G.R. No. 174893
G.R. No. 174893
G.R. No. 174893
SUPREME COURT
Manila
FIRST DIVISION
DECISION
The law is fair and just to both labor and management. Thus, while the Constitution accords an
employee security or tenure, it abhors oppression to an employer who cannot be compelled to
retain an employee whose continued employment would he patently inimical to its interest.
This Petition for Review on Certiorari 1 assails the July IR, 2006 Decision 2 or the Court of
Appeals (CA) in CJ\-G.R. SP No. 86937, which (I) reversed the National Labor Relations
Commission (NLRC) March 23, 2004 Resolution3 and in effect, its July 21, 2004 4 Resolution
as well, (2) declared petitioner Flordeliza Maria Reyes-Rayel’s (petitioner) dismissal from
employment valid, and (3) ordered respondents Philippine Luen Thai Holdings, Corp.
(PLTHC)/L&T International Group Phils., Inc. (L&T) (respondents) to pay petitioner an amount
equivalent to three months salary pursuant to the termination provision of the employment
contract.
Factual Antecedents
In February 2000, PLTHC hired petitioner as Corporate Human Resources (CHR) Director for
Manufacturing for its subsidiary/affiliate company, L&T. In the employment contract, 5
petitioner was tasked to perform functions in relation to administration, recruitment, benefits,
audit/compliance, policy development/ structure, project plan, and such other works as may be
assigned by her immediate superior, Frank Sauceda (Sauceda), PLTHC’s Corporate Director for
Human Resources.
On September 6, 2001, petitioner received a Prerequisite Notice 6 from Sauceda and the
Corporate Legal Counsel of PLTHC, Ma. Lorelie T. Edles (Edles), which reads:
This has reference to your failure to perform in accordance with management directives in
various instances, which collectively have resulted in loss of confidence in your capability to
promote the interests of the Company.
The most deleterious to the Company has been your pronouncements against the Human
Resource Information System (HRIS) or HR2 Program, a corporate initiative that is at the core
and is crucial to the enhancement of personnel management for the global operations of the
Company. On numerous occasions, in the presence of colleagues and subordinates, you made
statements that serve to undermine the Company’s efforts at pursuing the HR2 Program. You
ought to have realized that when leveled by an officer of your rank, no less than a Director of the
Corporate Human Resources Division, such remarks are highly inflammatory and their negative
impact is magnified.
Just as flagrant is your inability to incite collaboration and harmony within the Corporate Human
Resources Division. Instead, colleagues and subordinates complain of your negative attitude
towards the Company, its officers and people. You have established notoriety for your temper
and have alienated most members of your division. You ought to have realized that when
exhibited by an officer of your rank, no less than a Director of the Corporate Human Resources
Division, poor interpersonal skills and the lack of moral suasion are extremely damaging.
The foregoing have, in fact, manifested in your own unsatisfactory performance rating, and in
the departure of promising employees who could not work with you.
In view of the above, we afford you the opportunity to submit your written reply to this
memorandum within forty-eight (48) hours from its receipt. Failure to so submit shall be
construed as waiver of your right to be heard. Consequently, the Company shall immediately
decide on this matter.
xxx7
In petitioner’s written response 8 dated September 10, 2001, she explained that her alleged
failure to perform management directives could be attributed to the lack of effective
communication with her superiors due to malfunctioning email system. This caused her to miss
certain directives coming from her superiors and likewise, for her superiors to overlook the
reports she was submitting. She denied uttering negative comments about the HR2 Program and
instead claimed to have intimated her support for it. She further denied causing disharmony in
her division. Petitioner emphasized that in June 2001, she received a relatively good rating of
80.2% in her overall performance appraisal 9 which meant that she displayed dependable work
level performance as well as good corporate relationship with her superiors and subordinates.
In a Termination Notice 10 dated September 12, 2001, respondents, through Sauceda and Edles,
dismissed petitioner from the service for loss of confidence on her ability to promote the interests
of the company. This led petitioner to file a Complaint 11 for illegal dismissal, payment of
separation pay, 13th month pay, moral and exemplary damages, attorney’s fees, and other unpaid
company benefits against respondents and its officers, namely, Sauceda, Edles and Willie
Respondents, on the other hand, claimed that they have a wide discretion in dismissing petitioner
as she was occupying a managerial position. They claimed in their Position Paper 13 that
petitioner’s inefficiency and lackadaisical attitude in performing her work were just and valid
grounds for termination. In the same token, her gross and habitual neglect of duties were enough
bases for respondents to lose all their confidence in petitioner’s ability to perform her job
satisfactorily. Also, petitioner was accorded due process as she was furnished with two notices -
the first requiring her to explain why she should not be terminated, and the second apprising her
of the management’s decision to terminate her from employment.
Further in their Reply 14 to petitioner’s position paper, respondents enumerated the various
instances which manifested petitioner’s poor work attitude and dismal performance, to wit: 1)
her failure to perform in accordance with management directives such as when she unreasonably
delayed the hiring of a Human Rights and Compliance Manager; failed to establish
communication with superiors and co-workers; failed to regularly update Sauceda of the progress
of her work; requested for reimbursement of unauthorized expenditures; and, gave orders
contrary to policy on the computation of legal and holiday pay; 2) her negative pronouncements
against the company’s program in the presence of colleagues and subordinates; 3) her inability to
incite collaboration and harmony within her department; 4) her negative attitude towards the
company, its officers and employees; and 5) her low performance appraisal rating which is
unacceptable for a top level personnel like herself. Exchange of emails, affidavits and other
documents were presented to provide proof of incidents which gave rise to these allegations.
Respondents also asserted that the procedure laid down in the company’s code of discipline,
which provided for the mandatory requirements of notice, hearing/investigation and right to
appeal, only applies to rank and file, supervisory, junior managerial and department managerial
employees and not to petitioner, a CHR Director, who plays a key role in these termination
proceedings. Further, the three-month notice for termination, as written in the employment
contract, is only necessary when there is no just cause for the employee’s dismissal and,
therefore, not applicable to petitioner. Respondents then disputed petitioner’s money claims and
also sought the dropping of Sauceda, Edles and Tan from the complaint for not being real parties
in interest.
In her rejoinder, 15 petitioner stood firm on her conviction that she was dismissed without valid
cause by presenting documentary evidence of her good performance. Further, she insisted that
she was dismissed for reasons different from those mentioned in the Prerequisite Notice and
Notice of Termination, both of which did not state gross and habitual neglect of duties as a
ground. She also construed respondents’ act of offering her a settlement or compensation right
after her termination as their acknowledgement of the illegal act they committed against her.
Moreover, petitioner argued that the company policies on procedural due process apply to all its
employees, whether rank and file or managerial.
In a Decision 16 dated October 21, 2002, the Labor Arbiter declared petitioner to have been
illegally dismissed. It was held that petitioner cannot be charged with undermining the HR2
Program of the company since evidence was presented to show that she was already divested of
duties relative to this program. Also, respondents’ accusation that petitioner caused disharmony
among colleagues and subordinates has no merit as there was ample proof that petitioner was in
constant communication with her co-workers through official channels and email. Further, the
Labor Arbiter theorized that petitioner’s performance rating demonstrated a passing or
satisfactory grade and therefore could not be a sufficient and legitimate basis to terminate her for
loss of trust and confidence. Moreover, petitioner cannot be dismissed based merely on these
vague offenses but only for specific offenses which, under the company’s code of conduct, merit
the penalty of outright dismissal. The dispositive portion of the Decision reads:
P1,186,769.23
B. Attorney’s Fees (10%) 118,676.92
P1,305,446.15
SO ORDERED, 17
In a Decision 21 dated August 20, 2003, the NLRC found merit in respondents’ appeal. To the
NLRC, respondents have sufficiently established the validity of petitioner’s dismissal on the
ground of loss of trust and confidence through the various emails, affidavits and other documents
attached to the records. Specifically, respondents have proven that petitioner failed to recruit a
Human Rights and Compliance Manager, ignored company policies, failed to effectively
communicate with her superiors and subordinates, and displayed ineptitude in her work as a
director and in her relationship with her co-workers. These showed that there exist enough bases
for respondents to lose the trust they had reposed on petitioner, who, as a managerial employee,
was expected to possess exemplary work attitude. The NLRC, however, noted that the
employment contract specifically provided for payment of three months salary in lieu of the
stipulated three-month notice in case of termination, thus:
SO ORDERED. 22
Petitioner filed a Motion for Reconsideration 23 which was granted by the NLRC. In a
Resolution 24 dated March 23, 2004, the NLRC concluded that petitioner was not afforded due
process as she was not given the opportunity to refute the charges against her through an
investigation and an appeal at the company level. Thus, respondents failed to establish the
truthfulness of the allegations against her as to support the validity of the dismissal. The NLRC
also agreed with petitioner’s claim that she was subjected to humiliation on the day of her
termination. Consequently, the NLRC declared petitioner’s dismissal as illegal and thus
reinstated the Labor Arbiter’s Decision with modification that respondents be ordered to pay
petitioner separation pay in lieu of reinstatement due to the strained relation between the parties.
In a Resolution 25 dated July 21, 2004, the NLRC resolved to dismiss respondents’ motion for
reconsideration.
Respondents thus filed with the CA a Petition for Certiorari with Urgent Motion for Issuance of
Temporary Restraining Order (TRO) or Writ of Preliminary Injunction.26 Petitioner then filed
her Comment27 thereto. Subsequently, the CA denied respondents’ prayer for TRO in a
Resolution28 dated February 15, 2005.
On July 18, 2006, the CA rendered a Decision29 finding merit in the petition. The CA found
sufficient evidence to support the dismissal of petitioner on the ground of loss of trust and
confidence. It regarded petitioner’s 80.2% performance rating as below par and hence, declared
that she cannot merely rely on the same in holding on to her position as CHR Director, a highly
sensitive and demanding post. Also, despite the opportunity to improve, petitioner continued to
display poor work attitude, dismal performance and rancorous and abusive behavior towards co-
workers as gleaned from the various emails and affidavits of her superiors and other employees.
These circumstances, taken together, constitute sufficient cause for respondents to lose
confidence in petitioner’s ability to continue in her job and to promote the interest of the
company.
Moreover, the CA did not subscribe to petitioner’s allegation that she was denied due
process.1âwphi1 On the contrary, said court found that she was adequately notified of the
charges against her through the show cause notice which clearly stated the instances that served
as sufficient bases for the loss of trust and confidence, to wit: her failure to perform in
accordance with management directives and her actions of undermining company goals and
causing disharmony among her co-workers. After finding her written response to be
unsatisfactory, petitioner was likewise properly notified of the company’s decision to terminate
her services. Clearly, respondents observed the requirements of procedural due process.
Nevertheless, respondents, in effecting the dismissal, should have paid petitioner her salary for
three months as provided for in the employment contract. For its failure to do so, the CA ordered
respondents to pay petitioner three months salary in accordance with their contractual
undertaking. The dispositive portion of the CA Decision states:
WHEREFORE, the Resolution of the National Labor Relations Commission dated March 23,
2004 is REVERSED. [Respondents] are hereby ordered to pay petitioner the amount
corresponding to three [months] salary pursuant to the termination provision of the employment
contract.
SO ORDERED.30
Petitioner’s Motion for Reconsideration31 was denied in the CA Resolution32 dated October 4,
2006.
Issues
Petitioner posits that there is no substantial evidence to establish valid grounds for her dismissal
since various emails from her superiors illustrating her accomplishments and commendations, as
well as her "good" overall performance rating negate loss of trust and confidence. She also
insists that she was not afforded due process at the company level. She claims that she was not
properly informed of the offenses charged against her due to the vagueness of the terms written
in the termination notices and that no investigation and hearing was conducted as required by
company policy.
Our Ruling
The petition is devoid of merit. The Court finds no cogent reason to depart from the ruling of the
CA that petitioner was validly dismissed.
Jurisprudence provides that an employer has a distinct prerogative and wider latitude of
discretion in dismissing a managerial personnel who performs functions which by their nature
require the employer’s full trust and confidence.34 As distinguished from a rank and file
personnel, mere existence of a basis for believing that a managerial employee has breached the
trust of the employer justifies dismissal.35 "[L]oss of confidence as a ground for dismissal does
not require proof beyond reasonable doubt as the law requires only that there be at least some
basis to justify it."36
Petitioner, in the present case, was L&T’s CHR Director for Manufacturing. As such, she was
directly responsible for managing her own departmental staff. It is therefore without question
that the CHR Director for Manufacturing is a managerial position saddled with great
responsibility. Because of this, petitioner must enjoy the full trust and confidence of her
superiors. Not only that, she ought to know that she is "bound by more exacting work ethics"37
and should live up to thishigh standard of responsibility. However, petitioner delivered dismal
performance and displayed poor work attitude which constitute sufficient reasons for an
employer to terminate an employee on the ground of loss of trust and confidence. Respondents
also impute upon petitioner gross negligence and incompetence which are likewise justifiable
grounds for dismissal.38 The burden of proving that the termination was for a valid cause lies on
the employer.39 Here, respondents were able to overcome this burden as the evidence presented
clearly support the validity of petitioner’s dismissal.
First, records show that petitioner indeed unreasonably failed to effectively communicate with
her immediate superior. There was an apparent neglect in her obligation to maintain constant
communication with Sauceda in order to ensure that her work is up to par. This is evident from
the various emails40 showing that she failed to update Sauceda on the progress of her important
assignments on several occasions. While petitioner explained in her written reply to the
Prerequisite Notice that such failure to communicate was due to the company’s computer system
breakdown, respondents however were able to negate this as they have shown that the computer
virus which affected the company’s system only damaged some email addresses of certain
employees which did not include that of Sauceda’s. On the other hand, petitioner failed to
present any concrete proof that the said computer virus also damaged Sauceda’s email account as
to effectively disrupt their regular communication. Moreover, we agree with respondents’ stance
that petitioner could still reach Sauceda through other means of communication and should not
completely rely on the web.
Second, the affidavits of petitioner’s co-workers revealed her negative attitude and
unprofessional behavior towards them and the company. In her affidavit,41 Agnes Suzette
Pasustento, L&T’s Manager for the Corporate Communications Department, attested to
petitioner’s "badmouthing" of Sauceda in one of their meetings abroad and of discussing with
her about filing a labor case against the company. Also, in the affidavits of Rizza S. Esplana42
(Sauceda’s Executive Assistant), Cynthia Yñiguez 43 (Corporate Human Resources Manager of
an affiliate of L&T), and Ana Wilma Arreza44 (Human Resources and Administration Division
Manager of an affiliate of L&T), they narrated several instances which demonstrated petitioner’s
notoriously bad temper. They all described her to have an "irrational" behavior and "superior and
condescending" attitude in the workplace. Unfortunately for petitioner, these sworn statements
which notably remain uncontroverted and unrefuted, militate against her innocence and
strengthen the adverse averments against her.45 It is well to state that as a CHR Director tasked
to efficiently manage the company’s human resource team and practically being considered the
"face" of the Human Resource, petitioner should exhibit utmost concern for her employer’s
interest. She should likewise establish not only credibility but also respect from co-workers
which can only be attained if she demonstrates maturity and professionalism in the discharge of
her duties. She is also expected to act as a role model who displays uprightness both in her own
behavior and in her dealings with others.
The third and most important is petitioner’s display of inefficiency and ineptitude in her job as a
CHR Director. In the affidavit46 of Ornida B. Calma, Chief Accountant of L&T’s affiliate
company, petitioner, on two occasions, gave wrong information regarding issues on leave and
holiday pay which generated confusion among employees in the computation of salaries and
wages. Due to the nature of her functions, petitioner is expected to have strong working
knowledge of labor laws and regulations to help shed light on issues and questions regarding the
same instead of complicating them. Petitioner obviously failed in this respect.
No wonder she received a less than par performance in her performance evaluation conducted in
June 2001, contrary to her assertion that an 80.2% rating illustrates good and dependable work
performance. As can be gleaned in the performance appraisal form, petitioner received deficient
marks and low ratings on areas of problem solving and decision making, interpersonal
relationships, planning and organization, project management and integrity notwithstanding an
overall passing grade. As aptly remarked by the CA, these low marks revealed the "degree of
[petitioner’s] work handicap" and should have served as a notice for her to improve on her job.
However, she appeared complacent and remained lax in her duties and this naturally resulted to
respondents’ loss of confidence in her managerial abilities.
Taking all these circumstances collectively, the Court is convinced that respondents have
sufficient and valid reasons in terminating the services of petitioner as her continued
employment would be patently inimical to respondents’ interest. An employer "has the right to
regulate, according to its discretion and best judgment, all aspects of employment, including
work assignment, working methods, processes to be followed, working regulations, transfer of
employees, work supervision, lay-off of workers and the discipline, dismissal and recall of
workers."47 "[S]o long as they are exercised in good faith for the advancement of the employer’s
interest and not for the purpose of defeating or circumventing the rights of the employees under
special laws or under valid agreements,"48 the exercise of this management prerogative must be
upheld.
Anent petitioner’s imputation of bad faith upon respondents, the same deserves no credence.
That she was publicly embarrassed when she was coerced by Sauceda and Edles to vacate her
office, return the company car and take all her personal belongings on the day she was dismissed,
are all mere allegations not substantiated by proof. And since it is hornbook rule that he who
alleges must prove, we could not therefore conclude that her termination was tainted with any
malice or bad faith without any sufficient basis to substantiate this bare allegation. Moreover, we
are more inclined to believe that respondents’ offer of settlement immediately after petitioner’s
termination was more of a generous offer of financial assistance rather than an indication of ill-
motive on respondents’ part.
Petitioner insists that she was not properly apprised of the specific grounds for her termination as
to give her a reasonable opportunity to explain. This is because the Prerequisite Notice and
Notice of Termination did not mention any valid or authorized cause for dismissal but rather
merely contained general allegations and vague terms.
We have examined the Prerequisite Notice and contrary to petitioner’s assertion, find the same to
be free from any ambiguity. The said notice properly advised petitioner to explain through a
written response her failure to perform in accordance with management directives, which
deficiency resulted in the company’s loss of confidence in her capability to promote its interest.
As correctly explained by the CA, the notice cited specific incidents from various instances
which showed petitioner’s "repeated failure to comply with work directives, her inclination to
make negative remarks about company goals and her difficult personality," that have collectively
contributed to the company’s loss of trust and confidence in her. Indeed, these specified acts, in
addition to her low performance rating, demonstrated petitioner’s neglect of duty and
incompetence which support the termination for loss of trust and confidence.
Neither can there be any denial of due process due to the absence of a hearing or investigation at
the company level. It has been held in a plethora of cases that due process requirement is met
when there is simply an opportunity to be heard and to explain one’s side even if no hearing is
conducted.49 In the case of Perez v. Philippine Telegraph and Telephone Company,50 this Court
pronounced that an employee may be afforded ample opportunity to be heard by means of any
method, verbal or written, whether in a hearing, conference or some other fair, just and
reasonable way, in that:
xxxx
After receiving the first notice apprising him of the charges against him, the employee may
submit a written explanation (which may be in the form of a letter, memorandum, affidavit or
position paper) and offer evidence in support thereof, like relevant company records (such as his
201 file and daily time records) and the sworn statements of his witnesses. For this purpose, he
may prepare his explanation personally or with the assistance of a representative or counsel. He
may also ask the employer to provide him copy of records material to his defense. His written
explanation may also include a request that a formal hearing or conference be held. In such a
case, the conduct of a formal hearing or conference becomes mandatory, just as it is where there
exist substantial evidentiary disputes or where company rules or practice requires an actual
hearing as part of employment pretermination procedure. To this extent, we refine the decisions
we have rendered so far on this point of law.
xxxx
In sum, the following are the guiding principles in connection with the hearing requirement in
dismissal cases:
(a) ‘ample opportunity to be heard’ means any meaningful opportunity (verbal or written)
given to the employee to answer the charges against him and submit evidence in support
of his defense, whether in a hearing, conference or some other fair, just and reasonable
way.
(b) a formal hearing or conference becomes mandatory only when requested by the
employee in writing or substantial evidentiary disputes exist or a company rule or
practice requires it, or when similar circumstances justify it.
(c) the ‘ample opportunity to be heard’ standard in the Labor Code prevails over the
‘hearing or conference’ requirement in the implementing rules and regulations.51
In this case, petitioner's written response to the Prerequisite Notice provided her with an avenue
to explain and defend her side and thus served the purpose of due process. That there was no
hearing. investigation or right to appeal. which petitioner opined to be violation of company
policies, is of no moment since the records is bereft of any showing that there is an existing
company policy that requires these procedures with respect to the termination of a CHR Director
like petitioner or that company practice calls for the same. There was also no request for a formal
hearing on the part of petitioner.
As she was served with a notice apprising her of the changes against her and also a subsequent
notice informing her of the management's decision to terminate her services alter respondents
found her written response to the first notice unsatisfactory, petitioner was clearly afforded her
right to due process.
WHEREFORE, the petition is DENIED. The assailed Decision dated July 18, 2006 of the
Court of Appeals in CA-GR. SP No. 86937 is AFFIRMED.
SO ORDERED.
WE CONCUR:
ESTELA M. PERLAS-BERNABE***
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
CERTIFICATION
I certify that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court.
ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 296, The Judiciary Act of 1948, as amended)
Footnotes
* Per Special Order No. 1226 dated May 30, 2012.
*** Per Special Order No. 1227 dated May 30, 2012.
2 CA rollo, Vol. II. Pp. 1508-1523; penned by Associate Justice Rosmari D. Carandang
and concurred in by Associate Justices Renato C. Dacudao and Monina Arevalo-
Zenarosa
3 CA rollo, Vol. I. Pp. 87-95; penned by Presiding Commissioner Raul T. Aquino and
concurred in by Commissioners Victoriano R. Calaycay and Angelita A. Gacutan.
4 Id. at 97-98.
5 Id. at 322-326.
6 Id. at 399.
7 Id.
8 Id. at 419-420.
9 Id. at 385-392.
10 Id. at 421.
11 Id. at 435-436.
12 Id. at 367-378.
13 Id. at 327-344.
14 Id. at 437-476.
15 Id. at 613-626.
17 Id. at 723-724.
19 Id. at 887-892.
20 CA rollo, Vol. II, pp. 944-947.
22 Id. at 1073-1074.
23 Id. at 1075-1093.
25 Id. at 97-98. In the said Resolution, the NLRC dismissed both the motions for
reconsideration of respondents and petitioner although it was only the respondents who
moved to reconsider the March 23, 2004 Resolution, as clarified by petitioner in a
Manifestation and Motion for Clarification; CA rollo, Vol. II, pp. 1231-1232.
28 Id. at 1356-1357.
29 Id. at 1508-1523.
31 Id. at 1530-1557.
32 Id. at 1585-1586.
33 Rollo, p. 23.
34 Philippine Airlines, Inc. v. National Labor Relations Commission, G.R. No. 123294,
October 20, 2010, 634 SCRA 18, 36.
35 Caoile v. National Labor Relations Commission, 359 Phil. 399, 406 (1998).
37 Community Rural Bank of San Isidro (N.E.), Inc. v. Paez, G.R. No. 158707,
November 27, 2006, 508 SCRA 245, 260.
38 Etcuban, Jr. v. Sulpicio Lines, Inc., 489 Phil. 483, 498 (2005).
39 Century Canning Corporation v. Court of Appeals, G.R. No. 152894, August 17,
2007, 530 SCRA 501, 518.
40 See Annex "12","15", and "19" of Edles’s Affidavit, CA rollo, Vol. I., pp. 196, 199-
201 and 218, respectively.
45 House of Sara Lee v. Rey, G.R. No. 149013, August 31, 2006, 500 SCRA 419, 437.
46 Annex "2" of respondents’ Sur-Rejoinder filed before the Labor Arbiter, CA rollo,
Vol. I, p. 700.
47 Jumuad v. Hi-Flyer Food, Inc., G.R. No. 187887, September 7, 2011, 657 SCRA 288,
304.
48 Bank of the Philippine Islands v. Uy, 505 Phil. 704, 717 (2005).
49 Allied Banking Corp. v. Court of Appeals, 461 Phil. 517, 539 (2003); Adiong v. Court
of Appeals, 422 Phil. 713, 721 (2001); Canete Jr. v. National Labor Relations
Commission, 374 Phil. 272, 281 (1999).
51 Id. at 126-127.