The additional grounds cited in the notice of termination which were not mentioned in the NTE violated Pardillo’s right to be informed of the administrative charges against her. The NTE and the notice of termination did not state the specific acts that constituted breach of company policies resulting in loss of trust and confidence and the specific company policies that were violated.

Thus, the SC held in the March 2019 case, as follows:

Pardillo vs. Dr. Bandojo
G.R. No. 224854, March 27, 2019

Loss of trust and confidence; The notice of termination fails to state the alleged acts which resulted in loss of trust and confidence; Procedural due process; Notice to Explain (NTE) fails to include the charge contained in the notice of termination; Inclusion of new allegations in the letter of termination not found in the NTE violates procedural due process


Petitioner Lucita S. Pardillo (Pardillo) was hired as midwife of E & R Hospital and Pharmacy in Iligan City, which is owned and managed by spouses Prof. Rogelio B. Bandojo and Dr. Evelyn D. Bandojo (Dr. Bandojo).

In 1991, Pardillo was transferred to a new position as Billing Clerk/Cashier. In 2001, she was promoted and became the Business Office Manager and held such position until November 18, 2010 when her employment was terminated by Dr. Bandojo in a letter of termination.

On the other hand, Dr. Bandojo alleged that Pardillo’s termination was brought about by several infractions she committed and her habitual tardiness totaling to about 16,000 minutes. Dr. Bandojo avers that E & R Hospital suffered losses due to the negligence of Pardillo in failing to process and send the records of ce1iain patients to PhilHealth for refund of their paid claims.

Dr. Bandojo cited the case of a patient named Jamal Alim, whose claim was not processed or sent to PhilHealth; Moises Servano whose claim was returned to E & R Hospital due to the lack of original official receipt; and Stephen Chiu, a non-PhilHealth patient who was discharged from the hospital with an unsettled bill of Php 5,968.00 and with no promissory note on record.

Moreover, Pardillo allegedly tried to borrow, for her personal use the hospital’s “Pay to Cash” check which was intended for the payment of the newborn screening kits. The proverbial last straw that broke the camel’s back was when Pardillo reported very late for work; specifically at past ten in the morning.

Dr. Bandojo caught Mrs. Natividad Labadan, Pardillo’s subordinate, punching Pardillo’s time card in the bundy clock located at the pharmacy area. Thus, an administrative investigation was conducted. In the said investigation, Pardillo denied the accusations against her. Due to the alleged incessant breach of trust exhibited by Pardillo, Dr. Bandojo issued the memorandum terminating the employment of Pardillo as Business Office Manager of E&R Hospital.

Pardillo filed a Complaint for Illegal Dismissal with the Labor Arbiter.

LA Ruling:

The LA dismissed Pardillo’s complaint for lack of merit.

The LA held that Pardillo was a managerial employee whose employment may be terminated on the ground of loss of trust and confidence. The LA held that Pardillo committed several infractions inimical to the business of Dr. Bandojo such as failing to process PhilHealth refunds, allowing the release of a patient with unpaid hospital bills without a promissory note, trying to take a personal loan on the “pay to cash” check intended for payment of newborn screening kits, and tardiness.

The LA also found that Dr. Bandojo had observed procedural due process in dismissing Pardillo as an administrative hearing was conducted.

NLRC Ruling:

On appeal the NLRC, reversed and set aside the ruling of the LA.

The NLRC held that Pardillo was dismissed without substantive and procedural due process. Pardillo was able to explain the alleged infractions levelled against her by Dr. Bandojo. With regard to patient Moises Servano, he had died and his relatives could no longer find the original receipt so that upon instruction of Dr. Bandojo, Pardillo did not refile the claim to PhilHealth.

As to patient Jamal Alim, he had no financial obligation to the hospital, a fact which was not controverted by Dr. Bandojo. As regards to patient Adam Stephen Chiu, his grand uncle Victor Chiu, hospital accountant, executed an affidavit alleging that he was responsible for his nephew’s hospitalization and that the balance of his unpaid medical bills were to be offset against his professional fees.

The NLRC concluded that Pardillo caught the ire of Dr. Bandojo when the latter witnessed Pardillo’s subordinate Natividad Ladaban punched in her superior’s time card. The NLRC held that while such act was a violation of the hospital’s policies, it did not amount to the willful breach of trust that would justify dismissal from employment.

The NLRC also noted that during the time-card incident, Pardillo was actually present in the hospital premises. This negated the perception that she had the intention to be absent that day and directed her subordinate to punch in her time card to make it appear that she was present.

On the issue of tardiness, the NLRC found that Pardillo was able to explain the same. The NLRC held that there was a memorandum which allowed her to arrive late because she first attended to outside activities related to her functions like PhilHealth and bank transactions. The NLRC ordered Pardillo’s reinstatement with full backwages, inclusive of allowances and other benefits and attorney’s fees.

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Dr. Bandojo filed a Motion for Reconsideration (MR) which was denied by the NLRC. The NLRC however, modified its earlier Decision as to the order of reinstatement. Pardillo had manifested that her relationship with her former employer Dr. Bandojo had become strained and prayed for separation pay in lieu of reinstatement. Dr. Bandojo did not controvert this.

Thus, the NLRC granted her prayer for separation pay in lieu of reinstatement. Aggrieved, Dr. Bandojo elevated the case to the CA via petition for certiorari under Rule 65 of the Rules of Court.

CA Ruling:

The CA granted the petition.

The CA held that Dr. Bandojo was able to prove with substantial evidence that Pardillo’s termination was for a just cause. The CA ruled that Dr. Bandojo was able to prove the habitual tardiness of Pardillo which resulted in her neglect of duties and poor work performance.

As a managerial employee, the CA held that Pardillo should be a sterling example of honesty, trustworthiness, and efficiency in the workplace. The CA also found that Pardillo’ s act of ordering her subordinate to punch in her time card was an act of falsification.


Whether or not there is loss of trust and confidence when the employee was able to explain sufficiently the charges

Whether or not failure to issue another NTE for the new charges in the Notice of Termination violates procedural due process

SC Ruling:

The SC granted the petition.

The SC held that Article 297(c) of the Labor Code allows an employer to terminate the services of an employee on the ground of loss of trust and confidence. There are two requisites for this ground: first, the employee must be holding a position of trust and confidence; and second, there must be a willful act that would justify the loss of trust and confidence which is based on clearly established facts.

Pardillo’s status as a managerial employee holding the position of Business Office Manager was never disputed in this case. The pivotal issue thus before the Court is the existence of the second requisite.

In Prudential Guarantee and Assurance Employee Labor Union vs. NLRC, the Court expounded on loss of trust and confidence as a ground for dismissal. In Etcuban Jr. vs. Sulpicio Lines, the Court has also distinguished the treatment of managerial employees and rank-and-file personnel with regard to the ground of loss and trust and confidence.

Thus, there must be some basis or reasonable ground to believe that the employee is responsible for the misconduct and the breach or act complained of must be related to the work performed by the employee. Although the employer is given more leeway in the dismissal of managerial employees on the ground of loss of trust and confidence, the dismissal must not be based on the mere whims or caprices of the employer. The dismissal must have reasonable basis.

In illegal dismissal cases, the burden to prove that the termination of employment was for a just and valid cause is on the employer. In this case, the Court held that the CA committed reversible error in overturning the findings of the NLRC. After a judicious review of the facts as borne by the records, the Court found that Dr. Bandojo failed to prove with substantial evidence Pardillo’s alleged acts which led to loss of trust and confidence.

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The records show that in a NTE Pardillo was made to explain her alleged tardiness. Pardillo replied in a letter apologizing for her tardiness. However, in the notice of termination Dr. Bandojo indicated the following grounds for Pardillo’s dismissal:

“1. Loss of trust and confidence

  1. Habitual tardiness
  2. Texting insulting words to me, your employer
  3. Uttering offensive words against me, your employer
  4. Texting me, threatening to kill me or any of my family”

The inclusion of the new allegations in the notice of termination was not sufficiently explained by Dr. Bandojo. The notice does not also state the alleged acts purportedly committed by Pardillo which resulted in loss of trust and confidence.

Pardillo was not served with any NTE so that she could proffer her defense with regard to the new allegations. Dr. Bandojo also did not expound on the allegations regarding the insults and threats to her life and her family, in the pleadings that she filed before the labor tribunals and the courts. To the mind of the Court, these circumstances cast serious doubt on the veracity of Dr. Bandojo’s contentions in the notice of termination.

The Court also affirms the findings of the NLRC regarding the allegation of habitual tardiness. In order to justify the dismissal of Pardillo, Dr. Bandojo submitted several notices from as early as 1994 addressed to Pardillo regarding her tardiness which allegedly amounted to 16,333 minutes. However, as correctly held by the NLRC, Pardillo was able to explain the reason why she could not come to the office on the scheduled time because it was necessary for her to go directly to the bank or to the PhilHealth office to perform official business for the hospital.

Moreover, the letter dated October 30, 2010 sent by Dr. Bandojo to Pardillo supports Pardillo’s claim that she had a flexible work schedule stating that Pardillo’s usual 8am-12pm, 1pm-5pm schedule of duty hours would resume effective November 1,2010. Further, that all other schedules granted or allowed in the past per Pardillo’s various requests and which have been granted and adjusted to suit your past request in your schedule of duty hours became moot and academic. Both agreed of Pardillo’s new schedule of duty hours as 8-12 in the morning and 1-5 in the afternoon, Monday to Saturday.

The records do not indicate when Pardillo’ s flexible schedule was granted, but the above letter satisfactorily confirms that Pardillo was allowed some leeway in her work schedule as her job required her to go to government agencies and banks to process transactions of the hospital. The tardiness of Pardillo earlier than October 30, 2010 cannot thus be taken against her because prior thereto, she was not strictly required to be at the office from 8:00 A.M. to 12:00 noon and 1 :00 P.M. to 5:00 P.M. The letter refers to the 8:00 A.M. to 5:00 P.M. scheme as Pardillo’s “new” schedule.

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Valid-Dismissal-of-Emloyees-by-Atty-Elvin-B-Villlanueva-2nd-Edition by Atty Elvin B. VillanuevaPardillo was also sent a document entitled “Warning: This is your nth offense” on August 10, 2010 regarding her tardiness on several dates. However, the warning itself contains the following proviso: “Suspension to Termination will be meted out to erring personnel who incurred tardiness beyond the allowable limit unless you can prove to management that your tardiness was due to laudable acts beneficial to the hospital business and service.”

This confirms that the hospital policy recognized that there may be reasonable grounds for an employee’s tardiness, which includes performing tasks beneficial to the hospital outside of its premises. The Court also observes that the warning did not contain a notice to explain but was merely a notice to Pardillo that she had been tardy on specific dates. With regard to the other allegations of Pardillo, the Court quotes with approval the findings of the NLRC.

The absence of any NTEs on the new allegations (i.e., failure to process PhilHealth claims, attempting to borrow money for personal use, and allowing the release of patients with unpaid hospital bills without any promissory note, uttering offensive words and making death threats) can only be described as bemusing.

If the less serious offense of tardiness merited the sending of several NTEs to Pardillo, why was it that Dr. Bandojo did not send any NTEs for the more serious allegations? In her position paper, Dr. Bandojo admitted that the derogatory text messages she received were from an unknown number. She concluded that the sender was Pardillo merely because the messages stopped after Pardillo stopped reporting for work. Dr. Bandojo likewise did not submit these text messages to the labor tribunals or the courts. All in all, it is quite apparent that the loss of trust and confidence in this case was not genuine and was merely used as a convenient means to dismiss Pardillo.

Considering the foregoing, the Court finds that Dr. Bandojo failed to prove with substantial evidence the acts constituting willful breach of company policy, resulting to loss of trust and confidence. Thus, Pardillo’s dismissal was illegal.

The Court is not unaware of its Decision in Alvarez v. Golden Tri Bloc, Inc., in which a supervisory employee was also caught directing his subordinate to punch-in his time card and the Court upheld the validity of his dismissal. However, in Alvarez, the incident for which the employee was disciplined was already his second offense and the Court also considered the totality of circumstances that included several prior offenses committed by the employee relating to product shortages, negligence, and tardiness, which were duly proven with substantial evidence. Thus, it is not on all fours with this case.

Dr. Bandojo also failed to comply with the requirements of procedural due process. Pardillo was served with an NTE that charged her only with tardiness on two dates. However, the notice of termination charged her with additional and more serious grounds of loss of trust and confidence, habitual tardiness, texting insulting words and uttering offensive words to Dr. Bandojo, and threatening to kill Dr. Bandojo and her family.

The additional grounds cited in the notice of termination which were not mentioned in the NTE violated Pardillo’s right to be informed of the administrative charges against her. The NTE and the notice of termination did not state the specific acts that constituted breach of company policies resulting in loss of trust and confidence and the specific company policies that were violated.

The Court notes that there was an earlier memorandum addressed to Pardillo and other officers requesting them to attend a conference to explain the incident in which Pardillo’s subordinate, Mrs. Natividad Ladaban, was caught punching Pardillo’s time card in the bundy clock. However, this cannot be considered the NTE required under the Labor Code.

In King of Kings Transport, Inc. vs. Mamac, the Court elucidated on the required contents of an NTE. The memorandum did not state the grounds for dismissal or disciplinary action, the specific acts of Pardillo constituting breach of company policy, and the actual company policy violated. The memorandum did not also direct Pardillo to submit a written explanation within a reasonable period of time.

In fact, the conference was scheduled on the very next day. Thus, the said memorandum was not a proper NTE. Moreover, after the conference, Dr. Bandojo did not inform Pardillo of her findings or impose any disciplinary action against Pardillo with regard to the allegations about the time-card incident. It was only on November 18, 2010 that Dr. Bandojo sent the notice of termination which included new allegations.

In fine, Dr. Bandojo failed to comply with the requirements of procedural and substantive due process in effecting the termination of Pardillo’s employment. There was no substantial evidence to prove that she committed serious breaches of company policy resulting in loss of trust and confidence. Moreover, Pardillo was not afforded procedural due process.

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