Colegio de San Juan de Letran – Calamba vs. Villas

An employee's alleged violations of study-leave conditions—failure to report on a specific date, failure to enroll in a particular semester, and engaging in part-time selling of insurance and cookware—do not constitute serious misconduct warranting dismissal, especially where the employer failed to serve the two written notices required for procedural due process and where the ambiguous prohibition on "employment" in the employer's own policy is construed strictly against the employer.

Belen P. Villas was employed by Colegio de San Juan de Letran–Calamba as a high school teacher since September 1985. The School's Faculty Manual, particularly Section 40, governed leaves of absence of faculty members, prescribing conditions under which a teacher on leave could be regarded as resigned. The parties were also covered by a collective bargaining agreement providing for grievance procedures and study-leave benefits for qualified teachers.

Belen P. Villas was employed by Colegio de San Juan de Letran–Calamba as a high school teacher since September 1985. On May 15, 1995, she applied for a study leave for six months, from June to December 31, 1995. In a letter dated June 2, 1995, High School Principal Angelina Quiatchon informed Villas that her request was granted for one school year, subject to several conditions: the leave would run from June 5, 1995 to March 31, 1996; it would involve no remuneration from the School; documents justifying the leave should be submitted upon return on April 1, 1996; and Section 40 of the Faculty Manual would be observed, which provided that a faculty member engaging in outside employment during an approved leave would be regarded as resigned, and that failure to return after the maximum twelve-month leave period would likewise result in being considered resigned.

Villas intended to use the first semester of her study leave to finish her masteral degree at Philippine Women's University, but this did not push through. Instead, she took up an Old Testament course in a school of religion and, during her free hours, sold insurance and cookware to augment her family's income. During the second semester, she studied and passed 12 units of education subjects at Golden Gate Colleges in Batangas City. In response to letters from the School requiring her to justify her study leave, she submitted a certification from Golden Gate Colleges and a letter explaining why she took the Old Testament course instead of enrolling in her masteral class during the first semester.

On June 3, 1996, School President and Rector Fr. Ramonclaro G. Mendez, O.P., wrote Villas stating that her failure to enroll during the first semester violated the conditions of her study leave, that her reasons were unacceptable, that her engaging in part-time business instead of studying was sufficient justification to consider her resigned under the Faculty Manual, and that her failure to inform the School beforehand constituted deception. The same letter informed her that she was considered resigned effective school year 1996-1997. Her case was thereafter referred to the grievance committee pursuant to the collective bargaining agreement, which submitted a report on July 12, 1996 to both the union and the School. Because the grievance committee could not reach a decision, the case was referred for voluntary arbitration.

Villas filed a case for illegal dismissal, and Voluntary Arbitrator Apolonio S. Mayuga found that she was illegally dismissed, ordering reinstatement with full backwages. The Court of Appeals affirmed this ruling. The Voluntary Arbitrator and the Court of Appeals both found that Villas did in fact report for work on April 1, 1996 and was enrolled during the first semester—findings that the Supreme Court treated as conclusive and not subject to review.

• Lawful Dismissal: Petitioner argued that respondent's dismissal was lawful because the requirements of due process were followed and she violated several lawful regulations and breached her contractual obligations to the School, all of which constituted a valid ground for dismissal.
• Serious Misconduct: Petitioner maintained that respondent's conduct—failure to report for work on April 1, 1996, failure to submit proof of studies during the first semester, and engaging in employment outside the School—constituted serious misconduct warranting termination under Article 282 of the Labor Code.
• Procedural Due Process: Petitioner argued that it complied with the notice requirement because there were several exchanges of communication between the School and respondent regarding the cause of her termination.
• Factual Findings: Petitioner questioned the Court of Appeals' findings of fact on respondent's alleged violation of the School's policy on study-leave grants.

• Serious Misconduct: Whether respondent's alleged violation of the conditions of the study grant constituted serious misconduct which justified her termination from petitioner School.
• Procedural Due Process: Whether petitioner complied with the procedural requirements for a valid dismissal, specifically the twin-notice requirement under the Labor Code.
• Monetary Benefits: Whether respondent is entitled to six-month study-leave pay, vacation pay, moral and exemplary damages, and attorney's fees.

• Serious Misconduct: No. The alleged infractions did not constitute serious misconduct warranting dismissal, the conclusive factual findings of the CA and VA establishing that respondent reported for work and was enrolled, and her selling of insurance and cookware not constituting prohibited "employment" under the ambiguous Faculty Manual provision construed against the School.
• Procedural Due Process: No. Petitioner failed to serve the first written notice apprising respondent that her dismissal was being sought; the letters sent merely required submission of proof of studies and did not inform her that termination was being considered.
• Monetary Benefits: No. Respondent was not entitled to study-leave pay and vacation pay having waived remuneration, nor to moral and exemplary damages and attorney's fees absent evidence of bad faith or malice attending the dismissal.

• Serious Misconduct: Misconduct is improper or wrongful conduct—a transgression of some established and definite rule of action, willful in character, implying wrongful intent and not mere error of judgment. Under Article 282 of the Labor Code, the misconduct must be serious, meaning of such grave and aggravated character and not merely trivial or unimportant. The CA and VA found that respondent did report for work on April 1, 1996 and was enrolled during the first semester; these factual findings are conclusive on the parties and not reviewable by the Supreme Court, carrying even more weight when the CA affirms the findings of a lower fact-finding body. Findings of quasi-judicial bodies with expertise in specific matters are accorded great respect and even finality, binding unless there is grave abuse of discretion or arbitrary disregard of evidence. Assuming arguendo that she did fail to report and enroll, the most respondent could be charged with was simple misconduct, as there was evidence of substantial compliance. Her failure to report exactly on April 1 was not equivalent to "failure to return for work" under the Faculty Manual, the School having failed to establish a distinct and definite assignment requiring her personal presence on that specific date. Her lapse in not ascertaining her eligibility at PWU before applying for leave was an error in judgment, not serious misconduct; had she intended to use the leave for unauthorized purposes, she would not have enrolled at Golden Gate Colleges in the second semester. Regarding outside employment, the Faculty Manual's use of "employment" was ambiguous—connoting any work or service rendered in exchange for money, potentially covering jobs without an employer-employee relationship—and under Article 1377 of the Civil Code, the term was construed strictly against the School as drafter of the policy. Selling insurance and cookware was not the "employment" contemplated by the prohibition, which was enacted to prevent teachers from using study leave for unsanctioned purposes while being paid; respondent was not being paid by the School during her leave, and her part-time activity could not have prevented her from studying.
• Procedural Due Process: The law requires the employer to give two written notices before terminating employment: the first apprising the employee of the particular acts or omissions for which dismissal is sought, and the second informing the employee of the decision to dismiss. The letters sent by the School—dated April 17, 1996 from Principal Quiatchon, May 10, 1996 from Academic Affairs Director Dr. Rhodora Odejar, and June 3, 1996 from Fr. Mendez—merely required respondent to submit proof of her studies and did not apprise her that her dismissal was being considered. The June 3 letter already informed her she was considered resigned. The grievance committee hearing was conducted after the School had already informed respondent she was considered resigned, and notice to the union was not notice to the employee, since the right to be informed of proposed dismissal is personal to the employee.
• Monetary Benefits: Respondent waived any claim to six-month study-leave pay when she signed conforme to the June 2, 1995 letter stating the study leave involved no remuneration. Since her leave was without pay, she did not earn vacation-leave incentive, which is granted only to teachers who rendered continuous service during the preceding school year. Moral and exemplary damages and attorney's fees were denied because there was no evidence of bad faith or malice attending the dismissal; moral damages are recoverable only where dismissal is attended by bad faith, fraud, or oppression, and a dismissal contrary to law does not by itself establish bad faith.

• Twin Requirements for Valid Dismissal — Under the Labor Code, a valid dismissal requires both substantive just cause under Article 282 and procedural due process. The procedural aspect requires two written notices: the first apprising the employee of the particular acts or omissions for which dismissal is sought, and the second informing the employee of the employer's decision to dismiss. The absence of either notice renders the termination null and void. The Court applied this doctrine to find that the School's letters merely required submission of proof of studies and never apprised respondent that her dismissal was being considered.
• Serious Misconduct as Just Cause for Termination — Misconduct is improper or wrongful conduct, a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, implying wrongful intent and not mere error of judgment. To justify termination under Article 282, the misconduct must be serious—of such grave and aggravated character and not merely trivial or unimportant. The Court found that respondent's alleged infractions—failure to report on a specific date, failure to enroll in a particular semester, and selling insurance and cookware—were at most simple misconduct or errors in judgment, not serious misconduct.
• Conclusiveness of Court of Appeals Factual Findings — The factual findings of the Court of Appeals are conclusive on the parties and not reviewable by the Supreme Court, and carry even more weight when the CA affirms the factual findings of a lower fact-finding body. Findings of quasi-judicial bodies with expertise in specific matters are accorded great respect and even finality, binding unless there is grave abuse of discretion or arbitrary disregard of evidence. The Court applied this doctrine to uphold the CA and VA findings that respondent did report for work and was enrolled during the first semester.
• Construal of Ambiguous Employer Policy Against Employer — Under Article 1377 of the Civil Code, ambiguous terms in a contract or policy drafted by one party are construed against that party. In labor controversies, doubts arising from evidence or interpretation of agreements are resolved in favor of labor. The Court applied this doctrine to construe the ambiguous term "employment" in the Faculty Manual strictly against the School, which had drafted the policy.
• Personal Nature of Notice Rights — The right of an employee to be informed of proposed dismissal is personal to the employee; notice to the union does not constitute notice to the employee. The Court applied this principle to reject the School's reliance on the grievance committee proceedings as a substitute for the first written notice to respondent.

• "Misconduct is improper or wrongful conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment." — This passage provides the canonical definition of misconduct in Philippine labor law, distinguishing willful wrongful intent from mere error of judgment, and is frequently cited in subsequent jurisprudence on termination for cause.
• "The act of respondent in selling insurance and cookware was not the 'employment' prohibited by the Faculty Manual." — This statement applies the doctrine of construal against the drafter (Article 1377, Civil Code) to an ambiguous employer policy, concluding that part-time selling without an employer-employee relationship does not fall within the prohibition on outside "employment."
• "How did the school expect her and her family to survive without any income for one whole year?" — This rhetorical question underscores the equity consideration that informed the Court's reading of the study-leave prohibition, emphasizing that the School's policy could not have intended to bar a teacher on unpaid leave from any income-generating activity.
• "These letters did not comply with the requirements of the law that the first written notice must apprise the employee that his termination is being considered due to a certain act or omission." — This passage articulates the substantive content required of the first written notice in the twin-notice rule, clarifying that mere requests for documents or explanations do not satisfy the obligation to inform the employee that dismissal is being considered.

• Molato vs. NLRC, 266 SCRA 42 [1997] — Followed for the proposition that valid dismissal requires both substantive just cause under Article 282 and procedural due process, including the two-notice requirement.
• Aquinas School vs. Magnaye, 278 SCRA 602 [1997] — Followed for the twin-notice requirement in procedural due process: the first notice apprising the employee of the acts or omissions and the second informing of the decision to dismiss.
• St. Michael's Institute vs. NLRC, G.R. No. 145280, December 4, 2001 — Followed for the definition of misconduct as improper or wrongful conduct, willful in character, implying wrongful intent and not mere error of judgment.
• Spouses Uy vs. Court of Appeals, G.R. No. 109197, June 21, 2001 — Followed for the rule that the factual findings of the Court of Appeals are conclusive on the parties and not reviewable by the Supreme Court, especially when affirming the findings of a lower fact-finding body.
• Violeta vs. NLRC, 280 SCRA 520 [1997] — Followed for the rule that in controversies between labor and management, doubts arising from the evidence or interpretation of agreements are resolved in favor of labor.
• Century Textile Mills vs. NLRC, 161 SCRA 528 [1988] — Followed for the principle that the right of an employee to be informed of proposed dismissal is personal to the employee, and notice to the union is not notice to the employee.

• Article 282, Labor Code — Enumerates the just causes for termination by the employer, including serious misconduct. The Court applied this provision to determine whether respondent's alleged infractions rose to the level of serious misconduct; they did not.
• Article 1377, Civil Code — Provides that if a contract is ambiguous, it shall be interpreted against the party who caused the ambiguity. The Court applied this provision to construe the ambiguous term "employment" in the Faculty Manual strictly against the School, which drafted the policy.
• Section 40, Faculty Manual of Colegio de San Juan de Letran–Calamba — Special provisions on the granting of leave of absence, providing that a faculty member engaging in outside employment during an approved leave shall be regarded as resigned, and that failure to return after the maximum twelve-month leave period shall likewise result in being regarded as resigned. The Court found the term "employment" ambiguous and construed it against the School, and found that respondent's activities did not fall within the prohibition.

Puno (Chairman), Panganiban, Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.