SECOND DIVISION It is a standard operating procedure of petitioner-company to subject all its

G.R. No. 164016 March 15, 2010

employees to reasonable search of their belongings upon leaving the company
premises. On October 19, 1998, the guard on duty found six Reno canned goods
RENO FOODS, INC., and/or VICENTE KHU, Petitioners, wrapped in nylon leggings inside Capors fabric clutch bag. The only other contents
Vs.
of the bag were money bills and a small plastic medicine container.
Nagkakaisang Lakas ng Manggagawa (NLM) - KATIPUNAN on behalf of its
member, NENITA CAPOR, Respondent.
Petitioners accorded Capor several opportunities to explain her side, often with the
assistance of the union officers
DECISION
of Nagkakaisang Lakas ng Manggagawa (NLM) Katipunan. In fact, after
petitioners sent a Notice of Termination to Capor, she was given yet another
DEL CASTILLO, J.: opportunity for reconsideration through a labor-management grievance conference
held on November 17, 1999. Unfortunately, petitioners did not find reason to
There is no legal or equitable justification for awarding financial assistance to an change its earlier decision to terminate Capors employment with the company.
employee who was dismissed for stealing company property. Social justice and
equity are not magical formulas to erase the unjust acts committed by the employee On December 8, 1998, petitioners filed a complaint-affidavit against Capor for
against his employer.While compassion for the poor is desirable, it is not meant to qualified theft in the Office of the City Prosecutor, Malabon-
coddle those who are unworthy of such consideration. Navotas Substation. On April 5, 1999, a Resolution[3] was issued finding probable
This Petition for Review on Certiorari[1] assails the June 3, 2004 cause for the crime charged. Consequently, an Information was filed
Decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 76789 which denied against Capor docketed as Criminal Case No. 207-58-MN.
the petition for certiorari filed by the petitioners and affirmed the award of financial
assistance to respondent Nenita Capor. Meanwhile, the Nagkakaisang Lakas ng Manggagawa (NLM) Katipunan filed on
behalf of Capor a complaint[4] for illegal dismissal and money claims against
Factual Antecedents petitioners with the Head Arbitration Office of the National Labor Relations
Commission (NLRC) for the National Capital Region. The complaint prayed
Petitioner Reno Foods, Inc. (Reno Foods) is a manufacturer of canned meat products that Capor be paid her full backwages as well as moral and exemplary
of which Vicente Khu is the president and is being sued in that damages. The complaint was docketed as NLRC NCR Case No. 00-01-00183-99.
capacity. Respondent Nenita Capor (Capor) was an employee of Reno Foods until
her dismissal on October 27, 1998. Ruling of the Labor Arbiter
In the proceedings before the Labor Arbiter, Capor alleged that she was unaware assistance in the form of separation pay equivalent to one-half
month pay for every year of service. In all other respects the
that her clutch bag contained the pilfered canned products. She claimed that decision stands affirmed. All other claims of the complainant are
petitioners might have planted the evidence against her so it could avoid payment of dismissed for lack of merit.[8]
her retirement benefits, as she was set to retire in about a years time.
Both parties moved for a reconsideration of the NLRC Decision. Petitioners asked
After the submission of the parties respective position papers, the Labor Arbiter that the award of financial assistance be deleted, while Capor asked for a finding of
rendered his Decision[5] dated November 16, 1999 finding Capor guilty of serious illegal dismissal and for reinstatement with full backwages.[9]
misconduct which is a just cause for termination.
On February 28, 2003, the NLRC issued its Resolution[10] denying both motions for
The Labor Arbiter noted that Capor was caught trying to sneak out six cans reconsideration for lack of merit.
of Reno products without authority from the company. Under Article 232 of the
Labor Code, an employer may terminate the services of an employee for just cause, Ruling of the Court of Appeals
such as serious misconduct. In this case, the Labor Arbiter found that theft of
company property is tantamount to serious misconduct; as such, Capor is not Aggrieved, petitioners filed a Petition for Certiorari[11] before the CA imputing
entitled to reinstatement and backwages, as well as moral and exemplary damages. grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
the NLRC for awarding financial assistance to Capor.
Moreover, the Labor Arbiter ruled that consistent with prevailing jurisprudence, an
employee who commits theft of company property may be validly terminated and Citing Philippine Long Distance Telephone Company v. National Labor Relations
consequently, the said employee is not entitled to separation pay.[6] Commission,[12] petitioners argued that theft of company property is a form of
serious misconduct under Article 282(a) of the Labor Code for which no financial
assistance in the form of separation pay should be allowed.

Ruling of the National Labor Relations Commission Unimpressed, the appellate court affirmed the NLRCs award of financial
assistance to Capor. It stressed that the laborers welfare should be the primordial and
On appeal, the NLRC affirmed the factual findings and monetary awards of paramount consideration when carrying out and interpreting provisions of the Labor
the Labor Arbiter but added an award of financial assistance. The decretal portion Code. It explained that the mandate laid down in Philippine Long Distance
of the September 20, 2002 Decision[7] reads: Telephone Company v. National Labor Relations Commission[13] was not absolute,
WHEREFORE, premises considered, the decision under but merely directory.
review is hereby MODIFIED by granting an award of financial
Hence, this petition. On the other hand, petitioners argue that the dismissal of a criminal action should
not carry a corresponding dismissal of the labor action since a criminal conviction
Issue is unnecessary in warranting a valid dismissal for employment.

The issue before us is whether the NLRC committed grave abuse of Petitioners further maintain that the ruling in Philippine Long Distance Telephone
discretion amounting to lack or excess of jurisdiction in granting financial assistance Company v. National Labor Relations Commission[15] regarding the disallowance
to an employee who was validly dismissed for theft of company property. of separation pay for those dismissed due to serious misconduct or moral turpitude
is mandatory.Petitioners likewise argue that in Zenco Sales, Inc. v. National Labor
Our Ruling Relations Commission,[16] the Supreme Court found grave abuse of discretion on the
part of the NLRC when it ignored the principles laid down in the Philippine Long
We grant the petition. Distance Telephone Company v. National Labor Relations Commission. Thus,
petitioners pray for the reversal of the CA Decision and reinstatement of the Labor
Conviction in a criminal case is Arbiters Decision dated November 16, 1999.
not necessary to find just cause
for termination of employment.
Capor was acquitted in Criminal Case No. 207-58-MN based on reasonable
doubt. In his Decision, the trial judge entertained doubts regarding the guilt
On the date that the appellate court issued its Decision, Capor filed a of Capor because of two circumstances: (1) an ensuing labor dispute (though it
Manifestation[14] informing the CA of her acquittal in the charge of qualified theft. omitted to state the parties involved), and (2) the upcoming retirement of Capor. The
The dispositive portion of said Decision reads: trial judge made room for the possibility that these circumstances could have
motivated petitioners to plant evidence against Capor so as to avoid paying her
WHEREFORE, premises considered, judgment is hereby rendered
acquitting Nenita Capor of the crime charged against her in this retirement benefits. The trial court did not categorically rule that the acts imputed
case on the ground of reasonable doubt with costs de oficio. to Capor did not occur. It did not find petitioners version of the event as fabricated,
baseless, or unreliable. It merely acknowledged that seeds of doubt
Capor thus claims that her acquittal in the criminal case proves that have been planted in the jurors mind which, in a criminal case, is enough to acquit
petitioners failed to present substantial evidence to justify her termination from the an accused based on reasonable doubt. The pertinent portion of the trial courts
company. She therefore asks for a finding of illegal dismissal and an award of Decision reads:
separation pay equivalent to one month pay for every year of service.
During the cross examination of the accused, she was
confronted with a document that must be related to a labor
dispute. x x x The Court noted very clearly from the transcript of
 stenographic notes that it must have been submitted to the Criminal cases require proof beyond reasonable doubt while labor
NLRC. This is indicative of a labor dispute which, although not
claimed directly by the accused, could be one of the reasons why disputes require only substantial evidence, which means such relevant evidence as
she insinuated that evidence was planted against her in order to a
deprive her of the substantial benefits she will be receiving when
she retires from the company. Incidentally, this document was
reasonable mind might accept as adequate to justify a conclusion.[20] The evidence
never included in the written offer of evidence of the prosecution.
in this case was reviewed by the appellate court and two labor tribunals endowed
Doubt has, therefore, crept into the mind of the Court with expertise on the matter the Labor Arbiter and the NLRC. They all found
concerning the guilt of accused Nenita Capor which in this
substantial evidence to conclude that Capor had been validly dismissed for
jurisdiction is mandated to be resolved in favor of her innocence.
dishonesty or serious misconduct. It is settled that factual findings of quasi-judicial
Pertinent to the foregoing doubt being entertained by this agencies are generally accorded respect and finality so long as these are supported
Court, the Court of Appeals citing People v. Bacus, G.R. No. by substantial evidence. In the instant case, we find no compelling reason to doubt
60388, November 21, 1991: the phrase beyond reasonable doubt
means not a single iota of doubt remains present in the mind of a the common findings of the three reviewing bodies.
reasonable and unprejudiced man that a person is guilty of a
crime. Where doubt exists, even if only a shred, the Court must and The award of separation pay is
should set the accused free. (People v. Felix, CA-G.R. No. 10871, not warranted under the law and
November 24, 1992) jurisprudence.

WHEREFORE, premises considered, judgment is hereby

rendered acquitting accused Nenita Capor of the crime charged We find no justification for the award of separation pay to Capor. This award is a
against her in this case on the ground of reasonable doubt, with deviation from established law and jurisprudence. [21]
costs de oficio.
The law is clear. Separation pay is only warranted when the cause for termination is
SO ORDERED.[17]
not attributable to the employees fault, such as those provided in Articles 283 and
284 of the Labor Code, as well as in cases of illegal dismissal in which reinstatement
In Nicolas v. National Labor Relations Commission,[18] we held that a
is no longer feasible.[22] It is not allowed when an employee is dismissed for just
criminal conviction is not necessary to find just cause for employment
cause,[23] such as serious misconduct.
termination. Otherwise stated, an employees acquittal in a criminal case, especially
one that is grounded on the existence of reasonable doubt, will not preclude a
Jurisprudence has classified theft of company property as a serious
determination in a labor case that he is guilty of acts inimical to the employers
misconduct and denied the award of separation pay to the erring employee.[24] We
interests.[19]
see no reason why the same should not be similarly applied in the case of Capor. She
attempted to steal the property of her long-time employer. For committing such awarding separation pay or financial assistance as the constitutional
policy to provide full protection to labor is not meant to be an
misconduct, she is definitely not entitled to an award of separation pay. instrument to oppress the employers. The commitment of the Court
It is true that there have been instances when the Court awarded financial assistance to the cause of labor should not embarrass us from sustaining the
to employees who were terminated for just causes, on grounds of equity and social employers when they are right, as here. In fine, we should be more
cautious in awarding financial assistance to the undeserving and
justice. The same, however, has been curbed and rationalized in Philippine Long
those who are unworthy of the liberality of the law.
Distance Telephone Company v. National Labor Relations Commission.[25] In that
case, we recognized the harsh realities faced by employees that forced them, despite
We are not persuaded by Capors argument that despite the finding of theft, she
their good intentions, to violate company policies, for which the employer can
should still be granted separation pay in light of her long years of service with
rightfully terminate their employment. For these instances, the award of financial
petitioners. We held in Central Pangasinan Electric Cooperative, Inc. v. National
assistance was allowed. But, in clear and unmistakable language, we also held that
Labor Relations Commission[28] that:
the award of financial assistance shall not be given to validly terminated employees,
whose offenses are iniquitous or reflective of some depravity in their moral Although long years of service might generally be considered for
the award of separation benefits or some form of financial
character. When the employee commits an act of dishonesty, depravity, or iniquity,
assistance to mitigate the effects of termination, this case is not the
the grant of financial assistance is misplaced compassion. It is tantamount not only appropriate instance for generosity x x x. The fact that private
to condoning a patently illegal or dishonest act, but an endorsement thereof. It will respondent served petitioner for more than twenty years with no
be an insult to all the laborers who, despite their economic difficulties, strive to negative record prior to his dismissal, in our view of this case, does
not call for such award of benefits, since his violation reflects a
maintain good values and moral conduct. regrettable lack of loyalty and worse, betrayal of the company. If an
In fact, in the recent case of Toyota Motors Philippines, Corp. Workers Association employees length of service is to be regarded as justification for
(TMPCWA) v. National Labor Relations Commission,[26] we ruled that separation moderating the penalty of dismissal, such gesture will actually
become a prize for disloyalty, distorting the meaning of social
pay shall not be granted to all employees who are dismissed on any of the four justice and undermining the efforts of labor to clean its ranks of
grounds provided in Article 282 of the Labor Code. Such ruling was reiterated and undesirables.
further explained in Central Philippines Bandag Retreaders, Inc. v. Diasnes:[27]
Indeed, length of service and a previously clean employment record cannot simply
To reiterate our ruling in Toyota, labor adjudicatory officials and
the CA must demur the award of separation pay based on social erase the gravity of the betrayal exhibited by a malfeasant employee.[29] Length of
justice when an employees dismissal is based on serious service is not a bargaining chip that can simply be stacked against the
misconduct or willful disobedience; gross and habitual neglect of employer. After all, an employer-employee relationship is symbiotic where both
duty; fraud or willful breach of trust; or commission of a crime
against the person of the employer or his immediate family grounds parties benefit from mutual loyalty and dedicated service. If an employer had treated
under Art. 282 of the Labor Code that sanction dismissals of his employee well, has accorded him fairness and adequate compensation as
employees. They must be most judicious and circumspect in
determined by law, it is only fair to expect a long-time employee to return such
fairness with at least some respect and honesty. Thus, it may be said that betrayal by WHEREFORE, the petition is GRANTED. The assailed June 3, 2004 Decision
a long-time employee is more insulting and odious for a fair employer. As stated in of the Court of Appeals in CA-G.R. SP No. 76789 affirming the September 20, 2002
another case: Decision of the National Labor Relations Commission is ANNULLED and SET
ASIDE. The November 16, 1999 Decision of the Labor Arbiter
x x x The fact that [the employer] did not suffer pecuniary damage
will not obliterate respondents betrayal of trust and confidence is REINSTATED and AFFIRMED.
reposed by petitioner. Neither would his length of service justify his
dishonesty or mitigate his liability. His length of service even
aggravates his offense. He should have been more loyal SO ORDERED.
to petitioner company from which he derived his family bread and
butter for seventeen years.[30]
While we sympathize with Capors plight, being of retirement age and having served
petitioners for 39 years, we cannot award any financial assistance in her favor
because it is not only against the law but also a retrogressive public policy. We have
already explained the folly of granting financial assistance in the guise of
compassion in the following pronouncements:

x x x Certainly, a dishonest employee cannot be rewarded with

separation pay or any financial benefit after his culpability is
established in two decisions by competent labor tribunals, which
decisions appear to be well-supported by evidence. To hold
otherwise, even in the name of compassion, would be to send a
wrong signal not only that crime pays but also that one can enrich
himself at the expense of another in the name of social justice. And
courts as well as quasi-judicial entities will be overrun by petitioners
mouthing dubious pleas for misplaced social justice. Indeed, before
there can be an occasion for compassion and mercy, there must first
be justice for all. Otherwise, employees will be encouraged to steal
and misappropriate in the expectation that eventually, in the name
of social justice and compassion, they will not be penalized but
instead financially rewarded. Verily, a contrary holding will merely
encourage lawlessness, dishonesty, and duplicity. These are not the
values that society cherishes; these are the habits that it abhors.[31]
FIRST DIVISION complainant. In accordance wit its rules, a mere suspension
should issue and that suspension should not last for more than
G.R. No. 74187 January 28, 1988 thirty (30) days. Effective August 13, 1982, the suspension
lapses and complainant becomes entitled to backwages and
STANFORD MICROSYSTEMS, INC., petitioner, other fringe benefits thereafter. The computation of said
vs. monetary award is hereby ordered until complainant is finally
NATIONAL LABOR RELATIONS COMMISSION and HENRY reinstated.
TRINIO, respondents.
Stanford seasonably brought the case to the National labor Relations
Commission on appeal The Commission however declined to sustain Stanford's
contention that the Arbiter had committed grave abuse of discretion in ruling that
it had "exceeded its disciplinary authority when it terminated ... (Trinio's)
NARVASA, J.:
services" notwithstanding said Arbiter's own findings that Trinio had indeed
This special civil action of certiorari concerns the appropriateness or commensurateness of the penalty imposed
committed serious misconduct and violations of company rules and regulations,
by an employer on an employee found guilty, after due investigation, of breaches of company regulations. including what he characterized as an act "repulsive to morality." By judgment
dated March 10, 1986, the Commission affirmed the Arbiter's direction for
Henry Trinio was employed by Stanford Microsystems, Inc. as "security Trinio's reinstatement but modified the award of back wages by limiting the same
coordinator," to exercise supervision over all guards assigned to secure the to two(2) years, without deduction or qualification of any kind.
latter's premises by an agency with which Stanford had a security agreement.
In the special civil action of certiorari instituted by it in this Court, Stanford
He was dismissed from employment on July 12, 1982, after an investigation maintains that the NLRC was guilty of grave abuse of discretion in affirming the
conducted by Stanford established that he had committed serious breaches of decision of the Labor Arbiter in light of the latter's patent errors —
company rules in the night of July 4, 1982. It appears that on that night, at about
11 o'clock, Trinio allowed two female security guards, Vicky Magaling and (1) in ordering reinstatement of Trinio despite his factual finding that Trinio was
Excelsa Mina to come inside the Security Office; he caused the introduction of guilty of serious misconduct and other infringements of Company rules and
intoxicating liquor into the premises of which he imbibed; he invited and allowed regulations; and
a guard on duty, Marcelino Medrana, to partake of the liquor when the latter
entered the office; and thereafter he, a married man, had sexual intercourse with (2) in holding the Company to be bound by its own rules and regulations
Guard Mina, a married woman, on top of the desk of the Security Head, while prescribing penalties corresponding to specific offenses as to estopped to
Magaling pretended to be asleep during all the time that the lustful act was discharge an employee on grounds provided in the Labor Code.
commenced and consummated.
There is merit in the petition, warranting its concession. The writ
Professing innocence, Trinio lost no time in haling his employer before the of certiorari prayed for will issue.
Ministry of Labor and Employment. He filed a complaint for unfair labor practice
and illegal dismissal against Stanford on July 16, 1982. After due proceedings, That there is sufficient evidence proving the acts ascribed to Trinio is not
judgment was rendered thereon by the Labor Arbiter on September 30, 1983, seriously in dispute. Trinio did violate his employer's rules: he allowed women
as follows: into the Security office; he allowed liquor to be brought in; he drank that liquor
and invited another security guard to drink it, too; he and his lady friend, both
IN VIEW OF THE FOREGOING, the charge of unfair labor being married but no to each other, satisfied their carnal passion in a business
practice is hereby dismissed for lack of factual basis. As regards office and the known presence of another person. This last act was, to be sure,
the charge of illegal dismissal, respondent exceeded its one "repulsive to morality," as the Labor Arbiter has put it.
disciplinary authority when it terminated the services of
The issue does not theretofore lie in the facts, or the sufficiency of the evidence in any way. No employer may rationally be expected to continue in employment
in proof thereof. The issue posed, rather, is whether or not under the established a person whose lack of morals, respect and loyalty to his employer, regard for
facts, the penalty of dismissal is merited, instead of merely that his employer's rules, and appreciation of the dignity and responsibility of his
of suspension for not more than 30 days — which is what the company rules by office, has so plainly and completely been bared.
their literal terms indicate. The respondent Commission, in the Comment
submitted in its behalf by the Solicitor General, concedes that the formulation That there should be concern, sympathy, and solicitude for the rights and
and promulgation by an employer of rules of conduct and discipline for its welfare of the working class, is meet and proper. That in controversies between
employees, inclusive of those deemed to constitute serious misconduct, cannot a laborer and his master, doubts reasonably arising from the evidence, or in the
and should not operate to altogether negate his prerogative and responsibility former's favor, is not an unreasonable or unfair rule. But that disregard of the
to determine and declare whether or not facts not explicitly set out in the rules employer's own rights and interests can be justified by that concern and
may and do constitute such serious misconduct as to justify the dismissal of the solicitude is unjust and unacceptable. 1
employee or the imposition of sanctions heavier than those specifically and
expressly prescribed. The concession is dictated by logic; otherwise, the WHEREFORE, the Decision of the National Labor Relations Commission dated
rules, literally applied, would result in absurdity: grave offenses, e.g., rape, March 10, 1986 and that of the Labor Arbiter dated September 30, 1983 are
would be penalized by mere suspension; this, despite the heavier penalty annulled and set aside, and the complaint of Henry Trinio against the petitioner
provided therefor by the Labor Code, or otherwise dictated by common sense. for unfair labor practice and illegal termination of employment, dismissed for lack
of factual and legal basis. The judgment is immediately executory, and no
But said public respondent would minimize the gravity of Trinio's acts, by motion for extension of time to file a motion for reconsideration thereof will be
pointing out that the latter was only seen to be kissing his lady friend while entertained.
embracing her tightly, and that there was no clear showing that he had been
drinking to excess, and hence, the commensurate penalty for such "first offense" Teehankee, C.J., Cruz, Paras * and Gancayco. JJ., concur.
is not separation from employment but suspension and forfeiture of backwages.
The public respondent theorizes that while it was in truth morality wrong for
Trinio to have done what he did, it was not sufficient cause for the company to
lose trust and confidence in him. Implicit in the argument is the acknowledgment
that if the facts were really as described by the employer's proofs and as found
by the Labor Arbiter the penalty of dismissal from the service would be otherwise
appropriate.

The evidence has been misread by public respondent. The evidence does
establish the commission by Trinio of the acts with which he was charged:
drinking liquor on company time in company premises; openly and deliberately
sanctioning breach of company rules by persons under his superintendence;
public performance of adulterous act of sexual intercourse on company time and
in company premises. Here was no mere tolerance or disregard of infringement
of company rules for the enforcement of which Trinio was particularly charged,
which would be bad enough. Here was an open invitation by him for others to
violate those rules, and a transgression even by him of those same rules in a
manner that could not but expose his personal depravity, and betray his
contempt and scorn of those rules as well as the lightness with which he held
the responsibility entrusted to him to protect his employer's premise, chattels,
interest, reputation and integrity. The offenses cannot be excused upon a plea
of their being "first offenses," or have not resulted in prejudice to the company
SECOND DIVISION assigned to an unfamiliar territory. Respondent concluded that his transfer might
be a way for his managers to dismiss him from employment. Respondent added
G.R. No. 172724 August 23, 2010 that he could not possibly accept his new assignment in Cagayan de Oro City
because he will be dislocated from his family; his wife runs an established
PHARMACIA and UPJOHN, INC. (now PFIZER PHILIPPINES, INC.), business in Bacolod City; his eleven- year-old daughter is studying in Bacolod
ASHLEY MORRIS, ALEDA CHU, JANE MONTILLA & FELICITO City; and his two-year-old son is under his and his wife’s direct care.
GARCIA, Petitioners,
vs. On January 10, 2000, Garcia wrote a letter6 to respondent denying his request
RICARDO P. ALBAYDA, JR., Respondent. to be reassigned to the Western Visayas area. Garcia explained that the factors
used in determining assignments of managers are to maximize business
DECISION opportunities and growth and development of personnel. Garcia stressed that
other people both reprensentatives and district sales managers have been
re-located in the past and in the year 2000 re-alignment.
PERALTA, J.:
On February 16, 2000, respondent wrote a letter7 to Aleda Chu (Chu),
Before this Court is a petition for review on certiorari,1 under Rule 45 of the Rules
Pharmacia’s National Sales and External Business Manager, reiterating his
of Court, seeking to set aside the November 30, 2005 Decision2 and May 5,
request to be reassigned to the Western Visayas area. Respondent alleged that
2006 Resolution3 of the Court of Appeals (CA), in CA-G.R. SP No. 00386.
during one conversation, Chu assured him that as long as he hits his sales target
by 100%, he would not be transferred. Respondent again speculated that the
The facts of the case are as follows: real reason behind his transfer was that it was petitioners’ way of terminating his
employment. Respondent harped that his transfer would compel him to lose his
Respondent Ricardo P. Albayda, Jr. (respondent) was an employee of Upjohn, free housing and his wife’s compensation of ₱50,000.00 from her business in
Inc. (Upjohn) in 1978 and continued working there until 1996 when a merger Bacolod City.
between Pharmacia and Upjohn was created. After the merger, respondent was
designated by petitioner Pharmacia and Upjohn (Pharmacia) as District Sales In a letter8 dated March 3, 2000, Chu said that she did not give any assurance
Manager assigned to District XI in the Western Visayas area. During the period or commitment to respondent that he would not be transferred as long as he
of his assignment, respondent settled in Bacolod City. achieved his 100% target for 1999. Chu explained to respondent that they are
moving him to Cagayan de Oro City, because of their need of respondent’s
Sometime on August 9, 1999, a district meeting was held in Makati City wherein expertise to build the business there. Chu added that the district performed
one of the topics discussed was the district territorial configuration for the new dismally in 1999 and, therefore, they were confident that under respondent’s
marketing and sales direction for the year 2000. leadership, he can implement new ways and develop the sales force to become
better and more productive. Moreover, since respondent has been already in
In December 1999, respondent received a Memorandum4 announcing the sales Bacolod and Iloilo for 22 years, Chu said that exposure to a different market
force structure for the year 2000. In the said memorandum, respondent was environment and new challenges will contribute to respondent’s development as
reassigned as District Sales Manager to District XII in the Northern Mindanao a manager. Finally, Chu stressed that the decision to transfer respondent was
area. One of the key areas covered in District XII is Cagayan de Oro City. purely a business decision.

In response to the memorandum, respondent wrote a letter5 dated December Respondent replied through a letter9 dated March 16, 2000. Respondent likened
27,1999 to Felicito M. Garcia (Garcia), Pharmacia’s Vice-President for Sales his transfer to Mindanao as a form of punishment as he alleged that even Police
and Marketing, questioning his transfer from District XI to District XII. Chief General Panfilo Lacson transferred erring and non-performing police
Respondent said that he has always been assigned to the Western Visayas area officers to Mindanao. Respondent argued that Chu failed to face and address
and that he felt that he could not improve the sales of products if he was
the issues he raised regarding the loss of his family income, the additional cost Montilla sent respondent another memorandum16 dated June 6, 2000, stating
of housing and other additional expenses he will incur in Mindanao. that it is in the best interest of the company for respondent to report to the Makati
office to assume his new area of assignment.
In a memorandum10 dated May 11, 2000, Jane B. Montilla (Montilla),
Pharmacia’s Human Resource Manager, notified respondent that since he has In a letter17 dated June 8, 2000, respondent told Montilla that he will be airing his
been on sick leave since January 5, 2000 up to the present, he had already grievance before the National Labor Relations Commission (NLRC).
consumed all his sick leave credits for the year 2000. Montilla stated that per
company policy, respondent would then be considered on indefinite sick leave In a memorandum18 dated June 15, 2000, Montilla stated that contrary to the
without pay. In another memorandum11 dated May 15, 2000, Montilla informed opinion of respondent, respondent is entitled to Relocation Benefits and
respondent of the clinic schedule of the company appointed doctor. Allowance pursuant to the company’s Benefits Manual. Montilla directed
respondent to report for work in Manila within 5 working days from receipt of the
In a letter12 dated May 17, 2000, respondent acknowledged his receipt of the memorandum.
letters from Montilla. Respondent informed Montilla that his doctors had already
declared him fit for work as of May 16, 2000. Respondent stated that he was In another memorandum19 dated June 26, 2000, Montilla stated that she had not
already ready to take on his regular assignment as District Sales Manager in heard from respondent since his June 8, 2000 letter and that he has not replied
Negros Occidental or in any district in the Western Visayas area. to their last memorandum dated June 15, 2000. Respondent was warned that
the same would be a final notice for him to report for work in Manila within 5
In a letter13 dated May 17, 2000, Chu expressed her disappointment on the way working days from receipt of the memo; otherwise, his services will be
respondent viewed their reason for moving his place of assignment. Chu was terminated on the basis of being absent without official leave (AWOL).
likewise disappointed with respondent’s opinion that with the movement, he be
given additional remuneration, when in fact, such was never done in the past On July 13, 2000, Montilla sent respondent a memorandum20 notifying him of
and never the practice in the industry and in the Philippines. Chu concluded that their decision to terminate his services after he repeatedly refused to report for
it appeared to her that respondent would not accept any reason for the work despite due notice, the pertinent portions of which read:
movement and that nothing is acceptable to him except a Western Visayas
assignment. Consequently, Chu referred the case to the Human Resource As I mentioned many times in our talks, you are in a Sales position for which
Department for appropriate action. you had signed up. Your employment contract actually states that you are willing
to be assigned anywhere else in the Philippines, wherever the company needs
Montilla met with respondent to discuss his situation. After the meeting, Montilla you sees you fit.
sent respondent a memorandum14wherein his request to continue his work
responsibilities in Negros Occidental or in any district in the Western Visayas Metro Manila is the biggest and most advanced market we have in the
area was denied as there was no vacant position in those areas. Montilla Philippines. It is where the success or failure of our business lies. It is, therefore,
stressed that the company needed respondent in Cagayan de Oro City, because the most competitive and significant area for sales. It is the most challenging
of his wealth of experience, talent and skills. Respondent, however, was also and most rewarding of all areas. Only the best field managers are given the
given an option to be assigned in Metro Manila as a position in the said territory opportunity to manage a territory in Metro Manila. This is why I chose Manila
had recently opened when Joven Rodriguez was transferred as Government over Cagayan de Oro for you in my letter dated June 6, 2000. And because you
Accounts and Special Projects Manager. Montilla gave respondent until June 2, had assured us that you were fit to work, after being on sick leave for about five
2000 to talk to his family and weigh the pros and cons of his decision on whether and a half months, I asked you to assume your new assignment in Metro Manila
to accept a post in Cagayan de Oro City or in Manila. before June 16, 2000.

In a letter15 dated May 31, 2000, respondent reiterated the concerns he raised Before June 16, 2000, you wrote us a letter advising us that you can not accept
in his previous letters. the new assignment in Manila. In response, we advised you that the assignment
in Manila is a business need and for said reason you were requested to report
for work within five working days from receipt of notice. However, you failed to WHEREFORE, premises considered, this petition is hereby given due course
comply. So we issued another memo dated June 26, 2000, instructing you to and the Resolution dated November 10, 2004 and the Decision dated July 26,
report for work and advising you that should you continue to fail to report for 2004 of the NLRC Fourth Division in NLRC Case No. V-000521-2000 (RAB
work, the company shall be constrained to terminate your employment. Case No. 06-08-10650-2000), are hereby REVERSED and SET ASIDE.
Accordingly, the case is REMANDED to the National Labor Relations
In view of the foregoing, we have no alternative but to terminate your services Commission, Regional Arbitration Branch No. VI, Bacolod City, for the proper
on the basis of absence without official leave (AWOL) and insubordination determination of the petitioner’s claims.
pursuant to Article 282 of the Labor Code of the Philippines, which shall be
effective on July 19, 2000.21 SO ORDERED.30

On August 14, 2000, respondent filed a Complaint22 with the NLRC, Regional Petitioners filed a Motion for Reconsideration, which was, however, denied by
Arbitration Branch No. VI, Bacolod City against Pharmacia, Chu, Montilla and the CA in a Resolution dated May 5, 2006.
Garcia for constructive dismissal. Also included in the complaint was Ashley
Morris, Pharmacia’s President. Since mandatory conciliation failed between the Hence, herein petition, with petitioner raising a lone assignment of error to wit:
parties, both sides were directed to submit their position papers.
WHETHER OR NOT THE COURT OF APPEALS (CEBU CITY) CAN REVERSE
On July 12, 2002, the Labor Arbiter (LA) rendered a Decision23 dismissing the OR SET ASIDE THE FACTUAL AND LEGAL FINDINGS OF THE NLRC WHICH
case, the dispositive portion of which reads: WAS BASED ON SUBSTANTIAL EVIDENCE WHEN THERE IS NO SHOWING
OF PALPABLE ERROR OR THAT THE FINDINGS OF FACTS OF THE LABOR
WHEREFORE, premises considered, the complaint against respondents in the ARBITER IS CONTRARY TO THAT OF THE NLRC.31
above-entitled case is DISMISSED for lack of merit.
The petition is meritorious.
SO ORDERED.24
As a general rule, this Court does not entertain factual issues. The scope of our
Respondent appealed to the NLRC. In a Decision25 dated July 26, 2004, the review in petitions filed under Rule 45 is limited to errors of law or
NLRC dismissed the appeal, the dispositive portion of which reads: jurisdiction.32 This Court leaves the evaluation of facts to the trial and appellate
courts which are better equipped for this task.
WHEREFORE, premises considered, the appeal of complainant is hereby
DISMISSED for lack of merit. The decision of the Labor Arbiter is AFFIRMED However, there are instances in which factual issues may be resolved by this
en toto. Court, to wit: (1) the conclusion is a finding grounded entirely on speculation,
surmise and conjecture; (2) the inference made is manifestly mistaken; (3) there
SO ORDERED.26 is grave abuse of discretion; (4) the judgment is based on a misapprehension of
facts; (5) the findings of fact are conflicting; (6) the CA goes beyond the issues
Respondent filed a Motion for Reconsideration,27 which was denied by the of the case, and its findings are contrary to the admissions of both appellant and
NLRC in a Resolution28 dated November 10, 2004. appellees; (7) the findings of fact of the CA are contrary to those of the trial
court; (8) said findings of fact are conclusions without citation of specific
evidence on which they are based; (9) the facts set forth in the petition, as well
Aggrieved, respondent filed a Petition for Certiorari29 before the CA.
as in the petitioner’s main and reply briefs, are not disputed by the respondent;
and (10) the findings of fact of the CA are premised on the supposed absence
On November 30, 2005, the CA rendered a Decision ruling in favor of of evidence and contradicted by the evidence on record.33
respondent, the dispositive portion of which reads:
In the present case, this Court is prompted to evaluate the findings of the LA, On respondent’s allegation that his family stands to lose income from his wife’s
the NLRC, and the CA which are diametrically opposed. business, the LA ruled:

Petitioners argue that the CA erred when it reversed the factual and legal The allegation of complainant that his income will be affected because his wife
findings of the NLRC which affirmed the decision of the LA. Petitioners contend who is doing business in Bacolod City and earns ₱50,000.00, if true, should not
that it is well established that factual findings of administrative agencies and be taken in consideration of his transfer. What is contemplated here is the
quasi-judicial bodies are accorded great respect and finality and are not to be diminution of the salary of the complainant but not his wife. Besides, even if
disturbed on appeal unless patently erroneous. complainant may accept his new assignment in Cagayan de Oro or in Metro
Manila, his wife may still continue to do her business in Bacolod City. Anyway,
After a judicious examination of the records herein, this Court sustains the Bacolod City and Manila is just one (1) hour travel by plane.37
findings of the LA and the NLRC which are more in accord with the facts and
law of the case. Lastly, the LA pointed out that in respondent’s contract of employment, he
agreed to be assigned to any work or workplace as may be determined by the
On petitioners’ exercise of management prerogative company whenever the operations require such assignment.

Jurisprudence recognizes the exercise of management prerogative to transfer The NLRC affirmed in toto the findings of the LA. The NLRC ruled that
or assign employees from one office or area of operation to another, provided petitioners’ restructuring move was a valid exercise of its management
there is no demotion in rank or diminution of salary, benefits, and other prerogative and authorized under the employment contract of respondent, to wit:
privileges, and the action is not motivated by discrimination, made in bad faith,
or effected as a form of punishment or demotion without sufficient cause.34 We do not see in the records any evidence to prove that the restructuring move
of respondent company was done with ill motives or with malice and bad faith
To determine the validity of the transfer of employees, the employer must show purposely to constructively terminate complainant’s employment. Such
that the transfer is not unreasonable, inconvenient, or prejudicial to the misinterpretation or misguided supposition by complainant is belied by the fact
employee; nor does it involve a demotion in rank or a diminution of his salaries, that respondent’s officers had in several communications officially sent to
privileges and other benefits. Should the employer fail to overcome this burden complainant, expressly recognized complainant’s expertise and capabilities as
of proof, the employee's transfer shall be tantamount to constructive dismissal.35 a top sales man and manager for which reason the respondent company needs
his services and skills to energize the low-performing areas in order to maximize
Both the LA and the NLRC ruled that the reassignment of respondent was a business opportunities and to afford complainant an opportunity for further
valid exercise of petitioners’ management prerogative. growth and development. Complainant persistently refused instead of taking this
opportunity as a challenge after all, the nature of employment of a sales man or
sales manager is that it is mobile or ambulant being always seeking for possible
The LA shared petitioners’ posture that the transfer of respondent was a valid
areas to market goods and services. He totally forgot the terms and conditions
exercise of a legitimate management prerogative to maximize business
in his employment contract, stated in part, thus:
opportunities, growth and development of personnel and that the expertise of
respondent was needed to build the company’s business in Cagayan de Oro
City which dismally performed in 1999.36 xxxx

In addition, the LA explained that the reassignment of respondent was not a You agree, during the period of employment, to be assigned to any work or
demotion as he will also be assigned as a District Sales Manager in Mindanao workplace for such period as may be determined by the company and whenever
or in Metro Manila and that the notice of his transfer did not indicate that his the operations thereof require such assignment.38
emoluments will be reduced. Moreover, the LA mentioned that respondent was
entitled to Relocation Benefits and Allowance in accordance with petitioners’ The rule in our jurisdiction is that findings of fact of the NLRC, affirming those of
Benefits Manual. the LA, are entitled to great weight and will not be disturbed if they are supported
by substantial evidence.39 Substantial evidence is an amount of relevant assessment and perception of its employee’s qualifications, aptitudes, and
evidence which a reasonable mind might accept as adequate to justify a competence, to move them around in the various areas of its business
conclusion.40 As explained in Ignacio v. Coca-Cola Bottlers Phils., Inc:41 operations in order to ascertain where they will function with maximum benefit
to the company.44
x x x Factual findings of the NLRC affirming those of the Labor Arbiter, both
bodies being deemed to have acquired expertise in matters within their As a matter of fact, while the CA’s observations may be acceptable to some
jurisdictions, when sufficiently supported by evidence on record, are accorded quarters, it is nevertheless not universal so as to foreclose another view on what
respect if not finality, and are considered binding on this Court. As long as their may be a better business decision. While it would be profitable to keep
decisions are devoid of any unfairness or arbitrariness in the process of their respondent in an area where he has established contacts and therefore the
deduction from the evidence proffered by the parties, all that is left is for the probability of him reaching and even surpassing his sales quota is high, on the
Court to stamp its affirmation and declare its finality.42 one hand, one can also make a case that since respondent is one of petitioners’
best district managers, he is the right person to turn around and improve the
Based on the foregoing, this Court rules that the CA had overstepped its legal sales numbers in Cagayan de Oro City, an area which in the past had been
mandate by reversing the findings of fact of the LA and the NLRC as it appears dismally performing. After all, improving and developing a new market may even
that both decisions were based on substantial evidence. There is no proof of be more profitable than having respondent stay and serve his old market. In
arbitrariness or abuse of discretion in the process by which each body arrived addition, one can even make a case and say that the transfer of respondent is
at its own conclusions. Thus, the CA should have deferred to such specialized also for his professional growth. Since respondent
agencies which are considered experts in matters within their jurisdictions.
has been already assigned in the Western Visayas area for 22 years, it may
Moreover, what is objectionable with the CA decision is that in finding that the mean that his market knowledge is very limited. In another territory, there will be
reassignment of respondent was arbitrary and unreasonable it had, in effect, new and more challenges for respondent to face. In addition, one can even
imposed on petitioners its own opinion or judgment on what should have been argue that for purposes of future promotions, it would be better to promote a
a purely business decision, to wit: district manager who has experience in different markets.

Discussing the issues jointly, a perusal of the records shows that there was no The foregoing illustrates why it is dangerous for this Court and even the CA to
overwhelming evidence to prove that petitioner was terminated for a just and look into the wisdom of a management prerogative. Certainly, one can argue for
valid cause. Public respondent had overlooked the fact that the reassignment of or against the pros and cons of transferring respondent to another territory.
petitioner was arbitrary and unreasonable as the same was in contrast to the Absent a definite finding that such exercise of prerogative was tainted with
purposes espoused by private respondents. Undoubtedly, petitioner is a arbitrariness and unreasonableness, the CA should have left the same to
complete alien to the territory and as no established contacts therein, thus, he petitioners’ better judgment. The rule is well settled that labor laws discourage
cannot be effective nor can he maximize profits. It cannot also contribute to his interference with an employer's judgment in the conduct of his business. Even
professional growth and development considering that he had already made a as the law is solicitous of the welfare of employees, it must also protect the right
mark on his territory by virtue of his twenty-two (22) long years of valuable of an employer to exercise what are clearly management prerogatives. As long
service. Considering the quality of his performance in his territory, the private as the company's exercise of the same is in good faith to advance its interest
respondents cannot therefore reason out that they are merely exercising their and not for the purpose of defeating or circumventing the rights of employees
management prerogative for it would be unreasonable since petitioner has not under the laws or valid agreements, such exercise will be upheld.45
been amiss in his responsibilities. Furthermore, it would undeniably cause
undue inconvenience to herein petitioner who would have to relocate, disrupting In addition, this Court cannot agree with the findings of the CA that the transfer
his family’s peaceful living, and with no additional monthly remuneration.43 of respondent was unreasonable, considering he had not been remiss in his
responsibilities. What the CA failed to recognize is that the very nature of a sales
In the absence of arbitrariness, the CA should not have looked into the wisdom man is that it is mobile and ambulant. On this point, it bears to stress that
of a management prerogative. It is the employer’s prerogative, based on its respondent signed two documents signifying his assent to be assigned
anywhere in the Philippines. In respondent’s Employment Application,46 he As early as in December 27, 1999, complainant already signified his refusal to
checked the box which asks, "Are you willing to be relocated anywhere in the accept his new assignment in Cagayan de Oro. Complainant was on sick leave
Philippines?"47 In addition, in respondent’s Contract of Employment,48 item (8) since January 5, 2000 up to May 11, 2000, for about four (4) months and he
reads: already consumed his leave credits up to March 2000. Hence, starting April 2000
he was already on indefinite leave without pay.
You agree, during the period of your employment, to be assigned to any work or
workplace for such period as may be determined by the company and whenever xxxx
the operations thereof require such assignment.49
In his letter dated May 17, 2000, addressed to respondent Jane B. Montilla,
Even if respondent has been performing his duties well it does not mean that complainant informed her that his doctors have already declared him fit for work
petitioners’ hands are tied up that they can no longer reassign respondent to as of May 16, 2000, and he was ready to assume to his regular assignment as
another territory. And it is precisely because of respondent’s good performance District Sales Manager of Negros Occidental. This is a strong indication that
that petitioners want him to be reassigned to Cagayan de Oro City so that he complainant really does not want to accept his new assignment either in
could improve their business there. Cagayan de Oro or in Metro Manila, which is clearly a defiance of the lawful
order of his employer, and a ground to terminate his services pursuant to Article
In Abbott Laboratories (Phils.), Inc. v. National Labor Relations 282 of the Labor Code.
Commission,50 which involved a complaint filed by a medical representative
against his employer drug company for illegal dismissal for allegedly terminating Notwithstanding his adamant refusal to resume working to his new assignment
his employment when he refused to accept his reassignment to a new area, the in Metro Manila, complainant was still given by respondent Montilla another
Court upheld the right of the drug company to transfer or reassign its employee chance to think it over up to June 2, 2000. By way of reply, complainant, in his
in accordance with its operational demands and requirements. The ruling of the letter dated May 31, 2000 to Ms. Montilla, he clearly expressed his disagreement
Court therein, quoted hereunder, also finds application in the instant case: to his transfer and would rather seek justice elsewhere in another forum.

Therefore, Bobadilla had no valid reason to disobey the order of transfer. He But still the respondent company, notwithstanding the position taken by
had tacitly given his consent thereto when he acceded to the petitioners’ policy complainant in his letter dated May 31, 2000 that he is refusing his transfer gave
of hiring sales staff who are willing to be assigned anywhere in the Philippines complainant until June 16, 2000 to reconsider his position. In a letter dated June
which is demanded by petitioners’ business. 5, 2000, respondent Montilla gave complainant a period of five (5) days from
receipt thereof to report to Manila, but still complainant did not comply. Ms.
By the very nature of his employment, a drug salesman or medical Montilla sent complainant a final notice dated June 26, 2000 for him to report to
representative is expected to travel. He should anticipate reassignment Manila within five (5) working days from receipt of the same, with a warning that
according to the demands of their business. It would be a poor drug corporation his failure to do so, the company would be constraint to terminate his services
which cannot even assign its representatives or detail men to new markets for being absent without official leave.
calling for opening or expansion or to areas where the need for pushing its
products is great. More so if such reassignments are part of the employment Finally, is was only on July 19, 2000, when the services of complainant was
contract.51 terminated by respondent company through its Human Resource Manager on
the ground of absence without leave and insubordination pursuant to Article 282
On the existence of grounds to dismiss respondent from the service of the Labor Code.

Because of respondent’s adamant refusal to be reassigned, the LA ruled that Clearly, the complainant had abandoned his work by reason of his being on
petitioners had valid grounds to terminate his employment, to wit: AWOL as a consequence of vigorous objection to his transfer to either Cagayan
de Oro or Metro Manila. The long period of absence of complainant without
official leave from April to July 19, 2000 is more than sufficient ground to dismiss
him. The refusal of complainant to accept his transfer of assignment is a clear remuneration, can be considered unreasonable and petitioner’s actuation
willful disobedience of the lawful order of his employer and a ground to terminate cannot be considered insubordination.56
his services under Article 282, par. (a) of the Labor Code, as amended. The
series of chances given complainant to report for work, coupled by his adamant This Court cannot agree with the findings of the CA, in view of the fact that it
refusal to report to his new assignment, is a conclusive indication of willful was an error for it to substitute its own judgment and interfere with management
disobedience of the lawful orders of his employer.52 prerogatives. No iota of evidence was presented that the reassignment of
respondent was a demotion as he would still be a District Sales Manager in
In addition, the NLRC also ruled that respondent was guilty of insubordination, Cagayan de Oro City or in Metro Manila. Furthermore, he would be given
thus: relocation benefits in accordance with the Benefits Manual. If respondent feels
that what he was given is less than what is given to all other district managers
Apparently, complainant, by his unjustified acts of refusing to be transferred who were likewise reassigned, the onus is on him to prove such fact.
either to Mindanao or Manila for personal reasons, absent any bad faith or Furthermore, records reveal that respondent has been harping on the fact that
malice on the part of respondents, has deliberately ignored and defied lawful no additional remuneration would be given to him with the transfer. However,
orders of his employer. An employee who refuses to be transferred, when such again, respondent did not present any evidence that additional remuneration
transfer is valid, is guilty of insubordination. x x x53 were being given to other district managers who were reassigned to different
locations, or that such was the practice in the company. This Court, therefore, is
Based on the foregoing, this Court rules that the findings of the LA and the NLRC inclined to believe the statement of Chu in her May 17, 2000 letter to respondent
are supported by substantial evidence. The LA clearly outlined the steps taken that additional remuneration is never given to people who are reassigned, to wit:
by petitioners and the manner by which respondent was eventually dismissed.
The NLRC, for its part, explained why respondent was guilty of insubordination. x x x Likewise, I am disappointed that with the movement, you expect to be paid
No abuse of discretion can, therefore, be attributed to both agencies, and the additional remuneration when in fact, this has never been done in the past and
CA was certainly outside its mandate in reversing such findings. never a practice within the industry and the Philippines.57

This Court has long stated that the objection to the transfer being grounded Lastly, while it is understandable that respondent does not want to relocate his
solely upon the personal inconvenience or hardship that will be caused to the family, this Court agrees with the NLRC when it observed that such
employee by reason of the transfer is not a valid reason to disobey an order of inconvenience is considered an "employment" or "professional" hazard which
transfer.54 Such being the case, respondent cannot adamantly refuse to abide forms part of the concessions an employee is deemed to have offered or
by the order of transfer without exposing himself to the risk of being dismissed. sacrificed in the view of his acceptance of a position in sales.
Hence, his dismissal was for just cause in accordance with Article 282(a)55 of
the Labor Code. On the observance of due process

The CA, however, ruled that respondent was not guilty of insubordination, to wit: The CA ruled that respondent was denied due process in the manner he was
dismissed by petitioners, to wit:
As to the findings of insubordination, the records show that petitioner was not
guilty of such offense. For insubordination to exist, the order must be reasonable Furthermore, the finding that petitioner was afforded due process is bereft of any
and lawful, sufficiently known to the employee and in connection to his duties. legal basis. An employee must be given notice and an ample opportunity, prior
Where an order or rule is not reasonable, in view of the terms of the contract of to dismissal to adequately prepare for his defense. This is an elementary rule in
employment and the general right of the parties, a refusal to obey does not labor law that due process in dismissal cases contemplates the twin requisites
constitute a just cause for the employee’s discharge. It is undeniable that the of notice and hearing. These procedural requirements have been mandatorily
order given by the company to petitioner to transfer to a place where he has no imposed to the employer to accord its employees the right to be heard. Failure
connections, leaving his family behind, and with no clear additional of the employer to comply with such requirements renders its judgment of
dismissal void and inexistent. A written notice from the employer containing the
causes for the dismissal must be given. The employee is then given ample no hearing was conducted, the requirement of due process had been met since
opportunity to be heard and to defend himself, appraising him of his right to they were accorded a chance to explain their side of the controversy62
counsel if he desires. Lastly, a written notice informing the employee of the
decision of the employer, citing there reasons therefore, is given. The above In the case at bar, this Court finds that petitioners had complied with the
procedure was not followed in the instant case and the series of communications requirements of law in effecting the dismissal of respondent. Petitioners sent
and meetings cannot take the place and is therefore not sufficient to take the respondent a first notice in the form of a memorandum63 dated June 26, 2000,
place of notice and hearing.58 warning him that the same would serve as a final notice for him to report to work
in Manila within 5 working days from receipt thereof, otherwise, his services
In termination proceedings of employees, procedural due process consists of would be terminated on the basis of AWOL. After receiving the memorandum,
the twin requirements of notice and hearing. The employer must furnish the respondent could have requested for a conference with the assistance of
employee with two written notices before the termination of employment can be counsel, if he so desired. Like in Solid, had respondent found the time too short,
effected: (1) the first apprises the employee of the particular acts or omissions he should have responded to the memorandum asking for more time. It,
for which his dismissal is sought; and (2) the second informs the employee of however, appears to this Court that respondent made no such requests. On July
the employer’s decision to dismiss him. The requirement of a hearing is 13, 2000, petitioners sent another memorandum64 notifying respondent that they
complied with as long as there was an opportunity to be heard, and not are terminating his services effective July 19, 2000, after he repeatedly refused
necessarily that an actual hearing was conducted.59 to report to work despite due notice. Even if no actual hearing was conducted,
this Court is of the opinion that petitioners had complied with the requirements
While no actual hearing was conducted before petitioners dismissed of due process as all that the law requires is an ample opportunity to be heard.
respondent, the same is not fatal as only an "ample opportunity to be heard" is
what is required in order to satisfy the requirements of due In conclusion, it bears to stress that the CA should not have disturbed the factual
process.60Accordingly, this Court is guided by Solid Development Corporation findings of the LA and the NLRC in the absence of arbitrariness or palpable
Workers Association v. Solid Development Corporation61 (Solid), where the error. The reassignment of respondent to another territory was a valid exercise
validity of the dismissal of two employees was upheld notwithstanding that no of petitioners’ management prerogative and, consequently, his dismissal was for
hearing was conducted, to wit: cause and in accordance with the due process requirement of law.

[W]ell-settled is the dictum that the twin requirements of notice and hearing This Court, however, is not unmindful of previous rulings,65 wherein separation
constitute the essential elements of due process in the dismissal of employees. pay has been granted to a validly dismissed employee after giving considerable
It is a cardinal rule in our jurisdiction that the employer must furnish the employee weight to long years of employment.66 1âwphi1

with two written notices before the termination of employment can be effected:
(1) the first apprises the employee of the particular acts or omissions for which An employee who is dismissed for cause is generally not entitled to any financial
his dismissal is sought; and (2) the second informs the employee of the assistance. Equity considerations, however, provide an exception. Equity has
employer’s decision to dismiss him. The requirement of a hearing, on the other been defined as justice outside law, being ethical rather than jural and belonging
hand, is complied with as long as there was an opportunity to be heard, and not to the sphere of morals than of law. It is grounded on the precepts of conscience
necessarily that an actual hearing was conducted. and not on any sanction of positive law, for equity finds no room for application
where there is law.67
In separate infraction reports, petitioners were both apprised of the particular
acts or omissions constituting the charges against them. They were also In Philippine Long Distance Telephone Co. v. National Labor Relations
required to submit their written explanation within 12 hours from receipt of the Commission,68 the Court laid down the guidelines in the grant of separation pay
reports. Yet, neither of them complied. Had they found the 12-hour period too to a lawfully dismissed employee, thus:
short, they should have requested for an extension of time. Further, notices of
termination were also sent to them informing them of the basis of their dismissal. We hold that henceforth separation pay shall be allowed as a measure of social
In fine, petitioners were given due process before they were dismissed. Even if 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, for example, habitual intoxication or
an offense involving moral turpitude, like theft or illicit sexual relations with a
fellow worker, 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.69

In the instant case, this Court rules that an award to respondent of separation
pay by way of financial assistance, equivalent to one-half (1/2) month’s pay for
every year of service, is equitable. Although respondent's actions constituted a
valid ground to terminate his services, the same is to this Court's mind not so
reprehensible as to warrant complete disregard of his long years of service. It
also appears that the same is respondent's first offense. While it may be
expected that petitioners will argue that respondent has only been in their
service for four years since the merger of Pharmacia and Upjohn took place in
1996, equity considerations dictate that respondent's tenure be computed from
1978, the year when respondent started working for Upjohn.

WHEREFORE, premises considered, the petition is PARTIALLY GRANTED.

The November 30, 2005 Decision and May 5, 2006 Resolution of the Court of
Appeals in CA-G.R. SP No. 00386 are REVERSED and SET ASIDE.

In view of the above disquisitions, petitioners are ordered to pay respondent

separation pay by way of financial assistance equivalent to one-half (1/2) month
pay for every year of service.

SO ORDERED.
SECOND DIVISION Tecson was initially assigned to market Glaxo’s products in the Camarines Sur-
Camarines Norte sales area.
G.R. No. 162994 September 17, 2004
Subsequently, Tecson entered into a romantic relationship with Bettsy, an
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. employee of Astra Pharmaceuticals3(Astra), a competitor of Glaxo. Bettsy was
TECSON, petitioners, Astra’s Branch Coordinator in Albay. She supervised the district managers and
vs. medical representatives of her company and prepared marketing strategies for
GLAXO WELLCOME PHILIPPINES, INC., Respondent. Astra in that area.

RESOLUTION Even before they got married, Tecson received several reminders from his
District Manager regarding the conflict of interest which his relationship with
TINGA, J.: Bettsy might engender. Still, love prevailed, and Tecson married Bettsy in
September 1998.
Confronting the Court in this petition is a novel question, with constitutional
overtones, involving the validity of the policy of a pharmaceutical company In January 1999, Tecson’s superiors informed him that his marriage to Bettsy
prohibiting its employees from marrying employees of any competitor company. gave rise to a conflict of interest. Tecson’s superiors reminded him that he and
Bettsy should decide which one of them would resign from their jobs, although
they told him that they wanted to retain him as much as possible because he
This is a Petition for Review on Certiorari assailing the Decision1 dated May 19,
was performing his job well.
2003 and the Resolution dated March 26, 2004 of the Court of Appeals in CA-
G.R. SP No. 62434.2
Tecson requested for time to comply with the company policy against entering
into a relationship with an employee of a competitor company. He explained that
Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome
Astra, Bettsy’s employer, was planning to merge with Zeneca, another drug
Philippines, Inc. (Glaxo) as medical representative on October 24, 1995, after
company; and Bettsy was planning to avail of the redundancy package to be
Tecson had undergone training and orientation.
offered by Astra. With Bettsy’s separation from her company, the potential
conflict of interest would be eliminated. At the same time, they would be able to
Thereafter, Tecson signed a contract of employment which stipulates, among avail of the attractive redundancy package from Astra.
others, that he agrees to study and abide by existing company rules; to disclose
to management any existing or future relationship by consanguinity or affinity
In August 1999, Tecson again requested for more time resolve the problem. In
with co-employees or employees of competing drug companies and should
September 1999, Tecson applied for a transfer in Glaxo’s milk division, thinking
management find that such relationship poses a possible conflict of interest, to
that since Astra did not have a milk division, the potential conflict of interest
resign from the company.
would be eliminated. His application was denied in view of Glaxo’s "least-
movement-possible" policy.
The Employee Code of Conduct of Glaxo similarly provides that an employee is
expected to inform management of any existing or future relationship by
In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-
consanguinity or affinity with co-employees or employees of competing drug
Agusan del Sur sales area. Tecson asked Glaxo to reconsider its decision, but
companies. If management perceives a conflict of interest or a potential conflict
his request was denied.
between such relationship and the employee’s employment with the company,
the management and the employee will explore the possibility of a "transfer to
another department in a non-counterchecking position" or preparation for Tecson sought Glaxo’s reconsideration regarding his transfer and brought the
employment outside the company after six months. matter to Glaxo’s Grievance Committee. Glaxo, however, remained firm in its
decision and gave Tescon until February 7, 2000 to comply with the transfer
order. Tecson defied the transfer order and continued acting as medical They also argue that Tecson was constructively dismissed as shown by the
representative in the Camarines Sur-Camarines Norte sales area. following circumstances: (1) he was transferred from the Camarines Sur-
Camarines Norte sales area to the Butuan-Surigao-Agusan sales area, (2) he
During the pendency of the grievance proceedings, Tecson was paid his salary, suffered a diminution in pay, (3) he was excluded from attending seminars and
but was not issued samples of products which were competing with similar training sessions for medical representatives, and (4) he was prohibited from
products manufactured by Astra. He was also not included in product promoting respondent’s products which were competing with Astra’s products.8
conferences regarding such products.
In its Comment on the petition, Glaxo argues that the company policy prohibiting
Because the parties failed to resolve the issue at the grievance machinery level, its employees from having a relationship with and/or marrying an employee of a
they submitted the matter for voluntary arbitration. Glaxo offered Tecson a competitor company is a valid exercise of its management prerogatives and
separation pay of one-half (½) month pay for every year of service, or a total of does not violate the equal protection clause; and that Tecson’s reassignment
₱50,000.00 but he declined the offer. On November 15, 2000, the National from the Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao
Conciliation and Mediation Board (NCMB) rendered its Decision declaring as City and Agusan del Sur sales area does not amount to constructive dismissal.9
valid Glaxo’s policy on relationships between its employees and persons
employed with competitor companies, and affirming Glaxo’s right to transfer Glaxo insists that as a company engaged in the promotion and sale of
Tecson to another sales territory. pharmaceutical products, it has a genuine interest in ensuring that its employees
avoid any activity, relationship or interest that may conflict with their
Aggrieved, Tecson filed a Petition for Review with the Court of Appeals assailing responsibilities to the company. Thus, it expects its employees to avoid having
the NCMB Decision. personal or family interests in any competitor company which may influence their
actions and decisions and consequently deprive Glaxo of legitimate profits. The
On May 19, 2003, the Court of Appeals promulgated its Decision denying policy is also aimed at preventing a competitor company from gaining access to
the Petition for Review on the ground that the NCMB did not err in rendering its secrets, procedures and policies.10
its Decision. The appellate court held that Glaxo’s policy prohibiting its
employees from having personal relationships with employees of competitor It likewise asserts that the policy does not prohibit marriage per se but only
companies is a valid exercise of its management prerogatives.4 proscribes existing or future relationships with employees of competitor
companies, and is therefore not violative of the equal protection clause. It
Tecson filed a Motion for Reconsideration of the appellate court’s Decision, but maintains that considering the nature of its business, the prohibition is based on
the motion was denied by the appellate court in its Resolution dated March 26, valid grounds.11
2004.5
According to Glaxo, Tecson’s marriage to Bettsy, an employee of Astra, posed
Petitioners filed the instant petition, arguing therein that (i) the Court of Appeals a real and potential conflict of interest. Astra’s products were in direct
erred in affirming the NCMB’s finding that the Glaxo’s policy prohibiting its competition with 67% of the products sold by Glaxo. Hence, Glaxo’s
employees from marrying an employee of a competitor company is valid; and enforcement of the foregoing policy in Tecson’s case was a valid exercise of its
(ii) the Court of Appeals also erred in not finding that Tecson was constructively management prerogatives.12 In any case, Tecson was given several months to
dismissed when he was transferred to a new sales territory, and deprived of the remedy the situation, and was even encouraged not to resign but to ask his wife
opportunity to attend products seminars and training sessions.6 to resign form Astra instead.13

Petitioners contend that Glaxo’s policy against employees marrying employees Glaxo also points out that Tecson can no longer question the assailed company
of competitor companies violates the equal protection clause of the Constitution policy because when he signed his contract of employment, he was aware that
because it creates invalid distinctions among employees on account only of such policy was stipulated therein. In said contract, he also agreed to resign
marriage. They claim that the policy restricts the employees’ right to marry.7 from respondent if the management finds that his relationship with an employee
of a competitor company would be detrimental to the interests of Glaxo.14
Glaxo likewise insists that Tecson’s reassignment to another sales area and his The same contract also stipulates that Tescon agrees to abide by the existing
exclusion from seminars regarding respondent’s new products did not amount company rules of Glaxo, and to study and become acquainted with such
to constructive dismissal. policies.18 In this regard, the Employee Handbook of Glaxo expressly informs its
employees of its rules regarding conflict of interest:
It claims that in view of Tecson’s refusal to resign, he was relocated from the
Camarines Sur-Camarines Norte sales area to the Butuan City-Surigao City and 1. Conflict of Interest
Agusan del Sur sales area. Glaxo asserts that in effecting the reassignment, it
also considered the welfare of Tecson’s family. Since Tecson’s hometown was Employees should avoid any activity, investment relationship, or interest
in Agusan del Sur and his wife traces her roots to Butuan City, Glaxo assumed that may run counter to the responsibilities which they owe Glaxo
that his transfer from the Bicol region to the Butuan City sales area would be Wellcome.
favorable to him and his family as he would be relocating to a familiar territory
and minimizing his travel expenses.15 Specifically, this means that employees are expected:

In addition, Glaxo avers that Tecson’s exclusion from the seminar concerning a. To avoid having personal or family interest, financial or
the new anti-asthma drug was due to the fact that said product was in direct otherwise, in any competitor supplier or other businesses which
competition with a drug which was soon to be sold by Astra, and hence, would may consciously or unconsciously influence their actions or
pose a potential conflict of interest for him. Lastly, the delay in Tecson’s receipt decisions and thus deprive Glaxo Wellcome of legitimate profit.
of his sales paraphernalia was due to the mix-up created by his refusal to
transfer to the Butuan City sales area (his paraphernalia was delivered to his
b. To refrain from using their position in Glaxo Wellcome or
new sales area instead of Naga City because the supplier thought he already
knowledge of Company plans to advance their outside personal
transferred to Butuan).16
interests, that of their relatives, friends and other businesses.
The Court is tasked to resolve the following issues: (1) Whether the Court of
c. To avoid outside employment or other interests for income
Appeals erred in ruling that Glaxo’s policy against its employees marrying
which would impair their effective job performance.
employees from competitor companies is valid, and in not holding that said
policy violates the equal protection clause of the Constitution; (2) Whether
Tecson was constructively dismissed. d. To consult with Management on such activities or
relationships that may lead to conflict of interest.
The Court finds no merit in the petition.
1.1. Employee Relationships
The stipulation in Tecson’s contract of employment with Glaxo being questioned
by petitioners provides: Employees with existing or future relationships either by consanguinity
or affinity with co-employees of competing drug companies are expected
to disclose such relationship to the Management. If management
…
perceives a conflict or potential conflict of interest, every effort shall be
made, together by management and the employee, to arrive at a solution
10. You agree to disclose to management any existing or future within six (6) months, either by transfer to another department in a non-
relationship you may have, either by consanguinity or affinity with co- counter checking position, or by career preparation toward outside
employees or employees of competing drug companies. Should it pose employment after Glaxo Wellcome. Employees must be prepared for
a possible conflict of interest in management discretion, you agree to possible resignation within six (6) months, if no other solution is
resign voluntarily from the Company as a matter of Company policy. feasible.19

…17
No reversible error can be ascribed to the Court of Appeals when it ruled that wrongful.25 The only exception occurs when the state29 in any of its
Glaxo’s policy prohibiting an employee from having a relationship with an manifestations or actions has been found to have become entwined or involved
employee of a competitor company is a valid exercise of management in the wrongful private conduct.27 Obviously, however, the exception is not
prerogative. present in this case. Significantly, the company actually enforced the policy after
repeated requests to the employee to comply with the policy. Indeed, the
Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing application of the policy was made in an impartial and even-handed manner,
strategies and other confidential programs and information from competitors, with due regard for the lot of the employee.
especially so that it and Astra are rival companies in the highly competitive
pharmaceutical industry. In any event, from the wordings of the contractual provision and the policy in its
employee handbook, it is clear that Glaxo does not impose an absolute
The prohibition against personal or marital relationships with employees of prohibition against relationships between its employees and those of competitor
competitor companies upon Glaxo’s employees is reasonable under the companies. Its employees are free to cultivate relationships with and marry
circumstances because relationships of that nature might compromise the persons of their own choosing. What the company merely seeks to avoid is a
interests of the company. In laying down the assailed company policy, Glaxo conflict of interest between the employee and the company that may arise out
only aims to protect its interests against the possibility that a competitor of such relationships. As succinctly explained by the appellate court, thus:
company will gain access to its secrets and procedures.
The policy being questioned is not a policy against marriage. An
That Glaxo possesses the right to protect its economic interests cannot be employee of the company remains free to marry anyone of his or her
denied. No less than the Constitution recognizes the right of enterprises to adopt choosing. The policy is not aimed at restricting a personal prerogative
and enforce such a policy to protect its right to reasonable returns on that belongs only to the individual. However, an employee’s personal
investments and to expansion and growth.20 Indeed, while our laws endeavor to decision does not detract the employer from exercising management
give life to the constitutional policy on social justice and the protection of labor, prerogatives to ensure maximum profit and business success. . .28
it does not mean that every labor dispute will be decided in favor of the workers.
The law also recognizes that management has rights which are also entitled to The Court of Appeals also correctly noted that the assailed company policy
respect and enforcement in the interest of fair play.21 which forms part of respondent’s Employee Code of Conduct and of its contracts
with its employees, such as that signed by Tescon, was made known to him
As held in a Georgia, U.S.A case,22 it is a legitimate business practice to guard prior to his employment. Tecson, therefore, was aware of that restriction when
business confidentiality and protect a competitive position by even-handedly he signed his employment contract and when he entered into a relationship with
disqualifying from jobs male and female applicants or employees who are Bettsy. Since Tecson knowingly and voluntarily entered into a contract of
married to a competitor. Consequently, the court ruled than an employer that employment with Glaxo, the stipulations therein have the force of law between
discharged an employee who was married to an employee of an active them and, thus, should be complied with in good faith."29 He is therefore
competitor did not violate Title VII of the Civil Rights Act of 1964.23 The Court estopped from questioning said policy.
pointed out that the policy was applied to men and women equally, and noted
that the employer’s business was highly competitive and that gaining inside The Court finds no merit in petitioners’ contention that Tescon was constructively
information would constitute a competitive advantage. dismissed when he was transferred from the Camarines Norte-Camarines Sur
sales area to the Butuan City-Surigao City-Agusan del Sur sales area, and when
The challenged company policy does not violate the equal protection clause of he was excluded from attending the company’s seminar on new products which
the Constitution as petitioners erroneously suggest. It is a settled principle that were directly competing with similar products manufactured by Astra.
the commands of the equal protection clause are addressed only to the state or Constructive dismissal is defined as a quitting, an involuntary resignation
those acting under color of its authority.24 Corollarily, it has been held in a long resorted to when continued employment becomes impossible, unreasonable, or
array of U.S. Supreme Court decisions that the equal protection clause erects unlikely; when there is a demotion in rank or diminution in pay; or when a clear
no shield against merely private conduct, however, discriminatory or discrimination, insensibility or disdain by an employer becomes unbearable to
the employee.30 None of these conditions are present in the instant case. The As noted earlier, the challenged policy has been implemented by Glaxo
record does not show that Tescon was demoted or unduly discriminated upon impartially and disinterestedly for a long period of time. In the case at bar, the
by reason of such transfer. As found by the appellate court, Glaxo properly record shows that Glaxo gave Tecson several chances to eliminate the conflict
exercised its management prerogative in reassigning Tecson to the Butuan City of interest brought about by his relationship with Bettsy. When their relationship
sales area: was still in its initial stage, Tecson’s supervisors at Glaxo constantly reminded
him about its effects on his employment with the company and on the company’s
. . . In this case, petitioner’s transfer to another place of assignment was interests. After Tecson married Bettsy, Glaxo gave him time to resolve the
merely in keeping with the policy of the company in avoidance of conflict conflict by either resigning from the company or asking his wife to resign from
of interest, and thus valid…Note that [Tecson’s] wife holds a sensitive Astra. Glaxo even expressed its desire to retain Tecson in its employ because
supervisory position as Branch Coordinator in her employer-company of his satisfactory performance and suggested that he ask Bettsy to resign from
which requires her to work in close coordination with District Managers her company instead. Glaxo likewise acceded to his repeated requests for more
and Medical Representatives. Her duties include monitoring sales of time to resolve the conflict of interest. When the problem could not be resolved
Astra products, conducting sales drives, establishing and furthering after several years of waiting, Glaxo was constrained to reassign Tecson to a
relationship with customers, collection, monitoring and managing Astra’s sales area different from that handled by his wife for Astra. Notably, the Court
inventory…she therefore takes an active participation in the market war did not terminate Tecson from employment but only reassigned him to another
characterized as it is by stiff competition among pharmaceutical area where his home province, Agusan del Sur, was included. In effecting
companies. Moreover, and this is significant, petitioner’s sales territory Tecson’s transfer, Glaxo even considered the welfare of Tecson’s family.
covers Camarines Sur and Camarines Norte while his wife is supervising Clearly, the foregoing dispels any suspicion of unfairness and bad faith on the
a branch of her employer in Albay. The proximity of their areas of part of Glaxo.34
responsibility, all in the same Bicol Region, renders the conflict of
interest not only possible, but actual, as learning by one spouse of the WHEREFORE, the Petition is DENIED for lack of merit. Costs against
other’s market strategies in the region would be inevitable. petitioners.
[Management’s] appreciation of a conflict of interest is therefore not
merely illusory and wanting in factual basis…31 SO ORDERED.

In Abbott Laboratories (Phils.), Inc. v. National Labor Relations

Commission,32 which involved a complaint filed by a medical representative
against his employer drug company for illegal dismissal for allegedly terminating
his employment when he refused to accept his reassignment to a new area, the
Court upheld the right of the drug company to transfer or reassign its employee
in accordance with its operational demands and requirements. The ruling of the
Court therein, quoted hereunder, also finds application in the instant case:

By the very nature of his employment, a drug salesman or medical

representative is expected to travel. He should anticipate reassignment
according to the demands of their business. It would be a poor drug
corporation which cannot even assign its representatives or detail men
to new markets calling for opening or expansion or to areas where the
need for pushing its products is great. More so if such reassignments
are part of the employment contract.33