G.R. No. 205453, February 05, 2014
UNITED TOURIST PROMOTIONS (UTP) AND ARIEL D. JERSEY, Petitioners, v. HARLAND B. KEMPLIN, Respondents.
D E C I S I O N
We would like to inform you that your Employment Contract had been expired since March 1, 2007 and never been renewed. So[,] it is clear [that] you are no longer [an] employee as President of [UTP] considering the expiration of your employment contract. However, because of your past services to our client’s company despite [the fact that] your service is no longer needed by his company[,] as token[,] he tolerated you to come in the office [and] as such[,] you were given monthly commissions with allowances.On August 10, 2009, Kemplin filed before Regional Arbitration Branch No. 111 of the NLRC a Complaint8 against UTP and its officers, namely, Jersey, Lorena Lindo9 and Larry Jersey,10 for: (a) illegal dismissal; (b) non–payment of salaries, 13th month and separation pay, and retirement benefits; (c) payment of actual, moral and exemplary damages and monthly commission of P200,0000.00; and (d) recovery of the company car, which was forcibly taken from him, personal laptop, office paraphernalia and personal books.
But because of your inhuman treatment x x x [of] the rank and file employees[,] which caused great damage and prejudices to the company as evidenced [by] those cases filed against you[,] specifically[:] (1) x x x for Grave Oral [T]hreat pending for Preliminary Investigation, Pasay City Prosecutor’s Office x x x[;] (2) x x x for Summary Deportation[,] BID, Pasay City Prosecutor’s Office; and (3) x x x for Grave Coercion and Grave Threats, we had no other recourse but to give you this notice to cease and desist from entering the premises of the main office[,] as well as the branch offices of [UTP] from receipt hereof for the protection and safety of the company[,] as well as to the employees and to avoid further great damages that you may cause to the company x x x.7ChanRoblesVirtualawlibrary
WHEREFORE, premises considered, the following findings are made:LA Jose’s ratiocinations are:chanRoblesvirtualLawlibrary
1. [Kemplin] is found to be a regular employee;
2. [Kemplin] is adjudged to have been illegally dismissed even as [UTP and Jersey] are held liable therefor;
3. Consequently, [UTP and Jersey] are ordered to reinstate [Kemplin] to his former position without loss of seniority rights and other privileges, with backwages initially computed at this time at [P]219,200.00;
4. The reinstatement aspect of this decision is immediately executory even as [UTP and Jersey] are enjoined to submit a report of compliance therewith within ten (10) days from receipt hereof;
5. [UTP and Jersey] are further ordered to pay [Kemplin] his salary for July 2009 of [P]20,000.00 and 13th month pay for the year 2009 in the sum of [P]20,000.00;
6. [UTP and Jersey] are assessed 10% attorney’s fee of [P]25,920.00 in favor of [Kemplin].
All other claims are dismissed for lack of merit.
[Kemplin] was able to show that he was still officially connected with [UTP] as he signed in his capacity as President of [UTP] an (sic) advertisement agreement[s] with Pizza Hut and M. Lhuillier Phils. as late as May 12, 2009. This only goes to show that [UTP and Jersey’s] theory of toleration has no basis in fact.
It would appear now, per record, that [Kemplin] was allowed to continue performing and suffered to work much beyond the expiration of his contract. Such being the case, [Kemplin’s] fixed term employment contract was converted to a regular one under Art. 280 of the Labor Code, as amended (Viernes vs. NLRC, et al., G.R. No. 108405, April 4, 2003).
[Kemplin’s] tenure having now been converted to regular employment, he now enjoys security of tenure under Art. 279 of the Labor Code, as amended. Simply put, [Kemplin] may only be dismissed for cause and after affording him the procedural requirement of notice and hearing. Otherwise, his dismissal will be illegal.
Be that as it may, [UTP and Jersey] proceeded to argue that [Kemplin] was not illegally terminated, for his termination was according to Art. 282 of the Labor Code, as amended, i.e., loss of trust and confidence allegedly for various and serious offenses x x x.
However, upon closer scrutiny, in trying to justify [Kemplin’s] dismissal on the ground of loss of trust and confidence, [UTP and Jersey] failed to observe the procedural requirements of notice and hearing, or more particularly, the two–notice rule. It would appear that [UTP and Jersey’s] x x x cease and desist letter compressed the two notices in one. Besides, the various and serious offenses alluded thereto were not legally established before [Kemplin’s] separation. Ostensibly, [Kemplin] was not confronted with these offenses and given the opportunity to explain himself.
x x x [R]espondents miserably failed to discharge their onus probandi. Hence, illegal dismissal lies.
x x x
The claim for non–payment of salary for July 2009 appears to be meritorious for failure of [UTP and Jersey] to prove payment thereof when they have the burden of proof to do so.
The same ruling applies to the claim for 13th month pay.
However, the claims for commissions, company car, laptop, office paraphernalia and personal books may not be given due course for failure of [Kemplin] to provide the specifics of his claims and/or sufficient basis thereof when the burden of proof is reposed in him.15ChanRoblesVirtualawlibrary
[A]fter the expiration of [Kemplin’s] fixed term employment, his employment from March 2, 2007 until his separation therefrom on July 30, 2009 is classified as regular pursuant to the provisions of Article 280 of the Labor Code, to wit:chanRoblesvirtualLawlibraryART. 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.The aforesaid Article 280 of the Labor Code, as amended, classifies employees into three (3) categories, namely: (1) regular employees or those whose work is necessary or desirable to the usual business of the employer; (2) project employees or those whose 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 services to be performed [are] seasonal in nature and the employment is for the duration of the season; and (3) casual employees or those who are neither regular nor project employees. Regular employees are further classified into: (1) regular employees by nature of work; and (2) regular employees by years of service. The former refers to those employees who perform a particular activity which is necessary or desirable in the usual business or trade of the employer, regardless of their length of service; while the latter refers to those employees who have been performing the job, regardless of the nature thereof, for at least a year. (Rowell Industrial Corporation vs. Court of Appeals, G.R. No. 167714, March 7, 2007)
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.
Considering that he continued working as President for UTP for about one (1) year and five (5) months and since [his] employment is not covered by another fixed term employment contract, [Kemplin’s] employment after the expiration of his fixed term employment is already regular. Therefore, he is guaranteed security of tenure and can only be removed from service for cause and after compliance with due process. This is notwithstanding [UTP and Jersey’s] insistence that they merely tolerated [Kemplin’s] “consultancy” for humanitarian reasons.
In termination cases, the employer bears the burden of proving that the dismissal of the employee is for a just or an authorized cause. Failure to dispose of the burden would imply that the dismissal is not lawful, and that the employee is entitled to reinstatement, back wages and accruing benefits. Moreover, dismissed employees are not required to prove their innocence of the employer’s accusations against them. (San Miguel Corporation vs. National Labor Relations Commission and William L. Friend, Jr., G.R. No. 153983, May 26, 2009).
In this case, [UTP and Jersey] failed to prove the existence of just cause for his termination. Their allegation of loss of trust and confidence was raised only in their position paper and was never posed before [Kemplin] in order that he may be able to answer to the charge. In fact, he was merely told to cease and desist from entering the premises. He was never afforded due process as he was not notified of the charges against him and given the opportunity to be heard. Thus, there was never any proven just cause for [Kemplin’s] termination, which makes it, therefore, illegal. x x x.17 (Underscoring supplied)chanroblesvirtualawlibrary
[Kemplin’s] presence for humanitarian reasons is purely self–serving and belied by the evidence on record. In fact, [UTP and Jersey’s] alleged document denominated as Revocation of Power of Attorney (executed on November 24, 2008 or MORE THAN one year from the expiration of [Kemplin’s] employment contract) will only confirm that [Kemplin] continued rendering work x x x beyond March 1, 2007. x x x.On January 16, 2013, the CA issued the herein assailed Resolution20 denying UTP and Jersey’s Motion for Reconsideration.21
x x x
Moreover, if indeed [Kemplin’s] relationship with UTP after the expiration of the former’s employment contract was based on [UTP and Jersey’s] mere tolerance, why then did [they] have to “dismiss” [Kemplin] based on alleged loss of trust and confidence? Clearly, [UTP’s and Jersey’s] allegation in their Position Paper (before LA Jose) that [Kemplin] was “formally given notice of his termination as in [sic] indicated on the Notice of Termination Letter dated July 20, 2009,” is already an indication, if not an admission, that [Kemplin] was, indeed, still in the employ of UTP albeit without a new or renewed contract of employment.
x x x
The validity of an employer’s dismissal from service hinges on the satisfaction of the two substantive requirements for a lawful termination. x x x [T]he procedural aspect. And x x x the substantive aspect.
Records are bereft of any evidence that [Kemplin] was notified of the alleged causes for his possible dismissal. Neither was there any notice sent to him to afford him an opportunity to air his side and defenses. The alleged Notice of Termination Letter sent by [UTP and Jersey] miserably failed to comply with the twin–notice requirement under the law. x x x
x x x
We likewise sustain the finding of the [NLRC] that [UTP and Jersey] failed to prove the existence of just cause for [Kemplin’s] termination. [UTP and Jersey’s] allegation of loss of trust and confidence was raised only in their Position Paper and was never posed before [Kemplin] in order that he may be able to answer to the charge. It is a basic principle that in illegal dismissal cases, the burden of proof rests upon the employer to show that the dismissal of the employee is for a just cause and failure to do so would necessarily mean that the dismissal is not justified.19 (Citations omitted)chanroblesvirtualawlibrary
(1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. “Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees.Prescinding from the above, UTP’s letter sent to Kemplin on July 30, 2009 is a lame attempt to comply with the twin notice requirement provided for in Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code.39
(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.
(3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment. (Underlining ours)38ChanRoblesVirtualawlibrary
Considering that Lawrence has already been fired, the belated act of LEP in attempting to show a just cause in lieu of a nebulous one cannot be given a semblance of legality. The legal requirements of notice and hearing cannot be supplanted by the notice and hearing in labor proceedings. The due process requirement in the dismissal process is different from the due process requirement in labor proceedings and both requirements must be separately observed x x x. Thus, LEP’s method of “Fire the employee and let him explain later” is obviously not in accord with the mandates of law. x x x.43ChanRoblesVirtualawlibraryClearly then, UTP was not exempted from notifying Kemplin of the charges against him. The fact that Kemplin was apprised of his supposed offenses, through the Position Paper filed by UTP and Jersey before LA Jose, did not cure the defects attending his dismissal from employment.
The Court is well aware that reinstatement is the rule and, for the exception of “strained relations” to apply, it should be proved that it is likely that, if reinstated, an atmosphere of antipathy and antagonism would be generated as to adversely affect the efficiency and productivity of the employee concerned.Considering that Kemplin’s dismissal occurred in 2009, there is much room to doubt the viability, desirability and practicability of his reinstatement as UTP’s President. Besides, as a consequence of the unsavory accusations hurled by the contending parties against each other, Kemplin’s reinstatement is not likely to create an efficient and productive work environment, hence, prejudicial to business and all the persons concerned.
Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. On one hand, such payment liberates the employee from what could be a highly oppressive work environment. On the other hand, it releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. Moreover, the doctrine of strained relations has been made applicable to cases where the employee decides not to be reinstated and demands for separation pay.45 (Citations omitted)chanroblesvirtualawlibrary
Being a managerial employee, the petitioner is not entitled to 13th month pay. Pursuant to Memorandum Order No. 28, as implemented by the Revised Guidelines on the Implementation of the 13th Month Pay Law dated November 16, 1987, managerial employees are exempt from receiving such benefit without prejudice to the granting of other bonuses, in lieu of the 13th month pay, to managerial employees upon the employer’s discretion.47 (Citation omitted)chanroblesvirtualawlibraryHence, Kemplin, who had rendered his services as UTP’s President, a managerial position, is clearly not entitled to be paid the 13th month benefit.
1Rollo, pp. 3–26.
2 Penned by Associate Justice Samuel H. Gaerlan, with Associate Justices Amelita G. Tolentino and Ramon R. Garcia, concurring; id. at 29–39.
3 Id. at 287.
4 Please see Employment Contract, id. at 161–162.
5 Id. at 263–266.
6 Id. at 159–160.
8 Id. at 149.
9 Sales Manager
10 Marketing Manager
11Rollo, pp. 165–183.
12 Please see UTP and Jersey’s Position Paper, id. at 150–158.
13 Id. at 103–113.
14 Id. at 112–113.
15 Id. at 110–112.
16 Please see the NLRC’s Decision, id. at 66–73.
17 Id. at 70–72.
18 Id. at 29–39.
19 Id. at 36–38.
20 Id. at 287.
21 Id. at 272–284.
22 Id. at 12–13.
23 Dated November 26, 2009 and March 10, 2010, respectively; id. at 117, 118.
24 Id. at 16–19.
25 252 Phil. 73 (1989).
26Rollo, p. 21.
27 Id. at 23–24.
28 Id. at 22–23.
29 Id. at 317–327.
30 Id. at 322–323; see also Acknowledgment Receipt dated March 22, 2005 issued to Kemplin by Asia International Auctioneers, Inc., id. at 232.
31 Id. at 325, citing Capili v. National Labor Relations Commission, 337 Phil. 210, 216 (1997).
32 Id., citing Employees Association of the Phil. American Life Insurance, Co. (EMAPALICO) v. NLRC, 276 Phil. 686 (1991).
33 Please see Mercado v. AMA Computer College–Parañaque City, Inc., G.R. No. 183572, April 13, 2010, 618 SCRA 218, 233, citing Montoya v. Transmed Manila Corporation, G.R. No. 183329, August 27, 2009, 597 SCRA 334, 343.
34 Please see AMA Computer College–East Rizal v. Ignacio, G.R. No. 178520, June 23, 2009, 590 SCRA 633.
35Rollo, pp. 263–266.
36 Id. at 159–160.
37 G.R. No. 201701, June 3, 2013.
38 Id., citing King of Kings Transport, Inc. v. Mamac, 553 Phil. 108, 115–116 (2007).
39 Sec. 2. Standard of due process: requirements of notice. — In all cases of termination of employment, the following standards of due process shall be substantially observed.I. For termination of employment based on just causes as defined in Article 282 of the Code:40 We note that the charge of qualified theft involving a car registered in UTP’s name was made subsequent and not prior to Kemplin’s dismissal.
(a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side;
(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and
(c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstance, grounds have been established to justify his termination.
x x x
41Chua v. National Labor Relations Commission, G.R. No. 105775, February 8, 1993, 218 SCRA 545, 548–549, citing Pepsi Cola Bottling Co. of the Phils. v. Guanzon, 254 Phil. 578, 584 (1989).
42 G.R. No. 87421, February 4, 1992, 205 SCRA 737.
43 Id. at 748.
44 G.R. No. 186002, September 19, 2012, 681 SCRA 405.
45 Id. at 412.
46 G.R No. 184520, March 13, 2013, 693 SCRA 357.
47 Id. at 382.
48 Please see Aliling v. Feliciano, G.R. No. 185829, April 25, 2012, 671 SCRA 186.
49 Please see S.C. Megaworld Construction and Development Corporation v. Engr. Luis U. Parada, G.R. No. 183804, September 11, 2013.