Strained relations must be demonstrated as a fact. The doctrine of strained relations should not be used recklessly or applied loosely nor be based on impression alone” so as to deprive an illegally dismissed employee of his means of livelihood and deny him reinstatement.

Thus, the SC held in a December 13, 2017 case as follows:

Advan Motor, Inc. vs. Victoriano G. Veneracion
G.R. No. 190944, December 13, 2017


Respondent Victor Veneracion started working in Petitioner Advan Motor, Inc.’s (Advan Motor) business of selling and repairing cars manufactured by General Motors Automotive Phils. as Sales Consultant.

Subsequently, in a letter, he was informed of the termination of his services for the reason of repeated AWOL violations for more than six consecutive days and management’s loss of trust and confidence for his repeated abandonment of office duties and responsibilities.

Aggrieved, Veneracion filed a complaint for constructive dismissal. The complaint was subsequently amended by changing his causes of action into actual illegal dismissal and including underpayment of salaries.

Veneracion alleged that he was suspected of planning to organize a union, that henceforth, he was harassed by management by being forced to resign in exchange for a financial package and treated unfairly when his purchase orders and sub-dealership agreement with an interested party were not acted upon or sabotaged by management; that unlike the others, his salary was not adjusted although he had been regularized and given the run-around with regard to the giving of promo discounts to buyers.

Veneracion also averred that for the month of March 2001, including the succeeding months, he was no longer given any duty date, show room, nor phone and was again pressured to resign. In April 2001 he applied for a leave of absence which was verbally approved but later denied; that his salaries for April 2001 and the months thereafter were withheld; and, that contemplating on filing an action, Advan jumped the gun on him by serving him with the letter terminating his services.

Advan contended that contended that Veneracion was oftentimes absent or tardy and failed to meet his sales quota of three (3) cars a month; that he went on an unannounced leave from March 28-31, 2001 and, later, by just handing to the security guard his request for vacation leave from April 2-18, 2001; that on April 20, 2001, he informed the Personnel Officer that he would no longer report for work, prompting management to issue a notice of termination on May 21, 2001.

Advan Motor claimed that Veneracion received a copy of the manual issued by the former, which provides the company’s general personnel policies providing penalty for AWOL.

Advan Motor alleged that Veneracion was fully aware that said rule was designed by the company to ensure its uninterrupted operation, without being disrupted or hampered by the absence of one employee. This policy was adopted by the company to plan ahead and properly redesign its operation in case an employee intends to take a vacation.

Advan Motor further alleged that Veneracion failed to reach his sales quotas and committed gross neglect of duty and wanton violation of company policies. Specifically, Advan Motor claimed that Veneracion failed to reach the sales quota of at least three units of motor vehicles a month.

On several occasions, Advan Motor issued notices to Veneracion reminding him of his poor sales performances, frequent tardiness and absences during his floor duty, and prolonged unauthorized absences, which seriously hampered and impaired the sales operations and business plans of Advan Motor. Therefore, Advan Motor concluded that there was a valid and legal ground to dismiss the Veneracion.

Veneracion filed an amended complaint for actual illegal dismissal, underpayment of salaries/wages with damages, attorney’s fees, and a prayer for reinstatement and payment of full backwages.

LA Ruling:

The LA ruled for Veneracion and held that the dismissal was illegal.

Advan Motor appealed the Labor Arbiter’s decision to the NLRC, while Veneracion filed his partial appeal.

NLRC Ruling:

The NLRC affirmed the decision of the Labor Arbiter. Both parties filed their respective Motions for Reconsideration but the NLRC denied both motions for lack of merit.

Veneracion filed a Petition for Certiorari before the CA.

CA Ruling:

The appellate court partially granted the petition of the Veneracion and ordered the company to reinstate the Veneracion to his former position and to pay the latter his backwages.

The Court of Appeals affirmed the NLRC decision with modifications by deleting the award of separation pay.

Advan Motor filed a Motion for Partial Reconsideration. However, the appellate court was not persuaded and denied the said motion.

Aggrieved, Advan Motor filed the petition before the SC.


Whether or not strained relationship can be invoked against reinstatement order involving an employee who was not holding a position of trust and confidence

SC Ruling:

In its petition, Advan Motor argues that the order of reinstatement is not proper when the position occupied is one vested with trust and confidence.

It alleges that it placed a high level of trust and confidence to Veneracion as a Sales Consultant. Advan Motor points out that Veneracion disregarded company rules and regulations when he went AWOL for several consecutive days, which is a serious offense.

The offense committed, clearly, is “work-related” and to treat it lightly or let it pass will definitely set a bad precedent for the company and will embolden the other sales agents.

Advan Motor claims that the business of a car dealership largely rests on the sales agents representing the company in selling the products, who are expected to translate these products into sales for the company, and as such should be considered trustworthy.

Advan Motor argues that it is sufficient that the employer has reasonable ground to believe that the employee is responsible for the misconduct, rendering him unworthy of the trust and confidence demanded by his position.

Read more on backwages and reinstatment: Guide to Valid Dismissal of Employees

The SC upheld the reinstatement holding that Veneracion is a mere car sales agent/sales consultant whose function is precisely to sell cars for the company. Said position is clearly not vested with complete trust and confidence from the employer as compared to, for example, a managerial employee.

Citing Dimabayao vs. National Labor Relations Commission, the SC held that strained relationship may be invoked only against employees whose positions demand trust and confidence, or whose differences with their employer are of such nature or degree as to preclude reinstatement.

The SC held that every labor dispute almost always results in “strained relations,” and the phrase cannot be given an overarching interpretation, otherwise, an unjustly dismissed employee can never be reinstated.

The Position of sales consultant is not a position of complete trust and confidence where personal ill will could foreclose an employee’s reinstatement. Moreover, as it is one of the just causes for dismissal under the Labor Code, to affirm the allegation of loss of trust and confidence would lead to an illogical conclusion that Veneracion was validly dismissed.

Strained relations must be demonstrated as a fact. The doctrine of strained relations should not be used recklessly or applied loosely nor be based on impression alone” so as to deprive an illegally dismissed employee of his means of livelihood and deny him reinstatement.

Since the application of strained relations doctrine will result in the deprivation of employment despite the absence of just cause, the implementation of the doctrine of strained relationship must be supplemented by the rule that the existence of a strained relationship is for the employer to clearly establish and prove in the manner it is called upon to prove the existence of a just cause. The degree of hostility attendant to a litigation is not, by itself, sufficient proof of the existence of strained relations that would rule out the possibility of reinstatement.

The SC held further that since there was a conclusive finding that Veneracion was unjustly dismissed from work and awarded backwages. Citing Reyes vs. RP Guardians Security Agency, Inc. the SC concluded that backwages and reinstatement are separate and distinct reliefs given to an illegally dismissed employee in order to alleviate the economic damage brought about by the employee’s dismissal.

“Reinstatement is a restoration to a state from which one has been removed or separated” while “the payment of backwages is a form of relief that restores the income that was lost by reason of the unlawful dismissal.”

Therefore, the award of one does not bar the other.

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