Merchandising Representatives as Fixed-Term Employees

A month ago the Philippine Supreme Court promulgated a very interesting decision that has to do with trade merchandising representatives as fixed term and/or project employees. The case is Fontera Brands Phils., Inc. vs. Leonardo Largado and Teotimo Estrellado (G.R. No. 205300, March 18, 2015). Continue reading “Merchandising Representatives as Fixed-Term Employees”

Security Guards on Floating Status

In the recent case of Exocet Security and Allied Services Corp. and/or Ma. Teresa Marcelo vs. Armando D. Serrano (G.R. No. 198538, September 29, 2014) the Supreme Court clarified some of the rules concerning security guards on floating status. I have taken the liberty of summarising these rules, but I have more or less followed the exact words of the Supreme Court in the decision.

1. The “floating status” or temporary “off-detail” of security guards employed by private security agencies is a form of temporary retrenchment or lay-off. The concept has been defined as that period of time when security guards are in between assignments or when they are made to wait after being relieved from a previous post until they are transferred to a new one. It takes place when the security agency’s clients decide not to renew their contracts with the agency, resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster. It also happens in instances where contracts for security services stipulate that the client may request the agency for the replacement of the guards assigned to it, even for want of cause, such that the replaced security guard may be placed on temporary “off-detail” if there are no available posts under the agency’s existing contracts. Continue reading “Security Guards on Floating Status”

Labor Law: Cashiers Beware!

The case EATS-CETERA FOOD SERVICES OUTLET and/or SERAFIN RAMIREZ, versus MYRNA B. LETRAN and MARY GRACE ESPADERO, (G.R. No. 179507, October 2, 2009) involves a cashier whose time card was punched in by someone else. She failed to report this incident to her supervisor, for which reason she was eventually dismissed. One wonders whether such a minor matter could be a just cause for dismissal, but so it is! And the crucial factor here is her position as cashier. Continue reading “Labor Law: Cashiers Beware!”

Labor Law – Loss of Trust and Confidence

The Supreme Court had the opportunity of reiterating some well-known guidelines pertaining to dismissal due to loss of trust and confidence in the very recent case of M+W ZANDER PHILIPPINES, INC. and ROLF WILTSCHEK, versus TRINIDAD M. ENRIQUEZ, (G.R. No. 169173) promulgated just last week, i.e., June 5, 2009. You can read the facts of the case HERE. The central guidelines on loss of confidence as enunciated in this case are as follows:

Article 282 (c) of the Labor Code allows an employer to terminate the services of an employee for loss of trust and confidence. [28]  Certain guidelines must be observed for the employer to terminate an employee for loss of trust and confidence.  We held in General Bank and Trust Company v. Court of Appeals,[29] viz.:
[L]oss of confidence should not be simulated. It should not be used as a subterfuge for causes which are improper, illegal, or unjustified. Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith.[30]
The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be one holding a position of trust and confidence.
There are two classes of positions of trust: managerial employees and fiduciary rank-and-file employees.
Managerial employees are defined as those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions.[31] They refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or a subdivision thereof, and to other officers or members of the managerial staff.[32] Officers and members of the managerial staff perform work directly related to management policies of their employer and customarily and regularly exercise discretion and independent judgment.[33]
The second class or fiduciary rank-and-file employees consist of cashiers, auditors, property custodians, etc., or those who, in the normal exercise of their functions, regularly handle significant amounts of money or property.[34] These employees, though rank-and-file, are routinely charged with the care and custody of the employer’s money or property, and are thus classified as occupying positions of trust and confidence.
The second requisite of terminating an employee for loss of trust and confidence is that there must be an act that would justify the loss of trust and confidence.[38] To be a valid cause for dismissal, the loss of confidence must be based on a willful breach of trust and founded on clearly established facts.[39]

Article 282 (c) of the Labor Code allows an employer to terminate the services of an employee for loss of trust and confidence. Certain guidelines must be observed for the employer to terminate an employee for loss of trust and confidence.  We held in General Bank and Trust Company v. Court of Appeals, viz.:

[L]oss of confidence should not be simulated. It should not be used as a subterfuge for causes which are improper, illegal, or unjustified. Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith.

The first requisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be one holding a position of trust and confidence.

There are two classes of positions of trust: managerial employees and fiduciary rank-and-file employees.

Managerial employees are defined as those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. They refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or a subdivision thereof, and to other officers or members of the managerial staff. Officers and members of the managerial staff perform work directly related to management policies of their employer and customarily and regularly exercise discretion and independent judgment.

The second class or fiduciary rank-and-file employees consist of cashiers, auditors, property custodians, etc., or those who, in the normal exercise of their functions, regularly handle significant amounts of money or property. These employees, though rank-and-file, are routinely charged with the care and custody of the employer’s money or property, and are thus classified as occupying positions of trust and confidence….

The second requisite of terminating an employee for loss of trust and confidence is that there must be an act that would justify the loss of trust and confidence.  To be a valid cause for dismissal, the loss of confidence must be based on a willful breach of trust and founded on clearly established facts.

The case also includes a discussion of when and when not to grant moral damages in labor cases, and when is a General Manager personally liable for an illegally dismissed employee’s labor claims. You can read the whole thing HERE.

Recent Labor Jurisprudence (RLJ): Hotel Nurses

Although I have posted digests of recent jurisprudence on labor law on this blog before, I think it’s high time I make the whole thing a little bit formal by assigning a category, i.e. Recent Labor Jurisprudence, henceforth RLJ.

Let’s begin with a case decided just this month involving the employment status of nurses engaged by a hotel. Here’s what the Supreme Court has to say in the case of Escasinas, et al. vs. Shangrila’s Mactan Island Resort, et al. (G.R. No. 178827).

Under the foregoing provision, Shangri-la, which employs more than 200 workers, is mandated to “furnish” its employees with the services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic which means that it should provide or make available such medical and allied services to its employees, not necessarily to hire or employ a service provider. As held in Philippine Global Communications vs. De Vera:

x x x while it is true that the provision requires employers to engage the services of medical practitioners in certain establishments depending on the number of their employees, nothing is there in the law which says that medical practitioners so engaged be actually hired as employees,  adding that the law, as written, only requires the employer “to retain”, not employ, a part-time physician who needed to stay in the premises of the non-hazardous workplace for two (2) hours. (Emphasis and underscoring supplied)

The term “full-time” in Art. 157 cannot be construed as referring to the type of employment of the person engaged to provide the services, for Article 157 must not be read alongside Art. 280 in order to vest employer-employee relationship on the employer and the person so engaged. So De Vera teaches:

x x x For, we take it that any agreement may provide that one party shall render services for and in behalf of another, no matter how necessary for the latter’s business, even without being hired as an employee. This set-up is precisely true in the case of an independent contractorship as well as in an agency agreement.  Indeed, Article 280 of the Labor Code, quoted by the appellate court, is not the yardstick for determining the existence of an employment relationship. As it is, the provision merely distinguishes between two (2) kinds of employees, i.e., regular and casual. x x x (Emphasis and underscoring supplied)

The phrase “services of a full-time registered nurse” should thus be taken to refer to the kind of services that the nurse will render in the company’s premises and to its employees, not the manner of his engagement.

You can read the whole thing HERE.

Good Faith and Backwages

It seems to be almost SOP to award backwages in cases of illegal dismissal. However, in March of this year the Supreme Court had occasion to clarify that not all instances of illegal dismissal warrant an award of backwages. Such is the ruling of the Court in Jackqui R. Moreno vs. San Sebastian College-Recoletos, Manila (G.R. No. 175283; March 28, 2008).

Jackqui was a member of the permanent college faculty of San Sebastian. It seems she was one of the better teachers in the Accounting Department. She consistently landed among the five best teachers per yearly evaluation of the performance of teachers, and she was even asked to be the chairman of Business Finance and Accountancy for SY 2002-2003.

It was later on discovered, however, that Jackqui had unauthorized teaching assignments at the Centro Escolar University during the first semester of SY 2002-2003 and at the College of the Holy Spirit, Manila during SY 2000-2001 and SY 2001-2002 as well as during the first semester of SY 2002-2003. Said activities were violative of San Sebastian’s Faculty Manual and were punishable by suspension or dismissal.

In reply to a memorandum from the Dean of her college, Jackqui explained her side and mentioned that she merely wanted to improve her family’s poor financial conditions. A Special Grievance Committee was thereafter set up which eventually issued a resolution unanimously finding that Jackqui had violated the prohibition against a full-time faculty having an unauthorized external teaching load. San Sebastian approved and adopted the findings and recommendations of the grievance committee and sent Jackqui a letter informing her of the effectivity date of the termination of her employment.

Jackqui filed a labor case against San Sebastian. The labor arbiter found in favor of San Sebastian; the National Labor Relations Commission, however, reversed the labor arbiter’s decision; the Court of Appeals, on its part, reversed the Commission; and, finally, the Supreme Court reversed the Court of Appeals – in effect reinstating the Commission’s decision but with important modifications.

In upholding Jackqui’s stance that she was illegally dismissed, the Supreme Court agreed that she was guilty of misconduct, “However, said misconduct falls below the required level of gravity that would warrant dismissal as a penalty.” In support of this finding the Court cited its previous ruling in NLRC vs. Salgarino (497 SCRA 361, 375-376):

“Misconduct is defined as improper or wrong conduct.It is the trangression 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 trival 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.”

The Supreme Court went on to explain that it is the employer who has the burden of proving wrongful intent, and this San Sebastian failed to do: “In the present case, SSC-R failed to adduce any concrete evidence that Moreno indeed harbored perverse or corrupt motivations in violating the aforesaid school policy.” The Court noted that San Sebastian failed to submit evidence controverting Jackqui’s claim that she was “prompted to engage in illicit teaching activities in other schools, as she desperately needed to augment her income.” Incidentally, the Supreme Court also found the penalty of dismissal disproportionate to the offense; suspension, in its view, would have been sufficient.

Despite said finding of illegal dismissal, the Supreme Court decided to grant reinstatement but without backwages:

“In accordance with Durabuilt Recapping Plant & Co. v. National Labor Relations Commission [152 SCRA 328] the court may not only mitigate, but also absolve entirely, the liability of the employer to pay backwages where good faith is evident. Likewise, backwages may be withheld from a dismissed employee where exceptional circumstances are availing.

“In the present case, the good faith of SSC-R is apparent.The termination of Moreno from her employment cannot be said to have been carried out in a malevolent, arbitary or oppressive manner.Indeed, the only mistake of the respondent school has committed was to strictly apply the provisions of its Faculty Manual and its contract with Moreno without regard for the aforementioned special circumstances that were attendant in this case.Even then, Moreno’s right to procedural due process was fully respected, as she was given the required twin notices and ample opportunity to be heard. This fact was not even disputed by Moreno herself.” [Emphasis added]

The moral of the story, insofar as management is concerned, is: Always comply with due process when dismissing an employee. Whether or not a just cause for dismissal exists in a particular case is oftentimes a highly debatable issue. In this case the labor arbiter and the Court of Appeals thought there was no illegal dismissal; the NLRC and the Supreme Court thought otherwise. The Supreme Court, however, has the final say. But at least the Supreme Court saw that San Sebastian was in good faith and that, therefore, it was not liable to pay backwages.