Saturday, February 4, 2017

JEFFREY NACAGUE vs. SULPICIO LINES (2010)

JEFFREY NACAGUE vs. SULPICIO LINES, INC.(2010)

Petitioner: Jeffrey Nacague
Respondent: Sulpicio Lines

FACTS:

Respondent Sulpicio Lines, Inc. hired Nacague as "hepe de viaje" or the representative of Sulpicio Lines on board its vessel M/V Princess of the World.

Sulpicio Lines received an anonymous letter reporting the use of illegal drugs on board the ship.

Ceasar T. Chico, a housekeeper on the ship, submitted a report regarding the drug paraphernalia found inside the Mopalla Suite Room and the threat on his life made by Nacague and Chief Mate Reynaldo Doroon after he found the drug paraphernalia.

Sulpicio Lines sent a notice of investigation to Nacague informing him of the charges against him for use of illegal drugs and threatening a co-employee.

When the ship docked in the port of Manila on, some crew members of the ship, together with Nacague, were subjected to a random drug test. They were taken to S.M. Lazo Medical Clinic and were required to submit urine samples. Nacague was found positive for methamphetamine hydrochloride or shabu.

Sulpicio Lines subjected Nacague to a formal investigation. Nacague denied using illegal drugs.

5 days after the random drug testing, Nacague went to Chong Hua Hospital in Cebu City to undergo a voluntary drug test. The drug test with Chong Hua Hospital yielded a negative result. Nacague submitted this test result to Sulpicio Lines. However, Sulpicio Lines still terminated him from the service for the reason of finding him culpable of grave misconduct and loss of trust and confidence due to his positive drug result.

Feeling aggrieved, Nacague filed a complaint for illegal suspension, illegal dismissal and for reinstatement with backwages.

LA rendered a decision in favor of Nacague and declared that Sulpicio Lines illegally dismissed Nacague.
REASON OF LA: The drug test result from S.M. Lazo Clinic was questionable because the clinic is not accredited by the Dangerous Drug Board and not under its supervision.

NLRC reversed the Labor Arbiter’s decision.
REASON OF NLRC: Nacague, who was performing a task involving trust and confidence, was found positive for using illegal drugs, he was guilty of serious misconduct and loss of trust and confidence.

MR denied.

CA affirmed NLRC’s decision.
REASON OF CA: Sulpicio Lines complied with both the procedural and substantive requirements of the law when it terminated the employment of Nacague.

ISSUE:

Whether or not the termination was valid.

RULING:

NO. Sulpicio Lines failed to clearly show that Nacague was guilty of using illegal drugs. The lack of accreditation of S.M. Lazo Clinic made its drug test results doubtful.

Section 36 of R.A. No. 9165 provides that drug tests shall be performed only by authorized drug testing centers. Moreover, Section 36 also prescribes that drug testing shall consist of both the screening test and the confirmatory test.

The law is clear that drug tests shall be performed only by authorized drug testing centers.In this case, Sulpicio Lines failed to prove that S.M. Lazo Clinic is an accredited drug testing center. Sulpicio Lines did not even deny Nacague’s allegation that S.M. Lazo Clinic was not accredited. Also, only a screening test was conducted to determine if Nacague was guilty of using illegal drugs. Sulpicio Lines did not confirm the positive result of the screening test with a confirmatory test. Sulpicio Lines failed to indubitably prove that Nacague was guilty of using illegal drugs amounting to serious misconduct and loss of trust and confidence. Sulpicio Lines failed to clearly show that it had a valid and legal cause for terminating Nacague’s employment. When the alleged valid cause for the termination of employment is not clearly proven, as in this case, the law considers the matter a case of illegal dismissal.

PETITION is GRANTED.

FULL TEXT HERE!!!

CHINA CITY RESTAURANT CORPORATION vs.NLRC (1993)

CHINA CITY RESTAURANT CORPORATION vs. NATIONAL LABOR RELATIONS COMMISSION, MONICO DIETO and JUNILITO CABLAY (1993)


Petitioner: China City Restaurant
Respondents: Monico Dieto and Junilito Cablay
Topic: Procedural Process

FACTS:
Petitioner China City Restaurant employed private respondents Monico Dieto and Julinito Cablay, private respondents as chief steamer and roasting helper, respectively.

Sometime in 1988, the China City Employees Union, with Monico Dieto as President, was organized and thereafter demanded recognition from petitioner.

Abe Fuentes, a steamer helper at petitioner's restaurant, was detained at the Makati Municipal Jail for allegedly stealing dried scallops worth two thousand pesos (P2,000.00) belonging to the petitioner.

Abe Fuentes alleged that as early as April 1988, he, in conspiracy with private respondents, had been bringing out from the restaurant dried scallops wrapped in plastic, by mixing them with leftovers thrown into the thrash can. They were sold at Ongpin, Binondo, Manila. They would then divide the proceeds among themselves, with the private respondents getting the lion's share. A criminal charge for qualified theft was thereafter filed against the private respondents.

On March 27, 1989, an amended information was filed to include private respondents as co-accused in the qualified theft case filed against Abe Fuentes. Later, Abe Fuentes turned state witness.

On March 22, 1989, petitioner, through a memorandum, terminated the services of the private respondents on the ground of loss of trust and confidence.

Thereafter a complaint for illegal dismissal was filed by the private respondents against the petitioner with the Department of Labor and Employment.

Private respondents professed ignorance of the crime exposed by Abe Fuentes. They claimed that when they visited Abe Fuentes at his detention cell, the latter allegedly told them that Jose Polotan, the restaurant administrator, was forcing him to name the private respondents as his co-conspirators but that he allegedly refused. Later, however, private respondents were surprised to learn that Abe Fuentes was released on bail at the instance of the petitioner. They vigorously claimed that they were implicated in the theft incident because of their being union members.

LA ruled in favor of respondents by declaring the dismissal of the complainants as illegal.
NLRC affirmed the decision of the Labor Arbiter.
MR- also denied.

ISSUE:

Whether or not the preliminary ruling of the fiscal can be considered as substantial compliance with the procedural process of law.

RULING:

NO. Private respondents were not afforded the formal investigation required and that the fiscal's investigation could not legally take its place because the fiscal's finding of prima facie case of qualified theft against private respondents was based solely on the affidavit executed by the original accused-turned state witness, Abe Fuentes, to the effect that he conspired with the private respondents in the theft of dried scallops. The only connection of the private respondents to the charge is the implication made by Abe Fuentes. Private respondents having been acquitted of the charge of qualified theft by the RTC doubted the veracity of Abe Fuentes' testimony against them. It is therefore necessary to scrutinize this implication.

Aside from Abe Fuentes' affidavit and the criminal complaint/information, there is no other evidence shown by petitioner positively linking private respondents to the alleged theft committed.

Furthermore, even the Labor Arbiter found that "A close scrutiny of the facts and evidences attached to the record will reveal that the implication of the complainants by Abe Fuentes in the commission of the crime of qualified theft is not enough basis for the respondent to terminate them. . . . Since they failed to establish sufficient basis for concluding that the complainants were really in connivance with Abe Fuentes in the commission of the qualified theft, the dismissal becomes illegal".

Under the Labor Code, as amended, the requirements for the lawful dismissal of an employee by his employer are two-fold: the substantive and the procedural. Not only must the dismissal be for a valid or authorized cause as provided by law [Arts. 279, 281, 282-284], but the rudimentary requirements of due process — notice and hearing — must also be observed before an employee may be dismissed [Art. 277(b)]. One cannot go without the other, for otherwise the termination would, in the eyes of the law, be illegal.

In this case, there is no sufficient basis to support the belief that a just and lawful cause exists. The just and lawful cause constitutes the substantive aspect of due process. Lack of just causes render the dismissal illegal.

PETITION is DISMISSED.

Sunday, August 14, 2016

Labor Law Review: Lilia Labadan vs. Forest Hills Academy (2008)

CASE DIGEST

Lilia Labadan vs. Forest Hills Academy (2008)

FACTS;

Petitioner Labadan was hired by private respondent Forest Hills Academy as an elementary teacher on July 1989. Petitioner also became the Registrar and Secondary school teacher from year 1990 up to 2002.

Petitioner Labadan alleged that Forest Hills allowed her leave and despite she exceeded her leave period, she assumed that the extension was approved by the school principal for she haven't received no warning or reprimand and was in fact retained in the payroll up to school year 2002.

Petitioner further alleged that since 1990. A 10% tithes to the SDA church have been illegally deducted from her salary and other fees were also not paid by respondent.

Respondent Forest Hills, in its position paper claimed that on July 2001, petitioner was permitted to go on leave for 2 weeks but she did not return to work after expiration of her leave period. Petitioner also did not report for work for one school year. Because of that, they hired a temporary employee to accomplish the needed reports. Petitioner returned for work only on the next school year 2002- 2003.

Forest Hills asserted that petitioner did not questioned the deduction of 10% tithe from her salary.

Petitioner filed a case for illegal dismissal against Forest Hills.

The Labor Arbiter (LA) ruled in favor of petitioner Labadan.

NLRC reversed the findings of the LA and ruled in favor of Forest Hills.

Petitioner aggrieved, filed a petition for certiorari to the CA. It dismissed the petitioner's petition for deficient amount of appellate docket fee of 30 pesos and all other court procedural technicalities.

Petitioner's MR was also denied.

ISSUE:

1. WON petitioner was illegally dismissed?
2. WON the 10% salary deduction for tithing is legal?

RULING:

1. No. Petitioner was not dismissed from her work. When she returned from work, classes already started for the school year 2002-2003. Also, having simultaneously holding the position of registrar, she could have resumed her work as registrar instead.

The burden of proving illegal dismissal is on the part of the employer that the employee was indeed terminated for a valid or authorized cause. Substantial evidence shall be established by the employer.


2. No. Deductions made by Forest Hills of 10% tithe from her salary is illegal due to absence of conformity on her part.

ART. 113. No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except: 

(a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance; 

(b) For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned; and 

(c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor, 
as does Rule VIII, Section 10 of the Rules Implementing Book III of the Labor Code reading:


SEC. 10. Deductions from the wages of the employees may be made by the employer in any of the following cases: 

(a) When the deductions are authorized by law, including deductions for the insurance premiums advanced by the employer in behalf of the employee as well as union dues where the right to check-off has been recognized by the employer or authorized in writing by the individual employee himself; 

(b) When the deductions are with the written authorization of the employees for payment to a third person and the employer agrees to do so, provided that the latter does not receive any pecuniary benefit, directly or indirectly, from the transaction. (Emphasis and underscoring supplied)


Petition partially granted.


FULL TEXT



Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 172295 December 23, 2008

LILIA P. LABADAN, petitioner, 
vs.
FOREST HILLS ACADEMY/NAOMI CABALUNA and PRESIDING COMISSIONER SALIC B. DUMARPA, COMMISSIONER PROCULO T. SARMEN, COMMISSIONER NOVITO C. CAGAYAN, respondents.

D E C I S I O N

CARPIO MORALES, J.:

Lilian L. Labadan (petitioner) was hired by private respondent Forest Hills Mission Academy (Forest Hills) in July 1989 as an elementary school teacher. From 1990 up to 2002, petitioner was registrar and secondary school teacher.

On August 18, 2003, petitioner filed a complaint1 against respondent Forest Hills and its administrator respondent Naomi Cabaluna for illegal dismissal, non-payment of overtime pay, holiday pay, allowances, 13th month pay, service incentive leave, illegal deductions, and damages.

In her Position Paper,2 petitioner alleged that she was allowed to go on leave from Forest Hills, and albeit she had exceeded her approved leave period, its extension was impliedly approved by the school principal because she received no warning or reprimand and was in fact retained in the payroll up to 2002.3

Petitioner further alleged that since 1990, tithes to the Seventh Day Adventist church have been illegally deducted from her salary; and she was not paid overtime pay for overtime service, 13th month pay, five days service incentive leave pay, and holiday pay; and that her SSS contributions have not been remitted.

Claiming that strained relations between her and Forest Hill have rendered reinstatement not feasible, petitioner prayed for separation pay in lieu of reinstatement.

In its Position Paper,4 Forest Hills claimed as follows: In July 2001, petitioner was permitted to go on leave for two weeks but did not return for work after the expiration of the period. Despite petitioner’s undertaking to report "soon," she never did even until the end of School Year 2001-2002. It thus hired a temporary employee to accomplish the needed reports. When she finally returned for work, classes for the School Year 2002-2003 were already on-going.

To belie petitioner’s claim that she was dismissed, Forest Hills submitted a list of faculty members and staff from School Year 1998-1999 up to School Year 2001 to 2002 which included her name.5

With regard to the charge for illegal deduction, Forest Hills claimed that the Seventh Day Adventist Church requires its members to pay tithes equivalent to 10% of their salaries, and petitioner was hired on account of her being a member thereof, and petitioner never questioned the deduction of the tithe from her salary.

With regard to the charge for non-payment of overtime pay, holiday pay, and allowances, Forest Hills noted that petitioner proffered no evidence to support the same.

The Labor Arbiter decided in favor of petitioner, disposing as follows:

WHEREFORE, judgment is hereby rendered:

1. Finding respondents Forest Hills Academy and/or Naomi Cabaluna guilty of illegally dismissing the complainant;

2. Directing respondent to pay complainant Lilia P. Labadan the total amount of P152,501.02 representing her monetary award x x x.

Complainant’s other claim[s] are hereby dismissed for lack of merit and/or failure to substantiate.

SO ORDERED.6

The National Labor Relations Commission (NLRC), finding the Labor Arbiter to have misappreciated the facts of the case, reversed and set aside his decision and dismissed petitioner’s complaint by Resolution of June 30, 2005.7

On petitioner’s Petition for Certiorari,8 the Court of Appeals, by Resolution9 of December 15, 2005, dismissed the petition for deficient amount of appellate docket fee, non-attachment of Affidavit of Service, absence of written explanation why the petition was filed through registered mail instead of through personal service, and non-attachment of copies of the Complaint and the Answer filed before the Labor Arbiter. Petitioner’s Motion for Reconsideration having been denied,10 she filed the present Petition for Review on Certiorari,11 faulting the Court of Appeals

x x x IN DISMISSING THE PETITION ON THE GROUND OF TECHNICALITIES[;]

x x x IN NOT DECIDING ON THE MERITS WHETHER OR NOT HONORABLE COMMISSIONERS OF THE 5TH DIVISION HAVE COMMITTED AN ACT OF GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION:

A. IN REVERSING THE FINDINGS OF THE EXECUTIVE LABOR ARBITER THAT HEREIN PETITIONER-COMPLAINANT WAS NOT DISMISSED FROM HER WORK AS A TEACHER and AT THE SAME TIME THE REGISTRAR;

B. IN FINDING THAT BY A PROLONGED ABSENCE OF ONE YEAR MORE OR LESS, PETITIONER WAIVED HER 13TH MONTH PAY AND SERVICE INCENTIVE LEAVES AS SHE FAILED TO STATE SUCH CLAIMS IN HER AFFIDAVIT THAT WAS ATTACHED [TO] HER POSITION PAPER, and;

C. THAT THE DECISION/RESOLUTION RENDERED BY THE HONORABLE COMMISSIONERS OF THE 5TH DIVISION WAS TAINTED WITH GRAVE ABUSE OF DISCRETION AS IT WAS INCOMPLETE AND UNLAWFUL[.]12 (Italics and emphasis in the original)

Non-payment of docket fee at the time of the filing of a petition does not automatically call for its dismissal as long as the fee is paid within the applicable prescriptive or reglementary period.13 While petitioner paid the P30 deficient amount of the docket fee on February 7, 2006,14 it was beyond the 60-day period for filing the petition for certiorari. Nevertheless, the Court, in the interest of substantial justice, brushes aside this and the other technicalities cited by the Court of Appeals in its Resolution of December 15, 200515 and, instead of remanding the case to the appellate court, now hereby decides the case on the merits.

While in cases of illegal dismissal, the employer bears the burden of proving that the dismissal is for a valid or authorized cause, the employee must first establish by substantial evidence the fact of dismissal.16

The records do not show that petitioner was dismissed from the service. They in fact show that despite petitioner’s absence from July 2001 to March 2002 which, by her own admission, exceeded her approved leave,17 she was still considered a member of the Forest Hills faculty18 which retained her in its payroll.19

Petitioner argues, however, that she was constructively dismissed when Forest Hills merged her class with another "so much that when she reported back to work, she has no more claims to hold and no more work to do."20

Petitioner, however, failed to refute Forest Hills’ claim that when she expressed her intention to resume teaching, classes were already ongoing for School Year 2002-2003. It bears noting that petitioner simultaneously held the positions of secondary school teacher and registrar and, as the NLRC noted, she could have resumed her work as registrar had she really wanted to continue working with Forest Hills.21

Petitioner’s affidavit and those of her former colleagues,22 which she attached to her Position Paper, merely attested that she was dismissed from her job without valid cause, but gave no particulars on when and how she was dismissed.

There being no substantial proof that petitioner was dismissed, she is not entitled to separation pay or backwages.

Respecting petitioner’s claim for holiday pay, Forest Hills contends that petitioner failed to prove that she actually worked during specific holidays. Article 94 of the Labor Code provides, however, that

(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate[.]

The provision that a worker is entitled to twice his regular rate if he is required to work on a holiday implies that the provision entitling a worker to his regular rate on holidays applies even if he does not work.

The petitioner is likewise entitled to service incentive leave under Article 95 of the Labor Code which provides that

(a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.

(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or in establishment exempted from granting this benefit by the Secretary of Labor after considering the viability or financial condition of such establishment.

x x x x,

and to 13th month pay under Presidential Decree No. 851.23

As for petitioner’s claims for overtime pay, it must be denied, for other than the uncorroborated affidavits of her colleagues, there is no concrete proof that she is entitled thereto.24 And so must her claim for allowances, no proof to her entitlement thereto having been presented

On the deduction of 10% tithe, Article 113 of the Labor Code instructs:

ART. 113. No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except:

(a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance;

(b) For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned; and

(c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor,

as does Rule VIII, Section 10 of the Rules Implementing Book III of the Labor Code reading:

SEC. 10. Deductions from the wages of the employees may be made by the employer in any of the following cases:

(a) When the deductions are authorized by law, including deductions for the insurance premiums advanced by the employer in behalf of the employee as well as union dues where the right to check-off has been recognized by the employer or authorized in writing by the individual employee himself;

(b) When the deductions are with the written authorization of the employees for payment to a third person and the employer agrees to do so, provided that the latter does not receive any pecuniary benefit, directly or indirectly, from the transaction. (Emphasis and underscoring supplied)

In the absence then of petitioner’s written conformity to the deduction of the 10% tithe from her salary, the deduction made by Forest Hills was illegal.

Finally, on petitioner’s claim that Forest Hills did not remit her SSS contributions, Villar v. National Labor Relations Commission25 enlightens:

x x x [T]he burden of proving payment of monetary claims rests on the employer. x x x

x x x x

The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents – which will show that overtime, differentials, service incentive leave and other claims of workers have been paid – are not in the possession of the worker but in the custody and absolute control of the employer.26 (Underscoring supplied)

Forest Hills having glossed over this claim, the same must be granted.

Finally, insofar as petitioner was compelled to litigate her money claims, an award of attorney’s fees equivalent to 10% of the final judgment award is in order.27

WHEREFORE, the Court of Appeals Resolution of December 15, 2005 is SET ASIDE. The petition is GRANTEDinsofar as petitioner’s claims for illegal deductions, holiday pay, service incentive leave pay, 13th month pay, and non-remittance of SSS contributions are concerned. Respondents are accordingly ORDERED to refund to petitioner the amount of the illegal deductions from her salary; to pay her holiday pay, service incentive leave pay, and 13th month pay; to remit her contributions to the SSS; and to pay her attorney’s fees equivalent to 10% of the final judgment award. The case is accordingly REMANDED to the Labor Arbiter for computation of the amount of such money claims.

SO ORDERED.

Labor Law Review: Alex Gurango vs. Best Chemicals Inc. (2010)

CASE DIGEST

Alex Gurango vs. Best Chemicals Inc. (2010)

FACTS:

Respondent (Best) is a corporation engaged in the manufacture of biaxally oriented polypropylene and related products. 

Petitioner Gurango was hired as a boiler operator of respondent corporation.

Respondent Best issued a memorandum order prohibiting its employees bringing personal items to their work area. A suspension of 6 days without pay shall be its sanction to erring employees.

On May 5, 2003, Petitioner Gurango was caught bringing a camera without a film inside the production area. Romeo Albao, the security guard, tried to confiscate the camera from him but Gurango refuses to give up the camera. Thus, it turns out into a heated argument and a fistfight between them occurred. Other security guards tried to pacify them thus their brawl ended. Because of that incident, Respondent corporation dismissed Petitioner Gurango from his job on the ground of gross misconduct. 

Petitioner Gurango filed a complaint for illegal dismissal against respondent. 

The Labor Arbiter (LA) ruled in favor of Petitioner that he was illegally dismissed from his job. LA also ordered respondent to pay petitioner backwages and separation pay. 

On appeal, NLRC affirmed LA's decision. That the bringing of camera is not included in the memorandum order and contending that an unloaded camera will not disrupt nor obstruct company services and operations. 

Court of Appeals (CA) set aside NLRC's ruling. Asserting that fistfight with fellow employees is a serious misconduct.

A Motion for Reconsideration was filed by Petitioner but was denied.

ISSUE

WON petitioner was illegally dismissed.

RULING:

Yes. Respondent Best failed miserably to prove by substantial evidence its charges to Petitioner Gurango. Respondent Best did not present any evidence to show that Gurango engaged in a fistfight. Based on the findings of the LA, Gurango’s statement is credible and unblemished but Albao’s statement is contradictory. Moreover, there was no showing that Gurango’s actions were performed with wrongful intent. Note that the Court held that factual findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction, are accorded not only respect but finality when supported by susbstantial evidence.




Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 174593 August 25, 2010


ALEX GURANGO, Petitioner, 

vs.
BEST CHEMICALS AND PLASTICS INC. and MOON PYO HONG, Respondents.

D E C I S I O N

CARPIO, J.:

The Case

This is a petition1 for review on certiorari under Rule 45 of the Rules of Court. The petition challenges the 20 July 2006 Decision2 and 11 September 2006 Resolution3 of the Court of Appeals in CA-G.R. SP No. 94004. The Court of Appeals set aside the 17 October 20054 and 24 January 20065 Resolutions of the National Labor Relations Commission (NLRC) in CA No. 044428-05, affirming the 6 July 2004 Decision6 of the Labor Arbiter in NLRC NCR Case No. 05-06181-03.

The Facts

Respondent Best Chemicals and Plastics, Inc. (BCPI) is a corporation engaged in the manufacture of biaxially oriented polypropylene and related products. Respondent Moon Pyo Hong (Hong) is the president and chief executive officer of BCPI.

Petitioner Alex R. Gurango (Gurango) and Romeo S. Albao (Albao) worked as boiler operator and security guard, respectively, in BCPI. In a memorandum7 dated 2 May 2003, BCPI prohibited its empoyees from bringing personal items to their work area. Erring employees would be suspended for six days. BCPI stated that:

Please be reminded of the following existing rules and regulations that all employees are expected to strictly observe and adhere to:

x x x x

Bringing in to work station/area of personal belongings other than those required in the performance of one’s duty which disrupt/obstruct Company’s services and operations, except those authorized by higher authorities. This offense shall include the following items [sic]: radios, walkman, discman, make-up kits, ladies’ bags, workers’ knapsacks and the like which must be left behind and safe kept [sic] in the employees’ respective lockers. This being a Serious Offense, the penalty of which is six (6) days suspension from work without pay.81avvphi1

Gurango and Albao presented two conflicting sets of facts as to what happened on 5 May 2003.

According to Gurango, at 4 a.m., he performed his routine check-up inside the production area. He had in his pocket a camera without film. On his way out of the production area, he saw Albao standing near the bundy clock. Albao pulled him, grabbed his pocket, and tried to confiscate the camera. Gurango refused to give the camera because there was no reason to surrender it.

Albao held Gurango’s arm and punched him on the face. Gurango shouted for help. Another security guard, Rodenio I. Pablis (Pablis), arrived. Instead of pacifying Albao, Pablis joined in punching and kicking Gurango. Albao and Pablis banged Gurango’s head against the floor and provoked him to fight back.

Gurango’s co-worker, Elvin Juanitas (Juanitas), saw what happened and asked Albao and Pablis to stop hitting Gurango. Albao and Pablis brought Gurango to the guardhouse. Officer-in-charge Rommel M. Cordero (Cordero) locked the guardhouse, then ordered Albao and Pablis to continue hitting Gurango. Freddie Infuerto arrived at the guardhouse and asked the security guards to stop hitting Gurango. Gurango agreed to surrender the camera on the condition that the security guards would prepare a document acknowledging receipt of the camera.

Albao, on the other hand, alleged that he was on duty at the main entrance of the production area from 7 p.m. of 4 May 2003 to 7 a.m. of 5 May 2003. At 4:20 a.m., Gurango tried to enter the production area bringing a camera. Albao told Gurango that he could not bring the camera inside the production area. Gurango got mad and tried to grab Albao’s gun. Albao and Gurango engaged in a fistfight. Cordero, Pablis, and another security guard, Fredrick Lañada, arrived and stopped the fight.

On 5 May 2003, at 8:35 a.m., Gurango went to Dr. Homer L. Aguinaldo (Dr. Aguinaldo) for examination and treatment. Dr. Aguinaldo issued a medical report9 and advised Gurango to rest for three days.

In a letter10 dated 5 May 2003, BCPI asked Gurango to explain in writing why no disciplinary action should be taken against him and then placed him under preventive suspension effective 6 May 2003. On 6 May 2003, Gurango wrote a letter11 to BCPI narrating what happened. On 8 May 2003, Gurango wrote another letter12 to BCPI stating that:

I already explained my side of the story regarding the alleged fistfight between Romeo Albao and me. I would like to reiterate that I was never involved in any fistfight nor commit any violation of our Company’s Code of Discipline.

Another issue is the preventive suspension I’m undergoing with [sic]. I would like to question the propriety of such action. Be reminded that you are putting me under indefinite preventive suspension.

Under the law, an employee may be placed under preventive suspension only if his continued employment poses a serious and imminent threat to the life and property of the employer or of his co-employees. Consequently, without this kind of threat, preventive suspension is improper.13

On 9 May 2003, Juanitas wrote a letter14 to BCPI narrating what he saw. Juanitas stated that:

Noong May 5 bandang alas 4:20 ng madaling araw ako po ay lumabas ng electral [sic] shop upang pumunta saproduction upang mag monitor. Ng sa bandang locker room pa lang ako may nakita ako tatlong tao na nakasuot ng kulay puti na nagpaikot-ikot (sa harapan banda ng bandi [sic] clock). Medyo madilim pa kaya hindi ko nakita siAlex Gurango kasi nakasoot sya ng kulay dark blue na T-shirt. Ng medyo malapit na ako nakarinig ako ng boses na (tama na nasasaktan na ako) at may sumagot na ibigay mo na masasaktan ka lang. Ng makalapit na ako sa kanila nakita ko na iniipit na ng kanang braso ni Albao (Guard) ang leeg ni Alex. Akala ko nagbibiroan lang sila.Tinanong ko kung ano yan pero bago ako tumanong sa kanila nakita ko na nasasaktan na si Alex dahil sa pagkaipit sa kanyang leeg. Sagot ni Alex sa akin pre (ako) kinukuha nila ang kamera sa akin to eh. Sabi pa niAlex hindi ko to ibibigay sa inyo kahit ako’y saktan nyo, hindi ako lalaban sa inyo. May pagbibigyan ako, ibibigay ko to sa management. Sabi ko ano ba yan nasasaktan na ang tao. Nagtataka naman ako sa kanila ni Pables atLañada bakit hindi nila inaawat, nakatingin lang sila at kasamahan pa nila. Ako naman natatakot akong paghiwalayin sila kasi may baril si Albao na naka sabit sa beywang nya baka pag inawat ko baka sasabihin niAlbao na kumampi ako kay Alex dahil parehas kaming maintenance. Sinabihan ko si Albao na bitiwan mo si Alexayusin natin to. Hindi pa rin binitiwan ni Albao ang pagkaipit sa leeg ni Alex hanggang sa naitulak ko sila papunta sa guardhouse. Ng sa loob na ng guardhouse hindi pa rin binitiwan ni Albao si Alex kaya hinahanap ko ang kanilang O.I.C. Para ayusin na. Maya maya lumabas si Cordero (O.I.C.). Sabi ko awatin niya si Albao pero hindi manlang nya inawat pati na ang kanyang mga kasama dahil nandoon pa rin sa loob ng guardhouse sina Pables, Lañada at Cordero. Lumabas ako at tinawag ko si Pong sa kanilang shop. Bumalik ako sa guardhouse kasama siPong, ganon pa rin nakakapit pa rin ang braso ni Albao sa leeg ni Alex. Ngayon naglakas loob na lang ako na paghiwalayin sila. Nahirapan ako dahil malakas si Albao. Napaghiwalay ko sila pero muntik pa nga ako tamaan ng kamay ni Albao at ng maghiwalay na pinaupo ko si Alex sa upuan sa tabi at hinarang ko si Albao dahil gusto pa nyang lumapit kay Alex at nagsabi ako kay Pong na bantayan mo si Alex dahil tatawag ako ng Korean osupervisor para ayusin.15

On 10 May 2003, BCPI wrote a letter to Gurango finding him guilty of engaging in a fistfight and violating company policy by bringing a camera. On 14 May 2003, Gurango wrote a letter16 to BCPI stating that:

I again would like to reiterate that I was never involved nor commit [sic] any violation of Company’s Code of Discipline.

For me to further explain, could you please be more specific what company policies are you referring to when you said that bringing of camera inside the production area and refusal to surrender the same camera constitute infractions of company policy.17

On 15 May 2003, Gurango filed with the 5th Municipal Circuit Trial Court (MCTC), Carmona, Cavite, a criminal complaint18 against Albao, Cordero and Pablis for slight physical injury.

In a letter19 dated 19 May 2003, BCPI dismissed Gurango effective 20 May 2003. BCPI stated that:

After a thorough evaluation and intensive deliberation on the facts attendant to your case, Management has found you to have committed the following Offenses under the Company’s Code of Discipline:

1. Concealing and bringing in to work station/area of personal belongings (e.g., a camera), other than those required in the performance of one’s duty which disrupt/obstruct Company services and operations, except those authorized by higher authorities. (Table II, Serious, No. 10 of Code of Discipline);

2. Utter disregard for or refusal to submit to reasonable inspection connected within [sic] the Company premises by authorized Company security personnel in the conduct of their business. (Table IV, Minor, No. 1 of Code of Discipline);

3. Starting or provoking a fight, i.e., involvement in a fist fight with a security guard last May 5, 2003. (Table I, Grave, No. 6 of Code of Discipline);

4. Attempting to inflict or inflicting bodily injury upon any Company official (e.g., security guard who is a peacekeeping officer of the company) or employee. (Table I, Grave, No. 05 of Code of Discipline); and

5. Intentionally causing personal injury to another person (i.e., the security guard) within the Company premises. (Table I, Grave, No. 12 of Code of Discipline).

x x x x

Based on the foregoing, and in view of the gravity of the offenses that you have committed which constitute gross misconduct, the Company is constrained to terminate your employment for cause effective May 20, 2003, at the close of business hours.20

On 26 May 2003, Gurango filed with the NLRC a complaint against BCPI and Hong for illegal dismissal.

The Labor Arbiter’s Ruling

In his 6 July 2004 Decision, the Labor Arbiter found BCPI liable for illegal dismissal. The Labor Arbiter ordered BCPI to pay Gurango backwages and separation pay. The Labor Arbiter held that:

I find that the complainant was illegally dismissed from employment.

He was dismissed from [sic] trying to bring an alleged prohibited item, a camera, inside the Production Area but company rules did not prohibit the bringing of camera.

How can an unloaded camera be said to "disrupt/obstruct company services and operations"? It cannot.

As to the alleged fistfight between the complainant and security guard Albao, I am more inclined to believe and find credible complainant’s version that he was mauled by Albao and, later, by some of the guards.

His letter/statement was made on May 6, 2003, or only a day after the incident. The statement of guard Albao was made on May 28, 2003, several days after the incident.

I find that complainant’s statement is freshly unblemished, and, therefore, very credible while Albao’s contradictory statement is the fruit of afterthought.

Moreover, I don’t find the complainant was foolish enough to try to snatch the gun of Albao during the incident. I am convinced Albao lied in his statement.

x x x x

In the present case, no solid cause exists to dismiss complainant from employment as to warrant a dismissal.21

BCPI and Hong appealed to the NLRC.

The NLRC’s Ruling

In its 17 October 2005 Resolution, the NLRC affirmed in toto the Labor Arbiter’s 6 July 2004 Decision. The NLRC held that:

Although fighting within company premises constitute serious misconduct, this however, does not apply in this case. Complainant did not start nor provoke the fight. It was precipitated, instead, by guard Albao when he tried to get the complainant’s camera for no valid reason. The statement of Albao that complainant tried to snatch his service firearm is not only unbelievable but is also exaggerated. The Labor Arbiter is correct and we concur in his finding that the complainant was not foolish enough to try to snatch the gun of Albao. The camera is undisputably owned by complainant. Bringing it inside his workplace is not a crime. So why would he try to snatch a gun for a very trivial misunderstanding. What is clear is that the security guards over acted in the performance of their duty.

x x x x

x x x The prohibition against the bringing of personal belongings in to the work station/area is qualified by a condition that such belongings will disrupt/obstruct company’s services and operations. That is why in the enumerations the following are included, radios, walkman, discman, make-up kits, ladies’ bag workers’ knapsacks and the like. An unloaded camera is not listed and we cannot imagine how such camera could "disrupt or obstruct company services and operations.

Moreover, even if we assume that the complainant indeed violated this Inter-Office Memorandum, still, this will not justify complainant’s dismissal because the penalty provided therein is only six (6) days suspension from work without pay, not dismissal.22

BCPI and Hong filed a motion for reconsideration, which the NLRC denied. BCPI and Hong filed with the Court of Appeals a petition for certiorari under Rule 65 of the Rules of Court.

The Court of Appeals’ Ruling

In its 20 July 2006 Decision, the Court of Appeals set aside the 17 October 2005 and 24 January 2006 Resolutions of the NLRC. The Court of Appeals held that "private respondent engaged himself in a fistfight with the security guard"23 and that engaging in a fistfight constituted serious misconduct.

Gurango filed a motion24 for reconsideration, which the Court of Appeals denied in its 11 September 2006 Resolution. Hence, the present petition.

The Issue

Gurango raises as issue that the Court of Appeals erred in ruling that he was legally dismissed. BCPI failed to prove that he engaged in a fistfight and that there was just cause for his dismissal.

The Court’s Ruling

The petition is meritorious.

As a general rule, only questions of law may be raised in petitions for certiorari under Rule 45 of the Rules of Court. Section 1 of Rule 45 states that, "The petition shall raise only questions of law." In Triumph International (Phils.), Inc. v. Apostol,25 the Court enumerated exceptions to the rule. Among the exceptions are when the findings of fact are conflicting and when the findings are conclusions without citation of specific evidence on which they are based.26

In the present case, the findings of fact of the Court of Appeals conflict with the findings of fact of the NLRC and the Labor Arbiter. Also, the finding of the Court of Appeals that Gurango engaged in a fistfight is a conclusion without citation of specific evidence on which it is based.

In termination cases, the employer has the burden of proving, by substantial evidence, that the dismissal is for just cause. If the employer fails to discharge the burden of proof, the dismissal is deemed illegal. In AMA Computer College — East Rizal v. Ignacio,27 the Court held that:

In termination cases, the burden of proof rests on the employer to show that the dismissal is for just cause. When there is no showing of a clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid or authorized cause.1avvphi1 And the quantum of proof which the employer must discharge is substantial evidence. An employee’s dismissal due to serious misconduct must be supported by substantial evidence. Substantial evidence is that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.28

In the present case, aside from Albao’s statement, BCPI did not present any evidence to show that Gurango engaged in a fistfight. Moreover, there is no showing that Gurango’s actions were performed with wrongful intent. In AMA Computer College – East Rizal, the Court held that:

The Labor Code provides that an employer may terminate the services of an employee for a just cause.1âwphi1 Among the just causes in the Labor Code is serious misconduct. Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. The misconduct to be serious within the meaning of the Labor Code must be of such a grave and aggravated character and not merely trivial or unimportant. x x x

In National Labor Relations Commission v. Salgarino, the Court stressed that "[i]n order to constitute serious misconduct which will warrant the dismissal of an employee under paragraph (a) of Article 282 of the Labor Code, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been performed with wrongful intent."

After a thorough examination of the records of the case, however, the Court finds that petitioner AMACCI miserably failed to prove by substantial evidence its charges against respondent. There is no showing at all that respondent’s actions were motivated by a perverse and wrongful intent, as required by Article 282(a) of the Labor Code.29 (Emphasis supplied)

The surrounding circumstances show that Gurango did not engage in a fistfight: (1) in his 9 May 2003 letter to BCPI, Juanitas corroborated Gurango’s version of the facts; (2) nobody corroborated Albao’s version of the facts; (3) in his medical report, Dr. Aguinaldo found that Gurango suffered physical injuries; (4) Gurango filed with the MCTC a complaint against Albao, Cordero and Pablis for slight physical injury; (5) the Labor Arbiter found Gurango’s statement credible and unblemished; (6) the Labor Arbiter found Albao’s statement contradictory; (7) the Labor Arbiter stated, "I am convinced Albao lied in his statement"; (8) the NLRC found that Gurango did not start a fight; (9) the NLRC found Albao’s statement unbelievable and exaggerated; and (10) the Court of Appeals’ reversal of the findings of fact of the Labor Arbiter and the NLRC is baseless.

In Triumph International (Phils.), Inc., the Court held that factual findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction, are accorded not only respect but finality when supported by susbstantial evidence.30

WHEREFORE, we GRANT the petition. We SET ASIDE the 20 July 2006 Decision and 11 September 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 94004 and REINSTATE the 17 October 2005 and 24 January 2006 Resolutions of the NLRC in CA No. 044428-05.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice
DIOSDADO M. PERALTA
Associate Justice ROBERTO A. ABAD
Associate Justice


JOSE C. MENDOZA
Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice


Footnotes

* Designated additional member per Raffle dated 23 August 2010.

1 Rollo, pp. 3-30.

2 Id. at 32-40. Penned by Associate Justice Andres B. Reyes, Jr., with Associate Justices Hakim S. Abdulwahid and Estela M. Perlas-Bernabe concurring.

3 Id. at 42.

4 Id. at 67-78. Penned by Commissioner Romeo C. Lagman, with Presiding Commisioner Lourdes C. Javier and Commisioner Tito F. Genilo concurring.

5 Id. at 80-81.

6 Id. at 59-65. Penned by Labor Arbiter Arthur L. Amansec.

7 Id. at 44.

8 Id.

9 Id. at 48-49.

11 Id. at 50.

12 Id. at 52.

13 Id.

14 Id. at 45-47.

15 Id.

16 Id. at 53.

17 Id.

18 Id. at 54.

19 Id. at 56-57.

20 Id.

21 Id. at 63-64.

22 Id. at 75-77.

23 Id. at 37.

24 Id. at 94-109.

25 G.R. No. 164423, 16 June 2009, 589 SCRA 185.

26 Id. at 195-196.

27 G.R. No. 178520, 23 June 2009, 590 SCRA 633.

28 Id. at 651-652.

29 Id. at 655.

30 Supra note 25 at 198.

Labor Law Review: Capitol Medical Center, Inc. vs. Cesar E. Meris (2005)

CASE DIGEST

Capitol Medical Center, Inc. vs. Cesar E. Meris (2005)

FACTS;

Petitioner (Capitol) closed its Industrial Service Unit (ISU) alleging loss and extinct demand which resulted to Respondent Dr. Meris' termination as their chief in said unit.

Respondent filed a complaint for illegal dismissal.

The Labor Arbiter (LA) ruled in favor of petitioner that the dismissal was valid.

NLRC set aside LA's findings and made a new decision granting Dr. Meris' retirement pay.

Undaunted by NLRC's decision, respondent elevate the case to the Court of Appeals (CA) wherein it reversed NLRC's decision and held that there was illegal dismissal.

ISSUE:

Whether or not (WON) Respondent doctor was illegally dismissed

RULING:

Yes. The record shows that there was no loss nor extinct demand of the ISU. In fact, it even increases during Dr. Meris' management, . Since Petitioner Capitol failed to prove good faith in closing the ISU, it's tantamount to an illegal dismissal.



FULLTEXT

Republic of the Philippines
SUPREME COURT

THIRD DIVISION

G.R. No. 155098 September 16, 2005

CAPITOL MEDICAL CENTER, INC. and DR. THELMA NAVARETTE-CLEMENTE, Petitioners,
vs.
DR. CESAR E. MERIS, Respondent.

D E C I S I O N

CARPIO MORALES, J.:

Subject of the present appeal is the Court of Appeals Decision1 dated February 15, 2002 reversing the NLRC Resolution2 dated January 19, 1999 and Labor Arbiter Decision3 dated April 28, 1998 which both held that the closure of the Industrial Service Unit of the

Capitol Medical Center, Inc., resulting to the termination of the services of herein respondent Dr. Cesar Meris as Chief thereof, was valid.

On January 16, 1974, petitioner Capitol Medical Center, Inc. (Capitol) hired Dr. Cesar Meris (Dr. Meris),4 one of its stockholders,5 as in charge of its Industrial Service Unit (ISU) at a monthly salary of P10,270.00.

Until the closure of the ISU on April 30, 1992,6 Dr. Meris performed dual functions of providing medical services to Capitol’s more than 500 employees and health workers as well as to employees and workers of companies having retainer contracts with it.7

On March 31, 1992, Dr. Meris received from Capitol’s president and chairman of the board, Dr. Thelma Navarette-Clemente (Dr. Clemente), a notice advising him of the management’s decision to close or abolish the ISU and the consequent termination of his services as Chief thereof, effective April 30, 1992.8 The notice reads as follows:

March 31, 1992

Dr. Cesar E. Meris

Chief, Industrial Service Unit

Capitol Medical Center

Dear Dr. Meris:

Greetings!

Please be formally advised that the hospital management has decided to abolish CMC’s Industrial Service Unit as of April 30, 1992 in view of the almost extinct demand for direct medical services by the private and semi-government corporations in providing health care for their employees. Such a decision was arrived at, after considering the existing trend of industrial companies allocating their health care requirements to Health Maintenance Organizations (HMOs) or thru a tripartite arrangement with medical insurance carriers and designated hospitals.

As a consequence thereof, all positions in the unit will be decommissioned at the same time industrial services [are] deactivated. In that event, you shall be entitled to return to your private practice as a consultant staff of the institution and will become eligible to receive your retirement benefits as a former hospital employee. Miss Jane Telan on the other hand will be transferred back to Nursing Service for reassignment at the CSR.

We wish to thank you for your long and faithful service to the institution and hope that our partnership in health care delivery to our people will continue throughout the future. Best regards.

Very truly yours,

(SGD.) DR. THELMA NAVARETTE-CLEMENTE9 (Emphasis and underscoring supplied)

Dr. Meris, doubting the reason behind the management’s decision to close the ISU and believing that the ISU was not in fact abolished as it continued to operate and offer services to the client companies with Dr. Clemente as its head and the notice of closure was a mere ploy for his ouster in view of his refusal to retire despite Dr. Clemente’s previous prodding for him to do so,10 sought his reinstatement but it was unheeded.

Dr. Meris thus filed on September 7, 1992 a complaint against Capitol and Dr. Clemente for illegal dismissal and reinstatement with claims for backwages, moral and exemplary damages, plus attorney’s fees.11

Finding for Capitol and Dr. Clemente, the Labor Arbiter held that the abolition of the ISU was a valid and lawful exercise of management prerogatives and there was convincing evidence to show that ISU was being operated at a loss.12 The decretal text of the decision reads:

WHEREFORE, judgment is hereby rendered dismissing the complaint. Respondents are however ordered to pay complainant all sums due him under the hospital retirement plan.

SO ORDERED.13 (Emphasis supplied)

On appeal by Dr. Meris, the National Labor Relations Commission (NLRC) modified the Labor Arbiter’s decision. It held that in the exercise of Capitol’s management prerogatives, it had the right to close the ISU even if it was not suffering business losses in light of Article 283 of the Labor Code and jurisprudence.14

And the NLRC set aside the Labor Arbiter’s directive for the payment of retirement benefits to Dr. Meris because he did not retire. Instead, it ordered the payment of separation pay as provided under Article 283 as he was discharged due to closure of ISU, to be charged against the retirement fund.15

Undaunted, Dr. Meris elevated the case to the Court of Appeals via petition for review16 which, in the interest of substantial justice, was treated as one for certiorari.17

Discrediting Capitol’s assertion that the ISU was operating at a loss as the evidence showed a continuous trend of increase in its revenue for three years immediately preceding Dr. Meris’s dismissal on April 30, 1992,18 and finding that the ISU’s "Analysis of Income and Expenses" which was prepared long after Dr. Meris’s dismissal, hence, not yet available, on or before April 1992, was tainted with irregular entries, the appellate court held that Capitol’s evidence failed to meet the standard of a sufficient and adequate proof of loss necessary to justify the abolition of the ISU.19

The appellate court went on to hold that the ISU was not in fact abolished, its operation and management having merely changed hands from Dr. Meris to Dr. Clemente; and that there was a procedural lapse in terminating the services of Dr. Meris, no written notice to the Department of Labor and Employment (DOLE) of the ISU abolition having been made, thereby violating the requirement embodied in Article 283.20

The appellate court, concluding that Capitol failed to strictly comply with both procedural and substantive due process, a condition sine qua non for the validity of a case of termination,21 held that Dr. Meris was illegally dismissed. It accordingly reversed the NLRC Resolution and disposed as follows:

IN VIEW OF ALL THE FOREGOING, the assailed resolutions of the NLRC are hereby set aside, and another one entered –

1 – declaring illegal the dismissal of petitioner as Chief of the Industrial Service Unit of respondent Medical Center;

2 – ordering respondents to pay petitioner

a) backwages from the date of his separation in April 1992 until this decision has attained finality;

b) separation pay in lieu of reinstatement computed at the rate of one (1) month salary for every year of service with a fraction of at least six (6) months being considered as one year;

c) other benefits due him or their money equivalent;

d) moral damages in the sum of P50,000.00;

e) exemplary damages in the sum of P50,000.00; and

f) attorney’s fees of 10% of the total monetary award payable to petitioner.

SO ORDERED.22

Hence, the present petition for review assigning to the appellate court the following errors:

I

. . . IN OVERTURNING THE FACTUAL FINDINGS AND CONCLUSIONS OF BOTH THE NATIONAL LABOR RELATIONS COMMISSION (NLRC) AND THE LABOR ARBITER.

II

. . . IN HOLDING, CONTRARY TO THE FINDINGS OF BOTH THE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS COMMISSION, THAT THE INDUSTRIAL UNIT (ISU) WAS NOT INCURRING LOSSES AND THAT IT WAS NOT IN FACT ABOLISHED.

III

. . . IN NOT UPHOLDING PETITIONERS’ MANAGEMENT PREROGATIVE TO ABOLISH THE INDUSTRIAL SERVICE UNIT (ISU).

IV

. . . IN REQUIRING PETITIONERS TO PAY RESPONDENT BACKWAGES AS WELL AS DAMAGES AND ATTORNEY’S FEES.23

Capitol questions the appellate court’s deciding of the petition of Dr. Meris on the merits, instead of merely determining whether the administrative bodies acted with grave abuse of discretion amounting to lack or excess of jurisdiction.

The province of a special civil action for certiorari under Rule 65, no doubt the appropriate mode of review by the Court of Appeals of the NLRC decision,24 is limited only to correct errors of jurisdiction or grave abuse of discretion amounting to lack or excess of jurisdiction.25 In light of the merits of Dr. Meris’ claim, however, the relaxation by the appellate court of procedural technicality to give way to a substantive determination of a case, as this Court has held in several cases,26 to subserve the interest of justice, is in order.

Capitol argues that the factual findings of the NLRC, particularly when they coincide with those of the Labor Arbiter, as in the present case, should be accorded respect, even finality.27

For factual findings of the NLRC which affirm those of the Labor Arbiter to be accorded respect, if not finality, however, the same must be sufficiently supported by evidence on record.28 Where there is a showing that such findings are devoid of support, or that the judgment is based on a misapprehension of facts,29 the lower tribunals’ factual findings will not be upheld.

As will be reflected in the following discussions, this Court finds that the Labor Arbiter and the NLRC overlooked some material facts decisive of the instant controversy.

Capitol further argues that the appellate court’s conclusion that the ISU was not incurring losses is arbitrary as it was based solely on the supposed increase in revenues of the unit from 1989-1991, without taking into account the "Analysis of Income and Expenses" of ISU from July 1, 1990 to July 1, 1991 which shows that the unit operated at a loss;30 and that the demand for the services of ISU became almost extinct in view of the affiliation of industrial establishments with HMOs such as Fortunecare, Maxicare, Health Maintenance, Inc. and Philamcare and of tripartite arrangements with medical insurance carriers and designated hospitals,31 and the trend resulted in losses in the operation of the ISU.

Besides, Capitol stresses, the health care needs of the hospital employees had been taken over by other units without added expense to it;32 the appellate court’s decision is at best an undue interference with, and curtailment of, the exercise by an employer of its management prerogatives;33 at the time of the closure of the ISU, Dr. Meris was already eligible for retirement under the Capitol’s retirement plan; and the appellate court adverted to the alleged lack of notice to the DOLE regarding Dr. Meris’s dismissal but the latter never raised such issue in his appeal to the NLRC or even in his petition for review before the Court of Appeals, hence, the latter did not have authority to pass on the matter.34

Work is a necessity that has economic significance deserving legal protection. The social justice and protection to labor provisions in the Constitution dictate so.

Employers are also accorded rights and privileges to assure their self-determination and independence and reasonable return of capital. This mass of privileges comprises the so-called management prerogatives. Although they may be broad and unlimited in scope, the State has the right to determine whether an employer’s privilege is exercised in a manner that complies with the legal requirements and does not offend the protected rights of labor. One of the rights accorded an employer is the right to close an establishment or undertaking.

The right to close the operation of an establishment or undertaking is explicitly recognized under the Labor Code as one of the authorized causes in terminating employment of workers, the only limitation being that the closure must not be for the purpose of circumventing the provisions on termination of employment embodied in the Labor Code.

ART. 283. Closure of establishment and reduction of personnel. – The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor saving devices or redundancy, the worker affected shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case retrenchment to prevent losses and in cases of closures or cessation of 
operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. (Emphasis and underscoring supplied)

The phrase "closures or cessation of operations of establishment or undertaking" includes a partial or total closure or cessation.35

x x x Ordinarily, the closing of a warehouse facility and the termination of the services of employees there assigned is a matter that is left to the determination of the employer in the good faith exercise of its management prerogatives. The applicable law in such a case is Article 283 of the Labor Code which permits ‘closure or cessation of operation of an establishment or undertaking not due to serious business losses or financial reverses,’ which, in our reading includes both the complete cessation of operations and the cessation of only part of a company’s business. (Emphasis supplied)

And the phrase "closures or cessation x x x not due to serious business losses or financial reverses" recognizes the right of the employer to close or cease his business operations or undertaking even if he is not suffering from serious business losses or financial reverses, as long as he pays his employees their termination pay in the amount corresponding to their length of service.36

It would indeed be stretching the intent and spirit of the law if a court were to unjustly interfere in management’s prerogative to close or cease its business operations just because said business operation or undertaking is not suffering from any loss.37 As long as the company’s exercise of the same is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the law or a valid agreement, such exercise will be upheld.38

Clearly then, the right to close an establishment or undertaking may be justified on grounds other than business losses but it cannot be an unbridled prerogative to suit the whims of the employer.

The ultimate test of the validity of closure or cessation of establishment or undertaking is that it must be bona fidein character.39 And the burden of proving such falls upon the employer.40

In the case at bar, Capitol failed to sufficiently prove its good faith in closing the ISU.

From the letter of Dr. Clemente to Dr. Meris, it is gathered that the abolition of the ISU was due to the "almost extinct demand for 
direct medical service by the private and semi-government corporations in providing health care for their employees;" and that such extinct demand was brought about by "the existing trend of industrial companies allocating their health care requirements to Health Maintenance Organizations (HMOs) or thru a tripartite arrangement with medical insurance carriers and designated hospitals."

The records of the case, however, fail to impress that there was indeed extinct demand for the medical services rendered by the ISU. The ISU’s Annual Report for the fiscal years 1986 to 1991, submitted by Dr. Meris to Dr. Clemente, and uncontroverted by Capitol, shows the following:

Fiscal Year No. of Industrial No of No. of Capitol

Patients Companies Employees

1986-1987 466 11 1445

1987-1988 580 17 1707

1988-1989 676 14 1888

1989-1990 571 16 2731

1990-1991 759 18 232041

If there was extinct demand for the ISU medical services as what Capitol and Dr. Clemente purport to convey, why the number of client companies of the ISU increased from 11 to 18 from 1986 to 1991, as well as the number of patients from both industrial corporations and Capitol employees, they did not explain.

The "Analysis of Income and Expenses" adduced by Capitol showing that the ISU incurred losses from July 1990 to February 1992, to wit:

July 1, 1990 to July 1, 1991 to

June 30, 1991 February 29, 1992

INCOME P16, 772.00 P35, 236.00

TOTAL EXPENSES P225, 583.70 P169,244.34

NET LOSS P(208,811.70) P(134,008.34),42

was prepared by its internal auditor Vicenta Fernandez,43 a relative of Dr. Clemente, and not by an independent external auditor, hence, not beyond doubt. It is the financial statements audited by independent external auditors which constitute the normal method of proof of the profit and loss performance of a company.44

At all events, the claimed losses are contradicted by the accounting records of Capitol itself which show that ISU had increasing revenue from 1989 to 1991.

Year In-Patient Out-Patient Total Income

1989 P230,316.38 P 79,477.50 P309,793.88

1990 P278,438.10 P124,256.65 P402,694.75

1991 P305,126.35 P152,920.15 P458,046.5045

The foregoing disquisition notwithstanding, as reflected above, the existence of business losses is not required to justify the closure or cessation of establishment or undertaking as a ground to terminate employment of employees. Even if the ISU were not incurring losses, its abolition or closure could be justified on other grounds like that proffered by Capitol – extinct demand. Capitol failed, however, to present sufficient and convincing evidence to support such claim of extinct demand. In fact, the employees of Capitol submitted a petition46 dated April 21, 1992 addressed to Dr. Clemente opposing the abolition of the ISU.

The closure of ISU then surfaces to be contrary to the provisions of the Labor Code on termination of employment.

The termination of the services of Dr. Meris not having been premised on a just or authorized cause, he is entitled to either reinstatement or separation pay if reinstatement is no longer viable, and to backwages.

Reinstatement, however, is not feasible in case of a strained employer-employee relationship or when the work or position formerly held by the dismissed employee no longer exists, as in the instant case.47 Dr. Meris is thus entitled to payment of separation pay at the rate of one (1) month salary for every year of his employment, with a fraction of at least six (6) months being considered as one(1) year,48 and full backwages from the time of his dismissal from April 30, 1992 until the expiration of his term as Chief of ISU or his mandatory retirement, whichever comes first.

The award by the appellate court of moral damages,49 however, cannot be sustained, solely upon the premise that the employer fired his employee without just cause or due process. Additional facts must be pleaded and proven to warrant the grant of moral damages under the Civil Code, such as that the act of dismissal was attended by bad faith or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy; and of course, that social humiliation, wounded feelings, grave anxiety, etc., resulted therefrom.50Such circumstances, however, do not obtain in the instant case. More specifically on bad faith, lack of it is mirrored in Dr. Clemente’s offer to Dr. Meris to be a consultant of Capitol, despite the abolition of the ISU.

There being no moral damages, the award of exemplary damages does not lie.51

The award for attorney’s fees, however, remains.52

WHEREFORE, the decision of the Court of Appeals dated February 15, 2002 is hereby AFFIRMED withMODIFICATION. As modified, judgment is hereby rendered ordering Capitol Medical Center, Inc. to pay Dr. Cesar Meris separation pay at the rate of One (1) Month salary for every year of his employment, with a fraction of at least Six (6) Months being considered as One (1) Year, full backwages from the time of his dismissal from April 30, 1992 until the expiration of his term as Chief of the ISU or his mandatory retirement, whichever comes first; other benefits due him or their money equivalent; and attorney’s fees.

Costs against petitioners.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN

Associate Justice

Chairman




ANGELINA SANDOVAL-GUTIERREZ

Associate Justice 

RENATO C. CORONA

Associate Justice




CANCIO C. GARCIA

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

ARTEMIO V. PANGANIBAN

Associate Justice
Chairman

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairman’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

HILARIO G. DAVIDE, JR.

Chief Justice




Footnotes

1 Rollo at 25-32.

2 Id. at 52-65.

3 Id. at 70-74.

4 Dr. Meris is a doctor of medicine and a trained specialist who earned his doctoral degree at the University of the Philippines, Manila. He also undertook post-graduate studies in the United States. Upon completion of his studies abroad, he underwent surgical residency for two (2) years from 1970 to 1972 at petitioner hospital. Thereafter, he engaged in private medical practice for one (1) year.

5 Rollo. at 26.

6 Ibid.

7 Id. at 37.

8 Id. at 26.

9 Records at 16.

10 Rollo at 27.

11 Records at 2.

12 Rollo at 72.

13 Id. at 74.

14 Id. at 60-61.

15 Id. at 63-64. See also Rollo at 80.

16 Id. at 35.

17 Id. at 28.

18 Id. at 29.

19 Id. at 30.

20 Ibid.

21 Id. at 31.

22 Id. at 31-32.

23 Id. at 15-19.

24 St. Martin Funeral Home v. NLRC, 295 SCRA 494, 507-508 (1998).

25 Land Bank of the Philippines v. Court of Appeals, 409 SCRA 455, 482 (2003).

26 Vide: EMCO Plywood Corporation v. Abelgas, 427 SCRA 496, 515-516 (2004); See also El Toro Security Agency, Inc. v. NLRC, 256 SCRA 363, 366-367 (1996); Mejares v. Reyes, 254 SCRA 425, 431 (1996);Solicitor General v. Metropolitan Manila Authority, 204 SCRA 837, 842 (1991); Patricio v. Leviste, 172 SCRA 774, 779-780 (1989).

27 Rollo at 15.

28 Vide: NYK International Knitwear Corporation Philippines v. NLRC, 397 SCRA 607, 615-616 (2003);Philippine Airlines v. Pascua, 409 SCRA 195, 204 (2003).

29 EMCO Plywood Corporation v. Abelgas, supra.

30 Rollo at 16-17.

31 Such as Fortunecare, Maxicare, Health Maintenance, Inc. and Philamcare.

32 Rollo at 17.

33 Id. at 18.

34 Id. at 19.

35 Philippine Tobacco Flue-Curing and Redrying Corporation v. National Labor Relations Commission, 300 SCRA 37, 55 (1998) citing Coca-Cola Bottlers (Phils.), Inc. v. NLRC, 194 SCRA 592, 599 (1991).

36 Catatista v. National Labor Relations Commission, 247 SCRA 46, 54 (1995). See also Industrial Timber Corporation v. National Labor Relations Commission, 273 SCRA 200, 210 (1997); J.A.T. General Services v. National Labor Relations Commission, 421 SCRA 78, 88 (2004).

37 Industrial Timber Corporation v. National Labor Relations Commission, supra.

38 J.A.T. General Services v. National Labor Relations Commission supra at 89.

39 Vide: Mac Adams Metal Engineering Workers Union-Independent v. Mac Adams Metal Engineering. 414 SCRA 411, 416 (2003); Catatista v. NLRC, supra at 56; Industrial Timber Corporation v. NLRC (5th Division), supra at 210.

40 J.A.T. General Services v. National Labor Relations Commission, supra at 87; Industrial Timber Corporation v. NLRC (5th Division), supra at 210.

41 Records at 20. See also at 34-48.

42 Id. at 92; Exhibit 3-A.

The records, however, reveal that the foregoing income, as undisputed by Capitol, came exclusively from consultation fees. Dr. Meris asserts that the ISU provided free consultation and treatment to employees and workers of Capitol while industrial patients were charged very low to attract more industrial companies, thus the low income. The stated income is not inclusive of patient’s availment of medical facilities of the hospital as referred by Dr. Meris.

43 Rollo at 43.

44 Dela Salle University v. Dela Salle University Employees Association, 330 SCRA 363, 383 (2000) citingSaballa v. NLRC, 260 SCRA 697, 709 (1996); Revidad v. NLRC, 245 SCRA 356, 367 (1995).

45 Records at 80-83. The consolidated income includes those derived from consultation fees and referrals made by Dr. Meris for X-ray examination, laboratory, ultrasound and other facilities available at the hospital. Some patients were referred for hospitalization while others were sent to other medical specialists. See Reply of Respondents at Records 67.

46 Id. at 577.

47 Bongar v. NLRC, 294 SCRA 536, 540-541 (1998).

48 Caliguia v. NLRC, 264 SCRA 110, 124 (1996).

49 Article 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.

50 Cocoland Development Corporation v. NLRC, 259 SCRA 51, 63 (1996) citing Primero v. Intermediate Appellate Court, 156 SCRA 435, 444 (1987).

51 There is no sufficient and convincing evidence that Capitol acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner in terminating the employment of Dr. Meris. See Article 2232 of the New Civil Code.

52 Austria v. NLRC, 310 SCRA 293, 304 (1999).