Publico vs. Hospital Managers, Inc.
G.R. No. 209086. October 17, 2016


Publico was employed to work at Cardinal Santos Memorial Center (CSMC) in 1989, and was the hospital’s Chief of Blood Bank Section, Laboratory Department when he was dismissed from employment by Hospital Managers, Inc. (HMI) in 2008.

The dismissal was founded on Publico’s gross and/or habitual negligence, as penalized under the following provisions of the HMI’s Code of Discipline for employees, and indicated in an inter-office memo that directed Publico to answer the charges. Prior to Publico’ s dismissal, HMI discovered incidents of unauthorized sale of blood and apheresis units by laboratory personnel, who also issued fake receipts and failed to remit payments to the hospital.

When asked to explain his side on the issue, Publico denied any participation in the anomalous transactions. He claimed to have known of the incidents of unauthorized sale only when he was asked to participate in the investigation.

He further evaded any responsibility by claiming that while five employees were investigated for the scheme, only one of them was under his supervision in the blood bank section.

He was also tasked to supervise only personnel assigned in the morning shift, while the supposed unauthorized transactions happened during the night shift. Further investigations conducted by HMI’ s Management Investigation Committee eventually led to Publico’ s dismissal on May 9, 2008, through a Notice of Termination served upon him. Feeling aggrieved, Publico charged the respondents with illegal dismissal before the Labor Arbiter (LA).

For its part, Roman Catholic Archbishop Manila (RCAM) explained that it is a corporation sole and the registered owner of the parcel of land being occupied by CSMC. On August 1, 1988, it entered into an Agreement for Joint Apostolate with HMI, whereby the latter was given the use and possession of the land and hospital. Also part of the agreement was HMI’s assumption as the new employer of CSMC’s existing personnel.

Given the set-up, RCAM argued that it could not be held liable for Publico’s charge of illegal dismissal. It further cited a compromise agreement executed by HMI and RCAM, whereby all liabilities such as third party claims, salaries, wages and separation pay of HMI’ s employees shall be for the account of HMI.

LA Ruling:

The LA ruled ·in favor of Publico. He was declared illegally dismissed from employment, but only RCAM and CSMC were declared liable for the monetary claims. The LA believed that Publico was employed by CSMC in 1986, or prior to the effectivity of the Agreement for Joint Apostolate with HMI. The change in the hospital’s operator could not have affected Publico’s status as an employee of RCAM. Dissatisfied, RCAM appealed to the National Labor Relations Commission (NLRC).

NLRC Ruling:

The NLRC rendered its Decision favoring RCAM. HMI was   declared the employer of Publico, and as such was solely liable for the illegal dismissal. Per its agreement with RCAM, HMI became the employer of Publico when it became the operator of CSMC. Reinstatement, however, was no longer feasible considering that a new entity   had taken over the hospital. HMI’s motion for reconsideration was denied by the NLRC, which prompted it to file a petition for certiorari with the CA.

CA Ruling:

The CA rendered its Decision reversing the NLRC. For the appellate court, Publico was validly dismissed for gross and habitual neglect of duties. Given his position in the hospital, Publico could have prevented, or at least discovered and reported, the anomalous transactions of his personnel. His failure to do so evidenced the neglect. Besides the just cause, the requirement of procedural due process was satisfied through the opportunity given to Publico to explain his side prior to his dismissal, as well as the chance to seek a reconsideration of the action or ruling complained of. Given its ruling on the legality of the dismissal, the CA found it unnecessary to rule on the entity that should be declared liable for Publico’s monetary claims. Hence, the petition.


Whether or not a supervisor can be held liable for acts committed against company property under his supervision and inventory control.

Whether or not a supervisor can only be held liable for acts of his own subordinates over company property within his inventory control.

Whether or not the dismissal is illegal.

SC Ruling:

The SC found the dismissal as valid.

Under Article 282(b) of the Labor Code, an employer may terminate an employment on the ground of “[g]ross and habitual neglect by the employee of his duties.” In the instant case, Publico was entrusted by HMI to take on the role of Chief, Blood Bank Section of the Laboratory Department, and   with this carried the reasonable expectation that he would assiduously perform the demands of his position.

The charge of gross and habitual neglect on an employee who has the supervisory duty over the safe keep of property which was stolen does not pertain to his own participation but to his failure to perform his duties as a supervisor.

Publico’s obligations as Section Chief include personnel supervision (only one of his several functions, all intended to ensure proper and orderly operations within his department), all matters affecting the laboratory, such as workflow supervision, record management, equipment and inventory control. He was duty-bound to monitor and supervise all equipment, supplies, work, and personnel operating in his department, regardless of whether these people were under his direct supervision and the shift when they reported for work.

Thus, he cannot advance the excuses to evade any to limit his liability for the acts of his personnel only reinforce. He cannot avoid liability by insisting that some of the wrongdoers were not under his watch; second, the transactions happened during the night shift when he supervised only those in the morning shift; and third, the questioned transactions were not recorded in the log book.

Publico could not have simply relied on the laboratory log book to monitor activities within his department, especially since the erring employees would not have recorded their illegal activities, to be able to perpetuate the commission thereof. The foregoing circumstances show that Publico’s neglect was gross and habitual. “Gross negligence connotes want of care in the performance of one’s duties. Habitual neglect implies repeated failure to perform one’s duties for a period of time, depending upon the circumstances.

The liability of Publico did not depend on his knowledge or direct participation in the wrongful sale of blood and apheresis units. Even as the Court considers the inter-office memo sent by HMI to inform Publico of the charges, references were on negligence and non-observance of operating policies and procedures. The accusations pertained to his failure to perform his duties as a supervisor, rather than his own participation in the unlawful sales.

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