG reveal and her husband was a former
DMWAI employee, who is currently a BIR officer.
⮚ For the determination of the culprit of unauthorized taking of the files, Delfin required all the
employees who had access to the files to fill up a questionnaire he had drawn up.
⮚ Out of the 15 employees who were asked, petitioner was the only one who failed to answer
the questionnaire.
⮚ Respondent-Delfin → claims he was the one who called petitioner to ask why she did not
answer the questionnaire. She allegedly said that accomplishing it would have been an
acknowledgment of wrongdoing, and that it was not lawful for her to be compelled to fill it
up. ‚rνll
⮚ 3 December 2002, Delfin sent a letter to petitioner informing her that she would be placed
under a 30-day preventive suspension explaining that there was no reason why she refused
to fill up the questionnaire, and that her refusal was equivalent to an admission that she
took the corporate files constituting “serious misconduct for which you should be dismissed for
cause”.
⮚ 9 December 2002 → Petitioner-Ruiz submitted the questionnaire Delfin had filled up.
⮚ 10 December 2002 → Petitioner-Ruiz filed an illegal suspension case with the Labor Arbiter
against respondent corporations. (na-sbmit niy ayung questionnaire then pak! file ng case)
⮚ Respondent corporations formed a panel of investigators to look into the matter.
⮚ When the 30-day preventive suspension of petitioner ended, there was still an ongoing
investigation on the matter. (by the panel of investigators)
⮚ In a 2 January 2003 letter,18 Ruiz was informed by Andrew M. Taningco, a member of the
panel of investigators, that the company had decided to put her on "vacation leave with pay
for a period of fifteen (15) days."
⮚ Petitioner denied the accusations of Mrs. Sunico. She insisted that Mr. Sunico had explicitly
denied that the documents came from the former.
⮚ Respondents alleged, however, that "Mr. Francisco Sunico never denied that the files were
found in his house. Much less did he deny that Ms. Ruiz gave them to him,"23  ½ll
⮚ Delfin then informed Ruiz that her 15-day vacation leave had ended on 18 January 2003.
⮚ She was further informed that she should report for work on 20 January 2003
⮚ Jan. 20 → She was given a letter26 dated 18 January 2003 informing her that she had been
assigned to WORC s Ciudad Nuevo Project (again!) in Cavite City (NOTE: Ruiz lived in Bulacan
!)
⮚ Petitioner continued to work in Cavite until 15 April 2003 before quitting because of "poor
health and the humiliation she was subjected to" in her workplace and that the
transportation allowance was insufficient.
⮚ Petitioner amended her Complaint for illegal suspension to include constructive illegal
dismissal; nonpayment of proportionate 13th month pay, confidential allowance, and
separation pay; moral and exemplary damages; and attorney’s fees.
LA
⮚ 31 March 2004 →Labor Arbiter found that petitioner had not been illegally dismissed, but
that she was entitled to her claim for prorata 13th month pay.
- LA → She was the prime suspect in a case involving the leaking of company files to the
BIR, which is still pending investigation before the NBI. If found culpable, complainant
may be administratively, civilly, and even criminally liable.
NLRC
⮚ 11 July 2007 Decision,31 it reversed the Labor Arbiter’s Decision. ½ll
CA
⮚ Granted Respondent’s Petition35 and reinstated the Labor Arbiter’s Decision.
⮚ According to the CA, the suspension pending investigation and her transfer was justified by
the gravity of her offense.36  ½ll
⮚ Petitioner filed an MR,38 but it was denied through a Resolution.
SC
⮚ Petition for Review39 under Rule 45

ISSUE:
Whether or not petitioner was constructively dismissed when she was reassigned to respondents
Cavite branch? -- NO.

⮚ The NLRC ruled that petitioner’s assignment to Cavite City was not for legitimate business
reasons, but it was "simply because respondent believed that she was guilty, and that she
was undesirable, unreliable, and a security risk."40 
⮚ The CA ruled, however, that the transfer of petitioner was justified, considering the gravity of
the offense she was being charged with.41ςrνll

RULING:
⮚ We agree with the appellate court.
⮚ An employer has the inherent right to transfer or assign an employee in pursuance of its
legitimate business interest, subject only to the condition that the move be not motivated by
bad faith.42ςrνll
⮚ Respondents explained: When petitioner was transferred to Cavite, she was supposed to
continue with what she was doing in Quezon City. It is not true that she was never given a job
to perform.
⮚ Besides, as the appellate court found and as petitioner admitted,50 the project manager of
the Ciudad Nuevo Project had given her job description.51ςrνll
⮚ As to the claim of petitioner that her transfer was without valid basis, we disagree.
⮚ She was the executive assistant of the president – a sensitive position that required her
employer's utmost trust and confidence.
⮚ Respondents had the right to reassign her the moment that confidence was breached. It has
been shown that such breach proved that she was no longer fit to discharge her assigned
tasks
±Ï‰
x x x Breach of trust and confidence as a ground for reassignment must be related to the
performance of the duties of the employee such as would show him to be thereby unfit to
discharge the same task.52ςrνll
⮚ Petitioner has yet to be proven guilty BUT respondents had the authority to reassign her,
pending investigation.
 ⮚ As held in Blue Dairy Corporation and/or Aviguetero and Miguel v. NLRC and Recalde:
- “ Re-assignments made by management pending investigation of irregularities allegedly
committed by an employee fall within the ambit of management prerogative.
- The purpose of reassignments is no different from that of preventive suspension which
management could validly impose as a disciplinary measure for the protection of the
company's property pending investigation of any alleged malfeasance or misfeasance
committed by the employee.53ςrνll
⮚ Substantial proof is a sufficient basis for the imposition of any disciplinary action upon the
employee: The employer has reasonable ground to believe that the employee is responsible
for the misconduct that renders the latter unworthy of the trust and confidence demanded
by his or her position.54ςrνll
⮚ When petitioner was assigned to Cavite, there was an ongoing investigation of the charges
filed against her. She refused to fill up, for no justifiable reasons, the questionnaire
distributed by her employer. Furthermore, a witness had executed an Affidavit claiming that
she found the missing files, and that her husband told her that it was petitioner who handed
those files to him. Lastly, the person who supposedly received these documents from
petitioner did not deny or rebuke the statements made by his wife.
⮚ An employer’s decision to transfer an employee, if made in good faith, is a valid
exercise of a management prerogative, although it may result in personal
inconvenience or hardship to the employee.58 We have already ruled that the transfer of
the employment of petitioner to Cavite was not motivated by bad faith. Thus, any resulting
inconvenience or hardship on her part is of no moment.

Other issues ni Petitioner:

⮚ The transfer was coupled with a diminution in the benefits previously granted to her, that
petitioner has been enjoying a "confidential" allowance of P2,000.00 a month for more than
a decade. This benefit was suddenly withdrawn when she was transferred.59ςrνll
⮚ Respondents were able to prove that, for her position in Cavite, petitioner received a P2,554
per month travelling allowance, which was more than the P2,000 she received as monthly
allowance prior to her transfer.60ςrν
ll
⮚ The transfer resulted in her demotion (from a managerial to a clerical position from
Office Manager to a position that was merely clerical in nature.) ½ll
⮚ As proof of her appointment to a managerial position, petitioner attached a 31 July 2001
letter62 printed on a sheet of paper carrying the DMWAI letterhead. This letter signed by
respondent Delfin informed her that she was being appointed as DMWAI s office manager
effective 1 August 2001.
⮚ Respondents allege that they cannot recall the circumstances surrounding the writing of the
letter, and why it was written on a sheet of paper with the DMWAI letterhead.64 
⮚ Respondents deny her allegation that she was promoted to the position of office
manager.
⮚ According to them, such a promotion should have been preceded by the submission of an
application for the position and by a document "severing the employer-employee
relationship between WORC and the complainant."65ςrνll
 ⮚ Respondents add that that they never saw the need to appoint an office manager. Even on
the assumption that the appointment became necessary, that position was usually assigned
to companies and not to individuals.
⮚ Petitioner failed to present evidence to prove that she was holding a managerial position. In
fact, respondents aver that she was the only employee of WORC. ½ll
⮚ Petitioner herself, being its only employee, was the one who executed all the foregoing
documents. It is important to note that petitioner worked for 4 months in Cavite before
giving up on her job.69 Initially, she accepted the reassignment and had no issues with
the fact that her residence was far from her new workplace. She was never dismissed
from employment; she simply decided to stop going to work.
⮚ It is obvious from the facts of this case that she resigned from work. Inevitably, her
Complaint for illegal dismissal should be dismissed.
⮚ It is clear that the filing of an illegal dismissed case by petitioner was a mere afterthought.
It was filed not because she wanted to return to work, but to claim separation pay and back
wages.

⮚ Lastly, petitioner argues that respondent Delfin should be held jointly and severally liable
with respondent corporations because of the "dilution of the identity employer."70ςrνll
⮚ In labor cases, directors and officers are solidarily liable with the corporation for the
termination of employment of corporate employees if their termination was committed with
malice or bad faith.
⮚ The ruling applies when a corporate officer acts with malice or bad faith in suspending an
employee.71 Such malice or bad faith is not present in this case.

WHEREFORE, the instant Petition is DENIED. The 29 October 2008 Decision of the Court of Appeals
reversing the 11 July 2007 Decision of the National Labor Relations Commission----which had earlier
directed respondents Wendel Osaka Realty Corporation, D.M. Wenceslao and Associates, Inc., and
Deltin J. Wenceslao, Jr. to jointly and severally pay petitioner Josephine Ruiz separation pay and full
back wages---is hereby AFFIRMED.
SO ORDERED.

#7 G.R. No. 175170               September 5, 2012

MISAMIS ORIENTAL II ELECTRIC SERVICE COOPERATIVE (MORESCO II) vs. VIRGILIO M.
CAGALAWAN
DEL CASTILLO, J.:
FACTS:
MORESCO II, a rural electric cooperative, hired Cagalawan as a Disconnection Lineman on a
probationary basis, then later on appointed on a permanent basis. He was then designated as
Acting Head of the disconnection crew in the Balingasag sub-office of MORESCO II.
MORESCO II’s General Manager Amado Ke-e (Ke-e) transferred Cagalawan to the Gingoog sub-
office as a member of the disconnection crew in accordance with the memorandum, which
stated that the transfer was done “in the exingency of the service.”
Cagalawan claimed that he was effectively demoted from his position as head of the
disconnection crew to a mere member and that his transfer is inconvenient and prejudicial to
him as it would cause additional travel expenses to and from work. He sought justification on
the transfer and why he was the one chosen to be transferred, to which Ke-e explained that
Cagalawan’s transfer was not a demotion since he was holding the position only by mere
designation and not by appointment. However, he did not state any basis of the transfer.
Cagalawan claimed that he was transferred because he executed an Affidavit in support of his
co-employee who filed an illegal dismissal case against MORESCO II.
He eventually stopped reporting for work. On July 2002, he filed a complaint for constructive
dismissal against MORESCO II and Ke-e and Danilo Subrado (Subrado), in their capacities as
General Manager and Board Chairman, respectively.
RESPONDENT’S CONTENTION:
Only Cagalawan submitted his position paper.
He alleged that his transfer was unnecessary and was made only in retaliation for his having
executed an affidavit. In support of his contention, he submitted a certification which stated
that the Gingoog sub-office was not undermanned. In fact, when he stopped working, there was
no one assigned to fill-in his position. Moreover, he claimed that his transfer constituted a
demotion from his position as Acting Head of the disconnection crew which he has occupied for
almost 10 months. As such, he should be considered regular in that position.
He further alleged that his transfer was tantamount to illegal constructive dismissal for being
prejudicial and inconvenient as he had to spend P197 more per day, leaving him nothing of his
salary and therefore forcing him to stop working.
LABOR ARBITER:
Ruled in favor of Cagalawan, due to his uncontroverted allegations. It also ordered his
reinstatement to the position of Collector, with backwages from the date of his transfer up to
his actual reinstatement.
However, his prayer for regularization was denied since the period of six months which he
claimed as sufficient to acquire regular status applies only to probationary appointment.
Moreover, the decision to promote him to the said position should only come from the
management.
PETITIONER’S CONTENTION:
MORESCO II and Cagalawan both appealed to the NLRC.
MORESCO II denied that Cagalawan’s transfer was done in retaliation to him. It explained that
the transfer was in response to the request of the area manager in Gingoog sub-office for
additional personnel. To substantiate this, it submitted a letter dated May 8, 2002 from Gingoog
sub-office’s Area Manager, requesting for two additional disconnection linement in order to
attain the collection quota allocated I his area.
Moreover, Cagalawan’s claim of additional expenses deserves no appreciation since he would
still incur these expenses regardless of his place of assignment considering that he was
provided with a rented motorcycle with fuel and oil allowance.
It intimated that there was no intention of removing him from its employ. In fact, it was
Cagalawan himself who committed an act of insubordination when he abandoned his job.
NATIONAL LABOR RELATIONS COMMISSION:
Set aside the decision of the Labor Arbiter and dismissed Cagalawan’s complaint. The NLRC
admitted MORESCO II’s evidence even if submitted only on appeal.
It also upheld MORESCO II’s right to transfer Cagalawan in the exercise of its sound business
judgment.
COURT OF APPEALS:
NLRC had gravely abused its discretion in admitting MORESCO II’s evidence, citing Sec. 3, Rule V
of the NLRC Rules of Procedure which prohibits the parties from making new allegations or
cause of action not included in the complaint or position paper, affidavits and other documents.
It held that MORESCO II presented on appeal was its entire evidence after the Labor Arbiter
rendered a decision adverse to it.
MORESCO II’s belated submission of evidence despite the opportunities given, cannot be
permitted because it “defeats speedy administration of justice” and “smacks of unfairness.”
ISSUE:
Whether or not MORESCO II’s belated submission of evidence can be permitted?
HELD:
NO. Labor tribunals, such as the NLRC are not precluded from receiving evidence submitted on
appeal as technical rules are not binding in cases submitted before them. However, any delay in
the submission of evidence should be adequately explained and proven.
In the present case, MORESCO II did not cite any reason why it failed to file its position paper
before the Labor Arbiter despite sufficient notice and time given to do so. Only after an adverse
decision was rendered did it present its defense. The belated submission of the said letter-
request without any valid explanation casts doubt as to its credibility, especially when it is not a
newly-discovered evidence. The letter-request was dated a day before the memorandum for
Cagalawan’s transfer was issued. MORESCO II could have easily presented the letter in the
proceedings before the Labor Arbiter for serious examination.
It should also be recalled that after Cagalawan received the memorandum for his transfer, he
immediately questioned the basis of it. If at that time, there was already a letter-request, Ke-e
coud have easily referred to this in his response to Cagalawan’s queries about the transfer.
However, Ke-e did not do so.
It is within the ambit of the employer’s prerogative to transfer an employee for valid reasons
and according to the requirement of its business, provided that the transfer does not result in
demotion in rank or diminution of salary, benefits and other privileges. But this should be
exercised without grave abuse of discretion and with due regard to the basic elements of justice
and fair play, such that if the transfer was unnecessary or inconvenient and prejudicial to the
employee, it cannot be upheld.
While the transfer of Cagalawan neither entails any demotion in rank since he did not have
tenurial security over the position of head of the disconnection crew, nor result to diminution in
pay as this was not sufficiently proven by him, MORESCO II’s evidence is not enough to show
that said transfer was required by the exigency of the electric cooperative’s business interest.
The evidence of MORESCO II is not substantial to prove that there was a genuine business
urgency that necessitated the transfer.
The only evidence adduced by MORESCO II to support the legitimacy of the transfer was the
letter-request. However, this piece of evidence cannot sufficiently establish that the Gingoog
sub-office was indeed suffering from losses due to collection deficiency to justify the
assignment of additional personnel in the area. The letter is nothing more than a mere request
for additional personnel to augment the number of disconnection crew assigned in the area.
While it mentioned that the area’s collection efficiency should be improved and that there is a
shortage of personnel therein, it is self-serving and thus cannot be considered as competent
evidence to prove the accuracy of the allegations.
MORESCO II could have at least presented financial documents or any other concrete
documentary evidence showing that the collection quota of the Gingoog sub-office has not
been met or could not be reached. It should have also submitted such other documents which
would show the lack of sufficient personnel in the area. Unfortunately, the area manager’s letter
provides no more than bare allegations which deserve not even the slightest credit.
When there is doubt between the evidence submitted by the employer and that submitted by
the employee, the scales of justice must be tilted in favor of the employee. This is consistent
with the rule that an employer’s cause could only succeed on the strength of its own evidence
and not on the weakness of the employee’s evidence.
MORESCO II’s plea that its evidence be admitted in the interest of justice does not deserve any
merit.

#8
FIRST DIVISION

[G.R. No. 173882. February 15, 2012.]

JULIE'S BAKESHOP AND/OR EDGAR REYES, petitioners, vs. HENRY ARNAIZ,

EDGAR NAPAL, *and JONATHAN TOLORES, respondents.

TOPIC: -- CONSTRUCTIVE DISMISSAL

FACTS:

- Reyes hired respondents as chief bakers in his three franchise branches of

Julie's Bakeshop in Sibalom and San Jose, Antique.
- January 26, 2000, respondents filed separate complaints against petitioners for
underpayment of wages, payment of premium pay for holiday and rest day,
service incentive leave pay, 13th month pay, cost of living allowance (COLA) and
attorney's fees. These complaints were later on consolidated.
- Petitioner Edgar Reyes reassigned respondents as utility/security personnel
tasked to clean the outside vicinity of his bakeshops and to maintain peace and
 order in the area. Upon service of the memo, respondents, however, refused to
sign the same and likewise refused to perform their new assignments by not
reporting for work.
- Reyes directed respondents to report back for work and to explain why they failed
to assume their duties as utility/security personnel. A second letter-
memorandum of the same tenor dated March 28, 2000 was also sent to
respondents. Respondents did not heed both memoranda.

◼ Proceedings before the Labor Arbiter

→Respondents with their counsel, Atty. Ronnie V. Delicana (Atty. Delicana), on one hand, and
Reyes on the other, appeared before the Labor Arbiter to explore the possibility of an
amicable settlement.

→It was agreed that the parties would enter into a compromise agreement on March 7, 2000.

→ However, on February 29, 2000, respondents, who were then represented by a different
counsel, Atty. Mariano R. Pefianco (Atty. Pefianco), amended their complaints by including in
their causes of action illegal dismissal and a claim for reinstatement and backwages.

→ The supposed signing of the compromise agreement was reset to March 28, 2000 because
of respondents' non-appearance in the hearing of March 7, 2000.

→ March 28, 2000, Atty. Pefianco failed to appear despite due notice.

→ On the next hearing scheduled on April 24, 2000, both Atty. Delicana and Atty. Pefianco
appeared but Atty. Pefianco verbally manifested his withdrawal as counsel for respondents.
Thus, respondents, through Atty. Delicana, and Reyes, continued to explore the possibility of
settling the case amicably.

→ Manifesting that they need to sleep on the proposed settlement, respondents requested for
continuance of the hearing on April 26, 2000. Come said date, however, respondents did not
appear.

PETITIONER’S CONTENTION:

That respondents were never dismissed but that they abandoned their jobs after filing their
complaints. Petitioners denied that Reyes is the employer of Arnaiz and Napal but admitted
such fact insofar as Tolores is concerned.

→ Insisting that respondents were not illegally dismissed and that their reassignment or
transfer as utility/security personnel was indispensable, made in good faith and in the exercise
of a valid management prerogative. Hence, such reassignment does not amount to
constructive dismissal.
 - They likewise added that the transfer was meant to be only temporary and
besides, same does not involve any diminution in pay, rights and privileges of the
respondents.

RESPONDENT’S CONTENTION:

That respondents were never dismissed but that they abandoned their jobs after filing their
complaints. Petitioners denied that Reyes is the employer of Arnaiz and Napal but admitted
such fact insofar as Tolores is concerned.

→ They also insisted that Reyes is their employer as shown by his letter-memorandum dated
March 13, 2000 which directed all of them to report back for work.

→ In addition, the fact that Reyes was willing to pay all the respondents the amount of P54,126.
00 as settlement only proves that there is an employer-employee relationship between them and
Reyes.

→ THAT THEY’RE CONSTRUCTIVELY DISMISSED BY REASSIGNING THEM AS A CHIEF BAKER

TO UTILITY/SECURITY PERSONNEL.

LABOR ARBITER:

Labor Arbiter expressed dismay over respondents' lack of good faith in negotiating a
settlement. The Labor Arbiter denounced the way respondents dealt with Atty. Delicana during
their discussions for a possible settlement since respondents themselves later on informed
the said tribunal that at the time of the said discussions, they no longer considered Atty.
Delicana as their counsel. DISMISSED.

NLRC:

NLRC overruled the Decision of the Labor Arbiter and held that the burden of proof lies on
herein petitioners as Reyes admitted being the employer of Tolores.

→ With respect to Arnaiz and Napal, the NLRC noted that since their alleged employer was not
impleaded, said respondents' cases should be remanded to the Labor Arbiter, and tried as new
and separate cases.

REMANDED for purposes of identifying the real respondents, to be separated

as discussed, if warranted, and for further proceedings to be conducted.

→ NLRC found merit in respondents' Motion for Reconsideration. It held that Reyes failed to
present concrete proof of his allegation that a certain Rodrigo Gandiongco is the employer of
Arnaiz and Napal.
→ hence, Reyes is still presumed to be their employer as franchise owner of the branches
where these employees were assigned.

→ NLRC further ruled that respondents' demotion in rank from chief bakers to utility/security
personnel is tantamount to constructive dismissal which entitles them to the reliefs available
to illegally dismissed employees.

COURT OF APPEALS:

→ That respondents were constructively dismissed since their designation from chief bakers
to utility/security personnel is undoubtedly a demotion in rank which involved "a drastic
change in the nature of work resulting to a demeaning and humiliating work condition."

ISSUE:

Whether the transfer/reassignment of respondents to another position without diminution in pay

and other privileges tantamount to constructive dismissal?

- YES!

HELD:

THE TRANSFER/REASSIGNMENT OF RESPONDENTS CONSTITUTES CONSTRUCTIVE

DISMISSAL.
We have held that management is free to regulate, according to its own discretion and judgment
, all aspects of employment, including hiring, work assignments, working methods, time, place
and manner of work, processes to be followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall
of workers. The exercise of management prerogative, however, is not absolute as it must be
exercised in good faith and with due regard to the rights of labor. 28

In constructive dismissal cases, THE EMPLOYER HAS THE BURDEN OF PROVING THAT THE
TRANSFER OF AN EMPLOYEE IS FOR JUST OR VALID GROUND, such as genuine business
necessity. The employer must demonstrate that the transfer is not unreasonable, inconvenient,
or prejudicial to the employee and THAT THE TRANSFER DOES NOT INVOLVE A DEMOTION IN
RANK OR A DIMINUTION IN SALARY AND OTHER BENEFITS. "If the employer fails to
overcome this burden of proof, the employee's transfer is tantamount to unlawful constructive
dismissal." 

In this case, petitioners insist that the transfer of respondents was a measure of self-
preservation and was prompted by a desire to protect the health of the buying public, claiming
that respondents should be transferred to a position where they could not sabotage the
business pending resolution of their cases. According to petitioners, the possibility that
respondents might introduce harmful substances to the bread while in the performance of their
duties as chief bakers is not imaginary but real as borne out by what Tolores did in one of the
bakeshops in Culasi, Antique where he was assigned as baker. 

→This postulation is not well-taken. On the contrary, PETITIONERS FAILED TO SATISFY THE
BURDEN OF PROVING THAT THE TRANSFER WAS BASED ON JUST OR VALID GROUND.

In view of these, this Court finds no compelling reason to justify the transfer of respondents
from chief bakers to utility/security personnel. What appears to this Court is that respondents'
transfer was an act of retaliation on the part of petitioners due to the former's filing of
complaints against them, and thus, was clearly made in bad faith.

The act attributed against Tolores does not even convince us as he was merely a suspected
culprit in the alleged sabotage for which no investigation took place to establish his guilt or
culpability. Besides, Reyes still retained Tolores as an employee and chief baker when he could
have dismissed him for cause if the allegations were indeed found true. In view of these, this
Court finds no compelling reason to justify the transfer of respondents from chief bakers to
utility/security personnel. What appears to this Court is that respondents' transfer was an act
of retaliation on the part of petitioners due to the former's filing of complaints against them,
and thus, was clearly made in bad faith.

"[D]emotion involves a situation in which an employee is relegated to a subordinate or less

important position constituting a reduction to a lower grade or rank, with a corresponding
decrease in duties and responsibilities, and usually accompanied by a decrease in salary." 32 
WHEN THERE IS A DEMOTION IN RANK AND/OR A DIMINUTION IN PAY; WHEN A CLEAR
DISCRIMINATION, INSENSIBILITY OR DISDAIN BY AN EMPLOYER BECOMES UNBEARABLE TO
THE EMPLOYEE; OR WHEN CONTINUED EMPLOYMENT IS RENDERED IMPOSSIBLE,
UNREASONABLE OR UNLIKELY, THE TRANSFER OF AN EMPLOYEE MAY CONSTITUTE
CONSTRUCTIVE DISMISSAL.

→ We agree with the CA in ruling that the transfer of respondents amounted to a

demotion. Although there was no diminution in pay, there was undoubtedly a demotion in titular
rank. One cannot deny the disparity between the duties and functions of a chief baker to that
of a utility/security personnel tasked to clean and manage the orderliness of the outside
premises of the bakeshop. Respondents were even prohibited from entering the bakeshop. The
change in the nature of their work undeniably resulted to a demeaning and humiliating work
condition.

The CA, therefore, did not err in awarding the reliefs prayed for by the RESPONDENTS AS
THEY WERE, WITHOUT A DOUBT, CONSTRUCTIVELY DISMISSED.

WHEREFORE, the petition is DENIED. The September 23, 2005 Decision of the Court of
Appeals in CA-G.R. SP No. 86257 is AFFIRMED.
 SO ORDERED.

#9 Topic: Loss of trust and confidence as ground for dismissal

Solis

G.R. No. 173774

Manila Electric Company vs. Ma. Luisa Beltran
January 30, 2012

Facts: Beltran was employed by MERALCO as a Senior Branch. While working overtime on a
Saturday she accepted P15,164.48 from the Collection Route Supervisor . Said amount was
payment in lieu of a returned check for a customer’s (Changs) electric bill. Beltran issued Auxiliary
Receipt No. 87964 which she dated September 30, 1996. She then placed the money and the
original auxiliary receipt and other documents pertinent to the returned check underneath her
other files inside the drawer of her table.  

Beltran, however, was only able to remit Chang’s payment on January 13, 1997. She was placed
under preventive suspension effective January 20, 1997 pending completion of an investigation.
MERALCO considered as misappropriation or withholding of company funds her failure to
immediately remit said payment in violation of its Code on Employee Discipline. 

In her Sinumpaang Salaysay Beltran denied having personally used the money. She stated that she
had a huge fight with her husband which led to their separation and subsequent marital woes
coupled with her worries for her ailing child distracted her into forgetting Chang’s payment. She
claimed that after Garcia approached her regarding the unremitted payment, she immediately
looked for the money in her drawer and right there and then handed it over to Garcia together
with the other pertinent documents. 

 
MERALCO’s Administrative Supervisor testified that she inquired regarding the unremitted
payment from Beltran on January 7, 1997 and immediately ordered the remittance of the same.
 Beltran, however, failed to do so on that day and even on the next day when she reported for
work. Beltran subsequently went on leave of absence on January 9 and 10, 1997. It was only on 
January 13, 1997that the money with the pertinent documents were handed over.

Beltran was terminated when the investigator found Beltran guilty of misappropriating and
withholding Changs payment. The act of negligence by Beltran in the performance of her duties
has resulted to the loss of trust and confidence reposed on her, notwithstanding her self-serving
allegations of marital woes and family difficulties, which were not even corroborated by any clear
evidence. Beltran filed a complaint for illegal dismissal against MERALCO. The Labor Arbiter ruled in
favor of Beltran and ordered MERALCO to reinstate her without backwages. NLRC reversed the
Labor Arbiter’s Decision and dismissed Beltran’s complaint. However, agreed with the findings of
the Labor Arbiter.

Issue: WON Beltran was illegally dismissed.

Held: For loss of trust and confidence to be a valid ground for dismissal, it must be
based on a WILLFUL BREACH OF TRUST AND FOUNDED ON CLEARLY ESTABLISHED
FACTS. A 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. In addition, loss of trust and confidence must rest on substantial
grounds and not on the employers arbitrariness, whims, caprices or suspicion.

It should be emphasized that the burden of proving the legality of an employee’s

dismissal lies with the employer. Unsubstantiated suspicions, accusations, and
conclusions of employers do not provide legal justification for dismissing employees. Mere
conjectures cannot work to deprive employees of their means of livelihood. To begin with,
MERALCO cannot claim or conclude that Beltran misappropriated the money based on
mere suspicion. The NLRC thus erred in concluding that Beltran made use of the money
from the mere fact that she took a leave of absence after having been reminded of the
unremitted funds. And even if Beltran delayed handing over the funds to the company,
MERALCO still has the burden of proof to show clearly that such act of negligence is
sufficient to justify termination from employment. Moreover, we find that Beltran’s delay
does not clearly and convincingly establish a willful breach on her part, that is, which
is done intentionally, knowingly and purposely, without any justifiable excuse. True, the
reasons Beltran proffered for her delay in remitting the cash payment are mere allegations
without any concrete proof. Nonetheless, we emphasize that as the employer, the burden
still lies on MERALCO to provide clear and convincing facts upon which the alleged loss of
confidence is to be made to rest.

Negligence, is not sufficient to warrant separation from employment. To justify removal

from service, the negligence should be GROSS AND HABITUAL. Gross negligence x x x is
the want of even slight care, acting or omitting to act in a situation where there is duty to
act, not inadvertently but willfully and intentionally, with a conscious indifference to
consequences insofar as other persons may be affected. Habitual neglect, on the other
hand, connotes repeated failure to perform ones duties for a period of time, depending
upon the circumstances. No concrete evidence was presented by MERALCO to show that
Beltran’s delay in remitting the funds was done intentionally. Neither was it shown that
same is willful, unlawful and felonious contrary to MERALCOs finding as stated in the letter
of termination it sent to Beltran. Surely, Beltran’s single and isolated act of negligence
cannot justify her dismissal from service.
Moreover, Beltrans simple negligence did not result in any loss. No harm or damage to
the company or to its customers attributable to Beltran’s negligence was alleged by
MERALCO.

MERALCOs sanction of dismissal was not commensurate to Beltran’s inadvertence

not only because there was no clear showing of bad faith and malice but also in
consideration of her untainted record of long and dedicated service to MERALCO. No
reversible error or any grave abuse of discretion on the part of the CA in ordering Beltrans
reinstatement without backwages. The forfeiture of her salary is an equitable punishment
for the simple negligence committed.

#10

Canadian Opportunities Unlimited Inc vs Dalangin

-by: Eva

Facts:

-Bart Q. Dalangin, Jr. filed a complaint for illegal dismissal on November 20, 2001 with
prayer for

reinstatement and backwages, as well as damages and attorney’s fees, against petitioner
Canadian Opportunities Unlimited, Inc.

-Dalangin was hired by the company in October 2001, as Immigration and Legal Manager,
with a monthly salary of P15,000.00 and was placed on probation for six months. He was to
report directly to the Chief Operations Officer, Annie Llamanzares Abad where his tasks
involved principally the review of the clients’ applications for immigration to Canada to
ensure that they are in accordance with Canadian and Philippine laws.

-Through a memorandum dated October 27, 2001, signed by Abad, the company
terminated Dalangin’s employment, declaring him "unfit" and "unqualified" to continue as
Immigration and Legal Manager, for the following reasons:

a) Obstinacy and utter disregard of company policies. Propensity to take prolonged and
extended lunch breaks, shows no interest in familiarizing oneself with the policies and
objectives.

b) Lack of concern for the company’s interest despite having just been employed in the
company. (Declined to attend company sponsored activities, seminars intended to
familiarize company employees with Management objectives and enhancement of
company interest and objectives.)
c) Showed lack of enthusiasm toward work.

d) Showed lack of interest in fostering relationship with his co-employees.

-Dalangin alleged, in his Position Paper, that the company issued a memorandum requiring
its employees to attend a "Values Formation Seminar" at 2:00 p.m. onwards. When he
learned that the purpose of the seminar would bore no relation to his duties, he told Abad
that he would not attend the seminar and that he would have

to leave at 2:00 p.m. in order to be with his family in the province. Dalangin claimed that
Abad insisted that he attend the seminar so that the other employees would also attend.
He replied that he should not be treated similarly with the other employees as there are
marked differences between their respective positions and duties. Nonetheless, he
signified his willingness to attend the seminar, but requested Abad to have it conducted
within office hours to enable everybody to attend.

-Dalangin further alleged that Abad refused his request and stressed that all company
employees may be required to stay beyond 2:00 p.m. on Saturdays which she considered
still part of office hours. Dalangin argued that it has been an established company practice
that on Saturdays, office hours end at 2:00 p.m. and

that an employee cannot be made to stay in the office beyond office hours, except under
circumstances provided in Article 89 of the Labor Code.

-Dalangin claimed that Abad issued a memorandum requiring him to explain why he could
not attend the seminar scheduled and the other forthcoming seminars. Dalangin met Mr.
Sichani, the company’s Managing Director, and was told that Mr. Sichani that his services
were being terminated because Sichani could not keep

in his company "people who are hard-headed and who refuse to follow orders from
management." Sichani also told him that since he was a probationary employee, his
employment could be terminated at any time and at

will. Sichani refused to accept his letter-reply to the company memorandum and instead
told him to just hand it over to Abad.

-The company however, alleged that during his brief employment in the company, Dalangin
showed lack of enthusiasm towards his work and was indifferent towards his co-employees
and the company clients. Dalangin refused to comply with the company’s policies and
procedures, routinely taking long lunch breaks, exceeding

the one hour allotted to employees, and leaving the company premises without informing
his immediate superior, only to call the office later and say that he would be unable to
return because he had some personal matters to attend to. He also showed lack of
interpersonal skills and initiative which he manifested when the
immigration application of a company client, Mrs. Jennifer Tecson, was denied by the
Canadian Embassy.

-Dalangin failed to provide counsel to Tecson; he also should have found a way to appeal
her denied application, but he did not. As it turned out, the explanation he gave to Tecson
led her to believe that the company did not handle her application well. Dalangin’s lack of
interest in the company was further manifested when he refused to attend company-
sponsored seminars designed to acquaint or update the employees with the company’s
policies and objectives.

-The company argued that since Dalangin failed to qualify for the position of Immigration
and Legal Manager, the company decided to terminate his services, after duly notifying him
of the company’s decision and the reason for his separation.

-Labor Arbiter Eduardo G. Magno declared Dalangin’s dismissal illegal, and awarded him
backwages of P75,000.00, moral damages of P50,000.00 and exemplary damages of P50,
000.00, plus 10% attorney’s fees.

-On appeal by the company, the NLRC found Dalangin’s dismissal to be a valid exercise of
the company’s management prerogative because Dalangin failed to meet the standards for
regular employment. Dalangin moved for reconsideration, but the NLRC denied the motion.

-The CA held that the NLRC erred when it ruled that Dalangin was not illegally dismissed.
The CA denied the company’s subsequent motion for reconsideration. Hence, this appeal.

Issue: Whether Dalangin, a probationary employee, was illegally dismissed.

Ruling:

In International Catholic Migration Commission v. NLRC, the Court explained that a

probationary employee, as understood under Article 281 of the Labor Code, is one who

is on trial by an employer, during which, the latter determines whether or not he is

qualified for permanent employment. A probationary appointment gives the employer an
opportunity to observe the fitness of a probationer while at work, and to ascertain whether
he would be a proper and efficient employee.

Dalangin was barely a month on the job when the company terminated his
employment. The essence of a probationary period of employment fundamentally lies in
the purpose or objective of both the employer and the employee during the period. While
the employer observes the fitness, propriety and efficiency of a probationer to ascertain
whether he is qualified for permanent employment, the latter seeks to prove to the former
that he has the qualifications to meet the reasonable standards for permanent
employment.

The trial period or the length of time the probationary employee remains on
probation depends on the parties‘ agreement, but it shall not exceed six (6) months under
Article 281 of the Labor Code, unless it is covered by an apprenticeship agreement
stipulating a longer period. As the Court explained in International Catholic Migration
Commission, the word probationary, as used to describe the period of employment,
implies the purpose of the term or period, but not its length.

Thus, the fact that Dalangin was separated from the service after only about four
weeks does not necessarily mean that his separation from the service is without basis.
Contrary to the CA‘s conclusions, we find substantial evidence indicating that the company
was justified in terminating Dalangin‘s employment, however brief it had been. Time and
again, we have emphasized that substantial evidence is such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.

Canadian Opportunities Unlimited Inc vs Dalangin

-by: Eva

Facts:

-Bart Q. Dalangin, Jr. filed a complaint for illegal dismissal on November 20, 2001 with
prayer for

reinstatement and backwages, as well as damages and attorney’s fees, against petitioner
Canadian Opportunities Unlimited, Inc.

-Dalangin was hired by the company in October 2001, as Immigration and Legal Manager,
with a monthly salary of P15,000.00 and was placed on probation for six months. He was to
report directly to the Chief Operations Officer, Annie Llamanzares Abad where his tasks
involved principally the review of the clients’ applications for immigration to Canada to
ensure that they are in accordance with Canadian and Philippine laws.

-Through a memorandum dated October 27, 2001, signed by Abad, the company
terminated Dalangin’s employment, declaring him "unfit" and "unqualified" to continue as
Immigration and Legal Manager, for the following reasons:

a) Obstinacy and utter disregard of company policies. Propensity to take prolonged and
extended lunch breaks, shows no interest in familiarizing oneself with the policies and
objectives.

b) Lack of concern for the company’s interest despite having just been employed in the
company. (Declined to attend company sponsored activities, seminars intended to
familiarize company employees with Management objectives and enhancement of
company interest and objectives.)

c) Showed lack of enthusiasm toward work.

d) Showed lack of interest in fostering relationship with his co-employees.

-Dalangin alleged, in his Position Paper, that the company issued a memorandum requiring
its employees to attend a "Values Formation Seminar" at 2:00 p.m. onwards. When he
learned that the purpose of the seminar would bore no relation to his duties, he told Abad
that he would not attend the seminar and that he would have

to leave at 2:00 p.m. in order to be with his family in the province. Dalangin claimed that
Abad insisted that he attend the seminar so that the other employees would also attend.
He replied that he should not be treated similarly with the other employees as there are
marked differences between their respective positions and duties. Nonetheless, he
signified his willingness to attend the seminar, but requested Abad to have it conducted
within office hours to enable everybody to attend.

-Dalangin further alleged that Abad refused his request and stressed that all company
employees may be required to stay beyond 2:00 p.m. on Saturdays which she considered
still part of office hours. Dalangin argued that it has been an established company practice
that on Saturdays, office hours end at 2:00 p.m. and

that an employee cannot be made to stay in the office beyond office hours, except under
circumstances provided in Article 89 of the Labor Code.

-Dalangin claimed that Abad issued a memorandum requiring him to explain why he could
not attend the seminar scheduled and the other forthcoming seminars. Dalangin met Mr.
Sichani, the company’s Managing Director, and was told that Mr. Sichani that his services
were being terminated because Sichani could not keep

in his company "people who are hard-headed and who refuse to follow orders from
management." Sichani also told him that since he was a probationary employee, his
employment could be terminated at any time and at

will. Sichani refused to accept his letter-reply to the company memorandum and instead
told him to just hand it over to Abad.

-The company however, alleged that during his brief employment in the company, Dalangin
showed lack of enthusiasm towards his work and was indifferent towards his co-employees
and the company clients. Dalangin refused to comply with the company’s policies and
procedures, routinely taking long lunch breaks, exceeding

the one hour allotted to employees, and leaving the company premises without informing
his immediate superior, only to call the office later and say that he would be unable to
return because he had some personal matters to attend to. He also showed lack of
interpersonal skills and initiative which he manifested when the

immigration application of a company client, Mrs. Jennifer Tecson, was denied by the
Canadian Embassy.

-Dalangin failed to provide counsel to Tecson; he also should have found a way to appeal
her denied application, but he did not. As it turned out, the explanation he gave to Tecson
led her to believe that the company did not handle her application well. Dalangin’s lack of
interest in the company was further manifested when he refused to attend company-
sponsored seminars designed to acquaint or update the employees with the company’s
policies and objectives.

-The company argued that since Dalangin failed to qualify for the position of Immigration
and Legal Manager, the company decided to terminate his services, after duly notifying him
of the company’s decision and the reason for his separation.

-Labor Arbiter Eduardo G. Magno declared Dalangin’s dismissal illegal, and awarded him
backwages of P75,000.00, moral damages of P50,000.00 and exemplary damages of P50,
000.00, plus 10% attorney’s fees.

-On appeal by the company, the NLRC found Dalangin’s dismissal to be a valid exercise of
the company’s management prerogative because Dalangin failed to meet the standards for
regular employment. Dalangin moved for reconsideration, but the NLRC denied the motion.

-The CA held that the NLRC erred when it ruled that Dalangin was not illegally dismissed.
The CA denied the company’s subsequent motion for reconsideration. Hence, this appeal.

Issue: Whether Dalangin, a probationary employee, was illegally dismissed.

Ruling:

In International Catholic Migration Commission v. NLRC, the Court explained that a

probationary employee, as understood under Article 281 of the Labor Code, is one who
is on trial by an employer, during which, the latter determines whether or not he is
qualified for permanent employment. A probationary appointment gives the employer an
opportunity to observe the fitness of a probationer while at work, and to ascertain whether
he would be a proper and efficient employee.

Dalangin was barely a month on the job when the company terminated his
employment. The essence of a probationary period of employment fundamentally lies in
the purpose or objective of both the employer and the employee during the period. While
the employer observes the fitness, propriety and efficiency of a probationer to ascertain
whether he is qualified for permanent employment, the latter seeks to prove to the former
that he has the qualifications to meet the reasonable standards for permanent
employment.

The trial period or the length of time the probationary employee remains on
probation depends on the parties‘ agreement, but it shall not exceed six (6) months under
Article 281 of the Labor Code, unless it is covered by an apprenticeship agreement
stipulating a longer period. As the Court explained in International Catholic Migration
Commission, the word probationary, as used to describe the period of employment,
implies the purpose of the term or period, but not its length.

Thus, the fact that Dalangin was separated from the service after only about four
weeks does not necessarily mean that his separation from the service is without basis.
Contrary to the CA‘s conclusions, we find substantial evidence indicating that the company
was justified in terminating Dalangin‘s employment, however brief it had been. Time and
again, we have emphasized that substantial evidence is such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.

#11

#12

Robinsons Galleria/Robinsons Supermarket Corp. v. Ranchez, G.R. No. 177937, [January

19, 2011]

FACTS

• Ranchez was a probationary employee of petitioner for a period of 5 months. She

underwent 6 weeks of training as a cashier before she was hired. Two weeks
after she was hired, Ranchez reported to her supervisor the loss of cash
 amounting to P20,299.00 which she had placed inside the company locker.
• Petitioner Manuel (Operation Manager) ordered that Ranchez be strip-searched
by the company guards. However, the search on her personal belongings yielded
nothing.
• Ranchez requested that she be allowed to settle and pay the amount but
petitioner Manuel reported the matter to the police and requested for an inquest.
• Information of Qualified Theft was filed and Ranchez was constrained to spend 2
weeks in jail for failure to immediately post bail.
• Ranchez filed a complaint for illegal dismissal and damages. Petitioner sent to
Ranchez by mail a notice of termination ad/or notice of expiration of
probationary employment.

LA dismissed the complaint for illegal dismissal, alleging that at the time of filing Ranchez
had not yet been terminated. Ranchez was merely investigated.

NLRC reversed this ruling, stating that Ranchez was illegally dismissed and that Robinson’s
should reinstate her. It held that Rachez was deprived of due process when she was strip-
searched and sent to jail for two weeks because such amounted to constructive dismissal,
making it impossible for Ranchez to continue under the employment.

• Even though she was merely a probationary employee, the lapse of the
probationary contract did not amount to valid dismissal because there was
already an unwarranted constructive dismissal beforehand.

NLRC denied Robinson’s motion for reconsideration. The CA affirmed the decision of the
NLRC.

ISSUE

• Whether Ranchez was illegally terminated from employment by petitioner.

RULING

Yes. Petitioners failed to accord respondent substantive and procedural due

process. The haphazard manner in the investigation of the missing cash, which was left
to the determination of the police authorities and the Prosecutor's Office, left
respondent with no choice but to cry foul. Administrative investigation was not
conducted by petitioner Supermarket. On the same day that the missing money was
reported by respondent to her immediate superior, the company already pre-judged
her guilt without proper investigation, and instantly reported her to the police as the
suspected thief, which resulted in her languishing in jail for two weeks.
 As correctly pointed out by the NLRC, the due process requirements under the
 Labor Code are mandatory and may not be supplanted by police investigation or court
proceedings. The criminal aspect of the case is considered independent of the
administrative aspect. Thus, employers should not rely solely on the findings of the
Prosecutor's Office. They are mandated to conduct their own separate investigation,
and to accord the employee every opportunity to defend himself. Furthermore,
respondent was not represented by counsel when she was strip-searched inside the
company premises or during the police investigation, and in the preliminary
investigation before the Prosecutor's Office
There is probationary employment when the employee upon his engagement
is made to undergo a trial period during which the employer determines his fitness to
qualify for regular employment based on reasonable standards made known to him at
the time of engagement. 
A probationary employee, like a regular employee, enjoys security of tenure. 
However, in cases of probationary employment, aside from just or authorized causes of
termination, an additional ground is provided under Article 281 of the Labor Code, i.e.,
the probationary employee may also be terminated for failure to qualify as a regular
employee in accordance with reasonable standards made known by the employer to
the employee at the time of the engagement. Thus, the services of an employee who
has been engaged on probationary basis may be terminated for any of the following: (1)
a just or (2) an authorized cause; and (3) when he fails to qualify as a regular employee
in accordance with reasonable standards prescribed by the employer.
In all cases involving employees engaged on probationary basis, the employer shall make
known to its employees the standards under which they will qualify as regular employees
at the time of their engagement. Where no standards are made known to an employee at
the time, he shall be deemed a regular employee, unless the job is self-descriptive, like
maid, cook, driver, or messenger. However, the constitutional policy of providing full
protection to labor is not intended to oppress or destroy management.  Naturally,
petitioner Supermarket cannot be expected to retain respondent as a regular employee
considering that she lost P20,299.00 while acting as a cashier during the probationary
period. The rules on probationary employment should not be used to exculpate a
probationary employee who acts in a manner contrary to basic knowledge and common
sense, in regard to which, there is no need to spell out a policy or standard to be met.

Case # 13: Mylene Carvajal vs Luzon Development and/or Oscar Z. Ramirez

[G.R. No. 186169. August 1, 2012.]

Facts:
Petitioner Mylene Carvajal was employed as a trainee-teller by respondent Luzon
Development Bank (Bank) on 28 October 2003 under a six-month probationary
employment contract, with a monthly salary of P5,175.00. Respondent Oscar Ramirez is the
President and Chief Executive Officer of the Bank.

A month into her employment, she was send a Memorandum directing her to explain in
writing why she should not be subjected to disciplinary action for her eight tardiness on
November 2003.

A second Memorandum was sent to her on January for her again chronic tardiness on
December 2003. She submitted her written explanations for both events and manifested
her acceptance of the consequences of her actions. She was terminated for three days
effective 21 January 2004. However, on 22 January, her termination was lifted but at the
same time, her services were terminated. In the respondents’ position paper to the LA,
they explained that the reasons for her absence are chronic tardiness, absenteeism and
failure to perform satisfactorily as a probationary employee.

Petitioner filed a Complaint for illegal dismissal before the Labor Arbiter. Petitioner alleged,
in her position paper, that the following were the reasons for her termination: 1) she is not
an effective frontliner; 2) she has mistakenly cleared a check; 3) tardiness; 4) absenteeism;
and 5) shortage

Respondents averred that petitioner was terminated as a probationary employee on three

grounds, namely: 1) chronic tardiness; 2) unauthorized absence; and 3) failure to perform
satisfactorily as a probationary employee. Respondents explained that petitioner was a
chronic violator of the bank's rules and regulations on tardiness and absenteeism. Aside
from her numerous tardiness, petitioner was absent without leave for 2 days. She also
cleared a check which later turned out to be a bounced check. Finally, petitioner garnered
only a rating of 2.17, with 4 being the highest and 1 the lowest, in her performance
evaluation.

LA Decision: The petitioner was illegally dismissed because she was not afforded the
notice in writing informing her of what the Bank would like to bring out to her for the latter
to answer in writing.

NLRC Decision: NLRC affirmed the decision of the LA.

CA Decision: The CA found that the petitioner was not entitled to backwages because she
was rightfully dismissed for failure to meet the employment standards.

Issue: Whether the petitioner can be considered a regular employee at the time of her
dismissal.
Held: No, Carbajal cannot be considered a regular employee.

It is beyond dispute that petitioner was hired as a probationary employee. Whether her
employment status ripened into a regular one is the point of contention. Under the very
provision cited by petitioner, we cannot, by any hermeneutics, see petitioner's employment
status as regular. At the time of her engagement and as mandated by law, petitioner was
informed in writing of the standards necessary to qualify her as a regular employee.
Carvajal’s appointment letter reads that “Possible extension of this contract will depend
on the job requirements of the Bank and your overall performance. Performance review
will be conducted before possible renewal can take effect.” Therefore, petitioner knew, at
the time of her engagement, that she must comply with the standards set forth by
respondent and perform satisfactorily in order to attain regular status. Even the NLRC
upheld the petitoner’s probationary status, stating that reinstatement is not synonymous to
regularization.

Although probationary employees also enjoy security of tenure, he may still be terminated
because of just and authorized causes of termination and the additional ground under
Article 281 of the Labor Code, i.e. the probationary employee may also be terminated for
failure to qualify as a regular employee in accordance to the reasonable standards set by
the employer. Punctuality is a reasonable standard imposed on every employee, whether
in government or private sector. This, together with absenteeism, underperformance and
mistake in clearing a check are infractions that cannot be tantamount to satisfactory
standards.

It is evident that the primary cause of respondent's dismissal from her probationary
employment was her "chronic tardiness." At the very start of her employment, petitioner
already exhibited poor working habits. Even during her first month on the job, she already
incurred eight (8) tardiness. In a Memorandum dated 11 December 2003, petitioner was
warned that her tardiness might affect her opportunity to become a permanent or regular
employee. And petitioner did not provide a satisfactory explanation for the cause of her
tardiness.

Punctuality is a reasonable standard imposed on every employee, whether in government

or private sector. As a matter of fact, habitual tardiness is a serious offense that may very
well constitute gross or habitual neglect of duty, a just cause to dismiss a regular
employee.

In addition to the abovementioned, it has been previously held in PDI vs. Magtibay, Jr., that
the second requirement under Article 281 does not require notice and hearing. Due
process of law for this second ground consists of making the reasonable standards
expected of the employee during his probationary period known to him at the time of his
engagement. By the very nature of probationary employment, the employee knows from
the very start that he will be under close observation and continuous scrutiny by his
supervisors. If termination is for cause, it may be done at anytime during the probation.

ARMANDO ALILING, petitioner, vs. JOSE B. FELICIANO, MANUEL F. SAN MATEO III,
JOSEPH R. LARIOSA, and WIDE WIDE WORLD EXPRESS CORPORATION, respondents.

VELASCO, JR., J:

FACTS:

Via a June 2, 2004 letter, Wide Wide World Express Corporation offered to employ Armando
Aliling as "Account Executive" (Seafreight Sales) with a compensation package (13k monthly
salary, transporation and clothing allowance, COLA, 14th month pay). The offer came with a
6-month probation period condition with this express caveat: "Performance during [sic]
probationary period shall be made as basis for confirmation to Regular or Permanent
Status."

On June 11, 2004, Aliling and Wide Wide World inked an Employment Contract under the ff.
terms: Conversion to regular status shall be determined on the basis of work performance;
and Employment services may, at any time, be terminated for just cause or in accordance
with the standards defined at the time of engagement.

Training then started. However, instead of Seafreight Sale assignment, Wide Wide World
asked Aliling to handle Ground Express, a new company product. Marketing this product
and finding daily contracts for it formed the core of Aliling's new assignment.

Barely a month after, San Mateo (Sales and Marketing Director), emailed Aliling to express
dissatisfaction with the latter's performance. Thereafter, Lariosa (HR Manager), asked
Aliling to report to HR to explain his absence taken without leave from Sept 20, 2004.

Aliling responded 2 days later. He denied being absent on the days in question, attaching
his copy of his timesheet. Aliling's explanation came with a query regarding the withholding
of his salary from Sept 11-25, 2004.

Aliling wrote San Mateo stating: "Pursuant to your instruction on September 20, 2004, I
hereby tender my resignation effective October 15, 2004." Wide Wide World took no action
on his tender, but he nonetheless demanded reinstatement and a written apology claiming
that San Mateo forced him to resign.

On Oct. 5, 2004, Lariosa advised Aliling thru a letter of the termination of his services
effective as of that date owing to his "non-satisfactory performance" during his
probationary period.

Earlier, on Oct 4, 2004, Aliling filed a complaint for illegal dismissal due to forced resignation
, nonpayment of salaries as well as damages, with the NLRC against Wide Wide World.

PETITIONER'S CONTENTION:

Appended to the complaint was Aliling's Affidavit in which he stated: "At the time of my
engagement, respondents did not make known to me the standards under which I will
qualify as a regular employee."

RESPONDENT'S CONTENTION:

Wide Wide World stated that in addition to the letter-offer and employment contract, Wide
Wide World and Aliling have signed a letter of appointment with this terms of engagement:
Aliling and superior are required to jointly define their objectives and his performance shall
be reviewed to assess competence and work attitude. Failure to meet the job requirements
during the probation stage means that his services may be terminated without prior notice
and without recourse to separation pay.

WW World, in a memo dated Sept. 20, 2004, asked Aliling to explain why he should not be
terminated for failure to meet the expected job performance, but instead of explaining
himself, Aliling submitted a resignation letter.

Aliling denied having received the Sept. 20, 2004 memo.

Respondents reiterated their position that WWWEC hired petitioner on a probationary

basis and fired him before he became a regular employee.

Labor Arbiter: Declared Aliling's termination as unjustified. Necessarily, Aliling's

termination is not justified for failure to comply with the mandate the law requires.
Respondents should be ordered to pay salaries corresponding to the unexpired portion of
the contract of employment and all other benefits. The labor arbiter gave credence to
Aliling's allegation about not receiving and, therefore, not bound by, San Mateo's purported
September 20, 2004 memo. The memo, to reiterate, supposedly apprised Aliling of the
sales quota he was, but failed, to meet. Pushing the point, the labor arbiter explained that
Aliling cannot be validly terminated for non-compliance with the quota threshold absent a
prior advisory of the reasonable standards upon which his performance would be
evaluated.
NLRC (appeal): Affirmed the Labor Arbiter's decision.

CA: Partly granted the petition. (a) respondents failed to prove that Aliling's dismal
performance constituted gross and habitual neglect necessary to justify his dismissal; (b)
not having been informed at the time of his engagement of the reasonable standards
under which he will qualify as a regular employee, Aliling was deemed to have been hired
from day one as a regular employee; and (c) the strained relationship existing between the
parties argues against the propriety of reinstatement.

Aliling's MR was denied, hence, this petition.

ISSUE:

Whether or not Aliling was illegally dismissed.

HELD:

YES.

To justify fully the dismissal of an employee, the employer must, as a rule, prove that the
dismissal was for a just cause and that the employee was afforded due process prior to
dismissal. As a complementary principle, the employer has the onus of proving with clear,
accurate, consistent, and convincing evidence the validity of the dismissal.

WW World had failed to discharge its twin burden in the instant case.

First off, the attendant circumstances show that the issue of Aliling's alleged failure to
achieve his quota, as a ground for terminating employment, strikes the Court as a mere
afterthought on the part of WW World. Consider: Lariosa's letter of September 25, 2004
already betrayed management's intention to dismiss Aliling for alleged unauthorized
absences. Aliling was in fact made to explain and he did so satisfactorily. But, lo and behold,
WW World nonetheless proceeded with its plan to dismiss Aliling for non-satisfactory
performance, although the corresponding termination letter dated October 6, 2004 did not
even specifically state Aliling's "non-satisfactory performance," or that Aliling's termination
was by reason of his failure to achieve his set quota.

What WW World considered as the evidence purportedly showing it gave Aliling the chance
to explain his inability to reach his quota was a purported September 20, 2004 memo of
San Mateo addressed to the latter. However, Aliling denies having received such letter and
WW World has failed to refute his contention of non-receipt. In net effect, WW World was at
a loss to explain the exact just reason for dismissing Aliling.
At any event, assuming for argument that Aliling indeed failed to achieve his sales quota,
his termination from employment on that ground would still be unjustified.

Article 282 of the Labor Code considers any of the following acts or omission on the part
of the employee as just cause or ground for terminating employment:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his employer
or any immediate member of his family or his duly authorized representatives; and

(e) Other causes analogous to the foregoing. (Emphasis supplied)

In Lim v. NLRC, the Court considered inefficiency as an analogous just cause for
termination of employment under Article 282 of the Labor Code: We cannot but agree with
PEPSI that "gross inefficiency" falls within the purview of "other causes analogous to the
foregoing," this constitutes, therefore, just cause to terminate an employee under Article
282 of the Labor Code. One is analogous to another if it is susceptible of comparison with
the latter either in general or in some specific detail; or has a close relationship with the
latter. "Gross inefficiency" is closely related to "gross neglect," for both involve specific acts
of omission on the part of the employee resulting in damage to the employer or to his
business. In Buiser vs. Leogardo, this Court ruled that failure to observed prescribed
standards to inefficiency may constitute just cause for dismissal. (Emphasis supplied.)

It did so anew in Leonardo v. NLRC on the following rationale: An employer is entitled to

impose productivity standards for its workers, and in fact, non-compliance may be visited
with a penalty even more severe than demotion. Thus, [t]he practice of a company in laying
off workers because they failed to make the work quota has been recognized in this
jurisdiction. (Philippine American Embroideries vs. Embroidery and Garment Workers, 26
SCRA 634, 639).

In the case at bar, the petitioners' failure to meet the sales quota assigned to each of
them constitute a just cause of their dismissal, regardless of the permanent or
probationary status of their employment. Failure to observe prescribed standards of
work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause
for dismissal. Such inefficiency is understood to mean failure to attain work goals or work
quotas, either by failing to complete the same within the allotted reasonable period, or by
producing unsatisfactory results. This management prerogative of requiring standards may
be availed of so long as they are exercised in good faith for the advancement of the
employer's interest.

In fine, an employee's failure to meet sales or work quotas falls under the concept of gross
inefficiency, which in turn is analogous to gross neglect of duty that is a just cause for
dismissal under Article 282 of the Code. However, in order for the quota imposed to be
considered a valid productivity standard and thereby validate a dismissal,
management's prerogative of fixing the quota must be exercised in good faith for the
advancement of its interest. The duty to prove good faith, however, rests with WW World
as part of its burden to show that the dismissal was for a just cause. WW World must show
that such quota was imposed in good faith. This WW World failed to do, perceptibly
because it could not. The fact of the matter is that the alleged imposition of the quota was
a desperate attempt to lend a semblance of validity to Aliling's illegal dismissal. It must be
stressed that even WWWEC's sales manager, Eve Amador (Amador), in an internal e-mail to
San Mateo, hedged on whether petitioner performed below or above expectation.

Being an experimental activity and having been launched for the first time, the sales of GX
services could not be reasonably quantified. This would explain why Amador implied in her
email that other bases besides sales figures will be used to determine Aliling's performance
. And yet, despite such a neutral observation, Aliling was still dismissed for his dismal sales
of GX services. In any event, WW World failed to demonstrate the reasonableness and
the bona fides on the quota imposition.

Employees must be reminded that while probationary employees do not enjoy

permanent status, they enjoy the constitutional protection of security of tenure.
They can only be terminated for cause or when they otherwise fail to meet the reasonable
standards made known to them by the employer at the time of their engagement.
Respondent WW World miserably failed to prove the termination of Aliling was for a just
cause nor was there substantial evidence to demonstrate the standards were made known
to the latter at the time of his engagement. Hence, Aliling's right to security of tenure was
breached.

OTHER ISSUES:
Petitioner is a regular employee: The Labor arbiter, NLRC and the CA are agreed, on the
basis of documentary evidence adduced, that WW World did not inform Aliling of the
reasonable standards by which his probation would be measured against at the time of his
engagement. San Mateo's email cannot support their allegation on Aliling being informed
of the standards for his continued employment, such as the sales quota, at the time of his
engagement. As it were, the email message was sent to Aliling more than a month after he
signed his employment contract with WWWEC. The aforequoted Section 6 of the
Implementing Rules of Book VI, Rule VIII-A of the Code specifically requires the employer to
inform the probationary employee of such reasonable standards at the time of his
engagement, not at any time later; else, the latter shall be considered a regular employee.
Thus, pursuant to the explicit provision of Article 281 of the Labor Code,Section 6 (d) of the
Implementing Rules of Book VI, Rule VIII-A of the Labor Code and settled jurisprudence,
petitioner Aliling is deemed a regular employee as of June 11, 2004, the date of his
employment contract.

Aliling's right to procedural due process was violated: Here, the first and second notice
requirements have not been properly observed, thus tainting petitioner's dismissal with
illegality. The adverted memo dated September 20, 2004 of WW World supposedly
informing Aliling of the likelihood of his termination and directing him to account for his
failure to meet the expected job performance would have had constituted the "charge
sheet," sufficient to answer for the first notice requirement, but for the fact that there is no
proof such letter had been sent to and received by him. In fact, in his December 13, 2004
Complainant's Reply Affidavit, Aliling goes on to tag such letter/memorandum as fabrication
. WW World did not adduce proof to show that a copy of the letter was duly served upon
Aliling. Clearly enough, WW World did not comply with the first notice requirement.

Neither was there compliance with the imperatives of a hearing or conference. The Court
need not dwell at length on this particular breach of the due procedural requirement.
Suffice it to point out that the record is devoid of any showing of a hearing or conference
having been conducted. On the contrary, in its October 1, 2004 letter to Aliling, or barely
five (5) days after it served the notice of termination, WW World acknowledged that it was
still evaluating his case. And the written notice of termination itself did not indicate all the
circumstances involving the charge to justify severance of employment.

Aliling is entitled to backwages and separation pay in lieu of reinstatement: Article

279 of the Labor Code, as amended by Section 34 of Republic Act 6715 instructs: Art. 279.
Security of Tenure. — In cases of regular employment, the employer shall not terminate the
services of an employee except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges and to his full backwages, 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. (
Emphasis supplied)

Clearly, the law intends the award of backwages and similar benefits to accumulate past
the date of the Labor Arbiter's decision until the dismissed employee is actually reinstated.
But if, as in this case, reinstatement is no longer possible, this Court has consistently ruled
that backwages shall be computed from the time of illegal dismissal until the date the
decision becomes final.

Additionally, Aliling is entitled to separation pay in lieu of reinstatement on the ground of

strained relationship.

Petitioner is not entitled to moral and exemplary damages: Moral damages are
awarded if the following elements exist in the case: (1) an injury clearly sustained by the
claimant; (2) a culpable act or omission factually established; (3) a wrongful act or omission
by the defendant as the proximate cause of the injury sustained by the claimant; and (4)
the award of damages predicated on any of the cases stated Article 2219 of the Civil Code.
In addition, the person claiming moral damages must prove the existence of bad faith by
clear and convincing evidence for the law always presumes good faith. It is not enough that
one merely suffered sleepless nights, mental anguish, and serious anxiety as the result of
the actuations of the other party. Invariably such action must be shown to have been
willfully done in bad faith or with ill motive. Aliling has failed to overcome such burden to
prove bad faith on the part of WWWEC. Aliling has not presented any clear and
convincing evidence to show bad faith. The fact that he was illegally dismissed is
insufficient to prove bad faith. Thus, the CA correctly ruled that "[t]here was no sufficient
showing of bad faith or abuse of management prerogatives in the personal action taken
against petitioner."

The officers of WWWEC cannot be held jointly and severally liable with the company:
Review of the facts of the case does not reveal ample and satisfactory proof that
respondent officers of WWEC acted in bad faith or with malice in effecting the termination
of petitioner Aliling. Even assuming arguendo that the actions of WWWEC are ill-conceived
and erroneous, respondent officers cannot be held jointly and solidarily with it. Hence, the
ruling on the joint and solidary liability of individual respondents must be recalled.
Aliling is entitled to Attorney's Fees and Legal Interest: Petitioner Aliling is also entitled
to attorney's fees in the amount of ten percent (10%) of his total monetary award, having
been forced to litigate in order to seek redress of his grievances, pursuant to Article 111 of
the Labor Code.

PETITION IS PARTIALLY GRANTED.

LABOR Case No. 15

arranged by: Liwag, Angelene L.

Topic: Exception to the Rule on Regular Employment

ROWELL INDUSTRIAL CORPORATION (RIC) vs. CA and JOEL TARIPE

CHARACTERS:

⁃ Petitioner RIC = corporation engaged in manufacturing tin cans for use in packaging of consumer
products, e.g., foods, paints, among other things.
⁃ Respondent Taripe = employed by RIC on 8 November 1999 as a "rectangular power press machine
operator" with a salary of P223.50 / day, until he was allegedly dismissed from his employment by the
RIC on 6 April 2000.

FACTS:

Taripe's claims~

In Feb. 2000, Taripe filed a complaint against RIC for regularization and payment of holiday pay,
as well as indemnity for severed finger, which was amended in April 2000 + to include illegal
dismissal. Taripe alleges that RIC employed him starting November 1999 as power press machine
operator, such position of which was occupied by RIC's regular employees and the functions of
which were necessary to the latter's business. Taripe adds that upon employment, he was
made to sign a document, which was not explained to him but which was made a condition
for him to be taken in and for which he was not furnished a copy. Taripe states that he was not
extended full benefits granted under the law and the Collective Bargaining Agreement and that in
April 2000, while the case for regularization was pending, he was summarily dismissed from his
job although he never violated any of the RIC's company rules and regulations.
RIC's claims~

Taripe was contractual employee, whose services were required due to the increase in the
demand in packaging requirement of its clients for Christmas season and to build up stock
levels during the early part of the following year; that in March 2000, Taripe's employment
contract expired. RIC avers that the information update for union members, which was allegedly
filled up by Taripe and submitted by the Union to RIC, it is stated therein that in the six (6) companies
where Taripe purportedly worked, the latter's reason for leaving was "finished contract," hence,
Taripe has knowledge about being employed by contract contrary to his allegation that the
document he was signing was not explained to him. RIC manifests that all benefits, including those
under the Social Security System, were given to him in May 2000.

_


LABOR ARBITER: dismissing respondent Taripe's Complaint based on a finding that he was a
contractual employee whose contract merely expired.

NLRC: declared that Taripe's employment with the RIC was regular in status; hence, his dismissal
was illegal - RIC and Mr. Edwin Tang are ordered to reinstate Taripe and to jointly and severally pay
him full backwages.

CA: affirmed NLRC's Resolution with modifications - modification that Edwin Tang is exonerated
from liability and the computation of backwages of Taripe shall be based onthe last salary he
received.

__

RIC's contention:

- argues that the CA had narrowly interpreted Article 280 of the Labor Code, as amended, and
disregarded a contract voluntarily entered into by the parties.

- emphasizes that while an employee's status of employment is vested by law pursuant to Article 280
of the Labor Code, as amended, said provision of law admits of two exceptions, to wit: (1) those
employments which have been fixed for a specific project or undertaking, the completion or
termination of which has been determined at the time of the engagement of the employment
; and (2) when the work or services to be performed are seasonal; hence, the employment is
for the duration of the season. Thus, there are certain forms of employment which entail the
performance of usual and desirable functions and which exceed one year but do not
necessarily qualify as regular employment under Article 280 of the Labor Code, as amended.

ISSUE: Whether Taripe was a regular employee of RIC?

HELD:

Yes, Taripe was a regular employee of RIC (by nature of work) -- thus, his dismissal was illegal.

Article 280, LC. REGULAR AND CASUAL EMPLOYMENT. — The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be
deemed to be regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, EXCEPT where the employment
has been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or services to be performed
is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: PROVIDED,
That, any employee who has rendered at least one year of service, whether such service is continuous or
broken, shall be considered a regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists.

The SC held that Article 280 of the Labor Code, as amended, classifies employees into three
categories, namely: (1) regular employees or those whose work is necessary or desirable to the
usual business of the employer; (2) project employees or those whose employment has been fixed
for a specific project or undertaking, the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season; and (3) casual employees
or those who are neither regular nor project employees. 

Regular employees are further classified into: (1) regular employees by nature of work; and (2)
regular employees by years of service. The former refers to those employees who perform a
particular activity which is necessary or desirable in the usual business or trade of the
employer, regardless of their length of service; while the latter refers to those employees who have
been performing the job, regardless of the nature thereof, for at least a year. 

The aforesaid Article 280 of the Labor Code, as amended, however, does not proscribe or prohibit
an employment contract with a fixed period. It does not necessarily follow that where the duties
of the employee consist of activities usually necessary or desirable in the usual business of the
employer, the parties are forbidden from agreeing on a period of time for the performance of such
activities. There is nothing essentially contradictory between a definite period of employment
and the nature of the employee’s duties. What Article 280 of the Labor Code, as amended, seeks
to prevent is the practice of some unscrupulous and covetous employers who wish to
circumvent the law that protects lowly workers from capricious dismissal from their
employment. The aforesaid provision, however, should not be interpreted in such a way as to
deprive employers of the right and prerogative to choose their own workers if they have
sufficient basis to refuse an employee a regular status. Management has rights which should
also be protected. 

In the case at bar, respondent Taripe signed a contract of employment prior to his admission
into the petitioner’s company. Based on the said contract, respondent Taripe’s employment
with the petitioner is good only for a period of 5 months unless the said contract is renewed
by mutual consent. And as claimed by petitioner RIC, respondent Taripe, along with its other
contractual employees, was hired only to meet the increase in demand for packaging materials
during the Christmas season and also to build up stock levels during the early part of the year. 

Necessary guidelines for a valid fixed term employment contract - Although Article 280 of the
Labor Code, as amended, does not forbid fixed term employment, it must, nevertheless, meet
any of the following GUIDELINES in order that it cannot be said to circumvent security of
tenure: (1) that the fixed period of employment was knowingly and voluntarily agreed upon by
the parties, without any force, duress or improper pressure being brought to bear upon the
employee and absent any other circumstances vitiating his consent; or (2) it satisfactorily appears
that the employer and employee dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the former on the latter. 

1st guideline - In the present case, it cannot be denied that the employment contract signed by
respondent Taripe did not mention that he was hired only for a specific undertaking, the
completion of which had been determined at the time of his engagement. The said
employment contract neither mentioned that respondent Taripe’s services were seasonal in
nature and that his employment was only for the duration of the Christmas season as
purposely claimed by petitioner RIC. What was stipulated in the said contract was that
respondent Taripe’s employment was contractual for the period of five months. Likewise,
other than the bare allegations of petitioner RIC that respondent Taripe was hired only because of
the increase in the demand for packaging materials during the Christmas season, petitioner RIC
failed to substantiate such claim with any other evidence. Petitioner RIC did not present any
evidence which might prove that respondent Taripe was employed for a fixed or specific project or
that his services were seasonal in nature. Also, petitioner RIC failed to controvert the claim of
respondent Taripe that he was made to sign the contract of employment, prepared by
petitioner RIC, as a condition for his hiring. Such contract in which the terms are prepared by
only one party and the other party merely affixes his signature signifying his adhesion thereto is
called contract of adhesion. It is an agreement in which the parties bargaining are not on equal
footing, the weaker party’s participation being reduced to the alternative “to take it or leave it.”--- In
the present case, respondent Taripe, in need of a job, was compelled to agree to the contract,
including the five-month period of employment, just so he could be hired. Hence, it cannot be
argued that respondent Taripe signed the employment contract with a fixed term of five
months willingly and with full knowledge of the impact thereof. 

2nd guideline - petitioner RIC and respondent Taripe cannot be said to have dealt with each other
on more or less equal terms with no moral dominance exercised by the former over the latter
. As a power press operator, a rank and file employee, he can hardly be on equal terms with
petitioner RIC. As the CA said, “almost always, employees agree to any terms of an employment
contract just to get employed considering that it is difficult to find work given their ordinary
qualifications.” 

→ Therefore, for failure of petitioner RIC to comply with the necessary guidelines for a valid
fixed term employment contract, it can be safely stated that the aforesaid contract signed by
respondent Taripe for a period of five months was a mere subterfuge/ploy to deny to the
latter a regular status of employment. 

Settled is the rule that the primary standard of determining regular employment is the
reasonable connection between the particular activity performed by the employee in relation
to the casual business or trade of the employer. The connection can be determined by
considering the nature of the work performed and its relation to the scheme of the particular
business or trade in its entirety. 

Given the foregoing, indeed, respondent Taripe, as a rectangular power press machine operator,
in charge of manufacturing covers for “four liters rectangular tin cans,” was holding a
position which is necessary and desirable in the usual business or trade of petitioner RIC,
which was the manufacture of tin cans. Therefore, respondent Taripe was a regular employee of
petitioner RIC by the nature of work he performed in the company. 

Respondent Taripe does NOT fall under the exceptions mentioned in Article 280 of the Labor Code,
as amended, because it was not proven by petitioner RIC that he was employed only for a specific
project or undertaking or his employment was merely seasonal. Similarly, the position and function
of power press operator cannot be said to be merely seasonal. Such position cannot be considered
as only needed for a specific project or undertaking because of the very nature of the business of
petitioner RIC. Indeed, respondent Taripe is a regular employee of petitioner RIC and as such, he
cannot be dismissed from his employment unless there is just or authorized cause for his dismissal. 

Well-established is the rule that regular employees enjoy security of tenure and they can only
be dismissed for just cause and with due process, notice and hearing. And in case of
employees’ dismissal, the burden is on the employer to prove that the dismissal was legal.
Thus, respondent Taripe’s summary dismissal, not being based on any of the just or authorized
causes enumerated under Articles 282, 283, and 284 of the Labor Code, as amended, is illegal. 

Petition is denied.

=> WHEREFORE, premises considered, the instant Petition is hereby DENIED. NLRC and CA's
decisions are affirmed -- finding Taripe as a regular employee who had been illegally dismissed from
employment by RIC. Costs against petitioner RIC.