7 Gustilo vs. Wyeth Philippines, Inc.

SUPREME COURT REPORTS ANNOTATED VOLUME 440 24/11/2017, 10)17 AM
VOL. 440, OCTOBER 4, 2004 67

Gustilo vs. Wyeth Philippines, Inc.
*
G.R. No. 149629. October 4, 2004.
ALAN D. GUSTILO, petitioner, vs. WYETH

PHILIPPINES, INC., FILEMON VERZANO, JR.,
AURELIO MERCADO and EDGAR EPILEPSIA,
respondents.
Labor Law; Employment; Management Prerogative; It is the

employers prerogative to prescribe reasonable rules and regulations
necessary or proper for the conduct of its business or concern.It is
the employers prerogative to prescribe reasonable rules and
regulations necessary or proper for the conduct of its business or
concern, to provide certain disciplinary measures to implement said
rules and to assure that the same be complied with. At the same
time, it is one of the fundamental duties of the employee to yield
obedience to all reasonable rules, orders, and instructions of the
employer, and willful or intentional disobedience thereof, as a
general rule, justifies rescission of the contract of service and the
preemptory dismissal of the employee.
Same; Same; Same; Benefits; Separation Pay; Separation pay
shall be allowed as a measure of social justice when employee is
validly dismissed for cause.Separation pay shall be allowed as a
measure of social justice only in those instances where the employee
is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character. Where the reason for the
valid dismissal is, x x x an offense involving moral turpitude x x x,
the employer may not be required to give the dismissed employee
separation pay, or financial assistance, or whatever other name it is
called, on the ground of social justice.
Same; Same; Same; Same; Same; Financial assistance may be
allowed as a measure of social justice in exceptional circumstances
http://www.central.com.ph/sfsreader/session/0000015febe54a1dbc276e3f003600fb002c009e/p/APJ729/?username=Guest Page 1 of 14
and as an equitable concession.The assumption for granting

financial assistance or separation pay, which is, that there is an
illegally dismissed employee and that illegally dismissed employee
would otherwise have been entitled to reinstatement, is not present
in the case at bench. Here, the striking workers have been validly
dismissed Where the employees dismissal was for a just cause, it
would
_______________
* THIRD DIVISION.
68
68 SUPREME COURT REPORTS ANNOTATED
be neither fair nor just to allow the employee to recover something he

has not earned or could not have earned. This being so, there can be
no award of backwages, for it must be pointed out that while
backwages are granted on the basis of equity for earnings which a
worker or employee has lost due to his illegal dismissal, where
private respondents dismissal is for just cause, as in the case herein,
there is no factual or legal basis to order the payment of backwages;
otherwise, private respondent would be unjustly enriching herself at
the expense of petitioners. (Cathedral School of Technology vs.
National Labor Relations Commission, 214 SCRA 551).
Consequently, granting financial assistance to the strikers is clearly
a specious inconsistency (supra). We are of course aware that
financial assistance may be allowed as a measure of social justice in
exceptional circumstances and as an equitable concession. We are
likewise mindful that financial assistance is allowed only in those
instances where the employee is validly dismissed for causes other
than serious misconduct or those reflecting on his moral character
(Zenco Sales, Inc. vs. National Labor Relations Commission, 234
SCRA 689). x x x.
PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.

Joselito T. Bayatan for petitioner.
Abello, Concepcion, Regala & Cruz for respondents.
SANDOVAL-GUTIERREZ, J.:
At bar is a petition for review on certiorari under Rule 45 of

the 1997 Rules
1
of Civil Procedure, as amended, assailing
2
the Decision dated January 24, 2001 and Resolution dated
August 10, 2001 rendered by the Court of Appeals in CA-
G.R. SP No. 57545, entitled Wyeth Phils., Inc. and/or
Filemon Verzano, Jr., Aurelio Mercado and Edgar Epilepsia
vs. National Labor Relations Commission (Fourth Division)
and Alan Gustilo.
_______________
1 Annex N of the Petition, Rollo at pp. 591-614.

2 Annex P, Id., at pp. 624-626.
69
VOL. 440, OCTOBER 4, 2004 69

The facts as borne by the records are:

On November 7, 1990, Alan D. Gustilo, petitioner, was
employed by Wyeth Philippines, Inc., respondent company,
as a pharmaceutical territory manager. Eventually, he was
placed in charge of its various branches in Metro Bacolod
City and Negros Occidental. To ensure a profitable sale of
its pharmaceutical products, he performed various
functions, such as visiting hospitals, pharmacies,
drugstores and physicians concerned; preparing and
submitting his pre-dated itinerary; and submitting periodic
reports of his daily call visits, monthly itinerary, and
weekly locator and incurred expenses.
Petitioners employment records show that respondent
company, on various dates, reprimanded and suspended
him for habitually neglecting to submit his periodic reports.
On November 28, 1994, respondent company sent
petitioner a notice reprimanding him for submitting late
his weekly expense report. Again, on July 5, 1995, he was

late in submitting the same report, prompting respondent
company to suspend him for five (5) days. Still, petitioner
repeatedly incurred delay in submitting his daily call
reports dated October 16-20, 1995, October 23-27, 1995,
November 6-10, 1995, and November 13-17, 1995. He did
not submit his daily call reports for the period from
November 20 to 24, 1995. As a consequence, respondent
company sent petitioner another notice suspending him for
fifteen (15) days or from January 2 to 22, 1996.
Meantime, respondent company, after integrating its
pharmaceutical products with Lederle, a sister company,
conducted a nationwide on-the-job training of sales
personnel. With this development, petitioner was assigned
in charge of promoting four (4) Lederle pharmaceutical
products.
Subsequently, petitioner submitted to respondent
company a plan of action dated February 6, 1996 where he
committed to make an average of 18 daily calls to
physicians; submit promptly all periodic reports; and
ensure 95% territory program performance for every cycle.
70

However, petitioner failed to achieve the above objectives,

prompting respondent company to send him two (2)
separate notices dated February 20, 1996 and April 10,
1996, charging him with willful violation of company rules
and regulations and directing him to submit a written
explanation.
In his explanation, petitioner stated that he was
overworked and an object of reprisal by his immediate
supervisor.
On May 22, 1996, upon recommendation of a Review
Panel, respondent company terminated the services of
petitioner.
Aggrieved, petitioner, on June 21, 1996, filed with the
Regional Arbitration Branch No. VI at Bacolod City a
complaint against respondent company for illegal
suspension, illegal dismissal and payment of allowances,

other monetary benefits, damages and attorneys fees,
docketed as RAB Case No. 06-10267-96. Impleaded also as
party respondents were Filemon Verzano, Jr., petitioners
immediate supervisor, and Aurelio Mercado and Edgar
Epilepsia, corporate officers of respondent company.
On March 5, 1998, the Labor Arbiter rendered a
Decision holding that petitioner was illegally dismissed
from employment and ordering respondents company and
Verzano, jointly and severally, to pay him P991,157.90
representing his backwages, separation pay, car
reimbursement, damages and attorneys fees. The
dispositive portion of the Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered

against respondent company WYETH PHILS., INC. and respondent
FILEMON VERZANO, JR., ordering them to pay jointly and
severally, complainant ALAN D. GUSTILO, the following:
1. Backwages.................................................. P 676,162.64
2. Separation pay ........................................... 106,890.00
3. Car reimbursement.................................... 68,000.00
4. Moral damages........................................... 25,000.00
5. Exemplary damages................................... 25,000.00
6. Attorneys fees............................................ 90,105.26
Grand Total ............................................... P 991,157.90
71
VOL. 440, OCTOBER 4, 2004 71

Respondents are further directed to deposit the total amount of

NINE HUNDRED NINETY ONE THOUSAND ONE HUNDRED
FIFTY SEVEN PESOS and 90/100 (P991,157.90) with the Cashier,
this Arbitration Branch, within ten (10) days from receipt hereof,
for proper disposition.
SO ORDERED.
Respondents then appealed to the National Labor
Relations Commission (NLRC), Fourth Division at Cebu

City.
On August 13, 1999, the NLRC (Fourth Division)
promulgated a Decision affirming with modification the
Labor Arbiters Decision in the sense that respondent
company is ordered to reinstate petitioner, or in lieu of
reinstatement, to pay his separation benefits, thus:
WHEREFORE, premises considered, the appeal filed by

complainant is GRANTED and that of respondents is DENIED. The
Decision of Labor Arbiter Reynaldo J. Gulmatico dated March 5,
1998 is MODIFIED, to wit:
Respondents are ordered:
1. To reinstate complainant Alan Gustilo to his former position
without loss of seniority rights and other privileges and to pay his
full backwages, inclusive of allowances and other benefits, or their
monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement. If
reinstatement is no longer feasible, complainant may opt to receive
his separation pay equivalent to at least one month salary for every
year of service, in lieu of reinstatement.
2. To refund, jointly and severally, complainant in the amount of
P4,190.00; and
3. To pay 10% of the total monetary award as attorneys fees.
SO ORDERED.
Respondents filed their motion for reconsideration but was

denied by the NLRC in a Resolution dated December 28,
1999.
As a consequence, respondents filed with the Court of
Appeals a petition for certiorari with prayer for issuance of
a
72

temporary restraining order and a writ of preliminary

injunction.
On January 24, 2001, the Appellate Court rendered a
Decision reversing the NLRCs Decision and dismissing
petitioners complaint for illegal dismissal, but awarding

him separation pay considering the mitigating factors of
length of service, the loyalty awards he received, and
respondent Verzanos grudge against him.
The Court of Appeals held:
Respondent Gustilo cannot deny the numerous violations of

company rules during his employment with Wyeth. Gustilos 201
file reveal the following:
1. On February 2, 1993, he was suspended for falsifying,

tampering and/or altering the gasoline receipt (Annex 12,
Wyeths Position Paper, Rollo, p. 142).
2. On June 28, 1993, he was warned for false reporting of his
trade outlet calls (Annex 13, Wyeths Position Paper, Rollo,
p. 143).
3. On September 8, 1993, he was guilty of unauthorized
availment of sick leaves, emergency leaves, vacation leaves
and unauthorized absences (Annex 14, Wyeths Position
Paper, Rollo, p. 144).
4. On November 28, 1994, he was cited for his repeated delay
in submitting his expense reports (Annex 14, Wyeths
Position Paper, Rollo, p. 132).
5. On July 10, 1995, he was cited for failure to submit his
expense report on time (Annex 5, Wyeths Position Paper,
Rollo, p. 133).
6. On September 26, 1995, he was charged with breach of the
rule on submission of required reports (Annex 8, Wyeths
Position Paper, Rollo, p. 136).
7. On November 28, 1995, he was again cited for unauthorized
absence on October 19, 1995 and other violations of
company rules as contained in a letter of the same date
(Annex 9, Wyeths Position Paper, Rollo, p. 137).
From 1993 up to 1995, respondent has repeatedly guaranteed

not to repeat transgressing company rules under pain of termina-
73
VOL. 440, OCTOBER 4, 2004 73

tion, but to no avail (Letter dated January 16, 1993; Rollo, p. 141;
Internal Memo dated February 1, 1993; Rollo, p. 142; Internal
Memo dated July 11, 1995; Rollo, p. 134; Plan of Action dated
February 6, 1996; Rollo, p. 147). It has become clear that
respondent Gustilo is a habitual offender whose numerous
contraventions of company rules has left Wyeth with no
choice but to terminate him based on Article 282 of the
Labor Code, gross and habitual neglect by the employee of
his duties, being a valid cause for termination.
While dismissal is proper, the Court however considers
the length of service of respondent Gustilo with Wyeth, the
loyalty awards he received and the grudge of petitioner
Verzano, Jr. as mitigating factors. The Court is inclined to
reinstate respondent Gustilo to his former position without
backwages and other benefits. However in view of the
strained relationship between respondent Gustilo and
petitioner Verzano, Jr., the Court rules to award separation
pay to respondent Gustilo in the amount of P106,890.00.
In view of our finding that there are valid causes for dismissal, it
follows that the award for payment of backwages, damages and
attorneys fees has to be recalled for want of basis.
Being uncontested, the refund of car expenses in the amount of
P4,190.00 to respondent Gustilo and payment of P68,000.00
representing the difference between the KIA car, the supposed car
and the NISSAN LEC have to be maintained.
In view of our finding that there was a valid dismissal,
petitioners Aurello Mercado and Edgar Epilepsia, as a consequence,
cannot be held personally liable to respondent Gustilo. Even
assuming ex grati argumenti that termination is illegal, corporate
officers like petitioners Mercado and Epilepsia are mere agents of
Wyeth and acts done in good faith and in representation or on
behalf of said company and within the scope of their authority
cannot give rise to any liability on their part as said acts are
considered corporate acts.
xxx
WHEREFORE, the subject Decision and Resolution,
promulgated on August 13, 1999 and December 28, 1999,
respectively, by respondent National Labor Relations Commission
are SET ASIDE and REVERSED and a new judgment is rendered,
as follows:
74

1. The Complaint for illegal dismissal against petitioners

Wyeth Philippines, Inc., Aurelio Mercado and Edgar
Epilepsia is dismissed for lack of merit;
2. Petitioner Wyeth Philippines, Inc. is ordered to pay
respondent Alan Gustilo P106,890.00 as separation pay;
3. Wyeth Philippines, Inc. is ordered to pay respondent Gustilo
P68,000.00 representing the difference between the prices of
the supposed car, KIA and the NISSAN LEC, and P4,190.00
equivalent to the cost of one piece of tire, headlight and tire
wrench.
SO ORDERED.
On February 16, 2001, petitioner filed a motion for

reconsideration, but was denied by the Appellate Court in a
Resolution dated August 10, 2001.
Hence, this petition for review on certiorari.
Petitioner, in the present petition, contends that he was
illegally dismissed from the service by respondent company.
Hence, he should be reinstated and paid his full backwages
and other benefits and privileges. 3
In Philippine Journalists, Inc. vs. Mosqueda, we
reiterated the well-established rule that findings of fact by
the Court of Appeals are conclusive on the parties and are
not reviewable by this Court, x x x. The rationale behind
this doctrine is that review of the findings of fact by the
Court of Appeals is not a function that the Supreme Court
normally undertakes.
Here, the Court of Appeals unequivocally ruled that
Gustilo (herein petitioner) is a habitual offender whose
numerous contraventions of company rules has left
Wyeth (herein respondent) with no choice but to terminate
his services x x x.
Evidently, there is no cogent reason why we should not
accord deference and finality to the Appellate Courts
factual
_______________
3 G.R. No. 141430, May 7, 2004, 428 SCRA 369, citing Nokom vs.
National Labor Relations Commission, 336 SCRA 97 (2000).
75
VOL. 440, OCTOBER 4, 2004 75

findings which are supported by substantial evidence as

shown by the records.
In Family
4
Planning Organization of the Philippines, Inc.
vs. NLRC we held:
It is the employers prerogative to prescribe reasonable rules and

regulations necessary or proper for the conduct of its business or
concern, to provide certain disciplinary measures to implement said
rules and to assure that the same be complied with. At the same
time, it is one of the fundamental duties of the employee to yield
obedience to all reasonable rules, orders, and instructions of the
employer, and willful or intentional disobedience thereof, as a
general rule, justifies rescission of the contract of service and the
preemptory dismissal of the employee.
Records show the various violations of respondent

companys rules and regulations committed by petitioner.
His dismissal from the service is, therefore, in order.
Indeed,
5
in Piedad vs. Lanao del Norte Electric Cooperative,
Inc., we ruled that a series of irregularities when put
together may constitute serious misconduct, 6
which under
Article 282 of the Labor Code, as amended, is a just cause
for dismissal.
_______________
4 G.R. No. 75907, March 23, 1992, 207 SCRA 415, 421.
5 G.R. No. L-73735, August 31, 1987, 153 SCRA 500, 509, citing
National Service Corporation vs. Leogardo, Jr., 130 SCRA 502 (1984).
6 ART. 282. Termination by employer.An employer may terminate an
employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the

lawful orders of his employer or representative in connection with
his work;
(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in
him by his employer or duly authorized representative;
76

But the Court of Appeals still awarded him separation pay

of P106,890.00 by reason of several mitigating factors
mentioned in its assailed Decision. The issue for our
determination now is whether he is entitled to such an
award.
The rule embodied in the Omnibus Rules Implementing
the Labor Code is that a person dismissed for7 cause as
defined therein is not entitled to8 separation pay. However,
in PLDT vs. NLRC and Abucay, we held:
x x x henceforth, separation pay shall be allowed as a

measure of social justice only in those instances where the
employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character. Where
the reason for the valid dismissal is, x x x an offense involving
moral turpitude x x x, the employer may not be required to give the
dismissed employee separation pay, or financial assistance, or
whatever other name it is called, on the ground of social justice.
Similarly, in Telefunken Semiconductors

9
Employees
UnionFFW vs. Court of Appeals, we ruled:
The same view holds with respect to the award of financial

assistance or separation pay. The assumption for granting financial
assistance or separation pay, which is, that there is an illegally
dismissed employee and that illegally dismissed employee would
otherwise have been entitled to reinstatement, is not present in the
case at bench. Here, the striking workers have been validly
dismissed Where the employees dismissal was for a just cause, it
would be neither fair nor just to allow the employee to recover
something he has not earned or could not have earned. This being so,
there can be
_______________
(d) Commission of a crime or offense by the employee against the person of

his employer or any immediate member of his family or his duly
authorized representative; and
(e) Other causes analogous to the foregoing.
7 Section 7, Rule I, Book VI of the Omnibus Rules Implementing the Labor

Code.
8 G.R. No. L-80609, August 23, 1988, 164 SCRA 671, 682.
9 G.R. Nos. 143013-14, December 18, 2000, 348 SCRA 565, 590.
77
VOL. 440, OCTOBER 4, 2004 77

no award of backwages, for it must be pointed out that while

backwages are granted on the basis of equity for earnings which a
worker or employee has lost due to his illegal dismissal, where
private respondents dismissal is for just cause, as in the case herein,
there is no factual or legal basis to order the payment of backwages;
otherwise, private respondent would be unjustly enriching herself at
the expense of petitioners. (Cathedral School of Technology vs.
National Labor Relations Commission, 214 SCRA 551).
Consequently, granting financial assistance to the strikers is clearly
a specious inconsistency (supra). We are of course aware that
financial assistance may be allowed as a measure of social justice in
exceptional circumstances and as an equitable concession. We are
likewise mindful that financial assistance is allowed only in those
instances where the employee is validly dismissed for causes other
than serious misconduct or those reflecting on his moral character
(Zenco Sales, Inc. vs. National Labor Relations Commission, 234
SCRA 689). x x x.
In the case at bar, we find no exceptional circumstances to

warrant the grant of financial assistance or separation pay
to petitioner. It bears stressing that petitioner did not
only violate company disciplinary rules and
regulations. As found by the Court of Appeals, he
falsified his employment application form by not
stating therein that he is the nephew of Mr. Danao,
respondent Wyeths Nutritional Territory Manager.
Also, on February 2, 1993, he was suspended for

falsifying a gasoline receipt. On June 28, 1993, he was
warned for submitting a false report of his trade
outlet calls. On September 8, 1993, he was found
guilty of unauthorized availment of sick, vacation
and emergency leaves. These infractions manifest
his slack of moral principle. In simple term, he is
dishonest.
Neither can petitioner find reliance on the policy of
social justice. As aptly held by this Court in the same case
of Philippine
10
Long Distance Telephone vs. NLRC and
Abucay, [T]hose who invoke social justice may do so only
if their
_______________
10 Supra.
78

hands are clean and their motives blameless x x x. Here,

petitioner failed to measure up to such requirement.
In sum, we find that petitioner was legally dismissed
from employment and is, therefore, not entitled to
reinstatement or an award of separation pay or other
benefits. Unfortunately, respondent company did not
interpose an appeal to this Court. Hence, no affirmative
relief can be extended to it. A party in a case who11did not
appeal is not entitled to any affirmative relief. Thus,
respondent company has to comply with the Appellate
Courts mandate to grant petitioner his separation pay.
WHEREFORE, the petition is DENIED. Costs against
petitioner.
SO ORDERED.
Panganiban (Chairman) and Corona, JJ., concur.

Carpio-Morales, J., On Leave.
Petition denied.
Note.A terminated employees receipt of his

separation pay and other monetary benefits does not
preclude reinstatement or full benefits under the law,
should reinstatement be no longer possible. (Atlas Farms,
Inc. vs. National Labor Relations Commission, 392 SCRA
128 [2002])
o0o
_______________
11 See Alauya, Jr. vs. Commission on Elections, G.R. Nos. 152151-52,

January 22, 2003, 395 SCRA 742, 752-753, citing Pulp and Paper, Inc. vs.
National Labor Relations Commission, 279 SCRA 408 (1997); and China
Banking Corporation vs. National Labor Relations Commission, 260
SCRA 782 (1996).
79
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SUPREME COURT REPORTS ANNOTATED VOLUME 440 24/11/2017, 10)17 AM

VOL. 440, OCTOBER 4, 2004 67

ALAN D. GUSTILO, petitioner, vs. WYETH

Labor Law; Employment; Management Prerogative; It is the

and as an equitable concession.The assumption for granting

68 SUPREME COURT REPORTS ANNOTATED

Gustilo vs. Wyeth Philippines, Inc.

be neither fair nor just to allow the employee to recover something he

PETITION for review on certiorari of the decision and

The facts are stated in the opinion of the Court.

At bar is a petition for review on certiorari under Rule 45 of

1 Annex N of the Petition, Rollo at pp. 591-614.

VOL. 440, OCTOBER 4, 2004 69

The facts as borne by the records are:

his weekly expense report. Again, on July 5, 1995, he was

70 SUPREME COURT REPORTS ANNOTATED

However, petitioner failed to achieve the above objectives,

suspension, illegal dismissal and payment of allowances,

WHEREFORE, premises considered, judgment is hereby rendered

VOL. 440, OCTOBER 4, 2004 71

Respondents are further directed to deposit the total amount of

Respondents then appealed to the National Labor

Relations Commission (NLRC), Fourth Division at Cebu

WHEREFORE, premises considered, the appeal filed by

Respondents filed their motion for reconsideration but was

72 SUPREME COURT REPORTS ANNOTATED

temporary restraining order and a writ of preliminary

petitioners complaint for illegal dismissal, but awarding

Respondent Gustilo cannot deny the numerous violations of

1. On February 2, 1993, he was suspended for falsifying,

From 1993 up to 1995, respondent has repeatedly guaranteed

VOL. 440, OCTOBER 4, 2004 73

74 SUPREME COURT REPORTS ANNOTATED

1. The Complaint for illegal dismissal against petitioners

On February 16, 2001, petitioner filed a motion for

VOL. 440, OCTOBER 4, 2004 75

findings which are supported by substantial evidence as

It is the employers prerogative to prescribe reasonable rules and

Records show the various violations of respondent

(a) Serious misconduct or willful disobedience by the employee of the

(b) Gross and habitual neglect by the employee of his duties;

76 SUPREME COURT REPORTS ANNOTATED

But the Court of Appeals still awarded him separation pay

x x x henceforth, separation pay shall be allowed as a

Similarly, in Telefunken Semiconductors

The same view holds with respect to the award of financial

(d) Commission of a crime or offense by the employee against the person of

7 Section 7, Rule I, Book VI of the Omnibus Rules Implementing the Labor

VOL. 440, OCTOBER 4, 2004 77

no award of backwages, for it must be pointed out that while

In the case at bar, we find no exceptional circumstances to

Also, on February 2, 1993, he was suspended for

78 SUPREME COURT REPORTS ANNOTATED

hands are clean and their motives blameless x x x. Here,

Panganiban (Chairman) and Corona, JJ., concur.

Note.A terminated employees receipt of his

11 See Alauya, Jr. vs. Commission on Elections, G.R. Nos. 152151-52,

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