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t e r m s w i th n o m o r a l d o m i n an c e

w h a t e v e r b e i n g e x e r c is e d b y t h e

f o r m e r o n t h e l a t t e r .

In the case at bench, the employmentcontract entered into by the parties hereinappears to have observed the saidguidelines. Furthermore, it is evident from

the records that the subsequent re-hiringof petitioners which was to continue duringthe period of liquidation and the process ofliquidation ended prior to the enactment ofRA 7169 entitled, "An Act to RehabilitatePhilippine Veterans Bank", which waspromulgated on January 2, 1992.However, petitioners were illegallydismissed.

It is settled that in cases of illegaldismissal, the burden is on the employerto prove that there was a valid ground fordismissal. Mere allegation of reduction ofcosts without any proof to substantiate thesame cannot be given credence by theSupreme Court. Here, respondents failedto rebut petitioners evidence, thus,irresistible conclusion is that the dismissalin question was illegal. Such illegaldismissal warrants reinstatement and

payment of backwages. However, sincepetitioners reinstatement is nowconsidered impractical because the newPhilippine Veterans Bank has beenrehabilitated by virtue of RA 7169, theSupreme Court limits the relief to begranted to the petitioners to the unpaidwages during the remaining period of theiremployment contract. If the contract isfor a fixed term and the employee is

dismissed without just cause, he is

entitled to the payment of his salariescorresponding to the unexpiredportion of the employment contract. Inthis case, the unpaid wages should bereckoned on February 18, 1991 to January1, 1992. January 1, 1992 is considered thedate of expiration of the period ofliquidation since January 2, 1992 was the

effectivity of RA 7169.

Petition is partly granted.

D. M. CONSUNJI, INC v s . NLRC andALEXANDER AGRAVIADOR G.R. No.116572. December 18, 2000KAPUNAN

Facts:

Private respondents were hired bypetitioner as project employees to work onits Cebu Super Block Project in Cebu City.Their separate but identical contracts stateamong others:

You are hired/appointed as projectemployee as ___________ for anestimated period of employment for

_____________________ in the

company's construction project at CebuSuperblock.

THE TERMS AND CONDITIONS OF YOUREMPLOYMENT ARE AS FOLLOWS:

The period of employment is for anestimated period of one month that is for

___________________ to_____________________ provided that it

shall not extend beyond the duration ofthe project xxx..

Private respondents services wereterminated allegedly without regard to thedate of termination as specified in theircontracts of employment. Petitionerreported the termination of their services

to DOLE alleging that the term of thecontracts of employment had expired. Theprivate respondents then filed theirrespective complaints for illegal dismissalLabor Arbiter rendered a decision findingthe dismissal of the private respondentswithout just cause and ordering petitionerto reinstate them to their former positionswithout loss of benefits and seniority rightsand to pay them, which was affirmed byNLRC.

Issue: WON the private respondents wereproject employees.

Ruling:

Project employee is one whoseemployment has been fixed for a specific

project or undertaking the completion ortermination of which has been determined

at the time of the engagement of theemployee or where the work or services tobe performed is seasonal in nature and theemployment is for the duration of theseason. Supreme Court has held that thelength of service of a projectemployee is not the controlling test ofemployment tenure but whether ornot the employment has been fixedfor a specific project or undertaking

the completion or termination of

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which has been determined at thetime of the engagement of theemployee.

In the case at bench, private respondentsare project employees. Their contracts ofemployment readily show that the privaterespondents were employed with respect

to a specific project. The privaterespondents in this case were workers in aconstruction project of the petitioner.While employed with respect to a specificproject, the contracts of employmentbetween the private respondents and thepetitioner provide that the former wereemployed for a term of 1 month which wasthe estimated period for the project to befinished. The private respondents do noteven claim to be regular employees butmerely that, as employees at the CebuSuper Block, they were terminated beforethe completion of the project without justcause and due process. As projectemployees, there is no showing that theywere part of the work pool of thepetitioner construction company. Hence,private respondents admit that they arenot unaware that as project employeestheir employment can be terminated upon

the completion of the project.

Issue: WON the termination of theiremployment was illegal.

Ruling:

Examining the standard contracts signedby the private respondents, there arethree ways by which their employment

may be terminated: one, the expiration of

the one month period, which was theestimated period for the completion of the

project; two, the completion of the projector phase of the project for which theywere engaged prior to the expiration of theone month period; and three, upon thefinding of unsatisfactory services or other

just cause. The private respondents

admitted that they signed theiremployment contract voluntarily. By thisadmission, the private respondentsnecessarily bound themselves to beemployed for a fixed duration knowinglyand voluntarily without any force, duressor improper pressure. There is no showingthat the term fixed was used to precludeacquisition of tenurial security sinceprivate respondents were admittedlyemployed with respect to a specificproject, the Cebu Super Block.Inescapably, being a valid contractbetween the private respondents and thepetitioner, the provisions thereof,specifically with respect to the one (1)month period of employment, has theforce of law between the parties.

At the time of the termination of theprivate respondents employment on

March 2, 1993, the respective periods orterms of employment of privaterespondents Barcelona, Laspuna and Diazhad already expired. The fact that theywere allowed to work for weeks after theexpiration of their contracts would notnecessarily show that petitioner haddishonored the contracts. Indeed, somephases of the project may not have beencompleted after the estimated one month

period and that their services were stillnecessary.

On the other hand, the one month periodunder the contracts of Agraviador andMendrez had not yet expired when theirservices were terminated on March 2,1993. Petitioner has not alleged, much

less established, that the prematuretermination of the services of privaterespondents Agraviador and Mendrez wasdue to the earlier completion of the projector any phase or phases thereof to whichthey were assigned. Neither has it beenshown that the services of Agraviador andMendrez were unsatisfactory. Intermination cases, the burden ofproving that an employee has beenlawfully dismissed lies with theemployer. It is in the interest of

justice to require employers to statethe reason for their projectemployees dismissal and prove thisground once its veracity ischallenged. Employers who hire projectemployees are mandated to prove theactual basis of the latters dismissal. Theinescapable conclusion is that Agraviadorand Mendrez were terminated prior to the

expiration of the period of theiremployment without just cause, hence,their termination was illegal. However,private respondents can not be reinstatedsince the project they were assigned towas already completely finished.

NLRC is reversed.

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PLDT vs. ROSALINA C. ARCEO G.R. No.149985 May 5, 2006 CORONA

Facts:

On May, 1990, Respondent Rosalina Arceo(Arceo) applied for the position oftelephone operator with petitioner

Philippine Long Distance Telephone Co.She, however, failed the pre-employmentqualifying examination. Having failed thetest, Arceo requested PLDT to allow her towork at the latters office even withoutpay. PLDT agreed and assigned her to itscommercial section where she was madeto perform various tasks like photocopyingdocuments, sorting out telephone bills andnotices of disconnection, and other minorassignments and activities. After twoweeks, PLDT decided to pay her theminimum wage. On February 15, 1991,PLDT saw no further need for Arceosservices and decided to fire her but,through the intervention of PLDTscommercial section supervisor, Mrs.Beatriz Mataguihan, she wasrecommended for an on-the-job trainingon minor traffic work. When she failed toassimilate traffic procedures, the company

transferred her to auxiliary services, aminor facility. Subsequently, Arceo tookthe pre-qualifying exams for the positionof telephone operator two more times butagain failed in both attempts. Finally, onOctober 13, 1991, PLDT discharged Arceofrom employment. She then filed a casefor illegal dismissal before the laborarbiter. The LaborArbiter ordered PLDT to reinstate Arceo to

her "former position or to an equivalent

position." This decision became final andexecutory. On June 9, 1993, Arceo wasreinstated as casual employee with aminimum wage. She was assigned tophotocopy documents and sort outtelephone bills. On September 3, 1996 ormore than three years after herreinstatement, Arceo filed a complaint for

ULP alleging that, since her reinstatement,she had yet to be regularized and had yetto receive the benefits due to a regularemployee. On August 18, 1997, LaborArbiter ruled that Arceo was alreadyqualified to become a regular employee.He also found that petitioner denied her allthe benefits and privileges of a regularemployee.

Issue: WON Arceo eligible to become aregular employee of PLDT.

Ruling:

Under Art. 280, Labor Code, the provisionsof written agreement to the contrarynotwithstanding and regardless of the oralagreement of the parties, a nem p l o y m e n t s h a l l b e d eem e d t o b e

r e g u l a r w h e r e t h e em p l o y e e h a s b e e n

e n g a g e d t o p e r f o r m a c t iv i t ie s w h i c h a r e u s u a l ly n e c e s sa r y o r d e s i r a b l e i n

t h e u s u a l b u s i n e s s o r t r a d e o f t h e

em p l o y e r , except where the employmenthas been fixed for a specific project orundertaking the completion or terminationof which has been determined at the timeof engagement of the employee or wherethe work or services to be performed isseasonal in nature and employment is for

the duration of the season.

An employment shall be deemed to becasual if it is not covered by the precedingparagraph. Provided, that, any employeewho has rendered at least one year ofservice, whether such service iscontinuous or broken, shall beconsidered a regular employee withrespect to the activity in which he is

employed and his employment shallcontinue while such activity exists.Under the foregoing provision, a regularemployee is (1) one who is eitherengaged to perform activities that arenecessary or desirable in the usualtrade or business of the employer or(2) a casual employee who hasrendered at least one year of service,whether continuous or broken, withrespect to the activity in which he isemployed.

Under the first criterion, respondent isqualified to be a regular employee. Herwork, consisting mainly of photocopyingdocuments, sorting out telephone bills anddisconnection notices, was certainly"necessary or desirable" to the business ofPLDT. But even if the contrary were true,the uncontested fact is that she rendered

service for more than one year as a casualemployee. Hence, under the secondcriterion, she is still eligible to become aregular employee. Petitioners argumentthat respondents position has beenabolished, if indeed true, does notpreclude Arceos becoming a regularemployee. The order to reinstate her alsoincluded the alternative to reinstate her to"a position equivalent thereto." Thus, PLDT

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can still "regularize" her in an equivalentposition.

Petition is denied.

VIVIAN Y. IMBUIDO v s. NLRC andINTERNATIONAL INFORMATIONSERVICES G.R. No. 114734. March 31,

2000 BUENA

Facts:

Petitioner Vivian Imbuido was employed asa data encoder by private respondentInternational Information Services, Inc., adomestic corporation engaged in thebusiness of data encoding andkeypunching, from August 26, 1988 untilOctober 18, 1991 when her services wereterminated. From August 26, 1988-October 18, 1991, petitioner entered into13 separate employment contracts withprivate respondent, each contract lastingonly for a period of 3 months. Aside fromthe basic hourly rate, specific job contractnumber and period of employment.Petitioner allegedly agreed to the filing of apetition for certification election involvingthe rank-and-file employees of private

respondent. Thus, Lakas Manggagawa saPilipinas filed a petition for certificationelection. Subsequently, petitioner receiveda termination letter from Edna Kasilag,Administrative Officer of privaterespondent, allegedly "due to low volumeof work." Thus, petitioner filed a complaintfor illegal dismissal. Labor Arbiter ruled infavor of petitioner and ordered herreinstatement, which was reversed by

NLRC.

Issue: WON petitioner is a regularemployee.

Ruling:

Petitioner is a project employee. Theprincipal test for determining whetheran employee is a project employee or

a regular employee is whether theproject employee was assigned tocarry out a specific project orundertaking, the duration and scopeof which were specified at the timethe employee was engaged for thatproject. A project employee is onewhose employment has been fixed fora specific project or undertaking, thecompletion or termination of whichhas been determined at the time ofthe engagement of the employee orwhere the work or service to beperformed is seasonal in nature andthe employment is for the duration ofthe season. In the instant case, petitionerwas engaged to perform activities whichwere usually necessary or desirable in theusual business or trade of the employer,petitioner worked as a data encoder forprivate respondent, a corporation engaged

in the business of data encoding andkeypunching, and her employment wasfixed for a specific project or undertakingthe completion or termination of which hadbeen determined at the time of herengagement, as may be observed from theseries of employment contracts betweenpetitioner and private respondent, all ofwhich contained a designation of thespecific job contract and a specific period

of employment.

However, even though petitioner is aproject employee, petitioner has acquiredthe status of a regular employee. In adecided case, it has been held that a

project employee or a member of a workpool may acquire the status of a regularemployee when the following concur: 1)There is a continuous rehiring of project

employees even after [the] cessation of aproject; and 2) The tasks performed bythe alleged "project employee" are vital,necessary and indispensable to the usualbusiness or trade of the employer.

In this case, the evidence on recordreveals that petitioner was employed byprivate respondent as a data encoder,performing activities which are usuallynecessary or desirable in the usualbusiness or trade of her employer,continuously for a period of more than 3years, from August 26, 1988 to October18, 1991 and contracted for a total of 13successive projects. It should be noted,however, that the length of time duringwhich the employee was continuouslyre-hired is not controlling, but merelyserves as a badge of regularemployment. Based on the foregoing,

Petitioner has attained the status of aregular employee of private respondent.Being a regular employee, petitioner isentitled to security of tenure and couldonly be dismissed for a just or authorizedcause.

Petition is granted.

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RADIN C. ALCIRA vs. NLRC andPHILIPPINES CORPORATION G.R. No.149859 June 9, 2004CORONA

Facts:

Respondent Middleby PhilippinesCorporation (Middleby) hired petitioner as

engineering support services supervisor ona probationary basis for six months.Apparently unhappy with petitionersperformance, respondent Middlebyterminated petitioners services. Alciraclaimed that his employment started onMay 20, 1996 while the company allegedthat Alcira was employed on May 27,1996. The documents presented indicatepetitioners employment status as"probationary (6 mos.)" and a remark that"after five months (petitioners)performance shall be evaluated and anyadjustment in salary shall depend on (his)work performance." Petitioner assertsthat, on November 20, 1996, in thepresence of his co-workers andsubordinates, Middleby in bad faithwithheld his time card and did not allowhim to work. Considering this as adismissal "after the lapse of his

probationary employment," petitioner filedon November 21, 1996 a complaintagainst respondent Middleby contendingthat he had already become a regularemployee as of the date he was illegallydismissed. The Labor Arbiter dismissed thecomplaint which was affirmed by NLRC.

Issue: WON petitioner was allowed to workbeyond his probationary period.

Ruling:

Under the law, probationary employmentshall not exceed 6 months from the datethe employee started working, unless it iscovered by an apprenticeship agreementstipulating a longer period. The servicesof an employee who has been

engaged on a probationary basis maybe terminated for a just cause orwhen he fails to qualify as a regularemployee in accordance withreasonable standards made known bythe employer to the employee at thetime of his engagement. An employeewho is allowed to work after aprobationary period shall beconsidered a regular employee.

In the case at bench, the appointmentcontract expressly states that petitionersemployment status was "probationary (6mos.)." The five-month period referred tothe evaluation of his work. Petitionerhowever, insists that he already attainedthe status of a regular employee when hewas dismissed on November 20, 1996because, having started work on May 20,1996, the six-month probationary period

ended on November 16, 1996. As theappointment provided that petitionersstatus was "probationary (6 mos.)"without any specific date of termination,the 180th day fell on November 16, 1996.Thus, when he was dismissed onNovember 20, 1996, he was already aregular employee. Petitioners contentionis incorrect. It has been held that thecomputation of the 6-month probationary

period is reckoned from the date of

appointment up to the same calendar dateof the 6th month following. In short, sincethe number of days in each particularmonth was irrelevant, petitioner was still aprobationary employee when respondentMiddleby opted not to "regularize" him onNovember 20, 1996.

Issue: WON petitioner was illegallydismissed when respondent Middlebyopted not to renew his contract on the lastday of his probationary employment.

Ruling:

It is settled that even if probationaryemployees do not enjoy permanentstatus, they are accorded theconstitutional protection of security oftenure. This means they may only beterminated for just cause or whenthey otherwise fail to qualify asregular employees in accordance withreasonable standards made known tothem by the employer at the time oftheir engagement. However, it has beenheld that this constitutional protectionends on the expiration of the probationary

period. On that date, the parties are free

to either renew or terminate their contractof employment. In the case at hand,Middleby exercised its option not to renewthe contract when it informed petitioner onthe last day of his probationaryemployment that it did not intend to granthim a regular status.

Petition is denied.

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PERPETUAL HELP CREDITCOOPERATIVE v s . BENEDICTOFABURADA, SISINITA VILLAR G.R. No.121948. October 8, 2001 SANDOVAL-GUTIERREZ

Facts:

Private respondents Benedicto Faburada,Sisinita Vilar, Imelda Tamayo and HaroldCatipay filed a complaint against thePerpetual Help Credit Cooperative, Inc.(PHCCI), for illegal dismissal. PetitionerPHCCI filed a motion to dismiss thecomplaint on the ground that there is noemployer-employee relationship betweenthem as private respondents are allmembers and co-owners of thecooperative. Furthermore, privaterespondents have not exhausted theremedies provided in the cooperative by-laws. Labor Arbiter denied petitioner'smotion to dismiss, holding that the case isimpressed with employer-employeerelationship and that the law oncooperatives is subservient to the LaborCode.

Issue: WON private respondents are

regular employees.

Ruling:

Article 280 of the Labor Code provides forthree kinds of employees: (1) regularemployees or those who have beenengaged to perform activities which areusually necessary or desirable in the usualbusiness or trade of the employer; (2)

project employees or those whose

employment has been fixed for a specificproject or undertaking, the completion ortermination of which has been determinedat the time of the engagement of theemployee or where the work or service tobe performed is seasonal in nature and theemployment is for the duration of theseason; and (3) casual employees or those

who are neither regular nor projectemployees. The employees who aredeemed regular are: (a) those whohave been engaged to performactivities which are usually necessaryor desirable in the usual trade orbusiness of the employer; and (b)those casual employees who haverendered at least one (1) year ofservice, whether such service iscontinuous or broken, with respect to

the activity in which they areemployed.

The elements of the ER-EER are present inthis case. PHCCI, through Mr. EdilbertoLantaca, Jr., its Manager, hired privaterespondents to work for it. They workedregularly on regular working hours, wereassigned specific duties, were paid regularwages and made to accomplish daily time

records just like any other regularemployee. They worked under thesupervision of the cooperative manager.But unfortunately, they were dismissed.

Moreover, private respondents wererendering services necessary to the day-to-day operations of petitioner PHCCI.This fact alone qualified them as regularemployees. All of them, except Harold D.

Catipay, worked with petitioner for more

than 1 year. That Benedicto Faburadaworked only on a part-time basis, does notmean that he is not a regular employee.Ones regularity of employment is notdetermined by the number of hoursone works but by the nature and bythe length of time one has been inthat particular job. Consequently,

petitioner's contention that privaterespondents are mere volunteer workers,not regular employees, must necessarilyfail. As regular employees or workers,private respondents are entitled to securityof tenure. Thus, their services may beterminated only for a valid cause, withobservance of due process.

Petition is denied.

ABESCO CONSTRUCTION ANDDEVELOPMENT CORPORATION vs.ALBERTO RAMIREZ G.R. No. 141168April 10, 2006 CORONA

Facts:

Petitioner company was engaged in aconstruction business where respondentswere hired on different dates from 1976 to

1992 either as laborers, road rolleroperators, painters or drivers.Respondents filed complaintsfor illegaldismissal against the company. Petitionersallegedly dismissed them without a validreason and without due process of law.Petitioners denied liability to respondentsand countered that respondents were"project employees" since their serviceswere necessary only when the company

had projects to be completed. Petitioners

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argued that, being project employees,respondents' employment wascoterminous with the project to which theywere assigned. They were not regularemployees who enjoyed security of tenureand entitlement to separation pay upontermination from work. The Labor Arbiterruled that private respondents are regular

employees.

Issue: WON private respondents wereregular employees.

Ruling:

Private respondents were regularemployees. Employees (like respondents)who work under different projectemployment contracts for severalyears do not automatically becomeregular employees; they can remainas project employees regardless ofthe number of years they work.Length of service is not a controllingfactor in determining the nature ofone's employment. Moreover,employees who are members of a"work pool" from which a company(like petitioner corporation) draws

workers for deployment to itsdifferent projects do not becomeregular employees by reason of thatfact alone. It has been held thatmembers of a "work pool" can either beproject employees or regular employees.The principal test for determining whetheremployees are "project employees" or"regular employees" is whether they areassigned to carry out a specific project or

undertaking, the duration and scope of

which are specified at the time they areengaged for that project. Such duration,as well as the particular work/serviceto be performed, is defined in anemployment agreement and is madeclear to the employees at the time ofhiring.

In this case, petitioners did not have thatkind of agreement with respondents.Neither did they inform respondents of thenature of the latter's work at the time ofhiring. Hence, for failure of petitioners tosubstantiate their claim that respondentswere project employees, the SupremeCourt is constrained to declare them asregular employees.

Petition is denied.

B. ManagementPrerogatives

Management prerogative refers tothe right of an employee to regulateall aspects of employment.

a. Scope

1. Right to set Pre-employmentQualifications:

a. Civil Status;b. Height;c. Age;d. Gender/sex;e. Academic background;f. Residence

2. Right to Manage People in General

The free will of management to conductits own affairs to achieve its purposecannot be denied.

Except as limited by special laws, anemployer is free to regulate accordingto his own discretion and judgment, allaspects of employment including, thepower to:

a. Determine the time, place, andmanner of work;b. Determine the tools to be used;c. Lay-off of workers;d. Dismiss erring employees;e. Promote, transfer, or demote an

employee to other positions;f. Rotate an employee from the day

shift to the night shift;g. Prescribe reasonable rules and

regulations necessary or proper for

the conduct of its business;h. Provide certain disciplinary

measures in order to implementprescribed rules;

i. Merge or consolidate the businesswith another;

j. Abolish positions which it deems nolonger necessary;

k. Close the business; andl. Contract out services performed by

employees to outside agencies. Every business enterprise

endeavors to increase its profits. Inthe process it may adopt or devisemeans designed toward that goal.

So long as the managementprerogatives are exercised in good faithfor the advancement of the employersinterest and not for the purpose ofdefeating or circumventing the rights ofthe employees under special laws or

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under valid agreements, suchprerogatives will be upheld.

NOTE: The Court upheld the right of themanagement to prescribe a policyprohibiting an employee from having arelationship with an employee of acompetitor company (Tecson vs. GlaxoWellcome Philippines, GR No. 162994,

September 17, 2004)2. Right to Discipline Employees The employer has the prerogative to

instill discipline in his employees and toimpose reasonable penalties, includingdismissal, on erring employeespursuant to company rules andregulations.

Although the employer has theprerogative to discipline or dismiss itsemployee, such prerogative cannot be

exercised wantonly, but must becontrolled by substantive due processand tempered by the fundamentalpolicy of protection to labor enshrinedin the Constitution.

Infractions committed by an employeeshould merit only the correspondingsanction demanded by thecircumstances. The penalty must becommensurate with the act, conduct

or omission imputed to the employeeand imposed in connection with theemployers disciplinary authority.

3. Right to Transfer Employees It is management prerogative to

transfer or assign an employee fromone office to another within thebusiness establishment, in thepursuance of its legitimate businessinterest provided there is no demotionin rank or diminution of his salary.

An employees right to security oftenure does not give him such vestedright in his position as would deprivethe company of its prerogative tochange his assignment or transfer him.

It is the prerogative of management totransfer an employee where he can bemost useful to the company.

Q. When transfer may constituteconstructive dismissal?A. A transfer amounts to constructivedismissal when the transfer isunreasonable, inconvenient or prejudicialto the employee, and involves a demotionin rank or diminution of salaries, benefitsand other privileges.NOTE: A transfer that results of promotionor demotion, advancement or reduction ora transfer that aims to lure an employee

away from his permanent position cannotbe done without the employees consent. Re-assignment pending investigation

by the management falls within themanagement prerogatives. Thepurpose of re-assignment is nodifferent from that of preventivesuspension which management couldvalidly impose as a disciplinarymeasure for the protection of the

companys property pendinginvestigation of any allegedmisfeasance or malfeasance committedby an employee.

4. Right to Demote It is management prerogative to

transfer, demote, and even dismiss anemployee to protect its business,provided it is not tainted with unfairlabor practices.

Management is at liberty, absent anymalice on its part, to abolish positionswhich it deems no longer necessary.

Abolition of position due to companyreorganization or merger is amanagement prerogative and will beupheld provided the same isundertaken without any malice on the

part of the management. The company has the prerogative to

adopt a redundancy/retrenchmentprogram to minimize if not, to avertlosses in the conduct of its operations.

Promotion of employees is amanagement prerogative.

5. Right to Dismiss The right of the company to dismiss its

employee is a measure of self-protection. An employer cannot legally

be compelled to continue with theemployment of a person whoadmittedly was guilty of malfeasancetowards his employer, and whosecontinuance in the service of the latteris patently inimical to its interest.

NOTE:a. Services Performed by

Personnel- with respect to thedetermination of whether services should

be performed by its personnel orcontracted to outside agencies, thecontracting out should be motivated bygood faith and must not have beenresorted to circumvent the law or mustnot have been the result of malicious orarbitrary action.

b. Closing of Business- with respectto the closing of business, although theemployer may close or cease hisbusiness operations or undertaking even

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if he is not suffering from seriousbusiness losses or financial reverses, thesame may be undertaken as long as hepays his employees their termination payin the amount corresponding to theirlength of service.

CASES:

ANGELITO P. DELES, JR v s . NLRC andFIRST PHIL. INDUSTRIAL CORP. G.R.No. 121348. March 9, 2000QUISUMBING

Facts:

Respondent company operates a pipelinesystem which transports petroleumproducts from the refineries by Caltex andShell in Batangas to terminal receivingfacilities in Metro Manila. Petitioner wasemployed by the company as shiftsupervisor. He was assigned at its jointterminal facility in Pandacan, Manila,where he was the highest ranking officerat the terminal during his shift. Hisprimary task was to oversee the entirepipeline operation in the terminal.Admittedly, he was a member of the

management team. On the night of March19, 1993, petitioner was the shiftsupervisor on duty while Eduardo Yumuland Leonardo Espejon were the assignedshift operator and gauger, respectively.During this shift, there was a scheduleddelivery for Shell through respondentcompanys pipeline of about 3,000 barrelsof kerosene (KE) to be followed by adelivery of aviation turbine fuel (AV).

Forthwith, petitioner instructed his chief

operator (Yumul) to effect a batch changefrom the kerosene tank to the aviation fueltank when the joint terminal facilityturbine meter registers 2,944 barrels ofkerosene delivered. Apparently, Yumulfailed to execute correctly petitionersorder. Instead of effecting the batchchange at the prescribed reading of 2,944

barrels, Yumul caused the batch changewhen the reading already reached 3,341barrels. Thus, about 397 barrels of thesucceeding batch of aviation turbine fuelwent to the kerosene batch therebydowngrading the former. When informedof the incident, the company requiredpetitioner to explain why he should not becharged administratively for neglect ofduty. Petitioner was placed underpreventive suspension pending the

outcome of the investigation. Thecompany conducted a joint formalinvestigation and found petitioner, Yumuland Espejon guilty as charged.Accordingly, private respondent FlavianoSantos, respondent companys assistantvice president, informed petitioner that hewas found to have violated the section onNeglect of Duty of respondent companysCode of Discipline and for this violation he

was meted the penalty of 3 monthssuspension. For their part, Yumul wasmeted the penalty of dismissal whileEspejon was suspended for one and a halfmonths. Petitioner filed a complaintbefore the NLRC, questioning the legalityof his suspension.

Issue: WON petitioner was illegallydismissed.

Ruling:

regarding the legality of petitionerssuspension, petitioner was found remiss inhis duties in connection with the wrongbatch change operation on March 19,1993. He contends though that hissuspension for three months is too harsh,

whimsical and biased. In essence, hedecries the penalty imposed on him whichhe considered too severe.

However, petitioner loses sight of the factthat the right of an employer to regulateall aspects of employment is well settled.This right, aptly called managementprerogative, gives employers thefreedom to regulate, according totheir discretion and best judgment, allaspects of employment, includingwork assignment, working methods,processes to be followed, workingregulations, transfer of employees,work supervision, lay-off of workersand the discipline, dismissal and recallof workers. In general, managementhas the prerogative to discipline itsemployees and to impose appropriatepenalties on erring workers pursuant

to company rules and regulations.Thus, petitioners protestation unfounded.For, based on the record, the companyimposed said penalty pursuant to theCompany Code of Discipline which thelabor agencies find to be fair and inaccordance with law. In fact, the penaltyfor violating the provision on Neglect ofDuty ranges from warning to dismissaldepending on the gravity of the offense.

Respondent company explained that

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mishandling the delivery of highlyflammable petroleum products could resultin enormous damage to properties andloss of lives at the terminal andsurrounding areas. Hence, it has toexercise extraordinary diligence inconducting its operations in view of thedelicate nature of its business. Considering

the attendant circumstances, we areconstrained to agree that the penalty ofsuspension first imposed on petitioner isreasonable and appropriate as well aslegally unassailable.

Petition is denied.

FLOREN HOTEL vs. NLRC andRODERICK A. CALIMLIM G.R. No.155264 May 6, 2005 QUISUMBING

Facts:

At the time of their termination, privaterespondents Roderick A. Calimlim andRonald Rico were working in the hotel asroom boys and Lito F. Bautista as frontdesk man. Petitioner Dely Lim randomlyinspected the hotel rooms to check if theyhad been properly cleaned. When she

entered Room 301, she found Lito Bautistasleeping half-naked with the air-conditioning on. Lim immediately calledthe attention of the hotels actingsupervisor, Diosdado Aquino, who hadsupervision over Bautista. Lim admonishedAquino for not supervising Bautista moreclosely, considering that it was Bautistasthird offense of the same nature. Whenshe entered Room 303, she saw private

respondents Calimlim and Rico drinking

beer, with four bottles in front of them.They had taken these bottles of beer fromthe hotels coffee shop. Like Bautista, theyhad switched on the air conditioning inRoom 303. Dely Lim prepared amemorandum for Bautista. In thepresence of Acting Supervisor Aquino aswell as the other workers, Lim tried to give

Bautista a copy of the memorandum butBautista refused to receive it. Bautistathen went on absence without leave.Calimlim and Rico, embarrassed by theincident, went home. When they returnedto work the next day, they were servedwith a notice of suspension for one week.Like Bautista, they refused to receive thenotice of suspension, but opted to servethe penalty. Upon their return on June 15,1998, they saw a memorandum on the

bulletin board announcing the suspensionas room boys of Calimlim and Rico, oralternately returning to work on probationas janitors. The memorandum alsoincluded Calimlim and Ricos new workschedule. Calimlim and Rico submittedhandwritten apologies and pleaded foranother chance, before they went AWOL(absent without leave). Calimlim, Rico andBautista filed separate complaints, for

illegal dismissal and money claims, beforethe Labor Arbiter. Calimlim and Ricoclaimed they were constructivelydismissed, while Bautista claimed thatDely Lim orally told him not to go back towork because he was already dismissed.Labor Arbiter dismissed the complaints butordered petitioners to pay privaterespondents their proportionate 13th

month pay, and SIL pay. He likewiseordered petitioners to pay Calimlim and

Rico indemnity. NLRC reversed LaborArbiter and ordered the hotel managementto immediately reinstate privaterespondents to their former positionswithout loss of seniority rights, with fullbackwages and other benefits until theyare actually reinstated. CA ruled thatpetitioners had constructively dismissed

private respondents Calimlim and Rico,hence the petitioners are liable to theprivate respondents for their proportionate13th month pay, SIL pay, and indemnity.

Issue: WON private respondents Calimlimand Rico were constructively dismissed.

Ruling:

For the transfer of the employee to beconsidered a valid exercise ofmanagement prerogatives, theemployer must show that the transferis not unreasonable, inconvenient orprejudicial to the employee; neitherwould it involve a demotion in rank ora diminution of his salaries, privilegesand other benefits. Should theemployer fail to discharge this burdenof proof, the employees transfer shall

be tantamount to constructivedismissal, which has been defined asa quitting because continuedemployment is rendered impossible,unreasonable or unlikely, as in anoffer involving a demotion in rank anddiminution in pay.

In the case at bench, Calimlim and Ricowere being forced to accept alternate work

periods in their new jobs as janitors,

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otherwise they would be unemployed. Notonly did their new schedule entail adiminution of wages, because they wouldonly be allowed to work every other week,the new schedule was also clearly for anundefined period. The memorandum didnot state how long the schedule was to beeffective. Indeed, it appears that the

period could continue for as long asmanagement desired it. Theseunreasonable new terms of employmentwere imposed in the memorandum, whichwas issued two days before Calimlim andRico returned from their week-longsuspension. They were imposed for allegedpast infractions for which neither Calimlimnor Rico was given the chance to beheard. Under the circumstances, theSupreme Court fail to see how the

temporary transfer of Calimlim and Ricocould be a valid exercise of managementprerogatives. Even the employers right todemote an employee requires theobservance of the twin-noticerequirement.

CA is modified.

LOPEZ SUGAR CORPORATION vs.

LEONITO G. FRANCO G.R. No. 148195May 16, 2005 CALLEJO

Facts:

Private respondents Leonito G. Franco et.alwere supervisory employees of the LopezSugar Corporation. Franco was hired bythe Corporation as Shift Supervisor in theSugar Storage Department. On the other

hand, Perrin and Candelario were

employed as Planter ServiceRepresentatives (PSRs), who rose from theranks and, by 1994, occupied supervisorypositions in the Corporations CaneMarketing Section. By 1994, thesupervisory employees of the Corporation,spearheaded by Franco et.al. decided toform a labor union called Lopez Sugar

Corporation Supervisors Association.DOLE issued a Certificate of Registration tothe union. During its organizationalmeeting, Franco was elected president andPabalan as treasurer. The officers of theunion and the management held ameeting, which led to the submission ofthe unions proposals for a CBA. TheCorporations president issued aMemorandum to the vice-president anddepartment heads for the adoption of a

special retirement program for supervisoryand middle level managers. Heemphasized that the management shallhave the final say on who would becovered, and that the program would beirrevocable once approved. Perrin andCandelario were on leave when they wereinvited by Juan Masa, Jr., the head of theCane Marketing Section. The latterinformed them that they were all included

in the special retirement program andwould receive their respective notices ofdismissal shortly. Franco et.al. receivedcopies of the Memorandum from theCorporations Vice-President forAdministration and Finance, informingthem that they were included in the"special retirement program" forsupervisors and middle level managers;hence, their employment with theCorporation was to be terminated effective

and they would be paid their salaries.Thereafter, the private respondents filedseparate complaints against thecorporation with the NLRC for illegaldismissal, ULP, reinstatement anddamages. NLRC ruled in favor of privaterespondents which was affirmed by CA.

Issue: WON private respondents wereillegally dismissed.

Ruling:

In a decided case, it has been held that itis imperative for the employer to have fairand reasonable criteria in implementing itsredundancy program, such as but notlimited to (a) preferred status; (b)efficiency; and (c) seniority. The generalrule is that the characterization by anemployer of an employees services asno longer necessary or sustainable isan exercise of business judgment onthe part of the employer. The wisdomor soundness of such characterizationor decision is not, as a general rule,subject to discretionary review on thepart of the Labor Arbiter, the NLRCand the CA. Such characterization

may, however, be rejected if the sameis found to be in violation of the law oris arbitrary or malicious. It is settledthat the hiring, firing or demotion ofemployees is a managementprerogative, but is subject tolimitations stated in the collectivebargaining agreement, if any, orgeneral principles of fair play and

justice. Indeed, the Supreme Court

will not hesitate to strike down a

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redundancy program structured by acorporation to downsize its personnel,solely for the purpose of weakeningthe union leadership, therebypreventing it from securingreasonable terms and conditions ofemployment in their CBA with theemployer.

In the case at bench, petitioner illegallydismissed the private respondents fromtheir employment by including them in itsspecial retirement program, thus,debilitating the union, rendering it pliantby decapacitating its leadership. As such,the so-called "downsizing" of the CaneMarketing Department and SMSD based onthe SGV Study Report was a farcecapricious and arbitrary. Foremost, the

petitioner failed to formulate fair andreasonable criteria in ascertaining whatpositions were declared redundant andaccordingly obsolete, such as preferredstatus, efficiency or seniority. It, likewise,failed to formulate fair and reasonableparameters to determine who among thesupervisors and middle-level managersshould be "retired" for redundancy. Usingthe SGV report as anchor, the petitioner

came out with a special retirementprogram for its 108 supervisors andmiddle-level managers, making it clearthat its decision to eliminate them wasfinal and irrevocable. Moreover, theprivate respondents were not properlyapprised of the existence of the specialretirement program, as well as the criteriafor the selection of the supervisors to be"retired," and those to be retained ortransferred or demoted. Petitioner

downsized the Cane Marketing Departmentby eliminating private respondents Perrinand Candelario; and Franco and Candelariofrom the Sugar and Molasses StorageDepartment, respectively, without dueregard to the SGV report. The downsizingof personnel was not among the foregoingrecommendations, and yet this was what

the petitioner did, through its specialretirement program, by including privaterespondents Franco and Pabalan, therebyterminating their employment. It is toomuch of a coincidence that the two privaterespondents were active members of theunion.

Petition is denied.

C. TERMINATION OFEMPLOYMENT

a. Security of Tenure

Security of Tenure- the Constitutionalright granted to the employee that theemployer shall not terminate theservices of an employee except for justcause or when authorized cause.

Nature of the Right to Security ofTenure and the Right to terminateemployment: Termination of employment is not

anymore a mere cessation orseverance of contractualrelationship but an economicphenomenon affecting members ofthe family. This explains why underthe broad principles of social justicethe dismissal of employee is

adequately protected by the laws ofthe State.

However, the workers right tosecurity of tenure is not an absoluteright for the law provides that hemay be dismissed for cause. Thelaw in protecting the rights of thelabor authorizes neither oppression

nor self-destruction of the capital. Substantive Due Process ofDismissal- an employee cannot bedismissed except for just or authorizedcause of dismissal.

Procedural Due Process- the processof termination that should be observedby the employer such as the twin-notice and hearing requirement and the30-day notice requirement.

b. Causes of Termination byEmployer (Substantive DueProcess of Dismissal)

b.i. JUST CAUSES1. Serious Misconduct or willfuldisobedience by the employee of thelawful orders of his employer orrepresentative in connection with his work:

1.a. Serious Misconduct

Misconduct- transgression of someestablished and definite rule of action,a forbidden act, a dereliction of duty,willful in character, and implieswrongful intent and not mere error in

judgment. Requisites:

1. misconduct must be serious;2. must relate to the performance of

the employees duties; and

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3. must show that the employee hasbecome unfit to continue working forthe employer.

Examples:1. challenging a superior officer to a

fight;2. use of insulting and offensive

language towards superiors;

3. drinking liquor on company time incompany premises;4. sexual intercourse on company time

and in company premises;5. falsification of time cards;6. drunkenness and disorderly or

violent behavior;7. using the employers property,

equipment and personnel in thepersonal business of the employee;

8. sexual harassment (the managers

act of fondling the hands,massaging the shoulder andcaressing the nape of thesecretary).1.b. Requisites of WillfulDisobedience of Lawful Orders

1. The employees assailed conductmust have been willful orintentional, the willfulness is beingcharacterized by a wrongful and

perverse attitude;2. Order violated must be reasonable

and lawful and made known to theemployee and must pertain to theduties which he had been engagedto discharge.

Examples:1. using company vehicles for private

purpose without authority frommanagement;

2. refusal to report in the workers newwork assignment in defiance ofmanagement prerogative;

3. driving without a valid driverslicense in violation of the companyrules and regulations.

2. Gross and habitual neglect by the

employee of his duties; Gross negligence- the want orabsence of even slight care or diligenceas to amount to a reckless disregard ofthe safety of person or property. Itevinces a thoughtless disregard ofconsequences without exerting anyeffort to avoid them.

Habitual neglect- implies repeatedfailure to perform ones duties for aperiod of time, depending upon the

circumstances. In order to constitute a just cause for

the employees dismissal, the neglectof duties must not only be grossbut also habitual. Thus, the single orisolated act of negligence does notconstitute a just cause for the dismissalof the employee.

Examples:1. Unjustified absences;

2. habitual absenteeism;3. abandonment of work

NOTE: To constitute abandonment ofwork, two elements must concur:

1. The failure to report for work orabsence without valid or justifiablereason; and

2. a clear intention to sever theemployer-employee relationship.

The second element is the moredeterminative factor and beingmanifested by some overt acts.

Abandoning ones job means thedeliberate, unjustified refusal of theemployee to resume his employmentand the burden of proof is on theemployer to show a clear and

deliberate intent on the part of theemployee to discontinue employment.

3. Fraud of willful breach by the employeeof the trust reposed in him by hisemployer or duly authorizedrepresentative; The lost of trust and confidence

must be based on the willful breachof the trust reposed in the employeeby his employer. Ordinary breach will

not suffice. A breach of trust is willful if it is done

intentionally, knowingly and purposely,without justifiable excuse, asdistinguished from an act donecarelessly, thoughtlessly, heedlessly orinadvertently.

Loss of confidence, as a just causefor termination of employment, ispremised on the fact that the

employee concerned holds aposition of responsibility, trust andconfidence. He must be invested withconfidence on delicate matters such asthe custody, handling, care andprotection of the employers propertyand/or funds.

Loss of Confidence (Guidelines)1. not simulated;2. should not be used as a subterfuge

for causes which are improper;

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3. may not be arbitrarily asserted inthe face of overwhelming evidenceto the contrary;

4. must be genuine;5. must be substantial

Examples:1. theft of company property;2. forgery or falsification of voucher

4. Commission of a crime or offense bythe employee against the person of hisemployer or any immediate member of hisfamily or his duly authorizedrepresentative;NOTE: Conviction or prosecution is notrequired.

5. Other causes analogous to theforegoing causes.

Examples:1. unreasonable behavior and

unpleasant deportment in dealingwith co-workers;

2. failure to meet assigned salesquota;

3. gross inefficiency;4. violation of the companys code of

conduct or company rules andregulations

Doctrine of Incompatibility- Uponemployment, an employee is expectedto behave in such a manner that wouldensure the efficient and orderlyoperation of the employers business.Where the employee has donesomething that is contrary orincompatible to the performance of hisduties, his employer has just cause forterminating his employment.

Substantial proof and NOT clear andconvincing evidence or proof beyondreasonable doubt is sufficient as basisfor the imposition of any disciplinaryaction upon the employee.

CASES:

IMELDA B. DAMASCO v s . NLRC andMANILA GLASS SUPPLY G.R. No.115755. Dec. 4, 2000 Quisimbing

Facts:

Ms. Imelda Damasco was a regular salesclerk in Manila Glass Supply in OlongapoCity. Manila Glass Supply is a soleproprietorship engaged in the sale of glasswith main store in Olongapo City andbranch in Metro Manila. Bonifacio K. Sia isprivate respondent is the owner of ManilaGlass Supply. Damasco was employed byManila Glass Supply and Bonifacio K. Siaas Sales Clerk, receiving lately a dailywage of P140.00. As sales clerk, she wasordered to do almost all the works relatedto the glass business of respondentsincluding the cutting, sales and delivery ofglass as well as balancing, accounting and

checking of capital and profits every end ofthe month. On August 28, 1992, while shewas working, Bonifacio Sia called her upand told her to finish all her works thatnight, but she told respondent that shewould not be able to finish them allbecause it was already late; that she thenleft respondents room but respondentcalled her again and asked her why shecould not finish what she was told to do, towhich Damasco answered that it was

already late and there were still a lot ofthings to do. Sia asked Damasco why shewas not teaching her 2 other co-workerson what to do, and she answered shewould not do it anymore because if theother co-workers should commit mistakesin accounting, she was the first one to belambasted by respondent and even

required to share in paying the shortages.Sia ordered Damasco to go out of theroom and told her that he does not wantto see her face anymore. Sia, on the otherhand, alleged that Damasco was instructedto report for work in their store in MetroManila as there is a necessity for her detailthereat for reasons that the employeesthere are new. Damasco objected forreasons that her husband is working inOlongapo City and she does not want to

work in Manila and thereafter, Damascodid not report for work in the respondentsstore in Olongapo City. Sia received a copyof complaint for illegal dismisssal filed byDamasco. Immediately, Sia sent a letter tocomplainant directing her to report forwork which was ignored by Damasco. TheLabor Arbiter ruled in favor of Damascowhich was modified by NLRC.

Issue: WON Damasco was illegallydismissed.

Ruling:

To constitute abandonment, twoelements must concur: (1) the failureto report for work or absence withoutvalid or justifiable reason, and (2) aclear intention to sever the employer-employee relationship, with the

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second element as the moredeterminative factor when manifestedby some overt acts. Abandoning ones

job means the deliberate, unjustifiedrefusal of the employee to resume hisemployment and the burden of proofis on the employer to show a clear anddeliberate intent on the part of the

employee to discontinue employment.

In the case at bench, there are no overtacts established by Sia from which we caninfer the clear intention of Damasco todesist from employment. Sias letters forDamasco to report for work deserve scantconsideration. Note that those orders weremade four months after Damasco was toldnot to show herself again in the store, andafter Sia had received a copy of Damascos

complaint for illegal dismissal. It is indeedhighly incredible for an employer torequire his employee without an approvedleave to report to work only after fourmonths of absence. If at all, the charge ofabandonment is disingenuous to say theleast. Moreover, it was unlikely thatDamasco had abandoned her job for noreason at all considering the hardship ofthe times. In addition, if Damasco had

truly forsaken her job, she would not havebothered to file a complaint for illegaldismissal against her employer and prayedfor reinstatement. An employee whoforthwith took steps to protect her layoffcould not by any logic be said to haveabandoned her work.

As regards Sias allegation that Damascocommitted serious misconduct or willfuldisobedience of lawful order in connection

with her work, the same is not tenable.Even if Sia directed her to be assigned athis store in Metro Manila, her act ofrefusing to be detailed in Metro Manilacould hardly be characterized a willful orintentional disobedience of her employersorder. It was Sias order that appears to uswhimsical if not vindictive. Reassignment

to Metro Manila is prejudicial to Ms.Damasco, as she and her family areresiding in Olongapo City. This wouldentail separation from her family andadditional expenses on her part fortransportation and food. Damascosreassignment order was unreasonable,considering the attendant circumstances.

Petition is granted.

ST. MICHAEL'S INSTITUTE vs.CARMELITA A. SANTOS G.R. No.145280 December 4, 2001 DE LEON

Facts:

Petitioner St. Michael's Institute is aninstitute of learning. Carmelita Santoset.al. were regular classroom teachers.Respondent Santos began teaching at St.

Michael's Institute in 1979 whilerespondents Magcamit and Rosarda joinedits school faculty only in 1990. Theirservice with the school was abruptlyinterrupted when each of them was serveda notice of termination of employment on1993. The termination allegedly stemmedfrom an incident that occurred on August10, 1993. On said date, a public rally washeld at the town plaza of Bacoor, Cavite in

the vicinity of petitioner school. The rally,

organized and participated in by facultymembers, parents and some students ofpetitioner school, was, among others,aimed at calling the attention of the schooladministration to certain grievancesrelative to substandard school facilities andthe economic demands of teachers andother employees of St. Michael's Institute.

Blanco, as school principal, sent each ofthe respondents identical memorandarequiring them to explain their acts ofleading the aforementioned rally ofstudents outside the school premises;preventing students from attendingclasses; and denouncing the schoolauthority in their speeches. Respondentsdenied all the accusations attributed tothem, and explained that they were invitedby the core group of parents and merely

joined them in expressing theirsentiments. After investigation, theInvestigating Committee foundrespondents to have led and activelyparticipated in the said rally andconsequently recommended theirtermination from service. Respondentswere sent letters informing them of theirtermination from the service "for seriousdisrespect" to their superior, petitioner Fr.

Victorino, and for "serious misconduct thatresulted in the disruption of classes." Inthe illegal dismissal case, the Labor Arbiterdeclared that there was just cause for thedismissal of the respondents' complaintssince they were guilty of dereliction ofduty, which was reversed by NLRC.

Issue: WON private respondents wereillegally dismissed.

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Ruling:

In termination of employment disputesthat the burden of proof is always on theemployer to prove that the dismissal wasfor a just and valid cause. Evidence mustbe clear, convincing and free from anyinference that the prerogative to dismiss

an employee was abused and unjustlyused by the employer to further anyvindictive end.

Misconduct is the transgression of someestablished and definite rule of action, aforbidden act, a dereliction of duty, willfulin character, and implies wrongful intentand not mere error of judgment. As a justcause for termination, the misconductmust be serious, which implies that it

must be of such grave and aggravatedcharacter and not merely trivial orunimportant. On the other hand,disobedience, as a just cause fortermination, must be willful orintentional. Willfulness is characterizedby a wrongful and perverse mentalattitude rendering the employee's actinconsistent with proper subordination.Not every case of insubordination or

willful disobedience by an employee ofa lawful work-connected order of theemployer is reasonably penalized withdismissal. There must be reasonableproportionality between, on the onehand, the willful disobedience by theemployee and, on the other hand, thepenalty imposed therefor. In the caseat bench, evidence is wanting on thedepravity of conduct, and willfulness of thedisobedience on the part of the

respondents. Absence of one day of workto join a public rally cannot be of suchgreat dimension as to equate it with anoffense punishable with the penalty ofdismissal. The reinstatement of therespondents is, thus, just and proper.

Petition is denied.

PHILIPPINE AEOLUS AUTOMOTIVEUNITED C CORP v s . NLRC andROSALINDA. CORTEZ G.R. No. 124617.April 28, 2000 BELLOSILLO

Facts:

Petitioner Philippine Aeolus AutomotiveUnited Corporation (PAAUC) is a domesticcorporation, petitioner Francis Chua is itsPresident while private respondentRosalinda C. Cortez was a company nurseof petitioner corporation until hertermination. A memorandum was issuedby Ms. Myrna Palomares, PersonnelManager of petitioner corporation,addressed to private respondent Cortezrequiring her to explain within 48 hourswhy no disciplinary action should be takenagainst her (a) for throwing a stapler at

Plant Manager William Chua, her superior,and uttering invectives against him; (b)for losing the amount of P1,488.00entrusted to her by Plant Manager Chua tobe given to Mr. Fang of the CLMCDepartment; and, (c) for asking a co-employee to punch-in her time card thusmaking it appear that she was in the officein the morning of 6 September 1994 whenin fact she was not. The memorandum

however was refused by private

respondent although it was read to herand discussed with her by a co-employee.She did not also submit the requiredexplanation, so that while her case waspending investigation the company placedher under preventive suspension for 30days. While Cortez was still underpreventive suspension, another

memorandum was issued by petitionergiving her 72 hours to explain why nodisciplinary action should be taken againsther for allegedly failing to process the ATMapplications of her 9 co-employees withthe Allied Banking Corporation. Thememorandum was also refused to receiveby private respondent. A thirdmemorandum was issued to privaterespondent, this time informing her of hertermination from the service on grounds of

gross and habitual neglect of duties,serious misconduct and fraud or willfulbreach of trust. Labor Arbiter rendered adecision holding the termination of Cortezas valid and legal, which was reversed byNLRC.

Issue: WON private respondent wasillegally dismissed.

Ruling:

The Labor Code provides specificgrounds by which an employer mayvalidly terminate the services of anemployee, which grounds should bestrictly construed since a personsemployment constitutes "property"under the context of due process oflaw and, as such, the burden ofproving that there exists a valid

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ground for termination of employmentrests upon the employer. Likewise, inlight of the employee's right tosecurity of tenure, where a penaltyless punitive than dismissal willsuffice, whatever missteps may havebeen committed by labor ought not tobe visited with a consequence so

severe.

The Supreme Court, in a litany of decisionson serious misconduct warrantingdismissal of an employee, has ruled thatfor misconduct or improper behavior to bea just cause for dismissal (a) it must beserious; (b) must relate to the

performance of the employees duties;and, (c) must show that the employee hasbecome unfit to continue working for the

employer. In the case at bench, the act ofprivate respondent in throwing a staplerand uttering abusive language upon theperson of the plant manager may beconsidered, from a lay man's perspective,as a serious misconduct. However, inorder to consider it a seriousmisconduct that would justifydismissal under the law, it must havebeen done in relation to the

performance of her duties as wouldshow her to be unfit to continueworking for her employer. The actscomplained of, under the circumstancesthey were done, did not in any way pertainto her duties as a nurse. Her employmentidentification card discloses the nature ofher employment as a nurse and no other.Also, the memorandum informing her thatshe was being preventively suspendedpending investigation of her case was

addressed to her as a nurse. Likewise, theact of private respondent in asking a co-employee to punch-in her time card,although a violation of company rules,likewise does not constitute seriousmisconduct.

On alleged failure to process the ATM

applications of her 9 co-employees withthe Allied Banking Corporation, the truth isthat the money entrusted to privaterespondent was in fact deposited in therespective accounts of the employeesconcerned, although belatedly. Grossnegligence implies a want or absence of orfailure to exercise slight care or diligence,or the entire absence of care. It evinces athoughtless disregard of consequenceswithout exerting any effort to avoid them.

The negligence, to warrant removal fromservice, should not merely be gross butalso habitual. Likewise, the ground "willfulbreach by the employee of the trustreposed in him by his employer" must befounded on facts established by theemployer who must clearly andconvincingly prove by substantial evidencethe facts and incidents upon which loss ofconfidence in the employee may fairly be

made to rest. All these requirementsprescribed by law and jurisprudence arewanting in the case at bar.

NLRC is affirmed.

SANTIAGO ALCANTARA v s . CA andTHE PENINSULA MANILA G.R. No.143397. August 6, 2002 KAPUNAN

Facts:

Petitioner Santiago Alcantara, Jr., anemployee of respondent The PeninsulaManila. At the time of his dismissal,petitioner worked as Commis II of theFood and Beverage Department of thePeninsula. He was also a Director of theNational Union of Workers in HotelsRestaurants. The controversy stems from

a Memorandum issued by respondentHotel prohibiting the union from using theunion office from midnight until 6:00 inthe morning. The union office was locatedin the hotel premises. On severaloccasions, petitioner and his companionswere seen inside the union office frommidnight until morning. The Hotel sent amemorandum to petitioner directing himto submit his written explanation within 24hours from receipt thereof. Petitioner

explained that the Memorandumprohibiting the use of the union office wasinconsistent with the CBA and wasnecessarily ineffective. Petitioner arguedthat inasmuch as the Hotel operated 24hours a day, the union office should beavailable whenever the union found itnecessary. This was how the CBA hadalways been applied. Petitioner alsopointed out that the charge against him

did not pertain to his duties in the Hotel.He claimed he used the union office onlyduring his breaks or when he was off duty.The Hotel sent petitioner a Notice ofTermination for alleged willful and blatantrefusal to comply with a lawful and validissued by his employer. CA found thatpetitioner was legally dismissed on theground of willful disobedience.

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Issue: WON petitioner was illegallydismissed.

Ruling:

Willful disobedience of the employerslawful orders, as a just cause for thedismissal of an employee, envisages

the concurrence of at least tworequisites: (1) the employeesassailed conduct must have beenwillful or intentional, the willfulnessbeing characterized by a wrongfuland perverse attitude; and (2) theorder violated must have beenreasonable, lawful, made known tothe employee and must pertain to theduties which he had been engaged todischarge.

Company policies and regulations are,unless shown to be grossly oppressive orcontrary to law, generally binding andvalid on the parties and must be compliedwith until finally revised or amendedunilaterally or preferably throughnegotiation or by competent authority. Itwould be dangerous doctrine indeed toallow employees to refuse to comply with

rules and regulations, policies andprocedures laid down by their employer bythe simple expedient of formallychallenging their reasonableness or themotives which inspired them, or to givethe employees the power to suspendcompliance with company rules or policiesby requesting that they be first subject ofcollective bargaining. It would be wellnigh impossible under these circumstances

for any employer to maintain discipline inits establishment.

In the case at bench, the subjectMemorandum is not grossly oppressive. Itis not patently contrary to law. Whilepetitioner argues that its application wasdiscriminatory the two employees found

with him in the union room were not at allsubjected to disciplinary action theMemorandum was not discriminatory on itsface. Petitioners violation of hisemployers order, prior to its revocation,was therefore inexcusable. Nevertheless,petitioners behavior did not constitute the

wrongful and perverse attitude thatwould sanction his dismissal. Thesurrounding circumstances indicate thatpetitioner was motivated by a his honest

belief that the Memorandum was indeedunlawful and unreasonable. Previouspractice allowed the use of the union office24 hours a day. Viewed in this light,petitioners attitude can hardly becharacterized as wrongful andperverse. While these circumstances donot justify his violation of the regulation,they do not justify his dismissal either.

Petition is granted.

PHILIPPINE NATIONALCONSTRUCTION CORP vs. ROLANDOMATIAS G.R. No. 156283 May 6, 2005PANGANIBAN

Facts:

Rolando Matias was employed by

Construction and Development Corp as

Chief Accountant and AdministrativeOfficer. During his employment with thecompany, various parcels of land situatedat Don Carlos Bukidnon were placed in thenames of certain employees as trustees forthe purpose of owning vast tracts of landmore than the limit a corporation can ownwhich were primarily intended for CDCPagricultural businesses. By internalarrangement documents transferring backthe properties to the corporation wereexecuted. A land was registered in thename of Matias covered by OCT. In 1984,the loans of CDCP from variousgovernment entities were converted toequity thus making it a GOCC and thename of CDCP was changed to PhilippineNational Construction Corporation (PNCC).Under a new set up, PNCC offered a

retrenchment program and Matias availedof the said program. In July 1992, twoformer CDCP employees, namely ReynaldoTac-an and Luciano Tadena went to thehouse of Matias and brought with themduly accomplished documents and SPA forhis signature and informed him that thelands in Bukidnon under his name with allthe others were invaded by squatters, andthat the said land were covered by CARP

where Matias name was included in thelist of landowners. Matias reluctantlysigned the document and after six months,he signed an acknowledgment receipt ofP100,000.00. The Register of Deedscancelled the OCT originally registered inthe name of Matias and issued a new TCTin the name of the Republic of thePhilippines. Matias was rehired by PNCC asProject Controller in Zambales PMMAProject. Later, Matias was dismissed by

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PNCC on the ground of lost of trust andconfidence. Petitioner alleges thatrespondent fraudulently breached its trustand confidence when, without itsknowledge and consent, he disposed of theBukidnon property; though actuallybelonging to petitioner, that property hadpurportedly been merely placed in trustunder his name. Thereafter, he assignedthe same property to petitioner, allegedlydespite his full knowledge that the titlehad already been transferred -- with hisactive planning and participation -- to theRepublic of the Philippines.

Issue: WON private respondent wasillegally dismissed.

Ruling:

It is a basic principle that in terminationcases that the employer bears the burdenof proving that the dismissal of theemployee is for a just or an authorizedcause. Failure to dispose of the burdenwould imply that the dismissal is notlawful, and that the employee is entitled toreinstatement, back wages and accruingbenefits. Moreover, dismissed employees

are not required to prove their innocenceof the employers accusations againstthem. Under Article 282 of the Labor Code,loss of confidence must be based on "fraudor willful breach by the employee of thetrust reposed in him by his employer orduly authorized representative." Ordinarybreach does not suffice. A breach of trustis willful if it is done intentionally andknowingly without any justifiable excuse,

as distinguished from an act donecarelessly, thoughtlessly or inadvertently.

In the present case, petitioner invokes lossof trust and confidence as the ground fordismissing respondent. The allegations ofpetitioner are unsupported by substantialevidence or by established facts. It was

more than 7 years after respondent hadbeen separated from the employ ofpetitioner when two of his former co-employees at CDCP (petitionerspredecessor) -- Reynaldo Tac-an andLuciano Tadena -- went to see him at hishome in Quezon City, carryingaccomplished documents and a SPA. Theyinformed him that the pieces of land inBukidnon, including that which had beenplaced by petitioner in his name, were

covered by CARP; and that he thereforehad to sign the documents. Relying ontheir representations, he did as he hadbeen told. Petitioner has not at any timedenied or repudiated the acts of Tac-anand Tadena. Thus, private respondentcannot be faulted for presuming that bothemployees were acting on its behalf.

Furthermore, loss of confidence as a

just cause for termination ofemployment is premised on the factthat the employee concerned holds aposition of responsibility, trust andconfidence. In order to constitute a

just cause for dismissal, the actcomplained of must be so related tothe performance of the duties of thedismissed employee as would showthat he or she is unfit to continueworking for the employer. Undeniably,

the position of project controller -- theposition of respondent at the time of hisdismissal -- required trust and confidence,for it related to the handling of businessexpenditures or finances. However, his actallegedly constituting breach of trust andconfidence was not in any way related tohis official functions and responsibilities ascontroller. In fact, the questioned actpertained to an unlawful schemedeliberately engaged in by petitioner inorder to evade a constitutional and legalmandate.

Petition is denied.

CARMELITA NOKOM v s . NLRC andRENTOKIL (PHILS.) G.R. No. 140043.July 18, 2000 DE LEON

Facts:

Petitioner Nokom was employed as amanager by private respondent Rentokil(Phils.) for its Healthcare Division. Asmanager, she was responsible formanaging the Healthcare Division inaccordance with the policies of Rentokiland she reported directly to the General

Manager, Framie Ong-dela Luna. Privaterespondents Paul Stern and Russel Harris,Rentokils Area Director and RegionalFinance Controller, respectively, receivedinformation that fictitious invoices weresent to Rentokil clients in the HealthcareDivision whose contracts have alreadybeen terminated. The fictitious invoiceswere allegedly made to inflate the grossrevenues of the Healthcare Division tomake up for the shortfall in its target

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revenues for the year 1995. Because initialfindings showed that petitioner Nokom, asManager of the Healthcare Division, wasinvolved in the anomaly, privaterespondents placed her on preventivesuspension. Later on, it was found out thatpetitioner knew of the fraudulent activitieswhich, as discovered by the new FinanceManager. Thereafter, Stern informedpetitioner of the findings of their auditor.Petitioner admitted the irregularities and,in her written explanation as requiredunder the notice of preventive suspension,petitioner told Stern that she had noexplanation and said that she was leavingher fate up to management. During thehearing conducted by Rentokilmanagement, petitioner failed to appeardespite notice. After the investigation, it

was found out that petitioner was aware,tolerated and in fact participated in theproduction of fictitious invoices. Thus,petitioners employment was terminated.NLRC dismissed the complaint for illegaldismissal for being without merit.

Issue: WON Nokom was illegallydismissed.

Ruling:

In a decided case, it has been held thatthe guidelines for the application ofthe doctrine of loss of confidence are:a..loss of confidence should not besimulated; b.. it should not be used asa subterfuge for causes which areimproper, illegal or unjustified; c. itmay not be arbitrarily asserted in theface of overwhelming evidence to the

contrary; and d..it must be genuine,not a mere afterthought to justifyearlier action taken in bad faith.

In the case at bench, petitioner washolding a managerial position withRentokil. As manager of the HealthcareDivision, petitioner was duty-bound to

perform her functions in accordance withcompany policies. During her incumbency,fraudulent activities transpired for whichshe must be held accountable. Petitionerhas not presented any persuasive evidenceor argument to convince us otherwise.True it is that an employer enjoys a widelatitude of discretion in the promulgationof company rules and regulations that attimes become the root of abuse bymanagement. In this case, however, the

policies of private respondent Rentokil arefair and reasonable, the decision toterminate the employment of petitionerwas justified and appropriate in the light ofthe acts committed by her, andconsidering that the requirements of theconstitutional right to due process wereduly accorded to petitioner.

Petition is denied.

b.iii. AUTHORIZED CAUSES1. Installation of Labor-Saving Devices; The installation of labor-saving devices

must be to effect economy andefficiency in the method of production.

Requisites for validity:1. must be done in good faith;2. purpose is to save on cost, enhance

efficiency and other justifiableeconomic reasons;

3. no other option available to theemployer;

4. reasonable and fair standards orcriteria in selecting who toterminate;

5. compliance with the 30-day noticerequirement; and

6. payment of separation pay.2. Redundancy; Redundancy exists where the services

of an employee are in excess of what isreasonably demanded by the actualrequirements of the enterprise; aposition is redundant when it issuperfluous.

Requisites for validity:1. written notice on both the affected

employees and DOLE;2. payment of separation pay

equivalent to at least 1 month payor to at least month pay for everyyear of service, whichever is higher;

3. good faith in abolishing theredundant positions; and

4. fair and reasonable criteria inascertaining what positions are tobe declared redundant andaccordingly.

3. Retrenchment Retrenchment- it is an act of the

employer of dismissing employeesbecause of losses in the operation of abusiness lack of work and considerablereduction of the volume of his business.

Requisites for validity:1. reasonably necessary and likely to

prevent business losses;2. written notice both to the

employees and DOLE;