Serious Misconduct 101

1. Concept

Serious misconduct must be grave and aggravated in character.

The ground of serious misconduct tends to be the most commonly cited just cause for termination. Curiously, it also happens to be most frequently misapplied. This due to the fact that most labor cases involve simple or ordinary – and not serious – misconduct. In these cases, the penalty should have been lower than the ultimate one, dismissal.

To be clear, Labor Law requires that the serious misconduct should not be trivial or unimportant. The nature of the violation must be grave and aggravated in character as to justify the dismissal from employment. Otherwise stated, a simple and ordinary misconduct is not sufficient to be considered a serious misconduct.

•••

CASE STUDY

Imasen Philippine Manufacturing Corporation v. Alcon

G.R. No. 194884, 22 October 2014

[The employees-Welders- were caught engaging in sexual intercourse on a piece of carton (used as a mattress) by the security guard on duty who reported it to the management via a report. After following due process, the employer dismissed the employees.]

The just causes for dismissing an employee are provided under Article 282 (now Article 296) of the Labor Code. Under Article 282(a), serious misconduct by the employee justifies the employer in terminating his or her employment.

Misconduct is defined as an improper or wrong conduct. It is a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. To constitute a valid cause for the dismissal within the text and meaning of Article 282 of the Labor Code, the employee’s misconduct must be serious, i.e., of such grave and aggravated character and not merely trivial or unimportant.

Additionally, the misconduct must be related to the performance of the employee’s duties showing him to be unfit to continue working for the employer. Further, and equally important and required, the act or conduct must have been performed with wrongful intent.

To summarize, for misconduct or improper behavior to be a just cause for dismissal, the following elements must concur: (a) the misconduct must be serious; (b) it must relate to the performance of the employee’s duties showing that the employee has become unfit to continue working for the employer; and (c) it must have been performed with wrongful intent.

The [employees’] infraction amounts to serious misconduct within the terms of Article 282 (now Article296) of the Labor Code justifying their dismissal.

Dismissal situations (on the ground of serious misconduct) involving sexual acts, particularly sexual intercourse committed by employees inside company premises and during workhours, are not usual violations and are not found in abundance under jurisprudence. Thus, in resolving the present petition, we are largely guided by the principles we discussed above, as applied to the totality of the circumstances that surrounded the [employees’] dismissal.

In other words, we view the [employees’] act from the prism of the elements that must concur for an act to constitute serious misconduct, analyzed and understood within the context of the overall circumstances of the case…

In addressing the situation that we are faced with in this petition, we determine whether the employer validly exercised its prerogative as employer to dismiss the respondents-employees who, within company premises and during work hours, engaged in sexual intercourse…

x x x

Sexual acts and intimacies between two consenting adults belong, as a principled ideal, to the realm of purely private relations. Whether aroused by lust or inflamed by sincere affection, sexual acts should be carried out at such place, time and circumstance that, by the generally accepted norms of conduct, will not offend public decency nor disturb the generally held or accepted social morals. Under these parameters, sexual acts between two consenting adults do not have a place in the work environment. (Emphasis supplied.)

•••

As discussed in the Imasen case, the following are the requirements for misconduct or improper behavior to be a just cause for dismissal as a serious misconduct:

1) The misconduct must be serious;

2) It must relate to the performance of the employee’s duties showing that the employee has become unfit to continue working for the employer; and,

3) It must have been performed with wrongful intent.

While ordinary misconduct may not amount to a just cause, its continued repetition could be tantamount to a serious misconduct. “Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct, and ability separate and independent of each other. A series of irregularities when put together may constitute serious misconduct, which under Article [296] of the Labor Code, is a just cause for dismissal.” (Piedad v. Lanao Del Norte Electric Cooperative, Inc., G.R. No. 73735, 31 August 1987)

This follows the doctrine of totality of infractions, which states that the “totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring employee.” (Alvarez v. Golden Tri Bloc, Inc., G.R. No. 202158, 25 September 2013)

The reason being is that “offenses committed by [the employee] should not be taken singly and separately. Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct and ability separate and independent of each other. While it may be true that [the employee] was penalized for his previous infractions, this does not and should not mean that his employment record would be wiped clean of his infractions. After all, the record of an employee is a relevant consideration in determining the penalty that should be meted out since an employee’s past misconduct and present behavior must be taken together in determining the proper imposable penalty. Despite the sanctions imposed upon [the employee], he continued to commit misconduct and exhibit undesirable behavior onboard. Indeed, the employer cannot be compelled to retain a misbehaving employee, or one who is guilty of acts inimical to its interests. It has the right to dismiss such an employee if only as a measure of self-protection. (Ibid.)

Thus, the employer may factor in previous misconduct in determining the appropriate and perhaps more serious penalty against an erring employee.

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CASE STUDY

Alvarez v. Golden Tri Bloc, Inc.

G.R. No. 202158, 25 September 2013

[The employee – an Outlet Supervisor – was dismissed after repeated violations and misconduct for which he had already been disciplined.]

The said evidence shows at least three (3) different offenses – ranging from tardiness, negligence in preparing inventory to dishonesty relating to his timecard – repeatedly committed by the [employee] over the years and for which he has been constantly disciplined. On July 4, 2003, the [employer] was found guilty of asking an employee to punch-in his time card for him. He was suspended for 45 days with a warning that a recurrence of the same act will merit dismissal from service. He, however, disregarded this incident and the corrective intention of disciplinary action taken on him when he repeated the same act on May 27, 2009.

A repetition of the same offense for which one has been previously disciplined and cautioned evinces deliberateness and willful intent; it negates mere lapse or error in judgment. While it may be assumed that the [employee] has become stubborn or has forgotten the 2003 episode, it should not work to his advantage, because either cause demonstrates his indifference to GTBI’s policies on employees’ conduct and discipline. Based on this consideration, taken together with his numerous other offenses, GTBI had compelling reasons to conclude that the [employer] has become unfit to remain in its employ.

x x x

The NLRC and the CA were thus correct in applying the totality of infractions rule and in adjudging that the [employee’s] dismissal was grounded on a just and valid cause. The standards of procedural due process were likewise observed in effecting the [employee’s] dismissal. As ascertained by the NLRC and CA, GTBI sent the [employee] a Notice to Explain dated May 27, 2009. On May 29, 2009, he reported to GTBI’s office and submitted his written explanation as shown in his letter bearing the same date. On August 26, 2009, he received GTBI’s Notice of Termination dated June 23, 2009. (Emphasis supplied.)

•••

The employee’s fitness for employment should not be adjudged per incident. Thus, “it goes without saying that the record of an employee is a relevant consideration in determining the penalty that should be meted out on him.” (St. Luke’s Medical Center v. Quebral, G.R. No. 193324, 23 July 2014)

More so, the employer’s compassion extended to the employee for several violation – does not entitle an employee to demand as a matter of right that similar compassion be afforded for succeeding violations. In one case, the employee argued that his previous violations should not have been considered in his dismissal and even further argued that the employer should have been more compassionate.

As stated by the Supreme Court, “it goes without saying that the record of an employee is a relevant consideration in determining the penalty that should be meted out on him. As correctly argued by [the employer], fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct and ability separate and independent of each other. Thus, we cannot oblige [the employer] to disregard altogether [the employee’s] previous violations when determining the penalty to be imposed on him for his latest offense as if it was the first time he violated company rules. Moreover, [the employee] has no vested right to [the employer’s] compassion. Just because [the employer] was compassionate to him numerous times in the past when he violated company rules does not give him the right to demand the same compassion this time on the ground of social justice. As this Court ruled, social justice and equity are not magical formulas to erase the unjust acts committed by the employee against his employer. (Ibid.)

There is no specific list of actions or omissions constituting serious misconduct. This is perhaps one of the main reasons why this ground is often misapplied. Jurisprudence repeatedly instructs that serious misconduct is to be adjudged on a case-to-case basis. What is a serious misconduct to one company may not be in another business.

2. Standards

DOLE D.O. 147-15 provides for the standards.

To be a valid ground for termination, the following must be present:

1) There must be misconduct;

2) The misconduct must be of such grave and aggravated character;

3) It must relate to the performance of the employee’s duties; and

4) There must be showing that the employee becomes unfit to continue working for the employer.

The following discusses each requirement.

a. Misconduct

1^st Requisite: There must be misconduct.

Misconduct refers to “the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character and implies wrongful intent and not mere error in judgment.” (Section 4 [o], Rule I-A, DOLE D.O. 147-15)

To be a ground for dismissal, ordinary misconduct will not do – it has to be a serious misconduct.

b. Grave and aggravated character

2^nd Requisite: The misconduct must be of such grave and aggravated character.

•••

CASE STUDY

Radio Communications of the Philippines (RCPI) v. Villaflores

G.R. Nos. 113178 and 114777, 05 July 1996.

[Background: An employee who uttered invectives against his superior after nearly being physically assaulted by the latter was held to have been guilty of minor misconduct only, and not serious misconduct.]

The issue in these two consolidated [cases] is whether or not the Radio Communications of the Philippines, Inc. (RCPI) illegally terminated the services of its Assistant Vice-President for Management Services, [the employee], on the grounds of gross misconduct and loss of confidence.

[The employee] was employed by the RCPI on July 1, 1975. A certified public accountant (CPA), who finished the law course while working, he also took units in Master of Laws at the University of Sto. Tomas. In the course of his employment, he became the Internal Auditor, Acting Assistant Vice-President for Finance and Comptroller, and Assistant Vice-President for Management Services…

x x x

German Bernardo Mattus was hired by RCPI on July 2, 1990 as manager of its Management Information System Department. He was under the division of [the employee] but he was required to report directly to Norberto T. Braga, the Executive Vice-President (EVP) for Corporate Services.

On October 29, 1990, Mattus posted a copy of an invitation to a computer seminar on the bulletin board without having sought the permission of [the employee]. When the latter arrived and saw the poster, he asked his secretary, Lydia Henares, to remove it from the bulletin board. Lydia Henares followed [the employees’] order. When Mattus learned of its removal, he took the poster from Lydia Henares and sought out [the employee].

Mattus found [the employee] at work in the computer room. He said, “Ano ba ito, Danny?” [the employee] replied, “Hindi puede,” at the same time getting a stapler with the apparent intention of throwing it at Mattus. When a co-employee grabbed the stapler from [the employee], the latter snatched the poster from Mattus, tore and crumpled it, and threw the pieces at Mattus but missed. Had it not yet been for the timely intervention of the other employees present, the two would have assaulted each other. As Mattus was leaving the room, Villaflores shouted invectives such as “bullshit ka,” “baboy ka” and “gago ka” at him.

On the same day, Mattus lodged a complaint against [the employee] for: (a) conduct unbecoming of an assistant vice-president of the company; (b) threatening a subordinate with physical injury, and (c) shouting invectives at a subordinate in the presence of the Management Services staff.

The next day, EVP Braga asked [the employee] to explain why no administrative action should be taken against him “for provoking and instigating a fight within company premises, using abusive and dirty language directed to your Manager, and for threatening the MIS Manager.”

In his explanation, [the employee] claimed that after he had instructed his secretary to remove all the publications posted on the bulletin board, Mattus rushed into the computer room and shouted at the top of his voice, “Ano ito, Danny?” Mattus, who was bigger than [the employee], allegedly attempted to attack him but was prevented by co-employees from doing so. [The employee] admitted having uttered “shit, baboy” but these were mere expressions of disgust at and by way of objecting to the imminent attack against his person and dignity.

The RCPI management scheduled a formal investigation and summoned several employees who witnessed the incident. Both parties, however, agreed to forego the “trial-type” investigation, opting instead to submit their formal explanations. Mattus submitted his explanation on November 13, 1990 while [the employee] submitted his on November 26, 1990.

On December 10, 1990, RCPI, through EVP Braga, placed [the employee] under preventive suspension, at the same time giving him a final chance to explain further “why no drastic administrative action should be taken against him for serious misconduct” and “for acts unbecoming of a company official.” On December 13, 1990, [the employee] submitted his final explanation.

After investigation and personally evaluating all the evidence presented by both parties, EVP Braga issued a memorandum dated January 18, 1991 advising [the employee] of the termination of his services effective December 10, 1990 on grounds of gross misconduct unbecoming of a company official in gross violation of Rules 52, 53 and 55 of the Company Rules and Regulations. As a consequence, the company had lost trust and confidence in him.

On December 19, 1990, several of [the employees’] co-employees wrote Braga a letter stating that the penalty imposed upon [the employee] appeared “to be not commensurate and too harsh a penalty for the alleged offense committed” and praying that the penalty imposed upon [the employee] be reconsidered, but the plea was ignored.

x x x

… Labor Arbiter Amansec rendered a decision [stating that]…  “[the employee] was not guilty of serious misconduct. Complainant reacted to the posting by Mattus of a poster at the bulletin board without his consent and the latter’s angrily barging into the room where he was seated but his reaction his attempt to throw a stapler at Mattus and, thereafter, his uttering foul language at him although constituting misconduct cannot, we are confident, fall under the category of a serious misconduct. [The employee] was provoked by Mattus who unjustifiably barged into his room. Complainant did not actually throw a stapler at Mattus. He could have just tried to scare him with the stapler. He allowed himself to be pacified by cooler heads. These attending circumstances removed complainant’s reaction from the classification of a serious misconduct.” [NLRC affirmed.]

x x x

Consequently, we agree with the [lower courts] that the termination of employment of [the employee] on account of a minor misconduct was illegal because Art. 282 of the Labor Code mentions “serious misconduct” as a cause for cessation of employment.

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c. Relates to performance of employee’s duties

3^rd Requisite: It must relate to the performance of the employee’s duties.

In North Camarines Lumber Co. v. Barreda, it was not a serious misconduct when a scaler employee got into a fist fight with a security guard over a private matter and such did not have any deleterious effect on the substantial interests of the employer.

“While conceding the employer’s basic right to regulate the conduct of its employees while inside company premises, we cannot help but notice the unusual zeal and haste displayed by [the employer] in applying the full force of its rules on [the employee]. Undoubtedly, the boxing episode was completely blown out of proportion. The fisticuffs were plainly a private matter between the two employees which had no apparent deleterious effect on the substantial interests of the company. Considering [the employee’s] length of service with [the employer], coupled with the attendant circumstances, the penalty of dismissal was certainly not commensurate with his alleged misconduct. We affirm his reinstatement with backwages for two years.”[1]

In Samson v. Schering-Plough Corporation, a terminated employee who made offensive utterances and obscene gestures during a company’s informal party was considered to have been illegally dismissed. Thus:

•••

CASE STUDY

Samson v. Schering-Plough Corporation (supra.)

“As borne by the records, [the employee’s] dismissal was brought about by the utterances he made during an informal Christmas gathering of [the employer] company’s Sales and Marketing Division on 17 December 1993. [The employee] was heard to have uttered, ‘Si EDT(referring to Epitacio D. Titong, General Manager and President of respondent company), bullshit yan,’ ‘sabihin mo kay EDT yan’ and ‘sabihin mo kay EDT, bullshit yan,’ while making the ‘dirty finger’ gesture. [The employee] likewise told his co-employees that the forthcoming national sales conference of respondent company would be a ‘very bloody one.’

“x x x

In this case, the alleged misconduct of [the employee], when viewed in its context, is not of such serious and grave character as to warrant his dismissal. First, [the employee] made the alleged offensive utterances and obscene gesture during an informal Christmas gathering of respondent company’s district sales managers and marketing staff. The gathering was just a casual get-together of employees. It is to be expected during this kind of gatherings, where tongues are more often than not loosened by liquor or other alcoholic beverages, that employees freely express their grievances and gripes against their employers. Employees should be allowed wider latitude to freely express their sentiments during these kinds of occasions which are beyond the disciplinary authority of the employer. Significantly, it does not appear in the records that [the employee] possessed any ascendancy over the employees who heard his utterances as to cause demoralization in the ranks.

Second, [the employee’s] outburst was in reaction to the decision of the management in the “Cua Lim” case. Admittedly, using the words ‘bullshit’ and ‘putang ina’ and making lewd gesture to express his dissatisfaction over said management decision were clearly in bad taste but these acts were not intended to malign or cast aspersion on the person of respondent company’s president and general manager.

x x x

Third, [the employer] company itself did not seem to consider the offense of [the employee] serious and grave enough to warrant an immediate investigation on the matter. It must be recalled that [the employee] uttered the alleged offensive language at an informal gathering on 17 December 1993. He then allegedly made threatening remarks about the forthcoming sales conference on 3 January 1994. During a meeting on 4 January 1994, Mr. Titong, Jr., the president and general manager of [the employer] company and allegedly to whom the offensive words were directed, merely admonished [the employee] stating that, ‘when there is a disagreement, act in a professional and civilized manner.’ [The employer] company allowed several weeks to pass before it deemed it necessary to require [the employee] to explain why no disciplinary action should be taken against him for his behavior. This seeming lack of urgency on the part of respondent company in taking any disciplinary action against [the employee] negates its charge that the latter’s misbehavior constituted serious misconduct.

x x x

Further, [the employer] company’s rules and regulations [show that the properly penalty for such a  first offense is a only a “verbal reminder and not dismissal]…

Indeed, the penalty of dismissal is unduly harsh considering that [the employee] had been in the employ of respondent company for eleven (11) years and it does not appear that he had a previous derogatory record. It is settled that notwithstanding the existence of a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal should not be imposed, as it is too severe a penalty if the latter had been employed for a considerable length of time in the service of his employer, and such employment is untainted by any kind of dishonesty and irregularity.

•••

In another case, while a misconduct, the failure of an employee to require a customer to sign a coverage waiver is “not serious enough to warrant dismissal.”[2]

d. Unfit to continue working for the employer

4^th Requisite: There must be showing that the employee becomes unfit to continue working for the employer.

In general, the Supreme Court tends to frown upon dismissal of employees who are first time offenders. In Pacific Products/Fortuna Employees and Workers Association-Tupas v. Pacific Products,  it was held that dismissal of an employee for a first-time offense was drastic and hence termination was illegal.

“In resume, We [the Supreme Court] believe that the acts committed by [the employee] (being a first offender) do not warrant the drastic remedy of dismissal. As provided for in the company rules and regulations, presented by [the employee] in his memorandum, the penalty for vending, soliciting, engaging in usurious activities is a written reprimand for the first offense, six (6) days suspension for the second offense, and discharge for the third offense. Nothing specific however is provided with respect to deductions from salaries with the express consent of the employees.”[3]

In St. Jude Catholic School v. Salgarino, a private school teacher who passed students with failing marks was considered to have been illegally dismissed. Thus:

•••

CASE STUDY

St. Jude Catholic School v. Salgarino (supra.)

There is no evidence to show that there was ulterior motive on the part of [the employee] when she decided to pass her students. Also, it was not shown that [the employee] received immoral consideration when she did the same. From the Labor Arbiter up to this Court, [the employee] has maintained her stand that her decision to pass the concerned students was done out of humanitarian consideration.

[The employee] was moved by pity when she learned that some of her students obtained a failing grade in her subject and, thus, will not graduate on time. [The employee] believes that some of her students obtained a failing grade in her subject because they were not properly prepared for the 4th periodical exams. She claims that, although the substitute teachers conducted the 4th periodical exams and computed their grades, there were no teachers assigned to conduct classes, lectures and review before the said exam. Thus, unmindful of the events that may transpire thereafter, [the employee] decided to increase the marks of her students and gave them passing grades.

[The employee] argued that had she failed the subject students, some of them would be enrolling in more than two subjects for summer which is not allowed under Section 68(b), Article XIII of the Manual that provides that a student may enroll in no more than two subjects during the summer, either for the purpose of making up for subjects previously failed, or for earning advanced credits in other subjects. [The employee] avers that some of the students with failing grades in Math had also failed in their two Chinese subjects. Hence, to avoid the violation of the Manual, [the employee] decided to pass these students.

Based on the foregoing, [the employee] may have committed an error of judgment in deciding to pass her students, but it cannot be said that she was motivated by any wrongful intent in doing so. As such, her misconduct cannot be considered as grave in character which would warrant her dismissal from employment. We, thus, find her to be guilty only of simple misconduct. It is settled that a misconduct, which is not serious or grave, cannot be a valid basis for dismissing an employee…[4]

•••

As shown in the above-cited case, the employee’s serious misconduct should be one that would make him/her unfit for continued employment with the employer.

3. Additional Rules

a. Damage to employer – not required

At this point, it should be pointed out that damage to the employer is not required prior to a just cause termination following due process.

•••

CASE STUDY

St. Luke’s Medical Center v. Quebral

G.R. No. 193324, 23 July 2014.

[The employee – a Wellness Center Assistant – was dismissed after repeatedly violating the company’s policy “limiting to patients the privilege of the use of validated parking tickets,” among others. In his defense, he claims that that he should not have been dismissed since no damage was done to the employer.]

This Court, likewise, does not subscribe to [the employee’s] argument that since there is no showing that the offense had prejudiced the operations of [the employer] as there are no records of damage sustained by the latter he does not deserve to be dismissed from employment. A company has the right to dismiss its employees as a measure of self-protection. It need not wait for it to suffer actual damage or loss before it can rightfully dismiss an employee who it has already found to have been dishonest. The fact that [the employer] did not suffer losses from the dishonesty of the [the employee] does not excuse the latter from any culpability. Whether he has already settled the amount he was supposed to pay for parking if not for the validated parking tickets is of no consequence. The fact remains that he was dishonest in the performance of his duties which is a valid ground for termination of employment. (Emphasis supplied.)

•••

Accordingly, so long as due process is complied, the employer may decide to dismiss an erring employee even if there was no damage done to the establishment.

[1] North Camarines Lumber Co. v. Barreda, G.R. No. 75436, 21 August 1987.

[2] Telecommunications Distributors Specialist v. Garriel, G.R. No. 174981, 25 May 2009.

[3] Pacific Products/Fortuna Employees and Workers Association-Tupas v. Pacific Products, G.R. No. L-51592, 18 September 1987.

[4] St. Jude Catholic School v. Salgarino, G.R. No. 164376, 31 July 2006.