J. WALTER THOMPSON CO. (PHIL.) AND LYLE K. LITTLE, PETITIONERS, VS. THE NATIONAL LABOR RELATIONS COMMISSION, ARBITRATION BRANCH NO. IV AND RAUL L. CONTRERAS, RESPONDENTS.

This is a petition for certiorari assailing the decision
of the National Labor Relations Commission that Raul L. Contreras, a managerial
employee, was illegally dismissed by J. Walter Thompson Co. (Phil.) and is
entitled to an award of P202,500 as actual damages.  The question is whether Contreras was guilty
of disloyalty and was justifiably dismissed on that ground before the expiration of his term of three years.

Contreras, an advertising man employed in the United States by
International Playtex Company at $22,000 per annum, exclusive
of share in the profits, resigned from
the company on June 3, 1974 to work in the Philippines for
JWT Philippines.  He arrived in Manila on July 15, 1974.  His
new employer allegedly spent P84,700 for his transfer
to Manila (p. 53, Rollo).

Contreras contends that
he was induced by JWT Philippines to work for a definite period of three years,
and he cites the affidavit of Harold F. Clark, a vice-president of JWT New
York, that Contreras would “be in Manila in the course of his employment for a period
of three years” (p. 36, Rollo).

But this was denied by
petitioner Lyle K. Little who averred that Contreras applied with JWT New York
and that he accepted the new position at a much lower salary because
his family was allegedly unhappy in the United States and that unless he returned here time
would pass him by (p. 53, Rollo).

Contreras was assigned as
an advertising account management supervisor of JWT Philippines at a salary of
$13,500 a year (p. 50, Rollo).  As such, he was placed in direct charge of an
account with two groups responsible to him.  He was a part of the management staff.

After about six months,
he noticed that the firm had reneged on its commitment of a written
employment contract which its officials had promised before he enplaned for Manila.  His
annual salary was not increased on January 1, 1975 notwithstanding that Little,
the president and chief executive officer of JWT Philippines, had expressed
extreme satisfaction with his performance. 
He eventually received a 7% increase while the other members in his
division received at least a 10% pay hike.

On August
29, 1975, Little convened a meeting of the management committee to
look into reports that Contreras has been engaging in activities detrimental to
the company.  He asked Contreras to
attend the meeting but the latter was on sick leave because of a painful attack
of gout.

During that meeting, Wilfrido Ong, an account director
in the firm, narrated how he was allegedly invited by Contreras to join him in
the agency he was setting up.  At the
conclusion of the meeting, it was established that Contreras was putting up an
advertising agency and that he tried to recruit JWT personnel.

The management committee
reconvened two days later or on September 1. 
Contreras was present this time. 
Little informed him that the committee had evidence to prove that he has
been “disloyal” to the company. 
He was asked to explain his side. 
Apparently dissatisfied with Contreras’ explanation, Little
asked for his resignation.  Contreras
refused to resign.  (Exh.
4-Q)

On September
3, 1975, in a letter to Contreras prepared by Little, JWT Philippines terminated
his services for the reason that he was planning to open a competing
advertising agency and, in connection therewith, had actually tried to
persuade several of the key personnel of JWT Philippines to resign and join him
in his proposed enterprise.  He also
attempted to take away business from the firm. 
As a consequence of those alleged acts of disloyalty, his employer lost
confidence in him.

Little in his letter of
September 11, 1975 (copy furnished Contreras) apprised the Director of Regional
Office No. 4 of the Department of Labor of the dismissal of Contreras on
September 5, because he planned to open
a competing advertising agency
and had asked some employees of JWT Philippines to join him in his proposed
venture (p. 54, Rollo).

On October
6, 1975, Contreras
filed a complaint with the Regional Office No. 4 against JWT Philippines and
Little for illegal dismissal and damages aggregating P624,500
plus exemplary damages, attorney’s fees and expenses of litigation.  There was an alternative prayer for
reinstatement.

The Labor Arbiter in his
decision dated November 17, 1977 held that Contreras was
“unceremoniously dismissed without just and valid cause”.  He ordered JWT Philippines and Little to pay solidarily Contreras, as actual damages, P202,500 (P7.50 x ($13,500 x 2 years) equivalent to his
compensation for the remaining two years of his contractual service with
JWT Philippines plus P57,375 as the difference between his salary at JWT
and his salary at International Playtex
Company and P50,000 as moral
damages, or the total amount of P309,875.

On appeal to the NLRC,
Commissioners Gabriel M. Gatchalian and Miguel B.
Varela affirmed the findings of the Labor Arbiter but they reduced the award of
damages in favor of Contreras from P309,875 to P202,500.  They disallowed the award for the difference
between Contreras’ salary at JWT Philippines and his salary at International
Playtex Company “for not being contractual in nature” and the moral
damages which they believed were unwarranted “under both legal and
environmental circumstances of the case”.

Presiding Commissioner
Guillermo C. Medina dissented.  He voted
to deny the award of P202,500 because JWT Philippines
has proven by substantial evidence the
just termination of Contreras’
services.

It is manifest that
the case has become highly controversial.  We
have viewed the case from all angles and endeavored to find a just and
equitable solution to the controversy. 
There is no question that Contreras was hired for a three-year period
but before its expiration his employer had lost confidence in him because of
his supposed disloyalty.

Little in his letter of September
15, 1975 said that JWT Philippines never doubted
the ability and technical competence of Contreras and that he was satisfied with Contreras’ performance (p.
53, Rollo).

It is noteworthy that
Contreras did not establish any competitive advertising agency immediately
after his dismissal.  He disclosed that
he was financially exhausted by this protracted legal battle and that his
dismissal caused a serious injury to his career and employment prospects.

We hold that as a measure of compassionate
justice the award of P202,500 should be affirmed but the sum of P84,700,
representing the transportation costs incurred by JWT Philippines in bringing
his family and household effects to this country, should be deducted from
that amount.

WHEREFORE, the NLRC judgment is modified by awarding to
Raul L. Contreras the sum of P117,800 as his net
separation pay for the remainder of the three-year period.  No costs.

SO ORDERED.

Concepcion, Jr., Guerrero, De Castro, and Escolin, JJ., concur.

Makasiar (Chairman), and Abad Santos, JJ., no part.