NEW SUNRISE METAL CONSTRUCTION VS VICTOR PIA

NEW SUNRISE METAL CONSTRUCTION

VS

VICTOR PIA
527 SCRA 289 (2007)

Unsatisfactory performance, under the Labor Code, must be gross and habitual to constitute just cause for dismissal.

Victor Pia, et al. were hired by New Sunrise under separate 6-month contracts but their services were subsequently terminated even before the expiration of said contract due to alleged poor performance. Pia, et al. filed a complainant for illegal dismissal and underpayment of wages as well as non-payment of other benefits before the Labor Arbiter. The Labor Arbiter ruled in favor of Pia, et al New Sunrise was ordered to pay Pia, et al. their proportionate 13th month pay and corresponding salaries for the unexpired portion.

New sunrise appealed to the National Labor and Relations Commission (NLRC) but NLRC dismissed the appeal. A motion for reconsideration was filed. The NLRC reversed its resolution finding the dismissal to be based on just cause. On appeal, the Court of Appeals affirmed the Labor Arbiter’s decision. Hence, this petition.

ISSUE:
Whether or not incompetence or poor performance, not amounting to gross and habitual neglect of duties, can be a valid cause for termination of employment

HELD:
The Supreme Court upheld the decision of the Labor Arbiter positing that ―at all events, unsatisfactory performance cannot be considered a just cause for dismissal under the Labor Code if it does not amount to gross and habitual neglect of duties. On this score, New Sunrise failed to prove that the alleged inefficiency of the 12 respondents amounted to gross and habitual neglect of duties.‖

There is no denying that the unsatisfactory performance of the employees were proven in the report provided by New Sunrise but sad to say, it is not enough proof that it amounted to gross and habitual neglect of duties.

Further, New Sunrise failed to establish that they were informed, at the time of hiring, of the standards they were expected to meet, i.e., that they were supposed to reach certain quotas. This is not to mention that New Sunrise failed to present proof that respondents were apprised of their poor or below average performance after each evaluation period to at least give them the opportunity to improve their performance.