Reyes-Rayel v. Philippine Luen Thai Holdings

DEL CASTILLO, J.:

The law is fair and just to both labor and management. Thus, while the Constitution accords an employee security or tenure, it abhors oppression to an employer who cannot be compelled to retain an employee whose continued employment would he patently inimical to its interest. This Petition for Review on Certiorari 1 assails the July IR, 2006 Decision 2 or the Court of Appeals (CA) in CJ\\-G.R. SP No. 86937, which (I) reversed the National Labor Relations Commission (NLRC) March 23, 2004 Resolution3 and in effect, its July 21, 2004 4 Resolution as well, (2) declared petitioner Flordeliza Maria Reyes-Rayel's (petitioner) dismissal from employment valid, and (3) ordered respondents Philippine Luen Thai Holdings, Corp. (PLTHC)/L&T International Group Phils., Inc. (L&T) (respondents) to pay petitioner an amount equivalent to three months salary pursuant to the termination provision of the employment contract.

Factual Antecedents In February 2000, PLTHC hired petitioner as Corporate Human Resources (CHR) Director for Manufacturing for its subsidiary/affiliate company, L&T. In the employment contract, 5 petitioner was tasked to perform functions in relation to administration, recruitment, benefits, audit/compliance, policy development/ structure, project plan, and such other works as may be assigned by her immediate superior, Frank Sauceda (Sauceda), PLTHC's Corporate Director for Human Resources. On September 6, 2001, petitioner received a Prerequisite Notice 6 from Sauceda and the Corporate Legal Counsel of PLTHC, Ma. Lorelie T. Edles (Edles), which reads: This has reference to your failure to perform in accordance with management directives in various instances, which collectively have resulted in loss of confidence in your capability to promote the interests of the Company.

The most deleterious to the Company has been your pronouncements against the Human Resource Information System (HRIS) or HR2 Program, a corporate initiative that is at the core and is crucial to the enhancement of personnel management for the global operations of the Company. On numerous occasions, in the presence of colleagues and subordinates, you made statements that serve to undermine the Company's efforts at pursuing the HR2 Program. You ought to have realized that when leveled by an officer of your rank, no less than a Director of the Corporate Human Resources Division, such remarks are highly inflammatory and their negative impact is magnified.

Just as flagrant is your inability to incite collaboration and harmony within the Corporate Human Resources Division. Instead, colleagues and subordinates complain of your negative attitude towards the Company, its officers and people. You have established notoriety for your temper and have alienated most members of your division.

You ought to have realized that when exhibited by an officer of your rank, no less than a Director of the Corporate Human Resources Division, poor interpersonal skills and the lack of moral suasion are extremely damaging. The foregoing have, in fact, manifested in your own unsatisfactory performance rating, and in the departure of promising employees who could not work with you. In view of the above, we afford you the opportunity to submit your written reply to this memorandum within forty-eight (48) hours from its receipt.

Failure to so submit shall be construed as waiver of your right to be heard. Consequently, the Company shall immediately decide on this matter. x x x 7 In petitioner's written response 8 dated September 10, 2001, she explained that her alleged failure to perform management directives could be attributed to the lack of effective communication with her superiors due to malfunctioning email system.

This caused her to miss certain directives coming from her superiors and likewise, for her superiors to overlook the reports she was submitting. She denied uttering negative comments about the HR2 Program and instead claimed to have intimated her support for it. She further denied causing disharmony in her division.

Petitioner emphasized that in June 2001, she received a relatively good rating of 80.2% in her overall performance appraisal 9 which meant that she displayed dependable work level performance as well as good corporate relationship with her superiors and subordinates. In a Termination Notice 10 dated September 12, 2001, respondents, through Sauceda and Edles, dismissed petitioner from the service for loss of confidence on her ability to promote the interests of the company. This led petitioner to file a Complaint 11 for illegal dismissal, payment of separation pay, 13th month pay, moral and exemplary damages, attorney's fees, and other unpaid company benefits against respondents and its officers, namely, Sauceda, Edles and Willie Tan (Tan), the Executive Vice-President of PLTHC.

Proceedings before the Labor Arbiter In her Position Paper, 12 petitioner argued that her dismissal was without valid or just cause and was effected without due process. According to her, the causes for her dismissal as stated in the Prerequisite Notice and Notice of Termination are not proper grounds for termination under the Labor Code and the same do not even pertain to any willful violation of the company's code of discipline or any other company policy. Even the alleged loss of confidence was not supported by any evidence of wrongdoing on her part.

She likewise claimed that due process was not observed since she was not afforded a hearing, investigation and right to appeal as per company procedure for disciplining employees. Furthermore, respondents were guilty of violating the termination provision under the employment contract which stipulated that employment after probationary period shall be terminated by giving the employee a three-month notice in writing or by paying three months salary in lieu of notice. Petitioner also accused respondents of having acted in bad faith by subjecting her to public humiliation and embarrassment when she was ordered to immediately turn over the company car, vacate her office and remove all her belongings on the same day she received the termination notice, in full view of all the other employees.

Respondents, on the other hand, claimed that they have a wide discretion in dismissing petitioner as she was occupying a managerial position. They claimed in their Position Paper 13 that petitioner's inefficiency and lackadaisical attitude in performing her work were just and valid grounds for termination. In the same token, her gross and habitual neglect of duties were enough bases for respondents to lose all their confidence in petitioner's ability to perform her job satisfactorily.

Also, petitioner was accorded due process as she was furnished with two notices - the first requiring her to explain why she should not be terminated, and the second apprising her of the management's decision to terminate her from employment. Further in their Reply 14 to petitioner's position paper, respondents enumerated the various instances which manifested petitioner's poor work attitude and dismal performance, to wit: 1) her failure to perform in accordance with management directives such as when she unreasonably delayed the hiring of a Human Rights and Compliance Manager; failed to establish communication with superiors and co-workers; failed to regularly update Sauceda of the progress of her work; requested for reimbursement of unauthorized expenditures; and, gave orders contrary to policy on the computation of legal and holiday pay; 2) her negative pronouncements against the company's program in the presence of colleagues and subordinates; 3) her inability to incite collaboration and harmony within her department; 4) her negative attitude towards the company, its officers and employees; and 5) her low performance appraisal rating which is unacceptable for a top level personnel like herself.

Exchange of emails, affidavits and other documents were presented to provide proof of incidents which gave rise to these allegations. Respondents also asserted that the procedure laid down in the company's code of discipline, which provided for the mandatory requirements of notice, hearing/investigation and right to appeal, only applies to rank and file, supervisory, junior managerial and department managerial employees and not to petitioner, a CHR Director, who plays a key role in these termination proceedings. Further, the three-month notice for termination, as written in the employment contract, is only necessary when there is no just cause for the employee's dismissal and, therefore, not applicable to petitioner.

Respondents then disputed petitioner's money claims and also sought the dropping of Sauceda, Edles and Tan from the complaint for not being real parties in interest. In her rejoinder, 15 petitioner stood firm on her conviction that she was dismissed without valid cause by presenting documentary evidence of her good performance. Further, she insisted that she was dismissed for reasons different from those mentioned in the Prerequisite Notice and Notice of Termination, both of which did not state gross and habitual neglect of duties as a ground.

She also construed respondents' act of offering her a settlement or compensation right after her termination as their acknowledgement of the illegal act they committed against her. Moreover, petitioner argued that the company policies on procedural due process apply to all its employees, whether rank and file or managerial. In a Decision 16 dated October 21, 2002, the Labor Arbiter declared petitioner to have been illegally dismissed.

It was held that petitioner cannot be charged with undermining the HR2 Program of the company since evidence was presented to show that she was already divested of duties relative to this program. Also, respondents' accusation that petitioner caused disharmony among colleagues and subordinates has no merit as there was ample proof that petitioner was in constant communication with her co-workers through official channels and email. Further, the Labor Arbiter theorized that petitioner's performance rating demonstrated a passing or satisfactory grade and therefore could not be a sufficient and legitimate basis to terminate her for loss of trust and confidence.

Moreover, petitioner cannot be dismissed based merely on these vague offenses but only for specific offenses which, under the company's code of conduct, merit the penalty of outright dismissal. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring that complainant was illegally dismissed by respondent corporation, and the latter is hereby directed to reinstate complainant to her former position and pay her full backwages and benefits computed below, as follows: A. Backwages September 12, 2001 to October 21, 2002 1. Salaries and Wages P80,000 x 13.30 months = P1,064,000.00 2. 13th month pay P1,064,000.00 / 12 = 88,666.67 3. VL P80,000 / 26 x 10 days = 34,102.56