In February 1999, employer Heavylift, through Josephine Evangelio, informed employee Ma. Dottie Galay of her low performance and negative feedback regarding her attitude, relieving her of some duties. In August 1999, she was terminated for alleged loss of confidence.

Understandably, Galay filed an illegal dismissal case with the Labor Arbiter, also claiming unpaid service incentive leave and 13th-month pay. Heavylift argued Galay had an attitude problem, presenting the February warning letter and the termination notice.

The Labor Arbiter (LA) ruled the dismissal illegal due to lack of proof of violation and improper notice. The National Labor Relations Commission (NLRC) upheld the Labor Arbiter's decision. Heavylift's appeal to the Court of Appeals (CA) via certiorari was dismissed due to procedural errors: incomplete names and addresses, missing documents, improper verification, and lack of proper certification against forum shopping. A motion for reconsideration with a belatedly submitted board resolution was also denied.

Thus, the case reached the Supreme Court.

In Heavylift v. Court of Appeals (G.r. No. 154410, October 20, 2005; 510 Phil. 315 [First Division, Per J. Quisumbing], the Supreme Court addressed five issues: (1) whether the Court of Appeals erred in dismissing the petition on technical grounds, (2) whether "attitude problem" is a valid ground for termination, (3) if so, whether it was sufficiently proven, (4) whether procedural requirements for dismissal were met, and (5) whether the awards for service incentive pay and 13th-month pay were proper.

On the first issue, the Court found that while strict adherence to procedural rules is generally required, the greater interest of justice warranted a relaxation of the rules in this case, considering the petitioners' explanations for the technical defects were minor and the merits of the case should be heard. In other words, the petitioners involved the liberal interpretation of the rules in order to give way to merit-based justice.

Regarding the second and third issues, the Court acknowledged that an "attitude problem" detrimental to the company's work environment can be a valid ground for termination, analogous to loss of trust and confidence. However, the Court found that the petitioners failed to present substantial evidence to sufficiently prove the employee's alleged attitude problem. Mere mention of negative feedback and a prior notice letter lacking specific details and opportunity for explanation were deemed insufficient. This is because burden of proof lies with the employer to demonstrate just cause for termination.

In practice, we recommend that, in order to establish sufficient grounds to terminate the employment of an employee on grounds of "attitude problem," the evaluation sheets or assessment reports, including incident reports and other written communications proving this ground, should be compiled. It is not enough that one coworker alleges the presence of attitude problem. To reach the level of substantial proof, there must be corroborating feedback not only from coworkers in the same office, section or department but also from other offices, sections or departments.

On the fourth issue, the Court ruled that the procedural requirements for a valid dismissal were not met. The letter sent to the employee did not specify the acts leading to the intended dismissal or provide the employee an opportunity to be heard, thus failing the twin requirements of notice and hearing under existing labor laws and regulations.

For human resource practitioners, it is important to note that two notices should be sent to an erring employee. The first notice is a notification on allegations against him or her. Thereafter, the employee should be given at least five days to submitted a written response. If the written response is lacking or unsatisfactory, it is then part of management prerogative to issue a second notice, i.e., a notification to the employee of the employer's decision. Both notices are essential to due process.

Finally, on the fifth issue, the Court upheld the awards for service incentive pay and 13th-month pay, as these were properly included in the complaint's general prayer for relief, and the petitioners failed to provide evidence of prior payment. Additionally, these are factual matters where the findings of the LA and the NLRC are generally respected when supported by substantial evidence.