190 GILLES v.

CA following conditions, in the absence of a collective bargaining

G.R. No. 149273 | June 5, 2009 | Nachura, J. agreement or arbitration award:
1. That payments are made at intervals not exceeding sixteen
Petitioner: Bienvenido C. Gilles (16) days, in proportion to the amount of work completed;
Respondents: Court of Appeals, Schema Konsult, and Edgardo Abores 2. That final settlement is made upon completion of the work.
The Case: Petition for Certiorari

SUMMARY Art. 282, LC

Gilles worked as the principal engineer of SKI. He was assigned as a Termination by employer - An employer may terminate an
Water Systems/Irrigation Engineer for a project in India. However, he employment for any of the following causes:
ended up not receiving any salary for 3 ½ months. Consequently, he a. Serious misconduct or willful disobedience by the employee of
decided to resign from his position as the project engineer – he was the lawful orders of his employer or representative in
instructed to stay till a replacement was found, but he opted to leave connection with his work;
immediately. Later, the Board of Directors of SKI met; the Board b. Gross and habitual neglect by the employee of his duties;
decided to terminate Gilles’ employment. Gilles filed a complaint for c. Fraud or willful breach by the employee of the trust reposed in
illegal dismissal. The Labor Arbiter held that Gilles had been illegally him by his employer or duly authorized representative;
dismissed. This decision was affirmed by the NLRC. However, the CA d. Commission of a crime or offense by the employee against the
later reversed, holding that the case involved an inter-corporate person of his employer or any immediate member of his family
dispute, and was thus cognizable by the CA; and, that Gilles had not or his duly authorized representatives; and
been illegally dismissed, in view of the fact of his resignation prior to e. Other causes analogous to the foregoing
the finding of a replacement.
PARTIES
The SC reversed the CA. Although Gilles non-compliance with the Schema Konsult, Inc. (SKI): a project consulting, management, and
lawful order of SKI requiring Gilles to stay in India till a replacement had supervision services firm vis-à-vis industrial plants, installations,
been found falls under Wilfull Disobedience as a ground for infrastructure, and development projects
termination, this was preceded in time by Gilles’ constructive dismissal Bienvenido Gilles: incorporator, stockholder; at various points was
– through the non-payment of wages for 3 ½ months. Neither could member of the board of directors, VP for Finance, and Principal
Gilles have been dismissed under the ground of neglect of duties – the Engineer of SKI
act of neglect only happened once, and it was not gross nature. Edgardo Abores: President of SKI

FACTS:
PROVISIONS/DOCTRINE SKI entered into an agreement with Carl Bro Int. (CBI), a Danish
corporation that had a joint venture agreement with Aquatic Farms
Art. 103, LC Ltd (AFL) to give consultancy assistance on the “Shrimp and Fish
Time of payment. - Wages shall be paid at least once every two (2) Culture Project” of India.
weeks or twice a month at intervals not exceeding sixteen (16) days. If  The (government-backed) project involved the development
on account of force majeure or circumstances beyond the of shrimp farms in various parts of India.
employer’s control, payment of wages on or within the time herein  CBI contracted with SKI to provide a qualified aquaculture
provided cannot be made, the employer shall pay the wages engineer for the project.
immediately after such force majeure or circumstances have ceased. o Gilles was chosen to be the Water Systems/Irrigation
No employer shall make payment with less frequency than once a Engineer
month.  Contract:
The payment of wages of employees engaged to perform a task  2 years, beginning 24 January 1993
which cannot be completed in two (2) weeks shall be subject to the
  CBI would pay SKI a monthly fee of 4,000  And this was in the context of Gilles having
USD – Gilles’ basic salary of 2,500 USD been booked to stay in 5-star hotels – he had to
would be taken from said fee spend 4,200 USD on hotel accommodations for
 During Gilles’ first 60 days in India, he 60 days.
would receive a subsistence allowance o He felt abandoned by SKI.
of 87 USD per day to defray his expenses  Gilles asked for separation pay (1 mo./year of service) as well
for accommodation etc. as other benefits normally given to leaving employees..
 Gilles would be considered as a regular o He also asked to be given the unpaid 3 ½ months
employee of SKI, but all the condition in salary.
the agreement between SKI and CBI  On the other hand, Abores explained that management was
would apply unaware of the alleged difficulties.
o He said that Gilles never communicated his experience
January 1993, Gilles left for India. – officially or otherwise.
 He received 5,000 USD from SKI as an advance of his  The board decided to terminate the services of Gilles, effective
subsistence allowance for the first couple of months. 7 June 1993.
o He also received ~P43k twice, to cover his expenses for o A notice of termination was sent to Gilles.
April and the first half of May 1993.
 On 10 May 1993, however, Gilles tendered his resignation letter Gilles filed a complaint for illegal dismissal against SKI and Abores,
to Mr. Schou of CBI because of financial and personal seeking reinstatement and moral damages and other monetary
problems that affected hiw physical condition and capacity to claims
concentrate on his work.  Claimed that there was a deliberate scheme to ease him out
o On 11 May 1993, he left India for the Philippines even of the project and ultimately out of SKI.
before finding a replacement  His salary from the project was not given to him on time even if
o A few days later, Schou faxed a letter to Abores, he tried to communicate with SKI
informing the latter of Gilles’ departure.  The 20 March 1993 Election of officers was not relayed to him –
 According to Schou, the Indian Government which resulted in his failure to attend the meeting or to send a
and AFL had reported that Gilles had rendered proxy.
very unsatisfactory work in the weeks leading o Consequently, he was not elected as an officer of the
up to his departure. company.
 He also alleged that the 19 May 1993 BoD Meeting was a hoax
On 15 May: a board meeting was called to discuss Gilles’ resignation – never having taken place.
from the project in india.
 In a letter written by Gilles (dated 15 May 1993) and read out SKI and Abores’ counterarguments:
lound by Abores, Gilles explained why he decided to leave his  Gilles was well provided in India
work in India, even before a replacement could be found:  Resignation from CBI and departure from India were not
o The project advisor to the World Bank and the Indian approved by SKI.
government committed to a very demanding schedule  19 May meeting was real.
– Gilles ended up having to work 18 hours a day, 7 o Gilles had been informed – and his side had been
days a week just to keep up. heard.
o CBI had not paid his salary for 3 ½ months, nor had it  Gilles had been asked to step outside for
paid Gilles’ subsistence allowance. displaying a temper.
 This made it difficult for Gilles to support his 80  That SKI had given Gilles what was due to the latter – even if
year old mother and his other relatives, as well CBI had yet to pay the consultancy fees.
as to pay various loans in a timely manner.
The Labor Arbiter decided in favor of Gilles. duties which the employee had been engaged to
 It ordered the reinstatement of Gilles as VP, and awarded full discharge.
backwages (P1.274M); it also awarded P500k as moral  Alleged act of willful disobedience: leaving the project (India)
damages, and P127,400 as atty.’s fees. despite the clear and lawful instructions of management for
 In the event that reinstatement was improbable – it held that him to stay.
Gilles should be awarded separation pay (1/2 Month o SC: this was willful disobedience, BUT…
salary/year of service). (Important part)
 SKI violated Art 103, LC because it was remiss in paying
The NLRC affirmed the decision of the Labor Arbiter, the only compensation of Gilles on time. Based on the findings of fact
modification being the reduction of moral damages to P100k. of the Labor Arbiter, as confirmed by the NLRC, Gilles was not
paid his salaries for the three and half (3 ½) months of his stay
The CA annulled and set aside the NLRC’s decision. in India
 The appellate court held that the case involved an intra- o Note that Art. 103 mandates that wages shall be paid
corporate dispute exclusively cognizable by the SEC. at least once every 2 weeks – with payment every 16
 It also held that Gilles had not been illegally dismissed, days as the longest allowable interval. Art. 103 also
considering that he had resigned from his assignment even states that no employer shall make payment with less
before a replacement could be found frequency than once a month.
o Gilles’ departure from India, despite the instruction of
ISSUE/RATIO SKI for him to stay, was impelled by the financial
difficulties he encountered thereat
1) Does the NLRC have jurisdiction over the illegal dismissal case? o The money given to Gilles before leaving for India was
YES. already spent. His salary was only given to him when he
What Gilles sought was reinstatement, backwages, and damages. He got back in the Philippines.
did not seek to retain his seat in the BoD – this was not an intra-  Rickie Sarque, the Chief Accountant of SKI,
corporate dispute. The Labor Arbiter, however, erred in ordering Gilles’ admitted on the witness stand that Gilles was
reinstatement as VP – Gilles asked to be reinstated as Principal paid his salaries for the 3 ½ months when he was
Engineer. already back in Manila. Added to this were the
problems he encountered due to the
acceleration of the job completion period, the
2) WAS GILLES ILLEGALLY DISMISSED - YES obligations he had to meet at home for his
aged mother at that time, now deceased, and
2 requisites of a valid termination: the relatives who needed his financial support.
1. Dismissal is for any of the just causes provided under Art. 282 Clearly, Gilles had a valid reason to leave India.
(must be supported by clear and convincing evidence);  The Agreement not only clearly expressed that
2. Employee must be afforded an opportunity to be heard and Gilles would still be principally employed by SKI –
to defend himself. the principal employer has the responsibility of
paying the employee’s salaries.
Gilles was terminated for willful disobedience of lawful order, one of o For neglecting its duties as an employer, SKI may, thus,
the just causes under Art. 282, LC be considered to have acted in bad faith. It may be
 Elements of Willful Disobedience: deemed as utter disregard by SKI of the welfare and
1) Assailed conduct must have been willful – well-being of its employee, especially at a time when
characterized by a wrongful and perverse attitude; he was far away from home.
2) Order violated must have been reasonable, lawful, o Thus, Gilles had been constructively dismissed.
made known to the employee, and must pertain to the
  “Constructive dismissal exists when the
employee involuntarily resigns due to the harsh,
hostile, and unfavorable conditions set by the
employer. It arises when there is clear
discrimination, insensibility, or disdain by an
employer and this becomes unbearable to the
employee.”
 Test: “whether a reasonable person in
the employee's position would have felt
compelled to give up his position under
the circumstances.”
 SKI showed utter disregard of the welfare and
well-being of its employee.

Gilles was not guilty of neglect of duty because neglect of duty must
not only be gross but also habitual.
 In this case, he only neglected his duty once and because of
financial problems.
o He did not have any prior derogatory record.

Art 279, LC mandates that an employee who was unjustly dismissed

from work shall be entitled to reinstatement, without loss of seniority
rights and other privileges, and to his full backwages, inclusive of
allowances, as well as to other benefits or their monetary equivalent
computed from the time his compensation was withheld up to the
time of his actual reinstatement.
 In case at bar, reinstatement is not possible so an award of
separation pay in lieu of reinstatement equivalent to one
month pay for every year of service in addition to full
backwages allowances and other benefits is in order.

There being no proof that Abores acted with malice or bad faith – he
is absolved.

Dispositive:

Assailled decision SET ASIDE.