University of the Philippines 293 PLDT vs NLRC; Paduata vs MERALCO

College of Law (Evening 2021)

Labor Law Termination of Employment Cruz, J.
Case Summary
The rule embodied in the Labor Code is that a person dismissed for cause as defined therein is not
entitled to separation pay. One of the exceptions to this rule is based upon considerations of equity.

Facts of the Case

 Abucay, a traffic operator of the PLDT, was accused by two complainants of having demanded
and received from them the total amount of P3, 800.00 in consideration of her promise to
facilitate approval of their applications for telephone installation. Investigated and heard, she
was found guilty as charged and accordingly separated from the service. She went to the
Ministry of Labor and Employment claiming she had been illegally removed. After
consideration of the evidence and arguments of the parties, the company was sustained and
the complaint was dismissed for lack of merit. Nevertheless, the dispositive portion of the labor
arbiter’s decision declared:

“WHEREFORE, the instant complaint is dismissed for lack of

merit.

Considering that Dr. Bangayan and Mrs. Martinez are not totally
blameless in the light of the fact that the deal happened outside
the premises of respondent company and that their act of giving
P3,800.00 without any receipt is tantamount to corruption of public
officers, complainant must be given one month pay for every year
of service as financial assistance.”

 Both the petitioner and the private respondent appealed to the National Labor Relations Board,
which upheld the said decision in toto and dismissed the appeals. The private respondent took
no further action, thereby impliedly accepting the validity of her dismissal. The petitioner,
however, is now before us to question the affirmance of the above- quoted award as having
been made with grave abuse of discretion.
 The position of the petitioner is simply stated: It is conceded that an employee illegally
dismissed is entitled to reinstatement and backwages as required by the labor laws. However,
an employee dismissed for cause is entitled to neither reinstatement nor backwages and is not
allowed any relief at all because his dismissal is in accordance with law. In the case of the
private respondent, she has been awarded financial assistance equivalent to ten months pay
corresponding to her 10 year service in the company despite her removal for cause. She is,
therefore, in effect rewarded rather than punished for her dishonesty, and without any legal
authorization or justification. The award is made on the ground of equity and compassion,
which cannot be a substitute for law. Moreover, such award puts a premium on dishonesty and
encourages instead of deterring corruption.
 For its part, the public respondent claims that the employee is sufficiently punished with her
dismissal. The grant of financial assistance is not intended as a reward for her offense but
merely to help her for the loss of her employment after working faithfully with the company for
ten years. In support of this position, the Solicitor General cites the cases of Firestone Tire and
 Rubber Company of the Philippines v. Lariosa and Soco v. Mercantile Corporation of Davao,
where the employees were dismissed for cause but were nevertheless allowed separation pay
on grounds of social and compassionate justice.

Issues

W/N payment of We hold that henceforth separation pay shall be allowed as a measure
separation pay is proper of social justice only in those instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting
on his moral character. Where the reason for the valid dismissal is, for
example, habitual intoxication or an offense involving moral turpitude,
like theft or illicit sexual relations with a fellow worker, the employer may
not be required to give the dismissed employee separation pay, or
financial assistance, or whatever other name it is called, on the ground
of social justice.

A contrary rule would, as the petitioner correctly argues, have the effect,
of rewarding rather than punishing the erring employee for his offense.
And we do not agree that the punishment is his dismissal only and that
the separation pay has nothing to do with the wrong he has committed.
Of course it has. Indeed, if the employee who steals from the company
is granted separation pay even as he is validly dismissed, it is not
unlikely that he will commit a similar offense in his next employment
because he thinks he can expect a like leniency if he is again found out.
This kind of misplaced compassion is not going to do labor in general
any good as it will encourage the infiltration of its ranks by those who do
not deserve the protection and concern of the Constitution.

The policy of social justice is not intended to countenance wrongdoing

simply because it is committed by the underprivileged. At best it may
mitigate the penalty but it certainly will not condone the offense.
Compassion for the poor is an imperative of every humane society but
only when the recipient is not a rascal claiming an undeserved privilege.
Social justice cannot be permitted to be refuge of scoundrels any more
than can equity be an impediment to the punishment of the guilty. Those
who invoke social justice may do so only if their hands are clean and
their motives blameless and not simply because they happen to be poor.
This great policy of our Constitution is not meant for the protection of
those who have proved they are not worthy of it, like the workers who
have tainted the cause of labor with the blemishes of their own
character.

Applying the above considerations, we hold that the grant of separation

pay in the case at bar is unjustified. The private respondent has been
dismissed for dishonesty, as found by the labor arbiter and affirmed by
the NLRC and as she herself has impliedly admitted. The fact that she
has worked with the PLDT for more than a decade, if it is to be
considered at all, should be taken against her as it reflects a regrettable
lack of loyalty that she should have strengthened instead of betraying
during all of her 10 years of service with the company. If regarded as a
justification for moderating the penalty of dismissal, it will actually
become a prize for disloyalty, perverting the meaning of social justice
 and undermining the efforts of labor to cleanse its ranks of all
undesirables.

Petition granted.

WHEREFORE, the petition is GRANTED. The challenged resolution of September 22, 1987, is
AFFIRMED in toto except for the grant of separation pay in the form of financial assistance which is
hereby DISALLOWED. The temporary restraining order dated March 23, 1988 is LIFTED. It is so
ordered.

University of the Philippines Paduata vs MERALCO

College of Law (Evening 2021)
Labor Law Termination of Employment Abad, J.
Case Summary

Facts of the Case

1. On April 24, 1986, respondent MERALCO hired petitioner Daniel O. Paduata (“Paduata”) as
Bill Collector. Having done well in his job, MERALCO named him “One Million Man Collector”.
Four (4) years later, he testified against certain company officials in an administrative case
filed against a co-employee. He claimed harassment afterwards, including the filing of several
administrative cases against him for which he was exonerated.
2. MERALCO suspended Paduata and ultimately dismissed him for collecting a daily average of
only thirty-three (33) bills instead of the required one hundred (100) and for late remittance of
collections in violation of MERALCO’s Code on Employee Discipline; this prompted Paduata to
file a complaint for illegal suspension and underpayment with the Labor Arbiter (LA) who
decided the case in his favor.
3. The case was appealed to NLRC which affirmed the LA ruling. Based on this, MERALCO
reinstated Paduata on its payroll and eventually reinstated him to do actual work at its Tutuban
Branch. After three (3) months, MERALCO transferred him to its Pasay Branch as Bill
Collector and Bill Executioner. Subsequently, he was promoted for his excellent work to the
position of Junior Branch Lineman with a corresponding salary increase.
4. After a year, MERALCO transferred him to its Central Office in Manila District to do the work of
Acting Stockman. He claimed that this transfer violated the provision of the company’s
collective bargaining agreement with the union that an employee may only be transferred for
promotion on the employee’s written request.
5. After his new posting, Paduata started incurring several absences due to rheumatic arthritis.
MERALCO averred that these absences were unauthorized and unexcused since he did not
submit the required medical certificate after they were incurred.
6. Sometime in May 1999, MERALCO sent Paduata a notice to attend an investigation of his
unauthorized absences; Paduata appeared with counsel and presented his affidavit wherein
he stated that his absence was due to swollen muscles and inflamed joints caused by arthritis.
7. Sometime in September 1999, MERALCO held an investigation of Paduata’s unauthorized and
unexcused absences in violation of a provision in the Company Code on Employee Discipline
that penalizes more than five (5) days of such kinds of absences with dismissal.
8. Paduata submitted a sworn statement in his defense, denying the charges against him and
declaring that sometime in August 1999, the day before his absences from work, his
immediate supervisor advised him to stay at home considering his swollen ankle and difficulty
walking. He further stated that he prepared a sick report and medical certificate.
9. Two (2) months later, MERALCO sent Paduata a Memorandum requiring him to explain in
writing within seventy-two (72) hours why he should not be penalized for incurring absences
for which Paduata did not submit the required explanation. He contends that MERALCO sent
the Memorandum after he refused to accede to its demand that he file an application for
Special Separation Pay.
10. In November 1999, Paduata received a letter from MERALCO informing him of his dismissal
from the service due to his absences without any prior permission from his superiors. Paduata
claimed however, that he never got the notice of the dismissal.
11. Nine (9) months after his dismissal, Paduata filed a complaint for illegal dismissal with the LA
which ruled in his favor and ordered his reinstatement to his former position without loss of
seniority rights with full backwages and other benefits due him and attorney’s fees. NLRC
reversed the LA ruling; upon appeal to CA, it affirmed the NLRC ruling.
Issues
W/N Paduata complied with the notice and No.
substantiation requirement for sick leave
absence without prior notice to his Section 11 of the Company Code on
employer respecting his absences from Employee Discipline provides:
April to May
The following acts shall constitute
violation of this section:

1) Going on sick leave, including

house confinement under the
following cases:

a. Without having first personally

secured previous authorization from
a Company doctor or Company
retained physician and failing to
notify his supervisor or his absence
due to illness within 24 hours from
the date of such leave.

b. In the absence of prior

authorization, where the
circumstances involving the time of
onset of the illness and the nature
thereof directly causes physical
inability of the employee to comply
with subsection (1a) above, failing to
submit through his relative or any
representative the required medical
certification from his private
physician either to his supervisor or
to the J. F. Cotton Hospital within 48
hours from the first date of such
leave.
 2) Without prior authorization or
justifiable reason, extending the
original period of sick leave
previously authorized.

The SC ruled that it is not persuaded by the

reasons and defenses given by Paduata. In
fact, his supervisor belied his claim and he was
unable to substantiate the existence of the
supposed medical certificate.
WHEREFORE, the Court AFFIRMS WITH MODIFICATION the July 29, 2004 Decision and
August 30, 2005 Resolution of the Court of Appeals (CA) in C.A.-G.R. SP 78573, which
affirmed the September 30, 2002 Decision of the National Labor Relations Commission in
NLRC NCR C.N. 30-08-03230-00 CA 029785-01. The Court ORDERS MERALCO to pay
petitioner Daniel O. Paduata separation pay equivalent to one-half (1/2) month pay for every
year of service from the date of his employment on April 24, 1986.