Sta. Isabel vs. Perla Compañia De Seguros, Inc.
G.R. No. 219430, November 7, 2016


Perla, a company engaged in insurance business, hired Sta. Isabel as its Claims Adjuster. Later on, the company discovered that she had her own separate insurance agency.

Perla issued notices to explain to Sta. Isabel for her poor services towards the clients of PAIS Insurance Agency (PAIS) and Insurance Brokers, Inc. (Ricsons). In view of Sta. Isabel’s failure to submit a written explanation and to appear before the Head Office to explain herself, Perla issued a Final Written Warning.

Perla also issued to Sta. Isabel a Final Directive to Report to Head Office instructing her to report to the Head Office and explain her alleged refusal to receive the afore-cited Final Written Warning.

Subsequently, Perla issued a Notice of Termination dismissing Sta. Isabel from employment on the ground of insubordination. Consequently, Sta. Isabel filed the instant complaint for illegal dismissal with money claims.

LA Ruling:

The Labor Arbiter (LA) dismissed the complaint for lack of merit. The LA found that since Perla’s directives for Sta. Isabel to appear before the Head Office were in connection with the administrative proceedings against the latter, her refusal to comply therewith was not tantamount to willful disobedience or insubordination. At the most, it only amounted to a waiver of her opportunity to be heard in said proceedings. Nevertheless, the LA found just cause in terminating Sta Isabel’s employment, opining that her disrespectful language in her letter dated November 27, 2012 not only constitutes serious misconduct, but also insubordination as it showed her manifest refusal to cooperate with Perla. Aggrieved, Sta. Isabel appealed to the NLRC.

NLRC Ruling:

The NLRC granted Sta. Isabel’s appeal. The NLRC held that Sta. Isabel’s refusal to report to the Head Office was not willful disobedience, considering that the directives were in connection with the administrative proceedings against her and, as such, her failure to appear was only tantamount to a waiver of her opportunity to be heard. Upon Perla’s motion for reconsideration, the NLRC issued a Resolution affirming its Decision. Dissatisfied, Perla filed a petition for certiorari before the CA.

CA Ruling:

The CA nullified and set aside the NLRC ruling, and reinstated that of the LA. Essentially, it held that the NLRC gravely abused its discretion in failing to appreciate the evidence showing Sta. Isabel’s sheer defiant attitude on the orders of Perla and its officers. In this regard, the CA held that Sta. Isabel’s conduct towards Perla’s officers by deliberately ignoring the latter’s directives for her to appear before the Head Office, coupled with her letter, constitutes insubordination or willful disobedience. Thus, the CA concluded that Sta. Isabel’s dismissal was valid, it being a valid exercise of management prerogative in dealing with its affairs, including the right to dismiss its erring employees. Undaunted, Sta. Isabel moved for reconsideration, which was, however, denied. Hence, the petition.


Whether or not refusal to report to the office for administrative investigation is sufficient basis for dismissal on the ground of insubordination or willful disobedience or a mere waiver of the right to be heard.

SC Ruling:

The SC found the petition meritorious.

Insubordination or willful disobedience, is a just cause for termination of employment listed under Article 297 (formerly Article 282) of the Labor Code.

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Willful disobedience or insubordination, as a just cause for the dismissal of an employee, necessitates the concurrence of at least two (2) requisites, namely: (a) the employee’s assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (b) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge.

In this case, a plain reading of the Notice to Explain and Notice of Termination reveals that the charge of insubordination against Sta. Isabel was grounded on her refusal to report to the Head Office despite due notice. While Perla’s directives for Sta. Isabel to report to the Head Office indeed appear to be reasonable, lawful, and made known to the latter, it cannot be said that such directives pertain to her duties as a Claims Adjuster, i.e., handling and settling claims of Perla’s Quezon City Branch, regardless of whether her refusal to heed them was actually willful or not.

The aforesaid directives, whether contained in the Notice to Explain or the Final Directive to Report to Head Office, all pertain to Perla’s investigation regarding the Ricsons incident and, thus, were issued in compliance with the requisites of procedural due process in administrative cases.

Otherwise stated, such directives to appear before the Head Office were for the purpose of affording Sta. Isabel an opportunity to be heard regarding the Notice to Explain. Sta. Isabel’s failure or refusal to comply with the foregoing directives should only be deemed as a waiver of her right to procedural due process in connection with the Ricsons incident, and is not tantamount to willful disobedience or insubordination.

Guide to Valid Dismissal of Employees


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