CHUA – QUA vs. CLAVE G.R. No.

L-49549 August 30, 1990

A truly remarkable case wherein the Supreme Court ruled in favor of “love”. The setting of the case was in  when marriage between minors was still
legal, way before the Family Code. In this case, a 30 year old teacher had married her student which prompted the school to terminate her. And
against all odds the Supreme Court Ruled in favor of her, hence, creating this Landmark Case. “truism that the heart has reasons of its own which
reason does not know.”
FACTS:
This would have been just another illegal dismissal case were it not for the controversial and unique situation that the marriage of herein petitioner,
then a classroom teacher, to her student who was fourteen (14) years her junior, was considered by the school authorities as sufficient basis for
terminating her services.
The case was about an affair and marriage of 30 years old teacher Evelyn Chua in Tay Tung High School in Bacolod City to her 16 years old student.
The petitioner teacher was suspended without pay and was terminated of his employment “for Abusive and Unethical Conduct Unbecoming of a
Dignified School Teacher” which was filed by a public respondent as a clearance for termination.
ISSUE:
Was her dismissal valid?
Whether or not there is substantial evidence to prove that the antecedent facts which culminated in the marriage between petitioner and her student
constitute immorality and or grave misconduct?
RULING:
The Supreme Court declared the dismissal illegal saying:
“Private respondent [the school] utterly failed to show that petitioner [30-year old lady teacher] took advantage of her position to court her student
[16-year old]. If the two eventually fell in love, despite the disparity in their ages and academic levels, this only lends substance to the truism that the
heart has reasons of its own which reason does not know. But, definitely, yielding to this gentle and universal emotion is not to be so casually
equated with immorality. The deviation of the circumstances of their marriage from the usual societal pattern cannot be considered as a defiance of
contemporary social mores.”
Finding that there is no substantial evidence of the imputed immoral acts, it follows that the alleged violation of Code of Ethics governing school
teachers would have no basis. Private respondent utterly failed to show that petitioner took advantage of her position to court her student. The
deviation of the circumstances of their marriage from the usual societal pattern cannot be considered as a defiance of contemporary social mores.
Dismissing an Employee on the Ground of Pregnancy Out of Wedlock – Valid or Not?
May an employer dismiss an employee on the ground that the latter got pregnant out of wedlock? What if the employer is a strict Catholic school that
imposes strict religious regulations, will this alone validate the dismissal made to the erring employee?
This situation has been raised many times before the Supreme Court, including this 2015 case concerning a well known Catholic school for girls.

Leus vs. St. Scholastica's College West Grove, GR No. 187226, Jan. 28, 2015
Cheryll Santos Leus was hired by St. Scholastica’s College Westgrove (SSCW) as an Assistant to SSCW’s Director of the Lay Apostolate and
Community Outreach Directorate on May 2001. Sometime in 2003, the petitioner and her boyfriend conceived a child out of wedlock. When SSCW
learned of the petitioner’s pregnancy, Sr. Edna Quiambao (Sr. Quiambao), SSCW’s Directress, advised her to file a resignation letter effective June
1, 2003. In response, the petitioner informed Sr. Quiambao that she would not resign from her employment just because she got pregnant without the
benefit of marriage. 
On May 28, 2003, Sr. Quiambao formally directed the petitioner to explain in writing why she should not be dismissed for engaging in pre-marital
sexual relations and getting pregnant as a result thereof, which amounts to serious misconduct and conduct unbecoming of an employee of a Catholic
school.
Cheryll replied stating that her pregnancy outside of wedlock does not amount to serious misconduct. She thereafter requested a copy of SSCW’s
policy so that she can better respond to the charge against her. SSCW did not a have these guidelines as the guidelines handbook was currently
pending of its promulgation. It instead stated that they follow the 1992 Manual of Regulations for Private School (1992 MRPS), specifically, Sec.94,
which cites “disgraceful or immoral conduct" as a ground for dismissal, in addition to the just causes for termination of employment under Art.282,
Labor Code.
The Labor Arbiter in Quezon City decided in favor of SSCW, stating that Cheryll being pregnant out of wedlock is considered “disgraceful and
immoral conduct” taking into account that she was employed in a Catholic institution which expect its employees to live up to the Catholic values it
teaches to the students. The NLRC affirmed the decision of the Labor Arbiter.
The question now raised before the Supreme Court is this – is Cheryll’s pregnancy out of wedlock constitutes a valid ground to terminate her
employment?
The Ruling of the Supreme Court.
The Supreme Court held that Cheryll was illegally dismissed by her employer. Her pregnancy out of wedlock does not constitute a valid ground to
terminate her employment.

Disgraceful conduct is viewed in two ways, the “public and secular view” and “religious view”. Our laws concern the first view. Disgraceful conduct
per se will not amount to violation of the law – the conduct must affect or poses a danger to the conditions of society, for example, the sanctity of
marriage, right to privacy and the like.
The Court cited Estrada vs. Escritur in the said case, stating the following relevant explanation;
(1)   if the father of the child is himself unmarried, the woman is not ordinarily administratively liable for disgraceful and immoral conduct. It may be
a not-so-ideal situation and may cause complications for both mother and child but it does not give cause for administrative sanction. There is no law
which penalizes an unmarried mother under those circumstances by reason of her sexual conduct or proscribes the consensual sexual activity between
two unmarried persons. Neither does the situation contravene any fundamental state policy as expressed in the Constitution, a document that
accommodates various belief systems irrespective of dogmatic origins.
(2)    if the father of the child born out of wedlock is himself married to a woman other than the mother, then there is a cause for administrative
sanction against either the father or the mother. In such a case, the “disgraceful and immoral conduct” consists of having extramarital relations with a
married person. The sanctity of marriage is constitutionally recognized and likewise affirmed by our statutes as a special contract of permanent
union.Accordingly, judicial employees have been sanctioned for their dalliances with married persons or for their own betrayals of the marital vow of
fidelity. In this case, it was not disputed that, like respondent, the father of her child was unmarried. Therefore, respondent cannot be held liable for
disgraceful and immoral conduct simply because she gave birth to the child Christian Jeon out of wedlock.
Furthermore,  there was no substantial evidence to prove that Cheryll’s pregnancy out of wedlock caused grave scandal to SSCW and its students.
Mere allegation of such will not render a judgment in favor of the one making the allegation. It is the burden of the employer to prove by substantial
evidence that the termination of the employment of the employee was made and failure to discharge that duty would mean that the dismissal is not
justified and therefore illegal.
 The Court ordered SSCW to reinstate Cheryll. But because this is not possible anymore due to constrained relations with SSCW, the Court ordered
the employer to pay Cheryll separation pay, full backwages and attorney’s fees.
The Supreme Court decided: 
WHEREFORE, in consideration of the foregoing disquisitions, the petition is GRANTED. The Decision dated September 24, 2008 and Resolution
dated March 2, 2009 of the Court of Appeals in CA-G.R. SP No. 100188 are hereby REVERSED and SET ASIDE. The respondent, St. Scholastica’s
College Westgrove, is hereby declared guilty of illegal dismissal and is hereby ORDERED to pay the petitioner, Cheryll Santos Leus, the following: 
(a) separation pay in lieu of actual reinstatement equivalent to one (1) month pay for every year of service, with a fraction of at least six (6) months
considered as one (1) whole year from the time of her dismissal up to the finality of this Decision; 
(b) full backwages from the time of her illegal dismissal up to the finality of this Decision; and 
(c) attorney’s fees equivalent to ten percent (10%) of the total monetary award. The monetary awards herein granted shall earn legal interest at the
rate of six percent (6%) per annum from the date of the finality of this Decision until fully paid. The case is REMANDED to the Labor Arbiter for
the computation of petitioner’s monetary awards.

NORKIS DISTRIBUTORS, INC. AND ALEX D. BUAT, Petitioners, vs DELFIN S. DESCALLAR, Respondent.
G.R. No. 185255, March 14, 2012
FACTS: Respondent Delfin S. Descallar was assigned at the Iligan City Branch of petitioner Norkis Distributors, Inc., a distributor of Yamaha
motorcycles. He became a regular employee and was promoted as Branch Manager. He acted as branch administrator and had supervision and
control of all the employees. Respondent was also responsible for sales and collection
In a memorandum, petitioners required respondent to explain in writing within 48 hrs why he should not be penalized or terminated for being absent
without official leave (AWOL) or rendering under-time service on certain dates. Respondent explained that he reported to the office on those dates,
but he either went to the bank or followed-up on prospects. As he was still within city limits, he did not file any official leave or travel record.
Norkis conducted an investigation. Finding that respondent was not able to prove that he was really in the branch or on official travel, petitioners
suspended him for 15 days without pay. According to petitioners, respondent admitted during the investigation that he used company time for his
personal affairs, but only for a few hours and not the whole day.
While respondent was still suspended, Norkis also found that Respondent committed some inappropriate and irregular acts such as unexplained low
performance of his branch, missing funds, unauthorized disbursement of funds, irregular transactions.
Petitioners terminated respondent’s services for loss of trust and confidence and gross inefficiency. Respondent filed a complaint for illegal
suspension and illegal dismissal. LA favored respondent. Petitioners appealed to NLRC. NLRC reversed the LA’s decision and found respondent to
have been validly dismissed. The NLRC, however, upheld the LA’s finding that petitioners are liable to respondent for unpaid wages. Respondent
filed MR. It was denied so he filed with the CA a petition for certiorari. CA reinstated with modification the decision of the LA. Respondent filed a
motion for clarification as to the awards of separation pay and back wages while petitioners filed MR. CA issued a Resolution stating that as regards
respondent’s motion for clarification, the separation pay and back wages shall be reckoned from the time respondent was illegally suspended until
finality of its earlier Decision. The CA likewise denied petitioners’ MR. Hence, petitioners filed the present petition.
ISSUE:
Was the failure of respondent to reach his monthly sales quota a valid basis for loss of trust and confidence?
RULING:
NO. Loss of trust and confidence as a ground for termination of an employee under Article 282 of the Labor Code requires that the breach of trust be
willful, meaning it must be done intentionally, knowingly, and purposely, without justifiable excuse. The basic premise for dismissal on the ground
of loss of confidence is that the employee concerned holds a position of trust and confidence. It is the breach of this trust that results in the
employer’s loss of confidence in the employee.
Here, there is no question that as petitioners’ Branch Manager in Iligan City, respondent was holding a position of trust and confidence. He was
responsible for the administration of the branch, and exercised supervision and control over all the employees. He was also incharge of sales and
collection.
In termination cases, the burden of proof rests upon the employer to show that the dismissal is for a just and valid cause and failure to do so would
necessarily mean that the dismissal was illegal. The quantum of proof required in determining the legality of an employee’s dismissal is only
substantial evidence. CA correctly held that petitioners failed to discharge this burden.
Failure to reach the monthly sales quota cannot be considered an intentional and unjustified act of respondent amounting to a willful breach of trust
on his part that would call for his termination based on loss of confidence. This is not the willful breach of trust and confidence contemplated in
Article 282(c) of the Labor Code. Low sales performance could be attributed to several factors which are beyond respondent’s control. To be a valid
ground for an employee’s dismissal, loss of trust and confidence must be based on a willful breach. To repeat, a breach is willful if it is done
intentionally, knowingly and purposely, without justifiable excuse.
Petitioners having failed to establish by substantial evidence any valid ground for terminating respondent’s services, we uphold the finding of the
Labor Arbiter and the CA that respondent was illegally dismissed.
An illegally dismissed employee is entitled to two reliefs: back wages and reinstatement. The two reliefs provided are separate and distinct. In
instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted.
The normal consequences of respondent’s illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of back wages
computed from the time compensation was withheld from him up to the date of actual reinstatement. Where reinstatement is no longer viable as an
option, separation pay equivalent to one month salary for every year of service should be awarded as an alternative. The payment of separation pay is
in addition to payment of back wages.
The CA merely clarified the period of payment of back wages and separation pay up to the finality of its decision modifying the LA’s decision. In
view of the modification of monetary awards in the Labor Arbiter’s decision, the time frame for the payment of back wages and separation pay is
accordingly modified to the finality of the CA decision.
WHEREFORE, the petition for review on certiorari is DENIED.

Prudential Bank vs. Mauricio - GR No. 183350

FACTS: Respondent Mauricio was the Branch Manager of Prudential Bank’s Magallanes Branch in Makati City when he was dismissed from
employment.
Spouses Marcelo and Corazon Cruz (Spouses Cruz) opened a dollar savings account (FXSD No. 221-6) with an initial cash deposit of US$500.00, in
the Bank’s Magallanes Branch. At that time, Mauricio was already its Branch Manager. Spouses Cruz also executed Deeds of Real Estate Mortgage
over their properties in San Juan in favor of the bank.
An audit investigation was conducted in the Magallanes Branch. The reports of the audit team showed that from March 1991 to August 1991, credits
to FXSD No. 221-6 consisted mostly of dollar check deposits composed of U.S. Treasury Warrants (USTWs), U.S. Postal Money Orders, Travellers
Express and Amexco Money Orders. Despite the fact that Spouses Cruz were not the payees of said instruments and neither of them endorsed the
same, Mauricio allowed immediate withdrawals against them. Most of the proceeds of the encashments were then deposited to a peso savings
account, S/A No. 3396, also in the name of the Spouses Cruz.
The dollar checks were eventually returned by their drawee banks for having forged endorsements, alterations to the stated amounts, or being drawn
against insufficient funds, among other reasons. Allegedly, upon receipt of the returned checks at the Magallanes Branch, Mauricio debited FXSD
No. 221-6, but such debits were made against the uncollected deposits of the Spouses Cruz. Some of the returned checks and USTWs were lodged to
accounts receivable because the balance of FXSD No. 221-6 was not sufficient to cover the returned checks. Simultaneously, cash withdrawals were
allowed even if S/A No. 3396 did not have sufficient balance to cover the withdrawals at the time they were made.
Mauricio was directed to report for work at the Head Office immediately. The Prudential Bank President issued a Memorandum to Mauricio
furnishing him with a copy of the audit team’s report and directing him to report in writing within 72 hours from receipt of the memorandum why the
bank should not institute an action against him. The report showed that the bank was exposed to losses amounting to $774,561.58.
While the investigation against Mauricio was ongoing, as conducted by a Hearing Committee, the property subject of the Deeds of Real Estate
Mortgage executed by the Spouses Cruz was extrajudicially foreclosed by the Bank for. Spouses Cruz, however, sought the annulment and/or
declaration of nullity of foreclosure in a complaint or civil case filed with RTC- Makati.
The Bank claimed that it sent the proper demand letters to the Spouses but to no avail. Thus, it was constrained to foreclose the mortgaged property
extrajudicially for the settlement of the obligations of the Spouses Cruz including the returned USTWs, checks and drafts. Later, while the
investigation against Mauricio was still ongoing, the Bank filed an Amended Answer to implead Mauricio in its counterclaim in the case filed by the
Spouses against the former, contending that he conspired and confederated with the Spouses Cruz to commit the fraud.
The Hearing Committee of the Bank found that there was sufficient evidence to hold Mauricio guilty of the charges against him. The Board of
Directors issued Resolution considering the recommendation of the Hearing Committee and the Board found Antonio S.A. Mauricio to have violated
Bank policies and regulations and committed imprudent acts prejudicial to the interests of the Bank, resulting in monetary loss to the Bank and giving
rise to loss of trust and confidence. The services of Mr. Mauricio was terminated and that his retirement benefits was forfeited.
Mauricio filed with the NLRC a complaint for illegal dismissal with prayer for back wages, retirement and provident benefits, vacation and sick leave
credits, and actual, moral and exemplary damages, plus attorney’s fees. While the illegal dismissal complaint was pending, the Makati RTC rendered
a Decision in favor of the Spouses Cruz and Mauricio. It was affirmed by the CA and Supreme Court.
On the other hand, LA rendered a Decision holding that the Bank was justified in terminating Mauricio’s employment. The LA ruled that even if
Mauricio, as branch manager, was clothed with discretion, he gravely abused it to the detriment and prejudice of the Bank and that he was afforded
procedural due process before he was dismissed. However, LA ordered the bank to pay Mauricio his 13th month pay and sick leaves earned and
reimburse him his actual contributions to the provident fund, all with legal interest at 12% per annum from date of the decision until actual payment
and/or finality of the decision.
Mauricio filed a partial appeal of the LA’s decision with the NLRC, which, however, affirmed the LA’s decision. On appeal, CA set aside the NLRC
decision and ruled in favor of Mauricio. Bank filed the instant petition.
ISSUE:
Whether the acts of Mauricio with respect to the accounts of Spouses Cruz can be considered as grounds for his termination due to loss of trust and
confidence.
RULING:
Civil and labor cases require different quanta of proof – the former requiring preponderance of evidence while the latter only calls for substantial
evidence. Despite the dissimilarity, this does not spell closing our eyes to facts conclusively determined in one proceeding when the determination of
the very same facts are crucial in resolving the issues in another proceeding pursuant to the doctrine of res judicata.
The present labor case is closely related to the civil case that was decided with finality. In the civil case, the Bank’s counterclaim for actual and
exemplary damages against Mauricio was grounded on his alleged violations of office policies when he allowed the encashment and/or withdrawal
prior to clearing of numerous USTWs and dollar checks and allegedly tried concealing from the Bank the fact that said instruments were returned.
The RTC in the civil case ruled:
“Further, this court finds that PRUDENTIAL’s branch manager MAURICIO’s act of allowing SPOUSES CRUZ to immediately withdraw the
instruments is well within his functions as a branch manager. A person occupying such position exercises a certain degree of discretion with respect
to the accommodations extended to certain valued clients such as herein SPOUSES CRUZ. Having been recommended by the legal counsel himself
of PRUDENTIAL and in view of the fact that they have substantial deposit with the same bank, it cannot be doubted that SPOUSES CRUZ were
valued clients.”
The court also holds that MAURICIO was not in anyway prompted by any malicious motive in approving the encashment and/or withdrawal.
The acts and omissions alleged by the Bank in the civil case as basis of its counterclaim against Mauricio, are the very same acts and omissions
which were used as grounds to terminate his employment. Mauricio cannot be held to have abused the discretion he was clothed with absent some
semblance of parameters. In the absence of such guidelines, the validity of Mauricio’s acts can be tested by determining whether they were justified
under the circumstances. In exercising his discretion to allow the questioned withdrawals, Mauricio took into consideration the fact that the Spouses
Cruz have substantial deposit and security, and enjoyed a favorable credit standing with the Bank. No malice can be inferred from Mauricio’s acts
who tried to collect from the Spouses Cruz and reported all the transactions to the head office; in fact, the Bank never called his attention to any
irregularity in the transactions but even continued to credit the account of the spouses for the value of the returned checks. Under the circumstances,
Mauricio indeed fully considered the interest of his employer before approving the questioned transactions.
For a dismissal based on loss of trust and confidence to be valid, the breach of trust must be willful, meaning it must be done intentionally,
knowingly, and purposely, without justifiable excuse. Loss of trust and confidence stems from a breach of trust founded on dishonest, deceitful or
fraudulent act. This is obviously not the case here.
Office Order No. 1596, one of the office orders allegedly violated by Mauricio, provides:
“Approving officers shall exercise extreme caution in allowing deposit of, encashment or withdrawals against foreign and out-of-town checks.
Refund to the bank of the amount involved shall be the personal responsibility and accountability of the officer who authorized the deposit or
encashment over the counter when the check should be returned by the drawee bank for any reason whatsoever.”
The above company directive is an explicit admission that Mauricio was clothed with such discretion to enter into the questioned transactions as well
as a forewarning that in case the foreign and out-of-town checks were returned for whatever reason, the approving officer, in this case, Mauricio,
shall be personally responsible and accountable. “personal responsibility and accountability” could only mean the reimbursement of the value of any
dishonored check but does not mean termination of the approving officer’s employment for breaching the bank’s trust and confidence.
WHEREFORE, the petition for review on certiorari is DENIED.

G.R. No. 137795 March 26, 2003

COLEGIO DE SAN JUAN DE LETRAN – CALAMBA, petitioner vs. BELEN P. VILLAS, respondent.
FACTS: respondent Belen Villas was employed by the petitioner School as high school teacher in September 1985. On May 15, 1995, she applied for
a study leave for six months, from June to December 31, 1995. In a letter dated June 2, 1995, Mrs. Angelina Quiatchon, principal of the high school
department, told Villas that her request for study leave was granted for one school year subject to the following conditions:
1. The requested study leave takes effect on June 5, 1995 and ends on March 31, 1996;
2. The requested study leave involves no remuneration on the part of the School;
3. The documents that justify the requested study leave should be submitted upon return on April 1, 1996;
4. Faculty Manual – Section 40 Special Provisions on the Granting of Leave of Absence should be observed:
a. Once proven beyond reasonable doubt during the period of the approved leave of absence that the faculty member shall engage himself in
employment outside the institution, the administration shall regard the faculty member on leave as resigned;
b. The maximum length of leave of absence that may be applied for by the faculty member and granted by administration is twelve (12) months. If, at
the lapse of the period, the faculty member fails to return for work, the administration shall regard the faculty member as resigned.
RESPONDENT ALLEGED: that she intended to utilize the first semester of her study leave to finish her masteral degree at the Philippine Women’s
University (PWU). Unfortunately, it did not push through so she took up an Old Testament course in a school of religion and at the same time
utilized her free hours selling insurance and cookware to augment her family’s income. However, during the second semester of her study leave, she
studied and passed 12 units of education subjects at the Golden Gate Colleges in Batangas City. In response to the letters sent her by petitioner to
justify her study leave, she submitted a certification from Golden Gate Colleges and a letter explaining why she took up an Old Testament course
instead of enrolling in her masteral class during the first semester.
President and Rector of the School, Fr. Ramonclaro G. Mendez, O. P., wrote her, stating that her failure to enroll during the first semester was a
violation of the conditions of the study leave and that the reasons she advanced for failure to enroll during the first semester were not acceptable and
thus:
In the first place, prudence dictates that you should have ascertained first that you are still eligible to study at PWU to finish your masteral degree
before applying and securing the approval of your leave by the School. In the second place, you should have informed the School at once that you
could not enroll in the first semester so that your leave could have been adjusted for only one-half (1/2) year. Thirdly, your engaging in some part-
time business instead of studying in the first semester of your leave is sufficient justification for the School to consider you as resigned under the
Faculty Manual. And lastly, your failure to study in the first semester of your study leave without informing the School beforehand constitutes
deception, to say the least, which is not a good example to the other teachers.
Voluntary Arbitrator Mayuga who found that respondent was illegally dismissed. MR denied. CA affirmed, Hence, this petition.
ISSUE: whether or not respondent’s alleged violation of the conditions of the study grant constituted serious misconduct which justified her
termination from petitioner School.
HELD: NO
Under the Labor Code, there are twin requirements to justify a valid dismissal from employment: (a) the dismissal must be for any of the causes
provided in Article 282 of the Labor Code (substantive aspect) and (b) the employee must be given an opportunity to be heard and to defend himself
(procedural aspect).7 The procedural aspect requires that the employee be given two written notices before she is terminated consisting of a notice
which apprises the employee of the particular acts/omissions for which the dismissal is sought and the subsequent notice which informs the employee
of the employer’s decision to dismiss him.
In the case at bar, the requirements for both substantive and procedural aspects were not satisfied.
petitioner School argues that the conduct of respondent breached not only the provisions of the study grant (which was a contractual obligation) but
also the Faculty Manual. Respondent was thus guilty of serious misconduct which was a ground for termination.
Misconduct is improper or wrongful conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of
duty, willful in character, and implies wrongful intent and not mere error of judgment.9 Under Article 282 of the Labor Code, the misconduct, to be a
just cause for termination, must be serious. This implies that it must be of such grave and aggravated character and not merely trivial or unimportant.
The alleged infractions of the respondent could hardly be considered serious misconduct:
1. Her alleged failure to report for work EXACTLY on April 1, 1996 (respondent reported on May 15, 1996) is not equivalent to “failure to return for
work,” a sanctionable offense under the Faculty Manual. Although we give credence to petitioner’s argument that a private high school teacher still
has work at the end of the schoolyear – to assist in the graduation preparations – and in the beginning of the school year – to assist in the enrollment –
such tasks cannot be considered a teacher’s main duties, the failure to perform which would be tantamount to dereliction of duty or abandonment.
2. With regard to her alleged failure to enroll during the first semester, although we agree with the President and Rector, Fr. Mendez, that respondent
should have first ascertained whether she was still eligible to study at the PWU before applying for a study leave,17 such lapse was more of an error
in judgment rather than an act of serious misconduct. If respondent intended to use her study leave for other unauthorized purposes, as petitioner
would like us to believe, she would not have enrolled at the Golden Gate Colleges during the second semester. Yet she did, as borne out by the
certification18 prepared by the Registrar of Golden Gate Colleges.
3. Respondent did not violate the prohibition on engaging in employment outside the school as specified in her study leave grant and as provided in
the Faculty Manual. Section 40 (a) of the Manual. The prohibition against outside employment was enacted to prevent the teacher from using the
study leave period for unsanctioned purposes since the School pays the teacher while pursuing further studies. That rationale was not violated by
respondent for the reason that her part-time activity of selling insurance and cookware could not have prevented her in any way from studying and,
more importantly, she was not being paid by the School while on leave. How did the school expect her and her family to survive without any income
for one whole year?
Petitioner also failed to comply with the procedural requirements for a valid dismissal. Petitioner failed to give respondent the first notice which
should have informed the latter of the former’s intention to dismiss her. Petitioner argues that it complied with this requirement as there were several
exchanges of communication between the School and respondent regarding the cause of her termination. However, we find that these letters did not
apprise respondent that her dismissal was being sought by petitioner School as said letters only required respondent to submit proof of enrollment.
PETITION DENIED.
NOTES:
 Examples of serious misconduct justifying termination, as held in some of our decisions, include: sexual harassment (the manager’s act of fondling
the hands, massaging the shoulder and caressing the nape of a secretary);11 fighting within company premises;12 uttering obscene, insulting or
offensive words against a superior;13 misrepresenting that a student is his nephew and pressuring and intimidating a co-teacher to change that
student’s failing grade to passing.
 respondent is not entitled to the six-month study leave and vacation pay, the same was expressly waived by complainant when she signed conforme
to the letter dated June 2, 1995 approving her study leave which states among others, to wit: ‘2. The requested study leave involves no remuneration
on the part of the school

G.R. No. 190436 : January 16, 2012

NORMAN YABUT, Petitioner, v. MANILA ELECTRIC COMPANY AND MANUEL M. LOPEZ, Respondents. REYES,J.:
FACTS:
This case stems from a complaint for illegal dismissal and monetary claims filed by herein petitioner Norman Yabut (Yabut) against respondents
Manila Electric Company (Meralco) and Meralco officer Manuel M. Lopez (Lopez).
The petitioner had worked with Meralco from February 1989 until his dismissal from employment on February 5, 2004. Meralco's Inspection Office
issued a memorandum informing it of an illegal service connection at the petitioner's residence. Given this report, Meralco's Head of Investigation-
Litigation Office issued to the petitioner a notice of investigation.
Meralcos Litigation Investigation Office summarized the results of Meralco's findings in a memorandum which indicated that Yabuts electric service
was disconnected for account delinquency. Notwithstanding the disconnection and the fact that Meralcos service had not been reconnected, Yabut's
meter registered electric consumption. In view of these findings, respondent Meralco, issued a notice of dismissaladdressed to the petitioner. The
notice cites violation of Section 7, paragraph 3 of Meralco's Company Code on Employee Discipline and Article 282 (a), (c), (d) and (e) of the Labor
Code of the Philippines as bases for the dismissal
Aggrieved by the decision of the management, Yabut filed with the National Labor Relations Commission (NLRC) a complaintfor illegal dismissal
and money claims against Meralco and Lopez.
Labor Arbiter Antonio R. Macam rendered his Decision,declaring the petitioner illegally dismissed from the service and hence, entitled to
reinstatement plus backwages and attorney's fees.
NLRC rendered its Resolutiondismissing the herein respondents' appeal for lack of merit.
CA rendered the now assailed Decisionreversing the rulings of the NLRC. In finding the petitioner's dismissal lawful, the appellate court attributed
unto Yabut authorship of the meter tampering and illegal use of electricity acts which it regarded as serious misconduct.
ISSUE: Whether or not petitioners dismissal is illegal?
HELD: Court of Appeals decision is sustained.
LABOR LAW: Article 279 of the Labor Code of the Philippines provides that (i)n cases of regular employment, the employer shall not terminate the
services of an employee except for a just cause or when authorized by this Title. x x x The just causes are enumerated in Article 282, which provides:
Article 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.
Significantly, tampering with electric meters or metering installations of the Company or the installation of any device, with the purpose of
defrauding the Company is classified as an act of dishonesty from Meralco employees, expressly prohibited under company rules. It is reasonable
that its commission is classified as a severe act of dishonesty, punishable by dismissal even on its first commission, given the nature and gravity of
the offense and the fact that it is a grave wrong directed against their employer.
Article 282 (a) provides that an employer may terminate an employment because of an employee's serious misconduct, a cause that was present in
this case in view of the petitioner's violation of his employer's code of conduct. Misconduct is defined as the transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. For
serious misconduct to justify dismissal, the following requisites must be present:
(a) it must be serious;
(b) it must relate to the performance of the employee's duties; and
(c) it must show that the employee has become unfit to continue working for the employer.
The dismissal is also justified as the act imputed upon the petitioner qualifies as fraud or willful breach by the employee of the trust reposed in him
by his employer or duly authorized representative under Article 282 (c) of the Labor Code. While the petitioner contests this ground by denying that
his position is one of trust and confidence, it is undisputed that at the time of his dismissal, he was holding a supervisory position after he rose from
the ranks since commencement of his employment with Meralco. As a supervisor with duty and power that included testing of service meters and
investigation of violations of contract of customers, his position can be treated as one of trust and confidence, requiring a high degree of honesty as
compared with ordinary rank-and-file employees.
We emphasize that dismissal of a dishonest employee is to the best interest not only of the management but also of labor. As a measure of self-
protection against acts inimical to its interest, a company has the right to dismiss its erring employees. An employer cannot be compelled to continue
employing an employee guilty of acts inimical to the employer's interest, justifying loss of confidence in him.
DENIED

St. Jude Catholic School, et.l. vs. Ma. Bernadette S. Salgarino, G.R. No. 164376, July 31, 2006.
Bernadette was a Math teacher in a prominent Catholic school. She was tasked to teach Algebra, Trigonometry, Statistics and Analytical Geometry
for third and fourth year high school students. On February 15, 1999, or two weeks before the fourth periodical test, she went on maternity leave and
was expected to be back on March 19, 1999.
During her official leave, Bernadette conducted make-up tests in her house in order to improve the grades of some of her students. However, this was
done without the prior permission of petitioners. At this same period, her co-teachers, Ms. Capistrano, Ms. Rivera and Ms. Bongyad substituted for
her in her classes. On 2 March 1999, the periodical test for Mathematics IV was conducted and the same was administered by Capistrano, since
Bernadette was still on leave.
When Head Teacher Ms. Lopez instructed the substitute teachers to check the test papers and compute the grades of the students in Sections 4-A, 4-B
and 4-C, some 4th year students obtained a failing grade in Math.
Subsequently, Bernadette, while still on leave, requested Capistrano to deliver to her house the white sheets which contained the grades in Math of
her students. Capistrano delivered the white sheets to Bernadette’s home through a student named Eunice. Upon receiving them, Bernadette encircled
the failing grades under the column of Daily Work (DW) and placed a passing grade beside each encircled grade. Bernadette asserted that as the
handling teacher, she had the prerogative to pass her students. She revealed that she required her students to do some projects and conducted make-up
tests for them before she went on maternity leave and to improve the final grades of the concerned students. She avers that out of valid and
humanitarian reasons, she indicated a passing grade of 75% beside the grades of those with failing grades.
Upon return of the white sheets, the substitute teachers noticed therein the additions made by Bernadette. The substitute teachers immediately
reported the matter to Lopez who, in turn, referred the matter to the Acting Director/Principal of the school. An investigation panel was formed and
was tasked to conduct an investigation. The investigating panel reached the conclusion that Bernadette altered her students’ grades while she was on
leave, which is, according to them, a case of education malpractice or grave misconduct and grossly prejudicial to the good name of the school. In
particular, the investigating committee found Bernadette to have violated Article XV, Section 79 and Article XVII, Section 94, paragraph (b) of the
Manual of Regulations for Private Schools. Bernadette was terminated on the basis of these findings.
A case for illegal dismissal was filed before the Labor Arbiter. The Arbiter ruled that, as a teacher, Bernadette has the academic freedom to pass or
fail any or all students per his or her discretion. The Supreme Court, however, disagreed with the Labor Arbiter and clarified that “academic
freedom” of faculty members refers to the freedom of teachers from control of thought or utterance of his academic research, findings or conclusions,
and has nothing to do with the discretion of teachers to pass or fail any or all her students according to his discretion.
The school contended that Bernadette’s dismissal was for a just cause since she committed grave misconduct and the tampering of the grades of her
students has resulted in the loss of the school’s trust and confidence in her.
On the issue of grave misconduct, the Court ruled that:
To our mind, the acts of the respondent (Bernadette) in increasing the marks and indicating passing grades on the white sheets of her students while
she was on maternity leave; of not having sought permission from petitioners (the school and the substitute teachers) before conducting the make-up
tests in her house, contrary to the policy of the petitioners that permission should first be granted before conducting make-up tests that must be
conducted in the school premises; of making the increases in the grades of the students during her maternity leave which is not allowed since the
substitute teachers were the ones authorized to compute and give the grades for the concerned students; and of invoking humanitarian consideration
in doing so which is not a basis in the Manual of Regulations for Private Schools for grading a student, are all acts of transgression of school rules,
regulations and policies.
Truly, then, respondent had committed a misconduct. However, such misconduct is not serious enough to warrant her dismissal from employment
under paragraph (a) of Article 282 of the Labor Code.
Misconduct is defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character and implies wrongful intent and not mere error of judgment. The misconduct to be serious within the meaning
of the act must be of such a grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must
nevertheless be in connection with the work of the employee to constitute just cause from his separation.
In order to constitute serious misconduct which will warrant the dismissal of an employee under paragraph (a) of Article 282 of the Labor Code, it is
not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or
conduct must have been performed with wrongful intent.
There is no evidence to show that there was ulterior motive on the part of the respondent when she decided to pass her students. Also, it was not
shown that respondent received immoral consideration when she did the same. From the Labor Arbiter up to this Court, respondent has maintained
her stand that her decision to pass the concerned students was done out of humanitarian consideration.
On the issue of loss of trust and confidence which was raised by the school, the Court ruled that loss of confidence as a ground for validly dismissing
an employee under Article 282 of Labor Code applies only to employees occupying positions of trust and confidence or those routinely charged with
the care and custody of the employer’s money or property. In the instant case, it is clear that respondent is neither a managerial employee or one
vested with the powers or prerogatives to lay down management prerogatives. Nor one belonging to the class of cashiers, auditors, property
custodians, or those, who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property.
The Court ruled that Bernadette was illegally dismissed.

Legend Hotel (Manila) vs Realuyo AKA Roa

G.R. No. 153511 July 18, 2012 
Facts: Respondent averred that he had worked as a pianist at the Legend Hotel’s Tanglaw Restaurant from September 1992 with an initial rate of
P400.00/night that was given to him after each night’s performance; that his rate had increased to P750.00/night; and that during his employment, he
could not choose the time of performance, which had been fixed from 7:00 pm to 10:00 pm for three to six times/week. He added that the Legend
Hotel’s restaurant manager had required him to conform with the venue’s motif; that he had been subjected to the rules on employees’ representation
checks and chits, a privilege granted to other employees; that on July 9, 1999, the management had notified him that as a cost-cutting measure his
services as a pianist would no longer be required effective July 30, 1999; that he disputed the excuse, insisting that Legend Hotel had been lucratively
operating as of the filing of his complaint; and that the loss of his employment made him bring his complaint.
Issues: 1. Whether or not petition for certiorari to the CA is proper.
2. Whether or not there is ER-EE relationship.
3. Whether or not retrenchment as a ground for respondent’s dismissal is valid.
Held: YES. There is no longer any doubt that a petition for certiorari brought to assail the decision of the NLRC may raise factual issues, and the CA
may then review the decision of the NLRC and pass upon such factual issues in the process.8 The power of the CA to review factual issues in the
exercise of its original jurisdiction to issue writs of certiorari is based on Section 9 of Batas Pambansa Blg. 129, which pertinently provides that the
CA “shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised
in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings.”
YES. Petitioner actually wielded the power of selection at the time it entered into the service contract dated September 1, 1992 with respondent. This
is true, notwithstanding petitioner’s insistence that respondent had only offered his services to provide live music at petitioner’s Tanglaw Restaurant,
and despite petitioner’s position that what had really transpired was a negotiation of his rate and time of availability. The power of selection was
firmly evidenced by, among others, the express written recommendation dated January 12, 1998 by Christine Velazco, petitioner’s restaurant
manager, for the increase of his remuneration.
Respondent’s remuneration, albeit denominated as talent fees, was still considered as included in the term wage in the sense and context of the Labor
Code, regardless of how petitioner chose to designate the remuneration. Anent this, Article 97(f) of the Labor Code clearly states: 
xxx wage paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money,
whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to
an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered, and
includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the
employer to the employee. 

That respondent worked for less than eight hours/day was of no consequence and did not detract from the CA’s finding on the existence of the
employer-employee relationship. In providing that the “normal hours of work of any employee shall not exceed eight (8) hours a day,” Article 83 of
the Labor Code only set a maximum of number of hours as “normal hours of work” but did not prohibit work of less than eight hours.
The power of the employer to control the work of the employee is considered the most significant determinant of the existence of an employer-
employee relationship. This is the so-called control test, and is premised on whether the person for whom the services are performed reserves the
right to control both the end achieved and the manner and means used to achieve that end.
A review of the records shows, however, that respondent performed his work as a pianist under petitioner’s supervision and control. Specifically,
petitioner’s control of both the end achieved and the manner and means used to achieve that end was demonstrated by the following, to wit: a. He
could not choose the time of his performance, which petitioners had fixed from 7:00 pm to 10:00 pm, three to six times a week; b. He could not
choose the place of his performance; c. The restaurant’s manager required him at certain times to perform only Tagalog songs or music, or to wear
barong Tagalog to conform to the Filipiniana motif; and d. He was subjected to the rules on employees’ representation check and chits, a privilege
granted to other employees. Relevantly, it is worth remembering that the employer need not actually supervise the performance of duties by the
employee, for it sufficed that the employer has the right to wield that power.
NO. Retrenchment is one of the authorized causes for the dismissal of employees recognized by the Labor Code. It is a management prerogative
resorted to by employers to avoid or to minimize business losses. On this matter, Article 283 of the Labor Code.
The Court has laid down the following standards that an employer should meet to justify retrenchment and to foil abuse, namely: (a) The expected
losses should be substantial and not merely de minimis in extent; (b) The substantial losses apprehended must be reasonably imminent; (c) The
retrenchment must be reasonably necessary and likely to effectively prevent the expected losses; and (d) The alleged losses, if already incurred, and
the expected imminent losses sought to be forestalled must be proved by sufficient and convincing evidence.
Anent the last standard of sufficient and convincing evidence, it ought to be pointed out that a less exacting standard of proof would render too easy
the abuse of retrenchment as a ground for termination of services of employees.
In termination cases, the burden of proving that the dismissal was for a valid or authorized cause rests upon the employer. Here, petitioner did not
submit evidence of the losses to its business operations and the economic havoc it would thereby imminently sustain. It only claimed that
respondent’s termination was due to its “present business/financial condition.” This bare statement fell short of the norm to show a valid
retrenchment. Hence, we hold that there was no valid cause for the retrenchment of respondent.