Verizon Communications Philippines, Inc. vs. Margin

An employee's absence due to illness, with prior notification to the supervisor describing the nature of the sickness, does not constitute abandonment or AWOL warranting dismissal, even if the employee fails to submit a medical certificate or specify a return date; however, where the employer acted in good faith and the penalty of dismissal was too harsh, the award of backwages may be excused despite a finding of illegal dismissal.

Verizon Communications Philippines, Inc. employed Laurence C. Margin as a network engineer tasked with supporting network operations, diagnosing and troubleshooting problems, and driving repair activities. The company maintained written policies on attendance and absences, classifying absences as authorized or unauthorized: an authorized absence due to sickness required the employee to notify his manager at least four hours before his shift with a reasonable description of the illness, and to submit proof of illness upon return; five or more consecutive days of absence without an approved leave application was considered abandonment of work, AWOL, or voluntary resignation, carrying the penalty of dismissal. The dispute arose from Laurence's prolonged absence due to pulmonary tuberculosis and the company's termination of his employment.

Laurence C. Margin was hired by Verizon Communications Philippines, Inc. as a network engineer on September 3, 2007. His duties involved supporting network operations, diagnosing and troubleshooting network anomalies, and driving repair activities — work on which the company's operations relied greatly. Sometime in January 2012, Laurence noticed a decline in his health, experiencing constant nausea, difficulty breathing, colds, and cough with spots of blood. A doctor advised a chest x-ray, the results of which showed "PTB vs. Pneumonia." He was recommended to be in isolation and bed rest for 60 days.

On February 3, 2012, Laurence sent a text message to his immediate supervisor, Joseph Benjamin Quintal, stating that he could not come to work because his x-ray results showed pulmonary TB and pneumonia, and that he was advised to rest and take medication because the disease was contagious. He did not indicate how long he would be absent. Joseph tried to call Laurence to remind him to submit a medical certificate and to ask how long he would be out, but Laurence did not answer. On February 6, 2012, Joseph sent another text message requesting that Laurence forward his medical certificate and test results to the clinic or HR, but Laurence did not reply. Laurence, for his part, had gone to Guimaras Island to quarantine himself and avoid spreading the disease to his co-workers. He later explained that he had no cellphone reception in the place where he was.

After more than a month without hearing from Laurence, Verizon sent its company nurse to his residence on March 8, 2012, to check on him and serve a notice requiring him to explain his unauthorized absence. No one was home; a nearby store owner directed the nurse to Laurence's relative's house, where the nurse spoke with Laurence's cousin, Melrose Anne Basillas, who informed the nurse that Laurence had left for abroad two weeks prior. The nurse left the Notice to Explain, dated March 5, 2012, with the cousin, advising her to hand it to Laurence's mother. The notice required Laurence to submit his explanation within 48 hours from receipt and stated that failure to reply would be considered a waiver of his right to be heard.

On March 14, 2012, Laurence received the notice forwarded from his residence in Cavite. He called Joseph, who allegedly told him that his employment had already been terminated on March 12, 2012. That same day, Laurence sent an email to Verizon in which he admitted his mistake, apologized for his unauthorized absence, and sought reconsideration of his dismissal. Verizon, however, did not consider his explanation, treating it as submitted beyond the 48-hour period prescribed in the notice. On March 28, 2012, Verizon sent Laurence a formal Notice of Termination, citing his failure to report to work from February 3, 2012 to date, his failure to inform his manager or HR of the reason for his absences, his failure to reply to messages and calls, and his failure to submit supporting medical documents. On the same day, Laurence filed his complaint for illegal dismissal and damages.

The Labor Arbiter dismissed the complaint, finding that Laurence's 38-day absence without official leave, without informing the company of the duration or offering a reasonable explanation, justified the application of the company's rule on absenteeism. The NLRC reversed, holding that Laurence was illegally dismissed because the company's rules did not require submission of proof of illness during sick leave, only upon return, and that Laurence had notified his supervisor of his sickness. The NLRC also found that Verizon failed to give Laurence an opportunity to be heard before dismissal. The Court of Appeals affirmed the NLRC, ruling that Laurence's text message gave sufficient information of his absence, that the length of his absence was justified by the serious nature of his illness, and that Verizon denied him due process.

• Valid Dismissal for Violation of Company Rules: Verizon contended that Laurence was validly dismissed because of his deliberate violation of company rules on unauthorized absences and excessive absenteeism, which warranted termination under the company's policies.
• Erroneous Interpretation by the CA: Verizon argued that the Court of Appeals erroneously interpreted the company rules by applying the rule on unauthorized absences while disregarding the provisions on absenteeism and excessive absenteeism as grounds for corrective action.
• Management Prerogative: Verizon maintained that it validly exercised its management prerogative in applying its rules on attendance and absences.
• Opportunity to Be Heard: Verizon asserted that it granted Laurence ample opportunity to be heard through the notice to explain and the subsequent evaluation process.

• Illegal Dismissal: Laurence maintained that he was illegally dismissed because there was no just or authorized cause for his termination.
• Lack of Due Process: Laurence argued that he was not accorded due process, as he was not apprised of the charges against him and was not made to explain his absence before being outrightly dismissed.
• No Abandonment or AWOL: Laurence contended that he did not go on absence without leave nor abandon his work, since he had notified his supervisor about his sickness through a text message on February 3, 2012.
• Justified Absence Due to Illness: Laurence argued that his failure to work was caused by pulmonary tuberculosis, a serious infectious disease that even to an ordinary person is known to require isolation during treatment.

• Violation of Company Rules: Whether Laurence violated Verizon's rules on authorized and unauthorized absences.
• Proportionality of Penalty: Whether the penalty of dismissal for excessive absenteeism was proportionate to the infraction committed.
• Procedural Due Process: Whether Laurence was accorded procedural due process in his dismissal.
• Award of Backwages: Whether Verizon should be excused from paying backwages despite the finding of illegal dismissal.

• Violation of Company Rules: No. Laurence did not violate Verizon's rules on authorized and unauthorized absences, having notified his immediate supervisor of his illness via text message on February 3, 2012, which was sufficient to apprise Verizon of his condition.
• Proportionality of Penalty: No. The penalty of dismissal was too harsh and disproportionate to the infraction committed, there being a reasonable expectation that a less punitive penalty would suffice.
• Procedural Due Process: No. Laurence was denied procedural due process because Verizon refused to consider his explanation submitted on the day he actually received the notice to explain, treating it as filed beyond the 48-hour period reckoned from service upon his cousin.
• Award of Backwages: Yes, Verizon is excused from paying backwages. The penalty of dismissal was too harsh and Verizon acted in good faith; moreover, Laurence was not entirely faultless because he left his residence without providing contact information.

• Violation of Company Rules: Under Verizon's own policies, an authorized absence due to sickness requires the employee to notify his manager at least four hours before his shift with a reasonable description of the illness, and to submit proof of illness upon return. The records showed that Laurence sent a text message to his supervisor on February 3, 2012, informing him that he was sick with pulmonary tuberculosis, a contagious disease, and was advised to take medication. Joseph did not deny receiving this message. The information given was sufficient to properly apprise Verizon of Laurence's condition. His failure to submit proof of illness while on sick leave and to indicate a return date did not render his absence unauthorized, particularly because the company's rules required submission of a medical certificate only upon return, and Laurence was never given the opportunity to return and submit the document. An employee cannot anticipate when an illness may occur and thus may not be able to give prior notice or seek prior approval, but could only do so after the occurrence of the incident.

• Proportionality of Penalty: The Constitution looks with compassion on the working class, and a worker's employment is property in a constitutional sense that cannot be deprived without due process and unless the deprivation is commensurate to the acts committed. While the employer has the power to discipline employees, this must not be exercised arbitrarily so as to erode security of tenure. There must be a reasonable proportionality between the offense and the penalty; dismissal is the ultimate penalty, and where a less punitive penalty would suffice, the employee's missteps ought not to be visited with so severe a consequence. Laurence's absence was due to sickness, and he gave proper notification. Even assuming a deliberate violation of company rules, the penalty of dismissal was too harsh and disproportionate. Knowledge of company rules, their violation, and dismissal in accordance with those rules do not automatically bind the Court. The Court relied on Cavite Apparel, Inc. vs. Marquez, where an employee with six years of service and no derogatory record other than four AWOL absences was dismissed for illness-related absences; the Court held the dismissal unreasonable and clearly disproportionate.

• Procedural Due Process: To effect a valid dismissal on the ground of just cause, the employer must observe procedural due process, consisting of the twin requirements of notice and hearing. Pursuant to King of Kings Transport, Inc. vs. Mamac, the employer must serve two written notices: the first apprises the employee of the specific causes or grounds for termination and gives a reasonable period — at least five calendar days from receipt — to submit a written explanation; the second informs the employee of the decision to dismiss. The first notice must contain a detailed narration of the facts and circumstances serving as basis for the charge, and must specifically mention which company rules are violated. A perusal of Verizon's notices revealed deficiencies. The March 5, 2012 Notice to Explain was served not on Laurence personally but on his cousin on March 8, 2012, yet Verizon insisted on reckoning the 48-hour period from that date. Laurence actually received the notice only on March 14, 2012, and emailed his explanation on the same day, but Verizon refused to consider it as allegedly submitted beyond the prescribed period. The right to be heard is an indispensable part of procedural due process and is satisfied not only by a formal confrontation but by any meaningful opportunity to controvert the charges and submit evidence. Because Laurence's explanation was not taken into account when Verizon decided to terminate him, he was denied his right to be heard.

• Award of Backwages: Although an illegally dismissed employee is generally entitled to reinstatement (or separation pay if reinstatement is not viable) and full backwages, the Court has carved out exceptions where reinstatement was ordered without backwages: (1) where dismissal would be too harsh a penalty, and (2) where the employer was in good faith in terminating the employment. In Integrated Microelectronics, Inc. vs. Pionilla, the Court excused the employer from paying backwages because the penalty of dismissal was too harsh and the employer was in good faith, having honestly perceived the employee's dereliction as a threat to company security. The Court cited Pepsi-Cola Products Philippines Inc. vs. Molon, Itogon-Suyoc Mines, Inc. vs. NLRC, and Cruz vs. Minister of Labor and Employment as consistent authority. Applying this doctrine, Verizon was absolved from paying backwages. While Laurence did not violate the rules on authorized absences, he was not entirely faultless: aside from the text message, he did nothing else to comply with the company's rules, did not inform the company that he would leave his residence, and left no information on how he could be reached. His supervisor exerted efforts to contact him to no avail. These circumstances, combined with Verizon's good faith in enforcing its policies, provided no basis for an award of backwages.

• Proportionality of Penalty in Labor Cases — There must be a reasonable proportionality between the offense and the penalty imposed on an employee. Dismissal is the ultimate penalty; where a less punitive penalty would suffice, the employee's missteps ought not to be visited with so severe a consequence. The Court will not hesitate to disregard a penalty that is manifestly disproportionate to the infraction committed. Applied here: Laurence's absence was due to illness and he gave proper notification; even assuming a violation of company rules, dismissal was too harsh and disproportionate.

• Twin Requirements of Notice and Hearing in Dismissal for Just Cause — Procedural due process in dismissal cases requires the employer to furnish the employee with two written notices: (1) the first apprises the employee of the particular acts or omissions for which dismissal is sought, with a detailed narration of facts and circumstances, a specification of company rules violated, and a reasonable period of at least five calendar days from receipt to submit a written explanation; and (2) the second informs the employee of the employer's decision to dismiss. Between the two notices, the employer must conduct a hearing or conference giving the employee the opportunity to explain, present evidence, and rebut the evidence against him. Applied here: Verizon's notice to explain was deficient, and Laurence's explanation was not considered because it was deemed submitted beyond a 48-hour period reckoned from service upon his cousin rather than from his actual receipt.

• Exception to the Award of Backwages in Illegal Dismissal — While an illegally dismissed employee is generally entitled to full backwages, the Court has recognized exceptions where backwages are not awarded: (1) where the penalty of dismissal would be too harsh, and (2) where the employer was in good faith in terminating the employment. Only employees discriminatorily dismissed are entitled to backpay. Applied here: Verizon was excused from paying backwages because dismissal was too harsh a penalty and Verizon acted in good faith; moreover, Laurence was not entirely faultless as he left his residence without providing contact information.

• Management Prerogative and Its Limitations — The employer's right to regulate all aspects of employment, including the promulgation and enforcement of company policies, is recognized but not absolute. It must be exercised within the parameters of law and pursuant to the tenets of equity and fair play, and must not be exercised in an arbitrary manner as to erode the constitutional guarantee of security of tenure. The rigid application of company rules cannot preclude the State from inquiring whether such application would work too harshly on the employee.

• "There must be a reasonable proportionality between the offense and the penalty. Dismissal, without doubt, is the ultimate penalty that can be meted to an employee. Hence, where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe." — This passage articulates the proportionality principle governing disciplinary penalties in labor cases, frequently cited as the controlling formulation for evaluating whether dismissal is commensurate to the offense.

• "[A]n employee's right to be heard is satisfied not only by a formal face to face confrontation but by any meaningful opportunity to controvert the charges against him and to submit evidence in support thereof." — This defines the scope of the employee's right to be heard in procedural due process, clarifying that the opportunity need not be a formal hearing but must be a meaningful chance to defend against the charges.

• "Knowledge of the company's rules, its violation, and dismissal in accordance with said rules do not automatically bind this Court." — This statement establishes that company policies, even when agreed upon and violated, are subject to judicial review for proportionality and fairness, and do not conclusively justify dismissal.

• "To serve the ends of social and compassionate justice, the severity of dismissal as punishment and probity of the employers' acts may preclude or diminish recovery of backwages. Only employees discriminatorily dismissed are entitled to backpay." — This passage states the doctrinal basis for the exception to the backwages rule, distinguishing between employees dismissed in good faith and those discriminatorily dismissed.

• Cavite Apparel, Inc. vs. Marquez, 703 Phil. 46 (2013) — Followed. The Court relied on this case for the principle that the rigid application of company rules on dismissal cannot preclude judicial inquiry into whether such application works too harshly on the employee, and that dismissal may be set aside as disproportionate to the infraction.

• King of Kings Transport, Inc. vs. Mamac, 553 Phil. 108 (2007) — Followed. The Court applied the guidelines set forth in this case for the twin-notice requirement and the conduct of hearings in dismissal for just cause, including the requirement of at least five calendar days for the employee to prepare a defense.

• Integrated Microelectronics, Inc. vs. Pionilla, 716 Phil. 818 (2013) — Followed. The Court applied this case as controlling authority for the exception to the award of backwages where the penalty of dismissal was too harsh and the employer acted in good faith.

• Pepsi-Cola Products Philippines Inc. vs. Molon, 704 Phil. 120 (2013) — Cited as supporting authority for the proposition that dismissal was too harsh and the employer was in good faith, precluding recovery of backwages.

• Itogon-Suyoc Mines, Inc. vs. NLRC, 202 Phil. 850 (1982) — Cited as supporting authority for the same proposition regarding the exception to backwages.

• Cruz vs. Minister of Labor and Employment, 205 Phil. 14 (1983) — Cited as supporting authority for the same proposition regarding the exception to backwages.

• Zagala vs. Mikado Phils. Corp., 534 Phil. 711 (2006) — Cited for the principles that an employer's power to discipline must not be exercised arbitrarily and that due process must be observed in dismissal.

• Article 294, Labor Code — Cited in connection with the illegally dismissed employee's entitlement to reinstatement without loss of seniority rights and other privileges and to full backwages. The Court referenced this provision in affirming the general rule before carving out the exception excusing Verizon from paying backwages.

Peralta, C.J. (Chairperson), Caguioa, Reyes, Jr., and Lazaro-Javier, JJ., concurred.