15. MERALCO vs. Quisumbing, G.R. No.

127598, January 27, 1999

FACTS:

The court directed the parties to execute a CBA incorporating the terms among
which are the following modifications among others: Wages: PhP 1,900 for 1995-1996;
Retroactivity: December 28, 1996-Dec. 1999, etc. Dissatisfied, some members of the union
filed a motion for intervention/reconsideration. Petitioner warns that is the wage increase of
Php2,000.00 per month as ordered is allowed, it would pass the cost covering such increase
to the consumers through an increase rate of electricity. On the retroactivity of the CBA
arbitral award, the parties reckon the period as when retroaction shall commence.

ISSUE:

Whether or not retroactivity of arbitral awards shall commence at such time as

granted by Secretary.

RULING:

In St. Luke’s Medical vs Torres, a deadlock developed during CBA negotiations

between management unions. The Secretary assumed jurisdiction and ordered the
retroaction of the CBA to the date of expiration of the previous CBS. The Court ratiocinated
thus: In the absence of a specific provision of law prohibiting retroactive of the effectivity of
arbitral awards issued by the Secretary pursuant to article 263(g) of the Labor Code, public
respondent is deemed vested with the plenary and discretionary powers to determine the
effectivity thereof.
In general, a CBA negotiated within six months after the expiration of the existing CBA
retroacts to the day immediately following such date and if agreed thereafter, the effectivity
depends on the agreement of the parties. On the other hand, the law is silent as to the
retroactivity of a CBA arbitral award or that granted not by virtue of the mutual agreement of
the parties but by intervention of the government. In the absence of a CBA, the Sec
retary’s
determination of the date of retroactivity as part of his discretionary powers over arbitral
awards shall control.

Wherefore, the arbitral award shall retroact from December 1, 1995 to November 30, 1997;
and the award of wage is increased from Php1,900 to Php2,000.

16. Serrano vs. NLRC

GR No. 117040

FACTS:

Serrano was a regular employee of Isetann Department Store as the head of Security Checker. In 1991,
as a cost-cutting measure, Isetann phased out its entire security section and engaged the services of an
independent security agency. Petitioner filed a complaint for illegal dismissal among others. Labor
arbiter ruled in his favor as Isetann failed to establish that it had retrenched its security section to
prevent or minimize losses to its business; that private respondent failed to accord due process to
petitioner; that private respondent failed to use reasonable standards in selecting employees whose
employment would be terminated. NLRC reversed the decision and ordered petitioner to be given
separation pay.

ISSUE:

Whether or not the hiring of an independent security agency by the private respondent to replace its
current security section a valid ground for the dismissal of the employees classed under the latter.

RULING:

An employer’s good faith in implementing a redundancy program is not necessarily put in doubt by the
availment of the services of an independent contractor to replace the services of the terminated
employees to promote economy and efficiency. Absent proof that management acted in a malicious or
arbitrary manner, the Court will not interfere with the exercise of judgment by an employer.

If termination of employment is not for any of the cause provided by law, it is illegal and the employee
should be reinstated and paid backwages. To contend that even if the termination is for a just cause, the
employee concerned should be reinstated and paid backwages would be to amend Art 279 by adding
another ground for considering dismissal illegal.

If it is shown that the employee was dismissed for any of the causes mentioned in Art 282, the in
accordance with that article, he should not be reinstated but must be paid backwages from the time his
employment was terminated until it is determined that the termination of employment is for a just
cause because the failure to hear him before he is dismissed renders the termination without legal
effect.

17. Abbott v. Alcaraz (G.R. No. 192571; July 23, 2013)

FACTS:

Petitioner Abbott Laboratories, Philippines (Abbott) caused the publication in a major broadsheet
newspaper of its need for a Medical and Regulatory Affairs Manager. Alcaraz - who was then a
Regulatory Affairs and Information Manager at Aventis Pasteur Philippines, Incorporated (another
pharmaceutical company like Abbott) showed interest and submitted her application.

In Abbotts offer sheet, it was stated that Alcaraz was to be employed on a probationary basis. Later that
day, she accepted the said offer and received an electronic mail (e-mail) from Abbotts Recruitment
Officer, petitioner Teresita C. Bernardo (Bernardo), confirming the same. Attached to Bernardos e-mail
were Abbotts organizational chart and a job description of Alcarazs work.

During Alcarazs pre-employment orientation, petitioner Allan G. Almazar (Almazar), Hospiras Country
Transition Manager, briefed her on her duties and responsibilities as Regulatory Affairs Manager.
Petitioner Kelly Walsh (Walsh), Manager of the Literature Drug Surveillance Drug Safety of Hospira, will
be her immediate supervisor. Petitioner Maria Olivia T. Yabut-Misa (Misa), Abbotts Human Resources
(HR) Director, sent Alcaraz an e-mail which contained an explanation of the procedure for evaluating the
performance of probationary employees.
During the course of her employment, Alcaraz noticed that some of the staff had disciplinary problems.
Thus, she would reprimand them for their unprofessional behavior such as non-observance of the dress
code, moonlighting, and disrespect of Abbott officers. However, Alcarazs method of management was
considered by Walsh to be "too strict."

Alcaraz was called to a meeting with Walsh and Terrible, Abbotts former HR Director, where she was
informed that she failed to meet the regularization standards for the position of Regulatory Affairs
Manager. Walsh, Almazar, and Bernardo personally handed to Alcaraz a letter stating that her services
had been terminated effective May 19, 2005. The letter detailed the reasons for Alcarazs termination.
Alcaraz felt that she was unjustly terminated from her employment and thus, filed a complaint for illegal
dismissal and damages against Abbott and its officers, namely, Misa, Bernardo, Almazar, Walsh, Terrible,
and Feist. She claimed that she should have already been considered as a regular and not a probationary
employee given Abbotts failure to inform her of the reasonable standards for her regularization upon
her engagement as required under Article 295of the Labor Code.

LA dismissed Alcarazs complaint for lack of merit. The LA rejected Alcarazs argument that she was not
informed of the reasonable standards to qualify as a regular employee. The NLRC reversed the findings
of the LA and ruled that there was no evidence showing that Alcaraz had been apprised of her
probationary status and the requirements which she should have complied with in order to be a regular
employee. On appeal, CA affirmed the NLRC decision. Hence, this petition.

ISSUE: Was Alcaraz illegally dismissed?

HELD:

Yes, Alcaraz was illegally dismissed.

The probationary employee may also be terminated for failure to qualify as a regular employee in
accordance with the reasonable standards made known by the employer to the employee at the time of
the engagement.

Considering the totality of the above-stated circumstances, it cannot, therefore, be doubted that Alcaraz
was well-aware that her regularization would depend on her ability and capacity to fulfill the
requirements of her position as Regulatory Affairs Manager and that her failure to perform such would
give Abbott a valid cause to terminate her probationary employment.

Despite the existence of a sufficient ground to terminate Alcarazs employment and Abbotts compliance
with the Labor Code termination procedure, it is readily apparent that Abbott breached its contractual
obligation to Alcaraz when it failed to abide by its own procedure in evaluating the performance of a
probationary employee.

In this light, while there lies due cause to terminate Alcarazs probationary employment for her failure to
meet the standards required for her regularization, and while it must be further pointed out that Abbott
had satisfied its statutory duty to serve a written notice of termination, the fact that it violated its own
company procedure renders the termination of Alcarazs employment procedurally infirm, warranting
the payment of nominal damages.
18. Noblado vs Alfonso
G.R. No. 189229
November23,2015

19. D&C PRODUCTS VS. SANTOS

GR NO. 212616
JULY 10,2017

Petitioner is a domestic corporation engaged in the business of selling and distributing electrical
products and equipment with Vincent M. Tiamsic as its president. Respondent, on the other hand, was
employed as petitioners' company driver.

On July 25, 2011, respondent filed against petitioners a complaint for constructive illegal dismissal and
payment of separation pay. In his Position Paper[6], respondent contended that: he started working as
petitioners' company driver on April 5, 2005; on December 16, 2010, he received a notice informing him
that he was being placed under preventive suspension for a period of thirty (30) days beginning
December 17, 2010 because he was one of the employees suspected of having participated in the
unlawful taking of circuit breakers and electrical products of petitioners; a criminal complaint was filed
against him and several other persons with the Prosecutor's Office of Mandaluyong City; he immediately
inquired from petitioner company's Human Resources Department as to the exact reason why he was
suspended because he was never given the opportunity to explain his side before he was suspended but
the said Department did not give him any concrete explanation; and after the lapse of his 30-day
suspension he was no longer allowed to return to work without any justification for such disallowance.

On their part, petitioners claimed in their Position Paper[7] that: they employed respondent as their
company driver whose job included the delivery of items purchased by customers, receipt
documentation and recording of previously purchased products which were returned by customers and
coordination with the company warehouseman and the accounting department concerning all items
which are subject of delivery and receipt by the company; on February 19, 2010, petitioner corporation,
through its hired auditors, conducted a physical stock inventory of all materials stored in the company's
warehouse and in its office building; after such inventory, it was found out that a number of electrical
materials and products with an estimated value of P457,394.35, were missing; a subsequent inventory
on April 24, 2010 likewise revealed that a 2000-ampere circuit breaker worth P106,341.75 was also
missing, as well as thirty-seven (37) pieces of 40-ampere circuit breakers which had a total value of
P39,940.04; herein respondent and the company warehouseman were the only persons who had
complete access to the company warehouse as they were entrusted with the handling of all products
from the company's suppliers; considering the size and weight of the missing items, they can only be
carried by no less than two (2) persons; petitioners demanded an explanation from respondent and the
warehouseman, but they failed to make an account as to how these products had gone missing from the
warehouse and office building; as such, petitioners filed a criminal complaint for qualified theft and,
thereafter, they suspended herein respondent; and after the lapse of his suspension, respondent no
longer returned to work.

On January 30, 2012, the LA handling the case rendered his Decision finding respondent to be illegally
terminated from his employment, thus, ordering his reinstatement and payment of his full backwages
amounting to P297,916.67. The LA held that herein petitioners had the burden of proving that
respondent's dismissal was valid and their failure to discharge this burden only means that the dismissal
was not justified and, therefore, illegal.
Petitioners filed an appeal with the NLRC.

On May 16, 2012, the NLRC promulgated its Decision dismissing petitioners' appeal and affirming, with
modification, the decision of the LA. In addition to the payment of backwages, the NLRC ordered
petitioners to pay respondent separation pay equivalent to one (1) month for every year of service,
instead of reinstatement.

Petitioners filed a Motion for Reconsideration but the NLRC denied it in its Resolution dated June 25,
2012.

Aggrieved, petitioners filed a petition for certiorari with the CA. On November 22, 2013, the CA
rendered its assailed Decision denying the certiorari petition and affirming the questioned NLRC
Decision and Resolution.
Petitioners filed a Motion for Reconsideration, but it was likewise denied in the CA Resolution of May
20, 2014. Hence, the present petition for review on certiorari.

ISSUE:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN DECIDING THE INSTANT CASE NOT IN ACCORD
WITH THE HONORABLE SUPREME COURT DECISIONS.

RULING:

No, the court of appeals erred in deciding the instant case not in accord with the honorable supreme
court decisions.

Our Constitution, statutes and jurisprudence uniformly guarantee to every employee or worker tenurial
security. What this means is that an employer shall not dismiss an employee except for a just or
authorized cause and only after due process is observed.

In the instant case, petitioners contend that their termination of respondent's employment was based
on their loss of trust and confidence in him. Loss of trust and confidence is a just cause for dismissal
under Article 282(c) of the Labor Code, which provides that an employer may terminate an employment
for "[f]raud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative."

However, in order for the employer to properly invoke this ground, the employer must satisfy two
conditions. First, the employer must show that the employee concerned holds a position of trust and
confidence.[15] Jurisprudence provides for two classes of positions of trust.[16] The first class consists of
managerial employees, or those who, by the nature of their position, are entrusted with confidential
and delicate matters and from whom greater fidelity to duty is correspondingly expected.[17] The
second class includes "cashiers, auditors, property custodians, or those who, in the normal and routine
exercise of their functions, regularly handle significant amounts of [the employer's] money or
property."[18]
Second, the employer must establish the existence of an act justifying the loss of trust and
confidence.[19] To be a valid cause for dismissal, the act that betrays the employer's trust must be real,
i.e., founded on clearly established facts, and the employee's breach of the trust must be willful, i.e., it
was done intentionally, knowingly and purposely, without justifiable excuse.[20] Moreover, with respect
to rank-and-file personnel, loss of trust and confidence, as ground for valid dismissal, requires proof of
involvement in the alleged events in question, and that mere uncorroborated assertions and accusations
by the employer will not be sufficient.

It is true that respondent may indeed be considered as one who occupies a position of trust and
confidence as he is one of those who were entrusted with the handling of a significant amount or
portion of petitioners' products for sale. However, even a quick perusal of the records at hand would
show that petitioners failed to present substantial evidence to support their allegations that respondent
had, in any way, participated in the theft of the company's stolen items and that after his preventive
suspension he no longer reported for work. In other words, petitioners were not able to establish the
existence of an act justifying their alleged loss of trust and confidence in respondent.

As to whether or not respondent was afforded procedural due process, the settled rule is that in
termination proceedings of employees, procedural due process consists of the twin requirements of
notice and hearing.[29] The employer must furnish the employee with two written notices before the
termination of employment can be effected: (1) the first apprises the employee of the particular acts or
omissions for which his dismissal is sought; and (2) the second informs the employee of the employer's
decision to dismiss him.[30] The requirement of a hearing is complied with as long as there was an
opportunity to be heard, and not necessarily that an actual hearing was conducted.

In the instant case, the LA, the NLRC and the CA again uniformly ruled that respondent was dismissed
sans procedural due process. The only notice given by petitioners to respondent was the notice of his
30-day preventive suspension and, as found by the LA, nothing therein indicated that he was required
nor was given the opportunity to explain his side, considering that he was being implicated in the theft
of the subject circuit breakers and other electrical products. It is true that petitioners conducted their
own investigation but the same was made without the participation of respondent.
As to the required notice of termination, petitioners allege that they did not terminate respondent from
his employment and that it was the latter who actually decided to abandon his job. However, the LA, the
NLRC and the CA again unanimously found that petitioners failed to substantiate their allegation and the
Court finds no cogent reason to depart from such finding.

20. BROWN MADONNA PRESS INC., THADDEUS ANTHONY A. CABANGON, FORTUNE LIFE
INSURANCE COMPANY (now Fortune General Insurance Corporation) and/or ANTONIO
CABANGON CHUA,
vs.
MARIA ROSARIO M. CASAS,

FACTS:

In 1984, Casas was hired as an accounting clerk at Fortune General Insurance. She eventually rose from
the ranks; she was transferred to BMPI, another ALC member company, as its Vice President for Finance
and Administration.
Casas met with BMPI’s company president, and the Vice President for the Central Human Resource
Department of the ALC Group of Companies. During the meeting, Casas was allegedly told not to report to
work anymore starting January 8, 2007, upon the instructions of Cabangon-Chua, ALC’s Chairman
Emeritus. Casas claims that the reason for her abrupt dismissal was not disclosed to her, but she was
promised a separation pay. She thus packed her things and left.

BMPI, on the other hand, asserts that it was Casas who requested a graceful exit from the company. The
meeting was supposedly held to confront Casas about certain complaints against her, and about the
growing rift between her and another company officer. BMPI asserts that Casas opted to leave the company
to avoid an administrative investigation against her and to give her the chance to jumpstart her career
outside the company. She succeeded in convincing Cabangon to grant her some form of financial
assistance as they were friends.4

Casas no longer reported for work and BMPI, for its part, started the processing of her clearance. Casas
sent Cabangon-Chua a letter asking for the reconsideration of his decision to terminate her employment.
Cabangon-Chua did not act on this letter.

Casas filed a complaint for illegal dismissal and for payment of separation pay, backwages, retirement
benefits and attorney’s fees.

ISSUE: WON Casas had been illegally dismissed.

(Did she voluntarily resign from, or abandon her work at, BMPI, or was she summarily dismissed by
Cabangon?)

HELD: YES, Casas had been illegally dismissed.

The CA did not err in affirming the

NLRC’s factual finding that Casas
had been dismissed from work

In illegal dismissal cases, the employer has the burden of proving that the employee’s dismissal was
legal.1âwphi1However, to discharge this burden, the employee must first prove, by substantial evidence,
that he had been dismissed from employment.

The CA, in affirming the NLRC’s conclusion that Casas had been dismissed, gave emphasis to the
existence of two documents on record: first, the unsigned clearance and quitclaim document unilaterally
prepared by BMPI, and second, the letter Casas sent to Cabangon-Chua, asking the latter to reconsider
her termination.

These pieces of evidence sufficiently establish Casas’ dismissal from the company.

The Clearance and Quitclaim document discloses that Casas would "cease to be connected with the
company at the close of office on January 16, 2007." The document, which was even introduced as
evidence by the petitioners, was prepared unilaterally at Cabangon’s instructions. It shows the company’s
intent to sever its employment relationship with Casas. Considered together with the letter Casas sent
Cabangon-Chua asking for her reinstatement on May 17, 2007, these documents back Casas’sr assertion
that she was compelled to leave her job on January 5, 2007.

As their main defense, BMPI and Cabangon claim that they never dismissed Casas from work, and that
she instead requested a graceful exit from the company.
Jurisprudence has established that employers interposing their employee’s resignation as a defense from
illegal dismissal cases have the burden of proving that the employee indeed voluntarily
resigned.33 Resignation — the formal pronouncement or relinquishment of a position or office — is the
voluntary act of an employee compelled by personal reason(s) to disassociate himself from
employment.34 It is done with the intention of relinquishing an office, accompanied by the act manifesting
this intent.35

In the present case, the petitioners allege that Casas asked for a graceful exit from the company to avoid
an administrative investigation against her. They claim that Casas had grossly failed to manage and take
control of BMPI’s ex-deal assets, which caused the company serious losses. When Casas was confronted
about these reports of mismanagement, she voluntarily resigned from office in exchange for separation
pay.

NLRC and CA correctly disregarded these allegations in concluding that Casas had been terminated from
office.

First, the pieces of evidence that the petitioners submitted are insufficient to establish their claim. To prove
that Casas voluntarily abandoned her work, the petitioners submitted affidavits from their employees,
Domingo Almoninia, Jr. and Victoria C. Nava, who both testified to the events leading to a private
conversation between Casas and Cabangon.

Domingo Almoninia, Jr., BMPI’s former Chief Audit Executive, Testified36 that he had informed Cabangon
of reports regarding Casas’s mismanagement of BMPI’s ex-deal assets on January 5, 2007. Casas,
together with Vice President for Human Resources Victoria Nava, were then summoned to Cabangon’s
room. According to Almoninia, he witnessed Cabangon confront Casas regarding reports about her
mismanagement and certain unauthorized transactions. In the course of the discussion, Cabangon
allegedly told Casas that the reports against her would have to be investigated, and instructed her to settle
her differences with a certain Mr. Tayag. Casas asked Cabangon if she was being dismissed, to which the
latter answered in the negative. Both Almoninia and Nava were then asked to leave the room.

Nava, on the other hand, corroborated Almoninia’s narration, and added insinuations that Casas had been
having problems in the company.37

In considering their affidavits, we emphasize that neither Almoninia nor Nava were present in the private
conversation that ensued between Cabangon and Casas, after the confrontation that they witnessed. This
leaves Cabangon’s claim that Casas asked for a graceful exit from the company uncorroborated; what
stands is Casas’ statement contradicting the claim that she had not been dismissed from her job.

Second, Cabangon failed to provide any documentary evidence supporting Casas’ voluntary resignation.
BMPI failed to show any resignation letter from Casas. The Clearance and Quitclaim document, which
shows Casas’ severance from the company, does not contain her signature.38 Neither was Casas given
any return to work order, notice of infraction, or notice of termination, all of which could have supported
BMPI’s theory that Casas was never prevented from going back to work.

Third, Cabangon, Almoninia and Nava’s testimonies show that Casas could have entertained the motive
to resign from her work, but does not prove her intent to leave her office. Intent to relinquish one’s office is
determined from the acts of an employee before and after the alleged resignation. Casas’ acts after
allegedly resigning from work negate this intent: she wrote a letter asking Cabangon-Chua to reconsider
her termination from office; she refused to sign the Clearance and Quitclaim document; and she filed an
illegal dismissal case against her employers.

The CA did not err in affirming the

NLRC’s conclusion that Casas’
dismissal violated the procedural
requirements of the Labor Code

The sudden termination from office was without just cause and violated procedural due process.

According to the NLRC, despite the serious allegations that the BMPI lodged against Casas, it never asked
her to explain her acts, and instead opted to sever its employment relations with her. On this basis alone,
the NLRC concluded that Casas’ dismissal had been illegal and non-compliant with procedural due process.

Casas had been dismissed prior to any probe on her reported violation of company rules and regulations.

In determining whether an employee’s dismissal had been legal, the inquiry focuses on whether the
dismissal violated his right to substantial and procedural due process. An employee’s right not to be
dismissed without just or authorized cause as provided by law, is covered by his right to substantial due
process. Compliance with procedure provided in the Labor Code, on the other hand, constitutes the
procedural due process right of an employee.

The violation of either the substantial due process right or the procedural due process right of an employee
produces different results. Termination without a just or authorized cause renders the dismissal invalid, and
entitles the employee to reinstatement without loss of seniority rights and other privileges and full
backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the
time the compensation was not paid up to the time of actual reinstatement.

An employee’s removal for just or authorized cause but without complying with the proper procedure, on
the other hand, does not invalidate the dismissal. It obligates the erring employer to pay nominal damages
to the employee, as penalty for not complying with the procedural requirements of due process.

Thus, two separate inquiries must be made in resolving illegal dismissal cases: first, whether the dismissal
had been made in accordance with the procedure set in the Labor Code; and second, whether the dismissal
had been for just or authorized cause.

There can be no doubt that the procedural requirements had not been complied with in the present case:
shortly after a private conversation between Cabangon and Casas, Casas took her belongings from the
office and left the building. As explained earlier, Casas’s acts after this private conversation reveal that she
had been summarily dismissed: Casas gave no resignation letter, refused to sign the Clearance and
Quitclaim document that the company issued, and sent a letter asking for her reinstatement.

Notably, the private conversation that led to Casas’s summary dismissal did not conform, in any way, to the
procedural due process requirements embodied in Rule XIV of the Omnibus Rules Implementing the Labor
Code, viz:

RULE XIV Termination of Employment

SECTION 1. Security of tenure and due process. — No workers shall be dismissed except for a just or
authorized cause provided by law and after due process.

SECTION 2. Notice of dismissal.— Any employer who seeks to dismiss a worker shall furnish him a written
notice stating the particular acts or omission constituting the grounds for his dismissal. In cases of
abandonment of work, the notice shall be served at the worker's last known address.

xxx
SECTION 5. Answer and hearing. — The worker may answer the allegations stated against him in the
notice of dismissal within a reasonable period from receipt of such notice. The employer shall afford the
worker ample opportunity to be heard and to defend himself with the assistance of his representative, if he
so desires.

SECTION 6. Decision to dismiss. — The employer shall immediately notify a worker in writing of a decision
to dismiss him stating clearly the reasons therefor.

Cabangon failed to show any written notice provided to Casas informing her of the charges against her,
and neither had she been informed in writing of her dismissal and the reasons behind it.

Even assuming arguendo that Casas had indeed voluntarily abandoned her work – an uncorroborated claim
by Cabangon – Cabangon had the duty to give Casas a written notice of the grounds leading to her
dismissal.

Thus, Cabangon failed to comply with the two-notice requirement under the law, resulting in a violation of
Casas’s right to procedural due process.

The CA did not err in finding no

grave abuse of discretion in the
NLRC’s decision to hold that Casas
had been dismissed without just
cause

Casas’s dismissal had not been for just cause, because at the time she was dismissed, not one of the
charges against her had been proven. Casas was, at the time of her dismissal, presumed innocent until
proven guilty; thus, there existed no just cause to terminate her employment at the time she was summarily
dismissed.

In reaching this conclusion, the CA reviewed whether the NLRC acted with grave abuse of discretion in
holding that Casas’s dismissal had no just cause. The NLRC, in its decision, held that Casas’s dismissal
had not been for just cause because she was not even allowed to explain the supposed acts that had been
inimical to BMPI’s interests.

In affirming the NLRC’s decision, the CA clarified the application of procedural and substantial due process
in the present case: Casas had not been given the two-notice requirement in the law, and hence, her
procedural due process rights had been violated. And because not one of the allegations against her had
been proven at the time she was summarily dismissed, there existed no cause to terminate her services.

We have, in the past, affirmed the NLRC in ruling that an employee’s act not proven at the time he had
been dismissed does not constitute just cause for his dismissal. In other words, for an act to justify an
employee’s dismissal, it should have been proven, with substantial evidence, at the time he was dismissed.
Otherwise, the dismissal would not be for just cause.

This conclusion finds support in cases emphasizing that an unsubstantiated accusation will not ripen into a
holding that there is just cause for dismissal.47 A mere accusation of wrongdoing is not sufficient cause for
a valid dismissal of an employee. The facts for which a dismissal is based should be backed by substantial
evidence at the time the employee is dismissed, and not at the time his dismissal is being questioned before
the courts.

In the present case, the petitioners allege that Casas had committed various infractions that would have
warranted disciplinary action against her. At the time that Casas was dismissed, however, these alleged
infractions were mere speculations. The present petition for review on certiorari admits this reality in two
instances: first, in the body of the petition itself stating that at the time of the January 5, 2007 meeting,
disciplinary proceedings had yet to be initiated against Casas and that the reports against her would still
have to be verified;48 and second, through its annexes, which provided that the result of the investigation
in the ex-deal assets that Casas allegedly mismanaged was produced only on February 17, 2007, or a full
month after Casas’ dismissal.

Thus, at the time Cabangon asked Casas to leave her employment, all he had as basis for Casas’s
dismissal were speculations. Worse, Cabangon’s summary dismissal of Casas left her with little opportunity
to adequately defend herself from the allegations against her.

In these lights, we support the CA in holding that Casas’ summary dismissal had not been for just cause.

Just cause must be proven with

substantial evidence at the time of
dismissal

At its core, substantive due process guarantees a right to liberty that cannot be taken away or unduly
constricted, except through valid causes provided in the law.

The concepts of procedural and substantive due process had been carried over and applied to illegal
dismissal cases, although notably, employers are not governmental bodies to which these rights usually
refer. Agabon v. NLRC51 described the due process required in dismissing employees as statutory –
requirements that the law imposes on employers to comply with, in contrast to constitutional due process
rights that guarantee against overreach from the government.

Although statutory in nature, the procedural and substantive due process requirements in illegal dismissal
cases stem from the protection that the Constitution provides labor – the Constitution has tasked the State
to promote the workers’ security of tenure, humane conditions of work, and a living wage. These
guarantees, as well as a host of other rights and responsibilities, find implementation through the Labor
Code, which fleshed out the concept of security of tenure54 as the continuance of regular employment until
an employee's services are terminated because of just or authorized causes enumerated in the law.

Thus, despite the differences in origin and application between constitutional due process rights and the
statutory requirements in the Labor Code, we have applied concepts implementing constitutional due
process rights to the statutory due process requirements of the Labor Code. We did this in the present
case, when we emphasized the need for substantial evidence to support the just cause for the employee's
dismissal at the time her services were terminated. In the same way that the crime charged against an
accused must first be proven before his or her right to liberty is taken away, or that a government employee's
infraction must first be proven before the accused is deprived of the right to continue !o hold office, so too,
must just cause against an employee be proven before he or she may be deprived of a means of livelihood.
Otherwise, the employee's right to substantive due process would be violated.

In these lights, and in order to give full effect to the embodiment of substantive due process in illegal
dismissal cases, it is necessary to rule, that an employee, in this present case Casas, cannot be terminated
from service without sufficient substantial evidence of the just cause that would merit her dismissal.

21. PLDT vs. NLRC

G.R. No. 80609
August 23, 1988

Facts:
Abucay, a traffic operator of the PLDT, was accused by two complainants of having demanded and
received from them the total amount of P3,800.00 in consideration of her promise to facilitate approval
of their applications for telephone installation. Investigated and heard, she was found guilty as charged
and accordingly separated from the service. She went to the Ministry of Labor and Employment claiming
she had been illegally removed. After consideration of the evidence and arguments of the parties, the
company was sustained and the complaint was dismissed for lack of merit. Nevertheless, the dispositive
portion of labor arbiter’s decision declared: WHEREFORE, the instant complaint is dismissed for lack of
merit.

Considering that Dr. Bangayan and Mrs. Martinez are not totally blameless in the light of the fact that
the deal happened outhide the premises of respondent company and that their act of giving P3,800.00
without any receipt is tantamount to corruption of public officers, complainant must be given one
month pay for every year of service as financial assistance.

Both the petitioner and the private respondent appealed to the National Labor Relations Board, which
upheld the said decision in toto and dismissed the appeals. The private respondent took no further
action, thereby impliedly accepting the validity of her dismissal. The petitioner, however, is now before
us to question the affirmance of the above- quoted award as having been made with grave abuse of
discretion.

The position of the petitioner is simply stated: It is conceded that an employee illegally dismissed is
entitled to reinstatement and backwages as required by the labor laws. However, an employee
dismissed for cause is entitled to neither reinstatement nor backwages and is not allowed any relief at
all because his dismissal is in accordance with law. In the case of the private respondent, she has been
awarded financial assistance equivalent to ten months pay corresponding to her 10 year service in the
company despite her removal for cause. She is, therefore, in effect rewarded rather than punished for
her dishonesty, and without any legal authorization or justification. The award is made on the ground of
equity and compassion, which cannot be a substitute for law. Moreover, such award puts a premium on
dishonesty and encourages instead of deterring corruption.

For its part, the public respondent claims that the employee is sufficiently punished with her dismissal.
The grant of financial assistance is not intended as a reward for her offense but merely to help her for
the loss of her employment after working faithfully with the company for ten years. In support of this
position, the Solicitor General cites the cases of Firestone Tire and Rubber Company of the Philippines v.
Lariosa and Soco v. Mercantile Corporation of Davao, where the employees were dismissed for cause
but were nevertheless allowed separation pay on grounds of social and compassionate justice.

Issue: WON Separation pay is proper.

Held:
We hold that henceforth separation pay shall be allowed as a measure of social justice only in those
instances where the employee is validly dismissed for causes other than serious misconduct or those
reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual
intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow
worker, the employer may not be required to give the dismissed employee separation pay, or financial
assistance, or whatever other name it is called, on the ground of social justice. A contrary rule would, as
the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring employee
for his offense. And we do not agree that the punishment is his dismissal only and that the separation
pay has nothing to do with the wrong he has committed. Of course it has. Indeed, if the employee who
steals from the company is granted separation pay even as he is validly dismissed, it is not unlikely that
he will commit a similar offense in his next employment because he thinks he can expect a like leniency
if he is again found out. This kind of misplaced compassion is not going to do labor in general any good
as it will encourage the infiltration of its ranks by those who do not deserve the protection and concern
of the Constitution.

The policy of social justice is not intended to countenance wrongdoing simply because it is committed
by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense.
Compassion for the poor is an imperative of every humane society but only when the recipient is not a
rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels
any more than can equity be an impediment to the punishment of the guilty. Those who invoke social
justice may do so only if their hands are clean and their motives blameless and not simply because they
happen to be poor. This great policy of our Constitution is not meant for the protection of those who
have proved they are not worthy of it, like the workers who have tainted the cause of labor with the
blemishes of their own character.

Applying the above considerations, we hold that the grant of separation pay in the case at bar is
unjustified. The private respondent has been dismissed for dishonesty, as found by the labor arbiter and
affirmed by the NLRC and as she herself has impliedly admitted. The fact that she has worked with the
PLDT for more than a decade, if it is to be considered at all, should be taken against her as it reflects a
regrettable lack of loyalty that she should have strengthened instead of betraying during all of her 10
years of service with the company. If regarded as a justification for moderating the penalty of dismissal,
it will actually become a prize for disloyalty, perverting the meaning of social justice and undermining
the efforts of labor to cleanse its ranks of all undesirables.
Petition granted.

22. Sutherland, Inc. vs. Larry Labrador

GR NO. 193107 MARCH 24,2014

Facts

 Sutherland is engaged in the business of process outsourcing and technology consulting services
for international clients. In 2006, Sutherland hired Labrador as one of its call center agents.
 In his 2 years of working there, Labrador committed several infractions. In June 2008, Labrador
was finally charged with violation of transgressing the “Non-Compliance Sale Attribute” policy
clause stated in the Employee Handbook.
o Allegedly, in May, one of Sutherland’s customers complained that Labrador initially
asked for her credit card account, but only for purposes of verification. As it turned out,
a second account was created and a new order was placed under the same customer’s
name. Thus, two sets of packages were shipped to the customer who had to pay twice
for the same product.
o This is classified as an act of dishonesty or fraud. Sutherland sent Labrador a Notice to
Explain in writing why he should not be held administratively liable. An administrative
hearing was conducted that also took into consideration his past infractions namely:
 Sep. 2007: not disclosing customer information appropriately and signing up the
call-in client for a second account without even verifying if he already had a
previous account.
  Feb 2008: fatal error in handling a particular customer complaint or query. He
was then placed under immediate counseling under the Monitoring
Improvement Program in order to improve his performance
 After investigation, a recommendation was issued finding Labrador guilty of violating the
Employee Handbook due to gross or habitual neglect of duty. He was requested to resign due to
humanitarian purposes. So on June 17 2008, he resigned.
 On Oct. 27, 2008 however, Labrador filed a complaint for illegal/constructive dismissal before
the LA.
 LA dismissed the complaint for lack of merit - found just cause to terminate Labrador’s
employment, and that his resignation letter had been voluntarily executed.
 Labrador filed his Memorandum of Appeal w/ NLRC. Sutherland noted there were formal
defects in Labrador’s Memorandum on Appeal warranting its immediate dismissal, namely: (1)
he failed to state the date of receipt of the appealed decision; and (2) he also failed to attach a
certificate of non-forum shopping in accordance with the NLRC Rules of Procedure.
 Nevertheless, NLRC reversed LA’s ruling. It ruled that the resignation was involuntary.
Sutherland filed MR (denied), and then a petition for certiorari with the CA for GADLEJ of NLRC.
CA dismissed the petition, ruling that technical rules are not binding in labor cases. CA also
affirmed NLRC’s decision that Labrador had been illegally dismissed. CA denied the MR

Issue & Ruling

WON taking cognizance of the appeal despite its apparent defects amounts to GADLEJ. NO

 At the time this case was appealed to the NLRC, the then governing rule was the 2005 Revised
Rules of Procedure of the NLRC (2005 NLRC Rules) whose Section 4, Rule VI provided:
o Requisites For Perfection Of Appeal. - a) The appeal shall be:
o 1) filed within the reglementary period provided in Section 1 of this Rule;
o 2) verified by the appellant himself in accordance with Section 4, Rule 7 of the Rules of
Court, as amended;
o 3) in the form of a memorandum of appeal which shall state the grounds relied upon
and the arguments in support thereof, the relief prayed for, and with a statement of
the date the appellant received the appealed decision, resolution or order;
o 4) in three (3) legibly typewritten or printed copies; and
o 5) accompanied by i) proof of payment of the required appeal fee; ii) posting of a cash
or surety bond as provided in Section 6 of this Rule; iii) a certificate of non-forum
shopping; and iv) proof of service upon the other parties.
 However, technical rules are not necessarily fatal in labor cases; they can be liberally applied if
any doubt or ambiguity would be resolved in favor of labor. These technicalities and limitations
can only be given their fullest effect if the case is substantively unmeritorious; otherwise, and if
the defect is similar to the present one and can be verified from the records (as in this case), we
have the discretion not to consider them fatal. (same for non-forum shopping- in fact, 2011
NLRC Rules of Procedure no longer requires it)

WON NLRC nevertheless committed GADLEJ. YES.

 In this jurisdiction, the findings of the NLRC are generally binding and should be treated with
finality. The CA only looks at the facts to determine if a tribunal, board or officer exercising
 judicial or quasi-judicial functions acted without or in excess of its or his jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction in appreciating the facts.
 Rule 45 of the Rules of Court, on the other hand, confines this Court to a review of the case
solely on pure questions of law.
 Here, the CA gravely misappreciated the import of the evidence on record and can even be said
to have disregarded it. The NLRC glossed over Labrador’s repeated violations that led the latter
to request that he be allowed to resign to preserve his reputation for future employment, rather
than be dismissed from the service.
o The first offense (committed on September 24, 2007) already gave rise to a “Last
Written Warning” with the statement that it was a serious offense, constituting neglect
of duty for deviating from the program/department’s standard operating procedures.
Under this clear warning, a second similar offense would necessarily lead to his
dismissal; otherwise the purpose of a “Last Written Warning” would have been negated.
o The NLRC, unfortunately, completely disregarded this piece of important evidence.
This disregard · a gross failure to recognize undisputed evidence on record ·
constitutes grave abuse of discretion.
 Article 282 of the Labor Code provides that an employee may be terminated from the service on
either of the following just causes:
o 1. Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
o 2. Gross and habitual neglect by the employee of his duties;
o 3. Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative;
o 4. 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
o 5. Other causes analogous to the foregoing
 Thus, it was within Sutherland’s prerogative to terminate Labrador’s employment when he
committed a serious infraction and, despite a previous warning, repeated it. To Sutherland’s
credit, it duly complied with the procedural requirement in dismissing an employee; it clearly
observed both substantive and procedural due process. Its action was based on a just and
authorized cause, and the dismissal was effected after due notice and hearing. After Labrador’s
subsequent infraction, Sutherland sent him a Notice to Explain and an administrative hearing
was thereafter conducted. During the hearing, Labrador himself admitted his faults. These
incidents were properly recorded and were properly discussed in Sutherland’s recommendation.
But before Sutherland could finally pronounce its verdict, Labrador submitted his resignation
letter, impelled no doubt, as Sutherland alleged, by the need to protect his reputation and his
future employment chances. To be sure, Sutherland’s explanation was not remote, far-fetched
or unbelievable given the undisputable evidence on record of infractions.

23. Benson Industries Employees Union vs. Benson Industries

G.R. No. 200746
August 6, 2014

Topic: CBA as an informal s qource of labor law.

Facts: Respondent Benson Industries (BI) is the employer and Petitioner Benson Industries Employees
Union (BIEU) is the Employee-Union. BI sent its employees a notice informing them of their intended
termination from employment due to the closure and/or cessation of business operations. The employees,
through BIEU, filed a notice of strike, but it did not push through because an amicable settlement was
occurred, in which the parties agreed that BI will pay its employees separation pay, computed 15 days for
every year of service. Petitioners proffered a claim for payment of additional separation pay at the rate of 4
days for every year of service, invoking their Collective Bargaining Agreement (CBA). BI countered that the
law does not require them to pay separation benefits when the closure is due to serious losses, pursuant
to Art. 297 of the Labor Code

Issue: Can the additional separation pay be given to the employees pursuant to the CBA?

Ruling: Yes. The obligation to pay separation benefits in this case, is not sourced from law but from
contract, which is the CBA. For such exemption to obtain against a contract, such as a CBA, the tenor of
the parties’ agreement ought to be similar to the law’s tenor. When the parties, however, agree to deviate
therefrom, and unqualifiedly covenant the payment of separation benefits irrespective of the employer’s
financial position, then the obligatory force of that contract prevails and its terms should be carried out to
its full effect. Verily, it is fundamental that obligations arising from contracts have the force of law between
the contracting parties and thus should be complied with in good faith; and parties are bound by the
stipulations, clauses, terms and conditions they have agreed to, the only limitation being that these
stipulations, clauses, terms and conditions are not contrary to law, morals, public order or public policy.

A collective bargaining agreement refers to the negotiated contract between a legitimate labor organization
and the employer concerning wages, hours of work and all other terms and conditions of employment in a
bargaining unit. As in all contracts, the parties in a CBA may establish such stipulations, clauses, terms and
conditions as they may deem convenient provided these are not contrary to law, morals, good customs,
public order or public policy. Thus, where the CBA is clear and unambiguous, it becomes the law between
the parties and compliance therewith is mandated by the express policy of the law.

In this case, it was not found that the CBA is not contrary to law, morals, good customs, public order or
public policy, thus it is valid and subsisting, and therefore the employer is required to pay the benefits.