In one case, the employer asserts that the complainant did not submit a duly executed Verification and Certification of Non-Forum Shopping when he filed his Petition for Certiorari before the CA. It alleged that his signature therein was forged and the same may easily be ascertained when comp red with his signatures in the previous pleadings. The company insisted that this issue was raised before the appellate court but it was not passed upon. Hence, the Petition for Certiorari ought to have been dismissed outright. Notably, up until now, said employee refused to acknowledge or validate the authorship of the assailed signature. Due to the foregoing, the company insists that it was deprived of due process . [Telus International Philippines, Inc. vs. De Guzman, G.R. No. 202676, December 04, 2019]

In Traveño v. Bobongon Banana Growers Multi-Purpose Cooperative, the SC restated the jurisprudential pronouncements respecting non-compliance with the requirements on, or s;ubmission of defective, verification and certification against forum shopping:

1) A distinction must be made between non-compliance with the requirement on or submission of defective verification, and noncompliance with the requirement on or submission of defective certification against forum shopping.

2) As to verification, non-compliance therewith or a defect, therein does not necessarily render the pleading fatally defective. The Court may order its submission or correction or act on the pleading if the attending circumstances are such that strict compliance with the Rule mav be dispensed with in order that

the ends of justice may be served thereby.

3) Verification is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct.

4) As to certification against forum shopping non-compliance therewith or a defect therein like in verification is generally not curable by its subsequent submission or correction thereof. Unless there is a need to relax the rule on the ground of “substantial compliance” or presence of “special circumstances or compelling reasons.”

5) The certification against forum shopping must be signed by all the plaintiffs or petitioners in a case; otherwise, those who did not sign will be dropped as parties to the case. Under reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioner’s share a common interest and invoke a common cause of action or defense, the signature of only one of them in the certification against forum hopping substantially complies with the Rule.

6) Finally, the certification against forum shopping must be executed by the party-pleader, not by his counsel. If, however, for reasonable or justifiable reasons, the party-pleader is unable to sign, he must execute a Special Power of Attorney designating his counsel of record to sign on his behalf.

The issue as to alleged defective Verification and Certification of Non­ Forum Shopping appended to the Petition for Certiorari filed before the appellate court is rendered moot given the full resolution of the said Petition.

The SC found that the court properly dispensed with the issue of the alleged defective Verification and Certification of Non-Forum Shopping given the overriding merits of the case. Indeed per jurisprudence, strict compliance with the Rule may be dispensed with in order that the ends of justice may be served thereby.

Moreover, the SC agreed with the complainant that a mere allegation of forgery will not suffice to declare the petition as defective. It is the employee’s own lookout to assail the alleged forgery at d as manifested, he is willing to attest to the authenticity of the signature if so required.

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In the case of Nuda vs. LGTM Corporation, Inc., [G.R. No. 245835] the Supreme Court (SC) held that there is no dispute that respondents therein filed an appeal before the NLRC and complied with the other requirements for perfecting an appeal, save for the posting of the full amount of the bond.

However, the NLRC, upon filing of respondents’ appeal, required them to post the differential amount between the judgment award and the sum of money previously tendered by them to complete the correct amount of the supersedeas bond.

Respondents complied with the said order of the NLRC and paid the differential amount of PhP322,317.30. Accordingly, the SC found that the liberal application of the requirement on the timely filing of the full amount of the appeal or supersedeas bond is justified under the circumstances:

1. the posting of a PhP71,831.73 bond upon filing respondents’ appeal;
2. full payment of the supersedeas bond in compliance with the Order of the NLRC; and
3. merit in their appeal.

Article 229 [formerly Article 223] of the Labor Code governs the appeal

in labor cases:

ART. 229. [223] Appeal. – Decisions, awards, or orders of the Labor Arbiter

are final and executory unless appealed to the Commission by any or both

parties within ten (10) calendar days from receipt of such decisions, awards, or orders. x x x:

xxxx

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from.

The mandatory nature of posting a bond in appeals from the arbiter to the NLRC is also highlighted in Section 4(b ), Rule VI of the NLRC Rules, which states that “[a] mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for perfecting an appeal.”

This requirement for the perfection of an appeal is meant to assure workers that if they prevail in the case, the monetary award will be given to them upon the dismissal of the employer’s appeal. Meanwhile, this requirement discourages employers from using an appeal to delay, or even evade, their obligation to satisfy their employees’ just and lawful claims.

This notwithstanding, this Court, in several cases, has relaxed the stringent requirement whenever justified.

These cases include instances in which (1) there was substantial compliance with the [NLRC] Rules, (2) surrounding facts and circumstances constitute meritorious grounds to reduce the bond, (3) a liberal interpretation of the requirement of an appeal bond would serve the desired objective of resolving controversies on the merits, or (4) the appellants, at the very least, exhibited their willingness and/or good faith by posting a partial bond during the reglementary period.

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Article 297 of the Labor Code considers any of the following acts or omission on the part of the employee as just cause or ground for terminating employment:

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

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

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

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

(e) Other causes analogous to the foregoing.

In Lim vs. National Labor Relations Commission, the Supreme Court (SC) considered inefficiency as an analogous just cause for termination of employment under Article 297 of the Labor Code. The SC held that gross inefficiency falls within the purview of other causes analogous to the foregoing, this constitutes, therefore, just cause to terminate an employee under Article 297 of the Labor Code.

One is analogous to another if it is susceptible of comparison with the latter either in general or in some specific detail; or has a close relationship with the latter. Gross inefficiency is closely related to “gross neglect, for both involve specific acts of omission on the part of the employee resulting in damage to the employer or to his business.

In Buiser vs. Leogardo, this SC ruled that failure to observe prescribed standards to inefficiency may constitute just cause for dismissal. Also, in Leonardo vs. National Labor Relations Commission the SC held that an employer is entitled to impose productivity standards for its workers, and in fact, non-compliance may be visited with a penalty even more severe than demotion.

The practice of a company in laying off workers because they failed to make the work quota has been recognized in this jurisdiction. (Philippine American Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634, 639). Employees’ failure to meet the sales quota assigned to each of them constitute a just cause of their dismissal, regardless of the permanent or probationary status of their employment.

Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to

attain work goals or work quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory results.

This management prerogative of requiring standards may be availed of so long as they are exercised in good faith for the advancement of the employer’s interest.

In fine, an employee’s failure to meet sales or work quotas falls under the concept of gross inefficiency, which in turn is analogous to gross neglect of duty that is a just cause for dismissal under Article 297 of the Code.

However, in order for the quota imposed to be considered a valid productivity standard and thereby validate a dismissal, management’s prerogative of fixing the quota must be exercised in good faith for the advancement of its interest.

The duty to prove good faith, however, rests with employer as part of its burden to show that the dismissal was for a just cause. The company must show that such quota was imposed in good faith.

Employers must be reminded that while probationary employees do not enjoy permanent status, they enjoy the constitutional protection of security of tenure. They can only be terminated for cause or when they otherwise fail to meet the reasonable standards made known to them by the employer at the time of their engagement.

Where the employer miserably failed to prove the termination of employee was for a just cause nor was there substantial evidence to demonstrate the standards were made known to the latter at the time of his engagement, the employee’s right to security of tenure was breached.

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The Supreme Court (SC) has held that there are various laws imposing all kinds of burdens and obligations upon the employer in relation to his employees, and yet as a rule it has always upheld the employer’s prerogative to regulate all aspects of employment relating to the employees’ work assignment, the working methods and the place and manner of work. Indeed, labor laws discourage interference with an employer’s judgment in the conduct of his business. (Tinio vs. Court of Appeals, G.R. No. 171764, June 8, 2007, 524 SCRA 533, 539.)

In Rural Bank of Cantilan, Inc. vs. Julve, the SC had occasion to summarize the general jurisprudential guidelines affecting the right of the employer to regulate employment, including the transfer of its employees.

Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees. The only limitations to the exercise of this prerogative are those imposed by labor laws and the principles of equity and substantial justice.

While the law imposes many obligations upon the employer, nonetheless, it also protects the employer’s right to expect from its employees not only good performance, adequate work, and diligence, but also good conduct and loyalty. In fact, the Labor Code does not excuse employees from complying with valid

company policies and reasonable regulations for their governance and guidance.

Concerning the transfer of employees, these are the following jurisprudential guidelines: (a) a transfer is a movement from one position to another of equivalent rank, level or salary without break in the service or a lateral movement from one position to another of equivalent rank or salary; (b) the employer has the inherent right to transfer or reassign an employee for legitimate business purposes; (c) a transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected as a form of punishment or is a demotion without sufficient cause; (d) the employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee.

In Philippine Japan Active Carbon Corporation v. NLRC, it was held that the exercise of management’s prerogative concerning the employees’ work assignments is based on its assessment of the qualifications, aptitudes and competence of its employees, and by moving them around in the various areas of its business operations it can ascertain where they will function with maximum benefit to the company.

It is the employer’s prerogative, based on its assessment and perception of its employees’ qualifications, aptitudes, and competence, to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. An employee’s right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful.

When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal.

As a privilege inherent in the employer’s right to control and manage its enterprise effectively, its freedom to conduct its business operations to achieve its purpose cannot be denied.

If the transfer of an employee is not unreasonable, or inconvenient, or prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits and other privileges, the employee may not complain that it amounts to a constructive dismissal.

The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised.

Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits.

Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay.

Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment.

As further held in Philippine Japan Active Carbon Corporation, when the transfer of an employee is not unreasonable, or inconvenient, or prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits and other privileges, the employee may not complain that it amounts to a constructive dismissal.

But like all other rights, there are limits to the exercise of managerial prerogative to transfer personnel, and on the employer is laid the burden to show that the same is without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Indeed, management prerogative may not be used as a subterfuge by the employer to rid himself of an undesirable worker. (Peckson vs. Robinsons Supermarket Corporation, G.R. No. 198534, July 3, 2013)

See here the procedure to observe when the employee refuses to receive employer’s notice.

In addition, the company should send another copy by registered mail and keep the registry receipt for future reference.

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ARTICLE 295. [280] Regular and Casual Employment. -The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:  Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a  regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

The Supreme Court (SC), in the case of Carpio vs. Modair Manila Co. Ltd., Inc.

[G.R. No. 239622, June 21, 2021] distinguished regular from project employment. According to the SC, as characterized, regular employment exists when the employee is:

(a) engaged to perform activities that are usually necessary or desirable in the usual business or trade of

the employer; or

(b) a  casual employee whose activities are not usually necessary or desirable in the employer’s usual business or trade, and has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed; while project employment exists when the employee is hired under a contract which specifies that the employment will last only for a  specific project or undertaking, the completion or tem1ination of which is determined at the time of engagement.

As regards security of tenure, regular employment may be terminated for just or authorized causes; whereas, for project employment, lawful dismissal is brought about by the completion of the project or contract for which the employee was engaged, unless terminated during the life of the project, in which case, only just or authorized causes may be invoked.

Regarding payment of backwages in cases of illegal dismissal, for regular employment, backwages are computed from the time of dismissal until reinstatement, if such is ordered, or until finality of the decision ordering separation pay, if reinstatement is infeasible; while for project employment, backwages are computed from the date of the termination of employment until the actual completion of the work.

Upon the employer lies the burden of proof to establish project employment by showing that:

(1) the employee was assigned to carry out a specific project or undertaking; and

(2) the duration and scope of which were specified at the time the employee was engaged for such project.

Moreover, the employer must also prove that there was indeed a  project undertaken. Failing these, the worker will be presumed a regular employee.

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It is  the voluntary act of an employee who is in a  situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and he has then no other choice but to disassociate himself from employment. [Bance, et al. vs. University of St. Anthony, G.R. No. 202724, February 3, 2021]

The intent to relinquish must concur with the overt act of relinquishment; hence, the acts of the employee before and after the alleged resignation must be considered in determining whether he in fact intended to terminate his employment. In illegal dismissal cases, it  is a  fundamental rule that when an employer interposes the defense of resignation, on him necessarily rests the burden to prove that the employee indeed voluntarily resigned.

In the case of Bance, the SC resolved the situation where the employees resigned prior to the effectivity of their termination. Then they filed an illegal dismissal case.

What will happen to the labor case?

The complainants resigned prior to the effectivity date of the termination of their employment. There were ongoing investigations against them for the irregular acts they committed thereby placing them in a  difficult position. The SC found that from the wordings of the resignation letters, it could be implied that their resignations were voluntary.

Though not the sole test, the SC held that the wording of resignation letters may be considered as a factor, together with other circumstances, in assessing the voluntariness of a  resignation.

Also, to emphasize, petitioners did not contend or present countervailing evidence that their resignation was involuntary. Likewise, it is settled that there is  nothing reprehensible or illegal when the employer grants the employee a  chance to resign and save face rather than smear the latter’s employment record.”

Thus, because of the voluntary resignations of complainants prior to the termination of their employment, their complaints for illegal dismissal have no basis.

See here the procedure to observe when the employee refuses to receive employer’s notice.

In addition, the company should send another copy by registered mail and keep the registry receipt for future reference.

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However, this constitutional commitment to the policy of social justice does not mean that every labor dispute shall be automatically decided in favor of labor. It must also be remembered that in protecting the rights of the workers, the law does not authorize the oppression of the employer.

Hence, due regard is likewise given to the right of an employer to manage its operations according to reasonable standards and norms of fair play. This means that an employer has free reign over every aspect of its business, including the dismissal of its employees, as long as the exercise of its management prerogative is done reasonably, in good faith, and in a manner not otherwise intended to defeat or circumvent the rights of workers.

Accordingly, Article 297 of the Labor Code affirms the right of an employer to dismiss a miscreant employee on account of the latter’s willful disobedience.

Significantly, jurisprudence ordains that for an employee to be validly dismissed on the ground of willful disobedience, the employer must prove by substantial evidence that: (i) “the employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and (ii) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge.

In the case of Mamaril vs. The Red System Company, Inc. [G.R. No. 229920, July 04, 2018], the Supreme Court (SC) held, in ruling for the validity of the dismissal of the employee, that the lifeblood of Red

System’s business is the safe transport and delivery of Coca-Cola products from the warehouse to the customers. As such, Red System imposed stringent guidelines to ensure the safe and efficient delivery of all the products.

Specifically, drivers were repeatedly reminded to place a tire choke, shift the engine to first gear, and pull the hand brake, upon parking the truck. Compliance with these safety measures was essential to prevent the sudden movement of the truck while parked and pushed by a forklift during loading and unloading operations. Likewise, caution was necessary to avoid damage to the new trucks. Moreover, extra-care was mandated in hauling Coca-Cola products to avoid accidents which would result in needless delays and unnecessary expenses and ruin Red System’s good will.

The SC further noted that the Red System was not remiss in reminding its drivers of the importance of abiding by their safety regulations. To ensure a strict observance of the rules, the company required its drivers to attend various safety seminars, in addition to a mandated pre-employment orientation. In fact, the complainant in said case attended a pre-orientation seminar and five safety seminars over the course of his two-year stint with Red System.

Added to this, the safety rules were also written in Red System’s Code of Conduct. There can be no doubt as to the lawfulness, reasonableness and necessity of Red System’s safety instructions. Moreover, the rules pertained to the duties performed by complainant. Accordingly, complainant was duty-bound to comply with such safety orders, as his main task consisted in driving and delivering fragile products. This notwithstanding, the complainant still willfully and negligently failed to abide by the safety rules.

The records show that three days after complainant was employed, he failed to put a tire choke, and worse, shifted the truck’s gear to neutral. As a result, the parked vehicle moved causing damage to Coca-Cola products valued at Php 14,556.00, in addition to the damage he caused to the truck. To make matters worse, instead of reporting the incident to his supervisor, as mandated under Red System’s rules, complainant deliberately concealed the incident. If not for his belated admission in an administrative hearing on a different incident, Red System would not have learned about his prior misdeed.

To make matters worse, complainant was again found to have committed the same violation of Red System’s safety rules. On November 12, 2011, he parked the truck with plate number PIK 726, without again putting a tire choke and engaging the hand brake. Due to his failure to perform the required safety standards, the truck moved backwards and hit another vehicle. This caused damage amounting to Php 25,500.00.

Brazenly, the complainant again purposely concealed the incident. Red System belatedly learned of the accident only after conducting an investigation, after it was surprised to receive Job Order from Motormall Davao Corporation for the repair of the said truck.

Clearly, complainant’s acts constituted a violation of Red System’s company policy. Rule 5, Section 2(b)(3) of Red System’s Code of Conduct penalizes other acts of negligence or inefficiency in the performance of duties or in the care, custody and/or use of company property, funds and/or equipment, where the amount of loss or damage amounts of more than Php 25,000.00. A violation of such rule warrants a penalty of dismissal.

Notably, the complainant violated Red System’s safety rules twice, and caused damage amounting to over Php 40,000.00. To make matters worse, he even deliberately and willfully concealed his transgressions. Such flagrant violation of the rules, coupled with the perversity of concealing the incidents, patently show a wrongful and perverse mental attitude rendering his acts inconsistent with proper subordination. Indubitably, this shows that complainant was indeed guilty of willful disobedience of Red System’s lawful orders.

Guided by the ruling in St. Luke’s Medical Center, Inc. v. Sanchez, the SC held that the deliberate disregard or disobedience by an employee of the rules, shall not be countenanced, as it may encourage him or her to do even worse and will render a mockery of the rules of discipline that employees are required to observe. To allow a recalcitrant employee to remain in employ shall amount to coddling an obstinate employee at the expense of the employer.

Thus, taking all the circumstances collectively, the Court is convinced that Red System had sufficient and valid reason for terminating complainant’s services, as his continued employment would be patently inimical to its interest. It is evident from the circumstances that Red System’s decision to terminate him was exercised in good faith, for the advancement of its interest and not for the purpose of defeating or circumventing the latter’s rights.

The SC finally held that this valid exercise of management prerogative must be upheld.

See here the procedure to observe when the employee refuses to receive employer’s notice.

In addition, the company should send another copy by registered mail and keep the registry receipt for future reference.

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An employee who alleges to have been dismissed from service has the burden of proof. The rule is that before resolving the legality or illegality of dismissal, the fact of dismissal must first be established.

It is axiomatic that in illegal dismissal cases, the employer bears the burden of proving that the termination was for a valid or authorized cause. However, there are cases wherein the facts and the evidence do not establish prima facie that the employee was dismissed from employment.

Before the employer is obliged to prove that the dismissal was legal, the employee must first establish by substantial evidence the fact of his dismissal from service. If there is no dismissal, then there can be no question as to the legality or illegality thereof.

In a case where the employee alleged that when he failed to report for work on December 24, 2014, he was verbally terminated by the company. The employee claimed that company’s representative confirmed his termination. On the other hand, the company contended that the he just stopped reporting for work after he left his work on December 23, 2014.

The employee’s bare claim of having been dismissed from employment by the company, unsubstantiated by impartial and independent evidence, is insufficient to establish such fact of dismissal.

Bare and unsubstantiated allegations do not constitute substantial evidence and have no probative value. It must be emphasized that aside from the allegation that he was verbally terminated from his work, respondent failed to present any competent evidence showing that he was prevented from returning to his work.

The alleged representative did not issue any statement to corroborate the claimed termination of the employee. That he was refused to be given his salary covering the period from December 15, 2014 to December 22, 2014 did not at all prove the fact of his termination.

The Supreme Court (SC) ruled that it must be taken into account that salaries of employees may not be released for myriad of reasons. Termination may only be one of them. The basic rule of evidence that each party must prove his affirmative allegation, that mere allegation is not evidence. The Court must also stress that the evidence presented to show the employee’s termination from employment must be clear, positive, and convincing.

Absent any showing of an overt or positive act proving that the company had dismissed the employee, the latter’s claim of illegal dismissal cannot be sustained — as the same would be self-serving, conjectural, and of no probative value. [See Atienza vs. Saluta, June 17, 2019, G.R. No. 233413]

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Insubordination or willful disobedience requires the concurrence of the following requisites: (1) the employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a “wrongful and perverse attitude”; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge.

The totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring employee.

The offenses committed by employee should not be taken singly and separately. Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct and ability separate and independent of each other.

While it may be true that an employee may have been penalized for his previous infractions, this does not and should not mean that his employment record would be wiped clean of his infractions. After all, the

record of an employee is a relevant consideration in determining the penalty that should be meted out since an employee’s past misconduct and present behavior must be taken together in determining the proper imposable penalty.

Despite the sanctions imposed upon an employee, he may have continued to commit misconduct and exhibit undesirable behavior on board. Indeed, the employer cannot be compelled to retain a misbehaving employee, or one who is guilty of acts inimical to its interests. It has the right to dismiss such an employee if only as a measure of self-protection.

To be sure, the totality of an employee’s infractions is considered and weighed in determining the imposable sanction for the current infraction. It presupposes that the employee is already found guilty of the new violation, as in this case.

Apropos, it is also worth mentioning that when the employer had already previously warned an employee that the penalty for his next infraction would be elevated to dismissal and he committed the same violation, he may be dismissed from service. Thus, the dismissal of employee in this case, on the basis of the principle of totality of infractions, may be justified. (Villanueva vs. Ganco Resort and Recreation, Inc., G.R. No. 227175, January 08, 2020)

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The Supreme Court (SC) concluded that this constitutes retrenchment by, and not closure of, the enterprise or the company itself as SMC has not totally ceased operations but is still very much an on-going and highly viable business concern.

Retrenchment is a management prerogative consistently recognized and affirmed by this Court. It is, however, subject to faithful compliance with the substantive and procedural requirements laid down by law and jurisprudence.

For retrenchment to be considered valid the following substantial requirements must be met: (a) the losses expected should be substantial and not merely de minimis in extent; (b) the substantial losses apprehended must be reasonably imminent such as can be perceived objectively and in good faith by the employer; (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.

In the discharge of these requirements, it is the employer who has the onus, being in the nature of an

affirmative defense.

Normally, the condition of business losses is shown by audited financial documents like yearly balance sheets, profit and loss statements and annual income tax returns. The financial statements must be prepared and signed by independent auditors failing which they can be assailed as self-serving documents.

In the case of SMC, company losses were duly established by financial documents audited by Joaquin Cunanan & Co. showing that the aquaculture operations of SMC’s Agribusiness Division accumulated losses amounting to Php145,848,172.00 in 1992 resulting in the closure of its Calatrava Aquaculture Center in Negros Occidental, PhP11,393,071.00 in 1993 and PhP80,325,608.00 in 1994 which led to the closure of its San Fernando Shrimp Processing Plant in Pampanga and the Bacolod Shrimp Processing Plant in 1995.

SMC has thus proven substantial business reverses justifying retrenchment of its employees.

For termination due to retrenchment to be valid, however, the law requires that written notices of the intended retrenchment be served by the employer on the worker and on the DOLE at least one (1) month before the actual date of the retrenchment, in order to give employees some time to prepare for the eventual loss of their jobs, as well as to give DOLE the opportunity to ascertain the verity of the alleged cause of termination.

Affected employees, however, were merely verbally informed on September 10, 1995 by SMC Prawn Manager Ponciano Capay that effective the following day or on September 11, 1995, they were no longer to report for work as SMC would be closing its operations.

Where the dismissal is based on an authorized cause under Article 283 [now Art. 301] of the Labor Code but the employer failed to comply with the notice requirement, the sanction should be stiff as the dismissal process was initiated by the employer’s exercise of his management prerogative, as opposed to a dismissal based on a just cause under Article 282 [Art. 297] with the same procedural infirmity where the sanction to be imposed upon the employer should be tempered as the dismissal process was, in effect, initiated by an act imputable to the employee.

In light of the factual circumstances of the case at bar, the SC awarded PhP50,000.00 to each complainant as nominal damages.

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin

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