ASG Law

Category: Labor Law

  • Business Closure vs. Retrenchment: Protecting Workers’ Rights in the Philippines

    The Supreme Court clarified the distinction between business closure and retrenchment in Manila Polo Club Employees’ Union (MPCEU) FUR-TUCP v. Manila Polo Club, Inc. The Court emphasized that a company can close its business operations, even without facing substantial losses, provided it adheres to legal requirements, including proper notice and separation pay. This decision highlights the employer’s prerogative to manage business operations while ensuring the protection of employees’ rights during termination.

    When the Polo Club Closed its Kitchen: Understanding Business Closure vs. Retrenchment

    In 2001, the Manila Polo Club decided to cease the operations of its Food and Beverage (F&B) outlets due to consistent financial losses. The club’s Board of Directors cited high manpower costs and management inefficiencies as primary reasons for this decision. Consequently, the club retrenched 123 employees, offering a separation pay scheme based on their length of service. However, the Manila Polo Club Employees Union (MPCEU) questioned the legality of the retrenchment, arguing that the club was merely trying to avoid losses and terminate union members.

    The case reached the Supreme Court, where the central issue was whether the club’s actions constituted a valid business closure or an illegal retrenchment. The Court differentiated between these two authorized causes for termination, emphasizing the distinct legal requirements and consequences of each. While retrenchment involves reducing personnel to cut operational costs due to business losses, closure entails a complete cessation of business operations to prevent further financial strain. The Court highlighted that employers have the prerogative to close or abolish a department for economic reasons, such as minimizing expenses. In doing so, the Court referenced the decision in Alabang Country Club Inc. v. NLRC:

    x x x While retrenchment and closure of a business establishment or undertaking are often used interchangeably and are interrelated, they are actually two separate and independent authorized causes for termination of employment.

    Retrenchment is the reduction of personnel for the purpose of cutting down on costs of operations in terms of salaries and wages resorted to by an employer because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of business.

    Closure of a business or undertaking due to business losses is the reversal of fortune of the employer whereby there is a complete cessation of business operations to prevent further financial drain upon an employer who cannot pay anymore his employees since business has already stopped.

    One of the prerogatives of management is the decision to close the entire establishment or to close or abolish a department or section thereof for economic reasons, such as to minimize expenses and reduce capitalization.

    While the Labor Code provides for the payment of separation package in case of retrenchment to prevent losses, it does not obligate the employer for the payment thereof if there is closure of business due to serious losses.

    The Court pointed out that unlike retrenchment, a business closure does not necessarily require evidence of actual or imminent financial losses to be valid. Article 283 of the Labor Code governs closures, irrespective of the underlying reasons, be it financial losses or otherwise. As long as the cessation is bona fide and not intended to circumvent employees’ rights, the closure is lawful, provided the employer pays the required termination pay. In this regard, the Supreme Court echoed its pronouncements in Eastridge Golf Club, Inc. v. Eastridge Golf Club, Inc., Labor-Union, Super:

    Unlike retrenchment, closure or cessation of business, as an authorized cause of termination of employment, need not depend for validity on evidence of actual or imminent reversal of the employer’s fortune. Article 283 authorizes termination of employment due to business closure, regardless of the underlying reasons and motivations therefor, be it financial losses or not.

    To further illustrate the principles surrounding business closure, the Court cited Industrial Timber Corporation v. Ababon. This case emphasized that the employer must serve a written notice to both the employees and the Department of Labor and Employment (DOLE) at least one month before the intended closure. Furthermore, the cessation of business must be bona fide, and the employees must receive termination pay amounting to one month’s pay or at least one-half month’s pay for every year of service, whichever is higher. These requirements ensure that employees are not left without recourse when a business decides to close its operations.

    The Court also distinguished between closures made in good faith and those that are merely a subterfuge to circumvent labor laws. In Eastridge Golf Club, Inc., the Court found that the cessation of the golf club’s F&B operations was not bona fide because the club continued to act as the real employer by paying the salaries and insurance contributions of the employees of the F&B Department even after the concessionaire took over its operations. The Court has previously ruled that:

    In Me-Shurn Corporation v. Me-Shurn Workers Union-FSM, the corporation shut down its operations allegedly due to financial losses and paid its workers separation benefits. Yet, barely one month after the shutdown, the corporation resumed operations. In light of such evidence of resumption of operations, the Court held that the earlier shutdown of the corporation was in bad faith.

    In the Manila Polo Club case, the Court found no evidence of bad faith on the part of the club. There was no indication that the closure of the F&B Department was motivated by union-busting or unfair labor practices. Instead, the Court noted that the club engaged an independent consulting firm, instituted cost-saving programs, and even helped displaced employees find new employment. These actions demonstrated the club’s genuine effort to address its financial difficulties and support its employees during the transition. Since the Manila Polo Club paid the affected employees their separation pay in accordance with Article 283 of the Labor Code, the Court upheld the legality of the business closure.

    The Court summarized the key principles regarding business closures and retrenchment. First, closures can be partial or total. Second, closures may or may not be due to serious financial losses, but the employer must prove good faith and serve written notice to employees and DOLE. Third, employers can lawfully close shop, even without losses, but must pay separation pay. If closure is due to losses, the employer must prove these losses to avoid paying separation pay equivalent to one month of pay for every year of service, if there is no proof of such losses; otherwise, the employees are entitled to separation pay. The Court emphasized that the employer bears the burden of proving compliance with these requirements.

    Ultimately, the Supreme Court denied the petition filed by the Manila Polo Club Employees Union, affirming the decisions of the Court of Appeals and the Voluntary Arbitrator. The Court recognized the club’s prerogative to close its F&B Department for legitimate business reasons, as long as it complied with the legal requirements of notice and separation pay. This decision underscores the importance of balancing employers’ rights to manage their businesses with employees’ rights to fair treatment during termination.

    FAQs

    What was the key issue in this case? The central issue was whether the Manila Polo Club’s decision to cease its Food and Beverage (F&B) operations constituted a valid business closure or an illegal retrenchment. The employees argued that the club was trying to avoid losses and terminate union members.
    What is the difference between retrenchment and business closure? Retrenchment involves reducing personnel to cut operational costs due to business losses, while closure entails a complete cessation of business operations to prevent further financial strain. Closure, unlike retrenchment, does not necessarily require evidence of actual or imminent financial losses.
    What are the requirements for a valid business closure? A valid business closure requires serving a written notice to employees and the DOLE at least one month before the intended date, the cessation must be bona fide, and the employees must receive termination pay.
    Is an employer required to prove financial losses to close a business? No, an employer can lawfully close shop even if not due to serious business losses or financial reverses. However, the employer must still provide separation pay.
    What is the required separation pay in case of a business closure? The separation pay should be equivalent to one month’s pay or at least one-half month’s pay for every year of service, whichever is higher.
    What happens if a business closure is found to be in bad faith? If a business closure is found to be a mere subterfuge to circumvent labor laws, it will be deemed illegal, and the employees may be entitled to reinstatement and backwages.
    What evidence did the Manila Polo Club present to show good faith? The club presented evidence of engaging an independent consulting firm, instituting cost-saving programs, and helping displaced employees find new employment.
    Did the Supreme Court find any evidence of union-busting in this case? No, the Court found no evidence that the closure of the F&B Department was motivated by union-busting or unfair labor practices.

    This case offers important clarity on the rights and responsibilities of employers and employees during business closures. It reinforces the employer’s prerogative to make business decisions while ensuring that employees receive fair treatment and compensation when their employment is terminated due to a legitimate closure.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Manila Polo Club Employees’ Union (MPCEU) FUR-TUCP v. Manila Polo Club, Inc., G.R. No. 172846, July 24, 2013

  • Probationary Employment: Defining ‘Reasonable Standards’ for Regularization Under Philippine Labor Law

    The Supreme Court clarified the requirements for validly terminating a probationary employee, emphasizing that employers must inform the employee of reasonable standards for regularization at the start of employment. While an employer’s failure to comply with internal performance review procedures does not invalidate a termination for just cause, it does warrant the payment of nominal damages to the employee. This decision underscores the importance of clear communication and fair processes in probationary employment.

    From Probation to Permanency: Did Abbott Clear the Bar for Fair Employment Standards?

    In Abbott Laboratories, Philippines v. Alcaraz, the Supreme Court grappled with the intricacies of probationary employment and the conditions under which an employee can be terminated for failing to meet regularization standards. At the heart of the matter was whether Abbott adequately informed Pearlie Ann Alcaraz, its Regulatory Affairs Manager, of the criteria for transitioning from probationary to regular employee status. This case delves into the balance between an employer’s prerogative to set performance standards and an employee’s right to be informed of those standards.

    Alcaraz filed a complaint for illegal dismissal, arguing that she was not properly informed of the standards for regularization, thus entitling her to regular employee status. Abbott countered that it had communicated these standards, and that Alcaraz failed to meet them, justifying her termination. The Labor Arbiter (LA) initially dismissed Alcaraz’s complaint, but the National Labor Relations Commission (NLRC) reversed this decision, finding that Alcaraz was illegally dismissed. The Court of Appeals (CA) affirmed the NLRC’s ruling, leading Abbott to appeal to the Supreme Court.

    The Supreme Court emphasized that a probationary employee, like a regular employee, is entitled to security of tenure. However, probationary employment allows termination not only for just or authorized causes but also for failing to qualify as a regular employee, provided that the employer communicated reasonable standards at the time of engagement. Article 295 of the Labor Code provides this framework, and the Implementing Rules further stipulate that failing to inform the probationary employee of these standards results in the employee being deemed a regular employee.

    The Court pointed to two critical requirements for probationary employment: communicating regularization standards and doing so at the time of engagement. The key question was whether Abbott met these requirements. Abbott argued that Alcaraz was informed of the standards through various means, including the job advertisement, the employment contract, pre-employment orientation, and company manuals. The Court agreed with Abbott, after a review of the records.

    “An employer is deemed to have made known the standards that would qualify a probationary employee to be a regular employee when it has exerted reasonable efforts to apprise the employee of what he is expected to do or accomplish during the trial period of probation.”

    The Court highlighted several instances that demonstrated Abbott’s efforts to communicate the job expectations to Alcaraz. These included the detailed job description in the newspaper advertisement, the probationary status stipulated in the employment contract, and the orientation where her duties were discussed. In light of these instances, the Court determined that Alcaraz was well aware that her regularization depended on her ability to fulfill the requirements of her position as Regulatory Affairs Manager.

    However, the Court found that Abbott failed to comply with its own internal procedure for evaluating probationary employees. Abbott’s Probationary Performance Standards and Evaluation (PPSE) procedure mandated formal reviews and discussions with the employee at the third and fifth months of employment, along with a Performance Improvement Plan if necessary. The court noted the failure to perform formal assessments or discuss her performance with her during the third and fifth months of her employment. Abbott’s failure to adhere to its own PPSE procedures constituted a breach of its contractual obligation to Alcaraz. This is because a company policy partakes of the nature of an implied contract between the employer and employee. The court referenced Parts Depot, Inc. v. Beiswenger:

    Once an employer establishes an express personnel policy and the employee continues to work while the policy remains in effect, the policy is deemed an implied contract for so long as it remains in effect.

    While this breach did not invalidate the termination, which was based on a valid cause, it rendered the termination procedurally infirm. According to jurisprudence, an employer who terminates an employee for a valid cause but through an invalid procedure is liable to pay nominal damages.

    “Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.”

    Comparing this situation to past rulings in Agabon v. NLRC and Jaka Food Processing Corporation v. Pacot, the Court determined that nominal damages of P30,000.00 were appropriate, as the dismissal was initiated by an act imputable to the employee, akin to dismissals due to just causes under the Labor Code.

    Finally, the Court addressed the liability of the individual petitioners—Abbott’s officers. The Court stated that personal liability of corporate directors, trustees or officers attaches only when: (a) they assent to a patently unlawful act of the corporation, or when they are guilty of bad faith or gross negligence in directing its affairs, or when there is a conflict of interest resulting in damages to the corporation, its stockholders or other persons; (b) they consent to the issuance of watered down stocks or when, having knowledge of such issuance, do not forthwith file with the corporate secretary their written objection; (c) they agree to hold themselves personally and solidarily liable with the corporation; or (d) they are made by specific provision of law personally answerable for their corporate action.

    Alcaraz alleged bad faith on the part of these officers, but the Court found no evidence to support this claim. The Court emphasized that bad faith cannot be presumed and that the burden of proving it lies with the one alleging it.

    In this case, the Court determined that the elements of forum shopping did not exist. The Court also clarified the difference between a violation of the certification requirement and forum shopping:

    The distinction between the prohibition against forum shopping and the certification requirement should by now be too elementary to be misunderstood. To reiterate, compliance with the certification against forum shopping is separate from and independent of the avoidance of the act of forum shopping itself.

    What was the key issue in this case? The key issue was whether Abbott Laboratories sufficiently informed Pearlie Ann Alcaraz of the reasonable standards for regularization as a probationary employee. This determination affected whether her termination was legal.
    What are the requirements for valid probationary employment? There are two requirements: (1) the employer must communicate the regularization standards to the probationary employee; and (2) the employer must make such communication at the time of the probationary employee’s engagement. Failure to comply with either requirement results in the employee being deemed a regular employee.
    What happens if an employer breaches its own company policies during termination? Even if there is due cause to terminate employment and the employer satisfies its statutory duty to serve a written notice of termination, breaching company procedure makes the termination procedurally infirm. This warrants the payment of nominal damages.
    What are nominal damages, and why were they awarded in this case? Nominal damages are a small sum awarded to vindicate a right that has been violated, even if no actual loss occurred. They were awarded here because Abbott violated its own internal procedures in evaluating Alcaraz’s performance.
    Are corporate officers personally liable for illegal dismissal? Corporate officers can be held personally liable only if they acted in bad faith or with gross negligence in directing the company’s affairs. In this case, the Court found no evidence of bad faith on the part of Abbott’s officers.
    What is the difference between probationary and regular employees in terms of termination? Both probationary and regular employees are entitled to security of tenure and cannot be terminated without just cause. However, probationary employees can also be terminated if they fail to meet reasonable standards for regularization made known to them at the time of engagement.
    What is forum shopping, and did it occur in this case? Forum shopping occurs when a litigant files multiple suits involving the same parties and issues to secure a favorable judgment. The Court held that forum shopping did not exist in this case because the two petitions covered different subject matters and causes of action.
    What happens if regularization standards are not communicated? If the employer fails to inform the probationary employee of the reasonable standards upon which regularization would be based at the time of engagement, the employee shall be deemed a regular employee. This is a critical safeguard for employees under Philippine labor law.

    This ruling highlights the necessity for employers to clearly communicate regularization standards to probationary employees and to adhere to their own internal procedures when evaluating performance and effecting terminations. While valid cause for termination may exist, failure to follow proper procedure can result in the payment of nominal damages, underscoring the importance of procedural fairness in employment matters.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Abbott Laboratories, Philippines v. Pearlie Ann F. Alcaraz, G.R. No. 192571, July 23, 2013

  • Corporate Reorganization vs. Illegal Dismissal: Protecting Employee Rights During Corporate Restructuring

    In Zuellig Freight and Cargo Systems vs. National Labor Relations Commission, the Supreme Court ruled that a mere change in corporate name does not absolve a company from its labor obligations. The Court emphasized that renaming a corporation is not equivalent to creating a new entity, and therefore, the company remains liable for the illegal dismissal of employees that occurred under its previous name. This decision safeguards employees against being unfairly terminated under the guise of corporate restructuring, ensuring that their rights and tenure are protected.

    Corporate Camouflage: Can a Name Change Mask Illegal Employee Termination?

    Ronaldo V. San Miguel filed a complaint against Zuellig Freight and Cargo Systems, formerly known as Zeta Brokerage Corporation (Zeta), for unfair labor practice and illegal dismissal. San Miguel had been employed by Zeta since 1985. In January 1994, employees were informed of Zeta’s impending cessation of operations, leading to San Miguel’s termination effective March 31, 1994. He accepted his separation pay, with a promise of rehire by Zuellig. However, on April 15, 1994, he was summarily terminated without valid cause or due process. San Miguel argued that Zeta’s amendments to its articles of incorporation—changing the corporate name, broadening functions, and increasing capital stock—did not dissolve the original entity.

    Zuellig countered that San Miguel’s termination from Zeta was justified under the Labor Code due to the cessation of business operations. The company claimed no obligation to employ San Miguel, asserting that he failed to meet the deadline for accepting their employment offer. Although briefly hired on a temporary basis, Zuellig opted to hire another employee based on seniority. The Labor Arbiter sided with San Miguel, finding his dismissal illegal. According to the Labor Arbiter, Zuellig and Zeta were legally the same entity, as evidenced by Zuellig’s own correspondence with the Bureau of Internal Revenue. This meant the termination based on Zeta’s alleged cessation of business was unlawful, and San Miguel’s acceptance of separation benefits did not preclude him from contesting the dismissal’s legality.

    The National Labor Relations Commission (NLRC) upheld the Labor Arbiter’s decision, prompting Zuellig to appeal to the Court of Appeals (CA). The CA dismissed Zuellig’s petition, finding no grave abuse of discretion on the part of the NLRC. The CA emphasized that the closure of Zeta’s business operation was not validly executed, considering the amended articles of incorporation indicated that Zuellig was essentially the former Zeta. The CA also highlighted that the amendments merely changed the corporate name, expanded the company’s purpose, and increased its capital stock without fulfilling the requirements for a legitimate business closure as outlined in Article 283 of the Labor Code.

    Zuellig argued before the Supreme Court that the CA erred in finding that the NLRC did not gravely abuse its discretion in ruling that Zeta’s business closure was not bona fide, resulting in San Miguel’s illegal dismissal, and in ordering Zuellig to pay attorney’s fees. San Miguel countered that the CA correctly found no grave abuse of discretion, citing ample evidence of his illegal termination, which aligned with applicable laws and jurisprudence, entitling him to back wages and attorney’s fees. The core issue before the Supreme Court was whether the NLRC committed grave abuse of discretion in finding Zuellig liable for illegal dismissal and ordering the payment of attorney’s fees. The High Court ultimately denied Zuellig’s petition, affirming the CA’s decision.

    The Supreme Court emphasized that a special civil action for certiorari requires the petitioner to prove that the lower court or quasi-judicial body committed grave abuse of discretion amounting to lack or excess of jurisdiction, not merely a reversible error. Grave abuse of discretion implies an arbitrary or despotic exercise of power, evasion of a positive duty, or action in a capricious manner equivalent to lack of jurisdiction. The Court found no such abuse of discretion on the part of the NLRC, as its conclusions were supported by the records and applicable laws. The Supreme Court underscored that the Labor Arbiter, the NLRC, and the CA were united in concluding that Zeta’s cessation of business was not a bona fide closure, failing to meet the requirements for valid termination under Article 283 of the Labor Code. Article 283 states:

    Article 283. Closure of establishment and reduction of personnel. — The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof. x x x.

    The amendments to Zeta’s articles of incorporation to change the corporate name to Zuellig Freight and Cargo Systems, Inc., did not dissolve the former corporation. The Corporation Code defines specific modes of dissolving a corporation, and amending the articles of incorporation is not among them. The change of name did not alter the corporate being. As stated in Philippine First Insurance Co., Inc. v. Hartigan:

    “The changing of the name of a corporation is no more the creation of a corporation than the changing of the name of a natural person is begetting of a natural person. The act, in both cases, would seem to be what the language which we use to designate it imports – a change of name, and not a change of being.”

    This principle was reiterated in P.C. Javier & Sons, Inc. v. Court of Appeals, where the Court held:

    From the foregoing documents, it cannot be denied that petitioner corporation was aware of First Summa Savings and Mortgage Bank’s change of corporate name to PAIC Savings and Mortgage Bank, Inc. Knowing fully well of such change, petitioner corporation has no valid reason not to pay because the IGLF loans were applied with and obtained from First Summa Savings and Mortgage Bank. First Summa Savings and Mortgage Bank and PAIC Savings and Mortgage Bank, Inc., are one and the same bank to which petitioner corporation is indebted. A change in the corporate name does not make a new corporation, whether effected by a special act or under a general law. It has no effect on the identity of the corporation, or on its property, rights, or liabilities. The corporation, upon such change in its name, is in no sense a new corporation, nor the successor of the original corporation. It is the same corporation with a different name, and its character is in no respect changed.

    In essence, Zeta and Zuellig were the same entity, and the name change did not justify terminating employees like San Miguel without just or authorized cause. This situation differed from an enterprise acquiring another company’s business, where the purchaser is not obligated to rehire the seller’s terminated employees. Zuellig, despite its new name, was a continuation of Zeta, retaining the obligation to honor Zeta’s commitments, including San Miguel’s security of tenure. Therefore, San Miguel’s dismissal was deemed illegal.

    The Supreme Court also affirmed the award of attorney’s fees to San Miguel, finding no grave abuse of discretion by the NLRC. San Miguel was compelled to litigate and incur expenses to protect his rights and interests due to Zuellig’s actions. In Producers Bank of the Philippines v. Court of Appeals, the Court ruled that attorney’s fees could be awarded when a party is compelled to litigate due to the unjustified actions of the other party. Zuellig’s refusal to reinstate San Miguel with backwages and benefits was unjustified, entitling him to recover attorney’s fees.

    FAQs

    What was the key issue in this case? The central issue was whether a corporation could avoid labor obligations by changing its name and claiming cessation of business operations, thereby justifying the termination of employees.
    Did the Supreme Court consider Zuellig and Zeta as separate entities? No, the Supreme Court affirmed that Zuellig Freight and Cargo Systems was legally the same entity as Zeta Brokerage Corporation, despite the change in corporate name and amendments to the articles of incorporation.
    What is the significance of Article 283 of the Labor Code in this case? Article 283 outlines the requirements for valid termination of employees due to business closure. The Court found that Zuellig failed to meet these requirements, making the termination of San Miguel illegal.
    Was San Miguel entitled to back wages and reinstatement? Yes, because his dismissal was deemed illegal, San Miguel was entitled to back wages from the date of his termination until the finality of the decision, as well as reinstatement to his former position.
    Why was Zuellig ordered to pay attorney’s fees? Zuellig was ordered to pay attorney’s fees because San Miguel was compelled to litigate and incur expenses to protect his rights due to Zuellig’s unjustified refusal to reinstate him.
    Can a company avoid labor obligations by simply changing its corporate name? No, a mere change in corporate name does not create a new corporation and does not absolve the company from its existing labor obligations and liabilities.
    What constitutes grave abuse of discretion in labor cases? Grave abuse of discretion implies an arbitrary or despotic exercise of power, evasion of a positive duty, or action in a capricious manner equivalent to lack of jurisdiction, which must be proven by the petitioner.
    What is the effect of signing a quitclaim or waiver in an illegal dismissal case? In this case, the employee’s receipt of separation benefits did not prevent him from questioning the legality of his dismissal. A quitclaim does not necessarily bar an employee from pursuing a case if the dismissal was illegal.

    This case underscores the importance of adhering to labor laws during corporate restructuring and ensures that employees are not unfairly dismissed under the guise of corporate changes. It serves as a reminder that a change in corporate identity does not automatically extinguish existing labor obligations.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: ZUELLIG FREIGHT AND CARGO SYSTEMS VS. NATIONAL LABOR RELATIONS COMMISSION AND RONALDO V. SAN MIGUEL, G.R. No. 157900, July 22, 2013

  • Double Dipping Denied: Retirement Benefits vs. Separation Pay in Redundancy Cases

    The Supreme Court clarified that employees cannot claim both retirement gratuity and separation pay when their employment is terminated due to redundancy, if the Collective Bargaining Agreement (CBA) stipulates that choosing one benefit precludes the other. This ruling emphasizes the importance of clear contractual provisions in CBAs, ensuring that employees are aware of the limitations on claiming multiple benefits. The decision impacts employees facing redundancy and employers negotiating CBA terms, underscoring the need for explicit agreements regarding benefit eligibility.

    Redundancy Realities: Can Employees Claim Both Separation and Retirement?

    This case revolves around a dispute between Zuellig Pharma Corporation (Zuellig) and its employees (respondents) who were terminated due to redundancy following Roche Philippines, Inc.’s purchase of Syntex Pharmaceuticals. The respondents, formerly part of Zuellig’s Syntex Division, received separation pay as per the Collective Bargaining Agreement (CBA). Subsequently, they filed complaints seeking retirement gratuity and the monetary equivalent of unused sick leave, in addition to the separation pay already received. The central legal question is whether the employees are entitled to both separation pay and retirement benefits, given the existing CBA provisions and their prior acceptance of separation pay.

    The Labor Arbiter and the National Labor Relations Commission (NLRC) initially denied the employees’ claims. However, the Court of Appeals (CA) reversed these decisions, relying on the case of Aquino v. National Labor Relations Commission, which held that in the absence of an express prohibition in the CBA, employees are entitled to both separation pay and retirement benefits. The CA also cited Section 5, Article V of Zuellig’s Retirement Gratuity Plan, which provides full retirement benefits to employees separated for reasons not attributable to their misconduct. This prompted Zuellig to file a Petition for Review on Certiorari with the Supreme Court, arguing that the CBA explicitly prohibits the recovery of both retirement gratuity and severance pay.

    Zuellig argued that Section 2, Article XIV of the CBA states that any payment under the retirement provision shall be chargeable against separation pay. This effectively prohibits employees from receiving both benefits. Furthermore, the company contended that the employees did not meet the requirements for early retirement, as none of them had resigned, reached the retirement age of 60, or been employed for at least 25 years. The employees countered that the CBA lacked a categorical prohibition against recovering retirement benefits in addition to separation pay, citing Section 5, Article V of the Retirement Gratuity Plan, which supports their claim that separation due to redundancy (a cause beyond their control) entitles them to full retirement benefits. This divergence in interpretation formed the core of the legal dispute.

    The Supreme Court, in reversing the CA’s decision, emphasized that the CBA is the law between the parties and must be strictly complied with. The Court highlighted Section 2 of Article XIV of the CBA, which states:

    “Any payment under this provision shall be chargeable against separation pay (other than the Social Security System benefits) which may be demandable under an applicable law.”

    This provision, according to the Court, explicitly states that any payment of retirement gratuity shall be chargeable against separation pay. This means that employees cannot receive both benefits simultaneously. The Court distinguished this case from Aquino, where no such explicit prohibition existed in the CBA. Building on this principle, the Court emphasized that since the employees chose and accepted redundancy pay, they waived their right to claim retirement gratuity.

    The Court further supported its ruling by citing Suarez, Jr. v. National Steel Corporation, which involved a similar issue. In Suarez, the Court observed that the CBA separately provided for retirement benefits and severance pay for retrenched employees, indicating an intention to exclude retrenched employees from receiving retirement benefits. This approach contrasts with cases where the CBA does not clearly delineate the conditions for receiving separate benefits. The absence of such specific provisions in a CBA can lead to different outcomes, as seen in Aquino.

    Additionally, the Supreme Court addressed the issue of the monetary equivalent of unused sick leave. The Court referred to Article VIII of the CBA, which specifically enumerated the conditions under which employees are entitled to encash their unused sick leave. These conditions include compulsory retirement at 60 years old, retirement before 60 with at least 25 years of service, or retirement due to illness or disability. Since the employees were separated due to redundancy, they did not meet any of these conditions. Thus, applying the principle of expressio unius est exclusio alterius, the Court held that the CBA’s enumeration of specific instances for encashing unused sick leave excludes all other situations, including redundancy.

    Furthermore, the Supreme Court upheld the validity of the Release and Quitclaim executed by the employees. While acknowledging that quitclaims are often viewed with caution, the Court emphasized that they are valid if executed voluntarily, without fraud or deceit, for a credible and reasonable consideration, and without contravening law, public order, public policy, morals, or good customs. There was no evidence that Zuellig coerced the employees or acted fraudulently. The separation pay they received was significantly higher than the minimum required by law, constituting a fair and reasonable settlement.

    The decision in this case carries significant implications for both employers and employees. Employers should ensure that their CBAs clearly and explicitly define the eligibility criteria for different types of separation benefits. They should specify whether employees can receive multiple benefits or if choosing one benefit precludes the others. For employees, this case underscores the importance of thoroughly understanding the terms of their CBA and the implications of accepting certain benefits over others. They should carefully consider their options and seek legal advice if necessary before signing any Release and Quitclaim agreements. Ultimately, this case highlights the critical role of CBAs in defining the rights and obligations of employers and employees in the workplace.

    FAQs

    What was the key issue in this case? The key issue was whether employees terminated due to redundancy could claim both separation pay and retirement gratuity, despite a provision in their CBA stating that any retirement gratuity payment would be charged against separation pay.
    What did the Collective Bargaining Agreement (CBA) state about retirement and separation? The CBA stated that any payment of retirement gratuity would be charged against separation pay, indicating that employees could not receive both benefits simultaneously. This provision was central to the Supreme Court’s decision.
    How did the Supreme Court rule in this case? The Supreme Court ruled that the employees were not entitled to both separation pay and retirement gratuity, as the CBA explicitly stated that receiving one benefit precluded receiving the other. The Court reversed the Court of Appeals’ decision and upheld the initial ruling of the Labor Arbiter and NLRC.
    What is the legal principle of expressio unius est exclusio alterius? The principle of expressio unius est exclusio alterius means that the express mention of one thing excludes all others. The court used this principle to determine that the enumeration of specific instances to encash unused sick leave in the CBA excludes all other situations.
    Why were the Release and Quitclaim agreements considered valid? The Release and Quitclaim agreements were considered valid because they were executed voluntarily, without fraud or deceit, and for a reasonable consideration (separation pay exceeding the minimum required by law). There was no evidence of coercion or unfair practices by the employer.
    What was the main difference between this case and Aquino v. NLRC? In Aquino v. NLRC, there was no explicit prohibition in the CBA against receiving both separation pay and retirement benefits. In this case, the CBA contained a specific provision stating that any retirement gratuity payment would be charged against separation pay.
    What should employers do to avoid similar disputes? Employers should ensure that their CBAs clearly and explicitly define the eligibility criteria for different types of separation benefits, specifying whether employees can receive multiple benefits or if choosing one precludes others. Clarity in CBAs is crucial.
    What is the significance of the Suarez Jr. vs National Steel Corporation case? The decision in Suarez, Jr. v. National Steel Corporation supports the idea that if retirement and separation benefits for retrenched employees are provided separately in a CBA, it indicates an intention to exclude retrenched employees from receiving retirement benefits.
    What constitutes a valid Quitclaim? Quitclaims will be upheld as valid if (1) the employee executes a deed of quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the quitclaim is credible and reasonable; and, (4) the contract is not contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law.

    The Supreme Court’s decision in this case reinforces the importance of clear and unambiguous language in collective bargaining agreements. Employers and employees must carefully review and understand the terms of their CBAs to avoid disputes over separation benefits. This ruling serves as a reminder that contractual obligations, when fairly negotiated and clearly defined, will generally be upheld by the courts.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Zuellig Pharma Corporation v. Sibal, G.R. No. 173587, July 15, 2013

  • Breach of Trust: No Separation Pay for Employees Dismissed for Cause

    The Supreme Court has definitively ruled that employees dismissed for just cause, particularly those involving a breach of trust, are not entitled to separation pay. This decision reinforces the principle that while labor is protected, employers also have the right to expect loyalty and integrity from their employees. This ruling clarifies the circumstances under which separation pay is warranted, emphasizing that it is not a universal entitlement but rather a benefit reserved for employees dismissed for reasons unrelated to misconduct or moral turpitude. This balance ensures fairness in labor relations, safeguarding the interests of both employees and employers.

    Gift Certificates and Broken Trust: URC’s Sales Manager Dismissal

    Universal Robina Corporation (URC) dismissed Wilfredo Z. Castillo, a Regional Sales Manager, after an internal audit revealed irregularities in his dealings with a key client, Liana’s Supermart. The audit uncovered that Castillo had signed blank charge invoices and allegedly received gift certificates worth P72,000.00 for his personal benefit, tied to a “Back to School Promo.” URC argued that these actions constituted a breach of trust, leading to Castillo’s termination. The Court of Appeals initially upheld the dismissal but awarded separation pay, citing Castillo’s long service. This prompted URC to appeal to the Supreme Court, questioning the separation pay award.

    The Supreme Court addressed whether an employee validly dismissed for cause is entitled to separation pay. The court referred to established jurisprudence, particularly Philippine Long Distance Telephone Co. v. NLRC, which states that separation pay is a measure of social justice for employees dismissed for reasons other than serious misconduct or actions reflecting on their moral character. The court also considered Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. NLRC, which further clarified that dismissals due to willful disobedience, gross neglect of duty, fraud, or breach of trust preclude separation pay.

    Article 282 of the Labor Code lists the causes for which an employer may terminate employment. These include serious misconduct, willful disobedience, gross neglect of duty, fraud, and breach of trust. The Court emphasized that separation pay is not warranted in cases falling under Article 282. In Central Philippines Bandag Retreaders, Inc., the court cautioned against indiscriminately awarding separation pay based on social justice, especially when the dismissal is due to serious misconduct or breach of trust.

    ART. 282. Termination by employer. – An employer may terminate an employment for any of the following causes:

    (a)  Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

    (b)   Gross and habitual neglect by the employee of his duties;

    (c)   Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;

    (d)   Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and

    (e)   Other causes analogous to the foregoing.

    The Supreme Court found that Castillo’s actions constituted a willful breach of trust and confidence. The Court of Appeals had established that Castillo entered into “unauthorized arrangements” regarding changes in the Account Development Agreement (ADA). This included signing blank charge invoices and improperly receiving gift certificates for personal gain. The Court of Appeals noted the intertwined nature of these acts, stating that Castillo’s acquisition of gift certificates was facilitated by his signing of blank invoices, which was a ruse to cover up his receipt of the gift certificates.

    x x x The principal charge against petitioner Castillo was hinged upon “unauthorized arrangements” which he allegedly entered into.  Petitioner Castillo’s unauthorized dealing with respect to the changes in the Account Development Agreement is exactly the offending cause of the host of infractions he committed, i.e., his neglect in signing the blank charge invoices and his improper receipt of gift certificates for his personal gain.  These acts taken together constitute a breach of the trust and confidence reposed on petitioner Castillo by private respondent URC.  x x x.

    The Court also highlighted that Liana’s Supermarket’s Vice President of Marketing confirmed Castillo’s receipt of the gift certificates, further substantiating the breach of trust. Even if Castillo did not receive the gift certificates, his admission of signing blank charge invoices demonstrated negligence and a lack of care for URC’s interests. The court emphasized that as a Regional Sales Manager, Castillo should have recognized the disadvantage his actions posed to the company.

    The court emphasized the importance of trust in the employer-employee relationship. A breach of this trust, particularly when it involves financial irregularities, is a serious offense that justifies dismissal without separation pay. In this case, the evidence clearly pointed to Castillo’s culpability, negating any claim for separation pay based on social justice or equitable relief.

    The Supreme Court referenced Bank of the Philippine Islands v. NLRC and Arambulo, where it ruled that an employee dismissed for just cause under Article 282 of the Labor Code is not entitled to separation pay. Applying this precedent to Castillo’s case, the Court concluded that he was not entitled to separation pay due to the valid dismissal based on loss of trust and confidence.

    FAQs

    What was the key issue in this case? The central issue was whether an employee dismissed for just cause, specifically breach of trust, is entitled to separation pay. The Supreme Court ruled that separation pay is not warranted in such cases.
    What were the grounds for Wilfredo Castillo’s dismissal? Castillo was dismissed for entering into unauthorized arrangements with Liana’s Supermart, signing blank charge invoices, and allegedly receiving gift certificates for his personal benefit, all of which constituted a breach of trust.
    What is the legal basis for denying separation pay? Article 282 of the Labor Code lists causes for termination, including serious misconduct, willful disobedience, gross neglect of duty, fraud, and breach of trust, which preclude an award of separation pay.
    What did the Court of Appeals initially rule? The Court of Appeals upheld Castillo’s dismissal but awarded separation pay as a form of equitable relief, citing his long service in the company.
    What was URC’s main argument before the Supreme Court? URC argued that Castillo’s actions constituted serious misconduct and a breach of trust, disqualifying him from receiving separation pay under prevailing law and jurisprudence.
    How did the Supreme Court justify its decision? The Supreme Court emphasized that Castillo’s actions demonstrated a willful breach of trust and that awarding separation pay would undermine the principle that employers have a right to expect loyalty and integrity from their employees.
    What is the significance of the PLDT v. NLRC case in this context? Philippine Long Distance Telephone Co. v. NLRC established that separation pay is a measure of social justice for employees dismissed for reasons other than serious misconduct or actions reflecting on their moral character.
    How does this ruling affect other employees? This ruling clarifies that separation pay is not a universal entitlement and that employees dismissed for serious misconduct or breach of trust are not eligible for it.

    In conclusion, the Supreme Court’s decision underscores the importance of trust in the employment relationship and reaffirms that employees who violate this trust are not entitled to separation pay. This ruling serves as a reminder of the responsibilities and obligations that employees owe to their employers, particularly those in positions of responsibility.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: UNIVERSAL ROBINA CORPORATION VS. WILFREDO Z. CASTILLO, G.R. No. 189686, July 15, 2013

  • Breach of Trust and Due Process: Balancing Employer Rights and Employee Protection in Termination Cases

    In cases of employee termination, employers must balance the right to dismiss an employee for a valid reason with the employee’s right to due process. The Supreme Court has ruled that while an employer may have just cause to dismiss an employee, failure to adhere to procedural due process requirements can lead to liability for nominal damages. This means that even if an employee’s actions warrant dismissal, the employer must still provide adequate notice and opportunity to be heard. This decision underscores the importance of employers following proper procedures in termination cases to avoid legal repercussions, emphasizing the need for fairness and transparency in employment practices.

    Betrayal and Termination: Did Samar-Med Follow the Rules?

    Samar-Med Distribution, a sole proprietorship, faced a legal challenge when it dismissed Josafat Gutang, a managerial employee, for alleged misappropriation of funds. Gutang filed a complaint for illegal dismissal, claiming he was not paid his salaries and was unjustly terminated. Samar-Med argued that Gutang abandoned his job after being tasked to investigate sales collection shortages. The Labor Arbiter initially ruled in favor of Gutang, but the National Labor Relations Commission (NLRC) reversed this decision, citing loss of trust and confidence due to the alleged embezzlement. The Court of Appeals (CA), however, sided with Gutang, declaring his dismissal illegal due to lack of due process. This case revolves around whether Samar-Med had a just cause for dismissing Gutang and whether it followed the proper procedures in doing so.

    The Supreme Court (SC) addressed whether Gutang’s dismissal was a proper issue, even if not explicitly raised in his initial complaint. It also considered whether the dismissal was justified based on abandonment and breach of trust. The SC clarified that while only questions of law are typically reviewed under Rule 45 of the Rules of Court, discrepancies in factual findings between the Labor Arbiter and the NLRC warranted a closer examination of the records. Thus, this divergence allowed the Court to assess whether the CA erred in overturning the NLRC’s decision.

    Petitioner’s assertion that the validity of Gutang’s dismissal should not be considered because it was not explicitly stated in his complaint was deemed without merit. The Court emphasized that the NLRC rules require the submission of verified position papers by the parties, stating that Gutang’s cause of action should be ascertained from both his complaint and position paper. Gutang’s position paper alleged he was compelled to seek other income due to non-payment of salaries and that his employment was not formally terminated. Therefore, the SC stated that the consideration and ruling on the propriety of Gutang’s dismissal by the Labor Arbiter and the NLRC were deemed appropriate.

    Building on this, the Court examined whether Gutang voluntarily stopped working, constituting job abandonment. The responsibility to prove that an employee was not dismissed illegally lies with the employer. Samar-Med provided no substantial evidence beyond mere allegations to support the claim of abandonment. Gutang’s cessation of work was attributed to the non-payment of his salary since November 1995, forcing him to seek temporary employment elsewhere. The SC found the CA’s conclusion of illegal termination due to the absence of proof of abandonment to be partially correct, highlighting that Gutang’s actions were driven by economic necessity, negating any intent to abandon his job.

    However, the Supreme Court also found that the NLRC did not gravely abuse its discretion in concluding that Gutang’s dismissal was warranted. As a managerial employee entrusted with significant responsibilities, Gutang’s failure to account for sales collections and the subsequent filing of a criminal case against him provided substantial evidence of a breach of trust. Article 282(c) of the Labor Code allows an employer to terminate employment based on fraud or wilful breach of trust. The Court cited Jerusalem v. Keppel Monte Bank, stating that for loss of trust and confidence to justify termination, the employer must have reasonable grounds to believe in the employee’s misconduct, rendering him unworthy of the trust demanded by his position. The SC determined that these requirements were met in Gutang’s case.

    Despite the existence of a just cause for dismissal, the Court found that Gutang was not accorded due process. Article 277 of the Labor Code requires employers to furnish employees with a written notice stating the causes for termination and provide an opportunity to be heard. This is further elaborated in Section 2 and Section 7, Rule I, Book VI of the Implementing Rules of the Labor Code, which mandates two written notices: one informing the employee of the grounds for possible termination and another notifying the employee of the employer’s decision after a reasonable period for response and defense. Gutang’s receipt of a demand letter to return misappropriated funds did not constitute substantial compliance with the twin-notice requirement, as its purpose differed from the defined notices and did not allow a meaningful opportunity to be heard.

    The Supreme Court referenced Agabon v. National Labor Relations Commission, clarifying that the lack of statutory due process does not nullify the dismissal when a just cause exists. However, the violation of Gutang’s right to due process warranted the payment of indemnity in the form of nominal damages. The Court deemed P30,000.00 as sufficient vindication for the violation of Gutang’s due process rights. Thus, the Supreme Court partly granted the petition, reinstating the NLRC resolution but with the modification that Samar-Med pay Gutang nominal damages for non-compliance with statutory due process.

    FAQs

    What was the key issue in this case? The key issue was whether an employee’s dismissal was legal when there was a just cause for termination but a failure to comply with procedural due process requirements.
    What is a just cause for termination? A just cause refers to reasons for termination that are attributable to the employee’s actions or behavior, such as fraud, willful breach of trust, or gross misconduct, as defined in the Labor Code.
    What is procedural due process in termination cases? Procedural due process requires the employer to provide the employee with written notice of the grounds for termination, an opportunity to be heard, and a second written notice of the decision to terminate employment.
    What happens if an employer fails to follow due process? If an employer fails to follow due process, the dismissal is not rendered illegal if there is just cause, but the employer may be liable for nominal damages to compensate the employee for the procedural violation.
    What is the significance of a managerial position in termination cases? Managerial employees hold positions of trust and confidence, meaning that breaches of this trust, such as misappropriation of funds, can be a valid ground for termination.
    What evidence is needed to prove job abandonment? To prove job abandonment, an employer must show that the employee had a clear intention to abandon their employment and overt acts from which this intention can be inferred, such as a consistent failure to report to work without any indication of intent to return.
    What is the twin-notice rule? The twin-notice rule requires the employer to issue two written notices to the employee: the first specifying the grounds for possible termination, and the second informing the employee of the decision to terminate after considering their response.
    What are nominal damages? Nominal damages are a small amount of monetary compensation awarded when there is a violation of a legal right, but no actual financial loss has been proven, serving to acknowledge the violation of the right.
    Can a criminal case against an employee justify termination? A pending criminal case can serve as substantial evidence for loss of trust and confidence, which is a just cause for termination, especially if the case involves actions that breach the trust reposed in the employee.

    The Samar-Med Distribution case clarifies the importance of adhering to procedural due process, even when there is a valid reason for terminating an employee. Employers must ensure they follow the proper steps of providing written notices and an opportunity for the employee to be heard, or risk being liable for nominal damages. This ruling emphasizes the need for fairness and transparency in employment practices, protecting employees’ rights while acknowledging employers’ need to maintain trust and confidence in their workforce.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: SAMAR-MED DISTRIBUTION vs. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 162385, July 15, 2013

  • Breach of Trust vs. Due Process: Employer’s Dismissal Rights and Employee Protection in the Philippines

    In the Philippines, an employer has the right to terminate an employee for a just cause, such as breach of trust. However, even when a just cause exists, the employer must still follow due process requirements, including providing the employee with two written notices and an opportunity to be heard. If an employer fails to comply with due process, the dismissal may be deemed illegal, entitling the employee to certain remedies, such as nominal damages, even if the dismissal itself was justified.

    Lost Trust, Lost Job? Examining Due Process Rights in Employee Dismissal

    The case of Samar-Med Distribution vs. National Labor Relations Commission and Josafat Gutang revolves around the dismissal of Josafat Gutang, a managerial employee, due to alleged loss of trust and confidence. Samar-Med claimed Gutang misappropriated company funds, leading to a criminal case against him. While the NLRC found sufficient basis for the dismissal, the Court of Appeals (CA) declared it illegal due to the employer’s failure to comply with procedural due process. The Supreme Court was tasked to determine whether Gutang’s dismissal was justified and whether the procedural requirements were met, ultimately impacting the balance between an employer’s right to manage their business and an employee’s right to due process.

    The Supreme Court (SC) grappled with the intertwined issues of just cause for termination and the observance of due process. The Court clarified that while Gutang’s complaint before the NLRC did not explicitly state “illegal dismissal” as a cause of action, the issue was properly before the labor tribunals because his position paper alleged that he had been compelled to seek other employment and that his employment had not been formally terminated. This highlighted the importance of examining the totality of the pleadings in labor cases, especially where employees might not be legally sophisticated in framing their complaints. The SC emphasized that labor rules allow consideration of issues raised in position papers, even if not initially detailed in the complaint.

    Regarding the justification for Gutang’s dismissal, the Court scrutinized the evidence presented. Samar-Med argued that Gutang had abandoned his job by voluntarily stopping work. However, the Court found this argument unpersuasive. The SC emphasized that the onus of proving that an employee was not dismissed, or if dismissed, the dismissal was not illegal, fully rests on the employer. Since Gutang’s cessation of work was due to the non-payment of his salary, it was deemed a justifiable reason, and not indicative of abandonment. In fact, his actions demonstrated a desire to seek alternative income to survive, negating any intention to abandon his employment.

    The Court delved into the NLRC’s finding that Gutang’s dismissal was warranted due to loss of trust and confidence. As a managerial employee entrusted with significant responsibilities, including handling company funds and representing Samar-Med in transactions, Gutang’s alleged misappropriation of funds, substantiated by the filing of a criminal case and the public prosecutor’s finding of prima facie case, provided a reasonable basis for the employer to lose trust and confidence in him. The Court cited Article 282(c) of the Labor Code, which allows an employer to terminate an employee’s employment on the ground of the latter’s fraud or willful breach of the trust and confidence reposed in him. The Supreme Court has repeatedly held that an employer cannot be compelled to continue employing someone in whom they have lost trust, particularly when the employee occupies a managerial role.

    However, the Court also found that Samar-Med failed to accord Gutang due process in his dismissal. This highlights the critical distinction between having a just cause for termination and following the proper procedure. According to Article 277 of the Labor Code, an employer must furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself. This requirement is also emphasized in Section 2 and Section 7, Rule I, Book VI of the Implementing Rules of the Labor Code. The Court noted that Gutang’s receipt of a demand letter to return the allegedly misappropriated funds did not constitute substantial compliance with the twin-notice requirement because the letter did not serve the same purpose as the required notices, nor did it afford Gutang a meaningful opportunity to be heard regarding his impending termination.

    The Court echoed the ruling in Agabon v. National Labor Relations Commission, stating that while the lack of statutory due process does not nullify the dismissal if there is just cause, it does warrant the payment of indemnity in the form of nominal damages. This principle acknowledges that even if an employer has a valid reason to dismiss an employee, the failure to follow the proper procedure infringes upon the employee’s right to due process. The Court exercised its discretion and awarded Gutang P30,000.00 as nominal damages for the violation of his right to statutory due process. This underscores the importance of employers adhering to procedural requirements even when a just cause for dismissal exists.

    FAQs

    What was the key issue in this case? The key issue was whether an employee’s dismissal was valid when there was a just cause (loss of trust) but the employer failed to follow procedural due process requirements.
    What is “just cause” for termination? “Just cause” refers to valid reasons for terminating an employee, such as fraud, willful disobedience, or loss of trust and confidence. These causes are defined in Article 282 of the Labor Code.
    What is “due process” in termination cases? Due process requires the employer to provide the employee with two written notices: one informing them of the grounds for termination and another informing them of the decision to terminate. The employee must also be given an opportunity to be heard.
    What is the twin-notice rule? The “twin-notice rule” refers to the requirement that the employer must provide two written notices to the employee before termination: a notice of intent to dismiss and a notice of actual termination.
    What happens if an employer dismisses an employee for just cause but without due process? In this situation, the dismissal is considered justified but the employer is liable for nominal damages to compensate the employee for the procedural violation. The dismissal stands, but the employer pays damages.
    What are nominal damages? Nominal damages are a small sum awarded when a right is violated but no actual loss is proven. In labor cases, they compensate for the employer’s failure to follow due process, even if the dismissal itself was justified.
    What is the basis for loss of trust and confidence as a ground for termination? Loss of trust and confidence is a valid ground for termination under Article 282(c) of the Labor Code, especially for managerial employees. However, the employer must have a reasonable basis for such loss of trust.
    Who has the burden of proof in illegal dismissal cases? The employer has the burden of proving that the dismissal was for a valid or authorized cause. The employee must show the employment relationship, the burden then shifts to the employer.

    This case underscores the delicate balance between an employer’s right to manage their business and an employee’s right to due process. While employers have the prerogative to dismiss employees for just causes, they must meticulously adhere to procedural requirements to avoid liability for damages. The Supreme Court’s decision in Samar-Med Distribution vs. National Labor Relations Commission and Josafat Gutang serves as a reminder to employers to prioritize due process in termination proceedings.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: SAMAR-MED DISTRIBUTION vs. NLRC, G.R. No. 162385, July 15, 2013

  • Reassignment of Employees: Upholding Management Prerogative vs. Constructive Dismissal

    The Supreme Court ruled that an employer’s decision to reassign an employee is a valid exercise of management prerogative, provided it is not motivated by bad faith, even if it causes inconvenience or hardship to the employee. This case clarifies that reassignment is permissible pending investigation of serious misconduct, especially when the employee occupies a position of trust and confidence. The ruling underscores the employer’s right to protect company interests, as long as the reassignment does not result in demotion, reduction in pay, or other forms of constructive dismissal.

    Shifting Sands: Was Ruiz’s Transfer a Valid Reassignment or Constructive Dismissal?

    Josephine Ruiz, formerly the executive assistant to the president of Wendel Osaka Realty Corp. (WORC), found herself reassigned to the Ciudad Nuevo Project in Cavite City amidst allegations of leaking company files. This reassignment sparked a legal battle, with Ruiz claiming constructive illegal dismissal, while the company maintained it was a valid exercise of management prerogative. The central question before the Supreme Court was whether the transfer was justified by legitimate business reasons or motivated by bad faith, effectively forcing Ruiz to resign.

    The Supreme Court’s analysis hinged on the employer’s inherent right to transfer or assign employees in pursuit of legitimate business interests. The Court emphasized that this right is not absolute, it is subject to the condition that the move not be motivated by bad faith. In this case, the Court found that the reassignment of Ruiz was indeed a valid exercise of management prerogative. It cited the sensitive nature of Ruiz’s position as executive assistant, which required the employer’s utmost trust and confidence. The alleged breach of this trust, due to the missing company files and the accusations against her, provided reasonable grounds for the reassignment.

    Building on this principle, the Court noted that respondents had the right to reassign her the moment that confidence was breached. It has been shown that such breach proved that she was no longer fit to discharge her assigned tasks. Citing precedent, the Court stated that “[B]reach of trust and confidence as a ground for reassignment must be related to the performance of the duties of the employee such as would show him to be thereby unfit to discharge the same task.” The Court further stated that, pending investigation, the transfer of Ruiz was within the rights of the company. “Re-assignments made by management pending investigation of irregularities allegedly committed by an employee fall within the ambit of management prerogative. The purpose of reassignments is no different from that of preventive suspension which management could validly impose as a disciplinary measure for the protection of the company’s property pending investigation of any alleged malfeasance or misfeasance committed by the employee.”

    However, the petitioner argued that there was no valid ground for her transfer and that the respondents acted with bad faith. She insisted that the only reason behind the transfer was her being suspected of taking out company records. The Court disagreed, holding that substantial proof, not proof beyond reasonable doubt, is a sufficient basis for the imposition of any disciplinary action upon the employee. The Court cited Ruiz’s refusal to fill out the questionnaire, as well as the sworn statement of a witness claiming that Ruiz handed the missing files to her husband. These reasons were enough to justify the transfer.

    The Court addressed the question of inconvenience and prejudice to the employee. Ruiz argued that the transfer was inconvenient because of the extended travel between her home and her workplace. The Court, however, reiterated the principle that an employer’s decision to transfer an employee, if made in good faith, is a valid exercise of management prerogative, even if it results in personal inconvenience or hardship to the employee. In this case, the Court found that the transfer of employment of petitioner to Cavite was not motivated by bad faith.

    Furthermore, the petitioner also claimed that her transfer was coupled with a diminution in the benefits previously granted to her, since her “confidential” allowance of P2,000.00 a month was withdrawn when she was transferred. However, respondents were able to prove that, for her position in Cavite, petitioner received a P2,554 per month traveling allowance, which was more than the P2,000 she received as monthly allowance prior to her transfer. Moreover, respondents argued that the petitioner had not suffered demotion since the petitioner’s claim that she held the position of Office Manager was not supported by evidence and that she was the only employee of WORC.

    Ultimately, the Supreme Court sided with the respondents. The court found that the employer’s actions were within the bounds of management prerogative, emphasizing the importance of trust and confidence in the employment relationship. The court stated that the “filing of an illegal dismissal case by petitioner was a mere afterthought. It was filed not because she wanted to return to work, but to claim separation pay and back wages.”

    FAQs

    What was the key issue in this case? The key issue was whether Josephine Ruiz’s reassignment to Cavite City constituted constructive illegal dismissal or a valid exercise of management prerogative by Wendel Osaka Realty Corp.
    What is ‘management prerogative’ in this context? Management prerogative refers to the inherent right of an employer to control and manage its business operations, including the right to transfer or reassign employees based on legitimate business needs.
    Why did the company reassign Josephine Ruiz? The company reassigned Ruiz due to allegations of leaking confidential company files, which led to a breach of trust and confidence in her role as executive assistant to the president.
    Did the reassignment result in a reduction of benefits? No, the Supreme Court found that Ruiz’s traveling allowance in Cavite was higher than her previous “confidential” allowance, indicating no reduction in benefits.
    Was Ruiz demoted as a result of the reassignment? The Court found no evidence to support Ruiz’s claim that she was demoted, noting that she was the only employee of WORC and her position was not proven to be managerial.
    What is ‘constructive dismissal’? Constructive dismissal occurs when an employer’s actions create a hostile or intolerable work environment, forcing an employee to resign because continued employment becomes unbearable.
    What evidence did the company present to justify the reassignment? The company presented evidence of missing files, Ruiz’s refusal to complete a questionnaire, and a witness’s sworn statement implicating Ruiz in the unauthorized removal of company documents.
    What standard of proof is required for employee discipline? The standard of proof required is substantial evidence, which means the employer has reasonable grounds to believe the employee is responsible for the misconduct, rather than proof beyond a reasonable doubt.
    Is malice or bad faith required for directors to be solidarily liable with the corporation? Yes, in labor cases, directors and officers are solidarily liable with the corporation for the termination of employment of corporate employees if their termination was committed with malice or bad faith.

    In conclusion, the Supreme Court’s decision reaffirms the employer’s right to manage its workforce and protect its interests through reassignment, as long as such actions are not driven by malice or bad faith. The ruling highlights the importance of trust and confidence in the employer-employee relationship, particularly in sensitive positions. This case serves as a reminder that while employees have rights, employers also have the prerogative to make decisions necessary for the efficient and secure operation of their businesses.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Josephine Ruiz vs. Wendel Osaka Realty Corp., G.R. No. 189082, July 11, 2012

  • Upholding Employer’s Right to Terminate Based on Loss of Trust and Confidence: The Case of Martinez vs. CENPELCO

    In Jessie G. Martinez v. Central Pangasinan Electric Cooperative, Inc. (CENPELCO), the Supreme Court affirmed that an employer is justified in terminating an employee if there is a valid loss of trust and confidence. The Court emphasized that employees holding positions of trust, particularly those handling significant amounts of money, must be held to a high standard of accountability. This decision underscores an employer’s right to protect its interests by ensuring that employees in sensitive roles are reliable and trustworthy, safeguarding against potential financial irregularities. The case serves as a reminder of the importance of honesty and transparency in the workplace, especially for those entrusted with financial responsibilities.

    When Shortages Lead to Terminations: Examining Trust in Employee Remittances

    The case revolves around Jessie G. Martinez, a teller at Central Pangasinan Electric Cooperative, Inc. (CENPELCO). Following an audit, Martinez was found to have a shortage of P44,846.77 in his remittances. His attempt to offset this shortage with a previous overage was deemed unacceptable by the company. Consequently, CENPELCO terminated Martinez’s employment, citing loss of trust and confidence. The central legal question is whether CENPELCO was justified in dismissing Martinez based on this ground.

    To validly dismiss an employee based on loss of trust and confidence, as outlined in Article 296(c) of the Labor Code, two key requirements must be met. First, the employee must occupy a position of trust and confidence. Second, there must be an act that justifies the loss of trust and confidence. The Supreme Court has clarified that positions of trust fall into two categories: managerial employees and fiduciary rank-and-file employees. Martinez, as a teller responsible for collecting and remitting payments, falls under the latter category, thus satisfying the first requirement.

    The second requirement focuses on whether Martinez’s actions warranted the loss of trust. The audit report revealed a significant shortage in his remittances, which he admitted but attempted to offset with a prior overage. The Court emphasized the importance of properly accounting for funds and the impropriety of offsetting shortages with overages. This practice, according to the Court, could mask inaccuracies and wrongdoings, preventing the accurate identification of a company’s true financial status.

    “Verily, this irregular practice would be detrimental to the interests of the employer whose bread and butter depends solely on realized profits.”

    The Court highlighted that Martinez’s inability to adequately explain the shortage justified CENPELCO’s loss of trust and confidence. The failure to properly account for a substantial amount of money demonstrated a lack of diligence and trustworthiness, providing a valid basis for termination. Martinez argued that CENPELCO failed to prove the validity of his dismissal. However, the Court sided with the CA and NLRC in finding that CENPELCO presented sufficient evidence to support the shortage.

    The burden then shifted to Martinez to demonstrate that the shortage was not due to negligence or misconduct on his part. Instead of providing a reasonable explanation, Martinez admitted the shortage and attempted to offset it with a previous overage. The Supreme Court cited Philippine Plaza Holdings, Inc. v. Episcope, reinforcing the criteria for valid dismissal based on loss of trust:

    “(1) the employee concerned must be holding a position of trust and confidence; and (2) there must be an act that would justify the loss of trust and confidence.”

    This decision underscores the high standard of accountability expected from employees handling company funds. It also reinforces the employer’s right to terminate employment when there is a justifiable basis for loss of trust and confidence. The ruling protects employers from potential financial risks associated with employees who fail to properly account for funds under their care.

    In essence, the Supreme Court’s decision in Martinez v. CENPELCO reiterates that employers have the right to protect their financial interests by ensuring that employees in positions of trust are reliable and transparent. The case highlights the critical importance of maintaining accurate financial records and adhering to proper accounting practices. This ruling serves as a cautionary reminder to employees in fiduciary positions to exercise utmost diligence in handling company funds and to provide clear and truthful explanations for any discrepancies.

    The concept of **loss of trust and confidence** is a recognized ground for termination under the Labor Code, but it must be supported by substantial evidence. Employers cannot arbitrarily dismiss employees based on mere suspicion or conjecture. There must be a clear and justifiable reason for the loss of trust, typically related to the employee’s conduct or performance of duties.

    Moreover, the dismissal process must comply with **due process requirements**. This includes providing the employee with a written notice outlining the grounds for termination, an opportunity to be heard and present a defense, and a subsequent written notice of termination if the employer decides to proceed with the dismissal. Failure to comply with due process can render the termination illegal, even if there is a valid ground for dismissal.

    This case also implicitly touches upon the concept of **negligence** in handling company funds. While Martinez’s actions might not have constituted intentional misappropriation, his failure to properly account for the shortage suggests a degree of negligence or carelessness. Employers have a right to expect employees to exercise reasonable care and diligence in the performance of their duties, and a failure to do so can lead to disciplinary action, including termination.

    An interesting aspect of this case is the attempt by Martinez to offset the shortage with a previous overage. While seemingly innocuous, this practice was deemed improper by the Court because it could mask underlying inaccuracies or even fraudulent activities. Proper accounting practices require each transaction to be accurately recorded and reconciled, and offsetting errors without proper investigation can compromise the integrity of financial records.

    Moreover, the role of the **Internal Audit Department (IAD)** in CENPELCO was crucial in uncovering the discrepancy. The IAD’s audit and subsequent report provided the substantial evidence necessary to support the termination. This highlights the importance of internal controls and audit mechanisms in ensuring financial accountability and preventing potential irregularities within an organization.

    The Supreme Court in this case effectively balanced the rights of the employee with the legitimate interests of the employer. While employees have a right to security of tenure, employers also have a right to protect their businesses from potential harm caused by untrustworthy employees. The Court’s decision reinforces the principle that employees in positions of trust must be held to a high standard of accountability and that failure to meet this standard can justify termination.

    From an employment law perspective, this case clarifies the application of the loss of trust and confidence doctrine in the context of financial irregularities. It provides a clear example of how employers can validly terminate employees who fail to properly account for company funds. It also highlights the importance of maintaining proper accounting practices and internal controls to prevent such incidents from occurring in the first place.

    FAQs

    What was the key issue in this case? Whether CENPELCO validly dismissed Jessie G. Martinez based on loss of trust and confidence due to a shortage in his remittances.
    What is the basis for dismissing an employee due to loss of trust? Under Article 296(c) of the Labor Code, an employee holding a position of trust can be dismissed if there is an act that justifies the loss of trust and confidence.
    What are the two types of positions of trust according to the Supreme Court? Managerial employees and fiduciary rank-and-file employees who handle significant amounts of money or property.
    Why was Martinez considered to be in a position of trust? As a teller tasked with collecting payments and remitting them to CENPELCO, Martinez was responsible for handling significant amounts of money.
    What evidence did CENPELCO present to justify the dismissal? CENPELCO presented an audit report showing that Martinez had a shortage of P44,846.77 in his remittances.
    Why was Martinez’s attempt to offset the shortage deemed unacceptable? The Court found that offsetting shortages with overages is an improper practice that can mask inaccuracies and wrongdoings.
    What is the significance of the Internal Audit Department’s role in this case? The IAD’s audit provided the substantial evidence necessary to support the termination, highlighting the importance of internal controls in ensuring financial accountability.
    What are the due process requirements for dismissing an employee? The employee must be given a written notice outlining the grounds for termination, an opportunity to be heard, and a subsequent written notice of termination if the employer decides to proceed with the dismissal.

    The Supreme Court’s decision in Martinez v. CENPELCO serves as a critical reminder for both employers and employees regarding the importance of trust and accountability in the workplace. It underscores the necessity for employees in positions of trust to maintain the highest standards of integrity and for employers to implement robust internal controls to safeguard their financial interests. This case reinforces the principle that loss of trust and confidence, when supported by substantial evidence, is a valid ground for termination under Philippine labor law.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Jessie G. Martinez v. Central Pangasinan Electric Cooperative, Inc. (CENPELCO), G.R. No. 192306, July 15, 2013

  • Illegal Dismissal: Proving Termination and the Consequences of Abandonment Claims

    In the case of Gilda C. Fernandez and Bernadette A. Beltran v. Newfield Staff Solutions, Inc., the Supreme Court addressed the issue of illegal dismissal, specifically focusing on whether the employees were terminated or had abandoned their jobs. The Court ruled that the employees were indeed illegally dismissed, emphasizing the importance of proving actual termination by the employer and the stringent requirements for establishing abandonment by the employee. This decision underscores the protection afforded to employees against unjust termination and highlights the employer’s burden to demonstrate valid causes for dismissal.

    When Silence Speaks Volumes: Unraveling an Illegal Dismissal Claim

    Gilda C. Fernandez and Bernadette A. Beltran were hired by Newfield Staff Solutions, Inc. as Recruitment Manager and Recruitment Specialist, respectively. Barely a month into their employment, they were allegedly terminated by the company’s General Manager, Arnold “Jay” Lopez, Jr., due to unsatisfactory performance. The employees claimed they were verbally dismissed and instructed to turn over their records. However, Newfield argued that the employees abandoned their jobs by failing to report for work, thus breaching their employment agreements. The case reached the Supreme Court after conflicting decisions from the Labor Arbiter, the National Labor Relations Commission (NLRC), and the Court of Appeals (CA).

    The central legal question revolved around whether Fernandez and Beltran were illegally dismissed or had voluntarily abandoned their employment. The Labor Arbiter and the NLRC initially ruled in favor of the employees, finding that they were illegally dismissed and awarding back wages and separation pay. The Court of Appeals, however, reversed this decision, stating that the employees had abandoned their positions. The Supreme Court, after reviewing the conflicting findings, sided with the Labor Arbiter and the NLRC, emphasizing the significance of evidence and the employer’s burden to prove the validity of a dismissal.

    The Supreme Court’s decision hinged on several key factors. First, the Court noted that the respondents, Newfield and Lopez, Jr., failed to adequately deny the employees’ claim that they were terminated during the meeting on October 17, 2008. The Court cited the principle that silence can be construed as an admission, especially when a denial would be the natural response.

    “An act or declaration made in the presence and within the hearing or observation of a party who does or says nothing when the act or declaration is such as naturally to call for action or comment if not true, and when proper and possible for him to do so, may be given in evidence against him.” Section 32, Rule 130 of the Rules of Court.

    This legal principle underscores the importance of timely and explicit denials in legal proceedings.

    Furthermore, the Court addressed the issue of abandonment. The Court clarified that to constitute abandonment, there must be both a failure to report for work without valid reason and a clear intention to sever the employer-employee relationship. The Court noted that the employees’ act of sending demand letters and filing a complaint for illegal dismissal indicated a clear intention to maintain the employment relationship, not to abandon it. As the Supreme Court stated:

    “Employees who take steps to protest their dismissal cannot logically be said to have abandoned their work. A charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal. The filing thereof is proof enough of one’s desire to return to work, thus negating any suggestion of abandonment.”

    This highlights the inconsistency of claiming abandonment when an employee actively seeks reinstatement.

    The Court also distinguished between fixed-term and probationary employment contracts. The Court determined that the employees’ contracts were not fixed-term but rather probationary, as evidenced by provisions for loyalty bonuses and salary increases upon reaching certain milestones. This distinction is crucial because probationary employees can only be terminated for just cause or failure to meet reasonable standards. Additionally, the Court underscored that for abandonment to be valid, two factors must exist: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever the employer-employee relationship.

    The absence of a just cause for termination further solidified the Court’s finding of illegal dismissal. Under Article 279 of the Labor Code, an employee unjustly dismissed is entitled to reinstatement and full back wages. However, the NLRC’s award of back wages for six months was deemed binding, as the employees did not contest it. This aspect of the decision reinforces the principle that a party who does not appeal a decision is presumed to have accepted the adjudication.

    In addressing the liability of corporate officers, the Supreme Court clarified the circumstances under which they can be held solidarily liable with the corporation. The Court referred to the case of Grandteq Industrial Steel Products, Inc. v. Estrella, stating:

    “In labor cases, for instance, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of employees done with malice or in bad faith.”

    However, the Court noted that since there was no finding of malice or bad faith on the part of Lopez, Jr., he could not be held solidarily liable with Newfield.

    This case serves as a significant reminder of the rights of employees against illegal dismissal. Employers must ensure that terminations are based on just or authorized causes and that due process is observed. The burden of proving abandonment rests heavily on the employer, and any ambiguity will be construed in favor of the employee. Employees, on the other hand, must promptly contest any termination they believe to be unjust to negate any claim of abandonment. The interaction between these factors determines the outcome of illegal dismissal disputes.

    FAQs

    What was the key issue in this case? The key issue was whether the employees were illegally dismissed by the employer or had voluntarily abandoned their jobs, leading to a breach of their employment agreements.
    What is required to prove abandonment of employment? To prove abandonment, an employer must demonstrate both the employee’s failure to report to work without a valid reason and a clear intention to sever the employment relationship, evidenced by overt acts.
    What is the significance of filing a complaint for illegal dismissal? Filing a complaint for illegal dismissal demonstrates the employee’s intention to return to work and negates any suggestion of abandonment, as it indicates a desire to maintain the employment relationship.
    What is the difference between a fixed-term and a probationary employment contract? A fixed-term contract has a predetermined end date, while a probationary contract allows the employer to assess the employee’s qualifications for a regular position within a reasonable period.
    Under what conditions can a probationary employee be terminated? A probationary employee can be terminated for a just or authorized cause or when they fail to meet the reasonable standards prescribed by the employer to qualify as a regular employee.
    When can corporate officers be held solidarily liable for illegal dismissal? Corporate officers can be held solidarily liable with the corporation for illegal dismissal if they acted with malice or bad faith in terminating the employee’s employment.
    What remedies are available to an employee who is illegally dismissed? An employee who is illegally dismissed is generally entitled to reinstatement, full back wages, and other benefits from the time of dismissal until actual reinstatement.
    What is the effect of silence in response to an accusation of illegal dismissal? Silence in response to a direct accusation of illegal dismissal can be interpreted as an admission, especially if a denial would be the natural and expected response.

    The Fernandez v. Newfield case provides critical guidance on the nuances of illegal dismissal and abandonment in employment law. Employers must be vigilant in adhering to due process and demonstrating just cause for termination, while employees must actively assert their rights to protect against unjust separation from employment.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Fernandez vs. Newfield, G.R. No. 201979, July 10, 2013