G.R. No. 171303 - Diaz vs. Encanto

Elizabeth L. Diaz has been employed with the University of the Philippines (U.P.) since 1963 and was an associate professor in 1987.
During the second semester of Academic Year (AY) 1987-1988, she was on a full-time load, teaching 12 units, and after 2–3 weeks, she applied for a sick leave effective November 23, 1987 until March 1, 1988.
Upon her return on March 2, 1988, she submitted a Report for Duty Form to confirm her resumption of duty.

On May 3, 1988, Diaz filed a letter-application with the Office of the President, seeking sabbatical leave with pay for one year (June 1988 to May 1989) to “rest, renew and study.”
Cecilia Lazaro, Chair of the Broadcast Department, initially recommended granting the sabbatical but later advised that Diaz be approved for any leave of absence for which she qualified.
Diaz’s letter indicated her unwillingness to teach during the period, and due to previous experience when she had dropped her courses, Lazaro removed her name from the final class schedule for the first semester of AY 1988-89.
The removal of her name, however, was juxtaposed by the fact that Diaz received her salary for June 1988, suggesting that her sabbatical might have been approved.
Respondents, including Dean Encanto and officials Tabujara and Abad, exchanged internal communications and recommendations regarding her application.
Encanto referred the application for further review by the Secretary of U.P., and later, her recommendation and a Reference Slip were transmitted to higher authorities.
With the delay in resolution, Encanto requested that Diaz’s salary be put on hold effective July 1, 1988; as a consequence, her name was deleted from the payroll from September 1988 to January 1989.

On July 4, 1988, respondent Tabujara recommended granting Diaz a leave without pay to facilitate hiring a substitute teacher, and on July 8, 1988, Abad requested Diaz to provide written background information regarding the delay.
The Academic Policy Coordinating Committee (APCC) of U.P. reviewed her case on July 21, 1988, and Diaz was instructed to follow reporting procedures to regularize her status.
Diaz later taught in the second semester of AY 1988-89; however, due to her refusal to submit the Report for Duty Form, she was unable to claim her salary for that period.
On January 3, 1989, Diaz filed a complaint with the Office of the Ombudsman alleging violations regarding the requirement of the Report for Duty Form as a prerequisite to salary payment.
The Ombudsman dismissed her complaint on May 4, 1989, affirming that she was on leave without pay for the first semester and that the documentary requirements were proper.
Subsequently, Diaz filed petitions before the Supreme Court (G.R. Nos. 88834 and 89207) and initiated a separate complaint before the Regional Trial Court (RTC) for damages, alleging that she was unjustly deprived of her salaries, along with moral, exemplary damages, and attorney’s fees.

In its April 17, 1996 Decision, the RTC ruled in favor of Diaz by awarding her compensation for unpaid salaries along with moral, exemplary damages, and attorney’s fees.
On September 17, 1996, the RTC amended its ruling by absolving respondent Encanto of liability, holding that her role was merely recommendatory and not the cause of unreasonable delay.
Diaz and the other respondents appealed the RTC decision to the Court of Appeals.

The Court of Appeals, in its April 28, 2005 Decision, reversed the RTC’s award of moral, exemplary damages, and attorney’s fees and directed U.P. to pay Diaz a substantially lower sum, specifically P21,879.64 as unpaid salaries and allowances.
The Court of Appeals found no evidence of negligence or bad faith by the respondents, emphasizing that sabbatical leave is a privilege and that any delay in processing was partly attributable to Diaz’s own recalcitrance regarding documentary requirements.
Diaz filed a Motion for Reconsideration, which was subsequently denied on January 20, 2006.
The central issue became whether the allegedly wrongful actions—denial of the sabbatical leave and withholding of salaries—were carried out in bad faith.

Whether or not the respondents acted in bad faith in processing and denying Diaz’s sabbatical leave application.

The determination of malicious intent versus administrative delay based on established internal procedures.

Whether the withholding of Diaz’s salaries was justified due to her non-compliance with documentary requirements, particularly the Report for Duty Form.
Whether sabbatical leave is a right or merely a privilege within the University’s administrative framework.
Whether the delay in resolving her sabbatical leave application was due to respondents’ negligence or was attributable in part to Diaz’s own actions.
Whether the proper computation of unpaid salaries was disregarded by the lower courts.