Paulino Ungos III

Lawyer | Law Professor | Author

Tag: 2021-02

  • Not a Mere Run-of-the-Mill Employee

    Arlene started working as a Casual or Assistant Clinical Instructor for two semesters for the school year 1992-1993 in Holy Name University (HNU)’s College of Nursing while awaiting the results of her Nursing Board Examination.

    In the second semester of school year 1994-1995, she worked at the Medical Ward as a full-time Clinical Instructor until the school year 1998-1999. During the second semester of that school year, she transferred to the Guidance Center where she worked as a Nursing Guidance Instructor. In the meantime, she was elected as Municipal Councilor of Carmen, Bohol. She took a leave of absence from HNU upon her reelection as Municipal Councilor for the period from 2001 up to 2004.

    Sometime in the year 2004, Arlene rejoined HNU and was given a full-time load for the school year 2004-2005. For school years 2005-2006 and 2006-2007, Arlene signed contracts for term/semestral employment.

    However, in a notice dated February 28, 2007, HNU informed Arlene that her contract of employment, which would have expired on March 31, 2007, will no longer be renewed.

    Arlene filed a complaint for illegal dismissal against HNU. She argued that since she taught at HNU for more than six consecutive regular semesters, she already attained the status of a regular employee under the Manual of Regulations for Private School Teachers. She posited that she was not guilty of any infractions under the Labor Code of the Philippines or the Manual of Regulations for Private School Teachers. She concluded that she was illegally dismissed from employment as no valid or justifiable cause supported the same.

    On the other hand, HNU stated that for the school years 1995-1996, 1996-1997 and 1997-1998, Arlene received letters of appointment for each semester, with definite dates of commencement and end of her employment. Thus, HNU asserted that when her probationary appointment for the period June 1, 1997 until March 31, 1998 expired, that it was not obliged to renew her contract. With regard to the school years 2004-2005, 2005-2006, and 2006-2007, HNU contended that Arlene remained as a probationary employee.

    HNU stated that the completion of her probationary period did not automatically make her a permanent employee since she failed to satisfactorily comply with all the conditions of her probationary employment. HNU insisted that Arlene was not dismissed; rather, her contract of employment merely expired on March 31, 2007.

    Did Arlene attain regular status?

    The Supreme Court ruled in the negative.

    The Court reiterated prevailing jurisprudence in that the Manual of Regulations for Private Schools, not the Labor Code of the Philippines, determines whether or not a faculty member in a private educational institution has attained a permanent or regular status. According to the Court, before a private school teacher acquires permanent status, he or she should satisfy the following requisites: 1) The teacher must have served full-time; 2) he/she must have rendered three consecutive years of service; and 3) such service must have been satisfactory.

    In the present case, the Court found that Arlene failed to meet the required criteria to be considered as a permanent employee.

    According to the Court, prevailing regulations require a minimum of one-year clinical practice experience to qualify as a faculty member in a college of nursing, and is therefore, required for one to be considered as a full-time faculty of such.

    Although Arlene had rendered three consecutive years of satisfactory service, she never alleged to have performed clinical duties such as treating actual patients or assisting doctors in such treatment, nor did she present any substantial evidence to prove such. The Court stated that since Arlene failed to provide substantial evidence, much less clearly describe what kind of work she rendered as a clinical instructor, it could not consider Arlene’s work experience as “clinical practice.” For the Court, Arlene did not qualify as a full-time teacher at the College of Nursing of HNU.

    Based on evidence, the Court declared Arlene to be a fixed-term employee of HNU.

    The Court reiterated established jurisprudence that recognizes the validity of fixed-term employment contracts, as long as such contracts do not circumvent the employee’s right to security of tenure. According to the Court, the criteria under which fixed-term employment could not be said to be in circumvention of the law on security of tenure are the following:

    • The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or
    • It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter.

    In the present case, the Court considered Arlene’s part-time status and ruled that even if no written fixed-term contract was presented, judicial notice can be made upon the fact that teachers’ employment contracts are for a specific semester or term.

    The Court added that with respect to consent, the fixed-term contracts must be presumed to be knowingly and voluntarily entered into. It is a basic rule that “one who alleges defect or lack of valid consent to a contract by reason of fraud or undue influence must establish by full, clear and convincing evidence such specific acts that vitiated a party’s consent, otherwise, the latter’s presumed consent to the contract prevails.”

    In the present case, Arlene merely alleged that she was a regular employee and that her being a contractual employee was just a lame reason given by HNU to terminate her without due process. The Court viewed such allegations as self-serving and unsubstantiated that failed to overturn the presumption mentioned earlier.

    With regard to the second requisite, the Court found that Arlene was more or less on equal footing with HNU. According to the Court, Arlene was an honors graduate, an elected public official, and not a mere run-of-the-mill employee, who had the capability to be on equal footing in dealing with her employer when it came to her employment terms.

    The Court concluded that Arlene was validly contracted for a fixed-term, the expiry of which occurred with her latest contract on March 31, 2007. Such effectively ended the employee-employer relationship she had with HNU. No dismissal, whether illegal or not, ever happened. The Court accordingly denied her claims.

    Further reading:

    • Palgan v. Holy Name University, G.R. No. 219916, February 10, 2021.

  • Inconsistent Evidence and Unexplained Material Facts

    Jerome was hired by respondent ELPI in 1998 as a Professional Sales Representative. After several promotions, he was retrenched in 2003. He was rehired in 2005 and held the position of Sales and Marketing Services Manager in 2011.

    On November 4, 2011, ELPI issued a Show-Cause Letter, charging Jerome with violation of company rules and breach of trust and confidence. ELPI claims that on May 14, 2008, or more than three years back, Jerome simulated the purchase of four tires from a certain tire supplier and claimed reimbursement for the cost. He was placed under preventive suspension for 30 days. ELPI did not reveal the source of the damning information against Jerome.

    Jerome submitted his explanation and questioned ELPI’s failure to identify the source of the damaging information.

    In response, ELPI attached a copy of the official receipt, sales invoice, and car repairs request relating to the tire supplier.

    Jerome then submitted a certification dated December 7, 2011 issued by Lilia, proprietor of the tire supplier, stating that she issued the official receipt under the name of ELPI for the purchase of four tires.

    During the formal investigation, ELPI confronted Jerome with a notarized certification dated December 17, 2011 from Arnulfo, the husband of Lilia, stating that Jerome did not purchase tires from her. However, record showed that Arnulfo issued another statement dated December 20, 2011 acknowledging that he lacked knowledge of the sale and that his wife was the one who issued the official receipt.

    On December 21, 2011, Jerome was issued a Notice of Termination, prompting him to file a Complaint for illegal dismissal against ELPI.

    When ELPI filed its position paper, it presented two affidavits. First was the affidavit of Timothy dated December 18, 2011. Timothy narrated that Jerome directed him to obtain a receipt for the purchase of tires. Timothy further narrated that he obtained the receipt from the tire supplier and gave it to Jerome who, in turn, used it to obtain reimbursement. The second was the affidavit of Sojit dated December 19, 2011, who narrated that sometime in 2009, Timothy told him of Jerome’s directive to produce a receipt, of Jerome’s anger should Timothy fail to do so, and of Timothy’s fear during the conversation.

    The Office of the Labor Arbiter declared the dismissal of Jerome valid. The NLRC, however, ruled that Jerome was illegally dismissed from employment. The Court of Appeals’ ruling was that Jerome was validly dismissed.

    Was Jerome illegally dismissed from employment?

    The Supreme Court reiterated the settled rule that the employer has the right to terminate the services of an employee for a just or authorized cause.1Mayon Hotel & Restaurant v. Adana, G.R. No. 157634, [May 16, 2005], 497 PHIL 892-932 The dismissal of employees must, however, be made within the parameters of law and pursuant to the tenets of fair play. “[I]n termination disputes, the burden of proof is always on the employer to prove that the dismissal was for a just or authorized cause. Where there is no showing of a clear, valid and legal cause for termination of employment, the law considers the case a matter of illegal dismissal.”

    Here, the Court remarked that during the administrative proceedings, ELPI had in its possession the official receipt, the sales invoice, the repairs request, Lilia’s statement, and the two contradicting statements of Arnulfo, as basis for its decision that Jerome committed dishonesty.

    However, the Supreme Court ruled that Jerome was illegally dismissed from employment because of ELPI’s failure to prove by substantial evidence the presence of a just cause for terminating Jerome’s employment. Specifically, ELPI had failed to show through substantial evidence that Jerome simulated the tire purchase transaction.

    Re: the official receipt, sales invoice, repairs request and Lilia’s certification

    The Court found that the official receipt, sales invoice, repairs request and Lilia’s certification only revealed the genuine transaction conducted by Jerome.

    The Court presumed the official receipt to be regular and in accordance with the ordinary course of business.2Section 3 (p) and (q), Rule 131, of the Rules of Court.

    Although noting the doubt expressed by the Court of Appeals on Jerome’s transaction because he presented an old receipt, the Supreme Court, nonetheless, stated that an old official receipt did not lead to Jerome’s guilt, especially in the face of Lilia’s undisputed certification to having herself issued the receipt for the purchase of four tires. According to the Court, that Lilia used an old receipt did not mean that the purchase of the tires did not happen.

    With regard to the repairs request, the Court found that it was approved by ELPI through its Human Resource Department (HRD) Manager, who had the duty to first ascertain that repairs were actually conducted on the car.

    For the Court, the said pieces of evidence contained no indication that Jerome simulated the sale and that no anomaly characterized Jerome’s claim for reimbursement.

    Re: Arnulfo’s statements

    The Court added that the evidence that would have contradicted Lilia’s statement was Arnulfo’s first statement. However, given the inconsistencies in Arnulfo’s two statements, the fact that Lilia sold tires to ELPI over which Jerome claimed reimbursements remained undisputed at the time of the administrative proceedings conducted by ELPI.

    Re: the affidavits of Timothy and Sojit

    The Court considered the affidavits unreliable given the circumstances under which they were executed.

    According to the Court, since the affidavits and their contents were only made known to Jerome when ELPI submitted its Position Paper, the presentation of the same was an attempt to validate Jerome’s termination post facto. These new allegations contained in the affidavits, the Court said, were not available at the time ELPI conducted the administrative hearing. It could therefore not have been its basis for dismissing Jerome.

    The Court even stated that even if it were to consider these affidavits, it would find it unusual for ELPI to not have initiated administrative proceedings against Timothy. The Court added that ELPI had not even explained why it took Timothy more than three years to inform ELPI of such simulated sale.

    Re: additional findings

    Other matters on record led the Court to doubt the validity of Jerome’s dismissal.

    First, despite the fact that Jerome’s tire transaction was readily verifiable, ELPI did not explain why it still initiated administrative proceedings against Jerome three years after his request for reimbursement was made and approved by ELPI’s HRD Manager. The Court pointed out that Timothy and the HRD Manager were not even directed to explain their participation in the purported simulation and approval of the reimbursement, respectively.

    Second, ELPI was the one who introduced as evidence the statement of Arnulfo that Jerome did not purchase any tires from the tire supplier, only for Arnulfo to issue a statement of recantation later.

    And third, on May 9, 2018, Jerome filed with the Court a Manifestation with Motion to Admit Attached Affidavit of Recantation. Jerome informed the Court that Sojit communicated to him the severance of the latter’s connection with ELPI. Sojit likewise disclosed that he was pressured to sign his purported affidavit dated December 19, 2011, under threats of including him in the investigation and dismissal should he refuse. Hence, on April 4, 2018, Sojit executed an Affidavit of Recantation, denying the events narrated in his affidavit dated December 19, 2011.

    Conclusion:

    The Court concluded that ELPI failed to show a clear, valid and legal cause to dismiss Jerome. According to the Court, the pieces of evidence ELPI presented were riddled with inconsistencies and unexplained material facts that leave much to be desired. Jerome’s dismissal was accordingly declared illegal.

    Further reading:

    • Bautista v. Eli Lilly Philippines, Inc., G.R. No. 235865, February 3, 2021.

  • Circumstances Revealed Voluntary Resignations

    Hazel was engaged by University of Saint Anthony as a credit and collection officer. Arlene was engaged as its accounting clerk. Jean was its classroom teacher. And Nancy was its accounting officer.

    With regard to Hazel, University of Saint Anthony noticed several irregular and anomalous transactions its University’s Accounting Office by way of a cash shortage of more than One Million Pesos representing the net collection of book remittances. Another audit report revealed anomalous transactions in prior years where tellers accommodated encashments of checks not in the name of University of Saint Anthony. Hazel went on leave during the audit, but later tendered her resignation. Record showed that University of Saint Anthony filed a criminal case and an information was filed before the Regional Trial Court.

    At around the same period, Arlene, Jean, and Nancy were found to have taken advantage of their positions in the Accounting Office by enrolling their children and relatives under the University’s group enrollment incentive program despite knowing that they were unqualified. Upon discovery of the fraudulent scheme, University of Saint Anthony immediately ordered an investigation and called a conference with Arlene, Jean and Nancy. During a conference, Arlene, Jean, and Nancy admitted that their children and relatives indeed benefitted from the unauthorized discounts. They were informed that their employment will be terminated on grounds of dishonesty amounting to malversation of school funds. Thereafter, Arlene, Jean, and Nancy tendered their resignation on December 22, 2007 (taking effect on January 2, 2008). Subsequently, University of Saint Anthony filed criminal cases Arlene, Jean, and Nancy.

    Hazel, Arlene, Jean, and Nancy soon filed their respective complaints for illegal dismissal against University of Saint Anthony.

    The Office of the Labor Arbiter declared their dismissal illegal and granted them the reliefs of reinstatement and backwages. On appeal, the National Labor Relations Commission reversed the decision of the Office of the Labor Arbiter because it found that the Hazel, Arlene, Jean and Nancy voluntarily resigned and opted for a voluntary exit before the effectivity of their supposed termination from employment. The Court of Appeals affirmed the Decision of the National Labor Relations Commission.

    An issue raised before the Supreme Court was whether the resignations of Hazel, Arlene, Jean, and Nancy rendered their complaints for illegal dismissal without basis.

    The Supreme Court ruled that Hazel, Arlene, Jean, and Nancy voluntarily resigned from employment.

    Jurisprudence teaches that resignation is the formal pronouncement or relinquishment of a position or office. It is the voluntary act of an employee who is in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and he has then no other choice but to disassociate himself from employment. The intent to relinquish must concur with the overt act of relinquishment; hence, the acts of the employee before and after the alleged resignation must be considered in determining whether he in fact intended to terminate his employment. In illegal dismissal cases, it is a fundamental rule that when an employer interposes the defense of resignation, on him necessarily rests the burden to prove that the employee indeed voluntarily resigned. For resignation from employment to be valid, there must be an intent to relinquish the position together with the overt act of relinquishment. Resignation must be voluntary. In illegal dismissal cases, the employer, if defense of resignation is presented, must show that the employee indeed voluntarily resigned.

    In the present case, the Court ruled that the fact of resignation by Hazel, Arlene, Jean, and Nancy was undisputed. It found that Hazel tendered her resignation on July 27, 2007, while Arlene, Jean, and Nancy tendered their resignation on December 22, 2007. Said resignations were found to have been approved by University of Saint Anthony.

    According to the Court, University of Saint Anthony correctly argued that Hazel, Arlene, Jean, and Nancy had voluntarily tendered their resignation before filing their complaints for illegal dismissal. The Court noted that ruling of the National Labor Relations Commission that this event rendered their complaints for illegal dismissal without basis as the employment relationship was severed before the effectivity date of its termination. The Court also noted that notwithstanding such ruling, Hazel, Arlene, Jean, and Nancy, no longer contested the same but insisted that there they were illegally dismissed.

    The Court considered the totality of circumstances, and ruled that University of Saint Anthony showed that Hazel, Arlene, Jean, and Nancy voluntarily resigned prior to the effectivity date of the termination of their employment. It was found that ongoing investigations were conducted relative to the irregular acts imputed to Hazel, Arlene, Jean, and Nancy thereby placing them in a difficult position. Although the Court acknowledged that wordings in resignations letters are not the sole test of voluntariness, the wording of the resignation letters of Hazel, Arlene, Jean, and Nancy, together with other circumstances found by the Court, showed the voluntariness of their resignations. The Court also emphasized that Hazel, Arlene, Jean, and Nancy neither contended nor presented countervailing evidence that their resignation was involuntary. The Court added the settled rule that there is nothing reprehensible or illegal when the employer grants the employee a chance to resign and save face rather than smear the latter’s employment record.

    In view of the voluntary resignations of Hazel, Arlene, Jean, and Nancy prior to the termination of their employment, the Court concluded that their complaints for illegal dismissal had no basis.

    Further reading:

    • Bance v. University of St. Anthony, G.R. No. 202724, February 3, 2021.

  • But the Claims Exceeded Php5,000.00

    On February 12, 2014, the Department of Labor and Employment, through its Regional Director, issued Labor Standards Compliance Certificates to Del Monte Motor Works, Inc. (Del Monte Motor Works) for having complied with Department Order No. 118-12, other labor laws, rules and regulations.

    For context, Department Order No. 118-12 was issued on January 13, 2012 by the Department of Labor and Employment, in the exercise of its rule-making power. The issuance provides for a fixed and performance compensation scheme in the computation of public utility bus driver’s or conductor’s wage. Its goal was to ensure public road transport safety by improving the working conditions, compensation and competence of bus drivers and conductors thereby eliminating their risk-taking behavior.

    On July 28, 2014, a complaint for money claims was filed against Del Monte Land Transport Bus, Co., Inc. (Del Monte Land Transport) by its bus drivers and conductors before the Office of the Labor Arbiter.

    They averred that since the start of their employment, they have yet to receive certain labor standards benefits and their daily salaries were below the prevailing daily minimum wage, in violation of Department Order No. 118-12.

    Del Monte Land Transport contended that the salaries and benefits of its drivers and conductors were in accordance with law and that its Labor Standards Compliance Certificates established compliance with labor standards requirements. Furthermore, it raised the issue of jurisdiction. Specifically, it claimed that the Office of the Labor Arbiter had no jurisdiction to render judgment or award on the money claims since it was the Department of Labor and Employment which had jurisdiction under Article 128 of the Labor Code of the Philippines.

    In asserting that the Office of the Labor Arbiter had jurisdiction, the drivers and conductors argued:

    • Their money claims fell within the cases covered by Article 217 of the Labor Code of the Philippines as it exceeded the aggregate amount of five thousand pesos. Hence, the authority to hear and decide said cases is vested on the Office of the Labor Arbiter, to the exclusion of all other courts or quasi-judicial bodies or tribunals;
    • No complaint was filed before the Department of Labor and Employment for the latter to exercise its jurisdiction over their claim.
    • Neither was there any inspection conducted at Del Monte Land Transport as the Labor Standards Compliance Certificates in question were issued for the alleged compliance of Del Monte Motor Works, a separate and distinct corporation.
    • In issuing the Labor Standards Compliance Certificates, the Department of Labor and Employment exercised its visitorial and compliance powers under Article 128 (b) and not its enforcement and adjudicatory powers under Article 129 of the Labor Code.

    Did the Office of the Labor Arbiter have jurisdiction over the claims of the drivers and conductors?

    The Supreme Court ruled in the negative. This was because Department Order No. 118-12 clearly conferred jurisdiction with the Regional Office the claims of the bus drivers and conductors.

    The Court stressed that jurisdiction over the subject matter or authority to try a certain case is conferred by law and not by the whims, consent or acquiescence of the interested parties nor by the erroneous belief of the court or tribunal that it exists. It should be exercised precisely by the person in authority or body in whose hands it has been placed by the law; otherwise, acts of the court or tribunal shall be void and with no legal consequence.

    In the present case, the Regional Director issued several Labor Standard Compliance Certificates dated February 12, 2014, certifying Del Monte Land Transport’s compliance with the law. Five months after or on July 28, 2014, the bus drivers and conductors filed a complaint before the Office of the Labor Arbiter for money claims and alleged a violation of the requirements of Department Order No. 118-12 in their Position Paper.

    According to the Court, this fact should have prompted the Office of the Labor Arbiter to refer the case to the Department of Labor and Employment as it was evident that the money claims of the bus drivers and conductors were beyond its jurisdiction.

    Furthermore, the Court noticed the categorical statement of the bus drivers and conductors that they would not have filed the instant case for money claims had there been real compliance of the mandate of Department Order No. 118-12. The Court stated that such statement only revealed that the claims were the offshoot of the Regional Officer’s issuance of the certificates of compliance.

    For the Court, this constituted a challenge by the bus drivers and conductors on the certificates of compliance issued by the Regional Officer relative to the labor standard requirements under Department Order No. 118-12, which should have been lodged before the Department of Labor and Employment.

    On the other hand, the Court did not accept the argument of the bus drivers and conductors that jurisdiction over their claims was vested with the Office of the Labor Arbiter given that the aggregate amount subject of this case exceeded five thousand pesos.

    The Court stated that Article 128 of the Labor Code of the Philippines speaks of the jurisdiction of the Secretary of Labor and his representatives over labor standards violations based on findings made in the course of visitation and inspection of the business premises of an employer. The Court emphasized that the authority under Article 128 may be exercised by the Department of Labor and Employment regardless of the amount of the award claimed for provided there exists employer-employee relationship.

    The Court noted certain views espousing the proposition that the mode and fora by which the action has been initiated should determine jurisdiction. However, the Court clarified that this had been settled in People’s Broadcasting Service v. Secretary of the Department of Labor and Employment1People’s Broadcasting Service v. Secretary of the Department of Labor and Employment, G.R. No. 179652 (Resolution), [March 6, 2012], 683 PHIL 509-526). which summed up the rules governing jurisdiction on labor standards claims, as follows:

    • If the claim involves labor standards benefits mandated by the Labor Code or other labor legislation regardless of the amount prayed for and provided that there is an existing employer-employee relationship, jurisdiction is with the Department of Labor and Employment regardless of whether the action was brought about by the filing of a complaint or not; and
    • If the claim involves labor standards benefits mandated by the Labor Code or other labor legislation regardless of the amount prayed for and there is no existing employer-employee relationship or the claim is coupled with a prayer for reinstatement, jurisdiction is with the Office of the Labor Arbiter/National Labor Relations Commission.

    For the Court, the claims of the bus drivers and conductors were within the purview of the jurisdiction of the Department of Labor and Employment under Article 128 and the provisions of Department Order No. 118-12. The Court accordingly dismissed the complaint of the bus drivers and conductors for lack of jurisdiction.

    Further reading:

    • Del Monte Land Transport Bus, Co. v. Armenta, G.R. No. 240144, February 3, 2021.