Case Digest: Kulas Ideas v. Alcoseba

G.R. No. 180123: February 18, 2010




Respondents Juliet Alcoseba and Flordelinda Arao-arao were employed as sales attendants of herein petitioner KULAS Ideas & Creations (KULAS), a gift boutique owned by petitioners Gil Francis Maningo and Ma. Rachel Maningo.

As part of their duties and responsibilities, Juliet and Flordelinda were tasked to sell KULASs products, prepare weekly sales reports and assist the clerk in the monthly inventory of saleable goods.

The DOLE inspected the outlet of KULAS in Ayala Center in Cebu where Juliet and Flordelinda were assigned and found that it violated several labor standards laws.

KULAS subsequently directed Juliet and Flordelinda, by Memorandum of to explain and/or investigate an alleged inventory discrepancy which entailed the amount of P48,179.30. And it thereafter suspended Juliet and Flordelinda for seven days for gross negligence of duties and responsibilities.

Both Juliet and Flordelinda thus filed a complaint for illegal suspension and withholding of salaries.

After serving their suspension, Juliet and Flordelinda, by letter inquired with KULAS the status of their employment since they were told not to report for work until they were able to explain the discrepancies.

Based on the said report you are given 3 days to settle in full the said shortage. After which, these matters will be forwarded to the lawyer for the proper filing of criminal charges.

Finally, KULAS, by separate Memorandum required Juliet and Flordelinda to explain within 48 hours why they should not be terminated for "gross neglect of duties and responsibilities resulting to huge economic loss incurred by the company" and "dishonesty."

KULAS charged Juliet and Flordelinda before the Cebu City Prosecutors Office for estafa. The complaint was later dismissed.

Juliet and Flordelinda thereupon amended to illegal dismissal their complaint against KULAS and its owner-co-petitioners Gil Francis Maningo and Ma. Rachel Maningo at the NLRC.

Labor Arbiter Violeta Ortiz-Bantug, found for petitioners, ruling that there was no illegal dismissal.

On appeal, the NLRC, likewise held that there was no illegal dismissal. It, however, set aside the monetary award for lack of jurisdiction.

On herein respondents MR, the NLRC "partially reconsidered" its Decision by holding that respondents were illegally dismissed and they are entitled to separation pay in the amount of P20,800.00 each but without backwages. Also, wegrant them attorneys fees of ten percent (10%) of the above award, or the amount of P4,160.00.

Respondents, via certiorari, elevated the case to the Court of Appeals which, it reversed and set aside the NLRC Decision for it did not comply with the last two procedural requirements provided by law. Specifically, the employer did not conduct a hearing or conference to afford the petitioners an opportunity to present evidence on their behalf, and it likewise did not send a written notice of termination to them. Thus a new Decision is entered ORDERING private respondents to pay petitioners Juliet Alcoseba and Flordelinda Arao-arao separation pay equivalent to one (1) month pay for every year of service plus full backwages from the date of their illegal termination up to the finality of this judgment without any deduction or qualification.


Whether the employer illegally dismissed the respondents.

HELD: The decision of the Court of Appeals is sustained.


Article 282 (b) and (c) of the Labor Code provide that an employer may terminate an employee for "gross and habitual neglect by the employee of his duties" and for "fraud." In both instances, substantial evidence is necessary for an employer to effectuate any dismissal. Uncorroborated assertions and accusations by the employer do not suffice, otherwise the constitutional guaranty of security of tenure of the employee would be jeopardized.

Article 282 (b) imposes a stringent condition before an employer may terminate an employment due to gross and habitual neglect by the employee of his duties. To sustain a termination of employment based on this provision of law, the negligence must not only be gross but also habitual.

To reiterate, it must not be an ordinary list of the stocks on hand, but must contain a certification from the sales clerks that they indeed received such items for sale and display at the boutique branch where they were assigned. Worth mentioning at this point is the allegation of the respondents that upon their assumption at the Ayala Center branch, the management did not conduct an actual inventory as well as a proper turnover of stocks. This must therefore explain the lapse in the sales inventory conducted by petitioners. Verily, petitioners are guilty of contributory negligence for failure to conduct a proper turnover of stocks in the boutique upon respondents assumption therein.

In cases of termination of employees based on just causes, the law mandates the following requisites:
[1] A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain hisside.

[2] A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him.

[3] A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.
Thus a first notice informing and bearing on the charge must be sent to the employee. Maquiling v. Philippine Tuberculosis Society, Inc., G.R. No. 143384, February 4, 2005 emphasizes that the first notice must inform outright the employee that an investigation will be conducted on the charges specified in such notice which, if proven, will result in the employee's dismissal.

This notice will afford the employee an opportunity to avail all defenses and exhaust all remedies to refute the allegations hurled against him for what is at stake is his very life and limb his employment. Otherwise, the employee may just disregard the notice as a warning without any disastrous consequence to be anticipated. Absent such statement, the first notice falls short of the requirement of due process.

Instead of formally notifying respondents that they were terminating their employment as a result of the investigation, petitioners filed a criminal complaint for estafa against them. That accounts why respondents had to amend their complaint at the NLRC after realizing that they were no longer in the employ of petitioners.