terms with no moral dominance whatever being exercised by the former on the latter.

In the case at bench, the employment contract entered into by the parties herein appears to have observed the said guidelines. Furthermore, it is evident from the records that the subsequent re-hiring of petitioners which was to continue during the period of liquidation and the process of liquidation ended prior to the enactment of RA 7169 entitled, "An Act to Rehabilitate Philippine Veterans Bank", which was promulgated on January 2, 1992. However, petitioners were illegally dismissed. It is settled that in cases of illegal dismissal, the burden is on the employer to prove that there was a valid ground for dismissal. Mere allegation of reduction of costs without any proof to substantiate the same cannot be given credence by the Supreme Court. Here, respondents failed to rebut petitioners evidence, thus, irresistible conclusion is that the dismissal in question was illegal. Such illegal dismissal warrants reinstatement and payment of backwages. However, since petitioners reinstatement is now considered impractical because the new Philippine Veterans Bank has been rehabilitated by virtue of RA 7169, the Supreme Court limits the relief to be granted to the petitioners to the unpaid wages during the remaining period of their employment contract. If the contract is for a fixed term and the employee is dismissed without just cause, he is

entitled to the payment of his salaries corresponding to the unexpired portion of the employment contract. In this case, the unpaid wages should be reckoned on February 18, 1991 to January 1, 1992. January 1, 1992 is considered the date of expiration of the period of liquidation since January 2, 1992 was the effectivity of RA 7169. Petition is partly granted. D. M. CONSUNJI, INC vs. NLRC and ALEXANDER AGRAVIADOR G.R. No. 116572. December 18, 2000 KAPUNAN Facts: Private respondents were hired by petitioner as project employees to work on its Cebu Super Block Project in Cebu City. Their separate but identical contracts state among others: You are hired/appointed as project employee as ___________ for an estimated period of employment for _____________________ in the company's construction project at Cebu Superblock. THE TERMS AND CONDITIONS OF YOUR EMPLOYMENT ARE AS FOLLOWS: The period of employment is for an estimated period of one month that is for ___________________ to _____________________ provided that it

shall not extend beyond the duration of the project xxx.. Private respondents services were terminated allegedly without regard to the date of termination as specified in their contracts of employment. Petitioner reported the termination of their services to DOLE alleging that the term of the contracts of employment had expired. The private respondents then filed their respective complaints for illegal dismissal Labor Arbiter rendered a decision finding the dismissal of the private respondents without just cause and ordering petitioner to reinstate them to their former positions without loss of benefits and seniority rights and to pay them, which was affirmed by NLRC. Issue: WON the private respondents were project employees. Ruling: Project employee is one whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. Supreme Court has held that the length of service of a project employee is not the controlling test of employment tenure but whether or not the employment has been fixed for a specific project or undertaking the completion or termination of

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which has been determined at the time of the engagement of the employee. In the case at bench, private respondents are project employees. Their contracts of employment readily show that the private respondents were employed with respect to a specific project. The private respondents in this case were workers in a construction project of the petitioner. While employed with respect to a specific project, the contracts of employment between the private respondents and the petitioner provide that the former were employed for a term of 1 month which was the estimated period for the project to be finished. The private respondents do not even claim to be regular employees but merely that, as employees at the Cebu Super Block, they were terminated before the completion of the project without just cause and due process. As project employees, there is no showing that they were part of the work pool of the petitioner construction company. Hence, private respondents admit that they are not unaware that as project employees their employment can be terminated upon the completion of the project. Issue: WON the termination employment was illegal. Ruling: Examining the standard contracts signed by the private respondents, there are three ways by which their employment may be terminated: one, the expiration of of their

the one month period, which was the estimated period for the completion of the project; two, the completion of the project or phase of the project for which they were engaged prior to the expiration of the one month period; and three, upon the finding of unsatisfactory services or other just cause. The private respondents admitted that they signed their employment contract voluntarily. By this admission, the private respondents necessarily bound themselves to be employed for a fixed duration knowingly and voluntarily without any force, duress or improper pressure. There is no showing that the term fixed was used to preclude acquisition of tenurial security since private respondents were admittedly employed with respect to a specific project, the Cebu Super Block. Inescapably, being a valid contract between the private respondents and the petitioner, the provisions thereof, specifically with respect to the one (1) month period of employment, has the force of law between the parties. At the time of the termination of the private respondents employment on March 2, 1993, the respective periods or terms of employment of private respondents Barcelona, Laspuna and Diaz had already expired. The fact that they were allowed to work for weeks after the expiration of their contracts would not necessarily show that petitioner had dishonored the contracts. Indeed, some phases of the project may not have been completed after the estimated one month

period and that their services were still necessary. On the other hand, the one month period under the contracts of Agraviador and Mendrez had not yet expired when their services were terminated on March 2, 1993. Petitioner has not alleged, much less established, that the premature termination of the services of private respondents Agraviador and Mendrez was due to the earlier completion of the project or any phase or phases thereof to which they were assigned. Neither has it been shown that the services of Agraviador and Mendrez were unsatisfactory. In termination cases, the burden of proving that an employee has been lawfully dismissed lies with the employer. It is in the interest of justice to require employers to state the reason for their project employees dismissal and prove this ground once its veracity is challenged. Employers who hire project employees are mandated to prove the actual basis of the latters dismissal. The inescapable conclusion is that Agraviador and Mendrez were terminated prior to the expiration of the period of their employment without just cause, hence, their termination was illegal. However, private respondents can not be reinstated since the project they were assigned to was 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 of telephone operator with petitioner Philippine Long Distance Telephone Co. She, however, failed the pre-employment qualifying examination. Having failed the test, Arceo requested PLDT to allow her to work at the latters office even without pay. PLDT agreed and assigned her to its commercial section where she was made to perform various tasks like photocopying documents, sorting out telephone bills and notices of disconnection, and other minor assignments and activities. After two weeks, PLDT decided to pay her the minimum wage. On February 15, 1991, PLDT saw no further need for Arceos services and decided to fire her but, through the intervention of PLDTs commercial section supervisor, Mrs. Beatriz Mataguihan, she was recommended for an on-the-job training on minor traffic work. When she failed to assimilate traffic procedures, the company transferred her to auxiliary services, a minor facility. Subsequently, Arceo took the pre-qualifying exams for the position of telephone operator two more times but again failed in both attempts. Finally, on October 13, 1991, PLDT discharged Arceo from employment. She then filed a case for illegal dismissal before the labor arbiter. The Labor Arbiter ordered PLDT to reinstate Arceo to her "former position or to an equivalent

position." This decision became final and executory. On June 9, 1993, Arceo was reinstated as casual employee with a minimum wage. She was assigned to photocopy documents and sort out telephone bills. On September 3, 1996 or more than three years after her reinstatement, Arceo filed a complaint for ULP alleging that, since her reinstatement, she had yet to be regularized and had yet to receive the benefits due to a regular employee. On August 18, 1997, Labor Arbiter ruled that Arceo was already qualified to become a regular employee. He also found that petitioner denied her all the benefits and privileges of a regular employee. Issue: WON Arceo eligible to become a regular employee of PLDT. Ruling: Under Art. 280, Labor Code, the provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employee or where the work or services to be performed is seasonal in nature and employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph. Provided, that, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Under the foregoing provision, a regular employee is (1) one who is either engaged to perform activities that are necessary or desirable in the usual trade or business of the employer or (2) a casual employee who has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed. Under the first criterion, respondent is qualified to be a regular employee. Her work, consisting mainly of photocopying documents, sorting out telephone bills and disconnection notices, was certainly "necessary or desirable" to the business of PLDT. But even if the contrary were true, the uncontested fact is that she rendered service for more than one year as a casual employee. Hence, under the second criterion, she is still eligible to become a regular employee. Petitioners argument that respondents position has been abolished, if indeed true, does not preclude Arceos becoming a regular employee. The order to reinstate her also included the alternative to reinstate her to "a position equivalent thereto." Thus, PLDT

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can still "regularize" her in an equivalent position. Petition is denied. VIVIAN Y. IMBUIDO vs. NLRC and INTERNATIONAL INFORMATION SERVICES G.R. No. 114734. March 31, 2000 BUENA Facts: Petitioner Vivian Imbuido was employed as a data encoder by private respondent International Information Services, Inc., a domestic corporation engaged in the business of data encoding and keypunching, from August 26, 1988 until October 18, 1991 when her services were terminated. From August 26, 1988October 18, 1991, petitioner entered into 13 separate employment contracts with private respondent, each contract lasting only for a period of 3 months. Aside from the basic hourly rate, specific job contract number and period of employment. Petitioner allegedly agreed to the filing of a petition for certification election involving the rank-and-file employees of private respondent. Thus, Lakas Manggagawa sa Pilipinas filed a petition for certification election. Subsequently, petitioner received a termination letter from Edna Kasilag, Administrative Officer of private respondent, allegedly "due to low volume of work." Thus, petitioner filed a complaint for illegal dismissal. Labor Arbiter ruled in favor of petitioner and ordered her reinstatement, which was reversed by NLRC.

Issue: WON employee. Ruling:

petitioner

is

regular

Petitioner is a project employee. The principal test for determining whether an employee is a project employee or a regular employee is whether the project employee was assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employee was engaged for that project. A project employee is one whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. In the instant case, petitioner was engaged to perform activities which were usually necessary or desirable in the usual business or trade of the employer, petitioner worked as a data encoder for private respondent, a corporation engaged in the business of data encoding and keypunching, and her employment was fixed for a specific project or undertaking the completion or termination of which had been determined at the time of her engagement, as may be observed from the series of employment contracts between petitioner and private respondent, all of which contained a designation of the specific job contract and a specific period of employment.

However, even though petitioner is a project employee, petitioner has acquired the status of a regular employee. In a decided case, it has been held that a project employee or a member of a work pool may acquire the status of a regular employee when the following concur: 1) There is a continuous rehiring of project employees even after [the] cessation of a project; and 2) The tasks performed by the alleged "project employee" are vital, necessary and indispensable to the usual business or trade of the employer. In this case, the evidence on record reveals that petitioner was employed by private respondent as a data encoder, performing activities which are usually necessary or desirable in the usual business or trade of her employer, continuously for a period of more than 3 years, from August 26, 1988 to October 18, 1991 and contracted for a total of 13 successive projects. It should be noted, however, that the length of time during which the employee was continuously re-hired is not controlling, but merely serves as a badge of regular employment. Based on the foregoing, Petitioner has attained the status of a regular employee of private respondent. Being a regular employee, petitioner is entitled to security of tenure and could only be dismissed for a just or authorized cause. Petition is granted.

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RADIN C. ALCIRA vs. NLRC and PHILIPPINES CORPORATION G.R. No. 149859 June 9, 2004CORONA Facts: Respondent Middleby Philippines Corporation (Middleby) hired petitioner as engineering support services supervisor on a probationary basis for six months. Apparently unhappy with petitioners performance, respondent Middleby terminated petitioners services. Alcira claimed that his employment started on May 20, 1996 while the company alleged that Alcira was employed on May 27, 1996. The documents presented indicate petitioners employment status as "probationary (6 mos.)" and a remark that "after five months (petitioners) performance shall be evaluated and any adjustment in salary shall depend on (his) work performance." Petitioner asserts that, on November 20, 1996, in the presence of his co-workers and subordinates, Middleby in bad faith withheld his time card and did not allow him to work. Considering this as a dismissal "after the lapse of his probationary employment," petitioner filed on November 21, 1996 a complaint against respondent Middleby contending that he had already become a regular employee as of the date he was illegally dismissed. The Labor Arbiter dismissed the complaint which was affirmed by NLRC. Issue: WON petitioner was allowed to work beyond his probationary period.

Ruling: Under the law, probationary employment shall not exceed 6 months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. In the case at bench, the appointment contract expressly states that petitioners employment status was "probationary (6 mos.)." The five-month period referred to the evaluation of his work. Petitioner however, insists that he already attained the status of a regular employee when he was dismissed on November 20, 1996 because, having started work on May 20, 1996, the six-month probationary period ended on November 16, 1996. As the appointment provided that petitioners status was "probationary (6 mos.)" without any specific date of termination, the 180th day fell on November 16, 1996. Thus, when he was dismissed on November 20, 1996, he was already a regular employee. Petitioners contention is incorrect. It has been held that the computation of the 6-month probationary period is reckoned from the date of

appointment up to the same calendar date of the 6th month following. In short, since the number of days in each particular month was irrelevant, petitioner was still a probationary employee when respondent Middleby opted not to "regularize" him on November 20, 1996. Issue: WON petitioner was illegally dismissed when respondent Middleby opted not to renew his contract on the last day of his probationary employment. Ruling: It is settled that even if probationary employees do not enjoy permanent status, they are accorded the constitutional protection of security of tenure. This means they may only be terminated for just cause or when they otherwise fail to qualify as regular employees in accordance with reasonable standards made known to them by the employer at the time of their engagement. However, it has been held that this constitutional protection ends on the expiration of the probationary period. On that date, the parties are free to either renew or terminate their contract of employment. In the case at hand, Middleby exercised its option not to renew the contract when it informed petitioner on the last day of his probationary employment that it did not intend to grant him a regular status. Petition is denied.

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PERPETUAL HELP CREDIT COOPERATIVE vs. BENEDICTO FABURADA, SISINITA VILLAR G.R. No. 121948. October 8, 2001 SANDOVALGUTIERREZ Facts: Private respondents Benedicto Faburada, Sisinita Vilar, Imelda Tamayo and Harold Catipay filed a complaint against the Perpetual Help Credit Cooperative, Inc. (PHCCI), for illegal dismissal. Petitioner PHCCI filed a motion to dismiss the complaint on the ground that there is no employer-employee relationship between them as private respondents are all members and co-owners of the cooperative. Furthermore, private respondents have not exhausted the remedies provided in the cooperative bylaws. Labor Arbiter denied petitioner's motion to dismiss, holding that the case is impressed with employer-employee relationship and that the law on cooperatives is subservient to the Labor Code. Issue: WON private regular employees. Ruling: Article 280 of the Labor Code provides for three kinds of employees: (1) regular employees or those who have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or those whose respondents are

employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season; and (3) casual employees or those who are neither regular nor project employees. The employees who are deemed regular are: (a) those who have been engaged to perform activities which are usually necessary or desirable in the usual trade or business of the employer; and (b) those casual employees who have rendered at least one (1) year of service, whether such service is continuous or broken, with respect to the activity in which they are employed. The elements of the ER-EER are present in this case. PHCCI, through Mr. Edilberto Lantaca, Jr., its Manager, hired private respondents to work for it. They worked regularly on regular working hours, were assigned specific duties, were paid regular wages and made to accomplish daily time records just like any other regular employee. They worked under the supervision of the cooperative manager. But unfortunately, they were dismissed. Moreover, private respondents were rendering services necessary to the dayto-day operations of petitioner PHCCI. This fact alone qualified them as regular employees. All of them, except Harold D. Catipay, worked with petitioner for more

than 1 year. That Benedicto Faburada worked only on a part-time basis, does not mean that he is not a regular employee. Ones regularity of employment is not determined by the number of hours one works but by the nature and by the length of time one has been in that particular job. Consequently, petitioner's contention that private respondents are mere volunteer workers, not regular employees, must necessarily fail. As regular employees or workers, private respondents are entitled to security of tenure. Thus, their services may be terminated only for a valid cause, with observance of due process. Petition is denied. ABESCO CONSTRUCTION AND DEVELOPMENT CORPORATION vs. ALBERTO RAMIREZ G.R. No. 141168 April 10, 2006 CORONA Facts: Petitioner company was engaged in a construction business where respondents were hired on different dates from 1976 to 1992 either as laborers, road roller operators, painters or drivers. Respondents filed complaintsfor illegal dismissal against the company. Petitioners allegedly dismissed them without a valid reason and without due process of law. Petitioners denied liability to respondents and countered that respondents were "project employees" since their services were necessary only when the company had projects to be completed. Petitioners

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argued that, being project employees, respondents' employment was coterminous with the project to which they were assigned. They were not regular employees who enjoyed security of tenure and entitlement to separation pay upon termination from work. The Labor Arbiter ruled that private respondents are regular employees. Issue: WON private respondents were regular employees. Ruling: Private respondents were regular employees. Employees (like respondents) who work under different project employment contracts for several years do not automatically become regular employees; they can remain as project employees regardless of the number of years they work. Length of service is not a controlling factor in determining the nature of one's employment. Moreover, employees who are members of a "work pool" from which a company (like petitioner corporation) draws workers for deployment to its different projects do not become regular employees by reason of that fact alone. It has been held that members of a "work pool" can either be project employees or regular employees. The principal test for determining whether employees are "project employees" or "regular employees" is whether they are assigned to carry out a specific project or undertaking, the duration and scope of

which are specified at the time they are engaged for that project. Such duration, as well as the particular work/service to be performed, is defined in an employment agreement and is made clear to the employees at the time of hiring. In this case, petitioners did not have that kind of agreement with respondents. Neither did they inform respondents of the nature of the latter's work at the time of hiring. Hence, for failure of petitioners to substantiate their claim that respondents were project employees, the Supreme Court is constrained to declare them as regular employees. Petition is denied. B. Management Prerogatives Management prerogative refers to the right of an employee to regulate all aspects of employment. a. Scope 1. Right to set Pre-employment Qualifications: 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 conduct its own affairs to achieve its purpose cannot be denied. Except as limited by special laws, an employer is free to regulate according to his own discretion and judgment, all aspects of employment including, the power to: a. Determine the time, place, and manner 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 implement prescribed rules; i. Merge or consolidate the business with another; j. Abolish positions which it deems no longer necessary; k. Close the business; and l. Contract out services performed by employees to outside agencies. Every business enterprise endeavors to increase its profits. In the process it may adopt or devise means designed toward that goal. So long as the management prerogatives are exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or

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under valid agreements, such prerogatives will be upheld. NOTE: The Court upheld the right of the management to prescribe a policy prohibiting an employee from having a relationship with an employee of a competitor company (Tecson vs. Glaxo Wellcome Philippines, GR No. 162994, September 17, 2004) 2. Right to Discipline Employees The employer has the prerogative to instill discipline in his employees and to impose reasonable penalties, including dismissal, on erring employees pursuant to company rules and regulations. Although the employer has the prerogative to discipline or dismiss its employee, such prerogative cannot be exercised wantonly, but must be controlled by substantive due process and tempered by the fundamental policy of protection to labor enshrined in the Constitution. Infractions committed by an employee should merit only the corresponding sanction demanded by the circumstances. The penalty must be commensurate with the act, conduct or omission imputed to the employee and imposed in connection with the employers disciplinary authority. 3. Right to Transfer Employees It is management prerogative to transfer or assign an employee from one office to another within the business establishment, in the pursuance of its legitimate business interest provided there is no demotion in rank or diminution of his salary.

An employees right to security of tenure does not give him such vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him. It is the prerogative of management to transfer an employee where he can be most useful to the company. Q. When transfer may constitute constructive dismissal? A. A transfer amounts to constructive dismissal when the transfer is unreasonable, inconvenient or prejudicial to the employee, and involves a demotion in rank or diminution of salaries, benefits and other privileges. NOTE: A transfer that results of promotion or demotion, advancement or reduction or a transfer that aims to lure an employee away from his permanent position cannot be done without the employees consent. Re-assignment pending investigation by the management falls within the management prerogatives. The purpose of re-assignment is no different from that of preventive suspension which management could validly impose as a disciplinary measure for the protection of the companys property pending investigation of any alleged misfeasance or malfeasance committed by an employee. 4. Right to Demote It is management prerogative to transfer, demote, and even dismiss an employee to protect its business, provided it is not tainted with unfair labor practices.

Management is at liberty, absent any malice on its part, to abolish positions which it deems no longer necessary. Abolition of position due to company reorganization or merger is a management prerogative and will be upheld provided the same is undertaken without any malice on the part of the management. The company has the prerogative to adopt a redundancy/retrenchment program to minimize if not, to avert losses in the conduct of its operations. Promotion of employees is a management prerogative. 5. Right to Dismiss The right of the company to dismiss its employee is a measure of selfprotection. An employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of malfeasance towards his employer, and whose continuance in the service of the latter is patently inimical to its interest. NOTE: a. Services Performed by Personnelwith respect to the determination of whether services should be performed by its personnel or contracted to outside agencies, the contracting out should be motivated by good faith and must not have been resorted to circumvent the law or must not have been the result of malicious or arbitrary action. b. Closing of Business- with respect to the closing of business, although the employer may close or cease his business operations or undertaking even

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if he is not suffering from serious business losses or financial reverses, the same may be undertaken as long as he pays his employees their termination pay in the amount corresponding to their length of service. CASES: ANGELITO P. DELES, JR vs. NLRC and FIRST PHIL. INDUSTRIAL CORP. G.R. No. 121348. March 9, 2000 QUISUMBING Facts: Respondent company operates a pipeline system which transports petroleum products from the refineries by Caltex and Shell in Batangas to terminal receiving facilities in Metro Manila. Petitioner was employed by the company as shift supervisor. He was assigned at its joint terminal facility in Pandacan, Manila, where he was the highest ranking officer at the terminal during his shift. His primary task was to oversee the entire pipeline operation in the terminal. Admittedly, he was a member of the management team. On the night of March 19, 1993, petitioner was the shift supervisor on duty while Eduardo Yumul and Leonardo Espejon were the assigned shift operator and gauger, respectively. During this shift, there was a scheduled delivery for Shell through respondent companys pipeline of about 3,000 barrels of kerosene (KE) to be followed by a delivery of aviation turbine fuel (AV). Forthwith, petitioner instructed his chief

operator (Yumul) to effect a batch change from the kerosene tank to the aviation fuel tank when the joint terminal facility turbine meter registers 2,944 barrels of kerosene delivered. Apparently, Yumul failed to execute correctly petitioners order. Instead of effecting the batch change at the prescribed reading of 2,944 barrels, Yumul caused the batch change when the reading already reached 3,341 barrels. Thus, about 397 barrels of the succeeding batch of aviation turbine fuel went to the kerosene batch thereby downgrading the former. When informed of the incident, the company required petitioner to explain why he should not be charged administratively for neglect of duty. Petitioner was placed under preventive suspension pending the outcome of the investigation. The company conducted a joint formal investigation and found petitioner, Yumul and Espejon guilty as charged. Accordingly, private respondent Flaviano Santos, respondent companys assistant vice president, informed petitioner that he was found to have violated the section on Neglect of Duty of respondent companys Code of Discipline and for this violation he was meted the penalty of 3 months suspension. For their part, Yumul was meted the penalty of dismissal while Espejon was suspended for one and a half months. Petitioner filed a complaint before the NLRC, questioning the legality of his suspension. Issue: WON dismissed. petitioner was illegally

Ruling: regarding the legality of petitioners suspension, petitioner was found remiss in his duties in connection with the wrong batch change operation on March 19, 1993. He contends though that his suspension for three months is too harsh, whimsical and biased. In essence, he decries the penalty imposed on him which he considered too severe. However, petitioner loses sight of the fact that the right of an employer to regulate all aspects of employment is well settled. This right, aptly called management prerogative, gives employers the freedom to regulate, according to their discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. In general, management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations. Thus, petitioners protestation unfounded. For, based on the record, the company imposed said penalty pursuant to the Company Code of Discipline which the labor agencies find to be fair and in accordance with law. In fact, the penalty for violating the provision on Neglect of Duty ranges from warning to dismissal depending on the gravity of the offense. Respondent company explained that

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mishandling the delivery of highly flammable petroleum products could result in enormous damage to properties and loss of lives at the terminal and surrounding areas. Hence, it has to exercise extraordinary diligence in conducting its operations in view of the delicate nature of its business. Considering the attendant circumstances, we are constrained to agree that the penalty of suspension first imposed on petitioner is reasonable and appropriate as well as legally unassailable. Petition is denied. FLOREN HOTEL vs. NLRC and RODERICK A. CALIMLIM G.R. No. 155264 May 6, 2005 QUISUMBING Facts: At the time of their termination, private respondents Roderick A. Calimlim and Ronald Rico were working in the hotel as room boys and Lito F. Bautista as front desk man. Petitioner Dely Lim randomly inspected the hotel rooms to check if they had been properly cleaned. When she entered Room 301, she found Lito Bautista sleeping half-naked with the airconditioning on. Lim immediately called the attention of the hotels acting supervisor, Diosdado Aquino, who had supervision over Bautista. Lim admonished Aquino for not supervising Bautista more closely, considering that it was Bautistas third offense of the same nature. When she 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 from the hotels coffee shop. Like Bautista, they had switched on the air conditioning in Room 303. Dely Lim prepared a memorandum for Bautista. In the presence of Acting Supervisor Aquino as well as the other workers, Lim tried to give Bautista a copy of the memorandum but Bautista refused to receive it. Bautista then went on absence without leave. Calimlim and Rico, embarrassed by the incident, went home. When they returned to work the next day, they were served with a notice of suspension for one week. Like Bautista, they refused to receive the notice of suspension, but opted to serve the penalty. Upon their return on June 15, 1998, they saw a memorandum on the bulletin board announcing the suspension as room boys of Calimlim and Rico, or alternately returning to work on probation as janitors. The memorandum also included Calimlim and Ricos new work schedule. Calimlim and Rico submitted handwritten apologies and pleaded for another chance, before they went AWOL (absent without leave). Calimlim, Rico and Bautista filed separate complaints, for illegal dismissal and money claims, before the Labor Arbiter. Calimlim and Rico claimed they were constructively dismissed, while Bautista claimed that Dely Lim orally told him not to go back to work because he was already dismissed. Labor Arbiter dismissed the complaints but ordered petitioners to pay private respondents their proportionate 13th month pay, and SIL pay. He likewise ordered petitioners to pay Calimlim and

Rico indemnity. NLRC reversed Labor Arbiter and ordered the hotel management to immediately reinstate private respondents to their former positions without loss of seniority rights, with full backwages and other benefits until they are actually reinstated. CA ruled that petitioners had constructively dismissed private respondents Calimlim and Rico, hence the petitioners are liable to the private respondents for their proportionate 13th month pay, SIL pay, and indemnity. Issue: WON private respondents Calimlim and Rico were constructively dismissed. Ruling: For the transfer of the employee to be considered a valid exercise of management prerogatives, the employer must show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; neither would it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to discharge this burden of proof, the employees transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely, as in an offer involving a demotion in rank and diminution in pay. In the case at bench, Calimlim and Rico were being forced to accept alternate work periods in their new jobs as janitors,

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otherwise they would be unemployed. Not only did their new schedule entail a diminution of wages, because they would only be allowed to work every other week, the new schedule was also clearly for an undefined period. The memorandum did not state how long the schedule was to be effective. Indeed, it appears that the period could continue for as long as management desired it. These unreasonable new terms of employment were imposed in the memorandum, which was issued two days before Calimlim and Rico returned from their week-long suspension. They were imposed for alleged past infractions for which neither Calimlim nor Rico was given the chance to be heard. Under the circumstances, the Supreme Court fail to see how the temporary transfer of Calimlim and Rico could be a valid exercise of management prerogatives. Even the employers right to demote an employee requires the observance of the twin-notice requirement. CA is modified. LOPEZ SUGAR CORPORATION vs. LEONITO G. FRANCO G.R. No. 148195 May 16, 2005 CALLEJO Facts: Private respondents Leonito G. Franco et.al were supervisory employees of the Lopez Sugar Corporation. Franco was hired by the Corporation as Shift Supervisor in the Sugar Storage Department. On the other hand, Perrin and Candelario were

employed as Planter Service Representatives (PSRs), who rose from the ranks and, by 1994, occupied supervisory positions in the Corporations Cane Marketing Section. By 1994, the supervisory employees of the Corporation, spearheaded by Franco et.al. decided to form a labor union called Lopez Sugar Corporation Supervisors Association. DOLE issued a Certificate of Registration to the union. During its organizational meeting, Franco was elected president and Pabalan as treasurer. The officers of the union and the management held a meeting, which led to the submission of the unions proposals for a CBA. The Corporations president issued a Memorandum to the vice-president and department heads for the adoption of a special retirement program for supervisory and middle level managers. He emphasized that the management shall have the final say on who would be covered, and that the program would be irrevocable once approved. Perrin and Candelario were on leave when they were invited by Juan Masa, Jr., the head of the Cane Marketing Section. The latter informed them that they were all included in the special retirement program and would receive their respective notices of dismissal shortly. Franco et.al. received copies of the Memorandum from the Corporations Vice-President for Administration and Finance, informing them that they were included in the "special retirement program" for supervisors and middle level managers; hence, their employment with the Corporation was to be terminated effective

and they would be paid their salaries. Thereafter, the private respondents filed separate complaints against the corporation with the NLRC for illegal dismissal, ULP, reinstatement and damages. NLRC ruled in favor of private respondents which was affirmed by CA. Issue: WON private respondents were illegally dismissed. Ruling: In a decided case, it has been held that it is imperative for the employer to have fair and reasonable criteria in implementing its redundancy program, such as but not limited to (a) preferred status; (b) efficiency; and (c) seniority. The general rule is that the characterization by an employer of an employees services as no longer necessary or sustainable is an exercise of business judgment on the part of the employer. The wisdom or soundness of such characterization or decision is not, as a general rule, subject to discretionary review on the part of the Labor Arbiter, the NLRC and the CA. Such characterization may, however, be rejected if the same is found to be in violation of the law or is arbitrary or malicious. It is settled that the hiring, firing or demotion of employees is a management prerogative, but is subject to limitations stated in the collective bargaining agreement, if any, or general 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 a corporation to downsize its personnel, solely for the purpose of weakening the union leadership, thereby preventing it from securing reasonable terms and conditions of employment in their CBA with the employer. In the case at bench, petitioner illegally dismissed the private respondents from their employment by including them in its special retirement program, thus, debilitating the union, rendering it pliant by decapacitating its leadership. As such, the so-called "downsizing" of the Cane Marketing Department and SMSD based on the SGV Study Report was a farce capricious and arbitrary. Foremost, the petitioner failed to formulate fair and reasonable criteria in ascertaining what positions were declared redundant and accordingly obsolete, such as preferred status, efficiency or seniority. It, likewise, failed to formulate fair and reasonable parameters to determine who among the supervisors and middle-level managers should be "retired" for redundancy. Using the SGV report as anchor, the petitioner came out with a special retirement program for its 108 supervisors and middle-level managers, making it clear that its decision to eliminate them was final and irrevocable. Moreover, the private respondents were not properly apprised of the existence of the special retirement program, as well as the criteria for the selection of the supervisors to be "retired," and those to be retained or transferred or demoted. Petitioner

downsized the Cane Marketing Department by eliminating private respondents Perrin and Candelario; and Franco and Candelario from the Sugar and Molasses Storage Department, respectively, without due regard to the SGV report. The downsizing of personnel was not among the foregoing recommendations, and yet this was what the petitioner did, through its special retirement program, by including private respondents Franco and Pabalan, thereby terminating their employment. It is too much of a coincidence that the two private respondents were active members of the union. Petition is denied. C. TERMINATION EMPLOYMENT a. Security of Tenure Security of Tenure- the Constitutional right granted to the employee that the employer shall not terminate the services of an employee except for just cause or when authorized cause. Nature of the Right to Security of Tenure and the Right to terminate employment: Termination of employment is not anymore a mere cessation or severance of contractual relationship but an economic phenomenon affecting members of the family. This explains why under the broad principles of social justice the dismissal of employee is OF

adequately protected by the laws of the State. However, the workers right to security of tenure is not an absolute right for the law provides that he may be dismissed for cause. The law in protecting the rights of the labor authorizes neither oppression nor self-destruction of the capital. Substantive Due Process of Dismissal- an employee cannot be dismissed except for just or authorized cause of dismissal. Procedural Due Process- the process of termination that should be observed by the employer such as the twinnotice and hearing requirement and the 30-day notice requirement. b. Causes of Termination by Employer (Substantive Due Process of Dismissal) b.i. JUST CAUSES 1. Serious Misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work: 1.a. Serious Misconduct Misconduct- transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful 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 has become unfit to continue working for the 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 in company 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 the personal business of the employee; 8. sexual harassment (the managers act of fondling the hands, massaging the shoulder and caressing the nape of the secretary). 1.b. Requisites of Willful Disobedience of Lawful Orders 1. The employees assailed conduct must have been willful or intentional, the willfulness is being characterized by a wrongful and perverse attitude; 2. Order violated must be reasonable and lawful and made known to the employee and must pertain to the duties which he had been engaged to discharge. Examples: 1. using company vehicles for private purpose without authority from management;

2. refusal to report in the workers new work assignment in defiance of management prerogative; 3. driving without a valid drivers license in violation of the company rules and regulations. 2. Gross and habitual neglect by the employee of his duties; Gross negligence- the want or absence of even slight care or diligence as to amount to a reckless disregard of the safety of person or property. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. Habitual neglect- implies repeated failure to perform ones duties for a period of time, depending upon the circumstances. In order to constitute a just cause for the employees dismissal, the neglect of duties must not only be gross but also habitual. Thus, the single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. Examples: 1. Unjustified absences; 2. habitual absenteeism; 3. abandonment of work NOTE: To constitute abandonment of work, two elements must concur: 1. The failure to report for work or absence without valid or justifiable reason; and 2. a clear intention to sever the employer-employee relationship.

The second element is the more determinative factor and being manifested by some overt acts. Abandoning ones job means the deliberate, unjustified refusal of the employee to resume his employment and the burden of proof is on the employer to show a clear and deliberate intent on the part of the employee to discontinue employment. 3. Fraud of willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; The lost of trust and confidence must be based on the willful breach of the trust reposed in the employee by his employer. Ordinary breach will not suffice. A breach of trust is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Loss of confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. He must be invested with confidence on delicate matters such as the custody, handling, care and protection of the employers property and/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 in the face of overwhelming evidence to 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 by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; NOTE: Conviction or prosecution is not required. 5. Other causes analogous to the foregoing causes. Examples: 1. unreasonable behavior and unpleasant deportment in dealing with co-workers; 2. failure to meet assigned sales quota; 3. gross inefficiency; 4. violation of the companys code of conduct or company rules and regulations Doctrine of Incompatibility- Upon employment, an employee is expected to behave in such a manner that would ensure the efficient and orderly operation of the employers business. Where the employee has done something that is contrary or incompatible to the performance of his duties, his employer has just cause for terminating his employment.

Substantial proof and NOT clear and convincing evidence or proof beyond reasonable doubt is sufficient as basis for the imposition of any disciplinary action upon the employee. CASES: IMELDA B. DAMASCO vs. NLRC and MANILA GLASS SUPPLY G.R. No. 115755. Dec. 4, 2000 Quisimbing Facts: Ms. Imelda Damasco was a regular sales clerk in Manila Glass Supply in Olongapo City. Manila Glass Supply is a sole proprietorship engaged in the sale of glass with main store in Olongapo City and branch in Metro Manila. Bonifacio K. Sia is private respondent is the owner of Manila Glass Supply. Damasco was employed by Manila Glass Supply and Bonifacio K. Sia as Sales Clerk, receiving lately a daily wage of P140.00. As sales clerk, she was ordered to do almost all the works related to the glass business of respondents including the cutting, sales and delivery of glass as well as balancing, accounting and checking of capital and profits every end of the month. On August 28, 1992, while she was working, Bonifacio Sia called her up and told her to finish all her works that night, but she told respondent that she would not be able to finish them all because it was already late; that she then left respondents room but respondent called her again and asked her why she could not finish what she was told to do, to which Damasco answered that it was

already late and there were still a lot of things to do. Sia asked Damasco why she was not teaching her 2 other co-workers on what to do, and she answered she would not do it anymore because if the other co-workers should commit mistakes in accounting, she was the first one to be lambasted by respondent and even required to share in paying the shortages. Sia ordered Damasco to go out of the room and told her that he does not want to see her face anymore. Sia, on the other hand, alleged that Damasco was instructed to report for work in their store in Metro Manila as there is a necessity for her detail thereat for reasons that the employees there are new. Damasco objected for reasons that her husband is working in Olongapo City and she does not want to work in Manila and thereafter, Damasco did not report for work in the respondents store in Olongapo City. Sia received a copy of complaint for illegal dismisssal filed by Damasco. Immediately, Sia sent a letter to complainant directing her to report for work which was ignored by Damasco. The Labor Arbiter ruled in favor of Damasco which was modified by NLRC. Issue: WON dismissed. Ruling: To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employeremployee relationship, with the Damasco was illegally

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second element as the more determinative factor when manifested by some overt acts. Abandoning ones job means the deliberate, unjustified refusal of the employee to resume his employment and the burden of proof is on the employer to show a clear and deliberate intent on the part of the employee to discontinue employment. In the case at bench, there are no overt acts established by Sia from which we can infer the clear intention of Damasco to desist from employment. Sias letters for Damasco to report for work deserve scant consideration. Note that those orders were made four months after Damasco was told not to show herself again in the store, and after Sia had received a copy of Damascos complaint for illegal dismissal. It is indeed highly incredible for an employer to require his employee without an approved leave to report to work only after four months of absence. If at all, the charge of abandonment is disingenuous to say the least. Moreover, it was unlikely that Damasco had abandoned her job for no reason at all considering the hardship of the times. In addition, if Damasco had truly forsaken her job, she would not have bothered to file a complaint for illegal dismissal against her employer and prayed for reinstatement. An employee who forthwith took steps to protect her layoff could not by any logic be said to have abandoned her work. As regards Sias allegation that Damasco committed serious misconduct or willful disobedience of lawful order in connection

with her work, the same is not tenable. Even if Sia directed her to be assigned at his store in Metro Manila, her act of refusing to be detailed in Metro Manila could hardly be characterized a willful or intentional disobedience of her employers order. It was Sias order that appears to us whimsical if not vindictive. Reassignment to Metro Manila is prejudicial to Ms. Damasco, as she and her family are residing in Olongapo City. This would entail separation from her family and additional expenses on her part for transportation and food. Damascos reassignment 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 an institute of learning. Carmelita Santos et.al. were regular classroom teachers. Respondent Santos began teaching at St. Michael's Institute in 1979 while respondents Magcamit and Rosarda joined its school faculty only in 1990. Their service with the school was abruptly interrupted when each of them was served a notice of termination of employment on 1993. The termination allegedly stemmed from an incident that occurred on August 10, 1993. On said date, a public rally was held at the town plaza of Bacoor, Cavite in the vicinity of petitioner school. The rally,

organized and participated in by faculty members, parents and some students of petitioner school, was, among others, aimed at calling the attention of the school administration to certain grievances relative to substandard school facilities and the economic demands of teachers and other employees of St. Michael's Institute. Blanco, as school principal, sent each of the respondents identical memoranda requiring them to explain their acts of leading the aforementioned rally of students outside the school premises; preventing students from attending classes; and denouncing the school authority in their speeches. Respondents denied all the accusations attributed to them, and explained that they were invited by the core group of parents and merely joined them in expressing their sentiments. After investigation, the Investigating Committee found respondents to have led and actively participated in the said rally and consequently recommended their termination from service. Respondents were sent letters informing them of their termination from the service "for serious disrespect" to their superior, petitioner Fr. Victorino, and for "serious misconduct that resulted in the disruption of classes." In the illegal dismissal case, the Labor Arbiter declared that there was just cause for the dismissal of the respondents' complaints since they were guilty of dereliction of duty, which was reversed by NLRC. Issue: WON private respondents were illegally dismissed.

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Ruling: In termination of employment disputes that the burden of proof is always on the employer to prove that the dismissal was for a just and valid cause. Evidence must be clear, convincing and free from any inference that the prerogative to dismiss an employee was abused and unjustly used by the employer to further any vindictive end. Misconduct is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. As a just cause for termination, the misconduct must be serious, which implies that it must be of such grave and aggravated character and not merely trivial or unimportant. On the other hand, disobedience, as a just cause for termination, must be willful or intentional. Willfulness is characterized by a wrongful and perverse mental attitude rendering the employee's act inconsistent with proper subordination. Not every case of insubordination or willful disobedience by an employee of a lawful work-connected order of the employer is reasonably penalized with dismissal. There must be reasonable proportionality between, on the one hand, the willful disobedience by the employee and, on the other hand, the penalty imposed therefor. In the case at bench, evidence is wanting on the depravity of conduct, and willfulness of the disobedience on the part of the

respondents. Absence of one day of work to join a public rally cannot be of such great dimension as to equate it with an offense punishable with the penalty of dismissal. The reinstatement of the respondents is, thus, just and proper. Petition is denied. PHILIPPINE AEOLUS AUTOMOTIVE UNITED C CORP vs. NLRC and ROSALINDA. CORTEZ G.R. No. 124617. April 28, 2000 BELLOSILLO Facts: Petitioner Philippine Aeolus Automotive United Corporation (PAAUC) is a domestic corporation, petitioner Francis Chua is its President while private respondent Rosalinda C. Cortez was a company nurse of petitioner corporation until her termination. A memorandum was issued by Ms. Myrna Palomares, Personnel Manager of petitioner corporation, addressed to private respondent Cortez requiring her to explain within 48 hours why no disciplinary action should be taken against her (a) for throwing a stapler at Plant Manager William Chua, her superior, and uttering invectives against him; (b) for losing the amount of P1,488.00 entrusted to her by Plant Manager Chua to be given to Mr. Fang of the CLMC Department; and, (c) for asking a coemployee to punch-in her time card thus making it appear that she was in the office in the morning of 6 September 1994 when in fact she was not. The memorandum however was refused by private

respondent although it was read to her and discussed with her by a co-employee. She did not also submit the required explanation, so that while her case was pending investigation the company placed her under preventive suspension for 30 days. While Cortez was still under preventive suspension, another memorandum was issued by petitioner giving her 72 hours to explain why no disciplinary action should be taken against her for allegedly failing to process the ATM applications of her 9 co-employees with the Allied Banking Corporation. The memorandum was also refused to receive by private respondent. A third memorandum was issued to private respondent, this time informing her of her termination from the service on grounds of gross and habitual neglect of duties, serious misconduct and fraud or willful breach of trust. Labor Arbiter rendered a decision holding the termination of Cortez as valid and legal, which was reversed by NLRC. Issue: WON private illegally dismissed. Ruling: The Labor Code provides specific grounds by which an employer may validly terminate the services of an employee, which grounds should be strictly construed since a persons employment constitutes "property" under the context of due process of law and, as such, the burden of proving that there exists a valid respondent was

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ground for termination of employment rests upon the employer. Likewise, in light of the employee's right to security of tenure, where a penalty less punitive than dismissal will suffice, whatever missteps may have been committed by labor ought not to be visited with a consequence so severe. The Supreme Court, in a litany of decisions on serious misconduct warranting dismissal of an employee, has ruled that for misconduct or improper behavior to be a just cause for dismissal (a) it must be serious; (b) must relate to the performance of the employees duties; and, (c) must show that the employee has become unfit to continue working for the employer. In the case at bench, the act of private respondent in throwing a stapler and uttering abusive language upon the person of the plant manager may be considered, from a lay man's perspective, as a serious misconduct. However, in order to consider it a serious misconduct that would justify dismissal under the law, it must have been done in relation to the performance of her duties as would show her to be unfit to continue working for her employer. The acts complained of, under the circumstances they were done, did not in any way pertain to her duties as a nurse. Her employment identification card discloses the nature of her employment as a nurse and no other. Also, the memorandum informing her that she was being preventively suspended pending investigation of her case was

addressed to her as a nurse. Likewise, the act of private respondent in asking a coemployee to punch-in her time card, although a violation of company rules, likewise does not constitute serious misconduct. On alleged failure to process the ATM applications of her 9 co-employees with the Allied Banking Corporation, the truth is that the money entrusted to private respondent was in fact deposited in the respective accounts of the employees concerned, although belatedly. Gross negligence implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. The negligence, to warrant removal from service, should not merely be gross but also habitual. Likewise, the ground "willful breach by the employee of the trust reposed in him by his employer" must be founded on facts established by the employer who must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the employee may fairly be made to rest. All these requirements prescribed by law and jurisprudence are wanting in the case at bar. NLRC is affirmed. SANTIAGO ALCANTARA vs. CA and THE PENINSULA MANILA G.R. No. 143397. August 6, 2002 KAPUNAN Facts:

Petitioner Santiago Alcantara, Jr., an employee of respondent The Peninsula Manila. At the time of his dismissal, petitioner worked as Commis II of the Food and Beverage Department of the Peninsula. He was also a Director of the National Union of Workers in Hotels Restaurants. The controversy stems from a Memorandum issued by respondent Hotel prohibiting the union from using the union office from midnight until 6:00 in the morning. The union office was located in the hotel premises. On several occasions, petitioner and his companions were seen inside the union office from midnight until morning. The Hotel sent a memorandum to petitioner directing him to submit his written explanation within 24 hours from receipt thereof. Petitioner explained that the Memorandum prohibiting the use of the union office was inconsistent with the CBA and was necessarily ineffective. Petitioner argued that inasmuch as the Hotel operated 24 hours a day, the union office should be available whenever the union found it necessary. This was how the CBA had always been applied. Petitioner also pointed out that the charge against him did not pertain to his duties in the Hotel. He claimed he used the union office only during his breaks or when he was off duty. The Hotel sent petitioner a Notice of Termination for alleged willful and blatant refusal to comply with a lawful and valid issued by his employer. CA found that petitioner was legally dismissed on the ground of willful disobedience.

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Issue: WON dismissed. Ruling:

petitioner

was

illegally

for any employer to maintain discipline in its establishment. In the case at bench, the subject Memorandum is not grossly oppressive. It is not patently contrary to law. While petitioner argues that its application was discriminatory the two employees found with him in the union room were not at all subjected to disciplinary action the Memorandum was not discriminatory on its face. Petitioners violation of his employers order, prior to its revocation, was therefore inexcusable. Nevertheless, petitioners behavior did not constitute the wrongful and perverse attitude that would sanction his dismissal. The surrounding circumstances indicate that petitioner was motivated by a his honest belief that the Memorandum was indeed unlawful and unreasonable. Previous practice allowed the use of the union office 24 hours a day. Viewed in this light, petitioners attitude can hardly be characterized as wrongful and perverse. While these circumstances do not justify his violation of the regulation, they do not justify his dismissal either. Petition is granted. PHILIPPINE NATIONAL CONSTRUCTION CORP vs. ROLANDO MATIAS G.R. No. 156283 May 6, 2005 PANGANIBAN Facts: Rolando Matias was employed by Construction and Development Corp as

Willful disobedience of the employers lawful orders, as a just cause for the dismissal of an employee, envisages the concurrence of at least two requisites: (1) the employees assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. Company policies and regulations are, unless shown to be grossly oppressive or contrary to law, generally binding and valid on the parties and must be complied with until finally revised or amended unilaterally or preferably through negotiation or by competent authority. It would be dangerous doctrine indeed to allow employees to refuse to comply with rules and regulations, policies and procedures laid down by their employer by the simple expedient of formally challenging their reasonableness or the motives which inspired them, or to give the employees the power to suspend compliance with company rules or policies by requesting that they be first subject of collective bargaining. It would be well nigh impossible under these circumstances

Chief Accountant and Administrative Officer. During his employment with the company, various parcels of land situated at Don Carlos Bukidnon were placed in the names of certain employees as trustees for the purpose of owning vast tracts of land more than the limit a corporation can own which were primarily intended for CDCP agricultural businesses. By internal arrangement documents transferring back the properties to the corporation were executed. A land was registered in the name of Matias covered by OCT. In 1984, the loans of CDCP from various government entities were converted to equity thus making it a GOCC and the name of CDCP was changed to Philippine National Construction Corporation (PNCC). Under a new set up, PNCC offered a retrenchment program and Matias availed of the said program. In July 1992, two former CDCP employees, namely Reynaldo Tac-an and Luciano Tadena went to the house of Matias and brought with them duly accomplished documents and SPA for his signature and informed him that the lands in Bukidnon under his name with all the others were invaded by squatters, and that the said land were covered by CARP where Matias name was included in the list of landowners. Matias reluctantly signed the document and after six months, he signed an acknowledgment receipt of P100,000.00. The Register of Deeds cancelled the OCT originally registered in the name of Matias and issued a new TCT in the name of the Republic of the Philippines. Matias was rehired by PNCC as Project Controller in Zambales PMMA Project. Later, Matias was dismissed by

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PNCC on the ground of lost of trust and confidence. Petitioner alleges that respondent fraudulently breached its trust and confidence when, without its knowledge and consent, he disposed of the Bukidnon property; though actually belonging to petitioner, that property had purportedly been merely placed in trust under his name. Thereafter, he assigned the same property to petitioner, allegedly despite his full knowledge that the title had already been transferred -- with his active planning and participation -- to the Republic of the Philippines. Issue: WON private illegally dismissed. Ruling: It is a basic principle that in termination cases that the employer bears the burden of proving that the dismissal of the employee is for a just or an authorized cause. Failure to dispose of the burden would imply that the dismissal is not lawful, and that the employee is entitled to reinstatement, back wages and accruing benefits. Moreover, dismissed employees are not required to prove their innocence of the employers accusations against them. Under Article 282 of the Labor Code, loss of confidence must be based on "fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative." Ordinary breach does not suffice. A breach of trust is willful if it is done intentionally and knowingly without any justifiable excuse, respondent was

as distinguished from an act done carelessly, thoughtlessly or inadvertently. In the present case, petitioner invokes loss of trust and confidence as the ground for dismissing respondent. The allegations of petitioner are unsupported by substantial evidence or by established facts. It was more than 7 years after respondent had been separated from the employ of petitioner when two of his former coemployees at CDCP (petitioners predecessor) -- Reynaldo Tac-an and Luciano Tadena -- went to see him at his home in Quezon City, carrying accomplished documents and a SPA. They informed him that the pieces of land in Bukidnon, including that which had been placed by petitioner in his name, were covered by CARP; and that he therefore had to sign the documents. Relying on their representations, he did as he had been told. Petitioner has not at any time denied or repudiated the acts of Tac-an and Tadena. Thus, private respondent cannot be faulted for presuming that both employees were acting on its behalf. Furthermore, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. In order to constitute a just cause for dismissal, the act complained of must be so related to the performance of the duties of the dismissed employee as would show that he or she is unfit to continue working for the employer. Undeniably,

the position of project controller -- the position of respondent at the time of his dismissal -- required trust and confidence, for it related to the handling of business expenditures or finances. However, his act allegedly constituting breach of trust and confidence was not in any way related to his official functions and responsibilities as controller. In fact, the questioned act pertained to an unlawful scheme deliberately engaged in by petitioner in order to evade a constitutional and legal mandate. Petition is denied. CARMELITA NOKOM vs. NLRC and RENTOKIL (PHILS.) G.R. No. 140043. July 18, 2000 DE LEON Facts: Petitioner Nokom was employed as a manager by private respondent Rentokil (Phils.) for its Healthcare Division. As manager, she was responsible for managing the Healthcare Division in accordance with the policies of Rentokil and she reported directly to the General Manager, Framie Ong-dela Luna. Private respondents Paul Stern and Russel Harris, Rentokils Area Director and Regional Finance Controller, respectively, received information that fictitious invoices were sent to Rentokil clients in the Healthcare Division whose contracts have already been terminated. The fictitious invoices were allegedly made to inflate the gross revenues of the Healthcare Division to make up for the shortfall in its target

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revenues for the year 1995. Because initial findings showed that petitioner Nokom, as Manager of the Healthcare Division, was involved in the anomaly, private respondents placed her on preventive suspension. Later on, it was found out that petitioner knew of the fraudulent activities which, as discovered by the new Finance Manager. Thereafter, Stern informed petitioner of the findings of their auditor. Petitioner admitted the irregularities and, in her written explanation as required under the notice of preventive suspension, petitioner told Stern that she had no explanation and said that she was leaving her fate up to management. During the hearing conducted by Rentokil management, petitioner failed to appear despite notice. After the investigation, it was found out that petitioner was aware, tolerated and in fact participated in the production of fictitious invoices. Thus, petitioners employment was terminated. NLRC dismissed the complaint for illegal dismissal for being without merit. Issue: WON dismissed. Ruling: In a decided case, it has been held that the guidelines for the application of the doctrine of loss of confidence are: a..loss of confidence should not be simulated; b.. it should not be used as a subterfuge for causes which are improper, illegal or unjustified; c. it may not be arbitrarily asserted in the face of overwhelming evidence to the Nokom was illegally

contrary; and d..it must be genuine, not a mere afterthought to justify earlier action taken in bad faith. In the case at bench, petitioner was holding a managerial position with Rentokil. As manager of the Healthcare Division, petitioner was duty-bound to perform her functions in accordance with company policies. During her incumbency, fraudulent activities transpired for which she must be held accountable. Petitioner has not presented any persuasive evidence or argument to convince us otherwise. True it is that an employer enjoys a wide latitude of discretion in the promulgation of company rules and regulations that at times become the root of abuse by management. In this case, however, the policies of private respondent Rentokil are fair and reasonable, the decision to terminate the employment of petitioner was justified and appropriate in the light of the acts committed by her, and considering that the requirements of the constitutional right to due process were duly accorded to petitioner. Petition is denied. b.iii. AUTHORIZED CAUSES 1. Installation of Labor-Saving Devices; The installation of labor-saving devices must be to effect economy and efficiency 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 justifiable economic reasons;

3. no other option available to the employer; 4. reasonable and fair standards or criteria in selecting who to terminate; 5. compliance with the 30-day notice requirement; and 6. payment of separation pay. 2. Redundancy; Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise; a position is redundant when it is superfluous. Requisites for validity: 1. written notice on both the affected employees and DOLE; 2. payment of separation pay equivalent to at least 1 month pay or to at least month pay for every year of service, whichever is higher; 3. good faith in abolishing the redundant positions; and 4. fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly. 3. Retrenchment Retrenchment- it is an act of the employer of dismissing employees because of losses in the operation of a business lack of work and considerable reduction 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;

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