ROUCHE v. FRENCH CHAMBER OF COMMERCE IN THE PHILIPPINES-LE CLUB [G.R. No. 238581, December 7, 2022]

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ROUCHE v. FRENCH CHAMBER OF COMMERCE IN THE PHILIPPINES-LE CLUB

[G.R. No. 238581, December 7, 2022]

SECOND DIVISION, LEONEN, J.

 

Illegal Dismissal; Loss of Trust and Confidence; Specificity of the Ground for Dismissal; Gross and Habitual Neglect of Duty; Twin-Notice Rule; Belated Notice to Explain; Alien Employment Permit; Negligence of Counsel; Conflict of Interest

 

An employer invoking loss of trust and confidence must prove that the employee held a position of trust and that he committed a willful breach founded on clearly established facts. A bare invocation of “loss of trust,” without identifying the particular acts complained of, does not satisfy the requirement of a valid cause, for an unspecified charge deprives the employee of any means of intelligently answering it. Gross and habitual neglect of duty is likewise unavailing absent proof of both want of care and repeated failure over a period of time. Procedurally, the twin-notice rule demands that the notice to explain and the opportunity to be heard precede the decision to dismiss; a notice to explain or a notice of termination served only after the employee has already been terminated, or after he has already filed a complaint for illegal dismissal, is an ex post facto measure that cannot cure the antecedent violation of due process. Finally, the negligence of an employee's own counsel which itself creates the very defect later invoked against him will not be held against that employee.

 

Steven Rouche, a foreign national, was engaged by respondent French Chamber of Commerce in the Philippines-Le Club under a Consultancy Agreement executed on December 11, 2013, conditioned on the approval of a Section 9(g) pre-arranged employment visa and an Alien Employment Permit (AEP). Rouche secured both; his visa was valid until December 18, 2014. 

On May 1, 2014, his role changed to Managing Director under a three-year employment contract, but his visa and AEP were never renewed to reflect the new position. Rouche had engaged the law firm Paras & Manlapaz to process the renewal. On March 12, 2015 the firm informed him that it could not timely process the renewal due to its own delay, and instead recommended that he apply for a Section 13(a) visa based on his pending marriage to a Filipino citizen. 

On May 4, 2015, respondent Christophe Riout, then President of the Chamber, informed Rouche that his services were being terminated on the ground of “loss of trust,” without specifying the particular acts underlying that loss of trust. Rouche was offered incentives to resign voluntarily but refused. On May 12, 2015, Riout publicly announced Rouche's departure and the appointment of a new Managing Director. 

On June 1, 2015, Rouche filed a complaint for illegal dismissal, claiming unpaid salary for the unexpired portion of his contract, commissions, 13th month pay, paternity leave benefits, and relocation costs. It was only after this complaint was filed that respondents sent him a Notice to Explain; the final Notice of Termination was dated July 3, 2015. Respondents defended on the theory that his employment as Managing Director was void for lack of a valid work visa and AEP for that position. 

The Labor Arbiter found Rouche illegally dismissed, holding that respondents failed to substantiate the charges and that both parties were in pari delicto on the visa lapse, and awarded PHP 1,939,946.53. The NLRC reversed, holding the employment contract void for want of proper immigration documentation, relying on WPP Marketing Communications, Inc. v. Galera and McBurnie v. Ganzon. The Court of Appeals affirmed, finding that Rouche came to court with “unclean hands.” Rouche elevated the case to the Supreme Court.

 

 

Whether Rouche was illegally dismissed.

YES. Respondents failed to prove a valid cause on either ground invoked. On loss of trust and confidence, the Court reiterated that the breach must be willful — done intentionally, knowingly, and purposely, without justifiable excuse — and founded on clearly established facts. Here, the particular acts that led to the supposed loss of trust were never made known to the employee; Riout merely informed Rouche that his services were being terminated due to loss of trust. On gross and habitual neglect of duty, gross negligence imports want of care in the performance of duties while habitual neglect imports repeated failure over a period of time; both elements must concur, and respondents substantiated neither.

The Court also rejected the reliance of the tribunals below on the invalidity of Rouche's visa and AEP for the position of Managing Director. Distinguishing Galera and McBurnie, it noted that Rouche had validly secured his original permits, and that the failure to renew was attributable to the negligence of the law firm he himself had engaged — a firm which later, in a conflict of interest, appeared as counsel for the opposing respondents. Such negligence of counsel could not be used to strip him of the protection of labor law.

 

 

Whether a bare allegation of loss of trust and confidence, without specifying the particular acts complained of, constitutes a valid cause for dismissal.

NO. Merely invoking “loss of trust” as a catch-all phrase, without identifying the specific acts or omissions giving rise to it, does not meet the standard required for a valid dismissal on that ground. The breach must be willful and founded on clearly established facts sufficient to warrant the employee's separation from work. A generalized, unspecified charge deprives the employee of the ability to intelligently respond to and refute the accusation, and therefore cannot constitute a valid cause for termination.

 

 

Whether a Notice to Explain and a Notice of Termination issued after the employee had already been dismissed and had already filed his complaint can cure the earlier violation of procedural due process.

NO. The twin-notice requirement was violated because the notices came too late to serve their purpose. Rouche was informed of his termination and publicly replaced in early-to-mid May 2015; he filed his complaint on June 1, 2015; and only thereafter did respondents send a Notice to Explain, with the final Notice of Termination dated July 3, 2015. The Court held that the belated attempt to comply with the required processes cannot remedy the violation of the employee's right to due process, the notices having been issued as an afterthought to a dismissal already effected rather than as a genuine opportunity to explain before termination.

 

 

Whether Rouche is entitled to moral and exemplary damages.

NO. Moral and exemplary damages require proof that the dismissal was attended by bad faith or fraud, was oppressive to labor, or was contrary to morals, good customs, or public policy. Rouche failed to prove such allegations, and the claim was denied. The Court instead ordered a recomputation of the monetary award, since Article 294 of the Labor Code entitles an illegally dismissed employee to full backwages inclusive of allowances and other benefits, whereas the original computation covered only base salary and excluded regularly received allowances.

 

DISPOSITION: The Petition was GRANTED. The Decision and Resolution of the Court of Appeals were REVERSED and SET ASIDE, and the Labor Arbiter's Decision was AFFIRMED WITH MODIFICATION. The case was REMANDED to the Labor Arbiter for computation of full backwages and other monetary awards. The Court further DIRECTED the Office of the Bar Confidant to investigate the alleged violations of the Code of Professional Responsibility by the counsel concerned, for possible filing of an administrative case.


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