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https://www.lawyerly.ph/juris/view/c3040?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09
[ROSITA ARCAS DE MARCAIDA v. PHILIPPINE EDUCATION CO.](https://www.lawyerly.ph/juris/view/c3040?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09)
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101 Phil. 657

[ G. R. No. L-9960, May 29, 1957 ]

ROSITA ARCAS DE MARCAIDA, PLAINTIFF AND APPELLEE, VS. THE PHILIPPINE EDUCATION CO., DEFENDANT AND APPELLANT.

D E C I S I O N

CONCEPCION, J.:

This is an action to recover the sum of P165, by  way' of  separation pay  under Republic  Act  No.  1052.   After due trial, the Municipal  Court  of Manila rendered judgment for the plaintiff.   Defendant,  Philippine Education Co., appealed to  the  Court  of. First Instance  of Manila, with the same result.  Hence, said defendant has brought the  case before Us  for review on a question purely of  law.

The  case had been submitted, by both parties,  for decision upon  a stipulation of facts.  They  agreed:
  1.    That plaintiff  employed the defendant as a sales  clerk in its store  in 1947 and she was continuously in the service until the close of business on August 7, 1954, her salary at that time being P165.00 a  month.
  2.   That due  to  absences  of several employees in the store of the defendant on  August  7,  1954,  Catalino de la Cruz, Assistant Manager  of  the  Retail  Department,  and  after  him,  Harold B. Mannings, Manager of the said  department, asked the  plaintiff to help in another  section of the store which  at  that time was shorthanded due to several absences;
  3.   That the  plaintiff claimed  that she  should  not  be  pushed around and refused to go to the section where  she  was being assigned temporarily;
  4.   That in view of plaintiff's  refusal to follow  the order of the defendant as  above indicated, said defendant thru  its paymaster Laureano Fernandez delivered to  plaintiff  a  memorandum signed by  defendant  which reads as follows:
    'MEMO TO:

    ROSITA A. MAECAIDA

    It is with regret that we notify that your  services with  this company  are terminated as of this date.
    'This drastic  action is of  your own making.
    Many  of  our people  are  out  sick  which of course  necessitates close  cooperation on the part of all employees.
    You were  asked  this morning by  Mr.  Catalino de  la  Cruz to assist in another  section.  You refused.   You  were again asked by  Mr. Manning and  you again refused.
    We  cannot permit  an employee  to defy the  authority  of the management  thereby destroying the factor of control.
    Your pay will terminate as of  5:30  P.M. today and you  are  free to draw your salary from the pay  clerk at your own convenience.

    (Sgd.)  David  &. Gunnel
    General  Manager'
  5.   That by  virtue of  the above  memorandum,  plaintiff's  employment was terminated as of August 7,  1954, that very  day she was notified  of  her separation from the service; "6.  That plaintiff was not paid  a  month's  salary in lieu  of a month's  notice  as provided for  in  Republic Act No. 1052, known as  the Termination Pay Law."
The only issue is whether an employee dismissed, without one-month advance notice, for a just cause imputable to his or  her fault,  such as  insubordination,  is  entitled to the separation pay provided in Republic Act No. 1052, reading;
"AN ACT TO PROVIDE FOR THE MANNER  OF TERMINATING EMPLOYMENT WITHOUT A DEFINITE PERIOD IN A COMMERCIAL, INDUSTRIAL, OR AGRICULTURAL, ESTABLISHMENT OR ENTERPRISE,

"Section  1. In cases  of employment, without a definite period, in a commercial, industrial, or agricultural establishment  or enterprise, neither the  employer nor the  employee shall terminate the employment without serving' notice  on  the  other at least one month in advance.

"The employee, upon whom no such notice was served, shall be entitled to one month's compensation from the date  of termination of his employment.

"Sec. 2, Any contract  or agreement contrary to  the  provisions of section one of this Act shall  be null and void.

"Sec. 3. This Act shall take effect  upon its approval."
The lower  court decided  said  issue in  the affirmative, upon  the authority of Dee  C.  Chuan vs. Nahag et al.,* G.  R. Nos. L-7201 and  7211  (September 22, 1954),  in which we  upheld  the right  of employees  separated from the service, on account of the closing of the  employer's business, to  the  aforementioned separation  pay.   Said decision  is  not controlling,  however, in the  case at bar, for plaintiff herein was dismissed due to  her fault, namely, insubordination,  whereas, the  employees  in  the  Dee  C. Chuan case were separated for a cause  beyond  their control.  It is true  that, in disposing of the Dee  C. Chuan case,  we declared that "whether the  cause of  the termination of the employment is the  closing of business or other justifiable  cause, a laborer  is  entitled to separation pay if the requisite notice is not  given him."   Pursuant  to the principle of ejusdem generis,  the phrase "or  other justifiable  cause''  must  be construed, however, to  refer, not to any justifiable cause, but only to such justifiable causes as  are analogous, similar or  akin to  the  "closing of business."   (Murphy, Morris & Co. vs. Coll. of Customs, 11  Phil., 456; Go Tiaoco y  Hermanos  vs.  Union Ins. Society of Canton, 40 Phil., 40;  Chartered Bank vs. Imperial & National  Bank, 48 Phil., 931; Director of Public

Works vs. Sing  Juco, 53  Phil., 205;  Co  Kim Cham vs. Valdez Tan  Peh, 75  Phil., 371.)   Inasmuch  as  the employee is  not responsible  for  this  cause,  it  follows that the  authority of the  Dee  C. Chuan case,  as  a precedent, must  be  deemed limited to cases  in which the employee is separated for causes  independent of  his will.

The question  varies materially when  the separation is due to malfeasance,  misfeasance or negligence equivalent thereto.  Thus,  for instance, if the  employment is terminated on  account of embezzlement  committed by the employee or  serious  physical injuries illegally   inflicted  by him upon the employer,  would the latter be bound,  either to  retain  him for  another month,  with  notice  that his service would be dispensed with at the end thereof, or to give   him  one  month  separation  pay ?   Common  sense readily suggests a negative  answer.

Plaintiff-appellee maintains,  however, that said question must  be settled  in the affirmative in the light of the legislative history of Republic  Act No.  1052.   In  this connection,  it appears that Senate  Bill  No.  17,1 a  with  which this  legislation  was  initiated,  provided  for said advance notice or separation pay when  the employment was terminated by the employer "for any just cause not attributable to the fault of the employee concerned."   The  bill further specified  the  "just causes for dismissing an  employee". Subsequently, Senator  Primicias,  the  original author of said, bill, and Senator Tañada, introduced an  amendment by  substitution  the  main  feature  of  which  were  the amendment of the title, which  stated  specifically that the measure referred to the termination of services "for causes not attributable  to the fault  of the employees"; a provision excluding from the operation of the Act those cases in  which the employees are  granted better or  more  ad- vantages under  other  laws;  and  the elimination  of  the section enumerating the just causes  for  dismissal.
 
Still later, Senator Sumulong introduced an amendment to the amendment by  substitution,  which, eventually,  became Republic Act No. 1052.   Inasmuch as the latter does not require that the  separation be "for any just  cause  not attributable to  the  fault of  the employee" or  "through no fault of his own/' plaintiff concludes that the lawmaker intended to give the employee the  benefits of the advance notice and  separation  pay  provided in Republic Act  No. 1052, regardless  of whether or not he is to blame for  the termination of  his  employment.
 
 The  force of  this argument cannot  be denied.   How- ever, a careful  review of the legislative proceedings relative to said  statute  fails to reveal  anything tangible apart  from the omission  above mentioned in support of plaintiff's pretense.  On the other hand, several members |of Congress expressly favored the limitation of the benefits y    in  question to employees separated without  any fault on their part.  Thus, Senator  Montano said:
"I think that every senator will agree  with me when  I  say that any employee of this country who is separated from his  employment should  at least be  given  a one month compensation, if  the separation was not due to any  fault  of  the employee and  without any advance notice given  to him by the employer.  I  think on  this general  principle  all  the members  of  the  Senate can  agree." (Italics ours.) (CongressionalRecord for the Senate Vol. I, p. 268.)
Senator Tañada and Senator  Primicias even  amended the  original bill  so  that" its very  title  may  specify  the limitation  above referred  to.

More significant,  still, is the  fact that none of the members of Congress  objected to the aforementioned qualification.   Thus,  the  lawmakers  indicated  their  conformity therewith.   Indeed,  the  introduction and   adoption of the Sumulong Amendment was due exclusively to the need of  "making  reciprocal  the  requirement  of notice  by the employer or  by the employee, in case the  contract of employment" is  not  for a definite  period.13  (Congressional Record for the Senate, Vol. I, pp. 394-395.)   Said amendment did  not explicitly declare that  the  separation  must be  due to causes  not attributable to the fault  of  the employee,  because no such requirement appears  in  Article 302  of  the  Code of  Commerce,3 and Republic Act  No. 1052  was  passed to  fill  the "void"  or  "gap"4 resulting from  the  repeal of  said  provision  by  the Civil  Code of the Philippines.5  In   the words  of Senator Primidas, the bill,  which became Republic Act No. 1052,  had merely the purpose of  "restoring  the  sense and spirit of  Article 302 of the  Code of Commerce," which,  although  silent on the cause of the termination of the  employment,  has been repeatedly held to apply  only to employees separated without any fault oil  their part (Lopez vs.  Roces, 73 Phil., 605, 1 Off. Gaz.  [October 1942]  672; Sanchez vs. Harry Lyons Construction Inc., 87 Phil.,  532, 48  Off.  Gaz., 605-607; F. del Puerto  vs.  Gregg  Car Co. Inc.,  40  Off.  Gaz.,  12th Supp.  [No.  18],  pp.  103, 105-106).

The intention  of Congress to exclude from  the benefits of Republic Act 1052  those employees  removed  for  good cause,  imputable to  them,  becomes more manifest when we consider that the original Senate Bill No.  17  referred, in its title,  to  "dismissed employees," and that the term "dismissed" was substituted, in the  amendment by substitution, introduced  by Senators Primieias  and Tanada, by the verb  "terminated," which  was,  also, used  in the Sumulong amendment to  said  amendment.   Referring to the word   "dismissed",  Senator Montano  explained  that  it "gave  an idea that the  separation  of the employee was" due to a  "misdemeanor  committed  by"  him  whereas the word "separated" is  "more descriptive of the intention of the bill under consideration."   Senator Sumulong, in turn, stressed the "distinction  between termination of employment, dismissal for cause  and lay-off."  He said:
"* *  * Those  are  three different  matters which, are  treated  by our  laws differently  because  they cover different  situations  In the case of dismissal * * *  even if the employment is not yet terminated, even if the employment is in force, the employer  can dismiss for just cause.  *  *  *  But  when an  employment  is  terminated you  do not  need  to show cause because  that is the agreement of the parties, that upon a certain date the employment will terminate and you do not need  to show  cause.   * * * I believe the provision of section 1  of  the amendment by substitution covers  more  precisely the situation of a lay-off, rather than  termination  of employment.   Suppose an employee and an employer enter  into a contract for a definite period of one year.  But. then when they began  the business, somehow circumstances supervened which made it  impossible for the employer to produce as much  an he  was expecting to produce.  *  * *  the demand became  less, or *  *  * raw  material that he was  expecting * * * could not be gotten because  he could not get an import control license.  So it  became necessary for him to reduce personnel  because  his  output  became  less  due to the reduction in  demand  and in the raw materials coming from  the United  States to the  Philippines.  That would  be a  good  case covered  by Section 1, because in  case of a lay-off, the employer should show  that  it has been  made for a good  cause and that  the employee was without fault.   It is not the  fault of the  employee that business lagged,  and yet  under such a situation our courts by constant jurisprudence  has always given the  employer  the right of lay-off a certain number of personnel in order to be able to  continue business.  * *  *."  (Cong.  Rec. for the  Senate,  Vol.  1,  pp. 322-323; Italics ours.)
Thus, Republic Act No. 1052 makes reference to termination  of  employment,  instead of  dismissal,  precisely to exclude employees  separated  from the services for causes attributable to  their own  fault.

Again, Republic  Act No.  1052 is limited,  in  its  operation,  to cases  of  employment without a definite period. When  the  employment is for  a fixed duration,  the  employer  may terminate  it, even  before the  expiration of the  stipulated period, should there be  a substantial breach of  his  obligations  by the employee (Articles 1169, 3191 and 1198, Civil Code of the Philippines; Pabalan  vs. Velez, 22  Phil., 29;  Gonzales  vs.  Haleerer, 47  Phil., 380; Hodges vs.  Granada,  59  Phil.,  429;  De  la Cruz vs.  Legaspi,  98 Phil., 43, 51 Off.  Gaz.,  6212), in  which  event the latter as not entitled to advance notice or separation  pay.   It would patently, be absurd to grant a right thereto  to an employee guilty of the  same breach  of obligation, when the employment is without  a definite period, as if  he were entitled to greater  protection than  employees engaged  for a fixed duration.

Lastly, in the words of the Secretary of  Justice:

"The right to dismiss an employee for cause  is  inherent in every employer. As  announced  in  tho leading  case  of  Manila, Trading . Company  vs.   Zulueta,  40 Off.   Gaz.,  6th   Supp.,,  .1,   183, Sept. 6, 1341,  an  employer  cannot  be legally  compelled  to continue with the employment of  a person  guilty of misfeasance  or malfeasance towards his  employer, and whose continuance in tho  service of the latter is  patently inimical  to  his interests.  'The law,  in  protecting the right of the laborer,  authorizes  neither oppression nor self-destruction of the employer,1   And in line with the above doctrine, it was further held in Philippine! Sheet Metal  Workers  Union  vs. Court of Industrial Relations, G.K. No.  L-2028, 46 Off. Gaz., No. 11,  p. 5462,  that the right to dismiss cannot be denied  when it is shown that the laborers are not discharging their duties in a manner consistent with  good  discipline and  the efficient  operation of the industrial enterprise.   (See also:  Manila Chauffeur's League  vs. Baehrach Motor  Co.,  40 Oft'.  Gaz., 7th Supp.,  p. 159; Jacinto  vs. Standard Vacuum OiJ Co., 40 Off. Gaz., 9th Supp.  p. 20; Batangas Transportation  Co.  va.  Bagong  Pagkakaisa, 40 Off. Gaz.,  Oth Supp. p. 51; and  Cy  Pac.  vs. Katipunan, 40 Off. Gaz., 13th Supp., p. 82).

"It could  not have been the  intention of  Congress in  enacting the aforecited Act to curtail that right by requiring an  a condition precedent to  its exercise  that  notice be served one month in advance, or a  month's compensation  be  paid in  lieu of notice, to the erring  employee. Such a requirement would  be manifestly  an reasonable and  oppressive upon the employer." (Italics ours.)

To put it  differently, it is doubtful  whether  Congress  could validly  require the  employer  to give  the separation pay in question,  if  the employment were terminated due

to the fault  of the employee.  Indeed, the  imposition of' said obligation, under  such  conditions,  would  open  Repubiic Act No.  1052 to the  charge that  it" constitutes an unreasonable restrain  upon  the liberty of  the  employer, and a deprivation of  his property, without due process of  law.

Wherefore,  the decision  appealed  from is hereby  re- versed, and another  one  shall be  entered, dismissing1  the complaint, ' with  costs  against  the  plaintiff.   It  is  so ordered.

Padilla, Montemayor,  Reyes, A., Bautista Angelo, Labrador, Rayes, J. B. L., Endencia and Felix, JJ., concur.



*95 Phil., 837.
1 Said Senate Bill No. 17 provided: "AN ACT TO PROVIDE ONE MONTH'S  COMPENSATION  TO DISMISSED EMPLOYEES  AND LABORERS.

"Be it enacted by the Senate and House of Representatives of  the Philippines  in  Congress  assembled:
"Section 1, The  employment, without  a term or period, of any pefson in a  commercial,  industrial,  or  agricultural establishment or  enterprise may  be terminated  at  the will of the employer  for any just cause  not  attributable to the fault of the employee concerned by serving1 notice on  him  at  least  thirty days in advance.

Sec. 2. Any employee or laborer of a  commercial, industrial, or agricultural  establishment or enterprise,  who is employed without  a term or period  and who  voluntarily  leaves  the service of  his employer,  shall  be  entitled to compensation up  to  the last day of service rendered.
"Sec. 3. Any  employee  or laborer  of a  commercial, industrial, or agricultural  establishment or  enterprise,  who is  employed without a term or period, shall be entitled to one month's salary or  wage, if he is dismissed from his employment for  any just cause through no fault of his  own,  and  without  advance notice  of  at least  thirty days.  Any contract  or agreement renouncing this  right shall  be null and  void.

"Sec. 4. The following are just causes for dismissing an employee or laborer:

"a. Fraiid  or  willful breach of duty in  the course  of his employment.
"b. Gross  and habitual  neglect  of his  duties.
"c. Continued  incapacity to perform his  work.
"(d. Any other just cause.) "Sec.  5. This  Act shall take1  effect upon  its approval."
2 The substitute bill was of the following tenor:
"AN ACT TO REQUIRE EMPLOYEES TO PAY ONE MONTH'S COMPENSATION TO  EMPLOYEES AND LABORERS EMPLOYED WITHOUT  A  TERM WHOSE SERVICES HAVE BEEN TERMINATED FOR  CAUSES  NOT ATTRIBUTABLE TO  THE FAULT  OP THE EMPLOYEES OR LABORERS  CONCERNED.
"Be it enacted  by  the Senate and House  of Representatives of the Philippines  in  Congress Assembled:
"Section 1. All  employers  who shall  terminate the employment of persons employed without  a term  or period in  commercial,  industrial or  agricultural establishments or enterprises  for  any  cause now allowed by  law, but  not attributable to  the fault of the  employees or laborers concerned,  shall  be  required  to serve notice on the latter at least thirty  days  in  advance, otherwise they shall  pay the said  laborers and employees one month's  salary or wage from the date  of the  actual termination of their  services.
"Sec,  2. The provisions  of this  Act  shall  apply when the  employees  or  laborers concerned  are not granted better or more advantageous  rights  and  privileges under  other existing laws of the Philippines.

"Sec.  3. This Act  shall  take  effect upon its  approval."

3 Article 302 of the Code of Commerce provides:
"In cases  in  which the  contract does not have a fixed  period, anyone of the   parties  may  terminate it  upon giving  one  month. advance notice thereof to the other,
"The factor or shop  clerk  shall  have a right, in .this case,  to the salary corresponding' to  said one month."
4 The explanatory note to  Senate Bill No. 17 stated:
"In repealing the provisions of the Code of Commerce on agency, including Article 302  thereof  governing the payment of one month's salary to dismiss employees, the new Civil Code provides in  Article 1710 that the 'dismissal' of laborers shall be subject to the supervision of  the government, under special laws.' But, when the said Civil Code took effect,  no  special  law was enacted to  protect  the rights of  many  workers who, since then, have been dismissed from their employment without the benefit of one month's compensation.

"To fill the void left by the enforcement of the aforesaid Code, immediate approval  of  the  attached  bill  is, therefore, strongly recommended."

In his sponsorship speech on said bill, Senator i.lontano declared that it was "intended to fill a gap in our legislation, because of the repeal of that provision of the Code of Commerce" referring  to section 302 thereof "giving- one month's compensation  for laborers  who have been separated from their employment."  (Congressional Record for the Senate, Vol.  I, p. 269.)
Senator Primielas,  author  of  said bill, and  Senator Sumulong author of the  amendment to the  amendment by  substitution, which because Republic Act  No. 1052, confirmed said  statement of Senator Montano (Cong', liec. for  the Senate, Vol. I,  pp. 317 and 318).
5 Indeed, in Lara vs. Canlas, (94  Phil., 778) we held:
"As to the month pay (mesada)  under Art. 302 of the  Code of Commerce, Article 2-270  of the new Civil Code (Republic Act 386) appears to have repealed said  Article  302 when  it repealed the provisions of the Code of Commerce  governing Agency.  This repeal took place on August 30, 1950, when the  new Civil Code went into effect, that is one year after its  publication  in  the Official Gazette."
1 In his opinion  No.  33, dated . September  3,  1954.

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