BERNARDINO A. CAINGAT, vs.

NATIONAL LABOR RELATIONS

COMMISSION, STA. LUCIA REALTY & DEV’T., INC., R.S. MAINTENANCE &
SERVICES, INC., and R.S. NIGHT HAWK SECURITY & INVESTIGATION
AGENCY, INC
G.R. No. 154308. March 10, 2005

Facts: Petitioner Benardino A. Caingat was hired by respondent Sta. Lucia Realty and
Development, Inc. (SLRDI) as the General Manager of SLRDI’s sister companies, R.S.
Night Hawk Security and Investigation Agency, Inc., and R.S. Maintenance and Services
Inc. both organized to service the malls and subdivisions owned by SLRDI. In
connection with this, he was allowed to use 10% of the total payroll of respondent R.S.
Maintenance to defray operating expenses. Later, the Finance Manager discovered that
petitioner deposited company funds in the latter’s personal account and used the funds
to pay his credit card purchases, utility bills, trips abroad and acquisition of a lot in
Laguna. Thus, complainant received a memorandum stating that upon verification of
financial records, it was found that the latter have misappropriated company funds in
the sum of about P5, 000,000.00 and is hereby suspended from his duties as Manager
of the stated companies. Without conducting any investigation, respondent R.S.
Maintenance filed a complaint for sum of money and damages with prayer for writ of
preliminary attachment. Petitioner in turn filed a complaint for illegal dismissal against
the respondents.

Issue: Did respondents illegally dismiss petitioner?

Held: As firmly entrenched in our jurisprudence, loss of trust and confidence as a just
cause for termination of employment is premised on the fact that an employee
concerned holds a position where greater trust is placed by management and from
whom greater fidelity to duty is correspondingly expected. This includes managerial
personnel entrusted with confidence on delicate matters, such as the custody, handling,
or care and protection of the employer’s property. The betrayal of this trust is the
essence of the offense for which an employee is penalized. Management’s loss of trust
and confidence on petitioner was well justified. Private respondents had every right to
dismiss petitioner. Petitioner’s long period of disappearance from the scene and
departure for abroad before making a claim of illegal dismissal does not contribute to its
credibility.
Nonetheless, while dismissal may truly be justified by loss of confidence, the
management failed to observe fully the procedural requirement of due process for the
termination of petitioner’s employment. Two notices should be sent to the employee.
The respondents only sent the first notice, gleaned from the memorandum. There was
no second notice.
G.R. No. 149349. March 11, 2005

GLAXO WELLCOME PHILIPPINES, INC. (now known as GLAXO

SMITHKLINE), Petitioners, 
vs.
NAGKAKAISANG EMPLEYADO NG WELLCOME-DFA (NEW-DFA), JOSSIE
RODA DE GUZMAN, and NORMAN B. CEREZO, Respondents.

FACTS:  [respondent] union NAGKAKAISANG EMPLEYADO NG WELLCOME-DFA

(NEW-DFA) filed a Petition for Certification Election with the DOLE-NCR seeking to
represent the bargaining unit comprised of all the regular rank-and-file employees of
[petitioner] company GLAXO-WELLCOME.
The election, however, resulted in a stand-off or a tie between ‘NO UNION’ and ‘NEW-
DFA’.
NEW-DFA alleged in their election protest filed with the med-arbiter: that its failure to
obtain the required majority vote can be ascribed to several acts of manipulation,
interference and intimidation committed by [petitioner] company GLAXO-WELLCOME
prior to and during the conduct of the certification elections.
After trial, however, the Med-Arbiter dismissed the [respondent union’s] election
protest for lack of substantial evidence. The Secretary of Labor and Employment, on
appeal, affirmed the dismissal of said election protest.
In the meantime, GLAXO-WELLCOME adopted a new Car Allocation Policy. Under the
provisions of the said car plan, a prioritization schedule in the assignment of company
vehicles is to be fixed based on the sales performance of the employees. Pursuant to the
same, several company cars had to be re-assessed and re-assigned in favor of other
employees more qualified under the priority list.
Incidentally, included among the vehicles that had to be re-allocated in accordance with
the priority schedule of the new car plan were [those] of union officers Norman Cerezo
and Jossie Roda de Guzman.
Accordingly, a memorandum was sent by the company to [Respondent] de
Guzman advising her that she would have to surrender the vehicle assigned to her in
light of the new car policy. De Guzman, however, refused to turn over said car and
instead sought x x x reconsideration (several times from Glaxo, which was repeatedly
denied by the latter).
A final warning was sent to de Guzman instructing her to return her
assigned vehicle or else she would be charged for insubordination and be
dismissed. Finally, because of de Guzman’s staunch refusal to comply with
the order, through a letter dated December 20, 1990, she was cited, and at
the same time, terminated for gross insubordination.

[Respondent] Norman Cerezo, on the other hand, was likewise sent several
instructions to surrender his assigned car. However, he also refused to comply. On
account of his defiance, the company, on December 5, 1990, sent Cerezo a
notice of dismissal effective immediately upon receipt. Forthrightly,
[Respondent] Cerezo referred the matter to his counsel who, on the same
date, sought for the reconsideration of [respondent’s] discharge. On
December 17, 1990, Cerezo received a letter from the company informing
him that his dismissal had been reconsidered and commuted to a thirty
(30) day suspension without pay.
Perceiving the enumerated events to be unduly oppressive to labor, [respondent] union
NEW-DFA, Jossie De Guzman and Norman Cerezo lodged a complaint before the Labor
Arbiter against [petitioner] company, GLAXO-WELLCOME, for unfair labor practice,
illegal dismissal and illegal suspension.
[Respondent] union also challenged the legality of the suspension and dismissal of two
of its officers, namely: Norman Cerezo and Jossie Roda de Guzman. It argued that the
suspension and dismissal were effected without any prior hearing.
LA dismissed the complaint file; NLRC affirmed; MR denied. CA ruled that there was
nothing objectionable per se about the programs or incentive schemes that the company
had provided for the employees. The appellate court said that the grant of benefits to the
employees, as well as the adoption of the Car Allocation Policy, constituted a proper
exercise of the company’s management prerogatives.
However, the CA held that the dismissal of De Guzman and the suspension of
Cerezo had not been validly effected,  because it had failed to comply with
procedural due process mandated by the Labor Code10and with the two-
notice requirement under the Implementing Rules.
Hence, this Petition

ISSUE: WON petitioner observe procedural due process in terminating and suspending

the employment of de Guzman and Cerezo, respectively.

HELD: YES.

The issue now is whether, on the basis of the established facts, respondents were
accorded “statutory due process” that would entitle them to the sanctions prescribed by
the above-cited jurisprudence.

Section 2(d) of Rule 1 of Book VI of the Omnibus Rules Implementing the

Labor Code (Implementing Rules) sets forth the procedure for terminating
employment as follows:

(d) In all cases of termination of employment, the following standards of due process
shall be substantially observed:
For termination of employment based on just causes as defined in Article 282 of the
Labor Code:
(i) A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to
explain his side.
(ii) A hearing or conference during which the employee concerned, with the assistance
of counsel if the employee so desires, is given opportunity to respond to the charge,
present his evidence, or rebut the evidence presented against him; and
(iii) A written notice of termination served on the employee, indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
termination.20
The first notice is intended to inform the employee of the employer’s intent to dismiss
and the particular acts or omissions for which the dismissal is sought. The second
notice is intended to inform the employee of the employer’s decision to dismiss. This
decision, however, must come only after the employee has been given a reasonable
period, from receipt of the first notice, within which to answer the charge; and ample
opportunity to be heard with the assistance of counsel, if the employee so desires.
The twin requirements of (a) two notices and (b) hearing are necessary to protect the
employee’s security of tenure, which is enshrined in the Constitution, the Labor Code
and related laws.
In the present case, petitioner sent respondents a total of three Memoranda stating
that their stubborn refusal to comply with the car policy and to surrender the subject
vehicle constituted gross insubordination, for which they could be dismissed.
To each Memorandum, respondents were able to reply and explain, with the aid of their
counsel, why they had refused to return the vehicles; and, in effect, why they should not
be dismissed for gross insubordination. They explained that they could not work
effectively and efficiently for the company without the cars that had been assigned to
them.
Neither Section 2 of Book V of Rule XXIII nor Section 2(d) of Rule 1 of Book
VI of the Implementing Rules require strict literal compliance with the
stated procedure; only substantial compliance is needed. On this basis,
the Memoranda sent to respondents may be deemed to have sufficiently
conformed to the first notice required under the Implementing Rules. The
Memoranda served the purpose of informing them of the pending matters beclouding
their employment and of extending to them an opportunity to clear the air.
In fact, not only were respondents duly informed of the particular acts for which their
dismissal was sought; they were, in truth and in fact, able to defend themselves and to
respond to the charges with the assistance of a counsel of their own choosing.
Respondents were amply informed of the cause of their dismissal. Their correspondence
with petitioner took almost a month, which was sufficient “cooling time” within which
the parties could have, and in fact had, tried to settle the problem amicably.
Without a doubt, respondents in the present case deliberately disregarded or
disobeyed a company policy. Their written explanations admitted their refusal to
obey petitioner’s directive to return the vehicles. Their justification of their refusal to
obey the lawful orders of their employer did not militate against their obvious
disobedience.
In concluding lack of compliance with the due process requirement, the CA
cited Mendoza v. NLRC39 as follows:
“The employer must furnish the worker with two (2) written notices before termination
of employment can be legally effected. The first is the notice to apprise the employee of
the particular acts or omissions for which his dismissal is sought. This may be loosely
considered as the proper charge.xxxx
However, we (SC) note that these cases merely stated that the first notice could loosely
be considered as a proper charge. Verily, notice to the employee should merely
embody the particular acts or omissions constituting the grounds for which
the dismissal is sought. An employee may be dismissed only if the grounds
mentioned in the pre-dismissal notice were the ones cited for the
termination of employment.
PETITION GRANTED

CABALEN MANAGEMENT CO., INC. VS JESUS P. QUIAMBAO

FACTS: It is a well-established rule that the employer has the burden of proving a valid

dismissal of an employee, for which it must be for a just or authorized cause and with
due process.

Jesus Quiambao, et al. were charged of tip pocketing and swapping of dining order slips
with bar order slips, among others. They were dismissed from employment due to said
acts. They filed a case against Cabalen Management Co., Inc. (Cabalen) for illegal
dismissal but the decision of the Labor Arbiter and the National Labor Relations
Commission was in favor of Cabalen. Quiambao, et al. elevated the case to the Court of
Appeals and the CA ruled otherwise. Cabalen sought to set aside the decision of the CA
which reversed the earlier rulings provided for by the Labor Arbiter and the NLRC. They
also questioned the Resolution given by CA which denied their Motion for
Reconsideration.

The assailed CA decision held that except for respondents Vizier Inocencio and Vincent
Edward Mapa whose petitions were dismissed pursuant to Section 5, Rule 7 of the Rules
of the Rules of Court and Section 4 (a) of the Rules of Procedure of the NLRC, herein
Quiambao, et al. were illegally dismissed from their employment. The Supreme Court
affirmed the CA decision, hence, Cabalen’s Motion for Reconsideration became subject
of this Resolution. To the Motion, Quiambao, et al. filed their Opposition.

ISSUES:
Whether or not Quiambao, et al. were illegally dismissed

HELD:
It is a well-established rule that the employer has the burden of proving a valid dismissal
of an employee, for which two requisites must concur: (a) the dismissal must be for any
of the causes expressed in the Labor Code; and (b) the employee must be accorded due
process, basic of which is the opportunity to be heard and to defend himself.

To establish a just or authorized cause for dismissal, substantial evidence or

“such amount of relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion” is required. Further required is that an employee sought to be
dismissed must be served two written notices before the termination of his employment.
The first notice must appraise him of the particular acts or omissions upon which his
dismissal is grounded; the second, to inform him of the employer’s decision to terminate
his employment. While the failure of the employer to comply with these
notice requirements does not make the dismissal illegal as long as a just or authorized
cause has been proved, it renders the employer liable for payment of damages because
of the violation of the worker’s right to statutory due process.

In the instant case, only photocopies of the statements of Balen and Malana form part of
the records despite Cabalen’s reliance thereon to prove respondents’ purported
transgressions. Jarcia Machine Shop and Auto Supply, Inc. v. NLRC held that the
unsigned photocopies of daily time records (DTRs), which were presented by the
therein employer to show that its employee was neglectful of his duties, were of
“doubtful or dubious probative value.”

Cabalen, et al. did not even heed their own procedures on disciplinary actions. The only
facts extant in the records are that respondents were issued above-
said Corrective Action Report (CARE) Forms asking them to explain their alleged
infractions within 48 hours; and they subsequently received notices of dismissal after
they submitted their written explanations. There is, however, nothing to show that
before their dismissal, Quimbao, et al. were informed of their immediate supervisors’
decision to terminate their services, or that they were thereafter invited to an
administrative investigation before the HRD manager or officer who is tasked to
conduct the investigation in the presence of the employees’ immediate supervisor/s and
the witnesses, if necessary, as provided under Section IV of the company’s Code of
Conduct.

No record of any administrative investigation proceeding, which under the company’s

rules was to be “minuted,” had also been presented. Hence, only Cabalen’s allegation
that the statements of the witnesses were taken as part of the administrative
investigation is before this Court. Allegations without proof do not deserve
consideration.

Finally, on the dismissal of Quiambao allegedly on the ground of business losses, it was
incumbent upon Cabe to len, et al. to prove it by substantial evidence. It did not,
however. In fact, Quiambao presented documents to disprove the validity of his
retrenchment on that ground. For petitioners’ failure to discharge its burden then, this
Court is constrained to hold that Quiambao’s dismissal was not valid.

SHOPPERS GAIN SUPERMART, JERRY TAN, JACK TAN and HEIRS OF

JAMES TAN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION

Facts of the case:

From 1982 to 1990, private respondents had worked in the Shoppers Gain Supermarket
in various capacities as "merchandiser, cashier, bagger, check-out personnel, sales lady,
printer/film and warehouseman" for at least one year each. Private respondents were
part of a pool of workers supplied by three (3) manpower service companies under
"labor-only" contracts. In December of 1990, due to an unavoidable circumstance,
petitioner constrained to stop its business and consequently terminate its contract with
the three (3) manpower service companies. Petitioner was able to pay separation pays
for its regular employees but not for private respondents.

A complaint for illegal dismissal was filed for which the Labor Arbiter rendered a
decision finding Shoppers Gain Supermarket guilty of labor-only contracting and
ordered it to pay separation pay and backwages to respondents. On appeal, the National
Labor Relations Commission affirmed said decision. Elevating the case to the Supreme
Court, petitioners raised the following grounds inter alia:

(a) That for employer-employee to exist, the following requirements must be satisfied,
namely: (1) selection and engagement of the employees; (2) the payment of wages; (3)
the power of dismissal; and (4) the power to control employees' conduct; and

(b) Since the manpower agencies themselves admitted per their respective position
papers that they selected, hired, paid, disciplined, dismissed and controlled the private
respondents, it followed that the latter are not the employees of the petitioner
corporation but of the agencies only.

Issue:

Whether or not private respondents are considered employees of petitioner Shoppers

Gain Supermarket in view of the fact that they were merely furnished through labor-
only contracts with three manpower agencies.

Ruling:

The Supreme Court held that what was controlling in the issue is the provisions of
Artcile 106 of the Labor Code and not that of Article 208. The former clearly defines
what constitute labor-only contractor as differentiated from a direct contractor,
including the legal effects of each, while the latter is merely for the purpose of
determining whether or not an employee is considered regular. Based on the provision
of Article 106, the Supreme Court ruled that the petitioner was indeed the direct
employer of private respondents and was therefore 0bliged to pay them separation pay.
The Supreme Court reasoned that since it is undeniable that the private respondents'
work as merchandisers, cashiers, baggers, check-out personnel, sales ladies,
warehousemen and so forth were directly related, necessary and vital to the day-to-day
operations of the supermarket and that their jobs involved normal and regular functions
in the ordinary business of the petitioner corporation, the provision of Article 106
clearly applied thus making the manpower agencies merely agents of petitioner
corporation. Consequently, private respondents are considered employees of petitioner
Shoppers Gain Supermart.