CASE DIGEST 1:

Waterouse Drug Corporation v. NLRC

Posted on April 2, 2013 by winnieclaire
Standard
G.R. No. 113271. October 16, 1997

Facts: Antonia Melodia Catolico was hired as a pharmacist by Waterous Drug Corp.
Catolico sold to YSP Inc. 10 bottles of Voren Tablets at P384 per unit. However, the normal
selling price is P320 per unit. Catolico overcharged by P64 per unit for a total of P640. YSP
sent a check payable to Catolico as a refund for the jacked-up price. It was sent in an
envelope addressed to her. Saldana, the clerk of Waterous Drug Corp. opened the envelope and
saw that there was a check for P640 for Catolico.

Waterous Drug Corp. ordered the termination of Catolico for acts of dishonesty.

NLRC: Dismissed the Petition. Evidence of respondents (check from YSP) being rendered
inadmissible, by virtue of the constitutional right invoked by complainants.

Petitioners: In the light of the decision in the People v. Marti, the constitutional protection
against unreasonable searches and seizures refers to the immunity of ones person from
interference by government and cannot be extended to acts committed by private individuals
so as to bring it within the ambit of alleged unlawful intrusion by the government.

Issue: W/N the check is admissible as evidence

Held: Yes.
Ratio: (People vs. Marti) Marti ruling: The Bill of Rights does not protect citizens from
unreasonable searches and seizures perpetrated by private individuals.
It is not true, as counsel for Catolico claims, that the citizens have no recourse against such
assaults. On the contrary, and as said counsel admits, such an invasion gives rise to both
criminal and civil liabilities. Despite this, the SC ruled that there was insufficient evidence of
cause for the dismissal of Catolico from employment Suspicion is not among the valid causes
provided by the Labor Code for the termination of Employment.

CASE DIGEST 2:

WATEROUS DRUG VS. NLRC [280 SCRA 735 ; G.R.NO.

113271; 16 OCT 1997]
Tuesday, February 03, 2009 Posted by Coffeeholic Writes
Labels: Case Digests, Political Law

Facts: Catolico was hired as a pharmacist by petitioner Waterous Drug

Corporation on 15 August 1988. On 31 July 1989,
Catolicoreceived a memorandum from WATEROUS Vice President-General Manager
Emma R. Co warning her not to dispense medicine to employees chargeable to the
latter's accounts because the same was a prohibited practice. On the same date, Co
issued anothermemorandum to Catolico warning her not to negotiate with suppliers
of medicine without consulting the Purchasing Department, as this would impair the
company's control of purchases and, besides she was not authorized to deal directly
with the suppliers.

As regards the first memorandum, Catolico did not deny herresponsibility but
explained that her act was "due to negligence," since fellow employee Irene Soliven
"obtained the medicines in bad faith and through misrepresentation when she
claimed that she was given a charge slip by the Admitting Dept." Catolico then
asked the company to look into the fraudulent activities of Soliven.

In a memorandum dated 21 November 1989, WATEROUS Supervisor Luzviminda E.

Bautro warned Catolico against the "rush delivery ofmedicines without the proper
documents." On 29 January 1990, WATEROUS Control Clerk Eugenio Valdez
informed Co that he noticed an irregularity involving Catolico and Yung Shin
Pharmaceuticals, Inc.

Forthwith, in her memorandum dated 37 January 1990, Co asked Catolico to

explain, within twenty-four hours, her side of the reported irregularity. Catolico
asked for additional time to give her explanation, and she was granted a 48-hour
extension from 1 to 3 February 1990. However, on 2 February 1990, she was
informed that effective 6 February 1990 to 7 March 1990, she would be placed on
preventive suspension to protect the interests of the company.

In a letter dated 2 February 1990, Catolico requested access to the file containing
Sales Invoice No. 266 for her to be able to make a satisfactory explanation. In said
letter she protested Saldaa'sinvasion of her privacy when Saldaa opened an
envelope addressed to Catolico.
In a letter to Co dated 10 February 1990, Catolico, through her counsel, explained
that the check she received from YSP was a Christmas gift and not a "refund of
overprice." She also averred that the preventive suspension was ill-motivated, as it
sprang from an earlier incident between her and Co's secretary, Irene Soliven.

On 5 March 1990, WATEROUS Supervisor Luzviminda Bautro, issued

amemorandum notifying Catolico of her termination. On 5 May 1990, Catolico filed
before the Office of the Labor Arbiter a complaint for unfair labor practice, illegal
dismissal, and illegal suspension. In his decision of 10 May 1993, Labor Arbiter Alex
Arcadio Lopez found no proof of unfair labor practice against petitioners.
Nevertheless, he decided in favor of Catolico because petitioners failed to "prove
what alleged as complainant's dishonesty," and to show that any investigation was
conducted. Hence, the dismissal was without just cause and due process. He
thus declared the dismissal and suspension illegal but disallowed reinstatement.

Petitioners seasonably appealed from the decision and urged the NLRC to set it
aside because the Labor Arbiter erred in finding that Catolico was denied due
process and that there was no just cause to terminate her services.

In its decision of 30 September 1993, the NLRC affirmed the findings of the Labor
Arbiter on the ground that petitioners were not able to prove a just cause for
Catolico's dismissal from her employment. It found that petitioner's evidence
consisted only of the check of P640.00 drawn by YSP in favor of complainant, which
her co-employee saw when the latter opened the envelope. But, it declared that the
check was inadmissible in evidence pursuant to Sections 2 and 3(1 and 2) of Article
III of the Constitution. It concluded:

With the smoking gun evidence of respondents being rendered inadmissible, by

virtue of the constitutional right invoked by complainants, respondents' case falls
apart as it is bereft of evidence which cannot be used as a legal basis for
complainant's dismissal.

The NLRC then dismissed the appeal for lack of merit, but modified the dispositive
portion of the appealed decision by deleting the award for illegal suspension as the
same was already included in the computation of the aggregate of the awards in
the amount of P35,401.86.

Issue: Whether or Not the dismissal of the private respondent is in violation of

the Constitution, under the Bill of Rights.

Held: As to the first and second grounds, petitioners insist that Catolico had
been receiving "commissions" from YSP, or probably from other suppliers, and that
the check issued to her on 9 November 1989 was not the first or the last. They also
maintained that Catolico occupied a confidential position and that Catolico's receipt
of YSP's check, aggravated by her "propensity to violate company rules,"
constituted breach of confidence. And contrary to the findings of NLRC, Catolico was
given ample opportunity to explain her side of the controversy.

In her Comment, Catolico asserts that petitioners' evidence is too "flimsy" to justify
her dismissal. The check in issue was given to her, and she had no duty to turn it
over to her employer. Company rules do not prohibit an employee from accepting
gifts from clients, and there is no indication in the contentious check that it was
meant as a refund for overpriced medicines. Besides, the check was discovered in
violation of the constitutional provision on the right to privacy and communication;
hence, as correctly held by the NLRC, it was inadmissible in evidence.

Catolico was denied due process. Procedural due process requires that an employee
be apprised of the charge against him, given reasonable time to answer the charge,
allowed ample opportunity to be heard and defend himself, and assisted by a
representative if the employee so desires. Ample opportunity connotes every kind
of assistance that management must accord the employee to enable him to prepare
adequately for his defense, including legal representation. In the case at bar,
although Catolico was given an opportunity to explain her side, she was dismissed
from the service in the memorandum of 5 March 1990 issued by her Supervisor
after receipt of her letter and that of her counsel. No hearing was ever conducted
after the issues were joined through said letters.

Catolico was also unjustly dismissed. It is settled that the burden is on the
employer to prove just and valid cause for dismissing an employee, and its failure
to discharge that burden would result in a finding that the dismissal is unjustified. It
clearly appears then that Catolico's dismissal was based on hearsay information.
Catolico's dismissal then was obviously grounded on mere suspicion, which in no
case can justify an employee's dismissal. Suspicion is not among the valid causes
provided by the Labor Code for the termination of employment; and even the
dismissal of an employee for loss of trust and confidence must rest on substantial
grounds and not on the employer's arbitrariness, whims, caprices, or suspicion.
Besides, Catolico was not shown to be a managerial employee, to which class of
employees the term "trust and confidence" is restricted.

As regards the constitutional violation upon which the NLRC anchored its decision,
that the Bill of Rights does not protect citizens from unreasonable searches and
seizures perpetrated by private individuals. It is not true, as counsel for Catolico
claims, that the citizens have no recourse against such assaults. On the contrary,
and as said counsel admits, such an invasion gives rise to both criminal and civil
liabilities.

Finally, since it has been determined by the Labor Arbiter that Catolico's
reinstatement would not be to the best interest of the parties, he correctly awarded
separation pay to Catolico. Separation pay in lieu of reinstatement is computed at
one month's salary for every year of service. In this case, however, Labor Arbiter
Lopez computed the separation pay at one-half month's salary for every year of
service. Catolico did not oppose or raise an objection. As such, we will uphold the
award of separation pay as fixed by the Labor Arbiter.

WHEREFORE, the instant petition is hereby DISMISSED and the challenged decision
and resolution of the National Labor Relations Commission dated 30 September
1993 and 2 December 1993, respectively, in NLRC-NCR CA No. 005160-93 are
AFFIRMED, except as to its reason for upholding the Labor Arbiter's decision, viz.,
that the evidence against private respondent was inadmissible for having been
obtained in violation of her constitutional rights of privacy of communication and
against unreasonable searches and seizures which is hereby set aside.

CASE DIGEST 3:

WATEROUS DRUG CORPORATION

v.
NLRC
[GR 113271, 16 October 1997]
FACTS:
Antonia Melodia Catolico was hired as a pharmacist by
Wate ro u s D r u g C o r p o rati o n o n 1 5 Au g u st 1 9 8 8 . O n 3 1 J u l y 1989,
Catolico received a memorandum from Waterous Vice P re s i d e nt-
G e n e ra l M a n a ge r E m m a R . C o wa r n i n g h e r n o t to d is p e n s e
m e d i c i n e to e m p l o ye e s c h a rge a b l e to t h e l att e r s accounts because
the same was a prohibited practi ce. On the same date, Co issued another
memorandum to Catolico warning her not to negotiate with suppliers of medicine
without consulting the Purchasing Department, as this would impair the
co m p a ny s co nt ro l o f p u rc h a s e s a n d , b e s i d e s s h e wa s n o t
authorized to deal directly with the suppliers. As regards the first
memorandum, Catolico did not deny her responsibility but explained that her
act was due to negligence, since fellow employee Irene Soliven
obtained the medicines in bad faith and through misrepresentation when
she claimed that she was given a charge slip by the Admitting Department,
Catolico then a s ke d t h e co m p a ny to l o o k i nto t h e f ra u d u l e nt
a c ti v i ti e s o f Soliven. In a memorandum 9 dated 21 November 1989, Waterous
Supervisor Luzviminda E. Bautro warned Catolico a ga i n st t h e
r u s h d e l i ve r y o f m e d i c i n e s w i t h o u t t h e p ro p e r documents. On 29
January 1990, Waterous Control Clerk E u ge n i o Va l d ez in fo r m e d C o
t h at h e n o ti c e d a n i r re g u l a r i t y involving Catolico and Yung Shin
Pharmaceuti cals, Inc. Valdez ta l ke d to M s . C ato l i co re ga rd i n g
t h e c h e c k b u t s h e d e n i e d having received it and that she is unaware
of the overprice. However, upon conversati on with Ms. Saldana, EDRC
Espana Pharmacy Clerk, she confi rmed that the check amounti ng
toP640.00 was actually received by Ms. Catolico. As a matter of fact, Ms.
Catolico even asked Ms. Saldana if she opened the envelope containing
the check but Ms. Saldana answered her ta l a ga n g ga nya n , b u ka s .
I t ap p e a rs t h at t h e a m o u nt i n question (P640.00) had been pocketed by
Ms. Catolico. Fo r t h w i t h , i n h e r m e m o ra n d u m d ate d 3 1 J a n u a r y 1 9 90 ,
C o a s ke d C ato l i co to ex p l a i n , w i t h in 2 4 h o u rs , h e r s id e o f t h e
reported irregularity. Catolico asked for additional time to give her explanation,
and she was granted a 48-hour extension from 1 to 3 February 1990. However,
on 2 February 1990, she was informed that effecti ve 6 February 1990 to
7 March 1990, shewo u l d b e p l a c e d o n p re ve nti ve
s u s p e n s i o n to p ro te c t t h e interests of the company. In a letter dated
2 February 1990, Catolico requested access to the fi le containing Sales
Invoice266 for her to be able to make a sati sfactory explanati on. In said
letter she protested Saldaas invasion of her privacy when Saldaa opened an
envelope addressed to Catolico. In a letter15 to Co dated 10 February 1990,
Catolico, through her counsel, explained that the check she received from YSP was
a Christmas gift and not a refund of overprice. She also averred that the
preventi ve suspension was ill-moti vated, as it sprang from an earlier
incident between her and Cos secretary, Irene Soliven. On 5 March
1990, Waterous Supervisor Luzviminda Bautro, issued a memorandum
notifying Catolico of her terminati on. On 5 May 1990, Catolico fi led before
the Offi ce of the Labor Arbiter a complaint for unfair labor practi ce,
illegal d is m i s s a l , a n d i l l e ga l s u s p e n s i o n . I n h is d e c i s i o n o f 1 0 M ay
1993, Labor Arbiter Alex Arcadio Lopez found no proof of unfair labor practi ce
against Waterous. Nevertheless, he decided in favor of Catolico because
Waterous failed to prove what [they]alleged as complainants dishonesty,
and to show that any investigation was conducted. Hence, the dismissal was
without just cause and due process. He thus declared the dismissal and
suspension illegal but disallowed reinstatement, as it would not be to the best
interest of the parti es. Accordingly, he awarded separati on pay to
Catolico computed at one-half months payfo r e ve r y ye a r o f s e r v i c e ;
b a c k wa ge s fo r o n e ye a r ; a n d t h e additional sum of P2,000.00 for illegal
suspension representing 30 days work; for a total of P35,401.86. Waterous
seasonably appealed from the decision and urged the NLRC to set it aside. In its
decision of 30 September 1993, the NLRC affi rmed the findings of the Labor
Arbiter on the ground that petitioners were not able to prove a just cause for
Catolicos dismissal from her employment. and thus dismissed the
appeal for lack of merit, but modified the dispositive portion of the appealed
decision by d e l e ti n g t h e awa rd fo r i l l e ga l s u s p e n s i o n a s t h e s am e
wa s already included in the computati on of the aggregate of the awards
in the amount of P35,401.86. Their motion for reconsideration having been
denied, Waterous filed the special civil action for certiorari with the Supreme
Court.
ISSUE:
Whether Waterous act of opening an envelope from one of its regular
suppliers is contrary to the injunction against unreasonable search and seizure
and a persons right to privacy of communication.
HELD:
I n l i g h t o f t h e d e c i s i o n i n t h e P e o p l e v. M a r ti , t h e
consti tuti onal protecti on against unreasonable searches and seizures
refers to the immunity of ones person from interference by government and
cannot be extended to acts committed by private individuals so as to
bring it within the ambit of alleged unlawful intrusion by the
government. The Court finds no reason to revise the doctrine laid down in
People vs. Marti that the Bill of Rights does not protect citi zens from
unreasonable searches and seizures perpetrated by private i n d i v i d u a l s .
I t i s n o t t r u e t h at t h e c i ti ze n s h ave n o re co u rs e against such assaults.
On the contrary, such an invasion gives rise to both criminal and civil
liabiliti es. Herein, there was no violation of the right of privacy of
communication, and Waterouswas justi fied in opening an envelope from
one of its regular s u p p l i e rs a s i t co u l d a s s u m e t h at t h e l e tt e r wa s
a b u s in e s s communicati on in which it had an interest. However,
Catolico was denied due process. Procedural due process requires that
a n e m p l o ye e b e ap p r i s e d o f t h e ch a rge a ga i n st h i m , g i ve n
reasonable time to answer the charge, allowed amply opportunity to be heard
and defend himself, and assisted by a representati ve if the employee so
desires. Ample opportunity co n n o te s e ve r y k i n d o f a s s i sta n c e t h at
m a n a ge m e nt m u st accord the employee to enable him to prepare
adequately for his defense, including legal representati on. Although
Catolico was given an opportunity to explain her side, she was dismissed from
the service in the memorandum of 5 March 1990 issued by her Supervisor after
receipt of her letter and that of her counsel. No hearing was ever conducted
after the issues were joined through said letters. The Supervisor s
memorandum spoke of evidence in [Waterous] possession, which were not,
however, submitted. What the evidence other than the sales invoice
a n d t h e c h e c k we re , o n l y t h e S u p e r v i s o r k n e w. C ato l i co s dismissal
then was grounded on mere suspicion, which in no ca s e ca n
j u sti f y an e m p l o ye e s d is m i s s a l . S u s p i c i o n i s n o t a m o n g t h e va l i d
ca u s e s p ro v i d e d b y t h e L ab o r C o d e fo r t h e te r m i n ati o n o f
e m p l o y m e nt ; an d e ve n t h e d is m i s s a l o f an employee for loss of trust
and confidence must rest on substanti al grounds and not on the employers
arbitrariness, whims, caprices, or suspicion. Besides, Catolico was not shown to
be a managerial employee, to which class of employees the term trust
and confidence is restricted. Thus, the decision and resoluti on of the NLRC are
affi rmed except as to its reason for upholding the Labor Arbiter s
decision, viz., that the evidence against Catolico was inadmissible for
having been obtained in violati on of her consti tuti onal rights of privacy
of communication and against unreasonable searches and seizures, which was set
aside

CASE DIGEST 4:
Facts: Antonia Melodia Catolico was hired as a pharmacist by Waterous Drug Corp.
Catolico sold to YSP Inc. 10 bottles of Voren Tablets at P384 per unit. However, the normal
selling price is P320 per unit. Catolico overcharged by P64 per unit for a total of P640. YSP
sent a check payable to Catolico as a refund for the jacked-up price. It was sent in an
envelope addressed to her. Saldana, the clerk of Waterous Drug Corp. opened the envelope and
saw that there was a check for P640 for Catolico.

Waterous Drug Corp. ordered the termination of Catolico for acts of dishonesty.

NLRC: Dismissed the Petition. Evidence of respondents (check from YSP) being rendered
inadmissible, by virtue of the constitutional right invoked by complainants.

Petitioners: In the light of the decision in the People v. Marti, the constitutional protection
against unreasonable searches and seizures refers to the immunity of ones person from
interference by government and cannot be extended to acts committed by private individuals
so as to bring it within the ambit of alleged unlawful intrusion by the government.

Issue: W/N the check is admissible as evidence

Held: Yes.
Ratio: (People vs. Marti) Marti ruling: The Bill of Rights does not protect citizens from
unreasonable searches and seizures perpetrated by private individuals.
It is not true, as counsel for Catolico claims, that the citizens have no recourse against such
assaults. On the contrary, and as said counsel admits, such an invasion gives rise to both
criminal and civil liabilities. Despite this, the SC ruled that there was insufficient evidence of
cause for the dismissal of Catolico from employment Suspicion is not among the valid causes
provided by the Labor Code for the termination of Employment.