An employee’s guilt or innocence in a criminal case is not determinative of the existence of a just or authorized cause for his dismissal.

Complainant Harland B. Kemplin initiated a labor complaint against his employer defendant United Tourist Promotions (UTP), and its sole proprietor defendant Ariel D. Jersey. Sometime in 1995, Complainant and the late Mike Dunne formed UTP with the help of two American expatriates. In 2002, UTP engaged Complainant to be its President for five years. Even after the period, Complainant retained his position. In 30 July 2009, UTP sent Complainant a letter informing him of the lapse of his contract and its non-renewal resulting in his no longer being employed. Further, the letter directed Complainant to cease and desist from entering the premises due to the various criminal cases filed against him arising of his “inhuman treatment… of the rank and file employees, which caused great damage and [prejudice] to the company.” 

HELD: Defendants were liable as the dismissal was illegal. The notice given was defective. “The charges against [Complainant] were not clearly specified. While the letter stated that [Complainant’s] employment contract had expired, it likewise made general references to alleged criminal suits filed against him. One who reads the letter is inevitably bound to ask if [Complainant] is being terminated due to the expiration of his contract, or by reason of the pendency of suits filed against him. Anent the pendency of criminal suits, the statement is substantially bare. Besides, an employee’s guilt or innocence in a criminal case is not determinative of the existence of a just or authorized cause for his dismissal. The pendency of a criminal suit against an employee, does not, by itself, sufficiently establish a ground for an employer to terminate the former.”

Further, “the letter failed to categorically indicate which of the policies of UTP did [Complainant] violate to warrant his dismissal from service. Further, [Complainant] was never given the chance to refute the charges against him as no hearing and investigation were conducted. Corollarily, in the absence of a hearing and investigation, the existence of just cause to terminate [Complainant] could not have been sufficiently established.”

As for the issue of loss of trust and confidence, Complainant should have been promptly apprised before and not after he was already dismissed. Citing jurisprudence, “[c]onsidering that [the employee] has already been fired, the belated act of LEP in attempting to show a just cause in lieu of a nebulous one cannot be given a semblance of legality. The legal requirements of notice and hearing cannot be supplanted by the notice and hearing in labor proceedings. The due process requirement in the dismissal process is different from the due process requirement in labor proceedings and both requirements must be separately observed x x x. Thus, LEP’s method of ‘Fire the employee and let him explain later’ is obviously not in accord with the mandates of law.”

While reinstatement is the rule, the circumstances of this case warrants the application of the exception of strained relations. As previously held, for the doctrine of strained relations to apply, “it should be proved that it is likely that, if reinstated, an atmosphere of antipathy and antagonism would be generated as to adversely affect the efficiency and productivity of the employee concerned.” In this doctrine, “the payment of separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. On one hand, such payment liberates the employee from what could be a highly oppressive work environment. On the other hand, it releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. Moreover, the doctrine of strained relations has been made applicable to cases where the employee decides not to be reinstated and demands for separation pay.”

In the present case, the doctrine of strained relations is applicable. “Considering that Kemplin’s dismissal occurred in 2009, there is much room to doubt the viability, desirability and practicability of his reinstatement as UTP’s President. Besides, as a consequence of the unsavory accusations hurled by the contending parties against each other, Kemplin’s reinstatement is not likely to create an efficient and productive work environment, hence, prejudicial to business and all the persons concerned.”

Regarding 13th month pay, Complainant is not entitled thereto as he held the position of company president which is a managerial position. Citing caselaw, “[b]eing a managerial employee, the petitioner is not entitled to 13th month pay. Pursuant to Memorandum Order No. 28, as implemented by the Revised Guidelines on the Implementation of the 13th Month Pay Law… managerial employees are exempt from receiving such benefit without prejudice to the granting of other bonuses, in lieu of the 13th month pay, to managerial employees upon the employer’s discretion.”

Citation: G.R. No. 205453, 05 February 2014