ELEAZAR S. PADILLO v. RURAL BANK OF NABUNTURAN, INC., and MARK S.
What remains applicable, however, is the Labor Code provision on retirement. In the
OROPEZA
FACTS:
Petitioner, the late Eleazar Padillo (Padillo), was an employee of respondent Rural
Bank of Nabunturan, Inc. (Bank) as its SA Bookkeeper. Due to liquidity problems in 2003, the
Bank took out retirement/insurance plans with Philippine American Life and General
Insurance Company (Philam Life) for all its employees in anticipation of its possible closure
and the concomitant severance of its personnel. Respondent Mark Oropeza is the president
and major stockholder of the bank.
Padillo suffered a mild stroke due to hypertension which consequently impaired his
ability to effectively pursue his work. He wrote a letter addressed to Oropeza expressing his
intention to avail of an early retirement package. Despite several follow-ups, his request
remained unheeded. Not having received his claimed retirement benefits, Padillo filed with
the NLRC a complaint for the recovery of unpaid retirement benefits.
The Labor Arbiter dismissed Padillos complaint on the ground that the latter did not
qualify to receive any benefits under Article 300 of the Labor Code as he was only fifty-five
(55) years old when he resigned, while the law specifically provides for an optional retirement
age of sixty (60) and compulsory retirement age of sixty-five (65).
Padillo elevated the matter to the NLRC. The NLRC reversed the Labor Arbiters
ruling. Aggrieved, Oropeza and the Bank filed a petition for certiorari with the CA. The CA
reversed the NLRCs ruling but with modification. It directed the respondents to pay Padillo
the amount of P50,000.00 as financial assistance exclusive of the P100,000.00 Philam Life
Plan benefit.
Displeased with the CAs ruling, Padillo (now substituted by his legal heirs due to his
death) filed the instant petition before the Supreme Court.
ISSUE:
Is Padillo entitled to claim for separation and retirement benefits under the Labor
Code?
HELD:
At the outset, it must be maintained that the Labor Code provision on termination on
the ground of disease under Article 297 does not apply in this case, considering that it was
Padillo and not the Bank who severed the employment relations. A plain reading of the Article
297 of the Labor Code clearly presupposes that it is the employer who terminates the
services of the employee found to be suffering from any disease and whose continued
employment is prohibited by law or is prejudicial to his health as well as to the health of his
co-employees. It does not contemplate a situation where it is the employee who severs his or
her employment ties.
absence of any applicable agreement, an employee must (1) retire when he is at least sixty
(60) years of age and (2) serve at least (5) years in the company to entitle him/her to a
retirement benefit of at least one-half (1/2) month salary for every year of service, with a
fraction of at least six (6) months being considered as one whole year. Notably, these age
and tenure requirements are cumulative and non- compliance with one negates the
employees entitlement to the retirement benefits under Article 300 of the Labor Code
altogether.
In this case, it is undisputed that there exists no retirement plan, collective bargaining
agreement or any other equivalent contract between the parties which set out the terms and
condition for the retirement of employees, with the sole exception of the Philam Life Plan
which premiums had already been paid by the Bank.
Unfortunately, while Padillo was able to comply with the five (5) year tenure
requirement as he served for twenty-nine (29) years he, however, fell short with respect to the
sixty (60) year age requirement given that he was only fifty-five (55) years old when he
retired. Therefore, without prejudice to the proceeds due under the Philam Life Plan,
petitioners claim for retirement benefits must be denied.
Nevertheless, the Court concurs with the CA that financial assistance should be
awarded but at an increased amount. With a veritable understanding that the award of
financial assistance is usually the final refuge of the laborer, considering as well the
supervening length of time which had sadly overtaken the point of Padillos death an
employee who had devoted twenty-nine (29) years of dedicated service to the Bank the
Court, in light of the dictates of social justice, holds that the CAs financial assistance award
should be increased from P50,000.00 to P75,000.00, still exclusive of the P100,000.00
benefit receivable by the petitioners under the Philam Life Plan which remains undisputed.
Finally, the Court finds no bad faith on the part of the Bank and Oropeza as they
were within their right, absent any proof of its abuse, to ignore Padillos misplaced claim for
retirement benefits. Oropezas and the Banks obstinate refusal to accede to Padillos request
is precisely justified by the fact that here lies no basis under any applicable agreement or law
which accords the latter the right to demand any retirement benefits from the Bank. While the
Court mindfully notes that damages may be recoverable due to an abuse of right under
Article 21 in conjunction with Article 19 of the Civil Code the following elements must,
however, obtain: ( 1) there is a legal right or duty; (2) exercised in bad faith; and (3) for the
sole intent of prejudicing or injuring another. Records reveal that none of these elements
exists in the case at bar and thus, no damages on account of abuse of right may he
recovered.
PARTLY GRANTED
ROLANDO L. CERVANTES, v. PAL MARITIME CORPORATION and/or WESTERN
SHIPPING AGENCIES, PTE., LTD.,
FACTS:
Petitioner Rolando Cervantes (Cervantes) was hired as Master on board the vessel M/V
Themistocles by respondent PAL Maritime Corporation, the manning agent of respondent
Western Shipping Agencies, PTE., LTD., (Western Shipping) for a 10-month period.
The owner of the vessel sent a telex message to Cervantes enumerating several complaints
regarding his poor performance. On the following day, Cervantes replied and imputed ill-
motive on the part of the foreign inspectors who were making false accusations against
Filipino crew members. He sent another telex message stating that: “ANYHOW TO AVOID
REPETITION [ON] MORE HARSH REPORTS TO COME. BETTER ARRANGE MY
RELIEVER [AND] C/O BUSTILLO RELIEVER ALSO. UPON ARR NEXT USA LOADING
PORT FOR THEIR SATISFACTION.”
In response to said message, Western Shipping sent a letter informing Cervantes that:
“OWNERS HAVE DECIDED TO RELIEVE YOU UPON PASSING PANAMA CANAL OR
NEXT CONVENIENT PORT. WE TRUST THIS PRE-MATURED ENDING OF CONTRACT IS
MUTUALLY AGREED AND FOR THE BENEFITS OF ALL PARTIES CONCERNED.”
Cervantes replied: “HV NO CHOICE BUT TO ACCEPT YR DECISION. TKS ANYHOW FOR
RELIEVING ME IN NEXT CONVENIENT PORT WILL EASE THE BURDEN THAT I HV FELT
ONBOARD. REST ASSURE VSL WILL BE TURNED OVER PROPERLY TO INCOMING
MASTER.”
When Cervantes was repatriated to Manila, he filed a complaint for illegal dismissal before
the Labor Arbiter. The Labor Arbiter ruled that he was illegally dismissed.
On appeal, the NLRC reversed the decision of the Labor Arbiter. The Court of Appeals
affirmed the NLRC’s decision.
Hence, this present petition for review.
ISSUE: Whether or not Cervantes resigned or was terminated from his employment?
HELD: Cervantes resigned from his employment.
LABOR LAW: resignation
Resignation is the voluntary act of an employee who finds himself in a situation where he
believes that personal reasons cannot be sacrificed in favor of the exigency of the service,
such that he has no other choice but to disassociate himself from his employment. This is
precisely what obtained in this case. The statements in Cervantes’ telex message is plain and
straightforward.
Cervantes also failed to substantiate his claim that he and the Filipino crew members were
being subjected to racial discrimination on board.
Petition is DENIED.
The complainant was given by the owner one month to take corrective measures to improve the
operational and maintenance standards on board the vessel. x x x.
Thereafter, the complainant was informed of the complaint by the respondent as shown in the telefax
message dated July 31, 1995 x x x. While the complainant denied the accusations of the owners, he
made a counter-charge that the owners are racists x x x.
In response to that, the owners were surprised by the accusation of the complainant, considering that
they have been a principal of respondent PAL Maritime for more than four years and have employed
several Filipino seamen x x x.
Instead of complying with the request of the shipowners, the complainant opted to be relieved from his
post. His telefax message in part reads:
“Anyhow to avoid repetition on more harsh reports to come, better arranged my reliever and c/o Bustillo
reliever also. Upon ARR next USA loading port for their satisfaction x x x.”
The foregoing exchange of communications clearly shows that complainant was not dismissed from the
service but he opted to be relieved from his post as master.
While it is true that his resignation was an offshoot of the complaint of the shipowners, the latter were
merely requesting the complainant and the chief officers to improve their performance. The dismissal
aspect was not dismissed at all. It was complainant who brought out the idea and which was accepted
by the shipowner as shown in the telefax message dated Sept. 20, 1995 x x x.
The Commission finds the reply dated Sept. 21, 1995 of the complainant misleading. His statement “I’ve
no choice but to accept your decision,” is not accurate inasmuch as it was he who opted to be relieved
at the next loading port.
His request, which was favorably acted upon by the respondents, certainly negates his claims that he
was illegally dismissed. (Rolando L. Cervantes vs. PAL Maritime Corp., et. al., G.R. No. 175209 quoting
the NLRC decision).
 G.R. No. 185829. April 25, 2012.
ARMANDO ALILING, petitioner, vs. JOSE B. FELICIANO, MANUEL F. SAN MATEO III,
JOSEPH R. LARIOSA, and WIDE WIDE WORLD EXPRESS CORPORATION, respondents.
Nature of the Case: This Petition for Review on Certiorariunder Rule 45 assails and seeks to
set aside the July 3, 2008 Decision1 and December 15, 2008 Resolution2 of the Court of
Appeals (CA), in CA-G.R. SP No. 101309, entitled Armando Aliling v. National Labor
Relations Commission, Wide Wide World Express Corporation, Jose B. Feliciano, Manuel F.
San Mateo III and Joseph R. Lariosa. The assailed issuances modified the Resolutions dated
May 31, 20073 and August 31, 20074 rendered by the National Labor Relations Commission
(NLRC) in NLRC NCR Case No. 00-10-11166-2004, affirming the Decision dated April 25,
20065 of the Labor Arbiter.
FACTS:
Respondent Wide Wide World Express Corporation (WWWEC) offered to employ
petitioner Armando Aliling (Aliling) on June 2, 2004 as “Account Executive (Seafreight
Sales),” with a compensation package of a monthly salary of PhP 13,000, transportation
allowance of PhP 3,000, clothing allowance of PhP 800, cost of living allowance of PhP 500,
each payable on a per month basis and a 14th month pay depending on the profitability and
availability of financial resources of the company. The offer came with a six (6)-month
probation period condition with this express caveat: “Performance during probationary period
shall be made as basis for confirmation to Regular or Permanent Status.”
On June 11, 2004, Aliling and WWWEC inked an Employment Contract under the
terms of conversion to regular status shall be determined on the basis of work performance;
and employment services may, at any time, be terminated for just cause or in accordance
with the standards defined at the time of engagement.
However, instead of a Seafreight Sale assignment, WWWEC asked Aliling to handle
Ground Express (GX), a new company product launched on June 18, 2004 involving
domestic cargo forwarding service for Luzon. Marketing this product and finding daily
contracts for it formed the core of Aliling’s new assignment.
A month after, Manuel F. San Mateo III (San Mateo), WWWEC Sales and Marketing
Director, emailed Aliling to express dissatisfaction with the latter’s performance.
On September 25, 2004, Joseph R. Lariosa (Lariosa), Human Resources Manager of
WWWEC, asked Aliling to report to the Human Resources Department to explain his absence
taken without leave from September 20, 2004.
Aliling responded two days later. He denied being absent on the days in question,
attaching to his reply-letter a copy of his timesheet which showed that he worked
from September 20 to 24, 2004. Aliling’s explanation came with a query regarding the
withholding of his salary corresponding to September 11 to 25, 2004.
On October 15, 2004, Aliling tendered his resignation to San Mateo. While WWWEC
took no action on his tender, Aliling nonetheless demanded reinstatement and a written
apology, claiming in a subsequent letter dated October 1, 2004 to management that San
Mateo had forced him to resign.
Lariosa’s response-letter of October 1, 2004, informed Aliling that his case was still in
the process of being evaluated. On October 6, 2004, Lariosa again wrote, this time to
advise Aliling of the termination of his services effective as of that date owing to his “non-
satisfactory performance” during his probationary period. Records show that Aliling, for the
period indicated, was paid his outstanding salary.
However, or on October 4, 2004, Aliling filed a Complaint for illegal dismissal due to
forced resignation, nonpayment of salaries as well as damages with the NLRC against
WWWEC. Appended to the complaint was Aliling’s Affidavit dated November 12, 2004, in
which he stated: “5. At the time of my engagement, respondents did not make known to me
the standards under which I will qualify as a regular employee.”
Refuting Aliling’s basic posture, WWWEC stated that in the letter offer and
employment contract adverted to, WWWEC and Aliling have signed a letter of appointment
on June 11, 2004 containing the terms of engagement.
WWWEC also attached to its Position Paper a memo dated September 20, 2004 in
which San Mateo asked Aliling to explain why he should not be terminated for failure to meet
the expected job performance, considering that the load factor for the GX Shuttles for the
period July to September was only 0.18% as opposed to the allegedly agreed upon load of
80% targeted for August 5, 2004. According to WWWEC, Aliling, instead of explaining
himself, simply submitted a resignation letter.
On April 25, 2006, the Labor Arbiter issued a decision declaring that the grounds
upon which complainant’s dismissal was based did not conform not only the standard but
also the compliance required under Article 281 of the Labor Code, Necessarily, complainant’s
termination is not justified for failure to comply with the mandate the law requires.
Respondents should be ordered to pay salaries corresponding to the unexpired portion of the
contract of employment and all other benefits amounting to a total of P35,811.00 covering the
period from October 6 to December 7, 2004.
The Labor Arbiter explained that Aliling cannot be validly terminated for non-
compliance with thw quota threshold absent a prior advisory of the reasonable standards
upon which his performance would be evaluated.
Both parties appealed the decision to the NLRC, which affirmed the decision of the
Labor Arbiter. The separate motions for reconsideration were also denied by the NLRC.
The CA anchored its assailed action on the strength of the following premises: (a)
respondents failed to prove that Aliling’s dismal performance constituted gross and habitual
neglect necessary to justify his dismissal; (b) not having been informed at the time of his
engagement of the reasonable standards under which he will qualify as a regular employee,
Aliling was deemed to have been hired from day one as a regular employee; and (c) the
strained relationship existing between the parties argues against the propriety of
reinstatement.
Hence, the instant petition.
ISSUE: whether petitioner was validly dismissed
Petitioner was illegally dismissed
To justify fully the dismissal of an employee, the employer must, as a rule, prove that the
dismissal was for a just cause and that the employee was afforded due process prior to dismissal. As a
complementary principle, the employer has the onus of proving with clear, accurate, consistent, and
convincing evidence the validity of the dismissal.[34]
WWWEC had failed to discharge its twin burden in the instant case.
First off, the attendant circumstances in the instant case aptly show that the issue of
petitioner’s alleged failure to achieve his quota, as a ground for terminating employment, strikes the
Court as a mere afterthought on the part of WWWEC. Consider: Lariosa’s letter of September 25, 2004
already betrayed management’s intention to dismiss the petitioner for alleged unauthorized absences.
Aliling was in fact made to explain and he did so satisfactorily. But, lo and behold, WWWEC
nonetheless proceeded with its plan to dismiss the petitioner for non-satisfactory performance, although
the corresponding termination letter dated October 6, 2004 did not even specifically state Aliling’s “non-
satisfactory performance,” or that Aliling’s termination was by reason of his failure to achieve his set
quota.
What WWWEC considered as the evidence purportedly showing it gave Aliling the chance to
explain his inability to reach his quota was a purported September 20, 2004 memo of San Mateo
addressed to the latter. However, Aliling denies having received such letter and WWWEC has failed to
refute his contention of non-receipt. In net effect, WWWEC was at a loss to explain the exact just
reason for dismissing Aliling.
At any event, assuming for argument that the petitioner indeed failed to achieve his sales
quota, his termination from employment on that ground would still be unjustified.
Article 282 of the Labor Code considers any of the following acts or omission on the part of the
employee as just cause or ground for terminating employment:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representatives; and
(e) Other causes analogous to the foregoing. (Emphasis supplied)
In Lim v. National Labor Relations Commission,[35]the Court considered inefficiency as an
analogous just cause for termination of employment under Article 282 of the Labor Code:
We cannot but agree with PEPSI that “gross inefficiency” falls within the purview of “other
causes analogous to the foregoing,” this constitutes, therefore, just cause to terminate an employee
under Article 282 of the Labor Code. One is analogous to another if it is susceptible of comparison with
the latter either in general or in some specific detail; or has a close relationship with the latter. “Gross
inefficiency” is closely related to “gross neglect,” for both involve specific acts of omission on the part of
the employee resulting in damage to the employer or to his business. In Buiser vs. Leogardo, this Court
ruled that failure to observed prescribed standards to inefficiency may constitute just cause for
dismissal. (Emphasis supplied.)
It did so anew in Leonardo v. National Labor Relations Commission[36] on the following
rationale:
An employer is entitled to impose productivity standards for its workers, and in fact, non-
compliance may be visited with a penalty even more severe than demotion. Thus,
[t]he practice of a company in laying off workers because they failed to make the work quota
has been recognized in this jurisdiction. (Philippine American Embroideries vs. Embroidery and
Garment Workers, 26 SCRA 634, 639). In the case at bar, the petitioners' failure to meet the sales
quota assigned to each of them constitute a just cause of their dismissal, regardless of the permanent
or probationary status of their employment. Failure to observe prescribed standards of work, or to
fulfill reasonable work assignmentsdue to inefficiency may constitute just cause for dismissal. Such
inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to
complete the same within the allotted reasonable period, or by producing unsatisfactory results. This
management prerogative of requiring standards may be availed of so long as they are exercised in good
faith for the advancement of the employer's interest. (Emphasis supplied.)
In fine, an employee’s failure to meet sales or work quotas falls under the concept of gross
inefficiency, which in turn is analogous to gross neglect of duty that is a just cause for dismissal under
Article 282 of the Code. However, in order for the quota imposed to be considered a valid productivity
standard and thereby validate a dismissal, management’s prerogative of fixing the quota must be
exercised in good faith for the advancement of its interest. The duty to prove good faith, however, rests
with WWWEC as part of its burden to show that the dismissal was for a just cause. WWWEC must
show that such quota was imposed in good faith. This WWWEC failed to do, perceptibly because it
could not. The fact of the matter is that the alleged imposition of the quota was a desperate attempt to
lend a semblance of validity to Aliling’s illegal dismissal. It must be stressed that even WWWEC’s sales
manager, Eve Amador (Amador), in an internal e-mail to San Mateo, hedged on whether petitioner
performed below or above expectation:

Could not quantify level of performance as he as was tasked to handle a new product (GX).
Revenue report is not yet administered by IT on a month-to-month basis. Moreover, this in a way is an
experimental activity. Practically you have a close monitoring with Armand with regards to his
performance. Your assessment of him would be more accurate.

Being an experimental activity and having been launched for the first time, the sales of GX
services could not be reasonably quantified. This would explain why Amador implied in her email that
other bases besides sales figures will be used to determine Aliling’s performance. And yet, despite such
a neutral observation, Aliling was still dismissed for his dismal sales of GX services. In any event,
WWWEC failed to demonstrate the reasonableness and the bona fides on the quota imposition.

Employees must be reminded that while probationary employees do not enjoy permanent
status, they enjoy the constitutional protection of security of tenure. They can only be terminated for
cause or when they otherwise fail to meet the reasonable standards made known to them by the
employer at the time of their engagement.[37]Respondent WWWEC miserably failed to prove the
termination of petitioner was for a just cause nor was there substantial evidence to demonstrate the
standards were made known to the latter at the time of his engagement. Hence, petitioner’s right to
security of tenure was breached.

x x x."
International School of Manila vs. International School Union
FACTS:
Santos was first hired by the School in 1978 as a full-time Spanish language teacher. In April
1992, Santos filed for and was granted a leave of absence for the school year 1992-1993.
She came back from her leave of absence sometime in August 1993. 5 Upon Santos’s return
to the School, only one class of Spanish was available for her to teach. Thus, for the school
year 1993-1994, Santos agreed to teach one class of Spanish and four other classes of
Filipino that were left behind by a retired teacher.6 Since it was Santos’s first time to teach
Filipino, the School’s high school administrators observed the way she conducted her
classes.
In the Classroom Standards Evaluation Form,7 Hill remarked that the lesson plan that Santos
provided "was written with little detail given." Santos was also noted as needing improvement
in the following criteria: (1) uses effective questioning techniques; (2) is punctual and time
efficient; (3) states and enforces academic and classroom behavior expectations in a positive
manner; and (4) reinforces appropriate behavior. Hill also stated that Santos’s management
of the class left much to be desired. Hill added that "[t]he beginning and the end of the class
were poorly structured with students both coming late and leaving early with no apparent
expectations to the contrary."
On January 17, 1994, Santos submitted to the Personnel Department of the School a
memorandum/form,8 which stated that she planned to return to the School staff for the said
school year and she did not prefer a change of teaching assignment.
On May 30, 1994, Hill completed a Summary Evaluation Form 10 of Santos’s performance. Hill
stated, among others, that Santos should improve on managing the students’ punctuality and
time efficiency. Hill added that instructions were not well stated and presented to the class.
He said that Santos needed to identify and state positively the expectations she has for the
students. In a Professional Standards Form 11 accomplished on the same date, Santos was
found to be in need of improvement in these areas: (1) has in-depth knowledge of the
appropriate subject matter; and (2) clearly defines consequences of inappropriate behavior
and is consistent in follow through.
In the meantime, for the school year 1994-1995, Santos agreed to teach five classes of
Filipino.12 On November 7, 1994, Santos also informed the School of her assignment
preference for the incoming school year 1995-1996. In a memorandum/form 13 submitted to
the Personnel Department of the School, Santos indicated that she did not prefer a change of
teaching assignment. In the school year 1995-1996, Santos again taught five classes of
Filipino.14
On February 1, 1996, then Assistant Principal Peter Loy observed a Filipino IBS1 class of
Santos. In the Classroom Standards Evaluation Form 15 he completed thereafter, Loy noted
that Santos needed improvement on the following aspects: (1) has daily lesson plans written
out; (2) incorporates a variety of activities, resources and teaching strategies into the lesson;
(3) plans for the entire instructional period; (4) provides an instructional sequence which is
clear and logical, leading to stated objectives; (5) uses effective questioning techniques; (6)
develops rapport with and between students by creating a supportive environment; (7) is
punctual and time efficient; and (8) reinforces appropriate behavior. Loy also observed that
Santos did not meet the minimum standards in these areas of concern: (1) has clearly
defined lesson objectives that tie into unit objectives as well as into the school curriculum;
and (2) states and enforces academic and classroom behavior expectations in a positive
manner.
Thereafter, it seemed that the positive reviews of Santos’s performance were gradually
replaced by renewed concerns on her planning.
Subsequently, on April 10, 1997, McCauley sent a letter 42 to Santos directing her to explain in
writing why her employment from the School should not be terminated because of her failure
to meet the criteria for improvement set out in her Professional Growth Plan and her
substandard performance as a teacher.
In her reply letter43 dated April 14, 1997, Santos blamed the School for her predicament. She
said that, in the last few years, she had been forced to teach Filipino, a subject which she had
no preparation for. The School allegedly made this happen against her objections and despite
the fact that she had no training in Filipino linguistics and literature. Santos also asked for
clarification on why she was being asked to explain and the reasons therefor.The charge
against Santos was gross inefficiency or negligence in the performance of her assigned work.
In a letter46 dated May 29, 1997, McCauley informed Santos that he was adopting the
recommendation of the investigation committee that Santos’s employment from the School
cannot be continued.
On June 26, 1997, the ISAE filed a complaint47 against the petitioners, alleging the following
causes of action: (1) unfair labor practice; (2) illegal dismissal; (3) moral and exemplary
damages; (4) violation and refusal to comply with grievance procedures in the CBA; and (5)
unresolved grievance matter. The reliefs prayed for included reinstatement and the payment
of backwages and damages. The complaint was docketed as NLRC-NCR Case No. 00-06-
04491-97. The complaint was subsequently amended48 to include as complainants
Evangeline Santos, Joselyn Rucio and Methelyn Filler.49
On April 3, 2001, the Labor Arbiter rendered a Decision50 finding, among others, that Santos
was illegally terminated from her employment.
On February 28, 2003, the NLRC issued a Resolution,53 which affirmed the decision of the
Labor Arbiter
On November 17, 2004, the Court of Appeals promulgated the assailed decision the decretal
portion of which provides that the instant petition is PARTLY GRANTED.
Brushing aside the argument that Santos did not exercise slight care or diligence in the
performance of her duties, the Court of Appeals pointed out that Santos did exert efforts to
improve her performance, which led to a revision of her original Professional Growth Plan.
Echoing the findings of the Labor Arbiter and the NLRC, the Court of Appeals agreed that
Santos could not be said to be habitually neglectful of her duties after she was "caught once
with an inadequately prepared lesson plan in 1997." 59 Although the Court of Appeals
acknowledged that Santos’s performance as a teacher was not at all satisfactory, it ruled that
the same did not warrant the penalty of dismissal. To the appellate court, a penalty of
suspension from work was more equitable under the circumstances. As a matter of right,
Santos was adjudged to be entitled to reinstatement and backwages. However, given the
deep antagonism between her and the petitioners, the Court of Appeals ordered the award of
separation pay in lieu of reinstatement.
The Supreme Court finds equitable and proper the award of separation pay in favor
of Santos in view of the length of her service with the School prior to the events that led to the
termination of her employment.— In the instant case, the Court finds equitable and proper the
award of separation pay in favor of Santos in view of the length of her service with the School
prior to the events that led to the termination of her employment. To recall, Santos was first
employed by the School in 1978 as a Spanish language teacher. During this time, the records
of this case are silent as to the fact of any infraction that she committed and/or any other
administrative case against her that was filed by the School. Thus, an award of separation
pay equivalent to one-half (1/2) month pay for every year of service is awarded in favor of
Santos on grounds of equity and social justice.

ISSUE:

a) WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT

RESPONDENT EVANGELINE SANTOS WAS ILLEGALLY DISMISSED; and

b) WHETHER OR NOT RESPONDENT EVANGELINE SANTOS IS ENTITLED TO

REINSTATEMENT OR SEPARATION PAY WITH BACKWAGES.61

HELD:

In view of the acts and omissions of Santos that constituted gross inefficiency, the
Court finds that the School was justified in not keeping her in its employ.—In view of the acts
and omissions of Santos that constituted gross inefficiency, the Court finds that the School
was justified in not keeping her in its employ. At this point, the Court needs to stress that
Santos voluntarily agreed to teach the Filipino classes given to her when she came back from
her leave of absence. Said classes were not forced upon her by the School. This much she
admitted in the hearing of the case before the Labor Arbiter. She stated therein that for the
school year 1993-1994, she was given the option to teach only one Spanish class and not
have any Filipino teaching loads. She, however, said that if she took that option she would
have been underpaid and her salary would not have been the same. Moreover, for the school
years 1994-1995 and 1995-1996, she made known to the School that she did not prefer a
change in teaching assignment. Thus, when she consented to take on the Filipino classes, it
was Santos’ responsibility to teach them well within the standards of teaching required by the
School, as she had done previously as a teacher of Spanish. Failing in this, she must answer
for the consequences.

In view of the finding that Santos was validly dismissed from employment, she would
not ordinarily be entitled to separation pay. An exception to this rule is when the court finds
justification in applying the principle of social justice according to the equities of the case.—In
view of the finding that Santos was validly dismissed from employment, she would not
ordinarily be entitled to separation pay. An exception to this rule is when the court finds
justification in applying the principle of social justice according to the equities of the case.
Dreamland Hotel & Prentice v. Johnson
FACTS:
Petitioner Dreamland with its President, Westley Prentice, is a corporation engaged
in the hotel, restaurant and allied businesses. Respondent Stephen B. Johnson is an
Australian citizen who came to the Philippines as a businessman/investor without the
authority to be employed as the employee/officer of any business as he was not able to
secure his Alien Employment Permit.
Sometime on June 21, 2007, Prentice and Johnson entered into an Employment
Agreement, which stipulates among others, that Johnson shall serve as Operations Manager
of Dreamland from August 1, 2007 and shall serve as such for a period of three (3) years.
From the start of August 2007, as stipulated in the Employment Agreement,
respondent Johnson already reported for work. It was then that he found out to his dismay
that the resort was far from finished. However, he was instructed to supervise construction
and speak with potential guests. He also undertook the overall preparation of the guestrooms
and staff for the opening of the hotel, even performing menial tasks.
As Johnson remained unpaid since August 2007 and he has loaned all his money to
petitioners, he asked for his salary after the resort was opened in October 2007 but the same
was not given to him by petitioners. Johnson became very alarmed with the situation as it
appears that there was no intention to pay him his salary.
On November 3, 2007, after another embarrassment was handed out by petitioner
Prentice in front of the staff, which highlighted his lack of real authority in the hotel and the
disdain for him by petitioners, respondent Johnson was forced to submit his resignation.
Johnson filed a case for illegal dismissal and non-payment of salaries against petitioners.
LA dismissed the complaint, holding that Johnson voluntarily resigned from his
employment. On appeal, the NLRC reversed the LAs decision and ordered petitioners to pay.
CA dismissed the appeal on the ground of technicalities.
ISSUE: Whether or not Johnson voluntarily resigned
HELD: No. NLRC decision reinstated.
Labor Law - Constructive dismissal
Although the resort did not open until approximately 8th October 2007, Johnson's
employment began, as per Employment Agreement, on 1st August 2007. During the interim
period, Johnson was frequently instructed by Prentice to supervise the construction staff and
speak with potential future guests who visited the site out of curiosity.
The petitioners maintain that they have paid the amount of P7,200.00 to Johnson for his three
weeks of service from October 8, 2007 until November 3, 2007, the date of Johnson's
resignation,which Johnson did not controvert. Even so, the amount the petitioners paid to
Johnson as his three-week salary is significantly deficient as Johnson's monthly salary as
stipulated in their contract isP60,000.00. Thus, the amount which Johnson should have been
paid is P45,000.00 and not P7,200.00. In light of this deficiency, there is more reason to
believe that the petitioners withheld the salary of Johnson without a valid reason.
It only goes to show that while it was Johnson who tendered his resignation, it was due to the
petitioners acts that he was constrained to resign. The petitioners cannot expect Johnson to
tolerate working for them without any compensation.
Since Johnson was constructively dismissed, he was illegally dismissed. Thus, an illegally
dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs
provided are separate and distinct. In instances where reinstatement is no longer feasible
because of strained relations between the employee and the employer, separation pay is
granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable,
or separation pay if reinstatement is no longer viable, and backwages.
Labor Law - doctrine of strained relations
The accepted doctrine is that separation pay may avail in lieu of reinstatement if
reinstatement is no longer practical or in the best interest of the parties. Separation pay in lieu
of reinstatement may likewise be awarded if the employee decides not to be reinstated.
Under the doctrine of strained relations, the payment of separation pay is considered an
acceptable alternative to reinstatement when the latter option is no longer desirable or viable.
In the present case, the NLRC found that due to the strained relations between the parties,
separation pay is to be awarded to Johnson in lieu of his reinstatement.
The NLRC held that Johnson is entitled to backwages from November 3, 2007 up to the
finality of the decision; separation pay equivalent to one month salary; and unpaid salaries
from August 1, 2007 to November 1, 2007 amounting to a total of P172,800.00.
While the Court agrees with the NLRC that the award of separation pay and unpaid salaries
is warranted, the Court does not lose sight of the fact that the employment contract states
that Johnson's employment is for a term of three years.
Accordingly, the award of backwages should be computed from November 3, 2007 to August
1, 2010 - which is three years from August 1, 2007. Furthermore, separation pay is computed
from the commencement of employment up to the time of termination, including the imputed
service for which the employee is entitled to backwages.
CHUA – QUA vs. CLAVE G.R. No. L-49549 August 30, 1990
A Landmark Case
A truly remarkable case wherein the Supreme Court ruled in favor of “love”. The setting of the
case was in when marriage between minors was still legal, way before the Family Code. In
this case, a 30 year old teacher had married her student which prompted the school to
terminate her. And against all odds the Supreme Court Ruled in favor of her, hence, creating
this Landmark Case. “truism that the heart has reasons of its own which reason does
not know.”
FACTS:
This would have been just another illegal dismissal case were it not for the
controversial and unique situation that the marriage of herein petitioner, then a classroom
teacher, to her student who was fourteen (14) years her junior, was considered by the school
authorities as sufficient basis for terminating her services.
Finding that there is no substantial evidence of the imputed immoral acts, it follows
that the alleged violation of 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. The deviation of the circumstances of their marriage from the usual societal
pattern cannot be considered as a defiance of contemporary social mores.
SIDE NOTES:
This case has been very controversial as it involved an unconventional love story
between a teacher and her student (who was a minor). The Supreme Court, in deciding this
case, actually sided with herein petitioner. But as observed, it was not because of love that
the court took the petitioner’s side. It was because there was no substantial evidence of the
teacher’s alleged abusive and unethical conduct. If at all, the Court’s quoting of the famous
“the heart has reasons of its own which reason does not know” is only an expression of its
belief that to love unconventionally is not necessarily immoral.

The case was about an affair and marriage of 30 years old teacher Evelyn Chua in
Tay Tung High School in Bacolod City to her 16 years old student. The petitioner teacher was
suspended without pay and was terminated of his employment “for Abusive and Unethical
Conduct Unbecoming of a Dignified School Teacher” which was filed by a public respondent
as a clearance for termination.

ISSUE:

Was her dismissal valid?

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?

RULING:

The Supreme Court declared the dismissal illegal saying:

“Private respondent [the school] utterly failed to show that petitioner [30-year old lady
teacher] took advantage of her position to court her student [16-year old]. 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.”
CHUA–QUA vs. CLAVE (1990)
"The heart has reasons of its own which reason does not know"
- Blaise Pascal
"There are stories of love deemed by others as inappropriate. However, true love defies
odds, move mountains, and for this instance, compels a Supreme Court Justice to be extra-
mushy in his ruling."
Law students love this case.. in fact it was considered one of the well read cases
searched in its original script. The yellowing pages of the SCRA.
Not only because of the tidal reversal decisions it went through from administrative,
quasi-judicial, and judicial bodies that took cognizance of it by virtue of their respective
jurisdictions, but the controversy and the uniqueness of the situation that were it not for it this
would have been just another case of illegal dismissal.
In fact one tiny portion of the decision was lifted and went down in courts history as
one of the Top 5 Best Supreme Court Love Quotes of all times. The words topped the survey
and the case etched its own engraving as one of the most favorite landmark cases of all
times.
"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'." - Chua-Qua vs Clave 189 SCRA 117
The underlined words were of course borrowed from a famous saying of Blaise
Pascal. But the effect had perfectly complemented and fit the whole structure of this high
court's lingering quote upon which it was invoked.
The case was decided by a three (3) man division chaired by no less than
Justice Ameurfina Melencio Herrera, the other two justices were Justice Paras and Justice
Padilla. Indeed a woman's sense of judgment is never deserving to be downplayed.
Although I am not sure about the ponente who wrote this decision but I'm thinking it
was Justice Regalado who penned it. Judging by the choice of words mannerly pervading
with great Filipino writers that proliferated and stood engraved in the halls of our Modern
Philippine Literature, the likes of Jose Garcia Villa, Nick Joaquin, Carlos Bulosan, Sionil
Jose. Justice Florenz D. Regalado is considered one of the high court's illustrious judicial
writers of all times.
Some none-legal writers nowadays even refer to it (the Chua-Clave case) as "A truly
remarkable case wherein the Supreme Court ruled in favor of “love”. Yes. This was a love
story. The case was decided in 1990 but the dispute arose in 1976. This is a story of a
teacher who fell in-love with her student and the student felt the same. Or should we
appropriately say the student falling in love with his teacher and the teacher in the course of
her lessons have learned to develop feelings for her student.
What aggravated the case is the marriage of both. Herein petitioner (30 years of
age) who as we have established was a classroom teacher, entered into matrimony with her
student who was fourteen (14) years her junior. This was considered by the school authorities
as sufficient basis for terminating her services.
Here's the facts of the case:
Private respondent Tay Tung High School, Inc. is an educational institution
in Bacolod City. Petitioner herein Evelyn Chua was a teacher therein employed
since 1963 and was the class adviser in the sixth grade during 1976 where
one Bobby Qua was enrolled.
It was the policy of the school to extend remedial instructions to its students
usually conducted after the regular class hours and so therefore Bobby Qua was
imparted with such instructions in school by petitioner teacher Evelyn Chua same as
other students as well.
But here's the thing..
In the course thereof?.. the couple fell in love.
And on December 24, 1975, they got married. Evelyn was 30 years old and
Bobby, 16 years old, an age gap of 14 years.
LABOR ARBITER:
Consequently, on February 4, 1976 Tay Tung High School filed with
the Labor Arbiter an application for clearance to terminate Evelyn’s employment
stating her “actuations as a teacher constitute serious misconduct, if not an
immoral act, a breach of trust and confidence reposed upon her and, thus, a
valid and just ground to terminate her services”. And that she violated the Code
of Ethics for Teachers, the pertinent provision of which states that 'a school official
or teacher should never take advantage of his/her position to court a pupil or
student’.” And that such act were "abusive and unethical amounting to a
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."
Evelyn Chua was placed under suspension without pay on March 12, 1976.
The Bacolod City NLRC Executive Labor Arbiter to whom the case was certified for
resolution, required the parties to submit their position papers and supporting
evidence. Affidavits were submitted by private respondent school to bolster its
contention that petitioner Evelyn Chua..
First blood drawn... listen to this..
"defying all standards of decency, recklessly took advantage of her
position as school teacher, lured a Grade VI boy under her advisory section
and 15 years her junior into an amorous relation."
Tsk tsk - Such strong conclusive words huh?..
What the school was trying to establish here was the existence of an
amorous relationship manifested within the premises of the school, inside the
classroom, and within the sight of some employees. More specifically, private
respondent raised issues on the fact that petitioner stayed alone with Bobby Qua in
the classroom after school hours when everybody had gone home, with one door
allegedly locked and the other slightly open.
But to the contrary..
Neither was there a direct evidences, or actual witnesses introduced to
show that immoral acts were committed during those times, all the respondent
school could do was point out that said scenario was enough for a sane and credible
mind to imagine and conclude what transpired and took place during those times.
Now comes the arbitrary decision of the Labor Arbiter..
On September 17, 1976, Executive Labor Arbiter Jose Y. Aguirre, Jr.,
WITHOUT CONDUCTING ANY FORMAL HEARING, rendered an "Award" in favor
of private respondent granting the clearance to terminate the employment of
petitioner.
APPEAL TO THE NLRC:
Petitioner, however, denied having received any copy of the affidavits
referred to. And so on October 7, 1976, petitioner appealed to the National Labor
Relations Commission claiming denial of due process further contending that there
was nothing immoral, nor was it abusive and unethical conduct unbecoming of a
dignified school teacher, for a teacher to enter into lawful wedlock with her student.
Our heroine fights back..
December 27, 1976, the National Labor Relations Commission UNANIMOUSLY
REVERSED the Labor Arbiter's decision and ordered petitioner's reinstatement with
back-wages.
Here's the NLRC's findings..
The Commission stated "Even if we have to strain our sense of moral values
to accommodate the conclusion of the Arbiter, we could not deduce anything
immoral or scandalous about a girl and a boy talking inside a room after classes with
lights on and with the door open. Furthermore, Tay Tung High School naively
insisted that the clearance application was precipitated by immoral acts which did not
lend dignity to the position of Evelyn Chua. Aside from such gratuitous assertions of
immoral acts or conduct unbecoming, no evidence to support such claims was
introduced by the school officials. We reviewed the sequence of events from the
beginning of the relationship between appellant Evelyn Chua and Bobby Qua up to
the date of the filing of the present application for clearance in search of evidence
that could have proved detrimental to the image and dignity of the school but none
has come to our attention."
APPEAL TO DOLE
Here now comes the school elevating the case to the Minister of Labor who,
on March 30, 1977, REVERSED the decision of the NLRC. The teacher was,
however, awarded six (6) months salary as financial assistance.
APPEAL to the OFFICE OF THE PRESIDENT OF THE PHIL.:
Petitioner appealed the said decision to the Office of the President of the
Philippines. (Ferdinand E. Marcos). After the corresponding exchanges, on
September 1, 1978 said office, through Presidential Executive Assistant Hon. Jacobo
C. Clave rendered its decision REVERSING the DOLE decision. Private respondent
SCHOOL was ordered to reinstate petitioner EVELYN CHUA 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.
So.. tsk tsk tsk.. considering that the case run the gamut of three prior
adjudications of such administrative and quasi-judicial bodies with alternating
reversals, well.. of course we would think that the petitioner teacher's calvary is now
ended..
but wait.. there's more..
In a resolution dated December 6, 1978, public respondent Hon. Jacobo C.
Clave, acting on a motion for reconsideration of herein private respondent school
and despite opposition thereto, RECONSIDERED and MODIFIED the aforesaid
decision, this time giving due course to the application of Tay Tung High School, Inc.
to terminate the services of petitioner as classroom teacher but giving her separation
pay equivalent to her six (6) months salary.
So.. ehem.. dig that.. it's like winning the lottery and dying the next day..
Public respondent Hon. Jacobo C. Clave reasoned out and may I quote "This
Office did not limit itself to the legal issues involved in the case, but went further to
view the matter from the standpoint of policy which involves the delicate task of
rearing and educating of children whose interest must be held paramount in the
school community, and on this basis, this Office deemed it wise to uphold the
judgment and action of the school authorities in terminating the services of a teacher
whose actuations and behavior, in the belief of the school authorities, had spawned
ugly rumors that had cast serious doubts on her integrity, a situation which was
considered by them as not healthy for a school campus, believing that a school
teacher should at all times act with utmost circumspection and conduct herself
beyond reproach and above suspicion" (The fella has a point.. let's see if it will
hold..)
And so our heroine had no choice but to continue the fight elevating the case
to the Supreme Court by virtue of a petition for certiorari..
ISSUE:
Was her dismissal valid? Did petitioner commit an immoral act as a teacher
warranting dismissal from work?
RULING:
The Supreme Court declared the dismissal illegal saying:
“Private respondent (the school) utterly failed to show that petitioner (30-year
old lady teacher) took advantage of her position to court her student (16-year old).
The petitioner’s dismissal was based solely on her marriage to Bobby Qua and the
imputed charges of abuse, immorality and unethical conduct were unsubstantiated.
Finding that there is no substantial evidence of the imputed immoral acts, it follows
that the alleged violation of Code of Ethics governing school teachers would have no
basis.
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.”
Petition for certiorari granted, private respondent is ordered to pay petitioner
back wages equivalent to three years without deduction and separation pay of one
month for every year of service.
Here's a more concrete basis.
Court said.. 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 employerand his failure to do so would result in a finding
that the dismissal is unjustified. The charge against petitioner not having been
substantiated, we declare her dismissal as unwarranted and illegal.
However of course, with such a case as this that went through all the way to
the Supreme Court.. I'd doubt if there's still reason to stay... I mean what's the point?,
the employer-employee relationship is already strained. There exists an animosity
between both.

Court said.. It being apparent, however, that the relationship between

petitioner and private respondent has been inevitably and severely strained, we
believe that it would neither be to the interest of the parties nor would any prudent
purpose be served by ordering her reinstatement.

So the petition for certiorari was GRANTED and the resolution of public
respondent Jacobo Clave is ANNULLED and SET ASIDE. Private respondent Tay
Tung High School, Inc. was thereby ORDERED to pay petitioner backwages
equivalent to three (3) years, without any deduction or qualification, and separation
pay in the amount of one (1) month for every year of service.

The teacher Evelyn Chua-Cua loses the job... but wins the case.. her dignity..
and the heart of the person she loves.

Indeed, the heart has its own mind that even the own mind cannot fathom.