BERNADETH LONDONIO AND JOAN CORCORO,Petitioners,- versus -BIO RESEARCH, INC. AND WILSON Y. ANG, Respondents.G.R. No. 191459Present:CARPIO MORALES,BRION,BERSAMIN,VILLARAMA, JR., andSERENO, JJ.Promulgated:January 17, 2011

x - - - - - - - - - - - - - - - - - -xD E C I S I O NCARPIO MORALES, J.:Petitioners Bernadeth E. Londonio (Bernadeth) and Joan T. Corcoro (Joan) were hired by respondent Bio Research Inc. (Bio Research) as graphic/visual artists on February 12 and October 19, 2004, respectively.In a Memorandum dated April 30, 2005 which petitioners received on May 7, 2005,[1] Bio Research informed its employees including petitioners that pursuant to its plan to reduce the workforce in order to prevent losses, it would be severing their employment with the company. On May 9, 2005, Bio Research filed an Establishment Termination Report[2] with the Department of Labor and Employment (DOLE) stating that it was retrenching 18 of its employees including petitioners due to redundancy and to prevent losses.Bernadeth and Joan were in fact retrenched on May 26 and May 18, 2005, respectively.Joan accepted her retrenchment pay in the sum of P9,990.14 and executed a Quitclaim and Waiver[3] reading:

FOR AND IN CONSIDERATION OF THE SUM OF NINE THOUSAND NINE HUNDRED NINETY PESOS & 14/100 (P9,990.14), as financial assistance, receipt whereof in settlement of my claims, I x x x do hereby release/discharge xxx with principal office at x x x and/or its officers, from any or all claims/liabilities by way of unpaid wages, overtime pay, separation pay, retirement benefits, 13th month, or otherwise as may be due me incident to my past employment with the said x x x. I hereby state further that I have no more claim or cause of action of whatsoever nature whether past, present or contingent, including my alleged right for continued employment with xxx, and/or any of its officers.This QUITCLAIM AND WAIVER may be used to secure dismissal of any complaint or action already filed or may be subsequently filed either by myself, my heirs and successors in interests.I have executed this QUITCLAIM AND WAIVER voluntarily and of my own freewill and I understand the legal and factual consequences.Bernadeth refused to accept hers.Petitioners later filed a complaint for illegal dismissal, moral and exemplary damages and attorneys fees against respondent Bio Research and its co-respondent President/CEO Wilson Y. Ang (Ang). Petitioners claimed that their dismissal was done in bad faith and tainted with malice, being retaliatory in nature, following the filing by Bernadeth of a complaint against Jose Ang, Jr. (Jose), one of Bio Researchs managers, for a sexual harassment incident that occurred in his office on February 19, 2005.In support of their claim that their dismissal was retaliatory in nature, petitioners alleged that soon after the filing by Bernadeth of the sexual harassment complaint,[4] several members of the management approached Joan, to whom Bernadeth had poured her heart out after the incident, urging her to convince her friend Bernadeth to drop the complaint, to which she (Joan) paid no heed as she expressed support for Bernadeths cause.Petitioners added that an administrative investigation[5] of the sexual harassment complaint was in fact conducted by Bio Research but before it could be resolved, Jose resigned on April 15, 2005.[6]To refute Bio Researchs claim that it had been incurring business losses, Joan cited the recommendation for her regularization on April 12, 2005, 18 days before she received a copy of the Memorandum of April 30, 2005.Bio Research, disclaiming that the sexual harassment case had anything to do with its decision to terminate the services of petitioners, maintained that financial reverses prompted it to take such drastic action. It went on to stress that as Joan had already received her separation pay and had in fact signed a waiver and quitclaim in its favor, she is estopped from challenging the validity of her dismissal.By Decision of March 31, 2006,[7] the Labor Arbiter (LA) ruled in favor of petitioners, the dispositive portion of which reads:WHEREFORE, premises considered, judgment is entered finding that complainants were illegally dismissed by respondents in bad faith, ORDERING respondents BIO RESEARCH CORP. and/or WILSON ANG (President/Manager), to reinstate complainants to their former positions, without loss of seniority rights and benefits, and pay them full backwages from date of illegal dismissal/illegal retrenchments of complainants, Bernadette Londonio on 05/26/2005, Joan Corcoro is 05/18/2005, until actually reinstated, and to pay them moral and exemplary damages in the combined amount of P125,000.00 each, plus to pay them 10% of the total award as attorneys fees. Complainants full backwages, as of date of this decision is shown hereunder:Bernadette Londonio

1) BasicP95,000.00(05/26/2005-03/31/2006 10 months x P9,500)

2) 13th month payP7,307.69(1/12 P95,000.00)

3) 5 days SILPP1,314.16(P9,500.00/30=P316.66 x 5 x .83 year)

4) COLAP15,208.33(P50.00 X 365/12 P1,520.00 X 10months)

Total FBP118,830.18

Joan Corcoro

1) BasicP93,600.00(05/18/2005 03/31/2006 10.4 months x P9,000)

2) 13th month payP7,800.00(1/12 P93,600.00)

3) 5 days SILPP1,290.00(P9,000.00/30 = P300.00 X 5 X .86 YEAR)

4) COLAP15,816.66(P50.00 X 365/12+p1,520.00 X 10.4 Months)

Total FBP118,506.66

In finding against Bio Research, the LA held that it failed to prove financial losses to justify its call for the retrenchment of petitioners, and to use fair and reasonable criteria to ascertain who to dismiss or retain; and that Bio Research failed to comply with the requirements of Article 283 of the Labor Code ? that notice should be given to the DOLE and employees concerned at least a month before the intended retrenchment.Finally, the LA held that since Joans receipt of her salary for the period April 11, 2005 April 18, 2005, the amount which was lumped with her retrenchment pay, was conditioned on her signing the quitclaim, the execution thereof was done through force, hence, not valid.On appeal by respondents, the National Labor Relations Commission (NLRC), by Resolution of February 18, 2008,[8] affirmed the LAs decision. And it denied respondents reconsideration of its decision by Resolution of May 30, 2008.The Court of Appeals to which respondents assailed the NLRC resolutions by certiorari, sustained the ratio decidendi behind the NLRC decision in favor of petitioners, by Decision of May 27, 2009.[9] Specifically with respect to Joan, however, it pronounced that she could no longer question the legality of her dismissal in light of her execution of the quitclaim and waiver.Further, the appellate court departed from the NLRC ruling holding respondent Ang solidarily liable with Bio Research for the money claims of petitioners, the latter having failed to show that Ang was impelled by malice and bad faith in dismissing them. Thus the appellate court held:Settled is the rule in this jurisdiction that a corporation is invested by law with a legal personality separate and distinct from those acting for and in behalf and, in general, from the people comprising it. Thus, obligations incurred by corporate officers acting as corporate agents are not theirs but the direct accountabilities of the corporation they represent. True, solidary liabilities may at times be incurred by corporate officers, but only when exceptional circumstances so warrant. For instance, in labor cases, corporate directors and officers may be held solidarily liable with the corporation for the termination of employment if done with malice or in bad faith.[10]Finally, the appellate court deleted the award of moral and exemplary damages.[11]The appellate court thus disposed:WHEREFORE, the instant petition for certiorari is PARTIALLY GRANTED. The assailed Resolutions of the public respondent National Labor Relations Commission, in NLRC NCR-06-05472(05) CA No. 050702-06, are AFFIRMED with the following MODIFICATIONS: (1) petitioner Wilson Y. Ang is ABSOLVED from any liability adjudged against co-petitioner Bio Research, Inc.; (2) the awards of moral and exemplary damages in favor of the private respondents Bernadeth E. Londonio and Joan Corcoro are DELETED; and (3) the complaint for illegal dismissal insofar as private respondent Joan Corcoro is concerned is DISMISSED.SO ORDERED.[12] (underscoring supplied)Petitioners Motion for Reconsideration of the appellate courts decision having been denied,[13] they filed the present petition for review on certiorari, contending that. . . petitioner [Joan] is not barred to question the validity of her dismissal notwithstanding the execution of a waiver and quitclaim;. . . they are entitled to the award of damages; and. . . Wilson Y. Ang is solidarily liable with Bio Research.Absent any showing that the appellate court ignored, misconstrued and misapplied facts and circumstances of substance, its affirmance of the NLRC decision holding that petitioners were illegally dismissed stands. It is settled that where the Labor Arbiter, the NLRC and the Court of Appeals all concur in their factual findings and it does not appear that they acted with grave abuse of discretion or otherwise acted without jurisdiction or in excess of the same, this Court is bound by the said findings.[14] The Labor Arbiter and the NLRC, being the most equipped and having acquired expertise in the specific matters entrusted to their jurisdiction, their findings of fact are accorded not only respect but even finality if they are supported by substantial evidence, or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.[15]Verily, in determining that petitioners were illegally retrenched, the appellate court pointed out that not only did Bio Research fail to submit in evidence its audited financial statements to show its financial condition prior to and at the time it enforced its retrenchment program; it also failed to show that it adopted fair and reasonable standards in ascertaining who would be retained or dismissed among it employees.[16]It is, however, with respect to the appellate courts ruling that Joan is, on account of her execution of the waiver and quitclaim, estopped from questioning her dismissal that this Court takes exception.An employees execution of a final settlement and receipt of amounts agreed upon do not foreclose his right to pursue a claim for illegal dismissal.[17] For, as reflected above, Joan was illegally retrenched. She is thus entitled to reinstatement without loss of seniority rights and privileges, as well as to payment of full backwages from the time of her separation until actual reinstatement, less the amount of P9,990.14 which she received as retrenchment pay.Respecting the appellate courts freeing Ang from liability, the same is in order. Corporate officers, absent any evidence that they have exceeded their authority, are not personally liable for their official acts. For a corporation has, by legal fiction a personality separate and distinct from its officers, stockholders and members. In cases of illegal dismissal, this fictional veil may be pierced and its directors and officers held solidarily liable with it, where the dismissals of its employees are done with malice or in bad faith, which was not proven to be the case here.[18]As for the deletion by the appellate court of the award of moral and exemplary damages, the same is in order too, petitioners having failed to substantiate their claim that their dismissal was made in bad faith.WHEREFORE, the challenged Decision and Resolution of the Court of Appeals are AFFIRMED with the MODIFICATION in that petitioner Joan Corcoro is ordered reinstated to her former position, without loss of seniority rights and with full backwages from the time of the termination of her employment until reinstated less the amount of P9,990.14, or if reinstatement is not possible, the payment of separation pay equivalent to one half month salary for every year of service.The Decision is, in all other respects, including the reinstatement of Bernadeth Londonio, AFFIRMED.SO ORDERED.HOSPITAL MANAGEMENT SERVICES, INC. - MEDICAL CENTER MANILA,Petitioner,- versus -HOSPITAL MANAGEMENT SERVICES, INC. MEDICAL CENTER MANILA EMPLOYEES ASSOCIATION-AFW and EDNA R. DE CASTRO,Respondents.G.R. No. 176287Present:CARPIO, J., Chairperson,NACHURA, PERALTA,ABAD, andMENDOZA, JJ.Promulgated:January 31, 2011

x-------------------------------xDECISIONPERALTA, J.:Before this Court is a petition for review on certiorari seeking to set aside the Decision[1] dated May 24, 2006 and Resolution[2] dated January 10, 2007 of the Court of Appeals (CA), Special First Division, in CA-G.R. SP No. 73189, entitled Hospital Management Services, Inc.-Medical Center Manila Employees Association-AFW and Edna R. De Castro v. National Labor Relations Commission, Hospital Management Services, Inc.-Medical Center Manila and Asuncion Abaya-Morido, which reversed and set aside the Decision[3] dated February 28, 2002 of the National Labor Relations Commission (NLRC), Second Division, in NLRC NCR No. 00-07-07716-99 (CA No. 027766-01), and its Resolution[4] dated May 31, 2002. The assailed CA decision ordered petitioner Hospital Management Services, Inc.-Medical Center Manila to reinstate respondent Edna R. De Castro to her former position without loss of seniority rights or by payroll reinstatement, pursuant to the Labor Arbiter's Decision dated January 18, 2001, but with payment of full backwages and other benefits or their monetary equivalent, computed from the expiration of the 14-day suspension period up to actual reinstatement.The antecedent facts are as follows:Respondent De Castro started working as a staff nurse at petitioner hospital since September 28, 1990, until she was dismissed on July 20, 1999.Between 2:00 a.m. to 3:00 a.m. of March 24, 1999, while respondent De Castro and ward-clerk orientee Gina Guillergan were at the nurse station on night duty (from 10:00 p.m. of March 23, 1999 to 6:00 a.m. of March 24, 1999), one Rufina Causaren, an 81-year-old patient confined at Room 724-1 of petitioner hospital for gangrenous wound on her right anterior leg and right forefoot and scheduled for operation on March 26, 1999, fell from the right side of the bed as she was trying to reach for the bedpan. Because of what happened, the niece of patient Causaren staying in the room was awakened and she sought assistance from the nurse station. Instead of personally seeing the patient, respondent De Castro directed ward-clerk orientee Guillergan to check the patient. The vital signs of the patient were normal. Later, the physician on duty and the nursing staff on duty for the next shift again attended to patient Causaren.Chief Nurse Josefina M. Villanueva informed Dr. Asuncion Abaya-Morido, president and hospital director, about the incident and requested for a formal investigation. On May 11, 1999, the legal counsel of petitioner hospital directed respondent De Castro and three other nurses on duty, Staff Nurse Janith V. Paderes and Nursing Assistants Marilou Respicio and Bertilla T. Tatad, to appear before the Investigation Committee on May 13, 1999, 2:00 p.m., at the conference room of petitioner hospital. During the committee investigation, respondent De Castro explained that at around 2:30 a.m. to 3:00 a.m., she was attending to a newly-admitted patient at Room 710 and, because of this, she instructed Nursing Assistant Tatad to check the vital signs of patient Causaren, with ward-clerk orientee Guillergan accompanying the latter. When the two arrived at the room, the patient was in a squatting position, with the right arm on the bed and the left hand holding on to a chair.In the Investigation Report[5] dated May 20, 1999, the Investigation Committee found that the subject incident happened between 11:00 a.m. to 11:30 a.m. of March 23, 1999. The three other nurses for the shift were not at the nurse station. Staff Nurse Paderes was then in another nurse station encoding the medicines for the current admissions of patients, while Nursing Assistant Respicio was making the door name tags of admitted patients and Nursing Assistant Tatad delivered some specimens to the laboratory. The committee recommended that despite her more than seven years of service, respondent De Castro should be terminated from employment for her lapse in responding to the incident and for trying to manipulate and influence her staff to cover-up the incident. As for Staff Nurse Paderes and Nursing Assistants Respicio and Tatad, the committee recommended that they be issued warning notices for failure to note the incident and endorse it to the next duty shift and, although they did not have any knowledge of the incident, they should be reminded not to succumb to pressure from their superiors in distorting the facts.On July 5, 1999, Janette A. Calixijan, HRD Officer of petitioner hospital, issued a notice of termination, duly noted by Dr. Abaya-Morido, upon respondent De Castro, effective at the close of office hours of July 20, 1999, for alleged violation of company rules and regulations, particularly paragraph 16 (a), Item 3, Chapter XI of the Employee's Handbook and Policy Manual of 1996 (Employee's Handbook):[6] (1) negligence to follow company policy on what to do with patient Rufina Causaren who fell from a hospital bed; (2) failure to record and refer the incident to the physician-[on- duty and] allow[ing] a significant lapse of time before reporting the incident; (3) deliberately instructing the staff to follow her version of the incident in order to cover up the lapse; and (4) negligence and carelessness in carrying out her duty as staff nurse-on-duty when the incident happened.On July 21, 1999, respondent De Castro, with the assistance of respondent Hospital Management Services Inc.-Medical Center Manila Employees Association-AFW, filed a Complaint[7] for illegal dismissal against petitioners with prayer for reinstatement and payment of full backwages without loss of seniority rights, P20,000.00 moral damages, P10,000.00 exemplary damages, and 10% of the total monetary award as attorney's fees.On January 18, 2001, the Labor Arbiter rendered a Decision,[8] ordering petitioner hospital to reinstate respondent De Castro to her former position or by payroll reinstatement, at the option of the former, without loss of seniority rights, but without backwages and, also, directing petitioners to notify her to report to work. Her prayer for damages and attorney's fees was denied. The Labor Arbiter concluded that although respondent De Castro committed the act complained of, being her first offense, the penalty to be meted should not be dismissal from the service, but merely 7 to 14 days suspension as the same was classified as a less serious offense under the Employees Handbook.On appeal by respondent De Castro, the NLRC rendered a Decision dated February 28, 2002, reversing the findings of the Labor Arbiter and dismissing the complaint against the petitioners. It observed that respondent De Castro lacked diligence and prudence in carrying out her duty when, instead of personally checking on the condition of patient Causaren after she fell from the bed, she merely sent ward-clerk orientee Guillergan to do the same in her behalf and for influencing her staff to conceal the incident.On May 31, 2002, the NLRC denied respondent De Castro's Motion for Reconsideration dated April 16, 2002.On May 24, 2006, the CA reversed and set aside the Decision of the NLRC and reinstated the Decision of the Labor Arbiter, with modification that respondent De Castro should be entitled to payment of full backwages and other benefits, or their monetary equivalent, computed from the expiration of the 14-day-suspension period up to actual reinstatement. The CA ruled that while respondent De Castro's failure to personally attend to patient Causeran amounted to misconduct, however, being her first offense, such misconduct could not be categorized as serious or grave that would warrant the extreme penalty of termination from the service after having been employed for almost 9 years. It added that the subject infraction was a less serious offense classified under commission of negligent or careless acts during working time or on company property that resulted in the personal injury or property damage causing expenses to be incurred by the company stated in subparagraph 11, paragraph 3 (B), Chapter XI [on the Rules on Discipline] of the Employee's Handbook[9] of petitioner hospital. The CA did not sustain the NLRC's ruling that respondent De Castro's dismissal was proper on the ground that her offense was aggravated to serious misconduct on account of her alleged act of asking her co-employees to lie for her as this fact was not proven.Petitioners' motion for reconsideration was denied by the CA in the Resolution dated January 10, 2007.Hence, this present petition.Petitioners allege that the deliberate refusal to attend to patient Causaren after the latter fell from the bed justifies respondent De Castro's termination from employment due to serious misconduct. They claim that respondent De Castro failed to: (a) personally assist the patient; (b) check her vital signs and examine if she sustained any injury; (c) refer the matter to the patient's attending physician or any physician-on-duty; and (d) note the incident in the report sheet for endorsement to the next shift for proper monitoring. They also aver that respondent De Castro persuaded her co-nurses to follow her version of what transpired so as to cover up her nonfeasance.In her Comment, respondent De Castro counters that there was no serious misconduct or gross negligence committed, but simple misconduct or minor negligence which would warrant the penalty of 7 to 14 days of suspension under the Employee's Handbook of petitioner hospital. She denies exerting influence over the four nursing personnel, but points out that it was Chief Nurse Villanueva, a close friend of patient Causaren's niece, who persuaded the four nursing staff to retract their statements appearing in the incident reports as to the approximate time of occurrence, from 2:00 a.m. to 3:00 a.m. of March 24, 1999 to 11:00 p.m. to 11:30 p.m. of March 23, 1999, so as to pin her for negligence. She appeals for leniency, considering that the subject infraction was her first offense in a span of almost nine years of employment with petitioner hospital.We affirm with modification the CA ruling which declared petitioners guilty of illegal dismissal.Article 282 (b) of the Labor Code provides that an employer may terminate an employment for gross and habitual neglect by the employee of his duties. The CA ruled that per the Employees Handbook of petitioner hospital, respondent De Castros infraction is classified as a less serious offense for commission of negligent acts during working time as set forth in subparagraph 11, paragraph 3 (B) of Chapter XI[10] thereof. Petitioners anchor respondent De Castros termination of employment on the ground of serious misconduct for failure to personally attend to patient Causaren who fell from the bed as she was trying to reach for the bedpan. Based on her evaluation of the situation, respondent De Castro saw no necessity to record in the chart of patient Causaren the fact that she fell from the bed as the patient did not suffer any injury and her vital signs were normal. She surmised that the incident was not of a magnitude that would require medical intervention as even the patient and her niece did not press charges against her by reason of the subject incident.It is incumbent upon respondent De Castro to ensure that patients, covered by the nurse station to which she was assigned, be accorded utmost health care at all times without any qualification or distinction. Respondent De Castros failure to personally assist patient Causaren, check her vital signs and examine if she sustained any injury, refer the matter to the patient's attending physician or any physician-on-duty, and note the incident in the report sheet for endorsement to the next shift for proper monitoring constitute serious misconduct that warrants her termination of employment. After attending to the toxic patients under her area of responsibility, respondent De Castro should have immediately proceeded to check the health condition of patient Causaren and, if necessary, request the physician-on-duty to diagnose her further. More importantly, respondent De Castro should make everything of record in the patients chart as there might be a possibility that while the patient may appear to be normal at the time she was initially examined, an injury as a consequence of her fall may become manifest only in the succeeding days of her confinement. The patients chart is a repository of ones medical history and, in this regard, respondent De Castro should have recorded the subject incident in the chart of patient Causaren so that any subsequent discomfort or injury of the patient arising from the incident may be accorded proper medical treatment.Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes want of care in the performance of one's duties. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee.[11] Despite our finding of culpability against respondent De Castro; however, we do not see any wrongful intent, deliberate refusal, or bad faith on her part when, instead of personally attending to patient Causaren, she requested Nursing Assistant Tatad and ward-clerk orientee Guillergan to see the patient, as she was then attending to a newly-admitted patient at Room 710. It was her judgment call, albeit an error of judgment, being the staff nurse with presumably more work experience and better learning curve, to send Nursing Assistant Tatad and ward-clerk orientee Guillergan to check on the health condition of the patient, as she deemed it best, under the given situation, to attend to a newly-admitted patient who had more concerns that needed to be addressed accordingly. Being her first offense, respondent De Castro cannot be said to be grossly negligent so as to justify her termination of employment. Moreover, petitioners allegation, that respondent De Castro exerted undue pressure upon her co-nurses to alter the actual time of the incident so as to exculpate her from any liability, was not clearly substantiated.Negligence is defined as the failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation.[12] The Court emphasizes that the nature of the business of a hospital requires a higher degree of caution and exacting standard of diligence in patient management and health care as what is involved are lives of patients who seek urgent medical assistance. An act or omission that falls short of the required degree of care and diligence amounts to serious misconduct which constitutes a sufficient ground for dismissal.However, in some cases, the Court had ruled that sanctioning an erring employee with suspension would suffice as the extreme penalty of dismissal would be too harsh.[13] Considering that this was the first offense of respondent De Castro in her nine (9) years of employment with petitioner hospital as a staff nurse without any previous derogatory record and, further, as her lapse was not characterized by any wrongful motive or deceitful conduct, the Court deems it appropriate that, instead of the harsh penalty of dismissal, she would be suspended for a period of six (6) months without pay, inclusive of the suspension for a period of 14 days which she had earlier served. Thereafter, petitioner hospital should reinstate respondent Edna R. De Castro to her former position without loss of seniority rights, full backwages, inclusive of allowances and other benefits, or their monetary equivalent, computed from the expiration of her suspension of six (6) months up to the time of actual reinstatement.WHEREFORE, the petition is DENIED. The Decision dated May 24, 2006 and Resolution dated January 10, 2007 of the Court of Appeals, Special First Division, in CA-G.R. SP No. 73189, which reversed and set aside the Decision dated February 28, 2002 and Resolution dated May 31, 2002 of the National Labor Relations Commission, Second Division, are AFFIRMED WITH MODIFICATION insofar as respondent Edna R. De Castro is found guilty of gross negligence and is SUSPENDED for a period of SIX (6) MONTHS without pay, inclusive of the suspension for a period of 14 days which she had earlier served. Petitioner Hospital Management Services, Inc.-Medical Center Manila is ORDERED to reinstate respondent Edna R. De Castro to her former position without loss of seniority rights, full backwages, inclusive of allowances and other benefits, or their monetary equivalent, computed from the expiration of her suspension of six (6) months up to the time of actual reinstatement.SO ORDERED.SANDEN AIRCON PHILIPPINESG.R. No. 169260

and ANTONIO ANG,

Petitioners,

Present:

CORONA, C. J., Chairperson,

-versus-VELASCO, JR.,

LEONARDO-DE CASTRO,

DEL CASTILLO, and

PEREZ, JJ.

LORESSA P. ROSALES,Promulgated:

Respondent.March 23, 2011

x - - - - - - - - - - - - - - - - - - - - - xD E C I S I O NDEL CASTILLO, J.:An employer has the discretion to dismiss an employee for loss of trust and confidence but the former may not use the same to cloak an illegal dismissal. This Petition for Review on Certiorari[1] assails the Decision[2] dated May 24, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 85698, which granted the petition for certiorari and reversed and set aside the Resolution[3] dated November 28, 2003 of the National Labor Relations Commission (NLRC) in NLRC CASE No. RAB-IV-9-9330-97-L (NLRC NCR CA No. 016826-98) and reinstated the Resolution[4] dated November 29, 2000 of the NLRC.Also assailed is the Resolution[5] dated August 1, 2005 denying the Motion for ReconsiderationFactual AntecedentsSanden Aircon Philippines (Sanden) is a corporation engaged in the business of manufacturing, assembling, and fabricating automotive air-conditioning systems.In August 1992, Sanden employed Loressa P. Rosales (Loressa) as Management Information System (MIS) Department Secretary. On December 26, 1996, she was promoted as Data Custodian and Coordinator. As such, Loressa had access to all computer programs and marketing computer data, including the Delivery Receipt Transaction files of Sanden. The Finance Department based its billing and collection activities on the marketing delivery receipt transactions. Loressas functions and authority include opening, editing and copying files in Sandens computers. She was also charged with the duty of creating back-up copies of all files under her custody. For this purpose, she can request all computer users at a particular time to log out or exit from the system.On May 16, 1997, Sanden discovered that the marketing delivery receipt transactions computer files were missing. The Internal Auditing Department, through its Audit Officer, Ernesto M. Bayubay (Ernesto), immediately sent a memorandum[6] dated May 17, 1997 to Garrick L. Ang (Garrick), the MIS Manager, requesting that a technical investigation be conducted.On May 19, 1997, Garrick issued a memorandum[7] enumerating the findings of the MIS Department, the pertinent portions of which read:This is in response on [sic] your request for a technical investigation regarding the missing Marketing Delivery Receipt (DR) transactions filed inside our computer system. The incident happened at [sic] the 16 of May 1997 12:35 noon in which we discovered a data corruption in the Marketing DR transactions file wherein all the data were missing. We immediately conducted an investigation of the incident and found out the following:1. Before the incident, [the] Marketing Staff are still using the said file until 12:00 noon [when they] were instructed by the Data Custodian (Ms. Loressa Rosales) to log out from the system because a back-up was to be conducted. The back-up activities never took place for [unknown reasons];2. We dont have an updated back up on the mentioned file which was the responsibility of the Data Custodian, the last back up of the file was [conducted] on 10 of May 1997.3. The incident can only happen when only one user [was] using the file and after the incident we immediately look[ed] into the Server Manager, a security auditing tool of the system, and found out that Ms. Loressa Rosales was the only one log[ged] in on the system at 12:05 noon to 12:21 noon with 16 minutes of usage time as witnesse[d] by many MIS personnel including one audit officer.4. The Data Custodian [has] all the rights of Add, Edit, Delete on all the files found in the system.5. So based on the facts that we have gathered it is highly probable that Ms. Loressa Rosales was the culprit in the said incident.On June 26, 1997, Atty. Reynaldo B. Destura (Atty. Reynaldo), the Personnel and Administrative Services Manager sent a letter[8] to Loressa charging her with data sabotage and absences without leave (AWOL). She was given 24 hours to explain her side.On July 2, 1997, Loressa submitted her letter[9] to Atty. Reynaldo where she vehemently denied the allegations of data sabotage. According to her, only a computer programmer equipped with the necessary expertise and not a mere data custodian like her would be capable of such an act. As to the charge of incurring absences without leave, she challenged Sanden to specify the dates and circumstances of her alleged AWOL.In a memorandum[10] dated July 3, 1997, Atty. Reynaldo scheduled the administrative investigation on the charge of data sabotage in the afternoon of the next day. The investigation pushed through as scheduled.On July 17, 1997, the husband of Loressa received a Notice[11] of Disciplinary Action from Sanden notifying Loressa that management is terminating Loressas employment effective upon receipt of the said communication. The reason cited by Sanden was the loss of trust on her capability to continue as its Coordinator and Data Custodian. Sanden indicated in the said letter that based on all the documents and written testimonies gathered during the investigation, Loressa caused the deliberate sabotage of the marketing data involving the Delivery Receipts.On September 9, 1997, Loressa filed a complaint[12] for illegal dismissal with a prayer for the payment of 13th month pay, attorneys fees and other benefits.In her position paper,[13] Loressa alleged that no evidence was presented during the investigation conducted by Sanden to prove that she indeed committed data sabotage. She claimed that she was singled out as the culprit based on mere suspicion unsupported by any testimonial or documentary evidence. The Delivery Receipts, which Sanden claims to have been deleted, were not presented during the investigation process. Moreover, there were no witnesses presented who pointed to Loressa as the one who actually committed the data sabotage.On the other hand, in Sandens position paper,[14] it alleged that at around noon of May 16, 1997, Loressa requested the Marketing Staff to log out or exit from the computer system because she would create a backup of the Marketing Delivery Receipt Transaction files. At that time, some members of the Marketing Staff were still using and encoding additional data but as requested, all of them logged out from the network. The Server Manager showed that from 12:05 p.m. to 12:21 p.m., the only computer logged in was that of Loressa. This is precisely the period when the deletion of the Marketing Delivery Receipt Transaction files occurred.Ruling of the Labor ArbiterOn May 28, 1998, Labor Arbiter Nieves De Castro rendered a Decision[15] finding that Sanden is guilty of illegal dismissal. She ruled that there exists no justifiable basis for Sandens act of terminating the services of Loressa. Nowhere in the records can be found evidence, documentary or otherwise (i) that will directly point to Loressas having committed data sabotage or (ii) that she absented herself without leave. The Labor Arbiter also ruled that since animosity between Sanden and Loressa already exists, the award of separation pay in lieu of reinstatement is in order and in accord with industrial peace and harmony. The dispositive portion of the Labor Arbiters Decision reads:WHEREFORE, premises considered, judgment is hereby rendered, declaring the dismissal of the complainant illegal and respondent Sanden Aircon Philippines, Inc. is ordered:1. To pay complainant backwages from the time of [her] dismissal up to the date of promulgation of this decision[;]2. To pay complainant separation pay of one (1) month for every year of service [from] the date of employment up to the date of promulgation of this decision[;]3. To pay attorneys fees of 10% of the total award[; and]4. [To have its] financial analyst x x x compute the monetary award[s which form] part of this decision.All other claims are dismissed for lack of merit.SO ORDERED.[16]Ruling of the National Labor Relations CommissionSanden sought recourse to the NLRC by submitting its Notice[17] of Appeal and Memorandum on Appeal on September 28, 1998.On November 29, 2000, the NLRC issued a Resolution[18] affirming the May 28, 1998 Decision of the Labor Arbiter with the modification that the computation of the amount of separation pay to be awarded be reckoned from December 26, 1996 which was the date when Loressa was hired by Sanden as Data Custodian and Coordinator. The NLRC found that Loressa was paid separation pay corresponding to the period beginning August 1992 (the date she was hired) up to December 26, 1996.Sanden filed a Motion for Reconsideration[19] of the NLRC Resolution.On November 28, 2003, the NLRC issued another Resolution[20] which reversed its November 29, 2000 Resolution and dismissed the complaint for lack of merit.Ruling of the Court of AppealsAggrieved, Loressa filed with the CA a petition for certiorari.[21] The CA through a Resolution[22] dated August 19, 2004, directed her to submit within five days from receipt of said resolution copies of Sandens appeal memorandum and motion for reconsideration of the November 29, 2000 resolution which were mentioned in her petition but were not attached thereto. On September 8, 2004, Loressa submitted the documents as directed by the CA.[23] On September 27, 2004, the CA issued its Resolution[24] noting the compliance of Loressa and also directing Sanden to file its comment.On October 18, 2004, Sanden filed a Motion for Extension of Time to File Comment.[25] This was granted by the CA through its Resolution[26] dated November 3, 2004. On November 5, 2004, Sanden filed its comment.[27]On May 24, 2005, the CA granted the petition and reversed and set aside the November 28, 2003 Resolution of the NLRC and reinstated the latters November 29, 2000 Resolution.Petitioners moved for reconsideration,[28] but to no avail. Hence, this appeal anchored on the following grounds:IssuesTHE COURT OF APPEALS ERRED IN RULING THAT PETITIONER SANDEN FAILED TO SUBSTANTIATE RESPONDENT ROSALESS DISMISSAL, CONSIDERING THAT:A. THE ASSERTION MADE BY THE COURT OF APPEALS AS TO THE POSSIBLE EXISTENCE OF A PARALLEL SET OF DOCUMENTS CORRESPONDING TO THE DELETED FILES, AS WELL AS THE POSSIBILITY OF A GLITCH IN THE COMPUTER SYSTEM WHICH CAUSED THE DELETION OF THE SUBJECT FILES, ARE HIGHLY SPECULATIVE AND CANNOT STAND AGAINST THE EVIDENCE ON RECORD.B. SIMILARLY, THE CLAIM THAT THE DELETION OF THE SUBJECT FILES COULD HAVE OCCURRED AT ANY POINT IN TIME IS PURELY SPECULATIVE AND CANNOT STAND AGAINST THE EVIDENCE ON RECORD.C. LIKEWISE, THE CLAIM THAT ANOTHER PERSON COULD HAVE CAUSED THE DELETION OF THE SUBJECT FILES CONSIDERING THAT RESPONDENT ROSALES COULD NOT POSSIBLY HAVE BEEN THE SOLE PERSON WITH ACCESS THERETO IS PURELY SPECULATIVE AND CANNOT STAND AGAINST THE EVIDENCE ON RECORD.D. HENCE, THERE IS MORE THAN SUFFICIENT SUBSTANTIAL EVIDENCE WARRANTING THE VALID DISMISSAL OF RESPONDENT ROSALES.[29]These matters boil down to a single issue of whether Sanden legally terminated Loressas employment on the ground of willful breach of trust and confidence as Coordinator and Data Custodian.Petitioners ArgumentsPetitioners contend that Loressa was vested with the delicate position of safekeeping the records of Sanden. She was charged with the duty of creating back up files so that Sanden may be fully protected in any eventuality. Loressas act, therefore, of maliciously deleting the Marketing Delivery Receipt Transaction files is a valid ground to dismiss her from her employment on the ground of loss of trust. It is betrayal of the highest order when the very custodian of the records deleted the same.According to petitioners, it was clearly shown by evidence that before the deletion of said files, the Marketing Staff were still using the files until noon when they were instructed by Loressa to log out from the system because a back up was to be conducted. The back up activities never took place and worse the data were deleted from the system. Petitioners emphasized that as Data Custodian, Loressa has capability to add, edit, or delete all the files in the system of Sanden.Petitioners also aver that from the time the data sabotage occurred on May 16, 1997 to May 30, 1997, Loressa went on AWOL for at least five times.Respondents ArgumentsLoressa insists that Sanden failed to provide sufficient evidence which would clearly point to her as the one who erased the files. For loss of trust and confidence to be a valid ground for dismissal of an employee, it must be founded on clearly established facts.In this case, the fact that Loressas computer was the only one logged on during the period that the alleged deletion of data occurred does not mean that she was the one who deleted the missing files. Loressa maintains that Sanden failed to substantially prove her direct involvement in the alleged deletion of the files except for a mere suspicion that it was she who deleted the data in question.As to the charge of her absences without leave, Loressa claims that they were not substantiated by any documentary evidence or testimony of a witness. As such, her dismissal from employment is without any legal ground.Our RulingThe petition is bereft of merit.Article 282 of the Labor Code states: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 representative; and(e) Other causes analogous to the foregoing.Article 282(c) of the Labor Code prescribes two separate and distinct grounds for termination of employment, namely: (1) fraud or (2) willful breach by the employee of the trust reposed in him by his employer or duly authorized representative.Settled is the rule that under Article 282(c), the breach of trust must be willful. Ordinary breach will not suffice. A breach is willful if it is done intentionally and knowingly without any justifiable excuse, as distinguished from an act done carelessly, thoughtlessly or inadvertently.[30]As firmly entrenched in our jurisprudence, loss of trust and confidence as a just cause for termination of employment is premised on the fact that an employee concerned holds a position where greater trust is placed by management and from whom greater fidelity to duty is correspondingly expected.[31] The betrayal of this trust is the essence of the offense for which an employee is penalized.[32]Sanden has the burden of proof to prove its allegations.Unlike in other cases where the complainant has the burden of proof to [prove] its allegations, the burden of establishing facts as bases for an employers loss of confidence in an employee facts which reasonably generate belief by the employer that the employee was connected with some misconduct and the nature of his participation therein is such as to render him unworthy of trust and confidence demanded of his position is on the employer.[33]While it is true that loss of trust and confidence is one of the just causes for termination, such loss of trust and confidence must, however, have some basis. Proof beyond reasonable doubt is not required. It is sufficient that there must only be some basis for such loss of confidence or that there is reasonable ground to believe if not to entertain the moral conviction that the concerned employee is responsible for the misconduct and that the nature of his participation therein rendered him absolutely unworthy of trust and confidence demanded by his position.[34]Sanden failed to discharge the burden of proof that the dismissal of Loressa is for a just cause.The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be holding a position of trust and confidence.In this case, we agree that Loressa, who had immediate access to Sandens confidential files, papers and documents, held a position of trust and confidence as Coordinator and Data Custodian of the MIS Department.The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary.[35]Sandens evidence against Loressa fails to meet this standard.Worth noting are the pertinent portions of the Resolution of the NLRCdated November 29, 2000 before it reversed itself, to wit:As correctly found by the Labor Arbiter, nowhere in the records can be found evidence that directly point to complainant as having committed acts of sabotage. Also, during the administrative investigation, the guilt of complainant-appellee was based on mere allegations not supported by documentary evidence nor any factual basis. Even appellants cannot directly pinpoint appellee as the culprit. They were only thinking of her as the one probably responsible thereto, considering that when she used the computer, she told the other users to log out and thereafter, used the computer for 16 minutes, with only 1 minute as usage time. But these allegations would not suffice (sic) termination of employment of appellee. Note that security of tenure is protected by constitutional mandate.The same holds true with AWOL. Appellant failed to prove that complainant-appellee went on absence without official leave. The appellant should have at least presented the daily time record of appellee to prove that the latter was absent. Mere allegations again would not suffice.[36]During the Administrative Investigation conducted by Sanden, there was no evidence presented to prove that Loressa indeed committed data sabotage. The Minutes[37] of the Discussion with respect to the May 16, 1997 data only made mention that Bobots theory is that it was zapped, meaning permanently deleted. It is therefore a mere theory with no apparent factual basis, testimonial or documentary evidence, that would establish the guilt of Loressa for the charges of data sabotage.On the other hand, Loressa was able to provide documentary evidence to show that Sandens computer system was experiencing some problems even before May 16, 1997. The March 22, 1996 Report[38] of the System Administrator, stated, viz:Marketing could not use their system due to error encountered such as an abnormal program termination (problem in pairing). Warehouse A is affected by this. o.e. in updating marketing inventory qty. (DR Transaction)[39]x x x xFurthermore, in the entry dated March 27, 1996, it was indicated:Restored Marketing Data from March 23 back-up.Files restored:1. DR HEAD2. DR ITEMReindexed both.*lacking data shall be reentered 3/25/95 & 3/26/95 transactions[40]The following entries as reported by the System Administrator clearly show that the problem of missing data already existed as early as 1995, when Loressa was still an MIS Secretary and was not yet tasked to back up the Marketing Delivery Receipt Transaction files.We also fully agree with the CA when it ruled that:On the contrary, we find the records bereft of any substantial evidence to show that the petitioner was indeed directly responsible for the deletion of the subject files or the alleged data sabotage. It is not difficult to see that the imputed guilt of the petitioner was based on mere allegations and theories held by private respondents as possible causes for the deletion of the subject files. In the first place, if the subject delivery receipt files were as crucial to the operations of the company as what the private respondents claimed them to be, then sound business judgment would dictate that it keep a record or paper trail of all its delivery transactions which could still be made available to the Finance Department for its billing and collection activities. It is common knowledge that no computer system is absolutely crash proof or bug-free and that a total obliteration of a particular computer file could be attributed to so many other causes other than the deliberate deletion of the same. In the second place, the deletion of the subject files could have occurred at any one point or time and not necessarily during the time at which the petitioner was the only registered user in the system. In this case, the private respondents failed to determine with absolute certainty and to show proof of the exact date or time when it occurred. Third and last, while it may be true that the petitioner had access to the subject files as well as the code to delete the same, it is hardly believable that she would be the sole person in the company who could access the same. It is noted that the petitioner worked under the supervision of an MIS Manager as well as other company officers, who in all probability also had access to the same files and codes available to the petitioner. x x x[41]Having shown that Sanden failed in discharging the burden of proof that the dismissal of Loressa is for a just cause, we have no other recourse but to declare that she was illegally dismissed based on the ground of loss of trust and confidence. This is in consonance with the constitutional guarantee of security of tenure.WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 85698 dated May 24, 2005 and its Resolution dated August 1, 2005 are AFFIRMED.SO ORDERED.