Case Summary (G.R. No. 227718)
Applicable Law
Under the 1987 Philippine Constitution (Art. XIII, Sec. 3[4]) and Article 297 of the Labor Code, an employer may terminate for just causes—serious misconduct, gross neglect, fraud, breach of trust, or analogous grounds—and must observe procedural due process (notice of grounds, opportunity to explain, hearing, and notice of dismissal). Constructive dismissal, by contrast, is an involuntary resignation resulting from unbearable, discriminatory, or hostile conditions rendering continued employment impossible; it is regarded as illegal dismissal and requires proof of wrongful circumvention of substantive or procedural due process.
Procedural History
The Labor Arbiter dismissed Lagamayo’s illegal‐dismissal complaint. The NLRC affirmed but modified the award, granting his unpaid wages and benefits from March 11, 2011 to July 11, 2011 (₱96,000). The CA held that he was constructively dismissed yet dismissed for just cause (loss of trust and confidence), and denied relief. He petitioned this Court under Rule 45.
Issues
- Whether Lagamayo suffered constructive dismissal.
- Whether he is entitled to reinstatement or separation pay and backwages beyond the period awarded by the NLRC.
Court’s Analysis: Just Cause vs. Constructive Dismissal
The Court stressed that just‐cause termination and constructive dismissal are mutually exclusive: just cause presupposes an actual dismissal for employer‐proved grounds under Article 297, whereas constructive dismissal is an illegal circumvention of due process. Once an employer proves a legitimate ground (e.g., gross neglect or breach of trust), its act is a valid exercise of management prerogative, not constructive dismissal.
Findings on Just Cause: Breach of Trust and Confidence
Lagamayo, as workshop supervisor, held a position of trust over valuable materials (gold). The employer proved he failed to prevent recurring thefts (total loss ₱533,500) and other infractions. Jurisprudence requires only substantial evidence of managerial breach to justify loss of trust. His acquittal in related criminal prosecution did not negate this lighter evidentiary standard. LA and NLRC findings that his negligence constituted loss of confidence were affirmed, and the CA’s concurrence underscores their finality.
Findings on Constructive Dismissal Claim
Preventive suspension pending investigation is permitted for up to 30 days; the employer must conclude investigation or extend suspension with continued pay. Lagamayo’s investigation was completed within the 30‐day period (February 8 to March 11, 2011), with a March 1 hearing finding him liable. There was no indefinite suspension nor bad‐faith extension; thus no basis for constructive dismissal. His failure to show hostile or coercive conditions leaves his constructive‐dismissal claim unsubstantiated.
Voluntary Severance thr
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Facts and Antecedents
- Cullinan Group, Inc. (CGI), a jewelry producer, employed petitioner Peter Angelo N. Lagamayo as workshop supervisor on April 2, 2007, with P16,100 basic salary, P7,900 non-tax allowance, P500 communication allowance, 13th-month pay, and cash equivalent of unused leave credits.
- In 2011, CGI detected violations under petitioner’s supervision: gambling, alcohol consumption, and theft of minute quantities of gold, causing an alleged loss of P533,500.
- On February 8, 2011, CGI placed petitioner on preventive suspension pending investigation.
- A Notice to Explain (February 11, 2011) charged petitioner with breach of trust, dishonesty, improper conduct, and negligence. He denied all charges in writing on February 18, 2011.
- In a March 1, 2011 hearing, petitioner was found guilty by CGI; he requested to resign to keep his record clean. CGI agreed to accept his resignation but refused separation pay due to proven misconduct.
- Petitioner sought lifting of suspension (March 3) and submitted a resignation letter (March 11) asking for unpaid wages, benefits, and separation pay. CGI called for his resignation letter on April 4, 2011.
Procedural History
- July 11, 2011: Petitioner filed before the Labor Arbiter (LA) a complaint for illegal dismissal, backwages, and separation pay in lieu of reinstatement, alleging constructive dismissal.
- February 29, 2012: LA dismissed petitioner’s complaint.
- July 31, 2012: NLRC affirmed dismissal but awarded petitioner unpaid wages and benefits from March 11 to July 11, 2011 (P96,000).
- September 18, 2012: NLRC denied petitioner’s motion for reconsideration.
- Court of Appeals (CA) in CA-G.R. SP No. 127383 denied petitioner’s appeal, held he was constructively dismissed with just cause (loss of trust), and affirmed NLRC’s ruling except for the separation pay. CA denied reconsideration (January 29 and October 17, 2016).
- November 11, 2021: Supreme Court resolved a petition for review under Rule 45.
Issues
- Whether the CA committed grave abuse of discretion in ruling that petitioner was dismissed for just cause despite finding constructive dismissal.
- Whether petitioner was constructively dismissed in the first place.
- Whether petitioner is entitled to reinstatement, separation pay, and backwages.
Legal Principles on Just Cause and Constructive Dismissal
- Under Article 297 (formerly Art. 282) of the Labor Code, valid just causes for actual dismissal include serious misconduct, gross neglect of duties, fraud or willful breach of trust,