LABOR RELATIONS

EMPLOYEE’S RIGHT TO
SECURITY OF TENURE
(Article 279 of the Labor Code)
 MANAGEMENT PREROGATIVE
 AN EMPLOYER IS FREE TO REGULATE,
ACCORDING TO THIS OWN DISCRETION AND
JUDGMENT, ALL ASPECTS OF HIS BUSINESS
- HIRING
- WORK ASSIGNMENTS
- WORKING METHODS
- TIME, PLACE AND MANNER OF WORK
- TOOLS TO BE USED
- PROCESSES TO BE FOLLOWED
- SUPERVISION OF WORKERS
- LAY OFF OF WORKERS
- DISCIPLINE AND DISMISSAL OF
WORKERS
(San Miguel Brewery Sales vs. Ople,
G.R. No. 53515, February 8, 1989)
“EVEN AS THE LAW IS SOLICITOUS TO
THE WELFARE OF THE EMPLOYEES, IT
MUST ALSO PROTECT THE RIGHT OF AN
EMPLOYER TO EXERCISE WHAT ARE
CLEARLY MANAGEMENT
PREROGATIVES”
(San Miguel Brewery Sales, supra)
 TO DISMISS AN EMPLOYEE IS A
MANAGEMENT PREROGATIVE
BUT MUST BE DONE IN GOOD FAITH

DUE PROCESS IS A MUST

TWO ASPECTS
1. PROCEDURAL DUE PROCESS
2. SUBSTANTIVE DUE PROCESS
 PROCEDURAL DUE PROCESS
STEPS: TWO NOTICE RULE + HEARING

FIRST STEP: FIRST NOTICE-

-WRITTEN NOTICE

- SPECIFYING THE GROUND OR

GROUNDS FOR TERMINATION

- GIVING SAID EMPLOYEE REASONABLE

OPPORTUNITY TO EXPLAIN HIS SIDE
SECOND STEP: A HEARING OR
CONFERENCE

-EMPLOYEE PRESENTS EVIDENCE

OR REBUT EVIDENCE PRESENTED
AGAINST HIM WITH ASSISTANCE
OF COUNSEL IF HE SO DESIRES
THIRD STEP: SECOND NOTICE

-A WRITTEN NOTICE OF TERMINATION

SERVED ON THE EMPLOYEE UPON DUE
CONSIDERATION OF THE
CIRCUMSTANCES

-GROUNDS HAVE BEEN ESTABLISHED

TO JUSTIFY HIS TERMINATION

(Section 2, (d) Rule 1, Book VI, Omnibus Rules Implementing the Labor
Code of the Philippines)
 JUST CAUSES FOR TERMINATION
1. SERIOUS MISCONDUCT
2. WILLFUL DISOBEDIENCE
3. GROSS AND HABITUAL NEGLECT OF DUTY
4. FRAUD
5. WILLFUL BREACH BY THE EMPLOYEE OF THE
TRUST REPOSED IN HIM BY THE EMPLOYER
6. COMMISSION OF A CRIME BY EMPLOYEE AGAINST
THE PERSON OF THE EMPLOYER OR ANY
IMMEDIATE MEMBER OF HIS FAMILY
7. OTHER CAUSES ANALOGOUS TO THE FOREGOING.

(Article 282, Labor Code of the Philippines)

MISCONDUCT IS IMPROPER OR WRONG
CONDUCT. TRANSGRESSION OF SOME
ESTABLISHED AND DEFINITE RULE OF
ACTION.

-MUST BE GRAVE NOT MERELY TRIVIAL

OR UNIMPORTANT

-MUST BE CONNECTED TO EMPLOYEE’S

WORK
EXAMPLES:
- UTTERING OBSCENE, INSULTING OR
OFFENSIVE WORDS AGAINST A SUPERIOR
(Asian Design and Manufacturing Corp. vs.
Hon. Deputy Minister of Labor, G.R. No. 70552,
May 12, 1986; Santos vs. NLRC, G.R. No.
115795, March 6, 1998))

-IMMORALITY IF IT INJURES EMPLOYER’S

BUSINESS (Sanches vs. Ang Tibay, 54 O.G.
4515)

- CHALLENGING OFFICERS TO A FIGHT

(Luzon Stevedoring Corp vs. CIR, December
11, 1965)
WILLFUL DISOBEDIENCE
- EMPLOYER’S PREROGATIVE TO PRESCRIBE
RULES AND REGULATION
- EMPLOYEE VIOLATES

EXAMPLES:
-RULE AGAINST USING COMPANY VEHICLES FOR
PRIVATE PURPOSE WITHOUT CONSENT OF THE
COMPANY (Soco vs. Mercantile Corp. G.R. No.
5336465, March 16, 1987)

-RULE FOR THE SAFETY OF EMPLOYEES LIKE NO

SMOKING INSIDE THE PLANT (Northern Motors vs.
NLRC, G,.R. No. L-10022, Jan 31, 1958)
NEGLECT OF DUTIES
-gross and habitual

Gross negligence means want or absence of

or failure to exercise even a slight care or
diligence, or the entire absence of care.

Examples:
- company appraiser submitted a report that value
of the land is P800K. When the loan matured
and borrower could not pay, mortgage was
foreclosed. It turned out the value of the land is
only P200K (Associated Bank vs. NLRC, G.R. No. 86023,
June 19, 1989)
FAILURE TO MEET A SALES QUOTA
The practice of a company in laying off workers
because they failed to make the work quota has been
recognized in this jurisdiction. (Philippine American
Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634, 639).

“In the case at bar, the petitioners' failure to meet the sales
quota assigned to each of them constitute a just cause of
their dismissal, regardless of the permanent or probationary
status of their employment. Failure to observe prescribed
standards of work, or to fulfill reasonable work
assignments due to inefficiency may constitute just
cause for dismissal. Such inefficiency is understood to
mean failure to attain work goals or work quotas, either by
failing to complete the same within the alloted reasonable
period, or by producing unsatisfactory results. This
management prerogative of requiring standards can be
availed of so long as they are exercised in good faith for the
advancement of the employer's interest.” (VER BUISER vs.
GENERAL TELEPHONE DIRECTORY, CO., G.R. No. L-63316 July 31, 1984)
FRAUD- DISHONESTY
Examples:
Theft
Falsification of time Card

LOSS OF CONFIDENCE
An employer cannot be compelled to continue its
employment of an employee guilty of acts
inimical to the interest of the employer.

Loss of trust must be genuine. It must arise from

an act committed by the employee, an act
detrimental to the interest of the employer.
Applicable to:
1. Cases involving employees occupying
positions of trust and confidence

Examples: Managerial employees those vested

with the powers or prerogatives to lay down
management policies and/or to hire, transfer,
suspend, lay off, recall, discharge, assign or
discipline employees or effectively
recommend such managerial actions.

2. Cases where employee is routinely charged

with the care and custody of employer’s
money or property.
Examples: cashiers, auditors, property custodian
CASES:

1. Etcuban, Jr. vs. Sulpicio Lines, Inc.,

448 SCRA 517, January 17, 2005, An
employee in charge of issuing ticket to
passengers was caught filling up the
duplicate original of yet to be sold
passenger tickets with the amount of
P88.00 but the original copy did not
bear the same impression.
Etcuban was dismissed by Sulpicio Lines.

In the Supreme Court, Etcuban contended that his

dismissal from the service is unwarranted, harsh
and is not commensurate to his misdeeds,
considering the following: first, his 16 long years
of service with the company; second, no loss or
damages was suffered by the company since the
tickets were unissued; third, he had no previous
derogatory record; and, lastly, the amount
involved is miniscule.” .
The Supreme Court was not impressed with
the arguments of Etcuban. The Supreme
Court ruled that:
“The argument that the petitioner was not guilty of
anything because the tickets were never issued or
that he had received nothing from the passengers
that he could short-change the company would
not mitigate his liability, nor efface the
respondent’s loss of trust and confidence in him.
Whether or not the respondent was
financially prejudiced is immaterial. Also,
what matters is not the amount involved, be
it paltry or gargantuan; rather the fraudulent
scheme in which the petitioner was involved,
which constitutes a clear betrayal of trust and
confidence.” (448 SCRA 532)
 “The fact that the petitioner has worked with the
respondent for more than 16 years, if it is to be
considered at all, should be taken against him.
The infraction that he committed, vis-a-vis his
long years of service with the company, reflects
a regrettable lack of loyalty. Loyalty that he
should have strengthened instead of
betrayed. If an employee’s length of service is to
be regarded as a justification for moderating the
penalty of dismissal, it will actually become a
prize for disloyalty, perverting the meaning of
social justice and undermining the efforts of labor
to cleanse its ranks of all undesirables.” (page
532, id)
CASES:
2. Falco vs. Mercury Freight International Inc., et
al G.R. No. 153824, August 9, 2006 where the
Supreme Court wrote once more that pilferage is a
serious offense and a valid ground for dismissal:

“In Philippine Airlines, Inc. v. National Labor

Relations Commission (4th Division),[1][4] we
ruled that pilferage by an employee is a serious
offense and a valid ground for dismissal. Petitioners’
acts of pilferage having been duly established by
substantial evidence, their dismissal from employment
is in order.

[1][4] G.R. No. 120507, September 26, 1997, 279 SCRA 553.
CASES:
In Manila Trading & Supply Co. v. Zulueta,[
2][5] we ruled that an employer cannot legally
be compelled to continue with the employment
of a person who is guilty of misfeasance or
malfeasance towards his employer and whose
continuance in employment is patently inimical
to the latter’s interests. For the law, in
protecting the rights of labor, authorizes neither
the oppression nor the self-destruction of the
employer.”

[2][5] 69 Phil. 485 (1940).

CASES:
PAL vs. NLRC, G.R. No. 120507, September
26, 1997, cited in the Falco case, involved the
pilferage of the purse of a passenger. No
amount of money was established. In fact, not
even the purse was presented as evidence.
And yet, the Supreme Court sustained the
dismissal of a ramp equipment operator. We
quote the Supreme Court as follows:

“What the NLRC lost sight of in the course of its

review is the fact that private respondent was
charged with and finally dismissed on the basis
of the act of pilferage alone and nothing else.”
 Before Etcuban, there were already numerous
cases that recognized the right of the
employers to dismiss dishonest employees, no
matter how small the value of the thing taken.
For what is to be considered is not the value
of the thing taken but the act itself which
makes an employee unfit to continue working
for the employer.

Some of these cases are:

 CASES:
4. In Piedad vs. Lanao Del Norte Electric Coop, et
al. G.R. No. 73735, August 31, 1987, the Supreme
Court upheld the decision of the National Labor
Relations Commission in dismissing a bill collector
found short of P300.00 in his collections despite his 10
years of service [ December 5, 1974-January 4, 1984]
in the company. We quote the Supreme Court, as
follows:

“Clearly, it was neither without rhyme nor reason that the

petitioner was dismissed from employment. His acts
need not result in material damage or prejudice before
his dismissal on grounds of loss of confidence may be
effected. Being charged with the handling of company
funds, the petitioner's position, though generally
described as menial, is, nonetheless, a position of trust
and confidence. No company can afford to have
dishonest bin collectors. x x x”
“Loss of confidence is established as a valid
ground for the dismissal of an employee. The
law does not require proof beyond reasonable
doubt of the employee's misconduct to invoke
such a justification. It is sufficient that there is
some basis for the loss of trust or that the
employer has reasonable grounds to believe
that the employee is responsible for the
misconduct and his participation therein
renders him unworthy 6f the trust and
confidence demanded of his position”
(Valladolid v. Inciong, 121 SCRA 2053; see also Dole Philippines,
Inc. v. National Labor Relations Commission, 123 SCRA 673; and
San Miguel Corporation v. National Labor Relations Commission,
115 SCRA 329).
5. In International Hardwood and
Veneer Co. of the Philippines vs. Hon
Leogardo, et al, G.R. No. L-57429
October 28, 1982, the Supreme Court
upheld the dismissal of a banca operator
who was caught stealing a log. The
Supreme Court, held that:
“This petition may be resolved on the issue of
dishonesty alone.

Atentar was a motor banca operator assigned to

the Mauban log pond of Interwood. He was given,
in addition to his regular duties, the confidential
assignment of helping an anti-smuggling team of
security personnel patrol the environs of the
company log pond. Atentar was caught in the very
act he was supposed to curb or guard against.
Security personnel apprehended Atentar while he
was towing a pilfered log from the Interwood log
pond to the Mauban Insular Sawmill.
“ There is no question that the theft of
logs by an employee who operates the
motor bancas used in towing those logs
and who is given the extra assignment of
helping security personnel patrol the
waters in and around the log pond
against log thieves is valid reason for
dismissal by his employer. The act of
pilferage violated both Article 283 of the
Labor Code and the employer's company
rules and regulations
x x x”
 “It is an established principle that an
employer cannot be compelled to
continue in employment an employee
guilty of acts inimical to the interest of
the employer and justifying loss of
confidence in him.”
(Manila Trading and Supply Co. v. Manila Trading Laborer's
Association, 83 Phil. 297; Galsim v. Philippine National Bank, 29
SCRA 293; PECO v. PECO Employees Union, 107 Phil. 1003;
Nevans v. Court of industrial Relations, 23 SCRA 1321; Gas
Corporation of the Philippines v. Inciong, 93 SCRA 652.)

xxx xxx xxx

“The dismissal of a dishonest employee is
as much in the interests of labor as it is of
management. The labor force in any
company is protected and the workers'
security of tenure strengthened when
pilferage of equipment, goods, and
products which endangers the viability of
an employer and, therefore, the workers'
continued employment is minimized or
eliminated and consequently labor-
management relations based on mutual
trust and confidence are promoted.”
CASES:

6. In Galsim, et al vs.PNB, G.R. No. L-

23921, August 29, 1969, the Supreme
Court upheld the dismissal of an employee
despite the dismissal of the criminal case
filed against her. We quote the Supreme
Court, as follows:
 “Surely, it would be most unfair to compel the
bank to continue employing Mrs. Galsim.
Reinstatement under the circumstances is
neither sound in reason nor just in principle. It
is irreconcilable with trust and confidence. That
confidence has been lost. And justifiably,
because by giving the money in violation of
bank rules, she actually did cause prejudice to
the bank. That act was inimical to the interests
of the bank. No one may begrudge the bank in
its well-grounded belief that an unfortunate
situation such as that which happened on
December 11 may in the future be repeated if
her services were retained.”
CASES:

 7. In PLDT vs. NLRC, 164 SCRA 671,

683, August 23, 1988, the Supreme
Court was emphatic that long service in
the company is not a favorable factor. On
the contrary it should be an aggravating
circumstance.
“The fact that she has worked with the PLDT
for more than a decade, if it is to be considered
at all, should be taken against her as it
reflects a regrettable lack of loyalty that
she should have strengthened instead of
betraying during all of her 10 years of service
with the company. If regarded as a justification
for moderating the penalty of dismissal, it will
actually become a prize for disloyalty,
perverting the meaning of social justice and
undermining the efforts of labor to cleanse its
ranks of all undesirables”
LABOR RELATIONS

END