Serious misconduct to be valid ground for dismissal, the following 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.

Sterling Paper Products Enterprises, Inc. vs. KMM-Katipunan
G.R. No. 221493, August 2, 2017


Petitioner Sterling Paper Products Enterprises, Inc. (Sterling) hired respondent Raymond Z. Esponga (Esponga), as machine operator. Sterling imposed a 20-day suspension on several employees including Esponga, for allegedly participating in a wildcat strike.

Updated and Re-numbered Labor Code

The Notice of Disciplinary Action contained a warning that a repetition of a similar offense would compel the management to impose the maximum penalty of termination of services.

Sterling averred that their supervisor Mercy Vinoya (Vinoya), found Esponga and his co-employees about to take a nap on the sheeter machine. She called their attention and prohibited them from taking a nap thereon for safety reasons.

Esponga and his co-employees then transferred to the mango tree near the staff house. When Vinoya passed by the staff house, she heard Esponga utter, “Huwag maingay, puro bawal.” She then confronted Esponga, who responded in a loud and disrespectful tone, “Puro kayo bawal, bakit bawal ba magpahinga?

When Vinoya turned away, Esponga gave her the “dirty finger” sign in front of his co-employees and said “Wala ka pala eh, puro ka dakdak. Baka pag ako nagsalita hindi mo kayanin.

The incident was witnessed by Mylene Pesimo (Pesimo), who executed a handwritten account thereon. Later that day, Esponga was found to have been not working as the machine assigned to him was not running from 2:20 to 4:30 in the afternoon. Instead, he was seen to be having a conversation with his co-employees, Bobby Dolor and Ruel Bertulfo. Additionally, he failed to submit his daily report from June 21 to June 29, 2010.

Hence, a Notice to Explain was served on Esponga requiring him to submit his written explanation and to attend the administrative hearing scheduled. Esponga submitted his written explanation denying the charges against him. He claimed that he did not argue with Vinoya as he was not in the area where the incident reportedly took place.

Esponga further reasoned that during the time when he was not seen operating the machine assigned to him, he was at the Engineering Department and then he proceeded to the comfort room. Esponga, however, failed to submit his written explanation and he did not attend the hearing.

In view of Esponga’s absence, the administrative hearing was rescheduled. The hearing was reset several more times because of his failure to appear. The hearing was finally re-set. Esponga and his counsel, however, still failed to attend.

Having found Esponga guilty of gross and serious misconduct, gross disrespect to superior and habitual negligence, Sterling sent a termination notice. This prompted Esponga and KMM-Katipunan (respondents) to file a complaint for illegal dismissal, unfair labor practice, damages, and attorney’s fees against Sterling.

LA Ruling:

The LA ruled that Esponga was illegally dismissed.

It held that Sterling failed to discharge the burden of proof for failure to submit in evidence the company’s code of conduct, which was used as basis to dismiss Esponga.

Not in conformity, Sterling elevated an appeal before the NLRC.

NLRC Ruling:

The NLRC reversed and set aside the LA ruling.

It declared that Esponga’s dismissal was valid. The NLRC observed that as a result of the said incident, Esponga no longer performed his duties and simply spent the remaining working hours talking with his co-workers.

It opined that Esponga intentionally did all these infractions on the same day to show his defiance and displeasure with Vinoya, who prohibited him from sleeping on the sheeter machine. It concluded that these were all violations of the Company Code of Conduct and Discipline, and constituted a valid cause for termination of employment under the Labor Code.

Undeterred, respondents filed a motion for reconsideration. The NLRC denied the same. Aggrieved, the respondents filed a petition for certiorari with the CA.

CA Ruling:

The CA reinstated the LA ruling.

It held that the utterances and gesture did not constitute serious misconduct. The CA stated that Esponga may have committed an error of judgment in uttering disrespectful and provocative words against his superior and in making a lewd gesture, but it could not be said that his actuations were motivated by a wrongful intent.

It adjudged that Esponga’s utterances and gesture sprung from the earlier incident which he perceived as unfairly preventing him from taking a rest from work. As such, the CA ruled that Esponga’s actuations could only be regarded as simple misconduct.

Sterling moved for reconsideration, but the CA denied its motion. Hence, the petition for review.


Whether or not a retracted testimony still bears probative value

Whether or not the statements “Huwag maingay, puro bawal“, a retort stating “Puro kayo bawal, bakit bawal ba magpahinga?” and giving supervisor the “dirty finger” sign and said “Wala ka pala eh, puro ka dakdak. Baka pag ako nagsalita hindi mo kayanin” constitute serious misconduct

SC Ruling:

The SC found the petition meritorious.

Guide to Valid Dismissal of Employees

In cases of illegal dismissal, the employer bears the burden of proof to prove that the termination was for a valid or authorized cause.

In support of its allegation, Sterling submitted the handwritten statement of Pesimo who witnessed the incident between Esponga and Vinoya. Pesimo, however, recanted her statement.

A recantation does not necessarily cancel an earlier declaration. The rule is settled that in cases where the previous testimony is retracted and a subsequent different, if not contrary, testimony is made by the same witness, the test to decide which testimony to believe is one of comparison coupled with the application of the general rules of evidence.

A testimony solemnly given in court should not be set aside and disregarded lightly, and before this can be done, both the previous testimony and the subsequent one should be carefully compared and juxtaposed, the circumstances under which each was made, carefully and keenly scrutinized, and the reasons and motives for the change discriminately analyzed.

In this case, Pesimo’ s earlier statement was more credible as there was no proof, much less an allegation, that the same was made under force or intimidation. The SC observed that Pesimo’s recantation was made only after Esponga came to see her.

Nevertheless, in a text message she sent to Vinoya, Pesimo did not deny the contents of her earlier statement. She merely expressed concern over Esponga’s discovery that she had executed a sworn statement corroborating Vinoya’s narration of the incident. Thus, her earlier statement prevails over her subsequent recantation.

Under Article 282 (a) of the Labor Code, 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.

In sum of the rule on serious misconduct, the SC held that 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.

In the case at bench, the charge of serious misconduct is duly substantiated by the evidence on record. Hence, it is well-settled that accusatory and inflammatory language used by an employee towards his employer or superior can be a ground for dismissal or termination.

Further, Esponga’s assailed conduct was related to his work. Vinoya did not prohibit him from taking a nap. She merely reminded him that he could not do so on the sheeter machine for safety reasons. Esponga’s acts reflect an unwillingness to comply with reasonable management directives.

The Court finds that Esponga was motivated by wrongful intent. Vinoya prohibited Esponga from sleeping on the sheeter machine. Later on, when Vinoya was passing by, Esponga uttered “Huwag maingay, puro bawal.”

When she confronted him, he retorted “Puro kayo bawal, bakit bawal ba magpahinga?” Not contented, Esponga gave her supervisor the “dirty finger” sign and said “Wala ka pala eh, puro ka dakdak. Baka pag ako nagsalita hindi mo kayanin.”

All these acts in front of his co-employees, which evidently showed that he intended to disrespect and humiliate his supervisor.

An aggrieved employee who wants to unburden himself of his disappointments and frustrations in his job or relations with his immediate superior would normally approach said superior directly or otherwise ask some other officer possibly to mediate and discuss the problem with the end in view of settling their differences without causing ferocious conflicts. No matter how the employee dislikes his employer professionally, and even if he is in a confrontational disposition, he cannot afford to be disrespectful and dare to talk with an unguarded tongue and/or with a baleful pen.

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