The Supreme Court ruled that an employee’s failure to disclose prior employment on a job application is not the same as providing false information. This decision underscores the principle that labor laws and contracts must be interpreted in favor of the employee, especially when ambiguities arise. The court emphasized that termination based on a mere omission, without a clear intent to deceive or any proven damage to the employer, is unduly harsh. This ruling serves as a reminder to employers to carefully consider the proportionality of disciplinary actions and to respect the constitutional mandate to protect labor rights.

When an Omission Isn’t a Lie: Examining Employment Application Disclosures

Nancy Claire Pit Celis was hired by Bank of Makati (A Savings Bank), Inc. as an Account Officer and later became an Administrative Officer. The bank later discovered that Celis had previously worked at Rural Bank of Placer and had not disclosed this in her application. The bank also alleged she was involved in an embezzlement case at her former employer. Celis was terminated for violating the bank’s Code of Conduct, which prohibited knowingly giving false or misleading information in employment applications. The central legal question was whether Celis’s omission constituted a violation of the bank’s code of conduct justifying her termination.

The Labor Arbiter (LA) and the National Labor Relations Commission (NLRC) initially ruled in favor of Celis, finding that her omission did not warrant termination. The Court of Appeals (CA), however, reversed this decision, stating that Celis effectively gave false information by not disclosing her previous employment. The Supreme Court disagreed with the CA, emphasizing that doubts in interpreting labor legislation should be resolved in favor of the employee. The Court referenced the constitutional policy of protecting labor, citing both the Civil Code and the Labor Code, which mandate interpretations favorable to workers in cases of doubt.

“In line with the Constitutional policy of giving protection to labor, the Civil Code and the Labor Code provide that doubts in the interpretation of labor legislation and contracts shall be construed in favor of labor. Likewise, the Court has consistently held that doubts in the appreciation of evidence in labor cases shall work to the advantage of labor.”

To justify termination, the employer must prove a just cause, which was not sufficiently demonstrated in this case. The Court highlighted that Celis did not make an overt or positive act of providing false information. Her omission was not the same as knowingly giving false or misleading information. The bank failed to show that Celis was ever found liable or disciplined by her former employer. The absence of any derogatory record from the Bank of Placer further weakened the bank’s claim that Celis’s omission was a serious offense.

The Supreme Court also addressed the bank’s argument that it would not have hired Celis had it known about her past employment. The Court noted that Celis had been working with the bank for nearly five years before the issue arose. The timing of the bank’s concern suggested a retaliatory motive. The LA pointed out that the bank only raised the issue after Celis revealed alleged anomalous transactions involving bank personnel. This raised doubts about the bank’s true motivations for the termination.

Further, the Supreme Court rejected the CA’s application of the Principle of Totality of Infractions. This principle allows an employer to consider an employee’s past offenses when determining the appropriate penalty for a subsequent infraction. However, the Court clarified that previous offenses can only aggravate a subsequent infraction if they are related. Celis’s past infractions, which involved discourtesy to fellow employees and personal borrowing from bank clients, were unrelated to the alleged dishonesty in her employment application. These prior offenses could not be used to justify her dismissal in this instance.

“Previous offenses may be used to aggravate a subsequent infraction to justify an employee’s dismissal only if they are related to the subsequent offense upon which termination is decreed.”

The Court cited Sy v. Neat, Inc., where it ruled that an employee’s improper uniform was unrelated to subsequent infractions of insubordination. The Court also referenced De Guzman v. NLRC, emphasizing that prior infractions must be similar to the subsequent offense to be considered. Since Celis’s infractions were dissimilar, the CA erred in applying the Principle of Totality of Infractions.

As Celis was illegally dismissed, the Court addressed her entitlement to monetary awards. Illegally dismissed employees are entitled to full backwages from the time their compensation was withheld until actual reinstatement. The Court found Celis’s preventive suspension unjust because her omission did not pose a serious threat to the bank. Therefore, she was entitled to backwages from the start of her suspension. However, due to the strained relations between Celis and the bank, the Court deemed it best to award separation pay in lieu of reinstatement. This decision acknowledges the practical difficulties of reintegrating an employee into a hostile work environment.

Moral and exemplary damages are not automatically awarded in illegal dismissal cases. They are only recoverable if the dismissal is attended by bad faith, fraud, or oppressive acts. In this case, the Court found no evidence of malice. The bank genuinely believed it had a just cause to dismiss Celis. Thus, she was not entitled to moral or exemplary damages. Nevertheless, Celis was entitled to attorney’s fees because she was compelled to litigate to protect her rights. The Court imposed a legal interest of 6% per annum on the monetary awards from the finality of the decision until full payment.

In conclusion, the Supreme Court’s decision reinforces the protection afforded to labor under Philippine law. It clarifies the distinction between an omission and a false statement in the context of employment applications. It underscores the importance of proportionality in disciplinary actions and the need for a clear nexus between past infractions and subsequent offenses to justify termination. This ruling serves as a reminder to employers to exercise caution and fairness in their dealings with employees, ensuring that labor rights are respected and upheld.

FAQs

What was the key issue in this case?	The key issue was whether an employee’s omission of prior employment on a job application constituted a violation of the employer’s code of conduct, justifying termination. The Supreme Court determined that an omission is not equivalent to providing false information.
What is the Principle of Totality of Infractions?	The Principle of Totality of Infractions allows employers to consider past offenses when determining the appropriate penalty for a subsequent infraction. However, this principle only applies if the prior offenses are related to the subsequent one.
Was the employee reinstated in this case?	No, the employee was not reinstated. Due to the strained relations between the employee and the employer, the Court awarded separation pay in lieu of reinstatement.
What monetary awards was the employee entitled to?	The employee was entitled to full backwages from the time her compensation was withheld, separation pay in lieu of reinstatement, and attorney’s fees. Legal interest was also imposed on the monetary awards.
What did the Court say about preventive suspension in this case?	The Court found the employee’s preventive suspension unjust because her omission did not pose a serious threat to the bank. As such, she was entitled to backwages from the start of her suspension.
Are moral and exemplary damages always awarded in illegal dismissal cases?	No, moral and exemplary damages are not automatically awarded. They are only recoverable if the dismissal is attended by bad faith, fraud, or oppressive acts.
What is the significance of construing labor laws in favor of the employee?	It reflects the constitutional policy of protecting labor. When ambiguities arise in interpreting labor laws or contracts, the interpretation that benefits the employee is favored to ensure their rights are upheld.
What should employers consider when disciplining employees for omissions on job applications?	Employers should consider the proportionality of the disciplinary action. Termination may be too harsh for a mere omission, especially if there is no evidence of intent to deceive or actual harm to the employer.
How does this case impact future employment disputes?	This case sets a precedent for interpreting employment application disclosures narrowly, requiring a clear showing of false statements rather than mere omissions to justify termination. It reinforces the importance of protecting labor rights and ensuring fair treatment of employees.

This ruling underscores the importance of carefully evaluating the grounds for termination and ensuring that disciplinary actions are proportionate to the offense. It also serves as a reminder to employers to uphold the constitutional mandate to protect labor rights and to resolve any doubts in favor of the employee.

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: Nancy Claire Pit Celis v. Bank of Makati, G.R. No. 250776, June 15, 2022