WILLFUL DISOBEDIENCE ARISES WHEN AN EMPLOYEE UNJUSTIFIABLY REFUSES TO PROVIDE BUSINESS INFORMATION TO THE COMPANY’S CEO

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Willful disobedience requires the concurrence of the following: the employee’s assailed conduct has been willful or intentional, the willfulness being characterized by a “wrongful and perverse attitude;” and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge.

Thus, the SC held in the following case:

Agayan vs. Kital Philippines Corp.
G.R. No. 229703, December 4, 2019

Willful disobedience; Refusal to provide the Chief Executive Officer (CEO) of the names the Relations Manager of an associated company amounts to willful disobedience; The CEO of the company had every right to obtain this kind of information; Will breach of trust;

Facts:

Respondent Kital Philippines Corporation (Kital) is a domestic corporation in the business of importing and exporting telecommunications, medical, cosmetic, and dental equipment, among others. Respondents Ricardo Consunji III (Consunji) and Jocelyn Cavaneyro (Cavaneyro) are the President of Kital and Head of Accounting, respectively (collectively, Kital, et al.).

Petitioner Editha Salindong Agayan (Agayan) was hired by Kital to work as Head of Telecommunications. Prior to her dismissal, she was supposedly earning a monthly basic salary of PhP80,000.00, excluding other benefits, as well as commissions on sales based on the amount collected.

Agayan averred that, sometime in 2014, she received information of anomalies and dishonesty committed by Cavaneyro, specifically, that the latter had been terminated due to four (4) counts of dishonesty. She reported her findings to Consunji for verification but the same was not acted upon. Thereafter, Consunji’s behavior became irritable as he would shout at and bully her.

In one of the instances, Agayan alleged that Consunji demanded of her to provide the names of Kital’s Relations Managers (RMs), which are employees of other companies that assist Kital in doing business in exchange for a commission. She did not provide the information asked of her as she believed it was the company’s practice that the RM’s names should be kept confidential, and also that Consunji will use the same information to blackmail her in the future.

Subsequently, the working relationships between Agayan and Consunji worsened. She expressed herconcerns via email to the foreign principal of Kital, a certain Mr. Kuti Mor, and explained that Consunji had assaulted her and threatened her in the office. Eventually, Agayan was served a notice to explain and demanded to vacate the company premises. On September 8, 2014, Kital sent a notice of termination.

Agayan claimed that she was illegally dismissed from employment without just cause due to Consunji’s disdain for her. She insisted that the company was committed to keep the confidentiality of the names of the RMs, and that this was the practice for several years. She did not accede to Consunji’s demand as she feared that the latter will use the same to harass her and cause her to submit to unjust orders. Additionally, she did not breach the trust and confidence reposed on her.

Kital, et al countered, and alleged, among others, that Agayan refused to follow the lawful order of Consunji who had instructed her to provide him with a list of PLDT accounts and names of RMs that handle the accounts. They sent Agayan a notice of preventive suspension charging her with several violations of company policy, directing her to explain the incidents and notifying her of the hearing. Thereafter, a notice of termination was issued against Agayan.

Thus, Agayan filed a Complaint against Kital, et al for illegal dismissal and money claims before the Labor Arbiter (LA).

LA Ruling:

The LA dismissed Agayan’s complaint.

However, the LA awarded Agayan certain sums such as last pay, PLDT leasing unpaid commission, and 10% attorney’s fees. Both parties appealed to the National Labor Relations Commission (NLRC).

NLRC Ruling:

The NLRC modified the LA’s Decision.

The NLRC deleted the PLDT leasing unpaid commission. Agayan sought reconsideration but it was denied. Thus, she filed a petition for certiorari before the Court of Appeals (CA).

CA Ruling:

The CA dismissed the petition and affirmed the NLRC. Agayan filed a motion for reconsideration but it was denied.

Hence, Agayan filed a petition before the Supreme Court (SC).

Issue/s:

Whether or not the refusal by the employee to comply with the order of the CEO to submit the list of managers of an entity associated with the company amounts to willful disobedience

Whether or not a managerial employee is liable for loss of trust and confidence for formulating a business plan which is in conflict with the business operations of the company

Whether or not a managerial employee can justify formulating a business plan which is in conflict with the business operations of the company with a claim that she already had

Whether or not a commission can be applied prospectively

SC Ruling:

The SC did not find merit in the petition.

The SC held that the two-fold requirements for a valid dismissal are the following: (1) dismissal must be for a cause provided for in the Labor Code, which is substantive; and (2) the observance of notice and hearing prior to the employee’s dismissal, which is procedural.

Agayan committed willful disobedience and breach of trust which are just causes for dismissal under the Labor Code. Willful disobedience requires the concurrence of the following: the employee’s assailed conduct has been willful or intentional, the willfulness being characterized by a “wrongful and perverseattitude;” and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge.

Indeed, Agayan’s refusal to provide Consunji the names of the RMs is not justified. She had no reason to keep the information confidenctial from the CEO of the company where she worked for. Consunji, as the CEO, had every right to obtain this kind of information from petitioner, especially, as the latter herself admits that these RMs are non-employees of Kital. The RMs are actually from different companies, but nevertheless, maintain a close association with Kital.

Agayan was the former Telecommunications Head of Kital which is a managerial position. She readily admits to having formulated a business plan which, as found, seemed to be in conflict with the business operations of Kital. In attempting to defend her act, she could only say that she did it because her relationship with Kital was already strained. But for obvious reasons, her justification is not acceptable. It is thus easy to see that there was sufficient basis for the loss of confidence on the part of Kital.

Further, the SC held that Agayan is not entitled to the unpaid PLDT leasing commission. Conforming with the NLRC Decision, the SC held that the PLDT commission should not extend beyond her employment contract. Her computation of the leasing periods is based on the lease period itself, and not the actual lease payments made by the lessors. Although she is entitled to commissions, the same should be based on actual collections. She failed to show proof of actual collections made.