National Labor Relations Commission vs. Salgarino

Misconduct that is not proven to have been committed with wrongful intent is merely simple misconduct and does not constitute a just cause for dismissal under Article 282(a) of the Labor Code. Moreover, the penalty of dismissal must be commensurate with the gravity of the offense, and the permissive word “may” in Section 94(b) of the Manual of Regulations for Private Schools does not mandate automatic termination but confers a discretion that cannot be exercised arbitrarily.

Ma. Bernadette S. Salgarino was employed as a Mathematics teacher by St. Jude Catholic School in April 1988. In February 1999, during the fourth grading period, she went on maternity leave and was expected to return on 19 March 1999. Substitute teachers administered the fourth periodical test and computed the grades of her students. While still on leave, Salgarino asked a substitute teacher to have the white grading sheets delivered to her home. She then encircled the failing grades under the Daily Work column and placed a passing grade of 75% beside each, enabling all the concerned students to pass Mathematics IV and graduate on time. She did this without prior permission, contrary to the school’s policy that make-up tests must be conducted on school premises and that only authorized substitute teachers were to compute and record the grades during her absence. The school investigated and dismissed her for tampering with school records.

• Employment and Leave: Respondent Ma. Bernadette S. Salgarino was employed as a Mathematics teacher at St. Jude Catholic School beginning in April 1988. She taught Algebra, Trigonometry, Statistics, and Analytical Geometry to third and fourth-year high school students. On 15 February 1999, two weeks before the fourth periodical test, she went on maternity leave and was expected to return on 19 March 1999. During her absence, substitute teachers Ms. Maria Luisa Capistrano, Mrs. Angelita Rivera, and Mrs. Michel Bongyad conducted her classes and administered the periodical test on 2 March 1999.

• The Grade Alteration: While still on leave, Salgarino conducted make-up tests in her house for some of her students without seeking prior permission from the school. She also requested that Capistrano deliver the white grading sheets containing the students’ grades to her home; Capistrano sent the sheets through a student. Upon receiving them, Salgarino encircled the failing grades under the column for Daily Work (DW) and wrote a passing grade of 75% beside each encircled grade. The adjustments converted the failing marks into passing grades, enabling the affected students to graduate on time. Salgarino claimed she acted out of humanitarian considerations: she believed her students were not adequately prepared for the exam because no substitute teacher had conducted proper lectures or reviews before the test; she had assigned extra projects before her leave that merited credit; and some students who had also failed Chinese subjects would have been forced to exceed the two-subject limit for summer enrollment under Section 68(b) of the Manual of Regulations for Private Schools, thus violating the regulation.

• Discovery and Investigation: The substitute teachers noticed the alterations upon the sheets’ return and reported the matter to Head Teacher Ms. Priscilla Lopez, who referred it to Acting Director/Principal Rev. Fr. Noel Bejo. On 24 March 1999, Fr. Bejo directed Salgarino to appear before an investigating panel to explain the alleged tampering of school records, violation of school policies, and misconduct. On 26 March 1999, a panel composed of Fr. Bejo, the Registrar, the Guidance Office Head, and several high school coordinators conducted the investigation in the presence of Salgarino and the substitute teachers. Salgarino admitted she gave tests at her house, changed the grades before they were submitted to the principal, and argued she had the right to pass her students.

• Findings and Termination: The investigating panel concluded that Salgarino had altered students’ grades while on leave, an act it characterized as education malpractice or grave misconduct grossly prejudicial to the school’s reputation. It found violations of Article XV, Section 79 of the Manual of Regulations for Private Schools (requiring that final grades be based solely on scholastic performance) and Article XVII, Section 94(b) (tampering with or falsification of school records). A termination letter was served on Salgarino on 15 April 1999. She thereafter filed a complaint for illegal dismissal before the Labor Arbiter.

• Serious Misconduct under the Manual: Petitioners maintained that Salgarino’s alteration of failing grades to passing marks without authorization constituted a serious academic malpractice or grave misconduct. The Manual of Regulations for Private Schools, specifically Section 79, mandates that grades be based solely on scholastic performance; humanitarian considerations are not a recognized basis. Her acts were also in violation of Section 94(b) concerning tampering with school records.

• Lack of Authority and Discretion: Petitioners argued that Salgarino had no moral or legal authority to give grades while on maternity leave, as the substitute teachers were exclusively tasked with computing and recording the students’ grades. They contended that nothing in the Manual grants a teacher the discretion or option to assign a grade outside of actual scholastic performance.

• Breach of Trust: Petitioners asserted that Salgarino’s deliberate tampering with official school records constituted a willful breach of the trust and confidence reposed in her as a teacher, justifying dismissal under Article 282(c) of the Labor Code.

• Error in Applying Academic Freedom: Petitioners challenged the Labor Arbiter’s statement that a teacher has the academic freedom to pass or fail students at her discretion, insisting that the issue of academic freedom was irrelevant to the administrative charge of misconduct.

• Humanitarian Considerations and Lack of Wrongful Intent: Salgarino argued that her decision to pass the students was prompted by pity and humanitarian concern. She believed the students were disadvantaged by the absence of proper instruction before the periodical test. She also feared that failing them would violate the Manual’s prohibition against enrolling in more than two summer subjects, as some students had already failed Chinese. She consistently maintained that she had no ulterior motive, received no immoral consideration, and committed at most an error of judgment, not willful misconduct.

• Disproportionate Penalty: Salgarino contended that the penalty of dismissal was excessively harsh for a first offense committed after more than a decade of service without any prior derogatory record and in light of her numerous academic excellence awards.

• Serious Misconduct: Whether Salgarino’s act of altering failing grades to passing marks on the students’ white sheets while on maternity leave, without prior permission, constituted serious misconduct under Article 282(a) of the Labor Code so as to justify her dismissal.

• Breach of Trust: Whether Salgarino’s position as a teacher fell within the class of employees—managerial employees or those routinely handling the employer’s money or property—to whom the ground of loss of confidence under Article 282(c) of the Labor Code applies.

• Proportionality of Penalty: Whether the penalty of dismissal was commensurate with the gravity of the offense, considering her length of service, unblemished record, and the permissive language of Section 94(b) of the Manual of Regulations for Private Schools.

• Academic Freedom: Whether a teacher’s academic freedom encompasses the discretion to pass or fail students regardless of their actual scholastic performance, and whether such discretion shielded Salgarino’s actions.

• Serious Misconduct: Salgarino’s acts—conducting make-up tests at home without permission, altering grades while on leave, and invoking humanitarian considerations as a basis for grading—undoubtedly transgressed established school rules and constituted misconduct. However, for misconduct to be considered serious and thus a just cause for dismissal under Article 282(a), it must be of grave and aggravated character and must have been performed with wrongful intent. The record contained no evidence that Salgarino acted with an ulterior motive, received any immoral consideration, or intended to cause harm. She was moved by pity for students she believed were insufficiently prepared and would face regulatory obstacles. Her misconduct was therefore simple, not grave, and could not sustain a valid dismissal. The employer failed to discharge its burden of proving just cause.

• Breach of Trust: Loss of confidence as a ground for termination under Article 282(c) applies only to employees occupying positions of trust and confidence—typically managerial employees vested with the power to lay down management policies or to hire, discipline, or discharge employees—or to those routinely charged with the care and custody of the employer’s money or property, such as cashiers, auditors, and property custodians. Salgarino, a classroom teacher, belonged to neither category. Consequently, breach of trust could not be invoked to justify her dismissal.

• Proportionality of Penalty: Even assuming a violation of Section 94(b) of the Manual of Regulations for Private Schools, the provision uses the word “may,” which is permissive and not mandatory. It does not grant the employer an absolute or automatic right to terminate; the discretion must be exercised fairly and not arbitrarily. The penalty imposed must be commensurate with the gravity of the offense. Given Salgarino’s more than ten years of service, her lack of any previous derogatory record, and her recognized competence, the supreme penalty of dismissal was unduly harsh and disproportionate. Where a lesser penalty would suffice, the extreme sanction of dismissal should not be applied.

• Academic Freedom: The issue of academic freedom was misplaced in this labor dispute. Academic freedom, properly understood, refers to the freedom of faculty members from external control over their academic research, findings, or conclusions, and has no bearing on a teacher’s alleged discretion to pass or fail students based on non-scholastic considerations. The Court found no compelling reason to resolve the question because the case turned on the characterization of her conduct under the Labor Code, not on constitutional academic freedom.

• Definition of Serious Misconduct — Misconduct is the transgression of an established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent—not mere error of judgment. To qualify as serious and justify dismissal under Article 282(a) of the Labor Code, the misconduct must be of such grave and aggravated character as to be more than merely trivial or unimportant, and it must be shown to have been performed with wrongful intent. Absent proof of such intent, the misconduct is only simple and cannot validly support a termination.

• Scope of Loss of Confidence — Loss of confidence as a just cause for dismissal under Article 282(c) applies exclusively to (1) managerial employees, i.e., those vested with the power to lay down management policies or to hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline employees, or to effectively recommend such actions; and (2) employees who, in the normal and routine exercise of their functions, regularly handle significant amounts of the employer’s money or property, such as cashiers, auditors, and property custodians. A classroom teacher falls outside these categories.

• Proportionality of Penalty in Labor Cases — The penalty imposed on an erring employee must be commensurate with the gravity of the offense. Length of service and the number of prior infractions are material factors in determining the appropriate sanction. Where a penalty less punitive would suffice, dismissal is a consequence too severe and should not be sustained.

• Statutory Construction of “May” vs. “Shall” — The word “may” as used in a statute is permissive and operates to confer discretion, whereas “shall” is imperative and imposes a duty. Section 94(b) of the Manual of Regulations for Private Schools, by employing “may,” merely authorizes termination at the employer’s discretion; it does not compel automatic dismissal and cannot be exercised arbitrarily or in a manner that defeats the constitutional protection to labor.

• “Misconduct is defined as improper or wrong 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. The misconduct to be serious within the meaning of the act must be of such a grave and aggravated character and not merely trivial or unimportant.”

• “In order to constitute serious misconduct which will warrant the dismissal of an employee under paragraph (a) of Article 282 of the Labor Code, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been performed with wrongful intent.”

• “Loss of confidence should ideally apply only to cases involving employees occupying positions of trust and confidence or to those situations where the employee is routinely charged with the care and custody of the employer’s money or property. To the first class belong the managerial employees … and to the second class belong cashiers, auditors, property custodians, etc. …”

• “Where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe.”

• Ha Yuan Restaurant v. National Labor Relations Commission, G.R. No. 147719, 27 January 2006 — Followed for the definition of serious misconduct as requiring wrongful intent and grave character.

• Mabeza v. National Labor Relations Commission, 338 Phil. 386 (1997) — Followed; established the limited categories of employees to whom loss of confidence under Article 282(c) applies, excluding ordinary rank-and-file personnel such as teachers.

• Concorde Hotel v. Court of Appeals, 414 Phil. 897 (2001) — Followed; reiterated that loss of confidence is confined to positions of trust and confidence or those routinely handling significant amounts of money or property.

• Agabon v. National Labor Relations Commission, G.R. No. 158693, 17 November 2004 — Cited for the procedural due process requirements in termination cases (notice, hearing, and notice of termination).

• Meracap v. International Ceramics Mfg. Co., Inc., No. L-48235-36, 30 July 1979 — Cited for the principle that a penalty less punitive than dismissal may suffice.

• Dizon v. Encarnacion, 119 Phil. 20 (1963) — Applied for the rule of statutory construction that “may” is permissive, “shall” is mandatory.

• Bersabal v. Salvador, No. L-35910, 21 July 1978 — Applied to distinguish permissive from mandatory statutory language in the context of termination.

• Article 282, Labor Code — Enumerates the just causes for termination: (a) serious misconduct or willful disobedience; (b) gross and habitual neglect; (c) fraud or willful breach of trust; (d) commission of a crime against the employer; and (e) analogous causes. Salgarino’s acts were assessed under paragraphs (a) and (c). The provision was applied to hold that her misconduct was not serious for want of wrongful intent, and that she did not occupy a position of trust and confidence that would support dismissal under paragraph (c).

• Article XV, Section 79, 1992 Manual of Regulations for Private Schools — Provides that a student’s final grade shall be based solely on scholastic performance; any addition or diminution for co-curricular activities, attendance, or misconduct is not allowed unless explicitly provided by the school and relevant to the subject. Salgarino’s grade adjustments based on humanitarian grounds were found to violate this rule, though the violation did not amount to serious misconduct.

• Article XVII, Section 94(b), 1992 Manual of Regulations for Private Schools — States that employment of school personnel may be terminated for negligence in keeping school or student records, or tampering with or falsification of the same. The Court construed the term “may” as permissive and not mandatory, thus precluding automatic dismissal.

• Article XIII, Section 68(b), 1992 Manual of Regulations for Private Schools — Provides that a secondary student may enroll in no more than two subjects during the summer, either for makeup or advanced credits. Salgarino invoked this provision to justify passing students who would otherwise have exceeded the limit, but the Court did not accept it as a valid excuse for altering grades.

Panganiban, C.J., Ynares-Santiago, Austria-Martinez, Callejo, Sr., J.J., concurred.

N/A (unanimous decision)