Cases: Moonlighting

1. Moonlighting

a. Unauthorized use of company time

Capitol Wireless, Inc. v. Balagot
G.R. No. 169016, 31 January 2007
At around 3:35 p.m. of May 9, 2000, the director of [the employer’s] Human Resource Department (HRD) saw, to his surprise, [the employee] at the Head Office at Paseo de Roxas, Makati of the [the bank]ing Corporation ([the bank]) with which [the employer] had no business relations. It was thereupon discovered that [the employee] had been rendering services to [the bank] and that since 1992, [the employee] had been concurrently employed with… a local manpower company, which assigned him to render messengerial services to [the bank] in the same year.
As [the employer] HRD director recommended the immediate termination of the services of [the employee] on the ground of grave misconduct and willful breach of trust and confidence, the HRD sent on May 10, 2000 a memorandum to [the employee] reading:
A report was received this morning from HRD for grave misconduct on your part. It was found out that you are employed with [a local manpower company]. as a motorized messenger serving their client, [the bank]ing Corp. In view of this, explain within twenty four (24) hours why no disciplinary action should be taken against you for this matter.
In an undated handwritten letter-reply, [the employee] admitted the charge against him.
An administrative hearing was thus conducted on May 18, 2000 during which [the employer] presented 1) a certification of [the employee’s] employment with [the local manpower company], signed by its president and general manager, stating that [the employee] had been assigned to [the bank] since December 8, 1992; 2) a cash voucher in favor of [the employee] issued by [the local manpower company] reflecting a loan amounting to P2,000; and 3) [the employee’s] payslip from [local manpower company] for the period April 1-15, 2000.
[The employee] admitted that simultaneously with his employment as a collector for [the employer], he had been performing messengerial duties to [the bank] on a “part time basis.”
On May 22, 2000, [the employer] informed [the employee] that he was found guilty of grave misconduct, resulting in the loss of trust and confidence in him, and that he was dismissed on even date.
[The employee] thereafter filed on August 4, 2000 a complaint for illegal dismissal against [the employer] and its president Epifanio Marquez (Marquez) before the National Labor Relations Commission (NLRC)…
By Decision of March 7, 2001, Labor Arbiter Cañizares decided in favor of [the employee] in this wise:
After careful deliberation, We are of the opinion that as far as the complainant’s working in another company while being an employee of the [the employee] is not a just cause for dismissal under the Labor Code, especially that there is no positive showing that the complainant uses the company time of one employer in his service with another or that the two employers are in competing businesses. Indeed, an employee or worker has to resort to the proper use of all his time and skills in order to survive in our country at its economic crisis. Even in America this having-double-jobs on moonshining is an accepted – even encouraged – system. On the other hand, just as companies have to be innovative if they do not desire to die, the workers should apply his imagination and judgment wisely to augment his earnings for his family.
The [the employee]s exclaimed that it is hard to believe that the complainant’s employment with [the local manning company] does not interfere with his work with them. However, a scrutiny of the record does not show that the [the employee]s has [sic] established a prima facie case against the complainant for using their company time in working with another. The [the employee]s may indeed find it “hard to believe” that the complainant has not been cheating them of company time, but unless they can show us the evidence, We cannot affirm that belief.
The Labor Arbiter thus ordered [the employer] and Marquez to jointly and severally reinstate [the employee] without loss of seniority rights and other privileges; and to pay [the employee] full backwages and 10% of the monetary award as attorney’s fees, and should [the employee] opt for separation pay in lieu of reinstatement, to give him separation pay equivalent to one-half month pay for every year of service, a fraction of six months being considered one whole year.
On [the employer’s] appeal, the NLRC reversed the Labor Arbiter’s decision, holding as follows:
There is no denying that taking on double job [sic] per se is not illegal as extra income would go a long way for an ordinary worker like herein complainant. The only limitation is where one job overlaps with the other in terms of time and/or poses a clear case of conflict of interest as to the nature of business of complainant’s two employers.
In the case at bar, the conflict of interest scenario is out of the question since [the employee] Capitol Wireless ([the employer]) business is very different from [the local manning company]. The problem, however, is as to time and performance of duty. With [the employee] [the employer] complainant works as a collector from 8:00 A.M. to 5:00 P.M. On the other hand, his job at [the local manning company] is as a messenger assigned at [the bank]. As a messenger, we do not believe that he’ll be performing his task after 5:00 P.M. as by then all private offices are closed. In fact, Bank closes at 3:00 PM. This being so, it is highly improbable that in the exercise of a performance of his work with [the local manning company], the same will not eat up or use part or portion of his official time as collector with herein [the employee]s. So that while earning his salary with [the employee] from 8:00-5:00 PM as messenger, he was also being paid as messenger by the other company. In which cases, [the employee] company has all the right and reason to cry foul as this is a clear case of moonlighting and using the company’s time, money and equipment to render service to another company. A classic case of wanting to have his cake and eat it too. A situation which we simply cannot countenance. Apropos from evidence on records it is clear that complainant was guilty of violating the company rules and regulations resulting into lost [sic] of trust and confidence. He was therefore lawfully and rightfully separated from service for cause and with due process.
The NLRC accordingly dismissed [the employee’s] complaint.
On [the employee’s] Petition for Certiorari, the Court of Appeals, by Decision16 of May 31, 2005, holding that [the employer] failed to prove that [the employee] was dismissed for just cause, reversed the decision of the NLRC and reinstated that of the Labor Arbiter. The Court of Appeals absolved [the employer’s] president Marquez of solidary liability with [the employer], however.
Its Motion for Partial Reconsideration having been denied, [the employer] filed the instant Petition for Review on Certiorari, raising the issue of “whether or not the Honorable Court of Appeals committed manifest error in holding that [the employee] was illegally dismissed, thus, totally disregarding the evidence on record, in violation of the Labor Code as amended, and the revised rules of evidence.”
In his Comment, [the employee] reiterates his argument that his job at [the local manning company] did not interfere with his job at [the employer], maintaining that he performed his tasks for [the local manning company] only after office hours. To bolster his argument, he asserts that his performance at [the employer] was always satisfactory and never went below average.
[The employer]’s evidence, consisting of, among other things, its HRD director’s report that he saw [the employee] at [the bank] at 3:35 p.m. of May 9, 2000; [the employee’s] above-stated handwritten admission; the December 8, 1992 certification of employment signed by [local manpower company]’s president and general manager; the cash voucher in favor of [the employee] for a company loan from [local manpower company]; and [the employee’s] payslip from [local manpower company] for the period April 1-15, 2000, unmistakably indicate that from December 8, 1992 to May 22, 2000, [the employee] had been using [the employer] time to perform service for another company.
[The employee]’s claim that he performed his tasks for [local manpower company] only after his office hours with [the employer] does not impress. As [the employer] argues:
Under the Rules on Evidence, specifically Section 3, Rule 131, the presumptions: “that the ordinary course of business has been followed” and “that things happened according to the ordinary course of nature and the ordinary habits of life,” are disputable presumptions that can only be overcome by clear and preponderant evidence.
In this connection, it is of general knowledge that the banking industry follows the ordinary working hours of 8:00 AM to 5:00 PM. Accordingly, an employee of a bank is expected to work from eight in the morning to five in the afternoon. And, logically, since the banking industry deals with businesses which observe the same working hours, a bank has no use for an employee who can only be of service to it after 5:00 o’clock in the afternoon.
Now, since it is presumed, until contradicted that, “the ordinary course of business has been followed,” and “things happened according to the ordinary course of nature and the ordinary habits of life,” it logically follows that [the employer] performed his duties with [the bank] during office hours – that is from 8:00 am to 5:00 pm. This presumption can be overcome only by clear and preponderant evidence. However, the records of the case will clearly show that [the employee] failed to present any proof to contradict the same, hence, the presumption stands against him. Thus, it was a highly erroneous conclusion for the Court of Appeals to have found that there was no convincing evidence to prove that [the employee] was using the company resources of [the employer] in rendering messengerial services for [the bank] x x x
In the same manner, this Honorable Court can also take judicial notice of the fact that banks, or any business establishment for that matter, close its [sic] business transactions and operations at 5:00 in the afternoon because this fact is of public/common knowledge. Thus, it is respectfully submitted that there is no need to produce evidence that indeed banks close its [sic] operations after 5:00 P.M.
In the same manner, this Honorable Court can also take judicial notice of the fact that banks, or any business establishment for that matter, close its [sic] business transactions and operations at 5:00 in the afternoon because this fact is of public/common knowledge. Thus, it is respectfully submitted that there is no need to produce evidence that indeed banks close its [sic] operations after 5:00 P.M.
x x x x
Moreover, if [the employee’s] allegation is true that indeed he was only rendering services to [the bank] after 5:00 P.M., then why was he sighted by private [the employee’s] HR director within the premises of the said bank at 3:35 pm in the afternoon?…
Furthermore, the minutes of the administrative hearing conducted by [the employer] on May 18, 2000 reflect the observations of [the employee’s] superiors about his shortcomings in the conduct of his duties as collector, to wit: failure to submit a detailed report of all collections, incomplete collections, and delayed collections. These observations, which were not refuted, detract from [the employee’s] claim that his job with [local manpower company] did not interfere with his duties at [the employer].
[The employer] having established, through substantial evidence, a prima facie case of just cause to dismiss [the employee], the burden of evidence shifted to [the employee]. [The employee] failed, however, to controvert the same. This Court is thus constrained to uphold his dismissal.
Verily, jurisprudence recognizes as a valid ground for dismissal of an employee unauthorized use of company time, as Pepsi-Cola Distributors of the Philippines, Inc. v. NLRC holds:
[An employee] cannot serve himself and [his employer] at the same time all at the expense of the latter. It would be unfair to compensate private [the employee] who does not devote his time and effort to his employer. The primary duty of the employee is to carry out his employer’s policies…, and of company vehicle, as Soco v. Mercantile Corporation of Davao holds:
. . . [the employer] avers that the damage inflicted on MERCO by his activities due to his misuse of the company vehicle during working hours did not hamper the smooth business operations of MERCO.
However, what should not be overlooked is the prerogative of an employer company to prescribe reasonable rules and regulations necessary or proper for the conduct of its business and to provide certain disciplinary measures in order to implement said rules and to assure that the same would be complied with. A rule prohibiting employees from using company vehicles for private purpose without authority from management is, from our viewpoint, a reasonable one. This regulation cannot be faulted by [the employer] because this is proper and necessary even if only for an orderly conduct of MERCO’s business. From the evidence presented, [the employer] twice used the company vehicle in pursuing his own personal interests, on company time and deviating from his authorized route, all without permission. x x x Certainly, to condone [the employer]’s own conduct will erode the discipline that an employer should uniformly apply so that it can expect compliance to the same rules and regulations by its other employees. Otherwise, the rules necessary and proper for the operation of its business, would be gradually rendered ineffectual, ignored, and eventually become meaningless.

b. Gross and habitual neglect of duty

Worldwide Papermills, Inc. v. NLRC, [the employee]
G.R. No. 113081, 12 May 1995
[The employee] was employed by [the employer] as a packer on July 8, 1982 until his services were terminated on September 28, 1991.
It appears that [the employee] incurred excessive unexcused absences from 1986 to 1989, as summarized in a memorandum dated January 22, 1990 prepared and signed by the personnel/administrative officer of [the employer] thus:
In 1986, he incurred a total of 46 days without pay including AWOL but excluding 30 days VL & SL given to him. The following year, 1987, he accumulated about 17. 5 days leave without pay including AWOL after exhausting the 30 days VL/SL with pay. Followed by 1988, in which after exhausting the 30 days leave with pay, he again accumulated 60 days leave without pay, 12 days of which AWOL. Finally, 1989 he acquired a total of 26 days leave without pay including 3 days AWOL after exhausting the 30 days leave with pay. (Please refer to attached breakdown of absences.)
Disciplined for unofficial leaves, in 1986, he was admonished, (1) month. In 1987, he was admonished, warned sternly, and suspended for one (1) week. While in 1988 for AWOL he was admonished, warned sternly and suspended for one (1) month. On Nov. 11, he was warned sternly for excessive leave without pay. Finally in 1989, he got an admonition and consequently warned sternly for AWOL. (Please refer to attached breakdown of DAM.)
[The employee] was counselled several times to improve his attendance. On April 11, 1988, he promised not to absent himself, yet, no compliance. Due to having incurred 12 days AWOL in 1988, he was supposed to be terminated based on our rule, but due to his asking reconsideration and intervention of R. Brusola, Union President he was only suspended for one (1) month. A promissory note to this effect was executed by [the employee] and witnessed by R. Brusola, stressing among others to improve his attendance in 1989; once he exceeds the VL & SL granted by the company, he accepts to be terminated; and the next time he is declared AWOL he accepts the DA of termination.(Please see attached notes for reference.)
To summarize it all, no improvement up to this date. In 1989 he has exceeded the required VL & SL given by the company and aggravated by the fact that he was disciplined for AWOL twice already for that same year. The undersigned also called the attention of R. Brusola of this in fact he even talked to [the employee] several times to improve his attendance but to no avail. (Annex “C”, Petition)
On February 2, 1990, [the employee] wrote [the employer] a letter promising to mend his ways after the personnel officer of [the employer] recommended his dismissal due to his numerous absences.
[The employee], however again incurred absences without official leave on January 2, February 20, June 1, 2 and 3, 1991. He was consequently suspended effective June 24, 1991. For the third time, [the employee] was suspended for two weeks effective July 22, 1991 up to August 4, 1991 when he incurred absences on July 5 and 8, 1991.
A week after he had served his latest suspension, [the employee] applied for sick leave covering the period August 12-18, 1991. On August 15, 1991. Ms. Belinda Luna, the Company nurse, paid [the employee] a home visit. However, he was not there. Neither was anybody at home, though the radio was on. Ms. Luna learned from [the employee]’s son that his father was moonlighting as a pedicab driver at Bayanan, Muntinlupa, market.
After [the employer] was informed of the incident, [the employee’s] application for sick leave was disapproved. Then, on Aug. 29, 1991, [the employer] issued a memorandum to [the employee] requiring him to explain within twenty-four (24) hours from receipt why no disciplinary action should be imposed upon him for his excessive absences without official leave.
In compliance therewith, [the employee] gave his answer, thus:
On September 21, 1991, [the employer] terminated the employment of [the employee]. Thus, on September 30, 1991, the latter filed a complaint for illegal dismissal, praying for reinstatement and payment of backwages…
Article 282 of the Labor Code provides the grounds for which an employer may validly dismiss an employee, among which is gross and habitual neglect by the employee of his duties.
In the case at bench, it is undisputed that [the employee] had within a span of almost six (6) years been repeatedly admonished, warned and suspended for incurring excessive unauthorized absences. Worse, he was not at home but was out driving a pedicab to earn extra income when the company nurse visited his residence after he filed an application for sick leave. Such conduct of respondent Edwin P. [the employee] undoubtedly constitutes gross and habitual neglect of duties.
In Philippine Geothermal, Inc. v. NLRC, the Court stated thus:
While it is true that compassion and human consideration should guide the disposition of cases involving termination of employment since it affects one’s source or means of livelihood, it should not be overlooked that the benefits accorded to labor do not include compelling an employer to retain the services of an employee who has been shown to be a gross liability to the employer. The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer. It should be made clear that when the law tilts the scale of justice in favor of labor, it is but a recognition of the inherent economic inequality between labor and management. The intent is to balance the scale of justice; to put the two parties on relatively equal positions. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. Justicia nemini neganda est (Justice is to be denied to none).
Our decision in Filipro, Inc. v. The Honorable Minister Blas F. Ople, et al. does not preclude [the employee’s] dismissal for, unlike in Filipro, respondent [the employee] was given notice that the next time he again exceeds his allowed vacation and sick leaves or goes on absence without official leave, he would be terminated from employment. [The employee] did not heed the warning. His dismissal from employment is, therefore, justified.

2. Burden on proof: employer

Philippine National Construction Corporation v. Mandagan
G.R. No. 160965, 21 July 2008
[The employer] hired [the employee] on December 16, 1995, as Legal Assistant, with the rank of Assistant Manager, on probationary status while she was waiting for the results of the Bar examinations. [The employee] was assigned to the corporate legal division where she performed research work, drafted legal opinions, served as a member of a management collective bargaining agreement (CBA) negotiating panel, and handled litigation, mostly labor cases. On June 16, 1996, after successfully hurdling the Bar examinations, [the employee] was issued a regular appointment by [the employer].
On June 2, 1998, [the employer] issued a memorandum to [the employee] requiring her to show cause in writing why no disciplinary action should be taken against her for committing acts violative of the [the employer’s] Code of Employee Discipline, to wit:
1. Engaging in private law practice which is in violation of Section 6(a), Section 6(b)(26) and Section 11 of the [the employer] Code of Employee Discipline;
2. Using the company’s official address as your address for your private case which is not only in violation of Section 8(A)(1) of the [the employer’s] Code on Employee Discipline but is prejudicial to the best interests of the [the employer]; and
3. Representing a client who has a pending case against [the employer] which is not only prejudicial to the interests of the company but is in violation of the ethics of your profession.
x x x
On June 4, 1998, in reply, [the employee] wrote a strongly worded memorandum stating that she took offense at the manner of service of the office memorandum. According to her, the June 2, 1998 memorandum was merely a scheme intended to terminate her from employment. She said it was sparked by the incident on March 30, 1998 in which she was seen with then [the employer’s] Corporate Comptroller [R. Ramirez], who was able to enter the [the employer] compound despite being unauthorized to do so, he having filed a constructive dismissal case against [the employer].
On June 9, 1998, [the employee] submitted another memorandum denying the charges against her, claiming that the case she handled was only an accommodation, accepted by her upon the request and authority of then [the employer’s] President [M. Nazareno] and Mr. Ramirez, and that she was on leave at every scheduled hearing of the said case. She explained that she had the distinct impression that the lawyers of the [the employer’s] Legal Division can take on accommodation cases. She cited as an example Atty. [G.  Ogan] who, appearing as counsel for [the employer’s] employee [F. Codera], was even provided with a service vehicle and considered on official time during hearings. She further explained that when a petition for the annulment of judgment was filed with the regional trial court (RTC) assailing the final and executory decision in the ejectment case in favor of Mr. Ramirez, she desisted from representing the latter. She said that she signed, as counsel of record, the petition for certiorari filed before the CA only for the purpose of terminating it. She also claimed that there was no conflict of interest between Ramirez’s labor and ejectment cases since the former was still pending resolution.
[The employer], thereafter, conducted a clarificatory hearing.
Later, [the employer], thru then [the employer’s] President and Chief Executive Officer [R. Luis], sent [the employee] a letter dated June 15, 1998 notifying her that her explanation in both memoranda and her statements during the clarificatory conference were inconsistent, unacceptable, and, by themselves, admission of the truth of the charges against her. As a consequence, her employment would be terminated effective at the close of office hours on June 19, 1998 for violations of the [the employer] Code of Employee Discipline and for loss of trust and confidence.
On October 28, 1998, [the employee] initiated a complaint for illegal dismissal against [the employer] and four (4) of its corporate officers.
[The employer] dismissed [the employee] from employment because she was found guilty of the charges against her. It found [the employee] to have engaged in private law practice in violation of Sections 6(a)(b)(26) and 11 of the [the employer’s] Code of Employee Discipline. It also found her to have used the company’s official address for her private case in violation of Section 8(A)(1) of the same Code, which is also prejudicial to its best interests. Finally, it found her to have represented a client who had a pending case against [the employer]. The pertinent sections of the Code are quoted hereunder:
SECTION 6. Conduct and Behavior
a. An employee’s conduct in the performance of his duties should be beyond reproach and free from the appearance of impropriety.
x x x
b. x x x
26) Moonlighting or rendering services for another employer without the knowledge or approval of Management.
SECTION 8. Company Property. –
A. The following acts shall constitute violation of this section:
1) Using Company property, equipment or materials for personal use or purpose.
SECTION 11. Conflict of Interest. –
a. The following act shall constitute violation of this section:
1) Engaging, participating or involving oneself, directly or indirectly, in any transaction, undertaking, or business enterprise, where such engagement, participation, or involvement is in conflict with, or is improper or undesirable in the interest of the Company.
The imposable penalties for the said offenses within a 12-month period are as follows: a) for moonlighting – a 5-day suspension for the first offense, a 15-day suspension for the second offense, and dismissal on the third offense; b) for the use of company property for personal purposes – suspension to dismissal, depending on the gravity of the offense; and c) for committing acts constituting conflict of interest – reprimand to dismissal depending on the gravity of the offense.
According to [the employer], [the employee] failed to substantiate her claim that her appearance in the ejectment case of Mr. Ramirez was upon his and former… President Nazareno’s authority and directive, since she did not present any documentary evidence to prove the same. To support its position that [the employee] was without the proper authority, it presented a handwritten note from Atty. [H. Abling], former Head of the Legal Division of [the employer], stating that her appearance was without his prior authority and clearance.
We must stress, however, that in termination cases, the burden of proof rests upon the employer to show that the dismissal of the employee is for just or authorized cause. Failure to do so would mean that the dismissal is not justified. This is consonant with the guarantee of security of tenure in the Constitution and reiterated in the Labor Code. A dismissed employee is not required to prove his innocence of the charges leveled against him by his employer. Likewise, the determination of the existence and sufficiency of a just cause is to be exercised with fairness and in good faith and after observing due process.
Thus, we agree with the CA that [the employer] failed to show by clear and convincing evidence that [the employee] was indeed guilty of moonlighting as defined under the [the employer’s] Code of Employee Discipline, i.e., rendering services for another employer without the knowledge OR approval of management. In the manner in which the rule is phrased, since the words “knowledge” and “approval” are separated by the disjunctive OR, it is evident that even knowledge alone by the management of [the employer] of the alleged moonlighting is tantamount to an implied approval and is sufficient to exonerate [the employee] from liability.
Therefore, it cannot be said that her appearance in the ejectment case of [the employer’s] Corporate Comptroller Ramirez was without the knowledge of management considering that the [former]s top officers were the ones who asked her to do so. Moreover, when she filed her application for leave of absence during one of her hearings, she specifically stated in the leave form that her absence was due to the filing of the ejectment complaint for Mr. Ramirez, and this application was approved by [the employer].
We also find the handwritten note of the former head of the Legal Division, Atty. [H. Abling], presented by [the employer] to refute [the employee’s] allegation of approval from the top management of [the employer], to be of questionable probative value in light of [the employee’s] revelation that Atty. Abling himself appeared as counsel before the Metropolitan Trial Court of Manila, Branch 3, in the criminal case for violation of Batas Pambansa Blg. 22 filed against the wife of [J.Gregorio], employee of [the employer]. From the proceedings before the LA to its pleadings before this Court, [the employer] has consistently kept silent about the matter.
It may also be mentioned that [the employee] proffered documentary evidence in the form of an exchange of correspondence showing that another member of the Legal Division, Atty. [G. Ogan], was hired by the very same Mr. Ramirez to handle his annulment case for a fee. Again, this Court notes that [the employer] tried to dodge this allegation by simply claiming that [the employee’s] “name-dragging” will not exculpate her from her misdeeds.
The CA, thus, did not err in citing Office of the Court Administrator v. Atty. M. Ladaga because the June 2, 1998 Memorandum enumerated among the violations committed by [the employee] the “private practice of law.” In the cited case, we held that “private practice of law” does not refer to an isolated court appearance but contemplates a succession of acts of the same nature habitually or customarily holding one’s self to the public as a lawyer.
As to the charge that [the employee] made personal use of company property, the only evidence submitted by [the employer] were copies of the complaint filed before the MTC, Parañaque City and copies of the pleadings and resolutions in the CA case, showing that her mailing address corresponded to the company’s address. As [the employee] pointed out, there was no proof from [the employer] as to her use of any other properties belonging to the company. It is safe to assume that [the employee] received personal mail using the address of [the employer] because, since it pertained to the same ejectment suit which the former top [the employer] officers authorized her to litigate, the handling of the said case would be more convenient. As there is no express prohibition under the [the employer] Code of Employee Discipline as to the use of the company’s address to receive personal mail, and, more importantly, there is no clear and convincing proof presented by [the employer] as to the prejudice it suffered from such [the employee]’s act, the charge of violation of the [the employer] Code of Employee Discipline, Sec. 8(A)(1) should fall.


Disclaimer: All information is for educational and general information only. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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