Case Summary (G.R. No. 187589)
Facts of the Case
SHS, established under Philippine laws and registered with the Philippine Economic Zone Authority, hired respondent Manuel F. Diaz as a Manager for Business Development on a probationary basis from July 18, 2005, to January 18, 2006. Respondent was tasked with duties related to sales and marketing, with a compensation of P100,000 monthly. Throughout his employment, communication about work performance occurred primarily via email or phone, given petitioners' frequent absences.
Employment Performance and Resignation
The petitioners expressed dissatisfaction over respondent's poor performance, noting insufficient sales contributions. On November 30, 2005, after his salary for the period of November 16 to 30 was withheld by the petitioners, respondent submitted a letter of resignation citing illegal withholding of wages. A meeting occurred between respondent and Hartmannshenn following his resignation, where the latter expressed disappointment with various aspects of respondent's performance.
Filing of Complaint
On December 9, 2005, respondent filed a complaint alleging illegal dismissal and non-payment of wages, including 13th month pay, damages, and attorney’s fees. The Labor Arbiter found that respondent was constructively dismissed due to unlawful withholding of his salary, ordering his reinstatement and payment of backwages.
National Labor Relations Commission Ruling
The NLRC overturned the Labor Arbiter's decision, asserting that withholding respondent's salary was a valid management prerogative. The NLRC ruled that the respondent's resignation was voluntary and dismissed claims for additional wages and damages.
Court of Appeals Decision
The Court of Appeals disagreed with the NLRC, stating that withholding wages was not a valid exercise of management prerogative and noted the absence of substantial evidence supporting the petitioners' claims regarding respondent's absenteeism. It ruled that respondent’s resignation was not voluntary due to the circumstances of salary withholding and ordered separation pay and backwages, refraining from ordering reinstatement due to strained relations.
Legal Issues Presented
The petitioners raised several issues, primarily centered on whether the Court of Appeals erred in its reversal of the NLRC's decision regarding the legal basis for withholding wages, the constructive dismissal of respondent, and the personal liability of the individual petitioners.
Supreme Court's Ruling
The Supreme Court held that the findings of the CA and LA were in line with evidence that the wage withholding violated Article 116 of the Labor Code. The Court differentiated management pr
...continue readingCase Syllabus (G.R. No. 187589)
Case Overview
- Court: Supreme Court of the Philippines
- Date: October 13, 2010
- Case Number: G.R. No. 185814
- Decision: Petitioners' appeal to annul the Court of Appeals' decision was partially affirmed.
Parties Involved
- Petitioners:
- SHS Perforated Materials, Inc. (Corporation)
- Winfried Hartmannshenn (President and German National)
- Hinrich Johann Schumacher (Treasurer and German National)
- Respondent:
- Manuel F. Diaz (Manager for Business Development)
Background of the Case
- SHS is a start-up corporation registered with the Philippine Economic Zone Authority.
- Winfried Hartmannshenn oversees the company's daily operations, while Hinrich Johann Schumacher is authorized to manage financial obligations.
- The company utilizes the European Chamber of Commerce of the Philippines (ECCP) for payroll management.
Employment Details
- Respondent was employed as a probationary Manager for Business Development from July 18, 2005, to January 18, 2006, with a monthly salary of PHP 100,000.00.
- His job entailed various sales and marketing functions, requiring him to frequently interact with clients and attend events.
Circumstances Leading to Resignation
- Complaints arose regarding respondent's performance, with allegations of poor sales output.
- Hartmannshenn expressed dissatisfaction with Diaz's performance, leading to a strained relationship.
- Respondent’s salary was withheld by the petitioners, prompting him to