Universal Canning Inc., et al. vs. Court of Appeals, et al.
G.R. No. 215047, November 23, 2016


Dante M. Sarosal, Francisco Dumagal. Jr., Nelson E. Francisco, Elmer C. Saromines and Samuel D. Coronel (Complainants) were employed by Universal Canning on various capacities. They were caught by Universal Canning company’s Purchasing Officer, Falconieri Almazan, playing cards at the company’s premises during working hours.

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The incident was immediately reported by Almazan to the Personnel Officer, Ma. Lourdes Losaria, who immediately conducted an investigation to determine the names and of those who were involved in the gambling activities.

On the same day, complainants were placed under preventive investigation pending further investigation by a panel indicated in a memorandum addressed to and duly received by the individuals concerned. Under the same memorandum, complainants were required by the Universal Canning to file their written explanation of the incident.

Complainants complied with the directive. In their letter-explanation, they denied they were involved in gambling activities within the company’s premises during work hours. It was argued by the complainants that while indeed they were playing cards inside the company premises, it cannot be considered gambling as there was no money involved and that it took place during noon break. The investigation was conducted where complainants were questioned regarding their participation in the activities inside the company’s premises.

After the inquiry, the Investigating Officer found that complainants were playing cards during working hours which is considered an infraction of the company’s rules and regulations.

On the basis of the Investigation Report, complainants were dismissed from employment through a notice which enumerated the grounds:

(1) taking part in a betting, gambling or any unauthorized game of chance inside the company premises while on duty; and

(2) for loss of trust and confidence.

The termination of complainants was reported by the Universal Canning to the Department of Labor of Employment (DOLE).

Complainants filed an illegal dismissal case.

LA Ruling:

The LA dismissed the complaint. The Labor Arbiter held that complainants were dismissed for just cause and after compliance with due process.

NLRC Ruling:

On appeal, the NLRC affirmed the dismissal of complainants’ complaint.

It held that “playing cards during office hours whether for a stake or fun is considered a dishonest act of stealing company time. The company’s working hours could be used for more profitable activities since they are paid by the company.”

Setting aside the claim of complainants that their length of service should be considered a mitigating circumstance, the NLRC held that “the fact that [complainants] have been employed by the company for a long period of time could not work in their favor. Their attitude towards their work is smacked with disloyalty, lack of concern and enthusiasm.”

CA Ruling:

On Certiorari, the Court of Appeals reversed and set aside the NLRC Decision on the ground that it was rendered with grave abuse of discretion amounting to lack or excess in jurisdiction.

According to the appellate court, there exists no just cause to dismiss· complainants from employment. As rank and file employees, complainants could not be dismissed for lack of trust and confidence as they were not holding positions imbued with trust and confidence.

The CA denied the motion for reconsideration. Thus, the petition.


  1. Whether or not the dismissal was valid
  2. Whether or not the ground for loss of trust and confidence is valid
  3. Whether or not employees could be dismissed for using company time for gambling

SC Ruling:

The SC granted the petition.

It must be stressed at the onset that complainants were dismissed by Universal Cannings for two reasons:

(1) for violation of company rules and regulations; and

(2) for loss of trust and confidence.

While it is true that loss of trust and confidence alone could not stand as a ground for dismissal in this case since complainants are rank and file employees who are not occupying positions of trust and confidence, such is not the only ground, relied by the company in terminating complainants’ employment.

Universal Canning company also cited the infraction of company rules and regulations, in addition to loss and trust of confidence. Infraction of the company rules and regulation which is akin to serious misconduct is a just cause for termination of employment recognized under Article 282 [note: now Article 297 as re-numbered per R.A. 10151 and DOLE Advisory No. 01, Series of 2015] (a) of the Labor Code.

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Here, there is no question that complainants were caught in the act of engaging in gambling activities inside the workplace during work hours, a fact duly established during the investigation conducted by the company and adopted by the labor tribunals below.

As a matter of fact, complainants never controverted their participation in the gambling activities, but instead raised the defense that it took place during noon break and that no stakes were involved; these claims even if were proven true, will however not save the day for the complainants.

The use of the company’s time and premises for gambling activities is a grave offense which warrants the penalty of dismissal for it amounts to theft of the company’s time and it is explicitly prohibited by the company rules on the ground that it is against public morals.

Suffice it to state that an employee may be validly dismissed for violation of a reasonable company rule or regulation adopted for the conduct of the company’s business.


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