Paulino Ungos III

Lawyer | Law Professor | Author

Tag: 2020-01

  • Demonstrated Litigiousness of the Parties

    On 6 June 1996, Papertech hired Katando as a machine operator in its office at Pasig City.

    On 14 December 2013, Katando received a memorandum from Papertech stating that due to urgency of business, she will be transferred to its Makati office. The memorandum stated that she will still be under the same employment terms and conditions but will be tasked to clean the area.

    Papertech issued a memorandum dated 6 February 2014 to Katando reiterating her transfer to its Makati office. Thereafter, Papertech issued a notice to Katando requiring her to explain within 48 hours why she refused to receive the 6 February 2014 memorandum. Katando submitted her explanation.

    Papertech issued another notice to Katando on 17 February 2014 directing her to explain why she should not be administratively charged for refusing to transfer to its Makati office. Despite submitting her explanation, Papertech issued a notice on 24 February 2014 dismissing Katando for her insubordination. Katando filed a complaint for illegal dismissal against Papertech and its officers.

    The Office of the Labor Arbiter held that no just cause attended Katando’s dismissal. Papertech failed to prove the existence of a legitimate urgency which justified her transfer to the Makati office. In fact, Papertech did not disprove a certification from the Makati City Business Permit Office that it is not a registered entity in Makati City.

    Thus, the Office of the Labor Arbiter ordered Papertech to pay Katando backwages. However, Katando’s prayer for reinstatement was not granted. Instead, Papertech was ordered to pay her separation pay. According to the Office of the Labor Arbiter, “[t]he filing of the instant case and the attempts of Papertech to transfer the complainant have brought about antipathy and antagonism between them, thereby resulting to strained relationship.”

    Katando partially appealed to the National Labor Relations Commission.

    The National Labor Relations Commission agreed with the Office of the Labor Arbiter that separation pay should be given to Katando in lieu of her reinstatement. Katando went to the Court of Appeals.

    The Court of Appeals granted Katando’s petition and ordered Papertech to immediately reinstate her to her previous position without loss of seniority rights in addition to the award of backwages.

    The Court of Appeals ruled that the doctrine of strained relations cannot apply to Katando as she is part of the rank and file workforce and does not occupy a managerial or key position in the company. She even asked for her reinstatement. In addition, there is no proof of strained relations between her and Papertech. The fact that Katando and Papertech had been involved in several cases (illegal dismissal in connection with a strike and illegal suspension which happened around 2008) is not sufficient because no strained relations should arise from a valid and legal act of asserting one’s right.

    Papertech filed a motion for reconsideration but it was denied by the Court of Appeals.

    Issue:

    Whether the Court of Appeals erred in ordering the reinstatement of Katando instead of granting her separation pay.

    Ruling:

    In this case, the Supreme Court explained the doctrine of strained relations, which contemplates a situation where a monetary award is to be paid to an employee as an alternative to a reinstatement that can no longer be effected.

    According to the Court, the following factors should be considered in applying the doctrine of strained relations:

    • The employee must occupy a position where he or she enjoys the trust and confidence of his or her employer;
    • It is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned;
    • It cannot be applied indiscriminately because some hostility is invariably engendered between the parties as a result of litigation; and
    • It cannot arise from a valid and legal act of asserting one’s right.

    The doctrine cannot apply when the employee:

    • has not indicated an aversion to returning to work;
    • does not occupy a position of trust and confidence; or
    • has no say in the operation of the employer’s business.

    Furthermore, strained relations between the parties must be proven as a fact.

    In the present case, the Court noted that Katando did not occupy a position of trust and confidence as a machine operator. However, the Court found it apt to apply the doctrine of strained relations.

    Although acknowledging that litigation between the parties per se should not bar the reinstatement of an employee, the Court found the present case was not the only case that involved Papertech and Katando. Papertech and Katando had been in conflict for more than 10 years. The length of time from the occurrence of the incident to its resolution and the demonstrated litigiousness of the parties showed that their relationship is strained. Protracted litigation between the parties here sufficiently demonstrated that their relationship was already strained.

    Papertech had not even bothered to appeal the ruling of the Labor Arbiter, and even stated that “in order not to prolong the proceedings, and for both parties to peacefully move on from this unwanted situation, Papertech is willing to pay the judgment award of separation pay.” The Court took this as a confirmation that Papertech no longer wanted Katando back as its employee.

    Moreover, what remained in the Pasig City premises of Papertech was its sales, marketing, and distribution operations since its manufacturing and production departments were transferred to the province. Consequently, the position held by Katando was abolished. Katando’s reinstatement as a machine operator in Papertech’s Pasig City premises was no longer possible.

    The Court awarded separation pay to Katando, being the only viable option under the circumstances.

    Further reading:

    • Papertech, Inc. v. Katando, G.R. No. 236020, January 8, 2020.

  • I Didn’t Report for Work Because You Failed to Answer My Query

    In 2002, respondent company GRRI hired Neren as a part-time employee in its resort, LLB Resort and Spa. She became a regular employee on 1 February 2003, and was eventually promoted as head of the Housekeeping Department in 2005 and as head of the Front Desk Department in 2008.

    Sometime in 2013, Neren was charged with and found guilty of violating company policies, i.e., abuse of authority, when she rejected walk-in guests without management approval, and threat to person in authority, when she threatened the assistant resort manager with physical harm. Neren was meted the penalty of seven days suspension without pay, subject to the agreement that Neren would be under strict performance monitoring and that any further violation which would warrant suspension would be elevated to immediate dismissal. After serving her suspension, Neren resumed her task.

    In March 2014, GRRI implemented a reorganization in LLB Resort and Spa and issued a Notice to Transfer to Neren. Through the Notice to Transfer, she was informed of the reorganization within LLB Resort and Spa and was advised that she would be laterally transferred from the Reception Department to the Storage Department without diminution in rank and benefits.

    However, Neren refused to sign the Notice to Transfer and remained at the reception area for two days before reporting to her new station on 4 March 2014. Neren also sent an e-mail addressed to GRRI on 9 March 2014 asking questions regarding her transfer.

    On 10 March 2014, a Memorandum was issued to Neren directing her to explain within 24 hours from notice why she should not be penalized for insubordination for her repeated failure to sign the Notice to Transfer. In her handwritten letter dated 11 March 2014, Neren explained that she refused to sign the Notice to Transfer pending answers to the questions she sent to GRRI via e-mail.

    GRRI also issued Neren a Notice of Preventive Suspension on 14 March 2014 placing her under preventive suspension until 21 March 2014 pending resolution of the charge against her.

    Neren, however, failed to report back to work after the lapse of the period of her preventive suspension on 22 March 2014 until 26 March 2014. Thus, on 26 March 2014, GRRI’s Human Resource (HR) department issued Neren another Memorandum directing her to report to the HR department within 24 hours and to explain her absences without leave.

    Upon reporting thereat, Neren was handed a Termination Notice dated 21 March 2014 advising her that GRRI found her guilty of:

    • “inhuman and unbearable treatment to person in authority; abuse of authority; serious misconduct — insubordination by not accepting her memorandum of re-assignment by the Executive Committee; and
    • gross and habitual neglect of duties — AWOL”

    Can Neren’s employment be terminated on the ground of insubordination for her failure to sign the Notice to Transfer?

    No.

    In an illegal dismissal case, the onus probandi rests on the employer to prove that the employee’s dismissal was for a valid cause. A valid dismissal requires compliance with both substantive and procedural due process — that is, the dismissal must be for any of the just or authorized causes enumerated in Article 297 1Formerly Article 282. and Article 298 2Formerly Article 283., respectively, of the Labor Code of the Philippines, and only after notice and hearing3Under paragraph (b) of Article 292 (formerly Article 277) of the Labor Code of the Philippines..

    Insubordination or willful disobedience requires the concurrence of the following requisites: (1) the employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a “wrongful and perverse attitude”; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge.4Gold City Integrated Port Services v. National Labor Relations Commission, G.R. No. 86000, September 21, 1990, 267 PHIL 863-875.

    The Supreme Court ruled that both requirements were not present in this case.

    The Court found that as stated by Neren in her handwritten explanation, she withheld her signature on the Notice to Transfer because she was awaiting answers to the questions she raised to GRRI via e-mail. She could not be forced to affix her signature thereon if she did not really fully understand the reasons behind and the consequences of her transfer. While her action was willful and intentional, it was nonetheless far from being “wrongful and perverse.” The Court added, respondents failed to prove that there was indeed an order or company procedure requiring a transferee’s written conformity prior to the implementation of the transfer, and that such order or procedure was made known to Neren.

    Given the foregoing, there was no basis to dismiss Neren on the ground of insubordination for her mere failure to sign the Notice to Transfer.

    Was there cause to terminate Neren’s employment on the ground of gross and habitual neglect for her absences without leave from 22 to 26 March 2014?

    No, because the Court found that Neren’s four-day absence without leave could not be characterized as gross and habitual neglect of her duties.

    Jurisprudence5National Bookstore, Inc. v. Court of Appeals, G.R. No. 146741, February 27, 2002, 428 PHIL 235-249 and Cavite Apparel, Inc. v. Marquez, G.R. No. 172044, February 6, 2013, 703 PHIL 46-58. provides that in order to constitute a valid cause for dismissal, the neglect of duties must be both gross and habitual. Gross negligence has been defined as “the want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.” On the other hand, habitual neglect “imparts repeated failure to perform one’s duties for a period of time, depending on the circumstances.” A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee.

    Since the above-mentioned grounds failed to justify Neren’s dismissal from employment, should such dismissal be declared illegal?

    No, because the Court, nonetheless, found that Neren’s absences from 22 to 26 March 2014 were still without justification. Therefore, while there may be no basis to dismiss her on the grounds of insubordination and gross and habitual neglect, Neren was still guilty of having committed a violation. For the Court, the principle on totality of infractions may thus be considered in determining the imposable sanction for her current infraction.

    Under jurisprudence6Merin v. National Labor Relations Commission, G.R. No. 171790, October 17, 2008, 590 PHIL 596-604., the totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring employee.

    The Court said that the offenses committed by Neren should not be taken singly and separately. Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct and ability separate and independent of each other. While it may be true that Neren was penalized for his previous infractions, this did not and should not mean that her employment record would be wiped clean of her infractions. After all, the record of an employee is a relevant consideration in determining the penalty that should be meted out since an employee’s past misconduct and present behavior must be taken together in determining the proper imposable penalty. Despite the sanctions imposed upon Neren, she continued to commit misconduct and exhibit undesirable behavior on board. Indeed, the employer could not be compelled to retain a misbehaving employee, or one who was guilty of acts inimical to its interests. It had the right to dismiss such an employee if only as a measure of self-protection.

    In the present case, Neren alleged that she did not report back to work after serving her preventive suspension because GRRI did not reply to her query as to when she needed to report. However, the Court ruled that this reasoning did not justify her absences. The Notice of Preventive Suspension served on her clearly stated that the period of her preventive suspension was from 14 to 21 March 2014. Thus, she was expected to report back to work on her next working day. The Court noted that GRRI had already previously warned Neren that the penalty for her next infraction would be elevated to dismissal. For the Court, the dismissal of Neren, on the basis of the principle of totality of infractions, was justified.

    What consequence does this new finding have insofar as procedural due process is concerned?

    The Court ruled that Neren’s dismissal could be said to suffer from procedural lapses.

    Jurisprudence7King of Kings Transport, Inc. v. Mamac, G.R. No. 166208, June 29, 2007, 553 PHIL 108-119. has delineated the requirements of procedural due process for termination of employment, viz.:

    (1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. “Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. [297] is being charged against the employees.

    In the present case, GRRI failed to observe the foregoing requirements, as follows:

    • While the Termination Notice cited four grounds for Neren’s dismissal, the Memorandum dated 10 March 2014 only charged Neren with insubordination for her refusal to sign the Notice to Transfer.
    • Neren was only given 24 hours to submit an explanation.
    • No administrative hearing was held, or even scheduled.
    • The Termination Notice already cited Neren’s absences without leave as ground for her dismissal even before she was even given any opportunity to be heard.

    The Court ruled that Neren should be awarded nominal damages.

    Further reading:

    • Villanueva v. Ganco Resort and Recreation, Inc., G.R. No. 227175, January 8, 2020.

  • Sole Owner-Cultivator

    Presentacion is the eldest daughter of the late Ireneo, an Operation Land Transfer beneficiary of agricultural land in Iloilo.

    Mariano, in turn, is the husband of Presentacion’s younger sister, Vicenta.

    After the death of Vicenta, Presentacion sought to recover possession of the said agricultural land from Mariano. Thus, on 16 March 2001, Presentacion filed a case against Mariano for ejectment from the said land. Presentacion asserts that Mariano illegally possessed the said agricultural land and deprived her of possession of the same. Presentacion thus prayed that Mariano be ordered to vacate the agricultural land.

    Mariano admitted his refusal to turn over the land. However, he denied that his possession was illegal. According to Mariano, his possession of the land was by virtue of being a tenant on the land because he had continuously worked thereon for more than 30 years and had fully paid its amortization with the Land Bank of the Philippines. Mariano added that Presentacion had neither cultivated nor possessed the land nor paid a single centavo for its amortization.

    With the death of Ireneo (the beneficiary) to whom should the agricultural land be transferred?

    Presentacion has the right to possess the subject agricultural land since she is its qualified sole owner-cultivator. Mariano has to vacate the same.

    Presidential Decree No. 27 provides:

    Title to land acquired pursuant to this Decree or the Land Reform Program of the Government shall not be transferable except by hereditary succession or to the Government in accordance with the provisions of this Decree, the Code of Agrarian Reforms and other existing laws and regulations.1Emphasis supplied.

    In the present case, the subject agricultural land had been granted to the late Ireneo, the original farmer-beneficiary, pursuant to Presidential Decree No. 27. Applying the provisions of the said law, the transferability of said land upon Ireneo’s death could be through hereditary succession in accordance with the provisions of Presidential Decree No. 27 and relevant regulations.

    The Department of Agrarian Reform2Formerly the Ministry of Agrarian Reform promulgated Memorandum Circular No. 19, Series of 1978, or the Rules and Regulations in Case of Death of a Tenant-Beneficiary. This Memorandum Circular implemented the limitation on transferability set forth in Presidential Decree No. 27 for the purpose of carrying out the Government’s declared policy of establishing “owner-cultivatorship x x x as the basis of agricultural development of the country.”

    The pertinent provisions of Memorandum Circular No. 19 state:

    1. Succession to the farmholding covered by [OLT], shall be governed by the pertinent provisions of the New Civil Code of the Philippines subject to the following limitations:

    x x x

    b. The ownership and cultivation of the farmholding shall ultimately be consolidated in one heir who possesses the following qualifications:

    (1) being a full-fledged member of a duly recognized farmers’ cooperative;

    (2) capable of personally cultivating the farmholding; and

    (3) willing to assume the obligations and responsibilities of a tenant-beneficiary.

    2. For the purpose of determining who among the heirs shall be the sole owner-cultivator, the following rules shall apply:

    x x x

    b. Where there are several heirs, and in the absence of extra-judicial settlement or waiver of rights in favor of one heir who shall be the sole owner and cultivator, the heirs shall within one month from death of the tenant-beneficiary be free to choose from among themselves one who shall have sole ownership and cultivation of the land, subject to Paragraph 1(b) and (c) hereof: Provided, however, That the surviving spouse shall be given first preference; otherwise, in the absence or due to the permanent incapacity of the surviving spouse, priority shall be determined among the heirs according to age.

    c. In case of disagreement or failure of the heirs to determine who shall be the owner-cultivator within the period prescribed herein, the priority rule under the proviso of Paragraph 2(b) hereof shall apply.3Emphasis supplied.

    In the present case, Mariano did not dispute that Presentacion was the oldest surviving heir of Ireneo at the time of the latter’s death. Also, Mariano did not assail that Presentation possessed the qualifications necessary to succeed Ireneo as new owner-cultivator under Memorandum Circular No. 19, Series of 1978. Thus, in the absence of any extra-judicial settlement assigning in Vicenta’s (Mariano’s wife) favor the priority right to become sole owner and cultivator of the disputed lots, Mariano’s claim of possession was left with no leg to stand on.

    Further reading:

    • Golez v. Abais, G.R. No. 191376, January 8, 2020.

  • We’ve Already Assigned Our Shares to Another Person

    On 6 December 2005, the Social Security System filed a petition for the issuance of a warrant of levy and garnishment of the personal properties and bank accounts of the directors of a dissolved corporation to satisfy its unremitted contributions and penalties.

    In their defense, A and B (both directors) averred that they had already assigned their respective shares to certain persons on 5 May 1998. According to A and B, they already ceased to be directors and were no longer connected in any capacity with the corporation at the time of the alleged non-remittance of the contributions. A and B stress that since their Deed of Assignment was notarized, the assignment was binding upon third parties, including the Social Security System.

    Can a director of a dissolved corporation be held solidarily liable for its unremitted Social Security System contributions?

    The Supreme Court ruled in the affirmative. It found that the Social Security System was not bound to recognize the transfer, there being no showing that the transfer of their shares was recorded in the books of the corporation. Furthermore, under prevailing jurisprudence,1Philex Gold Phil. Inc. v. Philex Bulawan Supervisors Union, G.R. No. 149758, August 25, 2005, 505 PHIL 224-240. a corporate director may be held jointly and severally liable with the corporation when a director, trustee or officer is made, by a specific provision of law, personally liable for his corporate action. In this regard, the Supreme Court pointed to Section 28 (f) of the Social Security Act of 1997,2NOTE: This provision also appears in the Social Security Act of 2018 (Republic Act No. 11199) as follows: “SECTION 28. Penal Clause. — x x x (f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable for the penalties provided in this Act for the offense.” which reads:

    “Sec. 28. Penal Clause. — x x x

    “(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable to the penalties provided in this Act for the offense.”

    Further reading:

    • Dox & Parcel Courier Express International, Inc. v. Social Security System, G.R. No. 225648, January 8, 2020.