Facts
Malcaba, Nepomuceno, Palit-Ang, and Adona were employees of ProHealth Pharma Philippines, Inc. (“Prohealth), all of whom were terminated by Prohealth.
Malcaba was terminated after asking to take leave on October 23, 2007. When he attempted to return on November 5, 2007, Prohealth’s CEO insisted that he had already resigned and had his things removed from his office. According to Malcaba, he was paid a lower salary in December 2007, and his benefits were withheld. By January 7, 2008, Malcaba tendered his resignation effective February 1, 2008.
Nepomuceno likewise applied for vacation leave for April 24, 25, and 28, 2008, which was approved. When he left for Malaysia on April 23, 2008, ProHealth sent him a Memorandum dated April 24, 2008, asking him to explain his absence. He replied through email that he tried to call ProHealth to inform them that his flight was on April 22, 2008 at 9:00 p.m. and not on April 23, 2008, but could not connect on the phone. On May 7, 2008, Nepomuceno was given a notice of termination, which was effective May 5, 2008, on the grounds of fraud and willful breach of trust.
Meanwhile, Palit-Ang was instructed by ProHealth’s CEO to give ₱3,000.00 from the training funds to a District Business Manager, to serve as a cash advance. On November 27, 2007, a show cause memorandum was issued for Palit-Ang’s failure to release the cash advance. Palit-Ang was also relieved of her duties and reassigned to the Office of the Personnel and Administration Manager. On December 17, 2007, she was handed a notice of termination effective December 31, 2007, for disobeying the order of ProHealth’s highest official.
Malcaba, Nepomuceno, Palit-Ang, and Adona separately filed Complaints before the Labor Arbiter for illegal dismissal, nonpayment of salaries and 13th-month pay, damages, and attorney’s fees.
ISSUE: Whether or not the employees were illegally dismissed
Ruling
YES.
So long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not to defeat or circumvent the rights of the employees under special laws or valid agreements, this Court will uphold them. While an employer is free to regulate all aspects of employment, the exercise of management prerogatives must be in good faith and must not defeat or circumvent the rights of its employees.
In all cases of employment termination, the employee must be granted due process. The manner by which this is accomplished is stated in Book V, Rule XXIII, Section 2 of the Rules Implementing the Labor Code.
Moreover, Article 294 of the Labor Code provides that an employer may terminate the services of an employee only upon just or authorized causes.
Article 297 enumerates the just causes for termination, among which is “fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative.” Loss of trust and confidence is a just cause to terminate either managerial employees or rank-and-file employees who regularly handle large amounts of money or property in the regular exercise of their functions.
For an act to be considered a loss of trust and confidence, it must be first, work-related, and second, founded on clearly established facts: The complained act must be work-related such as would show the employee concerned to be unfit to continue working for the employer and it must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established, but proof beyond reasonable doubt is not necessary. The breach of trust must likewise be willful, that is, “it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.”
To us, dismissal should only be a last resort, a penalty to be meted out only after all the relevant circumstances have been appreciated and evaluated to ensure that the ground for dismissal was not only serious but true. The cause of termination, to be lawful, must be a serious and grave malfeasance to justify the deprivation of a means of livelihood.
This requirement is in keeping with the spirit of our Constitution and laws to lean over backward in favor of the working class, and with the mandate that every doubt must be resolved in their favor. Although we recognize the inherent right of the employer to discipline its employees, we should still ensure that the employer exercises the prerogative to discipline humanely and considerately and that the sanction imposed is commensurate to the offense involved and to the degree of the infraction. The discipline exacted by the employer should further consider the employee’s length of service and the number of infractions during his employment. The employer should never forget that always at stake in disciplining their employee is not only his position but also his livelihood and that he may also have a family entirely dependent on his earnings.