Title

Leus vs. St. Scholastica's College Westgrove

Case Decision Date

G.R. No. 187226 Jan 28, 2015

A non-teaching personnel at a Catholic educational institution is wrongfully dismissed

for getting pregt out of wedlock, leading to a legal battle over whether her conduct
constitutes a valid ground for termination.

752 PHIL. 186

THIRD DIVISION

[ G.R. No. 187226, January 28, 2015 ]

CHERYLL SANTOS LEUS, PETITIONER, VS. ST. SCHOLASTICAaS COLLEGE WESTGROVE

AND/OR SR. EDNA QUIAMBAO, OSB, RESPONDENTS.

DECISION

REYES, J.:

Cheryll Santos Leus (petitioner) was hired by St. Scholasticaas College Westgrove (SSCW), a
Catholic educational institution, as a non-teaching personnel, engaged in pre-marital
sexual relations, got pregnant out of wedlock, married the father of her child, and was
dismissed by SSCW, in that order. The question that has to be resolved is whether the
petitioneras conduct constitutes a ground for her dismissal.

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to annul and set aside the Decision[1] dated September 24, 2008 and Resolution[2]
dated March 2, 2009 issued by the Court of Appeals (CA) in CA-G.R. SP No. 100188, which
a!rmed the Resolutions dated February 28, 2007[3] and May 21, 2007[4] of the National
Labor Relations Commission (NLRC) in NLRC CA No. 049222-06.
 The Facts

SSCW is a catholic and sectarian educational institution in Silang, Cavite. In May 2001,
SSCW hired the petitioner as an Assistant to SSCWas Director of the Lay Apostolate and
Community Outreach Directorate.

Sometime in 2003, the petitioner and her boyfriend conceived a child out of wedlock.
When SSCW learned of the petitioneras pregnancy, Sr. Edna Quiambao (Sr. Quiambao),
SSCWas Directress, advised her to "le a resignation letter e#ective 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 bene"t of marriage.[5]

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.[6]

In a letter[7] dated May 31, 2003, the petitioner explained that her pregnancy out of wedlock
does not amount to serious misconduct or conduct unbecoming of an employee. She
averred that she is unaware of any school policy stating that being pregnant out of wedlock
is considered as a serious misconduct and, thus, a ground for dismissal. Further, the
petitioner requested a copy of SSCWas policy and guidelines so that she may better respond
to the charge against her.

On June 2, 2003, Sr. Quiambao informed the petitioner that, pending the promulgation of a
aSupport Sta# Handbook,a SSCW follows the 1992 Manual of Regulations for Private
Schools (1992 MRPS) on the causes for termination of employments; that Section 94(e) of
the 1992 MRPS cites adisgraceful or immoral conducta as a ground for dismissal in addition
to the just causes for termination of employment provided under Article 282 of the Labor
Code.[8]

On June 4, 2003, the petitioner, through counsel, sent Sr. Quiambao a letter,[9] which, in
part, reads:

To us, pre-marital sex between two consenting adults without legal impediment to marry
each other who later on married each other does not fall within the contemplation of
adisgraceful or immoral conducta and aserious misconducta of the Manual of Regulations
for Private Schools and the Labor Code of the Philippines.

Your argument that what happened to our client would set a bad example to the students
and other employees of your school is speculative and is more imaginary than real. To
dismiss her on that sole ground constitutes grave abuse of management prerogatives.

Considering her untarnished service for two years, dismissing her with her present
condition would also mean depriving her to be more secure in terms of "nancial capacity
to sustain maternal needs.[10]
In a letter[11] dated June 6, 2003, SSCW, through counsel, maintained that pre-marital
sexual relations, even if between two consenting adults without legal impediment to marry,
is considered a disgraceful and immoral conduct or a serious misconduct, which are
grounds for the termination of employment under the 1992 MRPS and the Labor Code. That
SSCW, as a Catholic institution of learning, has the right to uphold the teaching of the
Catholic Church and expect its employees to abide by the same. They further asserted that
the petitioneras indiscretion is further aggravated by the fact that she is the Assistant to the
Director of the Lay Apostolate and Community Outreach Directorate, a position of
responsibility that the students look up to as role model. The petitioner was again directed
to submit a written explanation on why she should not be dismissed.

On June 9, 2003, the petitioner informed Sr. Quiambao that she adopts her counselas letter
dated June 4, 2003 as her written explanation.[12]

Consequently, in her letter[13] dated June 11, 2003, Sr. Quiambao informed the petitioner
that her employment with SSCW is terminated on the ground of serious misconduct. She
stressed that pre-marital sexual relations between two consenting adults with no
impediment to marry, even if they subsequently married, amounts to immoral conduct.
She further pointed out that SSCW "nds unacceptable the scandal brought about by the
petitioneras pregnancy out of wedlock as it ran counter to the moral principles that SSCW
stands for and teaches its students.

Thereupon, the petitioner "led a complaint for illegal dismissal with the Regional
Arbitration Branch of the NLRC in Quezon City against SSCW and Sr. Quiambao
(respondents). In her position paper,[14] the petitioner claimed that SSCW gravely abused its
management prerogative as there was no just cause for her dismissal. She maintained that
her pregnancy out of wedlock cannot be considered as serious misconduct since the same
is a purely private a#air and not connected in any way with her duties as an employee of
SSCW. Further, the petitioner averred that she and her boyfriend eventually got married
even prior to her dismissal.

For their part, SSCW claimed that there was just cause to terminate the petitioneras
employment with SSCW and that the same is a valid exercise of SSCWas management
prerogative. They maintained that engaging in pre-marital sex, and getting pregnant as a
result thereof, amounts to a disgraceful or immoral conduct, which is a ground for the
dismissal of an employee under the 1992 MRPS.

They pointed out that SSCW is a Catholic educational institution, which caters exclusively
to young girls; that SSCW would lose its credibility if it would maintain employees who do
not live up to the values and teachings it inculcates to its students. SSCW further asserted
that the petitioner, being an employee of a Catholic educational institution, should have
strived to maintain the honor, dignity and reputation of SSCW as a Catholic school.[15]

The Ruling of the Labor Arbiter

On February 28, 2006, the Labor Arbiter (LA) rendered a Decision,[16] in NLRC Case No. 6-
17657-03-C which dismissed the complaint "led by the petitioner. The LA found that there
was a valid ground for the petitioneras dismissal; that her pregnancy out of wedlock is
considered as a adisgraceful and immoral conduct.a The LA pointed out that, as an
employee of a Catholic educational institution, the petitioner is expected to live up to the
Catholic values taught by SSCW to its students. Likewise, the LA opined that:

Further, a deep analysis of the facts would lead us to disagree with the complainant that
she was dismissed simply because she violate[d] a Catholic [teaching]. It should not be
taken in isolation but rather it should be analyzed in the light of the surrounding
circumstances as a whole. We must also take into [consideration] the nature of her work
and the nature of her employer-school. For us, it is not just an ordinary violation. It was
committed by the complainant in an environment where her strict adherence to the same
is called for and where the reputation of the school is at stake. x x x.[17]
The LA further held that teachers and school employees, both in their o!cial and personal
conduct, must display exemplary behavior and act in a manner that is beyond reproach.

The petitioner appealed to the NLRC, insisting that there was no valid ground for the
termination of her employment. She maintained that her pregnancy out of wedlock cannot
be considered as aserious misconducta under Article 282 of the Labor Code since the same
was not of such a grave and aggravated character. She asserted that SSCW did not present
any evidence to establish that her pregnancy out of wedlock indeed eroded the moral
principles that it teaches its students.[18]

The Ruling of the NLRC

On February 28, 2007, the NLRC issued a Resolution,[19] which a!rmed the LA Decision
dated February 28, 2006. The NLRC pointed out that the termination of the employment of
the personnel of private schools is governed by the 1992 MRPS; that Section 94(e) thereof
cites adisgraceful or immoral conducta as a just cause for dismissal, in addition to the
grounds for termination of employment provided for under Article 282 of the Labor Code.
The NLRC held that the petitioneras pregnancy out of wedlock is a adisgraceful or immoral
conducta within the contemplation of Section 94(e) of the 1992 MRPS and, thus, SSCW had
a valid reason to terminate her employment.

The petitioner sought reconsideration[20] of the Resolution dated February 28, 2007 but it
was denied by the NLRC in its Resolution[21] dated May 21, 2007.

Unperturbed, the petitioner "led a petition[22] for certiorari with the CA, alleging that the
NLRC gravely abused its discretion in ruling that there was a valid ground for her
dismissal. She maintained that pregnancy out of wedlock cannot be considered as a
disgraceful or immoral conduct; that SSCW failed to prove that its students were indeed
gravely scandalized by her pregnancy out of wedlock. She likewise asserted that the NLRC
erred in applying Section 94(e) of the 1992 MRPS.

The Ruling of the CA

On September 24, 2008, the CA rendered the herein assailed Decision,[23] which denied the
petition for certiorari "led by the petitioner. The CA held that it is the provisions of the 1992
MRPS and not the Labor Code which governs the termination of employment of teaching
and non-teaching personnel of private schools, explaining that:

It is a principle of statutory construction that where there are two statutes that apply to a
particular case, that which was specially intended for the said case must prevail. Petitioner
was employed by respondent private Catholic institution which undeniably follows the
precepts or norms of conduct set forth by the Catholic Church. Accordingly, the Manual of
Regulations for Private Schools followed by it must prevail over the Labor Code, a general
statute. The Manual constitutes the private schoolsa Implementing Rules and Regulations
of Batas Pambansa Blg. 232 or the Education Act of 1982. x x x.[24]
The CA further held that the petitioneras dismissal was a valid exercise of SSCWas
management prerogative to discipline and impose penalties on erring employees pursuant
to its policies, rules and regulations. The CA upheld the NLRCas conclusion that the
petitioneras pregnancy out of wedlock is considered as a adisgraceful and immoral
conducta and, thus, a ground for dismissal under Section 94(e) of the 1992 MRPS. The CA
likewise opined that the petitioneras pregnancy out of wedlock is scandalous per se given
the work environment and social milieu that she was in, viz:

Under Section 94 (e) of the [MRPS], and even under Article 282 (serious misconduct) of the
Labor Code, adisgraceful and immoral conducta is a basis for termination of employment.

...

Petitioner contends that her pre-marital sexual relations with her boyfriend and her
pregnancy prior to marriage was not disgraceful or immoral conduct su!cient for her
dismissal because she was not a member of the schoolas faculty and there is no evidence
that her pregnancy scandalized the school community.

We are not persuaded. Petitioneras pregnancy prior to marriage is scandalous in itself

given the work environment and social milieu she was in. Respondent school for young
ladies precisely seeks to prevent its students from situations like this, inculcating in them
strict moral values and standards. Being part of the institution, petitioneras private and
public life could not be separated. Her admitted pre-marital sexual relations was a violation
of private respondentas prescribed standards of conduct that views pre-marital sex as
immoral because sex between a man and a woman must only take place within the bounds
of marriage.

Finally, petitioneras dismissal is a valid exercise of the employer-schoolas management

prerogative to discipline and impose penalties on erring employees pursuant to its policies,
rules and regulations. x x x.[25] (Citations omitted)
The petitioner moved for reconsideration[26] but it was denied by the CA in its
Resolution[27] dated March 2, 2009.

Hence, the instant petition.

Issues

Essentially, the issues set forth by the petitioner for this Courtas decision are the following:
"rst, whether the CA committed reversible error in ruling that it is the 1992 MRPS and not
the Labor Code that governs the termination of employment of teaching and non-teaching
personnel of private schools; and second, whether the petitioneras pregnancy out of
wedlock constitutes a valid ground to terminate her employment.

The Ruling of the Court

The Court grants the petition.

First Issue: Applicability of the 1992 MRPS

The petitioner contends that the CA, in ruling that there was a valid ground to dismiss her,
erred in applying Section 94 of the 1992 MRPS. Essentially, she claims that the 1992 MRPS
was issued by the Secretary of Education as the revised implementing rules and
regulations of Batas Pambansa Bilang 232 (BP 232) or the aEducation Act of 1982.a That
there is no provision in BP 232, which provides for the grounds for the termination of
employment of teaching and non-teaching personnel of private schools. Thus, Section 94
of the 1992 MRPS, which provides for the causes of terminating an employment, is invalid
as it awidened the scope and coveragea of BP 232.

The Court does not agree.

The Court notes that the argument against the validity of the 1992 MRPS, speci"cally
Section 94 thereof, is raised by the petitioner for the "rst time in the instant petition for
review. Nowhere in the proceedings before the LA, the NLRC or the CA did the petitioner
assail the validity of the provisions of the 1992 MRPS.

aIt is well established that issues raised for the "rst time on appeal and not raised in the
proceedings in the lower court are barred by estoppel. Points of law, theories, issues, and
arguments not brought to the attention of the trial court ought not to be considered by a
reviewing court, as these cannot be raised for the "rst time on appeal. To consider the
alleged facts and arguments belatedly raised would amount to trampling on the basic
principles of fair play, justice, and due process.a[28]

In any case, even if the Court were to disregard the petitioneras belated claim of the
invalidity of the 1992 MRPS, the Court still "nds the same untenable.

The 1992 MRPS, the regulation in force at the time of the instant controversy, was issued by
the Secretary of Education pursuant to BP 232. Section 70[29] of BP 232 vests the Secretary
of Education with the authority to issue rules and regulations to implement the provisions
of BP 232. Concomitantly, Section 57[30] speci"cally empowers the Department of
Education to promulgate rules and regulations necessary for the administration,
supervision and regulation of the educational system in accordance with the declared
policy of BP 232.

The quali"cations of teaching and non-teaching personnel of private schools, as well as the
causes for the termination of their employment, are an integral aspect of the educational
system of private schools. Indubitably, ensuring that the teaching and non-teaching
personnel of private schools are not only quali"ed, but competent and e!cient as well goes
hand in hand with the declared objective of BP 232 a establishing and maintaining relevant
quality education.[31] It is thus within the authority of the Secretary of Education to issue a
rule, which provides for the dismissal of teaching and non-teaching personnel of private
schools based on their incompetence, ine!ciency, or some other disquali"cation.

Moreover, Section 69 of BP 232 speci"cally authorizes the Secretary of Education to

aprescribe and impose such administrative sanction as he may deem reasonable and
appropriate in the implementing rules and regulationsa for the a[g]ross ine!ciency of the
teaching or non-teaching personnela of private schools.[32] Accordingly, contrary to the
petitioneras claim, the Court sees no reason to invalidate the provisions of the 1992 MRPS,
speci"cally Section 94 thereof.

Second Issue: Validity of the Petitioneras Dismissal

The validity of the petitioneras dismissal hinges on the determination of whether

pregnancy out of wedlock by an employee of a catholic educational institution is a cause for
the termination of her employment.

In resolving the foregoing question, the Court will assess the matter from a strictly neutral
and secular point of view a the relationship between SSCW as employer and the petitioner
as an employee, the causes provided for by law in the termination of such relationship, and
the evidence on record. The ground cited for the petitioneras dismissal, i.e., pre-marital
sexual relations and, consequently, pregnancy out of wedlock, will be assessed as to
whether the same constitutes a valid ground for dismissal pursuant to Section 94(e) of the
1992 MRPS.

The standard of review in a Rule 45

petition from the CA decision in labor
cases.

In a petition for review under Rule 45 of the Rules of Court, such as the instant petition,
where the CAas disposition in a labor case is sought to be calibrated, the Courtas review is
quite limited. In ruling for legal correctness, the Court has to view the CA decision in the
same context that the petition for certiorari it ruled upon was presented to it; the Court has
to examine the CA decision from the prism of whether it correctly determined the presence
or absence of grave abuse of discretion in the NLRC decision before it, not on the basis of
whether the NLRC decision on the merits of the case was correct.[33]

The phrase agrave abuse of discretiona is well-de"ned in the Courtas jurisprudence. It

exists where an act of a court or tribunal is performed with a capricious or whimsical
exercise of judgment equivalent to lack of jurisdiction.[34] The determination of the
presence or absence of grave abuse of discretion does not include an inquiry into the
correctness of the evaluation of evidence, which was the basis of the labor agency in
reaching its conclusion.[35]

Nevertheless, while a certiorari proceeding does not strictly include an inquiry as to the
correctness of the evaluation of evidence (that was the basis of the labor tribunals in
determining their conclusion), the incorrectness of its evidentiary evaluation should not
result in negating the requirement of substantial evidence. Indeed, when there is a
showing that the "ndings or conclusions, drawn from the same pieces of evidence, were
arrived at arbitrarily or in disregard of the evidence on record, they may be reviewed by the
courts. In particular, the CA can grant the petition for certiorari if it "nds that the NLRC, in
its assailed decision or resolution, made a factual "nding not supported by substantial
evidence. A decision that is not supported by substantial evidence is de"nitely a decision
tainted with grave abuse of discretion.[36]

The labor tribunalsa respective

conclusions that the petitioneras pregnancy
is a adisgraceful or immoral conducta
were arrived at arbitrarily.

The CA and the labor tribunals a!rmed the validity of the petitioneras dismissal pursuant
to Section 94(e) of the 1992 MRPS, which provides that:

Sec. 94. Causes of Terminating Employment a In addition to the just causes enumerated in
the Labor Code, the employment of school personnel, including faculty, may be terminated
for any of the following causes:
...

e. Disgraceful or immoral conduct;

...
The labor tribunals concluded that the petitioneras pregnancy out of wedlock, per se, is
adisgraceful and immorala considering that she is employed in a Catholic educational
institution. In arriving at such conclusion, the labor tribunals merely assessed the fact of
the petitioneras pregnancy vis-A -vis the totality of the circumstances surrounding the
same.
However, the Court "nds no substantial evidence to support the aforementioned
conclusion arrived at by the labor tribunals. The fact of the petitioneras pregnancy out of
wedlock, without more, is not enough to characterize the petitioneras conduct as
disgraceful or immoral. There must be substantial evidence to establish that pre-marital
sexual relations and, consequently, pregnancy out of wedlock, are indeed considered
disgraceful or immoral.

The totality of the circumstances

surrounding the conduct alleged to be
disgraceful or immoral must be assessed
against the prevailing norms of conduct.

In Chua-Qua v. Clave,[37] the Court stressed that to constitute immorality, the

circumstances of each particular case must be holistically considered and evaluated in
light of the prevailing norms of conduct and applicable laws.[38] Otherwise stated, it is not
the totality of the circumstances surrounding the conduct per se that determines whether
the same is disgraceful or immoral, but the conduct that is generally accepted by society as
respectable or moral. If the conduct does not conform to what society generally views as
respectable or moral, then the conduct is considered as disgraceful or immoral. Tersely
put, substantial evidence must be presented, which would establish that a particular
conduct, viewed in light of the prevailing norms of conduct, is considered disgraceful or
immoral.

Thus, the determination of whether a conduct is disgraceful or immoral involves a two-step

process: "rst, a consideration of the totality of the circumstances surrounding the conduct;
and second, an assessment of the said circumstances vis-A -vis the prevailing norms of
conduct, i.e., what the society generally considers moral and respectable.

That the petitioner was employed by a Catholic educational institution per se does not
absolutely determine whether her pregnancy out of wedlock is disgraceful or immoral.
There is still a necessity to determine whether the petitioneras pregnancy out of wedlock is
considered disgraceful or immoral in accordance with the prevailing norms of conduct.

Public and secular morality should

determine the prevailing norms of conduct,
not religious morality.

However, determining what the prevailing norms of conduct are considered disgraceful or
immoral is not an easy task. An individualas perception of what is moral or respectable is a
con$uence of a myriad of in$uences, such as religion, family, social status, and a
cacophony of others. In this regard, the Courtas ratiocination in Estrada v. Escritor[39] is
instructive.

In Estrada, an administrative case against a court interpreter charged with disgraceful and
immoral conduct, the Court stressed that in determining whether a particular conduct can
be considered as disgraceful and immoral, the distinction between public and secular
morality on the one hand, and religious morality, on the other, should be kept in mind.[40]
That the distinction between public and secular morality and religious morality is
important because the jurisdiction of the Court extends only to public and secular morality.
[41]
The Court further explained that:

The morality referred to in the law is public and necessarily secular, not religious x x x.
aReligious teachings as expressed in public debate may in$uence the civil public order but
public moral disputes may be resolved only on grounds articulable in secular terms.a
Otherwise, if government relies upon religious beliefs in formulating public policies and
morals, the resulting policies and morals would require conformity to what some might
regard as religious programs or agenda. The non-believers would therefore be compelled
to conform to a standard of conduct buttressed by a religious belief, i.e., to a acompelled
religion,a anathema to religious freedom. Likewise, if government based its actions upon
religious beliefs, it would tacitly approve or endorse that belief and thereby also tacitly
disapprove contrary religious or non-religious views that would not support the policy. As
a result, government will not provide full religious freedom for all its citizens, or even make
it appear that those whose beliefs are disapproved are second-class citizens. Expansive
religious freedom therefore requires that government be neutral in matters of religion;
governmental reliance upon religious justi"cation is inconsistent with this policy of
neutrality.

In other words, government action, including its proscription of immorality as expressed

in criminal law like concubinage, must have a secular purpose. That is, the government
proscribes this conduct because it is adetrimental (or dangerous) to those conditions upon
which depend the existence and progress of human societya and not because the conduct
is proscribed by the beliefs of one religion or the other. Although admittedly, moral
judgments based on religion might have a compelling in$uence on those engaged in public
deliberations over what actions would be considered a moral disapprobation punishable by
law. After all, they might also be adherents of a religion and thus have religious opinions
and moral codes with a compelling in$uence on them; the human mind endeavors to
regulate the temporal and spiritual institutions of society in a uniform manner,
harmonizing earth with heaven. Succinctly put, a law could be religious or Kantian or
Aquinian or utilitarian in its deepest roots, but it must have an articulable and discernible
secular purpose and justi"cation to pass scrutiny of the religion clauses. x x x.[42] (Citations
omitted and emphases ours)
Accordingly, when the law speaks of immoral or, necessarily, disgraceful conduct, it
pertains to public and secular morality; it refers to those conducts which are proscribed
because they are detrimental to conditions upon which depend the existence and progress
of human society. Thus, in Anonymous v. Radam,[43] an administrative case involving a
court utility worker likewise charged with disgraceful and immoral conduct, applying the
doctrines laid down in Estrada, the Court held that:

For a particular conduct to constitute adisgraceful and immorala behavior under civil
service laws, it must be regulated on account of the concerns of public and secular
morality. It cannot be judged based on personal bias, speci"cally those colored by
particular mores. Nor should it be grounded on aculturala values not convincingly
demonstrated to have been recognized in the realm of public policy expressed in the
Constitution and the laws. At the same time, the constitutionally guaranteed rights (such as
the right to privacy) should be observed to the extent that they protect behavior that may be
frowned upon by the majority.

Under these tests, two things may be concluded from the fact that an unmarried woman
gives birth out of wedlock:

(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 adisgraceful and immoral conducta consists of having
extramarital relations with a married person. The sanctity of marriage is constitutionally
recognized and likewise a!rmed 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 "delity.

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.[44]
(Citations omitted and emphases ours)

Both Estrada and Radam are administrative cases against employees in the civil service.
The Court, however, sees no reason not to apply the doctrines enunciated in Estrada and
Radam in the instant case. Estrada and Radam also required the Court to delineate what
conducts are considered disgraceful and/or immoral as would constitute a ground for
dismissal. More importantly, as in the said administrative cases, the instant case involves
an employeeas security of tenure; this case likewise concerns employment, which is not
merely a specie of property right, but also the means by which the employee and those who
depend on him live.[45]

It bears stressing that the right of an employee to security of tenure is protected by the
Constitution. Perfunctorily, a regular employee may not be dismissed unless for cause
provided under the Labor Code and other relevant laws, in this case, the 1992 MRPS. As
stated above, when the law refers to morality, it necessarily pertains to public and secular
morality and not religious morality. Thus, the proscription against adisgraceful or immoral
conducta under Section 94(e) of the 1992 MRPS, which is made as a cause for dismissal,
must necessarily refer to public and secular morality. Accordingly, in order for a conduct to
be considered as disgraceful or immoral, it must be aadetrimental (or dangerous) to those
conditions upon which depend the existence and progress of human societya and not
because the conduct is proscribed by the beliefs of one religion or the other.a
Thus, in Santos v. NLRC,[46] the Court upheld the dismissal of a teacher who had an extra-
marital a#air with his co-teacher, who is likewise married, on the ground of disgraceful
and immoral conduct under Section 94(e) of the 1992 MRPS. The Court pointed out that
extra-marital a#air is considered as a disgraceful and immoral conduct is an afront to the
sanctity of marriage, which is a basic institution of society, viz:

We cannot overemphasize that having an extra-marital a#air is an afront to the sanctity of

marriage, which is a basic institution of society. Even our Family Code provides that
husband and wife must live together, observe mutual love, respect and "delity. This is
rooted in the fact that both our Constitution and our laws cherish the validity of marriage
and unity of the family. Our laws, in implementing this constitutional edict on marriage and
the family underscore their permanence, inviolability and solidarity.[47]

The petitioneras pregnancy out of

wedlock is not a disgraceful or immoral
conduct since she and the father of her
child have no impediment to marry each
other.

In stark contrast to Santos, the Court does not "nd any circumstance in this case which
would lead the Court to conclude that the petitioner committed a disgraceful or immoral
conduct. It bears stressing that the petitioner and her boyfriend, at the time they conceived
a child, had no legal impediment to marry. Indeed, even prior to her dismissal, the
petitioner married her boyfriend, the father of her child. As the Court held in Radam, there
is no law which penalizes an unmarried mother by reason of her sexual conduct or
proscribes the consensual sexual activity between two unmarried persons; that neither
does such situation contravene any fundamental state policy enshrined in the Constitution.

Admittedly, the petitioner is employed in an educational institution where the teachings

and doctrines of the Catholic Church, including that on pre-marital sexual relations, is
strictly upheld and taught to the students. That her indiscretion, which resulted in her
pregnancy out of wedlock, is anathema to the doctrines of the Catholic Church. However,
viewed against the prevailing norms of conduct, the petitioneras conduct cannot be
considered as disgraceful or immoral; such conduct is not denounced by public and
secular morality. It may be an unusual arrangement, but it certainly is not disgraceful or
immoral within the contemplation of the law.

To stress, pre-marital sexual relations between two consenting adults who have no
impediment to marry each other, and, consequently, conceiving a child out of wedlock,
gauged from a purely public and secular view of morality, does not amount to a disgraceful
or immoral conduct under Section 94(e) of the 1992 MRPS.

Accordingly, the labor tribunals erred in upholding the validity of the petitioneras
dismissal. The labor tribunals arbitrarily relied solely on the circumstances surrounding
the petitioneras pregnancy and its supposed e#ect on SSCW and its students without
evaluating whether the petitioneras conduct is indeed considered disgraceful or immoral
in view of the prevailing norms of conduct. In this regard, the labor tribunalsa respective
haphazard evaluation of the evidence amounts to grave abuse of discretion, which the
Court will rectify.

The labor tribunalsa "nding that the petitioneras pregnancy out of wedlock despite the
absence of substantial evidence is not only arbitrary, but a grave abuse of discretion, which
should have been set right by the CA.

There is no substantial evidence to

prove that the petitioneras pregnancy out of
wedlock caused grave scandal to SSCW
and its students.

SSCW claimed that the petitioner was primarily dismissed because her pregnancy out of
wedlock caused grave scandal to SSCW and its students. That the scandal brought about by
the petitioneras indiscretion prompted them to dismiss her. The LA upheld the
respondentsa claim, stating that:

In this particular case, an aobjectivea and arational evaluationa of the facts and
circumstances obtaining in this case would lead us to focus our attention x x x on the
impact of the act committed by the complainant. The act of the complainant x x x eroded
the moral principles being taught and project[ed] by the respondent [C]atholic school to
their young lady students.[48] (Emphasis in the original)
On the other hand, the NLRC opined that:

In the instant case, when the complainant-appellant was already conceiving a child even
before she got married, such is considered a shameful and scandalous behavior, inimical to
public welfare and policy. It eroded the moral doctrines which the respondent Catholic
school, an exclusive school for girls, is teaching the young girls. Thus, when the
respondent-appellee school terminated complainant-appellantas services, it was a valid
exercise of its management prerogative. Whether or not she was a teacher is of no moment.
There is no separate set of rules for non-teaching personnel. Respondents-appellees
uphold the teachings of the Catholic Church on pre-marital sex and that the complainant-
appellant as an employee of the school was expected to abide by this basic principle and to
live up with the standards of their purely Catholic values. Her subsequent marriage did not
take away the fact that she had engaged in pre-marital sex which the respondent-appellee
school denounces as the same is opposed to the teachings and doctrines it espouses.[49]
(Emphasis ours)

Contrary to the labor tribunalsa declarations, the Court "nds that SSCW failed to adduce
substantial evidence to prove that the petitioneras indiscretion indeed caused grave
scandal to SSCW and its students. Other than the SSCWas bare allegation, the records are
bereft of any evidence that would convincingly prove that the petitioneras conduct indeed
adversely a#ected SSCWas integrity in teaching the moral doctrines, which it stands for.
The petitioner is only a non-teaching personnel; her interaction with SSCWas students is
very limited. It is thus quite impossible that her pregnancy out of wedlock caused such a
grave scandal, as claimed by SSCW, as to warrant her dismissal.

Settled is the rule that in termination cases, the burden of proving that the dismissal of the
employees was for a valid and authorized cause rests on the employer. It is incumbent
upon the employer to show by substantial evidence that the termination of the employment
of the employees was validly made and failure to discharge that duty would mean that the
dismissal is not justi"ed and therefore illegal.[50] aSubstantial evidence is more than a mere
scintilla of evidence. It means such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other minds equally reasonable might
conceivably opine otherwise.a[51]

Indubitably, bare allegations do not amount to substantial evidence. Considering that the
respondents failed to adduce substantial evidence to prove their asserted cause for the
petitioneras dismissal, the labor tribunals should not have upheld their allegations hook,
line and sinker. The labor tribunalsa respective "ndings, which were arrived at sans any
substantial evidence, amounts to a grave abuse of discretion, which the CA should have
recti"ed. aSecurity of tenure is a right which may not be denied on mere speculation of any
unclear and nebulous basis.a[52]

The petitioneras dismissal is not a

valid exercise of SSCWas management
prerogative.

The CA belabored the management prerogative of SSCW to discipline its employees. The
CA opined that the petitioneras dismissal is a valid exercise of management prerogative to
impose penalties on erring employees pursuant to its policies, rules and regulations.

The Court does not agree.

The Court has held that amanagement is free to regulate, according to its own discretion
and judgment, all aspects of employment, including hiring, work assignments, working
methods, time, place and manner of work, processes to be followed, supervision of
workers, working regulations, transfer of employees, work supervision, lay o# of workers
and discipline, dismissal and recall of workers. The exercise of management prerogative,
however, is not absolute as it must be exercised in good faith and with due regard to the
rights of labor.a Management cannot exercise its prerogative in a cruel, repressive, or
despotic manner.[53]

SSCW, as employer, undeniably has the right to discipline its employees and, if need be,
dismiss them if there is a valid cause to do so. However, as already explained, there is no
cause to dismiss the petitioner. Her conduct is not considered by law as disgraceful or
immoral. Further, the respondents themselves have admitted that SSCW, at the time of the
controversy, does not have any policy or rule against an employee who engages in pre-
marital sexual relations and conceives a child as a result thereof. There being no valid basis
in law or even in SSCWas policy and rules, SSCWas dismissal of the petitioner is despotic
and arbitrary and, thus, not a valid exercise of management prerogative.
In sum, the Court "nds that the petitioner was illegally dismissed as there was no just
cause for the termination of her employment. SSCW failed to adduce substantial evidence
to establish that the petitioneras conduct, i.e., engaging in pre-marital sexual relations and
conceiving a child out of wedlock, assessed in light of the prevailing norms of conduct, is
considered disgraceful or immoral. The labor tribunals gravely abused their discretion in
upholding the validity of the petitioneras dismissal as the charge against the petitioner lay
not on substantial evidence, but on the bare allegations of SSCW. In turn, the CA committed
reversible error in upholding the validity of the petitioneras dismissal, failing to recognize
that the labor tribunals gravely abused their discretion in ruling for the respondents.

The petitioner is entitled to

separation pay, in lieu of actual
reinstatement, full backwages and
attorneyas fees, but not to moral
and exemplary damages.

Having established that the petitioner was illegally dismissed, the Court now determines
the reliefs that she is entitled to and their extent. Under the law and prevailing
jurisprudence, aan illegally dismissed employee is entitled to reinstatement as a matter of
right.a[54] Aside from the instances provided under Articles 283[55] and 284[56] of the Labor
Code, separation pay is, however, granted when reinstatement is no longer feasible because
of strained relations between the employer and the employee. In cases of illegal dismissal,
the accepted doctrine is that separation pay is available in lieu of reinstatement when the
latter recourse is no longer practical or in the best interest of the parties.[57]

In Divine Word High School v. NLRC,[58] the Court ordered the employer Catholic school to
pay the illegally dismissed high school teacher separation pay in lieu of actual
reinstatement since her continued presence as a teacher in the school amay well be met
with antipathy and antagonism by some sectors in the school community.a[59]

In view of the particular circumstances of this case, it would be more prudent to direct
SSCW to pay the petitioner separation pay in lieu of actual reinstatement. The continued
employment of the petitioner with SSCW would only serve to intensify the atmosphere of
antipathy and antagonism between the parties. Consequently, the Court awards separation
pay to the petitioner 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
illegal dismissal up to the "nality of this judgment, as an alternative to reinstatement.

Also, aemployees who are illegally dismissed are entitled to full backwages, inclusive of
allowances and other bene"ts or their monetary equivalent, computed from the time their
actual compensation was withheld from them up to the time of their actual reinstatement
but if reinstatement is no longer possible, the backwages shall be computed from the time
of their illegal termination up to the "nality of the decision.a[60] Accordingly, the petitioner
is entitled to an award of full backwages from the time she was illegally dismissed up to the
"nality of this decision.

Nevertheless, the petitioner is not entitled to moral and exemplary damages. aA dismissed
employee is entitled to moral damages when the dismissal is attended by bad faith or fraud
or constitutes an act oppressive to labor, or is done in a manner contrary to good morals,
good customs or public policy. Exemplary damages may be awarded if the dismissal is
e#ected in a wanton, oppressive or malevolent manner.a[61]

aBad faith, under the law, does not simply connote bad judgment or negligence. It imports a
dishonest purpose or some moral obliquity and conscious doing of a wrong, or a breach of
a known duty through some motive or interest or ill will that partakes of the nature of
fraud.a[62]

aIt must be noted that the burden of proving bad faith rests on the one alleging ita[63] since
basic is the principle that good faith is presumed and he who alleges bad faith has the duty
to prove the same.[64] aAllegations of bad faith and fraud must be proved by clear and
convincing evidence.a[65]

The records of this case are bereft of any clear and convincing evidence showing that the
respondents acted in bad faith or in a wanton or fraudulent manner in dismissing the
petitioner. That the petitioner was illegally dismissed is insu!cient to prove bad faith. A
dismissal may be contrary to law but by itself alone, it does not establish bad faith to entitle
the dismissed employee to moral damages. The award of moral and exemplary damages
cannot be justi"ed solely upon the premise that the employer dismissed his employee
without cause.[66]
However, the petitioner is entitled to attorneyas fees in the amount of 10% of the total
monetary award pursuant to Article 111[67] of the Labor Code. aIt is settled that where an
employee was forced to litigate and, thus, incur expenses to protect his rights and interest,
the award of attorneyas fees is legally and morally justi"able.a[68]

Finally, legal interest shall be imposed on the monetary awards herein granted at the rate
of six percent (6%) per annum from the "nality of this judgment until fully paid.[69]

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. Scholasticaas 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 "nality of this Decision; (b) full backwages from
the time of her illegal dismissal up to the "nality of this Decision; and (c) attorneyas 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 "nality of this Decision until fully paid. The case is REMANDED to the Labor Arbiter for
the computation of petitioneras monetary awards.

SO ORDERED.

Velasco, Jr., (Chairperson), Peralta, Villarama, Jr., and Jardeleza, JJ., concur.

February 17, 2015

 N O T I C E OF J U D G M E N T

Sirs/Mesdames:

Please take notice that on ___January 28, 2015___ a Decision, copy attached herewith, was
rendered by the Supreme Court in the above-entitled case, the original of which was
received by this O!ce on February 17, 2015 at 1:46 p.m.

Very truly yours,

(SGD)
WILFREDO V. LAPITAN
Division Clerk of Court

[1]
Penned by Associate Justice Portia AliAo-Hormachuelos, with Associate Justices Hakim
S. Abdulwahid and Teresita Dy-Liacco Flores, concurring; rollo, pp. 148-156.

[2]
Id. at 170-170A.

[3]
Penned by Commissioner Tito F. Genilo, with Presiding Commissioner Lourdes C. Javier
and Commissioner Gregorio O. Bilog III, concurring; id. at 125-131.

[4]
Id. at 146-147.

[5]
Id. at 76.

[6]
Id. at 77.

[7]
Id. at 78.
[8]
Id. at 79.

[9]
Id. at 80.

[10]
Id.

[11]
Id. at 84-85.

[12]
Id. at 82.

[13]
Id. at 83.

[14]
Id. at 60-73.

[15]
Id. at 86-94.

[16]
Rendered by LA Danna M. Castillon; id. at 104-110.

[17]
Id. at 108.

[18]
Id. at 111-124.

[19]
Id. at 125-131.

[20]
Id. at 133-145.

[21]
Id. at 146-147.

[22]
Id. at 35-58.

[23]
Id. at 148-156.

[24]
Id. at 153.
[25]
Id. at 153-155.

[26]
Id. at 157-169.

[27]
Id. at 170-170A.

[28]
Ayala Land, Inc. v. Castillo, G.R. No. 178110, June 15, 2011, 652 SCRA 143, 158.

[29]
Sec. 70. Rule-making Authority - The Minister Education, Culture and Sports charged
with the administration and enforcement of this Act, shall promulgate the necessary
implementing rules and regulations.

[30]
Sec. 57. Functions and Powers of the Ministry - The Ministry shall:

...

3. Promulgate rules and regulations necessary for the administration, supervision and
regulation of the educational system in accordance with declared policy;

...

[31]
Sec. 3 of BP 232.

[32]
Sec. 69. Administrative Sanction - The Minister of Education, Culture and Sports may
prescribe and impose such administrative sanction as he may deem reasonable and
appropriate in the implementing rules and regulations promulgated pursuant to this Act for
any of the following causes:

...

2. Gross ine!ciency of the teaching or non-teaching personnel;

...

[33]
Montoya v. Transmed Manila Corp./Mr. Ellena, et al., 613 Phil. 696, 707 (2009).
[34]
Jinalinan Technical School, Inc. v. NLRC (Fourth Div.), 530 Phil. 77, 82 (2006).

[35]
See G&S Transport Corporation v. Infante, 559 Phil. 701, 709 (2007).

[36]
See Concurring and Dissenting Opinion, Brion, J., INC Shipmanagement, Inc. v.
Moradas, G.R. No. 178564, January 15, 2014, 713 SCRA 475, 499-500; Maralit v. PNB, 613 Phil.
270, 288-289 (2009).

[37]
G.R. No. 49549, August 30, 1990, 189 SCRA 117.

[38]
Id. at 124.

[39]
455 Phil. 411 (2003).

[40]
Id. at 587-588.

[41]
Id. at 591.

[42]
Id. at 588-590.

[43]
565 Phil. 321 (2007).

[44]
Id. at 327-328.

[45]
Id. at 329.

[46]
350 Phil. 560 (1998).

[47]
Id. at 569.

[48]
Rollo, p. 107.

[49]
Id. at 129-130.
[50]
Seven Star Textile Company v. Dy, 541 Phil. 468, 479 (2007).

[51]
Hon. Ombudsman Marcelo v. Bungubung, et al., 575 Phil. 538, 556 (2008), citing
Montemayor v. Bundalian, 453 Phil. 158, 167 (2003).

[52]
Escareal v. National Labor Relations Commission, G.R. No. 99359, September 2, 1992,
213 SCRA 472, 489.

[53]
See Andrada v. National Labor Relations Commission, 565 Phil. 821, 839 (2007).

[54]
Quijano v. Mercury Drug Corporation, 354 Phil. 112, 121 (1998).

[55]
Article 283. Closure of establishment and reduction of personnel. The employer may
also terminate the employment of any employee due to the installation of labor-saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers and
the Ministry of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor-saving devices or
redundancy, the worker a#ected thereby shall be entitled to a separation pay equivalent to
at least his one (1) month pay or to at least one (1) month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to serious business losses
or "nancial reverses, the separation pay shall be equivalent to one (1) month pay or at least
one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least
six (6) months shall be considered one (1) whole year.

[56]
Article 284. Disease as ground for termination. An employer may terminate the services
of an employee who has been found to be su#ering from any disease and whose continued
employment is prohibited by law or is prejudicial to his health as well as to the health of his
co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month
salary or to one-half (1/2) month salary for every year of service, whichever is greater, a
fraction of at least six (6) months being considered as one (1) whole year.

[57]
Leopard Security and Investigation Agency v. Quitoy, G.R. No. 186344, February 20,
2013, 691 SCRA 440, 450-451.

[58]
227 Phil. 322 (1986).

[59]
Id. at 326.

[60]
Coca-Cola Bottlers Phils., Inc. v. del Villar, 646 Phil. 587, 615 (2010).

[61]
Quadra v. Court of Appeals, 529 Phil. 218, 223-224 (2006).

[62]
Nazareno, et al. v. City of Dumaguete, 607 Phil. 768, 804 (2009).

[63]
United Claimants Association of NEA (UNICAN) v. National Electri"cation
Administration (NEA), G.R. No. 187107, January 31, 2012, 664 SCRA 483, 494.

[64]
Culili v. Eastern Telecommunications Philippines, Inc., G.R. No. 165381, February 9, 2011,
642 SCRA 338, 361.

[65]
Palada v. Solidbank Corporation, G.R. No. 172227, June 29, 2011, 653 SCRA 10, 11.

[66]
See Lambert Pawnbrokers and Jewelry Corporation v. Binamira, G.R. No. 170464, July
12, 2010, 624 SCRA 705, 720.

[67]
Art. 111. Attorneyas Fees.

(a) In cases of unlawful withholding of wages, the culpable party may be assessed
attorneyas fees equivalent to ten percent of the amount of wages recovered.

(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative
proceedings for the recovery of wages, attorneyas fees which exceed ten percent of the
amount of wages recovered.

[68]
Lambert Pawnbrokers and Jewelry Corporation v. Binamira, supra note 65, at 721.

[69]
See Garza v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 180972, January 20, 2014, 714
SCRA 251, 274-275; Nacar v. Gallery Frames, G.R. No. 189871, August 13, 2013, 703 SCRA 439,
458.