Noel alleged that on January 2, 2013, he was hired as Assistant Vice President for Mining Services by Delta Earthmoving to take charge of the company’s human resources department and to perform other administrative functions. In June 2013, the company assigned him to work as Officer-in-Charge of the Oceana Gold Philippines, Inc. — Didipio Gold Project to assist in the operations while his immediate supervisor, Ian, was on roster break.
Noel claimed that on December 29, 2013, Ian instructed him to pack his things and to not report back to work since his employment was already terminated. On January 6, 2014, Noel confirmed from Ed, who was Delta Earthmoving’s Executive Vice President and Chief Operating Officer, the termination of his employment.
Noel stated that he was also asked to tender his resignation, but he refused. Instead, he filed the present complaint.
Delta Earthmoving maintained that Noel was validly dismissed due to poor performance, resulting in loss of trust and confidence.
To prove the just cause for the dismissal, Delta Earthmoving pointed to the Performance Evaluation and various memoranda indicating gross neglect of duty and inefficiency on the part of Noel, as follows:
- neglecting instructions from his superiors, such as truck hauling and volume studies;
- failing to improve KM 20 to serve as employees’ accommodation;
- failing to submit 2013 mine operations budget;
- delaying the submission of cost reports and billings, which delayed collection; and
- failing to perform his duties despite constant reminders.
Delta Earthmoving stated that Noel refused to receive the performance evaluation as he insisted on having performed his job well.
Aside from the presence of just cause, Delta Earthmoving also claimed to have complied with the requirements of procedural due process in terminating Noel’s employment.
The Office of the Labor Arbiter found that Noel was illegally dismissed, and it held Delta Earthmoving liable for payment of the awards.
Delta Earthmoving filed an appeal with an urgent motion to reduce appeal bond before the National Labor Relations Commission.
The Commission issued a Resolution, granting the prayer for reduction of appeal bond after considering Delta Earthmoving’s posting of a bond equivalent to ten percent (10%) of the monetary award to be reasonable and finding the grounds raised in the appeal to be meritorious.
On the main issue of illegal dismissal, the Commission held in the same Resolution that Noel was validly dismissed by reason of loss of trust and confidence. According to the Commission, Delta Earthmoving received reports of Noel’s failure to perform various tasks, and this led to the issuance of six memoranda relative to his work assignments. Delta Earthmoving conducted a performance evaluation, which Noel failed. While Noel denied these allegations, he did not present any proof that he turned in the required reports, or that he completed the assigned tasks.
On the procedural aspect of Noel’s dismissal from employment, the Commission ruled that Noel was afforded due process as his adamant refusal to submit a written explanation should not be taken against Delta Earthmoving.
Noel elevated the matter on certiorari to the Court of Appeals.
In its Decision, the Court of Appeals upheld the Commission’s judgment of Noel’s valid dismissal. Noel sought reconsideration but this too was denied.
Noel filed his petition before the Supreme Court
He claimed that Delta Earthmoving’s appeal should not have been given due course as there was no meritorious ground to justify the reduction of the appeal bond.
As for his dismissal, Noel insisted that the alleged loss of trust and confidence was not proven since he was not even apprised of his superiors’ alleged dissatisfaction with his performance. Noel added that he was not given copies of the memoranda and the Performance Management Form and was therefore deprived of the opportunity to submit his explanation.
Noel also pointed out that Hansen, his immediate superior, informed him of the good job he did on the mining site. In this regard, Noel contended that the Commission and the Court of Appeals failed to recognize that Hansen, who closely worked with him on-site, was in a better position to evaluate his work performance than his other superiors who were stationed in the Delta Earthmoving main office.
On the procedural aspect, Noel alleged that his termination was aggravated by Delta Earthmoving’s failure to give the required notices. Noel mentioned that Hansen asked him to leave the company premises after the Christmas break and told him to stop reporting for work upon instruction of Delta Earthmoving’s management. Noel stated that Ed also tried to convince him to execute a letter of resignation in exchange for payment of one month’s salary.
Was the Commission correct in giving due course to the appeal?
The Supreme Court ruled in the affirmative.
The Court cited Article 229 of the Labor Code of the Philippines which governs appeals in labor cases. The law provides that decisions, awards, or orders of the Office of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from.
The Court added that Section 4 (b), Rule VI of the 2011 NLRC Rules of Procedure, as amended, highlights the indispensable nature of the posting of a bond in appeals from the Office of the Labor Arbiter to the National Labor Relations Commission. Such rule states that a mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for perfecting an appeal.
The Court explained that the posting by the employer of a cash or surety bond is mandatory to assure the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the employer’s appeal. The requirement was designed to discourage employers from using an appeal to delay, or even evade, their obligation to satisfy their employees’ just and lawful claims.
In the present case, the Court found that Delta Earthmoving’s appeal was accompanied by a motion to reduce appeal bond, and by an amount equivalent to ten percent (10%) of the judgment award, which was posted as appeal bond.
The Court stressed that in order to stop the running of the period to perfect an appeal, a motion to reduce bond must comply with two conditions:
- the motion to reduce bond shall be based on meritorious grounds; and
- a reasonable amount of bond in relation to the monetary award is posted by the appellant.
Regarding “meritorious ground” the Court expounded that the same takes into account the respective rights of the parties and the attending circumstances and could pertain to either the appellant’s lack of financial capability to pay the full amount of the bond, the merits of the main appeal, the absence of an employer-employee relationship, prescription of claims, and other similarly valid issues that are raised in the appeal.
In the present case, the Court found that the Commission made a preliminary determination that Delta Earthmoving had a valid claim as there was no illegal dismissal to justify the award.
For the Supreme Court, the Commission did not err in giving due course to the appeal. Thus, the Supreme Court did not fault the Court of Appeals in sustaining the Commission’s approval of the motion to reduce the appeal bond, considering that the determination of the presence of a “meritorious ground” is a matter fully within the Commission’s discretion.
Was the dismissal of Noel from employment valid?
The Supreme Court ruled that Noel was illegally dismissed from employment.
The Court stated that Article 297 (c) of the Labor Code of the Philippines allows an employer to terminate an employment for willful breach by the employee of the trust reposed in him by his employer or duly authorized representative.
The Court explained that an employer cannot be compelled to retain an employee who is guilty of acts inimical to its interests, particularly one who has committed willful breach of trust under Article 297 (c). This is premised on the fact that an employee concerned holds a position where greater trust is placed by management and from whom greater fidelity to duty is correspondingly expected. However, to justify a valid dismissal based on loss of trust and confidence, the concurrence of two (2) conditions must be satisfied:
- the employee concerned must be holding a position of trust and confidence; and
- there must be an act that would justify the loss of trust and confidence.
The Court found that the first requisite was present in that the parties admitted that Noel was a managerial employee, thus held a position of trust and confidence. The Court noted that a great deal of Delta Earthmoving’s business relied on the competence of Noel.
As regards the second requisite, the Court discussed that in terminating managerial employees based on loss of trust and confidence, proof beyond reasonable doubt is not required. The mere existence of a basis for believing that such employee has breached the trust of his employer is enough. This degree of proof differs from that of a rank-and-file employee which requires proof of involvement in the alleged events, and that mere uncorroborated assertions by the employer will be insufficient. Despite the less stringent degree of proof involving managerial employees, jurisprudence is firm that loss of trust and confidence as a ground for dismissal has never been intended to afford an occasion for abuse due to its subjective nature. It must be genuine, not a mere afterthought intended to justify an earlier action taken in bad faith.
In the present case, the Court doubted the evaluation conducted on Noel’s performance based on the following findings:
- The date of evaluation and period covered were not indicated;
- Gaddi, the person who conducted the evaluation, was not competent to conduct the same since he was not Noel’s immediate supervisor;
- No copy of the evaluation was given to Noel. If Noel really refused to receive the same, Delta Earthmoving should have sent a copy of the same to Noel by registered mail.
For the Court, the Performance Evaluation was a mere afterthought to justify Noel’s termination from employment due to alleged poor performance.
On the other hand, the Court found that Ian’s email to Noel was telling in that Noel was commended for all the good work he had done at Didipio Gold Project.
At the same time, the Court discredited Delta Earthmoving’s memoranda which directed Noel to explain in writing certain acts of negligence because there was no showing that the same were served on Noel. The Court viewed the memoranda as concoctions on the part of the employer to strengthen its position against Noel. The Court emphasized that Delta Earthmoving should have instead submitted records revealing Noel’s dismal work performance. There being no showing of poor performance, gross negligence and inefficiency on Noel’s part, no basis supported the alleged loss of trust and confidence upon him.
The Court pointed out that loss of trust and confidence, as a ground for dismissal, may not be invoked arbitrarily. Managerial employees could not simply be dismissed on account of their position.
Moreover, the Court observed that Delta Earthmoving failed to comply with the requirements of procedural due process in the termination of Noel’s employment since the fact of his termination was only relayed to him by his immediate supervisor in the mining site, upon instructions received from Delta Earthmoving’s main office. Noel’s email correspondence with his supervisor even shows that he had to go to Delta Earthmoving’s office in Quezon City to verify for himself if his employment was indeed terminated.
Noel’s dismissal was thus declared illegal as he was denied his right to substantive and procedural due process.
The Court reminded employers that the misdeed attributed to the employee must be a genuine and serious breach of the established expectations required by the exigencies of the position regardless of its designation, and not a mere distaste, apathy, or petty misunderstanding. What is at stake are the employee’s reputation, good name, and source of livelihood, at the very least. Employment and tenure cannot be bargained away for the convenience of attaching blame and holding one accountable when no such accountability exists.
Further reading:
- Manrique v. Delta Earthmoving, Inc., G.R. No. 229429, November 9, 2020.
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