LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO

| SANTOS | 2D 2016

International Harvester v. IAC Facts: Private respondent Diosdado Joson was first employed as assistant attorney by the petitioner and was thereafter promoted to various positions until he became the Government Relations Officer for Government Sales Department with a salary of P2,500. Seventeen years later or on 25 July 1977, the VP of petitioner company called private respondent and informed him that he was being transferred to the Fleet Account Sales Department as a Fleet Account Salesman with a salary of P1,000 a month, without allowance but he was entitled to commissions. According to management, his position as Government Relations Officer had become redundant in view of the appointment of the International Heavy Equipment Corporation as the Company's Dealer with the Government. The petitioner refused to transfer which resulted to his termination. He then filed a complaint for damages against the petitioner. The lower court found the dismissal illegal and ordered the payment of damages. The Court of Appeals affirmed the decision. Hence, this petition. Issue: Whether or not there was a valid ground for the demotion/transfer of personnel due to redundancy. Held: Yes. Well established is the rule that while it is true that to .dismiss or lay off an employee is management's prerogative, it must be done without abuse of discretion, for what is at stake is not only petitioner's position but also his means of livelihood. Evidence on record fails to show bad faith on the part of the employer. On the contrary, it is manifest that from the outset, it had been candid with private respondent, it is not disputed that before the final contract was signed by and between IHMI and IHEC, the former conferred with private respondent informing him of the management decision and the rationale behind it and although not required by law offered him a position in the fleet account sales which although lesser in basic pay and without allowance, has more opportunities of fetching a bigger income in the form of commissions. Obviously, what is being

required of him is the exertion of more effort in exchange for a bigger "take home pay." He refused and considered the demotion as a forced resignation. He cannot now be heard to complain in having been phased out from his position which ceased to exist apart from the fact that he has been given his due under Article 284 of the Labor Code of one (1) month pay for every year of service plus the money equivalent of his unused sick and vacation leave.

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016

Chua-Qua vs. Clave Facts: Private respondent Tay Tung High School, Inc. is an educational institution in Bacolod City. Petitioner had been employed therein as a teacher since 1963 and, in 1976 when this dispute arose, was the class adviser in the sixth grade where one Bobby Qua was enrolled. Since it was the policy of the school to extend remedial instructions to its students, Bobby Qua was imparted such instructions in school by petitioner. In the course thereof, the couple fell in love and got married. Petitioner was then 30 years of age but Bobby Qua being 16 years old, consent and advice to the marriage was given by his mother. Private respondent filed with the sub-regional office of the Department of Labor at Bacolod City an application for clearance to terminate the employment of petitioner on the following ground: "For abusive and unethical conduct unbecoming of a dignified school teacher and that her continued employment is inimical to the best interest, and would downgrade the high moral values, of the school. Executive Labor Arbiter: Granted the clearance to terminate the employment of petitioner. NLRC: Reversed the Labor Arbiters decision and ordered petitioners reinstatement with backwages. Minister of Labor: Reversed the decision of the NLRC. The petitioner was, however, awarded 6 months salary as financial assistance. Presidential Executive Assistant (Clave): Private respondent was ordered to reinstate petitioner to her former position without loss of seniority rights and other privileges and with full back wages from the time she was not allowed to work until the date of her actual reinstatement. Clave, however, acting on a motion for reconsideration, reversed his prior ruling but awarded separation pay equivalent to petitioners 6 months salary.

Held: With the finding that there is no substantial evidence of the imputed immoral acts, it follows that the alleged violation of the Code of Ethics governing school teachers would have no basis. Private respondent utterly failed to show that petitioner took advantage of her position to court her student. If the two eventually fell in love, despite the disparity in their ages and academic levels, this only lends substance to the truism that the heart has reasons of its own which reason does not know. But, definitely, yielding to this gentle and universal emotion is not to be so casually equated with immorality. The deviation of the circumstances of their marriage from the usual societal pattern cannot be considered as a defiance of contemporary social mores. It would seem quite obvious that the avowed policy of the school in rearing and educating children is being unnecessarily bannered to justify the dismissal of petitioner. This policy, however, is not at odds with and should not be capitalized on to defeat the security of tenure granted by the Constitution to labor. In termination cases, the burden of proving just and valid cause for dismissing an employee rests on the employer and his failure to do so would result in a finding that the dismissal is unjustified. The charge against petitioner not having been substantiated, SC declared her dismissal as unwarranted and illegal. It being apparent, however, that the relationship between petitioner and private respondent has been inevitably and severely strained, the Court believes that it would neither be to the interest of the parties nor would any prudent purpose be served by ordering her reinstatement.

Issue: Whether or not there is substantial evidence to prove that the antecedent facts which culminated in the marriage between petitioner and her student constitute immorality and/or grave misconduct.

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016

Star Paper Corp, et al v Simbol, et al April 12 2006 Facts: Respondents were hired after they were found fit for the job, but were asked to resign when they married each co-employees. They resisted and assailed the alleged company policy. The petitioner contends that its policywill only apply when one employee marries a co-employee, but employees remain free to marry persons other than co-employees. Labor Arbiter Melquiades Sol del Rosario dismissed the complaint for lack of merit: [T]his company policy was decreed pursuant to what the respondent corporation perceived as management prerogative. This management prerogative is quite broad and encompassing for it covers hiring, work assignment, working method, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. Except as provided for or limited by special law, an employer is free to regulate, according to his own discretion and judgment all the aspects of employment. The NLRC affirmed the LA's decision but was reversed by the CA. Issue: WON whether the policy of the employer banning spouses from working in the same company violates the rights of the employee under the Constitution and the Labor Code or is a valid exercise of management prerogative (WON an employee may be dismissed for being married to a co-employee.) Held: We affirm. It is true that the policy of petitioners prohibiting close relatives from working in the same company takes the nature of an anti-nepotism employment policy. Companies adopt these policies to prevent the hiring of unqualified persons based on their status as a relative, rather than upon their ability.17 These policies focus upon the potential employment

problems arising from the perception of favoritism exhibited towards relatives. With more women entering the workforce, employers are also enacting employment policies specifically prohibiting spouses from working for the same company. We note that two types of employment policies involve spouses: policies banning only spouses from working in the same company (nospouse employment policies), and those banning all immediate family members, including spouses, from working in the same company (anti-nepotism employment policies). The company policy must be reasonable under the circumstances to qualify as a valid exercise of management prerogative. We do not find a reasonable business necessity in the case at bar. Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdiction cannot benefit the petitioners. The protection given to labor in our jurisdiction is vast and extensive that we cannot prudently draw inferences from the legislatures silence41 that married persons are not protected under our Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for failure of petitioners to present undisputed proof of a reasonable business necessity, we rule that the questioned policy is an invalid exercise of management prerogative

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016

Escobin, et.al v. NLRC April 15, 1998 Facts: Some seventy security guards of PISI we assigned to UP-NDC Basilan Plantation. When placed under the agrarian reform program, the plantation had tomduce the number of security guards. 57 of the were placed on "floating status". While in that status, they were instructed to report to PISI head office at San Juan, MM for sting to clients in Meo Manila. The guards did not reply nor comply. PISI reiterated the instruction and threatened their employment on ground of insubordination of wilfull disobedience. Lte int he day, they wrote to the PISI general manager that they had no intention tonabandon their employment, nor to defy fair, reasonable and lawful orders. They complained of illegal termination by way of constructive dismissisal. Labor Arbiter RHett Julius J. Plagata found that complainants are residents of Basilan, have famlies in Basilan, have never been assigned beyond Mindanao or Visayas, were not provided with fare money. Neither were they assured of compention similar to what they used to receive in Basilan, nor of continued posting while in Manila. Their transfer would surely entail great inconvenience to complainants and their families. Thus, the LA held that the transfer order was unreasonable and, therefore, could not be sustained. On appeal, the NLRC revered the LA's decision, holding that the petitioner's refusal to comply with the said Order and their "wanton disregard of the order to explain their inability to xxx comply and obey lawful orders from their employer" constituted the "proximate cause if their dismissal". Issue: WON an the petitioners may validly disobey an inconvenient transfer. Held: First, it was grossly inconvenient for petitioners, who were residents and heads of families residing in Basilan, to commute to Manila. In Yuco Chemical Industries, Inc. vs. Ministry of Labor and Employment,[10] the transfer to Manila of two workers, who were also studying in Tarlac, was held to be grossly inconvenient. The distance to Manila

from Basilan is considerably greater than that from Tarlac. Such transfer would have necessarily entailed separation of the petitioners from their families. Second, petitioners were not provided with funds to defray their transportation and living expenses. Petitioners, not unknown to their employer, earned only P1,500 to P2,500 a month before they were placed on reserve status, after which they remained jobless. Furthermore, being residents of Basilan, petitioners would have required living arrangements in Manila which, in turn, would have entailed additional expenses on their part. Third, private respondent argues that it sent transportation money to petitioners. However, the recipients of such funds are not parties in this case. Moreover, the alleged transportation allowance was given only after petitioners had already been terminated from service. The letter[11] purportedly granting transportation allowance to other security guards was dated August 12, 1991, which was after petitioners had been dismissed June 28, 1991.[12] Fourth, no reason was given by private respondent company explaining why it had failed to inform petitioners of their specific security assignments prior to their departure from Basilan. If indeed the postings were to be made in Basilan, there would have been no necessity for petitioners to report to Manila and no justification for respondents insistence on their compliance with its directive. Since private respondent did not provide transportation and living allowances; and since, in the first place, petitioners could have been easily informed of their new assignments right there in Basilan, there was no reason for petitioners to travel all the way to Manila. It is obvious to us that the dismissal was effected with mala fides, as it was intended to punish petitioners for their refusal to heed their employers unreasonable directive. Respondent Commission therefore committed grave abuse of discretion in holding that petitioners were dismissed for a just cause.

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016

BENGUET ELECTRIC COOPERATIVE v. JOSEPHINE FIANZA GR. No. 158606 MARCH 4, 2009 FACTS: Josephine Fianza had been employed with petitioner Benguet Electric Cooperative (BENECO) since August 1, 1979. She occupied various positions, until, in 1991, she became Property Custodian under the Office of the General Manager, with a Salary Grade of 5. Later, she received a letter from BENECOs general manager temporarily detailing her to the Finance Department to assume the duties of a Bill Distributor without any change in salary rate. She complained of constructive dismissal because according to her, the order was a demotion. She pointed out that the bill distributor job was fit for male because it requires travel to distribute electric bills to consumers. Respondent defied the order and was consequently dismissed. ISSUE: WON the dismissal is valid HELD: The dismissal is valid. As found by the Labor Arbiter and affirmed by the NLRC, there had been a proposed restructuring of the organization BENECO. The Labor Arbiter and the NLRC affirmed that the restructured Table of Organization of BENECO was prepared after a thorough review by management of the indispensable and unessential positions in the old plantilla. It was undertaken to address the requirements of an automated system and to streamline BENECOs operations. Under the re-vamped organization, the position of Property Custodian under the Office of the General Manager had already been abolished. The position of Property Custodian was deemed a superfluity, since, even as early as 1997, many functions of the said office had been absorbed by other offices. Certainly, the position was not abolished because Fianza was the occupant thereof; rather, the position was abolished because the functions of the position had become redundant and unnecessary. There is no showing that the position of Property Custodian was abolished in order to single out Fianza, or that malice and ill-will attended the phasing out of the position. As such, the deletion of Fianzas position should be accepted and validated as a sound exercise of management prerogative, which this Court should not interfere with. In cases when an employees position is abolished due to corporate restructuring, the law, in general, permits the severance of the employer-employee

relationship, provided that certain requirements are met. In the instant case, Fianza was not terminated from employment, but was transferred to another department. Managements prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of the business is generally not constitutive of constructive dismissal The employer has the burden of proving that the transfer of an employee is for valid and legitimate grounds. Particularly, for a transfer not to be considered a constructive dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. The Labor Arbiter and NLRC found that the reorganization of BENECO was done in good faith, and that the transfer would not be unreasonable, inconvenient or prejudicial to the employee. Petitioners, therefore, have discharged the burden of proving that the transfer was not unreasonable, inconvenient or prejudicial to the employee. Since it has likewise been established that there would be no demotion of titular rank, or diminution of salaries, benefits and other privileges, the remaining issue to be resolved is whether the duties and functions exercised by a Bill Distributor would amount to a demotion. We are not persuaded that there is a significant disparity between the position of a Property Custodian and that of a Bill Distributor that amounts to a demotion tantamount to a constructive dismissal. Admittedly, one is an office job and the other would require travel. However, the position of a Bill Distributor is not purely mechanical labor. As Fianza herself points out, a Bill Distributor may receive, entertain and address problems, complaints and requests from member-consumers, and the position thus involves the exercise of discretion. Similar transfers and re-assignments of employees have been upheld, such as the transfer of a union president from his position of messenger clerk in a hotel to purely office work. Mere incidental inconvenience is not sufficient to warrant Fianzas claims of constructive dismissal.

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016

Fianzas refusal to obey the transfer order constitutes willful disobedience of a lawful order of her employer sanctioned under Article 282 of the Labor Code and, therefore, warrants dismissal. It must be noted that during the preliminary conference, Fianza was advised that BENECO was willing to reinstate her, but because her position as Property Custodian was no longer existing, she would have to report for work as Bill Distributor. Fianza refused this offer. She must now bear the consequences of her refusal. To sanction the disregard or disobedience by employees of a reasonable rule or order laid down by management would be disastrous to the discipline and order within the enterprise. It is in the interest of both the employer and the employee to preserve and maintain order and discipline in the work environment. Deliberate disregard of company rules or defiance of management prerogative cannot be countenanced. This is not to say that the employees have no remedy against rules or orders they regard as unjust or illegal. They can object thereto, ask to negotiate thereon, bring proceedings for redress against the employer. But until and unless the rules or orders are declared to be illegal or improper by competent authority, the employees ignore or disobey them at their peril.

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016

BLUE DAIRY CORP v. NLRC GR No. 129843 SEPT 14, 1999 FACTS: Private respondent Recalde worked as a food technologist in its laboratory at Blue Dairy Corp. Once, she worked on a Sunday but was not given a premium pay. On 21 October 1994 Recalde accompanied Production Manager Editha N. Nicolas in conducting a sensory evaluation of vanilla syrup in one of the outlets of a client. While on their way back to the office a post fell on the company vehicle they were riding due to a raging typhoon damaging the vehicle's windshield and side mirror. On 3 December 1994 Recalde was transferred from the laboratory to the vegetable processing section where she cored lettuce, minced and repacked garlic and performed similar work, and was restricted from entering the laboratory. She was unhappy. She considered her new job humiliating and menial. On 16 December 1994 Recalde filed a complaint against petitioner Blue Dairy Corporation, Edison T. Aviguetero and Pedro G. Miguel for constructive dismissal and non-payment of premium pay. Petitioners contended that Recalde was given a less sensitive assignment outside of the laboratory on account of her dishonesty which resulted in loss of trust and confidence since she allegedly used the company vehicle to scout for a residence during office hours and without permission from the company. Petitioners insist that the transfer of Recalde from the laboratory to the vegetable processing section was effected in the exercise of management prerogative. ISSUE: WON the transfer of Recalde was valid. HELD: The transfer was invalid because it is a demotion in rank. Indeed, it is the prerogative of management to transfer an employee from one office to another within the business establishment based on its assessment and perception of the employees qualifications, aptitudes and competence, and in order to ascertain where he can function with maximum benefit to the company. This is a privilege inherent in the employers right to control and manage his enterprise effectively. The freedom of management to conduct its business operations to achieve its purpose cannot be denied. But, like other rights, there are limits thereto. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, the

employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome 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 an offer involving a demotion in rank and diminution in pay. Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment. In the present case, petitioners failed to justify Recaldes transfer from the position of food technologist in the laboratory to a worker in the vegetable processing section. We recall that what triggered Recaldes transfer was the 21 October incident where she was found to have allegedly utilized company vehicle in looking for a new residence during office hours without permission from management. In petitioners view, she was dishonest such that they lost their trust and confidence in her. Yet, it does not appear that Recalde was provided an opportunity to refute the reason for the transfer. Further, petitioners overstretched the effect of Recaldes claimed wrongdoing. We have ruled that breach of trust and confidence as a ground for dismissal from employment must be related to the performance of the duties of the employee such as would show him to be thereby unfit to continue working for the employer. By analogy, breach of trust and confidence as a ground for reassignment must be related to the performance of the duties of the employee such as would show him to be thereby unfit to discharge the same task. Clearly, the act of dishonesty imputed to Recalde has no bearing at all to her work in the laboratory. Further still, granting that Recalde was proved guilty of dishonesty, the companys General Rules and Regulations provide the corresponding sanctions therefor. Recalde appears to have no prior record of infractions. For "leaving post temporarily without permission during working hours" committed for the first time, "warning" is imposable, whereas for "unauthorized use of any company vehicle" committed for the first time, the commensurate penalty is "15 days suspension." Although petitioners invoked the pertinent provisions of the rules and regulations which Recalde allegedly violated, for reasons known only to them, they disregarded those sanctions. Instead, they gave her a less sensitive assignment outside of the laboratory as they claimed

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016

that had they adhered to the rules she would have been dismissed outright for her dishonesty in the unauthorized use of company property. Then too is their claim that they were moved by compassion on account of the then approaching Christmas season. Commendable as this "compassionate" gesture may seem, nevertheless, petitioners failed to realize that it was not relief from dismissal which they provided to Recalde when they assigned her to the vegetable processing section but discomfiture. As food technologist in the laboratory, she occupied a highly technical position requiring use of her mental faculty. As a worker in the vegetable processing section, she performed mere mechanical work. It was virtually a transfer from a position of dignity to a servile or menial job. We agree with the observation of the Office of the Solicitor General that the radical change in Recaldes nature of work unquestionably resulted in, as rightly perceived by her, a demeaning and humiliating work condition. The transfer was a demotion in rank, beyond doubt.

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016 ELMER M. MENDOZA vs. RURAL BANK OF LUCBAN Facts: The Board of Directors of the Rural Bank of Lucban, Inc., issued Board Resolutions stating that in line with the policy of the bank to familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system, all officers and employees are subject to reshuffle of assignments. Branch employees are reshuffled to their new assignments without changes in their compensation and other benefits. On May 3, 1999, in an undated letter addressed to Daya, Petitioner Elmer Mendoza expressed his opinion, that the reshuffling of the undersigned from the present position as Appraiser to Clerk-Meralco Collection is deemed to be a demotion without any legal basis On May 10, 1999, Daya replied that it was never the intention (of management) to downgrade your position in the bank considering that your due compensation as Bank Appraiser is maintained and no future reduction was intended. On June 7, 1999, petitioner submitted to the bank's Tayabas branch manager a letter in which he applied for a leave of absence from work and on June 21, 1999, petitioner again submitted a letter asking for another leave of absence for twenty days effective on the same date. On June 24, 1999, while on his second leave of absence, petitioner filed a Complaint before Arbitration Branch No. IV of the National Labor Relations Commission (NLRC). The Complaint -- for illegal dismissal, underpayment, separation pay and damages - was filed against the Rural Bank of Lucban and/or its president, Alejo B. Daya; and its Tayabas branch manager, Briccio V. Cada. Jurisprudence recognizes the exercise of management prerogatives. For this reason, courts often decline to interfere in legitimate business decisions of employers. Indeed, labor laws discourage interference in employers' judgments concerning the conduct of their business. The law must protect not only the welfare of employees, but also the right of employers. In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another -- provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of employers to control and manage their enterprise effectively. The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. Managerial prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice. The test for determining the validity of the transfer of employees was explained in Blue Dairy Corporation v. NLRC as follows: The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee's transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment."

Issue: WON petitioner was constructively dismissed from his employment.

Held: The Petition has no merit. Constructive dismissal is defined as an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. The transfer of personnel from one area of operation to another is inherently a managerial prerogative that shall be upheld if exercised in good faith -- for the purpose of advancing business interests, not of defeating or circumventing the rights of employees.

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016

HEAVYLIFT MANILA, INC. and/or JOSEPHINE EVANGELIO v. COURT OF APPEALS, et al. G.R. No. 154410, 20 October 2005, FIRST DIVISION (Quisumbing, J. Ma. Dottie Galay received a letter informing her of her low performance rating and the negative feedback from her team members regarding work attitude. Subsequent to this letter, Galay was terminated for alleged loss of confidence, prompting Galay to file with the Labor Arbiter a complaint for illegal dismissal. Heavylift Manila, Inc. asserts that Galay had been terminated due to her attitude problem. This situation, according to Heavylift, is analogous to loss of trust and confidence which could no longer make Galay in charge of the Crew Information System. Heavylift also maintains that because of Galays attitude, the companys work atmosphere had become very strained and had gravely affected the workers and their outputs. Galays dismissal, according to Heavylift, was merely an act of self-preservation. ISSUE: Whether attitude problem is a valid ground for the termination of an employee HELD: Yes, an employee who cannot get along with his coemployees is detrimental to the company for he can upset and strain the working environment. Without the necessary teamwork and synergy, the organization cannot function well. Thus, management has the prerogative to take the necessary action to correct the situation and protect its organization. When personal differences betwe en employees and management affect the work environment, the peace of the company is affected. Thus, an employees attitude problem is a valid ground for his termination. It is a situation analogous to loss of trust and confidence that must be duly proved by the employer. Similarly, compliance with the twin requirement of notice and hearing must also be proven by the employer. However, the Court is not convinced that in the present case, Heavylift Manila, Inc. has shown sufficiently clear and convincing evidence to justify Galays termination. Though they are correct in saying that in this case, proof beyond reasonable doubt is not required, still there must be substantial

evidence to support the termination on the ground of attitude. The mere mention of negative feedback from her team members, and the letter, are not proof of her attitude problem. Likewise, her failure to refute Heavylift Manila, Inc.s allegations of her negative attitude does not amount to admission. Technical rules of procedure are not binding in labor cases. Besides, the burden of proof is not on the employee but on the employer who must affirmatively show adequate evidence that the dismissal was for justifiable cause. In the Courts view, neither does the February 23, 1999 letter constitute the required notice. The letter did not inform her of the specific acts complained of and their corresponding penalty. The law requires the employer to give the worker to be dismissed two written notices before terminating his employment, namely, 1) a notice which apprises the employee of the particular acts or omissions for which the dismissal is sought; 2) subsequent notice which informs the employee of the employers decision to dismiss him. Additionally, the letter never gave the respondent Galay an opportunity to explain herself, hence denying her due process. In sum, the Court finds that Galay was illegally dismissed, because Heavylift Manila, Inc. failed to show adequately that a valid cause for terminating respondent exists, and because Heavylift Manila, Inc. failed to comply with the twin requirement of notice and hearing.

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016

HELMUT DOSCH vs. NLRC and NORTHWEST AIRLINES, INC. G.R. No. L-51182 July 5, 1983 FACTS: Helmut Dosch an American citizen, married to a Filipina, was the resident Manager of Northwest Airlines, Inc. in the Philippines. He has to his credit eleven (11) years of continuous service with the company, including nine (9) years as Northwest Manager with station at Manila. On August 18, 1975 he received an inter-office communication from R.C. Jenkins, Northwest's Vice President for Orient Region based in Tokyo, promoting him to the position of Director of International Sales and transferring him to Northwest's General Office in Minneapolis, U.S.A., effective the same day. Dosch, acknowledging receipt of the memo, expressed appreciation for the promotion and at the same time regretted that for personal reasons and reasons involving his family, he is unable to accept a transfer from the Philippines Northwest advised petitioner that the company considers the letter of Dosch to be a resignation letter since its Manila office is going to close its business. Northwest then filed a Report on Resignation of Managerial Employee Department of Labor copy thereof furnished petitioner. The Report was contested by the petitioner and the parties were conciliated but failed to agree on a settlement. The case was thus certified to the Executive Labor Arbiter, National Labor Relations Commission, for compulsory arbitration, After hearing, Labor Arbiter Sofronio A. Ona rendered the decision in favor of Dosch. Respondent Northwest appealed from the Labor Arbiter's decision to the NLRC contending that the Labor Arbiter erred in not holding that petitioner could be dismissed for failure/refusal to comply with the valid transfer order and for the employer's loss of trust and confidence of his employee. Petitioner questioned the propriety of raising for the first time on appeal the issue whether or not petitioner's refusal to comply with the transfer order constitutes a just and sufficient cause to dismiss him. The decision en banc of the NLRC reversed the Labor Arbiter's decision and dismissed the case for lack of merit, holding that the hiring, firing, transfer, demotion and promotion of employees has been traditionally Identified as a management prerogative. This is a function associated with the employer's inherent right to control and manage effectively its enterprise. The

free will of management to conduct its own business affairs to achieve its purpose cannot be denied. Thus, it is a valid exercise of management prerogative. ISSUE: WON refusal to accept a promotion constitutes disobedience of management prerogatives and constitutes a sufficient cause for dismissal. HELD: No. The communication informed the petitioner that he was to be promoted to the position of Director of International Sales, and his compensation would be upgraded and the payroll accordingly adjusted. A transfer is a movement from one position to another of equivalent rank, level or salary, without break in the service. Promotion, on the other hand, is the advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary, Whereas, promotion denotes a scalar ascent of a senior officer or employee to another position, higher either in rank or salary, transfer refers to lateral movement from one position to another, of equivalent rank, level or salary. There is no law that compels an employee to accept a promotion, as a promotion is in the nature of a gift or a reward, which a person has a right to refuse. When petitioner refused to accept his promotion to Director of International Sales, he was exercising a right and he cannot be punished for it as qui jure suo utitur neminem laedit. He who uses his own legal right injures no one. Petitioner's inability or his refusal to be transferred was not a valid cause for dismissal. We cannot agree to Northwest's submission that petitioner was guilty of disobedience and insubordination which respondent Commission sustained. The only piece of evidence on which Northwest bases the charge of contumacious refusal is petitioner's letter wherein petitioner acknowledged receipt of the former's memorandum but decline the promotion. We cannot discern even the slightest hint of defiance, much less imply insubordination on the part of petitioner. So must this Court re-enforce the constitutional protection afforded labor and assure the right of workers to security of tenure. Justice and equity call for petitioner's reinstatement.

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PT&T vs. COURT OF APPEALS FACTS: The petitioner is a domestic corporation engaged in the business of providing telegraph and communication services thru its branches all over the country. Sometime in 1997, after conducting a series of studies regarding the profitability of its retail operations, its existing branches and the number of employees, the petitioner came up with a Relocation and Restructuring Program designed to (a) sustain its (PT&Ts) retail operations; (b) decongest surplus workforce in some branches, to promote efficiency and productivity; (c) lower expenses incidental to hiring and training new personnel; and (d) avoid retrenchment of employees occupying redundant positions.1[3] On August 11, 1997, private respondents received separate letters from the petitioner, giving them the option to choose the branch to which they could be transferred. The affected employees were directed to report to their respective relocation assignments. The petitioner offered benefits/allowances to those employees who would agree to be transferred under its new program. Moreover, the employees who would agree to the transfers would be considered promoted. However, the private respondents rejected the petitioners offer. The petitioner sent letters to the private respondents requiring them to explain in writing why no disciplinary action should be taken against them for their refusal to be transferred/relocated. In their respective replies to the petitioners letters, the private respondents explained that the transfers imposed by the management would cause enormous difficulties on the individual complainants. For one, their new assignments involve distant places which would require their separation from their respective families. Dissatisfied with this explanation, the petitioner considered the private respondents refusal as insubordination and willful disobedience to a lawful order; hence, the private respondents were dismissed from work. They forthwith filed their respective complaints against the petitioner before the appropriate sub-regional branches of the NLRC. The complainants declared that their refusal to transfer could not possibly give rise to a valid

dismissal on the ground of willful disobedience, as their transfer was prejudicial and inconvenient; thus unreasonable. The private respondents opined that since their respective transfers resulted in their promotion, they had the right to refuse or decline the positions being offered to them. Resultantly, the refusal to accept the transfer could not have amounted to insubordination or willful disobedience to the lawful orders of the employer. For its part, the petitioner alleged that the private respondents transfers were made in the lawful exercise of its management prerogative and were done in good faith. The transfers were aimed at decongesting surplus employees and detailing them to a more demanding branch. The labor arbiter ruled in favor of the employer ratiocinated that an employer, in the exercise of his management prerogative, may cause the transfer of his employees provided that the same is not attended by bad faith nor would result in the demotion of the transferred employees Upon appeal, the NLRC issued a Resolution which reversed and set aside the decision of the labor arbiter. The NLRC ruled that the petitioner illegally dismissed the private respondents and interpreted the said transfers of the respondents as a promotion; that the movement was not merely lateral but of scalar ascent, considering the movement of the job grades, and the corresponding increase in salaries. As such, the respondents had the right to accept or refuse the said promotions. The NLRC concluded that in the exercise of their right to refuse the promotion given them, they could not be dismissed. The Court of Appeals rendered a Decision affirming the resolution of the NLRC. ISSUE: WON the transfer is a valid exercise of management prerogative HELD: No. As has been enunciated in numerous cases, the issues that can be delved into a petition for review under Rule 45 are limited to questions of law. Thus, the Court is not tasked to calibrate and assess the probative weight of evidence adduced by the parties during trial all over again.2[19] The test of whether the question is one of law or of fact is whether the appellate court can determine the issue raised without reviewing or evaluating the evidence, in

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which case, it is a question of law; otherwise, it is a question of fact. In the case at bar, the petitioner would want this Court to ascertain whether or not the findings of NLRC, as affirmed by the CA, are substantiated by the evidence on record; hence, requiring a review involving questions of facts. For this reason alone, this case should be dismissed. Even if the Court were to review the instant case on its merits, the dismissal of the petition is inevitable. The admissions of the petitioner are conclusive on it. An employee cannot be promoted, even if merely as a result of a transfer, without his consent. A transfer that results in promotion or demotion, advancement or reduction or a transfer that aims to lure the employee away from his permanent position cannot be done without the employees consent. There is no law that compels an employee to accept a promotion for the reason that a promotion is in the nature of a gift or reward, which a person has a right to refuse. Hence, the exercise by the private respondents of their right cannot be considered in law as insubordination, or willful disobedience of a lawful order of the employer. As such, there was no valid cause for the private respondents dismissal.

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016 Management may take for the restitution of the missing Company funds. Private respondents filed a complaint for illegal dismissal against petitioner before the Labor Arbiter who ruled in favor of private respondents. According to the Labor Arbiter, the documentary and testimonial evidence presented by the parties showed that although private respondents were afforded due process before being dismissed, their dismissal was not founded on valid and justifiable grounds. But after considering the strained relations among the parties brought about by the litigation, the Labor Arbiter instead ordered petitioners to pay private respondents separation pay, back wages, moral and/or actual damages and attorneys fees. Petitioners appeal before the NLRC was denied. The NLRC affirmed with modification the decision of the Labor Arbiter by deleting the award of damages and attorneys fees for lack of sufficient basis. Upon appeal to the Court of Appeals, the CA also dismissed the petition for lack of merit. ISSUE: WON the dismissal is a valid exercise of management prerogative HELD: No. The onus of proving that the dismissal of the employee was for a valid and authorized cause rests on the employer and failure to discharge the same would mean that the dismissal was not justified and therefore illegal. To quote petitioners Personnel Manager, we are constrained to terminate your employment or services with the Company effective immediately for gross neglect of duty and loss of confidence. Gross neglect of duty and loss of confidence are just causes for termination of employment by an employer. Gross negligence has been defined as the 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. A perusal of the records of the case does not in any way show that private respondents were even remotely negligent of their duties so as to cause the loss of petitioners funds. Private respondents were able to illustrate with candor and sincerity the procedure they took prior to the loss which was witnessed by an employee of the petitioner. They were in fact subjected to a thorough body search by petitioners lady guard before leaving their place of work on the date in issue, a claim not controverted by petitioners. Moreover, it was not even shown that they had access to the vault where the money was kept. Significantly, 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. Verily, assuming arguendo

NATIONAL BOOKSTORE, INC., and ALFREDO C. RAMOS vs. COURT OF APPEALS FACTS: Petitioner National Bookstore, Inc., employed private respondents Marietta M. Ymasa and Edna L. Gabriel. In 1992, both claimed to have been illegally dismissed from employment, private respondents Ymasa and Gabriel were Cash Custodian and Head Cashier of petitioner. On 28 June 1992, a Sunday, private respondents reported for work at their place of assignment of petitioner to count the previous days sales proceeds as a matter of routine. The counting was done in the presence of a watcher, one Maricen Cupcupin. After preparing the corresponding deposit slips which Cupcupin accordingly signed, the counted money was placed inside two (2) separate plastic bags which were sealed with scotch tapes. Thereafter, private respondent Ymasa put the plastic bags inside her cabinet which she accordingly locked. Since both the branch manager and the assistant were not in their offices, it was only at around closing time in the evening that the two plastic bags earlier stored in private respondent Ymasas cabinet were taken out and were handed over to the assistant manager for safekeeping in the vault. The money was to be deposited in the bank but before being deposited, the money was again counted. The amount for deposit to PCIB was found short of P42,758.70. All efforts made to locate the missing amount failed. The petitioner asked private respondents to explain in writing why they should not be dismissed for the loss of company funds. The Management also placed private respondents under preventive suspension effective immediately. Private respondents explained in writing denying responsibility over the lost company funds. They emphasized that they had no access to petitioners vault and that before leaving the office on both occasions and after doing their tasks, petitioners guard subjected them to a thorough body search. They asserted that [they] have been in the service of the company for the past 13 years and it has been [their] practice to turn over [their] collection to [their] supervisor without any proof of receipt every end of the business day. Moreover, they appealed that they have been honest and sincere to [their] work and religiously rendered [their] services to the company to the best of [their] ability. Petitioner, after finding the explanations of private respondents unsatisfactory, notified of the termination of their services for gross neglect of duty and loss of confidence to take effect immediately and without prejudice to appropriate legal action that the

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016 that private respondents were negligent, although we find otherwise, it could only be a single or an isolated act that cannot be categorized as habitual, hence, not a just cause for their dismissal.

EQUITABLE BANKING CORP., et al. v. NLRC and RICARDO L. SADAC G.R. No. 102467, 13 June 1997, FIRST DIVISION Complaints coming from nine-lawyers of the department handled by Ricardo L. Sadac were addressed to the Chairman of the Board of Directors of the Equitable Banking Corp., accusing Sadac of abusive conduct, inefficiency, mismanagement, ineffectiveness and indecisiveness. A meeting was held to try and resolve the conflicts but such an attempt proved futile. Director Herminio B. Banico was thereafter tasked to look into the matter. Banico submitted his report to the Board with positive findings on the allegations imputed to Sadac, prompting the bank to send a memorandum to Sadac expressing that it no longer had any reason to continue reposing confidence in Sadac and is therefore exercising its prerogative as Sadacs client, under the rules of client and lawyer relationship, to direct another lawyer in substitution. Sadac had been persistent in its request for a formal investigation, and his request having been unheeded, Sadac filed a complaint for illegal dismissal with the National Labor Relations Commission (NLRC ISSUE: Whether Sadac was illegally dismissed on the ground of lack of c onfidence HELD: No. Under the Code, an employee may be validly dismissed if these requisites are attendant: Article 282(c) of the Labor Code provides that "willful breach by the employee of the trust reposed in him by his employer" is a cause for the termination of employment by an employer. Ordinary breach of trust will not suffice, it must be willful and without justifiable excuse. This ground 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; otherwise, the dismissal will be rendered illegal. Equitable Banks stated loss of trust and confidence on Sadac was spawned by the complaints leveled against him by the lawyers in his department.

Concededly, a wide latitude of discretion is given an employer in terminating the employment of managerial employees on the ground of breach of trust and confidence. In order to constitute a just cause for dismissal, however, the act complained of must be related to the performance of the duties of the employee such as would show him to be thereby unfit to continue working fo r the employer. Here, the grievances of the lawyers, in main, refer to what are perceived to be certain objectionable character traits of Sadac. Although petitioners have charged Sadac with allegedly mishandling two cases in his long service with the bank, it is quite apparent that private respondent would not have been asked to resign had it not been for the letter-complaint of his associates in the Legal Department. Confident that no employer-employee existed between the bank and Sadac, Equitable Bank has put aside the procedural requirements for terminating ones employment, i.e., informing the employee of the employer's decision to dismiss him. Failure to comply with these requirements taints the dismissal with illegality.

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Whether or not the dismissal by the private respondent of petitioner constitutes an unfair labor practice and therefore, illegal. Held: Mabeza v. NLRC Facts: Petitioner Norma Mabeza and her co-employees at the Hotel Supreme in Baguio City were asked by the hotels management tosign an instrument attesting to the latters compliance with minimum wage and other labor standard provision. The instrument provides that they have no complaints against the management of the Hotel Supreme as they are paid accordingly and that they are treated well. The petitioner signed the affidavit but refused to go to the Citys Prosecutors Office to confirm the veracity and contents of the affidavit as instructed by management. That same day, as she refused to go to the City Prosecutors Office, she was ordered by the hotel management to turn over the keys to her living quarters and to remove her belongings to the hotels premises. She then filed a leave of absence which was denied by her employer. She attempted to return to work but the hotels cashier told her that she should not report to work and instead continue with her unofficial leave of absence. Three days after her attempt to return to work, she filed a complaint against the management for illegal dismissal before the Arbitration Branch of the NLRC in Baguio City. In addition to that, she alleged underpayment of wages, non-payment of holiday pay, service incentive leave pay, 13th month pay, night differential and other benefits. Peter Ng, in their Answer, argued that her unauthorized leave of absence from work is the ground for her dismissal. He even maintained that her alleged of underpayment and non-payment of benefits had no legal basis. He raises a new ground of loss of confidence, which was supported by his filing of criminal case for the alleged qualified theft of the petitioner. The Labor Arbiter ruled in favor of the hotel management on the ground of loss of confidence. She appealed to the NLRC which affirmed the Labor Arbiters decision. hence, this petition. Issue: The NLRCs decision is reversed. The pivotal question in any case where unfair labor practice on the part of the employer is alleged is whether or not the employer has exerted pressure, in the form of restraint, interference or coercion, against his employees right to institute concerted action for better terms and conditions of employment. Without doubt, the act of compelling employees to sign an instrument indicating that the employer observed labor standard provisions of the law when he might not have, together with the act of terminating or coercing those who refuse to cooperate with the employees scheme constitutes unfair labor practice. The labor arbiters contention that the reason for the monetary benefits received by the petitioner between 1981 to 1987 were less than the minimum wage was because petitioner did not factor in the meals, lodging, electric consumption and water she received during the period of computations. Granting that meals and lodging were provided and indeed constituted facilities, such facilities could not be deducted without the employer complying first with certain legal requirements. Without satisfying these requirements, the employer simply cannot deduct the value from the employees ages. First, proof must be shown that such facilities are customarily furnished by the trade. Second, the provision of deductible facilities must be voluntary accepted in writing by the employee. Finally, facilities must be charged at fair and reasonable value. These requirements were not met in the instant case. Private respondent failed to present anycompany policy to show that the meal and lodging are part of the salary. He also failed to provide proof of the employees written authorization and he failed to show how he arrived at the valuations. More significantly, the food and lodging, or electricity and water consumed by the petitioner were not facilities but supplements. A benefit or privilege granted to an employee for the convenience of the employer is not a facility. The criterion in making a distinction between the two not so much lies in the kind but the purpose. Considering, therefore, that hotel workers are required to work on different shifts and are expected to be available at various odd hours, their ready availability is a necessary matter in the

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operations of a small hotel, such as the private respondents hotel.

HELD: The petition is meritorious. in determining whether the contract is reasonable or not, the trial court should consider the following factors: (a) whether the covenant protects a legitimate business interest of the employer; (b) whether the covenant creates an undue burden on the employee; (c) whether the covenant is injurious to the public welfare; (d) whether the time and territorial limitations contained in the covenant are reasonable; and (e) whether the restraint is reasonable from the standpoint of public policy on the face of the Undertaking, the post-retirement competitive employment ban is unreasonable because it has no geographical limits; respondent is barred from accepting any kind of employment in any competitive bank within the proscribed period. Although the period of one year may appear reasonable, the matter of whether the restriction is reasonable or unreasonable cannot be ascertained with finality solely from the terms and conditions of the Undertaking, or even in tandem with the Release, Waiver and Quitclaim. In cases where an employee assails a contract containing a provision prohibiting him or her from accepting competitive employment as against public policy, the employer has to adduce evidence to prove that the restriction is reasonable and not greater than necessary to protect the employers legitimate business interests. The restraint may not be unduly harsh or oppressive in curtailing the employees legitimate efforts to earn a livelihood and must be reasonable in light of sound public policy. We are not impervious of the distinction between restrictive covenants barring an employee to accept a post-employment competitive employment or restraint on trade in employment contracts and restraints on post-retirement competitive employment in pension and retirement plans either incorporated in employment contracts or in collective bargaining agreements between the employer and the union of employees, or separate from said contracts or collective bargaining agreements which provide that an employee who accepts post retirement competitive employment will forfeit retirement and other benefits

Rivera vs Solidbank FACTS: Petitioner had been working for Solidbank Corporation since July 1, 1977. In December 1994, Solidbank offered two retirement programs to its employees. Rivera applied for retirement under the Special Retirement Program (SRP). Solidbank approved the application and Rivera was entitled to receive the net amount of P963,619.28. Subsequently, Solidbank required Rivera to sign an undated Release, Waiver and Quitclaim. Rivera acknowledged receipt of the net proceeds of his separation and retirement benefits and promised that "[he] would not, at any time, in any manner whatsoever, directly or indirectly engage in any unlawful activity prejudicial to the interest of Solidbank, its parent, affiliate or subsidiary companies, their stockholders, officers, directors, agents or employees, and their successors-in-interest and will not disclose any information concerning the business of Solidbank, its manner or operation, its plans, processes, or data of any kind." On May 1, 1995, the Equitable Banking Corporation (Equitable) employed Rivera as Manager of its Credit Investigation and Appraisal Division of its Consumers Banking Group.12 Upon discovering this, Solidbank First Vice-President for Human Resources Division (HRD) Celia J.L. Villarosa wrote a letter dated May 18, 1995, informing Rivera that he had violated the Undertaking. She likewise demanded the return of all the monetary benefits he received in consideration of the SRP within five (5) days from receipt; otherwise, appropriate legal action would be taken against him. ISSUE: whether or not the employment ban provision contained in the Undertaking is unreasonable, arbitrary, or oppressive, hence contrary to public policy

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or will be obliged to restitute the same to the employer. The strong weight of authority is that forfeitures for engaging in subsequent competitive employment included in pension and retirement plans are valid even though unrestricted in time or geography. We have reviewed the Undertaking which respondent impelled petitioner to sign, and find that in case of failure to comply with the promise not to accept competitive employment within one year from February 28, 1995, respondent will have a cause of action against petitioner for "protection in the courts of law." The Undertaking and the Release, Waiver and Quitclaim do not provide for the automatic forfeiture of the benefits petitioner received under the SRP upon his breach of said deeds. . Thus, the post-retirement competitive employment ban incorporated in the Undertaking of respondent does not, on its face, appear to be unreasonable. The terms of the Undertaking merely states that any breach by petitioner of his promise would entitle respondent to a cause of action for protection in the courts of law. A post-retirement competitive employment restriction is designed to protect the employer against competition by former employees who may retire and obtain retirement or pension benefits and, at the same time, engage in competitive employment. On the assumption that the competitive employment ban in the Undertaking is valid, petitioner is not automatically entitled to return the P963,619.28 he received from respondent. To reiterate, the terms of the Undertaking clearly state that any breach by petitioner of his promise would entitle respondent to a cause of action for protection in the courts of law; as such, restitution of the P963,619.28 will not follow as a matter of course. Respondent is still burdened to prove its entitlement to the aforesaid amount by producing the best evidence of which its case is susceptible. Let this case be REMANDED to the Regional Trial Court of Manila for further proceedings conformably with this decision of the Court.

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Salas v. Aboitiz One Facts Salas was a material controller of Aboitiz, and was tasked with monitoring and maintaining the availability and supply of Quickbox needed by Aboitiz in its dayto-day operations. At one point, Salas had run out of Large Quickbox, hampering Aboitizbusiness operation. Aboitiz then wrote Salas a memorandum requiring him to explain in writing within seventy-two hours why he should not be disciplinarily dealt with for his (i) failure to monitor the stock level of Large Quickbox which led to inventory stock out; and (ii) failure to report to [his] immediate superior the Large Quickbox problem when the stock level was already critical, when the Large Quickbox level was near stock out, and the stock level had a stock out. Five days after, an administrative hearing was conducted to give Salas opportunity to explain his side. Twentytwo days after, Aboitiz sent him a decision notice, terminating him for loss of trust and confidence, effective mid-month. Salas then sent a letter to Mr. Hamoy requesting reconsideration of the decision, asking if he could avail of the early retirement plan, having worked for Aboitiz for ten years already. He also asked to be allowed to tender his resignation instead of being terminated. Lastly, he asked to be employed until the end of the month, so as to have enough time to look for another job. Mr. Hamoy denied the request for early retirement plan, stating that the company's table of discipline provided the penalty of dismissal for the offenses he had committed. The extension, however, was granted, and even extended for a month. Claiming termination without cause, Salas filed with the Labor Arbiter a complaint against Aboitiz and its president Sabin Aboitiz for illegal dismissal

with prayer for reinstatement, and for payment of full backwages, moral and exemplary damages, as well as attorneys fees. Aboitiz responded that there was valid termination, asserting that Salas was dismissed for just cause and with due process, Salas having willfully breached his duty when he ran out of Large Quickbox, justifying the termination of his employment. The Labor Arbiter sustained Salas' dismissal. On appeal, the NLRC reversed. Gross negligence being characterized by want of even slight care acting or omitting to act in a situation where there is a duty to act, willfully and intentionally with a conscious indifference to consequence, Salas could not be held guilty, having done his duty to make proper requisition in advance. Failure to follow-up is not an indicator of remission of duty. Salas can only be guilty of negligence, for failing to properly monitor and document the stocks in his custody. As he admitted during the administrative hearing, there were those which were even missing. Worst, he tampered the records to show that the stock on 31 May 2003 is for 02 June 2003. While there was no intention to defraud the company. The NLRC thus denied his prayer for backwages, and ordered the payment of separation pay instead of reinstatement Aboitiz filed a motion for reconsideration, while Salas sought partial reconsideration of the decision, both of which were denied by the NLRC. Salas and Aboitiz filed petitions for certiorari with the CA. Salas questioned the denial of his prayer for backwages and other monetary benefits, ad the order directing payment of separation pay instead of reinstatement. Aboitiz questioned NLRC's reversal. The CA sustained Salas' dismissal, holding that Salas was guilty of serious misconduct under Art. 282(a) for tampering the records to show that the stock on May 31 2003 was for June 2 2003, gross and habitual neglect under Art. 282(b), and willful breach of the trust (Art. 282 (c)) reposed on Salas by Aboitiz, because as "warehouseman", and therefore a confidential employee, Salas concededly tampered company records to hide his gross and habitual neglect, and

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worse, sold the companys eight units of used airconditioners without authority. Issue: Whether simple negligence can be a basis for dismissal on ground of loss of trust and confidence. Held: Salas was terminated for neglect of duty and willful breach of trust. Gross negligence connotes want or absence of or failure to exercise slight care or diligence, or the entire absence of care. To warrant removal from service, the negligence should not merely be gross, but also habitual. Although it was Salas' duty to monitor and maintain the availability and supply of Quickbox, records show that Salas had made a requisition as early as May 21, 2003, even making several follow-ups. If there is anything that Salas can be faulted for, it is his failure to promptly inform his immediate supervisor of the non-delivery of the requisitioned items. Nevertheless, such failure did not amount to gross neglect of duty or to willful breach of trust, which would justify his dismissal from service. Moreover, there appears nothing to suggest that Salas position was a highly or even primarily confidential position, so that he can be removed for loss of trust and confidence by the employer. A "position of trust and confidence is one where a person is "entrusted with confidence on delicate matters," or with the custody, handling, or care and protection of the employers property. In the records of the case, there is no semblance of willful breach of trust on the part of Salas. It is true that there was erasure or alteration on the bin card. Aboitiz, however, failed to demonstrate that it was done to cover up Salas alleged negligence. Other than the bin card and Aboitizs barefaced assertion, no other evidence was offered to prove the alleged cover-up. The CA, therefore, erred in adopting Aboitizs unsubstantiated assertion to justify Salas dismissal. The loss of trust must be based not on ordinary breach but, in the language of Article 282(c) of the Labor Code, on willful breach. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done

carelessly, thoughtlessly, heedlessly or inadvertently. In this case, Aboitiz utterly failed to establish the requirements prescribed by law and jurisprudence for a valid dismissal on the ground of breach of trust and confidence. Neither can Aboitiz validate Salas dismissal on the ground of seriousmisconduct for his alleged failure to account for unused accountable forms. The charge came only after Salas dismissal. The subject accountable forms were issued to Salas in 2001. Inexplicably, this alleged infraction was never included as ground in the notice of termination. It was only three (3) months after the filing of the complaint for illegal dismissal that Aboitiz asserted that Salas failed to account for these unused accountable forms. It is clear that such assertion of serious misconduct was a mere afterthought to justify the illegal dismissal. Aboitizs reliance on the past offenses of Salas for his eventual dismissal is likewise unavailing. The correct rule has always been that such previous offenses may be used as valid justification for dismissal from work only if the infractions are related to the subsequent offense upon which the basis of termination is decreed. While it is true that Salas had been suspended on for failure to meet the security requirements of the company, and for his failure to assist in the loading at the fuel depot, such offenses are not related to Salas latest infraction, hence, cannot be used as added justification for the dismissal. Undoubtedly, no just cause exists to warrant Salas dismissal. Consequently, he is entitled to reinstatement to his former position without loss of seniority rights, and to payment of backwages. However, the award of backwages is modified because Salas was not entirely faultless.

LABOR RELATIONS - MANAGEMENT PREROGATIVES AND JUST CAUSES OF TERMINATION ALEJANDRO | AROMIN | DIZON | LIWANAG | MANAOG | QUIBOD | RORALDO | SANTOS | 2D 2016

act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. For misconduct to be serious and therefore a valid ground for dismissal, it must be: 1. John Hancock Life Insurance vs. Davis [G.R. No. 169549, September 3, 2008] FACTS: Respondent Joanna Cantre Davis was agency administration officer of petitioner John Hancock Life Insurance Corporation. On October 18, 2000, Patricia Yuseco, petitioners corporate affairs manager, discovered that her wallet was missing. She immediately reported the loss of her credit cards to AIG and BPI Express. To her surprise, she was informed that Patricia Yuseco had just made substantial purchases using her credit cards in various stores in the City of Manila. She was also told that a proposed transaction in Abensons-Robinsons Place was disapproved because she gave the wrong information upon verification. The NBI, in the course of its investigation, obtained a security video from Abensons showing the person who used Yusecos credit cards. Yuseco and other witnesses positively identified the person in the video as respondent. Consequently, the NBI and Yuseco filed a complaint for qualified theft against respondent. Meanwhile, petitioner placed respondent under preventive suspension and instructed her to cooperate with its ongoing investigation. Instead of doing so, however, respondent filed a complaint for illegal dismissal alleging that petitioner terminated her employment without cause. ISSUE: whether or not petitioner substantially proved the presence of valid cause for respondents termination HELD: YES. Petition GRANTED Article 282 of the Labor Code provides: Article 282. Termination by Employer. An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobendience by the employee of the lawful orders of his employer or his representatives in connection with his work; (e) Other foregoing. causes analogous to the of grave and aggravated character and not merely trivial or unimportant and

connected with the work of the employee. In this case, petitioner dismissed respondent based on the NBIs finding that the latter stole and used Yusecos credit cards. But since the theft was not committed against petitioner itself but against one of its employees, respondents misconduct was not work-related and therefore, she could not be dismissed for serious misconduct. Nonetheless, Article 282(e) of the Labor Code talks of other analogous causes or those which are susceptible of comparison to another in general or in specific detailFor an employee to be validly dismissed for a cause analogous to those enumerated in Article 282, the cause must involve a voluntary and/or willful act or omission of the employee. A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an employees moral depravity. Theft committed by an employee against a person other than his employer, if proven by substantial evidence, is a cause analogous to serious misconduct.[16] Did petitioner substantially prove the existence of valid cause for respondents separation? Yes. The labor arbiter and the NLRC relied not only on the affidavits of the NBIs witnesses but also on that of respondent. They likewise considered petitioners own investigative findings. Clearly, they did not merely adopt the findings of the NBI but independently assessed evidence presented by the parties. Their conclusion (that there was valid cause for respondents separation from employment) was therefore supported by substantial evidence. All things considered, petitioner validly dismissed respondent for cause analogous to serious misconduct.

2.

Misconduct involves the transgression of some established and definite rule of action, forbidden