CASE ANALYSIS
SM Development Corporation, et al.
Vs.
Teodore Gilbert Ang
Submitted by:
Añoso, Camille
Castro, Czarina
Del Mundo, Camille
Escovidal, Jelsa
Pasao, Sofia
Urriza, Stephanie
BSA 2-1
Introduction
In doing business, a lot of things are put into consideration in order to be stable.
Employees would do their best so they can achieve a good result. But how can we say that their
performances are right? Would it be based from the result or the performance itself? Developing
appropriate business policies that are guided with business ethics can lead every company to
achieve their desired goal. The definition of business ethics generally stated that “coming to
know what is right or wrong in the workplace and doing what's right”. Considering the ethics of
business inside the workplace helps leaders and managers that when they are facing complex
decision-making during crises and confusion, they retain a strong moral compass. It also
ensures that any ethical issues that the business will face with its employees and consumers
can be guided by business ethics as the leaders and managers are equipped with strong moral
compass (Hopwood, 2018).
Businesses provide certain rules and regulations for the employees to follow. These
rules bring the acceptable behavior of an employee inside the workplace. However, these
policies will be deemed useless if an employee neglects its duties to follow company policies
(Sanelli, 2020). Just like in the case of SM Development Corporation and its employee Teodore
Gilbert Ang, where the company tried their best to achieve the best results by providing rules
and regulations to each employee, but the negligence of an employee put the company at a
loss.
Summary of the case
On the case of GR No. 220434, the petitioners are the SM Development Corporation
(SMDC), Ms. Joann Hizon (SMDC’s Head of Human Resource Department), Atty. Mena Ojeda
Jr. (SMDC’s Vice President Legal), and Rosaline Qua (SMDC’s President) versus the
respondent, Teodore Gilbert Ang (SMDC’s ex-Project Director).
The indictment in the case is that Mr. Ang has many issues regarding cost status
concerning the field residences; which is one of the project he manages. Mr. Ang submitted his
explanation and denied the allegation that he overruns the cost in the general preliminaries.
Moreover, he presented facts about his other projects to negate the accusation. He even
included some significant documents directly affecting the project to show that he was not
negligent to his responsibilities.
Mr. Ang was called for a meeting with a purpose of informing him that the management
wants him to resign in his current work without stating specific reasons. After his filed vacation
leave was finished, he returned to work but face with another multiple allegations that needed
his explanation and cost him 30-day preventive suspension without pay.
The allegations contained charge with gross and habitual neglect of duties and loss of
trust and confidence due to following violations: [1] Non-collection of SM’s Synergy cost of
repainting of the Clusters 1 & 2 in Chateau Elysee costing 4,500,000Php, [2] Sale of Field
Residences’ nonexistent parking slots, [3] Sale of Field Residences’ storage area not covered in
license to sell, [4] Not being able to clear the expenses for holding the 2010 Chateau Elysee
Basketball League to the COO costing 52,000Php, [5] Low sales generated in Chateau, [6]
Violation of discrepancy in residential and parking slots at Filed Residence.
After the suspension, he then again attend meeting that surprised him due to the
termination letter shown to him. He was stunned to know that an administrative hearing about
his termination occurred without his knowledge. Accordingly, he filed a case against the
petitioner for illegal dismissal with money claims.
The petitioner counter argued the case filed against them by showing reports on
numerous incidents and negligent acts of the respondent that result in the loss to SMDC or
which divulge the corporation and its officer to possible criminal, administrative and civil
sanctions. The reports also shows that several meetings was held between the petitioners and
the respondent but the respondent did not submit any justification to his doings and even
unsuccessfully attend hearings despite the due notice.
The Labor Arbiter states that there were considerable documentary evidence proving the
fair and lawful cause for respondent’s dismissal on the ground of incompetence and gross and
habitual neglect of duties.
The respondent filed an appeal but got dismissed due to the proven evidence of his
habitual neglect of duties. Distressed, he filed for motion for reconsideration but still got
dismissed, he filed for Certiorari with the Court of Appeals (CA). The CA then approved his
petition and reversed the ruling of Labor Arbiter with a ground of illegal dismissal of respondent
and ordered the petitioner to: [1] restore the respondent without losing his seniority rights and
other privileges, [2] pay the respondent full back wages, including allowance and other benefits,
and the monetary equivalent from the time he was suspended up to his actual restoration, [3]
pay attorney’s fees equivalent to 10% of the total monetary reward.
The CA then held the allegation of petitioner to respondent about incompetence and
gross and habitual neglect of duties as not supported by significant evidence and observed that
the respondent has been working with SMDC for a period of 6 years without having previous
records of inefficiency or violation of company rules. Moreover, the CA stated that the basis for
the loss of trust and confidence was not manifestly established because there was no evidence
of breach of trust with respect to his supposed duties as Project Director. Furthermore, the CA
stated that the petitioner failed to give proper notice to respondent as the shipment tracking
about the information of the hearing was received by the respondent’s landlady.
The petitioner counter filed for motion for reconsideration and carry out the issue;
whether the respondent may be dismissed from the ground of loss of trust and confidence.
The court found importance in the petition, the court deems to review, re-evaluate and
re-examine the evidence submitted draw conclusion therefrom.
After thorough examination, the court agrees with the findings and conclusion of the
Labor Arbiter. The respondent was found to be guilty of breach of trust and confidence. As
project director, he was the head of all the projects of the petitioner which he was assigned to
have responsibility to ensure to meet the expectations and objective set by the administration of
the corporation. The respondent is a managerial employee which is an intricate position that
requires full trust and confidence of the employer.
Under Article 297 of the Labor Code, a lawful removal based on loss of trust and confidence
must satisfy two conditions; [1] the employee must hold a position requiring trust and confidence
of employer, and [2] there must be an action that validates the loss of trust and confidence. The
two requisites are present in this case.
The respondent’s failure to handle the project that is a complex matter concerning
attention to details does not only affect company’s finances but also the welfare of other
employee and even the clients. He failed to execute what was expected of him hence the
petitioner has a valid reason in losing confidence which justified his termination.
The respondent’s lack of previous record of inefficiency and violation of company’s
policy for almost 6 years cannot be a valid ground to disprove the claim of the petitioner. The
clean record for a period of 6 years does not constitute that the discovery of the misdeed should
intervene in the decision of petitioners to not lose trust and confidence in him.
Finally, he was informed of the allegations against him on the day of his suspension but
did not give written explanation or adduce evidence in his favor to protect himself from the
dismissal. Following with fundamental jurisprudence, if the dismissal is based on just cause, the
non-compliance with due process should not result to termination of decision. Therefore, the
petitioner is not held liable to pay back wages or separation pay.
The petition is granted, the petitioners allegation of loss of trust and confidence has a
valid cause for dismissal of respondent. For the non-compliance with due process, the
petitioners are ordered to pay respondent nominal compensations in the amount of 30,000Php.
Evaluation of Verdict
The decision of the court that the dismissal of Mr. Ang was just and reasonable as he is
deemed to be liable for negligence and this resulted for the SMDC to pay ₱30,000 for the
nominal damage they made to Mr. Ang. The judgment made was purely based from the rulings
they had. But how can we say that the verdict they made was right for each party? Morality is
actuality a belief which states whether an action is right or wrong. So in terms of morality, how
can we say that the decision made was right? We can say that the ruling is made rightful and
just for every party. It hears both sides and concludes decisions based from rules and not from
result. If we are to connect it to the ethical world, we can connect it to the deontological ethics.
The morality is determined through the rules and laws. Deontological ethics indicates that a
situation can be distinguished as right or wrong based from certain rules or duties. It is different
to other theories in a sense that it focuses on what to follow rather than the outcome of a certain
action. According to BBC, “deontological ethics are duty-based ethics, we need to follow the
given rules in order to fulfill our duties and obligations even if it is right or wrong and even if it
produces a good or bad consequence.”
Knowing that Mr. Teodore Gilbert Ang was an employee of SM Development
Corporation means that Mr. Ang had a contract to serve them as a Project Director. He needs to
follow what was written in the contract and maintain a fiduciary relationship with the corporation.
However, according to the case, Mr. Ang neglected his duties and caused some damages to the
corporation. He would only be liable accounted for fiduciary if the situation can be satisfied with
the two conditions. The first condition is that the person involved must be under a fiduciary
relationship with a company, and the second one is that the person must have acted a
performance that made him loss the relationship he had with a company. Based from the two
conditions and from the actions of Mr. Ang stated from the start, Mr. Ang is indeed liable. It is
only right to do what is under the law. If we are to apply the principle of the deontological ethics,
the decision made based from the rules they follow was right. His situation satisfied the
conditions. We therefore believed that it is right and just to terminate his contract with the
company knowing that he did not carefully do his responsibilities. Deontological theory actually
promotes responsibility. It requires individuals to be in harmony with the rules created in a
certain place. It is Mr. Ang’s responsibility to abide by the contract he and his employer had.
As a Project Director, his duties are to facilitate the projects on-going for the company.
For example, the project he was assigned which is the Field Residence, which also had issues
regarding the finances involved. His position was quite high; therefore his actions should be
done critically. Let’s make what UNM Job Descriptions stated as a reference to know what
Project Directors really have to do in general in order to make it easier to understand the case.
According to them, some duties of a project director are to make sure that the on-going projects
are stable and consistent with the objectives they established. They are also tasked to manage
the relationships between teams and also their concerns. They are also assigned to develop
and administer the budgets for the projects to be done. These duties are only a glimpse of what
Mr. Ang should do. However in his situation, he did some bad performances that made the
company lose their trust to him. Rather than being sympathetic on the result of the ruling which
made Mr. Ang unemployed, we focused on the actions he made. Yes, Mr. Ang would suffer but
the ruling is still right since the rules governing it say so.
On the other hand, with regards the situation of the petitioners, they had to pay ₱30,000
to Mr. Ang due to the damage they made. This damage actually resulted when they made a
decision without Mr. Ang’s presence. Just like what we have stated above, SM Development
and Mr. Ang had a contract. Under it is to be mindful of the decisions done on each party. They
have a duty of mutual trust and confidence between them and to give respect to each other.
However, on the side of the petitioners, they did not give Mr. Ang a chance to appeal to the
company during their meetings. They dismissed him without further notice. They did not even
include him in the meeting. The petitioners focused too much to save their company from the
negligence of Mr. Ang, since his actions resulted to pecuniary loss of the company and it also
resulted to making the corporation subject to possible sanctions. In connection with
Deontological ethics, the company uses employees to attain their set of objectives, but the
action of using the employees does not violated the principle since employees are fully
conscious about the roles they are entering into. Even if the company has a good intention in
carrying out this objective, if the method for attaining this intention is wrong then the whole
action can never be morally justified. Hence, the action made by SM Development Corporation
to not include Mr. Ang in the meetings and just decide to terminate him without giving him a
proper notice, because of his negligence to the company, is not right. According to the law,
employers are not obliged to continue the employment of an employee guilty of damaging the
interest of the company and if the loss of trust and confidence of the employee is justified. And
also, employees are allowed to demand for damages from the company even though there is a
valid cause for removal but the company did not comply a due process for it. Hence, we
believed that it is right and just for the company to be held liable for the illegal dismissal of the
employee in view of the fact that the sending of notice have not been properly observed and
that they failed to prove that the dismissal was for a just cause and validated it thru a due
process.
As a company, it has many obligations and duties to its employees and same goes for
the employee to his company. Moreover, as stated above they are bind into a contract and have
duties of trust and confidence of each other. If one of them have done unjustly things to the
other, the former is liable for damages to the other party. In addition, it was raised in the court
that SM Development Corporation shall be liable for respondent’s back wages, allowances and
other benefits or its monetary equivalents. The company shall only be liable of nominal
damages for the illegal removal of the employee and not liable for the payment of back wages
or separation pay. Because it is proven that Mr. Ang is deemed guilty of his actions and the
decision of being terminated is valid. In ethics, what is right shall prevail and the law governing
the case is right and just even though the result will not favor the respondent. Hence, we
believed that the decision of the court is right, that SM Development is only liable for its
termination of Mr. Ang.
Since this case is an example of Deontological Ethics, Mr. Ang should not continue his
vacation even if it is filed way back in January. He should fix the issues first before leaving the
company for his vacation. He should clear his name and face the allegations the petitioners
were accusing him. He knew something was wrong with the company but he still continues his
leave. I think this is not a right thing to do. He should stay in the company to prove his
innocence. If he didn’t leave for his vacation, maybe he can see the notice and will go to the
administrative hearing. Because of his negligence of not checking what his landlady may
receive, he didn’t know about the notice of the court. Even if he submitted an explanation
regarding the allegations of the petitioners, it is not enough. Like what deontological ethics state,
even if you fulfill your duties and obligations in a wrong or right way, it may produce a bad or
good consequence. As an employer, they should maintain their reputation that’s why they
decided to terminate Mr. Ang’s contract because they received a report about Mr. Ang’s
negligence, they didn’t want to ruin SMDC’s reputation. Mr. Ang’s position in the company is
quite high and it really needs trust and confidence. Because of his high position as the Project
Director, if he did something negligent, this may affect the reputation of the company.
Even if you’re in the company for many years, that doesn’t mean that you will not do
something negligent. At first, you’re afraid to do something that is bad because you need to
protect yourself and your position. But as time goes on, you can do something negligent even
without noticing it because you already have a high position.
Practical Application
In the case of SM Development Corporation, Joann Hizon, Atty. Mena Ojeda, Jr. and
Rosaline Qua vs. Teodore Gilbert Ang, the main issue here is whether the respondent’s
dismissal from employment on the ground of loss of trust and confidence is legal. As an
employee who decided to enter a business in the form of partnership or corporation it is one’s
responsibility to know what is right and what is wrong while doing their job. Every employee
together with their employers needs to know the basic principle about business ethics and
corporate social responsibility since it can bring significant effect to the business. But aside from
this term, which is probably written in a contract, there is an implied term which is probably not
written but automatically understood to exist like what we called the duty of mutual trust and
confidence. It is important for every employee and employer to practice this duty in a workplace
to avoid any conflicts like in this case of SM Development Corporation vs. Ang. Since Teodoro
Ang holds an executive position to SMDC as project director he is automatically have a duty of
mutual trust and confidence with SMDC even without any written consent. The relationship
between SMDC and Ang requires honesty, respect to each other and restrain themselves to do
anything that can cause of destroy or damage to their relationship.
This case is also connected to deontological ethics which an ethical theory that requires
people to follow the rules and do their duty properly and honestly without considering the
consequences after. An act of Teodoro Ang proves that he is guilty on loss of the duty of mutual
trust and confidence with SMDC since he failed to manage the project properly that is in trusted
to him. It is an imminent act that causes danger not only to company’s finances but to the whole
corporation. Since the court decides with the requisites based on the Article 297 of the Labor
Code, the decision is valid and justifiable. Overall, the learning from this case is all about the
importance of having the knowledge about ethics when you enter a business. In every action we
need to do, we need to think very carefully before doing it. Decision making plays a big role in a
business that is why it is very important to be a good decision maker, and for us to be a good
one we need to learn how to be ethical and rational thinker. This case really helps us to be
aware in what is right and what is wrong when it comes to entering or be part of the business.
On the evening of March 16, 2020, the President Rodrigo Duterte imposed that an
Enhanced Community Quarantine (ECQ) shall be effective on March 17, 2020, 12am in Luzon.
Businesses that provide necessity can operate mandating that the health protocols should be
strictly observed. The DOLE issued on March 4, 2020 the “COVID-19 Flexi-Work Advisory”
employees are encouraged to adopt FWAs for those businesses that are required to close to
prevent the spread of COVID-19 (Navarro et al., 2020). These businesses if they adapt the
FWA of the DOLE shall mandate its employees to abide to this policy, the employees have their
duty to follow this policy amidst the pandemic. Disregarding those possible instances of loss of
internet connection and works that require physical operations (e.g. manufacturing companies).
Judging its morality based on deontological ethics, it is the duty or the moral obligation of the
employees to act accordingly to the company’s policy. Despite of the hindrances or the
impossibility to act, for the deontological ethics, it is only right as it is in the policy of the
company.
References:
Business Ethics and Social Responsibility. (n.d.). Retrieved from
https://managementhelp.org/businessethics/index.htm
Cortez, F. G. (2016). Business Ethics and Social Responsibility. Quezon City: Vibal Group, Inc.
Executive Project Director - Job Descriptions - Human Resources :: The University of New
Mexico. (n.d.). Retrieved from https://jobdescriptions.unm.edu/detail.php?v&id=A8038
Navarro, A. A. E., Pomoy, R. A. C., & Resurreccion, E. I. I. R. (2020, April 17). Distancing from
confusion in philippine labor law compliance during the covid-19 pandemic. Retrieved from
https://www.lexology.com/library/detail.aspx?g=68d8920b-91e4-4965-afea-f37efc55f646
Sanelli, A. (2020, May 31). Importance of Policies & Procedures [Case Study]: Compliance
Report. Retrieved from https://www.convercent.com/blog/the-importance-of-policy-
procedure
Scph. (2019, September 19). scph. Retrieved from http://sc.judiciary.gov.ph/6630/
Singh, A. K., & Mishra, N. (2018, January 1). (PDF) ETHICAL THEORY & BUSINESS A study
based on Utilitarianism and Kantianism. Retrieved from
https://www.researchgate.net/publication/323868594_ETHICAL_THEORY_BUSINESS_A_
study_based_on_Utilitarianism_and_Kantianism
The Importance of Business Ethics. (2018, January 8). Retrieved from
http://www.seanhopwood.com/blog/leadership-and-management/2018/01/the-importance-
of-business-ethics-5107
