SC affirms company’s suspension of employee after he blocked access to the software he created
The Supreme Court has affirmed a company’s action to suspend an employee who restricted access to the software he had built while working for them.
According to the decision, design engineering and construction management company JGC Philippines, Inc. had suspended senior engineer Santiago Sillano after he restricted access to the five programs he made due to a dispute over their ownership.
Sillano claimed that he owned the software as the program's creator, but JGC countered that it was the owner since Sillano created it within the course of his employment with the company.
They explained that any work product of an employee during the period of employment automatically becomes its property.
Because of this disagreement, Sillano activated security features that made the programs unusable for JGC's business projects.
The company then suspended him due to unauthorized destruction, tampering, taking, or concealment of company records, and failure to comply with official orders and/or perform regular assigned duties or specific instructions related to his duties.
After being ordered to remove the security features, Sillano instead offered a compromise. He agreed to adjust the time-lock mechanism on the computer programs but refused to disable the security features entirely. He further questioned his preventive suspension, considering JGC had yet to establish its ownership over the programs.
The company ultimately fired him for disobedience and filed a complaint against him before the National Labor Relations Commission for breach of his employment contract.
In response, Sillano sued JGC for illegal dismissal and suspension.
"According to Sillano, his refusal to obey JGC's order to remove the security features of his programs was based on his claim of ownership over the same; thus, JGC illegally dismissed him. He argued that as the owner of the programs, he had the authority to place security measures against its unauthorized users," the decision read.
"Moreover, Sillano claimed that his employment contract neither stated the creation, writing, and/or development of computer programs was among his functions, nor provided that JGC was automatically the owner of programs he would create as a JGC employee. As such, he maintained that JGC could not claim ownership over the said programs," it added.
While the Intellectual Property Office ruled that Sillano owned the software, the NLRC, as well as the Court of Appeals, backed the company in that they were justified in suspending Sillano but illegally dismissed him. This was affirmed by the SC.
"The requirements for a valid imposition of preventive suspension were complied with in the present case. Preventive suspension is not a penalty but a disciplinary measure to protect life or property of the employer or the co-workers pending investigation of any alleged infraction committed by the employee," the high court said.
"Thus, it is justified only when the employee's continued employment poses a serious and imminent threat to the employer's or co-workers' life or property," they added.
Under the Labor Code, an employer can preventively suspend an employee—without pay—for up to 30 days if the employee’s presence poses a threat to the company or its property.
"In this case, JGC had good reason to suspend Sillano. At that time, the company believed it owned the software, as the IPO had not yet ruled on this matter. Sillano’s action – blocking access – posed a threat to its property. The suspension also complied with the 30-day rule," the SC explained.
