Manese vs. Jollibee Foods Corporation

An appellee who fails to timely appeal a labor arbiter's ruling cannot obtain affirmative relief from the appellate court modifying that ruling in its favor, the unappealed portion having become final and executory. Separately, the dismissal of managerial employees for loss of trust and confidence is valid where substantial evidence supports the employer's basis for believing that the employees breached the trust reposed in their positions, even absent proof beyond reasonable doubt.

Petitioners Cecilia T. Manese, Julietes E. Cruz, and Eufemio M. Peñano II were employees of respondent Jollibee Foods Corporation, holding managerial or supervisory positions at the Jollibee Festival Mall, Level 4 branch in Alabang, Muntinlupa City. Manese was First Assistant Store Manager Trainee, Cruz was Second Assistant Store Manager, and Peñano was Shift Manager functioning as Assistant Store Manager Trainee. The dispute arose from the handling of Chickenjoy rejects — products that had passed their shelf life and could no longer be served — during the store's delayed opening in December 2000.

Petitioners Cecilia T. Manese, Julietes E. Cruz, and Eufemio M. Peñano II were employees of respondent Jollibee Foods Corporation, assigned to open a new branch at Festival Mall, Level 4, Alabang, Muntinlupa City. Manese was hired on September 16, 1996 as First Assistant Store Manager Trainee with a monthly salary of ₱21,040.00; Cruz was hired on May 7, 1996 as Second Assistant Store Manager with a monthly salary of ₱16,729.00; and Peñano was hired on June 22, 1998 as Shift Manager functioning as Assistant Store Manager Trainee with a monthly salary of ₱10,330.00.

The store's opening was postponed thrice, originally scheduled for December 12, 2000. Cruz had requested delivery of wet and frozen goods on December 9, 2000 to comply with the 30-day thawing process for Chickenjoy, but the successive postponements disrupted the schedule. When the opening was rescheduled to December 28, 2000, Cruz, upon the advice of Opening Team Manager Jun Reonal, did not cancel the delivery request. On December 23, 2000, 450 packs of Chickenjoy (4,500 pieces) were delivered and placed in the freezer. On December 26, 2000, Cruz thawed all 450 packs in time for the December 28 opening. The shelf life of Chickenjoy is 25 days from marination; once thawed, it should be served on the third day and cannot go beyond three days from thawing. Remaining products are packed in plastic, ten pieces per pack, placed in garbage bags, and stored in the freezer. Valid rejects are returned to the commissary within the prescribed period, while unreturnable rejects are wasted and disposed of properly.

Despite the postponements, sales targets for December 28 and 29, 2000 — considered peak times — were not revised. The targets of ₱200,000.00 and ₱225,000.00 were not met, as actual sales were only ₱164,000.00 and ₱159,000.00, respectively. Sometime in January 2001, Cruz attempted to return 150 pieces of Chickenjoy rejects to the commissary, but the driver refused to accept them due to discoloration and deteriorated condition. The rejects were returned to the freezer. On February 13, 2001, the area manager conducted a store audit covering all departments, including food stocks and safety, with results rated fair and satisfactory.

During the first week of March 2001, the team held a meeting on what to do with the stored Chickenjoy rejects and decided to soak and clean them in soda water, segregating valid rejects from waste. On April 2, 2001, Cruz was transferred to the Jollibee Shell South Luzon Tollway branch. She estimated the remaining undisposed rejects at about 1,140 pieces as of January 2001, but she failed to make a proper indorsement as the area manager directed her to report immediately to her new assignment. On May 3, 2001, Area Manager Divina Evangelista visited the store and found Peñano cleaning the Chickenjoy rejects. Evangelista instructed Manese to dispose of the rejects, but Manese replied that they be allowed to find a way to return them to the commissary.

On May 8, 2001, Evangelista required Cruz and Manese to submit incident reports. On May 10, 2001, a corporate audit was conducted, declaring 2,130 pieces of Chickenjoy rejects as wastage. On May 15, 2001, Evangelista issued a memorandum with a charge sheet requiring petitioners to explain in writing within 48 hours why they should not be penalized under the company's Code of Discipline for extremely serious misconduct, gross negligence, product tampering, fraud or falsification of company records, and insubordination. Petitioners submitted their respective letters of explanation: Manese attributed the foul smell and discoloration to the breakdown of walk-in freezer facilities prior to the store's grand opening, when the store was operating on temporary power supply; Peñano stated he had no proper training in kitchen management and merely followed Manese's instructions; and Cruz stated that the rejects were only about 1,200 pieces before her transfer and denied involvement in any product tampering, which she said occurred after she was already assigned to the Jollibee Shell branch.

An administrative hearing was conducted by respondents' Human Resource Manager Sylvia Mariano, Operations Manager Elizabeth dela Cruz, and Atty. Rey Montoya. On June 11, 2001, Cruz received a memorandum notifying her of termination due to loss of trust and confidence. On June 13, 2001, Manese and Peñano received similar memoranda terminating their employment on the same ground. Petitioners thereafter filed consolidated complaints for illegal dismissal with various monetary claims.

• Finality of the Labor Arbiter's Ruling on Cruz: Petitioners contended that the Court of Appeals exceeded its jurisdiction in declaring Cruz legally dismissed, because the Labor Arbiter's ruling that her dismissal was illegal had become final and executory when respondents failed to file a timely appeal. Although Cruz filed a partial appeal, the issues raised were limited to reinstatement and backwages.
• Loss of Trust and Confidence: Petitioners Manese and Peñano argued that the Court of Appeals erred in affirming their dismissal on the ground of loss of trust and confidence as managerial employees, when the records showed they were dismissed based on allegations of causing product contamination endangering public health and gross negligence. They asserted that the favorable finding of the area manager in the February 13, 2001 store audit — rated fair and satisfactory in all departments including food stock and food safety — negated the charge of loss of trust and confidence.
• Factual Finding on Serving Period: Petitioners contended that the Court of Appeals erred in finding that they served Chickenjoy beyond the three-day serving period, thus exposing public health to jeopardy.
• Purpose Was Salutary: Petitioners maintained that they did not waste the Chickenjoy rejects but planned to report them to the commissary on a staggered basis; that the commissary driver refused to accept the rejects; that their food cost was relatively high and profit margins low, so they could not declare the rejects as wastes and charge them to the store; and that their purpose was salutary, even offering to pay for the rejects themselves.
• No Product Contamination or Insubordination: Petitioners claimed there was no product contamination because the rejects were packed, wrapped in plastic, placed in garbage bags, then in a crate before being stored in the freezer, and no other wet and frozen items were wasted. They also claimed there was no insubordination, as Evangelista's parting words — "sige kung gusto niyong remedyuhan at makapagsasauli kayo" — were considered the green light to find a solution for proper disposal.

• Available Remedies Not Availed Of: Respondent Jollibee replied that a store can request the return of ordered products to the commissary for re-delivery on another date, especially when there are reasons such as postponement of store opening or defective storage freezers, and can also request nearby stores to accommodate wet products in their freezers. Cruz failed to resort to these remedies.
• Service Beyond Shelf Life: Respondent Jollibee contended that all 450 packs of Chickenjoy were thawed for the December 28, 2000 opening and, since not all were consumed, Cruz allowed the same to be served beyond their shelf life until December 31.
• Valid Dismissal: Respondent Jollibee argued there was no illegal dismissal, as petitioners were dismissed for gross negligence and/or incompetence and for breach of trust and confidence reposed in them as managerial employees.
• Non-Compliance with Disposal Instruction: When the area manager visited the store on May 6, 2001 to verify that her May 3, 2001 instruction to dispose of the greenish Chickenjoy products had been carried out, she found the products still in the store.
• Manese's Money Claims Offset: Respondents argued that Manese's payroll for June 1–15 and cooperative savings, together with other benefits, were not given because she had an outstanding car loan balance of ₱70,266.67, resulting in a negative balance of ₱14,262.76 even after computing amounts due her.

• Finality of Judgment: Whether the Court of Appeals acted with grave abuse of discretion in passing upon the legality of Cruz's dismissal, considering that the Labor Arbiter's ruling declaring her illegally dismissed had become final and executory due to respondents' failure to file a timely appeal.
• Loss of Trust and Confidence: Whether the Court of Appeals erred in affirming the dismissal of petitioners Manese and Peñano based on loss of trust and confidence as managerial employees.
• Factual Finding: Whether the Court of Appeals erred in its findings of fact when it held that petitioners had served the Chickenjoy beyond the three-day serving period, thus exposing public health to jeopardy.

• Finality of Judgment: Yes. The Court of Appeals exceeded its jurisdiction in declaring Cruz legally dismissed, because respondents did not appeal from the Labor Arbiter's ruling that Cruz was illegally dismissed, rendering that ruling final and executory. An appellee who has not appealed cannot obtain affirmative relief from the appellate court other than what was granted by the lower court.
• Loss of Trust and Confidence: No. The dismissal of Manese and Peñano for loss of trust and confidence was valid. As managerial employees, the mere existence of a basis for believing they breached the trust of their employer suffices for dismissal, and the acts and omissions enumerated in their termination memoranda constituted valid grounds under Article 282(c) of the Labor Code.
• Factual Finding: N/A. This issue questions a factual finding of the Court of Appeals. Under Section 1, Rule 45, only questions of law may be raised, and the Court may resolve questions of fact only in exceptional cases, which do not apply here.

• Finality of Judgment: The Court applied the well-settled procedural rule that an appellee who has not appealed cannot obtain from the appellate court any affirmative relief other than those granted in the decision of the court below. An appellee may only advance arguments to defeat the appellant's claim or uphold the disputed decision, and may assign errors solely to maintain the appealed decision on other grounds — not to modify the judgment in the appellee's favor. In this case, respondents received the Labor Arbiter's decision on August 28, 2003 and had until September 8, 2003 to appeal. Instead of filing an appeal, they filed an Opposition to Appeal in October 2003, way beyond the ten-day reglementary period. Although the NLRC found that Cruz was legally dismissed, it was constrained to affirm the Labor Arbiter's findings and award because of respondents' failure to timely appeal. The Court of Appeals therefore exceeded its jurisdiction when it adjudged Cruz legally dismissed, as the ruling on the illegality of her dismissal had become final and executory.

• Loss of Trust and Confidence: The respective memoranda with notices of termination given to each petitioner clearly expressed that their acts and omissions caused the company to lose trust and confidence in them as managerial employees. The Court reiterated that when an employee accepts a managerial position requiring full trust and confidence, such employee gives up some of the rigid guaranties available to ordinary workers; infractions that would be overlooked or condoned in others may be visited with more severe disciplinary action against managerial employees. Proof beyond reasonable doubt is not required, provided there is a valid reason for the loss of trust and confidence, such as when the employer has reasonable ground to believe the managerial employee is responsible for the purported misconduct. However, managerial employees still enjoy security of tenure, and the loss of trust and confidence must be substantial and founded on clearly established facts. Substantial evidence is of critical importance, and the burden rests on the employer. The Court found that the acts and omissions enumerated in the termination memoranda of Cruz and Peñano were valid bases for termination grounded on gross negligence and/or loss of trust and confidence. The findings of fact of the Court of Appeals, in absolute agreement with those of the NLRC, are accorded respect and finality and are binding upon the Supreme Court so long as supported by substantial evidence. The Court found no reason to disturb these findings as to Manese and Peñano.

• Factual Finding: The last issue raised by petitioners questions a factual finding of the Court of Appeals. Under Section 1, Rule 45 of the Rules of Court, only questions of law may be raised in a petition for review on certiorari before the Supreme Court. The Court may resolve questions of fact only in exceptional cases, which do not apply to this case. The issue was therefore not entertained.

• Finality of Unappealed Judgments in Labor Cases — An appellee who has not appealed cannot obtain from the appellate court any affirmative relief other than those granted in the decision of the court below. The appellee can only advance arguments to defeat the appellant's claim or uphold the disputed decision, and may assign errors solely to maintain the appealed decision on other grounds, not to modify the judgment in the appellee's favor. Applied to hold that the Court of Appeals exceeded its jurisdiction in declaring Cruz legally dismissed, the Labor Arbiter's ruling on the illegality of her dismissal having become final due to respondents' failure to timely appeal.

• Loss of Trust and Confidence for Managerial Employees — The mere existence of a basis for believing that a managerial employee has breached the trust of the employer suffices for dismissal. When an employee accepts a managerial position requiring full trust and confidence, the employee gives up some of the rigid guaranties available to ordinary workers. Infractions that would be overlooked or condoned in others may be visited with more severe disciplinary action. Proof beyond reasonable doubt is not required, provided there is a valid reason for the loss of trust and confidence, such as when the employer has reasonable ground to believe the managerial employee is responsible for the purported misconduct and the nature of his participation renders him unworthy of the trust demanded by his position. However, managerial employees still enjoy security of tenure, and the loss of trust and confidence must be substantial and founded on clearly established facts. Substantial evidence is of critical importance, and the burden rests on the employer.

• Distinction Between Labor Disputes and Civil Disputes for Loan Obligations — An employer's demand for payment of an employee's amortization on a car loan, or the return of the car, is not a labor dispute but a civil dispute involving debtor-creditor relations rather than employer-employee relations. The employer cannot set off the employee's loan balance against labor benefits due the employee; the proper remedy is a civil action for payment or return of the car.

• "It is a well-settled procedural rule in this jurisdiction, and we see no reason why it should not apply in this case, that an appellee who has not himself appealed cannot obtain from the appellate court any affirmative relief other than those granted in the decision of the court below." — This passage, quoting SMI Fish Industries, Inc. vs. NLRC, states the ratio decidendi for reversing the Court of Appeals' declaration that Cruz was legally dismissed, anchoring the ruling on the finality of unappealed judgments.

• "The mere existence of a basis for the loss of trust and confidence justifies the dismissal of the managerial employee because when an employee accepts a promotion to a managerial position or to an office requiring full trust and confidence, such employee gives up some of the rigid guaranties available to ordinary workers." — This passage articulates the controlling doctrine on dismissal of managerial employees for loss of trust and confidence, balancing the employer's right to dismiss against the employee's retained right to security of tenure.

• "This Court has consistently ruled that managerial employees enjoy security of tenure and, although the standards for their dismissal are less stringent, the loss of trust and confidence must be substantial and founded on clearly established facts sufficient to warrant the managerial employee's separation from the company." — This passage defines the evidentiary standard required for dismissing managerial employees, requiring substantial evidence and clearly established facts despite the less stringent standards compared to rank-and-file employees.

• SMI Fish Industries, Inc. vs. NLRC, G.R. Nos. 96952-56, September 12, 1992, 213 SCRA 444 — Controlling precedent on the rule that an appellee who has not appealed cannot obtain affirmative relief from the appellate court. Followed to hold that the Court of Appeals exceeded its jurisdiction in declaring Cruz legally dismissed.

• Philippine Long Distance Telephone Company vs. Tolentino, G.R. No. 143171, September 21, 2004, 438 SCRA 555 — Cited for the doctrine that managerial employees give up certain guaranties available to ordinary workers upon accepting positions of trust, and that proof beyond reasonable doubt is not required for dismissal based on loss of trust and confidence.

• Procter and Gamble Philippines vs. Bondesto, G.R. No. 139847, March 5, 2004, 425 SCRA 1 — Cited for the proposition that findings of fact of the Court of Appeals, in agreement with those of the NLRC, are accorded respect, finality, and are binding upon the Supreme Court when supported by substantial evidence.

• Nestlé Philippines, Inc. vs. NLRC, G.R. No. 85197, March 18, 1991, 195 SCRA 340 — Controlling precedent holding that an employer's demand for payment of car loan amortization or return of the car is a civil, not a labor, dispute involving debtor-creditor relations. Followed to preclude set-off of Manese's car loan balance against her monetary claims.

• Tayco vs. Heirs of Concepcion Tayco-Flores, G.R. No. 168692, December 13, 2010, 637 SCRA 742 — Cited for the rule that under Section 1, Rule 45, only questions of law may be raised in a petition for review on certiorari before the Supreme Court, and that questions of fact may be resolved only in exceptional cases.

• Article 282, paragraph (c), Labor Code — Provides that an employer may terminate an employment for fraud or willful breach of the trust reposed in the employee by the employer or duly authorized representative. Applied as the statutory basis for the valid dismissal of Manese and Peñano as managerial employees for loss of trust and confidence.

• Section 1, Rule 45, Rules of Court — Provides that appeals by certiorari before the Supreme Court may raise only questions of law. Applied to decline review of the factual issue regarding whether petitioners served Chickenjoy beyond the three-day serving period.

Presbitero J. Velasco, Jr. (Chairperson), Roberto A. Abad, Jose Portugal Perez (designated Acting Member per Special Order No. 1299 dated August 28, 2012), and Jose Catral Mendoza concurred. No separate concurring opinions were written.