McDonald’s (Katipunan Branch) and/or McGeorge Food Industries, Inc. vs. Alba

A violation of an employer’s meal policy does not amount to serious misconduct or willful disobedience justifying dismissal absent wrongful or perverse intent. The employer bears the burden of proving lawful cause, and the penalty imposed must be commensurate to the infraction; previous offenses may justify dismissal only if related to the subsequent infraction.

Ma. Dulce Alba was employed as service crew by McDonald’s (Katipunan Branch) and/or McGeorge Food Industries, Inc. beginning November 15, 1993. Her employment was governed by a Crew Employee Handbook that included a meal policy and listed violations thereof among acts of misconduct resulting in summary dismissal.

Ma. Dulce Alba was hired as part of the service crew of McDonald’s Katipunan Road, Loyola Heights branch on November 15, 1993. During the orientation of newly hired employees, McDonald’s provided her with a copy of the Crew Employee Handbook on rules and regulations, including its meal policy. The meal policy required all breaks to be consumed in the crewroom or designated area; prohibited crew from taking meals in the lobby when there were many customers for stores without a crewroom; and prescribed steps for requesting meal breaks: inform the crew’s zone manager, punch out for break and assemble the meal from the warming bin, bring the assembled meal to the zone manager for checking and signing of the timecard, take the break in the crewroom, and upon completion of the allotted break time punch in and have the same zone manager sign the timecard. The handbook listed as an example of misconduct resulting in summary dismissal the consumption of any food without authority or payment, including deviation from the employee meal policy, such as eating from the breaks of other crew or food offered by friends or family while on duty, and sampling uncompleted or completed products during operations while on duty.

On April 8, 1995, Rizza Santiago, also a crew member, witnessed respondent eating inside the crew room while on duty and reported the incident to store manager Kit Alvarez through an undated written account. Respondent’s duty that day was from 5:45 a.m. to 1:00 p.m. McDonald’s suspended respondent for five days starting April 14 until April 18, 1995. In a written but unsigned letter dated April 15, 1995, respondent explained that at around 10:45 in the morning, Zel took her break and she came with her; she asked Zel if she could have a piece of her chicken because she was hungry and her stomach was aching badly. Zel told her someone might see it, but respondent said “just a piece just to ease the pain of my stomach.” She stated that she felt the pain but it was only last Saturday that she could not control it because she was not able to drink medicine; that she did not do this every time; that it was just last Saturday; and that she knew it was wrong and against the policies of the store.

Petitioner thereafter sent a show cause notice to respondent why no disciplinary action should be meted against her. Replying, respondent, despite her initial written admission of the questioned act, denied having violated the meal policy. After petitioner conducted what it claimed to be a “thorough investigation,” it found respondent guilty of flouting company regulations and immediately terminated her services in a letter of April 27, 1995. The termination letter stated that based on the incident report respondent made and submitted on April 15, 1995, she acknowledged having eaten a piece of fried chicken because she was hungry and had a stomach ache; that she acknowledged the act was against company policy; and that Rizza Santiago personally witnessed her act of eating a piece of fried chicken without authorization or payment and in violation of the employee meal policy.

Respondent lodged a complaint against petitioners McDonald’s and/or McGeorge Food Industries, Inc. before the NLRC NCR Arbitration Branch. The complaint was dismissed without prejudice for failure to prosecute by Order of October 30, 1995. Respondent refiled her complaint on January 24, 1996. After submission of the parties’ respective position papers and responsive pleadings, petitioners moved to have a clarificatory hearing before the Arbitration Branch, but the motion was denied.

The Labor Arbiter found that while respondent violated the meal policy of McDonald’s, dismissal was too harsh a penalty and suspension without pay would have sufficed. The NLRC ruled that there was no intentional or willful conduct on the part of respondent to disregard the rules regarding the meal policy. The Court of Appeals affirmed.

• Clarificatory Hearing / Due Process: Petitioners contended that the Labor Arbiter should have conducted a clarificatory hearing to resolve the factual issues; before the Court of Appeals, they raised as a new issue the denial of their constitutional right to due process because the Arbiter failed to set the case for hearing.
• Penalty / Just Cause: Petitioners maintained that the penalty imposed upon respondent was not excessive, as her violation of the meal policy amounted to serious or willful misconduct or willful disobedience justifying dismissal.
• Payroll Sheets: Petitioners argued that the payroll sheets filed by the company during appeal should have been given appreciation to show that respondent did not render eight hours of work per day.

• Denial of Violation: Respondent denied having violated the meal policy despite her initial written admission of the questioned act.
• Explanation for the Act: Respondent explained that she ate a piece of chicken because she was hungry and had a stomach ache, that it was not done every time, and that she knew it was wrong and against store policies.

• Clarificatory Hearing / Due Process: Whether the Labor Arbiter should have conducted a clarificatory hearing to resolve factual issues, and whether the failure to do so violated petitioners’ constitutional right to due process.
• Penalty / Just Cause: Whether respondent’s violation of the meal policy amounted to serious misconduct or willful disobedience under Article 282(a) of the Labor Code, justifying dismissal, or whether the penalty of dismissal was excessive.
• Payroll Sheets: Whether the payroll sheets filed by the company during appeal should have been given appreciation.

• Clarificatory Hearing / Due Process: No. The issue was raised for the first time before the appellate court and may not be considered; in any event, the NLRC Rules allow the Labor Arbiter to determine motu proprio whether a hearing is needed, and the position papers and evidence were sufficient. Due process was not violated.
• Penalty / Just Cause: No. The violation did not amount to serious misconduct or willful disobedience; dismissal was too harsh, and the five-day suspension sufficed. Article 282(a) requires willful or intentional conduct characterized by wrongful and perverse attitude, and serious misconduct requires wrongful intent.
• Payroll Sheets: No. Additional evidence may be allowed in labor proceedings, but tardy submission is disallowed; the payroll sheets were inconclusive, time cards would have been more reliable, and the NLRC did not find them compelling.

• Clarificatory Hearing / Due Process: The Court found the Arbiter’s not conducting a clarificatory hearing unavailing. This issue was raised for the first time before the appellate court, hence it may not be considered. In any event, the NLRC Rules allow the Labor Arbiter to motu proprio determine whether there is a need for a hearing or clarificatory conference. In this case, the Labor Arbiter prudently saw it best to dispense with a hearing since the position papers and responsive pleadings, together with the attached documentary evidence, provided more than sufficient bases to resolve the case. Petitioners’ right to due process was thus not violated.
• Penalty / Just Cause: There is no dispute that respondent violated petitioners’ meal policy. The only issue is whether such violation amounts to or borders on “serious or willful” misconduct or willful disobedience, as petitioners posit, to call for respondent’s dismissal. By any measure, the Court holds not. Under Article 282(a) of the Labor Code, willful disobedience to the employer’s lawful orders as a just cause for termination of employment needs the concurrence of at least two requisites: (1) the employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a “wrongful and perverse attitude;” and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which one has been engaged to discharge. With respect to serious misconduct, it is not sufficient that the act or the conduct complained of must have violated some established rules or policies. It must have been performed with wrongful intent. Petitioners, on whom the onus of proving lawful cause in sustaining the dismissal of respondent lies, failed to prove that respondent’s misconduct was induced by a perverse and wrongful intent, they having merely anchored their claim that she was on her knowledge of the meal policy. While petitioners wield a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of its employees, these must, however, be fair and reasonable at all times, and the corresponding sanctions for violations thereof, when prescribed, must be commensurate thereto as well as to the degree of the infraction. Given respondent’s claim that she was having stomach pains due to hunger, which is not implausible, the same should have been properly taken into account in the imposition of the appropriate penalty for violation of the meal policy. Respondent’s suspension for five days sufficed. With that penalty, the necessity of cautioning other employees who may be wont to violate the same policy was not compromised. Moreover, petitioners likewise failed to prove any resultant material damage or prejudice on their part as a consequence of respondent’s questioned act. Their claim that the act would cause “irremediable harm to the company’s business” is too vague to merit consideration. Petitioners finally harp on the supposed checkered employment record of respondent to justify her dismissal, listing a written warning for failing to report for work (07 December 1994); a three-day suspension (14 to 16 February 1995) for incurring several absences; two verbal warnings (10 January and 24 March 1995) for incurring cash shortages of P61.00 and P80.00; a written warning (11 January 1995) for incurring a cash shortage of P52.00; and five verbal warnings for reporting late for work on 01 December 1993, 25 March, 02 May, 17 July and 05 November, all in 1994. The resort by petitioners to respondent’s past conduct is a desultory attempt to explain their drastic action. Previous offenses may be used as valid justification for dismissal from work only if they are related to the subsequent infraction-basis of the termination of employment. Previous infractions, in other words, may be used if they have a bearing on the proximate offense warranting dismissal. No such bearing exists, however, between the above-detailed alleged infractions with respondent’s meal policy violation. Parenthetically, the employment record of respondent reflects her fairly outstanding work ethic and performance, which is punctuated by at least 31 counts of commendations from the management no less. In fine, given the totality of respondent’s employment record, the penalty of dismissal is too discordant with the infraction she committed.
• Payroll Sheets: Respecting petitioner’s submission of additional evidence on appeal, the same may be allowed as the rules of evidence prevailing in courts of law or equity are not controlling in labor proceedings. What the Court disallows, however, is the tardy submission of the supposed additional evidence. Petitioners presented payroll sheets only when they moved for a reconsideration of the NLRC decision. At any rate, the NLRC did not find those payroll sheets compelling enough to warrant a reversal of its decision. Indeed, payroll sheets are inconclusive to disprove respondent’s eight-hour-per-day work shift. Instead of payroll sheets, the time cards would have been more reliable. Petitioners, however, did not present the same. When a party has in its power to produce evidence that would overthrow the case made against it but fails to do so, the presumption arises that such evidence, if produced, would operate to its prejudice and support the case of the other party.

• Serious Misconduct as a Just Cause — Under Article 282(a) of the Labor Code, serious misconduct requires that the act or conduct complained of be performed with wrongful intent; it is not enough that the employee violated established rules or policies. The Court applied this to hold that respondent’s meal policy violation, committed without wrongful intent, did not amount to serious misconduct.
• Willful Disobedience as a Just Cause — Willful disobedience to the employer’s lawful orders requires concurrence of: (1) the employee’s assailed conduct must have been willful or intentional, characterized by a “wrongful and perverse attitude”; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties for which the employee was engaged. The Court found no willful disobedience because petitioners failed to prove a perverse or wrongful attitude.
• Employer’s Burden of Proof in Dismissal Cases — The employer bears the onus of proving lawful cause to sustain the dismissal of an employee. Petitioners failed to prove that respondent’s misconduct was induced by perverse and wrongful intent.
• Proportionality of Penalty — While employers have wide latitude to promulgate work-related policies, such policies must be fair and reasonable, and the prescribed sanctions must be commensurate to the violation and degree of infraction. The Court held dismissal too harsh; the five-day suspension already sufficed.
• Previous Offenses as Justification for Dismissal — Previous offenses may be used as valid justification for dismissal only if they are related to the subsequent infraction that is the basis of termination, or if they have a bearing on the proximate offense warranting dismissal. The Court disregarded respondent’s past infractions because they had no bearing on the meal policy violation.
• Tardy Submission of Evidence in Labor Proceedings — Although the rules of evidence in courts of law or equity are not controlling in labor proceedings and additional evidence may be allowed on appeal, the tardy submission of supposed additional evidence is disallowed. The payroll sheets first presented on motion for reconsideration were not considered.
• Presumption from Withholding Evidence — When a party has in its power to produce evidence that would overthrow the case made against it but fails to do so, the presumption arises that such evidence, if produced, would operate to its prejudice and support the other party’s case. The Court applied this to petitioners’ failure to present time cards.
• Due Process and Clarificatory Hearings in Labor Cases — The NLRC Rules allow the Labor Arbiter to motu proprio determine whether there is a need for a hearing or clarificatory conference; due process is not violated where the position papers, responsive pleadings, and documentary evidence provide sufficient basis to resolve the case. The Court applied this to reject petitioners’ due process claim.
• Issues Raised First Time on Appeal — An issue raised for the first time on appeal may not be considered. The Court applied this to petitioners’ clarificatory hearing and due process argument.

• “Under Article 282 (a) of the Labor Code, willful disobedience to the employer's lawful orders as a just cause for termination of employment needs the concurrence of at least two requisites, viz: (1) the employee's assailed conduct must have been willful or intentional, the willfulness being characterized by a "wrongful and perverse attitude;" and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which one has been engaged to discharge.” — This passage states the controlling requisites for willful disobedience under Article 282(a) and supplies the framework the Court used to reject dismissal.
• “With respect to serious misconduct, it is not sufficient that the act or the conduct complained of must have violated some established rules or policies. It must have been performed with wrongful intent.” — This is the ratio for holding that a mere meal-policy violation does not amount to serious misconduct.
• “Previous offenses may be used as valid justification for dismissal from work only if they are related to the subsequent infraction-basis of the termination of employment. Previous infractions, in other words, may be used if they have a bearing on the proximate offense warranting dismissal.” — This doctrine disposed of petitioners’ reliance on respondent’s past infractions.
• “In fine, given the totality of respondent’s employment record, the penalty of dismissal is too discordant with the infraction she committed.” — This conclusion encapsulates the proportionality ruling and the Court’s affirmance of liability for illegal dismissal.

• Salafranca vs. Philamlife (Pamplona) Village Homeowners Association, 360 Phil. 652, 665-666 (1998) — Cited to support the rule that an issue raised for the first time on appeal may not be considered; applied to reject petitioners’ due process and clarificatory hearing argument.
• Precision Electronics Corp. vs. NLRC, G.R. No. 86657, October 23, 1989, 178 SCRA 667, 670 — Cited for Article 221 of the Labor Code; rules of evidence in courts of law or equity are not controlling in labor proceedings, allowing additional evidence on appeal in principle.
• Nokom vs. National Labor Relations Commission, 390 Phil. 1228, 1241 (2000) — Cited for the presumption that when a party has evidence in its power to overthrow the case but fails to produce it, the evidence would be adverse; applied to petitioners’ failure to present time cards.
• Rosario vs. Victory Ricemill, 445 Phil. 830, 839 (2003); Villeno vs. NLRC, G.R. No. 108153, December 26, 1995, 251 SCRA 494, 497, citing San Miguel Corporation vs. Ubaldo, G.R. No. 92859, February 1, 1993, 218 SCRA 293 — Cited for the requisites of willful disobedience under Article 282(a); applied to find no willful disobedience.
• NLRC vs. Salgarino, G.R. No. 164376, 31 July 2006, 497 SCRA 361, 375-376 — Cited for the rule that serious misconduct requires wrongful intent; applied to respondent’s meal policy violation.
• Austria vs. NLRC, 369 Phil. 557, 565 (1999) — Cited for the employer’s burden to prove lawful cause for dismissal; applied against petitioners.
• VH Manufacturing Inc. vs. National Labor Relations Commission, 379 Phil. 444, 451 (2000) — Cited for the rule that employer policies must be fair and reasonable and sanctions commensurate to the infraction; applied to hold dismissal too harsh.
• La Carlota Planters Association Inc. vs. NLRC, 358 Phil. 732, 739 (1998) — Cited for the rule that previous offenses may justify dismissal only if related to the subsequent infraction; applied to disregard respondent’s past infractions.

• Article 282(a), Labor Code — Defines serious misconduct or willful disobedience by the employee of the lawful orders of the employer or representative in connection with work as a just cause for termination. Applied: the Court held that respondent’s violation of the meal policy did not meet the requisites of serious misconduct or willful disobedience; dismissal was not justified.
• Article 221, Labor Code — Provides that the rules of evidence prevailing in courts of law or equity are not controlling in labor proceedings. Applied: additional evidence may be allowed on appeal, but the tardy submission of payroll sheets was disallowed.
• Section 8, Rule V, New Rules of Procedure of the NLRC — Allows the Labor Arbiter to motu proprio determine whether there is a need for a hearing or clarificatory conference. Applied: no due process violation where the Labor Arbiter dispensed with a hearing because the position papers, responsive pleadings, and documentary evidence were sufficient.

Leonardo A. Quisumbing (Chairperson), Dante O. Tinga, Presbitero J. Velasco, Jr., and Arturo D. Brion.