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 the foregoing provision, all  elements must concur.

Thus, the SC held in a September 27, 2017 case as follows:

Fabricator Philippines, Inc. vs. Jeani Rose Q. Estolas
G.R. Nos. 224308-09, September 27, 2017


Respondent Jeani Rose Estolas alleged that Fabricator Philippines hired her as a welder. One day, before break time, while waiting for a replacement part, she requested to be installed on the welding machine she was using, Estolas took a seat and rested. At that time, another employee, Rosario Banayad (Banayad), passed by and saw her sitting, then uttered “Ayos ka ha.”

The matter was brought to the attention of Assembly Action Team Leader, Warlito Abaya (Abaya), who confronted Estolas about the said incident. Thereafter, while Abaya and Banayad were talking to each other, Estolas told the latter in the vernacular “Ang kitid ng utak mo. Bakit hindi mo muna ako tinanong kung bakit ako nakaupo? Bakit hindi mo muna tinanong kung ano ang nasa likod ng nakita mo?

Banayad retorted, saying, “Matapang ka ha! Matapang ka!” Estolas replied, “Candy, ikaw pa naman ang nagdadasal araw-araw, tapos ganyan ang ugali mo!

Consequently, Abaya directed Estolas to see Lim in his office. During their meeting, the latter allegedly asked what she would feel if he would hit her ear, then proceeded to hit her ear. Estolas reasoned out that she did not hit Banayad’s ear and that it was the latter who provoked her.

However, Lim insisted that Estolas was rude towards Banayad. Thus, Estolas was issued a suspension order effective the following day for a period of three (3) days. While she was in the locker area, the company guard on duty informed Estolas to report for work the following day.

A few months later, Lim told Estolas to resign and that his lawyer will see her. Estolas was again instructed not to report for work until she and Lim have talked. Lim directed Estolas to sign a paper, which she refused as it pertained to the promotion of Banayad as Strategy and Control Group-Senior Assistant 1.

Estolas received a letter from Lim directing her to seek the assistance of a lawyer for the scheduled hearing. At the scheduled hearing, Estolas was required to sign the statements of Banayad and other witnesses, which she refused to follow.

Thereafter, Estolas was served a notice of termination, finding her guilty of serious misconduct. Hence, Estolas filed the complaint for illegal dismissal with claims for moral damages, exemplary damages, and attorney’s fees before the National Labor Relations Commission (NLRC) by against Fabricator Philippines and its President, Victor Lim (Lim).

For their part, Fabricator Philippines and Lim maintained that Estolas was validly dismissed for gross misconduct, as: (a) she was caught sitting down during office hours; and ( b) she insulted and uttered offensive language towards her superior, Banayad. They further pointed out that they sent Estolas various memoranda regarding the incident, but the latter refused to receive the same. Thus, they were constrained to terminate her employment.

LA Ruling:

The Labor Arbiter (LA) ruled in favor of Estolas, and accordingly, ordered Fabricator Philippines and Lim to pay her separation pay with full backwages in the total amount of P167,324.29.

The LA found that while Estolas may have indeed committed acts of misconduct, the same were not willful and intentional in character. The LA added that there was no wrongful intent, but a mere spur of the moment incident prompted by a simple miscommunication among workmates.

As such, the penalty meted on Estolas, i.e., dismissal, was not commensurate to the offense charged against her. Aggrieved, Fabricator Philippines and Lim appealed to the NLRC.

NLRC Ruling:

Initially, the NLRC issued a Resolution dismissing the appeal on technical grounds. Upon reconsideration, however, the NLRC promulgated a Decision modifying the LA ruling by deleting the award of separation pay and backwages, and in lieu thereof, ordered Estolas’s reinstatement to her former position without loss of seniority rights.

The NLRC agreed with the LA’ s finding that while Estolas indeed committed an act of misconduct, the same was not of a serious and grave character so as to warrant Estolas’s dismissal for a just cause.

However, the NLRC found it appropriate to delete the award of backwages in Estolas’s favor, opining that this is a commensurate penalty for the latter’s act of professional misconduct.

Both parties moved for reconsideration, which were, however, denied in a Resolution. Dissatisfied, they elevated the matter to the CA via their respective petitions for certiorari.

CA Ruling:

The CA reinstated the LA ruling with modifications: (a) ordering Fabricator Philippines to pay Estolas backwages from the time she was illegally dismissed until finality of the ruling less her salary for fifteen (15) days corresponding to her suspension, and separation pay computed from the time Estolas was hired until finality of the decision, plus legal interest of six percent (6%) per annum from finality of the decision until fully paid; ( b) absolving Lim from any personal liability arising from Estolas’s illegal dismissal; and (c) ordering the LA to make a recomputation of the total monetary benefits awarded and due Estolas.

The CA held that Estolas’s acts did not amount to gross misconduct that would have justified her termination from work. In this regard, it found that the NLRC gravely abused its discretion in deleting the award of backwages, pointing out that Estolas was already suspended for three (3) days for her misconduct, and thus, a second disciplinary proceeding, which resulted in her dismissal, as well as the consequent filing of the _instant case, was no longer warranted. Nonetheless, the CA opined that Estolas’s infraction was minor, for which a fifteen (15)-day suspension would have sufficed.

Anent Estolas’s claim for moral damages, exemplary damages, and attorney’s fees, the CA pointed out that she never appealed the LA ruling which did not grant her such monetary awards, rendering the same final as to her. Moreover, she failed to present competent evidence to support her claims.

Undaunted, Fabricator Philippines moved for reconsideration, but the same was denied. Hence, the petition.


Whether or not the act subject of employee’s dismissal, consisting of verbal tussle with co-employee during office hours and in front of superior, is serious misconduct that is ground for valid dismissal

Whether or not an employee who was already issued a suspension order for an offense can still be terminated based on the same offense

SC Ruling:

The SC did not find merit in the petition.

The SC held that Article 297 (formerly Article 282) of the Labor Code, as amended, lists serious misconduct as one of the just causes for an employee’s dismissal from work.

Get a renumbered and updated copy of the Labor Code of the Philippines 2018 Edition online or at National Book Store nationwide

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 the foregoing provision, 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 SC observed that while Estolas indeed committed some sort of misconduct when she engaged in a verbal tussle with Banayad during work hours and in front of their superior, Abaya, the same was not serious enough to warrant Estolas’s dismissal. Neither was it shown that Estolas performed such act of misconduct with wrongful intent nor did the same render her unfit to continue working for Fabricator Philippines. As such, the SC concluded that the tribunals correctly concluded that Fabricator Philippines illegally dismissed Estolas.

Fabricator Philippines already issued an order suspending Estolas for a period of three (3) days on account of her misconduct. Thus, Fabricator Philippines could no longer subject Estolas to another disciplinary proceeding based on the same act of misconduct. Clearly, Estolas could not have been validly terminated from work.

error: Content is protected !!