G.R. No. 192416 ; March 23, 2011
Grandteq Industrial Steel Products, Inc., Abelardo Gonzales, Ronald A. De Leon, Noel Aguirre, Felix Arpia, and Nick Eugenio, Petitioners, vs. Annaliza M. Estrella, Respondent.

FACTS

Petitioner Grandteq Industrial Steel Products, Inc. hired respondent Annaliza Estrella as a sales engineer on November 15, 2001. In January 2004, they entered into a Purchase/Assignment of Car Agreement where Grandteq would buy a car for Estrella, who would refund the price in installments, with Grandteq retaining ownership until full payment. When Estrella defaulted on payments in September 2004, Grandteq instructed her to leave the car at the office. She refused, claiming she had already paid a ₱50,000 downpayment. Grandteq then required her to explain her “insubordination.”
On September 17, 2004, Estrella filed a labor complaint for recovery of unpaid sales commissions, allowances, and benefits. On September 20, she filed for a leave of absence, later submitting a medical certificate recommending a three-week rest. Grandteq denied her application, but she went on leave from September 22 to October 14, 2004. On October 1, she discovered her salary for September 15-30 was not remitted. She amended her complaint to include nonpayment of salary and illegal deduction of withholding tax against Grandteq’s officers.
On October 15, 2004, when Estrella attempted to return to work, a security guard refused her entry allegedly upon orders of a company vice-president. She again amended her complaint to include illegal dismissal and demanded moral damages and attorney’s fees.
Grandteq contended Estrella was validly dismissed for: (1) abandonment of job (for taking an unapproved leave); (2) insubordination (for failing to return the car); (3) loss of trust and confidence (for allegedly negotiating personally with a client, Philex Mining, while on sick leave); and (4) for failing to attend an administrative hearing on October 29, 2004. A Notice of Termination dated November 12, 2004, cited gross and habitual neglect of duty and willful breach of trust. Grandteq denied any outstanding commissions.
The Labor Arbiter (LA) ruled in favor of Estrella, finding no just cause for termination. The LA held abandonment was negated by her filing of the complaint and her sick leave notice. The notice of termination was deemed an afterthought. The LA awarded backwages, damages, and attorney’s fees but did not specifically compute her claims for sales commissions and incentives. Both parties appealed to the NLRC.
The NLRC reversed the LA, finding Grandteq had valid grounds for dismissal (gross neglect for taking unapproved leave) but failed to comply with procedural due process. It modified the decision, ordering Grandteq to pay Estrella ₱20,000 as indemnity and remanded the case for resolution of her money claims. The award of damages and attorney’s fees stood.
Grandteq filed a petition for certiorari with the Court of Appeals. The CA reinstated the LA’s decision finding illegal dismissal and ordered the case remanded to the LA for resolution of Estrella’s claims for commissions, allowances, and other benefits.

ISSUE

Whether the acts imputed to respondent Annaliza Estrella constitute gross and habitual neglect of duty and loss of trust and confidence, providing just cause for her dismissal.

RULING

No. The Supreme Court denied the petition, affirming the CA’s reinstatement of the LA’s decision which declared Estrella’s dismissal illegal.
The Court, though generally not a trier of facts, resolved the factual issues due to conflicting findings between the LA/CA and the NLRC. It held that Grandteq failed to prove by substantial evidence that Estrella was dismissed for just cause.
1. On Loss of Trust and Confidence: Grandteq’s claim was based on Estrella’s alleged personal negotiation with Philex Mining while on sick leave. The Court found this charge unsubstantiated. Grandteq did not present any evidence, such as a sworn statement from the client, to prove this allegation. Mere accusation is not enough; loss of trust must be based on willful breach founded on clearly established facts.
2. On Gross and Habitual Neglect of Duty: Grandteq claimed Estrella abandoned her job by taking an unapproved three-week sick leave. The Court ruled this did not constitute abandonment or gross neglect. Abandonment requires a clear, deliberate, and unjustified refusal to resume employment, negated by Estrella’s immediate filing of a labor complaint. Her absence was based on a medical certificate recommending rest, and she notified the company. Her attempt to return to work on October 15 further disproved any intention to abandon her job.
3. On Procedural Due Process: The Court noted that the Notice of Termination dated November 12, 2004, indicated Grandteq had decided to terminate Estrella as early as September 22, 2004, before she could present her side. This violated the twin-notice requirement and showed the dismissal was a mere afterthought.
Consequently, the dismissal was illegal. The Supreme Court upheld the CA’s decision reinstating the LA’s award of reinstatement, full backwages, and other benefits, and the order to remand the case to the LA for the specific computation and resolution of Estrella’s claims for unpaid sales commissions, allowances, and other incentives.