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Advocates Philippines
Supreme Court Affirms Valid Suspension Of Engineer Over Software Lockout
Photo credit: SC
The Supreme Court has ruled that JGC Philippines, Inc. was within its rights to place a senior engineer under preventive suspension after he blocked access to software he had developed while employed at the company.
In a decision penned by Associate Justice Samuel H. Gaerlan, the Court’s Third Division upheld the validity of JGC’s suspension of Santiago DJ. Sillano, citing that the action was justified at the time and in accordance with the Labor Code.
Sillano, a senior engineer at JGC, had developed several software programs during his tenure. When a dispute arose over who owned the intellectual property—Sillano claimed personal authorship, while JGC asserted company ownership—he activated security measures that rendered the programs unusable.
In response, JGC placed him under preventive suspension and asked him to explain his actions. The company also demanded he unlock the software and turn over the source codes. Sillano refused, insisting JGC had not yet established ownership of the programs.
The company later terminated him for disobedience and filed a case alleging breach of contract. Sillano, in turn, filed separate complaints against JGC, including for illegal suspension and dismissal. He also initiated proceedings before the Intellectual Property Office (IPO), which eventually ruled in his favor, confirming him as the rightful software owner.
While the Labor Arbiter initially sided with JGC and found the dismissal valid, the National Labor Relations Commission (NLRC) and the Court of Appeals (CA) both reversed that finding. They concluded that although JGC acted lawfully in suspending Sillano as a precaution, his dismissal was not justified.
The matter reached the Supreme Court, but only the validity of the preventive suspension was at issue. The Court ultimately agreed with the CA’s assessment, explaining that under the Labor Code, an employer may suspend an employee—without pay and for up to 30 days—if the employee’s presence poses a threat to company operations or property.
In this case, the Court noted that JGC had reasonable grounds to believe the software belonged to the company at the time of the incident, as the IPO ruling on ownership came much later. Sillano’s act of restricting access to the programs, therefore, posed a tangible risk to company assets and justified his temporary suspension.
However, in a dissenting opinion, Associate Justice Japar B. Dimaampao questioned the legal basis of the suspension, arguing that the subsequent confirmation of Sillano’s ownership should have precluded JGC from taking such action or demanding access to the software.
Despite the disagreement, the majority ruling reinforces the principle that preventive suspension, when grounded in good faith and properly implemented, remains a valid management prerogative—even in cases where later developments shift the legal landscape.
In a decision penned by Associate Justice Samuel H. Gaerlan, the Court’s Third Division upheld the validity of JGC’s suspension of Santiago DJ. Sillano, citing that the action was justified at the time and in accordance with the Labor Code.
Sillano, a senior engineer at JGC, had developed several software programs during his tenure. When a dispute arose over who owned the intellectual property—Sillano claimed personal authorship, while JGC asserted company ownership—he activated security measures that rendered the programs unusable.
In response, JGC placed him under preventive suspension and asked him to explain his actions. The company also demanded he unlock the software and turn over the source codes. Sillano refused, insisting JGC had not yet established ownership of the programs.
The company later terminated him for disobedience and filed a case alleging breach of contract. Sillano, in turn, filed separate complaints against JGC, including for illegal suspension and dismissal. He also initiated proceedings before the Intellectual Property Office (IPO), which eventually ruled in his favor, confirming him as the rightful software owner.
While the Labor Arbiter initially sided with JGC and found the dismissal valid, the National Labor Relations Commission (NLRC) and the Court of Appeals (CA) both reversed that finding. They concluded that although JGC acted lawfully in suspending Sillano as a precaution, his dismissal was not justified.
The matter reached the Supreme Court, but only the validity of the preventive suspension was at issue. The Court ultimately agreed with the CA’s assessment, explaining that under the Labor Code, an employer may suspend an employee—without pay and for up to 30 days—if the employee’s presence poses a threat to company operations or property.
In this case, the Court noted that JGC had reasonable grounds to believe the software belonged to the company at the time of the incident, as the IPO ruling on ownership came much later. Sillano’s act of restricting access to the programs, therefore, posed a tangible risk to company assets and justified his temporary suspension.
However, in a dissenting opinion, Associate Justice Japar B. Dimaampao questioned the legal basis of the suspension, arguing that the subsequent confirmation of Sillano’s ownership should have precluded JGC from taking such action or demanding access to the software.
Despite the disagreement, the majority ruling reinforces the principle that preventive suspension, when grounded in good faith and properly implemented, remains a valid management prerogative—even in cases where later developments shift the legal landscape.
Aug 1, 2025
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