Serrano v. NLRC Tags: constitutional law, constitutional law 2, digest, due process, nlrc, serrano, serrano v.

NLRC SERRANO V. NATIONAL LABOR RELATIONS COMMISSION AND ISETANN DEPARTMENT STORE 27 January 2000 | Mendoza | Special civil action in the SC, Certiorari FACTS Ruben Serrano was hired by Isetann Dept. Store as a security checker 1984 Contractual; 1985 Regular; 1988 Head of Security Checkers In 1991, as a cost-cutting measure, Isetann decided to phase out the entire security section andengage the services of an independent security agency. Isetann sent a memo to Serrano on 11 Oct 1991, reiterating their verbal notice of termination effective on the same day. Serrano filed a complaint on 3 Dec 1991 for illegal dismissal, illegal layoff, unfair labor practice, underpayment of wages, nonpayment of salary and overtime pay

Labor Arbiter held that Serrano was illegally dismissed Failed to establish that the cause of retrenchment is to minimize losses Did not accord due process to Serrano Did not use reasonable standards in selecting employees to be terminated Did not show employees inefficiency so as to justify their replacement The day after Serranos dismissal, Isetann hired another person as a safety and security supervisor Isetann ordered to pay backwages, reinstatement, unpaid wages, 13th month pay, attorneys fees NLRC reversed Labor Arbiters decision upon Isetanns appeal Phase-out of security section, hiring of agency is a legitimate business decision Labor Arbiters distinction between retrenchment and employment of cost-saving devices insignificant Reasonable criteria does not apply because the entire Security Section was abolished No bad faith in appointing a supervisor because it was separate from Serranos position as Security Checkers head Isetann ordered to give separation pay, unpaid salary, 13th month pay Serranos MfR denied ISSUE AND HOLDING WON the abolition of the Security Checkers section and the employment of an independent security agency falls under any of the authorized causes for dismissal under Article 283 of the Labor Code - YES, authorized cause is redundancy; Serrano should be given separation pay at the rate of one-month pay for every year of service (Art. 283) DISCUSSION

Art. 283 provides that one month before intended date, written notice must be served on the workersand DOLE Authorized causes under Art. 283 (Closure of establishment and reduction of personnel) Installation of labor-saving devices Separation pay at the rate of at least one-month pay oroneRedundancy month pay for every year of service (whichever is higher) Retrenchment to prevent losses Separation pay at the rate of at least one-month pay or halfClosing or cessation of operations month pay for every year of service (whichever is higher) Absent proof that management acted in a malicious or arbitrary manner, the Court will not interfere with the employers exercise of judgment. That the phase-out constituted a legitimate business decision is a factual finding of NLRC. History of policies When there is just cause but no due process (requirements of notice and opportunity to be heard) Before: Dismissal is illegal The shift took place in Wenphil Corp. v. NLRC Highly prejudicial to the employers interests to reinstate an employee who has been shown to be guilty of the charges that warranted his dismissal Dismissal must be for just or authorized cause and after due process Now: Dismissal shall be upheld but the employer must be sanctioned for non-compliance with the requirements of, or for failure to observe, due process (Sebuguero v. NLRC) Fines imposed range from P1,000 to P10,000 Reexamining Wenphil doctrine J. Panganiban Monetary sanctions are too insignificant, niggardly, late J. Puno Dismiss now, pay later policy convenient for moneyed employers In their opinion, such dismissal is void and employee should be reinstated and paid backwages Remedy pay full backwages from dismissal until determination that dismissal was for a just cause BUT STILL, dismissal must be upheld Why violation of the notice requirement cannot be considered a denial of due process resulting in the nullity of dismissal Due process clause is a limitation on governmental powers and DOES NOT APPLY to the exercise ofprivate power a. Only the state has authority to take life, liberty, property b. Purpose of clause is to ensure that the exercise of this power is consistent with civilized methods Notice and hearing are required under the due process clause before the power of the organized society is brought to bear upon the individual a. This is NOT the case of termination of employee no adversary system here (there is no charge

against the employee) b. Purpose of 30-day written notice is to give employee time to prepare for the eventual job loss, and for DOLE to determine WON economic causes exist to justify his termination c. Even in cases of dismissal under Article 282[1], purpose of notice and hearing is NOT to comply with the due process clause in the Constitution; Compliance with notice requirement does not foreclose right of employee to question the legality of his dismissal d. History of related laws 1. Art. 302 of Spanish Code of Commerce employee/employer can terminate relationship by giving one month notice; in lieu of notice, mesada (one month pay) could be given to employee 2. 3. NCC 2270 repealed Art. 302 of Spanish Code of Commerce RA 1052 (Termination Pay Law) revived mesada

4. RA 1787 amended RA 1052 by providing for giving of advance notice or payment of compensation (1/2 month per year of service) 5. Rules implementing BP 130, RA 6715 (amending NCC 277(b) notice required even when the dismissal was for cause Employer CANNOT be expected to be an impartial judge of his own cause Also the case for termination for a just cause under Article 282 J. Puno disputes this as he says that many cases have been won by employees before grievance committees manned by impartial judges of the company Grievance machinery is DIFFERENT established by agreement of employer, employees and is composed of representatives from both sides If the violation of the notice requirement is not a denial of due process, what is it? Mere failure to observe a procedure for the termination of employment, which makes the termination merely ineffectual What makes a dismissal of an Only the absence of a just cause for termination as provided in Article 279 Basis Art. 283 Art. 283 Art. 282 Authorized cause P P Notice Reinstate P Kind of pay Separation pay, backwages Backwages Backwages from termination until it is determined that there is just cause employee illegal?

DISPOSITIVE PORTION Petition granted. NLRC resolution modified. Isetann is ordered to: Pay separation pay equivalent to one month pay per year of service Unpaid salary Proportionate 13th month pay Full backwages from termination until this decision becomes final Case remanded to Labor Arbiter to determine computation of monetary awards to Serrano.

OPINIONS [2] Separate Opinion Bellosillo Prefers to call indemnity or penalty as disturbance compensation Proposes that amount of the award be uniform and rational and not arbitrary Dissenting Opinion Puno Wenphil did not change ruling that violation of the pre-dismissal notice requirement is an infringement of due process Submits a return to the pre-Wenphil rule where a reasonless violation of the notice requirement makes the dismissal illegal and results in the employees reinstatement One undesirable effect of Wenphil is to compel employees to seek relief against illegal dismissals with DOLE (whereas before, a remedy can be sought before the employer) and oftentimes, they do not know why they were dismissed in the first place Dilution of the rule has been abused by employers who followed the dismiss now, pay later strategy An employee under Article 283 has a stronger claim to the right to a pre-dismissal notice and hearing (rather than post facto dismissal hearing) Disagrees with majority opinion that due process requirement does not apply to the exercise of private power; private due process is a settled norm in administrative law Separate Opinion Vitug A just or authorized cause and a written notice are required concurrently but not equipollent in their consequence in terminating an employer-employee relationship Where there is no just or authorized cause, reinstatement and payment of backwages would be proper. Damages might also be awarded if dismissal is attended by bad faith of employer. Separation pay can substitute for reinstatement if such reinstatement is not feasible. Employer must be made to pay corresponding damages for failure to comply with notice requirement Separate Opinion Panganiban Notice requirement finds basis not only in the Labor Code but also in the due process clause of the Constitution When the employee is dismissed without due process, he is illegally dismissed. He is entitled to backwages and reinstatement. The Labor Code grants the dismissed employee the right to be notified as well as the right to be heard.

[1] Causes under Article 282 are (1) serious misconduct or willful disobedience, (2) gross and habitual neglect of duties, (3) fraud or breach of trust, (4) commission of crime against employer or immediate family member or authorized representatives, and (5) other analogous causes. [2] For this part, I will only take note of discussions different from what has been presented in the majority opinion. AGABON vs. NLRC November 17, 2004

Facts: Virgilio and Jenny Agabon were cornice installers of Riviera Home Improvements, a company engaged in the business of selling ornamental construction materials. They were employed from January 2, 1992 until February 23, 1999, when they were dismissed for abandonment of work. The Agabons filed a complaint for illegal dismissal before the LA, who ruled in their favor. The NLRC reversed on appeal. The CA sustained the NLRCs decision. The Agabons further appealed to the SC, disputing the finding of abandonment, and claiming that the company did not comply with the twin requirements of notice and hearing. Issue: WON the Agabons were illegally dismissed. Held: NO. Substantive due process (EEs must be dismissed for just or authorized cause): SC upheld the finding of abandonment, because the act of the Agabons in seeking employment elsewhere clearly showed a deliberate intent to sever the ER-EE relationship. Procedural due process (for just cause, there must be a written notice informing him of grounds for termination, a hearing or opportunity to be heard, and a final notice of termination stating the grounds therefor): There was no due process because ER did not send the requisite notices to the last known address of the EEs. ER only gave a flimsy excuse that the notice would be useless because the EEs no longer lived there. This is not a valid excuse, they should have still sent a notice as mandated by law. For not sending the requisite notices, the ER should be held liable for non-compliance with the procedural requirements of due process.

[G.R. No. 162994. September 17, 2004]

DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON, petitioners, vs. GLAXO WELLCOME PHILIPPINES, INC. respondent. RESOLUTION TINGA, J.: Confronting the Court in this petition is a novel question, with constitutional overtones, involving the validity of the policy of a pharmaceutical company prohibiting its employees from marrying employees of any competitor company. This is a Petition for Review on Certiorari assailing the Decision[1] dated May 19, 2003 and the Resolution dated March 26, 2004 of the Court of Appeals in CA-G.R. SP No. 62434.[2] Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome Philippines, Inc. (Glaxo) as medical representative on October 24, 1995, after Tecson had undergone training and orientation. Thereafter, Tecson signed a contract of employment which stipulates, among others, that he agrees to study and abide by existing company rules; to disclose to management any existing or future relationship by consanguinity or affinity with co-employees or employees of competing drug companies

and should management find that such relationship poses a possible conflict of interest, to resign from the company. The Employee Code of Conduct of Glaxo similarly provides that an employee is expected to inform management of any existing or future relationship by consanguinity or affinity with co-employees or employees of competing drug companies. If management perceives a conflict of interest or a potential conflict between such relationship and the employees employment with the company, the management and the employee will explore the possibility of a transfer to another department in a non-counterchecking position or preparation for employment outside the company after six months. Tecson was initially assigned to market Glaxos products in the Camarines Sur -Camarines Norte sales area. Subsequently, Tecson entered into a romantic relationship with Bettsy, an employee of Astra Pharmaceuticals[3] (Astra), a competitor of Glaxo. Bettsy was Astras Branch Coordinator in Albay. She supervised the district managers and medical representatives of her company and prepared marketing strategies for Astra in that area. Even before they got married, Tecson received several reminders from his District Manager regarding the conflict of interest which his relationship with Bettsy might engender. Still, love prevailed, and Tecson married Bettsy in September 1998. In January 1999, Tecsons superiors informed him that his marriage to Bettsy gave rise to a conflict of interest. Tecsons superiors reminded him that he and Bettsy should decide which one of them would resign from their jobs, although they told him that they wanted to retain him as much as possible because he was performing his job well. Tecson requested for time to comply with the company policy against entering into a relationship with an employee of a competitor company. He explained that Astra, Bettsys employer, was planning to merge with Zeneca, another drug company; and Bettsy was planning to avail of the redundancy package to be offered by Astra. With Bettsys separation from her company, the potential conflict of interest would be eliminated. At the same time, they would be able to avail of the attractive redundancy package from Astra. In August 1999, Tecson again requested for more time resolve the problem. In September 1999, Tecson applied for a transfer in Glaxos milk division, thinking that since Astra did not have a milk division, the potential conflict of interest would be eliminated. His application was denied in view of Glaxos least-movement-possible policy. In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales area. Tecson asked Glaxo to reconsider its decision, but his request was denied. Tecson sought Glaxos reconsideration regarding his transfer and brought the matter to Glaxos Grievance Committee. Glaxo, however, remained firm in its decision and gave Tescon until February 7, 2000 to comply with the transfer order. Tecson defied the transfer order and continued acting as medical representative in the Camarines Sur-Camarines Norte sales area. During the pendency of the grievance proceedings, Tecson was paid his salary, but was not issued samples of products which were competing with similar products manufactured by Astra. He was also not included in product conferences regarding such products. Because the parties failed to resolve the issue at the grievance machinery level, they submitted the matter for voluntary arbitration. Glaxo offered Tecson a separation pay of one-half () month pay for

every year of service, or a total of P50,000.00 but he declined the offer. On November 15, 2000, the National Conciliation and Mediation Board (NCMB) rendered its Decision declaring as valid Glaxos policy on relationships between its employees and persons employed with competitor companies, and affirming Glaxos right to transfer Tecson to another sales territory. Aggrieved, Tecson filed a Petition for Review with the Court of Appeals assailing the NCMB Decision. On May 19, 2003, the Court of Appeals promulgated its Decision denying the Petition for Review on the ground that the NCMB did not err in rendering its Decision. The appellate court held that Glaxos policy prohibiting its employees from having personal relationships with employees of competitor companies is a valid exercise of its management prerogatives. [4] Tecson filed a Motion for Reconsideration of the appellate courts Decision, but the motion was denied by the appellate court in itsResolution dated March 26, 2004.[5] Petitioners filed the instant petition, arguing therein that (i) the Court of Appeals erred in affirming the NCMBs finding that the Glaxos policy prohibiting its employees from marrying an employee of a competitor company is valid; and (ii) the Court of Appeals also erred in not finding that Tecson was constructively dismissed when he was transferred to a new sales territory, and deprived of the opportunity to attend products seminars and training sessions. [6] Petitioners contend that Glaxos policy against employees marrying employees of competitor companies violates the equal protection clause of the Constitution because it creates invalid distinctions among employees on account only of marriage. They claim that the policy restricts the employees right to marry.[7] They also argue that Tecson was constructively dismissed as shown by the following circumstances: (1) he was transferred from the Camarines Sur-Camarines Norte sales area to the Butuan-SurigaoAgusan sales area, (2) he suffered a diminution in pay, (3) he was excluded from attending seminars and training sessions for medical representatives, and (4) he was prohibited from promoting respondents products which were competing with Astras products.[8] In its Comment on the petition, Glaxo argues that the company policy prohibiting its employees from having a relationship with and/or marrying an employee of a competitor company is a valid exercise of its management prerogatives and does not violate the equal protection clause; and that Tecsons reassignment from the Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao City and Agusan del Sur sales area does not amount to constructive dismissal. [9] Glaxo insists that as a company engaged in the promotion and sale of pharmaceutical products, it has a genuine interest in ensuring that its employees avoid any activity, relationship or interest that may conflict with their responsibilities to the company. Thus, it expects its employees to avoid having personal or family interests in any competitor company which may influence their actions and decisions and consequently deprive Glaxo of legitimate profits. The policy is also aimed at preventing a competitor company from gaining access to its secrets, procedures and policies. [10] It likewise asserts that the policy does not prohibit marriage per se but only proscribes existing or future relationships with employees of competitor companies, and is therefore not violative of the equal protection clause. It maintains that considering the nature of its business, the prohibition is based on valid grounds.[11] According to Glaxo, Tecsons marriage to Bettsy, an employee of Astra, posed a real and potential conflict of interest. Astras products were in direct competition with 67% of the products sold by

Glaxo. Hence, Glaxos enforcement of the foregoing policy in Tecsons case was a valid exercise of its management prerogatives.[12] In any case, Tecson was given several months to remedy the situation, and was even encouraged not to resign but to ask his wife to resign from Astra instead. [13] Glaxo also points out that Tecson can no longer question the assailed company policy because when he signed his contract of employment, he was aware that such policy was stipulated therein. In said contract, he also agreed to resign from respondent if the management finds that his relationship with an employee of a competitor company would be detrimental to the interests of Glaxo. [14] Glaxo likewise insists that Tecsons reassignment to another sales area and his exclusion from seminars regarding respondents new products did not amount to constructive dismissal. It claims that in view of Tecsons refusal to resign, he was rel ocated from the Camarines SurCamarines Norte sales area to the Butuan City-Surigao City and Agusan del Sur sales area. Glaxo asserts that in effecting the reassignment, it also considered the welfare of Tecsons family. Since Tecsons hometown was in Agusan del Sur and his wife traces her roots to Butuan City, Glaxo assumed that his transfer from the Bicol region to the Butuan City sales area would be favorable to him and his family as he would be relocating to a familiar territory and minimizing his travel expenses.[15] In addition, Glaxo avers that Tecsons exclusion from the seminar concerning the new anti -asthma drug was due to the fact that said product was in direct competition with a drug which was soon to be sold by Astra, and hence, would pose a potential conflict of interest for him. Lastly, the delay in Tecsons receipt of his sales paraphernalia was due to the mix-up created by his refusal to transfer to the Butuan City sales area (his paraphernalia was delivered to his new sales area instead of Naga City because the supplier thought he already transferred to Butuan).[16] The Court is tasked to resolve the following issues: (1) Whether the Court of Appeals erred in ruling that Glaxos policy against its employees marrying employees from competitor companies is valid, and in not holding that said policy violates the equal protection clause of the Constitution; (2) Whether Tecson was constructively dismissed. The Court finds no merit in the petition. The stipulation in Tecsons contract of employment with Glaxo being questioned by petitioners provides: 10. You agree to disclose to management any existing or future relationship you may have, either by consanguinity or affinity with co-employees or employees of competing drug companies. Should it pose a possible conflict of interest in management discretion, you agree to resign voluntarily from the Company as a matter of Company policy. [17] The same contract also stipulates that Tecson agrees to abide by the existing company rules of Glaxo, and to study and become acquainted with such policies. [18] In this regard, the Employee Handbook of Glaxo expressly informs its employees of its rules regarding conflict of interest: 1. Conflict of Interest

Employees should avoid any activity, investment relationship, or interest that may run counter to the responsibilities which they owe Glaxo Wellcome. Specifically, this means that employees are expected: a. To avoid having personal or family interest, financial or otherwise, in any competitor supplier or other businesses which may consciously or unconsciously influence their actions or decisions and thus deprive Glaxo Wellcome of legitimate profit. b. To refrain from using their position in Glaxo Wellcome or knowledge of Company plans to advance their outside personal interests, that of their relatives, friends and other businesses. c. To avoid outside employment or other interests for income which would impair their effective job performance. d. To consult with Management on such activities or relationships that may lead to conflict of interest. 1.1. Employee Relationships Employees with existing or future relationships either by consanguinity or affinity with co-employees of competing drug companies are expected to disclose such relationship to the Management. If management perceives a conflict or potential conflict of interest, every effort shall be made, together by management and the employee, to arrive at a solution within six (6) months, either by transfer to another department in a non-counter checking position, or by career preparation toward outside employment after Glaxo Wellcome. Employees must be prepared for possible resignation within six (6) months, if no other solution is feasible.[19] No reversible error can be ascribed to the Court of Appeals when it ruled that Glaxos policy prohibiting an employee from having a relationship with an employee of a competitor company is a valid exercise of management prerogative. Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors, especially so that it and Astra are rival companies in the highly competitive pharmaceutical industry. The prohibition against personal or marital relationships with employees of competitor companies upon Glaxos employees is reasonable under the circumstances because relationships of that nature might compromise the interests of the company. In laying down the assailed company policy, Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures. That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to expansion and growth. [20] Indeed, while our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play.[21]

As held in a Georgia, U.S.A case,[22] it is a legitimate business practice to guard business confidentiality and protect a competitive position by even-handedly disqualifying from jobs male and female applicants or employees who are married to a competitor. Consequently, the court ruled than an employer that discharged an employee who was married to an employee of an active competitor did not violate Title VII of the Civil Rights Act of 1964. [23] The Court pointed out that the policy was applied to men and women equally, and noted that the employers business was highly competitive and that gaining inside information would constitute a competitive advantage. The challenged company policy does not violate the equal protection clause of the Constitution as petitioners erroneously suggest. It is a settled principle that the commands of the equal protection clause are addressed only to the state or those acting under color of its authority. [24]Corollarily, it has been held in a long array of U.S. Supreme Court decisions that the equal protection clause erects no shield against merely private conduct, however, discriminatory or wrongful.[25] The only exception occurs when the state[26] in any of its manifestations or actions has been found to have become entwined or involved in the wrongful private conduct.[27] Obviously, however, the exception is not present in this case. Significantly, the company actually enforced the policy after repeated requests to the employee to comply with the policy. Indeed, the application of the policy was made in an impartial and even-handed manner, with due regard for the lot of the employee. In any event, from the wordings of the contractual provision and the policy in its employee handbook, it is clear that Glaxo does not impose an absolute prohibition against relationships between its employees and those of competitor companies. Its employees are free to cultivate relationships with and marry persons of their own choosing. What the company merely seeks to avoid is a conflict of interest between the employee and the company that may arise out of such relationships. As succinctly explained by the appellate court, thus: The policy being questioned is not a policy against marriage. An employee of the company remains free to marry anyone of his or her choosing. The policy is not aimed at restricting a personal prerogative that belongs only to the individual. However, an employees personal decision does not detract the employer from exercising management prerogatives to ensure maximum profit and business success. . . [28] The Court of Appeals also correctly noted that the assailed company policy which forms part of respondents Employee Code of Conduct and of its contracts with its employees, such as that signed by Tecson, was made known to him prior to his employment. Tecson, therefore, was aware of that restriction when he signed his employment contract and when he entered into a relationship with Bettsy. Since Tecson knowingly and voluntarily entered into a contract of employment with Glaxo, the stipulations therein have the force of law between them and, thus, should be complied with in good faith.[29] He is therefore estopped from questioning said policy. The Court finds no merit in petitioners contention that Tecson was constructively dismissed when he was transferred from the Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao CityAgusan del Sur sales area, and when he was excluded from attending the companys seminar on new products which were directly competing with similar products manufactured by Astra. Constructive dismissal is defined as a quitting, an involuntary resignation resorted to when continued employment becomes impossible, unreasonable, or unlikely; when there is a demotion in rank or diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.[30] None of these conditions are present in the instant case. The record does not show that Tecson was demoted or unduly discriminated upon by reason of such transfer. As found by the

appellate court, Glaxo properly exercised its management prerogative in reassigning Tecson to the Butuan City sales area: . . . In this case, petitioners transfer to another place of assignment was merely in keepin g with the policy of the company in avoidance of conflict of interest, and thus validNote that [Tecsons] wife holds a sensitive supervisory position as Branch Coordinator in her employer-company which requires her to work in close coordination with District Managers and Medical Representatives. Her duties include monitoring sales of Astra products, conducting sales drives, establishing and furthering relationship with customers, collection, monitoring and managing Astras inventoryshe therefore takes an active participation in the market war characterized as it is by stiff competition among pharmaceutical companies. Moreover, and this is significant, petitioners sales territory covers Camarines Sur and Camarines Norte while his wife is supervising a branch of her employer in Albay. The proximity of their areas of responsibility, all in the same Bicol Region, renders the conflict of interest not only possible, but actual, as learning by one spouse of the others market strategies in the region would be inevitable. [Managements] appreciation of a conflict of interest is therefore not merely illusory and wanting in factual basis[31] In Abbott Laboratories (Phils.), Inc. v. National Labor Relations Commission,[32] which involved a complaint filed by a medical representative against his employer drug company for illegal dismissal for allegedly terminating his employment when he refused to accept his reassignment to a new area, the Court upheld the right of the drug company to transfer or reassign its employee in accordance with its operational demands and requirements. The ruling of the Court therein, quoted hereunder, also finds application in the instant case: By the very nature of his employment, a drug salesman or medical representative is expected to travel. He should anticipate reassignment according to the demands of their business. It would be a poor drug corporation which cannot even assign its representatives or detail men to new markets calling for opening or expansion or to areas where the need for pushing its products is great. More so if such reassignments are part of the employment contract.[33] As noted earlier, the challenged policy has been implemented by Glaxo impartially and disinterestedly for a long period of time. In the case at bar, the record shows that Glaxo gave Tecson several chances to eliminate the conflict of interest brought about by his relationship with Bettsy. When their relationship was still in its initial stage, Tecsons super visors at Glaxo constantly reminded him about its effects on his employment with the company and on the companys interests. After Tecson married Bettsy, Glaxo gave him time to resolve the conflict by either resigning from the company or asking his wife to resign from Astra. Glaxo even expressed its desire to retain Tecson in its employ because of his satisfactory performance and suggested that he ask Bettsy to resign from her company instead. Glaxo likewise acceded to his repeated requests for more time to resolve the conflict of interest. When the problem could not be resolved after several years of waiting, Glaxo was constrained to reassign Tecson to a sales area different from that handled by his wife for Astra. Notably, the Court did not terminate Tecson from employment but only reassigned him to another area where his home province, Agusan del Sur, was included. In effecting Tecsons transfer, Glaxo even considered the welfare of Tecsons family. Clearly, the foregoing dispels any suspicion of unfairness and bad faith on the part of Glaxo.[34] WHEREFORE, the Petition is DENIED for lack of merit. Costs against petitioners

Yrasuegui v. PALG.R. no. 168081. Oct. 17, 2008Facts: Petitioner Yrasuegui, an international flight steward of Philippine Airlines Inc. (PAL) wasdismissed because of his failure to adhere to the weight standards of the airline company.In consequence thereof, petitioner filed a complaint for illegal dismissal against PAL before theLabor Arbiter (LA). Te Labor Arbiter ruled that the petitioner was illegally dismissed. It also issued a writof execution directing the reinstatement of the petitioner without loss of seniority and other benefits, andalso the payment of backwages. Respondent PAL appealed to the NLRC which affirmed the LAsdecision. Respondent PAL appealed to the Court of Appeals. CA reversed the NLRC case. Issue: Was the dismissal of the petitioner valid? Held: Yes. The Court upheld the legality of the petitioners dismissal. Separation pay, however, should beawarded in favor of the employee as an act of social justice or based on equity. This is so because hisdismissal is not serious misconduct. Neither is it reflective of his moral character.The obesity of petitioner, when placed in the context of his work as flight attendant, becomes ananalogous cause under Article 282 (e) of the Labor ode. His obesity may not be unintended, but isnonetheless voluntary. Voluntariness basically means that the just cause is solely attributable to theemployee without any external force influencing or controlling his actions. This element runs through all just causes under Art. 282, whether they be in nature of a wrongful action or omission. Gross and habitualneglect, a recognized just cause, is considered voluntary although it lacks the element of intent found inArt. 282 (a), (c), and (d).Employment in particular jobs may not be limited to persons of a particular sex, religion, or national origin unless the employer can show that sex, religion, or national origin is an actual qualificationfor performing the job. The qualification is called a bona fide occupational qualification (BFOQ). [55] Inthe United States, there are a few federal and many state job discrimination laws that contain an exceptionallowing an employer to engage in an otherwise unlawful form of prohibited discrimination when theaction is based on a BFOQ necessary to the normal operation of a business or enterprise. Argument that BFQQ is a statutory defense must fail. Petitioner contends that BFOQ is a statutory defense. It does not exist if there is no statute providing for it. ] Further, there is no existing BFOQ statute that could justify his dismissal.First, the Constitution, the Labor Code, and RA No. 7277 or the Magna Carta for DisabledPersons contain provisions similar to BFOQ.Second, in British Columbia Public Service Employee Commission (BSPSERC) v. The BritishColumbia Government and Service Employees Union (BCGSEU) , the Supreme Court of Canada adoptedthe so-called Meiorin Test in determining whether an employment policy is justified. Under this test,(1) the employer must show that it adopted the standard for a purpose rationally connected to the performance of the job; (2) the employer must establish that the standard is reasonably necessary to theaccomplishment of that work-related purpose; and (3) the employer must establish that the standard isreasonably necessary in order to accomplish the legitimate work-related purpose. Similarly, in Star Paper

[G.R. No. 127553. November 28, 1997]

EDDIE MANUEL, ROMEO BANA, ROGELIO PAGTAMA, JR. and JOEL REA, petitioners, vs. N.C. CONSTRUCTION SUPPLY, JOHNNY

LIM, ANITA SY and NATIONAL LABOR COMMISSION (SECOND DIVISION), respondents. DECISION
PUNO, J.:

RELATIONS

This special civil action for certiorari seeks to review the decision of the National Labor Relations Commission (NLRC) dated June 27, 1996 in NLRCNCR-00-07-04925-95 entitled Eddie Manuel, Romeo Bana, Rogelio Patama, Jr. and Joel Rea v. N.C. Construction Supply, Johnny Lim and Anita Sy.
[1]

Petitioners Eddie Manuel, Romeo Bana, Rogelio Pagtama, Jr. and Joel Rea were employed as drivers at N.C. Construction Supply owned by private respondents Johnny Lim (a.k.a. Lao Ching Eng) and Anita Sy. On June 3, 1995, the security guards of respondent company caught Aurelio Guevara, a company driver, and Jay Calso, his helper ("pahinante"), taking out from the company premises two rolls of electrical wire worth P500.00 without authority. Calso was brought to the Pasig Police station for questioning. During the investigation, Calso named seven other employees who were allegedly involved in a series of thefts at respondent company, among them petitioners Manuel, Bana, Pagtama, Jr. and Rea.
[2]

On June 5, 1995, petitioners received separate notices from respondent company informing them that they were positively identified by their coworker, Jay Calso, as perpetrators of the series of thefts committed at respondent company. They were thus invited to the Pasig police station for investigation regarding their alleged involvement in the offense. Atty. Ramon Reyes, private respondents' counsel conducted in their behalf an investigation regarding petitioners' involvement in the theft. Atty. Reyes interrogated the petitioners on their alleged participation in the series of thefts committed at respondent company. Petitioners initially denied the charge. However, after being positively identified by Jay Calso, petitioners admitted their guilt and offered to resign in exchange for the withdrawal of any criminal charge against them. Petitioners Bana and Rea filed separate resignation letters while petitioners Manuel and Pagtama, Jr. tendered their resignations orally. Petitioner Bana's resignation letter reads:
[3] [4]

Hunyo 6, 1995 Dear Bong,

Sa ganitong sitwasyon nagpapasalamat rin ako na humantong sa ganito para hindi na tumagal ang masama naming gawain. Piro lubos rin ako nagpapasalamat sa iyong pagpapatawad sa akin, at ang masasabi ko lang na I'm very, very sorry na lang. Kasi alam mo naman na kapos na kapos talaga ako. Kaya alam mo halos hindi na nga ako nag-a-absent dahil sa sahod ko lang kapos pa sa pamilya ko. Kaya sana sa pag-resign ko sana mabigyan mo man lang ako nang kaunti para makapamasahi man lang pau-wi sa Mindanao kasama ang mga anak ko. Yon lang . . . Gumagalang, Boy Petitioner Rea's resignation letter, on the other hand, states:
[5]

Hunyo 6, 1995 Boss, Dahil sa hindi maganda ang aking naging performance sa inyo sa loob ng NC Construction Supply sa nakakahiya na aking nasangkutan magreresign na ho ako, magsisimula Hunyo 6, 1995. Siguro naman Boss alam naman ninyo ang totoo nakikisama lang ako sa mga dati ninyong tauhan dahil kailangan ko talaga ng trabaho kahit labag man sa aking kalooban ang gumawa ng hindi maganda. Boss, kahit paano sana maintindihan mo ako, tatanggalin nyo na ho ako sana bigyan nyo na lang ako ng kahit pamasahe namin pauwing probinsya para makapagbagong buhay na ako. Salamat po. Sumasainyo, Joel Rea Atty. Reyes accepted petitioners' resignation effective June 5, 1995. On July 17, 1995, petitioners filed a complaint against private respondents for illegal dismissal. Petitioners alleged that they were not informed of the charge against them nor were they given an opportunity to dispute the same. They also alleged that their admission made at the Pasig police station regarding their involvement in the theft as well as their resignation were not voluntary but were obtained by private respondents' lawyer by means of threat and intimidation.

Labor Arbiter Manuel R. Caday ruled in favor of petitioners and found their dismissal to be illegal. He held that private respondents failed to show a just cause for the termination of petitioners' services. He declared that petitioners' admission regarding their involvement in the theft was inadmissible in evidence as it was taken without the assistance of counsel, in violation of Section 12 Article III of the 1987 Constitution. He also held that petitioners were not afforded due process before their services were terminated. Hence, Labor Arbiter Caday ordered private respondents to reinstate petitioners to their former position without loss of seniority rights and to pay them full backwages. He also ordered private respondents to pay petitioners their service incentive leave benefits plus attorney's fees.
[6] [7]

On appeal, the NLRC reversed the decision of the Labor Arbiter. It ruled that petitioners were dismissed for a just cause. It held that petitioners failed to adduce competent evidence to show a vitiation of their admission regarding their participation in the theft. It further stated that such admission may be admitted in evidence because Section 12 Article III of the 1987 Constitution applies only to criminal proceedings but not to administrative proceedings. The NLRC, however, agreed with the Labor Arbiter that petitioners were denied due process. Hence, it ordered private respondents to pay petitioners the amount of P1,000.00 as indemnity. The dispositive portion of the decision reads: WHEREFORE, premises duly considered, the decision appealed from is hereby reversed and set aside. A new one is hereby entered ordering respondents to pay to the complainants the amount of P1,000.00 each as and for indemnity for failure of the respondents to observe due process. SO ORDERED.
[8]

Petitioners filed the instant petition on the following grounds: 1. 2. The National Labor Relations Commission committed grave abuse of discretion in declaring the dismissal legal; The National Labor Relations Commission committed grave abuse of discretion in declaring that the admission of petitioners is admissible in evidence despite the fact that it was obtained in a hostile environment and without the presence or assistance of counsel; The National Labor Relations Commission committed grave abuse of discretion in finding that respondents N.C. Construction Supply et al. are

3.

right in withdrawing their trust and confidence with petitioners without any valid and legal basis.
[9]

We affirm the decision of the NLRC. An employer has a right to terminate the services of an employee subject to both substantive and procedural limitations. This means that (1) the dismissal must be for a just or authorized cause provided in the Labor Code, and (2) the employee must be accorded due process before his employment is terminated. The validity of the dismissal hinges on the employer's compliance with these two requirements.
[10] [11]

In the case at bar, petitioners who were employed as drivers at respondent company were found guilty of stealing company property consisting of electrical wire, welding rod, G.I. sheet, steel bar and plywood. Article 282 of the Labor Code authorizes an employer to terminate the services of an employee for loss of trust and confidence, provided that the loss of confidence arises from particular proven facts. The law does not require proof beyond reasonable doubt of the employee's misconduct. Substantial evidence is sufficient. Substantial evidence has been defined as such relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.
[12] [13]

Petitioners' culpability in the instant case was sufficiently proved by private respondents. Jay Calso, an employee of respondent company who has personal knowledge about the series of thefts that has been going on at respondent company, positively identified petitioners as among the perpetrators of the theft. Petitioners have not shown any ill motive on the part of Calso to implicate them in the offense, unless it was true. In addition, petitioners admitted their participation in the theft during an investigation conducted by private respondents' lawyer. We are not convinced by petitioners' allegation that such admission was obtained by means of threat or intimidation as such allegation is couched in general terms and is unsupported by evidence. We also reject petitioners' argument that said admission is inadmissible as evidence against them under Section 12 Article III of the 1987 Constitution. The right to counsel under Section 12 of the Bill of Rights is meant to protect a suspect in a criminal case under custodial investigation. Custodial investigation is the stage where the police investigation is no longer a general inquiry into an unsolved crime but has begun to focus on a particular suspect who had been taken into custody by the police to carry out a process of interrogation that lends itself to elicit incriminating statements. It is when

questions are initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way. The right to counsel attaches only upon the start of such investigation. Therefore, the exclusionary rule under paragraph (3) Section 12 of the Bill of Rights applies only to admissions made in a criminal investigation but not to those made in an administrative investigation.
[14]

In the case at bar, the admission was made by petitioners during the course of the investigation conducted by private respondents' counsel to determine whether there is sufficient ground to terminate their employment. Petitioners were not under custodial investigation as they were not yet accused by the police of committing a crime. The investigation was merely an administrative investigation conducted by the employer, not a criminal investigation. The questions were propounded by the employer's lawyer, not by police officers. The fact that the investigation was conducted at the police station did not necessarily put petitioners under custodial investigation as the venue of the investigation was merely incidental. Hence, the admissions made by petitioners during such investigation may be used as evidence to justify their dismissal. Private respondents, however, failed to observe due process in terminating the employment of petitioners. Due process demands that the employer should furnish the worker whose employment is sought to be terminated a written notice containing a statement of the cause(s) for termination and afford him ample opportunity to be heard and to defend himself with the assistance of a representative if he so desires. Specifically, the employer must furnish the worker with two written notices before termination of employment can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought, and (2) the subsequent notice which informs the employee of the employer's decision to dismiss him. There is no showing in this case that private respondents furnished petitioners with such notices. Private respondents, through their counsel, Atty. Reyes, immediately terminated petitioners' services upon conclusion of the investigation. Private respondents must therefore indemnify petitioners for failure to observe due process before dismissing them from work.
[15]

IN VIEW WHEREOF, the petition is DISMISSED. The assailed decision is hereby AFFIRMED. No costs. SO ORDERED
G.R. Nos. 170384-85 March 9, 2007

LORNA DISING PUNZAL, Petitioner, vs. ETSI TECHNOLOGIES, INC., WERNER GEISERT, and CARMELO D. REMUDARO, Respondents. DECISION CARPIO MORALES, J.: Petitioner, Lorna Dising Punzal, had been working for respondent, ETSI Technologies, Inc. (ETSI), for 12 years prior to the termination of her services on November 26, 2001 on which date she was holding the position of Department Secretary. On October 30, 2001, petitioner sent an electronic mail (e-mail) message to her officemates announcing the holding of a Halloween party that was to be held in the office the following day. The e-mail message read verbatim: Dear ETSI-JMT Colleagues, Good day! As you all know, tomorrow is the day before HALLOWEEN. And many of our kids will go around "TRICK OR TREATING". We will be dressing them up in costumes of all sorts, from cute to outrageous, from wild to "scary." What we want to have is a similar activity here in the office. So we invite you to participate in this effort. You can also dress your kids up in funny costumes. Also the kids will then go around the office Trick or Treating. So, we ask you to prepare your Treats, like candies, biscuits, cookies, etc., (Cash is also welcome for parents like me . . . he he he) Why are we doing this? Well, we just want the kids to have a good time. Kung gusto ninyo, magcostume din kayo. Alright! See you tomorrow morning, [October 31, 2001].1 (Underscoring supplied) Petitioners immediate superior, respondent Carmelo Remudaro (Remudaro), who was one of those to whom the e-mail message was sent, advised petitioner to first secure the approval of the Senior Vice President, respondent Werner Geisert (Geisert), for the holding of the party in the office. Petitioner soon learned that Geisert did not approve of the plan to hold a party in the office. She thereupon sent also on October 30, 2001 another e-mail message to her officemates, reading verbatim: Sorry for the mail that I sent you, unfortunately the SVP of ETSI Technologies, Inc. did not agree to our idea to bring our children in the office for the TRICK or TREATING. He was so unfairpara bang palagi siyang iniisahan sa trabahobakit most of the parents na mag-joined ang anak ay naka-VL naman. Anyway, solohin na lang niya bukas ang office. Anyway, to those parents who would like to bring their Kids in Megamall there will be Trick or Treating at Mc Donalds Megamall Bldg. A at 10:00 AM tomorrow and lets not spoil the fun for our kids.2 (Underscoring supplied)

Remudaro and Arnold Z. David (David), the Assistant Vice President of Human Resources/TQM of ETSI, later informed petitioner, by letter of November 13, 2001, that Geisert got a copy of her e-mail message and that he required her to explain in writing within 48 hours why she . . . should not be given disciplinary action for committing Article IV, No. 5 & 8 Improper conduct or acts of discourtesy or disrespect and Making malicious statements concerning Company Officer, whereby such offenses may be subject to suspension to termination depending upon the gravity of the offense/s as specified in our ETSIs Code of Conduct and Discipline.3 (Emphasis in the original) Petitioner replied by letter of November 14, 2001 that she had no malicious intention in sending the second e-mail message and that she "never expected such kind of words can be called as acts of discourtesy or disrespect." 4 On November 19, 2001, Geisert and Remudaro conferred with petitioner to give her a chance to explain her side.5 David and Remudaro subsequently sent petitioner a letter on November 26, 2001, finding her explanation "not acceptable" and terminating her services, effective immediately, "for committing Article IV, No[s]. 5 & 8, Improper conduct or act of discourtesy or disrespect and making malicious statements concerning company officer." 6 On February 11, 2002, petitioner filed before the National Labor Relations Commission (NLRC) a complaint7 for illegal dismissal against ETSI, Geisert, and Remudaro. By Order of November 26, 2002, the Labor Arbiter dismissed petitioners c omplaint, finding that she was legally dismissed for serious misconduct, and that she was afforded due process. 8 On petitioners appeal, the NLRC, by Resolution9 dated October 27, 2003, found that while she was indeed guilty of misconduct, the penalty of dismissal was disproportionate to her infraction. 10 The NLRC thus ordered that petitioner was entitled to reinstatement which, however, was no longer feasible due to strained relations. The NLRC thus ordered that petitioner be awarded separation pay equivalent to one month pay for every year of service, a period of at least six months to be considered one whole year.11 Noting that petitioner was not entirely faultless, the NLRC denied her prayer for backwages 12 as well as her prayer for exemplary and moral damages and attorneys fees in the absence of the legal conditions justifying their award.13 Both parties filed their respective motions for reconsideration14 which the NLRC denied.15 Both parties thereupon filed their respective petitions for certiorari 16 with the Court of Appeals. In the petition of petitioner, docketed as CA-G.R. SP No. 83296, she questioned the denial of her prayer for backwages.17 Upon the other hand, in the petition of respondent ETSI, et al., docketed as CA-G.R. SP No. 83205, they questioned the finding of illegal dismissal, the grant of separation pay, and the imputation of liability to Geisert and Remudaro.18 In her comment to the petition of ETSI, et al. in CA-G.R. SP No. 83205, petitioner raised the issue of due process, alleging that her employer did not inform her of her right to be assisted by counsel during the conference with respondents Geisert and Remudaro. 19

By Decision20 of May 13, 2005, the Court of Appeals, which priorly consolidated the petitions of both parties, held that petitioners dismissal was in order:21 The gravity of Punzals infraction is borne by the fact that her e-mail message to the workers of ETSI tended to cast scorn and disrespect toward a senior vice president of the company. The message itself resounds of subversion and undermines the authority and credibility of management. xxxx Also, this message was not a mere expression of dissatisfaction privately made by one person to another, but was circulated to everyone in the work area. The message was sent close at the heels of SVP Geiserts disapproval of Punzals plan to hold a Halloween affair in the office, because the said event would disrupt the operations and peace and order in the office. Punzal therefore displayed a tendency to act without managements approval, and even against managements will, as she invited her co-workers to join a trick or treating activity at another venue during office hours. The message also comes across as an encouragement to ignore SVP Geiserts authority, and portrayed him as unworthy of respect because of his unpopular personality. This is in clear violation of Article IV, Section 5 of the companys Code of Conduct and Discipline, which clearly imposes the penalty of "suspension to dismissal, depending upon the gravity of the offense" in cases where an employee displays "improper conduct or acts of discourtesy or disrespect to fellow employees, visitors, guests, clients, at any time." The imposition of the penalty of dismissal is proper, because of the gravity of Punzals misconduct, as earlier pointed out, and considering that: (1) Punzals statements were discourteous and disrespectful not only to a mere co employee, but to a high ranking executive official of the company; (2) Punzals statements tended to ridicule and undermine the credibility and authority of SVP Geisert, and even encouraged disobedience to the said officer; (3) Punzals message was sent to a great number of employees of ETSI, which tended to sow dissent and disrespect to management among a great number of employees of ETSI; (4) Punzals message could not have been made in good faith, because the message itself used language that placed SVP Geisert in ridicule and portrayed him as an object of scorn, betraying the senders bad faith. Given these circumstances, the fact that Punzals infraction occurred only once should be largely insignificant. The gravity and publicity of the offense as well as its adverse impact in the workplace is more than sufficient to place the same in the level of a serious misconduct.22 (Underscoring supplied) Contrary to petitioners contention, the Court of Appeals also found that due process was observed in her dismissal.23 The Court of Appeals thus reinstated the Labor Arbiters Order. Thus it disposed:

WHEREFORE, premises considered, the petition filed by Lorna Dising Punzal in CA-G.R. SP No. 83296 is hereby DISMISSED, while the petition filed by ETSI, Werner Geisert and Carmelo D. Remudaro is hereby GRANTED. The assailed Resolutions, dated October 27, 2003 and January 28, 2004, of the respondent National Labor Relations Commission are hereby SET ASIDE. In lieu thereof, the Decision of Labor Arbiter Joel S. Lustria, dated November 26, 2002, dismissing the complaint filed by Lorna Dising Punzal is hereby REINSTATED. SO ORDERED.24 (Underscoring supplied) Hence, petitioners present Petition for Review on Certiorari, 25 faulting the appellate court to have erred . . . WHEN IT RULED THAT PETITIONERS STATEMENT WAS DISCOURTEOUS AND DISRESPECTFUL CONSTITUTING GROSS DISRESPECT AND SERIOUS MISCONDUCT; . . . WHEN IT FOUND THAT DUE PROCESS WAS ACCORDED THE PETITIONER; . . . WHEN IT FAILED TO AWARD THE PETITIONER HER RIGHT TO REINSTATEMENT AND BACKWAGES.26 Petitioner posits that her second e-mail message was merely an exercise of her right to freedom of expression without any malice on her part.27 On the other hand, ETSI, et al. maintain that petitioners second e-mail message was tainted with bad faith and constituted a grave violation of the comp anys code of discipline.28 In Philippines Today, Inc. v. NLRC,29 this Court, passing on the attitude or respect that an employee is expected to observe towards an employer, held: Alegres choice of words and way of expression betray his allegation that the memorandum was simply an "opportunity to open the eyes of (Petitioner) Belmonte to the work environment in petitioners newspaper with the end in view of persuading (her) to take a hand at improving said environment." Apprising his employer (or top-level management) of his frustrations in his job and differences with his immediate superior is certainly not done in an abrasive, offensive, and disrespectful manner. A cordial or, at the very least, civil attitude, according due deference to ones superiors, is still observed, especially among high-ranking management officers. The Court takes judicial notice of the Filipino values of pakikisama and paggalang which are not only prevalent among members of a family and community but within organizations as well, including work sites. An employee is expected to extend due respect to management, the employer being the "proverbial hen that lays the golden egg," so to speak. An aggrieved employee who wants to unburden himself of his disappointments and frustrations in his job or relations with his immediate superior would normally approach said superior directly or otherwise ask some other officer possibly to mediate and discuss the problem with the end in view of settling their differences without causing ferocious conflicts. No matter how [much] the employee dislikes the employer professionally, and even if he is in a confrontational disposition, he cannot afford to be disrespectful and dare to talk with an unguarded tongue and/or with a bileful pen.30 (Underscoring supplied) A scrutiny of petitioners second e-mail message shows that her remarks were not merely an expression of her opinion about Geiserts decision; they were directed against Geisert himself, viz: "He was so unfair . . . para bang palagi siyang iniisahan sa trabaho. . . Anyway, solohin na lang niya bukas ang office." (Emphasis supplied) 31

As the Court of Appeals noted, petitioner, in her closing statement "Anyway, to those parents who would like to bring their Kids in Megamall there will be Trick or Treating at Mc Donalds x x x tomorrow and lets not spoil the fun for our kids" 32 even invited her co-workers to join a trick or treating activity at another venue during office hours33 (10:00 AM), October 31, 2001 being a Wednesday and there is no showing that it was declared a holiday, encouraging them to ignore Geiserts authority. Additionally, petitioner sent the e-mail message in reaction to Geiserts decision which he had all the right to make. That it has been a tradition in ETSI to celebrate occasions such as Christmas, birthdays, Halloween, and others34does not remove Geiserts prerogative to approve or disapprove plans to hold such celebrations in office premises and during company time. It is settled that x x x it is the prerogative of management to regulate, according to its discretion and judgment, all aspects of employment. This flows from the established rule that labor law does not authorize the substitution of the judgment of the employer in the conduct of its business. Such management prerogative may be availed of without fear of any liability so long as it is exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of employees under special laws or valid agreement and are not exercised in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite. 35 (Underscoring supplied) In the case at bar, the disapproval of the plan to hold the Halloween party on October 31, 2001 may not be considered to have been actuated by bad faith. As the Labor Arbiter noted: It may not be ignored that holding a trick or treat party in the office premises of respondent ETSI would certainlyaffect the operations of the office, since children will be freely roaming around the office premises, things may get misplaced and the noise in the office will simply be too hard to ignore. Contrary to complainants position, it is immaterial if the parents of the children who will participate in the trick or treat will be on vacation leave, since it is the work of the employees who will not be on leave and who will be working on that day which will be disrupted, possibly resulting in the disruption of the operations of the company.36 (Underscoring supplied) Given the reasonableness of Geiserts decision that provoked petitioner to send the second e -mail message, the observations of the Court of Appeals that "the message x x x resounds of subversion and undermines the authority and credibility of management" 37 and that petitioner "displayed a tendency to act without managements approval, and even against managements will" are we ll taken.38 Moreover, in circulating the second e-mail message, petitioner violated Articles III (8) and IV (5) of ETSIs Code of Conduct on "making false or malici ous statements concerning the Company, its officers and employees or its products and services"39 and "improper conduct or acts of discourtesy or disrespect to fellow employees, visitors, guests, clients, at any time." 40 Petitioner invokes Samson v. National Labor Relations Commission41 where this Court held that the dismissal of the therein petitioner was too harsh a penalty for uttering " Si EDT [Epitacio D. Titong, the General Manager and President of the employer], bullshit yan," "sabihin mo kay EDT yan" and "sabihin mo kay EDT, bullshit yan," while making the "dirty finger" gesture, and warning that the forthcoming national sales conference of the company would be a "very bloody one." Petitioners reliance on Samson is misplaced. Firs t, in that case, this Court found that the misconduct committed was not related with the employees work as the offensive remarks were verbally made during an informal Christmas gathering of the employees, an occasion "where

tongues are more often than not loosened by liquor or other alcoholic beverages" 42 and "it is to be expected x x x that employees freely express their grievances and gripes against their employers."43 In petitioners case, her assailed conduct was related to her work. It reflects an unwillingness to comply with reasonable management directives. While in Samson, Samson was held to be merely expressing his dissatisfaction over a management decision,44 in this case, as earlier shown, petitioners offensive remarks were directed against Geisert. Additionally, in Samson, this Court found that unlike in Autobus Workers Union (AWU) v. NLRC45 where dismissal was held to be an appropriate penalty for uttering insulting remarks to the supervisor,46 Samson uttered the insulting words against EDT in the latters absence. 47 In the case at bar, while petitioner did not address her e-mail message to Geisert, she circulated it knowing or at least, with reason to know that it would reach him. As ETSI notes, "[t]hat [petitioner] circulated this e-mail message with the knowledge that it would reach the eyes of management may be reasonably concluded given that the first e-mail message reached her immediate supervisors attention." 48 Finally, in Samson, this Court found that the "lack of urgency on the part of the respondent company in taking any disciplinary action against [the employee] negates its charge that the latters misbehavior constituted serious misconduct." 49 In the case at bar, the management acted 14 days after petitioner circulated the quoted e-mail message.50 Petitioner asks that her 12 years of service to ETSI during which, so she claims, she committed no other offense be taken as a mitigating circumstance.51 This Court has held, however, that "the longer an employee stays in the service of the company, the greater is his responsibility for knowledge and compliance with the norms of conduct and the code of discipline in the company." 52 In fine, petitioner, having been dismissed for just cause, is neither entitled to reinstatement nor to backwages. Petitioners contention that she was denied due process is well -taken however, as the records do not show that she was informed of her right to be represented by counsel during the conference with Geisert and Remudaro. The protestations of ETSI, et al. that the right to be informed of the right to counsel does not apply to investigations before administrative bodies and that law and jurisprudence merely give the employee the option to secure the services of counsel in a hearing or conference 53 fall in light of the clear provision of Article 277 (b) of the Labor Code that the employer xxx shall afford [the worker whose employment is sought to be terminated] ample opportunity to be heard and to defend himself with the assistance of his representatives if he so desires in accordance with company rules and regulations pursuant to guidelines set by the Department of Labor and Employment, and this Courts explicit pronouncement that "[a]mple opportunity connotes every kind of assistance that management must accord the employee to enable him to prepare adequately for his defense including legal representation."54

Following Agabon, et al. v. National Labor Relations Commission,55 the violation of petitioners statutory due process right entitles her to an award of nominal damage, which this Court fixes at P30,000.56 WHEREFORE, the petition is in part GRANTED. The questioned decision is AFFIRMED with the MODIFICATIONthat respondent ETSI Technologies, Inc. is ordered to pay petitioner, Lorna Punzal, nominal damages in the amount of P30,000. SO ORDERED

PASCUAL VS. BME [28 SCRA 345; G.R. NO. 25018; 26 MAY 1969]
Sunday, February 15, 2009 Posted by Coffeeholic Writes Labels: Case Digests, Political Law

Facts:

Petitioner Arsenio Pascual, Jr. filed an action for prohibitionagainst

the Board of Medical Examiners. It was alleged therein that at the initial hearing of an administrative case for alleged immorality, counsel for complainants announced that he would present as his first witness the petitioner. Thereupon, petitioner, through counsel, made of record his objection, relying on the constitutional right to be exempt from being a witness against himself. Petitioner then alleged that to compel him to take the witness stand, the Board of Examiners was guilty, at the very least, of grave abuse of discretion for failure to respect the constitutional right against self-incrimination.

The answer of respondent Board, while admitting the facts stressed that it could call petitioner to the witness stand and interrogate him, the right against self-incrimination being available only when a question calling for an incriminating answer is asked of a witness. They likewise alleged that the right against self-incrimination cannot be availed of in an administrative hearing. Petitioner was sustained by the lower court in his plea that he could not be compelled to be the first witness of the complainants, he being the party proceeded against in an administrative charge for malpractice. Hence, this appeal by respondent Board.

Issue: Whether or Not compelling petitioner to be the first witness of

the complainants violates the Self-Incrimination Clause.

Held:

The Supreme Court held that in an administrative hearing against

a medical practitioner for alleged malpractice, respondent Board of Medical Examiners cannot, consistently with the self-incrimination clause, compel the person proceeded against to take the witness stand without his consent. The Court found for the petitioner in accordance with the wellsettled principle that "the accused in a criminal case may refuse, not only to answer incriminatory questions, but, also, to take the witness stand." If petitioner would be compelled to testify against himself, he could suffer not the forfeiture of property but the revocation of his license as a medical practitioner. The constitutional guarantee protects as well the right to silence: "The accused has a perfect right to remain silent and his silence cannot be used as a presumption of his guilt." It is the right of a defendant "to forego testimony, to remain silent, unless he chooses to take the witness stand with undiluted, unfettered exercise of his own free genuine will."

The reason for this constitutional guarantee, along with other rights granted an accused, stands for a belief that while crime should not go unpunished and that the truth must be revealed, such desirable objectives should not be accomplished according to means or methods offensive to the high sense of respect accorded the human personality. More and more in line with the democratic creed, the suspected of the deference heinous accorded an crimes the is privilege individual due the is even weight. respect those The a most given

constitutional foundation underlying

government ... must accord to the dignity and integrity of its citizens

Friday, September 26, 2008

Case Digest: Cabal v. Kapunan

G.R. No. L-19052, December 29, 1962

MANUEL F. CABAL, petitioner, vs. HON. RUPERTO KAPUNAN, JR., and THE CITY FISCAL OF MANILA, respondents. CONCEPCION, J.: Col. Jose C. Maristela filed with the Secretary of National Defense a letter-complaint charging petitioner Manuel Cabal, then Chief of Staff of the AFP, with "graft, corrupt practices, unexplained wealth, and other equally reprehensible acts". The President of the Philippines created a committee to investigate the charge of unexplained wealth. The Committee ordered petitioner herein to take the witness stand in the administrative proceeding and be sworn to as witness for Maristela, in support of his aforementioned charge of unexplained wealth. Petitioner objected to the order of the Committee, invoking his constitutional right against self-incrimination. The Committee insisted that petitioner take the witness stand and be sworn to, subject to his right to refuse to answer such questions as may be incriminatory. This notwithstanding, petitioner respectfully refused to be sworn to as a witness to take the witness stand. The Committee referred the matter to the Fiscal of Manila, for such action as he may deem proper. The City Fiscal filed with the Court of First Instance of Manila a "charge" of contempt for failing to obey the order of the Committee to take the witness stand. The "charge" was assigned to the sala of respondent judge Kapunan. Petitioner filed with respondent Judge a motion to quash, which was denied. Hence this petition for certiorari and prohibition. ISSUE: Whether or not the Committee's order requiring petitioner to take the witness stand violates his constitutional right against self-incrimination. HELD: Yes. Although the said Committee was created to investigate the administrative charge of unexplained wealth, it seems that the purpose of the charge against petitioner is to apply the provisions of the Anti-Graft Law, which authorizes the forfeiture to the State of property of a public officer or employee which is manifestly out of proportion to his salary as such public officer or employee and his other lawful income and the income from legitimately acquired property. However, such forfeiture has been held to partake of the nature of a penalty. As a consequence, proceedings for forfeiture of property are deemed criminal or penal, and, hence, the exemption of defendants in criminal case from the obligation to be witnesses against themselves are applicable thereto. No person shall be compelled in any criminal case to be a witness against himself. This

prohibition against compelling a person to take the stand as a witness against himself applies to criminal, quasi-criminal, and penal proceedings, including a proceeding civil in form for forfeiture of property by reason of the commission of an offense, but not a proceeding in which the penalty recoverable is civil or remedial in nature. The privilege of a witness not to incriminate himself is not infringed by merely asking the witness a question which he refuses to answer. The privilege is simply an option of refusal, and not a prohibition of inquiry. A question is not improper merely because the answer may tend to incriminate but, where a witness exercises his constitutional right not to answer, a question by counsel as to whether the reason for refusing to answer is because the answer may tend to incriminate the witness is improper. The possibility that the examination of the witness will be pursued to the extent of requiring self-incrimination will not justify the refusal to answer questions. However, where the position of the witness is virtually that of an accused on trial, it would appear that he may invoke the privilege in support of a blanket refusal to answer any and all questions. Note: It is not disputed that the accused in a criminal case may refuse, not only to answer incriminatory questions, but, also, to take the witness stand.

WATEROUS DRUG VS. NLRC [280 SCRA 735 ; G.R.NO. 113271; 16 OCT 1997]
Tuesday, February 03, 2009 Posted by Coffeeholic Writes Labels: Case Digests, Political Law

Facts:

Catolico was hired as a pharmacist by petitioner Waterous Drug

Corporation on 15 August 1988. On 31 July 1989, Catolico received a memorandum from WATEROUS Vice President-General Manager Emma R. Co warning her not to dispense medicine to employees chargeable to the latter's accounts because the same was a prohibited practice. On the same date, Co issued another memorandum to Catolico warning her not to negotiate with suppliersof wasnot medicine to without deal consulting with the Purchasing the suppliers. Department, as this would impair the company's control of purchases and, besides she authorized directly

As regards the first memorandum, Catolico did not deny her responsibility but explained that her act was "due to negligence," since fellow employee

Irene

Soliven

"obtained

the

medicines

in

bad

faith

and

through

misrepresentation when she claimed that she was given a charge slip by the Admitting Dept." Catolico then asked the company to look into the fraudulent activities of Soliven.

In a memorandum dated 21 November 1989, WATEROUS Supervisor Luzviminda E. Bautro warned Catolico against the "rush delivery of medicines without the proper documents." On 29 January 1990, WATEROUS Control Clerk Eugenio Valdez informed Co that he noticed an irregularity involving Catolico and Yung Shin Pharmaceuticals, Inc.

Forthwith, in her memorandum dated 37 January 1990, Co asked Catolico to explain, within twenty-four hours, her side of the reported irregularity. Catolico asked for additional time to give her explanation, and she was granted a 48-hour extension from 1 to 3 February 1990. However, on 2 February 1990, she was informed that effective 6 February 1990 to 7 March 1990, she would be placed on preventive suspension to protect the interests of the company.

In a letter dated 2 February 1990, Catolico requested access to the filecontaining Sales Invoice No. 266 for her to be able to make a satisfactory explanation. In said letter she protested Saldaa's invasion of her privacy when Saldaa opened an envelope addressed to Catolico.

In a letter to Co dated 10 February 1990, Catolico, through her counsel, explained that the check she received from YSP was a Christmas gift and not a "refund of overprice." She also averred that the preventive suspension was ill-motivated, as it sprang from an earlier incident between her and Co's secretary, Irene Soliven.

On 5 March 1990, WATEROUS Supervisor Luzviminda Bautro, issued a memorandum notifying Catolico of her termination. On 5 May 1990, Catolico filed before the Office of the Labor Arbiter a complaint for unfair labor

practice, illegal dismissal, and illegal suspension. In his decision of 10 May 1993, Labor Arbiter Alex Arcadio Lopez found no proof of unfair labor practice against petitioners. Nevertheless, he decided in favor of Catolico because petitioners failed to "prove what alleged as complainant's dishonesty," and to show that any investigation was conducted. Hence, the dismissal was without just cause and due process. He thus declared the dismissal and suspension illegal but disallowed reinstatement.

Petitioners seasonably appealed from the decision and urged the NLRC to set it aside because the Labor Arbiter erred in finding that Catolico was denied due process and that there was no just cause to terminate her services. In its decision of 30 September 1993, the NLRC affirmed the findings of the Labor Arbiter on the ground that petitioners were not able to prove a just cause for Catolico's dismissal from her employment. It found that petitioner's evidence consisted only of the check of P640.00 drawn by YSP in favor of complainant, which her co-employee saw when the latter opened the envelope. But, it declared that the check was inadmissible in evidence pursuant to Sections 2 and 3(1 and 2) of Article III of the Constitution. It concluded: With the smoking gun evidence of respondents being rendered inadmissible, by virtue of the constitutional right invoked by complainants, respondents' case falls apart as it is bereft of evidence which cannot be used as a legal basis for complainant's dismissal.

The NLRC then dismissed the appeal for lack of merit, but modified the dispositive portion of the appealed decision by deleting the award for illegal suspension as the same was already included in the computation of the aggregate of the awards in the amount of P35,401.86.

Issue:

Whether or Not the dismissal of the private respondent is in

violation

of the

Constitution,

under

the

Bill

of

Rights.

Held: As
had been

to the first and second grounds, petitioners insist that Catolico receiving "commissions" from YSP, or probably from

other suppliers, and that the check issued to her on 9 November 1989 was not the first or the last. They also maintained that Catolico occupied a confidential position and that Catolico's receipt of YSP's check, aggravated by her "propensity to violate company rules," constituted breach of confidence. And contrary to the findings of NLRC, Catolico was given ample opportunity to explain her side of the controversy.

In her Comment, Catolico asserts that petitioners' evidence is too "flimsy" to justify her dismissal. The check in issue was given to her, and she had no duty to turn it over to her employer. Company rules do not prohibit an employee from accepting gifts from clients, and there is no indication in the contentious check that it was meant as a refund for overpriced medicines. Besides, the check was discovered in violation of the constitutional provision on the right to privacy and communication; hence, as correctly held by the NLRC, it was inadmissible in evidence.

Catolico was denied due process. Procedural due process requires that an employee be apprised of the charge against him, given reasonable time to answer the charge, allowed ample opportunity to be heard and defend himself, and assisted by a representative if the employee so desires. Ample opportunity connotes every kind of assistance that management must accord the employee to enable him to prepareadequately for his defense, including legal representation. In the case at bar, although Catolico was given an opportunity to explain her side,she was dismissed from the service in the memorandum of 5 March 1990 issued by her Supervisor after receipt of her letter and that of her counsel. No hearing was ever conducted after the issues were joined through said letters.

Catolico was also unjustly dismissed. It is settled that the burden is on the employer to prove just and valid cause for dismissing an employee, and its failure to discharge that burden would result in a finding that the dismissal is unjustified. It clearly appears then that Catolico's dismissal was based on hearsay information. Catolico's dismissal then was obviously grounded on mere suspicion, which in no case can justify an employee's dismissal. Suspicion is not among the valid causes provided by the Labor Code for the termination of employment; and even the dismissal of an employee for loss of trust and confidence must rest on substantial grounds and not on the employer's arbitrariness, whims, caprices, or suspicion. Besides, Catolico was not shown to be a managerial employee, to which class of employees the term "trust and confidence" is restricted.

As regards the constitutional violation upon which the NLRC anchored its decision, that the Bill of Rights does not protect citizens from unreasonable searches and seizures perpetrated by private individuals. It is not true, as counsel for Catolico claims, that the citizens have no recourse against such assaults. On the contrary, and as said counsel admits, such an invasion gives rise to both criminal and civil liabilities.

Finally, since it has been determined by the Labor Arbiter that Catolico's reinstatement would not be to the best interest of the parties, he correctly awarded separation pay to Catolico. Separation pay in lieu of reinstatement is computed at one month's salary for every year of service. In this case, however, Labor Arbiter Lopez computed the separation pay at one-half month's salary for every year of service. Catolico did not oppose or raise an objection. As such, we will uphold the award of separation pay as fixed by the Labor Arbiter.

WHEREFORE, the instant petition is hereby DISMISSED and the challenged decision and resolution of the National Labor Relations Commission dated 30 September 1993 and 2 December 1993, respectively, in NLRC-NCR CA No. 005160-93 are AFFIRMED, except as to its reason for upholding the Labor

Arbiter's decision, viz., that the evidence against private respondent was inadmissible for having been obtained in violation of her constitutional rights of privacy of communication and against unreasonable searches and seizures which is hereby set aside.