Jonathan Vs. Harbor Center Port Terminal

Facts

On 16 May 2000, petitioner Jonathan V. Morales was hired by respondent Harbour Centre Port Terminal, Inc. as an Accountant and Acting Finance Officer, with a monthly salary of P18,000.00.Regularized on 17 November 2000, Morales was promoted to Division Manager of the Accounting Department, for which he was compensated a monthly salary of P33,700.00, plus allowances starting 1 July 2002. Subsequent to HCPTI’s transfer to its new offices at Vitas, Tondo, Manila on 2 January 2003, Morales received an inter-office memorandum dated 27 March 2003, reassigning him to Operations Cost Accounting, tasked with the duty of “monitoring and evaluating all consumables requests, gears and equipment” related to the corporation’s operations and of interacting with its sub-contractor, Bulk Fleet Marine Corporation. The memorandum was issued by Danilo V. Singson (Singson), HCPTI’s new Administration Manager, duly noted by Johnny U. Filart (Filart), its new Vice President for Administration and Finance, and approved by its President and Chief Executive Officer, Vicente T. Suazo, Jr.7

On 31 March 2003, Morales wrote Singson, protesting that his reassignment was a clear demotion since the position to which he was transferred was not even included in HCPTI’s plantilla. In response to Morales’ grievance that he had been effectively placed on floating status,8 Singson issued a 4 April 2003 inter-office memorandum to the effect that “transfer of employees is a management prerogative” and that HCPTI had “the right and responsibility to find the perfect balance between the skills and abilities of employees to the needs of the business.”9 For the whole of the ensuing month Morales was absent from work and/or tardy. Singson issued to Morales a 29 April 2003 inter-office memorandum denominated as a First Warning. The memorandum reminded Morales that, as an employee of HCPTI, he was subject to its rules and regulations and could be disciplinarily dealt with pursuant to its Code of Conduct. In view of the absences Morales continued to incur, HCPTI issued a Second Warning dated 6 May 200311 and a Notice to Report for Work and Final Warning dated 22 May 2003.

In the meantime, Morales filed a complaint dated 25 April 2003 against HCPTI, Filart and Singson, for constructive dismissal, moral and exemplary damages as well as attorney’s fees. In support of the complaint which was docketed as NLRC-NCR Case No. 00-04-05061-2003 before the arbitral level of the National Labor Relations Commission (NLRC),13 Morales alleged that subsequent to its transfer to its new offices, HCPTI had suspended all the privileges enjoyed by its Managers, Division Chiefs and Section Heads; that upon the instruction of Filart, Paulo Christian Suarez, HCPTI’s Corporate Treasurer, informed him on 7 March 2003 that he was going to be terminated and had only three (3) weeks to look for another job; that having confirmed his impending termination on 27 March 2003, Filart decided to “temper” the same by instead reassigning him to Operations Cost Accounting; and, that his reassignment to a position which was not included in HCPTI’s plantilla was a demotion and operated as a termination from employment as of said date. Maintaining that he suffered great humiliation when, in addition to being deprived of his office and its equipments, he received no further

instructions from Filart and Singson regarding his new position, Morales claimed that he was left no other choice but file his complaint for constructive dismissal.14

Served with summons on 7 May 2003,15 HCPTI, Filart and Singson filed their position paper, arguing that Morales abandoned his employment and was not constructively dismissed. Calling attention to the supposed fact that Morales’ negligence had resulted in HCPTI’s payment of P3,350,000.00 in taxes from which it was exempt as a PEZA-registered company, said respondents averred that, confronted by Filart sometime in March 2003 regarding the lapses in his work performance, Morales admitted his inability to handle his tasks at the corporation’s Accounting Department; that as a consequence, HCPTI reassigned Morales from managerial accounting to operations cost accounting as an exercise of its management prerogative to assign its employees to jobs for which they are best suited; and, that despite the justification in Singson’s 4 April 2003 reply to his 31 March 2003 protest against his reassignment, Morales chose to stop reporting for work. Faulting Morales with unjustified refusal to heed the repeated warnings and notices directing him to report for work, HCPTI, Filart and Singson prayed for the dismissal of the complaint and the grant of their counterclaim for attorney’s fees.16

In receipt of the parties’ replies17 and rejoinders,18 Labor Arbiter Facundo L. Leda went on to render a Decision dated 21 November 2003, dismissing for lack of merit Morales’ complaint for constructive dismissal. In discounting said employees’ illegal dismissal from service, the Labor Arbiter ruled that Morales’ reassignment was a valid exercise of HCPTI’s management prerogative which cannot be construed as constructive dismissal absent showing that the same was done in bad faith and resulted in the diminution of his salary and benefits.19 On appeal, the foregoing decision was, however, reversed and set aside in the 29 July 2005 Decision rendered by the NLRC’s Third Division in NLRC NCR CA No. 038548-04. Finding that Morales’ reassignment was a clear demotion despite lack of showing of diminution of salaries and benefits,20 the NLRC disposed of the appeal in the following wise:

The Issues

WHETHER OR NOT THE CHANGE IN THE DESIGNATION/POSITION OF PETITIONER CONSTITUTED CONSTRUCTIVE DISMISSAL.

HELD:

Constructive dismissal exists where there is cessation of work because "continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay" and other benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act of clear discrimination,

insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment. In cases of a transfer of an employee, the rule is settled that the employer is charged with the burden of proving that its conduct and action are for valid and legitimate grounds such as genuine business necessity and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal.

We have carefully pored over the records of the case but found no evidentiary basis for the CA’s finding that Morales was designated as head of HCPTI’s Operations Department37 which, as indicated in the corporation’s plantilla, had the Vice-President for Operations at its helm.38 On the contrary, Morales’ demotion is evident from the fact that his reassignment entailed a transfer from a managerial position to one which was not even included in the corporation’s plantilla. For an employee newly charged with functions which even the CA recognized as pertaining to the Operations Department, it also struck a discordant chord that Morales was, just the same, directed by HCPTI to report to Filart, its Vice- President for Finance39 with whom he already had a problematic working relationship.40 This matter was pointed out in Morales’ 31 March 2003 protest but was notably brushed aside by HCPTI by simply invoking management prerogative in its inter-office memorandum dated 4 April 2003.41

Admittedly, the right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. By management prerogative is meant the right of an employer to regulate all aspects of employment, such as the freedom to prescribe work assignments, working methods, processes to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of workers.Although jurisprudence recognizes said management prerogative, it has been ruled that the exercise thereof, while ordinarily not interfered with, is not absolute and is subject to limitations imposed by law, collective bargaining agreement, and general principles of fair play and justice.45 Thus, an employer may transfer or assign employees from one office or area of operation to another, provided there is no demotion in rank or diminution of salary, benefits, and other privileges, and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause.46 Indeed, having the right should not be confused with the manner in which that right is exercised.47

Although much had been made about Morales’ supposed refusal to heed his employer’s repeated directives for him to return to work, our perusal of the record also shows that HCPTI’s theory of abandonment of employment cannot bear close scrutiny. While ostensibly dated 6 May 2003, the Inter-Office Memorandum labeled as a Second Warning was sent to Morales thru the JRS Express only on 9 May 200357 or two (2) days

after summons were served on HCPTI, Filart and Singson on 7 May 2003.58 Sent to Morales on 26 May 2003 or after the parties’ initial conference before the Labor Arbiter on 19 May 2003,59 there was obviously even less reason for HCPTI’s 22 May 2003 letter denominated as Notice to Report for Work and Final Warning. As a just and valid ground for dismissal, at any rate, abandonment requires the deliberate, unjustified refusal of the employee to resume his employment,60 without any intention of returning.61 Since an employee like Morales who takes steps to protest his dismissal cannot logically be said to have abandoned his work, it is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with abandonment of employment.62

Julies Bakeshop vs. ARNAIZ

Doctrine:             Management has a wide latitude to conduct its own affairs in accordance with the necessities of its business.  This so-called management prerogative, however, should be exercised in accordance with justice and fair play.   Facts:             Reyes hired respondents as chief bakers in his three franchise branches of Julie’s Bakeshop in Sibalom and San Jose, Antique.  On January 26, 2000, respondents filed separate complaints against petitioners for underpayment of wages, payment of premium pay for holiday and rest day, service incentive leave pay, 13th month pay, cost of living allowance (COLA) and attorney’s fees. These complaints were later on consolidated.             Subsequently, in a memorandum dated February 16, 2000, Reyes reassigned respondents as utility/security personnel tasked to clean the outside vicinity of his bakeshops and to maintain peace and order in the area.  Upon service of the memo, respondents, however, refused to sign the same and likewise refused to perform their new assignments by not reporting for work.             In a letter-memorandum dated March 13, 2000, Reyes directed respondents to report back for work and to explain why they failed to assume their duties as utility/security personnel. A second letter-memorandum of the same tenor dated March 28, 2000 was also sent to respondents. Respondents did not heed both memoranda. Proceedings before the Labor Arbiter             Meanwhile, in the preliminary conference set on February 21, 2000, respondents with their counsel, Atty. Ronnie V. Delicana (Atty. Delicana), on one hand, and Reyes on the other, appeared before the Labor Arbiter to explore the possibility of an amicable settlement.  It was agreed that the parties would enter into a compromise agreement on March 7, 2000.  However, on February 29, 2000, respondents, who were then represented by a different counsel, Atty. Mariano R. Pefianco

(Atty. Pefianco), amended their complaints by including in their causes of action illegal dismissal and a claim for reinstatement and backwages.             The supposed signing of the compromise agreement (which could have culminated in respondents receiving the total amount of P54,126.00 as payment for their 13th month pay and separation pay) was reset to March 28, 2000 because of respondents’ non-appearance in the hearing of March 7, 2000. On March 28, 2000, Atty. Pefianco failed to appear despite due notice.  On the next hearing scheduled on April 24, 2000, both Atty. Delicana and Atty. Pefianco appeared but the latter verbally manifested his withdrawal as counsel for respondents.  Thus, respondents, through Atty. Delicana, and Reyes, continued to explore the possibility of settling the case amicably. Manifesting that they need to sleep on the proposed settlement, respondents requested for continuance of the hearing on April 26, 2000.  Come said date, however, respondents did not appear.              In his Decision dated August 25, 2000, the Labor Arbiter expressed dismay over respondents’ lack of good faith in negotiating a settlement.  The Labor Arbiter denounced the way respondents dealt with Atty. Delicana during their discussions for a possible settlement since respondents themselves later on informed the said tribunal that at the time of the said discussions, they no longer considered Atty. Delicana as their counsel.  Despite this, the Labor Arbiter still required the parties to submit their respective position papers. And as respondents’ position paper was filed late and no evidence was attached to prove the allegations therein, the Labor Arbiter resolved to dismiss the complaints

   

Issues: Whether or not the Reassignment of the Respondent is Tantamount ot Illegal Dismissal?

 Held:

             We find no merit in the petition. 

We have held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall of workers.  The exercise of management prerogative, however, is not absolute as it must be exercised in good faith and with due regard to the rights of labor.

 In constructive dismissal cases, the employer has the burden of proving that the transfer

of an employee is for just or valid ground, such as genuine business necessity.  The employer must demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the employee and that the transfer does not involve a demotion in rank or a diminution in salary and other benefits.  “If the employer fails to overcome this burden of proof, the employee’s transfer is tantamount to unlawful constructive dismissal.”

 

 This postulation is not well-taken.  On the contrary, petitioners failed to satisfy the burden

of proving that the transfer was based on just or valid ground. Petitioners’ bare assertions of imminent threat from the respondents are mere accusations which are not substantiated by any proof. This Court is proscribed from making conclusions based on mere presumptions or suppositions.  An employee’s fate cannot be justly hinged upon conjectures and surmises. The act attributed against Tolores does not even convince us as he was merely a suspected culprit in the alleged sabotage for which no investigation took place to establish his guilt or culpability.  Besides, Reyes still retained Tolores as an employee and chief baker when he could have dismissed him for cause if the allegations were indeed found true. In view of these, this Court finds no compelling reason to justify the transfer of respondents from chief bakers to utility/security personnel.  What appears to this Court is that respondents’ transfer was an act of retaliation on the part of petitioners due to the former’s filing of complaints against them, and thus, was clearly made in bad faith.  In fact, petitioner Reyes even admitted that he caused the reassignments due to the pending complaints filed against him.  

 “[D]emotion involves a situation in which an employee is relegated to a subordinate or

less important position constituting a reduction to a lower grade or rank, with a corresponding decrease in duties and responsibilities, and usually accompanied by a decrease in salary.” When there is a demotion in rank and/or a diminution in pay; when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee; or when continued employment is rendered impossible, unreasonable or unlikely, the transfer of an employee may constitute constructive dismissal.

 We agree with the CA in ruling that the transfer of respondents amounted to a demotion.

Although there was no diminution in pay, there was undoubtedly a demotion in titular rank. One cannot deny the disparity between the duties and functions of a chief baker to that of a utility/security personnel tasked to clean and manage the orderliness of the outside premises of the bakeshop. Respondents were even prohibited from entering the bakeshop. The change in the nature of their work undeniably resulted to a demeaning and humiliating work condition.

  As the transfer proves unbearable to respondents as to foreclose any choice on their part

except to forego continued employment, same amounts to constructive dismissal for which reinstatement without loss of seniority rights, full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time their compensation was withheld up to the time of their actual reinstatement, should be granted.[37]  The CA, therefore, did not err in awarding the reliefs prayed for by the respondents as they were, without a doubt, constructively dismissed.

 

ALLIED BANKING CORPORATION vs. COURT OF APPEALS

Facts:

Private respondent Potenciano Galanida was hired by petitioner Allied Banking Corporation on 11 January 1978 and rose from accountant-book(k)eeper to assistant manager in 1991.  His appointment was covered by a “Notice of Personnel Action” which provides as one of the conditions of employment the provision on petitioner’s right to transfer employees:

Private respondent was promoted several times and was transferred to several branches.

Effecting a rotation/movement of officers assigned in the Cebu homebase, petitioner listed respondent as second in the order of priority of assistant managers to be assigned outside of Cebu City having been stationed in Cebu for seven years already.  Private respondent manifested his refusal to be transferred to Bacolod City in a letter dated 19 April 1994 citing as reason parental obligations, expenses, and the anguish that would result if he is away from his family.  He then filed a complaint before the Labor Arbiter for constructive dismissal.

Subsequently, petitioner bank informed private respondent that he was to report to the Tagbilaran City Branch effective 23 May 1994.  Private respondent refused.  In a letter dated 13 June 1994, petitioner warned and required of private respondent as follows:

“There is no discrimination in your transfer.  In fact, among the officers mentioned, only you have refused the new assignment citing difficulty of working away from your family as if the other officers concerned do not suffer the same predicament.  To exempt you from the officer transfer would result in favoritism in your favor and discrimination as against the other officers concerned.

“In furtherance of maintaining a smooth and uninterrupted service to the public, and in accordance with the Bank’s order of priority of rotating its accountants’ places of assignments, you are well aware that Roberto Isla, AM/Accountant, assigned in Cebu for more than ten (10) years, was, on February 14, 1994, reassigned to Iligan City Branch and then to Cagayan de Oro City Branch on June 8, 1994.  Hence, your objection on the ground of your length of service is without merit.

“In view of the foregoing, please explain in writing within three (3) days from receipt hereof why no disciplinary  action should be meted against you for  your having refused to follow instructions concerning the foregoing transfer and reassignment.”

On 5 October 1994, Galanida received an inter-office communication[7] (“Memo”) dated 8 September 1994 from Allied Bank’s Vice-President for Personnel, Mr. Leonso C. Pe.  The Memo informed Galanida that Allied Bank had terminated his services effective 1 September 1994.  The reasons given for the dismissal were:  (1) Galanida’s continued refusal to be transferred from the Jakosalem, Cebu City branch; and (2) his refusal to report for work despite the denial of his application for additional vacation leave.  The salient portion of the Memo reads:

Therefore, your refusal to follow instruction concerning your transfer and reassignment to Bacolod City and to Tagbilaran City is without any justifiable reason and constituted violations of Article XII of the Bank’s EDPP

In view of the foregoing, please be informed that the Bank has terminated your services effective September 1, 1994 and considered whatever benefit, if any, that you are entitled as forfeited in accordance with 04, V Administrative Penalties, page 6 of the Bank’s EDPP which provides as follows:

Issues WHETHER PRIVATE RESPONDENT’S VIOLATIONS OF COMPANY RULES CONSTITUTE A GROUND TO WARRANT THE PENALTY OF DISMISSAL?

Held:

The petition is partly meritorious.

The rule is that the transfer of an employee ordinarily lies within the ambit of the employer’s prerogatives. The employer exercises the prerogative to transfer an employee for valid reasons and according to the requirement of its business, provided the transfer does not result in demotion in rank or diminution of the employee’s salary, benefits and other privileges. In illegal dismissal cases, the employer has the burden of showing that the transfer is not unnecessary, inconvenient and prejudicial to the displaced employee.

The constant transfer of bank officers and personnel with accounting responsibilities from one branch to another is a standard practice of Allied Bank, which has more than a hundred branches throughout the country. Allied Bank does this primarily for internal control.  It also enables bank employees to gain the necessary experience for eventual promotion.  The Bangko Sentral ng Pilipinas, in its Manual of Regulations for Banks and Other Financial Intermediaries, requires the rotation of these personnel.  The Manual directs that the “duties of personnel handling cash, securities and bookkeeping records should be rotated” and that such rotation “should be irregular, unannounced and long enough to permit disclosure of any irregularities or manipulations.”

Galanida was well aware of Allied Bank’s policy of periodically transferring personnel to different branches.  As the Court of Appeals found, assignment to the

different branches of Allied Bank was a condition of Galanida’s employment.  Galanida consented to this condition when he signed the Notice of Personnel Action.

Neither was Galanida’s transfer in the nature of a demotion.  Galanida did not present evidence showing that the transfer would diminish his salary, benefits or other privileges.  Instead, Allied Bank’s letter of 13 June 1994 assured Galanida that he would not suffer any reduction in rank or grade, and that the transfer would involve the same rank, duties and obligations.  Mr. Olveda explained this further in the affidavit he submitted to the Labor Arbiter, thus:

. 

This leaves the issue of whether Galanida could validly refuse the transfer orders on the ground of parental obligations, additional expenses, and the anguish he would suffer if assigned away from his family.

Galanida, through counsel, invokes the Court’s ruling in Dosch v. NLRC.[34] Dosch, however, is not applicable to the present case. Helmut Dosch refused a transfer consequential to a promotion.  We upheld the refusal because no law compels an employee to accept a promotion, and because the position Dosch was supposed to be promoted to did not even exist at that time. This left as the only basis for the charge of insubordination a letter from Dosch in which the Court found “not even the slightest hint of defiance, much less xxx insubordination.”

Moreover, the transfer of an employee to an overseas post, as in the Dosch case, cannot be likened to a transfer from one city to another within the country, which is the situation in the present case.  The distance from Cebu City to Bacolod City or from Cebu City to Tagbilaran City does not exceed the distance from Baguio City to Laoag City or from Baguio City to Manila, which the Court considered a reasonable distance in PT&T v. Laplana.

The refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an employer. Employees may object to, negotiate and seek redress against employers for rules or orders that they regard as unjust or illegal.  However, until and unless these rules or orders are declared illegal or improper by competent authority, the employees ignore or disobey them at their peril.For Galanida’s continued refusal to obey Allied Bank’s transfer orders, we hold that the bank dismissed Galanida for just cause in accordance with Article 282 (a) of the Labor Code. Galanida is thus not entitled to reinstatement or to separation pay.

Meralco Vs. Beltran

Doctrine: As the law regards workers with compassion, an employer’s right to discipline them should be tempered with compassion as well.  In line with this, the imposition of the supreme penalty of dismissal is justified only when there are sufficient grounds as supported by substantial evidence.

  Facts:             Beltran was employed by MERALCO on December 16, 1987.  At the time material to this case, she was holding the position of Senior Branch Clerk at MERALCO’s Pasig branch.  While rendering overtime work on September 28, 1996, a Saturday, Beltran accepted P15,164.48 from Collection Route Supervisor Berlin Marcos (Marcos), which the latter received from customer Andy Chang (Chang).  The cash payment was being made in lieu of a returned check earlier issued as payment for Chang’s electric bill.  Beltran was at first hesitant as it was not part of her regular duties to accept payments from customers but was later on persuaded by Marcos’ persistence.  Hence, Beltran received the payment and issued Auxiliary Receipt No. 87964[6] which she dated September 30, 1996, a Monday, instead of September 28, 1996.  This was done to show that it was an accommodation, an accepted practice in the office.  She thereafter placed the money and the original auxiliary receipt and other documents pertinent to the returned check underneath her other files inside the drawer of her table.             Beltran, however, was only able to remit Chang’s payment on January 13, 1997. Thus, in a Memorandum[7] dated January 16, 1997, she was placed under preventive suspension effective January 20, 1997 pending completion of an investigation. MERALCO considered as misappropriation or withholding of company funds her failure to immediately remit said payment in violation of its Code on Employee Discipline.  Investigation thereafter ensued.[8]            In her Sinumpaang Salaysay,[9] Beltran admitted receipt of Chang’s payment of P15,164.48 on September 28, 1996.  She also admitted having issued an Auxiliary Receipt dated September 30, 1996 and having remitted the amount only on January 13, 1997, after her immediate supervisor, Elenita L. Garcia (Garcia), called her attention about the payment and its non-remittance. Beltran nevertheless explained the circumstances which caused the delay of the turn-over of Chang’s payment.  She recounted that on the day following her receipt of the money, she had a huge fight with her husband which led to their separation; that on September 30, 1997, she reported at MERALCO’s Taguig branch where she worked until 8:30 p.m.; and, that subsequent marital woes coupled with her worries for her ailing child distracted her into forgetting Chang’s payment.  Beltran claimed that after Garcia approached her regarding the unremitted payment of Chang, she immediately looked for the money in her drawer and right there and then handed it over to Garcia together with the other pertinent documents.  Beltran denied having personally used the money.             Garcia, the Administrative Supervisor of MERALCO’s Pasig branch, on the other hand, testified that while doing an accounting of all outstanding returned checks sometime in December 1996, she noticed that Chang’s returned check was missing. Upon further inquiry, she discovered

that Chang had already redeemed the returned check after paying P15,164.48 to Beltran, who in turn issued an Auxiliary Receipt dated September 30, 1996. It was also discovered that the payment has not yet been remitted.  This prompted her to inquire from Beltran on January 7, 1997 about the supposed payment and immediately ordered the remittance of the same.  Beltran, however, failed to do so on that day and even on the next day when she reported for work.  Beltran subsequently went on leave of absence on January 9 and 10, 1997.  It was only on January 13, 1997 that the money with the pertinent documents were handed over.[10]             In a memorandum[11] dated February 25, 1997, the investigator found Beltran guilty of misappropriating and withholding Chang’s payment of P15,164.48 and recommended her dismissal from service thus: 

For wil[l]fully, unlawfully and feloniously withholding and/or misappropriating for your personal purposes or benefit electric bill payment of a Meralco customer, you have thereby violated Section 7 par. (1) of the Company Code on Employee Discipline which proscribes “(m)isappropriating, or withholding, Company funds: penalized therein with dismissal from the service. Because of this act of fraud and dishonesty, you have wil[l]fully breached the trust and confidence reposed in you by your employer.

 x x x x Accordingly, Management is constrained to dismiss you for cause

from the service and employ of the Company, as you are hereby so dismissed effective 13 March 1997, with forfeiture of all rights and privileges.[12]  (Emphasis supplied.)

  

By virtue thereof, Beltran was terminated effective March 13, 1997.[13]             Beltran filed a complaint for illegal dismissal[14] against MERALCO.  She argued that she had no intention to withhold company funds.  Besides, it was not her customary duty to collect and remit payments from customers.  She claimed good faith, believing that her acceptance of Chang’s payment is considered goodwill in favor of both MERALCO and its customer.  If at all, her only violation was a simple delay in remitting the payment, which caused no considerable harm to the company.  Further, her nine years of unblemished service to the company should be taken into account such that the penalty of dismissal is not a commensurate penalty for the unintentional act committed.             MERALCO, on the other hand, maintained that under company policy, Beltran had the duty to remit payment for electric bills by any customer on the day the same was received.  It opined that if indeed the money was kept intact inside the drawer and was not put to personal use, Beltran could have easily turned over the same when Garcia instructed her to do so on January 7, 1997.  However, Beltran failed to remit the money on said date and even on the following day, January 8, when she reported for work.  Worse, in the two succeeding days, she went on leave. Thus, there was a clear

sign of misappropriation of company funds, considered a serious misconduct and punishable by dismissal from the service.  Further, Beltran’s reason for her failure to perform such obligation on account of family problems deserves scant consideration. MERALCO insisted that Beltran’s act renders her unworthy of the trust and confidence demanded of her position.           Ruling of the Labor Arbiter             In a Decision[15] dated June 16, 1999, the Labor Arbiter regarded the penalty of dismissal as not commensurate to the degree of infraction committed as there was no adequate proof of misappropriation on the part of Beltran. If there was delay in Beltran’s remittance of Chang’s payment, it was unintentional and same cannot serve as sufficient basis to conclude that there was misappropriation of company funds.  In fact, Beltran did not even attempt to deny possession of, or refuse to hand in, the money. The Labor Arbiter thus gave compassionate consideration for the neglect to remit the money promptly, stating that it is excusable for Beltran to commit lapses in her work due to serious family difficulties. While the Labor Arbiter commiserated with Beltran’s circumstances and took into account her long and untainted service, he nonetheless imposed disciplinary action in the form of forfeiture of salary for her neglect in remitting the funds at once.  The dispositive portion of his Decision reads as follows: 

                IN THE LIGHT OF THE FOREGOING, the respondent is hereby ordered to reinstate the complainant to her former position without backwages. The forfeiture of backwages should be an equitable penalty for the delay in the remittance of company funds. 

SO ORDERED.[16]         Ruling of the National Labor Relations Commission             Upon appeal, the NLRC reversed the Labor Arbiter’s Decision and dismissed Beltran’s complaint against MERALCO in its Decision[17] dated May 30, 2001.  It found that Beltran withheld company funds by failing to remit it for almost four months.  It disregarded Beltran’s assertion of family problems as the same cannot be used as an excuse for committing a serious misconduct in violation of the trust reposed on her as a Senior Branch Clerk.  The NLRC was convinced that Beltran used the money for her personal needs since her act of taking a leave of absence right after her confrontation with Garcia suggested that she needed time to produce it.  The NLRC thus ruled that MERALCO validly dismissed Beltran from the service in the exercise of its inherent right to discipline its employees.             In her Motion for Reconsideration,[18] Beltran attributed grave abuse of discretion on the part of the NLRC in basing its conclusions on mere inferences and presumptions. Beltran argued that she could not be guilty of withholding Chang’s payment, much more, misappropriating it.  She alleged that Garcia did not order her to remit the money on January 7, 1997 or on the following day. Further, records reveal that she was on leave from January 9 to 10 to attend to her child who was suffering from asthma.  And since January 11 and 12 are Saturday and Sunday, she deemed it appropriate to make the remittance on the following Monday, January 13, 1997.  Garcia, however, refused to accept the money, saying that she already committed withholding of company funds. 

            The NLRC denied Beltran’s Motion for Reconsideration.[19]   Ruling of the Court of Appeals             When Beltran brought the case to the CA via a Petition for Certiorari,[20] the NLRC’s ruling was reversed.  The CA instead agreed with the findings of the Labor Arbiter that there were no serious grounds to warrant Beltran’s dismissal. The CA held that the penalty of dismissal is harsh considering the infraction committed and Beltran’s nine years of unblemished service with MERALCO. It held that Beltran’s mere failure to remit the payment was unintentional and not attended by any ill motive and that her excuse for the inadvertence was reasonable. As such, the CA affirmed the ruling of the Labor Arbiter ordering MERALCO to reinstate Beltran to her former position but with the forfeiture of her salary as an equitable penalty for her negligence. Thus, in its Decision[21] dated November 25, 2005, the petition was resolved as follows: 

                WHEREFORE, premises considered, the instant petition is hereby GRANTED.  The x x x Decision dated May 30, 2001 and the Resolution dated August 22, 2001 of the National Labor Relations Commission are hereby REVERSED. ACCORDINGLY, the Decision of the Labor Arbiter dated June 16, 1999, is hereby AFFIRMED.                 SO ORDERED.[22]  

  

In a Resolution[23] dated July 19, 2006, MERALCO’s Motion for Reconsideration was denied by the CA.  Hence, MERALCO filed this present Petition for Review on Certiorari, raising the lone issue of whether – 

 Issue

 THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE REINSTATEMENT OF [BELTRAN] DESPITE THE UNDISPUTED FINDING THAT SHE IS GUILTY OF WITHHOLDING X X X COMPANY FUNDS.[24]

Our Ruling 

            MERALCO insists that there was convincing basis to dismiss Beltran from employment. While there was no concrete proof of misappropriation, the fact that there was withholding of company funds remains undisputed. This act of negligence by Beltran in the performance of her duties has resulted to the loss of trust and confidence reposed on her, notwithstanding her self-serving allegations of marital woes and family difficulties, which were not even corroborated by any clear evidence.             We do not agree.  On the contrary, we support the CA’s finding that there are no sufficient grounds to warrant Beltran’s dismissal.

             For loss of trust and confidence to be a valid ground for dismissal, it must be based on a willful breach of trust and founded on clearly established facts.  A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.  In addition, loss of trust and confidence must rest on substantial grounds and not on the employer’s arbitrariness, whims, caprices or suspicion. [25]             In the case at bench, Beltran attributed her delay in turning over Chang’s payment to her difficult family situation as she and her husband were having marital problems and her child was suffering from an illness.  Admittedly, she was reminded of Chang’s payment by her supervisor on January 7, 1997 but denied having been ordered to remit the money on that day.  She then reasoned that her continued delay was caused by an inevitable need to take a leave of absence for her to attend to the needs of her child who was suffering from asthma.             It should be emphasized at this point that the burden of proving the legality of an employee’s dismissal lies with the employer.[26]  “Unsubstantiated suspicions, accusations, and conclusions of employers do not provide legal justification for dismissing employees.”[27]  “[M]ere conjectures cannot work to deprive employees of their means of livelihood.”[28] To begin with, MERALCO cannot claim or conclude that Beltran misappropriated the money based on mere suspicion. The NLRC thus erred in concluding that Beltran made use of the money from the mere fact that she took a leave of absence after having been reminded of the unremitted funds.  And even if Beltran delayed handing over the funds to the company, MERALCO still has the burden of proof to show clearly that such act of negligence is sufficient to justify termination from employment.  Moreover, we find that Beltran’s delay does not clearly and convincingly establish a willful breach on her part, that is, which is done “intentionally, knowingly and purposely, without any justifiable excuse.” True, the reasons Beltran proffered for her delay in remitting the cash payment are mere allegations without any concrete proof.  Nonetheless, we emphasize that as the employer, the burden still lies on MERALCO to provide clear and convincing facts upon which the alleged loss of confidence is to be made to rest.             Undoubtedly, Beltran was remiss in her duties for her failure to immediately turn over Chang’s payment to the company. Such negligence, however, is not sufficient to warrant separation from employment. To justify removal from service, the negligence should be gross and habitual.[29] “Gross negligence x x x is the want of even slight care, acting or omitting to act in a situation where there is duty to act, not inadvertently but willfully and intentionally, with a conscious indifference to consequences insofar as other persons may be affected.”[30]  Habitual neglect, on the other hand, connotes repeated failure to perform one’s duties for a period of time, depending upon the circumstances.[31]  No concrete evidence was presented by MERALCO to show that Beltran’s delay in remitting the funds was done intentionally. Neither was it shown that same is willful, unlawful and felonious contrary to MERALCO’s finging as stated in the letter of termination it sent to Beltran.[32]  Surely, Beltran’s single and isolated act of negligence cannot justify her dismissal from service. 

Moreover, Beltran’s simple negligence did not result in any loss.  From the time she received the payment on September 28, 1996 until January 7, 1997 when she was apprised by her

supervisor about Chang’s payment, no harm or damage to the company or to its customers attributable to Beltran’s negligence was alleged by MERALCO.  Also, from the time she was apprised of the non-remittance by her superior on January 7, 1997, until the turn-over of the amount on January 13, 1997, no such harm or damage was ever claimed by MERALCO.

 Under the circumstances, MERALCO’s sanction of dismissal will not be commensurate

to Beltran’s inadvertence not only because there was no clear showing of bad faith and malice but also in consideration of her untainted record of long and dedicated service to MERALCO.[33]  In the similar case of Philippine Long Distance Telephone Company v. Berbano, Jr.,[34] we held that:

 The magnitude of the infraction committed by an employee must

be weighed and equated with the penalty prescribed and must be commensurate thereto, in view of the gravity of the penalty of dismissal or termination from the service.  The employer should bear in mind that in termination cases, what is at stake is not simply the employee’s job or position but [her] very livelihood.  

Where a penalty less punitive would suffice, whatever missteps may be committed by an employee ought not to be visited with a consequence so severe such as dismissal from employment.[35] Hence, we find no reversible error or any grave abuse of discretion on the part of the CA in ordering Beltran’s reinstatement without backwages.  The forfeiture of her salary is an equitable punishment for the simple negligence committed.

CANADIAN OPPORTUNITIES UNLIMITED, INC VS. DALANGIN  

  Facts:            On November 20, 2001, respondent Bart Q. Dalangin, Jr. filed a complaint for illegal dismissal, with prayer for reinstatement and backwages, as well as damages (moral and exemplary) and attorney’s fees, against petitioner Canadian Opportunities Unlimited, Inc. (company).  The company, based in Pasong Tamo, Makati City, provides assistance and related services to applicants for permanent residence in Canada.           Dalangin was hired by the company only in the previous month, or in October 2001, as Immigration and Legal Manager, with a monthly salary of P15,000.00. He was placed on probation for six months. He was to report directly to the Chief Operations Officer, Annie Llamanzares Abad. His tasks involved principally the review of the clients’ applications for immigration to Canada to ensure that they are in accordance with Canadian and Philippine laws.           Through a memorandum[4] dated October 27, 2001, signed by Abad, the company

terminated Dalangin’s employment, declaring him “unfit” and “unqualified” to continue as Immigration and Legal Manager, for the following reasons: Obstinacy and utter disregard of company policies, Lack of concern for the company’s interest despite having just been employed in the company, Showed lack of enthusiasm toward work., Showed lack of interest in fostering relationship with his co-employees. Issue:Whether or not Dalangin, a probationary employee, was validly dismissed?  Held:

          We disagree.           The essence of a probationary period of employment fundamentally lies in the purpose or objective of both the employer and the employee during the period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the latter seeks to prove to the former that he has the qualifications to meet the reasonable standards for permanent employment. 

 Contrary to the CA’s conclusions, we find substantial evidence indicating that

the company was justified in terminating Dalangin’s employment, however brief it had been.  Time and again, we have emphasized that substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.

 Dalangin overlooks the fact, wittingly or unwittingly, that he offered glimpses

of his own behavior and actuations during his four-week stay with the company; he betrayed his negative attitude and regard for the company, his co-employees and his work.

 Dalangin admitted in compulsory arbitration that the proximate cause for his

dismissal was his refusal to attend the company’s “Values Formation Seminar” scheduled for October 27, 2001, a Saturday. He refused to attend the seminar after he learned that it had no relation to his duties, as he claimed, and that he had to leave at 2:00 p.m. because he wanted to be with his family in the province.  When Abad insisted that he attend the seminar to encourage his co-employees to attend, he stood pat on not attending, arguing that marked differences exist between their positions and duties, and insinuating that he did not want to join the other employees. He also questioned the scheduled 2:00 p.m. seminars on Saturdays as they were not supposed to be doing a company activity beyond 2:00 p.m. He considers 2:00 p.m. as the close of working hours on Saturdays; thus, holding them beyond 2:00 p.m. would be in violation of the law.

 The “Values Formation Seminar” incident is an eye-opener on the kind of

person and employee Dalangin was. His refusal to attend the seminar brings into focus

and validates what was wrong with him, as Abad narrated in her affidavit and as reflected in the termination of employment memorandum. It highlights his lack of interest in familiarizing himself  with the company’s objectives and policies. Significantly, the seminar involved acquainting and updating the employees with the company’s policies and objectives.  Had he attended the seminar, Dalangin could have broadened his awareness of the company’s policies, in addition to Abad’s briefing him about the company’s policies on punctuality and attendance, and the procedures to be followed in handling the clients’ applications. No wonder the company charged him with obstinacy.

 The incident also reveals Dalangin’s lack of interest in establishing good

working relationship with his co-employees, especially the rank and file; he did not want to join them because of his view that the seminar was not relevant to his position and duties. It also betrays an arrogant and condescending attitude on his part towards his co-employees, and a lack of support for the company objective that company managers be examples to the rank and file employees.

  In the face of Abad’s direct statements, as well as those of his co-employees, it

is puzzling that Dalangin chose to be silent about the charges, other than saying that the company could not cite any policy he violated. All along, he had been complaining that he was not able to explain his side, yet from the labor arbiter’s level, all the way to this Court, he offered no satisfactory explanation of the charges. In this light, coupled with Dalangin’s adamant refusal to attend the company’s “Values Formation Seminar” and a similar program scheduled earlier, we find credence in the company’s submission that Dalangin was unfit to continue as its Immigration and Legal Manager. As we stressed earlier, we are convinced that the company had seen enough from Dalangin’s actuations, behavior and deportment during a four-week period to realize that Dalangin would be a liability rather than an asset to its operations.

 We, therefore, disagree with the CA that the company could not have fully

determined Dalangin’s performance barely one month into his employment. As we said in International Catholic Migration Commission, the probationary term or period denotes its purpose but not its length.  To our mind, four weeks was enough for the company to assess Dalangin’s fitness for the job and he was found wanting. In separating Dalangin from the service before the situation got worse, we find the company not liable for illegal dismissal.

 

COSMOS BOTTLING CORP vs. WILSON FERMIN,                                    Facts:

Wilson B. Fermin (Fermin) was a forklift operator at Cosmos Bottling Corporation (COSMOS), where he started his employment on 27 August 1976.[4] On 16 December 2002, he was accused of stealing the cellphone of his fellow employee, Luis Braga (Braga). Fermin was then given a Show Cause Memorandum, requiring him to explain why the cellphone was found inside his locker.In compliance therewith, he submitted an affidavit the following day, explaining that he only hid the phone as a practical joke and had every intention of returning it to Braga.

On 21 December 2002, Braga executed a handwritten narration of events .After conducting an investigation, COSMOS found Fermin guilty of stealing

Braga’s phone in violation of company rules and regulations. Consequently, on 2 October 2003, the company terminated Fermin from employment after 27 years of service,effective on 6 October 2003.

Following the dismissal of Fermin from employment, Braga executed an affidavit, which stated the belief that the former had merely pulled a prank without any intention of stealing the cellphone, and withdrew from COSMOS his complaint against Fermin.[13]

Meanwhile, Fermin filed a Complaint for Illegal Dismissal, which the Labor Arbiter (LA) dismissed for lack of merit on the ground that the act of taking a fellow employee’s cellphone amounted to gross misconduct.[15] Further, the LA likewise took into consideration Fermin’s other infractions, namely: (a) committing acts of disrespect to a superior officer, and (b) sleeping on duty and abandonment of duty.

Fermin filed an appeal with the National Labor Relations Commission (NLRC), which affirmed the ruling of the LA[17] and denied Fermin’s subsequent Motion for Reconsideration.[18]

Thereafter, Fermin filed a Petition for Certiorari with the Court of Appeals (CA),[19] which reversed the rulings of the LA and the NLRC and awarded him his full retirement benefits.[20] Although the CA accorded with finality the factual findings of the lower tribunals as regards Fermin’s commission of theft, it nevertheless held that the penalty of dismissal from service was improper on the ground that the said violation did not amount to serious misconduct or wilful disobedience,

Issue: Whether or not Fermin committed a clear act of bad faith and dishonesty in taking the cellphone of Braga and denying knowledge?

Held:

It must be noted that in the case at bar, all the lower tribunals were in agreement that Fermin’s act of taking Braga’s cellphone amounted to theft. Factual findings made by administrative agencies, if established by substantial evidence as borne out by the records, are final and binding on this Court, whose jurisdiction is limited to

reviewing questions of law. The only disputed issue left for resolution is whether the imposition of the penalty of dismissal was appropriate. We rule in the affirmative.

Theft committed against a co-employee is considered as a case analogous to serious misconduct, for which the penalty of dismissal from service may be meted out to the erring employee

 Misconduct involves “the transgression of some established

and definite rule of action, forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.” For misconduct to be serious and therefore a valid ground for dismissal, it must be:

 1. of grave and aggravated character and not

merely trivial or unimportant and2. connected with the work of the employee.

In this case, the LA has already made a factual finding, which was affirmed by both the NLRC and the CA, that Fermin had committed theft when he took Braga’s cellphone. Thus, this act is deemed analogous to serious misconduct, rendering Fermin’s dismissal from service just and valid.

Further, the CA was correct in ruling that previous infractions may be cited as justification for dismissing an employee only if they are related to the subsequent offense. However, it must be noted that such a discussion was unnecessary since the theft, taken in isolation from Fermin’s other violations, was in itself a valid cause for the termination of his employment.

Finally, it must be emphasized that the award of financial compensation or assistance to an employee validly dismissed from service has no basis in law. Therefore, considering that Fermin’s act of taking the cellphone of his co-employee is a case analogous to serious misconduct, this Court is constrained to reverse the CA’s ruling as regards the payment of his full retirement benefits. In the same breath, neither can this Court grant his prayer for backwages.

ALILING VS. FELINCIANO

Facts:           Via  a letter dated June 2, 2004,[6] respondent Wide Wide World Express Corporation (WWWEC) offered to employ petitioner Armando Aliling (Aliling) as “Account Executive (Seafreight Sales),” with the following compensation package: 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 [sic] probationary period shall be made as basis for confirmation to Regular or Permanent Status.”            

Training then started. 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.

 Barely 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.

Nonong           Thereafter, in a letter of September 25, 2004,[10] 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[11] a copy of his timesheet[12] 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.           In a separate letter dated September 27, 2004,[13] Aliling wrote San Mateo stating: “Pursuant to your instruction on September 20, 2004, I hereby tender my resignation effective October 15, 2004.” 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[14] to management that San Mateo had forced him to resign.           Lariosa’s response-letter of October 1, 2004,[15] informed Aliling that his case

was still in the process of being evaluated. On October 6, 2004,[16] 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.           Earlier, however, or on October 4, 2004, Aliling filed a Complaint[17] 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,[18] 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 in its Position Paper dated November 22, 2004[19] that, in addition to the letter-offer and employment contract adverted to, WWWEC and Aliling have signed a letter of appointment[20] on June 11, 2004 containing the following terms of engagement.   ISSUE: whether or not petitioner was, during the period material, a probationary or regular employee is of pivotal import. Its resolution is doubtless necessary at arriving at a fair and just disposition of the controversy.

 

Held:  

Petitioner is a regular employee   From our review, it appears that the labor arbiter, and later the NLRC,

considered Aliling a probationary employee despite finding that he was not informed of the reasonable standards by which his probationary employment was to be judged.

 The CA, on the other hand, citing Cielo v. National Labor Relations

Commission,[29] ruled that petitioner was a regular employee from the outset inasmuch as he was not informed of the standards by which his probationary employment would be measured.  The CA wrote:

 Petitioner was regularized from the time of the execution of

the employment contract on June 11, 2004, although respondent company had arbitrarily shortened his tenure. As pointed out, respondent company did not make known the reasonable standards under which he will qualify as a regular employee at the time of his engagement. Hence, he was deemed to have been hired from day one as a regular employee.[30] (Emphasis supplied.)

 Based on the facts established in this case in light of extant jurisprudence, the

CA’s holding as to the kind of employment petitioner enjoyed is correct. So was the NLRC ruling, affirmatory of that of the labor arbiter. In the final analysis, one common thread runs through the holding of the labor arbiter, the NLRC and the CA, i.e., petitioner Aliling, albeit hired from management’s standpoint as a probationary employee, was deemed a regular employee by force of the following self-explanatory provisions.

  To repeat, the labor arbiter, NLRC and the CA are agreed, on the basis of

documentary evidence adduced, that respondent WWWEC did not inform petitioner Aliling of the reasonable standards by which his probation would be measured against at the time of his engagement. The Court is loathed to interfere with this factual determination. As We have held:

 Settled is the rule that the findings of the Labor Arbiter,

when affirmed by the NLRC and the Court of Appeals, are binding on the Supreme Court, unless patently erroneous. It is not the function of the Supreme Court to analyze or weigh all over again the evidence already considered in the proceedings below. The jurisdiction of this Court in a petition for review on certiorari is limited to reviewing only errors of law, not of fact, unless the factual findings being assailed are not supported by evidence on record or the impugned judgment is based on a misapprehension of facts.[32]

  

 The more recent Peñafrancia Tours and Travel Transport, Inc., v. Sarmiento[33] has reaffirmed the above ruling, to wit:

 Finally, the CA affirmed the ruling of the NLRC and

adopted as its own the latter's factual findings. Long-established is the doctrine that findings of fact of quasi-judicial bodies x x x are accorded respect, even finality, if supported by substantial evidence. When passed upon and upheld by the CA, they are binding and conclusive upon this Court and will not normally be disturbed. Though this doctrine is not without exceptions, the Court finds that none are applicable to the present case. WWWEC also cannot validly argue that “the factual findings being assailed are

not supported by evidence on record or the impugned judgment is based on a misapprehension of facts.” Its very own letter-offer of employment argues against its above posture. Excerpts of the letter-offer:

 Additionally, upon the effectivity of your probation, you

and your immediate superior are required to jointly define your objectives compared with the job requirements of the position. Based on the pre-agreed objectives, your performance shall be reviewed on

the 3rd month to assess your competence and work attitude. The 5th month Performance Appraisal shall be the basis in elevating or confirming your employment status from Probationary to Regular.

 Failure to meet the job requirements during the probation

stage means that your services may be terminated without prior notice and without recourse to separation pay. (Emphasis supplied.)

  

Respondents further allege that San Mateo’s email dated July 16, 2004 shows that the standards for his regularization were made known to petitioner Aliling at the time of his engagement. To recall, in that email message, San Mateo reminded Aliling of the sales quota he ought to meet as a condition for his continued employment, i.e., that the GX trucks should already be 80% full by August 5, 2004. Contrary to respondents’ contention, San Mateo’s email cannot support their allegation on Aliling being informed of the standards for his continued employment, such as the sales quota, at the time of his engagement. As it were, the email message was sent to Aliling more than a month after he signed his employment contract with WWWEC. The aforequoted Section 6 of the Implementing Rules of Book VI, Rule VIII-A of the Code specifically requires the employer to inform the probationary employee of such reasonable standards at the time of his engagement, not at any time later; else, the latter shall be considered a regular employee. Thus, pursuant to the explicit provision of Article 281 of the Labor Code, Section 6(d) of the Implementing Rules of Book VI, Rule VIII-A of the Labor Code and settled jurisprudence, petitioner Aliling is deemed a regular employee as of June 11, 2004, the date of his employment contract.

   

Petitioner was illegally dismissed 

 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 

 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.

 

PNB vs. NLRC

This case stemmed from a complaint for illegal dismissal, unfair labor practice and refund of cash bond filed by petitioners against respondents before the Arbitration Branch of the National Labor Relations Commission (NLRC).  The petition at bar seeks the annulment of the resolution of the NLRC dated July 5, 1993 reversing the decision of the Labor Arbiter finding respondents liable for the charges, and its resolution dated August 10, 1993 denying petitioners' motion for reconsideration.

The undisputed facts are as follows:

On August 23, 1980, Fortune Tobacco Corporation (FTC) and Fortune Integrated Services, Inc. (FISI) entered into a contract for security services where the latter undertook to provide security guards for the protection and security of the former.  The petitioners were among those engaged as security guards pursuant to the contract.

On February 1, 1991, the incorporators and stockholders of FISI sold out lock, stock and barrel to a group of new stockholders by executing for the purpose a "Deed of Sale of Shares of Stock".  On the same date, the Articles of Incorporation of FISI was amended changing its corporate name to Magnum Integrated Services, Inc. (MISI).  A new by-laws was likewise adopted and approved by the Securities and Exchange Commission on June 4, 1993.

On October 15, 1991, FTC terminated the contract for security services which resulted in the displacement of some five hundred eighty two (582) security guards assigned by FISI/MISI to FTC, including the petitioners in this case.  FTC engaged the services of two (2) other security agencies, Asian Security Agency and Ligalig Security Services, whose security guards were posted on October 15, 1991 to replace FISI's security guards.

Sometime in October 1991, the Fortune Tobacco Labor Union, an affiliate of the National Federation of Labor Unions (NAFLU), and claiming to be the bargaining agent of the security guards, sent a Notice of Strike to FISI/MISI.  On November 14, 1991, the members of the union which include petitioners picketed the premises of FTC.  The Regional Trial Court of Pasig, however, issued a writ of injunction to enjoin the picket.

On November 29, 1991, Simeon de Leon, together with sixteen (16) other complainants instituted the instant case before the Arbitration Branch of the NLRC.  The complaint was later amended to allow the inclusion of other complainants.

The parties submitted the following issues for resolution:

(1)  Whether petitioners were illegally dismissed;

(2)  Whether respondents are guilty of unfair labor practice; and

(3)  Whether petitioners are entitled to the refund of their cash bond deposited with respondent FISI.

Petitioners alleged that they were regular employees of FTC which was also using the corporate names Fortune Integrated Services, Inc. and Magnum Integrated Services, Inc.  They were assigned to work as security guards at the company's main factory plant, its tobacco redrying plant and warehouse.  They averred that they performed their duties under the control and supervision of FTC's security supervisors.  Their services, however, were severed in October 1991 without valid cause and without due process.  Petitioners claimed that their dismissal was part of respondents' design to bust their newly-organized union which sought to enforce their rights under the Labor Standards law.[1]

Respondent FTC, on the other hand, maintained that there was no employer-employee relationship between FTC and petitioners.  It said that at the time of the termination of their services, petitioners were the employees of MISI which was a separate and distinct corporation from FTC.  Hence, petitioners had no cause of action against FTC.[2]

Respondent FISI, meanwhile, denied the charge of illegal dismissal and unfair labor practice.  It argued that petitioners were not dismissed from service but were merely placed on floating status pending re-assignment to other posts.  It alleged that the temporary displacement of petitioners was not due to its fault but was the result of the pretermination by FTC of the contract for security services.[3]

The Labor Arbiter found respondents liable for the charges.  Rejecting FTC's argument that there was no employer-employee relationship between FTC and petitioners, he ruled that FISI and FTC should be considered as a single employer.  He observed that the two corporations have common stockholders and they share the same business address.  In addition, FISI had no client other than FTC and other corporations belonging to the group of companies owned by Lucio Tan.  The Labor Arbiter thus found respondents guilty of union busting and illegal dismissal.  He observed that not long after the stockholders of FISI sold all their stocks to a new set of stockholders, FTC terminated the contract of security services and engaged the services of two other security agencies.  FTC did not give any reason for the termination of the contract.  The Labor Arbiter gave credence to petitioners' theory that respondents' precipitate termination of their employment was intended to bust their union.  Consequently, the Labor Arbiter ordered respondents to pay petitioners their backwages and separation pay, to refund their cash bond deposit, and to pay attorney's fees.[4]

On appeal, the NLRC reversed and set aside the decision of the Labor Arbiter.  First, it held that the Labor Arbiter erred in applying the "single employer" principle and concluding that there was an employer-employee relationship between FTC and FISI on one hand, and petitioners on the other hand.  It found that at the time of the termination of the contract of security services on October 15, 1991, FISI which, at that time, had been renamed Magnum Integrated Services, Inc. had a different set of stockholders and officers from that of FTC.  They also had separate offices.  The NLRC held that the principle of "single employer" and the doctrine of piercing the corporate veil could not apply under the circumstances.  It further ruled that the proximate cause for the displacement of petitioners was the termination of the contract for security services by FTC on October 15, 1991.  FISI could not be faulted for the severance of petitioners' assignment at the premises of FTC.  Consequently, the NLRC held that the charge of

illegal dismissal had no basis.  As regards the charge of unfair labor practice, the NLRC found that petitioners who had the burden of proof failed to adduce any evidence to support their charge of unfair labor practice against respondents.  Hence, it ordered the dismissal of petitioners' complaint.[5]

The petitioners filed a motion for reconsideration of the resolution of the NLRC but the same was denied.[6] Hence, this petition.

We gave due course to the petition on May 15, 1995.  Thus, the ruling in St. Martin Funeral Home vs. NLRC[7] remanding all petitions for certiorari from the decision of the NLRC to the Court of Appeals does not apply to the case at bar.

The petition is impressed with merit.

An examination of the facts of this case reveals that there is sufficient ground to conclude that respondents were guilty of interfering with the right of petitioners to self-organization which constitutes unfair labor practice under Article 248 of the Labor Code.[8] Petitioners have been employed with FISI since the 1980s and have since been posted at the premises of FTC -- its main factory plant, its tobacco redrying plant and warehouse.  It appears from the records that FISI, while having its own corporate identity, was a mere instrumentality of FTC, tasked to provide protection and security in the company premises.  The records show that the two corporations had identical stockholders and the same business address.  FISI also had no other clients except FTC and other companies belonging to the Lucio Tan group of companies.  Moreover, the early payslips of petitioners show that their salaries were initially paid by FTC.[9] To enforce their rightful benefits under the laws on Labor Standards, petitioners formed a union which was later certified as bargaining agent of all the security guards.  On February 1, 1991, the stockholders of FISI sold all their participations in the corporation to a new set of stockholders which renamed the corporation Magnum Integrated Services, Inc.  On October 15, 1991, FTC, without any reason, preterminated its contract of security services with MISI and contracted two other agencies to provide security services for its premises.  This resulted in the displacement of petitioners.  As MISI had no other clients, it failed to give new assignments to petitioners.  Petitioners have remained unemployed since then.  All these facts indicate a concerted effort on the part of respondents to remove petitioners from the company and thus abate the growth of the union and block its actions to enforce their demands in accordance with the Labor Standards laws.  The Court held in Insular Life Assurance Co., Ltd., Employees Association-NATU vs. Insular Life Assurance Co., Ltd.:[10]

“The test of whether an employer has interfered with and coerced employees within the meaning of section (a) (1) is whether the employer has engaged in conduct which it may reasonably be said tends to interfere with the free exercise of employees' rights under section 3 of the Act, and it is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of threats of the employer if there is a reasonable inference that anti-union conduct of the employer does have an adverse effect on self-organization and collective bargaining.”[11]

We are not persuaded by the argument of respondent FTC denying the presence of

an employer-employee relationship.  We find that the Labor Arbiter correctly applied the doctrine of piercing the corporate veil to hold all respondents liable for unfair labor practice and illegal termination of petitioners' employment.  It is a fundamental principle in corporation law that a corporation is an entity separate and distinct from its stockholders and from other corporations to which it is connected.  However, when the concept of separate legal entity is used to defeat public convenience, justify wrong, protect fraud or defend crime, the law will regard the corporation as an association of persons, or in case of two corporations, merge them into one.  The separate juridical personality of a corporation may also be disregarded when such corporation is a mere alter ego or business conduit of another person.[12] In the case at bar, it was shown that FISI was a mere adjunct of FTC.  FISI, by virtue of a contract for security services, provided FTC with security guards to safeguard its premises.  However, records show that FISI and FTC have the same owners and business address, and FISI provided security services only to FTC and other companies belonging to the Lucio Tan group of companies.  The purported sale of the shares of the former stockholders to a new set of stockholders who changed the name of the corporation to Magnum Integrated Services, Inc. appears to be part of a scheme to terminate the services of FISI's security guards posted at the premises of FTC and bust their newly-organized union which was then beginning to become active in demanding the company's compliance with Labor Standards laws.  Under these circumstances, the Court cannot allow FTC to use its separate corporate personality to shield itself from liability for illegal acts committed against its employees.

Thus, we find that the termination of petitioners' services was without basis and therefore illegal.  Under Article 279 of the Labor Code, an employee who is unjustly dismissed from work is entitled to reinstatement without loss of seniority rights and other privileges, and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was witheld from him up to the time of his actual reinstatement.  However, if reinstatement is no longer possible, the employer has the alternative of paying the employee his separation pay in lieu of reinstatement.[13]

COCA COLA BOTTLERS PHILS., INC vs. NLRC

FACTS:

On 7 April 1986 COCA COLA entered into a contract of janitorial services with Bacolod Janitorial Services (BJS) stipulating[3] among others -

That the First Party (COCA COLA) desires to engage the services of the Second Party (BJS), as an Independent Contractor, to perform and provide for the maintenance, sanitation and cleaning services for the areas hereinbelow mentioned, all located within the aforesaid building of the First Party

Every year thereafter a service contract was entered into between the parties under similar terms and conditions until about May 1994.

On 26 October 1989 COCA COLA hired private respondent Ramon Canonicato as a casual employee and assigned him to the bottling crew as a substitute for absent employees.  In April 1990 COCA COLA terminated Canonicato's casual employment.  Later that year COCA COLA availed of Canonicato's services, this time as a painter in contractual projects which lasted from fifteen (15) to thirty (30) days.[5]

On 1 April 1991 Canonicato was hired as a janitor by BJS which assigned him to COCA COLA considering his familiarity with its premises.  On 5 and 7 March 1992 Canonicato started painting the facilities of COCA COLA and continued doing so several months thereafter or so for a few days every time until 6 to 25 June 1993.

Goaded by information that COCA COLA employed previous BJS employees who filed a complaint against the company for regularization pursuant to a compromise agreement, Canonicato submitted a similar complaint against COCA COLA to the Labor Arbiter on 8 June 1993.[9]  The complaint was docketed as RAB Case No. 06-06-10337-93.

Without notifying BJS, Canonicato no longer reported to his COCA COLA assignment starting 29 June 1993.  On 15 July 1993 he sent his sister Rowena to collect his salary from BJS.[10] BJS released his salary but advised Rowena to tell Canonicato to report for work.  Claiming that he was barred from entering the premises of COCA COLA on either 14 or 15 July 1993, Canonicato met with the proprietress of BJS, Gloria Lacson, who offered him assignments in other firms which he however refused.[11]

On 23 July 1993 Canonicato amended his complaint against COCA COLA by citing instead as grounds therefor illegal dismissal and underpayment of wages.  He included BJS therein as a co-respondent.[12] On 28 September 1993 BJS sent him a letter advising him to report for work within three (3) days from receipt, otherwise, he would be considered to have abandoned his job.[13]

On 28 April 1994 the Labor Arbiter ruled that:  (a) there was no employer-employee relationship between COCA COLA and Ramon Canonicato because BJS was Canonicato's real employer; (b) BJS was a legitimate job contractor, hence, any liability of COCA COLA as to Canonicato's salary or wage differentials was solidary with BJS in accordance with pars. 1 and 2 of Art. 106, Labor Code; (c) COCA COLA and BJS must jointly and severally pay Canonicato his wage differentials amounting to P2,776.80 and his 13th month salary of P1,068.00, including ten (10%) percent attorney's fees in the sum of P384.48.  The Labor Arbiter also ordered that all other claims by Canonicato against COCA COLA be dismissed for lack of employer-employee relationship; that the complaint for illegal dismissal as well as all the other claims be likewise dismissed for lack of merit; and that COCA COLA and BJS deposit P4,429.28 with the Department of Labor Regional Arbitration Branch Office within ten (10) days from receipt of the decision.[14]

The NLRC rejected on appeal the decision of the Labor Arbiter on the ground that the janitorial services of Canonicato were found to be necessary or desirable in the usual business or trade of COCA COLA.  The NLRC accepted Canonicato's proposition that his work with the BJS was the same as what he did while still a casual employee of

COCA COLA.  In so holding the NLRC applied Art. 280 of the Labor Code and declared that Canonicato was a regular employee of COCA COLA and entitled to reinstatement and payment of P18,105.10 in back wages.[15]

ISSUE: Whether or not NLRC's finding that janitorial services were necessary and desirable in COCA COLA's trade and business ?

Whether or not an employment relationship existed between the parties

Held:

This judicial notice, of course, rests on the assumption that the independent contractor is a legitimate job contractor so that there can be no doubt as to the existence of an employer-employee relationship between contractor and the worker.  In this situation, the only pertinent question that may arise will no longer deal with whether there exists an employment bond but whether the employee may be considered regular or casual as to deserve the application of Art. 280 of the Labor Code.

It is an altogether different matter when the very existence of an employment relationship is in question.  This was the issue generated by Canonicato's application for regularization of his employment with COCA COLA and the subsequent denial by the latter of an employer-employee relationship with the applicant.  It was error therefore for the NLRC to apply Art. 280 of the Labor Code in determining the existence of an employment relationship of the parties herein, especially in light of our explicit holding in Singer Sewing Machine Company v. Drilon[20] that -

x x x x [t]he definition that regular employees are those who perform activities which are desirable and necessary for the business of the employer is not determinative in this case.  Any agreement may provide that one party shall render services for and in behalf of another for a consideration (no matter how necessary for the latter's business) even without being hired as an employee.  This is precisely true in the case of an independent contractorship as well as in an agency agreement.  The Court agrees with the petitioner's argument that Article 280 is not the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of employees, i.e., regular employees and casual employees, for purposes of determining the right of an employee to certain benefits, to join or form a union, or to security of tenure.  Article 280 does not apply where the existence of an employment relationship is in dispute.

In determining the existence of an employer-employee relationship it is necessary to determine whether the following factors are present:  (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power to dismiss; and, (d) the power to control the employee's conduct.[21] Notably, these are all found in the relationship between BJS and Canonicato and not between Canonicato and petitioner COCA COLA.  As the Solicitor-General manifested[22]-

In the instant case, the selection and engagement of the janitors for petitioner were done

by BJS.  The application form and letter submitted by private respondent (Canonicato) to BJS show that he acknowledged the fact that it was BJS who did the hiring and not petitioner x x x x

BJS paid the wages of private respondent, as evidenced by the fact that on July 15, 1993, private respondent sent his sister to BJS with a note authorizing her to receive his pay.

Power of dismissal is also exercised by BJS and not petitioner.  BJS is the one that assigns the janitors to its clients and transfers them when it sees fit.  Since BJS is the one who engages their services, then it only follows that it also has the power to dismiss them when justified under the circumstances.

Lastly, BJS has the power to control the conduct of the janitors.  The supervisors of petitioner, being interested in the result of the work of the janitors, also gives suggestions as to the performance of the janitors, but this does not mean that BJS has no control over them.  The interest of petitioner is only with respect to the result of their work.  On the other hand, BJS oversees the totality of their performance.

The power of the employer to control the work of the employee is said to be the most the most significant determinant.  Canonicato disputed this power of BJS over him by asserting that  his employment with COCA COLA was not interrupted by his application with BJS since his duties before and after he applied for regularization were the same, involving as they did, working in the maintenance department and doing painting tasks within its facilities.  Canonicato cited the Labor Utilization Reports of COCA COLA showing his painting assignments.  These reports, however, are not expressive of the true nature of the relationship between Canonicato and COCA COLA; neither do they detract from the fact that BJS exercised real authority over Canonicato as its employee.

It is clear from these established circumstances that NLRC should have recognized BJS as the employer of Canonicato and not COCA COLA.  This is demanded by the fact that it did not disturb, and therefore it upheld, the finding of the Labor Arbiter that BJS was truly a legitimate job-contractor and could by itself hire its own employees.  The Commission could not have reached any other legitimate conclusion considering that BJS satisfied all the requirements of a job-contractor under the law, namely, (a) the ability to carry on an independent business and undertake the contract work on its own account under its own responsibility according to its manner and method, free from the control and direction of its principal or client in all matters connected with the performance of the work except as to the results thereof; and, (b) the substantial capital or investment in the form of tools, equipment, machinery, work premises, and other materials which are necessary in the conduct of its business.

PHILIPPINE NATIONAL BANK vs. FLORENCE O. CABANSAG,

The Facts

FACTS In late 1998, [herein Respondent Florence Cabansag] arrived in Singapore as a tourist. She applied for employment, with the Singapore Branch of the Philippine National Bank. At the time, the Singapore PNB Branch was under the helm of Ruben C. Tobias, a lawyer, as General Manager, with the rank of Vice-President of the Bank. She applied for employment as Branch Credit Officer, at a total monthly package of $SG4,500.00, effective upon assumption of duties after approval. Ruben C. Tobias found her eminently qualified and wrote on October 26, 1998, a letter to the President of the Bank in Manila, recommending the appointment of Florence O. Cabansag, for the position. 

On December 7, 1998, Ruben C. Tobias wrote a letter to Florence O. Cabansag offering her a temporary appointment, as Credit Officer, at a basic salary of Singapore Dollars 4,500.00, a month and, upon her successful completion of her probation to be determined solely, by the Bank, she may be extended at the discretion of the Bank, a permanent appointment and that her temporary appointment was subject to certain terms and conditions. 

Cabansag accepted the position and assumed office. In the meantime, the Philippine Embassy in Singapore processed the employment contract of Florence O. Cabansag and, on March 8, 1999, she was issued by the Philippine Overseas Employment Administration, an ‘Overseas Employment Certificate,’ certifying that she was a bona fide contract worker for Singapore. 

Barely three (3) months in office Tobias told Cabansag that her resignation was imperative as a ‘cost-cutting measure’ of the Bank. Tobias, likewise, told Cabansag that the PNB Singapore Branch will be sold or transformed into a remittance office and that, in either way, she had to resign from her employment. She then asked Ruben C. Tobias that she be furnished with a ‘Formal Advice’ from the PNB Head Office in Manila. However, Ruben C. Tobias flatly refused. Florence O. Cabansag did not submit any letter of resignation. 

On April 16, 1999, Ruben C. Tobias again summoned Florence O. Cabansag to his office and demanded that she submit her letter of resignation, with the pretext that he needed a Chinese-speaking Credit Officer to penetrate the local market, with the information that a Chinese-speaking Credit Officer had already been hired and will be reporting for work soon. She was warned that, unless she submitted her letter of resignation, her employment record will be blemished with the notation ‘DISMISSED’ spread thereon.

Without giving any definitive answer, Florence O. Cabansag asked Ruben C. Tobias that she be given sufficient time to look for another job. Ruben C. Tobias told her that she should be ‘out’ of her employment by May 15, 1999. 

However, on April 19, 1999, Ruben C. Tobias again summoned Florence O. Cabansag and adamantly ordered her to submit her letter of resignation. She refused. On April 20, 1999, she received a letter from Ruben C. Tobias terminating her employment with the Bank. 

On January 18, 2000, the Labor Arbiter rendered judgment in favor of the Complainant and against the Respondents. PNB appealed the labor arbiter’s Decision to the NLRC. In a Resolution dated June 29, 2001, the Commission affirmed that Decision. 

Ruling of the Court of Appeals

In disposing of the Petition for Certiorari, the CA noted that petitioner bank had failed to adduce in evidence the Singaporean law supposedly governing the latter’s employment Contract with respondent.  The appellate court found that the Contract had actually been processed by the Philippine Embassy in Singapore and approved by the Philippine Overseas Employment Administration (POEA), which then used that Contract as a basis for issuing an Overseas Employment Certificate in favor of respondent.

According to the CA, even though respondent secured an employment pass from the Singapore Ministry of Employment, she did not thereby waive Philippine labor laws, or the jurisdiction of the labor arbiter or the NLRC over her Complaint for illegal dismissal.  In so doing, neither did she submit herself solely to the Ministry of Manpower of Singapore’s jurisdiction over disputes arising from her employment.  The appellate court further noted that a cursory reading of the Ministry’s letter will readily show that no such waiver or submission is stated or implied.

Finally, the CA held that petitioner had failed to establish a just cause for the dismissal of respondent.  The bank had also failed to give her sufficient notice and an opportunity to be heard and to defend herself.  The CA ruled that she was consequently entitled to reinstatement and back wages, computed from the time of her dismissal up to the time of her reinstatement.

Hence, this Petition.[7]

Issues

Petitioner submits the following issues for our consideration:

“1.    Whether or not the arbitration branch of the NLRC in the National Capital Region has jurisdiction over the instant controversy;

“2.    Whether or not the arbitration of the NLRC in the National Capital Region is the most convenient venue or forum to hear and decide the instant controversy; and

“3.    Whether or not the respondent was illegally dismissed, and therefore, entitled to recover moral and exemplary damages and attorney’s fees.”[8]

In addition, respondent assails, in her Comment,[9] the propriety of Rule 45 as the procedural mode for seeking a review of the CA Decision affirming the NLRC Resolution.  Such issue deserves scant consideration.  Respondent miscomprehends the Court’s discourse in St. Martin Funeral Home v. NLRC,[10] which has indeed affirmed that the proper mode of review of NLRC decisions, resolutions or orders is by a special civil action for certiorari under Rule 65 of the Rules of Court.  The Supreme Court and the Court of Appeals have concurrent original jurisdiction over such petitions for certiorari.  Thus, in observance of the doctrine on the hierarchy of courts, these petitions should be initially filed with the CA.[11]

Rightly, the bank elevated the NLRC Resolution to the CA by way of a Petition for Certiorari.  In seeking a review by this Court of the CA Decision -- on questions of jurisdiction, venue and validity of employment termination -- petitioner is likewise correct in invoking Rule 45.[12]

It is true, however, that in a petition for review on certiorari, the scope of the Supreme Court’s judicial review of decisions of the Court of Appeals is generally confined only to errors of law.  It does not extend to questions of fact.  This doctrine applies with greater force in labor cases.  Factual questions are for the labor tribunals to resolve. [13] In the present case, the labor arbiter and the NLRC have already determined the factual issues.  Their findings, which are supported by substantial evidence, were affirmed by the CA.  Thus, they are entitled to great respect and are rendered conclusive upon this Court, absent a clear showing of palpable error or arbitrary disregard of evidence.[14]

The Court’s Ruling

The Petition has no merit.

First Issue:Jurisdiction

The jurisdiction of labor arbiters and the NLRC is specified in Article 217 of the Labor Code as follows:

“ART. 217.  Jurisdiction of Labor Arbiters and the Commission. – (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the

parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:

1.   Unfair labor practice cases;

2.   Termination disputes;

3.   If accompanied with a claim for reinstatement, those cases that workers may file involving wage, rates of pay, hours of work and other terms and conditions of employment

4.   Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;

5.   Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and

6.   Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount of exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.

(b)       The commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

x x x                                         x x x                                  x x x.”

More specifically, Section 10 of RA 8042 reads in part:

“SECTION 10.  Money Claims. — Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages.

x x x                                         x x x                                  x x x”

Based on the foregoing provisions, labor arbiters clearly have original and exclusive jurisdiction over claims arising from employer-employee relations, including termination disputes involving all workers, among whom are overseas Filipino workers (OFW).[15]

We are not unmindful of the fact that respondent was directly hired, while on a

tourist status in Singapore, by the PNB branch in that city state.  Prior to employing respondent, petitioner had to obtain an employment pass for her from the Singapore Ministry of Manpower.  Securing the pass was a regulatory requirement pursuant to the immigration regulations of that country.[16]

Similarly, the Philippine government requires non-Filipinos working in the country to first obtain a local work permit in order to be legally employed here.  That permit, however, does not automatically mean that the non-citizen is thereby bound by local laws only, as averred by petitioner.  It does not at all imply a waiver of one’s national laws on labor.  Absent any clear and convincing evidence to the contrary, such permit simply means that its holder has a legal status as a worker in the issuing country.

Noteworthy is the fact that respondent likewise applied for and secured an Overseas Employment Certificate from the POEA through the Philippine Embassy in Singapore.  The Certificate, issued on March 8, 1999, declared her a bona fide contract worker for Singapore.  Under Philippine law, this document authorized her working status in a foreign country and entitled her to all benefits and processes under our statutes.  Thus, even assuming arguendo that she was considered at the start of her employment as a “direct hire” governed by and subject to the laws, common practices and customs prevailing in Singapore[17] she subsequently became a contract worker or an OFW who was covered by Philippine labor laws and policies upon certification by the POEA.  At the time her employment was illegally terminated, she already possessed the POEA employment Certificate.

Moreover, petitioner admits that it is a Philippine corporation doing business through a branch office in Singapore.[18] Significantly, respondent’s employment by the Singapore branch office had to be approved by Benjamin P. Palma Gil,[19] the president of the bank whose principal offices were in Manila.  This circumstance militates against petitioner’s contention that respondent was “locally hired”; and totally “governed by and subject to the laws, common practices and customs” of Singapore, not of the Philippines.  Instead, with more reason does this fact reinforce the presumption that respondent falls under the legal definition of migrant worker, in this case one deployed in Singapore.  Hence, petitioner cannot escape the application of Philippine laws or the jurisdiction of the NLRC and the labor arbiter.

In any event, we recall the following policy pronouncement of the Court in Royal Crown Internationale v. NLRC:[20]

“x x x. Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the basic public policy of the State to afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. For the State assures the basic rights of all workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work [Article 3 of the Labor Code of the Philippines; See also Section 18, Article II and Section 3, Article XIII, 1987 Constitution]. This ruling is likewise rendered imperative by Article 17 of the Civil Code which states that laws ‘which have for their object public order, public

policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determination or conventions agreed upon in a foreign country.’”

Second Issue:Proper Venue

Section 1(a) of Rule IV of the NLRC Rules of Procedure reads:

“Section 1. Venue – (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complainant/petitioner; Provided, however that cases of Overseas Filipino Worker (OFW) shall be filed before the Regional Arbitration Branch where the complainant resides or where the principal office of the respondent/employer is situated, at the option of the complainant.

“For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose.  It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel.  In the case of field employees, as well as ambulant or itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly receive their salaries/wages or work instructions from, and report the results of their assignment to their employers.”

Under the “Migrant Workers and Overseas Filipinos Act of 1995” (RA 8042), a migrant worker “refers to a person who is to be engaged, is engaged or has been engaged in a remunerated activity in a state of which he or she is not a legal resident; to be used interchangeably with overseas Filipino worker.”[21] Undeniably, respondent was employed by petitioner in its branch office in Singapore.  Admittedly, she is a Filipino and not a legal resident of that state.  She thus falls within the category of “migrant worker” or “overseas Filipino worker.”

As such, it is her option to choose the venue of her Complaint against petitioner for illegal dismissal.  The law gives her two choices: (1) at the Regional Arbitration Branch (RAB) where she resides or (2) at the RAB where the principal office of her employer is situated.  Since her dismissal by petitioner, respondent has returned to the Philippines -- specifically to her residence at Filinvest II, Quezon City.  Thus, in filing her Complaint before the RAB office in Quezon City, she has made a valid choice of proper venue.

Third Issue:Illegal Dismissal

The appellate court was correct in holding that respondent was already a regular employee at the time of her dismissal, because her three-month probationary period of employment had already ended.  This ruling is in accordance with Article 281 of the Labor Code: “An employee who is allowed to work after a probationary period shall be

considered a regular employee.” Indeed, petitioner recognized respondent as such at the time it dismissed her, by giving her one month’s salary in lieu of a one-month notice, consistent with provision No. 6 of her employment Contract.

Notice and HearingNot Complied With

As a regular employee, respondent was entitled to all rights, benefits and privileges provided under our labor laws.  One of her fundamental rights is that she may not be dismissed without due process of law.  The twin requirements of notice and hearing constitute the essential elements of procedural due process, and neither of these elements can be eliminated without running afoul of the constitutional guarantee.[22]

In dismissing employees, the employer must furnish them two written notices:  1) one to apprise them of the particular acts or omissions for which their dismissal is sought; and 2) the other to inform them of the decision to dismiss them.  As to the requirement of a hearing, its essence lies simply in the opportunity to be heard.[23]

The evidence in this case is crystal-clear.  Respondent was not notified of the specific act or omission for which her dismissal was being sought.  Neither was she given any chance to be heard, as required by law.  At any rate, even if she were given the opportunity to be heard, she could not have defended herself effectively, for she knew no cause to answer to.

All that petitioner tendered to respondent was a notice of her employment termination effective the very same day, together with the equivalent of a one-month pay.  This Court has already held that nothing in the law gives an employer the option to substitute the required prior notice and opportunity to be heard with the mere payment of 30 days’ salary.[24]

Well-settled is the rule that the employer shall be sanctioned for noncompliance with the requirements of, or for failure to observe, due process that must be observed in dismissing an employee.[25]

No Valid Causefor Dismissal

Moreover, Articles 282,[26] 283[27] and 284[28] of the Labor Code provide the valid grounds or causes for an employee’s dismissal.  The employer has the burden of proving that it was done for any of those just or authorized causes.  The failure to discharge this burden means that the dismissal was not justified, and that the employee is entitled to reinstatement and back wages.[29]

Notably, petitioner has not asserted any of the grounds provided by law as a valid reason for terminating the employment of respondent.  It merely insists that her dismissal was validly effected pursuant to the provisions of her employment Contract, which she

had voluntarily agreed to be bound to.

Truly, the contracting parties may establish such stipulations, clauses, terms and conditions as they want, and their agreement would have the force of law between them.  However, petitioner overlooks the qualification that those terms and conditions agreed upon must not be contrary to law, morals, customs, public policy or public order.[30] As explained earlier, the employment Contract between petitioner and respondent is governed by Philippine labor laws.  Hence, the stipulations, clauses, and terms and conditions of the Contract must not contravene our labor law provisions.

Moreover, a contract of employment is imbued with public interest.  The Court has time and time again reminded parties that they “are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other.”[31] Also, while a contract is the law between the parties, the provisions of positive law that regulate such contracts are deemed included and shall limit and govern the relations between the parties.[32]

Basic in our jurisprudence is the principle that when there is no showing of any clear, valid, and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal.[33]

Awards for DamagesJustified

Finally, moral damages are recoverable when the dismissal of an employee is attended by bad faith or constitutes an act oppressive to labor or is done in a manner contrary to morals, good customs or public policy.[34] Awards for moral and exemplary damages would be proper if the employee was harassed and arbitrarily dismissed by the employer.[35]

In affirming the awards of moral and exemplary damages, we quote with approval the following ratiocination of the labor arbiter:

“The records also show that [respondent’s] dismissal was effected by [petitioners’] capricious and high-handed manner, anti-social and oppressive, fraudulent and in bad faith, and contrary to morals, good customs and public policy.  Bad faith and fraud are shown in the acts committed by [petitioners] before, during and after [respondent’s] dismissal in addition to the manner by which she was dismissed.  First, [respondent] was pressured to resign for two different and contradictory reasons, namely, cost-cutting and the need for a Chinese[-]speaking credit officer, for which no written advice was given despite complainant’s request.  Such wavering stance or vacillating position indicates bad faith and a dishonest purpose.  Second, she was employed on account of her qualifications, experience and readiness for the position of credit officer and pressured to resign a month after she was commended for her good work.  Third, the demand for [respondent’s] instant resignation on 19 April 1999 to give way to her replacement who was allegedly reporting soonest, is whimsical, fraudulent and in bad faith, because on 16 April 1999 she was given a period of [sic] until 15 May 1999 within which to leave. 

Fourth, the pressures made on her to resign were highly oppressive, anti-social and caused her absolute torture, as [petitioners] disregarded her situation as an overseas worker away from home and family, with no prospect for another job.  She was not even provided with a return trip fare.  Fifth, the notice of termination is an utter manifestation of bad faith and whim as it totally disregards [respondent’s] right to security of tenure and due process.  Such notice together with the demands for [respondent’s] resignation contravenes the fundamental guarantee and public policy of the Philippine government on security of tenure.

“[Respondent] likewise established that as a proximate result of her dismissal and prior demands for resignation, she suffered and continues to suffer mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock and social humiliation.  Her standing in the social and business community as well as prospects for employment with other entities have been adversely affected by her dismissal.  [Petitioners] are thus liable for moral damages under Article 2217 of the Civil Code.

x x x                                         x x x                                  x x x

“[Petitioners] likewise acted in a wanton, oppressive or malevolent manner in terminating [respondent’s] employment and are therefore liable for exemplary damages.  This should served [sic] as protection to other employees of [petitioner] company, and by way of example or correction for the public good so that persons similarly minded as [petitioners] would be deterred from committing the same acts.”[36]

The Court also affirms the award of attorney’s fees.  It is settled that when an action is instituted for the recovery of wages, or when employees are forced to litigate and consequently incur expenses to protect their rights and interests, the grant of attorney’s fees is legally justifiable.[37]

CAPAROSO VS CA

Facts

Composite Enterprises Incorporated (Composite) is engaged in the distribution and supply of confectioneries to various retail establishments within the Philippines. Emilio M. Caparoso (Caparoso) and Joeve P. Quindipan (Quindipan) were Composite’s deliverymen. Caparoso alleged that he was hired on 8 November 1998 while Quindipan alleged that he was hired on intermittent basis since 1997. Quindipan further alleged that he had been working continuously with Composite since August 1998.

On 8 October 1999, Caparoso and Quindipan (petitioners) were dismissed from the service.1awwphi1.net They filed a consolidated position paper before the Labor Arbiter charging Composite and its Personnel Manager Edith Tan (Tan) with illegal dismissal.

Composite and Tan (respondents) alleged that petitioners were both hired on 11 May

1999 as deliverymen, initially for three months and then on a month-to-month basis. Respondents alleged that petitioners’ termination from employment resulted from the expiration of their contracts of employment on 8 October 1999.

The Labor Arbiter ruled that by the very nature of respondents’ business and the nature of petitioners’ services, there is no doubt as to the employment status of petitioners.

Issues

1. Whether or not petitioners are regular employees of respondents?

2. Whether or not respondents are guilty of illegal dismissal?

Held:

The petition has no merit.

First Issue:

Petitioners are Not Regular Employees

Under Article 280 of the Labor Code, a regular employee is (1) one who is engaged to perform activities that are necessary or desirable in the usual trade or business of the employer, or (2) a casual employee who has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed.7

However, even if an employee is engaged to perform activities that are necessary or desirable in the usual trade or business of the employer, it does not preclude the fixing of employment for a definite period.

Accordingly, and since the entire purpose behind the development of legislation culminating in the present Article 280 of the Labor Code clearly appears to have been, as already observed, to prevent circumvention of the employee’s right to be secure in his tenure, the clause in said article indiscriminately and completely ruling out all written or oral agreements conflicting with the concept of regular employment as defined therein should be construed to refer to the substantive evil that the Code itself has singled out: agreements entered into precisely to circumvent security of tenure. It should have no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. Unless thus limited in its purview, the law would be made to apply to purposes other than those explicitly stated by its framers; it thus become

pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended consequences.9

The Court thus laid down the criteria under which fixed-term employment could not be said to be in circumvention of the law on security of tenure, thus:

1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or

2. It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter.10

We agree with the Court of Appeals that in this case, the fixed period of employment was knowingly and voluntarily agreed upon by the parties. The Court of Appeals noted that there was no indication of force, duress, or improper pressure exerted on petitioners when they signed the contracts. Further, there was no proof that respondents were regularly engaged in hiring workers for work for a minimum period of five months to prevent the regularization of their employees. Petitioners’ Employment is akin to Probationary Employment

At most, petitioners’ employment for less than six months can be considered probationary.

Petitioners were hired on 11 May 1999, initially for three months. After the expiration of their contracts, petitioners were hired on a month-to-month basis. Their contracts of employment ended on 8 October 1999. Hence, they were employed for a total of five months. Their employment did not even exceed six months to entitle them to become regular employees.

We cannot accept petitioners’ bare allegations that Caparoso was hired on 8 November 1998 while Quindipan was hired on intermittent basis since 1997. Petitioners failed to substantiate their allegations. The payslips submitted by petitioners to prove their prior employment with respondents are handwritten and indicate only the date and amount of pay. They do not even indicate the name of the employer. The printed payslips during the period of the contracts indicate not only the name of the employer but also the breakdown of petitioners’ net pay.

Second Issue:

Petitioners were not Illegally Dismissed from Employment

Petitioners’ terms of employment are governed by their fixed-term contracts. Petitioners’ fixed-term employment contracts had expired. They were not illegally dismissed from employment.

This Court has ruled that "if from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee, they should be disregarded for being contrary to public policy."11 In this case, it was not established that respondents intended to deny petitioners their right to security of tenure. Besides, petitioners’ employment did not exceed six months. Thus, the Court of Appeals did not err in sustaining petitioners’ dismissal from employment.

ROBINSONS GALLERIA Vs. Ranchez    The Facts            Respondent was a probationary employee of petitioner Robinsons Galleria/Robinsons Supermarket Corporation for a period of five (5) months, or from October 15, 1997 until March 14, 1998.[3] She underwent six (6) weeks of training as a cashier before she was hired as such on October 15, 1997.           Two weeks after she was hired, or on October 30, 1997, respondent reported to her supervisor the loss of cash amounting to Twenty Thousand Two Hundred Ninety-Nine Pesos (P20,299.00) which she had placed inside the company locker. Petitioner Jess Manuel (petitioner Manuel), the Operations Manager of petitioner Supermarket, ordered that respondent be strip-searched by the company guards. However, the search on her and her personal belongings yielded nothing           Respondent acknowledged her responsibility and requested that she be allowed to settle and pay the lost amount. However, petitioner Manuel did not heed her request and instead reported the matter to the police. Petitioner Manuel likewise requested the Quezon City Prosecutor’s Office for an inquest.           On November 5, 1997, an information for Qualified Theft was filed with the Quezon City Regional Trial Court. Respondent was constrained to spend two weeks in jail for failure to immediately post bail in the amount of Forty Thousand Pesos (P40,000.00)           On November 25, 1997, respondent filed a complaint for illegal dismissal and

damages.           On March 12, 1998, petitioners sent to respondent by mail a notice of termination and/or notice of expiration of probationary employment dated March 9, 1998. Issue          Whether or not respondent was illegally terminated from employment by petitioners?

 Held:                    We rule in the affirmative.           There is probationary employment when the employee upon his engagement is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement.           A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement.  Thus, the services of an employee who has been engaged on probationary basis may be terminated for any of the following:  (1) a just or (2) an authorized cause; and  (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.           Article 277(b) of the Labor Code mandates that subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal, except for just and authorized cause and without prejudice to the requirement of notice under Article 283 of the same Code, the employer shall furnish the worker, whose employment is sought to be terminated, a written notice containing a statement  of the causes of termination, and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of a representative if he so desires, in accordance with company rules and regulations pursuant to the guidelines set by the Department of Labor and Employment.            Respondent was constructively dismissed by petitioner Supermarket effective October 30, 1997. It was unreasonable for petitioners to charge her with abandonment for not reporting for work upon her release in jail. It would be the height of callousness to expect her to return to work after suffering in jail for two weeks. Work had been rendered unreasonable, unlikely, and definitely impossible, considering the treatment that was accorded respondent by petitioners.

           As to respondent’s monetary claims, Article 279 of the Labor Code provides that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. However, due to the strained relations of the parties, the payment of separation pay has been considered an acceptable alternative to reinstatement, when the latter option is no longer desirable or viable.  On the one hand, such payment liberates the employee from what could be a highly oppressive work environment.  On the other, the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust.            Thus, as an illegally or constructively dismissed employee, respondent is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively. 

 In this case, since respondent was a probationary employee at the time she was constructively dismissed by petitioners, she is entitled to separation pay and backwages. Reinstatement of respondent is no longer viable considering the circumstances.           However, the backwages that should be awarded to respondent shall be reckoned from the time of her constructive dismissal until the date of the termination of her employment, i.e., from October 30, 1997 to March 14, 1998.  The computation should not cover the entire period from the time her compensation was withheld up to the time of her actual reinstatement. This is because respondent was a probationary employee, and the lapse of her probationary employment without her appointment as a regular employee of petitioner Supermarket effectively severed the employer-employee relationship between the parties. 

          In all cases involving employees engaged on probationary basis, the employer shall make known to its employees the standards under which they will qualify as regular employees at the time of their engagement. Where no standards are made known to an employee at the time, he shall be deemed a regular employee, unless the job is self-descriptive, like maid, cook, driver, or messenger.  However, the constitutional policy of providing full protection to labor is not intended to oppress or destroy management. Naturally, petitioner Supermarket cannot be expected to retain respondent as a regular employee considering that she lost P20,299.00  while acting as a cashier during the probationary period. The rules on probationary employment should not be used to exculpate a probationary employee who acts in a manner contrary to basic knowledge and common sense, in regard to which, there is no need to spell out a policy or standard to be met.

ROWELL INDUSTRIAL CORPORATION, Petitioner, vs.HON. COURT OF APPEALS

and JOEL TARIPE, Respondents.

Facts

On 17 February 2000 , respondent Taripe filed a complaint against [herein petitioner RIC] for regularization and payment of holiday pay, as well as indemnity for severed finger, which was amended on [7 April 2000] to include illegal dismissal. [Respondent Taripe] alleges that [petitioner RIC] employed him starting [8 November 1999] as power press machine operator, such position of which was occupied by [petitioner RIC's] regular employees and the functions of which were necessary to the latter's business. [Respondent Taripe] adds that upon employment, he was made to sign a document, which was not explained to him but which was made a condition for him to be taken in and for which he was not furnished a copy. [Respondent Taripe] states that he was not extended full benefits granted under the law and the [Collective Bargaining Agreement] and that on [6 April 2000], while the case for regularization was pending, he was summarily dismissed from his job although he never violated any of the [petitioner RIC's] company rules and regulations.

[Petitioner RIC], for [its] part, claim[s] that [respondent Taripe] was a contractual employee, whose services were required due to the increase in the demand in packaging requirement of [its] clients for Christmas season and to build up stock levels during the early part of the following year; that on [6 March 2000], [respondent Taripe's] employment contract expired. [Petitioner RIC] avers that the information update for union members, which was allegedly filled up by [respondent Taripe] and submitted by the Union to [petitioner] company, it is stated therein that in the six (6) companies where [respondent Taripe] purportedly worked, the latter's reason for leaving was "finished contract," hence, [respondent Taripe] has knowledge about being employed by contract contrary to his allegation that the document he was signing was not explained to him. [Petitioner RIC] manifest[s] that all benefits, including those under the [Social Security System], were given to him on [12 May 2000].5

Issue:

Whether or not the Court of Appeals misinterpreted Article 280 of the Labor Code, as amended, and ignored jurisprudence when it affirmed that respondent was a regular employee and was illegally dismissed?

Held:

The Petition is unmeritorious.

In the case at bar, respondent Taripe signed a contract of employment prior to his admission into the petitioner's company. Said contract of employment provides, among other things:

4. That my employment shall be contractual for the period of five (5) months which

means that the end of the said period, I can (sic) discharged unless this contract is renewed by mutual consent or terminated for cause.18

Based on the said contract, respondent Taripe's employment with the petitioner is good only for a period of five months unless the said contract is renewed by mutual consent. And as claimed by petitioner RIC, respondent Taripe, along with its other contractual employees, was hired only to meet the increase in demand for packaging materials during the Christmas season and also to build up stock levels during the early part of the year.

In the present case, it cannot be denied that the employment contract signed by respondent Taripe did not mention that he was hired only for a specific undertaking, the completion of which had been determined at the time of his engagement. The said employment contract neither mentioned that respondent Taripe's services were seasonal in nature and that his employment was only for the duration of the Christmas season as purposely claimed by petitioner RIC. What was stipulated in the said contract was that respondent Taripe's employment was contractual for the period of five months.

With regard to the second guideline, this Court agrees with the Court of Appeals that petitioner RIC and respondent Taripe cannot be said to have dealt with each other on more or less equal terms with no moral dominance exercised by the former over the latter. As a power press operator, a rank and file employee, he can hardly be on equal terms with petitioner RIC. As the Court of Appeals said, "almost always, employees agree to any terms of an employment contract just to get employed considering that it is difficult to find work given their ordinary qualifications."22

Therefore, for failure of petitioner RIC to comply with the necessary guidelines for a valid fixed term employment contract, it can be safely stated that the aforesaid contract signed by respondent Taripe for a period of five months was a mere subterfuge to deny to the latter a regular status of employment.

Settled is the rule that the primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the casual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety.23

Given the foregoing, this Court agrees in the findings of the Court of Appeals and the NLRC that, indeed, respondent Taripe, as a rectangular power press machine operator, in charge of manufacturing covers for "four liters rectangular tin cans," was holding a position which is necessary and desirable in the usual business or trade of petitioner RIC, which was the manufacture of tin cans. Therefore, respondent Taripe was a regular employee of petitioner RIC by the nature of work he performed in the company.

Respondent Taripe does not fall under the exceptions mentioned in Article 280 of the Labor Code, as amended, because it was not proven by petitioner RIC that he was employed only for a specific project or undertaking or his employment was merely

seasonal. Similarly, the position and function of power press operator cannot be said to be merely seasonal. Such position cannot be considered as only needed for a specific project or undertaking because of the very nature of the business of petitioner RIC. Indeed, respondent Taripe is a regular employee of petitioner RIC and as such, he cannot be dismissed from his employment unless there is just or authorized cause for his dismissal.

Well-established is the rule that regular employees enjoy security of tenure and they can only be dismissed for just cause and with due process, notice and hearing.24And in case of employees' dismissal, the burden is on the employer to prove that the dismissal was legal. Thus, respondent Taripe's summary dismissal, not being based on any of the just or authorized causes enumerated under Articles 282,25283,26and 28427of the Labor Code, as amended, is illegal.