SENTINEL v NLRC

Petitioner: Sentinel Security Agency, Inc.

Respondent: National Labor Relations Commission, Adriano Cabano, Jr., Veronico C. Zambo, Helcias
Arroyo, Rustico Andoy, And Maximo Ortiz
Citation: G.R. No. 122716
Date of Promulgation: September 3, 1988
Ponente: Panganiban, J.

FACTS:
 The complainants were employees of Sentinel Security Agency, Inc.
 They were assigned to render guard duty at the premises of Philippine American Life Insurance
Company (PhilAm) at Jones Avenue, Cebu City.
 PhilAm sent notice that the Agency was again awarded the contract of security services together
with a request to replace all the security guards in the companys offices at the cities of Cebu,
Bacolod, Cagayan de Oro, Dipolog and Ilagan.
 In compliance therewith, the agency issued a Relief and Transfer Order replacing the
complainants as guards and for them to be re-assigned to other clients.
 As ordered, the complainants reported but were never given new assignments but instead they
were told in the vernacular, gui-ilisa mo kay mga tigulang naman mo which when translated
means, you were replace[d] because you are already old.
 The complainants filed the subject illegal dismissal and prayed for payment of separation pay and
other labor standard benefits.
 PhilAm and the Agency maintained there was no dismissal on the part of the complainants,
constructive or otherwise, as they were protected by the contract of security services which
allows the recall of security guards from their assigned posts at the will of either party.
 It also advanced that the complainants prematurely filed the subject cases without giving the
Agency a chance to give them some assignments.
 On the part of PhilAm, it averred further that there[was no employer-employee relationship
between it and the complainants as the latter were merely assigned to its Cebu Branch under a
job contract; that the Agencyd had its own separate corporate personality apart from that of
them. Besides, it pointed out that the functions of the complainants in providing security services
to them property were not necessary and desirable to the usual business or trade of them, as it
could still operate and engage in its life insurance business without the security guards. In fine,
PhilAm maintains that the complainants have no cause of action against it.

ISSUE:
Whether or not the PhilAm is liable.

RULING:
The transfer of an employee involves a lateral movement within the business or operation of the
employer, without demotion in rank diminution of benefits or, worse, suspension of employment
even if temporary. The recall and transfer of security guards require reassignment to another post
and are not equivalent to their placement on “floating status”. Off-detailing security guards for a
reasonable period of six months is justified only in bonafide cases of suspension of operation, business
or undertaking.
PhilAm did not, as it could not, illegally dismiss the complainants. Thus, it should not be held liable for
separation pay and back wages. But even if the PhilAm is not responsible for the illegal dismissal of
 the complainants, it is jointly and severally liable with the Agency for the complainants' service
incentive leave pay.
As the indirect employer, PhilAm is jointly and severally liable with the contractor for the workers'
wages in the same manner and extent that it is liable to its direct employees. This liability of the Client
covers the payment of the service incentive leave pay of the complainants during the time they were
posted at the Cebu Branch of the Client. As service had been rendered the liability accrued even if the
complainants were eventually transferred or reassigned.

Westin Philippine v NLRC

Petitioner: Westin Philippine Plaza Hotel
Respondent: National Labor Relations Commission (Third Division) And Len Rodriguez
Citation: G.R. No. 121621
Date of Promulgation: May 3, 1999
Ponente: Quisimbing, J.

FACTS:
 Private respondent was continuously employed by petitioner in various capacities from July 1,
1977 until his dismissal on February 16, 1993.
 Initially hired as pest controller, he was later posted as room attendant. Next he served as
bellman, until he was finally assigned as doorman in November, 1981, and stayed in that position
until his employment was terminated by petitioner.
 Private respondent received a memorandum from the management transferring him from
doorman to linen room attendant in the Housekeeping Department.
 The position of doorman is categorized as guest-contact position while linen room attendant is a
non-guest contact position.
 The transfer was allegedly taken because of the negative feedback on the manner of providing
service to hotel guests by private respondent. This assessment was primarily based on the report
of professional shoppers engaged by petitioner to evaluate and review the various services of the
hotel and its personnel. guests.
 Instead of accepting his new assignment, private respondent went on vacation leave.
 In the meantime, the President of the National Union of Workers in Hotels, Restaurants and Allied
Industries (NUWHRAIN) appealed to management concerning private respondents transfer.
 In her response, Ms. Merceditas Santos, petitioners director for human resources development,
clarified that private respondents transfer is merely a lateral movement. She explained that
management believed that private respondent was no longer suited to be in a guest-contact
position, but there was no demotion in rank or pay.
 When private respondent reported back to work, he still did not assume his post at the linen
room. Notwithstanding several reminders from the personnel department and even his union,
private respondent refused to report to his new work station.
 Thus, private respondent was served with a memorandum asking him to explain in writing why
no disciplinary action should be taken against him for insubordination.
 The memorandum noted that while private respondent regularly came to the hotel everyday, he
just stayed at the union office.
 Private respondent was again reminded to report to his new job otherwise he would be clearly
defying a lawful order.
  In his reply private respondent, however, merely questioned the validity of his transfer without
giving the required explanation.
 Peitioner terminated private respondents employment on the ground of insubordination.
 Private respondent filed with the Department of Labor and Employment which later indorsed to
the NLRC for appropriate action a complaint for illegal dismissal against petitioner

ISSUE:
Whether or not there was Illegal Dismissal.

RULING:
It was a valid exercise of its management prerogative. Under Article 282 (a) of the Labor Code, as
amended, an employer may terminate an employment for serious misconduct or willful disobedience by
the employee of the lawful orders of his employer or representative in connection with his work. But
disobedience to be a just cause for dismissal envisages the concurrence of at least two (2) requisites: (a)
the employees assailed conduct must have been willful or intentional, the willfulness being characterized
by a wrongful and perverse attitude; and, (b) the order violated must have been reasonable, lawful, made
known to the employee and must pertain to the duties which he has been engaged to discharge.

In the present case, the willfulness of private respondents insubordination was shown by his continued
refusal to report to his new work assignment. Thus, upon receipt of the order of transfer, private
respondent simply took an extended vacation leave. Then, when he reported back to work, he did not
discharge his duties as linen room attendant despite repeated reminders from the personnel office as well
as his union. Worse, while he came to the hotel everyday, he just went to the union office instead of
working at the linen room. More than that, when he was asked to explain why no disciplinary action
should be taken against him, private respondent merely questioned the transfer order without submitting
the required explanation. Based on the foregoing facts, private respondents intransigence was very
evident.

On the issue of legality and reasonableness of the order of transfer, it must be emphasized that this Court
has recognized and upheld the prerogative of management to transfer an employee from one office to
another within the business establishment, provided that there is no demotion in rank or a diminution of
his salary, benefits and other privileges. This is a privilege inherent in the employers right to control and
manage its enterprise effectively.[5] Besides, it is the employers prerogative, based on its assessment and
perception of its employees qualifications, aptitudes and competence, to move him around in the various
areas of its business operations in order to ascertain where the employee will function with utmost
efficiency and maximum productivity or benefit to the company. An employees right to security of tenure
does not give him such a vested right in his position as would deprive the company of its prerogative to
change his assignment or transfer him where he will be most useful.[6]

Indeed, petitioner is justified in reassigning private respondent to the linen room. Petitioners right to
transfer is expressly recognized in the collective bargaining agreement between the hotel management
and the employees union as well as in the hotel employees handbook. The transfer order was issued in
the exercise of petitioners management prerogative in view of the several negative reports vis--vis the
performance of private respondent as doorman. It was a lateral movement as the positions of doorman
and linen room attendant are equivalent in rank and compensation. It was a reasonable relocation from
a guest contact area to a non-guest contact area. Thus, public respondents observation that private
respondent was demoted because the position of doorman is more glamorous than that of a linen room
attendant is pure conjecture. Public respondents conclusion that the transfer was punitive in character
could not be sustained for lack of substantial basis.

Finally it must be stressed that 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. In
the case at bar, private respondent was repeatedly reminded not only by management but also by his
union to report to his work station but to no avail. His continued refusal to follow a legal order brought
on the fit consequence of dismissal from his position for which management could not be justly faulted.

LABOR v NLRC
Petitioner: Artemio Labor, Pedro Bonita, Jr., Delfin Medillo, Allan Rommel Gabut, And Ireneo Visabella
Respondent: National Labor Relations Commission, Gold City Commercial Complex, Inc., And Rudy Uy
Citation: G.R. No. 110388
Date of Promulgation: September 14, 1995
Ponente: Davide, J.

FACTS:
 The petitioners were employees of Gold City at its Eye Ball Disco located at Tagum, Davao.
 In a complaint dated 19 August 1991 filed with the Regional Office No. XI of the Department of
Labor and Employment (DOLE) in Davao City, the petitioners charged Gold City with violations of
labor standards laws, specifically for underpayment of the minimum wage non-payment of 13th
month pay for 1991, premiums for holidays and rest days, holiday pay service incentive leave pay,
night shift differential and allowance pursuant to RTWPB-XI-O2. 3
 On 26 August 1991, the petitioners also filed with the NLRC Regional Arbitration Branch No. XI in
Davao City a complaint against Gold City and its President, herein private respondent Rudy Uy,
for illegal dismissal and for the same violations of labor standards laws earlier complained of.

ISSUE:
Whether or not the petitioners were illegaly dismissed.
RULING:
Yes. Under the Labor Code, as amended, the requirements for the lawful dismissal of an employee
by his employer are two-fold: the substantive and the procedural. Not only must the dismissal be for a
valid or authorized cause as provided by law (Article 279, 281, 282-284, New Labor Code), but the
rudimentary requirements of due process — notice and hearing — must also be observed before an
employee may be dismissed. One does not suffice; without their concurrence, the termination would, in
the eyes of the law be illegal. (Salaw vs. NLRC, G.R. No. 90786, Sept. 27, 1991).

Neither the alleged commission of acts of dishonesty by complainants would warrant the dismissal. It has
no leg to stand on. There is no sufficient proof or evidence that tend to show that complainants were
really in cahoots with each other in misappropriating the proceeds of the "unclaimed" free beer or
softdrink due to the disco pub customers, except the bare allegations in the affidavits executed by one
Joenel Mendoza and respondents' cashiers. Undoubtedly, they are self-serving testimonies. In fact, it is
more apparent that the charges imputed to complainants are pure prevarication as respondents were
bent to dismiss complainants in reprisal to the complaint they have filed with the DOLE.

There being no abandonment or commission of dishonest acts by the petitioners, no just cause exists
to dismiss them, hence, their termination by Gold City is illegal. The fact that Gold City sent them notices
on 6 September 1991 becomes irrelevant. It does not cure the illegality of their dismissal for lack of just
cause. It is interesting to note, however, that in its letters of 6 September 1991 individually addressed
to the petitioner, Gold City sought an explanation from the petitioners on their alleged absence without
official leave or, in short, their abandonment, and warned them in the form of a reminder that such
absence is a ground for separation or dismissal from the company. Nothing is mentioned about
dishonesty or any other misconduct on the part of the petitioners. If indeed the petitioners were guilty
of both abandonment and dishonesty or misconduct, then Gold City should have put them down in
black and white. The letters cum notice cannot then be considered to include dishonesty or misconduct.
It would be a gross violation of the petitioners' right to due process to dismiss them for that cause of
which they were not given notice or for a charge for which they were never given an opportunity to
defend themselves. A dismissal must not only be for a valid or substantial cause; the employer must
also observe the procedural aspect of due process in giving the employee notice and the opportunity
to be heard and to defend himself.

TOP FORM v NLRC

Petitioner: Top Form Mfg. Co., Inc
Respondent: National Labor Relations Commission And Juliana Malubay
Citation: G.R. No. L-65706
Date of Promulgation: December 11, 1992
Ponente: Melo, J.

FACTS:
 Private respondent Jualiana Malubay began her employment with the petitioner Top Form
Manufacturing (Phils.), Incorporated, as Plant Supervisor, with a starting salary of P1,200.00 per
month.
 She was initially assigned to supervise a factory line of sixty machine operators. One month
thereafter, she was given one more factory line, also with sixty workers, to supervise.
 Sometime in August, 1979, she was given a salary adjustment of P300.00 a month and in February
of the following year, another increment in salary was received by her in the amount of P150.00
per month. Moreover, in October, 1980 she was promoted to the position of Over-All Quality
Supervisor in the first shift, from 5:45 a.m. to 1:45 p.m. with a corresponding increase in salary of
P350.00 a month.
 As such Head Supervisor, she had control and supervision over the entire first shift consisting of
120 machine operators and some six line-in-charge.
 She was also responsible not only for the production and output but also for the quality of
products. In addition to her functions, she was likewise given the task of training newly-hired
factory workers and of supervising the repair group composed of several employees.
 On January 10, 1981, private respondent and her co-supervisors were called to a meeting at the
conference room by Dickson Chan, Production Manager. During the conference, Dickson Chan
 reviewed and examined as usual the production report for the day and he declared the he was
not satisfied with the production output, berating private respondent and the other supervisors.

 Thereafter, he crumpled the production report and again threw invectives at private respondent
and her co-supervisors.
 Dickson Chan picked up the stapler on his desk and, but for some better impulse, would have
thrown the same at private respondent and her companions who, frightened, as they were,
dispersed.
 As a result of this unfortunate incident, private respondent told and instructed her co-supervisors,
"Huwag pumasok sa lunes para matauhan si Dickson."
 Thus, on the next working day, January 12, 1981, a Monday, they absented themselves from work.
However, on January 13, 1981, she and her companions reported for work.
 On January 16, 1981, petitioner filed an application for clearance to terminate the services of
private respondent on the ground of "Loss of Management Confidence".
 Meanwhile, private respondent was placed under preventive suspension leading to her
termination effective January 13, 1981.
 Thereafter, on January 19, 1981, private respondent filed a complaint for illegal dismissal against
herein petitioner.
ISSUE:
Whether or not private respondent's services may be terminated for loss of trust and
confidence.

RULING:
Petitioner argues that respondent Malubay committed willfull breach of trust and confidence reposed
upon her when she agitated and led the boycott against petitioner. It is further averred that private
respondent was not merely a participant in the drama but the leader of the maverick group of supervisors
who staged the boycott; that Malubay, as a managerial employee, being Head Supervisor of the entire
first shift consisting of 120 machine operators, her powers and functions are central to the effective
operation of the company which entails the conferment of the highest degree of trust and confidence,
but because of what she did, she had shown her unworthiness to continue in the employ of the company.

On the other hand, private respondent submits that the contentions of the petitioner are devoid of merit.
Private respondent claims that she cannot be dismissed for loss of trust and confidence if said prerogative
of the employer is abusively and whimsically exercised. As a matter of fact, according to private
respondent, it was Dickson Chan who was at fault when the latter vituperated against private respondent
and the other supervisors present at the conference. Private respondent further asserts that Chan
maligned not only the employees but also the entire Filipino people, the laws and the government of this
Republic, so that the company should have understood her feelings and actions.

The petition is well-taken.

The employer has a distinct prerogative to dismiss an employee if the former has ample reason to
distrust the latter or if there is sufficient evidence to show that the employee has been guilty of breach
of trust. This authority of the employer to dismiss an employee cannot be denied whenever acts of
violation are noted by the employer. The law does not require proof beyond reasonable doubt of the
employee's misconduct before the employer can invoke such justification. It is sufficient that there is
some basis for the loss of trust or that the employer has reasonable grounds to believe that the
employee is responsible for the misconduct and that the nature of the employee's action renders the
employee unworthy of the trust and confidence demanded of the position (Valladolid vs. Inciong. 121
SCRA 205 [1983]; DOLE Philippines, Inc. vs. NLRC, 123 SCRA 673 [1983]; Ocean Terminal Services, Inc.
vs. NLRC, 197 SCRA 491 [1991]; Baguio Country Club Corporation vs. NLRC and GENOVE, G.R. No.
102397, September 4, 1992).

It is an inherent right of the employer to dismiss an employee for loss of confidence. We have a plethora
of decisions that supports and recognizes this authority of the employer to cut its relationship with the
employee. In the case at bar, it is an admitted fact that private respondent is an employee occupying a
high managerial position which entails great responsibility. Thus, petitioner was justified in terminating
the employment of the private respondent when she committed acts inimical to her employer's interest.
We shall not belabor the time-honored tenet that while the law protects the rights of the employee, it
cannot authorize the oppression or self-destruction of the employer. As We ruled in Almira vs. B.F.
Goodrich Philippines, Inc.(58 SCRA 120 [1974]), through then Chief Justice Enrique Fernando:

. . . The basic doctrine underlying the provisions of the Constitution so solicitous of labor as well as the
applicable statutory norms is that both the working force and the management are necessary components
of the economy. The right of labor has been expanded. Concern is evident for its welfare. The advantages
thus conferred, however, call for attendant responsibilities. The ways of the law are not to be ignored.
Those who seek comfort from the shelter that it affords should be the last to engage in activities which
negate the very concept of a legal order as antithetical to force and coercion . . . It is even more important
that reason and not violence should be its milieu. (at pp. 131-132.)

In the present petition. We cannot condone the act of private respondent in inciting her co-supervisors
and leading them in the boycott and wildcat strike. As aptly observed by the Labor Arbiter:

Even assuming that complainant was berrated by the Production Manager due to under par production
output, her remedy is not to sabotage or boycott company operations; she should have gone to higher
management levels in order to redress her grievances against her abusive immediate supervisor. Getting
even with the company for the misdeed of only one person, the Production Manager, is totally uncalled
for. (p. 4, Labor Arbiter's Decision; p. 14, Rollo.)

Further, We have laws to protect her and her co-supervisors from oppressive foreigners. She should not
have taken the laws in her own hands. Private respondent should have viewed the incident between her
and the Production Manager from a professional point of view. However, due to her precipitate and
irrational action, she hurt the company instead.

The Labor Code, specifically Article 283, acknowledges the right of the employer to put an end to the
covenant with the employee, thus:

Termination by employer. — An employer may terminate an employee for any of the following just
causes:

c. Fraud and willfull breach by the employee of the trust reposed in him by his employer or his duly
authorized agent.

It cannot be gainsaid, in this regard, that the act of private respondent in initiating and leading the boycott,
thereby disrupting and impairing company operations, is sufficient reason for petitioner to lose its trust
and confidence on private respondent, considering that the latter is a managerial employee of the
company whose position carries the corresponding highest degree of responsibility in improving and
upholding the interests of the employer and in exemplifying the utmost standard of discipline and good
conduct among her co-employees. Withal, the termination of her employment is justified.

In the light of the foregoing, We are of the opinion, and so hold, that respondent NLRC acted with grave
abuse of discretion in ordering the reinstatement of Malubay because Top Form Mfg. (Phil.). Inc. had just
cause to dispense with services of private respondent. Nonetheless, considering that Juliana Malubay had
worked with the company, as the record shows, with zeal, competence and dedication with no known
previous bad record, the ends of social and compassionate justice would be well served if she is paid full
separation pay

GT PRINTERS v NLRC
Petitioner: GT PRINTERS and/or TRINIDAD G. BARBA
Respondent: NATIONAL LABOR RELATIONS COMMISSION (4TH DIVISION) and EDWIN RICARDO
Citation: G.R. No. 100749
Date of Promulgation: April 24, 1992
Ponente: Grino- Aquino, J.

FACTS:
 Edwin Ricardo an apprentice of GT Printers, a single proprietorship owned by Mrs. Trinidad.
 Having gained enough experience and expertise in the printing business and after undergoing
special schooling in Manila at company expense, Ricardo was promoted to the position of
production manager of GT Printers.
 In 1978, he became general manager after the untimely demise of the owner's husband, who held
that position. Ricardo earned a monthly basic salary of P1,680, an ECOLA of P485, representation
allowance of P1,000 and or top of these, a three (3%) per cent share in the gross receipts of the
business.
 In February, 1985, Ricardo's wife established Insta Printers, a rival printing press, with Edwin
Ricardo himself as consultant and owner.
 Since the establishment of Insta Printers, Ricardo became a habitual absentee from his job at GT
Printers. He neglected his duties and responsibilities, and became lax in directing and supervising
the work force, resulting in numerous major printing errors and failure to meet printing
specifications leading to the rejection of several job orders from regular customers.
 Mrs. Barba noticed that Ricardo not only used GT Printers' bookcloth and other printing materials
for his Insta Printers, but he also gave specific instructions to the production staff to give priority
to book and magazine job orders for Insta Printers.
 Eventually, the regular customers of GT Printers were pirated by Insta Printers.
 Ricardo also manipulated price quotations during the canvassing of bids to favor his own outfit
instead of GT Printers.
 Because of those irregularities, GT Printers suspended Ricardo as general manager for 30 days.
Richard Barba was designated to take his place.
 Contracts concluded by respondent Ricardo thereafter were no longer honored.
 However, he continued to be a sales agent for GT Printers, hence, he continued to receive
commissions.
  Notices of his investigation scheduled on July 24, 1986 and August 13, 1986 were sent to him but
he did not appear at the investigation.
 He stopped reporting for work and soon after filed a complaint for illegal dismissal.

ISSUE:
1. Whether or not he was deprived of Due Process.
2. Whether or not he was illegally dismissed.

RULING:
The twin requirements of a valid termination: due process and just cause — were met substantially for
Ricardo was given ample opportunity to appear at the two scheduled investigations in order to present
his side, but he chose to boycott the investigation. Even at the hearing before the Labor Arbiter, he
waived, through counsel, the presentation and cross-examination of witnesses.

Due process does not necessarily mean or require a hearing, but simply an opportunity or right to be
heard (Hian vs. CTA, 59 SCRA 110; Azul vs. Castro, 133 SCRA 271). The affidavits, testimonies and other
documentary evidence presented by the petitioner stand uncontroverted and are therefore entitled to
full credit. It is well-settled that this Court is not a trier of facts, so we defer to the superior opportunity
of the lower courts or administrative bodies to test the credibility of the witnesses and to examine the
authenticity of the documentary evidence directly before them (Mapa vs. Arroyo, 175 SCRA 76; Dagupan
Bus Co., Inc. vs. NLRC, 191 SCRA 328).

The security of tenure accorded to labor under the Constitution does not embrace infractions of
accepted company rules amounting to breach of trust and loss of confidence (Rosello, Jr. vs. NLRC, 190
SCRA 779). The right of an employer to dismiss a managerial employee for breach of trust and loss of
confidence, as in this case, cannot be doubted. As a measure of self-preservation against acts inimical
to its interests, an employer has the right to dismiss an employee found committing acts of dishonesty
and disloyalty. The employer may not be compelled to continue to employ such a person whose
continuance in the service would patently be inimical to his employer's interest (Colgate Palmolive
Phils. Inc. vs. Ople, 163 SCRA 323). The dismissal of a dishonest employee is in the best interest not only
of management but also of labor for the law never intended to impose an unjust situation on either
labor or management (Coca-Cola Bottlers Phils. Inc. vs. NLRC, 172 SCRA 751).

Reinstatement would be ill-advised and incompatible with the labor arbiter's finding that "from those
documentary evidences presented by respondent, it can be safely conclude[d] that . . . there exist visible
conflict of interest amounting to willful breach of trust and confidence repose (sic) upon him by his
employer, . . . as well as (b) habitual neglect of his duties . . ." (pp. 216-217, Rollo). The reinstatement of
erring managers may not be ordered with the same ease and liberality as rank and file workers (Pacific
Cement Co., Inc. vs. NLRC, 173 SCRA 192).
SAN MIGUEL CORP v NLRC
Petitioner: San Miguel Corporation
Respondent: NATIONAL LABOR RELATIONS COMMISSION and FRANCISCO DIVINAGRACIA
Citation: G.R. No. 88268
Date of Promulgation: June 2, 1992
Ponente : Narvasa, J.

FACTS:
 Francisco Divinagracia started working with .San Miguel Corporation on November 16, 1977 as
accounting clerk.
 On July 24, 1982 he held the position of Regional Cashier of Bacolod Beer Region with basic
monthly salary of P2,200.
 His job entailed the receiving of cash remittances from route salesmen, preparing vouchers for
disbursement and keeping funds inside the vault."
 On January 31, , respondent sought and was granted permission by the Regional Accountant
(Remus Banogon) to leave the office to attend to personal matter (to buy some milk for his infant
child)
 .When he returned to the office after an hour, he proceeded to work and discovered a shortage
of P10,004.56.
 He relayed the matter to the security guard and to his supervisor, the Regional Accountant, the
following morning.
 Together with the General Accounting Clerk, complainant and the Regional Accountant counted
and reviewed the transactions of the previous day but could not account for the shortage. This
matter was reported to the Operations Manager.
 Due to this incident complainant was grounded and an investigation ensued.
 After the investigation San Miguel demanded payment of the shortage from Divinagracia.
 On May 31, 1985 he was dismissed. He instituted an action on December 23, 1985 for illegal
dismissal.

ISSUE:
Whether or not Divinagracia was illegally dismissed.

RULING:
No.
What in effect the NLRC is saying is that since both Divinagracia and Banogon had no access to
the former's office and the vault therein, it is not possible to hold only Divinagracia liable for the shortage
in his funds, since Banogon might himself have surreptitiously gone inside Divinagracia's booth, opened
the vault and made off with some of the money lying there. The evidence, however, is that while Banogon
indeed had access to Divinagracia's office and its vault, Banogon had not gone into that office at all at any
time during the hour that Divinagracia was away. What the NLRC has done is to make a selective
acceptance of Banogon's testimony, according credit to such part thereof as was consistent with
obscuration of Divinagracia's liability for the shortage, and conveniently ignoring so much of it as was
inconsistent. It accorded credit to Banogon's statement that he had a key to Divinagracia's office and knew
the combination to the vault, but it rejected his declaration, forming part of the same testimony, that he
had never entered Divinagracia's booth on the day in question. That rejection cannot in the circumstances
be regarded as otherwise than whimsical, capricious, even irrational. No reason whatsoever has been
given by NLRC for that rejection, or why Banogon is deemed a credible witness in part and branded as
undeserving of belief in another, specially when Banogon's statements are corroborated in their entirety
by the other evidence on record, Jocelyn B. Longno's testimony and the unchallenged sketches of
Divinagracia's Cashier's Booth in relation to the adjacent or surrounding working areas.

Neither does the NLRC cite any cause to disbelieve the evidence given by Longno, basically to the effect
that Banogon had never entered the office of Divinagracia while the latter was out on personal business.
This lack of justification is attempted to be cured by the NLRC's counsel by such arguments as —

1) . . . (while it) may be true that she had no ill-motive as to falsely testify against . . . (Divinagracia),
(h)owever, she had to protect her employment with petitioner (SMC); and

2) . . . while Longno was rendering overtime work, her concern and attention were focused on her
work. It was unnatural for her to have noticed that Banogon never left his desk while she was
concentrating on her work. Longno then biased and cannot be relied upon on this point.

The first argument is unintelligible. Its import is that while Longno had "no ill-motive" to testify falsely
against Divinagracia, she nevertheless did so "to protect her employment with petitioner." Why her
employment would be imperilled by her testifying otherwise than she actually did (e.g., that Divinagracia
was faultless, or it was some other employee who had taken the money, etc.) is not explained. The second
argument is cut from the same bolt. It insists that Longno could not have noticed what Banogon was doing
at all since she was concentrated on her work, despite Longno's positive declaration that she would surely
have noticed if Bagonon had entered the booth of Divinagracia while the later was out for an hour and
fifteen minutes because her desk was right beside Bagonon's and she was so situated that Divinagracia's
booth was within her view at any given moment. Why stark speculation or plain guessing should be
preferred to affirmative testimony is also not explained.

In any event, it is clear that the NLRC's conclusions regarding the evidence have nothing to support them
and hence must be struck down, as already stated, for being whimsical and capricious, arrived at with
grave abuse of discretion.

WHEREFORE, the petition is GRANTED. The Decision of the respondent National Labor Relations
Commission of November 25, 1988 is NULLIFIED AND SET ASIDE, and the complaint of illegal dismissal
is DISMISSED, without pronouncement as to costs.

CDCP v NLRC
Petitioner: San Miguel Corporation
Respondent: NATIONAL LABOR RELATIONS COMMISSION and FRANCISCO DIVINAGRACIA
Citation: G.R. No. 88268
Date of Promulgation: June 2, 1992
Ponente : Narvasa, J.

FACTS:
 Reynaldo Miranda and Guillermo Cariño, Jr. were toll tellers of private respondent corporation.
 Victoria Robles, a field auditor, saw Rosario Sanchez, a toll teller reliever, come out of Booth No.
5 which was being manned by petitioner Miranda and, thereafter, entered Booth No. 3 manned
by petitioner Cariño where she was seen folding a piece of paper into her pocket.
 Suspecting said piece of paper to be a cash count sheet, Robles told her co-auditor Arnel Sequitin
to conduct a body search on Sanchez.
  Sanchez, initially, refused to be searched but relented upon being informed that the collection
supervisor had already given his permission.
 However, as they were passing the, Sanchez suddenly stepped inside the powerhouse, pulled out
from her pocket the folded cash count sheet and threw it inside the powerhouse.
 Danilo Estanislao, a technician of private respondent Corporation, who was at that time inside the
powerhouse, grabbed said piece of paper and put it inside his pocket.
 Upon Robles’ demand to turn over to her said piece of paper, Estanislao refused claiming that said
piece of paper was a love letter for Sanchez’ boyfriend.
 When Robles insisted, Estanislao threw said piece of paper toward Rodolfo Palad, an incoming
security guard..
 Believing said piece of paper fell inside the drawer of the security guard, Robles asked Palad to
open said drawer. But the security guard refused to follow Robles’ order alleging that he shared
said drawer with two other security guards and he would only open it with the permission of the
Collector Supervisor.
 When said drawer was eventually opened, petitioner Cariño, who was standing beside the
powerhouse, grabbed from Robles the folded cash count sheet found inside the guard’s drawer.
 The former crumpled said cash count sheet and put it inside his pocket. When said cash count
sheet was finally retrieved from petitioner Cariño, Jr., it yielded P590.00 in paper bills.
 Robles also found inside the guard’s drawer a carton box which contain 47 unvalidated patron
tickets amounting to P646.00 wrapped in a white plastic were found.
 As a result of said incident, Estanislao and Cariño, Jr. were dismissed on August 8, 1983 and August
23, 1983, 1 while Maglunog and Miranda were also dismissed on October 8, 1983 on grounds of
loss of trust and confidence. 2
 Thereafter, Estanislao, Cariño, Jr., Maglunog and Miranda filed separate complaints for illegal
dismissal

ISSUE:
Whether or not they were illegally dismissed.
Whether or not they were deprived of due process.

RULING:
n the issue of sufficiency of evidence raised by the complainants to firm up a finding of guilt on
their part, we would say that, except for Estanislao and Cariño, Jr. whose complicity (attempt to cover-up)
in the irregularity could hardly be doubted, we share the impression that the evidence linking the two
other complainants (Maglunog and Miranda) to the pilferage of the company’s collection was rather weak
and shaky. But that does not make their termination less valid and unjustified. For loss of confidence is a
valid ground for dismissing an employee. And proof beyond reasonable doubt of the employee’s
misconduct is not required, it being sufficient that there is some basis for the same or that the employer
has reasonable ground to believe that the employee is responsible for the misconduct and his
participation therein renders him unworthy of the trust and confidence demanded of his position
(Villadolid v. Inciong, G.R. Nos. L-52364 and 53349).

Reiterating this principle, the Supreme Court in the case of SMC v. Deputy Minister of Labor, Et Al., G.R.
No. 61232-33, 29 December 1983, ruled:cralawnad
‘Loss of confidence is a valid ground for dismissing an employee, and proof beyond reasonable doubt
of the employee’s misconduct — apparently demanded by the Minister of Labor — is not required to
dismiss him on this charge.’"

Consequently, there is no doubt about the legality of petitioners’ dismissals. In the case of petitioner
Miranda, although his participation in said irregularity may not have been sufficiently established, yet
there existed sufficient basis for the private respondent Corporation to lose its confidence in him, which
is a valid ground for dismissing an employee and proof beyond reasonable doubt of the employee’s
misconduct is not required. It is sufficient if there is some basis for such loss of confidence or if the
employer has reasonable ground to believe or to entertain the moral conviction that the employee
concerned is responsible for the misconduct and that the nature of his participation therein rendered
him unworthy of the trust and confidence demanded by his position.

Finally, petitioners contend that they were deprived of due process since they were not informed of the
specific or particular cause of their dismissal nor afforded ample opportunity to defend themselves.

The records show that petitioners were notified by the private respondent Corporation of the specific
charges against them. In fact, they were apprised of the specific cause in their notices of suspension,
that is, on their possible involvement in the conspiracy to commit fraud against respondent Corporation
on July 7, 1983. Likewise, said Corporation informed them again in their notices of dismissal of the cause
of their dismissals which is their involvement in the conspiracy to commit fraud against respondent
Corporation and their willful breach of the trust reposed upon them by the latter. Moreover, in the
private Corporation’s notice of investigation regarding said incident, all those suspected of complicity
in said incident were instructed to appear before a panel of investigation at 1:30 P.M. on July 22, 1983
to testify and present evidence. Since petitioners were given all the opportunity to know the causes of
their dismissals and to defend themselves in connection with said incident, they cannot anymore
complain that they were deprived of due process of law.

"The law in protecting the rights of the labor, authorizes neither oppression nor self-destruction of the
employer. While the Constitution is committed to the policy of social justice and the protection of the
working class, it should not be supposed that every labor dispute will be automatically decided in favor of
labor. Management also has its own right, which, as such, are entitled to respect and enforcement in the
interest of simple fair play. Out of its concern for those with less privileges in life, the Supreme Court has
inclined more often than not toward the worker and upheld his cause in his conflicts with the employer.
Such favoritism, however, has not blinded the Court to the rule that justice is in every case for the
deserving, to be dispensed in the light of the established facts and applicable law and doctrine.