SECOND DIVISION Altiche reached Imasen's Press Area, he heard the sound of a running

industrial fan. Intending to turn the fan off, he followed the sound that
[G.R. No. 194884. October 22, 2014.] led him to the plant's "Tool and Die" section.
At the "Tool and Die" section, Altiche saw the respondents
IMASEN PHILIPPINE MANUFACTURING having sexual intercourse on the oor, using a piece of carton as
CORPORATION, petitioner, vs. RAMONCHITO T. mattress. Altiche immediately went back to the guard house and
ALCON and JOANN S. PAPA, respondents. relayed what he saw to Danilo S. Ogana, another security guard on
duty.
AaECSH

DECISION On Altiche's request, Ogana made a follow-up inspection.

Ogana went to the "Tool and Die" section and saw several employees,
including the respondents, already leaving the area. He noticed,
BRION, J : p however, that Alcon picked up the carton that Altiche claimed the
respondents used as mattress during their sexual act, and returned it to
We resolve in this petition for review on certiorari 1 the the place where the cartons were kept. Altiche then submitted a
challenge to the June 9, 2010 decision 2 and the December 22, 2010 handwritten report 6 of the incident to Imasen's Finance and
resolution 3 of the Court of Appeals (CA) in CA-G.R. SP No. 110327. Administration Manager.
This CA decision nulli ed the December 24, 2008 decision 4 of the
National Labor Relations Commission (NLRC) in NLRC CA No. On October 14, 2002, Imasen issued the respondents separate
043915-05 (NLRC CASE No. RAB IV-12-1661-02-L). The NLRC inter-o ce memoranda 7 informing them of Altiche's report on the
ruling, in turn, a rmed the December 10, 2004 decision 5 of the Labor October 5, 2002 incident and directing them to submit their individual
Arbiter (LA), dismissing the illegal dismissal complaint led by explanation. The respondents complied with the directive; they
respondents Ramonchito T. Alcon and Joann S. Papa (collectively claimed that they were merely sleeping in the "Tool and Die" section
referred to as respondents). at the time of the incident. They also claimed that other employees
were near the area, making the commission of the act charged
The Factual Antecedents impossible.
Petitioner Imasen Philippine Manufacturing Corporation is a On October 22, 2002, Imasen issued the respondents another
domestic corporation engaged in the manufacture of auto seat-recliners inter-o ce memorandum 8 directing them to appear at the formal
and slide-adjusters. It hired the respondents as manual welders in hearing of the administrative charge against them. The hearing was
2001. conducted on October 30, 2002, 9 presided by a mediator and attended
by the representatives of Imasen, the respondents, Altiche and Ogana.
On October 5, 2002, the respondents reported for work on the Altiche and Ogana reiterated the narrations in Altiche's handwritten
second shift — from 8:00 pm to 5:00 am of the following day. At report.
around 12:40 am, Cyrus A. Altiche, Imasen's security guard on duty,
went to patrol and inspect the production plant's premises. When
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 On December 4, 2002, Imasen issued the respondents separate 2002 inside company premises — and Imasen's observance of due
inter-o ce memoranda 10 terminating their services. It found the process in dismissing the respondents from employment.
respondents guilty of the act charged which it considered as "gross
misconduct contrary to the existing policies, rules and regulations of The CA, however, disagreed with the conclusion that the
the company." respondents' sexual intercourse inside company premises constituted
serious misconduct that the Labor Code considers su cient to justify
On December 5, 2002, the respondents led before the LA the the penalty of dismissal. The CA pointed out that the respondents' act,
complaint 11 for illegal dismissal. The respondents maintained their while provoked by "reckless passion in an inviting environment and
version of the incident. time," was not done with wrongful intent or with the grave or
aggravated character that the law requires. To the CA, the penalty of
In the December 10, 2004 decision, 12 the LA dismissed the dismissal is not commensurate to the respondents' act, considering
respondents' complaint for lack of merit. The LA found the especially that the respondents had not committed any infraction in the
respondents' dismissal valid, i.e., for the just cause of gross past.
misconduct and with due process. The LA gave weight to Altiche's
account of the incident, which Ogana corroborated, over the Accordingly, the CA reduced the respondents' penalty to a
respondents' mere denial of the incident and the unsubstantiated three-month suspension and ordered Imasen to: (1) reinstate the
explanation that other employees were present near the "Tool and Die" respondents to their former position without loss of seniority rights
section, making the sexual act impossible. The LA additionally and other privileges; and (2) pay the respondents backwages from
pointed out that the respondents did not show any ill motive or intent December 4, 2002 until actual reinstatement, less the wages
on the part of Altiche and Ogano sufficient to render their accounts of corresponding to the threemonth suspension.
the incident suspicious.
Imasen led the present petition after the CA denied its motion for
The NLRC's ruling reconsideration
19 in the CA's December 22, 2010 resolution. 20
In its December 24, 2008 decision, 13 the NLRC dismissed the aHTDAc

respondents' appeal 14 for lack of merit. In a rming the LA's ruling, the The Petition
NLRC declared that Imasen substantially and convincingly proved just
cause for dismissing the respondents and complied with the required Imasen argues in this petition that the act of engaging in sexual
due process. intercourse inside company premises during work hours is serious
misconduct by whatever standard it is measured. According to Imasen,
The respondents filed before the CA a petition for certiorari 15 the respondents' infraction is an affront to its core values and high
after the NLRC denied their motion for reconsideration 16 in its May ethical work standards, and justi es the dismissal. When the CA
29, 2009 resolution. 17 reduced the penalty from dismissal to three-month suspension, Imasen
points out that the CA, in effect, substituted its own judgment with its
The CA's ruling (Imasen's) own legally protected management prerogative.
In its June 9, 2010 decision, 18 the CA nulli ed the NLRC's Lastly, Imasen questions the CA's award of backwages in the
ruling. The CA agreed with the labor tribunals' ndings regarding the respondents' favor. Imasen argues that the respondents would virtually
infraction charged — engaging in sexual intercourse on October 5,
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 gain from their infraction as they would be paid eight years worth of The law and jurisprudence guarantee to every employee
wages without having rendered any service; eight (8) years, in fact, far security of tenure. This textual and the ensuing jurisprudential
exceeds their actual period of service prior to their dismissal. commitment to the cause and welfare of the working class proceed
from the social justice principles of the Constitution that the Court
The Case for the Respondents zealously implements out of its concern for those with less in life.
The respondents argue in their comment 21 that the elements of Thus, the Court will not hesitate to strike down as invalid any
serious misconduct that justi es an employee's dismissal are absent in employer act that attempts to undermine workers' tenurial security. All
this case, adopting thereby the CA's ruling. Hence, to the respondents, these the State undertakes under Article 279 (now Article 293) 22 of
the CA correctly reversed the NLRC's ruling; the CA, in deciding the the Labor Code which bar an employer from terminating the services
case, took a wholistic consideration of all the attendant facts, i.e., the of an employee, except for just or authorized cause and upon
time, the place, the persons involved, and the surrounding observance of due process.
circumstances before, In protecting the rights of the workers, the law, however, does
during, and after the sexual intercourse, and not merely the infraction not authorize the oppression or self-destruction of the employer. 23 The
committed. constitutional commitment to the policy of social justice cannot be
understood to mean that every labor dispute shall automatically be
The Issue
decided in favor of labor. 24 The constitutional and legal protection
The sole issue for this Court's resolution is whether the equally recognize the employer's right and prerogative to manage its
respondents' infraction — engaging in sexual intercourse inside operation according to reasonable standards and norms of fair play.
company premises during work hours — amounts to serious
misconduct within the terms of Article 282 (now Article 296) of the Accordingly, except as limited by special law, an employer is
Labor Code justifying their dismissal. free to regulate, according to his own judgment and discretion, all
aspects of employment, including hiring, work assignments, working
T methods, time, place and manner of work, tools to be used, processes
to be followed, supervision of workers, working regulations, transfer
he Court's Ruling We of employees, worker supervision, layoff of workers and the
discipline, dismissal and recall of workers. 25 As a general proposition,
GRANT the petition. an employer has free reign over every aspect of its business, including
We nd that the CA reversibly erred when it nulli ed the NLRC's the dismissal of his employees as long as the exercise of it s
decision for grave abuse of discretion the NLRC's decision. management prerogative is done reasonably, in good faith, and in a
manner not otherwise intended to defeat or circumvent the rights of
Preliminary workers.
considerations: tenurial
In these lights, the Court's task in the present petition is to
security vis-à-vis balance the con icting rights of the respondents to security of tenure,
management prerogative on one hand, and of Imasen to dismiss erring employees pursuant to
the legitimate exercise of its management prerogative, on the other.

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 Management's right to Article 282 (now
dismiss an employee; Article 296) of the
serious misconduct as Labor
just cause for the Code justifying their dismissal
dismissal Dismissal situations (on the ground of serious misconduct)
The just causes for dismissing an employee are provided under involving sexual acts, particularly sexual intercourse committed by
Article 282 26 (now Article 296) 27 of the Labor Code. Under Article employees inside company premises and during work hours, are not
282 (a), serious misconduct by the employee justifies the employer in usual violations 33 and are not found in abundance under
terminating his or her employment. IEHaSc
jurisprudence. Thus, in resolving the present petition, we are largely
guided by the principles we discussed above, as applied to the totality
Misconduct is de ned as an improper or wrong conduct. It is a of the circumstances that surrounded the petitioners' dismissal.
transgression of some established and de nite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies In other words, we view the petitioners' act from the prism of
wrongful intent and not mere error in judgment. 28 To constitute a the elements that must concur for an act to constitute serious
valid cause for the dismissal within the text and meaning of Article misconduct, analyzed and understood within the context of the overall
282 of the Labor Code, the employee's misconduct must be serious, circumstances of the case. In taking this approach, we are guided, too,
i.e., of such grave and aggravated by the jurisdictional limitations that a Rule 45 review of the CA's Rule
character and not merely trivial or unimportant. 29 65 decision in labor cases imposes on our discretion. 34

Additionally, the misconduct must be related to the In addressing the situation that we are faced with in this
performance of the employee's duties showing him to be un t to petition, we determine whether Imasen validly exercised its
continue working for the employer . 30 Further, and equally important prerogative as employer to dismiss the respondentsemployees who,
and required, the act or conduct must have been performed with within company premises and during work hours, engaged in sexual
wrongful intent. 31 intercourse. As framed within our limited Rule 45 jurisdiction, the
question that we ask is: whether the NLRC committed grave abuse
To summarize, for misconduct or improper behavior to be a of discretion in nding that the respondents' act amounted to what
just cause for dismissal, the following elements must concur: (a) the Article 282 of the Labor Code textually considers as serious
misconduct must be serious; (b) it must relate to the performance of misconduct to warrant their dismissal .
the employee's duties showing that the employee has become un t to
continue working for the employer; 32 and (c) it must have been After due consideration, we nd the NLRC legally correct and
performed with wrongful intent. well within its jurisdiction when it a rmed the validity of the
respondents' dismissal on the ground of serious misconduct.
The respondents'
infraction amounts to Sexual acts and intimacies between two consenting adults
serious misconduct belong, as a principled ideal, to the realm of purely private relations.
Whether aroused by lust or in amed by sincere affection, sexual acts
within the terms of should be carried out at such place, time and circumstance that, by the
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 generally accepted norms of conduct, will not offend public decency respondents, in this balancing under the circumstances of the case, we
nor disturb the generally held or accepted social morals. Under these have to rule against their tenurial rights in favor of the employer's
parameters, sexual acts between two consenting adults do not have a management rights.
place in the work environment.
All told, the respondents' misconduct, under the circumstances
Indisputably, the respondents engaged in sexual intercourse of this case, fell within the terms of Article 282 (now Article 296) of
inside company premises and during work hours. These the Labor Code. Consequently, we reverse the CA's decision for its
circumstances, by themselves, are already punishable misconduct. failure to recognize that no grave abuse of discretion attended the
Added to these considerations, however, is the implication that the NLRC's decision to support the respondents' dismissal for serious
respondents did not only disregard company rules but aunted their misconduct. EaCDAT

disregard in a manner that could reflect adversely on the status of

ethics and morality in the company. WHEREFORE, in light of these considerations, we hereby GRANT
the petition. We
Additionally, the respondents engaged in sexual intercourse in
REVERSE the decision dated June 9, 2010 and the resolution dated
an area where coemployees or other company personnel have ready
December 22, 2010 of the Court of Appeals in CA-G.R. SP No.
and available access. The respondents likewise committed their act at
110327 and REINSTATE the decision dated December 24, 2008 of
a time when the employees were expected to be and had, in fact, been
the National Labor Relations Commission in NLRC CA No.
at their respective posts, and when they themselves were supposed to
04391505 (NLRC Case No. RAB IV-12-1661-02-L).
be, as all other employees had in fact been, working.
SO ORDERED.
Under these factual premises and in the context of legal
parameters we discussed, we cannot help but consider the respondents' Carpio, Mendoza, Reyes * and Perlas-Bernabe, ** JJ., concur.
misconduct to be of grave and aggravated character so that the
company was justi ed in imposing the highest penalty available —
dismissal. Their infraction transgressed the bounds of socially and
morally accepted human public behavior, and at the same time showed Footnotes
brazen disregard for the respect that their employer expected of them * Designated as Additional Member in lieu of Associate Justice
as employees. By their misconduct, the respondents, in effect, issued
Mariano C. Del Castillo, per Raffle dated October 11, 2012.
an open invitation for others to commit the same infraction, with like
disregard for their employer's rules, for the respect owed to their ** Designated as Acting Member in lieu of Associate Justice Marvic
employer, and for their co-employees' sensitivities. Taken together, M.V.F. Leonen, per Special Order No. 1841 dated October 13,
these considerations reveal a depraved disposition that the Court 2014.
cannot but consider as a valid cause for dismissal.
1. Rollo, pp. 10-38.
In ruling as we do now, we considered the balancing between the
respondents' tenurial rights and the petitioner's interests — the need to 2. Penned by Associate Justice Ricardo R. Rosario and concurred in
defend their management prerogative and to maintain as well a high by Associate Justices Hakim S. Abdulwahid and Samuel H.
standard of ethics and morality in the workplace. Unfortunately for the Gaerlan; id. at 232-242.
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 3. Id. at 251. Hundred Forty-Two, as Amended, Otherwise known as The
Labor Code of the
4. Penned by Commissioner Romeo L. Go, id. at 125-130.
Philippines," approved on June 21, 2011, the Labor Code
5. Penned by Labor Arbiter Enrico Angelo C. Porcillo, id. at 106-112. articles beginning with Article 130 are renumbered.

6. Id. at 71. Article 279 of the Labor Code, as amended by Section 34 of Republic
Act No. 6715, reads in full:
7. Id. at 72-73.
ART. 279. SECURITY OF TENURE. —
8. Id. at 76-78.
In cases of regular employment, the employer shall not terminate the
9. Minutes of the hearing, id. at 79-81.
services of an employee except for just cause or when
10. Id. at 82-83. authorized by this Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of
11. Id. at 39-41. seniority rights and other privileges and to his full backwages,
12. Supra note 5. inclusive of allowances, and to his other benefits or their
monetary equivalent computed form the time his compensation
13. Supra note 4. was withheld from him up to the time of his actual
14. Rollo, pp. 113-124. reinstatement.

15. Id. at 145-171. 23. Mercury Drug Corporation v. NLRC, G.R. No. 75662, September
15, 1989, 177 SCRA 580, 586-587.
16. Rollo, pp. 131-142.
24. Id.
17. Id. at 143-144.
25. San Miguel Brewery Sales Force Union (PTGWO) v. Hon. Ople,
18. Supra note 2. 252 Phil. 27, 30 (1989); Autobus Workers' Union v. NLRC, 353
Phil. 419, 429 (1998).
19. Rollo, pp. 243-249.
26. Article 282 reads:
20. Supra note 3.
ART. 282. TERMINATION BY EMPLOYER. —
21. Rollo, pp. 245-262.
22. As directed by Republic Act No. 10151, entitled "An Act Allowing An employer may terminate an employment for any of the following
the Employment of Night causes:
Workers, thereby Repealing Articles 130 and 131 of
Presidential Decree Number Four

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 (a) Serious misconduct or willful disobedience by the employee of 31. See Echeverria v. Venutek Medika, Inc., 544 Phil. 763, 770
the lawful orders of his employer or representative in (2007).
connection with his work;
32. Yabut v. Manila Electric Company, supra note 28, at 105;
(b) Gross and habitual neglect by the employee of his duties; Tomada, Sr. v. RFM CorporationBakery Flour Division, supra
note 28, at 391; Nagkakaisang Lakas ng Manggagawa sa Keihin
(c) Fraud or willful breach by the employee of the trust reposed in (NLMK-OLALIA-KMU) v. Keihin Philippines Corporation,
him by his employer or duly authorized representative; G.R. No. 171115, August 9, 2010, 627 SCRA 179, 188.

(d) Commission of a crime or offense by the employee against the 33. See Stanford Microsystems, Inc. v. National Labor Relations
person of his employer or any immediate member of his family Commission, 241 Phil. 426 (1988).
or his duly authorized representative; (e) Other causes 34. See Montoya v. Transmed, G.R. No. 183329, August 27, 2009,
analogous to the foregoing. [Emphasis ours] 597 SCRA 334, 342-343.

27. Supra note 23.

28. Yabut v. Manila Electric Company, G.R. No. 190436, January 16,
2012, 663 SCRA 92, 105;
Torreda v. Toshiba Information Equipment (Phils.), Inc., 544
Phil. 71, 92 (2007), citing
Fujitsu Computer Products Corp. of the Philippines v. Court
of Appeals, 494 Phil. 697
(2005); Caltex (Philippines), Inc. v. Agad, G.R. No. 162017,
April 23, 2010, 619 SCRA 196, 213; and Tomada, Sr. v. RFM
Corporation-Bakery Flour Division, G.R. No. 163270,
September 11, 2009, 599 SCRA 381, 391.
29. See Caltex (Philippines), Inc. v. Agad, supra note 28, at 213;
Tomada, Sr. v. RFM Corporation-Bakery Flour Division, supra
note 28, at 391; Sang-an v. Equator Knights Detective and
Security Agency, Inc., G.R. No. 173189, February 13, 2013, 690
SCRA 534, 542.
30. Tomada, Sr. v. RFM Corporation-Bakery Flour Division, supra
note 28, at 391.

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